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1 First BanCorp News Release • • • • • FIRST BANCORP . ANNOUNCES EARNINGS FOR THE QUARTER ENDED JUNE 30 , 2021 Net income of $ 70.6 million , or $ 0.33 per diluted share , for the second quarter of 2021 , compared to $ 61.2 million , or $ 0.28 per diluted share , for the first quarter of 2021. The net income for the second and first quarters of 2021 included the following items of note : Provision for credit losses was a net benefit of $ 26.2 million ( $ 16.3 million after - tax , or an increase of $ 0.08 per diluted share ) for the second quarter of 2021 , primarily driven by improvements in macroeconomic factors and lower loans outstanding . The provision for credit losses for the first quarter of 2021 was a net benefit of $ 15.3 million ( $ 9.5 million after - tax , or an increase of $ 0.04 per diluted share ) . Merger and restructuring costs of $ 11.0 million ( $ 6.9 million after - tax , or a decrease of $ 0.03 per diluted share ) for the second quarter of 2021 associated with the acquisition of Banco Santander Puerto Rico ( " BSPR " ) , compared to $ 11.3 million ( $ 7.0 million after - tax , or a decrease of $ 0.03 per diluted share ) for the first quarter of 2021 . Income before income taxes of $ 110.7 million for the second quarter of 2021 , compared to $ 89.2 million for the first quarter of 2021 . On a non - GAAP basis , adjusted pre - tax , pre - provision income of $ 96.6 million for the second quarter of 2021 , compared to $ 86.4 million for the first quarter of 2021 . Net interest income increased by $ 8.5 million to $ 184.8 million for the second quarter of 2021 , compared to $ 176.3 million for the first quarter of 2021 , driven primarily by an increase of approximately $ 4.8 million related to interest income realized from deferred interests and discounts recognized on certain commercial and construction loans paid - off during the second quarter . Net interest income also benefited from a growth in the average balance of investment securities , a lower premium amortization expense on U.S. agencies mortgage - backed securities ( " MBS " ) , the positive effect of one additional day in the second quarter , and a decrease in the average cost of deposits . Net interest margin was 3.81 % for the second quarter of 2021 , compared to 3.91 % for the first quarter of 2021. The decrease was primarily attributable to a change in asset mix resulting from average low - yielding cash balances and investment securities increasing $ 1.4 billion to 41 % of total average interest - earning assets in the second quarter , compared to 36 % in the first quarter , associated with the continued strong deposit growth . In addition , the average total loan portfolio balance during the second quarter declined $ 207.5 million to 59 % of total average interest - earning assets , compared to 64 % in the first quarter . Non - interest income decreased by $ 1.1 million to $ 29.9 million for the second quarter of 2021 , compared to $ 31.0 million for the first quarter of 2021. The decrease was driven by the positive effect in the first quarter of seasonal contingent insurance commissions of $ 3.3 million , partially offset by an increase of approximately $ 2.0 million in fee income from merchant , credit and debit cards , automated teller machines ( " ATMs " ) and point - of - sale ( " POS " ) transactions . Non - interest expenses decreased by $ 3.1 million to $ 130.2 million for the second quarter of 2021 , compared to $ 133.3 million for the first quarter of 2021. Total non - interest expenses for the second quarter of 2021 included $ 11.0 million of merger and restructuring costs , compared to $ 11.3 million in the first quarter of 2021 , as well as $ 1.1 million of COVID - 19 pandemic - related expenses , compared to $ 1.2 million in the first quarter of 2021. Adjusted for those costs , total non - interest expenses decreased by $ 2.8 million compared to the first quarter of 2021 , primarily related to declines in other real estate owned ( " OREO " ) losses and in employees ' compensation and benefits expenses .