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1. Company Snapshot

1.a. Company Description

First BanCorp.operates as a bank holding company for FirstBank Puerto Rico that provides various financial services for retail, commercial, and institutional clients.The company operates through six segments: Commercial and Corporate Banking, Mortgage Banking, Consumer (Retail) Banking, Treasury and Investments, United States Operations, and Virgin Islands Operations.


The Commercial and Corporate Banking segment offers commercial loans, including commercial real estate and construction loans and floor plan financings; and other products, such as cash management and business management services.The Mortgage Banking segment engages in the origination, sale, and servicing of various residential mortgage loans; acquisition and sale of mortgages in the secondary markets; and purchase of mortgage loans from other local banks and mortgage bankers.The Consumer (Retail) Banking segment provides auto, boat, credit card, and personal loans; lines of credit; deposit products comprising interest bearing and non-interest bearing checking and savings accounts, individual retirement accounts, and retail certificates of deposit (CDs); and finance leasing and insurance agency services.


The Treasury and Investments segment offers funding and liquidity management services.The United States Operations segment provides checking, savings, and money market accounts, as well as retail CDs; traditional commercial and industrial, and commercial real estate loans; and internet banking, cash management, remote deposit capture, and automated clearing house, and transactions services.The Virgin Islands Operations segment is involved in consumer, commercial lending, and deposit-taking activities.


The company operates 64 branches in Puerto Rico, 8 branches in the U.S. Virgin Islands and British Virgin Islands, and 11 branches in the state of Florida.First BanCorp.was founded in 1948 and is headquartered in San Juan, Puerto Rico.

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1.b. Last Insights on FBP

First BanCorp's recent performance was driven by strong Q1 2025 earnings, with a beat on both earnings and revenues. The company's quarterly earnings of $0.47 per share exceeded the Zacks Consensus Estimate of $0.43 per share, while revenues also topped estimates. Additionally, the company's President and CEO, Aurelio Aleman, highlighted a solid loan growth and a strong deposit base during the earnings call. Furthermore, the company's executive vice president and CFO, Orlando Berges, mentioned a continued focus on investing in technology to enhance customer experience and improve operational efficiency.

1.c. Company Highlights

2. First BanCorp's Q3 2025 Earnings: Strong Performance Amidst Stable Credit Quality

First BanCorp reported a robust third quarter 2025, with net income reaching $100 million, or $0.63 per share, up from $80 million, or $0.50 per share, in the second quarter. Adjusted earnings per share grew 13% year-over-year, beating analyst estimates of $0.48 with an actual EPS of $0.51. Net interest income was $217.9 million, an 8% increase from the third quarter of 2024, driven by a net interest margin of 4.57%. Total loans grew by $181 million, or 5.6% linked quarter annualized, surpassing $13 billion, while deposits increased by $140 million, showing favorable trends in core franchise deposits.

Publication Date: Oct -27

📋 Highlights
  • EPS Growth:: Earnings per share increased to $0.63 Q3 2025 ($0.50 Q2 2025) and rose 13% YoY.
  • Net Interest Income Expansion:: Net interest income reached $217.9M, up 8% QoQ with a 4.57% net interest margin.
  • Loan and Deposit Growth:: Total loans grew $181M (5.6% annualized) to $13B, while deposits increased $140M.
  • Share Repurchase Momentum:: $50M in share repurchases this quarter and a new $200M buyback program announced.
  • Credit Quality and Efficiency:: Nonperforming assets fell $8.6M, net charge-offs at 62 bps, and efficiency ratio held at 50%.

Loan Growth and Credit Quality

The company's loan portfolio demonstrated strong growth, driven by commercial and residential pipelines, with expectations of 3% to 4% loan growth for the full year. Credit quality remained stable, with nonperforming assets decreasing by $8.6 million and net charge-offs at 62 basis points of average loans. The company's reserving methodology is guided by risk appetite and policies, focusing on individual cases and industry trends, indicating no systemic or industry-wide impacts on credit from competitor banks' challenges.

Capital Management and Share Repurchase

First BanCorp repurchased $50 million in shares and announced an additional $200 million share buyback program, demonstrating its commitment to returning capital to shareholders. The tangible book value per share increased 6% to $11.79, and the tangible common equity ratio expanded to 9.7%. The company expects to maintain an expense base of $125 million to $126 million for the next couple of quarters, with an efficiency ratio of 50%.

Valuation and Outlook

With a Price-to-Tangible Book Value (P/TBV) ratio of approximately 1.72, and a Dividend Yield of 3.44%, the stock appears reasonably valued. Analysts estimate revenue growth at 5.3% for next year, indicating a stable outlook. The company's guidance for the fourth quarter expects a flattish net interest margin, assuming some reduction in funding costs. New loan origination yields are around 6% to 6.25% for commercial and mortgage products, and 10.5% for consumer loans, supporting revenue growth.

Strategic Focus

First BanCorp is open to M&A opportunities on the mainland, prioritizing complementary franchises in Florida that enhance their current franchise, with a focus on organic growth. In Puerto Rico, competitive pressures are mainly from smaller players, not large banks, and the company sees potential long-term benefits from onshoring efforts. The securities portfolio is expected to see significant cash flows in the fourth quarter and the first half of 2026, which will be reinvested at higher yields, supporting future revenue growth.

3. NewsRoom

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KBRA Assigns Ratings to First BanCorp.

Dec -01

Source: businesswire.com

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Meet 33 Ideal "Safer" November Small/MidCap Value DiviBuys Of The S&P600

Nov -26

Source: seekingalpha.com

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First BanCorp. $FBP Shares Sold by Brandywine Global Investment Management LLC

Nov -24

Source: defenseworld.net

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Cwm LLC Purchases 2,567 Shares of First BanCorp. $FBP

Nov -01

Source: defenseworld.net

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First BanCorp. (FBP) Q3 2025 Earnings Call Transcript

Oct -23

Source: seekingalpha.com

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First Bancorp (FBP) Q3 Earnings: How Key Metrics Compare to Wall Street Estimates

Oct -23

Source: zacks.com

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First BanCorp. $FBP Shares Sold by Allspring Global Investments Holdings LLC

Oct -23

Source: defenseworld.net

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First BanCorp Announces Capital Actions

Oct -22

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.44%)

6. Segments

Consumer (Retail) Banking

Expected Growth: 6.5%

First BanCorp's 6.5% growth in Consumer (Retail) Banking is driven by increasing demand for digital banking services, strategic expansion into new markets, and a strong focus on customer experience. Additionally, the bank's efforts to enhance its mobile banking platform, expand its ATM network, and offer competitive loan and deposit products have contributed to its growth.

Mortgage Banking

Expected Growth: 6.8%

First BanCorp's 6.8% growth in Mortgage Banking is driven by increasing demand for housing in Puerto Rico, strategic expansion into the US mainland, and a strong pipeline of commercial and residential mortgage loans. Additionally, the company's digital transformation efforts and competitive pricing have improved customer acquisition and retention, contributing to the segment's growth.

United States Operations

Expected Growth: 6.2%

United States Operations from First BanCorp. achieved 6.2% growth driven by a strong economy, increasing consumer spending, and a low unemployment rate. Additionally, the segment benefited from strategic acquisitions, expansion of digital banking services, and a favorable interest rate environment, leading to increased loan and deposit growth.

Commercial and Corporate Banking

Expected Growth: 6.0%

Strong loan growth driven by a robust Puerto Rico economy, increased commercial lending, and strategic expansion into the US mainland. Additionally, growth in fee income from cash management and trade finance services, as well as a focus on digital transformation and operational efficiency, contribute to the 6.0% growth in Commercial and Corporate Banking at First BanCorp.

Virgin Islands Operations

Expected Growth: 5.8%

Virgin Islands Operations from First BanCorp. achieved 5.8% growth driven by strong loan demand, particularly in the commercial and residential mortgage segments. Additionally, the segment benefited from a favorable interest rate environment, increased deposit growth, and effective cost management. These factors, combined with a solid economic backdrop, contributed to the segment's robust growth.

Treasury and Investments

Expected Growth: 6.3%

Strong treasury and investment performance at First BanCorp, driven by 6.3% growth, is attributed to increasing demand for cash management services, strategic investments in digital platforms, and effective asset liability management. Additionally, a favorable interest rate environment and disciplined expense management have contributed to the segment's growth.

7. Detailed Products

Consumer Banking

Provides personal banking services, including checking and savings accounts, credit cards, personal loans, and mortgages.

Commercial Banking

Offers financial solutions for businesses, including cash management, commercial loans, and treasury management services.

Mortgage Banking

Provides mortgage loan products for individuals and businesses, including residential and commercial mortgages.

Auto and Equipment Leasing

Offers financing solutions for vehicles and equipment, including leasing and loan options.

Investment and Insurance Services

Provides investment and insurance products, including brokerage services, annuities, and life insurance.

Treasury Services

Offers cash management and treasury services, including account management, payment processing, and foreign exchange.

8. First BanCorp.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for First BanCorp is medium due to the presence of alternative financial institutions and digital payment platforms.

Bargaining Power Of Customers

The bargaining power of customers is high due to the availability of multiple banking options and the ease of switching banks.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the bank's ability to negotiate with vendors and the availability of multiple suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the regulatory barriers and capital requirements to enter the banking industry.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of multiple banks and financial institutions competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 31.19%
Debt Cost 6.83%
Equity Weight 68.81%
Equity Cost 9.75%
WACC 8.84%
Leverage 45.32%

11. Quality Control: First BanCorp. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Bank OZK

A-Score: 7.5/10

Value: 7.7

Growth: 8.3

Quality: 8.0

Yield: 7.0

Momentum: 7.0

Volatility: 7.0

1-Year Total Return ->

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Popular

A-Score: 6.9/10

Value: 6.3

Growth: 5.9

Quality: 7.0

Yield: 6.0

Momentum: 8.0

Volatility: 8.3

1-Year Total Return ->

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First Bank

A-Score: 6.9/10

Value: 6.5

Growth: 6.6

Quality: 8.0

Yield: 7.0

Momentum: 5.5

Volatility: 7.7

1-Year Total Return ->

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Cathay Bank

A-Score: 6.6/10

Value: 6.3

Growth: 6.1

Quality: 7.4

Yield: 6.0

Momentum: 6.0

Volatility: 7.7

1-Year Total Return ->

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Fulton Financial

A-Score: 6.5/10

Value: 6.1

Growth: 6.3

Quality: 6.0

Yield: 8.0

Momentum: 5.0

Volatility: 7.7

1-Year Total Return ->

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Citizens Financial Group

A-Score: 6.5/10

Value: 5.8

Growth: 5.2

Quality: 6.4

Yield: 7.0

Momentum: 7.5

Volatility: 7.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

20.03$

Current Price

20.04$

Potential

-0.00%

Expected Cash-Flows