株探米国株
英語
エドガーで原本を確認する
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
 
20549
____________
FORM
10-Q
(Mark One)
[X]
 
For the quarterly period ended
September 30, 2025
or
[ ]
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
 
EXCHANGE ACT OF 1934
 
For the transition period from ___________________ to
 
___________________
COMMISSION FILE NUMBER
001-14793
FIRST BANCORP
.
(EXACT NAME OF REGISTRANT AS SPECIFIED
 
IN ITS CHARTER)
Puerto Rico
 
66-0561882
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
1519 Ponce de León Avenue
,
Stop 23
San Juan
,
Puerto Rico
 
(Address of principal executive offices)
00908
(Zip Code)
(
787
)
729-8200
(Registrant’s telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock ($0.10 par value per share)
FBP
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed
 
all reports required to be filed by Section 13 or 15(d) of the Securities
 
Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant
 
was required to file such reports), and (2) has been subject
 
to such filing requirements for the past 90
days.
 
Yes
☑
 
No
 
Indicate by check mark whether the registrant has submitted
 
electronically every Interactive Data File required to be submitted
 
pursuant to Rule 405 of Regulation S-T
(§ 232.405 of this chapter) during the preceding 12 months (or for
 
such shorter period that the registrant was required
 
to submit such files).
 
Yes
☑
 
No
 
Indicate by check mark whether the registrant is a large accelerated
 
filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging
growth company.
 
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in
 
Rule 12b-2 of
the Exchange Act.
 
Large accelerated filer
☑
 
Accelerated filer
☐
Non-accelerated filer
☐
 
Smaller reporting company
 
☐
Emerging growth company
 
☐
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to
 
use the extended transition period for complying with any
 
new or revised
financial accounting standards provided pursuant to Section 13(a)
 
of the Exchange Act.
 
Indicate by check mark whether the registrant is a shell company
 
(as defined in Rule 12b-2 of the Exchange Act).
 
Yes
☐
 
No
☑
 
Indicate the number of shares outstanding of each of the
 
issuer’s classes of common stock, as of the latest practicable date.
Common stock:
157,936,923
 
shares outstanding as of November 4, 2025.
2
FIRST BANCORP.
INDEX PAGE
PART
 
I. FINANCIAL INFORMATION
 
PAGE
Item 1.
Financial Statements:
Consolidated
 
Statements
 
of
 
Financial
 
Condition
 
(Unaudited)
 
as
 
of
 
September
 
30,
 
2025
 
and
December 31, 2024
 
Consolidated
 
Statements
 
of
 
Income
 
(Unaudited)
 
–
 
Quarters
 
and
 
Nine-Month
 
Periods
 
ended
September 30, 2025 and 2024
Consolidated
 
Statements
 
of
 
Comprehensive
 
Income
 
(Unaudited)
 
–
 
Quarters
 
and
 
Nine-Month
Periods ended September 30, 2025 and 2024
Consolidated
 
Statements
 
of
 
Cash
 
Flows
 
(Unaudited)
 
–
 
Nine-Month
 
Periods
 
ended
 
September
30, 2025 and 2024
 
Consolidated Statements
 
of Changes in
 
Stockholders’ Equity (Unaudited)
 
– Quarters and
 
Nine-
Month Periods ended September 30, 2025 and 2024
Notes to Consolidated Financial Statements (Unaudited)
Item 2.
Management’s Discussion and Analysis
 
of Financial Condition and Results of Operations
 
 
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
 
Item 4.
Controls and Procedures
PART
 
II. OTHER INFORMATION
Item 1.
Legal Proceedings
 
Item 1A.
Risk Factors
Item 2.
Item 5.
Unregistered Sales of Equity Securities and Use of Proceeds
Other Information
Item 6.
Exhibits
 
SIGNATURES
 
3
Forward-Looking Statements
This Quarterly
 
Report on
 
Form 10-Q
 
(this “Form
 
10-Q”) contains
 
forward-looking statements
 
within the
 
meaning of
 
Section 27A
of the Securities Act of 1933, as
 
amended (the “Securities Act”), and
 
Section 21E of the Securities Exchange
 
Act of 1934, as amended
(the “Exchange Act”),
 
which are subject to
 
the safe harbor created
 
by such sections. When
 
used in this Form
 
10-Q or future filings
 
by
First
 
BanCorp.
 
(the
 
“Corporation,”
 
“we,”
 
“us,”
 
or
 
“our”)
 
with
 
the
 
U.S.
 
Securities
 
and
 
Exchange
 
Commission
 
(the
 
“SEC”),
 
in
 
the
Corporation’s press
 
releases or in other public or
 
stockholder communications made by
 
the Corporation, or in oral statements
 
made on
behalf
 
of
 
the
 
Corporation
 
by,
 
or
 
with
 
the
 
approval
 
of,
 
an
 
authorized
 
executive
 
officer
 
of
 
the
 
Corporation,
 
the
 
words
 
or
 
phrases
“would,”
 
“intends,”
 
“will,”
 
“expect,”
 
“should,”
 
“plans,”
 
“forecast,”
 
“anticipate,”
 
“look
 
forward,”
 
“believes,”
 
and
 
other
 
terms
 
of
similar meaning or import, or the
 
negatives of these terms or variations
 
of them, in connection with
 
any discussion of future operating,
financial or other performance are meant to identify “forward-looking
 
statements.”
The Corporation cautions readers
 
not to place undue reliance on
 
any such “forward-looking statements,” which
 
speak only as of the
date made
 
or,
 
with respect
 
to such
 
forward-looking statements
 
contained in
 
this Form
 
10-Q, the
 
date hereof,
 
and advises
 
readers that
any such
 
forward-looking statements
 
are not
 
guarantees of
 
future performance
 
and involve
 
certain risks,
 
uncertainties, estimates,
 
and
assumptions
 
by us
 
that are
 
difficult
 
to predict
 
.
 
Various
 
factors, some
 
of which
 
are beyond
 
our
 
control,
 
could cause
 
actual results
 
to
differ materially from those expressed in, or implied
 
by, such forward-looking
 
statements.
 
 
Factors
 
that
 
could
 
cause
 
results
 
to
 
differ
 
materially
 
from
 
those
 
expressed
 
in,
 
or
 
implied
 
by,
 
the
 
Corporation’s
 
forward-looking
statements include, but are not
 
limited to, risks described or
 
referenced in Part I, Item 1A,
 
“Risk Factors,” in the Corporation’s
 
Annual
Report on Form 10-K for the fiscal year ended December 31, 2024 (the “2024 Annual
 
Report on Form 10-K”), and the following:
●
the effect
 
of changes
 
in the
 
interest rate
 
environment
 
and inflation
 
levels on
 
the level,
 
composition
 
and performance
 
of the
Corporation’s
 
assets and
 
liabilities, and
 
corresponding
 
effects on
 
the Corporation’s
 
net interest
 
income, net
 
interest margin,
loan originations, deposit attrition, overall results of operations, and liquidity
 
position;
●
volatility
 
in
 
the
 
financial
 
services
 
industry,
 
which
 
could
 
result
 
in,
 
among
 
other
 
things,
 
bank
 
deposit
 
runoffs,
 
liquidity
constraints, and increased regulatory requirements and costs;
●
the effect of continued changes in the fiscal, monetary,
 
and trade policies and regulations of the United States (“U.S.”) federal
government, the
 
Puerto Rico
 
government and
 
other governments,
 
including those
 
determined by
 
the Board
 
of Governors
 
of
the Federal Reserve
 
System (the “Federal
 
Reserve Board”), the Federal
 
Reserve Bank of New
 
York
 
(the “FED”), the
 
Federal
Deposit
 
Insurance
 
Corporation
 
(the
 
“FDIC”),
 
government-sponsored
 
housing
 
agencies
 
and
 
regulators
 
in
 
Puerto
 
Rico,
 
the
U.S., and
 
the U.S.
 
Virgin
 
Islands (the
 
“USVI”) and
 
British Virgin
 
Islands (the
 
“BVI”), that
 
may affect
 
the future
 
results of
the Corporation;
●
uncertainty as
 
to the
 
ability of
 
the Corporation’s
 
banking subsidiary,
 
FirstBank Puerto
 
Rico (“FirstBank”
 
or the
 
“Bank”), to
retain its core
 
deposits and
 
generate sufficient
 
cash flow through
 
its wholesale funding
 
sources, such as
 
securities sold under
agreements
 
to
 
repurchase,
 
Federal
 
Home
 
Loan
 
Bank
 
(“FHLB”)
 
advances,
 
and
 
brokered
 
certificates
 
of
 
deposit
 
(“brokered
CDs”), which may require us to sell investment securities at a loss;
 
●
adverse changes
 
in general political
 
and economic
 
conditions in Puerto
 
Rico, the U.S.,
 
and the USVI
 
and the BVI,
 
including
in the interest
 
rate environment, unemployment
 
rates, market liquidity
 
and volatility,
 
trade policies, housing
 
absorption rates,
real
 
estate
 
markets,
 
and
 
U.S.
 
capital
 
markets,
 
which
 
may
 
affect
 
funding
 
sources,
 
loan
 
portfolio
 
performance
 
and
 
credit
quality,
 
market
 
prices
 
of
 
investment
 
securities,
 
and
 
demand
 
for
 
the
 
Corporation’s
 
products
 
and
 
services,
 
and which
 
may
reduce the Corporation’s revenues
 
and earnings and the value of the Corporation’s
 
assets;
●
the impact
 
of government
 
financial assistance
 
for hurricane
 
recovery and
 
other disaster
 
relief on
 
economic activity
 
in Puerto
Rico, and the timing and pace of disbursements of funds earmarked for
 
disaster relief;
●
the ability
 
of the
 
Corporation,
 
FirstBank,
 
and
 
third-party
 
service providers
 
to identify
 
and prevent
 
cyber-security
 
incidents,
such
 
as
 
data
 
security
 
breaches,
 
ransomware,
 
malware,
 
“denial
 
of
 
service”
 
attacks,
 
“hacking,”
 
identity
 
theft,
 
and
 
state-
sponsored
 
cyberthreats,
 
and
 
the
 
occurrence
 
of
 
and
 
response
 
to
 
any
 
incidents
 
that
 
occur,
 
which
 
may
 
result
 
in
 
misuse
 
or
misappropriation
 
of
 
confidential
 
or
 
proprietary
 
information,
 
disruption,
 
or
 
damage
 
to
 
our
 
systems
 
or
 
those
 
of
 
third-party
service providers on which we rely,
 
increased costs and losses and/or adverse effects
 
to our reputation;
●
general
 
competitive
 
factors
 
and
 
other
 
market
 
risks
 
as
 
well
 
as
 
the
 
implementation
 
of
 
existing
 
or
 
planned
 
strategic
 
growth
opportunities,
 
including
 
risks,
 
uncertainties,
 
and
 
other
 
factors
 
or
 
events
 
related
 
to
 
any
 
business
 
acquisitions,
 
dispositions,
strategic
 
partnerships,
 
strategic
 
operational
 
investments,
 
including
 
systems
 
conversions,
 
and
 
any
 
anticipated
 
efficiencies
 
or
other expected results related thereto;
4
●
uncertainty regarding
 
the implementation
 
of Puerto
 
Rico’s
 
debt restructuring
 
plan (“Plan
 
of Adjustment”
 
or “PoA”)
 
and the
revised fiscal plan for Puerto Rico, as certified on June
 
6, 2025 (the “2025 Fiscal Plan”) by the oversight
 
board established by
the Puerto
 
Rico Oversight,
 
Management,
 
and Economic
 
Stability Act
 
(“PROMESA”),
 
or any
 
revisions
 
to it,
 
on our
 
clients
and loan portfolios, and any potential impact of future economic or political
 
developments and tax regulations in Puerto Rico;
 
●
the
 
impact
 
of
 
changes
 
in
 
accounting
 
standards,
 
or
 
determinations
 
and
 
assumptions
 
in
 
applying
 
those
 
standards,
 
and
 
of
forecasts of economic variables considered for the determination of
 
the allowance for credit losses (“ACL”);
●
the ability of FirstBank to realize the benefits of its net deferred tax assets;
●
the ability of FirstBank to generate sufficient cash flow to pay dividends
 
to the Corporation;
●
environmental, social, and governance (“ESG”) matters, including
 
our climate-related initiatives and commitments,
 
as well as
the impact and potential cost to us of any policies, legislation, or initiatives in opposition
 
to our ESG policies;
 
●
the impacts of natural
 
or man-made disasters, widespread
 
health emergencies, geopolitical
 
conflicts (including sanctions, war
or
 
armed
 
conflict,
 
such
 
as the
 
ongoing
 
conflict
 
in
 
Ukraine, the
 
conflict
 
in
 
the
 
Middle
 
East, the
 
possible
 
expansion
 
of such
conflicts in
 
surrounding areas
 
and potential
 
geopolitical consequences
 
,
 
and the
 
threat of
 
conflict from
 
neighboring countries
in our
 
region), terrorist
 
attacks, or
 
other catastrophic
 
external events,
 
including impacts
 
of such
 
events on
 
general economic
conditions and on the Corporation’s
 
assumptions regarding forecasts of economic variables;
●
the
 
risk
 
that
 
additional
 
portions
 
of
 
the
 
unrealized
 
losses in
 
the
 
Corporation’s
 
debt
 
securities portfolio
 
are
 
determined
 
to
 
be
credit-related, resulting
 
in additional
 
charges to
 
the provision
 
for credit
 
losses on
 
the Corporation’s
 
debt securities
 
portfolio,
and
 
the potential
 
for additional
 
credit losses
 
that could
 
emerge
 
from further
 
downgrades of
 
the U.S.’s
 
Long-Term
 
Foreign-
Currency Issuer Default Rating and negative ratings outlooks;
 
●
the
 
impacts
 
of
 
applicable
 
legislative,
 
tax,
 
or
 
regulatory
 
changes
 
or
 
changes
 
in
 
legislative,
 
tax,
 
or
 
regulatory
 
priorities,
including
 
as
 
a
 
result
 
of
 
the
 
One
 
Big
 
Beautiful
 
Bill
 
Act,
 
signed
 
into
 
law
 
on
 
July
 
4,
 
2025,
 
the
 
reduction
 
in
 
staffing
 
at
 
U.S.
governmental
 
agencies,
 
the
 
effects
 
of
 
the
 
U.S.
 
federal
 
government
 
shutdown
 
that
 
began
 
on
 
October
 
1,
 
2025
 
and
 
political
impasses, including uncertainties
 
regarding the U.S.
 
debt ceiling and federal
 
budget, on the Corporation’s
 
financial condition
or performance;
●
the
 
risk
 
of
 
possible
 
failure
 
or
 
circumvention
 
of
 
the
 
Corporation’s
 
internal
 
controls
 
and
 
procedures
 
and
 
the
 
risk
 
that
 
the
Corporation’s risk management
 
policies may not be adequate;
●
the risk that the FDIC may
 
further increase the deposit insurance
 
premium and/or require further special
 
assessments, causing
an additional increase in the Corporation’s
 
non-interest expenses;
●
any need to recognize impairments on the Corporation’s
 
financial instruments, goodwill, and other intangible assets;
●
the risk
 
that the
 
impact
 
of the
 
occurrence
 
of any
 
of these
 
uncertainties on
 
the Corporation’s
 
capital would
 
preclude
 
further
growth of FirstBank and preclude the Corporation’s
 
Board of Directors (the “Board”) from declaring dividends; and
●
uncertainty as to whether FirstBank will be able to continue to satisfy its regulators regarding, among other things, its asset (In thousands, except for share information)
quality,
 
liquidity
 
plans,
 
maintenance
 
of
 
capital
 
levels,
 
and
 
compliance
 
with
 
applicable
 
laws,
 
regulations
 
and
 
related
requirements.
 
The
 
Corporation
 
does
 
not
 
undertake
 
to
 
and
 
specifically
 
disclaims
 
any
 
obligation
 
to
 
update
 
any
 
“forward-looking
 
statements”
 
to
reflect
 
occurrences
 
or
 
unanticipated
 
events
 
or
 
circumstances
 
after
 
the
 
date
 
of
 
such
 
statements,
 
except
 
as
 
required
 
by
 
the
 
federal
securities laws.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5
FIRST BANCORP.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
September 30, 2025
December 31, 2024
ASSETS
Cash and due from banks
$
897,877
$
1,158,215
Money market investments:
Time deposit with another financial institution
750
500
Other short-term investments
943
700
Total money market investments
1,693
1,200
Available-for-sale debt securities, at fair value (amortized cost of
 
$
4,984,446
 
as of September 30, 2025 and $
5,125,408
 
as of December 31, 2024; ACL of $
658
 
as of September 30, 2025 and $
521
 
as of December 31, 2024)
4,598,303
4,565,302
Held-to-maturity debt securities, at amortized
 
cost, net of ACL of $
698
 
as of September 30, 2025 and $
802
as of December 31, 2024 (fair value of
 
$
269,253
 
as of September 30, 2025 and $
308,040
 
as of December 31, 2024)
272,665
316,984
Equity securities
44,390
52,018
Total investment securities
4,915,358
4,934,304
Loans held for investment, net of ACL of
 
$
246,990
 
as of September 30, 2025 and $
243,942
 
as of December 31, 2024
12,801,694
12,502,614
Mortgage loans held for sale, at lower of
 
cost or market
12,546
15,276
Total loans, net
12,814,240
12,517,890
Accrued interest receivable on loans and
 
investments
66,109
71,881
Premises and equipment, net
126,968
133,437
Other real estate owned (“OREO”)
9,343
17,306
Deferred tax asset, net
146,926
136,356
Goodwill
38,611
38,611
Other intangible assets
3,676
6,967
Other assets
300,534
276,754
Total assets
$
19,321,335
$
19,292,921
LIABILITIES
Non-interest-bearing deposits
$
5,374,894
$
5,547,538
Interest-bearing deposits
11,486,153
11,323,760
Total deposits
16,861,047
16,871,298
Long-term borrowings
290,000
561,700
Accounts payable and other liabilities
252,243
190,687
Total liabilities
17,403,290
17,623,685
Commitments and contingencies (See
 
Note 19)
(nil)
(nil)
STOCKHOLDERS’ EQUITY
Common stock, $
0.10
 
par value,
2,000,000,000
 
shares authorized;
223,663,116
 
shares issued;
159,134,896
shares outstanding as of September 30,
 
2025 and
163,868,877
 
shares outstanding as of December 31, 2024
22,366
22,366
Additional paid-in capital
961,441
964,964
Retained earnings, includes legal surplus
 
reserve of $
230,178
 
as of each of September 30, 2025 and
 
December 31, 2024
2,209,198
2,038,812
Treasury stock (at cost),
64,528,220
 
shares as of September 30, 2025 and
59,794,239
 
shares as of December 31, 2024
(882,504)
(790,350)
Accumulated other comprehensive loss,
 
net of tax of $
8,221
 
as of each of September 30, 2025 and
 
December 31, 2024
(392,456)
(566,556)
Total stockholders’ equity
1,918,045
1,669,236
Total liabilities and stockholders’ equity
$
19,321,335
$
19,292,921
The accompanying notes are an integral part
 
of these statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6
FIRST BANCORP.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Quarter Ended September 30,
Nine-Month Period Ended September 30,
2025
2024
2025
2024
(In thousands, except per share information)
Interest and dividend income:
 
Loans
$
247,216
$
243,720
$
731,121
$
720,776
 
Investment securities
25,832
22,173
73,080
69,553
 
Money market investments and interest-bearing cash accounts
9,695
8,782
33,797
25,096
 
Total interest and dividend income
282,743
274,675
837,998
815,425
Interest expense:
 
Deposits
61,345
63,704
178,480
190,400
 
Short-term borrowings
10
-
86
-
 
Long-term borrowings
3,472
8,907
13,260
26,813
 
Total interest expense
64,827
72,611
191,826
217,213
 
Net interest income
217,916
202,064
646,172
598,212
Provision for credit losses - expense (benefit):
 
Loans and finance leases
18,270
16,470
63,488
41,317
 
Unfunded loan commitments
(756)
(1,041)
(532)
(1,177)
 
Debt securities
79
(184)
34
(1,123)
 
Provision for credit losses - expense
17,593
15,245
62,990
39,017
 
Net interest income after provision for credit losses
200,323
186,819
583,182
559,195
Non-interest income:
 
Service charges and fees on deposit accounts
9,811
9,684
29,207
29,071
 
Mortgage banking activities
3,309
3,199
9,887
9,500
 
Insurance commission income
2,618
3,003
10,961
11,296
 
Card and processing income
11,682
11,768
35,037
34,603
 
Other non-interest income
3,374
4,848
12,386
14,053
 
Total non-interest income
 
30,794
32,502
97,478
98,523
Non-interest expenses:
 
Employees’ compensation and benefits
59,761
59,081
181,956
176,043
 
Occupancy and equipment
22,185
22,424
67,112
65,656
 
Business promotion
3,884
4,116
10,657
12,317
 
Professional service fees
11,903
12,538
34,998
37,645
 
Taxes, other than income taxes
6,092
5,665
17,682
16,202
 
FDIC deposit insurance
2,236
2,164
6,707
7,582
 
Net loss (gain) on OREO operations
1,033
(1,339)
(687)
(6,400)
 
Credit and debit card processing expenses
7,889
7,095
20,746
20,453
 
Communications
2,294
2,170
6,747
6,528
 
Other non-interest expenses
7,617
9,021
25,335
26,514
 
Total non-interest expenses
124,894
122,935
371,253
362,540
Income before income taxes
106,223
96,386
309,407
295,178
Income tax expense
5,697
22,659
51,642
72,155
Net income
 
$
100,526
$
73,727
$
257,765
$
223,023
Net income attributable to common stockholders
 
$
100,526
$
73,727
$
257,765
$
223,023
Net income per common share:
 
Basic
$
0.63
$
0.45
$
1.60
$
1.35
 
Diluted
$
0.63
$
0.45
$
1.59
$
1.35
The accompanying notes are an integral part of these statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7
FIRST BANCORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
Quarter Ended September 30,
Nine-Month Period Ended September 30,
2025
2024
2025
2024
(In thousands)
Net income
 
$
100,526
$
73,727
$
257,765
$
223,023
Other comprehensive income, net of tax:
Available-for-sale debt securities:
Net unrealized holding gains on debt securities
 
(1)
48,834
160,054
174,100
155,549
Other comprehensive income for the period, net of tax
48,834
160,054
174,100
155,549
 
Total comprehensive income
$
149,360
$
233,781
$
431,865
$
378,572
(1)
Net unrealized holding gains on available-for-sale debt securities have no tax effect because securities are either tax-exempt, held by an International Banking Entity (“IBE”), or have a full deferred tax asset valuation Cash flows from operating activities:
allowance.
The accompanying notes are an integral part of these statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8
FIRST BANCORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine-Month Period Ended September 30,
2025
2024
(In thousands)
Net income
 
$
257,765
$
223,023
Adjustments to reconcile net income to net cash provided by operating
 
activities:
Depreciation and amortization
13,128
13,995
Amortization of intangible assets
3,291
5,123
Provision for credit losses
62,990
39,017
Deferred income tax (benefit) expense
(10,570)
12,643
Stock-based compensation
7,987
6,789
Unrealized gain on derivative instruments
(472)
(232)
Net gain on disposals or sales, and impairments of premises
 
and equipment and other assets
-
(68)
Net gain on sales of loans and loans held-for-sale valuation adjustments
 
(3,262)
(2,864)
Net (accretion) amortization of discounts, premiums, and
 
deferred loan fees and costs
(766)
449
Originations and purchases of loans held for sale
(124,210)
(116,430)
Sales and repayments of loans held for sale
130,123
113,176
Amortization of broker placement fees
509
554
Net amortization of premiums and discounts on investment securities
145
3,887
(Increase) decrease in accrued interest receivable
(2,751)
10,248
Increase in accrued interest payable
1,399
9,890
Decrease (increase) in other assets
8,851
(11,293)
Decrease in other liabilities
(2,862)
(558)
 
Net cash provided by operating activities
341,295
307,349
Cash flows from investing activities:
Net disbursements on loans held for investment
(398,533)
(365,298)
Proceeds from sales of loans held for investment
2,475
18,362
Proceeds from sales of repossessed assets
41,125
51,129
Purchases of available-for-sale debt securities
(922,383)
(44,063)
Proceeds from principal repayments and maturities of available-for-sale
 
debt securities
1,134,582
530,232
Proceeds from principal repayments of held-to-maturity debt securities
45,402
32,467
Additions to premises and equipment
(6,955)
(8,387)
Proceeds from sales of premises and equipment and other assets
-
1,317
Net redemptions (purchases) of equity securities
7,751
(2,637)
Proceeds from the settlement of insurance claims - investing activities
-
670
 
Net cash (used in) provided by investing activities
(96,536)
213,792
Cash flows from financing activities:
Net decrease in deposits
(43,588)
(268,556)
Repayments of long-term borrowings
(269,850)
(48,500)
Repurchase of outstanding common stock
(103,664)
(102,369)
Dividends paid on common stock
(87,502)
(79,509)
 
Net cash used in financing activities
(504,604)
(498,934)
Net (decrease) increase in cash and cash equivalents
(259,845)
22,207
Cash and cash equivalents at beginning of year
1,159,415
663,164
Cash and cash equivalents at end of period
$
899,570
$
685,371
Cash and cash equivalents include:
Cash and due from banks
$
897,877
$
684,028
Money market investments
1,693
1,343
$
899,570
$
685,371
The accompanying notes are an integral part of these statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9
FIRST BANCORP.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’
 
EQUITY
(Unaudited)
Quarter Ended September 30,
Nine-Month Period Ended September 30,
2025
2024
2025
2024
(In thousands, except per share information)
Common Stock
$
22,366
$
22,366
$
22,366
$
22,366
Additional Paid-In Capital:
 
Balance at beginning of period
959,629
961,254
964,964
965,707
 
Stock-based compensation expense
2,109
1,942
7,987
6,789
 
Common stock reissued under stock-based compensation plan
(297)
(274)
(11,653)
(9,621)
 
Restricted stock forfeited
-
51
143
98
 
Balance at end of period
961,441
962,973
961,441
962,973
Retained Earnings:
 
Balance at beginning of period
2,137,421
1,941,980
2,038,812
1,846,112
 
Net income
 
100,526
73,727
257,765
223,023
 
Dividends on common stock ($
0.18
 
per share and $
0.16
 
per share for the quarters ended
 
 
September 30, 2025 and 2024, respectively; $
0.54
 
per share and $
0.48
 
per share for the
 
nine-month periods ended September 30, 2025 and 2024, respectively)
(28,749)
(26,288)
(87,379)
(79,716)
 
Balance at end of period
2,209,198
1,989,419
2,209,198
1,989,419
Treasury Stock (at cost):
 
Balance at beginning of period
(832,671)
(790,465)
(790,350)
(697,406)
 
Common stock repurchases (See Note 11)
(50,130)
(10)
(103,664)
(102,369)
 
Common stock reissued under stock-based compensation plan
297
274
11,653
9,621
 
Restricted stock forfeited
-
(51)
(143)
(98)
 
Balance at end of period
(882,504)
(790,252)
(882,504)
(790,252)
Accumulated Other Comprehensive Loss, net
 
of tax:
 
Balance at beginning of period
(441,290)
(643,675)
(566,556)
(639,170)
 
Other comprehensive income, net of tax
48,834
160,054
174,100
155,549
 
Balance at end of period
(392,456)
(483,621)
(392,456)
(483,621)
 
Total stockholders’ equity
$
1,918,045
$
1,700,885
$
1,918,045
$
1,700,885
The accompanying notes are an integral part of these statements.
10
FIRST BANCORP.
INDEX TO NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
PAGE
Note 1 –
Basis of Presentation and Significant Accounting Policies
 
Note 2 –
Debt Securities
Note 3 –
Loans Held for Investment
Note 4
–
Allowance for Credit Losses for Loans and Finance Leases
Note 5 –
Other Real Estate Owned (“OREO”)
Note 6 –
Non-Consolidated Variable Interest Entities (“VIEs”) and Servicing Assets
Note 7 –
Deposits
Note 8 –
Borrowings
Note 9 –
Earnings per Common Share
Note 10 –
Stock-Based Compensation
Note 11 –
Stockholders’ Equity
Note 12 –
Accumulated Other Comprehensive Loss
Note 13 –
Employee Benefit Plans
Note 14–
Income Taxes
Note 15
–
Fair Value
Note 16
–
Revenue from Contracts with Customers
Note 17 –
Segment Information
Note 18 –
Supplemental Statements
 
of Cash Flows Information
Note 19 –
Regulatory Matters, Commitments, and Contingencies
Note 20 –
First BanCorp. (Holding Company Only) Financial Information
11
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS
(Unaudited)
NOTE 1 – BASIS
 
OF PRESENTATION AND
 
SIGNIFICANT
 
ACCOUNTING
 
POLICIES
 
The Consolidated
 
Financial Statements
 
(unaudited) for
 
the quarter
 
and nine-month
 
period ended
 
September 30,
 
2025 (the
 
“unaudited
consolidated financial
 
statements”) of
 
First BanCorp.
 
(the “Corporation”)
 
have been
 
prepared in
 
conformity with
 
the accounting
 
policies
stated
 
in
 
the
 
Corporation’s
 
Audited
 
Consolidated
 
Financial
 
Statements
 
for
 
the
 
fiscal
 
year
 
ended
 
December
 
31,
 
2024
 
(the
 
“audited
consolidated financial
 
statements”) included
 
in the
 
2024 Annual
 
Report on
 
Form 10-K,
 
as updated
 
by the
 
information contained
 
in this
report.
 
Certain
 
information
 
and
 
note
 
disclosures
 
normally
 
included
 
in
 
the
 
financial
 
statements
 
prepared
 
in
 
accordance
 
with
 
generally
accepted accounting principles in the United States of America
 
(“GAAP”) have been condensed or omitted from these statements pursuant
to
 
the
 
rules
 
and
 
regulations
 
of
 
the
 
SEC
 
and,
 
accordingly,
 
these
 
financial
 
statements
 
should
 
be
 
read
 
in
 
conjunction
 
with
 
the
 
audited
consolidated financial statements, which are included in the 2024 Annual Report on Form 10-K. All adjustments (consisting only of normal
recurring adjustments) that are, in the opinion of management,
 
necessary for a fair presentation of the statement of
 
financial position, results
of operations and cash flows
 
for the interim periods have
 
been reflected. All significant
 
intercompany accounts and transactions
 
have been
eliminated in consolidation. The Corporation evaluates subsequent events through
 
the date of filing with the SEC.
 
The results of operations for the quarter and nine-month period ended September 30, 2025 are not necessarily indicative of the results to
be expected
 
for the
 
entire
 
year.
Adoption of New Accounting Requirements
The Corporation was not impacted
 
by the adoption of the
 
following Accounting Standards Updates (“ASUs”) during
 
the first quarter of
2025:
●
ASU 2024-02, “Codification Improvements –
 
Amendments to Remove References to the Concepts Statements”
●
ASU 2024-01, “Compensation – Stock Compensation (Topic 718):
 
Stock Application of Profits Interest and Similar Awards”
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
12
 
 
 
 
 
 
 
 
Recently Issued Accounting Standards Not Yet
 
Effective or Not Yet
 
Adopted
Standard
Description
Effective Date
Effect on the Financial Statements
ASU 2025-06, “Intangibles
– Goodwill and Other –
Internal-Use Software
(Subtopic 350-40): Targeted
Improvements to the
Accounting for Internal-Use
Software”
In September 2025, the FASB issued ASU
2025-06, which, among other things, removes
all references to project stages in ASC 350-40
and replaces them with a probability-based
assessment framework to determine the
appropriate point at which capitalization of
software development costs should begin.
Effective for annual reporting
periods beginning after December
15, 2027, and interim reporting
periods within those annual
reporting periods. Early adoption
is permitted as of the beginning of
an annual reporting period. Any of
the following transition
approaches may be elected: a
prospective transition approach, a
modified transition approach that
is based on the status of the
project and whether software costs
were capitalized before the date of
adoption, and a retrospective
transition approach.
The Corporation does not expect
to be materially impacted by the
adoption of this ASU during the
first quarter of 2028.
ASU 2025-05, “Financial
Instruments – Credit Losses
(Topic 326): Measurement
of Credit Losses for
Accounts Receivable and
Contract Assets”
In July 2025, the FASB issued ASU 2025-05,
which provides a practical expedient for
current accounts receivable and current
contract assets accounted for pursuant to ASC
Topic 606. Such practical expedient, if
elected, allows an entity to assume that
current economic conditions as of the
reporting date remain unchanged over their
remaining lives.
 
Effective for annual reporting
periods beginning after December
15, 2025, and interim reporting
periods within those annual
reporting periods. Early adoption
is permitted for both interim and
annual financial statements that
have not yet been made available
for issuance. Prospective
application is required.
The Corporation does not expect
to be materially impacted by the
adoption of this ASU during the
first quarter of 2026.
ASU 2023-09 - Income
Taxes (Topic
 
740):
Improvements to Income
Tax Disclosures, Issued
December 2023
In December 2023, the FASB issued ASU
2023-09 to improve the annual income tax
disclosures to, among other things, require
disclosure of the following: eight prescribed
categories in the tabular rate reconciliation
(using both percentages and dollar amounts)
with certain reconciling items at or above 5%
further broken out by nature and/or
jurisdiction; income taxes paid (net of refunds
received) disaggregated by federal, state, and
foreign taxes; the amount of income taxes
paid (net of refunds received) disaggregated
by individual jurisdictions in which income
taxes paid (net of refunds received) is equal to
or greater than 5% of total income taxes paid
(net of refunds received); income or loss from
continuing operations before income tax
expense or benefit disaggregated between
domestic and foreign; and income tax expense
or benefit from continuing operations
disaggregated by federal, state, and foreign.
Effective for fiscal years ending
on December 31, 2025. The
amendments in this ASU should
be applied on a prospective basis.
Retrospective application is
permitted.
The Corporation has carried out
the necessary data updates to
support these expanded disclosure
requirements. The Corporation
will adopt this ASU in its Form
10-K for the year ending
December 31, 2025 applying a
retrospective approach.
Accordingly, comparative
disclosures will be provided for
all periods presented. As part of
the adoption, the Corporation will
expand its income tax rate
reconciliation to separately
present nontaxable or
nondeductible items, as well as
changes in unrecognized tax
benefits. Additionally, the
Corporation will provide
disaggregated disclosures for its
major jurisdictions, which include
local and federal taxes.
The Corporation
 
does not
 
expect to
 
be impacted
 
by the
 
following ASU
 
issued during
 
2025 that
 
is not
 
yet effective
 
or has
 
not yet
been adopted:
●
ASU 2025-03, “Business Combinations (Topic
 
805) and Consolidation (Topic
 
810): Determining the Accounting Acquirer
in the Acquisition of a Variable
 
Interest Entity”
For
 
other
 
issued
 
accounting
 
standards
 
not
 
yet
 
effective
 
or
 
not
 
yet
 
adopted,
 
see
 
Note
 
1
 
–
 
“Nature
 
of
 
Business
 
and
 
Summary
 
of
Significant Accounting Policies,” to the audited consolidated financial
 
statements included in the 2024 Annual Report on Form 10-K.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
13
NOTE 2 – DEBT SECURITIES
Available-for-Sale
 
Debt Securities
The amortized
 
cost, gross
 
unrealized gains
 
and losses,
 
ACL, estimated
 
fair value,
 
and weighted-average
 
yield of
 
available-for-sale
debt securities by contractual maturities as of September 30, 2025 and
 
December 31, 2024 were as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2025
Amortized cost
(1)
Gross Unrealized
ACL
Fair Value
(2)
Weighted-
Gains
Losses
average yield%
(Dollars in thousands)
U.S. Treasury securities:
 
Due within one year
$
496,714
$
94
$
5
$
-
$
496,803
4.11
U.S. government-sponsored entities' (“GSEs”) obligations:
 
Due within one year
775,287
25
6,302
-
769,010
0.80
 
After 1 to 5 years
506,086
-
22,532
-
483,554
0.92
 
After 10 years
6,909
-
59
-
6,850
4.47
Puerto Rico government obligation:
 
After 10 years
(3)
2,753
-
846
328
1,579
-
United States and Puerto Rico government obligations
1,787,749
119
29,744
328
1,757,796
1.77
Mortgage-backed securities (“MBS”):
 
Residential MBS:
 
Freddie Mac (“FHLMC”) certificates:
 
Due within one year
96
-
-
-
96
2.16
 
After 1 to 5 years
9,720
-
189
-
9,531
2.14
 
After 5 to 10 years
154,316
-
11,704
-
142,612
1.39
 
After 10 years
821,743
552
122,155
-
700,140
1.60
 
985,875
552
134,048
-
852,379
1.57
 
Ginnie Mae (“GNMA”) certificates:
 
 
Due within one year
2
-
-
-
2
6.14
 
After 1 to 5 years
4,867
-
139
-
4,728
0.73
 
After 5 to 10 years
56,815
8
3,755
-
53,068
1.67
 
 
After 10 years
165,106
636
17,219
-
148,523
3.37
226,790
644
21,113
-
206,321
2.89
 
Fannie Mae (“FNMA”) certificates:
 
Due within one year
123
-
-
-
123
1.30
 
After 1 to 5 years
14,749
-
280
-
14,469
2.15
 
 
After 5 to 10 years
294,158
72
20,580
-
273,650
1.61
 
After 10 years
809,915
711
105,828
-
704,798
1.56
 
1,118,945
783
126,688
-
993,040
1.58
 
Collateralized mortgage obligations (“CMOs”) issued
 
or guaranteed by the FHLMC, FNMA, and GNMA:
 
After 10 years
624,637
2,875
40,829
-
586,683
3.76
 
Private label:
 
After 5 to 10 years
5,298
-
1,636
330
3,332
6.25
Total Residential MBS
2,961,545
4,854
324,314
330
2,641,755
2.15
 
Commercial MBS:
 
After 1 to 5 years
33,316
9
1,348
-
31,977
2.52
 
After 5 to 10 years
10,409
-
1,189
-
9,220
1.68
 
After 10 years
190,927
195
34,067
-
157,055
2.39
Total Commercial MBS
234,652
204
36,604
-
198,252
2.37
Total MBS
3,196,197
5,058
360,918
330
2,840,007
2.16
Other:
 
Due within one year
500
-
-
-
500
2.34
Total available-for-sale debt securities
$
4,984,446
$
5,177
$
390,662
$
658
$
4,598,303
2.02
(1)
Excludes accrued
 
interest receivable
 
on available-for-sale
 
debt securities
 
that totaled
 
$
9.4
 
million as
 
of September
 
30, 2025
 
reported as
 
part of
 
accrued interest
 
receivable on
 
loans and
 
investment securities
 
in the
consolidated statements of financial condition, and excluded from the estimate of credit losses.
(2)
Includes $
264.9
 
million (amortized cost - $
301.2
 
million) that was pledged at the FHLB as collateral for borrowings and letters of credit as well as $
2.9
 
billion (amortized cost - $
3.1
 
billion) pledged as collateral for the
uninsured portion of government deposits. The secured parties are not permitted to sell or repledge the collateral.
(3)
Consists of a residential
 
pass-through MBS issued by the
 
Puerto Rico Housing Finance Authority
 
(the “PRHFA”) that
 
is collateralized by certain
 
second mortgages originated under
 
a program launched by the
 
Puerto
Rico government in 2010 and is in nonaccrual status based on the delinquency status of the underlying second mortgage loans collateral.
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
14
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2024
Amortized cost
(1)
Gross Unrealized
ACL
Fair value
(2)
Weighted-
Gains
Losses
average yield%
(Dollars in thousands)
U.S. Treasury securities:
 
Due within one year
$
59,992
$
-
$
803
$
-
$
59,189
0.75
U.S. GSEs’ obligations:
 
Due within one year
1,090,678
-
22,826
-
1,067,852
0.79
 
After 1 to 5 years
817,835
39
53,195
-
764,679
0.96
 
After 10 years
7,835
-
35
-
7,800
4.73
Puerto Rico government obligation:
 
After 10 years
(3)
2,951
-
986
345
1,620
-
United States and Puerto Rico government obligations
1,979,291
39
77,845
345
1,901,140
0.87
MBS:
 
Residential MBS:
 
FHLMC certificates:
 
After 1 to 5 years
14,477
-
460
-
14,017
2.14
 
After 5 to 10 years
122,548
-
9,977
-
112,571
1.52
 
After 10 years
936,531
25
168,691
-
767,865
1.51
1,073,556
25
179,128
-
894,453
1.52
 
GNMA certificates:
 
 
Due within one year
881
-
6
-
875
2.68
 
After 1 to 5 years
8,025
-
350
-
7,675
0.71
 
After 5 to 10 years
67,181
-
6,125
-
61,056
1.86
 
 
After 10 years
142,330
16
22,041
-
120,305
2.78
218,417
16
28,522
-
189,911
2.42
 
FNMA certificates:
 
After 1 to 5 years
21,921
-
689
-
21,232
2.13
 
 
After 5 to 10 years
244,966
-
18,874
-
226,092
1.74
 
After 10 years
979,366
16
159,560
-
819,822
1.51
 
1,246,253
16
179,123
-
1,067,146
1.56
CMOs issued or guaranteed by the FHLMC, FNMA,
 
 
and GNMA:
 
After 10 years
377,812
74
52,338
-
325,548
2.88
 
Private label:
 
After 5 to 10 years
4,886
-
1,430
57
3,399
6.69
 
After 10 years
1,200
-
285
119
796
6.32
6,086
-
1,715
176
4,195
6.62
Total Residential MBS
2,922,124
131
440,826
176
2,481,253
1.79
 
Commercial MBS:
 
After 1 to 5 years
33,835
13
2,286
-
31,562
2.59
 
 
After 5 to 10 years
10,621
-
1,653
-
8,968
1.67
 
After 10 years
178,537
-
37,158
-
141,379
2.06
Total Commercial MBS
222,993
13
41,097
-
181,909
2.12
Total MBS
3,145,117
144
481,923
176
2,663,162
1.82
Other
Due within one year
1,000
-
-
-
1,000
2.32
Total available-for-sale debt securities
$
5,125,408
$
183
$
559,768
$
521
$
4,565,302
1.45
(1)
Excludes accrued
 
interest receivable
 
on available-for-sale
 
debt
 
securities that
 
totaled $
9.6
 
million as
 
of December
 
31, 2024
 
reported as
 
part of
 
accrued interest
 
receivable on
 
loans and
 
investment
 
securities in
 
the
consolidated statements of financial condition, and excluded from the estimate of credit losses.
(2)
Includes $
466.1
 
million (amortized cost - $
533.7
 
million) that was pledged
 
at the FHLB as
 
collateral for borrowings and
 
letters of credit as well
 
as $
3.0
 
billion (amortized cost -
 
$
3.3
 
billion) pledged as collateral for
 
the
uninsured portion of government deposits. The secured parties are not permitted to sell or repledge the collateral.
(3)
Consists of a residential pass-through MBS issued by the PRHFA
 
that is collateralized by certain second mortgages originated under a program
 
launched by the Puerto Rico government in 2010 and is in
 
nonaccrual status
based on the delinquency status of the underlying second mortgage loans collateral.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
15
During the first
 
nine months of
 
2025, the Corporation
 
purchased approximately $
994.8
 
million in available-for-sale
 
debt securities,
of
 
which
 
$
592.8
 
million
 
were U.S
 
Treasury
 
securities
 
with
 
an
 
average
 
yield
 
of
4.15
% and
 
$
402.0
 
million
 
were
 
U.S agencies
 
MBS
with an average yield of
5.24
%, including $
384.2
 
million of residential MBS.
Maturities
 
of
 
available-for-sale
 
debt
 
securities
 
are
 
based
 
on
 
the
 
period
 
of
 
final
 
contractual
 
maturity.
 
Expected
 
maturities
 
might
differ
 
from
 
contractual
 
maturities
 
because
 
they
 
may
 
be
 
subject
 
to
 
prepayments
 
and/or
 
call
 
options.
 
The
 
weighted-average
 
yield
 
on
available-for-sale
 
debt
 
securities
 
is
 
based
 
on
 
amortized
 
cost
 
and,
 
therefore,
 
does
 
not
 
give
 
effect
 
to
 
changes
 
in
 
fair
 
value.
 
The
 
net
unrealized loss
 
on available-for-sale
 
debt securities
 
is presented
 
as part
 
of accumulated
 
other comprehensive
 
loss in
 
the consolidated
statements of financial condition.
The
 
following
 
tables
 
present
 
the
 
fair
 
value
 
and
 
gross
 
unrealized
 
losses
 
of
 
the
 
Corporation’s
 
available-for-sale
 
debt
 
securities,
aggregated by
 
investment category
 
and length of
 
time that individual
 
securities have
 
been in a
 
continuous unrealized
 
loss position, as
of September 30, 2025 and December 31, 2024. The tables also include debt
 
securities for which an ACL was recorded.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of September 30, 2025
Less than 12 months
12 months or more
Total
Unrealized
Unrealized
Unrealized
Fair Value
 
Losses
Fair Value
 
Losses
Fair Value
 
Losses
(In thousands)
 
U.S. Treasury and U.S. GSEs’
 
obligations
$
156,093
$
61
$
1,247,412
$
28,837
$
1,403,505
$
28,898
 
Puerto Rico government obligation
-
-
1,579
846
(1)
1,579
846
 
MBS:
 
Residential MBS:
 
FHLMC
-
-
809,506
134,048
809,506
134,048
 
GNMA
20,286
148
158,847
20,965
179,133
21,113
 
FNMA
-
-
938,952
126,688
938,952
126,688
 
CMOs issued or guaranteed by the FHLMC,
 
FNMA, and GNMA
40,999
159
174,556
40,670
215,555
40,829
 
Private label
-
-
3,332
1,636
(1)
3,332
1,636
 
Commercial MBS
7,764
163
139,350
36,441
147,114
36,604
$
225,142
$
531
$
3,473,534
$
390,131
$
3,698,676
$
390,662
(1)
Unrealized losses do not include the credit loss component recorded
 
as part of the ACL. As of September 30, 2025, the
 
PRHFA bond and private label MBS
 
had an ACL of $
0.3
 
million
and $0.4 million, respectively.
As of December 31, 2024
Less than 12 months
12 months or more
Total
Unrealized
Unrealized
Unrealized
Fair Value
 
Losses
Fair Value
 
Losses
Fair Value
 
Losses
(In thousands)
 
U.S. Treasury and U.S. GSEs’
 
obligations
$
8,005
$
35
$
1,886,046
$
76,824
$
1,894,051
$
76,859
 
Puerto Rico government obligation
-
-
1,620
986
(1)
1,620
986
 
MBS:
 
Residential MBS:
 
FHLMC
36,224
85
857,492
179,043
893,716
179,128
 
GNMA
22,281
508
166,470
28,014
188,751
28,522
 
FNMA
53,325
132
1,012,331
178,991
1,065,656
179,123
 
CMOs issued or guaranteed by the FHLMC,
 
FNMA, and GNMA
52,778
248
187,772
52,090
240,550
52,338
 
Private label
-
-
4,195
1,715
(1)
4,195
1,715
 
Commercial MBS
44,831
823
131,152
40,274
175,983
41,097
$
217,444
$
1,831
$
4,247,078
$
557,937
$
4,464,522
$
559,768
(1)
Unrealized losses do not include the credit loss component recorded as part of the ACL. As of December 31, 2024, the PRHFA bond and private label MBS had an ACL of $ Debt securities issued by U.S. government agencies, U.S. GSEs, and the U.S. Treasury, including notes and MBS, accounted for
0.3
 
million
and $
0.2
 
million, respectively.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
16
 
Assessment for Credit Losses
substantially
 
all
 
of
 
the
 
total
 
available-for-sale
 
portfolio
 
as
 
of
 
September
 
30,
 
2025,
 
and
 
the
 
Corporation
 
expects
 
no
 
credit
 
losses
 
on
these securities, given
 
the explicit and
 
implicit guarantees
 
provided by
 
the U.S. federal
 
government. Because
 
the decline
 
in fair
 
value
is attributable to
 
changes in interest
 
rates, and not
 
credit quality,
 
and because,
 
as of September
 
30, 2025, the
 
Corporation did not
 
have
the intent to sell these U.S. government
 
and agencies debt securities and determined
 
that it was likely that it will not be
 
required to sell
these
 
securities
 
before
 
their
 
anticipated
 
recovery,
 
the
 
Corporation
 
does
 
not
 
consider
 
impairments
 
on
 
these
 
securities
 
to
 
be
 
credit
related. The
 
Corporation’s
 
credit loss
 
assessment was
 
concentrated mainly
 
on private
 
label MBS and
 
on the
 
Puerto Rico
 
government
debt security, for
 
which credit losses are evaluated on a quarterly basis.
 
Private label MBS
 
held as part
 
of the Corporation’s
 
available for sale
 
portfolio consist of
 
trust certificates issued
 
by an unaffiliated
party
 
backed
 
by
 
fixed-rate,
 
single-family
 
residential
 
mortgage
 
loans
 
in
 
the
 
U.S.
 
mainland
 
with
 
original
 
FICO
 
scores
 
over
 
700
 
and
moderate
 
loan-to-value
 
ratios (under
80
%), as
 
well
 
as moderate
 
delinquency
 
levels.
 
The interest
 
rate
 
on
 
these
 
private label
 
MBS is
variable, tied
 
to
3-month CME Term Secured Overnight Financing Rate (“SOFR”
) plus
 
a tenor
 
spread adjustment
 
of
0.26161
% and
the
 
original
 
spread
 
limited
 
to
 
the
 
weighted-average
 
coupon
 
of
 
the
 
underlying
 
collateral.
 
The
 
Corporation
 
determined
 
the
 
ACL
 
for
private
 
label
 
MBS
 
based
 
on
 
a
 
risk-adjusted
 
discounted
 
cash
 
flow
 
methodology
 
that
 
considers
 
the
 
structure
 
and
 
terms
 
of
 
the
instruments.
 
The
 
Corporation
 
utilized
 
probability
 
of default
 
(“PDs”)
 
and
 
loss-given
 
default
 
(“LGDs”)
 
that
 
considered,
 
among
 
other
things, historical
 
payment performance,
 
loan-to-value attributes,
 
and relevant
 
current and
 
forward-looking
 
macroeconomic variables,
such as
 
regional unemployment
 
rates and
 
the housing
 
price index.
 
Under this
 
approach, expected
 
cash flows
 
(interest and
 
principal)
were discounted
 
at the U.S.
 
Treasury yield
 
curve as of
 
the reporting
 
date. See
 
Note 15
 
– “Fair Value
 
”
 
for the significant
 
assumptions
used in the valuation of the private label MBS as of September 30, 2025 and December
 
31, 2024.
For the residential
 
pass-through MBS issued
 
by the PRHFA
 
held as part of
 
the Corporation’s
 
available-for-sale portfolio
 
backed by
second
 
mortgage
 
residential
 
loans
 
in
 
Puerto
 
Rico,
 
the
 
ACL
 
was
 
determined
 
based
 
on
 
a
 
discounted
 
cash
 
flow
 
methodology
 
that
considered the structure and
 
terms of the debt security.
 
The expected cash flows were
 
discounted at the U.S. Treasury
 
yield curve plus
a spread as
 
of the reporting date
 
and compared to
 
the amortized cost. The
 
Corporation utilized PDs and
 
LGDs that considered,
 
among
other
 
things,
 
historical
 
payment
 
performance,
 
loan-to-value
 
attributes,
 
and
 
relevant
 
current
 
and
 
forward-looking
 
macroeconomic
variables, such as
 
regional unemployment
 
rates, the housing
 
price index,
 
and expected recovery
 
from the PRHFA
 
guarantee. PRHFA,
not the
 
Puerto Rico
 
government, provides
 
a guarantee
 
in the event
 
of default
 
and subsequent
 
foreclosure of
 
the properties
 
underlying
the
 
second
 
mortgage
 
loans.
 
In
 
the
 
event
 
that
 
the
 
second
 
mortgage
 
loans
 
default
 
and
 
the
 
collateral
 
is
 
insufficient
 
to
 
satisfy
 
the
outstanding
 
balance
 
of
 
this
 
residential
 
pass-through
 
MBS,
 
PRHFA’s
 
ability
 
to
 
honor
 
such
 
guarantee
 
will
 
depend
 
on,
 
among
 
other
factors,
 
its
 
financial
 
condition
 
at
 
the
 
time
 
such
 
obligation
 
becomes
 
due
 
and
 
payable.
 
Deterioration
 
of
 
the
 
Puerto
 
Rico
 
economy
 
or
fiscal health of the PRHFA
 
could impact the value of this security,
 
resulting in additional losses to the Corporation.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
17
The following
 
table presents
 
a roll-forward
 
of the ACL
 
on available-for-sale
 
debt securities
 
by major
 
security type
 
for the quarters
and nine-month periods ended September 30, 2025 and 2024:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended September 30,
2025
2024
Private label
MBS
Puerto Rico
 
Government
Obligation
Total
Private label
MBS
Puerto Rico
 
Government
Obligation
Total
(In thousands)
Beginning balance
$
176
$
337
$
513
$
163
$
386
$
549
Provision for credit losses – expense (benefit)
 
155
(9)
146
-
(36)
(36)
Net (charge-offs) recoveries
(1)
-
(1)
13
-
13
 
ACL on available-for-sale debt securities
$
330
$
328
$
658
$
176
$
350
$
526
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine-Month Period Ended September 30,
2025
2024
Private label
MBS
Puerto Rico
 
Government
Obligation
Total
Private label
MBS
Puerto Rico
 
Government
Obligation
Total
(In thousands)
Beginning balance
$
176
$
345
$
521
$
116
$
395
$
511
Provision for credit losses - expense (benefit)
155
(17)
138
-
(45)
(45)
Net (charge-offs) recoveries
(1)
-
(1)
60
-
60
 
ACL on available-for-sale debt securities
$
330
$
328
$
658
$
176
$
350
$
526
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
18
Held-to-Maturity Debt Securities
The
 
amortized
 
cost,
 
gross
 
unrecognized
 
gains
 
and
 
losses,
 
estimated
 
fair
 
value,
 
ACL,
 
weighted-average
 
yield
 
and
 
contractual
maturities of held-to-maturity debt securities as of September 30, 2025
 
and December 31, 2024 were as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2025
Amortized cost
(1) (2)
Gross Unrecognized
Fair value
Weighted-
Gains
Losses
ACL
average yield%
(Dollars in thousands)
Government bonds:
Due within one year
$
1,017
$
64
$
4
$
1,077
$
2
5.11
After 1 to 5 years
56,379
2,139
163
58,355
416
7.28
After 5 to 10 years
10,313
676
162
10,827
89
5.06
After 10 years
14,870
54
-
14,924
191
7.77
Total government bonds
82,579
2,933
329
85,183
698
7.06
MBS:
 
Residential MBS:
FHLMC certificates:
After 1 to 5 years
9,214
-
142
9,072
-
3.03
After 10 years
15,826
-
543
15,283
-
4.31
25,040
-
685
24,355
-
3.84
GNMA certificates:
After 10 years
11,577
-
438
11,139
-
3.29
FNMA certificates:
After 5 to 10 years
9,583
-
392
9,191
-
3.11
After 10 years
46,977
-
1,392
45,585
-
4.41
56,560
-
-
1,784
54,776
-
4.19
CMOs issued or guaranteed by
 
FHLMC, FNMA, and GNMA:
After 10 years
23,399
-
558
22,841
-
3.43
Total Residential MBS
116,576
-
3,465
113,111
-
3.87
 
Commercial MBS:
Due within one year
9,112
-
41
9,071
-
3.48
After 10 years
65,096
-
3,208
61,888
-
1.94
Total Commercial MBS
74,208
-
3,249
70,959
-
2.13
Total MBS
190,784
-
6,714
184,070
-
3.20
Total held-to-maturity debt securities
$
273,363
$
2,933
$
7,043
$
269,253
$
698
4.36
(1)
Excludes accrued
 
interest receivable
 
on held-to-maturity
 
debt securities
 
that totaled
 
$
2.0
 
million as
 
of September
 
30, 2025
 
reported as
 
part of
 
accrued interest
 
receivable on
 
loans and
 
investment securities
 
in the
consolidated statements of financial condition, and excluded from the estimate of credit losses.
(2)
Includes $
204.7
 
million (fair value - $
200.8
 
million) that serves as collateral for the uninsured portion of government deposits. The secured parties are not permitted to sell or repledge the collateral.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
19
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2024
Amortized cost
(1) (2)
Gross Unrecognized
Fair value
Weighted-
Gains
Losses
ACL
average yield%
(Dollars in thousands)
Government bonds:
Due within one year
$
2,214
$
134
$
6
$
2,342
$
6
5.07
After 1 to 5 years
61,289
2,724
438
63,575
433
7.33
After 5 to 10 years
13,184
811
205
13,790
127
5.79
After 10 years
15,755
146
-
15,901
236
8.07
Total government bonds
92,442
3,815
649
95,608
802
7.18
MBS:
 
Residential MBS:
FHLMC certificates:
After 5 to 10 years
12,112
-
353
11,759
-
3.03
After 10 years
16,936
-
1,142
15,794
-
4.30
29,048
-
1,495
27,553
-
3.77
GNMA certificates:
After 10 years
13,472
-
842
12,630
-
3.29
FNMA certificates:
After 10 years
61,233
-
3,786
57,447
-
4.19
CMOs issued or guaranteed by
 
FHLMC, FNMA, and GNMA:
After 10 years
25,566
-
1,321
24,245
-
3.49
Total Residential MBS
129,319
-
7,444
121,875
-
3.86
 
Commercial MBS:
After 1 to 5 years
9,258
-
151
9,107
-
3.48
After 10 years
86,767
-
5,317
81,450
-
3.92
Total Commercial MBS
96,025
-
5,468
90,557
-
3.88
Total MBS
225,344
-
12,912
212,432
-
3.87
Total held-to-maturity debt securities
$
317,786
$
3,815
$
13,561
$
308,040
$
802
4.83
(1)
Excludes accrued
 
interest receivable
 
on held-to-maturity
 
debt securities
 
that totaled
 
$
4.1
million as of December 31, 2024 reported as part of accrued interest receivable on loans and investment securities in the September 30, 2025 and December 31, 2024, including debt securities for which an ACL was recorded:
consolidated statements of financial condition, and excluded from the estimate of credit losses.
(2)
Includes $
198.6
 
million (fair value - $
192.4
 
million) that serves as collateral for the uninsured portion of government deposits. The secured parties are not permitted to sell or repledge the collateral.
 
 
 
 
 
 
 
 
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
20
The
 
following
 
tables
 
present
 
the
 
Corporation’s
 
held-to-maturity
 
debt
 
securities’
 
fair
 
value
 
and
 
gross
 
unrecognized
 
losses,
aggregated
 
by
 
category
 
and
 
length
 
of
 
time
 
that
 
individual
 
securities
 
had
 
been
 
in
 
a
 
continuous
 
unrecognized
 
loss
 
position,
 
as
 
of
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of September 30, 2025
Less than 12 months
12 months or more
Total
Unrecognized
Unrecognized
Unrecognized
Fair Value
 
Losses
Fair Value
 
Losses
Fair Value
 
Losses
(In thousands)
 
Government bonds
$
-
$
-
$
16,652
$
329
$
16,652
$
329
 
MBS:
 
Residential MBS:
 
FHLMC certificates
-
-
24,355
685
24,355
685
 
GNMA certificates
-
-
11,139
438
11,139
438
 
FNMA certificates
-
-
54,776
1,784
54,776
1,784
 
CMOs issued or guaranteed by FHLMC,
 
FNMA, and GNMA
-
-
22,841
558
22,841
558
 
Commercial MBS
-
-
70,959
3,249
70,959
3,249
Total held-to-maturity debt securities
$
-
$
-
$
200,722
$
7,043
$
200,722
$
7,043
As of December 31, 2024
Less than 12 months
12 months or more
Total
Unrecognized
Unrecognized
Unrecognized
Fair Value
 
Losses
Fair Value
 
Losses
Fair Value
 
Losses
(In thousands)
 
Government bonds
$
-
$
-
$
20,071
$
649
$
20,071
$
649
 
MBS:
 
Residential MBS:
 
FHLMC certificates
-
-
27,553
1,495
27,553
1,495
 
GNMA certificates
-
-
12,630
842
12,630
842
 
FNMA certificates
-
-
57,447
3,786
57,447
3,786
 
CMOs issued or guaranteed by FHLMC,
 
FNMA, and GNMA
-
-
24,245
1,321
24,245
1,321
 
Commercial MBS
-
-
90,557
5,468
90,557
5,468
Total held-to-maturity debt securities
$
-
$
-
$
232,503
$
13,561
$
232,503
$
13,561
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
21
The
 
Corporation
 
classifies
 
the
 
held-to-maturity
 
debt
 
securities
 
portfolio
 
into
 
the
 
following
 
major
 
security
 
types:
 
MBS
 
issued
 
or
guaranteed
 
by
 
GSEs
 
and
 
underlying
 
collateral
 
and
 
government
 
bonds,
 
primarily
 
consisting
 
of
 
Puerto
 
Rico
 
municipal
 
bonds.
 
The
Corporation does not
 
recognize an
 
ACL for MBS
 
issued or guaranteed
 
by GSEs
 
since they are
 
highly rated by
 
major rating agencies
 
and
have a
 
long history
 
of no
 
credit losses.
 
In the
 
case of
 
government bonds,
 
the Corporation
 
determines the
 
ACL based
 
on the
 
product of
 
a
cumulative PD and LGD, and
 
the amortized cost basis of the
 
bonds over their remaining expected
 
life as described in Note 1
 
– “Nature of
Business
 
and
 
Summary of
 
Significant
 
Accounting
 
Policies,” to
 
the audited
 
financial
 
statements
 
included
 
in
 
the 2024
 
Annual
 
Report on
Form 10-K.
The Corporation
 
performs periodic
 
credit quality
 
reviews on
 
these issuers.
 
All of
 
the government
 
bonds were
 
current as
 
to scheduled
contractual payments as
 
of September 30, 2025.
 
The ACL of government
 
bonds was $
0.7
 
million as of
 
September 30, 2025, compared
 
to
$
0.8
 
million as of December 31, 2024.
 
 
The following table presents
 
the activity in the
 
ACL for held-to-maturity debt
 
securities by major security
 
type for the quarters
 
and
nine-month periods ended September 30, 2025 and 2024:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government Bonds
Quarter Ended September 30,
2025
2024
(In thousands)
Beginning balance
$
765
$
1,267
Provision for credit losses – benefit
(67)
(148)
ACL on held-to-maturity debt securities
$
698
$
1,119
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government Bonds
Nine-Month Period Ended September 30,
2025
2024
(In thousands)
Beginning Balance
$
802
$
2,197
Provision for credit losses - benefit
(104)
(1,078)
ACL on held-to-maturity debt securities
$
698
$
1,119
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
22
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit Quality Indicators:
The
 
held-to-maturity
 
debt
 
securities
 
portfolio
 
consisted
 
of
 
GSEs’
 
MBS,
 
for
 
which
 
the
 
Corporation
 
expects
 
no
 
credit
 
losses,
 
and
financing arrangements
 
with the
 
government issued
 
in bond form
 
,
 
which are
 
accounted for as
 
securities but
 
are underwritten
 
as loans
with
 
features
 
that
 
are
 
typically
 
found
 
in
 
commercial
 
loans.
 
Accordingly,
 
the
 
Corporation
 
monitors
 
the
 
credit
 
quality
 
of
 
these
government
 
bonds through
 
the use
 
of internal
 
credit-risk ratings,
 
which
 
are generally
 
updated
 
on a
 
quarterly
 
basis. The
 
Corporation
considers
 
a
 
municipal
 
bond
 
as
 
a
 
criticized
 
asset
 
if
 
its
 
risk
 
rating
 
is
 
Special
 
Mention,
 
Substandard,
 
Doubtful,
 
or
 
Loss.
 
Government
bonds that do not meet the criteria
 
for classification as criticized assets are
 
considered to be Pass-rated securities.
 
For the definitions of
the internal-credit ratings, see Note 3 – “Debt Securities,” to
 
the audited consolidated financial statements included in the
 
2024 Annual
Report on Form 10-K.
The
 
Corporation
 
has
 
a
 
Loan
 
Review
 
Group
 
that
 
reports
 
directly
 
to
 
the
 
Corporation’s
 
Risk
 
Management
 
Committee
 
and
administratively
 
to
 
the
 
Chief
 
Risk
 
Officer.
 
The
 
Loan
 
Review
 
Group
 
performs
 
annual
 
comprehensive
 
credit
 
process
 
reviews
 
of
 
the
Bank’s
 
commercial
 
loan
 
portfolios,
 
including
 
the
 
above-mentioned
 
government
 
bonds
 
accounted
 
for
 
as
 
held-to-maturity
 
debt
securities. The
 
objective of
 
these loan
 
reviews is
 
to assess
 
accuracy of
 
the Bank’s
 
determination and
 
maintenance of
 
loan risk
 
rating
and its adherence
 
to lending policies, practices
 
and procedures.
 
The monitoring performed
 
by this group
 
contributes to the assessment
of compliance
 
with credit
 
policies and
 
underwriting standards,
 
the determination
 
of the
 
current level
 
of credit
 
risk, the
 
evaluation
 
of
the
 
effectiveness
 
of
 
the
 
credit
 
management
 
process,
 
and
 
the
 
identification
 
of
 
any
 
deficiency
 
that
 
may
 
arise
 
in
 
the
 
credit-granting
process. Based on
 
its findings, the
 
Loan Review Group
 
recommends corrective
 
actions, if necessary,
 
that help in
 
maintaining a
 
sound
credit process. The Loan Review Group reports the results of the credit process
 
reviews to the Risk Management Committee.
As of September 30, 2025 and December 31, 2024, all government bonds
 
classified as held-to-maturity were classified as Pass.
 
No
 
held-to-maturity debt
 
securities were
 
on nonaccrual
 
status, 90 days
 
past due
 
and still accruing,
 
or past
 
due as
 
of September
 
30,
2025 and December 31, 2024. A security is considered to be past due once it is 30 days contractually past due under the terms of the NOTE 3 – LOANS HELD FOR INVESTMENT
agreement.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
23
 
The
 
following table
 
provides information
 
about
 
the
 
loan
 
portfolio held
 
for
 
investment by
 
portfolio segment
 
and
 
disaggregated by
geographic locations
 
as of the indicated
 
dates:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of September 30,
As of December 31,
2025
2024
(In thousands)
Puerto Rico and Virgin Islands region:
Residential mortgage loans, mainly secured by first mortgages
$
2,367,018
$
2,323,205
Construction loans
235,313
184,427
Commercial mortgage loans
 
1,765,181
1,867,894
Commercial and Industrial (“C&I”) loans
2,451,416
2,325,875
Consumer loans
3,730,287
3,750,205
Loans held for investment
$
10,549,215
$
10,451,606
Florida region:
Residential mortgage loans, mainly secured by first mortgages
$
522,063
$
505,226
Construction loans
24,550
43,969
Commercial mortgage loans
 
784,194
698,090
C&I loans
1,162,825
1,040,163
Consumer loans
5,837
7,502
Loans held for investment
$
2,499,469
$
2,294,950
Total:
Residential mortgage loans, mainly secured by first mortgages
$
2,889,081
$
2,828,431
Construction loans
259,863
228,396
Commercial mortgage loans
 
2,549,375
2,565,984
C&I loans
(1)
3,614,241
3,366,038
Consumer loans
3,736,124
3,757,707
Loans held for investment
(2)
13,048,684
12,746,556
ACL on loans and finance leases
(246,990)
(243,942)
 
Loans held for investment, net
$
12,801,694
$
12,502,614
(1)
As of September 30, 2025 and
 
December 31, 2024, includes $
873.7
 
million and $
780.9
 
million, respectively, of commercial loans
 
that were secured by real estate
and for which the primary source of repayment at origination was
 
not dependent upon such real estate.
(2)
Includes accretable fair value net purchase discounts of $
21.2
 
million and $
23.6
 
million as of September 30, 2025 and December 31, 2024, respectively.
Various
 
loans were
 
assigned as
 
collateral for
 
borrowings, government
 
deposits, certain
 
time deposits
 
accounts, and
 
related unused
commitments.
 
The carrying
 
value of
 
loans pledged
 
as collateral
 
amounted
 
to $
5.7
 
billion and
 
$
5.4
 
billion as
 
of September
 
30, 2025
and
 
December
 
31,
 
2024,
 
respectively.
 
As
 
of
 
September
 
30,
 
2025
 
and
 
December
 
31,
 
2024,
 
loans
 
pledged
 
as
 
collateral
 
include
 
$
2.1
billion
 
and
 
$
1.7
 
billion
 
respectively,
 
that
 
were
 
pledged
 
at
 
the
 
FHLB
 
as
 
collateral
 
for
 
borrowings
 
and
 
letters
 
of
 
credit;
 
$
3.4
 
billion
pledged as collateral
 
to secure borrowing
 
capacity at the
 
FED Discount Window
 
as of each
 
of September 30,
 
2025 and December
 
31,
2024; $
127.0
million pledged to secure as collateral for the uninsured portion of government deposits, compared to $ The Corporation’s aging of the loan portfolio held for investment, as well as information about nonaccrual loans with no ACL, by
163.5
 
million as
of
 
December
 
31,
 
2024;
 
and
 
$
110.1
 
million
 
pledged
 
to
 
secure
 
certain
 
time
 
deposits
 
accounts,
 
compared
 
to
 
$
123.0
 
million
 
as
 
of
December 31, 2024.
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
24
portfolio classes as of September 30, 2025 and December 31, 2024 are as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of September 30, 2025
Days Past Due and Accruing
Current
(1)
30-59
60-89
90+
(2) (3) (4)
Nonaccrual
(5)
Total loans held
for investment
Nonaccrual
Loans with no
ACL
(6)
(In thousands)
Residential mortgage loans, mainly secured by first mortgages:
 
FHA/VA government-guaranteed
 
loans
(1)
(2) (4)
$
72,308
$
-
$
2,755
$
13,186
$
-
$
88,249
$
-
 
Conventional residential mortgage loans
(1) (3) (5)
2,741,356
-
24,514
6,096
28,866
2,800,832
121
Commercial loans:
 
Construction loans
(1)
254,272
-
-
-
5,591
259,863
956
 
Commercial mortgage loans
(1) (3) (5) (6)
2,526,586
-
477
875
21,437
2,549,375
13,288
 
C&I loans
(5)
3,581,511
9,019
1,091
2,970
19,650
3,614,241
15,513
Consumer loans:
 
Auto loans
1,974,125
59,261
10,044
-
14,225
2,057,655
950
 
Finance leases
880,533
13,933
2,173
-
3,029
899,668
57
 
Personal loans
327,357
5,176
2,940
-
2,054
337,527
-
 
Credit cards
281,720
4,438
2,896
5,764
-
294,818
-
 
Other consumer loans
140,831
2,568
1,648
-
1,409
146,456
-
 
Total loans held for investment
$
12,780,599
$
94,395
$
48,538
$
28,891
$
96,261
$
13,048,684
$
30,885
 
(1)
According to
 
the Corporation’s
 
delinquency policy and
 
consistent with the
 
instructions for the
 
preparation of the
 
Consolidated Financial
 
Statements for Bank
 
Holding Companies (FR
 
Y-9C)
 
required by
 
the Federal
Reserve Board, residential mortgage,
 
commercial mortgage, and construction
 
loans are considered past
 
due when the borrower
 
is in arrears on
 
two or more monthly
 
payments. FHA/VA
 
government-guaranteed loans,
conventional residential mortgage loans, commercial mortgage, and construction loans past due 30-59 days, but less than two payments in arrears, as of September 30,
 
2025 amounted to $
8.6
 
million, $
63.0
 
million, $
1.9
million, and $
0.1
 
million, respectively.
(2)
It is the Corporation’s policy to report
 
delinquent Federal Housing Authority (“FHA”)/U.S. Department of Veterans
 
Affairs (“VA”)
 
government-guaranteed residential mortgage loans as past-due loans 90 days and still
accruing as
 
opposed to
 
nonaccrual loans.
 
The Corporation
 
continues accruing
 
interest on
 
these loans
 
until they
 
have passed
 
the 15-month
 
delinquency mark,
 
taking into
 
consideration the
 
FHA interest
 
curtailment
process. These balances include $
5.0
 
million of residential mortgage loans guaranteed by the FHA that were over 15 months delinquent as of September 30, 2025.
(3)
Includes purchased credit deteriorated (“PCD”) loans previously accounted
 
for under ASC Subtopic 310-30 for
 
which the Corporation elected to treat pools of
 
these loans as single assets both at the
 
time of adoption of
current expected
 
credit loss
 
(“CECL”) methodology on
 
January 1, 2020
 
and on an
 
ongoing basis for
 
credit loss measurement.
 
These loans
 
will continue to
 
be excluded
 
from nonaccrual loan
 
statistics as long
 
as the
Corporation can reasonably estimate
 
the timing and amount
 
of cash flows expected
 
to be collected on
 
the loan pools. The
 
portion of such loans
 
contractually past due 90 days
 
or more, amounting to
 
$
5.0
 
million as of
September 30, 2025 ($
4.1
 
million conventional residential mortgage loans and $
0.9
 
million commercial mortgage loans), is presented in the loans past due 90 days or more and still accruing category in the table above.
(4)
Included rebooked loans, which were previously pooled
 
into GNMA securities, amounting to $
3.8
 
million as of September 30, 2025. Under
 
the GNMA program, the Corporation has the option
 
but not the obligation to
repurchase loans
 
that meet
 
GNMA’s
 
specified delinquency
 
criteria. For
 
accounting purposes,
 
these loans
 
subject to
 
the repurchase
 
option are
 
required to
 
be reflected
 
on the
 
financial statements
 
with an
 
offsetting
liability.
(5)
Nonaccrual loans in the Florida region amounted to $
22.7
 
million as of September 30, 2025, of which $
12.2
 
million was a commercial mortgage loan, $
10.3
 
million were residential mortgage loans, and $
0.2
 
million was
a C&I loan.
(6)
Includes $
12.2
 
million related to a nonaccrual commercial mortgage loan with no ACL in the Florida region as of September 30, 2025.
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
25
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2024
Days Past Due and Accruing
Current
(1)
30-59
60-89
90+
(2) (3) (4)
Nonaccrual
(5)
Total loans held
for investment
Nonaccrual
Loans with no
ACL
(6)
(In thousands)
Residential mortgage loans, mainly secured by first mortgages:
 
FHA/VA government-guaranteed
 
loans
(1)
(2) (4)
$
70,529
$
-
$
2,907
$
18,816
$
-
$
92,252
$
-
 
Conventional residential mortgage loans
(1) (3) (5)
2,666,959
-
29,867
7,404
31,949
2,736,179
-
Commercial loans:
 
Construction loans
227,031
-
-
-
1,365
228,396
968
 
Commercial mortgage loans
(1) (3)
2,554,226
-
-
907
10,851
2,565,984
6,732
 
C&I loans
 
3,336,465
1,589
575
6,895
20,514
3,366,038
1,189
Consumer loans:
 
Auto loans
1,935,995
61,524
13,354
-
15,305
2,026,178
1,032
 
Finance leases
875,663
15,879
4,092
-
3,812
899,446
275
 
Personal loans
349,588
6,591
3,593
-
2,136
361,908
3
 
Credit cards
303,311
5,366
3,969
8,368
-
321,014
-
 
Other consumer loans
143,957
2,222
1,447
-
1,535
149,161
-
 
Total loans held for investment
$
12,463,724
$
93,171
$
59,804
$
42,390
$
87,467
$
12,746,556
$
10,199
 
(1)
According to
 
the Corporation’s
 
delinquency policy
 
and consistent
 
with the
 
instructions for
 
the preparation
 
of the
 
Consolidated Financial
 
Statements for
 
Bank Holding
 
Companies (FR
 
Y-9C)
 
required by
 
the Federal
Reserve Board, residential
 
mortgage, commercial mortgage,
 
and construction loans
 
are considered past
 
due when the
 
borrower is in
 
arrears on two
 
or more monthly
 
payments. FHA/VA
 
government-guaranteed loans,
conventional residential mortgage loans,
 
and commercial mortgage loans
 
past due 30-59 days,
 
but less than two payments
 
in arrears, as of
 
December 31, 2024 amounted to
 
$
8.8
 
million, $
65.6
 
million, and $
1.0
 
million,
respectively.
(2)
It is
 
the Corporation’s
 
policy to
 
report delinquent
 
FHA/VA
 
government-guaranteed residential
 
mortgage loans
 
as past-due
 
loans 90
 
days and
 
still accruing
 
as opposed
 
to nonaccrual
 
loans. The
 
Corporation continues
accruing interest on these
 
loans until they have
 
passed the 15-month delinquency mark,
 
taking into consideration the
 
FHA interest curtailment process.
 
These balances include $
8.0
 
million of residential mortgage
 
loans
guaranteed by the FHA that were over 15 months delinquent as of December 31, 2024.
(3)
Includes PCD loans previously accounted for under ASC Subtopic 310-30 for which the Corporation elected to treat pools of these loans as single assets both at the time of adoption of CECL on January 1, 2020 and on an
ongoing basis for credit loss measurement. These loans will
 
continue to be excluded from nonaccrual loan statistics as long
 
as the Corporation can reasonably estimate the timing and
 
amount of cash flows expected to be
collected on the loan pools. The
 
portion of such loans contractually past
 
due 90 days or more,
 
amounting to $
6.2
 
million as of December 31,
 
2024 ($
5.3
 
million conventional residential mortgage loans,
 
and $
0.9
 
million
commercial mortgage loans), is presented in the loans past due 90 days or more and still accruing category in the table above.
(4)
Include rebooked loans,
 
which were previously
 
pooled into GNMA
 
securities, amounting to
 
$
5.7
 
million as of
 
December 31, 2024.
 
Under the GNMA
 
program, the Corporation
 
has the option
 
but not the
 
obligation to
repurchase loans that meet GNMA’s
 
specified delinquency criteria. For accounting purposes, these loans subject to the repurchase option are required to be reflected on the financial statements with an offsetting liability.
(5)
Nonaccrual loans in the Florida region amounted to $
8.6
 
million as of December 31, 2024, of which $
8.5
 
million were residential mortgage loans.
(6)
There were
no
 
nonaccrual loans with no ACL in the Florida region as of December 31, 2024.
When
 
a
 
loan
 
is placed
 
in
 
nonaccrual
 
status,
 
any
 
accrued
 
but uncollected
 
interest
 
income
 
is reversed
 
and
 
charged
 
against interest
income
 
and the
 
amortization of
 
any net
 
deferred fees
 
is suspended.
 
The amount
 
of accrued
 
interest reversed
 
against interest
 
income
totaled $
0.8
 
million and $
2.4
 
million for the quarter
 
and nine-month period ended
 
September 30, 2025, respectively,
 
compared to $
0.8
million and $
2.3
 
million for the same periods
 
in 2024, respectively.
 
For the quarter and
 
nine-month period ended September
 
30, 2025,
interest income recognized on nonaccrual
 
loans amounted to $
0.4
 
million and $
1.1
 
million, respectively,
 
compared to $
0.5
 
million and
$
1.4
 
million for the same periods in 2024, respectively.
As of
 
September 30,
 
2025, the
 
recorded investment
 
on residential
 
mortgage loans
 
collateralized by
 
residential real
 
estate property
that
 
were
 
in
 
the
 
process
 
of
 
foreclosure
 
amounted
 
to
 
$
26.6
 
million,
 
including
 
$
7.1
 
million
 
of
 
FHA/VA
 
government-guaranteed
mortgage
 
loans,
 
and
 
$
3.2
 
million
 
of
 
PCD
 
loans
 
acquired
 
prior
 
to
 
the
 
adoption,
 
on
 
January
 
1,
 
2020,
 
of
 
CECL.
 
The
 
Corporation
commences
 
the
 
foreclosure
 
process
 
on
 
residential
 
real
 
estate
 
loans
 
when
 
a
 
borrower
 
becomes
120
 
days
 
delinquent.
 
Foreclosure
procedures
 
and
 
timelines
 
vary
 
depending
 
on
 
whether
 
the
 
property
 
is
 
located
 
in
 
a
 
judicial
 
or
 
non-judicial
 
state.
 
Occasionally,
foreclosures may be delayed due to, among other reasons, mandatory
 
mediations, bankruptcy,
 
court delays,
 
and title issues.
Credit Quality Indicators:
The Corporation
 
categorizes loans
 
into risk
 
categories based
 
on relevant
 
information
 
about the
 
ability of
 
the borrowers
 
to service
their debt
 
such as
 
current financial
 
information, historical
 
payment experience,
 
credit documentation,
 
public information,
 
and current
economic
 
trends,
 
among
 
other
 
factors.
 
The
 
Corporation
 
analyzes
 
non-homogeneous
 
loans,
 
such
 
as commercial
 
mortgage,
 
C&I,
 
and
construction loans individually
 
to classify the loans’ credit
 
risk. The Corporation
 
periodically reviews its commercial
 
and construction
loans
 
to
 
evaluate
 
if
 
they
 
are
 
properly
 
classified.
 
The
 
frequency
 
of
 
these
 
reviews
 
will
 
depend
 
on
 
the
 
amount
 
of
 
the
 
aggregate
outstanding
 
debt,
 
and
 
the
 
risk
 
rating
 
classification
 
of
 
the
 
obligor.
 
In
 
addition,
 
during
 
the
 
renewal
 
and
 
annual
 
review
 
process
 
of
applicable credit facilities,
 
the Corporation evaluates
 
the corresponding loan
 
grades. The Corporation
 
uses the same definition
 
for risk
ratings as those
 
described for Puerto
 
Rico municipal bonds
 
accounted for
 
as held-to-maturity debt
 
securities, as discussed
 
in Note 3
 
–
“Debt Securities,” to the audited consolidated financial statements included
 
in the 2024 Annual Report on Form 10-K.
 
For residential mortgage and consumer loans, the Corporation evaluates
 
credit quality based on its interest accrual status.
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
26
Based on
 
the most
 
recent analysis
 
performed, the
 
amortized cost
 
of commercial
 
and construction
 
loans by portfolio
 
classes and
 
by
origination year
 
based on
 
the internal
 
credit-risk category
 
as of
 
September 30,
 
2025, the
 
gross charge
 
-offs for
 
the nine-month
 
period
ended September
 
30, 2025
 
by portfolio
 
classes and
 
by origination
 
year, and
 
the amortized
 
cost of
 
commercial and
 
construction loans
by portfolio classes based on the internal credit-risk category as of December
 
31, 2024, were as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of September 30, 2025
As of
December 31,
2024
Puerto Rico and Virgin Islands Region
Term Loans
Amortized Cost Basis by Origination Year
(1)
2025
2024
2023
2022
2021
Prior
Revolving
Loans
Amortized
Cost Basis
Total
Total
(In thousands)
CONSTRUCTION
 
Risk Ratings:
 
Pass
$
18,067
$
94,860
$
107,269
$
5,558
$
222
$
3,746
$
-
$
229,722
$
179,755
 
Criticized:
 
Special Mention
-
-
-
-
-
-
-
-
-
 
Substandard
-
-
4,321
-
-
1,270
-
5,591
4,672
 
Doubtful
-
-
-
-
-
-
-
-
-
 
Loss
-
-
-
-
-
-
-
-
-
 
Total construction loans
$
18,067
$
94,860
$
111,590
$
5,558
$
222
$
5,016
$
-
$
235,313
$
184,427
 
Charge-offs on construction loans
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
COMMERCIAL MORTGAGE
 
Risk Ratings:
 
Pass
$
149,598
$
310,600
$
165,780
$
333,310
$
120,623
$
624,066
$
4,938
$
1,708,915
$
1,804,876
 
Criticized:
 
Special Mention
532
-
3,300
-
-
30,166
-
33,998
37,035
 
Substandard
460
-
451
3,066
-
18,291
-
22,268
25,983
 
Doubtful
-
-
-
-
-
-
-
-
-
 
Loss
-
-
-
-
-
-
-
-
-
 
Total commercial mortgage loans
$
150,590
$
310,600
$
169,531
$
336,376
$
120,623
$
672,523
$
4,938
$
1,765,181
$
1,867,894
 
Charge-offs on commercial mortgage loans
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
C&I
 
Risk Ratings:
 
Pass
$
332,296
$
261,615
$
339,539
$
247,724
$
84,239
$
333,587
$
768,333
$
2,367,333
$
2,249,680
 
Criticized:
 
Special Mention
-
-
3,012
-
-
-
38,559
41,571
44,900
 
Substandard
-
-
776
3,198
23,240
6,426
8,872
42,512
31,295
 
Doubtful
-
-
-
-
-
-
-
-
-
 
Loss
-
-
-
-
-
-
-
-
-
 
Total C&I loans
$
332,296
$
261,615
$
343,327
$
250,922
$
107,479
$
340,013
$
815,764
$
2,451,416
$
2,325,875
 
Charge-offs on C&I loans
$
-
$
43
$
52
$
-
$
-
$
50
$
171
$
316
(1) Excludes accrued interest receivable.
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
27
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of September 30, 2025
As of
December 31,
2024
Term Loans
Florida Region
Amortized Cost Basis by Origination Year
(1)
2025
2024
2023
2022
2021
Prior
Revolving
Loans
Amortized
Cost Basis
Total
Total
(In thousands)
CONSTRUCTION
 
Risk Ratings:
 
Pass
$
-
$
709
$
23,841
$
-
$
-
$
-
$
-
$
24,550
$
43,969
 
Criticized:
 
Special Mention
-
-
-
-
-
-
-
-
-
 
Substandard
-
-
-
-
-
-
-
-
-
 
Doubtful
-
-
-
-
-
-
-
-
-
 
Loss
-
-
-
-
-
-
-
-
-
 
Total construction loans
$
-
$
709
$
23,841
$
-
$
-
$
-
$
-
$
24,550
$
43,969
 
Charge-offs on construction loans
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
COMMERCIAL MORTGAGE
 
Risk Ratings:
 
Pass
$
129,061
$
76,892
$
26,702
$
205,733
$
100,103
$
179,517
$
35,535
$
753,543
$
672,736
 
Criticized:
 
Special Mention
-
-
-
-
-
-
-
-
-
 
Substandard
-
-
-
17,609
-
13,042
-
30,651
25,354
 
Doubtful
-
-
-
-
-
-
-
-
-
 
Loss
-
-
-
-
-
-
-
-
-
 
Total commercial mortgage loans
$
129,061
$
76,892
$
26,702
$
223,342
$
100,103
$
192,559
$
35,535
$
784,194
$
698,090
 
Charge-offs on commercial mortgage loans
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
C&I
 
Risk Ratings:
 
Pass
$
135,562
$
303,908
$
177,188
$
144,080
$
114,267
$
101,150
$
186,474
$
1,162,629
$
1,029,100
 
Criticized:
 
Special Mention
-
-
-
-
-
-
-
-
11,063
 
Substandard
-
-
-
-
-
196
-
196
-
 
Doubtful
-
-
-
-
-
-
-
-
-
 
Loss
-
-
-
-
-
-
-
-
-
 
Total C&I loans
$
135,562
$
303,908
$
177,188
$
144,080
$
114,267
$
101,346
$
186,474
$
1,162,825
$
1,040,163
 
Charge-offs on C&I loans
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
(1) Excludes accrued interest receivable.
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
28
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of September 30, 2025
As of
December 31,
2024
Term Loans
Total
Amortized Cost Basis by Origination Year
 
(1)
2025
2024
2023
2022
2021
Prior
Revolving
Loans
Amortized
Cost Basis
Total
Total
(In thousands)
CONSTRUCTION
 
Risk Ratings:
 
Pass
$
18,067
$
95,569
$
131,110
$
5,558
$
222
$
3,746
$
-
$
254,272
$
223,724
 
Criticized:
 
Special Mention
-
-
-
-
-
-
-
-
-
 
Substandard
-
-
4,321
-
-
1,270
-
5,591
4,672
 
Doubtful
-
-
-
-
-
-
-
-
-
 
Loss
-
-
-
-
-
-
-
-
-
 
Total construction loans
$
18,067
$
95,569
$
135,431
$
5,558
$
222
$
5,016
$
-
$
259,863
$
228,396
 
Charge-offs on construction loans
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
COMMERCIAL MORTGAGE
 
Risk Ratings:
 
Pass
$
278,659
$
387,492
$
192,482
$
539,043
$
220,726
$
803,583
$
40,473
$
2,462,458
$
2,477,612
 
Criticized:
 
Special Mention
532
-
3,300
-
-
30,166
-
33,998
37,035
 
Substandard
460
-
451
20,675
-
31,333
-
52,919
51,337
 
Doubtful
-
-
-
-
-
-
-
-
-
 
Loss
-
-
-
-
-
-
-
-
-
 
Total commercial mortgage loans
$
279,651
$
387,492
$
196,233
$
559,718
$
220,726
$
865,082
$
40,473
$
2,549,375
$
2,565,984
 
Charge-offs on commercial mortgage loans
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
C&I
 
Risk Ratings:
 
Pass
$
467,858
$
565,523
$
516,727
$
391,804
$
198,506
$
434,737
$
954,807
$
3,529,962
$
3,278,780
 
Criticized:
 
Special Mention
-
-
3,012
-
-
-
38,559
41,571
55,963
 
Substandard
-
-
776
3,198
23,240
6,622
8,872
42,708
31,295
 
Doubtful
-
-
-
-
-
-
-
-
-
 
Loss
-
-
-
-
-
-
-
-
-
 
Total C&I loans
$
467,858
$
565,523
$
520,515
$
395,002
$
221,746
$
441,359
$
1,002,238
$
3,614,241
$
3,366,038
 
Charge-offs on C&I loans
$
-
$
43
$
52
$
-
$
-
$
50
$
171
$
316
(1) Excludes accrued interest receivable.
 
 
 
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
29
The following
 
tables present the
 
amortized cost of
 
residential mortgage
 
loans by portfolio
 
classes and by
 
origination year
 
based on
accrual
 
status as
 
of
 
September
 
30,
 
2025,
 
the
 
gross charge
 
-offs
 
for
 
the
 
nine-month
 
period
 
ended
 
September
 
30,
 
2025 by
 
origination
year, and the amortized cost of residential mortgage
 
loans by portfolio classes based on accrual status as of December 31, 2024:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of September 30, 2025
As of
December 31,
2024
Term Loans
Amortized Cost Basis by Origination Year
(1)
2025
2024
2023
2022
2021
Prior
Revolving
Loans
Amortized
Cost Basis
Total
Total
(In thousands)
Puerto Rico and Virgin Islands Region:
FHA/VA government-guaranteed loans
Accrual Status:
Performing
$
-
$
204
$
1,125
$
759
$
1,489
$
83,578
$
-
$
87,155
$
91,124
Non-Performing
-
-
-
-
-
-
-
-
-
Total FHA/VA
 
government-guaranteed loans
$
-
$
204
$
1,125
$
759
$
1,489
$
83,578
$
-
$
87,155
$
91,124
Conventional residential mortgage loans
Accrual Status:
Performing
$
181,928
$
183,224
$
157,771
$
146,530
$
58,830
$
1,532,963
$
-
$
2,261,246
$
2,208,672
Non-Performing
-
-
-
395
101
18,121
-
18,617
23,409
Total conventional residential mortgage loans
$
181,928
$
183,224
$
157,771
$
146,925
$
58,931
$
1,551,084
$
-
$
2,279,863
$
2,232,081
Total
Accrual Status:
Performing
$
181,928
$
183,428
$
158,896
$
147,289
$
60,319
$
1,616,541
$
-
$
2,348,401
$
2,299,796
Non-Performing
-
-
-
395
101
18,121
-
18,617
23,409
Total residential mortgage loans
 
$
181,928
$
183,428
$
158,896
$
147,684
$
60,420
$
1,634,662
$
-
$
2,367,018
$
2,323,205
Charge-offs on residential mortgage loans
$
-
$
6
$
-
$
-
$
5
$
960
$
-
$
971
(1)
Excludes accrued interest receivable.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of September 30, 2025
As of
December 31,
2024
Term Loans
Amortized Cost Basis by Origination Year
(1)
2025
2024
2023
2022
2021
Prior
Revolving
Loans
Amortized
Cost Basis
Total
Total
(In thousands)
Florida Region:
FHA/VA government-guaranteed loans
Accrual Status:
Performing
$
-
$
-
$
-
$
-
$
-
$
1,094
$
-
$
1,094
$
1,128
Non-Performing
-
-
-
-
-
-
-
-
-
Total FHA/VA
 
government-guaranteed loans
$
-
$
-
$
-
$
-
$
-
$
1,094
$
-
$
1,094
$
1,128
Conventional residential mortgage loans
Accrual Status:
Performing
$
54,447
$
85,190
$
79,415
$
63,770
$
38,950
$
188,948
$
-
$
510,720
$
495,558
Non-Performing
-
-
1,394
1,900
-
6,955
-
10,249
8,540
Total conventional residential mortgage loans
$
54,447
$
85,190
$
80,809
$
65,670
$
38,950
$
195,903
$
-
$
520,969
$
504,098
Total
Accrual Status:
Performing
$
54,447
$
85,190
$
79,415
$
63,770
$
38,950
$
190,042
$
-
$
511,814
$
496,686
Non-Performing
-
-
1,394
1,900
-
6,955
-
10,249
8,540
Total residential mortgage loans
$
54,447
$
85,190
$
80,809
$
65,670
$
38,950
$
196,997
$
-
$
522,063
$
505,226
Charge-offs on residential mortgage loans
$
-
$
-
$
8
$
-
$
-
$
-
$
-
$
8
(1)
Excludes accrued interest receivable.
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
30
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of September 30, 2025
As of
December 31,
2024
Term Loans
Amortized Cost Basis by Origination Year
(1)
2025
2024
2023
2022
2021
Prior
Revolving
Loans
Amortized
Cost Basis
Total
Total
(In thousands)
Total:
FHA/VA government-guaranteed loans
Accrual Status:
Performing
$
-
$
204
$
1,125
$
759
$
1,489
$
84,672
$
-
$
88,249
$
92,252
Non-Performing
-
-
-
-
-
-
-
-
-
Total FHA/VA
 
government-guaranteed loans
$
-
$
204
$
1,125
$
759
$
1,489
$
84,672
$
-
$
88,249
$
92,252
Conventional residential mortgage loans
Accrual Status:
Performing
$
236,375
$
268,414
$
237,186
$
210,300
$
97,780
$
1,721,911
$
-
$
2,771,966
$
2,704,230
Non-Performing
-
-
1,394
2,295
101
25,076
-
28,866
31,949
Total conventional residential mortgage loans
$
236,375
$
268,414
$
238,580
$
212,595
$
97,881
$
1,746,987
$
-
$
2,800,832
$
2,736,179
Total
Accrual Status:
Performing
$
236,375
$
268,618
$
238,311
$
211,059
$
99,269
$
1,806,583
$
-
$
2,860,215
$
2,796,482
Non-Performing
-
-
1,394
2,295
101
25,076
-
28,866
31,949
Total residential mortgage loans
$
236,375
$
268,618
$
239,705
$
213,354
$
99,370
$
1,831,659
$
-
$
2,889,081
$
2,828,431
Charge-offs on residential mortgage loans
$
-
$
6
$
8
$
-
$
5
$
960
$
-
$
979
(1)
Excludes accrued interest receivable.
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
31
The
 
following
 
tables present
 
the
 
amortized
 
cost
 
of
 
consumer
 
loans
 
by
 
portfolio
 
classes
 
and
 
by
 
origination
 
year
 
based on
 
accrual
status as
 
of September
 
30, 2025,
 
the gross
 
charge-offs
 
for the
 
nine-month period
 
ended September
 
30, 2025
 
by portfolio
 
classes and
by origination year, and the amortized
 
cost of consumer loans by portfolio classes based on accrual status as of December 31,
 
2024:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of September 30, 2025
As of
December 31,
2024
Term Loans
Amortized Cost Basis by Origination Year
(1)
2025
2024
2023
2022
2021
Prior
Revolving
Loans
Amortized
Cost Basis
Total
Total
(In thousands)
Puerto Rico and Virgin Islands Region:
Auto loans
Accrual Status:
Performing
$
463,321
$
543,569
$
413,688
$
312,217
$
199,575
$
111,027
$
-
$
2,043,397
$
2,010,690
Non-Performing
613
2,057
3,219
3,157
2,303
2,876
-
14,225
15,295
Total auto loans
$
463,934
$
545,626
$
416,907
$
315,374
$
201,878
$
113,903
$
-
$
2,057,622
$
2,025,985
Charge-offs on auto loans
$
721
$
4,876
$
8,618
$
5,606
$
2,620
$
2,244
$
-
$
24,685
Finance leases
Accrual Status:
Performing
$
178,008
$
222,686
$
224,272
$
155,078
$
85,116
$
31,479
$
-
$
896,639
$
895,634
Non-Performing
49
475
578
866
295
766
-
3,029
3,812
Total finance leases
$
178,057
$
223,161
$
224,850
$
155,944
$
85,411
$
32,245
$
-
$
899,668
$
899,446
Charge-offs on finance leases
$
129
$
1,024
$
3,471
$
2,532
$
816
$
952
$
-
$
8,924
Personal loans
Accrual Status:
Performing
$
85,200
$
97,141
$
81,485
$
50,073
$
10,737
$
10,662
$
-
$
335,298
$
358,033
Non-Performing
17
414
874
532
110
107
-
2,054
2,136
Total personal loans
$
85,217
$
97,555
$
82,359
$
50,605
$
10,847
$
10,769
$
-
$
337,352
$
360,169
Charge-offs on personal loans
$
137
$
3,152
$
6,114
$
4,178
$
690
$
970
$
-
$
15,241
Credit cards
Accrual Status:
Performing
$
-
$
-
$
-
$
-
$
-
$
-
$
294,818
$
294,818
$
321,014
Non-Performing
-
-
-
-
-
-
-
-
-
Total credit cards
$
-
$
-
$
-
$
-
$
-
$
-
$
294,818
$
294,818
$
321,014
Charge-offs on credit cards
$
-
$
-
$
-
$
-
$
-
$
-
$
16,540
$
16,540
Other consumer loans
Accrual Status:
Performing
$
54,127
$
36,987
$
22,706
$
10,758
$
2,699
$
4,031
$
8,125
$
139,433
$
142,091
Non-Performing
203
406
270
169
60
135
151
1,394
1,500
Total other consumer loans
$
54,330
$
37,393
$
22,976
$
10,927
$
2,759
$
4,166
$
8,276
$
140,827
$
143,591
Charge-offs on other consumer loans
$
423
$
4,926
$
3,538
$
1,388
$
324
$
205
$
414
$
11,218
Total
Accrual Status:
Performing
$
780,656
$
900,383
$
742,151
$
528,126
$
298,127
$
157,199
$
302,943
$
3,709,585
$
3,727,462
Non-Performing
882
3,352
4,941
4,724
2,768
3,884
151
20,702
22,743
Total consumer loans
 
$
781,538
$
903,735
$
747,092
$
532,850
$
300,895
$
161,083
$
303,094
$
3,730,287
$
3,750,205
Charge-offs on total consumer loans
$
1,410
$
13,978
$
21,741
$
13,704
$
4,450
$
4,371
$
16,954
$
76,608
(1)
Excludes accrued interest receivable.
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
32
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of September 30, 2025
As of
December 31,
2024
Term Loans
Amortized Cost Basis by Origination Year
(1)
2025
2024
2023
2022
2021
Prior
Revolving
Loans
Amortized
Cost Basis
Total
Total
(In thousands)
Florida Region:
Auto loans
Accrual Status:
Performing
$
-
$
-
$
-
$
-
$
-
$
33
$
-
$
33
$
183
Non-Performing
-
-
-
-
-
-
-
-
10
Total auto loans
$
-
$
-
$
-
$
-
$
-
$
33
$
-
$
33
$
193
Charge-offs on auto loans
$
-
$
-
$
-
$
-
$
-
$
21
$
-
$
21
Finance leases
Accrual Status:
Performing
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Non-Performing
-
-
-
-
-
-
-
-
-
Total finance leases
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Charge-offs on finance leases
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Personal loans
Accrual Status:
Performing
$
-
$
133
$
42
$
-
$
-
$
-
$
-
$
175
$
1,739
Non-Performing
-
-
-
-
-
-
-
-
-
Total personal loans
$
-
$
133
$
42
$
-
$
-
$
-
$
-
$
175
$
1,739
Charge-offs on personal loans
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Credit cards
Accrual Status:
Performing
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Non-Performing
-
-
-
-
-
-
-
-
-
Total credit cards
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Charge-offs on credit cards
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Other consumer loans
Accrual Status:
Performing
$
481
$
1,167
$
-
$
-
$
209
$
1,913
$
1,844
$
5,614
$
5,535
Non-Performing
-
-
-
-
-
14
1
15
35
Total other consumer loans
$
481
$
1,167
$
-
$
-
$
209
$
1,927
$
1,845
$
5,629
$
5,570
Charge-offs on other consumer loans
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Total
Accrual Status:
Performing
$
481
$
1,300
$
42
$
-
$
209
$
1,946
$
1,844
$
5,822
$
7,457
Non-Performing
-
-
-
-
-
14
1
15
45
Total consumer loans
$
481
$
1,300
$
42
$
-
$
209
$
1,960
$
1,845
$
5,837
$
7,502
Charge-offs on total consumer loans
$
-
$
-
$
-
$
-
$
-
$
21
$
-
$
21
(1)
Excludes accrued interest receivable.
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
33
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of September 30, 2025
As of
December 31,
2024
Term Loans
Amortized Cost Basis by Origination Year
(1)
2025
2024
2023
2022
2021
Prior
Revolving
Loans
Amortized
Cost Basis
Total
Total
(In thousands)
Total:
Auto loans
Accrual Status:
Performing
$
463,321
$
543,569
$
413,688
$
312,217
$
199,575
$
111,060
$
-
$
2,043,430
$
2,010,873
Non-Performing
613
2,057
3,219
3,157
2,303
2,876
-
14,225
15,305
Total auto loans
$
463,934
$
545,626
$
416,907
$
315,374
$
201,878
$
113,936
$
-
$
2,057,655
$
2,026,178
Charge-offs on auto loans
$
721
$
4,876
$
8,618
$
5,606
$
2,620
$
2,265
$
-
$
24,706
Finance leases
Accrual Status:
Performing
$
178,008
$
222,686
$
224,272
$
155,078
$
85,116
$
31,479
$
-
$
896,639
$
895,634
Non-Performing
49
475
578
866
295
766
-
3,029
3,812
Total finance leases
$
178,057
$
223,161
$
224,850
$
155,944
$
85,411
$
32,245
$
-
$
899,668
$
899,446
Charge-offs on finance leases
$
129
$
1,024
$
3,471
$
2,532
$
816
$
952
$
-
$
8,924
Personal loans
Accrual Status:
Performing
$
85,200
$
97,274
$
81,527
$
50,073
$
10,737
$
10,662
$
-
$
335,473
$
359,772
Non-Performing
17
414
874
532
110
107
-
2,054
2,136
Total personal loans
$
85,217
$
97,688
$
82,401
$
50,605
$
10,847
$
10,769
$
-
$
337,527
$
361,908
Charge-offs on personal loans
$
137
$
3,152
$
6,114
$
4,178
$
690
$
970
$
-
$
15,241
Credit cards
Accrual Status:
Performing
$
-
$
-
$
-
$
-
$
-
$
-
$
294,818
$
294,818
$
321,014
Non-Performing
-
-
-
-
-
-
-
-
-
Total credit cards
$
-
$
-
$
-
$
-
$
-
$
-
$
294,818
$
294,818
$
321,014
Charge-offs on credit cards
$
-
$
-
$
-
$
-
$
-
$
-
$
16,540
$
16,540
Other consumer loans
Accrual Status:
Performing
$
54,608
$
38,154
$
22,706
$
10,758
$
2,908
$
5,944
$
9,969
$
145,047
$
147,626
Non-Performing
203
406
270
169
60
149
152
1,409
1,535
Total other consumer loans
$
54,811
$
38,560
$
22,976
$
10,927
$
2,968
$
6,093
$
10,121
$
146,456
$
149,161
Charge-offs on other consumer loans
$
423
$
4,926
$
3,538
$
1,388
$
324
$
205
$
414
$
11,218
Total
Accrual Status:
Performing
$
781,137
$
901,683
$
742,193
$
528,126
$
298,336
$
159,145
$
304,787
$
3,715,407
$
3,734,919
Non-Performing
882
3,352
4,941
4,724
2,768
3,898
152
20,717
22,788
Total consumer loans
$
782,019
$
905,035
$
747,134
$
532,850
$
301,104
$
163,043
$
304,939
$
3,736,124
$
3,757,707
Charge-offs on total consumer loans
$
1,410
$
13,978
$
21,741
$
13,704
$
4,450
$
4,392
$
16,954
$
76,629
(1)
Excludes accrued interest receivable.
As of September 30, 2025 and December 31, 2024, the balance of
 
revolving loans converted to term loans was
no
t material.
Accrued interest
 
receivable on loans
 
totaled $
54.7
 
million as of
 
September 30, 2025
 
($
58.2
 
million as of
 
December 31, 2024),
 
was
reported as part
 
of accrued interest receivable
 
on loans and
 
investment securities in
 
the consolidated statements
 
of financial condition,
and is excluded from the estimate of credit losses.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
34
The
 
following
 
tables
 
present
 
information
 
about
 
collateral
 
dependent
 
loans
 
that
 
were
 
individually
 
evaluated
 
for
 
purposes
 
of
determining the ACL as of September 30, 2025 and December
 
31, 2024:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of September 30, 2025
Collateral Dependent Loans -
With Allowance
Collateral Dependent
Loans - With No
Related Allowance
Collateral Dependent Loans - Total
Amortized Cost
 
Related
Allowance
Amortized Cost
Amortized Cost
 
Related
Allowance
(In thousands)
Residential mortgage loans:
Conventional residential mortgage loans
$
23,967
$
1,280
$
-
$
23,967
$
1,280
Commercial loans:
Construction loans
4,321
627
956
5,277
627
Commercial mortgage loans
4,454
128
31,522
35,976
128
C&I loans
 
-
-
15,514
15,514
-
Consumer loans:
Personal loans
-
-
-
-
-
Other consumer loans
-
-
-
-
-
$
32,742
$
2,035
$
47,992
$
80,734
$
2,035
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2024
Collateral Dependent Loans -
With Allowance
Collateral Dependent
Loans - With No
Related Allowance
Collateral Dependent Loans - Total
Amortized Cost
 
Related
Allowance
Amortized Cost
 
Amortized Cost
 
Related
Allowance
(In thousands)
Residential mortgage loans:
Conventional residential mortgage loans
$
24,163
$
1,285
$
80
$
24,243
$
1,285
Commercial loans:
Construction loans
-
-
956
956
-
Commercial mortgage loans
4,981
44
41,784
46,765
44
C&I loans
 
15,684
552
6,120
21,804
552
Consumer loans:
Personal loans
28
1
-
28
1
Other consumer loans
123
10
-
123
10
$
44,979
$
1,892
$
48,940
$
93,919
$
1,892
The
 
underlying
 
collateral
 
for
 
residential
 
mortgage
 
and
 
consumer
 
collateral
 
dependent
 
loans consisted
 
of
 
single-family
 
residential
properties,
 
and for
 
commercial and
 
construction loans
 
consisted primarily
 
of office
 
buildings, multifamily
 
residential properties,
 
and
retail establishments. The weighted-average
 
loan-to-value coverage for collateral
 
dependent loans as of September
 
30, 2025 was
69
%,
compared to
68
% as of December 31, 2024.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
35
Purchases and Sales of Loans
In
 
the
 
ordinary
 
course
 
of
 
business,
 
the
 
Corporation
 
enters
 
into
 
securitization
 
transactions
 
and
 
whole
 
loan
 
sales
 
with
 
GNMA
 
and
GSEs, such as FNMA and
 
FHLMC. During the first
 
nine months of 2025,
 
loans pooled into GNMA MBS
 
amounted to approximately
$
120.2
 
million, compared
 
to $
87.4
 
million, for the
 
first nine months
 
of 2024, for
 
which the Corporation
 
recognized a net
 
gain on sale
of
 
$
4.4
 
million
 
and
 
$
3.7
 
million,
 
respectively.
 
Also,
 
during
 
the
 
first
 
nine
 
months
 
of
 
2025
 
and
 
2024,
 
the
 
Corporation
 
sold
approximately
 
$
8.8
 
million
 
and
 
$
25.8
 
million,
 
respectively,
 
of
 
performing
 
residential
 
mortgage
 
loans
 
to
 
GSEs,
 
for
 
which
 
the
Corporation
 
recognized a
 
net gain
 
on sale
 
of $
0.4
 
million and
 
$
0.6
 
million, respectively.
 
The Corporation’s
 
continuing involvement
with
 
the
 
loans
 
that
 
it
 
sells
 
consists
 
primarily
 
of
 
servicing
 
the
 
loans.
 
In
 
addition,
 
the
 
Corporation
 
agrees
 
to
 
repurchase
 
loans
 
if
 
it
breaches any of
 
the representations and
 
warranties included in
 
the sale agreement.
 
These representations and
 
warranties are consistent
with the
 
GSEs’ selling
 
and servicing
 
guidelines (
i.e.
, ensuring
 
that the
 
mortgage was
 
properly underwritten
 
according to
 
established
guidelines).
For loans
 
pooled into
 
GNMA MBS,
 
the Corporation,
 
as servicer,
 
holds an
 
option to
 
repurchase individual
 
delinquent loans
 
issued
on or after
 
January 1, 2003,
 
when certain delinquency
 
criteria are met. This
 
option gives the
 
Corporation the unilateral
 
ability,
 
but not
the obligation, to
 
repurchase the delinquent
 
loans at par without
 
prior authorization from
 
GNMA. Since the
 
Corporation is considered
to
 
have
 
regained
 
effective
 
control
 
over
 
the
 
loans,
 
it
 
is
 
required
 
to
 
recognize
 
the
 
loans
 
and
 
a
 
corresponding
 
repurchase
 
liability
regardless of its
 
intent to repurchase
 
the loans. As
 
of September
 
30, 2025 and
 
December 31, 2024,
 
rebooked GNMA delinquent
 
loans
that were included in the residential mortgage loan portfolio amounted
 
to $
3.9
 
million and $
5.7
 
million, respectively.
During
 
the
 
first
 
nine
 
months
 
of
 
2025
 
and
 
2024,
 
the
 
Corporation
 
repurchased,
 
pursuant
 
to
 
the
 
aforementioned
 
repurchase
 
option,
$
1.3
 
million and $
1.7
 
million, respectively,
 
of loans previously pooled
 
into GNMA MBS. The
 
principal balance of these
 
loans is fully
guaranteed,
 
and the
 
risk of
 
loss related
 
to the
 
repurchased loans
 
is generally
 
limited to
 
the difference
 
between the
 
delinquent interest
payment advanced
 
to GNMA, which
 
is computed at
 
the loan’s
 
interest rate,
 
and the interest
 
payments reimbursed
 
by FHA, which
 
are
computed
 
at a
 
pre-determined
 
debenture
 
rate.
 
Repurchases
 
of GNMA
 
loans allow
 
the
 
Corporation,
 
among
 
other
 
things, to
 
maintain
acceptable
 
delinquency
 
rates
 
on
 
outstanding
 
GNMA
 
pools
 
and
 
remain
 
as
 
a
 
seller
 
and
 
servicer
 
in
 
good
 
standing
 
with
 
GNMA.
Historically, losses
 
on these repurchases of
 
GNMA delinquent loans have
 
been immaterial and no provision has
 
been made at the time
of sale.
Loan sales to FNMA and FHLMC are without recourse in relation
 
to the future performance of the loans.
 
The Corporation’s risk of
loss
 
with
 
respect
 
to
 
these
 
loans
 
is
 
also
 
minimal
 
as
 
these
 
repurchased
 
loans
 
are
 
generally
 
performing
 
loans
 
with
 
documentation
deficiencies.
During
 
the
 
first
 
nine
 
months
 
of
 
2025,
 
the
 
Corporation
 
purchased
 
C&I
 
loan
 
participations
 
in
 
the
 
Florida
 
region
 
totaling
 
$
98.6
million, and a
 
commercial mortgage loan
 
in the Puerto
 
Rico region totaling
 
$
20.0
 
million. Meanwhile, during
 
the first nine months
 
of
2024,
 
the
 
Corporation
 
purchased
 
commercial
 
loan
 
participations
 
in
 
the
 
Florida
 
region
 
totaling
 
$
178.2
 
million,
 
which
 
consisted
 
of
approximately $
164.5
 
million in the C&I portfolio
 
and $
13.7
 
million in the commercial
 
mortgage portfolio; and commercial
 
mortgage
loan participations in the Puerto Rico region totaling $
38.9
 
million.
During
 
the
 
first
 
nine
 
months
 
of
 
2025
 
and
 
2024,
 
the
 
Corporation
 
recognized
 
recoveries
 
of
 
$
2.4
 
million
 
and
 
$
10.0
 
million,
respectively,
 
from
 
the
 
bulk
 
sales
 
of
 
fully
 
charged-off
 
consumer
 
loans
 
and
 
finance
 
leases.
 
The
 
recoveries
 
related
 
to
 
the
 
bulk
 
sale
recognized during the first nine months of 2025 are net of a repurchase liability of $ The Corporation’s primary lending area is Puerto Rico.
0.1
 
million.
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
36
Loan Portfolio Concentration
The Corporation’s banking subsidiary, FirstBank, also lends in the USVI
and the BVI markets and
 
in the United States (principally
 
in the state of Florida).
 
Of the total gross loans held
 
for investment portfolio
of $
13.0
 
billion as of
 
September 30, 2025,
 
credit risk concentration
 
was approximately
77
% in Puerto
 
Rico,
19
% in the
 
U.S., and
4
%
in the USVI and the BVI.
As of
 
September
 
30,
 
2025,
 
the Corporation
 
had $
213.7
 
million outstanding
 
in loans
 
extended
 
to the
 
Puerto
 
Rico government,
 
its
municipalities
 
and
 
public
 
corporations,
 
compared
 
to
 
$
193.3
 
million
 
as
 
of
 
December
 
31,
 
2024.
 
As
 
of
 
September
 
30,
 
2025,
approximately
 
$
155.4
 
million consisted
 
of loans
 
extended
 
to municipalities
 
in Puerto
 
Rico that
 
are general
 
obligations supported
 
by
assigned
 
property
 
tax
 
revenues,
 
and
 
$
18.6
 
million
 
of
 
loans
 
which
 
are
 
supported
 
by
 
one
 
or
 
more
 
specific
 
sources
 
of
 
municipal
revenues. The
 
vast
 
majority
 
of
 
revenues
 
of
 
the
 
municipalities
 
included
 
in
 
the
 
Corporation’s
 
loan
 
portfolio
 
are
 
independent
 
of
budgetary subsidies provided by the Puerto Rico central
 
government. These municipalities are required
 
by law to levy special property
taxes in such amounts as are required to satisfy the
 
payment of all of their respective general obligation
 
bonds and notes. In addition to
loans extended
 
to municipalities,
 
the Corporation’s
 
exposure to
 
the Puerto
 
Rico government
 
as of
 
September 30,
 
2025 included
 
$
8.7
million in a
 
loan granted to
 
an affiliate of
 
the Puerto Rico
 
Electric Power Authority
 
(“PREPA”)
 
and $
31.0
 
million in loans
 
to a public
corporation of the Puerto Rico government.
Moreover,
 
as of
 
September 30,
 
2025, the
 
outstanding balance
 
of construction
 
loans funded
 
through conduit
 
financing structures
 
to
support
 
the
 
federal
 
programs
 
of
 
Low-Income
 
Housing
 
Tax
 
Credit
 
(“LIHTC”)
 
combined
 
with
 
other
 
federal
 
programs
 
amounted
 
to
$
78.3
 
million, compared
 
to $
59.2
 
million as
 
of December
 
31, 2024.
 
The main
 
objective of
 
these programs
 
is to
 
spur development
 
in
new or rehabilitated
 
and affordable rental
 
housing. PRHFA,
 
as program subrecipient
 
and conduit issuer,
 
issues tax-exempt obligations
which
 
are
 
acquired
 
by
 
private
 
financial
 
institutions
 
and
 
are
 
required
 
to
 
co-underwrite
 
with
 
PRHFA
 
a
 
mirror
 
construction
 
loan
agreement for the specific
 
project loan to which
 
the Corporation will serve
 
as ultimate lender but
 
where the PRHFA
 
will be the lender
of record.
In
 
addition,
 
as
 
of
 
September
 
30,
 
2025,
 
the
 
Corporation
 
had
 
$
68.4
 
million
 
in
 
exposure
 
to
 
residential
 
mortgage
 
loans
 
that
 
are
guaranteed by the
 
PRHFA, a
 
government instrumentality
 
that has been designated
 
as a covered
 
entity under PROMESA,
 
compared to
$
72.5
 
million
 
as
 
of
 
December
 
31,
 
2024.
 
Residential
 
mortgage
 
loans
 
guaranteed
 
by
 
the
 
PRHFA
 
are
 
secured
 
by
 
the
 
underlying
properties and the guarantees serve to cover shortfalls in collateral in the event
 
of a borrower default.
The
 
Corporation
 
also
 
has
 
credit
 
exposure
 
to
 
USVI
 
government
 
entities.
 
As
 
of
 
September
 
30,
 
2025,
 
the
 
Corporation
 
had
$
125.8
million in loans
 
to USVI government
 
public corporations, compared
 
to $
100.4
 
million as of December
 
31, 2024. As of
 
September 30,
2025, all loans were currently performing and up to date on principal
 
and interest payments.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
37
Loss Mitigation Program for Borrowers Experiencing
 
Financial Difficulty
The Corporation provides assistance to
 
its customers through a loss mitigation
 
program. Depending upon the
 
nature of a borrower’s
financial
 
condition,
 
restructurings
 
or
 
loan
 
modifications
 
through
 
this
 
program
 
are
 
provided,
 
as
 
well
 
as
 
other
 
restructurings
 
of
individual
 
C&I,
 
commercial
 
mortgage,
 
construction,
 
and
 
residential
 
mortgage
 
loans.
 
The
 
Corporation
 
may
 
also
 
modify
 
contractual
terms to comply with regulations regarding the treatment of certain bankruptcy
 
filings and discharge situations.
The
 
loan
 
modifications
 
granted
 
to
 
borrowers
 
experiencing
 
financial
 
difficulty
 
that
 
are
 
associated
 
with
 
payment
 
delays
 
typically
include the following:
-
Forbearance plans –
 
Payments of either interest
 
and/or principal are
 
deferred for a pre-established
 
period of time, generally
 
not
exceeding
 
six
 
months
 
in
 
any
 
given
 
year.
 
The
 
deferred
 
interest
 
and/or
 
principal
 
is
 
repaid
 
as
 
either
 
a
 
lump
 
sum
 
payment
 
at
maturity date or by extending the loan’s
 
maturity date by the number of forbearance months granted.
 
-
Payment
 
plans
 
–
 
Borrowers
 
are
 
allowed
 
to
 
pay
 
the
 
regular
 
monthly
 
payment
 
plus
 
the
 
pre-established
 
delinquent
 
amounts
during a period generally not exceeding
 
six months.
 
At the end of the payment plan, the
 
borrower is required to resume making
its regularly scheduled loan payments.
-
Trial
 
modifications
 
–
 
These
 
types
 
of
 
loan
 
modifications
 
are granted
 
for
 
residential
 
mortgage
 
loans
 
and
 
home
 
equity
 
lines of
credit. Borrowers
 
continue making reduced monthly
 
payments during the
 
trial period, which is
 
generally up to six
 
months. The
reduced
 
payments
 
that
 
are
 
made
 
by
 
the
 
borrower
 
during
 
the
 
trial
 
period
 
will
 
result
 
in
 
a
 
payment
 
delay
 
with
 
respect
 
to
 
the
original contractual terms of
 
the loan since the loan has
 
not yet been contractually
 
modified. After successful completion
 
of the
trial period, the mortgage loan is contractually modified.
Modifications
 
in
 
the
 
form
 
of
 
a
 
reduction
 
in
 
interest
 
rate,
 
term
 
extension,
 
an
 
other-than-insignificant
 
payment
 
delay,
 
or
 
any
combination
 
of
 
these
 
types
 
of
 
loan
 
modifications
 
that
 
have
 
occurred
 
in
 
the
 
current
 
reporting
 
period
 
for
 
a
 
borrower
 
experiencing
financial
 
difficulty
 
are
 
disclosed
 
in
 
the
 
tables
 
below.
 
Many
 
factors
 
are
 
considered
 
when
 
evaluating
 
whether
 
there
 
is
 
an
 
other-than-
insignificant
 
payment
 
delay,
 
such as
 
the significance
 
of the
 
restructured
 
payment
 
amount relative
 
to the
 
unpaid
 
principal balance
 
or
collateral value of the loan or the relative significance of the delay to
 
the original loan terms.
The
 
below
 
disclosures
 
relate
 
to
 
loan
 
modifications
 
granted
 
to
 
borrowers
 
experiencing
 
financial
 
difficulty
 
in
 
which
 
there
 
was
 
a
change
 
in
 
the
 
timing
 
and/or
 
amount
 
of
 
contractual
 
cash
 
flows
 
in
 
the
 
form
 
of
 
any
 
of
 
the
 
aforementioned
 
types
 
of
 
modifications,
including
 
restructurings
 
that
 
resulted
 
in
 
a
 
more-than-insignificant
 
payment
 
delay.
 
These
 
disclosures
 
exclude
 
$
1.6
 
million
 
and
 
$
4.6
million in restructured residential
 
mortgage loans that are
 
government-guaranteed (e.g.,
 
FHA/VA
 
loans) and were modified
 
during the
quarter and nine-month period ended
 
September 30, 2025, compared to
 
$
0.5
 
million and $
3.7
million, respectively, for the quarter and experiencing financial difficulty during the quarters and nine-month periods ended September 30, 2025 and 2024, by portfolio classes
nine-month period ended September 30, 2024.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
38
The
 
following
 
tables
 
present
 
the
 
amortized
 
cost
 
basis
 
as
 
of
 
September
 
30,
 
2025
 
and
 
2024
 
of
 
loans
 
modified
 
to
 
borrowers
and type
 
of modification
 
granted, and
 
the percentage
 
of these
 
modified
 
loans relative
 
to the
 
total period-end
 
amortized cost
 
basis of
receivables in the portfolio class:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended September 30, 2025
Payment Delay Only
Forbearance
Trial
Modification
Change in
Amortization
term
Interest Rate
Reduction
Term
Extension
Combination
of Interest
Rate
Reduction and
Term
Extension
Other
Total
Percentage
of Total by
Portfolio
Classes
(In thousands)
Conventional residential mortgage loans
$
-
$
411
$
-
$
-
$
146
$
-
$
-
$
557
0.02%
Construction loans
-
-
-
-
-
-
-
-
-
Commercial mortgage loans
-
-
-
-
-
-
-
-
-
C&I loans
-
-
-
-
403
-
-
403
0.01%
Consumer loans:
Auto loans
-
-
-
-
282
168
927
(1)
1,377
0.07%
Personal loans
-
28
-
-
-
120
-
148
0.04%
Credit cards
-
-
-
936
(2)
-
-
-
936
0.32%
Other consumer loans
-
-
-
-
47
-
15
(1)
62
0.04%
 
Total modifications
$
-
$
439
$
-
$
936
$
878
$
288
$
942
$
3,483
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended September 30, 2024
Payment Delay Only
Forbearance
Trial
Modification
Change in
Amortization
Term
Interest Rate
Reduction
Term
Extension
Combination
of Interest
Rate
Reduction and
Term
Extension
Other
Total
Percentage of
Total by
Portfolio
Classes
(In thousands)
Conventional residential mortgage loans
$
-
$
87
$
-
$
-
$
-
$
-
$
-
$
87
0.00%
Construction loans
-
-
-
-
122
-
-
122
0.06%
Commercial mortgage loans
-
-
-
-
-
-
-
-
-
C&I loans
-
-
-
14
(2)
335
4,058
22
(1)
4,429
0.14%
Consumer loans:
Auto loans
-
-
-
-
41
37
959
(1)
1,037
0.05%
Personal loans
-
-
-
-
-
40
-
40
0.01%
Credit cards
-
-
-
929
(2)
-
-
-
929
0.29%
Other consumer loans
-
-
-
-
77
48
-
125
0.08%
 
Total modifications
$
-
$
87
$
-
$
943
$
575
$
4,183
$
981
$
6,769
 
 
 
 
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
39
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine-Month Period Ended September 30, 2025
Payment Delay Only
Forbearance
Trial
Modification
Change in
Amortization
Term
Interest Rate
Reduction
Term
Extension
Combination
of Interest
Rate
Reduction and
Term
Extension
Other
Total
Percentage of
Total by
Portfolio
Classes
(In thousands)
Conventional residential mortgage loans
$
-
$
538
$
-
$
-
$
509
$
-
$
-
$
1,047
0.04%
Construction loans
-
-
-
-
-
-
-
-
-
Commercial mortgage loans
-
-
30,166
-
-
-
-
30,166
1.18%
C&I loans
196
(3)
-
-
-
1,008
80
17
(1)
1,301
0.04%
Consumer loans:
Auto loans
-
-
-
-
525
290
2,428
(1)
3,243
0.16%
Personal loans
-
28
-
-
63
337
-
428
0.13%
Credit cards
-
-
-
2,942
(2)
-
-
-
2,942
1.00%
Other consumer loans
-
120
-
-
124
70
34
(1)
348
0.24%
 
Total modifications
$
196
$
686
$
30,166
$
2,942
$
2,229
$
777
$
2,479
$
39,475
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine-Month Period Ended September 30, 2024
Payment Delay Only
Forbearance
Trial
Modification
Change in
Amortization
Term
Interest Rate
Reduction
Term
Extension
Combination
of Interest
Rate
Reduction and
Term
Extension
Other
Total
Percentage of
Total by
Portfolio
Classes
(In thousands)
Conventional residential mortgage loans
$
-
$
766
$
-
$
-
$
157
$
58
$
-
$
981
0.04%
Construction loans
-
-
-
-
122
-
-
122
0.06%
Commercial mortgage loans
-
-
-
-
115,703
-
-
115,703
4.68%
C&I loans
-
-
-
26
(2)
335
4,058
22
(1)
4,441
0.14%
Consumer loans:
Auto loans
-
-
-
-
319
192
2,512
(1)
3,023
0.15%
Personal loans
-
-
-
-
13
127
-
140
0.04%
Credit cards
-
-
-
1,935
(2)
-
-
-
1,935
0.60%
Other consumer loans
-
-
-
-
335
185
32
(1)
552
0.37%
 
Total modifications
$
-
$
766
$
-
$
1,961
$
116,984
$
4,620
$
2,566
$
126,897
(1)
Modification consists of court mandated reduction to 0% interest rate for remaining loan term to borrowers in bankruptcy proceedings unless dismissal occurs.
(2)
Modification consists of reduction in interest rate and revocation of revolving utilization privileges.
(3)
Modification consists of a six-month deferral of principal and interest to be repaid on or before the end of the forbearance
 
plan.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
40
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The
 
following
 
tables
 
present
 
by
 
portfolio
 
classes
 
the
 
financial
 
effects
 
of
 
the
 
modifications
 
granted
 
to
 
borrowers
 
experiencing
financial difficulty,
 
other than
 
those associated
 
to payment
 
delay,
 
during the
 
quarters and
 
nine-month
 
periods ended
 
September 30,
2025
 
and
 
2024.
 
The
 
financial
 
effects
 
of
 
the
 
modifications
 
associated
 
to
 
payment
 
delay
 
were
 
discussed
 
above
 
and,
 
as
 
such,
 
were
excluded from the tables below:
Quarter Ended September 30, 2025
Combination of Interest Rate Reduction
and Term Extension
Weighted-Average
Interest Rate
Reduction (%)
Weighted-Average
Term Extension (in
months)
Weighted-Average
Interest Rate
Reduction (%)
Weighted-Average
Term Extension (in
months)
Change in
Amortization Term
(in months)
Conventional residential mortgage loans
-
%
108
-
%
-
-
Construction loans
-
%
-
-
%
-
-
Commercial mortgage loans
-
%
-
-
%
-
-
C&I loans
-
%
80
-
%
-
-
Consumer loans:
Auto loans
-
%
29
3.09
%
21
-
Personal loans
-
%
-
4.59
%
23
-
Credit cards
15.64
%
-
-
%
-
-
Other consumer loans
-
%
30
-
%
-
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended September 30, 2024
Combination of Interest Rate Reduction
and Term Extension
Weighted-Average
Interest Rate
Reduction (%)
Weighted-Average
Term Extension (in
months)
Weighted-Average
Interest Rate
Reduction (%)
Weighted-Average
Term Extension (in
months)
Change in
Amortization Term
(in months)
Conventional residential mortgage loans
-
%
-
-
%
-
-
Construction loans
-
%
208
-
%
-
-
Commercial mortgage loans
-
%
-
-
%
-
-
C&I loans
14.50
%
178
3.00
%
22
-
Consumer loans:
Auto loans
-
%
24
3.04
%
26
-
Personal loans
-
%
-
3.51
%
10
-
Credit cards
17.48
%
-
-
%
-
-
Other consumer loans
-
%
26
2.30
%
21
-
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
41
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine-Month Period Ended September 30, 2025
Combination of Interest Rate Reduction
and Term Extension
Weighted-Average
Interest Rate
Reduction (%)
Weighted-Average
Term Extension (in
months)
Weighted-Average
Interest Rate
Reduction (%)
Weighted-Average
Term Extension (in
months)
Change in
Amortization Term
(in months)
Conventional residential mortgage loans
-
%
73
-
%
-
-
Construction loans
-
%
-
-
%
-
-
Commercial mortgage loans
-
%
-
-
%
-
36
C&I loans
-
%
87
0.50
%
120
-
Consumer loans:
Auto loans
-
%
27
3.03
%
20
-
Personal loans
-
%
22
4.57
%
23
-
Credit cards
15.67
%
-
-
%
-
-
Other consumer loans
-
%
28
3.01
%
22
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine-Month Period Ended September 30, 2024
Combination of Interest Rate Reduction
and Term Extension
Weighted-Average
Interest Rate
Reduction (%)
Weighted-Average
Term Extension (in
months)
Weighted-Average
Interest Rate
Reduction (%)
Weighted-Average
Term Extension (in
months)
Change in
Amortization Term
(in months)
Conventional residential mortgage loans
-
%
69
1.80
%
106
-
Construction loans
-
%
208
-
%
-
-
Commercial mortgage loans
-
%
96
-
%
-
-
C&I loans
13.82
%
178
3.00
%
22
-
Consumer loans:
Auto loans
-
%
27
2.62
%
29
-
Personal loans
-
%
25
3.09
%
16
-
Credit cards
17.21
%
-
-
%
-
-
Other consumer loans
-
%
25
3.04
%
18
-
 
 
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
42
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The
 
following
 
tables
 
present
 
by
 
portfolio
 
classes
 
the
 
performance
 
of
 
loans
 
modified
 
during
 
the
 
last
 
twelve
 
months
 
ended
September 30, 2025 and 2024 that were granted to borrowers experiencing
 
financial difficulty:
Last Twelve Months Ended September 30, 2025
30-59
60-89
90+
Total
Delinquency
Current
Total
(In thousands)
Conventional residential mortgage loans
$
-
$
115
$
-
$
115
$
1,119
$
1,234
Construction loans
-
-
-
-
-
-
Commercial mortgage loans
-
-
-
-
42,086
42,086
C&I loans
9
-
17
26
6,939
6,965
Consumer loans:
Auto loans
107
94
99
300
3,823
4,123
Personal loans
85
19
-
104
372
476
Credit cards
421
206
148
775
2,900
3,675
Other consumer loans
41
10
9
60
401
461
 
Total modifications
(1)
$
663
$
444
$
273
$
1,380
$
57,640
$
59,020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Last Twelve Months Ended September 30, 2024
30-59
60-89
90+
Total
Delinquency
Current
Total
(In thousands)
Conventional residential mortgage loans
$
-
$
-
$
-
$
-
$
1,611
$
1,611
Construction loans
-
-
-
-
122
122
Commercial mortgage loans
-
-
-
-
115,703
115,703
C&I loans
-
-
-
-
4,441
4,441
Consumer loans:
Auto loans
86
156
82
324
3,751
4,075
Personal loans
-
-
-
-
205
205
Credit cards
172
46
13
231
2,163
2,394
Other consumer loans
32
37
22
91
461
552
 
Total modifications
(1)
$
290
$
239
$
117
$
646
$
128,457
$
129,103
(1)
Excludes $
5.1
 
million and $
4.3
million in restructured residential mortgage loans that are government-guaranteed (e.g., FHA/VA loans) and were modified during the last twelve months ended September 30, 2025 and NOTE 4 – ALLOWANCE FOR CREDIT LOSSES FOR LOANS AND FINANCE LEASES
2024, respectively.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
43
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following tables present the activity in the ACL on loans and finance leases by portfolio
 
segment for the indicated periods:
Residential Mortgage
Loans
Construction
Loans
Commercial
Mortgage
C&I
 
Loans
Consumer Loans
Total
Quarter Ended September 30, 2025
(In thousands)
ACL:
Beginning balance
$
42,448
$
4,551
$
22,746
$
39,359
$
139,474
$
248,578
Provision for credit losses - (benefit) expense
(2,208)
496
2,503
(1,397)
18,876
18,270
Charge-offs
 
(459)
-
-
(173)
(24,553)
(25,185)
Recoveries
491
313
117
65
4,341
5,327
Ending balance
$
40,272
$
5,360
$
25,366
$
37,854
$
138,138
$
246,990
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential Mortgage
Loans
Construction
Loans
Commercial
Mortgage
C&I
 
Loans
Consumer Loans
Total
Quarter Ended September 30, 2024
(In thousands)
ACL:
Beginning balance
$
46,051
$
5,646
$
30,078
$
35,440
$
137,317
$
254,532
Provision for credit losses - (benefit) expense
(5,476)
(1,659)
(5,914)
885
28,634
16,470
Charge-offs
 
(421)
-
-
(1,437)
(27,187)
(29,045)
Recoveries
497
11
41
211
4,279
5,039
Ending balance
$
40,651
$
3,998
$
24,205
$
35,099
$
143,043
$
246,996
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential Mortgage
Loans
Construction
Loans
Commercial
Mortgage
C&I
 
Loans
Consumer Loans
Total
Nine-Month Period Ended September 30, 2025
(In thousands)
ACL:
Beginning balance
$
40,654
$
3,824
$
22,447
$
33,034
$
143,983
$
243,942
Provision for credit losses - (benefit) expense
(411)
1,196
2,711
4,091
55,901
63,488
Charge-offs
 
(979)
-
-
(316)
(76,629)
(77,924)
Recoveries
1,008
340
208
1,045
14,883
(1)
17,484
Ending balance
$
40,272
$
5,360
$
25,366
$
37,854
$
138,138
$
246,990
(1)
 
Includes recoveries totaling $
2.4
 
million associated with the bulk sale of fully charged-off consumer loans and finance leases.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential Mortgage
Loans
Construction
Loans
Commercial
Mortgage
C&I
 
Loans
Consumer Loans
Total
Nine-Month Period Ended September 30, 2024
(In thousands)
ACL:
Beginning balance
$
57,397
$
5,605
$
32,631
$
33,996
$
132,214
$
261,843
Provision for credit losses - (benefit) expense
(16,533)
(1,642)
(8,900)
(2,871)
71,263
41,317
Charge-offs
 
(1,428)
-
-
(2,317)
(81,053)
(84,798)
Recoveries
1,215
35
474
6,291
20,619
(1)
28,634
Ending balance
$
40,651
$
3,998
$
24,205
$
35,099
$
143,043
$
246,996
(1)
Includes recoveries totaling $
10.0
 
million associated with the bulk sale of fully charged-off consumer loans and finance leases.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
44
The
 
Corporation
 
estimates
 
the
 
ACL
 
following
 
the
 
methodologies
 
described
 
in
 
Note
 
1
 
–
 
“Nature
 
of
 
Business
 
and
 
Summary
 
of
Significant Accounting
 
Policies” to
 
the audited
 
consolidated financial
 
statements included
 
in the
 
2024 Annual
 
Report on
 
Form 10-K,
as updated by the information contained in this report, for each portfolio segment
 
.
 
The Corporation
 
generally applies
 
probability weights
 
to the
 
baseline and
 
alternative downside
 
economic scenarios
 
to estimate
 
the
ACL with
 
the
 
baseline
 
scenario
 
carrying
 
the highest
 
weight.
 
The
 
scenarios
 
that are
 
chosen
 
each quarter
 
and
 
the
 
weighting
 
given
 
to
each
 
scenario
 
for
 
the
 
different
 
loan
 
portfolio
 
categories
 
depend
 
on
 
a
 
variety
 
of
 
factors
 
including
 
recent
 
economic
 
events,
 
leading
national
 
and regional
 
economic indicators,
 
and industry
 
trends. As
 
of September
 
30, 2025
 
and December
 
31, 2024,
 
the Corporation
applied
 
100%
 
probability
 
to
 
the
 
baseline
 
scenario
 
for
 
the
 
commercial
 
mortgage
 
and
 
construction
 
loan
 
portfolios
 
since
 
certain
macroeconomic variables
 
associated with
 
commercial real
 
estate property
 
performance and
 
the commercial
 
real estate
 
(“CRE”) price
index,
 
particularly
 
in
 
the
 
Puerto
 
Rico
 
region,
 
are
 
expected
 
to
 
continue
 
to
 
perform
 
in
 
a
 
more
 
favorable
 
manner
 
than
 
the
 
alternative
downside economic scenario.
As
 
of
 
September
 
30,
 
2025,
 
the
 
ACL
 
for
 
loans
 
and
 
finance
 
leases
 
was
 
$
247.0
 
million,
 
an
 
increase
 
of
 
$
3.1
 
million,
 
from
 
$
243.9
million as of December 31, 2024. The increase
 
was mainly related to the ACL for commercial and
 
construction loans, which increased
by
 
$
9.3
 
million,
 
mainly
 
due
 
to
 
C&I
 
loan
 
growth,
 
a
 
deterioration
 
in
 
the
 
economic
 
outlook
 
of
 
the
 
commercial
 
real
 
estate
 
property
performance and the forecasted CRE price index,
 
and updated historical prepayment experience.
Meanwhile, the
 
ACL for
 
consumer loans
 
decreased by
 
$
5.8
 
million, driven
 
by improvements
 
in macroeconomic
 
variables, mainly
in
 
the
 
projection
 
of
 
the
 
unemployment
 
rate,
 
and
 
reductions
 
in
 
the
 
unsecured
 
loan
 
portfolio
 
volumes,
 
partially
 
offset
 
by
 
updated
historical
 
loss
 
experience
 
used
 
for
 
determining
 
the
 
ACL
 
estimate
 
in
 
the
 
unsecured
 
loan
 
portfolio.
 
Also,
 
the
 
ACL
 
for
 
residential
mortgage loans
 
decreased by
 
$
0.4
 
million mainly
 
due to
 
improvements in
 
macroeconomic variables,
 
such as
 
the unemployment
 
rate
and the
 
Housing Price
 
Index, and
 
updated historical
 
loss experience
 
used for
 
determining the
 
ACL estimate
 
resulting in
 
a downward
revision of estimated loss severities and lower required reserve levels,
 
partially offset by newly originated loans.
Net charge-offs were
 
$
19.9
 
million and $
60.4
 
million for the third quarter
 
and first nine months of 2025,
 
compared to $
24.0
 
million
and $
56.2
 
million, respectively, for
 
the same periods in 2024. The $
4.1
 
million decrease in net charge-offs for
 
the third quarter of 2025
was driven by
 
a $
2.7
 
million decrease in
 
consumer loans and
 
finance leases net
 
charge-offs, a
 
$
1.2
 
million charge-off
 
recorded on the
sale of a nonaccrual C&I
 
loan in the Puerto Rico region
 
during the third quarter of 2024,
 
and a $
0.3
 
million recovery associated with a
construction loan in the Florida
 
region during the third quarter of
 
2025. The net charge-offs
 
for the first nine months of
 
2025 and 2024
included $
2.4
 
million and $
10.0
 
million, respectively,
 
in recoveries associated with
 
the bulk sales of
 
fully charged-off
 
consumer loans
and
 
finance
 
leases.
 
The
 
increase
 
in
 
net
 
charge-offs
 
for
 
the
 
first
 
nine
 
months
 
of
 
2025
 
was
 
also
 
driven
 
by
 
a
 
$
5.0
 
million
 
recovery
associated with
 
a C&I
 
loan in the
 
Puerto Rico
 
region during
 
the first
 
nine months
 
of 2024,
 
partially offset
 
by a decrease
 
in consumer
loans and finance leases net charge-offs.
 
 
 
 
 
 
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
45
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The tables below
 
present the ACL
 
related to loans
 
and finance leases
 
and the carrying
 
values of loans
 
by portfolio segment
 
as of
September 30, 2025 and December 31, 2024:
As of September 30, 2025
Residential Mortgage
Loans
Construction
Loans
Commercial Mortgage
Loans
C&I
 
Loans
Consumer Loans
Total
(Dollars in thousands)
Total loans held for investment:
 
Amortized cost of loans
$
2,889,081
$
259,863
$
2,549,375
$
3,614,241
$
3,736,124
$
13,048,684
 
Allowance for credit losses
40,272
5,360
25,366
37,854
138,138
246,990
 
Allowance for credit losses to
 
amortized cost
1.39
%
2.06
%
0.99
%
1.05
%
3.70
%
1.89
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2024
Residential Mortgage
Loans
Construction
Loans
Commercial Mortgage
Loans
C&I
 
Loans
Consumer Loans
Total
(Dollars in thousands)
Total loans held for investment:
 
Amortized cost of loans
$
2,828,431
$
228,396
$
2,565,984
$
3,366,038
$
3,757,707
$
12,746,556
 
Allowance for credit losses
40,654
3,824
22,447
33,034
143,983
243,942
 
Allowance for credit losses to
 
amortized cost
1.44
%
1.67
%
0.87
%
0.98
%
3.83
%
1.91
%
In
 
addition,
 
the
 
Corporation
 
estimates
 
expected
 
credit
 
losses
 
over
 
the
 
contractual
 
period
 
in
 
which
 
the
 
Corporation
 
is
 
exposed
 
to
credit
 
risk
 
via
 
a
 
contractual
 
obligation
 
to
 
extend
 
credit,
 
such
 
as
 
unfunded
 
loan
 
commitments
 
and
 
standby
 
letters
 
of
 
credit
 
for
commercial
 
and
 
construction
 
loans,
 
unless
 
the
 
obligation
 
is
 
unconditionally
 
cancellable
 
by
 
the
 
Corporation.
 
See
 
Note
 
19
 
–
“Regulatory Matters, Commitments
 
and Contingencies” for
 
information on off
 
-balance sheet exposures
 
as of September 30,
 
2025 and
December 31,
 
2024. The
 
Corporation estimates
 
the ACL
 
for these
 
off-balance
 
sheet exposures
 
following the
 
methodology described
in
 
Note
 
1 –
 
“Nature
 
of Business
 
and
 
Summary
 
of Significant
 
Accounting
 
Policies”
 
to
 
the audited
 
consolidated
 
financial statements
included
 
in
 
the
 
2024
 
Annual
 
Report
 
on
 
Form
 
10-K.
 
As
 
of
 
September
 
30,
 
2025,
 
the
 
ACL
 
for
 
off-balance
 
sheet
 
credit
 
exposures
amounted to $
2.6
 
million, compared to $
3.1
 
million as of December 31, 2024.
 
The following
 
table presents
 
the activity
 
in the
 
ACL for
 
unfunded loan
 
commitments and
 
standby letters
 
of credit
 
for the
 
quarters
and nine-month periods ended September 30, 2025 and 2024:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
Nine-Month Period Ended
September 30,
September 30,
2025
2024
2025
2024
(In thousands)
Beginning balance
$
3,367
$
4,502
$
3,143
$
4,638
Provision for credit losses - benefit
 
(756)
(1,041)
(532)
(1,177)
Ending balance
$
2,611
$
3,461
$
2,611
$
3,461
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
46
NOTE 5
–
OTHER REAL ESTATE
 
OWNED (“OREO”)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following table presents the OREO inventory as of the indicated dates:
September 30, 2025
December 31, 2024
(In thousands)
OREO balances, carrying value:
Residential
(1)
$
8,347
$
12,897
Construction
435
522
Commercial
(2)
561
3,887
Total
$
9,343
$
17,306
(1)
Excludes $
3.8
 
million and $
5.2
 
million as of September
 
30, 2025 and December
 
31, 2024, respectively,
 
of foreclosures that met the
 
conditions of ASC Subtopic 310-40
 
“Reclassification
of Residential Real Estate Collateralized Consumer
 
Mortgage Loans upon Foreclosure,” and
 
are presented as a receivable as part
 
of other assets in the consolidated statements
 
of financial
condition.
(2)
During the third quarter of 2025, the Corporation
 
recorded a $
2.8
 
million valuation adjustment in connection with
 
ongoing litigation involving a commercial
 
OREO property in the Virgin
Islands region. See Note 19 – “Regulatory Matters, Commitments
 
and Contingencies” for further details.
See Note 15 – “Fair
 
Value”
 
for information on subsequent
 
measurement adjustments recorded
 
on OREO properties reported
 
as part
of “Net loss
 
(gain) on
 
OREO operations”
 
in the consolidated
 
statements of income
 
during the
 
quarters and
 
nine-month periods
 
ended
September 30, 2025 and 2024.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
47
NOTE 6 – NON-CONSOLIDATED
 
VARIABLE
 
INTEREST ENTITIES (“VIEs”) AND SERVICING
 
ASSETS
The Corporation
 
transfers residential
 
mortgage loans
 
in sale
 
or securitization
 
transactions in
 
which it
 
has continuing
 
involvement,
including
 
servicing
 
responsibilities
 
and
 
guarantee
 
arrangements.
 
All
 
such
 
transfers
 
have
 
been
 
accounted
 
for
 
as
 
sales
 
as
 
required
 
by
applicable accounting guidance.
When
 
evaluating
 
the
 
need
 
to
 
consolidate
 
counterparties
 
to
 
which
 
the
 
Corporation
 
has
 
transferred
 
assets,
 
or
 
with
 
which
 
the
Corporation has
 
entered into
 
other transactions,
 
the Corporation
 
first determines
 
if the
 
counterparty is
 
an entity
 
for which
 
a variable
interest
 
exists.
 
If
 
no
 
scope
 
exception
 
is
 
applicable
 
and
 
a
 
variable
 
interest
 
exists,
 
the
 
Corporation
 
then
 
evaluates
 
whether
 
it
 
is
 
the
primary beneficiary of the VIE and whether the entity should be consolidated
 
or not.
Below is a summary of transactions with VIEs for which the Corporation has retained
 
some level of continuing involvement:
Trust-Preferred
 
Securities (“TruPS”)
In
 
2004,
 
FBP Statutory
 
Trusts
 
I
 
and
 
II,
 
financing
 
trusts
 
that
 
are
 
wholly
 
owned
 
by
 
the Corporation
 
,
 
sold to
 
institutional
 
investors
$
100
 
million
 
and
 
$
125
 
million
 
of
 
its
 
variable-rate
 
TruPS,
 
respectively.
 
Such
 
proceeds,
 
along
 
with
 
the
 
proceeds
 
associated
 
with
 
the
Corporation’s purchase
 
of common securities of $
3.1
 
million and $
3.9
 
million, respectively,
 
were used to purchase $
103.1
 
million and
$
128.9
 
million, respectively,
 
in Junior
 
Subordinated Deferrable
 
Debentures. These
 
debentures, net
 
of related
 
issuance costs, had
 
been
recorded
 
as
 
part
 
of
 
“Long-term
 
borrowings”
 
in
 
the
 
Corporation’s
 
consolidated
 
statements
 
of
 
financial
 
condition.
 
See
 
Note
 
8
 
–
“Borrowings” for additional information related to the terms of these debentures.
During the first half of 2025,
 
the Corporation redeemed the remaining $
61.7
 
million of outstanding TruPS
 
as of December 31, 2024
at
 
a
 
contractual
 
call
 
price
 
of
100
%,
 
as
 
further
 
explained
 
in
 
Note
 
11
 
–
 
“Stockholders’
 
Equity.”
 
Following
 
the
 
redemption
 
of
 
these
TruPS, FBP Statutory Trusts
 
I and II were liquidated by the Corporation.
Private Label MBS
During
 
2004
 
and
 
2005,
 
an unaffiliated
 
party,
 
referred
 
to in
 
this subsection
 
as the
 
seller,
 
established
 
a
 
series of
 
statutory
 
trusts
 
to
securitize
 
mortgage
 
loans and
 
sell trust
 
certificates
 
(“private
 
label
 
MBS”).
 
The
 
seller
 
initially
 
provided
 
the
 
servicing
 
for
 
a
 
fee, then
sold and
 
issued the
 
private label
 
MBS in
 
favor of
 
FirstBank. Currently,
 
FirstBank is
 
the sole
 
owner of
 
these private
 
label MBS,
 
with
another third-party performing the servicing for a fee. The
 
FDIC became owner of an interest-only strip (“IO”) upon its intervention
 
of
the seller, a
 
failed financial institution, and,
 
as such, is entitled to receive
 
the excess of the interest income
 
less a servicing fee over
 
the
variable rate
 
income that
 
the Bank
 
earns on
 
the securities.
 
Since no
 
recourse agreement
 
exists, the
 
Bank, as
 
the sole
 
holder,
 
bears all
risks
 
from
 
losses on
 
non-accruing
 
loans and
 
repossessed
 
collateral.
 
As of
 
September
 
30, 2025,
 
the amortized
 
cost
 
and
 
fair value
 
of
these
 
private
 
label
 
MBS
 
amounted
 
to
 
$
5.3
 
million
 
and
 
$
3.3
 
million,
 
respectively,
 
which
 
is
 
included
 
as
 
part
 
of
 
the
 
Corporation’s
available-for-sale debt securities portfolio,
 
compared to an amortized cost and fair value of $
6.1
 
million and $
4.2
 
million, respectively,
as of December
 
31, 2024. As
 
described in
 
Note 2 –
 
“Debt Securities,”
 
the ACL on
 
these private label
 
MBS amounted to
 
$
0.4
 
million
as of September 30, 2025, compared to $ Servicing Assets, or Mortgage Servicing Rights (“MSRs”)
0.2
 
million as of December 31, 2024.
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
48
The
 
Corporation
 
typically
 
transfers
 
first
 
lien
 
residential
 
mortgage
 
loans in
 
conjunction
 
with
 
GNMA
 
securitization
 
transactions
 
in
which the
 
loans are
 
exchanged for
 
cash or
 
securities that
 
are readily
 
redeemed for
 
cash proceeds
 
and servicing
 
rights. The
 
securities
issued
 
through
 
these
 
transactions
 
are
 
guaranteed
 
by
 
GNMA
 
and,
 
under
 
seller/servicer
 
agreements,
 
the
 
Corporation
 
is
 
required
 
to
service
 
the
 
loans
 
in
 
accordance
 
with
 
the
 
issuers’
 
servicing
 
guidelines
 
and
 
standards.
 
As
 
of
 
September
 
30,
 
2025,
 
the
 
Corporation
serviced
 
loans securitized
 
through
 
GNMA with
 
a principal
 
balance
 
of
 
$
2.1
 
billion.
 
Also, certain
 
conventional
 
conforming
 
loans are
sold to FNMA or FHLMC
 
with servicing retained. The
 
Corporation recognizes as separate
 
assets the rights to service
 
loans for others,
whether those servicing
 
assets are originated or
 
purchased. MSRs are included
 
as part of other
 
assets in the consolidated
 
statements of
financial condition.
The changes in MSRs are shown below for the indicated periods:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended September 30,
Nine-Month Period Ended September 30,
2025
2024
2025
2024
(In thousands)
Balance at beginning of period
$
24,130
$
25,952
$
25,019
$
26,941
Capitalization of servicing assets
625
525
1,904
1,632
Amortization
(1,059)
(1,060)
(3,196)
(3,135)
Other
(1)
(37)
(14)
(68)
(35)
Balance at end of period
$
23,659
$
25,403
$
23,659
$
25,403
(1)
Consists of adjustments related to the repurchase of loans serviced
 
for others and temporary impairment charges.
The components
 
of net servicing
 
income, included as
 
part of mortgage
 
banking activities in
 
the consolidated statements
 
of income,
are shown below for the indicated periods:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended September 30,
 
Nine-Month Period Ended September 30,
2025
2024
2025
2024
(In thousands)
Servicing fees
$
2,498
$
2,588
$
7,558
$
7,766
Late charges and prepayment penalties
165
158
532
528
Other
(1)
(37)
(14)
(68)
(35)
 
Servicing income, gross
2,626
2,732
8,022
8,259
Amortization
(1,059)
(1,060)
(3,196)
(3,135)
 
Servicing income, net
$
1,567
$
1,672
$
4,826
$
5,124
(1)
 
Consists of adjustments related to the repurchase of loans serviced
 
for others and temporary impairment charges.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
49
The Corporation’s
 
MSRs are subject
 
to prepayment
 
and interest rate
 
risks. Key economic
 
assumptions used
 
in determining
 
the fair
value at the time of sale of the related mortgages for the indicated periods
 
ranged as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average
Maximum
Minimum
Nine-Month Period Ended September 30, 2025
Constant prepayment rate:
 
 
Government-guaranteed mortgage loans
6.6
%
16.6
%
3.6
%
 
Conventional conforming mortgage loans
7.0
%
15.9
%
2.4
%
 
Conventional non-conforming mortgage loans
6.1
%
9.0
%
2.4
%
Discount rate:
 
Government-guaranteed mortgage loans
11.5
%
11.5
%
11.5
%
 
Conventional conforming mortgage loans
9.5
%
9.5
%
9.5
%
 
Conventional non-conforming mortgage loans
11.7
%
12.5
%
11.0
%
Nine-Month Period Ended September 30, 2024
Constant prepayment rate:
 
 
Government-guaranteed mortgage loans
6.8
%
17.1
%
3.2
%
 
Conventional conforming mortgage loans
6.9
%
20.6
%
2.1
%
 
Conventional non-conforming mortgage loans
6.0
%
7.6
%
3.0
%
Discount rate:
 
Government-guaranteed mortgage loans
11.5
%
11.5
%
11.5
%
 
Conventional conforming mortgage loans
9.5
%
9.5
%
9.5
%
 
Conventional non-conforming mortgage loans
11.5
%
12.5
%
11.0
%
The weighted
 
averages of the
 
key economic
 
assumptions that the
 
Corporation used
 
in its valuation
 
model and the
 
sensitivity of the
current
 
fair
 
value
 
to
 
immediate
10
%
 
and
20
%
 
adverse
 
changes
 
in
 
those
 
assumptions
 
for
 
mortgage
 
loans
 
were
 
as
 
follows
 
as
 
of
 
the
indicated dates:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2025
December 31, 2024
(In thousands)
Carrying amount of servicing assets
$
23,659
$
25,019
Fair value
$
41,710
$
43,046
Weighted-average
 
expected life (in years)
7.71
7.63
Constant prepayment rate (weighted-average annual
 
rate)
5.99
%
6.34
%
 
Decrease in fair value due to 10% adverse change
$
810
$
858
 
Decrease in fair value due to 20% adverse change
$
1,585
$
1,675
Discount rate (weighted-average annual rate)
10.76
%
10.72
%
 
Decrease in fair value due to 10% adverse change
$
1,758
$
1,815
 
Decrease in fair value due to 20% adverse change
$
3,385
$
3,495
These sensitivities are hypothetical and should be used with caution. As the figures indicate, changes in fair value based on a 10%
variation in assumptions generally cannot be extrapolated because the relationship between the change in assumption and the change
in fair value may not be linear. Also, in this table, the effect of a variation in a particular assumption on the fair value of the MSR is
calculated without changing any other assumption. In reality, changes in one factor may result in changes in another (for example,
increases in market interest rates may result in lower prepayments), which may magnify or counteract the sensitivities The following table summarizes deposit balances as of the indicated dates:
.
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
50
NOTE 7 – DEPOSITS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2025
December 31, 2024
(In thousands)
Type of account:
Non-interest-bearing deposit accounts
$
5,374,894
$
5,547,538
Interest-bearing checking accounts
3,853,088
4,308,116
Interest-bearing saving accounts
3,509,500
3,530,382
Time deposits
3,495,256
3,007,144
Brokered CDs
628,309
478,118
 
Total
$
16,861,047
$
16,871,298
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following
 
table presents
 
the remaining
 
contractual maturities
 
of time
 
deposits, including
 
brokered
 
CDs, as
 
of September
 
30,
2025:
Total
 
(In thousands)
Three months or less
$
926,437
Over three months to six months
1,046,103
Over six months to one year
1,178,021
Over one year to two years
 
677,310
Over two years to three years
 
163,890
Over three years to four years
 
69,905
Over four years to five years
 
40,619
Over five years
21,280
 
Total
$
4,123,565
Total
 
Puerto
 
Rico
 
and
 
U.S.
 
time
 
deposits
 
with
 
balances
 
of
 
more
 
than
 
$250,000
 
amounted
 
to
 
$
1.8
 
billion
 
and
 
$
1.5
 
billion
 
as
 
of
September 30, 2025
 
and December 31,
 
2024, respectively.
 
This amount does
 
not include brokered
 
CDs that are generally
 
participated
out by brokers in shares
 
of less than the FDIC insurance
 
limit. As of September 30,
 
2025 and December 31, 2024,
 
unamortized broker
placement
 
fees
 
amounted
 
to
 
$
1.0
 
million
 
and
 
$
1.1
 
million,
 
respectively,
 
which
 
are
 
amortized
 
over
 
the
 
contractual
 
maturity
 
of
 
the
brokered CDs under the interest method.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
51
NOTE 8 –BORROWINGS
Advances from the Federal Home Loan Bank (“FHLB”)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following is a summary of the advances from the FHLB as of the indicated dates:
September 30, 2025
December 31, 2024
(In thousands)
Long-term
Fixed
-rate advances from the FHLB
(1)
$
290,000
$
500,000
(1)
Weighted-average interest rate of
4.32
% and
4.45
% as of September 30, 2025 and December 31, 2024, respectively.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Advances from the FHLB mature as follows as of the indicated date:
September 30, 2025
(In thousands)
Over three months to six months
$
90,000
Over two years to three years
200,000
 
Total
(1)
$
290,000
(1) Average remaining term to maturity of
1.61
 
years.
Junior Subordinated Debentures
Junior subordinated debentures, as of the indicated dates, consisted of:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In thousands)
September 30, 2025
December 31, 2024
Long-term floating rate junior subordinated debentures (FBP Statutory Trust I)
(1)
$
-
$
43,143
Long-term floating rate junior subordinated debentures (FBP Statutory Trust II)
(2)
-
18,557
$
-
$
61,700
(1)
Amount represents
 
junior subordinated
 
interest-bearing
 
debentures
 
due in
 
2034 with
 
a floating
 
interest rate
 
of
2.75
% over
3-month CME Term SOFR
 
plus a
0.26161
% tenor
 
spread
adjustment as of December 31, 2024 (
7.36
% as of December 31, 2024).
(2)
Amount represents
 
junior subordinated
 
interest-bearing
 
debentures
 
due in
 
2034 with
 
a floating
 
interest rate
 
of
2.50
% over
3-month CME Term SOFR
 
plus a
0.26161
% tenor
 
spread
adjustment as of December 31, 2024 (
7.12
% as of December 31, 2024).
See Note
 
6 –
 
“Non-Consolidated Variable
 
Interest Entities
 
(“VIEs”) and
 
Servicing Assets”
 
and Note
 
11 –
 
“Stockholders’ Equity”
for
 
additional
 
information
 
on
 
junior
 
subordinated
 
debentures,
 
including
 
the
 
$
61.7
 
million
 
redemption
 
of
 
the
 
remaining
 
outstanding
TruPS issued by FBP Statutory Trusts
 
I and II.
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
52
NOTE 9 – EARNINGS PER COMMON
.
SHARE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The calculations of earnings per
 
common share for the quarters
 
and nine-month periods ended
 
September 30, 2025 and 2024
 
are as
follows:
Quarter Ended
Nine-Month Period Ended
September 30,
September 30,
2025
2024
2025
2024
(In thousands, except per share information)
Net income attributable to common stockholders
$
100,526
$
73,727
$
257,765
$
223,023
Weighted-Average
 
Shares:
 
Average common
 
shares outstanding
159,291
163,059
161,023
165,041
 
Average potential
 
dilutive common shares
 
796
813
747
689
 
Average common
 
shares outstanding - assuming dilution
160,087
163,872
161,770
165,730
Earnings per common share:
Basic
 
$
0.63
$
0.45
$
1.60
$
1.35
Diluted
 
$
0.63
$
0.45
$
1.59
$
1.35
Earnings
 
per
 
common
 
share
 
is
 
computed
 
by
 
dividing
 
net
 
income
 
attributable
 
to
 
common
 
stockholders
 
by
 
the
 
weighted-average
number
 
of
 
common
 
shares
 
issued
 
and
 
outstanding.
 
Basic
 
weighted-average
 
common
 
shares
 
outstanding
 
exclude
 
unvested shares
 
of
restricted stock that do not contain non-forfeitable dividend rights
 
.
Potential dilutive
 
common
 
shares consist
 
of unvested
 
shares of
 
restricted
 
stock
 
and
 
performance
 
units (if
 
any
 
of the
 
performance
conditions
 
are
 
met
 
as
 
of
 
the
 
end
 
of
 
the
 
reporting
 
period)
 
that
 
do
 
not
 
contain
 
non-forfeitable
 
dividend
 
or
 
dividend
 
equivalent
 
rights
using the
 
treasury stock
 
method. This
 
method assumes
 
that proceeds
 
equal to
 
the amount
 
of compensation
 
cost attributable
 
to future
services
 
is
 
used
 
to
 
repurchase
 
shares
 
on
 
the
 
open
 
market
 
at
 
the
 
average
 
market
 
price
 
for
 
the
 
period.
 
The
 
difference
 
between
 
the
number
 
of
 
potential
 
dilutive
 
shares
 
issued
 
and
 
the
 
shares
 
purchased
 
is
 
added
 
as
 
incremental
 
shares
 
to
 
the
 
actual
 
number
 
of
 
shares
outstanding
 
to
 
compute
 
diluted
 
earnings
 
per
 
share.
 
Unvested
 
shares
 
of
 
restricted
 
stock
 
outstanding
 
during
 
the
 
period
 
that
 
result
 
in
lower potentially
 
dilutive shares issued
 
than shares purchased
 
under the
 
treasury stock method
 
are not included
 
in the computation
 
of
dilutive
 
earnings
 
per
 
share
 
since
 
their
 
inclusion
 
would
 
have an
 
antidilutive
 
effect
 
on
 
earnings
 
per
 
share.
 
There
 
were
no
 
antidilutive
shares of common stock during the quarters and nine-month periods
 
ended September 30, 2025 and 2024.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
53
NOTE 10 – STOCK-BASED
.
COMPENSATION
 
The First BanCorp.
 
Omnibus Incentive Plan (the “Omnibus Plan”), which
 
is effective until May 24, 2026, provides for equity-based
and non-equity-based
 
compensation incentives
 
(the “awards”).
 
The Omnibus
 
Plan authorizes
 
the issuance
 
of up
 
to
14,169,807
 
shares
of common
 
stock, subject
 
to adjustments
 
for
 
stock splits,
 
reorganizations
 
and other
 
similar events.
 
As of
 
September 30,
 
2025, there
were
1,974,291
 
authorized
 
shares
 
of
 
common
 
stock
 
available
 
for
 
issuance
 
under
 
the
 
Omnibus
 
Plan.
 
The
 
Corporation’s
 
Board
 
of
Directors, based
 
on the
 
recommendation
 
of the
 
Compensation and
 
Benefits Committee
 
of the
 
Board, has
 
the power
 
and authority
 
to
determine
 
those
 
eligible
 
to
 
receive
 
awards
 
and
 
to
 
establish
 
the
 
terms
 
and
 
conditions
 
of
 
any
 
awards,
 
subject
 
to
 
various
 
limits
 
and
vesting restrictions that apply to individual and aggregate awards.
Restricted Stock
Under the
 
Omnibus Plan,
 
the Corporation
 
may grant
 
restricted stock
 
to plan
 
participants, subject
 
to forfeiture
 
upon the
 
occurrence
of certain
 
events until
 
the dates
 
specified in
 
the participant’s
 
award agreement.
 
While the
 
restricted stock
 
is subject
 
to forfeiture
 
and
does
 
not
 
contain
 
non-forfeitable
 
dividend
 
rights,
 
participants
 
may
 
exercise
 
full
 
voting
 
rights
 
with
 
respect
 
to
 
the
 
shares
 
of
 
restricted
stock
 
granted
 
to
 
them.
 
The
 
fair
 
value
 
of
 
the
 
shares
 
of
 
restricted
 
stock
 
granted
 
was
 
based
 
on
 
the
 
market
 
price
 
of
 
the
 
Corporation’s
common
 
stock on
 
the date
 
of the
 
respective grant.
 
The shares
 
of restricted
 
stocks granted
 
to employees
 
are subject
 
to the
 
following
vesting period:
 
fifty percent
 
(
50
%) of
 
those shares
 
vest on
 
the
two-year
 
anniversary of
 
the grant
 
date and
 
the remaining
50
% vest
 
on
the
three-year
 
anniversary of
 
the grant
 
date. The
 
shares of
 
restricted stock
 
granted to
 
directors are
 
generally subject
 
to vesting
 
on the
one-year
 
anniversary of the grant date.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The
 
following
 
table
 
summarizes
 
the
 
restricted
 
stock
 
activity
 
under
 
the
 
Omnibus
 
Plan
 
during
 
the
 
nine-month
 
periods
 
ended
September 30, 2025 and 2024:
Nine-Month Period Ended September 30,
2025
2024
Number of
Weighted-
Number of
Weighted-
shares of
Average
shares of
Average
restricted
Grant Date
restricted
Grant Date
stock
 
Fair Value
stock
 
Fair Value
Unvested shares outstanding at beginning of year
1,007,621
$
14.39
889,642
$
12.30
Granted
(1)
461,236
18.46
413,516
17.49
Forfeited
(8,818)
16.27
(7,156)
13.69
Vested
(423,729)
13.13
(276,558)
12.36
Unvested shares outstanding at end of period
1,036,310
$
16.71
1,019,444
$
14.38
(1)
For the
 
nine-month period
 
ended September
 
30, 2025,
 
includes
15,691
 
shares of
 
restricted stock
 
awarded to
 
independent directors
 
and
445,545
 
shares of
 
restricted stock
 
awarded to
employees, of
 
which
103,560
 
shares were
 
granted to
 
retirement-eligible employees
 
and thus
 
charged to
 
earnings as
 
of the
 
grant date.
 
For the
 
nine-month period
 
ended September
 
30,
2024, includes
16,448
 
shares of restricted
 
stock awarded to
 
independent directors and
397,068
 
shares of restricted
 
stock awarded to
 
employees, of which
84,122
 
shares were granted
 
to
retirement-eligible employees and thus charged to earnings
 
as of the grant date.
For
 
the
 
quarter
 
and
 
nine-month
 
period
 
ended
 
September
 
30,
 
2025,
 
the
 
Corporation
 
recognized
 
$
1.4
 
million
 
and
 
$
5.9
 
million,
respectively,
 
of stock-based
 
compensation expense
 
related to
 
restricted stock
 
awards, compared
 
to $
1.3
 
million and
 
$
5.0
 
million for
the
 
same
 
periods
 
in
 
2024,
 
respectively.
 
As of
 
September
 
30,
 
2025,
 
there
 
was $
6.9
 
million
 
of
 
total unrecognized
 
compensation
 
cost
related to unvested shares of restricted stock that the Corporation expects to recognize over a weighted-average period of Under the Omnibus Plan, the Corporation may award performance units to participants, with each unit representing the value of one
1.6
 
years.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
54
Performance Units
share
 
of
 
the
 
Corporation’s
 
common
 
stock.
These awards, which are granted to executives, have the right to receive dividend
equivalents. Such dividend equivalents accrue during the performance cycle and are paid in cash on the vesting date based upon
achievement of the performance goals.
 
Performance units granted vest on the third anniversary of the effective date of the award based on actual achievement of two
performance metrics weighted equally: relative total shareholder return (“Relative TSR”), compared to companies that comprise the
KBW Nasdaq Regional Banking Index, and the achievement of a tangible book value per share (“TBVPS”) goal, which is measured
based upon the growth in the tangible book value during the performance cycle, adjusted for certain allowable non-recurring
transactions. The participant may earn 50% of their target opportunity for threshold level performance and up to 150% of their target
opportunity for maximum level performance, based on the individual achievement of each performance goal during a
three-year
performance cycle. Amounts between threshold, target and maximum performance will vest in a proportional amount.
The
 
following
 
table
 
summarizes
 
the
 
performance
 
units
 
activity
 
under
 
the
 
Omnibus
 
Plan
 
during
 
the
 
nine-month
 
periods
 
ended
September 30, 2025 and 2024:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine-Month Period Ended September 30,
2025
2024
Number
 
Weighted-
Number
 
Weighted-
of
Average
of
Average
Performance
Grant Date
Performance
Grant Date
Units
Fair Value
Units
Fair Value
Performance units at beginning of year
549,032
$
14.37
534,261
$
12.25
Additions
(1)
160,744
18.66
165,487
18.39
Vested
(2)
(166,669)
13.15
(150,716)
11.26
Performance units at end of period
543,107
$
16.01
549,032
$
14.37
(1)
Units granted during the nine-month
 
periods ended September 30,
 
2025 and 2024 are based
 
on the achievement of the
 
Relative TSR and TBVPS performance
 
goals during a three-
year performance cycle beginning January 1, 2025 and January
 
1, 2024, respectively, and ending on
 
December 31, 2027 and December 31, 2026, respectively.
(2)
Units
 
vested
 
during
 
the
 
nine-month
 
periods
 
ended
 
September
 
30,
 
2025
 
and
 
2024
 
are
 
related
 
to
 
performance
 
units
 
granted
 
in
 
2022
 
and
 
2021,
 
respectively,
 
that
 
met
 
the
 
pre-
established targets and were settled with shares
 
of common stock reissued from treasury shares.
The
 
fair
 
value
 
of
 
the
 
performance
 
units
 
awarded,
 
that
 
was
 
based
 
on
 
the
 
TBVPS
 
goal
 
component,
 
was
 
calculated
 
based
 
on
 
the
market
 
price
 
of
 
the
 
Corporation’s
 
common
 
stock
 
on
 
the
 
respective
 
date
 
of
 
the
 
grant
 
and
 
assuming
 
attainment
 
of
 
100%
 
of
 
target
opportunity.
 
As
 
of
 
September
 
30,
 
2025,
 
there
 
have
 
been
 
no
 
changes
 
in
 
management’s
 
assessment
 
of
 
the
 
probability
 
that
 
the
 
pre-
established TBVPS
 
goal will
 
be achieved;
 
as such,
 
no cumulative
 
adjustment to
 
compensation expense
 
has been
 
recognized. The
 
fair
value
 
of
 
the
 
performance
 
units
 
awarded,
 
that
 
was
 
based
 
on
 
the
 
Relative
 
TSR
 
component,
 
was
 
calculated
 
using
 
a
 
Monte
 
Carlo
simulation. Since
 
the Relative
 
TSR component
 
is considered
 
a market
 
condition, the
 
fair value
 
of the
 
portion of
 
the award
 
based on
Relative TSR is not revised subsequent to grant date based on actual performance.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
55
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following table
 
summarizes the valuation
 
assumptions used to
 
calculate the fair
 
value as of
 
the grant date
 
of the Relative
 
TSR
component
 
of the
 
performance units
 
granted under
 
the Omnibus
 
Plan during
 
the nine-month
 
periods ended
 
September 30,
 
2025 and
2024:
Nine-Month Period Ended September 30,
2025
2024
Risk-free interest rate
(1)
3.92
%
4.41
%
Correlation coefficient
74.96
73.80
Expected dividend yield
(2)
-
-
Expected volatility
(3)
31.94
34.65
Expected life (in years)
2.79
2.78
(1)
Based on the yield on zero-coupon U.S. Treasury
 
Separate Trading of Registered Interest and
 
Principal of Securities as of the grant date for a period equal to the
 
simulation term.
(2)
Assumes that dividends are reinvested at each ex-dividend date.
(3)
Calculated based on the historical volatility of the Corporation's
 
stock price with a look-back period equal to the simulation
 
term using daily stock prices.
For
 
the
 
quarter
 
and
 
nine-month
 
period
 
ended
 
September
 
30,
 
2025,
 
the
 
Corporation
 
recognized
 
$
0.8
 
million
 
and
 
$
2.1
 
million,
respectively,
 
of
 
stock-based
 
compensation
 
expense
 
related
 
to
 
performance
 
units,
 
compared
 
to
 
$
0.7
 
million
 
and
 
$
1.8
 
million
 
for
 
the
same periods in 2024,
 
respectively.
 
As of September 30, 2025,
 
there was $
4.4
 
million of total unrecognized
 
compensation cost related
to unvested performance units that the Corporation expects to recognize
 
over a weighted-average period of
1.9
 
years.
Shares withheld
During the
 
first nine months
 
of 2025,
 
the Corporation
 
withheld
194,259
 
shares (first nine
 
months of
 
2024 –
137,206
 
shares) of the
restricted
 
stock
 
and
 
performance
 
units
 
that vested
 
during
 
such
 
period to
 
cover
 
the participants’
 
payroll
 
and
 
income
 
tax withholding
liabilities;
 
these
 
shares
 
are
 
held
 
as
 
treasury
 
shares.
 
The
 
Corporation
 
paid
 
in
 
cash
 
any
 
fractional
 
share
 
of
 
salary
 
stock
 
to
 
which
 
an
officer was entitled. In the consolidated financial statements, the Corporation presents shares withheld for tax purposes as common shares of common stock through open market transactions at
stock repurchases.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
56
NOTE 11 – STOCKHOLDERS’
 
EQUITY
Repurchase Programs
On
 
July
 
22,
 
2024,
 
the
 
Corporation
 
announced
 
that
 
its
 
Board
 
of
 
Directors
 
approved
 
a
 
repurchase
 
program
 
under
 
which
 
the
Corporation
 
may
 
repurchase
 
up
 
to
 
$
250
 
million
 
that
 
could
 
include
 
repurchases
 
of
 
common
 
stock
 
and/or
 
junior
 
subordinated
debentures. Under
 
this program,
 
the Corporation
 
repurchased
5,158,809
an
 
average
 
price
 
of
 
$
19.38
 
for
 
a
 
total
 
cost
 
of
 
approximately
 
$
100.0
 
million
 
during
 
the
 
first
 
nine
 
months
 
of
 
2025.
 
In
 
addition,
 
the
Corporation
 
redeemed
 
$
61.7
 
million
 
of
 
outstanding
 
junior subordinated
 
debentures.
 
As of
 
September
 
30, 2025,
 
the Corporation
 
has
remaining
 
authorization
 
of approximately
 
$
38.3
 
million,
 
which it
 
expects to
 
execute during
 
the remainder
 
of 2025.
 
Furthermore, on
October 22,
 
2025, the
 
Corporation announced
 
that its Board
 
of Directors
 
approved a
 
new stock
 
repurchase program,
 
under which
 
the
Corporation may repurchase up to an additional $
200
 
million of its outstanding common stock, which it expects to execute
 
through the
end of the fourth quarter of 2026.
Repurchases
 
under
 
these programs
 
may
 
be
 
executed
 
through open
 
market
 
purchases,
 
accelerated
 
share
 
repurchases
 
and
 
privately
negotiated
 
transactions
 
or
 
plans,
 
including
 
plans
 
complying
 
with
 
Rule
 
10b5-1
 
under
 
the
 
Exchange
 
Act,
 
and
 
will
 
be
 
conducted
 
in
accordance with
 
applicable legal
 
and regulatory
 
requirements. The
 
Corporation’s
 
repurchase programs
 
are subject
 
to various
 
factors,
including
 
the Corporation’s
 
capital position,
 
liquidity,
 
financial performance
 
and alternative
 
uses of
 
capital, stock
 
trading price,
 
and
general
 
market conditions.
 
The repurchase
 
programs do
 
not obligate
 
it to
 
acquire any
 
specific number
 
of shares
 
and do
 
not have
 
an
expiration date. The
 
repurchase programs
 
may be modified, suspended,
 
or terminated at
 
any time at the
 
Corporation’s discretion.
 
Any
repurchased shares of common stock are
 
expected to be held as treasury shares.
 
The Corporation’s holding
 
company has no operations
and depends on dividends, distributions
 
and other payments from its
 
subsidiaries to fund dividend payments,
 
stock repurchases, and to
fund all payments on its obligations, including debt obligations.
Common Stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The
 
following
 
table
 
shows
 
the
 
changes
 
in
 
shares
 
of
 
common
 
stock
 
outstanding
 
for
 
the
 
quarters
 
and
 
nine-month
 
periods
 
ended
September 30, 2025 and 2024:
Total
 
Number of Shares
Quarter Ended
Nine-Month Period Ended
September 30,
September 30,
2025
2024
2025
2024
Common stock outstanding, beginning of period
161,507,795
163,865,453
163,868,877
169,302,812
Common stock repurchased
(1)
(2,386,504)
(898)
(5,353,068)
(5,984,078)
Common stock reissued under stock-based compensation plan
13,605
14,947
627,905
564,232
Restricted stock forfeited
-
(3,692)
(8,818)
(7,156)
Common stock outstanding, end of period
159,134,896
163,875,810
159,134,896
163,875,810
(1)
For the
 
quarter and
 
nine-month period
 
ended September
 
30, 2025
 
includes
5,993
 
and
194,259
 
shares, respectively,
 
of common stock
 
surrendered to
 
cover plan
 
participants’ payroll
 
and
income taxes.
 
For the quarter
 
and nine-month
 
period ended
 
September 30,
 
2024 includes
898
 
and
137,206
 
shares, respectively,
 
of common stock
 
surrendered to
 
cover plan
 
participants’
payroll and income taxes.
For
 
the
 
quarter
 
and
 
nine-month
 
period
 
ended
 
September
 
30,
 
2025,
 
total
 
cash
 
dividends
 
declared
 
on
 
shares
 
of
 
common
 
stock
amounted to
 
$
28.7
 
million ($
0.18
 
per share)
 
and $
87.4
 
million ($
0.54
 
per share),
 
respectively,
 
compared to
 
$
26.3
 
million ($
0.16
 
per
share) and $
79.7
 
million ($
0.48
 
per share), for
 
the same periods
 
of 2024, respectively.
 
On
October 22, 2025
, the Corporation’s
 
Board
of
 
Directors
 
declared
 
a
 
quarterly
 
cash
 
dividend
 
of
 
$
0.18
 
per
 
common
 
share.
 
The
 
dividend
 
is
 
payable
 
on
December 12, 2025
 
to
shareholders of record
 
at the close of business
 
on
November 28, 2025
. The Corporation intends
 
to continue to pay
 
quarterly dividends
on
 
common
 
stock.
 
However,
 
the
 
Corporation’s
 
common
 
stock
 
dividends,
 
including
 
the
 
declaration,
 
timing,
 
and
 
amount,
 
remain
subject to consideration and approval by the Corporation’s
 
Board of Directors at the relevant times.
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
57
Preferred Stock
The Corporation
 
has
50,000,000
 
authorized shares of
 
preferred stock with
 
a par value
 
of $
1.00
, subject to
 
certain terms. This
 
stock
may
 
be
 
issued
 
in
 
series
 
and
 
the
 
shares
 
of
 
each
 
series
 
have
 
such
 
rights
 
and
 
preferences
 
as
 
are
 
fixed
 
by
 
the
 
Corporation’s
 
Board
 
of
Directors
 
when
 
authorizing
 
the
 
issuance
 
of
 
that
 
particular
 
series
 
and
 
are
 
redeemable
 
at
 
the
 
Corporation’s
 
option.
No
 
shares
 
of
preferred stock were outstanding as of September 30, 2025 and December 31,
 
2024.
Treasury Stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following
 
table
 
shows the
 
changes
 
in
 
shares of
 
treasury
 
stock
 
for
 
the quarters
 
and
 
nine-month
 
periods
 
ended September
 
30,
2025 and 2024:
Total
 
Number of Shares
Quarter Ended
Nine-Month Period Ended
September 30,
September 30,
2025
2024
2025
2024
Treasury stock, beginning of period
62,155,321
59,797,663
59,794,239
54,360,304
Common stock repurchased
2,386,504
898
5,353,068
5,984,078
Common stock reissued under stock-based compensation plan
(13,605)
(14,947)
(627,905)
(564,232)
Restricted stock forfeited
-
3,692
8,818
7,156
Treasury stock, end of period
64,528,220
59,787,306
64,528,220
59,787,306
FirstBank Statutory Reserve (Legal Surplus)
The
 
Puerto
 
Rico
 
Banking
 
Law
 
of
 
1933,
 
as
 
amended
 
(the
 
“Puerto
 
Rico
 
Banking
 
Law”),
 
requires
 
that
 
a
 
minimum
 
of
10
%
 
of
FirstBank’s
 
net income
 
for
 
the year
 
be transferred
 
to a
 
legal surplus
 
reserve
 
until such
 
surplus
 
equals the
 
total of
 
paid-in-capital
 
on
common and preferred
 
stock. Amounts transferred
 
to the legal surplus
 
reserve from retained
 
earnings are not available
 
for distribution
to the Corporation without the
 
prior consent of the Puerto
 
Rico Commissioner of Financial Institutions.
The Puerto Rico Banking Law
provides that, when the expenditures of a Puerto Rico commercial bank are greater than receipts, the excess of the expenditures over
receipts must be charged against the undistributed profits of the bank, and the balance, if any, must be charged against the legal
surplus reserve, as a reduction thereof. If the legal surplus reserve is not sufficient to cover such balance in whole or in part, the
outstanding amount must be charged against the capital account and the Bank cannot pay dividends until it can replenish the legal
surplus reserve to an amount of at least 20% of the original capital contributed.
 
FirstBank’s
 
legal surplus
 
reserve, included
 
as part
 
of
retained
 
earnings
 
in
 
the
 
Corporation’s
 
consolidated
 
statements
 
of
 
financial
 
condition,
 
amounted
 
to
 
$
230.2
 
million
 
as
 
of
 
each
 
of
September 30, 2025 and December 31, 2024. There were
no
 
transfers to the legal surplus reserve during the first nine months of 2025.
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
58
NOTE 12 – ACCUMULATED
 
OTHER COMPREHENSIVE LOSS
 
The following
 
table presents
 
the changes
 
in accumulated
 
other comprehensive
 
loss for
 
the quarters
 
and nine-month
 
periods ended
September 30, 2025 and 2024:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Changes in Accumulated Other Comprehensive
 
Loss by Component
(1)
Quarter Ended September 30,
Nine-Month Period Ended September
 
30,
2025
2024
2025
2024
(In thousands)
Net unrealized holding losses on available-for-sale
 
debt securities:
Beginning balance
$
(442,072)
$
(645,057)
$
(567,338)
$
(640,552)
 
Other comprehensive income
(2)
48,834
160,054
174,100
155,549
Ending balance
$
(393,238)
$
(485,003)
$
(393,238)
$
(485,003)
Adjustment of pension and postretirement
 
benefit plans:
Beginning balance
$
782
$
1,382
$
782
$
1,382
 
Other comprehensive income
-
-
-
-
Ending balance
$
782
$
1,382
$
782
$
1,382
(1)
All amounts presented are net of tax.
(2)
Net unrealized holding gains on available-for-sale debt securities have no tax effect because securities are either tax-exempt, held by an IBE, or have a full deferred tax asset valuation allowance.
NOTE 13 – EMPLOYEE BENEFIT PLANS
The Corporation
 
maintains two frozen
 
qualified noncontributory
 
defined benefit pension
 
plans (the “Pension
 
Plans”), and
 
a related
complementary
 
post-retirement
 
benefit
 
plan
 
(the
 
“Postretirement
 
Benefit
 
Plan”)
 
covering
 
medical
 
benefits
 
and
 
life
 
insurance
 
after
retirement
 
that
 
it
 
obtained
 
in
 
the
 
Banco
 
Santander
 
Puerto
 
Rico
 
(“BSPR”)
 
acquisition
 
on
 
September
 
1,
 
2020.
 
One
 
defined
 
benefit
pension
 
plan covers
 
substantially all
 
of BSPR’s
 
former
 
employees who
 
were active
 
before January
 
1, 2007,
 
while
 
the other
 
defined
benefit pension plan covers personnel of an institution previously acquired
 
by BSPR. Benefits are based on salary and years of service.
The accrual of benefits under the Pension Plans is frozen to all participants.
The following table presents the components of net periodic benefit for the indicated
 
periods:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Affected Line Item
in the Consolidated
Quarter Ended September 30,
Nine-Month Period Ended September 30,
Statements of Income
2025
2024
2025
2024
(In thousands)
Net periodic benefit, pension plans:
Interest cost
Other expenses
$
929
$
900
$
2,787
$
2,702
Expected return on plan assets
Other expenses
(998)
(1,017)
(2,994)
(3,053)
Net periodic benefit, pension plans
(69)
(117)
(207)
(351)
Net periodic cost, postretirement plan The Corporation is subject to Puerto Rico income tax on its income from all sources.
Other expenses
7
17
20
49
Net periodic benefit
$
(62)
$
(100)
$
(187)
$
(302)
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
59
NOTE 14 –
 
INCOME TAXES
 
Under the Puerto Rico Internal Revenue Code,
as amended (the “PR Tax
 
Code”), the Corporation and its subsidiaries are treated as
 
separate taxable entities and are not entitled to file
consolidated tax returns. However,
 
certain subsidiaries that are
 
organized as limited liability
 
companies with a partnership
 
election are
treated
 
as
 
pass-through
 
entities
 
for
 
Puerto
 
Rico
 
tax
 
purposes.
 
Furthermore,
 
the
 
Corporation
 
conducts
 
business
 
through
 
entities
 
with
special tax
 
treatments, including
 
an IBE
 
unit of
 
the Bank
 
and through
 
FirstBank Overseas
 
Corporation,
 
each of
 
which are
 
generally
exempt
 
from
 
Puerto
 
Rico
 
income
 
taxation
 
under
 
the
 
International
 
Banking
 
Entity
 
Act
 
of
 
Puerto
 
Rico
 
(“IBE
 
Act”),
 
and
 
through
 
a
wholly-owned
 
subsidiary
 
that
 
engages
 
in
 
certain
 
Puerto
 
Rico
 
qualified
 
investing
 
and
 
lending
 
activities
 
with
 
certain
 
tax
 
advantages
under Act 60 of 2019.
On July 17, 2025, the Government of Puerto Rico enacted
 
Act 65-2025 which, among other things, allows domestic
 
limited liability
companies owned
 
by legal entities
 
to elect to
 
be treated
 
as disregarded entities
 
for tax purposes.
 
As a result
 
of this change,
 
during the
third
 
quarter
 
of
 
2025,
 
the
 
Corporation
 
reversed
 
approximately
 
$
16.6
 
million
 
in
 
valuation
 
allowance
 
related
 
to
 
deferred
 
tax
 
assets
primarily
 
associated
 
with
 
net
 
operating
 
loss
 
(“NOL”)
 
carryforwards
 
at
 
the
 
holding
 
company
 
level.
 
This
 
reversal
 
reflects
 
the
Corporation’s
 
expectation of realizing
 
these tax benefits under
 
the new election
 
established by the Act.
 
As of September 30,
 
2025, the
remaining
 
valuation
 
allowance
 
related
 
to
 
deferred
 
tax
 
assets
 
associated
 
with
 
NOL
 
carryforwards
 
at
 
the
 
holding
 
company
 
level
 
was
approximately $
1.0
 
million.
 
For the quarter
 
and nine-month period
 
ended September 30,
 
2025, the Corporation
 
recorded an income
 
tax expense of
 
$
5.7
 
million
and
 
$
51.6
 
million,
 
respectively,
 
compared
 
to
 
an
 
income
 
tax
 
expense
 
of
 
$
22.7
 
million
 
and
 
$
72.2
 
million,
 
respectively,
 
for
 
the
 
same
periods
 
in
 
2024.
 
The
 
decrease
 
in
 
income
 
tax
 
expense
 
for
 
the
 
third
 
quarter
 
and
 
nine-month
 
period
 
ended
 
September
 
30,
 
2025
 
was
driven by
 
the aforementioned
 
one-time reversal
 
of approximately
 
$
16.6
 
million in
 
valuation allowance
 
and a
 
lower estimated
 
annual
effective
 
tax
 
rate
 
due
 
to
 
a
 
higher
 
proportion
 
of
 
exempt
 
to
 
taxable
 
income.
 
The
 
Corporation’s
 
estimated
 
annual
 
effective
 
tax
 
rate,
excluding discrete items, decreased to
22.2
% for the first nine months of 2025, compared to
24.5
% for the comparable period in 2024.
Income
 
tax
 
expense
 
also
 
includes
 
USVI
 
income
 
taxes,
 
as
 
well
 
as
 
applicable
 
U.S.
 
federal
 
and
 
state
 
taxes.
 
As
 
a
 
Puerto
 
Rico
corporation, FirstBank
 
is treated as
 
a foreign corporation
 
for U.S. and
 
USVI income tax
 
purposes and is
 
generally subject to
 
U.S. and
USVI income
 
tax only
 
on its
 
income from
 
sources within
 
the U.S.
 
and USVI
 
or income
 
effectively
 
connected with
 
the conduct
 
of a
trade or business in those jurisdictions.
 
Such tax paid in the U.S. and USVI
 
is also creditable against the
 
Corporation’s Puerto Rico
 
tax
liability,
 
subject
 
to
 
certain
 
conditions
 
and
 
limitations.
 
For
 
the
 
quarter
 
and
 
nine-month
 
period
 
ended
 
September
 
30,
 
2025,
 
FirstBank
incurred
 
current
 
income
 
tax
 
expense
 
of
 
approximately
 
$
3.2
 
million
 
and
 
$
8.6
 
million,
 
respectively,
 
related
 
to
 
its
 
U.S.
 
operations,
compared to $
2.8
 
million and $
7.7
 
million, respectively, for the comparable
 
periods in 2024.
As of
 
September
 
30,
 
2025,
 
the Corporation
 
had
 
a net
 
deferred tax
 
asset of
 
$
146.9
 
million, net
 
of a
 
valuation
 
allowance of
 
$
80.8
million against
 
the deferred
 
tax asset,
 
compared to
 
a net
 
deferred tax
 
asset of
 
$
136.4
 
million, net
 
of a
 
valuation allowance
 
of $
119.1
million, as
 
of December
 
31, 2024.
 
The increase
 
in the
 
net deferred
 
tax asset
 
was driven
 
by the
 
aforementioned
 
one-time reversal
 
of
approximately
 
$
16.6
 
million
 
in
 
valuation
 
allowance.
 
The
 
net deferred
 
tax
 
asset of
 
the
 
Corporation’s
 
banking
 
subsidiary,
 
FirstBank,
amounted to
 
$
133.0
 
million as
 
of September
 
30, 2025,
 
net of
 
a valuation
 
allowance of
 
$
77.0
 
million, compared
 
to a
 
net deferred
 
tax
asset of
 
$
136.4
 
million, net
 
of a
 
valuation allowance
 
of $
98.5
 
million, as
 
of December
 
31, 2024.
 
The decrease
 
in the
 
net deferred
 
tax
asset
 
of
 
FirstBank
 
was
 
mainly
 
related
 
to
 
the
 
usage
 
of
 
alternative
 
minimum
 
tax
 
credits.
 
Meanwhile,
 
the
 
decrease
 
in
 
the
 
valuation
allowance was related
 
primarily to changes in
 
the market value of
 
available-for-sale debt securities,
 
which resulted in an
 
equal change
in
 
the
 
net
 
deferred
 
tax
 
asset
 
without
 
impacting
 
earnings.
 
The
 
Corporation
 
maintains
 
a
 
full
 
valuation
 
allowance
 
for
 
its
 
deferred
 
tax
assets associated
 
with capital
 
loss carryforwards,
 
NOL carryforwards
 
corresponding
 
to USVI
 
and unrealized
 
losses of
 
available-for-
sale debt securities.
See Note 20
 
– “Income Taxes,”
 
to the audited
 
consolidated financial statements
 
included in the
 
2024 Annual Report
 
on Form 10-K
for information on the tax
 
treatment of NOL carryforwards and dividend
 
received deduction under the PR Tax
 
Code and the limitation
under Section 382 of the U.S. Internal Revenue Code.
The amount
 
of unrecognized
 
tax benefits
 
may increase
 
or decrease
 
in the
 
future for
 
various reasons,
 
including adding
 
amounts for
current tax
 
year positions,
 
expiration of
 
open income
 
tax returns
 
due to the
 
statute of
 
limitations, changes
 
in management’s
 
judgment
about the level of uncertainty,
 
the status of examinations, litigation and legislative activity,
 
and the addition or elimination of uncertain
tax positions.
 
The statute
 
of limitations
 
under the
 
PR Tax
 
Code is
 
four years
 
after a
 
tax return
 
is due
 
or filed,
 
whichever is
 
later; the
statute of
 
limitations for
 
U.S. and
 
USVI income
 
tax purposes
 
is three
 
years after
 
a tax
 
return is
 
due or
 
filed, whichever
 
is later.
 
For
U.S. and
 
USVI income
 
tax purposes,
 
all tax
 
years subsequent
 
to 2020
 
remain open
 
to examination.
 
For Puerto
 
Rico tax
 
purposes, all
tax years subsequent to 2019 remain open to examination.
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
60
NOTE 15 –
 
FAIR VALUE
Fair Value
 
Measurement
ASC Topic
 
820, “Fair
 
Value
 
Measurement,” defines
 
fair value as
 
the exchange
 
price that would
 
be received for
 
an asset or
 
paid to
transfer
 
a
 
liability
 
(an
 
exit
 
price)
 
in
 
the
 
principal
 
or
 
most
 
advantageous
 
market
 
for
 
the
 
asset
 
or
 
liability
 
in
 
an
 
orderly
 
transaction
between market
 
participants on
 
the measurement
 
date. This guidance
 
also establishes
 
a three-level
 
hierarchy for
 
measuring fair
 
value
based on the
 
observability of inputs:
 
(i) Level 1
 
inputs are quoted
 
prices in active markets
 
for identical assets and
 
liabilities; (ii) Level
2 inputs are observable
 
inputs other than Level
 
1 prices, such as quoted
 
prices for similar assets or
 
liabilities in active markets,
 
as well
as
 
inputs
 
that
 
are
 
observable
 
for
 
the
 
asset
 
or
 
liability
 
(other
 
than
 
quoted
 
prices);
 
and
 
(iii)
 
Level
 
3
 
inputs
 
are
 
unobservable
 
inputs,
requiring significant judgement due to limited or no market activity.
See Note 23 –
 
“Fair Value,”
 
to the audited consolidated
 
financial statements included
 
in the 2024 Annual
 
Report on Form 10-K
 
for
a description of the valuation methodologies used to measure financial instruments
 
at fair value on a recurring basis.
 
There
 
were
 
no
 
transfers
 
of
 
assets
 
and
 
liabilities
 
measured
 
at
 
fair
 
value
 
between
 
Level
 
1
 
and
 
Level
 
2
 
measurements
 
during
 
the
quarters and nine-month periods ended September 30, 2025 and
 
2024.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets and liabilities measured at fair value on a recurring basis are summarized below as of
 
the indicated dates:
As of September 30, 2025
As of December 31, 2024
Fair Value Measurements Using
 
Fair Value Measurements Using
 
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
(In thousands)
Assets:
 
Available-for-sale debt securities:
U.S. Treasury securities
$
496,803
$
-
$
-
$
496,803
$
59,189
$
-
$
-
$
59,189
Noncallable U.S. agencies debt securities
-
646,783
-
646,783
-
533,296
-
533,296
Callable U.S. agencies debt securities
-
612,631
-
612,631
-
1,307,035
-
1,307,035
MBS
-
2,836,675
3,332
(1)
2,840,007
-
2,658,967
4,195
(1)
2,663,162
Puerto Rico government obligation
-
-
1,579
1,579
-
-
1,620
1,620
Other investments
-
-
500
500
-
-
1,000
1,000
 
Equity securities
5,009
-
-
5,009
4,886
-
-
4,886
 
Derivative assets
-
332
-
332
-
318
-
318
Liabilities:
 
Derivative liabilities
-
264
-
264
-
150
-
150
(1) Related to private label MBS.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The table
 
below presents
 
a reconciliation
 
of the
 
beginning and
 
ending balances
 
of all
 
assets measured
 
at fair
 
value on
 
a recurring
basis using significant unobservable inputs (Level 3) for the quarters
 
and nine-month periods ended September 30, 2025 and 2024:
Quarter Ended September 30,
Nine-Month Period Ended September 30,
2025
2024
2025
2024
Level 3 Instruments Only
 
 
Securities Available
for Sale
(1)
Securities Available
for Sale
(1)
Securities Available
for Sale
(1)
Securities Available
for Sale
(1)
(In thousands)
Beginning balance
$
5,857
$
7,099
$
6,815
$
6,200
 
Total (losses) gains:
 
Included in other comprehensive income (unrealized)
(72)
178
219
592
 
Included in earnings (unrealized)
(2)
(146)
36
(138)
45
 
Purchases
-
-
-
1,000
 
Principal repayments and amortization
(3)
(228)
(425)
(1,485)
(949)
Ending balance
$
5,411
$
6,888
$
5,411
$
6,888
___________________
(1)
Amounts mostly related to private label MBS.
(2)
Changes in unrealized (losses) gains included in earnings were
 
recognized within provision for credit losses – expense
 
and relate to assets still held as of the reporting date.
(3)
For the nine-month period ended September 30, 2025 include
 
a $
0.5
 
million repayment of a matured debt security.
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
61
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The
 
tables
 
below
 
present
 
quantitative
 
information
 
for
 
significant
 
assets
 
measured
 
at
 
fair
 
value
 
on
 
a
 
recurring
 
basis
 
using
significant unobservable inputs (Level 3) as of the indicated dates:
September 30, 2025
Fair Value
Valuation Technique
Unobservable Input
Range
Weighted
Average
Minimum
 
Maximum
(Dollars in thousands)
Available-for-sale
 
debt securities:
 
Private label MBS
$
3,332
Discounted cash flows
Discount rate
16.0%
16.0%
16.0%
Prepayment rate
1.6%
8.1%
3.4%
Projected cumulative loss rate
0.1%
11.7%
5.8%
 
Puerto Rico government obligation
$
1,579
Discounted cash flows
Discount rate
11.3%
11.3%
11.3%
Projected cumulative loss rate
24.3%
24.3%
24.3%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2024
Fair Value
Valuation Technique
Unobservable Input
Range
Weighted
Average
Minimum
 
Maximum
(Dollars in thousands)
Available-for-sale
 
debt securities:
 
Private label MBS
$
4,195
Discounted cash flows
Discount rate
16.6%
16.6%
16.6%
Prepayment rate
0.0%
5.7%
3.2%
Projected cumulative loss rate
0.1%
10.1%
4.9%
 
Puerto Rico government obligation
$
1,620
Discounted cash flows
Discount rate
11.5%
11.5%
11.5%
Projected cumulative loss rate
23.9%
23.9%
23.9%
 
 
Information about Sensitivity to Changes in Significant Unobservable Inputs
Private label
 
MBS: The
 
significant unobservable
 
inputs in
 
the valuation
 
include probability
 
of default,
 
the loss
 
severity
 
assumption,
and prepayment
 
rates. Shifts
 
in those
 
inputs would
 
result in different
 
fair value
 
measurements. Increases
 
in the probability
 
of default,
loss
 
severity
 
assumptions,
 
and
 
prepayment
 
rates
 
in
 
isolation
 
would
 
generally
 
result
 
in
 
an
 
adverse
 
effect
 
on
 
the
 
fair
 
value
 
of
 
the
instruments. The Corporation modeled meaningful and possible
 
shifts of each input to assess the effect on the fair value estimation.
Puerto Rico Government Obligation:
 
The significant unobservable input used in the
 
fair value measurement is the assumed loss rate of
the
 
underlying
 
residential
 
mortgage
 
loans
 
that
 
collateralize
 
a
 
pass-through
 
MBS
 
guaranteed
 
by
 
the
 
PRHFA.
 
A
 
significant
 
increase
(decrease) in
 
the assumed
 
rate would
 
lead to
 
a (lower)
 
higher fair
 
value estimate.
 
See Note
 
2 –
 
“Debt Securities”
 
for information
 
on
the methodology used to calculate the fair value of this debt security.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
62
Additionally, fair value
 
is used on a non-recurring basis to evaluate certain assets in accordance with GAAP.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For
 
the
 
quarter
 
and
 
nine-month
 
period
 
ended
 
September
 
30,
 
2025,
 
the
 
Corporation
 
recorded
 
losses
 
or
 
valuation
 
adjustments
 
for
assets recognized at fair value on a non-recurring basis and still held at September
 
30, 2025, as shown in the following table:
Carrying value as of September 30, 2025
Related to losses
 
recorded for the
Quarter Ended
September 30, 2025
Related to losses
 
recorded for the
Nine-Month Period Ended
September 30, 2025
Losses recorded for the
Quarter Ended
September 30, 2025
Losses recorded for the
Nine-Month Period Ended
September 30, 2025
(In thousands)
Level 3:
Loans receivable
(1)
$
250
$
9,214
$
(12)
$
(630)
OREO
(2) (3)
211
387
(1)
(5)
(1)
Consists mainly of
 
collateral dependent commercial
 
and construction
 
loans. The Corporation
 
generally measured
 
losses based
 
on the fair
 
value of the
 
collateral. The Corporation
 
derived
the fair values from
 
external appraisals that
 
took into consideration prices
 
in observed transactions involving
 
similar assets in
 
similar locations but adjusted
 
for specific characteristics
 
and
assumptions of
 
the collateral
 
(e.g., absorption
 
rates), which
 
are not
 
market observable.
 
There were
no
 
adjustments applied
 
on appraisals
 
for the
 
quarter ended
 
September 30,
 
2025. The
adjustment applied on appraisals was of
22
% for the nine-month period ended September 30, 2025.
(2)
The Corporation
 
derived the
 
fair values
 
from appraisals
 
that took
 
into consideration
 
prices in
 
observed transactions
 
involving similar
 
assets in
 
similar locations
 
but adjusted
 
for specific
characteristics and assumptions of
 
the properties (e.g., absorption rates
 
and net operating income of
 
income producing properties),
 
which are not market observable.
 
Losses were related to
market valuation adjustments
 
after the transfer
 
of the loans
 
to the OREO
 
portfolio. The
 
adjustments applied on
 
appraisals ranged
 
from
3
% to
24
% for the
 
quarter and nine-month
 
period
ended September 30, 2025.
(3)
Excludes
 
the
 
aforementioned
 
$
2.8
 
million
 
adjustment
 
in
 
connection
 
with
 
ongoing
 
litigation
 
involving
 
a
 
commercial
 
OREO
 
property
 
in
 
the
 
Virgin
 
Islands
 
region.
 
See
 
Note
 
19
 
–
“Regulatory Matters, Commitments and Contingencies” for further details.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For
 
the
 
quarter
 
and
 
nine-month
 
period
 
ended
 
September
 
30,
 
2024,
 
the
 
Corporation
 
recorded
 
losses
 
or
 
valuation
 
adjustments
 
for
assets recognized at fair value on a non-recurring basis and still held at September
 
30, 2024, as shown in the following table:
Carrying value as of September 30, 2024
Related to losses
 
 
recorded for the
 
Quarter Ended
 
September 30, 2024
Related to losses
 
recorded for the
Nine-Month Period Ended
 
September 30, 2024
Losses recorded for the
 
Quarter Ended
 
September 30, 2024
Losses recorded for the
Nine-Month Period Ended
September 30, 2024
(In thousands)
Level 3:
Loans receivable
(1)
$
5,910
$
22,204
$
(386)
$
(1,441)
OREO
(2)
752
1,437
(33)
(108)
Level 2:
(1)
Consists mainly of
 
collateral dependent commercial
 
and construction
 
loans. The
 
Corporation generally measured
 
losses based
 
on the fair
 
value of the
 
collateral. The
 
Corporation derived
the fair values from
 
external appraisals that
 
took into consideration prices
 
in observed transactions
 
involving similar assets
 
in similar locations but
 
adjusted for specific characteristics
 
and
assumptions of
 
the collateral
 
(e.g., absorption
 
rates), which
 
are not
 
market observable.
 
There were
no
 
adjustments applied
 
on appraisals
 
for the
 
quarter ended
 
September 30,
 
2024. The
adjustments applied on appraisals were of
4
% for the nine-month period ended September 30, 2024.
(2)
The Corporation
 
derived the
 
fair values
 
from appraisals
 
that took
 
into consideration
 
prices in
 
observed transactions
 
involving similar
 
assets in
 
similar locations
 
but adjusted
 
for specific
characteristics and assumptions of
 
the properties (e.g., absorption
 
rates and net operating income
 
of income producing properties),
 
which are not market observable.
 
Losses were related to
market
 
valuation
 
adjustments
 
after
 
the
 
transfer
 
of
 
the
 
loans
 
to
 
the
 
OREO
 
portfolio.
 
The
 
adjustments
 
applied
 
ranged
 
from
2
%
 
to
44
%
 
for
 
the
 
quarter
 
and
 
nine-month
 
period
 
ended
September 30, 2024.
 
See Note 23 – “Fair Value,” to the audited consolidated financial statements included in the 2024 Annual Report on Form 10-K for instruments as of the indicated dates:
qualitative
 
information
 
regarding
 
the
 
fair
 
value
 
measurements
 
for
 
Level
 
3
 
financial
 
instruments
 
measured
 
at
 
fair
 
value
 
on
 
a
nonrecurring basis.
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
63
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The
 
following
 
tables
 
present
 
the
 
carrying
 
value,
 
estimated
 
fair
 
value
 
and
 
estimated
 
fair
 
value
 
level
 
of
 
the
 
hierarchy
 
of
 
financial
Total Carrying Amount
in Statement of
Financial Condition as
of September 30, 2025
Fair Value Estimate as
 
of
September 30, 2025
Level 1
Level 2
Level 3
(In thousands)
Assets:
Cash and due from banks and money market investments (amortized
 
cost)
$
899,570
$
899,570
$
899,570
$
-
$
-
Available-for-sale debt
 
securities (fair value)
4,598,303
4,598,303
496,803
4,096,089
5,411
Held-to-maturity debt securities:
 
Held-to-maturity debt securities (amortized cost)
273,363
 
Less: ACL on held-to-maturity debt securities
(698)
 
Held-to-maturity debt securities, net of ACL
$
272,665
269,253
-
184,070
85,183
Equity securities (amortized cost)
39,381
39,381
-
39,381
(1)
-
Other equity securities (fair value)
5,009
5,009
5,009
-
-
Loans held for sale (lower of cost or market)
12,546
12,793
-
12,793
-
Loans held for investment:
 
Loans held for investment (amortized cost)
13,048,684
 
Less: ACL for loans and finance leases
(246,990)
 
Loans held for investment, net of ACL
$
12,801,694
12,700,160
-
-
12,700,160
MSRs (amortized cost)
23,659
41,710
-
-
41,710
Derivative assets (fair value)
 
(2)
332
332
-
332
-
Liabilities:
Deposits (amortized cost)
$
16,861,047
$
16,864,154
$
-
$
16,864,154
$
-
Long-term advances from the FHLB (amortized cost)
290,000
292,473
-
292,473
-
Derivative liabilities (fair value)
 
(2)
264
264
-
264
-
(1) Includes FHLB stock with a carrying value of $
24.7
 
million, which is considered restricted.
(2) Includes interest rate swap agreements, forward contracts, and interest rate lock commitments.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
64
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Carrying Amount
in Statement of
Financial Condition as
of December 31, 2024
Fair Value Estimate as
 
of
December 31, 2024
Level 1
Level 2
Level 3
(In thousands)
Assets:
Cash and due from banks and money market investments (amortized
 
cost)
$
1,159,415
$
1,159,415
$
1,159,415
$
-
$
-
Available-for-sale debt
 
securities (fair value)
4,565,302
4,565,302
59,189
4,499,298
6,815
Held-to-maturity debt securities:
 
Held-to-maturity debt securities (amortized cost)
317,786
 
Less: ACL on held-to-maturity debt securities
(802)
 
Held-to-maturity debt securities, net of ACL
$
316,984
308,040
-
212,432
95,608
Equity securities (amortized cost)
47,132
47,132
-
47,132
(1)
-
Other equity securities (fair value)
4,886
4,886
4,886
-
-
Loans held for sale (lower of cost or market)
15,276
15,276
-
15,276
-
Loans held for investment:
 
 
Loans held for investment (amortized cost)
12,746,556
 
Less: ACL for loans and finance leases
(243,942)
 
Loans held for investment, net of ACL
$
12,502,614
12,406,405
-
-
12,406,405
MSRs (amortized cost)
25,019
43,046
-
-
43,046
Derivative assets (fair value)
(2)
318
318
-
318
-
Liabilities:
Deposits (amortized cost)
$
16,871,298
$
16,872,963
$
-
$
16,872,963
$
-
Long-term advances from the FHLB (amortized cost)
500,000
500,128
-
500,128
-
Junior subordinated debentures (amortized cost)
61,700
61,752
-
-
61,752
Derivative liabilities (fair value)
(2)
150
150
-
150
-
(1) Includes FHLB stock with a carrying value of $
34.0
 
million, which is considered restricted.
(2) Includes interest rate swap agreements, forward contracts, and interest rate lock commitments.
The short-term nature
 
of certain assets and
 
liabilities result in their
 
carrying value approximating
 
fair value. These include
 
cash and
cash
 
due
 
from
 
banks
 
and
 
other
 
short-term
 
assets,
 
such
 
as
 
FHLB
 
stock.
 
Certain
 
assets,
 
the
 
most
 
significant
 
being
 
premises
 
and
equipment,
 
goodwill
 
and
 
other
 
intangible
 
assets, are
 
not
 
considered
 
financial
 
instruments
 
and
 
are
 
not
 
included
 
above. Accordingly,
this
 
fair
 
value
 
information
 
is not
 
intended
 
to, and
 
does not,
 
represent
 
the Corporation’s
 
underlying
 
value.
 
Many of
 
these assets
 
and
liabilities that
 
are subject
 
to the
 
disclosure requirements
 
are not
 
actively traded,
 
requiring management
 
to estimate
 
fair values.
 
These
estimates
 
necessarily
 
involve
 
the
 
use
 
of
 
assumptions
 
and
 
judgment
 
about
 
a
 
wide
 
variety
 
of
 
factors,
 
including
 
but
 
not
 
limited
 
to,
relevancy of market prices of comparable instruments, expected future
 
cash flows, and appropriate discount rates.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
65
NOTE 16 – REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue Recognition
 
In accordance with
 
ASC Topic
 
606, “Revenue from
 
Contracts with Customers” (“ASC
 
Topic
 
606”), revenues are
 
recognized when
control
 
of
 
promised
 
goods
 
or
 
services
 
is
 
transferred
 
to
 
customers
 
and
 
in
 
an
 
amount
 
that
 
reflects
 
the
 
consideration
 
to
 
which
 
the
Corporation expects to be
 
entitled in exchange for those
 
goods or services. At contract
 
inception, once the contract is
 
determined to be
within the
 
scope of
 
ASC Topic
 
606, the
 
Corporation assesses
 
the goods
 
or services
 
that are
 
promised within
 
each contract,
 
identifies
the
 
respective
 
performance
 
obligations,
 
and
 
assesses
 
whether
 
each
 
promised
 
good
 
or
 
service
 
is
 
distinct.
 
The
 
Corporation
 
then
recognizes
 
as revenue
 
the amount
 
of the
 
transaction price
 
that is
 
allocated to
 
the respective
 
performance obligation
 
when (or
 
as) the
performance obligation is satisfied.
Disaggregation of Revenue
 
The
 
following
 
tables
 
summarize
 
the
 
Corporation’s
 
revenue,
 
which
 
includes
 
net
 
interest
 
income
 
on
 
financial
 
instruments
 
that
 
is
outside of
 
ASC Topic
 
606 and
 
non-interest income,
 
disaggregated by
 
type of service
 
and business
 
segment for
 
the quarters
 
and nine-
month periods ended September 30, 2025 and 2024:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter ended September 30, 2025
Mortgage
Banking
Consumer
(Retail)
Banking
Commercial
and Corporate
Treasury and
Investments
United States
Operations
Virgin Islands
Operations
Total
(In thousands)
Net interest income (loss)
(1)
$
17,636
$
147,907
$
44,076
$
(30,957)
$
22,517
$
16,737
$
217,916
Service charges and fees on deposit accounts
-
7,419
1,506
-
142
744
9,811
Insurance commission income
-
2,430
-
-
65
123
2,618
Card and processing income
-
10,347
221
-
23
1,091
11,682
Other service charges and fees
20
1,695
32
-
289
123
2,159
Not in scope of ASC Topic
 
606
 
(1)
3,395
439
139
33
479
39
4,524
 
Total non-interest income
3,415
22,330
1,898
33
998
2,120
30,794
Total Revenue (Loss)
$
21,051
$
170,237
$
45,974
$
(30,924)
$
23,515
$
18,857
$
248,710
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter ended September 30, 2024
Mortgage
Banking
Consumer
(Retail)
Banking
Commercial
and Corporate
Treasury and
Investments
United States
Operations
Virgin Islands
Operations
Total
(In thousands)
Net interest income (loss)
(1)
$
18,409
$
140,014
$
40,124
$
(31,262)
$
19,447
$
15,332
$
202,064
Service charges and fees on deposit accounts
-
7,833
949
-
149
753
9,684
Insurance commission income
-
2,824
-
-
75
104
3,003
Card and processing income
-
10,219
221
-
10
1,318
11,768
Other service charges and fees
54
1,649
173
-
698
157
2,731
Not in scope of ASC Topic
 
606
 
(1)
3,353
1,387
328
250
27
(29)
5,316
 
Total non-interest income
3,407
23,912
1,671
250
959
2,303
32,502
Total Revenue (Loss)
$
21,816
$
163,926
$
41,795
$
(31,012)
$
20,406
$
17,635
$
234,566
 
 
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
66
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine-Month Period Ended September 30, 2025
Mortgage
Banking
Consumer
(Retail)
Banking
Commercial
and Corporate
Treasury and
Investments
United States
Operations
Virgin Islands
Operations
Total
(In thousands)
Net interest income (loss)
(1)
$
52,892
$
436,824
$
128,941
$
(85,746)
$
63,748
$
49,513
$
646,172
Service charges and fees on deposit accounts
-
22,099
4,434
-
431
2,243
29,207
Insurance commission income
-
10,310
-
-
158
493
10,961
Card and processing income
-
30,172
854
-
76
3,935
35,037
Other service charges and fees
54
4,996
73
-
856
393
6,372
Not in scope of ASC Topic
 
606
 
(1)
10,441
3,310
689
203
1,193
65
15,901
 
Total non-interest income
10,495
70,887
6,050
203
2,714
7,129
97,478
Total Revenue (Loss)
$
63,387
$
507,711
$
134,991
$
(85,543)
$
66,462
$
56,642
$
743,650
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine-Month Period Ended September 30, 2024
Mortgage
Banking
Consumer
(Retail)
Banking
Commercial
and Corporate
Treasury and
Investments
United States
Operations
Virgin Islands
Operations
Total
(In thousands)
Net interest income (loss)
(1)
$
54,740
$
409,005
$
116,219
$
(83,018)
$
56,392
$
44,874
$
598,212
Service charges and fees on deposit accounts
-
23,117
3,228
-
452
2,274
29,071
Insurance commission income
-
10,621
-
-
161
514
11,296
Card and processing income
-
29,706
671
-
119
4,107
34,603
Other service charges and fees
153
5,218
514
-
1,932
451
8,268
Not in scope of ASC Topic
 
606
 
(1)
9,981
4,103
659
483
47
12
15,285
 
Total non-interest income
10,134
72,765
5,072
483
2,711
7,358
98,523
Total Revenue (Loss)
$
64,874
$
481,770
$
121,291
$
(82,535)
$
59,103
$
52,232
$
696,735
(1)
Most of the Corporation’s revenue is not within the scope of ASC Topic 606. The guidance explicitly excludes net interest income from financial assets and liabilities, as well as other non-interest income from loans,
leases, investment securities and derivative financial instruments.
For the
 
quarters and
 
nine-month periods
 
ended September
 
30, 2025
 
and 2024,
 
most of
 
the Corporation’s
 
revenue within
 
the scope
of ASC Topic 606 was related
 
to performance obligations satisfied at a point in time.
See
 
Note
 
24
 
–
 
“Revenue
 
from
 
Contracts
 
with
 
Customers,”
 
to
 
the
 
audited
 
consolidated
 
financial
 
statements
 
included
 
in
 
the
 
2024
Annual Report on Form 10-K for a discussion of major revenue streams under
 
the scope of ASC Topic 606.
 
Contract Balances
As of
 
September
 
30,
 
2025 and
 
December
 
31,
 
2024,
 
the
 
Corporation
 
had
no
 
contract
 
assets recorded
 
in its
 
consolidated
 
financial
statements. In addition, the balances of contract liabilities as of those
 
dates were not significant.
Other
 
The Corporation
 
also did
 
not have
 
any material contract
 
acquisition costs
 
and did
 
not make
 
any significant
 
judgments or
 
estimates
in recognizing revenue for financial reporting purposes.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
67
NOTE 17 – SEGMENT INFORMATION
The Corporation’s
 
operating segments
 
are based
 
primarily on
 
the Corporation’s
 
lines of
 
business for
 
its operations
 
in Puerto
 
Rico,
the Corporation’s
 
principal market,
 
and by
 
geographic areas
 
for its
 
operations outside
 
of Puerto
 
Rico. As
 
of September
 
30, 2025,
 
the
Corporation
 
had
six
 
reportable
 
segments:
 
Mortgage
 
Banking;
 
Consumer
 
(Retail)
 
Banking;
 
Commercial
 
and
 
Corporate
 
Banking;
Treasury and
 
Investments; United States Operations;
 
and Virgin
 
Islands Operations. The Chief
 
Executive Officer (“CEO”),
 
who is the
designated
 
chief
 
operating
 
decision
 
maker
 
(“CODM”),
 
as
 
ultimate
 
decision
 
maker,
 
evaluates
 
performance
 
and
 
allocates
 
resources
based
 
on financial
 
information
 
provided
 
by management.
 
In determining
 
the reportable
 
segments,
 
the
 
Corporation
 
considers
 
factors
such as
 
the organizational
 
structure, nature
 
of the
 
products,
 
distribution
 
channels, customer
 
relationship
 
management,
 
and economic
characteristics
 
of
 
the
 
business
 
lines.
 
The
 
Corporation
 
evaluates
 
the
 
performance
 
of
 
the
 
segments
 
based
 
on
 
segment
 
income
 
or
 
loss,
which consists of
 
net interest income,
 
the provision for
 
credit losses, non-interest
 
income and
 
non-interest expenses.
 
Segment income
or
 
loss
 
is
 
measured
 
on
 
a
 
pre-tax
 
basis,
 
consistent
 
with
 
the
 
Corporation’s
 
consolidated
 
financial
 
statements
 
under
 
GAAP.
 
The
 
total
segment income or loss equals
 
consolidated pre-tax income or
 
loss, and no adjustments or
 
reconciliations are necessary.
 
The segments
are also
 
evaluated based
 
on the
 
average volume
 
of their
 
interest-earning assets
 
(net of
 
fair value
 
adjustments of
 
investment securities
and the ACL).
The
 
Mortgage
 
Banking
 
segment
 
consists
 
of
 
the
 
origination,
 
sale,
 
and
 
servicing
 
of
 
a
 
variety
 
of
 
residential
 
mortgage
 
loans.
 
The
Mortgage
 
Banking
 
segment
 
also
 
acquires
 
and
 
sells
 
mortgages
 
in
 
the
 
secondary
 
market.
 
The
 
Consumer
 
(Retail)
 
Banking
 
segment
includes the
 
Corporation’s
 
consumer lending,
 
commercial lending
 
to small
 
businesses, commercial
 
transaction banking,
 
and deposit-
taking activities
 
primarily conducted
 
through its
 
branch network
 
and loan
 
centers. The
 
Commercial and
 
Corporate Banking
 
segment
consists of the
 
Corporation’s
 
lending and other
 
services for large
 
customers represented
 
by specialized and
 
middle-market clients and
the government sector.
 
The Commercial and Corporate Banking segment
 
consists of the Corporation’s
 
commercial lending (other than
small
 
business
 
commercial
 
loans)
 
and
 
commercial
 
deposit-taking
 
activities
 
(other
 
than
 
the
 
government
 
sector).
 
The
 
Treasury
 
and
Investments segment
 
is responsible for
 
the Corporation’s
 
investment portfolio
 
and treasury functions
 
that are executed
 
to manage and
enhance
 
liquidity.
 
Under
 
the
 
Corporation’s
 
fund
 
transfer
 
pricing
 
(“FTP”)
 
methodology,
 
the
 
Treasury
 
and
 
Investments
 
segment
centrally
 
manages
 
funding
 
by
 
providing
 
funds
 
to
 
the
 
Mortgage
 
Banking,
 
Consumer
 
(Retail)
 
Banking,
 
Commercial
 
and
 
Corporate
Banking, United States
 
Operations, and Virgin
 
Islands Operations segments
 
to support their lending
 
activities and compensating
 
these
units
 
for
 
deposits
 
gathered.
 
The
 
mismatch
 
between
 
funds
 
provided
 
and
 
funds
 
used
 
is
 
managed
 
by
 
the
 
Treasury
 
and
 
Investments
segment.
 
The
 
funds
 
transfer
 
pricing
 
charged
 
or
 
credited
 
are
 
calculated
 
using
 
the
 
SOFR/swap
 
curve
 
with
 
term
 
rates,
 
adjusted
 
for
 
a
funding
 
spread
 
that
 
reflects
 
the
 
Corporation’s
 
cost
 
of
 
funds.
 
The
 
methodology,
 
which
 
is
 
performed
 
based
 
on
 
matched
 
maturity
funding,
 
ensures a
 
market-based
 
allocation of
 
funding costs
 
and credits,
 
impacting segment
 
profitability
 
by aligning
 
internal pricing
with external market conditions. The United States Operations segment
 
consists of all banking activities conducted by FirstBank in the
United States
 
mainland, including
 
commercial and
 
consumer banking
 
services. The
 
Virgin
 
Islands Operations
 
segment consists of
 
all
banking activities conducted by the Corporation in the USVI and the
 
BVI, including commercial and consumer banking services.
Prior period segment results
 
have been recast to
 
reflect certain refinements made
 
to enhance internal reporting
 
described in Note 25
– “Segment
 
Information”
 
to the
 
audited consolidated
 
financial statements
 
included
 
in the
 
2024 Annual
 
Report on
 
Form 10-K.
 
Also,
see Note
 
1 –
 
“Nature of
 
Business and
 
Summary of
 
Significant Accounting
 
Policies” to
 
the audited
 
consolidated financial
 
statements
included in the 2024
 
Annual Report on Form
 
10-K for the accounting
 
policies of the segments and
 
information related to the
 
adoption
of ASU 2023-07.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
68
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following tables present information about the reportable segments for
 
the indicated periods:
Mortgage
Banking
Consumer
(Retail) Banking
Commercial and
Corporate
Banking
Treasury and
Investments
United States
Operations
Virgin Islands
Operations
Total
(In thousands)
Quarter ended September 30, 2025:
Interest income
$
32,512
$
105,915
$
63,299
$
31,977
$
40,946
$
8,094
$
282,743
Net (charge) credit for transfer of funds
(14,876)
80,087
(15,485)
(58,473)
(1,840)
10,587
-
Interest expense
-
(38,095)
(3,738)
(4,461)
(16,589)
(1,944)
(64,827)
Net interest income (loss)
17,636
147,907
44,076
(30,957)
22,517
16,737
217,916
Provision for credit losses - (benefit) expense
(2,037)
18,280
728
146
41
435
17,593
Non-interest income
 
3,415
22,330
1,898
33
998
2,120
30,794
Non-interest expenses:
 
Employees’ compensation and benefits
6,659
35,865
4,647
1,035
7,039
4,516
59,761
 
Occupancy and equipment
1,434
14,923
1,457
176
1,840
2,355
22,185
 
Business promotion
227
2,765
252
172
276
192
3,884
 
Professional fees
1,636
6,698
927
319
1,151
1,172
11,903
 
Taxes, other than income taxes
481
4,573
653
112
105
168
6,092
 
FDIC deposit insurance
414
760
680
-
240
142
2,236
 
Net (gain) loss on OREO operations
(1,406)
-
(492)
-
-
2,931
1,033
 
Credit and debit card processing expenses
-
6,971
217
-
3
698
7,889
 
Other non-interest expenses
(1)
851
6,621
558
273
717
891
9,911
 
Total non-interest expenses
10,296
79,176
8,899
2,087
11,371
13,065
124,894
 
Segment income (loss)
$
12,792
$
72,781
$
36,347
$
(33,157)
$
12,103
$
5,357
$
106,223
Average interest-earning assets
$
2,172,385
$
4,019,262
$
3,639,505
$
5,361,692
$
2,584,121
$
462,264
$
18,239,229
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage
Banking
Consumer
(Retail) Banking
Commercial and
Corporate
Banking
Treasury and
Investments
United States
Operations
Virgin Islands
Operations
Total
(In thousands)
Quarter ended September 30, 2024:
Interest income
$
32,200
$
106,864
$
63,476
$
28,099
$
37,049
$
6,987
$
274,675
Net (charge) credit for transfer of funds
(13,791)
73,064
(19,519)
(48,315)
(2,187)
10,748
-
Interest expense
-
(39,914)
(3,833)
(11,046)
(15,415)
(2,403)
(72,611)
Net interest income (loss)
18,409
140,014
40,124
(31,262)
19,447
15,332
202,064
Provision for credit losses - (benefit) expense
 
(5,175)
28,514
(6,842)
(36)
(1,010)
(206)
15,245
Non-interest income
3,407
23,912
1,671
250
959
2,303
32,502
Non-interest expenses:
 
Employees’ compensation and benefits
6,734
34,806
4,879
926
7,204
4,532
59,081
 
Occupancy and equipment
1,501
15,049
1,457
193
1,913
2,311
22,424
 
Business promotion
307
2,904
256
165
258
226
4,116
 
Professional fees
1,600
7,190
1,112
303
1,192
1,141
12,538
 
Taxes, other than income taxes
454
4,244
578
109
120
160
5,665
 
FDIC deposit insurance
405
756
647
-
208
148
2,164
 
Net (gain) loss on OREO operations
(1,350)
-
(88)
-
(6)
105
(1,339)
 
Credit and debit card processing expenses
-
6,111
180
-
2
802
7,095
 
Other non-interest expenses
(1)
715
6,881
1,468
584
703
840
11,191
 
Total non-interest expenses
10,366
77,941
10,489
2,280
11,594
10,265
122,935
 
Segment income (loss)
$
16,625
$
57,471
$
38,148
$
(33,256)
$
9,822
$
7,576
$
96,386
Average interest-earning assets
$
2,134,706
$
4,064,048
$
3,487,762
$
5,790,707
$
2,172,677
$
386,687
$
18,036,587
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
69
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following tables present information about the reportable segments for
 
the indicated periods:
Mortgage
Banking
Consumer
(Retail) Banking
Commercial and
Corporate
Banking
Treasury and
Investments
United States
Operations
Virgin Islands
Operations
Total
(In thousands)
Nine-Month Period Ended September 30, 2025
Interest income
$
96,906
$
316,911
$
186,590
$
97,760
$
116,503
$
23,328
$
837,998
Net (charge) credit for transfer of funds
(44,014)
234,334
(46,524)
(170,370)
(5,381)
31,955
-
Interest expense
-
(114,421)
(11,125)
(13,136)
(47,374)
(5,770)
(191,826)
Net interest income (loss)
52,892
436,824
128,941
(85,746)
63,748
49,513
646,172
Provision for credit losses - (benefit) expense
(1,010)
55,503
4,083
138
2,905
1,371
62,990
Non-interest income
10,495
70,887
6,050
203
2,714
7,129
97,478
Non-interest expenses:
 
Employees’ compensation and benefits
20,393
107,889
15,403
3,202
21,306
13,763
181,956
 
Occupancy and equipment
4,447
44,886
4,591
529
5,651
7,008
67,112
 
Business promotion
696
7,487
686
522
778
488
10,657
 
Professional fees
4,668
19,564
2,966
1,028
3,185
3,587
34,998
 
Taxes, other than income taxes
1,398
13,260
1,834
344
326
520
17,682
 
FDIC deposit insurance
1,246
2,308
2,021
-
714
418
6,707
 
Net (gain) loss on OREO operations
(3,342)
-
(311)
-
-
2,966
(687)
 
Credit and debit processing expenses
-
17,818
691
-
8
2,229
20,746
 
Other non-interest expenses
(1)
2,612
19,677
3,336
1,558
2,159
2,740
32,082
 
Total non-interest expenses
32,118
232,889
31,217
7,183
34,127
33,719
371,253
 
Segment income (loss)
$
32,279
$
219,319
$
99,691
$
(92,864)
$
29,430
$
21,552
$
309,407
Average interest-earning assets
$
2,164,489
$
4,031,285
$
3,589,066
$
5,575,455
$
2,465,975
$
448,643
$
18,274,913
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage
Banking
Consumer
(Retail) Banking
Commercial and
Corporate
Banking
Treasury and
Investments
United States
Operations
Virgin Islands
Operations
Total
(In thousands)
Nine-Month Period Ended September 30, 2024
Interest income
$
95,351
$
316,764
$
188,275
$
85,069
$
108,227
$
21,739
$
815,425
Net (charge) credit for transfer of funds
(40,611)
209,584
(60,211)
(131,980)
(6,900)
30,118
-
Interest expense
-
(117,343)
(11,845)
(36,107)
(44,935)
(6,983)
(217,213)
Net interest income (loss)
54,740
409,005
116,219
(83,018)
56,392
44,874
598,212
Provision for credit losses - (benefit) expense
(15,273)
70,976
(11,852)
(45)
(4,452)
(337)
39,017
Non-interest income
10,134
72,765
5,072
483
2,711
7,358
98,523
Non-interest expenses:
 
Employees’ compensation and benefits
20,096
103,682
14,509
2,766
21,492
13,498
176,043
 
Occupancy and equipment
4,375
43,920
4,241
571
5,817
6,732
65,656
 
Business promotion
943
8,693
772
568
769
572
12,317
 
Professional fees
5,890
21,070
3,040
991
3,319
3,335
37,645
 
Taxes, other than income taxes
1,323
12,203
1,489
307
388
492
16,202
 
FDIC deposit insurance
1,413
2,636
2,257
-
741
535
7,582
 
Net (gain) loss on OREO operations
(4,376)
-
(2,247)
-
(4)
227
(6,400)
 
Credit and debit processing expenses
-
17,479
582
-
7
2,385
20,453
 
Other non-interest expenses
(1)
2,204
19,930
4,486
1,774
1,998
2,650
33,042
 
Total non-interest expenses
31,868
229,613
29,129
6,977
34,527
30,426
362,540
 
Segment income (loss)
$
48,279
$
181,181
$
104,014
$
(89,467)
$
29,028
$
22,143
$
295,178
Average interest-earning assets
$
2,129,905
$
4,026,020
$
3,496,657
$
5,844,331
$
2,126,742
$
406,252
$
18,029,907
(1) Consists of communication expenses and the expense categories described
 
in Note 19 - “Other Non-Interest Expenses,” to the audited consolidated
 
financial statements included in the 2024 Annual Report on Form 10-K.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following table presents a reconciliation of the reportable segment financial information to the consolidated totals for the indicated periods:
Quarter Ended September 30,
Nine-Month Period Ended September 30,
2025
2024
2025
2024
(In thousands)
Average assets:
Total average interest-earning assets for segments
 
$
18,239,229
$
18,036,587
$
18,274,913
$
18,029,907
Average non-interest-earning assets
(1)
 
789,563
846,787
783,834
845,490
 
Total consolidated average assets
$
19,028,792
$
18,883,374
$
19,058,747
$
18,875,397
(1)
Includes,
 
among
 
other
 
things,
 
non-interest-earning
 
cash,
 
premises
 
and
 
equipment,
 
net
 
deferred
 
tax
 
asset,
 
right-of-use
 
(“ROU”)
 
assets,
 
and
 
accrued
 
interest
 
receivable
 
on
 
loans
 
and
investments.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
70
NOTE 18 – SUPPLEMENTAL
 
STATEMENTS
 
OF CASH FLOWS INFORMATION
 
Supplemental statements of cash flows information is as follows for
 
the indicated periods:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine-Month Period Ended September 30,
2025
2024
(In thousands)
Cash paid for:
 
Interest
 
$
189,966
$
206,895
 
Income tax
 
49,445
68,322
 
Operating cash flow from operating leases
13,297
12,994
Non-cash investing and financing activities:
 
Additions to OREO
3,583
7,635
 
Additions to auto and other repossessed assets
46,100
45,266
 
Capitalization of servicing assets
1,904
1,632
 
Loan securitizations
118,128
85,893
 
Loans held for investment transferred to held for sale
-
118
 
Loans held for sale transferred to held for investment
99
-
 
Payable related to unsettled purchases of investment securities
72,394
-
 
ROU assets obtained in exchange for operating lease liabilities, net of lease
 
terminations
4,484
8,943
Redemption of investments in FBP Statutory Trusts NOTE 19 – REGULATORY MATTERS, COMMITMENTS AND CONTINGENCIES
1,850
1,500
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
71
Regulatory Matters
The
 
Corporation
 
and
 
FirstBank
 
are
 
each
 
subject
 
to
 
various
 
regulatory
 
capital
 
requirements
 
imposed
 
by
 
the
 
U.S.
 
federal
 
banking
agencies. Failure
 
to meet
 
minimum capital
 
requirements can
 
result in
 
certain mandatory
 
and possibly
 
additional discretionary
 
actions
by regulators
 
that, if
 
undertaken, could
 
have a
 
direct material
 
adverse effect
 
on the
 
Corporation’s
 
financial statements
 
and
 
activities.
Under
 
capital
 
adequacy
 
guidelines
 
and
 
the
 
regulatory
 
framework
 
for
 
prompt
 
corrective
 
action,
 
the
 
Corporation
 
must
 
meet
 
specific
capital
 
guidelines
 
that
 
involve
 
quantitative
 
measures
 
of
 
the Corporation’s
 
and
 
FirstBank’s
 
assets,
 
liabilities,
 
and
 
certain
 
off-balance
sheet items
 
as calculated
 
under regulatory
 
accounting practices.
 
The Corporation’s
 
capital amounts
 
and classification
 
are also
 
subject
to qualitative judgments and
 
adjustment by the regulators with respect
 
to minimum capital requirements, components,
 
risk weightings,
and
 
other
 
factors.
 
As
 
of
 
September
 
30,
 
2025
 
and
 
December
 
31,
 
2024,
 
the
 
Corporation
 
and
 
FirstBank
 
exceeded
 
the
 
minimum
regulatory capital ratios
 
for capital adequacy purposes
 
and FirstBank exceeded the
 
minimum regulatory capital
 
ratios to be considered
a
 
well-capitalized
 
institution
 
under
 
the regulatory
 
framework
 
for
 
prompt
 
corrective
 
action.
 
As of
 
September
 
30,
 
2025,
 
management
does not believe that any condition has changed or event has occurred that would
 
have changed the institution’s status.
The Corporation and FirstBank
 
compute risk-weighted assets
 
using the standardized
 
approach required by the
 
U.S. Basel III capital
rules (“Basel III rules”).
The
 
Basel
 
III
 
rules
 
require
 
the
 
Corporation
 
to
 
maintain
 
an
 
additional
 
capital
 
conservation
 
buffer
 
of
2.5
%
 
on
 
certain
 
regulatory
capital
 
ratios
 
to
 
avoid
 
limitations
 
on
 
both
 
(i)
 
capital
 
distributions
 
(
e.g.
,
 
repurchases
 
of
 
capital
 
instruments,
 
dividends
 
and
 
interest
payments on capital instruments) and (ii) discretionary bonus payments
 
to executive officers and heads of major business lines.
The regulatory capital position of the Corporation and FirstBank as of
 
September 30, 2025 and December 31, 2024 were as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Regulatory Requirements
Actual
For Capital Adequacy Purposes
To be Well
 
-Capitalized
Thresholds
 
Amount
Ratio
Amount
Ratio
Amount
Ratio
(Dollars in thousands)
As of September 30, 2025
Total Capital (to Risk-Weighted
 
Assets)
 
First BanCorp.
$
2,399,420
17.93
%
$
1,070,714
8.0
%
N/A
N/A
 
FirstBank
$
2,338,242
17.48
%
$
1,069,894
8.0
%
$
1,337,367
10.0
%
CET1 Capital (to Risk-Weighted Assets)
 
First BanCorp.
$
2,231,390
16.67
%
$
602,277
4.5
%
N/A
N/A
 
FirstBank
$
2,070,339
15.48
%
$
601,815
4.5
%
$
869,289
6.5
%
Tier I Capital (to Risk-Weighted
 
Assets)
 
First BanCorp.
$
2,231,390
16.67
%
$
803,035
6.0
%
N/A
N/A
 
FirstBank
$
2,170,339
16.23
%
$
802,420
6.0
%
$
1,069,894
8.0
%
Leverage ratio
 
First BanCorp.
$
2,231,390
11.52
%
$
774,943
4.0
%
N/A
N/A
 
FirstBank
$
2,170,339
11.20
%
$
775,251
4.0
%
$
969,064
5.0
%
As of December 31, 2024
(1)
Total Capital (to Risk-Weighted
 
Assets)
 
First BanCorp.
$
2,404,581
18.02
%
$
1,067,380
8.0
%
N/A
N/A
 
FirstBank
$
2,369,441
17.76
%
$
1,067,033
8.0
%
$
1,333,791
10.0
%
CET1 Capital (to Risk-Weighted Assets)
 
First BanCorp.
$
2,177,748
16.32
%
$
600,401
4.5
%
N/A
N/A
%
 
FirstBank
$
2,102,512
15.76
%
$
600,206
4.5
%
$
866,964
6.5
%
Tier I Capital (to Risk-Weighted
 
Assets)
 
First BanCorp.
$
2,177,748
16.32
%
$
800,535
6.0
%
N/A
N/A
 
FirstBank
$
2,202,512
16.51
%
$
800,275
6.0
%
$
1,067,033
8.0
%
Leverage ratio
 
First BanCorp.
$
2,177,748
11.07
%
$
786,937
4.0
%
N/A
N/A
 
FirstBank
$
2,202,512
11.20
%
$
786,712
4.0
%
$
983,390
5.0
%
(1)
As of December 31, 2024, capital
 
ratios reflect the delay in the full
 
effect of CECL.
 
The Corporation elected the option provided by
 
the interim final rule issued by
 
the federal banking agencies on March 31,
 
2020, in response to the impact of
COVID-19,
 
to temporarily delay the effects of CECL on regulatory capital during a five-year transition period which ended on January 1, 2025.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
72
Commitments
 
The Corporation enters
 
into financial instruments
 
with off-balance sheet
 
risk in the normal
 
course of business to
 
meet the financing
needs
 
of
 
its
 
customers.
 
These
 
financial
 
instruments
 
may
 
include
 
commitments
 
to
 
extend
 
credit
 
and
 
standby
 
letters
 
of
 
credit.
Commitments to extend credit are agreements
 
to lend to a customer as long
 
as there is no violation of any conditions
 
established in the
contract. Commitments
 
generally have fixed
 
expiration dates or
 
other termination clauses.
 
Since certain commitments
 
are expected
 
to
expire without
 
being drawn
 
upon, the
 
total commitment
 
amount does
 
not necessarily
 
represent future
 
cash requirements.
 
For most
 
of
the
 
commercial
 
lines
 
of
 
credit,
 
the
 
Corporation
 
has
 
the
 
option
 
to
 
reevaluate
 
the
 
agreement
 
prior
 
to
 
additional
 
disbursements.
 
In
 
the
case of credit cards and personal lines of credit, the Corporation can
 
cancel the unused credit facility at any time and without cause.
 
As
of September
 
30, 2025,
 
commitments to
 
extend credit
 
amounted to
 
approximately $
2.1
 
billion, of
 
which $
0.8
 
billion relates
 
to retail
credit card loans.
 
In addition, commercial
 
and financial standby
 
letters of credit
 
as of September
 
30, 2025 amounted
 
to approximately
$
78.0
 
million.
Contingencies
As of
 
September 30,
 
2025, First
 
BanCorp. and
 
its subsidiaries
 
were defendants
 
in various
 
legal proceedings,
 
claims and
 
other loss
contingencies
 
arising
 
in
 
the
 
ordinary
 
course
 
of
 
business.
 
On
 
at
 
least
 
a
 
quarterly
 
basis,
 
the
 
Corporation
 
assesses
 
its
 
liabilities
 
and
contingencies in connection
 
with threatened and
 
outstanding legal proceedings,
 
claims and other
 
loss contingencies utilizing
 
the latest
information
 
available,
 
advice
 
from
 
legal
 
counsel,
 
and
 
available
 
insurance
 
coverage.
 
For
 
legal
 
proceedings,
 
claims
 
and
 
other
 
loss
contingencies
 
where
 
it
 
is
 
both
 
probable
 
that
 
the
 
Corporation
 
will
 
incur
 
a
 
loss
 
and
 
the
 
amount
 
can
 
be
 
reasonably
 
estimated,
 
the
Corporation
 
establishes
 
an
 
accrual
 
for
 
the
 
loss.
 
Once
 
established,
 
the
 
accrual
 
is
 
adjusted
 
as
 
appropriate
 
to
 
reflect
 
any
 
relevant
developments. For legal proceedings,
 
claims and other loss contingencies where
 
a loss is not probable or the amount
 
of the loss cannot
be estimated, no accrual is established.
Any estimate involves significant judgment,
 
given the complexity of the facts, the
 
novelty of the legal theories, the varying
 
stages of
the
 
proceedings
 
(including
 
the
 
fact
 
that
 
some
 
of
 
them
 
are
 
currently
 
in
 
preliminary
 
stages),
 
the
 
existence
 
in
 
some
 
of
 
the
 
current
proceedings
 
of
 
multiple
 
defendants
 
whose
 
share
 
of
 
liability
 
has
 
yet
 
to
 
be
 
determined,
 
the
 
numerous
 
unresolved
 
issues
 
in
 
the
proceedings, and
 
the inherent
 
uncertainty of
 
the various
 
potential outcomes
 
of such
 
proceedings. Accordingly,
 
it may
 
take months
 
or
years after the filing of
 
a case or commencement of
 
a proceeding or an investigation
 
before an estimate of the
 
reasonably possible loss
can
 
be
 
made
 
and
 
the
 
Corporation’s
 
estimate
 
will change
 
from
 
time
 
to
 
time,
 
and
 
actual
 
losses may
 
be
 
more
 
or less
 
than
 
the
 
current
estimate.
While
 
the
 
final
 
outcome
 
of
 
legal
 
proceedings,
 
claims,
 
and
 
other
 
loss
 
contingencies
 
is
 
inherently
 
uncertain,
 
based
 
on
 
information
currently
 
available,
 
management
 
believes
 
that
 
the
 
final
 
disposition
 
of
 
the
 
Corporation’s
 
legal
 
proceedings,
 
claims
 
and
 
other
 
loss
contingencies,
 
to
 
the
 
extent
 
not
 
previously
 
provided
 
for,
 
will
 
not
 
have
 
a
 
material
 
adverse
 
effect
 
on
 
the
 
Corporation’s
 
consolidated
financial position as a whole.
If management believes that, based on available information,
 
it is at least reasonably possible that a material loss (or material
 
loss in
excess
 
of
 
any
 
accrual)
 
will
 
be
 
incurred
 
in
 
connection
 
with
 
any
 
legal
 
contingencies,
 
including
 
tax
 
contingencies,
 
the
 
Corporation
discloses an
 
estimate of
 
the possible
 
loss or
 
range of
 
loss, either
 
individually or
 
in the
 
aggregate, as
 
appropriate, if
 
such an
 
estimate
can be made, or discloses that an estimate cannot be made.
FirstBank
 
is
 
involved
 
in
 
ongoing
 
litigation
 
in
 
the
 
U.S.
 
Virgin
 
Islands
 
regarding
 
its
 
leasehold
 
interests
 
in
 
a
 
commercial
 
property
located in such region, which served
 
as collateral for a commercial construction
 
loan originated in 2005. The property was constructed
on land
 
subject to
 
a ground
 
lease between
 
the borrower/lessee,
 
and
 
the lessor,
 
a third
 
party (“defendant”).
 
Upon borrower’s
 
default,
FirstBank received
 
the lease
 
rights in
 
lieu of
 
foreclosure of
 
the property,
 
recorded it
 
as OREO,
 
and took
 
possession of
 
the property.
After
 
acquiring
 
the
 
lease
 
rights
 
and
 
obtaining
 
possession
 
of
 
the
 
property,
 
the
 
parties
 
became
 
involved
 
in
 
litigation
 
over
 
a
 
certain
disputed
 
undeveloped
 
parcel of
 
land
 
and FirstBank
 
filed a
 
declaratory
 
judgment for
 
the U.S.
 
Virgin
 
Islands Courts
 
to decide
 
on the
matter. The defendant
 
further claimed that FirstBank breached
 
the ground lease by not paying
 
for this undeveloped parcel and
 
claimed
damages
 
including
 
an
 
award
 
of
 
possession
 
of
 
the
 
property
 
for
 
failure
 
to
 
cure
 
the
 
borrower’s
 
defaults.
 
Since
 
2014,
 
the
 
Bank
 
has
deposited rent payments
 
for the other parcels
 
into escrow,
 
pursuant to Virgin
 
Islands law,
 
which permits the
 
escrowing of rent
 
when a
landlord interferes
 
with the
 
permitted use
 
and enjoyment
 
of the
 
property.
 
The escrowed
 
amounts did
 
not include
 
interest or
 
late fees,
as FirstBank
 
believes it
 
has complied
 
with Virgin
 
Islands law
 
and
 
contends that
 
such charges
 
are not
 
due
 
when rent
 
is escrowed
 
in
accordance with
 
applicable law.
 
After multiple
 
legal proceedings,
 
on August
 
29, 2025,
 
the Supreme
 
Court of
 
the Virgin
 
Islands held
that
 
the
 
undeveloped
 
parcel
 
was
 
never
 
legally
 
added
 
to
 
the
 
lease,
 
invalidating
 
defendant’s
 
previous
 
claims
 
for
 
rent
 
and
 
possession
related to that parcel. Although the Courts ruled in favor of FirstBank’s declaratory judgment, the Courts affirmed defendant’s claim possession of the parcels continues with FirstBank.
for
 
possession
 
and
 
damages
 
regarding
 
the
 
other
 
parcels
 
under
 
the
 
lease.
 
On
 
September
 
12,
 
2025,
 
FirstBank
 
filed
 
a
 
petition
 
for
rehearing
 
before
 
the
 
Supreme Court
 
of
 
the
 
Virgin
 
Islands.
 
FirstBank
 
maintains
 
that
 
all eviction
 
orders
 
remain
 
stayed and
 
that
 
legal
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
73
Given the probable loss of the book value of these assets, FirstBank recorded a full
valuation allowance of $
2.8
 
million in its OREO
 
balance. In addition, Management
 
has established a reserve
 
of $
1.9
 
million primarily
related to escrowed payments and disputes over the applicability of interest and
 
late fees on escrowed payments. The ultimate outcome
of this litigation remains uncertain and may differ from management’s
 
current estimates.
In 2023,
 
the FDIC
 
issued a
 
final rule
 
to impose
 
a special
 
assessment to
 
recover
 
certain estimated
 
losses to
 
the Deposit
 
Insurance
Fund (“DIF”)
 
arising from
 
the closures
 
of Silicon
 
Valley
 
Bank and
 
Signature Bank.
 
The estimated
 
losses will
 
be recovered
 
through
quarterly
 
special assessments
 
collected from
 
certain insured
 
depository
 
institutions, including
 
the Bank,
 
and collection
 
began
 
during
the quarter
 
ended June
 
30, 2024.
 
As of
 
September 30,
 
2025, the
 
Corporation’s
 
total estimated
 
FDIC special
 
assessment amounted
 
to
$
7.4
 
million, of which
 
$
4.7
 
million has been
 
paid. The Corporation
 
continues to monitor
 
the FDIC’s
 
estimated loss to
 
the DIF,
 
which
could affect the amount of its accrued liability.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
74
NOTE 20 – FIRST BANCORP.
 
(HOLDING COMPANY
 
ONLY) FINANCIAL
 
INFORMATION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following condensed
 
financial information presents
 
the financial position
 
of First BanCorp.
 
at the holding
 
company level only
as
 
of
 
September
 
30,
 
2025
 
and
 
December
 
31,
 
2024,
 
and
 
the
 
results
 
of
 
its
 
operations
 
for
 
the
 
quarters
 
and
 
nine-month
 
periods
 
ended
September 30, 2025 and 2024:
Statements of Financial Condition
As of September 30,
As of December 31,
2025
2024
(In thousands)
Assets
Cash and due from banks (includes $
29,442
 
due from FirstBank as of September 30, 2025
and $
12,555
 
as of December 31, 2024)
$
30,189
$
13,295
Equity securities
1,950
1,275
Investment in FirstBank, at equity
1,844,434
1,694,000
Investment in FirstBank Insurance Agency, at equity
30,032
24,121
Investment in FBP Statutory Trust I
(1)
-
1,289
Investment in FBP Statutory Trust II
(1)
-
561
Dividends receivable
-
619
Other assets
(2)
16,097
459
Total assets
$
1,922,702
$
1,735,619
Liabilities and Stockholders’ Equity
Liabilities:
Long-term borrowings
(1)
$
-
$
61,700
Accounts payable and other liabilities
4,657
4,683
Total liabilities
4,657
66,383
Stockholders’ equity
1,918,045
1,669,236
Total liabilities and stockholders’ equity
$
1,922,702
$
1,735,619
(1)
During the first half of 2025,
 
the Corporation redeemed the
 
remaining $
61.7
 
million of the outstanding TruPS
 
issued by FBP Statutory Trusts
 
I and II (or $
59.8
 
million after excluding the
Corporation’s interest in the Trusts
 
of approximately $
1.9
 
million), as further explained in Note 6 – “Non-Consolidated
 
Variable Interest
 
Entities (“VIEs”) and Servicing Assets.”
(2)
As of
 
September 30,
 
2025, the
 
balance
 
primarily consists
 
of deferred
 
tax assets
 
associated with
 
NOL carryforwards,
 
which the
 
Corporation expects
 
to realize
 
under the
 
new election
established by Act 65-2025.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
75
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Income
 
Quarter Ended
 
Nine-Month Period Ended
September 30,
September 30,
2025
2024
2025
2024
(In thousands)
Income
 
 
Interest income on interest-bearing cash balances
 
due from FirstBank
$
914
$
49
$
1,101
$
199
 
Dividend income from banking subsidiaries
79,279
78,704
269,174
240,853
 
Other income
-
97
36
298
 
Total income
80,193
78,850
270,311
241,350
Expense
 
Interest expense on long-term borrowings
-
3,235
1,156
9,921
 
Other non-interest expenses
407
398
1,348
1,300
 
Total expense
407
3,633
2,504
11,221
Income before income taxes and equity in undistributed
 
earnings of subsidiaries
79,786
75,217
267,807
230,129
Income tax (benefit) expense
(1)
(15,592)
-
(15,591)
1
Equity in undistributed earnings of subsidiaries
 
(distributions in excess of earnings)
5,148
(1,490)
(25,633)
(7,105)
Net income
$
100,526
$
73,727
$
257,765
$
223,023
Other comprehensive income, net of tax
48,834
160,054
174,100
155,549
Comprehensive income
$
149,360
$
233,781
$
431,865
$
378,572
(1) During
 
the quarter
 
and nine-month
 
period ended
 
September 30,
 
2025, includes
 
a one-time
 
reversal of
 
approximately
 
$
15.8
million in valuation allowance related to deferred tax assets “Corporation,” “we,” “us,” “our,” or “First BanCorp.”) and should be read in conjunction with such financial statements and the notes
associated with NOL carryforwards.
 
 
76
ITEM
 
2.
 
MANAGEMENT’S
 
DISCUSSION
 
AND
 
ANALYSIS
 
OF
 
FINANCIAL
 
CONDITION
 
AND
 
RESULTS
 
OF
OPERATIONS (“MD&A”)
The
 
following
 
MD&A
 
relates
 
to
 
the
 
accompanying
 
unaudited
 
consolidated
 
financial
 
statements
 
of
 
First
 
BanCorp.
 
(the
thereto,
 
and our
 
Annual Report
 
on Form
 
10-K for
 
the fiscal
 
year ended
 
December 31,
 
2024 (the
 
“2024 Annual
 
Report on
 
Form 10-
K”). This section
 
also presents certain
 
financial measures that
 
are not based
 
on generally accepted
 
accounting principles in
 
the United
States
 
of
 
America
 
(“GAAP”).
 
See
 
“Non-GAAP
 
Financial
 
Measures
 
and
 
Reconciliations”
 
below
 
for
 
information
 
about
 
why
 
non-
GAAP
 
financial
 
measures
 
are
 
presented,
 
reconciliations
 
of
 
non-GAAP
 
financial
 
measures
 
to
 
the
 
most
 
comparable
 
GAAP
 
financial
measures, and references to non-GAAP financial measures reconciliations
 
presented in other sections.
EXECUTIVE SUMMARY
First BanCorp. is
 
a diversified financial
 
holding company headquartered
 
in San Juan, Puerto
 
Rico, offering a
 
full range of financial
products to
 
consumers and
 
commercial customers
 
through various
 
subsidiaries. First
 
BanCorp.
 
is the
 
holding company
 
of FirstBank
Puerto
 
Rico
 
(“FirstBank”
 
or the
 
“Bank”)
 
and
 
FirstBank
 
Insurance
 
Agency.
 
Through
 
its wholly
 
-owned
 
subsidiaries,
 
the Corporation
operates
 
in
 
Puerto
 
Rico,
 
the
 
United
 
States
 
Virgin
 
Islands
 
(“USVI”),
 
the
 
British
 
Virgin
 
Islands
 
(“BVI”),
 
and
 
the
 
state
 
of
 
Florida,
concentrating on
 
commercial banking,
 
residential mortgage loans,
 
credit cards, personal
 
loans, small loans,
 
auto loans and
 
leases, and
insurance agency activities.
Recent Developments
Economy and Market Update
Economic conditions
 
in Puerto
 
Rico remained
 
generally stable
 
during the
 
third quarter
 
of 2025.
 
The unemployment
 
rate averaged
5.6% in August 2025, similar to
 
the first half of the year,
 
and labor force participation remained steady.
 
Fiscal conditions improved; in
July 2025,
 
the Puerto
 
Rico government’s
 
$13.1 billion
 
fiscal year
 
2025 budget,
 
its first
 
balanced budget
 
certified by
 
the PROMESA
oversight board, took effect, reinforcing public finance
 
stability.
In
 
the
 
broader
 
U.S.
 
economy,
 
after
 
a
 
strong
 
second
 
quarter,
 
momentum
 
slowed
 
during
 
the
 
third
 
quarter
 
of
 
2025.
 
Labor
 
market
indicators softened
 
slightly,
 
and the
 
unemployment rate
 
increased to
 
4.3% in
 
August 2025,
 
compared to
 
4.1% in
 
the prior
 
quarter.
 
In
response to
 
these trends,
 
the Federal Reserve
 
(the “FED”)
 
implemented two
 
rate cuts,
 
one in
 
September 2025
 
and another
 
in October
2025,
 
bringing
 
the
 
federal
 
funds
 
target
 
range
 
down
 
to
 
3.75%-4.00%,
 
its
 
lowest
 
level
 
in
 
three
 
years.
 
The
 
ongoing
 
U.S.
 
federal
government
 
shutdown, which
 
began on
 
October 1,
 
2025, has
 
delayed several
 
statistical releases,
 
contributing
 
to increased
 
near-term
uncertainty in financial markets.
Against this
 
macroeconomic
 
backdrop,
 
the Corporation
 
delivered
 
solid results
 
in the
 
third
 
quarter
 
of 2025.
 
Total
 
loans surpassed
$13
 
billion
 
for
 
the first
 
time
 
since
 
2010,
 
increasing
 
5.6%
 
on
 
a
 
linked-quarter
 
annualized
 
basis,
 
led
 
by
 
commercial
 
and
 
construction
lending
 
in both
 
Puerto
 
Rico and
 
Florida.
 
Core franchise
 
deposits expanded
 
by
 
$139
 
million, consumer
 
charge-offs
 
remained
 
stable,
and non-performing loans declined further,
 
underscoring stable credit performance.
Net interest margin
 
is expected to
 
remain stable
 
through the fourth
 
quarter of
 
2025. Cash flows
 
of approximately
 
$0.6 billion from
investment
 
securities (excluding
 
U.S. Treasury
 
securities) are
 
expected to
 
be redeployed
 
into higher-yielding
 
interest-earning
 
assets.
These
 
benefits,
 
however,
 
are expected
 
to
 
be
 
partially
 
offset
 
by
 
the
 
recent
 
FED
 
rate
 
cuts,
 
which
 
may
 
reduce
 
yields
 
on
 
variable-rate
commercial loans
 
and interest-earning
 
cash held
 
at the
 
FED, as well
 
as by
 
competitive pressures
 
on deposit
 
pricing.
 
The Corporation
has revised its full-year loan growth
 
guidance to 3%-4%, down from the
 
previous mid-single-digit outlook, primarily
 
reflecting slower
consumer loan production, particularly in auto loans.
 
 
 
77
Capital Deployment Actions
In the
 
third quarter
 
of 2025,
 
the Corporation
 
delivered approximately
 
$78.7 million
 
in the
 
form of
 
capital deployment
 
actions that
included $28.7 million in common stock dividends declared and
 
$50.0 million in repurchases of common stock.
On
 
October
 
22,
 
2025,
 
the
 
Corporation
 
announced
 
that
 
its
 
Board
 
of
 
Directors
 
approved
 
a
 
new
 
stock
 
repurchase
 
program,
 
under
which the Corporation
 
may repurchase
 
up to an
 
additional $200
 
million of its
 
outstanding common
 
stock, which it
 
expects to execute
through the end of the fourth quarter of 2026.
From October
 
1, 2025 to
 
November 4, 2025,
 
the Corporation repurchased
 
approximately 1.2
 
million shares of
 
common stock for
 
a
total cost
 
of approximately
 
$23.7 million.
 
In the
 
aggregate, as
 
of November
 
4, 2025,
 
the Corporation
 
has remaining
 
authorization of
approximately $214.6 million.
Recent Tax
 
Developments and Other Special Items
The financial results for the third
 
quarter of 2025 include a one-time
 
reversal of approximately $16.6 million
 
in valuation allowance
related
 
to
 
deferred
 
tax
 
assets
 
primarily
 
associated
 
with
 
net
 
operating
 
loss
 
(“NOL”)
 
carryforwards
 
at
 
the
 
holding
 
company
 
level
following
 
the
 
enactment
 
of
 
Act
 
65-2025,
 
and
 
a
 
$2.3
 
million
 
employee
 
retention
 
credit
 
(“ERC”),
 
net
 
of
 
$0.3
 
million
 
in
 
related
commissions. For further details related to these Special Items, refer to
 
the
Non-GAAP Disclosures – Special Items section
below.
CRITICAL ACCOUNTING POLICIES AND PRACTICES
The
 
accounting
 
principles
 
of
 
the
 
Corporation
 
and
 
the
 
methods
 
of
 
applying
 
these
 
principles
 
conform
 
to
 
GAAP.
 
In
 
preparing
 
the
consolidated
 
financial
 
statements,
 
management
 
is
 
required
 
to
 
make
 
estimates,
 
assumptions,
 
and
 
judgments
 
that
 
affect
 
the
 
amounts
recorded for assets,
 
liabilities and contingent
 
liabilities as of
 
the date of
 
the financial statements
 
and the reported
 
amounts of revenues
and
 
expenses
 
during
 
the
 
reporting
 
periods.
 
Note
 
1
 
of
 
the Notes
 
to
 
Consolidated
 
Financial
 
Statements
 
included
 
in
 
our
 
2024
 
Annual
Report
 
on
 
Form
 
10-K,
 
as
 
supplemented
 
by
 
this
 
Quarterly
 
Report
 
on
 
Form
 
10-Q,
 
including
 
this
 
MD&A,
 
describes
 
the
 
significant
accounting policies we used in our consolidated financial statements.
Not all significant
 
accounting policies require
 
management to make
 
difficult, subjective
 
or complex judgments.
 
Critical accounting
estimates
 
are
 
those
 
estimates
 
made
 
in
 
accordance
 
with
 
GAAP
 
that
 
involve
 
a
 
significant
 
level
 
of
 
uncertainty
 
and
 
have
 
had
 
or
 
are
reasonably
 
likely
 
to
 
have
 
a
 
material
 
impact
 
on
 
the
 
Corporation’s
 
financial
 
condition
 
and
 
results
 
of
 
operations.
 
The
 
Corporation’s
critical accounting
 
estimates that
 
are particularly
 
susceptible
 
to significant
 
changes include,
 
but are
 
not limited
 
to, the
 
following:
 
(i)
the allowance for credit losses (“ACL”);
 
(ii) valuation of financial instruments;
 
and (iii) income taxes. For more
 
information regarding
valuation
 
of financial
 
instruments and
 
income tax
 
policies, assumptions,
 
and judgments,
 
see “Critical
 
Accounting
 
Estimates” in
 
Part
II,
 
Item
 
7,
 
“Management’s
 
Discussion
 
and
 
Analysis
 
of
 
Financial
 
Condition
 
and
 
Results
 
of
 
Operations
 
(“MD&A”),”
 
in
 
the
 
2024
Annual
 
Report
 
on
 
Form
 
10-K.
 
The
 
“Risk
 
Management
 
–
 
Credit
 
Risk
 
Management”
 
section
 
of
 
this
 
MD&A
 
details
 
the
 
policies,
assumptions, and judgments related to the ACL. Actual results could differ from estimates and assumptions if different outcomes or Overview of Results of Operations
conditions prevail.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
78
The
 
Corporation’s
 
results
 
of
 
operations
 
depend
 
primarily
 
on
 
its
 
net
 
interest
 
income,
 
which
 
is
 
the
 
difference
 
between
 
the
 
interest
income
 
earned
 
on
 
its
 
interest-earning
 
assets,
 
including
 
investment
 
securities
 
and
 
loans,
 
and
 
the
 
interest
 
expense
 
incurred
 
on
 
its
interest-bearing
 
liabilities,
 
including
 
deposits
 
and
 
borrowings.
 
Net
 
interest
 
income
 
is
 
affected
 
by
 
various
 
factors,
 
including
 
the
following:
 
(i)
 
the
 
interest
 
rate
 
environment;
 
(ii)
 
the
 
volumes,
 
mix,
 
and
 
composition
 
of
 
interest-earning
 
assets,
 
and
 
interest-bearing
liabilities; and (iii) the repricing characteristics of these assets and liabilities.
For
 
the
 
quarter
 
and
 
nine-month
 
period
 
ended
 
September
 
30,
 
2025,
 
the
 
Corporation
 
had
 
net
 
income
 
of $100.5
 
million
 
($0.63
 
per
diluted
 
common
 
share)
 
and
 
$257.8
 
million
 
($1.59
 
per
 
diluted
 
common
 
share),
 
respectively,
 
compared
 
to
 
$73.7
 
million
 
($0.45
 
per
diluted common share)
 
and $223.0 million
 
($1.35 per diluted common
 
share), respectively,
 
for the comparable
 
periods in 2024.
 
Other
relevant selected financial indicators for the periods presented are included
 
below:
Quarter Ended September 30,
Nine-Month Period Ended September 30,
2025
2024
2025
2024
Key Performance Indicator:
(1)
Return on Average Assets
(2)
2.10
%
1.55
%
1.81
%
1.57
%
Adjusted Return on Average Assets
 
(2) (4)
1.70
1.55
1.68
1.58
Return on Average Common Equity
(3)
21.36
18.31
19.07
19.52
Adjusted Return on Average Common Equity
 
(3)
(4)
17.36
18.31
17.68
19.57
Efficiency Ratio
 
(5)
50.22
52.41
49.92
52.03
(1)
These financial ratios are used by management to monitor the Corporation’s
 
financial performance and whether it is using its assets
 
efficiently.
(2)
Indicates how profitable the Corporation is in relation to its total assets
 
and is calculated by dividing net income on an annualized
 
basis by its average total assets.
(3)
Measures the Corporation’s
 
performance based on its
 
average common stockholders’ equity and
 
is calculated by dividing net
 
income on an annualized
 
basis by its average total
 
common
stockholders’ equity.
(4)
Represents non-GAAP
 
financial measures.
 
Refer to
Non-GAAP Financial
 
Measures and
 
Reconciliations
below for
 
the definition
 
of and
 
additional information
 
about these
 
non-GAAP
financial measures.
(5)
Measures how much the Corporation incurred to generate a
 
dollar of revenue and is calculated by dividing non-interest expenses
 
by total revenue.
The
 
key
 
drivers
 
of
 
the
 
Corporation’s
 
GAAP
 
financial
 
results
 
for
 
the
 
quarter
 
ended
 
September
 
30,
 
2025,
 
compared
 
to
 
the
 
third
quarter of 2024, include the following:
●
Net
 
interest
 
income
 
for
 
the
 
quarter
 
ended
 
September
 
30,
 
2025
 
increased
 
by
 
$15.8
 
million
 
to
 
$217.9
 
million,
 
compared
 
to
$202.1 million
 
for the
 
third quarter
 
of 2024.
 
Net interest
 
margin for
 
the third
 
quarter of
 
2025 increased
 
by 32
 
bps to
 
4.57%,
driven by a decrease
 
in the cost of funds
 
and a change in asset mix
 
associated with the deployment
 
of cash flows from lower-
yielding
 
investment
 
securities
 
to
 
loans
 
and
 
other
 
higher-yielding
 
interest-earning
 
assets.
 
See
 
“Results
 
of
 
Operations
 
–
 
Net
Interest Income”
 
below for additional information.
●
The provision for credit
 
losses on loans, finance
 
leases, unfunded loan commitments
 
and debt securities for the
 
quarter ended
September 30, 2025 was $17.6 million, compared to $15.2 million for the third
 
quarter of 2024.
Net
 
charge-offs
 
totaled
 
$19.9
 
million
 
for
 
the quarter
 
ended September
 
30,
 
2025,
 
or an
 
annualized
 
0.62%
 
of average
 
loans,
compared
 
to
 
$24.0
 
million,
 
or
 
an
 
annualized
 
0.78%
 
of
 
average
 
loans,
 
for
 
the
 
third
 
quarter
 
of
 
2024.
 
The
 
decrease
 
in
 
net
charge-offs
 
for
 
the
 
third
 
quarter
 
of
 
2025
 
was
 
driven
 
by
 
a
 
$2.7
 
million
 
decrease
 
in
 
consumer
 
loans
 
and
 
finance
 
leases
 
net
charge-offs and
 
a $1.2 million charge
 
-off recorded
 
on the sale of
 
a nonaccrual C&I
 
loan in the
 
Puerto Rico region
 
during the
third quarter of
 
2024. See “Results of
 
Operations – Provision
 
for Credit Losses”
 
and “Risk Management”
 
below for analyses
of the ACL and non-performing assets and related ratios.
●
Non-interest income for the quarter ended
 
September 30, 2025 decreased by $1.7 million to $30.8 million,
 
mainly related to a
$0.6 million decrease
 
in realized gains
 
from purchased income
 
tax credits and
 
$0.8 million in
 
insurance proceeds received
 
in
the third quarter of 2024.
●
Non-interest expenses for
 
the quarter ended September
 
30, 2025 amounted to $124.9
 
million, compared to $122.9
 
million for
the third
 
quarter of
 
2024. Non-interest
 
expenses for
 
the third
 
quarter of
 
2025 included
 
a $2.3 million
 
benefit in
 
payroll taxes
related to the ERC. On
 
a non-GAAP basis, excluding
 
the effect of this Special
 
Item, adjusted non-interest expenses
 
increased
by $4.3 million primarily due to a $3.0 million increase in adjusted employees’ compensation and benefits expenses driven Virgin Islands region as part of net loss (gain) on other real estate owned (“OREO”) operations.
by
 
annual
 
salary
 
merit
 
increases and
 
a
 
$2.8
 
million
 
valuation
 
adjustment
 
recorded
 
in
 
a commercial
 
OREO
 
property
 
in
 
the
 
79
See “Results of Operations –
Non-Interest Expenses” below for additional information.
 
●
Income tax expense
 
decreased to $5.7 million
 
for the third quarter
 
of 2025, compared
 
to $22.7 million
 
for the same period
 
in
2024,
 
driven
 
by
 
a
 
one-time
 
reversal
 
of
 
approximately
 
$16.6
 
million
 
in
 
valuation
 
allowance
 
related
 
to
 
deferred
 
tax
 
assets
primarily
 
associated
 
with
 
NOL
 
carryforwards
 
at
 
the
 
holding
 
company
 
level.
 
See
 
“Income
 
Taxes”
 
below
 
and
 
Note
 
14
 
–
“Income Taxes,”
 
to the unaudited consolidated financial statements herein for
 
additional information.
 
●
As of
 
September
 
30,
 
2025,
 
total assets
 
were
 
approximately
 
$19.3
 
billion,
 
an increase
 
of $28.4
 
million
 
from
 
December 31,
2024,
 
primarily related to an increase in total loans and an increase in
 
the fair value of available-for-sale debt securities due to
changes in market
 
interest rates, partially offset
 
by a decrease in
 
cash and cash equivalents
 
resulting from capital
 
deployment
actions and the repayment of long-term borrowings.
●
As of
 
September 30,
 
2025, total
 
liabilities were
 
$17.4 billion,
 
a decrease
 
of $220.4
 
million from
 
December 31,
 
2024, driven
by a $271.7 million decrease in borrowings.
 
See “Risk Management – Liquidity Risk” below for additional
 
information about
the Corporation’s funding
 
sources and strategy.
●
The
 
Corporation’s
 
primary
 
sources
 
of
 
funding
 
are
 
consumer
 
and
 
commercial
 
core
 
deposits,
 
which
 
exclude
 
government
deposits
 
and
 
brokered
 
certificates
 
of
 
deposit
 
(“CDs”).
 
Excluding
 
fully
 
collateralized
 
government
 
deposits,
 
estimated
uninsured
 
deposits
 
amounted
 
to
 
$4.6
 
billion
 
as of
 
September
 
30,
 
2025.
 
The
 
Corporation
 
had
 
approximately
 
$2.4
 
billion
 
in
cash and
 
cash equivalents
 
and free
 
high-quality liquid
 
securities.
 
In addition,
 
as of
 
September 30,
 
2025, the
 
Corporation had
approximately $2.7
 
billion available for
 
funding under
 
the FED’s
 
Discount Window
 
and $1.1
 
billion available for
 
additional
borrowing capacity on
 
the Federal Home Loan
 
Bank (“FHLB”) lines of credit
 
based on collateral pledged
 
at these entities. In
the
 
aggregate,
 
as
 
of
 
September
 
30,
 
2025,
 
the
 
Corporation
 
had
 
$6.2
 
billion,
 
or
 
134%
 
of
 
estimated
 
uninsured
 
deposits
(excluding
 
fully
 
collateralized
 
government
 
deposits),
 
available
 
to
 
meet liquidity
 
needs.
 
See “Risk
 
Management
 
–
 
Liquidity
Risk” below for additional information about the Corporation’s
 
funding sources and strategy.
●
As of
 
September 30,
 
2025, the
 
Corporation’s
 
total stockholders’
 
equity was
 
$1.9 billion,
 
an increase
 
of $248.8
 
million from
December
 
31,
 
2024.
 
The
 
increase
 
was driven
 
by
 
net
 
income
 
generated
 
in
 
the
 
first
 
nine
 
months
 
2025
 
and
 
a
 
$174.1
 
million
increase in the fair value
 
of available-for-sale debt securities
 
recorded as part of
 
accumulated other comprehensive
 
loss in the
consolidated
 
statements
 
of
 
financial
 
condition,
 
partially
 
offset
 
by
 
$100.0
 
million
 
in
 
common
 
stock
 
repurchases
 
and
 
$87.4
million, or $0.54 per common
 
share, in common stock dividends
 
declared in the first nine months
 
of 2025. The Corporation’s
CET1 capital, tier
 
1 capital, total
 
capital, and
 
leverage ratios were
 
16.67%, 16.67%,
 
17.93%, and 11.52%
 
,
 
respectively,
 
as of
September 30,
 
2025, compared
 
to CET1
 
capital, tier 1
 
capital, total
 
capital, and
 
leverage ratios
 
of 16.32%,
 
16.32%, 18.02%,
and 11.07%, respectively,
 
as of December 31, 2024.
 
See “Risk Management – Capital” below for additional information.
●
Total
 
loan
 
production,
 
including
 
purchases,
 
refinancings,
 
renewals,
 
and
 
draws
 
from
 
existing
 
revolving
 
and
 
non-revolving
commitments, increased
 
by $68.2
 
million to
 
$1.4 billion
 
for the quarter
 
ended September
 
30, 2025,
 
as compared
 
to the third
quarter
 
of 2024,
 
mainly
 
in
 
commercial
 
and
 
construction
 
loans in
 
the
 
Puerto
 
Rico
 
and
 
Florida
 
regions,
 
partially
 
offset
 
by
 
a
decrease in
 
consumer
 
loans in
 
the Puerto
 
Rico region.
 
See “Results
 
of Operations
 
– Loan
 
Production”
 
below for
 
additional
information.
●
Total
 
non-performing assets
 
were $119.4
 
million as
 
of September
 
30, 2025,
 
an increase
 
of $1.1
 
million from
 
December 31,
2024,
 
mainly due
 
to a $13.9
 
million increase
 
in nonaccrual commercial
 
and construction
 
loans, which
 
include the
 
inflows to
nonaccrual
 
status of
 
a $12.6
 
million
 
commercial
 
mortgage loan
 
in the
 
Florida region
 
during
 
the first
 
quarter
 
of 2025
 
and
 
a
$4.3 million
 
construction loan
 
in the
 
Puerto Rico
 
region during
 
the second
 
quarter of
 
2025, both
 
in the
 
hospitality industry;
partially offset
 
by an
 
$8.0 million
 
decrease in
 
the OREO
 
portfolio balance
 
,
 
which includes
 
the aforementioned
 
$2.8 million
valuation
 
adjustment recorded
 
in a
 
commercial OREO
 
property in
 
the Virgin
 
Islands region;
 
and a
 
$5.2 million
 
decrease in
nonaccrual
 
residential
 
mortgage loans
 
and consumer
 
loans and
 
finance leases.
 
See “Risk
 
Management
 
– Nonaccrual
 
Loans
and Non-Performing Assets” below for additional information.
●
Adversely
 
classified
 
commercial
 
and
 
construction
 
loans
 
increased
 
by
 
$13.9
 
million
 
to
 
$101.2
 
million
 
as
 
of
 
September
 
30,
2025,
 
compared to
 
December 31,
 
2024, driven
 
by the
 
downgrade of
 
five commercial
 
loans totaling
 
$34.1 million,
 
including
the
 
aforementioned
 
$12.6
 
million
 
inflow
 
to nonaccrual
 
status in
 
the Florida
 
region
 
during
 
the first
 
quarter
 
of 2025
 
and the
downgrade
 
of
 
a
 
$10.0
 
million
 
C&I
 
loan
 
in
 
the
 
Puerto
 
Rico
 
region
 
during
 
the
 
third
 
quarter
 
of
 
2025,
 
partially
 
offset
 
by
 
the
upgrade of two commercial mortgage loans totaling $17.0 million.
 
 
80
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
The Corporation has included in this Quarterly Report on Form 10-Q
 
the following financial measures that are not recognized under
GAAP,
 
which are referred to as non-GAAP financial measures:
 
Net Interest Income,
 
Interest Rate Spread,
 
and Net Interest Margin on
 
a Tax
 
-Equivalent Basis
Net
 
interest
 
income,
 
interest
 
rate
 
spread,
 
and
 
net
 
interest
 
margin
 
are
 
reported
 
on
 
a
 
tax-equivalent
 
basis
 
in
 
order
 
to
 
provide
 
to
investors
 
additional
 
information
 
about
 
the
 
Corporation’s
 
net
 
interest
 
income
 
that
 
management
 
uses
 
and
 
believes
 
should
facilitate comparability and
 
analysis
 
of
 
the
 
periods
 
presented.
 
The
 
tax-equivalent
 
adjustment
 
to
 
net
 
interest
 
income
 
recognizes
 
the
income tax savings
 
when comparing
 
taxable and tax-exempt
 
assets and assumes
 
a marginal
 
income tax rate.
 
Income from tax-exempt
earning assets is increased
 
by an amount equivalent
 
to the taxes that would
 
have been paid if this
 
income had been taxable
 
at statutory
rates. Management believes that it
 
is a standard practice in the banking
 
industry to present net interest income,
 
interest rate spread, and
net interest margin
 
on a fully tax-equivalent basis.
 
This adjustment puts all earning
 
assets, most notably tax-exempt
 
securities and tax-
exempt loans, on a common basis that facilitates comparison of
 
results to the results of peers.
 
See “Results of Operations – Net Interest Income” below,
 
for the table that reconciles net interest income in accordance with GAAP
to the non-GAAP financial measure of net interest income
 
on a tax-equivalent basis for the indicated periods.
 
The table also reconciles
net interest spread and net interest margin on a GAAP basis to these items
 
on a tax-equivalent basis.
Tangible
 
Common Equity Ratio and Tangible
 
Book Value
 
Per Common Share
The tangible
 
common equity
 
ratio and
 
tangible book
 
value per
 
common share
 
are non-GAAP
 
financial measures
 
that management
believes are generally
 
used by the financial
 
community to evaluate
 
capital adequacy.
 
Tangible
 
common equity is total
 
common equity
less goodwill
 
and other
 
intangible assets.
 
Similarly,
 
tangible assets
 
are total
 
assets less
 
goodwill and
 
other intangible
 
assets. Tangible
common
 
equity
 
ratio
 
is
 
tangible
 
common
 
equity
 
divided
 
by
 
tangible
 
assets.
 
Tangible
 
book
 
value
 
per
 
common
 
share
 
is
 
tangible
common
 
equity divided
 
by the
 
number of
 
common shares
 
outstanding.
 
Management uses
 
and believes
 
that many
 
stock analysts
 
use
the tangible
 
common equity
 
ratio and
 
tangible book
 
value per
 
common share
 
in conjunction
 
with other
 
more traditional
 
bank capital
ratios
 
to
 
compare
 
the
 
capital
 
adequacy
 
of
 
banking
 
organizations
 
with
 
significant
 
amounts
 
of
 
goodwill
 
or
 
other
 
intangible
 
assets,
typically
 
stemming
 
from
 
the use
 
of
 
the
 
purchase
 
method
 
of
 
accounting
 
for
 
mergers
 
and
 
acquisitions.
 
Accordingly,
 
the Corporation
believes that
 
disclosures of
 
these financial
 
measures may
 
be useful
 
to investors.
 
Neither tangible
 
common equity
 
nor tangible
 
assets,
or the related
 
measures, should be
 
considered in isolation
 
or as a substitute
 
for stockholders’
 
equity,
 
total assets, or any
 
other measure
calculated in accordance
 
with GAAP.
 
Moreover,
 
the manner in which
 
the Corporation calculates its
 
tangible common
 
equity, tangible
assets, and any other related measures may differ from
 
that of other companies reporting measures with similar names.
See “Risk
 
Management –
 
Capital” below
 
for the
 
table that
 
reconciles the
 
Corporation’s
 
total equity
 
and total
 
assets in
 
accordance
with GAAP to
 
the tangible common
 
equity and tangible
 
assets figures used
 
to calculate the
 
non-GAAP financial measures
 
of tangible
common equity ratio and tangible book value per common share.
 
 
 
81
Adjusted Net Income,
 
Adjusted Non-Interest
 
Expenses,
 
Adjusted Income Tax
 
Expense, Adjusted Average
 
Assets, Adjusted Return on
Average Assets, Adjusted Average
 
Common Equity, and Adjusted Return
 
on Average Common Equity
To
 
supplement the
 
Corporation’s
 
financial statements
 
presented in
 
accordance with
 
GAAP,
 
the Corporation
 
uses, and believes
 
that
investors
 
benefit
 
from
 
disclosure
 
of,
 
non-GAAP
 
financial
 
measures
 
that
 
reflect
 
adjustments
 
to
 
net
 
income,
 
non-interest
 
expenses,
income tax
 
expense, adjusted
 
average assets,
 
adjusted return
 
on average
 
assets, adjusted
 
average common
 
equity,
 
and adjusted
 
return
on
 
average
 
common
 
equity
 
to
 
exclude
 
items
 
that
 
management
 
believes
 
are
 
not
 
reflective
 
of
 
core
 
operating
 
performance
 
(“Special
Items”). The
 
financial results
 
for the
 
third quarter
 
of 2024
 
did not
 
include any
 
significant Special
 
Items. The
 
financial results
 
for the
third quarter of 2025 and nine-month periods ended September 30, 2025
 
and 2024 included the following Special Items:
Quarter and Nine-Month Period Ended September 30, 2025
Enactment of Act 65-2025
-
On July
 
17, 2025,
 
the Government
 
of Puerto
 
Rico enacted
 
Act 65-2025
 
which, among
 
other things,
 
allows domestic
 
limited
liability companies
 
owned by
 
legal entities
 
to elect
 
to be
 
treated as
 
disregarded
 
entities for
 
tax purposes.
 
As a
 
result of
 
this
change, during the third quarter of 2025, the Corporation
 
reversed approximately $16.6 million in valuation allowance
 
related
to deferred
 
tax assets
 
primarily
 
associated with
 
NOL carryforwards
 
at the
 
holding company
 
level. This
 
reversal reflects
 
the
Corporation’s
 
expectation of
 
realizing these
 
tax benefits
 
under the new
 
election established
 
by the Act.
 
As of September
 
30,
2025,
 
the
 
remaining
 
valuation
 
allowance
 
related
 
to
 
deferred
 
tax
 
assets
 
associated
 
with
 
NOL
 
carryforwards
 
at
 
the
 
holding
company level was approximately $1.0 million.
 
Employee Retention Credit (“ERC”)
-
During the third
 
quarter of 2025, the
 
Corporation recognized a
 
$2.3 million ERC, net
 
of $0.3 million
 
in related commissions.
This
 
amount
 
is
 
reflected
 
in
 
the
 
consolidated
 
statements
 
of
 
income
 
as
 
part
 
of
 
“employees’
 
compensation
 
and
 
benefits”
expenses. This
 
credit was
 
established under
 
the Coronavirus
 
Aid, Relief,
 
and Economic
 
Security (“CARES”)
 
Act to
 
support
businesses that
 
retained employees
 
during the
 
COVID-19 pandemic.
 
The credit
 
recorded during
 
the third
 
quarter of
 
2025 is
tax exempt for Puerto Rico tax purposes.
Nine-Month Period Ended September 30, 2024
FDIC Special Assessment Expense
-
Charges
 
of
 
$1.1
 
million
 
($0.7
 
million
 
after-tax,
 
calculated
 
based
 
on
 
the
 
statutory
 
tax
 
rate
 
of
 
37.5%)
 
were
 
recorded
 
for
 
the
nine-month
 
period
 
ended
 
September
 
30,
 
2024
 
to
 
increase
 
the
 
special
 
assessment
 
imposed
 
by
 
the
 
FDIC
 
in
 
connection
 
with
losses to the
 
Deposit Insurance
 
Fund associated
 
with protecting
 
uninsured deposits
 
following the
 
failures of
 
certain financial
institutions during
 
the first
 
half of
 
2023. The
 
FDIC deposit
 
special assessment
 
is reflected
 
in the
 
consolidated statements
 
of
income as part of “FDIC deposit insurance” expenses.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
82
The
 
following
 
table
 
reconciles,
 
for
 
the
 
third
 
quarter
 
of
 
2025
 
and
 
nine-month
 
periods
 
ended
 
September
 
30,
 
2025
 
and
 
2024,
 
net
income to adjusted
 
net income, adjusted
 
average common
 
equity,
 
adjusted return on
 
average common
 
equity,
 
adjusted average assets,
and adjusted
 
return on
 
average assets,
 
which are
 
non-GAAP financial
 
measures
 
that exclude
 
the Special
 
Items identified
 
above, and
shows, for the third quarter of 2024, the reported net income.
Quarter Ended September 30,
Nine-Month Period Ended
September 30,
2025
2024
2025
2024
(In thousands)
Net income, as reported (GAAP)
$
100,526
$
73,727
$
257,765
$
223,023
Adjustments:
 
Employee retention credit
(2,358)
-
(2,358)
-
FDIC special assessment expense
-
-
-
1,099
Income tax impact related to the enactment of Act 65-2025
(16,553)
-
(16,553)
-
Income tax impact of adjustment
(1)
-
-
-
(412)
Adjusted net income (Non-GAAP)
$
81,615
$
73,727
$
238,854
$
223,710
Average assets
$
19,028,792
$
18,883,374
$
19,058,747
$
18,875,397
Adjusted average assets
(2)
$
19,027,151
$
18,883,374
$
19,058,194
$
18,875,397
Return on average assets (GAAP)
2.10%
1.55%
1.81%
1.57%
Adjusted return on average assets (Non-GAAP)
1.70%
1.55%
1.68%
1.58%
Average common equity
$
1,866,839
$
1,597,558
$
1,807,108
$
1,522,292
Adjusted average common equity
(2)
$
1,865,198
$
1,597,558
$
1,806,555
$
1,522,721
Return on average common equity (GAAP)
21.36%
18.31%
19.07%
19.52%
Adjusted return on average common equity (Non-GAAP)
17.36%
18.31%
17.68%
19.57%
(1)
See “Adjusted Net Income, Adjusted Non-Interest Expenses,
 
Adjusted Income Tax Expense,
 
Adjusted Average Assets, Adjusted Return
 
on Average Assets,
 
Adjusted Average Common
Equity, and Adjusted Return on Average
 
Common Equity” above for the individual tax impact related to the
 
above adjustment, which was based on the Puerto Rico
 
statutory tax rate of
37.5%.
(2)
Adjusted to account for the average effect of Special Items.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
83
RESULTS
 
OF OPERATIONS
Net Interest Income
Net interest
 
income is
 
the excess of
 
interest earned
 
by First
 
BanCorp. on
 
its interest-earning
 
assets over
 
the interest
 
incurred on its
interest-bearing
 
liabilities.
 
First
 
BanCorp.’s
 
net
 
interest
 
income
 
is
 
subject
 
to
 
interest
 
rate
 
risk
 
due
 
to
 
the
 
repricing
 
and
 
maturity
mismatch
 
of
 
the
 
Corporation’s
 
assets
 
and
 
liabilities.
 
In
 
addition,
 
variable
 
sources
 
of
 
interest
 
income,
 
such
 
as
 
loan
 
fees,
 
periodic
dividends, and
 
collection of
 
interest on
 
nonaccrual loans,
 
can fluctuate
 
from period
 
to period.
 
Net interest
 
income for
 
the quarter
 
and
nine-month
 
period ended
 
September 30,
 
2025 was
 
$217.9 million
 
and $646.2
 
million, respectively,
 
compared to
 
$202.1 million
 
and
$598.2
 
million
 
for
 
the
 
comparable
 
periods
 
in
 
2024,
 
respectively.
 
On
 
a
 
tax-equivalent
 
basis,
 
net
 
interest
 
income
 
for
 
the
 
quarter
 
and
nine-month
 
period ended
 
September 30,
 
2025 was
 
$226.2 million
 
and $667.8
 
million, respectively,
 
compared to
 
$206.6 million
 
and
$612.4 million for the comparable periods
 
in 2024, respectively.
The
 
following
 
tables
 
include a
 
detailed
 
analysis
 
of net
 
interest income
 
for
 
the indicated
 
periods.
 
Part I
 
presents
 
average volumes
(based
 
on
 
the
 
average
 
daily
 
balance)
 
and
 
rates
 
on
 
an
 
adjusted
 
tax-equivalent
 
basis
 
and
 
Part
 
II
 
presents,
 
also
 
on
 
an
 
adjusted
 
tax-
equivalent basis,
 
the extent
 
to which
 
changes in
 
interest rates
 
and changes
 
in the
 
volume of
 
interest-related assets
 
and liabilities
 
have
affected
 
the Corporation’s
 
net interest
 
income. For
 
each category
 
of interest-earning
 
assets and
 
interest-bearing
 
liabilities, the
 
tables
provide
 
information
 
on
 
changes
 
in
 
(i)
 
volume
 
(changes
 
in
 
volume
 
multiplied
 
by
 
prior
 
period
 
rates),
 
and
 
(ii)
 
rate
 
(changes
 
in
 
rate
multiplied by
 
prior period
 
volumes). The
 
Corporation has
 
allocated rate-volume
 
variances (changes
 
in rate
 
multiplied by
 
changes in
volume) to either the changes in volume or the changes in rate based upon the
 
effect of each factor on the combined totals.
Net
 
interest
 
income
 
on
 
an
 
adjusted
 
tax-equivalent
 
basis
 
is
 
a
 
non-GAAP
 
financial
 
measure.
 
For
 
the
 
definition
 
of
 
this
 
non-GAAP
financial measure, refer to the discussion in “Non-GAAP Financial Measures
 
and Reconciliations” above.
Part I
Average volume
Interest income
(1)
 
/ expense
Average rate
(1)
Quarter ended September 30,
2025
2024
2025
2024
2025
2024
(Dollars in thousands)
Interest-earning assets:
Money market and other short-term investments
$
871,290
$
645,398
$
9,695
$
8,782
4.41
%
5.40
%
Government obligations
(2)
1,838,314
2,520,133
9,779
8,458
2.11
%
1.33
%
Mortgage-backed securities (“MBS”)
3,281,983
3,290,547
18,801
13,830
2.27
%
1.67
%
FHLB stock
25,777
33,985
495
804
7.62
%
9.39
%
Other investments
20,362
19,726
123
73
2.40
%
1.47
%
Total investments
(3)
6,037,726
6,509,789
38,893
31,947
2.56
%
1.95
%
Residential mortgage loans
2,873,549
2,816,343
42,203
41,505
5.83
%
5.85
%
Construction loans
250,280
195,001
6,058
4,417
9.60
%
8.99
%
C&I and commercial mortgage loans
6,014,997
5,616,658
104,631
102,763
6.90
%
7.26
%
Finance leases
897,982
885,807
17,403
17,290
7.69
%
7.74
%
Consumer loans
2,839,431
2,840,870
81,799
81,281
11.43
%
11.35
%
Total loans
(4)(5)
12,876,239
12,354,679
252,094
247,256
7.77
%
7.94
%
 
Total interest-earning assets
$
18,913,965
$
18,864,468
$
290,987
$
279,203
6.10
%
5.87
%
Interest-bearing liabilities:
Time deposits
$
3,352,163
$
3,057,918
$
28,590
$
27,768
3.38
%
3.60
%
Brokered CDs
581,946
600,319
6,414
7,656
4.37
%
5.06
%
Other interest-bearing deposits
7,421,017
7,429,163
26,341
28,280
1.41
%
1.51
%
Advances from the FHLB
313,152
500,000
3,472
5,672
4.40
%
4.50
%
Other borrowings
857
155,722
10
3,235
4.63
%
8.24
%
Total interest-bearing liabilities
$
11,669,135
$
11,743,122
$
64,827
$
72,611
2.20
%
2.45
%
Net interest income on a tax-equivalent basis - non-GAAP
$
226,160
$
206,592
Interest rate spread - non-GAAP
3.90
%
3.42
%
Net interest margin - non-GAAP
4.74
%
4.34
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
84
Part I
Average volume
Interest income
(1)
 
/ expense
Average rate
(1)
Nine-Month Period Ended September 30,
2025
 
2024
 
2025
 
2024
 
2025
2024
(Dollars in thousands)
Interest-earning assets:
Money market and other short-term investments
$
1,016,762
$
615,679
$
33,797
$
25,096
4.44
%
5.43
%
Government obligations
(2)
1,882,541
2,607,706
24,268
26,458
1.72
%
1.35
%
MBS
3,293,288
3,366,866
54,277
43,407
2.20
%
1.72
%
FHLB stock
28,159
34,217
1,930
2,476
9.16
%
9.64
%
Other investments
20,289
17,978
544
383
3.58
%
2.84
%
Total investments
(3)
6,241,039
6,642,446
114,816
97,820
2.46
%
1.96
%
Residential mortgage loans
2,856,813
2,811,447
125,361
122,664
5.87
%
5.81
%
Construction loans
242,893
219,601
17,493
13,909
9.63
%
8.44
%
C&I and commercial mortgage loans
5,905,687
5,550,259
305,145
302,758
6.91
%
7.27
%
Finance leases
900,998
874,508
52,950
51,672
7.86
%
7.87
%
Consumer loans
2,845,018
2,822,909
243,853
240,809
11.46
%
11.36
%
Total loans
(4)(5)
12,751,409
12,278,724
744,802
731,812
7.81
%
7.94
%
 
Total interest-earning assets
$
18,992,448
$
18,921,170
$
859,618
$
829,632
6.05
%
5.84
%
Interest-bearing liabilities:
Time deposits
$
3,198,226
$
2,984,413
$
80,805
$
78,766
3.38
%
3.52
%
Brokered CDs
518,195
675,226
17,366
25,926
4.48
%
5.11
%
Other interest-bearing deposits
7,591,571
7,497,046
80,309
85,708
1.41
%
1.52
%
Advances from the FHLB
366,703
500,000
12,180
16,892
4.44
%
4.50
%
Other borrowings
21,199
159,693
1,166
9,921
7.35
%
8.28
%
Total interest-bearing liabilities
$
11,695,894
$
11,816,378
$
191,826
$
217,213
2.19
%
2.45
%
Net interest income on a tax-equivalent basis - non-GAAP
$
667,792
$
612,419
Interest rate spread - non-GAAP
3.86
%
3.39
%
Net interest margin - non-GAAP
4.70
%
4.31
%
(1)
On an adjusted
 
tax-equivalent basis. The
 
Corporation estimated the
 
adjusted tax-equivalent
 
yield by dividing
 
the interest rate
 
spread on exempt
 
assets by 1
 
less the Puerto
 
Rico statutory
tax rate of 37.5%
 
and adding to it
 
the cost of interest-bearing
 
liabilities. The tax-equivalent
 
adjustment recognizes the
 
income tax savings
 
when comparing taxable
 
and tax-exempt assets.
Management
 
believes
 
that it
 
is a
 
standard
 
practice in
 
the
 
banking
 
industry
 
to present
 
net interest
 
income, interest
 
rate spread
 
and net
 
interest
 
margin
 
on a
 
fully tax-equivalent
 
basis.
Therefore,
 
management
 
believes
 
these
 
measures
 
provide
 
useful
 
information
 
to
 
investors
 
by
 
allowing
 
them
 
to
 
make
 
peer
 
comparisons.
 
See
 
“Non-GAAP
 
Financial
 
Measures
 
and
Reconciliations” above.
(2)
Government obligations include debt issued by government-sponsored
 
agencies.
(3)
Unrealized gains and losses on available-for-sale debt securities
 
are excluded from the average volumes.
(4)
Average loan balances include
 
the average of nonaccrual loans.
(5)
Interest income on loans
 
includes $3.8 million
 
and $3.2 million
 
for the quarters ended
 
September 30, 2025 and
 
2024, respectively,
 
and $12.9 million and
 
$9.5 million for
 
the nine-month
periods ended September 30, 2025 and 2024, respectively,
 
of income from prepayment penalties and late fees related to
 
the Corporation’s loan portfolio.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
85
Part II
Quarter Ended September 30,
Nine-Month Period Ended September 30,
2025 Compared to 2024
2025 Compared to 2024
Variance due to:
Variance due to:
Volume
Rate
Total
Volume
Rate
Total
(In thousands)
Interest income on interest-earning assets:
Money market and other short-term investments
$
2,787
$
(1,874)
$
913
$
14,928
$
(6,227)
$
8,701
Government obligations
(2,928)
4,249
1,321
(8,364)
6,174
(2,190)
MBS
(22)
4,993
4,971
(1,078)
11,948
10,870
FHLB stock
(174)
(135)
(309)
(421)
(125)
(546)
Other investments
2
48
50
53
108
161
Total investments
(335)
7,281
6,946
5,118
11,878
16,996
Residential mortgage loans
838
(140)
698
1,992
705
2,697
Construction loans
1,321
320
1,641
1,565
2,019
3,584
C&I and commercial mortgage loans
7,058
(5,190)
1,868
18,895
(16,508)
2,387
Finance leases
235
(122)
113
1,562
(284)
1,278
Consumer loans
(1,472)
1,990
518
(2,318)
5,362
3,044
Total loans
7,980
(3,142)
4,838
21,696
(8,706)
12,990
Total interest income
$
7,645
$
4,139
$
11,784
$
26,814
$
3,172
$
29,986
Interest expense on interest-bearing liabilities:
Time deposits
$
2,573
$
(1,751)
$
822
$
5,529
$
(3,490)
$
2,039
Brokered CDs
(228)
(1,014)
(1,242)
(5,542)
(3,018)
(8,560)
Other interest-bearing deposits
147
(2,086)
(1,939)
2,280
(7,679)
(5,399)
Advances from the FHLB
(2,074)
(126)
(2,200)
(4,446)
(266)
(4,712)
Other borrowings
(2,413)
(812)
(3,225)
(7,754)
(1,001)
(8,755)
Total interest expense
(1,995)
(5,789)
(7,784)
(9,933)
(15,454)
(25,387)
Change in net interest income
$
9,640
$
9,928
$
19,568
$
36,747
$
18,626
$
55,373
Portions of
 
the Corporation’s
 
interest-earning assets,
 
mostly certain
 
loans and
 
investments in obligations
 
of some U.S.
 
government
agencies and U.S. GSEs, generate
 
interest that is exempt from
 
income tax, principally in
 
Puerto Rico. Also, interest and
 
gains on sales
of investments
 
held by
 
the Corporation’s
 
international banking
 
entities (“IBEs”)
 
are tax-exempt
 
under Puerto
 
Rico tax
 
law (see
 
Note
14
 
–
 
“Income
 
Taxes”
 
to
 
the
 
unaudited
 
consolidated
 
financial
 
statements
 
included
 
herein
 
for
 
additional
 
information).
 
Management
believes
 
that
 
the
 
presentation
 
of
 
interest
 
income
 
on
 
an
 
adjusted
 
tax-equivalent
 
basis
 
facilitates
 
the
 
comparison
 
of
 
all
 
interest
 
data
related to
 
these assets.
 
The Corporation
 
estimated the
 
tax equivalent
 
yield by
 
dividing the
 
interest rate
 
spread on
 
exempt assets
 
by 1
less
 
the
 
Puerto
 
Rico
 
statutory
 
tax
 
rate
 
(37.5%)
 
and
 
adding
 
to
 
it
 
the
 
average
 
cost
 
of
 
interest-bearing
 
liabilities.
 
The
 
computation
considers the interest expense disallowance required by Puerto Rico tax law.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
86
The following
 
table reconciles
 
net interest
 
income in
 
accordance with
 
GAAP to
 
net interest
 
income on
 
an adjusted
 
tax-equivalent
basis for the indicated periods.
 
The table also reconciles net interest
 
spread and net interest margin
 
on a GAAP basis to this
 
item on an
adjusted tax-equivalent basis:
Quarter Ended
Nine-Month Period Ended
September 30,
September 30,
2025
2024
2025
2024
(Dollars in thousands)
Interest income - GAAP
$
282,743
$
274,675
$
837,998
$
815,425
Tax-equivalent adjustment
8,244
4,528
21,620
14,207
Interest income on a tax-equivalent basis
 
- non-GAAP
$
290,987
$
279,203
$
859,618
$
829,632
Interest expense - GAAP
$
64,827
$
72,611
$
191,826
$
217,213
Net interest income - GAAP
$
217,916
$
202,064
$
646,172
$
598,212
Net interest income on a tax-equivalent basis
 
- non-GAAP
$
226,160
$
206,592
$
667,792
$
612,419
Average Balances
 
Loans and leases
$
12,876,239
$
12,354,679
$
12,751,409
$
12,278,724
Total securities, other short-term investments and interest-bearing
 
cash balances
6,037,726
6,509,789
6,241,039
6,642,446
Average interest-earning assets
$
18,913,965
$
18,864,468
$
18,992,448
$
18,921,170
Average interest-bearing liabilities
$
11,669,135
$
11,743,122
$
11,695,894
$
11,816,378
Average assets
(1)
$
19,028,792
$
18,883,374
$
19,058,747
$
18,875,397
Average non-interest-bearing deposits
$
5,309,212
$
5,341,589
$
5,378,807
$
5,333,838
Average Yield/Rate
Average yield on interest-earning assets - GAAP
5.93%
5.78%
5.90%
5.74%
Average rate on interest-bearing liabilities - GAAP
2.20%
2.45%
2.19%
2.45%
Net interest spread - GAAP
3.73%
3.33%
3.71%
3.29%
Net interest margin - GAAP
4.57%
4.25%
4.55%
4.21%
Average yield on interest-earning assets on a tax-equivalent
 
basis - non-GAAP
6.10%
5.87%
6.05%
5.84%
Average rate on interest-bearing liabilities
2.20%
2.45%
2.19%
2.45%
Net interest spread on a tax-equivalent basis
 
- non-GAAP
3.90%
3.42%
3.86%
3.39%
Net interest margin on a tax-equivalent basis - non-GAAP
4.74%
4.34%
4.70%
4.31%
(1) Includes, among other things, the ACL on loans and finance leases
 
and debt securities, as well as unrealized gains and losses on available-for-sale
 
debt securities.
 
87
Net
 
interest
 
income
 
amounted
 
to
 
$217.9
 
million
 
for
 
the
 
quarter
 
ended
 
September
 
30,
 
2025,
 
an
 
increase
 
of
 
$15.8
 
million,
 
when
compared to $202.1 million for the same period in 2024. The $15.8
 
million increase in net interest income consisted of:
●
A $7.8 million decrease in interest expense on interest-bearing liabilities, consisting
 
of:
o
A
 
$5.4
 
million
 
decrease
 
in
 
interest
 
expense
 
on
 
borrowings,
 
mainly
 
due
 
to
 
the
 
redemption
 
of
 
$161.7
 
million
 
of
 
junior
subordinated debentures during the second half
 
of 2024 and first half of 2025,
 
and $180.0 million in FHLB advances that
matured and were repaid in March 2025.
o
A $2.4 million decrease in interest expense on interest-bearing deposits, consisting
 
of:
-
A $1.9 million decrease in
 
interest expense on interest-bearing
 
checking and saving accounts, driven
 
by the effect of
lower interest
 
rates when
 
compared
 
to the
 
same period
 
in 2024.
 
The average
 
cost of
 
interest-bearing
 
checking and
saving accounts
 
in the third
 
quarter of 2025
 
decreased 10
 
bps to 1.41%
 
when compared
 
to the same
 
period in 2024,
mostly
 
driven
 
by
 
a
 
31
 
bps
 
decrease
 
in
 
government
 
deposits.
 
Excluding
 
government
 
deposits,
 
the
 
average
 
cost
 
of
interest-bearing
 
checking and
 
savings accounts
 
for the
 
quarter ended
 
September 30,
 
2025 was
 
0.72%, compared
 
to
0.76% for the same period in 2024.
-
A
 
$1.3
 
million
 
decrease
 
in
 
interest
 
expense
 
on
 
brokered
 
CDs,
 
of
 
which
 
$1.0
 
million
 
was
 
associated
 
with
 
new
issuances at lower interest rates than maturing brokered CDs.
Partially offset by:
-
A
 
$0.8
 
million
 
increase
 
in
 
interest
 
expense
 
on
 
time
 
deposits,
 
excluding
 
brokered
 
CDs,
 
driven
 
by
 
a
 
$2.6
 
million
increase associated with
 
a $294.2 million
 
increase in the
 
average balance,
 
partially offset by
 
a $1.8
 
million decrease
related to
 
lower rates
 
paid on
 
new issuances
 
and renewals.
 
The average
 
cost of
 
time deposits
 
in the
 
third quarter
 
of
2025, excluding
 
brokered CDs,
 
decreased 22
 
bps to
 
3.38% when
 
compared to
 
the same
 
period in
 
2024. Excluding
government deposits, the
 
average cost of
 
time deposits for
 
the third quarter
 
of 2025 was 3.39%,
 
compared to 3.53%
for the same period in 2024.
●
A $4.5 million net increase in investment securities and interest-bearing
 
cash balances, consisting of:
o
A $3.9
 
million increase
 
in interest
 
income on
 
debt securities,
 
mainly due
 
to purchases
 
of higher
 
-yielding available-for-
sale debt securities replacing maturities of lower-yielding
 
debt securities.
o
A $0.9 million increase in
 
interest income from interest-bearing
 
cash balances, driven by a $225.9
 
million net increase in
the
 
average balances,
 
which
 
consisted
 
primarily
 
of deposits
 
maintained
 
at
 
the FED,
 
which
 
more
 
than
 
compensated
 
for
the reduction in the federal funds rate.
Partially offset by:
o
A $0.3
 
million decrease
 
in interest
 
income on
 
other investment
 
securities, mainly
 
driven by
 
an $8.2
 
million decrease
 
in
the average balance of FHLB stock.
●
A $3.5 million increase in interest income on loans, consisting of:
o
A
 
$2.2
 
million
 
increase
 
in
 
interest
 
income
 
on
 
commercial
 
and
 
construction
 
loans,
 
driven
 
by
 
an
 
$8.5
 
million
 
increase
mainly
 
associated
 
with
 
a
 
$453.6
 
million
 
increase
 
in
 
the
 
average
 
balance,
 
partially
 
offset
 
by
 
a
 
$6.3
 
million
 
decrease
mainly related to the effect of lower market interest rates
 
on the downward repricing of variable-rate loans.
As
 
of
 
September
 
30,
 
2025,
 
the
 
interest
 
rate
 
on
 
approximately
 
51%
 
of
 
the
 
Corporation’s
 
commercial
 
and
 
construction
loans was tied
 
to variable rates,
 
with 33% based
 
upon Secured
 
Overnight Financing
 
Rate (“SOFR”) of
 
3 months or
 
less,
10% based
 
upon the
 
Prime rate
 
index,
 
and 8%
 
based on
 
other indexes.
 
For the
 
quarter ended
 
September 30,
 
2025, the
average one-month
 
SOFR decreased
 
93 bps,
 
the three-month
 
SOFR decreased
 
88 bps,
 
and the
 
Prime rate
 
decreased 97
bps, when compared to the same period in 2024.
 
o
A $0.7 million increase in interest income on residential mortgage loans, mostly associated with a $57.2 million increase A $0.6 million increase in interest income on consumer loans and finance leases, due to higher yields and higher income
in the average balance.
 
88
o
from late fees, mainly in the
 
auto loans portfolio. This was partially
 
offset by a decrease in interest
 
income from personal
loans and
 
credit cards,
 
driven by
 
a $62.4
 
million decline
 
in the
 
average balance,
 
which more
 
than offset
 
the increase
 
in
interest income
 
on auto
 
loans and
 
finance leases
 
attributable to
 
a $74.5
 
million increase
 
in the
 
average balance,
 
as this
portfolio carries lower average yields than unsecured loans.
Net interest income
 
amounted to $646.2
 
million for the
 
nine-month period
 
ended September 30,
 
2025, an increase
 
of $48.0 million
when compared to $598.2 million for the same period in 2024. The $48.0
 
million increase in net interest income was primarily due to:
●
A $25.4 million decrease in interest expense on interest-bearing liabilities, consisting
 
of:
o
A
$13.5
 
million
 
decrease
 
in
 
interest
 
expense
 
on
 
borrowings,
driven
 
by
 
the
 
aforementioned
 
redemption
 
of
 
junior
subordinated
 
debentures
 
during
 
the second
 
half of
 
2024 and
 
first half
 
of 2025,
 
and $180.0
 
million
 
in FHLB
 
advances,
that matured and were repaid in March 2025.
o
An $11.9 million decrease in interest expense
 
on interest-bearing deposits, consisting of:
-
An
 
$8.5
 
million
 
decrease
 
in
 
interest
 
expense
 
on
 
brokered
 
CDs
 
due
 
to
 
a
 
$5.5
 
million
 
decrease
 
associated
 
with
 
a
$157.0 million
 
decline in
 
the average
 
balance, and
 
a $3.0
 
million decrease
 
mainly associated
 
with new
 
issuances at
lower interest rates than maturing brokered CDs.
-
A $5.4
 
million decrease
 
in interest
 
expense on
 
interest-bearing checking
 
and saving
 
accounts, due
 
to a $7.7
 
million
decrease
 
mainly
 
related
 
to
 
the
 
overall
 
lower
 
interest
 
rate
 
environment,
 
partially
 
offset
 
by
 
a
 
$2.3
 
million
 
increase
associated with
 
a $94.5
 
million increase
 
in the
 
average balance.
 
The average
 
cost of
 
interest-bearing
 
checking and
saving accounts
 
decreased by 11
 
bps to 1.41%
 
for the first
 
nine months of
 
2025 as compared
 
to 1.52% for
 
the same
period
 
in
 
2024,
 
mostly
 
driven
 
by
 
a
 
42
 
bps
 
decrease
 
in
 
government
 
deposits.
 
Excluding
 
government
 
deposits,
 
the
average
 
cost
 
of
 
interest-bearing
 
checking
 
and
 
saving
 
accounts
 
for
 
the
 
first
 
nine
 
months
 
of
 
2025
 
was
 
0.73%,
compared to 0.75% for the same period in 2024.
Partially offset by:
-
A
 
$2.0
 
million
 
increase
 
in
 
interest
 
expense
 
on
 
time
 
deposits,
 
excluding
 
brokered
 
CDs,
 
driven
 
by
 
a
 
$5.5
 
million
increase associated with
 
a $213.8 million
 
increase in the
 
average balance, partially
 
offset by a
 
$3.5 million decrease
related
 
to
 
lower
 
rates
 
paid
 
on
 
new
 
issuances
 
and
 
renewals.
 
The
 
average
 
cost
 
of
 
time
 
deposits
 
for
 
the
 
first
 
nine
months of
 
2025, excluding
 
brokered CDs,
 
decreased 14
 
bps to
 
3.38% as
 
compared to
 
3.52% for
 
the same
 
period in
2024.
 
Excluding
 
government
 
deposits,
 
the
 
average
 
cost
 
of
 
time
 
deposits
 
for
 
the
 
first
 
nine
 
months
 
of
 
2025
 
was
3.38%, compared to 3.43% for the same period in 2024.
●
A $12.2 million net increase in investment securities and interest-bearing
 
cash balances,
 
consisting of:
o
An $8.7
 
million increase
 
in interest income
 
from interest-bearing
 
cash balances,
 
driven by
 
a $401.1
 
million net
 
increase
in the average balances,
 
which consisted primarily of
 
cash balances deposited at the
 
FED, which more than compensated
for the reduction in the federal funds rate.
o
A $3.9
 
million increase
 
in interest
 
income on
 
debt securities,
 
mainly due
 
to purchases
 
of higher
 
-yielding available-for-
sale debt securities replacing maturities of lower-yielding
 
debt securities.
 
Partially offset by:
o
A $0.4
 
million decrease in
 
interest income from
 
other investment securities,
 
mainly driven by
 
a $6.1 million
 
decrease in
the average balance of FHLB stock.
●
A $10.4
 
million increase in interest income on loans, consisting of:
o
A $4.4 million
 
increase in interest income
 
on consumer loans and
 
finance leases, due
 
to higher yields and
 
higher income
from late fees, mainly in the
 
auto loans portfolio. This was partially
 
offset by a decrease in interest
 
income from personal
loans and
 
credit cards,
 
driven by
 
a $54.5
 
million decline
 
in the
 
average balance,
 
which more
 
than offset
 
the increase
 
in
interest income on auto loans and finance leases attributable to a $103.7 million increase in the average balance, as this associated with a $378.7 million increase in the average balance, partially offset by a $16.9 million net decrease due to
portfolio carries lower average yields than unsecured loans.
 
 
 
 
 
89
o
A
 
$3.3
 
million
 
increase
 
in
 
interest
 
income
 
on
 
commercial
 
and
 
construction
 
loans,
 
driven
 
by
 
a
 
$20.2
 
million
 
increase
the effect of lower interest rates on the downward repricing of variable-rate
 
loans.
For
 
the
 
nine-month
 
period
 
ended
 
September
 
30,
 
2025,
 
the
 
average
 
one-month
 
SOFR
 
and
 
three-month
 
SOFR
 
each
decreased 98
 
bps, and
 
the average
 
Prime rate
 
decreased 99
 
bps, compared
 
to the
 
average rates
 
for such
 
indexes for
 
the
nine-month period ended September 30, 2024.
o
A
$2.7 million increase in
 
interest income on residential
 
mortgage loans,
 
mostly associated with a $45.4
 
million increase
in the average balance.
Net interest margin for the
 
third quarter of 2025 increased
 
32 bps to
4.57%, compared to 4.25% for the same period
 
in 2024, and by
34 bps
 
to 4.55%
 
for the
 
first nine
 
months of
 
2025, compared
 
to 4.21%
 
for the
 
same period
 
in 2024.
 
The increase
 
in the
 
net interest
margin
 
mostly reflects
 
a decrease
 
in the
 
cost of
 
funds and
 
a change
 
in asset
 
mix associated
 
with the
 
deployment of
 
cash flows
 
from
lower-yielding
 
investment
 
securities
 
to
 
higher-yielding
 
interest-earning
 
assets.
 
These
 
factors
 
were
 
partially
 
offset
 
by
 
the
 
downward
repricing of variable-rate commercial loans and a lower federal funds rate on
 
cash deposited at the FED.
 
90
Provision for Credit Losses
The provision
 
for credit
 
losses consists of
 
provisions for
 
credit losses on
 
loans and
 
finance leases,
 
unfunded loan
 
commitments, as
well as the debt securities portfolio. The principal changes in the provision
 
for credit losses by main categories follow:
Provision for credit losses for
 
loans and finance leases
The
 
provision
 
for
 
credit
 
losses
 
for
 
loans
 
and
 
finance
 
leases
 
was
 
$18.3
 
million
 
for
 
the
 
third
 
quarter
 
of
 
2025,
 
compared
 
to
 
$16.5
million for the third quarter of 2024.
 
The variances by major portfolio category were as follows:
●
Provision for
 
credit losses
 
for the
 
commercial
 
and construction
 
loan portfolios
 
was an
 
expense of
 
$1.6 million
 
for the
 
third
quarter of 2025, compared to a
 
net benefit of $6.6 million for
 
the third quarter of 2024. The expense
 
recorded during the third
quarter of 2025 was mainly
 
due to C&I loan growth.
 
The net benefit recorded during
 
the third quarter of 2024
 
was associated
with the
 
improved financial
 
condition of
 
certain borrowers
 
and, to
 
a lesser extent,
 
an improvement
 
on the
 
economic outlook
of certain
 
macroeconomic variables,
 
particularly variables
 
associated with
 
commercial real
 
estate property
 
performance and
the forecasted commercial real estate (“CRE”) price index.
●
Provision for credit
 
losses for the residential
 
mortgage loan portfolio
 
was a net benefit
 
of $2.2 million for
 
the third quarter of
2025,
 
compared
 
to
 
a
 
net benefit
 
of
 
$5.5
 
million
 
for
 
the
 
third
 
quarter
 
of
 
2024.
 
The
 
decrease in
 
net
 
benefit
 
was driven
 
by
 
a
lower favorable
 
impact from updated
 
macroeconomic variables, mainly
 
in the projection
 
of the unemployment
 
rate, partially
offset by a net benefit recognized in the third quarter of 2025 as a result of
 
improvements in historical loss experience.
●
Provision for
 
credit losses
 
for the
 
consumer
 
loan and
 
finance lease
 
portfolios
 
was an
 
expense of
 
$18.9 million
 
for the
 
third
quarter of
 
2025, compared
 
to an
 
expense of
 
$28.6
 
million for
 
the third
 
quarter
 
of 2024.
 
The decrease
 
in provision
 
expense
was driven by
 
updated historical loss experience
 
and lower net
 
charge-offs, partially
 
offset by a
 
lower favorable impact
 
from
updated macroeconomic variables, mainly in the projection of the
 
unemployment rate.
The provision
 
for credit losses
 
for loans
 
and finance leases
 
was $63.5
 
million for the
 
first nine months
 
of 2025, compared
 
to $41.3
million for the same period in 2024. The variances by major portfolio
 
category were as follows:
●
Provision
 
for
 
credit losses
 
for
 
the commercial
 
and
 
construction
 
loan
 
portfolios
 
was an
 
expense
 
of $8.0
 
million
 
for
 
the first
nine months
 
of 2025,
 
compared to
 
a net benefit
 
$13.4 million
 
for the same
 
period in
 
2024. The
 
expense recorded
 
during the
first nine months of 2025 was mainly
 
due to C&I loan growth, a deterioration
 
in the economic outlook of the commercial
 
real
estate property
 
performance and
 
forecasted CRE
 
price index,
 
and updated
 
historical prepayment
 
experience.
 
The net
 
benefit
recorded
 
during
 
the
 
first
 
nine
 
months
 
of
 
2024
 
was
 
driven
 
by
 
the
 
aforementioned
 
improved
 
financial
 
condition
 
of
 
certain
borrowers, a recovery
 
of $5.0 million associated
 
with a C&I loan
 
in the Puerto
 
Rico region, and $1.2
 
million in recoveries of
two commercial loans in the Florida region, partially offset
 
by increased volume.
●
Provision for credit losses for the
 
residential mortgage loan portfolio was
 
a benefit of $0.4 million for
 
the first nine months of
2025, compared
 
to a
 
net benefit
 
of $16.6
 
million for
 
the same
 
period in
 
2024. The
 
net benefit
 
recorded during
 
the first
 
nine
months
 
of
 
2024
 
was
 
driven
 
by
 
updated
 
historical
 
loss
 
experience
 
used
 
for
 
determining
 
the
 
ACL
 
estimate
 
resulting
 
in
 
a
downward
 
revision
 
of
 
estimated
 
loss severities
 
and
 
improvements
 
in macroeconomic
 
variables,
 
mainly
 
in the
 
projection
 
of
the unemployment rate, partially offset by newly originated
 
loans.
●
Provision
 
for
 
credit losses
 
for
 
the consumer
 
loan
 
and
 
finance lease
 
portfolios
 
was an
 
expense
 
of $55.9
 
million
 
for
 
the first
nine
 
months
 
of
 
2025,
 
compared
 
to
 
an
 
expense
 
of
 
$71.3
 
million
 
for
 
the
 
same
 
period
 
in
 
2024.
 
The
 
decrease
 
in
 
provision
expense was
 
mainly due
 
to updated
 
historical loss
 
experience and
 
reductions in
 
the unsecured
 
loan portfolio,
 
partially offset
by a lower favorable impact from updated macroeconomic variables, mainly in the projection of the unemployment rate, and Provision for credit losses for unfunded loan commitments and debt securities
a
 
$7.6
 
million
 
decrease
 
in
 
recoveries
 
associated
 
with
 
the
 
bulk
 
sales
 
of
 
fully
 
charged-off
 
loans
 
that
 
took
 
place
 
in
 
the
 
first
quarter of each year.
 
91
The
 
provision
 
for
 
credit losses
 
for
 
unfunded
 
commercial
 
and
 
construction
 
loan
 
commitments and
 
standby
 
letters of
 
credit for
 
the
third quarter
 
and first
 
nine months
 
of 2025
 
was a
 
benefit of
 
$0.8 million
 
and $0.5
 
million, respectively,
 
compared to
 
a net
 
benefit of
$1.0 million and $1.2 million, respectively,
 
for the same periods in 2024.
 
The
 
provision
 
for
 
credit losses
 
for
 
held-to-maturity
 
and available-for
 
-sale debt
 
securities was
 
an expense
 
of $79
 
thousand
 
for
 
the
third quarter of 2025, compared to a net benefit of $0.2 million for the
 
same period in 2024.
 
 
The provision
 
for credit
 
losses for
 
held-to-maturity and
 
available-for-sale debt
 
securities for
 
the first
 
nine months
 
of 2025
 
was an
expense of
 
$34 thousand,
 
compared to
 
a net
 
benefit of
 
$1.1 million
 
for the
 
same period
 
in 2024.
 
The net
 
benefit recorded
 
during the
first
 
nine
 
months
 
of
 
2024
 
was
 
mostly
 
driven
 
by
 
improvements
 
in
 
the
 
underlying
 
updated
 
financial
 
information
 
of
 
a
 
Puerto
 
Rico
municipal bond issuer.
Non-Interest Income
Non-interest
 
income
 
amounted
 
to
 
$30.8
 
million
 
for
 
the
 
third
 
quarter
 
of
 
2025,
 
compared
 
to
 
$32.5
 
million
 
for
 
the
 
same
 
period
 
in
2024.
 
The $1.7
 
million
 
decrease in
 
non-interest
 
income
 
was driven
 
by a
 
$1.5 million
 
decrease in
 
other
 
non-interest
 
income,
 
mainly
related to a $0.6
 
million decrease in realized
 
gains from purchased
 
income tax credits
 
and $0.8 million in
 
insurance proceeds received
in the third quarter of 2024 related to a 2020 outstanding insurance
 
claim.
Non-interest
 
income for
 
the nine-month
 
period ended
 
September 30,
 
2025 amounted
 
to $97.5
 
million, compared
 
to $98.5
 
million
for the same period in 2024. The $1.0 million decrease in non-interest income was primarily
 
due to:
●
A $1.7
 
million decrease
 
in other
 
non-interest income,
 
driven by
 
$1.5 million
 
in insurance
 
proceeds received
 
during the
 
first
nine months of 2024, which include the aforementioned proceeds of
 
$0.8 million received in the third quarter of 2024.
Partially offset by:
●
A $0.4 million
 
increase in revenues
 
from mortgage
 
banking activities, driven
 
by an increase
 
in the net
 
realized gain
 
on sales
of residential
 
mortgage loans
 
in the
 
secondary market.
 
During the
 
first nine
 
months of
 
2025 and
 
2024, net
 
realized gains
 
of
$4.8 million
 
and $4.3 million,
 
respectively,
 
were recognized as
 
a result of
 
GNMA securitization
 
transactions and
 
whole loan
sales to U.S. GSEs amounting to $129.0 million and $113.2
 
million, respectively.
●
A $0.4 million increase in card and processing income due to higher transactional
 
volumes.
 
92
Non-Interest Expenses
Non-interest
 
expenses for
 
the quarter
 
ended September
 
30, 2025
 
amounted to
 
$124.9 million,
 
compared to
 
$122.9 million
 
for the
same period in 2024.
 
The efficiency ratio
 
for the third quarter of
 
2025 was 50.22%, compared
 
to 52.41% for the
 
third quarter of 2024.
Non-interest expenses for
 
the third quarter of
 
2025 include a $2.3
 
million ERC, net of $0.3
 
million in related commissions
 
.
 
See “Non-
GAAP Financial Measures
 
and Reconciliations”
 
above for additional
 
information. On
 
a non-GAAP basis,
 
excluding the
 
effect of
 
this
Special Item, adjusted non-interest expenses increased by $4.3 million
 
primarily due to:
●
A $3.0
 
million
 
increase in
 
employees’
 
compensation
 
and benefits
 
expenses, of
 
which $1.1
 
million was
 
related
 
to annual
salary merit increases and $0.7 million to bonus incentives.
●
A
 
$2.3
 
million
 
unfavorable
 
variance
 
in
 
net
 
loss
 
(gain)
 
on
 
OREO
 
operations
 
mainly
 
due
 
to
 
a
 
$2.8
 
million
 
valuation
adjustment recorded during the third
 
quarter of 2025 in connection with ongoing
 
litigation which could result in a potential
loss of title of a commercial OREO property in the Virgin
 
Islands region.
Partially offset by:
●
A
 
$1.4
 
million
 
decrease
 
in
 
other
 
non-interest
 
expenses,
 
mainly
 
due
 
to
 
a
 
$0.6
 
million
 
decrease
 
in
 
the
 
amortization
 
of
intangible assets,
 
of which
 
$0.3 million
 
were attributable
 
to core deposit
 
intangible assets
 
related to
 
non-interest checking
accounts
 
from
 
the
 
Banco
 
Santander
 
Puerto
 
Rico
 
acquisition,
 
which
 
were
 
fully
 
amortized
 
in
 
2025,
 
and
 
a
 
$0.4
 
million
decrease in charges for operational and fraud losses.
 
Non-interest
 
expenses
 
for
 
the
 
nine-month
 
period
 
ended
 
September
 
30,
 
2025
 
amounted
 
to
 
$371.3
 
million,
 
compared
 
to
 
$362.5
million for
 
the same
 
period in
 
2024. The
 
efficiency ratio
 
for the
 
first nine
 
months of
 
2025 was
 
49.92%, compared
 
to 52.03%
 
for the
same
 
period
 
in
 
2024.
 
Non-interest
 
expenses
 
for
 
the
 
nine-month
 
period
 
ended
 
September
 
30,
 
2025
 
include
 
the
 
aforementioned
 
$2.3
million
 
ERC, while
 
non-interest
 
expenses
 
for
 
the
 
same
 
period
 
in
 
2024
 
include
 
the $1.
 
1
 
million
 
additional
 
FDIC special
 
assessment
expense.
 
See
 
“Non-GAAP
 
Financial
 
Measures
 
and
 
Reconciliations”
 
above
 
for
 
additional
 
information.
 
On
 
a
 
non-GAAP
 
basis,
excluding the effect of these Special Items, adjusted non-interest
 
expenses
 
increased by $12.2 million primarily due to:
●
An $8.3
 
million
 
increase
 
in employees’
 
compensation
 
and benefits
 
expenses,
 
driven by
 
a $3.7
 
million
 
increase
 
in bonus
incentives,
 
which
 
includes
 
a
 
$1.2
 
million
 
increase
 
in
 
stock-based
 
compensation
 
expense,
 
of
 
which
 
$0.4
 
million
 
was
associated with retirement-eligible employees; and annual salary merit
 
increases.
●
A
 
$5.7
 
million
 
unfavorable
 
variance
 
in
 
net
 
loss
 
(gain)
 
on OREO
 
operations,
 
driven
 
by the
 
aforementioned
 
$2.8
 
million
valuation
 
adjustment recorded
 
during
 
the third
 
quarter of
 
2025,
 
a $2.3
 
million realized
 
gain on
 
the sale
 
of a
 
commercial
real estate OREO property in the Puerto Rico region during the second quarter
 
of 2024, and a decrease in net realized gains
on sales of residential OREO properties in the Puerto Rico region.
●
A $1.5 million
 
increase in taxes, other
 
than income taxes,
 
primarily related to
 
higher municipal license
 
taxes related to
 
the
increase in revenues.
●
A
 
$1.5
 
million
 
increase
 
in
 
occupancy
 
and
 
equipment
 
expenses,
 
primarily
 
reflecting
 
increases
 
in
 
software
 
maintenance
charges.
Partially offset by:
●
A $2.6
 
million
 
decrease
 
in professional
 
service
 
fees,
 
mainly
 
due
 
to
 
a $3.1
 
million
 
decrease
 
in
 
consulting
 
fees
 
driven by
information technology
 
infrastructure conversion
 
costs and enhancements
 
during the
 
first nine months
 
of 2024
 
and a $1.1
million
 
decrease
 
in
 
collections,
 
appraisals
 
and
 
other
 
credit-related
 
fees,
 
partially
 
offset
 
by
 
a
 
$1.4
 
million
 
increase
 
in
outsourcing fees.
●
A $1.7
 
million decrease
 
in business
 
promotion
 
expenses as
 
a result
 
of the
 
rescheduling of
 
certain marketing
 
initiatives to
the fourth quarter of 2025.
●
A
 
$1.2
 
million
 
decrease
 
in
 
other
 
non-interest
 
expenses,
 
mainly
 
due
 
to
 
a
 
$1.8
 
million
 
decrease
 
in
 
the
 
amortization
 
of
intangible assets, of
 
which $1.2 million
 
were attributable to core
 
deposit intangible assets
 
related to savings
 
accounts from
the Banco
 
Santander Puerto
 
Rico acquisition
 
which were
 
fully amortized
 
in 2024;
 
and a
 
$1.7
 
million decrease
 
in the
 
cost
of institutional insurance policies; partially offset by
 
a $2.0 million increase in charges for operational and fraud losses.
 
 
93
Income Taxes
For the quarter
 
and nine-month period
 
ended September 30,
 
2025, the Corporation
 
recorded an income
 
tax expense of
 
$5.7 million
and
 
$51.6
 
million,
 
respectively,
 
compared
 
to
 
an
 
income
 
tax
 
expense
 
of $22.7
 
million
 
and
 
$72.2
 
million,
 
respectively,
 
for
 
the
 
same
periods
 
in
 
2024.
 
The
 
results
 
for
 
the
 
quarter
 
and
 
nine-month
 
period
 
ended
 
September
 
30,
 
2025
 
include
 
a
 
one-time
 
reversal
 
of
approximately $16.6
 
million in valuation
 
allowance related
 
to deferred
 
tax assets primarily
 
associated with NOL
 
carryforwards at
 
the
holding company
 
level, which reflects
 
the Corporation’s
 
expectation of realizing
 
these tax benefits
 
under the new
 
election established
by Act 65-2025.
 
For further details,
 
see “Non-GAAP Financial
 
Measures and Reconciliations”
 
above and Note
 
14 – “Income
 
Taxes”.
The
 
decrease
 
in
 
income
 
tax
 
expense
 
for
 
the
 
third
 
quarter
 
and
 
nine-month
 
period
 
ended
 
September
 
30,
 
2025
 
was
 
driven
 
by
 
the
aforementioned
 
one-time reversal
 
of approximately
 
$16.6 million
 
in valuation
 
allowance and
 
a lower
 
estimated
 
annual effective
 
tax
rate due to a higher proportion of exempt to taxable income.
The
 
Corporation’s
 
estimated
 
annual
 
effective
 
tax
 
rate,
 
excluding
 
discrete
 
items,
 
decreased
 
to
 
22.2%
 
for
 
the
 
first
 
nine
 
months
 
of
2025,
 
compared to
 
24.5% for
 
the comparable
 
period in
 
2024. See
 
Note 14
 
– “Income
 
Taxes”
 
to the
 
unaudited consolidated
 
financial
statements herein for additional information.
 
As of
 
September
 
30,
 
2025,
 
the Corporation
 
had
 
a net
 
deferred tax
 
asset of
 
$146.9
 
million, net
 
of a
 
valuation
 
allowance of
 
$80.8
million,
 
compared to
 
a net
 
deferred tax
 
asset of
 
$136.4
 
million,
 
net of
 
a valuation
 
allowance of
 
$119.1
 
million,
 
as of
 
December 31,
2024.
 
The increase in the net
 
deferred tax asset was driven
 
by the aforementioned
 
one-time reversal of approximately
 
$16.6 million in
valuation
 
allowance.
 
Meanwhile,
 
the
 
decrease
 
in
 
the
 
valuation
 
allowance
 
was
 
primarily
 
related
 
to
 
changes
 
in
 
the
 
market
 
value
 
of
available-for-sale
 
debt securities,
 
which resulted
 
in an
 
equal change
 
in the
 
net deferred
 
tax asset
 
without
 
impacting
 
earnings as
 
they
are
 
fully
 
reserved
 
as
 
the
 
Corporation
 
does
 
not
 
expect
 
to
 
realize
 
such
 
benefits,
 
and
 
the
 
aforementioned
 
one-time
 
reversal
 
of
approximately $16.6 million.
Assets
 
The Corporation’s
 
total assets were
 
$19.3 billion as
 
of September
 
30, 2025, an
 
increase of $28.4
 
million from December
 
31, 2024,
primarily related to an increase in total loans and an increase in the fair value of available-for-sale debt securities due to changes in Loans Receivable, including Loans Held for Sale
market
 
interest
 
rates,
 
partially
 
offset
 
by
 
a
 
decrease
 
in
 
cash
 
and
 
cash
 
equivalents
 
resulting
 
from
 
capital
 
deployment
 
actions
 
and
 
the
repayment of long-term borrowings.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
94
As of
 
September 30,
 
2025, the
 
Corporation’s
 
total loan
 
portfolio before
 
the ACL
 
amounted to
 
$13.1 billion,
 
an increase
 
of $299.4
million
 
compared
 
to December
 
31, 2024,
 
of which
 
$263.1 million
 
was in
 
commercial
 
and construction
 
loans. In
 
the Florida
 
region,
commercial and
 
construction loans
 
increased by
 
$189.3 million,
 
of which
 
$122.7 million
 
was in
 
C&I loans
 
and $86.1
 
million was
 
in
commercial mortgage loans.
 
In the Virgin
 
Islands region, commercial and construction
 
loans increased by $42.0 million, in
 
part due to
a $28.4
 
million disbursement
 
of a
 
government line
 
of credit.
 
In the
 
Puerto Rico
 
region, commercial
 
and construction
 
loans increased
by $31.8
 
million driven
 
by the
 
origination of
 
five C&I
 
term loans,
 
each in
 
excess of
 
$15 million,
 
that increased
 
the portfolio
 
balance
by
 
$131.2
 
million
 
and
 
a
 
$39.5
 
million
 
increase
 
in
 
construction
 
loans;
 
partially
 
offset
 
by
 
the
 
payoff
 
of
 
a
 
$73.8
 
million
 
commercial
mortgage loan in the hospitality industry and a $64.5 million reduction
 
in the balance of floor plan lines of credit.
As of
 
September
 
30,
 
2025,
 
the Corporation’s
 
loans
 
held-for-investment
 
portfolio
 
was
 
comprised
 
of
 
commercial
 
and
 
construction
loans (50%),
 
consumer loans
 
and finance
 
leases (28%),
 
and residential
 
real estate
 
loans (22%).
 
Of the
 
total gross
 
loan portfolio
 
held
for investment
 
of $13.0
 
billion as
 
of September
 
30, 2025,
 
the Corporation
 
had credit
 
risk concentration
 
of approximately
 
77% in
 
the
Puerto Rico region,
 
19% in the
 
United States region
 
(mainly in the
 
state of Florida),
 
and 4% in
 
the Virgin
 
Islands region, as
 
shown in
the following table:
As of September 30, 2025
Puerto Rico
Virgin Islands
United States
Total
(In thousands)
Residential mortgage loans
$
2,214,658
$
152,360
$
522,063
$
2,889,081
Construction loans
221,146
14,167
24,550
259,863
Commercial mortgage loans
1,692,248
72,933
784,194
2,549,375
C&I loans
2,292,945
158,471
1,162,825
3,614,241
 
Total commercial loans
4,206,339
245,571
1,971,569
6,423,479
Consumer loans and finance leases
3,662,387
67,900
5,837
3,736,124
 
Total loans held for investment,
 
gross
$
10,083,384
$
465,831
$
2,499,469
$
13,048,684
Loans held for sale
12,546
-
-
12,546
 
Total loans, gross
$
10,095,930
$
465,831
$
2,499,469
$
13,061,230
As of December 31, 2024
Puerto Rico
Virgin Islands
United States
Total
(In thousands)
Residential mortgage loans
$
2,166,980
$
156,225
$
505,226
$
2,828,431
Construction loans
181,607
2,820
43,969
228,396
Commercial mortgage loans
1,800,445
67,449
698,090
2,565,984
C&I loans
2,192,468
133,407
1,040,163
3,366,038
 
Total commercial loans
4,174,520
203,676
1,782,222
6,160,418
Consumer loans and finance leases
3,680,628
69,577
7,502
3,757,707
 
Total loans held for investment,
 
gross
$
10,022,128
$
429,478
$
2,294,950
$
12,746,556
Loans held for sale
14,558
434
284
15,276
 
Total loans, gross
$
10,036,686
$
429,912
$
2,295,234
$
12,761,832
See “Risk Management –
 
Exposure to Puerto Rico Government”
 
and “Risk Management –
 
Exposure to USVI Government”
 
below
for information on the Corporation’s
 
credit exposure to PR and USVI government entities.
As of
 
September
 
30, 2025,
 
the Corporation’s
 
total commercial
 
mortgage
 
loan
 
exposure amounted
 
to $2.5
 
billion,
 
or 20%
 
of the
total loan portfolio. In terms of
 
geography, $1.7 billion
 
of the exposure was in the Puerto
 
Rico region, $0.7 billion of the exposure
 
was
in the
 
Florida region,
 
and $0.1
 
billion of
 
the exposure
 
was in
 
the Virgin
 
Islands region.
 
The $1.7
 
billion exposure
 
in the
 
Puerto Rico
region was
 
comprised mainly
 
of 40%
 
in the
 
retail industry,
 
25% in
 
office real
 
estate, and
 
19% in
 
the hotel
 
industry.
 
The $0.7
 
billion
exposure
 
in the
 
Florida region
 
was comprised
 
mainly of
 
34% in
 
the retail
 
industry,
 
22% in
 
the hotel
 
industry,
 
and 7%
 
in office
 
real
estate.
 
Of
 
the
 
Corporation’s
 
total
 
commercial
 
mortgage
 
loan
 
exposure
 
of
 
$2.5
 
billion,
 
$508.7
 
million
 
matures
 
within
 
the
 
next
 
12
months and has a weighted-average
 
interest rate of approximately 5.76%.
 
Commercial mortgage loan exposure
 
in the office real estate
industry,
 
which
 
matures
 
within
 
the
 
next
 
12
 
months,
 
amounted
 
to
 
$109.5
 
million
 
and
 
has
 
a
 
weighted-average
 
interest
 
rate
 
of
approximately 5.53%.
As
 
of
 
September
 
30,
 
2025
 
and
 
December
 
31,
 
2024,
 
the
 
Corporation’s
 
total
 
exposure
 
to
 
shared
 
national
 
credit
 
(“SNC”)
 
loans
(including
 
unused
 
commitments)
 
amounted
 
to $1.2
 
billion
 
and
 
$1.3
 
billion,
 
respectively.
 
As of
 
September
 
30,
 
2025,
 
approximately
$372.3 million of the SNC exposure is related to the portfolio in the Puerto Rico region and $837.7 million is related to the portfolio in First BanCorp.
the Florida region.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
95
Loan Production
relies primarily on its retail network of branches to originate residential and consumer loans. The Corporation may
supplement
 
its residential
 
mortgage originations
 
with wholesale
 
servicing released
 
mortgage loan
 
purchases from
 
mortgage bankers.
The
 
Corporation
 
manages
 
its
 
construction
 
and
 
commercial
 
loan
 
originations
 
through
 
centralized
 
units
 
and
 
most
 
of
 
its
 
originations
come
 
from
 
existing
 
customers,
 
as
 
well
 
as
 
through
 
referrals
 
and
 
direct
 
solicitations.
 
Auto
 
loans
 
and
 
finance
 
leases
 
originations
 
rely
primarily on relationships with auto dealers and dedicated sales professionals who
 
serve selected locations to facilitate originations.
 
The
 
following
 
table
 
provides
 
a
 
breakdown
 
of
 
First
 
BanCorp.’s
 
loan
 
production,
 
including
 
purchases,
 
refinancings,
 
renewals
 
and
draws from existing revolving and non-revolving commitments by geographic
 
segment,
 
for the indicated periods:
Quarter Ended September 30,
Nine-Month Period Ended September 30,
2025
2024
2025
2024
(In thousands)
Puerto Rico:
 
Residential mortgage
$
111,065
$
94,258
$
310,651
$
254,525
 
Construction
30,645
33,898
82,643
108,008
 
Commercial mortgage
50,101
63,646
151,025
165,400
 
C&I
494,719
419,673
1,340,793
1,162,239
 
Consumer
362,907
406,448
1,115,566
1,204,999
 
Total loan production
$
1,049,437
$
1,017,923
$
3,000,678
$
2,895,171
Virgin Islands:
 
Residential mortgage
$
1,314
$
791
$
4,847
$
2,913
 
Construction
1,286
131
11,384
293
 
Commercial mortgage
-
6,949
9,192
7,372
 
C&I
18,940
18,447
77,326
41,907
 
Consumer
8,032
9,995
22,110
26,788
 
Total loan production
$
29,572
$
36,313
$
124,859
$
79,273
Florida:
 
Residential mortgage
$
19,223
$
21,864
$
56,693
$
69,849
 
Construction
3,022
10,510
25,505
31,165
 
Commercial mortgage
96,729
30,539
175,518
108,472
 
C&I
172,679
184,936
576,249
576,189
 
Consumer
154
530
1,822
3,957
 
Total loan production
$
291,807
$
248,379
$
835,787
$
789,632
Total:
 
Residential mortgage
$
131,602
$
116,913
$
372,191
$
327,287
 
Construction
34,953
44,539
119,532
139,466
 
Commercial mortgage
146,830
101,134
335,735
281,244
 
C&I
686,338
623,056
1,994,368
1,780,335
 
Consumer
371,093
416,973
1,139,498
1,235,744
 
Total loan production
$
1,370,816
$
1,302,615
$
3,961,324
$
3,764,076
 
96
Commercial
 
and
 
construction
 
loan
 
originations
 
(excluding
 
government
 
loans)
 
for
 
the
 
quarter
 
and
 
nine-month
 
period
 
ended
September
 
30,
 
2025
 
amounted
 
to
 
$785.5
 
million
 
and
 
$2.3
 
billion,
 
respectively,
 
compared
 
to
 
$718.9
 
million
 
and
 
$2.1
 
billion,
respectively,
 
for the same
 
periods in 2024.
 
The increase for
 
the third quarter
 
of 2025 was
 
mainly related
 
to increases of
 
$46.4 million
in the
 
Florida region
 
and $26.9
 
million in
 
the Puerto
 
Rico region.
 
The increase
 
for the
 
nine-month period
 
ended September
 
30, 2025
was mainly
 
related to
 
a $127.1
 
million increase
 
in the
 
Puerto Rico
 
region driven
 
by higher
 
utilization of
 
C&I lines
 
of credit
 
and the
origination of
 
five C&I relationships,
 
each in excess
 
of $25 million,
 
with an aggregate
 
balance of $161.7
 
million; partially offset
 
by a
$141.7 million decrease
 
in the floor plan
 
portfolio; and a $61.5
 
million increase in the
 
Florida region, mainly
 
in commercial mortgage
loans.
Government
 
loan
 
originations
 
for
 
the
 
quarter
 
and
 
nine-month
 
period
 
ended
 
September
 
30,
 
2025
 
amounted
 
to
 
$82.7
 
million
 
and
$148.3 million,
 
respectively,
 
compared to
 
$49.7 million
 
and $101.1
 
million, respectively,
 
for the
 
same periods
 
in 2024.
 
The increase
was driven
 
by multiple
 
originations to
 
municipalities in
 
Puerto Rico
 
totaling $54.1
 
million for
 
the third
 
quarter of
 
2025, compared
 
to
$20.2
 
million for the
 
third quarter of
 
2024. For the
 
first nine months
 
of 2025, the
 
increase was mainly
 
related to the
 
higher utilization
of a line of credit in the Virgin
 
Islands.
Originations of auto
 
loans (including finance
 
leases) for the
 
quarter and nine-month
 
period ended September
 
30, 2025 amounted
 
to
$211.3
 
million
 
and
 
$668.3
 
million,
 
respectively,
 
compared
 
to
 
$238.8
 
million
 
and
 
$700.8
 
million,
 
respectively,
 
for
 
the
 
comparable
periods in 2024. Other consumer
 
loan originations,
 
other than credit cards, for
 
the quarter and nine-month period
 
ended September 30,
2025 amounted
 
to $55.7 million
 
and $156.8 million,
 
respectively,
 
compared to $60.9
 
million and $185.4
 
million, respectively,
 
for the
comparable periods in
 
2024. Most of
 
the decreases in auto
 
loan originations and
 
other consumer loan originations
 
for the third quarter
and first nine
 
months
of 2025, as
 
compared with the
 
same periods in
 
2024, were in
 
the Puerto Rico
 
region. The utilization
 
activity on
the outstanding credit card
 
portfolio for the quarter
 
and nine-month period ended
 
September 30, 2025 amounted
 
to $104.2 million and
$314.4 million, respectively,
 
compared to $117.2 million and $349.5 million, respectively,
 
for the comparable periods in 2024.
 
97
Investment Activities
As
 
part
 
of
 
its
 
liquidity,
 
revenue
 
diversification,
 
and
 
interest
 
rate
 
risk
 
management
 
strategies,
 
First
 
BanCorp.
 
maintains
 
a
 
debt
securities portfolio classified as available for sale or held to maturity.
 
Substantially
 
all
 
of
 
the
 
Corporation’s
 
available-for-sale
 
debt
 
securities
 
portfolio
 
was
 
invested
 
in
 
U.S.
 
government
 
and
 
agencies
debentures
 
and fixed-rate
 
GSEs’ MBS.
 
The Corporation’s
 
total available
 
-for-sale
 
debt securities
 
portfolio
 
as of
 
September 30,
 
2025
amounted to
 
$4.6 billion, a
 
$33.0 million
 
increase from December
 
31, 2024. The
 
increase was driven
 
by $994.8 million
 
in purchases,
of which
 
$592.8 million
 
were U.S.
 
Treasury
 
securities with
 
an average
 
yield of
 
4.15% and
 
$402.0 million
 
were U.S.
 
agencies MBS
with an average yield of
 
5.24%, including $384.2 million of
 
residential MBS; and the $174.1
 
million increase in fair value
 
attributable
to
 
changes
 
in
 
market
 
interest
 
rates.
 
These
 
factors
 
were
 
partially
 
offset
 
by
 
$788.0
 
million
 
in
 
maturities,
 
mainly
 
U.S.
 
agencies
debentures
 
and
 
U.S.
 
Treasury
 
securities;
 
and
 
$346.7
 
million
 
in
 
principal
 
repayments
 
of
 
U.S.
 
agencies
 
MBS
 
and
 
debentures.
 
As
 
of
September
 
30,
 
2025,
 
the
 
Corporation
 
had
 
a
 
net
 
unrealized
 
loss
 
on
 
available-for-sale
 
debt
 
securities
 
of
 
$385.5
 
million.
 
This
 
net
unrealized
 
loss
 
is
 
primarily
 
attributable
 
to
 
instruments
 
on
 
books
 
carrying
 
a
 
lower
 
interest
 
rate
 
than
 
market
 
rates.
 
The
 
Corporation
expects
 
that
 
this
 
unrealized
 
loss
 
will
 
reverse
 
over
 
time
 
and
 
it
 
is
 
likely
 
that
 
it
 
will
 
not
 
be
 
required
 
to
 
sell
 
the
 
securities
 
before
 
their
anticipated
 
recovery.
 
The Corporation
 
expects the
 
portfolio will
 
continue
 
to decrease
 
and the
 
accumulated other
 
comprehensive loss
will decrease accordingly,
 
excluding the impact of market interest rates.
 
Held-to-maturity
 
debt
 
securities
 
include
 
fixed-rate
 
GSEs’
 
MBS
 
with
 
a
 
carrying
 
value
 
of
 
$190.8
 
million
 
(fair
 
value
 
of
 
$184.1
million) as of
 
September 30, 2025,
 
compared to $225.3
 
million as of
 
December 31, 2024.
 
The decrease in
 
GSEs’ MBS was driven
 
by
$34.7 million in principal repayments. Held-to-maturity
 
debt securities also include $82.6 million as of September
 
30, 2025, compared
to $92.4 million as of December 31, 2024, of financing
 
arrangements with the government issued in bond form, which
 
the Corporation
accounts
 
for
 
as
 
securities,
 
but
 
which
 
were
 
underwritten
 
as
 
loans
 
with
 
features
 
that
 
are
 
typically
 
found
 
in
 
commercial
 
loans.
 
As
 
of
September 30, 2025, approximately 57%
 
of the Corporation’s
 
government bonds consisted of obligations
 
issued by three of the largest
municipalities in Puerto Rico.
As
 
of
 
September
 
30,
 
2025,
 
cash
 
inflows
 
expected
 
to
 
be
 
received
 
during
 
the
 
next
 
twelve
 
months
 
from
 
maturities
 
and
 
expected
prepayments of
 
the debt securities
 
portfolio (excluding
 
U.S. Treasury
 
securities) amounted
 
to approximately
 
$1.4 billion
 
and have
 
an
average yield of 1.66%,
 
of which $0.6 billion are
 
expected to be received during
 
the remainder of 2025. These
 
inflows are expected to
be redeployed
 
to fund
 
loan growth,
 
reinvested into
 
higher-yielding
 
securities, or
 
used to
 
repay maturing
 
brokered CDs.
 
See Note
 
2 –
“Debt Securities” for information and details about the Corporation’s
 
available-for-sale debt securities portfolio.
See
 
“Risk Management
 
–
 
Exposure
 
to Puerto
 
Rico
 
Government”
 
below
 
for
 
information
 
and
 
details
 
about
 
the Corporation’s
 
total
direct exposure
 
to the
 
Puerto Rico
 
government, including
 
municipalities,
 
and “Risk
 
Management
 
– Credit
 
Risk Management”
 
below
and Note 2 – “Debt Securities” for the ACL of the exposure to Puerto
 
Rico municipal bonds.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
98
 
The carrying
 
values of
 
debt securities
 
as of
 
September 30,
 
2025 and
 
December 31,
 
2024 by
 
contractual maturity
 
(excluding MBS)
and weighted-average yield, are shown below:
September 30, 2025
December 31, 2024
Weighted-
Average Yield
 
%
Carrying
Amount
Weighted-
Average Yield
 
%
Carrying
Amount
(Dollars in thousands)
Available-for-sale
 
debt securities, at fair value
U.S government and agencies obligations:
Due within one year
2.09
$
1,265,813
0.79
$
1,127,041
Due after one year through five years
0.92
483,554
0.96
764,679
Due after ten years
4.47
6,850
4.73
7,800
1.77
1,756,217
(1)
0.87
1,899,520
Puerto Rico government obligation:
Due after ten years
-
1,579
-
1,620
MBS:
Residential
 
2.15
2,641,755
1.79
2,481,253
Commercial
2.37
198,252
2.12
181,909
Total MBS
2.16
2,840,007
1.82
2,663,162
Other:
 
Due within one year
2.34
500
2.32
1,000
Total available-for-sale
 
debt securities, at fair value
2.02
4,598,303
1.45
4,565,302
Held-to-maturity debt securities, at amortized cost
Government bonds:
 
Due within one year
5.11
1,017
5.07
2,214
 
Due after one year through five years
7.28
56,379
7.33
61,289
 
Due after five years through ten years
5.06
10,313
5.79
13,184
 
Due after ten years
7.77
14,870
8.07
15,755
7.06
82,579
7.18
92,442
ACL on held-to-maturity debt securities
-
(698)
-
(802)
MBS:
Residential
3.87
116,576
3.86
129,319
Commercial
2.13
74,208
3.88
96,025
Total MBS
3.20
190,784
3.87
225,344
 
Total held-to-maturity
 
debt securities, at amortized cost
4.36
272,665
4.83
316,984
Total debt securities
2.14
$
4,870,968
1.65
$
4,882,286
(1)
Includes approximately $612.6 million in callable
 
debt securities with an average yield of 0.92%,
 
of which approximately 57% were purchased
 
at a discount and 4% at a premium. See “Risk
Management” below
 
for further
 
analysis of
 
the effects
 
of changing
 
interest rates
 
on the
 
Corporation’s
 
net interest
 
income and
 
the Corporation’s
 
interest risk
 
management strategies.
 
Also,
refer to Note 2 - “Debt Securities” for additional information regarding
 
the Corporation’s debt securities portfolio.
 
99
RISK MANAGEMENT
General
Risks
 
are
 
inherent
 
in
 
virtually
 
all
 
aspects
 
of
 
the
 
Corporation’s
 
business
 
activities
 
and
 
operations.
 
Consequently,
 
effective
 
risk
management
 
is
 
fundamental
 
to
 
the
 
success
 
of
 
the
 
Corporation.
 
The
 
primary
 
goals
 
of
 
risk
 
management
 
are
 
to
 
ensure
 
that
 
the
Corporation’s
 
risk-taking activities are
 
consistent with the
 
Corporation’s
 
objectives and risk
 
tolerance, and that
 
there is an appropriate
balance between risks and rewards to maximize stockholder value.
The
 
Corporation
 
has
 
in
 
place
 
a
 
risk
 
management
 
framework
 
to
 
monitor,
 
evaluate
 
and
 
manage
 
the
 
principal
 
risks
 
assumed
 
in
conducting its activities. First BanCorp.’s
 
business is subject to eleven
 
broad categories of risks: (i) liquidity
 
risk; (ii) interest rate risk;
(iii) market risk; (iv)
 
credit risk; (v) operational
 
risk; (vi) legal and
 
regulatory risk; (vii)
 
reputational risk; (viii) model
 
risk; (ix) capital
risk; (x)
 
strategic risk;
 
and (xi)
 
information technology
 
risk. First
 
BanCorp. has
 
adopted policies
 
and procedures
 
designed to
 
identify
and manage the risks to which the Corporation is exposed.
The
 
Corporation’s
 
risk
 
management
 
policies
 
are
 
described
 
below,
 
as
 
well
 
as
 
in
 
Part
 
II,
 
Item
 
7,
 
“Management’s
 
Discussion
 
and
Analysis of Financial Condition and Results of Operations,” in the 2024
 
Annual Report on Form 10-K.
Liquidity Risk and Capital Adequacy
 
Liquidity
 
risk
 
involves
 
the
 
ongoing
 
ability
 
to
 
accommodate
 
liability
 
maturities
 
and
 
deposit
 
withdrawals,
 
fund
 
asset growth
 
and
business operations,
 
and meet
 
contractual obligations
 
through unconstrained
 
access to funding
 
at reasonable
 
market rates. Liquidity
management
 
involves
 
forecasting
 
funding
 
requirements
 
and
 
maintaining
 
sufficient
 
capacity
 
to
 
meet
 
liquidity
 
needs
 
and
accommodate
 
fluctuations
 
in
 
asset
 
and
 
liability
 
levels
 
due
 
to
 
changes
 
in
 
the
 
Corporation’s
 
business
 
operations
 
or
 
unanticipated
events.
 
 
The Corporation
 
manages liquidity at
 
two levels. The
 
first is the
 
liquidity of
 
the parent
 
company,
 
or First BanCorp.,
 
which is the
holding
 
company
 
that
 
owns
 
the
 
banking
 
and
 
non-banking
 
subsidiaries.
 
The
 
second
 
is
 
the
 
liquidity
 
of
 
the
 
banking
 
subsidiary,
FirstBank.
 
The
 
Asset
 
and
 
Liability
 
Committee
 
of
 
the
 
Corporation’s
 
Board
 
of
 
Directors
 
is
 
responsible
 
for
 
overseeing
 
management’s
establishment
 
of
 
the
 
Corporation’s
 
liquidity
 
policy,
 
as
 
well
 
as
 
approving
 
operating
 
and
 
contingency
 
procedures
 
and
 
monitoring
liquidity
 
on
 
an
 
ongoing
 
basis.
 
The
 
Management’s
 
Investment
 
and
 
Asset
 
Liability
 
Committee
 
(“MIALCO”),
 
which
 
reports
 
to
 
the
Board’s
 
Asset
 
and
 
Liability
 
Committee,
 
uses
 
measures
 
of
 
liquidity
 
developed
 
by
 
management
 
that
 
involve
 
the
 
use
 
of
 
several
assumptions
 
to
 
review
 
the
 
Corporation’s
 
liquidity
 
position
 
on
 
a
 
monthly
 
basis.
 
The
 
MIALCO
 
oversees
 
liquidity
 
management,
interest rate risk, market risk, and other related matters.
 
The MIALCO is composed of
 
senior management officers, including
 
the Chief Executive Officer,
 
the Chief Financial Officer,
 
the
Chief Risk
 
Officer,
 
the Treasurer,
 
the Chief
 
Consumer Officer
 
and Corporate
 
Chief of
 
Staff, the
 
Corporate
 
Strategic and
 
Business
Development
 
Director,
 
the
 
Treasury
 
and
 
Investments
 
Risk
 
Manager,
 
the
 
Financial
 
Planning
 
and
 
Asset
 
and
 
Liability
 
Management
(“ALM”)
 
Director,
 
and
 
the
 
Chief
 
Operating
 
Officer.
 
The
 
Treasury
 
and
 
Investments
 
Division
 
is
 
responsible
 
for
 
planning
 
and
executing the Corporation’s
 
funding activities and
 
strategy, monitoring
 
liquidity availability daily,
 
and reviewing liquidity
 
measures
on
 
a
 
weekly
 
basis.
 
The
 
Investments
 
Accounting
 
and
 
Operations
 
area
 
of
 
the
 
Corporate
 
Controller’s
 
Department
 
is
 
responsible
 
for
calculating the
 
liquidity measurements
 
used by
 
the Treasury
 
and Investment
 
Division to
 
review the
 
Corporation’s
 
liquidity position
on a weekly basis. The Financial Planning and ALM Division is responsible
 
for operating the liquidity and interest rate risk models.
To
 
ensure
 
adequate liquidity
 
through the
 
full range
 
of potential
 
operating
 
environments and
 
market conditions,
 
the Corporation
conducts
 
its
 
liquidity
 
management
 
and
 
business
 
activities
 
in
 
a
 
manner
 
that
 
is
 
intended
 
to
 
preserve
 
and
 
enhance
 
funding
 
stability,
flexibility,
 
and
 
diversity.
 
Key
 
components
 
of
 
this
 
operating
 
strategy
 
include
 
a
 
strong
 
focus
 
on
 
the
 
continued
 
development
 
of
customer-based
 
funding, the
 
maintenance
 
of direct
 
relationships with
 
wholesale
 
market funding
 
providers, and
 
the maintenance
 
of
the ability to liquidate certain assets when, and if, requirements warrant.
 
 
 
100
The
 
Corporation
 
develops
 
and
 
maintains
 
contingency
 
funding
 
plans.
 
These
 
plans
 
evaluate
 
the
 
Corporation’s
 
liquidity
 
position
under various
 
operating circumstances
 
and are
 
designed to
 
help ensure
 
that the
 
Corporation will
 
be able
 
to operate
 
through periods
of stress when
 
access to normal
 
sources of funds
 
is constrained. The
 
plans project funding
 
requirements during
 
a potential period
 
of
stress, specify and quantify sources of liquidity,
 
outline actions and procedures for effectively managing
 
liquidity through a period of
stress, and
 
define roles
 
and responsibilities
 
for the
 
Corporation’s
 
employees. Under
 
the contingency
 
funding plans,
 
the Corporation
stresses the
 
balance sheet
 
and the
 
liquidity position
 
to critical levels
 
that mimic
 
difficulties in
 
generating funds
 
or even maintaining
the current
 
funding position
 
of the
 
Corporation and
 
the Bank
 
and are
 
designed to
 
help ensure
 
the ability
 
of the
 
Corporation and
 
the
Bank to honor
 
their respective commitments.
 
The Corporation has
 
established liquidity
 
triggers that the
 
MIALCO monitors in
 
order
to maintain the
 
ordinary funding of
 
the banking business.
 
The MIALCO has
 
developed contingency funding
 
plans for the
 
following
three
 
scenarios:
 
a
 
credit rating
 
downgrade,
 
an
 
economic
 
cycle
 
downturn
 
event,
 
and
 
a
 
concentration
 
event.
 
The
 
Board’s
 
Asset and
Liability Committee reviews and approves these plans on an annual basis.
Liquidity Risk Management
The Corporation manages
 
its liquidity in
 
a proactive manner and
 
in an effort
 
to maintain a sound
 
liquidity position. It uses
 
multiple
measures
 
to monitor
 
its liquidity
 
position,
 
including
 
core
 
liquidity,
 
basic
 
liquidity,
 
and time-based
 
reserve
 
measures. Cash
 
and
 
cash
equivalents amounted
 
to $899.6
 
million as
 
of September
 
30, 2025,
 
compared to
 
$1.2 billion
 
as of
 
December 31,
 
2024. When
 
adding
$1.5 billion of free high-quality liquid securities that could be liquidated
 
or pledged within one day (which includes assets such as U.S.
government
 
and
 
GSEs
 
obligations),
 
the
 
total
 
core
 
liquidity
 
amounted
 
to
 
$2.4
 
billion
 
as
 
of
 
September
 
30,
 
2025,
 
or
 
12.64%
 
of
 
total
assets, compared to $2.4 billion, or 12.54% of total assets as of December
 
31, 2024.
 
In addition
 
to the aforementioned
 
$2.4 billion in
 
cash and free
 
high quality
 
liquid assets, the
 
Corporation had $1.1
 
billion available
for credit with the
 
FHLB based on the
 
value of loan and
 
securities collateral pledged
 
with the FHLB. As
 
such, the basic liquidity
 
ratio
(which adds such
 
available secured
 
lines of credit
 
to the core
 
liquidity) was approximately
 
18.10% of total
 
assets as of September
 
30,
2025,
 
compared to 17.27% of total assets as of December 31, 2024.
 
Further,
 
the
 
Corporation
 
also
 
maintains
 
borrowing
 
capacity
 
at
 
the
 
FED
 
Discount
 
Window
 
and
 
had
 
approximately
 
$2.7
 
billion
available for
 
funding under
 
the FED’s
 
Borrower-in-Custody (“BIC”)
 
Program as
 
of September
 
30, 2025,
 
compared to
 
$2.6 billion
 
as
of December 31, 2024 as an additional source of liquidity.
 
Total loans pledged
 
to the FED BIC Program amounted to $3.4 billion as of
each of September 30, 2025
 
and December 31, 2024. The
 
Corporation does not rely on uncommitted
 
inter-bank lines of credit
 
(federal
funds
 
lines)
 
to
 
fund
 
its
 
operations.
 
In
 
the
 
aggregate,
 
as
 
of
 
September
 
30,
 
2025,
 
the
 
Corporation
 
had
 
$6.2
 
billion
 
available
 
to
 
meet
liquidity needs,
 
or 134% of estimated uninsured
 
deposits, excluding fully collateralized
 
government deposits, compared to
 
$5.9 billion
or 124%, respectively,
 
as of December 31, 2024.
 
Liquidity
 
at
 
the Bank
 
level
 
is highly
 
dependent
 
on
 
bank deposits,
 
which
 
fund
 
87.7%
 
of the
 
Bank’s
 
assets (or
 
84.4%
 
excluding
brokered CDs).
 
In addition,
 
as further
 
discussed below,
 
the Corporation
 
maintains a
 
diversified base
 
of readily
 
available wholesale
funding
 
sources,
 
including
 
advances
 
from
 
the
 
FHLB
 
through
 
pledged
 
borrowing
 
capacity,
 
securities
 
sold
 
under
 
agreements
 
to
repurchase, and access to brokered CDs. Funding
 
through wholesale funding may continue to increase
 
the overall cost of funding for
the Corporation and adversely affect the net interest margin.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
101
Commitments to extend credit and standby
 
letters of credit
As
 
a
 
provider
 
of
 
financial
 
services,
 
the
 
Corporation
 
routinely
 
enters
 
into
 
commitments
 
with
 
off-balance
 
sheet
 
risk
 
to
 
meet
 
the
financial
 
needs
 
of
 
its
 
customers.
 
These
 
financial
 
instruments
 
may
 
include
 
loan
 
commitments
 
and
 
standby
 
letters
 
of
 
credit.
 
These
commitments
 
are
 
subject
 
to
 
the
 
same
 
credit
 
policies
 
and
 
approval
 
processes
 
used
 
for
 
on-balance
 
sheet
 
instruments.
 
These
instruments involve, to varying degrees,
 
elements of credit and interest rate risk
 
in excess of the amount recognized in the
 
statements
of financial
 
condition. As
 
of September
 
30, 2025,
 
the Corporation’s
 
commitments to
 
extend credit
 
amounted to
 
approximately $2.1
billion.
 
Commitments
 
to
 
extend
 
credit
 
are
 
agreements
 
to
 
lend
 
to
 
a
 
customer
 
as
 
long
 
as
 
there
 
is
 
no
 
violation
 
of
 
any
 
condition
established
 
in
 
the
 
contract.
 
Since
 
certain
 
commitments
 
are
 
expected
 
to
 
expire
 
without
 
being
 
drawn
 
upon,
 
the
 
total
 
commitment
amount does
 
not necessarily
 
represent future
 
cash requirements. For
 
most of the
 
commercial lines of
 
credit, the
 
Corporation has
 
the
option
 
to
 
reevaluate
 
the
 
agreement
 
prior
 
to
 
additional
 
disbursements.
 
There
 
have
 
been
 
no
 
significant
 
or
 
unexpected
 
draws
 
on
existing commitments. In the case of
 
credit cards and personal lines
 
of credit, the Corporation can
 
cancel the unused credit facility
 
at
any time and without cause.
 
The following table summarizes commitments to extend credit and standby letters of
 
credit as of the indicated dates:
September 30, 2025
December 31, 2024
(In thousands)
Financial instruments whose contract amounts represent credit risk:
 
Commitments to extend credit:
 
Construction undisbursed funds
$
200,976
$
283,302
 
Unused credit card lines
769,661
787,849
 
Unused personal lines of credit
 
35,997
37,140
 
Commercial lines of credit
1,132,720
1,053,938
 
Letters of credit:
 
Commercial letters of credit
56,882
41,738
 
Standby letters of credit
21,126
24,635
The
 
Corporation
 
engages
 
in
 
the ordinary
 
course
 
of business
 
in
 
other
 
financial
 
transactions
 
that
 
are not
 
recorded
 
on the
 
balance
sheet
 
or
 
may
 
be
 
recorded
 
on
 
the
 
balance
 
sheet
 
in
 
amounts
 
that
 
are
 
different
 
from
 
the
 
full
 
contract
 
or
 
notional
 
amount
 
of
 
the
transaction
 
and, thus,
 
affect
 
the Corporation’s
 
liquidity position.
 
These transactions
 
are designed
 
to (i)
 
meet the
 
financial needs
 
of
customers, (ii) manage the
 
Corporation’s credit,
 
market and liquidity risks, (iii)
 
diversify the Corporation’s
 
funding sources, and (iv)
optimize capital.
 
In addition to the
 
aforementioned off-balance
 
sheet debt obligations
 
and unfunded commitments
 
to extend credit,
 
the Corporation
has
 
obligations
 
and
 
commitments
 
to
 
make
 
future
 
payments
 
under
 
contracts,
 
amounting
 
to
 
approximately
 
$4.5
 
billion
 
as
 
of
September 30,
 
2025. Our
 
material cash
 
requirements comprise
 
primarily of
 
contractual obligations
 
to make future
 
payments related
to time
 
deposits, long-term
 
borrowings, and
 
operating lease
 
obligations.
We
also have
 
other contractual
 
cash obligations
 
related to
certain binding agreements
 
we have entered
 
into for services
 
including outsourcing
 
of technology services,
 
security,
 
advertising and
other
 
services
 
which
 
are
 
not material
 
to
 
our
 
liquidity
 
needs.
We
currently
 
anticipate
 
that our
 
available
 
funds,
 
credit
 
facilities, and
cash flows from
 
operations will be
 
sufficient to meet
 
our operational cash
 
needs and support
 
loan growth and
 
capital plan execution
for the foreseeable future.
Off-balance sheet
 
transactions are continuously
 
monitored to consider
 
their potential impact
 
to our liquidity
 
position and changes
are applied to the balance between sources and uses of funds, as deemed appropriate,
 
to maintain a sound liquidity position.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
102
Sources of Funding
The Corporation
 
utilizes different
 
sources of
 
funding to
 
help ensure
 
that adequate
 
levels of
 
liquidity are
 
available when
 
needed.
Diversification
 
of
 
funding
 
sources
 
is
 
of
 
great
 
importance
 
to
 
protect
 
the
 
Corporation’s
 
liquidity
 
from
 
market
 
disruptions.
 
The
principal
 
sources
 
of
 
short-term
 
funding
 
are
 
deposits,
 
including
 
brokered
 
CDs.
 
Additional
 
funding
 
is
 
provided
 
by
 
securities
 
sold
under agreements
 
to repurchase and
 
lines of credit
 
with the FHLB.
 
In addition,
 
the Corporation also
 
maintains as additional
 
sources
borrowing capacity at the FED’s BIC Program
 
,
 
as discussed above.
The Asset and Liability Committee reviews credit availability
 
on a regular basis. The Corporation may
 
also sell mortgage loans as
a supplementary source of funding and obtain long-term funding
 
through the issuance of notes and long-term brokered CDs.
 
While
 
liquidity
 
is
 
an
 
ongoing
 
challenge
 
for
 
all
 
financial
 
institutions,
 
management
 
believes
 
that
 
the
 
Corporation’s
 
available
borrowing capacity and
 
efforts to grow
 
core deposits will be
 
adequate to provide
 
the necessary funding
 
for the Corporation’s
 
business
plans in the next 12 months and beyond.
Retail
 
and
 
commercial
 
core
 
deposits
 
–
The
 
Corporation’s
 
deposit
 
products
 
include
 
regular
 
saving
 
accounts,
 
demand
 
deposit
accounts, money market accounts,
 
and retail CDs. As of September 30,
 
2025 and December 31, 2024,
 
the Corporation’s core
 
deposits,
which
 
exclude
 
government
 
deposits
 
and
 
brokered
 
CDs,
 
totaled
 
$12.8
 
billion
 
and
 
$12.9
 
billion,
 
respectively.
 
The
 
$73.2
 
million
decrease in
 
such deposits consisted
 
of decreases
 
of $83.9
 
million in the
 
Florida region
 
and $16.6 million
 
in the Virgin
 
Islands region,
partially
 
offset
 
by
 
a
 
$27.3
 
million
 
increase
 
in
 
the
 
Puerto
 
Rico
 
region.
 
This
 
decrease
 
includes
 
a
 
$247.6
 
million
 
decrease
 
in
 
interest-
bearing
 
non-maturity
 
deposits,
 
and
 
a
 
$175.6
 
million
 
decrease
 
in
 
non-interest-bearing
 
deposits,
 
partially
 
offset
 
by
 
a
 
$350.0
 
million
increase in time deposits.
 
Government
 
deposits
 
(fully
 
collateralized)
 
–
 
As
 
of
 
September
 
30,
 
2025,
 
the
 
Corporation
 
had
 
$2.9
 
billion
 
of
 
Puerto
 
Rico
 
public
sector deposits
 
($2.7 billion
 
in transactional
 
accounts and
 
$210.4 million
 
in time
 
deposits), compared
 
to $3.1
 
billion as
 
of December
31, 2024. Government
 
deposits are insured
 
by the FDIC up
 
to the applicable
 
limits and the uninsured
 
portions are fully
 
collateralized.
Approximately 23% of the public sector
 
deposits as of September 30, 2025
 
were from municipalities and municipal agencies
 
in Puerto
Rico and 77% were from public corporations, the central
 
government and its agencies, and U.S. federal government agencies in Puerto
Rico.
In
 
addition,
 
as
 
of
 
September
 
30,
 
2025,
 
the
 
Corporation
 
had
 
$0.5
 
billion
 
of
 
government
 
deposits
 
in
 
the
 
Virgin
 
Islands
 
region,
 
as
compared to $0.4 billion as of December 31, 2024.
The
 
uninsured
 
portions of
 
government
 
deposits were
 
collateralized
 
by securities
 
and
 
loans with
 
an amortized
 
cost of
 
$3.4
 
billion
and
 
$3.7 billion
 
as of
 
September 30,
 
2025 and
 
December
 
31, 2024,
 
respectively,
 
and an
 
estimated market
 
value
 
of $3.2
 
billion
 
and
$3.3 billion
 
as of
 
September 30,
 
2025 and
 
December 31,
 
2024, respectively.
 
In addition
 
to securities
 
and loans,
 
as of
 
September 30,
2025 and
 
December 31,
 
2024, the
 
Corporation used
 
$225.0 million
 
and $175.0
 
million, respectively,
 
in letters
 
of credit
 
issued by
 
the
FHLB as pledges for a portion of public deposits in the Virgin
 
Islands.
Estimate of Uninsured
 
Deposits –
As of September
 
30, 2025 and
 
December 31, 2024,
 
the estimated amounts
 
of uninsured deposits
totaled
 
$7.8 billion
 
and $8.1
 
billion,
 
respectively,
 
including government
 
deposits, generally
 
representing
 
the portion
 
of deposits
 
that
exceed
 
the
 
FDIC
 
insurance
 
limit
 
of
 
$250,000
 
and
 
amounts
 
in
 
any
 
other
 
uninsured
 
deposit
 
account.
 
As
 
of
 
September
 
30,
 
2025
 
and
December
 
31,
 
2024,
 
the
 
uninsured
 
portion
 
of
 
fully
 
collateralized
 
government
 
deposits
 
amounted
 
to
 
$3.2
 
billion
 
and
 
$3.3
 
billion,
respectively.
 
Excluding
 
fully
 
collateralized
 
government
 
deposits,
 
the
 
estimated
 
amounts
 
of
 
uninsured
 
deposits
 
amounted
 
to
 
$4.6
billion, which
 
represents
 
28.36% of
 
total deposits
 
(excluding brokered
 
CDs), as
 
of September
 
30, 2025,
 
compared to
 
$4.8
 
billion, or
29.36%, as of December 31, 2024.
 
 
The
 
amount of
 
uninsured
 
deposits
 
is calculated
 
based on
 
the
 
same
 
methodologies
 
and assumptions
 
used for
 
our bank
 
regulatory
reporting requirements adjusted for cash held by wholly-owned subsidiaries
 
at the Bank.
 
The following table presents by contractual maturities the amount of U.S. time deposits in
 
excess of FDIC insurance limits (over
$250,000) and other time deposits that are otherwise uninsured as of September
 
30, 2025:
(In thousands)
3 months or
less
3 months to
6 months
6 months to
1 year
Over 1 year
Total
U.S. time deposits in excess of FDIC insurance limits
$
332,044
$
446,156
$
256,951
$
189,909
$
1,225,060
Other uninsured time deposits
$
23,709
$
8,127
$
18,236
$
4,714
$
54,786
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
103
Brokered
 
CDs
 
–
 
Total
 
brokered
 
CDs
 
increased
 
by
 
$150.2
 
million
 
to
 
$628.3
 
million
 
as
 
of
 
September
 
30,
 
2025,
 
primarily
 
in
 
the
Florida region.
 
The increase reflects
 
$301.3 million
 
of new issuances
 
with original
 
average maturities
 
of approximately
 
1.1 years
 
and
an all-in cost
 
of 4.19%, partially
 
offset by maturing
 
brokered CDs amounting
 
to $151.1 million
 
with an all-in
 
cost of 4.90%
 
that were
paid off during the first nine months of 2025.
The average remaining term to maturity of the brokered CDs outstanding
 
as of September 30, 2025 was approximately 1.1 years.
 
The future use
 
of brokered
 
CDs will depend
 
on multiple factors
 
including excess
 
liquidity at each
 
of the regions,
 
future cash needs
and
 
any
 
tax implications.
 
Also,
 
depending
 
on
 
lending or
 
other
 
investment
 
opportunities available,
 
cash
 
inflows from
 
repayments
 
of
investment securities
 
may be used
 
as well
 
to repay brokered
 
CDs. Brokered
 
CDs are insured
 
by the FDIC
 
up to regulatory
 
limits and
can be obtained faster than regular retail deposits.
 
The
 
following
 
table
 
presents
 
the
 
remaining
 
contractual
 
maturities
 
and
 
weighted-average
 
interest
 
rates
 
of
 
brokered
 
CDs
 
as
 
of
September 30, 2025:
Total
 
Weighted-average
interest rate %
(In thousands)
Three months or less
$
105,216
4.43
Over three months to six months
119,519
4.30
Over six months to one year
166,116
4.14
Over one year to two years
 
164,286
3.95
Over two years to three years
 
30,325
4.03
Over three years to four years
 
27,381
4.44
Over five years
 
15,466
4.61
 
Total
$
628,309
4.19
Refer to
 
“Net Interest
 
Income” above
 
for information
 
about average
 
balances of
 
interest-bearing deposits
 
and the
 
average interest
rate paid on such deposits for the quarters and nine-month periods ended
 
September 30, 2025 and 2024.
Securities
 
sold
 
under
 
agreements
 
to
 
repurchase
 
–
 
From
 
time
 
to
 
time,
 
the
 
Corporation
 
enters
 
into
 
repurchase
 
agreements
 
as
 
an
additional
 
source
 
of
 
funding.
 
As
 
of
 
each
 
of
 
September
 
30,
 
2025
 
and
 
December
 
31,
 
2024,
 
there
 
were
 
no
 
outstanding
 
repurchase
agreements.
When
 
the
 
Corporation
 
enters
 
into
 
repurchase
 
agreements,
 
as is
 
the
 
case
 
with
 
derivative
 
contracts,
 
the
 
Corporation
 
is
 
required
 
to
pledge
 
cash
 
or
 
qualifying
 
securities
 
to
 
meet
 
margin
 
requirements.
 
To
 
the
 
extent
 
that
 
the
 
value
 
of
 
securities
 
previously
 
pledged
 
as
collateral
 
declines
 
due
 
to
 
changes
 
in
 
interest
 
rates,
 
a
 
liquidity
 
crisis
 
or
 
any
 
other
 
factor,
 
the
 
Corporation
 
is
 
required
 
to
 
deposit
additional
 
cash
 
or
 
securities
 
to
 
meet
 
its
 
margin
 
requirements,
 
thereby
 
adversely
 
affecting
 
its
 
liquidity.
 
Given
 
the
 
quality
 
of
 
the
collateral
 
pledged,
 
the
 
Corporation
 
has
 
not
 
experienced
 
margin
 
calls
 
from
 
counterparties
 
arising
 
from
 
credit-quality-related
 
write-
downs in valuations.
Advances
 
from
 
the
 
FHLB
 
–
The
 
Bank
 
is
 
a
 
member
 
of
 
the
 
FHLB
 
system
 
and
 
obtains
 
advances
 
to
 
fund
 
its
 
operations
 
under
 
a
collateral
 
agreement
 
with
 
the
 
FHLB
 
that
 
requires
 
the
 
Bank
 
to
 
maintain
 
qualifying
 
mortgages
 
and/or
 
investments
 
as
 
collateral
 
for
advances taken.
 
As of
 
September 30,
 
2025 and
 
December 31,
 
2024, the
 
outstanding balance
 
of long-term
 
fixed-rate FHLB
 
advances
was
 
$290.0
 
million
 
and
 
$500.0
 
million,
 
respectively.
 
Of
 
the
 
$290.0
 
million
 
in
 
FHLB
 
advances
 
as
 
of
 
September
 
30,
 
2025,
 
$190.0
million were pledged with
 
investment securities and $100.0
 
million were pledged with
 
mortgage loans. As of September
 
30, 2025, the
Corporation had
 
$1.1 billion
 
available for
 
additional credit
 
on FHLB
 
lines of
 
credit based
 
on collateral
 
pledged at
 
the FHLB
 
of New
York.
 
The following
 
table presents the
 
remaining contractual
 
maturities and
 
weighted-average interest
 
rates of
 
advances from
 
the FHLB
as of September 30, 2025:
Total
Weighted-average
interest rate %
(In thousands)
Over three months to six months
$
90,000
4.49
Over two years to three years
200,000
4.25
 
Total
(1)
$
290,000
4.32
(1) Average remaining term to maturity
 
of 1.61 years.
 
104
Trust-Preferred
 
Securities –
In 2004,
 
FBP Statutory
 
Trusts I
 
and II,
 
wholly-owned by
 
the Corporation
 
and not
 
consolidated in
 
the
Corporation’s
 
financial
 
statements,
 
sold
 
to
 
institutional
 
investors
 
variable-rate
 
TruPS
 
and
 
used
 
the
 
proceeds
 
of
 
these
 
issuances,
together
 
with the
 
proceeds
 
of the
 
purchases
 
by the
 
Corporation
 
of variable
 
rate common
 
securities,
 
to purchase
 
junior
 
subordinated
deferrable debentures.
During
 
the
 
first
 
half
 
of
 
2025,
 
the
 
Corporation
 
redeemed
 
the
 
remaining
 
$61.7
 
million
 
of
 
outstanding
 
TruPS
 
as
 
of
 
December
 
31,
2024,
 
which
 
had
 
been
 
reported
 
as
 
part
 
of
 
“Long-term
 
borrowings”
 
in
 
the
 
Corporation’s
 
consolidated
 
financial
 
statements,
 
at
 
a
contractual
 
call
 
price
 
of
 
100%.
 
Following
 
the
 
redemption
 
of
 
these
 
TruPS,
 
FBP
 
Statutory
 
Trusts
 
I
 
and
 
II
 
were
 
liquidated
 
by
 
the
Corporation.
 
See
 
Note
 
6
 
–
 
“Non-Consolidated
 
Variable
 
Interest
 
Entities
 
(“VIEs”)
 
and
 
Servicing
 
Assets”
 
and
 
Note
 
20
 
–
 
“First
BanCorp.
 
(Holding Company Only) Financial Information” for additional informatio
 
n.
FED Discount Window
 
– The Corporation participates in
 
the BIC Program of the FED.
 
Through the BIC Program, a
 
broad range of
loans may be
 
pledged as collateral
 
for borrowings through
 
the FED Discount
 
Window.
 
As previously mentioned,
 
as of September
 
30,
2025,
 
the
 
Corporation
 
had
 
approximately
 
$2.7
 
billion
 
fully
 
available
 
for
 
funding
 
under
 
the
 
FED’s
 
Discount
 
Window
 
based
 
on
collateral pledged at the FED.
Effect of Credit Ratings on Access to Liquidity
The
 
Corporation’s
 
liquidity
 
is
 
contingent
 
upon
 
its
 
ability
 
to
 
obtain
 
deposits
 
and
 
other
 
external
 
sources
 
of
 
funding
 
to
 
finance
 
its
operations.
 
The Corporation’s
 
current
 
credit ratings
 
and any
 
downgrade
 
in credit
 
ratings can
 
hinder the
 
Corporation’s
 
access to
 
new
forms
 
of
 
external
 
funding
 
and/or
 
cause
 
external
 
funding
 
to
 
be
 
more
 
expensive,
 
which
 
could,
 
in
 
turn,
 
adversely
 
affect
 
its
 
results
 
of
operations. Also, changes in credit ratings may further affect
 
the fair value of unsecured derivatives whose value takes into account
 
the
Corporation’s own credit risk.
 
The Corporation
 
does not
 
have any
 
outstanding debt
 
or derivative
 
agreements that
 
would be
 
affected by
 
credit rating
 
downgrades.
Furthermore, given the Corporation’s
 
non-reliance on corporate debt or other
 
instruments directly linked in terms
 
of pricing or volume
to credit
 
ratings, the
 
liquidity of
 
the Corporation
 
has not been
 
affected in
 
any material
 
way by downgrades.
 
The Corporation’s
 
ability
to access new non-deposit sources of funding, however,
 
could be adversely affected by credit downgrades.
As of the date
 
hereof, the Corporation’s
 
credit as a long-term
 
issuer is rated BB+
 
by Fitch. As of
 
the date hereof, FirstBank’s
 
credit
ratings as
 
a long-term
 
issuer is
 
rated BB+
 
by Fitch,
 
one notch
 
below the
 
minimum BBB-
 
level required
 
to be
 
considered investment
grade.
 
The
 
Corporation’s
 
credit
 
ratings
 
are
 
dependent
 
on
 
a
 
number
 
of
 
factors,
 
both
 
quantitative
 
and
 
qualitative,
 
and
 
are
 
subject
 
to
change
 
at any
 
time. The
 
disclosure of
 
credit ratings
 
is not
 
a recommendation
 
to buy,
 
sell or
 
hold
 
the Corporation’s
 
securities. Each
rating should be evaluated independently of any other rating.
 
 
 
 
105
Cash Flows
Cash
 
and
 
cash
 
equivalents
 
were
 
$899.6
 
million
 
as
 
of
 
September
 
30,
 
2025,
 
a
 
decrease
 
of
 
$259.8
 
million
 
when
 
compared
 
to
December
 
31,
 
2024.
 
The
 
following
 
discussion
 
highlights
 
the
 
major
 
activities
 
and
 
transactions
 
that
 
affected
 
the
 
Corporation’s
 
cash
flows during the first nine months of 2025 and 2024:
 
Cash Flows from Operating Activities
First BanCorp.’s
 
operating assets and
 
liabilities vary significantly
 
in the normal course
 
of business due to
 
the amount and timing
 
of
cash flows.
 
Management believes
 
that cash
 
flows from
 
operations, available
 
cash balances,
 
and the
 
Corporation’s
 
ability to
 
generate
cash through
 
short and long-term
 
borrowings will be
 
sufficient to
 
fund the Corporation’s
 
operating liquidity
 
needs for the
 
foreseeable
future.
For
 
the
 
first
 
nine
 
months
 
of
 
2025
 
and
 
2024,
 
net
 
cash
 
provided
 
by
 
operating
 
activities
 
was
 
$341.3
 
million
 
and
 
$307.3
 
million,
respectively.
 
Net cash
 
generated from
 
operating activities
 
was higher
 
than reported
 
net income
 
largely as
 
a result
 
of adjustments
 
for
non-cash
 
items
 
such
 
as
 
depreciation
 
and
 
amortization,
 
deferred
 
income
 
tax
 
(benefit)
 
expense
 
and
 
the
 
provision
 
for
 
credit
 
losses,
 
as
well as cash generated from sales and repayments of loans held for sale.
Cash Flows from Investing Activities
The Corporation’s
 
investing activities primarily
 
relate to originating
 
loans to be
 
held for investment,
 
as well as
 
purchasing, selling,
and
 
repaying
 
available-for-sale
 
and
 
held-to-maturity debt
 
securities. For
 
the nine
 
-month period
 
ended September
 
30, 2025
 
,
 
net cash
used in
 
investing activities
 
was $96.5
 
million, primarily
 
due to purchases
 
of U.S.
 
Treasury securities
 
and U.S.
 
agencies MBS
 
and net
disbursements
 
on
 
loans
 
held
 
for
 
investment
 
during
 
the
 
first
 
nine
 
months
 
of
 
2025,
 
partially
 
offset
 
by
 
maturities
 
of
 
U.S.
 
agencies
debentures
 
and
 
U.S.
 
Treasury
 
securities
 
and
 
principal
 
repayments
 
of
 
U.S.
 
agencies
 
MBS
 
and
 
debentures,
 
proceeds
 
from
 
sales
 
of
repossessed assets, and proceeds from the bulk sale of fully charged
 
-off consumer loans and finance leases.
 
For the nine month period ended September 30, 2024,
 
net cash provided by investing activities was $213.8
 
million, primarily due to
repayments of
 
U.S. agencies
 
MBS, U.S.
 
agencies debentures,
 
and government
 
bonds; proceeds
 
from sales
 
of repossessed
 
assets; and
proceeds from
 
sales of loans,
 
driven by
 
the bulk sale
 
of fully charged
 
-off consumer
 
loans during the
 
first quarter of
 
2024 and the
 
sale
of
 
an
 
$8.2
 
million
 
nonaccrual
 
C&I
 
loan;
 
partially
 
offset
 
by
 
net
 
disbursements
 
on
 
loans
 
held
 
for
 
investment
 
and
 
purchases
 
of
Community Reinvestment Act qualified debt securities during
 
the first nine months of 2024.
 
Cash Flows from Financing Activities
The Corporation’s
 
financing activities
 
primarily
 
include the
 
receipt of
 
deposits and
 
the issuance
 
of brokered
 
CDs, the
 
issuance of
and
 
payments
 
on
 
long-term
 
borrowings,
 
the
 
issuance
 
of
 
equity
 
instruments,
 
return
 
of
 
capital, and
 
activities
 
related
 
to
 
its
 
short-term
funding.
 
For
 
the
 
nine-month
 
period
 
ended
 
September
 
30,
 
2025,
 
net
 
cash
 
used
 
in
 
financing
 
activities
 
was
 
$504.6
 
million,
 
mainly
reflecting
 
the
 
repayments
 
of
 
long-term
 
borrowings,
 
consisting
 
of
 
$180.0
 
million
 
in
 
FHLB
 
advances
 
and
 
the
 
redemption
 
of
 
junior
subordinated debentures
 
,
 
capital returned
 
to stockholders,
 
and a
 
decrease in
 
total deposits.
 
See Note
 
6 –
 
“Non-Consolidated Variable
Interest Entities
 
(“VIEs”) and
 
Servicing Assets”
 
and Note
 
20 –
 
“First BanCorp.
 
(Holding Company
 
Only) Financial
 
Information” for
additional information on the redemption of junior subordinated debentures.
For the nine
 
-month period
 
ended September 30,
 
2024, net cash
 
used in financing
 
activities was $498.9
 
million, mainly reflecting
 
a
decrease in total deposits, capital returned to stockholders and the redemption
 
of junior subordinated debentures in September 2024.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
106
Capital
As of
 
September 30,
 
2025, the
 
Corporation’s
 
stockholders’ equity
 
was $1.9
 
billion, an
 
increase of
 
$248.8 million
 
from December
31, 2024.
 
The increase
 
was driven
 
by net
 
income generated
 
in the
 
first nine
 
months of
 
2025 and
 
a $174.1
 
million increase
 
in the
 
fair
value
 
of
 
available-for-sale
 
debt
 
securities
 
due
 
to
 
changes
 
in
 
market
 
interest
 
rates
 
recognized
 
as
 
part
 
of
 
accumulated
 
other
comprehensive
 
loss
 
in
 
the
 
consolidated
 
statements
 
of
 
financial
 
condition,
 
partially
 
offset
 
by
 
$100.0
 
million
 
in
 
common
 
stock
repurchases and $87.4 million, or $0.54 per common share, in common
 
stock dividends declared in the first nine months of 2025.
On
 
October
 
22,
 
2025,
 
the
 
Corporation’s
 
Board
 
of
 
Directors
 
declared
 
a
 
quarterly
 
cash
 
dividend
 
of
 
$0.18
 
per
 
common
 
share.
 
The
dividend is payable
 
on December 12,
 
2025 to shareholders
 
of record at
 
the close of business
 
on November 28,
 
2025. The Corporation
intends to
 
continue to pay
 
quarterly dividends
 
on common stock.
 
However, the
 
Corporation’s
 
common stock dividends,
 
including the
declaration, timing,
 
and amount, remain
 
subject to consideration
 
and approval by
 
the Corporation’s
 
Board of Directors
 
at the relevant
times.
On
 
July
 
22,
 
2024,
 
the
 
Corporation
 
announced
 
that
 
its
 
Board
 
of
 
Directors
 
approved
 
a
 
repurchase
 
program,
 
under
 
which
 
the
Corporation
 
may repurchase
 
up
 
to $250
 
million that
 
could include
 
repurchases
 
of common
 
stock or
 
junior subordinated
 
debentures,
which it expects to execute
 
during the remainder
 
of 2025. Under this
 
program, the Corporation
 
repurchased approximately 5.2
 
million
shares of
 
common stock
 
for a total
 
cost of
 
$100.0 million
 
and redeemed
 
$61.7 million
 
of outstanding
 
junior subordinated
 
debentures
during the
 
first nine months
 
of 2025.
 
As of September
 
30, 2025,
 
the Corporation has
 
remaining authorization
 
of approximately
 
$38.3
million. Furthermore,
 
on October
 
22, 2025,
 
the Corporation
 
announced that
 
its Board
 
of Directors
 
approved
 
a new
 
stock repurchase
program,
 
under
 
which
 
the
 
Corporation
 
may
 
repurchase
 
up to
 
an
 
additional
 
$200 million
 
of
 
its outstanding
 
common
 
stock, which
 
it
expects
 
to
 
execute
 
through
 
the end
 
of the
 
fourth
 
quarter
 
of 2026.
 
For
 
more
 
information,
 
see Part
 
II,
 
Item
 
2,
 
“Unregistered
 
Sales of
Equity Securities and Use of Proceeds,” and Note 11
 
– “Stockholders’ Equity,” of
 
this Quarterly Report on Form 10-Q.
From October
 
1, 2025 to
 
November 4, 2025,
 
the Corporation repurchased
 
approximately 1.2
 
million shares of
 
common stock for
 
a
total cost of
 
approximately $23.7
 
million. Therefore,
 
the Corporation
 
has remaining
 
authorization of
 
approximately $214.6
 
million as
of November 4, 2025 under both programs.
The tangible common
 
equity ratio and
 
tangible book value
 
per common share
 
are non-GAAP financial
 
measures generally used
 
by
the
 
financial
 
community
 
to
 
evaluate
 
capital
 
adequacy.
 
Tangible
 
common
 
equity
 
is
 
total
 
common
 
equity
 
less
 
goodwill
 
and
 
other
intangible assets. Tangible
 
assets are total assets less
 
the previously mentioned
 
intangible assets. See “Non-GAAP
 
Financial Measures
and Reconciliations” above for additional information.
 
The
 
following
 
table
 
is
 
a
 
reconciliation
 
of
 
the
 
Corporation’s
 
tangible
 
common
 
equity
 
and
 
tangible
 
assets,
 
non-GAAP
 
financial
measures, to total equity and total assets, respectively,
 
as of the indicated dates:
September 30, 2025
December 31, 2024
(In thousands, except ratios and per share information)
Total common equity
 
- GAAP
$
1,918,045
$
1,669,236
Goodwill
(38,611)
(38,611)
Other intangible assets
(3,676)
(6,967)
Tangible common
 
equity - non-GAAP
$
1,875,758
$
1,623,658
Total assets - GAAP
$
19,321,335
$
19,292,921
Goodwill
(38,611)
(38,611)
Other intangible assets
(3,676)
(6,967)
Tangible assets - non
 
-GAAP
$
19,279,048
$
19,247,343
Common shares outstanding
159,135
163,869
Tangible common
 
equity ratio - non-GAAP
9.73%
8.44%
Tangible book value
 
per common share - non-GAAP
$
11.79
$
9.91
See Note 19 – “Regulatory
 
Matters, Commitments and Contingencies”
 
to the unaudited consolidated
 
financial statements herein for
the regulatory capital positions of the Corporation and FirstBank as of
 
September 30, 2025 and December 31, 2024, respectively.
 
107
The
 
Puerto
 
Rico
 
Banking
 
Law
 
of
 
1933,
 
as
 
amended
 
(the
 
“Puerto
 
Rico
 
Banking
 
Law”),
 
requires
 
that
 
a
 
minimum
 
of
 
10%
 
of
FirstBank’s
 
net income
 
for
 
the year
 
be transferred
 
to a
 
legal surplus
 
reserve
 
until such
 
surplus
 
equals the
 
total of
 
paid-in-capital
 
on
common and preferred
 
stock. Amounts transferred
 
to the legal surplus
 
reserve from retained
 
earnings are not available
 
for distribution
to the Corporation without the
 
prior consent of the Puerto
 
Rico Commissioner of Financial Institutions.
 
The Puerto Rico Banking
 
Law
provides that,
 
when the
 
expenditures of
 
a Puerto
 
Rico commercial
 
bank are
 
greater than
 
receipts, the
 
excess of
 
the expenditures
 
over
receipts
 
must
 
be
 
charged
 
against
 
the
 
undistributed
 
profits
 
of
 
the
 
bank,
 
and
 
the
 
balance,
 
if
 
any,
 
must
 
be
 
charged
 
against
 
the
 
legal
surplus
 
reserve,
 
as
 
a
 
reduction
 
thereof.
 
If
 
the
 
legal
 
surplus
 
reserve
 
is
 
not
 
sufficient
 
to
 
cover
 
such
 
balance
 
in
 
whole
 
or
 
in
 
part,
 
the
outstanding
 
amount
 
must
 
be charged
 
against
 
the
 
capital
 
account
 
and
 
the
 
Bank
 
cannot
 
pay
 
dividends
 
until
 
it
 
can
 
replenish
 
the
 
legal
surplus reserve
 
to an
 
amount of
 
at least
 
20% of
 
the original
 
capital contributed.
 
FirstBank’s
 
legal surplus
 
reserve, included
 
as part
 
of
retained
 
earnings
 
in
 
the
 
Corporation’s
 
consolidated
 
statements
 
of
 
financial
 
condition,
 
amounted
 
to
 
$230.2
 
million
 
as
 
of
 
each
 
of
September 30, 2025 and December 31, 2024. There were no transfers to
 
the legal surplus reserve during the first nine months of 2025.
Interest Rate Risk Management
First
 
BanCorp.
 
manages
 
its
 
asset/liability
 
position
 
to
 
limit
 
the
 
effects
 
of
 
changes
 
in
 
interest
 
rates
 
on
 
net
 
interest
 
income
 
and
 
to
maintain stability
 
of profitability
 
under varying
 
interest rate
 
scenarios. The
 
MIALCO oversees
 
interest rate
 
risk and
 
monitors, among
other things,
 
current and expected
 
conditions in global
 
financial markets, competition
 
and prevailing rates
 
in the local
 
deposit market,
liquidity,
 
loan
 
originations
 
pipeline,
 
securities
 
market
 
values,
 
recent
 
or
 
proposed
 
changes
 
to
 
the
 
investment
 
portfolio,
 
alternative
funding sources
 
and related costs,
 
hedging and the
 
possible purchase of
 
derivatives such as
 
swaps and caps,
 
and any tax
 
or regulatory
issues which may be
 
pertinent to these areas.
 
The MIALCO approves funding
 
decisions in light of
 
the Corporation’s
 
overall strategies
and objectives.
On at least a quarterly basis, the Corporation performs
 
a consolidated net interest income simulation analysis to estimate
 
the potential
change
 
in
 
future
 
earnings
 
from
 
projected
 
changes
 
in
 
interest
 
rates.
 
These
 
simulations
 
are
 
carried
 
out
 
over
 
a
 
one-to-five-year
 
time
horizon. The
 
rate scenarios
 
considered in
 
these simulations
 
reflect gradual
 
upward or
 
downward interest
 
rate movements
 
in the
 
yield
curve, for gradual
 
(ramp) parallel shifts
 
in the yield
 
curve of 200
 
and 300 bps
 
during a twelve-month
 
period, or immediate
 
upward or
downward
 
changes
 
in
 
interest
 
rate
 
movements
 
of
 
200
 
bps,
 
for
 
interest
 
rate
 
shock
 
scenarios.
 
The
 
Corporation
 
carries
 
out
 
the
simulations in two ways:
(1)
Using a static balance sheet, as the Corporation had on the simulation date,
 
and
(2)
Using a dynamic balance sheet based on recent patterns and current
 
strategies.
The balance
 
sheet is
 
divided into
 
groups of
 
assets and
 
liabilities by
 
maturity or
 
repricing structure
 
and their
 
corresponding interest
yields and
 
costs. As interest
 
rates rise or
 
fall, these
 
simulations incorporate
 
expected future
 
lending rates,
 
current and
 
expected future
funding sources
 
and costs,
 
the possible
 
exercise of
 
options, changes
 
in prepayment
 
rates, deposit
 
decay and
 
other factors,
 
which may
be important in projecting net interest income.
The
 
Corporation
 
uses a
 
simulation
 
model
 
to
 
project
 
future movements
 
in
 
the
 
Corporation’s
 
balance
 
sheet
 
and
 
income
 
statement.
The starting
 
point of
 
the projections
 
corresponds to
 
the actual
 
values on
 
the balance
 
sheet on
 
the simulation
 
date. These
 
simulations
are
 
highly
 
complex
 
and
 
are
 
based
 
on
 
many
 
assumptions
 
that
 
are
 
intended
 
to
 
reflect
 
the
 
general
 
behavior
 
of
 
the
 
balance
 
sheet
components over
 
the modeled
 
periods. It
 
is unlikely
 
that actual
 
events will
 
match these
 
assumptions in
 
all cases.
 
For this
 
reason, the
results of
 
these forward-looking
 
computations are
 
only approximations
 
of the
 
sensitivity of
 
net interest
 
income to
 
changes in
 
market
interest rates. Several
 
benchmark and market
 
rate curves were used
 
in the modeling process,
 
primarily,
 
SOFR curve, Prime Rate,
 
U.S.
Treasury yield curve, FHLB rates, and brokered
 
CDs rates.
As of September
 
30, 2025, the
 
Corporation forecasted
 
the 12-month net
 
interest income assuming
 
September 30, 2025
 
interest rate
curves remain constant. Then, net interest income was estimated
 
under rising and falling rates scenarios.
 
For the rising rate scenario, a
gradual (ramp)
 
and immediate
 
(shock) parallel
 
upward shift
 
of the
 
yield curve
 
is assumed
 
during the
 
first twelve
 
months (the
 
“+300
ramp”, “+200
 
ramp” and
 
“+200 shock”
 
scenarios). Conversely,
 
for the
 
falling rate
 
scenario, a
 
gradual (ramp)
 
and immediate
 
(shock)
parallel downward shift
 
of the yield
 
curve is assumed during
 
the first twelve months
 
(the “-300 ramp”,
 
“-200 ramp” and “-200
 
shock”
scenarios).
The
 
SOFR curve
 
for
 
September
 
30, 2025,
 
as compared
 
with December
 
31, 2024,
 
reflects a
 
decrease
 
of 39
 
bps on
 
average in
 
the
short-term
 
sector
 
of
 
the
 
curve,
 
or
 
between
 
one
 
to
 
twelve
 
months;
 
a
 
decrease
 
of
 
68
 
bps
 
in
 
the
 
medium-term
 
sector
 
of
 
the
 
curve,
 
or
between
 
2 to
 
5 years;
 
and
 
a decrease
 
of 38
 
bps
 
in the
 
long-term
 
sector of
 
the
 
curve,
 
or over
 
5-year maturities.
 
A similar
 
change
 
in
market
 
rates
 
was
 
observed
 
in
 
the
 
Constant
 
Maturity
 
Treasury
 
yield
 
curve
 
with
 
a
 
decrease
 
of
 
36
 
bps
 
in
 
the
 
short-term
 
sector
 
of
 
the
curve,
 
a decrease of 65 bps in the medium-term sector of the curve, and a decrease of 21 bps in the long-term
 
sector of the curve.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
108
 
The following table presents the results of the static simulations as of September 30, 2025
 
and December 31, 2024. Consistent with
prior years, these exclude non-cash changes in the fair value of derivatives:
Net Interest Income Risk
(% Change Projected for the next 12 months)
September 30, 2025
December 31, 2024
Gradual Change in Interest Rates:
 
+ 300 bps ramp
3.45
%
3.05
%
 
+ 200 bps ramp
2.31
%
2.04
%
 
- 300 bps ramp
-4.86
%
-4.79
%
 
- 200 bps ramp
-3.24
%
-3.15
%
Immediate Change in Interest Rates:
 
+ 200 bps shock
4.88
%
3.51
%
 
- 200 bps shock
-8.41
%
-7.17
%
The Corporation
 
continues to
 
manage its
 
balance sheet
 
structure to
 
control and
 
limit the
 
overall interest
 
rate risk
 
by managing
 
its
asset
 
composition
 
while
 
maintaining
 
a
 
sound
 
liquidity
 
position.
 
See
 
“Risk
 
Management
 
–
 
Liquidity
 
Risk
 
Management”
 
above
 
for
liquidity ratios.
As of September 30, 2025
 
and December 31, 2024, the
 
net interest income simulations
 
show that the Corporation
 
continues to have
an asset sensitive position for the next twelve months under a static balance sheet
 
simulation.
Under
 
gradual
 
rising
 
and
 
falling
 
rate
 
scenarios,
 
the
 
net
 
interest
 
income
 
simulation
 
reflects
 
increased
 
rate
 
sensitivity
 
compared
 
to
December
 
31,
 
2024.
 
There
 
was
 
a
 
higher
 
sensitivity
 
in
 
the
 
assets
 
side
 
due
 
to
 
earlier
 
scheduled
 
maturities
 
of
 
U.S.
 
government
 
and
agencies
 
obligations
 
and
 
higher
 
commercial
 
loan
 
balances,
 
partially
 
offset
 
by
 
a
 
lower
 
interest-bearing
 
cash
 
position.
 
Additionally,
there
 
was
 
a
 
lower
 
sensitivity
 
in
 
the
 
liabilities
 
side
 
primarily
 
driven
 
by
 
lower
 
deposit
 
betas
 
primarily
 
in
 
retail
 
and
 
commercial
 
non-
maturity deposits, partially offset by higher betas on market
 
-linked deposits such as certain public funds.
 
Under
 
the
 
static
 
simulation,
 
the
 
Corporation
 
assumes
 
that
 
maturing
 
instruments
 
are
 
replaced
 
with
 
similar
 
instruments
 
at
 
the
repricing rate upon maturity.
 
The Corporation’s results may vary
 
significantly from the ones presented above under alternative balance
sheet compositions,
 
such as a
 
dynamic balance
 
sheet scenario which,
 
for example, would
 
assume that cash
 
flows from the
 
investment
securities portfolio and loan repayments could be redeployed into higher
 
yielding alternatives.
 
109
Credit Risk Management
First BanCorp.
 
is subject
 
to
 
credit
 
risk
 
mainly
 
with
 
respect
 
to
 
its portfolio
 
of loans
 
receivable
 
and
 
off-balance-sheet
 
instruments,
principally
 
loan
 
commitments.
 
Loans
 
receivable
 
represents
 
loans
 
that
 
First
 
BanCorp.
 
holds
 
for
 
investment
 
and,
 
therefore,
 
First
BanCorp. is at risk for
 
the term of the loan.
 
Loan commitments represent commitments
 
to extend credit, subject
 
to specific conditions,
for specific amounts
 
and maturities. These commitments
 
may expose the Corporation
 
to credit risk and
 
are subject to the
 
same review
and
 
approval
 
process
 
as
 
for
 
loans
 
made
 
by
 
the
 
Bank.
 
See
 
“Risk
 
Management
 
–
 
Liquidity
 
Risk”
 
above
 
for
 
further
 
details.
 
The
Corporation
 
manages
 
its
 
credit
 
risk
 
through
 
its
 
credit
 
policy,
 
underwriting,
 
monitoring
 
of
 
loan
 
concentrations
 
and
 
related
 
credit
quality,
 
counterparty
 
credit
 
risk,
 
economic
 
and
 
market
 
conditions,
 
and
 
legislative
 
or
 
regulatory
 
mandates.
 
The
 
Corporation
 
also
performs
 
independent
 
loan
 
review
 
and
 
quality
 
control
 
procedures,
 
statistical
 
analysis,
 
comprehensive
 
financial
 
analysis,
 
established
management committees,
 
and employs
 
proactive collection
 
and loss
 
mitigation efforts.
 
Furthermore, personnel
 
performing structured
loan
 
workout
 
functions
 
are
 
responsible
 
for
 
mitigating
 
defaults
 
and
 
minimizing
 
losses
 
upon
 
default
 
within
 
each
 
region
 
and
 
for
 
each
business segment.
 
In the
 
case of
 
the C&I,
 
commercial
 
mortgage and
 
construction loan
 
portfolios,
 
the Special
 
Asset Group
 
(“SAG”)
focuses on
 
strategies for
 
the accelerated
 
reduction of
 
non-performing assets
 
through note
 
sales, short
 
sales, loss
 
mitigation programs,
and sales of OREO. In addition to the management of
 
the resolution process for problem loans, the SAG oversees collection
 
efforts for
all loans
 
to prevent
 
migration to
 
the nonaccrual
 
and/or
 
adversely classified
 
status.
 
The
 
SAG utilizes
 
relationship
 
officers,
 
collection
specialists and attorneys.
The
 
Corporation
 
may
 
also
 
have
 
risk
 
of
 
default
 
in
 
the
 
securities
 
portfolio.
 
The
 
securities
 
held
 
by
 
the
 
Corporation
 
are
 
principally
fixed-rate U.S. agencies
 
MBS and U.S. Treasury
 
and agencies securities. Thus,
 
a substantial portion
 
of these instruments is
 
backed by
mortgages, a guarantee of a U.S. GSE or the full faith and credit of the U.S. government.
Management, consisting of the Corporation’s
 
Chief Risk Officer,
 
Commercial Credit Risk Officer,
 
Retail Credit Risk Officer,
 
Chief
Credit Officer,
 
and other senior executives,
 
has the primary responsibility
 
for setting strategies to achieve
 
the Corporation’s
 
credit risk
goals and objectives. Management has documented these goals and objectives
 
in the Corporation’s Credit Policy.
Allowance for Credit Losses and Non-Performing Assets
Allowance for Credit Losses for Loans and
 
Finance Leases
The ACL
 
for loans
 
and finance
 
leases represents
 
the estimate
 
of the
 
level of
 
reserves appropriate
 
to absorb
 
expected credit
 
losses
over the estimated life of
 
the loans. The amount of the allowance
 
is determined using relevant available
 
information, from internal and
external sources, relating
 
to past events, current
 
conditions, and reasonable
 
and supportable forecasts.
 
Historical credit loss experience
is
 
a
 
significant
 
input
 
for
 
the
 
estimation
 
of
 
expected
 
credit
 
losses,
 
as
 
well
 
as
 
adjustments
 
to
 
historical
 
loss
 
information
 
made
 
for
differences in current loan-specific
 
risk characteristics, such as differences
 
in underwriting standards, portfolio mix,
 
delinquency level,
or
 
term.
 
Additionally,
 
the
 
Corporation’s
 
assessment
 
involves
 
evaluating
 
key
 
factors,
 
which
 
include
 
credit
 
and
 
macroeconomic
indicators,
 
such as
 
changes in
 
unemployment
 
rates, property
 
values, and
 
other relevant
 
factors to
 
account for
 
current and
 
forecasted
market conditions
 
that are
 
likely to
 
cause estimated
 
credit losses
 
over the
 
life of the
 
loans to differ
 
from historical
 
credit losses.
 
Such
factors
 
are
 
subject
 
to
 
regular
 
review
 
and
 
may
 
change
 
to
 
reflect
 
updated
 
performance
 
trends
 
and
 
expectations.
 
The
 
process includes
judgments
 
and
 
quantitative
 
elements
 
that
 
may
 
be
 
subject
 
to
 
significant
 
change.
 
Further,
 
the
 
Corporation
 
periodically
 
considers
 
the
need for qualitative
 
reserves to the
 
ACL. Qualitative adjustments
 
may be related
 
to and include,
 
but are not limited
 
to, factors such
 
as
the
 
following:
 
(i)
 
management’s
 
assessment
 
of
 
economic
 
forecasts
 
used
 
in
 
the
 
model
 
and
 
how
 
those
 
forecasts
 
align
 
with
management’s
 
overall
 
evaluation
 
of
 
current
 
and
 
expected
 
economic
 
conditions;
 
(ii)
 
organization
 
specific
 
risks
 
such
 
as
 
credit
concentrations, collateral
 
specific risks, nature
 
and size of
 
the portfolio and
 
external factors that
 
may ultimately
 
impact credit quality
 
;
and
 
(iii)
 
other
 
limitations associated
 
with factors
 
such as
 
changes
 
in underwriting
 
and loan
 
resolution
 
strategies,
 
among
 
others.
 
The
ACL for loans and
 
finance leases is reviewed
 
at least on a quarterly
 
basis as part of
 
the Corporation’s
 
continued evaluation of its
 
asset
quality.
 
The Corporation
 
generally applies probability
 
weights to the
 
baseline and alternative
 
downside economic
 
scenarios to estimate
 
the
ACL with
 
the
 
baseline
 
scenario
 
carrying
 
the highest
 
weight.
 
The
 
scenarios
 
that are
 
chosen each
 
quarter
 
and
 
the
 
weighting
 
given
 
to
each
 
scenario
 
for
 
the
 
different
 
loan
 
portfolio
 
categories
 
depend
 
on
 
a
 
variety
 
of
 
factors
 
including
 
recent
 
economic
 
events,
 
leading
national
 
and
 
regional
 
economic
 
indicators,
 
and
 
industry
 
trends.
 
However,
 
as
 
of
 
September
 
30,
 
2025
 
and
 
December
 
31,
 
2024,
 
the
Corporation
 
applied
 
100%
 
probability
 
to
 
the
 
baseline
 
scenario
 
for
 
the
 
commercial
 
mortgage
 
and
 
construction
 
loan
 
portfolios
 
since
certain macroeconomic
 
variables associated
 
with commercial
 
real estate
 
property performance
 
and the
 
CRE price
 
index, particularly
in the
 
Puerto
 
Rico region,
 
are expected
 
to continue
 
to perform
 
in a
 
more
 
favorable
 
manner than
 
the alternative
 
downside economic
scenario. The
 
economic scenarios
 
used in
 
the ACL determination
 
contained assumptions
 
related to
 
economic uncertainties
 
associated
with geopolitical instability,
 
the CRE price index, unemployment
 
rate, inflation levels, and
 
expected future interest rate
 
adjustments in
the Federal Reserve Board’s funds
 
rate.
 
 
 
 
 
 
 
110
As of
 
September 30,
 
2025, the
 
Corporation’s
 
ACL model
 
considered the
 
following assumptions
 
for key
 
economic variables
 
in the
probability-weighted economic scenarios:
●
CRE price
 
index at
 
the national
 
level with
 
an average
 
projected contraction
 
of 1.20%
 
and 0.45%
 
for the
 
remainder of
 
2025
and for the year
 
2026, respectively,
 
compared to an average
 
projected contraction of
 
0.42% for the remainder
 
of 2025 and an
average projected appreciation of 4.42% for the year 2026 as of December
 
31, 2024.
 
●
Regional
 
Home Price Index forecast
 
in Puerto Rico (purchase
 
only prices) shows an
 
improvement of 18.94%
 
and 18.87% for
the remainder of 2025
 
and for the year 2026,
 
respectively, when
 
compared to the same
 
periods as of December
 
31, 2024. For
the
 
Florida
 
region,
 
the
 
Home
 
Price
 
Index
 
forecast
 
shows
 
an
 
improvement
 
of
 
2.59%
 
and
 
a
 
deterioration
 
of
 
0.85%
 
for
 
the
remainder of 2025 and for the year 2026, respectively,
 
when compared to the same periods as of December 31, 2024.
 
●
Average
 
regional unemployment rate
 
in Puerto Rico is
 
forecasted at 5.96%
 
for the remainder
 
of 2025 and 6.44%
 
for the year
2026, compared
 
to 6.44%
 
for the
 
remainder of
 
2025
 
and 6.21%
 
for the
 
year 2026
 
as of December
 
31, 2024.
 
For the
 
Florida
region and
 
the U.S. mainland,
 
average unemployment
 
rate is forecasted
 
at 4.36%
 
and 4.79%,
 
respectively,
 
for the
 
remainder
of
 
2025,
 
and
 
5.09%
 
and
 
5.51%,
 
respectively,
 
for
 
the
 
year
 
2026,
 
compared
 
to
 
4.71%
 
and
 
5.20%,
 
respectively,
 
for
 
the
remainder of 2025, and 4.15% and 4.60%, respectively,
 
for the year 2026, as of December 31, 2024.
●
Annualized change in
 
GDP in the U.S.
 
mainland of 0.96% for
 
the remainder of 2025
 
and 0.76%
 
for the year 2026,
 
compared
to 1.05%
 
for the remainder of 2025
 
and 1.91%
 
for the year 2026, as of December 31, 2024.
It is difficult to estimate how potential changes
 
in one factor or input might affect the overall ACL because
 
management considers a
wide variety of
 
factors and inputs in
 
estimating the ACL.
 
Changes in the
 
factors and inputs considered
 
may not occur
 
at the same rate
and may not be consistent
 
across all geographies or product
 
types, and changes in factors
 
and inputs may be directionally
 
inconsistent,
such that improvement
 
in one factor
 
or input may
 
offset deterioration
 
in others. However,
 
to demonstrate the
 
sensitivity of credit
 
loss
estimates to macroeconomic
 
forecasts as of
 
September 30, 2025,
 
management compared the
 
modeled estimates under
 
the probability-
weighted
 
economic
 
scenarios
 
against
 
a
 
more
 
adverse
 
scenario.
 
Such
 
scenario
 
incorporates
 
an
 
additional
 
adverse
 
scenario
 
and
decreases the
 
weight applied
 
to the
 
baseline scenario.
 
Under this
 
more adverse
 
scenario, as
 
an example,
 
average unemployment
 
rate
for the
 
Puerto Rico
 
region increases
 
to 6.19%
 
for the
 
remainder of
 
2025, compared
 
to 5.96%
 
for the
 
same period
 
on the
 
probability-
weighted economic scenario projections.
To
 
demonstrate the sensitivity
 
to key economic
 
parameters used in
 
the calculation of
 
the ACL at September
 
30, 2025, management
calculated
 
the
 
difference
 
between
 
the
 
quantitative
 
ACL
 
and
 
this
 
more
 
adverse
 
scenario.
 
Excluding
 
consideration
 
of
 
qualitative
adjustments, this sensitivity analysis would result in a hypothetical
 
increase in the ACL of approximately $45 million at September
 
30,
2025.
 
This analysis
 
relates only
 
to the
 
modeled credit
 
loss estimates
 
and is
 
not intended
 
to estimate
 
changes in
 
the overall
 
ACL as
 
it
does
 
not
 
reflect
 
any
 
potential
 
changes
 
in
 
other
 
adjustments
 
to
 
the
 
qualitative
 
calculation,
 
which
 
would
 
also
 
be
 
influenced
 
by
 
the
judgment
 
management
 
applies
 
to
 
the
 
modeled
 
lifetime
 
loss
 
estimates
 
to
 
reflect
 
the
 
uncertainty
 
and
 
imprecision
 
of
 
these
 
estimates
based
 
on
 
current
 
circumstances
 
and
 
conditions.
 
Recognizing
 
that
 
forecasts
 
of
 
macroeconomic
 
conditions
 
are
 
inherently
 
uncertain,
particularly in
 
light of
 
recent economic
 
conditions and
 
challenges, which
 
continue to
 
evolve, management
 
believes that
 
its process
 
to
consider the
 
available information
 
and associated
 
risks and
 
uncertainties is
 
appropriately governed
 
and that
 
its estimates
 
of expected
credit losses were reasonable and appropriate for the period ended
 
September 30, 2025.
As
 
of
 
September
 
30,
 
2025,
 
the
 
ACL
 
for
 
loans
 
and
 
finance
 
leases
 
was
 
$247.0
 
million,
 
an
 
increase
 
of
 
$3.1
 
million,
 
from
 
$243.9
million as of December 31, 2024. The increase
 
was mainly related to the ACL for commercial and construction
 
loans, which increased
by
 
$9.3
 
million,
 
mainly
 
due
 
to
 
C&I
 
loan
 
growth,
 
a
 
deterioration
 
in
 
the
 
economic
 
outlook
 
of
 
the
 
commercial
 
real
 
estate
 
property
performance and the forecasted CRE price index,
 
and updated historical prepayment experience.
Meanwhile, the
 
ACL for
 
consumer loans
 
decreased by
 
$5.8 million,
 
driven by
 
improvements in
 
macroeconomic variables,
 
mainly
in
 
the
 
projection
 
of
 
the
 
unemployment
 
rate,
 
and
 
reductions
 
in
 
the
 
unsecured
 
loan
 
portfolio
 
volumes,
 
partially
 
offset
 
by
 
updated
historical
 
loss
 
experience
 
used
 
for
 
determining
 
the
 
ACL
 
estimate
 
in
 
the
 
unsecured
 
loan
 
portfolio.
 
Also,
 
the
 
ACL
 
for
 
residential
mortgage loans
 
decreased by
 
$0.4 million
 
mainly due
 
to improvements
 
in macroeconomic
 
variables, such
 
as the
 
unemployment rate
and the
 
Housing Price
 
Index, and
 
updated historical
 
loss experience
 
used for
 
determining the
 
ACL estimate
 
resulting in
 
a downward
revision of
 
estimated loss
 
severities and
 
lower required
 
reserve levels,
 
partially offset
 
by the
 
longer expected
 
life of
 
newly originated
loans.
The ratio
 
of the ACL
 
for loans and
 
finance leases
 
to total
 
loans held
 
for investment
 
decreased to
 
1.89%
 
as of September
 
30, 2025,
compared to 1.91% as of December 31, 2024. An explanation for the change
 
for each portfolio follows:
●
The ACL to total
 
loans ratio for the
 
residential mortgage loan
 
portfolio decreased from
 
1.44% as of December
 
31, 2024 to
1.39% as of September 30, 2025, driven by the aforementioned factors.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
111
●
The ACL
 
to total
 
loans ratio
 
for the
 
construction loan
 
portfolio increased
 
from 1.67%
 
as of
 
December 31,
 
2024 to
 
2.06%
as of
 
September 30,
 
2025, driven
 
by the
 
aforementioned deterioration
 
in the
 
commercial real
 
estate property
 
performance
and the inflow
 
to nonaccrual status
 
of a $4.3
 
million loan
 
in the Puerto
 
Rico region
 
which triggered
 
an additional ACL
 
of
$0.4 million based on the collateral value.
●
The ACL to total loans ratio for the commercial mortgage
 
loan portfolio increased from 0.87% as of December 31, 2024 to
0.99%
 
as
 
of
 
September
 
30,
 
2025,
 
driven
 
by
 
the
 
aforementioned
 
deterioration
 
in
 
the
 
commercial
 
real
 
estate
 
property
performance and the forecasted CRE price index, and updated historical prepayment
 
experience.
●
The
 
ACL to
 
total loans
 
ratio for
 
the C&I
 
loan portfolio
 
increased
 
from
 
0.98%
 
as of
 
December
 
31,
 
2024
 
to 1.05%
 
as of
September 30, 2025,
driven by the impact of renewals and refinancings.
●
The ACL to
 
total loans ratio
 
for the consumer
 
loan portfolio decreased
 
from 3.83% as
 
of December
 
31, 2024
 
to 3.70% as
of September 30, 2025, mainly due to the aforementioned improvements
 
in macroeconomic variables and a change in asset
mix due to a reduction in the unsecured loan portfolio,
 
partially offset by updated historical loss experience.
 
The ratio
 
of the
 
total ACL
 
for loans
 
and finance
 
leases to
 
nonaccrual loans
 
held for
 
investment was
 
256.58%
 
as of
 
September 30,
2025,
 
compared
 
to
 
278.90%
 
as
 
of
 
December
 
31,
 
2024,
 
driven
 
by
 
the
 
inflow
 
to
 
nonaccrual
 
status
 
of
 
a
 
$12.6
 
million
 
commercial
mortgage
 
loan
 
in the
 
Florida region,
 
which
 
did not
 
trigger any
 
additional
 
ACL based
 
on the
 
collateral
 
value,
 
partially
 
offset
 
by the
aforementioned increase in ACL to total loans ratio in the construction
 
loan portfolio.
 
See “Results of Operations
 
- Provision for
 
Credit Losses” above
 
and Note 4 –
 
“Allowance for Credit
 
Losses for Loans
 
and Finance
Leases” above for additional information.
Quarter Ended September 30,
Nine-Month Period Ended September 30,
2025
2024
2025
2024
(Dollars in thousands)
ACL for loans and finance leases, beginning of period
$
248,578
$
254,532
$
243,942
$
261,843
Provision for credit losses - (benefit) expense:
Residential mortgage
(2,208)
(5,476)
(411)
(16,533)
Construction
496
(1,659)
1,196
(1,642)
Commercial mortgage
2,503
(5,914)
2,711
(8,900)
C&I
(1,397)
885
4,091
(2,871)
Consumer loans and finance leases
18,876
28,634
55,901
71,263
Total provision for credit losses
 
- expense
18,270
16,470
63,488
41,317
Charge-offs:
Residential mortgage
(459)
(421)
(979)
(1,428)
C&I
(173)
(1,437)
(316)
(2,317)
Consumer loans and finance leases
(24,553)
(27,187)
(76,629)
(81,053)
Total charge offs
(25,185)
(29,045)
(77,924)
(84,798)
Recoveries:
Residential mortgage
491
497
1,008
1,215
Construction
313
11
340
35
Commercial mortgage
117
41
208
474
C&I
 
65
211
1,045
6,291
Consumer loans and finance leases
(1)
4,341
4,279
14,883
20,619
Total recoveries
5,327
5,039
17,484
28,634
Net charge-offs
(19,858)
(24,006)
(60,440)
(56,164)
ACL for loans and finance leases, end of period
$
246,990
$
246,996
$
246,990
$
246,996
ACL for loans and finance leases to period-end total loans
 
held for investment
1.89%
1.98%
1.89%
1.98%
Net charge-offs to average loans outstanding
 
during the period
(2)
0.62%
0.78%
0.63%
0.61%
Provision for credit losses - expense for loans and finance
 
leases to net charge-offs during the
period
0.92x
0.69x
1.05x
0.74x
(1)
For the nine-month periods ended September 30, 2025 and 2024, includes recoveries totaling $2.4 million and $10.0 million, respectively, associated with the bulk sales of fully charged-off consumer loans and finance
leases.
(2)
The recoveries associated with the aforementioned bulk sales reduced the ratio of total net charge-offs to related average loans by 3 bps and 11 bps for the nine-month periods ended September 30, 2025 and 2024, The following tables set forth information concerning the composition of the Corporation's loan portfolio and related ACL by loan
respectively.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
112
category, and the percentage
 
of loan balances in each category to the total of such loans as of the indicated dates:
As of September 30, 2025
Residential
Mortgage
Loans
Commercial
Mortgage
Loans
C&I Loans
Consumer Loans
and Finance
Leases
Construction
Loans
(Dollars in thousands)
Total
Total loans held for investment:
 
Amortized cost of loans
$
2,889,081
$
259,863
$
2,549,375
$
3,614,241
$
3,736,124
$
13,048,684
 
Percent of loans in each category to total loans
22
%
2
%
20
%
28
%
28
%
100
%
 
Allowance for credit losses
$
40,272
$
5,360
$
25,366
$
37,854
$
138,138
$
246,990
 
Allowance for credit losses to amortized cost
1.39
%
2.06
%
0.99
%
1.05
%
3.70
%
1.89
%
As of December 31, 2024
Residential
Mortgage
Loans
Commercial
Mortgage
Loans
C&I Loans
Consumer Loans
and Finance
 
Leases
Construction
Loans
(Dollars in thousands)
Total
Total loans held for investment:
 
Amortized cost of loans
$
2,828,431
$
228,396
$
2,565,984
$
3,366,038
$
3,757,707
$
12,746,556
 
Percent of loans in each category to total loans
22
%
2
%
20
%
26
%
30
%
100
%
 
Allowance for credit losses
$
40,654
$
3,824
$
22,447
$
33,034
$
143,983
$
243,942
 
Allowance for credit losses to amortized cost
1.44
%
1.67
%
0.87
%
0.98
%
3.83
%
1.91
%
Allowance for Credit Losses for Unfunded
 
Loan Commitments
The Corporation estimates
 
expected credit losses
 
over the contractual
 
period in which
 
the Corporation is
 
exposed to credit
 
risk as a
result
 
of
 
a
 
contractual
 
obligation
 
to
 
extend
 
credit,
 
such as
 
pursuant
 
to unfunded
 
loan
 
commitments
 
and
 
standby
 
letters of
 
credit
 
for
commercial and
 
construction loans,
 
unless the
 
obligation is
 
unconditionally cancellable
 
by the
 
Corporation. The
 
ACL for
 
off-balance
sheet credit
 
exposures
 
is adjusted
 
as a
 
provision
 
for
 
credit loss
 
expense.
 
As of
 
September
 
30,
 
2025,
 
the ACL
 
for
 
off-balance
 
sheet
credit exposures decreased by $0.5 million to $2.6 million, when compared
 
to December 31, 2024.
Allowance for Credit Losses for Debt Securities
As
 
of
 
September
 
30,
 
2025,
 
the
 
ACL
 
for
 
debt
 
securities
 
was
 
$1.4
 
million,
 
of
 
which
 
$0.7
 
million
 
was
 
related
 
to
 
Puerto
 
Rico
municipal bonds classified as held-to-maturity,
 
compared to $1.3 million and $0.8 million, respectively,
 
as of December 31, 2024.
 
Nonaccrual Loans and Non-Performing Assets
Total
 
non-performing
 
assets consist
 
of nonaccrual
 
loans (generally
 
loans held
 
for
 
investment or
 
loans held
 
for
 
sale for
 
which
 
the
recognition of
 
interest income
 
was discontinued
 
when the
 
loan became
 
90 days
 
past due
 
or earlier
 
if the
 
full and
 
timely collection
 
of
interest or principal is uncertain), foreclosed real estate and
 
other repossessed properties (generally repossessed automobiles),
 
and non-
performing investment
 
securities, if
 
any.
 
See Note
 
1 –
 
“Nature of
 
Business and
 
Summary of
 
Significant Accounting
 
Policies” to
 
the
audited consolidated
 
financial statements included
 
in the 2024
 
Annual Report on
 
Form 10-K for
 
information on
 
the policies followed
by the Corporation to classify loans in nonaccrual status or 90 days and still accruing.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
113
 
The following table shows non-performing assets by geographic segment as of
 
the indicated dates:
September 30, 2025
December 31, 2024
(In thousands)
Puerto Rico:
Nonaccrual loans held for investment:
Residential mortgage
$
12,088
$
16,854
Construction
4,635
403
Commercial mortgage
1,984
2,716
C&I
18,822
19,595
Consumer loans and finance leases
20,008
22,538
Total nonaccrual loans held for investment
57,537
62,106
OREO
8,460
13,691
Other repossessed property
12,160
11,637
Other assets
(1)
1,579
1,620
Total non-performing assets
$
79,736
$
89,054
Past due loans 90 days and still accruing
$
27,900
$
39,307
Virgin Islands:
Nonaccrual loans held for investment:
Residential mortgage
$
6,529
$
6,555
Construction
956
962
Commercial mortgage
7,228
8,135
C&I
632
919
Consumer loans
694
205
Total nonaccrual loans held for investment
16,039
16,776
OREO
(2)
883
3,615
Other repossessed property
74
219
Total non-performing assets
$
16,996
$
20,610
Past due loans 90 days and still accruing
$
855
$
3,083
United States:
Nonaccrual loans held for investment:
Residential mortgage
$
10,249
$
8,540
Commercial mortgage
12,225
-
C&I
196
-
Consumer loans
15
45
Total nonaccrual loans held for investment
22,685
8,585
Other repossessed property
-
3
Total non-performing assets
$
22,685
$
8,588
Past due loans 90 days and still accruing
$
136
$
-
Total
Nonaccrual loans held for investment:
Residential mortgage
$
28,866
$
31,949
Construction
5,591
1,365
Commercial mortgage
21,437
10,851
C&I
19,650
20,514
Consumer loans and finance leases
20,717
22,788
Total nonaccrual loans held for investment
96,261
87,467
OREO
9,343
17,306
Other repossessed property
12,234
11,859
Other assets
(1)
1,579
1,620
Total non-performing assets
$
119,417
$
118,252
Past due loans 90 days and still accruing
(3) (4) (5) (6)
$
28,891
$
42,390
Non-performing assets to total assets
 
0.62%
0.61%
Nonaccrual loans held for investment to total loans held for investment
0.74%
0.69%
ACL for loans and finance leases
$
246,990
$
243,942
ACL for loans and finance leases to total nonaccrual loans held
 
for investment
256.58%
278.90%
ACL for loans and finance leases to total nonaccrual loans held
 
for investment, excluding residential real estate loans
366.48%
439.39%
(1)
Residential pass-through MBS issued by the PRHFA held as
 
part of the available-for-sale debt securities portfolio.
(2)
During the third quarter of 2025,
 
the Corporation recorded the aforementioned $2.8
 
million valuation adjustment in connection with
 
ongoing litigation involving a commercial
 
OREO property in the
Virgin Islands region. See Note 19 - “Regulatory Matters,
 
Commitments and Contingencies” for further details.
(3)
Includes PCD
 
loans previously
 
accounted for
 
under ASC
 
Subtopic 310-30
 
for which
 
the Corporation
 
made the
 
accounting policy
 
election to
 
treat each
 
pool as
 
a single
 
asset, both
 
at the
 
time of
adoption of CECL on
 
January 1, 2020 and
 
on an ongoing
 
basis for credit loss
 
measurement. These loans
 
will continue to be
 
excluded from nonaccrual
 
loan statistics as long
 
as the Corporation
 
can
reasonably estimate the timing
 
and amount of cash flows
 
expected to be collected on
 
the loan pools.
 
The portion of such loans
 
contractually past due 90
 
days or more amounted to
 
$5.0 million and
$6.2 million as of September 30, 2025 and December 31, 2024, respectively.
(4)
Includes FHA/VA
 
government-guaranteed residential
 
mortgage loans
 
as loans
 
past due
 
90 days
 
and still
 
accruing as
 
opposed to
 
nonaccrual loans.
 
The Corporation
 
continues accruing
 
interest on
these loans
 
until they
 
have passed
 
the 15
 
months delinquency
 
mark, taking
 
into consideration
 
the FHA
 
interest curtailment
 
process. These
 
balances include
 
$5.0 million
 
and $8.0
 
million of
 
FHA
government guaranteed residential mortgage loans that were over 15 months delinquent as of September 30, 2025 and
 
December 31, 2024, respectively.
(5)
These includes
 
rebooked loans,
 
which were
 
previously pooled into
 
GNMA securities,
 
amounting to
 
$3.8 million
 
and $5.7
 
million as
 
of September 30,
 
2025 and
 
December 31,
 
2024, respectively.
Under the GNMA program, the Corporation
 
has the option but not
 
the obligation to repurchase loans
 
that meet GNMA’s
 
specified delinquency criteria. For
 
accounting purposes, the loans subject to
the repurchase option are required to be reflected on the financial statements with an offsetting liability.
(6)
Includes credit cards that continue accruing interest until charged-off at 180 days
 
delinquent.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
114
Total
 
non-performing assets
 
increased by
 
$1.1 million
 
to $119.4
 
million as
 
of September
 
30, 2025,
 
compared to
 
$118.3 million
 
as
of December
 
31, 2024.
 
The increase
 
in non-performing
 
assets was
 
driven by
 
a $13.9
 
million increase
 
in nonaccrual
 
commercial and
construction loans,
 
mainly due
 
to the
 
inflows to
 
nonaccrual status
 
of a
 
$12.6 million
 
commercial mortgage
 
loan in
 
the Florida
 
region
and
 
a
 
$4.3
 
million
 
construction
 
loan
 
in
 
the
 
Puerto
 
Rico
 
region,
 
both
 
in
 
the
 
hospitality
 
industry;
 
partially
 
offset
 
by
 
an
 
$8.0
 
million
decrease in the
 
OREO portfolio balance,
 
mainly attributable to
 
the sales of residential
 
OREO properties in
 
the Puerto Rico
 
region and
the aforementioned
 
$2.8 million
 
valuation adjustment
 
recorded in
 
a commercial
 
OREO property
 
in the
 
Virgin
 
Islands region;
 
a $3.0
million decrease in nonaccrual residential mortgage loans;
 
and a $2.1 million decrease in consumer loans and finance leases.
 
The following tables present the activity of commercial and construction
 
nonaccrual loans held for investment for the indicated
periods:
Construction
Commercial
Mortgage
C&I
Total
(In thousands)
Quarter Ended September 30, 2025
Beginning balance
$
5,718
$
22,905
$
20,349
$
48,972
Plus:
Additions to nonaccrual
 
-
155
134
289
Less:
Loans returned to accrual status
(118)
(853)
(228)
(1,199)
Nonaccrual loans charge-offs
-
-
(137)
(137)
Loan collections
(9)
(770)
(468)
(1,247)
Ending balance
 
$
5,591
$
21,437
$
19,650
$
46,678
Construction
Commercial
Mortgage
C&I
Total
(In thousands)
Quarter Ended September 30, 2024
Beginning balance
$
4,742
$
11,736
$
27,661
$
44,139
Plus:
Additions to nonaccrual
-
100
902
1,002
Less:
Nonaccrual loans charge-offs
-
-
(1,350)
(1,350)
Loan collections
(91)
(340)
(651)
(1,082)
Nonaccrual loans sold, net of charge-offs
-
-
(8,200)
(8,200)
Ending balance
 
$
4,651
$
11,496
$
18,362
$
34,509
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
115
Construction
Commercial
Mortgage
C&I
 
Total
(In thousands)
Nine-Month Period Ended September 30, 2025
Beginning balance
$
1,365
$
10,851
$
20,514
$
32,730
Plus:
Additions to nonaccrual
 
4,371
(1)
13,439
(1)
1,523
19,333
Less:
Loans returned to accrual status
(118)
(1,202)
(393)
(1,713)
Nonaccrual loans transferred to OREO
-
(54)
(203)
(257)
Nonaccrual loans charge-offs
-
-
(184)
(184)
Loan collections
(27)
(1,597)
(1,607)
(3,231)
Ending balance
 
$
5,591
$
21,437
$
19,650
$
46,678
(1)
Include inflows to nonaccrual status of a $12.6 million commercial
 
mortgage loan in the Florida region and a $4.3 million construction
 
loan in the Puerto Rico region.
Construction
Commercial
Mortgage
C&I
 
Total
(In thousands)
Nine-Month Period Ended September 30, 2024
Beginning balance
$
1,569
$
12,205
$
15,250
$
29,024
Plus:
Additions to nonaccrual
3,300
 
(1)
107
26,743
 
(1)
30,150
Less:
Loans returned to accrual status
(35)
(77)
(9,226)
 
(2)
(9,338)
Nonaccrual loans transferred to OREO
(48)
-
(684)
(732)
Nonaccrual loans charge-offs
-
-
(2,141)
(2,141)
Loan collections
(135)
(739)
(3,380)
(4,254)
Nonaccrual loans sold, net of charge-offs
-
-
(8,200)
(8,200)
Ending balance
 
$
4,651
$
11,496
$
18,362
$
34,509
(1)
Include inflows to nonaccrual status of a $10.5 million participated
 
C&I loan in the Florida region in the power generation industry
 
and a $16.5 million commercial relationship in the Puerto
Rico region in the food retail industry.
(2)
Mainly related to the restoration to accrual status of the aforementioned
 
participated C&I loan in the Florida region associated with
 
the power generation industry that entered in nonaccrual
status during the first quarter of 2024.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
116
The following table presents the activity of residential nonaccrual loans
 
held for investment for the indicated periods:
Quarter Ended September 30,
Nine-Month Period Ended September 30,
2025
2024
2025
2024
(In thousands)
Beginning balance
 
$
30,790
$
31,396
$
31,949
$
32,239
 
Plus:
 
Additions to nonaccrual
3,131
4,678
12,613
12,671
 
Less:
 
Loans returned to accrual status
 
(3,721)
(2,692)
(10,325)
(7,662)
 
Nonaccrual loans transferred to OREO
(243)
(477)
(1,158)
(1,624)
 
Nonaccrual loans charge-offs
(26)
(2)
(63)
(280)
 
Loan collections
(1,065)
(1,174)
(4,150)
(3,615)
Ending balance
 
$
28,866
$
31,729
$
28,866
$
31,729
The amount of nonaccrual consumer loans, including
 
finance leases, decreased by $2.1 million to $20.7
 
million as of September 30,
2025,
 
mainly related to
 
a decrease in
 
auto loans
 
and finance leases.
 
The inflows
 
of nonaccrual
 
consumer loans
 
during the nine
 
-month
period ended September 30, 2025 amounted to $78.1 million, compared
 
to inflows of $86.6 million for the same period in 2024.
As of
 
September 30,
 
2025, approximately
 
$37.5 million,
 
or 39%,
 
of the
 
loans placed
 
in nonaccrual
 
status, mainly
 
commercial and
residential
 
mortgage
 
loans,
 
were
 
current,
 
or
 
had
 
delinquencies
 
of
 
less
 
than
 
90
 
days
 
in
 
their
 
interest
 
payments.
 
Collections
 
on
nonaccrual loans are being recorded on a cash basis through earnings,
 
or on a cost-recovery basis, as conditions warrant.
 
During the nine-month period ended
 
September 30, 2025, interest income of
 
approximately $1.2 million related to
 
nonaccrual loans
with a
 
carrying value
 
of $44.1
 
million as
 
of September
 
30, 2025,
 
mainly nonaccrual
 
commercial and
 
construction loans,
 
was applied
against the related principal balances under the cost-recovery method.
Total loans in early
 
delinquency (
i.e.
, 30-89 days past due loans, as defined in regulatory reporting
 
instructions) amounted to $142.9
million as of
 
September 30, 2025,
 
a decrease of
 
$10.1 million, compared
 
to $153.0 million
 
as of December
 
31, 2024, mainly
 
due to a
$13.0 million
 
decrease in consumer
 
loans across all
 
major portfolio
 
classes and a
 
$5.5 million decrease
 
in residential mortgage
 
loans,
partially offset by an $8.4 million increase in commercial
 
and construction loans due to a $6.0 million past due C&I loan in the Florida
region.
In
 
addition,
 
the
 
Corporation
 
provides
 
homeownership
 
preservation
 
assistance
 
to
 
its
 
customers
 
through
 
a
 
loss
 
mitigation
program. Depending upon the nature of a borrower’s
 
financial condition, restructurings or loan
 
modifications through this program are
provided,
 
as well
 
as other
 
modifications of
 
individual C&I,
 
commercial
 
mortgage, construction,
 
and residential
 
mortgage loans.
 
For
the nine-month period ended
 
September 30, 2025, loans
 
modified to borrowers experiencing
 
financial difficulty had
 
an amortized cost
basis of
 
$39.5 million,
 
which included
 
$30.2 million
 
related to
 
a commercial
 
mortgage loan
 
in the
 
Puerto Rico
 
region that
 
had been
previously modified during 2023 and reported as a financial difficulty
 
modification; compared to $126.9 million for the same period in
2024, which included $110.
 
7
 
million related to a commercial
 
mortgage relationship in the Puerto
 
Rico region that had been previously
reported as a troubled
 
debt restructuring under ASC 310
 
-40. See Note 3 – “Loans
 
Held for Investment” for
 
additional information and
statistics about the Corporation’s
 
modified loans.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
117
The OREO portfolio, which
 
is part of non-performing
 
assets, amounted to $9.3
 
million as of September
 
30, 2025 and $17.3
 
million
as of December 31,
 
2024. The following
 
tables show the composition
 
of the OREO portfolio
 
as of September 30,
 
2025 and December
31, 2024, as well as the activity of the OREO portfolio by geographic area
 
during the nine-month period ended September 30, 2025:
OREO Composition by Region
 
As of September 30, 2025
(In thousands)
Puerto Rico
Virgin Islands
Florida
Consolidated
Residential
 
$
7,464
$
883
$
-
$
8,347
Construction
435
-
-
435
Commercial
561
-
(1)
-
561
$
8,460
$
883
$
-
$
9,343
As of December 31, 2024
(In thousands)
Puerto Rico
Virgin Islands
Florida
Consolidated
Residential
 
$
12,092
$
805
$
-
$
12,897
Construction
522
-
-
522
Commercial
1,077
2,810
(1)
-
3,887
$
13,691
$
3,615
$
-
$
17,306
OREO Activity by Region
 
Nine-Month Period Ended September 30, 2025
(In thousands)
Puerto Rico
Virgin Islands
Florida
Consolidated
Beginning Balance
$
13,691
$
3,615
$
-
$
17,306
Additions
3,505
78
-
3,583
Sales
(8,000)
-
-
(8,000)
Subsequent measurement adjustments
(337)
(2,810)
(1)
-
(3,147)
Other adjustments
(399)
-
-
(399)
Ending Balance
$
8,460
$
883
$
-
$
9,343
(1)
During the third quarter of 2025, the Corporation recorded the aforementioned
 
$2.8 million valuation adjustment in connection with ongoing
 
litigation involving a
commercial OREO property in the Virgin Islands region. See Note 19 – “Regulatory Matters,
 
Commitments and Contingencies” for further details.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
118
The following table presents information about the OREO inventory
 
and related gains and losses for the indicated periods:
Quarter Ended September 30,
Nine-Month Period Ended September 30,
2025
2024
2025
2024
(Dollars in thousands)
OREO
OREO balances, carrying value:
Residential
$
8,347
$
14,451
$
8,347
$
14,451
Construction
435
1,125
435
1,125
Commercial
561
3,754
561
3,754
Total
$
9,343
$
19,330
$
9,343
$
19,330
OREO activity (number of properties):
Beginning property inventory
141
222
181
277
Properties acquired
8
26
32
75
Properties disposed
(32)
(51)
(96)
(155)
Ending property inventory
117
197
117
197
Average holding period (in days)
Residential
597
501
597
501
Construction
1,837
2,491
1,837
2,491
Commercial
4,212
3,992
4,212
3,992
Total average holding period (in days)
1,644
1,295
1,644
1,295
OREO operations (gain) loss:
Market adjustments and (gains) losses on sale:
Residential
$
(1,461)
$
(1,543)
$
(3,722)
$
(5,287)
Construction
-
(49)
(71)
(68)
Commercial
2,241
(1)
(246)
2,442
(1)
(2,468)
Total net loss (gain)
780
(1,838)
(1,351)
(7,823)
Other OREO operations expenses
253
499
664
1,423
Net Loss (Gain) on OREO operations
$
1,033
$
(1,339)
$
(687)
$
(6,400)
(1)
During the third quarter of 2025, the Corporation recorded the
 
aforementioned $2.8 million valuation adjustment in connection
 
with ongoing litigation involving a commercial OREO
property in the Virgin Islands region.
 
See Note 19 – “Regulatory Matters, Commitments and
 
Contingencies” for further details.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
119
Net Charge-offs and Total
 
Credit Losses
 
Net
 
charge-offs
 
totaled
 
$19.9
 
million
 
for
 
the third
 
quarter
 
of
 
2025,
 
or an
 
annualized
 
0.62% of
 
average loans,
 
compared
 
to $24.0
million, or an annualized
 
0.78% of average loans,
 
for the third quarter
 
of 2024. The decrease
 
in net charge-offs
 
for the third quarter
 
of
2025 was
 
driven by
 
a $2.7
 
million decrease
 
in consumer
 
loans and
 
finance leases
 
net charge-offs,
 
a $1.2
 
million charge-off
 
recorded
on the
 
sale of
 
a nonaccrual
 
C&I loan
 
in Puerto
 
Rico region
 
during the
 
third quarter
 
of 2024,
 
and a
 
$0.3 million
 
recovery associated
with
 
a
 
construction
 
loan
 
in
 
the
 
Florida
 
region
 
during
 
the
 
third
 
quarter
 
of
 
2025.
 
For
 
the
 
first
 
nine
 
months
 
of
 
2025,
 
net
 
charge-offs
totaled $60.4
 
million, or
 
an annualized 0.63%
 
of average
 
loans, compared
 
to $56.2 million,
 
or an annualized
 
0.61% of average
 
loans,
for
 
the
 
same
 
period
 
in
 
2024.
 
Net
 
charge-offs
 
for
 
the
 
first
 
nine
 
months
 
of
 
2025
 
and
 
2024
 
included
 
$2.4
 
million
 
and
 
$10.0
 
million,
respectively,
 
in recoveries
 
associated with
 
the bulk
 
sales of fully
 
charged-off
 
consumer loans
 
and finance
 
leases during
 
such periods,
which reduced the
 
ratio of total net
 
charge-offs to
 
related average loans
 
by 3 bps and
 
11 bps,
 
respectively.
 
The increase in
 
net charge-
offs
 
for the first nine
 
months of 2025 was
 
also driven by a
 
$5.0 million recovery
 
associated with a C&I
 
loan in the Puerto
 
Rico region
during the first nine months of 2024, partially offset by a decrease in
 
consumer loans and finance leases net charge-offs.
 
The following table presents net (recoveries) charge-offs
 
to average loans held-in-portfolio for the indicated periods:
Quarter Ended September 30,
Nine-Month Period Ended September 30,
2025
2024
2025
2024
Residential mortgage
 
(0.00)
%
(0.01)
%
(0.00)
%
0.01
%
Construction
 
(0.50)
%
(0.02)
%
(0.19)
%
(0.02)
%
Commercial mortgage
(0.02)
%
(0.01)
%
(0.01)
%
(0.03)
%
C&I
0.01
%
0.15
%
(0.03)
%
(0.17)
%
Consumer loans and finance leases
 
(1)
2.16
%
2.46
%
2.20
%
2.18
%
Total loans
 
(1)
0.62
%
0.78
%
0.63
%
0.61
%
(1)
The net charge-offs for the nine-month periods
 
ended September 30, 2025 and 2024 included $2.4 million and $10.0
 
million, respectively, in recoveries
 
associated with the bulk sales of
fully charged-off consumer loans and finance leases. These
 
recoveries reduced the ratios of consumer loans and finance leases
 
and total net charge-offs to related average loans
 
for the nine-
month period ended September 30, 2025 by 8 bps and 3
 
bps, respectively, and by 36 bps and
 
11 bps, respectively,
 
for the nine-month period ended September 30, 2024.
 
The following table presents net (recoveries) charge-offs
 
to average loans held in various portfolios by geographic segment for the
indicated periods:
Quarter Ended September 30,
Nine-Month Period Ended September 30,
2025
2024
2025
2024
PUERTO RICO:
Residential mortgage
(0.01)
%
(0.01)
%
(0.00)
%
0.01
%
Commercial mortgage
(0.00)
%
(0.00)
%
(0.00)
%
(0.00)
%
C&I
0.02
%
0.23
%
(0.04)
%
(0.21)
%
Consumer loans and finance leases
(1)
2.17
%
2.45
%
2.21
%
2.17
%
Total loans
(1)
0.80
%
0.96
%
0.81
%
0.76
%
VIRGIN ISLANDS:
Commercial mortgage
(0.61)
%
(0.23)
%
(0.34)
%
(0.22)
%
C&I
-
%
0.07
%
0.02
%
0.02
%
Consumer loans and finance leases
2.22
%
3.37
%
1.64
%
3.20
%
Total loans
0.23
%
0.57
%
0.20
%
0.50
%
FLORIDA:
Residential mortgage
0.00
%
(0.00)
%
(0.00)
%
-
%
Construction
 
(4.50)
%
(0.16)
%
(1.24)
%
(0.07)
%
Commercial mortgage
-
%
-
%
-
%
(0.08)
%
C&I
(0.00)
%
(0.00)
%
(0.00)
%
(0.08)
%
Consumer loans and finance leases
(0.61)
%
(1.48)
%
(0.44)
%
(1.61)
%
Total loans
(0.05)
%
(0.01)
%
(0.02)
%
(0.07)
%
(1)
The recoveries associated with the aforementioned bulk sales of fully charged-off consumer loans and finance leases reduced the ratios of consumer loans and finance leases and total net charge-offs to related average
loans for the nine-month period ended September 30, 2025 by 9 bps and 3 bps, respectively, and by 37 bps and 14 bps, respectively, for the nine-month
 
period ended September 30, 2024.
 
 
 
 
 
 
 
 
 
120
Operational Risk
The
 
Corporation
 
faces
 
ongoing
 
and
 
emerging
 
risk
 
and
 
regulatory
 
pressure
 
related
 
to
 
the
 
activities
 
that
 
surround
 
the
 
delivery
 
of
banking
 
and
 
financial
 
products.
 
Coupled
 
with
 
external
 
influences,
 
such
 
as
 
market
 
conditions,
 
security
 
risks,
 
and
 
legal
 
risks,
 
the
potential for
 
operational and
 
reputational loss
 
has increased.
 
To
 
mitigate and
 
control operational
 
risk, the
 
Corporation has
 
developed,
and continues
 
to enhance, specific
 
internal controls,
 
policies and procedures
 
that are designed
 
to identify and
 
manage operational risk
at
 
appropriate
 
levels
 
throughout
 
the
 
organization.
 
The
 
purpose
 
of
 
these
 
mechanisms
 
is
 
to
 
provide
 
reasonable
 
assurance
 
that
 
the
Corporation’s business operations
 
are functioning within the policies and limits established by management.
The
 
Corporation
 
classifies operational
 
risk
 
into
 
two
 
major
 
categories:
 
business-specific
 
and
 
corporate-wide
 
affecting
 
all business
lines. For business specific risks,
 
Enterprise Risk Management
 
works with the various
 
business units to ensure consistency
 
in policies,
processes
 
and
 
assessments.
 
With
 
respect
 
to
 
corporate-wide
 
risks,
 
such
 
as
 
information
 
security,
 
business
 
recovery,
 
and
 
legal
 
and
compliance,
 
the
 
Corporation
 
has
 
specialized
 
groups,
 
such
 
as
 
the
 
Legal
 
Department,
 
Information
 
Security,
 
Corporate
 
Compliance,
Operations and Enterprise
 
Risk Management. These
 
groups assist the lines
 
of business in
 
the development and
 
implementation of risk
management practices specific to the needs of the business groups.
Legal and Compliance Risk
Legal and compliance risk includes
 
the risk of noncompliance with applicable
 
legal and regulatory requirements, the
 
risk of adverse
legal
 
judgments
 
against
 
the
 
Corporation,
 
and
 
the
 
risk
 
that
 
a
 
counterparty’s
 
performance
 
obligations
 
will
 
be
 
unenforceable.
 
The
Corporation
 
is
 
subject
 
to
 
extensive
 
regulation
 
in
 
the
 
different
 
jurisdictions
 
in
 
which
 
it
 
conducts
 
its
 
business,
 
and
 
this
 
regulatory
scrutiny has
 
been significantly
 
increasing over
 
the years.
 
The Corporation
 
has established,
 
and continues
 
to enhance,
 
procedures that
are designed
 
to ensure
 
compliance with
 
all applicable
 
statutory,
 
regulatory
 
and any
 
other legal
 
requirements.
 
The Corporation
 
has a
Compliance
 
Director
 
who
 
reports
 
to
 
the
 
Chief
 
Risk
 
Officer
 
and
 
is
 
responsible
 
for
 
the
 
oversight
 
of
 
regulatory
 
compliance
 
and
implementation
 
of an
 
enterprise-wide compliance
 
risk assessment
 
process.
 
The Compliance
 
division
 
has officer
 
roles in
 
each major
business area with direct reporting responsibilities to the Corporate Compliance
 
Group.
Concentration Risk
The Corporation conducts
 
its operations in
 
a geographically concentrated
 
area, as its main
 
market is Puerto
 
Rico. Of the
 
total gross
loan portfolio held
 
for investment of
 
$13.0 billion as
 
of September 30,
 
2025, the Corporation
 
had credit risk
 
of approximately 77%
 
in
the Puerto Rico region, 19% in the United States region, and 4% in the
 
Virgin Islands region.
Update on the Puerto Rico Fiscal and Economic Situation
A significant
 
portion
 
of the
 
Corporation’s
 
business activities
 
and credit
 
exposure
 
is concentrated
 
in the
 
Commonwealth of
 
Puerto
Rico,
 
which
 
has
 
experienced
 
economic
 
and
 
fiscal
 
distress
 
over
 
the
 
last
 
decade.
 
See
 
“Risk
 
Management
 
–
 
Exposure
 
to
 
Puerto
 
Rico
Government”
 
below.
 
Since
 
declaring
 
bankruptcy
 
and
 
benefitting
 
from
 
the
 
enactment
 
of
 
the
 
federal
 
Puerto
 
Rico
 
Oversight,
Management and Economic Stability Act (“PROMESA”)
 
in 2016, the Government of Puerto Rico has made
 
progress on fiscal matters
primarily
 
by restructuring
 
a large
 
portion of
 
its outstanding
 
public debt
 
and identifying
 
funding
 
sources for
 
its underfunded
 
pension
system.
Economic Indicators
In
 
March
 
2025,
 
the
 
Puerto
 
Rico Planning
 
Board
 
(“PRPB”)
 
published
 
its annual
 
analysis
 
of
 
the Puerto
 
Rico’s
 
economy
 
for
 
fiscal
year
 
2024,
 
as well
 
as a
 
revised
 
short-term
 
forecast
 
for fiscal
 
years 2025
 
and 2026.
 
According
 
to the
 
PRPB’s
 
preliminary
 
estimates,
Puerto Rico’s
 
real gross
 
national product
 
(“GNP”) grew
 
by 2.1%
 
in fiscal year
 
2024, marking
 
the fourth consecutive
 
year of
 
positive
economic growth. The main drivers for growth during
 
fiscal year 2024 were personal consumption expenditures and
 
fixed investments
in both
 
construction
 
and machinery
 
and equipment.
 
These positive
 
variances
 
were partially
 
offset
 
by a
 
reduction
 
in inventories.
 
For
fiscal years 2025 and 2026, the PRPB’s baseline
 
projections contemplate real GNP growth of 1.1% and 0.5%, respectively.
There
 
are
 
other
 
indicators
 
that
 
gauge
 
economic
 
activity
 
and
 
are
 
published
 
with
 
greater
 
frequency,
 
for
 
example,
 
the
 
Economic
Development
 
Bank
 
for
 
Puerto
 
Rico’s
 
Economic
 
Activity
 
Index
 
(“EDB-EAI”).
 
Although
 
not
 
a
 
direct
 
measure
 
of
 
Puerto
 
Rico’s
 
real
GNP,
 
the EDB-EAI is
 
correlated to Puerto
 
Rico’s real
 
GNP.
 
During the calendar
 
year 2024, the
 
EDB-EAI averaged 128.1,
 
increasing
by 0.6% on a year-over-year
 
basis and reaching its highest
 
level since 2014. For June
 
2025, estimates showed that the
 
EDB-EAI stood
at 127.1,
 
down 0.9%
 
on a
 
year-over-year basis.
 
Over the
 
12-month period
 
ended June
 
30, 2025,
 
the EDB-EAI
 
averaged 127.6,
 
0.7%
below the comparable figure a year earlier.
 
 
121
Labor
 
market
 
trends
 
remain
 
positive.
 
Data
 
published
 
by the
 
Bureau
 
of
 
Labor
 
Statistics showed
 
that
 
non-farm
 
payrolls in
 
August
2025
 
in Puerto
 
Rico
 
increased
 
by
 
1.5%
 
when
 
compared
 
to August
 
2024,
 
primarily
 
driven by
 
payrolls
 
in
 
the private
 
sector
 
as these
increased
 
by
 
1.7%
 
from
 
the
 
comparable
 
figure
 
a
 
year
 
earlier.
 
Key
 
industries
 
driving
 
private-sector
 
payroll
 
growth
 
include
Construction with
 
a year-over-year
 
increase of
 
5.3% and
 
Leisure &
 
Hospitality with
 
a positive
 
variance of
 
4.6%. The
 
unemployment
rate remained stable at 5.6% in August 2025.
Fiscal Plan
 
On June
 
6, 2025,
 
the PROMESA
 
oversight board
 
certified a revised
 
2024 Fiscal
 
Plan for
 
Puerto Rico
 
for the
 
purpose of
 
including
the currently anticipated
 
fiscal performance and updated
 
Fiscal Year
 
2025 revenue forecast based
 
on the most recent
 
available data on
revenue collections. The
 
Fiscal Plan intends to serve
 
as a roadmap to
 
promote economic growth and
 
achieve long-term fiscal stability.
See “Risk
 
Management
 
– Update
 
on the
 
Puerto
 
Rico Fiscal
 
and
 
Economic
 
Situation”
 
in Part
 
II, Item
 
7, “Management’s
 
Discussion
and Analysis of
 
Financial Condition
 
and Results of
 
Operations (“MD&A”),”
 
in the 2024
 
Annual Report
 
on Form 10-K
 
for additional
information.
Debt Restructuring
 
Over
 
80%
 
of
 
Puerto
 
Rico’s
 
outstanding
 
debt
 
has
 
been
 
restructured
 
to
 
date.
 
On
 
March
 
15,
 
2022,
 
the
 
Plan
 
of
 
Adjustment
 
of
 
the
central
 
government’s
 
debt
 
became
 
effective
 
through
 
the
 
exchange
 
of more
 
than
 
$33
 
billion
 
of
 
existing
 
bonds
 
and
 
other
 
claims
 
into
approximately
 
$7
 
billion
 
of
 
new
 
bonds,
 
saving
 
Puerto
 
Rico
 
more
 
than
 
$50
 
billion
 
in
 
debt
 
payments
 
to
 
creditors.
 
Also,
 
the
restructurings
 
of
 
the
 
Puerto
 
Rico
 
Sales
 
Tax
 
Financing
 
Corporation
 
(“COFINA”),
 
the
 
Highways
 
and
 
Transportation
 
Authority
(“HTA”),
 
and
 
the
 
Puerto
 
Rico
 
Aqueducts
 
and
 
Sewers
 
Authority
 
(“PRASA”)
 
are
 
expected
 
to
 
yield
 
savings
 
of
 
approximately
 
$17.5
billion, $3.0 billion, and $400 million, respectively,
 
in future debt service payments.
The main restructuring
 
pending is that
 
of the Puerto
 
Rico Electric Power
 
Authority (“PREPA”).
 
All PREPA
 
plan confirmation
 
and
bond-related litigation
 
is currently
 
stayed with
 
no appointed
 
date for
 
resumption, except
 
for certain
 
matters detailed
 
in a
 
Court order
dated
 
March
 
20,
 
2025,
 
including
 
permitting
 
the
 
PROMESA
 
oversight
 
board
 
to
 
file
 
an
 
amended
 
proposed
 
plan
 
of
 
adjustment.
 
The
PROMESA oversight
 
board filed
 
the fifth
 
amended plan
 
of adjustment
 
on March
 
28, 2025,
 
reflecting the
 
projections and
 
findings of
the new
 
PREPA
 
fiscal plan.
 
The amended
 
plan would
 
reduce PREPA’s
 
debt almost
 
80%, to
 
the equivalent
 
of $2.6
 
billion in
 
cash or
bonds,
 
excluding
 
pension
 
liabilities.
 
It
 
also
 
incorporates
 
several
 
amendments
 
to
 
the
 
previous
 
structure,
 
including
 
a
 
Rate
 
Reduction
Fund
 
to support
 
PREPA’s
 
pensions,
 
and
 
the elimination
 
of the
 
Legacy
 
Charge
 
contemplated
 
in the
 
previous
 
versions of
 
the plan
 
of
adjustment to repay the significantly reduced debt.
 
Other Developments
Notable
 
progress
 
continues
 
to
 
be
 
made
 
as
 
part
 
of
 
the
 
ongoing
 
efforts
 
of
 
prioritizing
 
the
 
restoration,
 
improvement,
 
and
modernization of
 
Puerto Rico’s
 
infrastructure,
 
particularly in
 
the aftermath
 
of Hurricane
 
Maria in
 
2017. During
 
the 12-month
 
period
ended
 
May 31,
 
2025, over
 
$3.5 billion
 
in disaster
 
relief funds
 
were disbursed
 
through the
 
Federal
 
Emergency
 
Management
 
Agency
(“FEMA”)
 
Public
 
Assistance
 
program
 
and
 
the
 
HUD
 
Community
 
Development
 
Block
 
Grant
 
(“CDBG”)
 
program,
 
a
 
1.4%
 
increase
when compared
 
to the
 
same period
 
in 2024.
 
Excluding disaster
 
relief funds
 
related to
 
Hurricane Fiona
 
which occurred
 
in September
2022 directed
 
towards emergency
 
efforts, disbursements
 
from FEMA’s
 
Public Assistance
 
program and
 
the CDBG program
 
increased
by 9.6% on a year-over-year
 
basis. These funds will continue
 
to play a key role in
 
supporting Puerto Rico’s
 
economic stability and are
expected
 
to
 
have
 
a
 
positive
 
impact
 
on
 
the
 
Island’s
 
infrastructure.
 
For
 
example,
 
approximately
 
86%
 
of
 
the
 
projects
 
that
 
FEMA
 
has
obligated
 
to
 
address
 
damage
 
caused
 
by
 
Hurricane
 
Maria
 
have
 
resources
 
to
 
reinforce
 
their
 
infrastructure,
 
among
 
other
 
hazard
mitigation
 
measures,
 
that
 
will
 
prepare
 
these
 
facilities
 
for
 
future
 
weather
 
events.
 
As
 
of
 
October
 
27,
 
2025,
 
over
 
4,200
 
projects
 
had
already been
 
completed under FEMA’s
 
Public Assistance
 
Permanent Work
 
programs while
 
nearly 20,000
 
projects were active
 
across
different stages of execution for
 
a total cost of $11.9
 
billion, equivalent to approximately 32% of the
 
agency’s $37.2 billion
 
obligation,
according to the Central Office for Recovery,
 
Reconstruction and Resiliency (“COR3”).
On
 
June
 
27,
 
2025,
 
the
 
PROMESA
 
oversight
 
board
 
certified
 
the
 
$32.7
 
billion
 
fiscal
 
year
 
2026
 
Budget
 
for
 
the
 
Commonwealth
 
of
Puerto
 
Rico
 
consisting
 
of
 
the $13.1
 
billion
 
general
 
fund budget,
 
the $5.4
 
billion
 
special revenue
 
fund
 
budget,
 
and
 
the $14.2
 
billion
federal fund
 
budget. According
 
to the
 
oversight board,
 
the fiscal
 
year 2026
 
Budget was
 
developed jointly
 
with the
 
local government
and
 
reflects the
 
unprecedented
 
uncertainty
 
around federal
 
funding,
 
economic
 
growth,
 
and
 
Medicaid
 
costs in
 
the coming
 
fiscal
 
year.
More
 
than
 
60% of
 
total
 
government
 
funding
 
is allocated
 
to
 
health,
 
education,
 
public
 
safety,
 
housing
 
and
 
retirees.
 
The general
 
fund
budget increases
 
total spending
 
by 1.5%
 
from the
 
previous fiscal
 
year,
 
excluding certain
 
reclassifications of
 
general fund
 
revenues as
special
 
revenue,
 
while
 
funding
 
from
 
the
 
U.S.
 
Government
 
was
 
budgeted
 
to
 
decline
 
by
 
approximately
 
$1.2
 
billion,
 
mainly
 
due
 
a
reduction
 
in
 
federal
 
funding
 
for
 
education.
 
According
 
to
 
the
 
PROMESA
 
oversight
 
board,
 
the
 
fiscal
 
year
 
2026
 
Budget
 
prepares
 
the
Government for
 
potential further
 
declines in
 
federal funding
 
over the
 
fiscal year
 
that began
 
on July
 
1, 2025.
 
Specifically,
 
the budget
holds back 5% of most agencies spending for eight months to prevent deficits should the general fund revenue decline, federal funding transportation costs, and sales tax.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
122
decreases
 
or
 
Medicaid
 
costs
 
increase.
 
Certain
 
expenses
 
are
 
exempt
 
from
 
the
 
hold
 
back,
 
including
 
pensions,
 
public
 
safety,
 
certain
On August
 
5, 2025,
 
the PROMESA
 
oversight board
 
announced that
 
it had
 
been informed
 
by the
 
Trump
 
administration that
 
it had
terminated
 
five
 
members
 
of
 
the
 
board
 
from
 
their
 
positions.
 
At
 
the
 
time
 
of
 
filing
 
this
 
quarterly
 
report,
 
no
 
potential
 
candidates
 
for
replacement
 
had
 
been
 
announced.
 
Management
 
will
 
continue
 
to
 
closely
 
monitor
 
any
 
developments
 
and
 
assess
 
any
 
implications
 
on
fiscal policy and the overall economic environment in Puerto Rico.
 
Exposure to Puerto Rico Government
As of September
 
30, 2025, the Corporation
 
had $295.8 million
 
of direct exposure
 
to the Puerto Rico
 
government, its municipalities
and
 
public
 
corporations,
 
and increase
 
of
 
$7.2
 
million
 
compared
 
to $288.6
 
million
 
as
 
of December
 
31,
 
2024,
 
mainly due
 
to
 
a
 
$29.5
million increase
 
in the portfolio
 
balance of three
 
loans to municipalities,
 
partially offset
 
by multiple repayments.
 
As of September
 
30,
2025,
 
approximately
 
$211.3
 
million
 
of
 
the
 
exposure
 
consisted
 
of
 
loans
 
and
 
obligations
 
of
 
municipalities
 
in
 
Puerto
 
Rico
 
that
 
are
supported
 
by assigned
 
property
 
tax revenues
 
and for
 
which,
 
in most
 
cases,
 
the good
 
faith,
 
credit and
 
unlimited
 
taxing power
 
of
 
the
applicable
 
municipality
 
have
 
been
 
pledged
 
to
 
their
 
repayment,
 
and
 
$42.0
 
million
 
consisted
 
of
 
loans
 
and
 
obligations
 
which
 
are
supported by one
 
or more specific sources
 
of municipal revenues. The
 
Corporation’s
 
exposure to Puerto Rico
 
municipalities consisted
primarily of
 
senior priority
 
loans and
 
obligations concentrated
 
in five
 
of the
 
largest municipalities
 
in Puerto
 
Rico. The
 
municipalities
are required
 
by law
 
to levy
 
special property
 
taxes in
 
such amounts
 
as are
 
required for
 
the payment
 
of all
 
of their
 
respective general
obligation bonds
 
and notes. In
 
addition to
 
municipalities, the
 
total direct exposure
 
also included
 
$8.7 million
 
in a loan
 
extended to
 
an
affiliate of PREPA
 
,
 
$31.0 million in loans to
 
a public corporation of the
 
Puerto Rico government,
 
and an obligation of the Puerto
 
Rico
government,
 
specifically
 
a
 
residential
 
pass-through
 
MBS
 
issued
 
by
 
the
 
PRHFA,
 
at
 
an
 
amortized
 
cost
 
of
 
$2.8
 
million
 
as
 
part
 
of
 
its
available-for-sale debt securities portfolio (fair value of $1.6 million as of
 
September 30, 2025).
The
 
following
 
table
 
details
 
the
 
Corporation’s
 
total
 
direct
 
exposure
 
to
 
Puerto
 
Rico
 
government
 
obligations
 
according
 
to
 
their
maturities:
As of September 30, 2025
Investment
Portfolio
(Amortized cost)
Loans
Total
 
Exposure
(In thousands)
Puerto Rico Housing Finance Authority:
 
After 10 years
$
2,753
$
-
$
2,753
Total Puerto Rico Housing Finance Authority
2,753
-
2,753
Public corporation of the Puerto Rico government:
 
Due within one year
-
11,704
11,704
 
After 5 to 10 years
-
19,276
19,276
Total public corporation of the Puerto Rico government
-
30,980
30,980
 
Affiliate of the Puerto Rico Electric Power Authority:
 
After 1 to 5 years
-
8,690
8,690
Total Puerto Rico government affiliate
-
8,690
8,690
Total Puerto Rico public corporations and government affiliate
-
39,670
39,670
Municipalities:
 
Due within one year
1,017
-
1,017
 
After 1 to 5 years
53,122
112,624
165,746
 
After 5 to 10 years
10,313
61,395
71,708
 
After 10 years
14,870
-
14,870
Total Municipalities
79,322
174,019
253,341
Total Direct
 
Government Exposure
$
82,075
$
213,689
$
295,764
Also,
 
as
 
of
 
September
 
30,
 
2025,
 
the
 
outstanding
 
balance
 
of
 
construction
 
loans
 
funded
 
through
 
conduit
 
financing
 
structures
 
to
support
 
the
 
federal
 
programs
 
of
 
Low-Income
 
Housing
 
Tax
 
Credit
 
(“LIHTC”)
 
combined
 
with
 
other
 
federal
 
programs
 
amounted
 
to
$78.3 million,
 
compared to
 
$59.2 million
 
as of
 
December 31,
 
2024. The
 
main objective
 
of these
 
programs is
 
to spur
 
development in
new or rehabilitated and affordable
 
rental housing. PRHFA,
 
as program subrecipient and conduct
 
issuer, issues tax-exempt
 
obligations
which
 
are
 
acquired
 
by
 
private
 
financial
 
institutions
 
and
 
are
 
required
 
to
 
co-underwrite
 
with
 
PRHFA
 
a
 
mirror
 
construction
 
loan
agreement for the specific project loan to which the Corporation will serve as ultimate lender but where the PRHFA will be the lender guaranteed by the PRHFA, a governmental instrumentality that has been designated as a covered entity under PROMESA (December
of record.
 
 
 
 
 
 
123
In
 
addition,
 
as
 
of
 
September
 
30,
 
2025,
 
the
 
Corporation
 
had
 
$68.4
 
million
 
in
 
exposure
 
to
 
residential
 
mortgage
 
loans
 
that
 
are
31,
 
2024
 
–
 
$72.5
 
million).
 
Residential
 
mortgage
 
loans
 
guaranteed
 
by
 
the
 
PRHFA
 
are
 
secured
 
by
 
the
 
underlying
 
properties
 
and
 
the
guarantees serve
 
to cover shortfalls
 
in collateral in
 
the event of
 
a borrower default.
 
The Puerto Rico
 
government guarantees
 
up to $75
million
 
of
 
the
 
principal
 
for
 
all
 
loans
 
under
 
the
 
mortgage
 
loan
 
insurance
 
program.
 
According
 
to
 
the
 
most
 
recently
 
released
 
audited
financial
 
statements
 
of
 
the
 
PRHFA,
 
as
 
of
 
June
 
30,
 
2024,
 
the
 
PRHFA’s
 
mortgage
 
loans
 
insurance
 
program
 
covered
 
loans
 
in
 
an
aggregate
 
amount
 
of
 
approximately
 
$355
 
million.
 
The
 
regulations
 
adopted
 
by
 
the
 
PRHFA
 
require
 
the
 
establishment
 
of
 
adequate
reserves to
 
guarantee
 
the solvency
 
of the
 
mortgage loans
 
insurance
 
program. As
 
of June
 
30, 2024,
 
the most
 
recent date
 
as of
 
which
information is available, the PRHFA
 
had a liability of approximately $0.7 million as an estimate of the
 
losses inherent in the portfolio.
As of September
 
30, 2025 and
 
December 31, 2024,
 
the Corporation had
 
$2.9 billion and
 
$3.1 billion, respectively,
 
of public sector
deposits
 
in
 
Puerto
 
Rico.
 
Approximately
 
23%
 
of
 
the
 
public
 
sector
 
deposits
 
as
 
of
 
September
 
30,
 
2025
 
were
 
from
 
municipalities
 
and
municipal agencies in Puerto Rico and 77% were from
 
public corporations, the Puerto Rico central government
 
and agencies, and U.S.
federal government agencies in Puerto Rico.
Exposure to USVI Government
The Corporation has operations in the USVI and has credit exposure
 
to USVI government entities.
For many years, the
 
USVI has been experiencing
 
several fiscal and economic
 
challenges that have deteriorated
 
the overall financial
and
 
economic
 
conditions
 
in
 
the
 
area.
 
On
 
June
 
17,
 
2024,
 
the
 
United
 
States
 
Bureau
 
of
 
Economic
 
Analysis
 
(the
 
“BEA”)
 
released
 
its
estimates of GDP
 
for 2022.
 
According to
 
the BEA, the
 
USVI’s
 
real GDP decreased
 
1.3% in 2022
 
after increasing
 
3.7% in 2021.
 
The
decrease
 
in
 
real
 
GDP
 
reflected
 
declines
 
in
 
exports,
 
private
 
fixed
 
investment,
 
government
 
spending,
 
and
 
personal
 
consumption
expenditures. These
 
negative variances were
 
partly offset
 
by an increase
 
in inventory investment,
 
while imports,
 
a subtraction item
 
in
the calculation of GDP,
 
decreased. The annual
 
publication of BEA’s
 
GDP statistics for the
 
USVI is made possible through
 
funding by
the
 
Office
 
of
 
Insular
 
Affairs
 
(“OIA”)
 
of
 
the
 
U.S.
 
Department
 
of
 
the
 
Interior.
 
OIA
 
has
 
paused
 
funding
 
of
 
this
 
work
 
to
 
conduct
 
an
exploratory
 
assessment
 
of
 
territorial
 
source
 
data
 
with
 
the
 
goal
 
of
 
informing
 
how
 
to
 
strategically
 
invest
 
in
 
and
 
support
 
the
 
USVI's
economic statistics into the future. Without
 
funding, BEA is pausing the production of GDP statistics
 
for the USVI. When funding and
improved data sources become available, BEA plans to resume production
 
of these statistics.
Over the past
 
three years, the
 
USVI has been
 
recovering from the
 
adverse impact caused
 
by COVID-19 and
 
has continued to
 
make
progress
 
on
 
its
 
rebuilding
 
efforts
 
related
 
to
 
Hurricanes
 
Irma
 
and
 
Maria,
 
which
 
occurred
 
in
 
September
 
2017.
 
According
 
to
 
data
published
 
by FEMA,
 
there were
 
over $26.1
 
billion in
 
obligated
 
disaster recovery
 
funds for
 
the USVI
 
as of
 
May 31,
 
2025, up
 
$10.9
billion (or 71%)
 
from the comparable
 
figure a year
 
earlier. During
 
the 12-month
 
period ended May
 
31, 2025, over
 
$707 million were
disbursed in the territory,
 
representing a year-over-year increase of 66%.
 
Finally, PROMESA
 
does not apply to
 
the USVI and, as such,
 
there is currently no federal
 
legislation permitting the restructuring
 
of
the debts of the USVI and
 
its public corporations and instrumentalities.
 
To the
 
extent that the fiscal condition of the
 
USVI government
deteriorates
 
again,
 
the
 
U.S.
 
Congress
 
or
 
the
 
government
 
of
 
the
 
USVI
 
may
 
enact
 
legislation
 
allowing
 
for
 
the
 
restructuring
 
of
 
the
financial
 
obligations
 
of
 
the
 
USVI
 
government
 
entities
 
or
 
imposing
 
a
 
stay
 
on
 
creditor
 
remedies,
 
including
 
by
 
making
 
PROMESA
applicable to the USVI.
As of September 30, 2025 and
 
December 31, 2024, the Corporation
 
had $125.8 million and $100.4 million,
 
respectively, in
 
loans to
USVI public
 
corporations, of
 
which $96.2
 
million and
 
$68.2 million,
 
respectively,
 
were fully
 
collateralized by
 
cash balances
 
held at
the Bank. As of September 30, 2025, all loans were currently performing
 
and up to date on principal and interest payments.
 
 
 
 
 
124
ITEM 3. QUANTITATIVE
 
AND QUALITATIVE DISCLOSURES
 
ABOUT MARKET
 
RISK
For
 
information
 
regarding
 
market
 
risk
 
to
 
which
 
the
 
Corporation
 
is
 
exposed,
 
see
 
the
 
information
 
contained
 
in
 
Part
 
I,
 
Item
 
2,
“Management’s
 
Discussion
 
and
 
Analysis
 
of
 
Financial
 
Condition
 
and
 
Results of
 
Operations
 
— Risk
 
Management”
 
in
 
this Quarterly
Report on Form 10-Q.
ITEM 4.
 
CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
First
 
BanCorp.’s
 
management,
 
including
 
its
 
Chief
 
Executive
 
Officer
 
and
 
Chief
 
Financial
 
Officer,
 
evaluated
 
the
 
effectiveness
 
of
First
 
BanCorp.’s
 
disclosure
 
controls
 
and
 
procedures
 
(as
 
defined
 
in
 
Rules
 
13a-15(e)
 
and
 
15d-15(e)
 
under
 
the
 
Exchange
 
Act)
 
as
 
of
September
 
30,
 
2025,
 
the
 
end
 
of
 
the
 
period
 
covered
 
by
 
this
 
Quarterly
 
Report
 
on
 
Form
 
10-Q.
 
Based
 
on
 
this
 
evaluation,
 
the
 
Chief
Executive
 
Officer and
 
Chief Financial
 
Officer
 
concluded that
 
the Corporation’s
 
disclosure controls
 
and procedures
 
were effective
 
as
of September
 
30, 2025
 
and provide
 
reasonable assurance
 
that the
 
information
 
required to
 
be disclosed
 
by the
 
Corporation in
 
reports
that the Corporation
 
files or submits under
 
the Exchange Act is
 
recorded, processed, summarized
 
and reported within the
 
time periods
specified
 
in SEC
 
rules and
 
forms and
 
is accumulated
 
and reported
 
to the
 
Corporation’s
 
management,
 
including
 
the Chief
 
Executive
Officer and Chief Financial Officer,
 
as appropriate, to allow timely decisions regarding required disclosures.
Internal Control over Financial Reporting
There were
 
no changes
 
to the
 
Corporation’s
 
internal control
 
over financial
 
reporting (as
 
defined
 
in Rules
 
13a-15(f) and
 
15d-15(f)
under
 
the
 
Exchange
 
Act) during
 
the most
 
recent
 
quarter
 
ended September
 
30, 2025
 
that have
 
materially
 
affected,
 
or are
 
reasonably
likely to materially affect, the Corporation’s
 
internal control over financial reporting.
 
 
 
 
125
PART II - OTHER INFORMATION
In accordance with the instructions to Part II
 
of Form 10-Q, the other specified items in
 
this part have been omitted because they are not
applicable, or the information has been previously reported.
ITEM 1.
 
LEGAL PROCEEDINGS
For
 
a
 
discussion
 
of
 
legal
 
proceedings,
 
see
 
Note
 
19
 
–
 
“Regulatory
 
Matters,
 
Commitments
 
and
 
Contingencies,”
 
to
 
the
 
unaudited
consolidated financial statements herein, which is incorporated by reference
 
in this Part II, Item 1.
ITEM 1A.
 
RISK FACTORS
The Corporation’s business, operating results and/or the market price of our common stock may be significantly affected by a number of
factors. A detailed
 
discussion of certain
 
risk factors that
 
could affect
 
the Corporation’s future
 
operations, financial
 
condition or results
 
for
future periods is set forth in Part I, Item 1A, “Risk Factors,” in the 2024 Annual Report on Form 10-K. These risk factors, and others, could
cause actual
 
results to
 
differ materially
 
from historical
 
results or
 
the results
 
contemplated by
 
the forward-looking statements
 
contained in
this report. Also,
 
refer to the
 
discussion in
 
“Forward-Looking Statements” and
 
Part I, Item
 
2, “Management’s
 
Discussion and
 
Analysis of
Financial Condition and Results
 
of Operations,” in this Quarterly
 
Report on Form 10-Q for
 
additional information that may supplement
 
or
update the discussion of risk factors in the
 
2024 Annual Report on Form 10-K.
There have been no material changes from those risk factors previously disclosed in Part I, Item 1A., “Risk Factors,” in the 2024 Annual ITEM 2.
Report on Form 10-K.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
126
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The Corporation did not have any unregistered sales
 
of equity securities during the quarter ended September
 
30, 2025.
Issuer Purchases of Equity Securities
The
 
following
 
table
 
provides
 
information
 
in
 
relation
 
to
 
the
 
Corporation’s
 
purchases
 
of
 
its
 
common
 
stock
 
during
 
the
 
quarter
 
ended
September
 
30, 2025.
Period
Total Number of Shares
Purchased
 
Average Price
Paid per Share
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs (1)
Approximate Dollar Value
of Shares that May Yet
 
be
Purchased Under the Plans
or Programs (in
thousands) (1)
July 1, 2025 - July 31, 2025
688,151
$
21.19
688,151
$
73,720
August 1, 2025 - August 31, 2025
1,645,218
20.90
1,645,096
39,333
September 1, 2025 - September 30, 2025
53,135
21.84
47,264
38,300
Total
2,386,504
(2) (3)
2,380,511
(1)
As of September
 
30, 2025, the
 
Corporation was
 
authorized to purchase
 
up to $250
 
million that could
 
include repurchases
 
of common
 
stock and/or
 
junior subordinated
 
debentures under
the program that was
 
publicly announced on
 
July 22, 2024.
 
During the third quarter
 
of 2025, the
 
Corporation repurchased approximately
 
$50.0 million in common
 
stock. The repurchase
program does
 
not obligate
 
it to
 
acquire any
 
specific number
 
of shares
 
and does
 
not have
 
an expiration
 
date. The
 
repurchase program
 
may be
 
modified, suspended,
 
or terminated
 
at any
time at the Corporation’s
 
discretion. Repurchases under
 
the program may be
 
executed through open market
 
purchases, accelerated
 
share repurchases, privately
 
negotiated transactions, or
plans, including plans complying with Rule 10b5-1 under the
 
Exchange Act, and/or redemption of junior subordinated debentures.
(2)
Includes 2,380,511 shares of common stock repurchased
 
in the open market at an average price of $21.00 for a total purchase
 
price of approximately $50.0 million.
(3)
Includes 5,993 shares
 
of common stock
 
acquired by the
 
Corporation to cover
 
minimum tax withholding
 
obligations upon the
 
vesting of equity-based
 
awards. The Corporation
 
intends to
continue to satisfy statutory tax withholding obligations in connection
 
with the vesting of outstanding restricted stock and
 
performance units through the withholding of shares.
ITEM 5.
 
OTHER INFORMATION
During
 
the quarter
 
ended
 
September
 
30,
 
2025, none
 
of the
 
Corporation’s
 
directors or
 
officers
 
(as defined
 
in Rule
 
16a-1(f)
 
of the
Exchange Act)
adopted
 
or
terminated
 
a “Rule 10b5-1 trading
 
arrangement” or
“non-Rule
10b5-1
 
trading arrangement,” as those
 
terms
are defined in Item 408 of Regulation S-K.
 
 
 
 
127
ITEM 6.
 
EXHIBITS
 
See the Exhibit Index below, which is incorporated by
 
reference herein:
 
EXHIBIT INDEX
 
Exhibit No.
Description
31.1
31.2
32.1
32.2
101.INS
Inline XBRL Instance Document, filed herewith. The
 
instance document does not appear in the interactive
 
data file because
its XBRL tags are embedded within the inline XBRL
 
document.
101.SCH
Inline XBRL Taxonomy Extension Schema Document, filed herewith
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document, filed herewith
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document, filed herewith
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document, filed herewith
101.DEF
Inline XBRL Taxonomy Extension Definitions Linkbase Document, filed herewith
104
The cover page of First BanCorp. Quarterly Report on Form 10-Q
 
for the quarter ended September 30, 2025, formatted in
Inline XBRL (included within the Exhibit 101 attachments)
 
 
 
128
SIGNATURES
Pursuant to
 
the requirements
 
of the
 
Securities Exchange
 
Act of
 
1934, the
 
Corporation has
 
duly caused
 
this report
 
to be
 
signed on
 
its
behalf by the undersigned hereunto duly authorized:
 
First BanCorp.
Registrant
Date:
 
November 7, 2025
By:
 
/s/ Aurelio Alemán
 
Aurelio Alemán
 
President and Chief Executive Officer
Date: November 7, 2025
By:
 
/s/ Orlando Berges
 
Orlando Berges
Executive Vice President and Chief Financial Officer I, Aurelio Alemán, certify that:
EX-31.1 2 exhibit311.htm EX-31.1 exhibit311
 
 
1
 
 
EXHIBIT
 
31.1
1.
 
I have reviewed this Form 10-Q of First BanCorp.;
 
2.
 
Based on
 
my knowledge,
 
this report
 
does not
 
contain any
 
untrue statement
 
of a
 
material fact
 
or omit
 
to state
 
a material
 
fact
necessary to make the statements made, in light of the
 
circumstances under which such statements were made, not
 
misleading
with respect to the period covered by this report;
3.
 
Based on my
 
knowledge, the financial
 
statements, and other
 
financial information included
 
in this report,
 
fairly present in all
material
 
respects
 
the
 
financial
 
condition,
 
results
 
of
 
operations
 
and
 
cash
 
flows
 
of
 
the
 
registrant
 
as
 
of,
 
and
 
for,
 
the
 
periods
presented in this report;
 
4.
 
The
 
registrant’s
 
other
 
certifying
 
officer
 
and
 
I
 
are
 
responsible
 
for
 
establishing
 
and
 
maintaining
 
disclosure
 
controls
 
and
procedures
 
(as
 
defined
 
in
 
Exchange
 
Act
 
Rules
 
13a-15(e)
 
and
 
15d-15(e))
 
and
 
internal
 
control
 
over
 
financial
 
reporting
 
(as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
 
Designed such disclosure
 
controls and procedures,
 
or caused such disclosure
 
controls and procedures
 
to be designed
under
 
our
 
supervision,
 
to
 
ensure
 
that
 
material
 
information
 
relating
 
to
 
the
 
registrant,
 
including
 
its
 
consolidated
subsidiaries, is
 
made known
 
to us by
 
others within
 
those entities, particularly
 
during the
 
period in
 
which this
 
report
is being prepared;
 
(b)
 
Designed such internal control over
 
financial reporting, or caused such
 
internal control over financial reporting to
 
be
designed under our supervision, to
 
provide reasonable assurance regarding
 
the reliability of financial
 
reporting and the
preparation of financial statements
 
for external purposes in accordance
 
with generally accepted accounting
 
principles;
(c)
 
Evaluated
 
the
 
effectiveness
 
of
 
the
 
registrant’s
 
disclosure
 
controls
 
and
 
procedures,
 
and
 
presented
 
in
 
this report
 
our
conclusions about the
 
effectiveness of the
 
disclosure controls and
 
procedures, as of the
 
end of the period
 
covered by
this report based on such evaluation; and
(d)
 
Disclosed in
 
this report
 
any change
 
in the
 
registrant’s
 
internal control
 
over financial
 
reporting that
 
occurred during
the registrant’s
 
most recent
 
fiscal quarter
 
(the registrant’s
 
fourth
 
fiscal quarter
 
in the
 
case of
 
an annual
 
report) that
has
 
materially
 
affected,
 
or
 
is
 
reasonably
 
likely
 
to
 
materially
 
affect,
 
the
 
registrant’s
 
internal
 
control
 
over
 
financial
reporting; and
 
5.
 
The
 
registrant’s
 
other
 
certifying
 
officer
 
and
 
I
 
have
 
disclosed,
 
based
 
on
 
our
 
most
 
recent
 
evaluation
 
of
 
internal
 
control
 
over
financial
 
reporting,
 
to
 
the
 
registrant’s
 
auditors
 
and
 
the
 
audit
 
committee
 
of
 
the
 
registrant’s
 
board
 
of
 
directors
 
(or
 
persons
performing the equivalent functions):
 
(a)
 
All
 
significant
 
deficiencies
 
and
 
material
 
weaknesses
 
in
 
the
 
design
 
or
 
operation
 
of
 
internal
 
control
 
over
 
financial
reporting
 
which
 
are reasonably
 
likely to
 
adversely affect
 
the registrant
 
’s
 
ability to
 
record, process,
 
summarize
 
and
report financial information; and
 
(b)
 
Any fraud, whether
 
or not material, that
 
involves management or other
 
employees who have a
 
significant role in the
registrant’s internal control
 
over financial reporting.
Date: November 7, 2025
By:
/s/ Aurelio Alemán
Aurelio Alemán
President and Chief Executive Officer
EX-31.2 3 exhibit312.htm EX-31.2 exhibit312
 
 
1
EXHIBIT
 
31.2
I, Orlando Berges, certify that:
 
1.
 
I have reviewed this Form 10-Q of First BanCorp.;
 
2.
 
Based on
 
my knowledge,
 
this report
 
does not
 
contain any
 
untrue statement
 
of a
 
material fact
 
or omit
 
to state
 
a material
 
fact
necessary to make the statements made, in light of the
 
circumstances under which such statements were made, not
 
misleading
with respect to the period covered by this report;
3.
 
Based on my
 
knowledge, the financial
 
statements, and other
 
financial information included
 
in this report,
 
fairly present in all
material
 
respects
 
the
 
financial
 
condition,
 
results
 
of
 
operations
 
and
 
cash
 
flows
 
of
 
the
 
registrant
 
as
 
of,
 
and
 
for,
 
the
 
periods
presented in this report;
 
4.
 
The
 
registrant’s
 
other
 
certifying
 
officer
 
and
 
I
 
are
 
responsible
 
for
 
establishing
 
and
 
maintaining
 
disclosure
 
controls
 
and
procedures (as defined
 
in Exchange Act
 
Rules 13a-15(e) and
 
15d-15(e)) and internal
 
control over financial
 
reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
 
Designed such disclosure
 
controls and procedures,
 
or caused such disclosure
 
controls and procedures
 
to be designed
under
 
our
 
supervision,
 
to
 
ensure
 
that
 
material
 
information
 
relating
 
to
 
the
 
registrant,
 
including
 
its
 
consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared;
 
(b)
 
Designed such internal control over
 
financial reporting, or caused such
 
internal control over financial reporting to
 
be
designed under our supervision, to
 
provide reasonable assurance regarding
 
the reliability of financial
 
reporting and the
preparation of financial statements
 
for external purposes in accordance
 
with generally accepted accounting
 
principles;
(c)
 
Evaluated
 
the
 
effectiveness
 
of
 
the
 
registrant’s
 
disclosure
 
controls
 
and
 
procedures,
 
and
 
presented
 
in
 
this report
 
our
conclusions about the
 
effectiveness of the
 
disclosure controls and
 
procedures, as of the
 
end of the period
 
covered by
this report based on such evaluation; and
(d)
 
Disclosed in this report any change in
 
the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth quarter in
 
the case of an
 
annual report) that has
 
materially
affected, or is reasonably likely to materially affect,
 
the registrant’s internal control over
 
financial reporting; and
 
5.
 
The
 
registrant’s
 
other
 
certifying
 
officer
 
and
 
I
 
have
 
disclosed,
 
based
 
on
 
our
 
most
 
recent
 
evaluation
 
of
 
internal
 
control
 
over
financial
 
reporting,
 
to
 
the
 
registrant’s
 
auditors
 
and
 
the
 
audit
 
committee
 
of
 
the
 
registrant’s
 
board
 
of
 
directors
 
(or
 
persons
performing the equivalent functions):
 
(a)
 
All
 
significant
 
deficiencies
 
and
 
material
 
weaknesses
 
in
 
the
 
design
 
or
 
operation
 
of
 
internal
 
control
 
over
 
financial
reporting
 
which
 
are reasonably
 
likely to
 
adversely affect
 
the registrant
 
’s
 
ability to
 
record, process,
 
summarize
 
and
report financial information; and
 
(b)
 
Any fraud, whether
 
or not material, that
 
involves management or other
 
employees who have a
 
significant role in the
registrant’s internal control
 
over financial reporting.
Date: November 7, 2025
By:
/s/ Orlando Berges
Orlando Berges
Executive Vice President
 
and
 
Chief Financial Officer
EX-32.1 4 exhibit321.htm EX-32.1 exhibit321
 
 
1
EXHIBIT
 
32.1
CERTIFICATION
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 Title 18,
United States Code)
 
Pursuant to
 
Section 906 of
 
the Sarbanes-Oxley
 
Act of 2002
 
(subsections (a) and
 
(b) of Section
 
1350, Chapter 63
 
of Title
 
18,
United States Code), the undersigned officer of
 
First BanCorp., a Puerto Rico
 
corporation (the “Company”), does hereby certify, to such
officer’s knowledge, that:
 
The
 
Quarterly
 
Report
 
on
 
Form
 
10-Q
 
for
 
the
 
quarter
 
ended
 
September
 
30,
 
2025
 
(the
 
“Form
 
10-Q”)
 
of
 
the
 
Company
 
fully
complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form
10-Q fairly presents, in all material respects, the financial condition
 
and results of operations of the Company.
 
Date: November 7, 2025
/s/ Aurelio Alemán
Name: Aurelio Alemán
Title: President and Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18,
EX-32.2 5 exhibit322.htm EX-32.2 exhibit322
 
 
1
EXHIBIT 32.2
CERTIFICATION
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 Title 18,
United States Code)
 
United States Code), the undersigned officer of
 
First BanCorp., a Puerto Rico
 
corporation (the “Company”), does hereby certify, to such
officer’s knowledge, that:
 
The
 
Quarterly
 
Report
 
on
 
Form
 
10-Q
 
for
 
the
 
quarter
 
ended
 
September
 
30,
 
2025
 
(the
 
“Form
 
10-Q”)
 
of
 
the
 
Company
 
fully
complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form
10-Q fairly presents, in all material respects, the financial condition and
 
results of operations of the Company.
 
Date: November 7, 2025
/s/ Orlando Berges
Name: Orlando Berges
Title: Executive Vice
 
President and Chief Financial Officer