FBP - NYSE

First BanCorp.

First BanCorp.

FBP·NYSE

$23.66

-0.21%
Financial ServicesBanks - Regional

First BanCorp. operates as a bank holding company for FirstBank Puerto Rico that provides various financial services for retail, commercial, and institutional clients. The company operates through six segments: Commercial and Corporate Banking, Mortgage Banking, Consumer (Retail) Banking, Treasury and Investments, United States Operations, and Virgin Islands Operations. The Commercial and Corporate Banking segment offers commercial loans, including commercial real estate and construction loans and floor plan financings; and other products, such as cash management and business management services. The Mortgage Banking segment engages in the origination, sale, and servicing of various residential mortgage loans; acquisition and sale of mortgages in the secondary markets; and purchase of mortgage loans from other local banks and mortgage bankers. The Consumer (Retail) Banking segment provides auto, boat, credit card, and personal loans; lines of credit; deposit products comprising interest bearing and non-interest bearing checking and savings accounts, individual retirement accounts, and retail certificates of deposit (CDs); and finance leasing and insurance agency services. The Treasury and Investments segment offers funding and liquidity management services. The United States Operations segment provides checking, savings, and money market accounts, as well as retail CDs; traditional commercial and industrial, and commercial real estate loans; and internet banking, cash management, remote deposit capture, and automated clearing house, and transactions services. The Virgin Islands Operations segment is involved in consumer, commercial lending, and deposit-taking activities. The company operates 64 branches in Puerto Rico, 8 branches in the U.S. Virgin Islands and British Virgin Islands, and 11 branches in the state of Florida. First BanCorp. was founded in 1948 and is headquartered in San Juan, Puerto Rico.

StatementsValue Model

At a Glance

Live Snapshot
Market Cap$3.66B
EPS2.1600
P/E Ratio10.95
Earnings Date07/28/2026

Earnings Call Transcript

FBP • 2025 • Q2

Operator
Hello, and welcome, everyone, to the First BanCorp 2Q 2025 Financial Results. My name is Becky, and I'll be your operator today. [Operator Instructions] I will now hand over to your host, Ramon Rodriguez, IR Officer, to begin. Please go ahead.
Ramon Rodriguez
Thank you, Becky. Good morning, everyone, and thank you for joining First BanCorp's conference call and webcast to discuss the company's financial results for the second quarter of 2025. Joining you today from First BanCorp are Aurelio Aleman, President and Chief Executive Officer; and Orlando Berges, Executive Vice President and Chief Financial Officer. Before we begin today's call, it is my responsibility to inform you that this call may involve certain forward-looking statements such as projections of revenue, earnings and capital structure as well as statements on the plans and objectives of the company's business. The company's actual results could differ materially from the forward-looking statements made due to the important factors described in the company's latest SEC filings. The company assumes no obligation to update any forward-looking statements made during the call. If anyone does not already have a copy of the webcast presentation or press release, you can access them at our website at fbpinvestor.com. At this time, I'd like to turn the call over to our CEO, Aurelio Aleman.
Operator
[Operator Instructions] Our first question comes from Brett Rabatin from Hovde Group.
Brett D. Rabatin
Okay. That's helpful. And then just the comments on the deposit decline that seemed to be kind of high net worth or commercial. Any additional color there? Do you think that migration has run its course? Or can you give us any other color around what you're seeing on larger deposits?
Aurelio Aleman-Bermudez
There's a lot of moving parts, primarily, it's really recurring business purpose, actually, capital investments. There are some tax payments that took place. There is even settlements. There's a significant number of those variances that we saw this quarter, we believe are nonrecurring in nature. And there is some high-yielding seeking behaviors, too, in that very high balances segment. So -- but when you look at it, it was highly concentrated. As I mentioned, top 5 customers represented 120% and 25 customers, the overall variance is around 25 customers overall. So -- from the commercial segment itself. So -- on the retail side, very stable. Net-net, net customers are growing and net accounts are growing, which is an important metric that we follow.
Brett D. Rabatin
Okay. And then just on credit. I mean credit outside of the kind of the consumer is just really, really good. Would you guys expect the level of charge-offs to increase from here? Or do you think this is a sustainable level for the overall portfolio?
Aurelio Aleman-Bermudez
It's -- we believe it's sustainable to improving the trend on the charge-off for the consumer portfolios.
Operator
Our next question comes from Timur Braziler from Wells Fargo.
Timur Felixovich Braziler
Back on the deposit commentary. I think last quarter, the comments were that the deposit stability you're seeing more deposit stability versus the last couple of years. Were these outflows surprising? Is this kind of excess liquidity that you are expecting to leave at some point and it just culminated in 2Q? And then the comment on the 25 customers overall. Is that the total in this larger commercial segment? Or is that the total that made up the composition of the 2Q decline?
Aurelio Aleman-Bermudez
No, it's the total that made the composition of the decline. We have a lot more customers on that segment. It's just top customers that show variances altogether. Some of them were surprised because the movement took place, but some of them are just recurring business purposes that it just -- a lot of things that happened at the same time in the same quarter. Also tax events of tax payments on the April 2, we saw some of that. We believe most of them are not recurring. But obviously, you combine that with the higher for longer rates, that high-yielding behavior as long as rates are high, that high-yielding behavior will continue. And we do have certain parameters up to which point we compete also.
Timur Felixovich Braziler
Got it. And I guess as we look into 3Q specifically with your comments around maintaining the mid-single-digit loan guide, that implies some accelerating on the loan growth front. If I'm not mistaken, I think 3Q is a little bit more challenging from a deposit standpoint from seasonality. Can you just give us some parameters on what the expectation is internally for funding the second half loan growth?
Aurelio Aleman-Bermudez
The second half, we believe stability that we're going to achieve the stability in the deposits. There's -- again, there's some deltas on the government side that are difficult to predict when they come in and out. There are some variances sometimes in the government accounts, on the large accounts, money flowing in and flowing out in terms of some of the payments that come in from different funds. No tax delta should happen in the second half or minimal. We will say stability. Obviously, a lot of the liquidity that you're going to see coming in the second half, which Orlando mentioned, it's more than $1 billion from the cash flows on the investment portfolios that the primary objective is to deploy that in loans, not necessarily securities, but the excess will go back to securities.
Timur Felixovich Braziler
Got it. Okay. That's good color. And then just lastly for me on the loan growth. It's been a good start to the year out of the mainland just the composition that you're expecting in the second half of the year? Is that going to be more so from Puerto Rico on the commercial side? Or is the expectation still here that the mainland is going to drive much of the near-term loan growth?
Aurelio Aleman-Bermudez
It's a combination. It's a combination. Florida will continue to contribute as well as the Puerto Rico commercial sector is where we see most of the growth, stability in the consumer and actually some growth in the residential mortgage, which we already have achieved some this year.
Operator
Our next question comes from Steve Moss from Raymond James.
Operator
Our next question comes from Kelly Motta from KBW.
Kelly Ann Motta
I think maybe going back to the loan growth in the mid-single digits. You guys had some nice loan growth this quarter. It looks like, as you called out, a lot of it was in commercial and C&I. Just wondering if you were seeing any changes in the utilization rate and in terms of the loan growth in the back half of the year, how your expectations -- do you feel better about it than you did maybe at the same time 3 months ago. Just wondering kind of your overall level of confidence in the mid-single-digit loan growth and kind of any utilization rate factors that we should be considering here?
Aurelio Aleman-Bermudez
I can tell you the pipeline looks pretty good when we look at it today, actually a little better when we look at it at the beginning of this year or the end of the last year. So from that standpoint, we're pretty confident on the continuous movement of that pipeline into closing. Regarding line utilization, I don't have the data. I don't want to just do it from the top of my head. We can get back to you on that or the overall -- in our investor presentation when we update.
Kelly Ann Motta
Got it. That's helpful. And then just on a high level on the efficiency, you continue to kind of target that, I think, 52% efficiency ratio. And for the past several quarters now, you've been coming in quite below that. As we look ahead to next year, are there any significant investments in technology or things you're looking at to drive longer-term efficiencies that we should be considering when building out a longer-term expense run rate here?
Aurelio Aleman-Bermudez
Well, we've been doing -- we're making those investments for some time, and those will continue. I think we provided some highlights earlier in the year of completing important steps in our cloud migration and eliminating the mainframe that existed in Puerto Rico until the first quarter as an example. The adoption of cloud-based technology, the movement of everything that we still have in the open environment here will continue. Investment in additional self-service tools and functionality in the applications, the digital applications across different businesses and products, including mortgage, auto and deposits will continue. It's been a significant amount of the expense base for some time. So it will continue to be some -- obviously, process automation related as the new tools bring some AI components into it. So I will say we don't expect a big peak of those because we continue to sustain the levels that we've been doing, being very active in those investments like last year, the nCino platform implementation was one of them, some of the process automation and the risk management tools.
Operator
We currently have no further questions. So I'll hand back to Ramon Rodriguez for closing remarks.
Ramon Rodriguez
Thank you, everyone, for participating in today's call. We will be attending Raymond James Financial Services Conference in Chicago on September 3. We look forward to seeing a number of you at this event, and we greatly appreciate your continued support. Have a great day, and thank you.
Aurelio Aleman-Bermudez
Thank you all.
Transcript from July 22, 2025

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