First BanCorp. (FBP) Dividend Report

Updated 3/1/26

First BanCorp. is the parent company of FirstBank Puerto Rico, a full-service commercial bank headquartered in San Juan that also operates across the U.S. Virgin Islands, the British Virgin Islands, and the Florida mainland. Founded in 1948, the institution has grown into one of the most profitable regional banks in its coverage territory, with a market capitalization just above $3.3 billion and a business model centered on consumer lending, commercial real estate, and treasury operations. For dividend investors, the story here is straightforward: a profitable, well-run bank generating meaningful excess earnings relative to the dividend it pays out.

The dividend thesis at FBP rests on three pillars. First, the payout ratio sits at a disciplined 34%, meaning roughly two-thirds of earnings are retained even after returning cash to shareholders. Second, the bank has demonstrated consistent annual dividend increases over the past three years, stepping the quarterly payment from $0.14 in 2023 to $0.20 as of the February 2026 payment. Third, profitability metrics like an 18.97% return on equity and a 37.7% net profit margin compare favorably with most U.S. regional banking peers, providing the earnings foundation that makes sustained dividend growth credible rather than aspirational.

Recent Events

First BanCorp. declared its most recent quarterly dividend of $0.20 per share, paid on February 26, 2026, continuing the cadence of annual increases that has defined its capital return program since 2023. The step up from $0.18 per quarter in 2025 to $0.20 in early 2026 represents an 11% year-over-year increase, consistent with the pace the bank has maintained since reinstating dividend growth following Puerto Rico’s post-pandemic economic recovery. The move signals management confidence in the bank’s earnings trajectory heading into fiscal 2026.

The broader regional banking environment entering 2026 has been shaped by a moderating interest rate backdrop, following the Federal Reserve’s rate cutting cycle that began in late 2024. For a bank like FBP, which benefits from wide net interest margins partly attributable to its Puerto Rico funding base, any compression in asset yields bears watching. However, the island’s economic conditions have remained relatively stable, supported by continued federal recovery funds, a resilient tourism sector, and a more disciplined local fiscal environment following the Puerto Rico Oversight Board’s restructuring work over the prior decade.

FBP has also continued deploying capital through share repurchases alongside its dividend program, a combination that reflects the excess capital position the bank has built. With earnings per share running at $2.05 on an annual basis and the annual dividend obligation standing at just $0.80, the bank has meaningful flexibility to sustain both channels of shareholder return without straining its capital ratios. This dual-return framework has been a defining characteristic of management’s approach to capital allocation over the past several years.

Key Dividend Metrics

📊 **Dividend Yield:** 3.24%
📅 **Last Dividend Payment:** $0.20 per share (paid February 26, 2026)
💰 **Annual Dividend:** $0.80 per share
📉 **Payout Ratio:** 34.15%
📈 **Dividend Growth:** From $0.14/quarter in 2023 to $0.20/quarter in 2026, a 43% cumulative increase over three years
🛡️ **Dividend Safety:** Very high — EPS of $2.05 covers the $0.80 annual dividend by 2.56 times
💵 **Free Cash Flow Coverage:** Operating cash flow data not formally reported, but net income of $344.9 million on a $3.3 billion market cap implies robust underlying cash generation

Dividend Overview

At a current yield of 3.24%, FBP sits in a range that income investors can meaningfully work with, particularly given that the yield is backed by genuine earnings power rather than a stretched payout. The stock’s $21.13 price against an $0.80 annual dividend produces a yield that compares favorably with many large-cap bank peers, especially when layered against the bank’s consistent record of dividend growth. Investors collecting this yield today are not being asked to accept excessive risk in exchange for the income stream.

The payout ratio of 34.15% is the clearest indicator of dividend safety in this report. Regional banks operating with payout ratios in the 50% to 70% range are common, which makes FBP’s sub-35% ratio genuinely conservative by sector standards. At $2.05 in annual EPS, the bank covers its $0.80 per share dividend obligation with $1.25 in retained earnings per share. Even if earnings were to contract by 30%, the dividend would still be covered without a payout ratio exceeding 50%. This buffer provides substantial downside protection for income-focused holders.

Looking at the dividend history over the past three years gives a clear picture of the growth trajectory. The quarterly payment was a steady $0.14 throughout all of 2023. In early 2024, management raised it to $0.16, a 14% increase. In early 2025, another increase brought it to $0.18, a 12.5% step. The most recent move to $0.20 in February 2026 represents an 11% increase. Each year has delivered a meaningful raise, and the consistency of the pattern suggests this is a deliberate capital return strategy rather than opportunistic one-time increases.

Dividend Growth and Safety

The three-year compounded annual growth rate on FBP’s dividend works out to approximately 12.7%, which places it in elite company among regional bank dividend growers. Many community and regional banks raised dividends modestly in this period, but FBP delivered double-digit annual increases across the board. Importantly, each raise has been made against a backdrop of improving or stable earnings rather than a payout ratio being stretched upward to manufacture the appearance of generosity. The $0.20 quarterly dividend still represents only a fraction of the bank’s earnings power.

Dividend safety at FBP benefits from the bank’s broader financial profile. A return on equity of 18.97% is exceptional for a regional institution of this size, and a net profit margin of 37.7% reflects the combination of a favorable funding environment in Puerto Rico and disciplined expense management. Return on assets of 1.80% exceeds the 1% threshold that traditionally signals strong bank health, and the bank’s balance sheet has been fortified through years of earnings retention. These metrics collectively reduce the probability of a scenario where the dividend would need to be cut or frozen.

The absence of formal operating cash flow data in public disclosures makes an exact free cash flow coverage ratio difficult to calculate, but the net income figure of approximately $344.9 million against a market cap of $3.3 billion implies a very healthy earnings yield relative to the bank’s size. Given that banks generate cash in ways that differ structurally from industrial companies, net income remains the most relevant coverage metric, and by that measure the dividend is covered by a factor of 2.56 times. This cushion affords management the latitude to continue increasing the quarterly payment annually without any pressure on the bank’s financial position.

Chart Analysis

First BanCorp has had a constructive year on the price chart, working its way up from a 52-week low of $16.41 before reaching a peak of $23.01, representing a range of nearly 40% over the trailing twelve months. The stock currently sits at $21.13, which places it about 8% below that annual high but still well above the low, with a gain of roughly 29% from the trough. That kind of recovery trajectory speaks to genuine accumulation in the shares over the past year, and the current pullback from the highs looks more like a consolidation than a breakdown, particularly given where the longer-term trend indicators are positioned.

The moving average picture reinforces that constructive view. The 200-day moving average currently sits at $20.88, and with the stock trading at $21.13, FBP is holding just above that key long-term support level. More meaningfully, the 50-day moving average has crossed above the 200-day moving average, which is the classic golden cross configuration that technical analysts typically associate with a durable uptrend. The stock has dipped below its 50-day average of $21.60 in the current pullback, which is a short-term negative, but the fact that the 200-day is rising and acting as a floor gives longer-term income investors a meaningful reference point for where the primary trend remains intact.

The RSI reading is where things get particularly interesting for patient dividend buyers. At 25.28, FBP is trading in deeply oversold territory, well beneath the 30 threshold that typically signals exhausted selling pressure. Readings at this level do not guarantee an immediate reversal, but historically they tend to mark zones where risk-reward shifts in favor of buyers rather than sellers. The momentum has clearly been negative in the near term, as the decline from the highs has been sharp enough to push the RSI to levels rarely seen outside of genuine market stress events, which makes the current entry zone worth watching closely.

For dividend investors, the technical setup presents a reasonably compelling picture when layered on top of the fundamental income thesis. The golden cross confirms the longer-term uptrend remains structurally intact, the 200-day moving average is providing near-term support just below the current price, and the deeply oversold RSI suggests the recent selling may be approaching exhaustion. Investors who are focused on collecting and growing income rather than timing short-term swings will find the current price, sitting 8% off the 52-week high with a major trend signal still bullish, to be a more attractive entry point than the share price action over the past few weeks might otherwise suggest.

Cash Flow Statement

First BanCorp’s cash flow profile demonstrates the kind of consistency that dividend investors should appreciate in a regional bank. Operating cash flow has ranged from $363.0 million in 2023 to a peak of $440.5 million in 2022, while free cash flow has tracked closely alongside it, reaching $394.1 million in 2024 on operating cash flow of $404.1 million. That tight spread between operating and free cash flow, rarely more than $20 million apart in any given year, reflects a business that requires minimal reinvestment to sustain its earnings engine. With the company’s annual dividend obligation running well below its free cash flow generation, the payout is covered with considerable room to spare, leaving management with meaningful flexibility to continue returning capital through buybacks alongside the dividend.

Stepping back across the full four-year window, the trajectory here is one of genuine resilience rather than linear growth. The 2022 peak of $440.5 million in operating cash flow gave way to a softer 2023 at $363.0 million, a dip that coincided with a shifting interest rate environment and some normalization in credit activity across the Puerto Rico banking market. The recovery to $404.1 million in 2024 operating cash flow, however, confirms that 2023 was a pause rather than a structural decline. Capital efficiency remains a clear strength, as the consistently narrow gap between operating and free cash flow signals that FBP is not consuming cash to maintain its competitive position. For dividend growth investors, a business generating north of $340 million in free cash flow in its weakest recent year, while sustaining and growing its dividend, represents exactly the kind of durable income foundation that warrants serious consideration.

Analyst Ratings

Seven analysts currently cover First BanCorp., and the distribution of their price targets tells a consistent story about where informed institutional observers believe the stock should trade. The low-end target sits at $23.00, which itself represents nearly 9% upside from the current $21.13 price. The mean target of $24.64 implies roughly 16.6% upside, and the high-end target of $26.00 would represent a 23% gain from current levels. The fact that even the most cautious analyst among the seven carries a target above the current market price is a notable signal about perceived undervaluation.

No formal consensus rating label is available in the current data, but the alignment of all price targets above the prevailing share price effectively communicates a constructive bias across the covering analyst community. For income investors, analyst price target ranges matter somewhat differently than for pure growth investors. The relevance here is that a stock trading below all analyst targets suggests limited near-term downside risk in the analyst community’s view, which supports the case for collecting FBP’s 3.24% yield without taking on obvious valuation-level risk.

The combination of a $21.13 current price, a P/E ratio of 10.31, and a mean analyst price target of $24.64 creates what looks like a favorable setup for total return. Income investors who collect the dividend while waiting for the share price to converge toward analyst targets could see a total return scenario where yield and capital appreciation work together rather than in tension. The $26.00 high target would imply a price-to-earnings multiple of roughly 12.7 times on current earnings, still below many banking peers, suggesting the upside case is not predicated on aggressive multiple expansion.

Earning Report Summary

Revenue and Profitability Reflect Consistent Earning Power

First BanCorp. generated revenue of approximately $914.9 million on a trailing basis, with net income of $344.9 million representing a net profit margin of 37.7%. For a regional bank operating primarily in a U.S. territory market, these are strong absolute numbers. Earnings per share of $2.05 reflect both the quality of the bank’s loan book and the benefit of its treasury and interest income operations, which have remained well-positioned in an elevated rate environment. The bank’s ability to sustain margins above the 35% threshold distinguishes it from many peer institutions that have faced greater net interest margin compression.

Capital Returns and Balance Sheet Efficiency

Return on equity of 18.97% and return on assets of 1.80% place FBP in the upper tier of U.S. regional banking profitability metrics. An ROA above 1.5% is generally considered excellent in the banking sector, and FBP’s 1.80% figure suggests that the bank is generating meaningful income relative to its total asset base, a sign of disciplined underwriting and effective balance sheet deployment. The price-to-book ratio of 1.67 against book value of $12.64 per share reflects the premium the market assigns to this above-average returns profile, though the multiple remains modest in absolute terms.

Outlook Supported by Consistent Capital Allocation Framework

Management has consistently communicated a preference for balanced capital returns, combining annual dividend increases with an active share repurchase program. With a book value growing steadily, a low payout ratio that leaves room for continued dividend increases, and an analyst community that uniformly sees upside in the stock, the near-term outlook for income investors appears favorable. The primary variable to monitor is net interest margin trajectory as the rate environment evolves through 2026, since the bank’s revenue base is closely tied to the spread between what it earns on loans and securities and what it pays on deposits.

Management Team

Aurelio Alemán has served as President and Chief Executive Officer of First BanCorp. since 2004, making him one of the longest-tenured banking CEOs in the Caribbean and U.S. regional bank universe. His tenure spans the financial crisis, Puerto Rico’s prolonged fiscal restructuring, the devastation of Hurricane Maria, and the post-pandemic recovery, giving him a depth of institutional and market knowledge that is difficult to replicate. Under Alemán’s leadership, the bank rebuilt its capital base, worked through legacy credit issues, and has since shifted to an offense-oriented capital return framework that has produced consistent dividend growth. His track record of navigating adverse environments without cutting the dividend or compromising the balance sheet is directly relevant to income investors assessing sustainability.

Orlando Berges serves as Executive Vice President and Chief Financial Officer, a role he has held for an extended period alongside Alemán. Berges has been central to the bank’s capital planning and investor communication efforts, regularly presenting the case for FBP’s capital allocation priorities on earnings calls and at investor conferences. The stability of the senior leadership team is itself a positive signal for dividend investors, as consistent management teams tend to maintain consistent capital return philosophies rather than recalibrating payout strategies with each leadership transition. Together, Alemán and Berges have constructed a financial framework at FBP that prioritizes sustainable, growing shareholder returns within a conservative risk culture.

Valuation and Stock Performance

At $21.13 per share, FBP trades at a trailing P/E ratio of 10.31 and a price-to-book multiple of 1.67 times. The P/E multiple is modestly below the median for U.S. regional bank stocks, which have generally traded in the 11 to 13 times earnings range in recent periods. Given FBP’s above-average profitability metrics, including an ROE nearly 5 to 7 percentage points above many peers, the current valuation does not appear to fully reflect the quality differential. A P/E closer to 12 times, which would still be conservative, would imply a share price approaching $24.60, nearly matching the analyst mean target.

The 52-week range of $16.40 to $23.43 illustrates the stock’s travel over the past year. At $21.13, FBP is sitting in the upper half of that range but meaningfully below its 52-week high. The beta of 0.86 indicates that the stock tends to move with less volatility than the broader market, which is a characteristic income investors often find attractive because it reduces the likelihood of sharp drawdowns that disrupt long-term holding plans. Relative to the financial sector broadly, FBP has demonstrated that its Puerto Rico-centric business model, while geographically concentrated, does not necessarily translate into elevated price volatility.

For total return analysis, combining the 3.24% dividend yield with the potential appreciation toward the analyst mean target of $24.64 produces a one-year total return scenario in the range of 20% if price convergence occurs on schedule. Even in a more conservative scenario where the stock makes only modest progress toward analyst targets, the 3.24% yield provides a meaningful income contribution while investors wait. The combination of a below-peer-average P/E, a consistently growing dividend, and a low payout ratio creates what income investors often describe as a margin of safety on multiple dimensions simultaneously.

Risks and Considerations

Geographic concentration remains the most prominent structural risk associated with FBP. The bank’s primary market is Puerto Rico, a U.S. territory that has faced sustained population outmigration, recurring fiscal challenges, and vulnerability to natural disasters including the severe damage caused by Hurricane Maria in 2017. While the island’s economic environment has improved considerably since then, with federal recovery funds continuing to flow and the fiscal oversight process having stabilized municipal finances to a meaningful degree, any renewed deterioration in Puerto Rico’s economic conditions would directly affect loan quality, deposit growth, and ultimately earnings.

Interest rate sensitivity is a meaningful risk in both directions for FBP. The bank has benefited from an elevated rate environment that widened net interest margins, but as the Federal Reserve’s cutting cycle continues through 2026, that tailwind may moderate. Regional banks with high proportions of floating-rate assets and relatively stable deposit cost bases can experience meaningful net interest income compression when short-term rates fall. FBP’s management has historically managed this exposure through balance sheet positioning and hedging activity, but income investors should be aware that rate normalization could put some pressure on earnings growth in coming years.

Credit quality is always a concern for income investors in banking, and FBP’s Puerto Rico loan book deserves scrutiny. The territory’s unemployment rate and household income levels remain below U.S. mainland averages, which can translate into higher loan delinquency rates in economic downturns. While FBP has demonstrated strong credit management through several difficult cycles and its current profitability metrics suggest the loan book is performing well, a significant economic shock to Puerto Rico, whether from another natural disaster, a reversal in federal funding, or broader Caribbean economic weakness, could pressure credit costs and reduce the earnings cushion beneath the dividend.

Regulatory and capital requirements present a background risk common to all banking institutions. Changes in capital adequacy standards, whether from Basel III endgame rules or domestic regulatory changes affecting banks of FBP’s size, could require the bank to retain more capital than it currently does, potentially limiting the pace of dividend increases or share repurchases. The current payout ratio of 34% suggests the bank operates well within whatever capital return constraints regulators might impose, but the regulatory environment for regional banks remains in flux and warrants ongoing monitoring from shareholders.

Final Thoughts

First BanCorp. presents a compelling case for dividend growth investors looking for a well-managed regional bank with a disciplined capital return track record and room to grow. The combination of a 3.24% current yield, a 34% payout ratio, and three consecutive years of double-digit dividend increases is the kind of profile that income investors spend considerable time searching for. At a P/E of 10.31 and with every covering analyst carrying a price target above the current share price, the stock does not appear to require heroic assumptions about future growth to justify its current valuation.

The risks here are real and should not be dismissed. Puerto Rico concentration, rate sensitivity, and credit quality in a below-median-income market are genuine considerations. But the bank’s history of navigating adversity, the depth of management’s tenure, and the substantial earnings cushion beneath the dividend all argue for viewing those risks as manageable rather than disqualifying. FBP is not a bank that has reached for yield by paying out more than it earns or by ignoring balance sheet quality. Its dividend is earned, its growth is funded organically, and its payout ratio leaves ample room to sustain increases even if earnings growth slows.

For income investors building a dividend growth portfolio with a multi-year horizon, FBP fits the archetype of a steady compounder: a stock where the dividend grows reliably, the underlying business is profitable and well-run, and the current valuation provides a reasonable margin of safety. The $0.80 annual dividend today could plausibly be $1.00 or more within two to three years if the current growth cadence continues, and the stock’s below-market P/E creates the potential for capital appreciation on top of a growing income stream. That combination is worth serious attention from dividend-focused investors.