First BanCorp Approves $350 Million Share Buyback and Raises Dividend 25%
Key Facts
First BanCorp’s board approved a new $350 million share repurchase programme and a 25% increase in the common stock dividend, combining capital returns to shareholders with continued funding for business growth. The company announced the decision on October 22, alongside results for the third quarter ended September 30, 2026. Chief Executive Aurelio Alemán said the company aims to "prudently deploy excess capital while maintaining flexibility to support organic growth." The decision came as loans grew sequentially, while net interest margin declined from the previous quarter. Results also showed a divergence between earnings per share and revenue compared with analyst estimates.
The repurchase programme is expected to be carried out during 2027 at management’s discretion, with the pace subject to market conditions. The board approved the new cash dividend as a 25% increase over the previous payout, payable on December 11, 2026, to shareholders of record on November 27. This schedule gives investors the ex-dividend and payment dates, while the buyback is spread over a longer period and the company has not set its pace in advance. The terms establish different timelines for share repurchases and the cash dividend. The announcement was not limited to a new programme: the company said it would be added to a previous authorization.
The company reported net income of $96.1 million in the third quarter, or $0.63 per diluted share, compared with equivalent net income of $96.1 million and earnings of $0.62 per share in the second quarter. A year earlier, the company posted net income of $100.5 million and earnings of $0.63 per share. According to Investing.com, the latest quarter’s earnings per share beat analysts’ estimate of $0.59, while revenue was $260.12 million against consensus of $274.67 million. After the results were announced, the stock rose 0.22% in after-hours trading on October 22, according to the site. These indicators show differing performance in earnings per share and revenue during the quarter.
In banking operations, total loans grew at a 3.3% annualized rate, calculated on a sequential basis, in the third quarter compared with the second quarter, with expansion across all operating markets, particularly in commercial lending. The company said the growth came despite higher commercial loan repayments than in the previous quarter. Core deposits, excluding brokered and government deposits, also rose by $120 million during the quarter. Non-performing assets remained relatively stable compared with the previous quarter. Management maintained its confidence in reaching the low end of its 2026 annual loan growth target range of 3% to 5%.
By contrast, net interest margin fell to 4.73% from 4.87% in the second quarter. The company attributed the decline to $3.4 million in interest income recorded in the previous quarter, along with an 8-basis-point increase in the cost of funds. The provision for credit losses was $14.6 million, compared with $17.3 million in the second quarter. The company said the lower provision was mainly related to a $3.2 million decline in the provision for residential mortgage loans. Non-performing assets remained relatively stable sequentially, according to the earnings release.
The company estimated its Common Equity Tier 1 capital ratio at 16.91% as of September 30, 2026, while its total capital ratio was 18.16%. These ratios provide context for the capital return decision, alongside the chief executive’s guidance on preserving flexibility to support organic growth and opportunities to strengthen the company’s business. In the market, the company’s shares closed at $27.42 on October 23, then at $27.38 on October 26 and $26.86 on October 27. They closed at $26.68 on October 28, before ending at $26.70 on October 29. These closing prices show the stock’s path in the sessions following the announcement without attributing the moves solely to the buyback or dividend.