Financial Performance - Net income reached $1005 million, a $203 million increase compared to 2Q 2025[5, 11] - Record net interest income of $2179 million, up 8% year-over-year[5] - Adjusted pre-tax, pre-provision income (non-GAAP) was $1215 million, a 9% increase year-over-year[5] Balance Sheet - Total loans increased by $1814 million to $131 billion, a 14% increase compared to the prior quarter, driven by commercial segments[5] - Core deposits, excluding brokered and fully collateralized government deposits, rose by $1387 million to $128 billion[5] - Fully collateralized government deposits increased by $665 million to $34 billion[5] Asset Quality & Capital - Non-performing assets (NPA) ratio decreased to 062%[5] - Allowance for credit losses (ACL) coverage ratio on loans and leases decreased by 4 bps to 189%[5] - Common Equity Tier 1 (CET1) ratio remained strong at 167%[5] - Tangible book value per share (non-GAAP) grew by 56% to $1179[5]

Financial Performance - First BanCorp reported a net income of $100.5 million, or $0.63 per diluted share, for Q3 2025, up from $80.2 million, or $0.50 per diluted share, in Q2 2025, and $73.7 million, or $0.45 per diluted share, in Q3 2024[1][7] - Adjusted diluted earnings per share increased by 13% year-over-year, resulting in a strong adjusted return on average assets of 1.70%[2][5] - The Corporation recorded an income tax expense of $5.7 million for Q3 2025, a significant decrease from $22.7 million in Q2 2025, due to a one-time reversal of $16.6 million in valuation allowance[16] - The adjusted net income for the third quarter of 2025 was $81.615 million, compared to $80.180 million in the previous quarter and $73.727 million in the same quarter of 2024[68] - The return on average equity (GAAP) for the third quarter of 2025 was 21.36%, up from 17.79% in the previous quarter and 18.31% in the same quarter of 2024[68] - The efficiency ratio for the quarter was 50.22%, compared to 52.41% in the same quarter last year, indicating improved operational efficiency[79] Loan and Deposit Growth - Total loans grew by $181 million, or 5.6% linked quarter annualized, surpassing the $13 billion loan portfolio threshold for the first time since 2010[3][6] - Core customer deposits increased by $139 million, or 4.4% linked quarter annualized, reflecting healthy growth in non-interest-bearing accounts and time deposits[3][5] - Total deposits increased by $307.0 million, with a $138.7 million rise in deposits excluding brokered CDs and government deposits[45] - Total loan originations amounted to $1.3 billion in Q3 2025, a decrease of $39.2 million compared to Q2 2025[35] - Total loans reached $13,061,230 thousand as of September 30, 2025, an increase from $12,879,859 thousand as of June 30, 2025, indicating a growth of 1.41%[94] Credit Quality and Loss Provisions - The provision for credit losses decreased to $17.6 million from $20.6 million in the previous quarter, primarily due to improvements in the residential mortgage loan portfolio[6][7] - Non-performing assets decreased by $8.6 million to $119.4 million, driven by a reduction in the OREO portfolio balance and nonaccrual loans[6][7] - The allowance for credit losses (ACL) for loans and finance leases was $247.0 million as of September 30, 2025, a decrease of $1.6 million from $248.6 million as of June 30, 2025, with a ratio of 1.89%[24] - The provision for credit losses on loans and finance leases was $18.3 million for Q3 2025, down from $20.4 million in Q2 2025[26] - Net charge-offs were $19.9 million for Q3 2025, or an annualized 0.62% of average loans, compared to $19.1 million, or 0.60%, in Q2 2025[30] Capital and Liquidity - Total capital ratios as of September 30, 2025, were estimated at 17.93% for total capital and 16.67% for common equity tier 1 capital, exceeding required regulatory levels[6][7] - Cash and cash equivalents amounted to $899.6 million, with total available liquidity at 18.10% of total assets, up from 17.58%[6][7] - The Corporation had $6.2 billion available to meet liquidity needs, representing 134% of estimated uninsured deposits[48] - The tangible common equity ratio increased to 9.73% as of September 30, 2025, from 9.56% as of June 30, 2025[50] Interest Income and Margin - Net interest income for Q3 2025 was $217.9 million, an increase of $2 million from Q2 2025, with a net interest margin of 4.57%[5][9] - Interest income on debt securities increased by $2.3 million due to $585.4 million in purchases of higher-yielding available-for-sale debt securities[14] - The average yield on interest-earning assets (GAAP) was 5.93% for the quarter ended September 30, 2025, compared to 5.78% in the same quarter of 2024, showing an increase of 0.15 percentage points[86] - The net interest margin improved to 4.70% for the nine-month period ended September 30, 2025, compared to 4.31% in the prior year, reflecting a positive trend in profitability[90] Non-Interest Income and Expenses - Non-interest income decreased by $0.2 million to $30.8 million in Q3 2025, driven by lower debit and credit card processing income[13] - Total non-interest expenses increased by $1.6 million to $124.9 million in Q3 2025, with adjusted non-interest expenses rising by $3.9 million on a non-GAAP basis[15] - Total non-interest income for the nine-month period ended September 30, 2025, was $97,478,000, a slight decrease of 1.1% from $98,523,000 in the same period of 2024[78] Tax and Regulatory Changes - The Corporation's estimated annual effective tax rate decreased to 22.2% for Q3 2025, attributed to a higher proportion of exempt to taxable income[17] - A reversal of approximately $16.6 million in valuation allowance related to deferred tax assets was recorded due to the enactment of Act 65-2025, reflecting expectations of realizing tax benefits[59]

Core Points - First BanCorp announced a new stock repurchase program of up to $200 million, reflecting confidence in its balance sheet and long-term outlook [1][4] - The company declared a quarterly cash dividend of $0.18 per share, payable on December 12, 2025, to shareholders of record on November 28, 2025 [4][10] - The stock repurchase program will be executed at management's discretion and may include various methods such as open market purchases and privately negotiated transactions [1][4] Company Overview - First BanCorp is the parent corporation of FirstBank Puerto Rico, operating in Puerto Rico, the U.S. and British Virgin Islands, and Florida [2] - The company's shares trade on the New York Stock Exchange under the symbol "FBP" [2] - First BanCorp reported a net income of $80.2 million for the second quarter of 2025, an increase from $77.1 million in the first quarter of 2025 [8]

Core Insights - The Trump administration's rollback of climate-friendly policies presents an opportunity for Climate First Bancorp to expand its green-focused lending, as evidenced by its recent $20 million line of credit to Sunwealth for solar and battery storage projects [1][12] Industry Overview - The recent tax legislation passed by Congress phases out certain tax credits for residential solar lending, impacting many banks and fintechs in the solar lending space, although commercial solar tax credits have a longer phaseout timeline [2] - The demand for energy in the U.S. is escalating, driven by the growth of data centers and artificial intelligence, which necessitates increased energy supply [4][11] Company Strategy - Climate First Bancorp, with $1.1 billion in assets, views the tax changes as an opportunity to accelerate solar lending before further regulatory changes occur, indicating a proactive approach to market conditions [3][8] - The bank's solar financing portfolio comprises over one-third of its total loan portfolio, with 75% allocated to residential and 25% to commercial projects [9] Market Dynamics - The solar energy usage in the U.S. has surged by 30% in the past year, highlighting a growing market despite recent challenges faced by the industry due to federal support cuts [5][11] - Recent bankruptcies of home solar fintechs and scaling back by major banks indicate a contraction in the solar lending market, creating potential opportunities for smaller players like Climate First [6][9] Future Outlook - Sunwealth aims to deploy the $20 million credit over the next year, with a goal of investing $1 billion in community-based solar projects in the next four years, reflecting confidence in the sector's viability [14] - The outlook for community-based solar and solar-plus-storage projects remains positive, with increasing demand despite fluctuating federal policies [15]

Core Viewpoint - First BanCorp is set to announce its financial results for Q3 2025 on October 23, 2025, before market opening [1] Financial Results Announcement - The financial results will cover the period ended September 30, 2025 [1] - A conference call and live webcast will be held at 10:00 AM Eastern Time on the same day to discuss the results [1] - The call and webcast will be available for live broadcast [1]

Core Insights - Bank stocks are a significant indicator of the health of the American economy, often referred to as the economy's circulatory system, facilitating capital flow across various sectors [1][4] - The article discusses the characteristics of bank stocks, their importance to investors, and how to identify the best bank stocks to buy [5][17] Group 1: Definition and Importance of Bank Stocks - Bank stocks represent companies in the banking sector and are classified under the broader category of financial stocks, which includes various financial services [7][8] - They are divided into two sub-categories: diversified banks, which have a national footprint and offer a wide range of services, and regional banks, which operate in limited geographic areas [13] Group 2: Investment Rationale - Investors are drawn to bank stocks due to their critical role in the economy, although their performance can be cyclical, reflecting economic conditions [9][10] - Banks primarily earn through the interest-rate spread, charging higher interest on loans than they pay on deposits, making economic activity a key factor in their profitability [10][11] Group 3: Characteristics of Bank Stocks - Diversified banks may offer more stability due to their varied operations, while regional banks can be more volatile but may provide better short-term opportunities for active investors [14][15] - The consolidation trend in the banking industry presents potential for growth, with over 4,600 banks in the U.S. indicating room for mergers and acquisitions [16][17] Group 4: Criteria for Selecting Bank Stocks - Ideal bank stocks should be part of the S&P Composite 1500, have a long-term EPS growth rate of at least 5%, and a trailing-12-month return on equity of at least 10% [18][19][20] - Stocks should also have at least five covering analysts and a consensus Buy rating, indicating strong market interest and positive outlook [21][22]

Financial Performance - In Q2 2025, First BanCorp reported net income of $80.2 million, with a return on average assets of 1.69% and a return on average common equity of 17.79%[218][225]. - For the quarter ended June 30, 2025, net income reported was $80.18 million, an increase from $75.84 million in the same quarter of 2024, representing a growth of 3.5%[237]. - Adjusted net income for the quarter ended June 30, 2025, was $80.18 million, compared to $75.93 million for the same period in 2024, reflecting an increase of 5.9%[237]. - Non-interest income for the second quarter of 2025 was $30.9 million, a decrease of $1.1 million compared to $32.0 million in Q2 2024, primarily due to lower realized gains from purchased income tax credits[257]. - Non-interest expenses for the first half of 2025 amounted to $246.4 million, an increase from $239.6 million in the same period of 2024, with an efficiency ratio improving to 49.78% from 51.84%[260]. Loan and Asset Management - Total loans increased by 6% on a linked-quarter annualized basis, driven by strong commercial loan production in Puerto Rico and Florida[218]. - Total loan production for Q2 2025 was $1.4 billion, an increase of $153.7 million compared to Q2 2024, mainly in commercial and construction loans[230]. - The total loan portfolio before the ACL increased to $12.9 billion as of June 30, 2025, up by $118.0 million from December 31, 2024, with significant growth in commercial and construction loans[268]. - As of June 30, 2025, the Corporation's loans held-for-investment portfolio comprised 48% commercial and construction loans, 30% consumer loans and finance leases, and 22% residential real estate loans[269]. - Total loans held for investment amounted to $12,870,002,000, with residential mortgage loans making up 22% of the total[359]. Credit Loss Provisions - The provision for credit losses for Q2 2025 was $20.6 million, up from $11.6 million in Q2 2024, primarily due to changes in the residential mortgage loan portfolio[229]. - The provision for credit losses for loans and finance leases was $20.4 million in Q2 2025, compared to $11.9 million in Q2 2024[252]. - The provision for credit losses for the consumer loan and finance lease portfolios decreased to $17.8 million in Q2 2025 from $26.7 million in Q2 2024, driven by improvements in macroeconomic variables and lower net charge-offs[253]. - The total provision for credit losses expense for the quarter was $20,381,000, an increase from $11,930,000 in the same quarter last year[357]. - The ACL for loans and finance leases at the end of the period was $248,578,000, compared to $243,942,000 at the end of the previous year[357]. Interest Income and Expenses - Net interest income for Q2 2025 rose by $16.3 million to $215.9 million, with a net interest margin increase of 34 basis points to 4.56%[229]. - Net interest income for the quarter ended June 30, 2025, was $215.9 million, up from $199.6 million in the same quarter of 2024, marking an increase of 8.2%[238]. - Interest expense on interest-bearing liabilities decreased by $10.3 million, driven by a $5.3 million reduction in borrowings and a $5.0 million decrease in interest-bearing deposits[248]. - The average yield on interest-earning assets increased to 5.88% in Q2 2025 from 5.76% in Q2 2024[251]. - The average cost of interest-bearing checking and savings accounts decreased to 1.38% in Q2 2025 from 1.52% in Q2 2024[248]. Asset and Liability Management - Total assets as of June 30, 2025, were approximately $18.9 billion, a decrease of $395.4 million from December 31, 2024[230]. - Total liabilities decreased by $571.6 million to $17.1 billion, driven by a $317.3 million decrease in total deposits[230]. - Total stockholders' equity increased by $176.2 million to $1.8 billion as of June 30, 2025, supported by net income and an increase in the fair value of available-for-sale debt securities[230]. - Cash and cash equivalents decreased by $422.7 million to $736.7 million as of June 30, 2025, compared to December 31, 2024[322]. - The Corporation had $6.0 billion available to meet liquidity needs as of June 30, 2025, representing 133% of estimated uninsured deposits, up from $5.9 billion or 124% as of December 31, 2024[294]. Market and Economic Conditions - The average unemployment rate in Puerto Rico is forecasted at 5.98% for the remainder of 2025, compared to 6.41% for the same period as of December 31, 2024[354]. - Puerto Rico's real GNP grew by 2.1% in fiscal year 2024, with projections of 1.1% growth for fiscal year 2025 and 0.5% for 2026[387]. - Over 80% of Puerto Rico's outstanding debt has been restructured, saving more than $50 billion in debt payments[391]. - The fiscal year 2026 Budget for Puerto Rico is $32.7 billion, with a 1.5% increase in the general fund budget from the previous fiscal year[394]. - Federal funding for education is expected to decline by approximately $1.2 billion in the fiscal year 2026 Budget[394]. Non-Performing Assets - Non-performing assets increased by $9.7 million to $128.0 million as of June 30, 2025, primarily due to inflows to nonaccrual status in the hospitality industry[230]. - Total non-performing assets decreased to $127,991,000 as of June 30, 2025, from $118,252,000 at the end of 2024[363]. - Nonaccrual commercial and construction loans increased by $16.2 million, primarily due to a $12.6 million commercial mortgage loan in Florida and a $4.3 million construction loan in Puerto Rico[368]. - The amount of nonaccrual consumer loans decreased by $2.5 million to $20.3 million as of June 30, 2025[371]. - Total loans in early delinquency (30-89 days past due) amounted to $134.0 million as of June 30, 2025, a decrease of $19.0 million from $153.0 million as of December 31, 2024[374].

Group 1 - Popular (BPOP) is outperforming its peers in the Finance sector with a year-to-date return of 21.8%, compared to the sector average gain of 9% [4] - The Zacks Rank for Popular is 2 (Buy), indicating strong analyst sentiment and an improving earnings outlook, with a 2.8% increase in the full-year earnings estimate over the past quarter [3] - Popular is part of the Banks - Southeast industry, which has an average gain of 0.2% this year, further highlighting BPOP's strong performance within its industry [5] Group 2 - The Finance group includes 869 companies and is currently ranked 2 in the Zacks Sector Rank, reflecting the strength of the sector [2] - Another notable stock in the Finance sector is First Bancorp (FBP), which has returned 12.1% year-to-date and also holds a Zacks Rank of 2 (Buy) [4] - The consensus EPS estimate for First Bancorp has increased by 4.4% over the past three months, indicating positive analyst sentiment similar to that of Popular [4]

Financial Data and Key Metrics Changes - The company reported a net income of $80 million, translating to a return on assets of 1.69%, driven by record net interest income and solid loan production [5][13] - Pre-tax pre-provision income was slightly below the prior quarter but up 9% compared to the previous year [5] - The efficiency ratio was sustained at 50%, within the target range of 50% to 52% [5][20] Business Line Data and Key Metrics Changes - Total loans grew by 6% on a linked quarter annualized basis, primarily driven by strong commercial loan production in Puerto Rico and Florida [6] - Commercial lending pipelines remain strong, indicating a positive outlook for the second half of the year [6][11] - Customer deposits saw a reduction, mainly from a few large commercial accounts, while retail deposits remained stable [6][32] Market Data and Key Metrics Changes - Economic conditions in Puerto Rico and Florida are trending favorably, with a strong labor market reflected in the lowest unemployment rate in decades [9][10] - The company is seeing encouraging trends in disaster relief inflow, supporting economic activity and infrastructure development [10] Company Strategy and Development Direction - The company continues to invest in technology to achieve long-term growth and improve efficiency [10][68] - Supporting economic development in its markets remains a strategic priority, with a focus on lending to both consumers and corporations [11] - The company aims to deploy 100% of its earnings to shareholders through capital actions, including dividends and stock buybacks [12][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving mid-single-digit loan growth for the full year, despite some uncertainties in the broader market [11][42] - The company is closely monitoring consumer credit and is seeing improvements in recent vintages due to prior credit policy adjustments [24][33] Other Important Information - The company executed a capital deployment plan, redeeming subordinated debentures and repurchasing stock [25][26] - The tangible book value per share increased by 5% during the quarter to $11.16 [26] Q&A Session Summary Question: Clarification on the expected tax rate - The effective tax rate for the full year is estimated to be around 23%, based on the forecasted mix of exempt and taxable income [29] Question: Insights on deposit decline - The decline in deposits was primarily due to non-recurring business activities and high-yielding behaviors among large commercial customers [32][40] Question: Sustainability of charge-offs - Management believes the current level of charge-offs is sustainable and may improve for consumer portfolios [33] Question: Expectations for loan growth in the second half - Loan growth is expected to be driven by both Puerto Rico and Florida, with stability anticipated in deposits [42][44] Question: Loan yields and funding costs - Loan yields have seen slight reductions, and there is potential to continue lowering funding costs as market conditions evolve [53][55]

Financial Data and Key Metrics Changes - The company reported a net income of $80 million, translating to a return on assets of 1.69% driven by record net interest income and solid loan production [4][13] - Pre-tax pre-provision income was slightly below the prior quarter but up 9% compared to the previous year [4] - The efficiency ratio was sustained at 50%, within the target range of 50% to 52% [4][20] Business Line Data and Key Metrics Changes - Total loans grew by 6% linked quarter annualized, primarily driven by strong commercial loan production in Puerto Rico and Florida [5] - Commercial lending pipelines remain strong, crucial for the company's strategy [5] - Customer deposits saw a reduction, mainly from a few large commercial accounts, while retail deposits remained stable [5][30] Market Data and Key Metrics Changes - Economic conditions in Puerto Rico and Florida are trending favorably, with a strong labor market reflected in the lowest unemployment rate in decades [7][10] - There are concerns regarding tariffs and changes in U.S. policies, creating uncertainty for retail and commercial customers [8] Company Strategy and Development Direction - The company is focused on supporting economic development in its markets, with strong demand for commercial credit and stable residential mortgage growth [11] - Key investments are being made in technology to achieve long-term growth and improve customer interactions [10][68] - The company aims to deploy 100% of its earnings to shareholders through capital actions, including dividends and stock buybacks [12][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving mid-single-digit loan growth for the full year, despite some uncertainties in the broader market [11][40] - The company is monitoring consumer credit closely, with improvements noted in recent vintages due to prior credit policy adjustments [23] Other Important Information - The net interest margin increased to 4.56%, with expectations for continued improvement in the coming quarters [18] - The allowance for loan losses increased to $248.6 million, reflecting growth in the commercial portfolio [23][24] Q&A Session Summary Question: Clarification on the expected tax rate - The effective tax rate for the full year is estimated to be around 23%, influenced by the mix of exempt and taxable income [28] Question: Insights on deposit decline - The decline in deposits was primarily due to non-recurring business activities and high-yielding behaviors among large commercial customers [30][39] Question: Sustainability of charge-off levels - Management believes the current level of charge-offs is sustainable and shows an improving trend for consumer portfolios [32] Question: Expectations for loan growth in the second half of the year - The company anticipates stability in deposits and plans to utilize cash flows from investment portfolios to support loan growth [41] Question: Loan yield trends - Loan yields have seen slight reductions, particularly in the commercial portfolio, while consumer portfolio yields remain stable [51] Question: Future funding cost reductions - There is potential to lower funding costs, particularly with maturing broker deposits and time deposits, while managing Federal Home Loan Bank advances based on needs [54]