FBP Options at Year High as Q3 Earnings Land Today

First BanCorp. reports Q3 results this morning, a Puerto Rico-focused regional bank trading at $27.34, up 2.4% on the week but just below peers that gained a median of 3.2% over the same period.

The most striking data point going into the print is in options. The put/call ratio reached 1.79, the highest reading of the past year and more than two standard deviations above its 20-day average of 1.26. That level of skew reflects unusually heavy demand for downside protection relative to calls, a sharp shift from the more neutral positioning seen through September. The move coincides with a minor pullback from the week's peak: shares closed at $27.34 Wednesday, down 0.9% on the day, while closest peers BPOP, OFG, and USB each rose between 1.4% and 2.1% in the same session.

Short positioning is a different picture. Bearish exposure has drifted slightly lower, with short interest at 4.6% of the free float and roughly 7.2 million shares short, down about 0.2% on the week. The borrow market offers no friction to new shorts: cost to borrow is 0.51%, around half its level a month ago, and availability is extraordinarily loose at over 3,500% of outstanding short interest. Neither metric points to any squeeze risk or unusual conviction on the bearish side.

The analyst community broadly favours the stock. The consensus sits at Overweight/Buy across several covering firms, with a mean price target of $31.43, roughly 15% above the current price. Wells Fargo trimmed its target modestly in late September to $32 while holding its Overweight rating, a nudge lower rather than a change of direction. The bull case centres on a record return on assets of 2.02%, a 5.00% net interest margin, and strong capital ratios, all underpinned by Puerto Rico's still-supportive local economy. The bear case points to a $354 million unrealized securities loss, concentrated real estate and public deposit exposure, and the risk that credit costs normalise higher from recent lows.

Today's print will test whether the bank can sustain its recent profitability trajectory as fee income and loan growth face a more demanding comparison against a strong prior year.