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FBP

First BanCorp NYSE:FBP Stock Report

Last Price

US$13.87

Market Cap

US$2.6b

7D

-3.9%

1Y

8.3%

Updated

24 Sep, 2022

Data

Company Financials +
FBP fundamental analysis
Snowflake Score
Valuation6/6
Future Growth0/6
Past Performance5/6
Financial Health6/6
Dividends2/6

FBP Stock Overview

First BanCorp. operates as a bank holding company for FirstBank Puerto Rico that provides various financial services for retail, commercial, and institutional clients.

First BanCorp Competitors

Price History & Performance

Summary of all time highs, changes and price drops for First BanCorp
Historical stock prices
Current Share PriceUS$13.87
52 Week HighUS$16.62
52 Week LowUS$11.94
Beta1.17
1 Month Change-9.11%
3 Month Change3.28%
1 Year Change8.28%
3 Year Change39.26%
5 Year Change170.90%
Change since IPO111.26%

Recent News & Updates

Sep 03
If EPS Growth Is Important To You, First BanCorp (NYSE:FBP) Presents An Opportunity

If EPS Growth Is Important To You, First BanCorp (NYSE:FBP) Presents An Opportunity

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks...

Aug 23

First BanCorp. goes ex dividend tomorrow

First BanCorp. (NYSE:FBP) has declared $0.12/share quarterly dividend, in line with previous. Payable Sept. 9; for shareholders of record Aug. 25; ex-div Aug. 24. See FBP Dividend Scorecard, Yield Chart, & Dividend Growth.

Aug 13

First BanCorp: Stock Price Due For A Breather, Earnings Likely To Continue Full Steam Ahead

The continued strength in Puerto Rico's economy will likely keep loan growth at a decent level through the end of 2023. Higher interest rates will lift the net interest income but erode equity book value. The December 2022 target price suggests a small downside from the current market price. Further, FBP is offering a modest dividend yield. Earnings of First BanCorp (FBP) will likely continue to surge in the remainder of 2022 and full-year 2023. Economic strength in Puerto Rico will drive loan growth, which will, in turn, play a pivotal role in earnings growth. Further, the net interest income will likely continue to benefit from rising interest rates. Overall, I'm expecting First BanCorp to report earnings of $1.58 per share in 2022, up 20% year-over-year. Compared to my last report on the company, I've slightly increased my earnings estimate as I've tweaked upwards my net interest margin estimate. For 2023, I'm expecting the company to report earnings of $1.64 per share, up 4% year-over-year. The year-end target price is quite close to the current market price. Therefore, I’m downgrading First BanCorp to a hold rating. Strong Regional Economy Bodes Well for Loan Growth First BanCorp's loan growth improved to 0.7% in the second quarter of 2022 from 0.5% in the first quarter of the year. Further acceleration in the loan growth rate is likely in the third quarter partly because of Puerto Rico's rapidly strengthening economy. The Economic Development Bank for Puerto Rico's economic activity index shows that the Puerto Rican economy has improved sharply so far this year. Economic Development Bank for Puerto Rico Puerto Rico's continuously plunging unemployment rate provides further proof of economic strength. Puerto Rico Unemployment Rate data by YCharts First Bancorp also has some presence in Florida, which is another rapidly improving market. The state’s unemployment was just 2.8% in June, which is much better than the national average. Further, the state’s coincident index has recovered sharply, which bodes well for loan growth. Philly Fed Florida Coincident Index data by YCharts First BanCorp's ongoing investments in technology should also bear fruit soon. While economic factors will help increase the market size, technological advancements will help First BanCorp gain market share. As mentioned in the earnings presentation, First BanCorp plans to increase its capital projects-related expenses in the second half of 2022. As these projects have been ongoing for some time, they should not take too long to bear fruit. I'm expecting benefits to accrue in the second half of this year. Considering these factors, I'm expecting the loan portfolio to grow by 2.7% in 2022 and 3.0% in 2023. Compared to my last report on First BanCorp, I haven't changed my loan growth estimate much. Equity Book Value to Face Further Pressure First BanCorp’s tangible book value per share plunged to $7.8 by the end of June 2022 from $10.07 at the end of 2021. Most of the decline was attributable to unrealized losses on the securities portfolio racked up due to rising interest rates. As the fed funds rate was increased by 75 basis points in July, and I'm expecting another 75 basis points hike in the remainder of the year, the equity book value will face further pressure in the second half of 2022. However, retained earnings will support book value per share going forward. The following table shows my balance sheet estimates. FY18 FY19 FY20 FY21 FY22E FY23E Financial Position Net Loans 8,705 8,887 11,442 10,827 11,120 11,457 Growth of Net Loans 0.6% 2.1% 28.8% (5.4)% 2.7% 3.0% Other Earning Assets 2,140 2,398 4,926 6,658 6,631 6,765 Deposits 8,995 9,348 15,317 17,785 17,398 17,749 Borrowings and Sub-Debt 1,074 854 924 684 590 601 Common equity 2,009 2,192 2,239 2,102 1,662 1,889 Book Value Per Share ($) 9.3 10.1 10.3 9.9 8.5 9.7 Tangible BVPS ($) 9.3 9.9 9.9 9.6 8.2 9.3 Source: SEC Filings, Author's Estimates (In USD million unless otherwise specified) Revising Upwards the Margin Estimate First BanCorp’s net interest margin has expanded by around 40 basis points in the first half of 2022, which is more than what I previously expected. This expansion is also greater than what was implied by the management's interest rate simulation model. According to the results of the simulation model given in the latest 10-Q filing, a 200 basis points hike in interest rates can boost the net interest income by only 3.11% over twelve months. Due to the first half’s good performance, I've decided to revise upwards my margin estimate for 2022. I'm now expecting the margin to grow by 26 basis points in the second half of 2022, and then by a further 10 basis points in the first quarter of 2023. The rise in 2023 will be due to a lagged effect of the monetary tightening in 2022. I'm not expecting the rate-hike cycle to continue beyond 2022. Improvement in Asset Quality to Keep Provisioning Below Historical Average First BanCorp has rapidly improved its portfolio’s asset quality over the last 12 months. Nonaccrual loans declined to 0.88% of total loans by the end of June 2022 from 1.60% of total loans at the end of June 2021, as mentioned in the earnings release. The company has also released its reserves during the same interval but at a lower rate. Consequently, the coverage has improved. Allowances made up 2.25% of total loans, while nonaccrual loans made up 0.88% of total loans at the end of June 2022. Due to the high coverage, I believe First BanCorp will not need to increase provisioning amid heightened interest rates and possibilities of a recession. In my opinion, provisioning will likely continue at the second quarter’s level through the end of 2023. Overall, I'm expecting the provision expense to make up around 0.36% of total loans (annualized) in the second half of 2022 and full-year 2023. In comparison, the net provision expense averaged 0.74% of total loans in the last five years. Expecting Earnings to Grow by 20% The anticipated loan additions and margin expansion will drive earnings in the remainder of 2022 and 2023. On the other hand, higher provision expense, net of reversals, will restrict earnings growth. Moreover, operating expenses will surge in the year ahead as the management is planning to increase its capital projects-related expenses. The management elaborated in the conference call that it expects to incur higher professional fees and technology costs on the ongoing projects. Further, the management expects a normalization of vacancy levels, which will lift salary expenses. Overall, the management expects the efficiency rate to increase towards the 50% mark from 47.7% in the second quarter of 2022. Overall, I'm expecting First BanCorp to report earnings of $1.58 per share for 2022, up 20% year-over-year. For 2023, I'm expecting the company to report earnings of $1.64 per share, up 4% year-over-year. The following table shows my income statement estimates. FY18 FY19 FY20 FY21 FY22E FY23E Income Statement Net interest income 525 567 600 730 797 871 Provision for loan losses 59 40 171 (66) 16 40 Non-interest income 82 91 111 121 126 138 Non-interest expense 358 378 424 489 448 490 Net income - Common Sh. 199 164 100 277 308 321 EPS - Diluted ($) 0.92 0.76 0.46 1.31 1.58 1.64 Source: SEC Filings, Earnings Releases, Author's Estimates (In USD million unless otherwise specified) In my last report on First BanCorp, I estimated earnings of $1.49 per share for 2022. I've increased my earnings estimate because I've revised upwards my net interest margin estimate. Actual earnings may differ materially from estimates because of the risks and uncertainties related to inflation, and consequently the timing and magnitude of interest rate hikes. Further, a stronger or longer-than-anticipated recession can increase the provisioning for expected loan losses beyond my estimates. Downgrading to a Hold Rating First BanCorp is offering a dividend yield of 3.0% at the current quarterly dividend rate of $0.12 per share. The earnings and dividend estimates suggest a payout ratio of 29% for 2023, which is the same as the three-year average. Therefore, I’m not expecting an increase in the dividend level. (Side note: I took a three-year average only instead of five years because FBP resumed dividends in late 2018.)

Shareholder Returns

FBPUS BanksUS Market
7D-3.9%-5.8%-5.2%
1Y8.3%-21.7%-23.0%

Return vs Industry: FBP exceeded the US Banks industry which returned -21.7% over the past year.

Return vs Market: FBP exceeded the US Market which returned -23.1% over the past year.

Price Volatility

Is FBP's price volatile compared to industry and market?
FBP volatility
FBP Average Weekly Movement4.1%
Banks Industry Average Movement3.4%
Market Average Movement6.9%
10% most volatile stocks in US Market15.8%
10% least volatile stocks in US Market2.8%

Stable Share Price: FBP is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: FBP's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19483,075Aurelio Alemán-Bermudezhttps://www.1firstbank.com

First BanCorp. operates as a bank holding company for FirstBank Puerto Rico that provides various financial services for retail, commercial, and institutional clients. The company operates through six segments: Commercial and Corporate Banking, Mortgage Banking, Consumer (Retail) Banking, Treasury and Investments, United States Operations, and Virgin Islands Operations.

First BanCorp Fundamentals Summary

How do First BanCorp's earnings and revenue compare to its market cap?
FBP fundamental statistics
Market CapUS$2.59b
Earnings (TTM)US$304.26m
Revenue (TTM)US$902.23m

8.5x

P/E Ratio

1.7x

P/B Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
FBP income statement (TTM)
RevenueUS$902.23m
Cost of RevenueUS$0
Gross ProfitUS$902.23m
Other ExpensesUS$597.97m
EarningsUS$304.26m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)1.63
Gross Margin100.00%
Net Profit Margin33.72%
Debt/Equity Ratio37.5%

How did FBP perform over the long term?

See historical performance and comparison

Dividends

3.5%

Current Dividend Yield

26%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is FBP undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for FBP?

Other financial metrics that can be useful for relative valuation.

FBP key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenuen/a
Enterprise Value/EBITDAn/a
PEG Ratio-21.4x

Price to Earnings Ratio vs Peers

How does FBP's PE Ratio compare to its peers?

FBP PE Ratio vs Peers
The above table shows the PE ratio for FBP vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average9.1x
ABCB Ameris Bancorp
9.6x4.9%US$3.2b
PACW PacWest Bancorp
5.5x4.5%US$2.8b
CBCY.B Central Bancompany
11.2xn/aUS$2.8b
SYBT Stock Yards Bancorp
24.2x22.6%US$2.0b
FBP First BanCorp
8.5x-0.4%US$2.6b

Price-To-Earnings vs Peers: FBP is good value based on its Price-To-Earnings Ratio (8.5x) compared to the peer average (9.1x).


Price to Earnings Ratio vs Industry

How does FBP's PE Ratio compare vs other companies in the US Banks Industry?

Price-To-Earnings vs Industry: FBP is good value based on its Price-To-Earnings Ratio (8.5x) compared to the US Banks industry average (9.7x)


Price to Earnings Ratio vs Fair Ratio

What is FBP's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

FBP PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio8.5x
Fair PE Ratio11.6x

Price-To-Earnings vs Fair Ratio: FBP is good value based on its Price-To-Earnings Ratio (8.5x) compared to the estimated Fair Price-To-Earnings Ratio (11.6x).


Share Price vs Fair Value

What is the Fair Price of FBP when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: FBP ($13.87) is trading below our estimate of fair value ($45.48)

Significantly Below Fair Value: FBP is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


Discover undervalued companies

Future Growth

How is First BanCorp forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


-0.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FBP's earnings are forecast to decline over the next 3 years (-0.4% per year).

Earnings vs Market: FBP's earnings are forecast to decline over the next 3 years (-0.4% per year).

High Growth Earnings: FBP's earnings are forecast to decline over the next 3 years.

Revenue vs Market: FBP's revenue (6.9% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: FBP's revenue (6.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if FBP's Return on Equity is forecast to be high in 3 years time


Discover growth companies

Past Performance

How has First BanCorp performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


22.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: FBP has high quality earnings.

Growing Profit Margin: FBP's current net profit margins (33.7%) are higher than last year (26.1%).


Past Earnings Growth Analysis

Earnings Trend: FBP's earnings have grown significantly by 22.3% per year over the past 5 years.

Accelerating Growth: FBP's earnings growth over the past year (46.4%) exceeds its 5-year average (22.3% per year).

Earnings vs Industry: FBP earnings growth over the past year (46.4%) exceeded the Banks industry 8.7%.


Return on Equity

High ROE: FBP's Return on Equity (19.7%) is considered low.


Discover strong past performing companies

Financial Health

How is First BanCorp's financial position? (This company is analysed differently as a bank or financial institution)

Financial Health Score

6/6

Financial Health Score 6/6

  • Asset Level

  • Allowance for Bad Loans

  • Low Risk Liabilities

  • Loan Level

  • Low Risk Deposits

  • Level of Bad Loans

Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet


Financial Institutions Analysis

Asset Level: FBP's Assets to Equity ratio (12.5x) is moderate.

Allowance for Bad Loans: FBP has a sufficient allowance for bad loans (254%).

Low Risk Liabilities: 95% of FBP's liabilities are made up of primarily low risk sources of funding.

Loan Level: FBP has an appropriate level of Loans to Assets ratio (56%).

Low Risk Deposits: FBP's Loans to Deposits ratio (64%) is appropriate.

Level of Bad Loans: FBP has an appropriate level of bad loans (0.9%).


Discover healthy companies

Dividend

What is First BanCorp current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Future Dividend Coverage


3.46%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: FBP's dividend (3.46%) is higher than the bottom 25% of dividend payers in the US market (1.65%).

High Dividend: FBP's dividend (3.46%) is low compared to the top 25% of dividend payers in the US market (4.57%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, FBP has been paying a dividend for less than 10 years.

Growing Dividend: FBP's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (25.7%), FBP's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years or that it will be covered by earnings.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

12.5yrs

Average management tenure


CEO

Aurelio Alemán-Bermudez (63 yo)

13yrs

Tenure

US$4,183,057

Compensation

Mr. Aurelio Alemán-Bermudez has been the Chief Executive Officer and President of First BanCorp. since September 28, 2009. Mr. Alemán currently serves as Chairman of the Board of Directors and CEO of the C...


CEO Compensation Analysis

Compensation vs Market: Aurelio's total compensation ($USD4.18M) is below average for companies of similar size in the US market ($USD6.95M).

Compensation vs Earnings: Aurelio's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: FBP's management team is seasoned and experienced (12.5 years average tenure).


Board Members

Experienced Board: FBP's board of directors are considered experienced (4.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: FBP insiders have only sold shares in the past 3 months.


Recent Insider Transactions

NYSE:FBP Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
12 Aug 22SellUS$161,625Nayda Rivera-BatistaIndividual10,000US$16.16
10 Aug 22SellUS$781,880Orlando Berges-GonzálezIndividual50,000US$15.64
29 Jul 22SellUS$1,049,415Aurelio Alemán-BermudezIndividual70,000US$15.00
29 Jul 22SellUS$151,000Nayda Rivera-BatistaIndividual10,000US$15.10
27 Jul 22SellUS$448,112Nayda Rivera-BatistaIndividual30,000US$15.00
17 May 22SellUS$1,411,250Roberto HerenciaIndividual100,000US$14.11
08 Feb 22SellUS$303,032Nayda Rivera-BatistaIndividual20,000US$15.15
22 Nov 21SellUS$951,613Aurelio Alemán-BermudezIndividual65,000US$14.64
26 Oct 21SellUS$149,406Nayda Rivera-BatistaIndividual10,034US$14.89

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 80.08% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
15.43%
BlackRock, Inc.
28,852,822$400.2m-1.64%0.01%
13.16%
The Vanguard Group, Inc.
24,617,171$341.4m-0.11%0.01%
7.97%
Dimensional Fund Advisors LP
14,912,553$206.8m-3.02%0.05%
6.2%
State Street Global Advisors, Inc.
11,596,231$160.8m-15.23%0.01%
6%
AllianceBernstein L.P.
11,217,739$155.6m149.16%0.07%
5.56%
American Century Investment Management Inc
10,394,918$144.2m21.73%0.11%
3.88%
FMR LLC
7,253,855$100.6m15.4%0.01%
2.68%
BNY Mellon Asset Management
5,017,128$69.6m-3.03%0.02%
2.08%
Frontier Capital Management Co LLC
3,899,535$54.1m-0.03%0.54%
1.91%
Lord, Abbett & Co. LLC
3,573,647$49.6m-12.1%0.18%
1.84%
Geode Capital Management, LLC
3,442,070$47.7m-0.06%0.01%
1.59%
Northern Trust Global Investments
2,975,630$41.3m-2.12%0.01%
1.48%
Columbia Management Investment Advisers, LLC
2,771,966$38.4m18.86%0.01%
1.26%
Schroder Investment Management North America Inc.
2,353,597$32.6m-9.24%0.12%
1.12%
Charles Schwab Investment Management, Inc.
2,098,944$29.1m-9.86%0.01%
1.04%
Norges Bank Investment Management
1,951,826$27.1m0%no data
0.89%
Hotchkis and Wiley Capital Management, LLC
1,657,825$23.0m-36.26%0.09%
0.82%
Victory Capital Management Inc.
1,542,971$21.4m-12.18%0.02%
0.8%
J.P. Morgan Asset Management, Inc.
1,489,172$20.7m98.45%no data
0.79%
Eaton Vance Management
1,480,769$20.5m12.8%0.01%
0.76%
Principal Global Investors, LLC
1,415,046$19.6m4.94%0.01%
0.72%
SEI Investments Company
1,341,494$18.6m23.6%0.03%
0.72%
Numeric Investors LLC
1,338,709$18.6m-23.34%0.11%
0.7%
Merrill Lynch & Co. Inc., Banking Investments
1,307,460$18.1m-0.87%0.01%
0.68%
Stieven Capital Advisors, L.P.
1,265,407$17.6m-12.49%2.75%

Company Information

First BanCorp.'s employee growth, exchange listings and data sources


Key Information

  • Name: First BanCorp.
  • Ticker: FBP
  • Exchange: NYSE
  • Founded: 1948
  • Industry: Regional Banks
  • Sector: Banks
  • Implied Market Cap: US$2.594b
  • Shares outstanding: 187.03m
  • Website: https://www.1firstbank.com

Number of Employees


Location

  • First BanCorp.
  • 1519 Ponce de Leon Ave.
  • Stop 23
  • San Juan
  • Puerto Rico
  • 00908-0146
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FBPNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1987
OLWNDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1987

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/24 00:00
End of Day Share Price2022/09/23 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.