First BanCorp's Q1 2025: Key Contradictions in Loan Growth, Deposits, and Margins Unveiled

Loan and deposit growth expectations, deposit growth drivers, margin expansion expectations, balance sheet growth and deposit trends are the key contradictions discussed in First BanCorp's latest 2025Q1 earnings call.



Financial Performance and Margin Expansion:
- First BanCorp reported net income of $77 million, or $0.47 per share, for the first quarter of 2025, with a return on average assets of 1.64%.
- The net interest margin expanded by 19 basis points to 4.52%.
- This expansion was driven by a decrease in funding costs, lower-yielding cash flows from investments, and higher-yielding cash and investment securities.

Loan and Deposit Trends:
- Total loans were slightly down on a linked quarter basis, while originations were healthy at $1.2 million.
- Core deposit flows were stable, with noninterest-bearing deposits growing by $70 million.
- The stable deposit environment was despite two large deposits being pulled out early in the year, reflecting stability in the market.

Credit Quality and Management:
- The provision for credit losses increased by $4 million, primarily due to projected deterioration in the commercial real estate price index.
- Nonperforming assets increased by $11 million, with an inflow of $12.6 million in a nonaccrual commercial real estate loan in Florida.
- Credit quality metrics are holding up well, with early delinquencies in consumer credit trending down.

Capital Deployment and Shareholder Returns:
- The company repurchased $22 million in stock in the first quarter and plans to complete the goal of $50 million in the second quarter.
- Aurelio Alemán-Bermúdez, CEO, emphasized the opportunistic capital deployment strategy to improve franchise and shareholder value.
- The capital actions were supported by the redemption of debentures and a strong balance sheet position.