First BanCorp. Q4 Earnings Call Highlights

Core Insights - First BanCorp reported strong financial performance in Q4 2025, with record revenues and a net income of $87 million, translating to earnings per share of $0.85 and a return on assets of 1.8% [3][4] - The company maintained a stable efficiency ratio of 49% for the quarter and reiterated its guidance for 2026, including organic loan growth of 3-5% and an efficiency ratio of 52% or better [4][22] Financial Performance - Net interest income increased by $4.9 million quarter over quarter to $222.8 million, with a net interest margin of 4.68%, which is 8 basis points higher than the previous quarter [1][6] - GAAP quarterly results showed a net income of $87.1 million, or $0.55 per share, down from $100.5 million, or $0.63 per share in the prior quarter, primarily due to prior-quarter items [2] - Adjusted pre-tax, pre-provision income rose to $129.2 million from $121.5 million, indicating an 8% increase in earnings per share when excluding certain items [2] Capital Returns - The company continued its capital return strategy, repurchasing $150 million of shares and paying $150 million in dividends in 2025, with an 11% increase in the quarterly dividend to $0.20 per share [5][17][18] - Since the buyback program began in 2021, First BanCorp has repurchased over 28% of shares outstanding [17] Loan and Deposit Trends - First BanCorp originated $1.4 billion in loans during the quarter, with total loans growing by $80 million, mainly from commercial segments [13] - Core customer deposits increased by $267 million, while the bank reduced total deposit costs, contributing to a 5-basis-point decline in overall funding costs [13][7] Credit Quality - The ratio of non-performing assets to total assets fell to an all-time low of 60 basis points, with non-performing assets declining by $5.3 million during the quarter [15] - Net charge-offs were $20.4 million, or 63 basis points of average loans, consistent with the prior quarter [16] Expense Management - Operating expenses were $126.9 million in Q4, up $2 million sequentially, with employee compensation rising due to merit increases [10][12] - For 2026, the company guided to quarterly expenses of $128 million to $130 million, while aiming to maintain an efficiency ratio in the 50% to 52% range [12]