First BanCorp (FBP) investor relations material

Executive summary

• Net income for Q2 2026 was $96.1 million ($0.62 per diluted share), up 24% year-over-year and 8% sequentially, reflecting strong profitability and operational discipline.

• Adjusted pre-tax, pre-provision income reached a record $137.5 million, up 11% year-over-year and 4.6% sequentially, with an efficiency ratio improvement to 48.07%.

• Total loans grew 5.2% annualized to $13.3 billion, led by commercial growth in Puerto Rico; deposit inflows were robust, mainly from government sources.

• Asset quality remained stable, with non-performing assets at 0.59% of total assets, and net charge-offs down to 0.49% of average loans.

• Capital position remains robust, with CET1 at 17% and tangible book value per share up to $12.68.

Financial highlights

• Net interest income was $229.1 million, up $8.1 million from Q1 2026, driven by higher yields and loan growth.

• Net interest margin increased to 4.87% from 4.75% in Q1 2026, aided by asset mix improvements and refinancing activities.

• Non-interest income was $35.7 million, down $2.0 million sequentially due to lower insurance commissions, partially offset by higher card processing income.

• Non-interest expenses were $127.3 million, flat sequentially, with lower payroll/compensation offset by higher card processing and business promotion expenses.

• Efficiency ratio improved to 48.07% from 49.14% in Q1 2026.

Outlook and guidance

• Management targets 3%-5% organic loan growth for 2026, with expectations for continued strong activity in the second half.

• Net interest margin expected to expand by 3-5 basis points per quarter for the remainder of 2026, assuming no rate cuts.

• Quarterly expense base projected between $128 million-$130 million, with efficiency ratio likely at the lower end of the 50%-52% range.

• Focus remains on operational leverage, asset quality, and digital transformation to enhance customer experience.

• Management aims to return close to 100% of annual earnings to shareholders.