KBRA Assigns BBB Rating to First BanCorp, Reflecting Strong Financial Foundation
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 01 2025
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Source: Newsfilter
- Rating Overview: KBRA assigns a BBB rating to First BanCorp (NASDAQ:FBP), indicating the company's solid market position in Puerto Rico and a relatively low-cost deposit base that supports its financial stability.
- Profitability Analysis: Despite the Fed's tightening cycle from 2022 to 2023, FBP's net interest margin (NIM) has shown resilience, reflecting its advantageous position in deposit pricing, which is expected to continue supporting overall earnings power.
- Capital Adequacy: FBP's Common Equity Tier 1 (CET1) ratio has remained in the 16%-17% range since acquiring Santander's Puerto Rican operations in 2020, demonstrating strong capital buffer capabilities amidst economic volatility and supporting future growth and acquisition opportunities.
- Enhanced Risk Management: The company's significant improvements in risk management, alongside the improving Puerto Rican economy, have driven ongoing enhancements in asset quality, with nonperforming assets (NPAs) decreasing significantly, thereby strengthening its competitive position in the market.
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Analyst Views on FBP
Wall Street analysts forecast FBP stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for FBP is 23.50 USD with a low forecast of 23.00 USD and a high forecast of 24.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
3 Analyst Rating
2 Buy
1 Hold
0 Sell
Moderate Buy
Current: 21.880
Low
23.00
Averages
23.50
High
24.00
Current: 21.880
Low
23.00
Averages
23.50
High
24.00
About FBP
First BanCorp. is a financial holding company. As of December 31, 2016, the Company controlled two subsidiaries: FirstBank Puerto Rico (the Bank or FirstBank) and FirstBank Insurance Agency, Inc. (FirstBank Insurance Agency). It operates in six segments: Commercial and Corporate Banking, which consists of lending and other services; Consumer (Retail) Banking, which consists of consumer lending and deposit-taking activities; Mortgage Banking, which consists of the origination, sale, and servicing of a range of residential mortgage loan products and related hedging activities; Treasury and Investments, which consists of treasury and investment management functions; United States Operations, which consists of all banking activities conducted by FirstBank on the United States mainland, and Virgin Islands Operations, which consists of banking activities conducted by FirstBank in the United States Virgin Islands and British Virgin Islands, including retail and commercial banking services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
First BanCorp Reports Record Q4 2025 Earnings with Strong Guidance
- Strong Performance: First BanCorp reported a net income of $87 million for Q4 2025, translating to $0.55 per share and an impressive return on assets of 1.8%, highlighting significant improvements in revenue and operational efficiency that further solidify its market position.
- Loan Growth: The bank originated $1.4 billion in loans during the quarter, with total loans increasing by $80 million, primarily driven by growth in commercial segments, which not only enhances client support capabilities but also lays a foundation for future revenue growth.
- Dividend Increase: The Board approved an 11% increase in the quarterly common stock dividend to $0.20 per share, reflecting a robust capital return strategy, with over 28% of outstanding shares repurchased since the buyback program began in 2021, demonstrating a strong commitment to shareholders.
- Outlook Guidance: Management anticipates organic loan growth of 3% to 5% in 2026 while maintaining a 52% or better efficiency ratio, indicating a focus on sustaining asset quality while continuing to prioritize profitability and shareholder returns.
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First BanCorp Reports Q4 Earnings Beat Expectations
- Earnings Performance: First BanCorp's Q4 GAAP EPS of $0.55 exceeded expectations by $0.04, demonstrating robust profitability growth amid challenging market conditions.
- Stable Revenue Growth: The company reported revenue of $257.17 million, reflecting a 6.5% year-over-year increase, aligning with market expectations and indicating stable business performance.
- Increased Credit Loss Reserves: The provision for credit losses rose to $23 million from $17.6 million a year earlier, highlighting the company's cautious approach to potential credit risks in its portfolio.
- Significant Core Deposit Growth: Core deposits, excluding brokered and government deposits, increased by $266.5 million to $13.1 billion, primarily driven by non-interest-bearing deposits in the Puerto Rico region, thereby strengthening the company's funding base.
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