Puerto Rico's First BanCorp Q2 profit rises on loan growth

Overview

• Puerto Rico bank holding company reported Q2 net income and EPS up both yr/yr and sequentially

• Net interest income rose, driven by commercial loan growth in Puerto Rico

• Company returned 84% of earnings to shareholders via dividends and buybacks in Q2

Outlook

• Company says loan growth and healthy pipeline support full-year growth objectives

• First BanCorp says it is monitoring consumer market conditions and seasonal delinquency trends

• Company says strong capital position enables continued strategic investment despite evolving economic environment

Result Drivers

• COMMERCIAL LOAN GROWTH - Q2 loan growth was driven primarily by commercial activity in Puerto Rico, with total loan originations up 21% yr/yr

• HIGHER NET INTEREST INCOME - Net interest income rose due to increased commercial and construction loan activity, redeployment into higher-yielding assets, and refinancing-related fee acceleration

• LOWER NET CHARGE-OFFS - Net charge-offs fell, mainly due to a $4.7 mln reduction in consumer loans and finance leases, especially in the auto loan portfolio

Company press release: ID:nBw41M5Bla

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy"

• Wall Street's median 12-month price target for First BanCorp is $28.50, about 3.1% above its July 21 closing price of $27.64

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 10 three months ago

Reuters Recommended Reads

• July 21 - OFG Bancorp Q2 EPS rises on loan growth, deposit strength

• July 21 - KeyCorp quarterly profit rises on interest income strength

• July 21 - Western Alliance Bancorp Q2 net income rises on loan growth

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)