FBP Options Hit 52-Week Highs Before Tomorrow's Earnings

First BanCorp. reports Q3 results tomorrow with options positioning at its most defensive reading of the past year, even as short sellers trim exposure and the stock trades near a multi-month high.

The clearest signal this week is in the options market. The put/call ratio jumped to 1.79 on Monday, the highest print in the past 52 weeks and nearly 2.8 standard deviations above its 20-day average of 1.23. That kind of skew reflects heavy demand for downside protection relative to calls, a pattern that stands out against an otherwise steady tape. The stock closed at $27.58 on Tuesday, up 3.3% on the week, roughly in line with closest peers: BPOP added 3.2%, OFG gained 4.1%, and USB rose 3.9%.

Short interest tells a calmer story. Bearish positioning has edged back to 4.6% of the free float, down slightly on the week after a modest uptick over the past month. At roughly 7.2 million shares short, the position is not large enough to generate meaningful squeeze dynamics. Borrow conditions confirm this: cost to borrow has fallen sharply, now at 0.51%, half its level a month ago. Availability is extraordinarily loose at over 3,500% of outstanding short interest, meaning shares are far more plentiful in the lending pool than shorts need. The borrow market is not the tension here.

The Street remains broadly constructive. Most recent analyst moves raised targets following the Q2 print: Wells Fargo lifted its target to $33 in August before trimming it to $32 at end-September, while Benchmark initiated at Buy with a $33 target in July and Truist raised its Buy target to $30. The mean target across coverage sits at $31.43, roughly 14% above the current price. The bull case rests on First BanCorp's record Q2 return on assets of 2.02%, a 5% net interest margin, and a CET1 ratio near 17%, all supported by onshoring investment and government spending across Puerto Rico. Bears point to the concentrated local franchise, a $354 million unrealized securities loss, and the risk that credit costs normalise toward 60 to 70 basis points as the easy credit cycle fades. On valuation, the stock trades at a price-to-earnings multiple of 10.8 times, up marginally on the week, with a price-to-book of 1.94 times. The earnings surprise factor score ranks in the 82nd percentile, reflecting a consistent history of beating estimates, including the Q2 print of $0.62 versus a $0.54 consensus.

One institutional flow worth noting: T. Rowe Price added 1.2 million shares in the quarter ended September, bringing its stake to 3.3% of shares outstanding. State Street also added 565,000 shares in the same period. Both moves are incremental rather than dramatic, but they run against the direction of Vanguard's various entities, which show a net reduction across their combined filings. The recent insider activity is largely compensation mechanics: a cluster of directors received stock awards on September 30, all coded as grants rather than open-market purchases, carrying limited informational weight.

The prior earnings history shows a mixed one-day reaction pattern. The most recent comparable print, in July, produced a 4.4% gain on the day and held most of that into the following week. With the options market now priced for its most defensive posture of the year and results due before tomorrow's open, the ratio of puts to calls is the metric to watch as the print crosses.