First BanCorp Raises Quarterly Dividend 25.0% to $0.25

First BanCorp. raised its quarterly dividend 25.0% to $0.25 a share from $0.20. The shares are scheduled to trade ex-dividend on November 27, 2026, with payment set for December 11, 2026. The increase lifts the annual dividend to $1.00 a share.

Why the dividend changed

The increase is consistent with First BanCorp.’s stated policy of returning roughly all annual earnings to shareholders through dividends and share repurchases. It is a regular quarterly increase, not an adjustment connected to a stock split, merger or spin-off.

The Puerto Rico-based bank entered the decision with strong earnings and capital. First BanCorp. reported third-quarter net income of $96.1 million and diluted earnings of $0.63 a share. Chief Executive Aurelio Alemán described the period as one of strong core performance, stable credit metrics and healthy balance-sheet trends despite a volatile interest-rate environment.

Loan balances increased during the quarter, led by commercial and industrial lending, while core deposits also grew. Management said its lending pipeline supported the low end of its full-year organic loan-growth target and that the company remained on track against its capital-return objective. The bank also reported regulatory capital ratios well above the levels required to be classified as well capitalized.

That combination helps explain the board’s willingness to increase the recurring cash commitment. The company’s annual report had already identified strong capital, ample liquidity and a diversified earnings base as support for continued capital deployment. The new dividend directs more of that capacity to recurring income while buybacks remain the other principal channel for shareholder returns.

Dividend track record

The payment history shows a staircase of increases. First BanCorp. paid $0.16 on the late-2024 ex-dividend date in the record, followed by three payments of $0.18 during 2025 and three payments of $0.20 through August 2026. The new $0.25 rate extends that progression with a larger step than the immediately preceding increases.

Annual cash distributions rose from $0.20 in 2020 to $0.31 in 2021, $0.46 in 2022, $0.56 in 2023 and $0.64 in 2024. The annual increases moderated from 55.0% in 2021 to 48.4% in 2022, 21.7% in 2023 and 14.3% in 2024, but the direction remained upward. The five-year record equates to 29.2% annual growth.

The 2025 line contains three payments totaling $0.54, which is 15.6% below the four-payment 2024 total. Because that entry contains only three payments, it does not establish a renewed annual reduction. First BanCorp. has increased its dividend for 6 consecutive years, while the last annual cut occurred in 2019. The record therefore combines rapid recent growth with evidence that the payout has not been immune to reductions over a longer cycle.

Is the dividend covered?

The dividend consumes 32% of earnings. That leaves a majority of reported profit outside the common dividend, providing room for retained capital, lending activity and buybacks.

For a bank, earnings coverage and regulatory capital are more informative than conventional corporate free-cash-flow measures because customer deposits and lending flows are integral to the business model. First BanCorp.’s latest results showed capital remaining comfortably above regulatory requirements, while management continued to describe asset quality as stable.

SmarterDividends assigns the payout a safety score of 72 and rates the dividend B. That places it in the safe (66-79) range. The grade indicates satisfactory coverage and financial capacity, while stopping short of the highest safety tier. The 2019 cut remains relevant evidence that bank dividends can be reset when earnings or capital conditions deteriorate.

Yield and valuation

At a share price of $26.86, the new annual dividend produces a 3.65% forward yield. That is below the Financial Services sector median forward yield of 5.84%, even after the higher quarterly rate.

The comparison reflects both the dividend and the stock’s 38.7% gain over the past year. A rising share price reduces the yield attached to each dollar invested unless dividend growth keeps pace.

SmarterDividends estimates fair value at $42.65 and classifies the shares as undervalued, with 56% upside to that estimate. The estimate is a valuation reference rather than a forecast, and it is separate from the assessment of dividend coverage.

What to watch

The immediate milestone is the November 27, 2026 ex-dividend date. Investors who own the shares before they begin trading ex-dividend are positioned for the December 11, 2026 payment under standard market settlement rules.

The next quarterly results will provide the first updated look at earnings and capital after the higher rate was established. Relevant operating measures include progress toward management’s organic loan-growth target, deposit costs in a volatile rate environment, credit performance and the bank’s efficiency ratio.

Capital allocation also remains central. First BanCorp. has paired dividends with substantial share repurchases and has described returning roughly all annual earnings as a strategic objective. Future disclosures will show how management divides that capacity between recurring dividends, buybacks and balance-sheet growth while maintaining regulatory capital above internal and supervisory thresholds.