Card Portfolio Purchase Fuels Earnings at First BanCorp

First BanCorp (FBP) in San Juan, Puerto Rico, reported its second straight quarterly profit.

The $13.1 billion-asset company earned $19.1 million in the third quarter, compared with a net loss of $24 million a year earlier. Its earnings per share totaled 9 cents, compared with a loss of $1.46 a year earlier, the company said Wednesday.

First BanCorp completed the acquisition of its credit card portfolio from Bank of America (BAC) unit FIA Card Services in late May. The portfolio had roughly $400 million in outstanding balances and about 150,000 active relationships. (http://www.americanbanker.com/issues/177_89/first-bancorp-puerto-rico-credit-card-1049116-1.html) The acquisition boosted company's net interest income and noninterest income, improved its efficiency ratio, and provided new cross-selling opportunities, Aurelio Alemán, First BanCorp's president and chief executive, said in a press release.

The card portfolio increased the average balance of consumer loans by $241.4 million and contributed to a $12.4 million increase in interest income. Net interest income rose 33% from a year earlier, to $125.5 million. The net interest margin expanded by 123 basis points from a year earlier, to 3.98%.

First Bancorp's noninterest income rose 8% from a year earlier, to $15.1 million. The results included an increase of $2 million in interchange and other related fees tied to the credit card portfolio acquisition.

Noninterest expenses rose almost 11% from a year earlier, to $91.8 million. The quarter included $3.1 million in expenses tied to the card portfolio, such as servicing the portfolio, the rewards program and professional service fees.

The company's loan-loss provision fell 37% from a year earlier, to $29 million.