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STOCKHOLDERS' EQUITY
 3 Months Ended
Mar. 31, 2022
Stockholders' Equity Note [Abstract]  
STOCKHOLDERS' EQUITY [Text Block]

NOTE 15 – STOCKHOLDERS’ EQUITY

 

Stock Repurchase Program

 

During the first quarter of 2022 the Corporation completed the $300 million stock repurchase program approved by the Board of Directors on April 26, 2021 by purchasing though open market transactions 3,409,697 million shares of common stock for a total purchase price of $50 million that remained in the program.

 

On April 27, 2022, the Corporation announced that its Board of Directors approved a new stock repurchase program, under which the Corporation may repurchase up to $350 million of its outstanding common stock, to be executed through the next four quarters, commencing in the second quarter of 2022. Repurchases under the program may be executed through open market purchases, accelerated share repurchases and/or privately negotiated transactions or plans, including plans complying with Rule 10b5-1 under the Exchange Act. The Corporation’s common 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. The program does not obligate the Corporation to acquire any specific number of shares. 

 

Common Stock

 

The following table shows the change in shares of common stock outstanding in the first quarter of 2022:

 

 

 

Quarter Ended

 

March 31, 2022

 

 

 

 

 

Common stock outstanding, beginning balance

201,826,505

 

 

Common stock repurchased (1)

(3,611,627)

 

 

Common stock reissued

489,085

 

 

Restricted stock forfeited

(3,092)

 

Common stock outstanding, ending balance

198,700,871

 

 

 

 

 

 

(1)

Includes 201,930 shares of common stock surrender to cover officers' payroll and income taxes and 3,409,697 shares of common stock repurchased in the open market at an average price of $14.66 for a total purchase price of approximately $50 million.

For the quarters ended March 31, 2022 and 2021, total cash dividends declared on shares of common stock amounted to $19.9 million and $15.3 million, respectively. On April 27, 2022, the Corporation’s Board of Directors declared a quarterly cash dividend of $0.12 per common share, which represented an increase of $0.02 per common share, or a 20% increase from the immediate preceding quarter’s dividend level. The dividend is payable on June 10, 2022 to shareholders of record at the close of business on May 25, 2022. 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.

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.

 

On November 30, 2021, the Corporation redeemed all of its 1,444,146 outstanding shares of Series A through Series E Preferred Stock for its liquidation value of $25 per share of $36.1 million. The difference between the liquidation value and net carrying value was $1.2 million, which was recorded as a reduction to retained earnings in 2021. The redeemed preferred stock shares were not listed on any securities exchange or automated quotation system. No shares of preferred stock were outstanding as of March 31, 2022. For the quarter ended March 31, 2021, total cash dividends declared on shares of preferred stock amounted to $0.7 million.

Treasury stock

 

During the first quarter of 2022, the Corporation withheld an aggregate of 201,930 shares (first quarter of 2021 - 194,471 shares) of the restricted stock and performance units that vested during the quarter to cover the officers’ payroll and income tax liabilities; these shares are held as treasury stock. Also held as treasury stock are the 3,409,697 shares of common stock repurchased in the first quarter of 2022 as part of the $300 million stock repurchase program authorized by the Corporation’s Board of Directors in April 2021. During the first quarter of 2022, a total of 489,085 common shares issued in connection with restricted stock and performance shares awards, were reissued from treasury shares. As of March 31, 2022 and December 31, 2021, the Corporation had 24,962,245 and 21,836,611 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 $137.6 million as of each March 31, 2022 and December 31, 2021. There were no transfers to the legal surplus reserve during the quarter ended March 31, 2022.