First BanCorp. Originations Reach $1.7 Billion as Loans Grow

The Tip Desk · July 23, 2026 · 4 min read

Net interest margin widened 12 bps to 4.87% as Puerto Rico refinancings and securities redeployment lifted net interest income to $229.1 million.

First BanCorp. (FBP), the bank holding company for FirstBank Puerto Rico, reported net interest income of $229.1 million for the second quarter of 2026, up from $221.0 million in the first quarter, as net interest margin expanded 12 bps to 4.87% from 4.75%.

The margin move came mostly from accelerated unamortized purchase discount and net deferred fees on Puerto Rico refinancings, which contributed about 7 bps, plus continued redeployment of cash flows from lower-yielding investment securities into higher-yielding assets. An extra day in the quarter added about $1.6 million of net interest income. Average yield on interest-earning assets rose to 6.11% from 6.02%, and the average rate on interest-bearing liabilities fell to 2.07% from 2.09%, widening the net interest spread to 4.04% from 3.93%.

Loan growth accelerated. Total loans increased $168.8 million to $13.3 billion, driven by commercial and industrial growth in Puerto Rico. Originations reached $1.7 billion, up $469.5 million, mainly in commercial and construction loans. Average loans and leases were $13.08 billion. President and Chief Executive Officer Aurelio Alemán said commercial activity in Puerto Rico led the pickup and that a healthy pipeline supports the company’s path to full-year growth objectives.

Funding followed the same commercial pattern. Government deposits, fully collateralized, rose $167.7 million to $3.0 billion, mainly in Puerto Rico. Brokered certificates of deposit increased $87.7 million to $594.8 million in Florida. Core deposits other than brokered and government deposits rose $18.3 million to $13.2 billion. The average cost of interest-bearing checking and savings accounts rose 5 bps to 1.26%, including higher rates mainly on government deposits; excluding those deposits, the cost was unchanged at 0.66%.

Non-interest income was $35.7 million, down $2.0 million from $37.7 million, mainly because the first quarter included $3.6 million of seasonal contingent insurance commissions. Card and processing income rose $0.8 million on higher transaction volumes. Non-interest expenses were $127.3 million, up $0.2 million from $127.1 million. Compensation fell $1.9 million after first-quarter stock-based compensation and payroll-tax items; card processing expenses rose $1.2 million and business promotion rose $0.9 million. The efficiency ratio improved to 48.07% from 49.14%.

Net income was $96.1 million, or $0.62 a share, compared with $88.8 million, or $0.57 a share, in the first quarter. Return on average assets was 2.02%, the 18th consecutive quarter above 1.5%. Adjusted pre-tax, pre-provision income reached a record $137.5 million. Income tax expense was $24.1 million on a lower estimated annual effective tax rate of 21.5%, versus 21.9% in the first quarter.

The provision for credit losses was $17.3 million, essentially unchanged from $17.3 million in the prior quarter, reflecting a lower macroeconomic benefit and higher loan growth, offset by a $5.0 million decrease in net charge-offs. Annualized net charge-offs to average loans fell to 0.49% from 0.65%, primarily due to a $4.7 million reduction in charge-offs on consumer loans and finance leases, mainly auto. Allowance coverage of loans was 1.85%, versus 1.87%; the ACL for loans and finance leases was $245.0 million.

Nonaccrual loans rose $6.8 million to $94.6 million after a $14.8 million Florida C&I relationship moved to nonaccrual; nonaccrual loans to total loans rose to 0.71% from 0.67%. Inflows to nonaccrual loans were $40.7 million, up $6.4 million from $34.3 million; commercial and construction inflows were $15.1 million versus $1.2 million, while consumer inflows fell to $22.8 million from $29.7 million. Loans in early delinquency (30–89 days) rose $32.9 million to $143.4 million, including a $20.7 million increase in consumer loans and finance leases, primarily auto, and an $8.7 million increase in commercial and construction loans. Alemán said the company continues to monitor seasonal delinquency trends and broader consumer market conditions.

The company returned 84% of earnings through $50.0 million of share repurchases and $31.0 million of dividends, versus a 92% net payout ratio in the first quarter. CET1 was 16.96%. Cash and cash equivalents were $561.3 million; available liquidity was 19.60% of total assets. Book value per share was $12.95.