Financial Performance - Net income reached $802 million, equivalent to $050 per diluted share, an increase from $771 million, or $047 per diluted share, in 1Q 2025[5] - Return on average assets (ROAA) was strong at 169%, up from 164% in 1Q 2025, with the margin increasing by 4 bps to 456%[5] - Adjusted pre-tax, pre-provision income on a non-GAAP basis increased by 9% year-over-year to $1235 million[5] - The efficiency ratio was 500%, slightly up from 496% in 1Q 2025, reflecting sustained expense management[5] Balance Sheet - Total loans increased by $1897 million to $129 billion, a 15% increase compared to the previous quarter, indicating growth across key business segments[5] - Core deposits, excluding brokered and fully collateralized government deposits, decreased by $2409 million to $127 billion[5] - Fully collateralized government deposits decreased by $717 million to $34 billion[5] Asset Quality - The non-performing assets (NPA) ratio remained stable at 068%, while the annualized net charge-offs ratio decreased by 8 bps to 060%[5] - The allowance for credit losses (ACL) coverage ratio on loans and leases decreased slightly by 2 basis points to 193%[5] - Total available liquidity sources amounted to approximately $60 billion, representing 13x of uninsured deposits[5] Capital and Strategic Actions - The company completed the full redemption of remaining junior subordinated debentures, repurchased $282 million in common stock, and declared $290 million in common stock dividends, maintaining a strong CET1 ratio above well-capitalized levels at 166%[5] - Tangible book value per share on a non-GAAP basis grew by 49% to $1116, and the tangible common equity ratio reached 96%[5] Operating Environment - The unemployment rate in Puerto Rico was 55% as of June 2025, and SJU passenger traffic increased by 68% year-to-date compared to the previous year, indicating favorable business activity and economic conditions[7]

```markdown [Executive Summary & Financial Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Financial%20Highlights) First BanCorp. reported strong Q2 2025 performance with increased net income, robust loan production, stable credit trends, and disciplined expense management, as reflected in key financial metrics [Overall Performance](index=1&type=section&id=Overall%20Performance) First BanCorp. reported a strong second quarter of 2025, with net income increasing to $80.2 million, or $0.50 per diluted share, driven by record net interest income, solid loan production, stable credit trends, and disciplined expense management. The Corporation also continued its capital deployment plan, including share repurchases and dividend payouts, while maintaining a robust balance sheet - Net income for Q2 2025 was **$80.2 million**, or **$0.50** per diluted share, an increase from **$77.1 million** (**$0.47** per diluted share) in Q1 2025 and **$75.8 million** (**$0.46** per diluted share) in Q2 2024[1](index=1&type=chunk) - Return on average assets was **1.69%**, driven by record net interest income, solid loan production, stable credit trends, and disciplined expense management[2](index=2&type=chunk) - Earnings per share and pre-tax pre-provision income grew by **9%** year-over-year, with an efficiency ratio sustained at **50%**[2](index=2&type=chunk) - Core loan growth was **6%** linked quarter annualized, primarily from strong commercial loan production in Puerto Rico and Florida[3](index=3&type=chunk) - Capital deployment included **$28 million** in common share repurchases, redemption of junior subordinated debentures, and a high common stock dividend payout ratio[4](index=4&type=chunk) [Key Financial Data](index=1&type=section&id=Key%20Financial%20Data) The Corporation's financial highlights for Q2 2025 show improvements in net interest income and net income compared to both the previous quarter and the prior year, alongside strong profitability and capital ratios Financial Highlights (Q2 2025 vs. Q1 2025 vs. Q2 2024) | Metric | Q2 2025 ($ millions) | Q1 2025 ($ millions) | Q2 2024 ($ millions) | YTD June 2025 ($ millions) | YTD June 2024 ($ millions) | | :-------------------------- | :------ | :------ | :------ | :------------ | :------------ | | Net interest income | 215.859 | 212.397 | 199.628 | 428.256 | 396.148 | | Provision for credit losses | 20.587 | 24.810 | 11.605 | 45.397 | 23.772 | | Non-interest income | 30.950 | 35.734 | 32.038 | 66.684 | 66.021 | | Non-interest expenses | 123.337 | 123.022 | 118.682 | 246.359 | 239.605 | | Income before income taxes | 102.885 | 100.299 | 101.379 | 203.184 | 198.792 | | Income tax expense | 22.705 | 23.240 | 25.541 | 45.945 | 49.496 | | Net income | 80.180 | 77.059 | 75.838 | 157.239 | 149.296 | | Net interest margin | 4.56% | 4.52% | 4.22% | 4.54% | 4.19% | | Efficiency ratio | 49.97% | 49.58% | 51.23% | 49.78% | 51.84% | | Earnings per share - diluted ($) | 0.50 | 0.47 | 0.46 | 0.97 | 0.90 | | Book value per share ($) | 11.43 | 10.91 | 9.10 | 11.43 | 9.10 | | Tangible book value per share ($) | 11.16 | 10.64 | 8.81 | 11.16 | 8.81 | | Return on average equity | 17.79% | 17.90% | 20.80% | 17.85% | 20.17% | | Return on average assets | 1.69% | 1.64% | 1.61% | 1.66% | 1.59% | [Quarterly Performance Analysis (Q2 2025 vs Q1 2025)](index=1&type=section&id=Quarterly%20Performance%20Analysis%20%28Q2%202025%20vs%20Q1%202025%29) This section analyzes First BanCorp.'s Q2 2025 performance against Q1 2025, detailing improvements in profitability and capital, alongside changes in balance sheet, asset quality, and liquidity [Profitability](index=1&type=section&id=Profitability) First BanCorp. saw an increase in net income and net interest income in Q2 2025 compared to Q1 2025, driven by lower interest expenses and a decrease in provision for credit losses. Non-interest income, however, declined due to seasonal factors - Net income increased by **$3.1 million** to **$80.2 million**, and diluted EPS rose from **$0.47** to **$0.50**[8](index=8&type=chunk) - Net interest income increased by **$3.5 million** to **$215.9 million**, partly due to an additional day in Q2 2025 and a **4 basis point** increase in net interest margin to **4.56%**, primarily from a decrease in the cost of funds[8](index=8&type=chunk) - Provision for credit losses decreased by **$4.2 million** to **$20.6 million**, mainly due to lower net charge-offs in consumer loans and finance leases, and improved macroeconomic forecasts[8](index=8&type=chunk) - Non-interest income decreased by **$4.8 million** to **$30.9 million**, primarily due to **$3.3 million** in seasonal contingent insurance commissions recorded in Q1 2025[8](index=8&type=chunk) - Non-interest expenses slightly increased by **$0.3 million** to **$123.3 million**, resulting in an efficiency ratio of **49.97%** (up from **49.58%**)[8](index=8&type=chunk) [Balance Sheet](index=1&type=section&id=Balance%20Sheet) Total loans increased significantly in Q2 2025, driven by commercial and industrial (C&I) loan growth across Florida and Puerto Rico. However, core deposits and government deposits experienced a reduction - Total loans increased by **$189.7 million** to **$12.9 billion**, with C&I loans increasing by **$156.1 million** (Florida: **$78.4 million**, Puerto Rico: **$64.4 million**)[8](index=8&type=chunk) - Core deposits (excluding brokered and government deposits) decreased by **$240.9 million** to **$12.7 billion**, mainly due to fluctuations in large commercial accounts in Puerto Rico[8](index=8&type=chunk) - Government deposits decreased by **$71.7 million** to **$3.4 billion**, primarily in Puerto Rico[8](index=8&type=chunk) - Brokered certificates of deposits (CDs) increased by **$44.1 million** to **$526.5 million**[8](index=8&type=chunk) [Asset Quality](index=1&type=section&id=Asset%20Quality) Asset quality improved in Q2 2025, with a decrease in non-performing assets and a lower annualized net charge-offs ratio, despite some inflows to nonaccrual status - Allowance for credit losses (ACL) coverage ratio slightly decreased to **1.93%** from **1.95%**[8](index=8&type=chunk) - Annualized net charge-offs to average loans ratio decreased to **0.60%** from **0.68%**, mainly due to lower net charge-offs in consumer loans and finance leases[8](index=8&type=chunk) - Non-performing assets decreased by **$1.4 million** to **$128.0 million**, despite a **$4.3 million** construction loan in the hospitality industry entering nonaccrual status[9](index=9&type=chunk) [Liquidity](index=2&type=section&id=Liquidity) Available liquidity decreased in Q2 2025, with a reduction in cash and cash equivalents, though the Corporation maintains substantial access to additional funding sources - Cash and cash equivalents amounted to **$736.7 million**, down from **$1.3 billion**[10](index=10&type=chunk) - Total available liquidity (cash, free high-quality liquid securities, and FHLB lending capacity) was **17.58%** of total assets, down from **18.76%**[10](index=10&type=chunk) [Capital](index=2&type=section&id=Capital) The Corporation's capital ratios remained strong and exceeded regulatory requirements, with an increase in the tangible common equity ratio - Declared **$29.0 million** in common stock dividends and repurchased **$28.2 million** in common stock[11](index=11&type=chunk) - Capital ratios exceeded required regulatory levels, with CET1 capital, Tier 1 capital, total capital, and leverage ratios at **16.61%**, **16.61%**, **17.87%**, and **11.41%**, respectively[11](index=11&type=chunk) - Tangible common equity ratio (non-GAAP) increased to **9.56%** from **9.10%**, driven by a decrease in tangible assets, quarterly earnings, and an increase in the fair value of available-for-sale debt securities[11](index=11&type=chunk) [Detailed Financial Review](index=3&type=section&id=Detailed%20Financial%20Review) A detailed review of First BanCorp.'s Q2 2025 financial results, focusing on the components and drivers of net interest income, non-interest income, non-interest expenses, and income taxes [Net Interest Income](index=3&type=section&id=Net%20Interest%20Income) Net interest income increased in Q2 2025, primarily due to a decrease in interest expense on interest-bearing liabilities, particularly borrowings, and an increase in interest income on loans. The net interest margin also improved Net Interest Income (Quarter Ended) | Metric | June 30, 2025 ($ millions) | March 31, 2025 ($ millions) | December 31, 2024 ($ millions) | September 30, 2024 ($ millions) | June 30, 2024 ($ millions) | | :---------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Interest income | 278.190 | 277.065 | 279.728 | 274.675 | 272.245 | | Interest expense | 62.331 | 64.668 | 70.461 | 72.611 | 72.617 | | Net interest income | 215.859 | 212.397 | 209.267 | 202.064 | 199.628 | | Net interest margin - GAAP | 4.56% | 4.52% | 4.33% | 4.25% | 4.22% | | Average rate on interest-bearing liabilities - GAAP | 2.14% | 2.23% | 2.35% | 2.45% | 2.45% | - Net interest income increased by **$3.5 million** to **$215.9 million** in Q2 2025, including **$1.6 million** from an additional day[14](index=14&type=chunk) - Interest expense on interest-bearing liabilities decreased by **$2.4 million**, driven by a **$2.5 million** decrease in borrowings interest expense (due to FHLB advance repayment and TruPS redemption) and a **$1.2 million** decrease in interest-bearing checking/savings accounts[16](index=16&type=chunk) - Interest income on loans increased by **$1.2 million**, primarily from commercial and construction loans (**$0.9 million** increase due to higher average balance and additional day effect)[16](index=16&type=chunk) - Net interest margin increased by **4 basis points** to **4.56%**, mainly reflecting a decrease in the cost of funds and a shift in asset mix towards higher-yielding investment securities and loan growth[17](index=17&type=chunk) [Non-Interest Income](index=4&type=section&id=Non-Interest%20Income) Non-interest income decreased in Q2 2025, primarily due to seasonal contingent insurance commissions recognized in the prior quarter and lower realized gains from purchased income tax credits Non-Interest Income (Quarter Ended) | Metric | June 30, 2025 ($ millions) | March 31, 2025 ($ millions) | December 31, 2024 ($ millions) | September 30, 2024 ($ millions) | June 30, 2024 ($ millions) | | :------------------------------------ | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Service charges and fees on deposit accounts | 9.756 | 9.640 | 9.748 | 9.684 | 9.725 | | Mortgage banking activities | 3.401 | 3.177 | 3.183 | 3.199 | 3.419 | | Insurance commission income | 2.538 | 5.805 | 2.274 | 3.003 | 2.786 | | Card and processing income | 11.880 | 11.475 | 12.155 | 11.768 | 11.523 | | Other non-interest income | 3.375 | 5.637 | 4.839 | 4.848 | 4.585 | | Total non-interest income | 30.950 | 35.734 | 32.199 | 32.502 | 32.038 | - Non-interest income decreased by **$4.8 million** to **$30.9 million** in Q2 2025[18](index=18&type=chunk) - The decrease was mainly due to **$3.3 million** in seasonal contingent insurance commissions recorded in Q1 2025 and a **$2.3 million** decrease from lower realized gains on purchased income tax credits[18](index=18&type=chunk) [Non-Interest Expenses](index=5&type=section&id=Non-Interest%20Expenses) Non-interest expenses saw a slight increase in Q2 2025, driven by higher credit and debit card processing expenses, partially offset by a decrease in employees' compensation and benefits Non-Interest Expenses (Quarter Ended) | Metric | June 30, 2025 ($ millions) | March 31, 2025 ($ millions) | December 31, 2024 ($ millions) | September 30, 2024 ($ millions) | June 30, 2024 ($ millions) | | :-------------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Employees' compensation and benefits | 60.058 | 62.137 | 59.652 | 59.081 | 57.456 | | Occupancy and equipment | 22.297 | 22.630 | 22.771 | 22.424 | 21.851 | | Business promotion | 3.495 | 3.278 | 5.328 | 4.116 | 4.359 | | Professional service fees | 11.609 | 11.486 | 11.810 | 12.538 | 12.431 | | Taxes, other than income taxes | 5.712 | 5.878 | 5.994 | 5.665 | 5.408 | | FDIC deposit insurance | 2.235 | 2.236 | 2.236 | 2.164 | 2.316 | | Net gain on OREO operations | (0.591) | (1.129) | (1.074) | (1.339) | (3.609) | | Credit and debit card processing expenses | 7.747 | 5.110 | 7.147 | 7.095 | 7.607 | | Communications | 2.208 | 2.245 | 2.251 | 2.170 | 2.261 | | Other non-interest expenses | 7.001 | 7.600 | 6.451 | 6.929 | 6.315 | | Total non-interest expenses | 123.337 | 123.022 | 124.533 | 122.935 | 118.682 | - Total non-interest expenses increased by **$0.3 million** to **$123.3 million** in Q2 2025[20](index=20&type=chunk) - The increase was mainly due to a **$2.6 million** rise in credit and debit card processing expenses, as Q1 2025 included **$2.2 million** in reimbursements[20](index=20&type=chunk) - This was partially offset by a **$2.1 million** decrease in employees' compensation and benefits, primarily due to lower bonuses and payroll taxes, despite an increase in salary compensation[24](index=24&type=chunk) [Income Taxes](index=5&type=section&id=Income%20Taxes) Income tax expense decreased in Q2 2025 due to a lower estimated annual effective tax rate and the release of a tax contingency accrual - Income tax expense was **$22.7 million** in Q2 2025, down from **$23.2 million** in Q1 2025[22](index=22&type=chunk) - The decrease was driven by a lower estimated annual effective tax rate (**22.8%** in Q2 2025 vs. **23.7%** in Q1 2025) and a **$0.5 million** tax contingency accrual release[22](index=22&type=chunk)[23](index=23&type=chunk) [Credit Quality](index=6&type=section&id=Credit%20Quality) This section provides an in-depth analysis of First BanCorp.'s credit quality, covering trends in non-performing assets, early delinquencies, allowance for credit losses, and net charge-offs [Non-Performing Assets](index=6&type=section&id=Non-Performing%20Assets) Total non-performing assets decreased in Q2 2025, primarily due to reductions in OREO and consumer loans, despite some new nonaccrual inflows Non-Performing Assets (Quarter Ended) | Metric | June 30, 2025 ($ millions) | March 31, 2025 ($ millions) | December 31, 2024 ($ millions) | September 30, 2024 ($ millions) | June 30, 2024 ($ millions) | | :------------------------------------ | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Total nonaccrual loans held for investment | 100.098 | 98.461 | 87.467 | 89.344 | 96.173 | | OREO | 14.449 | 15.880 | 17.306 | 19.330 | 21.682 | | Other repossessed property | 11.868 | 13.444 | 11.859 | 8.844 | 7.513 | | Other assets | 1.576 | 1.599 | 1.620 | 1.567 | 1.532 | | Total non-performing assets | 127.991 | 129.384 | 118.252 | 119.085 | 126.900 | | Past due loans 90 days and still accruing | 29.535 | 37.117 | 42.390 | 43.610 | 47.173 | | Nonaccrual loans held for investment to total loans held for investment | 0.78% | 0.78% | 0.69% | 0.72% | 0.78% | | Non-performing assets to total assets | 0.68% | 0.68% | 0.61% | 0.63% | 0.67% | - Total non-performing assets decreased by **$1.4 million** to **$128.0 million** as of June 30, 2025[28](index=28&type=chunk) - This decrease was mainly due to a **$3.0 million** reduction in OREO and other repossessed assets and a **$2.5 million** decrease in consumer loans and finance leases[28](index=28&type=chunk) - Inflows to nonaccrual loans held for investment decreased by **$9.0 million** to **$34.4 million** in Q2 2025[28](index=28&type=chunk) [Early Delinquency](index=7&type=section&id=Early%20Delinquency) Total loans in early delinquency slightly increased in Q2 2025, driven by consumer auto loans, partially offset by decreases in residential mortgage and commercial/construction loans - Total loans held for investment in early delinquency increased by **$2.8 million** to **$134.0 million** as of June 30, 2025[30](index=30&type=chunk) - Consumer loans in early delinquency increased by **$6.3 million** to **$104.8 million**, primarily due to a **$9.5 million** increase in auto loans[30](index=30&type=chunk) - Residential mortgage loans in early delinquency decreased by **$2.7 million**, and commercial and construction loans decreased by **$0.8 million**[30](index=30&type=chunk) [Allowance for Credit Losses](index=8&type=section&id=Allowance%20for%20Credit%20Losses) The Allowance for Credit Losses (ACL) for loans and finance leases increased slightly, driven by commercial and construction loan growth, while the provision for credit losses decreased due to improved macroeconomic forecasts and lower net charge-offs Allowance for Credit Losses Activity (Quarter Ended) | Metric | Q2 2025 ($ millions) | Q1 2025 ($ millions) | | :------------------------------------------------ | :------ | :------ | | ACL, beginning balance | 247.269 | 243.942 | | Provision for credit losses - expense (benefit) | 20.381 | 24.837 | | Net recoveries (charge-offs) | (19.072) | (21.510) | | ACL, end of period | 248.578 | 247.269 | | ACL on loans to amortized cost | 1.93% | 1.95% | - ACL for loans and finance leases increased by **$1.3 million** to **$248.6 million** as of June 30, 2025[32](index=32&type=chunk) - The increase was mainly in ACL for commercial and construction loans (**$2.7 million** increase) due to C&I loan growth, and residential mortgage loans (**$0.8 million** increase)[33](index=33&type=chunk) - Provision for credit losses on loans and finance leases decreased by **$4.4 million** to **$20.4 million** in Q2 2025, driven by improved macroeconomic forecasts and lower net charge-offs[34](index=34&type=chunk) - The ratio of ACL for loans and finance leases to total loans held for investment was **1.93%**, down from **1.95%**[36](index=36&type=chunk) [Net Charge-Offs](index=9&type=section&id=Net%20Charge-Offs) Net charge-offs decreased in Q2 2025, primarily due to a reduction in consumer loans and finance leases net charge-offs and C&I net recoveries Annualized Net Charge-Offs to Average Loans Ratio (Quarter Ended) | Loan Type | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Residential mortgage | -0.00% | 0.00% | 0.04% | -0.01% | 0.01% | | Construction | -0.02% | -0.02% | -0.17% | -0.02% | -0.02% | | Commercial mortgage | -0.01% | -0.01% | -0.01% | -0.01% | -0.07% | | C&I | -0.09% | -0.01% | 0.02% | 0.15% | -0.08% | | Consumer loans and finance leases | 2.12% | 2.31% | 2.59% | 2.46% | 2.38% | | Total loans | 0.60% | 0.68% | 0.78% | 0.78% | 0.69% | - Net charge-offs were **$19.1 million** in Q2 2025, or an annualized **0.60%** of average loans, down from **$21.4 million** (**0.68%**) in Q1 2025[39](index=39&type=chunk) - The **$2.3 million** reduction was driven by a **$1.7 million** decrease in consumer loans and finance leases net charge-offs and **$0.8 million** in C&I net recoveries[39](index=39&type=chunk) [Allowance for Credit Losses for Unfunded Loan Commitments](index=9&type=section&id=Allowance%20for%20Credit%20Losses%20for%20Unfunded%20Loan%20Commitments) The Allowance for Credit Losses (ACL) for off-balance sheet credit exposures increased in Q2 2025 - ACL for off-balance sheet credit exposures increased to **$3.4 million** as of June 30, 2025, from **$3.1 million** as of March 31, 2025[40](index=40&type=chunk) [Allowance for Credit Losses for Debt Securities](index=9&type=section&id=Allowance%20for%20Credit%20Losses%20for%20Debt%20Securities) The Allowance for Credit Losses (ACL) for debt securities slightly decreased in Q2 2025 - ACL for debt securities was **$1.3 million** as of June 30, 2025, down from **$1.4 million** as of March 31, 2025[41](index=41&type=chunk) [Statement of Financial Condition](index=10&type=section&id=Statement%20of%20Financial%20Condition) An overview of First BanCorp.'s financial position as of Q2 2025, detailing changes in assets, liabilities, stockholders' equity, liquidity, and non-GAAP tangible common equity [Assets](index=10&type=section&id=Assets) Total assets decreased in Q2 2025, primarily due to a significant reduction in cash and cash equivalents, partially offset by increases in investment securities and total loans - Total assets were approximately **$18.9 billion** as of June 30, 2025, a decrease of **$209.5 million** from March 31, 2025[42](index=42&type=chunk) - Cash and cash equivalents decreased by **$591.6 million**, mainly due to overall deposit decreases, loan growth, and net cash outflow for investment securities purchases[47](index=47&type=chunk) - Investment securities increased by **$178.9 million**, driven by purchases of higher-yielding U.S. agencies' residential MBS and U.S. Treasury securities, and a **$41.2 million** increase in fair value of available-for-sale debt securities[47](index=47&type=chunk) - Total loans increased by **$189.7 million**, with commercial and construction loans rising by **$167.8 million**, residential mortgage loans by **$16.5 million**, and consumer loans by **$5.4 million**[47](index=47&type=chunk) - Total loan originations increased by **$231.5 million** to **$1.3 billion** in Q2 2025, with significant growth in commercial and construction loans in Puerto Rico and residential mortgage/commercial loans in Florida[43](index=43&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk) [Liabilities and Stockholders' Equity](index=11&type=section&id=Liabilities%20and%20Stockholders%27%20Equity) Total liabilities decreased in Q2 2025, primarily due to a reduction in total deposits and borrowings. Stockholders' equity increased, driven by net income and fair value adjustments to debt securities - Total liabilities decreased by **$275.6 million** to approximately **$17.1 billion** as of June 30, 2025[49](index=49&type=chunk) - Total deposits decreased by **$268.5 million**, including a **$240.9 million** decrease in core deposits (mainly non-interest-bearing deposits in Puerto Rico) and a **$71.7 million** decrease in government deposits[52](index=52&type=chunk) - Brokered CDs increased by **$44.1 million** due to new issuances[52](index=52&type=chunk) - Other borrowings decreased by **$11.1 million** due to the redemption of junior subordinated debentures[52](index=52&type=chunk) - Total stockholders' equity increased by **$66.1 million** to **$1.8 billion**, driven by net income and a **$41.2 million** increase in the fair value of available-for-sale debt securities, partially offset by dividends and share repurchases[49](index=49&type=chunk) - Corporation's estimated CET1 capital, Tier 1 capital, total capital, and leverage ratios were **16.61%**, **16.61%**, **17.87%**, and **11.41%**, respectively, exceeding regulatory levels[50](index=50&type=chunk) [Liquidity Position](index=12&type=section&id=Liquidity%20Position) The Corporation's core liquidity decreased, but it maintains significant available funding capacity from various sources, providing robust overall liquidity - Cash and cash equivalents amounted to **$736.7 million**, down from **$1.3 billion**[53](index=53&type=chunk) - Total core liquidity (cash and free high-quality liquid securities) amounted to **$2.3 billion**, or **12.17%** of total assets, down from **$2.7 billion** (**14.25%**) in Q1 2025[53](index=53&type=chunk) - Available lending capacity at the FHLB was **$1.0 billion**, and borrowing capacity at the FED Discount Window Program was approximately **$2.7 billion**[53](index=53&type=chunk)[54](index=54&type=chunk) - Aggregate available liquidity to meet needs was **$6.0 billion**, representing **133%** of estimated uninsured deposits (excluding fully collateralized government deposits)[54](index=54&type=chunk) - Estimated uninsured deposits (excluding fully collateralized government deposits) were **$4.5 billion**, or **28.10%** of total deposits, down from **$4.6 billion** (**28.44%**) in Q1 2025[55](index=55&type=chunk) [Tangible Common Equity (Non-GAAP)](index=12&type=section&id=Tangible%20Common%20Equity%20%28Non-GAAP%29) The Corporation's tangible common equity ratio improved in Q2 2025, reflecting a decrease in tangible assets and positive financial performance Tangible Common Equity Reconciliation (Quarter Ended) | Metric | June 30, 2025 ($ millions) | March 31, 2025 ($ millions) | December 31, 2024 ($ millions) | September 30, 2024 ($ millions) | June 30, 2024 ($ millions) | | :------------------------------------ | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Total common equity - GAAP | 1845.455 | 1779.342 | 1669.236 | 1700.885 | 1491.460 | | Goodwill | (38.611) | (38.611) | (38.611) | (38.611) | (38.611) | | Other intangible assets | (4.535) | (5.715) | (6.967) | (8.260) | (9.700) | | Tangible common equity - non-GAAP | 1802.309 | 1735.016 | 1623.658 | 1654.014 | 1443.149 | | Total assets - GAAP | 18897.529 | 19106.983 | 19292.921 | 18859.170 | 18881.374 | | Tangible assets - non-GAAP | 18854.383 | 19062.657 | 19247.343 | 18812.299 | 18833.063 | | Tangible common equity ratio - non-GAAP | 9.56% | 9.10% | 8.44% | 8.79% | 7.66% | | Tangible book value per common share - non-GAAP | 11.16 | 10.64 | 9.91 | 10.09 | 8.81 | - The tangible common equity ratio (non-GAAP) increased to **9.56%** as of June 30, 2025, from **9.10%** as of March 31, 2025[56](index=56&type=chunk) - This improvement was driven by a decrease in tangible assets, quarterly earnings less dividends and repurchases, and a **$41.2 million** increase in the fair value of available-for-sale debt securities[56](index=56&type=chunk) [Exposure to Puerto Rico Government](index=13&type=section&id=Exposure%20to%20Puerto%20Rico%20Government) This section details First BanCorp.'s direct and indirect financial exposure to the Puerto Rico government, including municipal loans, obligations, and public sector deposits [Direct Exposure](index=13&type=section&id=Direct%20Exposure) Direct exposure to the Puerto Rico government remained stable in Q2 2025, primarily consisting of municipal loans and obligations, with a smaller portion in public corporations and a residential pass-through MBS - Direct exposure to the Puerto Rico government was **$286.9 million** as of June 30, 2025, a slight decrease from **$288.1 million** as of March 31, 2025[59](index=59&type=chunk) - Approximately **$196.2 million** consisted of loans and obligations of municipalities supported by assigned property tax revenues[59](index=59&type=chunk) - **$50.3 million** consisted of loans and obligations supported by specific municipal revenues[59](index=59&type=chunk) - The exposure also included **$8.7 million** in a loan to a Puerto Rico Electric Power Authority affiliate and **$28.9 million** in loans to public corporations[59](index=59&type=chunk) [Indirect Exposure](index=13&type=section&id=Indirect%20Exposure) Indirect exposure to the Puerto Rico public sector remained consistent, primarily through public sector deposits and unfunded loan commitments for low-income housing projects - Public sector deposits in Puerto Rico amounted to **$2.9 billion** as of June 30, 2025, consistent with March 31, 2025[61](index=61&type=chunk) - Approximately **21%** of public sector deposits were from municipalities and municipal agencies, and **79%** from public corporations, central government, and U.S. federal agencies[61](index=61&type=chunk) - Outstanding balance of construction loans funded through conduit financing for Low-Income Housing Tax Credit (LIHTC) programs was **$69.7 million**, with **$83.2 million** in unfunded loan commitments[62](index=62&type=chunk) [Non-GAAP Disclosures and Reconciliations](index=14&type=section&id=Non-GAAP%20Disclosures%20and%20Reconciliations) This section provides reconciliations and explanations for First BanCorp.'s non-GAAP financial measures, offering additional insights into core operating performance and capital adequacy [Overview of Non-GAAP Measures](index=14&type=section&id=Overview%20of%20Non-GAAP%20Measures) First BanCorp. uses non-GAAP financial measures to provide additional insights into its core operating performance and capital adequacy, believing these measures enhance analysis for investors and analysts - Non-GAAP financial measures are used to enhance the ability of analysts and investors to analyze trends and understand performance, particularly by excluding items not reflective of core operating performance (Special Items)[64](index=64&type=chunk)[65](index=65&type=chunk) - Examples of non-GAAP measures include adjusted net income, adjusted earnings per share, adjusted pre-tax, pre-provision income, tangible common equity, tangible book value per common share, and adjusted net interest income/margin[65](index=65&type=chunk) [Special Items](index=14&type=section&id=Special%20Items) The financial results for Q2 2024 and the six-month period ended June 30, 2024, included a special assessment expense from the FDIC related to losses in the Deposit Insurance Fund - A **$0.2 million** charge (**$0.1 million** after-tax) was recorded in Q2 2024, and **$1.1 million** (**$0.7 million** after-tax) for the six-month period ended June 30, 2024, for the FDIC special assessment expense[66](index=66&type=chunk) - This assessment was imposed by the FDIC due to losses in the Deposit Insurance Fund following certain financial institution failures in H1 2023[66](index=66&type=chunk) [Adjusted Pre-Tax, Pre-Provision Income](index=15&type=section&id=Adjusted%20Pre-Tax%2C%20Pre-Provision%20Income) Adjusted pre-tax, pre-provision income, a non-GAAP metric, showed a slight decrease quarter-over-quarter but a significant increase year-to-date, reflecting underlying operational performance trends - Adjusted pre-tax, pre-provision income is defined as income before income taxes, adjusted to exclude provisions for credit losses and certain Special Items[67](index=67&type=chunk) Adjusted Pre-Tax, Pre-Provision Income Reconciliation ($ millions) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :------------------------------------ | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Income before income taxes | 102.885 | 100.299 | 96.029 | 96.386 | 101.379 | | Add: Provision for credit losses expense | 20.587 | 24.810 | 20.904 | 15.245 | 11.605 | | Add: FDIC special assessment expense | - | - | - | - | 0.152 | | Adjusted pre-tax, pre-provision income | 123.472 | 125.109 | 116.933 | 111.631 | 113.136 | | Change from prior period (amount) | (1.637) | 8.176 | 5.302 | (1.505) | 2.609 | | Change from prior period (percentage) | -1.3% | 7.0% | 4.7% | -1.3% | 2.4% | - Adjusted pre-tax, pre-provision income for the six-month period ended June 30, 2025, was **$248.6 million**, an **11.1%** increase from **$223.7 million** in the same period of 2024[72](index=72&type=chunk) [Tangible Common Equity Ratio and Tangible Book Value per Common Share](index=15&type=section&id=Tangible%20Common%20Equity%20Ratio%20and%20Tangible%20Book%20Value%20per%20Common%20Share) These non-GAAP measures are used to assess capital adequacy, showing an improvement in Q2 2025, reflecting a stronger capital position relative to tangible assets - Tangible common equity is total common equity less goodwill and other intangible assets; tangible assets are total assets less goodwill and other intangible assets[68](index=68&type=chunk) - Tangible common equity ratio increased to **9.56%** as of June 30, 2025, from **9.10%** as of March 31, 2025[56](index=56&type=chunk)[57](index=57&type=chunk) - Tangible book value per common share increased to **$11.16** as of June 30, 2025, from **$10.64** as of March 31, 2025[57](index=57&type=chunk) [Net Interest Income Excluding Valuations, and on a Tax-Equivalent Basis](index=15&type=section&id=Net%20Interest%20Income%20Excluding%20Valuations%2C%20and%20on%20a%20Tax-Equivalent%20Basis) The Corporation presents net interest income, interest rate spread, and net interest margin on a tax-equivalent basis and excluding derivative valuations to provide a more comparable view of performance within the banking industry - These adjustments facilitate comparability and analysis by recognizing income tax savings on tax-exempt assets and removing the effect of derivative fair value changes[69](index=69&type=chunk) - Net interest margin on a tax-equivalent basis and excluding valuations was **4.71%** in Q2 2025, up from **4.65%** in Q1 2025[85](index=85&type=chunk) [Net Income and Reconciliation to Adjusted Net Income (Non-GAAP)](index=16&type=section&id=Net%20Income%20and%20Reconciliation%20to%20Adjusted%20Net%20Income%20%28Non-GAAP%29) Adjusted net income, a non-GAAP measure, aligns closely with GAAP net income for Q2 2025 and Q1 2025, as there were no significant special items impacting these periods Net Income Reconciliation to Adjusted Net Income ($ millions) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | YTD June 30, 2025 | YTD June 30, 2024 | | :------------------------------------------ | :------------ | :------------- | :------------ | :---------------- | :---------------- | | Net income, as reported (GAAP) | 80.180 | 77.059 | 75.838 | 157.239 | 149.296 | | Adjustments: FDIC special assessment expense | - | - | 0.152 | - | 1.099 | | Income tax impact of adjustments | - | - | (0.057) | - | (0.412) | | Adjusted net income (non-GAAP) | 80.180 | 77.059 | 75.933 | 157.239 | 149.983 | | Earnings per share - diluted (GAAP) | 0.50 | 0.47 | 0.46 | 0.97 | 0.90 | | Adjusted earnings per share - diluted (non-GAAP) | 0.50 | 0.47 | 0.46 | 0.97 | 0.90 | - For Q2 2025 and Q1 2025, GAAP net income and adjusted net income were identical, as no special items were reported for these periods[71](index=71&type=chunk) [Additional Information](index=16&type=section&id=Additional%20Information) This section provides supplementary information including conference call details, a safe harbor statement, company overview, and investor contact information [Conference Call / Webcast Information](index=16&type=section&id=Conference%20Call%20%2F%20Webcast%20Information) First BanCorp. hosted an earnings conference call and live webcast on July 22, 2025, with replay options available for investors - An earnings conference call and live webcast were held on Tuesday, July 22, 2025, at **10:00 a.m.** (Eastern Time)[73](index=73&type=chunk) - Replays of the webcast and telephone conference are available until July 22, 2026, and August 21, 2025, respectively[73](index=73&type=chunk) [Safe Harbor Statement](index=17&type=section&id=Safe%20Harbor%20Statement) The press release contains forward-looking statements subject to various risks and uncertainties, and readers are cautioned not to place undue reliance on them. The Corporation disclaims any obligation to update these statements - The press release includes forward-looking statements regarding future economic, operational, and financial performance, identified by words like 'expect,' 'anticipate,' and 'intend'[74](index=74&type=chunk) - Readers are cautioned not to place undue reliance on these statements, which are subject to various risks and uncertainties, including changes in interest rates, economic conditions, regulatory policies, and cybersecurity incidents[74](index=74&type=chunk) - The Corporation disclaims any obligation to update forward-looking statements, except as required by federal securities laws[74](index=74&type=chunk) [About First BanCorp.](index=18&type=section&id=About%20First%20BanCorp.) First BanCorp. is the parent company of FirstBank Puerto Rico, a commercial bank operating in Puerto Rico, the U.S. and British Virgin Islands, and Florida - First BanCorp. is the parent corporation of FirstBank Puerto Rico, which operates in Puerto Rico, the U.S. and British Virgin Islands, and Florida[76](index=76&type=chunk) - Its common stock trades on the New York Stock Exchange under the symbol FBP[76](index=76&type=chunk) [Contact Information](index=18&type=section&id=Contact%20Information) Contact details for investor relations are provided for inquiries regarding First BanCorp.'s financial performance - Ramon Rodriguez, Senior Vice President of Corporate Strategy and Investor Relations, is the contact for First BanCorp. inquiries[77](index=77&type=chunk) [Exhibit A - Financial Tables](index=19&type=section&id=Exhibit%20A%20-%20Financial%20Tables) Exhibit A provides detailed condensed consolidated financial statements and supplementary data, including statements of financial condition, income, selected financial ratios, net interest income reconciliations, average interest-earning assets and liabilities, loan portfolio breakdowns by geography, non-performing assets by geography, allowance for credit losses, annualized net charge-offs, and deposits ```

Core Insights - The article emphasizes the importance of the Zacks Rank system and Style Scores in identifying strong stocks, particularly for value investors [1][2] Company Analysis - First BanCorp. (FBP) has a Zacks Rank of 2 (Buy) and an A for Value, with a current P/E ratio of 10.79, lower than the industry average of 11.42 [3] - FBP's Forward P/E has fluctuated between 8.83 and 12.46 over the past year, with a median of 10.60 [3] - FBP's P/CF ratio is 10.97, significantly lower than the industry's average of 17.07, indicating potential undervaluation [4] - Regions Financial (RF) also holds a Zacks Rank of 2 (Buy) and a Value Score of A, trading at a forward earnings multiple of 10.44, below the industry average of 11.42 [5] - RF's PEG ratio is 1.86, compared to the industry's average of 1.35, suggesting it may be undervalued [5] - Over the past year, RF's P/E ratio has ranged from 8.06 to 12.14, with a median of 10.44, while its PEG ratio has varied between 1.51 and 2.83 [6] - RF's P/B ratio stands at 1.32, lower than the industry's average of 1.93, further indicating potential undervaluation [6] - Both FBP and RF are highlighted as strong value stocks due to their attractive earnings outlook and valuation metrics [7]

Group 1 - First Bancorp (FBP) is a notable stock in the Finance sector, currently outperforming its peers with a year-to-date performance of approximately 15.6% compared to the sector average of 7.5% [4] - FBP holds a Zacks Rank of 2 (Buy), indicating a positive outlook based on earnings estimates and revisions, with a 5.6% increase in the consensus estimate for full-year earnings over the past three months [3] - The company is part of the Banks - Southeast industry, which includes 54 companies and is currently ranked 61 in the Zacks Industry Rank, with this industry gaining an average of 2.3% year-to-date [5] Group 2 - Banco Comercial Portugues S.A. Unsponsored ADR (BPCGY) is another Finance stock that has outperformed the sector, with a year-to-date increase of 45.3% [4] - BPCGY has a Zacks Rank of 2 (Buy) and has seen a 14% increase in its consensus EPS estimate for the current year [5] - The Banks - Foreign industry, which includes BPCGY, has 67 stocks and is ranked 14, with an industry performance of +25.1% since the beginning of the year [6]

Company Overview - First BanCorp is a Puerto Rico-based holding company that operates FirstBank Puerto Rico [1] - The company has a concentrated presence in the Puerto Rico market, with approximately 80% of its loans originating from this geography [1] Investment Focus - The company is characterized as a value-focused investment entity, conducting fundamental research across various sectors including chemicals, homebuilders, building materials, industrials, and metals & mining [1] - The investment strategy emphasizes acquiring stocks that are undervalued and have potential catalysts in the near future [1] - The investment horizon for the company ranges from one quarter to two years [1] Experience and Expertise - The company has over three years of active investing experience and has served as a buy-side analyst at a boutique research firm and family offices [1]

Core Viewpoint - First Bancorp (FBP) is positioned well to potentially beat earnings estimates in its upcoming quarterly report, supported by a solid history of exceeding expectations [1]. Earnings Performance - First Bancorp has a track record of surpassing earnings estimates, with an average surprise of 10.75% over the last two quarters [2]. - In the most recent quarter, the company reported earnings of $0.43 per share against an expectation of $0.47, resulting in a surprise of 9.30%. In the previous quarter, it reported $0.46 per share compared to a consensus estimate of $0.41, achieving a surprise of 12.20% [3]. Earnings Estimates and Predictions - Recent estimates for First Bancorp have been trending upward, with a positive Zacks Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of an earnings beat [6]. - The current Earnings ESP for First Bancorp is +3.60%, suggesting that analysts have recently become more optimistic about the company's earnings prospects [9]. Zacks Rank and Success Rate - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests that First Bancorp has a high probability of beating consensus estimates, with historical data indicating that nearly 70% of stocks with this combination achieve positive surprises [7][9].

Company Overview - First Bancorp (FBP) is headquartered in San Juan and operates in the Finance sector [3] - The stock has experienced a price change of 12.69% since the beginning of the year [3] Dividend Information - First Bancorp currently pays a dividend of $0.18 per share, resulting in a dividend yield of 3.44% [3] - The yield of the Banks - Southeast industry is 2.35%, while the S&P 500's yield is 1.52% [3] - The company's annualized dividend of $0.72 has increased by 12.5% from the previous year [4] - Over the past five years, First Bancorp has raised its dividend five times, averaging an annual increase of 31.93% [4] - The current payout ratio is 39%, indicating that 39% of its trailing 12-month EPS is paid out as dividends [4] Earnings Growth Expectations - For the fiscal year, First Bancorp anticipates solid earnings growth, with the Zacks Consensus Estimate for 2025 at $1.93 per share, reflecting a year-over-year growth rate of 6.63% [5] Investment Appeal - First Bancorp is viewed as an attractive dividend play and a compelling investment opportunity, holding a Zacks Rank of 1 (Strong Buy) [7]

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents First Bancorp's unaudited consolidated financial statements as of March 31, 2025, and for the quarter then ended, along with explanatory notes Consolidated Statement of Financial Condition Highlights (As of March 31, 2025 vs. December 31, 2024) | Account | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **$19,106,983** | **$19,292,921** | **($185,938)** | | Total Loans, net | $12,428,129 | $12,502,614 | ($74,485) | | Total Investment Securities | $4,669,661 | $4,934,304 | ($264,643) | | **Total Liabilities** | **$17,327,641** | **$17,623,685** | **($296,044)** | | Total Deposits | $16,822,529 | $16,871,298 | ($48,769) | | Long-term borrowings | $331,143 | $561,700 | ($230,557) | | **Total Stockholders' Equity** | **$1,779,342** | **$1,669,236** | **$110,106** | Consolidated Statement of Income Highlights (Quarter Ended March 31, 2025 vs. 2024) | Account | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $212,397 | $196,520 | $15,877 | | Provision for Credit Losses | $24,810 | $12,167 | $12,643 | | Non-interest Income | $35,734 | $33,983 | $1,751 | | Non-interest Expenses | $123,022 | $120,923 | $2,099 | | **Net Income** | **$77,059** | **$73,458** | **$3,601** | | **Diluted EPS** | **$0.47** | **$0.44** | **$0.03** | [Note 2 – Debt Securities](index=12&type=section&id=Note%202%20%E2%80%93%20Debt%20Securities) The debt securities portfolio, comprising AFS and HTM securities, showed a **$475.5 million** net unrealized loss on AFS securities as of March 31, 2025, primarily due to interest rate changes Debt Securities Portfolio Summary (As of March 31, 2025) | Security Type | Amortized Cost (in thousands) | Fair Value (in thousands) | Net Unrealized Loss (in thousands) | | :--- | :--- | :--- | :--- | | **Available-for-Sale (AFS)** | **$4,788,924** | **$4,312,884** | **($475,524)** | | U.S. Gov't & GSEs | $1,738,032 | $1,679,582 | ($58,110) | | Mortgage-backed securities (MBS) | $3,049,892 | $2,632,302 | ($417,414) | | **Held-to-Maturity (HTM)** | **$312,807** | **$305,501** | **($7,306)** | | Puerto Rico municipal bonds | $92,522 | $96,008 | $3,486 (Gain) | | MBS | $220,285 | $209,493 | ($10,792) | - The Corporation expects no credit losses on its U.S. government and agency debt securities, attributing unrealized losses to interest rate changes, not credit quality. The company does not intend to sell these securities before recovery[44](index=44&type=chunk) - The Allowance for Credit Losses (ACL) for AFS securities was **$0.52 million**, primarily for a Puerto Rico government obligation and private label MBS. The ACL for HTM securities was **$0.84 million**, entirely for Puerto Rico municipal bonds[47](index=47&type=chunk)[54](index=54&type=chunk) [Note 3 – Loans Held for Investment](index=20&type=section&id=Note%203%20%E2%80%93%20Loans%20Held%20for%20Investment) Total loans held for investment were **$12.68 billion** as of March 31, 2025, with nonaccrual loans increasing to **$98.5 million**, mainly due to a Florida commercial mortgage loan Loan Portfolio Composition (As of March 31, 2025) | Loan Category | Puerto Rico & VI Region (in thousands) | Florida Region (in thousands) | Total (in thousands) | | :--- | :--- | :--- | :--- | | Residential mortgage | $2,334,653 | $503,193 | $2,837,846 | | Construction | $193,791 | $40,650 | $234,441 | | Commercial mortgage | $1,781,402 | $720,287 | $2,501,689 | | Commercial & Industrial (C&I) | $2,289,278 | $1,070,590 | $3,359,868 | | Consumer | $3,736,076 | $5,478 | $3,741,554 | | **Total Loans** | **$10,335,200** | **$2,340,198** | **$12,675,398** | Loan Delinquency Status (As of March 31, 2025) | Status | Amount (in thousands) | | :--- | :--- | | Current | $12,408,673 | | 30-89 Days Past Due | $131,216 | | 90+ Days Past Due & Accruing | $37,048 | | **Nonaccrual** | **$98,461** | - Nonaccrual loans in the Florida region increased significantly to **$21.4 million** as of March 31, 2025, from **$8.6 million** at year-end 2024, primarily due to a **$12.5 million** commercial mortgage loan being placed on nonaccrual status[66](index=66&type=chunk)[71](index=71&type=chunk) [Note 4 – Allowance for Credit Losses (ACL)](index=38&type=section&id=Note%204%20%E2%80%93%20Allowance%20for%20Credit%20Losses%20for%20Loans%20and%20Finance%20Leases) The Allowance for Credit Losses (ACL) for loans and finance leases increased to **$247.3 million** as of March 31, 2025, driven by qualitative adjustments for economic uncertainty ACL Roll-Forward (Quarter Ended March 31, 2025) | Description | Amount (in thousands) | | :--- | :--- | | Beginning Balance (Dec 31, 2024) | $243,942 | | Provision for Credit Losses | $24,837 | | Charge-offs | ($28,210) | | Recoveries | $6,700 | | **Ending Balance (Mar 31, 2025)** | **$247,269** | - The ACL as a percentage of total loans held for investment increased to **1.95%** at Q1 2025 from **1.91%** at Q4 2024[116](index=116&type=chunk) - Net charge-offs for Q1 2025 were **$21.4 million**, compared to **$11.2 million** for Q1 2024. The increase was partly due to lower recoveries from bulk sales of charged-off consumer loans (**$2.4 million** in Q1 2025 vs. **$9.5 million** in Q1 2024)[115](index=115&type=chunk) [Note 11 – Stockholders' Equity](index=51&type=section&id=Note%2011%20%E2%80%93%20Stockholders%27%20Equity) Stockholders' equity increased to **$1.78 billion** at March 31, 2025, following **$21.8 million** in stock repurchases and **$50.6 million** in debenture redemptions - The Board approved a **$250 million** repurchase program on July 22, 2024. In Q1 2025, the company executed **$21.8 million** in common stock repurchases and **$50.6 million** in redemption of junior subordinated debentures[148](index=148&type=chunk) - As of May 5, 2025, the Corporation had approximately **$100.0 million** remaining under its repurchase authorization[149](index=149&type=chunk) - A quarterly cash dividend of **$0.18** per common share was declared for Q1 2025, an increase from **$0.16** per share in Q1 2024[152](index=152&type=chunk) [Note 19 – Regulatory Matters, Commitments and Contingencies](index=64&type=section&id=Note%2019%20%E2%80%93%20Regulatory%20Matters%2C%20Commitments%20and%20Contingencies) The Corporation and FirstBank exceeded all minimum regulatory capital requirements as of March 31, 2025, with **$2.1 billion** in off-balance sheet commitments and a **$7.4 million** FDIC special assessment First BanCorp. Regulatory Capital Ratios (As of March 31, 2025) | Ratio | Actual | Minimum for Capital Adequacy | | :--- | :--- | :--- | | CET1 Capital Ratio | 16.62% | 4.5% | | Tier I Capital Ratio | 16.62% | 6.0% | | Total Capital Ratio | 17.96% | 8.0% | | Leverage Ratio | 11.20% | 4.0% | - Commitments to extend credit totaled approximately **$2.1 billion** as of March 31, 2025, including **$0.8 billion** in retail credit card lines[197](index=197&type=chunk) - The Corporation's total estimated FDIC special assessment related to the 2023 bank failures is **$7.4 million**, with **$4.2 million** remaining to be paid[202](index=202&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=67&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial results, including **$77.1 million** net income, a **36 bps** net interest margin expansion to **4.52%**, and comprehensive risk management strategies [Executive Summary](index=67&type=section&id=Executive%20Summary) The Corporation reported **$77 million** net income and **1.64%** return on average assets for Q1 2025, driven by margin expansion, core deposit growth, and **$102.0 million** in capital deployment - Reported net income of **$77 million** and return on average assets of **1.64%** for Q1 2025[209](index=209&type=chunk) - Core customer deposits increased by **$29 million**, including a **$70 million** rise in non-interest-bearing deposits[209](index=209&type=chunk) - Capital deployment in Q1 2025 totaled approximately **$102.0 million**, including redemption of TruPS, common stock dividends, and share repurchases[212](index=212&type=chunk) [Results of Operations](index=68&type=section&id=Results%20of%20Operations) Net income for Q1 2025 was **$77.1 million**, primarily due to a **$15.9 million** increase in net interest income and a **36 bps** net interest margin expansion to **4.52%** Key Performance Indicators (Q1 2025 vs. Q1 2024) | Indicator | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Return on Average Assets | 1.64% | 1.56% | | Return on Average Common Equity | 17.90% | 19.56% | | Efficiency Ratio | 49.58% | 52.46% | - Net interest income increased by **$15.9 million** YoY to **$212.4 million**, and net interest margin expanded **36 bps** to **4.52%**, driven by a favorable change in asset mix and lower funding costs[221](index=221&type=chunk) - The provision for credit losses increased to **$24.8 million**, impacted by lower recoveries from bulk loan sales and a **$2.7 million** increase in qualitative adjustments for economic uncertainty[221](index=221&type=chunk) [Financial Condition](index=78&type=section&id=Financial%20Condition) Total assets decreased by **$185.9 million** to **$19.1 billion** at March 31, 2025, with a slight decrease in the loan portfolio and a **$252.4 million** reduction in AFS securities - Total assets stood at **$19.1 billion** as of March 31, 2025, a decrease of **$185.9 million** from year-end 2024[251](index=251&type=chunk) - The total loan portfolio was **$12.7 billion**, down **$71.7 million** from year-end, with a decrease in commercial loans in Puerto Rico partially offset by growth in Florida and the Virgin Islands[253](index=253&type=chunk) - The available-for-sale debt portfolio is expected to generate approximately **$1.5 billion** in cash inflows over the next twelve months, which will be redeployed into higher-yielding assets or used to repay maturing brokered CDs[262](index=262&type=chunk) [Risk Management](index=83&type=section&id=Risk%20Management) The Corporation maintains a comprehensive risk management framework, with **$6.2 billion** in available liquidity, a **16.62%** CET1 ratio, and an increase in non-performing assets to **$129.4 million** - As of March 31, 2025, the Corporation had **$6.2 billion** in available liquidity sources, equivalent to **133%** of estimated uninsured deposits (excluding fully collateralized government deposits)[277](index=277&type=chunk) - The tangible common equity ratio improved to **9.10%** as of March 31, 2025, from **8.44%** at year-end 2024[315](index=315&type=chunk) - Non-performing assets increased by **$11.1 million** to **$129.4 million**, mainly due to a **$12.6 million** commercial mortgage loan in Florida moving to nonaccrual status[358](index=358&type=chunk) - Direct exposure to the Puerto Rico government, its municipalities, and public corporations was **$288.1 million** as of March 31, 2025[384](index=384&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=109&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the market risk disclosures within the Management's Discussion and Analysis section of the report - The report directs readers to the Risk Management section of the MD&A for detailed information on market risk[393](index=393&type=chunk) [Controls and Procedures](index=109&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were effective as of the end of the reporting period, March 31, 2025[394](index=394&type=chunk) - No material changes to internal control over financial reporting occurred during the first quarter of 2025[395](index=395&type=chunk) [PART II. OTHER INFORMATION](index=110&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=110&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 19 of the financial statements for a discussion of legal proceedings, which are not expected to have a material adverse effect - For details on legal proceedings, the report refers to Note 19 of the consolidated financial statements[397](index=397&type=chunk) [Risk Factors](index=110&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the 2024 Annual Report on Form 10-K - There have been no material changes to the risk factors disclosed in the 2024 Annual Report on Form 10-K[399](index=399&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=111&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2025, the Corporation repurchased **1.38 million** shares of common stock for **$21.8 million**, with **$127.7 million** remaining under the repurchase program Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Program | Remaining Authorization (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Jan 2025 | 327 | $18.16 | - | $200,000 | | Feb 2025 | - | - | - | $200,000 | | Mar 2025 | 1,376,489 | $18.27 | 1,194,567 | $127,692 | | **Total** | **1,376,816** | **-** | **1,194,567** | **-** | - The total shares purchased include **182,249** shares withheld to cover tax obligations upon the vesting of equity-based awards for employees[404](index=404&type=chunk)

Core Viewpoint - First Bancorp (FBP) has received an upgrade to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on a company's changing earnings picture, with the Zacks Consensus Estimate tracking EPS estimates from sell-side analysts [1][2]. - Changes in future earnings potential, reflected in earnings estimate revisions, are strongly correlated with near-term stock price movements, particularly influenced by institutional investors [4][6]. - Rising earnings estimates and the subsequent rating upgrade for First Bancorp indicate an improvement in the company's underlying business, suggesting potential upward pressure on the stock price [5][10]. Earnings Estimate Revisions for First Bancorp - For the fiscal year ending December 2025, First Bancorp is expected to earn $1.93 per share, reflecting a 6.6% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for First Bancorp has increased by 4.1%, indicating positive sentiment among analysts [8]. Zacks Rank System Overview - The Zacks Rank stock-rating system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7][9]. - Only the top 5% of Zacks-covered stocks receive a 'Strong Buy' rating, indicating superior earnings estimate revision features and potential for market-beating returns [9][10].

Company Overview - First Bancorp (FBP) is headquartered in San Juan and operates in the Finance sector [3] - The stock has experienced a price change of 6.62% since the beginning of the year [3] Dividend Information - First Bancorp currently pays a dividend of $0.18 per share, resulting in a dividend yield of 3.63% [3] - The company's annualized dividend of $0.72 has increased by 12.5% from the previous year [4] - Over the past five years, First Bancorp has raised its dividend five times, averaging an annual increase of 31.93% [4] - The current payout ratio is 39%, indicating that 39% of its trailing 12-month EPS is distributed as dividends [4] Earnings Growth Expectations - For the fiscal year, First Bancorp anticipates solid earnings growth, with the Zacks Consensus Estimate for 2025 at $1.88 per share, reflecting a year-over-year growth rate of 3.87% [5] Industry Context - The Banks - Southeast industry's average dividend yield is 2.38%, while the S&P 500's yield is 1.62%, positioning First Bancorp as an attractive dividend option [3] - High-growth firms or tech start-ups typically do not offer dividends, making established companies like First Bancorp more appealing for income investors [7] Investment Outlook - First Bancorp is viewed as a compelling investment opportunity, holding a Zacks Rank of 2 (Buy) [7]