XML 40 R29.htm IDEA: XBRL DOCUMENT

STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2021

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY [Text Block]

NOTE 21 – STOCKHOLDERS’ EQUITY

Common Stock

As of September 30, 2021 and December 31, 2020, the Corporation had 2,000,000,000 authorized shares of common stock with a par value of $0.10 per share. As of September 30, 2021 and December 31, 2020, there were 223,655,186 and 223,034,348 shares issued, respectively, and 206,495,900 and 218,235,064 shares outstanding, respectively. Refer to Note 4 – Stock Based Compensation, above for information about transactions related to common stock under the Omnibus Plan.

On October 22, 2021, the Corporation announced that its Board of Directors had declared a quarterly cash dividend of $0.10 per common share, which represents an increase of 43% or $0.03 per common share compared to its most recent dividend paid in September 2021. The dividend is payable on December 10, 2021 to shareholders of record as the close of business on November 26, 2021. For the quarter and nine-month period ended September 30, 2021, total cash dividends declared on shares of common stock amounted to $14.6 million and $44.9 million, respectively, compared to $11.0 million and $32.8 million for the same periods of 2020. The Corporation intends to continue to pay quarterly dividends on common stock. However, the Corporation’s common stock dividends, including the declaration, timing and amount, remain subject to consideration and approval by the Corporation’s Board Directors at the relevant times.

Stock Repurchase Program

On April 26, 2021, the Corporation announced that its Board of Directors approved a stock repurchase program, under which the Corporation may repurchase up to $300 million of its outstanding stock, commencing in the second quarter of 2021 through June 30, 2022. Repurchases under the program may be executed through open market purchases, accelerated share repurchases and/or privately negotiated transactions or plans, including under plans complying with Rule 10b5-1 under the Exchange Act. The Corporation’s stock repurchase program is subject to various factors, including the Corporation’s capital position, liquidity, financial performance and alternative uses of capital, stock trading price, and general market conditions. The repurchase program may be modified, extended, suspended, or terminated at any time at the Corporation’s discretion and includes the redemption of the Corporation’s outstanding shares of preferred stock, as further discussed below.

The following table shows the activity of open market and privately negotiated repurchases of shares during the second and third quarters of 2021:

			Number of Shares				Average Repurchase Price Per Share		Amount (In thousands)
2021:
	Second quarter		7,962,647			$	12.56		$	100,000
	Third quarter		4,158,806				12.02			50,000
			12,121,453	(1)					$	150,000
(1)	Includes 7,621,453 shares of common stock repurchased in the open market at an average price of $12.36 for a total purchase price of approximately $94.2 million, and 4,500,000 shares of common stock repurchased through privately negotiated transactions at an average price of $12.40 for a total purchase price of approximately $55.8 million.

The shares received are held as treasury stock. As of September 30, 2021, the Corporation has remaining authorization to repurchase approximately $150 million of common and preferred stock under the stock repurchase program.

Preferred Stock

The Corporation has 50,000,000 authorized shares of preferred stock with a par value of $1.00, redeemable at the Corporation’s option, subject to certain terms. This stock may be issued in series and the shares of each series have such rights and preferences as are fixed by the Board of Directors when authorizing the issuance of that particular series. As of September 30, 2021, the Corporation had five outstanding series of non-convertible, non-cumulative perpetual monthly income preferred stock: 7.125% non-cumulative perpetual monthly income preferred stock, Series A; 8.35% non-cumulative perpetual monthly income preferred stock, Series B; 7.40% non-cumulative perpetual monthly income preferred stock, Series C; 7.25% non-cumulative perpetual monthly income preferred stock, Series D; and 7.00% non-cumulative perpetual monthly income preferred stock, Series E. The liquidation value per share is $25.

Effective January 17, 2012, the Corporation delisted all of its outstanding series of non-convertible, non-cumulative perpetual monthly income preferred stock from the New York Stock Exchange. The Corporation has not arranged for listing and/or registration on another national securities exchange or for quotation of the Series A through E preferred stock in a quotation medium. The Corporation has continued to pay monthly dividend payments on the non-cumulative perpetual monthly income preferred stock. For each of the quarter, and nine-month periods ended September 30, 2021 and 2020, total cash dividends declared on shares of preferred stock amounted to $0.7 million and $2.0 million, respectively.

On October 21, 2021, the Corporation announced that it has elected to redeem all of its $36.1 million in outstanding shares of the Corporation Series A through E Noncumulative Perpetual Monthly Income Preferred Stock. The redemption date for each of the Series A through E Preferred Stock will be November 30, 2021 (the “Redemption Date”). The redemption price for each Series A through E Preferred Stock is $25.00 per share, plus an amount equal to any dividends that have accrued but not been paid as of the Redemption Date.

Treasury stock

During the first nine months of 2021 and 2020, the Corporation withheld an aggregate of 213,757 shares and 51,814 shares, respectively, of the restricted stock and performance units that vested during those periods, to cover the officers’ payroll and income tax withholding liabilities; these shares are held as treasury stock. Also held as treasury stock are the 12,121,453 shares of common stock repurchased in 2021 as part of the $300 million stock repurchase program. As of September 30, 2021 and December 31, 2020, the Corporation had 17,159,286 and 4,799,284 shares held as treasury stock, respectively.

FirstBank Statutory Reserve (Legal Surplus)

The Banking Law of the Commonwealth of Puerto Rico requires that a minimum of 10% of FirstBank’s net income for the year be transferred to a legal surplus reserve until such surplus equals the total of paid-in-capital on common and preferred stock. Amounts transferred to the legal surplus reserve from retained earnings are not available for distribution to the Corporation, including for payment as dividends to the stockholders, without the prior consent of the Puerto Rico Commissioner of Financial Institutions. The Puerto Rico Banking Law provides that, when the expenditures of a Puerto Rico commercial bank are greater than receipts, the excess of the expenditures over receipts must be charged against the undistributed profits of the bank, and the balance, if any, must be charged against the legal surplus reserve, as a reduction thereof. If the legal surplus reserve is not sufficient to cover such balance in whole or in part, the outstanding amount must be charged against the capital account and the Bank cannot pay dividends until it can replenish the legal surplus reserve to an amount of at least 20% of the original capital contributed. FirstBank’s legal surplus reserve, included as part of retained earnings in the Corporation’s consolidated statements of financial condition, amounted to $109.3 million as of each of September 30, 2021 and December 31, 2020. There were no transfers to the legal surplus reserve during the first nine months of 2021.