STOCKHOLDERS' EQUITY

6 Months Ended

Jun. 30, 2022

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY [Text Block]

NOTE 14 – STOCKHOLDERS’ EQUITY

Stock Repurchase Programs

On April 27, 2022, the Corporation announced that its Board of Directors approved a stock repurchase program, under which the Corporation may repurchase up to $350 million of its outstanding common stock, expected to be executed through the next four quarters, which commenced 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. During the second quarter of 2022, the Corporation repurchased 7,069,263 shares of common stock through open market transactions at an average purchase price of $14.15 per share for a total price of approximately $100 million, under this stock repurchase program. The shares received are held as treasury stock. As of June 30, 2022, the Corporation has remaining authorization to repurchase approximately $250 million of common stock.

Common Stock

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

		Total Number of Shares
Common stock outstanding, beginning balance		201,826,505
	Common stock repurchased (1)	(10,680,890)
	Common stock reissued from treasury stock	491,085
	Restricted stock forfeited	(10,364)
Common stock outstanding, ending balance		191,626,336
(1)	Consisted of 7,069,263 shares of common stock repurchased in the open market at an average price of $14.15 per share for a total purchase price of approximately $100 million under the $350 million stock repurchase program announced in April 2022; 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 under the prior $300 million stock repurchase program which was completed during the first quarter of 2022 and; 201,930 shares of common stock surrendered to cover officers' payroll and income taxes.

For the quarter and six-month period ended June 30, 2022, total cash dividends declared on shares of common stock amounted to $23.4 million and $43.3 million, respectively, compared to $15.0 million and $30.3 million for the same periods in 2021. On July 21, 2022 the Corporation’s Board of Directors declared a quarterly cash dividend of $0.12 per common share payable on September 9, 2022 to shareholders of record at the close of business on August 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 have been subsequently issued or were outstanding as of June 30, 2022. For the quarter and six-month period ended June 30, 2021, total cash dividends declared on shares of preferred stock amounted to $0.7 million and $1.3 million, respectively.

Treasury stock

During the first six months of 2022 and 2021, the Corporation withheld and recognized in treasury stock an aggregate of 201,930 shares and 210,572 shares, respectively, of the restricted stock and performance units that vested during those periods, for income tax withholding purposes. Also held as treasury stock are the 10,478,960 shares of common stock repurchased during the first six months of 2022 as part of the stock repurchase programs described above. As of June 30, 2022 and December 31, 2021, the Corporation had 32,036,780 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 of June 30, 2022 and December 31, 2021. There were no transfers to the legal surplus reserve during the first six months of 2022.