First BanCorp, the bank holding company for FirstBank Puerto Rico, announced the reversal of a significant portion of the valuation allowance recorded against the deferred tax assets of FirstBank.
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The reversal results in the recognition of a one-time income tax benefit in the fourth quarter of 2014 of approximately $302.9 million, or $1.42 per diluted share.
First BanCorp has now concluded that, as of December 31, 2014, it is more likely than not that FirstBank will generate sufficient taxable income within the applicable net operating loss to realize a significant portion of its deferred tax assets.
This conclusion is based on FirstBank’s completion of a sixth consecutive quarter of profitability and forecast of future profitability.
As a result of the partial reversal, the First BanCorp’s deferred tax asset amounted to $313 million as of December 31, 2014, net of a valuation allowance of $204.6 million.
As a result of this adjustment First BanCorp’s results for the fourth quarter and year ended December 31, 2014 are higher than the results announced February 5. As revised, the corporation’s net income for the fourth quarter of 2014 increased to $330.8 million, or $1.56 per diluted share, compared with the $26.3 million net income, or $0.12 per diluted share, previously announced.
This result compares with $23.2 million, or $0.11 per diluted share, for the third quarter of 2014 and $14.8 million, or $0.07 per diluted share, for the fourth quarter of 2013.
The revised net income for the year ended December 31, 2014 amounted to $392.3 million, or $1.87 per diluted share, compared with the $87.8 million net income, or $0.42 per diluted share, previously announced. This result compares to a net loss of $164.5 million, or $0.80 loss per diluted share, for the year ended December 31, 2013.
The revised book value per common share as of December 31, 2014 was $7.68 (the corporation disclosed book value per share of $6.25 in the Feb. 5 earnings release) and the revised tangible book value per common share was $7.45 (the corporation disclosed tangible book value per common share of $6.02 in the February 5 earnings release).
The revised tangible common equity ratio as of December 31, 2014 was 12.51% (the corporation disclosed book value per share of 10.35% in the February, 5 earnings release). ■