FBP: Solid Organic Growth Should Be Boosted by Pending Acquisition of Banco Santander Puerto Rico; Raising EPS Estimates and Price Target; Upgrading to Outperform Rating.
First BanCorp announced an agreement to acquire Banco Santander Puerto Rico (BSPR) in an all-cash transaction totaling roughly $1.1 billion. The transaction will add roughly $6.2 billion of assets, $3.1 billion of loans and $5.0 billion of deposits, along with 27 branch locations. After the transaction closes, First BanCorp will have on a pro forma basis, $17.6 billion in assets, $12.0 billion in loans, $14.2 billion in deposits, and 97 branches. We expect FBP to consolidate some of the branches, as there is considerable overlap in the branch networks. However, the number of branch closures has not yet been determined.