Core Insights - First BanCorp. reported a net income of $77 million ($0.47 per share) for Q1 2025, a slight increase from $76 million ($0.46 per share) in Q4 2024, indicating stable profitability [2][9] - The company experienced a net interest margin (NIM) expansion of 19 basis points to 4.52% in Q1 2025, driven by lower funding costs and improved yields on cash and investments [2][11] - Management maintained a mid-single-digit loan growth guidance for 2025, with expectations for growth to materialize in the second half of the year [3][4] Financial Performance - Net interest income increased by $3 million to $212 million in Q1 2025, benefiting from lower funding costs and improved yields [4][10] - The efficiency ratio improved to 49.6% from 51.6% in Q4 2024, reflecting better operational efficiency [2][12] - Total loans were slightly down, with originations reaching $1.2 billion in Q1 2025 [2][7] Capital Management - The company redeemed approximately $50 million in subordinated debentures, declared $29.6 million in dividends, and repurchased $22 million in common stock during Q1 2025 [2][9] - Tangible book value increased by 7% to $10.64 per share in Q1 2025, indicating a strengthening balance sheet [2][12] Credit Quality - Credit quality metrics remained stable, with early delinquencies decreasing by $21.8 million during Q1 2025 [4][12] - The allowance for credit losses increased by $3.4 million to $247.3 million, reflecting adjustments for projected economic uncertainties [12][30] Digital Transformation - The company advanced its digital transformation efforts by converting to a centralized FIS cloud for its core systems in Q1 2025 [5][8]

Financial Data and Key Metrics Changes - The company reported a net income of $77 million, or $0.47 per share, compared to $76 million, or $0.46 per share, in the previous quarter, reflecting a solid return on average assets of 1.64% [13][14] - Net interest income for the quarter was $212 million, an increase of $3 million from the prior quarter, with a net interest margin expanding by 19 basis points to 4.52% [14][17] - The efficiency ratio improved to 49.6% from 51.6% in the previous quarter, indicating better cost management [20] Business Line Data and Key Metrics Changes - Total loans were slightly down on a linked quarter basis, but originations were healthy at $1.2 billion, consistent with typical first-quarter performance [6][7] - Core deposit flows remained stable, with non-interest-bearing deposits increasing by $70 million [7] - Credit performance was stable, with early delinquency rates decreasing compared to the prior quarter [8][22] Market Data and Key Metrics Changes - Consumer confidence is currently uncertain due to pending fiscal policies and tariffs, impacting overall market sentiment [9] - Year-to-date fiscal government tax collections increased by 3%, and the unemployment rate remained low [9] Company Strategy and Development Direction - The company continues to focus on margin expansion and maintaining a healthy balance sheet while navigating economic uncertainties [5][11] - There is an ongoing investment in digital infrastructure, including a transition to a centralized cloud system [10] - The company aims to deploy excess capital thoughtfully to enhance franchise and shareholder value [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about loan growth in the second half of the year, contingent on the resolution of current market uncertainties [54][57] - The company anticipates a normalization of consumer credit metrics, expecting improvements in charge-off rates year-over-year [58][59] Other Important Information - The company redeemed approximately $50 million in subordinated debentures and declared $30 million in common stock dividends during the quarter [8][25] - The tangible book value per share increased by 7% to $10.64, with a tangible common equity ratio expanding to 9.1% [25] Q&A Session Summary Question: Can you provide details on the yields for the second half of the year? - The expected yields for the second half of the year are projected to be around 1.35% to 1.40% [28] Question: What assumptions are made regarding margin expansion? - The company assumes a pickup of around 150 to 300 basis points, considering potential rate reductions [30] Question: What is the outlook for loan growth? - Loan growth is expected to be more pronounced in the second half of the year, with a good pipeline currently in place [56] Question: How is the company managing deposit flows? - The company is seeing more stability in deposit flows compared to previous years, with growth in core transaction and non-interest-bearing deposits [65] Question: What is the company's exposure to the Florida condo market? - The company has very limited exposure to the condo market in Florida, primarily in the mortgage portfolio [83]

Financial Performance - First BanCorp reported a net income of $77.1 million, or $0.47 per diluted share, for Q1 2025, an increase from $75.7 million, or $0.46 per diluted share, in Q4 2024[2]. - Net income for the first quarter of 2025 was reported at $77,059,000, an increase from $75,701,000 in the fourth quarter of 2024 and $73,458,000 in the first quarter of 2024[68]. - Adjusted net income attributable to common stockholders for the first quarter of 2025 was also $77,059,000, compared to $75,701,000 in the previous quarter and $74,050,000 in the same quarter last year[68]. - Earnings per diluted share for the first quarter of 2025 was $0.47, consistent with the previous quarter and an increase from $0.44 in the first quarter of 2024[68]. - Income before income taxes for the first quarter of 2025 was $100,299,000, up from $96,029,000 in the fourth quarter of 2024, representing a 7.0% increase[69]. - Adjusted pre-tax, pre-provision income for the first quarter of 2025 was $125,109,000, an increase of $8,176,000 or 7.0% from the previous quarter[69]. Income and Expenses - Pre-tax pre-provision income grew by 7% to $125 million, reflecting strong operational performance[3]. - Non-interest income rose to $35.7 million, driven by $3.3 million in seasonal contingent insurance commissions[8]. - Total non-interest expenses decreased by $1.5 million to $123.0 million in Q1 2025, reflecting variances in employee compensation and benefits[14]. - The Corporation recorded an income tax expense of $23.2 million for Q1 2025, up from $20.3 million in Q4 2024[16]. - The estimated annual effective tax rate for Q1 2025 was 23.7%, compared to 23.0% for Q4 2024[17]. Loans and Credit Quality - Total loans decreased by $71.7 million to $12.7 billion, primarily due to the payoff of a $73.8 million commercial mortgage loan[8]. - The allowance for credit losses (ACL) for loans and finance leases was $247.3 million as of March 31, 2025, an increase of $3.4 million from the previous quarter, driven by higher qualitative adjustments due to economic uncertainty[26]. - The provision for credit losses on loans and finance leases was $24.8 million for Q1 2025, compared to $21.5 million in Q4 2024, with significant expenses in commercial and construction loan portfolios[27]. - Total non-performing assets rose by $11.1 million to $129.4 million as of March 31, 2025, with total nonaccrual loans held for investment at $98.4 million[21]. - The ratio of ACL for loans and finance leases to total loans held for investment was 1.95% as of March 31, 2025, up from 1.91% as of December 31, 2024[29]. Deposits and Liquidity - Core customer deposits increased by $29 million during the quarter, including a $70 million rise in non-interest-bearing deposits[4]. - Total deposits decreased by $48.8 million to $16.3 billion as of March 31, 2025, with a notable $82.1 million decrease in government deposits[46]. - Cash and cash equivalents rose by $168.9 million to $1.3 billion, contributing to total core liquidity of $2.7 billion, or 14.25% of total assets[48]. - The Corporation had $6.2 billion available to meet liquidity needs, representing 133% of estimated uninsured deposits as of March 31, 2025[49]. - The estimated amount of uninsured deposits was $4.6 billion, representing 28.44% of total deposits as of March 31, 2025, down from 29.36% at the end of 2024[50]. Capital and Ratios - Capital ratios exceeded required regulatory levels, with total capital at 17.96% and common equity tier 1 capital at 16.62% as of March 31, 2025[8]. - CET1 capital ratio improved to 16.62% as of March 31, 2025, compared to 16.32% as of December 31, 2024, indicating stronger capital position under Basel III rules[44]. - Tangible common equity ratio increased to 9.10% as of March 31, 2025, up from 8.44% as of December 31, 2024, reflecting improved earnings and asset valuations[51]. Market and Stock Performance - The common stock price at the end of the period rose to $19.17 as of March 31, 2025, compared to $18.59 at the end of the previous quarter, an increase of 3.11%[78]. - Cash dividends declared increased to $0.18 per share for the quarter ended March 31, 2025, up from $0.16 in the previous quarter, reflecting a 12.50% increase[78]. Miscellaneous - The corporation cautions that forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed[71]. - The corporation's shares trade on the New York Stock Exchange under the symbol FBP, with operations in Puerto Rico, the U.S., and the British Virgin Islands[72].

Financial Performance - First Bancorp reported revenue of $248.13 million for the quarter ended March 2025, reflecting a year-over-year increase of 7.7% [1] - Earnings per share (EPS) for the quarter was $0.47, up from $0.44 in the same quarter last year [1] - The reported revenue exceeded the Zacks Consensus Estimate of $240.31 million by 3.26% [1] - The company achieved an EPS surprise of 9.30%, compared to the consensus estimate of $0.43 [1] Key Metrics - Efficiency ratio was reported at 49.6%, better than the estimated 52.1% by two analysts [4] - Net Interest Margin stood at 4.5%, matching the average estimate [4] - Total Interest-Earning Assets averaged $19.08 billion, slightly below the estimated $19.27 billion [4] - Card and processing income was $11.48 million, compared to the average estimate of $11.89 million [4] - Net interest income on a tax-equivalent basis was $212.40 million, exceeding the average estimate of $211.72 million [4] - Service charges and fees on deposit accounts totaled $9.64 million, below the average estimate of $9.83 million [4] - Total Non-Interest Income reached $35.73 million, surpassing the average estimate of $33.81 million [4] - Mortgage banking activities generated $3.18 million, slightly below the average estimate of $3.23 million [4] Stock Performance - Shares of First Bancorp returned +0.7% over the past month, while the Zacks S&P 500 composite declined by -5.1% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

First Bancorp (FBP) came out with quarterly earnings of $0.47 per share, beating the Zacks Consensus Estimate of $0.43 per share. This compares to earnings of $0.44 per share a year ago. These figures are adjusted for non- recurring items. It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.46 on $246.12 million in revenues for the coming quarter and $1.84 on $996.12 million in revenues for the current ...

Core Viewpoint - Synovus Financial (SNV) is currently positioned as a more attractive investment option compared to First Bancorp (FBP) based on various valuation metrics and earnings outlook [1][3]. Valuation Metrics - SNV has a forward P/E ratio of 8.29, while FBP has a forward P/E of 10.16, indicating that SNV is potentially undervalued [5]. - The PEG ratio for SNV is 0.81, suggesting a favorable earnings growth outlook compared to FBP's PEG ratio of 1.61 [5]. - SNV's P/B ratio stands at 1.20, compared to FBP's P/B of 1.83, further supporting SNV's valuation advantage [6]. Earnings Outlook - SNV holds a Zacks Rank of 2 (Buy), indicating a positive earnings estimate revision trend, while FBP has a Zacks Rank of 4 (Sell), suggesting a less favorable earnings outlook [3]. - The solid earnings outlook for SNV contributes to its superior valuation metrics and overall investment appeal [6]. Value Grades - SNV has been assigned a Value grade of A, while FBP has a Value grade of C, reflecting SNV's stronger position in terms of value investing criteria [6].

Group 1 - Analysts project First Bancorp (FBP) will announce quarterly earnings of $0.43 per share, a decline of 2.3% year over year, with revenues expected to reach $240.31 million, increasing 4.3% from the same quarter last year [1] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating a collective reevaluation by analysts [1] - The 'Efficiency ratio' is expected to be 52.1%, compared to 52.5% in the same quarter last year, while 'Net Interest Margin' is projected at 4.5%, up from 4.3% a year ago [4] Group 2 - 'Total Interest-Earning Assets - Average Balance' is forecasted to be $19.27 billion, compared to $18.93 billion in the same quarter last year [5] - 'Service charges and fees on deposit accounts' are estimated at $9.83 million, slightly up from $9.66 million in the same quarter last year [5] - 'Total Non Interest Income' is expected to reach $33.81 million, compared to $33.98 million a year ago [6] Group 3 - First Bancorp shares have changed by -3.2% in the past month, while the Zacks S&P 500 composite has moved -5.6%, indicating a relatively better performance [7] - With a Zacks Rank 3 (Hold), FBP is expected to closely follow overall market performance in the near term [7]

Core Viewpoint - First BanCorp's valuation is under threat due to tariffs affecting the bond market and Puerto Rico's tourism sector, leading to an increase in estimated provision expenses for loan losses and a subsequent reduction in earnings [1] Group 1 - The impact of tariffs on First BanCorp's valuation is significant, particularly concerning the bond market [1] - Puerto Rico's tourism industry is also affected, which has implications for First BanCorp's financial health [1] - The analyst has adjusted the provision expense estimate for loan losses upward, indicating a more cautious outlook for the company's earnings [1]

Core Viewpoint - First Bancorp (FBP) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ended March 2025, with actual results being a significant factor influencing its near-term stock price [1][2]. Earnings Expectations - The earnings report is scheduled for release on April 24, 2025, with expectations of quarterly earnings at $0.43 per share, reflecting a year-over-year decrease of 2.3%. Revenues are projected to be $240.31 million, which is a 4.3% increase from the previous year [3][2]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating that analysts have not significantly altered their initial projections during this period [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for First Bancorp is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -0.77%, suggesting a bearish outlook from analysts [10][11]. Historical Performance - In the last reported quarter, First Bancorp exceeded the expected earnings of $0.41 per share by delivering $0.46, resulting in a positive surprise of 12.20%. Over the last four quarters, the company has consistently beaten consensus EPS estimates [12][13]. Industry Comparison - In comparison, Popular (BPOP), another player in the Southeast banking industry, is expected to report earnings of $2.26 per share for the same quarter, indicating a year-over-year increase of 20.9%, with revenues projected at $756.11 million, up 5.8% from the previous year [17].

Employee Statistics and Training - As of December 31, 2024, the Corporation had 3,113 regular employees, representing a 2% decrease from December 31, 2023[35] - Approximately 67% of the total employee population and 58% of management positions were women as of December 31, 2024[35] - The Corporation delivered more than 109,000 hours of training in 2024, with employees completing an average of 31.33 training hours[42] - The voluntary turnover rate was 10.91% for 2024, with a turnover rate of 3.6% for high performers[39] - The Corporation's investment in employee wellness includes health, dental, and vision insurance, as well as fitness facilities and wellness programs[45] Business Segments - The Mortgage Banking segment focuses on originating residential mortgage loans, including FHA, VA, and RD loans, with a commitment to sell conforming loans to FNMA and FHLMC[20][22] - The Consumer (Retail) Banking segment includes consumer lending and deposit-taking activities primarily conducted through FirstBank's branch network in Puerto Rico[23] - The Treasury and Investments segment manages the Corporation's investment portfolio and provides funding to support lending activities across various segments[25] Capital Ratios and Regulatory Compliance - As of December 31, 2024, the Corporation's total capital ratio was 18.02%, exceeding the minimum requirement of 10.00%[64] - The Corporation's Common Equity Tier 1 (CET1) capital ratio was 16.32%, above the minimum requirement of 6.50%[64] - The Tier 1 capital ratio for the Corporation was 16.32%, surpassing the minimum requirement of 8.00%[64] - The leverage ratio for the Corporation stood at 11.07%, well above the minimum requirement of 5.00%[64] - The Corporation is subject to regulatory capital requirements aligned with Basel III, including a capital conservation buffer of 2.5%[61] - The Corporation and FirstBank are not required to perform formal stress-testing due to total assets being less than $100 billion[66] - The Corporation has elected to phase in the full effect of Current Expected Credit Loss (CECL) on regulatory capital over a five-year transition period[62] Community and Environmental Impact - The Corporation's Corporate Sustainability program emphasizes ESG matters, with a focus on governance, community impact, and environmental stewardship[30][31] - FirstBank received a "satisfactory" rating in its most recent Community Reinvestment Act (CRA) examination by the FDIC[78] Deposit Insurance and Regulatory Changes - The Corporation recorded an increase of approximately $2.4 million in deposit insurance expense compared to 2022 due to the increase in the initial base deposit insurance assessment rate[97] - The FDIC's designated reserve ratio for the Deposit Insurance Fund (DIF) was achieved at 1.36% in September 2018, but fell to 1.30% in Q3 2020 due to a surge in deposits[95] - The FDIC plans to restore the DIF to at least 1.35% within eight years, maintaining current assessment rates and monitoring deposit trends[95] - The Corporation recorded charges of $6.3 million and $1.1 million in FDIC deposit insurance expenses for the years ended December 31, 2023, and 2024, respectively, due to special assessments related to bank closures[98] - As of December 31, 2024, the Corporation's total estimated FDIC special assessment amounted to $7.4 million, with $2.4 million already paid[98] - The FDIC adopted a final rule in October 2022 to increase initial base deposit insurance assessment rates uniformly by 2 basis points starting in 2023[96] Compliance and Governance - The Corporation is subject to federal economic and trade sanctions requirements enforced by the Office of Foreign Assets Control (OFAC)[82] - The Corporation believes it has adopted appropriate policies and controls to comply with the Bank Secrecy Act and USA PATRIOT Act[83] - The SEC's new rules require registrants to disclose material cybersecurity incidents and risk management strategies within four business days of determination[86] - The Corporation's Compensation Clawback Policy is compliant with NYSE's listing standards as per the SEC's new rules introduced in October 2022[92] - FirstBank is in compliance with the stock ownership requirements of the FHLB of New York, holding shares of capital stock as mandated by applicable laws and regulations[102] - The FDIC regulations allow well-capitalized institutions to accept brokered deposits without limitations, while undercapitalized institutions are prohibited from accepting them[109] - The Banking Law requires every bank to maintain a legal reserve of no less than 20% of its demand liabilities, excluding certain government deposits[112] - Under the Banking Law, loans to any one person or entity can reach up to 15% of the bank's paid-in capital, reserve fund, and 50% of retained earnings, with a maximum of 33.33% if secured by collateral worth at least 25%[113][114] Taxation and Regulatory Fees - The Corporation has maintained an effective tax rate lower than the maximum statutory rate in Puerto Rico, benefiting from special tax treatments through certain entities[124] - FirstBank Insurance Agency is registered and regulated by the Insurance Commissioner of Puerto Rico, adhering to various regulations regarding licensing and consumer protection[127] - FirstBank is subject to the rules and regulations of multiple federal housing agencies regarding mortgage banking operations, including the FHA and VA[128] - The IBE Act 52 provides tax exemptions for net income derived by FirstBank's international banking operations, with specific activities identified for exemption[118] - The recent amendments to the IBE Act increased the annual license fee for IBEs from $5,000 to $25,000, effective May 15, 2024[122] - The Banking Law mandates that at least 10% of the yearly net income of a Puerto Rico commercial bank be credited to a reserve fund until it equals the total paid-in capital[115] Reporting and Governance Documents - The Corporation provides access to annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K through its investor relations website[130] - Corporate Governance Guidelines and Principles, along with various committee charters, are available free of charge on the Corporation's website[131] - The Corporation's Code of Ethics for CEO and Senior Financial Officers is established to ensure ethical conduct[133] - Information regarding interest rate risk management is included in the Management's Discussion and Analysis section of the Form 10-K[576]