First Bancorp’s Earnings Call Highlights Robust Growth

First Bancorp (FBP) ((FBP)) has held its Q3 earnings call. Read on for the main highlights of the call.

In the latest earnings call, First Bancorp (FBP) conveyed a generally positive sentiment, underscored by robust financial performance. The company reported significant achievements in net income growth, loan expansion, and shareholder returns. However, challenges such as a slowdown in consumer credit demand and increased competitive pressure in the deposit market were acknowledged. Despite these hurdles, the overall tone remained optimistic due to strong financial metrics and strategic growth plans.

Strong Financial Performance

First Bancorp showcased a strong financial performance with net income reaching $100 million, or $0.63 per share, up from $80 million or $0.50 per share in the previous quarter. The return on average assets for the quarter was 2.1%, significantly higher than the prior quarter, highlighting the company’s effective financial management.

Record Loan Growth

The company achieved record loan growth, with total loans increasing by $181 million, surpassing $13 billion for the first time since 2010. This represents a 5.6% linked quarter annualized growth rate, demonstrating the company’s ability to expand its lending operations successfully.

Shareholder Returns

In a move to enhance shareholder value, the Board authorized an additional $200 million share buyback program, with plans to repurchase approximately $50 million per quarter through 2026. This initiative underscores the company’s commitment to returning capital to its shareholders.

Improvement in Asset Quality

First Bancorp reported a 7% reduction in nonperforming assets, with consumer charge-offs stabilizing. This improvement in asset quality reflects the company’s prudent risk management and focus on maintaining a healthy balance sheet.

Tax Legislation Benefit

The company benefited from a $16.6 million reversal of a valuation allowance on deferred tax assets due to new tax legislation in Puerto Rico, which positively impacted its financial results.

Slowdown in Consumer Credit Demand

There was a noted slowdown in consumer credit demand, particularly in the auto industry, with auto loan origination negatively impacted by sector-specific tariffs. Third-quarter sales were down 17% compared to the previous year, posing a challenge for future growth.

Increased Competitive Pressure

First Bancorp faced increased competition in the deposit markets, especially from smaller players. This led to a 15 basis point increase in the cost of government deposits, highlighting the competitive pressures in the market.

Provision for Credit Losses

The provision for credit losses was $17.6 million, including a $2.8 million valuation allowance for commercial other real estate property in the Virgin Islands due to ongoing litigation, indicating the company’s cautious approach to potential risks.

Forward-Looking Guidance

Looking ahead, First BanCorp expects loan growth to be between 3% and 4% for the year and plans to provide updated guidance in January 2026. The company delivered strong financial results in the third quarter of 2025, with adjusted earnings per share increasing by 13% compared to the previous year. Despite a slowdown in consumer credit demand, the company maintained stable asset quality and improved capital ratios, supporting its $50 million share repurchase plan.

In conclusion, First Bancorp’s earnings call highlighted a positive outlook, driven by strong financial performance and strategic initiatives. While challenges such as consumer credit demand slowdown and competitive pressures were acknowledged, the company’s robust financial metrics and growth plans provide a solid foundation for future success.