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First BanCorp (NYSE:FBP) reported modest sequential improvements in net interest margins on a GAAP basis, driven by asset mix optimization and disciplined funding cost management. Management emphasized that the reduction in customer deposits was mostly attributable to nonrecurring outflows from a small number of large commercial clients, while retail deposits remained stable, and customer counts increased. The company achieved sequential improvements in key credit quality indicators, while maintaining stable non-performing asset ratios (GAAP) at 0.68% and lowering charge-off rates. Operating expenses remained well controlled despite ongoing technology investments, with management reiterating its 50%-52% efficiency ratio target for future quarters and guiding to modestly higher expense levels for the coming quarters. Strategic capital deployment remained focused on shareholder returns, with ongoing share repurchases and dividends, and a clear commitment to using excess investment portfolio cash flows to support anticipated loan growth in the second half of the year.