First BanCorp combines Puerto Rico’s oligopoly economics, 4.87% NIM, excess capital, and repricing catalysts for compelling long-term upside despite rate and litigation risks.
Overview
First BanCorp (FBP) is the holding company for FirstBank Puerto Rico, a diversified regional bank operating across Puerto Rico, South Florida, and the U.S. and British Virgin Islands. Its six operating segments generate most revenue from net interest income, supplemented by mortgage banking, card, cash-management, and insurance fees. Puerto Rico contributes more than 80% of loan and deposit exposure, but the pending First Carolina Bancshares acquisition should expand mainland scale and diversify concentration. **Q2 2026 demonstrated strong operating momentum:** diluted EPS was $0.62, up 24% year over year and $0.08 above consensus; net income was $96.15 million; normalized NIM rose to 4.80%; and the GAAP NIM reached 4.87%. FBP’s 16.96% CET1 ratio and 48.07% efficiency ratio compare favorably with Popular and OFG. Shares closed at $28.86 on July 22 and trade at 12.17x trailing P/E and 2.27x tangible book, a premium to the 9.8x peer average justified by 2.02% ROA and 19.04% ROE. Near-term catalysts include securities repricing, upgraded NIM guidance, digital efficiencies, and First Carolina integration.