First BanCorp : Q1 2025
FBP
FIRST BANCORP. ANNOUNCES EARNINGS FOR THE QUARTER ENDED MARCH 31, 2025
SAN JUAN, Puerto Rico - April 24, 2025 - First BanCorp. (the "Corporation" or "First BanCorp.") (NYSE: FBP), the bank holding company for FirstBank Puerto Rico ("FirstBank" or "the Bank"), today reported a net income of $77.1 million, or $0.47 per diluted share, for the first quarter of 2025, compared to $75.7 million, or $0.46 per diluted share, for the fourth quarter of 2024, and $73.5 million, or $0.44 per diluted share, for the first quarter of 2024.
Aurelio Alemán, President and Chief Executive Officer of First BanCorp, commented: "We began the
Q1
Q4
Q1
year with another quarter of strong performance for the franchise highlighted by encouraging margin
2025
2024
2024
expansion, positive operating leverage, and solid profitability metrics. We produced $77 million in net
Financial Highlights (1)
income, grew pre-tax pre-provision income by 7% to $125 million, and posted a return on average assets
Net interest income
$212,397
$209,267
$196,520
of 1.64%. We enter 2025 from a position of strength, with strong capital levels, and ample experience
Provision for credit losses
24,810
20,904
12,167
navigating economic uncertainty while serving our clients and communities across all environments.
Non-interest income
35,734
32,199
33,983
Core customer deposits were up by $29 million during the quarter, inclusive of a $70 million increase in
Non-interest expenses
123,022
124,533
120,923
non-interest-bearing deposits. Consistent with our strategy, stable deposit trends enabled us to redeploy
Income before income taxes
100,299
96,029
97,413
investment portfolio cash flows towards higher-yielding assets while improving our funding profile by
Income tax expense
23,240
20,328
23,955
paying down higher-cost wholesale borrowings. Total loans were slightly down on a linked-quarter basis
Net income
$77,059
$75,701
$73,458
mostly due to the expected repayments of commercial loans during the quarter. Credit performance
remained relatively stable, and we continue to see consumer credit normalization trends, with consumer
Q1
Q4
Q1
loans in early delinquency down when compared to the prior quarter.
2025
2024
2024
Finally, as good stewards of capital, we first and foremost seek to use our capital to support business growth
Selected Financial Data (1)
Net interest margin
4.52%
4.33%
4.16%
opportunities and franchise investments for future growth. This quarter, our strong capital generation
profile allowed us to execute on capital action priorities by redeeming approximately $50.0 million of junior
Efficiency ratio
49.58%
51.57%
52.46%
subordinated debentures, resuming our common share repurchase program, and sustaining a competitive
Earnings per share - diluted
$0.47
$0.46
$0.44
dividend payout ratio. Despite increased concerns about global trade, tariffs, and other potential policy
Book value per share
$10.91
$10.19
$8.88
changes that will affect markets everywhere, we remain focused on our disciplined approach of delivering
Tangible book value per share (2)
$10.64
$9.91
$8.58
consistent results and creating value for all our stakeholders. Our teams have been tested by multiple
Return on average equity
17.90%
17.77%
19.56%
challenges over the past decade and have a proven track record of successfully managing unforeseen
conditions."
Return on average assets
1.64%
1.56%
1.56%
Results for the First Quarter of 2025 compared to the Fourth Quarter of 2024
Profitability
Balance
Sheet
Asset
Quality
Liquidity
and
Capital
Net income - $77.1 million, or $0.47 per diluted share compared to $75.7 million, or $0.46 per diluted share. Income before income taxes - $100.3 million compared to $96.0 million.
Adjusted pre-tax, pre-provision income (Non-GAAP)(2) - $125.1 million compared to $116.9 million.
Net interest income - $212.4 million compared to $209.3 million. The increase is net of a reduction of approximately $2.7 million associated with the effect of two less days in the first quarter of 2025. Net interest margin increased by 19 basis points to 4.52%, driven by a change in asset mix from lower-yielding investment securities to higher-yielding interest-earning assets and a decrease in the cost of interest-bearing deposits.
Provision for credit losses - $24.8 million compared to $20.9 million. The increase was mainly in the provision for the commercial and construction loan portfolios due to a deterioration in the economic outlook of the forecasted commercial real estate ("CRE"), partially offset by a decrease in the provision for the consumer loan and finance lease portfolios, which included $2.4 million in recoveries associated with a bulk sale of fully charged-off consumer loans and finance leases. The provision for the first quarter of 2025 also includes the impact of higher qualitative adjustments due to the uncertainty in the economic environment.
Non-interestincome - $35.7 million compared to $32.2 million. The increase was driven by $3.3 million in seasonal contingent insurance commissions recorded in the first quarter of 2025.
Non-interestexpenses - $123.0 million compared to $124.5 million. The efficiency ratio was 49.58%, compared to 51.57%.
Income taxes - $23.2 million compared to $20.3 million. 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.
Total loans - decreased by $71.7 million to $12.7 billion, mainly due to the payoff of a $73.8 million commercial mortgage loan in the Puerto Rico region. Total loan originations, other than credit card utilization activity, of $1.1 billion, down $463.1 million, mainly in commercial and construction loans.
Core deposits (other than brokered and government deposits) - increased by $29.0 million to $12.9 billion, which consists of growth of $75.0 million in the Puerto Rico region and $38.9 million in the Virgin Islands region, partially offset by a decrease of $84.9 million in the Florida region. This increase includes a $69.8 million increase in non-interest-bearing deposits.
Government deposits (fully collateralized) - decreased by $82.1 million to $3.4 billion, driven by a decline of $142.2 million in the Puerto Rico region, partially offset by a $57.4 million increase in the Virgin Islands region.
Allowance for credit losses ("ACL") coverage ratio - amounted to 1.95%, compared to 1.91%.
Annualized net charge-offsto average loans ratio decreased to 0.68%, compared to 0.78%, mainly due to an 8 basis points decrease due to the aforementioned bulk sale of fully charged-off consumer loans and finance leases.
Non-performingassets - increased by $11.1 million to $129.4 million, mainly due to the inflow to nonaccrual status of a $12.6 million commercial mortgage loan in the Florida region in the hospitality industry during the first quarter of 2025.
Liquidity - Cash and cash equivalents amounted to $1.3 billion, compared to $1.2 billion. When adding $1.4 billion of free high-quality liquid securities that could be liquidated or pledged within one day and $862.2 million in available lending capacity at the Federal Home Loan Bank ("FHLB"), available liquidity amounted to 18.76% of total assets, compared to 17.27%.
Capital - Redeemed $50.6 million of junior subordinated debentures, repurchased $21.8 million in common stock and declared $29.6 million in common stock dividends. Capital ratios exceeded required regulatory levels. The Corporation's estimated total capital, common equity tier 1 ("CET1") capital, tier 1 capital, and leverage ratios were 17.96%, 16.62%, 16.62%, and 11.20%, respectively, as of March 31, 2025. On a non- GAAP basis, the tangible common equity ratio(2) increased to 9.10% when compared to 8.44%, driven by earnings less dividends and repurchases of common stock and an $84.1 million increase in the fair value of available-for-sale debt securities due to changes in market interest rates, which is recognized as part of accumulated other comprehensive loss.
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 - Page 2 of 27
NET INTEREST INCOME
The following table sets forth information concerning net interest income for the last five quarters:
Quarter Ended
(Dollars in thousands)
March 31, 2025
December 31, 2024
September 30, 2024
June 30, 2024
March 31, 2024
Net Interest Income
Interest income
$
277,065
$
279,728
$
274,675
$
272,245
$
268,505
Interest expense
64,668
70,461
72,611
72,617
71,985
Net interest income
$
212,397
$
209,267
$
202,064
$
199,628
$
196,520
Average Balances
Loans and leases
$
12,632,501
$
12,584,143
$
12,354,679
$
12,272,816
$
12,207,840
Total securities, other short-term investments and interest-bearing cash balances
6,444,016
6,592,411
6,509,789
6,698,609
6,720,395
Average interest-earning assets
$
19,076,517
$
19,176,554
$
18,864,468
$
18,971,425
$
18,928,235
Average interest-bearing liabilities
$
11,749,011
$
11,911,904
$
11,743,122
$
11,868,658
$
11,838,159
Average Yield/Rate
Average yield on interest-earning assets - GAAP
5.89%
5.79%
5.78%
5.76%
5.69%
Average rate on interest-bearing liabilities - GAAP
2.23%
2.35%
2.45%
2.45%
2.44%
Net interest spread - GAAP
3.66%
3.44%
3.33%
3.31%
3.25%
Net interest margin - GAAP
4.52%
4.33%
4.25%
4.22%
4.16%
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:
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 - Page 3 of 27
Partially offset by:
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:
Quarter Ended
March 31,2025
December 31, 2024
September 30, 2024
June 30, 2024
March 31,2024
(In thousands)
Service charges and fees on deposit accounts
$
9,640
$
9,748
$
9,684
$
9,725
$
9,662
Mortgage banking activities
3,177
3,183
3,199
3,419
2,882
Insurance commission income
5,805
2,274
3,003
2,786
5,507
Card and processing income
11,475
12,155
11,768
11,523
11,312
Other non-interest income
5,637
4,839
4,848
4,585
4,620
Non-interest income
$
35,734
$
32,199
$
32,502
$
32,038
$
33,983
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.
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 - Page 4 of 27
NON-INTEREST EXPENSES
The following table sets forth information concerning non-interest expenses for the last five quarters:
Quarter Ended
March 31,2025
December 31, 2024
September 30, 2024
June 30, 2024
March 31,2024
(In thousands)
Employees' compensation and benefits
$
62,137
$
59,652
$
59,081
$
57,456
$
59,506
Occupancy and equipment
22,630
22,771
22,424
21,851
21,381
Business promotion
3,278
5,328
4,116
4,359
3,842
Professional service fees:
Collections, appraisals and other credit-related fees
598
956
688
1,149
1,366
Outsourcing technology services
7,921
7,499
7,771
7,698
7,469
Other professional fees
2,967
3,355
4,079
3,584
3,841
Taxes, other than income taxes
5,878
5,994
5,665
5,408
5,129
FDIC deposit insurance
2,236
2,236
2,164
2,316
3,102
Other insurance and supervisory fees
1,551
1,967
2,092
2,287
2,293
Net gain on OREO operations
(1,129)
(1,074)
(1,339)
(3,609)
(1,452)
Credit and debit card processing expenses
5,110
7,147
7,095
7,607
5,751
Communications
2,245
2,251
2,170
2,261
2,097
Other non-interest expenses
7,600
6,451
6,929
6,315
6,598
Total non-interest expenses
$
123,022
$
124,533
$
122,935
$
118,682
$
120,923
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.
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 - Page 5 of 27
CREDIT QUALITY
Non-Performing Assets
The following table sets forth information concerning non-performing assets for the last five quarters:
(Dollars in thousands)
March 31,2025
December 31, 2024
September 30, 2024
June 30, 2024
March 31,2024
Nonaccrual loans held for investment:
Residential mortgage
$
30,793
$
31,949
$
31,729
$
31,396
$
32,685
Construction
1,356
1,365
4,651
4,742
1,498
Commercial mortgage
23,155
10,851
11,496
11,736
11,976
Commercial and industrial ("C&I")
20,344
20,514
18,362
27,661
25,067
Consumer and finance leases
22,813
22,788
23,106
20,638
21,739
Total nonaccrual loans held for investment
$
98,461
$
87,467
$
89,344
$
96,173
$
92,965
OREO
15,880
17,306
19,330
21,682
28,864
Other repossessed property
13,444
11,859
8,844
7,513
6,226
Other assets (1)
1,599
1,620
1,567
1,532
1,551
Total non-performing assets (2)
$
129,384
$
118,252
$
119,085
$
126,900
$
129,606
Past due loans 90 days and still accruing (3)
$
37,117
$
42,390
$
43,610
$
47,173
$
57,515
Nonaccrual loans held for investment to total loans held for investment
0.78%
0.69%
0.72%
0.78%
0.76%
Nonaccrual loans to total loans
0.78%
0.69%
0.72%
0.78%
0.75%
Non-performing assets to total assets
0.68%
0.61%
0.63%
0.67%
0.69%
Variances in credit quality metrics:
Partially offset by:
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 - Page 6 of 27
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:
• Commercial and construction loans in early delinquency increased by $1.6 million to $3.8 million.
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 - Page 7 of 27
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:
Quarter Ended March 31,2025
Loans and Finance Leases
Debt Securities
(Dollars in thousands)
Residential
Commercial
Consumer
Total Loans
Unfunded
Mortgage
and
Loans and
and Finance
Loans
Held-to-
Available-
Allowance for Credit Losses
Loans
Construction
Finance
Leases
Commitments
Maturity
for-Sale
Total ACL
Allowance for credit losses, beginning balance
$
40,654
$
59,305
$
143,983
$
243,942
$
3,143
$
802
$
521
$
248,408
Provision for credit losses - expense (benefit)
1,004
4,588
19,245
24,837
(63)
41
(5)
24,810
Net (charge-offs) recoveries
(18)
131
(21,623)
(21,510)
-
-
-
(21,510)
Allowance for credit losses, end of period
$
41,640
$
64,024
$
141,605
$
247,269
$
3,080
$
843
$
516
$
251,708
Amortized cost of loans and finance leases
$ 2,837,846
$
6,095,998
$
3,741,554
$
12,675,398
Allowance for credit losses on loans to amortized cost
1.47%
1.05%
3.78%
1.95%
Quarter Ended December 31, 2024
Loans and Finance Leases
Debt Securities
(Dollars in thousands)
Residential
Commercial
Consumer
Total Loans
Unfunded
Mortgage
and
Loans and
and Finance
Loans
Held-to-
Available-
Allowance for Credit Losses
Loans
Construction
Finance
Leases
Commitments
Maturity
for-Sale
Total ACL
Allowance for credit losses, beginning balance
$
40,651
$
63,302
$
143,043
$
246,996
$
3,461
$
1,119
$
526
$
252,102
Provision for credit losses - expense (benefit)
308
(3,965)
25,201
21,544
(318)
(317)
(5)
20,904
Net charge-offs
(305)
(32)
(24,261)
(24,598)
-
-
-
(24,598)
Allowance for credit losses, end of period
$
40,654
$
59,305
$
143,983
$
243,942
$
3,143
$
802
$
521
$
248,408
Amortized cost of loans and finance leases
$ 2,828,431
$
6,160,418
$
3,757,707
$
12,746,556
Allowance for credit losses on loans to amortized cost
1.44%
0.96%
3.83%
1.91%
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:
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 - Page 8 of 27
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:
Quarter Ended
March 31,2025
December 31, 2024
September 30, 2024
June 30, 2024
March 31,2024
Residential mortgage
0.00%
0.04%
-0.01%
0.01%
0.03%
Construction
-0.02%
-0.17%
-0.02%
-0.02%
-0.02%
Commercial mortgage
-0.01%
-0.01%
-0.01%
-0.07%
-0.01%
C&I
-0.01%
0.02%
0.15%
-0.08%
-0.58%
Consumer loans and finance leases
2.31%
(1)
2.59%
2.46%
2.38%
1.69%
(1)
Total loans
0.68%
(1)
0.78%
0.78%
0.69%
0.37%
(1)
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.
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 - Page 9 of 27
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:
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 - Page 10 of 27
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.
Disclaimer
First BanCorp published this content on April 24, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 24, 2025 at 12:06 UTC.