First BanCorp. New

Hello and welcome to today's first Bancorp 2Q 2022 financial results. My name is Elliot and I'll be coordinating your call today. If you would like to register a question during the presentation, you may do so by pressing star followed by one on your telephone keypad. If you'd like to withdraw your question, please press star followed by two. I'd now like to turn the call over to Ramon Rodriguez, Corporate Strategy and Investor Relations Officer. The floor is yours, please go ahead.

Thank you, Elliot. 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 second quarter of 2022. 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 calls, 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 fbbinvestor.com. At this time, I'd like to turn the call over to our CEO, Aurelio Alemán.

Thank you, Ramon, and good morning, everyone, and thanks for joining us today for DNA's call. Let's please move to slide four to discuss the highlights of the quarter. As we reported, we continued to perform exceptionally well during the second quarter. We earned $74.7 million in net income, or $0.38 per share, and delivered our fifth consecutive increase in adjusted pre-tax pre-provision income by reaching a record of $118.8 million during the quarter. This result was achieved under a quite challenging global economic backdrop and definitely demonstrates our capacity to execute and responsibly grow regardless of the operating environment. I would like to thank all our teams in Puerto Rico, Florida, and the ECR for the commitment and execution during the first half of the year. Net interest income increased 5.7 percent late quarter to 196.2 million, and the margin expanded by 21 basis points to 4.02. Also, we recorded a provision for credit losses of 10 million, primarily reflecting an overall increase in the loan portfolio and increased uncertainty that is reflected in the forecast of certain microeconomic variables and the impact on qualitative reserve. Asset quality continued to improve during the quarter, with non-performing assets decreasing by $9 million, now to $147 million, driven by reductions in non-accrual residential mortgage loans and paydowns of non-accrual commercial loans. The ratio of the ACL for loans and final leases to loans held for investments slightly increased to 2.25% during the quarter. On the capital front, we continue to execute on our capital deployment plan and repurchase approximately 7 million shares of common stock for a total purchase price of $100 million. This was done under the previously announced $350 million stock repurchase program. We ended the second quarter with a 17.2% commodity Tier 1, quite strong, leaving room to execute on our established capital plan over the next quarters, obviously taking into consideration any change in market conditions. Let's move to slide five to review deposits and loan performance. We continue to register loan growth across our targeted business segment during the quarter. These are consumer and commercial. Loan portfolio balances other than PPP loans grew by $144 million when compared to first quarter, driven by increases of $131 million in consumer loans and $59 million in construction and commercial loans, offset by a decrease of $45 million in residential mortgages. Total loan originations for the quarter were strong, which excluding credit card utilization activities, reached $1.4 billion. an increase of $281 million when compared to the first quarter. This is primarily attributed to higher commercial and consumer loan originations. I have to say that now quarterly loan origination activity is above pre-pandemic levels, and we expect that this continues to be sustained under the current market conditions, which should result in additional loan growth to the second half of the year. Core deposits, net of government and broker decreased by $360 million when compared to the first quarter. On the other hand, government deposit increased $176 million. Deposit market growth in Puerto Rico, I will say, decelerated during the first half of the year after 2020 and 2021 significant increases. However, when we look at average deposit balance, they're still 31% above pre-pandemic levels. Let's move to slide five, to some additional outlook. Well, definitely when we look at, there's uncertainty in the global market conditions when we consider all geopolitical tensions, inflation, what's going to happen with future part of interest rates, and obviously that impact any operating background, notwithstanding our enhanced capital position and liquidity profile coupled with, I have to say, strong economic tailwinds in the main market in Puerto Rico, continue to support our growth thesis. In Puerto Rico, the labor market improved again with labor force above pre-pandemic levels and the unemployment rate reaching a multi-decade low of 6.2% in May. The Economic Activity Index, which is the indicator that is highly correlated to GMP, has continued to sustain an upward trend and already surpassed pre-pandemic levels. The resolution of the government debt process definitely will allow government officials to shift their efforts toward facilitating the deployment of the 50 billion still obligated disaster and pandemic relief funds still pending to be disbursed. The adequate use of these funds will be key to resolve the longstanding structural issues and will support economy going forward. Our strategic focus remains centered on providing the best omni-channel experience to our clients. During the quarter, we continue our investment in our digital tools and services. Digital engagement across all our platforms continues to improve. Retail banking users grew by 38% in the quarter. and mobile banking business, digital banking users increased by 50% since the application was launched in April. We continue to capture over 40% of all deposit transactions to digital and self-service channels. In addition, this quarter, we begin a partnership with an established fintech firm to provide a fully digital commercial lending platform for small business loans. We now can process consumer mortgages, small business loan applications to service digital platforms. All these digital investments have allowed us to expand our distribution reach beyond physical infrastructure while still optimizing our existing branch network, which will include the execution of two additional branch consolidation opportunities during the second half of 2022. In summary, we're very pleased. We continue to make great strides advancing the franchise and achieving our strategic objectives. Our Fortress balance sheet, complemented by positive tailwinds in our main market, should contribute to mitigate the rising market challenges across the globe and should allow us to continue supporting our clients and delivering value to shareholders. With that, I would like to turn the call over to Orlando to provide more details. on our result. Thanks to all.