FIRST BANCORP /PR/ (FBP) — 10-K

Filed 2026-02-27 · Period ending 2025-12-31 · 109,450 words · SEC EDGAR

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# FIRST BANCORP /PR/ (FBP) — 10-K

**Filed:** 2026-02-27
**Period ending:** 2025-12-31
**Accession:** 0001057706-26-000007
**Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/1057706/000105770626000007/)
**Origin leaf:** a3673419ea0f94a11547fa5330e04ae5478800cd1267ed823b90780f3b9db063
**Words:** 109,450



---

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549
FORM 
10-K
(Mark one) 
[X]
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT 
OF 1934 
For the Fiscal Year Ended 
December 31, 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 Len Avenue
, 
Stop 23
00908
San Juan
, 
Puerto Rico
(Zip Code) 
(Address of principal executive office) 
Registrants telephone number, including area code:
(
787
) 
729-8200
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)
FBP
New York Stock Exchange
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities
Act.
Yes
No
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Act. Yes
No
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 has filed a
report on and attestation to its managements
assessment of the effectiveness of its internal control
over financial reporting under 
Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the
registered public accounting firm that prepared or issued its
audit report.
If securities are registered pursuant to Section 12(b) of the Act,
indicate by check mark whether the financial statements of
the registrant included in the filing reflect the correction of
an error 
to previously issued financial statements.
Indicate by check mark whether any of those error corrections are
restatements that required a recovery analysis of incentive-based
compensation received by any of the registrants
executive 
officers during the relevant recovery period pursuant
to 240.10D-1(b). 
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
Yes
No
The aggregate market value of the voting common equity held
by non-affiliates of the registrant as of June 30,
2025 (the last trading day of the registrants
most recently completed second 
fiscal quarter) was $
3,238,291,527
based on the closing price of $20.83 per share of the registrants
common stock on the New York
Stock Exchange on June 30, 2025. The registrant had no 
nonvoting common equity outstanding as of June 30, 2025.
For the purposes of the foregoing calculation only,
the registrant has defined affiliates to include (a) the executive
officers named in 
Part III of this Annual Report on Form 10-K; (b) all directors
of the registrant; and (c) each shareholder,
including the registrants employee benefit
plans but excluding shareholders that file on 
Schedule 13G, known to the registrant to be the beneficial owner
of 5% or more of the outstanding shares of common stock of the
registrant as of June 30, 2025. The registrants
response to 
this item is not intended to be an admission that any person
is an affiliate of the registrant for any purposes other than this
response. 
Indicate the number of shares outstanding of each of the
registrants classes of common stock,
as of the latest practicable date: 
156,565,063
shares as of February 20, 2026. 
Documents incorporated by reference: 
Portions of the definitive proxy statement relating to
the registrants annual meeting of stockholders
scheduled to be held on May 6, 2026 are 
incorporated by reference in response to Items 10, 11,
12, 13 and 14 of Part III of this Form 10-K.
2 
FIRST BANCORP.
2025 ANNUAL REPORT ON FORM 10-K 
TABLE OF CONTENTS 
PART
I
Item 1. 
[Business](#a2622)
5 
Item 1A. 
[Risk Factors](#a22943)
20 
Item 1B. 
[Unresolved Staff Comments](#a25128)
32 
Item 1C. 
[Cybersecurity](#a25132)
32 
Item 2. 
[Properties](#a25313)
34 
Item 3. 
[Legal Proceedings](#a25416)
34 
Item 4. 
[Mine Safety Disclosures](#a25490)
34 
PART
II
Item 5. 
[Market for Registrants Common Equity, Related Stockholder Matters and Issuer](#a25498)
[Purchases of Equity Securities](#a25498)
35 
Item 6. 
[[Reserved]](#a26359)
38 
Item 7. 
[Managements Discussion and Analysis of Financial Condition and Results of Operations](#a26366)
39 
Item 7A. 
[Quantitative and Qualitative Disclosures About Market Risk](#a74751)
94 
Item 8. 
[Financial Statements and Supplementary Data](#a74840)
95 
Item 9. 
[Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#a137689)
194 
Item 9A. 
[Controls and Procedures](#a137694)
194 
Item 9B. 
[Other Information](#a138291)
194 
Item 9C. 
[Disclosure regarding Foreign Jurisdictions that Prevent Inspections](#a138412)
194
PART
III
Item 10. 
[Directors, Executive Officers and Corporate Governance](#a138423)
195 
Item 11. 
[Executive Compensation](#a138857)
195 
Item 12. 
[Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#a138993)
195 
Item 13. 
[Certain Relationships and Related Transactions, and Director Independence](#a139200)
195 
Item 14. 
[Principal Accountant Fees and Services](#a139288)
196 
PART
IV
Item 15. 
[Exhibits and Financial Statement Schedules](#a139354)
196 
Item 16. 
[Form 10-K Summary](#a139886)
196 
[Exhibit Index](#a139894)
[SIGNATURES](#a140341)
3 
Forward-Looking Statements 
This Annual
Report on
Form 10-K
(this Form 10-K)
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-K or future filings
by 
First
BanCorp.
(the
Corporation,
we,
us,
or
our)
with
the
U.S.
Securities
and
Exchange
Commission
(the
SEC),
in
the 
Corporations 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-K, 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
Corporations
forward-looking 
statements include, but are not limited to, risks described or referenced
in Part I, Item 1A, Risk Factors, and the following: 
the effect
of changes
in the
interest rate
environment
and inflation
levels on
the level,
composition
and performance
of the 
Corporations
assets and
liabilities, and
corresponding
effects on
the Corporations
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 Corporations
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
Corporations
products
and
services,
and which
may 
reduce the Corporations revenues
and earnings and the value of the Corporations
assets; 
the
impact
of
litigation
or
the
threat
of
litigation,
including
any
settlements
or
judgments
against
the
Corporation,
and
the 
potential resulting adverse publicity or other reputational harm;
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, 
4 
strategic
partnerships,
strategic
operational
investments,
including
systems
conversions,
and
any
anticipated
efficiencies
or 
other expected results related thereto; 
uncertainty regarding
the implementation
of Puerto
Ricos
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, recent
conflicts in South
America, 
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
Corporations
assumptions
regarding
forecasts
of
economic 
variables; 
the
risk
that
additional
portions
of
the
unrealized
losses in
the
Corporations
debt
securities portfolio
are
determined
to
be 
credit-related, resulting
in additional
charges to
the provision
for credit
losses on
the Corporations
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
U.S. federal government
shutdowns and political
impasses, and uncertainties
regarding 
the U.S. debt ceiling and federal budget, on the Corporations
financial condition or performance; 
the
risk
of
possible
failure
or
circumvention
of
the
Corporations
internal
controls
and
procedures
and
the
risk
that
the 
Corporations 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 Corporations
non-interest expenses;
any need to recognize impairments on the Corporations
financial instruments, goodwill, and other intangible assets; 
the risk
that the
impact
of the
occurrence
of any
of these
uncertainties on
the Corporations
capital would
preclude
further 
growth of FirstBank and preclude the Corporations
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 
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 
PART
I 
Item 1.
Business
GENERAL
First
BanCorp.
is
a
publicly
owned
financial
holding
company
that
is
subject
to
regulation,
supervision
and
examination
by
the 
Federal Reserve Board. The Corporation was incorporated under
the laws of the Commonwealth of Puerto Rico in 1948 to serve as the 
bank holding company
for FirstBank. Through
its subsidiaries, including
FirstBank, the Corporation
provides full-service commercial 
and
consumer
banking
services,
mortgage
banking
services,
automobile
financing,
insurance
agency
services,
and
other
financial 
products and
services in
Puerto Rico,
the U.S.,
the USVI
and the
BVI. As
of December
31, 2025,
the Corporation
had total assets
of 
$19.1 billion, including loans held for investment
of $13.1 billion, total deposits of $16.7 billion, and total
stockholders equity of $2.0 
billion. 
The
Corporation
has
two
wholly-owned
subsidiaries:
FirstBank
and
FirstBank
Insurance
Agency,
Inc.
(FirstBank
Insurance 
Agency).
FirstBank
is
a
Puerto
Rico-chartered
commercial
bank,
and
FirstBank
Insurance
Agency
is
a
Puerto
Rico-chartered 
insurance agency.
FirstBank is subject to
the supervision, examination
and regulation of both
the Office of the
Commissioner of Financial Institutions 
of
Puerto
Rico
(OCIF)
and
the
FDIC.
Deposits
are
insured
through
the
FDIC
Deposit
Insurance
Fund
(the
DIF).
In
addition, 
within FirstBank,
the Banks
USVI operations
are subject to
regulation and examination
by the USVI
Division of Banking
Insurance, 
and Financial
Regulation;
its BVI
operations are
subject to
regulation by
the BVI
Financial Services
Commission; and
its operations 
in
the
state
of
Florida
are
subject
to
regulation
and
examination
by
the
Florida
Office
of
Financial
Regulation.
The
Consumer 
Financial Protection Bureau (CFPB)
regulates FirstBanks
consumer financial products and services.
FirstBank Insurance Agency is 
subject to
the supervision,
examination and
regulation of
the Office
of the
Insurance Commissioner
of the
Commonwealth of
Puerto 
Rico (the Insurance Commissioner of Puerto Rico) and the Division of
Banking, Insurance and Financial Regulation in the USVI.
FirstBank conducts its
business through its main
office located in
San Juan, Puerto Rico,
57 banking branches
in Puerto Rico, eight 
banking
branches
in
the
USVI
and
the
BVI,
and
eight
banking
branches
in
the
state
of
Florida.
FirstBank
has
six
wholly-owned 
subsidiaries
with
operations
in
Puerto
Rico:
First
Federal
Finance
Corp.
(d/b/a
Money
Express
La Financiera),
a
finance
company 
specializing
in
the
origination
of
small
loans
with
25
offices
in
Puerto
Rico;
First
Management
of
Puerto
Rico,
a
Puerto
Rico 
corporation,
which
holds
tax-exempt
assets;
FirstBank
Overseas
Corporation,
an
international
banking
entity
(an
IBE)
organized 
under
the
International
Banking
Entity
Act
of
Puerto
Rico;
two
companies
engaged
in
the
operation
of
certain
real
estate
owned 
properties and
a limited liability
corporation organized
in 2022 under
the laws of
the Commonwealth
of Puerto
Rico and Puerto
Rico 
Tax
Incentive
Code
(Act
60
of
2019),
which
commenced
operations
in
2023
and
engages
in
qualified
investing
and
lending 
transactions. The limited
liability corporation organized
under the laws
of Act 60 of 2019
has one wholly-owned
subsidiary organized 
under such laws. 
For a
discussion of
certain significant
events that
have occurred
in the
year ended
December 31,
2025, please
refer to
Significant 
Events included in Part II, Item
7, Managements
Discussion and Analysis of Financial Condition
and Results of Operations of this 
Form 10-K. 
BUSINESS SEGMENTS
The Corporation has six reportable segments: Mortgage Banking;
Consumer (Retail) Banking; Commercial and Corporate Banking; 
Treasury and Investments; United
States Operations; and Virgin
Islands Operations. These segments are described below,
as well as in 
Note 21 Segment Information to the audited financial statements
included in Part II, Item 8 of this Form 10-K. 
Mortgage Banking 
The Mortgage Banking segment consists of the origination, sale and
servicing of a variety of residential mortgage loan products
and 
related hedging
activities in
the Puerto
Rico region.
Originations are
sourced through
different channels,
such as
FirstBank branches 
and purchases from mortgage bankers,
and in association with new project developers.
This segment focuses on originating
residential 
real
estate
loans,
including
those
that
conform
to
the
U.S.
Federal
Housing
Administration
(the
FHA),
the
U.S.
Veterans 
Administration (the VA)
and the U.S. Department
of Agriculture Rural
Development (the RD)
standards. Loans that
meet FHAs 
standards
qualify
for
FHAs
insurance
while
loans
that
meet 
VA 
or
the
RD
standards
are
guaranteed
by
the
respective
federal 
agencies.
Mortgage
loans that
do not
qualify
for
the FHA,
the 
VA 
or the
RD programs
are referred
to as
conventional
loans which
can be 
conforming or non-conforming. Conforming
loans are those that meet the
standards for sale under the U.S.
Federal National Mortgage 
Association
(FNMA)
and
the
U.S.
Federal
Home
Loan
Mortgage
Corporation
(FHLMC)
programs.
Loans
that
do
not
meet 
6 
FNMA
or
FHLMC
standards
are
referred
to
as
non-conforming
residential
real
estate
loans.
The
Mortgage
Banking
segment
also 
acquires
and
sells mortgages
in the
secondary
market. Conforming
residential
real estate
loans are
sold to
investors
such
as FNMA 
and
FHLMC,
and
the
Corporation
has
commitment
authority
to
issue
Government
National
Mortgage
Association
(GNMA) 
mortgage-backed securities (MBS). 
Consumer (Retail) Banking
The
Consumer
(Retail)
Banking
segment
includes
the
Corporations
consumer
lending,
commercial
lending
to
small
businesses, 
commercial
transaction
banking,
and
deposit-taking
activities
(other
than
those assigned
to
the
Commercial
and
Corporate
Banking 
segment)
primarily
conducted
through
FirstBanks
branch
network,
ATMs
and
online
banking
in
the
Puerto
Rico
region.
Retail 
deposits gathered through each
branch of FirstBanks
retail network serve as
one of the funding
sources for its lending and
investment 
activities. Other activities included in this segment are insurance
activities in the Puerto Rico region. 
Commercial and Corporate Banking
The
Commercial
and
Corporate
Banking
segment
consists
of
the
Corporations
lending
and
other
services
for
large
customers 
represented by
specialized and
middle-market
clients and
the government
sector in
the Puerto
Rico region.
This segment
consists of 
the
Corporations
commercial
lending
(other
than
small business
commercial
loans)
and commercial
deposit-taking
activities (other 
than the government sector). A substantial
portion of the commercial and
corporate banking portfolio is secured
by the underlying real 
estate collateral and the personal guarantees from the borrowers.
Treasury and Investments 
The
Treasury
and
Investments
segment
is
responsible
for
the
Corporations
investment
portfolio
and
treasury
functions.
The 
treasury
function 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
respective
lending 
activities and by
compensating these
units for deposits
gathered. The Treasury
and Investments segment
also obtains funding
through 
brokered
deposits,
advances
from
the
FHLB,
and
repurchase
agreements
involving
investment
securities,
among
other
funding 
sources. 
United States Operations 
The
United
States Operations
segment
consists of
all banking
activities conducted
by FirstBank
on the
U.S. mainland.
FirstBank 
provides a wide
range of banking services
to individual and corporate
customers, primarily in
southern Florida, through
eight banking 
branches.
This
segment
offers
a
variety
of
consumer
and
commercial
banking
products
and
services.
Consumer
banking
products 
include checking, savings and money market accounts, retail
CDs, internet banking services, residential mortgages, home equity
loans, 
and lines of credit. Retail deposits, as well as FHLB advances and
brokered CDs assigned to this segment, serve as funding sources
for 
its lending activities.
Commercial
banking
services
include
checking,
savings
and
money
market
accounts,
retail
CDs,
internet
banking
services,
cash 
management
services,
remote
deposit
capture,
and
automated
clearing
house
(ACH)
transactions.
Loan
products
include
the 
traditional commercial and industrial
(C&I) and commercial real
estate products, such as lines
of credit, term loans
and construction 
loans.
Virgin Islands Operations 
The Virgin
Islands Operations
segment consists
of all
banking activities
conducted
by FirstBank
in the
USVI and
BVI, including 
consumer and commercial
banking services.
This segment operates
through eight banking
branches serving in
the USVI islands of
St. 
Thomas, St. Croix, and
St. John, as well the island
of Tortola
in the BVI. This segments
primary business activities include
consumer 
and
commercial
lending
and
deposit-taking
activities.
Retail
deposits
gathered
through
each
branch
serve
as
the
primary
funding 
sources for the segments lending
activities. 
CORPORATE SUSTAINABILITY
PROGRAM OVERVIEW 
The
Corporation
is
committed
to
supporting
its
clients,
employees,
shareholders
and
communities
it
serves.
Its
Corporate 
Sustainability
program,
which
includes
environmental,
social
and
governance
(ESG)
matters,
builds
on
its
core
values,
including 
being
a socially
responsible
company.
The Corporation
sees effective
ESG management
as a
critical step
towards
a sustainable
and 
successful future.
During 2021, the Corporation adopted an ESG framework
to guide its corporate sustainability strategy and governance.
In 2025, the 
Corporation
published
its
most
recent
First
Bancorp
Corporate
Sustainability
Report
for
2024
(the
2024
Report),
which
provides 
7 
disclosure
on
a
wide
range
of
ESG
topics,
including
governance;
business
ethics
and
compliance;
responsible
marketing
and
sales 
practices; sustainable and
accessible finance; responsible
banking, including details
as to data
security and cyber
management; people 
and culture; community impact; and environmental responsibility. 
Sustainability Governance 
The
Corporations
Board
of
Directors
and
executive
leadership
team
share
responsibilities
relating
to
oversight
of
its
corporate 
sustainability
policies
and
practices.
In
February
2022,
the
Corporate
Governance
and
Nominating
Committee
of
the
Board
of 
Directors
amended
its
charter
to
include
oversight
responsibility
of
sustainability
matters,
and
it
has
primary
oversight
of
ESG 
policies,
practices
and
disclosures.
Nonetheless,
other
committees
of
the
Corporations
Board
of
Directors
also
play
a
role
in
ESG 
oversight in matters related to risk and cybersecurity management, human
capital management, and credit risk management.
As
part
of
the
sustainability
governance
structure
set forth
in
FirstBanCorp.s
Sustainability
Policy,
which
was
approved
by
the 
Corporations Board of
Directors in 2022 and subsequently amended,
the responsibility of day-to-day management of
its sustainability 
framework
and
strategy
has
been
delegated
to
a
management-level
Sustainability
Committee,
comprised
of
leaders
from
different 
areas,
such
as
Human
Resources,
Enterprise
Risk
Management,
Strategic
Planning
and
Investor
Relations,
Legal
and
Corporate 
Affairs,
Marketing,
Compliance,
Finance,
and
Corporate
Internal
Audit.
The
Sustainability
Committee
is
tasked
with
aligning 
priorities
and
initiatives
for
the
year,
setting
and
monitoring
long-term
objectives,
and
leading
the
annual
reporting
process
on 
sustainability-related
topics.
The
Sustainability
Committee
reports
to
the
Corporate
Governance
and
Nominating
Committee
of
the 
Board of Directors.
HUMAN CAPITAL MANAGEMENT 
First BanCorp.
strives to be
recognized as
a leading
and diversified financial
institution, offering
superior experience
to our clients 
and employees. We
believe that the key to our success is caring about our team as much
as we care about our customers. Our goal is to 
be an
employer of
choice
within our
primary operating
regions, which
we believe
is achieved
and sustained
by adding
value
to our 
employees
lives
and
providing
satisfying
and
evolving
work
experience.
The
core
of
our
employer
value
proposition,
The 
Experience of Being 1, is our commitment to our employees well-being,
success, professional development, and work environment. 
Employees 
As of December 31,
2025, the Corporation and
its subsidiaries had 3,218
regular employees representing
a 3.4% increase in overall 
headcount
from December
31, 2024.
The Corporation
had 2,854
employees in
the Puerto
Rico region,
206 employees
in the
Florida 
region,
and
158
employees
in
the
Virgin
Islands
region.
As
of
December
31,
2025,
approximately
66%
of
the
total
employee 
population and 58% of management positions were women.
Oversight 
The Human
Resources Division,
led by
the Human
Resources Director
who reports
directly to
the Corporations
Chief Consumer 
Officer
and
Corporate
Chief
of
Staff,
manages
all
elements
of
the
Corporations
human
capital
programs
and
strategies,
including 
talent management, talent acquisition, engagement, learning and
development, compensation and benefits. 
The
Human
Resources
Divisions
efforts
are
also
overseen
by
the
Corporations
Chief
Executive
Officer
(CEO)
and
the 
executive management team
through regular work-related
interactions. Our leaders focus
on strengthening employee
management and 
engagement
and
maximizing
collaboration
between
departments
and
talents
by
promoting
an
open-door
culture
that
stimulates 
frequent communication
between employees and
management. This provides
more opportunities to
identify employees
needs, obtain 
feedback
about
their
work-life
experience,
and
act
upon
such
feedback
to
improve
employee
engagement.
In
addition,
the 
Corporations
Board
of
Directors
and
its
Compensation
and
Benefits
Committee
monitor
and
are
regularly
updated
on
the 
Corporations human capital management
strategies.
8 
Talent
Management
First BanCorp. is an equal
opportunity employer which considers
qualified candidates for employment
to fill its open positions. We 
focus
our
efforts
on attracting
and
retaining
the
best
talent for
the Corporation,
including
college
graduates,
and promoting
internal 
mobility. The attraction
and selection process includes: 
Posting vacancies internally and externally; 
Building employer brand through digital presence, professional events and
job fairs, and university partnerships; 
Collaboration with hiring managers to
ensure accurate role alignment to
accelerate the recruitment process and
attraction of top 
candidates with the right fit for the role; 
A robust management information system to enhance
recruitment effectiveness and provide
candidates with unique experience; 
and 
A robust
on-boarding process
to engage
and support
new employees
induction process,
including assignment
of a
FirstPal 
from day one to help with the organizational culture
transition and learning process. 
We
believe
that financial
security
is critical
for
our employees.
Our goal
is to
maintain
compensation
levels that
are competitive 
with the
market
and comparable
job categories
in similar
organizations.
Our salary
administration
program
is designed
to provide
a 
compensation
structure
that
is
consistent
with
our
employees
level
of
responsibilities
to
attract
the
best
talent
for
each
job
and 
commensurately pay for performance. 
In
addition
to
base
salaries,
certain
job
positions
are
eligible
to
participate
in
variable
pay
programs
designed
to
align
employee 
performance
with
the
Corporations
strategic
and
financial
objectives.
The
Corporation
maintains
incentive
programs
for
revenue 
generation
and
sales
functions
to
support
business
units.
These
programs
are
reviewed
annually
to
ensure
alignment
with
business 
strategies, performance objectives,
and sound risk
management practices. The
Corporations Management
Award
Program recognizes 
and
rewards outstanding
performance
for exempt
employees who
do not
participate in
other
variable pay
programs. In
addition,
the 
Corporation maintains a long-term incentive
plan for top-performing leaders and
employees, as well as identified high-potential
talent, 
to
promote
sustained
performance,
leadership
development,
and
long-term
retention.
These
programs
have
fostered
a
stable
and 
experienced workforce, reflected in
an average tenure of 11
years as of December 31, 2025.
The Corporations
voluntary turnover rate 
declined
to
9.59%
in
2025,
compared
to
10.91%
in
2024,
with
turnover
primarily
attributable
to
hourly
employees
in
call
centers, 
collections
centers
and
branches.
Turnover
among
high
performers
improved,
decreasing
to
2.4%
in
2025
from
3.6%
for
2024, 
underscoring the effectiveness of the Corporations
compensation, engagement, and retention strategies. 
Talent Development
and Engagement 
We
believe
that a
culture of
learning and
development
maximizes the
talent of
human
capital and
is the
foundation for
sustained 
business success. Our commitment to employee engagement continues
throughout employees time with the Corporation.
Our
learning
and
development
program
strives
to
align
with
both
employees
and
the
organizations
needs,
offering
online,
in-
person,
and
virtual
training,
as
well
as
development
activities,
special
projects,
and
partial
tuition
reimbursement
to
complete
a 
bachelors
or
masters
degree
to
eligible
employees.
The
Learning
and
Development
priorities
cover
five
areas:
Fundamentals, 
Governance and Compliance, Technical
and Specialized Development, Professional Development, and Leadership. 
In
2025,
we
delivered
more
than
114,000
training
hours
across
more
than
1,800
courses
through
all
learning
modalities.
New 
supervisors
completed
programs
focused
on
foundational
supervision,
leadership,
communication,
and
HR
policies,
while
the 
leadership
curriculum continued
to strengthen
both technical
and people
-management
skills. The
Leadership
Development program, 
which incorporates structured feedback from instructors and peers, has reached
63% of current leaders since its launch. 
In
addition
to these
learning opportunities,
we
support professional
development
and
career
growth,
including
the internal
career 
advancement,
performance
management
processes,
annual
talent
review,
and
robust
succession
planning.
We
also
encourage 
employees to participate in community initiatives, volunteering over
2,800 hours supporting more than 35 organizations in 202
5.
9 
Health & Wellness 
First
BanCorp.
provides
comprehensive
health
and
wellness
benefits
designed
to
support
employees
occupational,
physical, 
emotional, and financial well-being.
Benefits include health, dental
and vision insurance offered
through multiple insurance providers, 
enabling
employees
to
select
coverage
options
that
best
meet
their
individual
and
family
needs.
The
Corporation
also
offers
an 
Employee
Assistance Program
to provide
holistic support
and
resources addressing
a broad
range of
employees
needs. In
addition, 
the Corporation
offers life
insurance and
disability plans,
as well
as a
defined
contribution retirement
plan in
which both
employees 
and
the employer
contribute.
For
employees
in
the Puerto
Rico
region,
the
Corporation provides
an additional
contribution. 
The Corporation
further supports employee
wellness through fitness
facilities at its
main offices,
instructor-led wellness sessions,
and 
wellness tours that promote healthy lifestyle practices. The Corporation
subsidizes a substantial portion of the cost of these benefits. 
Work-life
balance remains
a key
priority; therefore,
the Corporation
offers various
paid time-off
benefits, including
vacation, sick 
leave,
maternity
and
paternity
leave,
bereavement
leave,
marriage
leave,
personal
days,
and
flexible
work
arrangements,
including 
hybrid work arrangements.
The wellness program also includes on-site
occupational medical and nursing health
services, nutrition and 
fitness initiatives, health
fairs, vaccination clinics preventive
healthcare activities and targeted
education focused on personal
financial 
and
health
literacy.
To
enhance
quality
of
life
and
optimize
workplace
conditions,
the
wellness
program
provides
on-site 
musculoskeletal
demonstrations,
tobacco-use prevention
education, discount
programs for
laboratory testing
and consumer
products, 
and an emergency donation program to support employees
experiencing catastrophic events. 
MARKET AREA AND COMPETITION
The
Corporation
operates
in
highly
competitive
markets
and
is
subject
to
significant
business,
economic
and
competitive 
uncertainties
and contingencies.
In particular,
the banking
market
is highly
competitive in
Puerto Rico,
the main
geographic
service 
area of
the Corporation.
As of December
31, 2025,
the Corporation
also had presence
in the state
of Florida
and in the
USVI and
the 
BVI.
Puerto
Rico
banks
are
subject
to
the
same
federal
laws,
regulations
and
supervision
that
apply
to
similar
institutions
on
the 
United States mainland. 
Competitors include
other banks,
insurance companies,
mortgage banking
companies, small
loan companies,
automobile financing 
companies,
leasing companies,
brokerage firms
with retail
operations,
credit unions
and certain
retailers that
operate in
Puerto Rico, 
the
USVI,
the
BVI,
and
the
state
of
Florida,
as well
as
financial
technology
(fintech)
companies
and
emerging
competition
from 
digital
platforms.
The
Corporations
businesses
compete
with
these
other
firms
with
respect
to
the
range
of
products
and
services 
offered and the types of clients, customers and industries served. 
See Part I, Item 1A, Risk Factors for further discussion of risks related to
competition. 
SUPERVISION AND REGULATION 
The
Corporation
and
FirstBank,
its
bank
subsidiary,
are
subject
to
comprehensive
federal
and
Puerto
Rican
supervision
and 
regulation that
govern all aspects
of the Corporations
and the Banks
activities, including
commercial and
consumer lending, deposit 
taking, management,
governance and
other activities.
As part
of this
regulatory framework,
the Corporation
and the
Bank are
subject 
to extensive consumer financial protection laws, regulatory,
legal, and supervisory requirements, which continue to change in
response 
to
new
legislative
or
regulatory
actions.
See
Part
I,
Item
1,
BusinessGeneral
above
for
additional
regulatory
oversight
and 
supervision
of
FirstBank
Insurance
Agency.
Future
legislative
or
regulatory
developments
may
increase
the
oversight
of
the 
Corporation and the Bank and could materially affect its business.
The
Corporation
is also
subject
to the
disclosure
and
regulatory
requirements
of the
Securities Act
of 1933,
as amended,
and
the 
Securities
Exchange
Act
of
1934,
as amended,
both
as administered
by
the
SEC, as
well
as the
rules
applicable
to
companies
with 
securities listed on the New York
Stock Exchange. 
The following discussion summarizes
certain laws, regulations and policies
to which the Company is subject.
It does not address all 
applicable laws, regulations
and policies that
affect the Company
currently or might
affect it in
the future. This
discussion is qualified 
in its entirety by reference to the full texts of the laws, regulations and policies described. 
10 
Bank Holding Company Activities and Other Limitations 
The Corporation
is registered
as a
bank holding
company under
the Bank
Holding Company
Act of
1956, as
amended (the
Bank 
Holding
Company
Act),
and
is
subject
to
ongoing
supervision,
regulation,
and
examination
by
the
Federal
Reserve
Board.
In
this 
capacity,
the
Corporation
is
required
to
file
periodic
and
annual
reports
as
well
as
other
information
regarding
its
own
business 
operations and those of its subsidiaries. 
The Bank Holding
Company Act also permits
a bank holding company
to elect to become
a financial holding
company and engage 
in a
broader range
of financial
activities. As
a result,
the Corporation
has elected
to be
a financial
holding company
under the
Bank 
Holding
Company
Act
and
may
engage,
directly
or
indirectly,
in
any
activity
that
is
determined
to
be
(i)
financial
in
nature,
(ii) 
incidental to such
financial activity,
or (iii) complementary
to a financial activity
and does not pose
a substantial risk
to the safety and 
soundness of
depository institutions
or the
financial system
generally.
The Bank
Holding Company
Act specifically
provides that
the 
following
activities
have
been
determined
to
be
financial
in
nature:
(i)
lending,
trust
and
other
banking
activities;
(ii)
insurance 
activities; (iii) financial or economic
advice or services; (iv) pooled investments;
(v) securities underwriting and dealing; (vi)
domestic 
activities permitted for an existing
bank holding company; (vii) foreign activities
permitted for an existing bank holding
company; and 
(viii) merchant banking activities. 
The Corporation
and FirstBank
must be
well-capitalized and
well-managed
for regulatory
purposes, and
FirstBank must
earn 
satisfactory or better ratings
on its periodic Community
Reinvestment Act (CRA) examinations
for the Corporation to preserve
its 
financial holding
company status.
If these
standards are
not met,
the Federal
Reserve Board
may impose
limitations on
the financial 
holding companys activities until
compliance is restored. 
Under
federal
law
and
Federal
Reserve
Board
policy,
a
bank
holding
company,
such
as the
Corporation,
is
expected
to
act
as
a 
source
of strength
to its
banking
subsidiaries,
including
by providing
capital
and other
support
as necessary.
In the
event
of a
bank 
holding companys
bankruptcy,
any commitment made
by the bank
holding company to
a federal bank
regulatory agency
to maintain 
capital
of
a
subsidiary
bank
will
be
assumed
by
the
bankruptcy
trustee
and
accorded
priority
for
payment.
In
addition,
any
capital 
loans by
a bank
holding company
to any
of its
subsidiary banks
must be
subordinated in
right of
payment to
deposits and
to certain 
other
indebtedness
of such
subsidiary bank.
As of
December
31,
2025,
and the
date hereof,
FirstBank was
and
is the
Corporations 
sole banking subsidiary. 
State-Chartered Non-Member Bank and Banking Laws and
Regulations
in General
FirstBank
is
subject
to
supervision,
regulation,
and
examination
by
the
OCIF,
the
CFPB
and
the
FDIC,
and
is
subject
to 
comprehensive
federal
and
state
(including,
for
this
purpose,
the
Commonwealth
of
Puerto
Rico)
regulations
that
regulate,
among 
other things,
the scope
of its
businesses, its
investments, its
reserves against
deposits, the
timing and
availability of
deposited funds, 
and the nature and amount of collateral required for certain loans.
The
OCIF,
the
CFPB
and
the
FDIC
conduct
periodic
examinations
of
FirstBank
to
assess
its
financial
condition,
ensure
the 
maintenance
of
safe
and
sound
banking
practices,
and
evaluate
compliance
with
applicable
statutory
and
regulatory
requirements. 
Supervision by
the FDIC
is also
intended for
the protection
of the
Deposit Insurance
Fund (DIF)
and depositors.
These regulatory 
authorities have discretion in connection with their
supervisory and enforcement activities and examination
policies, including policies 
with respect
to the
classification of
assets and
the establishment
of adequate
loan loss
reserves for
regulatory purposes.
Enforcement 
actions
include
civil
monetary
penalties,
cease-and-desist
or
removal
orders,
and
injunctive
actions
which
may
be
imposed
for 
violations
of
laws
and
regulations,
or
for
unsafe
or
unsound
practices.
Other
actions
or
failure
to
act
may
provide
the
basis
for 
enforcement action, including the filing of misleading or untimely reports
with regulatory authorities. 
Regulatory Capital Requirements
The Corporation
and FirstBank are
each subject to
minimum regulatory
capital requirements imposed
by federal banking
agencies. 
These
requirements
are
redesigned
to
align
U.S.
regulatory
capital
requirements
with
international
regulatory
capital
standards 
adopted by the Basel Committee on Banking Supervision
(Basel Committee), in particular, the
international capital accord known as 
Basel
III. Under
the
Basel
III
rules,
the
Corporation
must
maintain
certain
minimum
capital
ratios
to
be
considered
adequately 
capitalized and to
avoid the regulatory limitations
described above. These
requirements include: (i) a
minimum common equity
Tier 1 
Capital
(CET1)
ratio
of
4.5%,
plus
a
2.5%
capital
conservation
buffer;
(ii)
a
minimum
Tier
1
capital
ratio
of
6.0%,
plus
a
2.5% 
capital conservation
buffer; (iii)
a minimum
Total
capital (Tier
1 plus
Tier
2) ratio
of 8.0%,
plus a
2.5% capital
conservation buffer; 
and (iv) a required minimum leverage ratio (Tier
1 capital to average on-balance sheet non-risk adjusted assets) of 4%.
As part of
regulatory relief measures
implemented in
response to the
economic impact of
COVID-19, the
federal banking agencies 
issued
an
interim
final
rule
on
March
31,
2020,
providing
the
option
to
temporarily
delay
the
regulatory
capital
effects
of
current 
expected credit
losses (CECL). This
transition framework provided
for a total
five-year phase-in period,
which ended on
January 1, 
2025.
The
Corporation
and
the
Bank
elected
to
utilize
this
transition
option
and,
as
of
January
1,
2025,
have
fully
recognized
the 
impact of CECL in their regulatory capital ratios. 
11 
The following table presents
the Corporations
and FirstBanks
regulatory capital ratios as
of December 31, 2025,
based on Federal 
Reserve and FDIC guidelines: 
Banking Subsidiary 
First BanCorp. 
FirstBank 
Well-Capitalized 
Minimum 
As of December 31, 2025 
Total capital to risk-weighted
assets 
18.01% 
17.61% 
10.00% 
CET1 Capital to risk-weighted assets 
16.76% 
15.60% 
6.50% 
Tier 1 capital to risk-weighted assets 
16.76% 
16.35% 
8.00% 
Leverage ratio 
(1)
11.58% 
11.30% 
5.00% 
_______________ 
(1) Tier 1 capital to average assets. 
Stress-Testing
and Capital Planning Requirements
Federal
regulations
currently
do
not
impose
formal
stress-testing
requirements
on
banking
organizations
with
total
assets
of
less 
than $100
billion, such
as the
Corporation
and FirstBank.
Instead, the
capital planning
and risk
management practices
of such
banks 
are reviewed through
the regular supervisory
process. Notwithstanding,
the Corporation monitors
its capital consistent
with the safety 
and
soundness
expectations
of
the
federal
regulators
and
continues
to
perform
internal
stress
testing
as
part
of
its
annual
capital 
planning process.
Dividend Restrictions
The Federal
Reserve Board
generally restricts
bank holding
companies from
paying cash
dividends unless
its net
income available 
to
common
shareholders
for
the
past
four
quarters,
net
of dividends
previously
paid
during
that
period,
has
been
sufficient
to
fully 
fund the
dividends and
the prospective
rate of
earnings retention
appears to
be consistent
with the
organizations
capital needs,
asset 
quality,
and overall current and prospective
financial condition. Under the
Federal Reserve Boards
regulatory capital rule (Regulation 
Q), a bank holding
company must maintain a capital
conservation buffer of
CET1 capital in an amount
greater than 2.5% of total
risk-
weighted
assets to
avoid
limits
on
capital
distributions.
The
Corporation
is also
subject
to
certain
restrictions
generally
imposed
on 
Puerto Rico corporations
with respect to
the declaration
and payment of
dividends (i.e.,
that dividends may
be paid out
only from
the 
Corporations
capital
surplus
or,
in
the
absence
of
such
excess,
from
the
Corporations
net
earnings
for
such
fiscal
year
and/or
the 
preceding fiscal year). 
The principal
source of
funds for
the Corporation,
as a
parent holding
company,
is dividends
declared and
paid by
its subsidiary, 
FirstBank. The
ability of
FirstBank to
declare and
pay dividends
on its
capital stock
is regulated
by the
Puerto Rico
Banking Law
of 
1933,
as
amended
(the
Puerto
Rico
Banking
Law),
the
Federal
Deposit
Insurance
Act
(the
FDIA),
and
FDIC
regulations.
In 
general
terms,
the
Puerto
Rico
Banking
Law
provides
that when
the
expenditures
of
a bank
are greater
than
receipts,
the
excess
of 
expenditures over
receipts shall
be charged
against undistributed
profits of
the bank
and the
balance, if
any,
shall be
charged against 
the required
reserve fund
of the
bank. If
the reserve
fund is
not sufficient
to cover
such balance
in whole
or in
part, the
outstanding 
amount
must be
charged
against the
banks
capital account.
The Puerto
Rico Banking
Law provides
that, until
said capital
has been 
restored to its original
amount and the reserve
fund to 20% of
the original capital, the
bank may not declare
any dividends. In general, 
regulations
of
the
FDIA
and
the
FDIC
restrict
the
payment
of
dividends
when
a
bank
is
undercapitalized
(as
discussed
in
Prompt 
Corrective
Action
below),
when
a
bank
has
failed
to
pay
insurance
assessments,
or
when
there
are
safety
and
soundness
concerns 
regarding such bank. 
Refer
to
Part
II,
Item
5,
Market
for
Registrants
Common
Equity,
Related
Stockholder
Matters
and
Issuer
Purchases
of
Equity 
Securities of this Form 10-K for further information on the Corporations
distribution of dividends and repurchases of common stock. 
Consumer Financial Protection Bureau (CFPB) 
The
CFPB has
primary
examination
and enforcement
authority
over FirstBank
and other
banks
with assets
exceeding
$10 billion 
with respect to consumer financial products and services. 
The CFPB supervises covered
persons (broadly defined
to include any person
offering or providing
a consumer financial product 
or
service
and
any
affiliated
service
provider)
for
compliance
with
federal
consumer
financial
laws,
including
the
Equal
Credit 
Opportunity Act,
the Truth
in Lending
Act (TILA)
and the
Real Estate
Settlement Procedures
Act (RESPA).
The CFPB
also has 
authority
to prescribe
rules applicable
to covered
persons and
service providers
in connection
with consumer
financial products
and 
services. 
12 
Among
other
actions,
the
CFPB
has
issued
mortgage
servicing
regulations
applicable
to
the
Bank,
addressing
consumer
notices 
regarding
delinquency,
foreclosure
alternatives,
modification
applications,
interest rate
adjustments
and
options
for avoiding
force-
placed
insurance,
as
well
integrated
disclosure
requirements
under
TILA
and
RESPA
applicable
to
mortgage
loan
origination
and 
closing. 
During
2025,
the
CFPB
finalized
and
advanced
several
significant
regulatory
initiatives
affecting
large
depository
institutions, 
including
a
final
rule
substantially
restricting
overdraft
fees
for
institutions
with
more
than
$10
billion
in
assets
and
increased 
supervisory focus
on mortgage servicing,
credit reporting
accuracy,
and fee practices
that may cause
tangible human
harm. However, 
in May
2025, Congress
nullified the
CFPBs
overdraft fee
rule pursuant
to the
Congressional Review
Act, and
the rule
will not
take 
effect. As a result,
the CFPB is prohibited
from issuing substantially similar overdraft
fee rule absent new statutory
authorization from 
Congress.
In
addition,
the
CFPB
finalized
its
Personal
Financial
Data
Rights
(Open
Banking)
rule
in
October
2024;
however, 
implementation of that
rule has been stayed
by a federal court
and the CFPB initiated
a new rulemaking
process in 2025 to
reconsider 
and potentially revise the framework, creating continued uncertainty
regarding compliance timelines. 
Since
early
2025,
the
CFPB
has
significantly
reduced
its
enforcement,
supervision,
and
rulemaking
activities,
consistent
with 
broader deregulatory
priorities of the
Trump administration.
These developments have
included the withdrawal
or recission of
certain 
guidance,
dismissal
of
enforcement
actions,
reduced
examination
activity,
and
proposals
to
substantially
downsize
the
agency
and 
limit its funding. While statutory
authority remains unchanged, the scope,
pace, and intensity of CFPB supervision
and regulation may 
continue to evolve, and the ultimate impact on covered institutions remains
uncertain. 
The Volcker
Rule
Section
13
of
the
Bank
Holding
Company
Act,
commonly
known
as
the
Volcker
Rule,
generally
prohibits
a
banking
entity, 
including the
Corporation and the
Bank, from engaging
in short-term proprietary
trading of certain
securities, derivatives,
commodity 
futures,
and
options
on
these
instruments
for
its
own
account.
The
Volcker
Rule
also
restricts
banking
entities
from
acquiring
or 
retaining any ownership in, or acting as sponsor to, a hedge fund
or private equity fund (covered fund). 
The Corporation and
the Bank are not engaged
in proprietary trading as
defined in the Volcker
Rule. In addition, the
Corporation 
has reviewed its investments and concluded that they are not considered
covered funds under the Volcker
Rule.
Community Reinvestment Act 
The
CRA
encourages
banks
to
help
meet
the
credit
needs
of
communities
they
serve,
including
low-
and
moderate-income 
individuals,
consistent with
the safe
and sound
operation of
the bank.
The CRA
requires the
federal supervisory
agencies, as
part of 
the
general
examination
of
supervised
banks,
to
assess
a
banks
record
of
meeting
the
credit
needs
of
its
community,
assign
a 
performance
rating,
and
consider
the
rating
when
reviewing
certain
applications
such
as
mergers,
branch
establishment,
and
other 
activities. A
rating of
less than
satisfactory could
result in
the denial
of such
applications. The
CRA also requires
all institutions
to 
make
public
disclosure
of
their
CRA
ratings.
FirstBank
received
a
satisfactory
CRA
rating
in
its most
recent
examination
by
the 
FDIC. 
In
October
2023,
the
U.S.
federal
banking
regulatory
agencies
issued
a
final
rule
to
strengthen
and
modernize
their
regulations 
implementing the CRA,
originally scheduled
to take effect
on April 1,
2024, with most
of its provisions
applicable beginning
January 
1,
2026
and
data
reporting
required
in
2027.
However,
several
banking
industry
groups
filed
a
lawsuit
challenging
the
rule,
and
in 
March
2024
a
federal
judge
granted
an
injunction
delaying
its
effective
date.
In
July
2025,
the
FDIC,
Federal
Reserve
Board,
and 
OCC announced
their intent
to rescind
the 2023
CRA final
rule and
revert to
the 1995
CRA regulations.
As a
result, banks
currently 
remain
subject
to
the
1995
CRA
framework,
and
the
enhanced
requirements
contemplated
by
the
2023
CRA
final
rule
are
not
in 
effect. 
USA PATRIOT
Act and Other Anti-Money Laundering Requirements
As
a
regulated
depository
institution,
FirstBank
is
subject
to
the
Bank
Secrecy
Act,
which
requires
financial
institutions
to
file 
suspicious
activity and
currency transaction
reports that
are designed
to assist
in the
detection
and
prevention of
money laundering, 
terrorist financing and other criminal activities. In addition,
under Title III of the USA PATRIOT
Act of 2001, all financial institutions 
are
required
to
identify
their
customers,
adopt
formal
and
comprehensive
anti-money
laundering
programs,
scrutinize
or
prohibit 
certain transactions
of special
concern, and
be prepared
to respond
to inquiries
from U.S.
law enforcement
agencies concerning
their 
customers and their transactions.
In
January
2021,
major
legislative
amendments
to
U.S.
anti-money
laundering
requirements
became
effective
through
the 
enactment
of
Division
F
of
the
National
Defense
Authorization
Act
for
fiscal
year
2021,
otherwise
known
as
the
Anti-Money 
Laundering
Act
of
2020
(the
AML
Act).
The
AML
Act
significantly
modernized
the
U.S.
AML
and
counter-terrorist
financing 
framework, including the creation of a national database of
corporate beneficial ownership along with significantly
enhanced reporting 
13 
requirements,
increased
penalties
for
Bank
Secrecy
Act
violations,
clarification
of
Suspicious
Activity
Report
filing
and
sharing 
requirements,
and
provisions
addressing
the
adverse
consequences
of
de-risking,
namely,
the
practice
of
financial
institutions 
termination or
limitation of
business relationships
with clients
or classes
of clients
in order
to manage
the risks
associated with
such 
clients. 
Regulations implementing the Bank Secrecy Act and the
USA PATRIOT
Act are published and primarily enforced
by the Financial 
Crimes Enforcement Network (FinCEN),
a bureau of the U.S.
Treasury.
Failure of a financial institution,
such as the Corporation
or 
the
Bank,
to
comply
with
the
requirements
of
the
Bank
Secrecy
Act
or
the
USA
PATRIOT
Act
could
have
serious
legal
and 
reputational
consequences
for
the
institution,
including
the
possibility
of
regulatory
enforcement
or
other
legal
actions,
such
as 
significant
civil
monetary
penalties.
The
Corporation
is
also
required
to
comply
with
federal
economic
and
trade
sanctions 
requirements enforced by the Office of Foreign Assets Control
(OFAC), a bureau
of the U.S. Treasury.
The Corporation believes
it has adopted appropriate
policies, procedures and controls
to address compliance with
the Bank Secrecy 
Act, USA
PATRIOT
Act and
economic/trade
sanctions requirements,
and to
implement banking
agency,
FinCEN, OFAC
and
other 
U.S. Treasury regulations.
Financial Privacy and Cybersecurity 
The
Gramm-Leach-Bliley
Act
limits
the
ability
of
financial
institutions
to
disclose
non-public
consumer
information
to
non-
affiliated
third parties,
requires disclosure
of privacy
policies to
consumers and,
in some
circumstances,
allow consumers
to prevent 
disclosure of certain personal information to a non-affiliated
third party.
The
federal
banking
regulators
regularly
issue
guidance
to
strengthen
cybersecurity
risk
management
standards.
Financial 
institutions are expected to maintain multiple lines of
defense and robust risk management processes to
address potential cyber threats. 
Management
must
ensure
effective
procedures
to
respond
to
and
recover
operations
after
a
cyber-attack
and
establish
processes
to 
restore
data and
business functions
if a
critical service
provider is
impacted. Our
Corporate Information
Security
Program
(CISP) 
reflects these
requirements
and
outlines
our
overall vision,
direction,
and governance
efforts to
protect
the confidentiality,
integrity, 
and availability of customer information and prevent access by unauthorized
personnel. 
In July
2023, the
SEC adopted
rules requiring
registrants to
disclose material
cybersecurity incidents
and provide
annual reporting 
regarding cybersecurity
risk management,
strategy,
and governance.
Registrants must
report cybersecurity
material incidents
on Item 
1.05 of Form
8-K within four
business days of
determining materiality,
describing the
incidents
nature, scope,
and timing, as
well as 
its material impact or reasonably likely material impact on the registrant.
The rule also added Regulation S-K Item 106, which requires 
disclosure
of the
registrants
processes,
if any,
for assessing,
identifying, and
managing material
risks from
cybersecurity
threats, as 
well
as
the
material
effects
or
reasonably
likely
material
effects
of
risks
from
cybersecurity
threats
and
previous
cybersecurity 
incidents on Item
1C. Cybersecurity to
this Form 10-K.
Item 106 also
requires registrants to
describe the board
of directors oversight 
of risks
from cybersecurity
threats and
managements
role and
expertise in
assessing and
managing material
risks from
such threats. 
These disclosures are included in Part I, Item 1C. Cybersecurity
to this Form 10-K.
Limitations on Transactions with Affiliates
and Insiders 
Certain
transactions
between
FDIC-insured
depository
financial
institutions,
such
as
FirstBank,
and
its affiliates
are
governed
by 
Sections 23A
and 23B of
the Federal Reserve
Act and Regulation
W of the
Federal Reserve.
An affiliate
of a bank
is, in general,
any 
corporation
or entity
that controls,
is controlled
by,
or is
under
common
control with
the bank,
including
the banks
parent
holding 
company and any companies that are controlled by such holding company. 
Generally,
Sections 23A and 23B of
the Federal Reserve Act (i)
limit the extent to which
the bank or its subsidiaries
may engage in 
covered
transactions
with
any
one
affiliate
to
an
amount
equal
to
10%
of
such
banks
capital
stock
and
surplus,
and
contain
an 
aggregate limit
on all
such transactions
with all
affiliates to
an amount
equal to 20%
of such
banks
capital stock and
surplus and
(ii) 
require
that all
covered transactions
be on
terms that
are substantially
the same,
or at
least as
favorable
to the
bank or
affiliate,
as 
those
provided
to
a
non-affiliate.
The
term
covered
transaction
includes
the
making
of
loans,
purchase
of
assets,
issuance
of
a 
guarantee, credit
derivatives, securities
lending and
other similar
transactions entailing
the provision
of financial
support by
the bank 
to an affiliate. In
addition, loans or other extensions
of credit by the bank
to the affiliate are required
to be collateralized in accordance 
with the requirements set forth in Section 23A of the Federal Reserve Act.
In
addition,
Sections
22(h)
and
(g)
of
the
Federal
Reserve
Act,
implemented
through
Regulation
O,
place
restrictions
on 
commercial bank loans to executive
officers, directors, and principal stockholders
of the bank and its affiliates.
Under Section 22(h) of 
the Federal Reserve
Act, bank loans to
a director, an
executive officer,
a greater than 10%
stockholder of the
bank, and certain related 
interests of these persons,
may not exceed, together
with all other outstanding
loans to such persons
and affiliated interests,
the banks 
limit on loans
to one borrower,
which is generally
equal to 15%
of the banks
unimpaired capital and
surplus in the
case of loans
that 
are not fully secured,
and an additional 10% of
the bank's unimpaired capital
and unimpaired surplus in
the case of loans that
are fully 
14 
secured by
readily marketable
collateral having
a market
value at
least equal
to the
amount of
the loan.
Section 22(h)
of the
Federal 
Reserve Act also requires
that loans to directors,
executive officers, and
principal stockholders be made
on terms that are substantially 
the same
as offered
in comparable
transactions to
other persons
and also
requires prior
board approval
for certain
loans. In
addition, 
the
aggregate
amount
of
extensions
of
credit
by
a
bank
to
insiders
cannot
exceed
the
banks
unimpaired
capital
and
surplus. 
Furthermore, Section 22(g) of the Federal Reserve Act places additional
restrictions on loans to executive officers. 
Executive Compensation 
The federal
banking agencies
have adopted
interagency guidance
on incentive-based
compensation arrangements
applicable to
all 
banking
organizations
regardless
of
asset
size.
This
guidance
establishes
a
principles-based
framework
designed
to
ensure
that 
incentive-based
compensation
arrangements
appropriately
tie
rewards
to
longer-term
performance
and
do
not
undermine
the
safety 
and soundness of banking
organizations or create undue
risks to the financial system.
The framework emphasizes
balanced risk-taking 
incentives, compatibility
with effective
controls and risk
management, and
strong corporate governance,
and provides for
supervisory 
or enforcement action where material deficiencies threaten an institutions
safety and soundness.
In May
2016, the
federal financial
regulators re-proposed
regulations under
Section 956
of the
Dodd-Frank Act
(first proposed
in 
2011)
governing
incentive-based
compensation
practices
at
covered
banking
institutions,
which
would
include,
among
others,
all 
banking
organizations
with
assets
of
$1
billion
or
greater.
Portions
of
these
proposed
rules
would
apply
to
the
Corporation
and 
FirstBank. Those
applicable provisions
would generally (i)
prohibit types
and features of
incentive-based compensation
arrangements 
that encourage inappropriate
risk because they
are excessive or
could lead to
material financial loss
at the banking
institution; (ii) 
require
incentive-based
compensation
arrangements
to
adhere
to
three
basic
principles:
(1)
a
balance
between
risk
and
reward;
(2) 
effective
risk management
and controls;
and (3)
effective governance;
and (iii)
require appropriate
board of
directors (or
committee) 
oversight and recordkeeping and disclosures to the banking
institutions primary regulatory agency.
As of December 31, 2025, the rule 
has
not
been
finalized.
Although
several
federal
banking
agencies
re-proposed
the
rule
in
2024,
the
absence
of
joint
action
by
all 
required regulators continues to delay adoption, and the timing and substance
of any final rule remain uncertain. 
In August 2022,
the SEC introduced
new pay-versus-performance
disclosure rules, which
took effect
in October 2022,
requiring to 
clearly disclose
the relationship
between executive
compensation and
the companys
financial performance.
Additionally,
in October 
2022,
the
SEC
finalized
a
rule
that
directs
stock
exchanges
to
require
listed
companies
to
implement
clawback
policies
to
recover 
incentive-based
compensation
from
current
or
former
executive
officers
in
the
event
of
certain
financial
restatements,
and
requires 
companies
to, among
other
things,
file
their
clawback
policies as
Exhibit
97 of
Form 10-K.
Our
Compensation
Clawback
Policy
is 
compliant with NYSEs listing standards
pursuant to this rule. 
Prompt Corrective Action
The
prompt
corrective
action
provisions
of
the
FDIA
require
the
federal
bank
regulatory
agencies
to
take
prompt
corrective 
action
against
any
insured
depository
institution
that
is
undercapitalized.
The
FDIA
establishes
five
capital
categories:
well-
capitalized,
adequately
capitalized,
undercapitalized,
significantly
undercapitalized,
and
critically
undercapitalized.
Well-capitalized 
insured depository institutions significantly exceed the required minimum
level for each relevant capital measure.
A banks
capital category
may not
constitute
an accurate
representation
of the
overall financial
condition
or prospects
of a
bank, 
such
as
the
Bank,
and
should
be
considered
in
conjunction
with
other
available
information
regarding
the
financial
condition
and 
results of operations of such bank. 
Deposit Insurance 
FirstBank
is
subject
to
FDIC
deposit
insurance
assessments,
which
increased
for
all
banks,
including
FirstBank,
following
the 
increase
in
deposit
insurance
coverage
to
up
to
$250,000
per
customer
and
the
FDICs
expanded
authority
to
increase
insurance 
premiums implemented
by the
Dodd-Frank Act.
The FDIA
further requires
that the
designated reserve
ratio for
the DIF
for any
year 
not be less than 1.35% of estimated
insured deposits or the comparable percentage
of the new deposit assessment base. In addition,
the 
FDIC was
required to
take the
necessary actions
for the
reserve ratio
to reach
1.35% of
estimated insured
deposits by
September 30, 
2020. The FDIC managed
to reach the goal early,
achieving a reserve ratio of
1.36% in September 2018. However,
in the third quarter 
of 2020,
the FDIC
announced
that the
reserve
ratio of
the DIF
fell nine
basis points
between
the first
and
second
quarters of
2020, 
from 1.39% to 1.30%.
The decline was attributed to
an unprecedented surge
in deposits. The FDIC approved
a plan that is expected
to 
restore
the
DIF
to
at
least
1.35%
within
eight
years,
as
required
by
the
FDIA.
Under
the
plan,
the
FDIC
will
maintain
the
current 
schedules
of assessment
rates
for
all banks;
monitor
deposit balance
trends,
potential losses
and
other
factors
that affect
the reserve 
ratio; and
provide updates
to its
loss and
income projections
at least
twice a
year.
The FDIC
has also
adopted a
final rule
raising its 
industry
target ratio
of reserves
to insured
deposits to
2%, 65
basis points
above the
statutory minimum,
but the
FDIC has
indicated 
that it does not project that goal to be met for several years.
15 
In
October
2022,
the
FDIC
adopted
a
final
rule,
applicable
to
all
insured
depository
institutions,
to
increase
initial
base
deposit 
insurance assessment rate schedules
uniformly by 2 basis points,
beginning in the first quarterly
assessment period of 2023.
The FDIC 
designated a
long-term reserve
ratio for
the DIF
of 2%
and has
continued to
maintain that
designation through
2026. The
increase in 
assessment rate schedules
was intended to
increase the likelihood
that the reserve ratio
of the DIF would
reach the statutory
minimum 
of 1.35% by
the statutory deadline
of September 30,
2028. As of 2025,
the FDIC has reported
that the DIF reserve
ratio has exceeded 
the
statutory
minimum
and
remains
below
the
2%
designated
reserve
ratio.
Accordingly,
the
increased
assessment
rate
schedules 
remain in effect. Progressively lower assessment rate schedules
will take effect if the reserve ratio reaches 2% and again at 2.5%.
In November
2023, the FDIC
issued a final
rule imposing
a special assessment
to recover
estimated losses incurred
by the Deposit 
Insurance
Fund
(DIF)
resulting
from
the
closures
of
Silicon
Valley
Bank
and
Signature
Bank.
The
assessment
is
being
collected 
quarterly
from
certain
insured depository
institutions,
including
the Bank,
beginning
with the
quarter
ending
June 30,
2024.
During 
2024, the
Corporation recorded an
additional loss related
to the FDIC
special assessment
to reflect
updated estimates of
its obligation 
based
on information
available at
that time,
including
the impact
of the
then-established extended
assessment period
provisions.
On 
December
16,
2025, the
FDIC issued
an interim
final rule
amending
the collection
terms of
the special
assessment,
which
included 
reducing
the
collection
rate
in
the
eighth
collection
quarter
from
3.36
basis
points
to
2.97
basis
points,
removing
the
previously 
established
extended
assessment
period
provisions
and
providing
offsets
to
regular
quarterly
deposit
insurance
assessments
if 
aggregate
collections
exceed
actual
losses.
As
of
December
31,
2025,
the
Corporations
total
estimated
FDIC
special
assessment 
amounted to $6.3 million,
of which $5.5 million has been
paid. The Corporation continues to
monitor the FDICs
estimated loss to the 
DIF, which
could affect the amount of its accrued liability. 
FDIC Insolvency Authority
Under
Puerto
Rico banking
laws, the
OCIF may
appoint
the FDIC
as conservator
or receiver
of a
failed or
failing
FDIC-insured 
Puerto Rican bank,
and the FDIA authorizes
the FDIC to accept
such an appointment or
to appoint itself as
conservator or receiver.
In 
an insolvency
scenario or
the occurrence
of other
events, the
FDIC has
broad authority
to transfer
or liquidate
the banks
assets and 
liabilities, pay
out insured
depositors, as
well as
uninsured depositors
and other
creditors to
the extent
of the
closed banks
available 
assets, administer
the receivership
estate, pay
out estate
claims, and
repudiate or
disaffirm
certain types
of contracts.
In the
event of 
any liquidation
or resolution
of an insured
depository institution,
including the
Bank, depositors claims
(including those
of the FDIC 
as
subrogee
of
insured
depositors)
and
certain
administrative
expenses
have
priority
over
other
general
unsecured
creditors. 
Accordingly, if the
Bank were to fail, insured and uninsured depositors, along
with the FDIC, would have priority in payment ahead of 
unsecured, non-deposit
creditors, including
the Corporation,
with respect
to any
extensions of
credit they
have made
to such
insured 
depository institution. 
Activities and Investments 
The
principal
activities
of
FDIC-insured,
state-chartered
banks,
such
as
FirstBank,
are
generally
limited
to
those
that
are 
permissible for national
banks. Similarly,
under regulations dealing
with equity investments, an
insured state-chartered bank generally 
may not directly
or indirectly acquire
or retain any equity
investments of a
type, or in an
amount, that is not
permissible for a national 
bank. 
Federal Home Loan Bank System 
FirstBank is
a member
of the
FHLB system,
a network
of eleven
regional FHLBs
governed and
regulated by
the Federal
Housing 
Finance Agency that serve as reserve or credit facilities for member
institutions within their assigned regions.
As a member
of FHLB of
New York,
FirstBank is required
to hold shares
of capital stock
in the FHLB
of New York
in an amount 
calculated in
accordance with the
requirements set forth
in applicable laws
and regulations.
FirstBank is in
compliance with
the stock 
ownership
requirements
of
the
FHLB
of
New
York.
All
loans,
advances
and
other
extensions
of
credit
made
by
the
FHLB
to 
FirstBank
are
secured
by
a
portion
of
FirstBanks
mortgage
loan
or
securities
portfolios,
certain
other
investments
and
the
capital 
stock of the FHLB held by FirstBank. 
The board
of directors
of each
FHLB may
increase minimum
investment requirements
to meet
regulatory capital
needs, subject
to 
the Federal Housing
Finance Agency approval
in certain cases. Because
the extent of
any obligation to
increase our investment in
any 
of the
FHLBs depends
entirely upon
the occurrence
of a
future event,
the amount
of any
future investment
in the
capital stock
of the 
FHLBs is not determinable. 
Ownership and Control
Because
of
FirstBanks
status
as
an
FDIC-insured
bank,
as
defined
in
the
Bank
Holding
Company
Act,
the
Corporation,
as
the 
owner of
FirstBanks
common stock,
is subject to
certain restrictions and
disclosure obligations
under various federal
laws, including 
the
Bank
Holding
Company
Act
and
the
Change
in
Bank
Control
Act
(the
CBCA).
Regulations
adopted
pursuant
to
the
Bank 
16 
Holding Company Act and
the CBCA generally require prior
Federal Reserve Board or other
federal banking agency approval or
non-
objection for an acquisition
of control of an
insured institution (as defined
in the Act) or holding
company thereof by any person
(or 
persons acting in
concert). Control is
deemed to exist
if, among other
things, a person (or
group of persons
acting in concert)
acquires 
25% or more
of any class of
voting stock of
an insured institution
or holding company
thereof. Under the CBCA,
control is presumed 
to exist
subject to
rebuttal if
a person
(or group
of persons
acting in
concert) acquires
10% or
more of
any class
of voting
stock and 
either (i)
the corporation
has registered securities
under Section
12 of
the Exchange Act,
or (ii) no
person (or
group of persons
acting 
in
concert)
will own,
control
or
hold
the
power
to
vote
a
greater
percentage
of that
class of
voting
securities
immediately
after
the 
transaction.
The
concept
of
acting
in
concert
is
broad
and
subject
to
certain
rebuttable
presumptions,
including,
among
others,
that 
relatives, business
partners, management
officials, affiliates
and others
are presumed
to be acting
in concert
with each other
and their 
businesses. The regulations of the FDIC implementing the
CBCA are generally similar to those described above.
The Puerto
Rico Banking
Law requires
the approval
of the
OCIF for
changes in
control of
a Puerto
Rico bank.
See Puerto
Rico 
Banking Law below for further detail. 
Standards for Safety and Soundness 
The
FDIA
requires
the
FDIC
and
other
federal
bank
regulatory
agencies
to
prescribe
standards
of
safety
and
soundness.
Bank 
regulators
have
various
remedies
available
if
they
determine
that
the
financial
condition,
capital
resources,
asset
quality,
earnings 
prospects, management,
liquidity,
or other
aspects of
a banking
organizations
operations are
unsatisfactory.
The regulators
may also 
take action
if they
determine that
the banking
organization or
its management
is violating
or has
violated any
law or
regulation. The 
regulators
have
the
power
to,
among
other
things,
prohibit
unsafe
or
unsound
practices,
require
affirmative
actions
to
correct
any 
violation
or
practice,
issue
administrative
orders
that
can
be
judicially
enforced,
direct
increases
in
capital,
direct
the
sale
of 
subsidiaries
or
other
assets,
limit
dividends
and
distributions,
restrict
growth,
assess
civil
monetary
penalties,
remove
officers
and 
directors, and terminate deposit insurance. 
Engaging in
unsafe or
unsound practices
or failing
to comply
with applicable
laws, regulations,
and supervisory
agreements could 
subject
the
Corporation,
its
subsidiaries,
and
their
respective
officers,
directors,
and
institution-affiliated
parties
to
the
remedies 
described
above,
and
other
sanctions.
In
addition,
the
FDIC may
terminate
a
banks
deposit
insurance
upon
finding
that
the
banks 
financial condition is unsafe or
unsound or that the bank has engaged
in unsafe or unsound practices or has
violated an applicable rule, 
regulation, order, or condition enacted
or imposed by the banks regulatory
agency. 
Regulatory Framework for Leveraged Lending Activities 
In December
2025, the
OCC and
the FDIC
rescinded the
Interagency Guidance
on Leveraged
Lending (2013
Guidance) and
its 
2014
FAQs,
citing
that
the
framework
was
overly
restrictive,
extended
beyond
its
intended
scope,
and
contributed
to
a
shift
of 
leveraged
lending
to
nonbank
lenders.
In
addition,
the
2013
Guidance
had
not
been
submitted
to
Congress
as
required
under
the 
Congressional
Review
Act.
Following
the
rescission,
banks
are
expected
to
manage
leveraged
lending
activities
under
general 
principles for safe
and sound lending,
consistent with broader
commercial credit risk
management standards.
Institutions are expected 
to maintain
a defined
risk appetite,
apply a
consistent internal
definition of
leveraged loans,
adhere to
sound underwriting
standards, 
monitor
borrower
performance
and
refinancing
risk,
and
conduct
independent
credit
assessments
for
participations.
Examiners
will 
continue
to
assess
underwriting,
risk
ratings,
and
reserves
based
on
the
size
and
risk
profile
of
each
banks
leveraged
lending 
activities. The rescission does not result in immediate changes to Call Report requirements. 
Brokered Deposits 
FDIC regulations
adopted
under
the FDIA
govern
the receipt
of brokered
deposits by
banks. Well
-capitalized
institutions are
not 
subject
to
limitations
on
brokered
deposits,
while
adequately
capitalized
institutions
are
able
to
accept,
renew
or
rollover
brokered 
deposits only
with a
waiver from
the FDIC
and subject
to certain
restrictions on
the interest
paid on
such deposits.
Undercapitalized 
institutions
are
not
permitted
to
accept
brokered
deposits.
In
October
2020,
the
FDIC
adopted
revisions
to
its
brokered
deposit 
regulations that became
effective on April
1, 2021, with
full compliance extended
to January 1,
2022. For brokered
deposits, the final 
rule established
a new framework
for analyzing
certain parts of
the deposit
broker definition,
including a new
interpretation for
the 
primary purpose exception and
the business relationships that meet the
exception. Pursuant to this revision, during
the fourth quarter 
of 2021, certain non-maturity deposits previously reported as brokered
deposits were recharacterized as non-brokered deposits.
Puerto Rico Banking Law
As
a
commercial
bank
organized
under
the
laws
of
the
Commonwealth
of
Puerto
Rico,
FirstBank
is
subject
to
supervision, 
examination and regulation by the
commissioner of OCIF (the Commissioner)
pursuant to the Puerto Rico
Banking Law of 1933, as 
amended (the Banking Law), which governs its corporate
structure, powers, capital and investment requirements,
lending limits, and 
the authority of the Commissioner. 
17 
The Banking Law requires
every bank to maintain
a legal reserve, which shall
not be less than
20% of its demand
liabilities, except 
government deposits (federal,
state and municipal) that
are secured by actual
collateral. The reserve is required
to be composed of
any 
of the permitted
securities, or a
combination thereof,
including cash, immediately
collectible items,
and other assets
authorized by the 
Commissioner.
Section 17 of the Banking Law,
as amended by Section 8.2 of Regulation No. 9680, permits Puerto
Rico commercial banks to make 
loans to
any one
person, firm,
partnership or
corporation in
an aggregate
amount of
up to
15% of
the sum
of: (i) the
banks
paid-in 
capital;
(ii) the
banks
reserve
fund;
(iii) 100%
of
the
banks
retained
earnings,
subject
to
certain
limitations;
and
(iv) any
other 
components
that
the
Commissioner
may
determine
from
time to
time.
If such
loans
are secured
by collateral
worth
at least
25%
in 
excess of the
loan amount,
the aggregate
maximum amount may
reach 33.33%
of the sum
of the banks
paid-in capital,
reserve fund, 
100%
of retained earnings,
subject to certain
limitations, and such
other components that
the Commissioner may
determine from time 
to time. There
are no restrictions
under the Banking
Law on the
amount of loans
that may be
wholly secured by
bonds, securities and 
other evidences
of indebtedness of
the government
of the United
States, or of
the Commonwealth
of Puerto
Rico, or by
bonds, not
in 
default, of municipalities or instrumentalities of the Commonwealth of
Puerto Rico.
The Banking Law
requires that Puerto
Rico commercial banks prepare
each year a balance
summary of their
operations and submit 
such balance
summary
for approval
at a
regular meeting
of stockholders,
together with
an explanatory
report thereon.
The Banking 
Law also requires
that at least
10% of the
yearly net income
of a Puerto
Rico commercial bank
be credited annually
to a reserve
fund 
until such reserve fund is in an amount equal to the total paid-in-capital
of the bank. 
The
Banking Law
also provides
that when
a Puerto
Rico commercial
banks
expenditures
exceed its
receipts,
the excess
must be 
charged
first
to
undistributed
profits
of
the
bank,
then
to
the
reserve
fund,
and,
if
needed,
to
the
capital
account,
and
it
prohibits 
declaration of dividends until capital has been restored to its original
amount and the reserve fund equals 20% of the original capital. 
The
Finance
Board,
composed
of
representatives
from
various
Puerto
Rico
Government
agencies,
instrumentalities
and
public 
corporations,
including the
Commissioner,
has the
authority to
regulate the
maximum interest
rates and
finance charges
that may
be 
charged
on
loans
to
individuals
and
unincorporated
businesses
in
Puerto
Rico,
but
current
regulations
allow
most
such
rates
to
be 
determined
by
free
competition.
Accordingly,
the
regulations
do
not
set
a
maximum
rate
for
charges
on
retail
installment
sales 
contracts, small
loans, and
credit card
purchases. Furthermore,
there is
no maximum
rate set for
installment sales
contracts involving 
motor vehicles, commercial, agricultural and industrial equipment,
commercial electric appliances and insurance premiums. 
International Banking Center Regulatory Act of Puerto Rico (IBE Act 52)
The business and operations
of FirstBank International Branch
(FirstBank IBE or the IBE
division of FirstBank)
and FirstBank 
Overseas Corporation (the IBE subsidiary of FirstBank)
are subject to supervision and regulation by
the Commissioner. FirstBank IBE 
and FirstBank
Overseas Corporation
were established
pursuant to
Puerto Rico Act
52-1989, as
amended, known
as the International 
Banking
Center
Regulatory
Act
(the
IBE
Act
52).
The
IBE
Act
52
provides
for
total
Puerto
Rico
tax
exemption
on
net
income 
derived by
an IBE operating
in Puerto Rico
on the specific
activities identified
in the IBE
Act 52. An
IBE that operates
as a unit
of a 
bank
pays
income taxes
at
the corporate
standard rates
to the
extent
that
the IBEs
net
income
exceeds 20%
of the
banks
total net 
taxable income.
Under the
IBE Act 52,
certain sales,
encumbrances, assignments,
mergers, exchanges
or transfers
of shares,
interests 
or participation(s)
in the
capital of
an IBE
may not
be initiated
without the
prior approval
of the
Commissioner.
The IBE
Act 52
and 
the regulations issued thereunder
by the Commissioner (the IBE
Regulations) limit the business
activities that may be
carried out by 
an IBE. Such activities are limited in part to persons and assets located outside
of Puerto Rico. 
Pursuant to the
IBE Act 52 and
the IBE Regulations,
each of FirstBank IBE
and FirstBank Overseas
Corporation must maintain,
in 
Puerto
Rico,
books
and
records
of
its
transactions
conducted
in
the
ordinary
course
of
business.
FirstBank
IBE
and
FirstBank 
Overseas
Corporation
are
also
required
to
submit
to
the
Commissioner
quarterly
reports
of
their
financial
condition
and
results
of 
operations, and are required to comply with the annual audited financial
statements requirement. 
The IBE Act
52 empowers
the Commissioner
to revoke
or suspend, after
notice and hearing,
a license issued
thereunder if,
among 
other things, the IBE fails to
comply with the IBE Act 52, the IBE
Regulations or the terms of its license,
or if the Commissioner finds 
that the business or affairs of the IBE are conducted in a manner
that is not consistent with the public interest. 
On February
16, 2024,
the Governor
of Puerto
Rico approved
Act 45
of 2024
which amended
the IBE
Act 52. These
amendments 
became
effective
on
May
15,
2024,
and,
among
other
things,
increased
the
annual
license
fee
paid
by
the
IBEs
to
OCIF
from
$5 
thousand to $25 thousand and amended
certain other compliance matters, including
a minimum employment requirement of eight
full-
time
employees.
The amendments
also
established
updated
prudential
standards,
such
as higher
minimum
paid-in
capital, enhanced 
custody
and
asset-quality rules,
and
a phased
increase in
required
unencumbered
assets for
existing
IBEs, from
$0.5 million
for
the 
2024-2025
compliance
period
to
$1.5
million
by
20272028,
while
newly
organized
entities
must
maintain
at
least
$1
million
in 
unencumbered assets. 
18 
Puerto Rico Income Taxes 
Under the
Puerto Rico
Internal Revenue
Code of
2011,
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.
A 
subsidiary
may
realize
a
tax benefit
from
a
net
operating
loss (NOL)
only
if
it
can generate
sufficient
taxable
income
within
the 
applicable NOL
carryforward period.
The PR Tax
Code provides
a dividend received
deduction of
100% on
dividends received
from 
controlled subsidiaries subject to taxation in Puerto Rico and 85% on
dividends received from other taxable domestic corporations. 
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
Corporations
expectation
of 
realizing these tax benefits under the new election established by
the Act.
The
Corporation
has
maintained
an
effective
tax
rate
lower
than
the
maximum
statutory
rate
in
Puerto
Rico,
which
has
resulted 
mainly
from conducting
business through
certain
entities
that have
special
tax treatments,
including
doing business
through
an IBE 
unit of
the Bank and
through FirstBank Overseas
Corporation, each
of which are
generally exempt
from Puerto
Rico income taxation 
under IBE
Act 52,
and through
a wholly-owned
subsidiary that
engages in
certain Puerto
Rico qualified
investing activities
that have 
certain tax advantages under Act 60 of 2019. 
United States Income Taxes
As
a
Puerto
Rico
corporation,
First
BanCorp.
is
treated
as
a
foreign
corporation
for
U.S.
and
USVI
income
tax
purposes
and, 
accordingly,
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.
Any such
tax paid
in the
U.S. and
USVI is
also 
creditable against the Corporations
Puerto Rico tax liability, subject
to certain conditions and limitations. 
Insurance Operations Regulation 
As a financial holding
company under the Bank
Holding Company Act,
we are permitted to
engage in a broader
range of activities, 
including insurance activities, that are permitted to bank holding
companies. 
FirstBank Insurance Agency
is registered as an
insurance agency with the
Insurance Commissioner of
Puerto Rico and is
subject to 
regulations issued by
the Insurance Commissioner
of Puerto Rico and
the Division of
Banking, Insurance and
Financial Regulation in 
the USVI
relating to,
among other
things, the
licensing of
employees and
sales and
solicitation and
advertising practices,
and by
the 
Federal Reserve
Board as
to certain
consumer protection
provisions mandated
by the
Gramm-Leach-Bliley Act
and its
implementing 
regulations. 
Mortgage Banking Operations 
In
addition
to
FDIC
and
CFPB
regulations,
FirstBank
is
subject
to
the
rules
and
regulations
of
the
FHA,
VA,
FNMA,
FHLMC, 
GNMA, and
the U.S.
Department of
Housing and
Urban Development
(HUD)
with respect
to originating,
processing,
selling and 
servicing mortgage
loans and the
issuance and
sale of MBS.
Those rules
and regulations,
among other
things, prohibit discrimination 
and
establish
underwriting
guidelines
that
include
provisions
for
inspections
and
appraisals,
require
credit
reports
on
prospective 
borrowers
and
fix
maximum
loan
amounts,
and,
with
respect
to 
VA 
loans,
fix
maximum
interest
rates.
Moreover,
lenders
such
as 
FirstBank are required
annually to submit
audited financial statements
to the FHA, VA,
FNMA, FHLMC, GNMA and
HUD and each 
regulatory entity
has its
own financial
requirements. FirstBanks
affairs are
also subject
to supervision
and examination
by the
FHA, 
VA,
FNMA,
FHLMC,
GNMA
and
HUD
at
all
times
to
assure
compliance
with
applicable
regulations,
policies
and
procedures. 
Mortgage origination activities are subject
to, among other requirements, the Equal
Credit Opportunity Act, TILA and
the RESPA
and 
the
regulations
promulgated
thereunder
that,
among
other
things,
prohibit
discrimination
and
require
the
disclosure
of certain
basic 
information to
mortgagors concerning
credit terms
and settlement
costs. FirstBank
is licensed
by the
Commissioner under
the Puerto 
Rico
Mortgage
Banking
Law,
and,
as
such,
is
subject
to
regulation
by
the
Commissioner,
with
respect
to,
among
other
things, 
licensing requirements and the establishment of maximum origination
fees on certain types of mortgage loan products. 
19 
WEBSITE ACCESS TO REPORT
The Corporation
makes available
annual reports
on Form
10-K, quarterly
reports on Form
10-Q, and current
reports on
Form 8-K, 
and amendments to
those reports, and proxy
statements on Schedule 14A,
filed or furnished pursuant
to Sections 13(a), 14(a)
or 15(d) 
of the Exchange
Act, free of
charge on or
through its internet
website at www.1firstbank.com
(under Investor Relations)
or directly 
through
the
Corporations
investor
relations
website,
fbpinvestor.com,
as
soon
as
reasonably
practicable
after
the
Corporation 
electronically
files
such
material
with,
or
furnishes
it
to,
the
SEC.
The
SEC
maintains
a
website
that
contains
reports,
proxy
and 
information statements, and other information regarding
issuers that file electronically with the SEC at www.sec.gov. 
The
Corporation
also
makes
available
its
Corporate
Governance
Guidelines
and
Principles,
the
charters
of
the
Audit, 
Asset/Liability,
Compensation
and
Benefits,
Credit,
Risk,
Trust,
and
Corporate
Governance
and
Nominating
Committees
and
the 
documents listed below,
free of charge on or through its internet website at www.fbpinvestor.com
(under Corporate Governance): 
Code of Ethics for CEO and Senior Financial Officers (the Code of
Ethics) 
Code of Ethical Conduct applicable to all employees 
Independence Principles for Directors 
Corporate Sustainability Reports 
Sustainability Policy 
The Corporate
Governance Guidelines and
Principles and the
aforementioned charters
and documents may
also be obtained
free of 
charge
by
sending
a written
request
to
Mrs. Sara
Alvarez Cabrero
,
Executive
Vice
President,
General
Counsel
and
Secretary
of the 
Board, PO Box 9146, San Juan, Puerto Rico 00908. 
Website addresses
referenced in this Form
10-K are provided as textual references
and for convenience only,
and the content on the 
referenced
websites does
not constitute
a part
of this
Form
10-K
or any
other report
or document
that the
Corporation
files with
or 
furnishes to the SEC. 
20 
Item 1A.
Risk Factors 
Below is
a discussion
about material
risks and
uncertainties that
could impact
the Corporations
businesses, results
of operations, 
financial
condition,
liquidity,
and
capital
position,
and
could
cause
actual
results
to
differ
materially
from
those
projected
in
any 
forward-looking statements. Additional
risks and uncertainties not currently
known to the Corporation or
deemed immaterial may also 
materially adversely affect
the Corporation. Thus,
the following should not
be considered a complete
discussion of all of
the risks and 
uncertainties the Corporation may face. See the discussion under Forward-Looking
Statements, in this Form 10-K. 
RISKS RELATING TO
THE BUSINESS ENVIRONMENT AND OUR INDUSTRY
The
effect
of
changes
in
the
interest
rate
environment
and
inflation
levels
on
the
level,
composition
and
performance
of
the 
Corporations
assets and
liabilities, and
corresponding effects
on the
Corporations
net interest
income, net
interest margin,
loan 
originations, deposit attrition, overall results of operations, and liquidity
position. 
Net
interest
income
represents
the
difference
between
the
interest
earned
on
interest-earning
assets
and
interest
paid
on
interest-
bearing liabilities.
Because assets
and liabilities
may reprice
at different
times and
by different
amounts, changes
in interest
rates can 
materially affect
net interest income
and net interest
margin. Prolonged
periods of
lower interest rates
generally compress
net interest 
margin and reduce profitability.
Higher interest rates can increase
borrowing costs for consumers
and businesses, reduce loan
demand, 
and
shift customer
behavior
among
deposit products,
which
can negatively
affect
loan
growth,
deposit retention,
funding costs,
and 
liquidity.
Competitive pressures
to attract
deposits may
increase reliance
on higher-cost
funding, including
wholesale funding,
which 
could
further
compress
net
interest margin.
Interest
rates
are
influenced
by
factors
beyond
our
control,
including
general
economic 
conditions, inflationary
trends, changes
in government spending
and debt issuances
and monetary policy
actions of governmental
and 
regulatory agencies, including the Federal Reserve Board. 
Additionally,
basis
risk
may
adversely
affect
net
interest
income.
Basis
risk
arises
when
interest
rates
for
different
financial 
instruments
with
similar
maturities,
or
the
indices
used
to
price
them,
change
at
different
times
or
by
different
magnitudes.
For 
example, the interest expense
for liability instruments might
not change by the
same amount as interest income
received from loans
or 
investments.
To
the
extent
that
the
interest
rates
on
loans
and
borrowings
change
at
different
rates
and
by
different
amounts,
the 
margin between
our variable rate-based
assets and the cost
of the interest-bearing
liabilities might be
compressed and adversely
affect 
net interest income. 
Also,
changes
in
interest
rates
may
impact
the
ability
to
attract
and
retain
clients,
as
well
as
gain
acceptance
from
current
and 
prospective
customers
for
new
and
existing
products
and
services.
This,
in
turn,
affects
demand
for
new
loan
originations,
the 
composition
of the
Corporations
interest-earning
assets, and
the extent
of any
re-shifting between
non-interest-bearing
and interest-
bearing liabilities.
Further,
changes in
interest rates
impact the
value of
our fixed-rate
securities. Any
unrealized gains
or losses
from 
these portfolios
impact other
comprehensive income,
stockholders equity,
and the
tangible common
equity ratio.
Any realized
gains 
or losses from these portfolios impact regulatory capital ratios. 
Changes in prepayments may adversely affect net interest income. 
Net interest income may be affected by
prepayments on MBS. Generally,
when rates rise, prepayments of principal and
interest will 
decrease, and
the duration
of MBS
securities will
increase and
vice versa.
Conversely,
when rates
fall, prepayments
of principal
and 
interest will
increase,
and
the duration
of MBS
will decrease.
Such acceleration
in the
prepayments
of MBS
would
lower yields
on 
these
securities,
as
the
amortization
of
premiums
paid
upon
the
acquisition
of
these
securities
would
accelerate.
Conversely, 
acceleration in
the prepayments
of MBS
would increase
yields on
securities purchased
at a
discount, as
the accretion
of the
discount 
would
accelerate.
Also,
net
interest
income
in
future
periods
might
be
affected
by
our
investment
in
callable
securities
because 
decreases in interest rates might prompt the early redemption of such securities. 
The
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
closure
and
placement
into receivership
with
the
FDIC of
certain
large
U.S.
regional
banks
with
assets over
$100
billion
in 
March
and
May
2023,
and
adverse
developments
affecting
other
banks,
resulted
in
heightened
levels
of
market
volatility
and 
consequently
negatively
impacted
customer
confidence
in
the
safety
and
soundness
of
financial
institutions.
These
developments 
resulted in certain
regional banks experiencing
higher than normal
deposit outflows and
an elevated level
of competition for
available 
deposits in the
market. The impact
of market volatility
from adverse developments
in the banking
industry such as
this one are highly 
uncertain and difficult
to predict. In the
aftermath of these
bank failures, the
banking agencies have
increased regulatory requirements 
and costs that may impact
capital ratios or the FDIC
deposit insurance premium.
For example, 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 
21 
December 31,
2025, the
Corporations
total estimated
FDIC special
assessment amounted
to $6.3
million, of
which $5.5
million has 
been paid.
The Corporation
continues to
monitor the
FDICs
estimated loss
to the
DIF,
which could
affect the
amount of
its accrued 
liability. 
Difficult market
and general
economic conditions
have affected
the financial
industry in
the past
and could
adversely affect
us 
in the future. 
Given that most of our business is in Puerto Rico and the
U.S. and given the degree of interrelation between
Puerto Ricos economy 
and that
of the
U.S., we
are exposed
to downturns
in the
U.S. economy,
including factors
such as
employment levels
in the
U.S. and 
real
estate
valuations.
The
deterioration
of
these
conditions
has
adversely
affected
us
in
the
past
and
in
the
future
could
adversely 
affect
the
credit
performance
of
mortgage
loans,
and
result
in
significant
write-downs
of
asset
values
by
financial
institutions, 
including U.S. government-sponsored entities (GSEs)
as well as major commercial banks and investment banks.
In particular, we may face the following
risks:
Our ability
to assess the
creditworthiness of
our customers
may be impaired
if the models
and approaches
we use to
select, 
manage, and underwrite the loans become less predictive of future behaviors.
The
models
used
to
estimate
losses
inherent
in
the
credit
exposure,
particularly
those
under
CECL,
require
difficult, 
subjective, and
complex judgments,
including forecasts
of economic
conditions and
how these
economic predictions
might 
impair
the
ability
of
the borrowers
to
repay
their
loans, which
may
no longer
be
accurately estimated
and
which
may,
in 
turn, impact the reliability of the models.
Our
ability
to
borrow
from
other
financial
institutions
or
to
engage
in
sales
of
mortgage
loans
to
third
parties
(including 
mortgage
loan
securitization
transactions
with
GSEs
and
repurchase
agreements)
on
favorable
terms,
or
at
all,
could
be 
adversely
affected
by
further
disruptions
in
the
capital
or
credit
markets
or
other
events,
including
deteriorating
investor 
expectations.
Competitive dynamics
in the
industry could
change as
a result
of strategic
growth opportunities
in connection
with current 
market conditions.
Expected
future
regulation
of
our
industry
may
increase
our
compliance
costs
and
limit
our
ability
to
pursue
business 
opportunities.
There may be downward pressure on our stock price.
Any deterioration
of economic
conditions in
the U.S.
and disruptions
in the
financial markets
could adversely
affect our
ability to 
access capital,
our business,
financial condition,
and results
of operations.
Unfavorable or
uncertain economic
and market
conditions 
have
been
and
could
cause
declines
in
economic
growth,
business
activity
or
investor
or
business
confidence
limitations
on
the 
availability or
increases in
the cost
of credit
and capital
increases in inflation
or interest rates
high unemployment
natural disasters 
epidemics and pandemics; or a combination of these or other factors. 
Additionally,
the
residential
mortgage
loan
origination
business
is
impacted
by
home
values
and
has
historically
been
cyclical, 
enjoying periods of strong growth and profitability followed by periods of
shrinking volumes and industry-wide losses. During periods 
of
rising
interest
rates,
the
refinancing
of
many
mortgage
products
tends
to
decrease
as
the
economic
incentives
for
borrowers
to 
refinance their existing mortgage loans are reduced.
Any sustained
period of
increased delinquencies,
foreclosures, or
losses could
adversely affect
our ability
to sell
loans, the
prices 
we receive
for loans,
the values
of mortgage
loans held
for sale,
or residual
interests in
securitizations, which
could adversely
affect 
our
financial
condition
and
results
of
operations.
In
addition,
any
additional
material
decline
in
real
estate
values
would
further 
weaken the loan-to-value
ratios and increase
the possibility of
loss if a
borrower defaults. In
such event, we
will be subject
to the risk 
of loss on such real estate arising from borrower defaults to the extent not covered
by third-party credit enhancements. 
We operate in a highly
competitive industry and market area.
We
face
substantial
competition
in
all
areas
of
our
operations
from
a
variety
of
different
competitors,
including
other
banks, 
insurance
companies,
mortgage
banking
companies,
small
loan
companies,
automobile
financing
companies,
leasing
companies, 
brokerage
firms
with
retail
operations,
credit
unions,
certain
retailers,
fintech
companies
and
digital
platforms.
The
Corporations 
ability
to
compete
effectively
depends
on
the
relative
performance
of
its
products,
the
degree
to
which
the
features
of
its
products 
22 
appeal
to
customers,
and
the
extent
to
which
the
Corporation
meets
clients
needs
and
expectations.
The
Corporations
ability
to 
compete also depends on its ability to attract and retain professional and other
personnel, and on its reputation. 
The
Corporation
encounters
intense competition
in attracting
and
retaining
deposits
and
in
its consumer
and
commercial
lending 
activities. The
Corporation
competes for
loans with
other financial
institutions.
The Corporations
ability to
originate loans
depends 
primarily on the rates and
fees charged and the
service it provides to its borrowers
in making prompt credit
decisions. There can be
no 
assurance that
in the
future the
Corporation will
be able
to increase
its deposit
base, originate
loans in
the manner
or on
the terms
on 
which it has done so in the past, or otherwise compete effectively.
The Corporations credit quality
and the value of the portfolio of Puerto Rico government securities have been,
and in the future 
may
be,
adversely
affected
by
Puerto
Ricos
economic
condition,
and
may
be
affected
by
actions
taken
by
the
Puerto
Rico 
government or the PROMESA oversight board to address the ongoing fiscal and
economic challenges in Puerto Rico. 
A
significant
portion
of
our
business
activities
and
credit
exposure
is
concentrated
in
Puerto
Rico,
which
has
faced
prolonged 
economic
and
fiscal
challenges.
Although
the
Puerto
Rico
Planning
Board
(PRPB)
reported
in
its
preliminary
estimates
that
real 
gross national product (GNP)
grew 0.4% in fiscal year
2025, marking the fifth consecutive
year of positive economic growth,
future 
economic prospects remain uncertain. However,
according to the PROMESA oversight board, the fiscal year 2026
budget prepares the 
Puerto Rico government for potential further declines in federal funding over
the fiscal year that began on July 1, 2025.
As of December 31,
2025,
the Corporation had $297.8
million of direct exposure
to the Puerto Rico government,
its municipalities 
and public corporations. As of December 31, 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 $42.2
million consisted of loans 
and obligations which
are supported by one
or more specific sources
of municipal revenues. 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, 
$32.9
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 PR
Housing
Finance
Authority
(PRHFA),
at
an
amortized
cost
of
$2.7 
million as part of its available-for-sale debt securities portfolio (fair value
of $1.6 million as of December 31, 2025). 
Also,
as
of
December
31,
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
Community Development
Block Grant-
Disaster Recovery (CDBG-DR) funding
amounted to $92.4 million. 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 
of
record.
In
addition,
as
of
December
31,
2025,
the
Corporation
had
$67.1
million
in
exposure
to
residential
mortgage
loans 
guaranteed by the PRHFA.
The Corporation operates in various jurisdictions highly dependent
on federal funding programs. On January 27, 2025, the Office
of 
Management
and
Budget
(OMB)
issued
Memorandum
M-25-13
entitled
Temporary
Pause
of
Agency
Grant,
Loan,
and
Other 
Financial Assistance
Programs. The
Memo directed
every federal
agency to
temporarily pause all
activities related
to obligation
or 
disbursement
of
all
federal
financial
assistance,
and
other
relevant
agency
activities
that
may
be
implicated
by
executive
orders, 
including, but not
limited to, financial
assistance for foreign
aid, nongovernmental organizations,
DEI, woke gender
ideology,
and the 
green
new
deal.
Lawsuits
challenging
the
pause
were
immediately
filed
and
on
January
28,
2025,
the
U.S.
District
Court
for
the 
District of
Columbia
enjoined
the
Trump
administration
from
implementing
OMB Memorandum
M-25-13
for
disbursements
under 
open
awards.
On
January
29,
2025,
OMB
rescinded
the
Memo,
however,
the
administration
has
continued
to
pursue
agency-by-
agency
reviews
of
federal
financial
assistance
programs
and
to
implement
targeted
funding
pauses,
terminations,
or
additional 
compliance requirements
consistent with
its policy
priorities, subject
to applicable
legal constraints. It
remains uncertain
whether the 
administration will
issue new
directives, executive
orders, or
guidance affecting
federal grants,
loans, or
other financial
assistance in 
the future,
or how
courts may
rule on
ongoing or
future challenges;
however,
any such
action by
the administration
or ruling
by the 
courts that limit such grants or financial assistance could have a negative
effect on our business.
Instability
in
economic
conditions,
delays
in
the
receipt
of
disaster
relief
funds
allocated
to
Puerto
Rico
or
any
temporary
or 
permanent
pause on
any federal
funds,
and the
potential impact
on asset
values resulting
from past
or future
natural disaster
events, 
when added
to Puerto
Ricos
ongoing fiscal
challenges, could
materially adversely
affect our
business, financial
condition, liquidity, 
results of operations and capital position. 
23 
A
deterioration
in
economic
conditions
in
the
U.S.
Virgin
Islands
and
British
Virgin
Islands
could
harm
our
results
of 
operations.
The Corporation has exposure to the USVI and BVI economies,
which remain susceptible to fiscal challenges, natural disasters,
and 
reliance on
federal disaster
relief and
recovery funding.
As of
December 31,
2025 and
2024, the
Corporation had
$138.7 million
and 
$100.4
million, respectively,
in loans
to USVI
public corporations,
all of
which were
performing as
of that
date. However,
ongoing 
fiscal and
economic
challenges in
the USVI
may
deteriorate
the overall
financial
and economic
conditions
in the
area, which
could 
negatively affect the Corporations
asset quality, credit performance
and overall financial condition. 
We are subject to ESG risks that
could adversely affect our reputation and the market price of our securities. 
Although
the
current
U.S.
presidential
administration
and
federal
regulatory
agencies
have,
in
recent
years,
reduced
or
paused 
certain
ESG-related
regulatory
initiatives,
including
the
SECs
decision
in
2025
to
withdraw
its
defense
of
federal
climate-related 
disclosures, stakeholder expectations regarding ESG matters
are not uniform. Both opponents and proponents of ESG-related
practices 
have increasingly
engaged in legislative,
regulatory,
litigation, and public
advocacy efforts
to advance
their respective pos
itions. As a 
result, the
ESG regulatory
and political
landscape has
become more
complex and
less predictable.
Failure to
adapt to or
comply with 
regulatory
requirements
or
investor
or
stakeholder
expectations
and
standards
could
negatively
impact
our
reputation,
ability
to
do 
business with certain partners, and our stock price.
For example, we
may be exposed to
negative publicity based
on the identity and
activities of those to
whom we lend or with
whom 
we
otherwise
do
business,
and
on
the
publics
view
of
the
ESG-related
approach
and
performance
of
our
customers
and
business 
partners.
Such negative
publicity
may
arise
from
adverse
coverage
in
traditional media
or
may
spread
rapidly through
social
media 
and other digital platforms.
If we were to become
the subject of such
negative publicity,
our relationships and reputation
with existing 
and prospective
customers and third
parties with which
we do business
could be damaged,
which could have
an adverse effect
on our 
ability to attract and retain
customers and employees and
could have a negative impact on
our business, financial condition
and results 
of operations.
In addition,
we may
face criticism
from
ESG detractors
regarding
the scope,
nature, or
perceived
impact of
our
ESG 
initiatives or policies,
or in response to
any revisions or enhancements
to these initiatives. We
could also be
subject to adverse
actions 
or responses by
governmental actors (such
as anti-ESG legislation
or retaliatory legislative
treatment) or consumers
(through boycotts 
or negative publicity campaigns) that could adversely affect our
reputation, results of operations and financial condition. 
Our results
of operations
could be
adversely affected
by natural
disasters,
public health
crises, political
crises, negative
global 
climate patterns or other catastrophic events.
Natural disasters,
whose nature
and severity
may be
impacted by
climate change,
such as
hurricanes,
floods, extreme
cold events 
and other
adverse weather
conditions; public
health crises;
political crises,
such as
terrorist
attacks, war,
labor unrest,
other political 
instability,
trade
policies,
tariffs
and
sanctions,
including
the
ongoing
conflict
in
Ukraine,
the
conflict
in
the
Middle
East,
recent 
conflicts in South America,
and the possible expansion
of such conflicts in surrounding
areas and potential geopolitical
consequences; 
negative
global
climate
patterns,
especially
in
water
stressed
regions;
or
other
catastrophic
events,
such
as
fires
or
other
disasters 
occurring at
our locations,
whether occurring
in Puerto
Rico, the
U.S., or
internationally,
could cause
a significant
adverse effect
on 
the economy and disrupt
our operations. Certain
areas in which our
business is concentrated,
including Puerto Rico
and the USVI, are 
particularly
susceptible
to
earthquakes,
hurricanes,
and
major
storms.
Further,
climate
change
may
increase
both
the
frequency
and 
severity of extreme
weather conditions and
natural disasters, which
may affect our
business operations, either
in a particular
region or 
globally,
as
well
as
the
activities
of
our
customers.
The
Corporation
is
also
not
able
to
predict
the
positive
or
negative
effects
that 
future events or
changes to
the U.S. or
global economy,
financial markets,
or regulatory and
business environment
could have
on our 
operations. 
Climate
change,
and
efforts
to
mitigate
its
long-term
effects,
may
materially
adversely
affect
the
Corporations
business
and 
results of operations. 
Concerns
regarding
the
long-term
effects
of
climate
change
have
led,
and
are
expected
to
continue
to
lead,
to
increased 
governmental
efforts
worldwide
aimed
at
mitigating
climate-related
risks.
In
addition,
consumers
and
businesses
may
voluntarily 
modify their
behavior, business
practices, and
investment decisions in
response to
these concerns. As
a result, the
Corporation and
its 
customers
may
be
required
to
adapt
to
new
laws
and
regulations,
and
shifts
in
consumer
and
business
preferences
associated
with 
climate
change.
These
developments
may
result
in
increased
costs,
asset value
reductions,
and
changes
to
operating
processes.
The 
impact on
our customers
will likely
vary depending
on their
specific attributes,
including reliance
on our
role in
fossil fuel
activities. 
The Corporation
may face
reductions in
creditworthiness on
the part
of some
customers or
in the
value of
assets securing
loans. The 
Corporations
efforts
to
take these
risks
into
account in
making
lending and
other decisions,
including
increasing
our business
with 
climate-responsible
companies,
may
not
be
effective
in
protecting
the
Corporation
from
the
negative
impact
of
new
laws
and 
regulations or changes in consumer or business behavior. 
24 
Deterioration in collateral values may result in additional losses.
Our business is affected by the value of the assets securing our loans or
underlying our investments.
We
had a
commercial and
construction loan
portfolio held
for investment
in the
amount of
$6.5 billion
as of
December 31,
2025. 
Due to
their nature,
these loans
entail a
higher credit
risk than
consumer and
residential mortgage
loans, since
they are larger
in size, 
concentrate
more
risk
in
a
single
borrower
and
are
generally
more
sensitive
to
economic
downturns.
Furthermore,
in
the
case
of
a 
slowdown
in the
real estate
market,
it may
be difficult
to dispose
of the
properties
securing
these loans
upon any
foreclosure
of the 
properties. We
may incur losses over the near term, either because of continued
deterioration in the quality of loans or because of sales 
of
problem
loans,
which
would
likely
accelerate
the
recognition
of
losses. Any
such
losses
could
adversely
impact
our
overall 
financial performance and results of operations. 
Deterioration
of
the
value
of
real
estate
collateral
securing
our
construction
and
commercial
loan
portfolios,
whether
located
in 
Puerto Rico
or elsewhere,
would result
in increased
credit losses.
Whether the
collateral that
underlies our
loans is
located in
Puerto 
Rico, the USVI,
the BVI, or the
U.S. mainland, the performance
of our loan portfolio
and the collateral value
backing the transactions 
are dependent upon the performance
of, and conditions within, each
specific real estate market. As
of December 31, 2025, $2.8
billion 
of our commercial and construction loan portfolio held for investment,
or 21% of the total loan portfolio held for investment, consisted 
of commercial mortgage and construction loans, of which $1.9 billion
was in the Puerto Rico region. 
We
measure credit
losses for
collateral dependent
loans based
on the
fair value
of the
collateral, which
is generally
obtained from 
appraisals, adjusted
for undiscounted
selling costs
as appropriate.
Updated appraisals
are obtained
when we
determine that
loans are 
collateral
dependent
and
are
updated
annually
thereafter.
In
addition,
appraisals
are
also
obtained
for
certain
residential
mortgage 
loans on a spot
basis based on specific
characteristics, such as delinquency
levels, and age of
the appraisal. The appraised
value of the 
collateral may decrease, or we may
not be able to recover collateral at
its appraised value. A significant decline
in collateral valuations 
for
collateral
dependent
loans
has
required
and,
in
the
future,
may
require,
increases
in
our
credit
loss
expense
on
loans. Any
such 
increase would have an adverse effect on our future financial condition
and results of operations. 
Labor shortages, challenges
in attracting and retaining
qualified personnel, and
constraints in the supply
chain could adversely 
affect our clients operations as well as our business and operations. 
Widespread labor
shortages across Puerto
Rico, the United
States, the Virgin
Islands, and other
markets have affected
many of
our 
commercial
clients, contributing
to operational
disruptions,
supply
chain
constraints,
reduced
cash flow,
and
potential difficulties
in 
meeting
loan
obligations.
These
labor
market
pressures
also
affect
the
Corporations
own
operations.
Competition
for
skilled
and 
experienced
personnel
remains
intense,
and
rising
wages,
driven
in
part
by
inflation
and
heightened
employee
expectations,
may 
increase our cost
structure and contribute
to higher turnover.
As a result, the
Corporation may face prolonged
vacancies, challenges in 
attracting and
retaining qualified
employees, and
potential impacts
on service
levels. If these
conditions persist,
they could
materially 
and adversely affect the Corporations
operations, competitive position, and overall financial results. 
The failure of other financial institutions could adversely affect
us. 
Our ability to engage in
routine financing transactions could
be adversely affected
by future failures of financial
institutions and the 
actions and
commercial soundness
of other
financial institutions.
Financial institutions
are interrelated as
a result of
trading, clearing, 
counterparty
and
other relationships.
We
have
exposure
to different
industries
and
counterparties
and
routinely
execute
transactions 
with counterparties
in the financial
services industry,
including brokers
and dealers,
commercial banks,
investment banks,
investment 
companies and other
institutional clients. In
certain of these transactions,
we are required to
post collateral to secure
the obligations to 
the
counterparties.
In the
event
of
a bankruptcy
or
insolvency
proceeding
involving
one of
such counterparties,
we
may
experience 
delays in recovering
the assets posted as
collateral, or we
may incur a
loss to the extent
that the counterparty
was holding collateral
in 
excess of the obligation to such counterparty or under other circumstances. 
In addition, many of these transactions
expose us to credit risk in
the event of a default by our
counterparty or client. The credit
risk 
may be exacerbated when
the collateral held by us cannot
be realized or is liquidated
at prices not sufficient
to recover the full amount 
of the loan
or derivative
exposure due to
us. Any losses
resulting from
our routine funding
transactions may
materially and adversely 
affect our financial condition and results of operations. 
RISKS RELATING TO
THE CORPORATIONS
BUSINESS 
Certain funding sources may not be available to us, and our funding sources may
prove insufficient and/or costly to replace.
FirstBank
relies
primarily
on
customer
deposits,
the
issuance
of
brokered
CDs,
and
advances
from
the
FHLB
of
New
York
to 
maintain its lending
activities and to replace
certain maturing liabilities.
As of December 31,
2025, we had $593.6
million in brokered 
CDs outstanding, representing approximately 4% of
our total deposits. Approximately $394.0 million, or 66%
in brokered CDs mature 
25 
over the twelve months
ending December 31, 2025, and
the average remaining term to
maturity of the brokered CDs outstanding
as of 
December 31, 2025
was approximately 1.0
year. None
of these brokered
CDs are callable at
the Corporations
option. In addition,
the 
Corporation had
$290.0 million
of long-term
FHLB advances
outstanding as
of December
31, 2025,
with an
average remaining
term 
to maturity of 1.36 years.
Although FirstBank has historically been
able to replace maturing deposits and
advances, we may not be able
to replace these funds 
in the future if our financial condition or general market
conditions change. If we are unable to maintain access to funding
sources, our 
results of operations and liquidity would be adversely affected. 
Alternate
sources
of
funding
may
carry
higher
costs
than
sources
currently
utilized.
If
we
are
required
to
rely
heavily
on
more 
expensive funding sources, profitability would be adversely affected.
We
may
determine
to
seek
debt
financing
in
the
future
to
achieve
our
long-term
business
objectives.
Additional
borrowings,
if 
sought, may not be available to us, or if available, may
not be on acceptable terms. The availability of additional
financing will depend 
on
a
variety
of
factors,
such
as
market
conditions,
the
general
availability
of
credit,
our
credit
ratings
and
our
credit
capacity.
In 
addition,
FirstBank may seek to sell loans as an additional source of liquidity.
If additional financing sources are unavailable or are not 
available on acceptable terms, our profitability and future prospects could
be adversely affected. 
Downgrades in our credit ratings could further increase the cost of borrowing
funds. 
The
Corporations
ability to
access new
non-deposit
sources of
funding
could be
adversely
affected
by downgrades
in our
credit 
ratings. The Corporations
liquidity is to a
certain extent contingent upon
its ability to obtain
external sources of funding
to finance its 
operations. The
Corporations
current credit
ratings and
any downgrades
in such
credit ratings
can hinder
the Corporations
access to 
new
forms
of
external
funding
and/or
cause
external
funding
to
be
more
expensive,
which
could
in
turn
adversely
affect
results
of 
operations. 
We depend on
cash dividends from FirstBank to meet our cash obligations. 
As a holding company,
dividends from FirstBank, our banking subsidiary,
have provided a substantial portion of our cash flow used 
to
service
the
interest
payments
on
our
obligations.
FirstBank
is
limited
by
law
in
its
ability
to
make
dividend
payments
and
other 
distributions to us
based on its
earnings and capital
position. A failure
by FirstBank to
generate sufficient
cash flow to
make dividend 
payments to us may have a negative impact on our results of operations and financial
condition.
Our level of non-performing assets may adversely affect our future results of
operations.
Although non-performing
assets decreased by
$4.2 million to $114.1
million as of December
31, 2025, or 4%,
from $118.3
million 
as of
December
31,
2024,
we continue
to
have
a
relevant
amount
of
nonaccrual
loans.
If
we
are
unable
to
effectively
maintain
the 
quality of our loan portfolio, our financial condition and results of operations
may be materially and adversely affected. 
Our
ACL
may
not
be
adequate
to
cover
actual
losses,
and
we
may
be
required
to
materially
increase
our
ACL,
which
may 
adversely affect our capital ratios, financial condition and results of
operations.
We are subject, among
other things, to the risk of loss from loan defaults and
foreclosures with respect to the loans we originate and 
purchase.
We
recognize
periodic credit
loss expenses
on loans,
which
lead to
reductions in
our
income from
operations,
in order
to 
maintain
our ACL
on loans
at a
level that
our management
deems to
be appropriate
based upon
an assessment
of the
quality
of the 
loan and lease portfolios.
Management may fail to
accurately estimate the level of
credit losses or may
have to increase our
credit loss 
expense
on
loans in
the
future as
a
result
of
new
information
regarding
existing
loans,
future
increases
in
nonaccrual
loans
beyond 
what
was
forecasted,
foreclosure
actions
and
loan
modifications,
changes
in
current
and
expected
economic
and
other
conditions 
affecting
borrowers
or
for
other
reasons
beyond
our
control.
In
addition,
the
bank
regulatory
agencies
periodically
review
the 
adequacy
of
our
ACL
on
loans
and
may
require
an
increase
in
the
credit
loss
expense
on
loans
or
the
recognition
of
additional 
classified loans and loan charge-offs, based on
judgments that differ from those of management.
The level
of the
ACL reflects
managements
estimates based
upon various
assumptions and
judgments as
to specific
credit risks; 
evaluation of
industry concentrations;
loan loss
experience; current
loan portfolio
quality; present
economic, political
and
regulatory 
conditions;
unidentified
losses inherent
in the
current
loan portfolio
and reasonable
and supportable
forecasts. The
determination
of 
the
appropriate
level
of
the
ACL
on
loans
inherently
involves
a
high
degree
of
subjectivity
and
requires
management
to
make 
significant estimates and judgments
regarding current credit risks
and future trends, all
of which may undergo
material changes. If our 
estimates
prove
to
be
incorrect,
our
ACL
on
loans
may
not
be
sufficient
to
cover
losses
in
our
loan
portfolio
and
our
credit
loss 
expense on loans could increase substantially.
26 
In addition, any increases in our credit loss expense on
loans or any loan losses in excess of our ACL on loans could have a material 
adverse effect on our future capital ratios, financial condition
and results of operations.
Defective and repurchased loans may harm our business and financial condition.
In
connection
with
the
sale
and
securitization
of
loans,
we
are
required
to
make
a
variety
of
customary
representations
and 
warranties relating
to the
loans sold
or securitized.
Our obligations
with respect
to these
representations and
warranties are
generally 
outstanding
for
the
life
of
the
loan,
and
relate
to,
among
other
things,
the
following:
(i)
compliance
with
laws
and
regulations;
(ii) 
underwriting
standards;
(iii)
the
accuracy
of
information
in
the
loan
documents
and
loan
files;
and
(iv)
the
characteristics
and 
enforceability of the loan. 
A loan that
does not comply
with the representations
and warranties made
may take longer
to sell, may impact
our ability to obtain 
third-party
financing
for
the
loan,
and
may
not
be
saleable
or
may
be
saleable
only
at
a
significant
discount.
If
such a
loan
is
sold 
before
we
detect
non-compliance,
we
may
be
obligated
to repurchase
the
loan
and
bear
any
associated
loss directly,
or
we
may
be 
obligated
to
indemnify
the purchaser
against
any
loss,
either
of
which
could
reduce
our cash
available
for
operations
and
liquidity. 
Management
believes
that
it has
established
controls
to
ensure
that
loans
are
originated
in
accordance
with
the
secondary
markets 
requirements, but certain employees may make mistakes or may deliberately
violate our lending policies. 
Our controls and procedures
may fail or be circumvented,
our risk management policies and
procedures may be inadequate
and 
operational risks could adversely affect our consolidated
results of operations.
We
may fail to
identify and manage
risks related to a
variety of aspects
of our business, including,
but not limited
to, liquidity risk; 
interest rate
risk; market
risk; credit
risk; operational
risk; legal,
regulatory and
compliance risk;
reputational risk;
model risk;
capital 
risk;
strategic
risk;
and
information
technology
and cybersecurity
risk.
We
have
adopted
and
periodically
improve
various
controls, 
procedures,
policies and
systems to
monitor
and
manage risk.
Any improvements
to our
controls,
procedures,
policies
and
systems, 
however,
may not
be adequate
to identify
and manage
the risks in
our various
businesses. If
our risk
framework is
ineffective,
either 
because it fails to
keep pace with changes
in the financial markets
or our businesses or
for other reasons,
we could incur losses,
suffer 
reputational damage, or find ourselves out of compliance with applicable
regulatory mandates or expectations.
We may also be
subject to disruptions from external events, such as natural disasters and
cyber-attacks, which could cause delays or 
disruptions
to
operational
functions,
including
information
processing
and
financial
market
settlement
functions.
In
addition,
our 
customers,
vendors
and
counterparties
could
suffer
from
such
events.
Should
these
events
affect
us,
or
the
customers,
vendors
or 
counterparties with
which we
conduct business,
our consolidated
results of
operations could
be negatively
affected.
When we
record 
balance
sheet
reserves
for
probable
loss
contingencies
related
to
operational
losses,
we
may
be
unable
to
accurately
estimate
our 
potential
exposure,
and
any
reserves
we
establish
to
cover
operational
losses
may
not
be
sufficient
to
cover
our
actual
financial 
exposure, which
may have
a material
impact on
our consolidated
results of
operations or
financial condition
for the
periods in
which 
we recognize the losses. 
Our businesses may be adversely affected by litigation. 
We
have, in
the past,
been party
to claims
and legal
actions by
our customers,
or subject
to regulatory
supervisory actions
by the 
government on
behalf of
customers, relating
to our
performance of
fiduciary or
contractual responsibilities.
In the
past, we
have also 
been
subject
to
securities
class
action
litigation
by
our
shareholders
and
we
have
also
faced
employment
lawsuits
and
other
legal 
claims. In
any future
claims or
actions, demands
for substantial
monetary damages
may be
asserted against
us, resulting
in financial 
liability
or
an
adverse
effect
on
our
reputation
among
investors
or
on
customer
demand
for
our
products
and
services.
A
securities 
class
action
suit
against
us
in
the
future
could
result
in
substantial
costs,
potential
liabilities
and
the
diversion
of
managements 
attention
and
resources.
We
may
be
unable
to
accurately
estimate
our
exposure
to
litigation
risk
when
we
record
balance
sheet 
reserves for probable loss contingencies.
As a result, reserves we establish to
cover any settlements or judgments may
not be sufficient 
to
cover
our
actual
financial
exposure,
which
has
occurred
in
the
past
and
may
occur
in
the
future,
resulting
in
a
material
adverse 
impact on our consolidated results of operations or financial condition.
In
the
ordinary
course
of
our
business,
we
are
also
subject
to
various
regulatory,
governmental
and
law
enforcement
inquiries, 
investigations and
subpoenas. These
may be
directed generally
to participants
in the
businesses in
which we
are involved
or may
be 
specifically directed
at us. In
regulatory enforcement
matters, claims for
disgorgement, the
imposition of penalties
and the imposition 
of other remedial sanctions are possible.
The resolution
of legal
actions or
regulatory matters,
when unfavorable,
has had,
and could
in the
future have,
a material
adverse 
effect on our consolidated results of operations for
the quarter in which such actions or matters are resolved or a reserve is established. 
27 
Our businesses may be negatively affected by adverse publicity or
other reputational harm. 
Our relationships
with many of
our customers
are predicated upon
our reputation
as a fiduciary
and a service
provider that adheres 
to
the
highest
standards
of
ethics,
service
quality
and
regulatory
compliance.
Adverse
publicity,
regulatory
actions,
litigation, 
operational failures, the failure to meet customer expectations and other
issues with respect to one or more of our businesses, including 
FirstBank as our banking
subsidiary, could
materially and adversely affect
our reputation, or our ability
to attract and retain customers 
or obtain
sources of
funding for
the same
or other
businesses. Preserving
and enhancing
our reputation
also depends
on maintaining 
systems and procedures that
address known risks and regulatory
requirements, as well as our
ability to identify and mitigate
additional 
risks
that
arise
due
to
changes
in
our
businesses,
the
market
places
in
which
we
operate,
the
regulatory
environment
and
customer 
expectations.
If we
fail to
promptly address
matters that
bear on
our reputation,
our reputation
may be
materially adversely
affected 
and our business may suffer.
Any impairment of our goodwill or other intangible assets may adversely affect
our operating results. 
We
review
goodwill
for
impairment
annually
and
assess
other
intangible
assets
whenever
events
or
changes
in
circumstances 
indicate that their
carrying amount may
not be recoverable. If
goodwill or other
intangibles are determined
to be impaired, we
may be 
required
to record
a charge
to earnings.
Impairment risk
factors include
deterioration
in financial
performance
of the
reporting unit, 
declining
market valuation
of the
Corporation or
comparable institutions,
and adverse
economic conditions
impacting expected
cash 
flows. During
the fourth
quarter of
2025, a
qualitative goodwill
impairment analysis
determined that
it was more
-likely-than-not that 
the fair value of our reporting units exceeded their carrying value; therefore,
no goodwill impairment was recorded. 
As
of
December
31,
2025,
our
goodwill
book
value
was
$38.6
million,
all
recorded
at
FirstBank.
Future
goodwill
impairments 
could
reduce
earnings
and
affect
FirstBanks
ability
to
pay
dividends
to
the
Corporation,
subject
to
regulatory
approval.
While
a 
goodwill impairment would not impact our tangible book value or regulatory
capital, it could reduce reported earnings. 
Recognition of deferred tax assets is dependent upon the generation of future taxable
income by the Bank.
As of
December
31,
2025,
the Corporation
had
a net
deferred
tax asset
of
$149.0
million
(net of
a
valuation
allowance
of $75.0 
million,
of
which
$72.2
million
was
related
to
FirstBank).
Under
the
PR
Tax
Code,
the Corporation
and
its
subsidiaries,
including 
FirstBank, are treated
as separate taxable
entities and are
not entitled to file
consolidated tax returns.
Accordingly,
in order to
obtain a 
tax
benefit
from
a
NOL,
a
particular
subsidiary
must
be
able
to
demonstrate
sufficient
taxable
income
within
the
applicable
NOL 
carry-forward
period.
Pursuant to
the
PR
Tax
Code,
the
carry-forward
period
for
NOLs
incurred
during
taxable
years commencing 
after December
31, 2012
is 10
years. The
Corporation assesses
deferred
tax assets
to determine
the amount
that is
more-likely-than-
not
to
be
realized.
Valuation
allowances
are
established,
when
necessary,
to
reduce
deferred
tax
assets
to
such
amount.
Due
to 
significant
estimates
utilized
in determining
the valuation
allowance
and
the potential
for changes
in facts
and circumstances
in
the 
future, the
Corporation may
not be able
to reverse
the remaining
valuation allowance
or may
need to increase
its current
deferred tax 
asset valuation allowance. 
The
Corporations
judgments
regarding
tax
accounting
policies
and
the
resolution
of
potential
tax
disputes
may
impact
the 
Corporations
earnings and
cash flow,
and changes
in the
tax laws
of multiple
jurisdictions can
materially affect
our operations, 
tax obligations, and effective tax rate.
Significant
judgment
is
required
in
determining
the
Corporations
effective
tax
rate
and
in
evaluating
its
tax
positions.
The 
Corporation
provides
for
uncertain
tax
positions
when
such
tax
positions
do
not
meet
the
recognition
thresholds
or
measurement 
criteria prescribed by applicable generally accepted accounting principles
in the United States (GAAP).
Fluctuations in federal,
state, local, and foreign
taxes or a change
to uncertain tax positions,
including related interest
and penalties, 
may impact
the Corporations
effective tax
rate. When particular
tax matters arise,
a number
of years may
elapse before such
matters 
are audited
and finally
resolved. In
addition,
the Puerto
Rico Department
of Treasury
(PRTD),
the U.S.
Internal
Revenue Service 
(IRS),
and
the
tax
authorities
in
the
jurisdictions
in
which
we
operate
may
challenge
our
tax
positions
and
we
may
estimate
and 
provide
for
potential liabilities
that may
arise out
of tax
audits to
the extent
that uncertain
tax positions
fail to
meet the
recognition 
standard under
applicable GAAP.
Unfavorable resolution
of any
tax matter
could increase
the effective
tax rate
and could
result in
a 
material increase in our tax expense. Resolution of a tax issue may require
the use of cash in the year of resolution. 
First BanCorp. is subject
to Puerto Rico income
tax on its income
from all sources. 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.
The USVI
jurisdiction 
imposes
income
taxes
based
on
the
U.S.
Internal
Revenue
Code
under
the
mirror
system
established
by
the
Naval
Service 
Appropriations Act of 1922. However,
the USVI jurisdiction also imposes an additional 10% surtax on the USVI tax liability,
if any. 
28 
These
tax
laws
are
complex
and
subject
to
different
interpretations.
We
must
make
judgments
and
interpretations
about
the 
application
of
these
inherently
complex
tax
laws
when
determining
our
provision
for
income
taxes,
our
deferred
tax
assets
and 
liabilities, and
our valuation
allowance. In
addition, legislative
changes, particularly
changes in
tax laws,
could adversely
impact our 
results of operations. 
Changes in applicable
tax laws in
Puerto Rico, the
U.S., or other
jurisdictions or tax
authorities new interpretations
could result
in 
increases in our overall taxes and the Corporations
financial condition or results of operations may be adversely impacted. 
Our ability to use our NOL carryforwards may be limited.
The Corporation
has U.S.
and USVI
sourced NOL
carryforwards. Section
382 of
the U.S.
Internal Revenue
Code (Section
382) 
limits the
ability to
utilize U.S.
and USVI
NOLs for income
tax purposes,
respectively,
at such
jurisdictions following
an event
of an 
ownership
change. Generally,
an ownership
change occurs
when
certain shareholders
increase their
aggregate ownership
by more 
than 50
percentage points
over their
lowest ownership
percentage over
a three-year
testing period.
Upon the
occurrence of
a Section 
382 ownership
change, the
use of
NOLs attributable
to the
period prior
to the
ownership change
is subject
to limitations
and
only a 
portion
of
the
U.S.
and
USVI
NOLs,
as
applicable,
may
be
used
by
the
Corporation
to
offset
the
annual
U.S.
and
USVI
taxable 
income, if any.
In 2017, the Corporation
completed a formal ownership
change analysis within the
meaning of Section 382
covering a 
comprehensive period,
and concluded
that an
ownership change,
for U.S.
and USVI
purposes only,
had occurred
during such
period. 
The Section 382
limitation has resulted
in higher U.S.
and USVI income
tax liabilities than
we would have
incurred in the
absence of 
such limitation.
It is possible that
the utilization of our
U.S. and USVI NOLs
could be further limited
due to future changes
in our stock ownership, 
as
a
result
of
either
sales
of
our
outstanding
shares
or
issuances
of
new
shares
that
could
separately
or
cumulatively
trigger
an 
ownership
change
and,
consequently,
a
Section
382
limitation.
Any
further
Section
382
limitations
may
result
in
greater
U.S.
and 
USVI tax
liabilities
than
we would
incur
in the
absence
of such
a limitation
and
any
increased liabilities
could
adversely affect
our 
earnings and cash
flow.
We
may be able to
mitigate the adverse
effects associated with
a Section 382
limitation in the U.S.
and USVI 
to the extent that we could credit any resulting
additional U.S. and USVI tax liability against our tax liability
in Puerto Rico. However, 
our
ability
to
reduce
our
Puerto
Rico
tax
liability
through
such
a
credit
or
deduction
will
depend
on
our
tax
profile
at
each
annual 
taxable period, which is dependent on various factors. 
The
utilization
of
our
NOL
carryforwards
is
subject
to
significant
judgment
and
depends
on
future
taxable
income
and
the 
continued
applicability
of
current
tax
laws.
Although
we
reversed
a
portion
of
our
valuation
allowance
in
2025
following
the 
enactment of
Act 65-2025,
future changes
in tax
laws or
sustained losses
at the
holding company
or pass-through
entity level,
could 
limit
our
ability
to
utilize
these
NOLs,
require
the
reestablishment
of
a
valuation
allowance,
or
result
in
the
expiration
of
unused 
NOLs. 
RISKS RELATING TO
CYBERSECURITY AND TECHNOLOGY
Cyber-attacks,
system
risks
and
data
security
breaches
to
our
computer
systems
and
networks
or
those
of
third-party
service 
providers could adversely
affect our
ability to conduct
business, manage our
exposure to risk
or expand our
business, result in
the 
disclosure
or
misuse
of
confidential
or
proprietary
information,
increase
our
costs
to
maintain
and
update
our
operational
and 
security systems and infrastructure, and present significant reputational, legal
and regulatory costs. 
Our
business
is
highly
dependent
on
the
security,
reliability,
and
effectiveness
of
our
technology
infrastructure
and
data 
management
systems,
as
well
as
those
of
our
customers,
vendors,
and
other
third
parties.
Employees,
customers,
and
other
third 
parties
increasingly
access
our
systems
and
services
through
personal
or
external
devices
and
networks
that
are
outside
our
direct 
control
and
subject
to
their
own
cybersecurity
risks.
Our
business
relies
on
effective
access
controls
and
the
secure
collection, 
processing,
transmission,
storage
and
retrieval
of
confidential,
proprietary,
personal
and
other
information
across
our
systems
and 
those of third parties.
Cybersecurity
risks
facing
financial
institutions
have
increased
significantly
due
to
the
growing
sophistication
and
frequency
of 
cyber
threats,
as
well
as
our
continued
expansion
of
digital
and
online
services.
These
risks
may
arise
from
deliberate
attacks, 
misconduct, human
error, or
system failures.
Cyber incidents,
such as
malware infections,
phishing attacks,
denial-of-service attacks, 
ransomware, or other
security breaches, could
result in unauthorized
access to or
loss, misuse, or
destruction of sensitive
information, 
damages to systems, disruption of operations, or impairment of customer access
to our services.
While
we
maintain
a
CISP
that
continuously
monitors
cyber-related
risks
and
ultimately
ensures
protection
for
the
processing, 
transmission,
and
storage
of
confidential,
proprietary,
and
other
information
in
our
computer
systems
and
networks,
as
well
as
a 
Vendor
Management
Program
to
oversee
third
party
and
vendor
risks,
there
is
no
guarantee
that
we
will
not
be
exposed
to
or
be 
affected by a cybersecurity incident. 
29 
Cyber threats are rapidly
changing, and future attacks or
breaches could lead to
other security breaches of
the networks, systems, or 
devices that
our customers
use to
access our
integrated products
and services,
which, in
turn, could
result in
unauthorized disclosure, 
release, gathering,
monitoring, misuse,
loss or
destruction of
confidential, proprietary,
and other
information (including
account data 
information) or
data security
compromises. As
cyber threats
continue to
evolve, we
may be
required to
expend significant
additional 
resources
to
modify
or
enhance
our
protective
measures,
investigate,
and
remediate
any
information
security
vulnerabilities
or 
incidents
and
develop
our
capabilities
to
respond
and
recover.
The
scope
and
impact
of
a
particular
cyberattack
may
not
be 
immediately
clear,
which
could
delay
remediation
efforts
and
limit
our
ability
to
provide
complete
and
accurate
information
to 
customers, third-party vendors, regulators, and the public. 
A successful penetration or circumvention of our system security,
or the systems of our customers, suppliers, and other third parties, 
could cause us serious
negative consequences, including significant
operational, reputational, legal, and
regulatory costs and concerns. 
Any of these adverse consequences could adversely impact
our results of operations, liquidity,
and financial condition. In addition, our 
insurance policies may be insufficient to cover all losses associated
with a significant cybersecurity incident, may become more
costly, 
or may
be unavailable
on economically
reasonable terms
in the future
or at all
Any of
these results could
harm our
growth prospects, 
financial condition, business, and reputation. 
Our
operational
or
security
systems
or
infrastructure,
or
those
of
third
parties,
could
fail
or
be
breached.
Any
such
future 
incidents could
potentially disrupt
our business
and adversely
impact our
results of
operations, liquidity,
and financial
condition, 
as well as cause legal or reputational harm.
Operational
risk is
inherent
in our
business and
extends
beyond
our internal
operations due
to our
reliance
on third-party
service 
providers.
Our
performance
depends
on
the
effectiveness,
reliability,
and
security
of
our
operational
and
technology
infrastructure, 
including
computer
systems,
data
management,
transaction
processing,
information
security,
online
and
mobile
banking
platforms, 
and
network connectivity,
as well
as those
of third
parties that
support
critical business
functions.
Failures or
disruptions
caused
by 
human error,
misconduct, system
defects, cyber
incidents, or third-party
performance issues could
expose us to
operational, financial, 
and reputational risk. 
Our ability
to implement safeguards,
controls, and backup
systems with respect
to third-party
systems is more
limited than for
our 
own.
Our systems
or those
of our
service providers
may
be damaged,
disrupted,
or rendered
unavailable
as a
result
of a
number
of 
factors, including
events that
are wholly
or partially
beyond our
control. In
certain circumstances,
we may
need to
take our
systems 
offline.
While backup
systems are
utilized, they
may not
operate at
the same
speed or
capacity as
primary systems
and temporary
or 
permanent loss of data could occur.
We
frequently
update our
systems to
support our
business needs,
growth, and
regulatory compliance,
and to
respond to
evolving 
cybersecurity
threats. These
efforts
may
involve
significant
costs and
risks
associated
with
system
implementation,
and
integration, 
and
may
result
in
potential
business
interruptions.
Operational
failures
or
significant
disruptions
could
adversely
impact
our 
operations,
liquidity,
and
financial
condition,
as
well
as
cause
reputational
harm.
In
addition,
our
insurance
coverage
may
be 
insufficient to fully cover losses resulting from a major interruption. 
We
must respond
to
rapid
technological
changes,
and these
changes
may
be
more difficult
or
expensive
than
anticipated.
We 
may also be negatively
affected if we fail
to identify and address
operational risks associated
with the introduction of
or changes to 
products and services, or if we fail to respond to emerging technologies that seek to
displace traditional financial services. 
Like
most
financial
institutions,
FirstBank
significantly
depends
on
technology
to
deliver
its
products
and
other
services
and
to 
otherwise conduct
business. To
remain technologically
competitive and
operationally efficient,
FirstBank invests
in system
upgrades, 
new technological
solutions, and
other technological
initiatives. Competitors
may introduce
new products,
services, or
platforms that 
leverage emerging technologies or
new industry standards. If we are
unable to timely adopt, develop, or
integrate new technologies, or 
if our existing systems and
offerings become obsolete, we
may lose current and future customers,
which could have a material adverse 
effect on our business, financial condition
and results of operations. The financial services industry
is changing rapidly and, in order to 
remain
competitive,
we
must
continue
to
enhance
and
improve
the
functionality
and
features
of
our
products,
services
and 
technologies. These changes may be more difficult or expensive
to implement than we anticipate. 
We
may
not
be
able
to
effectively
implement
new
technology-driven
products
and
services
or
be
successful
in
marketing
these 
products and
services to our
customers. Failure to
effectively respond
to technological change
in the financial
services industry
could 
have a material adverse effect on our business, financial condition,
and results of operations. 
Advances
in
artificial
intelligence,
digital
platforms,
and
automated
advisory
tools
are
enabling
non-bank
competitors
to
offer 
services traditionally provided by banks, including personal financial
guidance, payments, and wealth management, often at lower cost 
and
with
greater
speed
or
convenience.
Similarly,
distributed
ledger
and
blockchain-based
technologies
may
enhance
transaction 
efficiency
and
security,
but
over
time
could
reduce
the
role
of
banks
as
secure
deposit-keepers
and
intermediaries.
The
continued 
adoption of these and other emerging technologies could materially
and adversely affect our business and results of operations. 
30 
The Corporation is subject
to stringent and changing
privacy laws, regulations,
and standards as well
as policies, contracts, and 
other
obligations
related
to
data
privacy
and
security.
Our
failure
to
comply
with
privacy
laws and
regulations,
as
well as
other 
legal obligations, could have a material adverse effect on our business.
State,
federal,
and
foreign
governments
are
increasingly
enacting
laws
and
regulations
governing
the
collection,
use,
retention, 
sharing, transfer,
and security
of personally
identifiable information
and data.
A variety
of federal,
state, local,
and foreign
laws and 
regulations,
orders,
rules,
codes,
regulatory
guidance,
and
certain
industry
standards
regarding
privacy,
data
protection,
consumer 
protection,
information
security,
and
the
processing
of
personal
information
and
other
data
apply
to
our
business.
State
laws
are 
changing
rapidly,
and
new
legislation
proposed
or
enacted
in
a
number
of
other
states
imposes,
or
has
the
potential
to
impose, 
additional obligations
on companies
that process
confidential, sensitive
and personal
information, and
will continue
to shape
the data 
privacy
environment
nationally.
The U.S.
federal
government
is also
focused
on privacy
matters. Any
failure
by us
or our
business 
partners
to
comply
with
applicable
laws,
rules,
and
regulations
could
result
in
investigations
or
actions
against
us
by
governmental 
entities,
private
claims
and
litigation,
fines,
penalties
or
other
liabilities.
Such
outcomes
could
increase
our
expenses,
expose
us
to 
liabilities, and harm
our reputation,
and have
a material adverse
effect on
our business. While
we aim to
comply with
applicable data 
protection
laws
and
obligations
in
all
material
respects,
there
is
no
assurance
that
we
will
not
be
subject
to
claims
that
we
have 
violated such
laws and
obligations, will
be able
to successfully
defend against
such claims,
or will
not be
subject to
significant fines 
and
penalties
in
the
event
of
non-compliance.
Additionally,
to
the
extent
multiple
state-level
laws
are
introduced
in
the
U.S.
with 
inconsistent or
conflicting
standards and
there is
no federal
law to
preempt such
laws, compliance
with such
laws could
be difficult 
and costly, or impossible, to
achieve, and we could be subject to fines and penalties in the event of non
-compliance. 
In
addition,
the
U.S.
regulatory
environment
for
financial
services
remains
subject
to
change.
Legislative,
regulatory,
or 
administrative actions may result
in amendments to existing
banking and consumer protection
laws, modifications to prior
rulemaking 
or
guidance,
or
changes
to
the
structure,
authority,
or
enforcement
priorities
of
federal
regulatory
agencies.
The
scope,
timing,
and 
impact of any such changes are uncertain. 
RISK RELATING
TO THE REGULATION
OF OUR INDUSTRY
We are subject to certain regulatory
restrictions that may adversely affect our operations. 
We
are subject
to supervision
and regulation
by the
Federal Reserve
Board and
the FDIC.
We
are a
bank holding
company and
a 
financial holding
company under
the Bank
Holding Company
Act of
1956, as
amended. The
Bank is
also subject
to supervision
and 
regulation by OCIF. 
Under
federal
law,
financial
holding
companies
are
permitted
to
engage
in
a
broader
range
of
financial
activities
than
those 
permitted
to
bank
holding
companies
that
are
not
financial
holding
companies.
A
financial
holding
company
that
ceases
to
meet 
certain
standards
is
subject
to
a
variety
of
restrictions,
depending
on
the
circumstances,
including
the
prohibition
from
undertaking 
new activities
or acquiring
shares or
control of
other companies.
If we
fail to
comply with
the requirements
from our
regulators,
we 
may
become
subject
to
regulatory
enforcement
action
and
other
adverse
regulatory
actions
that
might
have
a
material
and
adverse 
effect on our operations.
The FDIC
insures deposits
at FDIC-insured
depository
institutions up
to certain
limits (currently,
$250,000 per
depositor at
same 
depository institution). The
FDIC charges insured depository
institutions premiums to maintain
the DIF.
In the event of a bank
failure, 
the FDIC
takes control
of a
failed bank
and, if
necessary,
pays all
insured deposits
up to
the statutory
deposit insurance
limits using 
the resources of
the DIF.
The FDIC is required
by law to
maintain adequate funding
of the DIF,
and the FDIC
may increase premium 
assessments
to
maintain
such
funding.
The
Dodd-Frank
Wall
Street
Reform
and
Consumer
Protection
Act
(the
Dodd-Frank
Act) 
requires
the
FDIC
to
increase
the
DIFs
reserves
against
future
losses,
which
will
require
institutions
with
assets
greater
than
$10 
billion, such as FirstBank, to bear an increased responsibility for funding
the prescribed reserve to support the DIF.
The FDIC
may further
increase FirstBanks
premiums or
impose additional
assessments or
prepayment requirements
in the
future. 
The Dodd-Frank Act removed the statutory cap for the reserve ratio, leaving
the FDIC free to set this cap going forward.
Our
compensation
practices
are
subject
to
oversight
by
the
Federal
Reserve
Board
and
the
FDIC.
Any
deficiencies
in
our 
compensation
practices
may
be
incorporated
into
our
supervisory
ratings,
which
can
affect
our
ability
to
make
acquisitions
or 
perform other actions.
Our compensation
practices are
subject to
oversight
by the
Federal
Reserve
Board
and
the FDIC.
As discussed
in Part
I, Item
1, 
Business of this
Form 10-K,
the Corporation
is currently subject
to the interagency
guidance governing
the incentive compensation 
activities of regulated
banks and bank
holding companies,
and other financial
regulators have also
implemented regulations
regarding 
compensation
practices.
Our
failure
to
satisfy
these
restrictions
and
guidelines
could
expose
us
to
adverse
regulatory
criticism, 
lowered supervisory ratings, and restrictions on our operations and acquisition activities.
31 
We
are
subject
to
regulatory
capital
adequacy
guidelines,
and,
if
we
fail
to
meet
these
guidelines,
our
business
and
financial 
condition will be adversely affected.
We
are
subject
to
stringent
regulatory
capital requirements.
Although
the
Corporation
and FirstBank
met
well-capitalized
capital 
ratios as
of December
31, 2025,
and we
expect both
companies will
continue to
exceed the
minimum risk-based
and leverage
capital 
ratio requirements for
well-capitalized status under
the current capital rules,
we cannot assure that
we will remain at such
levels. If we 
fail
to
meet
these
minimum
capital
guidelines
and
other
regulatory
requirements,
our
business
and
financial
condition
will
be 
materially and
adversely affected.
If we fail
to maintain certain
capital levels or
are deemed not
well managed under
regulatory exam 
procedures, or if we
experience certain regulatory violations,
our status as a financial
holding company,
and our ability to offer
certain 
financial products will be compromised and our financial condition
and results of operations could be adversely affected.
Monetary
policies
and
regulations
of
the
Federal
Reserve
Board
could
adversely
affect
our
business,
financial
condition
and 
results of operations. 
In
addition
to
general
economic
conditions,
our
earnings
and
growth
are
significantly
influenced
by
the
monetary
policies
and 
regulatory actions of
the Federal Reserve
Board. An important
function of the
Federal Reserve Board
is to regulate
the money supply 
and
credit
conditions.
The
Federal
Reserve
Board
implements
policy
through
various
tools,
including
open
market
operations, 
adjustments to the federal funds
and discount rates, and changes
in reserve requirements for bank
deposits. These instruments are
used 
in
varying
combinations
to
influence
overall
economic
growth
and
the
distribution
of
credit,
bank
loans,
investments
and
deposits. 
Their use also affects interest rates charged on
loans or paid on deposits.
Changes
in
monetary
policies
and
regulatory
actions
of
the
Federal
Reserve
Board
have
had,
and
may
continue
to
have,
a 
significant
impact
on the
operating results
of commercial
banks.
The effects
of such
policies upon
our
business, financial
condition 
and results of operations have been adverse in the past and may be adverse in
the future.
We
are subject
to numerous
laws designed
to protect
consumers, including
the Community
Reinvestment Act
and fair
lending 
laws, and failure to comply with these laws could lead to a wide variety of sanctions.
The
Community
Reinvestment
Act,
the
Equal
Credit
Opportunity
Act,
the
Fair
Housing
Act,
and
other
fair
lending
laws
and 
regulations impose
nondiscriminatory lending
requirements on financial
institutions. These laws
are enforced
by the U.S.
Department 
of Justice and
other federal agencies
A successful regulatory
challenge related to
our compliance with
these requirements could
result 
in
a
wide
variety
of
sanctions,
including
damages
and
civil
money
penalties,
injunctive
relief,
and
restrictions
on
mergers
and 
acquisitions,
expansion,
or
entry
into
new
business
lines.
Private
parties
may
also
have
the
ability
to
challenge
an
institutions 
performance
under
fair
lending
laws
in
private
class
action
litigation.
Such
actions
could
have
a
material
adverse
effect
on
our 
business, financial condition, and results of operations. 
We
face
a
risk
of
noncompliance
and
enforcement
action
related
to
the
Bank
Secrecy
Act
and
other
anti-money
laundering 
statutes and regulations. 
The Bank
Secrecy Act,
the USA PATRIOT
Act, and
related regulations
require us
to maintain
an effective
anti-money laundering 
program
and
file
suspicious
activity
and
currency
transaction
reports
as
appropriate,
among
other
duties.
Enforcement
agencies, 
including
the
Financial
Crimes
Enforcement
Network,
federal
banking
regulators,
and
the
U.S.
Department
of
Justice,
have 
significantly increased coordination and enforcement activity
in this area. We are
also subject to increased scrutiny of compliance with 
economic and trade
sanctions administered by
OFAC. If
our AML, sanctions, or
related compliance programs
are deemed inadequate, 
we could be
subject to liability,
including fines
and regulatory
actions, which
may include restrictions
on our
ability to pay
dividends 
and the
necessity to
obtain regulatory
approvals to
proceed with
certain aspects
of our
business plan,
including our
acquisition plans. 
Any such outcome could materially and adversely affect our business,
financial condition, and results of operations. 
32 
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
Cybersecurity Risk Management and Strategy 
The Corporation recognizes
the significance of cybersecurity
in the financial
industry and the potential
risks associated, such
as the 
risks arising from
the loss of confidentiality,
integrity,
or availability of
information systems. 
The Corporations
processes to identify, 
assess,
and
monitor
material
risks
from
cybersecurity
threats
are
part
of
its
Enterprise
Risk
Management
(ERM)
Program,
under 
which
the
Corporation
has 
implemented
a
comprehensive
Corporate
Information
Security
Program
(CISP).
Cybersecurity
risk
is 
managed as
part of
the overall
information technology
risk, under
the direction
of the
Corporate Security
Office (CSO)
led by
the 
Chief Information Security Officer (CISO) who ultimately
reports to the Chief Operating Officer (COO). 
The
CISP
outlines
the
Corporations
overall
vision,
direction,
and
governance
to
protect
the
confidentiality,
integrity,
and 
availability
of
customer
information
and
seeks
to
prevent
unauthorized
access
as
required
by
regulatory
guidelines
and
industry 
security best practices. The CISP
is based on well-renowned frameworks
such as the International Organizational
Standard ISO 27000 
series and
the NIST
Cybersecurity Framework.
As such,
it serves as
a guide
for the
implementation of
security safeguards
across the 
Corporation
and
its
subsidiaries.
The
CISP
also
addresses
cybersecurity
breaches
and
procedures
for
appropriate
response
efforts, 
including
any
required
notification,
depending
on the
severity
of the
specific security
incident. In
addition,
the
CISP incorporates
a 
risk-based approach
to ensure that
risk is
treated in
a consistent
and effective
matter and
is designed
to protect
classified information 
to
prevent
disclosure
to
unauthorized
individuals;
prioritize
the
use
of
information
security
resources
by
concentrating
on
critical 
business
applications;
develop
quality,
cost-effective,
and
reliable
systems;
ensure
the
proper
and
secure
disposal
of
sensitive 
information; and implement adequate processes to ensure compliance. 
The
ERM
Program
includes
a
Corporate
Incident
Response
Program,
which
features
a
risk-based
escalation
process
to
manage 
corporate
incidents,
including
cybersecurity
incidents,
and
notify
the
Risk
Committee
of
the
Board
of
Directors
and
applicable 
stakeholders
as
appropriate.
The
Corporation
incorporates
the
Information
Technology
(IT)
Risk
Unit
of
the
ERM
Department, 
which is comprised of several members such as IT
Risk Managers and the ERM Director who is part
of senior management, as well as 
external expertise, in the review of
its processes, including an independent
internal assessment of cybersecurity measures
and controls. 
The
Corporation
also
invests
in
threat
intelligence,
vulnerability
management,
and
incident
response
drills.
Furthermore,
all
of
the 
Corporations
employees
and
consultants
with
access
to
the
Corporations
network
are
required
to
complete
a
comprehensive 
cybersecurity
awareness
program
on
an
annual
basis.
Additionally,
awareness
and
training
on
information
technology
and 
cybersecurity risk is provided to the Board on a regular basis. 
The
Corporation
has
a
Vendor
Management
Program
and
a 
Third-Party
Risk
Management
function
to
manage
the
cybersecurity 
risks
associated
with
conducting
business
with
third-party
vendors,
which
includes
the
requirement
for
third-party
vendors
to 
implement
appropriate
measures
to
ascertain
security
and
confidentiality
of
the
Corporations
resources.
The
Corporation
places 
vendors into tiers
based on the
inherent risk due
to the nature
of the relationship
with that vendor
to determine any
additional security 
requirements commensurate to such level of risk.
The Corporation does not believe
that risks from cybersecurity threats or
attacks, including as a result of any
previous cybersecurity 
incidents, have 
materially
affected the Corporations
business strategy,
results of operations or
financial condition as
of December 31, 
2025.
While
the
Corporation
continues
to
closely
monitor
cyber
risk
and
has
implemented
processes
that
are
intended
to
assess, 
identify,
and manage
material risks
from cybersecurity
threats, security
controls, no
matter how
well designed
or implemented,
may 
only partially
mitigate and
not fully eliminate
these risks.
Events, when
detected by
security tools
or third parties,
may not
always be 
immediately
understood
or
acted
upon.
See
Item
1A,
Risk
Factors
Risks
Relating
to
Cybersecurity
and
Technology
for
more 
information on how cybersecurity risk could adversely affect the
Corporation, which should be read in conjunction with this Item 1C.
33 
Governance 
Responsibility for
risk oversight
and management
generally lies
with the
Corporations
Board of
Directors.
To
effectively manage 
oversight
of
the
CISPs
governance
and
cybersecurity
risk
management,
the
Board
has
delegated
such
responsibility
to
the
Risk 
Committee.
As part
of
its oversight,
the
Risk Committee
receives
reports
from
the
Executive
Risk Management
Committee
and
IT 
Steering
Committee,
which
are
committees
at
the
management
level,
on
the
Corporations
cybersecurity
processes.
The
Corporate 
Internal Audit Department
performs periodic audits of
the Corporations
information security practices and
presents them to the
Audit 
Committee
of
the
Board.
The scope
of
testing
is in
accordance
with
applicable
regulatory
guidance
and
prudent
business
practices. 
The
periodicity
of
testing
is determined
by
the
Corporate
Internal
Audit
Department
based
on
their
risk
assessment. 
Findings
from 
internal
audit
procedures
are
reported
to
Management
and
the
Audit
Committee.
In
addition,
the
Vendor
Management
Committee 
periodically
reports
to the 
Risk Committee
about the
Vendor
Management
program status. 
The Risk
Committee 
provides
the Board 
with
updated
information
on
the
matters
discussed
in
the
Risk
Committee
meetings
as
it
relates
to
the
CISP
and
the
overall 
information security
strategic direction
and evaluates
and approves
(if necessary)
reports presented
by executive
management related 
to the information security strategic direction of the Corporation.
The
CSO
oversees
the
CISP,
its
development,
and
any
applicable
updates
in
response
to
changes
in
operations
and
other 
circumstances,
and reports
on a
quarterly basis
to the
IT Steering
Committee
and to
the Boards
Risk Committee.
The Security
and 
Facilities
Management
Director,
who
has
been
in
charge
since
2016,
has
over
20
years
of
experience
in
functional
expertise 
concerning all aspects of information
security, integrity
and privacy of systems, and data
resources, and holds several relevant
licenses 
and/or
certifications.
Also,
certain
topics
related
to
information
security
are
presented
on
an
ad
hoc
basis
to
the
Executive
Risk 
Management
Committee.
The
CSO
provides
the
Boards
Risk
Committee
regular
reports
and
engages
in
discussions
on
the 
effectiveness
of
the
CISP,
including
risk
mitigation
strategy
and
progress.
The
Boards
Risk
Committee
reviews
and
approves
the 
CISP annually and receives a report on the security safeguards annually.
See Risk Management Risk Governance for more information on the Corporations
risk governance structure. 
34 
Item 2. Properties
As of December 31, 2025, First BanCorp. has ownership in the following
principal buildings: 
-
Headquarters 
Located at
First Federal
Building, 1519
Ponce de
Len Avenue,
San Juan,
Puerto Rico.
Approximately 51% 
of this 16-story office building is owned by the Corporation. 
-
Service Center Located
at 1130
Muoz Rivera Avenue,
San Juan, Puerto
Rico. This facility,
which is fully occupied
by the 
Corporation,
houses
over
1,000
employees
from
Human
Resources,
Data
processing
and
operations,
Administrative 
Operation, Mortgage operations, collections, and Loss Mitigation, and
certain other departments. 
-
Consumer Lending
Center 
Located at
876 Muoz
Rivera Avenue,
San Juan,
Puerto Rico.
This three-story
facility is
fully 
occupied
by the
Corporation
and
accommodates
a
retail
branch,
Money
Express
Headquarters,
Auto
Wholesale
and
Retail 
Financing, and Leasing Financing, among others. 
The Corporation
owns 18
retail branches
and 10
office centers,
other facilities,
and/or parking
lots. It
leases 88
branch premises, 
loan
and
office
centers
and
other
facilities.
In
certain
situations,
financial
services
such
as
mortgage
and
insurance
businesses
and 
commercial banking
services are
in the
same building
or branch.
All of
these premises
are in
Puerto Rico,
Florida, the
USVI and
the 
BVI.
Management
believes
that
the
Corporations
properties
are
well
maintained
and
are suitable
for
the
Corporations
business
as 
presently conducted. 
Item 3. Legal Proceedings 
Reference
is
made
to
Note
23
Regulatory
Matters,
Commitments
and
Contingencies
to
the
audited
consolidated
financial 
statements included in Part II, Item 8 of this Form 10-K, which is incorporated
herein by reference. 
Item 4. Mine Safety Disclosure. 
Not applicable. 
35 
PART
II 
Item 5. Market for Registrants Common Equity and Related
Stockholder Matters and Issuer Purchases of Equity Securities 
INFORMATION ABOUT
MARKET AND HOLDERS
The Corporations
common stock
is traded
on the
New York
Stock Exchange
(NYSE) under
the symbol
FBP.
On February
20, 
2026, there
were 430 holders
of record
of the Corporations
common stock,
not including
beneficial owners
whose shares are
held in 
the name of brokers or other nominees. 
As
of
December 31,
2025
and
2024,
the
Corporation
had
67,044,120
and
59,794,239
shares
held
as
treasury
stock, respectively. 
Refer to
Stock Repurchases
for more
information on
common stock
repurchases during
the fourth
quarter of
2025 held
as treasury 
stock. 
DIVIDENDS 
Since November 2018,
the Corporation has
made quarterly cash
dividend payments on
its shares of common
stock. On January
26, 
2026, the Corporation announced that its Board of
Directors had declared a quarterly cash dividend
of $0.20 per common share, which 
represents
an
increase
of
$0.02
per
common
share,
or
an
11%
increase,
compared
to
its
most
recent
quarterly
dividend
paid
in 
December
12, 2025.
The dividend
is payable
on March
13, 2026
to shareholders
of record
at the
close of
business on
February
26, 
2026. The
Corporation intends
to continue
to pay
quarterly dividends
on common
stock. However,
the Corporations
common stock 
dividends,
including
the
declaration,
timing
and
amount,
remain
subject
to
consideration
and
approval
by
the
Corporations
Board 
Directors at
the relevant
times. Information
regarding restrictions
on dividends,
is set
forth in
Part I,
Item 1,
Business -Supervision 
and Regulation
Dividend Restrictions and incorporated herein by reference.
Under the PR Tax
Code, dividends paid by the Corporation are subject to tax withholding as follows:
Residents of Puerto Rico 
A 15%
tax is
withheld on
dividends paid
to individuals,
trusts, and
estates, unless
the taxpayer
elects to
be taxed
at regular
rates. 
Once
this election
is made,
it is
irrevocable.
The election
allows
the
taxpayer
to include
the
eligible dividends
received
in
ordinary 
income and take a credit
for the amount of tax withheld
in excess, if any.
In certain cases, dividends may
be included in the taxpayers 
Alternative Minimum Tax
(AMT) calculation.
Nonresident U.S. Citizens
Dividends paid to a U.S.
citizen who is not a resident
of Puerto Rico are generally
subject to a 15% Puerto Rico
income tax, though 
partial or total exemptions may apply under section 1062.08 of the PR Tax
Code. 
Nonresident foreign
individuals (non-US citizens)
Dividends
paid
to any
individual who
are neither
United
States citizens
nor
Puerto
Rico residents
are generally
subject to
a
15% 
Puerto Rico withholding tax.
Foreign Corporations and Partnerships
Entities
that
do
not
conduct
business
in
Puerto
Rico
are
subject
to
a
10%
Puerto
Rico
dividend
tax
withholding.
Entities
that 
conduct business in Puerto Rico must report dividends as ordinary
income but are exempt from withholding. 
AMT Considerations 
Individuals
who are
residents of
Puerto
Rico may
be subject
to Puerto
Ricos
AMT,
which can
include certain
categories of
tax-
exempt or
preferentially taxed
income, such
as dividends
on the
Corporations
common stock
and long-term
capital gains.
Investors 
should consult with a tax professional regarding their specific AMT obligations
under Puerto Rico law. 
36 
STOCK REPURCHASES 
Since April 2021, the Corporations
Board of Directors has announced repurchase program
authorizations totaling up to $1.3 billion 
of
the
Corporations
outstanding
stock
and/or
junior
subordinated
debentures.
During
2025,
the
Corporation
repurchased
7,674,399 
shares of
its common
stock at
an average
price of
$19.55 for
a total
cost of
$150.0 million,
of which
7,085,582 million
shares for
a 
total
cost
of
$138.3
million, were
associated
with
the
remaining
amount of
the 202
4
capital plan
authorization
of $250
million
and 
588,817 million
shares, for a
total cost of
$11.7
million, were associated
with the 202
5
capital plan
authorization of
$200 million. As 
of
December
31,
2025,
the
Corporation
has
remaining
authorization
to
repurchase
approximately
$188.3
million
of common
stock. 
The amount
and timing
of stock
repurchases will
be based
on various
factors, including
our capital
requirements,
market conditions 
(including the trading price of our stock), and regulatory and legal considerations. 
The
following
table
provides
information
in
relation
to
the
Corporations
purchases
of
shares
of
its
common
stock
during
the 
quarter ended December 31, 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)
October 1, 2025 - October 31, 2025 
899,888 
$ 
19.77 
899,500 
$ 
220,514 
November 1, 2025 - November 30, 2025 
1,616,090 
19.93 
1,616,090 
188,300 
December 1, 2025 - December 31, 2025 
- 
- 
- 
188,300 
Total 
2,515,978 
(2) 
2,515,590 
(1) 
As of December
31, 2025, the Corporation
was authorized to purchase
up to $200 million
of the Corporations
common stock under
the 2025 stock repurchase
program that was publicly 
announced on
October 22,
2025. 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.
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
Corporations
discretion.
During the
fourth
quarter
of 2025,
the
Corporation 
repurchased approximately $50.0 million in common stock, of
which $38.3 million were associated with the remaining amount of
the 2024 capital plan authorization of $250 million. 
(2) 
Includes 388
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. 
37 
$0
$50
$100
$150
$200
$250
$300
12/31/2020
12/31/2021
12/31/2022
12/31/2023
12/31/2024
12/31/2025
PERFORMANCE OF FIRST BANCORP'S
COMMON STOCK BASED ON TOTAL RETURN
First Bank
S&P 500
S&P Supercom Banks Index
STOCK PERFORMANCE GRAPH 
The
following
graph
shall
not
be
deemed
incorporated
by
reference
into
any
filing
under
the
Securities
Act
or
the
Exchange
Act, 
except
to
the
extent
that First
BanCorp.
specifically
incorporates
this information
by
reference,
and
shall not
otherwise
be
deemed 
filed with the SEC.
The
graph
below
compares
the
cumulative
total
stockholder
return
of
First
BanCorp.
during
the
measurement
period
with
the 
cumulative
total return,
assuming reinvestment
of dividends,
of the
S&P 500
Index and
the S&P
Supercom
Banks Index
(the Peer 
Group).
The Performance
Graph assumes
that $100
was invested
on December
31, 2020
in each
of First
BanCorp. common
stock, 
the S&P 500 Index and
the Peer Group. The comparisons
in this table are set forth
in response to SEC disclosure requirements
and are 
therefore not intended to forecast or be indicative of future performance
of First BanCorp.s common
stock.
The cumulative total stockholder return was obtained
by dividing (i) the cumulative amount of dividends per share,
assuming dividend 
reinvestment since the
measurement point, December
31, 2020, plus (ii)
the change in the
per share price
since the measurement
date, 
by the share price at the measurement date. 
38 
Item 6. [Reserved]
39 
ITEM
7.
MANAGEMENTS
DISCUSSION
AND
ANALYSIS
OF
FINANCIAL
CONDITION
AND
RESULTS
OF 
OPERATIONS (MD&A) 
The following MD&A
relates to the
accompanying audited consolidated
financial statements of
First BanCorp. (the
Corporation, 
we, us,
our,
or First
BanCorp.) and
should be
read in
conjunction
with such
financial statements
and the
notes thereto.
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. 
The detailed financial discussion
that follows focuses on
2025 results compared to
2024. For a discussion of
2024 results compared 
to 2023, see Part I, Item 7,
Managements Discussion
and Analysis of Financial Condition
and Results of Operations included
in the 
Corporations Annual Report
on Form 10-K for the year ended December 31, 2024, filed on February
28, 2025. 
In
this
discussion
and
analysis
of
our
financial
condition
and
results
of
operations,
we
have
included
information
that
may 
constitute
forward-looking
statements
within
the
meaning
of
the
safe
harbor
provisions
of
Section
27A
of
the
Securities
Act
and 
Section 21E
of the
Exchange Act.
Forward-looking statements
are not
historical facts
or statements
of current
conditions, but
instead 
represent only our beliefs
regarding future events, many
of which, by their nature,
are inherently uncertain and
outside our control. By 
identifying
these statements
for you
in this
manner,
we are
alerting you
to the
possibility that
our actual
results, financial
condition, 
liquidity and capital actions may differ materially
from the anticipated results, financial condition, liquidity
and capital actions in these 
forward-looking
statements. Important
factors
that could
cause our
results, financial
condition, liquidity
and capital
actions to
differ 
from those in these statements include, among others, those described in
Risk Factors in Part I, Item 1A of this Form 10-K. 
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. 
Significant Events 
Economy and Market Update 
Economic conditions in Puerto
Rico remained generally stable
during 2025. The unemployment
rate decreased from 5.63% in
2024 
to 5.56% in 2025, remaining near historic lows and reflecting a resilient labor
market with steady labor force participation.
In
the
broader
U.S.
economy,
momentum
moderated
during
the
second
half
of
2025
following
a
strong
first
half.
Labor
market 
indicators softened but remained orderly,
with slower hiring activity and a modest increase in unemployment.
The U.S. unemployment 
rate
stood
at 4.3%
in
January,
unchanged
from
August
2025,
underscoring
a transition
toward
a
more balanced
labor market
rather 
than
a
deterioration
in
employment
conditions.
In
response
to
these
trends,
the
Federal
Reserve
(the
FED)
implemented
three
25 
basis points (bps)
rate cuts in
September, October,
and December 2025,
reducing the federal
funds target range
to 3.50%-3.75%, its 
lowest level in several years.
Looking ahead
to 2026, the
economic backdrop
remains broadly
constructive and
supportive of
our strategic
priorities. 
We 
remain 
focused on delivering
organic loan growth,
primarily on commercial
and residential mortgage
loans despite anticipated
declines in the 
consumer loan portfolio,
and maintaining strong
profitability metrics. Asset quality
is expected to remain
stable, with consumer
credit 
trends
continuing
to
normalize.
From
an
earnings
perspective,
we
expect
several
of
the
favorable
dynamics
that
drove
net
interest 
margin expansion in 2025 to continue into 2026.
Based on our current outlook, which assumes two additional FED rate
cuts during the 
second half of
2026, along with
projected loan growth
and deposit mix
changes, we expect
quarterly net
interest margin
expansion of 
approximately 2
to 3 bps.
Cash flows of
approximately $1.1 billion
from the investment
securities portfolio
(excluding U.S. Treasury 
securities)
are
expected
to be
received
during
the year
and redeployed
into higher-yielding
interest-earning
assets. These
dynamics, 
combined with continued
reductions in funding costs,
including brokered CDs, non-brokered
time deposits, and government
accounts, 
position
us
well
to
sustain
margin
performance.
Overall,
the
Corporation
enters
2026
with
strong
capital
levels,
ample
liquidity, 
diversified earnings profile, and expects to return
close to 100% of annual earnings to shareholders
through capital deployment actions 
positioning it well to navigate a moderating economic environment
while continuing to deliver value to shareholders. 
40 
Capital Deployment Actions and Dividend Payment Increase 
In
2025,
the
Corporation
delivered
approximately
$327.4
million,
or
95%
of
2025
earnings,
in
the
form
of
capital
deployment 
actions through
$150.0 million
in repurchases
of common
stock, approximately
$115.7
million in
common stock
dividends declared, 
and $61.7 million in the redemption
of the remaining outstanding trust-preferred
securities (TruPS) issued
by FBP Statutory Trusts
I 
and
II.
As of
February
20,
2026,
the
Corporation
has
remaining
authorization
of approximately
$187.2
million,
which
it expects
to 
execute during 2026. 
On January
26, 2026,
the Corporations
Board of
Directors declared
a quarterly
cash dividend
of $0.20
per common
share, which 
represents
an
increase
of
$0.02
per
common
share,
or
an
11%
increase,
compared
to
its
most
recent
quarterly
dividend
paid
in 
December
12, 2025.
The dividend
is payable
on March
13, 202
6
to shareholders
of record
at the
close of
business on
February
26, 
2026. The increased quarterly dividend level equates to an annualized dividend
of $0.80 per common share. 
Recent Tax
Developments and Other Special Items
The financial results
for 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. 
Legislative and Regulatory 
A
comprehensive
discussion
of
legislative
and
regulatory
matters
affecting
the
Corporation
can
be
found
in
Part
I,
Item
1, 
Business Supervision and Regulation of this Form 10-K.
Overview of Results of Operations 
The
Corporations
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. 
The
Corporation
had
net
income
of
$344.9
million
($2.15
per
diluted
common
share),
for
the
year
ended
December
31,
2025, 
compared
to
$298.7
million
($1.81
per
diluted
common
share),
for
the
year
ended
December
31,
2024.
Other
relevant
selected 
financial indicators for the periods presented are included below:
Year
Ended December 31, 
2025 
2024 
2023 
Key Performance Indicator: 
(1)
Return on Average
Assets 
(2)
(5)
1.81 
% 
1.58 
% 
1.62 
% 
Return on Average
Common Equity 
(3) (5)
18.74 
19.09 
21.86 
Efficiency Ratio 
(4)
49.77 
51.92 
50.70 
(1) 
These financial ratios are used by management to monitor the Corporations
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 by its average total
assets. 
(3) 
Measures the Corporations performance
based on its average common stockholders equity and is calculated
by dividing net income by its average total common stockholders
equity. 
(4) 
Measures how much the Corporation incurred to generate a
dollar of revenue and is calculated by dividing non-interest expenses
by total revenue. 
(5) 
For the year ended December 31, 2025, the employee retention credit
(ERC) and the one-time reversal in valuation allowance
related to deferred tax assets increased the return on 
average assets by 10 bps and the return on average equity ratio by
98 bps. 
41 
The key
drivers of
the Corporations
GAAP financial
results for
the year
ended December
31, 2025,
compared to
the year
ended 
December 31, 2024, include the following: 
Net interest
income for
the year
ended December
31, 2025
increased to
$868.9 million,
compared to
$807.5 million
for the 
year
ended
December
31,
2024,
driven
by
a
lower
cost
of
funds
and
the
redeployment
of
cash
flows
from
lower-yielding 
investment securities
into loans
and higher-yielding
investment securities.
See Result
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 year
ended 
December 31,
2025 was
$86.0 million,
compared to
$59.9 million
for the year
ended December
31, 2024,
driven by
a $27.9 
million increase
in the
provision for
the commercial
and construction
loan portfolios
mainly due
to C&I
loan growth
and a 
deterioration
on
the
economic
outlook
of
certain
macroeconomic
variables,
particularly
those
related
to
commercial
real 
estate property performance and the forecasted CRE price index
. 
Net charge-offs totaled $80.8 million for
each of the years ended December 31, 2025 and 2024, or
0.63% of average loans for 
the year ended December 31, 2025,
compared to 0.65% of average loans
for the year ended December 31,
2024. See Results 
of
Operations
Provision
for
Credit
Losses
and
Risk
Management
below
for
the
analysis
of
the
allowance
for
credit 
losses (ACL) and non-performing assets and related ratios. 
Non-interest income
for the
year ended
December 31,
2025 increased
to $131.9
million, compared
to $130.7
million for
the 
year
ended
December
31,
2024,
mainly
due
to
a
$1.4
million
increase
in
revenues
from
mortgage
banking
activities.
The 
results for
the year
ended
December 31,
2024 include
$1.5 million
in insurance
proceeds mostly
associated
with insurance 
claims associated with property damage caused by Hurricane Fiona. 
Non-interest expenses for the year ended December
31, 2025 amounted to $498.1 million, compared
to $487.1 million for the 
year
ended
December
31,
2024.
Non-interest
expenses
for
the
year
ended
December
31,
2025
include
the
aforementioned 
benefit in
payroll taxes
related to
the $2.3
million ERC,
and the
aforementioned benefit
of $1.1
million related
to the
FDIC 
special assessment, while
non-interest expenses for
the same period
in 2024 include
the $1.1 million additional
FDIC special 
assessment
expense.
On
a
non-GAAP
basis,
excluding
the
effect
of
these
Special
Items,
adjusted
non-interest
expenses 
increased by
$15.5 million,
driven by
an $11.7
million increase
in adjusted
employees compensation
and benefits
expenses 
and a $5.9 million
unfavorable variance in
net gain on OREO
operations, which includes
a $2.8 million valuation
adjustment 
recorded in a
commercial OREO property
in the Virgin
Islands region. See
Results of Operations
Non-Interest Expenses 
below for additional information.
Income
tax
expense
decreased
to
$71.9
million
for
the
year
ended
December
31,
2025,
compared
to
$92.5
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 as a
result of the
enactment of
Act 65-
2025,
and
a
lower
annual
effective
tax
rate
due
to
a
higher
proportion
of
exempt
to
taxable
income.
See
Income
Taxes 
below and Note 17 Income Taxes
included in Part II, Item 8 of this Form 10-K for additional information.
As of
December
31,
2025,
total assets
were
approximately
$19.1
billion,
a decrease
of $160.0
million
from
December 31, 
2024, primarily related
to a decrease
in cash and
cash equivalents resulting
from the repayment
of long-term borrowings
and 
a decrease in
total deposits, partially
offset by 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.
As of
December 31,
2025, total
liabilities were
$17.2 billion,
a decrease
of $457.6
million from
December 31,
2024, driven 
by a $271.7 million decrease in borrowings,
which includes the repurchase of $61.7 million in
junior subordinated debentures 
associated with
the aforementioned
TruPS redemption,
and a
$201.2 million
decrease in
deposits. See
Risk Management
Liquidity Risk below for additional information about the Corporations
funding sources and strategy. 
The
Corporations
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
$4.8
billion
as
of
December
31,
2025.
The
Corporation
had
approximately
$2.6
billion
in 
cash and cash
equivalents and
free high-quality
liquid securities as
of December
31, 2025. When
adding approximately
$2.6 
billion available
for funding
under the FEDs
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, the
Corporation had 
$6.3
billion, or 132%
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
Corporations
funding 
sources and strategy. 
42 
As of
December 31,
2025, the
Corporations
total stockholders
equity was
$2.0 billion,
an increase
of $297.6
million from 
December 31, 2024. The
increase was driven by
net income generated in
2025 and a $212.4
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
$150.0
million
in
common
stock
repurchases
and
$115.7
million,
or
$0.72
per 
common share, in common stock dividends declared
in 2025. The Corporations
CET1 capital, tier 1 capital, total capital, and 
leverage
ratios
were
16.76%,
16.76%,
18.01%,
and
11.58%,
respectively,
as
of
December
31,
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,
decreased
by $65.1
million
to $5.4
billion
for the
year
ended
December 31,
2025.
See Financial
Condition 
and Operating Data Analysis below for additional information. 
Total
non-performing
assets were
$114.1
million as
of December
31, 2025,
a decrease
of $4.2
million, from
December 31, 
2024,
driven by
a $9.8
million
decrease
in the
other
real
estate owned
(OREO)
portfolio
balance,
which
includes
a $2.8 
million valuation adjustment
recorded in a commercial
OREO property in the
Virgin
Islands region,
partially offset by a
$5.1 
million
increase
in
nonaccrual
loans,
which
includes
a
$9.2
million
increase
in
nonaccrual
commercial
and
construction 
loans,
driven
by
the
inflows
of
three
commercial
and
construction
loans
totaling
$16.2
million,
partially
offset
by
a
$3.1 
million
payoff
of
a
C&I
loan
in
the
Puerto
Rico
region.
See Risk
Management
Nonaccrual
Loans
and
Non-Performing 
Assets below for additional information. 
Adversely classified commercial
and construction loans
decreased by $5.9 million
to $81.4 million as of
December 31, 2025, 
when
compared
to December
31,
2024, driven
by
the upgrade
of a
$12.0 million
commercial
mortgage
loan in
the Florida 
region, partially offset by the downgrade of a $10.0
million C&I loan in the Puerto Rico region. 
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS 
The Corporation
has included
in this
Annual Report
on Form
10-K 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
Corporations
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
Part
I
below
for
a
reconciliation
of
the
Corporations
non-GAAP
financial 
measure of net interest income on a tax-equivalent basis to net interest income
in accordance with GAAP.
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. 
43 
See Risk
Management 
Capital below
for the
table that
reconciles the
Corporations
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. 
Adjusted Net Income,
Adjusted Non-Interest Income, Adjusted Non-Interest
Expenses,
and Adjusted Income Tax
Expense 
To
supplement the
Corporations
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 income,
non-
interest expenses,
and income tax expense
to exclude items that management
believes are not reflective
of core operating performance 
(Special Items). The financial results for the years ended December
31, 2025, 2024, and 2023 included the following Special Items: 
Years
Ended December 31, 2025, 2024, and 2023 
FDIC Special Assessment Expense 
-
A benefit
of $1.1
million
($0.7
million
after-tax,
calculated
based
on the
statutory
tax
rate of
37.5%)
was recorded
for
the 
year
ended December
31, 2025,
related to
amendments to
the FDIC
special assessment
collection
terms. On
December 16, 
2025, the FDIC issued an
interim final rule amending the
collection terms of the special
assessment, which included reducing 
the
collection
rate
in
the
eighth
collection
quarter
from
3.36
basis
points
to
2.97
basis
points,
removing
the
previously 
established extended assessment period provisions, and
providing offsets to regular quarterly deposit insurance
assessments if 
aggregate collections exceed
actual losses. As a
result of these changes,
the Corporation recorded a
reversal of the charges
of 
$1.1
million
($0.7
million
after-tax)
that
were
recorded
for
the
year
ended
December
31,
2024.
This
update
follows
the 
FDICs
2023
final
rule,
which
initially
imposed
the
special
assessment
to
recover
certain
estimated
losses
incurred
by
the 
Deposit
Insurance
Fund
following
the
failures
of
certain
financial
institutions
in
the
first
half
of
2023.
In
connection
with 
such rule, the
Corporation recorded a
charge of $6.3
million ($3.9 million
after-tax, calculated
based on the
statutory tax rate 
of 37.5%)
during
the year
ended December
31, 2023.
The FDIC
deposit
special assessment
is reflected
in the
consolidated 
statements of income as part of FDIC deposit insurance expenses.
Enactment of Act 65-2025 
-
A $16.6 million reversal in
valuation allowance related to
deferred tax assets primarily associated
with NOL carryforwards at 
the holding
company level
was reflected
in the
consolidated statements
of income
for the
year ended
December 31,
2025 as 
part of
income tax
expense. 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.
This
reversal
reflects
the
Corporations
expectation
of
realizing
these
tax
benefits
under
the
new
election 
established by the Act. 
Employee Retention Credit (ERC) 
-
A $2.3
million ERC,
net of
$0.3 million
in related
commissions, was
reflected in
the consolidated
statements of
income for 
the year ended
December 31, 2025
as part of
employees compensation
and benefits expenses.
This credit was
established 
under
the
Coronavirus
Aid,
Relief,
and
Economic
Security
Act
to
support
businesses
that
retained
employees
during
the 
COVID-19
pandemic.
The
credit
recorded
during
the
year
ended
December
31,
2025
is
tax
exempt
for
Puerto
Rico
tax 
purposes. 
Gain Recognized from Legal Settlement 
-
A
$3.6
million
($2.3
million
after-tax,
calculated
based
on
the
statutory
tax
rate
of
37.5%)
gain
recognized
from
a
legal 
settlement
was reflected
in
the
consolidated
statements
of
income
for
the
year
ended
December
31,
2023
as part
of
other 
non-interest income. 
Gain on Early Extinguishment of Debt
-
A $1.6
million gain
on the
repurchase
of $21.4
million in
junior subordinated
debentures was
reflected
in the
consolidated 
statements
of
income
for
the
year
ended
December
31,
2023
as
Gain
on
early
extinguishment
of
debt.
The
junior 
subordinated debentures
had been recorded
in the consolidated
statements of financial
condition as Long-term
borrowings. 
The purchase
price equated
to 92.5%
of the
$21.4 million
par value
of the
TruPS. The
7.5% discount
resulted in
the gain of 
$1.6 million. The gain, realized at the holding company level, had
no effect on the income tax expense recorded during 2023.
44 
The following table
reconciles, for the
years ended December
31, 2025, 2024,
and 2023, net income
to adjusted net
income, a non-
GAAP financial measure that excludes
the Special Items identified above: 
Year Ended
December 31, 
2025 
2024 
2023 
(In thousands) 
Net income, as reported (GAAP) 
$ 
344,866 
$ 
298,724 
$ 
302,864 
Adjustments:
Employee retention credit 
(2,358) 
- 
- 
FDIC special assessment (reversal) expense 
(1,099) 
1,099 
6,311 
Income tax impact related to the enactment of Act 65-2025 
(16,553) 
- 
- 
Gain recognized from legal settlement 
- 
- 
(3,600) 
Gain on early extinguishment of debt 
- 
- 
(1,605) 
Income tax impact of adjustments 
(1)
412 
(412) 
(1,017) 
Adjusted net income (Non-GAAP) 
$ 
325,268 
$ 
299,411 
$ 
302,953 
(1) 
See Adjusted Net
Income, Adjusted Non
-Interest Income,
Adjusted Non-Interest
Expenses, and
Adjusted Income Tax
Expense above
for the individual
tax impact
related to the
above 
adjustments, which were based on the Puerto Rico statutory tax rate
of 37.5%, as applicable. 
45 
CRITICAL ACCOUNTING ESTIMATES 
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.
Accounting
estimates
require
assumptions
and
judgments
about
uncertain
matters
that 
could
have
a
material
effect
on
the
consolidated
financial
statements.
The
Corporations
critical
accounting
estimates
that
are 
particularly
susceptible
to
significant
changes
include
the
following:
(i)
the
ACL and
(ii) valuation
of financial
instruments.
Actual 
results could differ from estimates and assumptions if
different outcomes or conditions prevail.
Allowance for Credit Losses
The Corporation
maintains an ACL
for loans
and finance
leases based upon
managements
estimate of the
lifetime expected
credit 
losses in the loan portfolio, as of the balance sheet date,
excluding loans held for sale. Additionally,
the Corporation maintains an ACL 
for
held-to-maturity
and
available-for-sale
debt
securities,
and
other
off-balance
sheet
credit
exposures
(
e.g.
, unfunded
loan 
commitments). For loans and finance leases, unfunded
loan commitments, and held-to-maturity debt securities, the estimate of
lifetime 
credit losses
includes the
use of
quantitative models
that incorporate
forward-looking macroeconomic
scenarios that
are applied
over 
the
contractual
lives
of
the
portfolios,
adjusted,
as
appropriate,
for
prepayments
and
permitted
extension
options
using
historical 
experience.
For
purposes
of
the
ACL
for
lending
commitments,
such
allowance
is
determined
using
the
same
methodology
as
the 
ACL
for
loans,
while
also
taking
into
consideration
the
probability
of
drawdowns
or
funding,
and
whether
such
commitments
are 
cancellable by us. The
ACL for available-for-sale debt
securities is measured using
a risk-adjusted discounted cash
flow approach that 
also
considers
relevant
current
and
forward-looking
economic
variables
and
the
ACL
is
limited
to
the
difference
between
the
fair 
value of the security
and its amortized cost.
Judgment is specifically applied
in the determination of
economic assumptions, the length 
of
the
initial
loss
forecast
period,
the
reversion
of
losses
beyond
the
initial
forecast
period,
historical
loss
expectations,
usage
of 
macroeconomic
scenarios,
and
qualitative
factors,
which
may
not
be
adequately
captured
in
the
loss
model,
as
further
discussed 
below. 
The macroeconomic
scenarios utilized by
the Corporation include
variables that have
historically been key
drivers of increases and 
decreases
in
credit
losses.
These
variables
include,
but
are
not
limited
to,
unemployment
rates,
housing
and
commercial
real
estate 
prices, gross
domestic product levels,
retail sales, interest
rate forecasts,
corporate bond
spreads, and changes
in equity market
prices. 
The
Corporation
derives
the
economic
forecasts
it
uses
in
its
ACL
model
from
Moodys
Analytics.
The
latter
has
a
large
team
of 
economists, database managers and operational engineers with a history
of producing monthly economic forecasts for over 25 years. 
The
Corporation
has
currently
set
an
initial
forecast
period
(reasonable
and
supportable
period)
of
two
years
and
a
reversion 
period of up to three
years, utilizing a straight-line
approach and reverting back
to the historical macroeconomic
mean for Puerto Rico 
and the Virgin
Islands regions. For
the Florida region,
the methodology considers
a reasonable and
supportable forecast period
and an 
implicit reversion towards the historical
trend that varies for each macroeconomic
variable. After the reversion period,
a historical loss 
forecast
period
covering
the
remaining
contractual
life,
adjusted
for
prepayments,
is
used
based
on
the
change
in
key
historical 
economic variables
during representative
historical expansionary
and recessionary periods.
Changes in economic
forecasts impact the 
probability
of
default
(PD),
loss-given
default
(LGD),
and
exposure
at
default
(EAD)
for
each
instrument,
and
therefore 
influence the amount of future cash flows for each instrument that the
Corporation does not expect to collect. 
Further,
the
Corporation
periodically
considers
the
need
for
qualitative
adjustments
to
the
ACL.
Qualitative
adjustments
may
be 
related to and include,
but not be limited to,
factors such as the
following:
(i) managements
assessment of economic forecasts
used in 
the
model
and
how
those
forecasts
align
with
managements
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
qualitative
factors
applied
at
December
31,
2025,
and
the
importance
and
levels
of
the 
qualitative
factors
applied,
may
change
in
future
periods
depending
on
the
level
of
changes
to
items
such
as
the
uncertainty
of 
economic
conditions
and
managements
assessment
of
the
level
of
credit
risk
within
the loan
portfolio
as a
result
of
such
changes, 
compared
to the
amount of
ACL calculated
by the
model.
The evaluation
of qualitative
factors
is inherently
imprecise
and
requires 
significant management judgment. 
The ACL can also be
impacted by factors outside the Corporations
control, which include unanticipated
changes in asset quality of 
the
portfolio,
such
as deterioration
in
borrower
delinquencies,
or
credit
scores
in
our
residential
real
estate and
consumer
portfolio. 
Further,
the current
fair
value of
collateral
is utilized
to assess
the
expected
credit losses
when
a financial
asset is
considered
to be 
collateral dependent. 
46 
Our process for determining
the ACL is further
discussed in Note 1
Nature of Business
and Summary of
Significant Accounting 
Policies and
Note 4
Allowance
for
Credit Losses
and
Finance
Leases
included
in
Part II,
Item 8
of this
Form
10-K.
Also, see 
Allowance
for
Credit
Losses
for
Loans
and
Finance
Leases
below
for
additional
information
on
the
weighting
of
economic 
scenarios
to estimate
the ACL,
changes in
key economic
variables,
and the
ACL sensitivity
analysis performed
as of
December
31, 
2025. 
OTHER ESTIMATES 
In addition
to the
critical accounting
estimates we
make in
connection with
the ACL,
the use
of estimates
and assumptions
is also 
important in performing
the accounting for
income taxes, valuation
of financial instruments,
determining the accounting
for goodwill, 
pension
and
postretirement
benefit
obligations,
and
provisions
for
losses
that
may
arise
from
litigation
and
regulatory
proceedings 
(including governmental investigations). 
The
Corporations
accounting
for
income
taxes
involves
estimating
current
tax
obligations
and
assessing
temporary
differences 
between
financial
reporting
and
tax
bases.
Management
exercises
judgment
in
interpreting
tax
regulations
and
evaluating
the 
likelihood of
realizing deferred
tax assets.
Valuation
allowances are
established, when
necessary,
to reduce
deferred tax
assets to
the 
amount
that
is
more
likely
than
not
to
be
realized.
The
Corporation
updates
its
tax
estimates
and
related
accruals
as
facts
and 
circumstances evolve, including
developments in audits, legislation, and
economic conditions. For additional
information, see Note 17 
- Income Taxes
included in Part II, Item 8 of this Form 10-K. 
Valuations
of
financial
instruments
often
involve
estimates
due
to
the
need
to
determine
fair
value
in
the
absence
of
readily 
available market
prices. Since Level
1 and Level
2 financial
instruments rely
on observable
market prices,
estimates are
minimal. On 
the other
hand, Level
3 valuations
involve significant
unobservable inputs,
such as
internal models
or assumptions
about future
cash 
flows,
which
introduce
a
higher
degree
of
subjectivity
and
estimation
uncertainty.
Notwithstanding,
as
of
December
31,
2025
and 
2024,
less than 1%
of the available-for-sale
debt securities portfolio
was classified as
Level 3. In
addition, fair value
is also used
on a 
non-recurring basis
for measuring
the fair value
of certain Level
3 assets such
as collateral
dependent loans
and OREO
properties, as 
disclosed in Note 19
Fair Value
included in Part II, Item 8 of this Form 10-K.
Goodwill
is tested
for impairment
at least
annually,
or more
frequently if
circumstances
indicate
that a
reporting units
fair value 
may fall below
its carrying amount.
The impairment assessment
begins with a
qualitative assessment to
determine whether
it is more-
likely-than-not
that fair
value exceeds
carrying value.
If this
assessment
is inconclusive,
a quantitative
test is
performed.
Estimating 
the fair
value of
our
reporting units
requires
judgment
and considers
factors
such as
projected earnings,
macroeconomic
conditions, 
interest rates, and
peer performance.
See Note 1 
Nature of Business
and Summary
of Significant Accounting
Policies included
in 
Part
II,
Item
8
of
this
Form
10-K
for
additional
information.
Based
on
our
annual
qualitative
assessment
conducted
in
the
fourth 
quarter
of
2025,
it
was
determined
that
it
is
more-likely-than-not
that
the
fair
value
of
the
reporting
units
exceeded
their
carrying 
value; therefore, no goodwill impairment was recognized. 
The
Corporation
maintains
two
frozen
qualified
noncontributory
defined
benefit
pension
plans,
and
a
related
complementary 
postretirement
benefits
plan
covering
medical benefits
and
life insurance
after retirement.
Calculation
of the
obligations
and
related 
expenses
under
these
plans
requires
the
use
of
actuarial
valuation
methods
and
assumptions,
which
are
subject
to
management 
judgment and may
differ if different
assumptions are used. See
Note 14 Employee
Benefit Plans included in
Part II, Item 8
of this 
Form 10-K, for disclosures related to the benefit plans.
We 
record estimated losses related to litigation and regulatory
matters when they are both probable and reasonably estimable. These 
estimates require
significant judgment,
and actual
outcomes may
differ
materially.
Estimated liabilities
are determined
on a
case-by-
case based on
the latest available
information, legal
counsels
advice, and
applicable insurance
coverage. Because
legal outcomes
are 
inherently uncertain, it can be difficult to
determine whether a loss is probable or reasonably possible, or
to estimate the amount of any 
such
loss.
Accordingly,
actual
losses
may
exceed
the
accrued
amount
or
the
range
of
reasonably
possible
losses.
See
Note
23
Regulatory Matters, Commitments and Contingencies
included in Part II, Item 8 of this Form 10-K. 
47 
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
Corporations
assets
and
liabilities.
In
addition,
variable
sources
of
interest
income,
such
as
loan
fees,
periodic 
dividends, and
collection of
interest in
nonaccrual loans,
can fluctuate
from period
to period.
Net interest
income for
the year
ended 
December 31, 2025 was $868.9 million, compared
to $807.5 million for the year ended December
31, 2024. On a tax-equivalent basis, 
net
interest
income
for
the
year
ended
December
31,
2025
was
$900.5
million,
compared
to
$826.9
million
for
the
year
ended 
December 31, 2024. 
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 Corporations
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. 
48 
Part I 
Average volume 
Interest income 
(1)
/ expense 
Average rate 
(1)
Year Ended December
31, 
2025
2024
2023
2025
2024
2023
2025 
2024 
2023 
(Dollars in thousands) 
Interest-earning assets: 
Money market and other short-term investments 
$ 
943,731 
$ 
710,945 
$ 
584,083 
$ 
41,097 
$ 
37,082 
$ 
30,419 
4.35 
% 
5.22 
% 
5.21 
% 
Government obligations
(2)
1,810,308 
2,517,327 
2,843,284 
35,479 
34,139 
40,314 
1.96 
% 
1.36 
% 
1.42 
% 
MBS 
3,346,069 
3,348,925 
3,702,908 
77,168 
59,092 
67,641 
2.31 
% 
1.76 
% 
1.83 
% 
FHLB stock 
27,296 
34,161 
36,606 
2,423 
3,266 
2,799 
8.88 
% 
9.56 
% 
7.65 
% 
Other investments 
20,390 
18,510 
14,167 
627 
543 
490 
3.08 
% 
2.93 
% 
3.46 
% 
Total investments
(3)
6,147,794 
6,629,868 
7,181,048 
156,794 
134,122 
141,663 
2.55 
% 
2.02 
% 
1.97 
% 
Residential mortgage loans 
2,868,887 
2,816,732 
2,814,102 
168,321 
164,238 
160,009 
5.87 
% 
5.83 
% 
5.69 
% 
Construction loans 
244,769 
221,822 
172,952 
23,891 
19,260 
14,811 
9.76 
% 
8.68 
% 
8.56 
% 
C&I and commercial mortgage loans 
5,968,858 
5,606,827 
5,244,503 
410,319 
405,481 
365,177 
6.87 
% 
7.23 
% 
6.96 
% 
Finance leases 
899,270 
879,437 
789,870 
70,167 
69,218 
60,909 
7.80 
% 
7.87 
% 
7.71 
% 
Consumer loans 
2,840,369 
2,830,678 
2,704,877 
325,178 
322,267 
301,756 
11.45 
% 
11.38 
% 
11.16 
% 
Total loans
(4)(5)
12,822,153 
12,355,496 
11,726,304 
997,876 
980,464 
902,662 
7.78 
% 
7.94 
% 
7.70 
% 
Total interest-earning assets
- non-GAAP
(1)
$ 
18,969,947 
$ 
18,985,364 
$ 
18,907,352 
$ 
1,154,670 
$ 
1,114,586 
$ 
1,044,325 
6.09 
% 
5.87 
% 
5.52 
% 
Tax-equivalent adjustment 
(31,514) 
(19,433) 
(20,839) 
Interest income - GAAP 
$ 
1,123,156 
$ 
1,095,153 
$ 
1,023,486 
5.92 
% 
5.77 
% 
5.41 
% 
Interest-bearing liabilities: 
Time deposits 
$ 
3,280,404 
$ 
2,999,078 
$ 
2,590,313 
$ 
110,974 
$ 
105,712 
$ 
68,605 
3.38 
% 
3.52 
% 
2.65 
% 
Brokered CDs 
543,154 
627,454 
348,829 
24,010 
31,833 
16,630 
4.42 
% 
5.07 
% 
4.77 
% 
Other interest-bearing deposits 
7,467,571 
7,567,514 
7,664,793 
102,699 
115,562 
100,226 
1.38 
% 
1.53 
% 
1.31 
% 
Securities sold under agreements to repurchase 
161 
245 
54,570 
7 
12 
2,769 
4.35 
% 
4.90 
% 
5.07 
% 
Advances from the FHLB 
347,370 
500,055 
541,000 
15,367 
22,566 
24,608 
4.42 
% 
4.51 
% 
4.55 
% 
Other borrowings 
15,694 
146,044 
171,184 
1,159 
11,989 
13,538 
7.38 
% 
8.21 
% 
7.91 
% 
Total interest-bearing liabilities
- GAAP 
$ 
11,654,354 
$ 
11,840,390 
$ 
11,370,689 
$ 
254,216 
$ 
287,674 
$ 
226,376 
2.18 
% 
2.43 
% 
1.99 
% 
Net interest income / margin - non-GAAP
(1)
$ 
900,454 
$ 
826,912 
$ 
817,949 
4.75 
% 
4.36 
% 
4.33 
% 
Net interest income / margin - GAAP 
$ 
868,940 
$ 
807,479 
$ 
797,110 
4.58 
% 
4.25 
% 
4.22 
% 
Net interest spread - non-GAAP
(1)
3.91 
% 
3.44 
% 
3.53 
% 
Net interest spread - GAAP 
3.74 
% 
3.34 
% 
3.42 
% 
(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 for additional information. 
(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 $17.3 million,
$13.4 million and $11.9 million for
the years ended December 31, 2025, 2024 and
2023, respectively, of income
from prepayment penalties 
and late fees related to the Corporations
loan portfolio. 
49 
Part II 
Year Ended December 31, 
2025 Compared to 2024 
2024 Compared to 2023 
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 
$ 
11,237 
$ 
(7,222) 
$ 
4,015 
$ 
6,516 
$ 
147 
$ 
6,663 
Government obligations 
(11,675) 
13,015 
1,340 
(4,543) 
(1,632) 
(6,175) 
MBS 
48 
18,028 
18,076 
(6,423) 
(2,126) 
(8,549) 
FHLB stock 
(617) 
(226) 
(843) 
(215) 
682 
467 
Other investments 
58 
26 
84 
138 
(85) 
53 
Total investments 
(949) 
23,621 
22,672 
(4,527) 
(3,014) 
(7,541) 
Residential mortgage loans 
3,400 
683 
4,083 
134 
4,095 
4,229 
Construction loans 
2,135 
2,496 
4,631 
4,190 
259 
4,449 
C&I and commercial mortgage loans 
26,097 
(21,259) 
4,838 
25,143 
15,153 
40,296 
Finance leases 
1,650 
(701) 
949 
6,868 
1,441 
8,309 
Consumer loans 
1,444 
1,467 
2,911 
13,623 
6,888 
20,511 
Total loans 
34,726 
(17,314) 
17,412 
49,958 
27,836 
77,794 
Total interest income 
$ 
33,777 
$ 
6,307 
$ 
40,084 
$ 
45,431 
24,822 
$ 
70,253 
Interest expense on interest-bearing liabilities: 
Time deposits 
$ 
9,869 
$ 
(4,607) 
$ 
5,262 
$ 
11,890 
$ 
25,217 
$ 
37,107 
Brokered CDs 
(3,962) 
(3,861) 
(7,823) 
13,992 
1,211 
15,203 
Other interest-bearing deposits 
(462) 
(12,401) 
(12,863) 
(1,537) 
16,873 
15,336 
Securities sold under agreements to repurchase 
(5) 
- 
(5) 
(2,757) 
- 
(2,757) 
Advances from the FHLB 
(6,723) 
(476) 
(7,199) 
(1,905) 
(137) 
(2,042) 
Other borrowings 
(9,732) 
(1,098) 
(10,830) 
(2,044) 
495 
(1,549) 
Total interest expense 
(11,015) 
(22,443) 
(33,458) 
17,639 
43,659 
61,298 
Change in net interest income 
$ 
44,792 
$ 
28,750 
$ 
73,542 
$ 
27,792 
$ 
(18,837) 
$ 
8,955 
Net
interest
income
amounted
to
$868.9
million
for
the
year
ended
December
31,
2025,
an
increase
of
$61.4
million
when 
compared to $807.5 million for the same period in 2024. The $61.4
million increase in net interest income was primarily due to: 
A $33.4 million decrease in interest expense on interest-bearing liabilities, consisting
of: 
o
An $18.0
million decrease
in interest
expense
associated with
the redemption
of junior
subordinated debentures
during 
the second
half of
2024 and
first half
of 2025,
and $210.0
million in
FHLB advances,
that matured
and were
repaid in 
2025. 
o
A $15.4 million decrease in interest expense on interest-bearing deposits, a net
effect of: 
-
A
$12.8
million
decrease
in
interest
expense
on
interest-bearing
checking
and
saving
accounts,
of
which
$12.4 
million was
associated with
lower interest
rates paid
when compared
to 2024.
The average
cost of
interest-bearing 
checking and saving accounts decreased
by 15 bps to 1.38% for
2025 as compared to 1.53% for
2024, mostly driven 
by
a
42
bps
decrease
in
the
cost
of
government
deposits.
Excluding
government
deposits,
the
average
cost
of 
interest-bearing checking and saving accounts for 2025 was 0.72%,
compared to 0.78% for 2024. 
-
A $7.8 million decrease in interest
expense on brokered CDs due to
a $4.0 million decrease associated with
an $84.3 
million decline
in the
average balance
,
and a
$3.8 million
decrease mainly
associated with
new issuances
at lower 
interest rates than maturing brokered CDs. 
Partially offset by: 
-
A
$5.2
million
increase
in
interest
expense
on
time
deposits,
excluding
brokered
CDs,
driven
by
a
$9.8
million 
increase associated with
a $281.3 million
increase in the
average balance,
partially offset by
a $4.6 million
decrease 
related
to
lower rates
paid
on new
issuances
and
renewals.
The
average
cost of
time deposits
for
2025,
excluding 
50 
brokered
CDs,
decreased
14
bps
to
3.38%
as
compared
to
3.52%
for
2024.
Excluding
government
deposits,
the 
average cost of time deposits for 2025 was 3.39%, compared to 3.46% for
2024. 
A $14.3 million net increase in investment securities and interest-bearing
cash balances,
driven by: 
o
An $11.1 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
$4.0
million
increase
in
interest
income
from
interest-bearing
cash
balances,
due
to
an
$11.2
million
increase 
associated
with
a
$232.8
million
net
increase
in
the
average
balances,
which
consisted
primarily
of
cash
balances 
deposited at the FED, partially offset by a $7.2 million decrease associated
with the reduction of the federal funds rate. 
A $13.7 million increase in interest income on loans, consisting of: 
o
A
$5.7
million
increase
in
interest
income
on
commercial
and
construction
loans,
driven
by
a
$28.2
million
increase 
associated with
a $385.0
million increase
in the
average balance,
partially offset
by a
$22.5 million
decrease due
to the 
effect of lower interest rates on the downward repricing of variable-rate
loans. 
As
of
December
31,
2025,
the
interest
rate
on
approximately
50%
of
the
Corporations
commercial
and
construction 
loans was tied
to variable rates,
with 32% 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
year
ended
December
31,
2025,
the 
average
one-month
SOFR
decreased
91
bps,
the
three-month
SOFR
decreased
90
bps,
and
the
average
Prime
rate 
decreased 94 bps, compared to the average rates for such indexes for the year
ended December 31, 2024. 
o
A 
$4.1
million
increase
in
interest income
on
residential
mortgage
loans, of
which
$3.2
million
was associated
with
a 
$52.2 million increase in the average balance. 
o
A $3.9 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,
and an increase in the average
balance of auto loans and finance
leases, 
partially offset by a decline in the average balance of
personal loans and credit cards. 
Net interest
margin
for 2025
was 4.58%,
compared to
4.25% for
2024. The
increase in
the net
interest margin
mostly reflects
the 
deployment of
cash flows from
lower-yielding investment
securities to fund
loan growth and
purchases of higher-yielding
investment 
securities
and
the
decrease
in
the
cost
of
interest-bearing
non-maturity
deposits,
primarily
public
sector
deposits,
and
the 
aforementioned redemption
of junior
subordinated debentures
and repayments
of FHLB
advances. 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. 
51 
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
$85.9 million
for the
year ended
December 31,
2025, compared
to 
$62.9 million for the year ended December 31, 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 $10.4
million for
the year 
ended
December
31,
2025,
compared
to
a
net
benefit
of
$17.5
million
for
year
ended
December
31,
2024.
The
expense 
recorded during 2025 was mainly
due to C&I loan growth and
a deterioration in the economic outlook
of the commercial real 
estate property
performance
and
forecasted
CRE price
index,
partially
offset
by improved
financial
performance
of
certain 
commercial borrowers.
The net benefit recorded
during 2024 was associated
with the improved
financial condition of
certain 
borrowers;
an
improvement
on the
economic
outlook
of
certain
macroeconomic
variables,
particularly
variables
associated 
with commercial
real estate property
performance and
the forecasted CRE
price index;
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 portfolio growth. 
Provision
for
credit
losses
for
the
residential
mortgage
loan
portfolio
was
an
expense
of
$0.2
million
for
the
year
ended 
December 31,
2025, compared
to a net
benefit of $16.2
million for year
ended December 31,
2024. The net
benefit recorded 
during
2024 was
driven
by improvements
in macroeconomic
variables,
mainly in
the projection
of the
unemployment rate, 
and updated
historical loss
experience used
for determining
the ACL
estimate resulting
in a downward
revision of
estimated 
loss severities, partially offset by newly originated loans
. 
Provision
for credit
losses for
the consumer
loan and
finance lease
portfolios
was an
expense of
$75.3
million for
the year 
ended
December
31,
2025,
compared
to
an
expense
of
$96.6
million
for
year
ended
December
31,
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
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. 
Provision for credit losses for
unfunded loan commitments and debt securities 
The
provision
for
credit losses
for
unfunded
commercial
and
construction
loan
commitments and
standby
letters of
credit for
the 
year
ended
December
31,
2025
was a
net
benefit
of
$0.1
million,
compared
to
a
net
benefit
of
$1.5
million
for
the
same period
in 
2024.
The
net
benefit
recorded
during
2024
was
driven
by
an
improvement
in
the
economic
outlook
of
certain
macroeconomic 
variables, particularly in variables associated with the CRE price
index. 
The
provision
for
credit
losses for
held-to-maturity
and
available-for-sale
debt
securities
for
the
year
ended
December
31,
2025 
was an expense of $0.2 million,
compared to a net benefit of
$1.4 million for the same period
in 2024. The net benefit recorded
during 
2024 was mostly driven by improvements in the underlying updated
financial information of a Puerto Rico municipal bond issuer. 
52 
Non-Interest Income 
Non-interest income
for the
year ended
December 31,
2025 amounted
to $131.9
million, compared
to $130.7
million for
the same 
period in 2024. The $1.2 million
increase in non-interest income was
mainly due to a $1.4 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 
2025 and
2024, net realized
gains of $7.2
million and
$5.4 million, respectively,
were recognized
as a result
of GNMA
securitization 
transactions and whole
loan sales to U.S.
GSEs amounting to
$173.0 million and
$160.0 million, respectively.
The results for
the year 
ended
December
31,
2024
include
$1.5
million
in
insurance
proceeds
mostly
associated
with
insurance
claims
associated
with 
property damage caused by Hurricane Fiona. 
Non-Interest Expenses 
Non-interest expenses for
the year ended December
31, 2025 amounted to $498.1
million, compared to $487.1
million for the same 
period in 2024. The efficiency
ratio for 2025 was 49.77%, compared
to 51.92%
for the same period in 2024. Non-interest expense
s
for 
the
year
ended
December
31,
2025
include
the
aforementioned
$2.3
million
ERC,
and
the
aforementioned
benefit
of
$1.1
million 
related
to the
FDIC special
assessment, 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 $15.5 million
primarily due 
to: 
An
$11.7
million
increase
in
adjusted
employees
compensation
and
benefits
expenses,
driven
by
annual
salary
merit 
increases;
and
a
$4.2
million
increase
in
bonus
incentives,
which
includes
a
$1.4
million
increase
in
stock-based 
compensation expense, of which $0.4 million was associated with retirement
-eligible employees. 
A
$5.9
million
unfavorable
variance
in
net
gain
on
OREO
operations,
driven
by
a
$2.8
million
valuation
adjustment 
recorded
during
2025
in
connection
with
an
ongoing
litigation
which
could
result
in
a
potential
loss
of
title
of
a 
commercial
OREO
property
in
the
Virgin
Islands
region,
a
$2.3
million
realized
gain
on
the
sale
of
a
commercial
real 
estate OREO
property
in the
Puerto Rico
region during
2024, and
a decrease
in net
realized gains
on sales
of residential 
OREO properties in the Puerto Rico region. 
Partially offset by: 
A
$3.2
million
decrease
in
other
non-interest
expenses,
mainly
due
to
a
decrease
in
the
amortization
of
core
deposit 
intangible
assets
from
the
Banco
Santander
Puerto
Rico
acquisition,
including
$1.2
million
related
to
savings
accounts 
fully amortized
in 2024
and $1.3
million related
to non-interest
checking accounts
fully amortized
in 2025.
Additionally, 
expenses
declined
due
to
a
$2.1
million
reduction
in
institutional
insurance
policy
costs. These
decreases
were
partially 
offset by a $1.8 million increase in charges for operational
and fraud losses. 
Income Taxes 
For the
year ended
December 31,
2025, the
Corporation recorded
an income
tax expense of
$71.9 million,
compared to
an income 
tax
expense
of
$92.5
million
for
the
same
period
in
2024.
The
results
for
the
year
ended
December
31,
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 Corporations
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
17 
Income Taxes.
The decrease in income
tax expense for the year
ended December 31, 2025
was driven by the aforementioned
one-
time reversal of approximately
$16.6 million in valuation allowance
and a lower annual effective
tax rate due to a higher proportion
of 
exempt to taxable income. 
The Corporations
annual effective
tax rate,
excluding discrete
items, decreased
to 21.6%
for the
year ended
December 31,
2025, 
compared
to
23.7%
for
the
same
period
in
2024.
See
Note
17
Income
Taxes
to
the
audited
consolidated
financial
statements 
included in Part II, Item 8 of this Form 10-K for additional information.
As of
December
31,
2025,
the Corporation
had
a net
deferred
tax
asset of
$149.0
million,
net
of a
valuation
allowance
of
$75.0 
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
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. 
53 
OPERATING SEGMENTS
The Corporations
operating segments
are based
primarily on
the Corporations
lines of
business for
its operations
in Puerto
Rico, 
the Corporations
principal market,
and by
geographic areas
for its
operations outside
of Puerto
Rico. As
of December
31, 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. For
additional information
regarding First
BanCorp.s
reportable
segments, please
refer
to Note 
21, Segment Information to the audited financial statements included
in Part II, Item 8 of this Form 10-K. 
The accounting
policies for
segment reporting
are consistent with
those described
in Note 1,
Nature of
Business and
Summary of 
Significant
Accounting
Policies to
the audited
financial
statements
included
in Part
II,
Item 8
of this
Form
10-K.
The Corporation 
evaluates the performance
of the segments based
on net interest income,
the provision for
credit losses, non-interest
income, and non-
interest
expenses.
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 Corporation
uses a
funds transfer
pricing system
to match fund
lending and
deposit gathering
functions with
the Treasury
and 
Investments
segment
centrally
managing
funding
by
providing
funds
to
the
Mortgage
Banking,
Consumer
(Retail)
Banking, 
Commercial
and
Corporate
Banking,
the
United
States
Operations,
and
the
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-based approach,
adjusted for a funding spread that reflects the Corporations
cost of funds.
Mortgage Banking
The Mortgage Banking
segment conducts its operations
primarily through FirstBank.
This segment consists of
the origination, sale, 
and
servicing
of
a
variety
of
residential
mortgage
loan
products.
Originations
are
sourced
through
different
channels,
such
as 
FirstBank branches
and purchases
from mortgage
bankers, and
in association
with new
project developers.
This segment
focuses on 
originating residential real estate loans, including those that conform
to the Federal Housing Administration (the FHA), the Veterans 
Administration
(the
VA),
and
U.S.
Department
of
Agriculture
Rural
Development
(RD)
standards.
Loans
that
meet
FHAs 
standards qualify for FHAs
insurance, while loans that meet VA
or RD standards are guaranteed by the respective federal agencies. 
Mortgage
loans
that
do
not
qualify
for
the
FHA,
VA,
or
RD
programs
are
referred
to
as
conventional
loans,
which
can
be 
conforming or non-conforming. Conforming
loans are those that meet the
standards for sale under the U.S.
Federal National Mortgage 
Association
(FNMA)
and
the
U.S.
Federal
Home
Loan
Mortgage
Corporation
(FHLMC)
programs.
Loans
that
do
not
meet 
FNMA
or
FHLMC
standards
are
referred
to
as
non-conforming
residential
real
estate
loans.
The
Mortgage
Banking
segment
also 
acquires
and
sells mortgages
in the
secondary
market.
Conforming
residential
real estate
loans are
sold to
investors
such
as FNMA 
and FHLMC, and the Corporation has commitment authority to issue GNMA
MBS. 
For
the
year
ended
December
31,
2025,
segment
income
before
taxes
for
the
Mortgage
Banking
segment
decreased
to
$43.5 
million, compared to $58.5 million for the same period in 2024. The highlights
of the segments financial results are
as follows: 
Net interest
income for
the year
ended December
31, 2025
was $70.9
million, compared
to $72.5
million for
the same 
period in 2024. The decrease in
net interest income of $1.6 million was
primarily attributable to an increase in
the cost of 
funds charged to this segment, partially offset
by an increase in average loan balances.
The provision
for credit
losses for
the year
ended December
31, 2025
was a
net benefit
of $0.9
million, compared
to a 
net
benefit
of
$15.5
million
for
the
same
period
in
2024.
The
net
benefit
recorded
during
2024
was
driven
by 
improvements
in
macroeconomic
variables,
mainly
in
the projection
of the
unemployment
rate,
and
updated
historical 
loss
experience
used
for
determining
the
ACL
estimate
resulting
in
a
downward
revision
of
estimated
loss
severities, 
partially offset by newly originated loans. 
Non-interest income
for the
year ended
December 31,
2025 was
$14.9 million,
compared to
$13.5 million
for the
same 
period
in
2024.
The
increase
of
$1.4
million
was driven
by an
increase
in
the
net
realized
gain
on
sales of
residential 
mortgage loans in the secondary market. 
54 
Non-interest expenses for the year ended December 31, 2025 were $43.2
million, compared to $43.0 million for the same 
period in 2024. The
increase of $0.2 million
was driven by: (i) a
$1.1 million decrease in
net gains on OREO operations, 
driven by
a decrease
in net
realized gains
on sales
of residential
OREO properties
in the
Puerto Rico
region; (ii)
a $0.5 
million increase in
other non-interest expenses
and (iii) a $0.4
million increase in
employees compensation and
benefits 
expenses, driven
by an
increase in
bonus incentives,
partially offset
by the
aforementioned ERC
recorded during
2025. 
These variances were
partially offset by
a $1.3 million decrease
in professional service
fees, driven by lower
collections, 
appraisals, and credit
-related fees; and
a $0.4 million
decrease in FDIC
deposit insurance expense
driven by the
reversal 
during 2025 of the FDIC special assessment charges that were recorded
for the year ended December 31, 2024. 
Consumer (Retail) Banking
The
Consumer
(Retail)
Banking
segment
includes
the
Corporations
consumer
lending,
commercial
lending
to
small
businesses, 
commercial
transaction
banking,
and
deposit-taking
activities
(other
than
those assigned
to
the
Commercial
and
Corporate
Banking 
segment) primarily
conducted through
FirstBanks
branch network
and loan
centers in
Puerto Rico.
Retail deposits
gathered
through 
each branch
of FirstBanks
retail network
serve as one
of the funding
sources for the
lending and
investing activities.
Other activities 
included in this segment are insurance activities in the Puerto Rico region. 
For
the
year
ended
December
31,
2025,
segment
income
before
taxes
for
the
Consumer
(Retail)
Banking
segment
increased
to 
$289.0
million,
compared
to
$243.3
million
for
the
same
period
in
2024.
The
highlights
of
the
segments
financial
results
are
as 
follows: 
Net interest income
for the year ended
December 31, 2025 was
$583.7 million, compared
to $550.8 million
for the same 
period in
2024. The increase
of $32.9
million was primarily
driven by
higher income
from funds loaned
to the Treasury 
and Investments segment, which resulted from higher average time deposit
balances. 
The
provision
for
credit
losses
for
the
year
ended
December
31,
2025
decreased
by
$20.4
million
to
$74.9
million, 
compared
to $95.3
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 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. 
Non-interest income
for the
year ended
December 31,
2025 was
$95.4 million,
compared to
$96.2 million
for the
same 
period in 2024. The decrease of $0.8 million was driven
by a $1.1 million decrease in service charges and fees on
deposit 
accounts and a
$0.3 million decrease
in insurance commission
income, partially offset
by a $0.8
million increase in
card 
and processing income due to higher transactional fee income. 
Non-interest
expenses for
the year
ended December
31, 2025
were $315.2
million, compared
to $308.4
million for
the 
same period in 2024.
The increase of $6.8 million
was driven by: (i) a
$7.4 million increase in employees
compensation 
and benefits expenses, mainly related to annual salary merit increases
and an increase in bonus incentives, partially offset 
by
the
aforementioned
ERC
recorded
during
2025;
(ii)
a
$1.3
million
increase
in
taxes,
other
than
income
taxes, 
primarily
related
to higher
municipal license
taxes; and
(iii) a
$1.0 million
increase in
credit and
debit card
processing 
fees
driven
by
higher
transactional
volumes.
These
variances
were
partially
offset
by
a $1.4
million
decrease
in
other 
non-interest
expenses,
mainly
due
to
a
decrease
in
the
amortization
of
core
deposit
intangible
assets
from
the
Banco 
Santander
Puerto
Rico
acquisition,
a
$0.8
million
decrease
in
FDIC
deposit
insurance
expense
driven
by
the
reversal 
during
2025 of
the FDIC
special
assessment
charges
that
were recorded
for the
year
ended December
31, 2024,
and a 
$0.9 million decrease in business promotion expenses. 
55 
Commercial and Corporate Banking
The
Commercial
and
Corporate
Banking
segment
consists
of
the
Corporations
lending
and
other
services
for
large
customers 
represented
by
specialized
and
middle-market
clients
and
the
government
sector.
This
segment
consists
of
the
Corporations 
commercial lending (other than small
business commercial loans) and commercial
deposit-taking activities (other than the
government 
sector). A substantial
portion of the
commercial and corporate
banking portfolio is
secured by the underlying
real estate collateral
and 
the personal guarantees from the borrowers.
For
the
year
ended
December
31,
2025,
segment
income
before
taxes
for
the
Commercial
and
Corporate
Banking
segment 
remained
relatively flat
at $137.8
million, compared
to $137.9
million for
the same
period in
2024. The
highlights of
the segments 
financial results are as follows: 
Net interest income
for the year ended
December 31, 2025 was
$173.8 million, compared
to $157.7 million
for the same 
period in
2024. The
increase of
$16.1 million
was primarily
attributable to
a $17.3
million decrease
in the
cost of
funds 
charged to
this segment
resulting from
lower interest
rates, partially
offset by
a $2.0
million decrease
in interest
income 
mainly associated with the effect of lower interest rates on the downward
repricing of variable-rate loans. 
The provision for
credit losses for
the year ended
December 31, 2025
was an expense of
$4.1 million, compared
to a net 
benefit
of $12.9
million
for
the same
period
in 2024.
The expense
recorded
during
2025
was mainly
due
to C&I
loan 
growth
and a
deterioration in
the economic
outlook of
the commercial
real estate
property performance
and forecasted 
CRE price
index,
partially
offset
by improved
financial
performance
of certain
commercial borrowers.
The net
benefit 
recorded
during
2024
was
associated
with
the
improved
financial
condition
of
certain
borrowers;
a
recovery
of
$5.0 
million associated
with a
C&I loan
in the
Puerto Rico
region; and
an improvement
on the
economic
outlook of
certain 
macroeconomic
variables,
particularly
variables
associated
with
commercial
real
estate
property
performance
and
the 
forecasted CRE price index; partially offset by loan growth. 
Non-interest
income
for
the
year
ended
December
31,
2025
was
$8.1
million,
compared
to
$7.0
million
for
the
same 
period
in
2024.
The
increase
of
$1.1
million
was
driven
by
a
$1.4
million
increase
in
service
charges
on
deposits 
primarily related to cash management fee income from corporate customers. 
Non-interest expenses for the year ended December 31, 2025 were $40.0
million, compared to $39.7 million for the same 
period in 2024. The increase of $0.3
million was mainly due to a $2.0
million decrease in net gains on OREO
operations, 
driven by
a $2.3
million realized
gain on
the sale
of a
commercial real
estate OREO
property in
the Puerto
Rico region 
during
2024,
and
a
$0.6
million
increase
in
employees
compensation
and
benefits
expenses,
driven
by
increases
in 
bonus incentives,
partially offset by the aforementioned ERC recorded
during 2025. These variances were partially offset 
by lower
management fees,
which
are recorded
as part
of other
non-interest expenses,
and
a decrease
in FDIC
deposit 
insurance expense driven
by the reversal
during 2025 of
the FDIC special
assessment charges
that were recorded
for the 
year ended December 31, 2024. 
56 
Treasury and
Investments
The
Treasury
and
Investments
segment
is
responsible
for
the
Corporations
investment
portfolio
and
treasury
functions.
The 
treasury
function 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
respective
lending 
activities and by
compensating these
units for deposits
gathered. The
Treasury function
also obtains funds
through brokered
deposits, 
advances from the FHLB, and repurchase agreements involving investment
securities, among other funding sources. 
The
investment
function
is intended
to
implement
a
funding
strategy
for
the
purposes of
liquidity
management,
interest rate
risk 
management and earnings enhancement. 
The funds
transfer pricing
charged
or credited
by Treasury
and Investments
are calculated
using the
SOFR/swap curve
with term 
rates, adjusted for a funding spread that reflects the Corporations
cost of funds. 
For the
year ended
December 31,
2025, segment
loss before
taxes for
the Treasury
and Investments
segment increased
to $121.9 
million,
compared
to
$120.8
million
for
the
same
period
in
2024,
in
part
due
to
a
$0.4
million
increase
in
net
interest
loss,
which 
primarily
reflects
a
$45.8
million
higher
charge
on
funds
loaned
from
the
Consumer
(Retail)
Banking
segment,
which
was
largely 
offset by lower interest
expense and higher interest
income. Interest expense decreased
$30.1 million, mainly due to
the redemption of 
junior subordinated debentures
during the second
half of 2024
and first half of
2025, reduced interest
expense on brokered
CDs in the 
Puerto Rico region, and the repayment in 2025 of $210.0
million of maturing FHLB advances. Interest income increased $15.2
million 
primarily due to purchases of higher-yielding debt securities replacing
maturing lower-yielding debt securities. 
United States Operations
The United
States Operations
segment
consists of
all banking
activities conducted
by FirstBank
on the
U.S. mainland.
FirstBank 
provides a wide
range of banking services
to individual and corporate
customers,
primarily in southern
Florida, through eight
banking 
branches.
This
segment
offers
a
variety
of
consumer
and
commercial
banking
products
and
services.
Consumer
banking
products 
include checking,
savings and
money market
accounts, retail
CDs, internet
banking services,
residential mortgages,
and home
equity 
loans and
lines of
credit. Retail
deposits,
as well
as FHLB
advances
and brokered
CDs, allocated
to this
operation serve
as funding 
sources for its lending activities. 
Commercial
banking
services
include
checking,
savings
and
money
market
accounts,
retail
CDs,
internet
banking
services,
cash 
management services,
remote data capture,
and automated clearing
house (ACH) transactions.
Loan products include
the traditional 
C&I and commercial real estate products, such as lines of credit, term loans,
and construction loans. 
For the year
ended December 31,
2025, segment
income before taxes
for the United
States Operations segment
decreased to
$39.2 
million, compared to $42.7 million for the same period in 2024. The highlights
of the segments financial results are
as follows: 
Net interest
income for
the year
ended December
31, 2025
was $87.3
million, compared
to $78.0
million for
the same 
period in
2024. The
increase of $9.3
million was mainly
related to higher
interest income on
loans due
to an increase
in 
average
loan
balances
on
commercial
loans,
partially
offset
by
the
effect
of
lower
interest
rates
on
the
downward 
repricing
of
variable-rate
commercial
loans,
as
well
as
higher
interest
expense
on
deposits
due
to
an
increase
in
the 
average deposit balances, which outweighed the impact of lower rates paid
on deposits during 2025.
The provision for
credit losses for
the year ended
December 31, 2025
was an expense of
$5.7 million, compared
to a net 
benefit
of
$6.7
million
for
the
same
period
in
2024.
The
expense
recorded
during
2025
was
mainly
due
to
C&I
loan 
growth
and a
deterioration in
the economic
outlook of
the commercial
real estate
property performance
and forecasted 
CRE price index.
Meanwhile, the net benefit recorded during 2024 was associated with an improvement
on the economic 
outlook
of
certain
macroeconomic
variables,
particularly
variables
associated
with
commercial
real
estate
property 
performance and the forecasted CRE price index; and $1.2
million in recoveries of two commercial loans; partially
offset 
by loan growth. 
57 
Virgin
Islands Operations
The Virgin
Islands Operations
segment consists
of all
banking activities
conducted by
FirstBank in
the USVI
and BVI,
including 
commercial and consumer
banking services.
This segment operates
through eight banking
branches serving in
the USVI islands of
St. 
Thomas,
St.
Croix,
and
St.
John,
as
well
as
the
island
of
Tortola
in
the
BVI.
This
segments
primary
business
activities
include 
consumer
and
commercial
lending,
and
deposit-taking
activities. Retail
deposits
gathered
through
each branch
serve as
the
primary 
funding sources for the segments lending
activities. 
For the year
ended December 31,
2025, segment income
before taxes for
the Virgin
Islands Operations segment
was $29.1 million, 
compared to $29.7 million for the same period in 2024. The highlights
of the segments financial results are as follows
: 
Net interest
income for
the year
ended December
31, 2025
was $65.8
million, compared
to $60.7
million for
the same 
period
in
2024.
The
increase
of
$5.1
million
was
mainly
related
to
higher
average
loan
balances
on
commercial
and 
construction
loans
and
lower
interest
rates
paid
on
government
time
deposits,
partially
offset
by
the
effect
of
lower 
interest rates on the downward repricing of variable-rate commercial loans. 
The provision for
credit losses for
the year ended
December 31, 2025
was an expense of
$1.9 million, compared
to a net 
benefit of $0.2
million for the
same period in
2024. The expense
recorded during 2025
was mainly due
to an increase
in 
the
provision
for
credit
losses
for
the
commercial
and
construction
loan
portfolios
due
to
C&I
loan
growth
and
a 
deterioration
in
the
economic
outlook
of
the
commercial
real
estate
property
performance
and
forecasted
CRE
price 
index,
partially
offset
by
a
decrease
in
the
provision
for
credit
losses
for
the
consumer
loan
portfolio
due
to
updated 
historical loss experience and reductions in the unsecured loan portfolio. 
Non-interest expenses for the year ended December 31, 2025 were $44.3 million,
compared to $41.1 million for the same 
period
in 202
4.
The
increase of
$3.2 million
was mainly
associated with
a
$2.8 million
valuation
adjustment
recorded 
during
2025
in
connection
with
an
ongoing
litigation
which
could
result
in
a
potential
loss
of
title
of
a
commercial 
OREO property in the Virgin
Islands region. 
58 
FINANCIAL CONDITION AND OPERATING
DATA
ANALYSIS 
Financial Condition 
The following table presents an average balance sheet of the Corporation for the indicated
periods: 
December 31, 
2025 
2024 
2023 
(In thousands) 
ASSETS 
Interest-earning assets: 
Money market and other short-term investments 
$ 
943,731 
$ 
710,945 
$ 
584,083 
U.S. and Puerto Rico government obligations 
1,810,308 
2,517,327 
2,843,284 
MBS 
3,346,069 
3,348,925 
3,702,908 
FHLB stock 
27,296 
34,161 
36,606 
Other investments 
20,390 
18,510 
14,167 
Total investments 
6,147,794 
6,629,868 
7,181,048 
Residential mortgage loans 
2,868,887 
2,816,732 
2,814,102 
Construction loans 
244,769 
221,822 
172,952 
Commercial loans 
5,968,858 
5,606,827 
5,244,503 
Finance leases 
899,270 
879,437 
789,870 
Consumer loans 
2,840,369 
2,830,678 
2,704,877 
Total loans 
12,822,153 
12,355,496 
11,726,304 
Total interest-earning assets, excluding valuation 
allowances on investment securities and total ACL 
18,969,947 
18,985,364 
18,907,352 
Total non-interest-earning assets 
786,155 
834,855 
838,955 
Valuation allowances on investment securities and total ACL 
(1)
(691,681) 
(858,863) 
(1,039,884) 
Total assets 
$ 
19,064,421 
$ 
18,961,356 
$ 
18,706,423 
LIABILITIES 
Interest-bearing liabilities: 
Time deposits 
$ 
3,280,404 
$ 
2,999,078 
$ 
2,590,313 
Brokered CDs 
543,154 
627,454 
348,829 
Other interest-bearing deposits 
7,467,571 
7,567,514 
7,664,793 
Interest-bearing deposits 
11,291,129 
11,194,046 
10,603,935 
Securities sold under agreements to repurchase 
161 
245 
54,570 
Advances from the FHLB 
347,370 
500,055 
541,000 
Other borrowings 
15,694 
146,044 
171,184 
Total interest-bearing liabilities 
11,654,354 
11,840,390 
11,370,689 
Total non-interest-bearing liabilities 
(2)
5,570,267 
5,556,423 
5,950,495 
Total liabilities 
17,224,621 
17,396,813 
17,321,184 
STOCKHOLDERS EQUITY 
Stockholders equity 
1,839,800 
1,564,543 
1,385,239 
Total liabilities and stockholders equity 
$ 
19,064,421 
$ 
18,961,356 
$ 
18,706,423 
(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. 
(2) Includes, among other things, non-interest-bearing deposits. 
The Corporations
total average assets
were $19.1
billion for the
year ended December
31, 2025, compared
to $19.0 billion
for the 
year
ended December
31, 2024,
a net
increase
of $103.1
million.
The variance
primarily reflects
the following:
(i) a
$466.7 million 
increase in
the average balance
of total
loans, primarily
in the
commercial and
construction loan
portfolios; (ii)
an increase
of $232.8 
million
in
the
average
balance
of
interest-bearing
cash,
which
consisted
primarily
of
deposits
maintained
at
the
FED;
and
(iii)
a 
decrease
of
$156.8
million
in
unrealized
losses
on
available-for-sale
debt
securities.
These
variances
were
partially
offset
by
a 
decrease of $709.9 million
in debt securities, mainly due
to maturities and principal
repayments of U.S. agencies MBS
and debentures 
and U.S. Treasury securities,
net of purchases.
The
Corporations
total
average
liabilities
were
$17.2
billion
for
the
year
ended
December
31,
2025,
a
net
decrease
of
$172.2 
million compared
to December 31,
2024. The net
decrease was related
to a decrease
of $283.1
million in the
average balance
of total 
borrowings,
mostly
associated
with
FHLB
advances
that
matured
and
were
repaid
in
2025
and
the
redemption
of
the
remaining 
outstanding TruPS,
partially offset
by a $97.1
million increase in
the average
balance of interest-bearing
deposits and a
$13.8 million 
increase in the average balance of non-interest-bearing liabilities, primarily
in non-interest-bearing deposits.
59 
Assets
The Corporations
total assets were
$19.1 billion as
of December
31, 2025, a
decrease of $160.0
million from December
31, 2024, 
primarily
related to
a decrease
in cash
and cash
equivalents
resulting
from the
repayment of
long-term borrowing
and a
decrease in 
total deposits,
partially offset
by 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. 
Loans Receivable, including Loans Held for Sale 
As of
December 31,
2025, the
Corporations
total loan
portfolio before
the ACL
amounted to
$13.1 billion,
an increase
of $380.2 
million
compared
to December
31, 2024,
of which
$347.8 million
was in
commercial
and construction
loans. In
the Florida
region, 
commercial and
construction loans
increased by
$179.4 million,
of which
$129.2 million
was in
C&I loans
and $92.2
million was
in 
commercial mortgage
loans. In
the Puerto
Rico region,
commercial and
construction loans
increased by
$113.4 million
driven by
the 
origination of
several C&I
term loans,
each in
excess of
$15 million,
that increased
the portfolio
balance by
$141.4 million;
a $67.9 
million
increase
in construction
loans; and
higher utilization
of C&I
lines of
credit; partially
offset
by the
payoff
of a
$73.8
million 
commercial mortgage
loan in the
hospitality industry;
the repayment of
a $36.8 million
C&I term loan;
and a $42.1
million reduction 
in the balance of floor
plan lines of credit. In the
Virgin Islands
region, commercial and construction
loans increased by $55.0 million, 
in part due to a $40.2 million disbursement of a government line of credit.
As
of
December
31,
2025,
the Corporations
loans
held-for-investment
portfolio
was
comprised
of
commercial
and
construction 
loans (49%),
consumer loans
and finance
leases (29%),
and residential
real estate
loans (22%).
Of the
total gross
loan portfolio
held 
for investment
of $13.1
billion as
of December
31, 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 December 31, 2025 
Puerto Rico 
Virgin Islands 
United States 
Total 
(In thousands) 
Residential mortgage loans 
$ 
2,227,053 
$ 
150,551 
$ 
530,698 
$ 
2,908,302 
Construction loans 
249,466 
14,174 
1,928 
265,568 
Commercial mortgage loans 
1,690,176 
73,751 
790,325 
2,554,252 
C&I loans 
2,348,274 
170,728 
1,169,356 
3,688,358 
Total commercial loans 
4,287,916 
258,653 
1,961,609 
6,508,178 
Consumer loans and finance leases 
3,636,072 
66,947 
5,857 
3,708,876 
Total loans held for investment,
gross 
$ 
10,151,041 
$ 
476,151 
$ 
2,498,164 
$ 
13,125,356 
Loans held for sale 
16,697 
- 
- 
16,697 
Total loans, gross 
$ 
10,167,738 
$ 
476,151 
$ 
2,498,164 
$ 
13,142,053 
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 
First
BanCorp.
relies
primarily
on
its
retail
network
of
branches
to
originate
residential
and
consumer
personal
loans.
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 the relationships with auto dealers and dedicated sales professionals who serve
selected locations in order to facilitate originations. 
60 
The following table sets forth certain additional data (including loan production)
related to the Corporation's loan portfolio net of the 
ACL on loans and finance leases as of and for the indicated dates: 
For the Year
Ended December 31, 
2025 
2024 
2023 
(Dollars in thousands) 
Beginning balance as of January 1 
$ 
12,517,890 
$ 
11,931,008 
$ 
11,304,667 
Residential real estate loans originated 
500,633 
460,726 
424,641 
Construction loans originated 
148,767 
207,421 
154,720 
C&I and commercial mortgage loans originated and purchased 
3,198,662 
3,113,258 
2,750,817 
Finance leases originated 
240,030 
263,693 
327,528 
Consumer loans originated 
1,264,454 
1,372,537 
1,468,794 
Total loans originated and purchased 
5,352,546 
5,417,635 
5,126,500 
Sales of loans 
(170,249) 
(165,533) 
(155,733) 
Repayments and other decreases 
(1)
(4,807,171) 
(4,665,220) 
(4,344,426) 
Net increase 
375,126 
586,882 
626,341 
Ending balance as of December 31 
$ 
12,893,016 
$ 
12,517,890 
$ 
11,931,008 
Percentage increase 
3.00% 
4.92% 
5.54% 
(1) 
Includes, among other things, the change in the ACL on loans
and finance leases and cancellation of loans due to the repossession
of the collateral and loans repurchased. 
Residential
mortgage
loan
originations
for
the
year
ended
December
31,
2025
amounted
to
$500.6
million,
compared
to
$460.7 
million for
2024. The increase
in residential
mortgage loan originations
of $39.9 million
mainly consisted
of a $56.3
million increase 
in the Puerto Rico region, partially offset by a $18.2 million
decrease in Florida region. 
See Risk Management 
Exposure to Puerto Rico Government
and Risk Management 
Exposure to USVI Government
below 
for information on the Corporations
credit exposure to PR and USVI government entities. 
As of
December
31,
2025,
the Corporations
total
commercial
mortgage
loan
exposure
amounted
to
$2.6
billion,
or 19%
of
the 
total loan portfolio. In terms of
geography, $1.7 billion
of the exposure was in the Puerto
Rico region, $0.8 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,
26% in
office real
estate, and
19% in
the hotel
industry.
The $0.8
billion 
exposure
in the
Florida region
was comprised
mainly of
36% in
the retail
industry,
20% in
the hotel
industry,
and 6%
in office
real 
estate.
Of
the
Corporations
total
commercial
mortgage
loan
exposure
of
$2.6
billion,
$563.0
million
matures
within
the
next
12 
months and has a weighted-average
interest rate of approximately 5.64%.
Commercial mortgage loan exposure
in the office real estate 
industry,
which
matures
within
the
next
12
months,
amounted
to
$136.3
million
and
has
a
weighted-average
interest
rate
of 
approximately 5.53%. 
As of
December
31, 2025
and 2024,
the Corporations
total exposure
to shared
national credit
(SNC) loans
(including
unused 
commitments) amounted
to $1.1 billion
and $1.3 billion,
respectively.
As of December
31, 2025, approximately
$333.4 million of
the 
SNC exposure is related to the portfolio in the Puerto Rico region and $796.9 million
is related to the portfolio in the Florida region. 
Commercial and
construction loan
originations (excluding
government loans)
for the
year ended
December 31,
2025 amounted
to 
$3.2
billion,
compared
to
$3.1
billion
for
2024.
The
increase
of
$28.0
million
for
the
year
ended
December
31,
2025
was
mainly 
related
to
a $64.7
million
increase
in
the
Florida
region,
mainly
in
commercial
mortgage
loans;
and
a $14.2
million
increase
in
the 
Virgin
Islands
region,
of
which
$10.3
million
was
in
construction
loans.
These
variances
were
partially
offset
by
a
$50.9
million 
decrease
in Puerto
Rico region,
driven by
a $175.0
million decrease
in the
floor plan
portfolio and
a $151.5
million decrease
in the 
commercial
mortgage
loans; partially
offset
by a
$306.6 million
increase
in C&I
loans,
driven
by higher
utilization
of C&I
lines of 
credit and the origination of several C&I relationships, each in excess
of $25 million, with an aggregate balance of $223.6 million. 
Government loan originations for the year ended December
31, 2025 amounted to $178.3 million, compared to $179.5 million
for the 
comparable period in 2024. 
Originations of
auto loans (including
finance leases) for
the year ended
December 31, 2025
amounted to $868.4
million, compared 
to $933.9 million for
the same period in
2024. Other consumer loan
originations, other than credit
cards, for the year
ended December 
31,
2025 amounted
to $217.2
million,
compared
to
$236.7 million
for
the
same period
in
2024.
Most of
the decreases
in
auto
loan 
originations
and
other
consumer
loan
originations
were
in
the
Puerto
Rico
region.
The
utilization
activity
on
the
outstanding
credit 
card
portfolio
for
the
year
ended
December
31,
2025
amounted
to
$418.9
million,
compared
to
$465.6
million
for
the
comparable 
period in 2024. 
61 
Maturities of Loans Receivable 
The following tables
present the loans
held for investment
portfolio as of
December 31, 2025
by remaining contractual
maturities and 
interest rate type: 
After One Year 
After Five Years 
Total Portfolio 
One Year or Less 
Through Five Years 
Through 15 Years 
After 15 Years 
(In thousands) 
Residential mortgage 
$ 
102,955 
$ 
432,009 
$ 
1,158,138 
$ 
1,215,200 
$ 
2,908,302 
Construction loans 
56,424 
127,183 
79,944 
2,017 
265,568 
Commercial mortgage loans 
700,924 
1,517,427 
332,225 
3,676 
2,554,252 
C&I loans 
1,545,796 
1,784,328 
355,467 
2,767 
3,688,358 
Consumer loans 
1,176,472 
2,300,231 
231,902 
271 
3,708,876 
Total loans 
(1)
$ 
3,582,571 
$ 
6,161,178 
$ 
2,157,676 
$ 
1,223,931 
$ 
13,125,356 
Amount due in one year or less at: 
Amount due after one year: 
Total Portfolio 
Fixed Interest Rates 
Variable Interest 
Rates 
Fixed Interest Rates 
Variable Interest 
Rates 
Residential mortgage 
$ 
99,487 
$ 
3,468 
$ 
2,645,663 
$ 
159,684 
$ 
2,908,302 
Construction loans 
34,122 
22,302 
173,453 
35,691 
265,568 
Commercial mortgage loans 
499,456 
201,468 
1,446,555 
406,773 
2,554,252 
C&I loans 
390,630 
1,155,166 
699,228 
1,443,334 
3,688,358 
Consumer loans 
953,917 
222,555 
2,527,413 
4,991 
3,708,876 
Total loans 
(1)
$ 
1,977,612 
$ 
1,604,959 
$ 
7,492,312 
$ 
2,050,473 
$ 
13,125,356 
(1) 
Scheduled repayments are included in the maturity category in which the payment is due. The amounts provided do not reflect prepayment assumptions related to the loan portfolio. 
62 
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
Corporations
available-for-sale
debt
securities
portfolio
was
invested
in
U.S.
Treasury
securities,
U.S. 
GSEs obligations,
and fixed-rate GSEs
MBS. The Corporations
total available-for-sale
debt securities portfolio
as of December
31, 
2025
amounted
to
$4.6
billion,
an
$11.3
million
decrease
from
December
31,
2024.
The
decline
was
driven
by
$1.6
billion
in 
maturities,
of which $1.1
billion were
U.S. agencies debentures
and $535.1
million were U.S.
Treasury securities,
and $536.2
million 
in
principal
repayments
of
U.S.
agencies
MBS
and
debentures.
These
factors
were
partially
offset
by
$1.9
billion
in
purchases,
of 
which $974.9 million were
U.S. agencies MBS and debentures
with an average yield of 4.76%,
including $872.1 million of residential 
MBS; and
$963.2
million were
U.S. Treasury
securities with
an average
yield of
4.02%; and
a $212.4
million increase
in fair
value 
attributable to
changes in
market interest
rates. As
of December
31, 2025,
the Corporation
had a
net unrealized
loss on
available-for-
sale
debt
securities
of
$347.2
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
$184.4
million
(fair
value
of
$178.8 
million) as of
December 31, 2025,
compared to $225.3
million as of
December 31, 2024.
The decrease
in GSEs MBS
was driven
by 
$41.1 million in principal
repayments. Held-to-maturity debt
securities also include $80.9
million as of December
31, 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.
The 
decrease in government
bonds was driven by
$12.6 million in
principal repayments. As
of December 31,
2025, approximately 59%
of 
the Corporations government bonds
consisted of obligations issued by three of the largest municipalities in Puerto
Rico. 
As
of
December
31,
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
$1.1 billion
and have
an 
average yield of 2.41%. 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
Corporations
available-
for-sale debt securities portfolio. 
See
Risk Management
Exposure
to Puerto
Rico
Government
below
for
information
and
details
about
the Corporations
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 government
bonds. 
63 
The carrying
values of
debt securities
as of
December 31,
2025 and
2024 by
contractual maturity
(excluding MBS)
and weighted-
average yield, are shown below: 
December 31, 2025 
December 31, 2024 
Weighted-
Average Yield
% 
Carrying 
Amount 
Weighted-
Average Yield
% 
Carrying 
Amount 
(Dollars in thousands) 
U.S government and agencies obligations: 
Due within one year 
2.54 
$ 
895,052 
0.79 
$ 
1,127,041 
After 1 to 5 years 
1.45 
483,916 
0.96 
764,679 
After 5 to 10 years 
4.75 
14,985 
- 
- 
After 10 years 
3.97 
6,501 
4.73 
7,800 
2.19 
1,400,454 
(1) 
0.87 
1,899,520 
Puerto Rico government obligation: 
After 10 years 
(2)
- 
1,620 
- 
1,620 
MBS: 
Residential MBS: 
FHLMC 
1.72 
901,779 
1.58 
923,501 
GNMA 
2.50 
196,569 
2.47 
203,383 
FNMA 
1.90 
1,138,925 
1.69 
1,128,379 
CMOs 
3.94 
819,807 
2.92 
351,114 
Private Label MBS 
5.92 
3,266 
6.62 
4,195 
Commercial MBS 
2.35 
276,007 
2.65 
277,934 
Total MBS 
2.41 
3,336,353 
1.95 
2,888,506 
Other: 
Due within one year 
- 
- 
2.32 
1,000 
Government bonds: 
Due within one year 
4.94 
1,044 
5.07 
2,214 
After 1 to 5 years 
7.05 
54,611 
7.33 
61,289 
After 5 to 10 years 
4.78 
10,376 
5.79 
13,184 
After 10 years 
7.46 
14,870 
8.07 
15,755 
6.81 
80,901 
7.18 
92,442 
ACL on held-to-maturity debt securities 
- 
(733) 
- 
(802) 
Total debt securities 
2.41 
$ 
4,818,595 
1.65 
$ 
4,882,286 
(1) 
Includes approximately $566.3 million in callable
debt securities with an average yield of 1.52%,
of which approximately 58% 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
Corporations
net interest
income and
the Corporations
interest risk
management strategies.
Also, 
refer to Note 2 - Debt Securities for additional information regarding
the Corporations debt securities portfolio. 
(2) 
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. 
64 
RISK MANAGEMENT
General
Risks
are
inherent
in
virtually
all
aspects
of
the
Corporations
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 
Corporations
risk-taking activities are
consistent with the
Corporations
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 BanCorps
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. 
Risk Definition
Liquidity Risk 
Liquidity risk is
the risk to earnings
or capital arising
from the possibility
that the Corporation
will not have
sufficient cash to
meet 
its short-term liquidity
demands, such as
from deposit redemptions
or loan commitments.
See Liquidity Risk
and Capital Adequacy
below for further details. 
Interest Rate Risk 
Interest
rate
risk
is
the
risk
arising
from
adverse
movements
in
interest
rates.
See
Interest
Rate
Risk
Management
below
for 
further details. 
Market Risk 
Market
risk
is
the
risk
of
loss
in
the
value
of
assets
or
liabilities
due
to
changes
in
market
conditions,
including
movements
in 
market
rates or
prices, such
as interest
rates
or equity
prices. The
Corporation
evaluates market
risk together
with interest
rate risk. 
Both changes in market values
and changes in interest rates
are evaluated and forecasted. See
Interest Rate Risk Management
below 
for the effects of changes in interest rates on net interest income. 
Credit Risk
Credit risk
is the
risk arising
from a
borrowers or
a counterpartys
failure to
meet the
terms of
a contract
with the
Corporation or 
otherwise to perform as agreed. See Credit Risk Management
below for further details. 
Operational Risk 
Operational
risk
is
the
risk
arising
from
problems
with
the
delivery
of
services
or
products.
This
risk
is
a
function
of
internal 
controls,
information
systems,
third
party
vendors,
employees
and
operating
processes.
It
also
includes
risks
associated
with
the 
Corporations preparedness
for the occurrence
of an unforeseen event.
This risk is inherent across
all functions, products,
and services 
of the Corporation. See Operational Risk below for further details. 
Legal,
Regulatory and Compliance Risk
Legal
and
regulatory
risk is
the risk
arising
from
the Corporations
failure
to comply
with laws
or regulations
that can
adversely 
affect the Corporations
reputation and/or increase its exposure to litigation or penalties.
Reputational Risk
Reputational
risk
is
the
risk
arising
from
any
adverse
effect
on
the
Corporations
market
value,
capital,
or
earnings
arising
from 
negative public opinion,
whether true or not.
This risk affects the
Corporations
ability to establish new
relationships or services,
or to 
continue servicing existing relationships. 
65 
Model Risk 
Model risk
is the potential
for adverse
consequences from
decisions based
upon incorrect
or misused
model outputs
and reports
or 
based upon
an incomplete or
inaccurate model.
The use of
models exposes the
Corporation to some
level of model
risk. Model errors 
can
contribute
to
incorrect
valuations
and
lead
to
operational
errors,
inappropriate
business
decisions,
or
incorrect
financial
entries. 
The Corporation seeks to reduce model risk through rigorous model identification
and validation. 
Capital Risk 
Capital risk
is the
risk that
the Corporation
may lose
value on
its capital
or have
an inadequate
capital plan,
which would
result in 
insufficient capital
resources to meet
minimum regulatory requirements
(the Corporations
authority to operate
as a bank is
dependent 
upon the maintenance of adequate capital resources), support its credit
rating, or support its growth and strategic options.
Strategic Risk 
Strategic
risk
is
the
risk
arising
from
adverse
business
decisions,
poor
implementation
of
business
decisions,
or
lack
of 
responsiveness
to
changes
in
the
banking
industry,
and
operating
environment.
This
risk
is
a
function
of
the
compatibility
of
the 
Corporations strategic
goals, the business strategies
developed to achieve
those goals, the resources deployed
against these goals, and 
the quality of implementation. 
Information Technology
and Cybersecurity Risk 
Information technology
risk is
the risk
arising from
the loss of
confidentiality,
integrity,
or availability
of information
systems and 
risk
of
cyber
incidents
or
data
breaches.
It
includes
business
risks
associated
with
the
use,
ownership,
operation,
involvement, 
influence, and adoption of information technology within the Corporation. 
Risk Governance 
The
following
discussion
highlights
the
roles
and
responsibilities
of
the
key
participants
in
the
Corporations
risk
management 
framework: 
Board of Directors
The
Board
of Directors
oversees the
Corporations
overall
risk governance
program
with the
assistance
of the
Board
committees 
discussed below. 
Risk Committee 
The
Board
of
Directors
has
appointed
the
Risk
Committee
to
assist
the
Board
in
fulfilling
its
responsibility
to
oversee
the 
Corporations
management of
its company-wide
risk management
framework. The
committees
role is
one of
oversight, recognizing 
that
management
is
responsible
for
designing,
implementing,
and
maintaining
an
effective
risk
management
framework.
The 
committees primary responsibilities
are to: 
Review and discuss managements
assessment of the Corporations
aggregate enterprise-wide profile
and the alignment of the 
Corporations risk profile with
the Corporations strategic plan,
goals,
and objectives; 
Review and recommend to the Board the parameters and establishment of
the Corporations risk tolerance and risk
appetite; 
Receive
reports
from
management
and,
if
appropriate,
other
Board
committees,
regarding
the
Corporations
policies
and 
procedures
related
to
the
Corporations
adherence
to
risk
limits
and
its
established
risk
tolerance
and
risk
appetite
or
on 
selected risk topics;
Oversee the strategies,
policies, procedures, and
systems established by
management to identify,
assess, measure, and
manage 
the
major
risks
facing
the
Corporation,
which
may
include
an
overview
of
the
Corporations
credit
risk,
operational
risk, 
information
technology
risk,
compliance
risk,
interest
rate
risk,
liquidity
risk,
market
risk,
and
reputational
risk,
as
well
as 
managements capital management,
planning,
and process;
Oversee the Corporations
Retail Quality Assurance and Loan Review Program; 
66 
Oversee
managements
activities
with
respect
to
model
validation
of
capital
stress
testing,
model
risk
management,
vendor 
management, information technology risk and operational risk; 
Review and discuss with management risk assessments for new products
and services; 
Review periodically the scope and effectiveness of the
Corporations regulatory compliance policies
and programs; and 
Annually assess the Corporations
institutional insurance programs. 
The
Risk
Committee
also
receives
regular
reports
and
engages
in
discussions
throughout
the
year
on
the
effectiveness
of
the 
Corporate Information Security Program (CISP),
including its inherent risk, the roadmap for addressing
those risks, and the progress 
in
doing
so.
The
Risk
Committee
annually
reviews
and
approves
the
CISP
and
annually
receives
a
report
on
related
security 
safeguards in accordance with the Gramm-Leach-Bliley Act. 
Asset and Liability Committee
The
Board of
Directors has
appointed the
Asset and
Liability Committee
to assist
the Board
in its
oversight
of the
Corporations 
asset
and
liability
management
policies
related
to
the
management
of
the
Corporations
funds,
investments,
liquidity,
market
and 
interest rate risk, and the use of derivatives. In doing so, the committees
primary functions involve: 
The
establishment
of
a
process
to
enable
the
identification,
assessment,
and
management
of
risks
that
could
affect
the 
Corporations assets and liabilities management; 
The
identification
of
the
Corporations
risk
tolerance
levels
for
yield
maximization
relating
to
its
assets
and
liabilities 
management;
The evaluation
of the
adequacy,
effectiveness,
and
compliance
with the
Corporations
risk management
process relating
to 
the Corporations assets and liabilities management,
including managements
role in that process;
and 
Oversight of the Corporations liquidity
position and liquidity stress testing. 
Credit Committee 
The Board of
Directors has appointed
the Credit Committee to
assist the Board in
its oversight of the
Corporations policies
related 
to the Corporations lending
function, or credit management. The committees
primary responsibilities are to: 
Monitor the
performance and
quality of
the Corporations
credit portfolio
through the
review of
selected measures
of credit 
quality and trends and such other information as it deems appropriate; 
Oversee the effectiveness and administration
of credit-related policies through the review
of such processes, reports and other 
information as
it deems appropriate,
including the
loan-quality grading
and examination
process, internal
and external
audits 
and examinations
of the
Corporations
credit processes,
the incidence
of new
problem assets,
the frequency
and reasons
for 
credit policy exceptions, the loan review functions and the asset classification
process;
Review on an annual basis and recommend to the Board the lending authorities; 
Approve loans as required by the lending authorities approved by
the Board; and 
Report to the Board regarding credit management. 
67 
Audit Committee 
The Board of Directors has appointed
the Audit Committee to assist the
Board in fulfilling its responsibility to oversee
management 
regarding:
Oversight
of
the
charter,
strategic
plan
execution,
annual
internal
audit
plan
execution,
staffing,
budget
and
organizational 
structure of the internal audit function; 
The
conduct
and
integrity
of
the
Corporations
financial
reporting
to
any
governmental
or
regulatory
body,
stockholders, 
other users of the Corporations financial
reports and the public; 
The Corporations internal
control over financial reporting and disclosure controls and procedures; 
The
qualifications,
engagement,
compensation,
independence,
and
performance
of
the
Corporations
independent
auditors, 
their
conduct
of
the
annual
audit
of
the
Corporations
financial
statements,
and
their
engagement
to
provide
any
other 
services; 
The application of the Corporations
related parties transaction policy as established by the Board;
The application of the Corporations
code of business conduct and ethics as established by management
and the Board;
The preparation
of the
Audit Committee
report required
to be
included
in the
proxy statement
for the
Corporations
annual 
stockholders meeting by the rules of the SEC; 
The Corporations legal,
ethical compliance and fraud risk; 
Oversight responsibilities with respect to the Trust
Department and its fiduciary responsibilities. 
Corporate Governance and Nominating Committee 
The
Board
of
Directors
has
appointed
the
Corporate
Governance
and
Nominating
Committee
to
develop,
review,
and
assess 
corporate
governance
principles.
The
Corporate
Governance
and
Nominating
Committee
is
responsible
for
director
succession, 
orientation
and
compensation,
identifying
and
recommending
new
director
candidates,
overseeing
the
evaluation
of
the
Board
and 
management, annually
recommending to
the Board
the designation
of a
candidate to
hold the
position of
the Chairman
of the
Board, 
and
directing
and
overseeing
the
Corporations
executive
succession
plan.
In
addition,
the
Corporate
Governance
and
Nominating 
Committee is responsible for overseeing the Corporations
sustainability and environmental, social, and governance (ESG) policies. 
Compensation and Benefits Committee 
The
Board
of Directors
has appoint
ed the
Compensation
and Benefits
Committee
to oversee
compensation
policies and
practices 
including
the
evaluation
and
recommendation
to
the
Board
of
the
proper
and
competitive
salaries
and
incentive
compensation 
programs of the executive officers and key employees
of the Corporation.
Management Roles and Responsibilities 
While
the
Board
of
Directors
has
the
responsibility
to
oversee
the
risk
governance
program,
management
is
responsible
for 
implementing
the necessary
policies and
procedures,
and internal
controls. To
carry out
these responsibilities,
the Corporation
has a 
clearly
defined
risk governance
culture. To
ensure that
risk management
is communicated
at all
levels of
the Corporation,
and each 
area understands
its specific
role, the
Corporation has
established several
management
level committees
to support
risk oversight,
as 
follows:
Executive Risk Management Committee
The
Executive
Risk
Management
Committee
is
responsible
for
exercising
oversight
of
information
regarding
the
Corporations 
enterprise
risk
management
framework,
including
the
significant
policies,
procedures,
and
practices
employed
to
manage
the 
identified
risk
categories
(credit
risk,
operational
risk,
legal
and
regulatory
risk,
reputational
risk,
model
risk,
and
capital
risk).
In 
carrying
out
its
oversight
responsibilities,
each
committee
member
is
entitled
to
rely
on
the
integrity
and
expertise
of
those
people 
providing
information
to
the committee
and
on
the
accuracy
and
completeness
of
such
information,
absent
actual
knowledge
of
an 
inaccuracy. 
68 
The
Chief
Executive
Officer
appoints
the
Executive
Risk Management
Committee
and members
of
the Corporations
senior
and 
executive management have
the opportunity to
share their insights about
the types of risks
that could impede
the Corporations
ability 
to
achieve
its
business
objectives.
The
Chief
Risk
Officer
of
the
Corporation
directs
the
agenda
for
the
meetings
and
serves
as 
secretary
of
the
committee
and
maintains
the
minutes
on
behalf
of
the
committee.
The
General
Auditor
also
participates
in
the 
committee as an observer. 
The
committee
provides
assistance
and
support
to
the
Chief
Risk
Officer
to
promote
effective
risk
management
throughout
the 
Corporation.
The
Chief
Risk
Officer
reports
to
the
Committee
matters
related
to
the
enterprise
risk
management
framework
of
the 
Corporation, including, but not limited to: 
The risk governance structure; 
The risk assessments and profile of the Corporation;
The Corporations risk appetite statement
and risk tolerance;
The risk management
strategy and associated risk
management initiatives and
how both support the
business strategy 
and business model of the Corporation; and 
The Corporate Incident Response Program 
Other Management Committees
As
part
of
its
governance
framework,
the
Corporation
has
various
additional
risk
management-related
committees.
These 
committees are
jointly responsible
for ensuring
adequate risk
measurement and
management in
their respective
areas of authority.
At 
the
management
level,
these
committees
include
the
Managements
Investment
and
Asset
Liability
Committee
(the
MIALCO), 
Information Technology
Steering Committee,
Bank Secrecy
Act Committee,
Credit Committees
(consisting of
a Credit
Management 
Committee
and
a
Delinquency
Committee),
Vendor
Management
Committee,
ESG
Committee,
Community
Reinvestment
Act 
Executive
Committee,
Anti-Fraud
Committee,
Regulatory
Compliance
Committee,
Regulatory
Reporting
Committee,
Complaints 
Management
Committee,
Project
Portfolio
Management
Committee,
Current
Expected
Credit Losses
(CECL)
Committee,
Capital 
Planning Committee, Business Continuity Committee, Emergency
Committee, and Data Governance Council. 
Officers
As part of its governance framework, the following officers
play a key role in the Corporations risk
management process: 
The CEO
is responsible
for
the overall
risk governance
structure of
the Corporation.
The CEO
is ultimately
responsible
for 
business strategies, strategic objectives, risk management priorities, and
policies. 
The General Auditor
is responsible for leading
the corporate internal audit
function and reporting matters
directly to the Audit 
Committee and administratively to the Legal Counsel. 
The
Chief Operating
Officer
(COO)
manages
the Corporations
operational
framework,
including
information
technology 
(IT),
facilities,
banking
operations,
corporate
security,
and
enterprise
architecture.
The
COO,
together
with
the
Chief 
Information
Officer
(CIO),
jointly
oversee
the
effective
and
efficient
execution
of
the
various
technology
initiatives
to 
support
the
Corporations
growth
and
improve
overall
efficiency.
The
Chief
Information
Security
Officer
(CISO),
who 
reports to
the Security
and Facilities
Management Director,
leads the
Corporate Security
Office (CSO),
which manages
the 
controls
designed
to
identify,
detect,
protect
against,
respond
to,
and
recover
from
physical
and
logical
events,
including 
cybersecurity
threats and
cybersecurity incidents,
and
is responsible
for
developing
and implementing
a CISP
and
reporting 
regularly to the
Risk Committee. The
COO together with
the Chief Lending
Officer manages and
oversees the areas
of Credit 
Risk
and
Credit
Administration
including
the
approval
of
loans
and
reporting
to
the
Board
regarding
Credit
Management 
activities
as required
by
lending
authorities.
The COO
jointly
with
the
Chief
Lending
Officer,
the Credit
Risk Director,
the 
Loan Review
Manager and
other Senior
Executives are
responsible for
managing and
executing the
Corporations
credit risk 
program.
The
credit
risk
program
aims
to
i)
maintain
the
quality
of
the
Corporations
credit
portfolio,
ii)
review
the
trends 
affecting the portfolio, and iii) oversee the effectiveness
and administration of credit-related policies.
69 
The
Chief
Financial
Officer
(CFO),
together
with
the
Corporations
Treasurer
and
the
Asset
and
Liability
Management 
(ALM)
Director,
manage
the
Corporations
interest
rate
and
market
and
liquidity
risk
programs,
including
the
liquidity 
stress testing
and policy
limits. The
CFO supervises
Capital Planning
and Capital
Stress Testing.
The CFO,
jointly with
the 
Chief Accounting
Officer (CAO)
and the
Corporate Controller,
are responsible
for the development
and implementation
of 
the
Corporations
accounting
policies
and
practices
and
the
review
and
monitoring
of
critical
accounts
and
transactions
to 
ensure that they are reported in accordance with GAAP and the applicable
regulatory requirements for financial and regulatory 
reporting
purposes.
The
CFO,
jointly
with
the
CAO,
are
responsible
for
the
management
of
the
CECL/allowance
quarterly 
financial assessment.
The CRO,
who reports
to the
CFO, is
responsible for
the oversight
of the
risk management
of the
Corporation as
well as
the 
risk
governance
processes.
The
CRO
monitors
key
risks
and
manages
the
operational
risk
program.
The
CRO
provides
the 
leadership and strategy for the
Corporations risk
management and monitoring activities and
is responsible for the oversight of 
regulatory
compliance,
loan
review,
model
risk,
and
operational
risk
management.
The
CRO
reports
regularly
to
the
Risk 
Committee
of
the
Board
on
risk
management
activities
including
risk
assessments,
risk
tolerances,
regulatory
matters,
and 
emerging
risks. The
CRO also
supervises
the Corporate
Incident
Response Program.
The Internal
Controls
and
Model Risk 
Director,
IT
Risk
Director,
Retail
Quality
Assurance
Manager,
Governance
and
Regulatory
Affairs
Director
and
Corporate 
Risk Managers assist the CRO in
the monitoring of key risks and oversight of
risk management practices. The CRO assists
the 
CFO
in
the
review
and
oversight
of
the
Corporations
internal
control
over
financial
reporting
and
disclosure
controls
and 
procedures. The CRO reports functionally to the BOD Risk Committee and
administratively to the CFO. 
The Corporate Strategic
and Business Development
Director is responsible
for the development
of the Corporations
strategic 
and
business
plan,
by
coordinating
and
collaborating
with
the
executive
team
and
all
corporate
groups
involved
with
the 
strategic and business planning process. 
The
Corporate
Strategy
and
Investor
Relations
Division
Director
is
responsible
for
managing
communications
with
the 
investor
community
and
sell-side
research
analysts
and
for
coordinating
and
collaborating
with
the
executive
team
and
all 
corporate groups involved with the adequate execution of the strategic and
business planning process.
The
Chief
Consumer
Officer
and
Corporate
Chief
of
Staff
is
responsible
for
the
oversight
of
the
mortgage,
unsecured 
consumer lending,
auto, leasing,
and insurance
lines of
business, as
well as
the oversight
of the
Corporations
human capital 
strategic plan.
The Human
Resources Director
supports the
Chief Consumer
Officer
and Corporate
Chief of
Staff
in leading 
the human capital and talent management efforts.
The
Compliance
Director
is
responsible
for
oversight
of
regulatory
compliance.
The
Compliance
Director
implements
an 
enterprise-wide compliance
risk assessment,
and monitors
compliance with
significant regulations.
The Compliance
Director 
is responsible for building awareness of and educating business units and subsidiaries
on regulatory risks. 
The General
Counsel is
responsible
for
the oversight
of legal
risks, including
matters such
as contract
structuring,
litigation 
risk,
and
all
legal-related
aspects
of
the
Corporations
business.
The
General
Counsel
is
also
responsible
of
managing
and 
overseeing
the Regulatory
Compliance and
Bank Secrecy
Act (BSA)
business units.
The Corporate
Affairs Officer
assists 
the
General
Counsel
with
various
legal
areas,
including,
but
not
limited
to
SEC
reporting
matters,
insurance
coverage
and 
liability, and the Sustainability
Program. 
Effective
June
30,
2026,
Orlando
Berges
will
retire
from
the
Corporation,
concluding
his
service
as
CFO.
The
Corporation
has 
appointed
Said
Ortiz, currently
serving
as CAO,
to succeed
Mr.
Berges
as CFO,
effective
July 1,
2026.
For
additional
information, 
please refer to our Current Report on Form 8-K, which was filed with the
SEC on February 9, 2026. 
70 
Liquidity
Risk
and
Capital
Adequacy,
Interest
Rate
Risk
Management,
Credit
Risk
Management,
Operational
Risk,
Legal 
and Compliance Risk and Concentration Risk 
The
following
discussion
highlights
First
BanCorp.s
adopted
policies
and
procedures
for
liquidity
risk
and
capital
adequacy, 
interest rate risk, credit risk, operational risk, legal and compliance risk,
and concentration risk. 
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
Corporations
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
Corporations
Board
of
Directors
is
responsible
for
overseeing
managements 
establishment
of
the
Corporations
liquidity
policy,
as
well
as
approving
operating
and
contingency
procedures
and
monitoring 
liquidity
on
an
ongoing
basis.
The
Managements
Investment
and
Asset
Liability
Committee
(MIALCO),
which
reports
to
the 
Boards
Asset
and
Liability
Committee,
uses
measures
of
liquidity
developed
by
management
that
involve
the
use
of
several 
assumptions
to
review
the
Corporations
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
CEO,
the
CFO,
the
CRO,
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
COO.
The 
Treasury
and
Investments
Division
is
responsible
for
planning
and
executing
the
Corporations
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
Controllers
Department
is
responsible
for
calculating
the
liquidity
measurements
used
by
the 
Treasury
and
Investment
Division
to
review
the
Corporations
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. 
The
Corporation
develops
and
maintains
contingency
funding
plans.
These
plans
evaluate
the
Corporations
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
Corporations
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
Boards
Asset and 
Liability Committee reviews and approves these plans on an annual basis. 
71 
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 $658.6
million as
of December
31, 2025,
compared to
$1.2 billion
as of
December 31,
2024. When
adding 
$1.9 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
$2.6
billion
as
of
December
31,
2025,
or
13.54%
of
total 
assets, compared to $2.4 billion, or 12.54% of total assets as of December
31, 2024.
In addition
to the aforementioned
$2.6 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 19.39%
of total assets
as of December
31, 
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
$2.6
billion 
available
for
funding
under
the
FEDs
Borrower-in-Custody
(BIC)
Program
as
of
each
of
December
31,
2025
and
2024
as
an 
additional source of liquidity.
Total loans
pledged to the FED BIC Program
amounted to $3.4 billion as
of each of December 31,
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 December
31, 2025, the
Corporation had
$6.3 billion
available to meet
liquidity needs, or
132% 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
87.5%
of the
Banks
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. 
72 
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.
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: 
December 31, 2025 
December 31, 2024 
(In thousands) 
Financial instruments whose contract amounts represent credit risk: 
Commitments to extend credit: 
Construction undisbursed funds 
$ 
191,879 
$ 
283,302 
Unused credit card lines
760,531 
787,849 
Unused personal lines of credit
34,932 
37,140 
Commercial lines of credit 
1,146,541 
1,053,938 
Letters of credit: 
Commercial letters of credit 
32,252 
41,738 
Standby letters of credit 
21,430 
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 Corporations
liquidity position.
These transactions
are designed
to (i)
meet the
financial needs
of 
customers, (ii) manage the
Corporations credit,
market and liquidity risks, (iii)
diversify the Corporations
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 December 
31,
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. 
73 
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
Corporations
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 FEDs 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
Corporations
available 
borrowing capacity and
efforts to grow
core deposits will be
adequate to provide
the necessary funding
for the Corporations
business 
plans in the next 12 months and beyond. 
The Corporations principal sources of
funding are discussed below: 
Deposits 
The following table presents the composition of total deposits as of the indicated
dates: 
As of December 31, 
2025 
2024 
(Dollars in thousands) 
Interest-bearing checking accounts 
$ 
3,512,649 
$ 
4,308,116 
Interest-bearing saving accounts 
3,452,192 
3,530,382 
Time deposits 
4,155,886 
3,485,262 
Interest-bearing deposits 
(1)
11,120,727 
11,323,760 
Non-interest-bearing deposits 
5,549,416 
5,547,538 
Total 
$ 
16,670,143 
$ 
16,871,298 
Interest-bearing deposits: 
Average balance
outstanding 
$ 
11,291,129 
$ 
11,194,046 
Weighted average
rate during the period on interest-bearing deposits 
2.11% 
2.26% 
Non-interest-bearing deposits: 
Average balance
outstanding 
$ 
5,389,187 
$ 
5,351,124 
(1) 
The weighted-average interest rate on total interest-bearing deposits
as of December 31, 2025 and 2024 was 2.07% and 2.18%,
respectively.
Retail
and
commercial
core
deposits
The
Corporations
deposit
products
include
regular
saving
accounts,
demand
deposit 
accounts, money market accounts,
and retail CDs. As of December 31,
2025 and 2024, the Corporations
core deposits, which exclude 
government
deposits
and
brokered
CDs,
totaled
$13.1
billion
and
$12.9
billion,
respectively.
The
$193.3
million
increase
in
such 
deposits
was
driven
by
increases
of
$277.1
million
in
the
Puerto
Rico
region,
partially
offset
by
an
$89.9
million
decrease
in
the 
Florida region.
This increase
includes a $418.0
million increase
in time
deposits, and
a $34.6 million
increase in non-interest-bearing 
deposits,
partially offset by a $259.3 million decrease in interest-bearing non
-maturity deposits.
Government
deposits
(fully
collateralized)
As
of
December
31,
2025,
the
Corporation
had
$2.5
billion
of
Puerto
Rico
public 
sector deposits
($2.3 billion
in transactional
accounts and
$225.8 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
December 31, 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. 
The
uninsured
portions of
government
deposits were
collateralized
by securities
and
loans with
an amortized
cost of
$3.0
billion 
and $3.7 billion
as of December
31, 2025 and
2024, respectively,
and an estimated
market value of
$2.8 billion and
$3.3 billion as
of 
December
31, 2025
and 2024,
respectively.
In addition
to securities
and
loans, as
of December
31, 2025
and 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. 
74 
Estimate of
Uninsured
Deposits
As of
December
31,
2025
and
2024,
the estimated
amounts
of uninsured
deposits
totaled
$7.5 
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
December
31,
2025
and
2024,
the 
uninsured portion
of fully
collateralized government
deposits amounted
to $2.7
billion and
$3.3 billion,
respectively.
Excluding fully 
collateralized government deposits, the estimated amounts
of uninsured deposits amounted to $4.8 billion,
which represents
29.79%
of 
total deposits (excluding brokered CDs), as of December 31, 2025,
compared to $4.8 billion, or 29.36%, as of December 31, 2024.
The
estimated
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 December
31, 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 
$ 
622,714 
$ 
162,414 
$ 
265,859 
$ 
188,645 
$ 
1,239,632 
Other uninsured time deposits 
$ 
19,858 
$ 
15,429 
$ 
14,392 
$ 
4,029 
$ 
53,708 
Brokered
CDs
Total
brokered
CDs
increased
by
$115.4
million
to
$593.6
million
as
of
December
31,
2025,
primarily
in
the 
Florida region.
The increase reflects
$371.8 million
of new issuances
with original
average maturities
of approximately
1.2 years
and 
an all-in cost
of 4.11%,
partially offset by
maturing brokered CDs
amounting to $256.4
million with an all-in
cost of 4.76%
that were 
paid off during 2025. 
The average remaining term to maturity of the brokered CDs outstanding
as of December 31, 2025 was approximately 1.0 year.
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 
December 31, 2025: 
Total
Weighted-average 
interest rate % 
(In thousands) 
Three months or less 
$ 
119,459 
4.30 
Over three months to six months 
92,153 
4.17 
Over six months to one year 
182,339 
3.97 
Over one year to two years
141,187 
3.85 
Over two years to three years
33,097 
4.38 
Over three years to four years
9,848 
4.05 
Over four years to five years
5,950 
4.63 
Over five years
9,522 
4.60 
Total 
$ 
593,555 
4.08 
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 years ended December 31, 2025, 2024
and 2023. 
75 
Borrowings 
As of December 31, 2025, total borrowings amounted to $290.0 million,
compared to $561.7 million as of December 31, 2024. 
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
December
31,
2025
and
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
December
31,
2025,
$190.0
million
were 
pledged with
investment securities and
$100.0 million
were pledged
with mortgage
loans. As of
December 31,
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 December 31, 2025: 
Total 
Weighted-average 
interest rate % 
(In thousands) 
Three months or less 
$ 
90,000 
4.49 
Over one year to two years 
200,000 
4.25 
Total 
(1)
$ 
290,000 
4.32 
(1) Average remaining term to maturity
of 1.36 years. 
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 December 31, 2025
and 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. 
Trust-Preferred
Securities 
In 2004,
FBP Statutory
Trusts I
and II,
wholly-owned by
the Corporation
and not
consolidated in
the 
Corporations
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
Corporations
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 24 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 December
31, 
2025,
the
Corporation
had
approximately
$2.6
billion
fully
available
for
funding
under
the
FEDs
Discount
Window
based
on 
collateral pledged at the FED. 
Effect of Credit Ratings on Access to Liquidity 
The
Corporations
liquidity
is
contingent
upon
its
ability
to
obtain
deposits
and
other
external
sources
of
funding
to
finance
its 
operations.
The Corporations
current
credit ratings
and any
downgrade
in credit
ratings can
hinder the
Corporations
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 
Corporations 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 Corporations
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 Corporations
ability 
to access new non-deposit sources of funding, however,
could be adversely affected by credit downgrades. 
76 
As
of
the
date
hereof,
the
Corporations
long-term
issuer
credit
ratings
are
BB+
from
Fitch
and
BBB
from
Kroll
Bond
Rating 
Agency (KBRA).
As of
the date
hereof, FirstBanks
long-term issuer
credit ratings
are BB+
from Fitch,
which is
one notch
below 
the minimum
BBB- level required
to be considered
investment grade,
and BBB+ from
KBRA, which is
considered investment
grade. 
The Corporations
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 Corporations
securities. Each rating should 
be evaluated independently of any other rating. 
Cash Flows
Cash
and
cash
equivalents
were
$658.6
million
as
of
December
31,
2025,
a
decrease
of
$500.8
million
when
compared
to 
December
31,
2024.
The
following
discussion
highlights
the
major
activities
and
transactions
that
affected
the
Corporations
cash 
flows during 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
Corporations
ability to
generate 
cash through
short and long-term
borrowings will be
sufficient to
fund the Corporations
operating liquidity
needs for the
foreseeable 
future. 
For the years ended
December 31, 2025 and 2024,
net cash provided by operating
activities was $448.6 million
and $404.2 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,
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 Corporations
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 year ended December
31, 2025, net cash used in
investing 
activities was
$170.4 million,
primarily due
to purchases
of U.S.
agencies MBS
and debentures
and U.S.
Treasury
securities,
as well 
as
net
disbursements
on
loans
held
for
investment,
partially
offset
by
maturities
of
U.S.
agencies
debentures
and
U.S.
Treasury 
securities,
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 during the first quarter of 2025. 
For
the
year
ended
December
31,
2024,
net
cash
provided
by
investing
activities
was
$136.2
million,
primarily
due
to
principal 
repayments
of U.S.
agencies MBS
and
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 and finance leases
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 
U.S. agencies MBS during 2024. 
Cash Flows from Financing Activities
The
Corporations
financing
activities
primarily
include
the
receipt
of
deposits
and
the
issuance
of
brokered
CDs,
the
issuance 
and/or repayment of
long-term borrowings,
the issuance of equity
instruments, return of
capital, and activities
related to its short
-term 
funding.
For
the
year
ended
December
31,
2025,
net
cash
used
in
financing
activities
was
$779.0
million,
mainly
reflecting
the 
repayments
of
long-term
borrowings,
consisting
of
$210.0
million
in
FHLB
advances
and
the
redemption
of
junior
subordinated 
debentures,
capital returned to stockholders,
and a decrease in total
deposits.
See Note 24 
First BanCorp. (Holding
Company Only) 
Financial
Information
to the
audited
consolidated
financial statements
included
in Part
II, Item
8 of
this Form
10-K, for
additional 
information on the redemption of junior subordinated debentures. 
For the year ended December
31, 2024, net cash used
in financing activities was $44.1
million, mainly reflecting capital
returned to 
stockholders and the redemption of junior subordinated debentures
,
partially offset by a net increase in deposits. 
77 
Capital 
As of
December 31,
2025, the
Corporations
stockholders equity
was $2.0
billion, an
increase of
$297.6 million
from December 
31, 2024. The increase was driven by net income generated
in 2025 and a $212.4 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
$150.0
million
in
common
stock
repurchases
and
$115.7
million,
or
$0.72
per 
common share, in common stock dividends declared in 2025. 
On January
26, 2026,
the Corporations
Board of
Directors declared
a quarterly
cash dividend
of $0.20
per common
share, which 
represents
an
increase
of
$0.02
per
common
share,
or
an
11%
increase,
compared
to
its
most
recent
quarterly
dividend
paid
in 
December
12, 2025.
The dividend
is payable
on March
13, 202
6
to shareholders
of record
at the
close of
business on
February
26, 
2026. The
Corporation intends
to continue
to pay
quarterly dividends
on common
stock. However,
the Corporations
common stock 
dividends, including
the declaration,
timing, and amount,
remain subject to
consideration and
approval by the
Corporations
Board of 
Directors at the relevant times. 
On July 22, 2024, the Corporation announced that its Board of
Directors had approved a repurchase program authorizing up
to $250 
million
in
repurchases,
which
could
include
common
stock
and/or
junior
subordinated
debentures.
Under
this
program,
the 
Corporation
repurchased
approximately
7.1
million
shares
of
common
stock
for
a
total
cost
of
$138.3
million
during
2025
and 
redeemed
$111.7
million of
junior subordinated
debentures,
of which
$61.7 million
were redeemed
during 2025.
These transactions 
completed the $250 million repurchase program. 
Furthermore,
on
October
22,
2025,
the
Corporation
announced
that
its
Board
of
Directors
approved
a
new
stock
repurchase 
program
authorizing up
to $200
million of
its outstanding
common
stock, which
it expects
to execute
through the
end of
the fourth 
quarter of
2026. Under
this program,
the Corporation
repurchased approximately
0.6 million
shares of
common stock
for a
total cost 
of
$11.7
million
during
2025.
For
more
information,
see
Part
II,
Item
5,
Market
for
Registrants
Common
Equity
and
Related 
Stockholder Matters and Issuer Purchases of Equity Securities, of this Form
10-K. 
From January
1, 2026
to February
20, 2026,
the Corporation
repurchased approximately
0.1 million
shares of
common stock
for a 
total cost of
$1.1 million.
Therefore, the
Corporation has remaining
authorization of
approximately $187.2
million as of
February 20, 
2026. 
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
Corporations
tangible
common
equity
and
tangible
assets,
non-GAAP
financial 
measures, to total equity and total assets, respectively,
as of the indicated dates: 
December 31, 2025 
December 31, 2024 
(In thousands, except ratios and per share information) 
Total common equity
- GAAP 
$ 
1,966,865 
$ 
1,669,236 
Goodwill 
(38,611) 
(38,611) 
Other intangible assets 
(3,458) 
(6,967) 
Tangible common
equity - non-GAAP 
$ 
1,924,796 
$ 
1,623,658 
Total assets - GAAP 
$ 
19,132,892 
$ 
19,292,921 
Goodwill 
(38,611) 
(38,611) 
Other intangible assets 
(3,458) 
(6,967) 
Tangible assets - non
-GAAP 
$ 
19,090,823 
$ 
19,247,343 
Common shares outstanding 
156,619 
163,869 
Tangible common
equity ratio - non-GAAP 
10.08% 
8.44% 
Tangible book value
per common share - non-GAAP 
$ 
12.29 
$ 
9.91 
See Note 23
Regulatory
Matters, Commitments and
Contingencies to
the audited
consolidated financial
statements included
in 
Part II,
Item 8
of this
Form 10-K
for the
regulatory capital
positions of
the Corporation
and FirstBank
as of
December 31,
2025 and 
2024, respectively.
78 
The
Puerto
Rico
Banking
Law
of
1933,
as
amended
(the
Puerto
Rico
Banking
Law),
requires
that
a
minimum
of
10%
of 
FirstBanks
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.
During the years ended
December 31, 2025, 2024
and 
2023, the Corporation transferred $32.3 million, $30.6
million and $31.1 million, respectively,
to the legal surplus reserve.
FirstBanks 
legal
surplus
reserve,
included
as
part
of
retained
earnings
in
the
Corporations
consolidated
statements
of
financial
condition, 
amounted to $262.5 million as of December 31, 2025 and $230.2 million as of
December 31, 2024. 
Capital risk is the risk that
our capital is insufficient to
support our business activities under normal
or stressed market conditions or 
we
face
capital
reductions
or
risk-weighted
assets
increases,
including
from
new
or
revised
rules
or
changes
in
interpretations
of 
existing rules, and
are therefore unable to
meet our internal capital
targets or external
regulatory capital requirements.
To
mitigate this 
risk,
we
maintain
a
comprehensive
capital
management
framework
that
defines
objectives,
establishes
guidelines,
and
incorporates 
stress
testing
to
ensure
adequate
capitalization
even
under
stressed
conditions.
Governance
of
capital
planning
is
overseen
by
the 
Capital
Planning
Committee,
chaired
by
the CEO
and
including
the
CFO, CRO,
and
the
Corporate
Strategy
and
Investor Relations 
Officer.
In
addition,
committees
and
members
of
senior
management
are
responsible
for
the
ongoing
monitoring
of
our
capital 
adequacy
and
evaluating
current and
future regulatory
capital requirements,
reviewing
the results
of
our
capital
planning
and
stress 
tests processes and the results
of our capital models, and
reviewing our contingency funding
and capital plan and key
capital adequacy 
metrics, including regulatory capital ratios.
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 Corporations
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
Corporations
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. 
79 
As of
December 31,
2025, the
Corporation forecasted
the 12-month
net interest
income assuming
December 31,
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
December
31,
2025,
as compared
with
December
31,
2024,
reflects a
decrease
of 69
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 23
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
67
bps
in
the
short-term
sector
of
the 
curve, a decrease of 72 bps in the medium-term sector of the curve,
and a decrease of 14 bps in the long-term sector of the curve. 
The following table presents the results of the static simulations as of December 31, 2025
and 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) 
December 31, 2025 
December 31, 2024 
Gradual Change in Interest Rates: 
+ 300 bps ramp 
3.73 
% 
3.05 
% 
+ 200 bps ramp 
2.52 
% 
2.04 
% 
- 300 bps ramp 
-5.31 
% 
-4.79 
% 
- 200 bps ramp 
-3.49 
% 
-3.15 
% 
Immediate Change in Interest Rates: 
+ 200 bps shock 
4.44 
% 
3.51 
% 
- 200 bps shock 
-8.47 
% 
-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
December
31,
2025
and
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
lower
sensitivity
in
the
liabilities
side
primarily
driven
by
lower
balances
in
government
non-
maturity
deposits,
which
are
market
linked.
Additionally,
there
was
a
slightly
higher
sensitivity
in
the
assets
side
due
to
earlier 
scheduled
maturities of
U.S. government
and agencies
obligations
which
were reinvested
in short-term
U.S. Treasury
securities and 
MBS, coupled with growth in the C&I loan portfolio, offset by
a lower interest-bearing cash position. 
Under
the
static
simulation,
the
Corporation
assumes
that
maturing
instruments
are
replaced
with
similar
instruments
at
the 
repricing rate upon maturity.
The Corporations 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. 
80 
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 Corporations
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 Corporations
credit risk 
goals and objectives. Management has documented these goals and objectives
in the Corporations 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
Corporations
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)
managements
assessment
of
economic
forecasts
used
in
the
model
and
how
those
forecasts
align
with 
managements
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 Corporations
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
December
31,
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 Boards funds
rate. 
81 
As of
December 31,
2025, the
Corporations
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 1.32%
and 1.72% for the year 2026
and for the 
year
2027,
respectively,
compared
to an
average
projected
appreciation
of 4.42%
and
6.96%
for
the year
2026
and
for the 
year 2027, respectively,
as of December 31, 2024.
Regional
House Price Index
forecast in Puerto
Rico (purchase only
prices) is expected
to increase by
2.72% for the
next two 
years as of December 31, 2025,
compared to an increase of 2.13% for
the first two years of the projection
as of December 31, 
2024.
For the Florida region,
the House Price Index forecast
as of December 31,
2025 and 2024 was
projected to decrease by 
0.23% and 1.72%, respectively,
for the first two years of the projection.
Average
regional unemployment
rate in
Puerto Rico
is forecasted
at 6.38%
for the
year 2026
and 6.42%
for the
year 2027, 
compared to
6.21% for
the year
2026
and 5.94%
for the
year 2027
as of
December 31,
2024. For
the Florida
region and
the 
U.S. mainland, average unemployment
rate is forecasted at 4.93%
and 5.36%, respectively,
for the year 2026,
and 4.71% and 
5.18%, respectively, for
the year 2027, compared to 4.15% and 4.60%, respectively,
for the year 2026, and 3.52% and 3.99%, 
respectively, for the
year 2027, as of December 31, 2024. 
Annualized
change
in
GDP
in
the
U.S.
mainland
of
1.31%
for
the
year
2026
and
1.63%
for
the
year
2027,
compared
to 
1.91%
for the year 2026 and 2.40% for the year 2027, 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
December 31,
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 6.75%
for the
year 2026,
compared to
6.38%
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 December
31, 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
$43 million at December 31, 
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
December 31, 2025. 
As
of
December
31,
2025,
the
ACL
for
loans
and
finance
leases
was
$249.0
million,
an
increase
of
$5.1
million,
from
$243.9 
million as of December 31,
2024. The increase was mainly
related to the ACL for
C&I loans, which increased by
$8.3 million, mainly 
due to loan growth, partially
offset by improved financial
performance of certain commercial borrowers.
Also, the ACL for residential 
mortgage loans
increased by
$0.4 million
driven by
loan growth,
partially offset
by improvements
in macroeconomic
variables, such 
as the
unemployment rate
and the
House 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. 
Meanwhile, the
ACL for
consumer loans
decreased by
$6.9 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.
The ratio
of the
ACL for
loans and
finance leases
to total
loans held
for investment
decreased to
1.90%
as of
December 31,
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 
1.41%
as
of
December
31,
2025,
driven
by
improvements
in
macroeconomic
variables
and
updated
historical
loss 
experience.
82 
The ACL
to total
loans ratio
for the
construction loan
portfolio increased
from 1.67%
as of
December 31,
2024 to
2.14% 
as of
December 31,
2025, driven
by the
aforementioned
deterioration
in the
economic outlook
of 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 
0.93%
as
of
December
31,
2025,
driven
by
the
aforementioned
deterioration
in
the
commercial
real
estate
property 
performance
and
the
forecasted
CRE
price
index,
and
updated
historical
prepayment
experience,
partially
offset
by 
improved financial performance of certain commercial borrowers. 
The
ACL to
total loans
ratio for
the C&I
loan portfolio
increased
from
0.98%
as of
December
31,
2024
to 1.12%
as of 
December 31, 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 December 31, 2025,
mainly due to the aforementioned
improvements in macroeconomic variables
and a change in asset 
mix due to the 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 269.05%
as of
December 31, 
2025, compared to 278.90%
as of December 31, 2024. 
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. 
Year Ended December
31, 
2025 
2024 
2023 
(Dollars in thousands) 
ACL for loans and finance leases, beginning of period 
$ 
243,942 
$ 
261,843 
260,464 
Impact of adoption of ASU 2022-02 
- 
- 
2,116 
Provision for credit losses - (benefit) expense: 
Residential mortgage 
233 
(16,225) 
(6,866) 
Construction 
1,494 
(1,912) 
1,408 
Commercial mortgage 
1,230 
(10,717) 
(2,086) 
C&I 
7,667 
(4,749) 
6,372 
Consumer loans and finance leases 
75,282 
96,464 
67,816 
Total provision for credit losses
- expense 
85,906 
62,861 
66,644 
Charge-offs: 
Residential mortgage 
(1,131) 
(1,971) 
(3,245) 
Construction 
- 
- 
(62) 
Commercial mortgage 
(92) 
- 
(1,133) 
C&I 
(499) 
(2,956) 
(6,936) 
Consumer loans and finance leases 
(102,197) 
(108,901) 
(76,726) 
Total charge offs 
(103,919) 
(113,828) 
(88,102) 
Recoveries: 
Residential mortgage 
1,315 
1,453 
2,692 
Construction 
354 
131 
1,951 
Commercial mortgage 
247 
533 
786 
C&I
1,214 
6,743 
841 
Consumer loans and finance leases 
(1)
19,978 
24,206 
14,451 
Total recoveries 
23,108 
33,066 
20,721 
Net charge-offs 
(80,811) 
(80,762) 
(67,381) 
ACL for loans and finance leases, end of period 
$ 
249,037 
$ 
243,942 
261,843 
ACL for loans and finance leases to period-end total loans
held for investment 
1.90% 
1.91% 
2.15% 
Net charge-offs to average loans outstanding
during the period 
(2)
0.63% 
0.65% 
0.58% 
Provision for credit losses - expense for loans and finance
leases to net charge-offs during the period 
1.06x 
0.78x 
0.99x 
(1) 
For the years ended December 31, 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 2 bps and 9 bps for the years ended December 31, 2025 and 2024, respectively. 
83 
The following tables set forth information concerning the composition of the
Corporation's loan portfolio and related ACL by loan 
category, and the percentage
of loan balances in each category to the total of such loans as of the indicated dates: 
As of December 31, 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 
$ 
2,908,302 
$ 
265,568 
$ 
2,554,252 
$ 
3,688,358 
$ 
3,708,876 
$ 
13,125,356 
Percent of loans in each category to total loans 
22 
% 
2 
% 
19 
% 
28 
% 
29 
% 
100 
% 
Allowance for credit losses 
$ 
41,071 
$ 
5,672 
$ 
23,832 
$ 
41,416 
$ 
137,046 
$ 
249,037 
Allowance for credit losses to amortized cost 
1.41 
% 
2.14 
% 
0.93 
% 
1.12 
% 
3.70 
% 
1.90 
% 
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
December
31,
2025,
the
ACL
for
off-balance
sheet 
credit exposures decreased by $0.1 million to $3.0 million, when compared
to December 31, 2024. 
Allowance for Credit Losses for Debt Securities
As of December 31, 2025, the ACL for debt securities was $1.5
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
Part II, Item 8
of this Form 10-K
for information on
the policies followed by
the 
Corporation to classify loans in nonaccrual status or 90 days and
still accruing. 
84 
The following table shows non-performing assets by geographic segment as of
the indicated dates: 
December 31, 2025 
December 31, 2024 
(In thousands) 
Puerto Rico: 
Nonaccrual loans held for investment: 
Residential mortgage 
$ 
12,637 
$ 
16,854 
Construction 
4,581 
403 
Commercial mortgage 
1,913 
2,716 
C&I 
27,211 
19,595 
Consumer loans and finance leases 
20,891 
22,538 
Total nonaccrual loans held for investment 
67,233 
62,106 
OREO 
6,661 
13,691 
Other repossessed property 
12,216 
11,637 
Other assets 
(1)
1,620 
1,620 
Total non-performing assets 
$ 
87,730 
$ 
89,054 
Past due loans 90 days and still accruing 
$ 
30,643 
$ 
39,307 
Virgin Islands: 
Nonaccrual loans held for investment: 
Residential mortgage 
$ 
5,407 
$ 
6,555 
Construction 
955 
962 
Commercial mortgage 
6,469 
8,135 
C&I 
644 
919 
Consumer loans 
529 
205 
Total nonaccrual loans held for investment 
14,004 
16,776 
OREO 
(2)
861 
3,615 
Other repossessed property 
173 
219 
Total non-performing assets 
$ 
15,038 
$ 
20,610 
Past due loans 90 days and still accruing 
$ 
1,270 
$ 
3,083 
United States: 
Nonaccrual loans held for investment: 
Residential mortgage 
$ 
11,125 
$ 
8,540 
C&I 
187 
- 
Consumer loans 
14 
45 
Total nonaccrual loans held for investment 
11,326 
8,585 
Other repossessed property 
- 
3 
Total non-performing assets 
$ 
11,326 
$ 
8,588 
Total: 
Nonaccrual loans held for investment: 
Residential mortgage 
$ 
29,169 
$ 
31,949 
Construction 
5,536 
1,365 
Commercial mortgage 
8,382 
10,851 
C&I 
28,042 
20,514 
Consumer loans and finance leases 
21,434 
22,788 
Total nonaccrual loans held for investment 
92,563 
87,467 
OREO 
7,522 
17,306 
Other repossessed property 
12,389 
11,859 
Other assets 
(1)
1,620 
1,620 
Total non-performing assets 
$ 
114,094 
$ 
118,252 
Past due loans 90 days and still accruing 
(3) (4) (5) (6)
$ 
31,913 
$ 
42,390 
Non-performing assets to total assets
0.60% 
0.61% 
Nonaccrual loans held for investment to total loans held for investment 
0.71% 
0.69% 
ACL for loans and finance leases 
$ 
249,037 
$ 
243,942 
ACL for loans and finance leases to total nonaccrual loans held
for investment 
269.05% 
278.90% 
ACL for loans and finance leases to total nonaccrual loans held
for investment, excluding residential real estate loans 
392.84% 
439.39% 
(1) 
Residential pass-through MBS issued by the PRHFA held as
part of the available-for-sale debt securities portfolio. 
(2) 
During 2025, the Corporation
recorded the aforementioned
$2.8 million valuation
adjustment in connection
with an ongoing
litigation involving a
commercial OREO property
in the Virgin
Islands 
region. See Note 23 - Regulatory Matters, Commitments and Contingencies to the audited consolidated financial statements included
in Part II, Item 8 of this Form 10-K, 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
$4.8 million and 
$6.2 million as of December 31, 2025 and 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
$4.1 million
and $8.0
million of
FHA 
government guaranteed residential mortgage loans that were over 15 months delinquent as of December 31, 2025 and
2024, respectively. 
(5) 
These includes rebooked loans, which were
previously pooled into GNMA securities, amounting
to $6.7 million and $5.7 million
as of December 31, 2025 and 2024,
respectively. Under the GNMA 
program, the
Corporation has
the option
but not
the obligation
to repurchase
loans that
meet GNMAs
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. 
85 
Total non-performing
assets decreased by $4.2 million to
$114.1 million as
of December 31, 2025, compared
to $118.3 million as of 
December
31,
2024.
The
decrease
in
non-performing
assets
was
driven
by
a
$9.8
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; and a $2.8 million
decrease in nonaccrual 
residential mortgage
loans; partially
offset by
a $9.2 million
increase in
nonaccrual commercial
and construction
loans, driven
by the 
inflows of a
$10.0 million C&I
loan in the
Puerto Rico region
in the telecommunications
industry,
a $4.3 million
construction loan in 
the Puerto
Rico region
in the
hospitality industry,
and a
$1.9 million
C&I loan
in the
Puerto Rico
region in
the dairy
farm industry, 
partially offset by a $3.1 million payoff of
a C&I loan in the Puerto Rico region in the food retail industry. 
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) 
Year
Ended December 31, 2025 
Beginning balance 
$ 
1,365 
$ 
10,851 
$ 
20,514 
$ 
32,730 
Plus: 
Additions to nonaccrual
4,371 
(1) 
13,540 
(1) 
13,849 
(1) 
31,760 
Less: 
Loans returned to accrual status 
(118) 
(1,579) 
(393) 
(2,090) 
Nonaccrual loans transferred to OREO 
- 
(54) 
(286) 
(340) 
Nonaccrual loans charge-offs 
- 
(92) 
(346) 
(438) 
Loan collections 
(82) 
(14,284) 
(2) 
(5,296) 
(19,662) 
Ending balance
$ 
5,536 
$ 
8,382 
$ 
28,042 
$ 
41,960 
(1) 
Include inflows to nonaccrual status of a $12.6 million commercial
mortgage loan in the Florida region, two C&I loans in the
Puerto Rico region totaling $11.9 million, and
a $4.3 
million construction loan in the Puerto Rico region. 
(2) 
Mostly related to the aforementioned inflow during the first quarter
of 2025 of a commercial mortgage loan in the Florida region,
which was subsequently paid off during the fourth 
quarter of 2025. 
Construction 
Commercial 
Mortgage 
C&I
Total 
(In thousands) 
Year
Ended December 31, 2024 
Beginning balance 
$ 
1,569 
$ 
12,205 
$ 
15,250 
$ 
29,024 
Plus: 
Additions to nonaccrual 
3,300 
(1) 
151 
28,064 
(1) 
31,515 
Less: 
Loans returned to accrual status 
(35) 
(209) 
(9,495) 
(2) 
(9,739) 
Nonaccrual loans transferred to OREO 
(48) 
- 
(1,008) 
(1,056) 
Nonaccrual loans charge-offs 
- 
- 
(2,742) 
(2,742) 
Loan collections 
(288) 
(1,296) 
(4,488) 
(6,072) 
Reclassification 
(3,133) 
- 
3,133 
- 
Nonaccrual loans sold, net of charge-offs 
- 
- 
(8,200) 
(8,200) 
Ending balance
$ 
1,365 
$ 
10,851 
$ 
20,514 
$ 
32,730 
(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. 
86 
The following table presents the activity of residential nonaccrual loans
held for investment for the indicated periods: 
Year
Ended December 31, 
2025 
2024 
(In thousands) 
Beginning balance
$ 
31,949 
$ 
32,239 
Plus: 
Additions to nonaccrual 
16,867 
16,880 
Less: 
Loans returned to accrual status
(12,579) 
(9,553) 
Nonaccrual loans transferred to OREO 
(1,224) 
(1,935) 
Nonaccrual loans charge-offs 
(65) 
(376) 
Loan collections 
(5,779) 
(5,306) 
Ending balance
$ 
29,169 
$ 
31,949 
The amount of nonaccrual
consumer loans, including finance
leases, decreased by $1.4
million to $21.4 million
as of December 31, 
2025,
mainly related to
a decrease in auto
loans,
finance leases, and
personal loans.
The inflows of
nonaccrual consumer loans
during 
the year ended December 31, 2025 amounted to $107.6 million,
compared to inflows of $118.2 million for the same period
in 2024. 
As of
December 31,
2025, approximately
$32.0 million,
or 35%,
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
year
ended
December
31,
2025,
interest
income
of
approximately
$1.4
million
related
to
nonaccrual
commercial
and 
construction loans
with a
carrying value
of $29.8
million as
of December
31, 2025
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 $145.0 
million as
of December
31, 2025,
a decrease
of $8.0
million, compared
to $153.0
million as
of December
31, 2024,
mainly due
to a 
$5.9
million
decrease
in
consumer
loans,
mainly
in
finance
leases,
personal
loans,
and
credit
cards;
and
a
$4.6
million
decrease
in 
residential mortgage loans; partially offset by a $2.5 million
increase in commercial and construction loans. 
In
addition,
the
Corporation
provides
homeownership
preservation
assistance
to
its
customers
through
a
loss
mitigation 
program. Depending upon the nature of a borrowers
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 year ended December
31, 2025,
loans modified to borrowers experiencing
financial difficulty had an
amortized cost basis of $42.3 
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 $146.4
million
for
the
same
period
in
2024, 
which
included
$108.7
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 Corporations
modified loans. 
87 
The following tables
show the composition
of the OREO portfolio
as of December 31,
2025 and 2024, as
well as the activity
of the 
OREO portfolio by geographic area during the year ended December
31, 2025: 
OREO Composition by Region
As of December 31, 2025 
(In thousands) 
Puerto Rico 
Virgin Islands 
Florida 
Consolidated 
Residential
$ 
5,663 
$ 
861 
$ 
- 
$ 
6,524 
Construction 
386 
- 
- 
386 
Commercial 
612 
- 
(1) 
- 
612 
$ 
6,661 
$ 
861 
$ 
- 
$ 
7,522 
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
Year
Ended December 31, 2025 
(In thousands) 
Puerto Rico 
Virgin Islands 
Florida 
Consolidated 
Beginning balance 
$ 
13,691 
$ 
3,615 
$ 
- 
$ 
17,306 
Additions 
3,777 
78 
- 
3,855 
Sales 
(9,994) 
- 
- 
(9,994) 
Subsequent measurement adjustments 
(352) 
(2,832) 
(1) 
- 
(3,184) 
Other adjustments 
(461) 
- 
- 
(461) 
Ending balance 
$ 
6,661 
$ 
861 
$ 
- 
$ 
7,522 
(1) 
During 2025,
the Corporation
recorded the
aforementioned $2.8
million valuation
adjustment in
connection with
an ongoing
litigation involving
a
commercial 
OREO property in the Virgin Islands region. See Note 23 Regulatory Matters, Commitments and Contingencies to the audited consolidated financial
statements 
included in Part II, Item 8 of this Form 10-K, for further
details. 
88 
The following table presents information about the OREO inventory
and related gains and losses for the indicated periods: 
Year Ended
December 31, 
2025 
2024 
2023 
OREO activity (number of properties): 
Beginning property inventory 
181 
277 
344 
Properties acquired 
35 
93 
171 
Properties disposed 
(121) 
(189) 
(238) 
Ending property inventory 
95 
181 
277 
Average holding period (in days) 
Residential 
668 
517 
483 
Construction 
2,030 
1,560 
2,412 
Commercial 
4,237 
3,752 
1,491 
Total average holding period (in days) 
1,901 
1,275 
911 
OREO operations (gain) loss: 
Market adjustments and (gains) losses on sale: 
Residential 
$ 
(4,747) 
$ 
(6,648) 
$ 
(8,962) 
Construction 
(169) 
(602) 
(61) 
Commercial 
2,348 
(1) 
(2,272) 
(305) 
Total net gain 
(2,568) 
(9,522) 
(9,328) 
Other OREO operations expenses 
1,043 
2,048 
2,190 
Net Gain on OREO operations 
$ 
(1,525) 
$ 
(7,474) 
$ 
(7,138) 
(1) 
During 2025, the Corporation recorded the aforementioned $2.8
million valuation adjustment in connection with an ongoing
litigation involving a commercial OREO property in
the Virgin 
Islands region. See Note 23 Regulatory Matters, Commitments
and Contingencies to the audited consolidated financial statements
included in Part II, Item 8 of this Form 10-K, for 
further details. 
89 
Net Charge-offs and Total
Credit Losses 
Net
charge-offs
totaled
$80.8
million
for
each
of
the
years
ended
December
31,
2025
and
2024.
The
results
for
the
year
ended 
December
31,
2025
reflect
lower
net
charge-offs
in
consumer
loans
and
finance
leases,
primarily
in
the
unsecured
loan
portfolio, 
which were
offset by
a $7.6
million decrease
in recoveries
related to
the bulk
sales of
fully charged
-off consumer
loans and
finance 
leases and a $5.0 million recovery recognized in 2024 associated with a C&I
loan in the Puerto Rico region. 
The following table presents net (recoveries) charge-offs
to average loans held-in-portfolio for the indicated periods: 
Year Ended December
31, 
2025 
2024 
2023 
Residential mortgage
(0.01) 
% 
0.02 
% 
0.02 
% 
Construction
(0.14) 
% 
(0.06) 
% 
(1.09) 
% 
Commercial mortgage 
(0.01) 
% 
(0.02) 
% 
0.01 
% 
C&I 
(0.02) 
% 
(0.12) 
% 
0.21 
% 
Consumer loans and finance leases
(1)
2.20 
% 
2.28 
% 
1.78 
% 
Total loans
(1)
0.63 
% 
0.65 
% 
0.58 
% 
(1) 
The net charge-offs for the years ended December 31,
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 year
ended December 
31, 2025 by 6 bps and 2 bps, respectively,
and by 27 bps and 9 bps, respectively,
for the year ended December 31, 2024. 
The following table presents net (recoveries) charge-offs
to average loans held in various portfolios by geographic segment for the 
indicated periods: 
Year Ended December
31, 
2025 
2024 
2023 
PUERTO RICO: 
Residential mortgage 
-0.01 
% 
0.03 
% 
0.03 
% 
Construction
- 
% 
- 
% 
(2.66) 
% 
Commercial mortgage 
(0.00) 
% 
(0.00) 
% 
0.03 
% 
C&I 
(0.03) 
% 
(0.14) 
% 
(0.00) 
% 
Consumer loans and finance leases 
(1)
2.21 
% 
2.27 
% 
1.78 
% 
Total loans 
(1)
0.81 
% 
0.82 
% 
0.65 
% 
VIRGIN ISLANDS: 
Residential mortgage 
- 
% 
- 
% 
(0.00) 
% 
Construction
- 
% 
- 
% 
0.03 
% 
Commercial mortgage 
(0.17) 
% 
(0.25) 
% 
(0.02) 
% 
C&I 
0.01 
% 
0.02 
% 
(0.00) 
% 
Consumer loans and finance leases 
1.84 
% 
3.35 
% 
0.26 
% 
Total loans 
0.25 
% 
0.53 
% 
0.04 
% 
FLORIDA: 
Residential mortgage 
(0.00) 
% 
(0.01) 
% 
(0.01) 
% 
Construction
(1.29) 
% 
(0.22) 
% 
(0.05) 
% 
Commercial mortgage 
- 
% 
(0.06) 
% 
(0.02) 
% 
C&I 
(0.00) 
% 
(0.09) 
% 
0.67 
% 
Consumer loans and finance leases 
(0.45) 
% 
(1.40) 
% 
(0.50) 
% 
Total loans 
(0.02) 
% 
(0.07) 
% 
0.30 
% 
(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 year ended December 31, 2025 by 6 bps and 2 bps, respectively, and by 28 bps and 10 bps, respectively, for the year ended December 31, 2024. 
90 
Operational Risk 
The Corporation
is exposed to
operational risk arising
from the processes
involved in delivering
banking and financial
products, as 
well as
from external
factors such
as market
conditions, cybersecurity
threats, and
legal or
regulatory developments.
These risks
can 
result
in
operational
or
reputational
loss.
To
manage
them,
the
Corporation
maintains
and
continually
enhances
internal
controls, 
policies, and
procedures designed
to identify,
assess, and
manage operational
risks across
the organization
and to
provide reasonable 
assurance that operations function within established limits. 
Operational risk
is categorized
as business-specific
or corporate-wide.
Enterprise Risk Management
partners with business
units to 
ensure consistent
policies and
assessments for
business-specific
risks. Corporate
-wide risks,
including information
security,
business 
continuity,
and
legal
and
compliance
risk,
are
managed
through
specialized
groups,
such
as Legal,
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
arises
from
potential
noncompliance
with
laws
and
regulations,
adverse
legal
judgments,
or 
unenforceable
counterparty
obligations.
The
Corporation
operates
in
highly
regulated
jurisdictions
and
continues
to
strengthen
its 
procedures
to
comply
with
applicable
legal
and
regulatory
requirements.
The
Compliance
Director,
reporting
to
the
Chief
Risk 
Officer,
oversees
enterprise-wide
compliance
and
manages
the
Corporations
compliance
risk
assessment
process.
Compliance 
officers embedded in major business areas report directly
to the Corporate Compliance Group. 
Concentration Risk 
The Corporations
operations are geographically
concentrated in Puerto Rico,
its main market.
Of the total gross loan
portfolio held 
for
investment
of $13.1
billion
as of
December
31,
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 Corporations
business and credit exposure is concentrated in the Commonwealth
of Puerto Rico, which 
has faced
prolonged
economic and
fiscal challenges.
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 October
2025,
the Puerto
Rico Planning
Board
(PRPB)
reported
in its
preliminary
estimates that
real gross
national
product 
(GNP)
grew
by
0.4%
in
fiscal
year
2025,
marking
the
fifth
consecutive
year
of
positive
economic
growth,
driven
by
personal 
consumption and fixed
investments in both
construction and machinery
and equipment. The latest
PRPBs baseline
projections reflect 
0.4% real GNP growth in fiscal year 2026 and 0.3% in fiscal year 2027. 
There
are
other
indicators
that
gauge
economic
activity
and
are
published
with
greater
frequency,
for
example,
the
Economic 
Development
Bank
for
Puerto
Ricos
Economic
Activity
Index
(EDB-EAI).
Although
not
a
direct
measure
of
Puerto
Ricos
real 
GNP,
the EDB-EAI is correlated
to Puerto Ricos
real GNP.
During the 11-month
period ended on November
30, 2025, the EDB-EAI 
averaged
127.7,
decreasing
by
0.4%
on
a
year-over-year
basis,
primarily
reflecting
reductions
in
electric
energy
generation
and 
gasoline consumption. For November 2025, estimates showed that
the EDB-EAI stood at 128.1, up 0.8% on a year-over-year
basis.
Labor
market trends
remain positive.
Data published
by the
Bureau
of Labor
Statistics showed
that non-farm
payrolls in
2025 in 
Puerto Rico increased
by 0.9% when
compared to
2024, primarily driven
by payrolls in
the private
sector as these
increased by
1.2% 
from the comparable
figure a year earlier.
Key industries driving
private-sector payroll growth
include Construction
with a year-over-
year increase
of 4.8%
and Leisure
& Hospitality
with a
positive variance
of 3.4%.
The unemployment
rate continued
to move
in the 
right direction, decreasing from 5.63% in 2024 to 5.56% in 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. 
91 
The original
2024 Fiscal
Plan outlines
the Commonwealths
financial condition,
key fiscal
risks, and
the actions
required to
achieve 
long-term
fiscal
responsibility
and
access
to
credit
markets.
It
identifies
priority
areas
such
as
improved
economic
and
revenue 
forecasting, adoption of budget
best practices, enhanced government
service delivery,
and strengthened financial reporting,
along with 
initiatives to support economic
growth through human capital
development, tax reform,
and infrastructure improvements. The
original 
2024
Fiscal Plan
also incorporates
updated
macroeconomic projections,
including modest
near-term
GNP growth
followed by
slight 
declines,
and
anticipates
stable
population
levels
supported
by
positive
net
migration.
In
addition,
it
reflects
the
significant
role
of 
federal
disaster
relief,
COVID-19
recovery
funds,
and
Bipartisan
Infrastructure
Law
funding
in
supporting
Puerto
Ricos 
reconstruction and economic outlook. 
Debt Restructuring
Over 80% of Puerto Ricos
outstanding debt has been restructured
to date. Key actions include the 2022
central government Plan of 
Adjustment, which
exchanged more
than $33
billion of
existing bonds
and other
claims for
about $7
billion in
new bonds,
reducing 
debt service
by more
than $50
billion. 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
remaining
major
restructuring
is
that
of
the
Puerto
Rico
Electric
Power
Authority
(PREPA).
Litigation
remains
largely 
stayed. On March
28, 2025, the PROMESA
oversight board filed
its fifth amended plan
of adjustment, which
would reduce PREPAs 
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
PREPAs
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
Puerto
Rico
gained
momentum
as
a
hub
for
reshoring,
particularly
in
the
manufacturing
sector.
During
2025,
the
Government 
announced 17 companies with expansion
projects representing over $2 billion
in committed capital investments and over
4,000 jobs to 
be created over the short-to-medium
term. This reflects part of the Governments
policy efforts to prioritize growth
-oriented initiatives 
that are critical to sustaining long-term economic growth and competitiveness. 
Infrastructure reconstruction
continues to
advance, particularly
in the
aftermath of
Hurricane Maria
in 2017.
During the
12-month 
period
ended
September
30,
2025,
over
$3.4
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
6.9%
increase
when
compared
to
the
same
period
in
2024.
Excluding
Hurricane
Fiona-related
emergency
funds,
which 
occurred
in September
2022,
disbursements
rose 14.3%
on a
year-over-year
basis. As
of
February
9, 2026,
over 4,600
projects
had 
already been
completed under FEMAs
Public Assistance
Permanent Work
programs while nearly
20,000 projects
were active across 
different stages of execution for
a total cost of $12.1 billion, equivalent
to approximately 34% of the agencys
$37.4 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 
decreases
or
Medicaid
costs
increase.
Certain
expenses
are
exempt
from
the
hold
back,
including
pensions,
public
safety,
certain 
transportation costs, and sales tax. 
Exposure to Puerto Rico Government 
As of December
31, 2025, the
Corporation had $297.8
million of direct
exposure to the
Puerto Rico government,
its municipalities 
and public
corporations, an increase
of $9.2 million
compared to $288.6
million as of
December 31, 2024.
As of December
31, 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
$42.2 million
consisted of
loans and
obligations which
are supported
by one 
or
more
specific
sources
of
municipal
revenues.
The
Corporations
exposure
to
Puerto
Rico
municipalities
consisted
primarily
of 
92 
senior priority loans and obligations concentrated
in six 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,
$32.9
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
$2.7
million
as
part
of
its 
available-for-sale debt securities portfolio (fair value of $1.6 million as of
December 31, 2025). 
The
following
table
details
the
Corporations
total
direct
exposure
to
Puerto
Rico
government
obligations
according
to
their 
maturities: 
As of December 31, 2025 
Investment 
Portfolio 
(Amortized cost) 
Loans 
Total
Exposure 
(In thousands) 
Puerto Rico Housing Finance Authority: 
After 10 years 
$ 
2,700 
$ 
- 
$ 
2,700 
Total Puerto Rico Housing Finance Authority 
2,700 
- 
2,700 
Public corporation of the Puerto Rico government: 
Due within one year 
- 
14,416 
14,416 
After 1 to 5 years 
- 
18,476 
18,476 
Total public corporation of the Puerto Rico government 
- 
32,892 
32,892 
Affiliate of the Puerto Rico Electric Power Authority: 
After 1 to 5 years 
- 
8,656 
8,656 
Total Puerto Rico government affiliate 
- 
8,656 
8,656 
Total Puerto Rico public corporations and government affiliate 
- 
41,548 
41,548 
Municipalities: 
Due within one year 
1,044 
- 
1,044 
After 1 to 5 years 
53,265 
112,628 
165,893 
After 5 to 10 years 
10,376 
61,399 
71,775 
After 10 years 
14,870 
- 
14,870 
Total Municipalities 
79,555 
174,027 
253,582 
Total Direct
Government Exposure 
$ 
82,255 
$ 
215,575 
$ 
297,830 
Also,
as
of
December
31,
2025,
the
outstanding
balance
of
construction
loans
funded
through
conduit
financing
structures
to 
support the
federal programs
of Low-Income
Housing Tax
Credit combined
with other
federal programs
amounted to
$92.4 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 of record. 
In
addition,
as
of
December
31,
2025,
the
Corporation
had
$67.1
million
in
exposure
to
residential
mortgage
loans
that
are 
guaranteed by
the PRHFA,
a governmental
instrumentality that has
been designated as
a covered entity
under PROMESA (December 
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
PRHFAs
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
December
31,
2025
and
2024,
the
Corporation
had
$2.5
billion
and
$3.1
billion,
respectively,
of
public
sector
deposits
in 
Puerto
Rico.
Approximately
23%
of
the
public
sector
deposits
as
of
December
31,
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. 
93 
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
USVIs
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 BEAs
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 four
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
$26.2 billion
in obligated
disaster recovery
funds for
the USVI
as of
September 30,
2025,
up 
$9.7 billion
(or 59%)
from the
comparable
figure a
year earlier.
During the
12-month
period ended
September 30,
2025,
over $597 
million were disbursed in the territory,
representing a year-over-year increase
of 2%.
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
December 31,
2025 and
2024, the
Corporation had
$138.7 million
and $100.4
million, respectively,
in loans to
USVI public 
corporations, of
which $108.0 million
and $68.2 million,
respectively,
were fully collateralized
by cash balances
held at the
Bank. As 
of December 31, 2025, all loans were currently performing and up to
date on principal and interest payments. 
94 
CEO and CFO Certifications 
First BanCorp.s Chief Executive
Officer and Chief Financial Officer have
filed with the SEC certifications required by Section 302 
and Section 906 of the Sarbanes-Oxley Act of 2002 as Exhibits 31.1, 31.2,
32.1 and 32.2 to this Form 10-K. 
In addition, in 2025, First BanCorps
Chief Executive Officer provided to the NYSE his annual certification,
as required for all 
NYSE listed companies, that he was not aware of any violation by the Corporation
of the NYSE corporate governance listing 
standards. 
Item 7A. Quantitative and Qualitative Disclosures about Market
Risk
The information required
herein is incorporated by
reference to the
information included under
the sub-caption Interest Rate
Risk 
Management
in Part
II, Item
7 Managements
Discussion and
Analysis of
Financial Condition
and Results
of Operations,
of this 
Form 10-K. 
95 
Item 8. Financial Statements and Supplementary Data 
FIRST BANCORP. 
INDEX TO CONSOLIDATED
FINANCIAL STATEMENTS
[Report of Independent Registered Public Accounting Firm](#a74910)
(PCAOB No. 
173
)... 
96 
[Managements Report on Internal Control over Financial Reporting](#a77632)
98 
[Consolidated Statements of Financial Condition](#a77743)
... 
99 
[Consolidated Statements of Income](#a78181)
...... 
100 
[Consolidated Statements of Comprehensive Income](#a78823)
........ 
101 
[Consolidated Statements of Cash Flows](#a79146)
102 
[Consolidated Statements of Changes in Stockholders Equity](#a79906)
.. 
103 
[Notes to Consolidated Financial Statements](#a80317)
.. 
104 
96 
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM 
Shareholders and the Board of Directors of First BanCorp.
San Juan, Puerto Rico 
Opinions on the Financial Statements and Internal Control
over Financial Reporting 
We 
have audited the accompanying consolidated
statements of financial condition of First
BanCorp. (the Company) as of December 
31, 2025
and 2024,
the related
consolidated
statements of
income, comprehensive
income, cash
flows, and
changes in
stockholders 
equity
for each
of the
years in
the three-year
period ended
December 31,
2025, and
the related
notes (collectively
referred
to as
the 
financial statements). 
We 
also have audited the
Companys internal
control over financial reporting
as of December 31, 2025,
based 
on criteria
established
in Internal
Control
Integrated
Framework:
(2013) issued
by
the Committee
of Sponsoring
Organizations
of 
the Treadway Commission (COSO). 
In our opinion,
the financial statements
referred to above
present fairly,
in all material
respects, the financial
position of the
Company 
as of
December 31,
2025 and
2024, and
the results
of its
operations and
its cash
flows for
each of
the years
in the
three-year period 
ended December
31, 2025
in conformity
with accounting
principles generally
accepted in
the United
States of
America. Also
in our 
opinion, the Company
maintained, in all
material respects, effective
internal control over
financial reporting as
of December 31,
2025 
based on criteria established in Internal Control Integrated Framework:
(2013) issued by COSO. 
Basis for Opinions 
The
Companys
management
is
responsible
for
these
financial
statements,
for
maintaining
effective
internal
control
over
financial 
reporting,
and
for
its
assessment
of
the
effectiveness
of
internal
control
over
financial
reporting,
included
in
the
accompanying 
Managements
Report
on
Internal
Control
over
Financial
Reporting.
Our
responsibility
is
to
express
an
opinion
on
the
Companys 
financial statements
and an
opinion on
the Companys
internal control
over financial
reporting based
on our
audits. 
We 
are a
public 
accounting
firm registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be 
independent with
respect to
the Company
in accordance
with the
U.S. federal
securities laws and
the applicable
rules and
regulations 
of the Securities and Exchange Commission and the PCAOB. 
We 
conducted our audits in accordance
with the standards of the PCAOB. Those
standards require that we plan and
perform the audits 
to obtain reasonable
assurance about whether
the financial statements are
free of material misstatement,
whether due to error
or fraud, 
and whether effective internal control over financial
reporting was maintained in all material respects. 
Our
audits
of
the
financial
statements
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial 
statements, whether due to error
or fraud, and performing procedures that
respond to those risks. Such procedures
included examining, 
on
a
test basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the 
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the 
financial statements. Our audit
of internal control over
financial reporting included obtaining
an understanding of internal control
over 
financial reporting, assessing the risk that a material weakness
exists, and testing and evaluating the design
and operating effectiveness 
of internal
control based
on the
assessed risk.
Our audits
also included
performing such
other procedures
as we
considered necessary 
in the circumstances. 
We 
believe that our audits provide a reasonable basis for our opinions. 
Definition and Limitations of Internal Control Over
Financial Reporting 
A companys
internal control over financial reporting is a
process designed 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.
A
companys
internal
control
over
financial
reporting
includes
those
policies
and
procedures
that
(1)
pertain
to
the 
maintenance
of
records
that,
in
reasonable
detail,
accurately
and
fairly
reflect
the
transactions
and
dispositions
of
the
assets
of
the 
company; (2) provide
reasonable assurance that
transactions are recorded
as necessary to permit
preparation of financial
statements in 
accordance with
generally accepted
accounting principles,
and that
receipts and
expenditures of
the company
are being
made only
in 
accordance
with
authorizations
of
management
and
directors
of
the
company;
and
(3)
provide
reasonable
assurance
regarding 
prevention or timely detection of unauthorized acquisition,
use, or disposition of the companys
assets that could have a material effect 
on the financial statements. 
Because of its inherent
limitations, internal control
over financial reporting may
not prevent or detect
misstatements. Also, projections 
of any evaluation
of effectiveness to
future periods are
subject to the
risk that controls
may become inadequate
because of changes
in 
conditions, or that the degree of compliance with the policies or
procedures may deteriorate. 
97 
Critical Audit Matter 
The
critical
audit
matter
communicated
below
is a
matter
arising
from
the
current
period
audit
of
the
financial
statements
that
was 
communicated or required
to be communicated
to the audit
committee and that:
(1) relates to accounts
or disclosures that
are material 
to the
financial statements
and (2)
involved our
especially challenging,
subjective, or
complex judgments.
The communication
of the 
critical
audit
matter
does
not
alter
in
any
way
our
opinion
on
the
financial
statements,
taken
as
a
whole,
and
we
are
not,
by 
communicating
the
critical
audit
matter
below,
providing
a
separate
opinion
on
the
critical
audit
matter
or
on
the
accounts
or 
disclosures to which it relates. 
Allowance for Credit Losses Selection and Weighting
of Economic Scenarios
As described
in Notes
1 and
4 to
the financial
statements, the
allowance for
credit losses
(ACL) for
loans and
finance leases
is an 
accounting
estimate
of
expected
credit
losses
over
the
contractual
life
of
financial
assets
carried
at
amortized
cost
and
off-balance-
sheet credit exposures. 
The calculation
of the
ACL for
loans and
finance leases,
is primarily
measured based
on a
probability of
default /
loss given
default 
modeled approach. The
estimate of the probability
of default and loss
given default assumptions
uses one or more
economic scenarios 
of
relevant
current
and
forward-looking
macroeconomic
variables
determined
by
portfolio
segment,
such
as:
unemployment
rate; 
housing
and
real
estate
price
indices;
interest
rates;
market
risk
factors;
and
gross
domestic
product,
and
considers
conditions 
throughout Puerto
Rico, the
Virgin
Islands, and
the State
of Florida.
The economic
scenarios are
chosen quarterly
and the
weighting 
given to
each economic
scenario for
the different
loan portfolio
categories depends
on a
variety of
factors including
recent economic 
events, leading national and regional economic indicators, and industry
trends. 
We 
identified the auditing
of economic scenarios
as a critical audit
matter as the selection
of the economic scenarios
and weighting of 
the
scenarios
requires
significant
management
judgment,
which
in
turn,
required
significant
auditor
judgment
and
significant
audit 
effort,
including
the
need
for
professionals
with
specialized
skill
and
knowledge.
Additionally,
the
impact
of
these
judgments 
represents a significant portion of the ACL for loans and finance leases.
The primary procedures we performed to address the critical audit matter
included: 
Testing
the
effectiveness
of
controls
over
the
evaluation
of
the
selection
and
weighting
of
economic
scenarios,
including 
controls addressing: 
o
Managements review and
approval of the economic scenarios and the weightings applied. 
o
Managements
review
of
the
completeness
and
accuracy
of
data
used
as
a
basis
for
modeling
the
economic 
scenarios, and the relevance and reliability of data from external
sources. 
o
Managements review of
the reasonableness of the results of the allowance for credit losses calculation. 
Substantively
testing
managements
process,
including
evaluating
their
judgments
and
assumptions
for
economic
scenario 
selection and weightings applied, which included: 
o
Evaluation of the reasonableness of economic scenarios selected and
weightings applied. 
o
Evaluation of the completeness and accuracy of data inputs used as a basis for
modeling. 
o
Evaluation, with
the assistance
of professionals
with specialized
skill and
knowledge, of
the reasonableness
of both 
the economic
scenarios provided
by external
sources and
the results
of their
application in
the determination
of the 
ACL for loans.
We 
have served as the Companys
auditor since 2018. 
/s/ 
Crowe LLP
Atlanta, Georgia
February 27, 2026 
Stamp No. DLLP224-69 of the 
Puerto Rico Society of Certified 
Public Accountants was affixed to 
the record copy of this report. 
98 
Managements Report on Internal Control
over Financial Reporting 
To the Stockholders
and Board of Directors of First BanCorp.: 
First BanCorp.s
(the Corporation)
internal control
over financial
reporting is
a process
designed and
effected
by those
charged 
with
governance,
management,
and
other
personnel,
to
provide
reasonable
assurance
regarding
the
reliability
of
financial
reporting 
and the preparation of reliable
financial statements in accordance
with accounting principles generally
accepted in the United States of 
America
(GAAP).
The
Corporations
internal
control
over
financial
reporting
includes
those
policies
and
procedures
that: 
(1) pertain to the
maintenance of records
that, in reasonable detail,
accurately and fairly reflect
the transactions and dispositions
of the 
assets
of
the
Corporation;
(2) provide
reasonable
assurance
that
transactions
are
recorded
as
necessary
to
permit
the
preparation
of 
financial
statements
in
accordance
with
GAAP,
and
that
receipts
and
expenditures
of
the
Corporation
are
being
made
only
in 
accordance
with
authorizations
of
management
and
directors
of
the
Corporation;
and
(3) provide
reasonable
assurance
regarding 
prevention,
or timely
detection and
correction
of unauthorized
acquisition,
use, or
disposition of
the Corporations
assets that
could 
have a material effect on the financial statements. 
Because of
its inherent
limitations,
internal control
over financial
reporting may
not prevent,
or detect
and correct
misstatements. 
Also,
projections
of
any
evaluation
of
effectiveness
to
future
periods
are
subject
to
the
risk
that
controls
may
become
inadequate 
because of changes in conditions, or that the degree of compliance with the policies
and procedures may deteriorate. 
Management
is
responsible
for
establishing
and
maintaining
effective
internal
control
over
financial
reporting.
Management 
assessed
the
effectiveness
of
the
Corporations
internal
control
over
financial
reporting
as
of
December 31,
2025,
based
on
the 
framework
set
forth
by
the
Committee
of
Sponsoring
Organizations
of
the
Treadway
Commission
(COSO)
in
Internal
Control-
Integrated
Framework
(2013).
Based
on
that
assessment,
management
concluded
that,
as
of
December
31,
2025,
the
Corporations 
internal control over financial reporting is effective. 
The
Corporations
independent
registered
public
accounting
firm,
Crowe LLP,
has
audited
the effectiveness
of the
Corporations 
internal control over financial reporting as of December 31, 2025
,
as stated in their report dated February 27, 2026. 
First BanCorp. 
/s/
Aurelio Alemn 
Aurelio Alemn 
President and Chief Executive Officer 
Date: February 27, 2026 
/s/
Orlando Berges
Orlando Berges 
Executive Vice President 
and Chief Financial Officer 
Date: February 27, 2026 
99 
FIRST BANCORP. 
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION 
December 31, 2025 
December 31, 2024 
(In thousands, except for share information) 
ASSETS 
Cash and due from banks 
$ 
657,149
$ 
1,158,215
Money market investments: 
Time deposit with another financial institution 
750
500
Other short-term investments 
700
700
Total money market investments 
1,450
1,200
Available-for-sale debt securities, at fair value (amortized cost of
$
4,901,982
as of December 31, 2025 and $
5,125,408
as of December 31, 2024; ACL of $
763
as of December 31, 2025 and $
521
as of December 31, 2024) 
4,554,032
4,565,302
Held-to-maturity debt securities, at amortized
cost, net of ACL of $
733
as of December 31, 2025 and $
802
as of December 31, 2024 (fair value of
$
262,055
as of December 31, 2025 and $
308,040
as of December 31, 2024) 
264,563
316,984
Equity securities 
44,753
52,018
Total investment securities 
4,863,348
4,934,304
Loans held for investment, net of ACL of
$
249,037
as of December 31, 2025 and $
243,942
as of December 31, 2024 
12,876,319
12,502,614
Mortgage loans held for sale, at lower of
cost or market 
16,697
15,276
Total loans, net 
12,893,016
12,517,890
Accrued interest receivable on loans and
investments 
71,351
71,881
Premises and equipment, net 
126,920
133,437
Other real estate owned (OREO) 
7,522
17,306
Deferred tax asset, net 
149,012
136,356
Goodwill 
38,611
38,611
Other intangible assets 
3,458
6,967
Other assets 
321,055
276,754
Total assets 
$ 
19,132,892
$ 
19,292,921
LIABILITIES 
Non-interest-bearing deposits 
$ 
5,549,416
$ 
5,547,538
Interest-bearing deposits 
11,120,727
11,323,760
Total deposits 
16,670,143
16,871,298
Long-term borrowings 
290,000
561,700
Accounts payable and other liabilities 
205,884
190,687
Total liabilities 
17,166,027
17,623,685
Commitments and contingencies (See
Note 23) 
(nil)
(nil)
STOCKHOLDERS EQUITY 
Common stock, $
0.10
par value, 
2,000,000,000
shares authorized; 
223,663,116
shares issued; 
156,618,996
shares outstanding as of December 31, 2025
and 
163,868,877
shares outstanding as of December 31, 2024 
22,366
22,366
Additional paid-in capital 
963,543
964,964
Retained earnings, includes legal surplus
reserve of $
262,534
as of December 31, 2025 and $
230,178
as of December 31, 2024 
2,268,011
2,038,812
Treasury stock (at cost), 
67,044,120
shares as of December 31, 2025 and 
59,794,239
shares as of December 31, 2024 
(932,505)
(790,350)
Accumulated other comprehensive loss,
net of tax of $
7,986
as of December 31, 2025 and $
8,221
as of December 31, 2024 
(354,550)
(566,556)
Total stockholders equity 
1,966,865
1,669,236
Total liabilities and stockholders equity 
$ 
19,132,892
$ 
19,292,921
The accompanying notes are an integral part
of these statements. 
100 
FIRST BANCORP. 
CONSOLIDATED STATEMENTS OF INCOME 
Year Ended December 31, 
2025 
2024 
2023 
(In thousands, except per share information) 
Interest and dividend income: 
Loans 
$ 
979,136
$ 
965,472
$ 
890,562
Investment securities 
102,923
92,599
102,505
Money market investments and interest-earning cash accounts 
41,097
37,082
30,419
Total interest and dividend income 
1,123,156
1,095,153
1,023,486
Interest expense: 
Deposits 
237,683
253,107
185,461
Short-term borrowings 
86
18
7,583
Long-term borrowings 
16,447
34,549
33,332
Total interest expense 
254,216
287,674
226,376
Net interest income 
868,940
807,479
797,110
Provision for credit losses - expense (benefit): 
Loans and finance leases 
85,906
62,861
66,644
Unfunded loan commitments 
(130)
(1,495)
365
Debt securities 
185
(1,445)
(6,069)
Provision for credit losses - expense 
85,961
59,921
60,940
Net interest income after provision for credit losses 
782,979
747,558
736,170
Non-interest income: 
Service charges and fees on deposit accounts 
39,068
38,819
38,042
Mortgage banking activities 
14,106
12,683
10,587
Gain on early extinguishment of debt 
-
-
1,605
Insurance commission income 
13,226
13,570
12,763
Card and processing income 
47,390
46,758
43,909
Other non-interest income 
18,088
18,892
25,788
Total non-interest income
131,878
130,722
132,694
Non-interest expenses: 
Employees compensation and benefits 
245,152
235,695
222,855
Occupancy and equipment 
88,909
88,427
85,911
Business promotion 
16,601
17,645
19,626
Professional service fees 
48,109
49,455
45,841
Taxes, other than income taxes 
23,954
22,196
21,236
Federal Deposit Insurance Corporation (FDIC) deposit
insurance 
7,668
9,818
14,873
Net gain on OREO operations 
(1,525)
(7,474)
(7,138)
Credit and debit card processing expenses 
28,474
27,600
25,997
Communications 
9,031
8,779
8,561
Other non-interest expenses 
31,750
34,932
33,666
Total non-interest expenses 
498,123
487,073
471,428
Income before income taxes 
416,734
391,207
397,436
Income tax expense 
71,868
92,483
94,572
Net income
$ 
344,866
$ 
298,724
$ 
302,864
Net income attributable to common stockholders
$ 
344,866
$ 
298,724
$ 
302,864
Net income per common share: 
Basic 
$ 
2.16
$ 
1.82
$ 
1.72
Diluted 
$ 
2.15
$ 
1.81
$ 
1.71
The accompanying notes are an integral part
of these statements. 
101 
FIRST BANCORP. 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 
Year Ended
December 31, 
2025 
2024 
2023 
(In thousands) 
Net income
$ 
344,866
$ 
298,724
$ 
302,864
Other comprehensive income, net of tax: 
Available-for-sale debt securities: 
Net unrealized holding gains on debt securities 
(1)
212,398
73,214
165,420
Defined benefit plans adjustments: 
Net actuarial (loss) gain 
(409)
(635)
177
Reclassification adjustment for amortization of net actuarial loss 
17
35
11
Other comprehensive income for the year, net of tax 
212,006
72,614
165,608
Total comprehensive income 
$ 
556,872
$ 
371,338
$ 
468,472
Year Ended
December 31, 
2025 
2024 
2023 
(In thousands) 
Income tax effect of items included in other comprehensive income: 
Defined benefit plans adjustments: 
Net actuarial (loss) gain 
$ 
245
$ 
381
$ 
(107)
Reclassification adjustment for amortization of net actuarial loss 
(10)
(21)
(6)
Total income tax effect of items included in other comprehensive income 
$ 
235
$ 
360
$ 
(113)
(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 allowance.
The accompanying notes are an integral part of these statements. 
102 
FIRST BANCORP. 
CONSOLIDATED STATEMENTS OF CASH FLOWS 
Year Ended December 31, 
2025 
2024 
2023 
(In thousands) 
Cash flows from operating activities: 
Net income
$ 
344,866
$ 
298,724
$ 
302,864
Adjustments to reconcile net income to net cash provided by operating
activities: 
Depreciation and amortization 
17,244
18,580
20,501
Amortization of intangible assets 
3,509
6,416
7,735
Provision for credit losses 
85,961
59,921
60,940
Deferred income tax (benefit) expense 
(12,422)
14,131
6,105
Stock-based compensation 
10,096
8,706
7,799
Gain on early extinguishment of debt 
-
-
(1,605)
Unrealized gain on derivative instruments 
(829)
(537)
(301)
Net gain on disposals or sales, and impairments of premises
and equipment and other assets 
(16)
(103)
(3,514)
Net gain on sales of loans and loans held-for-sale valuation adjustments
(5,041)
(3,426)
(1,572)
Net (accretion) amortization of discounts, premiums, and
deferred loan fees and costs 
(668)
344
1,223
Originations and purchases of loans held for sale 
(170,634)
(165,291)
(147,460)
Sales and repayments of loans held for sale 
174,124
160,593
149,888
Amortization of broker placement fees 
711
757
309
Net (accretion) amortization of premiums and discounts on investment
securities 
(3,241)
5,069
4,967
(Increase) decrease in accrued interest receivable 
(11,088)
5,598
(5,437)
Increase in accrued interest payable 
2,745
5,358
18,430
Decrease (increase) in other assets 
11,031
(10,514)
(16,619)
Increase (decrease) in other liabilities 
2,208
(176)
(41,290)
Net cash provided by operating activities 
448,556
404,150
362,963
Cash flows from investing activities: 
Net disbursements on loans held for investment 
(505,032)
(705,368)
(758,232)
Proceeds from sales of loans held for investment 
3,734
18,362
7,736
Proceeds from sales of repossessed assets 
55,373
64,337
53,870
Purchases of available-for-sale debt securities 
(1,938,092)
(266,198)
(5,458)
Proceeds from principal repayments and maturities of available-for-sale
debt securities 
2,163,513
997,081
549,644
Proceeds from principal repayments of held-to-maturity debt securities 
53,715
38,353
85,988
Additions to premises and equipment 
(11,032)
(10,008)
(22,599)
Proceeds from sales of premises and equipment and other assets 
25
1,353
4,475
Net redemptions (purchases) of equity securities 
7,404
(2,350)
5,643
Proceeds from the settlement of insurance claims - investing activities 
-
670
483
Net cash (used in) provided by investing activities 
(170,392)
136,232
(78,450)
Cash flows from financing activities: 
Net (decrease) increase in deposits 
(239,938)
260,843
470,981
Net repayments of short-term borrowings 
-
-
(550,133)
Repayments of long-term borrowings 
(269,850)
(97,000)
(19,795)
Proceeds from long-term borrowings 
-
-
300,000
Repurchase of outstanding common stock 
(153,672)
(102,393)
(203,241)
Dividends paid on common stock 
(115,520)
(105,581)
(99,666)
Net cash used in financing activities 
(778,980)
(44,131)
(101,854)
Net (decrease) increase in cash and cash equivalents 
(500,816)
496,251
182,659
Cash and cash equivalents at beginning of year 
1,159,415
663,164
480,505
Cash and cash equivalents at end of year 
$ 
658,599
$ 
1,159,415
$ 
663,164
Cash and cash equivalents include: 
Cash and due from banks 
$ 
657,149
$ 
1,158,215
$ 
661,925
Money market investments 
1,450
1,200
1,239
$ 
658,599
$ 
1,159,415
$ 
663,164
The accompanying notes are an integral part of these statements. 
103 
FIRST BANCORP. 
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS
EQUITY 
Year Ended December 31, 
2025 
2024 
2023 
(In thousands, except per share information) 
Common Stock 
$ 
22,366
$ 
22,366
$ 
22,366
Additional Paid-In Capital: 
Balance at beginning of year 
964,964
965,707
970,722
Stock-based compensation expense 
10,096
8,706
7,799
Common stock reissued under stock-based compensation plan 
(11,694)
(9,659)
(13,531)
Restricted stock forfeited 
177
210
717
Balance at end of year 
963,543
964,964
965,707
Retained Earnings: 
Balance at beginning of year 
2,038,812
1,846,112
1,644,209
Cumulative adjustment of adoption of Accounting Standards Update
(ASU) 2022-02 
-
-
(1,357)
Net income
344,866
298,724
302,864
Dividends on common stock (2025 - $
0.72
per share; 2024 - $
0.64
per share; 2023 - $
0.56
per share) 
(115,667)
(106,024)
(99,604)
Balance at end of year 
2,268,011
2,038,812
1,846,112
Treasury Stock (at cost): 
Balance at beginning of year 
(790,350)
(697,406)
(506,979)
Common stock repurchases (See Note 12) 
(153,672)
(102,393)
(203,241)
Common stock reissued under stock-based compensation plan 
11,694
9,659
13,531
Restricted stock forfeited 
(177)
(210)
(717)
Balance at end of year 
(932,505)
(790,350)
(697,406)
Accumulated Other Comprehensive Loss, net of tax: 
Balance at beginning of year 
(566,556)
(639,170)
(804,778)
Other comprehensive income, net of tax 
212,006
72,614
165,608
Balance at end of year 
(354,550)
(566,556)
(639,170)
Total stockholders equity 
$ 
1,966,865
$ 
1,669,236
$ 
1,497,609
The accompanying notes are an integral part of these statements. 
104 
FIRST BANCORP. 
INDEX TO NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS 
PAGE
Note 1 
Nature of Business and Summary of Significant Accounting Policies 
[105](#a80560)
Note 2 
Debt Securities
[120](#a84869)
Note 3 
Loans Held for Investment
[126](#a89132)
Note 4
Allowance for Credit Losses for Loans and Finance Leases
[151](#a118028)
Note 5
Premises and Equipment
[154](#a119528)
Note 6 
Other Real Estate Owned (OREO)
[155](#a119830)
Note 7 
Related-Party Transactions
[155](#a120023)
Note 8 
Deposits
[156](#a120136)
Note 9 
Borrowings
[157](#a120593)
Note 10 
Earnings per Common Share
[159](#a120962)
Note 11 
Stock-Based Compensation
[160](#a121170)
Note 12 
Stockholders Equity
[163](#a122176)
Note 13 
Accumulated Other Comprehensive Loss
[165](#a122715)
Note 14 
Employee Benefit Plans
[166](#a123056)
Note 15 
Other Non-Interest Income
[169](#a124122)
Note 16 
Other Non-Interest Expenses
[169](#a124293)
Note 17 
Income Taxes
[170](#a124455)
Note 18 
Operating Leases
[174](#a127754)
Note 19
Fair Value
[175](#a128096)
Note 20
Revenue from Contracts with Customers
[180](#a130891)
Note 21 
Segment Information
[183](#a132292)
Note 22 
Supplemental Statements
of Cash Flows Information
[187](#a135120)
Note 23 
Regulatory Matters, Commitments, and Contingencies
[188](#a135381)
Note 24 
First BanCorp. (Holding Company Only) Financial Information
[191](#a136674)
105 
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS 
(Audited) 
NOTE 1 
NATURE OF BUSINESS AND SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
Nature of business
First BanCorp. (the Corporation)
is a publicly owned, Puerto
Rico-chartered financial holding
company organized under
the laws 
of the Commonwealth
of Puerto Rico in
1948. The Corporation
is subject to regulation,
supervision, and examination
by the Board
of 
Governors of
the Federal
Reserve System
(the Federal
Reserve Board).
Through its
subsidiaries, including
its banking
subsidiary, 
FirstBank Puerto Rico (FirstBank
or the Bank), the Corporation
provides full-service commercial
and consumer banking services, 
mortgage banking
services, automobile
financing, trust
services, insurance
agency services,
and other
financial products
and services 
with operations in Puerto Rico, the United States, the U.S. Virgin
Islands (the USVI), and the British Virgin
Islands (the BVI). 
The Corporation
has 
two
wholly-owned subsidiaries:
FirstBank Puerto
Rico (FirstBank
or the
Bank), and
FirstBank Insurance 
Agency,
Inc.
(FirstBank
Insurance
Agency).
FirstBank
is
a
Puerto
Rico-chartered
commercial
bank,
and
FirstBank
Insurance 
Agency is
a Puerto
Rico-chartered insurance
agency.
FirstBank is
subject to
the supervision,
examination, and
regulation of
both the 
Office of
the Commissioner
of Financial
Institutions of
the Commonwealth
of Puerto
Rico (the
OCIF) and
the FDIC.
Deposits are 
insured
through
the
FDIC
Deposit
Insurance
Fund.
FirstBank
also
operates
in
the
State
of
Florida,
subject
to
regulation
and 
examination by
the Florida
Office of
Financial Regulation
and the
FDIC; in
the USVI,
subject to
regulation and
examination by
the 
USVI
Division
of
Banking,
Insurance
and
Financial
Regulation;
and
in the
BVI,
subject to
regulation
by the
British Virgin
Islands 
Financial
Services Commission.
The Consumer
Financial Protection
Bureau (the
CFPB) regulates
FirstBanks
consumer
financial 
products and services.
FirstBank
Insurance
Agency
is
subject
to
the
supervision,
examination,
and
regulation,
including
the
Office
of
the
Insurance 
Commissioner of
the Commonwealth
of Puerto
Rico and
the Division
of Banking,
Insurance and
Financial Regulation
in the
USVI.
FirstBank conducts its
business through its
main office located
in San Juan, Puerto
Rico, 
57
banking branches in
Puerto Rico, 
eight
banking branches in the USVI and the BVI, and 
eight
banking branches in the state of Florida (USA). FirstBank
has 
six
wholly-owned 
subsidiaries
with
operations
in
Puerto
Rico:
First
Federal
Finance
Corp.
(d/b/a
Money
Express
La Financiera),
a
finance
company 
specializing
in
the
origination
of
small
loans
with 
25
offices
in
Puerto
Rico;
First
Management
of
Puerto
Rico,
a
Puerto
Rico 
corporation,
which
holds
tax-exempt
assets;
FirstBank
Overseas
Corporation,
an
international
banking
entity
(an
IBE)
organized 
under the
International Banking
Entity Act
of Puerto
Rico; two
companies engaged
in the
operation of
certain real
estate properties; 
and
a
limited
liability
corporation
organized
in
2022
under
the
laws
of
the
Commonwealth
of
Puerto
Rico
and
Puerto
Rico
Tax 
Incentives
Code
(Act
60
of 2019
),
which
commenced
operations
in
2023
and
engages in
investing
and
lending
transactions.
The 
limited liability corporation organized under the laws of Act 60
of 2019 has one wholly-owned subsidiary organized under such
laws.
General 
The accompanying
consolidated audited
financial statements have
been prepared in
conformity with generally
accepted accounting 
principles in the
United States of
America (GAAP). The
following is a description
of the Corporations
most significant accounting 
policies.
Principles of consolidation
The
consolidated
financial
statements
include
the
accounts
of
the
Corporation
and
its
subsidiaries.
All
significant
intercompany 
balances
and
transactions
have
been
eliminated
in
consolidation.
The
results
of
operations
of
companies
or
assets
acquired
in
a 
business combination are
included from the date
of acquisition. Entities in
which the Corporation
holds a controlling financial
interest 
are
consolidated.
For
a
voting
interest
entity,
a
controlling
financial
interest
is
generally
where
the
Corporation
holds,
directly
or 
indirectly,
more than 50 percent
of the outstanding voting
shares. For a variable
interest entity (VIE),
a controlling financial
interest 
is
where
the
Corporation
has
the
power
to
direct
the
activities
of
an
entity
that
most
significantly
impact
the
entitys
economic 
performance
and
has
an
obligation
to
absorb
losses
or
the
right
to
receive
benefits
from
the
VIE.
Statutory
business
trusts
that
are 
wholly
owned by
the Corporation
and are
issuers of
trust-preferred
securities (TruPS)
and
entities in
which the
Corporation has
a 
non-controlling
interest
are
not consolidated
in the
Corporations
consolidated
financial statements
in
accordance
with authoritative 
guidance issued by the
Financial Accounting Standards Board
(FASB) for
consolidation of VIEs. Additional
non-consolidated VIEs 
arise
from
transfers
of
residential
mortgage
loans
in
sale
or
securitization
transactions
in
which
it
has
continuing
involvement, 
including servicing responsibilities and guarantee arrangements.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
106 
Use of estimates in the preparation of financial statements
The
preparation
of
financial
statements
in
conformity
with GAAP
requires
management
to
make
estimates
and
assumptions
that 
significantly
affect
amounts
reported
in
the
consolidated
financial
statements.
Although
estimates
and
assumptions
about
future 
economic and market conditions (for
example, unemployment, market liquidity,
real estate prices, etc.) contemplate current
conditions 
and
how
we expect
them to
change in
the future,
it is
reasonably
possible
that actual
conditions
could be
worse
than anticipated
in 
those estimates, which could materially affect our results of operations
and financial condition. 
The Corporation
utilizes processes
that involve
the use
of significant
estimates and
the judgements
of management
in determining 
the amount
of its
ACL, as
well as
fair value
measurements of
investment securities,
goodwill, other
intangible assets,
pension plans, 
mortgage servicing rights, and loans held for sale. As with any estimate,
actual results could differ from those estimates.
Cash and cash equivalents
For purposes of
reporting cash
flows, cash and
cash equivalents include
cash on hand,
cash items in
transit, and
amounts due
from 
the Federal Reserve Bank of New York
(the FED) and other depository institutions. The
term also includes money market funds and 
short-term
investments
with
original
maturities
of
three
months
or
less
that
are
used
as
part
of
an
institutions
cash
management 
activities. 
As of
December 31,
2025 and
2024, the
Corporation maintained
$
0.8
million and
$
0.5
million, respectively,
in a
segregated time 
deposit held in accordance with the requirements of the Puerto Rico International
Banking Law.
Investment securities
The Corporation classifies its investments in debt and equity securities into one
of four categories: 
Held-to-maturity
Debt
securities that
the entity
has the
intent and
ability to
hold to
maturity.
These securities
are carried
at 
amortized
cost.
The
Corporation
may
not
sell
or
transfer
held-to-maturity
securities
without
calling
into
question
its
intent
to 
hold other debt securities to
maturity, unless
a nonrecurring or unusual event
that could not have been reasonably
anticipated has 
occurred. 
Trading
Debt securities that
are bought and
held principally for
the purpose of
selling them in
the near term.
These securities 
are
carried
at
fair
value,
with
unrealized
gains
and
losses
reported
in
earnings.
As
of
December
31,
2025
and
2024,
the 
Corporation did not hold debt securities for trading purposes. 
Available-for-sale
Debt
securities not
classified as
held-to-maturity or
trading. These
securities are
carried at
fair value,
with 
unrealized
holding
gains
and
losses,
net
of
deferred
taxes,
reported
in
other
comprehensive
loss
(OCL)
as
a
separate 
component of
stockholders equity.
The unrealized
holding gains
and losses
do not
affect earnings
until they
are realized,
or an 
ACL is recorded. 
Equity
securities
Equity
securities
that
do
not
have
readily
available
fair
values
are
classified
as
equity
securities
in
the 
consolidated
statements
of
financial
condition.
These
securities
are
stated
at
cost
less
impairment,
if
any.
This
category
is 
principally composed
of Federal Home
Loan Bank (FHLB)
stock that the
Corporation owns
to comply with
FHLB regulatory 
requirements.
The
realizable
value
of
the
FHLB
stock
equals
its
cost.
Also
included
in
this
category
are
marketable
equity 
securities held at fair value with changes in unrealized gains or losses recorded through
earnings in other non-interest income. 
Premiums
and
discounts
on
debt
securities
are
amortized
as an
adjustment
to
interest
income
on
investments
over
the life
of
the 
related securities
under the
interest method
without anticipating
prepayments, except
for mortgage-backed
securities (MBS)
where 
prepayments are anticipated. Premiums on
callable debt securities, if any,
are amortized to the earliest call date.
Purchases and sales of 
securities are
recognized on
a trade-date
basis, the
date the
order to
buy or
sell is executed.
Gains and
losses on
sales are
determined 
using the specific identification method. 
A debt
security
is placed
on nonaccrual
status at
the time
any
principal
or interest
payment
becomes 90 days
delinquent.
Interest 
accrued but
not received
for a
security placed
on nonaccrual
is reversed
against interest
income.
See Note
2 
Debt Securities
for 
additional information on nonaccrual debt securities. 
Allowance
for
Credit
Losses
Held-to-Maturity
Debt
Securities: 
As
of
December
31,
2025
and
2024,
the
held-to-maturity
debt 
securities portfolio consisted of U.S. government-sponsored
entities (GSEs) MBS and Puerto Rico municipal bonds. 
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
107 
The ACL
on held-to-maturity
debt securities
is based
on an
expected loss
methodology referred
to as
current expected
credit loss 
(CECL)
methodology
by
major
security
type.
Any
expected
credit
loss
is
provided
through
the
ACL
on
held-to-maturity
debt 
securities
and
is
deducted
from
the
amortized
cost
basis
of
the
security
so
that
the
statement
of
financial
condition
reflects
the
net 
amount the Corporation expects to collect. 
The Corporation
does not
recognize an
ACL for
GSEs MBS
since they
are either
explicitly or
implicitly guaranteed
by the
U.S. 
government,
are highly
rated by
major rating
agencies, and
have a
long history
of no
credit losses.
For the
ACL of
held-to-maturity 
Puerto
Rico municipal
bonds, the
Corporation
considers historical
credit loss
information
that is
adjusted for
current conditions
and 
reasonable
and
supportable
forecasts.
These
Puerto
Rico
municipal
obligations
typically
are
not
issued
in
bearer
form, nor
are
they 
registered
with
the
Securities
and
Exchange
Commission
(SEC)
and
are
not
rated
by
external
credit
agencies.
These
financing 
arrangements with Puerto
Rico municipalities were
issued in bond form
and accounted for as
securities but underwritten as
loans with 
features
that
are
typically
found
in
commercial
loans.
Accordingly,
similar
to
commercial
loans,
an
internal
risk
rating
(i.e.,
pass, 
special
mention,
substandard,
doubtful,
or
loss)
is
assigned
to
each
bond
at
the
time
of
issuance
or
acquisition
and
monitored
on
a 
continuous basis with a formal
assessment generally completed
on a quarterly basis. The
Corporation determines the ACL
for held-to-
maturity
Puerto
Rico
municipal
bonds
based
on
the
product
of
a
cumulative
probability
of
default
(PD)
and
loss
given
default 
(LGD),
and
the
amortized
cost
basis
of
each
bond
over
its
remaining
expected
life.
PD
estimates
are
updated
quarterly
and 
incorporate
payment
performance,
financial
and
market
indicators,
and
current
and
forecasted
relevant
forward-looking 
macroeconomic
variables
to
determine
a
lifetime
term
structure
PD curve.
LGD
estimates
consider
historical
charge-off
events and 
recovery
payments (if
any), government
sector historical
loss experience,
as well
as relevant
current and
forecasted macroeconomic 
expectations
of
variables,
such
as
unemployment
rates,
interest
rates,
and
market
risk
factors
based
on
industry
performance,
to 
determine a
lifetime term
structure LGD
curve. Under
this approach,
all future
period losses for
each instrument
are calculated
using 
the PD and
LGD loss rates
derived from
the term structure
curves applied to
the amortized cost
basis of each
bond. The methodology 
uses
a
two-year
reasonable
and
supportable
forecast
period
followed
by
an
up
to
three-year
straight-line
reversion
to
the
historical 
macroeconomic
mean. After
reaching the
long-term historical
averages, the
Corporation continues
to estimate
expected credit
losses 
using
the
same
forecast
framework,
with
macroeconomic
variables
assumed
to
fluctuate
around
their
long-term
averages
over
the 
remaining
expected
life
of
the instruments.
The
Corporation
also
evaluates
the
need
for
qualitative
adjustments,
which
may
reflect 
economic
uncertainties,
organization-specific
risks
such
as
credit
concentrations,
collateral
considerations,
portfolio-specific
risk 
characteristics, changes in underwriting or resolution practices, and other relevant
internal or external factors. 
The Corporation
has elected not
to measure
an ACL on
accrued interest related
to held-to-maturity
debt securities,
as uncollectible 
accrued interest
receivables are written
off on
a timely manner.
See Note 2
Debt Securities
for additional
information about
ACL 
balances for held-to-maturity debt securities and activity during
the years ended December 31, 2025, 2024, and 2023. 
Allowance
for
Credit
Losses
Available-for-Sale
Debt
Securities: 
For
available-for-sale
debt
securities
in
an
unrealized
loss 
position, the Corporation first assesses whether
it intends to sell, or it is more
likely than not that it will be required
to sell, the security 
before
recovery
of
its
amortized
cost
basis.
If
either
condition
is
met,
the
difference
between
fair
value
and
amortized
cost
is 
considered
to
be
impaired
and
recognized
in
provision
for
credit
losses.
For
available-for-sale
debt
securities
that
do
not
meet
the 
aforementioned
criteria,
the Corporation
evaluates
whether the
decline
in fair
value
has resulted
from
credit factors
or other
market 
conditions.
This
assessment
considers
the
issuers
liquidity
and
capital
strength,
the
severity
and
duration
of
the
unrealized
loss, 
changes
in
credit
quality,
payment
performance,
relevant
financial
information,
industry
and
legislative
developments,
and,
when 
applicable,
changes
in
collateral
performance
such
as
default
rates,
loss
severity,
prepayment
expectations,
and
cash
flow
trends. 
When
credit
loss indicators
are
present,
the
Corporation
compares
the
present
value
of expected
future
cash
flows
to
the
securitys 
amortized
cost. If
the present
value
of expected
future cash
flows is
lower,
a credit
loss is
recorded
through an
ACL, limited
to the 
amount by
which fair
value is
below amortized
cost. Any
remaining decline
in fair
value not
related to
credit is
recognized in
OCL. 
Non-credit-related losses typically arise from factors, such as widening liquidity spreads
or rising interest rates. 
Losses
are
charged
against
the
ACL
when
management
believes
the
uncollectability
of
an
available-for-sale
debt
security
is 
confirmed or
when either
of the
criteria regarding
intent or requirement
to sell
is met.
The Corporation
has elected
not to measure
an 
ACL on
accrued interest
related to
available-for-sale
debt
securities as
uncollectible
accrued
interest receivables
are written
off
in a 
timely manner as indicated above. 
Substantially all
of the
Corporations
available-for-sale debt
securities are
issued by
GSEs. These
securities are
either explicitly
or 
implicitly guaranteed
by the
U.S. government,
are highly
rated by
major rating
agencies, and
have a
long history
of no
credit losses. 
Accordingly,
there is a zero-credit
loss expectation on these
securities. For further information,
including the assumptions used
for the 
discounted cash flow analyses performed
on other available-for-sale debt securities
such as private label MBS and bonds
issued by the 
Puerto Rico Housing Finance Authority (PRHFA),
see Note 19 Fair Value.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
108 
Loans held for investment 
Loans that the
Corporation has the
ability and
intent to hold
for the foreseeable
future,
or until maturity
or payoff,
are classified as 
held
for
investment
and
are
reported
at
amortized
cost,
net
of
its
ACL.
The
substantial
majority
of
the
Corporations
loans
are 
classified as held for investment.
Amortized cost is the principal outstanding
balance, net of unearned interest, cumulative
charge-offs, 
unamortized deferred
origination fees
and costs,
and unamortized
premiums and
discounts. The
Corporation reports
credit card
loans 
at
their
outstanding
unpaid
principal
balance
plus
uncollected
billed
interest
and
fees
net
of
such
amounts
deemed
uncollectible. 
Interest
income
is
accrued
on
the
unpaid
principal
balance.
Fees
collected
and
costs
incurred
in
the
origination
of
new
loans
are 
deferred
and amortized
using the
interest method
or a
method that
approximates the
interest method
over the
term of
the loan
as an 
adjustment to
interest yield.
Unearned
interest on
certain personal
loans, auto
loans,
and finance
leases and
discounts and
premiums 
are
recognized
as
income
under
a
method
that
approximates
the
interest
method.
When
a
loan
is
paid-off
or
sold,
any
remaining 
unamortized net deferred fees, or costs, discounts and premiums are included
in loan interest income in the period of payoff. 
Nonaccrual
and
Past-Due
Loans
Loans
on
which
the
recognition
of
interest
income
has
been
discontinued
are
designated
as 
nonaccrual.
Loans
are
classified
as
nonaccrual
when
they
are 
90
days
past
due
for
interest
and
principal,
except
for
residential 
mortgage loans insured or guaranteed
by the Federal Housing Administration
(the FHA), the Veterans
Administration (the VA)
or 
the
PRHFA,
and
credit
card
loans.
It
is
the
Corporations
policy
to
report
delinquent
mortgage
loans
insured
by
the
FHA,
or 
guaranteed by
the VA
or the
PRHFA,
as loans
past due 
90
days and
still accruing
as opposed
to nonaccrual
loans since
the principal 
repayment
is
insured
or
guaranteed,
and
such
loans
continue
to
accrue
interest
at
the
rate
guaranteed
by
the
government
agency. 
However,
when
such FHA/VA
loans are
over 
15
months delinquent,
the Corporation
discontinues the
recognition
of income
taking 
into
consideration
the
FHA
interest
curtailment
process,
and
with
respect
to
PRHFA
loans
when
such
loans
are
over 
90
days 
delinquent. Credit card loans continue
to accrue finance charges and
fees until charged off at 
180
days. Loans generally may be placed 
on nonaccrual status
prior to when required
by the policies described
above when the full
and timely collection
of interest or principal 
becomes
uncertain
(generally
based
on
an
assessment
of
the
borrowers
financial
condition
and
the
adequacy
of
collateral,
if
any). 
When
a
loan
is
placed
on
nonaccrual
status,
any
accrued
but
uncollected
interest
income
is
reversed
and
charged
against
interest 
income and amortization
of any net
deferred fees is suspended.
Interest income on
nonaccrual loans is recognized
only to the extent
it 
is received in
cash. However,
when there is
doubt regarding the
ultimate collectability of
loan principal, all
cash thereafter received
is 
applied to reduce
the carrying value of
such loans (
i.e.
, the cost recovery
method). Under the cost-recovery
method, interest income
is 
not recognized until the loan
balance has been collected
in full, including the charged
-off portion.
Generally,
the Corporation returns a 
loan
to
accrual
status
when
all
delinquent
interest
and
principal
becomes
current
under
the
terms
of
the
loan
agreement,
or
after
a 
sustained
period
of
repayment
performance
(
six months
)
and
the
loan
is
well
secured
and
in
the
process
of
collection,
and
full 
repayment of
the remaining
contractual principal
and interest
is expected.
Loans that
are past
due 30
days or
more as
to principal
or 
interest
are
considered
delinquent,
with
the
exception
of residential
mortgage,
commercial
mortgage,
and
construction
loans,
which 
are
considered
past
due
when
the
borrower
is
in
arrears
on
two
or
more
monthly
payments.
The
Corporation
has
elected
not
to 
measure an ACL on accrued interest related to loans held for investment
as uncollectible accrued interest receivables are written off
on 
a timely manner. 
Collateral-dependent Loans 
Certain commercial,
residential and consumer
loans for which
repayment is expected
to be provided 
substantially
through
the
operation
or
sale
of
the
loan
collateral
are
considered
to
be
collateral-dependent.
Commercial
and 
construction loans of $
0.5
million or more and for
which borrowers exhibit specific
risk characteristics, such as repayment
capacity or 
credit
deterioration,
are
considered
collateral
dependent.
Residential
mortgage
loans and
home
equity
lines
of
credit
are
considered 
collateral dependent when
they are 
180
days or more past
due. The ACL of
collateral dependent loans is
based on the fair
value of the 
collateral at
the reporting
date, adjusted
for undiscounted
estimated costs
to sell,
as further
discussed below.
Auto loans
and finance 
leases are not considered collateral dependent because its ACL is calculated using
a PD/LGD model as further discussed below. 
Charge-off
of Uncollectible
Loans
Net charge
-offs consist
of the
unpaid principal
balances of
loans held
for investment
that the 
Corporation
determines are
uncollectible,
net of
recovered amounts.
The Corporation
records charge
-offs as
a reduction
to the
ACL 
and subsequent recoveries of previously charged-off
amounts are credited to the ACL.
Construction,
commercial
mortgage,
and
commercial
and
industrial
(C&I)
loans
are
written
down
to
their
net
realizable
value 
(fair value
of collateral,
less estimated
costs to
sell) when
considered to
be uncollectible.
Within the
consumer loan
portfolio,
closed-
end
consumer
loans,
including
auto
loans
and
finance
leases,
are
charged
off
when
payments
are 
120
days
in
arrears.
Open-end 
(revolving
credit)
consumer
loans,
including
credit
card
loans,
are
charged
off
when
payments
are 
180
days
in
arrears.
Residential 
mortgage loans that are 
180
days delinquent are reviewed
and charged-off, as
needed, to the fair value
of the underlying collateral less 
cost to
sell. Generally,
all loans
may be
charged
off or
written down
to the
fair value
of the
collateral prior
to the
application
of the 
policies described
above if
a loss-confirming
event has
occurred. Loss-confirming
events include,
but are
not limited
to, bankruptcy 
(unsecured), continued delinquency,
or receipt of an
asset valuation indicating
a collateral deficiency
when the asset is the
sole source 
of repayment.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
109 
Modifications
Granted
to
Debtors
Experiencing
Financial
Difficulties 
The
Corporation
discloses
loan
modifications
granted
to 
debtors
experiencing
financial
difficulties
when,
during
the
reporting
period,
the
timing
and/or
amount
of
contractual
cash
flows
is 
changed through a
reduction in interest
rate, term extension, an
other-than-insignificant payment
delay, or
any combination thereof. 
A 
debtor is considered to be experiencing financial
difficulties when there is significant doubt about
the debtors ability to make required 
payments
on
the
debt
or
to
get
equivalent
financing
from
another
creditor
at
a
market
rate
for
similar
debt.
Modified
loans
are 
classified as either accrual or
nonaccrual loans. Loans in
accrual status may remain
in accrual status when their
contractual terms have 
been modified if
the loans had demonstrated
performance prior to the
restructuring and payment
in full under the
restructured terms is 
expected.
Otherwise,
modified
loans on
nonaccrual
status at
the
time of
the restructuring
will remain
on nonaccrual
status until
the 
borrower has proven the ability
to perform under the modified
structure, generally for a
minimum of six months, and
there is evidence 
that such
payments can,
and are
likely to,
continue as
agreed. Furthermore,
the Corporation
applies a
non-discounted flow
portfolio-
based approach for the estimation of the ACL of modified loans to borrowers experiencing
financial difficulties for all portfolios.
Allowance for credit losses for loans and finance leases 
The ACL
for
loans and
finance leases
held
for
investment
is a
valuation
account
that is
deducted
from the
loans
amortized
cost 
basis to present
the net amount expected
to be collected on
loans. Loans are charged
-off against the
ACL when management
confirms 
the loan balance is uncollectable.
The Corporation estimates the
ACL 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
any
difference
in
underwriting
standards,
portfolio
mix,
delinquency
level,
or
term.
Additionally,
the 
Corporations
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.
Expected
credit losses
are
estimated 
over the contractual term
of the loans, adjusted by
prepayments when appropriate.
The contractual term excludes
expected extensions, 
and renewals,
unless
the extension or renewal options are included in
the original or modified contract at the reporting date and
are not 
unconditionally cancellable by the Corporation. 
The
Corporation
estimates
the
ACL
primarily
based
on
a
PD/LGD
modeled
approach,
or
individually
primarily
for
collateral 
dependent loans. The Corporation
evaluates the need for changes
to the ACL by portfolio
segments and classes of loans
within certain 
of
those
portfolio
segments.
Factors
such
as
the
credit
risk
inherent
in
a
portfolio
and
how
the
Corporation
monitors
the
related 
quality, as well as the estimation
approach to estimate credit losses, are considered in the determination
of such portfolio segments and 
classes. The Corporation has identified the following portfolio segments: 
Residential
mortgage 
Residential
mortgage
loans
are
loans
secured
by
residential
real
property
together
with
the
right
to 
receive
the payment
of principal
and interest
on the
loan. The
majority of
the Corporations
residential
loans are
fixed-rate 
first lien closed-end loans secured by 1-4 single-family residential properties.
Commercial
mortgage
Commercial
mortgage
loans
are
loans
secured
primarily
by
commercial
real
estate
properties
for 
which
the
primary
source
of
repayment
comes
from
rent
and
lease
payments
that
are
generated
by
an
income-producing 
property. 
Commercial and Industrial
C&I loans include both unsecured and secured loans
for which the primary source of repayment 
comes
from
the
ongoing
operations
and
activities
conducted
by
the
borrower
and
not
from
rental
income
or
the
sale
or 
refinancing
of
any
underlying
real
estate
collateral;
thus,
credit
risk
is
largely
dependent
on
the
commercial
borrowers 
current
and
expected
financial condition.
The
C&I
loan
portfolio
consists
of
loans
granted
to
large
corporate
customers
as 
well as middle-market customers across several industries, and
the government sector. 
Construction
Construction
loans
consist
generally
of
loans
secured
by
real
estate
made
to
finance
the
construction
of 
industrial, commercial, or residential
buildings and include loans to
finance land development in preparation
for erecting new 
structures.
These
loans
involve
an
inherently
higher
level
of
risk
and
sensitivity
to
market
conditions.
Demand
from 
prospective tenants or purchasers may erode after construction begins because
of a general economic slowdown or otherwise. 
Consumer
Consumer loans generally
consist of secured
and unsecured loans
extended to individuals
for household, family, 
and other personal expenditures, including several classes of products. 
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
110 
For
purposes
of
the
ACL
determination,
the
Corporation
stratifies
portfolio
segments
by
two
main
regions
(
i.e.,
the
Puerto 
Rico/Virgin
Islands
region
and
the
Florida
region).
The
ACL
is
measured
using
a
PD/LGD
model
that
is
calculated
based
on
the 
product of a
cumulative PD and
LGD. PD and
LGD estimates are
updated quarterly
for each loan
over the remaining
expected life
to 
determine
lifetime
term
structure
curves.
Under
this approach,
the
Corporation
calculates losses
for
each
loan
for
all future
periods 
using the
PD and
LGD loss
rates derived
from the
term structure
curves applied
to the
amortized cost
basis of
the loans,
considering 
prepayments. 
For
residential
mortgage
loans,
the
Corporation
stratifies
the
portfolio
segment
by
the
following
two
classes:
(i)
government-
guaranteed
residential
mortgage
loans,
and
(ii)
conventional
mortgage
loans.
Government-guaranteed
loans
are
those
originated
to 
qualified
borrowers
under
the
FHA
and
the
VA
standards.
Originated
loans
that
meet
the
FHAs
standards
qualify
for
the
FHAs 
insurance program whereas
loans that meet the
standards of the VA
are guaranteed by
such entity.
No credit losses are
determined for 
loans insured or guaranteed
by the FHA or the VA
due to the explicit
guarantee of the U.S. federal
government. On the other
hand, an 
ACL is
calculated for
conventional
residential mortgage
loans, which
are loans
that do
not qualify
under the
FHA or
VA
programs. 
PD
estimates
are
based
on,
among
other
things,
historical
payment
performance
and
relevant
current
and
forward-looking 
macroeconomic variables,
such as
regional unemployment
rates. LGD
estimates are
based on,
among other
things, historical
charge-
off events
and recovery
payments, loan-to-value
attributes, and
relevant current
and forecasted
macroeconomic variables,
such as
the 
regional House Price Index. 
For
commercial
mortgage
and
construction
loans,
PD
estimates
are
based
on,
among
other
things,
industry
historical
default 
experience, property
type, occupancy,
and relevant
current and
forward-looking
macroeconomic
variables. LGD
estimates are
based 
on
historical
charge-off
events
and
recovery
payments,
industry
historical
loss
experience,
specific
attributes
of
the
loans,
such
as 
loan-to-value,
debt
service
coverage
ratios,
and
net
operating
income,
as
well
as
relevant
current
and
forecasted
macroeconomic 
variables
expectations,
such
as
commercial
real
estate
price
indexes,
the
gross
domestic
product
(GDP),
interest
rates,
and 
unemployment rates, among others. 
For C&I loans, PD estimates
are based on industry historical default
experience, financial performance and market
value indicators, 
and
current
and
forecasted
relevant
forward-looking
macroeconomic
variables.
LGD
estimates
are
based
on
industry historical
loss 
experience,
specific
attributes
of
the
loans,
such
as
loan
to
value,
as
well
as
relevant
current
and
forecasted
expectations
for 
macroeconomic variables,
such as unemployment
rates, interest
rates, and
market risk
factors based
on industry
performance and
the 
equity market. 
For consumer loans,
the Corporation stratifies
the portfolio segment by
the following five classes: (i)
auto loans; (ii) finance
leases; 
(iii) credit
cards; (iv)
personal loans;
and (v)
other consumer
loans, such
as open-end
home equity
revolving lines
of credit
and other 
types
of
consumer
credit
lines,
among
others.
In
determining
the
ACL,
management
considers
consumer
loans
risk
characteristics 
including, but not limited to, credit quality indicators
such as payment performance period, delinquency and original
FICO scores. The 
PD
estimates
are
based
on,
among
other
things,
the
historical
payment
performance
and
relevant
current
and
forward-looking 
macroeconomic
variables,
such as
regional
unemployment
rates.
LGD
estimates
are
primarily
based
on
historical
charge-off
events 
and recovery payments.
For the
ACL determination
of all
portfolios, the
expectations for
relevant macroeconomic
variables related
to the
Puerto Rico
and 
Virgin
Islands
region consider
an initial
reasonable
and
supportable
period of 
two years
and
a
reversion
period
of up
to 
three years
, 
utilizing a
straight-line approach
and reverting
back to
the historical
macroeconomic
mean. For
the Florida
region, the
methodology 
considers
a
reasonable
and
supportable
forecast
period
and
an
implicit
reversion
towards
the
historical
trend
that
varies
for
each 
macroeconomic
variable.
After
reaching
the
long-term
historical
averages,
the
Corporation
continues
to
estimate
expected
credit 
losses using
the same
forecast framework,
with macroeconomic
variables assumed
to fluctuate
around their
long-term averages
over 
the remaining expected life of the instruments. 
Furthermore, the
Corporation periodically
considers the
need for
qualitative adjustments
to the
ACL. Qualitative
adjustments may 
be related to
and include, but not
be limited to,
factors such as: (i)
managements
assessment of economic
forecasts used in
the model 
and how
those forecasts
align with
managements
overall evaluation
of current
and expected
economic conditions,
including, but
not 
limited to,
expectations about
interest rate,
inflation, and
real estate
price levels,
as well
as labor
market challenges;
(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
of
non-collateral
dependent
loans
previously
written
down
to
their
respective
realizable
values
is
generally
measured 
using a risk-adjusted discounted
cash flow method. Under this
approach, all future cash
flows (interest and principal) for
each loan are 
adjusted by
the PDs
and LGDs
derived from
the term
structure curves
and prepayments
and then
discounted at
the effective
interest 
rate as of the reporting date to arrive at the net present value of future cash
flows. 
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
111 
See Note
4 
Allowance
for Credit
Losses for
Loans
and Finance
Leases for
additional information
about reserve
balances
for 
each portfolio segment and activity during the years ended December
31, 2025, 2024, and 2023.
Allowance for credit losses on off-balance sheet credit exposures and
other assets 
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
unless
the
obligation
is
unconditionally
cancellable
by
the
Corporation.
The
ACL
on
off-
balance sheet
credit exposures is
adjusted as a
provision for credit
loss expense. The
estimate includes consideration
of the likelihood 
that funding
will occur
and an estimate
of expected
credit losses on
commitments expected
to be
funded over
its expected
life. As
of 
December 31,
2025 and
2024, the
off-balance
sheet credit
exposures primarily
consisted of
unfunded loan
commitments and
standby 
letters of credit for
commercial and construction
loans. The Corporation
utilized the PDs and
LGDs derived from the
above-explained 
methodologies
for
the
commercial
and
construction
loan
portfolios.
Under
this
approach,
all
future
period
losses
for
each
loan
are 
calculated using
the PD
and LGD
loss rates
derived from
the term
structure curves
applied to
the usage
given default
exposure.
The 
ACL on
off-balance sheet
credit exposures
is included
as part of
accounts payable
and other
liabilities in
the consolidated
statements 
of financial condition with adjustments included as part of the provision
for credit losses in the consolidated statements of income.
See Note
4 
Allowance
for Credit
Losses for
Loans
and
Finance
Leases for
additional information
about reserve
balances
for 
unfunded loan commitments and activity during the years ended December 31,
2025, 2024, and 2023. 
The
Corporation
also
estimates
expected
credit
losses
for
certain
accounts
receivable,
primarily
claims
from
government-
guaranteed
loans,
loan
servicing-related
receivables,
and
other
receivables.
The
ACL
on other
assets
measured
at
amortized
cost
is 
included
as part
of other
assets in
the consolidated
statements of
financial condition
with adjustments
included
as part
of other
non-
interest expenses
in the consolidated
statements of income.
As of December
31, 2025 and
2024, the
ACL on other
assets measured at 
amortized cost was immaterial.
Loans held for sale
Loans
that the
Corporation
intends to
sell or
that
the Corporation
does not
have
the ability
and
intent to
hold
for the
foreseeable 
future
are
classified
as
held-for-sale
loans.
Loans
held
for
sale
are
recorded
at
the
lower
of
cost
or
fair
value
less
costs
to
sell. 
Generally,
the
loans
held-for-sale
portfolio
consists
of
conforming
residential
mortgage
loans
that
will
be
pooled
into
Government 
National Mortgage Association (GNMA)
MBS, which are then sold to
investors, and conforming residential mortgage
loans that the 
Corporation intends
to sell to
GSEs, such as
the Federal National
Mortgage Association
(FNMA) and the
U.S. Federal Home
Loan 
Mortgage Corporation (FHLMC).
Generally,
residential mortgage
loans held for sale
are valued on
an aggregate portfolio
basis and 
the
value
is
primarily
derived
from
quotations
based
on
the
MBS
market.
The
amount
by
which
cost
exceeds
market
value
in
the 
aggregate portfolio
of residential
mortgage loans
held for
sale, if
any,
is accounted
for as
a valuation
allowance with
changes therein 
included
in
the
determination
of
net
income
and
reported
as
part
of
mortgage
banking
activities
in
the
consolidated
statements
of 
income.
Loan
costs
and
fees
are
deferred
at
origination
and
are
recognized
in
income
at
the
time
of
sale
and
are
included
in
the 
amortized cost basis when
evaluating the need for
a valuation allowance. The
fair value of commercial and
construction loans held for 
sale, if any,
is primarily derived
from external appraisals,
or broker price
opinions that the
Corporation considers,
with changes in
the 
valuation allowance reported as part of other non-interest income
in the consolidated statements of income. 
In certain circumstances,
the Corporation transfers
loans from/to held
for sale or held
for investment based
on a change in
strategy. 
If such a
change in holding
strategy is made, significant
adjustments to the loans
carrying values may
be necessary.
Reclassifications 
of loans held
for investment to held
for sale are made
at the amortized
cost on the date
of transfer and
establish a new cost
basis upon 
transfer.
Write-downs of
loans transferred from
held for investment
to held for
sale are recorded
as charge-offs at
the time of
transfer. 
Any
previously
recorded
ACL
is
reversed
in
earnings
after
applying
the
write-down
policy.
Subsequent
changes
in
value
below 
amortized cost
are recorded
through a
valuation allowance
and are
reflected in
non-interest income
in the
consolidated statements
of 
income.
Reclassifications
of
loans
held
for
sale
to
held
for
investment
are
made
at
the
amortized
cost
on
the
transfer
date
and
any 
previously
recorded valuation
allowance is
reversed in
earnings. Upon
transfer to
held for
investment, the
Corporation calculates
an 
ACL using the CECL impairment model.
Transfers and servicing of financial assets and extinguishment
of liabilities
After a transfer of
financial assets in a
transaction that qualifies
for accounting as
a sale, the Corporation
derecognizes the financial 
assets when it has surrendered control and derecognizes liabilities when they
are extinguished. 
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
112 
A transfer of financial
assets in which the
Corporation surrenders control
over the assets is
accounted for as
a sale to the extent
that 
consideration other
than beneficial
interests is
received in
exchange. The
criteria that
must be
met to
determine that
the control
over 
transferred
assets has
been surrendered
include
the following:
(i) the assets
must be
isolated from
creditors of
the transferor;
(ii) the 
transferee
must
obtain
the
right
(free
of
conditions
that
constrain
it
from
taking
advantage
of
that
right)
to
pledge
or
exchange
the 
transferred
assets;
and
(iii) the
transferor
cannot
maintain
effective
control
over
the
transferred
assets
through
an
agreement
to 
repurchase
them
before
their
maturity.
When
the
Corporation
transfers
financial
assets
and
the
transfer
fails
any
one
of
the
above 
criteria,
the
Corporation
is
prevented
from
derecognizing
the
transferred
financial
assets
and
the
transaction
is
accounted
for
as
a 
secured borrowing. 
Servicing assets 
The Corporation recognizes
as separate assets the
rights to service
loans for others,
whether those servicing
assets are originated
or 
purchased. In the ordinary course of business, loans are
pooled into GNMA MBS for sale in the secondary
market or sold to FNMA or 
FHLMC,
with
servicing
retained.
When
the
Corporation
sells mortgage
loans,
it recognizes
any
retained
servicing
right
(servicing 
assets or MSRs) at the time of sale, based on its fair value. 
MSRs
retained
in
a
sale
or
securitization
arise
from
contractual
agreements
between
the
Corporation
and
investors
in
MBS
and 
mortgage
loans.
Under
these
contracts,
the
Corporation
performs
loan-servicing
functions
in
exchange
for
fees
and
other 
remuneration. The
MSRs, included as
part of other
assets in the
statements of financial
condition, entitle
the Corporation to
servicing 
fees
based
on
the
outstanding
principal
balance
of
the
mortgage
loans
and
the
contractual
servicing
rate.
The
servicing
fees
are 
credited
to
income
on
a
monthly
basis
when
collected
and
recorded
as
part
of
mortgage
banking
activities
in
the
consolidated 
statements of income. In
addition, the Corporation generally receives
other remuneration consisting of
mortgagor-contracted fees such 
as late charges and prepayment penalties, which are credited to income
when collected. 
Considerable judgment is required
to determine the fair value of
the Corporations
MSRs. Unlike highly liquid investments,
the fair 
value
of
MSRs
cannot
be
readily
determined
because
these
assets
are
not
actively
traded
in
securities
markets.
The
initial
carrying 
value
of
an
MSR is
determined
based
on
its fair
value.
The Corporation
determines
the
fair
value
of
the
MSRs using
a
discounted 
static cash
flow analysis,
which incorporates
current market
assumptions commonly
used by
buyers of
these MSRs
and was
derived 
from
prevailing
conditions
in
the
secondary
servicing
market.
The
valuation
of
the
Corporations
MSRs
incorporates
two
sets
of 
assumptions: (i) market-derived
assumptions for discount
rates, servicing costs,
escrow earnings rates,
floating earnings rates,
and the 
cost
of
funds;
and
(ii) market
assumptions
calibrated
to
the
Corporations
loan
characteristics
and
portfolio
behavior
for
escrow 
balances, delinquencies and foreclosures, late fees, prepayments, and prepayment
penalties. 
The
Corporation
periodically
evaluates
MSRs
for
impairment.
Impairments
are
recognized
through
a
valuation
allowance
by 
individual strata
based on
certain risk
characteristics, such
as region,
terms, and
coupons. Impairment
charges are
recorded as
part of 
revenues from
mortgage banking
activities in the
consolidated statements
of income.
If the value
of the MSR
subsequently increases, 
the
recovery
in
value
is
recognized
in
current
period
earnings
also
as
part
of
revenues
from
mortgage
banking
activities
through
a 
reduction in
the valuation allowance.
The Corporation
also assesses whether
any impairment
is other-than-temporary.
When recovery 
is not expected in the foreseeable future, the MSR is written down to its estimated recoverable
value through the valuation allowance. 
MSRs
are
amortized
over
the
estimated
life
of
the
underlying
loans
using
the
income
forecast
method.
Under
this
method, 
amortization
is based
on projected
cash flows,
with each
periods
expense determined
by applying
to the
MSR carrying
amount the 
ratio of current-period projected cash flows to total remaining forecasted
cash flows. 
As of each
of December 31,
2025 and 2024,
the Corporation serviced
loans securitized through
GNMA with a
principal balance of 
$
2.1
billion.
As
of
December
31,
2025,
the
carrying
amount
of
total
MSRs
totaled
$
23.3
million,
compared
to
$
25.0
million
as
of 
December
31,
2024.
The
year-over-year
decrease
primarily
reflects
$
4.3
million
in
amortization
expense,
partially
offset
by
$
2.6
million
in
capitalized
MSRs
recorded
during
2025.
Sensitivity
analyses
as
of
each
of
December
31,
2025
and
2024
indicate
that 
increases
in
the
constant
prepayment
rate
(CPR)
of 
10
%
and 
20
%
would
reduce
the
MSR
value
by
approximately 
2
%
and 
4
%, 
respectively.
Similarly,
increases in
the discount
rate of 
10
% and 
20
% would
reduce the
MSR value
by approximately 
4
% and 
8
%, 
respectively.
The
CPR assumptions
used
in
the
valuation
were 
6.06
% and 
6.34
% as
of December
31,
2025
and
2024,
respectively, 
while the
discount rate
assumptions were 
10.77
% and 
10.72
% for
the same
periods. Key
economic assumptions
used in
determining 
the fair
value of
MSRs capitalized
during the
years ended
December 31,
2025, 2024,
and 2023
were consistent
with those
applied to 
total MSRs.
See Note
19 
Fair Value
for information
on the
fair value
of MSRs
as of
December 31,
2025 and
2024. For
the year 
ended
December
31,
2025,
the
Corporation
recognized
$
6.4
million
in
net
servicing
income,
included
within 
mortgage banking
activities in the consolidated
statements of income. This amount
reflects $
10.0
million in servicing fee income,
partially offset by
$
4.3
million in amortization
expense. This compares
to $
6.8
million in net
servicing income for
the year ended
December 31, 2024,
which 
included $
10.3
million in servicing
fee income and
$
4.2
million in amortization
expense, and $
7.0
million in net
servicing income
for 
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
113 
the year
ended December
31, 2023,
which included
$
10.6
million in
servicing fee
income and
$
4.3
million in
amortization
expense. 
Temporary impairment
charges during the years ended December 31, 2025, 2024, and 2023 were not
considered significant.
Premises and equipment 
Premises and
equipment are
carried at cost,
net of
accumulated depreciation
and amortization.
Depreciation is
calculated using
the 
straight-line method over the estimated useful
life of each type of asset. Amortization of
leasehold improvements is computed over
the 
terms
of
the
leases
(
i.e.
,
the
contractual
term
plus
lease
renewals
that
are
reasonably
assured)
or
the
estimated
useful
lives
of
the 
improvements, whichever
is shorter.
Costs of
maintenance and
repairs that
do not
improve or
extend the
life of
the respective
assets 
are expensed
as incurred.
Costs of
renewals and
betterments
are capitalized.
When
the Corporation
sells or
disposes
of
assets, their 
cost and related
accumulated depreciation
are removed from
the accounts and
any gain or
loss is reflected
in earnings as
part of other 
non-interest
income
in
the
consolidated
statements
of
income.
When
the
asset
is
no
longer
used
in
operations,
and
the Corporation 
intends to
sell it,
the asset
is reclassified
to other
assets held
for sale
and is
reported at
the lower
of the
carrying amount
or fair
value 
less cost to
sell. Premises
and equipment
are evaluated
for impairment
whenever events
or changes
in circumstances
indicate that
the 
carrying amount
of the
asset may
not be
recoverable. Impairments
on premises
and equipment
are included
as part of
occupancy and 
equipment expenses in the consolidated statements of income.
Operating leases 
The Corporation,
as lessee,
determines
if an
arrangement
is a
lease or
contains a
lease at
inception.
Operating
lease liabilities
are 
recognized
based
on
the
present
value
of
the
remaining
lease
payments,
discounted
using
the
discount
rate
for
the
lease
at
the 
commencement
date,
or
at
acquisition
date
in
case
of
a
business
combination.
As
the
rates
implicit
in
the
Corporations
operating 
leases
are
not
readily
determinable,
the
Corporation
generally
uses
an
incremental
borrowing
rate,
calculated
based
on
fully 
amortizing
secured
borrowings.
Operating
right-of-use
(ROU)
assets
are
generally
recognized
based
on
the
amount
of
the
initial 
measurement of the lease
liability. Non-lease
components, such as common
area maintenance charges,
are not considered a part
of the 
gross-up
of
the
ROU
asset
and
lease
liability
and
are
recognized
as
incurred.
The
Corporations
leases
are
primarily
related
to 
operating
leases for
the Banks
branches.
The Corporation
does not
recognize ROU
assets and
lease liabilities
that arise
from short-
term
leases (less
than
12
months).
Operating
lease
expense,
which
is included
as part
of occupancy
and
equipment
expenses in
the 
consolidated
statements
of
income,
is
recognized
on
a
straight-line
basis
over
the
lease
term
that
is
based
on
the
Corporations 
assessment of whether
the renewal options
are reasonably certain
to be exercised.
The Corporation includes
the ROU assets
and lease 
liabilities
as
part
of
other
assets
and
accounts
payable
and
other
liabilities,
respectively,
in
the
consolidated
statements
of
financial 
condition.
As of December 31, 2025 and 2024, the Corporation, as lessee, did 
no
t have any leases that qualified as finance leases.
Other real estate owned
OREO,
which
consists
of
real estate
acquired
in
settlement of
loans,
is recorded
at fair
value
less estimated
costs to
sell the
real 
estate acquired.
Generally,
loans
have
been
written down
to their
net realizable
value
prior
to
foreclosure.
Any further
reduction
to 
their
net
realizable
value
is
recorded
with
a
charge
to
the
ACL
at
the
time
of
foreclosure
or
within
six
months
after
foreclosure. 
Thereafter, costs of maintaining and
operating these properties, losses recognized on the periodic reevaluations of
these properties, and 
gains or
losses resulting
from the
sale of
these properties
are charged
or credited
to earnings
and are
included as
part of
net gain
on 
OREO operations in the consolidated statements of income. Appraisals are obtained
periodically, generally
on an annual basis
. 
Claims arising from FHA/VA
government-guaranteed residential mortgage loans
Upon
the
foreclosure
on
property
collateralizing
an
FHA/VA
government-guaranteed
residential
mortgage
loan,
the
Corporation 
derecognizes
the
government-guaranteed
mortgage
loan
and
recognizes
a
receivable
as
part
of
other
assets
in
the
consolidated 
statements
of
condition
if
the
conditions
in
ASC
Subtopic
310-40,
Reclassification
of
Residential
Real
Estate
Collateralized 
Consumer
Mortgage
Loans
upon
Foreclosure,
(ASC
Subtopic
310-40)
are
met.
See
Note
6
Other
Real
Estate
Owned
for 
additional information
on foreclosures
associated to
FHA/VA
government-guaranteed residential
mortgage loans
reclassified to
other 
assets as of December 31, 2025 and 2024.
Goodwill and other intangible assets 
Goodwill
Goodwill
represents the
excess of
the purchase
price
over the
fair value
of net
assets acquired
(including
identifiable 
intangibles) in business combinations.
The Corporation allocates goodwill
to the reporting unit(s) that
are expected to benefit
from the 
synergies
of
the
business
combination.
Once
allocated,
goodwill
is
supported
by
all
activities
within
the
reporting
unit,
whether 
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
114 
acquired
or
internally
generated.
The
Corporation
tests goodwill
for
impairment
at
least annually,
during
the
fourth
quarter
of each 
year,
or
more
frequently
if
events
or
circumstances
indicate
potential
impairment.
If, after
evaluating
relevant
factors,
management 
determines that it is
more-likely-than-not that a
reporting units
fair value is less
than its carrying value,
a quantitative impairment test 
is performed. Goodwill
as of each of
December 31, 2025
and 2024 amounted
to $
38.6
million. There were
no changes in the
carrying 
amount
of
goodwill
during
the
years
ended
December
31,
2025,
2024,
and
2023.
In
addition
to
the
goodwill
recorded
at
the 
Commercial
and
Corporate,
Consumer
Retail,
and
Mortgage
Banking
reporting
units
in
connection
with
the
acquisition
of
Banco 
Santander
Puerto Rico
(BSPR) in
2020,
the Corporations
goodwill is
mostly related
to the
United States
(Florida) reporting
unit. 
During the
fourth quarter
of 2025,
management performed
a qualitative
assessment for
each reporting
unit and
concluded that
it was 
more-likely-than-not
that
fair
value
exceeded
carrying
value;
therefore, 
no
goodwill
impairment
was
recorded.
The
qualitative 
assessment considered macroeconomic conditions,
industry and market trends, interest rate
fluctuations, financial performance
of each 
reporting unit, peer performance, and recent market transactions. 
Other
Intangible
Assets
As
of
December
31,
2025
and
2024,
Corporations
other
intangible
assets
consisted
entirely
of
core 
deposit
intangibles,
totaling
$
3.5
million
and
$
7.0
million,
respectively.
As
of
December
31,
2025,
core
deposit
intangibles
had
a 
remaining
amortization
period
of 
4 years
.
These
intangibles
are
amortized
over
the
estimated
useful
lives
of
the
related
deposits, 
generally
on a
straight-line
basis. The
Corporation
evaluates core
deposit
intangibles for
impairment
whenever events
or changes
in 
circumstances
indicate
that
their
carrying
amount
may
not
be
recoverable.
Management
has
identified
no
such
indicators
as
of 
December 31, 2025, 2024, and 2023.
Securities purchased and sold under agreements to repurchase
The
Corporation
accounts
for
securities
purchased
under
resale
agreements
and
securities
sold
under
repurchase
agreements
as 
collateralized financing transactions,
generally recorded at the purchase
or sale amount. The Corporation
monitors the fair value of the 
underlying securities, and obtains or
returns collateral, as necessary.
Given the level of collateralization
and ongoing monitoring, these 
transactions do not
present material credit
risk. The Corporation
sells and acquires
securities under agreements
to repurchase or
resell 
the same
or similar
securities. Generally,
similar securities
are securities
from the
same issuer,
with identical
form and
type, similar 
maturity,
identical
contractual
interest
rates,
similar
assets
as
collateral,
and
the
same
aggregate
unpaid
principal
amount.
The 
counterparty to
certain agreements may
have the right
to repledge the
collateral by contract
or custom. The
Corporation presents such 
assets
separately
in
the
consolidated
statements
of
financial
condition
as
securities
pledged
with
creditors
rights
to
repledge. 
Repurchase and
resale activities may
be transacted under
legally enforceable master
repurchase agreements that
give the Corporation, 
in the
event of
default by
the counterparty,
the right
to liquidate
securities held
and to
offset receivables
and payables
with the
same 
counterparty.
The Corporation offsets
repurchase and resale
transactions with
the same counterparty
in the consolidated
statements of 
financial condition
where it
has such
a legally
enforceable right
under a
master netting
agreement, the
intention of
setoff
is existent, 
the transactions have the same maturity date, and the amounts are determinable
. 
From time to
time, the Corporation
modifies repurchase agreements
to take advantage
of prevailing interest rates.
Under applicable 
GAAP,
if
the
modified
terms result
in
a
debt
instrument
that
is substantially
different,
generally
defined
as a
change in
the
present 
value of cash flows of
10% or more, the modification
is accounted for as a debt
extinguishment, and the new instrument
is recorded at 
fair value, and such
amount is used to
determine the extinguishment
gain or loss to
be recognized through the
consolidated statements 
of income and the effective rate of the new instrument.
If the modification is not substantially different, the original
carrying amount is 
retained
and
a
new
effective
interest
rate
is
established.
The
Corporation
has
determined
that
none
of
the
repurchase
agreements 
modified in the past were substantially different from the original
terms, and, therefore, none resulted in a debt extinguishments.
Income taxes
The Corporation
uses the
asset and
liability method
for the recognition
of deferred
tax assets and
liabilities for
the expected
future 
tax
consequences
of events
that have
been
recognized
in
the Corporations
financial
statements
or
tax returns.
Deferred
income
tax 
assets
and
liabilities
are
determined
for
differences
between
the
financial
statement
and
tax
bases
of
assets
and
liabilities
that
will 
result in
taxable or
deductible amounts
in the
future. The
computation is
based on
enacted tax
laws and
rates applicable
to periods
in 
which the temporary
differences are expected
to be recovered or
settled. The effect
on deferred tax assets and
liabilities of a change
in 
tax rates
is recognized
in income
at the
time of
enactment of
such change
in tax
rates. Any
interest or
penalties due
for payment
of 
income taxes are included
in the provision for income
taxes. Valuation
allowances are established, when
necessary, to
reduce deferred 
tax assets to the
amount that is more
likely than not to
be realized. In making
such assessment, significant
weight is given to
evidence 
that can
be objectively
verified, including
both positive
and negative
evidence. The
authoritative guidance
for accounting
for income 
taxes requires the consideration of all sources of taxable income
available to realize the deferred tax asset, including the future
reversal 
of
existing
temporary
differences,
tax
planning
strategies
and
future
taxable
income,
exclusive
of
the
impact
of
the
reversal
of 
temporary differences and
carryforwards. In estimating
taxes, management assesses the
relative merits and risks
of the appropriate tax 
treatment
of
transactions
considering
statutory,
judicial,
and
regulatory
guidance.
The Corporation
releases
income
tax effects
from 
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
115 
OCL
as
pension
and
postretirement
liabilities
are
extinguished.
Discounts
on
purchased
income
tax
credits
are
recognized
in
non-
interest income when realized. See Note 17 Income Taxes
for additional information.
Under
the authoritative
accounting guidance,
income tax
benefits are
recognized and
measured based
on a
two-step
analysis: i)
a 
tax
position
must
be
more
likely than
not
to be
sustained
based solely
on
its technical
merits
in
order
to
be recognized;
and
ii)
the 
benefit
is
measured
at
the
largest
dollar
amount
of
that
position
that
is
more
likely
than
not
to
be
sustained
upon
settlement.
The 
difference between
a benefit not
recognized in
accordance with
this analysis
and the
tax benefit
claimed on
a tax return
is referred
to 
as an unrecognized tax benefit. 
See ASU
2023-09,
Income Taxes
(Topic
740): Improvements
to Income
Tax
Disclosures below
for the
impact
associated with 
the adoption of this standard during the fourth quarter of 2025.
Stock repurchases
Treasury
shares
are
recorded
at
their
reacquisition
cost,
as
a
reduction
of
stockholders
equity
in
the
consolidated
statements
of 
financial condition. When
reissuing treasury shares
for the granting
of stock-based compensation
awards, treasury stock
is reduced by 
the
cost
allocated
to
such
stock
and
additional
paid-in
capital
is
credited
for
gains
and
debited
for
losses
when
treasury
stock
is 
reissued at prices that differ from the reacquisition cost.
Stock-based compensation 
Compensation
cost
is
recognized
in
the
financial
statements
for
all
share-based
payment
grants.
The
First
BanCorp.
Omnibus 
Incentive
Plan,
as
amended
(the
Omnibus
Plan)
provides
for
equity-based
and
non-equity-based
compensation
incentives
(the 
awards)
through
the
grant
of
stock
options,
stock
appreciation
rights,
restricted
stock,
restricted
stock
units,
performance
shares, 
other stock-based
awards and
cash-based
awards. The
compensation cost
for an
award, determined
based on
the estimate
of the
fair 
value
at
the
grant
date
(considering
forfeitures
and
any
post-vesting
restrictions),
is
recognized
over
the
period
during
which
an 
employee
or director
is required
to
provide
services
in
exchange
for
an
award,
which
is the
vesting
period,
taking
into account
the 
retirement eligibility of the award. 
Stock-based compensation
accounting guidance
requires the
Corporation to
reverse compensation
expense for
any awards
that are 
forfeited due
to employee
or director
turnover.
Changes in
the estimated
forfeiture rate
may have
a significant
effect on
stock-based 
compensation
as
the
Corporation
recognizes
the
effect
of
adjusting
the
rate
for
all
expense
amortization
in
the
period
in
which
the 
forfeiture estimate is changed. If the actual forfeiture
rate is higher than the estimated forfeiture rate, an adjustment
is made to increase 
the
estimated
forfeiture
rate,
which
will
decrease
the
expense
recognized
in
the
financial
statements.
If
the
actual
forfeiture
rate
is 
lower
than
the
estimated
forfeiture
rate,
an
adjustment
is
made
to
decrease
the
estimated
forfeiture
rate,
which
will
increase
the 
expense recognized in the financial
statements. For additional information regarding
the Corporations
equity-based compensation and 
awards granted, see Note 11 Stock-Based Compensation.
Comprehensive income (loss) 
Comprehensive
income for
First BanCorp.
includes
net income,
as well
as change
s
in unrealized
gains on
available-for-sale
debt 
securities and change in unrecognized pension and post-retirement costs, net
of estimated tax effects.
Pension and other postretirement benefits 
The Corporation
maintains two
frozen qualified
noncontributory defined
benefit pension
plans (the
Pension Plans)
(including a 
complementary postretirement
benefits plan covering medical
benefits and life insurance
after retirement) that it assumed
in the BSPR 
acquisition.
Pension costs are
computed on
the basis of accepted
actuarial methods and
are charged to
current operations. Net
pension costs are 
based on
various actuarial
assumptions regarding
future experience
under the
plan, which
include costs
for services
rendered during 
the
period,
interest
costs
and
return
on
plan
assets,
as
well
as
deferral
and
amortization
of
certain
items
such
as
actuarial
gains
or 
losses.
The funding
policy is to
contribute to
the plan,
as necessary,
to provide
for services
to date and
for those expected
to be earned
in 
the future. To
the extent that these
requirements are fully
covered by assets in
the plan, a contribution
may not be made
in a particular 
year.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
116 
The
cost
of
postretirement
benefits,
which
is determined
based on
actuarial
assumptions
and
estimates
of
the
costs of
providing 
these benefits in the future, is accrued during the years that the employee
renders the required service. 
The
guidance
for
compensation
retirement
benefits
of
ASC
Topic
715,
Retirement
Benefits,
requires
the
recognition
of
the 
funded status of
each defined pension
benefit plan, retiree
health care plan
and other postretirement
benefit plans on
the statements
of 
financial condition. 
In addition,
the Corporation
maintains contributory
retirement plans
covering substantially
all employees.
Employer contributions 
to the plan are charged
to current earnings as part of
employees compensation and benefits expenses
in the consolidated statements of 
income.
Segment information
The Corporation reports financial and
descriptive information about its reportable
segments. Operating segments are components
of 
an
enterprise
about
which
separate
financial
information
is
available
that
is
evaluated
regularly
by
the
Chief
Executive
Officer
in 
deciding how
to allocate
resources and
assess performance.
The Corporations
CEO determined
that the
segregation that
best fulfills 
the segment
definition
described
above is
by lines
of business
for
its operations
in Puerto
Rico, the
Corporations
principal
market, 
and
by
geographic
areas
for
its
operations
outside
of
Puerto
Rico.
As
of
December
31,
2025
and
2024,
the
Corporation
had
the 
following 
six
operating segments that are all
reportable segments: Commercial and
Corporate Banking; Mortgage Banking;
Consumer 
(Retail) Banking; Treasury
and Investments; United
States Operations; and
Virgin
Islands Operations. The
accounting policies for
the 
reportable
business segments
are the
same as
those used
in the
preparation of
the Consolidated
Financial Statements
with respect
to 
activities
specifically
attributable
to
each
business
segment.
However,
management
methodologies
utilized
in
compiling
segment 
financial information are
highly subjective and,
unlike financial accounting,
are not based on
authoritative guidance similar
to GAAP. 
As a
result, reported
segment results
are not
necessarily comparable
with similar
information reported
by other
financial institutions. 
See Note 21 Segment Information for additional information.
Valuation
of financial instruments
The measurement
of fair value
is fundamental
to the Corporations
presentation of
its financial condition
and results of
operations. 
The Corporation
holds debt
and equity
securities, derivatives,
and other
financial instruments
at fair
value. The
Corporation holds
its 
investments and liabilities
mainly to manage liquidity
needs and interest
rate risks. A meaningful
part of the Corporations
total assets 
is reflected at fair value on the Corporations
financial statements. 
The FASBs
authoritative guidance
for 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 fair
value hierarchy for
classifying 
financial
instruments.
The
hierarchy
is
based
on
whether
the
inputs
to
the
valuation
techniques
used
to
measure
fair
value
are 
observable or unobservable.
Under the
fair value
accounting guidance,
an entity
has the
irrevocable option
to elect,
on a
contract-by-contract
basis, to measure 
certain financial assets and
liabilities at fair value
at the inception of
the contract and, thereafter,
to reflect any changes
in fair value in 
current earnings.
The Corporation
did not
make any fair
value option
election as of
December 31,
2025 or
2024. See Note
19 Fair 
Value
for additional information.
Revenue from contract with customers 
See Note 20 
Revenue from Contracts
with Customers
for a detailed description
of the Corporations
policies on the recognition 
and presentation
of revenues from
contracts with customers,
including the
income recognition for
the insurance agency
commissions 
revenue.
Earnings per common share
Basic earnings per share
is calculated by dividing net
income attributable to common stockholders
by the weighted-average number 
of
common
shares
issued
and outstanding.
Net
income
attributable
to
common
stockholders
represents
net
income
adjusted
for
any 
preferred
stock
dividends,
if
any,
including
any
preferred
stock
dividends
declared
but
not
yet
paid,
and
any
cumulative
preferred 
stock dividends
related to the
current dividend period
that have not
been declared as
of the end
of the period.
Basic weighted-average 
common
shares
outstanding
excludes
unvested
shares
of
restricted
stock
that
do
not
contain
non-forfeitable
dividend
rights.
The 
computation of diluted earnings per share is similar to the computation
of basic earnings per share except that the number of weighted-
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
117 
average
common
shares
is
increased
to
include
the
number
of
additional
common
shares
that
would
have
been
outstanding
if
the 
dilutive common shares had been issued, referred to as potential common shares.
Potential dilutive
common shares
consist of
unvested shares
of restricted
stock that
do not
contain non-forfeitable
dividend rights, 
warrants
outstanding
during
the
period,
and
common
stock
issued
under
the
assumed
exercise
of
stock
options,
if
any,
using
the 
treasury
stock method.
This method
assumes that
the potential
dilutive
common
shares are
issued and
outstanding
and the
proceeds 
from the exercise, in addition to the amount
of compensation cost attributable to future services, are used
to purchase common stock at 
the
exercise
date.
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, stock options, and
warrants outstanding during the
period, if any,
that result in lower potential
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. Potential
dilutive common
shares also
include performance
units that
do not 
contain non-forfeitable dividend rights if the performance condition
is met as of the end of the reporting period.
Adoption of New Accounting Requirements 
Standard 
Description 
Effective Date 
Effect on the financial statements 
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. 
Management adopted the guidance 
during the fourth quarter of 2025. 
The ASU has been applied 
retrospectively. Accordingly, 
comparative disclosures were 
provided for all periods presented. 
As part of the adoption of this ASU, 
the Corporation expanded its income 
tax rate reconciliation to separately 
present nontaxable or nondeductible 
items, as well as changes in 
unrecognized tax benefits. 
Additionally, the Corporation
provided disaggregated disclosures 
for its major jurisdictions, which 
include local and federal taxes.
The Corporation was not impacted by the adoption of the following Accounting Standards
Updates (ASUs) during 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) 
118 
Recently Issued Accounting Standards Not Yet
Effective or Not Yet
Adopted 
Standard 
Description 
Effective Date 
Effect on the Financial Statements 
ASU 2025-11, Interim 
Reporting 
In December 2025, the FASB issued ASU 
2025-11, which clarifies when ASC 270 
applies, addresses the form and content of 
such financial statements, lists the interim 
disclosures required by all other Codification 
topics, and establishes a disclosure principle 
under which an entity must disclose events 
since the end of the last annual reporting 
period that have a material impact on the 
entity.
Effective for interim reporting 
periods within annual reporting 
periods beginning after December 
15, 2027. Early adoption is 
permitted. The amendments in this 
ASU can be applied either 
prospectively or retrospectively to 
any or all prior periods presented 
in the financial statements. 
The Corporation will consider this 
guidance when preparing its 
interim disclosures for the first 
quarter of 2028.
ASU 2025-08, Financial 
Instruments Credit Losses 
(Topic 326): Purchased 
Loans 
In November 2025, the FASB issued ASU 
2025-08, which expands the population of 
acquired financial assets subject to the gross-
up approach in ASC 326 to include closed-
ended purchased seasoned loans, which 
include non-PCD loans that are obtained in a 
business combination and non-PCD loans that 
are obtained in an asset acquisition or upon 
consolidation of a VIE that is not a business 
and are acquired more than 90 days after their 
origination date by a transferee that was not 
involved in their origination. In addition, an 
entity can elect to use the amortized cost basis 
of the asset to subsequently measure the ACL 
if a method other than a discounted cash flow 
method is used. 
Effective for annual reporting 
periods beginning after December 
15, 2026, and interim periods 
within those annual reporting 
periods. The amendments in this 
ASU should be applied 
prospectively to loans that are 
acquired on or after the adoption 
date. Early adoption is permitted 
in an interim or annual reporting 
period in which financial 
statements have not yet been 
issued.
The Corporation will consider this 
standard for loans that are 
acquired on or after the adoption 
date. 
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. 
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
119 
ASU 2024-03, Income 
Statement Reporting 
Comprehensive Income 
Expense Disaggregation 
Disclosures (Subtopic 220-
40): Disaggregation of 
Income Statement 
Expenses 
In November 2024, the FASB issued ASU 
2024-03, which requires disclosure in the 
notes to financial statements at each interim 
and annual reporting period, of specified 
information about certain costs and expenses 
in a tabular format, including but not limited 
to, employee compensation and intangible 
asset amortization; the inclusion of amounts 
already required under previous GAAP in the 
same disclosure as these disaggregation 
requirements; and a qualitative description of 
the amounts remaining in relevant expense 
captions that are not separately disaggregated 
quantitatively. 
Effective for annual periods 
beginning after December 15, 
2026, and interim periods 
beginning after December 15, 
2027. Early adoption is permitted 
for annual financial statements not 
yet issued. The amendments in 
this ASU should be applied on a 
prospective basis. Retrospective 
application is permitted. 
The Corporation will be impacted 
by the standard and will disclose 
required information by the 
adoption date.
The Corporation does not expect to be impacted
by the following ASUs that are not yet effective
or have not yet been adopted: 
ASU 2025-12, Codification Improvements 
ASU 2025-09, Derivatives and Hedging
(Topic 815): Hedge Accounting Improvements 
ASU 2025-07, Derivatives
and Hedging
(Topic 815)
and Revenue
from Contracts
with Customers
(Topic 606):
Derivatives 
Scope Refinements and Scope Clarification for Share-Based Noncash
Consideration from a Customer in a Revenue Contract 
ASU 2025-04, Compensation
Stock
Compensation (Topic
718) and Revenue
from Contracts
with Customers
(Topic 606): 
Clarifications to Shared-Based Consideration Payable to a Customer 
ASU 2025-03,
Business Combinations (Topic
805) and
Consolidation (Topic
810): Determining
the Accounting Acquirer
in 
the Acquisition
of a Variable Interest
Entity 
ASU 2024-04,
Debt Debt with Conversion and Other Options
(Subtopic 470-20): Induced Conversions of Convertible Debt 
Instruments
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
120 
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 December 31, 2025
and 2024 were as follows:
December 31, 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 
$ 
497,159
$ 
183
$ 
-
$ 
-
$ 
497,342
3.85
U.S. GSEs obligations: 
Due within one year 
402,352
17
4,659
-
397,710
0.92
After 1 to 5 years 
500,025
5
16,114
-
483,916
1.45
After 5 to 10 years 
14,996
-
11
-
14,985
4.75
After 10 years 
6,547
-
46
-
6,501
3.97
Puerto Rico government obligation: 
After 10 years 
(3)
2,700
-
762
318
1,620
-
United States and Puerto Rico government obligations 
1,423,779
205
21,592
318
1,402,074
2.18
MBS: 
Residential MBS: 
U.S. Agencies MBS 
2,401,704
2,360
256,589
-
2,147,475
1.80
U.S. Agencies collateralized mortgage 
obligations (CMOs) 
833,330
4,123
39,299
-
798,154
3.95
Private label MBS 
5,072
-
1,361
445
3,266
5.92
Total Residential MBS 
(4)
3,240,106
6,483
297,249
445
2,948,895
2.36
U.S. Agencies Commercial MBS 
(4)
238,097
508
35,542
-
203,063
2.42
Total MBS 
3,478,203
6,991
332,791
445
3,151,958
2.36
Total available-for-sale debt securities 
$ 
4,901,982
$ 
7,196
$ 
354,383
$ 
763
$ 
4,554,032
2.31
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: 
U.S. Agencies MBS 
2,538,226
57
386,773
-
2,151,510
1.62
U.S. Agencies CMOs 
377,812
74
52,338
-
325,548
2.88
Private label MBS 
6,086
-
1,715
176
4,195
6.62
Total Residential MBS 
(4)
2,922,124
131
440,826
176
2,481,253
1.79
U.S Agencies Commercial MBS 
(4)
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
$
9.4
million and $
9.6
million as of December 31, 2025
and 2024, respectively, 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 $
230.2
million (amortized cost - $
251.0
million) and $
466.1
million (amortized cost - $
533.7
million) as of December 31, 2025
and 2024, respectively, that was
pledged at the FHLB as collateral
for borrowings 
and letters of credit, as well
as $
2.5
billion (amortized cost - $
2.7
billion) and $
3.0
billion (amortized cost - $
3.3
billion) as of December 31, 2025
and 2024, respectively, 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. 
(4) 
The weighted-average remaining contractual life of residential MBS and
commercial MBS was 
16.3
years and 
29.1
years, respectively, as of December 31,
2025, compared to 
15.3
years and 
30.0
years, respectively, as of 
December 31, 2024.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
121 
During
2025,
the Corporation
purchased
approximately
$
1.9
billion
in
available-for-sale
debt
securities,
of which
$
974.9
million 
were U.S.
agencies
MBS and
debentures
with an
average yield
of 
4.76
%, including
$
872.1
million
of residential
MBS; and
$
963.2
million were U.S. Treasury securities with an average
yield of 
4.02
%.
The
following
tables
present
the
fair
value
and
gross
unrealized
losses
of
the
Corporations
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 December 31, 2025 and 2024. The tables also include debt securities for
which an ACL was recorded.
As of December 31, 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 
$ 
91,584
$ 
100
$ 
796,505
$ 
20,730
$ 
888,089
$ 
20,830
Puerto Rico government obligation 
-
-
1,620
762
(1) 
1,620
762
MBS: 
Residential MBS: 
U.S. Agencies MBS 
52,599
148
1,851,881
256,441
1,904,480
256,589
U.S. Agencies CMOs 
74,773
402
170,490
38,897
245,263
39,299
Private label 
-
-
3,266
1,361
(1) 
3,266
1,361
U.S. Agencies Commercial MBS 
2,810
150
138,412
35,392
141,222
35,542
$ 
221,766
$ 
800
$ 
2,962,174
$ 
353,583
$ 
3,183,940
$ 
354,383
(1) 
Unrealized losses do not include the credit loss component recorded
as part of the ACL. As of December 31, 2025, the
PRHFA bond and private label MBS
had an ACL of $
0.3
million 
and $0.5 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: 
U.S. Agencies MBS 
111,830
725
2,036,293
386,048
2,148,123
386,773
U.S. Agencies CMOs 
52,778
248
187,772
52,090
240,550
52,338
Private label 
-
-
4,195
1,715
(1) 
4,195
1,715
U.S. Agencies 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 $
0.3
million 
and $
0.2
million, respectively.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
122 
Assessment for Credit Losses 
The Corporation
expects no
credit losses on
debt securities
issued by
U.S. government
agencies, U.S.
GSEs and
the U.S. Treasury 
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 December
31, 2025, the
Corporation did
not have the
intent to sell 
these
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
Corporations
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.
The
following
tables
present
a
roll-forward
of
the
ACL
on
available-for-sale
debt
securities by
major
security
type
for
the
years 
ended December 31, 2025, 2024, and 2023:
Year
Ended December 31, 2025 
Private label MBS 
Puerto Rico
Government 
Obligations 
Total 
(In thousands) 
Beginning balance 
$ 
176
$ 
345
$ 
521
Provision for credit losses - expense (benefit) 
281
(27)
254
Net charge-offs 
(12)
-
(12)
ACL on available-for-sale debt securities 
$ 
445
$ 
318
$ 
763
Year
Ended December 31, 2024 
Private label MBS 
Puerto Rico
Government 
Obligations 
Total 
(In thousands) 
Beginning balance 
$ 
116
$ 
395
$ 
511
Provision for credit losses - (benefit) 
-
(50)
(50)
Net recoveries 
60
-
60
ACL on available-for-sale debt securities 
$ 
176
$ 
345
$ 
521
Year
Ended December 31, 2023 
Private label MBS 
Puerto Rico
Government 
Obligations 
Total 
(In thousands) 
Beginning balance 
$ 
83
$ 
375
$ 
458
Provision for credit losses - expense 
-
20
20
Net recoveries 
33
-
33
ACL on available-for-sale debt securities 
$ 
116
$ 
395
$ 
511
During
2025,
the
Corporation
recognized
$
86.0
million
of
interest
income
on
available-for-sale
debt
securities
(2024
-
$
71.7
million; 2023 - $
78.3
million), of which $
53.5
million was exempt (2024 - $
36.2
million; 2023 - $
39.1
million). The exempt securities 
primarily relate to MBS and
government obligations held by
IBEs (as defined in the
International Banking Entity
Act of Puerto Rico), 
whose interest income and sales are exempt from Puerto Rico income
taxation under that act.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
123 
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 December 31,
2025 and 2024 were as follows:
December 31, 2025 
Amortized cost
(1) (2)
Gross Unrecognized 
Fair value 
Weighted- 
Gains 
Losses 
ACL 
average yield% 
(Dollars in thousands) 
Government bonds: 
Due within one year 
$ 
1,044
$ 
42
$ 
3
$ 
1,083
$ 
2
4.94
After 1 to 5 years 
54,611
1,921
131
56,401
437
7.05
After 5 to 10 years 
10,376
653
159
10,870
95
4.78
After 10 years 
14,870
22
6
14,886
199
7.46
Total government bonds 
80,901
2,638
299
83,240
733
6.81
MBS: 
Residential MBS: 
U.S. Agencies MBS 
89,798
-
2,245
87,553
-
3.99
U.S. Agencies CMOs 
21,653
-
392
21,261
-
3.40
Total Residential MBS 
(3)
111,451
-
2,637
108,814
-
3.87
U.S. Agencies Commercial MBS 
(3)
72,944
-
2,943
70,001
-
2.13
Total MBS 
184,395
-
5,580
178,815
-
3.19
Total held-to-maturity debt securities 
$ 
265,296
$ 
2,638
$ 
5,879
$ 
262,055
$ 
733
4.29
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: 
U.S. Agencies MBS 
103,753
-
6,123
97,630
-
3.96
U.S. Agencies CMOs 
25,566
-
1,321
24,245
-
3.49
Total Residential MBS 
(3)
129,319
-
7,444
121,875
-
3.86
U.S. Agencies Commercial MBS 
(3)
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 $
3.2
million and $
4.1
million as of December 31, 2025
and 2024, respectively, 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 $
153.0
million (fair value
- $
150.9
million) and $
198.6
million (fair value
- $
192.4
million) as of
December 31, 2025
and 2024, respectively,
that serves as
collateral for the
uninsured portion of
government 
deposits. The secured parties are not permitted to sell or repledge the collateral. 
(3) 
The weighted-average remaining contractual life of
residential MBS and commercial MBS was 
21.0
years and 
11.9
years, respectively, as of
December 31,
2025, compared to 
21.5
years and 
13.2
years, respectively, as 
of December 31,
2024.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
124 
The
following
tables
present
the
Corporations
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 
December 31, 2025 and 2024, including debt securities for which an ACL was recorded: 
As of December 31, 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 
$ 
-
$ 
-
$ 
21,460
$ 
299
$ 
21,460
$ 
299
MBS: 
Residential MBS: 
U.S. Agencies MBS 
-
-
87,553
2,245
87,553
2,245
U.S. Agencies CMOs 
-
-
21,261
392
21,261
392
U.S. Agencies Commercial MBS 
-
-
70,001
2,943
70,001
2,943
Total held-to-maturity debt securities 
$ 
-
$ 
-
$ 
200,275
$ 
5,879
$ 
200,275
$ 
5,879
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: 
U.S Agencies MBS 
-
-
97,630
6,123
97,630
6,123
U.S. Agencies CMOs 
-
-
24,245
1,321
24,245
1,321
U.S. Agencies Commercial MBS 
-
-
90,557
5,468
90,557
5,468
Total held-to-maturity debt securities 
$ 
-
$ 
-
$ 
232,503
$ 
13,561
$ 
232,503
$ 
13,561
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. 
The Corporation
performs periodic
credit quality
reviews on
these issuers.
All of
the government
bonds were
current as
to scheduled 
contractual payments as of December 31,
2025.
The following table
presents the activity
in the ACL for
held-to-maturity debt
securities by major
security type for
the years ended 
December 31, 2025, 2024 and 2023:
Government Bonds 
Year
Ended December 31, 
2025 
2024 
2023 
(In thousands) 
Beginning Balance 
$ 
802
$ 
2,197
$ 
8,286
Provision for credit losses - (benefit) 
(69)
(1,395)
(6,089)
ACL on held-to-maturity debt securities 
$ 
733
$ 
802
$ 
2,197
During 2025, the Corporation recognized
$
13.9
million of interest income on held-to-maturity
debt securities (2024 - $
17.1
million; 
2023 - $
20.9
million), of which $
13.6
million was exempt (2024 - $
16.8
million; 2023 - $
20.5
million). The exempt securities relate to 
tax-exempt Puerto
Rico municipal
bonds and
MBS held by
IBEs (as
defined in
the International
Banking Entity
Act of Puerto
Rico), 
whose interest income and sales are exempt from Puerto Rico income
taxation under that act.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
125 
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 government
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. The
asset categories 
are defined below: 
Pass 
Assets classified
as Pass
have a
well-defined primary
source of
repayment, with
no apparent
risk, strong
financial position, 
minimal operating
risk, profitability,
liquidity and
strong capitalization
and include
assets categorized
as Watch.
Assets classified
as 
Watch
have
acceptable business
credit,
but borrowers
operations, cash
flow or
financial condition
evidence more
than average
risk 
and requires additional level of supervision and attention from loan officers.
Special Mention Special
Mention assets have potential
weaknesses that deserve managements
close attention. If left uncorrected, 
these potential
weaknesses may
result in
deterioration of
the repayment
prospects for
the asset or
in the
Corporations
credit position 
at some future date.
Special Mention assets are
not adversely classified and
do not expose the
Corporation to sufficient
risk to warrant 
adverse classification.
Substandard Substandard assets are inadequately protected
by the current sound worth and paying capacity of the obligor
or of the 
collateral
pledged,
if
any.
Assets
classified
as
Substandard
must
have
a
well-defined
weakness
or
weaknesses
that
jeopardize
the 
liquidation of
the debt.
They are
characterized by
the distinct
possibility that
the institution
will sustain
some loss
if the
deficiencies 
are not corrected.
Doubtful 
Doubtful classifications
have all
the weaknesses
inherent in
those classified
Substandard
with the
added characteristic 
that
the
weaknesses
make
collection
or
liquidation
in
full
highly
questionable
and
improbable,
based
on
currently
known
facts, 
conditions and
values. A
Doubtful classification
may be
appropriate in
cases where
significant risk
exposures are
perceived, but
loss 
cannot be determined because of specific reasonable pending factors,
which may strengthen the credit in the near term.
Loss Assets classified
as Loss are considered
uncollectible and of
such little value that
their continuance as
bankable assets is not 
warranted. This classification does not mean that the asset has absolutely
no recovery or salvage value, but rather that it is not practical 
or desirable
to defer
writing off
this asset even
though partial
recovery may
occur in
the future. There
is little or
no prospect
for near 
term improvement and no realistic strengthening action of significance
pending. 
The Corporation
periodically reviews its
government bonds
to evaluate
if they are
properly classified,
and to measure
credit losses 
on these
securities. The
frequency
of these
reviews will
depend
on the
amount of
the aggregate
outstanding debt,
and the
risk rating 
classification of the obligor. 
The Corporations
Loan Review Group
reports to the Risk
Management Committee
and administratively to
the Chief Risk Officer. 
It
performs
annual
reviews
of
the
Banks
commercial
loan
portfolios,
including
the
above-mentioned
government
bonds.
These 
reviews assess
the accuracy
of loan
risk ratings
and compliance
with lending
policies and
procedures.
The monitoring
performed by 
this
group
helps
evaluate
credit
risk,
adherence
to
underwriting
standards,
and
the
effectiveness
of
credit
management,
while 
identifying any
deficiencies. Based on
its findings,
it recommends corrective
actions, as needed.
Results of the
credit process reviews 
are reported to the Risk Management Committee. 
As of December 31, 2025 and 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 December
31, 
2025 and 2024. A security is considered to be past due once it is 30 days contractually
past due under the terms of the agreement.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
126 
NOTE 3 LOANS HELD FOR INVESTMENT
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 December 31, 
As of December 31, 
2025 
2024 
(In thousands) 
Puerto Rico and Virgin Islands region: 
Residential mortgage loans, mainly secured by first mortgages 
$ 
2,377,604
$ 
2,323,205
Construction loans 
263,640
184,427
Commercial mortgage loans
1,763,927
1,867,894
C&I loans 
2,519,002
2,325,875
Consumer loans 
3,703,019
3,750,205
Loans held for investment 
$ 
10,627,192
$ 
10,451,606
Florida region: 
Residential mortgage loans, mainly secured by first mortgages 
$ 
530,698
$ 
505,226
Construction loans 
1,928
43,969
Commercial mortgage loans
790,325
698,090
C&I loans 
1,169,356
1,040,163
Consumer loans 
5,857
7,502
Loans held for investment 
$ 
2,498,164
$ 
2,294,950
Total: 
Residential mortgage loans, mainly secured by first mortgages 
$ 
2,908,302
$ 
2,828,431
Construction loans 
265,568
228,396
Commercial mortgage loans
2,554,252
2,565,984
C&I loans 
(1)
3,688,358
3,366,038
Consumer loans 
3,708,876
3,757,707
Loans held for investment 
(2)
13,125,356
12,746,556
ACL on loans and finance leases 
(249,037)
(243,942)
Loans held for investment, net 
$ 
12,876,319
$ 
12,502,614
(1) 
As of December 31,
2025 and 2024, includes $
887.5
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 $
18.4
million and $
23.6
million as of December 31, 2025 and 2024, respectively.
As
of
December 31,
2025
and
2024,
the
Corporation
had
net
deferred
origination
costs
on
its
loan
portfolio
amounting
to
$
1.0
million and
$
1.8
million, respectively.
The total
loan portfolio
is net
of unearned
income of
$
116.8
million and
$
130.4
million as
of 
December 31, 2025
and 2024,
respectively,
of which
$
113.2
million and
$
126.0
million are
related to
finance leases
as of
December 
31, 2025 and 2024, respectively. 
As of
December 31,
2025,
the Corporation
was servicing
residential
mortgage
loans owned
by others
in an
aggregate
amount
of 
$
3.6
billion (2024
$
3.7
billion), and
commercial loan
participations owned
by others
in an
aggregate amount
of $
252.8
million as 
of December 31, 2025 (2024 $
262.9
million).
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
December 31,
2025 
and
2024,
respectively.
As
of
December
31,
2025
and
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 December
31, 2025 and 2024; $
126.1
million pledged to secure 
as
collateral
for
the
uninsured
portion
of
government
deposits,
compared
to
$
163.5
million
as
of
December
31,
2024;
and
$
111.2
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) 
127 
The Corporations
aging of
the loan
portfolio held
for investment,
as well
as information
about nonaccrual
loans with
no ACL,
by 
portfolio classes as of December 31, 2025 and 2024 are as follows:
As of December 31, 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)
$ 
70,781
$ 
-
$ 
2,163
$ 
15,776
$ 
-
$ 
88,720
$ 
-
Conventional residential mortgage loans 
(1) (3) (5)
2,758,359
-
25,985
6,069
29,169
2,819,582
-
Commercial loans: 
Construction loans 
260,032
-
-
-
5,536
265,568
956
Commercial mortgage loans 
(1) (3)
2,544,283
141
513
933
8,382
2,554,252
952
C&I loans 
(5)
3,653,509
1,514
2,563
2,730
28,042
3,688,358
13,752
Consumer loans: 
Auto loans 
1,952,600
63,085
12,661
-
14,665
2,043,011
631
Finance leases 
871,810
14,049
2,670
-
3,510
892,039
100
Personal loans 
325,474
5,185
2,705
-
1,792
335,156
-
Credit cards 
278,938
4,479
3,266
6,405
-
293,088
-
Other consumer loans 
140,117
2,157
1,841
-
1,467
145,582
-
Total loans held for investment 
$ 
12,855,903
$ 
90,610
$ 
54,367
$ 
31,913
$ 
92,563
$ 
13,125,356
$ 
16,391
(1) 
According to
the Corporations
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, 2025
amounted to $
8.7
million, $
59.1
million, and $
0.8
million, 
respectively. 
(2) 
It is the
Corporations 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 $
4.1
million of residential mortgage loans 
guaranteed by the FHA that were over 15 months delinquent as of December 31, 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 
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 $
4.8
million as of
December 31, 2025
($
3.9
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 $
6.7
million as of December 31, 2025.
Under the GNMA program, the Corporation
has the option but not the obligation
to 
repurchase loans
that meet
GNMAs
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 $
11.3
million as of December 31, 2025, of which $
11.1
million were residential mortgage loans and $
0.2
million was a C&I loan. 
(6) 
There were 
no
nonaccrual loans with no ACL in the Florida region as of December 31, 2025.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
128 
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 Corporations
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 Corporations
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 GNMAs
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 $
3.3
million, $
3.1
million, and $
2.7
million for the years ended
December 31, 2025, 2024,
and 2023, respectively.
For the year 
ended
December
31, 2025,
interest income
recognized
on nonaccrual
loans
amounted
to $
1.5
million,
compared
to $
1.8
million
for 
each of the years ended December 31, 2024 and 2023. 
As of
December 31,
2025, the
recorded investment
on residential
mortgage loans
collateralized by
residential real
estate property 
that
were
in
the
process
of
foreclosure
amounted
to
$
26.2
million,
including
$
6.7
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 2
- 
Debt Securities. 
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) 
129 
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
December 31,
2025 and
2024, and
the gross
charge-offs for
the years 
ended December 31, 2025 and 2024 by portfolio classes and by origination year
were as follows:
As of December 31, 2025 
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 
(In thousands) 
CONSTRUCTION 
Risk Ratings: 
Pass 
$ 
21,427
$ 
112,490
$ 
115,427
$ 
4,846
$ 
219
$ 
3,695
$ 
-
$ 
258,104
Criticized: 
Special Mention 
-
-
-
-
-
-
-
-
Substandard 
-
-
4,321
-
-
1,215
-
5,536
Doubtful 
-
-
-
-
-
-
-
-
Loss 
-
-
-
-
-
-
-
-
Total construction loans 
$ 
21,427
$ 
112,490
$ 
119,748
$ 
4,846
$ 
219
$ 
4,910
$ 
-
$ 
263,640
Charge-offs on construction loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
COMMERCIAL MORTGAGE 
Risk Ratings: 
Pass 
$ 
205,625
$ 
305,963
$ 
165,231
$ 
330,570
$ 
119,291
$ 
608,805
$ 
5,674
$ 
1,741,159
Criticized: 
Special Mention 
302
-
3,286
-
-
-
-
3,588
Substandard 
71
-
448
3,034
-
15,627
-
19,180
Doubtful 
-
-
-
-
-
-
-
-
Loss 
-
-
-
-
-
-
-
-
Total commercial mortgage loans 
$ 
205,998
$ 
305,963
$ 
168,965
$ 
333,604
$ 
119,291
$ 
624,432
$ 
5,674
$ 
1,763,927
Charge-offs on commercial mortgage loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
92
$ 
-
$ 
92
C&I 
Risk Ratings: 
Pass 
$ 
477,313
$ 
252,346
$ 
297,662
$ 
243,043
$ 
58,466
$ 
289,577
$ 
821,745
$ 
2,440,152
Criticized: 
Special Mention 
-
-
1,675
-
-
-
38,968
40,643
Substandard 
1,809
39
803
105
22,778
6,426
6,247
38,207
Doubtful 
-
-
-
-
-
-
-
-
Loss 
-
-
-
-
-
-
-
-
Total C&I loans 
$ 
479,122
$ 
252,385
$ 
300,140
$ 
243,148
$ 
81,244
$ 
296,003
$ 
866,960
$ 
2,519,002
Charge-offs on C&I loans 
$ 
-
$ 
82
$ 
52
$ 
-
$ 
-
$ 
50
$ 
300
$ 
484
(1) Excludes accrued interest receivable.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
130 
As of December 31, 2025 
Term Loans 
Florida Region 
Amortized Cost Basis by Origination Year
(1)
2025 
2024 
2023 
2022 
2021 
Prior 
Revolving Loans 
Amortized Cost 
Basis 
Total 
(In thousands) 
CONSTRUCTION 
Risk Ratings: 
Pass 
$ 
1,238
$ 
690
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
1,928
Criticized: 
Special Mention 
-
-
-
-
-
-
-
-
Substandard 
-
-
-
-
-
-
-
-
Doubtful 
-
-
-
-
-
-
-
-
Loss 
-
-
-
-
-
-
-
-
Total construction loans 
$ 
1,238
$ 
690
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
1,928
Charge-offs on construction loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
COMMERCIAL MORTGAGE 
Risk Ratings: 
Pass 
$ 
172,503
$ 
75,602
$ 
26,003
$ 
201,236
$ 
99,591
$ 
165,794
$ 
31,268
$ 
771,997
Criticized: 
Special Mention 
-
-
-
-
-
-
-
-
Substandard 
-
-
-
17,510
-
818
-
18,328
Doubtful 
-
-
-
-
-
-
-
-
Loss 
-
-
-
-
-
-
-
-
Total commercial mortgage loans 
$ 
172,503
$ 
75,602
$ 
26,003
$ 
218,746
$ 
99,591
$ 
166,612
$ 
31,268
$ 
790,325
Charge-offs on commercial mortgage loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
C&I 
Risk Ratings: 
Pass 
$ 
199,181
$ 
264,207
$ 
175,181
$ 
139,415
$ 
93,519
$ 
85,140
$ 
197,628
$ 
1,154,271
Criticized: 
Special Mention 
-
10,933
-
-
-
-
3,965
14,898
Substandard 
-
-
-
-
-
187
-
187
Doubtful 
-
-
-
-
-
-
-
-
Loss 
-
-
-
-
-
-
-
-
Total C&I loans 
$ 
199,181
$ 
275,140
$ 
175,181
$ 
139,415
$ 
93,519
$ 
85,327
$ 
201,593
$ 
1,169,356
Charge-offs on C&I loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
15
$ 
-
$ 
15
(1) Excludes accrued interest receivable.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
131 
As of December 31, 2025 
Term Loans 
Total 
Amortized Cost Basis by Origination Year
(1)
2025 
2024 
2023 
2022 
2021 
Prior 
Revolving Loans 
Amortized Cost 
Basis 
Total 
(In thousands) 
CONSTRUCTION 
Risk Ratings: 
Pass 
$ 
22,665
$ 
113,180
$ 
115,427
$ 
4,846
$ 
219
$ 
3,695
$ 
-
$ 
260,032
Criticized: 
Special Mention 
-
-
-
-
-
-
-
-
Substandard 
-
-
4,321
-
-
1,215
-
5,536
Doubtful 
-
-
-
-
-
-
-
-
Loss 
-
-
-
-
-
-
-
-
Total construction loans 
$ 
22,665
$ 
113,180
$ 
119,748
$ 
4,846
$ 
219
$ 
4,910
$ 
-
$ 
265,568
Charge-offs on construction loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
COMMERCIAL MORTGAGE 
Risk Ratings: 
Pass 
$ 
378,128
$ 
381,565
$ 
191,234
$ 
531,806
$ 
218,882
$ 
774,599
$ 
36,942
$ 
2,513,156
Criticized: 
Special Mention 
302
-
3,286
-
-
-
-
3,588
Substandard 
71
-
448
20,544
-
16,445
-
37,508
Doubtful 
-
-
-
-
-
-
-
-
Loss 
-
-
-
-
-
-
-
-
Total commercial mortgage loans 
$ 
378,501
$ 
381,565
$ 
194,968
$ 
552,350
$ 
218,882
$ 
791,044
$ 
36,942
$ 
2,554,252
Charge-offs on commercial mortgage loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
92
$ 
-
$ 
92
C&I 
Risk Ratings: 
Pass 
$ 
676,494
$ 
516,553
$ 
472,843
$ 
382,458
$ 
151,985
$ 
374,717
$ 
1,019,373
$ 
3,594,423
Criticized: 
Special Mention 
-
10,933
1,675
-
-
-
42,933
55,541
Substandard 
1,809
39
803
105
22,778
6,613
6,247
38,394
Doubtful 
-
-
-
-
-
-
-
-
Loss 
-
-
-
-
-
-
-
-
Total C&I loans 
$ 
678,303
$ 
527,525
$ 
475,321
$ 
382,563
$ 
174,763
$ 
381,330
$ 
1,068,553
$ 
3,688,358
Charge-offs on C&I loans 
$ 
-
$ 
82
$ 
52
$ 
-
$ 
-
$ 
65
$ 
300
$ 
499
(1) Excludes accrued interest receivable.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
132 
As of December 31, 2024 
Puerto Rico and Virgin Islands Regions 
Term Loans 
Amortized Cost Basis by Origination Year 
(1)
2024 
2023 
2022 
2021 
2020 
Prior 
Revolving Loans 
Amortized Cost 
Basis 
Total 
(In thousands) 
CONSTRUCTION 
Risk Ratings: 
Pass 
$ 
55,802
$ 
101,104
$ 
9,771
$ 
9,877
$ 
-
$ 
3,201
$ 
-
$ 
179,755
Criticized: 
Special Mention 
-
-
-
-
-
-
-
-
Substandard 
-
3,307
-
-
-
1,365
-
4,672
Doubtful 
-
-
-
-
-
-
-
-
Loss 
-
-
-
-
-
-
-
-
Total construction loans 
$ 
55,802
$ 
104,411
$ 
9,771
$ 
9,877
$ 
-
$ 
4,566
$ 
-
184,427
Charge-offs on construction loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
COMMERCIAL MORTGAGE 
Risk Ratings: 
Pass 
$ 
325,359
$ 
169,370
$ 
424,613
$ 
139,839
$ 
313,431
$ 
426,946
$ 
5,318
$ 
1,804,876
Criticized: 
Special Mention 
-
3,710
3,158
-
30,167
-
-
37,035
Substandard 
-
-
-
-
-
25,983
-
25,983
Doubtful 
-
-
-
-
-
-
-
-
Loss 
-
-
-
-
-
-
-
-
Total commercial mortgage loans 
$ 
325,359
$ 
173,080
$ 
427,771
$ 
139,839
$ 
343,598
$ 
452,929
$ 
5,318
$ 
1,867,894
Charge-offs on commercial mortgage loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
C&I 
Risk Ratings: 
Pass 
$ 
238,283
$ 
375,698
$ 
277,074
$ 
125,063
$ 
136,222
$ 
297,364
$ 
799,976
$ 
2,249,680
Criticized: 
Special Mention 
-
2,308
-
10,005
-
399
32,188
44,900
Substandard 
148
-
3,139
14,119
230
6,445
7,214
31,295
Doubtful 
-
-
-
-
-
-
-
-
Loss 
-
-
-
-
-
-
-
-
Total C&I loans 
$ 
238,431
$ 
378,006
$ 
280,213
$ 
149,187
$ 
136,452
$ 
304,208
$ 
839,378
$ 
2,325,875
Charge-offs on C&I loans 
$ 
-
$ 
606
$ 
304
$ 
-
$ 
-
$ 
1,261
$ 
478
$ 
2,649
(1) Excludes accrued interest receivable.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
133 
As of December 31, 2024 
Term Loans 
Florida Region 
Amortized Cost Basis by Origination Year
(1)
2024 
2023 
2022 
2021 
2020 
Prior 
Revolving Loans 
Amortized Cost 
Basis 
Total 
(In thousands) 
CONSTRUCTION 
Risk Ratings: 
Pass 
$ 
13,112
$ 
15,331
$ 
-
$ 
-
$ 
-
$ 
-
$ 
15,526
$ 
43,969
Criticized: 
Special Mention 
-
-
-
-
-
-
-
-
Substandard 
-
-
-
-
-
-
-
-
Doubtful 
-
-
-
-
-
-
-
-
Loss 
-
-
-
-
-
-
-
-
Total construction loans 
$ 
13,112
$ 
15,331
$ 
-
$ 
-
$ 
-
$ 
-
$ 
15,526
$ 
43,969
Charge-offs on construction loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
COMMERCIAL MORTGAGE 
Risk Ratings: 
Pass 
$ 
80,981
$ 
28,684
$ 
227,896
$ 
104,931
$ 
38,570
$ 
159,595
$ 
32,079
$ 
672,736
Criticized: 
Special Mention 
-
-
-
-
-
-
-
-
Substandard 
-
-
12,183
-
993
12,178
-
25,354
Doubtful 
-
-
-
-
-
-
-
-
Loss 
-
-
-
-
-
-
-
-
Total commercial mortgage loans 
$ 
80,981
$ 
28,684
$ 
240,079
$ 
104,931
$ 
39,563
$ 
171,773
$ 
32,079
$ 
698,090
Charge-offs on commercial mortgage loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
C&I 
Risk Ratings: 
Pass 
$ 
247,268
$ 
170,620
$ 
188,162
$ 
136,625
$ 
23,563
$ 
116,814
$ 
146,048
$ 
1,029,100
Criticized: 
Special Mention 
-
-
-
-
-
11,063
-
11,063
Substandard 
-
-
-
-
-
-
-
-
Doubtful 
-
-
-
-
-
-
-
-
Loss 
-
-
-
-
-
-
-
-
Total C&I loans 
$ 
247,268
$ 
170,620
$ 
188,162
$ 
136,625
$ 
23,563
$ 
127,877
$ 
146,048
$ 
1,040,163
Charge-offs on C&I loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
48
$ 
259
$ 
307
(1) Excludes accrued interest receivable.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
134 
As of December 31, 2024 
Term Loans 
Total 
Amortized Cost Basis by Origination Year
(1)
2024 
2023 
2022 
2021 
2020 
Prior 
Revolving Loans 
Amortized Cost 
Basis 
Total 
(In thousands) 
CONSTRUCTION 
Risk Ratings: 
Pass 
$ 
68,914
$ 
116,435
$ 
9,771
$ 
9,877
$ 
-
$ 
3,201
$ 
15,526
$ 
223,724
Criticized: 
Special Mention 
-
-
-
-
-
-
-
-
Substandard 
-
3,307
-
-
-
1,365
-
4,672
Doubtful 
-
-
-
-
-
-
-
-
Loss 
-
-
-
-
-
-
-
-
Total construction loans 
$ 
68,914
$ 
119,742
$ 
9,771
$ 
9,877
$ 
-
$ 
4,566
$ 
15,526
$ 
228,396
Charge-offs on construction loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
COMMERCIAL MORTGAGE 
Risk Ratings: 
Pass 
$ 
406,340
$ 
198,054
$ 
652,509
$ 
244,770
$ 
352,001
$ 
586,541
$ 
37,397
$ 
2,477,612
Criticized: 
Special Mention 
-
3,710
3,158
-
30,167
-
-
37,035
Substandard 
-
-
12,183
-
993
38,161
-
51,337
Doubtful 
-
-
-
-
-
-
-
-
Loss 
-
-
-
-
-
-
-
-
Total commercial mortgage loans 
$ 
406,340
$ 
201,764
$ 
667,850
$ 
244,770
$ 
383,161
$ 
624,702
$ 
37,397
$ 
2,565,984
Charge-offs on commercial mortgage loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
C&I 
Risk Ratings: 
Pass 
$ 
485,551
$ 
546,318
$ 
465,236
$ 
261,688
$ 
159,785
$ 
414,178
$ 
946,024
$ 
3,278,780
Criticized: 
Special Mention 
-
2,308
-
10,005
-
11,462
32,188
55,963
Substandard 
148
-
3,139
14,119
230
6,445
7,214
31,295
Doubtful 
-
-
-
-
-
-
-
-
Loss 
-
-
-
-
-
-
-
-
Total C&I loans 
$ 
485,699
$ 
548,626
$ 
468,375
$ 
285,812
$ 
160,015
$ 
432,085
$ 
985,426
$ 
3,366,038
Charge-offs on C&I loans 
$ 
-
$ 
606
$ 
304
$ 
-
$ 
-
$ 
1,309
$ 
737
$ 
2,956
(1) Excludes accrued interest receivable.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
135 
The following
tables present the
amortized cost of
residential mortgage
loans by portfolio
classes and by
origination year
based on 
accrual
status
as
of
December
31,
2025
and
2024,
and
the
gross
charge-offs
for
the
years
ended
December
31,
2025
and
2024
by 
origination year:
As of December 31, 2025 
Term Loans 
Amortized Cost Basis by Origination Year 
(1)
2025 
2024 
2023 
2022 
2021 
Prior 
Revolving Loans 
Amortized Cost 
Basis 
Total 
(In thousands) 
Puerto Rico and Virgin Islands Region: 
FHA/VA government-guaranteed loans 
Accrual Status: 
Performing 
$ 
-
$ 
608
$ 
1,120
$ 
753
$ 
1,163
$ 
83,991
$ 
-
$ 
87,635
Non-Performing 
-
-
-
-
-
-
-
-
Total FHA/VA
government-guaranteed loans 
$ 
-
$ 
608
$ 
1,120
$ 
753
$ 
1,163
$ 
83,991
$ 
-
$ 
87,635
Conventional residential mortgage loans 
Accrual Status: 
Performing 
$ 
241,406
$ 
180,315
$ 
154,786
$ 
144,553
$ 
56,836
$ 
1,494,029
$ 
-
$ 
2,271,925
Non-Performing 
-
-
41
490
101
17,412
-
18,044
Total conventional residential mortgage loans 
$ 
241,406
$ 
180,315
$ 
154,827
$ 
145,043
$ 
56,937
$ 
1,511,441
$ 
-
$ 
2,289,969
Total 
Accrual Status: 
Performing 
$ 
241,406
$ 
180,923
$ 
155,906
$ 
145,306
$ 
57,999
$ 
1,578,020
$ 
-
$ 
2,359,560
Non-Performing 
-
-
41
490
101
17,412
-
18,044
Total residential mortgage loans
$ 
241,406
$ 
180,923
$ 
155,947
$ 
145,796
$ 
58,100
$ 
1,595,432
$ 
-
$ 
2,377,604
Charge-offs on residential mortgage loans 
$ 
-
$ 
6
$ 
-
$ 
-
$ 
8
$ 
1,107
$ 
-
$ 
1,121
(1) 
Excludes accrued interest receivable.
As of December 31, 2025 
Term Loans 
Amortized Cost Basis by Origination Year 
(1)
2025 
2024 
2023 
2022 
2021 
Prior 
Revolving Loans 
Amortized Cost 
Basis 
Total 
(In thousands) 
Florida Region: 
FHA/VA government-guaranteed loans 
Accrual Status: 
Performing 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
1,085
$ 
-
$ 
1,085
Non-Performing 
-
-
-
-
-
-
-
-
Total FHA/VA
government-guaranteed loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
1,085
$ 
-
$ 
1,085
Conventional residential mortgage loans 
Accrual Status: 
Performing 
$ 
73,880
$ 
83,048
$ 
76,171
$ 
62,609
$ 
38,577
$ 
184,203
$ 
-
$ 
518,488
Non-Performing 
-
-
1,391
2,458
1
7,275
-
11,125
Total conventional residential mortgage loans 
$ 
73,880
$ 
83,048
$ 
77,562
$ 
65,067
$ 
38,578
$ 
191,478
$ 
-
$ 
529,613
Total 
Accrual Status: 
Performing 
$ 
73,880
$ 
83,048
$ 
76,171
$ 
62,609
$ 
38,577
$ 
185,288
$ 
-
$ 
519,573
Non-Performing 
-
-
1,391
2,458
1
7,275
-
11,125
Total residential mortgage loans 
$ 
73,880
$ 
83,048
$ 
77,562
$ 
65,067
$ 
38,578
$ 
192,563
$ 
-
$ 
530,698
Charge-offs on residential mortgage loans 
$ 
-
$ 
-
$ 
10
$ 
-
$ 
-
$ 
-
$ 
-
$ 
10
(1) 
Excludes accrued interest receivable.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
136 
As of December 31, 2025 
Term Loans 
Amortized Cost Basis by Origination Year 
(1)
2025 
2024 
2023 
2022 
2021 
Prior 
Revolving Loans 
Amortized Cost 
Basis 
Total 
(In thousands) 
Total: 
FHA/VA government-guaranteed loans 
Accrual Status: 
Performing 
$ 
-
$ 
608
$ 
1,120
$ 
753
$ 
1,163
$ 
85,076
$ 
-
$ 
88,720
Non-Performing 
-
-
-
-
-
-
-
-
Total FHA/VA
government-guaranteed loans 
$ 
-
$ 
608
$ 
1,120
$ 
753
$ 
1,163
$ 
85,076
$ 
-
$ 
88,720
Conventional residential mortgage loans 
Accrual Status: 
Performing 
$ 
315,286
$ 
263,363
$ 
230,957
$ 
207,162
$ 
95,413
$ 
1,678,232
$ 
-
$ 
2,790,413
Non-Performing 
-
-
1,432
2,948
102
24,687
-
29,169
Total conventional residential mortgage loans 
$ 
315,286
$ 
263,363
$ 
232,389
$ 
210,110
$ 
95,515
$ 
1,702,919
$ 
-
$ 
2,819,582
Total 
Accrual Status: 
Performing 
$ 
315,286
$ 
263,971
$ 
232,077
$ 
207,915
$ 
96,576
$ 
1,763,308
$ 
-
$ 
2,879,133
Non-Performing 
-
-
1,432
2,948
102
24,687
-
29,169
Total residential mortgage loans 
$ 
315,286
$ 
263,971
$ 
233,509
$ 
210,863
$ 
96,678
$ 
1,787,995
$ 
-
$ 
2,908,302
Charge-offs on residential mortgage loans 
$ 
-
$ 
6
$ 
10
$ 
-
$ 
8
$ 
1,107
$ 
-
$ 
1,131
(1) 
Excludes accrued interest receivable.
As of December 31, 2024 
Term Loans 
Amortized Cost Basis by Origination Year 
(1)
2024 
2023 
2022 
2021 
2020 
Prior 
Revolving Loans 
Amortized Cost 
Basis 
Total 
(In thousands) 
Puerto Rico and Virgin Islands Regions: 
FHA/VA government-guaranteed loans 
Accrual Status: 
Performing 
$ 
-
$ 
1,146
$ 
1,143
$ 
927
$ 
640
$ 
87,268
$ 
-
$ 
91,124
Non-Performing 
-
-
-
-
-
-
-
-
Total FHA/VA
government-guaranteed loans 
$ 
-
$ 
1,146
$ 
1,143
$ 
927
$ 
640
$ 
87,268
$ 
-
$ 
91,124
Conventional residential mortgage loans 
Accrual Status: 
Performing 
$ 
188,865
$ 
165,191
$ 
151,553
$ 
62,795
$ 
27,078
$ 
1,613,190
$ 
-
$ 
2,208,672
Non-Performing 
-
-
68
-
-
23,341
-
23,409
Total conventional residential mortgage loans 
$ 
188,865
$ 
165,191
$ 
151,621
$ 
62,795
$ 
27,078
$ 
1,636,531
$ 
-
$ 
2,232,081
Total 
Accrual Status: 
Performing 
$ 
188,865
$ 
166,337
$ 
152,696
$ 
63,722
$ 
27,718
$ 
1,700,458
$ 
-
$ 
2,299,796
Non-Performing 
-
-
68
-
-
23,341
-
23,409
Total residential mortgage loans
$ 
188,865
$ 
166,337
$ 
152,764
$ 
63,722
$ 
27,718
$ 
1,723,799
$ 
-
$ 
2,323,205
Charge-offs on residential mortgage loans 
$ 
-
$ 
4
$ 
-
$ 
-
$ 
9
$ 
1,958
$ 
-
$ 
1,971
(1) 
Excludes accrued interest receivable.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
137 
As of December 31, 2024 
Term Loans 
Amortized Cost Basis by Origination Year 
(1)
2024 
2023 
2022 
2021 
2020 
Prior 
Revolving Loans 
Amortized Cost 
Basis 
Total 
(In thousands) 
Florida Region: 
FHA/VA government-guaranteed loans 
Accrual Status: 
Performing 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
1,128
$ 
-
$ 
1,128
Non-Performing 
-
-
-
-
-
-
-
-
Total FHA/VA
government-guaranteed loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
1,128
$ 
-
$ 
1,128
Conventional residential mortgage loans 
Accrual Status: 
Performing 
$ 
89,474
$ 
86,241
$ 
69,077
$ 
41,583
$ 
27,147
$ 
182,036
$ 
-
$ 
495,558
Non-Performing 
-
-
1,233
-
-
7,307
-
8,540
Total conventional residential mortgage loans 
$ 
89,474
$ 
86,241
$ 
70,310
$ 
41,583
$ 
27,147
$ 
189,343
$ 
-
$ 
504,098
Total 
Accrual Status: 
Performing 
$ 
89,474
$ 
86,241
$ 
69,077
$ 
41,583
$ 
27,147
$ 
183,164
$ 
-
$ 
496,686
Non-Performing 
-
-
1,233
-
-
7,307
-
8,540
Total residential mortgage loans 
$ 
89,474
$ 
86,241
$ 
70,310
$ 
41,583
$ 
27,147
$ 
190,471
$ 
-
$ 
505,226
Charge-offs on residential mortgage loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
(1) 
Excludes accrued interest receivable.
As of December 31, 2024 
Term Loans 
Amortized Cost Basis by Origination Year 
(1)
2024 
2023 
2022 
2021 
2020 
Prior 
Revolving Loans 
Amortized Cost 
Basis 
Total 
(In thousands) 
Total: 
FHA/VA government-guaranteed loans 
Accrual Status: 
Performing 
$ 
-
$ 
1,146
$ 
1,143
$ 
927
$ 
640
$ 
88,396
$ 
-
$ 
92,252
Non-Performing 
-
-
-
-
-
-
-
-
Total FHA/VA
government-guaranteed loans 
$ 
-
$ 
1,146
$ 
1,143
$ 
927
$ 
640
$ 
88,396
$ 
-
$ 
92,252
Conventional residential mortgage loans 
Accrual Status: 
Performing 
$ 
278,339
$ 
251,432
$ 
220,630
$ 
104,378
$ 
54,225
$ 
1,795,226
$ 
-
$ 
2,704,230
Non-Performing 
-
-
1,301
-
-
30,648
-
31,949
Total conventional residential mortgage loans 
$ 
278,339
$ 
251,432
$ 
221,931
$ 
104,378
$ 
54,225
$ 
1,825,874
$ 
-
$ 
2,736,179
Total 
Accrual Status: 
Performing 
$ 
278,339
$ 
252,578
$ 
221,773
$ 
105,305
$ 
54,865
$ 
1,883,622
$ 
-
$ 
2,796,482
Non-Performing 
-
-
1,301
-
-
30,648
-
31,949
Total residential mortgage loans 
$ 
278,339
$ 
252,578
$ 
223,074
$ 
105,305
$ 
54,865
$ 
1,914,270
$ 
-
$ 
2,828,431
Charge-offs on residential mortgage loans 
$ 
-
$ 
4
$ 
-
$ 
-
$ 
9
$ 
1,958
$ 
-
$ 
1,971
(1) 
Excludes accrued interest receivable.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
138 
The
following
tables present
the
amortized
cost
of
consumer
loans
by
portfolio
classes
and
by
origination
year
based on
accrual 
status as
of December
31, 2025
and 2024,
and the
gross charge
-offs
for the
years ended
December 31,
2025 and
2024, by
portfolio 
classes and by origination year:
As of December 31, 2025 
Term Loans 
Amortized Cost Basis by Origination Year 
(1)
2025 
2024 
2023 
2022 
2021 
Prior 
Revolving Loans 
Amortized Cost 
Basis 
Total 
(In thousands) 
Puerto Rico and Virgin Islands Region: 
Auto loans 
Accrual Status: 
Performing 
$ 
586,491
$ 
511,257
$ 
382,208
$ 
285,255
$ 
176,764
$ 
86,361
$ 
-
$ 
2,028,336
Non-Performing 
1,161
2,336
3,290
2,779
2,457
2,642
-
14,665
Total auto loans 
$ 
587,652
$ 
513,593
$ 
385,498
$ 
288,034
$ 
179,221
$ 
89,003
$ 
-
$ 
2,043,001
Charge-offs on auto loans 
$ 
1,724
$ 
7,128
$ 
11,548
$ 
7,294
$ 
3,301
$ 
2,844
$ 
-
$ 
33,839
Finance leases 
Accrual Status: 
Performing 
$ 
226,204
$ 
212,272
$ 
210,185
$ 
141,516
$ 
75,913
$ 
22,439
$ 
-
$ 
888,529
Non-Performing 
45
603
816
761
307
978
-
3,510
Total finance leases 
$ 
226,249
$ 
212,875
$ 
211,001
$ 
142,277
$ 
76,220
$ 
23,417
$ 
-
$ 
892,039
Charge-offs on finance leases 
$ 
229
$ 
1,494
$ 
4,388
$ 
3,293
$ 
943
$ 
1,194
$ 
-
$ 
11,541
Personal loans 
Accrual Status: 
Performing 
$ 
113,998
$ 
86,832
$ 
72,120
$ 
43,707
$ 
8,784
$ 
7,810
$ 
-
$ 
333,251
Non-Performing 
149
537
517
406
75
108
-
1,792
Total personal loans 
$ 
114,147
$ 
87,369
$ 
72,637
$ 
44,113
$ 
8,859
$ 
7,918
$ 
-
$ 
335,043
Charge-offs on personal loans 
$ 
467
$ 
4,575
$ 
7,965
$ 
5,294
$ 
957
$ 
1,159
$ 
-
$ 
20,417
Credit cards 
Accrual Status: 
Performing 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
293,088
$ 
293,088
Non-Performing 
-
-
-
-
-
-
-
-
Total credit cards 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
293,088
$ 
293,088
Charge-offs on credit cards 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
21,082
$ 
21,082
Other consumer loans 
Accrual Status: 
Performing 
$ 
68,082
$ 
30,088
$ 
19,390
$ 
8,695
$ 
1,927
$ 
2,252
$ 
7,961
$ 
138,395
Non-Performing 
350
529
264
96
48
7
159
1,453
Total other consumer loans 
$ 
68,432
$ 
30,617
$ 
19,654
$ 
8,791
$ 
1,975
$ 
2,259
$ 
8,120
$ 
139,848
Charge-offs on other consumer loans 
$ 
1,430
$ 
6,414
$ 
4,455
$ 
1,757
$ 
442
$ 
233
$ 
562
$ 
15,293
Total 
Accrual Status: 
Performing 
$ 
994,775
$ 
840,449
$ 
683,903
$ 
479,173
$ 
263,388
$ 
118,862
$ 
301,049
$ 
3,681,599
Non-Performing 
1,705
4,005
4,887
4,042
2,887
3,735
159
21,420
Total consumer loans
$ 
996,480
$ 
844,454
$ 
688,790
$ 
483,215
$ 
266,275
$ 
122,597
$ 
301,208
$ 
3,703,019
Charge-offs on total consumer loans 
$ 
3,850
$ 
19,611
$ 
28,356
$ 
17,638
$ 
5,643
$ 
5,430
$ 
21,644
$ 
102,172
(1) 
Excludes accrued interest receivable.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
139 
As of December 31, 2025 
Term Loans 
Amortized Cost Basis by Origination Year 
(1)
2025 
2024 
2023 
2022 
2021 
Prior 
Revolving Loans 
Amortized Cost 
Basis 
Total 
(In thousands) 
Florida Region: 
Auto loans 
Accrual Status: 
Performing 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
10
$ 
-
$ 
10
Non-Performing 
-
-
-
-
-
-
-
-
Total auto loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
10
$ 
-
$ 
10
Charge-offs on auto loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
25
$ 
-
$ 
25
Finance leases 
Accrual Status: 
Performing 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
Non-Performing 
-
-
-
-
-
-
-
-
Total finance leases 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
Charge-offs on finance leases 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
Personal loans 
Accrual Status: 
Performing 
$ 
-
$ 
100
$ 
13
$ 
-
$ 
-
$ 
-
$ 
-
$ 
113
Non-Performing 
-
-
-
-
-
-
-
-
Total personal loans 
$ 
-
$ 
100
$ 
13
$ 
-
$ 
-
$ 
-
$ 
-
$ 
113
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 
$ 
574
$ 
1,159
$ 
-
$ 
-
$ 
207
$ 
1,868
$ 
1,912
$ 
5,720
Non-Performing 
-
-
-
-
-
13
1
14
Total other consumer loans 
$ 
574
$ 
1,159
$ 
-
$ 
-
$ 
207
$ 
1,881
$ 
1,913
$ 
5,734
Charge-offs on other consumer loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
Total 
Accrual Status: 
Performing 
$ 
574
$ 
1,259
$ 
13
$ 
-
$ 
207
$ 
1,878
$ 
1,912
$ 
5,843
Non-Performing 
-
-
-
-
-
13
1
14
Total consumer loans 
$ 
574
$ 
1,259
$ 
13
$ 
-
$ 
207
$ 
1,891
$ 
1,913
$ 
5,857
Charge-offs on total consumer loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
25
$ 
-
$ 
25
(1) 
Excludes accrued interest receivable.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
140 
As of December 31, 2025 
Term Loans 
Amortized Cost Basis by Origination Year 
(1)
2025 
2024 
2023 
2022 
2021 
Prior 
Revolving Loans 
Amortized Cost 
Basis 
Total 
(In thousands) 
Total: 
Auto loans 
Accrual Status: 
Performing 
$ 
586,491
$ 
511,257
$ 
382,208
$ 
285,255
$ 
176,764
$ 
86,371
$ 
-
$ 
2,028,346
Non-Performing 
1,161
2,336
3,290
2,779
2,457
2,642
-
14,665
Total auto loans 
$ 
587,652
$ 
513,593
$ 
385,498
$ 
288,034
$ 
179,221
$ 
89,013
$ 
-
$ 
2,043,011
Charge-offs on auto loans 
$ 
1,724
$ 
7,128
$ 
11,548
$ 
7,294
$ 
3,301
$ 
2,869
$ 
-
$ 
33,864
Finance leases 
Accrual Status: 
Performing 
$ 
226,204
$ 
212,272
$ 
210,185
$ 
141,516
$ 
75,913
$ 
22,439
$ 
-
$ 
888,529
Non-Performing 
45
603
816
761
307
978
-
3,510
Total finance leases 
$ 
226,249
$ 
212,875
$ 
211,001
$ 
142,277
$ 
76,220
$ 
23,417
$ 
-
$ 
892,039
Charge-offs on finance leases 
$ 
229
$ 
1,494
$ 
4,388
$ 
3,293
$ 
943
$ 
1,194
$ 
-
$ 
11,541
Personal loans 
Accrual Status: 
Performing 
$ 
113,998
$ 
86,932
$ 
72,133
$ 
43,707
$ 
8,784
$ 
7,810
$ 
-
$ 
333,364
Non-Performing 
149
537
517
406
75
108
-
1,792
Total personal loans 
$ 
114,147
$ 
87,469
$ 
72,650
$ 
44,113
$ 
8,859
$ 
7,918
$ 
-
$ 
335,156
Charge-offs on personal loans 
$ 
467
$ 
4,575
$ 
7,965
$ 
5,294
$ 
957
$ 
1,159
$ 
-
$ 
20,417
Credit cards 
Accrual Status: 
Performing 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
293,088
$ 
293,088
Non-Performing 
-
-
-
-
-
-
-
-
Total credit cards 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
293,088
$ 
293,088
Charge-offs on credit cards 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
21,082
$ 
21,082
Other consumer loans 
Accrual Status: 
Performing 
$ 
68,656
$ 
31,247
$ 
19,390
$ 
8,695
$ 
2,134
$ 
4,120
$ 
9,873
$ 
144,115
Non-Performing 
350
529
264
96
48
20
160
1,467
Total other consumer loans 
$ 
69,006
$ 
31,776
$ 
19,654
$ 
8,791
$ 
2,182
$ 
4,140
$ 
10,033
$ 
145,582
Charge-offs on other consumer loans 
$ 
1,430
$ 
6,414
$ 
4,455
$ 
1,757
$ 
442
$ 
233
$ 
562
$ 
15,293
Total 
Accrual Status: 
Performing 
$ 
995,349
$ 
841,708
$ 
683,916
$ 
479,173
$ 
263,595
$ 
120,740
$ 
302,961
$ 
3,687,442
Non-Performing 
1,705
4,005
4,887
4,042
2,887
3,748
160
21,434
Total consumer loans 
$ 
997,054
$ 
845,713
$ 
688,803
$ 
483,215
$ 
266,482
$ 
124,488
$ 
303,121
$ 
3,708,876
Charge-offs on total consumer loans 
$ 
3,850
$ 
19,611
$ 
28,356
$ 
17,638
$ 
5,643
$ 
5,455
$ 
21,644
$ 
102,197
(1) 
Excludes accrued interest receivable.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
141 
As of December 31, 2024 
Term Loans 
Amortized Cost Basis by Origination Year 
(1)
2024 
2023 
2022 
2021 
2020 
Prior 
Revolving Loans 
Amortized Cost 
Basis 
Total 
(In thousands) 
Puerto Rico and Virgin Islands Regions: 
Auto loans 
Accrual Status: 
Performing 
$ 
630,491
$ 
505,173
$ 
399,840
$ 
271,258
$ 
115,246
$ 
88,682
$ 
-
$ 
2,010,690
Non-Performing 
1,412
3,794
3,182
2,810
1,227
2,870
-
15,295
Total auto loans 
$ 
631,903
$ 
508,967
$ 
403,022
$ 
274,068
$ 
116,473
$ 
91,552
$ 
-
$ 
2,025,985
Charge-offs on auto loans 
$ 
1,711
$ 
10,903
$ 
10,338
$ 
5,571
$ 
1,872
$ 
3,409
$ 
-
$ 
33,804
Finance leases 
Accrual Status: 
Performing 
$ 
252,402
$ 
266,188
$ 
194,334
$ 
112,417
$ 
44,157
$ 
26,136
$ 
-
$ 
895,634
Non-Performing 
260
834
1,155
525
289
749
-
3,812
Total finance leases 
$ 
252,662
$ 
267,022
$ 
195,489
$ 
112,942
$ 
44,446
$ 
26,885
$ 
-
$ 
899,446
Charge-offs on finance leases 
$ 
171
$ 
2,628
$ 
3,278
$ 
1,420
$ 
488
$ 
1,147
$ 
-
$ 
9,132
Personal loans 
Accrual Status: 
Performing 
$ 
127,284
$ 
115,428
$ 
73,254
$ 
17,562
$ 
8,359
$ 
16,146
$ 
-
$ 
358,033
Non-Performing 
173
924
593
193
40
213
-
2,136
Total personal loans 
$ 
127,457
$ 
116,352
$ 
73,847
$ 
17,755
$ 
8,399
$ 
16,359
$ 
-
$ 
360,169
Charge-offs on personal loans 
$ 
729
$ 
8,217
$ 
9,503
$ 
2,114
$ 
667
$ 
1,876
$ 
-
$ 
23,106
Credit cards 
Accrual Status: 
Performing 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
321,014
$ 
321,014
Non-Performing 
-
-
-
-
-
-
-
-
Total credit cards 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
321,014
$ 
321,014
Charge-offs on credit cards 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
24,317
$ 
24,317
Other consumer loans 
Accrual Status: 
Performing 
$ 
67,473
$ 
36,941
$ 
16,902
$ 
4,940
$ 
3,627
$ 
3,587
$ 
8,621
$ 
142,091
Non-Performing 
518
370
214
58
11
166
163
1,500
Total other consumer loans 
$ 
67,991
$ 
37,311
$ 
17,116
$ 
4,998
$ 
3,638
$ 
3,753
$ 
8,784
$ 
143,591
Charge-offs on other consumer loans 
$ 
1,754
$ 
9,473
$ 
4,648
$ 
1,120
$ 
278
$ 
569
$ 
623
$ 
18,465
Total 
Accrual Status: 
Performing 
$ 
1,077,650
$ 
923,730
$ 
684,330
$ 
406,177
$ 
171,389
$ 
134,551
$ 
329,635
$ 
3,727,462
Non-Performing 
2,363
5,922
5,144
3,586
1,567
3,998
163
22,743
Total consumer loans
$ 
1,080,013
$ 
929,652
$ 
689,474
$ 
409,763
$ 
172,956
$ 
138,549
$ 
329,798
$ 
3,750,205
Charge-offs on total consumer loans 
$ 
4,365
$ 
31,221
$ 
27,767
$ 
10,225
$ 
3,305
$ 
7,001
$ 
24,940
$ 
108,824
(1) 
Excludes accrued interest receivable.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
142 
As of December 31,
2024 
Term Loans 
Amortized Cost Basis by Origination Year 
(1)
2024 
2023 
2022 
2021 
2020 
Prior 
Revolving Loans 
Amortized Cost 
Basis 
Total 
(In thousands) 
Florida Region: 
Auto loans 
Accrual Status: 
Performing 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
183
$ 
-
$ 
183
Non-Performing 
-
-
-
-
-
10
-
10
Total auto loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
193
$ 
-
$ 
193
Charge-offs on auto loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
77
$ 
-
$ 
77
Finance leases 
Accrual Status: 
Performing 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
Non-Performing 
-
-
-
-
-
-
-
-
Total finance leases 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
Charge-offs on finance leases 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
Personal loans 
Accrual Status: 
Performing 
$ 
1,693
$ 
46
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
1,739
Non-Performing 
-
-
-
-
-
-
-
-
Total personal loans 
$ 
1,693
$ 
46
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
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 
$ 
1,186
$ 
52
$ 
-
$ 
215
$ 
314
$ 
1,891
$ 
1,877
$ 
5,535
Non-Performing 
-
-
-
-
-
16
19
35
Total other consumer loans 
$ 
1,186
$ 
52
$ 
-
$ 
215
$ 
314
$ 
1,907
$ 
1,896
$ 
5,570
Charge-offs on other consumer loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
Total 
Accrual Status: 
Performing 
$ 
2,879
$ 
98
$ 
-
$ 
215
$ 
314
$ 
2,074
$ 
1,877
$ 
7,457
Non-Performing 
-
-
-
-
-
26
19
45
Total consumer loans 
$ 
2,879
$ 
98
$ 
-
$ 
215
$ 
314
$ 
2,100
$ 
1,896
$ 
7,502
Charge-offs on total consumer loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
77
$ 
-
$ 
77
(1) 
Excludes accrued interest receivable.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
143 
As of December 31,
2024 
Term Loans 
Amortized Cost Basis by Origination Year 
(1)
2024 
2023 
2022 
2021 
2020 
Prior 
Revolving Loans 
Amortized Cost 
Basis 
Total 
(In thousands) 
Total: 
Auto loans 
Accrual Status: 
Performing 
$ 
630,491
$ 
505,173
$ 
399,840
$ 
271,258
$ 
115,246
$ 
88,865
$ 
-
$ 
2,010,873
Non-Performing 
1,412
3,794
3,182
2,810
1,227
2,880
-
15,305
Total auto loans 
$ 
631,903
$ 
508,967
$ 
403,022
$ 
274,068
$ 
116,473
$ 
91,745
$ 
-
$ 
2,026,178
Charge-offs on auto loans 
$ 
1,711
$ 
10,903
$ 
10,338
$ 
5,571
$ 
1,872
$ 
3,486
$ 
-
$ 
33,881
Finance leases 
Accrual Status: 
Performing 
$ 
252,402
$ 
266,188
$ 
194,334
$ 
112,417
$ 
44,157
$ 
26,136
$ 
-
$ 
895,634
Non-Performing 
260
834
1,155
525
289
749
-
3,812
Total finance leases 
$ 
252,662
$ 
267,022
$ 
195,489
$ 
112,942
$ 
44,446
$ 
26,885
$ 
-
$ 
899,446
Charge-offs on finance leases 
$ 
171
$ 
2,628
$ 
3,278
$ 
1,420
$ 
488
$ 
1,147
$ 
-
$ 
9,132
Personal loans 
Accrual Status: 
Performing 
$ 
128,977
$ 
115,474
$ 
73,254
$ 
17,562
$ 
8,359
$ 
16,146
$ 
-
$ 
359,772
Non-Performing 
173
924
593
193
40
213
-
2,136
Total personal loans 
$ 
129,150
$ 
116,398
$ 
73,847
$ 
17,755
$ 
8,399
$ 
16,359
$ 
-
$ 
361,908
Charge-offs on personal loans 
$ 
729
$ 
8,217
$ 
9,503
$ 
2,114
$ 
667
$ 
1,876
$ 
-
$ 
23,106
Credit cards 
Accrual Status: 
Performing 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
321,014
$ 
321,014
Non-Performing 
-
-
-
-
-
-
-
-
Total credit cards 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
321,014
$ 
321,014
Charge-offs on credit cards 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
-
$ 
24,317
$ 
24,317
Other consumer loans 
Accrual Status: 
Performing 
$ 
68,659
$ 
36,993
$ 
16,902
$ 
5,155
$ 
3,941
$ 
5,478
$ 
10,498
$ 
147,626
Non-Performing 
518
370
214
58
11
182
182
1,535
Total other consumer loans 
$ 
69,177
$ 
37,363
$ 
17,116
$ 
5,213
$ 
3,952
$ 
5,660
$ 
10,680
$ 
149,161
Charge-offs on other consumer loans 
$ 
1,754
$ 
9,473
$ 
4,648
$ 
1,120
$ 
278
$ 
569
$ 
623
$ 
18,465
Total 
Accrual Status: 
Performing 
$ 
1,080,529
$ 
923,828
$ 
684,330
$ 
406,392
$ 
171,703
$ 
136,625
$ 
331,512
$ 
3,734,919
Non-Performing 
2,363
5,922
5,144
3,586
1,567
4,024
182
22,788
Total consumer loans 
$ 
1,082,892
$ 
929,750
$ 
689,474
$ 
409,978
$ 
173,270
$ 
140,649
$ 
331,694
$ 
3,757,707
Charge-offs on total consumer loans 
$ 
4,365
$ 
31,221
$ 
27,767
$ 
10,225
$ 
3,305
$ 
7,078
$ 
24,940
$ 
108,901
(1) 
Excludes accrued interest receivable.
As of December 31, 2025 and 2024, the balance of revolving loans converted
to term loans was 
no
t material. 
Accrued interest
receivable on
loans totaled
$
58.7
million as
of December
31, 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) 
144 
The
following
tables
present
information
about
collateral
dependent
loans
that
were
individually
evaluated
for
purposes
of 
determining the ACL as of December 31, 2025 and 2024:
As of December 31, 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 
$ 
22,919
$ 
1,233
$ 
-
$ 
22,919
$ 
1,233
Commercial loans: 
Construction loans 
4,321
627
956
5,277
627
Commercial mortgage loans 
4,454
130
19,009
23,463
130
C&I loans
-
-
13,753
13,753
-
Consumer loans: 
Personal loans 
-
-
-
-
-
Other consumer loans 
-
-
-
-
-
$ 
31,694
$ 
1,990
$ 
33,718
$ 
65,412
$ 
1,990
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
December 31, 2025
was 
67
%, 
compared to 
68
% as of December 31, 2024
. 
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
145 
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
years
ended
December
31,
2025,
2024,
and
2023,
loans
pooled
into GNMA
MBS 
amounted to
approximately $
163.6
million, $
127.9
million, and
$
125.4
million, respectively,
for which
the Corporation
recognized a 
net gain
on sale of
$
6.8
million, $
4.6
million, and
$
2.6
million, respectively.
Also, during the
years ended
December 31,
2025, 2024, 
and 2023,
the Corporation
sold approximately
$
9.4
million, $
32.1
million, and
$
29.8
million, respectively,
of performing
residential 
mortgage
loans
to
GSEs,
for
which
the
Corporation
recognized
a
net
gain
on
sale
of
$
0.4
million,
$
0.8
million,
and
$
0.7
million, 
respectively.
The
Corporations
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
December
31,
2025
and
2024,
rebooked
GNMA
delinquent
loans
that
were 
included in the residential mortgage loan portfolio amounted to $
6.7
million and $
5.7
million, respectively.
During
the
years
ended
December
31,
2025,
2024,
and
2023,
the
Corporation
repurchased,
pursuant
to
the
aforementioned 
repurchase
option,
$
1.5
million,
$
2.2
million,
and
$
2.9
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 loans
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 Corporations
risk of 
loss
with
respect
to
these
loans
is
also
minimal
as
these
repurchased
loans
are
generally
performing
loans
with
documentation 
deficiencies.
During the year
ended December 31, 2025,
the Corporation purchased
C&I loan participations
in the Florida region
totaling $
109.2
million,
and
a
commercial
mortgage
loan
in
the
Puerto
Rico
region
totaling
$
20.0
million.
Meanwhile,
during
the
year
ended 
December
31,
2024,
the
Corporation
purchased
commercial
loan
participations
in
the
Florida
region
totaling
$
223.9
million,
which 
consisted
of
approximately
$
210.2
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.
In
addition,
during
the
year
ended 
December 31, 2023, the Corporation purchased C&I loan participations in
the Florida region totaling $
61.3
million. 
During
the
years
ended
December
31,
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 during 
the year
ended December
31, 2025
are net
of a
repurchase liability
of $
0.1
million. In
addition, during
the year
ended December
31, 
2024,
the
Corporation
sold
an $
8.2
million
nonaccrual
C&I
loan
in
the
Puerto
Rico
region,
net
of
a
$
1.2
million
charge-off.
There 
were no
significant sales
of loans
during the
year ended
December 31,
2023, other
than the
sales of
conforming residential
mortgage 
loans mentioned above. 
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
146 
Loan Portfolio Concentration
The Corporations
primary
lending area
is Puerto
Rico. The
Corporations
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 $
13.1
billion as
of December
31, 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
December
31,
2025,
the Corporation
had
$
215.5
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
December
31,
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
$
18.5
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
Corporations
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 Corporations
exposure to
the Puerto
Rico government
as of
December 31,
2025 included
$
8.7
million in a
loan granted to
an affiliate of
the Puerto Rico
Electric Power Authority
(PREPA)
and $
32.9
million in loans
to a public 
corporation of the Puerto Rico government.
Moreover,
as of
December 31,
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 
$
92.4
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
December
31,
2025,
the
Corporation
had
$
67.1
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
December
31,
2025,
the
Corporation
had
$
138.7
million in loans
to USVI government
public corporations,
compared to $
100.4
million as of
December 31, 2024.
As of December
31, 
2025, all loans were currently performing and up to date on principal
and interest payments.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
147 
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 borrowers 
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 loans
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. 
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
148 
The
following
tables
present
the
amortized
cost
basis
as
of
December
31,
2025,
2024
and
2023
of
loans
modified
to
borrowers 
experiencing
financial
difficulty
during
the
years
ended
December
31,
2025,
2024
and
2023,
by
portfolio
classes
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:
Year Ended December 31, 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 
$ 
-
$ 
973
$ 
-
$ 
-
$ 
742
$ 
-
$ 
-
$ 
1,715
0.06%
Construction loans 
-
-
-
-
-
-
-
-
-
Commercial mortgage loans 
-
-
30,165
-
-
-
-
30,165
1.18%
C&I loans 
187
(1) 
-
-
67
(2) 
1,339
78
-
1,671
0.05%
Consumer loans: 
Auto loans 
-
-
-
-
601
400
3,257
(3) 
4,258
0.21%
Personal loans 
-
27
-
-
89
492
-
608
0.18%
Credit cards 
-
-
-
3,405
(2) 
-
-
-
3,405
1.16%
Other consumer loans 
-
-
-
-
383
114
24
(3) 
521
0.36%
Total modifications 
$ 
187
$ 
1,000
$ 
30,165
$ 
3,472
$ 
3,154
$ 
1,084
$ 
3,281
$ 
42,343
Year Ended December 31, 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 
$ 
-
$ 
305
$ 
-
$ 
-
$ 
598
$ 
57
$ 
-
$ 
960
0.04%
Construction loans 
-
-
-
-
120
-
-
120
0.05%
Commercial mortgage loans 
-
-
-
-
127,161
374
-
127,535
4.97%
C&I loans 
-
-
3,273
79
(2) 
2,864
4,019
-
10,235
0.30%
Consumer loans: 
Auto loans 
-
-
-
-
442
220
3,199
(3) 
3,861
0.19%
Personal loans 
-
-
-
-
12
178
-
190
0.05%
Credit cards 
-
-
-
2,905
(2) 
-
-
-
2,905
0.90%
Other consumer loans 
-
-
-
-
352
216
29
(3) 
597
0.40%
Total modifications 
$ 
-
$ 
305
$ 
3,273
$ 
2,984
$ 
131,549
$ 
5,064
$ 
3,228
$ 
146,403
Year Ended December 31, 2023 
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 
$ 
-
$ 
501
$ 
-
$ 
-
$ 
999
$ 
238
$ 
-
$ 
1,738
0.06%
Construction loans 
-
-
-
-
-
-
-
-
-
Commercial mortgage loans 
-
-
-
-
2,222
30,170
-
32,392
1.40%
C&I loans 
-
-
-
186
(2) 
185
-
-
371
0.01%
Consumer loans: 
Auto loans 
-
-
-
-
474
215
2,084
(3) 
2,773
0.14%
Personal loans 
-
-
-
-
138
202
-
340
0.09%
Credit cards 
-
-
-
1,424
(2) 
-
-
-
1,424
0.43%
Other consumer loans 
-
-
-
-
424
78
29
(3) 
531
0.34%
Total modifications 
$ 
-
$ 
501
$ 
-
$ 
1,610
$ 
4,442
$ 
30,903
$ 
2,113
$ 
39,569
(1) 
Modification consists of a six-month deferral of principal and interest to be repaid on or before the end of the forbearance
plan. 
(2) 
Modification consists of reduction in interest rate and revocation of revolving utilization privileges. 
(3) 
Modification consists of court mandated reduction to 0% interest rate for remaining loan term to borrowers in bankruptcy proceedings unless dismissal occurs.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
149 
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
years
ended
December
31,
2025,
2024
and
2023.
The 
financial effects
of the
modifications associated
to payment
delay were
discussed above
and, as
such, were
excluded from
the tables 
below:
Year Ended December 31, 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 
-
% 
93
-
% 
- 
- 
Construction loans 
-
% 
- 
-
% 
- 
- 
Commercial mortgage loans 
-
% 
- 
-
% 
- 
36
C&I loans 
14.27
% 
81
0.50
% 
120
- 
Consumer loans: 
Auto loans 
-
% 
27
3.29
% 
20
- 
Personal loans 
-
% 
26
5.18
% 
23
- 
Credit cards 
15.67
% 
- 
-
% 
- 
- 
Other consumer loans 
-
% 
202
2.76
% 
26
-
Year Ended December 31, 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 
-
% 
103
1.80
% 
106
- 
Construction loans 
-
% 
83
-
% 
- 
- 
Commercial mortgage loans 
-
% 
36
0.50
% 
88
- 
C&I loans 
15.25
% 
18
3.00
% 
9
38
Consumer loans: 
Auto loans 
-
% 
27
2.74
% 
27
- 
Personal loans 
-
% 
25
4.01
% 
16
- 
Credit cards 
16.77
% 
- 
-
% 
- 
- 
Other consumer loans 
-
% 
26
3.00
% 
20
-
Year Ended December 31, 2023 
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 
-
% 
93
2.95
% 
105
- 
Construction loans 
-
% 
- 
-
% 
- 
- 
Commercial mortgage loans 
-
% 
13
0.25
% 
64
- 
C&I loans 
0.45
% 
72
-
% 
- 
- 
Consumer loans: 
Auto loans 
-
% 
23
2.95
% 
24
- 
Personal loans 
-
% 
36
4.57
% 
29
- 
Credit cards 
16.09
% 
- 
-
% 
- 
- 
Other consumer loans 
-
% 
26
1.60
% 
22
-
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
150 
The following
tables present
by portfolio
classes the
performance of
loans modified
during the
years ended
December 31,
2025, 
2024 and 2023 that were granted to borrowers experiencing financial difficulty: 
Year Ended December 31, 2025 
30-59 
60-89 
90+ 
Total 
Delinquency 
Current 
Total 
(In thousands) 
Conventional residential mortgage loans 
$ 
218
$ 
114
$ 
-
$ 
332
$ 
1,383
$ 
1,715
Construction loans 
-
-
-
-
-
-
Commercial mortgage loans 
-
-
-
-
30,165
30,165
C&I loans 
11
5
-
16
1,655
1,671
Consumer loans: 
Auto loans 
77
143
129
349
3,909
4,258
Personal loans 
98
4
24
126
482
608
Credit cards 
330
182
200
712
2,693
3,405
Other consumer loans 
14
11
9
34
487
521
Total modifications 
(1)
$ 
748
$ 
459
$ 
362
$ 
1,569
$ 
40,774
$ 
42,343
Year Ended December 31, 2024 
30-59 
60-89 
90+ 
Total 
Delinquency 
Current 
Total 
(In thousands) 
Conventional residential mortgage loans 
$ 
-
$ 
-
$ 
-
$ 
-
$ 
960
$ 
960
Construction loans 
-
-
-
-
120
120
Commercial mortgage loans 
-
-
-
-
127,535
127,535
C&I loans 
-
-
22
22
10,213
10,235
Consumer loans: 
Auto loans 
15
-
10
25
3,836
3,861
Personal loans 
-
-
-
-
190
190
Credit cards 
382
110
52
544
2,361
2,905
Other consumer loans 
32
18
7
57
540
597
Total modifications 
(1)
$ 
429
$ 
128
$ 
91
$ 
648
$ 
145,755
$ 
146,403
Year Ended December 31, 2023 
30-59 
60-89 
90+ 
Total 
Delinquency 
Current 
Total 
(In thousands) 
Conventional residential mortgage loans 
$ 
14
$ 
-
$ 
-
$ 
14
$ 
1,724
$ 
1,738
Construction loans 
-
-
-
-
-
-
Commercial mortgage loans 
-
-
-
-
32,392
32,392
C&I loans 
-
-
-
-
371
371
Consumer loans: 
Auto loans 
27
18
18
63
2,710
2,773
Personal loans 
52
-
15
67
273
340
Credit cards 
43
16
2
61
1,363
1,424
Other consumer loans 
46
11
20
77
454
531
Total modifications 
(1)
$ 
182
$ 
45
$ 
55
$ 
282
$ 
39,287
$ 
39,569
(1) 
Excludes $
5.5
million, $
4.5
million and
$
3.9
million in restructured
residential mortgage loans
that are government-guaranteed
(e.g., FHA/VA
loans) and were
modified during the
years ended December
31, 2025, 
2024 and 2023, respectively.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
151 
NOTE 4 ALLOWANCE
FOR CREDIT LOSSES FOR LOANS AND FINANCE LEASES
The following tables present 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 
Year Ended December
31, 2025 
(In thousands) 
ACL: 
Beginning balance 
$ 
40,654
$ 
3,824
$ 
22,447
$ 
33,034
$ 
143,983
$ 
243,942
Provision for credit losses - expense 
233
1,494
1,230
7,667
75,282
85,906
Charge-offs
(1,131)
-
(92)
(499)
(102,197)
(103,919)
Recoveries 
1,315
354
247
1,214
19,978
(1) 
23,108
Ending balance 
$ 
41,071
$ 
5,672
$ 
23,832
$ 
41,416
$ 
137,046
$ 
249,037
(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 
Year Ended December
31, 2024 
(In thousands) 
ACL: 
Beginning balance 
$ 
57,397
$ 
5,605
$ 
32,631
$ 
33,996
$ 
132,214
$ 
261,843
Provision for credit losses - (benefit) expense 
(16,225)
(1,912)
(10,717)
(4,749)
96,464
62,861
Charge-offs
(1,971)
-
-
(2,956)
(108,901)
(113,828)
Recoveries 
1,453
131
533
6,743
24,206
(1) 
33,066
Ending balance 
$ 
40,654
$ 
3,824
$ 
22,447
$ 
33,034
$ 
143,983
$ 
243,942
(1) 
Includes recoveries totaling $
10.0
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 
Year Ended December
31, 2023 
(In thousands) 
ACL: 
Beginning balance 
$ 
62,760
$ 
2,308
$ 
35,064
$ 
33,504
$ 
126,828
$ 
260,464
Impact of adoption of ASU 2022-02 (1) 
2,056
-
-
7
53
2,116
Provision for credit losses - (benefit) expense 
(6,866)
1,408
(2,086)
6,702
67,486
66,644
Charge-offs 
(3,245)
(62)
(1,133)
(7,058)
(76,604)
(88,102)
Recoveries 
2,692
1,951
786
841
14,451
20,721
Ending balance 
$ 
57,397
$ 
5,605
$ 
32,631
$ 
33,996
$ 
132,214
$ 
261,843
(1) 
Recognized as
a result
of the
adoption of
ASU 2022-02,
for which
the Corporation
elected to
discontinue the
use of
a discounted
cash flow
methodology for
restructured accruing
loans, which
had a
corresponding 
decrease, net of applicable taxes, in beginning retained earnings as of January 1, 2023.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
152 
The
Corporation
estimates
the
ACL
following
the
methodologies
described
in
Note
1
Nature
of
Business
and
Summary
of 
Significant Accounting Policies 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
December
31,
2025
and
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
December
31,
2025,
the
ACL
for
loans
and
finance
leases
was
$
249.0
million,
an
increase
of
$
5.1
million,
from
$
243.9
million as of December 31,
2024. The increase was mainly
related to the ACL for
C&I loans, which increased by
$
8.3
million, mainly 
due to loan growth, partially
offset by improved financial
performance of certain commercial borrowers.
Also, the ACL for residential 
mortgage loans
increased by
$
0.4
million driven
by loan
growth, partially
offset by
improvements in
macroeconomic variables,
such 
as the
unemployment rate
and the
House 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. 
Meanwhile, the
ACL for
consumer loans
decreased by
$
6.9
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.
Net
charge-offs
totaled
$
80.8
million
for
each
of
the
years
ended
December
31,
2025
and
2024.
The
results
for
the
year
ended 
December
31,
2025
reflect
lower
net
charge-offs
in
consumer
loans
and
finance
leases,
primarily
in
the
unsecured
loan
portfolio, 
which were
offset by
a $
7.6
million decrease
in recoveries
related to
the bulk
sales of
fully charged-off
consumer loans
and finance 
leases and a $
5.0
million recovery recognized in 2024 associated with a C&I loan in the Puerto
Rico region.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
153 
The tables below
present the ACL
related to loans
and finance leases
and the carrying
values of loans
by portfolio segment
as of 
December 31, 2025 and 2024: 
As of December 31, 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 
$ 
2,908,302
$ 
265,568
$ 
2,554,252
$ 
3,688,358
$ 
3,708,876
$ 
13,125,356
Allowance for credit losses 
41,071
5,672
23,832
41,416
137,046
249,037
Allowance for credit losses to 
amortized cost 
1.41
% 
2.14
% 
0.93
% 
1.12
% 
3.70
% 
1.90
%
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
23
Regulatory Matters,
Commitments and
Contingencies for information
on off-balance
sheet exposures as
of December
31, 2025 and 
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.
As
of
December
31,
2025,
the
ACL
for
off-balance
sheet 
credit exposures amounted to $
3.0
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
years 
ended December 31, 2025, 2024 and 2023:
Year
Ended December 31, 
2025 
2024 
2023 
(In thousands) 
Beginning balance 
$ 
3,143
$ 
4,638
$ 
4,273
Provision for credit losses - (benefit) expense 
(130)
(1,495)
365
Ending balance 
$ 
3,013
$ 
3,143
$ 
4,638
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
154 
NOTE 5 PREMISES AND EQUIPMENT 
Premises and equipment comprise:
Useful Life Range In Years 
As of December 31, 
Minimum 
Maximum 
2025 
2024 
(Dollars in thousands) 
Buildings and improvements 
10
35
$ 
144,268
$ 
144,935
Leasehold improvements 
1
10
78,122
79,498
Furniture, equipment and software 
2
10
155,061
152,588
377,451
377,021
Accumulated depreciation and amortization 
(284,833)
(274,731)
92,618
102,290
Land 
29,965
29,965
Projects in progress
(1)
4,337
1,182
Total premises and equipment,
net 
$ 
126,920
$ 
133,437
(1) Mostly related to the construction of several branches in the
Puerto Rico region expected to be completed between 2026 and
early 2027.
Depreciation and
amortization expense
amounted to
$
17.2
million, $
18.6
million, and
$
20.5
million for
the years ended
December 
31, 2025, 2024, and 2023, respectively. 
See
Note
15
Other
Non-Interest
Income
for
information
related
to
the
gains
from
sales
of
fixed
assets
and
Note
19
Fair 
Value
for information on write-downs recorded on long-lived assets held for sale.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
155 
NOTE 6 
OTHER REAL ESTATE
OWNED (OREO)
The following table presents the OREO inventory as of the indicated dates: 
December 31, 2025 
December 31, 2024 
(In thousands) 
OREO balances, carrying value: 
Residential 
(1)
$ 
6,524
$ 
12,897
Construction 
386
522
Commercial
(2)
612
3,887
Total 
$ 
7,522
$ 
17,306
(1) 
Excludes $
4.1
million and $
5.2
million as of December
31, 2025 and 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 2025, the Corporation
recorded a $
2.8
million valuation adjustment in
connection with an ongoing
litigation involving a commercial
OREO property in the
Virgin Islands
region. 
See Note 23 Regulatory Matters, Commitments and Contingencies
for further details.
See Note 19 Fair
Value
for information on subsequent
measurement adjustments recorded
on OREO properties reported
as part 
of Net
gain on
OREO operations
in the
consolidated
statements of
income during
the years
ended December
31, 2025,
2024, and 
2023.
NOTE 7 RELATED-PARTY
TRANSACTIONS 
The
Corporation
has
granted
loans
to
its
directors,
executive
officers,
and
certain
related
individuals
or
entities
in
the
ordinary 
course of business. The movement and balance of these loans were as follows:
Amount 
(1)
(In thousands) 
Balance at December 31, 2023 
$ 
827
Additions 
80
Payments 
(120)
Balance at December 31, 2024 
787
Additions 
63
Payments 
(157)
Other changes 
(495)
Balance at December 31, 2025 
$ 
198
(1) Includes loans granted to related parties which were then
sold in the secondary market.
These
loans
were
made
subject
to
the
provisions
of
the
Federal
Reserve
Boards
Regulation
O
Loans
to
Executive
Officers, 
Directors
and
Principal
Shareholders
of
Member
Banks,
which
governs
the
permissible
lending
relationships
between
a
financial 
institution
and
its
executive
officers,
directors,
principal
shareholders,
their
families,
and
related
parties.
Amounts
arising
from 
changes
in
the
status
of
individuals
considered
related
parties
are
reported
as
other
changes
in
the
table
above,
which
for
2025 
reflected the retirement of 
three
executive officers. There were no changes in the status of related parties during
2024. 
From
time
to
time,
the
Corporation,
in
the
ordinary
course
of
its
business,
obtains
services
from
related
parties
or
makes 
contributions to non-profit organizations that have some association
with the Corporation.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
156 
NOTE 8 DEPOSITS
The following table summarizes deposit balances as of the indicated dates: 
December 31, 2025 
December 31, 2024 
(In thousands) 
Type of account: 
Non-interest-bearing deposit accounts 
$ 
5,549,416
$ 
5,547,538
Interest-bearing checking accounts 
3,512,649
4,308,116
Interest-bearing saving accounts 
3,452,192
3,530,382
Time deposits 
3,562,331
3,007,144
Brokered CDs 
593,555
478,118
Total 
$ 
16,670,143
$ 
16,871,298
The
weighted-average
interest
rate
on
total
interest-bearing
deposits
as
of
December 31,
2025
and
2024
was 
2.07
%
and 
2.18
%, 
respectively.
As
of
December 31,
2025,
the
aggregate
amount
of
unplanned
overdrafts
of
demand
deposits
that
were
reclassified
as
loans 
amounted
to
$
3.0
million
(2024
-
$
2.0
million).
Pre-arranged
overdrafts
lines
of
credit,
also
reported
as
loans,
amounted
to
$
26.1
million as of December 31, 2025 (2024 - $
25.6
million).
The following
table presents
the
remaining
contractual
maturities
of
time deposits,
including
brokered
CDs, as
of December
31, 
2025: 
Total
(In thousands) 
Three months or less 
$ 
1,294,494
Over three months to six months 
740,549
Over six months to one year 
1,155,297
Over one year to two years
704,128
Over two years to three years
148,298
Over three years to four years
52,904
Over four years to five years
44,943
Over five years 
15,273
Total 
$ 
4,155,886
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 
December 31, 2025
and 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
December 31,
2025,
unamortized
broker
placement
fees
amounted
to
$
0.9
million (2024 - $
1.1
million), which are amortized over the contractual maturity of the brokered CDs under
the interest method.
As of December 31,
2025, deposit accounts issued
to government agencies
amounted to $
3.0
billion (2024 $
3.5
billion), of which 
$
2.5
billion consisted of
public sector deposits
in Puerto Rico
(2024 $
3.1
billion). These deposits
are insured by
the FDIC up
to the 
applicable
limits.
The
uninsured
portions
were
collateralized
by
securities and
loans
with
an
amortized
cost
of $
3.0
billion
(2024
$
3.7
billion) and
an estimated
market value
of $
2.8
billion (2024
$
3.3
billion). In
addition to
securities and
loans, as
of December 
31, 2025
and 2024,
the Corporation
used $
225.0
million and
$
175.0
million, respectively,
in letters
of credit
issued by
the FHLB
as 
pledges for public deposits in the Virgin
Islands.
A table showing interest expense on interest-bearing deposits for
the indicated periods follows: 
Year Ended December 31, 
2025 
2024 
2023 
(In thousands) 
Checking accounts 
$ 
74,450
$ 
86,537
$ 
74,271
Saving accounts 
28,249
29,025
25,955
Time deposits 
110,974
105,712
68,605
Brokered CDs 
24,010
31,833
16,630
Total 
$ 
237,683
$ 
253,107
$ 
185,461
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
157 
NOTE 9 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: 
December 31, 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 December 31, 2025 and 2024, respectively, with contractual maturity
dates ranging from March 2026 to 
November 2027.
Advances from the FHLB mature as follows as of the indicated date: 
December 31, 2025 
(In thousands) 
Three months or less 
$ 
90,000
Over one year to two years 
200,000
Total
(1)
$ 
290,000
(1) Average remaining term to maturity of 
1.36
years.
The maximum
aggregate balance
of advances
from the
FHLB outstanding
at any
month-end during
the years
ended December 31, 
2025 and
2024 was
$
650.0
million and
$
500.0
million, respectively.
The total
average balance
of FHLB
advances during
2025 was 
$
347.4
million (2024 - $
500.1
million).
The
Corporation
obtains
advances and
applies for
the issuance
of letters
of
credit from
the FHLB
under an
Advances, Collateral 
Pledge,
and
Security
Agreement
(the
Collateral
Agreement)
that
requires
the
pledge
of
qualifying
mortgage
collateral
or
U.S. 
Treasury
or U.S.
agencies debt
securities collateral,
as applicable.
Collateral values
are subject
to FHLB-determined
haircuts, which 
represent a percentage reduction applied
to the collaterals
value. As of December 31, 2025
and 2024, the estimated value of
mortgage 
loans pledged
as collateral,
net of
haircut, amounted
to $
1.4
billion and
$
1.2
billion, respectively,
and U.S.
agencies obligations
and 
MBS pledged as collateral,
net of haircut, amounted
to $
216.4
million and $
438.5
million, respectively.
As of December 31, 2025,
the 
Corporation had approximately
$
1.1
billion of additional
borrowing capacity under
this facility based on
the pledged collateral,
net of 
haircut. Advances
may be
prepaid, in
whole or
in part
at the
borrowers
option, subject
to applicable
fees determined
by the
FHLB, 
based on all relevant factors including, but not limited to, the terms of
the advance and related hedging or funding costs.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
158 
Junior Subordinated Debentures 
Junior subordinated debentures, as of the indicated dates, consisted of:
(In thousands) 
December 31, 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).
During 2025, the
Corporation redeemed $
61.7
million of the remaining
TruPS issued
by FBP Statutory
Trusts I and
II, which were 
outstanding as
of December
31, 2024.
See Note
12 
Stockholders Equity
for additional
information regarding
the redemption
of 
these TruPS.
Loans Payable 
The Corporation
participates in
the Borrower-in-Custody
Program (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
of
December
31,
2025, 
pledged
collateral
that
is
related
to
this
credit
facility
amounted
to
$
2.6
billion,
net
of
haircut,
mainly
commercial,
consumer,
and 
residential mortgage
loans,
which is
fully available
for funding.
The FED
Discount Window
program provide
s
access to
a low-cost, 
short-term liquidity source during periods of market volatility.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
159 
NOTE 10 EARNINGS PER COMMON
.
SHARE
The calculations of earnings per common share for the years ended December 31,
2025, 2024, and 2023 are as follows: 
Year
Ended December 31, 
2025 
2024 
2023 
(In thousands, except per share information) 
Net income attributable to common stockholders 
$ 
344,866
$ 
298,724
$ 
302,864
Weighted-Average
Shares: 
Average common
shares outstanding 
159,956
164,549
176,504
Average potential
dilutive common shares
783
719
676
Average common
shares outstanding - assuming dilution 
160,739
165,268
177,180
Earnings per common share: 
Basic
$ 
2.16
$ 
1.82
$ 
1.72
Diluted
$ 
2.15
$ 
1.81
$ 
1.71
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 years ended December 31,
2025, 2024 and 2023.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
160 
NOTE 11 STOCK-BASED
.
COMPENSATION
The
First
BanCorp.
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
December
31,
2025,
there
were 
1,973,213
authorized
shares of
common stock
available for
issuance under
the Omnibus
Plan. The
Corporations
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 participants
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
Corporations 
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
years ended December
31, 2025, 
2024 and 2023: 
Year Ended December 31, 
2025 
2024 
2023 
Number of 
Weighted- 
Number of 
Weighted- 
Number of 
Weighted- 
shares of 
Average 
shares of 
Average 
shares of 
Average 
restricted 
Grant Date 
restricted 
Grant Date 
restricted 
Grant Date 
stock 
Fair Value 
stock 
Fair Value 
stock 
Fair Value 
Unvested shares outstanding at beginning of year 
1,007,621
$ 
14.39
889,642
$ 
12.30
938,491
$ 
9.14
Granted 
(1)
463,289
18.47
415,577
17.50
522,801
12.07
Forfeited 
(10,793)
16.42
(14,896)
14.07
(63,133)
11.36
Vested 
(426,427)
13.16
(282,702)
12.40
(508,517)
6.36
Unvested shares outstanding at end of year 
1,033,690
$ 
16.71
1,007,621
$ 
14.39
889,642
$ 
12.30
(1) 
Includes restricted stock
awarded to independent
directors of 
17,744
; 
18,509
and 
28,973
shares during 2025,
2024 and 2023,
respectively,
and restricted stock
awarded to employees
of 
445,545
; 
397,068
and 
494,008
shares for
2025, 2024
and 2023,
respectively,
of which 
103,560
; 
84,122
and 
33,718
shares, respectively,
were granted
to retirement-eligible
employees 
and thus charged to earnings as of the grant date.
For the
years ended
December 31,
2025, 2024
and 2023,
the Corporation
recognized
$
7.3
million, $
6.2
million and
$
5.7
million, 
respectively,
of
stock-based
compensation
expense
related
to
restricted
stock
awards.
As
of
December
31,
2025,
there
was
$
5.6
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 
1.5
years. 
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
161 
Performance Units 
Under the Omnibus Plan, the Corporation may award
performance units to participants, with each unit representing
the value of one 
share
of
the
Corporations
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
years ended December 31, 2025, 
2024 and 2023:
Year Ended
December 31, 
2025 
2024 
2023 
Number
Weighted- 
Number
Weighted- 
Number
Weighted- 
of 
Average 
of 
Average 
of 
Average 
Performance 
Grant Date 
Performance 
Grant Date 
Performance 
Grant Date 
Units 
Fair Value 
Units 
Fair Value 
Units 
Fair Value 
Performance units at beginning of year 
549,032
$ 
14.37
534,261
$ 
12.25
791,923
$ 
7.36
Additions 
(1)
161,744
18.66
165,487
18.39
216,876
12.24
Vested 
(2)
(166,669)
13.15
(150,716)
11.26
(474,538)
4.08
Performance units at end of year 
544,107
$ 
16.02
549,032
$ 
14.37
534,261
$ 
12.25
(1) 
Units
granted
during
the
years
ended
December
31,
2025,
2024
and
2023
are
based
on
the
achievement
of
the
Relative
TSR
and
TBVPS
performance
goals
during
a
three-year 
performance
cycle
beginning
January
1,
2025,
January
1,
2024
and
January
1,
2023,
respectively,
and
ending
on
December
31,
2027,
December
31,
2026
and
December
31,
2025, 
respectively. 
(2) 
Units vested during the years
ended December 31, 2025,
2024 and 2023 are related to
performance units granted in 2022,
2021 and 2020, 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
Corporations
common
stock
on
the
respective
date
of
the
grant
and
assuming
attainment
of
100%
of
target 
opportunity.
As
of
December
31,
2025,
there
have
been
no
changes
in
managements
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) 
162 
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
years ended December 31, 2025, 2024 and 2023: 
Year
Ended December 31, 
2025 
2024 
2023 
Risk-free interest rate 
(1)
3.92
% 
4.41
% 
3.98
% 
Correlation coefficient 
74.96
73.80
77.16
Expected dividend yield 
(2)
-
-
-
Expected volatility 
(3)
31.94
34.65
41.37
Expected life (in years) 
2.79
2.78
2.79
(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
years ended
December 31,
2025, 2024
and 2023,
the Corporation
recognized
$
2.8
million, $
2.5
million and
$
2.1
million, 
respectively,
of stock-based
compensation expense
related to performance
units. As
of December
31, 2025,
there was $
3.7
million of 
total
unrecognized
compensation
cost
related
to
unvested
performance
units
that
the
Corporation
expects
to
recognize
over
a 
weighted-average period of 
1.7
years. 
Shares withheld 
During 2025,
the Corporation
withheld 
194,647
shares (2024
138,460
shares; 2023
289,623
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 stock repurchases.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
163 
NOTE 12 
STOCKHOLDERS
EQUITY 
Repurchase Programs 
On July 22, 2024, the Corporation announced that its Board of Directors
had approved a repurchase program authorizing up to $
250
million
in
repurchases,
which
could
include
common
stock
and/or
junior
subordinated
debentures.
Under
this
program,
the 
Corporation repurchased 
7,085,582
shares of common stock through open market transactions at an average
price of $
19.52
, for a total 
cost
of
approximately
$
138.3
million
during
2025.
In
addition,
the
Corporation
redeemed
$
111.7
million
of
junior
subordinated 
debentures, of which $
61.7
million were redeemed during 2025. These transactions completed the
$
250
million repurchase program. 
Furthermore,
on
October
22,
2025,
the
Corporation
announced
that
its
Board
of
Directors
approved
a
new
stock
repurchase 
program authorizing
up to
$
200
million of
its outstanding
common
stock. Repurchases
under
the program
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 
Corporations
repurchase
program
is
subject
to
various
factors,
including
the
Corporations
capital
position,
liquidity,
financial 
performance
and
alternative
uses
of
capital,
stock
trading
price,
and
general
market
conditions.
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 Corporations discretion.
Any repurchased shares of common stock
are expected to be held 
as treasury shares. During
2025, the Corporation repurchased 
588,817
shares of common stock through
open market transactions at an 
average
price
of
$
19.87
,
for
a
total
cost
of
approximately
$
11.7
million
under
this
stock
repurchase
program.
As
of
December
31, 
2025, the Corporation has remaining
authorization of approximately $
188.3
million, which it expects to execute
through the end of the 
fourth
quarter
of
2026.
The
Corporations
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 years ended December 31, 2025, 2024 and 
2023: 
Total
Number of Shares 
2025 
2024 
2023 
Common stock outstanding, beginning of year 
163,868,877
169,302,812
182,709,059
Common stock repurchased
(1)
(7,869,046)
(5,985,332)
(14,340,453)
Common stock reissued under stock-based compensation plan 
629,958
566,293
997,339
Restricted stock forfeited 
(10,793)
(14,896)
(63,133)
Common stock outstanding, end of year 
156,618,996
163,868,877
169,302,812
(1) 
For 2025, 2024 and 2023, includes 
194,647
; 
138,460
and 
289,623
shares, respectively, of common stock
surrendered to cover plan participants' payroll and income taxes.
For
the
years
ended
December
31,
2025,
2024
and
2023,
total
cash
dividends
declared
on
shares
of
common
stock
amounted
to 
$
115.7
million ($
0.72
per share),
$
106.0
million ($
0.64
per share)
and $
99.6
million ($
0.56
per share),
respectively.
On January
26, 
2026,
the
Corporations
Board
of
Directors
declared
a
quarterly
cash
dividend
of
$
0.20
per
common
share,
which
represents
an 
increase of
$
0.02
per common share,
or an 
11
% increase, compared
to its most
recent quarterly
dividend paid
in December
12, 2025. 
The dividend
is payable on
March 13,
2026 to shareholders
of record
at the close
of business on
February 26,
2026. The Corporation 
intends to continue
to pay quarterly
dividends on
common stock. However,
the Corporations
common stock dividends,
including the 
declaration, timing,
and amount, remain
subject to consideration
and approval by
the Corporations
Board of Directors
at the relevant 
times. 
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
164 
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
Corporations
Board
of 
Directors
when
authorizing
the
issuance
of
that
particular
series
and
are
redeemable
at
the
Corporations
option. 
No
shares
of 
preferred stock were outstanding as of December 31, 2025 and 2024. 
Treasury Stock
The following table shows the changes in shares of treasury stock for the years ended
December 31, 2025, 2024 and 2023: 
Total
Number of Shares 
2025 
2024 
2023 
Treasury stock, beginning of year 
59,794,239
54,360,304
40,954,057
Common stock repurchased 
7,869,046
5,985,332
14,340,453
Common stock reissued under stock-based compensation plan 
(629,958)
(566,293)
(997,339)
Restricted stock forfeited 
10,793
14,896
63,133
Treasury stock, end of year 
67,044,120
59,794,239
54,360,304
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 
FirstBanks
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.
During the years ended
December 31, 2025, 2024
and 
2023, the Corporation transferred $
32.3
million, $
30.6
million and $
31.1
million, respectively, to
the legal surplus reserve. FirstBanks 
legal
surplus
reserve,
included
as
part
of
retained
earnings
in
the
Corporations
consolidated
statements
of
financial
condition, 
amounted to $
262.5
million as of December 31, 2025 and $
230.2
million as of December 31, 2024.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
165 
NOTE 13 ACCUMULATED
OTHER COMPREHENSIVE LOSS
The following
table presents
the changes
in accumulated
other comprehensive
loss for
the years
ended December
31, 2025,
2024 
and 2023:
Changes in Accumulated Other Comprehensive
Loss by Component
(1)
Year Ended December 31, 
2025 
2024 
2023 
(In thousands) 
Unrealized net holding losses on available-for-sale
debt securities: 
Beginning balance 
$ 
(567,338)
$ 
(640,552)
$ 
(805,972)
Other comprehensive income
(2)
212,398
73,214
165,420
Ending balance 
$ 
(354,940)
$ 
(567,338)
$ 
(640,552)
Adjustment of pension and postretirement
benefit plans: 
Beginning balance 
$ 
782
$ 
1,382
$ 
1,194
Other comprehensive (loss) income 
(392)
(600)
188
Ending balance 
$ 
390
$ 
782
$ 
1,382
(1) 
All amounts presented are net of tax. 
(2) 
Net unrealized holding losses 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.
The following table presents the amounts reclassified out of each component
of accumulated other comprehensive loss for the years 
ended December 31, 2025, 2024, and 2023:
Reclassifications Out of Accumulated Other 
Comprehensive Loss 
Affected Line Item in the Consolidated 
Statements of Income 
Year Ended December 31, 
2025 
2024 
2023 
(In thousands) 
Adjustment of pension and postretirement benefit plans: 
Amortization of net loss 
Other expenses 
$ 
27
$ 
56
$ 
17
Total before tax 
$ 
27
$ 
56
$ 
17
Income tax expense
(10)
(21)
(6)
Total, net of tax 
$ 
17
$ 
35
$ 
11
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
166 
NOTE 14 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
BSPR acquisition on
September 1, 2020.
One defined benefit
pension plan covers
substantially all of 
BSPRs
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 changes
in projected
benefit obligation
and changes
in plan
assets for
the years
ended December 
31, 2025 and 2024:
December 31, 2025 
December 31, 2024 
(In thousands) 
Changes in projected benefit obligation: 
Projected benefit obligation at the beginning of year,
defined benefit pension plans 
$ 
69,559
$ 
73,547
Interest cost 
3,710
3,603
Actuarial loss (gain) 
1,896
(1,813)
Benefits paid 
(5,701)
(5,778)
Projected benefit obligation at the end of year,
pension plans 
$ 
69,464
$ 
69,559
Projected benefit obligation, other postretirement benefit plan 
151
151
Projected benefit obligation at the end of year 
$ 
69,615
$ 
69,710
Changes in plan assets: 
Fair value of plan assets at the beginning of year 
$ 
72,808
$ 
77,365
Actual return on plan assets - gain 
5,279
1,221
Benefits paid 
(5,701)
(5,778)
Fair value of pension plan assets at the end of year
(1)
$ 
72,386
$ 
72,808
Net asset, pension plans 
2,922
3,249
Net benefit obligation, other postretirement benefit plan 
(151)
(151)
Net asset 
$ 
2,771
$ 
3,098
(1) 
Other postretirement plan did not contain any assets as of
December 31, 2025 and 2024.
The weighted-average
discount rate
used to
determine the
benefit obligation
was 
5.33
% and 
5.60
% as
of December
31, 2025
and 
2024,
respectively.
The
discount
rate
represents
a
single
equivalent
rate
that
produces
the
same
present
value
of
projected
benefit 
obligation cash flows as those
calculated using the plans
actuarial yield curve. In establishing
the expected long-term rate of return
on 
plan
assets,
the
Corporation
considered
input
from
its
consultant,
long-term
inflation
assumptions,
interest
rate
scenarios,
and 
historical asset performance. Based on
this analysis, the expected long-term
rate of return was 
5.75
% as of each of December 31, 2025 
and
2024.
The
Pension
Plans
investment
policy
incorporates
liability-hedging
assets
to
reduce
funded
status
volatility,
diversified 
return-seeking assets to
mitigate equity
risk, and
plan-specific glidepaths
designed to
systematically reduce
investment risk
as funded 
status improves.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
167 
The following
table presents
information
for
the plans
with a
projected
benefit obligation
and accumulated
benefit obligation
in 
excess of plan assets for the years ended December 31, 2025 and 2024: 
December 31, 2025 
December 31, 2024 
(In thousands) 
Projected benefit obligation 
$ 
47,587
$ 
47,305
Accumulated benefit obligation 
47,587
47,305
Fair value of plan assets 
43,607
43,651
The following table presents the components of net periodic (benefit)
cost for the years ended December 31, 2025, 2024, and 2023:
Affected Line Item 
in the Consolidated 
Year Ended December 31, 
Statements of Income 
2025 
2024 
2023 
(In thousands) 
Net periodic (benefit) cost, pension plans: 
Interest cost 
Other expenses
$ 
3,710
$ 
3,603
$ 
3,800
Expected return on plan assets 
Other expenses
(3,992)
(4,072)
(3,543)
Net periodic (benefit) cost, pension plans 
(282)
(469)
257
Net periodic cost, postretirement plan 
Other expenses
33
66
25
Net periodic (benefit) cost 
$ 
(249)
$ 
(403)
$ 
282
The following table presents the
weighted-average assumptions used to
determine the net periodic (benefit)
cost for the pension and 
other postretirement benefit plans for the years ended December 31, 2025,
2024, and 2023:
Year Ended December 31, 
2025 
2024 
2023 
Discount rate 
5.60%
5.14%
5.43%
Expected return on plan assets 
5.75%
5.51%
4.80%
The
following
table
presents
the
changes
in
pre-tax
accumulated
other
comprehensive
income
of
the
Pension
Plans
and 
Postretirement Benefit Plan for the years ended December 31, 2025, 2024,
and 2023: 
Year Ended December 31, 
2025 
2024 
2023 
(In thousands) 
Accumulated other comprehensive income at beginning of year, pension plans 
$ 
1,331
$ 
2,369
$ 
1,974
Net (loss) gain 
(609)
(1,038)
395
Accumulated other comprehensive income at end of year, pension plans 
722
1,331
2,369
Accumulated other comprehensive loss at end of year, postretirement plan 
(95)
(77)
(155)
Accumulated other comprehensive income at end of year 
$ 
627
$ 
1,254
$ 
2,214
The following
are the
pre-tax amounts
recognized in
accumulated other
comprehensive income
for the
years ended
December 31, 
2025, 2024, and 2023:
Year
Ended December 31, 
2025 
2024 
2023 
(In thousands) 
Net actuarial (loss) gain, pension plans 
$ 
(609)
$ 
(1,038)
$ 
395
Net actuarial (loss) gain, other postretirement benefit plan 
(45)
22
(111)
Amortization of net loss 
27
56
17
Net amount recognized 
$ 
(627)
$ 
(960)
$ 
301
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
168 
The Pension Plans asset allocations by asset category are as follows as of the indicated
dates: 
December 31, 2025 
December 31, 2024 
Asset category 
Investment in funds 
100%
96%
Other 
0%
4%
100%
100%
Determination of Fair Value 
The following is a description of the valuation inputs and techniques
used to measure the fair value of pension plan assets:
Investment in
Funds - 
Investment in
common collective
trusts, which
primarily consist
of equity
securities, MBS,
corporate bonds 
and
U.S.
Treasury
securities,
have
been
measured
at
fair
value
using
the
net
asset
value
per
unit
as
a
practical
expedient
and, 
accordingly,
have not been classified
in the fair value
hierarchy.
Fair value is based
on the calculated net
asset value of shares
held by 
the Plan as reported by the sponsor of the funds.
Interest-Bearing
Deposits
- 
Interest-bearing
deposits consist
of
money
market
accounts with
short-term
maturities and,
therefore, 
the carrying value approximates fair value.
The Corporation does not expect to contribute to the Pension Plans during
2026. 
The Corporations
investment policy
with respect
to the
Corporations
Pension
Plans is
to optimize,
without undue
risk, the
total 
return
on investment
of the
Plan assets
after inflation,
within
a framework
of prudent
and reasonable
portfolio
risk. The
investment 
portfolio
is
diversified
in
multiple
asset
classes
to
reduce
portfolio
risk,
and
assets
may
be
shifted
between
asset
classes
to
reduce 
volatility when
warranted by projections
of the economic
and/or financial
market environment,
consistent with
Employee Retirement 
Income
Security Act
of 1974,
as amended
(ERISA).
As circumstances
and
market conditions
change,
the Corporations
target
asset 
allocations
may
be
amended
to reflect
the
most
appropriate
distribution
given
the new
environment,
consistent with
the
investment 
objectives.
Expected future benefit payments for the plans during the next ten years
are as follows:
Amount 
(In thousands) 
2026 
$ 
6,332
2027 
6,170
2028 
5,924
2029 
5,865
2030 
5,739
2031 through 2035 
26,760
$ 
56,790
Defined Contribution Plan 
In
addition,
FirstBank
provides
contributory
retirement
plans
pursuant
to
Section 1081.01
of
the
Puerto
Rico
Internal
Revenue 
Code of 2011,
as amended (the PR
Tax
Code) for Puerto Rico
employees and Section 401(k)
of the U.S. Internal Revenue
Code for 
USVI and
U.S. employees (the
Plans). Eligible
employees may
participate in
the Plans
after completion
of 
three months
of service 
for
purposes
of
both:
(i)
making
elective
deferral
contributions
and
(ii)
sharing
in
the
Banks
matching,
qualified
matching,
and 
qualified non-elective
contributions. The
Bank contributes a
matching contribution
of 
fifty
cents for every
dollar up to
the first 
6
% of 
the participants
eligible compensation
that a participant
contributes to
the Plan
on a pre-tax basis. 
The matching contribution of fifty 
cents for every dollar of the employees contribution is comprised of: (i) twenty-five cents for every dollar of the employees 
contribution up to 6% of the employees eligible compensation to be paid to the Plan as of each bi-weekly payroll; and (ii) an 
additional twenty-five cents for every dollar of the employees contribution up to 6% of the employees eligible compensation to be 
deposited as a lump sum subsequent to the Plan Year.
Puerto Rico
employees were
permitted to
contribute up
to $
15,000
for each
of 
the years ended December 31,
2025, 2024 and 2023
(USVI and U.S. employees -
$
23,500
for 2025, $
23,000
for 2024 and $
22,500
for 
2023).
Additional
contributions
to
the
Plans
may
be
voluntarily
made
by
the
Bank
as
determined
by
its
Board
of
Directors. 
No
additional
discretionary
contributions were
made for
the years
ended
December 31,
2025, 2024,
and 2023.
The Bank
had
total plan 
expenses of $
4.4
million for the year ended December 31, 2025 (2024 - $
4.1
million; 2023 - $
3.4
million).
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
169 
NOTE 15 OTHER NON-INTEREST INCOME
A detail of other non-interest income is as follows for the indicated periods: 
Year
Ended December 31, 
2025 
2024 
2023 
(In thousands) 
Non-deferrable loan fees 
$ 
4,002
$ 
3,692
$ 
4,412
Mail and cable transmission commissions 
3,275
3,354
3,289
Gain from insurance proceeds 
-
1,523
379
Net gain (loss) on equity securities 
125
(19)
21
Insurance referrals commissions 
2,125
2,151
2,722
Gain from sales of fixed assets 
(1)
16
103
3,514
Gain recognized from legal settlement 
-
-
3,600
Other
8,545
8,088
7,851
Total
$ 
18,088
$ 
18,892
$ 
25,788
(1) For the year ended December 31, 2023, includes $
3.0
million related to the sale of a banking premise in
the Florida region.
NOTE 16 OTHER NON-INTEREST EXPENSES
A detail of other non-interest expenses is as follows for the indicated periods: 
Year
Ended December 31, 
2025 
2024 
2023 
(In thousands) 
Supplies and printing 
$ 
1,918
$ 
1,732
$ 
1,543
Amortization of intangible assets 
3,509
6,416
7,735
Servicing and processing fees 
6,214
5,694
5,342
Other insurance and supervisory fees 
5,788
8,639
9,385
Provision for operational losses 
8,538
6,780
3,305
Net periodic (benefit) cost, pension and other postretirement plans 
(249)
(403)
282
Other
6,032
6,074
6,074
Total
$ 
31,750
$ 
34,932
$ 
33,666
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
170 
NOTE 17 
INCOME TAXES
The Corporation
is subject to Puerto
Rico income tax
on its income
from all sources.
Under 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
certain
entities
that
have
special
tax
treatments,
including
doing 
business
through
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 that have
certain tax advantages
under Act
60 
of 2019. 
Under the
PR Tax
Code, a subsidiary
may realize
a tax benefit
from a net
operating loss (NOL)
only if it
can generate sufficient 
taxable
income
within
the
applicable
NOL
carryforward
period.
Pursuant
to
the
PR
Tax
Code,
the
carryforward
period
for
NOLs 
incurred
during
taxable
years
commencing
after
December
31,
2012
is
10
years.
The
PR
Tax
Code
provides
a
dividend
received 
deduction
of 
100
%
on
dividends
received
from
controlled
subsidiaries
subject
to
taxation
in
Puerto
Rico
and 
85
%
on
dividends 
received from other taxable domestic corporations.
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
Corporations
expectation
of 
realizing these
tax benefits under
the new election
established by the
Act. In the
fourth quarter of
2025, the Corporation
also reversed 
approximately $
0.5
million of valuation allowance related to higher utilization of NOL carryforwards. 
Income
tax
expense
attributable
to
Puerto
Rico
is
considered
domestic
for
Puerto
Rico
tax
purposes.
Income
tax
expense
also 
includes
U.S.
federal
taxes,
as
well
as
USVI
and
state
income
taxes
in
Florida,
which
are
considered
foreign
for
Puerto
Rico
tax 
purposes. 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
Corporations
Puerto
Rico
tax
liability,
subject
to
certain
conditions
and
limitations.
Income
generated
from
BVI
operations
is 
considered foreign-source income and is not subject to taxation in that jurisdiction.
Pre-tax income is summarized below for the indicated periods: 
Year
Ended December 31, 
2025 
2024 
2023 
(In thousands) 
Domestic 
(1)
$ 
364,545
$ 
331,860
$ 
347,605
Foreign 
(2)
52,189
59,347
49,831
Total pre-tax income 
$ 
416,734
$ 
391,207
$ 
397,436
(1) 
Attributable to Puerto Rico operations. 
(2) 
Attributable to U.S., USVI, and BVI operations.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
171 
The components of income tax expense are summarized below for the indicated periods: 
Year
Ended December 31, 
2025 
2024 
2023 
(In thousands) 
Current income tax expense: 
Puerto Rico 
$ 
72,336
$ 
67,662
$ 
78,459
U.S. Federal 
9,385
8,423
7,863
State and other 
2,569
2,267
2,145
Total current income tax
expense 
84,290
78,352
88,467
Deferred income tax (benefit) expense: 
Puerto Rico 
(11,270)
12,695
6,406
U.S. Federal 
(904)
1,120
(235)
State and other 
(248)
316
(66)
Total deferred income
tax (benefit) expense 
(12,422)
14,131
6,105
Total income
tax expense 
$ 
71,868
$ 
92,483
$ 
94,572
The Corporation
maintains an
effective tax
rate lower than
the Puerto
Rico maximum statutory
tax rate of 
37.5
%. The differences 
between the income tax expense applicable to income
before the provision for income taxes and the amount
computed by applying the 
statutory tax rate in Puerto Rico were as follows for the indicated periods: 
Year Ended December
31,
2025 
2024 
2023 
Amount 
% of Pre-tax 
Income 
Amount 
% of Pre-tax 
Income 
Amount 
% of Pre-tax 
Income 
(Dollars in thousands) 
Computed income tax at statutory rate 
$ 
156,275
37.5
% 
$ 
146,702
37.5
% 
$ 
149,038
37.5
% 
Federal and state taxes 
(1)
11,954
2.9
% 
10,690
2.7
% 
10,008
2.4
% 
Nontaxable or nondeductible items: 
Benefit of net exempt income 
(52,989)
(12.7)
% 
(37,736)
(9.6)
% 
(35,153)
(8.8)
% 
Preferential tax treatment on qualified investing and lending activities 
(17,617)
(4.3)
% 
(22,505)
(5.8)
% 
(19,125)
(4.8)
% 
Other 
(3,736)
(0.9)
% 
(4,606)
(1.2)
% 
(9,043)
(2.3)
% 
Changes in deferred tax valuation allowance 
(2)
(17,119)
(4.1)
% 
-
-
% 
-
-
% 
Changes in unrecognized tax benefits 
(456)
(0.1)
% 
(377)
(0.1)
% 
(262)
(0.1)
% 
Other adjustments 
(4,444)
(1.1)
% 
315
0.1
% 
(891)
(0.1)
% 
Total income tax expense
$ 
71,868
17.2
% 
$ 
92,483
23.6
% 
$ 
94,572
23.8
% 
(1) 
Federal taxes made up the majority (greater than 50%) of the tax effect in this category. 
(2) 
Includes valuation allowance releases during 2025 of $
17.1
million, of which $
16.6
million was associated with the aforementioned enactment of Act 65-2025.
Income taxes paid for the indicated periods were as follows: 
Year
Ended December 31, 
2025 
2024 
2023 
(In thousands) 
Puerto Rico 
(1)
$ 
61,760
$ 
84,227
$ 
99,132
U.S. Federal 
8,389
7,044
8,000
State and other 
2,355
1,960
2,380
Total 
$ 
72,504
$ 
93,231
$ 
109,512
(1) 
Payments include the purchase of income tax credits that were
used against tax liabilities.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
172 
Deferred income taxes reflect
the net tax effects
of temporary differences
between the carrying amounts
of assets and liabilities 
for financial
reporting purposes
and their
tax bases. Significant
components of
the Corporation's
deferred tax
assets and
liabilities 
as of December 31, 2025 and 2024 were as follows: 
As of December 31, 
2025 
2024 
(In thousands) 
Deferred tax asset: 
NOL and capital loss carryforwards 
$ 
34,874
$ 
36,721
Allowance for credit losses 
89,716
88,149
Alternative Minimum Tax
credits available for carryforward 
25,363
33,220
Unrealized loss on OREO valuation 
4,807
4,126
Share-based compensation cost 
5,824
4,763
Legal and other reserves 
3,403
3,121
Reserve for insurance premium cancellations 
803
746
Differences between the assigned values and tax bases of assets 
and liabilities recognized in purchase business combinations 
10,507
8,007
Unrealized loss on available-for-sale debt securities, net 
48,729
76,616
Other 
8,044
8,808
Total gross deferred tax assets 
$ 
232,070
$ 
264,277
Deferred tax liabilities: 
Servicing assets 
7,633
8,282
Pension Plan assets 
237
472
Other 
163
87
Total gross deferred tax liabilities 
8,033
8,841
Valuation
allowance
(1)
(75,025)
(119,080)
Net deferred tax asset 
$ 
149,012
$ 
136,356
(1) 
The year
ended December
31, 2025
includes a
$
27.9
million decrease
in valuation
allowance related
to changes
in the
market value
of availableforsale
debt 
securities, which resulted in an equal change in the net deferred tax asset without impacting earnings, and a $
17.1
million reversal in valuation allowance primarily 
associated with the aforementioned enactment of Act 652025.
The
Corporation
assesses
deferred
tax
assets
to
determine
the
amount
that
is
more-likely-than-not
to
be
realized.
Valuation 
allowances are established, when necessary,
to reduce deferred tax assets to such amount. Management
evaluates valuation allowances 
at each reporting
date, considering all
available positive and negative
evidence that can
be objectively verified.
Consideration must be 
given to all sources of taxable income available to
realize the deferred tax asset, including, as applicable, the
future reversal of existing 
temporary
differences, future
taxable income
forecasts exclusive
of the
reversal of
temporary differences
and carryforwards,
and tax 
planning
strategies.
In
estimating
taxes,
management
assesses
the
relative
merits
and
risks
of
the
appropriate
tax
treatment
of 
transactions considering statutory,
judicial, and regulatory guidance. 
Managements
estimate
of
future
taxable
income
is
based
on
internal
projections
that
consider
historical
performance,
multiple 
internal
scenarios
and
assumptions,
as
well
as
external
data
that
management
believes
is
reasonable.
The
Corporation
updates
this 
analysis when
events or circumstances
arise that may
affect the realizability
of deferred tax
assets. If actual
results differ significantly 
from
the
current
estimates
of future
taxable
income,
even if
caused
by
adverse
macroeconomic
conditions,
the
remaining
valuation 
allowance may need to be increased. 
As of
December
31,
2025,
the Corporation
had
a net
deferred
tax
asset of
$
149.0
million,
net
of a
valuation
allowance
of
$
75.0
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 primarily associated with NOL carryforwards
at the holding company level as a result of the enactment
of Act 65-
2025. 
The
net
deferred
tax
asset
of
the
Corporations
banking
subsidiary,
FirstBank,
amounted
to
$
134.8
million
as
of
December
31, 
2025,
net
of
a
valuation
allowance
of
$
72.2
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
for
the
year
ended 
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
173 
December
31,
2025
was
mainly
related
to
the
usage
of
alternative
minimum
tax
credits.
Meanwhile,
the
decrease
in
the
valuation 
allowance
for
the
year
ended
December
31,
2025
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.
As of December
31, 2025, approximately
$
205.3
million of the
deferred tax
assets of the
Corporation are
attributable to temporary 
differences
or
tax
credit
carryforwards
that
have
no
expiration
date,
compared
to
$
233.5
million
in
2024.
The
valuation
allowance 
attributable to FirstBanks
deferred tax assets of
$
72.2
million as of December
31, 2025 is related to
the change in the
market value of 
available-for-sale
debt
securities,
NOLs
attributable
to
the
USVI,
and
capital
loss
carryforwards.
The
remaining
balance
of
$
2.8
million of
the Corporations
deferred tax
asset valuation
allowance non-attributable
to FirstBank
is mainly
related to
NOLs in
one of 
its subsidiaries.
The Corporation
will continue
to provide
a valuation
allowance against
its deferred
tax assets
in each
applicable tax 
jurisdiction
until
the
need
for
a
valuation
allowance
is
eliminated.
The
need
for
a
valuation
allowance
is
eliminated
when
the 
Corporation
determines that
it is
more-likely-than-not
the deferred
tax assets
will be
realized. The
ability to
recognize the
remaining 
deferred tax assets that continue
to be subject to a valuation allowance
will be evaluated on a quarterly basis
to determine if there were 
any significant
events that
would affect
the ability
to utilize
these deferred
tax assets.
As of
December 31,
2025, deferred
tax assets 
related to NOL
and capital loss carryforwards
totaled $
34.9
million, of which
$
16.1
million have no
expiration date and $
13.4
million 
primarily relate to NOLs attributable to Puerto Rico that have expiration
dates ranging from year 2026 through year 2035.
In
2017,
the
Corporation
completed
a
formal
ownership
change
analysis
within
the
meaning
of
Section
382
of
the
U.S.
Internal 
Revenue Code
(Section 382)
covering a
comprehensive period
and concluded
that an
ownership
change had
occurred during
such 
period.
The
Section
382
limitation
has
resulted
in
higher
U.S.
and
USVI
income
tax
liabilities
than
we
would
have
incurred
in
the 
absence of such limitation. The Corporation has
mitigated to an extent the adverse effects associated
with the Section 382 limitation as 
any
such
tax
paid
in
the
U.S.
or
USVI
can
be
creditable
against
Puerto
Rico
tax
liabilities
or
taken
as
a
deduction
against
taxable 
income. However,
our ability
to reduce
our Puerto
Rico tax
liability through
such a
credit or
deduction depends
on our
tax profile
at 
each annual
taxable period,
which is
dependent on
various factors.
For 2025,
2024, and
2023, FirstBank
incurred current
income tax 
expense of approximately $
11.8
million, $
10.6
million, and $
9.9
million, respectively,
related to its U.S. operations. The limitation
did 
not impact the USVI operations in 2025, 2024, and 2023. 
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 managements
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.
The 
completion of an audit by
the taxing authorities or the
expiration of the statute
of limitations for a given
audit period could result in
an 
adjustment to
the Corporations
liability for
income taxes.
For U.S. and
USVI income
tax purposes,
all tax years
subsequent to
2021, 
remain open to examination. For Puerto Rico tax purposes, all tax years
subsequent to 2020 remain open to examination.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
174 
NOTE 18 
OPERATING
LEASES
The
Corporation
accounts
for
its
leases
in
accordance
with
ASC
842
Leases
(ASC
Topic
842).
The
Corporations
operating 
leases are
primarily related
to the
Corporations
branches. Our
leases mainly
have original
terms ranging
from 
two years
to 
26 years
, 
some
of
which
include
options
to
extend
the
leases
for
up
to 
20 years
.
Liabilities
to
make
future
lease
payments
are
recorded
in 
accounts payable
and other
liabilities, while
ROU assets
are recorded
in other
assets in
the Corporations
consolidated statements
of 
financial condition. As of December 31, 2025 and 2024, the Corporation
did not classify any of its leases as a finance lease.
Operating lease cost for the
year ended December 31, 2025
amounted to $
17.7
million (2024 - $
18.1
million; 2023 - $
17.3
million), 
and is recorded in occupancy and equipment in the consolidated statements
of income. 
Supplemental balance sheet information related to leases was as follows as of the
indicated dates:
As of December 31, 
2025 
2024 
(Dollars in thousands) 
ROU asset
$ 
72,192
$ 
63,159
Operating lease liability
$ 
74,369
$ 
65,801
Operating lease weighted-average remaining lease term (in years) 
7.7
7.4
Operating lease weighted-average discount rate 
3.68%
3.11%
Generally,
the
Corporation
cannot
practically
determine
the interest
rate
implicit
in
the lease.
Therefore,
the Corporation
uses
its 
incremental
borrowing
rate
as
the
discount
rate
for
the
lease.
See
Note
1
Nature
of
Business
and
Summary
of
Significant 
Accounting Policies for information on how the Corporation determines
its incremental borrowing rate.
Supplemental cash flow information related to leases was as follows: 
Year Ended
December 31, 
2025 
2024 
2023 
(In thousands) 
Operating cash flow from operating leases 
(1)
$ 
17,728
$ 
17,541
$ 
17,307
ROU assets obtained in exchange for operating lease liabilities
(2) (3)
$ 
24,465
$ 
10,492
$ 
4,960
(1) 
Represents cash paid for amounts included in the measurement of operating
lease liabilities. 
(2) 
Represents non-cash activity and, accordingly,
is not reflected in the consolidated statements of cash flows. 
(3) 
For the years ended December 31, 2024 and 2023 excludes $
0.5
million and $
0.1
million, respectively, of lease
terminations.
Maturities under operating lease liabilities as of December 31, 2025 were
as follows: 
Amount 
(In thousands) 
2026 
$ 
17,612
2027 
12,752
2028 
11,552
2029 
9,961
2030 
8,563
2031 and later years 
25,728
Total lease payments 
86,168
Less: imputed interest 
(11,799)
Total present value
of lease liability 
$ 
74,369
Lease Not Yet Commenced 
As of
December 31,
2025,
the Corporation
has an
additional operating
lease that
was signed
but has
not yet
commenced with
an 
undiscounted contract amount of $
7.7
million and a lease term of 
30 years
.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
175 
NOTE 19 
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
significant unobservable 
inputs, requiring significant judgment due to limited or no market activity. 
There were no
transfers of assets and
liabilities measured at
fair value between
Level 1 and Level
2 measurements during
the years 
ended December 31, 2025 and 2024.
Financial Instruments Recorded at Fair Value
on a Recurring Basis 
Available-for-sale
debt securities and marketable equity securities held at fair value 
The fair
value of
investment securities
was based
on unadjusted
quoted market
prices (as
is the
case with
U.S. Treasury
securities 
and equity securities with
readily determinable fair values),
when available (Level 1),
or market prices for comparable
assets (as is the 
case with
U.S. agencies
MBS and
U.S. agency
debt securities)
that are
based on
observable market
parameters, including
benchmark 
yields,
reported
trades,
quotes
from
brokers
or
dealers,
issuer
spreads,
bids,
offers
and
reference
data,
including
market
research 
operations, when
available (Level
2). Observable
prices in
the market
already consider
the risk
of nonperformance.
If listed
prices or 
quotes are
not available, fair
value is based
upon discounted
cash flow models
that use unobservable
inputs due to
the limited market 
activity of the instrument, as is the case with certain private label MBS held by the
Corporation (Level 3). 
Derivative instruments 
The fair
value of
most of
the Corporations
derivative
instruments is
based on
observable
market parameters
(Level 2)
and takes 
into consideration
the credit risk
component of
paying counterparties,
when appropriate.
On interest
rate caps,
only the
sellers credit 
risk is considered. The Corporation
valued the interest rate swaps and
caps using a discounted cash flow
approach based on the related 
reference rate for each cash flow.
Assets and liabilities measured at fair value on a recurring basis are summarized below as of
the indicated dates: 
As of December 31, 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 
$ 
497,342
$ 
-
$ 
-
$ 
497,342
$ 
59,189
$ 
-
$ 
-
$ 
59,189
Noncallable U.S. agencies debt securities 
-
336,849
-
336,849
-
533,296
-
533,296
Callable U.S. agencies debt securities 
-
566,263
-
566,263
-
1,307,035
-
1,307,035
MBS 
-
3,148,692
3,266
(1) 
3,151,958
-
2,658,967
4,195
(1) 
2,663,162
Puerto Rico government obligation 
-
-
1,620
1,620
-
-
1,620
1,620
Other investments 
-
-
-
-
-
-
1,000
1,000
Equity securities 
5,024
-
-
5,024
4,886
-
-
4,886
Derivative assets
-
345
-
345
-
318
-
318
Liabilities: 
Derivative liabilities
-
200
-
200
-
150
-
150
(1) Related to private label MBS.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
176 
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 years ended
December 31, 2025, 2024, and 2023: 
Available-for-Sale
Debt Securities 
(1)
Level 3 Instruments Only
2025 
2024 
2023 
(In thousands) 
Beginning balance 
$ 
6,815
$ 
6,200
$ 
8,495
Total gains (losses): 
Included in other comprehensive income (loss) (unrealized) 
578
830
(750)
Included in earnings (unrealized) (2)
(254)
50
(20)
Purchases 
-
1,000
-
Principal repayments and amortization
(3)
(2,253)
(1,265)
(1,525)
Ending balance 
$ 
4,886
$ 
6,815
$ 
6,200
(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 years ended December 31, 2025 and 2023, the amounts
include $
1.0
million and $
0.5
million, respectively, related to repayments
of matured debt securities.
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: 
December 31, 2025 
Fair Value 
Valuation Technique 
Unobservable Input 
Range 
Weighted 
Average 
Minimum
Maximum 
(Dollars in thousands) 
Available-for-sale
debt securities: 
Private label MBS 
$ 
3,266
Discounted cash flows 
Discount rate 
15.9%
15.9%
15.9%
Prepayment rate 
1.6%
8.0%
3.1%
Projected cumulative loss rate 
0.1%
11.4%
5.5%
Puerto Rico government obligation 
$ 
1,620
Discounted cash flows 
Discount rate 
10.8%
10.8%
10.8%
Projected cumulative loss rate 
24.0%
24.0%
24.0%
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) 
177 
Additionally, fair value
is used on a non-recurring basis to evaluate certain assets in accordance with GAAP.
For
the
years
ended
December
31,
2025,
2024,
and
2023,
the
Corporation
recorded
losses
or
valuation
adjustments
for
assets 
recognized at fair value on a non-recurring basis and still held at the respective
reporting dates, as shown in the following table: 
Carrying value as of December 31, 
Related to losses recorded for the Year Ended 
December 31, 
2025 
2024 
2023 
2025 
2024 
2023 
(In thousands) 
Level 3: 
Loans receivable
(1)
$ 
9,212
$ 
16,296
$ 
15,609
$ 
(635)
$ 
(373)
$ 
(1,839)
OREO
(2) (3)
735
1,471
3,218
(66)
(100)
(416)
Level 2: 
Loans held for sale 
(4)
$ 
-
$ 
15,276
$ 
-
$ 
-
$ 
(78)
$ 
-
(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. The adjustment applied to
appraisals was 
22
% for the year ended December 31, 2025, 
8
% for the year ended December 31, 2024, and
between 
16
% and 
20
% for the year ended December 31, 
2023. 
(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 to appraisals ranged from 
3
% to 
5
% for the year ended December 31, 2025, 
2
% to 
44
% for the year ended December 31, 2024, and 
1
% to 
28
% for the year ended December 31, 
2023. 
(3) 
Excludes the aforementioned $
2.8
million adjustment in connection with an ongoing litigation involving a commercial OREO property in the Virgin Islands region. See Note 23 Regulatory Matters, Commitments and 
Contingencies for further details. 
(4) 
The Corporation derived the fair value of these loans based on published secondary market prices of MBS with similar characteristics.
Qualitative
information
regarding
the
financial
instruments
measured
at
fair
value
on
a
non-recurring
basis
using
significant 
unobservable inputs (Level 3) as of December 31, 2025 are as follows: 
December 31, 2025 
Method 
Inputs 
Loans 
Income, Market, Comparable 
Sales, Discounted Cash Flows 
External appraised values; probability weighting of broker price 
opinions; management assumptions regarding market trends or other 
relevant factors 
OREO 
Income, Market, Comparable 
Sales, Discounted Cash Flows 
External appraised values; probability weighting of broker price 
opinions; management assumptions regarding market trends or other 
relevant factors
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
178 
The
following
tables
present
the
carrying
value,
estimated
fair
value
and
estimated
fair
value
level
of
the
hierarchy
of
financial 
instruments as of the indicated dates: 
Total Carrying Amount 
in Statement of 
Financial Condition as 
of December 31, 2025 
Fair Value Estimate as
of 
December 31, 2025 
Level 1 
Level 2 
Level 3 
(In thousands) 
Assets: 
Cash and due from banks and money market investments (amortized
cost) 
$ 
658,599
$ 
658,599
$ 
658,599
$ 
-
$ 
-
Available-for-sale debt
securities (fair value) 
4,554,032
4,554,032
497,342
4,051,804
4,886
Held-to-maturity debt securities: 
Held-to-maturity debt securities (amortized cost) 
265,296
Less: ACL on held-to-maturity debt securities 
(733)
Held-to-maturity debt securities, net of ACL 
$ 
264,563
262,055
-
178,815
83,240
Equity securities (amortized cost) 
39,729
39,729
-
39,729
(1) 
-
Other equity securities (fair value) 
5,024
5,024
5,024
-
-
Loans held for sale (lower of cost or market) 
16,697
16,996
-
16,996
-
Loans held for investment: 
Loans held for investment (amortized cost) 
13,125,356
Less: ACL for loans and finance leases 
(249,037)
Loans held for investment, net of ACL 
$ 
12,876,319
12,806,115
-
-
12,806,115
MSRs (amortized cost) 
23,288
40,874
-
-
40,874
Derivative assets (fair value) (2)
345
345
-
345
-
Liabilities: 
Deposits (amortized cost) 
$ 
16,670,143
$ 
16,675,488
$ 
-
$ 
16,675,488
$ 
-
Long-term advances from the FHLB (amortized cost) 
290,000
292,581
-
292,581
-
Derivative liabilities (fair value) (2)
200
200
-
200
-
(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) 
179 
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 Corporations
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
judgments
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) 
180 
NOTE 20 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
Corporations
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
years
ended 
December 31, 2025, 2024 and 2023:
Year Ended December
31, 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)
$ 
70,868
$ 
583,749
$ 
173,775
$ 
(112,561)
$ 
87,335
$ 
65,774
$ 
868,940
Service charges and fees on deposit accounts 
-
29,520
5,903
-
596
3,049
39,068
Insurance commission income 
-
12,493
-
-
174
559
13,226
Card and processing income 
-
41,021
1,090
-
98
5,181
47,390
Other service charges and fees 
64
7,294
290
-
1,510
547
9,705
Not in scope of ASC Topic
606
(1)
14,894
5,130
867
249
1,198
151
22,489
Total non-interest income 
14,958
95,458
8,150
249
3,576
9,487
131,878
Total Revenue (Loss) 
$ 
85,826
$ 
679,207
$ 
181,925
$ 
(112,312)
$ 
90,911
$ 
75,261
$ 
1,000,818
Year Ended December
31, 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)
$ 
72,455
$ 
550,820
$ 
157,672
$ 
(112,151)
$ 
77,988
$ 
60,695
$ 
807,479
Service charges and fees on deposit accounts 
-
30,608
4,538
-
613
3,060
38,819
Insurance commission income 
-
12,781
-
-
178
611
13,570
Card and processing income 
-
40,223
899
-
115
5,521
46,758
Other service charges and fees 
189
7,238
751
-
2,649
611
11,438
Not in scope of ASC Topic
606
(1)
13,318
5,389
808
455
34
133
20,137
Total non-interest income 
13,507
96,239
6,996
455
3,589
9,936
130,722
Total Revenue (Loss) 
$ 
85,962
$ 
647,059
$ 
164,668
$ 
(111,696)
$ 
81,577
$ 
70,631
$ 
938,201
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
181 
Year Ended December
31, 2023 
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) 
$ 
75,774
$ 
484,306
$ 
142,313
$ 
(31,944)
$ 
70,798
$ 
55,863
$ 
797,110
Service charges and fees on deposit accounts 
-
29,946
4,553
-
648
2,895
38,042
Insurance commission income 
-
11,906
-
-
202
655
12,763
Card and processing income 
-
37,853
1,647
-
99
4,310
43,909
Other service charges and fees 
289
8,049
849
-
2,485
893
12,565
Not in scope of ASC Topic
606 (1) 
10,924
4,854
4,004
2,125
3,405
103
25,415
Total non-interest income
11,213
92,608
11,053
2,125
6,839
8,856
132,694
Total Revenue (Loss) 
$ 
86,987
$ 
576,914
$ 
153,366
$ 
(29,819)
$ 
77,637
$ 
64,719
$ 
929,804
(1) 
Most of the Corporations
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
2025,
2024,
and
2023,
most
of
the
Corporations
revenue
within
the
scope
of
ASC
Topic
606
was
related
to
performance 
obligations satisfied at a point in time.
The following is a discussion of the revenues under the scope of ASC Topic
606.
Service Charges and Fees on Deposit Accounts
Service
charges
and fees
on deposit
accounts
relate to
fees generated
from a
variety of
deposit products
and
services rendered
to 
customers. Charges
primarily include,
but are not
limited to, overdraft
fees, insufficient
fund fees,
dormant fees,
and monthly
service 
charges. Such
fees are recognized
concurrently with
the event at
the time of
occurrence or on
a monthly basis,
in the case
of monthly 
service charges.
These depository arrangements are considered
day-to-day contracts that do not extend
beyond the services performed, 
as customers have the right to terminate these contracts with no penalty or,
if any, nonsubstantive penalties. 
Insurance Commissions 
For
insurance
commissions,
which
include
regular
and
contingent
commissions
paid
to
the
Corporations
insurance
agency,
the 
agreements
contain
a
performance
obligation
related
to
the
sale/issuance
of
the
policy
and
ancillary
administrative
post-issuance 
support.
The performance
obligations
are
satisfied
when
the policies
are
issued, and
revenue
is recognized
at
that point
in
time.
In 
addition,
contingent
commission
income
may
be
considered
to
be
constrained,
as
defined
under
ASC
Topic
606.
Contingent 
commission income is included
in the transaction price
only to the extent that
it is probable that a
significant reversal in the
amount of 
cumulative revenue
recognized will
not occur
or payments
are received,
thus, is
recorded in
subsequent periods.
For the
years ended 
December
31,
2025,
2024,
and
2023,
the
Corporation
recognized
contingent
commission
income
at
the
time
that
payments
were 
confirmed and constraints
were released of
$
3.6
million, $
3.5
million, and $
2.5
million, respectively,
which was related to
the volume 
of insurance policies sold in the prior year.
Card and processing
income 
Card and processing income includes merchant-related income, and
credit and debit card fees.
For
merchant-related
income,
the
determination
of
income
recognition
included
the
consideration
of
a
2015
sale
of
merchant 
contracts
that
involved
sales
of
point
of
sale
(POS)
terminals
and
a
marketing
alliance
under
a
revenue-sharing
agreement.
The 
Corporation
concluded
that
control
of
the
POS
terminals
and
merchant
contracts
was
transferred
to
the
customer
at
the
contracts 
inception.
With
respect
to
the
related
revenue-sharing
agreement,
the
Corporation
satisfies
the
marketing
alliance
performance 
obligation over
the life of
the contract,
and recognizes the
associated transaction price
as the entity
performs and any
constraints over 
the variable consideration are resolved. 
Credit
and
debit
card
fees
primarily
represent
revenues
earned
from
interchange
fees
and
ATM
fees.
Interchange
and
network 
revenues are earned on credit and
debit card transactions conducted with
payment networks. ATM
fees are primarily earned as a
result 
of surcharges
assessed to
non-FirstBank customers
who use
a FirstBank
ATM.
Such fees
are generally
recognized concurrently
with 
the delivery of services on a daily basis. 
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
182 
The
Corporation
offers
products,
primarily
credit
cards,
that
offer
various
rewards
to
reward
program
members,
such
as
airline 
tickets, cash, or
merchandise, based
on account
activity.
The Corporation
generally recognizes the
cost of rewards
as part of
business 
promotion
expenses when
the rewards
are earned
by the
customer and,
at that
time, records
the corresponding
reward liability.
The 
Corporation
determines
the
reward
liability
based
on
points
earned
to
date
that
the
Corporation
expects
to
be
redeemed
and
the 
average
cost
per
point
redemption.
The
reward
liability
is
reduced
as
points
are
redeemed.
In
estimating
the
reward
liability,
the 
Corporation considers historical
reward redemption behavior,
the terms of the
current reward program,
and the card purchase
activity.
The reward liability
is sensitive to
changes in the
reward redemption
type and redemption
rate, which is
based on the
expectation that 
the
vast
majority
of
all points
earned
will eventually
be
redeemed.
The reward
liability,
which
is included
in other
liabilities
in
the 
consolidated statements of financial condition, totaled $
9.0
million and $
9.4
million as of December 31, 2025 and 2024, respectively. 
Other Fees 
Other fees primarily
include revenues generated
from wire transfers,
lockboxes, bank
issuances of checks
and trust fees
recognized 
from
transfer
paying
agent,
retirement
plan,
and
other
trustee
activities.
Revenues
are
recognized
on
a
recurring
basis
when
the 
services are rendered and are included as part of other non-interest income
in the consolidated statements of income.
Contract Balances 
As
of
December
31,
2025
and
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) 
183 
NOTE 21 SEGMENT INFORMATION 
The Corporations
operating segments
are based
primarily on
the Corporations
lines of
business for
its operations
in Puerto
Rico, 
the Corporations
principal market,
and by
geographic areas
for its
operations outside
of Puerto
Rico. As
of December
31, 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
Corporations
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
Corporations
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
Corporations
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 Corporations
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 Corporations
investment portfolio
and treasury functions
that are executed
to manage and 
enhance
liquidity.
Under
the
Corporations
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
Corporations
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. 
The
accounting
policies
of
the
segments
are
consistent
with
those
referred
to
in
Note
1
Nature
of
Business
and
Summary
of 
Significant Accounting Policies.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
184 
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) 
Year Ended December
31, 2025 
Interest income 
$ 
130,123
$ 
422,089
$ 
249,880
$ 
131,957
$ 
157,612
$ 
31,495
$ 
1,123,156
Net (charge) credit for transfer of funds 
(59,255)
315,367
(60,991)
(230,385)
(6,649)
41,913
-
Interest expense 
-
(153,707)
(15,114)
(14,133)
(63,628)
(7,634)
(254,216)
Net interest income (loss) 
70,868
583,749
173,775
(112,561)
87,335
65,774
868,940
Provision for credit losses - (benefit) expense 
(859)
74,949
4,045
254
5,697
1,875
85,961
Non-interest income 
14,958
95,458
8,150
249
3,576
9,487
131,878
Non-interest expenses: 
Employees compensation and benefits 
27,500
146,605
20,130
4,286
28,604
18,027
245,152
Occupancy and equipment 
5,848
59,855
5,924
704
7,596
8,982
88,909
Business promotion 
1,122
11,475
1,114
717
1,355
818
16,601
Professional fees 
6,355
27,334
3,996
1,363
4,318
4,743
48,109
Taxes, other than income taxes 
1,907
17,970
2,508
460
434
675
23,954
FDIC deposit insurance 
1,422
2,629
2,313
-
823
481
7,668
Net (gain) loss on OREO operations 
(4,414)
-
(515)
-
-
3,404
(1,525)
Credit and debit processing expenses 
-
24,633
905
-
11
2,925
28,474
Other non-interest expenses 
(1)
3,457
24,720
3,660
1,827
2,864
4,253
40,781
Total non-interest expenses 
43,197
315,221
40,035
9,357
46,005
44,308
498,123
Segment income (loss) 
$ 
43,488
$ 
289,037
$ 
137,845
$ 
(121,923)
$ 
39,209
$ 
29,078
$ 
416,734
Average interest-earning assets 
$ 
2,173,137
$ 
4,026,757
$ 
3,624,058
$ 
5,503,318
$ 
2,496,932
$ 
453,372
$ 
18,277,574
Mortgage 
Banking 
Consumer 
(Retail) Banking 
Commercial and 
Corporate 
Banking 
Treasury and 
Investments 
United States 
Operations 
Virgin Islands 
Operations 
Total 
(In thousands) 
Year Ended December
31, 2024 
Interest income 
$ 
127,189
$ 
423,738
$ 
251,899
$ 
116,734
$ 
146,637
$ 
28,956
$ 
1,095,153
Net (charge) credit for transfer of funds 
(54,734)
284,065
(78,291)
(184,627)
(7,215)
40,802
-
Interest expense 
-
(156,983)
(15,936)
(44,258)
(61,434)
(9,063)
(287,674)
Net interest income (loss) 
72,455
550,820
157,672
(112,151)
77,988
60,695
807,479
Provision for credit losses - (benefit) expense 
(15,526)
95,315
(12,928)
(50)
(6,661)
(229)
59,921
Non-interest income 
13,507
96,239
6,996
455
3,589
9,936
130,722
Non-interest expenses: 
Employees compensation and benefits 
27,144
139,176
19,538
3,648
28,203
17,986
235,695
Occupancy and equipment 
5,858
59,478
5,725
739
7,607
9,020
88,427
Business promotion 
1,264
12,331
1,166
727
1,280
877
17,645
Professional fees 
7,638
27,618
4,022
1,313
4,383
4,481
49,455
Taxes, other than income taxes 
1,808
16,702
2,107
407
503
669
22,196
FDIC deposit insurance 
1,832
3,415
2,926
-
962
683
9,818
Net (gain) loss on OREO operations 
(5,553)
-
(2,534)
-
(4)
617
(7,474)
Credit and debit processing expenses 
-
23,620
764
-
10
3,206
27,600
Other non-interest expenses 
(1)
2,994
26,159
5,956
2,363
2,640
3,599
43,711
Total non-interest expenses 
42,985
308,499
39,670
9,197
45,584
41,138
487,073
Segment income (loss) 
$ 
58,503
$ 
243,245
$ 
137,926
$ 
(120,843)
$ 
42,654
$ 
29,722
$ 
391,207
Average interest-earning assets 
$ 
2,134,551
$ 
4,042,201
$ 
3,518,554
$ 
5,850,884
$ 
2,176,701
$ 
403,365
$ 
18,126,256
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
185 
Mortgage 
Banking 
Consumer 
(Retail) Banking 
Commercial and 
Corporate 
Banking 
Treasury and 
Investments 
United States 
Operations 
Virgin Islands 
Operations 
Total 
(In thousands) 
Year ended December
31, 2023: 
Interest income 
$ 
127,154
$ 
390,619
$ 
229,217
$ 
116,382
$ 
132,490
$ 
27,624
$ 
1,023,486
Net (charge) credit for transfer of funds 
(51,380)
214,392
(71,813)
(111,433)
(12,830)
33,064
-
Interest expense 
-
(120,705)
(15,091)
(36,893)
(48,862)
(4,825)
(226,376)
Net interest income (loss) 
75,774
484,306
142,313
(31,944)
70,798
55,863
797,110
Provision for credit losses - (benefit) expense 
(7,908)
66,072
(5,997)
20
8,687
66
60,940
Non-interest income 
11,213
92,608
11,053
2,125
6,839
8,856
132,694
Non-interest expenses: 
Employees' compensation and benefits 
25,463
133,422
17,426
3,354
25,960
17,230
222,855
Occupancy and equipment 
6,015
58,000
4,987
717
6,959
9,233
85,911
Business promotion 
1,446
13,787
1,218
881
1,221
1,073
19,626
Professional fees 
7,054
25,251
3,501
654
4,300
5,081
45,841
Taxes, other than income taxes 
1,382
16,891
1,272
425
552
714
21,236
FDIC deposit insurance 
2,879
5,043
4,311
-
1,524
1,116
14,873
Net (gain) loss on OREO operations 
(7,305)
-
38
-
(150)
279
(7,138)
Credit and debit processing expenses 
-
22,258
1,457
-
10
2,272
25,997
Other non-interest expenses 
(1)
2,968
25,878
5,332
2,562
2,393
3,094
42,227
Total non-interest expenses 
39,902
300,530
39,542
8,593
42,769
40,092
471,428
Segment income (loss) 
$ 
54,993
$ 
210,312
$ 
119,821
$ 
(38,432)
$ 
26,181
$ 
24,561
$ 
397,436
Average interest-earning assets 
$ 
2,149,445
$ 
3,770,393
$ 
3,299,209
$ 
6,186,018
$ 
2,072,292
$ 
389,489
$ 
17,866,846
(1) 
Consists of communication expenses and the expense categories included
in Note 16 - Other Non-Interest Expenses.
The following table presents a reconciliation of the reportable segment financial information to the consolidated totals for the indicated periods: 
Year Ended
December 31, 
2025 
2024 
2023 
(In thousands) 
Average assets: 
Total average interest-earning assets for segments
$ 
18,277,574
$ 
18,126,256
$ 
17,866,846
Average non-interest-earning assets 
(1)
786,847
835,100
839,577
Total consolidated average assets 
$ 
19,064,421
$ 
18,961,356
$ 
18,706,423
(1) 
Includes, among other things, non-interest-earning cash, premises
and equipment, net deferred tax asset, ROU assets, and accrued interest receivable
on loans and investments.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
186 
The following table presents revenues (interest income plus non-interest income) and selected balance sheet data by geography based on the 
location in which the transaction was originated as of the indicated dates: 
2025 
2024 
2023 
(In thousands) 
Revenues: 
Puerto Rico 
$ 
1,052,864
$ 
1,036,757
$ 
980,371
United States 
161,188
150,226
139,329
Virgin Islands 
40,982
38,892
36,480
Total consolidated revenues 
$ 
1,255,034
$ 
1,225,875
$ 
1,156,180
Selected Balance Sheet Information: 
Total assets: 
Puerto Rico 
$ 
15,973,839
$ 
16,427,587
$ 
16,308,000
United States 
2,646,328
2,403,379
2,141,427
Virgin Islands 
512,725
461,955
460,122
Loans: 
Puerto Rico 
$ 
10,167,738
$ 
10,036,686
$ 
9,745,872
United States 
2,498,164
2,295,234
2,022,261
Virgin Islands 
476,151
429,912
424,718
Deposits: 
Puerto Rico 
(1)
$ 
13,363,503
$ 
13,562,227
$ 
13,429,303
United States 
(2)
1,891,231
1,864,772
1,631,402
Virgin Islands 
1,415,409
1,444,299
1,495,280
(1) 
For 2025, 2024, and 2023, includes $
33.0
million, $
33.0
million, and $
420.2
million, respectively, of brokered CDs
allocated to Puerto Rico operations. 
(2) 
For 2025, 2024, and 2023, includes $
560.5
million, $
445.1
million, and $
363.1
million, respectively, of brokered
CDs allocated to United States operations.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
187 
NOTE 22 SUPPLEMENTAL
STATEMENTS
OF CASH FLOWS INFORMATION
Supplemental statements of cash flows information is as follows for the
indicated periods:
Year Ended
December 31, 
2025 
2024 
2023 
(In thousands) 
Cash paid for: 
Interest
$ 
250,809
$ 
281,733
$ 
207,829
Income tax
72,504
93,231
109,512
Operating cash flow from operating leases 
17,728
17,541
17,307
Non-cash investing and financing activities: 
Additions to OREO 
3,855
9,278
22,649
Additions to auto and other repossessed assets 
62,009
61,766
66,796
Capitalization of servicing assets 
2,635
2,342
2,240
Loan securitizations 
161,010
125,672
122,732
Loans held for investment transferred to held for sale 
-
118
3,451
Loans held for sale transferred to held for investment 
171
1,049
3,424
ROU assets obtained in exchange for operating lease liabilities, net of lease 
terminations 
24,465
9,959
4,861
Redemption of investments in FBP Statutory Trusts 
1,850
3,000
662
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
188 
NOTE 23 REGULATORY
MATTERS, COMMITMENTS
AND CONTINGENCIES 
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
Corporations
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 Corporations
and
FirstBanks
assets,
liabilities,
and
certain
off-balance 
sheet items
as calculated
under regulatory
accounting practices.
The Corporations
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 December
31, 2025 and
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
December 31, 2025,
management does not
believe that 
any condition has changed or event has occurred that would have changed
the institutions 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
December 31, 2025 and 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 December 31, 2025 
Total Capital (to Risk-Weighted
Assets) 
First BanCorp. 
$ 
2,412,137
18.01
% 
$ 
1,071,257
8.0
% 
N/A 
N/A 
FirstBank 
$ 
2,355,882
17.61
% 
$ 
1,070,432
8.0
% 
$ 
1,338,040
10.0
% 
CET1 Capital (to Risk-Weighted Assets) 
First BanCorp. 
$ 
2,243,981
16.76
% 
$ 
602,582
4.5
% 
N/A 
N/A 
FirstBank 
$ 
2,087,853
15.60
% 
$ 
602,118
4.5
% 
$ 
869,726
6.5
% 
Tier I Capital (to Risk-Weighted
Assets) 
First BanCorp. 
$ 
2,243,981
16.76
% 
$ 
803,443
6.0
% 
N/A 
N/A 
FirstBank 
$ 
2,187,853
16.35
% 
$ 
802,824
6.0
% 
$ 
1,070,432
8.0
% 
Leverage ratio 
First BanCorp. 
$ 
2,243,981
11.58
% 
$ 
774,882
4.0
% 
N/A 
N/A 
FirstBank 
$ 
2,187,853
11.30
% 
$ 
774,609
4.0
% 
$ 
968,261
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) 
189 
Cash Restrictions 
Cash and
cash
equivalents
include
amounts
segregated
for
regulatory
purposes.
The
Corporations
bank
subsidiary,
FirstBank,
is 
required
by
the
Puerto
Rico
Banking
Law
to
maintain
minimum
average
weekly
reserve
balances
to
cover
demand
deposits.
The 
minimum
average
weekly
reserve
balances
were
$
1.0
billion
for
the
periods
that
ended
December 31,
2025
and
2024.
As
of 
December 31,
2025
and
2024,
the
Bank
complied
with
the
requirement.
Cash
and
due
from
banks
as
well
as
other
highly
liquid 
securities are used to cover the required average reserve balances. 
As of December
31, 2025, and
as required by
the Puerto Rico
International Banking
Law,
the Corporation maintained
$
0.8
million 
in time deposits, related to FirstBank Overseas Corporation, an international
banking entity that is a subsidiary of FirstBank.
Commitments
The
Corporations
exposure
to
credit
loss
in
the
event
of
nonperformance
by
the
other
party
to
the
financial
instrument
on 
commitments to extend credit
and standby letters of credit
is represented by the contractual amount
of those instruments. Management 
uses the same
credit policies
and approval process
in entering into
commitments and
conditional obligations
as it does
for on-balance 
sheet instruments.
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.
In
general,
commercial
and
standby
letters
of
credit
are
issued
to
facilitate
foreign
and
domestic
trade
transactions.
Normally, 
commercial and standby
letters of credit
are short-term commitments
used to finance
commercial contracts for
the shipment of goods. 
The
collateral
for
these
letters
of
credit
includes
cash
or
available
commercial
lines
of
credit.
The
fair
value
of
commercial
and 
standby letters
of credit
is based
on the
fees currently
charged for
such agreements,
which, as
of December
31, 2025
and 2024,
were 
not significant.
The following table summarizes commitments to extend credit and standby letters of
credit as of the indicated dates: 
December 31, 
2025 
2024 
(In thousands) 
Financial instruments whose contract amounts represent credit risk: 
Commitments to extend credit: 
Construction undisbursed funds 
$ 
191,879
$ 
283,302
Unused credit card lines
760,531
787,849
Unused personal lines of credit
34,932
37,140
Commercial lines of credit
1,146,541
1,053,938
Letters of credit: 
Commercial letters of credit 
32,252
41,738
Standby letters of credit 
21,430
24,635
Contingencies 
As of
December 31,
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. 
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
190 
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
Corporations
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
Corporations
legal
proceedings,
claims
and
other
loss 
contingencies,
to
the
extent
not
previously
provided
for,
will
not
have
a
material
adverse
effect
on
the
Corporations
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 borrowers
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
borrowers
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
defendants
previous
claims
for
rent
and
possession 
related to
that parcel.
Although the
Courts ruled
in favor
of FirstBanks
declaratory judgment,
the Courts
affirmed defendants
claim 
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 
possession of the parcels continues with FirstBank. 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 managements
current estimates. 
On
December
16,
2025,
the
FDIC
issued
an
interim
final
rule
amending
the
collection
terms
of
the
special
assessment,
which 
included
reducing
the
collection
rate
in
the
eighth
collection
quarter
from
3.36
basis
points
to
2.97
basis
points,
removing
the 
previously established extended
assessment period provisions
and providing offsets
to regular quarterly
deposit insurance assessments 
if aggregate
collections exceed actual
losses. In connection
with this notice,
the Corporation recorded
a benefit of
$
1.1
million during 
the quarter
ended December
31,
2025
in the
consolidated statements
of income
as part
of FDIC
deposit
insurance
expenses.
This 
update follows the
FDICs 2023
final rule, which
initially imposed the
special assessment to
recover certain estimated
losses incurred 
by
the
Deposit
Insurance
Fund
(DIF)
resulting
from
the
closures
of
Silicon
Valley
Bank
and
Signature
Bank
with
quarterly 
collections, from certain
insured depository institutions,
including the Bank,
that began during
the quarter ended
June 30, 2024.
As of 
December 31,
2025, the
Corporations
total estimated
FDIC special
assessment amounted
to $
6.3
million, of
which $
5.5
million has 
been paid.
The Corporation
continues to
monitor the
FDICs
estimated loss
to the
DIF,
which could
affect the
amount of
its accrued 
liability.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
191 
NOTE 24 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 December
31, 2025 and
2024, and the
results of its operations
and cash flows
for the years
ended December 31,
2025, 2024 and 
2023: 
Statements of Financial Condition 
As of December 31, 
As of December 31, 
2025 
2024 
(In thousands) 
Assets 
Cash and due from banks (includes $
37,654
due from FirstBank as of December 31, 2025 
and $
12,555
as of December 31, 2024) 
$ 
38,401
$ 
13,295
Equity securities 
1,950
1,275
Investment in FirstBank, at equity 
1,898,022
1,694,000
Investment in FirstBank Insurance Agency, at equity 
18,630
24,121
Investment in FBP Statutory Trust I 
(1)
-
1,289
Investment in FBP Statutory Trust II 
(1)
-
561
Dividends receivable 
560
619
Deferred tax asset 
(2)
13,246
-
Other assets 
917
459
Total assets 
$ 
1,971,726
$ 
1,735,619
Liabilities and Stockholders Equity 
Liabilities: 
Long-term borrowings 
(1)
$ 
-
$ 
61,700
Accounts payable and other liabilities 
4,861
4,683
Total liabilities 
4,861
66,383
Stockholders equity 
1,966,865
1,669,236
Total liabilities and stockholders equity 
$ 
1,971,726
$ 
1,735,619
(1) 
During 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
Corporations 
interest in the Trusts of approximately $
1.9
million). 
(2) 
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) 
192 
Statements of Income
Year
Ended December 31, 
2025 
2024 
2023 
(In thousands) 
Income
Interest income on interest-bearing cash balances due from FirstBank 
$ 
1,452
$ 
292
$ 
228
Dividend income from banking subsidiaries 
341,493
320,366
319,683
Dividend income from non-banking subsidiaries 
15,000
-
12,000
Gain on early extinguishment of debt 
-
-
1,605
Other income 
35
360
406
Total income 
357,980
321,018
333,922
Expense 
Interest expense on long-term borrowings 
1,156
11,986
13,535
Other non-interest expenses 
1,781
1,704
1,817
Total expense 
2,937
13,690
15,352
Income before income taxes and equity
in undistributed earnings of subsidiaries 
355,043
307,328
318,570
Income tax (benefit) expense 
(1)
(13,246) 
1 
1 
Equity in undistributed earnings of subsidiaries 
(distribution in excess of earnings) 
(23,423)
(8,603)
(15,705)
Net income 
$ 
344,866
$ 
298,724
$ 
302,864
Other comprehensive income, net of tax 
212,006
72,614
165,608
Comprehensive income 
$ 
556,872
$ 
371,338
$ 
468,472
(1) 
During 2025, includes a one-time reversal of approximately $
15.8
million in valuation allowance related to deferred tax assets
associated with NOL carryforwards.
FIRST BANCORP.
NOTES TO CONSOLIDATED
FINANCIAL
STATEMENTS (Continued) 
193 
Statements of Cash Flows 
Year Ended December 31, 
2025 
2024 
2023 
(In thousands) 
Cash flows from operating activities: 
Net income 
$ 
344,866
$ 
298,724
$ 
302,864
Adjustments to reconcile net income to net cash provided by operating activities: 
Deferred income tax benefit 
(13,246)
-
-
Stock-based compensation
148
143
145
Equity in distributions in excess of earnings of subsidiaries 
23,423
8,603
15,705
Gain on early extinguishment of debt 
-
-
(1,605)
Net increase in other assets 
(438)
(2)
(146)
Net increase (decrease) in other liabilities 
70
(201)
(1,998)
Net cash provided by operating activities 
354,823
307,267
314,965
Cash flows from investing activities: 
Purchase of equity securities 
(675)
(450)
(90)
Net cash used in investing activities 
(675)
(450)
(90)
Cash flows from financing activities: 
Repurchase of common stock 
(153,672)
(102,393)
(203,241)
Repayment of long-term borrowings 
(59,850)
(97,000)
(19,795)
Dividends paid on common stock 
(115,520)
(105,581)
(99,666)
Net cash used in financing activities 
(329,042)
(304,974)
(322,702)
Net increase (decrease) in cash and cash equivalents 
25,106
1,843
(7,827)
Cash and cash equivalents at beginning of year 
13,295
11,452
19,279
Cash and cash equivalents at end of year 
$ 
38,401
$ 
13,295
$ 
11,452
Cash and cash equivalents include: 
Cash and due from banks 
$ 
38,401
$ 
13,295
$ 
11,452
Money market instruments 
-
-
-
$ 
38,401
$ 
13,295
$ 
11,452
194 
Item 9. Changes in and Disagreements with Accountants on Accounting
and
Financial Disclosures
None.
Item 9A. 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 Rule
13a-15(e) and
15d-15(e) under
the Exchange
Act) as
of the 
end of the period covered
by this Form 10-K. Based
on this evaluation as of
the period covered by this
Form 10-K, our CEO and
CFO 
concluded
that
the
Corporations
disclosure
controls
and
procedures
were
effective
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 Corporations
management,
including the
CEO and
CFO, as
appropriate
to allow
timely decisions
regarding required 
disclosure.
Managements Report on Internal Control
over Financial Reporting
Managements
Report
on
Internal
Control
over
Financial
Reporting
is
included
in
Part
II,
Item
8
of
this
Form
10-K
and 
incorporated herein by reference.
The effectiveness of the Corporations
internal control over financial reporting as of December
31, 2025 has been audited by Crowe 
LLP,
an independent
registered public
accounting firm,
as stated
in their
report included
in Part
II, Item
8 of
this Annual
Report on 
Form 10-K. 
Changes in Internal Control over Financial Reporting
There have
been no
changes to
the Corporations
internal control
over financial
reporting (as
defined in
Rules 13a-15(f)
and 15d-
15(f)
under
the
Exchange
Act)
during
our
most
recent
quarter
ended
December
31,
2025
that
have
materially
affected,
or
are 
reasonably likely to materially affect, the Corporations
internal control over financial reporting. 
Item 9B. Other Information 
Rule 10b5-1 Trading Arrangements 
During
the
quarter
ended
December
31,
2025,
none
of
the
Companys
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. 
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable. 
195 
PART
III 
Item 10. Directors, Executive Officers and Corporate Governance 
Except
as
stated
below,
information
in
response
to
this
item
is
incorporated
herein
by
reference
from
the
sections
entitled 
Information
With
Respect
to
Nominees
Standing
for
Election
as
Directors
and
With
Respect
to
Executive
Officers
of
the 
Corporation,
Corporate
Governance
and
Related
Matters,
Delinquent
Section
16(a)
Reports
and
Audit
Committee
Report 
contained
in
First
BanCorp.s
definitive
Proxy
Statement
for
use
in
connection
with
its 202
6
Annual
Meeting
of
Stockholders
(the 
2026
Proxy Statement) to be filed with the SEC within 120 days of December 31, 2025. 
The Company
has adopted
insider trading
policies and
procedures regarding
securities transactions
(the Insider
Trading
Policy) 
that
apply
to
all
officers,
directors,
employees,
consultants
and
contractors
of
the
Company
and
its
subsidiaries,
as
well
as
the 
Company
itself.
The
Company
believes
that
the
Insider
Trading
Policy
is
reasonably
designed
to
promote
compliance
with
insider 
trading laws,
rules and regulations
with respect to
the purchase,
sale and/or
other dispositions
of the Companys
securities, as well
as 
the
applicable
rules
and
regulations
of
the
New
York
Stock
Exchange.
A
copy
of
the
Insider
Trading
Policy
is
incorporated
by 
reference from Exhibit 19.1 of the Annual Report on Form 10-K
for the year ended December 31, 2024, filed on February 28, 2025. 
Item 11. Executive Compensation. 
Information
in
response
to
this
item
is
incorporated
herein
by
reference
from
the
sections
entitled
Compensation
Committee 
Interlocks
and
Insider
Participation,
Compensation
of
Directors,
Non-Management
Chairman
and
Specialized
Expertise, 
Executive Compensation Disclosure 
Compensation Discussion and Analysis,
Executive Compensation Tables
and Compensation 
Information Compensation Committee Report in the 2026 Proxy
Statement. 
Item 12.
Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters 
Securities authorized for issuance under equity compensation plans 
The following table sets forth information about First BanCorp. common stock
authorized for issuance under First BanCorp.s 
existing equity compensation plan as of December 31, 2025: 
Plan category 
(a) 
Number of Securities to 
be Issued Upon Exercise 
of Outstanding Options, 
Warrants and Rights 
(b) 
Weighted Average Exercise 
Price of Outstanding 
Options, Warrants and 
Rights 
(c) 
Number of Securities 
Remaining Available for 
Future Issuance Under 
Equity Compensation 
Plans (Excluding 
Securities Reflected in 
Column (a))
Equity compensation plans, approved by stockholders
544,107 
(1) 
$ 
- 
1,973,213 
(2) 
Equity compensation plans not approved by stockholders 
N/A 
N/A 
N/A 
Total 
544,107 
$ 
- 
1,973,213 
(1) 
Amount represents unvested performance
-based units granted to
executives, with each unit
representing one share of
the Corporation's common stock.
Performance shares will
vest on the 
achievement of a
pre-established performance
target goal at
the end of
a three-year performance
period. See Note
11 - Stock-Based
Compensation to the
audited consolidated financial 
statements included in Part II, Item 8 of this Form 10-K for more
information on performance units. 
(2) 
Securities available
for future
issuance under
the First
BanCorp. Omnibus
Incentive Plan,
as amended
(the Omnibus
Plan), which
is effective
until May
24, 2026.
The Omnibus
Plan 
provides for equity-based compensation incentives
through the grant of stock options,
stock appreciation rights, restricted stock,
restricted stock units, performance shares,
and other stock-
based awards.
As amended,
the Omnibus
Plan provides
for the
issuance of
up to
14,169,807 shares
of common
stock, subject
to adjustments
for stock
splits, reorganization
and other 
similar events. 
Additional
information
in
response
to
this
item
is
incorporated
by
reference
from
the
section
entitled
Security
Ownership
of 
Certain Beneficial Owners and Management in the 2026
Proxy Statement. 
Item 13. Certain Relationships and Related Transactions,
and Director Independence 
Information in response to this item is incorporated herein by reference
from the sections entitled Certain Relationships and Related 
Person Transactions and Corporate
Governance and Related Matters in the 2026 Proxy Statement. 
196 
Item 14. Principal Accountant Fees and Services. 
Audit Fees 
Information
in
response
to
this
item
is
incorporated
herein
by
reference
from
the
section
entitled
Audit
Fees
and
Audit 
Committee Report in the 2026 Proxy Statement. 
PART
IV
Item 15. Exhibits and Financial Statement Schedules
(a) List of documents filed as part of this report.
(1) 
Financial Statements.
The
following
consolidated
financial
statements
of
First
BanCorp.,
together
with
the
reports
thereon
of
First
BanCorp.s 
independent
registered public
accounting
firm, Crowe
LLP (PCAOB
ID No.
173),
dated February
27, 202
6, are
included
in Part
II, 
Item 8 of this Form 10-K:
Report of Crowe LLP,
Independent Registered Public Accounting Firm.
Attestation Report of Crowe LLP,
Independent Registered Public Accounting Firm on Internal Control
over Financial 
Reporting. 
Consolidated Statements of Financial Condition as of December
31, 2025 and 2024. 
Consolidated Statements of Income for Each of the Three Years
in the Period Ended December 31, 2025. 
Consolidated Statements of Comprehensive Income for
Each of the Three Years
in the Period Ended December 31, 2025. 
Consolidated Statements of Cash Flows for Each of the Three Years
in the Period Ended December 31, 2025. 
Consolidated Statements of Changes in Stockholders Equity for
Each of the Three Years
in the Period Ended December 31, 
2025. 
Notes to the Consolidated Financial Statements.
(2) 
Financial statement schedules.
All financial schedules have been omitted because they are not applicable or
the required information is shown in the financial 
statements or notes thereto.
(b) Exhibits listed in the Exhibit Index below are filed herewith as part of this Annual Report
on Form 10-K and are incorporated 
herein by reference. 
Item 16. Form 10-K Summary 
Not applicable.
197 
EXHIBIT INDEX
Exhibit No. 
Description 
3.1 
[Restated Articles of Incorporation, incorporated by reference from Exhibit 3.1 of the Registration Statement on Form S-1/A, filed on October](http://www.sec.gov/Archives/edgar/data/1057706/000095012311090906/g27866a1exv3w1.htm)
[20, 2011.](http://www.sec.gov/Archives/edgar/data/1057706/000095012311090906/g27866a1exv3w1.htm)
3.2 
[Amended and Restated By-Laws, incorporated by reference from Exhibit 3.2 of the Form 8-K, filed on March 31, 2020.](http://www.sec.gov/Archives/edgar/data/1057706/000114036120007478/ex3_2.htm)
4.1 
[Description of First BanCorp. capital stock, incorporated by reference from Exhibit 4.1 of the Form 10-K for the year ended December 31,](http://www.sec.gov/Archives/edgar/data/1057706/000105770625000002/exhibit41.htm)
[2024, filed on February 28, 2025.](http://www.sec.gov/Archives/edgar/data/1057706/000105770625000002/exhibit41.htm)
10.1* 
[First BanCorp Omnibus Incentive Plan, as amended, incorporated by reference from Exhibit 99.1 of the Form S-8, filed on June 21, 2016.](http://www.sec.gov/Archives/edgar/data/1057706/000119312516627890/d351899dex991.htm)
10.2* 
[Form of Restricted Stock Award Agreement, incorporated by reference from Exhibit 10.2 of the Form 10-K for the year ended December 31,](http://www.sec.gov/Archives/edgar/data/1057706/000105770623000002/exhibit102.htm)
[2023, filed on February 28, 2024.](http://www.sec.gov/Archives/edgar/data/1057706/000105770623000002/exhibit102.htm)
10.3* 
[Form of First BanCorp Short-Term Incentive Program, as amended on March 16, 2023, incorporated by reference from Exhibit 10.1 of the](http://www.sec.gov/Archives/edgar/data/1057706/000105770624000007/exhibit101.htm)
[Form 10-Q for the quarter ended March 31, 2024, filed on May 9, 2024.](http://www.sec.gov/Archives/edgar/data/1057706/000105770624000007/exhibit101.htm)
10.4* 
[Form of First BanCorp Long-Term Incentive Award Agreement, incorporated by reference from Exhibit 10.1 of the Form 10-Q for the](http://www.sec.gov/Archives/edgar/data/1057706/000105770623000004/exhibit101.htm)
[quarter ended March 31, 2023, filed on May 10, 2023.](http://www.sec.gov/Archives/edgar/data/1057706/000105770623000004/exhibit101.htm)
10.5* 
[Employment Agreement between First BanCorp and Aurelio Alemn, incorporated by reference from Exhibit 10.6 of the Form 10-K for the](http://www.sec.gov/Archives/edgar/data/1057706/0001057706-99-000003.txt)
[year ended December 31, 1998, filed on March 26, 1999.](http://www.sec.gov/Archives/edgar/data/1057706/0001057706-99-000003.txt)
10.6* 
[Amendment No. 1 to Employment Agreement between First BanCorp and Aurelio Alemn, incorporated by reference from Exhibit 10.2 of](http://www.sec.gov/Archives/edgar/data/1057706/000095014409004193/g19054exv10w2.htm)
[the Form 10-Q for the quarter ended March 31, 2009, filed on May 11, 2009.](http://www.sec.gov/Archives/edgar/data/1057706/000095014409004193/g19054exv10w2.htm)
10.7* 
[Amendment No. 2 to Employment Agreement between First BanCorp and Aurelio Alemn, incorporated by reference from Exhibit 10.6 of](http://www.sec.gov/Archives/edgar/data/1057706/000095012310019763/g22320exv10w6.htm)
[the Form 10-K for the year ended December 31, 2009, filed on March 2, 2010.](http://www.sec.gov/Archives/edgar/data/1057706/000095012310019763/g22320exv10w6.htm)
10.8* 
[Employment Agreement between First BanCorp and Orlando Berges, incorporated by reference from Exhibit 10.1 of the Form 10-Q for the](http://www.sec.gov/Archives/edgar/data/1057706/000095012309033170/g20144exv10w1.htm)
[quarter ended June 30, 2009, filed on August 11, 2009.](http://www.sec.gov/Archives/edgar/data/1057706/000095012309033170/g20144exv10w1.htm)
10.9* 
[Letter Agreement between First BanCorp. and Roberto R. Herencia, incorporated by reference from Exhibit 10.1 of the Form 8-K/A, filed on](http://www.sec.gov/Archives/edgar/data/1057706/000129993311003203/exhibit1.htm)
[November 2, 2011.](http://www.sec.gov/Archives/edgar/data/1057706/000129993311003203/exhibit1.htm)
10.10* 
[Offer Letter between First BanCorp and Juan Acosta Reboyras, incorporated by reference from Exhibit 10.1 of the Form 8-K, filed on](http://www.sec.gov/Archives/edgar/data/1057706/000129993314001363/exhibit1.htm)
[September 3, 2014.](http://www.sec.gov/Archives/edgar/data/1057706/000129993314001363/exhibit1.htm)
10.11* 
[Offer Letter between First BanCorp and Luz A. Crespo, incorporated by reference from Exhibit 10.1 of the Form 8-K, filed on February 9,](http://www.sec.gov/Archives/edgar/data/1057706/000129993315000210/exhibit1.htm)
[2015.](http://www.sec.gov/Archives/edgar/data/1057706/000129993315000210/exhibit1.htm)
10.12* 
[Offer Letter between First BanCorp and John A. Heffern, incorporated by reference from Exhibit 10.1 of the Form 8-K, filed on November 1,](http://www.sec.gov/Archives/edgar/data/1057706/000129993317001102/exhibit1.htm)
[2017.](http://www.sec.gov/Archives/edgar/data/1057706/000129993317001102/exhibit1.htm)
10.13* 
[Offer Letter between First BanCorp and Daniel E. Frye, incorporated by reference from Exhibit 10.1 of the Form 8-K, filed on August 31,](http://www.sec.gov/Archives/edgar/data/1057706/000119312518264086/d618589dex101.htm)
[2018.](http://www.sec.gov/Archives/edgar/data/1057706/000119312518264086/d618589dex101.htm)
10.14* 
[Offer Letter between First BanCorp and Flix M. Villamil, incorporated by reference from Exhibit 10.1 of the Form 8-K, filed on November](http://www.sec.gov/Archives/edgar/data/1057706/000114036120024672/brhc10016656_ex10-1.htm)
[5, 2020.](http://www.sec.gov/Archives/edgar/data/1057706/000114036120024672/brhc10016656_ex10-1.htm)
10.15* 
[Offer Letter between First BanCorp and Patricia M. Eaves, incorporated by reference from Exhibit 10.1 of the Form 8-K, filed on April 1,](http://www.sec.gov/Archives/edgar/data/1057706/000114036121011222/brhc10022667_ex10-1.htm)
[2021.](http://www.sec.gov/Archives/edgar/data/1057706/000114036121011222/brhc10022667_ex10-1.htm)
10.16* 
[Form of Executive Employment Agreement executed by each executive officer, incorporated by reference from Exhibit 10.1 of the Form 10-](http://www.sec.gov/Archives/edgar/data/1057706/000105770618000037/fbp06302018x10q_101.htm)
[Q for the quarter ended June 30, 2018, filed on August 9, 2018.](http://www.sec.gov/Archives/edgar/data/1057706/000105770618000037/fbp06302018x10q_101.htm)
10.17* 
[Revised Non-Management and Non-Employee Directors of the Board of Directors Compensation Structure, incorporated by reference from](http://www.sec.gov/Archives/edgar/data/1057706/000105770625000002/exhibit1017.htm)
[Exhibit 10.17 of the Form 10-K for the year ended December 31, 2024, filed on February 28, 2025.](http://www.sec.gov/Archives/edgar/data/1057706/000105770625000002/exhibit1017.htm)
10.18* 
[Professional Servies Agreement by and between Cassan Pancham and FirstBank Puerto Rico, dated as of May 16, 2025, incorporated by](http://www.sec.gov/Archives/edgar/data/1057706/000114036125019487/ef20049204_ex10-1.htm)
[reference from Exhibit 10.1 of the Form 8-K/A, filed on May 16, 2025.](http://www.sec.gov/Archives/edgar/data/1057706/000114036125019487/ef20049204_ex10-1.htm)
18.1 
[Preferability letter from Crowe, LLP regarding a change in accounting method dated November 8, 2022, incorporated by reference form](http://www.sec.gov/Archives/edgar/data/1057706/000105770622000014/fbp09302022x10q181.htm)
[Exhibit 18 of the Form 10-Q for the quarter ended September 30, 2022, filed on November 8, 2022.](http://www.sec.gov/Archives/edgar/data/1057706/000105770622000014/fbp09302022x10q181.htm)
19.1 
[First BanCorp Policy Statement on Inside Information and Insider Trading, incorporated by reference from Exhibit 19.1 of the Form 10-K for](http://www.sec.gov/Archives/edgar/data/1057706/000105770625000002/exhibit19.htm)
[the year ended December 31, 2024, filed on February 28, 2025.](http://www.sec.gov/Archives/edgar/data/1057706/000105770625000002/exhibit19.htm)
21.1 
[List of First BanCorps subsidiaries](exhibit211.htm)
23.1 
[Consent of Crowe LLP](exhibit231.htm)
31.1 
[CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](exhibit311.htm)
31.2 
[CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](exhibit312.htm)
32.1 
[CEO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](exhibit321.htm)
32.2 
[CFO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](exhibit322.htm)
97.1 
[FirstBanCorp Compensation Clawback Policy, incorporated by reference from Exhibit 97.1 of the Form 10-K for the year ended December](http://www.sec.gov/Archives/edgar/data/1057706/000105770624000004/exhibit97.htm)
[31, 2023, filed on February 28, 2024](http://www.sec.gov/Archives/edgar/data/1057706/000105770624000004/exhibit97.htm)
101.INS 
Inline XBRL Instance Document, filed herewith.
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101.SCH 
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104 
The cover page of First BanCorp. Annual Report
on Form 10-K for the year ended December
31, 2025, formatted in Inline XBRL (included 
within the Exhibit 101 attachments) 
_________________________________________________________ 
*Management contract or compensatory
plan or agreement. 
198 
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.
By:
/s/ Aurelio Alemn
Date: 2/27/2026
Aurelio Alemn
President, Chief Executive Officer and Director
Pursuant
to
the
requirements
of
the
Securities
Exchange
Act
of
1934,
this
report
has
been
signed
by
the
following
persons
on
behalf
of
the 
registrant and in the capacities and on the dates indicated. 
/s/ Aurelio Alemn 
Date: 2/27/2026
Aurelio Alemn
President, Chief Executive Officer and Director
/s/ Orlando Berges
Date: 2/27/2026
Orlando Berges, CPA 
Executive Vice President and Chief Financial Officer
/s/ Roberto R. Herencia
Date: 2/27/2026
Roberto R. Herencia, 
Director and Chairman of the Board 
/s/ Patricia M. Eaves
Date: 2/27/2026
Patricia M. Eaves,
Director 
/s/ Luz A. Crespo 
Date: 2/27/2026
Luz A. Crespo, 
Director
/s/ Juan Acosta-Reboyras
Date: 2/27/2026
Juan Acosta-Reboyras,
Director
/s/ John A. Heffern
Date: 2/27/2026
John A. Heffern,
Director
/s/ Daniel E. Frye
Date: 2/27/2026
Daniel E. Frye,
Director
/s/ Tracey Dedrick
Date: 2/27/2026
Tracey Dedrick,
Director
/s/ Felix Villamil
Date: 2/27/2026
Felix Villamil,
Director
/s/ Said Ortiz
Date: 2/27/2026
Said Ortiz, CPA
Senior Vice President and Chief Accounting Officer