Company: FirstCaribbean International Bank Limited
Symbol: FCI
Description: They are a leading financial institution operating throughout the English and Dutch-speaking Caribbean with a strong balance sheet and regionally-leading digital banking capabilities.
Trade Date: 4/20
Shares: 9.6 million
Price Range: $22.00-$25.00
Underwriter(s): Barclays, UBS Investment Bank, CIBC Capital Markets
Terms Added: 4-10-18
Business: Their team, extensive branch network, ongoing investments in technology and unwavering client focus are competitive differentiators that enable them to maintain our leadership in the Caribbean banking sector, address the needs of our clients, and meet their strategic and financial objectives.
They are a leader in three primary markets of Barbados, the Bahamas and the Cayman Islands based on total deposits and total loans as of January 31, 2018. Our total assets in our primary markets represented approximately two-thirds of our total assets at the end of the first quarter of 2018. In addition to their primary markets, they operate in our key growth markets of Jamaica, Trinidad and Tobago and certain countries in the Dutch Caribbean, primarily Curaçao and Aruba. In total, they have a presence in 17 countries and territories. Through their three core business segments: (i) Retail and Business Banking (“RBB”), (ii) Corporate and Investment Banking (“CIB”), and (iii) Wealth Management (“WM”), they provide individual and business clients with a full range of products and services, including deposits, loans, credit cards, foreign exchange, online and mobile banking, fund administration and trust services. In their markets, business segments and products and services, we are focused on providing their clients with modern digital banking services and supporting our back office processes with current and efficient technology platforms. To this end, they have invested over $100 million in technology over the past five years, enhancing the scalability of our platform and positioning them for growth in all of their markets.
Financials: Their total interest income was $415.9 million, $413.4 million, and $424.9 million and their non-interest income was $176.5 million, $177.9 million and $157.3 million in 2015, 2016, and 2017, respectively. Their net income was $113.1 million, $160.2 million and $127.6 million in 2015, 2016, and 2017, respectively. In the last quarter of 2016 and 2017, their interest income was $102.9 million and $111.1 million, their non-interest income was $40.5 million and $9.8 million and their net income was $32.4 million and $4.2 million, respectively. The decrease in net income was largely a function of the impact of $32.6 million of accumulated foreign exchange loss transferred from OCI in shareholders’ equity as a result of the sale in their foreign currency securities portfolio during the first quarter of 2018. The decrease in net income in 2017 also reflects $9.8 million in costs related to the effect of two hurricanes and income statement impact of $17.6 million of foreign exchange gains and losses relating to their securities portfolio.
Dividends: Following this offering, they intend to pay quarterly cash dividends on common shares at an initial amount of approximately $1.50 per share on an annualized basis, for an approximately 6.4% annual return, based on the midpoint of the offering range.
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