Analyst Alexander Twerdahl from Sandler O'Neill & Partners feels that First BanCorp. took a step in the right direction with its decision to resume its dividend payout on its series A through E noncumulative perpetual monthly income preferred stock.

Given that the San Juan, Puerto Rico-based company has a lot of excess capital especially in light of the company's outstanding written agreement with the Federal Reserve, it is a positive development that First BanCorp. is being given some capital flexibility, Twerdahl wrote.

"We view any capital action as a vote of confidence and we cannot help but to wonder if allowing even small capital actions could be a precursor to the Fed lifting the written agreement soon," the analyst wrote.

He also expects the company to make more meaningful capital returns to shareholders in the future, particularly through dividends and buybacks. However, he noted that while the company will continue to generate capital, any other significant capital action will happen after the macro environment in Puerto Rico improves and the company can cut its nonperforming loan levels.

The payment date for the preferred stock dividends is Dec. 30. The analyst reiterated his "buy" rating for First BanCorp.'s stock and 12-month price target of $7.50.