First BanCorp: Margin Expansion and Record PPI Anchor Another Strong Quarter
Puerto Rico's largest regional bank posts all-time high pretax pre-provision income, raises margin guidance, and accelerates loan growth — while early-stage auto delinquencies begin to creep up.
FBP · Earnings Call · 2026-07-22
Record Profitability and a Higher-Margin Trajectory
First BanCorp's second-quarter 2026 results continued a theme of operational strength, with pretax pre-provision income reaching an all-time high of $138 million. The company grew earnings per share 24% year-over-year to $0.62, and return on average assets hit 2.0% — the 18th consecutive quarter above 1.5%. Much of the momentum came from net interest income, which rose 3.7% quarter-over-quarter, and management pointed to a more constructive rate backdrop. “We expect for the remainder of 2026 our margin to expand by 3 to 5 basis points per quarter out of the 4.80% base.” — Said Ortiz, Chief Financial Officer · 2026-07-22 That guidance marks a step up from the prior 2-3 basis points per quarter, and reflects the tailwind from securities repricing. Roughly $400 million of securities come due in the second half at an average yield of 1.92%, ready to be redeployed higher. “Yes. That's what we're shooting based on expectation of rate movements and portfolio movements.” — Orlando Berges-González, Chief Financial Officer · 2026-04-22 The prior call showed the earlier, more cautious stance, making the upgrade notable.Loan Growth and the Puerto Rico Tailwind
Loan growth accelerated to $13.3 billion, up 5% on a linked-quarter annualized basis, with originations jumping 21% year-over-year. The mix was broad — commercial, construction, C&I — and Puerto Rico's hospitality sector continues to outperform, with rising occupancy and ADRs drawing new investment. Aurelio highlighted that “investor confidence. This investment continue to show a very positive investor confidence in the island.” — Aurelio Alemán-Bermudez, President and Chief Executive Officer · 2026-07-22 That confidence is translating into the pipeline, and management reaffirmed the 3-5% full-year loan growth target. The bank also continues to benefit from on-shoring, though management cautions the near-term impact is more visible in construction and materials than in broader employment. The investor confidence theme is a recurring positive, supporting both hospitality and infrastructure deals.Credit Watch: Early Delinquencies Rise but Stay Contained
Credit metrics remained broadly stable, but early-stage delinquencies rose $32.9 million quarter-over-quarter, driven largely by a $20.7 million increase in the auto and finance-lease portfolios. Management attributed the spike to seasonality — the first quarter benefits from tax refunds — and noted that consumer early-stage delinquencies are actually down $10.3 million from December 2025. Said Ortiz reiterated that charge-offs improved 16 basis points to 49 basis points of average loans.The forward look remains stable, echoing the prior quarter's assessment: “We believe there's stability.” — Aurelio Aleman, President and Chief Executive Officer · 2026-01-27 While the auto book deserves close monitoring, the overall credit picture remains healthy.Early delinquency in the consumer portfolio, if we compare it to December 2025, it is actually lower by approximately $10.3 million.