First BanCorp. Reports Strong First Quarter Results

First BanCorp., a diversified financial holding company headquartered in San Juan, Puerto Rico, has reported impressive financial results for the first quarter of 2025. The company, which operates banking, mortgage, credit card, and insurance businesses across Puerto Rico, the U.S. Virgin Islands, and Florida, saw significant improvements in profitability, asset quality, and capital levels compared to the same period last year.

Robust Financial Performance

The key highlights of First BanCorp.’s first quarter results include:

• Net income of $77.1 million, up from $73.5 million in the first quarter of 2024. This translated to earnings of $0.47 per diluted common share, compared to $0.44 per share a year earlier.

• Net interest income increased by $15.9 million to $212.4 million, driven by a 36 basis point expansion in the net interest margin to 4.52%. This was due to the deployment of cash flows from lower-yielding investments into higher-yielding loans and a decrease in the cost of interest-bearing liabilities.

• The provision for credit losses increased to $24.8 million, up from $12.2 million in the first quarter of 2024, primarily due to a decrease in recoveries from the bulk sale of charged-off consumer loans and a rise in qualitative adjustments to account for economic uncertainty.

• Non-interest income grew by $1.7 million, mainly from higher realized gains on purchased tax credits, while non-interest expenses increased by $2.1 million, largely due to higher employee compensation and benefits.

• The efficiency ratio, which measures the bank’s operating expenses as a percentage of revenue, improved to 49.58% from 52.46% a year earlier, indicating greater operational efficiency.

• Return on average assets increased to 1.64% from 1.56%, and return on average common equity decreased to 17.90% from 19.56%.

Solid Asset Quality and Capital Levels

In addition to the strong earnings performance, First BanCorp. also reported improvements in asset quality and capital ratios:

• The allowance for credit losses (ACL) for loans and finance leases increased to $247.3 million, or 1.95% of total loans, up from 1.91% at the end of 2024. This increase was primarily driven by the commercial and construction loan portfolios.

• Non-performing assets, including non-accrual loans and foreclosed properties, rose to $129.4 million, or 0.68% of total assets, from $118.3 million, or 0.61% of assets, at the end of 2024. The increase was mainly due to the downgrade of a commercial mortgage loan in the Florida region.

• The bank’s capital ratios remained strong, with a Common Equity Tier 1 (CET1) ratio of 16.62%, a Tier 1 capital ratio of 16.62%, and a total capital ratio of 17.96% as of March 31, 2025. These ratios were all well above the regulatory minimums.

• Tangible book value per common share increased to $10.64 from $9.91 at the end of 2024, reflecting the growth in retained earnings and the increase in the fair value of the bank’s available-for-sale securities portfolio.

Liquidity and Funding

First BanCorp. maintained a solid liquidity position during the quarter, with $2.7 billion in cash and high-quality liquid assets, representing 14.25% of total assets. The bank also had $862.2 million in available borrowing capacity from the Federal Home Loan Bank and $2.6 billion in borrowing capacity at the Federal Reserve’s discount window.

The bank’s primary funding sources are customer deposits, which totaled $15.8 billion as of March 31, 2025. Core deposits, excluding government deposits and brokered certificates of deposit, grew by $29 million during the quarter to $12.9 billion, or 67.5% of total assets. Estimated uninsured deposits, excluding fully collateralized government deposits, amounted to $4.6 billion, or 28.4% of total deposits.

Outlook and Strategic Initiatives

Looking ahead, First BanCorp. expects the net interest margin to continue improving throughout 2025, depending on the timing and extent of any interest rate cuts by the Federal Reserve. The bank also aims to achieve mid-single-digit growth in its commercial, construction, and residential mortgage loan portfolios for the year.

During the first quarter, the company deployed over 100% of its earnings through a $50.6 million redemption of trust-preferred securities, $29.6 million in common stock dividends, and $21.8 million in share repurchases. From April 1 to May 5, 2025, the bank repurchased an additional 1.6 million shares of common stock for $27.7 million, leaving approximately $100 million in remaining authorization under its share repurchase program.

Overall, First BanCorp.’s strong first quarter results demonstrate its ability to navigate the current economic environment and execute on its strategic initiatives. The bank’s focus on improving profitability, asset quality, and capital levels has positioned it well to continue delivering value to its shareholders.