First BanCorp Approves $350 Million Buyback and 25% Dividend Hike

The Tip Desk · October 24, 2026 · 3 min read

Net interest margin compressed 14 bps to 4.73% as purchase-discount accelerations rolled off and deposit costs rose, while net income held at $96.1 million.

First BanCorp. (FBP), the bank holding company for FirstBank Puerto Rico, reported net income of $96.1 million, or $0.63 a share, for the third quarter of 2026, matching the prior quarter’s dollar profit.

The board approved a new $350 million stock repurchase program and a 25% increase in the common stock dividend. In the quarter the company repurchased $50.0 million of common stock and declared $30.4 million in dividends. Common equity tier 1 capital was 16.91%.

Net interest income fell to $227.5 million from $229.1 million after an $8.2 million sequential rise in the second quarter. The company said the decline reflected $3.4 million of interest income recognized in the second quarter from purchase-discount and deferred-fee accelerations, which accounted for about 7 bps of the net interest margin move, and a $4.8 million increase in deposit costs. Net interest margin compressed 14 bps to 4.73% from 4.87%, reversing the 12 bps expansion in the prior quarter. The company attributed the compression to a mix shift toward higher-yielding time deposits and the 7 bps reduction from those accelerations.

Average cost of interest-bearing liabilities rose to 2.15% from 2.07%. Interest-bearing checking and savings cost increased 7 bps to 1.33%, or 0.69% excluding government deposits. Average non-brokered time deposits rose $195.1 million and brokered certificates of deposit rose $98.1 million.

Total loans increased $108.3 million to $13.4 billion, a 3.3% annualized linked-quarter pace, driven by commercial and industrial growth despite higher commercial repayments. Average loans and leases were $13.26 billion. Core deposits excluding brokered and government balances rose $120.4 million to $13.4 billion, mainly in Puerto Rico, with time deposits up $253.0 million and non-maturity deposits down $132.6 million. Government deposits fell $76.7 million to $3.0 billion.

The provision for credit losses declined to $14.6 million from $17.3 million, mainly a $3.2 million reduction in the residential mortgage provision after a downward revision of estimated loss severities. Annualized net charge-offs to average loans rose to 0.55% from 0.49%, reflecting a $2.0 million increase in consumer loans and finance leases net charge-offs, mainly auto loans. Allowance coverage of loans fell to 1.81% from 1.85%.

Non-performing assets were essentially unchanged at $114.1 million. Nonaccrual loans rose $1.6 million to $96.2 million, including a $1.8 million Florida commercial mortgage migration, while other real estate owned fell $1.3 million. Inflows to nonaccrual loans fell $6.2 million to $34.5 million, with commercial and construction inflows down $12.8 million to $2.3 million and consumer inflows up $5.6 million to $28.4 million. Loans in early delinquency rose $12.1 million to $155.5 million, including an $8.3 million matured construction loan fully repaid after quarter-end and a $6.8 million increase in consumer loans and finance leases, mainly auto.

Non-interest income declined $3.1 million to $32.6 million, mainly a $1.9 million drop in realized gains on purchased income tax credits and a $0.6 million Florida fixed-asset sale gain in the prior quarter. Card and processing income was $12.5 million. Non-interest expenses rose $2.9 million to $130.2 million, including a $2.8 million contingency reserve on a commercial OREO property in the U.S. Virgin Islands. The efficiency ratio widened to 50.06% from 48.07%.

Income tax expense was $19.2 million, down from $24.1 million, on a lower estimated annual effective tax rate of 20.5% versus 21.5%, which the company tied to higher than previously forecasted business activities with preferential treatment under the Puerto Rico tax code. Return on average assets was 1.98% and return on average equity 19.46%.