third quarter of 2026
Filed Oct 22, 2026First BanCorp. reported third-quarter 2026 net income of $96.1 million, or $0.63 per diluted share, as loan and core-deposit growth were offset by lower net interest income, higher expenses, and rising consumer credit costs.
Profitability remained high, with return on average assets of 1.98% and return on average equity of 19.46%, while loans and core deposits grew. However, net interest income and net interest margin declined sequentially, non-interest expenses increased, and consumer loan and finance lease charge-offs, early delinquencies, and nonaccrual inflows increased.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net interest income, third quarter of 2026GAAP | $227.5M | a decrease of $1.6 million | – |
| Interest income, third quarter of 2026GAAP | $290.8M | – | – |
| Interest expense, third quarter of 2026GAAP | 63,318 | – | – |
| Net interest margin, third quarter of 2026GAAP | 4.73% | – | – |
| Net interest margin, third quarter of 2026non-GAAP | 5.03% | – | – |
| Provision for credit losses, third quarter of 2026GAAP | 14,633 | – | – |
| Non-interest income, third quarter of 2026GAAP | 32,590 | a decrease of $3.1 million | – |
| Service charges and fees on deposit accounts, third quarter of 2026GAAP | 9,839 | – | – |
| Mortgage banking activities, third quarter of 2026GAAP | 3,694 | – | – |
| Insurance commission income, third quarter of 2026other | 2,884 | – | – |
| Card and processing income, third quarter of 2026GAAP | 12,540 | – | – |
| Other non-interest income, third quarter of 2026other | 3,633 | – | – |
| Non-interest expenses, third quarter of 2026GAAP | 130,222 | an increase of $2.9 million | – |
| Employees’ compensation and benefits, third quarter of 2026GAAP | 64,286 | – | – |
| Occupancy and equipment, third quarter of 2026GAAP | 22,299 | – | – |
| Business promotion, third quarter of 2026GAAP | 4,254 | – | – |
| Professional service fees, third quarter of 2026GAAP | 11,435 | – | – |
| Taxes, other than income taxes, third quarter of 2026GAAP | 6,233 | – | – |
| FDIC deposit insurance, third quarter of 2026GAAP | 2,156 | – | – |
| Net (gain) loss on OREO operations, third quarter of 2026GAAP | (766) | – | – |
| Credit and debit card processing expenses, third quarter of 2026GAAP | 9,457 | – | – |
| Other non-interest expenses, third quarter of 2026GAAP | 10,868 | – | – |
| Income before income taxes, third quarter of 2026GAAP | 115,262 | – | – |
| Adjusted pre-tax, pre-provision income, third quarter of 2026non-GAAP | $129.9M | -5.6% | – |
| Income tax expense, third quarter of 2026GAAP | 19,147 | – | – |
| Estimated annual effective tax rate, third quarter of 2026other | 20.5% | – | – |
| Net income, third quarter of 2026GAAP | $96.11M | – | – |
| Adjusted net income attributable to common stockholders, third quarter of 2026non-GAAP | $96.11M | – | – |
| Earnings per common share, diluted, third quarter of 2026GAAP | $ 0.63 | – | – |
| Adjusted earnings per share, diluted, third quarter of 2026non-GAAP | $ 0.63 | – | – |
| Return on average assets, third quarter of 2026other | 1.98% | – | – |
| Return on average equity, third quarter of 2026other | 19.46% | – | – |
| Efficiency ratio, third quarter of 2026other | 50.06% | – | – |
| Loans held for investment, September 30, 2026GAAP | 13,364,500 | increased by $108.3 million | – |
| Total deposits, September 30, 2026GAAP | 16,918,636 | increased by $49.1 million | – |
| Total deposits, excluding brokered CDs and government deposits, September 30, 2026other | 13,358,314 | increased by $120.4 million | – |
| Allowance for credit losses on loans and finance leases, September 30, 2026GAAP | $241.7M | – | – |
| Allowance for credit losses on loans and finance leases to total loans held for investment, September 30, 2026other | 1.81% | – | – |
| Net charge-offs, third quarter of 2026GAAP | $18.2M | $2.1 million increase | – |
| Net charge-offs to average loans outstanding, third quarter of 2026other | 0.55% | – | – |
| Total non-performing assets, September 30, 2026GAAP | $114.1M | increased by $0.2 million | – |
| Nonaccrual loans held for investment, September 30, 2026GAAP | $96.20M | – | – |
| Loans held for investment in early delinquency, September 30, 2026other | $155.5M | an increase of $12.1 million | – |
| Total assets, September 30, 2026GAAP | $19.25B | up $9.1 million | – |
| Cash and cash equivalents, September 30, 2026GAAP | $462.7M | decreased by $98.6 million | – |
| Total stockholders’ equity, September 30, 2026GAAP | $1.9B | a decrease of $101.3 million | – |
| Tangible common equity ratio, September 30, 2026non-GAAP | 9.55% | – | – |
| Common equity Tier 1 capital ratio, September 30, 2026other | 16.91% | – | – |
| Tier 1 capital ratio, September 30, 2026other | 16.91% | – | – |
| Total capital ratio, September 30, 2026other | 18.16% | – | – |
| Leverage ratio, September 30, 2026other | 11.71% | – | – |
| Net income, nine-month period ended September 30, 2026GAAP | $281.0M | – | – |
| Net interest income, nine-month period ended September 30, 2026GAAP | 677,614 | – | – |
| Net interest margin, nine-month period ended September 30, 2026GAAP | 4.78% | – | – |
| Provision for credit losses, nine-month period ended September 30, 2026GAAP | 49,239 | – | – |
| Non-interest income, nine-month period ended September 30, 2026GAAP | 106,007 | – | – |
| Non-interest expenses, nine-month period ended September 30, 2026GAAP | 384,651 | – | – |
| Diluted earnings per share, nine-month period ended September 30, 2026GAAP | $ 1.82 | – | – |
Capital returns
- Repurchased $50.0 million in common stock.
- Declared $30.4 million in common stock dividends.
- Cash dividends declared were $ 0.20 per common share for the third quarter of 2026.
- The Board of Directors approved a new $350 million stock repurchase program.
- The Board of Directors approved a 25% increase in the common stock dividend.
What drove it
- Total loans increased by $108.3 million to $13.4 billion, driven by commercial and industrial loan growth.
- Core deposits, excluding brokered and government deposits, increased by $120.4 million to $13.4 billion, mainly in the Puerto Rico region.
- The net interest income decrease reflected $3.4 million in purchase discount and deferred fee accelerations recognized during the second quarter of 2026 and an increase of $4.8 million in deposit costs.
- Higher commercial and construction loan balances, reinvestment of maturing debt securities in higher-yielding assets, and $1.3 million related to an additional day in the quarter partly offset net interest income pressure.
- The lower provision was mainly due to a $3.2 million reduction in the provision for residential mortgage loans.
- The lower estimated annual effective tax rate was mostly related to higher than previously forecasted business activities with preferential tax treatment under the Puerto Rico tax code.
Concerns
- Net interest margin decreased to 4.73% from 4.87%, reflecting a shift in interest-bearing deposit mix toward higher-yielding options and a 7 basis points reduction from prior-quarter purchase discount and deferred fee accelerations.
- Non-interest expenses included an additional $2.8 million contingency reserve involving a commercial OREO property in the U.S. Virgin Islands.
- Consumer loans and finance leases net charge-offs increased by $2.0 million, mainly in the auto loan portfolio.
- Loans in early delinquency increased by $12.1 million to $155.5 million, including a $6.8 million increase in consumer loans and finance leases, mainly auto loans.
- Inflows to nonaccrual consumer loans increased $5.6 million to $28.4 million.
- Adversely classified commercial and construction loans increased by $15.8 million to $103.0 million, driven by the downgrade of a $13.1 million participated C&I loan in the Florida region.
- Tangible common equity ratio decreased to 9.55% from 10.08%, mainly due to the decrease in the fair value of available-for-sale debt securities.
What to watch
- Interest-bearing deposit costs and the mix shift toward time deposits and brokered CDs.
- Whether commercial and construction loan growth and securities reinvestment yields offset the effect of lower purchase discount and deferred fee accelerations on net interest income.
- Consumer auto loan delinquencies, nonaccrual inflows, net charge-offs, and reserve requirements.
- The impact of the $119.4 million decrease in the fair value of available-for-sale debt securities on tangible common equity.
- Execution of the new $350 million stock repurchase program and the higher common stock dividend.
Balance sheet and cash flow
- Cash and cash equivalents amounted to $462.7 million compared to $561.3 million.
- Total core liquidity amounted to $2.6 billion as of September 30, 2026, or 13.40% of total assets, compared to $2. 7 billion, or 13.73% of total assets, as of June 30, 2026.
- Available liquidity amounted to 19.15% of total assets compared to 19.60%.
- The Corporation had $1.1 billion available for credit with the FHLB.
- The Corporation had approximately $2.5 billion available for funding under the FED’s Borrower-In-Custody Program as of September 30, 2026.
- In the aggregate, the Corporation had $6.2 billion available to meet liquidity needs, or 128% of estimated uninsured deposits.
- Estimated uninsured deposits were $4.8 billion, which represents 29.59% of total deposits, compared to $4.7 billion, or 29.15% of total deposits.
- A $119.4 million decrease in the fair value of available-for-sale debt securities was recognized as part of accumulated other comprehensive loss.
Analysis
First BanCorp. generated $96.1 million of third-quarter net income, essentially unchanged from $96.1 million in the second quarter, while diluted EPS increased to $0.63 from $0.62. Profitability remained elevated, with return on average assets of 1.98%, return on average equity of 19.46%, and a 50.06% efficiency ratio. Relative to the third quarter of 2025, net income was lower than $100.5 million, while reported diluted EPS was unchanged at $0.63.
Balance-sheet growth was led by commercial lending. Loans held for investment increased by $108.3 million to $13.4 billion, principally from C&I growth, including new loan participations in Florida and government line-of-credit disbursements in the Virgin Islands. Core deposits excluding brokered and government deposits increased by $120.4 million to $13.4 billion, but deposit composition shifted toward time deposits while non-maturity deposits declined. This funding mix contributed to an 8 basis point increase in the cost of funds and a sequential decline in net interest margin to 4.73% from 4.87%.
Earnings pressure came from a $1.6 million sequential decline in net interest income, a $3.1 million decline in non-interest income, and a $2.9 million increase in non-interest expenses. The second-quarter purchase discount and deferred fee accelerations reduced the comparability of net interest income, while deposit costs increased by $4.8 million. Non-interest expenses included an additional $2.8 million contingency reserve related to a commercial OREO property. A lower estimated annual effective tax rate reduced income tax expense to $19.2 million from $24.1 million.
Credit costs improved in aggregate as provision for credit losses declined to $14.6 million from $17.3 million, largely due to lower residential mortgage provisioning. However, consumer credit trends weakened: consumer loans and finance leases net charge-offs increased by $2.0 million, primarily in auto loans; total annualized net charge-offs rose to 0.55% from 0.49%; and early delinquencies increased to $155.5 million from $143.4 million. Non-performing assets were nearly flat at $114.1 million, but adversely classified commercial and construction loans increased to $103.0 million.
Capital deployment remained substantial. The company repurchased $50.0 million of common stock, declared $30.4 million of common dividends, approved a new $350 million stock repurchase program, and approved a 25% common dividend increase. Capital ratios remained above required regulatory levels, although total stockholders’ equity decreased by $101.3 million and the non-GAAP tangible common equity ratio declined to 9.55%, principally due to a $119.4 million decrease in the fair value of available-for-sale debt securities. The filing did not provide forward earnings, margin, expense, or credit guidance.
Management, verbatim
We delivered another quarter of strong core performance, highlighted by a return on average assets of 1.98%, a return on average equity of 19.5%, stable credit metrics, and healthy balance sheet trends against the backdrop of an increasingly volatile rate environment.
Aurelio Alemán, President and Chief Executive Officer of First BanCorp
Total loans grew 3.3% annualized on a linked-quarter basis, with growth across all our operating markets, particularly in the commercial segment, despite higher than prior quarter commercial repayments.
Aurelio Alemán, President and Chief Executive Officer of First BanCorp
We remain committed to thoughtful excess capital deployment while preserving flexibility to support organic growth and other franchise-enhancing opportunities.
Aurelio Alemán, President and Chief Executive Officer of First BanCorp
Not in the filing
stated, not guessed- Forward guidance for revenue, net interest income, net interest margin, expenses, tax rate, loan growth, deposit growth, provision for credit losses, capital returns, or other operating metrics was not provided.
- Prior-release outlook was not provided.
- Operating cash flow was not provided.
- Free cash flow was not provided.
- Revenue and gross margin are not applicable financial metrics for the bank and were not reported.
- Reportable operating segment revenue was not provided.
- Year-over-year percentage changes for the reported third-quarter income-statement metrics were not provided.
- GAAP adjusted operating income was not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.