FIRST BANCORP. ANNOUNCES EARNINGS FOR THE QUARTER ENDED MARCH 31, 2025

NET INTEREST INCOME

 

The following table sets forth information concerning net interest income for the last five quarters:

Net interest income amounted to $212.4 million for the first quarter of 2025, an increase of $3.1 million, compared to $209.3 million for the fourth quarter of 2024, which is net of a reduction of approximately $2.7 million associated with the effect of two less days in the first quarter of 2025. The increase in net interest income reflects the following:

 

 

 

 

 

 

 

 

Partially offset by:

 

 

 

As of March 31, 2025, the interest rate on approximately 52% of the Corporation’s commercial and construction loans was tied to variable rates, with 33% based upon SOFR of 3 months or less, 11% based upon the Prime rate index, and 8% based on other indexes. For the quarter ended March 31, 2025, the average one-month SOFR decreased 28 basis points, the average three-month SOFR decreased 20 basis points, and the average Prime rate decreased 32 basis points, compared to the average rates for such indexes for the previous quarter.

 

 

Net interest margin for the first quarter of 2025 was 4.52%, a 19 basis points increase when compared to the fourth quarter of 2024, mostly reflecting a change in asset mix associated with the deployment of cash flows from lower-yielding investment securities to higher-yielding interest-earning assets, and a decrease in the cost of interest-bearing deposits due to the effect of lower interest rates. The results also include an increase of 4 basis points associated with prepayment penalties in the commercial loan portfolio and higher income from late fees in the consumer loan portfolio. These factors were partially offset by the downward repricing of variable-rate commercial loans and a lower federal funds rate on cash deposited at the FED.

 

NON-INTEREST INCOME

 

The following table sets forth information concerning non-interest income for the last five quarters:

Non-interest income increased by $3.5 million to $35.7 million for the first quarter of 2025, compared to $32.2 million for the fourth quarter of 2024, mainly due to a $3.5 million increase in insurance commission income driven by $3.3 million in seasonal contingent commissions recorded in the first quarter of 2025 based on prior year’s production of insurance policies. Other variances included a $1.3 million increase related to higher realized gains from purchased income tax credits, partially offset by $0.6 million in debit card and merchant volume-based incentives recognized during the fourth quarter of 2024 and lower interchange income.

NON-INTEREST EXPENSES

 

 

Non-interest expenses amounted to $123.0 million in the first quarter of 2025, a decrease of $1.5 million, from $124.5 million in the fourth quarter of 2024. The $1.5 million decrease reflects the following significant variances:

 

 

Partially offset by:

 

 

INCOME TAXES

 

The Corporation recorded an income tax expense of $23.2 million for the first quarter of 2025, compared to $20.3 million for the fourth quarter of 2024. The fourth quarter of 2024 includes a reduction in income tax expense due to a higher actual than forecasted proportion of exempt income to taxable income for the year 2024.

 

The Corporation’s estimated annual effective tax rate, excluding entities with pre-tax losses from which a tax benefit cannot be recognized and discrete items, was 23.7% for the first quarter of 2025, compared to an annual effective tax rate of 23.0% for the fourth quarter of 2024. As of March 31, 2025, the Corporation had a deferred tax asset of $134.3 million, net of a valuation allowance of $108.7 million against the deferred tax assets.

 

CREDIT QUALITY

 

Non-Performing Assets

 

The following table sets forth information concerning non-performing assets for the last five quarters:

 

Variances in credit quality metrics:

 

 

The increase in non-performing assets was driven by:

 

 

 

Partially offset by:

 

 

 

 

 

Early Delinquency

 

Total loans held for investment in early delinquency (i.e., 30-89 days past due accruing loans, as defined in regulatory reporting instructions) amounted to $131.2 million as of March 31, 2025, a decrease of $21.8 million, compared to $153.0 million as of December 31, 2024. The variances by major portfolio are as follows:

 

 

 

Partially offset by:

 

 

Allowance for Credit Losses

The following table summarizes the activity of the ACL for on-balance sheet and off-balance sheet exposures during the first quarter of 2025 and fourth quarter of 2024:

 

Allowance for Credit Losses for Loans and Finance Leases

 

As of March 31, 2025, the ACL for loans and finance leases was $247.3 million, an increase of $3.4 million, from $243.9 million as of December 31, 2024. The ACL for the first quarter of 2025 includes higher qualitative adjustments due to the uncertainty in the economic environment. The increase was mainly related to the ACL for commercial and construction loans, which increased by $4.7 million, mainly due to the impact of renewals of lines of credit, updated financial information of certain commercial borrowers, and a deterioration in the economic outlook of the forecasted CRE price index. Also, the ACL for residential mortgage loans increased by $0.9 million mainly due to newly originated loans that carry a higher loss rate, partially offset by improvements in the long-term projections of the unemployment rate and the Housing Price Index. Meanwhile, the ACL for consumer loans decreased by $2.2 million, driven by improvements in macroeconomic variables, mainly in the projection of the unemployment rate.

The provision for credit losses on loans and finance leases was $24.8 million for the first quarter of 2025, compared to $21.5 million in the fourth quarter of 2024, as detailed below:

 

 

 

The ratio of the ACL for loans and finance leases to total loans held for investment was 1.95% as of March 31, 2025, compared to 1.91% as of December 31, 2024. The ratio of the total ACL for loans and finance leases to nonaccrual loans held for investment decreased to 251.13% as of March 31, 2025, compared to 278.90% as of December 31, 2024, driven by the aforementioned inflow of the $12.6 million commercial mortgage loan in the Florida region, which did not trigger any additional ACL based on the collateral value.

 

Net Charge-Offs

 

The following table presents ratios of net charge-offs (recoveries) to average loans held-in-portfolio for the last five quarters:

 

(1)

The net charge-offs for the quarters ended March 31, 2025 and 2024 included $2.4 million and $9.5 million, respectively, in recoveries associated with the bulk sales of fully charged-off consumer loans and finance leases. The aforementioned recoveries reduced the ratios of consumer loans and finance leases and total net charge-offs to related average loans for the quarter ended March 31, 2025 by 25 basis points and 8 basis points, respectively, and by 104 basis points and 31 basis points, respectively, for the quarter ended March 31, 2024.

The ratios above are based on annualized net charge-offs and are not necessarily indicative of the results expected in subsequent periods.

 

Net charge-offs were $21.4 million for the first quarter of 2025, or an annualized 0.68% of average loans, compared to $24.6 million, or an annualized 0.78% of average loans, in the fourth quarter of 2024. The $3.2 million decrease in net charge-offs includes $2.4 million in recoveries associated with the aforementioned bulk sale of fully charged-off consumer loans and finance leases during the first quarter of 2025.

Allowance for Credit Losses for Unfunded Loan Commitments

 

As of each of March 31, 2025 and December 31, 2024, the ACL for off-balance sheet credit exposures amounted to $3.1 million.

 

Allowance for Credit Losses for Debt Securities

 

As of March 31, 2025, the ACL for debt securities was $1.4 million, of which $0.9 million was related to Puerto Rico municipal bonds classified as held-to-maturity, compared to $1.3 million and $0.8 million, respectively, as of December 31, 2024.

 

STATEMENT OF FINANCIAL CONDITION

 

Total assets were approximately $19.1 billion as of March 31, 2025, down $185.9 million from December 31, 2024.

The following variances within the main components of total assets are noted:

Total loan originations, including refinancings, renewals, and draws from existing commitments (excluding credit card utilization activity), amounted to $1.1 billion in the first quarter of 2025, a decrease of $463.1 million compared to the fourth quarter of 2024.

Total loan originations in the Puerto Rico region amounted to $765.0 million in the first quarter of 2025, compared to $1.2 billion in the fourth quarter of 2024. The $409.3 million decrease in total loan originations was mainly in commercial and construction loans, driven by five commercial mortgage loan originations totaling $171.5 million, each in excess of $15.0 million, mainly consisting of refinancings during the fourth quarter of 2024, and lower utilization of C&I lines of credit during the first quarter of 2025.

Total loan originations in the Virgin Islands region amounted to $48.0 million in the first quarter of 2025, compared to $65.1 million in the fourth quarter of 2024. The $17.1 million decrease in total loan originations was mainly in commercial and construction loans.

Total loan originations in the Florida region amounted to $261.4 million in the first quarter of 2025, compared to $298.1 million in the fourth quarter of 2024. The $36.7 million decrease in total loan originations was mainly related to a $23.2 million decrease in commercial and construction loan originations and a $13.1 million decrease in residential mortgage loan originations.

Total liabilities were approximately $17.3 billion as of March 31, 2025, a decrease of $296.0 million from December 31, 2024.

The following variances within the main components of total liabilities are noted:

 

 

 

Partially offset by:

 

 

 

Total stockholders’ equity amounted to $1.8 billion as of March 31, 2025, an increase of $110.1 million from December 31, 2024, driven by the $84.1 million increase in the fair value of available-for-sale debt securities due to changes in market interest rates recognized as part of accumulated other comprehensive loss and the net income generated in the first quarter of 2025, partially offset by $29.6 million in common stock dividends declared in the first quarter of 2025 and $21.8 million in common stock repurchases at an average price of $18.21.

 

As of March 31, 2025, capital ratios exceeded the required regulatory levels for bank holding companies and well-capitalized banks. The Corporation’s estimated CET1 capital, tier 1 capital, total capital and leverage ratios under the Basel III rules were 16.62%, 16.62%, 17.96%, and 11.20%, respectively, as of March 31, 2025, compared to CET1 capital, tier 1 capital, total capital, and leverage ratios of 16.32%, 16.32%, 18.02%, and 11.07%, respectively, as of December 31, 2024.

 

Meanwhile, estimated CET1 capital, tier 1 capital, total capital and leverage ratios of our banking subsidiary, FirstBank, were 15.56%, 16.32%, 17.58%, and 11.00%, respectively, as of March 31, 2025, compared to CET1 capital, tier 1 capital, total capital and leverage ratios of 15.76%, 16.51%, 17.76%, and 11.20%, respectively, as of December 31, 2024.

 

LIQUIDITY

 

In addition to the aforementioned available credit from the FHLB, the Corporation also maintains borrowing capacity at the FED Discount Window Program. The Corporation had approximately $2.6 billion available for funding under the FED’s Borrower-In-Custody Program as of March 31, 2025. In the aggregate, as of March 31, 2025, the Corporation had $6.2 billion available to meet liquidity needs, or 133% of estimated uninsured deposits (excluding fully collateralized government deposits).

Tangible Common Equity (Non-GAAP)

On a non-GAAP basis, the Corporation’s tangible common equity ratio increased to 9.10% as of March 31, 2025, compared to  8.44% as of December 31, 2024, driven by earnings less dividends and repurchases of common stock and the $84.1 million increase in the fair value of available-for-sale debt securities. Refer to Non-GAAP Disclosures- Non-GAAP Financial Measures for the definition of and additional information about this non-GAAP financial measure.

 

 

The following table presents a reconciliation of the Corporation’s tangible common equity and tangible assets to the most comparable GAAP items as of the indicated dates:

 

 

Exposure to Puerto Rico Government

 

Direct Exposure

As of March 31, 2025, the Corporation had $288.1 million of direct exposure to the Puerto Rico government, its municipalities, and public corporations, compared to $288.6 million as of December 31, 2024. As of March 31, 2025, approximately $196.0 million of the exposure consisted of loans and obligations of municipalities in Puerto Rico that are supported by assigned property tax revenues and for which, in most cases, the good faith, credit, and unlimited taxing power of the applicable municipality have been pledged to their repayment, and $50.9 million consisted of loans and obligations which are supported by one or more specific sources of municipal revenues. The Corporation’s total direct exposure to the Puerto Rico government also included $8.8 million in a loan extended to an affiliate of the Puerto Rico Electric Power Authority and $29.5 million in loans to public corporations of Puerto Rico. In addition, the total direct exposure included an obligation of the Puerto Rico government, specifically a residential pass-through MBS issued by the PRHFA, at an amortized cost of $2.9 million (fair value of $1.6 million as of March 31, 2025), included as part of the Corporation’s available-for-sale debt securities portfolio. This residential pass-through MBS issued by the PRHFA is collateralized by certain second mortgages and had an unrealized loss of $1.3 million as of March 31, 2025, of which $0.3 million is due to credit deterioration.

The aforementioned exposure to municipalities in Puerto Rico included $92.5 million of financing arrangements with Puerto Rico municipalities that were issued in bond form but underwritten as loans with features that are typically found in commercial loans.  These bonds are accounted for as held-to-maturity debt securities.

Indirect Exposure

As of March 31, 2025 and December 31, 2024, the Corporation had $2.9 billion and $3.1 billion, respectively, of public sector deposits in Puerto Rico. Approximately 19% of the public sector deposits as of March 31, 2025 were from municipalities and municipal agencies in Puerto Rico, and 81% were from public corporations, the Puerto Rico central government and agencies, and U.S. federal government agencies in Puerto Rico.

Additionally, as of March 31, 2025, the outstanding balance of construction loans funded through conduit financing structures to support the federal programs of Low-Income Housing Tax Credit (“LIHTC”) combined with Community Development Block Grant-Disaster Recovery (“CDBG-DR”) funding amounted to $62.6 million, compared to $59.2 million as of December 31, 2024. The main objective of these programs is to spur development in new or rehabilitated and affordable rental housing. PRHFA, as program subrecipient and conduit issuer, issues tax-exempt obligations which are acquired by private financial institutions and are required to co-underwrite with PRHFA a mirror construction loan agreement for the specific project loan to which the Corporation will serve as ultimate lender but where the PRHFA will be the lender of record. The total amount of unfunded loan commitments related to these loans as of March 31, 2025 was $76.2 million.

NON-GAAP DISCLOSURES

This press release contains GAAP financial measures and non-GAAP financial measures. Non-GAAP financial measures are used when management believes that the presentation of these non-GAAP financial measures enhances the ability of analysts and investors to analyze trends in the Corporation’s business and understand the performance of the Corporation. The Corporation may utilize these non-GAAP financial measures as guides in its budgeting and long-term planning process. Where non-GAAP financial measures are used, the most comparable GAAP financial measure, as well as the reconciliation of the non-GAAP financial measure to the most comparable GAAP financial measure, can be found in the text or in the tables in or attached to this press release. Any analysis of these non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP.

 

Certain non-GAAP financial measures, such as adjusted net income and adjusted earnings per share, and adjusted pre-tax, pre-provision income, exclude the effect of items that management believes are not reflective of core operating performance (the “Special Items”). Other non-GAAP financial measures include adjusted net interest income and adjusted net interest income margin, tangible common equity, tangible book value per common share, and certain capital ratios. These measures should be read in conjunction with the accompanying tables (Exhibit A), which are an integral part of this press release, and the Corporation’s other financial information that is presented in accordance with GAAP.

Special Items

The financial results for the quarter ended March 31, 2024 included the following Special Item:

 

FDIC Special Assessment Expense

 

 

Non-GAAP Financial Measures

 

Adjusted Pre-Tax, Pre-Provision Income

 

Adjusted pre-tax, pre-provision income is a non-GAAP performance metric that management uses and believes that investors may find useful in analyzing underlying performance trends, particularly in times of economic stress, including as a result of natural catastrophes or health epidemics. Adjusted pre-tax, pre-provision income, as defined by management, represents income before income taxes adjusted to exclude the provisions for credit losses on loans, unfunded loan commitments and debt securities. In addition, from time to time, earnings are also adjusted for certain items that management believes are not reflective of core operating performance, which are regarded as Special Items.

Tangible Common Equity Ratio and Tangible Book Value per Common Share

 

The tangible common equity ratio and tangible book value per common share are non-GAAP financial measures that management believes are generally used by the financial community to evaluate capital adequacy. Tangible common equity is total common equity less goodwill and other intangible assets. Tangible assets are total assets less goodwill and other intangible assets. Tangible common equity ratio is tangible common equity divided by tangible assets. Tangible book value per common share is tangible assets divided by common shares outstanding. Refer to Statement of Financial Condition - Tangible Common Equity (Non-GAAP) for a reconciliation of the Corporation’s total stockholders’ equity and total assets in accordance with GAAP to the non-GAAP financial measures of tangible common equity and tangible assets, respectively. Management uses and believes that many stock analysts use the tangible common equity ratio and tangible book value per common share in conjunction with other more traditional bank capital ratios to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, typically stemming from the use of the purchase method of accounting for mergers and acquisitions. Accordingly, the Corporation believes that disclosure of these financial measures may be useful to investors. Neither tangible common equity nor tangible assets, or the related measures, should be considered in isolation or as a substitute for stockholders’ equity, total assets, or any other measure calculated in accordance with GAAP. Moreover, the manner in which the Corporation calculates its tangible common equity, tangible assets, and any other related measures may differ from that of other companies reporting measures with similar names.

 

Net Interest Income Excluding Valuations, and on a Tax-Equivalent Basis

 

Net interest income, interest rate spread, and net interest margin are reported excluding the changes in the fair value of derivative instruments and on a tax-equivalent basis in order to provide to investors additional information about the Corporation’s net interest income that management uses and believes should facilitate comparability and analysis of the periods presented. The changes in the fair value of derivative instruments have no effect on interest due or interest earned on interest-bearing liabilities or interest-earning assets, respectively. The tax-equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a marginal income tax rate. Income from tax-exempt earning assets is increased by an amount equivalent to the taxes that would have been paid if this income had been taxable at statutory rates. Refer to Table 4 in the accompanying tables (Exhibit A) for a reconciliation of the Corporation’s net interest income to adjusted net interest income excluding valuations, and on a tax-equivalent basis. Management believes that it is a standard practice in the banking industry to present net interest income, interest rate spread, and net interest margin on a fully tax-equivalent basis. This adjustment puts all earning assets, most notably tax-exempt securities and tax-exempt loans, on a common basis that management believes facilitates comparison of results to the results of peers.

 

NET INCOME AND RECONCILIATION TO ADJUSTED NET INCOME (NON-GAAP)

 

The following table shows, for the first quarter of 2025 and fourth quarter of 2024, net income and earnings per diluted share, and reconciles, for the first quarter of 2024, net income to adjusted net income and adjusted earnings per diluted share, which are non-GAAP financial measures that exclude the significant Special Items discussed in the Non-GAAP Disclosures - Special Items section.

 

(1)	See Non-GAAP Disclosures - Special Items above for discussion of the individual tax impact related to the above adjustment.

INCOME BEFORE INCOME TAXES AND RECONCILIATION TO ADJUSTED PRE-TAX, PRE-PROVISION INCOME (NON-GAAP)

 

The following table reconciles income before income taxes to adjusted pre-tax, pre-provision income for the last five quarters:

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Conference Call / Webcast Information

First BanCorp.’s senior management will host an earnings conference call and live webcast on Thursday, April 24, 2025, at 12:00 p.m. (Eastern Time). The call may be accessed via a live Internet webcast through the Corporation’s investor relations website, fbpinvestor.com, or through a dial-in telephone number at (833) 470-1428 or (404) 975-4839. The participant access code is 811566. The Corporation recommends that listeners go to the web site at least 15 minutes prior to the call to download and install any necessary software. Following the webcast presentation, a question and answer session will be made available to research analysts and institutional investors. A replay of the webcast will be archived in the Corporation’s investor relations website, fbpinvestor.com, until April 24, 2026. A telephone replay will be available one hour after the end of the conference call through May 24, 2025, at (866) 813-9403. The replay access code is 686791.

 

Safe Harbor

 

This press release may contain “forward-looking statements” concerning the Corporation’s future economic, operational, and financial performance. The words or phrases “expect,” “anticipate,” “intend,” “should,” “would,” “will,” “plans,” “forecast,” “believe,” and similar expressions are meant to identify “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created by such sections. The Corporation cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date hereof, and advises readers that any such forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, estimates, and assumptions by us that are difficult to predict. Various factors, some of which are beyond our control, including, but not limited to, the uncertainties more fully discussed in Part I, Item 1A, “Risk Factors” of the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024, and the following, could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements: the effect of changes in the interest rate environment and inflation levels on the level, composition and performance of the Corporation’s assets and liabilities, and corresponding effects on the Corporation’s net interest income, net interest margin, loan originations, deposit attrition, overall results of operations, and liquidity position; volatility in the financial services industry, which could result in, among other things, bank deposit runoffs, liquidity constraints, and increased regulatory requirements and costs; the effect of continued changes in the fiscal, monetary and trade policies and regulations of the U.S. federal government (including as a result of the current U.S. presidential administration), the Puerto Rico government and other governments, including those determined by the Federal Reserve Board, the Federal Reserve Bank of New York, the FDIC, government-sponsored housing agencies and regulators in Puerto Rico, the U.S., and the U.S. and British Virgin Islands, that may affect the future results of the Corporation; uncertainty as to the ability of FirstBank to retain its core deposits and generate sufficient cash flow through its wholesale funding sources, such as securities sold under agreements to repurchase, FHLB advances, and brokered CDs, which may require us to sell investment securities at a loss; adverse changes in general political and economic conditions in Puerto Rico, the U.S., and the U.S. and British Virgin Islands, including in the interest rate environment, unemployment rates, market liquidity and volatility, housing absorption rates, real estate markets, and U.S. capital markets, which may affect funding sources, loan portfolio performance and credit quality, market prices of investment securities, and demand for the Corporation’s products and services, and which may reduce the Corporation’s revenues and earnings and the value of the Corporation’s assets; the impact of government financial assistance for hurricane recovery and other disaster relief on economic activity in Puerto Rico, and the timing and pace of disbursements of funds earmarked for disaster relief; the ability of the Corporation, FirstBank, and third-party service providers to identify and prevent cyber-security incidents, such as data security breaches, ransomware, malware, “denial of service” attacks, “hacking,” identity theft, and state-sponsored cyberthreats, and the occurrence of and response to any incidents that occur, which may result in misuse or misappropriation of confidential or proprietary information, disruption, or damage to our systems or those of third-party service providers on which we rely, increased costs and losses and/or adverse effects to our reputation; general competitive factors and other market risks as well as the implementation of existing or planned strategic growth opportunities, including risks, uncertainties, and other factors or events related to any business acquisitions, dispositions, strategic partnerships, strategic operational investments, including systems conversions, and any anticipated efficiencies or other expected results related thereto; uncertainty as to the implementation of the debt restructuring plan of Puerto Rico and the fiscal plan for Puerto Rico as certified on June 5, 2024, by the oversight board established by the Puerto Rico Oversight, Management, and Economic Stability Act, or any revisions to it, on our clients and loan portfolios, and any potential impact from future economic or political developments and tax regulations in Puerto Rico; the impact of changes in accounting standards, or determinations and assumptions in applying those standards, and of forecasts of economic variables considered for the determination of the ACL; the ability of FirstBank to realize the benefits of its net deferred tax assets; the ability of FirstBank to generate sufficient cash flow to pay dividends to the Corporation; environmental, social, and governance (“ESG”) matters, including our climate-related initiatives and commitments, as well as the impact and potential cost to us of any policies, legislation, or initiatives in opposition to our ESG policies; the impacts of natural or man-made disasters, widespread health emergencies, geopolitical conflicts (including sanctions, war or armed conflict, such as the ongoing conflict in Ukraine, the conflict in the Middle East, the possible expansion of such conflicts in surrounding areas and potential geopolitical consequences, and the threat of conflict from neighboring countries in our region), terrorist attacks, or other catastrophic external events, including impacts of such events on general economic conditions and on the Corporation’s assumptions regarding forecasts of economic variables; the risk that additional portions of the unrealized losses in the Corporation’s debt securities portfolio are determined to be credit-related, resulting in additional charges to the provision for credit losses on the Corporation’s debt securities portfolio, and the potential for additional credit losses that could emerge from further downgrades of the U.S.’s Long-Term Foreign-Currency Issuer Default Rating and negative ratings outlooks; the impacts of applicable legislative, tax, or regulatory changes or changes in legislative, tax, or regulatory priorities, the reduction in staffing at U.S. governmental agencies, potential government shutdowns, and political impasses, including uncertainties regarding the U.S. debt ceiling and federal budget, as well as the current U.S. presidential administration and Puerto Rico government administration, on the Corporation’s financial condition or performance; the risk of possible failure or circumvention of the Corporation’s internal controls and procedures and the risk that the Corporation’s risk management policies may not be adequate; the risk that the FDIC may further increase the deposit insurance premium and/or require further special assessments, causing an additional increase in the Corporation’s non-interest expenses; any need to recognize impairments on the Corporation’s financial instruments, goodwill, and other intangible assets; the risk that the impact of the occurrence of any of these uncertainties on the Corporation’s capital would preclude further growth of FirstBank and preclude the Corporation’s Board of Directors from declaring dividends; and uncertainty as to whether FirstBank will be able to continue to satisfy its regulators regarding, among other things, its asset quality, liquidity plans, maintenance of capital levels, and compliance with applicable laws, regulations and related requirements. The Corporation does not undertake to, and specifically disclaims any obligation to update any “forward-looking statements” to reflect occurrences or unanticipated events or circumstances after the date of such statements, except as required by the federal securities laws.

About First BanCorp.

 

First BanCorp. is the parent corporation of FirstBank Puerto Rico, a state-chartered commercial bank with operations in Puerto Rico, the U.S., and the British Virgin Islands and Florida, and of FirstBank Insurance Agency. First BanCorp.’s shares of common stock trade on the New York Stock Exchange under the symbol FBP. Additional information about First BanCorp. may be found at www.1firstbank.com.

 

###

 

First BanCorp.

Ramon Rodriguez

Senior Vice President

Corporate Strategy and Investor Relations

ramon.rodriguez@firstbankpr.com

(787) 729-8200 Ext. 82179

		As of
		March 31, 2025				December 31, 2024
(In thousands, except for share information)
ASSETS
Cash and due from banks		$	1,327,075			$	1,158,215
Money market investments:
Time deposit with another financial institution			500				500
Other short-term investments			700				700
Total money market investments			1,200				1,200
Available-for-sale debt securities, at fair value (ACL of $516 as of March 31, 2025 and $521 as of December 31, 2024)			4,312,884				4,565,302
Held-to-maturity debt securities, at amortized cost, net of ACL of $843 as of March 31, 2025 and $802 as of December 31, 2024; (fair value of $305,501 as of March 31, 2025 and $308,040 as of December 31, 2024)			311,964				316,984
Total debt securities			4,624,848				4,882,286
Equity securities			44,813				52,018
Total investment securities			4,669,661				4,934,304
Loans, net of ACL of $247,269 as of March 31, 2025 and $243,942 as of December 31, 2024			12,428,129				12,502,614
Mortgage loans held for sale, at lower of cost or market			14,713				15,276
Total loans, net			12,442,842				12,517,890
Accrued interest receivable on loans and investments			63,777				71,881
Premises and equipment, net			130,469				133,437
OREO			15,880				17,306
Deferred tax asset, net			134,346				136,356
Goodwill			38,611				38,611
Other intangible assets			5,715				6,967
Other assets			277,407				276,754
Total assets		$	19,106,983			$	19,292,921
LIABILITIES
Deposits:
Non-interest-bearing deposits		$	5,629,383			$	5,547,538
Interest-bearing deposits			11,193,146				11,323,760
Total deposits			16,822,529				16,871,298
Advances from the FHLB			320,000				500,000
Other borrowings			11,143				61,700
Accounts payable and other liabilities			173,969				190,687
Total liabilities			17,327,641				17,623,685
STOCKHOLDERSʼ EQUITY
Common stock, $0.10 par value, 223,663,116 shares issued (March 31, 2025 - 163,104,181 shares outstanding and December 31, 2024 - 163,868,877 shares outstanding)			22,366				22,366
Additional paid-in capital			957,380				964,964
Retained earnings			2,086,276				2,038,812
Treasury stock, at cost (March 31, 2025 - 60,558,935 shares and December 31, 2024 - 59,794,239 shares)			(804,185	)			(790,350	)
Accumulated other comprehensive loss			(482,495	)			(566,556	)
Total stockholdersʼ equity			1,779,342				1,669,236
Total liabilities and stockholdersʼ equity		$	19,106,983			$	19,292,921

		Quarter Ended
		March 31, 2025				December 31, 2024				March 31, 2024
(In thousands, except per share information)
Net interest income:
Interest income		$	277,065			$	279,728			$	268,505
Interest expense			64,668				70,461				71,985
Net interest income			212,397				209,267				196,520
Provision for credit losses - expense (benefit):
Loans			24,837				21,544				12,917
Unfunded loan commitments			(63	)			(318	)			281
Debt securities			36				(322	)			(1,031	)
Provision for credit losses - expense			24,810				20,904				12,167
Net interest income after provision for credit losses			187,587				188,363				184,353
Non-interest income:
Service charges and fees on deposit accounts			9,640				9,748				9,662
Mortgage banking activities			3,177				3,183				2,882
Card and processing income			11,475				12,155				11,312
Other non-interest income			11,442				7,113				10,127
Total non-interest income			35,734				32,199				33,983
Non-interest expenses:
Employees’ compensation and benefits			62,137				59,652				59,506
Occupancy and equipment			22,630				22,771				21,381
Business promotion			3,278				5,328				3,842
Professional service fees			11,486				11,810				12,676
Taxes, other than income taxes			5,878				5,994				5,129
FDIC deposit insurance			2,236				2,236				3,102
Net gain on OREO operations			(1,129	)			(1,074	)			(1,452	)
Credit and debit card processing expenses			5,110				7,147				5,751
Other non-interest expenses			11,396				10,669				10,988
Total non-interest expenses			123,022				124,533				120,923
Income before income taxes			100,299				96,029				97,413
Income tax expense			23,240				20,328				23,955
Net income		$	77,059			$	75,701			$	73,458
Net income attributable to common stockholders		$	77,059			$	75,701			$	73,458
Earnings per common share:
Basic		$	0.47			$	0.46			$	0.44
Diluted		$	0.47			$	0.46			$	0.44

		Quarter Ended
		March 31, 2025				December 31, 2024				March 31, 2024
(Shares in thousands)
Per Common Share Results:
Net earnings per share - basic		$	0.47			$	0.46			$	0.44
Net earnings per share - diluted		$	0.47			$	0.46			$	0.44
Cash dividends declared		$	0.18			$	0.16			$	0.16
Average shares outstanding			162,934				163,084				167,142
Average shares outstanding diluted			163,749				163,893				167,798
Book value per common share		$	10.91			$	10.19			$	8.88
Tangible book value per common share (1)		$	10.64			$	9.91			$	8.58
Common stock price: end of period		$	19.17			$	18.59			$	17.54
Selected Financial Ratios (In Percent):
Profitability:
Return on average assets			1.64				1.56				1.56
Return on average equity			17.90				17.77				19.56
Interest rate spread (2)			3.79				3.55				3.35
Net interest margin (2)			4.65				4.44				4.27
Efficiency ratio (3)			49.58				51.57				52.46
Capital and Other:
Average total equity to average total assets			9.14				8.80				7.99
Total capital			17.96				18.02				18.36
Common equity Tier 1 capital			16.62				16.32				15.90
Tier 1 capital			16.62				16.32				15.90
Leverage			11.20				11.07				10.65
Tangible common equity ratio (1)			9.10				8.44				7.59
Dividend payout ratio			38.06				34.47				36.41
Basic liquidity ratio (4)			18.76				17.27				19.60
Core liquidity ratio (5)			14.25				12.54				14.45
Loan to deposit ratio			75.44				75.64				74.48
Uninsured deposits, excluding fully collateralized deposits, to total deposits (6)			28.44				29.36				27.93
Asset Quality:
Allowance for credit losses for loans and finance leases to total loans held for investment			1.95				1.91				2.14
Net charge-offs (annualized) to average loans outstanding			0.68				0.78				0.37
Provision for credit losses for loans and finance leases to net charge-offs			115.47				87.58				115.66
Non-performing assets to total assets			0.68				0.61				0.69
Nonaccrual loans held for investment to total loans held for investment			0.78				0.69				0.76
Allowance for credit losses for loans and finance leases to total nonaccrual loans held for investment			251.13				278.90				283.54
Allowance for credit losses for loans and finance leases to total nonaccrual loans held for investment, excluding residential estate loans			365.41				439.39				437.28

(1)	Non-GAAP financial measures. Refer to Non-GAAP Disclosures and Statement of Financial Condition - Tangible Common Equity (Non-GAAP) above for additional information about the components and a reconciliation of these measures.

(2)	Non-GAAP financial measures reported on a tax-equivalent basis and excluding changes in the fair value of derivative instruments. Refer to Non-GAAP Disclosures and Table 4 below for additional information and a reconciliation of these measures.

(3)	Non-interest expenses to the sum of net interest income and non-interest income.

(4)	Defined as the sum of cash and cash equivalents, free high quality liquid assets that could be liquidated within one day, and available secured lines of credit with the FHLB to total assets.

(5)	Defined as the sum of cash and cash equivalents and free high quality liquid assets that could be liquidated within one day to total assets.

(6)	Exclude insured deposits not covered by federal deposit insurance.

		Quarter Ended
(Dollars in thousands)		March 31, 2025				December 31, 2024				March 31, 2024
Net Interest Income
Interest income - GAAP		$	277,065			$	279,728			$	268,505
Unrealized loss (gain) on derivative instruments			3				(3	)			(2	)
Interest income excluding valuations - non-GAAP			277,068				279,725				268,503
Tax-equivalent adjustment			6,232				5,226				4,813
Interest income on a tax-equivalent basis and excluding valuations - non-GAAP		$	283,300			$	284,951			$	273,316
Interest expense - GAAP		$	64,668			$	70,461			$	71,985
Net interest income - GAAP		$	212,397			$	209,267			$	196,520
Net interest income excluding valuations - non-GAAP		$	212,400			$	209,264			$	196,518
Net interest income on a tax-equivalent basis and excluding valuations - non-GAAP		$	218,632			$	214,490			$	201,331
Average Balances
Loans and leases		$	12,632,501			$	12,584,143			$	12,207,840
Total securities, other short-term investments and interest-bearing cash balances			6,444,016				6,592,411				6,720,395
Average interest-earning assets		$	19,076,517			$	19,176,554			$	18,928,235
Average interest-bearing liabilities		$	11,749,011			$	11,911,904			$	11,838,159
Average assets (1)		$	19,107,102			$	19,217,363			$	18,858,299
Average non-interest-bearing deposits		$	5,425,836			$	5,402,606			$	5,308,531
Average Yield/Rate
Average yield on interest-earning assets - GAAP			5.89	%			5.79	%			5.69	%
Average rate on interest-bearing liabilities - GAAP			2.23	%			2.35	%			2.44	%
Net interest spread - GAAP			3.66	%			3.44	%			3.25	%
Net interest margin - GAAP			4.52	%			4.33	%			4.16	%
Average yield on interest-earning assets excluding valuations - non-GAAP			5.89	%			5.79	%			5.69	%
Average rate on interest-bearing liabilities			2.23	%			2.35	%			2.44	%
Net interest spread excluding valuations - non-GAAP			3.66	%			3.44	%			3.25	%
Net interest margin excluding valuations - non-GAAP			4.52	%			4.33	%			4.16	%
Average yield on interest-earning assets on a tax-equivalent basis and excluding valuations - non-GAAP			6.02	%			5.90	%			5.79	%
Average rate on interest-bearing liabilities			2.23	%			2.35	%			2.44	%
Net interest spread on a tax-equivalent basis and excluding valuations - non-GAAP			3.79	%			3.55	%			3.35	%
Net interest margin on a tax-equivalent basis and excluding valuations - non-GAAP			4.65	%			4.44	%			4.27	%

		Average Volume												Interest Income (1) / Expense												Average Rate (1)
Quarter Ended		March 31,				December 31,				March 31,				March 31,				December 31,				March 31,				March 31,				December 31,				March 31,
		2025				2024				2024				2025				2024				2024				2025				2024				2024
(Dollars in thousands)
Interest-earning assets:
Money market and other short-term investments		$	1,111,087			$	994,674			$	533,747			$	12,205			$	11,986			$	7,254				4.45	%			4.78	%			5.45	%
Government obligations (2)			1,971,327				2,248,155				2,684,169				6,970				7,681				9,053				1.43	%			1.36	%			1.35	%
MBS			3,308,964				3,295,492				3,451,293				17,497				15,685				15,238				2.14	%			1.89	%			1.77	%
FHLB stock			32,661				33,995				34,635				790				790				854				9.81	%			9.22	%			9.89	%
Other investments			19,977				20,095				16,551				247				160				66				5.01	%			3.16	%			1.60	%
Total investments (3)			6,444,016				6,592,411				6,720,395				37,709				36,302				32,465				2.37	%			2.18	%			1.94	%
Residential mortgage loans			2,841,918				2,832,473				2,810,304				41,484				41,574				40,473				5.92	%			5.82	%			5.78	%
Construction loans			232,295				228,438				218,854				5,596				5,351				4,537				9.77	%			9.29	%			8.32	%
C&I and commercial mortgage loans			5,806,929				5,775,301				5,504,782				99,759				102,720				99,074				6.97	%			7.06	%			7.22	%
Finance leases			901,768				894,116				863,685				17,854				17,546				17,127				8.03	%			7.79	%			7.95	%
Consumer loans			2,849,591				2,853,815				2,810,215				80,898				81,458				79,640				11.51	%			11.32	%			11.37	%
Total loans (4) (5)			12,632,501				12,584,143				12,207,840				245,591				248,649				240,851				7.88	%			7.84	%			7.91	%
Total interest-earning assets		$	19,076,517			$	19,176,554			$	18,928,235			$	283,300			$	284,951			$	273,316				6.02	%			5.90	%			5.79	%
Interest-bearing liabilities:
Time deposits		$	3,048,778			$	3,042,752			$	2,892,355			$	25,468			$	26,946			$	24,410				3.39	%			3.51	%			3.39	%
Brokered CDs			483,774				485,176				749,760				5,461				5,907				9,680				4.58	%			4.83	%			5.18	%
Other interest-bearing deposits			7,693,900				7,777,387				7,534,344				27,568				29,854				28,935				1.45	%			1.52	%			1.54	%
Securities sold under agreements to repurchase			-				976				-				-				12				-				0.00	%			4.88	%			0.00	%
Advances from the FHLB			468,667				500,217				500,000				5,190				5,674				5,610				4.49	%			4.50	%			4.50	%
Other borrowings			53,892				105,396				161,700				981				2,068				3,350				7.38	%			7.78	%			8.31	%
Total interest-bearing liabilities		$	11,749,011			$	11,911,904			$	11,838,159			$	64,668			$	70,461			$	71,985				2.23	%			2.35	%			2.44	%
Net interest income														$	218,632			$	214,490			$	201,331
Interest rate spread																											3.79	%			3.55	%			3.35	%
Net interest margin																											4.65	%			4.44	%			4.27	%

(1)

Non-GAAP financial measures reported on a tax-equivalent basis. The tax-equivalent yield was estimated by dividing the interest rate spread on exempt assets by 1 less the Puerto Rico statutory tax rate of 37.5% and adding to it the cost of interest-bearing liabilities. When adjusted to a tax-equivalent basis, yields on taxable and exempt assets are comparable. Changes in the fair value of derivative instruments are excluded from interest income because the changes in valuation do not affect interest paid or received. Refer to Non-GAAP Disclosures - Non-GAAP Financial Measures and Table 4 above for additional information and a reconciliation of these measures.

(2)	Government obligations include debt issued by government-sponsored agencies.

(3)	Unrealized gains and losses on available-for-sale debt securities are excluded from the average volumes.

(4)	Average loan balances include the average of non-performing loans.

(5)

Interest income on loans includes $5.4 million, $3.9 million, and $3.2 million, for the quarters ended March 31, 2025, December 31, 2024, and March 31, 2024, respectively, of income from prepayment penalties and late fees related to the Corporation’s loan portfolio. The results for the first quarter of 2025 include the aforementioned prepayment penalties associated with the payoff of a $73.8 million commercial mortgage loan and higher income from late fees in the consumer loans and finance leases portfolios.

		As of March 31, 2025
		Puerto Rico				Virgin Islands				United States				Consolidated
(In thousands)
Residential mortgage loans		$	2,181,346			$	153,307			$	503,193			$	2,837,846
Commercial loans:
Construction loans			183,220				10,571				40,650				234,441
Commercial mortgage loans			1,706,319				75,083				720,287				2,501,689
C&I loans			2,140,246				149,032				1,070,590				3,359,868
Commercial loans			4,029,785				234,686				1,831,527				6,095,998
Finance leases			905,035				-				-				905,035
Consumer loans			2,762,208				68,833				5,478				2,836,519
Loans held for investment			9,878,374				456,826				2,340,198				12,675,398
Mortgage loans held for sale			14,713				-				-				14,713
Total loans		$	9,893,087			$	456,826			$	2,340,198			$	12,690,111

		As of December 31, 2024
		Puerto Rico				Virgin Islands				United States				Consolidated
(In thousands)
Residential mortgage loans		$	2,166,980			$	156,225			$	505,226			$	2,828,431
Commercial loans:
Construction loans			181,607				2,820				43,969				228,396
Commercial mortgage loans			1,800,445				67,449				698,090				2,565,984
C&I loans			2,192,468				133,407				1,040,163				3,366,038
Commercial loans			4,174,520				203,676				1,782,222				6,160,418
Finance leases			899,446				-				-				899,446
Consumer loans			2,781,182				69,577				7,502				2,858,261
Loans held for investment			10,022,128				429,478				2,294,950				12,746,556
Mortgage loans held for sale			14,558				434				284				15,276
Total loans		$	10,036,686			$	429,912			$	2,295,234			$	12,761,832

		As of March 31, 2025
(In thousands)		Puerto Rico				Virgin Islands				United States				Total
Nonaccrual loans held for investment:
Residential mortgage		$	15,081			$	6,820			$	8,892			$	30,793
Construction			396				960				-				1,356
Commercial mortgage			2,583				8,075				12,497				23,155
C&I			19,672				672				-				20,344
Consumer and finance leases			22,460				335				18				22,813
Total nonaccrual loans held for investment			60,192				16,862				21,407				98,461
OREO			12,265				3,615				-				15,880
Other repossessed property			13,309				127				8				13,444
Other assets (1)			1,599				-				-				1,599
Total non-performing assets (2)		$	87,365			$	20,604			$	21,415			$	129,384
Past due loans 90 days and still accruing (3)		$	34,056			$	3,061			$	-			$	37,117

		As of December 31, 2024
(In thousands)		Puerto Rico				Virgin Islands				United States				Total
Nonaccrual loans held for investment:
Residential mortgage		$	16,854			$	6,555			$	8,540			$	31,949
Construction			403				962				-				1,365
Commercial mortgage			2,716				8,135				-				10,851
C&I			19,595				919				-				20,514
Consumer and finance leases			22,538				205				45				22,788
Total nonaccrual loans held for investment			62,106				16,776				8,585				87,467
OREO			13,691				3,615				-				17,306
Other repossessed property			11,637				219				3				11,859
Other assets (1)			1,620				-				-				1,620
Total non-performing assets (2)		$	89,054			$	20,610			$	8,588			$	118,252
Past due loans 90 days and still accruing (3)		$	39,307			$	3,083			$	-			$	42,390

(1)	Residential pass-through MBS issued by the PRHFA held as part of the available-for-sale debt securities portfolio.

(2)

Excludes PCD loans previously accounted for under ASC Subtopic 310-30 for which the Corporation made the accounting policy election of maintaining pools of loans as “units of account” both at the time of adoption of CECL on January 1, 2020 and on an ongoing basis for credit loss measurement. These loans will continue to be excluded from nonaccrual loan statistics as long as the Corporation can reasonably estimate the timing and amount of cash flows expected to be collected on the loan pools. The portion of such loans contractually past due 90 days or more amounted to $5.7 million as of March 31, 2025 (December 31, 2024 - $6.2 million).

(3)

These include rebooked loans, which were previously pooled into GNMA securities, amounting to $6.4 million as of March 31, 2025 (December 31, 2024 - $5.7 million). Under the GNMA program, the Corporation has the option but not the obligation to repurchase loans that meet GNMA's specified delinquency criteria. For accounting purposes, the loans subject to the repurchase option are required to be reflected on the financial statements with an offsetting liability.

		Quarter Ended
		March 31, 2025				December 31, 2024				March 31, 2024
(Dollars in thousands)
Allowance for credit losses on loans and finance leases, beginning of period		$	243,942			$	246,996			$	261,843
Provision for credit losses on loans and finance leases expense			24,837				21,544				12,917
Net (charge-offs) recoveries of loans and finance leases:
Residential mortgage			(18	)			(305	)			(244	)
Construction			14				96				10
Commercial mortgage			40				59				40
C&I			77				(187	)			4,587
Consumer loans and finance leases (1)			(21,623	)			(24,261	)			(15,561	)
Net charge-offs (1)			(21,510	)			(24,598	)			(11,168	)
Allowance for credit losses on loans and finance leases, end of period		$	247,269			$	243,942			$	263,592
Allowance for credit losses on loans and finance leases to period end total      loans held for investment			1.95	%			1.91	%			2.14	%
Net charge-offs (annualized) to average loans outstanding during the period			0.68	%			0.78	%			0.37	%
Provision for credit losses on loans and finance leases to net charge-offs during the period			1.15	x			0.88	x			1.16	x

		Quarter Ended
		March 31, 2025				December 31, 2024				March 31, 2024
Residential mortgage			0.00	%			0.04	%			0.03	%
Construction			-0.02	%			-0.17	%			-0.02	%
Commercial mortgage			-0.01	%			-0.01	%			-0.01	%
C&I			-0.01	%			0.02	%			-0.58	%
Consumer loans and finance leases			2.31	%  (1)			2.59	%			1.69	%  (1)
Total loans			0.68	%  (1)			0.78	%			0.37	%  (1)

(1)

The aforementioned recoveries associated with the bulk sales of fully charged-off consumer loans and finance leases during the first quarters of 2025 and 2024 reduced the ratios of consumer loans and finance leases and total net charge-offs to related average loans for the quarter ended March 31, 2025 by 25 basis points and 8 basis points, respectively, and by 104 basis points and 31 basis points, respectively, for the quarter ended March 31, 2024.

		As of
		March 31, 2025				December 31, 2024
(In thousands)
Time deposits		$	3,124,391			$	3,007,144
Interest-bearing saving and checking accounts			7,586,288				7,838,498
Non-interest-bearing deposits			5,629,383				5,547,538
Total deposits, excluding brokered CDs (1)			16,340,062				16,393,180
Brokered CDs			482,467				478,118
Total deposits		$	16,822,529			$	16,871,298
Total deposits, excluding brokered CDs and government deposits		$	12,896,786			$	12,867,789

(1)	As of March 31, 2025, government deposits amounted to $3.4 billion, compared to $3.5 billion as of December 31, 2024.