First BanCorp. Posts Record Income. Credit Chief Sells.
First BanCorp. reported record pretax preprovision income of $138 million in Q2, with NIM expanding 12 basis points to 4.87% and $400 million in low-yielding securities maturing in H2 for repricing. A
FBP's Rate-Cut Play Runs Into Credit Speed Bumps
NEW YORK, August 30 —
First BanCorp. (FBP) reported a record $138 million in pretax preprovision income in Q2 and CFO Ortiz handed investors a concrete margin-expansion roadmap. The bank's Chief Credit Officer responded by selling $578,000 in shares across two August transactions, the second block $1.40 per share below the first. That sequence deserves more attention than the headline beat.
- Q2 net income rose 24% year over year to $0.63 per diluted share, the fourth consecutive analyst EPS beat.
- NIM expanded 12 basis points to 4.87% in Q2; $400 million in 1.92%-yielding securities mature in H2 for repricing.
- Early-stage delinquencies rose $32.9 million in Q2, with $20.7 million concentrated in auto and finance leases.
The Repricing Runway Is Real
FirstBank Puerto Rico originates residential mortgages, consumer and commercial loans, and automobile financing across Puerto Rico, Florida, and the U.S. Virgin Islands. The NIM expansion case is unusually mechanical: $400 million in securities yielding 1.92% mature in H2 2026 and can be reinvested at current market rates, with $1.2 billion total repricing over the next 18 months. CFO Ortiz guided 3 to 5 basis points of additional expansion per quarter through year-end assuming stable rates, with upside if the Federal Reserve moves. Eighteen consecutive quarters above 1.5% return on assets, reaching 2.02% in Q2 per the Q2 2026 earnings release, make the execution case credible; see First BanCorp.'s latest numbers.
The Credit Officer's Exit
The counterweight arrives in the auto book. Early-stage delinquencies rose $32.9 million quarter over quarter in Q2, with $20.7 million of that in auto and finance leases. CEO Alemán-Bermudez acknowledged that wholesale prices "continue to reflect the impact of tariff," connecting the trend to a 3% year-over-year decline in June 2026 auto industry sales. Net charge-offs fell to 49 basis points in Q2 from 65 in Q1, keeping losses contained. Against that, EVP and Chief Credit Officer Nayda Rivera sold 10,000 shares at $29.59 on August 17, then another 10,000 at $28.19 on August 26, $1.40 lower per share.
| Ticker | Mkt cap | Fwd P/E | 52-wk |
|---|---|---|---|
| FBP | $4.3B | 11.0x | +27.3% |
| OFG | $2.2B | 10.2x | +17.9% |
| BPOP | $10.8B | 9.8x | +35.5% |
| FCF | $2.1B | 10.6x | +17.9% |
| FFBC | $3.4B | 9.4x | +24.9% |
| FNB | $6.6B | 9.8x | +12.3% |
What Breaks the Thesis
The bull case rests on one condition: early-stage auto delinquencies must normalize before the repricing tailwind fully arrives. Q3 charge-off rates above 49 basis points would thin the credit cushion while NIM benefit is still accruing. Rivera's second sale at $28.19, nine days after the first at $29.59, is a time-stamped annotation from the executive whose job is to know the credit book. The efficiency ratio at 48.1% and loan originations up 21% year over year confirm the franchise is intact; the auto book will decide whether the NIM thesis earns its multiple. Run the free First BanCorp. deep-dive →
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Frequently Asked Questions
What were First BanCorp.'s Q2 2026 earnings results?
Net income rose 24% year over year to $0.63 per diluted share, the fourth consecutive analyst EPS beat. Pretax preprovision income reached a record $138 million, and return on assets came in at 2.02%, the eighteenth consecutive quarter above 1.5%.
Why did First BanCorp.'s chief credit officer sell shares?
EVP and Chief Credit Officer Nayda Rivera sold 10,000 shares at $29.59 on August 17, then another 10,000 at $28.19 on August 26, nine days later. The second block was priced $1.40 per share below the first, a pattern the article describes as a time-stamped annotation from the executive whose job is to know the credit book.
What is First BanCorp.'s net interest margin outlook?
CFO Ortiz guided 3 to 5 basis points of additional NIM expansion per quarter through year-end assuming stable rates. The near-term driver is $400 million in securities yielding 1.92% maturing in H2 2026, with $1.2 billion total repricing over the next 18 months.
Are First BanCorp. auto loan delinquencies rising?
Early-stage delinquencies rose $32.9 million quarter over quarter in Q2, with $20.7 million concentrated in auto and finance leases. CEO Alemán-Bermudez linked the trend to a 3% year-over-year decline in June 2026 auto industry sales, which he attributed to tariff-driven wholesale price pressure.
What is the main risk to First BanCorp.'s investment thesis?
The bull case requires early-stage auto delinquencies to normalize before the NIM repricing tailwind fully arrives. Q3 charge-off rates above the Q2 level of 49 basis points would thin the credit cushion while margin benefits are still accruing.
First BanCorp posted an all-time record $138 million in pretax preprovision income in Q2 2026 and guided net interest margin higher, backed by $400 million in low-yield securities set to reprice in the second half of the year. At the same time, early-stage auto loan delinquencies jumped $32.9 million and the bank's Chief Credit Officer sold $578,000 in shares across two August transactions at successively lower prices.