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[10-Q] First BanCorp. Quarterly Earnings Report

Filing Impact
(Neutral)
Filing Sentiment
(Neutral)
Form Type
10-Q
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
 
20549
____________
FORM
10-Q
(Mark One)
[X]
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
June 30, 2025
or
[ ]
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
 
EXCHANGE ACT OF 1934
 
For the transition period from ___________________ to
 
___________________
COMMISSION FILE NUMBER
001-14793
FIRST BANCORP
.
(EXACT NAME OF REGISTRANT AS SPECIFIED
 
IN ITS CHARTER)
Puerto Rico
 
66-0561882
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
1519 Ponce de León Avenue
,
Stop 23
San Juan
,
Puerto Rico
 
(Address of principal executive offices)
00908
(Zip Code)
(
787
)
729-8200
(Registrant’s telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock ($0.10 par value per share)
FBP
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed
 
all reports required to be filed by Section 13 or 15(d) of the Securities
 
Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant
 
was required to file such reports), and (2) has been subject
 
to such filing requirements for the past 90
days.
 
Yes
☑
 
No
 
Indicate by check mark whether the registrant has submitted
 
electronically every Interactive Data File required to be submitted
 
pursuant to Rule 405 of Regulation S-T
(§ 232.405 of this chapter) during the preceding 12 months (or for
 
such shorter period that the registrant was required
 
to submit such files).
 
Yes
☑
 
No
 
Indicate by check mark whether the registrant is a large accelerated
 
filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging
growth company.
 
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in
 
Rule 12b-2 of
the Exchange Act.
 
Large accelerated filer
☑
 
Accelerated filer
☐
Non-accelerated filer
☐
 
Smaller reporting company
 
☐
Emerging growth company
 
☐
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to
 
use the extended transition period for complying with any
 
new or revised
financial accounting standards provided pursuant to Section 13(a)
 
of the Exchange Act.
 
Indicate by check mark whether the registrant is a shell company
 
(as defined in Rule 12b-2 of the Exchange Act).
 
Yes
☐
 
No
☑
 
Indicate the number of shares outstanding of each of the
 
issuer’s classes of common stock, as of the latest practicable date.
Common stock:
160,469,644
 
shares outstanding as of August 5, 2025.
2
FIRST BANCORP.
INDEX PAGE
PART
 
I. FINANCIAL INFORMATION
 
PAGE
Item 1.
Financial Statements:
Consolidated Statements of Financial
 
Condition (Unaudited) as of
 
June 30, 2025 and
 
December
31, 2024
 
5
Consolidated Statements
 
of Income
 
(Unaudited) –
 
Quarters and
 
Six-Month Periods
 
ended June
30, 2025 and 2024
6
Consolidated
 
Statements
 
of
 
Comprehensive
 
Income
 
(Unaudited)
 
–
 
Quarters
 
and
 
Six-Month
Periods ended June 30, 2025 and 2024
7
Consolidated Statements
 
of Cash Flows
 
(Unaudited) –
 
Six-Month Periods
 
ended June 30,
 
2025
and 2024
 
8
Consolidated
 
Statements of
 
Changes
 
in Stockholders’
 
Equity (Unaudited)
 
– Quarters
 
and Six-
Month Periods ended June 30, 2025 and 2024
9
Notes to Consolidated Financial Statements (Unaudited)
10
Item 2.
Management’s Discussion and Analysis
 
of Financial Condition and Results of Operations
 
 
74
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
 
120
Item 4.
Controls and Procedures
120
PART
 
II. OTHER INFORMATION
Item 1.
Legal Proceedings
 
121
Item 1A.
Risk Factors
121
Item 2.
Item 5.
Unregistered Sales of Equity Securities and Use of Proceeds
Other Information
122
122
Item 6.
Exhibits
 
123
SIGNATURES
 
3
Forward-Looking Statements
This Quarterly
 
Report on
 
Form 10-Q
 
(this “Form
 
10-Q”) contains
 
forward-looking statements
 
within the
 
meaning of
 
Section 27A
of the Securities Act of 1933, as
 
amended (the “Securities Act”), and
 
Section 21E of the Securities Exchange
 
Act of 1934, as amended
(the “Exchange Act”),
 
which are subject to
 
the safe harbor created
 
by such sections. When
 
used in this Form
 
10-Q or future filings
 
by
First
 
BanCorp.
 
(the
 
“Corporation,”
 
“we,”
 
“us,”
 
or
 
“our”)
 
with
 
the
 
U.S.
 
Securities
 
and
 
Exchange
 
Commission
 
(the
 
“SEC”),
 
in
 
the
Corporation’s press
 
releases or in other public or
 
stockholder communications made by
 
the Corporation, or in oral statements
 
made on
behalf
 
of
 
the
 
Corporation
 
by,
 
or
 
with
 
the
 
approval
 
of,
 
an
 
authorized
 
executive
 
officer
 
of
 
the
 
Corporation,
 
the
 
words
 
or
 
phrases
“would,”
 
“intends,”
 
“will,”
 
“expect,”
 
“should,”
 
“plans,”
 
“forecast,”
 
“anticipate,”
 
“look
 
forward,”
 
“believes,”
 
and
 
other
 
terms
 
of
similar meaning or import, or the
 
negatives of these terms or variations
 
of them, in connection with
 
any discussion of future operating,
financial or other performance are meant to identify “forward-looking
 
statements.”
The Corporation cautions readers
 
not to place undue reliance on
 
any such “forward-looking statements,” which
 
speak only as of the
date made
 
or,
 
with respect
 
to such
 
forward-looking statements
 
contained in
 
this Form
 
10-Q, the
 
date hereof,
 
and advises
 
readers that
any such
 
forward-looking statements
 
are not
 
guarantees of
 
future performance
 
and involve
 
certain risks,
 
uncertainties, estimates,
 
and
assumptions
 
by us
 
that are
 
difficult
 
to predict
 
.
 
Various
 
factors, some
 
of which
 
are beyond
 
our
 
control,
 
could cause
 
actual results
 
to
differ materially from those expressed in, or implied
 
by, such forward-looking
 
statements.
 
 
Factors
 
that
 
could
 
cause
 
results
 
to
 
differ
 
materially
 
from
 
those
 
expressed
 
in,
 
or
 
implied
 
by,
 
the
 
Corporation’s
 
forward-looking
statements include, but are not
 
limited to, risks described or
 
referenced in Part I, Item 1A,
 
“Risk Factors,” in the Corporation’s
 
Annual
Report on Form 10-K for the fiscal year ended December 31, 2024 (the “2024 Annual
 
Report on Form 10-K”), and the following:
●
the effect
 
of changes
 
in the
 
interest rate
 
environment
 
and inflation
 
levels on
 
the level,
 
composition
 
and performance
 
of the
Corporation’s
 
assets and
 
liabilities, and
 
corresponding
 
effects on
 
the Corporation’s
 
net interest
 
income, net
 
interest margin,
loan originations, deposit attrition, overall results of operations, and liquidity
 
position;
●
volatility
 
in
 
the
 
financial
 
services
 
industry,
 
which
 
could
 
result
 
in,
 
among
 
other
 
things,
 
bank
 
deposit
 
runoffs,
 
liquidity
constraints, and increased regulatory requirements and costs;
●
the effect of continued changes in the fiscal, monetary,
 
and trade policies and regulations of the United States (“U.S.”) federal
government, the
 
Puerto Rico
 
government and
 
other governments,
 
including those
 
determined by
 
the Board
 
of Governors
 
of
the Federal Reserve
 
System (the “Federal
 
Reserve Board”), the Federal
 
Reserve Bank of New
 
York
 
(the “FED”), the
 
Federal
Deposit
 
Insurance
 
Corporation
 
(the
 
“FDIC”),
 
government-sponsored
 
housing
 
agencies
 
and
 
regulators
 
in
 
Puerto
 
Rico,
 
the
U.S., and
 
the U.S.
 
Virgin
 
Islands (the
 
“USVI”) and
 
British Virgin
 
Islands (the
 
“BVI”), that
 
may affect
 
the future
 
results of
the Corporation;
●
uncertainty as
 
to the
 
ability of
 
the Corporation’s
 
banking subsidiary,
 
FirstBank Puerto
 
Rico (“FirstBank”
 
or the
 
“Bank”), to
retain its core
 
deposits and
 
generate sufficient
 
cash flow through
 
its wholesale funding
 
sources, such as
 
securities sold under
agreements
 
to
 
repurchase,
 
Federal
 
Home
 
Loan
 
Bank
 
(“FHLB”)
 
advances,
 
and
 
brokered
 
certificates
 
of
 
deposit
 
(“brokered
CDs”), which may require us to sell investment securities at a loss;
 
●
adverse changes
 
in general political
 
and economic
 
conditions in Puerto
 
Rico, the U.S.,
 
and the USVI
 
and the BVI,
 
including
in the interest
 
rate environment, unemployment
 
rates, market liquidity
 
and volatility,
 
trade policies, housing
 
absorption rates,
real
 
estate
 
markets,
 
and
 
U.S.
 
capital
 
markets,
 
which
 
may
 
affect
 
funding
 
sources,
 
loan
 
portfolio
 
performance
 
and
 
credit
quality,
 
market
 
prices
 
of
 
investment
 
securities,
 
and
 
demand
 
for
 
the
 
Corporation’s
 
products
 
and
 
services,
 
and which
 
may
reduce the Corporation’s revenues
 
and earnings and the value of the Corporation’s
 
assets;
●
the impact
 
of government
 
financial assistance
 
for hurricane
 
recovery and
 
other disaster
 
relief on
 
economic activity
 
in Puerto
Rico, and the timing and pace of disbursements of funds earmarked for
 
disaster relief;
●
the ability
 
of the
 
Corporation,
 
FirstBank,
 
and
 
third-party
 
service providers
 
to identify
 
and prevent
 
cyber-security
 
incidents,
such
 
as
 
data
 
security
 
breaches,
 
ransomware,
 
malware,
 
“denial
 
of
 
service”
 
attacks,
 
“hacking,”
 
identity
 
theft,
 
and
 
state-
sponsored
 
cyberthreats,
 
and
 
the
 
occurrence
 
of
 
and
 
response
 
to
 
any
 
incidents
 
that
 
occur,
 
which
 
may
 
result
 
in
 
misuse
 
or
misappropriation
 
of
 
confidential
 
or
 
proprietary
 
information,
 
disruption,
 
or
 
damage
 
to
 
our
 
systems
 
or
 
those
 
of
 
third-party
service providers on which we rely,
 
increased costs and losses and/or adverse effects
 
to our reputation;
●
general
 
competitive
 
factors
 
and
 
other
 
market
 
risks
 
as
 
well
 
as
 
the
 
implementation
 
of
 
existing
 
or
 
planned
 
strategic
 
growth
opportunities,
 
including
 
risks,
 
uncertainties,
 
and
 
other
 
factors
 
or
 
events
 
related
 
to
 
any
 
business
 
acquisitions,
 
dispositions,
strategic
 
partnerships,
 
strategic
 
operational
 
investments,
 
including
 
systems
 
conversions,
 
and
 
any
 
anticipated
 
efficiencies
 
or
other expected results related thereto;
4
●
uncertainty regarding
 
the implementation
 
of Puerto
 
Rico’s
 
debt restructuring
 
plan (“Plan
 
of Adjustment”
 
or “PoA”)
 
and the
revised fiscal plan for Puerto Rico, as certified on June
 
6, 2025 (the “2025 Fiscal Plan”) by the oversight
 
board established by
the Puerto
 
Rico Oversight,
 
Management,
 
and Economic
 
Stability Act
 
(“PROMESA”),
 
or any
 
revisions
 
to it,
 
on our
 
clients
and loan portfolios, and any potential impact of future economic or political
 
developments and tax regulations in Puerto Rico;
 
●
the
 
impact
 
of
 
changes
 
in
 
accounting
 
standards,
 
or
 
determinations
 
and
 
assumptions
 
in
 
applying
 
those
 
standards,
 
and
 
of
forecasts of economic variables considered for the determination of
 
the allowance for credit losses (“ACL”);
●
the ability of FirstBank to realize the benefits of its net deferred tax assets;
●
the ability of FirstBank to generate sufficient cash flow to pay dividends
 
to the Corporation;
●
environmental, social, and governance (“ESG”) matters, including
 
our climate-related initiatives and commitments,
 
as well as
the impact and potential cost to us of any policies, legislation, or initiatives in opposition
 
to our ESG policies;
 
●
the impacts of natural
 
or man-made disasters, widespread
 
health emergencies, geopolitical
 
conflicts (including sanctions, war
or
 
armed
 
conflict,
 
such
 
as the
 
ongoing
 
conflict
 
in
 
Ukraine, the
 
conflict
 
in
 
the
 
Middle
 
East, the
 
possible
 
expansion
 
of such
conflicts in
 
surrounding areas
 
and potential
 
geopolitical consequences
 
,
 
and the
 
threat of
 
conflict from
 
neighboring countries
in our
 
region), terrorist
 
attacks, or
 
other catastrophic
 
external events,
 
including impacts
 
of such
 
events on
 
general economic
conditions and on the Corporation’s
 
assumptions regarding forecasts of economic variables;
●
the
 
risk
 
that
 
additional
 
portions
 
of
 
the
 
unrealized
 
losses in
 
the
 
Corporation’s
 
debt
 
securities portfolio
 
are
 
determined
 
to
 
be
credit-related, resulting
 
in additional
 
charges to
 
the provision
 
for credit
 
losses on
 
the Corporation’s
 
debt securities
 
portfolio,
and
 
the potential
 
for additional
 
credit losses
 
that could
 
emerge
 
from further
 
downgrades of
 
the U.S.’s
 
Long-Term
 
Foreign-
Currency Issuer Default Rating and negative ratings outlooks;
 
●
the
 
impacts
 
of
 
applicable
 
legislative,
 
tax,
 
or
 
regulatory
 
changes
 
or
 
changes
 
in
 
legislative,
 
tax,
 
or
 
regulatory
 
priorities,
including
 
as
 
a
 
result
 
of
 
the
 
One
 
Big
 
Beautiful
 
Bill
 
Act,
 
signed
 
into
 
law
 
on
 
July
 
4,
 
2025;
 
the
 
reduction
 
in
 
staffing
 
at
 
U.S.
governmental
 
agencies;
 
and
 
potential
 
government
 
shutdowns
 
and
 
political
 
impasses,
 
including
 
uncertainties
 
regarding
 
the
U.S. debt ceiling and federal budget, on the Corporation’s
 
financial condition or performance;
●
the
 
risk
 
of
 
possible
 
failure
 
or
 
circumvention
 
of
 
the
 
Corporation’s
 
internal
 
controls
 
and
 
procedures
 
and
 
the
 
risk
 
that
 
the
Corporation’s risk management
 
policies may not be adequate;
●
the risk that the FDIC may
 
further increase the deposit insurance
 
premium and/or require further special
 
assessments, causing
an additional increase in the Corporation’s
 
non-interest expenses;
●
any need to recognize impairments on the Corporation’s
 
financial instruments, goodwill, and other intangible assets;
●
the risk
 
that the
 
impact
 
of the
 
occurrence
 
of any
 
of these
 
uncertainties on
 
the Corporation’s
 
capital would
 
preclude
 
further
growth of FirstBank and preclude the Corporation’s
 
Board of Directors (the “Board”) from declaring dividends; and
●
uncertainty as
 
to whether
 
FirstBank will
 
be able
 
to continue
 
to satisfy
 
its regulators
 
regarding,
 
among other
 
things, its
 
asset
quality,
 
liquidity
 
plans,
 
maintenance
 
of
 
capital
 
levels,
 
and
 
compliance
 
with
 
applicable
 
laws,
 
regulations
 
and
 
related
requirements.
 
The
 
Corporation
 
does
 
not
 
undertake
 
to
 
and
 
specifically
 
disclaims
 
any
 
obligation
 
to
 
update
 
any
 
“forward-looking
 
statements”
 
to
reflect
 
occurrences
 
or
 
unanticipated
 
events
 
or
 
circumstances
 
after
 
the
 
date
 
of
 
such
 
statements,
 
except
 
as
 
required
 
by
 
the
 
federal
securities laws.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5
FIRST BANCORP.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
June 30, 2025
December 31, 2024
(In thousands, except for share information)
ASSETS
Cash and due from banks
$
735,384
$
1,158,215
Money market investments:
Time deposit with another financial institution
500
500
Other short-term investments
826
700
Total money market investments
1,326
1,200
Available-for-sale debt securities, at fair value (amortized cost of
 
$
4,931,635
 
as of June 30, 2025 and $
5,125,408
 
as of December 31, 2024; ACL of $
513
 
as of June 30, 2025 and $
521
 
as of December 31, 2024)
4,496,803
4,565,302
Held-to-maturity debt securities, at amortized
 
cost, net of ACL of $
765
 
as of June 30, 2025 and $
802
as of December 31, 2024 (fair value of
 
$
299,846
 
as of June 30, 2025 and $
308,040
 
as of December 31, 2024)
306,521
316,984
Equity securities
45,202
52,018
Total investment securities
4,848,526
4,934,304
Loans, net of ACL of $
248,578
 
as of June 30, 2025 and $
243,942
 
as of December 31, 2024
12,621,424
12,502,614
Mortgage loans held for sale, at lower of
 
cost or market
9,857
15,276
Total loans, net
12,631,281
12,517,890
Accrued interest receivable on loans and
 
investments
71,548
71,881
Premises and equipment, net
128,425
133,437
Other real estate owned (“OREO”)
14,449
17,306
Deferred tax asset, net
134,772
136,356
Goodwill
38,611
38,611
Other intangible assets
4,535
6,967
Other assets
288,672
276,754
Total assets
$
18,897,529
$
19,292,921
LIABILITIES
Non-interest-bearing deposits
$
5,343,588
$
5,547,538
Interest-bearing deposits
11,210,450
11,323,760
Total deposits
16,554,038
16,871,298
Long-term borrowings
320,000
561,700
Accounts payable and other liabilities
178,036
190,687
Total liabilities
17,052,074
17,623,685
Commitments and contingencies (See
 
Note 19)
(nil)
(nil)
STOCKHOLDERS’ EQUITY
Common stock, $
0.10
 
par value,
2,000,000,000
 
shares authorized;
223,663,116
 
shares issued;
161,507,795
shares outstanding as of June 30, 2025 and
163,868,877
 
shares outstanding as of December 31,
 
2024
22,366
22,366
Additional paid-in capital
959,629
964,964
Retained earnings, includes legal surplus
 
reserve of $
230,178
 
as of each of June 30, 2025 and December
 
31, 2024
2,137,421
2,038,812
Treasury stock (at cost),
62,155,321
 
shares as of June 30, 2025 and
59,794,239
 
shares as of December 31, 2024
(832,671)
(790,350)
Accumulated other comprehensive loss,
 
net of tax of $
8,221
 
as of each of June 30, 2025 and December
 
31, 2024
(441,290)
(566,556)
Total stockholders’ equity
1,845,455
1,669,236
Total liabilities and stockholders’ equity
$
18,897,529
$
19,292,921
The accompanying notes are an integral part
 
of these statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6
FIRST BANCORP.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Quarter Ended June 30,
Six-Month Period Ended June 30,
2025
2024
2025
2024
(In thousands, except per share information)
Interest and dividend income:
 
Loans
$
242,573
$
239,927
$
483,905
$
477,056
 
Investment securities
23,720
23,258
47,248
47,380
 
Money market investments and interest-bearing cash accounts
11,897
9,060
24,102
16,314
 
Total interest and dividend income
278,190
272,245
555,255
540,750
Interest expense:
 
Deposits
58,638
63,671
117,135
126,696
 
Short-term borrowings
-
-
76
-
 
Long-term borrowings
3,693
8,946
9,788
17,906
 
Total interest expense
62,331
72,617
126,999
144,602
 
Net interest income
215,859
199,628
428,256
396,148
Provision for credit losses - expense (benefit):
 
Loans and finance leases
20,381
11,930
45,218
24,847
 
Unfunded loan commitments
287
(417)
224
(136)
 
Debt securities
(81)
92
(45)
(939)
 
Provision for credit losses - expense
20,587
11,605
45,397
23,772
 
Net interest income after provision for credit losses
195,272
188,023
382,859
372,376
Non-interest income:
 
Service charges and fees on deposit accounts
9,756
9,725
19,396
19,387
 
Mortgage banking activities
3,401
3,419
6,578
6,301
 
Insurance commission income
2,538
2,786
8,343
8,293
 
Card and processing income
11,880
11,523
23,355
22,835
 
Other non-interest income
3,375
4,585
9,012
9,205
 
Total non-interest income
 
30,950
32,038
66,684
66,021
Non-interest expenses:
 
Employees’ compensation and benefits
60,058
57,456
122,195
116,962
 
Occupancy and equipment
22,297
21,851
44,927
43,232
 
Business promotion
3,495
4,359
6,773
8,201
 
Professional service fees
11,609
12,431
23,095
25,107
 
Taxes, other than income taxes
5,712
5,408
11,590
10,537
 
FDIC deposit insurance
2,235
2,316
4,471
5,418
 
Net gain on OREO operations
(591)
(3,609)
(1,720)
(5,061)
 
Credit and debit card processing expenses
7,747
7,607
12,857
13,358
 
Communications
2,208
2,261
4,453
4,358
 
Other non-interest expenses
8,567
8,602
17,718
17,493
 
Total non-interest expenses
123,337
118,682
246,359
239,605
Income before income taxes
102,885
101,379
203,184
198,792
Income tax expense
22,705
25,541
45,945
49,496
Net income
 
$
80,180
$
75,838
$
157,239
$
149,296
Net income attributable to common stockholders
 
$
80,180
$
75,838
$
157,239
$
149,296
Net income per common share:
 
Basic
$
0.50
$
0.46
$
0.97
$
0.90
 
Diluted
$
0.50
$
0.46
$
0.97
$
0.90
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7
FIRST BANCORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
Quarter Ended June 30,
Six-Month Period Ended June 30,
2025
2024
2025
2024
(In thousands)
Net income
 
$
80,180
$
75,838
$
157,239
$
149,296
Other comprehensive income (loss), net of tax:
Available-for-sale debt securities:
Net unrealized holding gains (losses) on debt securities
 
(1)
41,205
10,560
125,266
(4,505)
Other comprehensive income (loss) for the period, net of tax
41,205
10,560
125,266
(4,505)
 
Total comprehensive income
$
121,385
$
86,398
$
282,505
$
144,791
(1)
Net unrealized holding
 
gains (losses) 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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8
FIRST BANCORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six-Month Period ended June 30,
2025
2024
(In thousands)
Cash flows from operating activities:
Net income
 
$
157,239
$
149,296
Adjustments to reconcile net income to net cash provided by operating
 
activities:
Depreciation and amortization
8,809
9,313
Amortization of intangible assets
2,432
3,683
Provision for credit losses
45,397
23,772
Deferred income tax expense
1,584
7,402
Stock-based compensation
5,878
4,847
Unrealized gain on derivative instruments
(240)
(353)
Net gain on disposals or sales, and impairments of premises
 
and equipment and other assets
-
(69)
Net gain on sales of loans and loans held-for-sale valuation adjustments
 
(2,230)
(1,599)
Net (accretion) amortization of discounts, premiums, and
 
deferred loan fees and costs
(353)
323
Originations and purchases of loans held for sale
(85,836)
(76,592)
Sales and repayments of loans held for sale
93,508
74,222
Amortization of broker placement fees
329
299
Net amortization of premiums and discounts on investment securities
1,630
2,181
Increase in accrued interest receivable
(2,605)
(142)
(Decrease) increase in accrued interest payable
(3,055)
9,351
Increase in other assets
(11,670)
(2,889)
Decrease in other liabilities
(7,151)
(13,656)
 
Net cash provided by operating activities
203,666
189,389
Cash flows from investing activities:
Net disbursements on loans held for investment
(194,164)
(307,677)
Proceeds from sales of loans held for investment
2,475
10,162
Proceeds from sales of repossessed assets
27,417
37,499
Purchases of available-for-sale debt securities
(404,332)
(28,037)
Proceeds from principal repayments and maturities of available-for-sale
 
debt securities
580,359
293,931
Proceeds from principal repayments of held-to-maturity debt securities
10,767
10,726
Additions to premises and equipment
(4,093)
(5,857)
Proceeds from sales of premises and equipment and other assets
-
1,317
Net redemptions (purchases) of equity securities
6,901
(1,388)
Proceeds from the settlement of insurance claims - investing activities
-
670
 
Net cash provided by investing activities
25,330
11,346
Cash flows from financing activities:
Net decrease in deposits
(299,298)
(122,546)
Repayments of long-term borrowings
(239,850)
-
Repurchase of outstanding common stock
(53,534)
(101,599)
Dividends paid on common stock
(59,019)
(53,472)
 
Net cash used in financing activities
(651,701)
(277,617)
Net decrease in cash and cash equivalents
(422,705)
(76,882)
Cash and cash equivalents at beginning of year
1,159,415
663,164
Cash and cash equivalents at end of period
$
736,710
$
586,282
Cash and cash equivalents include:
Cash and due from banks
$
735,384
$
581,843
Money market investments
1,326
4,439
$
736,710
$
586,282
The accompanying notes are an integral part of these statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9
FIRST BANCORP.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’
 
EQUITY
(Unaudited)
Quarter Ended June 30,
Six-Month Period Ended June 30,
2025
2024
2025
2024
(In thousands, except per share information)
Common Stock
$
22,366
$
22,366
$
22,366
$
22,366
Additional Paid-In Capital:
 
Balance at beginning of period
957,380
959,319
964,964
965,707
 
Stock-based compensation expense
2,139
1,922
5,878
4,847
 
Common stock reissued under stock-based compensation plan
-
(11)
(11,356)
(9,347)
 
Restricted stock forfeited
110
24
143
47
 
Balance at end of period
959,629
961,254
959,629
961,254
Retained Earnings:
 
Balance at beginning of period
2,086,276
1,892,714
2,038,812
1,846,112
 
Net income
 
80,180
75,838
157,239
149,296
 
Dividends on common stock ($
0.18
 
per share and $
0.16
 
per share for the quarters ended
 
 
June 30, 2025 and 2024, respectively; $
0.36
 
per share and $
0.32
 
per share for the
 
six-month periods ended June 30, 2025 and 2024, respectively)
(29,035)
(26,572)
(58,630)
(53,428)
 
Balance at end of period
2,137,421
1,941,980
2,137,421
1,941,980
Treasury Stock (at cost):
 
Balance at beginning of period
(804,185)
(740,447)
(790,350)
(697,406)
 
Common stock repurchases (See Note 11)
(28,376)
(50,005)
(53,534)
(102,359)
 
Common stock reissued under stock-based compensation plan
-
11
11,356
9,347
 
Restricted stock forfeited
(110)
(24)
(143)
(47)
 
Balance at end of period
(832,671)
(790,465)
(832,671)
(790,465)
Accumulated Other Comprehensive Loss, net
 
of tax:
 
Balance at beginning of period
(482,495)
(654,235)
(566,556)
(639,170)
 
Other comprehensive income (loss), net of tax
41,205
10,560
125,266
(4,505)
 
Balance at end of period
(441,290)
(643,675)
(441,290)
(643,675)
 
Total stockholders’ equity
$
1,845,455
$
1,491,460
$
1,845,455
$
1,491,460
The accompanying notes are an integral part of these statements.
10
FIRST BANCORP.
INDEX TO NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
PAGE
Note 1 –
Basis of Presentation and Significant Accounting Policies
 
11
Note 2 –
Debt Securities
12
Note 3 –
Loans Held for Investment
22
Note 4
–
Allowance for Credit Losses for Loans and Finance Leases
42
Note 5 –
Other Real Estate Owned (“OREO”)
45
Note 6 –
Non-Consolidated Variable Interest Entities (“VIEs”) and Servicing Assets
46
Note 7 –
Deposits
49
Note 8 –
Borrowings
50
Note 9 –
Earnings per Common Share
51
Note 10 –
Stock-Based Compensation
52
Note 11 –
Stockholders’ Equity
55
Note 12 –
Accumulated Other Comprehensive Loss
57
Note 13 –
Employee Benefit Plans
57
Note 14–
Income Taxes
58
Note 15
–
Fair Value
59
Note 16
–
Revenue from Contracts with Customers
64
Note 17 –
Segment Information
66
Note 18 –
Supplemental Statements
 
of Cash Flows Information
69
Note 19 –
Regulatory Matters, Commitments, and Contingencies
70
Note 20 –
First BanCorp. (Holding Company Only) Financial Information
72
11
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS
(Unaudited)
NOTE 1 – BASIS
 
OF PRESENTATION AND
 
SIGNIFICANT
 
ACCOUNTING
 
POLICIES
 
The
 
Consolidated
 
Financial
 
Statements
 
(unaudited)
 
for
 
the
 
quarter
 
and
 
six-month
 
period
 
ended
 
June
 
30,
 
2025
 
(the
 
“unaudited
consolidated financial
 
statements”) of
 
First BanCorp.
 
(the “Corporation”)
 
have been
 
prepared in
 
conformity with
 
the accounting
 
policies
stated
 
in
 
the
 
Corporation’s
 
Audited
 
Consolidated
 
Financial
 
Statements
 
for
 
the
 
fiscal
 
year
 
ended
 
December
 
31,
 
2024
 
(the
 
“audited
consolidated financial
 
statements”) included
 
in the
 
2024 Annual
 
Report on
 
Form 10-K,
 
as updated
 
by the
 
information contained
 
in this
report.
 
Certain
 
information
 
and
 
note
 
disclosures
 
normally
 
included
 
in
 
the
 
financial
 
statements
 
prepared
 
in
 
accordance
 
with
 
generally
accepted accounting principles in the United States of America
 
(“GAAP”) have been condensed or omitted from these statements pursuant
to
 
the
 
rules
 
and
 
regulations
 
of
 
the
 
SEC
 
and,
 
accordingly,
 
these
 
financial
 
statements
 
should
 
be
 
read
 
in
 
conjunction
 
with
 
the
 
audited
consolidated financial statements, which are included in the 2024 Annual Report on Form 10-K. All adjustments (consisting only of normal
recurring adjustments) that are, in the opinion of management,
 
necessary for a fair presentation of the statement of
 
financial position, results
of operations and cash flows
 
for the interim periods have
 
been reflected. All significant
 
intercompany accounts and transactions
 
have been
eliminated in consolidation. The Corporation evaluates subsequent events through
 
the date of filing with the SEC.
 
The results
 
of operations
 
for the
 
quarter and
 
six-month period
 
ended June
 
30, 2025
 
are not
 
necessarily indicative
 
of the
 
results to
 
be
expected
 
for the
 
entire year.
Adoption of New Accounting Requirements
The Corporation was not impacted
 
by the adoption of the
 
following Accounting Standards Updates (“ASUs”) during
 
the first quarter of
2025:
●
ASU 2024-02, “Codification Improvements –
 
Amendments to Remove References to the Concepts Statements”
●
ASU 2024-01, “Compensation – Stock Compensation (Topic
 
718): Stock Application of Profits Interest and Similar Awards”
Recently
 
Issued Accounting
 
Standards
 
Not Yet Effective
 
or Not Yet Adopted
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. The amendments in this
 
Update, which should be
 
applied
prospectively, will be 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. The Corporation does not expect to
 
be materially impacted by the adoption of this ASU during
 
the first quarter of 2026.
The Corporation
 
does not
 
expect to
 
be impacted
 
by the
 
following ASU
 
issued during
 
2025 that
 
is not
 
yet effective
 
or has
 
not yet
been adopted:
●
ASU 2025-03, “Business Combinations (Topic
 
805) and Consolidation (Topic
 
810): Determining the Accounting Acquirer
in the Acquisition of a Variable
 
Interest Entity”
For
 
other
 
issued
 
accounting
 
standards
 
not
 
yet
 
effective
 
or
 
not
 
yet
 
adopted,
 
see
 
Note
 
1
 
–
 
“Nature
 
of
 
Business
 
and
 
Summary
 
of
Significant Accounting Policies,” to the audited consolidated financial
 
statements included in the 2024 Annual Report on Form 10-K.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
12
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 June 30, 2025 and
 
December 31, 2024 were as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 30, 2025
Amortized cost
(1)
Gross Unrealized
ACL
Fair Value
(2)
Weighted-
Gains
Losses
average yield%
(Dollars in thousands)
U.S. Treasury securities:
 
Due within one year
$
217,634
$
12
$
214
$
-
$
217,432
3.94
U.S. government-sponsored entities' (“GSEs”) obligations:
 
Due within one year
1,027,771
-
13,922
-
1,013,849
0.73
 
After 1 to 5 years
546,010
26
28,679
-
517,357
1.01
 
After 10 years
7,015
-
12
-
7,003
4.68
Puerto Rico government obligation:
 
After 10 years
(3)
2,833
-
920
337
1,576
-
United States and Puerto Rico government obligations
1,801,263
38
43,747
337
1,757,217
1.21
Mortgage-backed securities (“MBS”):
 
Residential MBS:
 
Freddie Mac (“FHLMC”) certificates:
 
After 1 to 5 years
11,321
-
274
-
11,047
2.14
 
After 5 to 10 years
141,349
-
10,269
-
131,080
1.46
 
After 10 years
868,484
428
136,249
-
732,663
1.58
 
1,021,154
428
146,792
-
874,790
1.57
 
Ginnie Mae (“GNMA”) certificates:
 
 
Due within one year
153
-
-
-
153
2.61
 
After 1 to 5 years
5,863
-
203
-
5,660
0.72
 
After 5 to 10 years
60,226
4
4,414
-
55,816
1.74
 
 
After 10 years
149,091
76
19,182
-
129,985
2.94
215,333
80
23,799
-
191,614
2.54
 
Fannie Mae (“FNMA”) certificates:
 
After 1 to 5 years
17,145
-
409
-
16,736
2.14
 
 
After 5 to 10 years
244,722
39
14,920
-
229,841
1.77
 
After 10 years
904,406
508
123,825
-
781,089
1.53
 
1,166,273
547
139,154
-
1,027,666
1.59
 
Collateralized mortgage obligations (“CMOs”) issued
 
or guaranteed by the FHLMC, FNMA, and GNMA:
 
After 10 years
484,723
1,724
44,570
-
441,877
3.32
 
Private label:
 
After 5 to 10 years
5,447
-
1,490
176
3,781
6.57
Total Residential MBS
2,892,930
2,779
355,805
176
2,539,728
1.95
 
Commercial MBS:
 
After 1 to 5 years
33,487
10
1,605
-
31,892
2.55
 
After 5 to 10 years
10,479
-
1,279
-
9,200
1.68
 
After 10 years
192,976
77
34,787
-
158,266
2.39
Total Commercial MBS
236,942
87
37,671
-
199,358
2.38
Total MBS
3,129,872
2,866
393,476
176
2,739,086
1.99
Other:
 
Due within one year
500
-
-
-
500
2.35
Total available-for-sale debt securities
$
4,931,635
$
2,904
$
437,223
$
513
$
4,496,803
1.70
(1)
Excludes accrued interest receivable on available-for-sale debt securities that totaled $
8.8
 
million as of June 30, 2025 reported as part of accrued interest receivable on loans and investment securities in the consolidated
statements of financial condition, and excluded from the estimate of credit losses.
(2)
Includes $
265.8
 
million (amortized cost - $
304.4
 
million) that was pledged at the FHLB as collateral for borrowings and letters of credit as well as $
2.8
 
billion (amortized cost - $
3.1
 
billion) pledged as collateral for the
uninsured portion of government deposits. The secured parties are not permitted to sell or repledge the collateral.
(3)
Consists of a residential
 
pass-through MBS issued by the
 
Puerto Rico Housing Finance Authority
 
(the “PRHFA”) that
 
is collateralized by certain
 
second mortgages originated under
 
a program launched by the
 
Puerto
Rico government in 2010 and is in nonaccrual status based on the delinquency status of the underlying second mortgage loans collateral.
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
13
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2024
Amortized cost
(1)
Gross Unrealized
ACL
Fair value
(2)
Weighted-
Gains
Losses
average yield%
(Dollars in thousands)
U.S. Treasury securities:
 
Due within one year
$
59,992
$
-
$
803
$
-
$
59,189
0.75
U.S. GSEs’ obligations:
 
Due within one year
1,090,678
-
22,826
-
1,067,852
0.79
 
After 1 to 5 years
817,835
39
53,195
-
764,679
0.96
 
After 10 years
7,835
-
35
-
7,800
4.73
Puerto Rico government obligation:
 
After 10 years
(3)
2,951
-
986
345
1,620
-
United States and Puerto Rico government obligations
1,979,291
39
77,845
345
1,901,140
0.87
MBS:
 
Residential MBS:
 
FHLMC certificates:
 
After 1 to 5 years
14,477
-
460
-
14,017
2.14
 
After 5 to 10 years
122,548
-
9,977
-
112,571
1.52
 
After 10 years
936,531
25
168,691
-
767,865
1.51
1,073,556
25
179,128
-
894,453
1.52
 
GNMA certificates:
 
 
Due within one year
881
-
6
-
875
2.68
 
After 1 to 5 years
8,025
-
350
-
7,675
0.71
 
After 5 to 10 years
67,181
-
6,125
-
61,056
1.86
 
 
After 10 years
142,330
16
22,041
-
120,305
2.78
218,417
16
28,522
-
189,911
2.42
 
FNMA certificates:
 
After 1 to 5 years
21,921
-
689
-
21,232
2.13
 
 
After 5 to 10 years
244,966
-
18,874
-
226,092
1.74
 
After 10 years
979,366
16
159,560
-
819,822
1.51
 
1,246,253
16
179,123
-
1,067,146
1.56
CMOs issued or guaranteed by the FHLMC, FNMA,
 
 
and GNMA:
 
After 10 years
377,812
74
52,338
-
325,548
2.88
 
Private label:
 
After
 
5 to 10 years
4,886
-
1,430
57
3,399
6.69
 
After 10 years
1,200
-
285
119
796
6.32
6,086
-
1,715
176
4,195
6.62
Total Residential MBS
2,922,124
131
440,826
176
2,481,253
1.79
 
Commercial MBS:
 
After 1 to 5 years
33,835
13
2,286
-
31,562
2.59
 
 
After 5 to 10 years
10,621
-
1,653
-
8,968
1.67
 
After 10 years
178,537
-
37,158
-
141,379
2.06
Total Commercial MBS
222,993
13
41,097
-
181,909
2.12
Total MBS
3,145,117
144
481,923
176
2,663,162
1.82
Other
Due within one year
1,000
-
-
-
1,000
2.32
Total available-for-sale debt securities
$
5,125,408
$
183
$
559,768
$
521
$
4,565,302
1.45
(1)
Excludes accrued
 
interest receivable
 
on available-for-sale
 
debt
 
securities that
 
totaled $
9.6
 
million as
 
of December
 
31, 2024
 
reported as
 
part of
 
accrued interest
 
receivable on
 
loans and
 
investment
 
securities in
 
the
consolidated statements of financial condition, and excluded from the estimate of credit losses.
(2)
Includes $
466.1
 
million (amortized cost - $
533.7
 
million) that was pledged
 
at the FHLB as
 
collateral for borrowings and
 
letters of credit as well
 
as $
3.0
 
billion (amortized cost -
 
$
3.3
 
billion) pledged as collateral for
 
the
uninsured portion of government deposits. The secured parties are not permitted to sell or repledge the collateral.
(3)
Consists of a residential pass-through MBS issued by the PRHFA
 
that is collateralized by certain second mortgages originated under a program
 
launched by the Puerto Rico government in 2010 and is in
 
nonaccrual status
based on the delinquency status of the underlying second mortgage loans collateral.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
14
During the
 
first six
 
months of
 
2025, the
 
Corporation purchased
 
approximately $
409.4
 
million in
 
available-for-sale
 
debt securities,
of
 
which
 
$
196.8
 
million
 
were U.S
 
Treasury
 
securities
 
with
 
an
 
average
 
yield
 
of
4.27
% and
 
$
212.6
 
million
 
were
 
U.S agencies
 
MBS
with an average yield of
5.29
%, including $
195.5
 
million of residential MBS.
Maturities
 
of
 
available-for-sale
 
debt
 
securities
 
are
 
based
 
on
 
the
 
period
 
of
 
final
 
contractual
 
maturity.
 
Expected
 
maturities
 
might
differ
 
from
 
contractual
 
maturities
 
because
 
they
 
may
 
be
 
subject
 
to
 
prepayments
 
and/or
 
call
 
options.
 
The
 
weighted-average
 
yield
 
on
available-for-sale
 
debt
 
securities
 
is
 
based
 
on
 
amortized
 
cost
 
and,
 
therefore,
 
does
 
not
 
give
 
effect
 
to
 
changes
 
in
 
fair
 
value.
 
The
 
net
unrealized loss
 
on available-for-sale
 
debt securities
 
is presented
 
as part
 
of accumulated
 
other comprehensive
 
loss in
 
the consolidated
statements of financial condition.
The
 
following
 
tables
 
present
 
the
 
fair
 
value
 
and
 
gross
 
unrealized
 
losses
 
of
 
the
 
Corporation’s
 
available-for-sale
 
debt
 
securities,
aggregated by
 
investment category
 
and length of
 
time that individual
 
securities have
 
been in a
 
continuous unrealized
 
loss position, as
of June 30, 2025 and December 31, 2024. The tables also include debt securities for
 
which an ACL was recorded.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2025
Less than 12 months
12 months or more
Total
Unrealized
Unrealized
Unrealized
Fair Value
 
Losses
Fair Value
 
Losses
Fair Value
 
Losses
(In thousands)
 
U.S. Treasury and U.S. GSEs’
 
obligations
$
104,471
$
47
$
1,545,519
$
42,780
$
1,649,990
$
42,827
 
Puerto Rico government obligation
-
-
1,576
920
(1)
1,576
920
 
MBS:
 
Residential MBS:
 
FHLMC
-
-
829,030
146,792
829,030
146,792
 
GNMA
15,257
221
155,770
23,578
171,027
23,799
 
FNMA
-
-
969,968
139,154
969,968
139,154
 
CMOs issued or guaranteed by the FHLMC,
 
FNMA, and GNMA
8,683
14
176,975
44,556
185,658
44,570
 
Private label
-
-
3,781
1,490
(1)
3,781
1,490
 
Commercial MBS
30,982
595
131,045
37,076
162,027
37,671
$
159,393
$
877
$
3,813,664
$
436,346
$
3,973,057
$
437,223
(1)
Unrealized losses do not include the credit loss component recorded
 
as part of the ACL. As of June 30, 2025, the PRHFA
 
bond and private label MBS had an ACL of $
0.3
 
million and
$
0.2
 
million, respectively.
As of December 31, 2024
Less than 12 months
12 months or more
Total
Unrealized
Unrealized
Unrealized
Fair Value
 
Losses
Fair Value
 
Losses
Fair Value
 
Losses
(In thousands)
 
U.S. Treasury and U.S. GSEs’
 
obligations
$
8,005
$
35
$
1,886,046
$
76,824
$
1,894,051
$
76,859
 
Puerto Rico government obligation
-
-
1,620
986
(1)
1,620
986
 
MBS:
 
Residential MBS:
 
FHLMC
36,224
85
857,492
179,043
893,716
179,128
 
GNMA
22,281
508
166,470
28,014
188,751
28,522
 
FNMA
53,325
132
1,012,331
178,991
1,065,656
179,123
 
CMOs issued or guaranteed by the FHLMC,
 
FNMA, and GNMA
52,778
248
187,772
52,090
240,550
52,338
 
Private label
-
-
4,195
1,715
(1)
4,195
1,715
 
Commercial MBS
44,831
823
131,152
40,274
175,983
41,097
$
217,444
$
1,831
$
4,247,078
$
557,937
$
4,464,522
$
559,768
(1)
Unrealized losses do not include
 
the credit loss component recorded
 
as part of the ACL.
 
As of December 31, 2024,
 
the PRHFA bond
 
and private label MBS had
 
an ACL of $
0.3
 
million
and $
0.2
 
million, respectively.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
15
 
Assessment for Credit Losses
Debt securities
 
issued by
 
U.S. government
 
agencies,
 
U.S. GSEs,
 
and
 
the U.S.
 
Treasury,
 
including
 
notes and
 
MBS, accounted
 
for
substantially
 
all
 
of
 
the
 
total
 
available-for-sale
 
portfolio
 
as
 
of
 
June
 
30,
 
2025,
 
and
 
the
 
Corporation
 
expects
 
no
 
credit
 
losses
 
on
 
these
securities,
 
given
 
the
 
explicit
 
and
 
implicit
 
guarantees
 
provided
 
by
 
the
 
U.S.
 
federal
 
government.
 
Because
 
the
 
decline
 
in
 
fair
 
value
 
is
attributable
 
to
 
changes
 
in
 
interest
 
rates,
 
and
 
not
 
credit
 
quality,
 
and
 
because,
 
as
 
of
 
June
 
30,
 
2025,
 
the
 
Corporation
 
did
 
not
 
have
 
the
intent to
 
sell these
 
U.S. government
 
and agencies
 
debt securities
 
and determined
 
that it
 
was likely
 
that it
 
will not
 
be required
 
to sell
these
 
securities
 
before
 
their
 
anticipated
 
recovery,
 
the
 
Corporation
 
does
 
not
 
consider
 
impairments
 
on
 
these
 
securities
 
to
 
be
 
credit
related. The
 
Corporation’s
 
credit loss
 
assessment was
 
concentrated mainly
 
on private
 
label MBS and
 
on the
 
Puerto Rico
 
government
debt security, for
 
which credit losses are evaluated on a quarterly basis.
 
Private label MBS
 
held as part
 
of the Corporation’s
 
available for sale
 
portfolio consist of
 
trust certificates issued
 
by an unaffiliated
party
 
backed
 
by
 
fixed-rate,
 
single-family
 
residential
 
mortgage
 
loans
 
in
 
the
 
U.S.
 
mainland
 
with
 
original
 
FICO
 
scores
 
over
 
700
 
and
moderate
 
loan-to-value
 
ratios (under
80
%), as
 
well
 
as moderate
 
delinquency
 
levels.
 
The interest
 
rate
 
on
 
these
 
private label
 
MBS is
variable, tied
 
to
3-month CME Term Secured Overnight Financing Rate (“SOFR”
) plus
 
a tenor
 
spread adjustment
 
of
0.26161
% and
the
 
original
 
spread
 
limited
 
to
 
the
 
weighted-average
 
coupon
 
of
 
the
 
underlying
 
collateral.
 
The
 
Corporation
 
determined
 
the
 
ACL
 
for
private
 
label
 
MBS
 
based
 
on
 
a
 
risk-adjusted
 
discounted
 
cash
 
flow
 
methodology
 
that
 
considers
 
the
 
structure
 
and
 
terms
 
of
 
the
instruments.
 
The
 
Corporation
 
utilized
 
probability
 
of default
 
(“PDs”)
 
and
 
loss-given
 
default
 
(“LGDs”)
 
that
 
considered,
 
among
 
other
things, historical
 
payment performance,
 
loan-to-value attributes,
 
and relevant
 
current and
 
forward-looking
 
macroeconomic variables,
such as
 
regional unemployment
 
rates and
 
the housing
 
price index.
 
Under this
 
approach, expected
 
cash flows
 
(interest and
 
principal)
were discounted
 
at the U.S.
 
Treasury yield
 
curve as of
 
the reporting
 
date. See
 
Note 15
 
– “Fair Value
 
”
 
for the significant
 
assumptions
used in the valuation of the private label MBS as of June 30, 2025 and December
 
31, 2024.
For the residential
 
pass-through MBS issued
 
by the PRHFA
 
held as part of
 
the Corporation’s
 
available-for-sale portfolio
 
backed by
second
 
mortgage
 
residential
 
loans
 
in
 
Puerto
 
Rico,
 
the
 
ACL
 
was
 
determined
 
based
 
on
 
a
 
discounted
 
cash
 
flow
 
methodology
 
that
considered the structure and
 
terms of the debt security.
 
The expected cash flows were
 
discounted at the U.S. Treasury
 
yield curve plus
a spread as
 
of the reporting date
 
and compared to
 
the amortized cost. The
 
Corporation utilized PDs and
 
LGDs that considered,
 
among
other
 
things,
 
historical
 
payment
 
performance,
 
loan-to-value
 
attributes,
 
and
 
relevant
 
current
 
and
 
forward-looking
 
macroeconomic
variables, such as
 
regional unemployment
 
rates, the housing
 
price index,
 
and expected recovery
 
from the PRHFA
 
guarantee. PRHFA,
not the
 
Puerto Rico
 
government, provides
 
a guarantee
 
in the event
 
of default
 
and subsequent
 
foreclosure of
 
the properties
 
underlying
the
 
second
 
mortgage
 
loans.
 
In
 
the
 
event
 
that
 
the
 
second
 
mortgage
 
loans
 
default
 
and
 
the
 
collateral
 
is
 
insufficient
 
to
 
satisfy
 
the
outstanding
 
balance
 
of
 
this
 
residential
 
pass-through
 
MBS,
 
PRHFA’s
 
ability
 
to
 
honor
 
such
 
guarantee
 
will
 
depend
 
on,
 
among
 
other
factors,
 
its
 
financial
 
condition
 
at
 
the
 
time
 
such
 
obligation
 
becomes
 
due
 
and
 
payable.
 
Deterioration
 
of
 
the
 
Puerto
 
Rico
 
economy
 
or
fiscal health of the PRHFA
 
could impact the value of this security,
 
resulting in additional losses to the Corporation.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
16
The following table presents
 
a roll-forward of the ACL on available-for-sale debt securities by major security type
 
for the quarters and
six-month periods ended June 30, 2025 and 2024:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended June 30,
2025
2024
Private label
MBS
Puerto Rico
 
Government
Obligation
Total
Private label
MBS
Puerto Rico
 
Government
Obligation
Total
(In thousands)
Beginning balance
$
176
$
340
$
516
$
116
$
326
$
442
Provision for credit losses – (benefit) expense
-
(3)
(3)
-
60
60
Net recoveries
-
-
-
47
-
47
 
ACL on available-for-sale debt securities
$
176
$
337
$
513
$
163
$
386
$
549
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six-Month Period Ended June 30,
2025
2024
Private label
MBS
Puerto Rico
 
Government
Obligations
Total
Private label
MBS
Puerto Rico
 
Government
Obligations
Total
(In thousands)
Beginning balance
$
176
$
345
$
521
$
116
$
395
$
511
Provision for credit losses - benefit
-
(8)
(8)
-
(9)
(9)
Net recoveries
-
-
-
47
-
47
 
ACL on available-for-sale debt securities
$
176
$
337
$
513
$
163
$
386
$
549
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
17
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 June 30, 2025
 
and December 31, 2024 were as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 30, 2025
Amortized cost
(1) (2)
Gross Unrecognized
Fair value
Weighted-
Gains
Losses
ACL
average yield%
(Dollars in thousands)
Puerto Rico municipal bonds:
Due within one year
$
2,380
$
-
$
7
$
2,373
$
5
4.86
After 1 to 5 years
62,962
2,450
218
65,194
410
7.18
After 5 to 10 years
11,741
705
168
12,278
111
5.06
After 10 years
15,755
106
-
15,861
239
7.78
Total Puerto Rico municipal bonds
92,838
3,261
393
95,706
765
6.96
MBS:
 
Residential MBS:
FHLMC certificates:
After 1 to 5 years
10,156
-
190
9,966
-
3.03
After 10 years
16,349
-
850
15,499
-
4.33
26,505
-
1,040
25,465
-
3.83
GNMA certificates:
After 10 years
12,271
-
523
11,748
-
3.30
FNMA certificates:
After 10 years
58,175
-
2,610
55,565
-
4.19
CMOs issued or guaranteed by
 
FHLMC, FNMA, and GNMA:
After 10 years
24,123
-
895
23,228
-
3.43
Total Residential MBS
121,074
-
5,068
116,006
-
3.87
 
Commercial MBS:
Due within one year
9,160
-
86
9,074
-
3.48
After 10 years
84,214
-
5,154
79,060
-
1.90
Total Commercial MBS
93,374
-
5,240
88,134
-
2.06
Total MBS
214,448
-
10,308
204,140
-
3.08
Total held-to-maturity debt securities
$
307,286
$
3,261
$
10,701
$
299,846
$
765
4.25
(1)
Excludes accrued interest receivable
 
on held-to-maturity debt securities
 
that totaled $
3.8
 
million as of June 30,
 
2025 reported as part
 
of accrued interest receivable on
 
loans and investment securities
 
in the consolidated
statements of financial condition, and excluded from the estimate of credit losses.
(2)
Includes $
188.8
 
million (fair value - $
185.7
 
million) that serves as collateral for the uninsured portion of government deposits. The secured parties are not permitted to sell or repledge the collateral.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
18
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2024
Amortized cost
(1) (2)
Gross Unrecognized
Fair value
Weighted-
Gains
Losses
ACL
average yield%
(Dollars in thousands)
Puerto Rico municipal 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 Puerto Rico municipal bonds
92,442
3,815
649
95,608
802
7.18
MBS:
 
Residential MBS:
FHLMC certificates:
After 5 to 10 years
12,112
-
353
11,759
-
3.03
After 10 years
16,936
-
1,142
15,794
-
4.30
29,048
-
1,495
27,553
-
3.77
GNMA certificates:
After 10 years
13,472
-
842
12,630
-
3.29
FNMA certificates:
After 10 years
61,233
-
3,786
57,447
-
4.19
CMOs issued or guaranteed by
 
FHLMC, FNMA, and GNMA:
After 10 years
25,566
-
1,321
24,245
-
3.49
Total Residential MBS
129,319
-
7,444
121,875
-
3.86
 
Commercial MBS:
After 1 to 5 years
9,258
-
151
9,107
-
3.48
After 10 years
86,767
-
5,317
81,450
-
3.92
Total Commercial MBS
96,025
-
5,468
90,557
-
3.88
Total MBS
225,344
-
12,912
212,432
-
3.87
Total held-to-maturity debt securities
$
317,786
$
3,815
$
13,561
$
308,040
$
802
4.83
(1)
Excludes accrued
 
interest receivable
 
on held-to-maturity
 
debt securities
 
that totaled
 
$
4.1
 
million as
 
of December
 
31, 2024
 
reported as
 
part of
 
accrued interest
 
receivable on
 
loans and
 
investment securities
 
in the
consolidated statements of financial condition, and excluded from the estimate of credit losses.
(2)
Includes $
198.6
 
million (fair value - $
192.4
 
million) that serves as collateral for the uninsured portion of government deposits. The secured parties are not permitted to sell or repledge the collateral.
 
 
 
 
 
 
 
 
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
19
The
 
following
 
tables
 
present
 
the
 
Corporation’s
 
held-to-maturity
 
debt
 
securities’
 
fair
 
value
 
and
 
gross
 
unrecognized
 
losses,
aggregated by
 
category and
 
length of
 
time that
 
individual securities
 
had been
 
in a
 
continuous unrecognized
 
loss position,
 
as of
 
June
30, 2025 and December 31, 2024, including debt securities for which
 
an ACL was recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2025
Less than 12 months
12 months or more
Total
Unrecognized
Unrecognized
Unrecognized
Fair Value
 
Losses
Fair Value
 
Losses
Fair Value
 
Losses
(In thousands)
 
Puerto Rico municipal bonds
$
-
$
-
$
22,209
$
393
$
22,209
$
393
 
MBS:
 
Residential MBS:
 
FHLMC certificates
-
-
25,465
1,040
25,465
1,040
 
GNMA certificates
-
-
11,748
523
11,748
523
 
FNMA certificates
-
-
55,565
2,610
55,565
2,610
 
CMOs issued or guaranteed by FHLMC,
 
FNMA, and GNMA
-
-
23,228
895
23,228
895
 
Commercial MBS
-
-
88,134
5,240
88,134
5,240
Total held-to-maturity debt securities
$
-
$
-
$
226,349
$
10,701
$
226,349
$
10,701
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)
 
Puerto Rico municipal bonds
$
-
$
-
$
20,071
$
649
$
20,071
$
649
 
MBS:
 
Residential MBS:
 
FHLMC certificates
-
-
27,553
1,495
27,553
1,495
 
GNMA certificates
-
-
12,630
842
12,630
842
 
FNMA certificates
-
-
57,447
3,786
57,447
3,786
 
CMOs issued or guaranteed by FHLMC,
 
FNMA, and GNMA
-
-
24,245
1,321
24,245
1,321
 
Commercial MBS
-
-
90,557
5,468
90,557
5,468
Total held-to-maturity debt securities
$
-
$
-
$
232,503
$
13,561
$
232,503
$
13,561
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
20
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 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
Puerto Rico municipal
 
bonds, the Corporation
 
determines the ACL
 
based on the product
 
of a cumulative
 
PD and LGD, and
 
the amortized
cost
 
basis
 
of
 
the
 
bonds
 
over
 
their
 
remaining
 
expected
 
life
 
as
 
described
 
in
 
Note
 
1
 
–
 
“Nature
 
of
 
Business
 
and
 
Summary
 
of
 
Significant
Accounting Policies,” to the audited financial statements included in the
 
2024 Annual Report on Form 10-K.
The Corporation
 
performs periodic
 
credit quality
 
reviews on
 
these issuers.
 
All of
 
the Puerto
 
Rico municipal
 
bonds were
 
current as
 
to
scheduled contractual
 
payments as
 
of June
 
30, 2025.
 
The ACL
 
of Puerto
 
Rico municipal
 
bonds was
 
$
0.8
 
million as
 
of each
 
of June
 
30,
2025 and December 31, 2024.
 
 
The following table presents
 
the activity in the
 
ACL for held-to-maturity debt
 
securities by major security
 
type for the quarters
 
and
six-month periods ended June 30, 2025 and 2024:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Puerto Rico Municipal Bonds
Quarter Ended June 30,
2025
2024
(In thousands)
Beginning balance
$
843
$
1,235
Provision for credit losses – (benefit) expense
 
(78)
32
ACL on held-to-maturity debt securities
$
765
$
1,267
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Puerto Rico Municipal Bonds
Six-Month Period Ended June 30,
2025
2024
(In thousands)
Beginning Balance
$
802
$
2,197
Provision for credit losses - benefit
(37)
(930)
ACL on held-to-maturity debt securities
$
765
$
1,267
 
From
 
time
 
to
 
time,
 
the
 
Corporation
 
has
 
held-to-maturity
 
securities
 
with
 
an
 
original
 
maturity
 
of
 
three
 
months
 
or
 
less
 
that
 
are
considered
 
cash
 
and
 
cash
 
equivalents
 
and
 
are
 
classified
 
as
 
money
 
market
 
investments
 
in
 
the
 
consolidated
 
statements
 
of
 
financial
condition. As
 
of
 
June
 
30,
 
2025
 
and
 
December
 
31,
 
2024,
 
the
 
Corporation
 
had
no
 
outstanding
 
held-to-maturity
 
securities
 
that
 
were
classified as cash and cash equivalents.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
21
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 Puerto
 
Rico municipalities
 
issued in
 
bond form.
 
The Puerto
 
Rico municipal
 
bonds 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
 
municipal bonds
 
through the
 
use of
 
internal credit-risk
 
ratings, which
 
are generally
 
updated on
 
a
quarterly
 
basis.
 
The
 
Corporation
 
considers
 
a
 
municipal
 
bond
 
as
 
a
 
criticized
 
asset
 
if
 
its
 
risk
 
rating
 
is
 
Special
 
Mention,
 
Substandard,
Doubtful, or Loss.
 
Puerto Rico municipal
 
bonds that do
 
not meet the
 
criteria for classification
 
as criticized assets
 
are considered
 
to be
Pass-rated
 
securities.
 
For
 
the
 
definitions
 
of
 
the
 
internal-credit
 
ratings,
 
see
 
Note
 
3
 
–
 
“Debt
 
Securities,”
 
to
 
the
 
audited
 
consolidated
financial statements included in the 2024 Annual Report on Form 10-K.
The
 
Corporation
 
has
 
a
 
Loan
 
Review
 
Group
 
that
 
reports
 
directly
 
to
 
the
 
Corporation’s
 
Risk
 
Management
 
Committee
 
and
administratively
 
to
 
the
 
Chief
 
Risk
 
Officer.
 
The
 
Loan
 
Review
 
Group
 
performs
 
annual
 
comprehensive
 
credit
 
process
 
reviews
 
of
 
the
Bank’s
 
commercial
 
loan
 
portfolios,
 
including
 
the
 
above-mentioned
 
Puerto
 
Rico
 
municipal
 
bonds
 
accounted
 
for
 
as
 
held-to-maturity
debt
 
securities.
 
The objective
 
of
 
these
 
loan
 
reviews is
 
to
 
assess accuracy
 
of the
 
Bank’s
 
determination
 
and
 
maintenance
 
of
 
loan
 
risk
rating
 
and
 
its
 
adherence
 
to
 
lending
 
policies,
 
practices
 
and
 
procedures.
 
The
 
monitoring
 
performed
 
by
 
this
 
group
 
contributes
 
to
 
the
assessment
 
of
 
compliance
 
with
 
credit
 
policies
 
and
 
underwriting
 
standards,
 
the
 
determination
 
of
 
the
 
current
 
level
 
of
 
credit
 
risk,
 
the
evaluation of
 
the effectiveness
 
of the credit
 
management process,
 
and the identification
 
of any deficiency
 
that may arise
 
in the credit-
granting process. Based
 
on its findings, the
 
Loan Review Group recommends
 
corrective actions, if
 
necessary,
 
that help in maintaining
a sound credit process. The Loan Review Group reports the results of the credit
 
process reviews to the Risk Management Committee.
As of June 30, 2025 and December 31, 2024, all Puerto Rico municipal 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 June
 
30, 2025
and
 
December
 
31,
 
2024.
 
A
 
security
 
is
 
considered
 
to
 
be
 
past
 
due
 
once
 
it
 
is
 
30
 
days
 
contractually
 
past
 
due
 
under
 
the
 
terms
 
of
 
the
agreement.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
22
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 June 30,
As of December 31,
2025
2024
(In thousands)
Puerto Rico and Virgin Islands region:
Residential mortgage loans, mainly secured by first mortgages
$
2,343,894
$
2,323,205
Construction loans
204,485
184,427
Commercial mortgage loans
 
1,774,231
1,867,894
Commercial and Industrial (“C&I”) loans
2,367,000
2,325,875
Consumer loans
3,741,142
3,750,205
Loans held for investment
$
10,430,752
$
10,451,606
Florida region:
Residential mortgage loans, mainly secured by first mortgages
$
515,264
$
505,226
Construction loans
40,865
43,969
Commercial mortgage loans
 
728,244
698,090
C&I loans
1,149,008
1,040,163
Consumer loans
5,869
7,502
Loans held for investment
$
2,439,250
$
2,294,950
Total:
Residential mortgage loans, mainly secured by first mortgages
$
2,859,158
$
2,828,431
Construction loans
245,350
228,396
Commercial mortgage loans
 
2,502,475
2,565,984
C&I loans
(1)
3,516,008
3,366,038
Consumer loans
3,747,011
3,757,707
Loans held for investment
(2)
12,870,002
12,746,556
ACL on loans and finance leases
(248,578)
(243,942)
 
Loans held for investment, net
$
12,621,424
$
12,502,614
(1)
As of June 30, 2025 and December 31, 2024, includes $
837.9
 
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 $
22.1
 
million and $
23.6
 
million as of June 30, 2025 and December 31, 2024, respectively.
Various
 
loans
 
were
 
assigned
 
as
 
collateral
 
for
 
borrowings,
 
government
 
deposits,
 
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
 
June
 
30,
 
2025
 
and
December
 
31, 2024,
 
respectively.
 
As of
 
June 30,
 
2025 and
 
December
 
31, 2024,
 
loans pledged
 
as collateral
 
include $
2.0
 
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
 
June 30,
 
2025
 
and
 
December
 
31, 2024;
 
$
161.1
million pledged
 
to secure
 
as collateral
 
for the uninsured
 
portion of
 
government deposits,
 
compared to
 
$
163.5
 
million as of
 
December
31, 2024; and $
120.5
 
million pledged to secure time deposits accounts, compared to $
123.0
 
million as of December 31, 2024
.
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
23
The Corporation’s
 
aging of
 
the loan
 
portfolio held
 
for investment,
 
as well
 
as information
 
about nonaccrual
 
loans with
 
no ACL,
 
by
portfolio classes as of June 30, 2025 and December 31, 2024 are as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2025
Days Past Due and Accruing
Current
(1)
30-59
60-89
90+
(2) (3) (4)
Nonaccrual
(5)
Total loans held
for investment
Nonaccrual
Loans with no
ACL
(6)
(In thousands)
Residential mortgage loans, mainly secured by first mortgages:
 
FHA/VA government-guaranteed
 
loans
(1)
(2) (4)
$
71,798
$
-
$
2,453
$
15,706
$
-
$
89,957
$
-
 
Conventional residential mortgage loans
(1) (3) (5)
2,708,739
-
23,731
5,941
30,790
2,769,201
3
Commercial loans:
 
Construction loans
239,632
-
-
-
5,718
245,350
956
 
Commercial mortgage loans
(1) (3) (5) (6)
2,478,530
-
156
884
22,905
2,502,475
14,459
 
C&I loans
3,492,000
2,510
293
856
20,349
3,516,008
15,856
Consumer loans:
 
Auto loans
1,975,258
58,131
10,591
-
14,009
2,057,989
464
 
Finance leases
881,242
13,224
3,481
-
3,309
901,256
111
 
Personal loans
331,160
5,540
2,731
-
1,795
341,226
-
 
Credit cards
287,685
4,028
3,123
6,148
-
300,984
-
 
Other consumer loans
140,359
2,438
1,536
-
1,223
145,556
-
 
Total loans held for investment
$
12,606,403
$
85,871
$
48,095
$
29,535
$
100,098
$
12,870,002
$
31,849
 
(1)
According to
 
the Corporation’s
 
delinquency policy and
 
consistent with the
 
instructions for the
 
preparation of the
 
Consolidated Financial
 
Statements for Bank
 
Holding Companies (FR
 
Y-9C)
 
required by
 
the Federal
Reserve Board, residential mortgage,
 
commercial mortgage, and construction
 
loans are considered past
 
due when the borrower
 
is in arrears on
 
two or more monthly
 
payments. FHA/VA
 
government-guaranteed loans,
conventional residential
 
mortgage loans,
 
and commercial
 
mortgage loans
 
past due
 
30-59 days,
 
but less than
 
two payments
 
in arrears,
 
as of
 
June 30,
 
2025 amounted
 
to $
7.8
 
million, $
57.4
 
million, and
 
$
1.5
 
million,
respectively.
(2)
It is the Corporation’s policy to report
 
delinquent Federal Housing Authority (“FHA”)/U.S. Department of Veterans
 
Affairs (“VA”)
 
government-guaranteed residential mortgage loans as past-due loans 90 days and still
accruing as
 
opposed to
 
nonaccrual loans.
 
The Corporation
 
continues accruing
 
interest on
 
these loans
 
until they
 
have passed
 
the 15-month
 
delinquency mark,
 
taking into
 
consideration the
 
FHA interest
 
curtailment
process. These balances include $
6.2
 
million of residential mortgage loans guaranteed by the FHA that were over 15 months delinquent as of June 30, 2025.
(3)
Includes purchased credit deteriorated (“PCD”) loans previously accounted
 
for under ASC Subtopic 310-30 for
 
which the Corporation elected to treat pools of
 
these loans as single assets both at the
 
time of adoption of
current expected
 
credit loss
 
(“CECL”) methodology on
 
January 1, 2020
 
and on an
 
ongoing basis for
 
credit loss measurement.
 
These loans
 
will continue to
 
be excluded
 
from nonaccrual loan
 
statistics as long
 
as the
Corporation can reasonably estimate
 
the timing and amount
 
of cash flows expected
 
to be collected on
 
the loan pools. The
 
portion of such loans
 
contractually past due 90 days
 
or more, amounting to
 
$
4.9
 
million as of
June 30, 2025 ($
4.0
 
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
 
$
5.5
 
million as
 
of June
 
30, 2025.
 
Under the
 
GNMA program,
 
the Corporation
 
has the
 
option but
 
not the
 
obligation to
repurchase loans
 
that meet
 
GNMA’s
 
specified delinquency
 
criteria. For
 
accounting purposes,
 
these loans
 
subject to
 
the repurchase
 
option are
 
required to
 
be reflected
 
on the
 
financial statements
 
with an
 
offsetting
liability.
(5)
Nonaccrual loans in
 
the Florida region amounted
 
to $
23.4
 
million as of
 
June 30, 2025, of
 
which $
12.4
 
million was a commercial
 
mortgage loan, $
10.8
 
million were residential mortgage
 
loans, and $
0.2
 
million was a
C&I loan.
(6)
Includes $
12.4
 
million related to a nonaccrual commercial mortgage loan with no ACL in the Florida region as of June 30, 2025.
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
24
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2024
Days Past Due and Accruing
Current
(1)
30-59
60-89
90+
(2) (3) (4)
Nonaccrual
(5)
Total loans held
for investment
Nonaccrual
Loans with no
ACL
(6)
(In thousands)
Residential mortgage loans, mainly secured by first mortgages:
 
FHA/VA government-guaranteed
 
loans
(1)
(2) (4)
$
70,529
$
-
$
2,907
$
18,816
$
-
$
92,252
$
-
 
Conventional residential mortgage loans
(1) (3) (5)
2,666,959
-
29,867
7,404
31,949
2,736,179
-
Commercial loans:
 
Construction loans
227,031
-
-
-
1,365
228,396
968
 
Commercial mortgage loans
(1) (3)
2,554,226
-
-
907
10,851
2,565,984
6,732
 
C&I loans
 
3,336,465
1,589
575
6,895
20,514
3,366,038
1,189
Consumer loans:
 
Auto loans
1,935,995
61,524
13,354
-
15,305
2,026,178
1,032
 
Finance leases
875,663
15,879
4,092
-
3,812
899,446
275
 
Personal loans
349,588
6,591
3,593
-
2,136
361,908
3
 
Credit cards
303,311
5,366
3,969
8,368
-
321,014
-
 
Other consumer loans
143,957
2,222
1,447
-
1,535
149,161
-
 
Total loans held for investment
$
12,463,724
$
93,171
$
59,804
$
42,390
$
87,467
$
12,746,556
$
10,199
 
(1)
According to
 
the Corporation’s
 
delinquency policy
 
and consistent
 
with the
 
instructions for
 
the preparation
 
of the
 
Consolidated Financial
 
Statements for
 
Bank Holding
 
Companies (FR
 
Y-9C)
 
required by
 
the Federal
Reserve Board, residential
 
mortgage, commercial mortgage,
 
and construction loans
 
are considered past
 
due when the
 
borrower is in
 
arrears on two
 
or more monthly
 
payments. FHA/VA
 
government-guaranteed loans,
conventional residential mortgage loans,
 
and commercial mortgage loans
 
past due 30-59 days,
 
but less than two payments
 
in arrears, as of
 
December 31, 2024 amounted to
 
$
8.8
 
million, $
65.6
 
million, and $
1.0
 
million,
respectively.
(2)
It is
 
the Corporation’s
 
policy to
 
report delinquent
 
FHA/VA
 
government-guaranteed residential
 
mortgage loans
 
as past-due
 
loans 90
 
days and
 
still accruing
 
as opposed
 
to nonaccrual
 
loans. The
 
Corporation continues
accruing interest on these
 
loans until they have
 
passed the 15-month delinquency mark,
 
taking into consideration the
 
FHA interest curtailment process.
 
These balances include $
8.0
 
million of residential mortgage
 
loans
guaranteed by the FHA that were over 15 months delinquent as of December 31, 2024.
(3)
Includes PCD loans previously accounted for under ASC Subtopic 310-30 for which the Corporation elected to treat pools of these loans as single assets both at the time of adoption of CECL on January 1, 2020 and on an
ongoing basis for credit loss measurement. These loans will
 
continue to be excluded from nonaccrual loan statistics as long
 
as the Corporation can reasonably estimate the timing and
 
amount of cash flows expected to be
collected on the loan pools. The
 
portion of such loans contractually past
 
due 90 days or more,
 
amounting to $
6.2
 
million as of December 31,
 
2024 ($
5.3
 
million conventional residential mortgage loans,
 
and $
0.9
 
million
commercial mortgage loans), is presented in the loans past due 90 days or more and still accruing category in the table above.
(4)
Include rebooked loans,
 
which were previously
 
pooled into GNMA
 
securities, amounting to
 
$
5.7
 
million as of
 
December 31, 2024.
 
Under the GNMA
 
program, the Corporation
 
has the option
 
but not the
 
obligation to
repurchase loans that meet GNMA’s
 
specified delinquency criteria. For accounting purposes, these loans subject to the repurchase option are required to be reflected on the financial statements with an offsetting liability.
(5)
Nonaccrual loans in the Florida region amounted to $
8.6
 
million as of December 31, 2024, of which $
8.5
 
million were residential mortgage loans.
(6)
There were
no
 
nonaccrual loans with no ACL in the Florida region as of December 31, 2024.
When
 
a
 
loan
 
is placed
 
in
 
nonaccrual
 
status,
 
any
 
accrued
 
but uncollected
 
interest
 
income
 
is reversed
 
and
 
charged
 
against interest
income
 
and the
 
amortization of
 
any net
 
deferred fees
 
is suspended.
 
The amount
 
of accrued
 
interest reversed
 
against interest
 
income
totaled $
0.7
 
million and $
1.6
 
million for the quarter and six-month
 
period ended June 30, 2025, respectively,
 
compared to $
0.7
 
million
and $
1.5
 
million for the same periods in 2024, respectively.
 
For the quarter and six-month period ended June 30, 2025,
 
interest income
recognized
 
on nonaccrual
 
loans amounted
 
to $
0.4
 
million and
 
$
0.7
 
million, respectively,
 
compared
 
to $
0.3
 
million and
 
$
0.9
 
million
for the same periods in 2024, respectively.
As of
 
June
 
30,
 
2025,
 
the recorded
 
investment
 
on
 
residential
 
mortgage
 
loans collateralized
 
by
 
residential
 
real
 
estate property
 
that
were in
 
the process
 
of foreclosure
 
amounted
 
to $
29.5
 
million,
 
including
 
$
7.8
 
million of
 
FHA/VA
 
government-guaranteed
 
mortgage
loans, and
 
$
3.3
 
million of
 
PCD loans
 
acquired prior
 
to the
 
adoption, on
 
January 1,
 
2020, of
 
CECL. The
 
Corporation commences
 
the
foreclosure
 
process
 
on
 
residential
 
real
 
estate
 
loans
 
when
 
a
 
borrower
 
becomes
120
 
days
 
delinquent.
 
Foreclosure
 
procedures
 
and
timelines
 
vary
 
depending
 
on
 
whether
 
the
 
property
 
is
 
located
 
in
 
a
 
judicial
 
or
 
non-judicial
 
state.
 
Occasionally,
 
foreclosures
 
may
 
be
delayed due to, among other reasons, mandatory mediations, bankruptcy,
 
court delays, and title issues.
Credit Quality Indicators:
The Corporation
 
categorizes loans
 
into risk
 
categories based
 
on relevant
 
information
 
about the
 
ability of
 
the borrowers
 
to service
their debt
 
such as
 
current financial
 
information, historical
 
payment experience,
 
credit documentation,
 
public information,
 
and current
economic
 
trends,
 
among
 
other
 
factors.
 
The
 
Corporation
 
analyzes
 
non-homogeneous
 
loans,
 
such
 
as commercial
 
mortgage,
 
C&I,
 
and
construction loans individually
 
to classify the loans’ credit
 
risk. The Corporation
 
periodically reviews its commercial
 
and construction
loans
 
to
 
evaluate
 
if
 
they
 
are
 
properly
 
classified.
 
The
 
frequency
 
of
 
these
 
reviews
 
will
 
depend
 
on
 
the
 
amount
 
of
 
the
 
aggregate
outstanding
 
debt,
 
and
 
the
 
risk
 
rating
 
classification
 
of
 
the
 
obligor.
 
In
 
addition,
 
during
 
the
 
renewal
 
and
 
annual
 
review
 
process
 
of
applicable credit facilities,
 
the Corporation evaluates
 
the corresponding loan
 
grades. The Corporation
 
uses the same definition
 
for risk
ratings as those
 
described for Puerto
 
Rico municipal bonds
 
accounted for
 
as held-to-maturity debt
 
securities, as discussed
 
in Note 3
 
–
“Debt Securities,” to the audited consolidated financial statements included
 
in the 2024 Annual Report on Form 10-K.
 
For residential mortgage and consumer loans, the Corporation evaluates
 
credit quality based on its interest accrual status.
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
25
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
 
June 30,
 
2025, the
 
gross charge
 
-offs for
 
the six-month
 
period ended
June 30,
 
2025 by
 
portfolio classes
 
and by
 
origination year,
 
and the
 
amortized cost
 
of commercial
 
and construction
 
loans by
 
portfolio
classes based on the internal credit-risk category as of December 31, 2024,
 
were as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2025
As of
December 31,
2024
Puerto Rico and Virgin Islands Region
Term Loans
Amortized Cost Basis by Origination Year
(1)
2025
2024
2023
2022
2021
Prior
Revolving
Loans
Amortized
Cost Basis
Total
Total
(In thousands)
CONSTRUCTION
 
Risk Ratings:
 
Pass
$
15,349
$
76,833
$
97,058
$
5,891
$
226
$
3,410
$
-
$
198,767
$
179,755
 
Criticized:
 
Special Mention
-
-
-
-
-
-
-
-
-
 
Substandard
-
-
4,321
-
-
1,397
-
5,718
4,672
 
Doubtful
-
-
-
-
-
-
-
-
-
 
Loss
-
-
-
-
-
-
-
-
-
 
Total construction loans
$
15,349
$
76,833
$
101,379
$
5,891
$
226
$
4,807
$
-
$
204,485
$
184,427
 
Charge-offs on construction loans
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
COMMERCIAL MORTGAGE
 
Risk Ratings:
 
Pass
$
105,992
$
318,024
$
173,721
$
341,831
$
126,242
$
645,280
$
5,642
$
1,716,732
$
1,804,876
 
Criticized:
 
Special Mention
346
-
3,313
-
-
30,166
-
33,825
37,035
 
Substandard
390
-
302
3,096
-
19,886
-
23,674
25,983
 
Doubtful
-
-
-
-
-
-
-
-
-
 
Loss
-
-
-
-
-
-
-
-
-
 
Total commercial mortgage loans
$
106,728
$
318,024
$
177,336
$
344,927
$
126,242
$
695,332
$
5,642
$
1,774,231
$
1,867,894
 
Charge-offs on commercial mortgage loans
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
C&I
 
Risk Ratings:
 
Pass
$
191,791
$
250,323
$
368,086
$
268,851
$
87,356
$
374,965
$
739,592
$
2,280,964
$
2,249,680
 
Criticized:
 
Special Mention
-
-
3,042
-
10,004
-
40,185
53,231
44,900
 
Substandard
291
124
833
3,210
13,530
7,037
7,780
32,805
31,295
 
Doubtful
-
-
-
-
-
-
-
-
-
 
Loss
-
-
-
-
-
-
-
-
-
 
Total C&I loans
$
192,082
$
250,447
$
371,961
$
272,061
$
110,890
$
382,002
$
787,557
$
2,367,000
$
2,325,875
 
Charge-offs on C&I loans
$
-
$
-
$
-
$
-
$
-
$
47
$
96
$
143
(1) Excludes accrued interest receivable.
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
26
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2025
As of
December 31,
2024
Term Loans
Florida Region
Amortized Cost Basis by Origination Year
(1)
2025
2024
2023
2022
2021
Prior
Revolving
Loans
Amortized
Cost Basis
Total
Total
(In thousands)
CONSTRUCTION
 
Risk Ratings:
 
Pass
$
-
$
20,065
$
20,800
$
-
$
-
$
-
$
-
$
40,865
$
43,969
 
Criticized:
 
Special Mention
-
-
-
-
-
-
-
-
-
 
Substandard
-
-
-
-
-
-
-
-
-
 
Doubtful
-
-
-
-
-
-
-
-
-
 
Loss
-
-
-
-
-
-
-
-
-
 
Total construction loans
$
-
$
20,065
$
20,800
$
-
$
-
$
-
$
-
$
40,865
$
43,969
 
Charge-offs on construction loans
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
COMMERCIAL MORTGAGE
 
Risk Ratings:
 
Pass
$
65,430
$
80,564
$
28,453
$
210,611
$
100,464
$
187,552
$
24,274
$
697,348
$
672,736
 
Criticized:
 
Special Mention
-
-
-
-
-
-
-
-
-
 
Substandard
-
-
-
17,704
-
13,192
-
30,896
25,354
 
Doubtful
-
-
-
-
-
-
-
-
-
 
Loss
-
-
-
-
-
-
-
-
-
 
Total commercial mortgage loans
$
65,430
$
80,564
$
28,453
$
228,315
$
100,464
$
200,744
$
24,274
$
728,244
$
698,090
 
Charge-offs on commercial mortgage loans
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
C&I
 
Risk Ratings:
 
Pass
$
70,446
$
326,597
$
176,680
$
156,867
$
124,317
$
118,558
$
175,342
$
1,148,807
$
1,029,100
 
Criticized:
 
Special Mention
-
-
-
-
-
-
-
-
11,063
 
Substandard
-
-
-
-
-
201
-
201
-
 
Doubtful
-
-
-
-
-
-
-
-
-
 
Loss
-
-
-
-
-
-
-
-
-
 
Total C&I loans
$
70,446
$
326,597
$
176,680
$
156,867
$
124,317
$
118,759
$
175,342
$
1,149,008
$
1,040,163
 
Charge-offs on C&I loans
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
(1) Excludes accrued interest receivable.
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
27
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2025
As of
December 31,
2024
Term Loans
Total
Amortized Cost Basis by Origination Year
 
(1)
2025
2024
2023
2022
2021
Prior
Revolving
Loans
Amortized
Cost Basis
Total
Total
(In thousands)
CONSTRUCTION
 
Risk Ratings:
 
Pass
$
15,349
$
96,898
$
117,858
$
5,891
$
226
$
3,410
$
-
$
239,632
$
223,724
 
Criticized:
 
Special Mention
-
-
-
-
-
-
-
-
-
 
Substandard
-
-
4,321
-
-
1,397
-
5,718
4,672
 
Doubtful
-
-
-
-
-
-
-
-
-
 
Loss
-
-
-
-
-
-
-
-
-
 
Total construction loans
$
15,349
$
96,898
$
122,179
$
5,891
$
226
$
4,807
$
-
$
245,350
$
228,396
 
Charge-offs on construction loans
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
COMMERCIAL MORTGAGE
 
Risk Ratings:
 
Pass
$
171,422
$
398,588
$
202,174
$
552,442
$
226,706
$
832,832
$
29,916
$
2,414,080
$
2,477,612
 
Criticized:
 
Special Mention
346
-
3,313
-
-
30,166
-
33,825
37,035
 
Substandard
390
-
302
20,800
-
33,078
-
54,570
51,337
 
Doubtful
-
-
-
-
-
-
-
-
-
 
Loss
-
-
-
-
-
-
-
-
-
 
Total commercial mortgage loans
$
172,158
$
398,588
$
205,789
$
573,242
$
226,706
$
896,076
$
29,916
$
2,502,475
$
2,565,984
 
Charge-offs on commercial mortgage loans
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
C&I
 
Risk Ratings:
 
Pass
$
262,237
$
576,920
$
544,766
$
425,718
$
211,673
$
493,523
$
914,934
$
3,429,771
$
3,278,780
 
Criticized:
 
Special Mention
-
-
3,042
-
10,004
-
40,185
53,231
55,963
 
Substandard
291
124
833
3,210
13,530
7,238
7,780
33,006
31,295
 
Doubtful
-
-
-
-
-
-
-
-
-
 
Loss
-
-
-
-
-
-
-
-
-
 
Total C&I loans
$
262,528
$
577,044
$
548,641
$
428,928
$
235,207
$
500,761
$
962,899
$
3,516,008
$
3,366,038
 
Charge-offs on C&I loans
$
-
$
-
$
-
$
-
$
-
$
47
$
96
$
143
(1) Excludes accrued interest receivable.
 
 
 
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
28
The following
 
tables present the
 
amortized cost of
 
residential mortgage
 
loans by portfolio
 
classes and by
 
origination year
 
based on
accrual
 
status as
 
of June
 
30,
 
2025,
 
the gross
 
charge-offs
 
for the
 
six-month
 
period ended
 
June 30,
 
2025 by
 
origination year,
 
and
 
the
amortized cost of residential mortgage loans by portfolio classes based on accrual
 
status as of December 31, 2024:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2025
As of
December 31,
2024
Term Loans
Amortized Cost Basis by Origination Year
(1)
2025
2024
2023
2022
2021
Prior
Revolving
Loans
Amortized
Cost Basis
Total
Total
(In thousands)
Puerto Rico and Virgin Islands Region:
FHA/VA government-guaranteed loans
Accrual Status:
Performing
$
-
$
276
$
1,133
$
893
$
1,262
$
85,283
$
-
$
88,847
$
91,124
Non-Performing
-
-
-
-
-
-
-
-
-
Total FHA/VA
 
government-guaranteed loans
$
-
$
276
$
1,133
$
893
$
1,262
$
85,283
$
-
$
88,847
$
91,124
Conventional residential mortgage loans
Accrual Status:
Performing
$
112,671
$
185,513
$
160,203
$
149,413
$
59,563
$
1,567,730
$
-
$
2,235,093
$
2,208,672
Non-Performing
-
-
66
492
-
19,396
-
19,954
23,409
Total conventional residential mortgage loans
$
112,671
$
185,513
$
160,269
$
149,905
$
59,563
$
1,587,126
$
-
$
2,255,047
$
2,232,081
Total
Accrual Status:
Performing
$
112,671
$
185,789
$
161,336
$
150,306
$
60,825
$
1,653,013
$
-
$
2,323,940
$
2,299,796
Non-Performing
-
-
66
492
-
19,396
-
19,954
23,409
Total residential mortgage loans
 
$
112,671
$
185,789
$
161,402
$
150,798
$
60,825
$
1,672,409
$
-
$
2,343,894
$
2,323,205
Charge-offs on residential mortgage loans
$
-
$
-
$
-
$
-
$
1
$
519
$
-
$
520
(1)
Excludes accrued interest receivable.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2025
As of
December 31,
2024
Term Loans
Amortized Cost Basis by Origination Year
(1)
2025
2024
2023
2022
2021
Prior
Revolving
Loans
Amortized
Cost Basis
Total
Total
(In thousands)
Florida Region:
FHA/VA government-guaranteed loans
Accrual Status:
Performing
$
-
$
-
$
-
$
-
$
-
$
1,110
$
-
$
1,110
$
1,128
Non-Performing
-
-
-
-
-
-
-
-
-
Total FHA/VA
 
government-guaranteed loans
$
-
$
-
$
-
$
-
$
-
$
1,110
$
-
$
1,110
$
1,128
Conventional residential mortgage loans
Accrual Status:
Performing
$
35,814
$
86,069
$
81,568
$
66,074
$
39,460
$
194,333
$
-
$
503,318
$
495,558
Non-Performing
-
-
1,226
1,907
-
7,703
-
10,836
8,540
Total conventional residential mortgage loans
$
35,814
$
86,069
$
82,794
$
67,981
$
39,460
$
202,036
$
-
$
514,154
$
504,098
Total
Accrual Status:
Performing
$
35,814
$
86,069
$
81,568
$
66,074
$
39,460
$
195,443
$
-
$
504,428
$
496,686
Non-Performing
-
-
1,226
1,907
-
7,703
-
10,836
8,540
Total residential mortgage loans
$
35,814
$
86,069
$
82,794
$
67,981
$
39,460
$
203,146
$
-
$
515,264
$
505,226
Charge-offs on residential mortgage loans
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
(1)
Excludes accrued interest receivable.
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
29
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2025
As of
December 31,
2024
Term Loans
Amortized Cost Basis by Origination Year
(1)
2025
2024
2023
2022
2021
Prior
Revolving
Loans
Amortized
Cost Basis
Total
Total
(In thousands)
Total:
FHA/VA government-guaranteed loans
Accrual Status:
Performing
$
-
$
276
$
1,133
$
893
$
1,262
$
86,393
$
-
$
89,957
$
92,252
Non-Performing
-
-
-
-
-
-
-
-
-
Total FHA/VA
 
government-guaranteed loans
$
-
$
276
$
1,133
$
893
$
1,262
$
86,393
$
-
$
89,957
$
92,252
Conventional residential mortgage loans
Accrual Status:
Performing
$
148,485
$
271,582
$
241,771
$
215,487
$
99,023
$
1,762,063
$
-
$
2,738,411
$
2,704,230
Non-Performing
-
-
1,292
2,399
-
27,099
-
30,790
31,949
Total conventional residential mortgage loans
$
148,485
$
271,582
$
243,063
$
217,886
$
99,023
$
1,789,162
$
-
$
2,769,201
$
2,736,179
Total
Accrual Status:
Performing
$
148,485
$
271,858
$
242,904
$
216,380
$
100,285
$
1,848,456
$
-
$
2,828,368
$
2,796,482
Non-Performing
-
-
1,292
2,399
-
27,099
-
30,790
31,949
Total residential mortgage loans
$
148,485
$
271,858
$
244,196
$
218,779
$
100,285
$
1,875,555
$
-
$
2,859,158
$
2,828,431
Charge-offs on residential mortgage loans
$
-
$
-
$
-
$
-
$
1
$
519
$
-
$
520
(1)
Excludes accrued interest receivable.
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
30
The
 
following
 
tables present
 
the
 
amortized
 
cost
 
of
 
consumer
 
loans
 
by
 
portfolio
 
classes
 
and
 
by
 
origination
 
year
 
based on
 
accrual
status as of
 
June 30, 2025,
 
the gross charge
 
-offs for
 
the six-month period
 
ended June 30,
 
2025 by portfolio
 
classes and by
 
origination
year, and the amortized cost of consumer loans
 
by portfolio classes based on accrual status as of December 31, 2024:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2025
As of
December 31,
2024
Term Loans
Amortized Cost Basis by Origination Year
(1)
2025
2024
2023
2022
2021
Prior
Revolving
Loans
Amortized
Cost Basis
Total
Total
(In thousands)
Puerto Rico and Virgin Islands Region:
Auto loans
Accrual Status:
Performing
$
325,017
$
573,183
$
443,551
$
340,593
$
222,562
$
139,017
$
-
$
2,043,923
$
2,010,690
Non-Performing
188
1,919
3,293
2,830
2,426
3,352
-
14,008
15,295
Total auto loans
$
325,205
$
575,102
$
446,844
$
343,423
$
224,988
$
142,369
$
-
$
2,057,931
$
2,025,985
Charge-offs on auto loans
$
103
$
2,981
$
5,984
$
3,674
$
1,778
$
1,668
$
-
$
16,188
Finance leases
Accrual Status:
Performing
$
122,329
$
232,756
$
237,739
$
167,135
$
94,413
$
43,575
$
-
$
897,947
$
895,634
Non-Performing
67
226
802
853
413
948
-
3,309
3,812
Total finance leases
$
122,396
$
232,982
$
238,541
$
167,988
$
94,826
$
44,523
$
-
$
901,256
$
899,446
Charge-offs on finance leases
$
19
$
615
$
2,462
$
1,805
$
554
$
647
$
-
$
6,102
Personal loans
Accrual Status:
Performing
$
56,027
$
107,297
$
91,876
$
57,082
$
12,689
$
14,282
$
-
$
339,253
$
358,033
Non-Performing
22
368
584
615
64
142
-
1,795
2,136
Total personal loans
$
56,049
$
107,665
$
92,460
$
57,697
$
12,753
$
14,424
$
-
$
341,048
$
360,169
Charge-offs on personal loans
$
20
$
2,007
$
4,497
$
2,779
$
568
$
715
$
-
$
10,586
Credit cards
Accrual Status:
Performing
$
-
$
-
$
-
$
-
$
-
$
-
$
300,984
$
300,984
$
321,014
Non-Performing
-
-
-
-
-
-
-
-
-
Total credit cards
$
-
$
-
$
-
$
-
$
-
$
-
$
300,984
$
300,984
$
321,014
Charge-offs on credit cards
$
-
$
-
$
-
$
-
$
-
$
-
$
11,610
$
11,610
Other consumer loans
Accrual Status:
Performing
$
37,369
$
45,292
$
26,783
$
12,635
$
3,386
$
4,981
$
8,271
$
138,717
$
142,091
Non-Performing
50
458
264
122
32
170
110
1,206
1,500
Total other consumer loans
$
37,419
$
45,750
$
27,047
$
12,757
$
3,418
$
5,151
$
8,381
$
139,923
$
143,591
Charge-offs on other consumer loans
$
55
$
3,293
$
2,583
$
961
$
246
$
142
$
290
$
7,570
Total
Accrual Status:
Performing
$
540,742
$
958,528
$
799,949
$
577,445
$
333,050
$
201,855
$
309,255
$
3,720,824
$
3,727,462
Non-Performing
327
2,971
4,943
4,420
2,935
4,612
110
20,318
22,743
Total consumer loans
 
$
541,069
$
961,499
$
804,892
$
581,865
$
335,985
$
206,467
$
309,365
$
3,741,142
$
3,750,205
Charge-offs on total consumer loans
$
197
$
8,896
$
15,526
$
9,219
$
3,146
$
3,172
$
11,900
$
52,056
(1)
Excludes accrued interest receivable.
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
31
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2025
As of
December 31,
2024
Term Loans
Amortized Cost Basis by Origination Year
(1)
2025
2024
2023
2022
2021
Prior
Revolving
Loans
Amortized
Cost Basis
Total
Total
(In thousands)
Florida Region:
Auto loans
Accrual Status:
Performing
$
-
$
-
$
-
$
-
$
-
$
57
$
-
$
57
$
183
Non-Performing
-
-
-
-
-
1
-
1
10
Total auto loans
$
-
$
-
$
-
$
-
$
-
$
58
$
-
$
58
$
193
Charge-offs on auto loans
$
-
$
-
$
-
$
-
$
-
$
20
$
-
$
20
Finance leases
Accrual Status:
Performing
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Non-Performing
-
-
-
-
-
-
-
-
-
Total finance leases
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Charge-offs on finance leases
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Personal loans
Accrual Status:
Performing
$
-
$
135
$
43
$
-
$
-
$
-
$
-
$
178
$
1,739
Non-Performing
-
-
-
-
-
-
-
-
-
Total personal loans
$
-
$
135
$
43
$
-
$
-
$
-
$
-
$
178
$
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
$
484
$
1,176
$
-
$
-
$
211
$
2,021
$
1,724
$
5,616
$
5,535
Non-Performing
-
-
-
-
-
14
3
17
35
Total other consumer loans
$
484
$
1,176
$
-
$
-
$
211
$
2,035
$
1,727
$
5,633
$
5,570
Charge-offs on other consumer loans
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Total
Accrual Status:
Performing
$
484
$
1,311
$
43
$
-
$
211
$
2,078
$
1,724
$
5,851
$
7,457
Non-Performing
-
-
-
-
-
15
3
18
45
Total consumer loans
$
484
$
1,311
$
43
$
-
$
211
$
2,093
$
1,727
$
5,869
$
7,502
Charge-offs on total consumer loans
$
-
$
-
$
-
$
-
$
-
$
20
$
-
$
20
(1)
Excludes accrued interest receivable.
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
32
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2025
As of
December 31,
2024
Term Loans
Amortized Cost Basis by Origination Year
(1)
2025
2024
2023
2022
2021
Prior
Revolving
Loans
Amortized
Cost Basis
Total
Total
(In thousands)
Total:
Auto loans
Accrual Status:
Performing
$
325,017
$
573,183
$
443,551
$
340,593
$
222,562
$
139,074
$
-
$
2,043,980
$
2,010,873
Non-Performing
188
1,919
3,293
2,830
2,426
3,353
-
14,009
15,305
Total auto loans
$
325,205
$
575,102
$
446,844
$
343,423
$
224,988
$
142,427
$
-
$
2,057,989
$
2,026,178
Charge-offs on auto loans
$
103
$
2,981
$
5,984
$
3,674
$
1,778
$
1,688
$
-
$
16,208
Finance leases
Accrual Status:
Performing
$
122,329
$
232,756
$
237,739
$
167,135
$
94,413
$
43,575
$
-
$
897,947
$
895,634
Non-Performing
67
226
802
853
413
948
-
3,309
3,812
Total finance leases
$
122,396
$
232,982
$
238,541
$
167,988
$
94,826
$
44,523
$
-
$
901,256
$
899,446
Charge-offs on finance leases
$
19
$
615
$
2,462
$
1,805
$
554
$
647
$
-
$
6,102
Personal loans
Accrual Status:
Performing
$
56,027
$
107,432
$
91,919
$
57,082
$
12,689
$
14,282
$
-
$
339,431
$
359,772
Non-Performing
22
368
584
615
64
142
-
1,795
2,136
Total personal loans
$
56,049
$
107,800
$
92,503
$
57,697
$
12,753
$
14,424
$
-
$
341,226
$
361,908
Charge-offs on personal loans
$
20
$
2,007
$
4,497
$
2,779
$
568
$
715
$
-
$
10,586
Credit cards
Accrual Status:
Performing
$
-
$
-
$
-
$
-
$
-
$
-
$
300,984
$
300,984
$
321,014
Non-Performing
-
-
-
-
-
-
-
-
-
Total credit cards
$
-
$
-
$
-
$
-
$
-
$
-
$
300,984
$
300,984
$
321,014
Charge-offs on credit cards
$
-
$
-
$
-
$
-
$
-
$
-
$
11,610
$
11,610
Other consumer loans
Accrual Status:
Performing
$
37,853
$
46,468
$
26,783
$
12,635
$
3,597
$
7,002
$
9,995
$
144,333
$
147,626
Non-Performing
50
458
264
122
32
184
113
1,223
1,535
Total other consumer loans
$
37,903
$
46,926
$
27,047
$
12,757
$
3,629
$
7,186
$
10,108
$
145,556
$
149,161
Charge-offs on other consumer loans
$
55
$
3,293
$
2,583
$
961
$
246
$
142
$
290
$
7,570
Total
Accrual Status:
Performing
$
541,226
$
959,839
$
799,992
$
577,445
$
333,261
$
203,933
$
310,979
$
3,726,675
$
3,734,919
Non-Performing
327
2,971
4,943
4,420
2,935
4,627
113
20,336
22,788
Total consumer loans
$
541,553
$
962,810
$
804,935
$
581,865
$
336,196
$
208,560
$
311,092
$
3,747,011
$
3,757,707
Charge-offs on total consumer loans
$
197
$
8,896
$
15,526
$
9,219
$
3,146
$
3,192
$
11,900
$
52,076
(1)
Excludes accrued interest receivable.
As of June 30, 2025 and December 31, 2024, the balance of revolving loans
 
converted to term loans was
no
t material.
Accrued
 
interest
 
receivable
 
on
 
loans
 
totaled
 
$
58.9
 
million
 
as
 
of
 
June
 
30,
 
2025
 
($
58.2
 
million
 
as
 
of
 
December
 
31,
 
2024),
 
was
reported as part
 
of accrued interest receivable
 
on loans and
 
investment securities in
 
the consolidated statements
 
of financial condition,
and is excluded from the estimate of credit losses.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
33
The
 
following
 
tables
 
present
 
information
 
about
 
collateral
 
dependent
 
loans
 
that
 
were
 
individually
 
evaluated
 
for
 
purposes
 
of
determining the ACL as of June 30, 2025 and December 31, 2024
:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2025
Collateral Dependent Loans -
With Allowance
Collateral Dependent
Loans - With No
Related Allowance
Collateral Dependent Loans - Total
Amortized Cost
 
Related
Allowance
Amortized Cost
Amortized Cost
 
Related
Allowance
(In thousands)
Residential mortgage loans:
Conventional residential mortgage loans
$
24,914
$
1,213
$
-
$
24,914
$
1,213
Commercial loans:
Construction loans
4,321
627
956
5,277
627
Commercial mortgage loans
4,454
128
32,894
37,348
128
C&I loans
 
-
-
15,856
15,856
-
Consumer loans:
Personal loans
28
2
-
28
2
Other consumer loans
-
-
-
-
-
$
33,717
$
1,970
$
49,706
$
83,423
$
1,970
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
June
 
30,
 
2025
 
was
71
%,
compared
 
to
68
% as
 
of December
 
31, 2024,
 
driven by
 
the inflow
 
of a
 
$
4.3
 
million
 
nonaccrual
 
construction
 
loan in
 
the Puerto
 
Rico
region with a
 
loan-to-value ratio of
114
% and the
 
refinancing at market
 
terms of a
 
$
37.7
 
million commercial mortgage
 
relationship in
the
 
Puerto
 
Rico
 
region
 
with
 
a
 
loan-to-value
 
ratio
 
of
66
%,
 
partially
 
offset
 
by
 
the
 
inflow
 
of
 
a
 
$
12.5
 
million
 
nonaccrual
 
commercial
mortgage loan in the Florida region with a loan-to-value ratio of
42
%.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
34
Purchases and Sales of Loans
In
 
the
 
ordinary
 
course
 
of
 
business,
 
the
 
Corporation
 
enters
 
into
 
securitization
 
transactions
 
and
 
whole
 
loan
 
sales
 
with
 
GNMA
 
and
GSEs, such
 
as FNMA
 
and FHLMC.
 
During the
 
first six
 
months of
 
2025, loans
 
pooled into
 
GNMA MBS
 
amounted to
 
approximately
$
86.2
 
million, compared to
 
$
59.9
 
million, for the
 
first six months
 
of 2024, for
 
which the Corporation
 
recognized a net
 
gain on sale
 
of
$
3.0
 
million and
 
$
2.3
 
million, respectively.
 
Also, during
 
the first
 
six months
 
of 2025
 
and 2024,
 
the Corporation
 
sold approximately
$
6.8
 
million and $
15.1
 
million, respectively,
 
of performing residential
 
mortgage loans to
 
GSEs, for which
 
the Corporation recognized
a
 
net
 
gain
 
on
 
sale
 
of
 
$
0.3
 
million
 
for
 
each
 
of
 
those
 
periods.
 
The
 
Corporation’s
 
continuing
 
involvement
 
with
 
the
 
loans
 
that
 
it
 
sells
consists
 
primarily
 
of
 
servicing
 
the
 
loans.
 
In
 
addition,
 
the
 
Corporation
 
agrees
 
to
 
repurchase
 
loans
 
if
 
it
 
breaches
 
any
 
of
 
the
representations
 
and
 
warranties
 
included
 
in
 
the
 
sale
 
agreement.
 
These
 
representations
 
and
 
warranties
 
are
 
consistent
 
with
 
the
 
GSEs’
selling and servicing guidelines (
i.e.
, ensuring that the mortgage was properly underwritten according to established
 
guidelines).
For loans
 
pooled into
 
GNMA MBS,
 
the Corporation,
 
as servicer,
 
holds an
 
option to
 
repurchase individual
 
delinquent loans
 
issued
on or after
 
January 1, 2003,
 
when certain delinquency
 
criteria are met. This
 
option gives the
 
Corporation the unilateral
 
ability,
 
but not
the obligation, to
 
repurchase the delinquent
 
loans at par without
 
prior authorization from
 
GNMA. Since the
 
Corporation is considered
to
 
have
 
regained
 
effective
 
control
 
over
 
the
 
loans,
 
it
 
is
 
required
 
to
 
recognize
 
the
 
loans
 
and
 
a
 
corresponding
 
repurchase
 
liability
regardless of
 
its intent
 
to repurchase
 
the loans.
 
As of
 
June 30,
 
2025 and
 
December 31,
 
2024, rebooked
 
GNMA delinquent
 
loans that
were included in the residential mortgage loan portfolio amounted
 
to $
5.5
 
million and $
5.7
 
million, respectively.
During the first
 
six months of 2025
 
and 2024, the Corporation
 
repurchased, pursuant to
 
the aforementioned repurchase
 
option, $
1.0
million
 
and
 
$
0.9
 
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 loan’s
 
interest rate,
 
and the interest
 
payments reimbursed
 
by FHA, which
 
are
computed
 
at a
 
pre-determined
 
debenture
 
rate.
 
Repurchases
 
of GNMA
 
loans allow
 
the
 
Corporation,
 
among
 
other
 
things, to
 
maintain
acceptable
 
delinquency
 
rates
 
on
 
outstanding
 
GNMA
 
pools
 
and
 
remain
 
as
 
a
 
seller
 
and
 
servicer
 
in
 
good
 
standing
 
with
 
GNMA.
Historically, losses
 
on these repurchases of
 
GNMA delinquent loans have
 
been immaterial and no provision has
 
been made at the time
of sale.
Loan sales to FNMA and FHLMC are without recourse in relation
 
to the future performance of the loans.
 
The Corporation’s risk of
loss
 
with
 
respect
 
to
 
these
 
loans
 
is
 
also
 
minimal
 
as
 
these
 
repurchased
 
loans
 
are
 
generally
 
performing
 
loans
 
with
 
documentation
deficiencies.
During the first
 
six months of 2025,
 
the Corporation purchased
 
C&I loan participations
 
in the Florida region
 
totaling $
72.7
 
million.
Meanwhile,
 
during
 
the
 
first
 
six
 
months
 
of
 
2024,
 
the
 
Corporation
 
purchased
 
commercial
 
loan
 
participations
 
in
 
the
 
Florida
 
region
totaling $
79.1
 
million, which consisted
 
of approximately $
13.7
 
million in the
 
commercial mortgage portfolio
 
and $
65.4
 
million in the
C&I portfolio.
During the first
 
six months of 2025
 
and 2024, the Corporation
 
recognized recoveries of
 
$
2.4
 
million and $
9.5
 
million, respectively,
from the
 
bulk sales
 
of fully
 
charged-off
 
consumer loans
 
and finance
 
leases. These
 
recoveries are
 
net of
 
a repurchase
 
liability of
 
$
0.1
million and $
0.5
 
million, respectively, during
 
such periods.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
35
 
 
 
Loan Portfolio Concentration
The Corporation’s
 
primary
 
lending area
 
is Puerto
 
Rico. The
 
Corporation’s
 
banking subsidiary,
 
FirstBank, also
 
lends in
 
the USVI
and the BVI markets and
 
in the United States (principally
 
in the state of Florida).
 
Of the total gross loans held
 
for investment portfolio
of $
12.9
 
billion as of
 
June 30, 2025,
 
credit risk concentration
 
was approximately
77
% in Puerto
 
Rico,
19
% in the
 
U.S., and
4
% in the
USVI and the BVI.
As
 
of
 
June
 
30,
 
2025,
 
the
 
Corporation
 
had
 
$
191.3
 
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
 
June
 
30,
 
2025,
 
approximately
$
132.2
 
million
 
consisted
 
of
 
loans
 
extended
 
to
 
municipalities
 
in
 
Puerto
 
Rico
 
that
 
are
 
general
 
obligations
 
supported
 
by
 
assigned
property
 
tax
 
revenues,
 
and $
21.5
 
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
 
Corporation’s
 
loan
 
portfolio
 
are
 
independent
 
of
 
budgetary
 
subsidies
provided
 
by
 
the
 
Puerto
 
Rico
 
central
 
government.
 
These
 
municipalities
 
are
 
required
 
by
 
law
 
to
 
levy
 
special
 
property
 
taxes
 
in
 
such
amounts
 
as
 
are
 
required
 
to
 
satisfy
 
the
 
payment
 
of
 
all
 
of
 
their
 
respective
 
general
 
obligation
 
bonds
 
and
 
notes.
 
In
 
addition
 
to
 
loans
extended to
 
municipalities, the
 
Corporation’s
 
exposure to
 
the Puerto
 
Rico government
 
as of
 
June 30,
 
2025 included
 
$
8.7
 
million in
 
a
loan granted to
 
an affiliate of
 
the Puerto Rico
 
Electric Power Authority
 
(“PREPA”)
 
and $
28.9
 
million in loans
 
to a public corporation
of the Puerto Rico government.
Moreover,
 
as of June 30, 2025, the outstanding balance of construction
 
loans funded through conduit financing structures to support
the
 
federal
 
programs
 
of
 
Low-Income
 
Housing
 
Tax
 
Credit
 
(“LIHTC”)
 
combined
 
with
 
other
 
federal
 
programs
 
amounted
 
to
 
$
69.7
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
 
June 30, 2025, the Corporation
 
had $
69.8
 
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 June 30,
 
2025, the Corporation
 
had
$
129.2
 
million in
loans to
 
USVI government
 
public corporations,
 
compared to
 
$
100.4
 
million as
 
of December
 
31, 2024.
 
As of
 
June 30, 2025,
 
all loans
were currently performing and up to date on principal and interest payments.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
36
Loss Mitigation Program for Borrowers Experiencing
 
Financial Difficulty
The Corporation provides assistance to
 
its customers through a loss mitigation
 
program. Depending upon the
 
nature of a borrower’s
financial
 
condition,
 
restructurings
 
or
 
loan
 
modifications
 
through
 
this
 
program
 
are
 
provided,
 
as
 
well
 
as
 
other
 
restructurings
 
of
individual
 
C&I,
 
commercial
 
mortgage,
 
construction,
 
and
 
residential
 
mortgage
 
loans.
 
The
 
Corporation
 
may
 
also
 
modify
 
contractual
terms to comply with regulations regarding the treatment of certain bankruptcy
 
filings and discharge situations.
The
 
loan
 
modifications
 
granted
 
to
 
borrowers
 
experiencing
 
financial
 
difficulty
 
that
 
are
 
associated
 
with
 
payment
 
delays
 
typically
include the following:
-
Forbearance plans –
 
Payments of either interest
 
and/or principal are
 
deferred for a pre-established
 
period of time, generally
 
not
exceeding
 
six
 
months
 
in
 
any
 
given
 
year.
 
The
 
deferred
 
interest
 
and/or
 
principal
 
is
 
repaid
 
as
 
either
 
a
 
lump
 
sum
 
payment
 
at
maturity date or by extending the loan’s
 
maturity date by the number of forbearance months granted.
 
-
Payment
 
plans
 
–
 
Borrowers
 
are
 
allowed
 
to
 
pay
 
the
 
regular
 
monthly
 
payment
 
plus
 
the
 
pre-established
 
delinquent
 
amounts
during a period generally not exceeding
 
six months.
 
At the end of the payment plan, the
 
borrower is required to resume making
its regularly scheduled loan payments.
-
Trial
 
modifications
 
–
 
These
 
types
 
of
 
loan
 
modifications
 
are granted
 
for
 
residential
 
mortgage
 
loans
 
and
 
home
 
equity
 
lines of
credit. Borrowers
 
continue making reduced monthly
 
payments during the
 
trial period, which is
 
generally up to six
 
months. The
reduced
 
payments
 
that
 
are
 
made
 
by
 
the
 
borrower
 
during
 
the
 
trial
 
period
 
will
 
result
 
in
 
a
 
payment
 
delay
 
with
 
respect
 
to
 
the
original contractual terms of
 
the loan since the loan has
 
not yet been contractually
 
modified. After successful completion
 
of the
trial period, the mortgage loan is contractually modified.
Modifications
 
in
 
the
 
form
 
of
 
a
 
reduction
 
in
 
interest
 
rate,
 
term
 
extension,
 
an
 
other-than-insignificant
 
payment
 
delay,
 
or
 
any
combination
 
of
 
these
 
types
 
of
 
loan
 
modifications
 
that
 
have
 
occurred
 
in
 
the
 
current
 
reporting
 
period
 
for
 
a
 
borrower
 
experiencing
financial
 
difficulty
 
are
 
disclosed
 
in
 
the
 
tables
 
below.
 
Many
 
factors
 
are
 
considered
 
when
 
evaluating
 
whether
 
there
 
is
 
an
 
other-than-
insignificant
 
payment
 
delay,
 
such as
 
the significance
 
of the
 
restructured
 
payment
 
amount relative
 
to the
 
unpaid
 
principal balance
 
or
collateral value of the loan or the relative significance of the delay to
 
the original loan terms.
The
 
below
 
disclosures
 
relate
 
to
 
loan
 
modifications
 
granted
 
to
 
borrowers
 
experiencing
 
financial
 
difficulty
 
in
 
which
 
there
 
was
 
a
change
 
in
 
the
 
timing
 
and/or
 
amount
 
of
 
contractual
 
cash
 
flows
 
in
 
the
 
form
 
of
 
any
 
of
 
the
 
aforementioned
 
types
 
of
 
modifications,
including
 
restructurings
 
that
 
resulted
 
in
 
a
 
more-than-insignificant
 
payment
 
delay.
 
These
 
disclosures
 
exclude
 
$
1.8
 
million
 
and
 
$
3.0
million in restructured residential
 
mortgage loans that are
 
government-guaranteed (e.g.,
 
FHA/VA
 
loans) and were modified
 
during the
quarter
 
and
 
six-month
 
period
 
ended
 
June
 
30,
 
2025,
 
compared
 
to
 
$
2.3
 
million
 
and
 
$
3.8
 
million,
 
respectively,
 
for
 
the
 
comparable
periods in 2024.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
37
The following
 
tables present
 
the amortized
 
cost basis
 
as of
 
June 30,
 
2025 and
 
2024
 
of loans
 
modified
 
to borrowers
 
experiencing
financial
 
difficulty
 
during
 
the
 
quarters
 
and
 
six-month
 
periods
 
ended
 
June
 
30,
 
2025
 
and
 
2024,
 
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:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended June 30, 2025
Payment Delay Only
Forbearance
Trial
Modification
Change in
Amortization
term
Interest Rate
Reduction
Term
Extension
Combination
of Interest
Rate
Reduction and
Term
Extension
Other
Total
Percentage
of Total by
Portfolio
Classes
(In thousands)
Conventional residential mortgage loans
$
-
$
391
$
-
$
-
$
-
$
-
$
-
$
391
0.01%
Construction loans
-
-
-
-
-
-
-
-
-
Commercial mortgage loans
-
-
30,166
-
283
-
-
30,449
1.22%
C&I loans
-
-
-
-
-
81
17
(1)
98
0.00%
Consumer loans:
Auto loans
-
-
-
-
95
83
954
(1)
1,132
0.06%
Personal loans
-
-
-
-
68
147
-
215
0.06%
Credit cards
-
-
-
1,474
(2)
-
-
-
1,474
0.49%
Other consumer loans
-
123
-
-
22
23
30
(1)
198
0.14%
 
Total modifications
$
-
$
514
$
30,166
$
1,474
$
468
$
334
$
1,001
$
33,957
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended June 30, 2024
Payment Delay Only
Forbearance
Trial
Modification
Change in
Amortization
Term
Interest Rate
Reduction
Term
Extension
Combination
of Interest
Rate
Reduction and
Term
Extension
Other
Total
Percentage of
Total by
Portfolio
Classes
(In thousands)
Conventional residential mortgage loans
$
-
$
407
$
-
$
-
$
25
$
3
$
-
$
435
0.02%
Construction loans
-
-
-
-
-
-
-
-
-
Commercial mortgage loans
-
-
-
-
115,981
-
-
115,981
4.79%
C&I loans
-
-
-
-
-
-
-
-
-
Consumer loans:
Auto loans
-
-
-
-
134
81
933
(1)
1,148
0.06%
Personal loans
-
-
-
-
-
89
-
89
0.02%
Credit cards
-
-
-
890
(2)
-
-
-
890
0.28%
Other consumer loans
-
-
-
-
165
132
20
(1)
317
0.21%
 
Total modifications
$
-
$
407
$
-
$
890
$
116,305
$
305
$
953
$
118,860
 
 
 
 
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
38
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six-Month Period Ended June 30, 2025
Payment Delay Only
Forbearance
Trial
Modification
Change in
Amortization
Term
Interest Rate
Reduction
Term
Extension
Combination
of Interest
Rate
Reduction and
Term
Extension
Other
Total
Percentage of
Total by
Portfolio
Classes
(In thousands)
Conventional residential mortgage loans
$
-
$
442
$
-
$
-
$
115
$
-
$
-
$
557
0.02%
Construction loans
-
-
-
-
-
-
-
-
-
Commercial mortgage loans
-
-
30,166
-
283
-
-
30,449
1.22%
C&I loans
201
(3)
-
-
19
(2)
328
81
17
(1)
646
0.02%
Consumer loans:
Auto loans
-
-
-
-
262
133
1,640
(1)
2,035
0.10%
Personal loans
-
-
-
-
74
231
-
305
0.09%
Credit cards
-
-
-
2,334
(2)
-
-
-
2,334
0.78%
Other consumer loans
-
123
-
-
88
75
30
(1)
316
0.22%
 
Total modifications
$
201
$
565
$
30,166
$
2,353
$
1,150
$
520
$
1,687
$
36,642
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six-Month Period Ended June 30, 2024
Payment Delay Only
Forbearance
Trial
Modification
Change in
Amortization
Term
Interest Rate
Reduction
Term
Extension
Combination
of Interest
Rate
Reduction and
Term
Extension
Other
Total
Percentage of
Total by
Portfolio
Classes
(In thousands)
Conventional residential mortgage loans
$
-
$
869
$
-
$
-
$
25
$
80
$
-
$
974
0.03%
Construction loans
-
-
-
-
-
-
-
-
-
Commercial mortgage loans
-
-
-
-
115,981
-
-
115,981
4.79%
C&I loans
-
-
-
12
(2)
-
-
-
12
0.00%
Consumer loans:
Auto loans
-
-
-
-
300
171
1,926
(1)
2,397
0.12%
Personal loans
-
-
-
-
13
102
-
115
0.03%
Credit cards
-
-
-
1,406
(2)
-
-
-
1,406
0.44%
Other consumer loans
-
-
-
-
303
139
38
(1)
480
0.32%
 
Total modifications
$
-
$
869
$
-
$
1,418
$
116,622
$
492
$
1,964
$
121,365
(1)
Modification consists of court mandated reduction to 0% interest rate for remaining loan term to borrowers in bankruptcy proceedings unless dismissal occurs.
(2)
Modification consists of reduction in interest rate and revocation of revolving utilization privileges.
(3)
Modification consists of a six-month deferral of principal and interest to be repaid on or before the end of the forbearance
 
plan.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
39
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The
 
following
 
tables
 
present
 
by
 
portfolio
 
classes
 
the
 
financial
 
effects
 
of
 
the
 
modifications
 
granted
 
to
 
borrowers
 
experiencing
financial difficulty,
 
other than those associated to
 
payment delay,
 
during the quarters and
 
six-month periods ended
 
June 30, 2025 and
2024. The financial
 
effects of the
 
modifications associated to
 
payment delay were
 
discussed above and,
 
as such, were
 
excluded from
the tables below:
Quarter Ended June 30, 2025
Combination of Interest Rate Reduction
and Term Extension
Weighted-Average
Interest Rate
Reduction (%)
Weighted-Average
Term Extension (in
months)
Weighted-Average
Interest Rate
Reduction (%)
Weighted-Average
Term Extension (in
months)
Change in
Amortization Term
Conventional residential mortgage loans
-
%
-
-
%
-
$
-
Construction loans
-
%
-
-
%
-
-
Commercial mortgage loans
-
%
60
-
%
-
36
C&I loans
-
%
-
0.50
%
120
-
Consumer loans:
Auto loans
-
%
22
3.55
%
19
-
Personal loans
-
%
22
4.90
%
22
-
Credit cards
15.72
%
-
-
%
-
-
Other consumer loans
-
%
31
2.97
%
25
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended June 30, 2024
Combination of Interest Rate Reduction
and Term Extension
Weighted-Average
Interest Rate
Reduction (%)
Weighted-Average
Term Extension (in
months)
Weighted-Average
Interest Rate
Reduction (%)
Weighted-Average
Term Extension (in
months)
Change in
Amortization Term
Conventional residential mortgage loans
-
%
236
0.50
%
256
$
-
Construction loans
-
%
-
-
%
-
-
Commercial mortgage loans
-
%
96
-
%
-
-
C&I loans
-
%
-
-
%
-
-
Consumer loans:
Auto loans
-
%
21
3.29
%
28
-
Personal loans
-
%
-
2.99
%
19
-
Credit cards
17.55
%
-
-
%
-
-
Other consumer loans
-
%
26
3.34
%
17
-
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
40
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six-Month Period Ended June 30, 2025
Combination of Interest Rate Reduction
and Term Extension
Weighted-Average
Interest Rate
Reduction (%)
Weighted-Average
Term Extension (in
months)
Weighted-Average
Interest Rate
Reduction (%)
Weighted-Average
Term Extension (in
months)
Change in
Amortization Term
Conventional residential mortgage loans
-
%
66
-
%
-
-
Construction loans
-
%
-
-
%
-
-
Commercial mortgage loans
-
%
60
-
%
-
36
C&I loans
14.22
%
120
0.50
%
120
-
Consumer loans:
Auto loans
-
%
24
2.91
%
18
-
Personal loans
-
%
23
4.49
%
22
-
Credit cards
15.79
%
-
-
%
-
-
Other consumer loans
-
%
27
3.25
%
21
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six-Month Period Ended June 30, 2024
Combination of Interest Rate Reduction
and Term Extension
Weighted-Average
Interest Rate
Reduction (%)
Weighted-Average
Term Extension (in
months)
Weighted-Average
Interest Rate
Reduction (%)
Weighted-Average
Term Extension (in
months)
Change in
Amortization Term
Conventional residential mortgage loans
-
%
236
3.50
%
36
-
Construction loans
-
%
-
-
%
-
-
Commercial mortgage loans
-
%
96
-
%
-
-
C&I loans
13.00
%
-
-
%
-
-
Consumer loans:
Auto loans
-
%
26
2.57
%
28
-
Personal loans
-
%
25
3.44
%
17
-
Credit cards
17.11
%
-
-
%
-
-
Other consumer loans
-
%
24
3.31
%
17
-
 
 
 
 
 
 
 
 
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
41
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following tables
 
present by portfolio
 
classes the performance
 
of loans modified
 
during the last
 
twelve months ended
 
June 30,
2025 and 2024 that were granted to borrowers experiencing financial difficulty:
Last Twelve Months Ended June 30, 2025
30-59
60-89
90+
Total
Delinquency
Current
Total
(In thousands)
Conventional residential mortgage loans
$
-
$
-
$
-
$
-
$
819
$
819
Construction loans
-
-
-
-
118
118
Commercial mortgage loans
283
-
-
283
42,496
42,779
C&I loans
9
-
6
15
10,420
10,435
Consumer loans:
Auto loans
44
54
290
388
3,159
3,547
Personal loans
33
-
-
33
376
409
Credit cards
273
175
106
554
3,007
3,561
Other consumer loans
34
20
8
62
467
529
 
Total modifications
$
676
$
249
$
410
$
1,335
$
60,862
$
62,197
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Last Twelve Months Ended June 30, 2024
30-59
60-89
90+
Total
Delinquency
Current
Total
(In thousands)
Conventional residential mortgage loans
$
-
$
-
$
-
$
-
$
1,424
$
1,424
Construction loans
-
-
-
-
-
-
Commercial mortgage loans
-
-
-
-
118,190
118,190
C&I loans
-
-
-
-
186
186
Consumer loans:
Auto loans
50
28
145
223
3,323
3,546
Personal loans
19
9
-
28
256
284
Credit cards
163
77
19
259
1,749
2,008
Other consumer loans
66
35
2
103
567
670
 
Total modifications
$
298
$
149
$
166
$
613
$
125,695
$
126,308
 
There were
 
$
0.4
 
million and
 
$
0.3
 
million of
 
loans modified
 
to borrowers
 
experiencing financial
 
difficulty which
 
had a
 
payment default
 
during
the six-month
 
periods ended
 
June 30,
 
2025 and
 
2024,
 
respectively,
 
and had
 
been modified
 
within the
 
last twelve
 
months
 
preceding the
 
payment
default.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
42
NOTE 4 – ALLOWANCE
 
FOR CREDIT LOSSES FOR LOANS AND FINANCE LEASES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following tables present the activity in the ACL on loans and finance leases by portfolio
 
segment for the indicated periods:
Residential Mortgage
Loans
Construction
Loans
Commercial
Mortgage
C&I
 
Loans
Consumer Loans
Total
Quarter Ended June 30, 2025
(In thousands)
ACL:
Beginning balance
$
41,640
$
3,417
$
24,143
$
36,464
$
141,605
$
247,269
Provision for credit losses - expense (benefit)
793
1,121
(1,448)
2,135
17,780
20,381
Charge-offs
 
(285)
-
-
(66)
(24,178)
(24,529)
Recoveries
300
13
51
826
4,267
5,457
Ending balance
$
42,448
$
4,551
$
22,746
$
39,359
$
139,474
$
248,578
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential Mortgage
Loans
Construction
Loans
Commercial
Mortgage
C&I
 
Loans
Consumer Loans
Total
Quarter Ended June 30, 2024
(In thousands)
ACL:
Beginning balance
$
56,689
$
6,186
$
32,661
$
35,423
$
132,633
$
263,592
Provision for credit losses - (benefit) expense
(10,593)
(554)
(2,976)
(596)
26,649
11,930
Charge-offs
 
(491)
-
-
(348)
(25,575)
(26,414)
Recoveries
446
14
393
961
3,610
5,424
Ending balance
$
46,051
$
5,646
$
30,078
$
35,440
$
137,317
$
254,532
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential Mortgage
Loans
Construction
Loans
Commercial
Mortgage
C&I
 
Loans
Consumer Loans
Total
Six-Month Period Ended June 30, 2025
(In thousands)
ACL:
Beginning balance
$
40,654
$
3,824
$
22,447
$
33,034
$
143,983
$
243,942
Provision for credit losses - expense
1,797
700
208
5,488
37,025
45,218
Charge-offs
 
(520)
-
-
(143)
(52,076)
(52,739)
Recoveries
517
27
91
980
10,542
(1)
12,157
Ending balance
$
42,448
$
4,551
$
22,746
$
39,359
$
139,474
$
248,578
(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
Six-Month Period Ended June 30, 2024
(In thousands)
ACL:
Beginning balance
$
57,397
$
5,605
$
32,631
$
33,996
$
132,214
$
261,843
Provision for credit losses - (benefit) expense
(11,057)
17
(2,986)
(3,756)
42,629
24,847
Charge-offs
 
(1,007)
-
-
(880)
(53,866)
(55,753)
Recoveries
718
24
433
6,080
16,340
(1)
23,595
Ending balance
$
46,051
$
5,646
$
30,078
$
35,440
$
137,317
$
254,532
(1)
Includes recoveries totaling $
9.5
 
million associated with the bulk sale of fully charged-off consumer loans and finance leases.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
43
The
 
Corporation
 
estimates
 
the
 
ACL
 
following
 
the
 
methodologies
 
described
 
in
 
Note
 
1
 
–
 
“Nature
 
of
 
Business
 
and
 
Summary
 
of
Significant Accounting
 
Policies” to
 
the audited
 
consolidated financial
 
statements included
 
in the
 
2024 Annual
 
Report on
 
Form 10-K,
as updated by the information contained in this report, for each portfolio segment
 
.
The Corporation
 
generally applies
 
probability weights
 
to the
 
baseline and
 
alternative downside
 
economic scenarios
 
to estimate
 
the
ACL with
 
the
 
baseline
 
scenario
 
carrying
 
the highest
 
weight.
 
The
 
scenarios
 
that are
 
chosen
 
each quarter
 
and
 
the
 
weighting
 
given
 
to
each
 
scenario
 
for
 
the
 
different
 
loan
 
portfolio
 
categories
 
depend
 
on
 
a
 
variety
 
of
 
factors
 
including
 
recent
 
economic
 
events,
 
leading
national and
 
regional economic indicators,
 
and industry
 
trends. As of
 
June 30,
 
2025 and December
 
31, 2024, the
 
Corporation applied
100% probability
 
to the baseline
 
scenario for
 
the commercial mortgage
 
and construction
 
loan portfolios
 
since certain macroeconomic
variables
 
associated
 
with
 
commercial
 
real
 
estate
 
property
 
performance
 
and
 
the
 
commercial
 
real
 
estate
 
(“CRE”)
 
price
 
index,
particularly in
 
the Puerto
 
Rico region,
 
are expected
 
to continue
 
to perform
 
in a
 
more favorable
 
manner than
 
the alternative
 
downside
economic scenario.
As of June
 
30, 2025, the
 
ACL for loans
 
and finance
 
leases was $
248.6
 
million, an increase
 
of $
4.7
 
million, from $
243.9
 
million as
of December
 
31, 2024.
 
The increase
 
was mainly
 
related to
 
the ACL
 
for commercial
 
and construction
 
loans, which
 
increased by
 
$
7.4
million,
 
mainly
 
due
 
to
 
C&I
 
loan
 
growth,
 
a
 
deterioration
 
in
 
the
 
economic
 
outlook
 
of
 
the
 
forecasted
 
CRE
 
price
 
index,
 
and
 
updated
financial information of certain
 
commercial borrowers. Also, the
 
ACL for residential mortgage loans
 
increased by $
1.8
 
million mainly
due to
 
the longer
 
expected life
 
of newly
 
originated loans,
 
partially offset
 
by improvements
 
in macroeconomic
 
variables, such
 
as the
unemployment rate and the Housing Price Index.
Meanwhile, the
 
ACL for
 
consumer loans
 
decreased by
 
$
4.5
 
million, driven
 
by improvements
 
in macroeconomic
 
variables, mainly
in the projection of the unemployment rate, and reductions in the unsecured
 
loan portfolio volumes.
Net
 
charge-offs
 
were
 
$
19.1
 
million
 
and
 
$
40.5
 
million
 
for
 
the
 
second
 
quarter
 
and
 
first
 
six
 
months
 
of
 
2025,
 
compared
 
to
 
$
21.0
million
 
and
 
$
32.2
 
million,
 
respectively,
 
for
 
the
 
same
 
periods
 
in
 
2024.
 
The
 
$
1.9
 
million
 
decrease
 
in
 
net
 
charge-offs
 
for
 
the
 
second
quarter of
 
2025 was
 
driven by
 
a decrease
 
in consumer
 
loans and
 
finance leases
 
net charge
 
-offs.
 
The net
 
charge-offs
 
for the
 
first six
months
 
of 2025
 
and
 
2024 included
 
$
2.4
 
million
 
and
 
$
9.5
 
million,
 
respectively,
 
in recoveries
 
associated
 
with
 
the
 
bulk sales
 
of
 
fully
charged-off
 
consumer loans
 
and finance
 
leases. The
 
increase in
 
net charge-offs
 
for the
 
first six
 
months of
 
2025 was
 
also driven
 
by a
$
5.0
 
million recovery
 
associated with
 
a C&I
 
loan in
 
the Puerto
 
Rico region
 
during the
 
first six
 
months of
 
2024, partially
 
offset by
 
a
decrease in consumer loans and finance leases charge-offs.
 
 
 
 
 
 
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
44
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The tables below
 
present the ACL
 
related to loans
 
and finance leases
 
and the carrying
 
values of loans
 
by portfolio segment
 
as of
June 30, 2025 and December 31, 2024:
As of June 30, 2025
Residential Mortgage
Loans
Construction
Loans
Commercial Mortgage
Loans
C&I
 
Loans
Consumer Loans
Total
(Dollars in thousands)
Total loans held for investment:
 
Amortized cost of loans
$
2,859,158
$
245,350
$
2,502,475
$
3,516,008
$
3,747,011
$
12,870,002
 
Allowance for credit losses
42,448
4,551
22,746
39,359
139,474
248,578
 
Allowance for credit losses to
 
amortized cost
1.48
%
1.85
%
0.91
%
1.12
%
3.72
%
1.93
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2024
Residential Mortgage
Loans
Construction
Loans
Commercial Mortgage
Loans
C&I
 
Loans
Consumer Loans
Total
(Dollars in thousands)
Total loans held for investment:
 
Amortized cost of loans
$
2,828,431
$
228,396
$
2,565,984
$
3,366,038
$
3,757,707
$
12,746,556
 
Allowance for credit losses
40,654
3,824
22,447
33,034
143,983
243,942
 
Allowance for credit losses to
 
amortized cost
1.44
%
1.67
%
0.87
%
0.98
%
3.83
%
1.91
%
In
 
addition,
 
the
 
Corporation
 
estimates
 
expected
 
credit
 
losses
 
over
 
the
 
contractual
 
period
 
in
 
which
 
the
 
Corporation
 
is
 
exposed
 
to
credit
 
risk
 
via
 
a
 
contractual
 
obligation
 
to
 
extend
 
credit,
 
such
 
as
 
unfunded
 
loan
 
commitments
 
and
 
standby
 
letters
 
of
 
credit
 
for
commercial
 
and
 
construction
 
loans,
 
unless
 
the
 
obligation
 
is
 
unconditionally
 
cancellable
 
by
 
the
 
Corporation.
 
See
 
Note
 
19
 
–
“Regulatory
 
Matters,
 
Commitments
 
and
 
Contingencies”
 
for
 
information
 
on
 
off-balance
 
sheet
 
exposures
 
as
 
of
 
June
 
30,
 
2025
 
and
December 31,
 
2024. The
 
Corporation estimates
 
the ACL
 
for these
 
off-balance
 
sheet exposures
 
following the
 
methodology described
in
 
Note
 
1 –
 
“Nature
 
of Business
 
and
 
Summary
 
of Significant
 
Accounting
 
Policies”
 
to
 
the audited
 
consolidated
 
financial statements
included in the
 
2024 Annual Report
 
on Form 10-K.
 
As of June 30,
 
2025, the ACL
 
for off-balance
 
sheet credit exposures
 
amounted to
$
3.4
 
million, compared to $
3.1
 
million as of December 31, 2024.
 
The following
 
table presents
 
the activity
 
in the
 
ACL for
 
unfunded loan
 
commitments and
 
standby letters
 
of credit
 
for the
 
quarters
and six-month periods ended June 30, 2025 and 2024:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
Six-Month Period Ended
June 30,
June 30,
2025
2024
2025
2024
(In thousands)
Beginning balance
$
3,080
$
4,919
$
3,143
$
4,638
Provision for credit losses - expense (benefit)
 
287
(417)
224
(136)
Ending balance
$
3,367
$
4,502
$
3,367
$
4,502
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
45
NOTE 5
–
OTHER REAL ESTATE
 
OWNED (“OREO”)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following table presents the OREO inventory as of the indicated dates:
June 30, 2025
December 31, 2024
(In thousands)
OREO balances, carrying value:
Residential
(1)
$
10,347
$
12,897
Construction
435
522
Commercial
3,667
3,887
Total
$
14,449
$
17,306
(1)
Excludes $
4.1
 
million and
 
$
5.2
 
million as
 
of June
 
30, 2025
 
and December
 
31, 2024,
 
respectively,
 
of foreclosures
 
that met
 
the conditions
 
of ASC
 
Subtopic 310-40
 
“Reclassification of
Residential Real
 
Estate Collateralized Consumer
 
Mortgage Loans upon
 
Foreclosure,” and
 
are presented as
 
a receivable as
 
part of other
 
assets in
 
the consolidated statements
 
of financial
condition.
See Note 15 – “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 quarters and six-month
 
periods ended June 30,
2025 and 2024.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
46
NOTE 6 – NON-CONSOLIDATED
 
VARIABLE
 
INTEREST ENTITIES (“VIEs”) AND SERVICING
 
ASSETS
The Corporation
 
transfers residential
 
mortgage loans
 
in sale
 
or securitization
 
transactions in
 
which it
 
has continuing
 
involvement,
including
 
servicing
 
responsibilities
 
and
 
guarantee
 
arrangements.
 
All
 
such
 
transfers
 
have
 
been
 
accounted
 
for
 
as
 
sales
 
as
 
required
 
by
applicable accounting guidance.
When
 
evaluating
 
the
 
need
 
to
 
consolidate
 
counterparties
 
to
 
which
 
the
 
Corporation
 
has
 
transferred
 
assets,
 
or
 
with
 
which
 
the
Corporation has
 
entered into
 
other transactions,
 
the Corporation
 
first determines
 
if the
 
counterparty is
 
an entity
 
for which
 
a variable
interest
 
exists.
 
If
 
no
 
scope
 
exception
 
is
 
applicable
 
and
 
a
 
variable
 
interest
 
exists,
 
the
 
Corporation
 
then
 
evaluates
 
whether
 
it
 
is
 
the
primary beneficiary of the VIE and whether the entity should be consolidated
 
or not.
Below is a summary of transactions with VIEs for which the Corporation has retained
 
some level of continuing involvement:
Trust-Preferred
 
Securities (“TruPS”)
In
 
2004,
 
FBP Statutory
 
Trusts
 
I
 
and
 
II,
 
financing
 
trusts
 
that
 
are
 
wholly
 
owned
 
by
 
the Corporation
 
,
 
sold to
 
institutional
 
investors
$
100
 
million
 
and
 
$
125
 
million
 
of
 
its
 
variable-rate
 
TruPS,
 
respectively.
 
Such
 
proceeds,
 
along
 
with
 
the
 
proceeds
 
associated
 
with
 
the
Corporation’s purchase
 
of common securities of $
3.1
 
million and $
3.9
 
million, respectively,
 
were used to purchase $
103.1
 
million and
$
128.9
 
million,
 
respectively,
 
in
 
Junior
 
Subordinated
 
Deferrable
 
Debentures.
 
These
 
debentures,
 
net
 
of
 
related
 
issuance
 
costs,
 
are
reflected
 
as
 
part
 
of
 
“Long-term
 
borrowings”
 
in
 
the
 
Corporation’s
 
consolidated
 
statements
 
of
 
financial
 
condition.
 
See
 
Note
 
8
 
–
“Borrowings” for additional information related to the terms of these debentures.
During the first half of 2025,
 
the Corporation redeemed the remaining $
61.7
 
million of outstanding TruPS
 
as of December 31, 2024
at
 
a
 
contractual
 
call
 
price
 
of
100
%,
 
as
 
further
 
explained
 
in
 
Note
 
11
 
–
 
“Stockholders’
 
Equity.”
 
Following
 
the
 
redemption
 
of
 
these
TruPS, FBP Statutory Trusts
 
I and II were liquidated by the Corporation.
Private Label MBS
During
 
2004
 
and
 
2005,
 
an unaffiliated
 
party,
 
referred
 
to in
 
this subsection
 
as the
 
seller,
 
established
 
a
 
series of
 
statutory
 
trusts
 
to
securitize
 
mortgage
 
loans and
 
sell trust
 
certificates
 
(“private
 
label
 
MBS”).
 
The
 
seller
 
initially
 
provided
 
the
 
servicing
 
for
 
a
 
fee, then
sold and
 
issued the
 
private label
 
MBS in
 
favor of
 
FirstBank. Currently,
 
FirstBank is
 
the sole
 
owner of
 
these private
 
label MBS,
 
with
another third-party performing the servicing for a fee. The
 
FDIC became owner of an interest-only strip (“IO”) upon its intervention
 
of
the seller, a
 
failed financial institution, and,
 
as such, is entitled to receive
 
the excess of the interest income
 
less a servicing fee over
 
the
variable rate
 
income that
 
the Bank
 
earns on
 
the securities.
 
Since no
 
recourse agreement
 
exists, the
 
Bank, as
 
the sole
 
holder,
 
bears all
risks
 
from
 
losses on
 
non-accruing
 
loans and
 
repossessed
 
collateral.
 
As of
 
June
 
30,
 
2025,
 
the
 
amortized
 
cost
 
and
 
fair value
 
of these
private label
 
MBS amounted
 
to $
5.4
 
million and
 
$
3.8
 
million, respectively,
 
which is
 
included as
 
part of
 
the Corporation’s
 
available-
for-sale
 
debt
 
securities
 
portfolio,
 
compared
 
to an
 
amortized
 
cost
 
and
 
fair value
 
of $
6.1
 
million
 
and
 
$
4.2
 
million,
 
respectively,
 
as of
December 31,
 
2024. As described
 
in Note 2
 
– “Debt Securities,”
 
the ACL on
 
these private label
 
MBS amounted
 
to $
0.2
 
million as of
each of June 30, 2025 and December 31, 2024.
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
47
Servicing Assets, or Mortgage Servicing Rights (“MSRs”)
The
 
Corporation
 
typically
 
transfers
 
first
 
lien
 
residential
 
mortgage
 
loans in
 
conjunction
 
with
 
GNMA
 
securitization
 
transactions
 
in
which the
 
loans are
 
exchanged for
 
cash or
 
securities that
 
are readily
 
redeemed for
 
cash proceeds
 
and servicing
 
rights. The
 
securities
issued
 
through
 
these
 
transactions
 
are
 
guaranteed
 
by
 
GNMA
 
and,
 
under
 
seller/servicer
 
agreements,
 
the
 
Corporation
 
is
 
required
 
to
service
 
the
 
loans
 
in
 
accordance
 
with
 
the
 
issuers’
 
servicing
 
guidelines
 
and
 
standards.
 
As of
 
June
 
30,
 
2025,
 
the Corporation
 
serviced
loans
 
securitized
 
through
 
GNMA
 
with
 
a
 
principal
 
balance
 
of
 
$
2.1
 
billion.
 
Also,
 
certain
 
conventional
 
conforming
 
loans
 
are
 
sold
 
to
FNMA
 
or
 
FHLMC
 
with
 
servicing
 
retained.
 
The
 
Corporation
 
recognizes
 
as
 
separate
 
assets
 
the
 
rights
 
to
 
service
 
loans
 
for
 
others,
whether those servicing
 
assets are originated or
 
purchased. MSRs are included
 
as part of other
 
assets in the consolidated
 
statements of
financial condition.
The changes in MSRs are shown below for the indicated periods:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended June 30,
Six-Month Period Ended June 30,
2025
2024
2025
2024
(In thousands)
Balance at beginning of period
$
24,624
$
26,355
$
25,019
$
26,941
Capitalization of servicing assets
638
647
1,279
1,107
Amortization
(1,110)
(1,038)
(2,137)
(2,075)
Other
(1)
(22)
(12)
(31)
(21)
Balance at end of period
$
24,130
$
25,952
$
24,130
$
25,952
(1)
Consists of adjustments related to the repurchase of loans serviced
 
for others and temporary impairment charges.
The components
 
of net servicing
 
income, included as
 
part of mortgage
 
banking activities in
 
the consolidated statements
 
of income,
are shown below for the indicated periods:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended June 30,
 
Six-Month Period Ended June 30,
2025
2024
2025
2024
(In thousands)
Servicing fees
$
2,382
$
2,605
$
5,060
$
5,178
Late charges and prepayment penalties
159
181
367
370
Other
(1)
(22)
(12)
(31)
(21)
 
Servicing income, gross
2,519
2,774
5,396
5,527
Amortization
(1,110)
(1,038)
(2,137)
(2,075)
 
Servicing income, net
$
1,409
$
1,736
$
3,259
$
3,452
(1)
 
Consists of adjustments related to the repurchase of loans serviced
 
for others and temporary impairment charges.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
48
The Corporation’s
 
MSRs are subject
 
to prepayment
 
and interest rate
 
risks. Key economic
 
assumptions used
 
in determining
 
the fair
value at the time of sale of the related mortgages for the indicated periods
 
ranged as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average
Maximum
Minimum
Six-Month Period Ended June 30, 2025
Constant prepayment rate:
 
 
Government-guaranteed mortgage loans
6.7
%
16.6
%
3.9
%
 
Conventional conforming mortgage loans
7.0
%
12.8
%
2.4
%
 
Conventional non-conforming mortgage loans
6.1
%
9.0
%
2.4
%
Discount rate:
 
Government-guaranteed mortgage loans
11.5
%
11.5
%
11.5
%
 
Conventional conforming mortgage loans
9.5
%
9.5
%
9.5
%
 
Conventional non-conforming mortgage loans
11.7
%
12.5
%
11.0
%
Six-Month Period Ended June 30, 2024
Constant prepayment rate:
 
 
Government-guaranteed mortgage loans
6.8
%
17.1
%
3.2
%
 
Conventional conforming mortgage loans
6.8
%
15.9
%
2.9
%
 
Conventional non-conforming mortgage loans
6.2
%
7.6
%
4.4
%
Discount rate:
 
Government-guaranteed mortgage loans
11.5
%
11.5
%
11.5
%
 
Conventional conforming mortgage loans
9.5
%
9.5
%
9.5
%
 
Conventional non-conforming mortgage loans
11.5
%
12.5
%
11.0
%
The weighted
 
averages of the
 
key economic
 
assumptions that the
 
Corporation used
 
in its valuation
 
model and the
 
sensitivity of the
current
 
fair
 
value
 
to
 
immediate
10
%
 
and
20
%
 
adverse
 
changes
 
in
 
those
 
assumptions
 
for
 
mortgage
 
loans
 
were
 
as
 
follows
 
as
 
of
 
the
indicated dates:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 30, 2025
December 31, 2024
(In thousands)
Carrying amount of servicing assets
$
24,130
$
25,019
Fair value
$
42,617
$
43,046
Weighted-average
 
expected life (in years)
7.67
7.63
Constant prepayment rate (weighted-average annual
 
rate)
6.10
%
6.34
%
 
Decrease in fair value due to 10% adverse change
$
831
$
858
 
Decrease in fair value due to 20% adverse change
$
1,624
$
1,675
Discount rate (weighted-average annual rate)
10.75
%
10.72
%
 
Decrease in fair value due to 10% adverse change
$
1,795
$
1,815
 
Decrease in fair value due to 20% adverse change
$
3,458
$
3,495
These sensitivities are hypothetical and should be used with caution. As the figures indicate, changes in fair value based on a 10%
variation in assumptions generally cannot be extrapolated because the relationship between the change in assumption and the change
in fair value may not be linear. Also, in this table, the effect of a variation in a particular assumption on the fair value of the MSR is
calculated without changing any other assumption. In reality, changes in one factor may result in changes in another (for example,
increases in market interest rates may result in lower prepayments), which may magnify or counteract the sensitivities
.
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
49
NOTE 7 – DEPOSITS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following table summarizes deposit balances as of the indicated dates:
June 30, 2025
December 31, 2024
(In thousands)
Type of account:
Non-interest-bearing deposit accounts
$
5,343,588
$
5,547,538
Interest-bearing checking accounts
3,961,817
4,308,116
Interest-bearing saving accounts
3,475,541
3,530,382
Time deposits
3,246,545
3,007,144
Brokered CDs
526,547
478,118
 
Total
$
16,554,038
$
16,871,298
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following table presents the remaining contractual maturities of time deposits,
 
including brokered CDs, as of June 30, 2025:
Total
 
(In thousands)
Three months or less
$
988,781
Over three months to six months
672,817
Over six months to one year
1,311,266
Over one year to two years
 
509,176
Over two years to three years
 
163,804
Over three years to four years
 
70,556
Over four years to five years
 
34,822
Over five years
21,870
 
Total
$
3,773,092
Total
 
Puerto Rico and
 
U.S. time deposits
 
with balances of
 
more than $250,000
 
amounted to $
1.7
 
billion and $
1.5
 
billion as of
 
June
30,
 
2025
 
and
 
December
 
31,
 
2024,
 
respectively.
 
This
 
amount
 
does
 
not
 
include
 
brokered
 
CDs
 
that
 
are
 
generally
 
participated
 
out
 
by
brokers in
 
shares of
 
less than
 
the FDIC
 
insurance limit.
 
As of
 
June 30,
 
2025 and
 
December 31,
 
2024, unamortized
 
broker placement
fees amounted
 
to $
0.9
 
million and
 
$
1.1
 
million, respectively,
 
which are
 
amortized over
 
the contractual
 
maturity of
 
the brokered
 
CDs
under the interest method.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
50
NOTE 8 –BORROWINGS
Advances from the Federal Home Loan Bank (“FHLB”)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following is a summary of the advances from the FHLB as of the indicated dates:
June 30, 2025
December 31, 2024
(In thousands)
Long-term
Fixed
-rate advances from the FHLB
(1)
$
320,000
$
500,000
(1)
Weighted-average interest rate of
4.37
% and
4.45
% as of June 30, 2025 and December 31, 2024, respectively.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Advances from the FHLB mature as follows as of the indicated date:
June 30, 2025
(In thousands)
Three months or less
$
30,000
Over six months to one year
90,000
Over two years to three years
200,000
 
Total
(1)
$
320,000
(1) Average remaining term to maturity of
1.71
 
years.
Junior Subordinated Debentures
Junior subordinated debentures, as of the indicated dates, consisted of:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In thousands)
June 30, 2025
December 31, 2024
Long-term floating rate junior subordinated debentures (FBP Statutory Trust I)
(1)
$
-
$
43,143
Long-term floating rate junior subordinated debentures (FBP Statutory Trust II)
(2)
-
18,557
$
-
$
61,700
(1)
Amount represents
 
junior subordinated
 
interest-bearing
 
debentures
 
due in
 
2034 with
 
a floating
 
interest rate
 
of
2.75
% over
3-month CME Term SOFR
 
plus a
0.26161
% tenor
 
spread
adjustment as of December 31, 2024 (
7.36
% as of December 31, 2024).
(2)
Amount represents
 
junior subordinated
 
interest-bearing
 
debentures
 
due in
 
2034 with
 
a floating
 
interest rate
 
of
2.50
% over
3-month CME Term SOFR
 
plus a
0.26161
% tenor
 
spread
adjustment as of December 31, 2024 (
7.12
% as of December 31, 2024).
See Note
 
6 –
 
“Non-Consolidated Variable
 
Interest Entities
 
(“VIEs”) and
 
Servicing Assets”
 
and Note
 
11 –
 
“Stockholders’ Equity”
for
 
additional
 
information
 
on
 
junior
 
subordinated
 
debentures,
 
including
 
the
 
$
61.7
 
million
 
redemption
 
of
 
the
 
remaining
 
outstanding
TruPS issued by FBP Statutory Trusts
 
I and II.
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
51
NOTE 9 – EARNINGS PER COMMON
.
SHARE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The
 
calculations
 
of
 
earnings
 
per
 
common
 
share
 
for
 
the
 
quarters
 
and
 
six-month
 
periods
 
ended
 
June
 
30,
 
2025
 
and
 
2024
 
are
 
as
follows:
Quarter Ended
Six-Month Period Ended
June 30,
June 30,
2025
2024
2025
2024
(In thousands, except per share information)
Net income attributable to common stockholders
$
80,180
$
75,838
$
157,239
$
149,296
Weighted-Average
 
Shares:
 
Average common
 
shares outstanding
160,884
164,945
161,903
166,043
 
Average potential
 
dilutive common shares
 
629
598
722
627
 
Average common
 
shares outstanding - assuming dilution
161,513
165,543
162,625
166,670
Earnings per common share:
Basic
 
$
0.50
$
0.46
$
0.97
$
0.90
Diluted
 
$
0.50
$
0.46
$
0.97
$
0.90
Earnings
 
per
 
common
 
share
 
is
 
computed
 
by
 
dividing
 
net
 
income
 
attributable
 
to
 
common
 
stockholders
 
by
 
the
 
weighted-average
number
 
of
 
common
 
shares
 
issued
 
and
 
outstanding.
 
Basic
 
weighted-average
 
common
 
shares
 
outstanding
 
exclude
 
unvested shares
 
of
restricted stock that do not contain non-forfeitable dividend rights
 
.
Potential dilutive
 
common
 
shares consist
 
of unvested
 
shares of
 
restricted
 
stock
 
and
 
performance
 
units (if
 
any
 
of the
 
performance
conditions
 
are
 
met
 
as
 
of
 
the
 
end
 
of
 
the
 
reporting
 
period)
 
that
 
do
 
not
 
contain
 
non-forfeitable
 
dividend
 
or
 
dividend
 
equivalent
 
rights
using the
 
treasury stock
 
method. This
 
method assumes
 
that proceeds
 
equal to
 
the amount
 
of compensation
 
cost attributable
 
to future
services
 
is
 
used
 
to
 
repurchase
 
shares
 
on
 
the
 
open
 
market
 
at
 
the
 
average
 
market
 
price
 
for
 
the
 
period.
 
The
 
difference
 
between
 
the
number
 
of
 
potential
 
dilutive
 
shares
 
issued
 
and
 
the
 
shares
 
purchased
 
is
 
added
 
as
 
incremental
 
shares
 
to
 
the
 
actual
 
number
 
of
 
shares
outstanding
 
to
 
compute
 
diluted
 
earnings
 
per
 
share.
 
Unvested
 
shares
 
of
 
restricted
 
stock
 
outstanding
 
during
 
the
 
period
 
that
 
result
 
in
lower potentially
 
dilutive shares issued
 
than shares purchased
 
under the
 
treasury stock method
 
are not included
 
in the computation
 
of
dilutive
 
earnings
 
per
 
share
 
since
 
their
 
inclusion
 
would
 
have an
 
antidilutive
 
effect
 
on
 
earnings
 
per
 
share.
 
There
 
were
no
 
antidilutive
shares of common stock during the quarters and six-month periods
 
ended June 30, 2025 and 2024.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
52
NOTE 10 – STOCK-BASED
.
COMPENSATION
 
The First Bancorp
 
Omnibus Incentive
 
Plan (the “Omnibus
 
Plan”), which is
 
effective until
 
May 24, 2026,
 
provides for equity-based
and non-equity-based
 
compensation incentives
 
(the “awards”).
 
The Omnibus
 
Plan authorizes
 
the issuance
 
of up
 
to
14,169,807
 
shares
of
 
common
 
stock, subject
 
to adjustments
 
for
 
stock splits,
 
reorganizations
 
and
 
other
 
similar events.
 
As of
 
June 30,
 
2025,
 
there
 
were
1,987,896
 
authorized shares
 
of common
 
stock available
 
for issuance
 
under the
 
Omnibus Plan.
 
The Corporation’s
 
Board of
 
Directors,
based on
 
the recommendation
 
of the
 
Compensation
 
and Benefits
 
Committee of
 
the Board,
 
has the
 
power and
 
authority to
 
determine
those
 
eligible
 
to
 
receive
 
awards
 
and
 
to
 
establish
 
the
 
terms
 
and
 
conditions
 
of
 
any
 
awards,
 
subject
 
to
 
various
 
limits
 
and
 
vesting
restrictions that apply to individual and aggregate awards.
Restricted Stock
Under the
 
Omnibus Plan,
 
the Corporation
 
may grant
 
restricted stock
 
to plan
 
participants, subject
 
to forfeiture
 
upon the
 
occurrence
of certain
 
events until
 
the dates
 
specified in
 
the participant’s
 
award agreement.
 
While the
 
restricted stock
 
is subject
 
to forfeiture
 
and
does
 
not
 
contain
 
non-forfeitable
 
dividend
 
rights,
 
participants
 
may
 
exercise
 
full
 
voting
 
rights
 
with
 
respect
 
to
 
the
 
shares
 
of
 
restricted
stock
 
granted
 
to
 
them.
 
The
 
fair
 
value
 
of
 
the
 
shares
 
of
 
restricted
 
stock
 
granted
 
was
 
based
 
on
 
the
 
market
 
price
 
of
 
the
 
Corporation’s
common
 
stock on
 
the date
 
of the
 
respective grant.
 
The shares
 
of restricted
 
stocks granted
 
to employees
 
are subject
 
to the
 
following
vesting period:
 
fifty percent
 
(
50
%) of
 
those shares
 
vest on
 
the
two-year
 
anniversary of
 
the grant
 
date and
 
the remaining
50
% vest
 
on
the
three-year
 
anniversary of
 
the grant
 
date. The
 
shares of
 
restricted stock
 
granted to
 
directors are
 
generally subject
 
to vesting
 
on the
one-year
 
anniversary of the grant date.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following table
 
summarizes the restricted stock
 
activity under the Omnibus
 
Plan during the six-month
 
periods ended June 30,
2025 and 2024:
Six-Month Period Ended June 30,
2025
2024
Number of
Weighted-
Number of
Weighted-
shares of
Average
shares of
Average
restricted
Grant Date
restricted
Grant Date
stock
 
Fair Value
stock
 
Fair Value
Unvested shares outstanding at beginning of year
1,007,621
$
14.39
889,642
$
12.30
Granted
(1)
447,631
18.35
398,569
17.35
Forfeited
(8,818)
16.27
(3,464)
13.30
Vested
(388,608)
12.67
(253,504)
12.26
Unvested shares outstanding at end of period
1,057,826
$
16.69
1,031,243
$
14.26
(1)
For the six-month period ended June 30, 2025,
 
includes
2,086
 
shares of restricted stock awarded to independent
 
directors and
445,545
 
shares of restricted stock awarded to employees,
 
of
which
103,560
 
shares were
 
granted to
 
retirement-eligible employees
 
and thus
 
charged to
 
earnings as
 
of the
 
grant date.
 
For the
 
six-month period
 
ended June
 
30, 2024,
 
includes
2,280
shares of
 
restricted stock
 
awarded to
 
independent directors
 
and
396,289
 
shares of
 
restricted stock
 
awarded to
 
employees,
 
of which
84,122
 
shares were
 
granted to
 
retirement-eligible
employees and thus charged to earnings as of the grant date.
For the quarter
 
and six-month period
 
ended June
 
30, 2025, the
 
Corporation recognized
 
$
1.4
 
million and $
4.5
 
million, respectively,
of
 
stock-based
 
compensation
 
expense
 
related
 
to
 
restricted
 
stock
 
awards,
 
compared
 
to
 
$
1.3
 
million
 
and
 
$
3.7
 
million
 
for
 
the
 
same
periods
 
in 2024.
 
As of
 
June 30,
 
2025,
 
there was
 
$
8.0
 
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
1.8
 
years.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
53
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
 
Corporation’s
 
common
 
stock.
These awards, which are granted to executives, have the right to receive dividend
equivalents. Such dividend equivalents accrue during the performance cycle and are paid in cash on the vesting date based upon
achievement of the performance goals.
 
Performance units granted vest on the third anniversary of the effective date of the award based on actual achievement of two
performance metrics weighted equally: relative total shareholder return (“Relative TSR”), compared to companies that comprise the
KBW Nasdaq Regional Banking Index, and the achievement of a tangible book value per share (“TBVPS”) goal, which is measured
based upon the growth in the tangible book value during the performance cycle, adjusted for certain allowable non-recurring
transactions. The participant may earn 50% of their target opportunity for threshold level performance and up to 150% of their target
opportunity for maximum level performance, based on the individual achievement of each performance goal during a
three-year
performance cycle. Amounts between threshold, target and maximum performance will vest in a proportional amount.
The following
 
table summarizes
 
the performance
 
units activity
 
under the
 
Omnibus Plan
 
during
 
the six-month
 
periods ended
 
June
30, 2025 and 2024:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six-Month Period Ended June 30,
2025
2024
Number
 
Weighted-
Number
 
Weighted-
of
Average
of
Average
Performance
Grant Date
Performance
Grant Date
Units
Fair Value
Units
Fair Value
Performance units at beginning of year
549,032
$
14.37
534,261
$
12.25
Additions
(1)
160,744
18.66
165,487
18.39
Vested
(2)
(166,669)
13.15
(150,716)
11.26
Performance units at end of period
543,107
$
16.01
549,032
$
14.37
(1)
Units granted
 
during the
 
six-month periods
 
ended June
 
30, 2025
 
and 2024
 
are based on
 
the achievement
 
of the
 
Relative TSR
 
and TBVPS
 
performance goals
 
during a
 
three-year
performance cycle beginning January 1, 2025 and January
 
1, 2024, respectively, and ending on
 
December 31, 2027 and December 31, 2026, respectively.
(2)
Units vested
 
during the
 
six-month periods
 
ended June
 
30, 2025
 
and 2024
 
are related
 
to performance
 
units granted
 
in 2022
 
and 2021,
 
respectively,
 
that met
 
the pre-established
targets and were settled with shares of common stock
 
reissued from treasury shares.
The
 
fair
 
value
 
of
 
the
 
performance
 
units
 
awarded,
 
that
 
was
 
based
 
on
 
the
 
TBVPS
 
goal
 
component,
 
was
 
calculated
 
based
 
on
 
the
market
 
price
 
of
 
the
 
Corporation’s
 
common
 
stock
 
on
 
the
 
respective
 
date
 
of
 
the
 
grant
 
and
 
assuming
 
attainment
 
of
 
100%
 
of
 
target
opportunity.
 
As of June
 
30, 2025,
 
there have been
 
no changes in
 
management’s
 
assessment of
 
the probability
 
that the pre
 
-established
TBVPS goal will be
 
achieved;
 
as such, no
 
cumulative adjustment to
 
compensation expense has
 
been recognized.
 
The fair value of
 
the
performance units awarded, that
 
was based on the Relative
 
TSR component, was calculated
 
using a Monte Carlo simulation.
 
Since the
Relative
 
TSR component
 
is considered
 
a market
 
condition,
 
the
 
fair value
 
of the
 
portion
 
of
 
the award
 
based
 
on Relative
 
TSR is
 
not
revised subsequent to grant date based on actual performance.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
54
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
six-month periods ended June 30, 2025 and 2024:
Six-Month Period Ended June 30,
2025
2024
Risk-free interest rate
(1)
3.92
%
4.41
%
Correlation coefficient
74.96
73.80
Expected dividend yield
(2)
-
-
Expected volatility
(3)
31.94
34.65
Expected life (in years)
2.79
2.78
(1)
Based on the yield on zero-coupon U.S. Treasury
 
Separate Trading of Registered Interest and
 
Principal of Securities as of the grant date for a period equal to the
 
simulation term.
(2)
Assumes that dividends are reinvested at each ex-dividend date.
(3)
Calculated based on the historical volatility of the Corporation's
 
stock price with a look-back period equal to the simulation
 
term using daily stock prices.
For the quarter
 
and six-month period
 
ended June
 
30, 2025, the
 
Corporation recognized
 
$
0.7
 
million and $
1.3
 
million, respectively,
of stock-based
 
compensation expense related
 
to performance units,
 
compared to $
0.6
 
million and $
1.1
 
million for the
 
same periods in
2024. As of
 
June 30, 2025,
 
there was $
5.2
 
million of total
 
unrecognized compensation
 
cost related to unvested
 
performance units that
the Corporation expects to recognize over a weighted-average period of
2.1
 
years.
Shares withheld
During
 
the first
 
six
 
months
 
of
 
2025,
 
the Corporation
 
withheld
188,266
 
shares (first
 
six
 
months
 
of
 
2024 –
136,308
 
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)
55
NOTE 11 – STOCKHOLDERS’
 
EQUITY
Repurchase Program
On
 
July
 
22,
 
2024,
 
the
 
Corporation
 
announced
 
that
 
its
 
Board
 
of
 
Directors
 
approved
 
a
 
repurchase
 
program
 
under
 
which
 
the
Corporation
 
may
 
repurchase
 
up
 
to
 
$
250
 
million
 
that
 
could
 
include
 
repurchases
 
of
 
common
 
stock
 
and/or
 
junior
 
subordinated
debentures. Under
 
this program,
 
the Corporation
 
repurchased
2,778,298
 
shares of common
 
stock through
 
open market
 
transactions at
an average
 
price of
 
$
18.00
 
for a
 
total cost
 
of approximately
 
$
50.0
 
million during
 
the first
 
half of
 
2025. In
 
addition, the
 
Corporation
redeemed
 
$
61.7
 
million
 
of
 
outstanding
 
junior
 
subordinated
 
debentures.
 
As
 
of
 
June
 
30,
 
2025,
 
the
 
Corporation
 
has
 
remaining
authorization of approximately $
88.3
 
million, which it expects to execute during the remainder of 2025.
From
 
July
 
1,
 
2025
 
to
 
August
 
5,
 
2025,
 
the
 
Corporation
 
repurchased
1,038,151
 
shares
 
of
 
common
 
stock
 
for
 
a
 
total
 
cost
 
of
approximately $
21.7
 
million. As of August 5, 2025, the Corporation has remaining authorization
 
of approximately $
66.6
 
million.
Repurchases
 
under
 
the
 
program
 
may
 
be
 
executed
 
through
 
open
 
market
 
purchases,
 
accelerated
 
share
 
repurchases,
 
privately
negotiated
 
transactions
 
or plans,
 
including
 
plans complying
 
with Rule
 
10b5-1
 
under
 
the Exchange
 
Act, and/or
 
redemption of
 
junior
subordinated
 
debentures, and
 
will be
 
conducted
 
in accordance
 
with applicable
 
legal and
 
regulatory requirements
 
.
 
The Corporation
 
’s
repurchase
 
program
 
is
 
subject
 
to
 
various
 
factors,
 
including
 
the
 
Corporation’s
 
capital
 
position,
 
liquidity,
 
financial
 
performance
 
and
alternative uses
 
of capital,
 
stock trading
 
price, and
 
general market
 
conditions. The
 
repurchase program
 
does not
 
obligate it to
 
acquire
any
 
specific
 
number
 
of
 
shares
 
and
 
does
 
not
 
have
 
an
 
expiration
 
date.
 
The
 
repurchase
 
program
 
may
 
be
 
modified,
 
suspended,
 
or
terminated
 
at any
 
time at
 
the Corporation’s
 
discretion. Any
 
repurchased shares
 
of common
 
stock are
 
expected to
 
be held
 
as treasury
shares.
 
The
 
Corporation’s
 
holding
 
company
 
has no
 
operations
 
and
 
depends
 
on dividends,
 
distributions
 
and
 
other
 
payments from
 
its
subsidiaries to fund dividend payments, stock repurchases, and to
 
fund all payments on its obligations, including debt obligations.
Common Stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following
 
table shows
 
the changes
 
in shares
 
of common
 
stock outstanding
 
for the quarters
 
and six-month
 
periods ended
 
June
30, 2025 and 2024:
Total
 
Number of Shares
Quarter Ended
Six-Month Period Ended
June 30,
June 30,
2025
2024
2025
2024
Common stock outstanding, beginning of period
163,104,181
166,707,047
163,868,877
169,302,812
Common stock repurchased
(1)
(1,589,748)
(2,840,591)
(2,966,564)
(5,983,180)
Common stock reissued under stock-based compensation plan
-
556
614,300
549,285
Restricted stock forfeited
(6,638)
(1,559)
(8,818)
(3,464)
Common stock outstanding, end of period
161,507,795
163,865,453
161,507,795
163,865,453
(1)
For the quarter
 
and six-month
 
period ended
 
June 30, 2025
 
includes
6,017
 
and
188,266
 
shares, respectively,
 
of common stock
 
surrendered to
 
cover plan participants’
 
payroll and income
taxes. For
 
the quarter
 
and six-month
 
period ended
 
June 30,
 
2024 includes
270
 
and
136,308
 
shares, respectively,
 
of common
 
stock surrendered
 
to cover
 
plan participants’
 
payroll and
income taxes.
For the
 
quarter and
 
six-month period
 
ended June
 
30, 2025,
 
total cash
 
dividends declared
 
on shares
 
of common
 
stock amounted
 
to
$
29.0
 
million
 
($
0.18
 
per
 
share)
 
and
 
$
58.6
 
million
 
($
0.36
 
per
 
share),
 
respectively,
 
compared
 
to
 
$
26.6
 
million
 
($
0.16
 
per
 
share)
 
and
$
53.4
 
million ($
0.32
 
per share),
 
respectively,
 
for the
 
same periods
 
of 2024.
 
On
July 21, 2025
, the
 
Corporation’s
 
Board of
 
Directors
declared
 
a
 
quarterly
 
cash
 
dividend
 
of
 
$
0.18
 
per
 
common
 
share.
 
The
 
dividend
 
is payable
 
on
September 12, 2025
 
to
 
shareholders
 
of
record at the
 
close of business on
August 28, 2025
. The Corporation
 
intends to continue
 
to pay quarterly dividends
 
on common stock.
However,
 
the Corporation’s
 
common stock
 
dividends, including
 
the declaration,
 
timing, and
 
amount, remain
 
subject to
 
consideration
and approval by the Corporation’s
 
Board of Directors at the relevant times.
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
56
Preferred Stock
The Corporation
 
has
50,000,000
 
authorized shares of
 
preferred stock with
 
a par value
 
of $
1.00
, subject to
 
certain terms. This
 
stock
may
 
be
 
issued
 
in
 
series
 
and
 
the
 
shares
 
of
 
each
 
series
 
have
 
such
 
rights
 
and
 
preferences
 
as
 
are
 
fixed
 
by
 
the
 
Corporation’s
 
Board
 
of
Directors
 
when
 
authorizing
 
the
 
issuance
 
of
 
that
 
particular
 
series
 
and
 
are
 
redeemable
 
at
 
the
 
Corporation’s
 
option.
No
 
shares
 
of
preferred stock were outstanding as of June 30, 2025 and December 31, 2024.
Treasury Stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following
 
table shows the
 
changes in
 
shares of treasury
 
stock for
 
the quarters and
 
six-month periods
 
ended June 30,
 
2025 and
2024:
Total
 
Number of Shares
Quarter Ended
Six-Month Period Ended
June 30,
June 30,
2025
2024
2025
2024
Treasury stock, beginning of period
60,558,935
56,956,069
59,794,239
54,360,304
Common stock repurchased
1,589,748
2,840,591
2,966,564
5,983,180
Common stock reissued under stock-based compensation plan
-
(556)
(614,300)
(549,285)
Restricted stock forfeited
6,638
1,559
8,818
3,464
Treasury stock, end of period
62,155,321
59,797,663
62,155,321
59,797,663
FirstBank Statutory Reserve (Legal Surplus)
The
 
Puerto
 
Rico
 
Banking
 
Law
 
of
 
1933,
 
as
 
amended
 
(the
 
“Puerto
 
Rico
 
Banking
 
Law”),
 
requires
 
that
 
a
 
minimum
 
of
10
%
 
of
FirstBank’s
 
net income
 
for
 
the year
 
be transferred
 
to a
 
legal surplus
 
reserve
 
until such
 
surplus
 
equals the
 
total of
 
paid-in-capital
 
on
common and preferred
 
stock. Amounts transferred
 
to the legal surplus
 
reserve from retained
 
earnings are not available
 
for distribution
to the Corporation without the
 
prior consent of the Puerto
 
Rico Commissioner of Financial Institutions.
The Puerto Rico Banking Law
provides that, when the expenditures of a Puerto Rico commercial bank are greater than receipts, the excess of the expenditures over
receipts must be charged against the undistributed profits of the bank, and the balance, if any, must be charged against the legal
surplus reserve, as a reduction thereof. If the legal surplus reserve is not sufficient to cover such balance in whole or in part, the
outstanding amount must be charged against the capital account and the Bank cannot pay dividends until it can replenish the legal
surplus reserve to an amount of at least 20% of the original capital contributed.
 
FirstBank’s
 
legal surplus
 
reserve, included
 
as part
 
of
retained earnings
 
in the
 
Corporation’s
 
consolidated statements
 
of financial
 
condition, amounted
 
to $
230.2
 
million as
 
of each
 
of June
30, 2025 and December 31, 2024. There were
no
 
transfers to the legal surplus reserve during the first half of 2025.
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
57
NOTE 12 – ACCUMULATED
 
OTHER COMPREHENSIVE LOSS
 
The
 
following
 
table
 
presents
 
the
 
changes
 
in
 
accumulated
 
other
 
comprehensive
 
loss for
 
the quarters
 
and
 
six-month
 
periods
 
ended
June 30, 2025 and 2024:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Changes in Accumulated Other Comprehensive
 
Loss by Component
(1)
Quarter Ended June 30,
Six-Month Period Ended June 30,
2025
2024
2025
2024
(In thousands)
Net unrealized holding losses on available-for-sale
 
debt securities:
Beginning balance
$
(483,277)
$
(655,617)
$
(567,338)
$
(640,552)
 
Other comprehensive income (loss)
(2)
41,205
10,560
125,266
(4,505)
Ending balance
$
(442,072)
$
(645,057)
$
(442,072)
$
(645,057)
Adjustment of pension and postretirement
 
benefit plans:
Beginning balance
$
782
$
1,382
$
782
$
1,382
 
Other comprehensive income
-
-
-
-
Ending balance
$
782
$
1,382
$
782
$
1,382
(1)
All amounts presented are net of tax.
(2)
Net unrealized holding gains (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.
NOTE 13 – EMPLOYEE BENEFIT PLANS
The Corporation
 
maintains two frozen
 
qualified noncontributory
 
defined benefit pension
 
plans (the “Pension
 
Plans”), and
 
a related
complementary
 
post-retirement
 
benefit
 
plan
 
(the
 
“Postretirement
 
Benefit
 
Plan”)
 
covering
 
medical
 
benefits
 
and
 
life
 
insurance
 
after
retirement
 
that
 
it
 
obtained
 
in
 
the
 
Banco
 
Santander
 
Puerto
 
Rico
 
(“BSPR”)
 
acquisition
 
on
 
September
 
1,
 
2020.
 
One
 
defined
 
benefit
pension
 
plan covers
 
substantially all
 
of BSPR’s
 
former
 
employees who
 
were active
 
before January
 
1, 2007,
 
while
 
the other
 
defined
benefit pension plan covers personnel of an institution previously acquired
 
by BSPR. Benefits are based on salary and years of service.
The accrual of benefits under the Pension Plans is frozen to all participants.
The following table presents the components of net periodic benefit for the indicated
 
periods:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Affected Line Item
in the Consolidated
Quarter Ended June 30,
Six-Month Period Ended June 30,
Statements of Income
2025
2024
2025
2024
(In thousands)
Net periodic benefit, pension plans:
Interest cost
Other expenses
$
930
$
901
$
1,858
$
1,802
Expected return on plan assets
Other expenses
(998)
(1,018)
(1,996)
(2,036)
Net periodic benefit, pension plans
(68)
(117)
(138)
(234)
Net periodic cost, postretirement plan
Other expenses
6
16
13
32
Net periodic benefit
$
(62)
$
(101)
$
(125)
$
(202)
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
58
NOTE 14 –
 
INCOME TAXES
 
The Corporation is subject to Puerto Rico income tax on
 
its income from all sources. Under the Puerto Rico Internal
 
Revenue Code,
as amended (the “PR Tax
 
Code”), the Corporation and its subsidiaries are treated as
 
separate taxable entities and are not entitled to file
consolidated tax returns. However,
 
certain subsidiaries that are
 
organized as limited liability
 
companies with a partnership
 
election are
treated
 
as
 
pass-through
 
entities
 
for
 
Puerto
 
Rico
 
tax
 
purposes.
 
Furthermore,
 
the
 
Corporation
 
conducts
 
business
 
through
 
entities
 
with
special tax
 
treatments, including
 
an IBE
 
unit of
 
the Bank
 
and through
 
FirstBank Overseas
 
Corporation,
 
each of
 
which are
 
generally
exempt
 
from
 
Puerto
 
Rico
 
income
 
taxation
 
under
 
the
 
International
 
Banking
 
Entity
 
Act
 
of
 
Puerto
 
Rico
 
(“IBE
 
Act”),
 
and
 
through
 
a
wholly-owned
 
subsidiary
 
that
 
engages
 
in
 
certain
 
Puerto
 
Rico
 
qualified
 
investing
 
and
 
lending
 
activities
 
with
 
certain
 
tax
 
advantages
under Act 60 of 2019.
For the
 
quarter and
 
six-month period
 
ended June
 
30, 2025,
 
the Corporation
 
recorded an
 
income tax
 
expense of
 
$
22.7
 
million and
$
45.9
 
million, respectively,
 
compared to an
 
income tax expense of
 
$
25.5
 
million and $
49.5
 
million, respectively,
 
for the same periods
in 2024. The
 
decrease in income
 
tax expense for
 
the second quarter
 
and six-month period
 
ended June 30,
 
2025 was driven
 
by a lower
estimated annual
 
effective tax rate
 
due to a
 
higher proportion of
 
exempt to taxable
 
income and a
 
$
0.5
 
million tax contingency
 
accrual
release during the second quarter of
 
2025 in connection with the expiration
 
of the statute of limitation on some
 
uncertain tax positions.
The
 
Corporation’s
 
estimated
 
annual
 
effective
 
tax
 
rate,
 
excluding
 
entities
 
with
 
pre-tax
 
losses
 
from
 
which
 
a
 
tax
 
benefit
 
cannot
 
be
recognized and discrete items, was
22.8
% for the first six months of 2025, compared to
24.1
% for the same period in 2024.
Income
 
tax
 
expense
 
also
 
includes
 
USVI
 
income
 
taxes,
 
as
 
well
 
as
 
applicable
 
U.S.
 
federal
 
and
 
state
 
taxes.
 
As
 
a
 
Puerto
 
Rico
corporation, FirstBank
 
is treated as
 
a foreign corporation
 
for U.S. and
 
USVI income tax
 
purposes and is
 
generally subject to
 
U.S. and
USVI income
 
tax only
 
on its
 
income from
 
sources within
 
the U.S.
 
and USVI
 
or income
 
effectively
 
connected with
 
the conduct
 
of a
trade or business in those jurisdictions.
 
Such tax paid in the U.S. and USVI
 
is also creditable against the Corporation’s
 
Puerto Rico tax
liability,
 
subject to
 
certain conditions
 
and limitations.
 
For the
 
quarter and
 
six-month period
 
ended June
 
30, 2025,
 
FirstBank incurred
current income
 
tax expense
 
of approximately
 
$
2.8
 
million and
 
$
5.4
 
million, respectively,
 
related to
 
its U.S.
 
operations, compared
 
to
$
2.9
 
million and $
5.1
 
million, respectively,
 
for the comparable periods in 2024.
As of June
 
30, 2025, the
 
Corporation had
 
a net deferred
 
tax asset of
 
$
134.8
 
million, net of
 
a valuation allowance
 
of $
103.3
 
million
against the deferred tax asset, compared to a net deferred tax asset of $
136.4
 
million, net of a valuation allowance of $
119.1
 
million, as
of December
 
31, 2024.
 
The net deferred
 
tax asset
 
of the
 
Corporation’s
 
banking subsidiary,
 
FirstBank, amounted
 
to $
134.8
 
million as
of
 
June
 
30,
 
2025,
 
net
 
of
 
a
 
valuation
 
allowance
 
of
 
$
82.8
 
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
 
was mainly
 
related to
 
the
usage of
 
alternative minimum
 
tax credits.
 
Meanwhile, the
 
decrease in the
 
valuation allowance
 
was related primarily
 
to changes in
 
the
market
 
value
 
of available
 
-for-sale
 
debt
 
securities,
 
which
 
resulted
 
in an
 
equal change
 
in the
 
net deferred
 
tax asset
 
without
 
impacting
earnings.
 
The Corporation
 
maintains a
 
full valuation
 
allowance for
 
its deferred
 
tax assets
 
associated with
 
capital loss
 
carryforwards,
net operating loss (“NOL”) carryforwards and unrealized losses of available
 
-for-sale debt securities.
See Note 20
 
– “Income Taxes,”
 
to the audited
 
consolidated financial statements
 
included in the
 
2024 Annual Report
 
on Form 10-K
for information on the tax
 
treatment of NOL carryforwards and dividend
 
received deduction under the PR Tax
 
Code and the limitation
under Section 382 of the U.S. Internal Revenue Code.
The amount
 
of unrecognized
 
tax benefits
 
may increase
 
or decrease
 
in the
 
future for
 
various reasons,
 
including adding
 
amounts for
current tax
 
year positions,
 
expiration of
 
open income
 
tax returns
 
due to the
 
statute of
 
limitations, changes
 
in management’s
 
judgment
about the level of uncertainty,
 
the status of examinations, litigation and legislative activity,
 
and the addition or elimination of uncertain
tax positions.
 
The statute
 
of limitations
 
under the
 
PR Tax
 
Code is
 
four years
 
after a
 
tax return
 
is due
 
or filed,
 
whichever is
 
later; the
statute of
 
limitations for
 
U.S. and
 
USVI income
 
tax purposes
 
is three
 
years after
 
a tax
 
return is
 
due or
 
filed, whichever
 
is later.
 
For
U.S. and
 
USVI income
 
tax purposes,
 
all tax
 
years subsequent
 
to 2020
 
remain open
 
to examination.
 
For Puerto
 
Rico tax
 
purposes, all
tax years subsequent to 2019 remain open to examination.
On July 17, 2025, the Government of Puerto Rico enacted Act 65-2025 which, among other things, allows domestic LLCs owned
by legal entities to be treated as disregarded entities. As this legislation was enacted after the Corporation’s reporting date of June 30,
2025, no adjustments have been made to the financial statements as of that date. However, management is currently evaluating the
implications of this new law. As of June 30, 2025, the Corporation maintained a full valuation allowance of $16.8 million against its
deferred tax assets related to NOL carryforwards at the holding company level, which based on preliminary analysis, the Corporation
anticipates that it could significantly reduce the need for a valuation allowance.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
59
NOTE 15 –
 
FAIR VALUE
Fair Value
 
Measurement
 
ASC Topic
 
820, “Fair Value
 
Measurement,” defines
 
fair value as the
 
exchange price that
 
would be received
 
for an asset or
 
paid to
transfer
 
a
 
liability
 
(an
 
exit
 
price)
 
in
 
the
 
principal
 
or
 
most
 
advantageous
 
market
 
for
 
the
 
asset
 
or
 
liability
 
in
 
an
 
orderly
 
transaction
between market
 
participants on
 
the measurement
 
date. This
 
guidance also
 
establishes a
 
fair value
 
hierarchy for
 
classifying assets
 
and
liabilities, which is based on
 
whether the inputs to
 
the valuation techniques used
 
to measure fair value are
 
observable or unobservable.
One of three levels of inputs may be used to measure fair value:
 
Level 1
 
Valuations
 
of
 
Level
 
1
 
assets
 
and
 
liabilities
 
are
 
obtained
 
from
 
readily-available
 
pricing
 
sources
 
for
 
market
transactions involving identical assets or liabilities in active markets.
 
Level 2
 
Va
luations of
 
Level 2 assets
 
and liabilities
 
are based on
 
observable inputs
 
other than Level
 
1 prices, such
 
as quoted
prices for similar assets or liabilities, or other inputs that are
 
observable or can be corroborated by observable market
data for substantially the full term of the assets or liabilities.
 
Level 3
 
Va
luations of Level 3 assets and
 
liabilities are based on unobservable
 
inputs that are supported by
 
little or no market
activity and
 
are significant to
 
the fair value
 
of the assets
 
or liabilities. Level
 
3 assets and
 
liabilities include financial
instruments
 
whose value
 
is determined
 
by using
 
pricing models
 
for
 
which
 
the determination
 
of fair
 
value
 
requires
significant management judgment as to the estimation.
See Note 23 –
 
“Fair Value,”
 
to the audited consolidated
 
financial statements included
 
in the 2024 Annual
 
Report on Form 10-K
 
for
a description of the valuation methodologies used to measure financial instruments
 
at fair value on a recurring basis.
 
There
 
were
 
no
 
transfers
 
of
 
assets
 
and
 
liabilities
 
measured
 
at
 
fair
 
value
 
between
 
Level
 
1
 
and
 
Level
 
2
 
measurements
 
during
 
the
quarters and six-month periods ended June 30, 2025 and 2024.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets and liabilities measured at fair value on a recurring basis are summarized below as of
 
the indicated dates:
As of June 30, 2025
As of December 31, 2024
Fair Value Measurements Using
 
Fair Value Measurements Using
 
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
(In thousands)
Assets:
 
Available-for-sale debt securities:
U.S. Treasury securities
$
217,432
$
-
$
-
$
217,432
$
59,189
$
-
$
-
$
59,189
Noncallable U.S. agencies debt securities
-
548,336
-
548,336
-
533,296
-
533,296
Callable U.S. agencies debt securities
-
989,873
-
989,873
-
1,307,035
-
1,307,035
MBS
-
2,735,305
3,781
(1)
2,739,086
-
2,658,967
4,195
(1)
2,663,162
Puerto Rico government obligation
-
-
1,576
1,576
-
-
1,620
1,620
Other investments
-
-
500
500
-
-
1,000
1,000
 
Equity securities
4,971
-
-
4,971
4,886
-
-
4,886
 
Derivative assets
-
298
-
298
-
318
-
318
Liabilities:
 
Derivative liabilities
-
324
-
324
-
150
-
150
(1) Related to private label MBS.
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
60
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The table
 
below presents
 
a reconciliation
 
of the
 
beginning and
 
ending balances
 
of all
 
assets measured
 
at fair
 
value on
 
a recurring
basis using significant unobservable inputs (Level 3) for the quarters
 
and six-month periods ended June 30, 2025 and 2024:
Quarter Ended June 30,
Six-Month Period Ended June 30,
2025
2024
2025
2024
Level 3 Instruments Only
 
 
Securities Available
for Sale
(1)
Securities Available
for Sale
(1)
Securities Available
for Sale
(1)
Securities Available
for Sale
(1)
(In thousands)
Beginning balance
$
6,633
$
6,275
$
6,815
$
6,200
 
Total gains (losses):
 
Included in other comprehensive income (unrealized)
245
175
291
414
 
Included in earnings (unrealized)
(2)
3
(60)
8
9
 
Purchases
-
1,000
-
1,000
 
Principal repayments and amortization
(3)
(1,024)
(291)
(1,257)
(524)
Ending balance
$
5,857
$
7,099
$
5,857
$
7,099
___________________
(1)
Amounts mostly related to private label MBS.
(2)
Changes in unrealized gains (losses) included in earnings were
 
recognized within provision for credit losses – benefit (expense)
 
and relate to assets still held as of the reporting date.
(3)
For the quarter and six-month period ended June 30,
 
2025, includes a $
0.5
 
million repayment of a matured debt security.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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:
June 30, 2025
Fair Value
Valuation Technique
Unobservable Input
Range
Weighted
Average
Minimum
 
Maximum
(Dollars in thousands)
Available-for-sale
 
debt securities:
 
Private label MBS
$
3,781
Discounted cash flows
Discount rate
16.1%
16.1%
16.1%
Prepayment rate
1.6%
3.1%
2.5%
Projected cumulative loss rate
0.1%
6.9%
3.6%
 
Puerto Rico government obligation
$
1,576
Discounted cash flows
Discount rate
11.5%
11.5%
11.5%
Projected cumulative loss rate
24.3%
24.3%
24.3%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2024
Fair Value
Valuation Technique
Unobservable Input
Range
Weighted
Average
Minimum
 
Maximum
(Dollars in thousands)
Available-for-sale
 
debt securities:
 
Private label MBS
$
4,195
Discounted cash flows
Discount rate
16.6%
16.6%
16.6%
Prepayment rate
0.0%
5.7%
3.2%
Projected cumulative loss rate
0.1%
10.1%
4.9%
 
Puerto Rico government obligation
$
1,620
Discounted cash flows
Discount rate
11.5%
11.5%
11.5%
Projected cumulative loss rate
23.9%
23.9%
23.9%
 
 
Information about Sensitivity to Changes in Significant Unobservable Inputs
Private label
 
MBS: The
 
significant unobservable
 
inputs in
 
the valuation
 
include probability
 
of default,
 
the loss
 
severity
 
assumption,
and prepayment
 
rates. Shifts
 
in those
 
inputs would
 
result in different
 
fair value
 
measurements. Increases
 
in the probability
 
of default,
loss
 
severity
 
assumptions,
 
and
 
prepayment
 
rates
 
in
 
isolation
 
would
 
generally
 
result
 
in
 
an
 
adverse
 
effect
 
on
 
the
 
fair
 
value
 
of
 
the
instruments. The Corporation modeled meaningful and possible
 
shifts of each input to assess the effect on the fair value estimation.
Puerto Rico Government Obligation:
 
The significant unobservable input used in the
 
fair value measurement is the assumed loss rate of
the
 
underlying
 
residential
 
mortgage
 
loans
 
that
 
collateralize
 
a
 
pass-through
 
MBS
 
guaranteed
 
by
 
the
 
PRHFA.
 
A
 
significant
 
increase
(decrease) in
 
the assumed
 
rate would
 
lead to
 
a (lower)
 
higher fair
 
value estimate.
 
See Note
 
2 –
 
“Debt Securities”
 
for information
 
on
the methodology used to calculate the fair value of this debt security.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
61
Additionally, fair value
 
is used on a non-recurring basis to evaluate certain assets in accordance with GAAP.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For
 
the
 
quarter
 
and
 
six-month
 
period
 
ended
 
June
 
30,
 
2025,
 
the
 
Corporation
 
recorded
 
losses
 
or
 
valuation
 
adjustments
 
for
 
assets
recognized at fair value on a non-recurring basis and still held at June 30,
 
2025, as shown in the following table:
Carrying value as of June 30, 2025
Related to losses
 
recorded for the
Quarter Ended
June 30, 2025
Related to losses
 
recorded for the
Six-Month Period Ended
June 30, 2025
Losses recorded for the
Quarter Ended
June 30, 2025
Losses recorded for the
Six-Month Period Ended
June 30, 2025
(In thousands)
Level 3:
Loans receivable
(1)
$
4,338
$
8,967
$
(455)
$
(684)
OREO
(2)
371
620
(153)
(152)
(1)
Consists mainly of
 
collateral dependent commercial
 
and construction
 
loans. The
 
Corporation generally measured
 
losses based
 
on the fair
 
value of the
 
collateral. The
 
Corporation derived
the fair values from
 
external appraisals that
 
took into consideration prices
 
in observed transactions
 
involving similar assets
 
in similar locations but
 
adjusted for specific characteristics
 
and
assumptions
 
of
 
the
 
collateral
 
(e.g.,
 
absorption
 
rates),
 
which
 
are
 
not
 
market
 
observable.
 
There
 
were
no
 
adjustments
 
applied
 
on
 
appraisals
 
for
 
the
 
quarter
 
ended
 
June
 
30,
 
2025.
 
The
adjustment applied on appraisals was of
22
% for the six-month period ended June 30, 2025.
(2)
The Corporation
 
derived the
 
fair values
 
from appraisals
 
that took
 
into consideration
 
prices in
 
observed transactions
 
involving similar
 
assets in
 
similar locations
 
but adjusted
 
for specific
characteristics and assumptions of
 
the properties (e.g., absorption
 
rates and net operating income
 
of income producing properties),
 
which are not market observable.
 
Losses were related to
market valuation adjustments after the transfer of the loans to the
 
OREO portfolio. The adjustment applied on appraisals for the quarter
 
and six-month period ended June 30, 2025 was
4
% .
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For
 
the
 
quarter
 
and
 
six-month
 
period
 
ended
 
June
 
30,
 
2024,
 
the
 
Corporation
 
recorded
 
losses
 
or
 
valuation
 
adjustments
 
for
 
assets
recognized at fair value on a non-recurring basis and still held at June 30,
 
2024, as shown in the following table:
Carrying value as of June 30, 2024
Related to losses
 
 
recorded for the
 
Quarter Ended
 
June 30, 2024
Related to losses
 
recorded for the
Six-Month Period Ended
 
June 30, 2024
Losses recorded for the
 
Quarter Ended
 
June 30, 2024
Losses recorded for the
Six-Month Period Ended
June 30, 2024
(In thousands)
Level 3:
Loans receivable
(1)
$
25,930
$
26,117
$
(107)
$
(144)
OREO
(2)
1,044
1,292
(55)
(171)
Level 2:
(1)
Consists mainly of
 
collateral dependent commercial
 
and construction
 
loans. The
 
Corporation generally measured
 
losses based
 
on the fair
 
value of the
 
collateral. The
 
Corporation derived
the fair values from
 
external appraisals that
 
took into consideration prices
 
in observed transactions
 
involving similar assets
 
in similar locations but
 
adjusted for specific characteristics
 
and
assumptions of the
 
collateral (e.g., absorption
 
rates), which are
 
not market observable.
 
The adjustments applied
 
on appraisals were
 
of
4
% for the quarter
 
and six-month period
 
ended June
30, 2024.
(2)
The Corporation
 
derived the
 
fair values
 
from appraisals
 
that took
 
into consideration
 
prices in
 
observed transactions
 
involving similar
 
assets in
 
similar locations
 
but adjusted
 
for specific
characteristics and assumptions of
 
the properties (e.g., absorption
 
rates and net operating income
 
of income producing properties),
 
which are not market observable.
 
Losses were related to
market valuation adjustments
 
after the transfer
 
of the loans
 
to the OREO
 
portfolio. The adjustments
 
applied ranged from
2
% to
18
% for the
 
quarter and six-month
 
period ended
 
June 30,
2024.
 
See Note 23 –
 
“Fair Value,”
 
to the audited
 
consolidated financial statements
 
included in the
 
2024 Annual Report
 
on Form 10-K
 
for
qualitative
 
information
 
regarding
 
the
 
fair
 
value
 
measurements
 
for
 
Level
 
3
 
financial
 
instruments
 
measured
 
at
 
fair
 
value
 
on
 
a
nonrecurring basis.
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
62
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 June 30, 2025
Fair Value Estimate as
 
of
June 30, 2025
Level 1
Level 2
Level 3
(In thousands)
Assets:
Cash and due from banks and money market investments (amortized
 
cost)
$
736,710
$
736,710
$
736,710
$
-
$
-
Available-for-sale debt
 
securities (fair value)
4,496,803
4,496,803
217,432
4,273,514
5,857
Held-to-maturity debt securities:
 
Held-to-maturity debt securities (amortized cost)
307,286
 
Less: ACL on held-to-maturity debt securities
(765)
 
Held-to-maturity debt securities, net of ACL
$
306,521
299,846
-
204,140
95,706
Equity securities (amortized cost)
40,231
40,231
-
40,231
(1)
-
Other equity securities (fair value)
4,971
4,971
4,971
-
-
Loans held for sale (lower of cost or market)
9,857
10,031
-
10,031
-
Loans held for investment:
 
Loans held for investment (amortized cost)
12,870,002
 
Less: ACL for loans and finance leases
(248,578)
 
Loans held for investment, net of ACL
$
12,621,424
12,499,610
-
-
12,499,610
MSRs (amortized cost)
24,130
42,617
-
-
42,617
Derivative assets (fair value)
 
(2)
298
298
-
298
-
Liabilities:
Deposits (amortized cost)
$
16,554,038
$
16,554,177
$
-
$
16,554,177
$
-
Long-term advances from the FHLB (amortized cost)
320,000
322,142
-
322,142
-
Derivative liabilities (fair value)
 
(2)
324
324
-
324
-
(1) Includes FHLB stock with a carrying value of $
26.1
 
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)
63
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Carrying Amount
in Statement of
Financial Condition as
of December 31, 2024
Fair Value Estimate as
 
of
December 31, 2024
Level 1
Level 2
Level 3
(In thousands)
Assets:
Cash and due from banks and money market investments (amortized
 
cost)
$
1,159,415
$
1,159,415
$
1,159,415
$
-
$
-
Available-for-sale debt
 
securities (fair value)
4,565,302
4,565,302
59,189
4,499,298
6,815
Held-to-maturity debt securities:
 
Held-to-maturity debt securities (amortized cost)
317,786
 
Less: ACL on held-to-maturity debt securities
(802)
 
Held-to-maturity debt securities, net of ACL
$
316,984
308,040
-
212,432
95,608
Equity securities (amortized cost)
47,132
47,132
-
47,132
(1)
-
Other equity securities (fair value)
4,886
4,886
4,886
-
-
Loans held for sale (lower of cost or market)
15,276
15,276
-
15,276
-
Loans held for investment:
 
 
Loans held for investment (amortized cost)
12,746,556
 
Less: ACL for loans and finance leases
(243,942)
 
Loans held for investment, net of ACL
$
12,502,614
12,406,405
-
-
12,406,405
MSRs (amortized cost)
25,019
43,046
-
-
43,046
Derivative assets (fair value)
(2)
318
318
-
318
-
Liabilities:
Deposits (amortized cost)
$
16,871,298
$
16,872,963
$
-
$
16,872,963
$
-
Long-term advances from the FHLB (amortized cost)
500,000
500,128
-
500,128
-
Junior subordinated debentures (amortized cost)
61,700
61,752
-
-
61,752
Derivative liabilities (fair value)
(2)
150
150
-
150
-
(1) Includes FHLB stock with a carrying value of $
34.0
 
million, which is considered restricted.
(2) Includes interest rate swap agreements, forward contracts, and interest rate lock commitments.
The short-term nature
 
of certain assets and
 
liabilities result in their
 
carrying value approximating
 
fair value. These include
 
cash and
cash
 
due
 
from
 
banks
 
and
 
other
 
short-term
 
assets,
 
such
 
as
 
FHLB
 
stock.
 
Certain
 
assets,
 
the
 
most
 
significant
 
being
 
premises
 
and
equipment,
 
goodwill
 
and
 
other
 
intangible
 
assets, are
 
not
 
considered
 
financial
 
instruments
 
and
 
are
 
not
 
included
 
above. Accordingly,
this
 
fair
 
value
 
information
 
is not
 
intended
 
to, and
 
does not,
 
represent
 
the Corporation’s
 
underlying
 
value.
 
Many of
 
these assets
 
and
liabilities that
 
are subject
 
to the
 
disclosure requirements
 
are not
 
actively traded,
 
requiring management
 
to estimate
 
fair values.
 
These
estimates
 
necessarily
 
involve
 
the
 
use
 
of
 
assumptions
 
and
 
judgment
 
about
 
a
 
wide
 
variety
 
of
 
factors,
 
including
 
but
 
not
 
limited
 
to,
relevancy of market prices of comparable instruments, expected future
 
cash flows, and appropriate discount rates.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
64
NOTE 16 – REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue Recognition
 
In accordance with
 
ASC Topic
 
606, “Revenue from
 
Contracts with Customers” (“ASC
 
Topic
 
606”), revenues are
 
recognized when
control
 
of
 
promised
 
goods
 
or
 
services
 
is
 
transferred
 
to
 
customers
 
and
 
in
 
an
 
amount
 
that
 
reflects
 
the
 
consideration
 
to
 
which
 
the
Corporation expects to be
 
entitled in exchange for those
 
goods or services. At contract
 
inception, once the contract is
 
determined to be
within the
 
scope of
 
ASC Topic
 
606, the
 
Corporation assesses
 
the goods
 
or services
 
that are
 
promised within
 
each contract,
 
identifies
the
 
respective
 
performance
 
obligations,
 
and
 
assesses
 
whether
 
each
 
promised
 
good
 
or
 
service
 
is
 
distinct.
 
The
 
Corporation
 
then
recognizes
 
as revenue
 
the amount
 
of the
 
transaction price
 
that is
 
allocated to
 
the respective
 
performance obligation
 
when (or
 
as) the
performance obligation is satisfied.
Disaggregation of Revenue
 
The
 
following
 
tables
 
summarize
 
the
 
Corporation’s
 
revenue,
 
which
 
includes
 
net
 
interest
 
income
 
on
 
financial
 
instruments
 
that
 
is
outside of
 
ASC Topic
 
606 and
 
non-interest income,
 
disaggregated by
 
type of
 
service and
 
business segment
 
for the
 
quarters and
 
six-
month periods ended June 30, 2025 and 2024:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter ended June 30, 2025
Mortgage
Banking
Consumer
(Retail)
Banking
Commercial
and Corporate
Treasury and
Investments
United States
Operations
Virgin Islands
Operations
Total
(In thousands)
Net interest income (loss)
(1)
$
17,670
$
145,902
$
42,056
$
(27,130)
$
20,442
$
16,919
$
215,859
Service charges and fees on deposit accounts
-
7,365
1,487
-
147
757
9,756
Insurance commission income
-
2,295
-
-
54
189
2,538
Card and processing income
-
10,375
229
-
31
1,245
11,880
Other service charges and fees
13
1,720
22
-
285
131
2,171
Not in scope of ASC Topic
 
606
 
(1)
3,485
609
157
19
345
(10)
4,605
 
Total non-interest income
3,498
22,364
1,895
19
862
2,312
30,950
Total Revenue (Loss)
$
21,168
$
168,266
$
43,951
$
(27,111)
$
21,304
$
19,231
$
246,809
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter ended June 30, 2024
Mortgage
Banking
Consumer
(Retail)
Banking
Commercial
and Corporate
Treasury and
Investments
United States
Operations
Virgin Islands
Operations
Total
(In thousands)
Net interest income (loss)
(1)
$
18,185
$
135,852
$
38,519
$
(27,066)
$
18,960
$
15,178
$
199,628
Service charges and fees on deposit accounts
-
7,666
1,125
-
155
779
9,725
Insurance commission income
-
2,563
-
-
30
193
2,786
Card and processing income
-
9,848
226
-
31
1,418
11,523
Other service charges and fees
41
1,753
238
-
613
153
2,798
Not in scope of ASC Topic
 
606
 
(1)
3,565
1,304
160
122
16
39
5,206
 
Total non-interest income
3,606
23,134
1,749
122
845
2,582
32,038
Total Revenue (Loss)
$
21,791
$
158,986
$
40,268
$
(26,944)
$
19,805
$
17,760
$
231,666
 
 
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
65
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six-Month Period Ended June 30, 2025
Mortgage
Banking
Consumer
(Retail)
Banking
Commercial
and Corporate
Treasury and
Investments
United States
Operations
Virgin Islands
Operations
Total
(In thousands)
Net interest income (loss)
(1)
$
35,256
$
288,917
$
84,865
$
(54,789)
$
41,231
$
32,776
$
428,256
Service charges and fees on deposit accounts
-
14,680
2,928
-
289
1,499
19,396
Insurance commission income
-
7,880
-
-
93
370
8,343
Card and processing income
-
19,825
633
-
53
2,844
23,355
Other service charges and fees
34
3,301
41
-
567
270
4,213
Not in scope of ASC Topic
 
606
 
(1)
7,046
2,871
550
170
714
26
11,377
 
Total non-interest income
7,080
48,557
4,152
170
1,716
5,009
66,684
Total Revenue (Loss)
$
42,336
$
337,474
$
89,017
$
(54,619)
$
42,947
$
37,785
$
494,940
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six-Month Period Ended June 30, 2024
Mortgage
Banking
Consumer
(Retail)
Banking
Commercial
and Corporate
Treasury and
Investments
United States
Operations
Virgin Islands
Operations
Total
(In thousands)
Net interest income (loss)
(1)
$
36,331
$
268,991
$
76,095
$
(51,756)
$
36,945
$
29,542
$
396,148
Service charges and fees on deposit accounts
-
15,283
2,281
-
303
1,520
19,387
Insurance commission income
-
7,797
-
-
86
410
8,293
Card and processing income
-
19,487
450
-
109
2,789
22,835
Other service charges and fees
99
3,570
340
-
1,234
294
5,537
Not in scope of ASC Topic
 
606
 
(1)
6,628
2,716
330
233
20
42
9,969
 
Total non-interest income
6,727
48,853
3,401
233
1,752
5,055
66,021
Total Revenue (Loss)
$
43,058
$
317,844
$
79,496
$
(51,523)
$
38,697
$
34,597
$
462,169
(1)
Most of the Corporation’s revenue is not within the scope of ASC Topic 606. The guidance explicitly excludes net interest income from financial assets and liabilities, as well as other non-interest income from loans,
leases, investment securities and derivative financial instruments.
For the quarters
 
and six-month periods
 
ended June 30,
 
2025 and 2024,
 
most of the
 
Corporation’s
 
revenue within the
 
scope of ASC
Topic 606 was related
 
to performance obligations satisfied at a point in time.
See
 
Note
 
24
 
–
 
“Revenue
 
from
 
Contracts
 
with
 
Customers,”
 
to
 
the
 
audited
 
consolidated
 
financial
 
statements
 
included
 
in
 
the
 
2024
Annual Report on Form 10-K for a discussion of major revenue streams under
 
the scope of ASC Topic 606.
 
Contract Balances
As
 
of
 
June
 
30,
 
2025
 
and
 
December
 
31,
 
2024,
 
the
 
Corporation
 
had
no
 
contract
 
assets
 
recorded
 
in
 
its
 
consolidated
 
financial
statements. In addition, the balances of contract liabilities as of those
 
dates were not significant.
Other
 
The Corporation
 
also did
 
not have
 
any material contract
 
acquisition costs
 
and did
 
not make
 
any significant
 
judgments or
 
estimates
in recognizing revenue for financial reporting purposes.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
66
NOTE 17 – SEGMENT INFORMATION
The Corporation’s
 
operating segments
 
are based
 
primarily on
 
the Corporation’s
 
lines of
 
business for
 
its operations
 
in Puerto
 
Rico,
the
 
Corporation’s
 
principal
 
market,
 
and
 
by
 
geographic
 
areas
 
for
 
its
 
operations
 
outside
 
of
 
Puerto
 
Rico.
 
As
 
of
 
June
 
30,
 
2025,
 
the
Corporation
 
had
six
 
reportable
 
segments:
 
Mortgage
 
Banking;
 
Consumer
 
(Retail)
 
Banking;
 
Commercial
 
and
 
Corporate
 
Banking;
Treasury and
 
Investments; United States Operations;
 
and Virgin
 
Islands Operations. The Chief
 
Executive Officer (“CEO”),
 
who is the
designated
 
chief
 
operating
 
decision
 
maker
 
(“CODM”),
 
as
 
ultimate
 
decision
 
maker,
 
evaluates
 
performance
 
and
 
allocates
 
resources
based
 
on financial
 
information
 
provided
 
by management.
 
In determining
 
the reportable
 
segments,
 
the
 
Corporation
 
considers
 
factors
such as
 
the organizational
 
structure, nature
 
of the
 
products,
 
distribution
 
channels, customer
 
relationship
 
management,
 
and economic
characteristics
 
of
 
the
 
business
 
lines.
 
The
 
Corporation
 
evaluates
 
the
 
performance
 
of
 
the
 
segments
 
based
 
on
 
segment
 
income
 
or
 
loss,
which consists of
 
net interest income,
 
the provision for
 
credit losses, non-interest
 
income and
 
non-interest expenses.
 
Segment income
or
 
loss
 
is
 
measured
 
on
 
a
 
pre-tax
 
basis,
 
consistent
 
with
 
the
 
Corporation’s
 
consolidated
 
financial
 
statements
 
under
 
GAAP.
 
The
 
total
segment income or loss equals
 
consolidated pre-tax income or
 
loss, and no adjustments or
 
reconciliations are necessary.
 
The segments
are also
 
evaluated based
 
on the
 
average volume
 
of their
 
interest-earning assets
 
(net of
 
fair value
 
adjustments of
 
investment securities
and the ACL).
The
 
Mortgage
 
Banking
 
segment
 
consists
 
of
 
the
 
origination,
 
sale,
 
and
 
servicing
 
of
 
a
 
variety
 
of
 
residential
 
mortgage
 
loans.
 
The
Mortgage
 
Banking
 
segment
 
also
 
acquires
 
and
 
sells
 
mortgages
 
in
 
the
 
secondary
 
market.
 
The
 
Consumer
 
(Retail)
 
Banking
 
segment
includes the
 
Corporation’s
 
consumer lending,
 
commercial lending
 
to small
 
businesses, commercial
 
transaction banking,
 
and deposit-
taking activities
 
primarily conducted
 
through its
 
branch network
 
and loan
 
centers. The
 
Commercial and
 
Corporate Banking
 
segment
consists of the
 
Corporation’s
 
lending and other
 
services for large
 
customers represented
 
by specialized and
 
middle-market clients and
the government sector.
 
The Commercial and Corporate Banking segment
 
consists of the Corporation’s
 
commercial lending (other than
small
 
business
 
commercial
 
loans)
 
and
 
commercial
 
deposit-taking
 
activities
 
(other
 
than
 
the
 
government
 
sector).
 
The
 
Treasury
 
and
Investments segment
 
is responsible for
 
the Corporation’s
 
investment portfolio
 
and treasury functions
 
that are executed
 
to manage and
enhance
 
liquidity.
 
Under
 
the
 
Corporation’s
 
fund
 
transfer
 
pricing
 
(“FTP”)
 
methodology,
 
the
 
Treasury
 
and
 
Investments
 
segment
centrally
 
manages
 
funding
 
by
 
providing
 
funds
 
to
 
the
 
Mortgage
 
Banking,
 
Consumer
 
(Retail)
 
Banking,
 
Commercial
 
and
 
Corporate
Banking, United States
 
Operations, and Virgin
 
Islands Operations segments
 
to support their lending
 
activities and compensating
 
these
units
 
for
 
deposits
 
gathered.
 
The
 
mismatch
 
between
 
funds
 
provided
 
and
 
funds
 
used
 
is
 
managed
 
by
 
the
 
Treasury
 
and
 
Investments
segment.
 
The
 
funds
 
transfer
 
pricing
 
charged
 
or
 
credited
 
are
 
calculated
 
using
 
the
 
SOFR/swap
 
curve
 
with
 
term
 
rates,
 
adjusted
 
for
 
a
funding
 
spread
 
that
 
reflects
 
the
 
Corporation’s
 
cost
 
of
 
funds.
 
The
 
methodology,
 
which
 
is
 
performed
 
based
 
on
 
matched
 
maturity
funding,
 
ensures a
 
market-based
 
allocation of
 
funding costs
 
and credits,
 
impacting segment
 
profitability
 
by aligning
 
internal pricing
with external market conditions. The United States Operations segment
 
consists of all banking activities conducted by FirstBank in the
United States
 
mainland, including
 
commercial and
 
consumer banking
 
services. The
 
Virgin
 
Islands Operations
 
segment consists of
 
all
banking activities conducted by the Corporation in the USVI and the
 
BVI, including commercial and consumer banking services.
Prior period segment results
 
have been recast to
 
reflect certain refinements made
 
to enhance internal reporting
 
described in Note 25
– “Segment
 
Information”
 
to the
 
audited consolidated
 
financial statements
 
included
 
in the
 
2024 Annual
 
Report on
 
Form 10-K.
 
Also,
see Note
 
1 –
 
“Nature of
 
Business and
 
Summary of
 
Significant Accounting
 
Policies” to
 
the audited
 
consolidated financial
 
statements
included in the 2024
 
Annual Report on Form
 
10-K for the accounting
 
policies of the segments and
 
information related to the
 
adoption
of ASU 2023-07.
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
67
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following tables present information about the reportable segments for
 
the indicated periods:
Mortgage
Banking
Consumer
(Retail) Banking
Commercial and
Corporate
Banking
Treasury and
Investments
United States
Operations
Virgin Islands
Operations
Total
(In thousands)
Quarter ended June 30, 2025:
Interest income
$
32,330
$
105,243
$
61,419
$
33,145
$
38,157
$
7,896
$
278,190
Net (charge) credit for transfer of funds
(14,660)
79,150
(15,759)
(57,180)
(2,502)
10,951
-
Interest expense
-
(38,491)
(3,604)
(3,095)
(15,213)
(1,928)
(62,331)
Net interest income (loss)
17,670
145,902
42,056
(27,130)
20,442
16,919
215,859
Provision for credit losses - expense (benefit)
351
17,203
701
(3)
2,015
320
20,587
Non-interest income
 
3,498
22,364
1,895
19
862
2,312
30,950
Non-interest expenses:
 
Employees’ compensation and benefits
6,762
35,405
4,992
1,027
7,268
4,604
60,058
 
Occupancy and equipment
1,496
14,834
1,530
180
1,933
2,324
22,297
 
Business promotion
266
2,402
216
180
229
202
3,495
 
Professional fees
1,492
6,622
997
361
1,086
1,051
11,609
 
Taxes, other than income taxes
446
4,293
576
112
104
181
5,712
 
FDIC deposit insurance
417
770
673
-
237
138
2,235
 
Net (gain) loss on OREO operations
(840)
-
145
-
-
104
(591)
 
Credit and debit card processing expenses
-
6,845
214
-
3
685
7,747
 
Other non-interest expenses
(1)
789
6,323
1,366
637
731
929
10,775
 
Total non-interest expenses
10,828
77,494
10,709
2,497
11,591
10,218
123,337
 
Segment income (loss)
$
9,989
$
73,569
$
32,541
$
(29,605)
$
7,698
$
8,693
$
102,885
Average interest-earning assets
$
2,164,350
$
4,018,961
$
3,575,929
$
5,638,582
$
2,419,981
$
457,177
$
18,274,980
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage
Banking
Consumer
(Retail) Banking
Commercial and
Corporate
Banking
Treasury and
Investments
United States
Operations
Virgin Islands
Operations
Total
(In thousands)
Quarter ended June 30, 2024:
Interest income
$
31,594
$
105,256
$
62,649
$
28,912
$
36,413
$
7,421
$
272,245
Net (charge) credit for transfer of funds
(13,409)
69,962
(20,154)
(44,035)
(2,475)
10,111
-
Interest expense
-
(39,366)
(3,976)
(11,943)
(14,978)
(2,354)
(72,617)
Net interest income (loss)
18,185
135,852
38,519
(27,066)
18,960
15,178
199,628
Provision for credit losses - (benefit) expense
 
(9,832)
26,551
(2,084)
60
(3,524)
434
11,605
Non-interest income
3,606
23,134
1,749
122
845
2,582
32,038
Non-interest expenses:
 
Employees’ compensation and benefits
6,611
33,889
4,712
848
7,015
4,381
57,456
 
Occupancy and equipment
1,451
14,583
1,423
178
1,980
2,236
21,851
 
Business promotion
404
3,017
282
187
276
193
4,359
 
Professional fees
1,960
6,923
989
371
1,040
1,148
12,431
 
Taxes, other than income taxes
450
4,069
474
103
140
172
5,408
 
FDIC deposit insurance
434
809
693
-
222
158
2,316
 
Net (gain) loss on OREO operations
(1,503)
-
(2,205)
-
2
97
(3,609)
 
Credit and debit card processing expenses
-
6,557
208
-
3
839
7,607
 
Other non-interest expenses
(1)
672
6,448
1,513
586
666
978
10,863
 
Total non-interest expenses
10,479
76,295
8,089
2,273
11,344
10,202
118,682
 
Segment income (loss)
$
21,144
$
56,140
$
34,263
$
(29,277)
$
11,985
$
7,124
$
101,379
Average interest-earning assets
$
2,122,474
$
4,022,781
$
3,503,782
$
5,842,575
$
2,119,230
$
419,052
$
18,029,894
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
68
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following tables present information about the reportable segments for
 
the indicated periods:
Mortgage
Banking
Consumer
(Retail) Banking
Commercial and
Corporate
Banking
Treasury and
Investments
United States
Operations
Virgin Islands
Operations
Total
(In thousands)
Six-Month Period Ended June 30, 2025
Interest income
$
64,394
$
210,996
$
123,291
$
65,783
$
75,557
$
15,234
$
555,255
Net (charge) credit for transfer of funds
(29,138)
154,247
(31,039)
(111,897)
(3,541)
21,368
-
Interest expense
-
(76,326)
(7,387)
(8,675)
(30,785)
(3,826)
(126,999)
Net interest income (loss)
35,256
288,917
84,865
(54,789)
41,231
32,776
428,256
Provision for credit losses - expense (benefit)
1,027
37,223
3,355
(8)
2,864
936
45,397
Non-interest income
7,080
48,557
4,152
170
1,716
5,009
66,684
Non-interest expenses:
 
Employees’ compensation and benefits
13,734
72,024
10,756
2,167
14,267
9,247
122,195
 
Occupancy and equipment
3,013
29,963
3,134
353
3,811
4,653
44,927
 
Business promotion
469
4,722
434
350
502
296
6,773
 
Professional fees
3,032
12,866
2,039
709
2,034
2,415
23,095
 
Taxes, other than income taxes
917
8,687
1,181
232
221
352
11,590
 
FDIC deposit insurance
832
1,548
1,341
-
474
276
4,471
 
Net (gain) loss on OREO operations
(1,936)
-
181
-
-
35
(1,720)
 
Credit and debit processing expenses
-
10,847
474
-
5
1,531
12,857
 
Other non-interest expenses
(1)
1,761
13,056
2,778
1,285
1,442
1,849
22,171
 
Total non-interest expenses
21,822
153,713
22,318
5,096
22,756
20,654
246,359
 
Segment income (loss)
$
19,487
$
146,538
$
63,344
$
(59,707)
$
17,327
$
16,195
$
203,184
Average interest-earning assets
$
2,160,476
$
4,037,398
$
3,563,429
$
5,684,108
$
2,405,923
$
441,720
$
18,293,054
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage
Banking
Consumer
(Retail) Banking
Commercial and
Corporate
Banking
Treasury and
Investments
United States
Operations
Virgin Islands
Operations
Total
(In thousands)
Six-Month Period Ended June 30, 2024
Interest income
$
63,151
$
209,900
$
124,799
$
56,970
$
71,178
$
14,752
$
540,750
Net (charge) credit for transfer of funds
(26,820)
136,520
(40,692)
(83,665)
(4,713)
19,370
-
Interest expense
-
(77,429)
(8,012)
(25,061)
(29,520)
(4,580)
(144,602)
Net interest income (loss)
36,331
268,991
76,095
(51,756)
36,945
29,542
396,148
Provision for credit losses - (benefit) expense
(10,098)
42,462
(5,010)
(9)
(3,442)
(131)
23,772
Non-interest income
6,727
48,853
3,401
233
1,752
5,055
66,021
Non-interest expenses:
 
Employees’ compensation and benefits
13,362
68,876
9,630
1,840
14,288
8,966
116,962
 
Occupancy and equipment
2,874
28,871
2,784
378
3,904
4,421
43,232
 
Business promotion
636
5,789
516
403
511
346
8,201
 
Professional fees
4,290
13,880
1,928
688
2,127
2,194
25,107
 
Taxes, other than income taxes
869
7,959
911
198
268
332
10,537
 
FDIC deposit insurance
1,008
1,880
1,610
-
533
387
5,418
 
Net (gain) loss on OREO operations
(3,026)
-
(2,159)
-
2
122
(5,061)
 
Credit and debit processing expenses
-
11,368
402
-
5
1,583
13,358
 
Other non-interest expenses
(1)
1,489
13,049
3,018
1,190
1,295
1,810
21,851
 
Total non-interest expenses
21,502
151,672
18,640
4,697
22,933
20,161
239,605
 
Segment income (loss)
$
31,654
$
123,710
$
65,866
$
(56,211)
$
19,206
$
14,567
$
198,792
Average interest-earning assets
$
2,127,479
$
4,006,806
$
3,501,142
$
5,871,437
$
2,103,523
$
416,140
$
18,026,527
(1) Consists of communication expenses and the expense categories described
 
in Note 19 - “Other Non-Interest Expenses,” to the audited consolidated
 
financial statements included in the 2024 Annual Report on Form 10-K.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following table presents a reconciliation of the reportable segment financial information to the consolidated totals for the indicated periods:
Quarter Ended June 30,
Six-Month Period Ended June 30,
2025
2024
2025
2024
(In thousands)
Average assets:
Total average earning assets for segments
 
$
18,274,980
$
18,029,894
$
18,293,054
$
18,026,527
Average non-earning assets
(1)
 
766,226
854,537
780,918
844,838
 
Total consolidated average assets
$
19,041,206
$
18,884,431
$
19,073,972
$
18,871,365
(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)
69
NOTE 18 – SUPPLEMENTAL
 
STATEMENTS
 
OF CASH FLOWS INFORMATION
 
Supplemental statements of cash flows information is as follows for
 
the indicated periods:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six-Month Period Ended June 30,
2025
2024
(In thousands)
Cash paid for:
 
Interest
 
$
129,773
$
134,995
 
Income tax
 
42,334
49,236
 
Operating cash flow from operating leases
8,845
8,693
Non-cash investing and financing activities:
 
Additions to OREO
2,775
4,599
 
Additions to auto and other repossessed assets
31,074
29,590
 
Capitalization of servicing assets
1,279
1,107
 
Loan securitizations
84,537
58,911
 
Loans held for investment transferred to held for sale
-
118
 
Payable related to unsettled purchases of investment securities
5,007
-
 
Right-of-use assets obtained in exchange for operating lease liabilities,
 
net of lease terminations
366
5,112
 
Payable related to unsettled common stock repurchases
-
760
 
Redemption of investments in FBP Statutory Trusts
1,850
-
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
70
NOTE 19 – 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
 
Corporation’s
 
financial statements
 
and
 
activities.
Under
 
capital
 
adequacy
 
guidelines
 
and
 
the
 
regulatory
 
framework
 
for
 
prompt
 
corrective
 
action,
 
the
 
Corporation
 
must
 
meet
 
specific
capital
 
guidelines
 
that
 
involve
 
quantitative
 
measures
 
of
 
the Corporation’s
 
and
 
FirstBank’s
 
assets,
 
liabilities,
 
and
 
certain
 
off-balance
sheet items
 
as calculated
 
under regulatory
 
accounting practices.
 
The Corporation’s
 
capital amounts
 
and classification
 
are also
 
subject
to qualitative judgments and
 
adjustment by the regulators with respect
 
to minimum capital requirements, components,
 
risk weightings,
and
 
other
 
factors.
 
As
 
of
 
June
 
30,
 
2025
 
and
 
December
 
31,
 
2024,
 
the
 
Corporation
 
and
 
FirstBank
 
exceeded
 
the
 
minimum
 
regulatory
capital
 
ratios
 
for
 
capital
 
adequacy
 
purposes and
 
FirstBank exceeded
 
the minimum
 
regulatory
 
capital ratios
 
to
 
be considered
 
a
 
well-
capitalized
 
institution
 
under
 
the
 
regulatory
 
framework
 
for
 
prompt
 
corrective
 
action.
 
As
 
of
 
June
 
30,
 
2025,
 
management
 
does
 
not
believe that any condition has changed or event has occurred that would have
 
changed the institution’s status.
The Corporation and FirstBank
 
compute risk-weighted assets
 
using the standardized
 
approach required by the
 
U.S. Basel III capital
rules (“Basel III rules”).
The
 
Basel
 
III
 
rules
 
require
 
the
 
Corporation
 
to
 
maintain
 
an
 
additional
 
capital
 
conservation
 
buffer
 
of
2.5
%
 
on
 
certain
 
regulatory
capital
 
ratios
 
to
 
avoid
 
limitations
 
on
 
both
 
(i)
 
capital
 
distributions
 
(
e.g.
,
 
repurchases
 
of
 
capital
 
instruments,
 
dividends
 
and
 
interest
payments on capital instruments) and (ii) discretionary bonus payments
 
to executive officers and heads of major business lines.
The regulatory capital position of the Corporation and FirstBank as of
 
June 30, 2025 and December 31, 2024 were as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Regulatory Requirements
Actual
For Capital Adequacy Purposes
To be Well
 
-Capitalized
Thresholds
 
Amount
Ratio
Amount
Ratio
Amount
Ratio
(Dollars in thousands)
As of June 30, 2025
Total Capital (to Risk-Weighted
 
Assets)
 
First BanCorp.
$
2,384,848
17.87
%
$
1,067,881
8.0
%
N/A
N/A
 
FirstBank
$
2,329,536
17.46
%
$
1,067,522
8.0
%
$
1,334,402
10.0
%
CET1 Capital (to Risk-Weighted Assets)
 
First BanCorp.
$
2,217,438
16.61
%
$
600,683
4.5
%
N/A
N/A
 
FirstBank
$
2,062,181
15.45
%
$
600,481
4.5
%
$
867,361
6.5
%
Tier I Capital (to Risk-Weighted
 
Assets)
 
First BanCorp.
$
2,217,438
16.61
%
$
800,911
6.0
%
N/A
N/A
 
FirstBank
$
2,162,181
16.20
%
$
800,641
6.0
%
$
1,067,522
8.0
%
Leverage ratio
 
First BanCorp.
$
2,217,438
11.41
%
$
777,428
4.0
%
N/A
N/A
 
FirstBank
$
2,162,181
11.13
%
$
777,234
4.0
%
$
971,543
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)
71
Commitments
 
The Corporation enters
 
into financial instruments
 
with off-balance sheet
 
risk in the normal
 
course of business to
 
meet the financing
needs
 
of
 
its
 
customers.
 
These
 
financial
 
instruments
 
may
 
include
 
commitments
 
to
 
extend
 
credit
 
and
 
standby
 
letters
 
of
 
credit.
Commitments to extend credit are agreements
 
to lend to a customer as long
 
as there is no violation of any conditions
 
established in the
contract. Commitments
 
generally have fixed
 
expiration dates or
 
other termination clauses.
 
Since certain commitments
 
are expected
 
to
expire without
 
being drawn
 
upon, the
 
total commitment
 
amount does
 
not necessarily
 
represent future
 
cash requirements.
 
For most
 
of
the
 
commercial
 
lines
 
of
 
credit,
 
the
 
Corporation
 
has
 
the
 
option
 
to
 
reevaluate
 
the
 
agreement
 
prior
 
to
 
additional
 
disbursements.
 
In
 
the
case of credit cards and personal lines of credit, the Corporation can
 
cancel the unused credit facility at any time and without cause.
 
As
of June
 
30, 2025,
 
commitments to
 
extend credit
 
amounted to
 
approximately $
2.2
 
billion, of
 
which $
0.8
 
billion relates
 
to retail
 
credit
card
 
loans.
 
In
 
addition,
 
commercial
 
and
 
financial
 
standby
 
letters
 
of
 
credit
 
as
 
of
 
June
 
30,
 
2025
 
amounted
 
to
 
approximately
 
$
61.4
million.
Contingencies
As
 
of
 
June
 
30,
 
2025,
 
First
 
BanCorp.
 
and
 
its
 
subsidiaries
 
were
 
defendants
 
in
 
various
 
legal
 
proceedings,
 
claims
 
and
 
other
 
loss
contingencies
 
arising
 
in
 
the
 
ordinary
 
course
 
of
 
business.
 
On
 
at
 
least
 
a
 
quarterly
 
basis,
 
the
 
Corporation
 
assesses
 
its
 
liabilities
 
and
contingencies in connection
 
with threatened and
 
outstanding legal proceedings,
 
claims and other
 
loss contingencies utilizing
 
the latest
information
 
available,
 
advice
 
from
 
legal
 
counsel,
 
and
 
available
 
insurance
 
coverage.
 
For
 
legal
 
proceedings,
 
claims
 
and
 
other
 
loss
contingencies
 
where
 
it
 
is
 
both
 
probable
 
that
 
the
 
Corporation
 
will
 
incur
 
a
 
loss
 
and
 
the
 
amount
 
can
 
be
 
reasonably
 
estimated,
 
the
Corporation
 
establishes
 
an
 
accrual
 
for
 
the
 
loss.
 
Once
 
established,
 
the
 
accrual
 
is
 
adjusted
 
as
 
appropriate
 
to
 
reflect
 
any
 
relevant
developments. For legal proceedings,
 
claims and other loss contingencies where
 
a loss is not probable or the amount
 
of the loss cannot
be estimated, no accrual is established.
Any estimate involves significant judgment,
 
given the complexity of the facts, the
 
novelty of the legal theories, the varying
 
stages of
the
 
proceedings
 
(including
 
the
 
fact
 
that
 
some
 
of
 
them
 
are
 
currently
 
in
 
preliminary
 
stages),
 
the
 
existence
 
in
 
some
 
of
 
the
 
current
proceedings
 
of
 
multiple
 
defendants
 
whose
 
share
 
of
 
liability
 
has
 
yet
 
to
 
be
 
determined,
 
the
 
numerous
 
unresolved
 
issues
 
in
 
the
proceedings, and
 
the inherent
 
uncertainty of
 
the various
 
potential outcomes
 
of such
 
proceedings. Accordingly,
 
it may
 
take months
 
or
years after the filing of
 
a case or commencement of
 
a proceeding or an investigation
 
before an estimate of the
 
reasonably possible loss
can
 
be
 
made
 
and
 
the
 
Corporation’s
 
estimate
 
will change
 
from
 
time
 
to
 
time,
 
and
 
actual
 
losses may
 
be
 
more
 
or less
 
than
 
the
 
current
estimate.
While
 
the
 
final
 
outcome
 
of
 
legal
 
proceedings,
 
claims,
 
and
 
other
 
loss
 
contingencies
 
is
 
inherently
 
uncertain,
 
based
 
on
 
information
currently
 
available,
 
management
 
believes
 
that
 
the
 
final
 
disposition
 
of
 
the
 
Corporation’s
 
legal
 
proceedings,
 
claims
 
and
 
other
 
loss
contingencies,
 
to
 
the
 
extent
 
not
 
previously
 
provided
 
for,
 
will
 
not
 
have
 
a
 
material
 
adverse
 
effect
 
on
 
the
 
Corporation’s
 
consolidated
financial position as a whole.
If management believes that, based on available information,
 
it is at least reasonably possible that a material loss (or material
 
loss in
excess
 
of
 
any
 
accrual)
 
will
 
be
 
incurred
 
in
 
connection
 
with
 
any
 
legal
 
contingencies,
 
including
 
tax
 
contingencies,
 
the
 
Corporation
discloses an
 
estimate of
 
the possible
 
loss or
 
range of
 
loss, either
 
individually or
 
in the
 
aggregate, as
 
appropriate, if
 
such an
 
estimate
can
 
be
 
made,
 
or
 
discloses
 
that
 
an
 
estimate
 
cannot
 
be
 
made.
 
Based
 
on
 
the
 
Corporation’s
 
assessment
 
as
 
of
 
June
 
30,
 
2025,
 
no
 
such
disclosures were necessary.
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
 
June 30,
 
2025,
 
the Corporation’s
 
total estimated
 
FDIC special
 
assessment
 
amounted
 
to $
7.4
million, of which $
3.9
 
million has been paid. The Corporation
 
continues to monitor the FDIC’s
 
estimated loss to the DIF,
 
which could
affect the amount of its accrued liability.
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
72
NOTE 20 – FIRST BANCORP.
 
(HOLDING COMPANY
 
ONLY) FINANCIAL
 
INFORMATION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following condensed
 
financial information presents
 
the financial position
 
of First BanCorp.
 
at the holding
 
company level only
as of
 
June 30,
 
2025 and
 
December 31,
 
2024, and
 
the results
 
of its
 
operations
 
for the
 
quarters and
 
six-month
 
periods ended
 
June 30,
2025 and 2024:
Statements of Financial Condition
As of June 30,
As of December 31,
2025
2024
(In thousands)
Assets
Cash and due from banks
$
27,923
$
13,295
Equity securities
1,725
1,275
Investment in First Bank Puerto Rico, at equity
1,790,198
1,694,000
Investment in First Bank Insurance Agency,
 
at equity
28,213
24,121
Investment in FBP Statutory Trust I
(1)
-
1,289
Investment in FBP Statutory Trust II
(1)
-
561
Dividends receivable
1,220
619
Other assets
576
459
Total assets
$
1,849,855
$
1,735,619
Liabilities and Stockholders’ Equity
Liabilities:
Long-term borrowings
(1)
$
-
$
61,700
Accounts payable and other liabilities
4,400
4,683
Total liabilities
4,400
66,383
Stockholders’ equity
1,845,455
1,669,236
Total liabilities and stockholders’
 
equity
$
1,849,855
$
1,735,619
(1)
During the first half of 2025,
 
the Corporation redeemed the
 
remaining $
61.7
 
million of the outstanding TruPS
 
issued by FBP Statutory Trusts
 
I and II (or $
59.8
 
million after excluding the
Corporation’s interest in the Trusts
 
of approximately $
1.9
 
million), as further explained in Note 6 – “Non-Consolidated
 
Variable Interest
 
Entities (“VIEs”) and Servicing Assets.”
 
 
 
 
 
 
 
 
FIRST BANCORP.
NOTES TO CONSOLIDATED
 
FINANCIAL
 
STATEMENTS – (Continued)
73
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Income
 
Quarter Ended
 
Six-Month Period Ended
June 30,
June 30,
2025
2024
2025
2024
(In thousands)
Income
 
 
Interest income on money market investments
 
$
93
$
87
$
187
$
150
 
Dividend income from banking subsidiaries
72,438
81,232
189,895
162,149
 
Other income
7
100
36
201
 
Total income
72,538
81,419
190,118
162,500
Expense
 
Interest expense on long-term borrowings
175
3,336
1,156
6,686
 
Other non-interest expenses
463
463
941
902
 
Total expense
638
3,799
2,097
7,588
Income before income taxes and equity in undistributed
 
earnings of subsidiaries
71,900
77,620
188,021
154,912
Income tax expense
-
-
1
1
Equity in undistributed earnings of subsidiaries
 
(distributions in excess of earnings)
8,280
(1,782)
(30,781)
(5,615)
Net income
$
80,180
$
75,838
$
157,239
$
149,296
Other comprehensive income (loss), net of tax
41,205
10,560
125,266
(4,505)
Comprehensive income
$
121,385
$
86,398
$
282,505
$
144,791
 
 
74
ITEM
 
2.
 
MANAGEMENT’S
 
DISCUSSION
 
AND
 
ANALYSIS
 
OF
 
FINANCIAL
 
CONDITION
 
AND
 
RESULTS
 
OF
OPERATIONS (“MD&A”)
The
 
following
 
MD&A
 
relates
 
to
 
the
 
accompanying
 
unaudited
 
consolidated
 
financial
 
statements
 
of
 
First
 
BanCorp.
 
(the
“Corporation,” “we,” “us,”
 
“our,” or “First
 
BanCorp.”) and should be
 
read in conjunction with
 
such financial statements and
 
the notes
thereto,
 
and our
 
Annual Report
 
on Form
 
10-K for
 
the fiscal
 
year ended
 
December 31,
 
2024 (the
 
“2024 Annual
 
Report on
 
Form 10-
K”). This section
 
also presents certain
 
financial measures that
 
are not based
 
on generally accepted
 
accounting principles in
 
the United
States
 
of
 
America
 
(“GAAP”).
 
See
 
“Non-GAAP
 
Financial
 
Measures
 
and
 
Reconciliations”
 
below
 
for
 
information
 
about
 
why
 
non-
GAAP
 
financial
 
measures
 
are
 
presented,
 
reconciliations
 
of
 
non-GAAP
 
financial
 
measures
 
to
 
the
 
most
 
comparable
 
GAAP
 
financial
measures, and references to non-GAAP financial measures reconciliations
 
presented in other sections.
EXECUTIVE SUMMARY
First BanCorp. is
 
a diversified financial
 
holding company headquartered
 
in San Juan, Puerto
 
Rico, offering a
 
full range of financial
products to
 
consumers and
 
commercial customers
 
through various
 
subsidiaries. First
 
BanCorp.
 
is the
 
holding company
 
of FirstBank
Puerto
 
Rico
 
(“FirstBank”
 
or the
 
“Bank”)
 
and
 
FirstBank
 
Insurance
 
Agency.
 
Through
 
its wholly
 
-owned
 
subsidiaries,
 
the Corporation
operates
 
in
 
Puerto
 
Rico,
 
the
 
United
 
States
 
Virgin
 
Islands
 
(“USVI”),
 
the
 
British
 
Virgin
 
Islands
 
(“BVI”),
 
and
 
the
 
state
 
of
 
Florida,
concentrating on
 
commercial banking,
 
residential mortgage loans,
 
credit cards, personal
 
loans, small loans,
 
auto loans and
 
leases, and
insurance agency activities.
Recent Developments
Economy and Market Update
In
 
the
 
second
 
quarter
 
of
 
2025,
 
the
 
Corporation
 
reported
 
net
 
income
 
of
 
$80.2
 
million,
 
resulting
 
in
 
a
 
return
 
on
 
average
 
assets
 
of
1.69%. This performance was driven
 
by record net interest income,
 
solid loan production, stable credit
 
trends, and disciplined expense
management. Total
 
loans increased
 
by 6% on
 
a linked-quarter annualized
 
basis, driven
 
by strong commercial
 
loan production
 
in both
Puerto
 
Rico
 
and
 
Florida.
 
While
 
total
 
core
 
deposits
 
declined
 
due
 
to
 
fluctuations
 
in
 
a
 
few
 
large
 
commercial
 
accounts,
 
retail
 
deposit
accounts remained
 
fairly stable.
 
Asset quality
 
continued to
 
improve, highlighted
 
by an 8
 
basis points
 
(“bps”) reduction
 
in net
 
charge-
offs, reflecting the benefits of prior-year credit policy adjustments
 
and improvement in consumer loan vintages.
Looking
 
ahead,
 
the
 
Corporation
 
continues
 
to
 
see
 
encouraging
 
business
 
activity
 
and
 
positive
 
macroeconomic
 
factors,
 
including
stable
 
unemployment
 
rates
 
for
 
June
 
2025
 
which
 
amounted
 
to
 
4.1%
 
and
 
5.5%
 
for
 
the
 
U.S
 
and
 
Puerto
 
Rico
 
regions,
 
respectively.
Despite
 
the
 
recent
 
economic
 
activity,
 
progress
 
made
 
in
 
inflation
 
and
 
optimist
 
sentiment,
 
the
 
Federal
 
Reserve
 
(the
 
“FED”)
 
has
maintained the
 
federal funds
 
rate target
 
at 4.25%
 
to 4.50%,
 
primarily due
 
to trade
 
and tariffs
 
negotiations and
 
its ultimate
 
impact on
inflation. Notwithstanding,
 
the Corporation should continue
 
to benefit from stable
 
credit trends and approximately
 
$1.3 billion in cash
flows from
 
its investment
 
portfolio during
 
the second
 
half of
 
2025, which
 
will be
 
reinvested into
 
loans or
 
higher yielding
 
securities.
Additionally,
 
the Corporation
 
will continue
 
to benefit
 
from this
 
economic
 
backdrop
 
and should
 
continue to
 
experience growth
 
in its
commercial, construction, and residential mortgage loan portfolios for
 
the year.
 
Capital Deployment Actions
In the second quarter of
 
2025, the Corporation delivered
 
approximately $68.3 million in
 
the form of capital deployment actions
 
that
included $29.0
 
million in common
 
stock dividends
 
declared, $28.2
 
million in repurchases
 
of common
 
stock, and the
 
remaining $11.1
million redemption of outstanding trust-preferred securities (“TruPS”).
From July
 
1, 2025
 
to August
 
5, 2025,
 
the Corporation
 
repurchased
 
approximately
 
1.0 million
 
shares of
 
common
 
stock for
 
a total
cost
 
of
 
approximately
 
$21.7
 
million.
 
In
 
the
 
aggregate,
 
as
 
of
 
August
 
5,
 
2025,
 
the
 
Corporation
 
has
 
remaining
 
authorization
 
of
approximately $66.6 million.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
75
CRITICAL ACCOUNTING POLICIES AND PRACTICES
The
 
accounting
 
principles
 
of
 
the
 
Corporation
 
and
 
the
 
methods
 
of
 
applying
 
these
 
principles
 
conform
 
to
 
GAAP.
 
In
 
preparing
 
the
consolidated
 
financial
 
statements,
 
management
 
is
 
required
 
to
 
make
 
estimates,
 
assumptions,
 
and
 
judgments
 
that
 
affect
 
the
 
amounts
recorded for assets,
 
liabilities and contingent
 
liabilities as of
 
the date of
 
the financial statements
 
and the reported
 
amounts of revenues
and
 
expenses
 
during
 
the
 
reporting
 
periods.
 
Note
 
1
 
of
 
the Notes
 
to
 
Consolidated
 
Financial
 
Statements
 
included
 
in
 
our
 
2024
 
Annual
Report
 
on
 
Form
 
10-K,
 
as
 
supplemented
 
by
 
this
 
Quarterly
 
Report
 
on
 
Form
 
10-Q,
 
including
 
this
 
MD&A,
 
describes
 
the
 
significant
accounting policies we used in our consolidated financial statements.
Not all significant
 
accounting policies require
 
management to make
 
difficult, subjective
 
or complex judgments.
 
Critical accounting
estimates
 
are
 
those
 
estimates
 
made
 
in
 
accordance
 
with
 
GAAP
 
that
 
involve
 
a
 
significant
 
level
 
of
 
uncertainty
 
and
 
have
 
had
 
or
 
are
reasonably
 
likely
 
to
 
have
 
a
 
material
 
impact
 
on
 
the
 
Corporation’s
 
financial
 
condition
 
and
 
results
 
of
 
operations.
 
The
 
Corporation’s
critical accounting
 
estimates that
 
are particularly
 
susceptible
 
to significant
 
changes include,
 
but are
 
not limited
 
to, the
 
following:
 
(i)
the allowance for credit losses (“ACL”);
 
(ii) valuation of financial instruments;
 
and (iii) income taxes. For more
 
information regarding
valuation
 
of financial
 
instruments and
 
income tax
 
policies, assumptions,
 
and judgments,
 
see “Critical
 
Accounting
 
Estimates” in
 
Part
II,
 
Item
 
7,
 
“Management’s
 
Discussion
 
and
 
Analysis
 
of
 
Financial
 
Condition
 
and
 
Results
 
of
 
Operations
 
(“MD&A”),”
 
in
 
the
 
2024
Annual
 
Report
 
on
 
Form
 
10-K.
 
The
 
“Risk
 
Management
 
–
 
Credit
 
Risk
 
Management”
 
section
 
of
 
this
 
MD&A
 
details
 
the
 
policies,
assumptions, and
 
judgments related
 
to the
 
ACL. Actual
 
results could
 
differ
 
from estimates
 
and assumptions
 
if different
 
outcomes or
conditions prevail.
Overview of Results of Operations
The
 
Corporation’s
 
results
 
of
 
operations
 
depend
 
primarily
 
on
 
its
 
net
 
interest
 
income,
 
which
 
is
 
the
 
difference
 
between
 
the
 
interest
income
 
earned
 
on
 
its
 
interest-earning
 
assets,
 
including
 
investment
 
securities
 
and
 
loans,
 
and
 
the
 
interest
 
expense
 
incurred
 
on
 
its
interest-bearing
 
liabilities,
 
including
 
deposits
 
and
 
borrowings.
 
Net
 
interest
 
income
 
is
 
affected
 
by
 
various
 
factors,
 
including
 
the
following:
 
(i)
 
the
 
interest
 
rate
 
environment;
 
(ii)
 
the
 
volumes,
 
mix,
 
and
 
composition
 
of
 
interest-earning
 
assets,
 
and
 
interest-bearing
liabilities; and (iii) the repricing characteristics of these assets and liabilities.
For
 
the
 
quarter
 
and
 
six-month
 
period
 
ended
 
June
 
30,
 
2025,
 
the
 
Corporation
 
had
 
net
 
income
 
of
 
$80.2
 
million
 
($0.50
 
per
 
diluted
common
 
share)
 
and
 
$157.2
 
million
 
($0.97
 
per
 
diluted
 
common
 
share),
 
respectively,
 
compared
 
to
 
$75.8
 
million
 
($0.46
 
per
 
diluted
common share) and $149.3 million ($0.90 per diluted
 
common share), respectively,
 
for the comparable periods in 2024. Other relevant
selected financial indicators for the periods presented are included below:
Quarter Ended June 30,
Six-Month Period Ended June 30,
2025
2024
2025
2024
Key Performance Indicator:
(1)
Return on Average
 
Assets
(2)
1.69
%
1.61
%
1.66
%
1.59
%
Return on Average
 
Common Equity
(3)
17.79
20.80
17.85
20.17
Efficiency Ratio
(4)
49.97
51.23
49.78
51.84
(1)
These financial ratios are used by management to monitor the Corporation’s
 
financial performance and whether it is using its assets
 
efficiently.
(2)
Indicates how profitable the Corporation is in relation to its total assets
 
and is calculated by dividing net income on an annualized
 
basis by its average total assets.
(3)
Measures the Corporation’s
 
performance based on its
 
average common stockholders’ equity and
 
is calculated by dividing net
 
income on an annualized
 
basis by its average total
 
common
stockholders’ equity.
(4)
Measures how much the Corporation incurred to generate a
 
dollar of revenue and is calculated by dividing non-interest expenses
 
by total revenue.
 
76
The key drivers of the Corporation’s
 
GAAP financial results for the quarter
 
ended June 30, 2025, compared to the
 
second quarter of
2024, include the following:
●
Net interest
 
income
 
for the
 
quarter ended
 
June 30,
 
2025 increased
 
by $16.3
 
million to
 
$215.9 million,
 
compared to
 
$199.6
million
 
for
 
the
 
second
 
quarter
 
of
 
2024.
 
Net
 
interest
 
margin
 
for
 
the
 
second
 
quarter
 
of
 
2025
 
increased
 
by
 
34
 
bps
 
to
 
4.56%,
driven by a decrease
 
in the cost of funds
 
and a change in asset mix
 
associated with the deployment
 
of cash flows from lower-
yielding
 
investment
 
securities
 
to
 
loans
 
and
 
other
 
higher-yielding
 
interest-earning
 
assets.
 
See
 
“Results
 
of
 
Operations
 
–
 
Net
Interest Income”
 
below for additional information.
●
The provision for credit
 
losses on loans, finance
 
leases, unfunded loan commitments
 
and debt securities for the
 
quarter ended
June
 
30,
 
2025 was
 
$20.6
 
million,
 
compared
 
to $11.6
 
million
 
for
 
the second
 
quarter of
 
2024.
 
The increase
 
in the
 
provision
expense was driven
 
by an increase
 
in the provision
 
for the residential
 
mortgage loan
 
portfolio due to
 
the net benefit
 
recorded
during
 
the
 
second
 
quarter
 
of
 
2024
 
associated
 
with
 
updated
 
historical
 
loss
 
experience,
 
partially
 
offset
 
by
 
a
 
decrease
 
in
 
the
provision for the
 
consumer loan and
 
finance lease portfolios
 
driven by
 
improvements in macroeconomic
 
variables, lower net
charge-offs,
 
and reductions in the unsecured loan portfolio volumes.
Net
 
charge-offs
 
totaled
 
$19.1
 
million
 
for
 
the
 
quarter
 
ended
 
June
 
30,
 
2025,
 
or
 
an
 
annualized
 
0.60%
 
of
 
average
 
loans,
compared
 
to
 
$21.0
 
million,
 
or
 
an
 
annualized
 
0.69%
 
of
 
average
 
loans,
 
for
 
the
 
second
 
quarter
 
of
 
2024.
 
The
 
decrease
 
in
 
net
charge-offs for the second quarter of 2025
 
was driven by a decrease in consumer loans and finance leases net charge
 
-offs. See
“Results
 
of
 
Operations
 
–
 
Provision
 
for
 
Credit
 
Losses”
 
and
 
“Risk
 
Management”
 
below
 
for
 
analyses
 
of
 
the
 
ACL
 
and
 
non-
performing assets and related ratios.
●
Non-interest expenses
 
for the quarter
 
ended June
 
30, 2025
 
increased by $4.6
 
million to $123.3
 
million, mainly
 
due to a
 
$2.3
million
 
realized
 
gain
 
on
 
the
 
sale
 
of
 
a
 
commercial
 
real
 
estate
 
OREO
 
property
 
in
 
the
 
Puerto
 
Rico
 
region
 
during
 
the
 
second
quarter
 
of
 
2024
 
and
 
an
 
increase
 
in
 
employees’
 
compensation
 
and
 
benefits
 
expenses.
 
See
 
“Results
 
of
 
Operations
 
–
 
Non-
Interest Expenses” below for additional information.
 
●
Income tax expense decreased to
 
$22.7 million for the second quarter of
 
2025, compared to $25.5 million
 
for the same period
in 2024
 
,
 
driven by
 
a lower
 
effective
 
tax rate
 
due
 
to a
 
higher proportion
 
of exempt
 
to taxable
 
income.
 
See “Income
 
Taxes”
below and Note 14 – “Income Taxes
 
,” to the unaudited consolidated financial statements herein for additional
 
information.
 
●
As of
 
June 30,
 
2025, total
 
assets were
 
approximately
 
$18.9 billion,
 
a decrease
 
of $395.4
 
million
 
from December
 
31, 2024,
primarily
 
related
 
to a
 
decrease
 
in
 
cash and
 
cash
 
equivalents
 
resulting
 
from
 
the decrease
 
in
 
total
 
deposits,
 
the
 
repayment
 
of
long-term
 
borrowings,
 
and capital
 
deployment
 
actions, partially
 
offset
 
by the
 
increase
 
in the
 
fair value
 
of available
 
-for-sale
debt securities due to changes in market interest rates.
●
As of
 
June 30,
 
2025, total
 
liabilities were
 
$17.1 billion,
 
a decrease
 
of $571.6
 
million from
 
December 31,
 
2024, driven
 
by a
$317.3 million decrease in total
 
deposits, of which $153.8 million
 
was in government deposits; and
 
a $241.7 million decrease
in borrowings.
 
See “Risk
 
Management –
 
Liquidity
 
Risk” below
 
for additional
 
information
 
about the
 
Corporation’s
 
funding
sources and strategy.
●
The
 
Corporation’s
 
primary
 
sources
 
of
 
funding
 
are
 
consumer
 
and
 
commercial
 
core
 
deposits,
 
which
 
exclude
 
government
deposits and
 
brokered certificates
 
of deposit
 
(“CDs”). As
 
of June
 
30, 2025,
 
these core
 
deposits, amounting
 
to $12.7
 
billion,
funded 66.97% of
 
total assets. Excluding
 
fully collateralized government
 
deposits, estimated uninsured
 
deposits amounted to
$4.5 billion as
 
of June 30,
 
2025. The Corporation
 
had approximately $2.3
 
billion in cash
 
and cash equivalents
 
and free high-
quality
 
liquid
 
securities.
 
In
 
addition,
 
as
 
of
 
June
 
30,
 
2025,
 
the
 
Corporation
 
had
 
approximately
 
$2.7
 
billion
 
available
 
for
funding under the FED’s
 
Discount Window and
 
$1.0 billion available for additional
 
borrowing capacity on the Federal Home
Loan Bank
 
(“FHLB”) lines
 
of credit
 
based on
 
collateral pledged
 
at these
 
entities. In
 
the aggregate,
 
as of
 
June 30,
 
2025, the
Corporation had
 
$6.0 billion,
 
or 133%
 
of estimated
 
uninsured deposits
 
(excluding fully
 
collateralized government
 
deposits),
available
 
to
 
meet
 
liquidity
 
needs.
 
See
 
“Risk
 
Management
 
–
 
Liquidity
 
Risk”
 
below
 
for
 
additional
 
information
 
about
 
the
Corporation’s funding
 
sources and strategy.
 
77
●
As
 
of
 
June
 
30,
 
2025,
 
the
 
Corporation’s
 
total
 
stockholders’
 
equity
 
was
 
$1.8
 
billion,
 
an
 
increase
 
of
 
$176.2
 
million
 
from
December 31,
 
2024. The increase
 
was driven
 
by net income
 
generated in
 
the first half
 
of 2025 and
 
a $125.3 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
 
common stock
 
dividends declared
 
in the
 
first half
 
of 2025
totaling $58.6 million or
 
$0.36 per common share,
 
and $50.0 million in common
 
stock repurchases.
 
The Corporation’s
 
CET1
capital, tier
 
1 capital,
 
total capital,
 
and leverage
 
ratios were
 
16.61%, 16.61%,
 
17.87%, and
 
11.41%,
 
respectively,
 
as of
 
June
30, 2025, compared to CET1 capital, tier 1 capital, total capital, and
 
leverage ratios of 16.32%, 16.32%, 18.02%, and 11.07%,
respectively, as of
 
December 31, 2024.
 
See “Risk Management – Capital” below for additional information.
●
Total
 
loan
 
production,
 
including
 
purchases,
 
refinancings,
 
renewals,
 
and
 
draws
 
from
 
existing
 
revolving
 
and
 
non-revolving
commitments,
 
increased
 
by
 
$153.7
 
million
 
to $1.4
 
billion
 
for
 
the
 
quarter
 
ended
 
June 30,
 
2025,
 
as compared
 
to
 
the
 
second
quarter of
 
2024, mainly
 
in commercial
 
and construction
 
loans in
 
the Puerto
 
Rico region.
 
See “Results
 
of Operations
 
– Loan
Production”
 
below for additional information.
●
Total
 
non-performing assets
 
were $128.0
 
million as
 
of June
 
30, 2025,
 
an increase
 
of $9.7
 
million from
 
December 31,
 
2024,
mainly due
 
to the inflows
 
to nonaccrual
 
status of a
 
$12.6 million
 
commercial mortgage
 
loan in the
 
Florida region
 
during the
first quarter of 2025 and
 
a $4.3 million construction loan
 
in the Puerto Rico region
 
during the second quarter of
 
2025, both in
the
 
hospitality
 
industry.
 
See
 
“Risk
 
Management
 
–
 
Nonaccrual
 
Loans
 
and
 
Non-Performing
 
Assets”
 
below
 
for
 
additional
information.
●
Adversely
 
classified
 
commercial
 
and
 
construction
 
loans
 
increased
 
by
 
$6.0
 
million
 
to
 
$93.3
 
million
 
as
 
of
 
June
 
30,
 
2025,
compared
 
to
 
December
 
31,
 
2024,
 
driven
 
by
 
the
 
downgrade
 
of
 
four
 
commercial
 
loans
 
totaling
 
$24.1
 
million,
 
including
 
the
aforementioned
 
$12.6
 
million
 
inflow
 
to
 
nonaccrual
 
status
 
in
 
the
 
Florida
 
region,
 
partially
 
offset
 
by
 
the
 
upgrade
 
of
 
two
commercial mortgage loans totaling $17.0 million.
 
 
78
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
The Corporation has included in this Quarterly Report on Form 10-Q
 
the following financial measures that are not recognized under
GAAP,
 
which are referred to as non-GAAP financial measures:
 
Net Interest Income,
 
Interest Rate Spread,
 
and Net Interest Margin, Excluding
 
Valuations
 
,
 
and on a Tax
 
-Equivalent Basis
Net interest
 
income, interest
 
rate spread,
 
and net
 
interest margin
 
are reported
 
excluding the
 
changes in
 
the fair
 
value of
 
derivative
instruments and
 
on a
 
tax-equivalent basis
 
in order
 
to provide
 
to investors
 
additional information
 
about the
 
Corporation’s
 
net interest
income
 
that management
 
uses and
 
believes should
 
facilitate comparability and
 
analysis of
 
the periods
 
presented.
 
The changes
 
in the
fair value
 
of derivative
 
instruments have
 
no effect
 
on interest
 
due or
 
interest earned
 
on interest-bearing
 
liabilities or
 
interest-earning
assets, respectively.
 
The tax-equivalent
 
adjustment to
 
net interest
 
income recognizes
 
the income
 
tax savings
 
when comparing
 
taxable
and
 
tax-exempt
 
assets
 
and
 
assumes
 
a
 
marginal
 
income
 
tax
 
rate.
 
Income
 
from
 
tax-exempt
 
earning
 
assets
 
is
 
increased
 
by
 
an
 
amount
equivalent to
 
the taxes
 
that would
 
have been
 
paid if
 
this income
 
had been
 
taxable at
 
statutory rates.
 
Management believes
 
that it
 
is a
standard
 
practice
 
in
 
the banking
 
industry
 
to
 
present
 
net
 
interest
 
income,
 
interest
 
rate
 
spread,
 
and
 
net
 
interest
 
margin
 
on
 
a
 
fully
 
tax-
equivalent basis. This adjustment
 
puts all earning assets, most
 
notably tax-exempt securities and
 
tax-exempt loans, on a common
 
basis
that facilitates comparison of results to the results of peers.
 
See “Results of Operations – Net Interest Income” below,
 
for the table that reconciles net interest income in accordance with GAAP
to
 
the
 
non-GAAP
 
financial
 
measure
 
of
 
net
 
interest
 
income,
 
excluding
 
valuations,
 
and
 
on
 
a
 
tax-equivalent
 
basis
 
for
 
the
 
indicated
periods. The table also reconciles
 
net interest spread and
 
net interest margin on
 
a GAAP basis to these items
 
excluding valuations, and
on a tax-equivalent basis.
Tangible
 
Common Equity Ratio and Tangible
 
Book Value
 
Per Common Share
The tangible
 
common equity
 
ratio and
 
tangible book
 
value per
 
common share
 
are non-GAAP
 
financial measures
 
that management
believes are generally
 
used by the financial
 
community to evaluate
 
capital adequacy.
 
Tangible
 
common equity is total
 
common equity
less goodwill
 
and other
 
intangible assets.
 
Similarly,
 
tangible assets
 
are total
 
assets less
 
goodwill and
 
other intangible
 
assets. Tangible
common
 
equity
 
ratio
 
is
 
tangible
 
common
 
equity
 
divided
 
by
 
tangible
 
assets.
 
Tangible
 
book
 
value
 
per
 
common
 
share
 
is
 
tangible
common
 
equity divided
 
by the
 
number of
 
common shares
 
outstanding.
 
Management uses
 
and believes
 
that many
 
stock analysts
 
use
the tangible
 
common equity
 
ratio and
 
tangible book
 
value per
 
common share
 
in conjunction
 
with other
 
more traditional
 
bank capital
ratios
 
to
 
compare
 
the
 
capital
 
adequacy
 
of
 
banking
 
organizations
 
with
 
significant
 
amounts
 
of
 
goodwill
 
or
 
other
 
intangible
 
assets,
typically
 
stemming
 
from
 
the use
 
of
 
the
 
purchase
 
method
 
of
 
accounting
 
for
 
mergers
 
and
 
acquisitions.
 
Accordingly,
 
the Corporation
believes that
 
disclosures of
 
these financial
 
measures may
 
be useful
 
to investors.
 
Neither tangible
 
common equity
 
nor tangible
 
assets,
or the related
 
measures, should be
 
considered in isolation
 
or as a substitute
 
for stockholders’
 
equity,
 
total assets, or any
 
other measure
calculated in accordance
 
with GAAP.
 
Moreover,
 
the manner in which
 
the Corporation calculates its
 
tangible common
 
equity, tangible
assets, and any other related measures may differ from
 
that of other companies reporting measures with similar names.
See “Risk
 
Management –
 
Capital” below
 
for the
 
table that
 
reconciles the
 
Corporation’s
 
total equity
 
and total
 
assets in
 
accordance
with GAAP to
 
the tangible common
 
equity and tangible
 
assets figures used
 
to calculate the
 
non-GAAP financial measures
 
of tangible
common equity ratio and tangible book value per common share.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
79
Adjusted Net Income and Adjusted Non-Interest Expenses
To
 
supplement the
 
Corporation’s
 
financial statements
 
presented in
 
accordance with
 
GAAP,
 
the Corporation
 
uses, and believes
 
that
investors benefit from disclosure of, non
 
-GAAP financial measures that reflect
 
adjustments to net income and non-interest
 
expenses to
exclude
 
items that
 
management believes
 
are not
 
reflective of
 
core operating
 
performance (“Special
 
Items”). The
 
financial results
 
for
the
 
quarter
 
and
 
six-month
 
period
 
ended
 
June
 
30,
 
2025
 
did
 
not
 
include
 
any
 
significant
 
Special
 
Items.
 
The
 
financial
 
results
 
for
 
the
quarter and six-month period ended June 30, 2024 included the
 
following Special Item:
FDIC Special Assessment Expense
-
Charges
 
of $0.2
 
million ($0.
 
1
 
million
 
after-tax,
 
calculated based
 
on the
 
statutory tax
 
rate of
 
37.5%) and
 
$1.1 million
 
($0.7
million after-tax,
 
calculated based
 
on the
 
statutory tax
 
rate of
 
37.5%) were
 
recorded for
 
the second
 
quarter of
 
2024 and
 
six-
month period
 
ended June 30,
 
2024, respectively,
 
to increase the
 
special assessment imposed
 
by the FDIC
 
in connection
 
with
losses to the
 
Deposit Insurance
 
Fund associated
 
with protecting
 
uninsured deposits
 
following the
 
failures of
 
certain financial
institutions during
 
the first
 
half of
 
2023. The
 
estimated FDIC
 
special assessment
 
of $7.4
 
million
 
was the
 
revised
 
estimated
loss reflected
 
in the
 
FDIC invoice
 
for the
 
first quarterly
 
collection period
 
with a
 
payment date
 
of June
 
28, 2024.
 
The FDIC
deposit
 
special
 
assessment
 
is
 
reflected
 
in
 
the
 
consolidated
 
statements
 
of
 
income
 
as
 
part
 
of
 
“FDIC
 
deposit
 
insurance”
expenses.
Adjusted
 
Net
 
Income
 
–
 
The
 
following
 
table
 
shows
 
for
 
the
 
quarter
 
and
 
six-month
 
period
 
ended
 
June
 
30,
 
2025,
 
the
 
reported
 
net
income,
 
and reconciles
 
for the
 
quarter and
 
six-month period
 
ended June
 
30, 2024,
 
net income
 
to adjusted
 
net income,
 
a non-GAAP
financial measure that excludes the Special Item identified above.
Quarter Ended June 30,
Six-Month Period Ended June 30,
2025
2024
2025
2024
(In thousands)
Net income, as reported (GAAP)
$
80,180
$
75,838
$
157,239
$
149,296
Adjustment:
 
FDIC special assessment expense
-
152
-
1,099
Income tax impact of adjustments
(1)
-
(57)
-
(412)
Adjusted net income (Non-GAAP)
$
80,180
$
75,933
$
157,239
$
149,983
(1)
See “Adjusted Net Income and Adjusted Non-Interest Expenses”
 
above for the individual tax impact related to the above adjustment,
 
which was based on the Puerto Rico statutory tax
rate of 37.5%.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
80
RESULTS
 
OF OPERATIONS
Net Interest Income
Net interest
 
income is
 
the excess of
 
interest earned
 
by First
 
BanCorp. on
 
its interest-earning
 
assets over
 
the interest
 
incurred on its
interest-bearing
 
liabilities.
 
First
 
BanCorp.’s
 
net
 
interest
 
income
 
is
 
subject
 
to
 
interest
 
rate
 
risk
 
due
 
to
 
the
 
repricing
 
and
 
maturity
mismatch
 
of
 
the
 
Corporation’s
 
assets
 
and
 
liabilities.
 
In
 
addition,
 
variable
 
sources
 
of
 
interest
 
income,
 
such
 
as
 
loan
 
fees,
 
periodic
dividends, and
 
collection of
 
interest on
 
nonaccrual loans,
 
can fluctuate
 
from period
 
to period.
 
Net interest
 
income for
 
the quarter
 
and
six-month period
 
ended June
 
30, 2025
 
was $215.9
 
million and
 
$428.3 million,
 
respectively,
 
compared to
 
$199.6 million
 
and $396.1
million
 
for
 
the
 
comparable
 
periods
 
in
 
2024,
 
respectively.
 
On
 
a
 
tax-equivalent
 
basis
 
and
 
excluding
 
the
 
changes
 
in
 
the
 
fair
 
value
 
of
derivative instruments,
 
net interest
 
income for
 
the quarter
 
and six-month
 
period ended
 
June 30,
 
2025 was
 
$223.0 million
 
and $441.6
million, respectively,
 
compared to $204.5 million and $405.8 million for the comparable periods in 2024, respectively.
The
 
following
 
tables
 
include a
 
detailed
 
analysis
 
of net
 
interest income
 
for
 
the indicated
 
periods.
 
Part I
 
presents
 
average volumes
(based
 
on
 
the
 
average
 
daily
 
balance)
 
and
 
rates
 
on
 
an
 
adjusted
 
tax-equivalent
 
basis
 
and
 
Part
 
II
 
presents,
 
also
 
on
 
an
 
adjusted
 
tax-
equivalent basis,
 
the extent
 
to which
 
changes in
 
interest rates
 
and changes
 
in the
 
volume of
 
interest-related assets
 
and liabilities
 
have
affected
 
the Corporation’s
 
net interest
 
income. For
 
each category
 
of interest-earning
 
assets and
 
interest-bearing
 
liabilities, the
 
tables
provide
 
information
 
on
 
changes
 
in
 
(i)
 
volume
 
(changes
 
in
 
volume
 
multiplied
 
by
 
prior
 
period
 
rates),
 
and
 
(ii)
 
rate
 
(changes
 
in
 
rate
multiplied by
 
prior period
 
volumes). The
 
Corporation has
 
allocated rate-volume
 
variances (changes
 
in rate
 
multiplied by
 
changes in
volume) to either the changes in volume or the changes in rate based upon the
 
effect of each factor on the combined totals.
Net interest
 
income on
 
an adjusted
 
tax-equivalent
 
basis and
 
excluding
 
the changes
 
in the
 
fair value
 
of derivative
 
instruments is
 
a
non-GAAP
 
financial
 
measure.
 
For
 
the
 
definition
 
of
 
this
 
non-GAAP
 
financial
 
measure,
 
refer
 
to
 
the
 
discussion
 
in
 
“Non-GAAP
Financial Measures and Reconciliations” above.
Part I
Average volume
Interest income
(1)
 
/ expense
Average rate
(1)
Quarter ended June 30,
2025
2024
2025
2024
2025
2024
(Dollars in thousands)
Interest-earning assets:
Money market and other short-term investments
$
1,070,545
$
667,564
$
11,897
$
9,060
4.46
%
5.44
%
Government obligations
(2)
1,839,445
2,619,778
7,519
8,947
1.64
%
1.37
%
MBS
3,289,215
3,359,598
17,979
14,339
2.19
%
1.71
%
FHLB stock
26,114
34,032
645
818
9.91
%
9.64
%
Other investments
20,525
17,637
174
244
3.40
%
5.55
%
Total investments
(3)
6,245,844
6,698,609
38,214
33,408
2.45
%
2.00
%
Residential mortgage loans
2,854,624
2,807,639
41,674
40,686
5.86
%
5.81
%
Construction loans
245,906
245,219
5,839
4,955
9.52
%
8.10
%
C&I and commercial mortgage loans
5,892,848
5,528,607
100,761
100,919
6.86
%
7.32
%
Finance leases
903,286
873,908
17,693
17,255
7.86
%
7.92
%
Consumer loans
2,846,145
2,817,443
81,156
79,888
11.44
%
11.37
%
Total loans
(4)(5)
12,742,809
12,272,816
247,123
243,703
7.78
%
7.96
%
 
Total interest-earning assets
$
18,988,653
$
18,971,425
$
285,337
$
277,111
6.03
%
5.86
%
Interest-bearing liabilities:
Time deposits
$
3,190,402
$
3,002,159
$
26,747
$
26,588
3.36
%
3.55
%
Brokered CDs
487,787
676,421
5,491
8,590
4.52
%
5.09
%
Other interest-bearing deposits
7,662,793
7,528,378
26,400
28,493
1.38
%
1.52
%
Advances from the FHLB
320,000
500,000
3,518
5,610
4.41
%
4.50
%
Other borrowings
9,429
161,700
175
3,336
7.44
%
8.27
%
Total interest-bearing liabilities
$
11,670,411
$
11,868,658
$
62,331
$
72,617
2.14
%
2.45
%
Net interest income on a tax-equivalent basis and excluding
valuations - non-GAAP
$
223,006
$
204,494
Interest rate spread
3.89
%
3.41
%
Net interest margin
4.71
%
4.32
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
81
Part I
Average volume
Interest income
(1)
 
/ expense
Average rate
(1)
Six-Month Period Ended June 30,
2025
 
2024
 
2025
 
2024
 
2025
2024
(Dollars in thousands)
Interest-earning assets:
Money market and other short-term investments
$
1,090,704
$
600,655
$
24,102
$
16,314
4.46
%
5.45
%
Government obligations
(2)
1,905,022
2,651,974
14,489
18,000
1.53
%
1.36
%
MBS
3,299,035
3,405,445
35,476
29,577
2.17
%
1.74
%
FHLB stock
29,370
34,334
1,435
1,672
9.85
%
9.77
%
Other investments
20,253
17,094
421
310
4.19
%
3.64
%
Total investments
(3)
6,344,384
6,709,502
75,923
65,873
2.41
%
1.97
%
Residential mortgage loans
2,848,306
2,808,972
83,158
81,159
5.89
%
5.79
%
Construction loans
239,138
232,036
11,435
9,492
9.64
%
8.20
%
C&I and commercial mortgage loans
5,850,126
5,516,695
200,520
199,993
6.91
%
7.27
%
Finance leases
902,531
868,796
35,547
34,382
7.94
%
7.94
%
Consumer loans
2,847,858
2,813,829
162,054
159,528
11.48
%
11.37
%
Total loans
(4)(5)
12,687,959
12,240,328
492,714
484,554
7.83
%
7.94
%
 
Total interest-earning assets
$
19,032,343
$
18,949,830
$
568,637
$
550,427
6.03
%
5.83
%
Interest-bearing liabilities:
Time deposits
$
3,119,981
$
2,947,257
$
52,215
$
50,998
3.37
%
3.47
%
Brokered CDs
485,792
713,091
10,952
18,270
4.55
%
5.14
%
Other interest-bearing deposits
7,678,261
7,531,361
53,968
57,428
1.42
%
1.53
%
Advances from the FHLB
393,923
500,000
8,708
11,220
4.46
%
4.50
%
Other borrowings
31,538
161,700
1,156
6,686
7.39
%
8.29
%
Total interest-bearing liabilities
$
11,709,495
$
11,853,409
$
126,999
$
144,602
2.19
%
2.45
%
Net interest income on a tax-equivalent basis and excluding
valuations - non-GAAP
$
441,638
$
405,825
Interest rate spread
3.84
%
3.38
%
Net interest margin
4.68
%
4.29
%
(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.
 
The Corporation excludes
 
changes in the
 
fair value
of derivatives from interest income because the changes
 
in valuation do not affect interest received. See “Non-GAAP
 
Financial Measures and Reconciliations” above.
(2)
Government obligations include debt issued by government-sponsored
 
agencies.
(3)
Unrealized gains and losses on available-for-sale debt securities
 
are excluded from the average volumes.
(4)
Average loan balances include
 
the average of nonaccrual loans.
(5)
Interest income on
 
loans includes $3.7
 
million and $3.1
 
million for the
 
quarters ended June
 
30, 2025 and
 
2024, respectively,
 
and $9.1 million
 
and $6.3 million
 
for the six-month
 
periods
ended June 30, 2025 and 2024,
 
respectively, of income from prepayment
 
penalties and late fees related to
 
the Corporation’s loan
 
portfolio. The results for the six-month period
 
ended June
30, 2025 include $0.7 million in
 
interest income related to prepayment
 
penalties associated with the payoff
 
of a $73.8 million commercial mortgage
 
loan, and higher income from late
 
fees
in the consumer loans and finance leases portfolios.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
82
Part II
Quarter Ended June 30,
Six-Month Period Ended June 30,
2025 Compared to 2024
2025 Compared to 2024
Variance due to:
Variance due to:
Volume
Rate
Total
Volume
Rate
Total
(In thousands)
Interest income on interest-earning assets:
Money market and other short-term investments
$
5,017
$
(2,180)
$
2,837
$
12,185
$
(4,397)
$
7,788
Government obligations
(2,933)
1,505
(1,428)
(5,401)
1,890
(3,511)
MBS
(348)
3,988
3,640
(1,049)
6,948
5,899
FHLB stock
(192)
19
(173)
(243)
6
(237)
Other investments
32
(102)
(70)
62
49
111
Total investments
1,576
3,230
4,806
5,554
4,496
10,050
Residential mortgage loans
684
304
988
1,145
854
1,999
Construction loans
14
870
884
298
1,645
1,943
C&I and commercial mortgage loans
6,456
(6,614)
(158)
11,820
(11,293)
527
Finance leases
578
(140)
438
1,337
(172)
1,165
Consumer loans
(710)
1,978
1,268
(844)
3,370
2,526
Total loans
7,022
(3,602)
3,420
13,756
(5,596)
8,160
Total interest income
$
8,598
$
(372)
$
8,226
$
19,310
$
(1,100)
$
18,210
Interest expense on interest-bearing liabilities:
Time deposits
$
1,627
$
(1,468)
$
159
$
2,954
$
(1,737)
$
1,217
Brokered CDs
(2,202)
(897)
(3,099)
(5,331)
(1,987)
(7,318)
Other interest-bearing deposits
970
(3,063)
(2,093)
2,162
(5,622)
(3,460)
Advances from the FHLB
(1,981)
(111)
(2,092)
(2,359)
(153)
(2,512)
Other borrowings
(2,843)
(318)
(3,161)
(4,867)
(663)
(5,530)
Total interest expense
(4,429)
(5,857)
(10,286)
(7,441)
(10,162)
(17,603)
Change in net interest income
$
13,027
$
5,485
$
18,512
$
26,751
$
9,062
$
35,813
Portions of the Corporation’s
 
interest-earning assets, mostly investments
 
in obligations of some U.S.
 
government agencies and U.S.
GSEs, generate
 
interest that
 
is exempt
 
from income
 
tax, principally
 
in Puerto
 
Rico. Also,
 
interest and
 
gains on
 
sales of
 
investments
held by
 
the Corporation’s
 
international banking
 
entities (“IBEs”)
 
are tax-exempt
 
under Puerto
 
Rico tax
 
law (see
 
Note 14
 
– “Income
Taxes”
 
to the
 
unaudited consolidated
 
financial statements
 
included herein
 
for additional
 
information).
 
Management believes
 
that the
presentation of interest income
 
on an adjusted tax-equivalent
 
basis facilitates the comparison
 
of all interest data related
 
to these assets.
The
 
Corporation
 
estimated
 
the
 
tax
 
equivalent
 
yield
 
by
 
dividing
 
the
 
interest
 
rate
 
spread
 
on
 
exempt
 
assets
 
by
 
1
 
less
 
the
 
Puerto
 
Rico
statutory
 
tax
 
rate
 
(37.5%)
 
and
 
adding
 
to
 
it
 
the
 
average
 
cost
 
of
 
interest-bearing
 
liabilities.
 
The
 
computation
 
considers
 
the
 
interest
expense disallowance required by Puerto Rico tax law.
 
Management
 
believes
 
that
 
the
 
presentation
 
of
 
net
 
interest
 
income,
 
excluding
 
the
 
effects
 
of
 
the
 
changes
 
in
 
the
 
fair
 
value
 
of
 
the
derivative
 
instruments
 
(“valuations”),
 
provides
 
additional
 
information
 
about
 
the
 
Corporation’s
 
net
 
interest
 
income
 
and
 
facilitates
comparability and analysis from
 
period to period. The changes
 
in the fair value of
 
the derivative instruments have
 
no effect on interest
earned on interest-earning assets.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
83
The following
 
table reconciles
 
net interest
 
income in
 
accordance with
 
GAAP to
 
net interest
 
income, excluding
 
valuations, and
 
net
interest
 
income
 
on
 
an
 
adjusted
 
tax-equivalent
 
basis
 
for
 
the
 
indicated
 
periods.
 
The
 
table
 
also
 
reconciles
 
net
 
interest
 
spread
 
and
 
net
interest margin on a GAAP basis to these items excluding valuations, and
 
on an adjusted tax-equivalent basis:
Quarter Ended
Six-Month Period Ended
June 30,
June 30,
2025
2024
2025
2024
(Dollars in thousands)
Interest income - GAAP
$
278,190
$
272,245
$
555,255
$
540,750
Unrealized loss (gain) on derivative instruments
3
-
6
(2)
Interest income excluding valuations - non-GAAP
278,193
272,245
555,261
540,748
Tax-equivalent adjustment
7,144
4,866
13,376
9,679
Interest income on a tax-equivalent basis
 
and excluding valuations - non-GAAP
$
285,337
$
277,111
$
568,637
$
550,427
Interest expense - GAAP
$
62,331
$
72,617
$
126,999
$
144,602
Net interest income - GAAP
$
215,859
$
199,628
$
428,256
$
396,148
Net interest income excluding valuations - non-GAAP
$
215,862
$
199,628
$
428,262
$
396,146
Net interest income on a tax-equivalent basis
 
and excluding valuations - non-GAAP
$
223,006
$
204,494
$
441,638
$
405,825
Average Balances
 
Loans and leases
$
12,742,809
$
12,272,816
$
12,687,959
$
12,240,328
Total securities, other short-term investments and interest-bearing
 
cash balances
6,245,844
6,698,609
6,344,384
6,709,502
Average interest-earning assets
$
18,988,653
$
18,971,425
$
19,032,343
$
18,949,830
Average interest-bearing liabilities
$
11,670,411
$
11,868,658
$
11,709,495
$
11,853,409
Average assets
(1)
$
19,041,206
$
18,884,431
$
19,073,972
$
18,871,365
Average non-interest-bearing deposits
$
5,402,655
$
5,351,308
$
5,414,181
$
5,329,920
Average Yield/Rate
Average yield on interest-earning assets - GAAP
5.88%
5.76%
5.88%
5.72%
Average rate on interest-bearing liabilities - GAAP
2.14%
2.45%
2.19%
2.45%
Net interest spread - GAAP
3.74%
3.31%
3.69%
3.27%
Net interest margin - GAAP
4.56%
4.22%
4.54%
4.19%
Average yield on interest-earning assets excluding valuations
 
- non-GAAP
5.88%
5.76%
5.88%
5.72%
Average rate on interest-bearing liabilities
2.14%
2.45%
2.19%
2.45%
Net interest spread excluding valuations
 
- non-GAAP
3.74%
3.31%
3.69%
3.27%
Net interest margin excluding valuations - non-GAAP
4.56%
4.22%
4.54%
4.19%
Average yield on interest-earning assets on a tax-equivalent
 
basis and excluding
valuations - non-GAAP
6.03%
5.86%
6.03%
5.83%
Average rate on interest-bearing liabilities
2.14%
2.45%
2.19%
2.45%
Net interest spread on a tax-equivalent basis
 
and excluding valuations - non-GAAP
3.89%
3.41%
3.84%
3.38%
Net interest margin on a tax-equivalent basis and excluding
 
valuations - non-GAAP
4.71%
4.32%
4.68%
4.29%
(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.
 
84
Net interest income
 
amounted to $215.9
 
million for the
 
quarter ended June
 
30, 2025, an
 
increase of $16.3
 
million, when
 
compared
to $199.6 million for the same period in 2024. The $16.3 million increase in net
 
interest income consisted of:
●
A $10.3 million decrease in interest expense on interest-bearing liabilities consisting
 
of:
●
A $5.3 million decrease
 
in interest expense on borrowings,
 
driven by a $152.3 million
 
decrease in the average balance of
junior
 
subordinated
 
debentures
 
due
 
to
 
redemptions
 
during
 
the
 
second
 
half
 
of
 
2024
 
and
 
first
 
half
 
of
 
2025,
 
and
 
$180.0
million in FHLB advances that matured and were repaid in March 2025.
●
A $5.0 million decrease in interest expense on interest-bearing deposits, consisting
 
of:
-
A
 
$3.1
 
million
 
decrease
 
in
 
interest
 
expense
 
on
 
brokered
 
CDs,
 
due
 
to
 
a
 
$2.2
 
million
 
decrease
 
associated
 
with
 
a
$188.6 million decrease in
 
the average balance,
 
and a $0.9 million decrease
 
mainly associated with new
 
issuances at
lower interest rates than maturing brokered CDs.
-
A $2.1
 
million decrease
 
in interest
 
expense on
 
interest-bearing checking
 
and saving
 
accounts, due
 
to a $3.1
 
million
decrease driven by
 
the effect of
 
lower interest rates
 
when compared
 
to the same period
 
in 2024, partially
 
offset by
 
a
$1.0 million
 
increase associated
 
with a $134.4
 
million increase in
 
the average balance.
 
The average
 
cost of interest-
bearing checking
 
and saving
 
accounts in
 
the second
 
quarter of
 
2025 decreased
 
14 bps
 
to 1.38%
 
when compared
 
to
the same
 
period
 
in 2024,
 
mostly driven
 
by government
 
deposits in
 
the
 
Puerto
 
Rico region.
 
Excluding
 
government
deposits, the average cost
 
of interest-bearing checking and savings
 
accounts for the quarter ended
 
June 30, 2025 was
0.72%, compared to 0.75% for the same period in 2024.
Partially offset by:
-
A
 
$0.2
 
million
 
increase
 
in
 
interest
 
expense
 
on
 
time
 
deposits,
 
excluding
 
brokered
 
CDs,
 
driven
 
by
 
a
 
$1.6
 
million
increase associated with
 
a $188.2 million increase
 
in the average balance,
 
which was almost offset
 
by a $1.4 million
decrease related
 
to lower rates
 
paid on new
 
issuances and renewals.
 
The average cost
 
of time deposits
 
in the second
quarter of
 
2025, excluding
 
brokered CDs,
 
decreased 19
 
bps to
 
3.36% when
 
compared to
 
the same
 
period in
 
2024.
Excluding
 
government
 
deposits,
 
the
 
average
 
cost
 
of
 
time
 
deposits
 
for
 
the
 
second
 
quarter
 
of
 
2025
 
was
 
3.37%,
compared to 3.47% for the same period in 2024.
●
A $3.3 million
 
net increase in
 
investment securities and
 
interest-bearing cash balances,
 
mainly due to
 
a $2.8 million
 
increase
in interest income from interest-bearing
 
cash balances, driven by a $403.0 million
 
net increase in the average balances,
 
which
consisted primarily
 
of deposits
 
maintained
 
at the
 
FED, which
 
more than
 
compensated for
 
the reduction
 
in the
 
federal funds
rate.
●
A $2.7 million increase in interest income on loans, driven by:
-
A $1.7
 
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.
-
A
 
$1.0
 
million
 
increase
 
in
 
interest
 
income
 
on
 
residential
 
mortgage
 
loans,
 
mostly
 
associated
 
with
 
a
 
$47.0
 
million
increase in the average balance.
 
85
Net interest
 
income amounted
 
to $428.3
 
million for
 
the six-month
 
period ended
 
June 30,
 
2025, an
 
increase of
 
$32.2 million
 
when
compared to $396.1 million for same period in 2024. The $32.2 million
 
increase in net interest income was primarily due to:
●
A $17.6 million decrease in interest expense on interest-bearing liabilities, consisting
 
of:
●
A $9.6 million decrease in interest expense on interest-bearing deposits, consisting
 
of:
-
A $7.3 million decrease in interest
 
expense on brokered CDs due to
 
a $5.3
 
million decrease associated with a $227.3
million decrease
 
in the
 
average balance,
 
and a $2.0
 
million decrease
 
mainly associated
 
with new
 
issuances at lower
interest rates than maturing brokered CDs.
-
A $3.5
 
million decrease
 
in interest
 
expense on
 
interest-bearing checking
 
and saving
 
accounts, due
 
to a $5.7
 
million
decrease
 
mainly
 
related
 
to
 
the
 
overall
 
lower
 
interest
 
rate
 
environment,
 
partially
 
offset
 
by
 
a
 
$2.2
 
million
 
increase
associated with
 
a $146.9
 
million increase
 
in the
 
average balance.
 
The average
 
cost of interest-bearing
 
checking and
saving accounts
 
decreased by
 
11 bps
 
to 1.42%
 
for the
 
first six
 
months of
 
2025 as
 
compared to
 
1.53% for
 
the same
period
 
in 2024,
 
mostly
 
driven by
 
government
 
deposits
 
in
 
the Puerto
 
Rico
 
region.
 
Excluding
 
government
 
deposits,
the
 
average
 
cost
 
of
 
interest-bearing
 
checking
 
and
 
savings
 
accounts
 
for
 
the
 
first
 
six
 
months
 
of
 
2025
 
was
 
0.74%,
compared to 0.75% for the same period in 2024.
Partially offset by:
-
A
 
$1.2
 
million
 
increase
 
in
 
interest
 
expense
 
on
 
time
 
deposits,
 
excluding
 
brokered
 
CDs,
 
driven
 
by
 
a
 
$2.9
 
million
increase associated with
 
a $172.7 million
 
increase in the
 
average balance, partially
 
offset by a
 
$1.7 million decrease
related to lower
 
rates paid on new
 
issuances and renewals.
 
The average cost
 
of time deposits for
 
the first six months
of 2025,
 
excluding brokered
 
CDs, decreased
 
10
 
bps to
 
3.37% as
 
compared
 
to 3.47%
 
for the
 
same period
 
in 2024,
mostly driven by government time deposits in the Puerto Rico region.
●
An
 
$8.0
 
million
 
decrease
 
in
 
interest
 
expense
 
on
 
borrowings,
driven
 
by
 
the
 
aforementioned
 
redemption
 
of
 
junior
subordinated debentures during the second half of
 
2024 and first half of 2025, and $180.0 million in FHLB advances
 
that
matured and were repaid in March 2025.
●
A $7.7
 
million net
 
increase in investment
 
securities and
 
interest-bearing cash
 
balances mainly
 
due to a
 
$7.8 million
 
increase
in interest income from interest-bearing
 
cash balances, driven by a $490.0 million
 
net increase in the average balances,
 
which
consisted
 
primarily
 
of
 
cash
 
balances
 
deposited
 
at
 
the
 
FED,
 
which
 
more
 
than
 
compensated
 
for
 
the
 
reduction
 
in
 
the
 
federal
funds rate.
●
A $6.9 million increase in interest income on loans, consisting of:
-
A $3.7
 
million
 
increase
 
in interest
 
income
 
on consumer
 
loans and
 
finance
 
leases, mainly
 
due
 
to higher
 
yields and
higher income from late fees, mainly in the auto loans portfolio.
-
A
$2.0
 
million
 
increase
 
in
 
interest
 
income
 
on
 
residential
 
mortgage
 
loans,
 
mostly
 
associated
 
with
 
a
 
$39.3
 
million
increase in the average balance.
-
A
 
$1.2
 
million
 
increase
 
in
 
interest
 
income
 
on
 
commercial
 
and
 
construction
 
loans,
 
driven
 
by
 
an
 
$11.6
 
million
increase
 
associated
 
with
 
a
 
$340.5
 
million
 
increase
 
in
 
the
 
average
 
balance,
 
partially
 
offset
 
by
 
a
 
$10.4
 
million
 
net
decrease
 
due
 
to
 
the
 
effect
 
of
 
lower
 
interest
 
rates
 
on
 
the
 
downward
 
repricing
 
of
 
variable-rate
 
loans,
 
which
 
was
compensated
 
in
 
part
 
by
 
$1.2
 
million
 
in
 
interest
 
income
 
recognized
 
during
 
the
 
first
 
half of
 
2025
 
as
 
a
 
result
 
of
 
the
payoff
 
of $73.8
 
million
 
commercial mortgage
 
loan, of
 
which $0.7
 
million
 
related to
 
prepayment
 
penalties and
 
the
remainder to the acceleration of unamortized net deferred fees.
As of June 30, 2025, the
 
interest rate on approximately 52% of
 
the Corporation’s
 
commercial and construction loans was
tied to
 
variable rates,
 
with 33%
 
based upon
 
SOFR of
 
3 months
 
or less,
 
11%
 
based upon
 
the Prime
 
rate index,
 
and 8%
based on other indexes.
 
For the six-month period
 
ended June 30, 2025, the
 
average one-month SOFR decreased
 
101 bps,
the
 
average
 
three-month
 
SOFR
 
decreased
 
104
 
bps,
 
and
 
the
 
average
 
Prime
 
rate
 
decreased
 
100
 
bps,
 
compared
 
to
 
the
average rates for such indexes for the six-month period ended June 30, 2024.
 
 
 
 
 
86
Net interest margin
 
for the second
 
quarter of 2025
 
increased
 
34 bps to
4.56%, compared to
 
4.22% for the
 
same period in
 
2024, and
by 35
 
bps to
 
4.54% for
 
the first
 
six months
 
of 2025,
 
compared to
 
4.19% for
 
the same
 
period in
 
2024. The
 
increase in
 
the net
 
interest
margin
 
mostly reflects
 
a decrease
 
in the
 
cost of
 
funds and
 
a change
 
in asset
 
mix associated
 
with the
 
deployment of
 
cash flows
 
from
lower-yielding
 
investment
 
securities
 
to
 
higher-yielding
 
interest-earning
 
assets.
 
These
 
factors
 
were
 
partially
 
offset
 
by
 
the
 
downward
repricing of variable-rate commercial loans and a lower federal funds rate on
 
cash deposited at the FED.
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 $20.4
 
million for
 
the second
 
quarter of
 
2025, compared
 
to $11.9
million for the second quarter of 2024. The variances by major portfolio
 
category were as follows:
●
Provision for credit losses for the
 
residential mortgage loan portfolio was
 
an expense of $0.8 million for
 
the second quarter of
2025, compared
 
to a net
 
benefit of
 
$10.6 million
 
for the
 
second quarter
 
of 2024.
 
The net
 
benefit recorded
 
during the
 
second
quarter
 
of
 
2024
 
was
 
driven
 
by
 
updated
 
historical
 
loss
 
experience
 
used
 
for
 
determining
 
the
 
ACL
 
estimate
 
resulting
 
in
 
a
downward revision of estimated loss severities and lower required reserve
 
levels.
 
●
Provision for credit
 
losses for the
 
commercial and construction
 
loan portfolios was
 
an expense of
 
$1.8 million for
 
the second
quarter of
 
2025, compared
 
to a
 
net benefit
 
of $4.2
 
million for
 
the second
 
quarter of
 
2024. The
 
expense recorded
 
during the
second quarter of
 
2025 was mainly
 
due to C&I
 
loan growth. The
 
net benefit recorded
 
during the second
 
quarter of 2024
 
was
driven by
 
an improvement
 
on the
 
economic outlook
 
of certain
 
macroeconomic variables,
 
particularly in
 
variables associated
with
 
commercial
 
real
 
estate
 
property
 
performance,
 
and
 
$1.2
 
million
 
in
 
recoveries
 
of
 
two
 
commercial
 
loans
 
in
 
the
 
Florida
region.
●
Provision for credit
 
losses for the
 
consumer loan and
 
finance lease portfolios
 
was an expense
 
of $17.8 million
 
for the second
quarter of 2025,
 
compared to an
 
expense of $26.7
 
million for the
 
second quarter
 
of 2024. The
 
decrease in
 
provision expense
was
 
driven
 
by
 
improvements
 
in
 
macroeconomic
 
variables,
 
mainly
 
in
 
the
 
projection
 
of
 
the
 
unemployment
 
rate;
 
lower
 
net
charge-offs;
 
reductions
 
in
 
the
 
unsecured
 
loan
 
portfolio
 
volumes;
 
and
 
the
 
provision
 
recorded
 
during
 
the
 
second
 
quarter
 
of
2024
 
due
 
to
 
updates
 
in
 
the historical
 
loss experience
 
used for
 
determining
 
the
 
ACL estimate,
 
which
 
resulted
 
in
 
an upward
revision of estimated loss severities and higher required reserve levels in the
 
auto loans and finance leases portfolios.
The provision
 
for credit
 
losses for
 
loans and
 
finance leases
 
was $45.2
 
million for
 
the first
 
half of
 
2025, compared
 
to $24.8
 
million
for the same period in 2024. The variances by major portfolio category were
 
as follows:
●
Provision
 
for
 
credit losses
 
for
 
the commercial
 
and
 
construction
 
loan
 
portfolios
 
was an
 
expense
 
of $6.4
 
million
 
for
 
the first
half of 2025,
 
compared to a
 
net benefit $6.7
 
million for the same
 
period in 2024.
 
The increase in provision
 
expense recorded
during
 
the
 
first six
 
months
 
of
 
2025
 
was mainly
 
due
 
to
 
updated
 
financial
 
information
 
of certain
 
commercial
 
borrowers
 
and
C&I loan
 
growth. The
 
net benefit
 
recorded during
 
the first
 
six months
 
of 2024
includes a
 
$5.0 million
 
recovery associated
with a C&I loan in the Puerto Rico region and the aforementioned
 
$1.2 million in recoveries in the Florida region.
●
Provision for credit losses for the residential mortgage
 
loan portfolio was an expense of $1.8 million for
 
the first half of 2025,
compared to a
 
net benefit of
 
$11.1 million
 
for the same
 
period in 2024.
 
The net benefit recorded
 
during the first
 
half of 2024
was driven by the aforementioned downward revision of estimated loss severities
 
.
●
Provision for credit losses
 
for the consumer loan
 
and finance lease portfolios
 
was an expense of $37.0
 
million for the first six
months
 
of 2025,
 
compared
 
to an
 
expense
 
of $42.6
 
million for
 
the same
 
period
 
in 2024.
 
The decrease
 
in provision
 
expense
was mainly
 
due to reductions
 
in the
 
unsecured loan
 
portfolio volumes,
 
the aforementioned
 
improvements in
 
macroeconomic
variables,
lower charge-offs,
 
and the aforementioned
 
provision recorded
 
during the second
 
quarter of 2024
 
due to updates
 
in
the historical
 
loss experience,
 
partially offset
 
by a
 
$7.1 million
 
decrease in
 
recoveries associated
 
with the
 
bulk sales
 
of fully
charged-off loans that took place in the
 
first quarter of each year.
 
87
 
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
second quarter
 
and first half
 
of 2025 was
 
an expense of
 
$0.3 million and
 
$0.2 million,
 
respectively,
 
compared to
 
a net benefit
 
of $0.4
million and $0.1 million, respectively,
 
for the same periods in 2024.
 
The provision
 
for credit
 
losses for
 
held-to-maturity and
 
available-for-sale debt
 
securities was
 
a net
 
benefit of
 
$81 thousand
 
for the
second quarter of 2025, compared to an expense of $92 thousand for
 
the same period in 2024.
 
 
The provision for
 
credit losses for held-to-maturity
 
and available-for-sale debt
 
securities for the
 
first half of 2025
 
was a net benefit
of $45 thousand, compared to a net benefit of $0.9 million for the
 
same period in 2024. The net benefit recorded during the first half of
2024 was mostly driven by improvements in the underlying updated
 
financial information of a Puerto Rico municipal bond issuer.
 
88
Non-Interest Income
Non-interest
 
income amounted
 
to $30.9
 
million for
 
the second
 
quarter of
 
2025, compared
 
to $32.0
 
million for
 
the same
 
period in
2024.
 
The $1.1 million decrease in non-interest income was driven by lower
 
realized gains from purchased income tax credits reported
as part of other non-interest income.
Non-interest
 
income for
 
the six-month
 
period ended
 
June 30,
 
2025 amounted
 
to $66.7
 
million, compared
 
to $66.0
 
million for
 
the
same
 
period
 
in
 
2024.
 
The
 
$0.7
 
million
 
increase
 
in
 
non-interest
 
income
 
was
 
primarily
 
due
 
to
 
a
 
$0.5
 
million
 
increase
 
in
 
card
 
and
processing income due to higher transactional volumes.
Non-Interest Expenses
Non-interest
 
expenses for
 
the quarter
 
ended June
 
30, 2025
 
amounted
 
to $123.3
 
million, compared
 
to $118.7
 
million for
 
the same
period in
 
2024. The
 
efficiency ratio
 
for the
 
second quarter of
 
2025 was
 
49.97%, compared
 
to 51.23% for
 
the second
 
quarter of
 
2024.
Non-interest expenses for
 
the second quarter of
 
2024 include the $0.2
 
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
 
this
Special Item, adjusted non-interest expenses increased by $4.8 million
 
primarily due to:
●
A
 
$3.0
 
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 the
 
second quarter
 
of 2024
 
and a
 
decrease in
 
net
realized gains on sales of residential OREO properties in the Puerto Rico
 
region.
●
A $2.6 million increase in employees’ compensation
 
and benefits expenses, primarily driven by an increase
 
of $1.1 million
in salary
 
expense mainly
 
due to
 
annual salary
 
merit increases
 
that became
 
effective
 
in the
 
third quarter
 
of 2024
 
and $0.9
million in bonus incentives.
Partially offset by:
●
A $0.9 million
 
decrease in business
 
promotion expenses,
 
primarily due to
 
the rescheduling of
 
certain marketing initiatives
to the second half of 2025.
●
A $0.8
 
million
 
decrease
 
in professional
 
service
 
fees,
 
mainly
 
due
 
to
 
a $0.8
 
million
 
decrease
 
in
 
consulting
 
fees
 
driven by
higher information
 
technology infrastructure
 
enhancements during
 
the second quarter
 
of 2024
 
and a $0.5
 
million decrease
in collections, appraisals and other credit-related fees, partially offset
 
by a $0.6
 
million increase in outsourcing fees.
Non-interest
 
expenses for
 
the six-month
 
period ended
 
June 30,
 
2025 amounted
 
to $246.4
 
million, compared
 
to $239.6
 
million for
the same period in
 
2024. The efficiency ratio
 
for the first six months
 
of 2025 was 49.78%, compared
 
to 51.84% for the same period
 
in
2024. Non-interest expenses
 
for the six-month
 
period ended June
 
30, 2024 include the
 
$1.1 million FDIC special
 
assessment expense.
See
 
“Non-GAAP
 
Financial
 
Measures
 
and
 
Reconciliations”
 
above
 
for
 
additional
 
information.
 
On
 
a
 
non-GAAP
 
basis,
 
excluding
 
the
effect of this Special Item, adjusted non-interest expenses
 
increased by $7.9 million primarily due to:
●
A
 
$5.2
 
million
 
increase
 
in
 
employees’
 
compensation
 
and
 
benefits
 
expenses,
 
driven
 
by
 
a
 
$3.0
 
million
 
increase
 
in
 
bonus
incentives,
 
which
 
includes
 
a
 
$1.0
 
million
 
increase
 
in
 
stock-based
 
compensation
 
expense,
 
of
 
which
 
$0.4
 
million
 
was
associated
 
with
 
retirement-eligible
 
employees;
 
and
 
a
 
$1.2
 
million
 
increase
 
in
 
salary
 
expense
 
mainly
 
due
 
to
 
the
aforementioned annual salary merit increases.
●
A $3.3 million
 
decrease in
 
net gains on
 
OREO operations,
 
driven by
 
the aforementioned
 
$2.3 million
 
realized gain on
 
the
sale
 
of
 
a
 
commercial
 
real
 
estate
 
OREO
 
property
 
in
 
the
 
Puerto
 
Rico
 
region
 
during
 
the
 
second
 
quarter
 
of
 
2024
 
and
 
a
decrease in net realized gains on sales of residential OREO properties in
 
the Puerto Rico region.
●
A
 
$1.7
 
million
 
increase
 
in
 
occupancy
 
and
 
equipment
 
expenses,
 
primarily
 
reflecting
 
increases
 
in
 
software
 
maintenance
charges.
Partially offset by:
●
A $2.0
 
million
 
decrease
 
in professional
 
service
 
fees,
 
mainly
 
due
 
to
 
a $1.9
 
million
 
decrease
 
in
 
consulting
 
fees
 
driven by
higher information technology infrastructure
 
enhancements during the first six
 
months of 2024 and a $1.3
 
million decrease
in collections, appraisals and other credit-related fees, partially offset
 
by a $1.1 million increase in outsourcing fees.
 
89
Income Taxes
For the
 
quarter and
 
six-month period
 
ended June
 
30, 2025,
 
the Corporation
 
recorded an
 
income tax
 
expense of
 
$22.7 million
 
and
$45.9 million, respectively,
 
compared to an
 
income tax expense of
 
$25.5 million and
 
$49.5 million, respectively,
 
for the same period
 
s
in 2024. The
 
decrease in income
 
tax expense for
 
the second quarter
 
and six-month period
 
ended June 30,
 
2025 was driven
 
by a lower
estimated annual
 
effective tax rate
 
due to a
 
higher proportion of
 
exempt to taxable
 
income and a
 
$0.5 million tax
 
contingency accrual
release during the second quarter of 2025 in connection with the expiration
 
of the statute of limitation on some uncertain tax positions.
The
 
Corporation’s
 
estimated
 
annual
 
effective
 
tax
 
rate,
 
excluding
 
entities
 
with
 
pre-tax
 
losses
 
from
 
which
 
a
 
tax
 
benefit
 
cannot
 
be
recognized and
 
discrete items, was
 
22.8%
 
for the first
 
six months
 
of 2025,
 
compared to 24.1%
 
for the same
 
period in 2024.
 
See Note
14 – “Income Taxes
 
”
 
to the unaudited consolidated financial statements herein for additional
 
information.
 
As of June
 
30, 2025, the Corporation
 
had a net deferred
 
tax asset of $134.8
 
million, net of a
 
valuation allowance of
 
$103.3 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
decrease in
 
the net
 
deferred tax
 
asset was mainly
 
related to
 
the usage
 
of alternative
 
minimum tax
 
credits. Meanwhile,
 
the decrease
 
in
the valuation allowance
 
was primarily related to
 
changes in the market
 
value of available-for-sale
 
debt securities, which resulted
 
in an
equal change
 
in the net
 
deferred tax asset
 
without impacting
 
earnings as they
 
are fully
 
reserved as the
 
Corporation does
 
not expect
 
to
realize such benefits.
 
On July 17, 2025, the
 
Government of Puerto Rico enacted
 
Act 65-2025. See Note 14
 
– “Income Taxes”
 
for additional details on the
potential impact to the Corporation.
Assets
 
The
 
Corporation’s
 
total
 
assets
 
were
 
$18.9
 
billion
 
as
 
of
 
June
 
30,
 
2025,
 
a
 
decrease
 
of
 
$395.4
 
million
 
from
 
December
 
31,
 
2024,
primarily related
 
to a
 
decrease in
 
cash and
 
cash equivalents
 
resulting from
 
the decrease
 
in total
 
deposits, the
 
repayment of
 
long-term
borrowings, and capital deployment
 
actions, partially offset
 
by the increase in the
 
fair value of available-for-sale
 
debt securities due to
changes in market interest rates.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
90
Loans Receivable, including Loans Held for Sale
As of June 30, 2025,
 
the Corporation’s
 
total loan portfolio before
 
the ACL amounted to $12.9
 
billion, an increase of
 
$118.0 million
compared
 
to
 
December
 
31,
 
2024,
 
of
 
which
 
$103.4
 
million
 
was
 
in
 
commercial
 
and
 
construction
 
loans.
 
In
 
the
 
Florida
 
region,
commercial and construction loans increased
 
by $135.9 million mainly due to the
 
origination of nine commercial
 
loans, each in excess
of
 
$10
 
million,
 
totaling
 
$143.4
 
million,
 
of
 
which
 
$70.3
 
million
 
were
 
purchases
 
of
 
loan
 
participations.
 
In
 
the
 
Virgin
 
Islands
 
region,
commercial
 
and
 
construction loans
 
increased
 
by $45.6
 
million, in
 
part
 
due
 
to a
 
$27.7 million
 
disbursement
 
of a
 
government
 
line of
credit. Meanwhile, in
 
the Puerto Rico region,
 
commercial and construction
 
loans decreased by
 
$78.1 million driven
 
by the payoff of
 
a
$73.8 million
 
commercial mortgage
 
loan in the
 
hospitality industry
 
and a $53.2
 
million reduction
 
in the balance
 
of floor plan
 
lines of
credit,
 
partially offset by the origination of a $50.0 million C&I term loan.
As of
 
June
 
30,
 
2025,
 
the
 
Corporation’s
 
loans
 
held-for-investment
 
portfolio
 
was comprised
 
of
 
commercial
 
and
 
construction
 
loans
(48%),
 
consumer
 
loans
 
and
 
finance
 
leases
 
(30%),
 
and
 
residential
 
real
 
estate
 
loans
 
(22%).
 
Of
 
the
 
total
 
gross
 
loan
 
portfolio
 
held
 
for
investment of $12.9 billion as of June 30, 2025, the Corporation had
 
credit risk concentration of approximately 77% in the Puerto Rico
region, 19% in the United States region (mainly in the
 
state of Florida), and 4% in the Virgin
 
Islands region, as shown in the following
table:
As of June 30, 2025
Puerto Rico
Virgin Islands
United States
Total
(In thousands)
Residential mortgage loans
$
2,190,283
$
153,611
$
515,264
$
2,859,158
Construction loans
191,610
12,875
40,865
245,350
Commercial mortgage loans
1,700,173
74,058
728,244
2,502,475
C&I loans
2,204,658
162,342
1,149,008
3,516,008
 
Total commercial loans
4,096,441
249,275
1,918,117
6,263,833
Consumer loans and finance leases
3,673,788
67,354
5,869
3,747,011
 
Total loans held for investment,
 
gross
$
9,960,512
$
470,240
$
2,439,250
$
12,870,002
Loans held for sale
9,857
-
-
9,857
 
Total loans, gross
$
9,970,369
$
470,240
$
2,439,250
$
12,879,859
As of December 31, 2024
Puerto Rico
Virgin Islands
United States
Total
(In thousands)
Residential mortgage loans
$
2,166,980
$
156,225
$
505,226
$
2,828,431
Construction loans
181,607
2,820
43,969
228,396
Commercial mortgage loans
1,800,445
67,449
698,090
2,565,984
C&I loans
2,192,468
133,407
1,040,163
3,366,038
 
Total commercial loans
4,174,520
203,676
1,782,222
6,160,418
Consumer loans and finance leases
3,680,628
69,577
7,502
3,757,707
 
Total loans held for investment,
 
gross
$
10,022,128
$
429,478
$
2,294,950
$
12,746,556
Loans held for sale
14,558
434
284
15,276
 
Total loans, gross
$
10,036,686
$
429,912
$
2,295,234
$
12,761,832
See “Risk Management –
 
Exposure to Puerto Rico Government”
 
and “Risk Management –
 
Exposure to USVI Government”
 
below
for information on the Corporation’s
 
credit exposure to PR and USVI government entities.
As of June 30, 2025, the
 
Corporation’s total
 
commercial mortgage loan exposure amounted
 
to $2.5 billion, or 19% of
 
the total loan
portfolio. In
 
terms of
 
geography,
 
$1.7 billion
 
of the
 
exposure was
 
in the
 
Puerto Rico
 
region, $0.7
 
billion of
 
the exposure
 
was in
 
the
Florida region,
 
and $0.1
 
billion of
 
the exposure
 
was in the
 
Virgin
 
Islands region.
 
The $1.7
 
billion exposure
 
in the
 
Puerto Rico
 
region
was comprised mainly of 41%
 
in the retail industry,
 
26% in office real estate,
 
and 19% in the hotel industry.
 
The $0.7 billion exposure
in the Florida region was comprised mainly of 35% in the retail industry,
 
21% in the hotel industry,
 
and 7% in office real estate. Of the
Corporation’s
 
total commercial
 
mortgage loan
 
exposure of
 
$2.5 billion,
 
$336.1 million
 
matures within
 
the next
 
12 months
 
and has
 
a
weighted-average interest
 
rate of
 
approximately 5.98%.
 
Commercial mortgage
 
loan exposure
 
in the
 
office real
 
estate industry,
 
which
matures within the next 12 months, amounted to $108.7 million and has
 
a weighted-average interest rate of approximately 5.70%.
As of
 
June 30,
 
2025 and
 
December 31,
 
2024, the
 
Corporation’s
 
total exposure
 
to shared
 
national credit
 
(“SNC”) loans
 
(including
unused commitments)
 
amounted to
 
$1.2 billion
 
and $1.3
 
billion, respectively.
 
As of
 
June 30,
 
2025, approximately
 
$350.7 million
 
of
the
 
SNC
 
exposure
 
is
 
related
 
to
 
the
 
portfolio
 
in
 
the
 
Puerto
 
Rico
 
region
 
and
 
$893.6
 
million
 
is
 
related
 
to
 
the
 
portfolio
 
in
 
the
 
Florida
region.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
91
Loan Production
First BanCorp.
 
relies primarily
 
on its
 
retail network
 
of branches
 
to originate
 
residential and
 
consumer loans.
 
The Corporation
 
may
supplement
 
its residential
 
mortgage originations
 
with wholesale
 
servicing released
 
mortgage loan
 
purchases from
 
mortgage bankers.
The
 
Corporation
 
manages
 
its
 
construction
 
and
 
commercial
 
loan
 
originations
 
through
 
centralized
 
units
 
and
 
most
 
of
 
its
 
originations
come
 
from
 
existing
 
customers,
 
as
 
well
 
as
 
through
 
referrals
 
and
 
direct
 
solicitations.
 
Auto
 
loans
 
and
 
finance
 
leases
 
originations
 
rely
primarily on relationships with auto dealers and dedicated sales professionals who
 
serve selected locations to facilitate originations.
 
The
 
following
 
table
 
provides
 
a
 
breakdown
 
of
 
First
 
BanCorp.’s
 
loan
 
production,
 
including
 
purchases,
 
refinancings,
 
renewals
 
and
draws from existing revolving and non-revolving commitments by geographic
 
segment,
 
for the indicated periods:
Quarter Ended June 30,
Six-Month Period Ended June 30,
2025
2024
2025
2024
(In thousands)
Puerto Rico:
 
Residential mortgage
$
98,166
$
92,624
$
199,586
$
160,267
 
Construction
25,284
38,459
51,998
74,110
 
Commercial mortgage
96,640
83,852
100,924
101,754
 
C&I
481,886
337,347
846,074
742,566
 
Consumer
383,223
404,645
752,659
798,551
 
Total loan production
$
1,085,199
$
956,927
$
1,951,241
$
1,877,248
Virgin Islands:
 
Residential mortgage
$
2,810
$
696
$
3,533
$
2,122
 
Construction
2,297
162
10,098
162
 
Commercial mortgage
742
298
9,192
423
 
C&I
33,921
12,351
58,386
23,460
 
Consumer
6,320
8,897
14,078
16,793
 
Total loan production
$
46,090
$
22,404
$
95,287
$
42,960
Florida:
 
Residential mortgage
$
25,783
$
28,884
$
37,470
$
47,985
 
Construction
7,692
9,609
22,483
20,655
 
Commercial mortgage
31,168
20,304
78,789
77,933
 
C&I
216,657
219,086
403,570
391,253
 
Consumer
1,335
2,970
1,668
3,427
 
Total loan production
$
282,635
$
280,853
$
543,980
$
541,253
Total:
 
Residential mortgage
$
126,759
$
122,204
$
240,589
$
210,374
 
Construction
35,273
48,230
84,579
94,927
 
Commercial mortgage
128,550
104,454
188,905
180,110
 
C&I
732,464
568,784
1,308,030
1,157,279
 
Consumer
390,878
416,512
768,405
818,771
 
Total loan production
$
1,413,924
$
1,260,184
$
2,590,508
$
2,461,461
 
 
92
Commercial and
 
construction loan
 
originations (excluding
 
government loans)
 
for the
 
quarter and
 
six-month period
 
ended June
 
30,
2025
 
amounted
 
to
 
$859.6
 
million
 
and
 
$1.5
 
billion,
 
respectively,
 
compared
 
to
 
$705.9
 
million
 
and
 
$1.4
 
billion,
 
respectively,
 
for
 
the
same periods
 
in 2024.
 
The increase
 
for the
 
quarter and
 
six-month period
 
ended June
 
30, 2025
 
was mainly
 
in the
 
Puerto Rico
 
region.
The growth in
 
the Puerto Rico region
 
for the first six
 
months
of 2025 includes
 
the effect of
 
the origination of
 
three C&I relationships,
each in excess of $25 million, with
 
an aggregate balance of $108.5 million
 
and higher utilization of C&I lines of
 
credit, partially offset
by an $81.9 million decrease in the floor plan portfolio.
Government
 
loan
 
originations
 
for
 
the
 
quarter
 
and
 
six-month
 
period
 
ended
 
June
 
30,
 
2025
 
amounted
 
to
 
$36.7
 
million
 
and
 
$65.6
million, respectively,
 
compared to $15.6
 
million and $51.4
 
million, respectively,
 
for the comparable
 
periods in 2024.
 
The increase for
the first six
 
months of 2025
 
was mainly related
 
to the higher
 
utilization of a
 
line of credit
 
in the Virgin
 
Islands region, partially
 
offset
by a decrease
 
related to the
 
origination of
 
a $13.6 million
 
loan to a
 
municipality in
 
the Puerto
 
Rico region
 
during the
 
first six months
of 2024.
Originations of auto
 
loans (including finance
 
leases) for the quarter
 
and six-month period
 
ended June 30,
 
2025 amounted to
 
$229.3
million and
 
$457.0 million,
 
respectively,
 
compared to
 
$233.9 million
 
and $462.0
 
million, respectively,
 
for the
 
comparable periods
 
in
2024. Other
 
consumer loan
 
originations,
 
other than
 
credit cards,
 
for the
 
quarter and
 
six-month period
 
ended June
 
30, 2025
 
amounted
to
 
$53.5
 
million
 
and
 
$101.1
 
million,
 
respectively,
 
compared
 
to
 
$64.6
 
million
 
and
 
$124.5
 
million,
 
respectively,
 
for
 
the
 
comparable
periods in
 
2024. Most of
 
the decreases
 
in auto
 
loan originations
 
and other
 
consumer loan
 
originations for
 
the second quarter
 
and first
six
 
months
of
 
2025,
 
as
 
compared
 
with
 
the
 
same
 
periods
 
in
 
2024,
 
were
 
in
 
the
 
Puerto
 
Rico
 
region.
 
The
 
utilization
 
activity
 
on
 
the
outstanding
 
credit card
 
portfolio
 
for
 
the quarter
 
and
 
six-month
 
period
 
ended June
 
30, 2025
 
amounted
 
to
 
$108.0
 
million
 
and
 
$210.2
million, respectively,
 
compared to $118.0 million and $232.3 million, respectively,
 
for the comparable periods in 2024.
 
93
Investment Activities
As
 
part
 
of
 
its
 
liquidity,
 
revenue
 
diversification,
 
and
 
interest
 
rate
 
risk
 
management
 
strategies,
 
First
 
BanCorp.
 
maintains
 
a
 
debt
securities portfolio classified as available for sale or held to maturity.
 
Substantially
 
all
 
of
 
the
 
Corporation’s
 
available-for-sale
 
debt
 
securities
 
portfolio
 
was
 
invested
 
in
 
U.S.
 
government
 
and
 
agencies
debentures
 
and
 
fixed-rate
 
GSEs’
 
MBS.
 
The
 
Corporation’s
 
total
 
available-for-sale
 
debt
 
securities
 
portfolio
 
as
 
of
 
June
 
30,
 
2025
amounted to $4.5 billion,
 
a $68.5 million decrease
 
from December 31, 2024.
 
The decrease was driven
 
by $375.4 million in
 
maturities,
mainly U.S.
 
agencies debentures
 
and U.S. Treasury
 
securities;
 
and $225.4
 
million in principal
 
repayments of
 
U.S. agencies MBS
 
and
debentures;
 
partially
 
offset
 
by
 
approximately
 
$409.4
 
million
 
in
 
purchases,
 
of
 
which
 
$212.6
 
million
 
were
 
U.S.
 
agencies
 
MBS,
including $195.5 million
 
of residential MBS, and
 
$196.8 million were U.S.
 
Treasury securities; and
 
the $125.3 million
 
increase in fair
value attributable
 
to changes in
 
market interest
 
rates. As of
 
June 30,
 
2025, the Corporation
 
had a net
 
unrealized loss
 
on available-for-
sale
 
debt
 
securities
 
of
 
$434.3
 
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.
 
As of
 
June 30,
 
2025,
 
cash inflows
 
of approximately
 
$1.8
 
billion are
 
expected to
 
be received
 
during
 
the next
 
twelve months
 
from
maturities and
 
expected prepayments of
 
the available-for-sale
 
debt securities portfolio
 
which has an
 
average yield of
 
1.70%, of which
$1.3
 
billion
 
are
 
expected
 
to
 
be
 
received
 
during
 
the
 
remainder
 
of
 
2025.
 
These
 
inflows
 
are
 
expected
 
to
 
be
 
redeployed
 
to
 
fund
 
loan
growth,
 
reinvested
 
into
 
higher-yielding
 
securities,
 
or
 
used
 
to
 
repay
 
maturing
 
brokered
 
CDs.
 
See
 
Note
 
2
 
–
 
“Debt
 
Securities”
 
for
information and details about the Corporation’s
 
available-for-sale debt securities portfolio.
Held-to-maturity
 
debt
 
securities
 
include
 
fixed-rate
 
GSEs’
 
MBS
 
with
 
a
 
carrying
 
value
 
of
 
$214.4
 
million
 
(fair
 
value
 
of
 
$204.1
million) as of
 
June 30, 2025, compared
 
to $225.3 million
 
as of December 31,
 
2024. The decrease in
 
GSEs’ MBS was driven
 
by $11.0
million
 
in principal
 
repayments. Held-to-maturity
 
debt
 
securities also
 
include
 
$92.8 million
 
as of
 
June 30,
 
2025,
 
compared to
 
$92.4
million
 
as
 
of
 
December
 
31,
 
2024,
 
of
 
financing
 
arrangements
 
with
 
Puerto
 
Rico
 
municipalities
 
issued
 
in
 
bond
 
form,
 
which
 
the
Corporation
 
accounts
 
for
 
as
 
securities,
 
but
 
which
 
were
 
underwritten
 
as
 
loans
 
with
 
features
 
that
 
are
 
typically
 
found
 
in
 
commercial
loans. As
 
of June
 
30, 2025,
 
approximately 57%
 
of the
 
Corporation’s
 
municipal bonds
 
consisted of
 
obligations issued
 
by three
 
of the
largest municipalities in Puerto Rico.
See
 
“Risk Management
 
–
 
Exposure
 
to Puerto
 
Rico
 
Government”
 
below
 
for
 
information
 
and
 
details
 
about
 
the Corporation’s
 
total
direct exposure
 
to the
 
Puerto Rico
 
government, including
 
municipalities,
 
and “Risk
 
Management
 
– Credit
 
Risk Management”
 
below
and Note 2 – “Debt Securities” for the ACL of the exposure to Puerto
 
Rico municipal bonds.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
94
 
The
 
carrying
 
values
 
of
 
debt
 
securities
 
as
 
of
 
June
 
30,
 
2025
 
and
 
December
 
31,
 
2024
 
by
 
contractual
 
maturity
 
(excluding
 
MBS)
 
and
weighted-average yield, are shown below:
June 30, 2025
December 31, 2024
Weighted-
Average Yield
 
%
Carrying
Amount
Weighted-
Average Yield
 
%
Carrying
Amount
(Dollars in thousands)
Available-for-sale
 
debt securities, at fair value
U.S government and agencies obligations:
Due within one year
1.29
$
1,231,281
0.79
$
1,127,041
Due after one year through five years
1.01
517,357
0.96
764,679
Due after ten years
4.68
7,003
4.73
7,800
1.22
1,755,641
(1)
0.87
1,899,520
Puerto Rico government obligation:
Due after ten years
-
1,576
-
1,620
MBS:
Residential
 
1.95
2,539,728
1.79
2,481,253
Commercial
2.38
199,358
2.12
181,909
Total MBS
1.99
2,739,086
1.82
2,663,162
Other:
 
Due within one year
2.35
500
2.32
1,000
Total available-for-sale
 
debt securities, at fair value
1.70
4,496,803
1.45
4,565,302
Held-to-maturity debt securities, at amortized cost
Puerto Rico municipal bonds:
 
Due within one year
4.86
2,380
5.07
2,214
 
Due after one year through five years
7.18
62,962
7.33
61,289
 
Due after five years through ten years
5.06
11,741
5.79
13,184
 
Due after ten years
7.78
15,755
8.07
15,755
6.96
92,838
7.18
92,442
ACL on held-to-maturity debt securities
-
(765)
-
(802)
MBS:
Residential
3.87
121,074
3.86
129,319
Commercial
2.06
93,374
3.88
96,025
Total MBS
3.08
214,448
3.87
225,344
 
Total held-to-maturity
 
debt securities, at amortized cost
4.25
306,521
4.83
316,984
Total debt securities
1.85
$
4,803,324
1.65
$
4,882,286
(1)
Includes approximately $989.9 million in callable
 
debt securities with an average yield of 0.78%,
 
of which approximately 65% were purchased
 
at a discount and 2% at a premium. See “Risk
Management” below
 
for further
 
analysis of
 
the effects
 
of changing
 
interest rates
 
on the
 
Corporation’s
 
net interest
 
income and
 
the Corporation’s
 
interest risk
 
management strategies.
 
Also,
refer to Note 2 - “Debt Securities” for additional information regarding
 
the Corporation’s debt securities portfolio.
 
95
RISK MANAGEMENT
General
Risks
 
are
 
inherent
 
in
 
virtually
 
all
 
aspects
 
of
 
the
 
Corporation’s
 
business
 
activities
 
and
 
operations.
 
Consequently,
 
effective
 
risk
management
 
is
 
fundamental
 
to
 
the
 
success
 
of
 
the
 
Corporation.
 
The
 
primary
 
goals
 
of
 
risk
 
management
 
are
 
to
 
ensure
 
that
 
the
Corporation’s
 
risk-taking activities are
 
consistent with the
 
Corporation’s
 
objectives and risk
 
tolerance, and that
 
there is an appropriate
balance between risks and rewards to maximize stockholder value.
The
 
Corporation
 
has
 
in
 
place
 
a
 
risk
 
management
 
framework
 
to
 
monitor,
 
evaluate
 
and
 
manage
 
the
 
principal
 
risks
 
assumed
 
in
conducting its activities. First BanCorp.’s
 
business is subject to eleven
 
broad categories of risks: (i) liquidity
 
risk; (ii) interest rate risk;
(iii) market risk; (iv)
 
credit risk; (v) operational
 
risk; (vi) legal and
 
regulatory risk; (vii)
 
reputational risk; (viii) model
 
risk; (ix) capital
risk; (x)
 
strategic risk;
 
and (xi)
 
information technology
 
risk. First
 
BanCorp. has
 
adopted policies
 
and procedures
 
designed to
 
identify
and manage the risks to which the Corporation is exposed.
The
 
Corporation’s
 
risk
 
management
 
policies
 
are
 
described
 
below,
 
as
 
well
 
as
 
in
 
Part
 
II,
 
Item
 
7,
 
“Management’s
 
Discussion
 
and
Analysis of Financial Condition and Results of Operations,” in the 2024
 
Annual Report on Form 10-K.
Liquidity Risk and Capital Adequacy
 
Liquidity
 
risk
 
involves
 
the
 
ongoing
 
ability
 
to
 
accommodate
 
liability
 
maturities
 
and
 
deposit
 
withdrawals,
 
fund
 
asset growth
 
and
business operations,
 
and meet
 
contractual obligations
 
through unconstrained
 
access to funding
 
at reasonable
 
market rates. Liquidity
management
 
involves
 
forecasting
 
funding
 
requirements
 
and
 
maintaining
 
sufficient
 
capacity
 
to
 
meet
 
liquidity
 
needs
 
and
accommodate
 
fluctuations
 
in
 
asset
 
and
 
liability
 
levels
 
due
 
to
 
changes
 
in
 
the
 
Corporation’s
 
business
 
operations
 
or
 
unanticipated
events.
 
 
The Corporation
 
manages liquidity
 
at two
 
levels. The
 
first is
 
the liquidity
 
of the
 
parent company,
 
or First
 
Bancorp., which
 
is the
holding
 
company
 
that
 
owns
 
the
 
banking
 
and
 
non-banking
 
subsidiaries.
 
The
 
second
 
is
 
the
 
liquidity
 
of
 
the
 
banking
 
subsidiary,
FirstBank.
 
The
 
Asset
 
and
 
Liability
 
Committee
 
of
 
the
 
Corporation’s
 
Board
 
of
 
Directors
 
is
 
responsible
 
for
 
overseeing
 
management’s
establishment
 
of
 
the
 
Corporation’s
 
liquidity
 
policy,
 
as
 
well
 
as
 
approving
 
operating
 
and
 
contingency
 
procedures
 
and
 
monitoring
liquidity
 
on
 
an
 
ongoing
 
basis.
 
The
 
Management’s
 
Investment
 
and
 
Asset
 
Liability
 
Committee
 
(“MIALCO”),
 
which
 
reports
 
to
 
the
Board’s
 
Asset
 
and
 
Liability
 
Committee,
 
uses
 
measures
 
of
 
liquidity
 
developed
 
by
 
management
 
that
 
involve
 
the
 
use
 
of
 
several
assumptions
 
to
 
review
 
the
 
Corporation’s
 
liquidity
 
position
 
on
 
a
 
monthly
 
basis.
 
The
 
MIALCO
 
oversees
 
liquidity
 
management,
interest rate risk, market risk, and other related matters.
 
The MIALCO is composed of
 
senior management officers, including
 
the Chief Executive Officer,
 
the Chief Financial Officer,
 
the
Chief Risk
 
Officer,
 
the Treasurer,
 
the Chief
 
Consumer Officer
 
and Corporate
 
Chief of
 
Staff, the
 
Corporate
 
Strategic and
 
Business
Development
 
Director,
 
the
 
Treasury
 
and
 
Investments
 
Risk
 
Manager,
 
the
 
Financial
 
Planning
 
and
 
Asset
 
and
 
Liability
 
Management
(“ALM”)
 
Director,
 
and
 
the
 
Chief
 
Operating
 
Officer.
 
The
 
Treasury
 
and
 
Investments
 
Division
 
is
 
responsible
 
for
 
planning
 
and
executing the Corporation’s
 
funding activities and
 
strategy, monitoring
 
liquidity availability daily,
 
and reviewing liquidity
 
measures
on
 
a
 
weekly
 
basis.
 
The
 
Investments
 
Accounting
 
and
 
Operations
 
area
 
of
 
the
 
Corporate
 
Controller’s
 
Department
 
is
 
responsible
 
for
calculating the
 
liquidity measurements
 
used by
 
the Treasury
 
and Investment
 
Division to
 
review the
 
Corporation’s
 
liquidity position
on a weekly basis. The Financial Planning and ALM Division is responsible
 
for operating the liquidity and interest rate risk models.
 
96
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
 
Corporation’s
 
liquidity
 
position
under various
 
operating circumstances
 
and are
 
designed to
 
help ensure
 
that the
 
Corporation will
 
be able
 
to operate
 
through periods
of stress when
 
access to normal
 
sources of funds
 
is constrained. The
 
plans project funding
 
requirements during
 
a potential period
 
of
stress, specify and quantify sources of liquidity,
 
outline actions and procedures for effectively managing
 
liquidity through a period of
stress, and
 
define roles
 
and responsibilities
 
for the
 
Corporation’s
 
employees. Under
 
the contingency
 
funding plans,
 
the Corporation
stresses the
 
balance sheet
 
and the
 
liquidity position
 
to critical levels
 
that mimic
 
difficulties in
 
generating funds
 
or even maintaining
the current
 
funding position
 
of the
 
Corporation and
 
the Bank
 
and are
 
designed to
 
help ensure
 
the ability
 
of the
 
Corporation and
 
the
Bank to honor
 
their respective commitments.
 
The Corporation has
 
established liquidity
 
triggers that the
 
MIALCO monitors in
 
order
to maintain the
 
ordinary funding of
 
the banking business.
 
The MIALCO has
 
developed contingency funding
 
plans for the
 
following
three
 
scenarios:
 
a
 
credit rating
 
downgrade,
 
an
 
economic
 
cycle
 
downturn
 
event,
 
and
 
a
 
concentration
 
event.
 
The
 
Board’s
 
Asset and
Liability Committee reviews and approves these plans on an annual basis.
Liquidity Risk Management
The Corporation manages
 
its liquidity in
 
a proactive manner and
 
in an effort
 
to maintain a sound
 
liquidity position. It uses
 
multiple
measures
 
to monitor
 
its liquidity
 
position,
 
including
 
core
 
liquidity,
 
basic
 
liquidity,
 
and time-based
 
reserve
 
measures. Cash
 
and
 
cash
equivalents amounted
 
to $736.7
 
million as
 
of June
 
30, 2025,
 
compared to
 
$1.2 billion
 
as of
 
December 31,
 
2024. When
 
adding
 
$1.6
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 $2.3
 
billion
 
as of
 
June 30,
 
2025,
 
or 12.17%
 
of
 
total assets,
compared to $2.4 billion, or 12.54%
 
of total assets as of December 31, 2024.
 
In addition
 
to the aforementioned
 
$2.3 billion in
 
cash and free
 
high quality
 
liquid assets, the
 
Corporation had $1.0
 
billion available
for credit
 
with the
 
FHLB based
 
on the value
 
of loan
 
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 17.58%
 
of total assets as of
 
June 30, 2025, compared
 
to
17.27% of total assets as of December 31, 2024.
 
Further,
 
the
 
Corporation
 
also
 
maintains
 
borrowing
 
capacity
 
at
 
the
 
FED
 
Discount
 
Window
 
and
 
had
 
approximately
 
$2.7
 
billion
available
 
for
 
funding
 
under
 
the
 
FED’s
 
Borrower-in-Custody
 
(“BIC”)
 
Program
 
as
 
of
 
June
 
30,
 
2025,
 
compared
 
to
 
$2.6
 
billion
 
as
 
of
December 31,
 
2024 as
 
an additional
 
source of
 
liquidity.
 
Total
 
loans pledged
 
to the
 
FED BIC
 
Program amounted
 
to $3.4
 
billion as
 
of
each of June 30, 2025 and
 
December 31, 2024. The Corporation
 
does not rely on uncommitted inter-bank
 
lines of credit (federal funds
lines) to
 
fund its
 
operations. In
 
the aggregate,
 
as of June
 
30, 2025,
 
the Corporation
 
had $6.0
 
billion available
 
to meet
 
liquidity needs,
or
 
133%
 
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
 
87.9%
 
of the
 
Bank’s
 
assets (or
 
85.1%
 
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
97
Commitments to extend credit and standby
 
letters of credit
As
 
a
 
provider
 
of
 
financial
 
services,
 
the
 
Corporation
 
routinely
 
enters
 
into
 
commitments
 
with
 
off-balance
 
sheet
 
risk
 
to
 
meet
 
the
financial
 
needs
 
of
 
its
 
customers.
 
These
 
financial
 
instruments
 
may
 
include
 
loan
 
commitments
 
and
 
standby
 
letters
 
of
 
credit.
 
These
commitments
 
are
 
subject
 
to
 
the
 
same
 
credit
 
policies
 
and
 
approval
 
processes
 
used
 
for
 
on-balance
 
sheet
 
instruments.
 
These
instruments involve, to varying degrees,
 
elements of credit and interest rate risk
 
in excess of the amount recognized in the
 
statements
of financial condition. As of June 30, 2025,
 
the Corporation’s commitments to
 
extend credit amounted to approximately
 
$2.2 billion.
Commitments to
 
extend credit
 
are agreements
 
to lend
 
to a
 
customer as
 
long as
 
there is
 
no violation
 
of any
 
condition established
 
in
the contract.
 
Since certain
 
commitments
 
are expected
 
to expire
 
without being
 
drawn upon,
 
the total
 
commitment
 
amount does
 
not
necessarily
 
represent
 
future
 
cash
 
requirements.
 
For
 
most
 
of
 
the
 
commercial
 
lines
 
of
 
credit,
 
the
 
Corporation
 
has
 
the
 
option
 
to
reevaluate
 
the
 
agreement
 
prior
 
to
 
additional
 
disbursements.
 
There
 
have
 
been
 
no
 
significant
 
or
 
unexpected
 
draws
 
on
 
existing
commitments.
 
In the
 
case
 
of credit
 
cards
 
and personal
 
lines of
 
credit,
 
the Corporation
 
can cancel
 
the
 
unused credit
 
facility
 
at
 
any
time and without cause.
 
The following table summarizes commitments to extend credit and standby letters of
 
credit as of the indicated dates:
June 30, 2025
December 31, 2024
(In thousands)
Financial instruments whose contract amounts represent credit risk:
 
Commitments to extend credit:
 
Construction undisbursed funds
$
235,263
$
283,302
 
Unused credit card lines
778,494
787,849
 
Unused personal lines of credit
 
36,636
37,140
 
Commercial lines of credit
1,150,257
1,053,938
 
Letters of credit:
 
Commercial letters of credit
40,045
41,738
 
Standby letters of credit
21,389
24,635
The
 
Corporation
 
engages
 
in
 
the ordinary
 
course
 
of business
 
in
 
other
 
financial
 
transactions
 
that
 
are not
 
recorded
 
on the
 
balance
sheet
 
or
 
may
 
be
 
recorded
 
on
 
the
 
balance
 
sheet
 
in
 
amounts
 
that
 
are
 
different
 
from
 
the
 
full
 
contract
 
or
 
notional
 
amount
 
of
 
the
transaction
 
and, thus,
 
affect
 
the Corporation’s
 
liquidity position.
 
These transactions
 
are designed
 
to (i)
 
meet the
 
financial needs
 
of
customers, (ii) manage the
 
Corporation’s credit,
 
market and liquidity risks, (iii)
 
diversify the Corporation’s
 
funding sources, and (iv)
optimize capital.
 
In addition to the
 
aforementioned off-balance
 
sheet debt obligations
 
and unfunded commitments
 
to extend credit,
 
the Corporation
has obligations
 
and commitments
 
to make
 
future payments
 
under contracts,
 
amounting to
 
approximately $4.2
 
billion as
 
of June
 
30,
2025.
 
Our
 
material
 
cash
 
requirements
 
comprise
 
primarily
 
of
 
contractual
 
obligations
 
to
 
make
 
future
 
payments
 
related
 
to
 
time
deposits,
 
long-term
 
borrowings,
 
and operating
 
lease obligations.
We
also have
 
other contractual
 
cash obligations
 
related
 
to certain
binding agreements
 
we have
 
entered into
 
for services
 
including outsourcing
 
of technology
 
services, security,
 
advertising and
 
other
services
 
which
 
are
 
not
 
material
 
to
 
our
 
liquidity
 
needs.
We
currently
 
anticipate
 
that
 
our
 
available
 
funds,
 
credit
 
facilities,
 
and
 
cash
flows from
 
operations will
 
be sufficient
 
to meet
 
our operational
 
cash needs
 
and support
 
loan growth
 
and capital
 
plan execution
 
for
the foreseeable future.
Off-balance sheet
 
transactions are continuously
 
monitored to consider
 
their potential impact
 
to our liquidity
 
position and changes
are applied to the balance between sources and uses of funds, as deemed appropriate,
 
to maintain a sound liquidity position.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
98
Sources of Funding
The Corporation
 
utilizes different
 
sources of
 
funding to
 
help ensure
 
that adequate
 
levels of
 
liquidity are
 
available when
 
needed.
Diversification
 
of
 
funding
 
sources
 
is
 
of
 
great
 
importance
 
to
 
protect
 
the
 
Corporation’s
 
liquidity
 
from
 
market
 
disruptions.
 
The
principal
 
sources
 
of
 
short-term
 
funding
 
are
 
deposits,
 
including
 
brokered
 
CDs.
 
Additional
 
funding
 
is
 
provided
 
by
 
securities
 
sold
under agreements
 
to repurchase and
 
lines of credit
 
with the FHLB.
 
In addition,
 
the Corporation also
 
maintains as additional
 
sources
borrowing capacity at the FED’s BIC Program
 
,
 
as discussed above.
The Asset and Liability Committee reviews credit availability
 
on a regular basis. The Corporation may
 
also sell mortgage loans as
a supplementary source of funding and obtain long-term funding
 
through the issuance of notes and long-term brokered CDs.
 
While
 
liquidity
 
is
 
an
 
ongoing
 
challenge
 
for
 
all
 
financial
 
institutions,
 
management
 
believes
 
that
 
the
 
Corporation’s
 
available
borrowing capacity and
 
efforts to grow
 
core deposits will be
 
adequate to provide
 
the necessary funding
 
for the Corporation’s
 
business
plans in the next 12 months and beyond.
Retail
 
and
 
commercial
 
core
 
deposits
 
–
The
 
Corporation’s
 
deposit
 
products
 
include
 
regular
 
saving
 
accounts,
 
demand
 
deposit
accounts,
 
money
 
market
 
accounts,
 
and
 
retail
 
CDs.
 
As
 
of
 
June
 
30,
 
2025
 
and
 
December
 
31,
 
2024,
 
the
 
Corporation’s
 
core
 
deposits,
which
 
exclude
 
government
 
deposits
 
and
 
brokered
 
CDs,
 
totaled
 
$12.7
 
billion
 
and
 
$12.9
 
billion,
 
respectively.
 
The
 
$211.9
 
million
decrease in
 
such deposits
 
consisted of
 
decreases of
 
$147.0 million
 
in the
 
Puerto Rico
 
region and
 
$95.4 million
 
in the
 
Florida region,
partially
 
offset
 
by
 
a
 
$30.5
 
million
 
increase
 
in
 
the
 
Virgin
 
Islands
 
region.
 
This
 
decrease
 
includes
 
a
 
$204.0
 
million
 
decrease
 
in
 
non-
interest-bearing deposits,
 
partially offset by a $183.3 million increase in time deposits.
 
Government
 
deposits
 
(fully
 
collateralized)
 
–
 
As
 
of
 
June
 
30,
 
2025,
 
the
 
Corporation
 
had
 
$2.9
 
billion
 
of
 
Puerto
 
Rico
 
public
 
sector
deposits
 
($2.7
 
billion
 
in
 
transactional
 
accounts
 
and
 
$159.7
 
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 21% of
 
the public sector deposits
 
as of June 30,
 
2025 were from municipalities
 
and municipal agencies
 
in Puerto Rico
and
 
79%
 
were
 
from
 
public
 
corporations,
 
the
 
central
 
government
 
and
 
its
 
agencies,
 
and
 
U.S.
 
federal
 
government
 
agencies
 
in
 
Puerto
Rico.
In addition, as
 
of June 30,
 
2025, the Corporation
 
had $0.5 billion of
 
government deposits in
 
the Virgin
 
Islands region, as compared
to $0.4 billion as of December 31, 2024.
The
 
uninsured
 
portions of
 
government
 
deposits were
 
collateralized
 
by securities
 
and
 
loans with
 
an amortized
 
cost of
 
$3.4
 
billion
and
 
$3.7
 
billion
 
as
 
of
 
June
 
30,
 
2025
 
and
 
December
 
31,
 
2024,
 
respectively,
 
and
 
an
 
estimated
 
market
 
value
 
of
 
$3.1
 
billion
 
and
 
$3.3
billion
 
as
 
of
 
June
 
30,
 
2025
 
and
 
December
 
31,
 
2024,
 
respectively.
 
In
 
addition
 
to
 
securities
 
and
 
loans,
 
as
 
of
 
June
 
30,
 
2025
 
and
December 31,
 
2024, the
 
Corporation used
 
$225.0 million
 
and $175.0
 
million, respectively,
 
in letters
 
of credit
 
issued by
 
the FHLB
 
as
pledges for a portion of public deposits in the Virgin
 
Islands.
Estimate of Uninsured
 
Deposits –
As of June 30, 2025 and December 31,
 
2024, the estimated amounts of uninsured deposits
 
totaled
$7.6
 
billion
 
and
 
$8.1
 
billion,
 
respectively,
 
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 June 30,
 
2025 and December
 
31, 2024, the
 
uninsured portion
 
of
fully
 
collateralized
 
government
 
deposits
 
amounted
 
to
 
$3.1
 
billion
 
and
 
$3.3
 
billion,
 
respectively.
 
Excluding
 
fully
 
collateralized
government deposits,
 
the estimated amounts of uninsured deposits
 
amounted to $4.5 billion, which
 
represents
 
28.10% of total deposits
(excluding brokered CDs), as of June 30, 2025, compared to $4.8
 
billion, or 29.36%, as of December 31, 2024.
 
 
The
 
amount of
 
uninsured
 
deposits
 
is calculated
 
based on
 
the
 
same
 
methodologies
 
and assumptions
 
used for
 
our bank
 
regulatory
reporting requirements adjusted for cash held by wholly-owned subsidiaries
 
at the Bank.
 
The following table presents by contractual maturities the amount of U.S. time deposits in
 
excess of FDIC insurance limits (over
$250,000) and other time deposits that are otherwise uninsured as of June 30, 2025:
(In thousands)
3 months or
less
3 months to
6 months
6 months to
1 year
Over 1 year
Total
U.S. time deposits in excess of FDIC insurance limits
$
465,093
$
152,440
$
383,689
$
135,388
$
1,136,610
Other uninsured time deposits
$
16,980
$
16,521
$
17,678
$
3,608
$
54,787
Brokered
 
CDs
 
–
 
Total
 
brokered
 
CDs
 
increased
 
by
 
$48.4
 
million
 
to
 
$526.5
 
million
 
as
 
of
 
June
 
30,
 
2025,
 
primarily
 
in
 
the
 
Florida
region.
 
The increase
 
reflects $132.2
 
million of
 
new issuances
 
with original
 
average maturities
 
of approximately
 
1 year
 
and an
 
all-in
cost of
 
4.34%, partially
 
offset by
 
maturing brokered
 
CDs amounting
 
to $83.8
 
million with
 
an all-in
 
cost of
 
5.08% that
 
were paid
 
off
during the first half of 2025.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
99
The average remaining term to maturity of the brokered CDs outstanding
 
as of June 30, 2025 was approximately 1.2 years.
 
The future use
 
of brokered
 
CDs will depend
 
on multiple factors
 
including excess
 
liquidity at each
 
of the regions,
 
future cash needs
and
 
any
 
tax implications.
 
Also,
 
depending
 
on
 
lending or
 
other
 
investment
 
opportunities available,
 
cash
 
inflows from
 
repayments
 
of
investment securities
 
may be used
 
as well
 
to repay brokered
 
CDs. Brokered
 
CDs are insured
 
by the FDIC
 
up to regulatory
 
limits and
can be obtained faster than regular retail deposits.
 
The following
 
table presents the
 
remaining contractual
 
maturities and
 
weighted-average interest
 
rates of brokered
 
CDs as of
 
June
30, 2025:
Total
 
Weighted-average
interest rate %
(In thousands)
Three months or less
$
67,141
4.56
Over three months to six months
105,178
4.43
Over six months to one year
180,792
4.27
Over one year to two years
 
100,290
4.11
Over two years to three years
 
30,313
4.03
Over three years to four years
 
27,372
4.44
Over five years
 
15,461
4.61
 
Total
$
526,547
4.31
Refer to
 
“Net Interest
 
Income” above
 
for information
 
about average
 
balances of
 
interest-bearing deposits
 
and the
 
average interest
rate paid on such deposits for the quarters and six-month periods ended
 
June 30, 2025 and 2024.
Securities
 
sold
 
under
 
agreements
 
to
 
repurchase
 
–
 
From
 
time
 
to
 
time,
 
the
 
Corporation
 
enters
 
into
 
repurchase
 
agreements
 
as
 
an
additional source of funding. As of each of June 30, 2025 and December
 
31, 2024, there were no outstanding repurchase agreements.
When
 
the
 
Corporation
 
enters
 
into
 
repurchase
 
agreements,
 
as is
 
the
 
case
 
with
 
derivative
 
contracts,
 
the
 
Corporation
 
is
 
required
 
to
pledge
 
cash
 
or
 
qualifying
 
securities
 
to
 
meet
 
margin
 
requirements.
 
To
 
the
 
extent
 
that
 
the
 
value
 
of
 
securities
 
previously
 
pledged
 
as
collateral
 
declines
 
due
 
to
 
changes
 
in
 
interest
 
rates,
 
a
 
liquidity
 
crisis
 
or
 
any
 
other
 
factor,
 
the
 
Corporation
 
is
 
required
 
to
 
deposit
additional
 
cash
 
or
 
securities
 
to
 
meet
 
its
 
margin
 
requirements,
 
thereby
 
adversely
 
affecting
 
its
 
liquidity.
 
Given
 
the
 
quality
 
of
 
the
collateral
 
pledged,
 
the
 
Corporation
 
has
 
not
 
experienced
 
margin
 
calls
 
from
 
counterparties
 
arising
 
from
 
credit-quality-related
 
write-
downs in valuations.
Advances
 
from
 
the
 
FHLB
 
–
The
 
Bank
 
is
 
a
 
member
 
of
 
the
 
FHLB
 
system
 
and
 
obtains
 
advances
 
to
 
fund
 
its
 
operations
 
under
 
a
collateral
 
agreement
 
with
 
the
 
FHLB
 
that
 
requires
 
the
 
Bank
 
to
 
maintain
 
qualifying
 
mortgages
 
and/or
 
investments
 
as
 
collateral
 
for
advances
 
taken. As
 
of June
 
30,
 
2025 and
 
December 31,
 
2024,
 
the outstanding
 
balance of
 
long-term
 
fixed-rate
 
FHLB advances
 
was
$320.0 million
 
and $500.0
 
million, respectively
 
.
 
Of the
 
$320.0 million
 
in FHLB
 
advances as
 
of June
 
30, 2025,
 
$220.0 million
 
were
pledged with
 
investment securities
 
and $100.0
 
million were
 
pledged with
 
mortgage loans.
 
As of
 
June 30,
 
2025, the
 
Corporation had
$1.0 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 June 30, 2025:
Total
Weighted-average
interest rate %
(In thousands)
Three months or less
$
30,000
4.83
Over six months to one year
90,000
4.49
Over two years to three years
200,000
4.25
 
Total
(1)
$
320,000
4.37
(1) Average remaining term to maturity
 
of 1.71 years.
 
100
Trust-Preferred
 
Securities –
In 2004,
 
FBP Statutory
 
Trusts I
 
and II,
 
wholly-owned by
 
the Corporation
 
and not
 
consolidated in
 
the
Corporation’s
 
financial
 
statements,
 
sold
 
to
 
institutional
 
investors
 
variable-rate
 
TruPS
 
and
 
used
 
the
 
proceeds
 
of
 
these
 
issuances,
together
 
with the
 
proceeds
 
of the
 
purchases
 
by the
 
Corporation
 
of variable
 
rate common
 
securities,
 
to purchase
 
junior
 
subordinated
deferrable debentures.
During
 
the
 
first
 
half
 
of
 
2025,
 
the
 
Corporation
 
redeemed
 
the
 
remaining
 
$61.7
 
million
 
of
 
outstanding
 
TruPS
 
as
 
of
 
December
 
31,
2024,
 
which
 
had
 
been
 
reported
 
as
 
part
 
of
 
“Long-term
 
borrowings”
 
in
 
the
 
Corporation’s
 
consolidated
 
financial
 
statements,
 
at
 
a
contractual
 
call
 
price
 
of
 
100%.
 
Following
 
the
 
redemption
 
of
 
these
 
TruPS,
 
FBP
 
Statutory
 
Trusts
 
I
 
and
 
II
 
were
 
liquidated
 
by
 
the
Corporation.
 
See Note 6 – “Non-Consolidated Variable
 
Interest Entities (“VIEs”) and Servicing Assets” and Note 20 – “First Bancorp
 
.
(Holding Company Only) Financial Information” for additional informatio
 
n.
FED Discount Window
 
– The Corporation participates in
 
the BIC Program of the FED.
 
Through the BIC Program, a
 
broad range of
loans may be
 
pledged as collateral
 
for borrowings through
 
the FED Discount Window.
 
As previously mentioned,
 
as of June 30,
 
2025,
the
 
Corporation
 
had
 
approximately
 
$2.7
 
billion
 
fully
 
available
 
for
 
funding
 
under
 
the
 
FED’s
 
Discount
 
Window
 
based
 
on
 
collateral
pledged at the FED.
Effect of Credit Ratings on Access to Liquidity
The
 
Corporation’s
 
liquidity
 
is
 
contingent
 
upon
 
its
 
ability
 
to
 
obtain
 
deposits
 
and
 
other
 
external
 
sources
 
of
 
funding
 
to
 
finance
 
its
operations.
 
The Corporation’s
 
current
 
credit ratings
 
and any
 
downgrade
 
in credit
 
ratings can
 
hinder the
 
Corporation’s
 
access to
 
new
forms
 
of
 
external
 
funding
 
and/or
 
cause
 
external
 
funding
 
to
 
be
 
more
 
expensive,
 
which
 
could,
 
in
 
turn,
 
adversely
 
affect
 
its
 
results
 
of
operations. Also, changes in credit ratings may further affect
 
the fair value of unsecured derivatives whose value takes into account
 
the
Corporation’s own credit risk.
 
The Corporation
 
does not
 
have any
 
outstanding debt
 
or derivative
 
agreements that
 
would be
 
affected by
 
credit rating
 
downgrades.
Furthermore, given the Corporation’s
 
non-reliance on corporate debt or other
 
instruments directly linked in terms
 
of pricing or volume
to credit
 
ratings, the
 
liquidity of
 
the Corporation
 
has not been
 
affected in
 
any material
 
way by downgrades.
 
The Corporation’s
 
ability
to access new non-deposit sources of funding, however,
 
could be adversely affected by credit downgrades.
As
 
of
 
the
 
date
 
hereof,
 
the
 
Corporation’s
 
credit
 
as
 
a
 
long-term
 
issuer
 
is
 
rated
 
BB+
 
by
 
S&P
 
and
 
Fitch.
 
As
 
of
 
the
 
date
 
hereof,
FirstBank’s
 
credit ratings
 
as a long
 
-term issuer
 
are BB+ by
 
S&P and
 
Fitch, one notch
 
below the
 
minimum BBB- level
 
required to
 
be
considered investment grade.
 
The Corporation’s
 
credit ratings are dependent
 
on a number of
 
factors, both quantitative
 
and qualitative,
and are
 
subject to
 
change at
 
any time.
 
The disclosure
 
of credit
 
ratings is
 
not a
 
recommendation to
 
buy,
 
sell or
 
hold the
 
Corporation’s
securities. Each rating should be evaluated independently of any
 
other rating.
 
 
 
 
101
Cash Flows
Cash and cash
 
equivalents were $736.7
 
million as of
 
June 30, 2025,
 
a decrease of
 
$422.7 million when
 
compared to December
 
31,
2024.
 
The following
 
discussion highlights
 
the major
 
activities and
 
transactions that
 
affected the
 
Corporation’s
 
cash flows
 
during the
first six months of 2025 and 2024:
 
Cash Flows from Operating Activities
First BanCorp.’s
 
operating assets and
 
liabilities vary significantly
 
in the normal course
 
of business due to
 
the amount and timing
 
of
cash flows.
 
Management believes
 
that cash
 
flows from
 
operations, available
 
cash balances,
 
and the
 
Corporation’s
 
ability to
 
generate
cash through
 
short and long-term
 
borrowings will be
 
sufficient to
 
fund the Corporation’s
 
operating liquidity
 
needs for the
 
foreseeable
future.
For
 
the
 
first
 
six
 
months
 
of
 
2025
 
and
 
2024,
 
net
 
cash
 
provided
 
by
 
operating
 
activities
 
was
 
$203.7
 
million
 
and
 
$189.4
 
million,
respectively.
 
Net cash
 
generated from
 
operating activities
 
was higher
 
than reported
 
net income
 
largely as
 
a result
 
of adjustments
 
for
non-cash items such
 
as depreciation and
 
amortization, deferred income
 
tax expense and the
 
provision for credit
 
losses, as well as
 
cash
generated from sales and repayments of loans held for sale.
Cash Flows from Investing Activities
The Corporation’s
 
investing activities primarily
 
relate to originating
 
loans to be
 
held for investment,
 
as well as
 
purchasing, selling,
and repaying
 
available-for-sale and
 
held-to-maturity debt
 
securities. For the
 
six-month period ended
 
June 30, 2025,
 
net cash provided
by
 
investing
 
activities
 
was
 
$25.3
 
million,
 
primarily
 
due
 
to
 
maturities
 
of
 
U.S.
 
agencies
 
debentures
 
and
 
U.S.
 
Treasury
 
securities
 
and
principal
 
repayments
 
of U.S.
 
agencies
 
MBS and
 
debentures,
 
proceeds
 
from
 
sales of
 
repossessed
 
assets,
 
and
 
proceeds
 
from
 
the bulk
sale
 
of
 
fully
 
charged-off
 
consumer
 
loans and
 
finance
 
leases, partially
 
offset
 
by
 
purchases of
 
U.S.
 
agencies
 
MBS and
 
U.S.
 
Treasury
securities and net disbursements on loans held for investment during
 
the first half of 2025.
For
 
the
 
six-month
 
period
 
ended
 
June
 
30,
 
2024,
 
net
 
cash
 
provided
 
by
 
investing
 
activities
 
was
 
$11.3
 
million,
 
primarily
 
due
 
to
repayments of U.S. agencies MBS and
 
debentures; proceeds from sales of
 
repossessed assets; and proceeds from
 
sales of loans, driven
by the
 
bulk sale
 
of fully
 
charged-off consumer
 
loans during
 
the first
 
half of
 
2024; partially
 
offset by
 
net disbursements
 
on loans
 
held
for investment and purchases of Community Reinvestment Act qualified
 
debt securities during the second quarter of 2024.
 
Cash Flows from Financing Activities
The Corporation’s
 
financing activities
 
primarily
 
include the
 
receipt of
 
deposits and
 
the issuance
 
of brokered
 
CDs, the
 
issuance of
and
 
payments
 
on
 
long-term
 
borrowings,
 
the
 
issuance
 
of
 
equity
 
instruments,
 
return
 
of
 
capital, and
 
activities
 
related
 
to
 
its
 
short-term
funding. For the
 
six-month period ended June
 
30, 2025, net cash
 
used in financing
 
activities was $651.7 million,
 
mainly reflecting the
repayments
 
of
 
long-term
 
borrowings,
 
consisting
 
of
 
$180.0
 
million
 
in
 
FHLB
 
advances
 
and
 
the
 
redemption
 
of
 
junior
 
subordinated
debentures;
 
a
 
decrease
 
in
 
total
 
deposits;
 
and
 
capital
 
returned
 
to
 
stockholders.
 
See
 
Note
 
6
 
–
 
“Non-Consolidated
 
Variable
 
Interest
Entities (“VIEs”) and Servicing Assets” and Note 20 – “First Bancorp.
 
(Holding Company Only) Financial Information” for additional
information on the redemption of junior subordinated debentures.
For the
 
six-month period
 
ended June
 
30, 2024,
 
net cash
 
used in
 
financing activities
 
was $277.6
 
million, mainly
 
reflecting capital
returned to stockholders and a decrease in total deposits.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
102
Capital
As
 
of
 
June
 
30,
 
2025,
 
the
 
Corporation’s
 
stockholders’
 
equity
 
was
 
$1.8
 
billion,
 
an
 
increase
 
of
 
$176.2
 
million
 
from
 
December
 
31,
2024.
 
The
 
increase
 
was
 
driven
 
by
 
net
 
income
 
generated
 
in
 
the
 
first
 
half
 
of
 
2025
 
and
 
a
 
$125.3
 
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
 
common
 
stock
 
dividends
 
declared
 
in
 
the
 
first
 
half
 
of
 
2025
totaling $58.6 million or $0.36 per common share, and $50.0 million in
 
common stock repurchases.
On
 
July
 
21,
 
2025,
 
the
 
Corporation’s
 
Board
 
of
 
Directors
 
declared
 
a
 
quarterly
 
cash
 
dividend
 
of
 
$0.18
 
per
 
common
 
share.
 
The
dividend
 
is payable
 
on September
 
12, 2025
 
to shareholders
 
of record
 
at the
 
close of
 
business on
 
August
 
28, 2025.
 
The Corporation
intends to
 
continue to pay
 
quarterly dividends
 
on common stock.
 
However, the
 
Corporation’s
 
common stock dividends,
 
including the
declaration, timing,
 
and amount, remain
 
subject to consideration
 
and approval by
 
the Corporation’s
 
Board of Directors
 
at the relevant
times.
On
 
July
 
22,
 
2024,
 
the
 
Corporation
 
announced
 
that
 
its
 
Board
 
of
 
Directors
 
approved
 
a
 
repurchase
 
program,
 
under
 
which
 
the
Corporation
 
may repurchase
 
up
 
to $250
 
million that
 
could include
 
repurchases
 
of common
 
stock or
 
junior subordinated
 
debentures,
which it
 
expects to
 
execute during
 
the remainder
 
of 2025.
 
Under this
 
program, during
 
first half
 
of 2025
 
the Corporation
 
repurchased
approximately 2.8
 
million shares of
 
common stock
 
for a total
 
cost of $50.0
 
million and
 
redeemed $61.7
 
million of outstanding
 
junior
subordinated debentures.
 
As of June
 
30, 2025, the
 
Corporation has remaining
 
authorization of approximately
 
$88.3 million.
 
For more
information, see Part II, Item 2, “Unregistered Sales of
 
Equity Securities and Use of Proceeds,” and
 
Note 11 – “Stockholders’ Equity
 
”,
of this Quarterly Report on Form 10-Q.
From July
 
1, 2025
 
to August
 
5, 2025,
 
the Corporation
 
repurchased
 
approximately
 
1.0 million
 
shares of
 
common
 
stock for
 
a total
cost
 
of
 
approximately
 
$21.7
 
million.
 
Therefore,
 
the
 
Corporation
 
has
 
remaining
 
authorization
 
of
 
approximately
 
$66.6
 
million
 
as
 
of
August 5, 2025.
The tangible common
 
equity ratio and
 
tangible book value
 
per common share
 
are non-GAAP financial
 
measures generally used
 
by
the
 
financial
 
community
 
to
 
evaluate
 
capital
 
adequacy.
 
Tangible
 
common
 
equity
 
is
 
total
 
common
 
equity
 
less
 
goodwill
 
and
 
other
intangible assets. Tangible
 
assets are total assets less
 
the previously mentioned
 
intangible assets. See “Non-GAAP
 
Financial Measures
and Reconciliations” above for additional information.
 
The
 
following
 
table
 
is
 
a
 
reconciliation
 
of
 
the
 
Corporation’s
 
tangible
 
common
 
equity
 
and
 
tangible
 
assets,
 
non-GAAP
 
financial
measures, to total equity and total assets, respectively,
 
as of the indicated dates:
June 30, 2025
December 31, 2024
(In thousands, except ratios and per share information)
Total common equity
 
- GAAP
$
1,845,455
$
1,669,236
Goodwill
(38,611)
(38,611)
Other intangible assets
(4,535)
(6,967)
Tangible common
 
equity - non-GAAP
$
1,802,309
$
1,623,658
Total assets - GAAP
$
18,897,529
$
19,292,921
Goodwill
(38,611)
(38,611)
Other intangible assets
(4,535)
(6,967)
Tangible assets - non
 
-GAAP
$
18,854,383
$
19,247,343
Common shares outstanding
161,508
163,869
Tangible common
 
equity ratio - non-GAAP
9.56%
8.44%
Tangible book value
 
per common share - non-GAAP
$
11.16
$
9.91
See Note 19 – “Regulatory
 
Matters, Commitments and Contingencies”
 
to the unaudited consolidated
 
financial statements herein for
the regulatory capital positions of the Corporation and FirstBank as of
 
June 30, 2025 and December 31, 2024, respectively.
 
103
The
 
Puerto
 
Rico
 
Banking
 
Law
 
of
 
1933,
 
as
 
amended
 
(the
 
“Puerto
 
Rico
 
Banking
 
Law”),
 
requires
 
that
 
a
 
minimum
 
of
 
10%
 
of
FirstBank’s
 
net income
 
for
 
the year
 
be transferred
 
to a
 
legal surplus
 
reserve
 
until such
 
surplus
 
equals the
 
total of
 
paid-in-capital
 
on
common and preferred
 
stock. Amounts transferred
 
to the legal surplus
 
reserve from retained
 
earnings are not available
 
for distribution
to the Corporation without the
 
prior consent of the Puerto
 
Rico Commissioner of Financial Institutions.
 
The Puerto Rico Banking
 
Law
provides that,
 
when the
 
expenditures of
 
a Puerto
 
Rico commercial
 
bank are
 
greater than
 
receipts, the
 
excess of
 
the expenditures
 
over
receipts
 
must
 
be
 
charged
 
against
 
the
 
undistributed
 
profits
 
of
 
the
 
bank,
 
and
 
the
 
balance,
 
if
 
any,
 
must
 
be
 
charged
 
against
 
the
 
legal
surplus
 
reserve,
 
as
 
a
 
reduction
 
thereof.
 
If
 
the
 
legal
 
surplus
 
reserve
 
is
 
not
 
sufficient
 
to
 
cover
 
such
 
balance
 
in
 
whole
 
or
 
in
 
part,
 
the
outstanding
 
amount
 
must
 
be charged
 
against
 
the
 
capital
 
account
 
and
 
the
 
Bank
 
cannot
 
pay
 
dividends
 
until
 
it
 
can
 
replenish
 
the
 
legal
surplus reserve
 
to an
 
amount of
 
at least
 
20% of
 
the original
 
capital contributed.
 
FirstBank’s
 
legal surplus
 
reserve, included
 
as part
 
of
retained earnings
 
in the
 
Corporation’s
 
consolidated statements
 
of financial
 
condition, amounted
 
to $230.2
 
million as
 
of each
 
of June
30, 2025 and December 31, 2024. There were no transfers to the legal
 
surplus reserve during the first half of 2025.
Interest Rate Risk Management
First
 
BanCorp.
 
manages
 
its
 
asset/liability
 
position
 
to
 
limit
 
the
 
effects
 
of
 
changes
 
in
 
interest
 
rates
 
on
 
net
 
interest
 
income
 
and
 
to
maintain stability
 
of profitability
 
under varying
 
interest rate
 
scenarios. The
 
MIALCO oversees
 
interest rate
 
risk and
 
monitors, among
other things,
 
current and expected
 
conditions in global
 
financial markets, competition
 
and prevailing rates
 
in the local
 
deposit market,
liquidity,
 
loan
 
originations
 
pipeline,
 
securities
 
market
 
values,
 
recent
 
or
 
proposed
 
changes
 
to
 
the
 
investment
 
portfolio,
 
alternative
funding sources
 
and related costs,
 
hedging and the
 
possible purchase of
 
derivatives such as
 
swaps and caps,
 
and any tax
 
or regulatory
issues which may be
 
pertinent to these areas.
 
The MIALCO approves funding
 
decisions in light of
 
the Corporation’s
 
overall strategies
and objectives.
On
 
at
 
least
 
a
 
quarterly
 
basis,
 
the
 
Corporation
 
performs
 
a
 
consolidated
 
net
 
interest
 
income
 
simulation
 
analysis
 
to
 
estimate
 
the
potential change
 
in future
 
earnings from
 
projected changes
 
in interest
 
rates. These
 
simulations are
 
carried out
 
over a
 
one-to-five-year
time horizon.
 
The rate
 
scenarios considered
 
in these
 
simulations reflect
 
gradual upward
 
or downward
 
interest rate
 
movements in
 
the
yield
 
curve,
 
for
 
gradual
 
(ramp)
 
parallel
 
shifts
 
in
 
the
 
yield
 
curve
 
of
 
200
 
and
 
300
 
bps
 
during
 
a
 
twelve-month
 
period,
 
or
 
immediate
upward or downward
 
changes in interest
 
rate movements of 200
 
bps, for interest
 
rate shock scenarios.
 
The Corporation carries
 
out the
simulations in two ways:
(1)
Using a static balance sheet, as the Corporation had on the simulation date,
 
and
(2)
Using a dynamic balance sheet based on recent patterns and current
 
strategies.
The balance
 
sheet is
 
divided into
 
groups of
 
assets and
 
liabilities by
 
maturity or
 
repricing structure
 
and their
 
corresponding interest
yields and
 
costs. As interest
 
rates rise or
 
fall, these
 
simulations incorporate
 
expected future
 
lending rates,
 
current and
 
expected future
funding sources
 
and costs,
 
the possible
 
exercise of
 
options, changes
 
in prepayment
 
rates, deposit
 
decay and
 
other factors,
 
which may
be important in projecting net interest income.
 
The
 
Corporation
 
uses a
 
simulation
 
model
 
to
 
project
 
future movements
 
in
 
the
 
Corporation’s
 
balance
 
sheet
 
and
 
income
 
statement.
The starting
 
point of
 
the projections
 
corresponds to
 
the actual
 
values on
 
the balance
 
sheet on
 
the simulation
 
date. These
 
simulations
are
 
highly
 
complex
 
and
 
are
 
based
 
on
 
many
 
assumptions
 
that
 
are
 
intended
 
to
 
reflect
 
the
 
general
 
behavior
 
of
 
the
 
balance
 
sheet
components over
 
the modeled
 
periods. It
 
is unlikely
 
that actual
 
events will
 
match these
 
assumptions in
 
all cases.
 
For this
 
reason, the
results of
 
these forward-looking
 
computations are
 
only approximations
 
of the
 
sensitivity of
 
net interest
 
income to
 
changes in
 
market
interest rates. Several
 
benchmark and market
 
rate curves were
 
used in the
 
modeling process, primarily
 
SOFR curve, Prime
 
Rate, U.S.
Treasury yield curve, FHLB rates, and brokered
 
CDs rates.
As
 
of
 
June
 
30,
 
2025,
 
the
 
Corporation
 
forecasted
 
the
 
12-month
 
net
 
interest
 
income
 
assuming
 
June
 
30,
 
2025
 
interest
 
rate
 
curves
remain
 
constant.
 
Then,
 
net
 
interest
 
income
 
was
 
estimated
 
under
 
rising
 
and
 
falling
 
rates
 
scenarios.
 
For
 
the
 
rising
 
rate
 
scenario,
 
a
gradual (ramp)
 
and immediate
 
(shock) parallel
 
upward shift
 
of the
 
yield curve
 
is assumed
 
during the
 
first twelve
 
months (the
 
“+300
ramp”, “+200
 
ramp” and
 
“+200 shock”
 
scenarios). Conversely,
 
for the
 
falling rate
 
scenario, a
 
gradual (ramp)
 
and immediate
 
(shock)
parallel downward shift
 
of the yield
 
curve is assumed during
 
the first twelve months
 
(the “-300 ramp”,
 
“-200 ramp” and “-200
 
shock”
scenarios).
The SOFR
 
curve for
 
June 30,
 
2025,
 
as compared
 
with December
 
31, 2024,
 
reflects a
 
decrease of
 
12 bps
 
on average
 
in the
 
short-
term sector of
 
the curve, or between
 
one to twelve months;
 
a decrease of 62
 
bps in the medium-term
 
sector of the curve,
 
or between 2
to 5
 
years; and
 
a decrease
 
of 36
 
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 6 bps
 
on average
 
in the short-term
 
sector of the curve,
a decrease of 57 bps in the medium-term sector of the curve, and a decrease
 
of 14 bps in the long-term sector of the curve.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
104
 
The following table presents the results of the static simulations as of June 30, 2025
 
and December 31, 2024. Consistent with prior
years, these exclude non-cash changes in the fair value of derivatives:
Net Interest Income Risk
(% Change Projected for the next 12 months)
June 30, 2025
December 31, 2024
Gradual Change in Interest Rates:
 
+ 300 bps ramp
3.16
%
3.05
%
 
+ 200 bps ramp
2.12
%
2.04
%
 
- 300 bps ramp
-4.72
%
-4.79
%
 
- 200 bps ramp
-3.10
%
-3.15
%
Immediate Change in Interest Rates:
 
+ 200 bps shock
4.21
%
3.51
%
 
- 200 bps shock
-7.92
%
-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
 
June 30,
 
2025 and
 
December 31,
 
2024, the
 
net interest
 
income simulations
 
show that
 
the Corporation
 
continues to
 
have an
asset sensitive position for the next twelve months under a static balance sheet
 
simulation.
Under
 
gradual
 
rising
 
interest
 
rate
 
scenarios,
 
the
 
net
 
interest
 
income
 
simulation
 
reflects
 
increased
 
rate
 
sensitivity
 
compared
 
to
December
 
31,
 
2024.
 
Conversely,
 
under
 
gradual
 
falling
 
interest
 
rate
 
scenarios,
 
the
 
simulation
 
shows
 
a
 
decrease
 
in
 
sensitivity.
 
There
was a
 
lower sensitivity
 
in the
 
liabilities side
 
primarily driven
 
by lower
 
deposit betas
 
primarily in
 
retail and
 
commercial non
 
maturity
deposits partially
 
offset by
 
higher betas
 
on market
 
linked deposits
 
such as
 
public funds.
 
On the
 
assets side,
 
sensitivity also
 
declined,
largely due to a lower interest-bearing cash position
 
despite earlier scheduled maturities of U.S. agencies debentures.
 
Under
 
the
 
static
 
simulation,
 
the
 
Corporation
 
assumes
 
that
 
maturing
 
instruments
 
are
 
replaced
 
with
 
similar
 
instruments
 
at
 
the
repricing rate upon maturity.
 
The Corporation’s results may vary
 
significantly from the ones presented above under alternative balance
sheet compositions,
 
such as a
 
dynamic balance
 
sheet scenario which,
 
for example, would
 
assume that cash
 
flows from the
 
investment
securities portfolio and loan repayments could be redeployed into higher
 
yielding alternatives.
 
105
Credit Risk Management
First BanCorp.
 
is subject
 
to
 
credit
 
risk
 
mainly
 
with
 
respect
 
to
 
its portfolio
 
of loans
 
receivable
 
and
 
off-balance-sheet
 
instruments,
principally
 
loan
 
commitments.
 
Loans
 
receivable
 
represents
 
loans
 
that
 
First
 
BanCorp.
 
holds
 
for
 
investment
 
and,
 
therefore,
 
First
BanCorp. is at risk for
 
the term of the loan.
 
Loan commitments represent commitments
 
to extend credit, subject
 
to specific conditions,
for specific amounts
 
and maturities. These commitments
 
may expose the Corporation
 
to credit risk and
 
are subject to the
 
same review
and
 
approval
 
process
 
as
 
for
 
loans
 
made
 
by
 
the
 
Bank.
 
See
 
“Risk
 
Management
 
–
 
Liquidity
 
Risk”
 
above
 
for
 
further
 
details.
 
The
Corporation
 
manages
 
its
 
credit
 
risk
 
through
 
its
 
credit
 
policy,
 
underwriting,
 
monitoring
 
of
 
loan
 
concentrations
 
and
 
related
 
credit
quality,
 
counterparty
 
credit
 
risk,
 
economic
 
and
 
market
 
conditions,
 
and
 
legislative
 
or
 
regulatory
 
mandates.
 
The
 
Corporation
 
also
performs
 
independent
 
loan
 
review
 
and
 
quality
 
control
 
procedures,
 
statistical
 
analysis,
 
comprehensive
 
financial
 
analysis,
 
established
management committees,
 
and employs
 
proactive collection
 
and loss
 
mitigation efforts.
 
Furthermore, personnel
 
performing structured
loan
 
workout
 
functions
 
are
 
responsible
 
for
 
mitigating
 
defaults
 
and
 
minimizing
 
losses
 
upon
 
default
 
within
 
each
 
region
 
and
 
for
 
each
business segment.
 
In the
 
case of
 
the C&I,
 
commercial
 
mortgage and
 
construction loan
 
portfolios,
 
the Special
 
Asset Group
 
(“SAG”)
focuses on
 
strategies for
 
the accelerated
 
reduction of
 
non-performing assets
 
through note
 
sales, short
 
sales, loss
 
mitigation programs,
and sales of OREO. In addition to the management of
 
the resolution process for problem loans, the SAG oversees collection
 
efforts for
all loans
 
to prevent
 
migration to
 
the nonaccrual
 
and/or
 
adversely classified
 
status.
 
The
 
SAG utilizes
 
relationship
 
officers,
 
collection
specialists and attorneys.
The
 
Corporation
 
may
 
also
 
have
 
risk
 
of
 
default
 
in
 
the
 
securities
 
portfolio.
 
The
 
securities
 
held
 
by
 
the
 
Corporation
 
are
 
principally
fixed-rate U.S. agencies
 
MBS and U.S. Treasury
 
and agencies securities. Thus,
 
a substantial portion
 
of these instruments is
 
backed by
mortgages, a guarantee of a U.S. GSE or the full faith and credit of the U.S. government.
Management, consisting of the Corporation’s
 
Chief Risk Officer,
 
Commercial Credit Risk Officer,
 
Retail Credit Risk Officer,
 
Chief
Credit Officer,
 
and other senior executives,
 
has the primary responsibility
 
for setting strategies to achieve
 
the Corporation’s
 
credit risk
goals and objectives. Management has documented these goals and objectives
 
in the Corporation’s Credit Policy.
Allowance for Credit Losses and Non-Performing Assets
Allowance for Credit Losses for Loans and
 
Finance Leases
The ACL
 
for loans
 
and finance
 
leases represents
 
the estimate
 
of the
 
level of
 
reserves appropriate
 
to absorb
 
expected credit
 
losses
over the estimated life of
 
the loans. The amount of the allowance
 
is determined using relevant available
 
information, from internal and
external sources, relating
 
to past events, current
 
conditions, and reasonable
 
and supportable forecasts.
 
Historical credit loss experience
is
 
a
 
significant
 
input
 
for
 
the
 
estimation
 
of
 
expected
 
credit
 
losses,
 
as
 
well
 
as
 
adjustments
 
to
 
historical
 
loss
 
information
 
made
 
for
differences in current loan-specific
 
risk characteristics, such as differences
 
in underwriting standards, portfolio mix,
 
delinquency level,
or
 
term.
 
Additionally,
 
the
 
Corporation’s
 
assessment
 
involves
 
evaluating
 
key
 
factors,
 
which
 
include
 
credit
 
and
 
macroeconomic
indicators,
 
such as
 
changes in
 
unemployment
 
rates, property
 
values, and
 
other relevant
 
factors to
 
account for
 
current and
 
forecasted
market conditions
 
that are
 
likely to
 
cause estimated
 
credit losses
 
over the
 
life of the
 
loans to differ
 
from historical
 
credit losses.
 
Such
factors
 
are
 
subject
 
to
 
regular
 
review
 
and
 
may
 
change
 
to
 
reflect
 
updated
 
performance
 
trends
 
and
 
expectations.
 
The
 
process includes
judgments
 
and
 
quantitative
 
elements
 
that
 
may
 
be
 
subject
 
to
 
significant
 
change.
 
Further,
 
the
 
Corporation
 
periodically
 
considers
 
the
need for qualitative
 
reserves to the
 
ACL. Qualitative adjustments
 
may be related
 
to and include,
 
but are not limited
 
to, factors such
 
as
the
 
following:
 
(i)
 
management’s
 
assessment
 
of
 
economic
 
forecasts
 
used
 
in
 
the
 
model
 
and
 
how
 
those
 
forecasts
 
align
 
with
management’s
 
overall
 
evaluation
 
of
 
current
 
and
 
expected
 
economic
 
conditions;
 
(ii)
 
organization
 
specific
 
risks
 
such
 
as
 
credit
concentrations, collateral
 
specific risks, nature
 
and size of
 
the portfolio and
 
external factors that
 
may ultimately
 
impact credit quality
 
;
and
 
(iii)
 
other
 
limitations associated
 
with factors
 
such as
 
changes
 
in underwriting
 
and loan
 
resolution
 
strategies,
 
among
 
others.
 
The
ACL for loans and
 
finance leases is reviewed
 
at least on a quarterly
 
basis as part of
 
the Corporation’s
 
continued evaluation of its
 
asset
quality.
 
The Corporation
 
generally applies probability
 
weights to the
 
baseline and alternative
 
downside economic
 
scenarios to estimate
 
the
ACL with
 
the
 
baseline
 
scenario
 
carrying
 
the highest
 
weight.
 
The
 
scenarios
 
that are
 
chosen each
 
quarter
 
and
 
the
 
weighting
 
given
 
to
each
 
scenario
 
for
 
the
 
different
 
loan
 
portfolio
 
categories
 
depend
 
on
 
a
 
variety
 
of
 
factors
 
including
 
recent
 
economic
 
events,
 
leading
national and regional economic indicators, and industry trends.
 
However, as of June 30, 2025 and
 
December 31, 2024, the Corporation
applied
 
100%
 
probability
 
to
 
the
 
baseline
 
scenario
 
for
 
the
 
commercial
 
mortgage
 
and
 
construction
 
loan
 
portfolios
 
since
 
certain
macroeconomic
 
variables
 
associated
 
with
 
commercial
 
real estate
 
property
 
performance
 
and
 
the CRE
 
price
 
index,
 
particularly
 
in
 
the
Puerto Rico region,
 
are expected to continue
 
to perform in a
 
more favorable manner
 
than the alternative downside
 
economic scenario.
The
 
economic
 
scenarios
 
used
 
in
 
the
 
ACL
 
determination
 
contained
 
assumptions
 
related
 
to
 
economic
 
uncertainties
 
associated
 
with
geopolitical instability,
 
the CRE
 
price index,
 
unemployment rate,
 
inflation levels,
 
and expected
 
future interest
 
rate adjustments
 
in the
Federal Reserve Board’s funds rate.
 
 
 
 
 
 
 
106
As
 
of
 
June
 
30,
 
2025,
 
the
 
Corporation’s
 
ACL
 
model
 
considered
 
the
 
following
 
assumptions
 
for
 
key
 
economic
 
variables
 
in
 
the
probability-weighted economic scenarios:
●
CRE price
 
index at
 
the national
 
level with
 
an average
 
projected appreciation
 
of 0.14%
 
and an
 
average projected
 
contraction
of
 
0.08%
 
for
 
the
 
remainder
 
of
 
2025
 
and
 
for
 
the
 
year
 
2026,
 
respectively,
 
compared
 
to
 
an
 
average
 
projected
 
contraction
 
of
0.55% for the remainder of 2025 and an average projected appreciation
 
of 4.42% for the year 2026
 
as of December 31, 2024.
 
●
Regional
 
Home Price Index forecast
 
in Puerto Rico (purchase
 
only prices) shows an
 
improvement of 20.38% and
 
20.15% for
the remainder of 2025
 
and for the year 2026,
 
respectively, when
 
compared to the same
 
periods as of December
 
31, 2024. For
the
 
Florida
 
region,
 
the
 
Home
 
Price
 
Index
 
forecast
 
shows
 
an
 
improvement
 
of
 
1.75%
 
and
 
a
 
deterioration
 
of
 
0.92%
 
for
 
the
remainder of 2025 and for the year 2026, respectively,
 
when compared to the same periods as of December 31, 2024.
 
●
Average
 
regional unemployment rate
 
in Puerto Rico is
 
forecasted at 5.98%
 
for the remainder
 
of 2025 and 6.46%
 
for the year
2026, compared
 
to 6.41%
 
for the
 
remainder of
 
2025
 
and 6.21%
 
for the
 
year 2026
 
as of December
 
31, 2024.
 
For the
 
Florida
region and
 
the U.S. mainland,
 
average unemployment
 
rate is forecasted
 
at 4.45%
 
and 4.90%,
 
respectively,
 
for the
 
remainder
of
 
2025,
 
and
 
5.13%
 
and
 
5.59%,
 
respectively,
 
for
 
the
 
year
 
2026,
 
compared
 
to
 
4.68%
 
and
 
5.18%,
 
respectively,
 
for
 
the
remainder of 2025, and 4.15% and 4.60%, respectively,
 
for the year 2026, as of December 31, 2024.
●
Annualized change in
 
GDP in the U.S.
 
mainland of 0.78% for
 
the remainder of 2025
 
and 0.84% for the year
 
2026, compared
to 1.05% for the remainder of 2025
 
and 1.91%
 
for the year 2026, as of December 31, 2024.
It is difficult to estimate how potential changes
 
in one factor or input might affect the overall ACL because
 
management considers a
wide variety of
 
factors and inputs in
 
estimating the ACL.
 
Changes in the
 
factors and inputs considered
 
may not occur
 
at the same rate
and may not be consistent
 
across all geographies or product
 
types, and changes in factors
 
and inputs may be directionally
 
inconsistent,
such that improvement
 
in one factor
 
or input may
 
offset deterioration
 
in others. However,
 
to demonstrate the
 
sensitivity of credit
 
loss
estimates
 
to
 
macroeconomic
 
forecasts
 
as
 
of
 
June
 
30,
 
2025,
 
management
 
compared
 
the
 
modeled
 
estimates
 
under
 
the
 
probability-
weighted
 
economic
 
scenarios
 
against
 
a
 
more
 
adverse
 
scenario.
 
Such
 
scenario
 
incorporates
 
an
 
additional
 
adverse
 
scenario
 
and
decreases the
 
weight applied
 
to the
 
baseline scenario.
 
Under this
 
more adverse
 
scenario, as
 
an example,
 
average unemployment
 
rate
for the
 
Puerto Rico
 
region increases
 
to 6.28%
 
for the
 
remainder of
 
2025, compared
 
to 5.98%
 
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
 
June
 
30,
 
2025,
 
management
calculated
 
the
 
difference
 
between
 
the
 
quantitative
 
ACL
 
and
 
this
 
more
 
adverse
 
scenario.
 
Excluding
 
consideration
 
of
 
qualitative
adjustments,
 
this
 
sensitivity
 
analysis
 
would
 
result
 
in
 
a
 
hypothetical
 
increase
 
in
 
the
 
ACL
 
of
 
approximately
 
$47
 
million
 
at
 
June
 
30,
2025.
 
This analysis
 
relates only
 
to the
 
modeled credit
 
loss estimates
 
and is
 
not intended
 
to estimate
 
changes in
 
the overall
 
ACL as
 
it
does
 
not
 
reflect
 
any
 
potential
 
changes
 
in
 
other
 
adjustments
 
to
 
the
 
qualitative
 
calculation,
 
which
 
would
 
also
 
be
 
influenced
 
by
 
the
judgment
 
management
 
applies
 
to
 
the
 
modeled
 
lifetime
 
loss
 
estimates
 
to
 
reflect
 
the
 
uncertainty
 
and
 
imprecision
 
of
 
these
 
estimates
based
 
on
 
current
 
circumstances
 
and
 
conditions.
 
Recognizing
 
that
 
forecasts
 
of
 
macroeconomic
 
conditions
 
are
 
inherently
 
uncertain,
particularly in
 
light of
 
recent economic
 
conditions and
 
challenges, which
 
continue to
 
evolve, management
 
believes that
 
its process
 
to
consider the
 
available information
 
and associated
 
risks and
 
uncertainties is
 
appropriately governed
 
and that
 
its estimates
 
of expected
credit losses were reasonable and appropriate for the period ended
 
June 30, 2025.
As of June
 
30, 2025, the
 
ACL for loans
 
and finance
 
leases was $248.6
 
million, an increase
 
of $4.7
 
million, from $243.9
 
million as
of December
 
31, 2024.
 
The increase
 
was mainly
 
related to
 
the ACL
 
for commercial
 
and construction
 
loans, which
 
increased by
 
$7.4
million,
 
mainly
 
due
 
to
 
C&I
 
loan
 
growth,
 
a
 
deterioration
 
in
 
the
 
economic
 
outlook
 
of
 
the
 
forecasted
 
CRE
 
price
 
index,
 
and
 
updated
financial information of certain
 
commercial borrowers. Also, the ACL
 
for residential mortgage loans
 
increased by $1.8 million mainly
due to
 
the longer
 
expected life
 
of newly
 
originated loans,
 
partially offset
 
by improvements
 
in macroeconomic
 
variables, such
 
as the
unemployment rate and the Housing Price Index.
Meanwhile, the
 
ACL for
 
consumer loans
 
decreased by
 
$4.5 million,
 
driven by
 
improvements in
 
macroeconomic variables,
 
mainly
in the projection of the unemployment rate, and reductions in the unsecured
 
loan portfolio volumes.
The
 
ratio
 
of
 
the
 
ACL
 
for
 
loans
 
and
 
finance
 
leases
 
to
 
total
 
loans
 
held
 
for
 
investment
 
increased
 
to
 
1.93%
 
as
 
of
 
March
 
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
 
increased from 1.44%
 
as of December
 
31, 2024 to
1.48%
 
as
 
of
 
June
 
30,
 
2025,
 
mainly
 
due
 
to
 
the
 
aforementioned
 
longer
 
expected
 
life
 
of
 
newly
 
originated
 
loans,
 
partially
offset by the aforementioned improvements in macroeconomic variables.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
107
●
The ACL
 
to total
 
loans ratio
 
for the
 
construction loan
 
portfolio increased
 
from 1.67%
 
as of
 
December 31,
 
2024 to
 
1.85%
as of
 
June
 
30,
 
2025,
 
driven
 
by the
 
aforementioned
 
deterioration
 
in
 
the
 
forecasted
 
CRE
 
price
 
index,
 
updates
 
in
 
financial
information
 
of
 
certain
 
borrowers,
 
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
0.91% as of June 30, 2025, driven by the aforementioned deterioration
 
in the forecasted CRE price index.
●
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
June
 
30,
 
2025,
driven
 
by
 
the
 
aforementioned
 
impact
 
of
 
renewals
 
and
 
refinancings
 
and
 
updated
 
financial
 
information
 
of
certain commercial borrowers.
●
The ACL to
 
total loans ratio
 
for the consumer
 
loan portfolio decreased
 
from 3.83% as
 
of December
 
31, 2024
 
to 3.72% as
of June 30,
 
2025, mainly
 
due to the
 
aforementioned improvements
 
in macroeconomic
 
variables and a
 
change in asset
 
mix
due to a reduction in the unsecured loan portfolio.
 
The ratio
 
of the
 
total ACL
 
for loans
 
and finance
 
leases to
 
nonaccrual loans
 
held for
 
investment was
 
248.33%
 
as of
 
June 30,
 
2025,
compared
 
to 278.90%
 
as of
 
December
 
31, 2024,
 
driven by
 
the inflow
 
to nonaccrual
 
status of
 
a $12.6
 
million
 
commercial mortgage
loan
 
in
 
the
 
Florida
 
region,
 
which
 
did
 
not
 
trigger
 
any
 
additional
 
ACL
 
based
 
on
 
the
 
collateral
 
value,
 
partially
 
offset
 
by
 
the
aforementioned increase in ACL to total loans ratio in the construction
 
loan portfolio.
 
See “Results of Operations
 
- Provision for
 
Credit Losses” above
 
and Note 4 –
 
“Allowance for Credit
 
Losses for Loans
 
and Finance
Leases” above for additional information.
Quarter Ended June 30,
Six-Month Period Ended June 30,
2025
2024
2025
2024
(Dollars in thousands)
ACL for loans and finance leases, beginning of period
$
247,269
$
263,592
$
243,942
$
261,843
Provision for credit losses - expense (benefit):
Residential mortgage
793
(10,593)
1,797
(11,057)
Construction
1,121
(554)
700
17
Commercial mortgage
(1,448)
(2,976)
208
(2,986)
C&I
2,135
(596)
5,488
(3,756)
Consumer loans and finance leases
17,780
26,649
37,025
42,629
Total provision for credit losses
 
- expense
20,381
11,930
45,218
24,847
Charge-offs:
Residential mortgage
(285)
(491)
(520)
(1,007)
C&I
(66)
(348)
(143)
(880)
Consumer loans and finance leases
(24,178)
(25,575)
(52,076)
(53,866)
Total charge offs
(24,529)
(26,414)
(52,739)
(55,753)
Recoveries:
Residential mortgage
300
446
517
718
Construction
13
14
27
24
Commercial mortgage
51
393
91
433
C&I
 
826
961
980
6,080
Consumer loans and finance leases
(1)
4,267
3,610
10,542
16,340
Total recoveries
5,457
5,424
12,157
23,595
Net charge-offs
(19,072)
(20,990)
(40,582)
(32,158)
ACL for loans and finance leases, end of period
$
248,578
$
254,532
$
248,578
$
254,532
ACL for loans and finance leases to period-end total loans
 
held for investment
1.93%
2.06%
1.93%
2.06%
Net charge-offs to average loans outstanding
 
during the period
(2)
0.60%
0.69%
0.64%
0.53%
Provision for credit losses - expense for loans and finance
 
leases to net charge-offs during the
period
1.07x
0.57x
1.11x
0.77x
(1)
For the six-month periods ended June 30, 2025 and 2024, includes recoveries totaling $2.4 million and $9.5 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 4 bps and 15 bps for the six-month periods ended June 30, 2025 and 2024, respectively.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
108
 
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 June 30, 2025
Residential
Mortgage
Loans
Commercial
Mortgage
Loans
C&I Loans
Consumer Loans
and Finance
Leases
Construction
Loans
(Dollars in thousands)
Total
Total loans held for investment:
 
Amortized cost of loans
$
2,859,158
$
245,350
$
2,502,475
$
3,516,008
$
3,747,011
$
12,870,002
 
Percent of loans in each category to total loans
22
%
2
%
19
%
27
%
30
%
100
%
 
Allowance for credit losses
$
42,448
$
4,551
$
22,746
$
39,359
$
139,474
$
248,578
 
Allowance for credit losses to amortized cost
1.48
%
1.85
%
0.91
%
1.12
%
3.72
%
1.93
%
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
 
June 30,
 
2025,
 
the ACL
 
for off
 
-balance sheet
 
credit
exposures increased
 
by $0.3 million to $3.4 million, when compared to December 31, 2024.
Allowance for Credit Losses for Debt Securities
The ACL for debt
 
securities was $1.3 million,
 
of which $0.8 million
 
was related to Puerto
 
Rico municipal bonds
 
classified as held-
to-maturity as of each of June 30, 2025 and December 31, 2024.
 
Nonaccrual Loans and Non-Performing Assets
Total
 
non-performing
 
assets consist
 
of nonaccrual
 
loans (generally
 
loans held
 
for
 
investment or
 
loans held
 
for
 
sale for
 
which
 
the
recognition of
 
interest income
 
was discontinued
 
when the
 
loan became
 
90 days
 
past due
 
or earlier
 
if the
 
full and
 
timely collection
 
of
interest or principal is uncertain), foreclosed real estate and
 
other repossessed properties (generally repossessed automobiles),
 
and non-
performing investment
 
securities, if
 
any.
 
See Note
 
1 –
 
“Nature of
 
Business and
 
Summary of
 
Significant Accounting
 
Policies” to
 
the
audited consolidated
 
financial statements included
 
in the 2024
 
Annual Report on
 
Form 10-K for
 
information on
 
the policies followed
by the Corporation to classify loans in nonaccrual status or 90 days and still accruing.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
109
 
The following table shows non-performing assets by geographic segment as of
 
the indicated dates:
June 30, 2025
December 31, 2024
(In thousands)
Puerto Rico:
Nonaccrual loans held for investment:
Residential mortgage
$
12,967
$
16,854
Construction
4,760
403
Commercial mortgage
2,360
2,716
C&I
19,506
19,595
Consumer loans and finance leases
19,791
22,538
Total nonaccrual loans held for investment
59,384
62,106
OREO
10,834
13,691
Other repossessed property
11,789
11,637
Other assets
(1)
1,576
1,620
Total non-performing assets
$
83,583
$
89,054
Past due loans 90 days and still accruing
$
29,054
$
39,307
Virgin Islands:
Nonaccrual loans held for investment:
Residential mortgage
$
6,987
$
6,555
Construction
958
962
Commercial mortgage
8,170
8,135
C&I
642
919
Consumer loans
527
205
Total nonaccrual loans held for investment
17,284
16,776
OREO
3,615
3,615
Other repossessed property
79
219
Total non-performing assets
$
20,978
$
20,610
Past due loans 90 days and still accruing
$
481
$
3,083
United States:
Nonaccrual loans held for investment:
Residential mortgage
$
10,836
$
8,540
Commercial mortgage
12,375
-
C&I
201
-
Consumer loans
18
45
Total nonaccrual loans held for investment
23,430
8,585
Other repossessed property
-
3
Total non-performing assets
$
23,430
$
8,588
Total
Nonaccrual loans held for investment:
Residential mortgage
$
30,790
$
31,949
Construction
5,718
1,365
Commercial mortgage
22,905
10,851
C&I
20,349
20,514
Consumer loans and finance leases
20,336
22,788
Total nonaccrual loans held for investment
100,098
87,467
OREO
14,449
17,306
Other repossessed property
11,868
11,859
Other assets
(1)
1,576
1,620
Total non-performing assets
$
127,991
$
118,252
Past due loans 90 days and still accruing
(2) (3) (4) (5)
$
29,535
$
42,390
Non-performing assets to total assets
 
0.68%
0.61%
Nonaccrual loans held for investment to total loans held for investment
0.78%
0.69%
ACL for loans and finance leases
248,578
243,942
ACL for loans and finance leases to total nonaccrual loans held
 
for investment
248.33%
278.90%
ACL for loans and finance leases to total nonaccrual loans held
 
for investment, excluding residential real estate loans
358.66%
439.39%
(1)
Residential pass-through MBS issued by the PRHFA held as
 
part of the available-for-sale debt securities portfolio.
(2)
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
 
$4.9 million and
$6.2 million as of June 30, 2025 and December 31, 2024, respectively.
(3)
Includes FHA/VA
 
government-guaranteed residential
 
mortgage 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
 
$6.2
 
million
 
and
 
$8.0
 
million
 
of
 
FHA
government guaranteed residential mortgage loans that were over 15 months delinquent as of June 30, 2025 and
 
December 31, 2024, respectively.
(4)
These includes rebooked loans, which were previously pooled into GNMA securities,
 
amounting to $5.5 million and $5.7 million as of June
 
30, 2025 and December 31, 2024, respectively.
 
Under the
GNMA program,
 
the Corporation
 
has the
 
option but
 
not the
 
obligation to
 
repurchase loans
 
that meet
 
GNMA’s
 
specified delinquency
 
criteria. For
 
accounting purposes,
 
the loans
 
subject to
 
the
repurchase option are required to be reflected on the financial statements with an offsetting liability.
(5)
Includes credit cards that continue accruing interest until charged-off at 180 days
 
delinquent.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
110
Total
 
non-performing
 
assets
 
increased
 
by
 
$9.7
 
million
 
to
 
$128.0
 
million
 
as
 
of
 
June
 
30,
 
2025,
 
compared
 
to
 
$118.3
 
million
 
as
 
of
December
 
31,
 
2024.
 
The
 
increase
 
in
 
non-performing
 
assets
 
was
 
driven
 
by
 
a
 
$16.2
 
million
 
increase
 
in
 
nonaccrual
 
commercial
 
and
construction loans,
 
mainly due
 
to the
 
inflows to
 
nonaccrual status
 
of a
 
$12.6 million
 
commercial mortgage
 
loan in
 
the Florida
 
region
and
 
a
 
$4.3
 
million
 
construction
 
loan
 
in
 
the
 
Puerto
 
Rico
 
region,
 
both
 
in
 
the
 
hospitality
 
industry;
 
partially
 
offset
 
by
 
a
 
$2.9
 
million
decrease
 
in
 
the
 
OREO
 
portfolio
 
balance,
 
mainly
 
attributable
 
to
 
the
 
sale
 
of
 
residential
 
properties
 
in
 
the
 
Puerto
 
Rico
 
region;
 
a
 
$2.5
million decrease in consumer loans and finance leases; and a $1.1
 
million decrease in nonaccrual residential mortgage loans.
 
The following tables present the activity of commercial and construction
 
nonaccrual loans held for investment for the indicated
periods:
Construction
Commercial
Mortgage
C&I
Total
(In thousands)
Quarter Ended June 30, 2025
Beginning balance
$
1,356
$
23,155
$
20,344
$
44,855
Plus:
Additions to nonaccrual
 
4,371
302
533
5,206
Less:
Loan collections
(9)
(552)
(528)
(1,089)
Ending balance
 
$
5,718
$
22,905
$
20,349
$
48,972
Construction
Commercial
Mortgage
C&I
Total
(In thousands)
Quarter Ended June 30, 2024
Beginning balance
$
1,498
$
11,976
$
25,067
$
38,541
Plus:
Additions to nonaccrual
3,300
7
14,800
18,107
Less:
Loans returned to accrual status
(35)
(77)
(9,226)
(1)
(9,338)
Nonaccrual loans transferred to OREO
-
-
(684)
(684)
Nonaccrual loans charge-offs
-
-
(332)
(332)
Loan collections
(21)
(170)
(1,964)
(2,155)
Ending balance
 
$
4,742
$
11,736
$
27,661
$
44,139
(1)
Mainly related to the restoration to accrual status of an $8.8
 
million 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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
111
Construction
Commercial
Mortgage
C&I
 
Total
(In thousands)
Six-Month Period Ended June 30, 2025
Beginning balance
$
1,365
$
10,851
$
20,514
$
32,730
Plus:
Additions to nonaccrual
 
4,371
13,284
1,389
19,044
Less:
Loans returned to accrual status
-
(349)
(165)
(514)
Nonaccrual loans transferred to OREO
-
(54)
(203)
(257)
Nonaccrual loans charge-offs
-
-
(47)
(47)
Loan collections
(18)
(827)
(1,139)
(1,984)
Ending balance
 
$
5,718
$
22,905
$
20,349
$
48,972
Construction
Commercial
Mortgage
C&I
 
Total
(In thousands)
Six-Month Period Ended June 30, 2024
Beginning balance
$
1,569
$
12,205
$
15,250
$
29,024
Plus:
Additions to nonaccrual
3,300
7
25,841
29,148
Less:
Loans returned to accrual status
(35)
(77)
(9,226)
 
(1)
(9,338)
Nonaccrual loans transferred to OREO
(48)
-
(684)
(732)
Nonaccrual loans charge-offs
-
-
(791)
(791)
Loan collections
(44)
(399)
(2,729)
(3,172)
Ending balance
 
$
4,742
$
11,736
$
27,661
$
44,139
(1)
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
112
The following table presents the activity of residential nonaccrual loans
 
held for investment for the indicated periods:
Quarter Ended June 30,
Six-Month Period Ended June 30,
2025
2024
2025
2024
(In thousands)
Beginning balance
 
$
30,793
$
32,685
$
31,949
$
32,239
 
Plus:
 
Additions to nonaccrual
4,897
3,397
9,482
7,993
 
Less:
 
Loans returned to accrual status
 
(2,905)
(2,137)
(6,604)
(4,970)
 
Nonaccrual loans transferred to OREO
(268)
(743)
(915)
(1,147)
 
Nonaccrual loans charge-offs
(1)
(153)
(37)
(278)
 
Loan collections
(1,726)
(1,653)
(3,085)
(2,441)
Ending balance
 
$
30,790
$
31,396
$
30,790
$
31,396
The amount of nonaccrual consumer loans, including finance leases, decreased
 
by $2.5 million to $20.3 million as of June 30, 2025,
in part
 
due to
 
a decrease
 
in auto
 
loans. The
 
inflows of
 
nonaccrual consumer
 
loans during
 
the six-month
 
period ended
 
June 30,
 
2025
amounted to $49.3 million, compared to inflows of $53.6 million for
 
the same period in 2024.
As
 
of
 
June
 
30,
 
2025,
 
approximately
 
$42.7
 
million,
 
or
 
43%,
 
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 six-month
 
period ended June
 
30, 2025, interest income
 
of approximately $0.6 million
 
related to nonaccrual
 
loans with a
carrying
 
value of
 
$45.8 million
 
as of
 
June 30,
 
2025,
 
mainly nonaccrual
 
commercial
 
and construction
 
loans, was
 
applied against
 
the
related principal balances under the cost-recovery method.
Total loans in early
 
delinquency (
i.e.
, 30-89 days past due loans, as defined in regulatory reporting
 
instructions) amounted to $134.0
million as of
 
June 30, 2025,
 
a decrease of $19.0
 
million, compared to
 
$153.0 million as
 
of December 31,
 
2024, mainly due
 
to a $13.2
million decrease in consumer loans across all major portfolio classes and a $6.6
 
million decrease in residential mortgage loans.
In
 
addition,
 
the
 
Corporation
 
provides
 
homeownership
 
preservation
 
assistance
 
to
 
its
 
customers
 
through
 
a
 
loss
 
mitigation
program. Depending upon the nature of a borrower’s
 
financial condition, restructurings or loan
 
modifications through this program are
provided,
 
as well
 
as other
 
modifications of
 
individual C&I,
 
commercial
 
mortgage, construction,
 
and residential
 
mortgage loans.
 
For
the six-month
 
period ended
 
June 30,
 
2025, loans
 
modified to
 
borrowers experiencing
 
financial difficulty
 
had an
 
amortized cost
 
basis
of
 
$36.6
 
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 $121.4 million for the same period in
2024,
 
which included $110.9 million
 
related to a commercial mortgage
 
relationship in the Puerto Rico
 
region that had been previously
reported as a troubled
 
debt restructuring under ASC 310
 
-40. See Note 3 – “Loans
 
Held for Investment” for
 
additional information and
statistics about the Corporation’s
 
modified loans.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
113
The OREO portfolio, which is part of non-performing
 
assets, amounted to $14.4 million as of June 30,
 
2025 and $17.3 million as of
December 31,
 
2024. The
 
following tables
 
show the
 
composition of
 
the OREO portfolio
 
as of June
 
30, 2025
 
and December
 
31, 2024,
as well as the activity of the OREO portfolio by geographic area during the
 
six-month period ended June 30, 2025:
OREO Composition by Region
 
As of June 30, 2025
(In thousands)
Puerto Rico
Virgin Islands
Florida
Consolidated
Residential
 
$
9,542
$
805
$
-
$
10,347
Construction
435
-
-
435
Commercial
857
2,810
-
3,667
$
10,834
$
3,615
$
-
$
14,449
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
-
3,887
$
13,691
$
3,615
$
-
$
17,306
OREO Activity by Region
 
Six-Month Period Ended June 30, 2025
(In thousands)
Puerto Rico
Virgin Islands
Florida
Consolidated
Beginning Balance
$
13,691
$
3,615
$
-
$
17,306
Additions
2,775
-
-
2,775
Sales
(5,003)
-
-
(5,003)
Subsequent measurement adjustments
(384)
-
-
(384)
Other adjustments
(245)
-
-
(245)
Ending Balance
$
10,834
$
3,615
$
-
$
14,449
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
114
Net Charge-offs and Total
 
Credit Losses
 
Net charge-offs
 
totaled $19.1
 
million for
 
the second
 
quarter of
 
2025, or
 
an annualized
 
0.60% of
 
average loans,
 
compared to
 
$21.0
million,
 
or
 
an
 
annualized
 
0.69%
 
of
 
average
 
loans,
 
for
 
the
 
second
 
quarter
 
of
 
2024.
 
The
 
decrease
 
in
 
net
 
charge-offs
 
for
 
the
 
second
quarter of 2025 was driven
 
by a decrease in consumer
 
loans and finance leases net
 
charge-offs, mainly
 
in the personal loans and credit
cards
 
portfolios.
 
For
 
the
 
first
 
six
 
months
 
of
 
2025,
 
net
 
charge-offs
 
totaled
 
$40.5
 
million,
 
or
 
an
 
annualized
 
0.64%
 
of
 
average
 
loans,
compared
 
to $32.2
 
million,
 
or
 
an
 
annualized
 
0.53%
 
of
 
average
 
loans,
 
for
 
the
 
same
 
period
 
in
 
2024.
 
Net
 
charge-offs
 
for
 
the
 
first
 
six
months
 
of 2025
 
and
 
2024 included
 
$2.4
 
million
 
and
 
$9.5 million,
 
respectively,
 
in recoveries
 
associated
 
with
 
the
 
bulk sales
 
of
 
fully
charged-off
 
consumer loans and
 
finance leases during
 
such periods, which
 
reduced the ratio
 
of total net
 
charge-offs to
 
related average
loans
 
by 4
 
bps and
 
15 bps
 
,
 
respectively.
 
The
 
increase
 
in net
 
charge-offs
 
for
 
the first
 
six months
 
of 2025
 
was also
 
driven
 
by a
 
$5.0
million
 
recovery
 
associated
 
with
 
a
 
C&I
 
loan
 
in
 
the
 
Puerto
 
Rico
 
region
 
during
 
the
 
first
 
six
 
months
 
of
 
2024,
 
partially
 
offset
 
by
 
a
decrease in consumer loans and finance leases charge-offs.
 
The following table presents net (recoveries) charge-offs
 
to average loans held-in-portfolio for the indicated periods:
Quarter Ended June 30,
Six-Month Period Ended June 30,
2025
2024
2025
2024
Residential mortgage
 
(0.00)
%
0.01
%
-
%
0.02
%
Construction
 
(0.02)
%
(0.02)
%
(0.02)
%
(0.02)
%
Commercial mortgage
(0.01)
%
(0.07)
%
(0.01)
%
(0.04)
%
C&I
(0.09)
%
(0.08)
%
(0.05)
%
(0.33)
%
Consumer loans and finance leases
 
(1)
2.12
%
2.38
%
2.21
%
2.04
%
Total loans
 
(1)
0.60
%
0.69
%
0.64
%
0.53
%
(1)
The net charge-offs for the six-month periods
 
ended June 30, 2025 and 2024 included $2.4 million and $9.5 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 six-month
period ended June 30, 2025 by 13 bps and 4 bps, respectively,
 
and by 52 bps and 15 bps, respectively,
 
for the six-month period ended June 30, 2024.
 
The following table presents net (recoveries) charge-offs
 
to average loans held in various portfolios by geographic segment for the
indicated periods:
Quarter Ended June 30,
Six-Month Period Ended June 30,
2025
2024
2025
2024
PUERTO RICO:
Residential mortgage
(0.00)
%
0.01
%
(0.00)
%
0.03
%
Commercial mortgage
(0.00)
%
(0.00)
%
(0.00)
%
(0.00)
%
C&I
(0.14)
%
0.04
%
(0.08)
%
(0.43)
%
Consumer loans and finance leases
(1)
2.14
%
2.39
%
2.24
%
2.02
%
Total loans
(1)
0.76
%
0.90
%
0.82
%
0.66
%
VIRGIN ISLANDS:
Commercial mortgage
(0.19)
%
(0.23)
%
(0.20)
%
(0.22)
%
C&I
-
%
-
%
0.03
%
(0.00)
%
Consumer loans and finance leases
1.77
%
2.49
%
1.35
%
3.11
%
Total loans
0.23
%
0.36
%
0.18
%
0.47
%
FLORIDA:
Residential mortgage
(0.00)
%
(0.00)
%
(0.00)
%
(0.00)
%
Construction
 
(0.13)
%
(0.07)
%
(0.13)
%
(0.06)
%
Commercial mortgage
-
%
(0.23)
%
-
%
(0.12)
%
C&I
(0.01)
%
(0.37)
%
(0.01)
%
(0.13)
%
Consumer loans and finance leases
(0.62)
%
(3.57)
%
(0.37)
%
(1.69)
%
Total loans
(0.01)
%
(0.25)
%
(0.01)
%
(0.10)
%
(1)
The recoveries associated with the aforementioned bulk sales of fully charged-offs 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 six-month period ended June 30, 2025 by 12 bps and 4 bps, respectively, and by 53 bps and 20 bps, respectively, for the six-month period ended June 30, 2024.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
115
The following table presents information about the OREO inventory
 
and related gains and losses for the indicated periods:
Quarter Ended June 30,
Six-Month Period Ended June 30,
2025
2024
2025
2024
(Dollars in thousands)
OREO
OREO balances, carrying value:
Residential
$
10,347
$
15,468
$
10,347
$
15,468
Construction
435
1,658
435
1,658
Commercial
3,667
4,556
3,667
4,556
Total
$
14,449
$
21,682
$
14,449
$
21,682
OREO activity (number of properties):
Beginning property inventory
161
247
181
277
Properties acquired
11
33
24
49
Properties disposed
(31)
(58)
(64)
(104)
Ending property inventory
141
222
141
222
Average holding period (in days)
Residential
541
512
541
512
Construction
1,745
2,541
1,745
2,541
Commercial
3,994
3,342
3,994
3,342
Total average holding period (in days)
1,454
1,262
1,454
1,262
OREO operations (gain) loss:
Market adjustments and (gains) losses on sale:
Residential
$
(1,062)
$
(1,918)
$
(2,261)
$
(3,744)
Construction
(23)
(10)
(71)
(19)
Commercial
213
(2,241)
201
(2,222)
Total net gain
(872)
(4,169)
(2,131)
(5,985)
Other OREO operations expenses
281
560
411
924
Net Gain on OREO operations
$
(591)
$
(3,609)
$
(1,720)
$
(5,061)
 
 
 
 
 
 
 
 
 
116
Operational Risk
The
 
Corporation
 
faces
 
ongoing
 
and
 
emerging
 
risk
 
and
 
regulatory
 
pressure
 
related
 
to
 
the
 
activities
 
that
 
surround
 
the
 
delivery
 
of
banking
 
and
 
financial
 
products.
 
Coupled
 
with
 
external
 
influences,
 
such
 
as
 
market
 
conditions,
 
security
 
risks,
 
and
 
legal
 
risks,
 
the
potential for
 
operational and
 
reputational loss
 
has increased.
 
To
 
mitigate and
 
control operational
 
risk, the
 
Corporation has
 
developed,
and continues
 
to enhance, specific
 
internal controls,
 
policies and procedures
 
that are designed
 
to identify and
 
manage operational risk
at
 
appropriate
 
levels
 
throughout
 
the
 
organization.
 
The
 
purpose
 
of
 
these
 
mechanisms
 
is
 
to
 
provide
 
reasonable
 
assurance
 
that
 
the
Corporation’s business operations
 
are functioning within the policies and limits established by management.
The
 
Corporation
 
classifies operational
 
risk
 
into
 
two
 
major
 
categories:
 
business-specific
 
and
 
corporate-wide
 
affecting
 
all business
lines. For business specific risks,
 
Enterprise Risk Management
 
works with the various
 
business units to ensure consistency
 
in policies,
processes
 
and
 
assessments.
 
With
 
respect
 
to
 
corporate-wide
 
risks,
 
such
 
as
 
information
 
security,
 
business
 
recovery,
 
and
 
legal
 
and
compliance,
 
the
 
Corporation
 
has
 
specialized
 
groups,
 
such
 
as
 
the
 
Legal
 
Department,
 
Information
 
Security,
 
Corporate
 
Compliance,
Operations and Enterprise
 
Risk Management. These
 
groups assist the lines
 
of business in
 
the development and
 
implementation of risk
management practices specific to the needs of the business groups.
Legal and Compliance Risk
Legal and compliance risk includes
 
the risk of noncompliance with applicable
 
legal and regulatory requirements, the
 
risk of adverse
legal
 
judgments
 
against
 
the
 
Corporation,
 
and
 
the
 
risk
 
that
 
a
 
counterparty’s
 
performance
 
obligations
 
will
 
be
 
unenforceable.
 
The
Corporation
 
is
 
subject
 
to
 
extensive
 
regulation
 
in
 
the
 
different
 
jurisdictions
 
in
 
which
 
it
 
conducts
 
its
 
business,
 
and
 
this
 
regulatory
scrutiny has
 
been significantly
 
increasing over
 
the years.
 
The Corporation
 
has established,
 
and continues
 
to enhance,
 
procedures that
are designed
 
to ensure
 
compliance with
 
all applicable
 
statutory,
 
regulatory
 
and any
 
other legal
 
requirements.
 
The Corporation
 
has a
Compliance
 
Director
 
who
 
reports
 
to
 
the
 
Chief
 
Risk
 
Officer
 
and
 
is
 
responsible
 
for
 
the
 
oversight
 
of
 
regulatory
 
compliance
 
and
implementation
 
of an
 
enterprise-wide compliance
 
risk assessment
 
process.
 
The Compliance
 
division
 
has officer
 
roles in
 
each major
business area with direct reporting responsibilities to the Corporate Compliance
 
Group.
Concentration Risk
The Corporation conducts
 
its operations in
 
a geographically concentrated
 
area, as its main
 
market is Puerto
 
Rico. Of the
 
total gross
loan portfolio
 
held for
 
investment of
 
$12.9 billion
 
as of
 
June 30,
 
2025, the
 
Corporation had
 
credit risk
 
of approximately
 
77% in
 
the
Puerto Rico region, 19% in the United States region, and 4% in the Virgin
 
Islands region.
Update on the Puerto Rico Fiscal and Economic Situation
A significant
 
portion
 
of the
 
Corporation’s
 
business activities
 
and credit
 
exposure
 
is concentrated
 
in the
 
Commonwealth of
 
Puerto
Rico,
 
which
 
has
 
experienced
 
economic
 
and
 
fiscal
 
distress
 
over
 
the
 
last
 
decade.
 
See
 
“Risk
 
Management
 
–
 
Exposure
 
to
 
Puerto
 
Rico
Government”
 
below.
 
Since
 
declaring
 
bankruptcy
 
and
 
benefitting
 
from
 
the
 
enactment
 
of
 
the
 
federal
 
Puerto
 
Rico
 
Oversight,
Management and Economic Stability Act (“PROMESA”)
 
in 2016, the Government of Puerto Rico has made
 
progress on fiscal matters
primarily
 
by restructuring
 
a large
 
portion of
 
its outstanding
 
public debt
 
and identifying
 
funding
 
sources for
 
its underfunded
 
pension
system.
Economic Indicators
In
 
March
 
2025,
 
the
 
Puerto
 
Rico Planning
 
Board
 
(“PRPB”)
 
published
 
its annual
 
analysis
 
of
 
the Puerto
 
Rico’s
 
economy
 
for
 
fiscal
year
 
2024,
 
as well
 
as a
 
revised
 
short-term
 
forecast
 
for fiscal
 
years 2025
 
and 2026.
 
According
 
to the
 
PRPB’s
 
preliminary
 
estimates,
Puerto Rico’s
 
real gross
 
national product
 
(“GNP”) grew
 
by 2.1%
 
in fiscal year
 
2024, marking
 
the fourth consecutive
 
year of
 
positive
economic growth. The main drivers for growth during
 
fiscal year 2024 were personal consumption expenditures and
 
fixed investments
in both
 
construction
 
and machinery
 
and equipment.
 
These positive
 
variances
 
were partially
 
offset
 
by a
 
reduction
 
in inventories.
 
For
fiscal years 2025 and 2026, the PRPB’s baseline
 
projections contemplate real GNP growth of 1.1% and 0.5%, respectively.
There
 
are
 
other
 
indicators
 
that
 
gauge
 
economic
 
activity
 
and
 
are
 
published
 
with
 
greater
 
frequency,
 
for
 
example,
 
the
 
Economic
Development
 
Bank
 
for
 
Puerto
 
Rico’s
 
Economic
 
Activity
 
Index
 
(“EDB-EAI”).
 
Although
 
not
 
a
 
direct
 
measure
 
of
 
Puerto
 
Rico’s
 
real
GNP,
 
the EDB-EAI is
 
correlated to Puerto
 
Rico’s real
 
GNP.
 
During the calendar
 
year 2024, the
 
EDB-EAI averaged 128.1,
 
increasing
by 0.6%
 
on a year-over-year
 
basis and
 
reaching its
 
highest level
 
since 2014.
 
For February
 
2025, estimates
 
showed that
 
the EDB-EAI
stood
 
at
 
127.5,
 
down
 
0.9%
 
on
 
a
 
year-over-year
 
basis.
 
Over
 
the
 
12-month
 
period
 
ended February
 
28,
 
2025,
 
the
 
EDB-EAI
 
averaged
127.9, 0.1% below the comparable figure a year earlier.
 
 
117
Labor market trends
 
remain positive. Data
 
published by the
 
Bureau of Labor
 
Statistics showed that
 
non-farm payrolls in
 
June 2025
in Puerto Rico increased by 1.0% when compared to June
 
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 5.6%
 
and
 
Leisure
 
&
 
Hospitality
 
with
 
a
 
positive
 
variance
 
of 3.5%.
 
The unemployment
 
rate
 
remained
 
stable
 
at
5.5% in June 2025.
Fiscal Plan
 
On June
 
6, 2025,
 
the PROMESA
 
oversight board
 
certified a revised
 
2024 Fiscal
 
Plan for
 
Puerto Rico
 
for the
 
purpose of
 
including
the currently anticipated
 
fiscal performance and updated
 
Fiscal Year
 
2025 revenue forecast based
 
on the most recent
 
available data on
revenue collections. The
 
Fiscal Plan intends to serve
 
as a roadmap to
 
promote economic growth and
 
achieve long-term fiscal stability.
See “Risk
 
Management
 
– Update
 
on the
 
Puerto
 
Rico Fiscal
 
and
 
Economic
 
Situation”
 
in Part
 
II, Item
 
7, “Management’s
 
Discussion
and Analysis of
 
Financial Condition
 
and Results of
 
Operations (“MD&A”),”
 
in the 2024
 
Annual Report
 
on Form 10-K
 
for additional
information.
Debt Restructuring
 
Over
 
80%
 
of
 
Puerto
 
Rico’s
 
outstanding
 
debt
 
has
 
been
 
restructured
 
to
 
date.
 
On
 
March
 
15,
 
2022,
 
the
 
Plan
 
of
 
Adjustment
 
of
 
the
central
 
government’s
 
debt
 
became
 
effective
 
through
 
the
 
exchange
 
of more
 
than
 
$33
 
billion
 
of
 
existing
 
bonds
 
and
 
other
 
claims
 
into
approximately
 
$7
 
billion
 
of
 
new
 
bonds,
 
saving
 
Puerto
 
Rico
 
more
 
than
 
$50
 
billion
 
in
 
debt
 
payments
 
to
 
creditors.
 
Also,
 
the
restructurings
 
of
 
the
 
Puerto
 
Rico
 
Sales
 
Tax
 
Financing
 
Corporation
 
(“COFINA”),
 
the
 
Highways
 
and
 
Transportation
 
Authority
(“HTA”),
 
and
 
the
 
Puerto
 
Rico
 
Aqueducts
 
and
 
Sewers
 
Authority
 
(“PRASA”)
 
are
 
expected
 
to
 
yield
 
savings
 
of
 
approximately
 
$17.5
billion, $3.0 billion, and $400 million, respectively,
 
in future debt service payments.
The main restructuring
 
pending is that
 
of the Puerto
 
Rico Electric Power
 
Authority (“PREPA”).
 
All PREPA
 
plan confirmation
 
and
bond-related litigation
 
is currently
 
stayed with
 
no appointed
 
date for
 
resumption, except
 
for certain
 
matters detailed
 
in a
 
Court order
dated
 
March
 
20,
 
2025,
 
including
 
permitting
 
the
 
PROMESA
 
oversight
 
board
 
to
 
file
 
an
 
amended
 
proposed
 
plan
 
of
 
adjustment.
 
The
PROMESA oversight
 
board filed
 
the fifth
 
amended plan
 
of adjustment
 
on March
 
28, 2025,
 
reflecting the
 
projections and
 
findings of
the new
 
PREPA
 
fiscal plan.
 
The amended
 
plan would
 
reduce PREPA’s
 
debt almost
 
80%, to
 
the equivalent
 
of $2.6
 
billion in
 
cash or
bonds,
 
excluding
 
pension
 
liabilities.
 
It
 
also
 
incorporates
 
several
 
amendments
 
to
 
the
 
previous
 
structure,
 
including
 
a
 
Rate
 
Reduction
Fund
 
to support
 
PREPA’s
 
pensions,
 
and
 
the elimination
 
of the
 
Legacy
 
Charge
 
contemplated
 
in the
 
previous
 
versions of
 
the plan
 
of
adjustment to repay the significantly reduced debt.
 
Other Developments
Notable
 
progress
 
continues
 
to
 
be
 
made
 
as
 
part
 
of
 
the
 
ongoing
 
efforts
 
of
 
prioritizing
 
the
 
restoration,
 
improvement,
 
and
modernization of
 
Puerto Rico’s
 
infrastructure,
 
particularly in
 
the aftermath
 
of Hurricane
 
Maria in
 
2017. During
 
the 12-month
 
period
ended
 
May 31,
 
2025, over
 
$3.5 billion
 
in disaster
 
relief funds
 
were disbursed
 
through the
 
Federal
 
Emergency
 
Management
 
Agency
(“FEMA”)
 
Public
 
Assistance
 
program
 
and
 
the
 
HUD
 
Community
 
Development
 
Block
 
Grant
 
(“CDBG”)
 
program,
 
a
 
1.4%
 
increase
when compared
 
to the
 
same period
 
in 2024.
 
Excluding disaster
 
relief funds
 
related to
 
Hurricane Fiona
 
which occurred
 
in September
2022 directed
 
towards emergency
 
efforts, disbursements
 
from FEMA’s
 
Public Assistance
 
program and
 
the CDBG program
 
increased
by 9.6% on a year-over-year
 
basis. These funds will continue
 
to play a key role in
 
supporting Puerto Rico’s
 
economic stability and are
expected
 
to
 
have
 
a
 
positive
 
impact
 
on
 
the
 
Island’s
 
infrastructure.
 
For
 
example,
 
approximately
 
86%
 
of
 
the
 
projects
 
that
 
FEMA
 
has
obligated
 
to
 
address
 
damage
 
caused
 
by
 
Hurricane
 
Maria
 
have
 
resources
 
to
 
reinforce
 
their
 
infrastructure,
 
among
 
other
 
hazard
mitigation measures,
 
that will
 
prepare these
 
facilities for
 
future weather
 
events. As
 
of July
 
21, 2025,
 
over 4,000
 
projects had
 
already
been completed
 
under FEMA’s
 
Public Assistance
 
Permanent Work
 
programs while
 
over 20,100
 
projects were
 
active across
 
different
stages
 
of
 
execution
 
for
 
a
 
total
 
cost
 
of
 
$11.6
 
billion,
 
equivalent
 
to
 
approximately
 
31%
 
of
 
the
 
agency’s
 
$37.2
 
billion
 
obligation,
according to the Central Office for Recovery,
 
Reconstruction and Resiliency (“COR3”).
On
 
June
 
27,
 
2025,
 
the
 
PROMESA
 
oversight
 
board
 
certified
 
the
 
$32.7
 
billion
 
fiscal
 
year
 
2026
 
Budget
 
for
 
the
 
Commonwealth
 
of
Puerto
 
Rico
 
consisting
 
of
 
the $13.1
 
billion
 
general
 
fund budget,
 
the $5.4
 
billion
 
special revenue
 
fund
 
budget,
 
and
 
the $14.2
 
billion
federal fund
 
budget. According
 
to the
 
oversight board,
 
the fiscal
 
year 2026
 
Budget was
 
developed jointly
 
with the
 
local government
and
 
reflects the
 
unprecedented
 
uncertainty
 
around federal
 
funding,
 
economic
 
growth,
 
and
 
Medicaid
 
costs in
 
the coming
 
fiscal
 
year.
More
 
than
 
60% of
 
total
 
government
 
funding
 
is allocated
 
to
 
health,
 
education,
 
public
 
safety,
 
housing
 
and
 
retirees.
 
The general
 
fund
budget increases
 
total spending
 
by 1.5%
 
from the
 
previous fiscal
 
year,
 
excluding certain
 
reclassifications of
 
general fund
 
revenues as
special
 
revenue,
 
while
 
funding
 
from
 
the
 
U.S.
 
Government
 
was
 
budgeted
 
to
 
decline
 
by
 
approximately
 
$1.2
 
billion,
 
mainly
 
due
 
a
reduction
 
in
 
federal
 
funding
 
for
 
education.
 
According
 
to
 
the
 
PROMESA
 
oversight
 
board,
 
the
 
fiscal
 
year
 
2026
 
Budget
 
prepares
 
the
Government for
 
potential further
 
declines in
 
federal funding
 
over the
 
fiscal year
 
that began
 
on July
 
1, 2025.
 
Specifically,
 
the budget
holds back 5% of most agencies spending for eight
 
months to prevent deficits should the general fund
 
revenue decline, federal funding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
118
decreases
 
or
 
Medicaid
 
costs
 
increase.
 
Certain
 
expenses
 
are
 
exempt
 
from
 
the
 
hold
 
back,
 
including
 
pensions,
 
public
 
safety,
 
certain
transportation costs, and sales tax.
On August 5, 2025, the PROMESA oversight board
 
announced that it had been informed by the White House that
 
President Donald
Trump terminated
 
five members of
 
the board from
 
their positions. At
 
the time of
 
this writing, no
 
potential candidates
 
for replacement
had been announced. Management
 
will continue to closely monitor
 
any developments and assess any implications
 
on fiscal policy and
the overall economic environment in Puerto Rico.
 
Exposure to Puerto Rico Government
As of
 
June 30,
 
2025, the
 
Corporation had
 
$286.9 million
 
of direct
 
exposure to
 
the Puerto
 
Rico government,
 
its municipalities
 
and
public corporations,
 
compared to $288.6
 
million as
 
of December
 
31, 2024.
 
As of June
 
30, 2025,
 
approximately $196.2
 
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
 
$50.3
 
million
 
consisted
 
of loans
 
and obligations
 
which
 
are supported
 
by one
 
or more
 
specific
 
sources of
 
municipal
revenues.
 
The
 
Corporation’s
 
exposure
 
to
 
Puerto
 
Rico
 
municipalities
 
consisted
 
primarily
 
of
 
senior
 
priority
 
loans
 
and
 
obligations
concentrated in
 
five of the
 
largest municipalities
 
in Puerto Rico.
 
The municipalities
 
are required by
 
law to levy
 
special property taxes
in
 
such
 
amounts
 
as
 
are
 
required
 
for
 
the
 
payment
 
of
 
all
 
of
 
their
 
respective
 
general
 
obligation
 
bonds
 
and
 
notes.
 
In
 
addition
 
to
municipalities, the
 
total direct exposure
 
also included $8.7
 
million in a
 
loan extended to
 
an affiliate
 
of PREPA,
 
$28.9 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 $2.8
 
million as part
 
of its available-for-sale
 
debt securities portfolio
(fair value of $1.6 million as of June 30, 2025).
The
 
following
 
table
 
details
 
the
 
Corporation’s
 
total
 
direct
 
exposure
 
to
 
Puerto
 
Rico
 
government
 
obligations
 
according
 
to
 
their
maturities:
As of June 30, 2025
Investment
Portfolio
(Amortized cost)
Loans
Total
 
Exposure
(In thousands)
Puerto Rico Housing Finance Authority:
 
After 10 years
$
2,833
$
-
$
2,833
Total Puerto Rico Housing Finance Authority
2,833
-
2,833
Public corporation of the Puerto Rico government:
 
Due within one year
-
8,854
8,854
 
After 5 to 10 years
-
20,065
20,065
Total public corporation of the Puerto Rico government
-
28,919
28,919
 
Affiliate of the Puerto Rico Electric Power Authority:
 
After 1 to 5 years
-
8,722
8,722
Total Puerto Rico government affiliate
-
8,722
8,722
Total Puerto Rico public corporations and government affiliate
-
37,641
37,641
Municipalities:
 
Due within one year
2,380
25,564
27,944
 
After 1 to 5 years
62,962
39,221
102,183
 
After 5 to 10 years
11,741
88,828
100,569
 
After 10 years
15,755
-
15,755
Total Municipalities
92,838
153,613
246,451
Total Direct
 
Government Exposure
$
95,671
$
191,254
$
286,925
Also, as of
 
June 30, 2025,
 
the outstanding balance
 
of construction loans
 
funded through
 
conduit financing structures
 
to support the
federal programs
 
of Low-Income
 
Housing Tax
 
Credit (“LIHTC”)
 
combined with
 
other federal
 
programs amounted
 
to $69.7
 
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
 
June 30, 2025, the Corporation
 
had $69.8 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
 
 
 
 
119
serve to
 
cover shortfalls
 
in collateral
 
in the
 
event of
 
a borrower
 
default. The
 
Puerto Rico government
 
guarantees up
 
to $75 million
 
of
the
 
principal
 
for
 
all
 
loans
 
under
 
the
 
mortgage
 
loan
 
insurance
 
program.
 
According
 
to
 
the
 
most
 
recently
 
released
 
audited
 
financial
statements of the PRHFA,
 
as of June 30, 2024, the PRHFA’s
 
mortgage loans insurance program covered
 
loans in an aggregate amount
of approximately $355 million. The regulations adopted
 
by the PRHFA require
 
the establishment of adequate reserves to guarantee
 
the
solvency of the mortgage
 
loans insurance program. As
 
of June 30, 2024,
 
the most recent date
 
as of which information
 
is available, the
PRHFA had a liability
 
of approximately $0.7 million as an estimate of the losses inherent in the portfolio.
As
 
of
 
June
 
30,
 
2025
 
and
 
December
 
31,
 
2024,
 
the
 
Corporation
 
had
 
$2.9
 
billion
 
and
 
$3.1
 
billion,
 
respectively,
 
of
 
public
 
sector
deposits in Puerto Rico.
 
Approximately 21% of
 
the public sector deposits as
 
of June 30, 2025
 
were from municipalities and
 
municipal
agencies in
 
Puerto Rico
 
and 79%
 
were from
 
public corporations,
 
the Puerto
 
Rico central
 
government and
 
agencies, and
 
U.S. federal
government agencies in Puerto Rico.
Exposure to USVI Government
The Corporation has operations in the USVI and has credit exposure
 
to USVI government entities.
For many years, the
 
USVI has been experiencing
 
several fiscal and economic
 
challenges that have deteriorated
 
the overall financial
and
 
economic
 
conditions
 
in
 
the
 
area.
 
On
 
June
 
17,
 
2024,
 
the
 
United
 
States
 
Bureau
 
of
 
Economic
 
Analysis
 
(the
 
“BEA”)
 
released
 
its
estimates of GDP
 
for 2022.
 
According to
 
the BEA, the
 
USVI’s
 
real GDP decreased
 
1.3% in 2022
 
after increasing
 
3.7% in 2021.
 
The
decrease
 
in
 
real
 
GDP
 
reflected
 
declines
 
in
 
exports,
 
private
 
fixed
 
investment,
 
government
 
spending,
 
and
 
personal
 
consumption
expenditures. These
 
negative variances were
 
partly offset
 
by an increase
 
in inventory investment,
 
while imports,
 
a subtraction item
 
in
the calculation of GDP,
 
decreased. The annual
 
publication of BEA’s
 
GDP statistics for the
 
USVI is made possible through
 
funding by
the
 
Office
 
of
 
Insular
 
Affairs
 
(“OIA”)
 
of
 
the
 
U.S.
 
Department
 
of
 
the
 
Interior.
 
OIA
 
has
 
paused
 
funding
 
of
 
this
 
work
 
to
 
conduct
 
an
exploratory
 
assessment
 
of
 
territorial
 
source
 
data
 
with
 
the
 
goal
 
of
 
informing
 
how
 
to
 
strategically
 
invest
 
in
 
and
 
support
 
the
 
USVI's
economic statistics into the future. Without
 
funding, BEA is pausing the production of GDP statistics
 
for the USVI. When funding and
improved data sources become available, BEA plans to resume production
 
of these statistics.
Over the past
 
three years, the
 
USVI has been
 
recovering from the
 
adverse impact caused
 
by COVID-19 and
 
has continued to
 
make
progress
 
on
 
its
 
rebuilding
 
efforts
 
related
 
to
 
Hurricanes
 
Irma
 
and
 
Maria,
 
which
 
occurred
 
in
 
September
 
2017.
 
According
 
to
 
data
published
 
by FEMA,
 
there were
 
over $26.1
 
billion in
 
obligated
 
disaster recovery
 
funds for
 
the USVI
 
as of
 
May 31,
 
2025, up
 
$10.9
billion (or 71%)
 
from the comparable
 
figure a year
 
earlier. During
 
the 12-month
 
period ended May
 
31, 2025, over
 
$707 million were
disbursed in the territory,
 
representing a year-over-year increase of 66%.
 
Finally, PROMESA
 
does not apply to
 
the USVI and, as such,
 
there is currently no federal
 
legislation permitting the restructuring
 
of
the debts of the USVI and
 
its public corporations and instrumentalities.
 
To the
 
extent that the fiscal condition of the
 
USVI government
deteriorates
 
again,
 
the
 
U.S.
 
Congress
 
or
 
the
 
government
 
of
 
the
 
USVI
 
may
 
enact
 
legislation
 
allowing
 
for
 
the
 
restructuring
 
of
 
the
financial
 
obligations
 
of
 
the
 
USVI
 
government
 
entities
 
or
 
imposing
 
a
 
stay
 
on
 
creditor
 
remedies,
 
including
 
by
 
making
 
PROMESA
applicable to the USVI.
As of June 30, 2025 and December 31, 2024, the Corporation had
 
$129.2 million and $100.4 million, respectively,
 
in loans to USVI
public
 
corporations,
 
of
 
which
 
$95.5
 
million
 
and
 
$68.2
 
million,
 
respectively,
 
were
 
fully
 
collateralized
 
by
 
cash
 
balances
 
held
 
at
 
the
Bank. As of June 30, 2025, all loans were currently performing and
 
up to date on principal and interest payments.
 
 
 
 
 
120
ITEM 3. QUANTITATIVE
 
AND QUALITATIVE DISCLOSURES
 
ABOUT MARKET
 
RISK
For
 
information
 
regarding
 
market
 
risk
 
to
 
which
 
the
 
Corporation
 
is
 
exposed,
 
see
 
the
 
information
 
contained
 
in
 
Part
 
I,
 
Item
 
2,
“Management’s
 
Discussion
 
and
 
Analysis
 
of
 
Financial
 
Condition
 
and
 
Results of
 
Operations
 
— Risk
 
Management”
 
in
 
this Quarterly
Report on Form 10-Q.
ITEM 4.
 
CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
First
 
BanCorp.’s
 
management,
 
including
 
its
 
Chief
 
Executive
 
Officer
 
and
 
Chief
 
Financial
 
Officer,
 
evaluated
 
the
 
effectiveness
 
of
First BanCorp.’s
 
disclosure controls and
 
procedures (as defined
 
in Rules 13a-15(e)
 
and 15d-15(e) under
 
the Exchange Act)
 
as of June
30, 2025, the end
 
of the period covered
 
by this Quarterly Report
 
on Form 10-Q.
 
Based on this evaluation,
 
the Chief Executive Officer
and
 
Chief Financial
 
Officer
 
concluded
 
that the
 
Corporation’s
 
disclosure
 
controls
 
and
 
procedures were
 
effective
 
as of
 
June 30,
 
2025
and provide reasonable
 
assurance that the
 
information required to
 
be disclosed by
 
the Corporation in
 
reports that the
 
Corporation files
or submits
 
under the
 
Exchange Act
 
is recorded,
 
processed, summarized
 
and reported
 
within the
 
time periods
 
specified in
 
SEC rules
and
 
forms
 
and
 
is
 
accumulated
 
and
 
reported
 
to
 
the
 
Corporation’s
 
management,
 
including
 
the
 
Chief
 
Executive
 
Officer
 
and
 
Chief
Financial Officer, as appropriate,
 
to allow timely decisions regarding required disclosures.
Internal Control over Financial Reporting
There were
 
no changes
 
to the
 
Corporation’s
 
internal control
 
over financial
 
reporting (as
 
defined
 
in Rules
 
13a-15(f) and
 
15d-15(f)
under the Exchange
 
Act) during the
 
most recent quarter
 
ended June 30,
 
2025 that have
 
materially affected,
 
or are reasonably
 
likely to
materially affect, the Corporation’s
 
internal control over financial reporting.
 
 
 
 
121
PART II - OTHER INFORMATION
In accordance with the instructions to Part II
 
of Form 10-Q, the other specified items in
 
this part have been omitted because they are not
applicable, or the information has been previously reported.
ITEM 1.
 
LEGAL PROCEEDINGS
For
 
a
 
discussion
 
of
 
legal
 
proceedings,
 
see
 
Note
 
19
 
–
 
“Regulatory
 
Matters,
 
Commitments
 
and
 
Contingencies,”
 
to
 
the
 
unaudited
consolidated financial statements herein, which is incorporated by reference
 
in this Part II, Item 1.
ITEM 1A.
 
RISK FACTORS
The Corporation’s business, operating results and/or the market price of our common stock may be significantly affected by a number of
factors. A detailed
 
discussion of certain
 
risk factors that
 
could affect
 
the Corporation’s future
 
operations, financial
 
condition or results
 
for
future periods is set forth in Part I, Item 1A, “Risk Factors,” in the 2024 Annual Report on Form 10-K. These risk factors, and others, could
cause actual
 
results to
 
differ materially
 
from historical
 
results or
 
the results
 
contemplated by
 
the forward-looking statements
 
contained in
this report. Also,
 
refer to the
 
discussion in
 
“Forward-Looking Statements” and
 
Part I, Item
 
2, “Management’s
 
Discussion and
 
Analysis of
Financial Condition and Results
 
of Operations,” in this Quarterly
 
Report on Form 10-Q for
 
additional information that may supplement
 
or
update the discussion of risk factors in the
 
2024 Annual Report on Form 10-K.
There have been no material changes from those risk factors previously disclosed in Part I, Item 1A., “Risk Factors,” in the 2024 Annual
Report on Form 10-K.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
122
ITEM 2.
 
UNREGISTERED
 
SALES OF
 
EQUITY SECURITIES
 
AND USE OF
 
PROCEEDS
The Corporation did not have any unregistered sales
 
of equity securities during the quarter ended June
 
30, 2025.
Issuer Purchases of Equity Securities
The following
 
table provides
 
information in
 
relation to
 
the Corporation’s purchases
 
of its common
 
stock during
 
the quarter ended
 
June
30, 2025.
Period
Total Number of Shares
Purchased
 
Average Price
Paid per Share
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs (1)
Approximate Dollar Value
of Shares that May Yet
 
be
Purchased Under the Plans
or Programs (in
thousands) (1)
April 1, 2025 - April 30, 2025
1,555,174
$
17.80
1,555,174
$
100,012
May 1, 2025 - May 31, 2025
34,314
20.12
28,557
99,443
June 1, 2025 - June 30, 2025
260
20.83
-
88,300
Total
1,589,748
(2) (3)
1,583,731
(1)
As of
 
June 30,
 
2025, the
 
Corporation was
 
authorized to
 
purchase up
 
to $250
 
million that
 
could include
 
repurchases of
 
common stock
 
and/or junior
 
subordinated debentures
 
under the
program that
 
was publicly
 
announced on
 
July 22,
 
2024. During
 
the second
 
quarter of
 
2025, the
 
Corporation repurchased
 
approximately $28.2
 
million in
 
common stock
 
and redeemed
$11.1 million
 
of junior subordinated
 
debentures, as
 
further explained
 
in Note
 
6 - “Non-Consolidated
 
Variable
 
Interest Entities
 
(“VIEs”) and
 
Servicing Assets.”
 
The repurchase
 
program
does not obligate it
 
to acquire any
 
specific number of
 
shares and does
 
not have an expiration
 
date. The repurchase
 
program may be
 
modified, suspended, or
 
terminated at any
 
time at the
Corporation’s
 
discretion.
 
Repurchases
 
under
 
the program
 
may be
 
executed
 
through
 
open market
 
purchases,
 
accelerated
 
share repurchases,
 
privately
 
negotiated
 
transactions,
 
or plans,
including plans complying with Rule 10b5-1 under the Exchange
 
Act, and/or redemption of junior subordinated debentures.
(2)
Includes 1,583,731 shares of common stock repurchased in the open
 
market at an average price of $17.84 for a total purchase price
 
of approximately $28.2 million.
(3)
Includes 6,017 shares
 
of common stock
 
acquired by the
 
Corporation to cover
 
minimum tax withholding
 
obligations upon the
 
vesting of equity-based
 
awards. The Corporation
 
intends to
continue to satisfy statutory tax withholding obligations in connection
 
with the vesting of outstanding restricted stock and
 
performance units through the withholding of shares.
ITEM 5.
 
OTHER INFORMATION
During the quarter ended June 30, 2025, none of the Corporation’s
 
directors or officers (as defined in Rule 16a-1(f) of the Exchange
Act)
adopted
 
or
terminated
 
a
 
“Rule
 
10b5-1
 
trading
 
arrangement”
 
or
“non-Rule
10b5-1
 
trading
 
arrangement,”
 
as
 
those
 
terms
 
are
defined in Item 408 of Regulation S-K.
 
 
 
 
123
ITEM 6.
 
EXHIBITS
 
See the Exhibit Index below, which is incorporated by
 
reference herein:
 
EXHIBIT INDEX
 
Exhibit No.
Description
10.1
Professional Services Agreement, as of May 16, 2025, by and between Cassan Pancham and FirstBank Puerto Rico,
incorporated by reference to Exhibit 10.1 of the Corporation’s Current Report on Form 8-K/A filed on May 16, 2025
31.1
CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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
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
101.INS
Inline XBRL Instance Document, filed herewith. The
 
instance document does not appear in the interactive
 
data file because
its XBRL tags are embedded within the inline XBRL
 
document.
101.SCH
Inline XBRL Taxonomy Extension Schema Document, filed herewith
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document, filed herewith
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document, filed herewith
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document, filed herewith
101.DEF
Inline XBRL Taxonomy Extension Definitions Linkbase Document, filed herewith
104
The cover page of First BanCorp. Quarterly Report on Form 10-Q
 
for the quarter ended June 30, 2025, formatted in Inline
XBRL (included within the Exhibit 101 attachments)
 
 
 
124
SIGNATURES
Pursuant to
 
the requirements
 
of the
 
Securities Exchange
 
Act of
 
1934, the
 
Corporation has
 
duly caused
 
this report
 
to be
 
signed on
 
its
behalf by the undersigned hereunto duly authorized:
 
First BanCorp.
Registrant
Date:
 
August 7, 2025
By:
 
/s/ Aurelio Alemán
 
Aurelio Alemán
 
President and Chief Executive Officer
Date: August 7, 2025
By:
 
/s/ Orlando Berges
 
Orlando Berges
 
Executive Vice President and Chief Financial Officer

Source: View Original Filing on SEC EDGAR

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First Bancorp P R

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FBP Latest News

Jul 22, 2025
First BanCorp. Announces Earnings for the Quarter Ended June 30, 2025
Jul 21, 2025
First Bancorp Declares Quarterly Cash Dividend on Common Stock
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First BanCorp. Declares Quarterly Cash Dividend on Common Stock
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FBP Latest SEC Filings

Jul 22, 2025
[8-K] First BanCorp. Reports Material Event
Jul 2, 2025
[144] First BanCorp. SEC Filing

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