Puerto Rican financial institution First BanCorp (NYSE: FBP) fell short of the market’s revenue expectations in Q3 CY2025, but sales rose 6% year on year to $248.7 million. Its non-GAAP profit of $0.51 per share was 5% above analysts’ consensus estimates.
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First BanCorp (FBP) Q3 CY2025 Highlights:
- Net Interest Income: $217.9 million vs analyst estimates of $224.7 million (7.8% year-on-year growth, 3% miss)
- Net Interest Margin: 4.6% vs analyst estimates of 4.7% (10.5 basis point miss)
- Revenue: $248.7 million vs analyst estimates of $251.9 million (6% year-on-year growth, 1.3% miss)
- Efficiency Ratio: 50.2% vs analyst estimates of 49.5% (76 basis point miss)
- Adjusted EPS: $0.51 vs analyst estimates of $0.49 (5% beat)
- Tangible Book Value per Share: $11.79 vs analyst estimates of $11.49 (16.1% year-on-year growth, 2.6% beat)
- Market Capitalization: $3.27 billion
Company Overview
Tracing its roots back to 1948 in San Juan, First BanCorp (NYSE: FBP) is a bank holding company that provides commercial banking, consumer financing, mortgage services, and insurance products across Puerto Rico, the U.S. mainland, and the Caribbean.
Sales Growth
Two primary revenue streams drive bank earnings. While net interest income, which is earned by charging higher rates on loans than paid on deposits, forms the foundation, fee-based services across banking, credit, wealth management, and trading operations provide additional income. Luckily, First BanCorp’s revenue grew at a solid 8.1% compounded annual growth rate over the last five years. Its growth surpassed the average banking company and shows its offerings resonate with customers, a great starting point for our analysis.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. First BanCorp’s recent performance shows its demand has slowed as its annualized revenue growth of 2.9% over the last two years was below its five-year trend. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, First BanCorp’s revenue grew by 6% year on year to $248.7 million, missing Wall Street’s estimates.
Net interest income made up 86.2% of the company’s total revenue during the last five years, meaning First BanCorp barely relies on non-interest income to drive its overall growth.
Markets consistently prioritize net interest income growth over fee-based revenue, recognizing its superior quality and recurring nature compared to the more unpredictable non-interest income streams.
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Tangible Book Value Per Share (TBVPS)
Banks profit by intermediating between depositors and borrowers, making them fundamentally balance sheet-driven enterprises. Market participants emphasize balance sheet quality and sustained book value growth when evaluating these institutions.
This is why we consider tangible book value per share (TBVPS) the most important metric to track for banks. TBVPS represents the real, liquid net worth per share of a bank, excluding intangible assets that have debatable value upon liquidation. Traditional metrics like EPS are helpful but face distortion from M&A activity and loan loss accounting rules.
First BanCorp’s TBVPS grew at a tepid 3.9% annual clip over the last five years. However, TBVPS growth has accelerated recently, growing by 28% annually over the last two years from $7.20 to $11.79 per share.
Over the next 12 months, Consensus estimates call for First BanCorp’s TBVPS to grow by 8.5% to $12.80, decent growth rate.
Key Takeaways from First BanCorp’s Q3 Results
We enjoyed seeing First BanCorp beat analysts’ EPS and tangible book value per share expectations this quarter. On the other hand, its net interest income missed and its revenue fell slightly short of Wall Street’s estimates. Overall, this quarter was mixed, but it seems like the company did enough to please the market. The stock traded up 7.1% to $21.98 immediately after reporting.
Should you buy the stock or not? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
