First BanCorp

04/22/2026 | Press release | Distributed by Public on 04/22/2026 07:31

Current Report (Form 8-K)

FIRST BANCORP.ANNOUNCES EARNINGS FOR THE QUARTERENDED MARCH 31, 2026
SAN JUAN, PuertoRico - April22, 2026
- First BanCorp.(the "Corporation" or "FirstBanCorp.") (NYSE: FBP), thebank holding company forFirstBank Puerto
Rico ("FirstBank" or "the Bank"),today reported a net incomeof $88.8 million, or $0.57per diluted share, for thefirst quarter of 2026, compared to$87.1 million, or
$0.55 per diluted share, for the fourth quarter of 2025, and$77.1 million, or $0.47 per diluted share, for the firstquarter of 2025.
AurelioAlemán,PresidentandChiefExecutiveOfficerofFirstBanCorp,
commented:
"Webegantheyearwithanotherquarterofstrongoperating
results,deliveringconsistentperformanceacrossourfranchise.Earningsper
shareincreased 21%year-over-year,reflecting strongrevenue generationand
disciplinedexpensemanagement,whichtranslatedintoareturnonaverage
assets of 1.89%-our 17th consecutive quarterposting a ROAA above 1.5%.
Underlyingrevenuetrendsremainedverystrongduringthequarter,with
pre-tax, pre-provisionincome reaching anall-time high of$131 million, up2%
fromthepriorquarterand5%fromayearago.Corecustomerdeposits
continued to grow,reinforcing thestrength ofour relationship-driven franchise
while allowingus toproactively managefunding costs.Loan pipelinesremain
healthy and continue to support our confidence in achievingour established loan
growthtargetsforthefullyear. Creditperformancewasstrong,withstable
charge-offs, record-lowlevels ofnon-performing assets,and veryencouraging
early-stage delinquency trends, which declined 24% from theprior quarter.
Supported by a resilient labor market andstable economic backdrop, we remain
focused on servingour customers acrossa range ofenvironments while closely
monitoringkeyrisks,includingenergycostsandtheirpotentialimpacton
consumers.Ourthoughtfulandconsistentapproachtocapitaldeployment
resulted in a netpayout ratio of 92% during thequarter achieved through share
buybacksanddividends.Ourdisciplinedapproachtocapitalallocation,
responsible growth, and ongoing execution of our omnichannel strategy continue
topositionFirstBanCorptodeliversustainablelong-termvalueforallour
stakeholders."
(In thousands)
Q1 '26
Q4 '25
Q1 '25
Financial Highlights
Net interest income
$
220,956
$
222,768
$
212,397
Provision for credit losses
17,273
22,971
24,810
Non-interest income
37,685
34,400
35,734
Non-interest expenses
127,105
126,870
123,022
Income before income taxes
114,263
107,327
100,299
Income tax expense
25,485
20,226
23,240
Net income
$
88,778
$
87,101
$
77,059
Selected Financial Data
Net interest margin
4.75%
4.68%
4.52%
Efficiency ratio
49.14%
49.33%
49.58%
Diluted earnings per share
$
0.57
$
0.55
$
0.47
Book value per share
$
12.72
$
12.56
$
10.91
Tangible book value per share
(1)
$
12.45
$
12.29
$
10.64
Return on average equity
17.92%
17.84%
17.90%
Return on average assets
1.89%
1.81%
1.64%
Results for the First Quarter of 2026 compared to the Fourth Quarterof 2025
Profitability
Net income -
$88.8 million, or $0.57per diluted share compared to$87.1 million, or $0.55per diluted share. Netincome for the fourth quarter
of2025includedareversalof$1.1million($0.7millionafter-tax)relatedtotheFederalDepositInsuranceCorporation("FDIC")special
assessment.
Income before income taxes
-
$114.3 million compared to $107.3 million.
Adjusted pre-tax, pre-provision income (Non-GAAP)
(1)
-
$131.4 million compared to $129.2 million.
Net interest income -
$221.0 million compared to $222.8 million. The decrease includes a reduction of $2.7 millionassociated with the effect of
two less daysin the firstquarter of 2026,$2.2 million associatedto the downwardrepricing of variable-rate commercialloans and cashheld at
theFederalReserveBank("FED"), partiallyoffsetbythecontinued deploymentofcashflowsfrom lower-yieldinginvestment securitiesto
higher-yielding assets and a decrease in the cost of interest-bearing deposits.Net interest margin increased to 4.75%, compared to 4.68%.
Provision for credit losses -
$17.3 million compared to $23.0 million.The provision reflects an improved projection on certain macroeconomic
variablesandimprovementsindelinquencyintheconsumerloanportfolios,partiallyoffsetbyhigherqualitativereservesassociatedwith
geopolitical uncertainty driven by, among other things, higher oil prices as a result ofthe conflict in the Middle East.
Non-interestincome-
$37.7million comparedto$34.4million.The increasewas drivenby$3.6millioninseasonal contingentinsurance
commissions recorded in the first quarter of 2026.
Non-interest expenses
- remained relatively flat at $127.1 million,compared to $126.9 million in the previous quarter.
Income tax expense
- $25.5 million compared to $20.2million,mainly due to higher pre-tax incomeand an adjustment in thefourth quarter of
2025 due to a lower than estimated annual effective tax rate.
Balance
Sheet
Totalloans -
decreased by $38.2 millionto $13.1 billion, drivenby a reduction of$49.9 million in consumerloans, primarily in theauto loans
and finance leasesportfolios in thePuerto Rico region.Total loanoriginations of $1.2billion, down $143.0million, mainly incommercial and
construction loans.
Coredeposits(otherthanbrokeredandgovernmentdeposits) -
increased by$158.5millionto$13.2billion,mainly ininterest-bearing
deposits in the Puerto Rico region.
Government deposits (fully collateralized) -
decreased by $146.3 million to $2.9 billion, mainly inthe Puerto Rico region.
Brokered certificates of deposits ("CDs")
- decreased by $86.5 million to $507.0 million.
Asset
Quality
Allowance for credit losses ("ACL") coverage ratio -
amounted to 1.87%, compared to 1.90%.
Annualized net charge-offs to average loans ratio
increased to 0.65%, compared to 0.63%.
Non-performing assets -
decreased by $5.3 million to $108.8 million, driven by a reductionin nonaccrual loans across all portfolios.
Liquidity
and
Capital
Liquidity -
Cash and cashequivalents amounted to $550.9million, compared to $658.6million. When adding $2.3billion of freehigh-quality
liquid securities that could be liquidated or pledged within one day and $1.0 billion in available lending capacity at the Federal Home Loan Bank
("FHLB"), available liquidity amounted to 20.14% of totalassets, compared to 19.39%.
Capital -
Repurchased $50.0 million in common stock anddeclared $31.5 million in common stock dividends. Capitalratios exceeded required
regulatorylevels.TheCorporation'sestimatedtotalcapital,commonequitytier1("CET1") capital,tier1capital,andleverageratioswere
18.19%, 16.93%, 16.93%, and 11.66%, respectively,as of March 31, 2026. On a non-GAAPbasis, the tangible common equity ratio
(1)
increased
to 10.11%, compared to 10.08%.
(1)Represents non-GAAPfinancialmeasures. Referto
Non-GAAPDisclosures-Non-GAAPFinancial Measures
forthedefinitionofand additionalinformationaboutthese non-GAAP
financial measures.
First BanCorp. Announces Earnings for the Quarter Ended March31, 2026
- Page 2 of 27
NET INTEREST INCOME
The following table sets forth information concerning net interest incomefor the last five quarters:
Quarter Ended
March 31, 2026
December 31, 2025
September 30, 2025
June 30, 2025
March 31, 2025
(Dollars in thousands)
Net Interest Income
Interest income
$
279,849
$
285,158
$
282,743
$
278,190
$
277,065
Interest expense
58,893
62,390
64,827
62,331
64,668
Net interest income
$
220,956
$
222,768
$
217,916
$
215,859
$
212,397
Average Balances
Loans and leases
$
13,068,874
$
13,032,081
$
12,876,239
$
12,742,809
$
12,632,501
Total securities, other short-terminvestments and interest-bearing cash
balances
5,776,844
5,871,091
6,037,726
6,245,844
6,444,016
Average interest-earning assets
$
18,845,718
$
18,903,172
$
18,913,965
$
18,988,653
$
19,076,517
Average interest-bearing liabilities
$
11,409,037
$
11,531,091
$
11,669,135
$
11,670,411
$
11,749,011
Average Yield/Rate
Average yield on interest-earning assets
6.02%
5.98%
5.93%
5.88%
5.89%
Average rate on interest-bearing liabilities
2.09%
2.15%
2.20%
2.14%
2.23%
Net interest spread
3.93%
3.83%
3.73%
3.74%
3.66%
Net interest margin
4.75%
4.68%
4.57%
4.56%
4.52%
Net interestincome amountedto $221.0million forthe firstquarter of2026, adecrease of$1.8 million,compared to$222.8 million
for the fourthquarter of 2025,which includes areduction of approximately$2.7 million associatedwith the effectof two lessdays in
the first quarter of 2026. The decrease in net interest income reflects the following:
●
A $6.5million decrease in interest income on loans, driven by:
-
A$4.1milliondecreaseininterestincomeoncommercialandconstructionloans,drivenbya$2.2millionreduction
associated withthe effectof twoless daysin thefirst quarterof 2026,and a$1.7 milliondecrease dueto theeffectof
lowerinterestratesonthedownwardrepricingofvariable-rateloans.Also,thefourthquarterof2025included$0.8
millionofinterestincomeanda$0.5millionprepaymentpenaltyinconnectionwiththepayoffsofa$12.0million
nonaccrualcommercialmortgageloananda$23.8millionconstructionloan,respectively,bothintheFloridaregion.
These varianceswere partiallyoffset bya $1.1million increaseassociated witha $65.8million increasein theaverage
balance.
As ofMarch 31,2026, theinterest rateon approximately51% ofthe Corporation'scommercial andconstruction loans
was tiedto variablerates, with32% basedupon SOFRof 3months orless, 12%based uponthe Primerate index,and
7%basedonotherindexes.ForthequarterendedMarch31,2026,theaverageone-monthSOFRdecreased24basis
points, theaverage three-monthSOFR decreased15 basispoints, andthe averagePrime ratedecreased 27basis points,
when compared to the fourth quarter of 2025.
-
A$2.7milliondecreaseininterestincomeonconsumerloansandfinanceleases,duetoa$1.7milliondecrease
associatedwiththeeffectoftwolessdaysinthefirstquarterof2026,anda$1.0milliondecreaseassociatedwitha
$36.1 million decline in the average balance.
Partially offset by:
●
A
$3.3 million decrease in interest expense on interest-bearing deposits, consistingof:
-
A $1.5million decreasein interestexpense oninterest-bearing checkingand savingaccounts, mainlydue toa decrease
ofapproximately$0.6millionassociatedwithlowerinterestratespaidinthefirstquarterof2026,a$0.5million
decrease drivenby theeffect oftwo lessdays inthe firstquarter of2026, anda $0.4million decreaseassociated witha
$66.4 million netreduction in theaverage balance. Theaverage cost ofinterest-bearing checkingand saving accountsin
the first quarterof 2026 decreased4 basis pointsto 1.21%when comparedto the previousquarter,driven by adecrease
inthecostofgovernmentdeposits.Excludinggovernmentdeposits,theaveragecostofinterest-bearingcheckingand
saving accounts in the first quarter of 2026 was 0.66%, compared to 0.68% forthe previous quarter.
First BanCorp. Announces Earnings for the Quarter Ended March31, 2026
- Page 3 of 27
-
A$0.9milliondecreaseininterestexpenseontimedeposits,excludingbrokeredCDs,mainlyduetoa$0.7million
decrease associated with the effect of two less days inthe first quarter of 2026.
-
A $0.9 milliondecrease in interestexpense on brokeredCDs, of which$0.7 million wasassociated with a$61.3 million
decline in the average balance.
●
A $1.2 million increase in interest income on investment securities and interest-bearingcash balances, a net effect of:
o
A $2.8million increasein interestincome ondebt securities,mainly dueto a22 basispoints improvementin yield
resulting frompurchases ofhigher-yieldingavailable-for-saledebt securitiesreplacing maturitiesof lower-yielding
debt securities.
Partially offset by:
o
A$1.6milliondecreaseininterestincomefrominterest-bearingcashbalances,mainlyduetoa$1.1million
decreaseassociatedwitha$108.6milliondecreaseintheaveragebalances,whichconsistedprimarilyofcash
maintained at the FED, and a $0.5 million decrease associated with thereduction of the federal funds rate.
Net interestmarginfor thefirst quarterof 2026was 4.75%,a 7basis pointsincreasewhen comparedto thefourth quarterof 2025,
mostly reflecting the deploymentof cash flows fromlower-yielding investmentsecurities to higher-yielding assetsand the decrease in
the costof interest-bearingdeposits. Thesefactors werepartially offsetby thedownward repricingof variable-ratecommercial loans
and adecrease of3 basis pointsassociated withthe aforementionedinterest incomecollected ona nonaccrualcommercial loanand a
prepayment penalty during the fourth quarter of 2025.
First BanCorp. Announces Earnings for the Quarter Ended March31, 2026
- Page 4 of 27
NON-INTEREST INCOME
The following table sets forth information concerning non-interest incomefor the last five quarters:
Quarter Ended
March 31, 2026
December 31,2025
September 30, 2025
June 30, 2025
March 31, 2025
(In thousands)
Service charges and fees on deposit accounts
$
9,932
$
9,861
$
9,811
$
9,756
$
9,640
Mortgage banking activities
4,043
4,219
3,309
3,401
3,177
Insurance commission income
5,944
2,265
2,618
2,538
5,805
Card and processing income
11,758
12,353
11,682
11,880
11,475
Other non-interest income
6,008
5,702
3,374
3,375
5,637
Non-interest income
$
37,685
$
34,400
$
30,794
$
30,950
$
35,734
Non-interest incomeincreased by $3.3million to $37.7million forthe first quarterof 2026, comparedto $34.4million for thefourth
quarter of2025, mainlydue to$3.6million inseasonal contingentcommissions recordedas partof insurancecommission incomein
the first quarter of2026 based on theprior year's productionof insurance policies.Other variances includeda $0.8 million increasein
realizedgainsfrompurchasedincometaxcreditsreportedaspartofothernon-interestincome,partiallyoffsetbya$0.6million
decrease in debitand credit cardprocessing income drivenby higher transactionalfee income frompoint-of-sale terminalsduring the
fourth quarter of 2025.
First BanCorp. Announces Earnings for the Quarter Ended March31, 2026
- Page 5 of 27
NON-INTEREST EXPENSES
The following table sets forth information concerning non-interest expensesfor the last five quarters:
Quarter Ended
March 31, 2026
December 31,2025
September 30, 2025
June 30, 2025
March 31, 2025
(In thousands)
Employees' compensation and benefits
$
65,299
$
63,196
$
59,761
$
60,058
$
62,137
Occupancy and equipment
22,063
21,797
22,185
22,297
22,630
Business promotion
3,555
5,944
3,884
3,495
3,278
Professional service fees:
Collections, appraisals and other credit-related fees
734
1,007
856
634
598
Outsourcing technology services
8,585
8,433
8,107
8,324
7,921
Other professional fees
3,593
3,671
2,940
2,651
2,967
Taxes, other than income taxes
6,184
6,272
6,092
5,712
5,878
FDIC deposit insurance
2,058
961
2,236
2,235
2,236
Other insurance and supervisory fees
1,206
1,327
1,344
1,566
1,551
Net (gain) loss on other real estate owned ("OREO") operations
(937)
(838)
1,033
(591)
(1,129)
Credit and debit card processing expenses
7,327
7,728
7,889
7,747
5,110
Communications
2,288
2,284
2,294
2,208
2,245
Other non-interest expenses
5,150
5,088
6,273
7,001
7,600
Total non-interest expenses
$
127,105
$
126,870
$
124,894
$
123,337
$
123,022
Non-interest expensesamounted to$127.1 million inthe first quarterof 2026, anincrease of $0.2million, from $126.9million in the
fourth quarter of 2025. Non-interest expenses for the first quarter of 2026reflect the following significant variances:
●
A$2.1millionincreaseinemployees'compensationandbenefitsexpenses,drivenbya$1.5millionincreaseinpayroll
taxes, anda $1.8millionincrease instock-basedcompensation expense,mostly forstock grantsduring thefirst quarterof
2026 forretirement-eligible employees,partially offsetby a $1.3million decreasein salarycompensation mainlydue tothe
effect of two less working days in the first quarter of 2026.
●
A$1.1millionincreaseintheFDICdepositinsuranceexpensedrivenbytheaforementioned$1.1millionreversal
recognized in the fourth quarter of 2025 related to the FDIC special assessment.
Partially offset by:
●
A $2.4million decreasein businesspromotion expensesas aresult ofcertain marketingefforts duringthe fourthquarter of
2025.
●
A$0.4milliondecreaseincreditanddebitcardprocessingexpenses,mainlydueto$1.1millionindebitcardexpense
reimbursementsrecognizedduringthefirstquarterof2026,partiallyoffsetbya$0.7millionincreasedrivenbyhigher
transactional volumes.
First BanCorp. Announces Earnings for the Quarter Ended March31, 2026
- Page 6 of 27
INCOME TAXES
TheCorporationrecordedanincometaxexpenseof$25.5millionforthefirstquarterof2026,comparedto$20.2millionforthe
fourthquarterof2025.Theincreaseinincometaxexpensewasdrivenbyhigherpre-taxincomeandanadjustmentinthefourth
quarter of 2025 due to a lower than estimated annual effective taxrate.
For the year,the Corporation's annualeffective tax rate, excluding discreteitems, was estimated at 21.9%for the first quarter of 2026,
comparedto21.6%forthefourthquarterof2025.AsofMarch31,2026,theCorporationhadanetdeferredtaxassetof$143.6
million,netofavaluationallowanceof$75.9million,comparedtoanetdeferredtaxassetof$149.0million,netofavaluation
allowance of $75.0 million as of December 31, 2025.
First BanCorp. Announces Earnings for the Quarter Ended March31, 2026
- Page 7 of 27
CREDIT QUALITY
Non-Performing Assets
The following table sets forth information concerning non-performingassets for the last five quarters:
(Dollars in thousands)
March 31, 2026
December 31, 2025
September 30, 2025
June 30, 2025
March 31, 2025
Nonaccrual loans held for investment:
Residential mortgage
$
28,071
$
29,169
$
28,866
$
30,790
$
30,793
Construction
5,414
5,536
5,591
5,718
1,356
Commercial mortgage
7,442
8,382
21,437
22,905
23,155
Commercial and Industrial ("C&I")
27,100
28,042
19,650
20,349
20,344
Consumer and finance leases
19,717
21,434
20,717
20,336
22,813
Total nonaccrual loans held for investment
$
87,744
$
92,563
$
96,261
$
100,098
$
98,461
OREO
6,344
7,522
9,343
14,449
15,880
Other repossessed property
13,124
12,389
12,234
11,868
13,444
Other assets
(1)
1,609
1,620
1,579
1,576
1,599
Total non-performing assets
(2)
$
108,821
$
114,094
$
119,417
$
127,991
$
129,384
Past due loans 90 days and still accruing
(3)
$
28,949
$
31,913
$
28,891
$
29,535
$
37,117
Nonaccrual loans held for investment to total loans held for investment
0.67%
0.71%
0.74%
0.78%
0.78%
Nonaccrual loans to total loans
0.67%
0.70%
0.74%
0.78%
0.78%
Non-performing assets to total assets
0.57%
0.60%
0.62%
0.68%
0.68%
(1)
Residential pass-through MBS issued by the Puerto Rico Housing Finance Authority ("PRHFA") held as part of the available-for-sale debt securities portfolio.
(2)
Excludes purchased-credit deteriorated("PCD") loans previously accountedfor under Accounting StandardsCodification ("ASC") Subtopic 310-30for which theCorporation made the accountingpolicy election of
maintaining poolsof loansas "units ofaccount" both atthe time ofadoption of currentexpected creditlosses ("CECL") onJanuary 1,2020 andon an ongoingbasis for creditloss measurement. Theseloans will
continue to beexcluded from nonaccrualloan statistics as longas the Corporation canreasonably estimate thetiming and amountof cash flows expectedto be collectedon the loan pools.The portion ofsuch loans
contractually pastdue 90 daysor more amountedto $4.2 millionas of March31, 2026 (December31, 2025 -$4.8 million; September30, 2025 -$5.0 million; June30, 2025 -$4.9 million; March31, 2025- $5.7
million).
(3)
These include rebooked loans,which were previously pooledinto GNMA securities, amountingto $6.7 million asof March 31, 2026(December 31, 2025 - $6.7million; September 30, 2025- $3.8 million; June30,
2025 -$5.5 million;March 31,2025 -$6.4 million).Under theGNMA program,the Corporationhas theoption butnot theobligation torepurchase loansthat meetGNMA'sspecified delinquencycriteria. For
accounting purposes, the loans subject to the repurchase option are required to be reflected on the financial statements with an offsetting liability.
Variancesin credit quality metrics:
●
Totalnon-performingassetsdecreasedby$5.3millionto$108.8millionasofMarch31,2026,drivenbya$4.8million
decreaseinnonaccrualloans.Nonaccrualcommercialandconstructionloansdecreasedby$2.0million,drivenbya$1.2
millionrepaymentofaC&IloaninthePuertoRicoregioninthefoodretailindustry,anda$0.6millioncharge-offofa
commercial mortgage loanin the VirginIslands region. Nonaccrualconsumer loans decreasedby $1.7 million,mainly in the
autoloanportfolio,andnonaccrualresidentialmortgageloansdecreasedby$1.1million.Inaddition,theOREOportfolio
balance decreased by$1.2 million, mainlyattributable to thesale of residentialproperties in thePuerto Rico region,partially
offset by an increase of $0.7 million in other repossessed properties.
●
Inflows tononaccrual loansheld forinvestment were$34.3 millionin thefirst quarterof 2026,a decreaseof $11.9million,
compared to inflowsof $46.2 million inthe fourth quarter of2025. Inflows to nonaccrualcommercial and constructionloans
were $1.2 millionin the first quarterof 2026, a decreaseof $11.2million, compared toinflows of $12.4million in the fourth
quarterof2025,mostlyassociatedwitha$10.0millionC&IloaninthePuertoRicoregioninthetelecommunications
industry.Inflows tononaccrual residentialmortgage loanswere $3.4million inthe firstquarter of2026, adecrease of$0.9
million, compared toinflows of $4.3million in thefourth quarter of2025. Inflows tononaccrual consumerloans were $29.7
million in thefirst quarter of2026, an increaseof $0.2 million,compared to inflowsof $29.5 millionin the fourthquarter of
2025. See
Early Delinquency
below
for additional information.
●
Adverselyclassifiedcommercialandconstructionloansdecreasedby$5.4millionto$76.0millionas ofMarch31,2026,
compared to $81.4million as ofDecember 31, 2025,driven by $3.8million in repaymentson three C&Iloans, including the
aforementioned repayment of a nonaccrual C&I loan in the Puerto Ricoregion.
Early Delinquency
Totalloansheldforinvestmentinearlydelinquency(i.e.,30-89dayspastdueaccruingloans,asdefinedinregulatoryreporting
instructions)amountedto$110.5millionasofMarch31,2026,adecreaseof$34.5million,comparedto$145.0millionasof
December 31, 2025, driven by a $31.0 million decrease in consumerloans, primarily in the auto loan portfolio.
First BanCorp. Announces Earnings for the Quarter Ended March31, 2026
- Page 8 of 27
Allowance for Credit Losses
The following table summarizes the activity of the ACL for on-balancesheet and off-balance sheet exposures during the first quarter
of 2026 and fourth quarter of 2025:
Quarter Ended March 31, 2026
Loans and Finance Leases
Debt Securities
(Dollars in thousands)
Residential
Mortgage
Loans
Commercial and
Construction
Loans
Consumer
Loans and
Finance Leases
Total Loans and
Finance Leases
Unfunded
Loans
Commitments
Held-to-
Maturity
Available-
for-Sale
Total ACL
Allowance for Credit Losses
Allowance for credit losses, beginning balance
$
41,071
$
70,920
$
137,046
$
249,037
$
3,013
$
733
$
763
$
253,546
Provision for credit losses - expense (benefit)
239
(984)
17,915
17,170
107
(92)
88
17,273
Net recoveries (charge-offs)
224
(818)
(20,553)
(21,147)
-
-
(12)
(21,159)
Allowance for credit losses, end of period
$
41,534
$
69,118
$
134,408
$
245,060
$
3,120
$
641
$
839
$
249,660
Amortized cost of loans and finance leases
$
2,914,898
$
6,517,223
$
3,658,956
$
13,091,077
Allowance for credit losses on loans to amortized cost
1.42%
1.06%
3.67%
1.87%
Quarter Ended December 31, 2025
Loans and Finance Leases
Debt Securities
(Dollars in thousands)
Residential
Mortgage
Loans
Commercial and
Construction
Loans
Consumer
Loans and
Finance Leases
Total Loans and
Finance Leases
Unfunded
Loans
Commitments
Held-to-
Maturity
Available-
for-Sale
Total ACL
Allowance for Credit Losses
Allowance for credit losses, beginning balance
$
40,272
$
68,580
$
138,138
$
246,990
$
2,611
$
698
$
658
$
250,957
Provision for credit losses - expense
644
2,393
19,381
22,418
402
35
116
22,971
Net recoveries (charge-offs)
155
(53)
(20,473)
(20,371)
-
-
(11)
(20,382)
Allowance for credit losses, end of period
$
41,071
$
70,920
$
137,046
$
249,037
$
3,013
$
733
$
763
$
253,546
Amortized cost of loans and finance leases
$
2,908,302
$
6,508,178
$
3,708,876
$
13,125,356
Allowance for credit losses on loans to amortized cost
1.41%
1.09%
3.70%
1.90%
Allowance for Credit Losses for Loans and FinanceLeases
As of March 31, 2026,the ACL for loans andfinance leases was $245.1million, a decrease of $3.9million, from $249.0 millionas of
December 31,2025. Theratio ofthe ACLfor loansand financeleases tototal loansheld forinvestment was1.87% asof March31,
2026, compared to 1.90% as of December 31, 2025.
ThedecreasewasmainlyrelatedtotheACLforconsumerloans,whichdecreasedby$2.6million,drivenbyimprovementsin
macroeconomic variables,mainly in theprojection of theunemployment rate,and lower delinquencylevels, partially offsetby higher
qualitative reservesassociated withgeopolitical uncertaintydriven by,among otherthings, higheroil prices asa result ofthe conflict
intheMiddleEast.Inaddition,theACLforcommercialandconstructionloansdecreasedby$1.8million,mainlydueto
improvementsintheprojectionsoftheunemploymentrateandtheCREpriceindex,netofaforementionedqualitativereserves,
partially offset byrenewals and refinancings.Meanwhile, the ACL forresidential mortgage loans increasedby $0.5 million, drivenby
loan growth and the aforementioned geopolitical uncertainty,partially offset by an improvement in the unemployment rate.
The provisionfor creditlosses on loansand financeleases was $17.2million forthe firstquarter of2026, comparedto $22.4million
in the fourth quarter of 2025, as detailed below:
●
Provision forcredit losseson thecommercialand constructionloan portfolioswas anet benefitof $1.0million forthe
firstquarterof 2026,compared toanexpenseof $2.4millionforthefourthquarterof 2025.The netbenefitrecorded
during the first quarter of 2026 was driven primarily by the aforementionedimprovement in macroeconomic variables.
●
Provision for credit losses on theconsumer loan and finance lease portfolioswas an expense of $18.0 million forthe first
quarter of2026, comparedto anexpense of$19.4million forthe fourthquarter of2025. The$1.4 milliondecreasein
provision expense was driven by the aforementioned factors.
●
Provision forcredit losses onthe residentialmortgage loanportfolio wasan expenseof $0.2 millionfor the firstquarter
of 2026,compared toan expenseof $0.6million forthe fourthquarter of2025. The$0.4 milliondecrease inprovision
expensewas drivenbylowerloangrowththanthepreviousquarter,partiallyoffsetbytheaforementionedqualitative
reserves for the geopolitical uncertainty discussed above.
First BanCorp. Announces Earnings for the Quarter Ended March31, 2026
- Page 9 of 27
Net Charge-Offs
The following table presents ratios of net (recoveries) charge-offsto average loans held-in-portfolio for the last five quarters:
Quarter Ended
March 31, 2026
December 31, 2025
September 30, 2025
June 30, 2025
March 31, 2025
Residential mortgage
-0.03%
-0.02%
-0.00%
-0.00%
0.00%
Construction
-0.02%
-0.02%
-0.50%
-0.02%
-0.02%
Commercial mortgage
0.08%
0.01%
-0.02%
-0.01%
-0.01%
C&I
0.03%
0.00%
0.01%
-0.09%
-0.01%
Consumer loans and finance leases
2.23%
2.20%
2.16%
2.12%
2.31%
(1)
Total loans
0.65%
0.63%
0.62%
0.60%
0.68%
(1)
(1)
Includes $2.4million in recoveriesassociated withthe bulksale offully charged-offconsumer loansand financeleases, whichreduced theratios ofconsumer loansand finance
leases and total net charge-offs to related averageloans by 25 basis points and 8 basis points, respectively.
Theratiosabovearebasedonannualizednetcharge-offsandarenotnecessarilyindicativeoftheresultsexpectedinsubsequent
periods.
Net charge-offswere $21.1 millionfor the firstquarter of 2026,or an annualized0.65% of averageloans, compared to$20.4 million,
or anannualized 0.63%of averageloans, inthe fourthquarter of2025. The$0.7 millionincrease innet charge-offswas drivenby a
$0.6million charge-off associated with a nonaccrual commercialmortgage loan in the VirginIslands region.
Allowance for Credit Losses for Unfunded LoanCommitments
AsofMarch31,2026,theACLforoff-balancesheetcreditexposuresincreasedto$3.1million,comparedto$3.0millionasof
December 31, 2025.
Allowance for Credit Losses for Debt Securities
As of March 31, 2026, the ACL for debt securities was $1.5 million, ofwhich $0.6 million was related to Puerto Rico municipal bonds
classified as held-to-maturity,compared to $1.5 million and $0.7 million, respectively,as of December 31, 2025.
First BanCorp. Announces Earnings for the Quarter Ended March31, 2026
- Page 10 of 27
STATEMENTOF FINANCIAL CONDITION
Totalassetswereapproximately$19.1billionasofMarch31,2026,down$46.8millionfromDecember31,2025.Thefollowing
variances within the main components of total assets are noted:
●
A $107.7 million decrease incash and cash equivalents,mainly related to the netcash outflow for the purchaseof investment
securities, capital deploymentactions,and the overall decreasein deposits, partially offsetby the net incomegenerated in the
first quarter of 2026.
●
A $38.2 milliondecrease in total loans,driven by a$49.9 million decreasein consumer loans,of which $28.6million was in
autoloansandfinanceleasesinthePuertoRicoregion.Intermsofgeography,thedeclineconsistedofa$112.9million
decreasein thePuerto Ricoregion, drivenby theaforementioneddecreasein consumerloans andlower utilizationof C&I
linesofcredit, mainlyin automotivelending,partiallyoffsetby increasesof $47.2millionin theFloridaregion and$27.5
million in the VirginIslands region.
Totalloan originations,including refinancings, renewals,and draws fromexisting commitments, amountedto $1.2billion in
the first quarter of 2026, a decrease of $143.0 million compared to the fourthquarter of 2025.
Totalloan originationsin thePuerto Ricoregion amountedto $848.9million inthe firstquarter of2026, comparedto $1.1
billion in thefourth quarter of2025. The decreaseof $219.9 millionin total loanoriginations was mainlyrelated to a$192.7
million decreasein commercialand constructionloans, ofwhich $174.0million wasin C&Iloans, drivenby multipleterm
loanoriginationsinthefourthquarterof2025totaling$114.7millionandtheaforementionedlower utilizationoflinesof
credit.
TotalloanoriginationsintheFloridaregionamountedto$228.4millioninthefirstquarterof2026,comparedto$295.8
millioninthefourthquarterof2025.The$67.4milliondecreaseintotalloanoriginationswasmainlyrelatedtoa$66.5
million decrease incommercial and constructionloan originations, ofwhich $42.1 millionwas in commercialmortgage loan
originations and $23.5 million was in C&I loan originations.
TotalloanoriginationsintheVirginIslandsregionamountedto$170.9millioninthefirstquarterof2026,comparedto
$26.6 million in the fourthquarter of 2025. The increaseof $144.3 million in total loanoriginations was mainly related tothe
originationofa$138.1milliongovernmentlineofcreditduringthefirstquarterof2026,ofwhich$108.1millionwasa
refinancing.
Partially offset by:
●
A $108.7million increasein investmentsecurities, drivenby purchasesduring thefirst quarterof 2026of $437.0million in
U.S. agencies'MBS anddebenturesat anaverage yieldof 4.57%,partially offsetby repaymentsof $322.2million ofU.S.
agencies' MBS anddebentures, of which$125.7 millionwas associated withmatured securities,and a $6.2million decrease
inthe fairvalueof available-for-saledebtsecuritiesattributabletochanges inmarketinterest rates.In addition,duringthe
first quarter of 2026, $375.0 million in matured U.S. Treasurybills were replaced with $370.6 million in U.S. Treasury bills.
Totalliabilitieswereapproximately$17.1billionas ofMarch31, 2026,a decreaseof$47.2millionfromDecember 31,2025.The
following variances within the main components of total liabilities are noted:
●
Total deposits decreasedby $74.3 million consisting of:
o
A
$146.3 million decrease in government deposits, driven by a declineof $134.2 million in the Puerto Rico region.
o
An $86.5 milliondecrease in brokeredCDs in the Floridaregion. The decreaseconsisted of maturingbrokered CDs
amounting to $119.6million with an all-in cost of4.42% that were paid offduring the first quarter of 2026,partially
offsetby $33.1millionof newissuances withoriginalaverage maturitiesof approximately1.2 yearsand anall-in
cost of 3.77%.
Partially offset by:
o
A $158.5million increasein deposits,excluding brokeredCDs andgovernment deposits,consisting ofincreases of
$97.0 millionin the PuertoRico region,$37.8 millionin the VirginIslands region,and $23.7 millionin the Florida
region.Theincreaseinsuchdepositsconsistsofa$115.4millionincreaseininterest-bearingdeposits,ofwhich
$73.1 million was in the Puerto Rico region, and a $43.1 million increase innon-interest-bearing deposits.
First BanCorp. Announces Earnings for the Quarter Ended March31, 2026
- Page 11 of 27
Total stockholders'equity amounted to $2.0 billion as of March 31,2026, an increase of $0.4 million from December 31,2025, driven
by thenet incomegenerated inthe firstquarter of2026, partiallyoffset by$50.0 millionin commonstock repurchasesat anaverage
price of $20.75,$31.5 million incommon stock dividendsdeclared in thefirst quarter of2026,and a $6.2million decrease inthe fair
valueofavailable-for-saledebtsecuritiesduetochangesinmarketinterestratesrecognizedaspartofaccumulatedother
comprehensive loss.
As ofMarch 31,2026, capitalratios exceededthe requiredregulatory levelsfor bankholding companiesand well-capitalizedbanks.
TheCorporation'sestimatedCET1capital,tier1capital,totalcapitalandleverageratiosundertheBaselIIIruleswere16.93%,
16.93%, 18.19%, and11.66%, respectively,as of March 31, 2026,compared to CET1 capital,tier 1 capital, totalcapital, and leverage
ratios of 16.76%, 16.76%, 18.01%, and 11.58%,respectively, as of December31, 2025.
Meanwhile, estimated CET1 capital,tier 1 capital, total capital andleverage ratios of our banking subsidiary,FirstBank, were 15.76%,
16.51%, 17.77%,and 11.37%,respectively,as of March31, 2026, comparedto CET1 capital,tier 1 capital,total capital andleverage
ratios of 15.60%,16.35%, 17.61%,and 11.30%, respectively,as of December 31, 2025.
Liquidity
Cashandcashequivalentsdecreasedby$107.7millionto$550.9millionasofMarch31,2026.Whenadding$2.3billionoffree
high-qualityliquidsecuritiesthatcouldbeliquidatedor pledgedwithinoneday,totalcoreliquidityamountedto$2.9 billionas of
March 31, 2026, or 14.66% of total assets, comparedto $2.6billion, or 13.54% of total assets as of December31, 2025. In addition, as
of March31, 2026,the Corporationhad $1.0billion availablefor creditwith theFHLB basedon thevalue ofthe collateralpledged
with theFHLB. Assuch, thebasic liquidityratio (whichincludes cash,free high-qualityliquid assetssuch asU.S. governmentand
government-sponsored enterprises' obligations that couldbe liquidated or pledged within one day,and available secured lines of credit
with the FHLB to total assets) was approximately 20.14% as of March31, 2026, compared to 19.39% as of December 31, 2025.
InadditiontotheaforementionedavailablecreditfromtheFHLB,theCorporationalsomaintainsborrowingcapacityattheFED
DiscountWindowProgram.TheCorporationhadapproximately$2.6billionavailableforfundingundertheFED'sBorrower-In-
CustodyProgramas ofMarch 31,2026. Inthe aggregate,as ofMarch 31,2026, theCorporation had$6.5 billionavailable tomeet
liquidity needs, or 134% of estimated uninsured deposits (excludingfully collateralized government deposits).
The Corporation'stotal deposits, excludingbrokered CDs, amountedto $16.1 billion asof each ofMarch 31, 2026and December 31,
2025,which included$2.9 billionand $3.0billion, respectively,in governmentdeposits thatare fullycollateralized.Excluding fully
collateralized government deposits andFDIC-insured deposits,the estimated amount ofuninsured deposits was $4.8billion as of each
of March31, 2026and December31, 2025,which represents30.12% and29.79% oftotal deposits,respectively.Refer toTable9 in
the accompanying tables (Exhibit A) for additional information aboutthe deposits composition.
First BanCorp. Announces Earnings for the Quarter Ended March31, 2026
- Page 12 of 27
Tangible CommonEquity (Non-GAAP)
Onanon-GAAPbasis,theCorporation'stangiblecommonequityratioincreasedto10.11%asofMarch31,2026,comparedto
10.08%asofDecember31,2025.Referto
Non-GAAPDisclosures-Non-GAAPFinancialMeasures
forthedefinitionofand
additional information about this non-GAAP financial measure.
The following tablepresents a reconciliationof the Corporation'stangible common equityand tangible assetsto the most comparable
GAAP items as of the indicated dates:
March 31, 2026
December 31, 2025
September 30, 2025
June 30, 2025
March 31, 2025
(In thousands, except ratios and per shareinformation)
Tangible Equity:
Total common equity - GAAP
$
1,967,239
$
1,966,865
$
1,918,045
$
1,845,455
$
1,779,342
Goodwill
(38,611)
(38,611)
(38,611)
(38,611)
(38,611)
Other intangible assets
(3,240)
(3,458)
(3,676)
(4,535)
(5,715)
Tangible common equity - non-GAAP
$
1,925,388
$
1,924,796
$
1,875,758
$
1,802,309
$
1,735,016
Tangible Assets:
Total assets - GAAP
$
19,086,105
$
19,132,892
$
19,321,335
$
18,897,529
$
19,106,983
Goodwill
(38,611)
(38,611)
(38,611)
(38,611)
(38,611)
Other intangible assets
(3,240)
(3,458)
(3,676)
(4,535)
(5,715)
Tangible assets - non-GAAP
$
19,044,254
$
19,090,823
$
19,279,048
$
18,854,383
$
19,062,657
Common shares outstanding
154,694
156,619
159,135
161,508
163,104
Tangible common equity ratio - non-GAAP
10.11%
10.08%
9.73%
9.56%
9.10%
Tangible book value per common share - non-GAAP
$
12.45
$
12.29
$
11.79
$
11.16
$
10.64
First BanCorp. Announces Earnings for the Quarter Ended March31, 2026
- Page 13 of 27
Exposure to Puerto Rico Government
Direct Exposure
As ofMarch 31,2026, theCorporation had$297.5 millionof directexposure tothe PuertoRico government,its municipalities,and
publiccorporations,adecreaseof$0.3millioncomparedto$297.8millionasofDecember31,2025.AsofMarch31,2026,
approximately $211.5million of the exposure consisted ofloans and obligations of municipalities inPuerto Rico that are supportedby
assignedpropertytaxrevenuesandforwhich,inmostcases,thegoodfaith,credit,andunlimitedtaxingpoweroftheapplicable
municipality havebeen pledgedto theirrepayment, and$42.3 millionconsisted ofloans andobligations whichare supportedby one
or morespecific sourcesof municipalrevenues. The Corporation'stotal directexposure tothe PuertoRico governmentalso included
$8.6millioninaloanextendedtoanaffiliateofthePuertoRicoElectricPowerAuthorityand$32.4millioninloanstoapublic
corporation ofPuerto Rico. Inaddition, thetotal direct exposureincluded anobligation of thePuerto Rico government,specifically a
residential pass-throughMBS issuedby thePRHFA,at anamortized costof $2.7million (fairvalue of$1.6 millionas ofMarch 31,
2026), includedas partof theCorporation'savailable-for-sale debtsecurities portfolio. Thisresidential pass-throughMBS issuedby
the PRHFAis collateralizedby certainsecond mortgagesand hadan unrealizedloss of$1.1 millionas ofMarch 31,2026, ofwhich
$0.3 million is due to credit deterioration.
TheaforementionedexposuretomunicipalitiesinPuertoRicoincluded$79.8millionoffinancingarrangementswithPuertoRico
municipalitiesthatwereissuedinbondformbutunderwrittenasloanswithfeaturesthataretypicallyfoundincommercialloans.
These bonds are accounted for as held-to-maturity debt securities.
Indirect Exposure
AsofMarch31,2026andDecember31,2025,theCorporationhad$2.4billionand$2.5billion,respectively,ofpublicsector
depositsinPuertoRico.Approximately20%ofthepublicsectordepositsasofMarch31,2026werefrommunicipalitiesand
municipalagenciesinPuertoRico,and80%werefrompubliccorporations,thePuertoRicocentralgovernmentandagencies,and
U.S. federal government agencies in Puerto Rico.
Additionally,asofMarch31,2026,theoutstandingbalanceofconstructionloansfundedthroughconduitfinancingstructuresto
support thefederal programsof Low-IncomeHousing TaxCredit combinedwith otherfederal programsamounted to$81.6 million,
comparedto$92.4millionasofDecember31,2025.Themainobjectiveoftheseprogramsistospurdevelopmentinnewor
rehabilitated andaffordable rentalhousing. PRHFA,as programsubrecipient andconduit issuer,issues tax-exemptobligations which
are acquiredby private financialinstitutions andare requiredto co-underwritewith PRHFAa mirrorconstruction loanagreement for
the specific project loanto which the Corporationwill serve as ultimate lender butwhere the PRHFAwill be the lenderof record. The
total amount of unfunded loan commitments related to these loans as of March31, 2026 was $55.3 million.
First BanCorp. Announces Earnings for the Quarter Ended March31, 2026
- Page 14 of 27
NON-GAAP DISCLOSURES
ThispressreleasecontainsGAAPfinancialmeasuresandnon-GAAPfinancialmeasures.Non-GAAPfinancialmeasuresareused
when management believesthat the presentation ofthese non-GAAP financialmeasures enhances theability of analysts andinvestors
to analyze trendsin the Corporation'sbusiness and understandthe performance of theCorporation. The Corporationmay utilize these
non-GAAPfinancial measuresas guidesin itsbudgeting andlong-term planningprocess. Wherenon-GAAPfinancial measuresare
used,themostcomparableGAAPfinancialmeasure,aswellasthereconciliationofthenon-GAAPfinancialmeasuretothemost
comparable GAAP financial measure, can be foundin the text or in the tables in or attached to this press release.Any analysis of these
non-GAAP financial measures should be used only in conjunction with resultspresented in accordance with GAAP.
Certain non-GAAPfinancial measures,such asadjusted non-interestexpenses, adjustednet income,adjusted earningsper share,and
adjustedpre-tax,pre-provisionincome,excludetheeffectofitemsthatmanagementbelievesarenotreflectiveofcoreoperating
performance(the"SpecialItems").Othernon-GAAPfinancialmeasuresincludenetinterestincome,interestratespread,andnet
interest margineach presented on atax-equivalent basis; tangiblecommon equity; tangiblebook value per commonshare; and certain
capital ratios.These measuresshould beread inconjunction withthe accompanyingtables (ExhibitA), whichare anintegral partof
First BanCorp published this content on April 22, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on April 22, 2026 at 13:32 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]