First Bancorp (FBP) Stock Forecast & Price Target

First BanCorp is positioned to compound earnings from a powerful combination of best-in-class profitability, strong funding advantages, and improving balance-sheet productivity, with the company’s lowest cost of funds in Puerto Rico at 1.40%, an earning asset yield above 6%, and a FTE NIM of 5.18% that expanded 18bp quarter over quarter. Its core franchise is benefiting from steady loan and deposit growth, robust loan origination trends, and a diversified earnings base anchored by consumer banking, while credit quality has remained stable enough to support strong PPNR and a high ROA that was 1.89% in 1Q26. The outlook is further strengthened by a solid Puerto Rico economy, a 16.9% CET1 ratio that provides flexibility for capital deployment and buybacks, and a favorable operating backdrop in which low-single-digit balance sheet growth and loan growth in the 2%-4% range appear achievable over the next two years.

First BanCorp is viewed negatively because, despite a strong 2Q26 EPS of $0.62, a record 2.02% ROA, and solid loan and deposit growth of 5% LQA and 6.6%, much of the outperformance appears dependent on favorable net interest income dynamics and about $0.02 per share of non-recurring NII items rather than purely recurring earnings power. The company’s fundamentals still face structural and cyclical risks, including higher expected future credit costs with NCOs and provisioning modeled back up toward the 60bp/70bp range, elevated delinquencies in the auto portfolio, and a Puerto Rico-centric loan book and revenue base that leaves results exposed to local economic weakness, real estate downturns, and slower revenue growth. Although funding costs have been manageable and capital returns remain high through dividends and buybacks, the ability to further lower funding costs is becoming muted, fee income remains a relatively small 13%-14% of revenues, and management’s own outlook implies only modest NII and PPNR improvement from here, which limits upside and supports a cautious stance.