First BanCorp.: 3 Key Takeaways for Long-Term Investors
On its third-quarter 2026 earnings call, held on Oct. 22, 2026, First BanCorp. (FBP +0.07%) announced a 25% dividend increase and a $350 million share repurchase authorization. Steady earnings generation gives the bank room to return capital to shareholders while protecting its balance sheet against higher funding costs. Three takeaways from management’s remarks show how the business navigates changing interest rates.
1. Massive Stock Buybacks and Dividend Hikes Put Capital First
Capital generation remains a key strength for the bank, enabling $80 million in shareholder returns during the third quarter. With a CET1 ratio, a measure of core bank solvency, standing at 16.9%, management has ample room to return cash directly to owners.
As we disclosed yesterday in a separate press release, we are very pleased that our board approved a 25% increase on our quarterly common dividend and a $350 million stock buyback authorization.
— Aurelio Alemán, President and Chief Executive Officer
2. Investment Portfolio Repricing Protects Profitability From Funding Costs
Rising deposit competition continues to push borrowing costs higher across the banking sector. The bank defends its profit margins by rolling mature, low-yielding securities into fresh, higher-yielding investments as loans reprice.
We expect continued deposit competition and loan pricing dynamics to remain headwinds while our investment portfolio repricing opportunity, which for the fourth quarter are approximately $252 million at an average yield of 2.23%… should provide support if rates continue to move higher as expected.
— Said Ortiz, Chief Financial Officer
3. Commercial Lending Expansion Drives Overall Portfolio Growth
Management intentionally shifted lending focus away from shrinking consumer loan demand and toward commercial projects. Real estate development, corporate acquisitions, and business expansions increased total loan balances despite higher borrowing costs.
Loan growth was broad-based across our market, but particularly within the commercial segment, with total loans increasing at a 3.3% annualized linked quarter rate. Consumer loans actually declined a bit as we have forecasted.
— Aurelio Alemán, President and Chief Executive Officer
Looking Ahead
Reconstruction work and low unemployment in Puerto Rico keep commercial activity moving forward. A low non-performing asset ratio, which measures the portion of loans near default, gives management confidence to expand market share carefully.
As we move to the final quarter, priorities remain clear. Selective grow market share, maintain strong profitability, drive operating leverage, and continue enhancing the customer experience through technology and AI.
— Aurelio Alemán, President and Chief Executive Officer
Investments in digital banking tools and disciplined credit underwriting position the franchise to generate resilient returns over the long haul.
The combination of these achievements, the asset quality, significant excess capital, position us well to continue executing on our priorities, creating long-term value for our shareholders.
— Aurelio Alemán, President and Chief Executive Officer
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