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.