First BanCorp.

What they do

First BanCorp. is a Puerto Rico-chartered financial holding company supervised by the Federal Reserve Board that provides commercial and consumer banking, mortgage banking, automobile financing and insurance agency services through FirstBank and FirstBank Insurance Agency. It operates 57 banking branches in Puerto Rico, eight in the USVI and BVI, and eight in Florida, plus 25 small-loan offices under First Federal Finance Corp. (Money Express La Financiera). The corporation has six reportable segments: Mortgage Banking, Consumer (Retail) Banking, Commercial and Corporate Banking, Treasury and Investments, United States Operations, and Virgin Islands Operations.

Revenue drivers

• Net interest income — The largest revenue source: $221.0 million in Q1 2026, or about 85% of the $258.6 million quarterly revenue, earned from loans and securities less deposit and funding costs. The bank held $13.1 billion of loans held for investment and $16.7 billion of deposits as of December 31, 2025.
• Consumer (Retail) Banking — One of six reportable segments, serving retail customers in Puerto Rico, the USVI, the BVI and Florida, including the Money Express La Financiera small-loan business with 25 offices in Puerto Rico.
• Mortgage Banking — Originates, sells and services residential mortgage loans in the Puerto Rico region, sourced through FirstBank branches, purchases from mortgage bankers, and new project developers, including FHA, VA and RD programs.
• Non-interest income — Fee-based revenue from services including insurance agency, mortgage banking and other financial products; $37.7 million in Q1 2026, up from $34.4 million in Q4 2025.

Recent performance

First quarter 2026 net income was $88.8 million, or $0.57 per diluted share, compared with $87.1 million, or $0.55, in Q4 2025 and $77.1 million, or $0.47, in Q1 2025. Net interest income was $221.0 million versus $222.8 million in Q4 2025 and $212.4 million a year earlier, as two fewer days and repricing of variable-rate commercial loans and cash at the FED offset higher-yielding asset deployment and lower deposit costs. Net interest margin rose to 4.75% from 4.68%, and the efficiency ratio was 49.14%. Return on average assets was 1.89%, which management said was the 17th consecutive quarter above 1.5%, and return on average equity was 17.92%. Full-year 2025 revenue was $1.00 billion with net income of $344.9 million and diluted EPS of $2.15.

Strategy

Management cites an omnichannel strategy, relationship-driven core deposit growth, and disciplined expense management. Capital deployment includes share buybacks and dividends, producing a 92% net payout ratio in Q1 2026. The bank is deploying cash flows from lower-yielding investment securities into higher-yielding assets and managing funding costs as core customer deposits grow. Management said loan pipelines remain healthy and support its established full-year loan growth targets, and it monitors energy costs and consumer impacts.

Risks

• Interest rate and margin sensitivity — The company states that changes in interest rates can materially affect net interest income and net interest margin because assets and liabilities reprice at different times, and prolonged low rates compress margin while higher rates can reduce loan demand and shift deposit behavior.
• Deposit retention and wholesale funding reliance — First BanCorp. cites uncertainty about FirstBank's ability to retain core deposits and generate cash flow from wholesale sources such as repurchase agreements, FHLB advances and brokered CDs, which could require selling investment securities at a loss.
• Puerto Rico, USVI and BVI economic and disaster exposure — Adverse political and economic conditions in Puerto Rico, the U.S., the USVI and BVI, including interest rates, unemployment, housing absorption and capital markets, could affect funding, credit quality, securities prices and product demand.
• Legal, regulatory and cybersecurity risk — The company cites litigation or threat of litigation, adverse settlements or judgments, reputational harm, and the ability of the company, FirstBank and third-party providers to identify and prevent cybersecurity incidents such as data breaches, ransomware and malware.

Outlook

Management said Q1 2026 began with strong operating results and pre-tax, pre-provision income of $131 million was an all-time high, up 2% from the prior quarter and 5% from a year earlier. Core customer deposits continued to grow and loan pipelines remain healthy, supporting confidence in full-year loan growth targets. The company monitors key risks including energy costs and their potential impact on consumers, while pursuing responsible growth and disciplined capital allocation.