DEF: First BanCorp: 2026 Proxy Details Strong 2025 Performance

Sentiment:

Definitive Proxy Statement 25 March 2026 4:54 PM

First BanCorp's definitive proxy statement outlines proposals for its 2026 Annual Meeting, following a year of record revenue and strong profitability in 2025.

Better than expectedNet income increased by 15% to $344.9 million in 2025.Earnings per share grew 19% to $2.15 in 2025.Return on Average Assets (ROAA) increased by 23 basis points to 1.81%.Relative Total Shareholder Return (TSR) for 2023-2025 was at the 94th percentile of the KBW Regional Bank Index, leading to a 150% payout for this component of executive performance shares.Tangible Book Value (TBV) per share achieved 101.46% of its target for the 2023-2025 performance cycle.

Summary

The 2026 Annual Meeting of Stockholders will be held virtually on Wednesday, May 6, 2026, at 10:00 a.m., Atlantic Standard Time.
Stockholders of record as of March 9, 2026, are entitled to receive notice of and vote at the Annual Meeting.
Key proposals for stockholder action include the election of nine directors, adoption of the First BanCorp. 2026 Omnibus Incentive Plan, a non-binding advisory vote on 2025 executive compensation, and ratification of Crowe LLP as the independent auditor for fiscal year 2026.
The company reported an exceptional year in 2025, achieving record revenue, disciplined loan growth, healthy core deposit flows, and strong profitability.
Nearly 100% of 2025 earnings were distributed through common stock repurchases ($150.0 million), common stock dividends ($115.7 million), and the redemption of junior subordinated debentures ($61.7 million).
Strategic initiatives advanced include the evolution of IT infrastructure and digital capabilities, leading to a 5% increase in retail Digital Banking active users and 95% of deposit transactions captured through self-service platforms.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong performance report, with significant financial growth, effective capital management, and robust corporate governance practices. The positive executive compensation payouts reflect the achievement of challenging performance targets.

Positives

Achieved record total revenues exceeding $1.0 billion in 2025.
Reported GAAP net income of $344.9 million in 2025, a 15% increase compared to the prior year.
Adjusted pre-tax pre-provision income (non-GAAP) reached $499.2 million, a 10% increase from 2024.
Net interest margin improved by 33 basis points to 4.58% in 2025.
Achieved year-over-year organic loan growth of $380.2 million, or 3.0%, primarily driven by a $347.8 million increase in commercial and construction loans.
Earnings per share grew 19% from $1.81 in 2024 to $2.15 in 2025.
Maintained a strong efficiency ratio of 49.77%, indicating prudent expense management.
Non-performing assets to total ratio improved by 1 basis point to 0.60%.
Delivered strong Return on Average Assets (ROAA) of 1.81% and Return on Average Equity (ROAE) of 18.74%.
Expanded total deposits (excluding brokered certificates of deposit and government deposits) by $193.3 million, or 1.5%.
Maintained a strong capital position with a 16.8% Common Equity Tier 1 Ratio and 18.00% Total Capital Ratio.
Tangible book value per share increased by 24% to $12.29 compared to 2024.
Employee engagement score of 73% stands above both global and local Qualtrics benchmarks.
Demonstrated corporate sustainability through 2,800 volunteer hours, 114,000 training hours, and $1.3 million in community contributions.

Risks

Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially, many of which may be beyond the Corporation's control.
The financial services industry inherently faces complex risk management challenges, including credit, market, operational, compliance, information technology, interest rate, liquidity, and reputational risks.
Cybersecurity and information security risks require significant attention and ongoing management efforts to protect data and systems.
Potential for compensation plans to pose unnecessary risks or encourage the manipulation of reported earnings, although the company's risk-avoidance assessment concluded no material adverse effect is reasonably likely.

Future Outlook

The Corporation is committed to its capital deployment priorities and targets to drive sustainable franchise growth and industry-leading returns. This includes continued repositioning of the balance sheet towards higher yielding investment securities, strengthening liquidity and capital levels, and advancing key strategic technology initiatives. The proposed 2026 Omnibus Incentive Plan aims to provide long-term incentive compensation, encourage employee retention, and assist in attracting qualified service providers. Future compensation decisions for Named Executive Officers, including base salary increases and adjusted incentive opportunities, are effective April 1, 2026, reflecting ongoing performance alignment.

Management Comments

Throughout 2025, we successfully navigated a dynamic operating environment and delivered an exceptional year by virtually all measures, including record revenue, disciplined loan growth, healthy core deposit flows, and strong profitability.
We distributed close to 100% of earnings for the fifth consecutive year through repurchases of the Corporation's common stock, payment of common stock dividends, and completion of the redemption of all outstanding junior subordinated debentures.
We remain committed to our capital deployment priorities and targets as these measures will continue to drive sustainable franchise growth and industry-leading returns.
Our current employee engagement score is 73%, which stands above both the global and local Qualtrics benchmarks.
The Board believes that appropriate stock ownership by directors and executive officers further aligns their interests with those of our stockholders.
The Compensation Committee believes that the Corporation should have sound compensation practices that fairly reward exceptional employees and efforts, while ensuring compensation reflects risk management principles and promotes long-term contributions to sustained profitability and adherence to values.

Industry Context

StockSavvy.ai notes that First BanCorp's strong 2025 performance, including record revenue and improved net interest margin, indicates effective navigation of a dynamic operating environment, aligning with broader banking sector trends of adapting to interest rate changes and focusing on digital transformation. The emphasis on capital deployment and strategic technology initiatives reflects a common industry focus on efficiency and shareholder value in a competitive landscape. The proposed 2026 Omnibus Incentive Plan is a standard practice for public companies to attract and retain talent, ensuring long-term alignment with corporate goals.

Comparison to Industry Standards

The employee engagement score of 73% stands above both global and local Qualtrics benchmarks, indicating strong internal satisfaction and culture compared to general industry standards.
The efficiency ratio of 49.77% is described as 'industry-low' and contributes to 'top-quartile profitability metrics,' suggesting superior operational efficiency compared to peers.
The 2023-2025 Relative Total Shareholder Return (TSR) of 82.46% ranked at the 94th percentile relative to the KBW Regional Bank Index, demonstrating significantly outperforming shareholder returns compared to regional bank competitors.
Capital ratios (Common Equity Tier 1 Ratio of 16.8% and Total Capital Ratio of 18.00%) remained higher than required regulatory levels for bank holding companies and well-capitalized banks, indicating robust financial health and stability relative to regulatory benchmarks.
The peer group for executive compensation includes Ameris Bancorp, Pinnacle Financial Partners, Atlantic Union Bankshares Corporation, Popular, Inc., BankUnited, Inc., Renasant Corporation, Berkshire Hills Bancorp, Inc., Simmons First National Corp., Community Financial System, Inc., TowneBank, First Financial Bancorp., Trustmark Corporation, First Merchants Corporation, United Bankshares, Inc., Fulton Financial Corporation, United Community Banks, Inc., Hancock Whitney Corporation, WesBanco, Inc., and OFG Bancorp. Popular, Inc. is specifically noted as a relevant competitor in the Puerto Rico market.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Executive Vice President and Chief Consumer Officer and Chief of Staff	Nayda Rivera (previously EVP and Chief Risk Officer)	Nayda Rivera	April 2025	Corporate reorganization and strategic alignment of responsibilities.
Executive Vice President and Chief Operating Officer	Juan C. Pava (previously EVP and Chief Credit Officer)	Juan C. Pava	August 2025	Corporate reorganization and expanded operational oversight.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Board Structure	Maintains an independent Chair of the Board (Roberto R. Herencia) separate from the CEO, with robust and well-defined duties.	Ongoing	Enhances independent oversight and strategic direction, providing a liaison between the Board and senior management.
Director Elections	Employs a majority voting standard for director elections and annual elections for all directors (not a staggered Board).	Ongoing	Increases director accountability to stockholders and promotes responsiveness to stockholder sentiment.
Risk Oversight	The Board oversees enterprise risk management through dedicated committees (Risk, Audit, Credit, Asset/Liability, Compensation), with the Risk Committee providing company-wide oversight.	Ongoing	Ensures comprehensive identification, analysis, measurement, monitoring, reporting, and mitigation of various risks across the Corporation.
Stock Ownership Guidelines	Maintains stock ownership guidelines for executive officers (CEO: 5x annual base salary; other NEOs: 2x annual base salary) and non-management directors (4x Annual Retainer), with all currently in compliance.	Ongoing (amended March 2022 for directors, December 2022 for executives)	Aligns the financial interests of directors and executives with those of stockholders, promoting long-term value creation.
Compensation Clawback Policy	Has a robust clawback policy for incentive-based variable pay in cases of intentional fraud, gross misconduct, or financial restatements due to material noncompliance.	Ongoing	Deters imprudent risk-taking and ensures accountability for financial reporting accuracy, protecting stockholder interests.
Anti-Hedging/Pledging Policy	Prohibits Section 16 officers and directors from pledging company securities as collateral for loans or engaging in hedging/speculative transactions.	Ongoing	Prevents conflicts of interest and discourages short-term speculative trading, reinforcing long-term alignment with company performance.
Board Self-Assessment	Conducts annual self-assessments for the Board and its committees, including individual director self and peer assessments.	Ongoing	Fosters continuous improvement in Board effectiveness, dynamics, and accountability.
Director Retirement Policy	Prohibits directors from standing for election after age 70, with waivers possible on a case-by-case basis (e.g., Daniel E. Frye).	Ongoing	Aims to ensure a balance of experience and fresh perspectives on the Board, while allowing for retention of valuable expertise when warranted.
Corporate Sustainability Governance	The Board and executive leadership oversee the sustainability strategy, with the Governance Committee holding primary responsibility for supervising policies, practices, and disclosures, supported by a management-level Corporate Sustainability Committee.	Established 2021, refined 2025	Integrates sustainability considerations into business strategy, promoting responsible business practices and long-term resilience.

Related Party Transactions

In June 2025, an entity directly owned by directors Juan Acosta Reboyras and Félix Villamil acquired 90% of Turnos Media LLC (Turnos PR).
Turnos PR has a contractual relationship with the Bank since February 2021, providing services to manage and facilitate client waiting processes at branches.
The Audit Committee ratified this related person transaction in August 2025.
During 2025, the Corporation paid Turnos PR approximately $229,642.63 for services rendered under the agreement.

Stakeholder Impact

**Shareholders**: Directly impacted by proposals for director elections, incentive plan adoption, executive compensation approval, and auditor ratification. Benefit from strong financial performance, capital deployment (dividends, buybacks), and increased tangible book value per share. Potential for dilution from the 2026 Omnibus Incentive Plan (3.10%).
**Employees**: Benefit from the proposed 2026 Omnibus Incentive Plan designed to provide long-term incentives, encourage retention, and attract talent. Enhanced employee wellness offerings, talent management initiatives, and an above-benchmark employee engagement score contribute to a positive work environment. Executive officers received base salary increases and adjusted incentive opportunities.
**Customers**: Expected to benefit from advancements in IT infrastructure and digital capabilities aimed at simplifying operations and improving customer experience. Increased digital banking adoption and self-service platform usage reflect efforts to enhance service delivery.
**Community**: Positive impact through significant community investment, including 2,800 volunteer hours, $1.3 million in contributions to non-profit organizations, and the origination of 1,102 CRA-related loans totaling $411.1 million. Financial literacy workshops assisted over 5,000 individuals. Environmental stewardship initiatives like 'Rescate Costero' demonstrate commitment to ecological conservation.
**Regulators**: The company's strong capital ratios, robust risk oversight framework, and compliance with regulatory expectations (including interlock exemptions for the Board Chair) indicate a well-regulated institution.

Next Steps

Stockholders will vote on the election of nine directors, adoption of the 2026 Omnibus Incentive Plan, non-binding approval of 2025 NEO compensation, and ratification of Crowe LLP at the May 6, 2026 Annual Meeting.
The Board will act on any tendered director resignations within 90 days following stockholder vote certification if a nominee is not elected by a majority.
The Compensation Committee will continue to monitor the executive compensation program and general economic, regulatory, and legislative developments.
Base salary increases and adjusted incentive opportunities for certain NEOs will become effective April 1, 2026.
The Corporation expects the next advisory vote on executive compensation at the 2027 Annual Meeting.
Stockholders may submit proposals for the 2027 Annual Meeting by November 25, 2026 (Rule 14a-8) or February 8, 2027 (outside Rule 14a-8).
Stockholder nominations for directors for the 2027 Annual Meeting must be received by April 6, 2027 (assuming a May 6, 2027 meeting date).

Key Dates

Date	Description
February 24, 1998	Effective date of Aurelio Alemán's employment agreement.
May 11, 2009	Effective date of Orlando Berges' employment agreement.
October 2011	Roberto R. Herencia became Director and Chair of the Board.
August 2014	Juan Acosta Reboyras became Director of the Corporation.
February 2015	Luz A. Crespo became Director of the Corporation.
March 16, 2016	Juan Acosta Reboyras became Chair of the Audit Committee.
May 24, 2016	Stockholders approved the 2016 Omnibus Incentive Plan.
October 2017	John A. Heffern became Director of the Corporation.
May 31, 2018	Effective date of Nayda Rivera's employment agreement.
August 2018	Daniel E. Frye became Director of the Corporation.
January 2019	Tracey Dedrick became Director of the Corporation.
July 2020	Sara Alvarez-Cabrero became Secretary of the Board of Directors of First BanCorp and FirstBank Puerto Rico.
October 2020	Félix M. Villamil became Director of the Corporation.
March 2021	Patricia M. Eaves became Director of the Corporation.
May 1, 2021	Effective date of Juan C. Pava's and Lilian Díaz-Bento's employment agreements.
April 1, 2025	Effective date for base salary increases for Mr. Alemán, Mr. Pava, and Mrs. Díaz-Bento.
March 19, 2025	Compensation Committee approved base salary increases and short-term incentive opportunity increase for CEO; granted long-term incentive awards for performance-based shares and time-vested restricted stock to NEOs.
March 31, 2025	Restricted stock awards made effective for Mrs. Eaves.
April 2025	Nayda Rivera changed role to Executive Vice President, Chief Consumer Officer and Chief of Staff.
June 2025	Entity owned by directors Juan Acosta Reboyras and Félix Villamil acquired 90% of Turnos Media LLC.
July 2025	Published the 2024 Corporate Sustainability Report.
August 2025	Juan C. Pava changed role to Executive Vice President and Chief Operating Officer; Audit Committee ratified the related person transaction with Turnos Media LLC.
September 30, 2025	Restricted stock awards made effective for Mr. Acosta Reboyras, Mrs. Crespo, Ms. Dedrick, Mr. Frye, Mr. Heffern, and Mr. Herencia.
October 30, 2025	Restricted stock awards made effective for Mr. Villamil.
December 31, 2025	Fiscal year end for 2025 financial statements and employee population determination for CEO pay ratio.
February 2026	Compensation Committee reviewed results for the 2023-2025 Performance Cycle.
March 9, 2026	Record Date for the 2026 Annual Meeting of Stockholders; date for security ownership information.
March 16, 2026	Vesting date for 2023 Restricted Stock and 2023 Performance Shares.
March 19, 2026	Board nominated directors for election; Board approved the 2026 Omnibus Incentive Plan; Compensation Committee approved base salary increases and incentive opportunity adjustments for certain NEOs.
March 21, 2026	50% of 2024 Restricted Stock vested.
March 25, 2026	Proxy Statement and accompanying proxy card first sent or provided to stockholders.
April 1, 2026	Effective date for approved base salary increases for Mr. Alemán, Mrs. Rivera, and Mr. Pava.
May 5, 2026	Internet and telephone voting for the Annual Meeting closes at 11:59 p.m. Atlantic Standard Time.
May 6, 2026	2026 Annual Meeting of Stockholders (virtual).
May 24, 2026	Expiration of the 2016 Omnibus Incentive Plan.
November 25, 2026	Deadline for stockholder proposals to be included in 2027 proxy materials (Rule 14a-8).
February 8, 2027	Deadline for stockholder proposals for 2027 Annual Meeting (outside Rule 14a-8).
March 7, 2027	Deadline for stockholder director nominations for 2027 Annual Meeting (Rule 14a-19).
March 19, 2027	50% of 2025 Restricted Stock will vest.
March 21, 2027	Remaining 50% of 2024 Restricted Stock will vest; 2024 Performance Shares will vest.
April 6, 2027	Deadline for stockholder director nominations for 2027 Annual Meeting (Amended and Restated By-laws, assuming May 6, 2027 meeting).
March 19, 2028	Remaining 50% of 2025 Restricted Stock will vest; 2025 Performance Shares will vest.
May 5, 2036	Termination date of the 2026 Omnibus Incentive Plan, unless extended by stockholder approval.

Recommendation

buy

First BanCorp demonstrates exceptional financial health and strategic execution, evidenced by record revenues, significant profit growth, and strong capital ratios. The company's commitment to returning value to shareholders through dividends and buybacks, coupled with its superior TSR performance relative to peers, suggests a well-managed and growth-oriented institution. The new incentive plan and focus on digital transformation further support long-term value creation, making it an attractive investment.

Keywords

First BanCorp, FBP, Proxy Statement, Annual Meeting, Shareholder Vote, Corporate Governance, Executive Compensation, Incentive Plan, Financial Performance, Banking, Puerto Rico, SEC Filing, Risk Management, Capital Ratios, Digital Banking, Sustainability, Crowe LLP

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