First BanCorp. Announces Earnings for the Quarter Ended March 31, 2024

First BanCorp. (the “Corporation” or “First BanCorp.”) (NYSE: FBP), the bank holding company for FirstBank Puerto Rico (“FirstBank” or “the Bank”), today reported a net income of $73.5 million, or $0.44 per diluted share, for the first quarter of 2024, compared to $79.5 million, or $0.46 per diluted share, for the fourth quarter of 2023, and $70.7 million, or $0.39 per diluted share, for the first quarter of 2023.

Results for First Quarter of 2024 compared to Fourth Quarter 2023

NON-GAAP DISCLOSURES

This press release contains GAAP financial measures and non-GAAP financial measures. Non-GAAP financial measures are used when management believes that the presentation of these non-GAAP financial measures enhances the ability of analysts and investors to analyze trends in the Corporation’s business and understand the performance of the Corporation. The Corporation may utilize these non-GAAP financial measures as guides in its budgeting and long-term planning process. Where non-GAAP financial measures are used, the most comparable GAAP financial measure, as well as the reconciliation of the non-GAAP financial measure to the most comparable GAAP financial measure, can be found in the text or in the tables in or attached to this press release. Any analysis of these non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP.

Certain non-GAAP financial measures, such as adjusted net income and adjusted earnings per diluted share, adjusted pre-tax, pre-provision income, adjusted non-interest expenses, and adjusted efficiency ratio exclude the effect of items that management believes are not reflective of core operating performance (the “Special Items”). Other non-GAAP financial measures include adjusted net interest income and adjusted net interest income margin, tangible common equity, tangible book value per common share, and certain capital ratios. These measures should be read in conjunction with the accompanying tables (Exhibit A), which are an integral part of this press release, and the Corporation’s other financial information that is presented in accordance with GAAP.

Special Items

The financial results for the first quarter of 2024 and fourth quarter of 2023 included the following Special Item:

FDIC Special Assessment Expense

On November 16, 2023, the FDIC approved a final rule to implement a special assessment to recover the loss to the Deposit Insurance Fund associated with protecting uninsured deposits following certain financial institution failures during the first half of 2023. Under the final rule, the FDIC will collect the special assessment at a quarterly rate of 3.36 basis points to be applied to the special assessment base during an eight-quarter collection period. The base for the special assessment is equal to the estimated uninsured deposits reported for the December 31, 2022 reporting period, adjusted to exclude the first $5 billion of such amount. As such, during the fourth quarter of 2023, the Corporation recorded a charge of $6.3 million ($3.9 million after-tax, calculated based on the statutory tax rate of 37.5%).

Under the final rule, the FDIC retains the ability to cease collection early, extend the special assessment collection period, or impose an additional shortfall special assessment on a one-time basis after the receiverships of the two failed institutions are terminated. During the first quarter of 2024, the FDIC informed that the estimated loss attributable to the protection of uninsured depositors of the financial institution failures increased, when compared with the estimate described in the final rule. As such, the Corporation recorded a $0.9 million ($0.6 million after-tax, calculated based on the statutory tax rate of 37.5%) additional expense to increase the estimated FDIC special assessment to $7.3 million.

The FDIC special assessment is reflected in the condensed consolidated statements of income as part of “FDIC deposit insurance” expenses.

Non-GAAP Financial Measures

Adjusted Pre-Tax, Pre-Provision Income

Adjusted pre-tax, pre-provision income is a non-GAAP performance metric that management uses and believes that investors may find useful in analyzing underlying performance trends, particularly in times of economic stress, including as a result of natural catastrophes or health epidemics. Adjusted pre-tax, pre-provision income, as defined by management, represents income before income taxes adjusted to exclude the provisions for credit losses on loans, unfunded loan commitments and debt securities and any gains or losses on sales of investment securities. In addition, from time to time, earnings are also adjusted for certain items that management believes are not reflective of core operating performance, which are regarded as Special Items.

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. 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 assets divided by common shares outstanding. Refer to the Tangible Common Equity section for a reconciliation of the Corporation’s tangible common equity and tangible assets to the most comparable GAAP items. 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 disclosure 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.

Net Interest Income 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. Refer to Exhibit A hereto for a reconciliation of the Corporation’s net interest income to adjusted net interest income excluding valuations, and on a tax-equivalent basis. 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 management believes facilitates comparison of results to the results of peers.

NET INCOME AND RECONCILIATION TO ADJUSTED NET INCOME (NON-GAAP)

Net income was $73.5 million for the first quarter of 2024, or $0.44 per diluted share, compared to $79.5 million, or $0.46 per diluted share, for the fourth quarter of 2023. The following table reconciles, for the first quarter of 2024 and fourth quarter of 2023, net income to adjusted net income and adjusted earnings per diluted share, which are non-GAAP financial measures that exclude the significant Special Item identified above, and shows, for the first quarter of 2023, net income and earnings per diluted share.

INCOME BEFORE INCOME TAXES AND RECONCILIATION TO ADJUSTED PRE-TAX, PRE-PROVISION INCOME (NON-GAAP)

Income before income taxes was $97.4 million for the first quarter of 2024, compared to $84.9 million for the fourth quarter of 2023. Adjusted pre-tax, pre-provision income was $110.5 million for the first quarter of 2024, compared to $110.0 million for the fourth quarter of 2023. The following table reconciles income before income taxes to adjusted pre-tax, pre-provision income for the last five quarters:

NET INTEREST INCOME

The following table sets forth information concerning net interest income for the last five quarters:

Net interest income amounted to $196.5 million for the first quarter of 2024, a decrease of $0.2 million, compared to $196.7 million for the fourth quarter of 2023, which includes a net reduction of approximately $1.1 million associated with the effect of one less day in the first quarter of 2024. The decrease in net interest income reflects the following:

Net interest margin for the first quarter of 2024 was 4.16%, a 2 basis points increase when compared to the fourth quarter of 2023, mostly reflecting a change in asset mix from lower-yielding interest-earning assets to higher-yielding interest-earning assets, partially offset by an increase in the cost of interest-bearing deposits.

NON-INTEREST INCOME

The following table sets forth information concerning non-interest income for the last five quarters:

Non-interest income increased by $0.4 million to $34.0 million for the first quarter of 2024, compared to $33.6 million for the fourth quarter of 2023, mainly due to:

NON-INTEREST EXPENSES

The following table sets forth information concerning non-interest expenses for the last five quarters:

Non-interest expenses amounted to $120.9 million in the first quarter of 2024, a decrease of $5.7 million, from $126.6 million in the fourth quarter of 2023. Non-interest expenses for the first quarter of 2024 and fourth quarter of 2023 include the aforementioned FDIC special assessment expense of $0.9 million and $6.3 million, respectively. On a non-GAAP basis, excluding the effect of this Special Item, adjusted non-interest expenses decreased by $0.3 million mainly due to:

INCOME TAXES

The Corporation recorded an income tax expense of $23.9 million for the first quarter of 2024, compared to $5.4 million for the fourth quarter of 2023. The fourth quarter of 2023 included a reduction in the effective tax rate for the year related to higher than previously forecasted business activities during the fourth quarter with preferential tax treatment under the Puerto Rico tax code, coupled with a lower pre-tax income.

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 24.3% for the first quarter of 2024, compared to 23.5% for the fourth quarter of 2023. As of March 31, 2024, the Corporation had a deferred tax asset of $147.7 million, net of a valuation allowance of $140.1 million against the deferred tax assets.

CREDIT QUALITY

Non-Performing Assets

The following table sets forth information concerning non-performing assets for the last five quarters:

Variances in credit quality metrics:

Early Delinquency

Total loans held for investment in early delinquency (i.e., 30-89 days past due accruing loans, as defined in regulatory reporting instructions) amounted to $133.7 million as of March 31, 2024, a decrease of $17.1 million, compared to $150.8 million as of December 31, 2023. The variances by major portfolio categories are as follows:

Allowance for Credit Losses

The following table summarizes the activity of the ACL for on-balance sheet and off-balance sheet exposures during the first quarter of 2024 and fourth quarter of 2023:

The main variances of the total ACL by main categories are discussed below:

Allowance for Credit Losses for Loans and Finance Leases

As of March 31, 2024, the ACL for loans and finance leases was $263.6 million, an increase of $1.8 million, from $261.8 million as of December 31, 2023. The ratio of the ACL for loans and finance leases to total loans held for investment was 2.14% as of March 31, 2024, compared to 2.15% as of December 31, 2023. The ratio of the total ACL for loans and finance leases to nonaccrual loans held for investment was 283.54% as of March 31, 2024, compared to 312.81% as of December 31, 2023.

The ACL for commercial and construction loans increased by $1.9 million to $73.3 million as of March 31, 2024, when compared to December 31, 2023, mainly due to increased volume, particularly in the commercial and industrial loan portfolio, coupled with a deterioration on the economic outlook of certain macroeconomic variables.

The ACL for consumer loans increased by $0.6 million mainly due to increases in historical charge-off levels, mainly in credit cards, and increases in portfolio volumes in the auto loan and finance leases portfolios. Such increase was partially offset by updated macroeconomic variables, mainly in the projection of unemployment rates across all regions.

Meanwhile, the ACL for residential mortgage loans decreased by $0.7 million, mainly due to updated macroeconomic variables, mainly in the projection of unemployment rates, partially offset by newly originated loans that have a longer life.

The provision for credit losses on loans and finance leases was $12.9 million for the first quarter of 2024, compared to $19.0 million in the fourth quarter of 2023.

Net Charge-Offs

The following table presents ratios of annualized net charge-offs (recoveries) to average loans held-in-portfolio for the last five quarters:

The ratios above are based on annualized net charge-offs and are not necessarily indicative of the results expected in subsequent periods.

Net charge-offs were $11.2 million for the first quarter of 2024, or an annualized 0.37% of average loans, compared to $20.8 million, or an annualized 0.69% of average loans, in the fourth quarter of 2023. The $9.6 million decrease in net charge-offs was mainly driven by a $9.5 million recovery associated with the aforementioned bulk sale of fully charged-off consumer loans during the first quarter of 2024, which reduced the total net charge-offs ratio by 31 basis points, and a $5.0 million recovery associated with a commercial and industrial loan in the Puerto Rico region, partially offset by an increase in consumer loans charge-offs reflected in the auto loans, finance leases and credit cards portfolios.

Allowance for Credit Losses for Unfunded Loan Commitments

As of March 31, 2024, the ACL for off-balance sheet credit exposures increased to $4.9 million, compared to $4.6 million as of December 31, 2023

Allowance for Credit Losses for Debt Securities

As of March 31, 2024, the ACL for debt securities was $1.6 million, of which $1.2 million related to Puerto Rico municipal bonds classified as held-to-maturity, compared to $2.7 million and $2.2 million, respectively, as of December 31, 2023.

LIQUIDITY

Cash and cash equivalents increased by $21.4 million to $684.5 million as of March 31, 2024. When adding $2.0 billion of free high-quality liquid securities that could be liquidated or pledged within one day, total core liquidity amounted to $2.7 billion as of March 31, 2024, or 14.45% of total assets, compared to $2.8 billion, or 14.93% of total assets as of December 31, 2023. In addition, as of March 31, 2024, the Corporation had $972.5 million available for credit with the FHLB based on the value of collateral pledged with the FHLB. As such, the basic liquidity ratio (which includes cash, free high-quality liquid assets such as U.S. government and government-sponsored enterprises’ obligations that could be liquidated or pledged within one day, and available secured lines of credit with the FHLB to total assets) was approximately 19.60% as of March 31, 2024, compared to 19.82% as of December 31, 2023.

In addition to the aforementioned available credit from the FHLB, the Corporation also maintains borrowing capacity at the FED Discount Window Program. The Corporation does not consider borrowing capacity from the FED Discount Window as a primary source of liquidity but had approximately $1.6 billion available for funding under the FED’s Borrower-In-Custody (“BIC”) Program as of March 31, 2024. Also, the Corporation has access to financing with other counterparties through repurchase agreements. Combined, as of March 31, 2024, the Corporation had $5.4 billion, or 121% of estimated uninsured deposits (excluding fully collateralized government deposits), available to meet liquidity needs.

The Corporation’s total deposits, excluding brokered CDs, amounted to $15.8 billion as of each of March 31, 2024 and December 31, 2023, which includes government deposits of $3.2 billion that are fully collateralized. Excluding fully collateralized government deposits and FDIC-insured deposits, as of March 31, 2024, the estimated amount of uninsured deposits amounted to $4.4 billion, which represent 27.93% of total deposits, compared to $4.4 billion, or 28.13% of total deposits, as of December 31, 2023. Refer to Table 10 in the accompanying tables (Exhibit A) for additional information about the deposits composition.

STATEMENT OF FINANCIAL CONDITION

Total assets were approximately $18.9 billion as of March 31, 2024, down $18.6 million from December 31, 2023.

The following variances within the main components of total assets are noted:

• A $21.4 million increase in cash and cash equivalents, related to the cash flows from the investment securities portfolio, partially offset by loan growth, the repurchases of common stock, and the payment of common stock dividends.

• A $185.0 million decrease in investment securities, mainly driven by principal repayments of $171.5 million, which include scheduled repayments of $91.4 million and maturities of $80.1 million, and a $15.1 million decrease in the fair value of available-for-sale debt securities attributable to changes in market interest rates.

• A $130.7 million increase in total loans. The variance consisted of increases of $80.9 million in the Florida region and $50.1 million in the Puerto Rico region, partially offset by a decrease of $0.3 million in the Virgin Islands region. On a portfolio basis, the variance consisted of increases of $123.9 million in commercial and construction loans, and $22.2 million in consumer loans, primarily auto loans and finance leases, partially offset by a $15.4 million decrease in residential mortgage loans. The growth of $56.8 million in commercial and industrial loans was mainly in the Puerto Rico region driven by increased lines of credit utilization and the origination of two term loans, which includes the origination of a $13.6 million loan to a municipality in Puerto Rico, partially offset by multiple payoffs and paydowns. In addition, the growth of $44.6 million in commercial mortgage loans was driven by the origination of three term loans in the Florida region, each in excess of $10 million, with an aggregate balance of $52.3 million.
  
  
  
  Total loan originations, including refinancings, renewals, and draws from existing commitments (excluding credit card utilization activity), amounted to $1.1 billion in the first quarter of 2024, a decrease of $214.9 million compared to the fourth quarter of 2023. The variances by geography and portfolio basis follow:
  
  
  
  Total loan originations in the Puerto Rico region amounted to $807.5 million in the first quarter of 2024, a decrease of $254.5 million, compared to $1.1 billion in the fourth quarter of 2023. The $254.5 million decline in total loan originations consisted of decreases of $209.9 million in commercial and construction loans, $31.1 million in consumer loans and $13.5 million in residential mortgage loans. The decrease in commercial and construction loans was mainly driven by the $150.0 million commercial and industrial participated loan funded in the fourth quarter of 2023 in connection with the financial closing of a public-private partnership (P3) for improvement of infrastructure for toll roads.
  
  
  
  Total loan originations in the Virgin Islands region amounted to $19.1 million in the first quarter of 2024, compared to $19.5 million in the fourth quarter of 2023. The $0.4 million decline in total loan originations consisted of decreases of $1.3 million in consumer loans and $0.2 million in commercial and construction loans, partially offset by a $1.1 million increase in residential mortgage loans.
  
  
  
  Total loan originations in the Florida region amounted to $260.4 million in the first quarter of 2024, compared to $220.4 million in the fourth quarter of 2023. The $40.0 million growth in total loan originations was mainly due to a $41.4 million increase in commercial and construction loans, principally in commercial mortgage loans, mainly due to the aforementioned origination during the first quarter of 2024 of three large relationships each over $10 million with an aggregate balance of $52.3 million.

Total liabilities were approximately $17.4 billion as of March 31, 2024, a decrease of $0.7 million from December 31, 2023.

• Total deposits decreased $10.4 million consisting of:
  • A $57.6 million decrease in brokered CDs. The decline reflects maturing short-term brokered CDs amounting to $195.4 million with an all-in cost of 5.42% that were paid off during the first quarter of 2024, partially offset by $138.0 million of new issuances with original average maturities of approximately 2 years and an all-in cost of 4.79%.
  • A $25.8 million decrease in deposits, excluding brokered CDs and government deposits, reflecting a decline of $28.3 million in the Florida region, partially offset by increases of $1.3 million in the Virgin Islands region, and $1.2 million in the Puerto Rico region. The decrease in such deposits is net of a $93.9 million increase in time deposits.
  • A $73.0 million increase in government deposits, which includes increases of $56.8 million in the Puerto Rico region, $14.2 million in the Virgin Islands region, and $2.0 million in the Florida region.

Total stockholders’ equity amounted to $1.5 billion as of March 31, 2024, a decrease of $17.9 million from December 31, 2023, mainly driven by a $50.0 million in stock repurchases under the 2023 capital plan authorization of $225 million, $26.9 million in common stock dividends declared in the first quarter of 2024, and a $15.1 million decrease 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, partially offset by net income generated in the first quarter of 2024.

As of March 31, 2024, capital ratios exceeded the required regulatory levels for bank holding companies and well-capitalized banks. The Corporation’s estimated CET1 capital, tier 1 capital, total capital and leverage ratios under the Basel III rules were 15.90%, 15.90%, 18.36%, and 10.65%, respectively, as of March 31, 2024, compared to CET1 capital, tier 1 capital, total capital, and leverage ratios of 16.10%, 16.10%, 18.57%, and 10.78%, respectively, as of December 31, 2023.

Meanwhile, estimated CET1 capital, tier 1 capital, total capital and leverage ratios of our banking subsidiary, FirstBank, were 16.12%, 16.89%, 18.15%, and 11.31%, respectively, as of March 31, 2024, compared to CET1 capital, tier 1 capital, total capital and leverage ratios of 16.33%, 17.11%, 18.36%, and 11.45%, respectively, as of December 31, 2023.

Tangible Common Equity (Non-GAAP)

On a non-GAAP basis, the Corporation’s tangible common equity ratio decreased to 7.59% as of March 31, 2024, compared to 7.67% as of December 31, 2023.

The following table presents a reconciliation of the Corporation’s tangible common equity and tangible assets to the most comparable GAAP items as of the indicated dates:

Exposure to Puerto Rico Government

As of March 31, 2024, the Corporation had $313.7 million of direct exposure to the Puerto Rico government, its municipalities, and public corporations, an increase of $15.8 million when compared to $297.9 million as of December 31, 2023, mainly due to the origination of a $13.6 million loan to a municipality in Puerto Rico that is supported by assigned property tax revenues. As of March 31, 2024, approximately $202.9 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 $59.2 million consisted of loans and obligations which are supported by one or more specific sources of municipal revenues. The Corporation’s total direct exposure to the Puerto Rico government also included $8.9 million in a loan extended to an affiliate of the Puerto Rico Electric Power Authority and $39.6 million in loans to agencies of Puerto Rico public corporations. In addition, the total direct exposure included an obligation of the Puerto Rico government, specifically a residential pass-through MBS issued by the PRHFA, at an amortized cost of $3.1 million (fair value of $1.6 million as of March 31, 2024), included as part of the Corporation’s available-for-sale debt securities portfolio. This residential pass-through MBS issued by the PRHFA is collateralized by certain second mortgages and had an unrealized loss of $1.6 million as of March 31, 2024, of which $0.3 million is due to credit deterioration.

The aforementioned exposure to municipalities in Puerto Rico included $107.1 million of financing arrangements with Puerto Rico municipalities that were issued in bond form but underwritten as loans with features that are typically found in commercial loans. These bonds are accounted for as held-to-maturity debt securities.

As of March 31, 2024, the Corporation had $2.8 billion of public sector deposits in Puerto Rico, compared to $2.7 billion as of December 31, 2023. Approximately 20% of the public sector deposits as of March 31, 2024, were from municipalities and municipal agencies in Puerto Rico, and 80% were from public corporations, the Puerto Rico central government and agencies, and U.S. federal government agencies in Puerto Rico.

Conference Call / Webcast Information

First BanCorp.’s senior management will host an earnings conference call and live webcast on Tuesday, April 23, 2024, at 10:00 a.m. (Eastern Time). The call may be accessed via a live Internet webcast through the Corporation’s investor relations website, fbpinvestor.com, or through a dial-in telephone number at (833) 470-1428 or (404) 975-4839 for international callers. The participant access code is 829649. The Corporation recommends that listeners go to the web site at least 15 minutes prior to the call to download and install any necessary software. Following the webcast presentation, a question and answer session will be made available to research analysts and institutional investors. A replay of the webcast will be archived in the Corporation’s investor relations website, fbpinvestor.com, until April 23, 2025. A telephone replay will be available one hour after the end of the conference call through May 23, 2024, at (866) 813-9403. The replay access code is 838187.

Safe Harbor

This press release may contain “forward-looking statements” concerning the Corporation’s future economic, operational, and financial performance. The words or phrases “expect,” “anticipate,” “intend,” “should,” “would,” “will,” “plans,” “forecast,” “believe,” and similar expressions are meant to identify “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created by such sections. The Corporation cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of 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, including, but not limited to, the uncertainties more fully discussed in Part I, Item 1A, “Risk Factors” of the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report on Form 10-K”), and the following, could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements: the effect of the current interest rate environment and inflation levels or changes in interest rates 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; the effects of changes in the interest rate environment, including any adverse change in the Corporation’s ability to attract and retain clients and gain acceptance from current and prospective customers for new products and services, including those related to the offering of digital banking and financial services; volatility in the financial services industry, including failures or rumored failures of other depository institutions, and actions taken by governmental agencies to stabilize the financial system, 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 and monetary policies and regulations of the U.S. federal government, the Puerto Rico government and other governments, including those determined by the Federal Reserve Board, the Federal Reserve Bank of New York, the FDIC, government-sponsored housing agencies and regulators in Puerto Rico, the U.S., and the U.S. and British Virgin Islands, that may affect the future results of the Corporation; uncertainty as to the ability of FirstBank to retain its core deposits and generate sufficient cash flow through its wholesale funding sources, such as securities sold under agreements to repurchase, FHLB advances, and brokered CDs, which may require us to sell investment securities at a loss; adverse changes in general economic conditions in Puerto Rico, the U.S., and the U.S. and British Virgin Islands, including in the interest rate environment, unemployment rates, market liquidity, 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 existent or planned strategic growth opportunities, including risks, uncertainties, and other factors or events related to any business acquisitions, dispositions, strategic partnerships, strategic operational investments and any anticipated efficiencies or other expected results related thereto; uncertainty as to the implementation of the debt restructuring plan of Puerto Rico and the fiscal plan for Puerto Rico as certified on April 3, 2023, by the oversight board established by the Puerto Rico Oversight, Management, and Economic Stability Act, or any revisions to it, on our clients and loan portfolios, and any potential impact from future economic or political developments and tax regulations in Puerto Rico; the impact of changes in accounting standards, or assumptions in applying those standards, and of forecasts of economic variables considered for the determination of the 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 make dividends to the Corporation; environmental, social, and governance (“ESG”) matters, including our climate-related initiatives and commitments; the impacts of natural or man-made disasters, the emergence or continuation of widespread health emergencies, geopolitical conflicts (including sanctions, war or armed conflict, such as the ongoing conflict in Ukraine, the conflict between Israel and Hamas, and the possible expansion of such conflicts in surrounding areas and potential geopolitical consequences), 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 the downgrade of the U.S.’s Long-Term Foreign-Currency Issuer Rating to ‘AA+’ from ‘AAA’ in August 2023 and subsequent negative ratings outlooks; the impacts of applicable legislative, tax, or regulatory changes, as well as of the 2024 U.S. and Puerto Rico general election, 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 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, 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.

About First BanCorp.

First BanCorp. is the parent corporation of FirstBank Puerto Rico, a state-chartered commercial bank with operations in Puerto Rico, the U.S., and the British Virgin Islands and Florida, and of FirstBank Insurance Agency. First BanCorp.’s shares of common stock trade on the New York Stock Exchange under the symbol FBP. Additional information about First BanCorp. may be found at www.1firstbank.com.

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EXHIBIT A

Table 1 – Condensed Consolidated Statements of Financial Condition

Table 2 – Condensed Consolidated Statements of Income

Table 3 – Selected Financial Data