SAN JUAN, Puerto Rico, July 22, 2026--(BUSINESS WIRE)--First BanCorp. (the "Corporation" or "First BanCorp.") (NYSE: FBP), the bank holding company for FirstBank Puerto Rico ("FirstBank" or "the Bank"), today reported a net income of $96.1 million, or $0.62 per diluted share, for the second quarter of 2026, compared to $88.8 million, or $0.57 per diluted share, for the first quarter of 2026, and $80.2 million, or $0.50 per diluted share, for the second quarter of 2025.
Aurelio Alemán, President and Chief Executive Officer of First BanCorp, commented: "We concluded the first half of the year with another quarter of strong financial and operating performance, delivering growth across our franchise while continuing to generate attractive returns for shareholders. Adjusted pre-tax, pre-provision income reached a record of $137.5 million, earnings per share increased 24% compared to the prior year, and return on average assets was 2.02%, marking our 18th consecutive quarter above 1.5%. By many measures, this represents the strongest and most consistent period of performance in our company's history. This achievement reflects the trust our customers place in us, as well as the dedication, discipline, and execution demonstrated by our teams across the organization. Loan growth accelerated during the quarter, driven primarily by commercial activity in Puerto Rico, with total loan originations reaching $1.7 billion, an increase of 21% year over year. These encouraging trends, combined with a healthy pipeline of opportunities, reinforce our path to achieve our full-year growth objectives. Credit quality remained sound, with lower net charge-offs and non-performing assets remaining near historic lows, while we continue to closely monitor seasonal delinquency trends and broader consumer market conditions. We remain firmly committed to prudent capital management. During the quarter, we returned 84% of earnings to shareholders through dividends and share repurchases while maintaining a top-quartile CET1 ratio of 16.96%. Our strong capital position enables us to continue investing strategically in our franchise to enhance competitiveness, strengthen the customers' experience, and support sustainable long-term growth. While we remain mindful of an evolving economic environment, the strength of our franchise, combined with disciplined execution, positions us well to continue creating long-term value for our shareholders, customers, employees, and communities." | (In thousands) | Q2 '26 | Q1 '26 | Q2 '25 | YTD '26 | YTD '25 | |||||||||
Financial Highlights | |||||||||||||||
Net interest income | $ | 229,131 | $ | 220,956 | $ | 215,859 | $ | 450,087 | $ | 428,256 | |||||
Provision for credit losses | 17,333 | 17,273 | 20,587 | 34,606 | 45,397 | ||||||||||
Non-interest income | 35,732 | 37,685 | 30,950 | 73,417 | 66,684 | ||||||||||
Non-interest expenses | 127,324 | 127,105 | 123,337 | 254,429 | 246,359 | ||||||||||
Income before income taxes | 120,206 | 114,263 | 102,885 | 234,469 | 203,184 | ||||||||||
Income tax expense | 24,052 | 25,485 | 22,705 | 49,537 | 45,945 | ||||||||||
Net income | $ | 96,154 | $ | 88,778 | $ | 80,180 | $ | 184,932 | $ | 157,239 | |||||
Selected Financial Data | |||||||||||||||
Net interest margin | 4.87% | 4.75% | 4.56% | 4.81% | 4.54% | ||||||||||
Efficiency ratio | 48.07% | 49.14% | 49.97% | 48.60% | 49.78% | ||||||||||
Diluted earnings per share | $ | 0.62 | $ | 0.57 | $ | 0.50 | $ | 1.19 | $ | 0.97 | |||||
Book value per share | $ | 12.95 | $ | 12.72 | $ | 11.43 | $ | 12.95 | $ | 11.43 | |||||
Tangible book value per share(1) | $ | 12.68 | $ | 12.45 | $ | 11.16 | $ | 12.68 | $ | 11.16 | |||||
Return on average equity | 19.49% | 17.92% | 17.79% | 18.70% | 17.85% | ||||||||||
Return on average assets | 2.02% | 1.89% | 1.69% | 1.95% | 1.66% |
Results for the Second Quarter of 2026 compared to the First Quarter of 2026 | ||
Profitability | Net income – $96.1 million, or $0.62 per diluted share compared to $88.8 million, or $0.57 per diluted share. Income before income taxes – $120.2 million compared to $114.3 million. Adjusted pre-tax, pre-provision income (Non-GAAP)(1) – $137.5 million compared to $131.4 million. Net interest income – $229.1 million compared to $221.0 million. The increase was driven by approximately $1.6 million in net interest income attributable to an additional day in the second quarter of 2026, $3.4 million in interest income resulting from the acceleration of the unamortized purchase discount and net deferred fees associated with refinancings in the Puerto Rico region during the second quarter of 2026, which contributed approximately 7 basis points to the increase in net interest margin, as well as the continued deployment of cash flows from lower-yielding investment securities to higher-yielding assets. Net interest margin increased to 4.87% compared to 4.75%. Provision for credit losses – remained flat at $17.3 million when compared to the previous quarter. The provision for credit losses for the second quarter of 2026 reflected a lower benefit from macroeconomic factors than in the previous quarter and higher loan growth, partially offset by a $5.0 million decrease in net charge-offs. Non-interest income – $35.7 million compared to $37.7 million. The decrease was mainly due to $3.6 million in seasonal contingent insurance commissions recorded in the first quarter of 2026. Non-interest expenses – remained relatively flat at $127.3 million compared to $127.1 million in the previous quarter. Income tax expense – $24.1 million compared to $25.5 million, mainly due to a lower estimated annual effective tax rate, partially offset by higher pre-tax income. | |
Balance Sheet | Total loans – increased by $168.8 million to $13.3 billion, driven by commercial and industrial ("C&I") loan growth in the Puerto Rico region. Total loan originations of $1.7 billion, up $469.5 million, mainly in commercial and construction loans. Government deposits (fully collateralized) – increased by $167.7 million to $3.0 billion, mainly in the Puerto Rico region. Brokered certificates of deposits ("CDs") – increased by $87.7 million to $594.8 million in the Florida region. Core deposits (other than brokered and government deposits) – increased by $18.3 million to $13.2 billion. | |
Asset Quality | Allowance for credit losses ("ACL") coverage ratio – amounted to 1.85% compared to 1.87%. Annualized net charge-offs to average loans ratio decreased to 0.49% compared to 0.65%, primarily reflecting a $4.7 million reduction in consumer loans and finance leases net charge-offs, mainly in the auto loan portfolio. Non-performing loans – increased by $6.8 million to $94.6 million, driven by the migration of a $14.8 million C&I relationship in the Florida region to nonaccrual status during the second quarter of 2026. Loans in early delinquency (30-89 days past due) – increased by $32.9 million to $143.4 million, driven by a $20.7 million increase in consumer loans and finance leases, primarily in the auto loan portfolio. | |
Liquidity and Capital | Liquidity – Cash and cash equivalents amounted to $561.3 million compared to $550.9 million. When adding $2.1 billion of free high-quality liquid securities that could be liquidated or pledged within one day and $1.1 billion in available lending capacity at the Federal Home Loan Bank ("FHLB"), available liquidity amounted to 19.60% of total assets compared to 20.14%. Capital – Repurchased $50.0 million in common stock and declared $31.0 million in common stock dividends. Capital ratios exceeded required regulatory levels. The Corporation's estimated total capital, common equity tier 1 ("CET1") capital, tier 1 capital, and leverage ratios were 18.21%, 16.96%, 16.96%, and 11.72%, respectively, as of June 30, 2026. On a non-GAAP basis, the tangible common equity ratio(1) decreased to 10.08% compared to 10.11%, mainly due to an increase in tangible assets. | |
(1) Represents non-GAAP financial measures. Refer to Non-GAAP Disclosures - Non-GAAP Financial Measures for the definition of and additional information about these non-GAAP financial measures. |
NET INTEREST INCOME
The following table sets forth information concerning net interest income for the last five quarters:
Quarter Ended | ||||||||||||||||||||
June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Net Interest Income | ||||||||||||||||||||
Interest income | $ | 287,710 | $ | 279,849 | $ | 285,158 | $ | 282,743 | $ | 278,190 | ||||||||||
Interest expense | 58,579 | 58,893 | 62,390 | 64,827 | 62,331 | |||||||||||||||
Net interest income | $ | 229,131 | $ | 220,956 | $ | 222,768 | $ | 217,916 | $ | 215,859 | ||||||||||
Average Balances | ||||||||||||||||||||
Loans and leases | $ | 13,077,087 | $ | 13,068,874 | $ | 13,032,081 | $ | 12,876,239 | $ | 12,742,809 | ||||||||||
Total securities, other short-term investments and interest-bearing cash balances | 5,797,465 | 5,776,844 | 5,871,091 | 6,037,726 | 6,245,844 | |||||||||||||||
Average interest-earning assets | $ | 18,874,552 | $ | 18,845,718 | $ | 18,903,172 | $ | 18,913,965 | $ | 18,988,653 | ||||||||||
Average interest-bearing liabilities | $ | 11,371,881 | $ | 11,409,037 | $ | 11,531,091 | $ | 11,669,135 | $ | 11,670,411 | ||||||||||
Average Yield/Rate | ||||||||||||||||||||
Average yield on interest-earning assets | 6.11 | % | 6.02 | % | 5.98 | % | 5.93 | % | 5.88 | % | ||||||||||
Average rate on interest-bearing liabilities | 2.07 | % | 2.09 | % | 2.15 | % | 2.20 | % | 2.14 | % | ||||||||||
Net interest spread | 4.04 | % | 3.93 | % | 3.83 | % | 3.73 | % | 3.74 | % | ||||||||||
Net interest margin | 4.87 | % | 4.75 | % | 4.68 | % | 4.57 | % | 4.56 | % |
Net interest income amounted to $229.1 million for the second quarter of 2026, an increase of $8.1 million, compared to $221.0 million for the first quarter of 2026, which includes an increase of approximately $1.6 million associated with the effect of an additional day in the second quarter of 2026. The increase in net interest income reflects the following:
A $4.5 million net increase in interest income on investment securities and interest-earning cash balances, primarily driven by $3.6 million of higher interest income on investment securities, which reflected both the benefit of higher yields on available-for-sale debt securities as a result of purchases of higher-yielding debt securities replacing maturities of lower-yielding debt securities and $1.8 million resulting from the acceleration of the unamortized purchase discount on a municipal bond refinanced during the second quarter of 2026 into a shorter-term commercial loan structure. These increases were partially offset by a $0.7 million decrease in interest income from interest-earning cash balances, mainly due to a decrease associated with a $78.5 million reduction in the average balances, which consisted primarily of cash maintained at the Federal Reserve Bank ("FED").
A $3.3 million increase in interest income on loans, driven by:
-
A $2.9 million increase in interest income on commercial and construction loans, driven by $1.6 million resulting from the acceleration of net deferred fees associated with the refinancing of a C&I loan in the Puerto Rico region and a $1.1 million increase associated with the effect of an additional day in the second quarter of 2026.
-
A $0.4 million increase in interest income on residential mortgage loans, mainly due to $0.5 million of interest income recognized during the second quarter of 2026 from the payoff of a nonaccrual residential mortgage loan in the Florida region.
-
A $0.6 million decrease in interest expense on advances from the FHLB associated with a $50.6 million decrease in the average balance.
Partially offset by:
A $0.3 million increase in interest expense on interest-bearing deposits, consisting of:
-
A $1.4 million increase in interest expense on interest-bearing checking and saving accounts, of which $0.9 million was associated with higher interest rates paid in the second quarter of 2026, mainly on government deposits. The average cost of interest-bearing checking and saving accounts in the second quarter increased 5 basis points to 1.26% when compared to the previous quarter. Excluding government deposits, the average cost of interest-bearing checking and saving accounts remained unchanged at 0.66% in both the second and first quarters of 2026.
-
Partially offset by:
A $0.8 million decrease in interest expense on time deposits, excluding brokered CDs, mainly due to issuances at lower rates during the second quarter of 2026.
A $0.3 million decrease in interest expense on brokered CDs, mainly associated with a $27.4 million decline in the average balance.
Net interest margin for the second quarter of 2026 was 4.87%, a 12 basis points increase when compared to the first quarter of 2026, mostly related to the acceleration of the unamortized purchase discount and net deferred fees associated with the aforementioned refinancings during the second quarter of 2026, which contributed approximately 7 basis points to the increase in net interest margin, and the deployment of cash flows from lower-yielding investment securities to higher-yielding assets.
NON-INTEREST INCOME
The following table sets forth information concerning non-interest income for the last five quarters:
Quarter Ended | ||||||||||||||
June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | ||||||||||
(In thousands) | ||||||||||||||
Service charges and fees on deposit accounts | $ | 9,885 | $ | 9,932 | $ | 9,861 | $ | 9,811 | $ | 9,756 | ||||
Mortgage banking activities | 3,727 | 4,043 | 4,219 | 3,309 | 3,401 | |||||||||
Insurance commission income | 3,114 | 5,944 | 2,265 | 2,618 | 2,538 | |||||||||
Card and processing income | 12,512 | 11,758 | 12,353 | 11,682 | 11,880 | |||||||||
Other non-interest income | 6,494 | 6,008 | 5,702 | 3,374 | 3,375 | |||||||||
Non-interest income | $ | 35,732 | $ | 37,685 | $ | 34,400 | $ | 30,794 | $ | 30,950 |
Non-interest income decreased by $2.0 million to $35.7 million for the second quarter of 2026, compared to $37.7 million for the first quarter of 2026, mainly due to $3.6 million in seasonal contingent commissions recorded as part of insurance commission income in the first quarter of 2026 based on the prior year's production of insurance policies, partially offset by a $0.8 million increase in debit and credit card processing income driven by higher transactional volumes during the second quarter of 2026. Other variances included a $0.6 million gain recognized during the second quarter of 2026 from the sale of a fixed asset in the Florida region, partially offset by a $0.3 million decrease in realized gains from purchased income tax credits, both reported as part of other non-interest income.
NON-INTEREST EXPENSES
The following table sets forth information concerning non-interest expenses for the last five quarters:
Quarter Ended | |||||||||||||||||||
June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | |||||||||||||||
(In thousands) | |||||||||||||||||||
Employees' compensation and benefits | $ | 63,439 | $ | 65,299 | $ | 63,196 | $ | 59,761 | $ | 60,058 | |||||||||
Occupancy and equipment | 22,108 | 22,063 | 21,797 | 22,185 | 22,297 | ||||||||||||||
Business promotion | 4,435 | 3,555 | 5,944 | 3,884 | 3,495 | ||||||||||||||
Professional service fees: | |||||||||||||||||||
Collections, appraisals and other credit-related fees | 1,229 | 734 | 1,007 | 856 | 634 | ||||||||||||||
Outsourcing technology services | 8,352 | ... |