FBP - First BanCorp: A Call Option On Puerto Rico

2024-06-19 10:30:00 ET

Summary

• First BanCorp is a holding company for FirstBank in Puerto Rico with additional branches in US Virgin Islands, British Virgin Islands, and Florida.
• The bank's earnings remain strong, but a focus on buying back stock at a premium over tangible book value is concerning.
• The bank's heavy exposure to Puerto Rico raises concerns about financial performance and balance sheet strength in the face of economic shocks.

Introduction

First BanCorp ( FBP ) is the holding company for FirstBank in Puerto Rico. The bank has 58 branches in Puerto Rico and eight branches on the (US and British) Virgin Islands. Additionally, there are another eight branches in Florida. As First BanCorp is heavily exposed to Puerto Rico, you could say the bank is a call option on Puerto Rico....

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