FIRST BANCORP /PR/

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM10-K (Mark one)

[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT

OF 1934

For the Fiscal Year EndedDecember 31, 2024 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 NUMBER001-14793

FIRST BANCORP.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Puerto Rico66-0561882 (State or other jurisdiction of(I.R.S. Employer incorporation or organization)Identification No.)

1519 Ponce de León Avenue,Stop 2300908 San Juan,Puerto Rico(Zip Code)

(Address of principal executive office)

Registrant’s telephone number, including area code:

(787)729-8200

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered Common Stock ($0.10 par value)FBPNew York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes☑No☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes☐No☑ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes☑No☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).Yes☑No☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☑Accelerated filer☐ ☐Smaller reporting company☐ Emerging growth company☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act.☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.☑ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐No☑ The aggregate market value of the voting common equity held by non-affiliates of the registrant as of June 30, 2024 (the last trading day of the registrant’s most recently completed second fiscal quarter) was $2,867,797,634based on the closing price of $18.29 per share of the registrant’s common stock on the New York Stock Exchange on June 30, 2024. The registrant had no

nonvoting common equity outstanding as of June 30, 2024. For the purposes of the foregoing calculation only, the registrant has defined affiliates to include (a) the executive officers named in Part III of this Annual Report on Form 10-K; (b) all directors of the registrant; and (c) each shareholder, including the registrant’s employee benefit plans but excluding shareholders that file on Schedule 13G, known to the registrant to be the beneficial owner of 5% or more of the outstanding shares of common stock of the registrant as of June 30, 2024. The registrant’s response to this item is not intended to be an admission that any person is an affiliate of the registrant for any purposes other than this response.
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date:163,866,701shares as of February 21, 2025.
Portions of the definitive proxy statement relating to the registrant’s annual meeting of stockholders scheduled to be held on May 21, 2025 are incorporated by reference in response to Items 10, 11, 12, 13 and 14 of Part III of this Form 10-K.Documents incorporated by reference:

FIRST BANCORP.

2024 ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

PART I| Item 1. | Business | | 5 |
| --- | --- | --- | --- |
| Item 1A. | Risk Factors | | 21 |
| Item 1B. | Unresolved Staff Comments | | 34 |
| Item 1C. | Cybersecurity | | 34 |
| Item 2. | Properties | | 36 |
| Item 3. | Legal Proceedings | | 36 |
| Item 4. | Mine Safety Disclosures | | 36 |
| | | PART II | |

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
	Purchases of Equity Securities	37
Item 6.	[Reserved]	40
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	108
Item 8.	Financial Statements and Supplementary Data	109
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	226
Item 9A.	Controls and Procedures	226
Item 9B.	Other Information	226
Item 9C.	Disclosure regarding Foreign Jurisdictions that Prevent Inspections	226

PART III| Item 10. | Directors, Executive Officers and Corporate Governance | | 227 |
| --- | --- | --- | --- |
| Item 11. | Executive Compensation | | 227 |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | 227 |
| Item 13. | Certain Relationships and Related Transactions, and Director Independence | | 227 |
| Item 14. | Principal Accountant Fees and Services | | 228 |
| | | PART IV | |

Item 15.	Exhibits and Financial Statement Schedules	228
Item 16.	Form 10-K Summary	228
Exhibit Index
SIGNATURES

Forward-Looking Statements

This Annual Report on Form 10-K (this “Form 10-K”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended

(the “Exchange Act”), which are subject to the safe harbor created by such sections. When used in this Form 10-K or future filings by First BanCorp. (the “Corporation,” “we,” “us,” or “our”) with the U.S. Securities and Exchange Commission (the “SEC”), in the 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-K, the date hereof, and advises readers that any such forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, estimates, and assumptions by us that are difficult to predict . Various factors, some of which are beyond our control, could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements.

Factors that could cause results to differ materially from those expressed in, or implied by, the Corporation’s forward-looking statements include, but are not limited to, risks described or referenced in Part I, Item 1A, “Risk Factors,” and the following:

●the effect of changes in the interest rate environment and inflation levels on the level, composition and performance of the 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 and monetary policies and regulations of the United States (“U.S.”) federal government (including as a result of the new U.S. presidential administration), 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, 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 statesponsored 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;

●uncertainty as to the implementation of the debt restructuring plan of Puerto Rico (“Plan of Adjustment” or “PoA”) and the fiscal plan for Puerto Rico as certified on June 5, 2024 (the “2024 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 from 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, the reduction in staffing at U.S. governmental agencies, potential government shutdowns, and political impasses, including uncertainties regarding the U.S. debt ceiling and federal budget, as well as the new U.S. presidential administration and the new Puerto Rico government administration, 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.

PART I

Item 1.Business

GENERAL

First BanCorp. is a publicly owned financial holding company that is subject to regulation, supervision and examination by the Federal Reserve Board. The Corporation was incorporated under the laws of the Commonwealth of Puerto Rico in 1948 to serve as the bank holding company for FirstBank. Through its subsidiaries, including FirstBank, the Corporation provides full-service commercial and consumer banking services, mortgage banking services, automobile financing, insurance agency services, and other financial products and services in Puerto Rico, the U.S., the USVI and the BVI. As of December 31, 2024, the Corporation had total assets of $19.3 billion, including loans held for investment of $12.7 billion, total deposits of $16.9 billion, and total stockholders’ equity of $1.7 billion.

The Corporation has two wholly-owned subsidiaries: FirstBank and FirstBank Insurance Agency, Inc. (“FirstBank Insurance Agency”). FirstBank is a Puerto Rico-chartered commercial bank, and FirstBank Insurance Agency is a Puerto Rico-chartered insurance agency.

FirstBank is subject to the supervision, examination and regulation of both the Office of the Commissioner of Financial Institutions of Puerto Rico (“OCIF”) and the FDIC. Deposits are insured through the FDIC Deposit Insurance Fund (the “DIF”). In addition, within FirstBank, the Bank’s USVI operations are subject to regulation and examination by the USVI Division of Banking Insurance, and Financial Regulation; its BVI operations are subject to regulation by the BVI Financial Services Commission; and its operations in the state of Florida are subject to regulation and examination by the Florida Office of Financial Regulation. The Consumer Financial Protection Bureau (“CFPB”) regulates FirstBank’s consumer financial products and services. FirstBank Insurance Agency is subject to the supervision, examination and regulation of the Office of the Insurance Commissioner of the Commonwealth of Puerto Rico (the “Insurance Commissioner of Puerto Rico”) and the Division of Banking, Insurance and Financial Regulation in the USVI.

For a discussion of certain significant events that have occurred in the year ended December 31, 2024, please refer to “Significant Events” included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-K.

BUSINESS SEGMENTS

The Corporation has six reportable segments: Mortgage Banking; Consumer (Retail) Banking; Commercial and Corporate Banking;
Treasury and Investments; United States Operations; and Virgin Islands Operations. These segments are described below, as well as in Note 25 – “Segment Information” to the audited financial statements included in Part II, Item 8 of this Form 10-K.

Mortgage Banking

The Mortgage Banking segment consists of the origination, sale and servicing of a variety of residential mortgage loan products and related hedging activities in the Puerto Rico region. Originations are sourced through different channels, such as FirstBank branches

and purchases from mortgage bankers, and in association with new project developers. This segment focuses on originating residential real estate loans, including those that conform to the U.S. Federal Housing Administration (the “FHA”), the U.S. Veterans Administration (the “VA”) and the U.S. Department of Agriculture Rural Development (the “RD”) standards. Loans that meet FHA’s standards qualify for FHA’s insurance while loans that meetVAor the RD standards are guaranteed by the respective federal agencies.

Mortgage loans that do not qualify for the FHA, theVAor the RD programs are referred to as conventional loans which can be conforming or non-conforming. Conforming loans are those that meet the standards for sale under the U.S. Federal National Mortgage Association (“FNMA”) and the U.S. Federal Home Loan Mortgage Corporation (“FHLMC”) programs. Loans that do not meet FNMA or FHLMC standards are referred to as non-conforming residential real estate loans. The Mortgage Banking segment also

acquires and sells mortgages in the secondary market. Conforming residential real estate loans are sold to investors such as FNMA and FHLMC, and the Corporation has commitment authority to issue Government National Mortgage Association (“GNMA”)
mortgage-backed securities (“MBS”).

Consumer (Retail) Banking

The Consumer (Retail) Banking segment includes the Corporation’s consumer lending, commercial lending to small businesses, commercial transaction banking, and deposit-taking activities (other than those assigned to the Commercial and Corporate Banking segment) primarily conducted through FirstBank’s branch network, ATMs and online banking in the Puerto Rico region. Retail deposits gathered through each branch of FirstBank’s retail network serve as one of the funding sources for its lending and investment activities. Other activities included in this segment are insurance activities in the Puerto Rico region.

Commercial and Corporate Banking

The Commercial and Corporate Banking segment consists of the Corporation’s lending and other services for large customers represented by specialized and middle-market clients and the government sector in the Puerto Rico region. This segment consists of the Corporation’s commercial lending (other than small business commercial loans) and commercial deposit-taking activities (other than the government sector). A substantial portion of the commercial and corporate banking portfolio is secured by the underlying real estate collateral and the personal guarantees from the borrowers.

Treasury and Investments

and Corporate Banking, United States Operations, and Virgin Islands Operations segments to support their respective lending activities and by compensating these units for deposits gathered. The Treasury and Investments segment also obtains funding through brokered deposits, advances from the FHLB, and repurchase agreements involving investment securities, among other funding sources.

United States Operations

branches. This segment offers a variety of consumer and commercial banking products and services. Consumer banking products include checking, savings and money market accounts, retail CDs, internet banking services, residential mortgages, home equity loans, and lines of credit. Retail deposits, as well as FHLB advances and brokered CDs assigned to this segment, serve as funding sources for its lending activities.

Commercial banking services include checking, savings and money market accounts, retail CDs, internet banking services, cash management services, remote deposit capture, and automated clearing house (“ACH”) transactions. Loan products include the traditional commercial and industrial (“C&I”) and commercial real estate products, such as lines of credit, term loans and construction loans.

Virgin Islands Operations

The Virgin Islands Operations segment consists of all banking activities conducted by FirstBank in the USVI and BVI, including consumer and commercial banking services. This segment operates through eight banking branches serving in the USVI islands of St.
Thomas, St. Croix, and St. John, as well the island of Tortola in the BVI. This segment ’s primary business activities include consumer and commercial lending and deposit-taking activities. Retail deposits gathered through each branch serve as the primary funding sources for the segment’s lending activities.

CORPORATE SUSTAINABILITY PROGRAM OVERVIEW

The Corporation is committed to supporting its clients, employees, shareholders and communities it serves. Its Corporate Sustainability program, which includes environmental, social and governance (“ESG”) matters, builds on its core values, including being a socially responsible company. The Corporation sees effective ESG management as a critical step towards a sustainable, inclusive and successful future.

During 2021, the Corporation adopted an ESG framework through which it established and communicated its corporate sustainability strategy and overarching governance policy. In 2024, the Corporation continued evolving its Corporate Sustainability

program, including the publication of its annual First BanCorp. Corporate Sustainability Report for 2023 (the “2023 Report”). The 2023 Report disclosed information on a wide range of ESG topics, including governance and oversight; business ethics and compliance; responsible marketing and sales practices; sustainable and accessible finance; responsible banking, including details as to data security and cyber management; people and culture; community impact; and environmental stewardship.

ESG Governance

The Corporation’s Board of Directors and executive leadership team share responsibilities relating to oversight of its corporate sustainability policies and practices. In February 2022, the Corporate Governance and Nominating Committee of the Board of Directors amended its charter to include oversight responsibility of ESG matters, and it has primary oversight of ESG policies, practices and disclosures. Nonetheless, other committees of the Corporation’s Board of Directors also play a role in ESG oversight in matters related to risk and cybersecurity management, human capital management, and credit risk management.

As part of the ESG governance structure set forth in FirstBanCorp.’s Sustainability Policy, which was approved by the Corporation’s Board of Directors in 2022, the responsibility of day-to-day management of its ESG framework and strategy has been

delegated to a management-level Sustainability Committee, comprised of leaders from different areas, such as Human Resources, Enterprise Risk Management, Strategic Planning and Investor Relations, Legal and Corporate Affairs, Marketing, Compliance, Finance, and Corporate Internal Audit. The Sustainability Committee is tasked with aligning priorities and initiatives for the year, setting and monitoring long-term objectives and goals, and leading the annual reporting process on ESG related topics. The Sustainability Committee reports to the Corporate Governance and Nominating Committee of the Board of Directors.

HUMAN CAPITAL MANAGEMENT

First BanCorp. strives to be recognized as a leading and diversified financial institution, offering superior experience to our clients and employees. We believe that the key to our success is caring about our team as much as we care about our customers. Our goal is to be an employer of choice within our primary operating regions, which we believe is achieved and sustained by adding value to our employees’ lives and providing satisfying and evolving work experience. The core of our employer value proposition, “The Experience of Being 1,” is our commitment to our employees’ well-being, success, professional development, and work environment.

Employees

As of December 31, 2024, the Corporation and its subsidiaries had 3,113 regular employees representing a 2% decrease in overall headcount from December 31, 2023. The Corporation had 2,767 employees in the Puerto Rico region, 196 employees in the Florida region, and 150 employees in the Virgin Islands region. As of December 31, 2024, approximately 67% of the total employee population and 58% of management positions were women.

Oversight

Our Human Resources Division reports directly to the Corporation’s Chief Risk Officer and manages all elements of the Corporation’s human capital programs and strategies, including talent management, talent acquisition, engagement, learning and development, compensation and benefits.

The Human Resources Division’s efforts are also overseen by the Corporation’s Chief Executive Officer (“CEO”) and the executive management team through regular work-related interactions. Our leaders focus on strengthening employee management and engagement and maximizing collaboration between departments and talents by promoting an open-door culture that stimulates frequent communication between employees and management. This provides more opportunities to identify employees’ needs, obtain feedback about their work-life experience, and act upon such feedback to improve employee engagement. In addition, the Corporation’s Board of Directors and its Compensation and Benefits Committee monitor and are regularly updated on the Corporation’s human capital management strategies.

Talent Management

First BanCorp. is an equal opportunity employer which considers qualified candidates for employment to fill its open positions. We focus our efforts on attracting and retaining the best talent for the Corporation, including college graduates, and promoting internal mobility. The attraction and selection process includes:

●Promoting and posting our vacant positions internally and externally;

●Building our employer brand through social media and digital presence, participating in professional events and job fairs, and maintaining relationships with universities through internship programs and career forums;

●Collaboration with hiring managers to ensure an accurate match between roles and candidates to accelerate the recruitment process and attraction of top candidates with the right fit for the role;

●A robust management information system to enhance the effectiveness of the recruitment process and provide candidates with a unique experience; and

●A robust on-boarding process to engage and support new employees’induction process, including assignment of a “FirstPal” from day one to help with the organizational culture transition and learning process.

We believe that financial security is critical for our employees. Our goal is to maintain compensation levels that are competitive with the market and comparable job categories in similar organizations. Our salary administration program is designed to provide a compensation structure that is consistent with our employees’ level of responsibilities to attract the best talent for each job and commensurately pay for performance.

In addition to base salaries, some job positions are eligible to participate in variable pay programs. The Corporation has incentive programs for revenue generation and sales support business units. The incentive programs are reviewed annually to align them to business strategies and ensure sound risk management. Further, the Corporation’s Management Award Program recognizes and rewards outstanding performance for exempt employees who do not participate in other variable pay programs. The Corporation also has a long-term incentive plan for top-performing leaders and employees with high potential. These programs provide awards based upon the Corporation’s and individual’s performance and are key for the attraction and engagement of the best talent. The Corporation’s investment in its employees has resulted in a stable-tenured workforce, with an average tenure of 11 years of service as of December 31, 2024, and a voluntary turnover rate of 10.91%, mostly related to hourly employees in call centers, collections centers and branches. The Corporation measures turnover among high performers; such employees’ turnover rate was 3.6% for 2024.

Talent Development and Engagement

We believe that a culture of learning and development maximizes the talent of human capital and is the foundation for sustained business success. Our commitment to employee engagement continues throughout employees’ time with the Corporation.

Our learning and development program strives to reflect both employees’ and the organization’s needs. The Corporation offers training opportunities through online courses and in-person or virtual classes, as well as development activities, special projects, and partial tuition reimbursement to complete a bachelor’s or master's degree to eligible employees. Training is offered on various subjects within five areas: fundamentals, compliance and corporate governance, specialized technical subjects, soft skills-professional development, and leadership skills.

In 2024 we provided over 100 training topics through virtual and in-person modalities allowing our employees to continue learning and complete development plans. In 2024, we delivered more than 109,000 hours of training and employees completed an average of

31.33 training hours. Every year around 100 new and existing supervisors and managers receive training specialized in supervision and talent management. For new supervisors, we offer a development program intended to train in basic supervision, leadership, communication skills, and human resources policies and practices. In addition, our leadership curriculum continues to develop our supervisors and managers in their technical and people skills. The Leadership Development program encourages supervisors and managers to review their leadership skills with feedback received from instructors and co-workers. The program has been delivered to 63% of our current leaders since its launch.

In addition to these training opportunities, we have processes to promote professional development and career growth, including the promotion of internal career growth opportunities, performance management processes, annual talent review, and robust succession planning. We also encourage employees to participate in our commitment to our communities through our volunteer and community reinvestment programs. In 2024, our employees supported 39 organizations and participated in multiple corporate initiatives, contributing over 2,600 hours of volunteer work. The Bank also encourages its employees to serve on non-profit organizations’ boards

of directors. In 2024, First BanCorp employees were members of the board of directors for 41 non-profit organizations across the Puerto Rico, Florida, and Virgin Islands regions and offered approximately 3,310 hours of service.

Health & Wellness

Health and well-being programs are a strong component of the benefits we provide to our employees. First BanCorp. provides competitive benefits programs to address even the most pressing needs of our employees and their families to promote occupational,

physical, emotional, and financial health. Our comprehensive wellness package includes health, dental and vision insurance offered through different insurance company options that enable employees to choose those that best accommodate their and their families’ needs. We also offer life insurance and disability plans, as well as a defined contribution retirement plan option where both employee and employer contribute, and the employer make an additional true-up contribution for the Puerto Rico region. In addition, the Corporation offers a fitness facility in its main offices which allows employees to participate in fitness activities including instructorled wellness sessions. Additionally, in 2024 we included in-house chiropractic services and wellness tours to promote healthy lifestyle practices.

Work-life balance remains crucial; therefore, we offer various paid time off for vacation, sickness, maternity and paternity leave, bereavement, marriage, and personal days. Our wellness program includes in-house health services, nutrition, fitness, health fairs, personal finance education, preventive healthcare activities, and nursing services. The Corporation subsidizes a substantial portion of the cost of these benefits. Flexible work arrangements were implemented across the organization, including hybrid work arrangements.

MARKET AREA AND COMPETITION

The Corporation operates in highly competitive markets and is subject to significant business, economic and competitive uncertainties and contingencies. In particular, the banking market is highly competitive in Puerto Rico, the main geographic service area of the Corporation. As of December 31, 2024, the Corporation also had presence in the state of Florida and in the USVI and the BVI. Puerto Rico banks are subject to the same federal laws, regulations and supervision that apply to similar institutions on the United States mainland.

Competitors include other banks, insurance companies, mortgage banking companies, small loan companies, automobile financing companies, leasing companies, brokerage firms with retail operations, credit unions and certain retailers that operate in Puerto Rico, the USVI, the BVI, and the state of Florida, as well as financial technology (“fintech”) companies and emerging competition from digital platforms. The Corporation’s businesses compete with these other firms with respect to the range of products and services offered and the types of clients, customers and industries served.

See Part I, Item 1A, “Risk Factors” for further discussion of risks related to competition.

SUPERVISION AND REGULATION

The Corporation and FirstBank, its bank subsidiary, are subject to comprehensive federal and Puerto Rican supervision and regulation. These supervisory and regulatory requirements apply to all aspects of the Corporation’s and the Bank’s activities,

including commercial and consumer lending, deposit taking, management, governance and other activities. As part of this regulatory framework, the Corporation and the Bank are subject to extensive consumer financial regulatory legal and supervisory requirements.
Further, U.S. financial supervision and regulation is dynamic in nature, and supervisory and regulatory requirements are subject to change as new legislative and regulatory actions are taken. See Part I, Item 1, “Business–General” above for additional regulatory oversight and supervision of FirstBank Insurance Agency. Future legislation may increase the regulation and oversight of the Corporation and the Bank. Any change in applicable laws or regulations, however, may have a material adverse effect on the business of commercial banks and bank holding companies, including the Bank and the Corporation.

The Corporation is also subject to the disclosure and regulatory requirements of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, both as administered by the SEC, as well as the rules applicable to companies with securities listed on the New York Stock Exchange.

The following discussion summarizes certain laws, regulations and policies to which the Company is subject. It does not address all applicable laws, regulations and policies that affect the Company currently or might affect it in the future. This discussion is qualified in its entirety by reference to the full texts of the laws, regulations and policies described.

Bank Holding Company Activities and Other Limitations

The Corporation is registered under the Bank Holding Company Act of 1956, as amended (the “Bank Holding Company Act”), and is subject to ongoing supervision, regulation and examination by the Federal Reserve Board. The Corporation is required to file with the Federal Reserve Board periodic and annual reports and other information concerning its own business operations and those of its subsidiaries.

The Bank Holding Company Act also permits a bank holding company to elect to become a financial holding company and engage in a broader range of financial activities. The Corporation has elected to be a financial holding company under the Bank Holding

Company Act. Financial holding companies may engage, directly or indirectly, in any activity that is determined to be (i) financial in nature, (ii) incidental to such financial activity, or (iii) complementary to a financial activity and does not pose a substantial risk to the safety and soundness of depository institutions or the financial system generally. The Bank Holding Company Act specifically provides that the following activities have been determined to be “financial in nature”: (i) lending, trust and other banking activities;
(ii) insurance activities; (iii) financial or economic advice or services; (iv) pooled investments; (v) securities underwriting and dealing;
(vi) domestic activities permitted for an existing bank holding company; (vii) foreign activities permitted for an existing bank holding company; and (viii) merchant banking activities.

A financial holding company that ceases to meet certain standards is subject to a variety of restrictions, depending on the circumstances, including precluding the undertaking of new financial activities or the acquisition of shares or control of other

companies. Until compliance is restored, the Federal Reserve Board has broad discretion to impose appropriate limitations on the financial holding company’s activities. The Corporation and FirstBank must be “well-capitalized” and “well-managed” for regulatory purposes, and FirstBank must earn “satisfactory” or better ratings on its periodic Community Reinvestment Act (“CRA”)
examinations for the Corporation to preserve its financial holding company status.

Under federal law and Federal Reserve Board policy, a bank holding company such as the Corporation is expected to act as a source of strength to its banking subsidiaries and to commit required levels of support to them. This support may be required at times when, absent such policy, the bank holding company might not otherwise provide such support. In the event of a bank holding company’s bankruptcy, any commitment by the bank holding company to a federal bank regulatory agency to maintain capital of a subsidiary bank will be assumed by the bankruptcy trustee and be entitled to a priority of payment. In addition, any capital loans by a bank holding company to any of its subsidiary banks must be subordinated in right of payment to deposits and to certain other indebtedness of such subsidiary bank. As of December 31, 2024, and the date hereof, FirstBank was and is the only banking subsidiary of the Corporation.

State-Chartered Non-Member Bank and Banking Laws and Regulationsin General

FirstBank is subject to regulation and examination by the OCIF, the CFPB and the FDIC, and is subject to comprehensive federal and state (including, for this purpose, the Commonwealth of Puerto Rico) regulations that regulate, among other things, the scope of its businesses, its investments, its reserves against deposits, the timing and availability of deposited funds, and the nature and amount of collateral for certain loans.

The OCIF, the CFPB and the FDIC periodically examine FirstBank to test the Bank’s conformance to safe and sound banking practices and compliance with various statutory and regulatory requirements. This oversight establishes a comprehensive framework

of permissible activities, and the supervision by the FDIC is also intended for the protection of the FDIC’s insurance fund and depositors. These regulatory authorities have discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of adequate loan loss reserves for regulatory purposes. Their enforcement authority includes, among other things, the ability to assess civil monetary penalties, issue cease-and-desist or removal orders, and initiate injunctive actions against banking organizations and institution-affiliated parties. In general, these enforcement actions may be initiated for violations of laws and regulations and for engaging in unsafe or unsound practices. In addition, certain bank actions are required by statute and implementing regulations. Other actions or failure to act may provide the basis for enforcement action, including the filing of misleading or untimely reports with regulatory authorities.

Regulatory Capital Requirements

The federal banking agencies have implemented rules for U.S. banks that establish minimum regulatory capital requirements, the components of regulatory capital, and the risk-based capital treatment of bank assets and off-balance sheet exposures. These rules

currently apply to the Corporation and FirstBank, and generally are intended to align U.S. regulatory capital requirements with international regulatory capital standards adopted by the Basel Committee on Banking Supervision (“Basel Committee”), in particular, the international capital accord known as “Basel III.” The current rules require a minimum common equity capital requirement and an additional common equity Tier 1 capital conservation buffer.

Under the Basel III rules, the Corporation must maintain certain minimum capital ratios to be considered adequately capitalized and to avoid the regulatory limitations described above. These requirements include: (i) a minimum common equity Tier 1 Capital (“CET1”) ratio of 4.5%, plus the 2.5% capital conservation buffer ; (ii) a minimum Tier 1 capital ratio of 6.0%, plus the 2.5% capital conservation buffer; (iii) a minimum Total capital (Tier 1 plus Tier 2) ratio of 8.0%, plus the 2.5% capital conservation buffer; and (iv)
a required minimum leverage ratio (Tier 1 capital to average on-balance sheet non-risk adjusted assets) of 4%.

As part of regulatory relief measures in response to the impact of COVID-19, federal banking agencies issued an interim final rule on March 31, 2020, providing the option to temporarily delay the regulatory capital effects of current expected credit losses (“CECL”). Under this rule a two-year delay was permitted for the initial impact of CECL on retained earnings plus 25% of the change in the ACL (excluding purchased credit deteriorated (“PCD”) loans) from January 1, 2020 to December 31, 2021. Following the deferral period, the capital impact is phased-in over a three-year transition period, at a rate of 25% per year beginning January 1, 2022.
This results in a total transition period of five years. The Corporation and the Bank elected to phase in the full effect of CECL on regulatory capital under this transition framework.

The Corporation and the Bank compute risk-weighted assets using the Standardized Approach under Basel III. In addition, the Collins Amendment to the Dodd-Frank Act, among other things, introduced additional capital restrictions, including the phase out of

certain trust-preferred securities (“TRuPs”) from Tier 1 capital. Preferred securities issued under the U.S. Treasury’s Troubled Asset Relief Program (“TARP”) remain exempt from this phase out. Bank holding companies, including the Corporation, were required to fully phase out from Tier 1 capital the junior subordinated debentures that were issued to support TRuPs by January 1, 2016.
However, these instruments may continue to qualify as Tier 2 capital until they are redeemed or reach maturity. As of December 31, 2024, the Corporation had $59.9 million in junior subordinated debentures that were subject to a full phase-out from Tier 1 capital under the final Basel III capital rules.

The following table presents the Corporation's and FirstBank's regulatory capital ratios as of December 31, 2024, based on Federal Reserve and FDIC guidelines:| | | | | Banking Subsidiary | | |
| --- | --- | --- | --- | --- | --- | --- |
| | | | | | Well-Capitalized | |
| | | First BanCorp. | | FirstBank | Minimum | |
| As of December 31, 2024 | | | | | | |
| Total capital (Total capital to risk-weighted assets) | | | 18.02% | 17.76% | | 10.00% |
| CET1 Capital (CET1 capital to risk-weighted assets) | | | 16.32% | 15.76% | | 6.50% |
| Tier 1 capital ratio (Tier 1 capital to risk-weighted assets) | | | 16.32% | 16.51% | | 8.00% |
| Leverage ratio | (1) | | 11.07% | 11.20% | | 5.00% |
| ___(1) Tier 1 capital to average assets. | | | | | | |

Stress-Testing and Capital Planning Requirements

Federal regulations currently do not impose formal stress-testing requirements on banking organizations with total assets of less than $100 billion, such as the Corporation and FirstBank. The federal banking agencies have indicated through interagency guidance that the capital planning and risk management practices of institutions with total assets of less than $100 billion will continue to be reviewed through the regular supervisory process. Notwithstanding, the Corporation monitors its capital consistent with the safety and soundness expectations of the federal regulators and continues to perform internal stress testing as part of its annual capital planning process.

Dividend Restrictions

The Federal Reserve Board has a policy that, as a matter of prudent banking, a bank holding company should generally not pay cash dividends unless its net income available to common shareholders for the past four quarters, net of dividends previously paid during that period, has been sufficient to fully fund the dividends and the prospective rate of earnings retention appears to be consistent with the organization’s capital needs, asset quality, and overall current and prospective financial condition. Furthermore, the Federal Reserve Board’s regulatory capital rule (Regulation Q) limits the amount of capital a bank holding company may distribute under certain circumstances. A banking organization must maintain a capital conservation buffer of CET1 capital in an amount greater than 2.5% of total risk weighted assets to avoid being subject to limitations on capital distributions. The Corporation is also subject to certain restrictions generally imposed on Puerto Rico corporations with respect to the declaration and payment of dividends (i.e., that dividends may be paid out only from the Corporation’s capital surplus or, in the absence of such excess, from the Corporation’s net earnings for such fiscal year and/or the preceding fiscal year).

The principal source of funds for the Corporation, as a parent holding company, is dividends declared and paid by its subsidiary, FirstBank. The ability of FirstBank to declare and pay dividends on its capital stock is regulated by the Puerto Rico Banking Law of 1933, as amended (the “Puerto Rico Banking Law”), the Federal Deposit Insurance Act (the “FDIA”), and FDIC regulations. In general terms, the Puerto Rico Banking Law provides that when the expenditures of a bank are greater than receipts, the excess of expenditures over receipts shall be charged against undistributed profits of the bank and the balance, if any, shall be charged against the required reserve fund of the bank. If the reserve fund is not sufficient to cover such balance in whole or in part, the outstanding amount must be charged against the bank’s capital account. The Puerto Rico Banking Law provides that, until said capital has been restored to its original amount and the reserve fund to 20% of the original capital, the bank may not declare any dividends. In general, regulations of the FDIA and the FDIC restrict the payment of dividends when a bank is undercapitalized (as discussed in Prompt Corrective Action below), when a bank has failed to pay insurance assessments, or when there are safety and soundness concerns regarding such bank.

Refer to Part II, Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” of this Form 10-K for further information on the Corporation’s distribution of dividends and repurchases of common stock.

Consumer Financial Protection Bureau

The CFPB has primary examination and enforcement authority over FirstBank and other banks with over $10 billion in assets with respect to consumer financial products and services.

The CFPB’s primary functions include the supervision of “covered persons” (broadly defined to include any person offering or providing a consumer financial product or service and any affiliated service provider) for compliance with federal consumer financial

laws. It implements amendments to and has primary authority to enforce the federal consumer financial laws, including the Equal Credit Opportunity Act, the Truth in Lending Act (“TILA”) and the Real Estate Settlement Procedures Act (“RESPA”), among others.
The CFPB also has broad powers to prescribe rules applicable to a covered person or service provider in connection with any transaction with a consumer for a consumer financial product or service, or the offering of a consumer financial product or service.

Among other actions, the CFPB has issued regulations setting forth mortgage servicing rules that apply to the Bank, which affect consumer notices regarding delinquency, foreclosure alternatives, modification applications, interest rate adjustments and options for avoiding “force-placed” insurance. Further, the CFPB has adopted rules and forms that combine certain disclosures that consumers receive in connection with applying for and closing on a mortgage loan under the TILA and the RESPA.

The CFPB has been actively updating its regulations to address emerging issues in the consumer financial marketplace. This includes implementing new rules on personal financial data rights such as the Open Banking Rule finalized in October 2024, overdraft lending practices, and the use of artificial intelligence in credit decisions.

The Trump administration has advocated for reduction of financial services regulation. This may include structural changes to, or the elimination of, the CFPB. Consequently, rulemaking and regulatory guidance previously issued by the CFPB may be rolled back or modified. The ultimate impact of any changes to certain federal agencies, like the CFPB, is uncertain at this time.

The Volcker Rule

Section 13 of the Bank Holding Company Act (commonly known as the Volcker Rule), generally prohibits a banking entity such as the Corporation or the Bank from acquiring or retaining any ownership in, or acting as sponsor to, a hedge fund or private equity fund (“covered fund”). The Volcker Rule also prohibits these entities from engaging, for their own account, in short-term proprietary trading of certain securities, derivatives, commodity futures and options on these instruments.

The Corporation and the Bank are not engaged in “proprietary trading” as defined in the Volcker Rule. In addition, the Corporation has reviewed its investments and concluded that they are not considered covered funds under the Volcker Rule.

Community Reinvestment Act and Home Mortgage Disclosure Act Regulations

The CRA encourages banks to help meet the credit needs of the local communities in which they offer services, including low- and moderate-income individuals, consistent with the safe and sound operation of the bank.

The CRA requires the federal supervisory agencies, as part of the general examination of supervised banks, to assess a bank’s record of meeting the credit needs of its community, assign a performance rating, and take such record and rating into account in their evaluation of certain applications by such bank, such as an application for approval of a merger or the establishment of a branch. A rating of less than “satisfactory” could result in the denial of such applications. The CRA also requires all institutions to make public disclosure of their CRA ratings. FirstBank received a “satisfactory” CRA rating in its most recent examination by the FDIC.

In October 2023, the U.S. federal banking regulatory agencies issued a final rule to strengthen and modernize their regulations implementing the CRA. The final rule, among other things, revises the CRA regulations to better achieve the CRA’s core purpose of

encouraging banks to help meet the credit needs of their local communities; provides greater clarity and consistency in the application of CRA regulations; tailors performance standards, data collection, and reporting requirements to account for differences in bank size, business model, and local conditions; and promotes a consistent regulatory approach that applies to banks regulated by the OCC, the Federal Reserve Board and the FDIC. The final rule was expected to take effect on April 1, 2024, with most of its provisions becoming applicable on January 1, 2026. Reporting of the collected data will not be required until 2027. Several banking industry groups filed a lawsuit seeking to invalidate the CRA final rule, in which they argued that the federal banking agencies exceeded their statutory authority in adopting the CRA final rule. In March 2024, a federal judge granted an injunction to extend the CRA final rule’s effective date, originally set for April 1, 2024. The effective date will be extended each day the injunction remains in place, pending the resolution of the lawsuit.

USA PATRIOT Act and Other Anti-Money Laundering Requirements

As a regulated depository institution, FirstBank is subject to the Bank Secrecy Act, which imposes a variety of reporting and other requirements, including the requirement to file suspicious activity and currency transaction reports that are designed to assist in the

detection and prevention of money laundering, terrorist financing and other criminal activities. In addition, under Title III of the USA PATRIOT Act of 2001, all financial institutions are required to identify their customers, adopt formal and comprehensive anti-money laundering programs, scrutinize or prohibit certain transactions of special concern, and be prepared to respond to inquiries from U.S.
law enforcement agencies concerning their customers and their transactions.

In January 2021, major legislative amendments to U.S. anti-money laundering requirements became effective through the enactment of Division F of the National Defense Authorization Act for fiscal year 2021, otherwise known as the Anti-Money

Laundering Act of 2020 (the “AML Act”). The AML Act includes a variety of provisions designed to modernize the anti-money laundering regulatory regime and remediate gaps in the U.S.’s approach to anti-money laundering and countering the financing of terrorism, including the creation of a national database of absence corporate beneficial ownership along with significantly enhanced reporting requirements, increased penalties for Bank Secrecy Act violations, clarification of Suspicious Activity Report filing and sharing requirements, and provisions addressing the adverse consequences of “de-risking,” namely, the practice of financial institutions’ termination or limitation of business relationships with clients or classes of clients in order to manage the risks associated with such clients.

Regulations implementing the Bank Secrecy Act and the USA PATRIOT Act are published and primarily enforced by the Financial Crimes Enforcement Network (“FinCEN”), a bureau of the U.S. Treasury. Failure of a financial institution, such as the Corporation or the Bank, to comply with the requirements of the Bank Secrecy Act or the USA PATRIOT Act could have serious legal and reputational consequences for the institution, including the possibility of regulatory enforcement or other legal actions, such as significant civil monetary penalties. The Corporation is also required to comply with federal economic and trade sanctions requirements enforced by the Office of Foreign Assets Control (“OFAC”), a bureau of the U.S. Treasury.

The Corporation believes it has adopted appropriate policies, procedures and controls to address compliance with the Bank Secrecy Act, USA PATRIOT Act and economic/trade sanctions requirements, and to implement banking agency, FinCEN, OFAC and other U.S. Treasury regulations.

Financial Privacy and Cybersecurity

The Gramm-Leach-Bliley Act limits the ability of financial institutions to disclose non-public information about consumers to nonaffiliated third parties. These limitations require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to a non-affiliated third party.

The federal banking regulators regularly issue guidance regarding cybersecurity intended to enhance cyber risk management standards among financial institutions. A financial institution is expected to establish multiple lines of defense and to ensure their risk

management processes address the risk posed by potential threats to the institution. A financial institution’s management is expected to maintain sufficient processes to effectively respond and recover the institution’s operations after a cyber-attack. A financial institution is also expected to develop appropriate processes to enable recovery of data and business operations if a critical service provider of the institution falls victim to this type of a cyber-attack. Our Corporate Information Security Program (“CISP”) reflects these requirements and outlines our overall vision, direction, and governance efforts to protect the confidentiality, integrity, and availability of customer information and prevent access by unauthorized personnel.

In July 2023, the SEC adopted rules requiring registrants to disclose material cybersecurity incidents they experience and to disclose on an annual basis material information regarding their cybersecurity risk management, strategy, and governance. The new

rules require registrants to disclose on the new Item 1.05 of Form 8-K any cybersecurity incident they determine to be material generally within four business days of such determination and to describe the material aspects of the incident’s nature, scope, and timing, as well as its material impact or reasonably likely material impact on the registrant. The new rule also added Regulation S-K Item 106, which requires disclosure of the registrant’s processes, if any, for assessing, identifying, and managing material risks from cybersecurity threats, as well as the material effects or reasonably likely material effects of risks from cybersecurity threats and previous cybersecurity incidents on the new Item 1C. Cybersecurity of Form 10-K. Item 106 also requires registrants to describe the board of directors’ oversight of risks from cybersecurity threats and management’s role and expertise in assessing and managing material risks from such threats. These disclosures are included in Part I, Item 1C, “Cybersecurity” to this Form 10-K.

Limitations on Transactions with Affiliates and Insiders

Certain transactions between FDIC-insured banks financial institutions such as FirstBank and its affiliates are governed by Sections 23A and 23B of the Federal Reserve Act and by Federal Reserve RegulationW.An affiliate of a bank is, in general, any corporation or entity that controls, is controlled by, or is under common control with the bank, including the bank’s parent holding company and any companies that are controlled by such holding company.

Generally, Sections 23A and 23B of the Federal Reserve Act (i) limit the extent to which the bank or its subsidiaries may engage in “covered transactions” with any one affiliate to an amount equal to 10% of such bank’s capital stock and surplus, and contain an

aggregate limit on all such transactions with all affiliates to an amount equal to 20% of such bank’s capital stock and surplus and (ii)
require that all “covered transactions” be on terms that are substantially the same, or at least as favorable to the bank or affiliate, as those provided to a non-affiliate. The term “covered transaction” includes the making of loans, purchase of assets, issuance of a guarantee, credit derivatives, securities lending and other similar transactions entailing the provision of financial support by the bank to an affiliate. In addition, loans or other extensions of credit by the bank to the affiliate are required to be collateralized in accordance with the requirements set forth in Section 23A of the Federal Reserve Act.

In addition, Sections 22(h) and (g) of the Federal Reserve Act, implemented through Regulation O, place restrictions on commercial bank loans to executive officers, directors, and principal stockholders of the bank and its affiliates. Under Section 22(h) of

the Federal Reserve Act, bank loans to a director, an executive officer, a greater than 10% stockholder of the bank, and certain related interests of these persons, may not exceed, together with all other outstanding loans to such persons and affiliated interests, the bank’s limit on loans to one borrower, which is generally equal to 15% of the bank’s unimpaired capital and surplus in the case of loans that are not fully secured, and an additional 10% of the bank's unimpaired capital and unimpaired surplus in the case of loans that are fully secured by readily marketable collateral having a market value at least equal to the amount of the loan. Section 22(h) of the Federal Reserve Act also requires that loans to directors, executive officers, and principal stockholders be made on terms that are substantially the same as offered in comparable transactions to other persons and also requires prior board approval for certain loans. In addition, the aggregate amount of extensions of credit by a bank to insiders cannot exceed the bank’s unimpaired capital and surplus.
Furthermore, Section 22(g) of the Federal Reserve Act places additional restrictions on loans to executive officers.

Executive Compensation

The federal banking agencies have adopted interagency guidance governing incentive-based compensation programs, which applies to all banking organizations regardless of asset size. This guidance uses a principles-based approach to ensure that incentive-based

compensation arrangements appropriately tie rewards to longer-term performance and do not undermine the safety and soundness of banking organizations or create undue risks to the financial system. The interagency guidance is based on three major principles: (i)
balanced risk-taking incentives; (ii) compatibility with effective controls and risk management; and (iii) strong corporate governance.
The guidance further provides that, where appropriate, the banking agencies will take supervisory or enforcement action to ensure that material deficiencies that pose a threat to the safety and soundness of the organization are promptly addressed.

In May 2016, the federal financial regulators proposed regulations (first proposed in 2011) governing incentive-based compensation practices at covered banking institutions, which would include, among others, all banking organizations with assets of $1 billion or

greater. Portions of these proposed rules would apply to the Corporation and FirstBank. Those applicable provisions would generally (i) prohibit types and features of incentive-based compensation arrangements that encourage inappropriate risk because they are “excessive” or “could lead to material financial loss” at the banking institution; (ii) require incentive-based compensation arrangements to adhere to three basic principles: (1) a balance between risk and reward; (2) effective risk management and controls;
and (3) effective governance; and (iii) require appropriate board of directors (or committee) oversight and recordkeeping and disclosures to the banking institution’s primary regulatory agency. As of December 31, 2024, the rule has not been finalized. The nature and substance of any final action to adopt these proposed rules, and the timing of any such action, are not known at this time.

In August 2022, the SEC introduced new pay-versus-performance disclosure rules, which took effect in October 2022. These rules require companies to clearly disclose the relationship between executive compensation and the company’s financial performance.

Additionally, in October 2022, the SEC finalized a rule that directs stock exchanges to require listed companies to implement clawback policies to recover incentive-based compensation from current or former executive officers in the event of certain financial restatements, and requires companies to, among other things, file their clawback policies as Exhibit 97 of Form 10-K. Our Compensation Clawback Policy is compliant with NYSE’s listing standards pursuant to this rule.

Prompt Corrective Action

The “prompt corrective action” provisions of the FDIA require the federal bank regulatory agencies to take prompt corrective action against any insured depository institution that is undercapitalized. The FDIA establishes five capital categories: wellcapitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. Well-capitalized insured depository institutions significantly exceed the required minimum level for each relevant capital measure.

A bank’s capital category may not constitute an accurate representation of the overall financial condition or prospects of a bank, such as the Bank, and should be considered in conjunction with other available information regarding the financial condition and results of operations of such bank.

Deposit Insurance

FirstBank is subject to FDIC deposit insurance assessments, which increased for all banks, including FirstBank, following the increase in deposit insurance coverage to up to $250,000 per customer and the FDIC’s expanded authority to increase insurance

premiums implemented by the Dodd-Frank Act. The FDIA further requires that the designated reserve ratio for the DIF for any year not be less than 1.35% of estimated insured deposits or the comparable percentage of the new deposit assessment base. In addition, the FDIC was required to take the necessary actions for the reserve ratio to reach 1.35% of estimated insured deposits by September 30, 2020. The FDIC managed to reach the goal early, achieving a reserve ratio of 1.36% in September 2018. However, in the third quarter of 2020, the FDIC announced that the reserve ratio of the DIF fell nine basis points between the first and second quarters of 2020, from 1.39% to 1.30%. The decline was attributed to an unprecedented surge in deposits. The FDIC approved a plan that is expected to restore the DIF to at least 1.35% within eight years, as required by the FDIA. Under the plan, the FDIC will maintain the current schedules of assessment rates for all banks; monitor deposit balance trends, potential losses and other factors that affect the reserve ratio; and provide updates to its loss and income projections at least twice a year. The FDIC has also adopted a final rule raising its industry target ratio of reserves to insured deposits to 2%, 65 basis points above the statutory minimum, but the FDIC has indicated that it does not project that goal to be met for several years.

In October 2022, the FDIC adopted a final rule, applicable to all insured depository institutions, to increase initial base deposit insurance assessment rate schedules uniformly by 2 basis points, beginning in the first quarterly assessment period of 2023. The FDIC also concurrently maintained the designated reserve ratio for the DIF at 2% for 2023. The increase in assessment rate schedules is intended to increase the likelihood that the reserve ratio of the DIF reaches the statutory minimum of 1.35% by the statutory deadline of September 30, 2028. The new assessment rate schedules will remain in effect unless and until the reserve ratio meets or exceeds 2% in order to support growth in the DIF and progress toward the FDIC’s long-term goal of a 2% designated reserve ratio. Progressively lower assessment rate schedules will take effect when the reserve ratio reaches 2% and again when it reaches 2.5%. For 2023, the

Corporation recognized an increase of approximately $2.4 million in deposit insurance expense, when compared to 2022, as a result of the increase on the initial base deposit insurance assessment rate.

In November 2023, the FDIC issued a final rule to impose a special assessment to recover certain estimated losses the 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 such, during the years ended December 31, 2024 and 2023, the Corporation recorded charges of $1.1 million and $6.3 million, respectively, in the consolidated statements of income as part of “FDIC deposit insurance” expenses. As of December 31, 2024, the Corporation’s total estimated FDIC special assessment amounted to $7.4 million, of which $2.4 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.

FDIC Insolvency Authority

Under Puerto Rico banking laws, the OCIF may appoint the FDIC as conservator or receiver of a failed or failing FDIC-insured Puerto Rican bank, and the FDIA authorizes the FDIC to accept such an appointment. In addition, the FDIC has broad authority under

the FDIA to appoint itself as conservator or receiver of a failed or failing state bank, including a Puerto Rican bank. If the FDIC is appointed conservator or receiver of a bank upon the bank’s insolvency or the occurrence of other events, the FDIC may sell or transfer some, part or all of a bank’s assets and liabilities to another bank, or liquidate the bank and pay out insured depositors, as well as uninsured depositors and other creditors to the extent of the closed bank’s available assets. As part of its insolvency authority, the FDIC has the authority, among other things, to take possession of and administer the receivership estate, pay out estate claims, and repudiate or disaffirm certain types of contracts to which the bank was a party if the FDIC believes such contract is burdensome and its disaffirmance will aid in the administration of the receivership. The FDIA provides that, in the event of the liquidation or other resolution of an insured depository institution, including the Bank, the claims of depositors of the institution (including the claims of the FDIC as subrogee of insured depositors) and certain claims for administrative expenses of the FDIC as a receiver would have priority over other general unsecured claims against the institution. If the Bank were to fail, insured and uninsured depositors, along with the FDIC, would have priority in payment ahead of unsecured, non-deposit creditors, including the Corporation, with respect to any extensions of credit they have made to such insured depository institution.

Activities and Investments

The principal activities of FDIC-insured, state-chartered banks, such as FirstBank, are generally limited to those that are permissible for national banks. Similarly, under regulations dealing with equity investments, an insured state-chartered bank generally may not directly or indirectly acquire or retain any equity investments of a type, or in an amount, that is not permissible for a national bank.

Federal Home Loan Bank System

FirstBank is a member of the FHLB system. The FHLB system consists of eleven regional FHLBs governed and regulated by the Federal Housing Finance Agency. The FHLBs serve as reserve or credit facilities for member institutions within their assigned regions.

FirstBank is a member of the FHLB of New York and, as such, is required to acquire and hold shares of capital stock in the FHLB of New York in an amount calculated in accordance with the requirements set forth in applicable laws and regulations. FirstBank is in compliance with the stock ownership requirements of the FHLB of New York. All loans, advances and other extensions of credit made by the FHLB to FirstBank are secured by a portion of FirstBank’s mortgage loan or securities portfolios, certain other investments and the capital stock of the FHLB held by FirstBank.

The board of directors of each FHLB can increase the minimum investment requirements if it has concluded that additional capital is required to meet its own regulatory capital requirements. Any increase in the minimum investment requirements outside of specified ranges requires the approval of the Federal Housing Finance Agency. Because the extent of any obligation to increase our investment in any of the FHLBs depends entirely upon the occurrence of a future event, the amount of any future investment in the capital stock of the FHLBs is not determinable.

Ownership and Control

Because of FirstBank’s status as an FDIC-insured bank, as defined in the Bank Holding Company Act, the Corporation, as the owner of FirstBank’s common stock, is subject to certain restrictions and disclosure obligations under various federal laws, including

the Bank Holding Company Act and the Change in Bank Control Act (the “CBCA”). Regulations adopted pursuant to the Bank Holding Company Act and the CBCA generally require prior Federal Reserve Board or other federal banking agency approval or nonobjection for an acquisition of control of an “insured institution” (as defined in the Act) or holding company thereof by any person (or persons acting in concert). Control is deemed to exist if, among other things, a person (or group of persons acting in concert) acquires

25% or more of any class of voting stock of an insured institution or holding company thereof. Under the CBCA, control is presumed to exist subject to rebuttal if a person (or group of persons acting in concert) acquires 10% or more of any class of voting stock and either (i) the corporation has registered securities under Section 12 of the Exchange Act, or (ii) no person (or group of persons acting in concert) will own, control or hold the power to vote a greater percentage of that class of voting securities immediately after the transaction. The concept of acting in concert is broad and subject to certain rebuttable presumptions, including, among others, that relatives, business partners, management officials, affiliates and others are presumed to be acting in concert with each other and their businesses. The regulations of the FDIC implementing the CBCA are generally similar to those described above.

The Puerto Rico Banking Law requires the approval of the OCIF for changes in control of a Puerto Rico bank. See “Puerto Rico Banking Law” below for further detail.

Standards for Safety and Soundness

The FDIA requires the FDIC and other federal bank regulatory agencies to prescribe standards of safety and soundness. Bank regulators have various remedies available if they determine that the financial condition, capital resources, asset quality, earnings

prospects, management, liquidity, or other aspects of a banking organization’s operations are unsatisfactory. The regulators may also take action if they determine that the banking organization or its management is violating or has violated any law or regulation. The regulators have the power to, among other things, prohibit unsafe or unsound practices, require affirmative actions to correct any violation or practice, issue administrative orders that can be judicially enforced, direct increases in capital, direct the sale of subsidiaries or other assets, limit dividends and distributions, restrict growth, assess civil monetary penalties, remove officers and directors, and terminate deposit insurance.

Engaging in unsafe or unsound practices or failing to comply with applicable laws, regulations, and supervisory agreements could subject the Corporation, its subsidiaries, and their respective officers, directors, and institution-affiliated parties to the remedies described above, and other sanctions. In addition, the FDIC may terminate a bank’s deposit insurance upon a finding that the bank’s financial condition is unsafe or unsound or that the bank has engaged in unsafe or unsound practices or has violated an applicable rule, regulation, order, or condition enacted or imposed by the bank’s regulatory agency.

Brokered Deposits

FDIC regulations adopted under the FDIA govern the receipt of brokered deposits by banks. Well -capitalized institutions are not subject to limitations on brokered deposits, while adequately capitalized institutions are able to accept, renew or rollover brokered

deposits only with a waiver from the FDIC and subject to certain restrictions on the interest paid on such deposits. Undercapitalized institutions are not permitted to accept brokered deposits. In October 2020, the FDIC adopted revisions to its brokered deposit regulations that became effective on April 1, 2021, with full compliance extended to January 1, 2022. For brokered deposits, the final rule established a new framework for analyzing certain parts of the “deposit broker” definition, including a new interpretation for the “primary purpose” exception and the business relationships that meet the exception. Pursuant to this revision, during the fourth quarter of 2021, certain non-maturity deposits previously reported as brokered deposits were recharacterized as non-brokered deposits.

Puerto Rico Banking Law

As a commercial bank organized under the laws of the Commonwealth of Puerto Rico, FirstBank is subject to supervision, examination and regulation by the commissioner of OCIF (the “Commissioner”) pursuant to the Puerto Rico Banking Law of 1933, as amended (the “Banking Law”).

The Banking Law contains various provisions relating to FirstBank and its affairs, including its incorporation and organization, the rights and responsibilities of its directors, officers and stockholders and its corporate powers, lending limitations, capital requirements, and investment requirements. In addition, the Commissioner is given extensive rule-making power and administrative discretion under the Banking Law.

The Banking Law requires every bank to maintain a legal reserve, which shall not be less than 20% of its demand liabilities, except government deposits (federal, state and municipal) that are secured by actual collateral. The reserve is required to be composed of any

of the following securities or a combination thereof: (i) legal tender of the United States; (ii) checks on banks or trust companies located in any part of Puerto Rico that are to be presented for collection during the day following the day on which they are received;
(iii) money deposited in other banks provided said deposits are authorized by the Commissioner and subject to immediate collection;
(iv) federal funds sold to any Federal Reserve Bank and securities purchased under agreements to resell executed by the bank with such funds that are subject to be repaid to the bank on or before the close of the next business day; and (v) any other asset that the Commissioner identifies from time to time.

Section 17 of the Banking Law permits Puerto Rico commercial banks to make loans to any one person, firm, partnership or corporation in an aggregate amount of up to 15% of the sum of: (i) the bank’s paid-in capital; (ii) the bank’s reserve fund; (iii) 50% of the bank’s retained earnings, subject to certain limitations; and (iv) any other components that the Commissioner may determine from

time to time. If such loans are secured by collateral worth at least 25% of the amount of the loan, the aggregate maximum amount may reach 33.33% of the sum of the bank’s paid-in capital, reserve fund, 50% of retained earnings, subject to certain limitations, and such other components that the Commissioner may determine from time to time. There are no restrictions under the Banking Law on the amount of loans that may be wholly secured by bonds, securities and other evidences of indebtedness of the government of the United States, or of the Commonwealth of Puerto Rico, or by bonds, not in default, of municipalities or instrumentalities of the Commonwealth of Puerto Rico.

The Banking Law requires that Puerto Rico commercial banks prepare each year a balance summary of their operations and submit such balance summary for approval at a regular meeting of stockholders, together with an explanatory report thereon. The Banking Law also requires that at least 10% of the yearly net income of a Puerto Rico commercial bank be credited annually to a reserve fund until such reserve fund is in amount equal to the total paid-in-capital of the bank.

The Banking Law also provides that when the expenditures of a Puerto Rico commercial bank are greater than its receipts, the excess of the expenditures over receipts must be charged against the undistributed profits of the bank, and the balance, if any, charged against the reserve fund, as a reduction thereof. If there is no reserve fund sufficient to cover such balance in whole or in part, the outstanding amount must be charged against the capital account and no dividend may be declared until said capital has been restored to its original amount and the amount in the reserve fund equals 20% of the original capital.

The Finance Board, which is composed of nine members from enumerated Puerto Rico Government agencies, instrumentalities and public corporations, including the Commissioner, has the authority to regulate the maximum interest rates and finance charges that may be charged on loans to individuals and unincorporated businesses in Puerto Rico. The current regulations of the Finance Board provide that the applicable interest rate on loans to individuals and unincorporated businesses, including real estate development loans but excluding certain other personal and commercial loans secured by mortgages on real estate properties, is to be determined by free competition. Accordingly, the regulations do not set a maximum rate for charges on retail installment sales contracts, small loans, and credit card purchases. Furthermore, there is no maximum rate set for installment sales contracts involving motor vehicles, commercial, agricultural and industrial equipment, commercial electric appliances and insurance premiums.

International Banking Center Regulatory Act of Puerto Rico (“IBE Act 52”)

The business and operations of FirstBank International Branch (“FirstBank IBE” or the “IBE division of FirstBank”) and FirstBank Overseas Corporation (the IBE subsidiary of FirstBank) are subject to supervision and regulation by the Commissioner. FirstBank and

FirstBank Overseas Corporation were created under Puerto Rico Act 52-1989, as amended, known as the “International Banking Center Regulatory Act” (the IBE Act 52), which provides for total Puerto Rico tax exemption on net income derived by an IBE operating in Puerto Rico on the specific activities identified in the IBE Act 52. An IBE that operates as a unit of a bank pays income taxes at the corporate standard rates to the extent that the IBE’s net income exceeds 20% of the bank’s total net taxable income. Under the IBE Act 52, certain sales, encumbrances, assignments, mergers, exchanges or transfers of shares, interests or participation(s) in the capital of an IBE may not be initiated without the prior approval of the Commissioner. The IBE Act 52 and the regulations issued thereunder by the Commissioner (the “IBE Regulations”) limit the business activities that may be carried out by an IBE. Such activities are limited in part to persons and assets located outside of Puerto Rico.

Pursuant to the IBE Act 52 and the IBE Regulations, each of FirstBank IBE and FirstBank Overseas Corporation must maintain in Puerto Rico books and records of its transactions in the ordinary course of business. FirstBank IBE and FirstBank Overseas Corporation are also required to submit to the Commissioner quarterly and annual reports of their financial condition and results of operations, including annual audited financial statements.

The IBE Act 52 empowers the Commissioner to revoke or suspend, after notice and hearing, a license issued thereunder if, among other things, the IBE fails to comply with the IBE Act 52, the IBE Regulations or the terms of its license, or if the Commissioner finds that the business or affairs of the IBE are conducted in a manner that is not consistent with the public interest.

In 2012, the Puerto Rico government approved Act Number 273 (“Act 273”). Act 273 replaces, prospectively, IBE Act 52 with the objective of improving the conditions for conducting international financial transactions in Puerto Rico. An IBE existing on the date

of approval of Act 273, such as FirstBank IBE and FirstBank Overseas Corporation, can continue operating under IBE Act 52, or it can voluntarily convert to an International Financial Entity (“IFE”) under Act 273 so it may broaden its scope of Eligible IFE Activities, as defined below, and obtain a grant of tax exemption under Act 273. As of the date of the issuance of this Form 10-K, FirstBank IBE and FirstBank Overseas Corporation are operating under IBE Act 52.

On February 16, 2024, the Governor of Puerto Rico approved Act 45 of 2024 which amended the IBE Act. The amendments of the IBE Act were effective on May 15, 2024, and, among other things, the amendments included an increase to the annual license fee paid by the IBEs to OCIF from $5 thousand to $25 thousand and amended certain other compliance matters, including a minimum employment requirement of eight full-time employees. These amendments did not have a material impact to the Corporation.

Puerto Rico Income Taxes

Under the Puerto Rico Internal Revenue Code of 2011, as amended (the “PR Tax Code”), the Corporation and its subsidiaries are treated as separate taxable entities and are not entitled to file consolidated tax returns and, thus, the Corporation is generally not

entitled to utilize losses from one subsidiary to offset gains in another subsidiary. Accordingly, to obtain a tax benefit from a net operating loss (“NOL”), a particular subsidiary must be able to demonstrate sufficient taxable income within the applicable NOL carry-forward period. 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. The PR Tax Code provides a dividend received deduction of 100% on dividends received from “controlled” subsidiaries subject to taxation in Puerto Rico and 85% on dividends received from other taxable domestic corporations.

The Corporation has maintained an effective tax rate lower than the maximum statutory rate in Puerto Rico, which has resulted mainly from conducting business through certain entities that have special tax treatments, including doing business through an IBE unit of the Bank and through FirstBank Overseas Corporation, each of which are generally exempt from Puerto Rico income taxation under IBE Act 52, and through a wholly-owned subsidiary that engages in certain Puerto Rico qualified investing activities that have certain tax advantages under Act 60 of 2019.

United States Income Taxes

As a Puerto Rico corporation, First BanCorp. is treated as a foreign corporation for U.S. and USVI income tax purposes and, accordingly, is generally subject to U.S. and USVI income tax only on its income from sources within the U.S. and USVI or income effectively connected with the conduct of a trade or business in those jurisdictions. Any such tax paid in the U.S. and USVI is also creditable against the Corporation’s Puerto Rico tax liability, subject to certain conditions and limitations.

Insurance Operations Regulation

As a financial holding company under the Bank Holding Company Act, we are permitted to engage in a broader range of activities, including insurance activities, that are permitted to bank holding companies.

FirstBank Insurance Agency is registered as an insurance agency with the Insurance Commissioner of Puerto Rico and is subject to regulations issued by the Insurance Commissioner of Puerto Rico and the Division of Banking, Insurance and Financial Regulation in the USVI relating to, among other things, the licensing of employees and sales and solicitation and advertising practices, and by the Federal Reserve Board as to certain consumer protection provisions mandated by the Gramm-Leach-Bliley Act and its implementing regulations.

Mortgage Banking Operations

In addition to FDIC and CFPB regulations, FirstBank is subject to the rules and regulations of the FHA, VA, FNMA, FHLMC, GNMA, and the U.S. Department of Housing and Urban Development (“HUD”) with respect to originating, processing, selling and

servicing mortgage loans and the issuance and sale of MBS. Those rules and regulations, among other things, prohibit discrimination and establish underwriting guidelines that include provisions for inspections and appraisals, require credit reports on prospective borrowers and fix maximum loan amounts, and, with respect toVAloans, fix maximum interest rates. Moreover, lenders such as FirstBank are required annually to submit audited financial statements to the FHA, VA, FNMA, FHLMC, GNMA and HUD and each regulatory entity has its own financial requirements. FirstBank’s affairs are also subject to supervision and examination by the FHA, VA, FNMA, FHLMC, GNMA and HUD at all times to assure compliance with applicable regulations, policies and procedures.
Mortgage origination activities are subject to, among other requirements, the Equal Credit Opportunity Act, TILA and the RESPA and the regulations promulgated thereunder that, among other things, prohibit discrimination and require the disclosure of certain basic information to mortgagors concerning credit terms and settlement costs. FirstBank is licensed by the Commissioner under the Puerto Rico Mortgage Banking Law, and, as such, is subject to regulation by the Commissioner, with respect to, among other things, licensing requirements and the establishment of maximum origination fees on certain types of mortgage loan products.

WEBSITE ACCESS TO REPORT

The Corporation makes available annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and amendments to those reports, and proxy statements on Schedule 14A, filed or furnished pursuant to Sections 13(a), 14(a) or 15(d)

of the Exchange Act, free of charge on or through its internet website at www.1firstbank.com (under “Investor Relations”) or directly through the Corporation’s investor relations website, fbpinvestor.com, as soon as reasonably practicable after the Corporation electronically files such material with, or furnishes it to, the SEC. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.

The Corporation also makes available its Corporate Governance Guidelines and Principles, the charters of the Audit, Asset/Liability, Compensation and Benefits, Credit, Risk, Trust, and Corporate Governance and Nominating Committees and the documents listed below, free of charge on or through its internet website at www.fbpinvestor.com (under Corporate Governance):

• Code of Ethics for CEO and Senior Financial Officers (the “Code of Ethics”)

• Code of Ethical Conduct applicable to all employees

• Independence Principles for Directors

• Corporate Sustainability/ESG Reports

• Sustainability Policy

The Corporate Governance Guidelines and Principles and the aforementioned charters and documents may also be obtained free of charge by sending a written request to Mrs. Sara Alvarez Cabrero , Executive Vice President, General Counsel and Secretary of the Board, PO Box 9146, San Juan, Puerto Rico 00908.

Website addresses referenced in this Form 10-K are provided as textual references and for convenience only, and the content on the referenced websites does not constitute a part of this Form 10-K or any other report or document that the Corporation files with or furnishes to the SEC.

Item 1A.Risk Factors

Below is a discussion about material risks and uncertainties that could impact the Corporation’s businesses, results of operations and financial condition, including by causing the Corporation’s actual results to differ materially from those projected in any forward-

looking statements. Other risks and uncertainties, including those not currently known to the Corporation or its management and those that the Corporation or its management currently deems to be immaterial, could also materially adversely affect the Corporation in future periods. Thus, the following should not be considered a complete discussion of all of the risks and uncertainties the Corporation may face. See the discussion under “Forward-Looking Statements,” in this Form 10-K.

RISKS RELATING TO THE BUSINESS ENVIRONMENT AND OUR INDUSTRY

The effect of changes in the interest rate environment and inflation levels on the level, composition and performance of the 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.

Net interest income is the difference between the amounts received by us on our interest-earning assets and the interest paid by us on our interest-bearing liabilities. Differences in the repricing structure of our assets and liabilities may result in changes in our profits when interest rates change. For instance, lower interest rates for prolonged periods tend to compress the net interest margin and reduce profitability. Conversely, higher interest rates increase the cost of mortgage and other loans to consumers and businesses and may reduce demand for such loans, which may negatively impact our profits by reducing the amount of interest income due to declines in volume. This happens because the decrease in interest income from loans and investment securities is greater than the reduction in interest expense on interest-bearing liabilities. Competitive pressures among banks to attract deposits often lead to higher interest expenses due to increased reliance on wholesale funding, further squeezing the net interest margin, even though there is increased demand for loans. Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions, inflationary trends, changes in government spending and debt issuances and policies of various governmental and regulatory agencies, in particular, the Federal Reserve Board.

Additionally, basis risk is the risk of adverse consequences resulting from unequal changes in the difference, also referred to as the “spread” or basis, between the rates for two or more different instruments with the same maturity and occurs when market rates for

different financial instruments or the indices used to price assets and liabilities change at different times or by different amounts. For example, the interest expense for liability instruments might not change by the same amount as interest income received from loans or investments. To the extent that the interest rates on loans and borrowings change at different rates and by different amounts, the margin between our variable rate-based assets and the cost of the interest-bearing liabilities might be compressed and adversely affect net interest income.

Also, changes in interest rates may impact the ability to attract and retain clients, as well as gain acceptance from current and prospective customers for new and existing products and services. This, in turn, affects demand for new loan originations, the composition of the Corporation’s interest-earning assets, and the extent of any re-shifting between non-interest-bearing and interestbearing liabilities. Further, changes in interest rates impact the value of our fixed-rate securities. Any unrealized gains or losses from these portfolios impact other comprehensive income, stockholders’ equity, and the tangible common equity ratio. Any realized gains or losses from these portfolios impact regulatory capital ratios.

Changes in prepayments may adversely affect net interest income.

Net interest income could also be affected by prepayments of MBS. Generally, when rates rise, prepayments of principal and interest will decrease, and the duration of MBS securities will increase. Conversely, when rates fall, prepayments of principal and

interest will increase, and the duration of MBS will decrease. Such acceleration in the prepayments of MBS would lower yields on these securities, as the amortization of premiums paid upon the acquisition of these securities would accelerate. Conversely, acceleration in the prepayments of MBS would increase yields on securities purchased at a discount, as the accretion of the discount would accelerate. Also, net interest income in future periods might be affected by our investment in callable securities because decreases in interest rates might prompt the early redemption of such securities.

The volatility in the financial services industry, which could result in, among other things, bank deposit runoffs, liquidity

constraints, and increased regulatory requirements and costs.

The closure and placement into receivership with the FDIC of certain large U.S. regional banks with assets over $100 billion in March and May 2023, and adverse developments affecting other banks, resulted in heightened levels of market volatility and

consequently negatively impacted customer confidence in the safety and soundness of financial institutions. These developments resulted in certain regional banks experiencing higher than normal deposit outflows and an elevated level of competition for available deposits in the market. The impact of market volatility from adverse developments in the banking industry such as this one are highly uncertain and difficult to predict.

In the aftermath of these bank failures, the banking agencies have increased regulatory requirements and costs that may impact capital ratios or the FDIC deposit insurance premium. For example, in 2023, the FDIC issued a final rule to impose a special assessment to recover certain estimated losses to the Deposit Insurance Fund (“DIF”) arising from the closures of Silicon Valley Bank and Signature Bank. The estimated losses will be recovered through quarterly special assessments collected from certain insured depository institutions, including the Bank, and collection began during the quarter ended June 30, 2024. As such, during the years ended December 31, 2024 and 2023, the Corporation recorded charges of $1.1 million and $6.3 million, respectively, in the consolidated statements of income as part of “FDIC deposit insurance” expenses. As of December 31, 2024, the Corporation’s total estimated FDIC special assessment amounted to $7.4 million, of which $2.4 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.

Difficult market and general economic conditions have affected the financial industry in the past and could adversely affect us

in the future.

Given that most of our business is in Puerto Rico and the U.S. and given the degree of interrelation between Puerto Rico’s economy and that of the U.S., we are exposed to downturns in the U.S. economy, including factors such as employment levels in the U.S. and real estate valuations. The deterioration of these conditions has adversely affected us in the past and in the future could adversely affect the credit performance of mortgage loans, and result in significant write-downs of asset values by financial institutions, including U.S. government-sponsored entities (“GSEs”) as well as major commercial banks and investment banks.

In particular, we may face the following risks:

●Our ability to assess the creditworthiness of our customers may be impaired if the models and approaches we use to select, manage, and underwrite the loans become less predictive of future behaviors.

●The models used to estimate losses inherent in the credit exposure, particularly those under CECL, require difficult, subjective, and complex judgments, including forecasts of economic conditions and how these economic predictions might impair the ability of the borrowers to repay their loans, which may no longer be accurately estimated and which may, in turn, impact the reliability of the models.

●Our ability to borrow from other financial institutions or to engage in sales of mortgage loans to third parties (including mortgage loan securitization transactions with GSEs and repurchase agreements) on favorable terms, or at all, could be adversely affected by further disruptions in the capital or credit markets or other events, including deteriorating investor expectations.

●Competitive dynamics in the industry could change as a result of strategic growth opportunities in connection with current market conditions.

●Expected future regulation of our industry may increase our compliance costs and limit our ability to pursue business opportunities.

●There may be downward pressure on our stock price.

Any deterioration of economic conditions in the U.S. and disruptions in the financial markets could adversely affect our ability to access capital, our business, financial condition, and results of operations. Unfavorable or uncertain economic and market conditions have been and could cause declines in economic growth, business activity or investor or business confidence; limitations on the availability or increases in the cost of credit and capital; increases in inflation or interest rates; high unemployment; natural disasters; epidemics and pandemics; or a combination of these or other factors.

Additionally, the residential mortgage loan origination business is impacted by home values and has historically been cyclical, enjoying periods of strong growth and profitability followed by periods of shrinking volumes and industry-wide losses. During periods of rising interest rates, including the series of interest rate increases that have occurred, the refinancing of many mortgage products tends to decrease as the economic incentives for borrowers to refinance their existing mortgage loans are reduced.

Any sustained period of increased delinquencies, foreclosures, or losses could adversely affect our ability to sell loans, the prices we receive for loans, the values of mortgage loans held for sale, or residual interests in securitizations, which could adversely affect our financial condition and results of operations. In addition, any additional material decline in real estate values would further weaken the loan-to-value ratios and increase the possibility of loss if a borrower defaults. In such event, we will be subject to the risk of loss on such real estate arising from borrower defaults to the extent not covered by third-party credit enhancements.

We operate in a highly competitive industry and market area.

We face substantial competition in all areas of our operations from a variety of different competitors, including other banks, insurance companies, mortgage banking companies, small loan companies, automobile financing companies, leasing companies,

brokerage firms with retail operations, credit unions, certain retailers, fintech companies and digital platforms. The Corporation’s ability to compete effectively depends on the relative performance of its products, the degree to which the features of its products appeal to customers, and the extent to which the Corporation meets clients’ needs and expectations. The Corporation’s ability to compete also depends on its ability to attract and retain professional and other personnel, and on its reputation.

The Corporation encounters intense competition in attracting and retaining deposits and in its consumer and commercial lending activities. The Corporation competes for loans with other financial institutions. The Corporation’s ability to originate loans depends primarily on the rates and fees charged and the service it provides to its borrowers in making prompt credit decisions. There can be no assurance that in the future the Corporation will be able to increase its deposit base, originate loans in the manner or on the terms on which it has done so in the past, or otherwise compete effectively.

The Corporation’s credit quality and the value of the portfolio of Puerto Rico government securities has been, and in the future may be, adversely affected by Puerto Rico’s economic condition, and may be affected by actions taken by the Puerto Rico government or the PROMESA oversight board to address the ongoing fiscal and economic challenges in Puerto Rico.

A significant portion of our business activities and credit exposure is concentrated in Puerto Rico, which has faced prolonged fiscal challenges and debt restructuring efforts over the past decades. While Puerto Rico’s economy showed growth in fiscal year 2023, driven by personal consumption and capital investments, future economic prospects remain uncertain. The Puerto Rico Planning Board (“PRPB”) projected a real gross national product (“GNP”) growth of 0.7% for fiscal year 2023, the third consecutive year with a positive year-over-year variance.

In addition, the 2024 Fiscal Plan for Puerto Rico (the “2024 Fiscal Plan”) certified by the PROMESA oversight board, projects the GNP growth to be 1.0% of in fiscal year 2024, followed by declines of 0.8% and 0.1% in fiscal year 2025 and fiscal year 2026, reflecting the temporary nature of federal stimulus inflows and structural challenges in the local economy.

The fiscal policies and economic reforms outlined in the 2024 Fiscal Plan, including infrastructure investment, tax reforms, and energy modernization, aim to promote sustainable growth. However, delays in implementing these reforms or inefficiencies in their execution could negatively impact the local economy and, by extension, our business. Furthermore, while federal disaster relief and COVID-19 aid have supported economic activity, these funds are finite, and their gradual depletion could expose underlying economic weaknesses.

As of December 31, 2024, the Corporation had $288.6 million of direct exposure to the Puerto Rico government, its municipalities and public corporations. As of December 31, 2024, approximately $195.8 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 $51.1 million consisted of loans and obligations which are supported by one or more specific sources of municipal revenues. The municipalities are required by law to levy special property taxes in such amounts as are required for the payment of all of their respective general obligation bonds and notes. In addition to municipalities, the total direct exposure also included $8.8 million in a loan extended to an affiliate of PREPA, $30.0 million in loans to public corporations of the Puerto Rico government, and obligations of the Puerto Rico government, specifically a residential pass-through MBS issued by the PR Housing Finance Authority (“PRHFA”), at an amortized cost of $2.9 million as part of its available-for-sale debt securities portfolio (fair value of $1.6 million as of December 31, 2024).

Also, as of December 31, 2024, the outstanding balance of construction loans funded through conduit financing structures to support the federal programs of Low-Income Housing Tax Credit (“LIHTC”) combined with Community Development Block Grant- Disaster Recovery (“CDBG-DR”) funding amounted to $59.2 million. The main objective of these programs is to spur development in new or rehabilitated and affordable rental housing. PRHFA, as program subrecipient and conduct issuer, issues tax-exempt obligations which are acquired by private financial institutions and are required to co-underwrite with PRHFA a mirror construction loan agreement for the specific project loan to which the Corporation will serve as ultimate lender but where the PRHFA will be the lender of record. In addition, as of December 31, 2024, the Corporation had $72.5 million in exposure to residential mortgage loans guaranteed by the PRHFA.

The Corporation operates in various jurisdictions highly dependent on federal funding programs. On January 27, 2025, the Office of Management and Budget (“OMB”) issued Memorandum M-25-13 entitled “Temporary Pause of Agency Grant, Loan, and Other Financial Assistance Programs.” The Memo directed every federal agency to “temporarily pause all activities related to obligation or disbursement of all federal financial assistance, and other relevant agency activities that may be implicated by executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.” Lawsuits challenging the pause were immediately filed and on January 28, 2025, the U.S. District Court for the

District of Columbia enjoined the Trump administration from implementing OMB Memorandum M-25-13 for disbursements under open awards. On January 29, 2025, OMB rescinded the Memo, however, the administration indicated that it would still pursue a spending freeze. It is uncertain at this time whether the administration will issue any new or different directives with respect to the review and/or pause of federal financial assistance in the future, but any such directives could have a negative effect on our business.

Instability in economic conditions, delays in the receipt of disaster relief funds allocated to Puerto Rico or any temporary or permanent pause on any federal funds, and the potential impact on asset values resulting from past or future natural disaster events, when added to Puerto Rico’s ongoing fiscal challenges, could materially adversely affect our business, financial condition, liquidity, results of operations and capital position.

A deterioration in economic conditions in the U.S. Virgin Islands and British Virgin Islands could harm our results of

operations.

The Corporation has exposure to the USVI and BVI economies, which remain susceptible to fiscal challenges, natural disasters, and reliance on federal disaster relief and recovery funding. While the USVI has shown economic recovery in recent years, uncertainties persist, including the pace of federal fund disbursements, the long-term sustainability of public finances, and the potential for legislative actions impacting its debt obligations.

As of December 31, 2024 and 2023, the Corporation had $100.4 million and $90.5 million, respectively, in loans to USVI public corporations, all of which were performing as of that date. However, a downturn in the USVI and BVI economies, delays in government funding, or legal or regulatory changes affecting their financial stability could negatively impact the Corporation’s asset quality, credit performance, and overall financial condition.

We are subject to ESG risks that could adversely affect our reputation and the market price of our securities.

Although the current U.S. presidential administration’s policies may reduce immediate ESG regulatory burdens, stakeholder expectations are not uniform, and both opponents and proponents of various ESG-related matters have increasingly resulted in a range

of activism to advocate for their positions. For example, in the last several years, certain state attorneys general, treasurers, and legislators have taken various actions to impact the extent to which ESG principles are considered by financial institutions, including to require or prohibit the consideration of various ESG matters in certain contexts. While anti-ESG sentiment has gained momentum across the United States, there is continued focus by investors and certain other stakeholders on the ESG practices of publicly traded companies, like us, that has included or may in the future include expanding mandatory and voluntary reporting, diligence, and disclosure on topics such as climate change, human capital, labor and risk oversight, and could expand the nature, scope, and complexity of matters that we are required to control, assess and report. These requirements would likely result in increased ESGrelated compliance costs, which could result in increases to our overall operational costs. Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, and our stock price.

For example, we may be exposed to negative publicity based on the identity and activities of those to whom we lend and with which we otherwise do business and the public’s view of the approach and performance of our customers and business partners with respect to ESG matters. Any such negative publicity could arise from adverse news coverage in traditional media and could also spread through the use of social media platforms. The Corporation’s relationships and reputation with its existing and prospective customers and third parties with which we do business could be damaged if we were to become the subject of any such negative publicity. This, in turn, could have an adverse effect on our ability to attract and retain customers and employees and could have a negative impact on our business, financial condition and results of operations. In addition, we could be criticized by ESG detractors for the scope or nature of our ESG initiatives or policies or for any revisions to these policies. We could also be subjected to negative responses by governmental actors (such as anti-ESG legislation or retaliatory legislative treatment) or consumers (such as boycotts or negative publicity campaigns) that could adversely affect our reputation, results of operations and financial condition.

Our results of operations could be adversely affected by natural disasters, public health crises, political crises, negative global

climate patterns or other catastrophic events.

Natural disasters, whose nature and severity may be impacted by climate change, such as hurricanes, floods, extreme cold events and other adverse weather conditions; public health crises; political crises, such as terrorist attacks, war, labor unrest, other political

instability, trade policies, tariffs and sanctions, including the repercussions of the ongoing conflict in Ukraine, the ongoing conflict in the Middle East, and the possible expansion of such conflicts to surrounding areas and potential geopolitical consequences; negative global climate patterns, especially in water stressed regions; or other catastrophic events, such as fires or other disasters occurring at our locations, whether occurring in Puerto Rico, the U.S., or internationally, could cause a significant adverse effect on the economy and disrupt our operations. Certain areas in which our business is concentrated, including Puerto Rico and the USVI, are particularly susceptible to earthquakes, hurricanes, and major storms. Further, climate change may increase both the frequency and severity of extreme weather conditions and natural disasters, which may affect our business operations, either in a particular region or globally, as

well as the activities of our customers. The Corporation is also not able to predict the positive or negative effects that future events or changes to the U.S. or global economy, financial markets, or regulatory and business environment could have on our operations.

Climate change, and efforts to mitigate its long-term effects, may materially adversely affect the Corporation's business and

results of operations.

Concerns over the long-term effects of climate change have led and will continue to lead to governmental efforts around the world to mitigate those impacts. Consumers and businesses also may voluntarily change their behavior as a result of these concerns. The

Corporation and its customers will need to respond to new laws and regulations as well as consumer and business preferences resulting from climate change concerns. The Corporation and its customers may face cost increases, asset value reductions and operating process changes. The impact on our customers will likely vary depending on their specific attributes, including reliance on our role in fossil fuel activities. Among the impacts to the Corporation, we could face reductions in creditworthiness on the part of some customers or in the value of assets securing loans. The Corporation’s efforts to take these risks into account in making lending and other decisions, including increasing our business with climate-responsible companies, may not be effective in protecting the Corporation from the negative impact of new laws and regulations or changes in consumer or business behavior.

Deterioration in collateral values may result in additional losses.

Our business is affected by the value of the assets securing our loans or underlying our investments.

We had a commercial and construction loan portfolio held for investment in the amount of $6.2 billion as of December 31, 2024.
Due to their nature, these loans entail a higher credit risk than consumer and residential mortgage loans, since they are larger in size,

concentrate more risk in a single borrower and are generally more sensitive to economic downturns. Furthermore, in the case of a slowdown in the real estate market, it may be difficult to dispose of the properties securing these loans upon any foreclosure of the properties. We may incur losses over the near term, either because of continued deterioration in the quality of loans or because of sales of problem loans, which would likely accelerate the recognition of losses. Any such losses could adversely impact our overall financial performance and results of operations.

Deterioration of the value of real estate collateral securing our construction and commercial loan portfolios, whether located in Puerto Rico or elsewhere, would result in increased credit losses. Whether the collateral that underlies our loans is located in Puerto

Rico, the USVI, the BVI, or the U.S. mainland, the performance of our loan portfolio and the collateral value backing the transactions are dependent upon the performance of, and conditions within, each specific real estate market. As of December 31, 2024, $2.8 billion of our commercial and construction loan portfolio held for investment, or 22% of the total loan portfolio held for investment, consisted of commercial mortgage and construction loans, of which $2.0 billion was in the Puerto Rico region.

We measure credit losses for collateral dependent loans based on the fair value of the collateral, which is generally obtained from appraisals, adjusted for undiscounted selling costs as appropriate. Updated appraisals are obtained when we determine that loans are

collateral dependent and are updated annually thereafter. In addition, appraisals are also obtained for certain residential mortgage loans on a spot basis based on specific characteristics, such as delinquency levels, and age of the appraisal. The appraised value of the collateral may decrease, or we may not be able to recover collateral at its appraised value. A significant decline in collateral valuations for collateral dependent loans has required and, in the future, may require, increases in our credit loss expense on loans. Any such increase would have an adverse effect on our future financial condition and results of operations.

Labor shortages and constraints in the supply chain could adversely affect our clients’ operations as well as our operations.

Many sectors in Puerto Rico, the United States, the Virgin Islands and around the world are experiencing a shortage of workers.
Many of our commercial clients have been impacted by this shortage along with disruptions and constraints in the supply chain, which

could adversely impact their operations and could lead to reduced cash flow and difficulty in making loan repayments. The Corporation’s industry has also been affected by the shortage of workers, as well as increasing wages for entry level and certain professional roles. This may lead to open positions remaining unfilled for longer periods of time, which may affect the level of service provided by the Corporation, or a need to increase wages to attract workers.

The failure of other financial institutions could adversely affect us.

Our ability to engage in routine financing transactions could be adversely affected by future failures of financial institutions and the actions and commercial soundness of other financial institutions. Financial institutions are interrelated as a result of trading, clearing,

counterparty and other relationships. We have exposure to different industries and counterparties and routinely execute transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks, investment companies and other institutional clients. In certain of these transactions, we are required to post collateral to secure the obligations to the counterparties. In the event of a bankruptcy or insolvency proceeding involving one of such counterparties, we may experience

delays in recovering the assets posted as collateral, or we may incur a loss to the extent that the counterparty was holding collateral in excess of the obligation to such counterparty or under other circumstances.

In addition, many of these transactions expose us to credit risk in the event of a default by our counterparty or client. The credit risk may be exacerbated when the collateral held by us cannot be realized or is liquidated at prices not sufficient to recover the full amount of the loan or derivative exposure due to us. Any losses resulting from our routine funding transactions may materially and adversely affect our financial condition and results of operations.

RISKS RELATING TO THE CORPORATION’S BUSINESS

Certain funding sources may not be available to us, and our funding sources may prove insufficient and/or costly to replace.

FirstBank relies primarily on customer deposits, the issuance of brokered CDs, and advances from the FHLB of New York to maintain its lending activities and to replace certain maturing liabilities. As of December 31, 2024, we had $478.1 million in brokered

CDs outstanding, representing approximately 3% of our total deposits. Approximately $226.1 million, or 47% in brokered CDs mature over the twelve months ending December 31, 2025, and the average remaining term to maturity of the brokered CDs outstanding as of December 31, 2024 was approximately 1.5 years. None of these brokered CDs are callable at the Corporation’s option. In addition, the Corporation had $500.0 million of long-term FHLB advances outstanding as of December 31, 2024, with an average remaining term to maturity of 1.48 years.

Although FirstBank has historically been able to replace maturing deposits and advances, we may not be able to replace these funds in the future if our financial condition or general market conditions change. If we are unable to maintain access to funding sources, our results of operations and liquidity would be adversely affected.

Alternate sources of funding may carry higher costs than sources currently utilized. If we are required to rely heavily on more expensive funding sources, profitability would be adversely affected.

We may determine to seek debt financing in the future to achieve our long-term business objectives. Additional borrowings, if sought, may not be available to us, or if available, may not be on acceptable terms. The availability of additional financing will depend on a variety of factors, such as market conditions, the general availability of credit, our credit ratings and our credit capacity. In addition, FirstBank may seek to sell loans as an additional source of liquidity. If additional financing sources are unavailable or are not available on acceptable terms, our profitability and future prospects could be adversely affected.

Downgrades in our credit ratings could further increase the cost of borrowing funds.

The Corporation’s ability to access new non-deposit sources of funding could be adversely affected by downgrades in our credit ratings. The Corporation’s liquidity is to a certain extent contingent upon its ability to obtain external sources of funding to finance its operations. The Corporation’s current credit ratings and any downgrades in such 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 results of operations.

We depend on cash dividends from FirstBank to meet our cash obligations.

As a holding company, dividends from FirstBank, our banking subsidiary, have provided a substantial portion of our cash flow used to service the interest payments on our TRuPs and other obligations. FirstBank is limited by law in its ability to make dividend payments and other distributions to us based on its earnings and capital position. A failure by FirstBank to generate sufficient cash flow to make dividend payments to us may have a negative impact on our results of operations and financial condition.

Our level of non-performing assets may adversely affect our future results of operations.

Although non-performing assets decreased by $7.6 million to $118.3 million as of December 31, 2024, or 6%, from $125.9 million as of December 31, 2023, we continue to have a relevant amount of nonaccrual loans. If we are unable to effectively maintain the quality of our loan portfolio, our financial condition and results of operations may be materially and adversely affected.

Our ACL may not be adequate to cover actual losses, and we may be required to materially increase our ACL, which may adversely affect our capital ratios, financial condition and results of operations.

We are subject, among other things, to the risk of loss from loan defaults and foreclosures with respect to the loans we originate and purchase. We recognize periodic credit loss expenses on loans, which leads to reductions in our income from operations, in order to maintain our ACL on loans at a level that our management deems to be appropriate based upon an assessment of the quality of the loan and lease portfolios. Management may fail to accurately estimate the level of credit losses or may have to increase our credit loss expense on loans in the future as a result of new information regarding existing loans, future increases in nonaccrual loans beyond what was forecasted, foreclosure actions and loan modifications, changes in current and expected economic and other conditions affecting borrowers or for other reasons beyond our control. In addition, the bank regulatory agencies periodically review the adequacy of our ACL on loans and may require an increase in the credit loss expense on loans or the recognition of additional classified loans and loan charge-offs, based on judgments that differ from those of management.

The level of the ACL reflects management’s estimates based upon various assumptions and judgments as to specific credit risks;
evaluation of industry concentrations; loan loss experience; current loan portfolio quality; present economic, political and regulatory conditions; unidentified losses inherent in the current loan portfolio and reasonable and supportable forecasts. The determination of the appropriate level of the ACL on loans inherently involves a high degree of subjectivity and requires management to make significant estimates and judgments regarding current credit risks and future trends, all of which may undergo material changes. If our estimates prove to be incorrect, our ACL on loans may not be sufficient to cover losses in our loan portfolio and our credit loss expense on loans could increase substantially.

In addition, any increases in our credit loss expense on loans or any loan losses in excess of our ACL on loans could have a material adverse effect on our future capital ratios, financial condition and results of operations.

The Corporation’s force-placed insurance policies could be disputed by the customer.

The Corporation maintains force-placed insurance policies that have been put into place when a borrower’s insurance policy on a property has been canceled, lapsed or was deemed insufficient and the borrower did not secure a replacement policy. A borrower may make a claim against the Corporation under such force-placed insurance policy, and the failure of the Corporation to resolve such a claim to the borrower’s satisfaction may result in a dispute between the borrower and the Corporation, which if not adequately resolved, could have an adverse effect on the Corporation.

Defective and repurchased loans may harm our business and financial condition.

In connection with the sale and securitization of loans, we are required to make a variety of customary representations and warranties relating to the loans sold or securitized. Our obligations with respect to these representations and warranties are generally outstanding for the life of the loan, and relate to, among other things, the following: (i) compliance with laws and regulations; (ii)
underwriting standards; (iii) the accuracy of information in the loan documents and loan files; and (iv) the characteristics and enforceability of the loan.

A loan that does not comply with the representations and warranties made may take longer to sell, may impact our ability to obtain third-party financing for the loan, and may not be saleable or may be saleable only at a significant discount. If such a loan is sold before we detect non-compliance, we may be obligated to repurchase the loan and bear any associated loss directly, or we may be obligated to indemnify the purchaser against any loss, either of which could reduce our cash available for operations and liquidity.
Management believes that it has established controls to ensure that loans are originated in accordance with the secondary market’s requirements, but certain employees may make mistakes or may deliberately violate our lending policies.

Our controls and procedures may fail or be circumvented, our risk management policies and procedures may be inadequate and operational risks could adversely affect our consolidated results of operations.

We may fail to identify and manage risks related to a variety of aspects of our business, including, but not limited to, liquidity risk;
interest rate risk; market risk; credit risk; operational risk; legal, regulatory and compliance risk; reputational risk; model risk; capital

risk; strategic risk; and information technology and cybersecurity risk. We have adopted and periodically improve various controls, procedures, policies and systems to monitor and manage risk. Any improvements to our controls, procedures, policies and systems, however, may not be adequate to identify and manage the risks in our various businesses. If our risk framework is ineffective, either because it fails to keep pace with changes in the financial markets or our businesses or for other reasons, we could incur losses, suffer reputational damage, or find ourselves out of compliance with applicable regulatory mandates or expectations.

We may also be subject to disruptions from external events, such as natural disasters and cyber-attacks, which could cause delays or disruptions to operational functions, including information processing and financial market settlement functions. In addition, our customers, vendors and counterparties could suffer from such events. Should these events affect us, or the customers, vendors or 27

counterparties with which we conduct business, our consolidated results of operations could be negatively affected. When we record balance sheet reserves for probable loss contingencies related to operational losses, we may be unable to accurately estimate our potential exposure, and any reserves we establish to cover operational losses may not be sufficient to cover our actual financial exposure, which may have a material impact on our consolidated results of operations or financial condition for the periods in which we recognize the losses.

Our failure to attract and retain a qualified workforce could harm our overall business and results of operations.

The Corporation’s success depends, in large part, on its ability to attract and retain skilled, experienced personnel. Competition for qualified candidates in the activities and markets that the Corporation and FirstBank serves is intense, and while the Corporation invests significantly in the training and development of its employees, it may not be able to hire people or to retain them. In addition, high inflation has impacted both cost structure and employee demand for wage growth, which may lead to sustained higher turnover rates. If the Corporation is unable to retain its most qualified employees, its performance and competitive positioning could be materially adversely affected.

Our businesses may be adversely affected by litigation.

We have, in the past, been party to claims and legal actions by our customers, or subject to regulatory supervisory actions by the government on behalf of customers, relating to our performance of fiduciary or contractual responsibilities. In the past, we have also

been subject to securities class action litigation by our shareholders and we have also faced employment lawsuits and other legal claims. In any future claims or actions, demands for substantial monetary damages may be asserted against us, resulting in financial liability or an adverse effect on our reputation among investors or on customer demand for our products and services. A securities class action suit against us in the future could result in substantial costs, potential liabilities and the diversion of management’s attention and resources. We may be unable to accurately estimate our exposure to litigation risk when we record balance sheet reserves for probable loss contingencies. As a result, reserves we establish to cover any settlements or judgments may not be sufficient to cover our actual financial exposure, which has occurred in the past and may occur in the future, resulting in a material adverse impact on our consolidated results of operations or financial condition.

In the ordinary course of our business, we are also subject to various regulatory, governmental and law enforcement inquiries, investigations and subpoenas. These may be directed generally to participants in the businesses in which we are involved or may be specifically directed at us. In regulatory enforcement matters, claims for disgorgement, the imposition of penalties and the imposition of other remedial sanctions are possible.

The resolution of legal actions or regulatory matters, when unfavorable, has had, and could in the future have, a material adverse effect on our consolidated results of operations for the quarter in which such actions or matters are resolved or a reserve is established.

Our businesses may be negatively affected by adverse publicity or other reputational harm.

Our relationships with many of our customers are predicated upon our reputation as a fiduciary and a service provider that adheres to the highest standards of ethics, service quality and regulatory compliance. Adverse publicity, regulatory actions, litigation,

operational failures, the failure to meet customer expectations and other issues with respect to one or more of our businesses, including FirstBank as our banking subsidiary, could materially and adversely affect our reputation, or our ability to attract and retain customers or obtain sources of funding for the same or other businesses. Preserving and enhancing our reputation also depends on maintaining systems and procedures that address known risks and regulatory requirements, as well as our ability to identify and mitigate additional risks that arise due to changes in our businesses, the market places in which we operate, the regulatory environment and customer expectations. If we fail to promptly address matters that bear on our reputation, our reputation may be materially adversely affected and our business may suffer.

Any impairment of our goodwill or other intangible assets may adversely affect our operating results.

We review goodwill for impairment annually and assess other intangible assets periodically. If goodwill or other intangibles are determined to be impaired, we may be required to record a charge to earnings. Impairment risk factors include deterioration in financial performance of the reporting unit, declining market valuation of the Corporation or comparable institutions, and adverse economic conditions impacting expected cash flows. During the fourth quarter of 2024, a qualitative goodwill impairment analysis determined that the fair value of our reporting units exceeded their carrying value; therefore, no quantitative impairment was recorded.

As of December 31, 2024, our goodwill book value was $38.6 million, all recorded at FirstBank. Future goodwill impairments could reduce earnings and affect FirstBank’s ability to pay dividends to the Corporation, subject to regulatory approval. While a goodwill impairment would not impact our tangible book value or regulatory capital, it could reduce reported earnings.

Recognition of deferred tax assets is dependent upon the generation of future taxable income by the Bank.

As of December 31, 2024, the Corporation had a deferred tax asset of $136.4 million (net of a valuation allowance of $119.1 million, including a valuation allowance of $98.5 million against the deferred tax assets of FirstBank). Under the PR Tax Code, the

Corporation and its subsidiaries, including FirstBank, are treated as separate taxable entities and are not entitled to file consolidated tax returns. Accordingly, in order to obtain a tax benefit from a NOL, a particular subsidiary must be able to demonstrate sufficient taxable income within the applicable NOL carry-forward period. Pursuant to the PR Tax Code, the carry-forward period for NOLs incurred during taxable years commencing after December 31, 2012 is 10 years. Accounting for income taxes requires that companies assess whether a valuation allowance should be recorded against their deferred tax asset based on an assessment of the amount of the deferred tax asset that is more likely than not to be realized. Due to significant estimates utilized in determining the valuation allowance and the potential for changes in facts and circumstances in the future, the Corporation may not be able to reverse the remaining valuation allowance or may need to increase its current deferred tax asset valuation allowance.

The Corporation’s judgments regarding tax accounting policies and the resolution of tax disputes may impact the Corporation’s earnings and cash flow, and changes in the tax laws of multiple jurisdictions can materially affect our operations, tax obligations,

and effective tax rate.

Significant judgment is required in determining the Corporation’s effective tax rate and in evaluating its tax positions. The Corporation provides for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement criteria prescribed by applicable generally accepted accounting principles in the United States (“GAAP”).

Fluctuations in federal, state, local, and foreign taxes or a change to uncertain tax positions, including related interest and penalties, may impact the Corporation’s effective tax rate. When particular tax matters arise, a number of years may elapse before such matters

are audited and finally resolved. In addition, the Puerto Rico Department of Treasury (“PRTD”), the U.S. Internal Revenue Service (“IRS”), and the tax authorities in the jurisdictions in which we operate may challenge our tax positions and we may estimate and provide for potential liabilities that may arise out of tax audits to the extent that uncertain tax positions fail to meet the recognition standard under applicable GAAP. Unfavorable resolution of any tax matter could increase the effective tax rate and could result in a material increase in our tax expense. Resolution of a tax issue may require the use of cash in the year of resolution.

First BanCorp. is subject to Puerto Rico income tax on its income from all sources. FirstBank is treated as a foreign corporation for U.S. and USVI income tax purposes and is generally subject to U.S. and USVI income tax only on its income from sources within the U.S. and USVI or income effectively connected with the conduct of a trade or business in those jurisdictions. The USVI jurisdiction imposes income taxes based on the U.S. Internal Revenue Code under the “mirror system” established by the Naval Service Appropriations Act of 1922. However, the USVI jurisdiction also imposes an additional 10% surtax on the USVI tax liability, if any.

These tax laws are complex and subject to different interpretations. We must make judgments and interpretations about the application of these inherently complex tax laws when determining our provision for income taxes, our deferred tax assets and liabilities, and our valuation allowance. In addition, legislative changes, particularly changes in tax laws, could adversely impact our results of operations.

Changes in applicable tax laws in Puerto Rico, the U.S., or other jurisdictions or tax authorities’ new interpretations could result in increases in our overall taxes and the Corporation’s financial condition or results of operations may be adversely impacted.

Our ability to use our NOL carryforwards may be limited.

The Corporation has U.S. and USVI sourced NOL carryforwards. Section 382 of the U.S. Internal Revenue Code (“Section 382”)
limits the ability to utilize U.S. and USVI NOLs for income tax purposes, respectively, at such jurisdictions following an event of an ownership change. Generally, an “ownership change” occurs when certain shareholders increase their aggregate ownership by more than 50 percentage points over their lowest ownership percentage over a three-year testing period. Section 1034.04(u) of the PR Tax Code is significantly similar to Section 382. However, Ac No. 60 of 2019 amended the PR Tax Code to repeal the corporate NOL carryover limitations upon change in control for taxable years beginning after December 31, 2018.

Upon the occurrence of a Section 382 ownership change, the use of NOLs attributable to the period prior to the ownership change is subject to limitations and only a portion of the U.S. and USVI NOLs, as applicable, may be used by the Corporation to offset the annual U.S. and USVI taxable income, if any. In 2017, the Corporation completed a formal ownership change analysis within the meaning of Section 382 covering a comprehensive period, and concluded that an ownership change, for U.S. and USVI purposes only, had occurred during such period. The Section 382 limitation has resulted in higher U.S. and USVI income tax liabilities than we would have incurred in the absence of such limitation.

It is possible that the utilization of our U.S. and USVI NOLs could be further limited due to future changes in our stock ownership, as a result of either sales of our outstanding shares or issuances of new shares that could separately or cumulatively trigger an 29

ownership change and, consequently, a Section 382 limitation. Any further Section 382 limitations may result in greater U.S. and USVI tax liabilities than we would incur in the absence of such a limitation and any increased liabilities could adversely affect our earnings and cash flow. We may be able to mitigate the adverse effects associated with a Section 382 limitation in the U.S. and USVI to the extent that we could credit any resulting additional U.S. and USVI tax liability against our tax liability in Puerto Rico. However, our ability to reduce our Puerto Rico tax liability through such a credit or deduction will depend on our tax profile at each annual taxable period, which is dependent on various factors.

RISKS RELATING TO CYBERSECURITY AND TECHNOLOGY

Cyber-attacks, system risks and data security breaches to our computer systems and networks or those of third-party service providers could adversely affect our ability to conduct business, manage our exposure to risk or expand our business, result in the disclosure or misuse of confidential or proprietary information, increase our costs to maintain and update our operational and security systems and infrastructure, and present significant reputational, legal and regulatory costs.

Our business is highly dependent on the security, controls and efficacy of our infrastructure, computer and data management systems, as well as those of our customers, suppliers, and other third parties. To access our network, products and services, our employees, customers, suppliers, and other third parties, including downstream service providers, the financial services industry and financial data aggregators, with whom we interact, on whom we rely or who have access to our customers’ personal or account information, increasingly use personal mobile devices or computing devices that are outside of our network and control environments and are subject to their own cybersecurity risks. Our business relies on effective access management and the secure collection, processing, transmission, storage and retrieval of confidential, proprietary, personal and other information in our computer and data management systems and networks, and in the computer and data management systems and networks of third parties.

Information security risks for financial institutions have significantly increased in recent years, especially given the increasing sophistication and activities of organized computer criminals, hackers, and terrorists and our expansion of online and digital customer services to better meet our customer’s needs. These threats may derive from fraud or malice on the part of our employees or thirdparty providers or may result from human error or accidental technological failure. These threats include cyber-attacks, such as computer viruses, malicious or destructive code, phishing attacks, denial of service attacks, or other security breach tactics that could result in the unauthorized release, gathering, monitoring, misuse, loss, destruction, or theft of confidential, proprietary, and other information, including intellectual property, of ours, our employees, our customers, or third parties, damages to systems, or otherwise material disruption to our or our customers’ or other third parties’ network access or business operations, both domestically and internationally.

While we maintain a Corporate Information Security Program that continuously monitors cyber-related risks and ultimately ensures protection for the processing, transmission, and storage of confidential, proprietary, and other information in our computer systems and networks, as well as a Vendor Management Program to oversee third party and vendor risks, there is no guarantee that we will not be exposed to or be affected by a cybersecurity incident.

Cyber threats are rapidly changing, and future attacks or breaches could lead to other security breaches of the networks, systems, or devices that our customers use to access our integrated products and services, which, in turn, could result in unauthorized disclosure, release, gathering, monitoring, misuse, loss or destruction of confidential, proprietary, and other information (including account data information) or data security compromises. As cyber threats continue to evolve, we may be required to expend significant additional resources to modify or enhance our protective measures, investigate, and remediate any information security vulnerabilities or incidents and develop our capabilities to respond and recover. The full extent of a particular cyberattack, and the steps that the Corporation may need to take to investigate such attack, may not be immediately clear, and it could take considerable additional time for us to determine the complete scope of information compromised, at which time the impact on the Corporation and measures to recover and restore to a business-as-usual state may be difficult to assess. These factors may also inhibit our ability to provide full and reliable information about the cyberattack to our customers, third-party vendors, regulators, and the public.

A successful penetration or circumvention of our system security, or the systems of our customers, suppliers, and other third parties, could cause us serious negative consequences, including significant operational, reputational, legal, and regulatory costs and concerns.

Any of these adverse consequences could adversely impact our results of operations, liquidity, and financial condition. In addition, our insurance policies may not be adequate to compensate us for the potential costs and other losses arising from cyber-attacks, failures of information technology systems, or security breaches, and such insurance policies may not be available to us in the future on economically reasonable terms, or at all. Insurers may also deny us coverage as to any future claim. Any of these results could harm our growth prospects, financial condition, business, and reputation.

Our operational or security systems or infrastructure, or those of third parties, could fail or be breached. Any such future incidents could potentially disrupt our business and adversely impact our results of operations, liquidity, and financial condition,

as well as cause legal or reputational harm.

The potential for operational risk exposure exists throughout our business and, as a result of our interactions with, and reliance on, third parties, is not limited to our own internal operational functions. Our operational and security systems and infrastructure,

including our computer systems, data management, and internal processes, as well as those of third parties that perform key aspects of our business operations, such as data processing, information security, recording and monitoring transactions, online banking interfaces and services, internet connections, and network access are integral to our performance. We rely on our employees and third parties in our day-to-day and ongoing operations, who may, because of human error, misconduct, malfeasance, failure, or breach of our or of third-party systems or infrastructure, expose us to risk.

Our ability to implement backup systems and other safeguards with respect to third-party systems is more limited than with respect to our own systems. In addition, our financial, accounting, data processing, backup, or other operating or security systems and infrastructure may fail to operate properly or become disabled, damaged, or otherwise compromised as a result of a number of factors, including events that are wholly or partially beyond our control. We may need to take our systems offline if they become infected with malware or a computer virus or because of another form of cyberattack. If backup systems are utilized, they may not process data as quickly as our primary systems and some data might not have been saved to backup systems, potentially resulting in a temporary or permanent loss of such data.

We frequently update our systems to support our operations and growth and to remain compliant with applicable laws, rules, and regulations. In addition, we review and strengthen our security systems in response to any cyber incident. Such strengthening may

entail significant costs and risks associated with implementing new systems and integrating them with existing ones, including potential business interruptions and the risk that this strengthening may not be entirely effective. Implementation and testing of controls related to our computer systems, security monitoring, and retaining and training personnel required to operate our systems also entail significant costs. Such operational risk exposures could adversely impact our operations, liquidity, and financial condition, as well as cause reputational harm. In addition, we may not have adequate insurance coverage to compensate for losses from a major interruption.

We must respond to rapid technological changes, and these changes may be more difficult or expensive than anticipated. We may also be negatively affected if we fail to identify and address operational risks associated with the introduction of or changes to products and services, or if we fail to respond to emerging technologies that seek to displace traditional financial services.

Like most financial institutions, FirstBank significantly depends on technology to deliver its products and other services and to otherwise conduct business. To remain technologically competitive and operationally efficient, FirstBank invests in system upgrades, new technological solutions, and other technology initiatives. If competitors introduce new products and services embodying new technologies, or if new industry standards and practices emerge, our existing product and service offerings, technology and systems may become obsolete. Furthermore, if we fail to adopt or develop new technologies or to adapt our products and services to emerging industry standards, we may lose current and future customers, which could have a material adverse effect on our business, financial condition and results of operations. The financial services industry is changing rapidly and, in order to remain competitive, we must continue to enhance and improve the functionality and features of our products, services and technologies. These changes may be more difficult or expensive to implement than we anticipate.

We may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to our customers. Failure to successfully keep pace with technological change affecting the financial services industry could have a material adverse effect on our business, financial condition and results of operations.

Additionally, some recent innovations may trend toward replacing traditional banks as financial service providers rather than merely augmenting those services. For example, companies which claim to offer applications and services based on artificial intelligence are beginning to compete much more directly with traditional financial services companies in areas involving personal advice, including high-margin services such as financial planning and wealth management. The low-cost, high-speed nature of these “robo-advisor” services can be especially attractive to younger, less-affluent clients and potential clients, as well as persons interested in “self-service” investment management. Similarly, inventions based on blockchain technology eventually may be the foundation for greatly enhancing transactional security throughout the banking industry, but also eventually may reduce the need for banks as secure deposit-keepers and intermediaries. Any of the foregoing consequences could materially and adversely affect our businesses and results of operations.

The Corporation is subject to stringent and changing privacy laws, regulations, and standards as well as policies, contracts, and other obligations related to data privacy and security. Our failure to comply with privacy laws and regulations, as well as other

legal obligations, could have a material adverse effect on our business.

State, federal, and foreign governments are increasingly enacting laws and regulations governing the collection, use, retention, sharing, transfer, and security of personally identifiable information and data. A variety of federal, state, local, and foreign laws and

regulations, orders, rules, codes, regulatory guidance, and certain industry standards regarding privacy, data protection, consumer protection, information security, and the processing of personal information and other data apply to our business. State laws are changing rapidly, and new legislation proposed or enacted in a number of other states imposes, or has the potential to impose, additional obligations on companies that process confidential, sensitive and personal information, and will continue to shape the data privacy environment nationally. The U.S. federal government is also focused on privacy matters. Any failure by us or any of our business partners to comply with applicable laws, rules, and regulations may result in investigations or actions against us by governmental entities, private claims and litigation, fines, penalties or other liabilities. Such events may increase our expenses, expose us to liabilities, and impair our reputation, which could have a material adverse effect on our business. While we aim to comply with applicable data protection laws and obligations in all material respects, there is no assurance that we will not be subject to claims that we have violated such laws and obligations, will be able to successfully defend against such claims, or will not be subject to significant fines and penalties in the event of non-compliance. Additionally, to the extent multiple state-level laws are introduced in the U.S. with inconsistent or conflicting standards and there is no federal law to preempt such laws, compliance with such laws could be difficult and costly, or impossible, to achieve, and we could be subject to fines and penalties in the event of non-compliance.

The current U.S. presidential administration has advocated for reduction of financial services regulation. This may include amendments to the Dodd-Frank Act and other federal banking laws, as well as structural changes to, or the elimination of, the CFPB.
Consequently, rulemaking and regulatory guidance previously issued by such agencies or prior administrations may be rolled back or modified. The ultimate impact of new or amended federal banking statutes, or changes to certain federal agencies, like the CFPB, is uncertain at this time.

RISK RELATING TO THE REGULATION OF OUR INDUSTRY

We are subject to certain regulatory restrictions that may adversely affect our operations.

We are subject to supervision and regulation by the Federal Reserve Board and the FDIC. We are a bank holding company and a financial holding company under the Bank Holding Company Act of 1956, as amended. The Bank is also subject to supervision and regulation by OCIF.

Under federal law, financial holding companies are permitted to engage in a broader range of “financial” activities than those permitted to bank holding companies that are not financial holding companies. A financial holding company that ceases to meet

certain standards is subject to a variety of restrictions, depending on the circumstances, including the prohibition from undertaking new activities or acquiring shares or control of other companies. If we fail to comply with the requirements from our regulators, we may become subject to regulatory enforcement action and other adverse regulatory actions that might have a material and adverse effect on our operations.

The FDIC insures deposits at FDIC-insured depository institutions up to certain limits (currently, $250,000 per depositor account).
The FDIC charges insured depository institutions premiums to maintain the DIF. In the event of a bank failure, the FDIC takes control

of a failed bank and, if necessary, pays all insured deposits up to the statutory deposit insurance limits using the resources of the DIF.
The FDIC is required by law to maintain adequate funding of the DIF, and the FDIC may increase premium assessments to maintain such funding. The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) requires the FDIC to increase the DIF’s reserves against future losses, which will require institutions with assets greater than $10 billion, such as FirstBank, to bear an increased responsibility for funding the prescribed reserve to support the DIF.

The FDIC may further increase FirstBank’s premiums or impose additional assessments or prepayment requirements in the future.
The Dodd-Frank Act removed the statutory cap for the reserve ratio, leaving the FDIC free to set this cap going forward.

Our compensation practices are subject to oversight by the Federal Reserve Board and the FDIC. Any deficiencies in our compensation practices may be incorporated into our supervisory ratings, which can affect our ability to make acquisitions or

perform other actions.

Our compensation practices are subject to oversight by the Federal Reserve Board and the FDIC. As discussed in Part I, Item 1, “Business” of this Form 10-K, the Corporation currently is subject to the interagency guidance governing the incentive compensation activities of regulated banks and bank holding companies, and other financial regulators have also implemented regulations regarding compensation practices. Our failure to satisfy these restrictions and guidelines could expose us to adverse regulatory criticism, lowered supervisory ratings, and restrictions on our operations and acquisition activities.

We are subject to regulatory capital adequacy guidelines, and, if we fail to meet these guidelines, our business and financial

condition will be adversely affected.

We are subject to stringent regulatory capital requirements. Although the Corporation and FirstBank met general well-capitalized capital ratios as of December 31, 2024, and we expect both companies will continue to exceed the minimum risk-based and leverage

capital ratio requirements for well-capitalized status under the current capital rules, we cannot assure that we will remain at such levels. If we fail to meet these minimum capital guidelines and other regulatory requirements, our business and financial condition will be materially and adversely affected. If we fail to maintain certain capital levels or are deemed not well managed under regulatory exam procedures, or if we experience certain regulatory violations, our status as a financial holding company, and our ability to offer certain financial products will be compromised and our financial condition and results of operations could be adversely affected.

Monetary policies and regulations of the Federal Reserve Board could adversely affect our business, financial condition and

results of operations.

In addition to being affected by general economic conditions, our earnings and growth are affected by the policies of the Federal Reserve Board. An important function of the Federal Reserve Board is to regulate the money supply and credit conditions. Among the

instruments used by the Federal Reserve Board to implement these objectives are open market operations in U.S. government securities, adjustments of the discount rate and changes in reserve requirements for bank deposits. These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits. Their use also affects interest rates charged on loans or paid on deposits.

The monetary policies and regulations of the Federal Reserve Board, which include d, but were not limited to, multiple increases in the federal funds rate to reduce inflation, have had a significant effect on the operating results of commercial banks and are expected to continue to do so in the future. The effects of such policies upon our business, financial condition and results of operations have been adverse in the past and may be adverse in the future.

We are subject to numerous laws designed to protect consumers, including the Community Reinvestment Act and fair lending laws, and failure to comply with these laws could lead to a wide variety of sanctions.

The Community Reinvestment Act, the Equal Credit Opportunity Act, the Fair Housing Act and other fair lending laws and regulations impose nondiscriminatory lending requirements on financial institutions. The U.S. Department of Justice and other federal

agencies are responsible for enforcing these laws and regulations. A successful regulatory challenge to an institution's performance under the Community Reinvestment Act, the Equal Credit Opportunity Act, the Fair Housing Act or any of the other fair lending laws and regulations could result in a wide variety of sanctions, including damages and civil money penalties, injunctive relief, restrictions on mergers and acquisitions activity, restrictions on expansion and restrictions on entering new business lines. Private parties may also have the ability to challenge an institution's performance under fair lending laws in private class action litigation. Such actions could have a material adverse effect on our business, financial condition and results of operations.

We face a risk of noncompliance and enforcement action related to the Bank Secrecy Act and other anti-money laundering

statutes and regulations.

The Bank Secrecy Act, the USA PATRIOT Act, and other laws and regulations require financial institutions to institute and maintain an effective anti-money laundering program and file suspicious activity and currency transaction reports as appropriate, among other duties. The Financial Crimes Enforcement Network is authorized to impose significant civil money penalties for violations of those requirements and has recently engaged in coordinated enforcement efforts with the individual federal banking regulators, as well as the U.S. Department of Justice’s Drug Enforcement Administration. We are also subject to increased scrutiny of our compliance with trade and economic sanctions requirements and rules enforced by OFAC. If our policies, procedures and systems are deemed deficient, we would be subject to liability, including fines and regulatory actions, which may include restrictions on our ability to pay dividends and the necessity to obtain regulatory approvals to proceed with certain aspects of our business plan, including our acquisition plans. Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us. Any of these results could have a material adverse effect on our business, financial condition and results of operations.

Item 1B. Unresolved Staff Comments

None.

Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy The Corporation recognizes the significance of cybersecurity in the financial industry and the potential risks associated, such as the risks arising from the loss of confidentiality, integrity, or availability of information systems. The Corporation’s processes to identify, assess, and monitor material risks from cybersecurity threats are part of its Enterprise Risk Management (“ERM”) Program, under which the Corporation has implemented a comprehensive Corporate Information Security Program (“CISP”). Cybersecurity risk is managed as part of the overall information technology risk, under the direction of the Corporate Security Office (“CSO”) led by the Corporate Security Officer (“CSO Officer”), who directly reports to the Chief Operations Officer. The CSO Officer also serves as Chief Information Security Officer (“CISO”). The CISP outlines the Corporation’s overall vision, direction, and governance to protect the confidentiality, integrity, and availability of customer information and seeks to prevent unauthorized access as required by regulatory guidelines and industry security best practices. The CISP is based on well-renowned frameworks such as the International Organizational Standard ISO 27000 series and the NIST Cybersecurity Framework. As such, it serves as a guide for the implementation of security safeguards across the Corporation and its subsidiaries. The CISP also addresses cybersecurity breaches and procedures for appropriate response efforts, including any required notification, depending on the severity of the specific security incident. In addition, the CISP incorporates a risk-based approach to ensure that risk is treated in a consistent and effective matter and is designed to protect classified information to prevent disclosure to unauthorized individuals; prioritize the use of information security resources by concentrating on critical business applications; develop quality, cost-effective, and reliable systems; ensure the proper and secure disposal of sensitive information; and implement adequate processes to ensure compliance. The ERM Program includes a Corporate Incident Response Program, which features a risk-based escalation process to manage corporate incidents, including cybersecurity incidents, and notify the Risk Committee of the Board of Directors and applicable stakeholders as appropriate. The Corporation incorporates the Information Technology (“IT”) Risk Unit of the ERM Department, which is comprised of several members such as IT Risk Managers and the ERM Director who is part of senior management, as well as external expertise, in the review of its processes, including an independent internal assessment of cybersecurity measures and controls. The Corporation also invests in threat intelligence, vulnerability management, and incident response drills. Furthermore, all of the Corporation’s employees and consultants with access to the Corporation’s network are required to complete a comprehensive cybersecurity awareness program on an annual basis. Additionally, awareness and training on information technology and cybersecurity risk is provided to the Board on a regular basis. The Corporation has a Vendor Management Program and a Third-Party Risk Management function to manage the cybersecurity risks associated with conducting business with third-party vendors, which includes the requirement for third-party vendors to implement appropriate measures to ascertain security and confidentiality of the Corporation’s resources. The Corporation places vendors into tiers based on the inherent risk due to the nature of the relationship with that vendor to determine any additional security requirements commensurate to such level of risk. The Corporation does not believe that risks from cybersecurity threats or attacks, including as a result of any previous cybersecurity incidents, have materially affected the Corporation’s business strategy, results of operations or financial condition as of December 31, 2024. While the Corporation continues to closely monitor cyber risk and has implemented processes that are intended to assess, identify, and manage material risks from cybersecurity threats, security controls, no matter how well designed or implemented, may only partially mitigate and not fully eliminate these risks. Events, when detected by security tools or third parties, may not always be immediately understood or acted upon. See Item 1A, “Risk Factors – Risks Relating to Cybersecurity and Technology” for more information on how cybersecurity risk could adversely affect the Corporation, which should be read in conjunction with this Item 1C.

Governance

To effectively manage oversight of the CISP’s governance and cybersecurity risk management, the Board has delegated such responsibility to the Risk Committee.Responsibility for risk oversight and management generally lies with the Corporation’s Board of Directors.

As part of its oversight, the Risk Committee receives reports from the Executive Risk Management Committee and IT Steering Committee, which are committees at the management level, on the Corporation’s cybersecurity processes.
The Corporate Internal Audit Department performs periodic audits of the Corporation’s information security practices and presents them to the Audit Committee of the Board.

The scope of testing is in accordance with applicable regulatory guidance and prudent business practices.
Findings from internal audit procedures are reported to Management and the Audit Committee.The periodicity of testing is determined by the Corporate Internal Audit Department based on their risk assessment.
In addition, the Vendor Management Committee The Risk Committee provides the Board with updated information on the matters discussed in the Risk Committee meetings as it relates to the CISP and the overall information security strategic direction and evaluates and approves (if necessary) reports presented by executive management related to the information security strategic direction of the Corporation.periodically reports to theRisk Committeeabout the Vendor Management program status.

The CSO, led by the CSO Officer, oversees the CISP, its development, and any applicable updates in response to changes in operations and other circumstances, and reports on a quarterly basis to the IT Steering Committee and to the Board’s Risk Committee. The CSO Officer, who has been in charge since 2016, has over 20 years of experience in functional expertise concerning all aspects of information security, integrity and privacy of systems, and data resources, and holds several relevant licenses and/or certifications. Also, certain topics related to information security are presented on an ad hoc basis to the Executive Risk Management Committee. The CSO provides the Board’s Risk Committee regular reports and engages in discussions on the effectiveness of the CISP, including risk mitigation strategy and progress. The Board’s Risk Committee reviews and approves the CISP annually and receives a report on the security safeguards annually.

See “Risk Management – Risk Governance” for more information on the Corporation’s risk governance structure.

Item 2. Properties

As of December 31, 2024, First BanCorp. has ownership in the following principal buildings:

-Headquarters – Located at First Federal Building, 1519 Ponce de León Avenue, San Juan, Puerto Rico. Approximately 51% of this 16-story office building is owned by the Corporation.

-Service Center – Located at 1130 Muñoz Rivera Avenue, San Juan, Puerto Rico. This facility, which is fully occupied by the Corporation, houses over 1,000 employees from Human Resources, Data processing and operations, Administrative Operation, Mortgage operations, collections, and Loss Mitigation, and certain other departments.

-Consumer Lending Center – Located at 876 Muñoz Rivera Avenue, San Juan, Puerto Rico. This three-story facility is fully occupied by the Corporation and accommodates a retail branch, Money Express Headquarters, Auto Wholesale and Retail Financing, and Leasing Financing, among others.

The Corporation owns 18 retail branches and 10 office centers, other facilities, and/or parking lots. It leases 87 branch premises, loan and office centers and other facilities. In certain situations, financial services such as mortgage and insurance businesses and commercial banking services are in the same building or branch. All of these premises are in Puerto Rico, Florida, the USVI and the BVI. Management believes that the Corporation’s properties are well maintained and are suitable for the Corporation’s business as presently conducted.

Item 3. Legal Proceedings

Reference is made to Note 27 – “Regulatory Matters, Commitments and Contingencies” to the audited consolidated financial statements included in Part II, Item 8 of this Form 10-K, which is incorporated herein by reference.

Item 4. Mine Safety Disclosure.

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities

INFORMATION ABOUT MARKET AND HOLDERS

The Corporation’s common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol FBP. On February 21, 2025, there were 415 holders of record of the Corporation’s common stock, not including beneficial owners whose shares are held in the name of brokers or other nominees.

As of December 31, 2024 and 2023, the Corporation had 59,794,239 and 54,360,304 shares held as treasury stock, respectively.
Refer to “Stock Repurchases” for more information on common stock repurchases during the fourth quarter of 2024 held as treasury stock.

DIVIDENDS

Since November 2018, the Corporation has made quarterly cash dividend payments on its shares of common stock. On January 21, 2025, the Corporation announced that its Board of Directors had declared a quarterly cash dividend of $0.18 per common share, which represents an increase of $0.02 per common share, or a 13% increase, compared to its most recent quarterly dividend paid in December 2024. The dividend is payable on March 7, 2025 to shareholders of record at the close of business on February 21, 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 Directors at the relevant times. Information regarding restrictions on dividends, is set forth in Part I, Item 1, “Business -Supervision and Regulation– Dividend Restrictions” and incorporated herein by reference.

Under the PR Tax Code, dividends paid by the Corporation are subject to tax withholding as follows:

Residents of Puerto Rico

A 15% tax is withheld on dividends paid to individuals, trusts, and estates, unless the taxpayer elects to be taxed at regular rates.
Once this election is made, it is irrevocable. The election allows the taxpayer to include the eligible dividends received in ordinary income and take a credit for the amount of tax withheld in excess, if any. In certain cases, dividends may be included in the taxpayer’s Alternative Minimum Tax (“AMT”) calculation.

Nonresident U.S. Citizens

Dividends paid to a U.S. citizen who is not a resident of Puerto Rico are generally subject to a 15% Puerto Rico income tax, though partial or total exemptions may apply under section 1062.08 of the PR Tax Code.

Nonresident foreign individuals (non-US citizens)

Dividends paid to any individual who are neither United States citizens nor Puerto Rico residents are generally subject to a 15% Puerto Rico withholding tax.

Foreign Corporations and Partnerships

Entities that do not conduct business in Puerto Rico are subject to a 10% Puerto Rico dividend tax withholding. Entities that conduct business in Puerto Rico must report dividends as ordinary income but are exempt from withholding.

AMT Considerations

Individuals who are residents of Puerto Rico may be subject to Puerto Rico’s AMT, which can include certain categories of taxexempt or preferentially taxed income, such as dividends on the Corporation’s common stock and long-term capital gains. Investors should consult with a tax professional regarding their specific AMT obligations under Puerto Rico law.

STOCK REPURCHASES

Since April 2021, the Corporation’s Board of Directors has announced repurchase program authorizations totaling up to $1.1 billion of the Corporation’s outstanding stock and/or junior subordinated debentures. Repurchases under the programs 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. The Corporation has authorization to repurchase $225 million under the 2023 stock repurchase program and $250 million under the 2024 stock repurchase program, for which it has repurchased 5,846,872 shares of its common stock at an average price of $17.10 for a total cost of $100.0 million during 2024 and 5,080,832 shares of its common stock at an average price of $14.76 for a total cost of $75.0 million during 2023. Also, the Corporation redeemed $100.0 million of junior subordinated debentures, as further explained in Note 10 - “Non-Consolidated Variable Interest Entities (“VIEs”) and Servicing Assets” to the audited consolidated financial statements included in Part II, Item 8 of this Form 10-K. As of December 31, 2024, the Corporation has remaining authorization of $200.0 million. The amount and timing of repurchases will be based on various factors, including our capital requirements, market conditions (including the trading price of our stock), and regulatory and legal considerations.

The following table provides information in relation to the Corporation’s purchases of shares of its common stock during the quarter ended December 31, 2024.

Total Number of

Shares Purchased asApproximate Dollar Value of

Part of PubliclyShares That May Yet be Total Number ofAverage PriceAnnounced Plans orPurchased Under The Plans or PeriodShares PurchasedPaid per ShareProgramsPrograms (in thousands)(1)| October 1, 2024 - October 31, 2024 | 1,254 | $ | 19.40 | -$ | 250,000 |
| --- | --- | --- | --- | --- | --- |
| November 1, 2024 - November 30, 2024 | - | | - | - | 250,000 |
| December 1, 2024 - December 31, 2024 | - | | - | - | 200,000 |
| Total | 1,254(2) | | | - | |

(1)As of December 31, 2024, the Corporation was authorized to purchase up to $225 million of the Corporation’s common stock under the 2023 stock repurchase program. In addition, the Corporation was authorized to purchase up to $250 million that could include repurchases of common stock and/or junior subordinated debentures under the repurchase program that was

publicly announced on July 22, 2024. The Corporation’s repurchase programs do not obligate it to acquire any specific number of shares and do not have an expiration date. The repurchase programs may be modified, suspended, or terminated at any time at the Corporation’s discretion. Repurchases under the programs 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)Consists of 1,254 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.

STOCK PERFORMANCE GRAPH

The following graph shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that First BanCorp. specifically incorporates this information by reference, and shall not otherwise be deemed filed with the SEC.

The graph below compares the cumulative total stockholder return of First BanCorp. during the measurement period with the cumulative total return, assuming reinvestment of dividends, of the S&P 500 Index and the S&P Supercom Banks Index (the “Peer Group”). The Performance Graph assumes that $100 was invested on December 31, 2019 in each of First BanCorp. common stock, the S&P 500 Index and the Peer Group. The comparisons in this table are set forth in response to SEC disclosure requirements and are therefore not intended to forecast or be indicative of future performance of First BanCorp.’s common stock.

The cumulative total stockholder return was obtained by dividing (i) the cumulative amount of dividends per share, assuming dividend reinvestment since the measurement point, December 31, 2019, plus (ii) the change in the per share price since the measurement date, by the share price at the measurement date.

Item 6. [Reserved]

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS (“MD&A”)

The following MD&A relates to the accompanying audited consolidated financial statements of First BanCorp. (the “Corporation,” “we,” “us,” “our,” or “First BanCorp.”) and should be read in conjunction with such financial statements and the notes thereto. This

section also presents certain financial measures that are not based on generally accepted accounting principles in the United States of America (“GAAP”). See “Non-GAAP Financial Measures and Reconciliations” below for information about why non-GAAP financial measures are presented, reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures, and references to non-GAAP financial measures reconciliations presented in other sections.

The detailed financial discussion that follows focuses on 2024 results compared to 2023. For a discussion of 2023 results compared to 2022, see Part I, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023, filed on February 28, 2024.

In this discussion and analysis of our financial condition and results of operations, we have included information that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements are not historical facts or statements of current conditions, but instead represent only our beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside our control. By identifying these statements for you in this manner, we are alerting you to the possibility that our actual results, financial condition, liquidity and capital actions may differ materially from the anticipated results, financial condition, liquidity and capital actions in these forward-looking statements. Important factors that could cause our results, financial condition, liquidity and capital actions to differ from those in these statements include, among others, those described in “Risk Factors” in Part I, Item 1A of this Form 10-K.

EXECUTIVE SUMMARY

First BanCorp. is a diversified financial holding company headquartered in San Juan, Puerto Rico offering a full range of financial products to consumers and commercial customers through various subsidiaries. First BanCorp. is the holding company of FirstBank

Puerto Rico (“FirstBank” or the “Bank”) and FirstBank Insurance Agency. Through its wholly -owned subsidiaries, the Corporation operates in Puerto Rico, the United States Virgin Islands (“USVI”), the British Virgin Islands (“BVI”), and the state of Florida, concentrating on commercial banking, residential mortgage loans, credit cards, personal loans, small loans, auto loans and leases, and insurance agency activities.

Significant Events

Economy and Market Update

For the year ended December 31, 2024, the Corporation was able to achieve year-over-year growth on its loan portfolio of approximately $569.0 million or 4.7% and expand its core deposit base by $267.1 million or 2.1%, while safeguarding asset quality

and improving its earnings profile. The U.S. and Puerto Rico economy remain on solid footing driven by positive labor market trends and increased business activity. Unemployment in the Puerto Rico market has continued to decrease during 2024 to 5.4% in December 2024, while in the U.S. the unemployment rate was 4.1% for the same period and real gross domestic product (“GDP”) increased at an annual rate of 2.3%.

The Federal Reserve (the “FED”) has continued to make progress on stabilizing inflation with Consumer Price Index (“CPI”)
reaching 2.9% year-over-year, which is above the 2% target but has allowed the FED to continue its path toward the economy’s soft landing. With a strong labor market, stable economic growth and inflation stabilizing, the market expects the FED to continue lowering interest rates but at a slower pace during 2025.

As we look ahead into 2025, assuming no meaningful changes in deposit balances, the Corporation sees opportunities for net interest income and margin expansion as cash flows from the investment portfolio will be redeployed into loans, higher yielding

securities or used to pay down higher-cost borrowings. Credit quality continues to remain stable in the residential mortgage and commercial loan portfolios while the consumer loan portfolios have shown increases in delinquency levels which are expected to stabilize during the second half of 2025. The Corporation expects its reserve coverage and capital levels will allow it to continue executing its capital plans and continue its strategic technology and branch expansion projects.

Capital Deployment Actions and Dividend Payment Increase

In 2024, the Corporation delivered approximately $306.0 million, or over 100% of 2024 earnings, in the form of capital deployment actions through $100.0 million in repurchases of common stock, $100.0 million in the redemption of outstanding trust-preferred securities (“TruPS”) issued by FBP Statutory Trust II, and approximately $106.0 million in common stock dividends declared. In the aggregate, as of February 21, 2025, the Corporation has remaining authorization of approximately $200.0 million, which it expects to execute during 2025.

On January 21, 2025, the Corporation’s Board of Directors declared a quarterly cash dividend of $0.18 per common share, which represents an increase of $0.02 per common share, or a 13% increase, compared to its most recent quarterly dividend paid in December 2024. The dividend is payable on March 7, 2025 to shareholders of record at the close of business on February 21, 2025.
The increased quarterly dividend level equates to an annualized dividend of $0.72 per common share.

Legislative and Regulatory

A comprehensive discussion of legislative and regulatory matters affecting us can be found in Part I, Item 1, “Business – Supervision and Regulation” of this Form 10-K.

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. The Corporation ’s results of operations also depend on the provision for credit losses, non-interest expenses (such as personnel, occupancy, professional service fees, the FDIC insurance premium, and other costs), non-interest income (mainly service charges and fees on deposits, cards and processing income, and insurance income), gains (losses) on mortgage banking activities, and income taxes.

The Corporation had a net income of $298.7 million ($1.81 per diluted common share), for the year ended December 31, 2024, compared to $302.9 million ($1.71 per diluted common share), for the year ended December 31, 2023. Other relevant selected financial indicators for the periods presented are included below:| | | | | | | Year Ended December 31, | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | 2024 | | | 2023 | | 2022 | |
| Key Performance Indicator: | | (1) | | | | | | | | |
| Return on Average Assets | | (2) | | | 1.58% | | | 1.62% | | 1.57% |
| Return on Average Common Equity | | | (3) | 19.09 | | | 21.86 | | | 18.66 |
| Efficiency Ratio | (4) | | | 51.92 | | | 50.70 | | | 48.25 |

The key drivers of the Corporation’s GAAP financial results for the year ended December 31, 2024, compared to the year ended December 31, 2023, include the following:

●Net interest income for the year ended December 31, 2024 increased to $807.5 million, compared to $797.1 million for the

year ended December 31, 2023, driven by loan growth, partially offset by an increase in interest expense due to higher rates on interest-bearing deposits given the higher interest rate environment and the change in deposit mix reflecting a continued migration from non-interest-bearing and other low-cost deposits to higher-cost deposits. See “Result of Operations – Net Interest Income” below for additional information.

●The provision for credit losses on loans, finance leases, unfunded loan commitments and debt securities for the year ended

December 31, 2024 was $59.9 million, compared to $60.9 million for the year ended December 31, 2023. The results reflect a decrease in provision for the commercial and residential mortgage loan portfolios, which was almost entirely offset by an increase in provision for the consumer loan and finance lease portfolios due to higher charge-off and delinquency levels and portfolio growth.

Net charge-offs totaled $80.8 million for the year ended December 31, 2024, or 0.65% of average loans, compared to $67.4 million, or 0.58% of average loans, for the year ended December 31, 2023, driven by a $22.6 million increase in consumer loans and finance leases net charge-offs, which is net of a $10.0 million recovery associated with the bulk sale of fullycharged off loans, partially offset by a $5.0 million recovery recorded during 2024 on a commercial and industrial (“C&I”)
loan in the Puerto Rico region and a $6.0 million net charge-off recorded during 2023 on a C&I participated loan in the Florida region in the power generation industry. See “Results of Operations – Provision for Credit Losses” and “Risk Management” below for the analysis of the allowance for credit losses (“ACL”) and non-performing assets and related ratios.

●Non-interest income for the year ended December 31, 2024 decreased to $130.7 million, compared to $132.7 million for the year ended December 31, 2023, mainly due to the effect during 2023 of a $3.0 million gain associated with the sale of a banking premise in the Florida region and a $3.6 million gain recognized from a legal settlement , partially offset by increases of $2.8 million in card and processing income and $2.1 million in revenues from mortgage banking activities during 2024.
See “Result of Operations – Non-Interest Income” below for additional information.

●Non-interest expenses for the year ended December 31, 2024 increased to $487.1 million, compared to $471.4 million for the year ended December 31, 2023, mainly due to a $12.8 million increase in employees’ compensation and benefits expenses in part due to annual salary merit increases. The results for the year ended December 31, 2024 and 2023 include a $1.1 million and $6.3 million FDIC special assessment expense, respectively. See “Results of Operations – Non-Interest Expenses” below for additional information.

●Income tax expense decreased to $92.5 million for the year ended December 31, 2024, compared to $94.6 million for 2023, driven by lower pre-tax income. See “Income Taxes” below and Note 20 – “Income Taxes ” included in Part II, Item 8 of this Form 10-K for additional information.

●As of December 31, 2024, total assets were approximately $19.3 billion, an increase of $383.4 million from December 31, 2023, primarily related to an increase in total loans and cash and cash equivalents, partially offset by reductions of investment securities. See “Financial Condition and Operating Data Analysis” below for additional information.

●As of December 31, 2024, total liabilities were $17.6 billion, an increase of $211.8 million from December 31, 2023, which includes an increase in non-brokered deposits, partially offset by a decrease in brokered CDs and the redemption of outstanding TruPS issued by FBP Statutory Trust II. See “Risk Management – Liquidity Risk” below for additional information about the Corporation’s funding sources and strategy.

●The Bank’s primary sources of funding are consumer and commercial core deposits, which exclude government deposits and brokered CDs. As of December 31, 2024, these core deposits, amounting to $12.9 billion, funded 66.70% of total assets.

Excluding fully collateralized government deposits, estimated uninsured deposits amounted to $4.8 billion as of December 31, 2024. Cash and cash equivalents amounted to $1.2 billion as of December 31, 2024. Also, the Corporation had approximately $1.2 billion in free high-quality liquid securities. In addition, the Bank maintains borrowing capacity at the Federal Home Loan Bank (“FHLB”) and the FED’s Discount Window. As of December 31, 2024, the Corporation had approximately $2.6 billion available for funding under the FED’s Discount Window and $912.4 million available for additional borrowing capacity on FHLB lines of credit based on collateral pledged at these entities. In the aggregate, as of December 31, 2024, the Corporation had $5.9 billion, or 124% of estimated uninsured deposits (excluding fully collateralized government deposits), available to meet liquidity needs. See “Risk Management – Liquidity Risk” below for additional information about the Corporation’s funding sources and strategy.

●As of December 31, 2024, the Corporation’s total stockholders’ equity was $1.7 billion, an increase of $171.6 million from December 31, 2023. The increase was driven by net income generated in 2024 and a $73.2 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 2024 totaling $106.0 million or $0.64 per common share, and $100.0 million in common stock repurchases. The Corporation’s CET1 capital, tier 1 capital, total capital, and leverage ratios were 16.32%, 16.32%, 18.02%, and 11.07%, respectively, as of December 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. 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 $291.1 million to $5.4 billion for the year ended December 31, 2024. See “Financial Condition and Operating Data Analysis” below for additional information.

●Total non-performing assets were $118.3 million as of December 31, 2024, a decrease of $7.6 million, from December 31, 2023, driven by a $15.3 million decrease in the other real estate owned (“OREO”) portfolio balance mainly in the Puerto

Rico region, mostly attributable to the sale of a $5.3 million commercial real estate OREO property and sales of residential OREO properties. This variance is net of a $3.7 million increase in other repossessed property and a $3.7 million increase in nonaccrual loans held for investment mainly due to the inflow of a $16.5 million commercial relationship in the food retail industry in the Puerto Rico region, partially offset by the sale of an $8.2 million nonaccrual C&I loan in the Puerto Rico region, that resulted in a $1.2 million charge-off that had been previously reserved, loans returned to accrual status, and repayments. See “Risk Management – Nonaccrual Loans and Non-Performing Assets” below for additional information.

●Adversely classified commercial and construction loans increased by $19.8 million to $87.3 million as of December 31, 2024, when compared to December 31, 2023, driven by the downgrades of two commercial mortgage loans in the Florida region amounting to $24.4 million and the aforementioned inflow to nonaccrual status of a $16.5 million commercial relationship in the Puerto Rico region, partially offset by the upgrade of a $12.2 million C&I loan in the Puerto Rico region and the aforementioned sale and charge-off of an $8.2 million nonaccrual C&I loan in the Puerto Rico region.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

The Corporation has included in this Annual Report on Form 10-K the following financial measures that are not recognized under GAAP, which are referred to as non-GAAP financial measures:

Net Interest Income, Interest Rate Spread, and Net Interest Margin, 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 taxequivalent 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 assets 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.

Adjusted Net Income, Adjusted Non-Interest 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, non-interest 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 year ended December 31, 2022 did not include any significant Special Items. The financial results for the years ended December 31, 2024 and 2023 included the following Special Items:

Years Ended December 31, 2024 and 2023

FDIC Special Assessment Expense

-Charges of $1.1 million ($0.7 million after-tax, calculated based on the statutory tax rate of 37.5%) and $6.3 million ($3.9 million after tax calculated based on the statutory tax rate of 37.5%) were recorded for the years ended December 31, 2024

and 2023, respectively, as a result of 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 for the year ended December 31, 2023 as part of “FDIC deposit insurance” expenses.

Gain Recognized from Legal Settlement

-A $3.6 million ($2.3 million after-tax, calculated based on the statutory tax rate of 37.5%) gain recognized from a legal settlement reflected in the consolidated statements of income for the year ended December 31, 2023 as part of “other noninterest income.”

Gain on Early Extinguishment of Debt

-A $1.6 million gain on the repurchase of $21.4 million in junior subordinated debentures reflected in the consolidated

statements of income for the year ended December 31, 2023 as “Gain on early extinguishment of debt.” The junior subordinated debentures are reflected in the consolidated statements of financial condition as “Long-term borrowings.” The purchase price equated to 92.5% of the $21.4 million par value of the TruPS. The 7.5% discount resulted in the gain of $1.6 million. The gain, realized at the holding company level, had no effect on the income tax expense recorded during 2023.

Adjusted Net Income – The following table reconciles for the years ended December 31, 2024 and 2023, net income to adjusted net income, a non-GAAP financial measure that excludes the Special Items identified above, and shows for the year ended December 31, 2022, the reported net income.

Year Ended December 31,

202420232022| (In thousands) | | | | | | |
| --- | --- | --- | --- | --- | --- | --- |
| Net income, as reported (GAAP) | $ | 298,724 | $ | 302,864 | $ | 305,072 |
| Adjustments: | | | | | | |
| FDIC special assessment expense | | 1,099 | | 6,311 | | - |
| Gain recognized from a legal settlement | | - | | (3,600) | | - |
| Gain on early extinguishment of debt | | - | | (1,605) | | - |
| Income tax impact of adjustments | (1) | (412) | | (1,017) | | - |
| Adjusted net income (Non-GAAP) | $ | 299,411 | $ | 302,953 | $ | 305,072 |

Adjusted non-interest income – Non-interest income for the year ended December 31, 2023 was adjusted for the aforementioned $3.6 million gain recognized from a legal settlement reflected in the consolidated statements of income as part of “other non-interest income” and $1.6 million gain on the repurchase of the aforementioned junior subordinated debentures reflected in the consolidated statements of income as “Gain on early extinguishment of debt.”

Adjusted non-interest expenses – Non-interest expenses for the years ended December 31, 2024 and 2023 were adjusted for the aforementioned $1.1 million and $6.3 million charges, respectively, related to the FDIC special assessment reflected in the consolidated statements of income as part of “FDIC deposit insurance” expenses.

CRITICAL ACCOUNTING ESTIMATES

The accounting principles of the Corporation and the methods of applying these principles conform to GAAP. In preparing the consolidated financial statements, management is required to make estimates, assumptions, and judgments that affect the amounts recorded for assets, liabilities and contingent liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Accounting estimates require assumptions and judgments about uncertain matters that could have a material effect on the consolidated financial statements. The Corporation’s critical accounting estimates that are particularly susceptible to significant changes include the following: (i) the ACL; (ii) valuation of financial instruments; and (iii)
income taxes. Actual results could differ from estimates and assumptions if different outcomes or conditions prevail.

Allowance for Credit Losses

The Corporation maintains an ACL for loans and finance leases based upon management’s estimate of the lifetime expected credit losses in the loan portfolio, as of the balance sheet date, excluding loans held for sale. Additionally, the Corporation maintains an ACL for held-to-maturity and available-for-sale debt securities, and other off-balance sheet credit exposures (e.g., unfunded loan

commitments). For loans and finance leases, unfunded loan commitments, and held-to-maturity debt securities, the estimate of lifetime credit losses includes the use of quantitative models that incorporate forward-looking macroeconomic scenarios that are applied over the contractual lives of the portfolios, adjusted, as appropriate, for prepayments and permitted extension options using historical experience. For purposes of the ACL for lending commitments, such allowance is determined using the same methodology as the ACL for loans, while also taking into consideration the probability of drawdowns or funding, and whether such commitments are cancellable by us. The ACL for available-for-sale debt securities is measured using a risk-adjusted discounted cash flow approach that also considers relevant current and forward-looking economic variables and the ACL is limited to the difference between the fair value of the security and its amortized cost. Judgment is specifically applied in the determination of economic assumptions, the length of the initial loss forecast period, the reversion of losses beyond the initial forecast period, historical loss expectations, usage of macroeconomic scenarios, and qualitative factors, which may not be adequately captured in the loss model, as further discussed below.

The macroeconomic scenarios utilized by the Corporation include variables that have historically been key drivers of increases and decreases in credit losses. These variables include, but are not limited to, unemployment rates, housing and commercial real estate prices, gross domestic product levels, retail sales, interest rate forecasts, corporate bond spreads, and changes in equity market prices.
The Corporation derives the economic forecasts it uses in its ACL model from Moody's Analytics. The latter has a large team of economists, database managers and operational engineers with a history of producing monthly economic forecasts for over 25 years.

The Corporation has currently set an initial forecast period (“reasonable and supportable period”) of two years and a reversion period of up to three years, utilizing a straight-line approach and reverting back to the historical macroeconomic mean for Puerto Rico

and the Virgin Islands regions. For the Florida region, the methodology considers a reasonable and supportable forecast period and an implicit reversion towards the historical trend that varies for each macroeconomic variable. After the reversion period, a historical loss forecast period covering the remaining contractual life, adjusted for prepayments, is used based on the change in key historical economic variables during representative historical expansionary and recessionary periods. Changes in economic forecasts impact the probability of default (“PD”), loss-given default (“LGD”), and exposure at default (“EAD”) for each instrument, and therefore influence the amount of future cash flows for each instrument that the Corporation does not expect to collect.

Further, the Corporation periodically considers the need for qualitative adjustments to the ACL. Qualitative adjustments may be related to and include, but not be limited to, factors such as the following: (i) 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 qualitative factors applied at December 31, 2024, and the importance and levels of the qualitative factors applied, may change in future periods depending on the level of changes to items such as the uncertainty of economic conditions and management's assessment of the level of credit risk within the loan portfolio as a result of such changes, compared to the amount of ACL calculated by the model. The evaluation of qualitative factors is inherently imprecise and requires significant management judgment.

The ACL can also be impacted by factors outside the Corporation’s control, which include unanticipated changes in asset quality of the portfolio, such as deterioration in borrower delinquencies, or credit scores in our residential real estate and consumer portfolio.
Further, the current fair value of collateral is utilized to assess the expected credit losses when a financial asset is considered to be collateral dependent.

Our process for determining the ACL is further discussed in Note 1 – “Nature of Business and Summary of Significant Accounting Policies” and Note 5 – “Allowance for Credit Losses and Finance Leases”included in Part II, Item 8 of this Form 10-K. Also, see

“Allowance for Credit Losses for Loans and Finance Leases” below for additional information on the weighting of economic scenarios to estimate the ACL, changes in key economic variables, and the ACL sensitivity analysis performed as of December 31, 2024.

Income Taxes

The Corporation is required to estimate income taxes in preparing its consolidated financial statements. This involves the estimation of current income tax expense together with an assessment of temporary differences between the carrying amounts of assets and

liabilities for financial reporting purposes and the amounts used for income tax purposes. The determination of current income tax expense involves estimates and assumptions that require the Corporation to assume certain positions based on its interpretation of current tax regulations. Management assesses the relative benefits and risks of the appropriate tax treatment of transactions, taking into account statutory, judicial and regulatory guidance, and recognizes tax benefits only when deemed probable. Changes in assumptions affecting estimates may be required in the future and estimated tax liabilities may need to be increased or decreased accordingly. The Corporation adjusts the accrual of tax contingencies in light of changing facts and circumstances, such as the progress of tax audits, case law and emerging legislation. The Corporation’s effective tax rate includes the impact of tax contingencies and changes to such accruals, as considered appropriate by management. When particular tax matters arise, a number of years may elapse before such matters are audited by the taxing authorities and finally resolved. Favorable resolution of such matters or the expiration of the statute of limitations may result in the release of tax contingencies that the Corporation recognizes as a reduction to its effective tax rate in the year of resolution. Unfavorable settlement of any particular issue could increase the effective tax rate and may require the use of cash in the year of resolution.

As of December 31, 2024, we had $136.4 million of deferred tax assets, net of a related valuation allowance of $119.1 million. The determination of deferred tax expense or benefit is based on changes in the carrying amounts of assets and liabilities that generate

temporary differences and recognizes enacted changes in tax rates and laws in the period in which they occur. The carrying value of the Corporation’s net deferred tax asset assumes that the Corporation will be able to generate sufficient future taxable income based on estimates and assumptions. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. The determination of whether a valuation allowance for deferred tax assets is appropriate is subject to considerable judgment and requires the evaluation of positive and negative evidence that can be objectively verified. Positive evidence necessary to overcome the negative evidence includes whether future taxable income in sufficient amounts and character within the carryforward periods is available under the tax law. Consideration must be given to all sources of taxable income including, as applicable, the future reversal of existing temporary differences, future taxable income forecasts exclusive of the reversal of temporary differences and carryforwards, and tax planning strategies. When negative evidence (e.g., cumulative losses in recent years, history of operating loss or tax credit carryforwards expiring unused) exists, more positive evidence than negative evidence will be necessary. The Corporation has concluded that based on the level of positive evidence, it is more likely than not that the deferred tax asset will be realized, net of the existing valuation allowances at December 31, 2024 and 2023. However, there is no guarantee that the tax benefits associated with the deferred tax assets will be fully realized. The positive evidence considered by management in arriving at its conclusion included factors such as the following: FirstBank’s three-year cumulative income position; and sustained periods of profitability; management’s proven ability to forecast future income accurately and execute tax strategies. The negative evidence considered by management included the following: uncertainties about the state of the Puerto Rico economy, including considerations relating to the pandemic recovery funds together with Puerto Rico government debt restructuring and the ultimate sustainability of the latest fiscal plan certified by the Puerto Rico Oversight, Management, and Economic Stability Act (“PROMESA”) oversight board.

See Note 20– “Income Taxes” included in Part II, Item 8 on Form 10-K for further information related to income taxes.

OTHER ESTIMATES

In addition to the critical accounting estimates we make in connection with the ACL and the accounting for income taxes, the use of estimates and assumptions is also important in performing the valuation of financial instruments, determining the accounting for goodwill and identifiable intangible assets, pension and postretirement benefit obligations, and provisions for losses that may arise from litigation and regulatory proceedings (including governmental investigations).

Valuations of financial instruments often involve estimates due to the need to determine fair value in the absence of readily available market prices. Since Level 1 and Level 2 financial instruments rely on observable market prices, estimates are minimal. On

the other hand, Level 3 valuations involve significant unobservable inputs, such as internal models or assumptions about future cash flows, which introduce a higher degree of subjectivity and estimation uncertainty. Notwithstanding, as of December 31, 2024 and 2023, less than 1% of the available-for-sale debt securities portfolio was classified as Level 3. In addition, fair value is also used on a non-recurring basis for measuring the fair value of certain Level 3 assets such as collateral dependent loans and OREO properties, as disclosed in Note 23 – “Fair Value” included in Part II, Item 8 of this Form 10-K.

Goodwill is assessed for impairment at least annually and more frequently if circumstances exist that indicate a possible reduction in the fair value of a reporting unit below its carrying value. When assessing goodwill for impairment, first, a qualitative assessment

can be made to determine whether it is more likely than not that the estimated fair value of a reporting unit is less than its estimated carrying value. If the results of the qualitative assessment are not conclusive, a quantitative goodwill test is performed. Estimating the fair value of our reporting units requires judgment. Critical inputs to the fair value estimates may include projected earnings, macroeconomic conditions, interest rate levels, and peers performance. See Note 1 – “Nature of Business and Summary of Significant Accounting Policies” and Note 9 – “Goodwill and Other Intangibles” included in Part II, Item 8 of this Form 10-K for further information about goodwill and identifiable intangible assets. Based on our annual impairment qualitative analysis of goodwill conducted in the fourth quarter of 2024, it was determined that it is more-likely-than-not that the fair value of the reporting units exceeded their carrying value; therefore, goodwill is considered not impaired.

Identifiable intangible assets are tested for impairment when events or changes in circumstances suggest that an asset’s or asset group’s carrying value may not be fully recoverable. Judgment is required to evaluate whether indications of potential impairment have occurred, and to test intangible assets for impairment, if required. An impairment is recognized if the estimated undiscounted cash flows relating to the asset or asset group is less than the corresponding carrying value. The amortization of identified intangible assets is based upon the estimated economic benefits to be received over their economic life, which is also subjective. Customer attrition rates that are based on historical experience are used to determine the estimated economic life of intangibles assets.

The Corporation maintains two frozen qualified noncontributory defined benefit pension plans, and a related complementary postretirement benefits plan covering medical benefits and life insurance after retirement. Calculation of the obligations and related

expenses under these plans requires the use of actuarial valuation methods and assumptions, which are subject to management judgment and may differ if different assumptions are used. The discount rate assumption used to measure the postretirement benefit obligation is estimated as the single equivalent rate such that the present value of the plan’s projected benefit obligation cash flows using the single rate equals the present value of those cash flows using the above mean actuarial yield curves. See Note 17 – “Employee Benefit Plans” included in Part II, Item 8 of this Form 10-K, for disclosures related to the benefit plans.

As necessary, we also estimate and provide for potential losses that may arise out of litigation and regulatory proceedings to the extent that such losses are probable and can be reasonably estimated. Judgment is required in making these estimates and our final liabilities may ultimately be materially different. Our total estimated liability with respect to litigation and regulatory proceedings is determined on a case-by-case basis and represents an estimate of probable losses after considering, among other factors, the latest information available advice from legal counsel, and available insurance coverage. The outcomes of legal actions are unpredictable and subject to significant uncertainties, and it is inherently difficult to determine whether any loss is probable or even possible. It is also inherently difficult to estimate the amount of any loss and there may be matters for which a loss is probable or reasonably possible but not currently estimable. Accordingly, actual losses may be in excess of the established accrual or the range of reasonably possible loss. See Note 27 – “Regulatory Matters, Commitments and Contingencies” included in Part II, Item 8 of this Form 10-K.

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 in nonaccrual loans, can fluctuate from period to period. Net interest income for the year ended December 31, 2024 was $807.5 million, compared to $797.1 million for the year ended December 31, 2023. On a tax-equivalent basis and excluding the changes in the fair value of derivative instruments, net interest income for the year ended December 31, 2024 was $826.9 million, compared to $818.0 million for the year ended December 31, 2023.

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 change 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 volumeInterest income(1)/ expenseAverage rate(1)| Year Ended December 31, | | 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | 20242023 | 2022 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (Dollars in thousands) | | | | | | | | | |
| Interest-earning assets: | | | | | | | | | |
| Money market and other short-term investments | | $710,945 | $584,083 | $1,156,127 | $37,082 | $30,419 | $11,791 | 5.22%5.21 | %1.02% |
| Government obligations | (2) | 2,517,327 | 2,843,284 | 2,870,889 | 34,139 | 40,314 | 39,033 | 1.36%1.42 | %1.36% |
| MBS | | 3,348,925 | 3,702,908 | 4,052,660 | 59,092 | 67,641 | 85,090 | 1.76%1.83 | %2.10% |
| FHLB stock | | 34,161 | 36,606 | 20,419 | 3,266 | 2,799 | 1,114 | 9.56%7.65 | %5.46% |
| Other investments | | 18,510 | 14,167 | 12,747 | 543 | 490 | 126 | 2.93%3.46 | %0.99% |
| Total investments | (3) | 6,629,868 | 7,181,048 | 8,112,842 | 134,122 | 141,663 | 137,154 | 2.02%1.97 | %1.69% |
| Residential mortgage loans | | 2,816,732 | 2,814,102 | 2,886,594 | 164,238 | 160,009 | 160,359 | 5.83%5.69 | %5.56% |
| Construction loans | | 221,822 | 172,952 | 121,642 | 19,260 | 14,811 | 7,350 | 8.68%8.56 | %6.04% |
| C&I and commercial mortgage loans | | 5,606,827 | 5,244,503 | 5,092,638 | 405,481 | 365,185 | 281,486 | 7.23%6.96 | %5.53% |
| Finance leases | | 879,437 | 789,870 | 636,507 | 69,218 | 60,909 | 46,842 | 7.87%7.71 | %7.36% |
| Consumer loans | | 2,830,678 | 2,704,877 | 2,461,632 | 322,267 | 301,756 | 262,542 | 11.38%11.16 | %10.67% |
| Total loans | (4)(5) | 12,355,496 | 11,726,304 | 11,199,013 | 980,464 | 902,670 | 758,579 | 7.94%7.70 | %6.77% |
| Total interest-earning assets | | $18,985,364 | $18,907,352 | $19,311,855 | $1,114,586 | $1,044,333 | $895,733 | 5.87%5.52 | %4.64% |
| Interest-bearing liabilities: | | | | | | | | | |
| Time deposits | | $2,999,078 | $2,590,313 | $2,213,145 | $105,712 | $68,605 | $18,102 | 3.52%2.65 | %0.82% |
| Brokered CDs | | 627,454 | 348,829 | 69,694 | 31,833 | 16,630 | 1,500 | 5.07%4.77 | %2.15% |
| Other interest-bearing deposits | | 7,567,514 | 7,664,793 | 8,279,320 | 115,562 | 100,226 | 26,759 | 1.53%1.31 | %0.32% |
| Securities sold under agreements to repurchase | | 245 | 54,570 | 194,948 | 12 | 2,769 | 7,555 | 4.90%5.07 | %3.88% |
| Advances from the FHLB | | 500,055 | 541,000 | 179,452 | 22,566 | 24,608 | 5,136 | 4.51%4.55 | %2.86% |
| Other borrowings | | 146,044 | 171,184 | 184,173 | 11,989 | 13,538 | 8,269 | 8.21%7.91 | %4.49% |
| Total interest-bearing liabilities | | $11,840,390 | $11,370,689 | $11,120,732 | $287,674 | $226,376 | $67,321 | 2.43%1.99 | %0.61% |
| Net interest income on a tax-equivalent basis and excluding | | | | | | | | | |
| valuations - non-GAAP | | | | | $826,912 | $817,957 | $828,412 | | |
| Interest rate spread | | | | | | | | 3.44%3.53 | %4.03% |
| Net interest margin | | | | | | | | 4.36%4.33 | %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 $13.4 million, $11.9 million and $11.2 million for the years ended December 31, 2024, 2023 and 2022, respectively, of income from prepayment penalties and late fees related to the Corporation’s loan portfolio.

Part IIYear Ended December 31,

2024 Compared to 20232023 Compared to 2022

Variance due to:Variance due to:

VolumeRateTotalVolumeRateTotal| Interest income on interest-earning assets: | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Money market and other short-term investments | $6,516 | $147 | $ | 6,663$ | (17,813) | $36,441 | $18,628 | |
| Government obligations | (4,543) | (1,632) | | (6,175) | (382) | 1,663 | | 1,281 |
| MBS | (6,423) | (2,126) | | (8,549) | (6,963) | (10,486) | (17,449) | |
| FHLB stock | (215) | 682 | | 467 | 1,118 | 567 | | 1,685 |
| Other investments | 138 | (85) | | 53 | 16 | 348 | | 364 |
| Total investments | (4,527) | (3,014) | | (7,541) | (24,024) | 28,533 | | 4,509 |
| Residential mortgage loans | 134 | 4,095 | | 4,229 | (4,075) | 3,725 | | (350) |
| Construction loans | 4,190 | 259 | | 4,449 | 3,751 | 3,710 | | 7,461 |
| C&I and commercial mortgage loans | 25,143 | 15,153 | 40,296 | | 8,618 | 75,081 | 83,699 | |
| Finance leases | 6,868 | 1,441 | | 8,309 | 11,737 | 2,330 | 14,067 | |
| Consumer loans | 13,623 | 6,888 | 20,511 | | 26,758 | 12,456 | 39,214 | |
| Total loans | 49,958 | 27,836 | 77,794 | | 46,789 | 97,302 | 144,091 | |
| Total interest income | $45,431 | $24,822 | $70,253 | $ | 22,765 | 125,835 | $148,600 | |
| Interest expense on interest-bearing liabilities: | | | | | | | | |
| Time deposits | $11,890 | $25,217 | $37,107 | $ | 3,574$ | 46,929 | $50,503 | |
| Brokered CDs | 13,992 | 1,211 | 15,203 | | 11,608 | 3,522 | 15,130 | |
| Other interest-bearing deposits | (1,537) | 16,873 | 15,336 | | (5,011) | 78,478 | 73,467 | |
| Securities sold under agreements to repurchase | (2,757) | | - | (2,757) | (6,282) | 1,496 | | (4,786) |
| Advances from the FHLB | (1,905) | (137) | | (2,042) | 15,066 | 4,406 | 19,472 | |
| Other borrowings | (2,044) | 495 | | (1,549) | (805) | 6,074 | | 5,269 |
| Total interest expense | 17,639 | 43,659 | 61,298 | | 18,150 | 140,905 | 159,055 | |
| Change in net interest income | $27,792 | $(18,837) | $ | 8,955$ | 4,615$ | (15,070) | $(10,455) | |

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 20 – “Income Taxes to the audited consolidated financial statements included in Part II, Item 8 of this Form 10-K 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.

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:

Year Ended December 31,

202420232022| (Dollars in thousands) | | | | | | |
| --- | --- | --- | --- | --- | --- | --- |
| Interest income - GAAP | | 1,095,153 | $ | 1,023,486 | $ | 862,614 |
| Unrealized loss (gain) on derivative instruments | | - | | 8 | | (30) |
| Interest income excluding valuations - non-GAAP | | 1,095,153 | | 1,023,494 | | 862,584 |
| Tax-equivalent adjustment | | 19,433 | | 20,839 | | 33,149 |
| Interest income on a tax-equivalent basis and excluding valuations - non-GAAP | | 1,114,586 | $ | 1,044,333 | $ | 895,733 |
| Interest expense - GAAP | | 287,674 | $ | 226,376 | $ | 67,321 |
| Net interest income - GAAP | | 807,479 | $ | 797,110 | $ | 795,293 |
| Net interest income excluding valuations - non-GAAP | | 807,479 | $ | 797,118 | $ | 795,263 |
| Net interest income on a tax-equivalent basis and excluding valuations - non-GAAP | | 826,912 | $ | 817,957 | $ | 828,412 |
| Average Balances | | | | | | |
| Loans and leases | | 12,355,496 | $11,726,304 | | $11,199,013 | |
| Total securities, other short-term investments and interest-bearing cash balances | | 6,629,868 | | 7,181,048 | | 8,112,842 |
| Average Interest-Earning Assets | | 18,985,364 | $18,907,352 | | $19,311,855 | |
| Average Interest-Bearing Liabilities | | 11,840,390 | $11,370,689 | | $11,120,732 | |
| Average Assets | (1) | 18,961,356 | $18,706,423 | | $19,378,649 | |
| Average Non-Interest-Bearing Deposits | | 5,351,124 | $ | 5,741,345 | $ | 6,391,171 |
| Average Yield/Rate | | | | | | |
| Average yield on interest-earning assets - GAAP | | 5.77% | | 5.41% | | 4.47% |
| Average rate on interest-bearing liabilities - GAAP | | 2.43% | | 1.99% | | 0.61% |
| Net interest spread - GAAP | | 3.34% | | 3.42% | | 3.86% |
| Net interest margin - GAAP | | 4.25% | | 4.22% | | 4.12% |
| Average yield on interest-earning assets excluding valuations - non-GAAP | | 5.77% | | 5.41% | | 4.47% |
| Average rate on interest-bearing liabilities | | 2.43% | | 1.99% | | 0.61% |
| Net interest spread excluding valuations - non-GAAP | | 3.34% | | 3.42% | | 3.86% |
| Net interest margin excluding valuations - non-GAAP | | 4.25% | | 4.22% | | 4.12% |
| Average yield on interest-earning assets on a tax-equivalent basis and excluding | | | | | | |
| valuations - non-GAAP | | 5.87% | | 5.52% | | 4.64% |
| Average rate on interest-bearing liabilities | | 2.43% | | 1.99% | | 0.61% |
| Net interest spread on a tax-equivalent basis and excluding valuations - non-GAAP | | 3.44% | | 3.53% | | 4.03% |
| Net interest margin on a tax-equivalent basis and excluding valuations - non-GAAP | | 4.36% | | 4.33% | | 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.

Net interest income amounted to $807.5 million for the year ended December 31, 2024, an increase of $10.4 million when compared to $797.1 million for same period in 2023. The $10.4 million increase in net interest income was primarily due to:

●A $74.9 million increase in interest income on loans, including:

-A $41.8 million increase in interest income on commercial and construction loans, driven by a $29.8 million increase associated with a $411.2 million increase in the average balance, and a $12.0 million increase related to the effect of higher market interest rates on the upward repricing of variable-rate loans and on new loan originations.

As of December 31, 2024, the interest rate on approximately 53% of the Corporation’s commercial and construction loans was tied to variable rates, with 33% based upon SOFR of 3 months or less, 12% based upon the Prime rate index, and 8% based on other indexes. For the year ended December 31, 2024, the average one-month SOFR increased 4 basis points, the average three-month SOFR decreased 11 basis points, and the average Prime rate increased 12 basis points, compared to the average rates for such indexes for the year ended December 31, 2023.

-A $28.8 million increase in interest income on consumer loans and finance leases, primarily due to a $215.4 million increase in the average balance of this portfolio, mainly auto loans and finance leases.

●A $61.3 million increase in interest expense on interest-bearing liabilities, consisting of:

-A $37.1 million increase in interest expense on time deposits, excluding brokered CDs, of which $25.2 million was related to higher rates in 2024 on new issuances and renewals, also associated with the higher interest rate environment, and $11.9 million was driven by a $408.8 million increase in the average balance. The average cost of time deposits for 2024, excluding brokered CDs, increased 87 bps to 3.52% as compared to 2.65% for the same period in 2023.

-A $15.3 million increase in interest expense on interest-bearing checking and saving accounts, also related to the overall higher interest rate environment. The average cost of interest-bearing checking and saving accounts increased by 22 bps to 1.53% for 2024 as compared to 1.31% for the same period in 2023, mostly driven by government deposits in the Puerto Rico region. Excluding government deposits, the average cost of interest-bearing checking and savings accounts for 2024 was 0.78%, compared to 0.70% for the same period in 2023.

-A $15.2 million increase in interest expense on brokered CDs, driven by a $278.6 million increase in the average balance.

Partially offset by:

-A $6.3 million decrease in interest expense on borrowings, mainly due to a $2.8 million decrease on short-term repurchase agreements since they were not used as a funding source during 2024; a $2.0 million decrease on advances from the FHLB, mainly associated with a $40.9 million decrease in the average balance; and a $1.5 million decrease due to redemptions of junior subordinated debentures.

●A $3.2 million decrease in interest income from total investments, mainly due to a $10.4 million net decrease in interest

income from debt securities, mainly associated with a $679.9 million decrease in the average balance driven by the effect during 2024 of $623.4 million in maturities of debt securities with an average yield of 0.74% as well as repayments of U.S.
agencies MBS and debentures, partially offset by a $6.7 million increase in interest income from interest-bearing cash balances, which consisted primarily of cash balances deposited at the FED, mainly due to a $126.9 million increase in the average balance.

Net interest margin for the year ended December 31, 2024 was 4.25%, compared to 4.22% for the same period in 2023. The increase in the net interest margin was driven by a change in asset mix resulting from an increase in interest-bearing cash balances

deposited at the FED as a result of an increase in deposits, and the deployment of cash flows from lower-yielding investment securities to fund loan growth as well as the effect of the higher interest rate environment on commercial and consumer loan yields, partially offset by a higher cost of funds associated with the higher interest rate environment combined with a change in deposit mix reflecting a continued migration from non-interest-bearing and other low-cost deposits to higher-cost deposits, as well as the increase in balance of brokered CDs.

Provision for Credit Losses

The provision for credit losses for loans and finance leases was $62.9 million for the year ended December 31, 2024, compared to $66.6 million for the year ended December 31, 2023. The variances by major portfolio category were as follows:

●Provision for credit losses for the commercial and construction loan portfolios was a net benefit of $17.5 million for the year ended of December 31, 2024, compared to an expense of $5.7 million for the year ended December 31, 2023. The net benefit recorded during 2024 was associated with the improved financial condition of certain borrowers,an improvement on the

economic outlook of certain macroeconomic variables, particularly variables associated with commercial real estate property performance and the forecasted CRE price index; a recovery of $5.0 million associated with a C&I loan in the Puerto Rico region, and $1.2 million in recoveries of two commercial loans in the Florida region; partially offset by portfolio growth.
Meanwhile, the expense recorded during 2023 was mainly due to the increase in the size of the commercial and construction loan portfolios, a $6.0 million charge associated with a nonaccrual C&I participated loan in the Florida region in the power generation industry, a $1.7 million incremental reserve recorded during 2023 associated with the inflow to nonaccrual status of a $9.5 million C&I loan in the Puerto Rico region, and a $1.0 million charge-off recorded on a nonaccrual commercial mortgage loan transferred to OREO during 2023, partially offset by an improvement on the economic outlook of certain macroeconomic variables, such as the unemployment rate.

●Provision for credit losses for the residential mortgage loan portfolio was a net benefit of $16.2 million for the year ended December 31, 2024, compared to a net benefit of $6.9 million for year ended December 31, 2023. The increase in net benefit

recorded during 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 as further explained in Note 4 – “Loans Held for Investment,” and a higher benefit associated with updated macroeconomic variables, mainly in the long-term projection of the unemployment rate in the Puerto Rico region, partially offset by newly originated loans.

●Provision for credit losses for the consumer loan and finance lease portfolios was an expense of $96.6 million for the year

ended December 31, 2024, compared to an expense of $67.8 million for the year ended December 31, 2023. The increase in provision expense was driven by higher charge-off and delinquency levels in these portfolios and portfolio growth, partially offset by a $10.0 million recovery associated with the bulk sale of fully charged-off loans recorded during 2024 and an improvement on the economic outlook of certain macroeconomic variables, mainly in the projection of the unemployment rate.

Provision for credit losses for unfunded loan commitments

The provision for credit losses for unfunded commercial and construction loan commitments and standby letters of credit for the year ended December 31, 2024 was a net benefit of $1.5 million, compared to an expense of $0.4 million for the year ended December 31, 2023. The net benefit recorded during 2024 was driven by an improvement on the economic outlook of certain macroeconomic variables, particularly in variables associated with the CRE price index.

Provision for credit losses for held-to-maturity and available-for-sale debt securities

The provision for credit losses for held-to-maturity debt securities was a net benefit of $1.4 million for the year ended December 31, 2024, compared to a net benefit of $6.1 million for the year ended December 31, 2023. The net benefit recorded during 2023 was driven by the refinancing of a $46.5 million municipal bond into a shorter-term commercial loan structure and, to a lesser extent, a reduction in qualitative reserves driven by updated financial information of certain bond issuers received during 2023.

The provision for credit losses for available-for-sale debt securities for the year ended December 31, 2024 was a net benefit of $50 thousand, compared to an expense of $20 thousand for the year ended December 31, 2023.

Non-Interest Income

Non-interest income for the year ended December 31, 2024 amounted to $130.7 million, compared to $132.7 million for the same period in 2023. Non-interest income for the year ended December 31, 2023 included the following Special Items: the $3.6 million gain recognized from a legal settlement, included as part of “other non-interest income,” and the $1.6 million gain on the repurchase of $21.4 million in junior subordinated debentures, reported as “gain on early extinguishment of debt.” See “Non-GAAP Financial Measures and Reconciliations” above for additional information. On a non-GAAP basis, excluding the effect of these Special Items, adjusted non-interest income increased by $3.2 million primarily due to:

●A $2.8 million increase in card and processing income, mainly in merchant-related fees due to higher transactional volumes.

●A $2.1 million increase in revenues from mortgage banking activities, driven by a $2.1 million increase in the net realized gain on sales of residential mortgage loans in the secondary market mainly due to higher margins. During 2024 and 2023, net realized gains of $5.4 million and $3.3 million, respectively, were recognized as a result of GNMA securitization transactions and whole loan sales to U.S. GSEs amounting to $160.0 million and $155.2 million, respectively.

●A $0.8 million increase in insurance commission income, mainly related to higher contingent commissions.

●A $0.8 million increase in service charges and fees on deposit accounts, in part due to an increase in the number of cash management transactions of commercial clients.

Partially offset by:

●A $3.3 million decrease in adjusted other non-interest income mainly due to a $3.0 million gain recognized during 2023 associated with the sale of a banking premise in the Florida region.

Non-Interest Expenses

Non-interest expenses for the year ended December 31, 2024 amounted to $487.1 million, compared to $471.4 million for the same period in 2023. The efficiency ratio for 2024 was 51.92%, compared to 50.70% for the same period in 2023. Non-interest expenses for the years ended December 31, 2024 and 2023 include the $1.1 million and $6.3 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 $20.9 million primarily due to:

●A $12.8 million increase in employees’ compensation and benefits expenses, driven by annual salary merit increases and increases in bonuses accruals, stock-based compensation expense, and matching contributions to the employees’ retirement plan.

●A $3.6 million increase in professional service fees, mainly due to a $2.4 million increase in consulting fees driven by information technology infrastructure enhancements, and a $0.8 million increase in outsourced technology service fees.

●A $2.5 million increase in occupancy and equipment expenses, mainly related to an increase in maintenance charges, partially offset by a decrease in depreciation charges.

●A $1.6 million increase in credit and debit card processing fees, driven by higher transactional volumes.

●A $1.3 million increase in other non-interest expenses, mainly due to a $3.5 million increase in charges for operational and fraud losses, partially offset by a decrease of $1.3 million in the amortization of intangible assets (mainly from core deposit intangible assets related to savings accounts from the Banco Santander Puerto Rico acquisition, which were fully amortized in 2024), and a $0.7 million favorable variance in net periodic (benefit) cost of pension plans.

●A $1.0 million increase in taxes, other than income taxes, primarily related to higher municipal license taxes.

Partially offset by:

●A $2.0 million decrease in business promotion expenses, as a result of lower marketing efforts.

Income Taxes

For the year ended December 31, 2024, the Corporation recorded an income tax expense of $92.5 million, compared to $94.6 million, for the same period in 2023. The decrease in income tax expense was mainly due to lower pre-tax income.

The Corporation’s annual effective tax rate, excluding entities with pre-tax losses from which a tax benefit cannot be recognized and discrete items, was 23.0 % for the year ended December 31, 2024, compared to 23.5% for the same period in 2023. The effective tax rate of the Corporation is impacted by, among other things, the relationship of taxable to exempt income. See Note 20 – “Income Taxes” to the audited consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.

As of December 31, 2024, the Corporation had a net deferred tax asset of $136.4 million, net of a valuation allowance of $119.1 million, compared to a net deferred tax asset of $150.1 million, net of a valuation allowance of $139.2 million, as of December 31,

The decrease in the net deferred tax asset was mainly related to the usage of alternative minimum tax credits and the decrease in the ACL. Meanwhile, the decrease in the valuation allowance was primarily related to changes in the market value of available-forsale debt securities and the expiration of capital loss carryforwards, both which resulted in an equal change in the net deferred tax asset without impacting earnings.

OPERATING SEGMENTS

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 December 31, 2024, the Corporation had six reportable segments: Mortgage Banking; Consumer (Retail) Banking; Commercial and Corporate Banking;
Treasury and Investments; United States Operations; and Virgin Islands Operations. The Chief Executive Officer (“CEO”), who is the designated chief operating decision maker (“CODM”), as ultimate decision maker, evaluates performance and allocates resources based on financial information provided by management. In determining the reportable segments, the Corporation considers factors such as the organizational structure, nature of the products, distribution channels, customer relationship management, and economic characteristics of the business lines. For additional information regarding First BanCorp.’s reportable segments, please refer to Note 25, “Segment Information” to the audited financial statements included in Part II, Item 8 of this Form 10-K.

The accounting policies for segment reporting are consistent with those described in Note 1, “Nature of Business and Summary of Significant Accounting Policies” to the audited financial statements included in Part II, Item 8 of this Form 10-K. The Corporation evaluates the performance of the segments based on net interest income, the provision for credit losses, non-interest income, and noninterest expenses. The segments are also evaluated based on the average volume of their interest-earning assets (net of fair value adjustments of investment securities and the ACL).

The Corporation uses a funds transfer pricing system to match fund lending and deposit gathering functions with the Treasury and Investments segment centrally managing funding by providing funds to the Mortgage Banking, Consumer (Retail) Banking,

Commercial and Corporate Banking, the United States Operations, and the Virgin Islands Operations segments to support their lending activities and compensating these units for deposits gathered. The mismatch between funds provided and funds used is managed by the Treasury and Investments segment. The funds transfer pricing charged or credited are calculated using the SOFR/swap curve with term rates-based approach, adjusted for a funding spread that reflects the Corporation’s cost of funds.

During the fourth quarter of 2024, the Corporation adopted Accounting Standard Update (“ASU”) 2023-07. In addition, as part of the Corporation’s ongoing efforts to enhance internal reporting, in the fourth quarter of 2024, the Corporation refined its segment performance methodology. These refinements align with improvements in internal reporting and included changes in the allocation of support units and overhead expenses, measurement of funds transfer pricing (“FTP”), and recharacterization of certain business products. As such, to ensure comparability, prior period segment results have been recast to reflect these refinements. For the years 2023 and 2022, updated segment results include support centers and overhead expense allocations of $168.7 million and $155.3 million, respectively, which mainly impacted the Consumer (Retail) Banking segment. In both periods, the allocation of support units and overhead expenses primarily affected the expense categories of employee’s compensation and benefits, occupancy and equipment, and professional service fees. See Note 25, “Segment Information”, to the audited financial statements included in Part II, Item 8 of this Form 10-K for a detailed discussion of ASU 2023-07 adoption and key refinements and their impact on segment reporting.

Mortgage Banking

The Mortgage Banking segment conducts its operations primarily through FirstBank. This segment consists of the origination, sale, and servicing of a variety of residential mortgage loan products. Originations are sourced through different channels, such as FirstBank branches and purchases from mortgage bankers, and in association with new project developers. This segment focuses on originating residential real estate loans, including those that conform to the Federal Housing Administration (the “FHA”), the Veterans Administration (the “VA”), and U.S. Department of Agriculture Rural Development (“RD”) standards. Loans that meet FHA’s standards qualify for FHA’s insurance, while loans that meet VA or RD standards are guaranteed by the respective federal agencies.

Mortgage loans that do not qualify for the FHA, VA, or RD programs are referred to as conventional loans, which can be conforming or non-conforming. Conforming loans are those that meet the standards for sale under the U.S. Federal National Mortgage

Association (“FNMA”) and the U.S. Federal Home Loan Mortgage Corporation (“FHLMC”) programs. Loans that do not meet FNMA or FHLMC standards are referred to as non-conforming residential real estate loans. The Mortgage Banking segment also acquires and sells mortgages in the secondary market. Conforming residential real estate loans are sold to investors such as FNMA and FHLMC, and the Corporation has commitment authority to issue GNMA MBS.

For the year ended December 31, 2024, segment income before taxes for the Mortgage Banking segment increased to $58.5 million, compared to $55.0 million for the same period in 2023. The highlights of the segment’s financial results are as follows :

●Net interest income for the year ended December 31, 2024 was $72.5 million, compared to $75.8 million for the same period in 2023. The decrease in net interest income of $3.3 million was primarily attributable to a change in asset mix and related funding costs.

●The provision for credit losses for the year ended December 31, 2024 was a net benefit of $15.5 million, compared to a

net benefit of $7.9 million for the same period in 2023. The increase in net benefit recorded during 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 as further explained in Note 4 – “Loans Held for Investment,” and a higher benefit associated with updated macroeconomic variables, mainly in the long-term projection of the unemployment rate, partially offset by newly originated loans.

●Non-interest income for the year ended December 31, 2024 was $13.5 million, compared to $11.2 million for the same period in 2023. The increase of $2.3 million was driven by an increase in the net realized gain on sales of residential mortgage loans in the secondary market mainly due to higher margins.

●Non-interest expenses for the year ended December 31, 2024 were $43.0 million, compared to $39.9 million for the same period in 2023. The increase of $3.1 million was driven by: (i) a $1.6 million increase in employees’ compensation and

benefits expenses, mainly related to annual salary merit increases and increases in bonuses accruals and matching contributions to the employees’ retirement plan; (ii) a $1.8 million decrease in net gains on OREO operations, driven by a decrease in net realized gains on sales of residential OREO properties in the Puerto Rico region; (iii) a $0.6 million increase in professional service fees, driven by higher collections, appraisals, and credit-related fees; and (iv) a $0.4 million increase in taxes, other than income taxes, primarily related to higher municipal license taxes. These variances were partially offset by a $1.0 million decrease in FDIC deposit insurance expense due to the lower special assessment charge recognized during 2024.

Consumer (Retail) Banking

The Consumer (Retail) Banking segment includes the Corporation’s consumer lending, commercial lending to small businesses, commercial transaction banking, and deposit-taking activities (other than those assigned to the Commercial and Corporate Banking segment) primarily conducted through FirstBank’s branch network and loan centers in Puerto Rico. Retail deposits gathered through each branch of FirstBank’s retail network serve as one of the funding sources for the lending and investing activities. Other activities included in this segment are insurance activities in the Puerto Rico region.

For the year ended December 31, 2024, segment income before taxes for the Consumer (Retail) Banking segment increased to $243.3 million, compared to $210.4 million for the same period in 2023. The highlights of the segment’s financial results are as follows:

●Net interest income for the year ended December 31, 2024 was $550.8 million, compared to $484.3 million for the same period in 2023. The increase of $66.6 million was primarily driven by higher income from funds loaned to the Treasury and Investments segment, which resulted from higher market interest rates and higher average deposit balances which more than offset the increase in interest rates paid on retail deposits.

●The provision for credit losses for the year ended December 31, 2024 increased by $29.2 million to $95.3 million,

compared to $66.1 million for the same period in 2023. The increase in provision expense was driven by higher chargeoff and delinquency levels and portfolio growth, partially offset by a $10.0 million recovery associated with the bulk sale of fully charged-off loans recorded during 2024 and an improvement on the economic outlook of certain macroeconomic variables, mainly in the projection of the unemployment rate.

●Non-interest income for the year ended December 31, 2024 was $96.2 million, compared to $92.6 million for the same period in 2023. The increase of $3.6 million was driven by a $2.4 million increase in card and processing income, mainly in merchant-related fees due to higher transactional volumes, and a $0.9 million increase in insurance commission income, mainly related to higher contingent commissions.

●Non-interest expenses for the year ended December 31, 2024 were $308.4 million, compared to $300.4 million for the same period in 2023. The increase of $8.0 million was driven by: (i) a $5.8 million increase in employees’ compensation

and benefits expenses, mainly related to annual salary merit increases and increases in bonuses accruals, stock-based compensation expense, and matching contributions to the employees’ retirement plan; (ii) a $2.3 million increase in professional service fees, driven by information technology infrastructure enhancements; (iii) a $1.5 million increase in occupancy and equipment expenses; and (iv) a $1.4 million increase in credit and debit card processing fees, driven by higher transactional volumes. These variances were partially offset by a $1.6 million decrease in FDIC deposit insurance expense due to a lower special assessment charge recognized during 2024, and a $1.5 million decrease in business promotion expenses, as a result of lower marketing efforts.

Commercial and Corporate Banking

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. This segment consists of the Corporation’s commercial lending (other than small business commercial loans) and commercial deposit-taking activities (other than the government sector). A substantial portion of the commercial and corporate banking portfolio is secured by the underlying real estate collateral and the personal guarantees from the borrowers.

For the year ended December 31, 2024, segment income before taxes for the Commercial and Corporate Banking segment increased to $137.9 million, compared to $119.8 million for the same period in 2023. The highlights of the segment’s financial results are as follows:

●Net interest income for the year ended December 31, 2024 was $157.7 million, compared to $142.3 million for the same period in 2023. The increase of $15.3 million was primarily attributable to a $22.7 million increase in interest income due to higher average loan balances combined with the effect of higher market interest rates on the upward repricing of variable-rate loans. These factors were partially offset by a $6.5 million increase in the cost of funds charged to this segment resulting from higher market interest rates.

●The provision for credit losses for the year ended December 31, 2024 was a net benefit of $12.9 million, compared to a net benefit of $6.0 million for the same period in 2023. The net benefit recorded during 2024 was associated with the

improved financial condition of certain borrowers; a recovery of $5.0 million associated with a C&I loan in the Puerto Rico region; and an improvement on the economic outlook of certain macroeconomic variables, particularly variables associated with commercial real estate property performance and the forecasted CRE price index; partially offset by portfolio growth. Meanwhile, the net benefit recorded during 2023 reflects an improvement on the economic outlook of certain macroeconomic variables such as the unemployment rate, partially offset by a $1.7 million incremental reserve associated with the inflow to nonaccrual status of a $9.5 million C&I loan and a $1.0 million charge recorded on a nonaccrual commercial mortgage loan transferred to OREO during 2023.

●Non-interest income for the year ended December 31, 2024 was $7.0 million, compared to $11.1 million for the same period in 2023. The decrease of $4.1 million was driven by the $3.6 million gain recognized in 2023 from a legal settlement.

●Non-interest expenses for the year ended December 31, 2024 were $39.7 million, compared to $39.6 million for the same

period in 2023. The increase of $0.1 million was mainly due to a $2.1 million increase in employees’ compensation and benefits expenses, mainly related to annual salary merit increases and increases in bonuses accruals and stock-based compensation expense; a $0.8 million increase in taxes, other than income taxes, primarily related to higher municipal license taxes; and a $0.7 million increase in occupancy and equipment expenses. These variances were partially offset by a $2.6 million increase in net gains on OREO operations, driven by a $2.3 million realized gain on the sale of a commercial real estate OREO property in the Puerto Rico region during 2024; and a $1.4 million decrease in FDIC deposit insurance expense due to a lower special assessment charge recognized during 2024.

Treasury and Investments

The Treasury and Investments segment is responsible for the Corporation’s investment portfolio and treasury functions. The treasury function centrally manages funding by providing funds to the Mortgage Banking, Consumer (Retail) Banking, Commercial and Corporate Banking, United States Operations, and Virgin Islands Operations segments to support their respective lending activities and by compensating these units for deposits gathered. The Treasury function also obtains funds through brokered deposits, advances from the FHLB, and repurchase agreements involving investment securities, among other funding sources.

The investment function is intended to implement a funding strategy for the purposes of liquidity management, interest rate risk management and earnings enhancement.

The funds transfer pricing charged or credited by Treasury and Investments are calculated using the SOFR/swap curve with term rates, adjusted for a funding spread that reflects the Corporation’s cost of funds.

For the year ended December 31, 2024, segment loss before taxes for the Treasury and Investments segment was $120.8 million, compared to $38.4 million for the same period in 2023. The highlights of the segment’s financial results are as follows:

●Net interest loss for the year ended December 31, 2024 was $112.1 million, compared to $31.9 million for the same period in 2023. The increase in net interest loss of $80.3 million was primarily due to a higher charge on funds loaned from the Consumer (Retail) Banking segment.

●Non-interest income for the year ended December 31, 2024 was $0.5 million, compared to $2.1 million for the same period in 2023. The decrease was driven by the $1.6 million gain, recognized during 2023, on the repurchase of $21.4 million in junior subordinated debentures.

●Non-interest expenses for the year ended December 31, 2024 were $9.2 million, compared to $8.6 million for the same period in 2023. The increase of $0.6 million was mainly in professional service fees.

United States Operations

The United States Operations segment consists of all banking activities conducted by FirstBank on the U.S. mainland. FirstBank provides a wide range of banking services to individual and corporate customers, primarily in southern Florida, through eight banking branches. This segment offers a variety of consumer and commercial banking products and services. Consumer banking products include checking, savings and money market accounts, retail CDs, internet banking services, residential mortgages, and home equity loans and lines of credit. Retail deposits, as well as FHLB advances and brokered CDs, allocated to this operation serve as funding sources for its lending activities.

Commercial banking services include checking, savings and money market accounts, retail CDs, internet banking services, cash management services, remote data capture, and automated clearing house (“ACH”) transactions. Loan products include the traditional C&I and commercial real estate products, such as lines of credit, term loans, and construction loans.

For the year ended December 31, 2024, segment income before taxes for the United States Operations segment increased to $42.7 million, compared to $26.2 million for the same period in 2023. The highlights of the segment’s financial results are as follows:

●Net interest income for the year ended December 31, 2024 was $78.0 million, compared to $70.8 million for the same period in 2023. The increase of $7.2 million was mainly related to higher average loan balances combined with the effect of higher market interest rates on the upward repricing of variable-rate loans and on new loan originations in the commercial and construction loan portfolios, that outweighed the impact of the increase in interest rates paid on deposits.

●The provision for credit losses for the year ended December 31, 2024 was a net benefit of $6.7 million, compared to an expense of $8.6 million for the same period in 2023. The net benefit recorded during 2024 was associated with an

improvement on the economic outlook of certain macroeconomic variables, particularly variables associated with commercial real estate property performance and the forecasted CRE price index; and $1.2 million in recoveries of two commercial loans; partially offset by portfolio growth. Meanwhile, the provision for credit losses recorded during 2023 was mainly due to a $6.0 million charge associated with a nonaccrual C&I participated loan in the power generation industry.

●Non-interest income for the year ended December 31, 2024 was $3.6 million, compared to $6.8 million for the same period in 2023. The decrease of $3.2 million was mainly due to a $3.0 million gain recognized during 2023 associated with the sale of a banking premise.

●Non-interest expenses for the year ended December 31, 2024 were $45.6 million, compared to $42.8 million for the same period in 2023. The increase of $2.8 million was driven by a $2.2 million increase in employees’ compensation and benefits expenses, mainly related to annual salary merit increases and increases in bonuses accruals, stock-based compensation expense, and matching contributions to the employees’ retirement plan.

Virgin Islands Operations

The Virgin Islands Operations segment consists of all banking activities conducted by FirstBank in the USVI and BVI, including commercial and consumer banking services. This segment operates through eight banking branches serving in the USVI islands of St.
Thomas, St. Croix, and St. John, as well as the island of Tortola in the BVI. This segment’s primary business activities include consumer and commercial lending, and deposit-taking activities. Retail deposits gathered through each branch serve as the primary funding sources for the segment’s lending activities.

For the year ended December 31, 2024, segment income before taxes for the Virgin Islands Operations segment increased to $29.7 million, compared to $24.6 million for the same period in 2023. The increase was mainly due to higher income from funds loaned to other business segments resulting from higher market interest rates that outweighed the impact of the increase in interest rates paid on government time deposits.

FINANCIAL CONDITION AND OPERATING DATA ANALYSIS

Financial Condition

The following table presents an average balance sheet of the Corporation for the indicated periods:| | | | | December 31, | | | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | | 2024 | | 2023 | | | 2022 |
| (In thousands) | | | | | | | |
| ASSETS | | | | | | | |
| Interest-earning assets: | | | | | | | |
| Money market and other short-term investments | | $ | 710,945 | $ | 584,083 | $ | 1,156,127 |
| U.S. and Puerto Rico government obligations | | | 2,517,327 | | 2,843,284 | | 2,870,889 |
| MBS | | | 3,348,925 | | 3,702,908 | | 4,052,660 |
| FHLB stock | | | 34,161 | | 36,606 | | 20,419 |
| Other investments | | | 18,510 | | 14,167 | | 12,747 |
| Total investments | | | 6,629,868 | | 7,181,048 | | 8,112,842 |
| Residential mortgage loans | | | 2,816,732 | | 2,814,102 | | 2,886,594 |
| Construction loans | | | 221,822 | | 172,952 | | 121,642 |
| Commercial loans | | | 5,606,827 | | 5,244,503 | | 5,092,638 |
| Finance leases | | | 879,437 | | 789,870 | | 636,507 |
| Consumer loans | | | 2,830,678 | | 2,704,877 | | 2,461,632 |
| Total loans | | | 12,355,496 | | 11,726,304 | | 11,199,013 |
| Total interest-earning assets, excluding valuation | | | | | | | |
| allowances and ACL | | | 18,985,364 | | 18,907,352 | | 19,311,855 |
| Total non-interest-earning assets | | | 578,900 | | 573,010 | | 603,728 |
| Valuation allowances and ACL | (1) | | (602,908) | | (773,939) | | (536,934) |
| Total assets | | $ | 18,961,356 | $ | 18,706,423 | $ | 19,378,649 |

LIABILITIESInterest-bearing liabilities:
Time deposits		$	2,999,078	$	2,590,313	$	2,213,145
Brokered CDs			627,454		348,829		69,694
Other interest-bearing deposits			7,567,514		7,664,793		8,279,320
Interest-bearing deposits			11,194,046		10,603,935		10,562,159
Securities sold under agreements to repurchase			245		54,570		194,948
Advances from the FHLB			500,055		541,000		179,452
Other borrowings			146,044		171,184		184,173
Total interest-bearing liabilities			11,840,390		11,370,689		11,120,732
Total non-interest-bearing liabilities	(2)		5,556,423		5,950,495		6,622,638
Total liabilities			17,396,813		17,321,184		17,743,370
STOCKHOLDERS’ EQUITY
Stockholders’ equity			1,564,543		1,385,239		1,635,279
Total liabilities and stockholders' equity		$	18,961,356	$	18,706,423	$	19,378,649

(1) Includes, among other things, the ACL on loans and finance leases and debt securities, as well as unrealized gains and losses on available-for-sale debt securities.
(2) Includes, among other things, non-interest-bearing deposits.

The Corporation’s total average assets were $19.0 billion for the year ended December 31, 2024, compared to $18.7 billion for the

year ended December 31, 2023, a net increase of $254.9 million. The variance primarily reflects the following: (i) a $629.2 million increase in the average balance of total loans, mainly consisting of a $411.2 million increase in the commercial and construction loan portfolios and an increase of $215.4 million in consumer loans, mainly in the auto loan and finance lease portfolios; (ii) an increase of $126.9 million in the average balance of interest-bearing cash, which consisted primarily of deposits maintained at the FED; and (iii) a

decrease of $165.7 million in unrealized losses on available-for-sale debt securities. These variances were partially offset by a decrease of $679.9 million in debt securities, mainly due to maturities and principal repayments of U.S. agencies MBS and debentures ,

net of purchases.

The Corporation’s total average liabilities were $17.4 billion for the year ended December 31, 2024, a net increase of $75.6 million compared to December 31, 2023. The net increase was related to increases of $408.8 million in the average balance of non-brokered

time deposits and $278.6 million in the average balance of brokered CDs. These variances were partially offset by a decrease of $394.1 million in the average balance of non-interest-bearing liabilities, primarily in non-interest-bearing deposits, reflecting the effect

of customers allocating more cash into higher yielding alternatives; a decrease of $120.4 million in the average balance of total borrowings, mainly associated with FHLB advances, and the aforementioned $100.0 million redemption of outstanding TruPS ; and a decrease of $97.3 million in interest-bearing non-maturity deposits.

Assets

The Corporation’s total assets were $19.3 billion as of December 31, 2024, an increase of $383.4 million from December 31, 2023, primarily related to an increase in total loans and cash and cash equivalents, partially offset by net repayments of investment securities.

Loans Receivable, including Loans Held for Sale

As of December 31, 2024, the Corporation’s total loan portfolio before the ACL amounted to $12.8 billion, an increase of $569.0 million compared to December 31, 2023. In terms of geography, the growth consisted of increases of $290.8 million in the Puerto Rico region, $273.0 million in the Florida region, and $5.2 million in the Virgin Islands region. On a portfolio basis, the growth consisted of increases of $454.3 million in commercial and construction loans; $100.1 million in consumer loans, primarily auto loans and finance leases; and $14.6 million in residential mortgage loans.

As of December 31, 2024, 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 $12.7 billion as of December 31, 2024, the Corporation had credit risk concentration of approximately 79% in the Puerto Rico region, 18% in the United States region (mainly in the state of Florida), and 3% in the Virgin Islands region, as shown in the following table:| 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 |

As of December 31, 2023Puerto RicoVirgin IslandsUnited StatesTotal| (In thousands) | | | | | | |
| --- | --- | --- | --- | --- | --- | --- |
| Residential mortgage loans | $2,187,875 | $ | 168,131 | $465,720 | $ | 2,821,726 |
| Construction loans | 111,664 | | 3,737 | 99,376 | | 214,777 |
| Commercial mortgage loans | 1,725,325 | | 65,312 | 526,446 | | 2,317,083 |
| C&I loans | 2,130,368 | | 119,040 | 924,824 | | 3,174,232 |
| Total commercial loans | 3,967,357 | | 188,089 | 1,550,646 | | 5,706,092 |
| Consumer loans and finance leases | 3,583,272 | | 68,498 | | 5,895 | 3,657,665 |
| Total loans held for investment, gross | $9,738,504 | $ | 424,718 | $2,022,261 | $ | 12,185,483 |
| Loans held for sale | | 7,368 | - | | - | 7,368 |
| Total loans, gross | $9,745,872 | $ | 424,718 | $2,022,261 | $ | 12,192,851 |

First BanCorp. relies primarily on its retail network of branches to originate residential and consumer personal loans. The Corporation manages its construction and commercial loan originations through centralized units and most of its originations come from existing customers, as well as through referrals and direct solicitations. Auto loans and finance leases originations rely primarily on the relationships with auto dealers and dedicated sales professionals who serve selected locations in order facilitate originations.

The following table sets forth certain additional data (including loan production) related to the Corporation's loan portfolio net of the ACL on loans and finance leases as of and for the indicated dates:| | | | For the Year Ended December 31, | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | | | 2024 | | 2023 | | 2022 |
| (Dollars in thousands) | | | | | | | |
| Beginning balance as of January 1 | | $ | 11,931,008 | $ | 11,304,667 | $ | 10,826,783 |
| Residential real estate loans originated and purchased | | | 460,726 | | 424,641 | | 468,599 |
| Construction loans originated | | | 207,421 | | 154,720 | | 112,640 |
| C&I and commercial mortgage loans originated and purchased | | | 3,113,258 | | 2,750,817 | | 2,950,904 |
| Finance leases originated | | | 263,693 | | 327,528 | | 308,811 |
| Consumer loans originated | | | 1,372,537 | | 1,468,794 | | 1,516,316 |
| Total loans originated and purchased | | | 5,417,635 | | 5,126,500 | | 5,357,270 |
| Sales of loans | | | (165,533) | | (155,733) | | (293,213) |
| Repayments and other decreases | (1) | | (4,665,220) | | (4,344,426) | | (4,586,173) |
| Net increase | | | 586,882 | | 626,341 | | 477,884 |

Ending balance as of December 31$12,517,890$11,931,008$11,304,667

Percentage increase4.92%5.54%4.41% _____ (1)Includes, among other things, the change in the ACL on loans and finance leases and cancellation of loans due to the repossession of the collateral and loans repurchased.

Residential Real Estate Loans

As of December 31, 2024, the Corporation’s total residential mortgage loan portfolio, including loans held for sale, increased by $14.6 million compared to the balance as of December 31, 2023. The increase in the residential mortgage loan portfolio reflects a

growth of $39.8 million in the Florida region, partially offset by decreases of $13.7 million in the Puerto Rico region and $11.5 million in the Virgin Islands region. The increase was driven by the volume of new loan originations, mainly non-conforming loan originations kept on the balance sheet, which more than offset repayments. Approximately 47% of the $362.2 million residential mortgage loan originations in the Puerto Rico region during 2024 consisted of conforming loans, compared to 46% of the $324.3 million originated in 2023.

As of December 31, 2024, the majority of the Corporation’s outstanding balance of residential mortgage loans in the Puerto Rico and the Virgin Islands regions consisted of fixed-rate loans that traditionally carry higher yields than residential mortgage loans in the Florida region. In the Florida region, approximately 34% of the residential mortgage loan portfolio consisted of hybrid adjustable-rate mortgages. In accordance with the Corporation’s underwriting guidelines, residential mortgage loans are primarily fully documented loans, and the Corporation does not originate negative amortization loans.

Residential mortgage loan originations for the year ended December 31, 2024 amounted to $460.7 million, compared to $424.6 million for 2023. The increase in residential mortgage loan originations of $36.1 million mainly consisted of a $37.9 million increase in the Puerto Rico region.

Commercial and Construction Loans

As of December 31, 2024, the Corporation’s commercial and construction loans portfolio increased by $454.3 million, as compared to the balance as of December 31, 2023. This growth included an increase of $231.6 million in the Florida region, reflecting, among

other things, the effect of the origination of several commercial and construction relationships, each in excess of $10 million, of which $186.3 million are related to ten C&I relationships and $63.1 million are related to four commercial mortgage relationships. These variances were partially offset by payoffs and paydowns of five C&I relationships totaling $78.9 million and lower utilization of C&I lines of credit.

The Puerto Rico region also grew by $207.2 million, when compared to the balance as of December 31, 2023. This increase was driven by a $69.9 million increase in construction loans, which includes a $46.4 million increase in construction loans funded through

conduit financing structures to support the federal programs of Low-Income Housing Tax Credit (“LIHTC”) combined with Community Development Block Grant-Disaster Recovery (“CDBG-DR”) funding; the origination of five commercial relationships with an aggregate balance of $129.9 million; higher utilization of C&I lines of credit; and the origination of two loans to municipalities with an aggregate balance of $23.6 million. These variances were partially offset by multiple payoffs and paydowns, including the payoffs of three commercial and construction relationships totaling $47.5 million and the sale of an $8.2 million nonaccrual C&I loan, net of a $1.2 million charge-off.

In the Virgin Islands region, commercial and construction loans increased by $15.5 million, as compared to the balance as of December 31, 2023, mainly associated with disbursements of a government line of credit.

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 December 31, 2024, the Corporation’s total commercial mortgage loan exposure amounted to $2.6 billion, or 20% of the total loan portfolio. In terms of geography, $1.8 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 $1.8 billion exposure in the Puerto Rico region was comprised mainly of 40% in the retail industry, 25% in office real estate, and 22% in the hotel industry. The $0.7 billion exposure in the Florida region was comprised mainly of 35% in the retail industry, 22% in the hotel industry, and 8% in office real estate. Of the Corporation’s total commercial mortgage loan exposure of $2.6 billion, $547.6 million matures or reprices within the next 12 months. Of this amount, $420.7 million matures within the next 12 months and has a weighted-average interest rate of approximately 6.40%. Commercial mortgage loan exposure in the office real estate industry, which matures within the next 12 months, amounted to $120.4 million and has a weighted-average interest rate of approximately 6.51%. During 2024, the Corporation modified $127.5 million commercial mortgage loans, of which $110.0 million are related to a commercial mortgage relationship that had been previously reported as a troubled debt restructuring under ASC 310-40 and was performing according to modified terms and a $12.2 million nonaccrual commercial mortgage loan in the Florida region.

As of December 31, 2024 and 2023, the Corporation’s total exposure to shared national credit (“SNC”) loans (including unused commitments) amounted to $1.3 billion and $1.2 billion, respectively. As of December 31, 2024, approximately $360.8 million of the SNC exposure is related to the portfolio in the Puerto Rico region and $894.3 million is related to the portfolio in the Florida region.

Commercial and construction loan originations (excluding government loans) for the year ended December 31, 2024 amounted to $3.1 billion, compared to $2.7 billion for 2023. The increase of $416.3 million was mainly due to an increase of $347.4 million in the Florida region. The growth in the Florida region for 2024 includes the effect of the origination of multiple C&I relationships, each in excess of $10 million, with an aggregate balance of $274.3 million, increased utilization of C&I lines of credit, and an increase in commercial mortgage loan originations of $64.4 million.

Government loan originations for the year ended December 31, 2024 amounted to $179.5 million, compared to $180.7 million for the comparable period in 2023.

Consumer Loans and Finance Leases

As of December 31, 2024, the Corporation’s consumer loans and finance leases portfolio increased by $100.1 million to $3.8 billion, mainly in the Puerto Rico region, reflecting growth of $89.9 million and $42.6 million in the auto loan and finance lease portfolios, respectively, partially offset by decreases in the remaining portfolio classes, including a $19.4 million decrease in personal loans.

Originations of auto loans (including finance leases) for the year ended December 31, 2024 amounted to $933.9 million, compared to $1.0 billion for the comparable period in 2023. The decrease was mainly in the Puerto Rico region. Other consumer loan

originations, other than credit cards, for the year ended December 31, 2024 amounted to $236.7 million, compared to $302.6 million for the comparable period in 2023. Most of the decrease in other consumer loan originations was in the Puerto Rico region as a result of a higher interest rate environment . The utilization activity on the outstanding credit card portfolio for the year ended December 31, 2024 amounted to $465.6 million, compared to $492.6 million for the comparable period in 2023.

Maturities of Loans Receivable

The following tables present the loans held for investment portfolio as of December 31, 2024 by remaining contractual maturities and interest rate type:

After One YearAfter Five Years

One Year or LessThrough Five YearsThrough 15 YearsAfter 15 YearsTotal Portfolio| (In thousands) | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Residential mortgage | | $ | 106,819 | $ | 416,373 | $ | 1,152,616 | $ | 1,152,623 | $ | 2,828,431 |
| Construction loans | | | 45,976 | | 105,823 | | 71,184 | | 5,413 | | 228,396 |
| Commercial mortgage loans | | | 572,353 | | 1,619,325 | | 369,558 | | 4,748 | | 2,565,984 |
| C&I loans | | | 1,352,683 | | 1,674,202 | | 336,114 | | 3,039 | | 3,366,038 |
| Consumer loans | | | 1,167,710 | | 2,337,299 | | 252,411 | | 287 | | 3,757,707 |
| Total loans | (1) | $ | 3,245,541 | $ | 6,153,022 | $ | 2,181,883 | $ | 1,166,110 | $ | 12,746,556 |

		Amount due in one year or less at:					Amount due after one year:
		Fixed Interest Rates		Variable InterestRates		Fixed Interest Rates		Variable InterestRates		Total Portfolio
Residential mortgage		$	103,200	$	3,619	$	2,542,738	$	178,874	$	2,828,431
Construction loans			5,153		40,823		136,380		46,040		228,396
Commercial mortgage loans			348,193		224,160		1,533,795		459,836		2,565,984
C&I loans			303,764		1,048,919		559,633		1,453,722		3,366,038
Consumer loans			919,901		247,809		2,584,333		5,664		3,757,707
Total loans	(1)	$	1,680,211	$	1,565,330	$	7,356,879	$	2,144,136	$	12,746,556

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.

The Corporation’s total available-for-sale debt securities portfolio as of December 31, 2024 amounted to $4.6 billion, a $664.7 million decrease from December 31, 2023. The decrease was driven by repayments of $623.4 million associated with matured

securities and approximately $373.6 million in repayments of U.S. agencies MBS and debentures. This was partially offset by approximately $266.2 million in purchases of available-for-sale debt securities, of which $224.5 million consisted of residential U.S.
agencies MBS and $40.7 million of U.S. agencies commercial MBS, as well as $73.2 million increase in fair value attributable to changes in market interest rates. As of December 31, 2024, the Corporation had a net unrealized loss on available-for-sale debt securities of $559.6 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 December 31, 2024, cash inflows ranging from $1.5 billion to $1.6 billion, which are expected to be received during 2025 from the contractual maturities of the available-for-sale debt securities portfolio , which has an average yield of 1.24%. These inflows are expected to be redeployed to fund loan growth, reinvested into higher-yielding securities, or used to repay maturing brokered CDs.

As of December 31, 2024, 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. In addition, as of December 31, 2024, the Corporation held a bond

issued by the Puerto Rico Housing Finance Authority (“PRHFA”), classified as available for sale, specifically a residential passthrough MBS in the aggregate amount of $2.9 million (fair value - $1.6 million). This residential pass-through MBS issued by the PRHFA is collateralized by certain second mortgages originated under a program launched by the Puerto Rico government in 2010 and had an unrealized loss of $1.3 million as of December 31, 2024, of which $0.3 million is due to credit deterioration. During 2021, the Corporation placed this instrument in nonaccrual status based on the delinquency status of the underlying second mortgage loans collateral.

As of December 31, 2024, the Corporation’s held-to-maturity debt securities portfolio, before the ACL, decreased to $317.8 million, compared to $354.2 million as of December 31, 2023.

Held-to-maturity debt securities include fixed-rate GSEs’ MBS with a carrying value of $225.3 million (fair value of $212.4 million) as of December 31, 2024, compared to $247.1 million as of December 31, 2023. Held-to-maturity debt securities also include $92.4 million as of December 31, 2024, compared to $107.0 million as of December 31, 2023, 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. Puerto Rico municipal bonds typically are not issued in bearer form, are not registered with the SEC, and are not rated by external credit agencies. These bonds have seniority to the payment of operating costs and expenses of the municipality and, in most cases, are supported by assigned property tax revenues. As of December 31, 2024, approximately 57% of the Corporation’s municipal bonds consisted of obligations issued by three 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 loans.

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 3 – “Debt Securities” for the ACL of the exposure to Puerto Rico municipal bonds.

The following table presents the carrying values of investments as of the indicated dates:

December 31, 2024December 31, 2023| (In thousands) | | | | |
| --- | --- | --- | --- | --- |
| Money market investments | $ | 1,200 | $ | 1,239 |
| Available-for-sale debt securities, at fair value: | | | | |
| U.S. government and agencies obligations | | 1,899,520 | | 2,443,790 |
| Puerto Rico government obligations | | 1,620 | | 1,415 |
| Residential | | 2,481,253 | | 2,633,161 |
| Commercial | | 181,909 | | 151,618 |
| Other | | 1,000 | | - |
| Total available-for-sale debt securities, at fair value | | 4,565,302 | | 5,229,984 |
| Held-to-maturity debt securities, at amortized cost: | | | | |
| Residential | | 129,319 | | 146,468 |
| Commercial | | 96,025 | | 100,670 |
| Puerto Rico municipal bonds | | 92,442 | | 107,040 |
| ACL for held-to-maturity Puerto Rico municipal bonds | | (802) | | (2,197) |
| Total held-to-maturity debt securities | | 316,984 | | 351,981 |
| Equity securities, including $34.0 million and $34.6 million of FHLB stock | | | | |
| as of December 31, 2024 and 2023, respectively | | 52,018 | | 49,675 |
| Total money market investments and investment securities | $ | 4,935,504 | $ | 5,632,879 |

The carrying values of debt securities as of December 31, 2024 by contractual maturity (excluding MBS), are shown below:| | Carrying Amount | | Weighted-Average Yield % | |
| --- | --- | --- | --- | --- |
| (Dollars in thousands) | | | | |
| U.S. government and agencies obligations: | | | | |
| Due within one year | $ | 1,127,041 | | 0.79 |
| Due after one year through five years | | 764,679 | | 0.96 |
| Due after ten years | | 7,800 | | 4.73 |
| | | 1,899,520 | | 0.87 |
| Puerto Rico government and municipalities obligations: | | | | |
| Due within one year | | 2,214 | | 5.07 |
| Due after one year through five years | | 61,289 | | 7.33 |
| Due after five years through ten years | | 13,184 | | 5.79 |
| Due after ten years | | 17,375 | | 6.80 |
| | | 94,062 | | 6.96 |
| Other | | 1,000 | | 2.32 |
| MBS | | 2,888,506 | | 1.95 |
| ACL on held-to-maturity debt securities | | (802) | | - |
| Total debt securities | $ | 4,882,286 | | 1.65 |

Net interest income in future periods could be affected by prepayments of MBS. Any acceleration in the prepayments of MBS purchased at a premiumwould lower yields on these securities, since the amortization of premiums paid upon acquisition would

accelerate. Conversely, acceleration of the prepayments of MBS would increase yields on securities purchased at a discount, since the accretion of the discount would accelerate. These risks are directly linked to future period market interest rate fluctuations. Net interest income in future periods might also be affected by the Corporation’s investment in callable securities. As of December 31, 2024, the Corporation had approximately $1.3 billion in callable debt securities (U.S. agencies debt securities) with an average yield of 0.81% of which approximately 64% were purchased at a discount and 3% 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 rate risk management strategies. Also, refer to Note 3 – “Debt Securities” for additional information regarding the Corporation’s debt securities portfolio.

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.

Risk Definition

Liquidity Risk

Liquidity risk is the risk to earnings or capital arising from the possibility that the Corporation will not have sufficient cash to meet its short-term liquidity demands, such as from deposit redemptions or loan commitments. See “Liquidity Risk and Capital Adequacy ” below for further details.

Interest Rate Risk

Interest rate risk is the risk arising from adverse movements in interest rates. See “Interest Rate Risk Management” below for further details.

Market Risk

Market risk is the risk of loss in the value of assets or liabilities due to changes in market conditions, including movements in market rates or prices, such as interest rates or equity prices. The Corporation evaluates market risk together with interest rate risk.
Both changes in market values and changes in interest rates are evaluated and forecasted. See “Interest Rate Risk Management” below for the effects of changes in interest rates on net interest income.

Credit Risk

Credit risk is the risk arising from a borrower’s or a counterparty’s failure to meet the terms of a contract with the Corporation or otherwise to perform as agreed. See “Credit Risk Management” below for further details.

Operational Risk

Operational risk is the risk arising from problems with the delivery of services or products. This risk is a function of internal controls, information systems, third party vendors, employees and operating processes. It also includes risks associated with the Corporation’s preparedness for the occurrence of an unforeseen event. This risk is inherent across all functions, products, and services of the Corporation. See “Operational Risk” below for further details.

Legal, Regulatory and Compliance Risk

Legal and regulatory risk is the risk arising from the Corporation’s failure to comply with laws or regulations that can adversely affect the Corporation’s reputation and/or increase its exposure to litigation or penalties.

Reputational Risk

Reputational risk is the risk arising from any adverse effect on the Corporation’s market value, capital, or earnings arising from negative public opinion, whether true or not. This risk affects the Corporation’s ability to establish new relationships or services, or to continue servicing existing relationships.

Model Risk

Model risk is the potential for adverse consequences from decisions based upon incorrect or misused model outputs and reports or based upon an incomplete or inaccurate model. The use of models exposes the Corporation to some level of model risk. Model errors can contribute to incorrect valuations and lead to operational errors, inappropriate business decisions, or incorrect financial entries.
The Corporation seeks to reduce model risk through rigorous model identification and validation.

Capital Risk

Capital risk is the risk that the Corporation may lose value on its capital or have an inadequate capital plan, which would result in insufficient capital resources to meet minimum regulatory requirements (the Corporation’s authority to operate as a bank is dependent upon the maintenance of adequate capital resources), support its credit rating, or support its growth and strategic options.

Strategic Risk

Strategic risk is the risk arising from adverse business decisions, poor implementation of business decisions, or lack of responsiveness to changes in the banking industry, and operating environment. This risk is a function of the compatibility of the Corporation’s strategic goals, the business strategies developed to achieve those goals, the resources deployed against these goals, and the quality of implementation.

Information Technology and Cybersecurity Risk

Information technology risk is the risk arising from the loss of confidentiality, integrity, or availability of information systems and risk of cyber incidents or data breaches. It includes business risks associated with the use, ownership, operation, involvement, influence, and adoption of information technology within the Corporation.

Risk Governance

The following discussion highlights the roles and responsibilities of the key participants in the Corporation’s risk management framework:

Board of Directors

The Board of Directors oversees the Corporation’s overall risk governance program with the assistance of the Board committees discussed below.

Risk Committee

The Board of Directors has appointed the Risk Committee to assist the Board in fulfilling its responsibility to oversee the Corporation’s management of its company-wide risk management framework. The committee’s role is one of oversight, recognizing that management is responsible for designing, implementing, and maintaining an effective risk management framework. The committee’s primary responsibilities are to:

●Review and discuss management’s assessment of the Corporation’s aggregate enterprise-wide profile and the alignment of the Corporation’s risk profile with the Corporation’s strategic plan, goals, and objectives;

●Review and recommend to the Board the parameters and establishment of the Corporation’s risk tolerance and risk appetite;

●Receive reports from management and, if appropriate, other Board committees, regarding the Corporation’s policies and procedures related to the Corporation’s adherence to risk limits and its established risk tolerance and risk appetite or on selected risk topics;

●Oversee the strategies, policies, procedures, and systems established by management to identify, assess, measure, and manage the major risks facing the Corporation, which may include an overview of the Corporation’s credit risk, operational risk, information technology risk, compliance risk, interest rate risk, liquidity risk, market risk, and reputational risk, as well as management’s capital management, planning, and process;

●Oversee the Corporation’s Retail Quality Assurance and Loan Review program;

●Oversee management’s activities with respect to capital stress testing, model risk management, vendor management, information technology risk and operational risk;

●Review and discuss with management risk assessments for new products and services;

●Review periodically the scope and effectiveness of the Corporation’s regulatory compliance policies and programs; and

●Annually assess the Corporation’s institutional insurance programs.

The Risk Committee also receives regular reports and engages in discussions throughout the year on the effectiveness of the Corporate Information Security Program (“CISP”), including its inherent risk, the roadmap for addressing those risks, and the progress in doing so. The Risk Committee annually reviews and approves the CISP and annually receives a report on related security safeguards in accordance with the Gramm-Leach-Bliley Act.
Asset and Liability Committee

The Board of Directors has appointed the Asset and Liability Committee to assist the Board in its oversight of the Corporation’s asset and liability management policies related to the management of the Corporation’s funds, investments, liquidity, market and interest rate risk, and the use of derivatives. In doing so, the committee’s primary functions involve:

●The establishment of a process to enable the identification, assessment, and management of risks that could affect the Corporation’s assets and liabilities management;

●The identification of the Corporation’s risk tolerance levels for yield maximization relating to its assets and liabilities management;

●The evaluation of the adequacy, effectiveness, and compliance with the Corporation’s risk management process relating to the Corporation’s assets and liabilities management, including management’s role in that process; and

●Oversight of the Corporation’s liquidity position and liquidity stress testing.

Credit Committee

The Board of Directors has appointed the Credit Committee to assist the Board in its oversight of the Corporation’s policies related to the Corporation’s lending function, or credit management. The committee’s primary responsibilities are to:

●Monitor the performance and quality of the Corporation’s credit portfolio through the review of selected measures of credit quality and trends and such other information as it deems appropriate;

●Oversee the effectiveness and administration of credit-related policies through the review of such processes, reports and other information as it deems appropriate, including the loan-quality grading and examination process, internal and external audits and examinations of the Corporation’s credit processes, the incidence of new problem assets, the frequency and reasons for credit policy exceptions, the loan review functions and the asset classification process;

●Review on an annual basis and recommend to the Board the lending authorities;

●Approve loans as required by the lending authorities approved by the Board; and

●Report to the Board regarding credit management.

Audit Committee

The Board of Directors has appointed the Audit Committee to assist the Board in fulfilling its responsibility to oversee management regarding:

●Oversight of the charter, strategic plan execution, annual internal audit plan execution, staffing, budget and organizational structure of the internal audit function;

●The conduct and integrity of the Corporation’s financial reporting to any governmental or regulatory body, stockholders, other users of the Corporation’s financial reports and the public;

●The Corporation’s internal control over financial reporting and disclosure controls and procedures;

●The qualifications, engagement, compensation, independence, and performance of the Corporation’s independent auditors, their conduct of the annual audit of the Corporation’s financial statements, and their engagement to provide any other services;

●The application of the Corporation’s related parties transaction policy as established by the Board;

●The application of the Corporation’s code of business conduct and ethics as established by management and the Board;

●The preparation of the Audit Committee report required to be included in the proxy statement for the Corporation’s annual stockholders’ meeting by the rules of the SEC;

●The Corporation’s legal, ethical compliance and fraud risk;

●Oversight responsibilities with respect to the Trust Department and its fiduciary responsibilities.

Corporate Governance and Nominating Committee

The Board of Directors has appointed the Corporate Governance and Nominating Committee to develop, review, and assess corporate governance principles. The Corporate Governance and Nominating Committee is responsible for director succession,

orientation and compensation, identifying and recommending new director candidates, overseeing the evaluation of the Board and management, annually recommending to the Board the designation of a candidate to hold the position of the Chairman of the Board, and directing and overseeing the Corporation’s executive succession plan. In addition, the Corporate Governance and Nominating Committee is responsible for overseeing the Corporation’s sustainability and environmental, social, and governance (“ESG”) policies.

Compensation and Benefits Committee

The Board of Directors has appoint ed the Compensation and Benefits Committee to oversee compensation policies and practices including the evaluation and recommendation to the Board of the proper and competitive salaries and incentive compensation programs of the executive officers and key employees of the Corporation.

Management Roles and Responsibilities

While the Board of Directors has the responsibility to oversee the risk governance program, management is responsible for implementing the necessary policies and procedures, and internal controls. To carry out these responsibilities, the Corporation has a clearly defined risk governance culture. To ensure that risk management is communicated at all levels of the Corporation, and each area understands its specific role, the Corporation has established several management level committees to support risk oversight, as follows:

Executive Risk Management Committee

The Executive Risk Management Committee is responsible for exercising oversight of information regarding the Corporation’s enterprise risk management framework, including the significant policies, procedures, and practices employed to manage the identified risk categories (credit risk, operational risk, legal and regulatory risk, reputational risk, model risk, and capital risk). In carrying out its oversight responsibilities, each committee member is entitled to rely on the integrity and expertise of those people providing information to the committee and on the accuracy and completeness of such information, absent actual knowledge of an inaccuracy.

The Chief Executive Officer appoints the Executive Risk Management Committee and members of the Corporation’s senior and executive management have the opportunity to share their insights about the types of risks that could impede the Corporation’s ability to achieve its business objectives. The Chief Risk Officer of the Corporation directs the agenda for the meetings and the Enterprise Risk Management (“ERM”) and Operational Risk Director serves as secretary of the committee and maintains the minutes on behalf of the committee. The General Auditor also participates in the committee as an observer.

The committee provides assistance and support to the Chief Risk Officer to promote effective risk management throughout the Corporation. The Chief Risk Officer and the ERM and Operational Risk Director report to the Committee matters related to the enterprise risk management framework of the Corporation, including, but not limited to:

●The risk governance structure;
●The risk assessments and profile of the Corporation;
●The Corporation’s risk appetite statement and risk tolerance;
●The risk management strategy and associated risk management initiatives and how both support the business strategy and business model of the Corporation; and ●The Corporate Incident Response Program.

Other Management Committees

As part of its governance framework, the Corporation has various additional risk management-related committees. These committees are jointly responsible for ensuring adequate risk measurement and management in their respective areas of authority. At the management level, these committees include:

●Management’s Investment and Asset Liability Committee (the “MIALCO”) – oversees interest rate and market risk, liquidity management and other related matters, including sensitivity of the Corporation’s earnings under various interest rate scenarios. This committee makes recommendations as to any adjustments to asset liability management and financial resource allocation in light of current events, risks, exposures, and regulatory requirements and approves related policies. Refer to “Liquidity Risk and Capital Adequacy” and “Interest Rate Risk Management” below for further details.

●Information Technology Steering Committee – oversees and counsels on matters related to information technology and cyber security, including the development of information management policies and procedures throughout the Corporation.

●Bank Secrecy Act Committee – oversees, monitors, and reports on the Corporation’s compliance with the Bank Secrecy Act.

●Credit Committees (consisting of a Credit Management Committee and a Delinquency Committee) – oversees and establishes standards for credit risk management processes within the Corporation. The Credit Management Committee is responsible for the approval of loans above an established size threshold. The Delinquency Committee is responsible for the periodic review of credit exceptions, past-due loans, portfolio concentrations, foreclosures, collection, loan mitigation programs, risk appetite, leveraged loans, business production and the Bank’s internal credit-risk rating classification;

●Vendor Management Committee – oversees policies, procedures, and related practices related to the Corporation’s vendor management efforts. The Vendor Management Committee’s primary functions involve the establishment of processes and procedures to enable the recognition, assessment, management, and monitoring of vendor management risks.

●ESG Committee – primarily responsible for aligning ESG priorities and initiatives for the year, setting and monitoring longterm objectives and goals, and leading the annual reporting process on ESG related topics. The Committee also oversees the sustainability policy and integrates climate change risk factors into the corporate governance, strategy and risk management.
The ESG Committee regularly reports to the Corporate Governance and Nominating Committee of the Board of Directors.

●The Community Reinvestment Act Executive Committee – oversees, monitors, and reports on the Corporation’s compliance with Community Reinvestment Act regulatory requirements.

●Anti-Fraud Committee – oversees the Corporation’s policies, procedures and related practices relating to the Corporation’s anti-fraud measures.

●Regulatory Compliance Committee – oversees the Corporation’s Regulatory Compliance Management System. The Regulatory Compliance Committee reviews and discusses any regulatory compliance laws and regulations that impact

performanceof regulatory compliance policies, programs and procedures. The Regulatory Compliance Committee also ensures the coordination of regulatory compliance requirements throughout departments and business units.

●Regulatory Reporting Committee – oversees and assists the senior officers in fulfilling their responsibility for oversight of the accuracy and timeliness of the required regulatory reports and related policies and procedures, addresses changes and/or concerns communicated by the regulators, and addresses issues identified during the regulatory reporting process. The Regulatory Reporting Committee oversees and updates, as necessary, the established controls and procedures designed to ensure that information in regulatory reports is recorded, processed, and accurately reported and on a timely basis.

●Complaints Management Committee – assists in overseeing the complaint management process implemented across the Corporation. The Complaints Management Committee supports the Corporation’s complaints management program relating to resolution of complaints within the lines of business. When appropriate, the Complaints Management Committee evaluates existing corrective actions within the lines of business related to complaints and complaint management practices within those business units.

●Project Portfolio Management Committee – reviews and oversees the performance of the portfolio and individual technology projects during the Project Management Cycle (Initiation, Planning, Execution, Control & Monitoring, and Closing). The Project Portfolio Management Committee balances conflicting demands between projects, decides on priorities assigned to each project based on organizational priorities and capacity, and oversees project budgets, risks, and actions taken to control and mitigate risks.

●Current Expected Credit Losses (“CECL”) Committee – oversees the Corporation’s requirements for the calculation of CECL, including the implementation of new models, if necessary, selection of vendors and monitoring of the guidance from different

regulatory agencies with regards to CECL requirements. The CECL Committee reviews estimated credit loss inputs, key assumptions, and qualitative overlays. In addition, the Committee approves the determination of reasonable and supportable periods used with respect to macroeconomic forecasts, and the historical loss reversion method and parameters. The CECL Committee reports to the Audit Committee the results of the ACL each reporting period.

●Capital Planning Committee – oversees the Capital Planning Process and is responsible for operating in accordance with the Capital Policy and ensuring compliance with its guidelines. The Capital Planning Committee develops and proposes to the Board changes to the Capital Policy and the capital plan targets, limits, performance metrics, internal stress testing and guidelines for Capital Management Activities.

●Business Continuity Committee – responsible to create governance and planning structure that will enable FirstBank to craft an enterprise Business Continuity Management (BCM) program that ensures the Bank is able to continue business operations after a major disruption occurs.

●Emergency Committee – Responsible to activate an emergency or disaster recovery procedure to ensure the safety of Bank’s personnel and the continuity of critical Bank services.

●Data Governance Council – Responsible for ensuring the effective governance of data assets. This includes establishing policies, standards, and procedures to promote data quality, security, compliance, and strategic data utilization. The Data Governance Council reports to the Executive Risk Management Committee.

Officers

As part of its governance framework, the following officers play a key role in the Corporation’s risk management process:

●The Chief Executive Officer (“CEO”) is responsible for the overall risk governance structure of the Corporation. The CEO is ultimately responsible for business strategies, strategic objectives, risk management priorities, and policies.

●The General Auditor is responsible for leading the corporate internal audit function and reporting matters directly to the Audit Committee and administratively to the CEO.

●The Chief Operating Officer (“COO”) manages the Corporation’s operational framework, including information technology (“IT”), facilities, banking operations, corporate security, and enterprise architecture. The COO oversees the effective and efficient execution of the various technology initiatives to support the Corporation’s growth and improve overall efficiency.

●The Chief Information Officer (“CIO”) is responsible for overseeing technology services provided by IT vendors including the following: (i) the fulfillment of contractual obligations and responsibilities; (ii) the development of policies and standards related to the technology; (iii) services provided; (iv) Service Level Agreement (SLA) metrics and compliance; and v) the Business Continuity Strategy. The Corporate Data Officer works with the CIO in the supervision of the Data Governance practices.

●The Corporate Security Officer (“CISO”) leads the Corporate Security Office (“CSO”), which manages the controls designed to identify, detect, protect against, respond to, and recover from physical and logical events, including cybersecurity threats

and cybersecurity incidents. The CSO is responsible for developing and implementing a CISP that protects the organization's data and systems. The Corporation engages in a continuous risk monitoring process that seeks to identify internal and external threats to our information security systems and data and assesses the sufficiency of the controls in place to mitigate these threats to acceptable levels on a risk-based basis. The CISO reports on a regular basis to the Risk Committee on the CISP.

●The Chief Credit Officer is responsible for the approval of loans and for reporting to the Board regarding Credit Management activities as required by lending authorities. The Chief Credit Officer, Portfolio Risk Manager, Loan Review Manager and other Senior Executives are responsible for managing and executing the Corporation’s credit risk program. The credit risk program aims to i) maintain the quality of the Corporation’s credit portfolio, ii) review the trends affecting the portfolio, and iii) oversee the effectiveness and administration of credit-related policies.

●The Chief Financial Officer (“CFO”), together with the Corporation’s Treasurer and the Asset and Liability Management (“ALM”) Director, manage the Corporation’s interest rate and market and liquidity risk programs, including the liquidity

stress testing and policy limits. The CFO supervises Capital Planning and Capital Stress Testing. The CFO, jointly with the Chief Accounting Officer (“CAO”) and the Corporate Controller, are responsible for the development and implementation of the Corporation’s accounting policies and practices and the review and monitoring of critical accounts and transactions to ensure that they are reported in accordance with GAAP and the applicable regulatory requirements for financial and regulatory reporting purposes.

●The Corporate Strategic and Business Development Director is responsible for the development of the Corporation’s strategic and business plan, by coordinating and collaborating with the executive team and all corporate groups involved with the strategic and business planning process.

●The Corporate Strategy and Investor Relations Officer is responsible for managing communications with the investor community and sell-side research analysts and for coordinating and collaborating with the executive team and all corporate groups involved with the adequate execution of the strategic and business planning process.

●The Chief Risk Officer (“CRO”) is responsible for the oversight of the risk management of the Corporation as well as the risk governance processes. The CRO, together with the ERM and Operational Risk Director, monitor key risks and manage the

operational risk program. The CRO provides the leadership and strategy for the Corporation’s risk management and monitoring activities and is responsible for the oversight of regulatory compliance, loan review, model risk, and operational risk management. The CRO supervises talent management efforts, maintains adequate succession planning practices and promotes employee engagement. The Human Resources Director supports the CRO in the human capital and talent management efforts. The CRO reports regularly to the Risk Committee of the Board on risk management activities including risk assessments, risk tolerances, regulatory matters, and emerging risks. The CRO co-leads with the CFO the CECL/allowance quarterly financial assessment.

●The ERM and Operational Risk Director is responsible for driving the identification, assessment, measurement, mitigation,

and monitoring of key risks throughout the Corporation. The ERM and Operational Risk Director promotes and instills a culture of risk control, identifies and monitors the resolution of major and critical operational risk issues across the Corporation and serves as a key advisor to business executives with regards to risk exposure to the organization, corrective actions and corporate policies and best practices to mitigate risks. ERM and Operational Risk Director also supervises the Corporate Incident Response Program. The Financial and Model Risk Manager, IT Risk Manager, Retail Quality Assurance Manager, Regulatory Affairs Manager and Corporate Risk Managers assist the ERM and Operational Risk Director in the monitoring of key risks and oversight of risk management practices. The ERM and Operational Risk Director assist the CFO in the review and oversight of the Corporation’s internal control over financial reporting and disclosure controls and procedures.

●The Compliance Director is responsible for oversight of regulatory compliance. The Compliance Director implements an enterprise-wide compliance risk assessment, and monitors compliance with significant regulations. The Compliance Director is responsible for building awareness of and educating business units and subsidiaries on, regulatory risks.

●The General Counsel is responsible for the oversight of legal risks, including matters such as contract structuring, litigation risk, and all legal-related aspects of the Corporation’s business. The Corporate Affairs Officer assists the General Counsel with various legal areas, including, but not limited to SEC reporting matters, insurance coverage and liability, and the ESG Program.

On January 31, 2025, the Corporation announced a strategic reorganization in line with its corporate succession plan prompted by the retirement of two key Business Group Executives. This reorganization aims to improve operational efficiency, enhance customer experience, and drive business transformation to better align resources for future growth and success. The strategic reorganization is effective April 1, 2025 and major changes are the following:

●Chief Consumer Officer – This newly created position will oversee the mortgage, unsecured consumer lending, auto, leasing, and insurance lines of business, which were previously managed by the retiring Business Group Executives. In addition, the Chief Consumer Officer has been named Chief of Staff and will be responsible for the oversight of the Corporation’s human capital strategic plan, which was previously under the CRO role.

●General Counsel and Secretary of the Board – This position has been expanded to include managing and overseeing Regulatory Compliance and Bank Secrecy Act (“BSA”) business units, reinforcing the dedication to regulatory adherence.
These responsibilities were previously under the CRO.

●Chief Risk Officer – This position was realigned and now reports to the Chief Financial Officer and to the Board of Director’s Risk Committee.

●Chief Accounting Officer – This position was expanded to include oversight of other areas including the management of the CECL/allowance quarterly financial assessment, which was previously under the supervision of the CRO.

For a full detail of the strategic reorganization, please refer to our Current Report on Form 8-K, which was filed with the SEC on January 31, 2025.

Liquidity Risk and Capital Adequacy, Interest Rate Risk Management, Credit Risk Management, Operational Risk, Legal

and Compliance Risk and Concentration Risk

The following discussion highlights First BanCorp.’s adopted policies and procedures for liquidity risk and capital adequacy, interest rate risk, credit risk, operational risk, legal and compliance risk, and concentration risk.

Liquidity Risk and Capital Adequacy

Liquidity risk involves the ongoing ability to accommodate liability maturities and deposit withdrawals, fund asset growth and business operations, and meet contractual obligations through unconstrained access to funding at reasonable market rates. Liquidity management involves forecasting funding requirements and maintaining sufficient capacity to meet liquidity needs and accommodate fluctuations in asset and liability levels due to changes in the 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 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 Corporate Strategic and Business Development Director, the Business Group Director, the Treasury and

Investments Risk Manager, the Financial Planning and ALM Director, and the Treasurer. The Treasury and Investments Division is responsible for planning and executing the Corporation’s funding activities and strategy, monitoring liquidity availability on a daily basis, and reviewing liquidity measures on a weekly basis. The Treasury and 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 estimating the liquidity gap.

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 $1.2 billion as of December 31, 2024, compared to $663.2 million as of December 31, 2023. When adding $1.2 billion of free high-quality liquid securities that could be liquidated or pledged within one day (which includes assets such as U.S.
government and GSEs obligations), the total core liquidity amounted to $2.4 billion as of December 31, 2024, or 12.54% of total assets, compared to $2.8 billion, or 14.93% of total assets as of December 31, 2023.

In addition to the aforementioned $2.4 billion in cash and free high quality liquid assets, the Corporation had $912.4 million 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 17.27% of total assets as of December 31, 2024, compared to 19.82% of total assets as of December 31, 2023.

Further, the Corporation also maintains borrowing capacity at the FED Discount Window and had approximately $2.6 billion available for funding under the FED’s Borrower-in-Custody (“BIC”) Program as of December 31, 2024, compared to $1.5 billion as of December 31, 2023 as an additional source of liquidity. Total loans pledged to the FED BIC Program amounted to $3.4 billion as of December 31, 2024, compared to $2.5 billion as of December 31, 2023. The Corporation does not rely on uncommitted inter-bank lines of credit (federal funds lines) to fund its operations. In the aggregate, as of December 31, 2024, the Corporation had $5.9 billion available to meet liquidity needs, or 124% of estimated uninsured deposits, excluding fully collateralized government deposits, compared to $5.2 billion or 118%, respectively, as of December 31, 2023.

Liquidity at the Bank level is highly dependent on bank deposits, which fund 87.7% of the Bank’s assets (or 85.2% 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.

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 December 31, 2024, 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:

December 31, 2024December 31, 2023| Commitments to extend credit: | | | | |
| --- | --- | --- | --- | --- |
| Construction undisbursed funds | $ | 283,302 | $ | 234,974 |
| Unused credit card lines | | 787,849 | | 882,486 |
| Unused personal lines of credit | | 37,140 | | 38,956 |
| Commercial lines of credit | | 1,053,938 | | 862,963 |

Letters of credit:
Commercial letters of credit	41,738	69,543
Standby letters of credit	24,635	8,313

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 $4.1 billion as of December 31, 2024. Our material cash requirements comprise primarily of contractual obligations to make future payments related to time deposits, long-term borrowings, and operating lease obligations.Wealso 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.Wecurrently 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.

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.

The Corporation’s principal sources of funding are discussed below:

Deposits

The following table presents the composition of total deposits as of the indicated dates:| (Dollars in thousands) | | | | | |
| --- | --- | --- | --- | --- | --- |
| Interest-bearing checking accounts | | $ | 4,308,116 | $ | 3,937,945 |
| Interest-bearing saving accounts | | | 3,530,382 | | 3,596,855 |
| Time deposits | | | 3,485,262 | | 3,617,064 |
| Interest-bearing deposits | (1) | | 11,323,760 | | 11,151,864 |
| Non-interest-bearing deposits | | | 5,547,538 | | 5,404,121 |
| Total | | $ | 16,871,298 | $ | 16,555,985 |
| Interest-bearing deposits: | | | | | |
| Average balance outstanding | | $ | 11,194,046 | $ | 10,603,935 |
| Weighted average rate during the period on interest-bearing deposits | | | 2.26% | | 1.75% |
| Non-interest-bearing deposits: | | | | | |
| Average balance outstanding | | $ | 5,351,124 | $ | 5,741,345 |

(1)The weighted-average interest rate on total interest-bearing deposits as of December 31, 2024 and 2023 was 2.18% and 2.24%, respectively.

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 December 31, 2024 and 2023, the Corporation’s core deposits, which exclude government deposits and brokered CDs, totaled $12.9 billion and $12.6 billion, respectively. The $267.1 million increase in such deposits consisted of increases of $146.9 million in the Puerto Rico region and $146.1 million in the Florida region, partially offset by a $25.9 million decrease in the Virgin Islands region. This growth includes increases of $196.2 million in non-interest-bearing deposits and $159.8 million in time deposits.

Government deposits (fully collateralized)– As of December 31, 2024, the Corporation had $3.1 billion of Puerto Rico public

sector deposits ($3.0 billion in transactional accounts and $127.8 million in time deposits), compared to $2.7 billion as of December 31, 2023. Government deposits are insured by the FDIC up to the applicable limits and the uninsured portions are fully collateralized.
Approximately 17% of the public sector deposits as of December 31, 2024 were from municipalities and municipal agencies in Puerto Rico and 83% were from public corporations, the central government and its agencies, and U.S. federal government agencies in Puerto Rico.

In addition, as of December 31, 2024, the Corporation had $424.2 million of government deposits in the Virgin Islands region, as compared to $449.4 million as of December 31, 2023, and $21.3 million in the Florida region as compared to $10.2 million as of December 31, 2023.

The uninsured portions of government deposits were collateralized by securities and loans with an amortized cost of $3.7 billion and $3.5 billion as of December 31, 2024 and 2023, respectively, and an estimated market value of $3.3 billion and $3.1 billion as of December 31, 2024 and 2023, respectively. In addition to securities and loans, as of each of December 31, 2024 and 2023, the Corporation used $175.0 million 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 December 31, 2024 and 2023, the estimated amounts of uninsured deposits totaled $8.1 billion and $7.4 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 December 31, 2024 and 2023, the uninsured portion of fully collateralized government deposits amounted to $3.3 billion and $3.0 billion, respectively . Excluding fully collateralized government deposits, the estimated amounts of uninsured deposits amounted to $4.8 billion, which represent 29.36% of total deposits (excluding brokered CDs), as of December 31, 2024, compared to $4.4 billion, or 28.13%, as of December 31, 2023.

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 December 31, 2024:

3 months or3 months to6 months to (In thousands)less6 months1 yearOver 1 yearTotal U.S. time deposits in excess of FDIC insurance limits$506,443$113,938$269,881$147,873$1,038,135 Other uninsured time deposits$13,302$14,512$18,659$2,000$48,473

Brokered CDs– Total brokered CDs decrease d by $305.2 million to $478.1 million as of December 31, 2024, compared to $783.3 million as of December 31, 2023. The decline reflects maturing brokered CDs amounting to $714.5 million with an all-in cost of 5.39% that were paid off during 2024, partially offset by $409.3 million of new issuances with original average maturities of approximately 2 years and an all-in cost of 4.66%.

The average remaining term to maturity of the brokered CDs outstanding as of December 31, 2024 was approximately 1.5 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 December 31, 2024:| | | | Weighted-average | |
| --- | --- | --- | --- | --- |
| | | Total | interest rate % | |
| (In thousands) | | | | |
| Three months or less | $ | 35,716 | | 4.79 |
| Over three months to six months | | 48,161 | | 5.11 |
| Over six months to one year | | 142,269 | | 4.51 |
| Over one year to two years | | 163,543 | | 4.24 |
| Over two years to three years | | 30,095 | | 4.07 |
| Over three years to four years | | 33,049 | | 4.38 |
| Over four years to five years | | 9,834 | | 4.05 |
| Over five years | | 15,451 | | 4.61 |
| Total | $ | 478,118 | | 4.46 |

Refer to “Net Interest Income” above for information about average balances of interest-bearing deposits and the average interest rate paid on such deposits for the years ended December 31, 2024, 2023, and 2022.

Borrowings

As of December 31, 2024, total borrowings amounted to $561.7 million, compared to $661.7 million as of December 31, 2023.

The following table presents the composition of total borrowings as of the indicated dates:| | Weighted Average | | | | |
| --- | --- | --- | --- | --- | --- |
| | Rate as of | | As of December 31, | | |
| | December 31, 2024 | | 2024 | 2023 | |
| (Dollars in thousands) | | | | | |
| Long-term fixed-rate advances from the FHLB | | 4.45% | 500,000 | | 500,000 |
| Long-term variable-rate borrowings | | 7.29% | 61,700 | | 161,700 |
| Total | | 4.76%$ | 561,700 | $ | 661,700 |

Securities sold under agreements to repurchase –From time to time, the Corporation enters into repurchase agreements as an additional source of funding. As of each of December 31, 2024 and 2023, 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 writedowns 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 each of December 31, 2024 and 2023, the outstanding balance of long-term fixed-rate FHLB advances was $500.0 million. Of the $500.0 million in FHLB advances as of December 31, 2024, $400.0 million were pledged with investment securities and $100.0 million were pledged with mortgage loans. As of December 31, 2024, the Corporation had $912.4 million available for additional credit on FHLB lines of credit based on collateral pledged at the FHLB of New York.

The following table presents the remaining contractual maturities and weighted-average interest rates of advances from the FHLB as of December 31, 2024:| | | | Weighted-average | |
| --- | --- | --- | --- | --- |
| | | Total | interest rate % | |
| (In thousands) | | | | |
| Three months or less | $ | 180,000 | | 4.60 |
| Over six months to one year | | 30,000 | | 4.83 |
| Over one year to two years | | 90,000 | | 4.49 |
| Over two years to three years | | 200,000 | | 4.25 |
| Total(1) | $ | 500,000 | | 4.45 |

(1) Average remaining term to maturity of 1.48 years.

Trust-Preferred Securities –In 2004, FBP Statutory Trusts I and II, statutory trusts that are 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. The subordinated debentures are reflected in the Corporation’s consolidated statements of financial condition as “Long-term borrowings.” Under the indentures, the Corporation has the right, from time to time, and without causing an event of default, to defer payments of interest on the Junior Subordinated Deferrable Debentures by extending the interest payment period at any time and from time to time during the term of the subordinated debentures for up to twenty consecutive quarterly periods.

During 2024, the Corporation redeemed $100.0 million, or 84%, of outstanding TruPS issued by FBP Statutory Trust II (or $97.0 million after excluding the Corporation’s interest in the Trust of approximately $3.0 million) at a contractual call price of 100%. As of

December 31, 2024 and 2023, the Corporation had junior subordinated debentures outstanding in the aggregate amount of $61.7 million and $161.7 million, respectively, with maturity dates ranging from June 17, 2034 through September 20, 2034. As previously mentioned, the Corporation expects to execute the redemption of the remaining junior subordinated debentures during 2025. As of December 31, 2024, the Corporation was current on all interest payments due on its subordinated debt. See Note 12 – “Borrowings” and Note 10 – “Non-Consolidated Variable Interest Entities (“VIEs”) and Servicing Assets” for additional information. Also, see Note 15 – “Stockholders’ Equity” for additional details of capital actions that include the approval of a repurchase program of $250 million that could include repurchases of common stock or junior subordinated debentures.

FED Discount Window– The Corporation participates in the BIC Program of the FED. Through the BIC Program, a broad range of loans may be pledged as collateral for borrowings through the FED Discount Window. As previously mentioned, as of December 31, 2024, the Corporation had approximately $2.6 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 BB by 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.

Cash Flows

Cash and cash equivalents were $1.2 billion as of December 31, 2024, an increase of $496.3 million when compared to December 31, 2023. The following discussion highlights the major activities and transactions that affected the Corporation’s cash flows during 2024 and 2023:

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 years ended December 31, 2024 and 2023, net cash provided by operating activities was $404.2 million and $363.0 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 year ended December 31, 2024, net cash provided by

investing activities was $136.2 million, primarily due to repayments of U.S. agencies MBS, U.S. agencies debentures, and Puerto Rico municipal bonds; proceeds from sales of repossessed assets; and proceeds from sales of loans, driven by the bulk sale of fully chargedoff consumer loans during the first quarter of 2024 and the sale of an $8.2 million nonaccrual C&I loan; partially offset by net disbursements on loans held for investment and purchases of available -for-sale debt securities during 2024.

For the year ended December 31, 2023, net cash used in investing activities was $78.5 million, primarily due to net disbursements on loans held for investment, partially offset by repayments of available-for-sale and held-to-maturity debt securities and proceeds from sales of repossessed assets.

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 debt, the issuance of equity instruments, return of capital, and activities related to its short-term funding.
For the year ended December 31, 2024, net cash used in financing activities was $44.1 million, mainly reflecting capital returned to stockholders and the redemption of junior subordinated debentures, as further explained in Note 10 – “Non-Consolidated Variable Interest Entities (“VIEs”) and Servicing Assets” to the audited consolidated financial statements included in Part II, Item 8 of this Form 10-K, partially offset by a net increase in deposits.

For the year ended December 31, 2023, net cash used in financing activities was $101.9 million, mainly reflecting a net decrease in borrowings and capital returned to stockholders, partially offset by a net increase in deposits.

Capital

As of December 31, 2024, the Corporation’s stockholders’ equity was $1.7 billion, an increase of $171.6 million from December 31, 2023. The increase was driven by net income generated in 2024 and a $73.2 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 2024 totaling $106.0 million or $0.64 per common share, and $100.0 million in common stock repurchases under the 2023 stock repurchase program .

On January 21, 2025, the Corporation’s Board declared a quarterly cash dividend of $0.18 per common share, which represents an increase of $0.02 per common share, or a 13% increase, compared to its most recent quarterly dividend paid in December 2024. The dividend is payable on March 7, 2025 to shareholders of record at the close of business on February 21, 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 the consideration and approval by the Corporation’s Board at the relevant times.

On July 24, 2023, the Corporation announced that its Board of Directors approved a stock repurchase program, under which the Corporation may repurchase up to $225 million of its outstanding common stock, which commenced in the fourth quarter of 2023 (the “2023 stock repurchase program”). Furthermore, on July 22, 2024, the Corporation announced that its Board of Directors approved a new repurchase program, under which the Corporation may repurchase up to an additional $250 million that could include repurchases of common stock and/or junior subordinated debentures, which it expects to execute during 2025 (the “2024 repurchase program”).
Under the 2023 stock repurchase program, the Corporation repurchased approximately 5.8 million shares of common stock for a total cost of $100.0 million during 2024 and approximately 5.1 million shares for a total cost of $75.0 million during 2023. In addition, during 2024, the Corporation redeemed $100.0 million of junior subordinated debentures. As of December 31, 2024, the Corporation has remaining authorization of approximately $200.0 million. For more information, see Part II, Item 5, “Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities,” of this Form 10-K.

Repurchases under the programs 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 programs are subject to various factors, including the Corporation’s capital position, liquidity, financial performance and alternative uses of capital, stock trading price, and general market conditions. The Corporation’s repurchase programs do not obligate it to acquire any specific number of shares and do not have an expiration date. The repurchase programs may be modified, suspended, or terminated at any time at the Corporation’s discretion. 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.

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:| | December 31, 2024 | | December 31, 2023 | |
| --- | --- | --- | --- | --- |
| (In thousands, except ratios and per share information) | | | | |
| Total common equity - GAAP | $ | 1,669,236 | $ | 1,497,609 |
| Goodwill | | (38,611) | | (38,611) |
| Other intangible assets | | (6,967) | | (13,383) |
| Tangible common equity - non-GAAP | $ | 1,623,658 | $ | 1,445,615 |
| Total assets - GAAP | $ | 19,292,921 | $ | 18,909,549 |
| Goodwill | | (38,611) | | (38,611) |
| Other intangible assets | | (6,967) | | (13,383) |
| Tangible assets - non -GAAP | $ | 19,247,343 | $ | 18,857,555 |
| Common shares outstanding | | 163,869 | | 169,303 |
| Tangible common equity ratio - non-GAAP | | 8.44% | | 7.67% |
| Tangible book value per common share - non-GAAP | $ | 9.91 | $ | 8.54 |

See Note 27 – “Regulatory Matters, Commitments and Contingencies” to the audited consolidated financial statements included in Part II, Item 8 of this Form 10-K for the regulatory capital positions of the Corporation and FirstBank as of December 31, 2024 and 2023, respectively.

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. During the years ended December 31, 2024, 2023, and 2022, the Corporation transferred $30.6 million, $31.1 million, and $30.9 million, respectively, to the legal surplus reserve.
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 December 31, 2024 and $199.6 million as of December 31, 2023.

Capital risk is the risk that our capital is insufficient to support our business activities under normal and stressed market conditions or we face capital reductions or risk-weighted assets increases, including from new or revised rules or changes in interpretations of

existing rules, and are therefore unable to meet our internal capital targets or external regulatory capital requirements. Capital adequacy is of critical importance to us. Accordingly, we have in place a comprehensive capital management policy that provides a framework, defines objectives and establishes guidelines to maintain an appropriate level and composition of capital in both businessas-usual and stressed conditions. Our capital management framework is designed to provide us with the information needed to comprehensively manage risk and develop and apply projected stress scenarios that capture idiosyncratic vulnerabilities with a goal of holding sufficient capital to remain adequately capitalized even after experiencing a severe stress event. We have established a comprehensive governance structure to manage and oversee our capital management activities and compliance with capital rules and related policies. Capital planning activities are overseen by the Capital Planning Committee which is chaired by the CEO and is comprised of the following members: the CFO, CRO, and the Corporate Strategy and Investor Relations Officer. In addition, committees and members of senior management are responsible for the ongoing monitoring of our capital adequacy and evaluating current and future regulatory capital requirements, reviewing the results of our capital planning and stress tests processes and the results of our capital models, and reviewing our contingency funding and capital plan and key capital adequacy metrics, including regulatory capital ratios.

Interest Rate Risk Management

First BanCorp manages its asset/liability position to limit the effects of changes in interest rates on net interest income and to maintain stability of profitability under varying interest rate scenarios. The MIALCO oversees interest rate risk and monitors, among other things, current and expected conditions in global financial markets, competition and prevailing rates in the local deposit market, liquidity, loan originations pipeline, securities market values, recent or proposed changes to the investment portfolio, alternative funding sources and related costs, hedging and the possible purchase of derivatives such as swaps and caps, and any tax or regulatory issues which may be pertinent to these areas. The MIALCO approves funding decisions in light of the 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 December 31, 2024, the Corporation forecasted the 12-month net interest income assuming December 31, 2024 interest rate curves remain constant. Then, net interest income was estimated under rising and falling rates scenarios. For the rising rate scenario, a

gradual (ramp) and immediate (shock) parallel upward shift of the yield curve is assumed during the first twelve months (the “+300 ramp”, “+200 ramp” and “+200 shock” scenarios). Conversely, for the falling rate scenario, a gradual (ramp) and immediate (shock)
parallel downward shift of the yield curve is assumed during the first twelve months (the “-300 ramp”, “-200 ramp” and “-200 shock” scenarios).

The SOFR curve for December 31, 2024, as compared with December 31, 2023, reflects a decrease of 85 bps on average in the short-term sector of the curve, or between one to twelve months; an increase of 32 bps in the medium-term sector of the curve, or

between 2 to 5 years; and an increase of 59 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 97 bps on average in the short-term sector of the curve, an increase of 27 bps in the medium-term sector of the curve, and an increase of 70 bps in the long-term sector of the curve.

The following table presents the results of the static simulations as of December 31,2024 and December 31, 2023. Consistent with prior years, these exclude non-cash changes in the fair value of derivatives:

Net Interest Income Risk

(% Change Projected for the next 12 months)

December 31, 2024December 31, 2023 Gradual Change in Interest Rates:
+ 300 bps ramp3.05%1.08% + 200 bps ramp2.04%0.73% - 300 bps ramp-4.79%-3.09% - 200 bps ramp-3.15%-2.02% Immediate Change in Interest Rates:

200 bps shock3.51%2.45% - 200 bps shock-7.17%-5.67%

The Corporation continues to manage its balance sheet structure to control and limit the overall interest rate risk by managing its asset composition while maintaining a sound liquidity position. See “Risk Management – Liquidity Risk Management” above for liquidity ratios.

As of December 31, 2024 and 2023, the net interest income simulations show that the Corporation continues to have an asset sensitive position for the next twelve months under a static balance sheet simulation.

Under gradual rising and falling rate scenarios, the net interest income simulation shows an increase in interest rate sensitivity, when compared with December 31, 2023, due to a lower sensitivity in the liabilities side driven by updated assumptions in combination with a higher sensitivity in the assets side driven by a higher interest-bearing cash position. Deposit betas and repricing lags were modified for some deposit categories to reflect current behavior and expectations under current and projected interest rate scenarios. Also, the sensitivity in the liabilities side was impacted by higher cost shorter term brokered CDs that are either being repriced at lower rates or are not being renewed.

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 will be redeployed into higher yielding alternatives.

Derivatives

First BanCorp. uses derivative instruments and other strategies to manage its exposure to interest rate risk caused by changes in interest rates beyond management’s control.

As of December 31, 2024 and 2023, the Corporation considered all of its derivative instruments to be undesignated economic hedges. For detailed information regarding the volume of derivative activities (e.g., notional amounts), location and fair values of derivative instruments in the consolidated statements of financial condition and the amount of gains and losses reported in the consolidated statements of income, see Note 22 – “Derivative Instruments and Hedging Activities” included in Part II, Item 8 of this Form 10-K.

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” and “Risk Management – Capital” 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, particularly in times of severe stress. 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. As of December 31, 2024 and 2023, 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.

As of December 31, 2024, the Corporation’s ACL model considered the following assumptions for key economic variables in the probability-weighted economic scenarios:

●CRE price index at the national level with an average projected contraction of 1.11% for the year 2025 and an average projected appreciation of 4.42% for the year 2026, compared to an average projected appreciation of 2.01% and 8.65% for the years 2025 and 2026, respectively, as of December 31, 2023.

●Regional Home Price Index forecast in Puerto Rico (purchase only prices) shows an improvement of 8.21% and 11.22% for the year 2025 and for the year 2026, respectively, when compared to the same periods as of December 31, 2023. For the Florida region, the Home Price Index forecast shows an improvement of 5.75% and 6.95% for the years 2025 and 2026, respectively, when compared to the same periods as of December 31, 2023.

●Average regional unemployment rate in Puerto Rico is forecasted at 6.26% for the year 2025 and 6.21% for the year 2026, compared to 8.08% for the year 2025 and 8.13% for the year 2026 as of December 31, 2023. For the Florida and the U.S.
mainland, average unemployment rate is forecasted at 4.40% and 4.93%, respectively, for the year 2025, and 4.15% and 4.60%, respectively, for the year 2026, compared to 4.12% and 4.52%, respectively, for the year 2025, and 3.60% and 3.99%, respectively, for the year 2026, as of December 31, 2023.

●Annualized change in GDP in the U.S. mainland of 1.46% for the year 2025 and 1.91% for the year 2026, compared to 1.64% for the year 2025 and 2.50% for the year 2026, as of December 31, 2023.

It is difficult to estimate how potential changes in one factor or input might affect the overall ACL because management considers a wide variety of factors and inputs in estimating the ACL. Changes in the factors and inputs considered may not occur at the same rate

and may not be consistent across all geographies or product types, and changes in factors and inputs may be directionally inconsistent, such that improvement in one factor or input may offset deterioration in others. However, to demonstrate the sensitivity of credit loss estimates to macroeconomic forecasts as of December 31, 2024, management compared the modeled estimates under the probabilityweighted 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 6.69% for the year 2025, compared to 6.26% for the same period on the probability-weighted economic scenario projections.

To demonstrate the sensitivity to key economic parameters used in the calculation of the ACL at December 31, 2024, 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 $40 million at December 31, 2024. This analysis relates only to the modeled credit loss estimates and is not intended to estimate changes in the overall ACL as it does not reflect any potential changes in other adjustments to the qualitative calculation, which would also be influenced by the judgment management applies to the modeled lifetime loss estimates to reflect the uncertainty and imprecision of these estimates based on current circumstances and conditions. Recognizing that forecasts of macroeconomic conditions are inherently uncertain, particularly in light of recent economic conditions and challenges, which continue to evolve, management believes that its process to consider the available information and associated risks and uncertainties is appropriately governed and that its estimates of expected credit losses were reasonable and appropriate for the period ended December 31, 2024.

As of December 31, 2024, the ACL for loans and finance leases was $243.9 million, a decrease of $17.9 million, from $261.8 million as of December 31, 2023. The ACL for residential mortgage loans decreased by $16.7 million, driven by the aforementioned

updated historical loss experience used for determining the ACL estimate resulting in a downward revision of estimated loss severities and improvements in the long-term projections of the unemployment rate in the Puerto Rico region, partially offset by newly originated loans. The ACL for commercial and construction loans decreased by $12.9 million, mainly due to reserve releases associated with the improved financial condition of certain borrowers and an improvement on the economic outlook of certain macroeconomic variables, particularly variables associated with commercial real estate property performance and the forecasted CRE price index, partially offset by loan portfolio growth.

Meanwhile, the ACL for consumer loans increased by $11.7 million driven by higher charge-off and delinquency levels and loan portfolio growth, mainly in auto loans and finance leases.

The ratio of the ACL for loans and finance leases to total loans held for investment decreased to 1.91% as of December 31, 2024, compared to 2.15% as of December 31, 2023. An explanation for the change for each portfolio follows:

●The ACL to total loans ratio for the residential mortgage loan portfolio decreased from 2.03% as of December 31, 2023 to 1.44% as of December 31, 2024, mainly due to the aforementioned updated historical loss experience and improvements in the long-term projections of the unemployment rate, partially offset by the aforementioned newly originated loans.

●The ACL to total loans ratio for the construction loan portfolio decreased from 2.61% as of December 31, 2023 to 1.67% as of December 31, 2024, mainly due to an improvement on the economic outlook of certain macroeconomic variables associated with commercial real estate property performance and the CRE price index.

●The ACL to total loans ratio for the commercial mortgage loan portfolio decreased from 1.41% as of December 31, 2023 to 0.87% as of December 31, 2024, driven by the aforementioned reserve releases associated with the improved financial condition of certain borrowers and an improvement on the economic outlook of macroeconomic variables associated with commercial real estate property performance and the CRE price index.

●The ACL to total loans ratio for the C&I loan portfolio decreased from 1.05% as of December 31, 2023 to 0.96% as of December 31, 2024,driven by the aforementioned reserve releases associated with the improved financial condition of certain borrowers.

●The ACL to total loans ratio for the consumer loan portfolio increased from 3.64% as of December 31, 2023 to 3.85% as of December 31, 2024, driven by increases in charge -off and delinquency levels.

The ratio of the total ACL for loans and finance leases to nonaccrual loans held for investment was 278.90% as of December 31, 2024, compared to 312.81% as of December 31, 2023.

See “Results of Operations - Provision for Credit Losses” above and Note 5 – “Allowance for Credit Losses for Loans and Finance Leases” to the audited consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.| | | | Year Ended December 31, | | | |
| --- | --- | --- | --- | --- | --- | --- |
| | 2024 | | 2023 | | 2022 | |
| (Dollars in thousands) | | | | | | |
| ACL for loans and finance leases, beginning of year | $ | 261,843 | $ | 260,464$ | 269,030 | |
| Impact of adoption of ASU 2022-02 | | - | | 2,116 | | - |
| Provision for credit losses - (benefit) expense: | | | | | | |
| Residential mortgage | | (16,225) | | (6,866) | (8,734) | |
| Construction | | (1,912) | | 1,408 | (2,342) | |
| Commercial mortgage | | (10,717) | | (2,086) | (18,994) | |
| C&I | | (4,886) | | 6,372 | (1,770) | |
| Consumer and finance leases | | 96,601 | | 67,816 | 57,519 | |
| Total provision for credit losses - expense | | 62,861 | | 66,644 | 25,679 | |
| Charge-offs: | | | | | | |
| Residential mortgage | | (1,971) | | (3,245) | (6,890) | |
| Construction | | - | | (62) | (123) | |
| Commercial mortgage | | - | | (1,133) | | (85) |
| C&I | | (2,742) | | (6,936) | (2,067) | |
| Consumer and finance leases | | (109,115) | | (76,726) | (48,165) | |
| Total charge offs | | (113,828) | | (88,102) | (57,330) | |
| Recoveries: | | | | | | |
| Residential mortgage | | 1,453 | | 2,692 | 3,547 | |
| Construction | | 131 | | 1,951 | 725 | |
| Commercial mortgage | | 533 | | 786 | 1,372 | |
| C&I | | 6,704 | | 841 | 2,459 | |
| Consumer and finance leases | | 24,245(1) | | 14,451 | 14,982 | |
| Total recoveries | | 33,066(1) | | 20,721 | 23,085 | |
| Net charge-offs | | (80,762) | | (67,381) | (34,245) | |

ACL for loans and finance leases, end of period	243,942$	261,843$	260,464
ACL for loans and finance leases to period-end total loans held for investment	1.91%	2.15%	2.25%
Net charge-offs to average loans outstanding during the period	0.65%(2)	0.58%	0.31%
Provision for credit losses - expense for loans and finance leases to net charge-offs duringthe period	0.78x	0.99x	0.75x

The following tables set forth information concerning the composition of the Corporation's loan portfolio and related ACL by loan category, and the percentage of loan balances in each category to the total of such loans as of the indicated dates:| As of December 31, 2024 | Residential | | | Commercial | | | Consumer and | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (Dollars in thousands) | MortgageLoans | ConstructionLoans | | MortgageLoans | C&I Loans | | FinanceLeases | | 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 | $ | 32,266 | $144,751 | $ | 243,942 | |
| Allowance for credit losses to amortized cost | 1.44 | % | 1.67% | 0.87 | % | 0.96% | 3.85 | % | 1.91 | % |

As of December 31, 2023	Residential			Commercial
(Dollars in thousands)	MortgageLoans	Construction	Loans	MortgageLoans	C&I Loans		Consumer andFinance Leases		Total
Total loans held for investment:
Amortized cost of loans	$2,821,726	$	214,777	$2,317,083	$	3,174,232	$3,657,665	$	12,185,483
Percent of loans in each category to total loansAllowance for credit losses	$57,397	23%$	5,6052%	$32,631	19%$	33,19026%	$133,020	30%$	261,843100%
Allowance for credit losses to amortized cost	2.03	%	2.61%	1.41	%	1.05%	3.64	%	2.15%

Allowance for Credit Losses for Unfunded Loan Commitments

The Corporation estimates expected credit losses over the contractual period in which the Corporation is exposed to credit risk as a result of a contractual obligation to extend credit, such as pursuant to unfunded loan commitments and standby letters of credit for commercial and construction loans, unless the obligation is unconditionally cancellable by the Corporation. The ACL for off-balance sheet credit exposures is adjusted as a provision for credit loss expense. As of December 31, 2024, the ACL for off-balance sheet credit exposures decreased by $1.5 million to $3.1 million, when compared to December 31, 2023, driven by an improvement on the economic outlook of certain macroeconomic variables, particularly in variables associated with the CRE price index.

Allowance for Credit Losses for Held-to-Maturity Debt Securities

As of December 31, 2024, the ACL for held-to-maturity securities portfolio was entirely related to 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 December 31, 2024, the ACL for held-to-maturity debt securities was $0.8 million, compared to $2.2 million as of December 31, 2023. The decrease was driven by improvements in the underlying updated financial information of a Puerto Rico municipal bond issuer.

Allowance for Credit Losses for Available -for-Sale Debt Securities

The ACL for available-for-sale debt securities, which is associated with private label MBS and a residential pass-through MBS issued by the PRHFA, was $0.5 million as of each of December 31, 2024 and December 31, 2023.

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, and non-performing investment securities, if any. When a loan is placed in nonaccrual status, any interest previously recognized and not collected is reversed and charged against interest income. Cash payments received are recognized when collected in accordance with the contractual terms of the loans. The principal portion of the payment is used to reduce the principal balance of the loan, whereas the interest portion is recognized on a cash basis (when collected). However, when management believes that the ultimate collectability of principal is in doubt, the interest portion is applied to the outstanding principal. The risk exposure of this portfolio is diversified as to individual borrowers and industries, among other factors. In addition, a large portion is secured with real estate collateral. See Note 1 – “Nature of Business and Summary of Significant Accounting Policies” to the audited consolidated financial statements included in Part II, Item 8 of this Form 10-K, for additional information.

Nonaccrual Loans Policy

Residential Real Estate Loans— The Corporation generally classifies real estate loans in nonaccrual status when it has not received interest and principal for a period of 90 days or more.

Commercial and Construction Loans— The Corporation classifies commercial loans (including commercial real estate and construction loans) in nonaccrual status when it has not received interest and principal for a period of 90 days or more or when it does not expect to collect all of the principal or interest due to deterioration in the financial condition of the borrower.

Finance Leases— The Corporation classifies finance leases in nonaccrual status when it has not received interest and principal for a period of 90 days or more.

Consumer Loans— The Corporation classifies consumer loans in nonaccrual status when it has not received interest and principal for a period of 90 days or more. Credit card loans continue to accrue finance charges and fees until charged-off at 180 days delinquent.

Purchased Credit Deteriorated Loans (“PCD”)— For PCD loans, the nonaccrual status is determined in the same manner as for other loans, except for PCD loans that prior to the adoption of CECL were classified as purchased credit impaired (“PCI”) loans and

accounted for under ASC Subtopic 310-30, “Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality” (“ASC Subtopic 310-30”). As allowed by CECL, the Corporation elected to maintain pools of loans accounted for under ASC Subtopic 310-30 as “units of accounts,” conceptually treating each pool as a single asset. Regarding interest income recognition, the prospective transition approach for PCD loans was applied at a pool level, which froze the effective interest rate of the pools as of January 1, 2020. According to regulatory guidance, the determination of nonaccrual or accrual status for PCD loans with respect to which the Corporation has made a policy election to maintain previously existing pools upon adoption of CECL should be made at the pool level, not the individual asset level. In addition, the guidance provides that the Corporation can continue accruing interest and not report the PCD loans as being in nonaccrual status if the following criteria are met: (i) the Corporation can reasonably estimate the timing and amounts of cash flows expected to be collected; and (ii) the Corporation did not acquire the asset primarily for the rewards of ownership of the underlying collateral, such as the use in operations or improving the collateral for resale. Thus, the Corporation continues to exclude these pools of PCD loans from nonaccrual loan statistics.

Loans Past-Due 90 Days and Still Accruing— These are accruing loans that are contractually delinquent 90 days or more. These past-due loans are either current as to interest but delinquent as to the payment of principal (i.e., well secured and in process of collection) or are insured or guaranteed under applicable FHA, VA, or other government-guaranteed programs for residential

mortgage loans. Furthermore, as required by instructions in regulatory reports, loans past due 90 days and still accruing include loans previously pooled into GNMA securities for which the Corporation has the option but not the obligation to repurchase loans that meet GNMA’s specified delinquency criteria (e.g., borrowers fail to make any payment for three consecutive months). For accounting purposes, these GNMA loans subject to the repurchase option are required to be reflected in the financial statements with an offsetting liability. In addition, loans past due 90 days and still accruing include PCD loans, as mentioned above, and credit cards that continue accruing interest until charged-off at 180 days.

Other Real Estate Owned

OREO acquired in settlement of loans is carried at fair value less estimated costs to sell the real estate acquired. Appraisals are obtained periodically, generally on an annual basis.

Other Repossessed Property

The other repossessed property category generally includes repossessed autos acquired in settlement of loans. Repossessed autos are recorded at the lower of cost or estimated fair value.

Other Non-Performing Assets

This category consists of a residential pass-through MBS issued by the PRHFA placed in non-performing status in the second quarter of 2021 based on the delinquency status of the underlying second mortgage loans.

The following table shows non-performing assets by geographic segment as of the indicated dates:| | | | December 31, 2024 | | December 31, 2023 | |
| --- | --- | --- | --- | --- | --- | --- |
| (In thousands) | | | | | | |
| Puerto Rico: | | | | | | |
| Nonaccrual loans held for investment: | | | | | | |
| Residential mortgage | | | $ | 16,854 | $ | 18,324 |
| Construction | | | | 403 | | 595 |
| Commercial mortgage | | | | 2,716 | | 3,106 |
| C&I | | | | 19,595 | | 13,414 |
| Consumer and finance leases | | | | 22,538 | | 21,954 |
| Total nonaccrual loans held for investment | | | | 62,106 | | 57,393 |
| OREO | | | | 13,691 | | 28,382 |
| Other repossessed property | | | | 11,637 | | 7,857 |
| Other assets | | | | 1,620 | | 1,415 |
| Total non-performing assets | | | $ | 89,054 | $ | 95,047 |
| Past due loans 90 days and still accruing | | | $ | 39,307 | $ | 53,308 |
| Virgin Islands:Nonaccrual loans held for investment: | | | | | | |
| Residential mortgage | | | $ | 6,555 | $ | 6,688 |
| Construction | | | | 962 | | 974 |
| Commercial mortgage | | | | 8,135 | | 9,099 |
| C&I | | | | 919 | | 1,169 |
| Consumer | | | | 205 | | 419 |
| Total nonaccrual loans held for investment | | | | 16,776 | | 18,349 |
| OREO | | | | 3,615 | | 4,287 |
| Other repossessed property | | | | 219 | | 252 |
| Total non-performing assets | | | $ | 20,610 | $ | 22,888 |
| Past due loans 90 days and still accruing | | | $ | 3,083 | $ | 6,005 |
| United States:Nonaccrual loans held for investment: | | | | | | |
| Residential mortgage | | | $ | 8,540 | $ | 7,227 |
| C&I | | | | - | | 667 |
| Consumer | | | | 45 | | 71 |
| Total nonaccrual loans held for investment | | | | 8,585 | | 7,965 |
| Other repossessed property | | | | 3 | | 6 |
| Total non-performing assets | | | $ | 8,588 | $ | 7,971 |
| Past due loans 90 days and still accruing | | | $ | - | $ | 139 |
| TotalNonaccrual loans held for investment: | | | | | | |
| Residential mortgage | | | $ | 31,949 | $ | 32,239 |
| Construction | | | | 1,365 | | 1,569 |
| Commercial mortgage | | | | 10,851 | | 12,205 |
| C&I | | | | 20,514 | | 15,250 |
| Consumer and finance leases | | | | 22,788 | | 22,444 |
| Total nonaccrual loans held for investment | | | | 87,467 | | 83,707 |
| OREO | | | | 17,306 | | 32,669 |
| Other repossessed property | | | | 11,859 | | 8,115 |
| Other assets | (1) | | | 1,620 | | 1,415 |
| Total non-performing assets | | | $ | 118,252 | $ | 125,906 |
| Past due loans 90 days and still accruing | | (2) (3) (4) | $ | 42,390 | $ | 59,452 |
| Non-performing assets to total assetsNonaccrual loans held for investment to total loans held for investment | | | | 0.61%0.69% | | 0.67%0.69% |
| ACL for loans and finance leasesACL for loans and finance leases to total nonaccrual loans held for investment | | | | 243,942278.90% | | 261,843312.81% |
| ACL for loans and finance leases to total nonaccrual loans held for investment, excluding residential real estate loans | | | | 439.39% | | 508.75% |

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 $6.2 million and $8.3 million as of December 31, 2024 and 2023, 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 $8.0 million and $15.4 million of FHA government guaranteed residential mortgage loans that were over 15 months delinquent as of December 31, 2024 and 2023, respectively.
(4)These includes rebooked loans, which were previously pooled into GNMA securities, amounting to $5.7 million and $7.9 million as of December 31, 2024 and 2023, 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.

Total non-performing assets decreased by $7.6 million to $118.3 million as of December 31, 2024, compared to $125.9 million as of December 31, 2023. The decrease in non-performing assets was driven by a $15.3 million decrease in the OREO portfolio balance mainly in the Puerto Rico region, driven by the sale of a $5.3 million commercial real estate OREO property and sales of residential OREO properties, partially offset by a $3.7 million increase in total nonaccrual loans held for investment, as explained below, and a $3.7 million increase in other repossessed property.

Total nonaccrual loans were $87.4 million as of December 31, 2024. This represents a net increase of $3.7 million from $83.7 million as of December 31, 2023, mainly in commercial and construction loans, driven by the inflow of a $16.5 million commercial relationship in the Puerto Rico region in the food retail industry, partially offset by the sale of an $8.2 million nonaccrual C&I loan in the Puerto Rico region that resulted in a $1.2 million charge-off that had been previously reserved, loans returned to accrual status, repayments, and a $0.5 million charge-off recorded on a nonaccrual C&I loan in the Puerto Rico region.

The following tables present the activity of commercial and construction nonaccrual loans held for investment for the indicated periods:

Commercial

ConstructionMortgageC&ITotal| Year Ended December 31, 2024 | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Beginning balance | $ | 1,569 | $ | 12,205 | $ | 15,250 | $ | 29,024 |
| Plus: | | | | | | | | |
| Additions to nonaccrual | | 3,300 | | 151 | | 28,064 | | 31,515 |
| Less: | | | | | | | | |
| Loans returned to accrual status | | (35) | | (209) | | (9,495)(1) | | (9,739) |
| Nonaccrual loans transferred to OREO | | (48) | | - | | (1,008) | | (1,056) |
| Nonaccrual loans charge-offs | | - | | - | | (2,742) | | (2,742) |
| Loan collections | | (288) | | (1,296) | | (4,488) | | (6,072) |
| Reclassification | | (3,133) | | - | | 3,133 | | - |
| Nonaccrual loans sold, net of charge-offs | | - | | - | | (8,200) | | (8,200) |
| Ending balance | $ | 1,365 | $ | 10,851 | $ | 20,514 | $ | 32,730 |

(1)Mainly related to the restoration to accrual status of a 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.

Commercial

ConstructionMortgageC&ITotal| Year Ended December 31, 2023 | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Beginning balance | $ | 2,208$ | 22,319 | $ | 7,830 | $ | 32,357 |
| Plus: | | | | | | | |
| Additions to nonaccrual | | 133 | 2,633 | | 21,088 | | 23,854 |
| Less: | | | | | | | |
| Loans returned to accrual status | | - | (3,466) | | (765) | | (4,231) |
| Nonaccrual loans transferred to OREO | | (367) | (5,544) | | (742) | | (6,653) |
| Nonaccrual loans charge-offs | | (14) | (1,120) | | (6,910) | | (8,044) |
| Loan collections | | (391) | (2,097) | | (5,251) | | (7,739) |
| Reclassification | | - | 6 | | - | | 6 |
| Nonaccrual loans sold, net of charge-offs | | - | (526) | | - | | (526) |
| Ending balance | $ | 1,569$ | 12,205 | $ | 15,250 | $ | 29,024 |

The following table presents the activity of residential nonaccrual loans held for investment for the indicated periods:

Year Ended December 31,

20242023 (In thousands)
$32,239$42,772| Plus: | | | |
| --- | --- | --- | --- |
| Additions to nonaccrual | | 16,880 | 14,946 |
| Less: | | | |
| Loans returned to accrual status | | (9,553) | (12,028) |
| Nonaccrual loans transferred to OREO | | (1,935) | (5,523) |
| Nonaccrual loans charge-offs | | (376) | (902) |
| Loan collections | | (5,306) | (7,020) |
| Reclassification | | - | (6) |
| Ending balance | $ | 31,949$ | 32,239 |

The amount of nonaccrual consumer loans, including finance leases, increased by $0.4 million to $22.8 million as of December 31, 2024, compared to $22.4 million as of December 31, 2023. The inflows of nonaccrual consumer loans during year ended December 31, 2024 amounted to $118.2 million, compared to inflows of $91.3 million for the same period in 2023.

As of December 31, 2024, approximately $29.3 million of the loans placed in nonaccrual status, mainly commercial and residential mortgage loans, were current, or had delinquencies of less than 90 days in their interest payments. Collections on nonaccrual loans are being recorded on a cash basis through earnings, or on a cost-recovery basis, as conditions warrant.

During the year ended December 31, 2024, interest income of approximately $0.9 million related to nonaccrual loans with a carrying value of $29.3 million as of December 31, 2024, 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 $153.0 million as of December 31, 2024, an increase of $2.2 million, compared to $150.8 million as of December 31, 2023, mainly due to a $6.0 million increase in consumer loans in early delinquency, mostly reflected in the finance leases portfolio, partially offset by a $3.7 million decrease in residential mortgage loans in early delinquency.

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 year ended December 31, 2024, loans modified to borrowers experiencing financial difficulty had an amortized cost basis of $146.4 million. The modifications for year ended December 31, 2024 include $110.0 million related to a commercial mortgage relationship that had been previously reported as a troubled debt restructuring under ASC 310-40 and was performing according to modified terms, a $12.2 million nonaccrual commercial mortgage loan in the Florida region, and $6.1 million associated with a commercial relationship in the food retail industry in the Puerto Rico region. See Note 4 – “Loans Held for Investment” for additional information and statistics about the Corporation’s modified loans.

The OREO portfolio, which is part of non-performing assets, amounted to $17.3 million as of December 31, 2024 and $32.7 million as of December 31, 2023. The following tables show the composition of the OREO portfolio as of December 31, 2024 and 2023, as well as the activity of the OREO portfolio by geographic area during the year endedDecember 31, 2024:

OREO Composition by Region| | | | 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 |

			As of December 31, 2023
(In thousands)	Puerto Rico		Virgin Islands		Florida	Consolidated
Residential	$	18,809$		1,452$		-$	20,261
Construction		1,576		25		-	1,601
Commercial		7,997		2,810		-	10,807

$28,382$4,287$-$32,669

OREO Activity by Region| | | | Year Ended December 31, 2024 | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| (In thousands) | Puerto Rico | | Virgin Islands | | Florida | Consolidated | |
| Beginning Balance | $ | 28,382 | $ | 4,287$ | | -$ | 32,669 |
| Additions | | 9,211 | | - | | 67 | 9,278 |
| Sales | | (21,748) | | (639) | | (67) | (22,454) |
| Subsequent measurement adjustments | | (424) | | (33) | | - | (457) |
| Other adjustments | | (1,730) | | - | | - | (1,730) |
| Ending Balance | $ | 13,691 | $ | 3,615$ | | -$ | 17,306 |

Net Charge-offs and Total Credit Losses

Net charge-offs totaled $80.8 million, for the year ended December 31, 2024 or 0.65% of average loans, compared to $67.4 million, or 0.58% of average loans, for the same period in 2023.Net charge-offs for the year ended December 31, 2024 include a $10.0 million recovery associated with the bulk sale of fully charged-off consumer loans and finance leases, which reduced by 9 basis points the ratio of total net charge-offs to average loans for such period.

Consumer loans and finance leases net charge -offs for the year ended December 31, 2024 were $84.9 million, or 2.29% of related average loans, compared to net charge-offs of $62.3 million, or 1.78% of related average loans, for the same period in 2023. The increase in charge-offs was reflected across all major portfolio classes, which have been trending higher towards historical loss experience, partially offset by the aforementioned recovery associated with the aforementioned bulk sale, which reduced by 27 basis points the ratio of consumer loans and finance leases net charge -offs to related average loans during 2024.

Construction loans net recoveries for the year ended December 31, 2024 were $0.1 million, or 0.06% of related average loans, compared to net recoveries of $1.9 million, or 1.09% of related average loans, for the same period in 2023. For the year ended December 31, 2023, a recovery of $1.4 million was recorded on a construction loan in the Puerto Rico region.

C&I loans net recoveries for the year ended December 31, 2024 were $4.0 million, or 0.12% of related average loans, compared to net charge-offs of $6.1 million, or 0.21% of related average loans, for the same period in 2023. The results for the year ended December 31, 2024 include a $5.0 million recovery associated with a C&I loan in the Puerto Rico region and a $0.8 million recovery associated with a C&I loan in the Florida region,partially offset by the aforementioned $1.2 million charge-off recorded on the sale of a nonaccrual C&I loan in the Puerto Rico region and a $0.5 million charge-off recorded on a nonaccrual C&I loan in the Puerto Rico region. Meanwhile, the net charge-offs for the year ended December 31,2023 included a $6.0 million net charge-off recorded on a C&I participated loan in the Florida region in the power generation industry.

Commercial mortgage loans net recoveries for the year ended December 31, 2024 were $0.5 million, or 0.02% of related average loans, compared to net charge-offs of $0.3 million, or 0.01% of related average loans, for the same period in 2023. The net recoveries

for the year ended December 31, 2024 include a $0.4 million recovery recorded on a commercial real estate loan in the Florida region.
The net charge-offs recorded during 2023 include a $1.0 million charge-off recorded on a nonaccrual commercial mortgage loan transferred to OREO, partially offset by $0.8 million in recoveries recorded during 2023, which include a $0.3 million recovery associated with the sale of a commercial mortgage loan in the Puerto Rico region.

The following table presents net charge-offs (recoveries) to average loans held-in-portfolio for the indicated periods:| | | | Year Ended December 31, | | | |
| --- | --- | --- | --- | --- | --- | --- |
| | 2024 | | 2023 | | 2022 | |
| Residential mortgage | 0.02 | % | | 0.02% | 0.12 | % |

Construction(0.06)%(1.09)%(0.49)%

Commercial mortgage(0.02)%0.01%(0.06)%

C&I(0.12)%0.21%(0.01)%| Consumer and finance leases | 2.29%(1) | 1.78% | 1.07% |
| --- | --- | --- | --- |
| Total loans | 0.65%(1) | 0.58% | 0.31% |

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The following table presents net charge-offs (recoveries) to average loans held in various portfolios by geographic segment for the indicated periods:| | | | Year Ended December 31, | | | |
| --- | --- | --- | --- | --- | --- | --- |
| | 2024 | | 2023 | | 2022 | |
| PUERTO RICO: | | | | | | |
| Residential mortgage | 0.03 | % | | 0.03% | 0.14 | % |
| Construction | | -% | | (2.66)% | (1.68) | % |
| Commercial mortgage | | -% | | 0.03% | (0.04) | % |
| C&I | (0.14) | % | | (0.01)% | (0.11) | % |
| Consumer and finance leases | 2.27 | %(1) | | 1.78% | 1.07 | % |
| Total loans | 0.82 | %(1) | | 0.65% | 0.37 | % |

VIRGIN ISLANDS: Residential mortgage-%-%0.18% Construction-%0.03%-% Commercial mortgage(0.25)%(0.02)%(0.22)% Consumer and finance leases3.37%0.26%1.23% Total loans0.53%0.04%0.23%

FLORIDA: Residential mortgage(0.01)%(0.01)%(0.03)% Construction(0.22)%(0.05)%(0.06)% Commercial mortgage(0.06)%(0.02)%(0.10)% C&I(0.09)%0.67%0.17% Consumer and finance leases(1.40)%(0.50)%0.30% Total loans(0.07)%0.30%0.05% (1)The recovery associated with the aforementioned bulk sale reduced the ratios of consumer loans and finance leases and total net charge-offs to related average loans for the year ended December 31, 2024 by 28 basis points and 10 basis points, respectively.

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The following table presents information about the OREO inventory and related gains and losses for the indicated periods:

Year Ended December 31,

202420232022| OREO balances, carrying value: | | | | |
| --- | --- | --- | --- | --- |
| Residential | $ | 12,897$ | 20,261$ | 24,025 |
| Construction | | 522 | 1,601 | 1,764 |
| Commercial | | 3,887 | 10,807 | 5,852 |
| Total | $ | 17,306$ | 32,669$ | 31,641 |

OREO activity (number of properties):
Beginning property inventory	277	344	418
Properties acquired	93	171	156
Properties disposed	(189)	(238)	(230)
Ending property inventory	181	277	344

Average holding period (in days)
Residential	517	483	606
Construction	1,560	2,412	2,185
Commercial	3,752	1,491	2,570
Total average holding period (in days)	1,275	911	1,057

Market adjustments and (gains) losses on sale:
Residential	$	(6,648)$	(8,962)$	(7,742)
Construction		(602)	(61)	418
Commercial		(2,272)	(305)	(420)
Total net gain		(9,522)	(9,328)	(7,744)
Other OREO operations expenses		2,048	2,190	1,918
Net Gain on OREO operations	$	(7,474)$	(7,138)$	(5,826)

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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 $12.7 billion as of December 31, 2024, the Corporation had credit risk of approximately 79% in the Puerto Rico region, 18% in the United States region, and 3% 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

On March 18, 2024, the Puerto Rico Planning Board (“PRPB”) published an analysis of the Puerto Rico’s economy during fiscal year 2023, as well as a short-term forecast for fiscal years 2024 and 2025. According to the preliminary estimates issued by the PRPB, Puerto Rico’s real gross national product (“GNP”) grew by 0.7% in fiscal year 2023, the third consecutive year with a positive yearover-year variance. The main drivers behind growth in fiscal year 2023 were personal consumption expenditures and fixed investments in both construction, and machinery and equipment. The PRPB also revised previously published real GNP growth estimates for fiscal years 2022 and 2021 from 3.7% to 3.8% and from 0.9% to 1.4%, 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. For November 2024, estimates showed that the EDB-EAI stood at 126.4, down 1.1% on a year-over-year basis. Over the 12-month period ended November 30, 2024, the EDB-EAI averaged 126.1, 0.4% below the comparable figure a year earlier.

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Labor market trends remain positive. Data published by the Bureau of Labor Statistics showed that non-farm payrolls in December 2024 in Puerto Rico increased by 1.6% when compared to December 2023, primarily driven by payrolls in the private sector as these increased by 2.4% from the comparable figure a year earlier. Key industries driving private-sector payroll growth include Leisure & Hospitality with a year-over-year increase of 5.1% and Construction with a positive variance of 6.4%. The unemployment rate continued to trend lower to a record-low level of 5.4% in December 2024.

Fiscal Plan

On June 5, 2024, the PROMESA oversight board certified the 2024 Fiscal Plan for Puerto Rico (the “2024 Fiscal Plan”), updated with the most recent data and projections for revenues and expenses, and renewed roadmap for Puerto Rico to achieve fiscal responsibility. The 2024 Fiscal Plan is made up of four parts: (i) progress made in stabilizing government finances, (ii) Puerto Rico’s current financial conditions and risks, (iii) details of the actions required to achieve fiscal responsibility and adequate access to credit markets, and (iv) description of the actions the PROMESA oversight board and the Government must take to complete PROMESA’s mandate.

The 2024 Fiscal Plan outlines eight areas of focus to achieve long-term fiscal responsibility: (i) improved economic and revenue forecasting, (ii) adoption of budget best practices, (iii) comprehensive capital delivery program, (iv) improved management of

education resources, (v) improved government service delivery and labor relations, (vi) outcome-based, data-driven, and controlled healthcare spending, (vii) improved, transparent financial reporting, and (viii) optimized municipal fiscal management. Success in these areas, which aim to address the most crucial financial management challenges that Puerto Rico faces, is critical for Puerto Rico to fully recover from bankruptcy and to fulfill the mandate of PROMESA to achieve fiscal responsibility.

As the debt restructurings come to an end, a significant portion of the uncertainty that has plagued the economy over the past ten years has faded away. To generate revenues that are resilient even when the unprecedented influx of federal funding subsides, fiscal

stability alone will not suffice. The 2024 Fiscal Plan describes an effort to develop an integrated plan that will serve as a roadmap to unlock future growth. While that plan is developed, the PROMESA oversight board and the Government will continue to support specific priorities through a first wave of economic growth initiatives that aim to address the most crucial challenges that Puerto Rico faces. The list of focus areas outlined in the 2024 Fiscal Plan to promote economic growth include: (i) integrated framework for economic growth, (ii) human capital, focused on robust, highly-skilled, and health workforce, (iii) economic strategies, focused on improved ease of doing business, (iv) economic policies, focused on reforms of Puerto Rico’s tax system, and (v) infrastructure, focused on reduced cost and increased reliability of energy, transportation, and internet connectivity.

Similar to previous fiscal plans, the 2024 Fiscal Plan includes an updated macroeconomic forecast reflecting the impact of fiscal and structural measures, natural disasters, COVID-19, and federal funding in response to natural disasters and the pandemic on the baseline economic trajectory. The 2024 Fiscal Plan projects Puerto Rico GNP growth in fiscal year 2024 to be 1.0%, followed by declines of 0.8% and 0.1% in fiscal year 2025 and fiscal year 2026, respectively. On average, Puerto Rico’s GNP is projected to grow approximately 0.4% between fiscal year 2023 and fiscal year 2026. Contrary to previous fiscal plans where Puerto Rico’s population was projected to decline, the 2024 Fiscal Plan includes a stable population projection through 2029 mainly due to the offset between a negative natural population decline and positive net migration. Specifically, the revised fiscal plan projections contemplate a net inflow of over 20,000 people annually through 2029, compared to an average of less than 5,000 people in the 2023 fiscal plan.

The 2024 Fiscal Plan projects that approximately $54.5 billion in total disaster relief funding, from federal and private sources, will be disbursed as part of the reconstruction efforts over a span of 9 years (fiscal years 2024 through 2035). These funds will benefit individuals, the public (e.g., reconstruction of major infrastructure, roads, and schools), and will cover part of Puerto Rico’s share of the cost of disaster relief funding. Also, the 2024 Fiscal Plan projects the $5.9 billion in remaining COVID-19 relief funds to be deployed in fiscal years 2024 and 2025. Additionally, the 2024 Fiscal Plan continues to account for $2.1 billion in federal funds to Puerto Rico from the Bipartisan Infrastructure Law directed towards improving Puerto Rico’s infrastructure over fiscal years 2024 through 2026. Overall, Puerto Rico’s economic growth is highly dependent on the Government’s ability to efficiently deploy these federal funds.

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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 until March 24, 2025, pursuant to a Court order dated January 29, 2025, as the mediation team continues to participate in multiple discussions with the PROMESA oversight board, certain mediation parties and additional parties who filed objections to conformation of the PREPA plan of adjustment.

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 November 30, 2024, over $3.7 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 16% increase when compared to the same period in 2023. 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 January 25, 2025, over 3,700 projects had already been completed under FEMA’s Public Assistance Permanent Work programs while over 20,300 projects were active across different stages of execution for a total cost of $12.1 billion, equivalent to approximately 33% of the agency’s $36.0 billion obligation, according to the Central Office for Recovery, Reconstruction and Resiliency (“COR3”).

After more than five years since the confirmation of the COFINA plan of adjustment, on October 30, 2024, the Court granted the PROMESA oversight board’s request for entry of an order closing the COFINA Title III case, making it the first closed bankruptcy case since the enactment of PROMESA.

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Exposure to Puerto Rico Government

As of December 31, 2024, the Corporation had $288.6 million of direct exposure to the Puerto Rico government, its municipalities and public corporations, compared to $285.1 million as of December 31, 2023. As of December 31, 2024, approximately $195.8

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 $51.1 million consisted of loans and obligations which are supported by one or more specific sources of municipal revenues. Approximately 72% of the Corporation’s exposure to Puerto Rico municipalities consisted primarily of senior priority loans and obligations concentrated in four 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 $8.8 million in a loan extended to an affiliate of PREPA, $30.0 million in loans to public corporations of the Puerto Rico government, and obligations of the Puerto Rico government, specifically a residential pass-through MBS issued by the PRHFA, at an amortized cost of $2.9 million as part of its available-for -sale debt securities portfolio (fair value of $1.6 million as of December 31, 2024).

The following table details the Corporation’s total direct exposure to Puerto Rico government obligations according to their maturities:| | | As of December 31, 2024 | | | |
| --- | --- | --- | --- | --- | --- |
| | Investment | | | | |
| | Portfolio | | | | Total |
| | (Amortized cost) | | Loans | | Exposure |
| (In thousands) | | | | | |
| Puerto Rico Housing Finance Authority: | | | | | |
| After 10 years | $ | 2,951$ | | -$ | 2,951 |
| Total Puerto Rico Housing Finance Authority | | 2,951 | | - | 2,951 |
| Public corporation of the Puerto Rico government: | | | | | |
| After 1 to 5 years | | - | 8,458 | | 8,458 |
| After 5 to 10 years | | - | 21,607 | | 21,607 |
| Total public corporation of the Puerto Rico government | | - | 30,065 | | 30,065 |
| Affiliate of the Puerto Rico Electric Power Authority: | | | | | |
| After 1 to 5 years | | - | 8,787 | | 8,787 |
| Total Puerto Rico government affiliate | | - | 8,787 | | 8,787 |
| Total Puerto Rico public corporations and government affiliate | | - | 38,852 | | 38,852 |
| Municipalities: | | | | | |
| Due within one year | | 2,214 | 26,343 | | 28,557 |
| After 1 to 5 years | | 61,289 | 39,220 | | 100,509 |
| After 5 to 10 years | | 13,184 | 88,821 | | 102,005 |
| After 10 years | | 15,755 | | - | 15,755 |
| Total Municipalities | | 92,442 | 154,384 | | 246,826 |
| Total Direct Government Exposure | $ | 95,393$ | 193,236 | $ | 288,629 |

Also, as of December 31, 2024, the outstanding balance of construction loans funded through conduit financing structures to support the federal programs of LIHTC combined with CDBG-DR funding amounted to $59.2 million, compared to $12.8 million as of December 31, 2023. The main objective of these programs is to spur development in new or rehabilitated and affordable rental housing. PRHFA, as program subrecipient and conduct issuer, issues tax-exempt obligations which are acquired by private financial institutions and are required to co-underwrite with PRHFA a mirror construction loan agreement for the specific project loan to which the Corporation will serve as ultimate lender but where the PRHFA will be the lender of record.

In addition, as of December 31, 2024, the Corporation had $72.5 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, 2023 – $77.7 million). Residential mortgage loans guaranteed by the PRHFA are secured by the underlying properties and the guarantees serve to cover shortfalls in collateral in the event of a borrower default. The Puerto Rico government guarantees up to $75 million of the principal for all loans under the mortgage loan insurance program. According to the most recently released audited financial statements of the PRHFA, as of June 30, 2023, the PRHFA’s mortgage loans insurance program covered loans in an aggregate amount of approximately $388 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, 2023, the most recent date as of which information is available, the PRHFA had a liability of approximately $1.3 million as an estimate of the losses inherent in the portfolio.

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As of December 31, 2024 and 2023, the Corporation had $3.1 billion and $2.7 billion, respectively, of public sector deposits in Puerto Rico. Approximately 17% of the public sector deposits as of December 31, 2024 were from municipalities and municipal agencies in Puerto Rico and 83% 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.

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, over $5.7 billion in disaster recovery funds had been disbursed through November 2024 and nearly $14 billion were remaining obligated funds pending to be disbursed. Disaster recovery disbursements totaled $685.6 million during the 12-month period ended November 30, 2024, 60% above the comparable figure a year earlier. Moreover, labor market trends remain stable with average non-farm payrolls during 2024 down by 0.7% on a year-over-year basis.

Finally, PROMESA does not apply to the USVI and, as such, there is currently no federal legislation permitting the restructuring of the debts of the USVI and its public corporations and instrumentalities. To the extent that the fiscal condition of the USVI government deteriorates again, the U.S. Congress or the government of the USVI may enact legislation allowing for the restructuring of the financial obligations of the USVI government entities or imposing a stay on creditor remedies, including by making PROMESA applicable to the USVI.

As of December 31, 2024 and 2023, the Corporation had $100.4 million and $90.5 million, respectively, in loans to USVI public corporations, of which $68.2 million and $57.2 million, respectively, were fully collateralized by cash balances held at the Bank. As of December 31, 2024, all loans were currently performing and up to date on principal and interest payments.

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CEO and CFO Certifications

First BanCorp.’s Chief Executive Officer and Chief Financial Officer have filed with the SEC certifications required by Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002 as Exhibits 31.1, 31.2, 32.1 and 32.2 to this Form 10-K.

In addition, in 2024, First BanCorp’s Chief Executive Officer provided to the NYSE his annual certification, as required for all NYSE listed companies, that he was not aware of any violation by the Corporation of the NYSE corporate governance listing standards.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

The information required herein is incorporated by reference to the information included under the sub-caption “Interest Rate Risk Management” in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of this Form 10-K.

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Item 8. Financial Statements and Supplementary Data

FIRST BANCORP.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS| Report of Independent Registered Public Accounting Firm | | | (PCAOB No. | 173)….………………………….. | 110 |
| --- | --- | --- | --- | --- | --- |
| Management’s Report on Internal Control over Financial Reporting | | | ………………………………………… | | 112 |
| Consolidated Statements of Financial Condition | | ……………………………………………………………... | | | 113 |
| Consolidated Statements of Income | ……...…………………………………………………………………... | | | | 114 |
| Consolidated Statements of Comprehensive Income (Loss) | | | ……...………………………………………..… | | 115 |
| Consolidated Statements of Cash Flows | ……………………………………………………………………… | | | | 116 |
| Consolidated Statements of Changes in Stockholders’ Equity | | | ……………………………………………….. | | 117 |
| Notes to Consolidated Financial Statements | ………………………………………………………………….. | | | | 118 |

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Shareholders and the Board of Directors of First BanCorp.
San Juan, Puerto Rico

Opinions on the Financial Statements and Internal Control over Financial Reporting

Wehave audited the accompanying consolidated statements of financial condition of First BanCorp. (the "Company") as of December

31, 2024 and 2023, the related consolidated statements of income, comprehensive income (loss), cash flows, and changes in stockholders’ equity, for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).Wealso have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework: (2013) issued by COSO.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.Weare a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Weconducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances.Webelieve that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

110

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Credit Losses – Economic Forecasts and Macroeconomic Variables

As described in Notes 1 and 5 to the financial statements, the allowance for credit losses (“ACL”) for loans and finance leases is an accounting estimate of expected credit losses over the contractual life of financial assets carried at amortized cost and off-balancesheet credit exposures.

The calculation of the ACL for loans and finance leases, is primarily measured based on a probability of default / loss given default modeled approach. The estimate of the probability of default and loss given default assumptions uses one or more economic forecasts of relevant current and forward-looking macroeconomic variables determined by portfolio segment, such as: unemployment rate;
housing and real estate price indices; interest rates; market risk factors; and gross domestic product, and considers conditions throughout Puerto Rico, the Virgin Islands, and the State of Florida. A significant amount of judgment is required to assess the reasonableness of the selection of economic forecasts and macroeconomic variables. Changes to these assumptions could have a material effect on the Company’s financial results.

The economic forecasts and current and forward-looking macroeconomic variables used contribute significantly to the determination of the ACL for loans and finance leases.Weidentified the assessment of economic forecasts and relevant macroeconomic variables as a critical audit matter as the impact of these judgments represents a significant portion of the ACL for loans and finance leases and because management’s estimate required especially subjective auditor judgment and significant audit effort, including the need for specialized skill.

The primary procedures we performed to address these critical audit matters included:

●Testing the effectiveness of controls over the evaluation of the selection of economic forecasts and the current and forwardlooking macroeconomic variables, including controls addressing:

oManagement’s review and approval of the economic forecasts and macroeconomic variables.
oManagement’s review of the reasonableness of the results of the selection of economic forecasts and macroeconomic variables used in the calculation.

●Substantively testing management’s process, including evaluating their judgments and assumptions for economic forecast selection and macroeconomic variables, which included:

oEvaluation of reasonableness of economic forecasts selection.
oEvaluation of the completeness and accuracy of data inputs used as a basis for the adjustments relating to macroeconomic variables.
oEvaluation, with the assistance of professionals with specialized skill and knowledge, of the reasonableness of

management’s judgments related to the economic forecast and macroeconomic variables used in the determination of the ACL for loans. Among other procedures, our evaluation considered evidence from internal and external sources, loan portfolio performance trends and whether such assumptions were applied consistently period to period.
oAnalytical evaluation of the variables period to period for directional consistency and testing for reasonableness.

Wehave served as the Company’s auditor since 2018.

/s/Crowe LLP Fort Lauderdale, Florida February 28, 2025

Stamp No. E566476 of the Puerto Rico Society of Certified Public Accountants was affixed to the record copy this report.

111

Management’s Report on Internal Control over Financial Reporting

To the Stockholders and Board of Directors of First BanCorp.:

First BanCorp.’s (the “Corporation”) internal control over financial reporting is a process designed and effected by those charged with governance, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of reliable financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Corporation’s internal control over financial reporting includes those policies and procedures that:
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Corporation; (2) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Corporation are being made only in accordance with authorizations of management and directors of the Corporation; and (3) provide reasonable assurance regarding prevention, or timely detection and correction of unauthorized acquisition, use, or disposition of the Corporation’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent, or detect and correct misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Management is responsible for establishing and maintaining effective internal control over financial reporting. Management assessed the effectiveness of the Corporation’s internal control over financial reporting as of December 31, 2024, based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control- Integrated Framework (2013). Based on that assessment, management concluded that, as of December 31, 2024, the Corporation’s internal control over financial reporting is effective based on the criteria established in Internal Control-Integrated Framework (2013).

The Corporation’s independent registered public accounting firm, Crowe LLP, has audited the effectiveness of the Corporation’s internal control over financial reporting as of December 31, 2024, as stated in their report dated February 28, 2025.

First BanCorp.

/s/ Aurelio Alemán Aurelio Alemán President and Chief Executive Officer Date: February 28, 2025

/s/ Orlando Berges Orlando Berges Executive Vice President and Chief Financial Officer Date: February 28, 2025

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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION| | | | | | | | | December 31, 2024 | | December 31, 2023 | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (In thousands, except for share information) | | | | | | | | | | | |
| ASSETS | | | | | | | | | | | |
| Cash and due from banks | | | | | | | | $ | 1,158,215 | $ | 661,925 |
| Money market investments: | | | | | | | | | | | |
| Time deposits with other financial institutions | | | | | | | | | 500 | | 300 |
| Other short-term investments | | | | | | | | | 700 | | 939 |
| Total money market investments | | | | | | | | | 1,200 | | 1,239 |
| Available-for-sale debt securities, at fair value (amortized cost of $ | | | | 5,125,408 | as of December 31, 2024 and | | | | | | |
| $5,863,294 | as of December 31, 2023; ACL of $ | | 521as of December 31, 2024 and $ | | | 511as of December 31, 2023) | | | 4,565,302 | | 5,229,984 |
| Held-to-maturity debt securities, at amortized cost, net of ACL of $ | | | | 802as of December 31, 2024 and $ | | | 2,197 | | | | |
| as of December 31, 2023 (fair value of $ | | 308,040 | as of December 31, 2024 and $ | | 346,132 | as of December 31, 2023) | | | 316,984 | | 351,981 |
| Equity securities | | | | | | | | | 52,018 | | 49,675 |
| Total investment securities | | | | | | | | | 4,934,304 | | 5,631,640 |
| Loans, net of ACL of $ | 243,942 | as of December 31, 2024 and $ | | 261,843as of December 31, 2023 | | | | | 12,502,614 | | 11,923,640 |
| Mortgage loans held for sale, at lower of cost or market | | | | | | | | | 15,276 | | 7,368 |
| Total loans, net | | | | | | | | | 12,517,890 | | 11,931,008 |
| Accrued interest receivable on loans and investments | | | | | | | | | 71,881 | | 77,716 |
| Premises and equipment, net | | | | | | | | | 133,437 | | 142,016 |
| Other real estate owned (“OREO”) | | | | | | | | | 17,306 | | 32,669 |
| Deferred tax asset, net | | | | | | | | | 136,356 | | 150,127 |
| Goodwill | | | | | | | | | 38,611 | | 38,611 |
| Other intangible assets | | | | | | | | | 6,967 | | 13,383 |
| Other assets | | | | | | | | | 276,754 | | 229,215 |
| Total assets | | | | | | | | $ | 19,292,921 | $ | 18,909,549 |
| LIABILITIES | | | | | | | | | | | |
| Non-interest-bearing deposits | | | | | | | | $ | 5,547,538 | $ | 5,404,121 |
| Interest-bearing deposits | | | | | | | | | 11,323,760 | | 11,151,864 |
| Total deposits | | | | | | | | | 16,871,298 | | 16,555,985 |
| Long-term borrowings | | | | | | | | | 561,700 | | 661,700 |
| Accounts payable and other liabilities | | | | | | | | | 190,687 | | 194,255 |
| Total liabilities | | | | | | | | | 17,623,685 | | 17,411,940 |
| Commitments and contingencies (See Note 27) | | | | | | | | | (nil) | | (nil) |
| STOCKHOLDERS’ EQUITY | | | | | | | | | | | |
| Common stock, $ | 0.10par value, | 2,000,000,000 | shares authorized; | 223,663,116 | shares issued; | 163,868,877 | | | | | |
| shares outstanding as of December 31, 2024 and | | | 169,302,812 | as of December 31, 2023 | | | | | 22,366 | | 22,366 |
| Additional paid-in capital | | | | | | | | | 964,964 | | 965,707 |
| Retained earnings, includes legal surplus reserve of $ | | | 230,178 | as of December 31, 2024 and $ | | 199,576 | as of December 31, 2023 | | 2,038,812 | | 1,846,112 |
| Treasury stock (at cost), | 59,794,239 | shares as of December 31, 2024 and | | | 54,360,304shares as of December 31, 2023 | | | | ( 790,350 ) | | ( 697,406 ) |
| Accumulated other comprehensive loss, net of tax of $ | | | 8,221 | as of December 31, 2024 and $ | | 8,581as of December 31, 2023 | | | ( 566,556 ) | | ( 639,170 ) |
| Total stockholders’ equity | | | | | | | | | 1,669,236 | | 1,497,609 |
| Total liabilities and stockholders’ equity | | | | | | | | $ | 19,292,921 | $ | 18,909,549 |

The accompanying notes are an integral part of these statements.

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CONSOLIDATED STATEMENTS OF INCOME| | | Year Ended December 31, | | | | |
| --- | --- | --- | --- | --- | --- | --- |
| | 2024 | | 2023 | | 2022 | |
| (In thousands, except per share information) | | | | | | |
| Interest and dividend income: | | | | | | |
| Loans | $ | 965,472 | $ | 890,562 | $ | 747,901 |
| Investment securities | | 92,599 | | 102,505 | | 102,922 |
| Money market investments and interest-bearing cash accounts | | 37,082 | | 30,419 | | 11,791 |
| Total interest and dividend income | | 1,095,153 | | 1,023,486 | | 862,614 |
| Interest expense: | | | | | | |
| Deposits | | 253,107 | | 185,461 | | 46,361 |
| Short-term borrowings | | 18 | | 7,583 | | 2,508 |
| Long-term borrowings | | 34,549 | | 33,332 | | 18,452 |
| Total interest expense | | 287,674 | | 226,376 | | 67,321 |
| Net interest income | | 807,479 | | 797,110 | | 795,293 |
| Provision for credit losses - expense (benefit): | | | | | | |
| Loans and finance leases | | 62,861 | | 66,644 | | 25,679 |
| Unfunded loan commitments | | ( 1,495 ) | | 365 | | 2,736 |
| Debt securities | | ( 1,445 ) | | ( 6,069 ) | | ( 719 ) |
| Provision for credit losses - expense | | 59,921 | | 60,940 | | 27,696 |
| Net interest income after provision for credit losses | | 747,558 | | 736,170 | | 767,597 |
| Non-interest income: | | | | | | |
| Service charges and fees on deposit accounts | | 38,819 | | 38,042 | | 37,823 |
| Mortgage banking activities | | 12,683 | | 10,587 | | 15,260 |
| Gain on early extinguishment of debt | | - | | 1,605 | | - |
| Insurance commission income | | 13,570 | | 12,763 | | 13,743 |
| Card and processing income | | 46,758 | | 43,909 | | 40,416 |
| Other non-interest income | | 18,892 | | 25,788 | | 15,850 |
| Total non-interest income | | 130,722 | | 132,694 | | 123,092 |
| Non-interest expenses: | | | | | | |
| Employees' compensation and benefits | | 235,695 | | 222,855 | | 206,038 |
| Occupancy and equipment | | 88,427 | | 85,911 | | 88,277 |
| Business promotion | | 17,645 | | 19,626 | | 18,231 |
| Professional service fees | | 49,455 | | 45,841 | | 47,848 |
| Taxes, other than income taxes | | 22,196 | | 21,236 | | 20,267 |
| Federal Deposit Insurance Corporation ("FDIC") deposit insurance | | 9,818 | | 14,873 | | 6,149 |
| Net gain on OREO operations | | ( 7,474 ) | | ( 7,138 ) | | ( 5,826 ) |
| Credit and debit card processing expenses | | 27,600 | | 25,997 | | 22,736 |
| Communications | | 8,779 | | 8,561 | | 8,723 |
| Other non-interest expenses | | 34,932 | | 33,666 | | 30,662 |
| Total non-interest expenses | | 487,073 | | 471,428 | | 443,105 |
| Income before income taxes | | 391,207 | | 397,436 | | 447,584 |
| Income tax expense | | 92,483 | | 94,572 | | 142,512 |
| Net income | $ | 298,724 | $ | 302,864 | $ | 305,072 |
| Net income attributable to common stockholders | $ | 298,724 | $ | 302,864 | $ | 305,072 |
| Net income per common share: | | | | | | |
| Basic | $ | 1.82 | $ | 1.72 | $ | 1.60 |
| Diluted | $ | 1.81 | $ | 1.71 | $ | 1.59 |

The accompanying notes are an integral part of these statements.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)| | | | Year Ended December 31, | | |
| --- | --- | --- | --- | --- | --- |
| | | 2024 | | 2023 | 2022 |
| (In thousands) | | | | | |
| Net income | | $298,724 | $ | 302,864 | $305,072 |
| Other comprehensive income (loss), net of tax: | | | | | |
| Available-for-sale debt securities: | | | | | |
| Net unrealized holding gains (losses) on debt securities | (1) | | 73,214 | 165,420 | ( 718,582 ) |

Defined benefit plans adjustments:
Net actuarial (loss) gain		( 635 )	177		( 2,199 )
Reclassification adjustment for amortization of net actuarial loss		35	11		2
Other comprehensive income (loss) for the year, net of tax		72,614	165,608	( 720,779 )
Total comprehensive income (loss)	$371,338	$	468,472	$( 415,707 )

Year Ended December 31,

202420232022 (In thousands)| Defined benefit plans adjustments: | | | | |
| --- | --- | --- | --- | --- |
| Net actuarial (loss) gain | $ | 381$ | ( 107 )$ | 1,319 |
| Reclassification adjustment for amortization of net actuarial loss | | ( 21 ) | ( 6 ) | ( 1 ) |
| Total income tax effect of items included in other comprehensive income (loss) | $ | 360$ | ( 113 )$ | 1,318 |

(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.

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FIRST BANCORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended December 31,

202420232022| (In thousands)Cash flows from operating activities: | | | | | |
| --- | --- | --- | --- | --- | --- |
| Net income | $298,724 | $ | 302,864 | $305,072 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | |
| Depreciation and amortizationAmortization of intangible assets | | 18,5806,416 | 20,5017,735 | | 22,2898,816 |
| Provision for credit lossesDeferred income tax expense | | 59,92114,131 | 60,9406,105 | | 27,69654,216 |
| Stock-based compensationGain on early extinguishment of debt | | 8,706- | ( 1,605 )7,799 | | 5,407- |
| Unrealized gain on derivative instrumentsNet gain on disposals or sales, and impairments of premises and equipment and other assets | | ( 537 )( 103 ) | ( 3,514 )( 301 ) | | ( 1,098 )( 706 ) |
| Net gain on sales of loans and loans held-for-sale valuation adjustmentsNet amortization of discounts, premiums, and deferred loan fees and costs | | ( 3,426 )344 | ( 1,572 )1,223 | | ( 5,498 )( 7,853 ) |
| Originations and purchases of loans held for saleSales and repayments of loans held for sale | ( 165,291 )160,593 | | ( 147,460 )149,888 | ( 214,962 )235,199 | |
| Amortization of broker placement feesNet amortization of premiums and discounts on investment securities | | 5,069757 | 4,967309 | | 3,435106 |
| Decrease (increase) in accrued interest receivableIncrease in accrued interest payable | | 5,5985,358 | 18,430( 5,437 ) | ( 11,340 ) | 1,706 |
| Increase in other assets(Decrease) increase in other liabilities | ( 10,514 ) | ( 176 ) | ( 16,619 )( 41,290 ) | | 20,437( 2,437 ) |
| Net cash provided by operating activities | 404,150 | | 362,963 | 440,485 | |
| Cash flows from investing activities:Net disbursements on loans held for investment | ( 705,368 ) | | ( 758,232 ) | ( 603,853 ) | |
| Proceeds from sales of loans held for investmentProceeds from sales of repossessed assets | | 18,36264,337 | 53,8707,736 | | 62,16846,281 |
| Purchases of available-for-sale debt securitiesProceeds from principal repayments and maturities of available-for-sale debt securities | ( 266,198 )997,081 | | 549,644( 5,458 ) | ( 512,327 )626,802 | |
| Purchases of held-to-maturity debt securitiesProceeds from principal repayments and maturities of held-to-maturity debt securities | | 38,353- | 85,988- | ( 289,784 ) | 32,153 |
| Additions to premises and equipmentProceeds from sales of premises and equipment and other assets | ( 10,008 ) | 1,353 | ( 22,599 )4,475 | ( 20,459 ) | 1,196 |
| Net (purchases) redemptions of equity securitiesProceeds from the settlement of insurance claims - investing activities | | ( 2,350 )670 | 5,643483 | ( 23,637 ) | - |
| Cash flows from financing activities:Net cash provided (used) by investing activities | 136,232 | | ( 78,450 ) | ( 681,460 ) | |
| Net increase (decrease) in depositsNet (repayments) proceeds of short-term borrowings | 260,843 | - | ( 550,133 )470,981 | ( 1,706,118 )550,133 | |
| Repayments of long-term borrowingsProceeds from long-term borrowings | ( 97,000 ) | - | 300,000( 19,795 ) | ( 500,000 )200,000 | |
| Repurchase of outstanding common stockDividends paid on common stock | ( 102,393 )( 105,581 ) | | ( 203,241 )( 99,666 ) | ( 277,769 )( 87,824 ) | |
| Net cash used in financing activities | ( 44,131 ) | | ( 101,854 ) | ( 1,821,578 ) | |
| Net increase (decrease) in cash and cash equivalentsCash and cash equivalents at beginning of year | 496,251663,164 | | 182,659480,505 | ( 2,062,553 )2,543,058 | |

Cash and cash equivalents at end of year$1,159,415$663,164$480,505| Cash and cash equivalents include: | | | | | |
| --- | --- | --- | --- | --- | --- |
| Cash and due from banksMoney market investments | $1,158,215 | 1,200$ | 661,9251,239 | $478,480 | 2,025 |
| | $1,159,415 | $ | 663,164 | $480,505 | |

The accompanying notes are an integral part of these statements.

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FIRST BANCORP.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY| | | Year Ended December 31, | | |
| --- | --- | --- | --- | --- |
| | 2024 | 2023 | | 2022 |
| (In thousands, except per share information) | | | | |
| Common Stock | $22,366 | $ | 22,366$ | 22,366 |

Additional Paid-In Capital:
Balance at beginning of year	965,707	970,722	972,547
Stock-based compensation expense	8,706	7,799	5,407
Common stock reissued under stock-based compensation plan	( 9,659 )	( 13,531 )	( 7,365 )
Restricted stock forfeited	210	717	133
Balance at end of year	964,964	965,707	970,722

Retained Earnings:
Balance at beginning of year				1,846,112	1,644,209	1,427,295
Cumulative adjustment of adoption of Accounting Standards Update (“ASU”) 2022-02				-	( 1,357 )	-
Net income				298,724	302,864	305,072
Dividends on common stock (2024 - $	0.64per share; 2023 - $	0.56per share; 2022 - $	0.46per share)	( 106,024 )	( 99,604 )	( 88,158 )
Balance at end of year				2,038,812	1,846,112	1,644,209

Treasury Stock (at cost):
Balance at beginning of year	( 697,406 )	( 506,979 )	( 236,442 )
Common stock repurchases (See Note 15)	( 102,393 )	( 203,241 )	( 277,769 )
Common stock reissued under stock-based compensation plan	9,659	13,531	7,365
Restricted stock forfeited	( 210 )	( 717 )	( 133 )
Balance at end of year	( 790,350 )	( 697,406 )	( 506,979 )

Accumulated Other Comprehensive Loss, net of tax:
Balance at beginning of year		( 639,170 )	( 804,778 )	( 83,999 )
Other comprehensive income (loss), net of tax		72,614	165,608	( 720,779 )
Balance at end of year		( 566,556 )	( 639,170 )	( 804,778 )
Total stockholders’ equity		$1,669,236	$1,497,609	$1,325,540
	The accompanying notes are an integral part of these statements.

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INDEX TO NOTES TO CONSOLIDATED FINANCIAL STATEMENTS| | | PAGE |
| --- | --- | --- |
| Note 1 – | Nature of Business and Summary of Significant Accounting Policies | 119 |
| Note 2 – | Money Market Investments | 134 |
| Note 3 – | Debt Securities | 135 |
| Note 4 – | Loans Held for Investment | 145 |
| Note 5– | Allowance for Credit Losses for Loans and Finance Leases | 172 |
| Note 6– | Premises and Equipment | 175 |
| Note 7 – | Other Real Estate Owned (“OREO”) | 176 |
| Note 8 – | Related-Party Transactions | 176 |
| Note 9 – | Goodwill and Other Intangibles | 177 |
| Note 10 – | Non-Consolidated Variable Interest Entities (“VIEs”) and Servicing Assets | 178 |
| Note 11 – | Deposits | 183 |
| Note 12 – | Borrowings | 184 |
| Note 13 – | Earnings per Common Share | 186 |
| Note 14 – | Stock-Based Compensation | 187 |
| Note 15 – | Stockholders’ Equity | 190 |
| Note 16 – | Accumulated Other Comprehensive Loss | 192 |
| Note 17 – | Employee Benefit Plans | 193 |
| Note 18 – | Other Non-Interest Income | 197 |
| Note 19 – | Other Non-Interest Expenses | 197 |
| Note 20 – | Income Taxes | 198 |
| Note 21 – | Operating Leases | 201 |
| Note 22 – | Derivative Instruments and Hedging Activities | 202 |
| Note 23– | Fair Value | 205 |
| Note 24– | Revenue from Contracts with Customers | 211 |
| Note 25 – | Segment Information | 214 |
| Note 26 – | Supplemental Statement of Cash Flows Information | 218 |
| Note 27 – | Regulatory Matters, Commitments, and Contingencies | 219 |
| Note 28 – | First BanCorp. (Holding Company Only) Financial Information | 223 |

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Audited)

NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of business First BanCorp. (the “Corporation”) is a publicly owned, Puerto Rico-chartered financial holding company organized under the laws of the Commonwealth of Puerto Rico in 1948. The Corporation is subject to regulation, supervision, and examination by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”). Through its subsidiaries, including its banking subsidiary, FirstBank Puerto Rico (“FirstBank” or the “Bank”), the Corporation provides full-service commercial and consumer banking services, mortgage banking services, automobile financing, trust services, insurance agency services, and other financial products and services with operations in Puerto Rico, the United States, the U.S. Virgin Islands (the “USVI”), and the British Virgin Islands (the “BVI”). The Corporation has two wholly-owned subsidiaries: FirstBank Puerto Rico (“FirstBank” or the “Bank”), and FirstBank Insurance Agency, Inc. (“FirstBank Insurance Agency”). FirstBank is a Puerto Rico-chartered commercial bank, and FirstBank Insurance Agency is a Puerto Rico-chartered insurance agency. FirstBank is subject to the supervision, examination, and regulation of both the Office of the Commissioner of Financial Institutions of the Commonwealth of Puerto Rico (the “OCIF”) and the FDIC. Deposits are insured through the FDIC Deposit Insurance Fund. FirstBank also operates in the State of Florida, subject to regulation and examination by the Florida Office of Financial Regulation and the FDIC; in the USVI, subject to regulation and examination by the USVI Division of Banking, Insurance and Financial Regulation; and in the BVI, subject to regulation by the British Virgin Islands Financial Services Commission. The Consumer Financial Protection Bureau (the “CFPB”) regulates FirstBank’s consumer financial products and services. FirstBank Insurance Agency is subject to the supervision, examination, and regulation, including the Office of the Insurance Commissioner of the Commonwealth of Puerto Rico and the Division of Banking, Insurance and Financial Regulation in the USVI.

FirstBank conducts its business through its main office located in San Juan, Puerto Rico, 57 banking branches in Puerto Rico, eight banking branches in the USVI and the BVI, and eight banking branches in the state of Florida (USA). FirstBank has six wholly-owned subsidiaries with operations in Puerto Rico: First Federal Finance Corp. (d/b/a Money Express La Financiera), a finance company specializing in the origination of small loans with 25 offices in Puerto Rico; First Management of Puerto Rico, a Puerto Rico corporation, which holds tax-exempt assets; FirstBank Overseas Corporation, an international banking entity (an “IBE”) organized under the International Banking Entity Act of Puerto Rico; two companies engaged in the operation of certain real estate properties; and a limited liability corporation organized in 2022 under the laws of the Commonwealth of Puerto Rico and Puerto Rico Tax Incentives Code (“Act 60 of 2019”), which commenced operations in 2023 and engages in investing and lending transactions. General The accompanying consolidated audited financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”). The following is a description of the Corporation’s most significant accounting policies. Principles of consolidation The consolidated financial statements include the accounts of the Corporation and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The results of operations of companies or assets acquired in a business combination are included from the date of acquisition. Entities in which the Corporation holds a controlling financial interest are consolidated. For a voting interest entity, a controlling financial interest is generally where the Corporation holds, directly or indirectly, more than 50 percent of the outstanding voting shares. For a VIE, a controlling financial interest is where the Corporation has the power to direct the activities of an entity that most significantly impact the entity’s economic performance and has an obligation to absorb losses or the right to receive benefits from the VIE. Statutory business trusts that are wholly owned by the Corporation and are issuers of trust-preferred securities (“TRuPs”) and entities in which the Corporation has a non-controlling interest are not consolidated in the Corporation’s consolidated financial statements in accordance with authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) for consolidation of VIEs.

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Use of estimates in the preparation of financial statements The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that significantly affect amounts reported in the consolidated financial statements. Although estimates and assumptions about future economic and market conditions (for example, unemployment, market liquidity, real estate prices, etc.) contemplate current conditions and how we expect them to change in the future, it is reasonably possible that actual conditions could be worse than anticipated in those estimates, which could materially affect our results of operations and financial condition. The Corporation utilizes processes that involve the use of significant estimates and the judgements of management in determining the amount of its ACL, income taxes, as well as fair value measurements of investment securities, goodwill, other intangible assets, pension plans, mortgage servicing rights, and loans held for sale. As with any estimate, actual results could differ from those estimates. Cash and cash equivalents For purposes of reporting cash flows, cash and cash equivalents include cash on hand, cash items in transit, and amounts due from the Federal Reserve Bank of New York (the “FED”) and other depository institutions. The term also includes money market funds and short-term investments with original maturities of three months or less. Investment securities The Corporation classifies its investments in debt and equity securities into one of four categories: Held-to-maturity — Debt securities that the entity has the intent and ability to hold to maturity. These securities are carried at amortized cost. The Corporation may not sell or transfer held-to-maturity securities without calling into question its intent to hold other debt securities to maturity, unless a nonrecurring or unusual event that could not have been reasonably anticipated has occurred. Trading — Debt securities that are bought and held principally for the purpose of selling them in the near term. These securities are carried at fair value, with unrealized gains and losses reported in earnings. As of December 31, 2024 and 2023, the Corporation did not hold debt securities for trading purposes. Available-for-sale — Debt securities not classified as held-to-maturity or trading. These securities are carried at fair value, with unrealized holding gains and losses, net of deferred taxes, reported in other comprehensive loss (“OCL”) as a separate component of stockholders’ equity. The unrealized holding gains and losses do not affect earnings until they are realized, or an ACL is recorded. Equity securities — Equity securities that do not have readily available fair values are classified as equity securities in the consolidated statements of financial condition. These securities are stated at cost less impairment, if any. This category is principally composed of Federal Home Loan Bank (“FHLB”) stock that the Corporation owns to comply with FHLB regulatory requirements. The realizable value of the FHLB stock equals its cost. Also included in this category are marketable equity securities held at fair value with changes in unrealized gains or losses recorded through earnings in other non-interest income. Premiums and discounts on debt securities are amortized as an adjustment to interest income on investments over the life of the related securities under the interest method without anticipating prepayments, except for mortgage-backed securities (“MBS”) where prepayments are anticipated. Premiums on callable debt securities, if any, are amortized to the earliest call date. Purchases and sales of securities are recognized on a trade-date basis, the date the order to buy or sell is executed. Gains and losses on sales are determined using the specific identification method. A debt security is placed on nonaccrual status at the time any principal or interest payment becomes 90 days delinquent. Interest accrued but not received for a security placed on nonaccrual is reversed against interest income. See Note 3 – “Debt Securities” for additional information on nonaccrual debt securities. Allowance for Credit Losses – Held-to-Maturity Debt Securities: As of December 31, 2024 and 2023, the held-to-maturity debt securities portfolio consisted of U.S. government-sponsored entities (“GSEs”) MBS and Puerto Rico municipal bonds.

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The ACL on held-to-maturity debt securities is based on an expected loss methodology referred to as current expected credit loss (“CECL”) methodology by major security type. Any expected credit loss is provided through the ACL on held-to-maturity debt securities and is deducted from the amortized cost basis of the security so that the statement of financial condition reflects the net amount the Corporation expects to collect. The Corporation does not recognize an ACL for GSEs’ MBS since they are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies, and have a long history of no credit losses. For the ACL of held-to-maturity Puerto Rico municipal bonds, the Corporation considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. These Puerto Rico municipal obligations typically are not issued in bearer form, nor are they registered with the Securities and Exchange Commission (“SEC”) and are not rated by external credit agencies. These financing arrangements with Puerto Rico municipalities were issued in bond form and accounted for as securities but underwritten as loans with features that are typically found in commercial loans. Accordingly, similar to commercial loans, an internal risk rating ( i.e ., pass, special mention, substandard, doubtful, or loss) is assigned to each bond at the time of issuance or acquisition and monitored on a continuous basis with a formal assessment completed, at a minimum, on a quarterly basis. The Corporation determines the ACL for held-to-maturity Puerto Rico municipal bonds based on the product of a cumulative probability of default (“PD”) and loss given default (“LGD”), and the amortized cost basis of each bond over its remaining expected life. PD estimates represent the point -in-time as of which the PD is developed, and are updated quarterly based on, among other things, the payment performance experience, financial performance and market value indicators, and current and forecasted relevant forward-looking macroeconomic variables over the expected life of the bonds, to determine a lifetime term structure PD curve. LGD estimates are determined based on, among other things, historical charge-off events and recovery payments (if any), government sector historical loss experience, as well as relevant current and forecasted macroeconomic expectations of variables, such as unemployment rates, interest rates, and market risk factors based on industry performance, to determine a lifetime term structure LGD curve. Under this approach, all future period losses for each instrument are calculated using the PD and LGD loss rates derived from the term structure curves applied to the amortized cost basis of each bond. For the relevant macroeconomic expectations of variables, the methodology considers an initial forecast period (a “reasonable and supportable period”) of two years and a reversion period of up to three years, utilizing a straight-line approach and reverting back to the historical macroeconomic mean. After the reversion period, the Corporation uses a historical loss forecast period covering the remaining contractual life based on the changes in key historical economic variables during representative historical expansionary and recessionary periods. Furthermore, the Corporation periodically considers the need for qualitative adjustments to the ACL. Qualitative adjustments may be related to and include, but not be limited to, factors such as: (i) 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 resolution strategies, among others. The Corporation has elected not to measure an ACL on accrued interest related to held-to-maturity debt securities, as uncollectible accrued interest receivables are written off on a timely manner. See Note 3 – “Debt Securities” for additional information about ACL balances for held-to-maturity debt securities and activity during the years ended December 31, 2024, 2023, and 2022. Allowance for Credit Losses – Available-for-Sale Debt Securities: For available-for-sale debt securities in an unrealized loss position, the Corporation first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the difference between fair value and amortized cost is considered to be impaired and recognized in provision for credit losses. For available-for-sale debt securities that do not meet the aforementioned criteria, the Corporation evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the cash position of the issuer and its cash and capital generation capacity, which could increase or diminish the issuer’s ability to repay its bond obligations, the extent to which the fair value is less than the amortized cost basis, any adverse change to the credit conditions and liquidity of the issuer, taking into consideration the latest information available about the financial condition of the issuer, credit ratings, the failure of the issuer to make scheduled principal or interest payments, recent legislation and government actions affecting the issuer’s industry, and actions taken by the issuer to deal with the economic climate. The Corporation also takes into consideration changes in the near-term prospects of the underlying collateral of a security, if any, such as changes in default rates, loss severity given default, and significant changes in prepayment assumptions and the level of cash flows generated from the underlying collateral, if any, supporting the principal and interest payments on the debt securities. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and the Corporation records an ACL for the credit loss portion, limited to the amount by which the fair value is less than the amortized cost basis. Meanwhile, the non-credit portion is recognized in OCL. Non-credit-related impairments result from other factors, including increased liquidity spreads and higher interest rates.

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Losses are charged against the ACL when management believes the uncollectability of an available-for-sale debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met. The Corporation has elected not to measure an ACL on accrued interest related to available-for-sale debt securities as uncollectible accrued interest receivables are written off in a timely manner as indicated above. Substantially all of the Corporation’s available-for-sale debt securities are issued by GSEs. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies, and have a long history of no credit losses. Accordingly, there is a zero-credit loss expectation on these securities. For further information, including the methodology and assumptions used for the discounted cash flow analyses performed on other available-for-sale debt securities such as private label MBS and bonds issued by the Puerto Rico Housing Finance Authority (“PRHFA”), see Note 3 – “Debt Securities” and Note 23 – “Fair Value.” Loans held for investment Loans that the Corporation has the ability and intent to hold for the foreseeable future, or until maturity or payoff, are classified as held for investment and are reported at amortized cost, net of its ACL. The substantial majority of the Corporation’s loans are classified as held for investment. Amortized cost is the principal outstanding balance, net of unearned interest, cumulative charge-offs, unamortized deferred origination fees and costs, and unamortized premiums and discounts. The Corporation reports credit card loans at their outstanding unpaid principal balance plus uncollected billed interest and fees net of such amounts deemed uncollectible. Interest income is accrued on the unpaid principal balance. Fees collected and costs incurred in the origination of new loans are deferred and amortized using the interest method or a method that approximates the interest method over the term of the loan as an adjustment to interest yield. Unearned interest on certain personal loans, auto loans, and finance leases and discounts and premiums are recognized as income under a method that approximates the interest method. When a loan is paid-off or sold, any remaining unamortized net deferred fees, or costs, discounts and premiums are included in loan interest income in the period of payoff. Nonaccrual and Past-Due Loans – Loans on which the recognition of interest income has been discontinued are designated as nonaccrual. Loans are classified as nonaccrual when they are 90 days past due for interest and principal, except for residential mortgage loans insured or guaranteed by the Federal Housing Administration (the “FHA”), the Veterans Administration (the “VA”) or the PRHFA, and credit card loans. It is the Corporation’s policy to report delinquent mortgage loans insured by the FHA, or guaranteed by the VA or the PRHFA, as loans past due 90 days and still accruing as opposed to nonaccrual loans since the principal repayment is insured or guaranteed, and such loans continue to accrue interest at the rate guaranteed by the government agency. However, when such FHA/VA loans are over 15 months delinquent, the Corporation discontinues the recognition of income taking into consideration the FHA interest curtailment process, and with respect to PRHFA loans when such loans are over 90 days delinquent. Credit card loans continue to accrue finance charges and fees until charged off at 180 days. Loans generally may be placed on nonaccrual status prior to when required by the policies described above when the full and timely collection of interest or principal becomes uncertain (generally based on an assessment of the borrower’s financial condition and the adequacy of collateral, if any). When a loan is placed on nonaccrual status, any accrued but uncollected interest income is reversed and charged against interest income and amortization of any net deferred fees is suspended. Interest income on nonaccrual loans is recognized only to the extent it is received in cash. However, when there is doubt regarding the ultimate collectability of loan principal, all cash thereafter received is applied to reduce the carrying value of such loans ( i.e. , the cost recovery method). Under the cost-recovery method, interest income is not recognized until the loan balance has been collected in full, including the charged -off portion. Generally, the Corporation returns a loan to accrual status when all delinquent interest and principal becomes current under the terms of the loan agreement, or after a sustained period of repayment performance ( six months ) and the loan is well secured and in the process of collection, and full repayment of the remaining contractual principal and interest is expected. Loans that are past due 30 days or more as to principal or interest are considered delinquent, with the exception of residential mortgage, commercial mortgage, and construction loans, which are considered past due when the borrower is in arrears on two or more monthly payments. The Corporation has elected not to measure an ACL on accrued interest related to loans held for investment as uncollectible accrued interest receivables are written off on a timely manner. Collateral-dependent Loans – Certain commercial, residential and consumer loans for which repayment is expected to be provided substantially through the operation or sale of the loan collateral are considered to be collateral-dependent. Commercial and construction loans of $ 0.5 million or more and for which borrowers exhibit specific risk characteristics, such as repayment capacity or credit deterioration, are considered collateral dependent. Residential mortgage loans and home equity lines of credit are considered collateral dependent when they are 180 days or more past due. The ACL of collateral dependent loans is based on the fair value of the collateral at the reporting date, adjusted for undiscounted estimated costs to sell, as further discussed below. Auto loans and finance leases are not considered collateral dependent because its ACL is calculated using a PD/LGD model as further discussed below.

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Charge-off of Uncollectible Loans – Net charge -offs consist of the unpaid principal balances of loans held for investment that the Corporation determines are uncollectible, net of recovered amounts. The Corporation records charge -offs as a reduction to the ACL and subsequent recoveries of previously charged-off amounts are credited to the ACL. Collateral dependent loans in the construction, commercial mortgage, and commercial and industrial (“C&I”) loan portfolios are written down to their net realizable value (fair value of collateral, less estimated costs to sell) when loans are considered to be uncollectible. Within the consumer loan portfolio, closed-end consumer loans, including auto loans and finance leases, are charged off when payments are 120 days in arrears. Open-end (revolving credit) consumer loans, including credit card loans, are charged off when payments are 180 days in arrears. Residential mortgage loans that are 180 days delinquent are reviewed and charged-off, as needed, to the fair value of the underlying collateral less cost to sell. Generally, all loans may be charged off or written down to the fair value of the collateral prior to the application of the policies described above if a loss-confirming event has occurred. Loss-confirming events include, but are not limited to, bankruptcy (unsecured), continued delinquency, or receipt of an asset valuation indicating a collateral deficiency when the asset is the sole source of repayment. Modifications Granted to Debtors Experiencing Financial Difficulties – Effective January 1, 2023, the Corporation adopted ASU 2022-02 Financial Instruments – Credit Losses (Topic 326) Troubled Debt Restructurings (“TDR”) and Vintage Disclosures. For years 2024 and 2023, modifications granted to debtors experiencing financial difficulties during the current reporting period in which there was a change in the timing and/or amount of contractual cash flows in the form of a reduction in interest rate, term extension, an other-than-insignificant payment delay, or any combination thereof are disclosed. For the year 2022, modifications resulting in troubled debt restructurings (“TDRs”) in which the creditor for economic or legal reasons related to the debtor’s financial difficulties grants a concession to the debtor that it would not otherwise consider are disclosed. A debtor is considered to be experiencing financial difficulties when there is significant doubt about the debtor’s ability to make required payments on the debt or to get equivalent financing from another creditor at a market rate for similar debt. Modified loans are classified as either accrual or nonaccrual loans. Loans in accrual status may remain in accrual status when their contractual terms have been modified if the loans had demonstrated performance prior to the restructuring and payment in full under the restructured terms is expected. Otherwise, modified loans on nonaccrual status at the time of the restructuring will remain on nonaccrual status until the borrower has proven the ability to perform under the modified structure, generally for a minimum of six months, and there is evidence that such payments can, and are likely to, continue as agreed. Furthermore, the Corporation applies a non-discounted flow portfolio-based approach for the estimation of the ACL of modified loans to borrowers experiencing financial difficulties for all portfolios. Allowance for credit losses for loans and finance leases The ACL for loans and finance leases held for investment is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on loans. Loans are charged -off against the ACL when management confirms the loan balance is uncollectable. The Corporation estimates the ACL using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience is a significant input for the estimation of expected credit losses, as well as adjustments to historical loss information made for differences in current loan-specific risk characteristics, such as any difference in underwriting standards, portfolio mix, delinquency level, or term. Additionally, the 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. Expected credit losses are estimated over the contractual term of the loans, adjusted by prepayments when appropriate. The contractual term excludes expected extensions, and renewals, unless the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancellable by the Corporation. The Corporation estimates the ACL primarily based on a PD/LGD modeled approach, or individually primarily for collateral dependent loans. The Corporation evaluates the need for changes to the ACL by portfolio segments and classes of loans within certain of those portfolio segments. Factors such as the credit risk inherent in a portfolio and how the Corporation monitors the related quality, as well as the estimation approach to estimate credit losses, are considered in the determination of such portfolio segments and classes. The Corporation has identified the following portfolio segments: ● Residential mortgage – Residential mortgage loans are loans secured by residential real property together with the right to receive the payment of principal and interest on the loan. The majority of the Corporation’s residential loans are fixed-rate first lien closed-end loans secured by 1-4 single-family residential properties.

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● Commercial mortgage – Commercial mortgage loans are loans secured primarily by commercial real estate properties for which the primary source of repayment comes from rent and lease payments that are generated by an income-producing property. ● Commercial and Industrial – C&I loans include both unsecured and secured loans for which the primary source of repayment comes from the ongoing operations and activities conducted by the borrower and not from rental income or the sale or refinancing of any underlying real estate collateral; thus, credit risk is largely dependent on the commercial borrower’s current and expected financial condition. The C&I loan portfolio consists of loans granted to large corporate customers as well as middle-market customers across several industries, and the government sector. ● Construction – Construction loans consist generally of loans secured by real estate made to finance the construction of industrial, commercial, or residential buildings and include loans to finance land development in preparation for erecting new structures. These loans involve an inherently higher level of risk and sensitivity to market conditions. Demand from prospective tenants or purchasers may erode after construction begins because of a general economic slowdown or otherwise. ● Consumer – Consumer loans generally consist of unsecured and secured loans extended to individuals for household, family, and other personal expenditures, including several classes of products. For purposes of the ACL determination, the Corporation stratifies portfolio segments by two main regions ( i.e., the Puerto Rico/Virgin Islands region and the Florida region). The ACL is measured using a PD/LGD model that is calculated based on the product of a cumulative PD and LGD. PD and LGD estimates are updated quarterly for each loan over the remaining expected life to determine lifetime term structure curves. Under this approach, the Corporation calculates losses for each loan for all future periods using the PD and LGD loss rates derived from the term structure curves applied to the amortized cost basis of the loans, considering prepayments. For residential mortgage loans, the Corporation stratifies the portfolio segment by the following two classes: (i) government- guaranteed residential mortgage loans, and (ii) conventional mortgage loans. Government-guaranteed loans are those originated to qualified borrowers under the FHA and the VA standards. Originated loans that meet the FHA’s standards qualify for the FHA’s insurance program whereas loans that meet the standards of the VA are guaranteed by such entity. No credit losses are determined for loans insured or guaranteed by the FHA or the VA due to the explicit guarantee of the U.S. federal government. On the other hand, an ACL is calculated for conventional residential mortgage loans, which are loans that do not qualify under the FHA or VA programs. PD estimates are based on, among other things, historical payment performance and relevant current and forward-looking macroeconomic variables, such as regional unemployment rates. On the other hand, LGD estimates are based on, among other things, historical charge-off events and recovery payments, loan-to-value attributes, and relevant current and forecasted macroeconomic variables, such as the regional housing price index. For commercial mortgage loans, PD estimates are based on, among other things, industry historical loss experience, property type, occupancy, and relevant current and forward-looking macroeconomic variables. On the other hand, LGD estimates are based on historical charge-off events and recovery payments, industry historical loss experience, specific attributes of the loans, such as loan-to- value, debt service coverage ratios, and net operating income, as well as relevant current and forecasted macroeconomic variables expectations, such as commercial real estate price indexes, the gross domestic product (“GDP”), interest rates, and unemployment rates, among others. For C&I loans, PD estimates are based on industry historical loss experience, financial performance and market value indicators, and current and forecasted relevant forward-looking macroeconomic variables. On the other hand, LGD estimates are based on industry historical loss experience, specific attributes of the loans, such as loan to value, as well as relevant current and forecasted expectations for macroeconomic variables, such as unemployment rates, interest rates, and market risk factors based on industry performance and the equity market. For construction loans, PD estimates are based on, among other things, historical payment performance experience, industry historical loss experience, underlying type of collateral, and relevant current and forward-looking macroeconomic variables. On the other hand, LGD estimates are based on historical charge-off events and recovery payments, industry historical loss experience, specific attributes of the loans, such as loan-to-value, debt service coverage ratios, and relevant current and forecasted macroeconomic variables, such as unemployment rates, GDP, interest rates, and real estate price indexes. For consumer loans, the Corporation stratifies the portfolio segment by the following five classes: (i) auto loans; (ii) finance leases; (iii) credit cards; (iv) personal loans; and (v) other consumer loans, such as open-end home equity revolving lines of credit and other types of consumer credit lines, among others. In determining the ACL, management considers consumer loans risk characteristics including, but not limited to, credit quality indicators such as payment performance period, delinquency and original FICO scores. For

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auto loans and finance leases, PD estimates are based on, among other things, the historical payment performance and relevant current and forward-looking macroeconomic variables, such as regional unemployment rates. On the other hand, LGD estimates are primarily based on historical charge-off events and recovery payments. For the credit card and personal loan portfolios, the Corporation determines the ACL on a pool basis, based on products PDs and LGDs developed considering historical losses for each origination vintage by length of loan terms, by geography, payment performance and by credit score. The PD and LGD for each cohort consider key macroeconomic variables, such as regional GDP, unemployment rates, and retail sales, among others. For the ACL determination of all portfolios, the expectations for relevant macroeconomic variables related to the Puerto Rico and Virgin Islands region consider an initial reasonable and supportable period of two years and a reversion period of up to three years , utilizing a straight-line approach and reverting back to the historical macroeconomic mean. For the Florida region, the methodology considers a reasonable and supportable forecast period and an implicit reversion towards the historical trend that varies for each macroeconomic variable. After the reversion period, a historical loss forecast period covering the remaining contractual life, adjusted for prepayments, is used based on the changes in key historical economic variables during representative historical expansionary and recessionary periods. Furthermore, the Corporation periodically considers the need for qualitative adjustments to the ACL. Qualitative adjustments may be related to and include, but not be limited to, factors such as: (i) 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, including, but not limited to, expectations about interest rate, inflation, and real estate price levels, as well as labor market challenges; (ii) organization specific risks such as credit concentrations, collateral specific risks, nature and size of the portfolio and external factors that may ultimately impact credit quality, and (iii) other limitations associated with factors such as changes in underwriting and loan resolution strategies, among others. The ACL of non-collateral dependent loans previously written down to their respective realizable values is generally measured using a risk-adjusted discounted cash flow method. Under this approach, all future cash flows (interest and principal) for each loan are adjusted by the PDs and LGDs derived from the term structure curves and prepayments and then discounted at the effective interest rate as of the reporting date to arrive at the net present value of future cash flows. See Note 5 – “Allowance for Credit Losses for Loans and Finance Leases” for additional information about reserve balances for each portfolio segment and activity during the years ended December 31, 2024, 2023, and 2022. Allowance for credit losses on off-balance sheet credit exposures and other assets The Corporation estimates expected credit losses over the contractual period in which the Corporation is exposed to credit risk via a contractual obligation to extend credit unless the obligation is unconditionally cancellable by the Corporation. The ACL on off- balance sheet credit exposures is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. As of December 31, 2024 and 2023, the off-balance sheet credit exposures primarily consisted of unfunded loan commitments and standby letters of credit for commercial and construction loans. The Corporation utilized the PDs and LGDs derived from the above-explained methodologies for the commercial and construction loan portfolios. Under this approach, all future period losses for each loan are calculated using the PD and LGD loss rates derived from the term structure curves applied to the usage given default exposure. The ACL on off-balance sheet credit exposures is included as part of accounts payable and other liabilities in the consolidated statements of financial condition with adjustments included as part of the provision for credit losses in the consolidated statements of income. See Note 5 – “Allowance for Credit Losses” for Loans and Finance Leases for additional information about reserve balances for unfunded loan commitments and activity during the years ended December 31, 2024, 2023, and 2022. The Corporation also estimates expected credit losses for certain accounts receivable, primarily claims from government- guaranteed loans, loan servicing-related receivables, and other receivables. The ACL on other assets measured at amortized cost is included as part of other assets in the consolidated statements of financial condition with adjustments included as part of other non- interest expenses in the consolidated statements of income. As of December 31, 2024 and 2023, the ACL on other assets measured at amortized cost was immaterial.

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Loans held for sale Loans that the Corporation intends to sell or that the Corporation does not have the ability and intent to hold for the foreseeable future are classified as held-for-sale loans. Loans held for sale are recorded at the lower of cost or fair value less costs to sell. Generally, the loans held-for-sale portfolio consists of conforming residential mortgage loans that will be pooled into Government National Mortgage Association (“GNMA”) MBS, which are then sold to investors, and conforming residential mortgage loans that the Corporation intends to sell to GSEs, such as the Federal National Mortgage Association (“FNMA”) and the U.S. Federal Home Loan Mortgage Corporation (“FHLMC”). Generally, residential mortgage loans held for sale are valued on an aggregate portfolio basis and the value is primarily derived from quotations based on the MBS market. The amount by which cost exceeds market value in the aggregate portfolio of residential mortgage loans held for sale, if any, is accounted for as a valuation allowance with changes therein included in the determination of net income and reported as part of mortgage banking activities in the consolidated statements of income. Loan costs and fees are deferred at origination and are recognized in income at the time of sale and are included in the amortized cost basis when evaluating the need for a valuation allowance. The fair value of commercial and construction loans held for sale, if any, is primarily derived from external appraisals, or broker price opinions that the Corporation considers, with changes in the valuation allowance reported as part of other non-interest income in the consolidated statements of income. In certain circumstances, the Corporation transfers loans from/to held for sale or held for investment based on a change in strategy. If such a change in holding strategy is made, significant adjustments to the loans’ carrying values may be necessary. Reclassifications of loans held for investment to held for sale are made at the amortized cost on the date of transfer and establish a new cost basis upon transfer. Write-downs of loans transferred from held for investment to held for sale are recorded as charge-offs at the time of transfer. Any previously recorded ACL is reversed in earnings after applying the write-down policy. Subsequent changes in value below amortized cost are recorded through a valuation allowance and are reflected in non-interest income in the consolidated statements of income. Reclassifications of loans held for sale to held for investment are made at the amortized cost on the transfer date and any previously recorded valuation allowance is reversed in earnings. Upon transfer to held for investment, the Corporation calculates an ACL using the CECL impairment model. Transfers and servicing of financial assets and extinguishment of liabilities After a transfer of financial assets in a transaction that qualifies for accounting as a sale, the Corporation derecognizes the financial assets when it has surrendered control and derecognizes liabilities when they are extinguished. A transfer of financial assets in which the Corporation surrenders control over the assets is accounted for as a sale to the extent that consideration other than beneficial interests is received in exchange. The criteria that must be met to determine that the control over transferred assets has been surrendered include the following: (i) the assets must be isolated from creditors of the transferor; (ii) the transferee must obtain the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets; and (iii) the transferor cannot maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. When the Corporation transfers financial assets and the transfer fails any one of the above criteria, the Corporation is prevented from derecognizing the transferred financial assets and the transaction is accounted for as a secured borrowing. Servicing assets The Corporation recognizes as separate assets the rights to service loans for others, whether those servicing assets are originated or purchased. In the ordinary course of business, loans are pooled into GNMA MBS for sale in the secondary market or sold to FNMA or FHLMC, with servicing retained. When the Corporation sells mortgage loans, it recognizes any retained servicing right (“servicing assets” or “MSRs”) at the time of sale, based on its fair value. MSRs retained in a sale or securitization arise from contractual agreements between the Corporation and investors in MBS and mortgage loans. Under these contracts, the Corporation performs loan-servicing functions in exchange for fees and other remuneration. The MSRs, included as part of other assets in the statements of financial condition, entitle the Corporation to servicing fees based on the outstanding principal balance of the mortgage loans and the contractual servicing rate. The servicing fees are credited to income on a monthly basis when collected and recorded as part of mortgage banking activities in the consolidated statements of income. In addition, the Corporation generally receives other remuneration consisting of mortgagor-contracted fees such as late charges and prepayment penalties, which are credited to income when collected. Considerable judgment is required to determine the fair value of the Corporation’s MSRs. Unlike highly liquid investments, the fair value of MSRs cannot be readily determined because these assets are not actively traded in securities markets. The initial carrying value of an MSR is determined based on its fair value. The Corporation determines the fair value of the MSRs using a discounted

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static cash flow analysis, which incorporates current market assumptions commonly used by buyers of these MSRs and was derived from prevailing conditions in the secondary servicing market. The valuation of the Corporation’s MSRs incorporates two sets of assumptions: (i) market-derived assumptions for discount rates, servicing costs, escrow earnings rates, floating earnings rates, and the cost of funds; and (ii) market assumptions calibrated to the Corporation’s loan characteristics and portfolio behavior for escrow balances, delinquencies and foreclosures, late fees, prepayments, and prepayment penalties. Once recorded, the Corporation periodically evaluates MSRs for impairment. Impairments are recognized through a valuation allowance for each individual stratum of servicing assets. For purposes of performing the MSR impairment evaluation, the servicing portfolio is stratified on the basis of certain risk characteristics, such as region, terms, and coupons. Impairment charges are recorded as part of revenues from mortgage banking activities in the consolidated statements of income. If the value of the MSR subsequently increases, the recovery in value is recognized in current period earnings also as part of revenues from mortgage banking activities and the carrying value of the MSR is adjusted through a reduction in the valuation allowance. The Corporation conducts an other-than- temporary impairment analysis to evaluate whether a loss in the value of the MSR in a particular stratum, if any, is other than temporary or not. When the recovery of the value is unlikely in the foreseeable future, a write-down of the MSR in the stratum to its estimated recoverable value is charged to the valuation allowance. The MSRs are amortized over the estimated life of the underlying loans based on an income forecast method as a reduction of servicing income. The income forecast method of amortization is based on projected cash flows. A particular periodic amortization is calculated by applying to the carrying amount of the MSRs the ratio of the cash flows projected for the current period to total remaining net MSR forecasted cash flow. Premises and equipment Premises and equipment are carried at cost, net of accumulated depreciation and amortization. Depreciation is provided on the straight-line method over the estimated useful life of each type of asset. Amortization of leasehold improvements is computed over the terms of the leases ( i.e. , the contractual term plus lease renewals that are reasonably assured) or the estimated useful lives of the improvements, whichever is shorter. Costs of maintenance and repairs that do not improve or extend the life of the respective assets are expensed as incurred. Costs of renewals and betterments are capitalized. When the Corporation sells or disposes of assets, their cost and related accumulated depreciation are removed from the accounts and any gain or loss is reflected in earnings as part of other non-interest income in the consolidated statements of income. When the asset is no longer used in operations, and the Corporation intends to sell it, the asset is reclassified to other assets held for sale and is reported at the lower of the carrying amount or fair value less cost to sell. Premises and equipment are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Impairments on premises and equipment are included as part of occupancy and equipment expenses in the consolidated statements of income. Operating leases The Corporation, as lessee, determines if an arrangement is a lease or contains a lease at inception. Operating lease liabilities are recognized based on the present value of the remaining lease payments, discounted using the discount rate for the lease at the commencement date, or at acquisition date in case of a business combination. As the rates implicit in the Corporation’s operating leases are not readily determinable, the Corporation generally uses an incremental borrowing rate based on information available at the commencement date to determine the present value of future lease payments. The incremental borrowing rate is calculated based on fully amortizing secured borrowings. Operating right-of-use (“ROU”) assets are generally recognized based on the amount of the initial measurement of the lease liability. Non-lease components, such as common area maintenance charges, are not considered a part of the gross-up of the ROU asset and lease liability and are recognized as incurred. The Corporation’s leases are primarily related to operating leases for the Bank’s branches. Most of the Corporation’s leases with operating ROU assets have terms of two years to 20 years, some of which include options to extend the leases for up to ten years . The Corporation does not recognize ROU assets and lease liabilities that arise from short-term leases (less than 12 months). Operating lease expense, which is included as part of occupancy and equipment expenses in the consolidated statements of income, is recognized on a straight-line basis over the lease term that is based on the Corporation’s assessment of whether the renewal options are reasonably certain to be exercised. The Corporation includes the ROU assets and lease liabilities as part of other assets and accounts payable and other liabilities, respectively, in the consolidated statements of financial condition. As of December 31, 2024 and 2023, the Corporation, as lessee, did no t have any leases that qualified as finance leases.

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Other real estate owned OREO, which consists of real estate acquired in settlement of loans, is recorded at fair value less estimated costs to sell the real estate acquired. Generally, loans have been written down to their net realizable value prior to foreclosure. Any further reduction to their net realizable value is recorded with a charge to the ACL at the time of foreclosure or within six months after foreclosure. Thereafter, costs of maintaining and operating these properties, losses recognized on the periodic reevaluations of these properties, and gains or losses resulting from the sale of these properties are charged or credited to earnings and are included as part of net gain on OREO operations in the consolidated statements of income. Appraisals are obtained periodically, generally on an annual basis . Claims arising from FHA/VA government-guaranteed residential mortgage loans Upon the foreclosure on property collateralizing an FHA/VA government-guaranteed residential mortgage loan, the Corporation derecognizes the government-guaranteed mortgage loan and recognizes a receivable as part of other assets in the consolidated statements of condition if the conditions in ASC Subtopic 310-40, “Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure,” (“ASC Subtopic 310-40”) are met. See Note 7– “Other Real Estate Owned” for additional information on foreclosures associated to FHA/VA government-guaranteed residential mortgage loans reclassified to other assets as of December 31, 2024 and 2023. Goodwill and other intangible assets Goodwill – Goodwill represents the cost in excess of the fair value of net assets acquired (including identifiable intangibles) in transactions accounted for as business combinations. The Corporation allocates goodwill to the reporting unit(s) that are expected to benefit from the synergies of the business combination. Once goodwill has been assigned to a reporting unit, it no longer retains its association with a particular acquisition, and all of the activities within a reporting unit, whether acquired or internally generated, are available to support the value of the goodwill. The Corporation tests goodwill for impairment at least annually and more frequently if circumstances exist that indicate a possible reduction in the fair value of a reporting unit below its carrying value. If, after assessing all relevant events or circumstances, the Corporation concludes that it is more-likely-than-not that the fair value of a reporting unit is below its carrying value, then an impairment test is required. In addition to the goodwill recorded at the Commercial and Corporate, Consumer Retail, and Mortgage Banking reporting units in connection with the acquisition of Banco Santander Puerto Rico (“BSPR”) in 2020, the Corporation’s goodwill is mostly related to the United States (Florida) reporting unit. See Note 9– “Goodwill and Other Intangible Assets” for information on the qualitative assessment performed by the Corporation during the fourth quarter of 2024. Other Intangible Assets – As of December 31, 2024 and 2023, Corporation’s other intangible assets relate to core deposits. The Corporation amortizes core deposit intangibles based on the projected useful lives of the related deposits, generally on a straight-line basis, and reviews these assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not exceed their fair value. Securities purchased and sold under agreements to repurchase The Corporation accounts for securities purchased under resale agreements and securities sold under repurchase agreements as collateralized financing transactions. Generally, the Corporation records these agreements at the amount at which the securities were purchased or sold. The Corporation monitors the fair value of securities purchased and sold, and obtains collateral from, or returns it to, the counterparties when appropriate. These financing transactions do not create material credit risk given the collateral involved and the related monitoring process. The Corporation sells and acquires securities under agreements to repurchase or resell the same or similar securities. Generally, similar securities are securities from the same issuer, with identical form and type, similar maturity, identical contractual interest rates, similar assets as collateral, and the same aggregate unpaid principal amount. The counterparty to certain agreements may have the right to repledge the collateral by contract or custom. The Corporation presents such assets separately in the consolidated statements of financial condition as securities pledged with creditors’ rights to repledge. Repurchase and resale activities may be transacted under legally enforceable master repurchase agreements that give the Corporation, in the event of default by the counterparty, the right to liquidate securities held and to offset receivables and payables with the same counterparty. The Corporation offsets repurchase and resale transactions with the same counterparty in the consolidated statements of financial condition where it has such a legally enforceable right under a master netting agreement, the intention of setoff is existent, the transactions have the same maturity date, and the amounts are determinable. From time to time, the Corporation modifies repurchase agreements to take advantage of prevailing interest rates. Following applicable GAAP guidance, if the Corporation determines that the debt under the modified terms is substantially different from the original terms, the modification must be accounted for as an extinguishment of debt. The Corporation considers modified terms to be substantially different if the present value of the cash flows under the terms of the new debt instrument is at least 10% different from

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the present value of the remaining cash flows under the terms of the original instrument. The new debt instrument will be initially recorded at fair value, and that amount will be used to determine the debt extinguishment gain or loss to be recognized through the consolidated statements of income and the effective rate of the new instrument. If the Corporation determines that the debt under the modified terms is not substantially different, then the new effective interest rate is determined based on the carrying amount of the original debt instrument. The Corporation has determined that none of the repurchase agreements modified in the past were substantially different from the original terms, and, therefore, these modifications were not accounted for as extinguishments of debt . Income taxes The Corporation uses the asset and liability method for the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Corporation’s financial statements or tax returns. Deferred income tax assets and liabilities are determined for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future. The computation is based on enacted tax laws and rates applicable to periods in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income at the time of enactment of such change in tax rates. Any interest or penalties due for payment of income taxes are included in the provision for income taxes. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. In making such assessment, significant weight is given to evidence that can be objectively verified, including both positive and negative evidence. The authoritative guidance for accounting for income taxes requires the consideration of all sources of taxable income available to realize the deferred tax asset, including the future reversal of existing temporary differences, tax planning strategies and future taxable income, exclusive of the impact of the reversal of temporary differences and carryforwards. In estimating taxes, management assesses the relative merits and risks of the appropriate tax treatment of transactions considering statutory, judicial, and regulatory guidance. The Corporation releases income tax effects from OCL as pension and postretirement liabilities are extinguished. Discounts on purchased income tax credits are recognized in non- interest income when realized. See Note 20 – “Income Taxes ” for additional information. Under the authoritative accounting guidance, income tax benefits are recognized and measured based on a two-step analysis: i) a tax position must be more likely than not to be sustained based solely on its technical merits in order to be recognized; and ii) the benefit is measured at the largest dollar amount of that position that is more likely than not to be sustained upon settlement. The difference between a benefit not recognized in accordance with this analysis and the tax benefit claimed on a tax return is referred to as an unrecognized tax benefit. Stock repurchases Treasury shares are recorded at their reacquisition cost, as a reduction of stockholders’ equity in the consolidated statements of financial condition. When reissuing treasury shares for the granting of stock-based compensation awards, treasury stock is reduced by the cost allocated to such stock and additional paid-in capital is credited for gains and debited for losses when treasury stock is reissued at prices that differ from the reacquisition cost. Stock-based compensation Compensation cost is recognized in the financial statements for all share-based payment grants. The First BanCorp. Omnibus Incentive Plan, as amended (the “Omnibus Plan”) provides for equity-based and non-equity-based compensation incentives (the “awards”) through the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, other stock-based awards and cash-based awards. The compensation cost for an award, determined based on the estimate of the fair value at the grant date (considering forfeitures and any post-vesting restrictions), is recognized over the period during which an employee or director is required to provide services in exchange for an award, which is the vesting period, taking into account the retirement eligibility of the award. Stock-based compensation accounting guidance requires the Corporation to reverse compensation expense for any awards that are forfeited due to employee or director turnover. Changes in the estimated forfeiture rate may have a significant effect on stock-based compensation as the Corporation recognizes the effect of adjusting the rate for all expense amortization in the period in which the forfeiture estimate is changed. If the actual forfeiture rate is higher than the estimated forfeiture rate, an adjustment is made to increase the estimated forfeiture rate, which will decrease the expense recognized in the financial statements. If the actual forfeiture rate is lower than the estimated forfeiture rate, an adjustment is made to decrease the estimated forfeiture rate, which will increase the expense recognized in the financial statements. For additional information regarding the Corporation’s equity-based compensation and awards granted, see Note 14– “Stock-Based Compensation.”

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Comprehensive income (loss) Comprehensive income (loss) for First BanCorp. includes net income, as well as changes in unrealized gains (losses) on available- for-sale debt securities and change in unrecognized pension and post-retirement costs, net of estimated tax effects. Pension and other postretirement benefits The Corporation maintains two frozen qualified noncontributory defined benefit pension plans (the “Pension Plans”) (including a complementary postretirement benefits plan covering medical benefits and life insurance after retirement) that it assumed in the BSPR acquisition. Pension costs are computed on the basis of accepted actuarial methods and are charged to current operations. Net pension costs are based on various actuarial assumptions regarding future experience under the plan, which include costs for services rendered during the period, interest costs and return on plan assets, as well as deferral and amortization of certain items such as actuarial gains or losses. The funding policy is to contribute to the plan, as necessary, to provide for services to date and for those expected to be earned in the future. To the extent that these requirements are fully covered by assets in the plan, a contribution may not be made in a particular year. The cost of postretirement benefits, which is determined based on actuarial assumptions and estimates of the costs of providing these benefits in the future, is accrued during the years that the employee renders the required service. The guidance for compensation retirement benefits of ASC Topic 715, “Retirement Benefits,” requires the recognition of the funded status of each defined pension benefit plan, retiree health care plan and other postretirement benefit plans on the statements of financial condition. In addition, the Corporation maintains contributory retirement plans covering substantially all employees. Employer contributions to the plan are charged to current earnings as part of employees’ compensation and benefits expenses in the consolidated statements of income. Segment information The Corporation reports financial and descriptive information about its reportable segments. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Executive Officer in deciding how to allocate resources and assess performance. The Corporation’s CEO determined that the segregation that best fulfills the segment definition described above is by lines of business for its operations in Puerto Rico, the Corporation’s principal market, and by geographic areas for its operations outside of Puerto Rico. As of December 31, 2024 and 2023, the Corporation had the following six operating segments that are all reportable segments: Commercial and Corporate Banking; Mortgage Banking; Consumer (Retail) Banking; Treasury and Investments; United States Operations; and Virgin Islands Operations. The accounting policies for the reportable business segments are the same as those used in the preparation of the Consolidated Financial Statements with respect to activities specifically attributable to each business segment. However, management methodologies utilized in compiling segment financial information are highly subjective and, unlike financial accounting, are not based on authoritative guidance similar to GAAP. As a result, reported segment results are not necessarily comparable with similar information reported by other financial institutions. See Note 25 – “Segment Information” for additional information. See Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure” below for the impact associated with the adoption of this standard during the fourth quarter of 2024. Valuation of financial instruments The measurement of fair value is fundamental to the Corporation’s presentation of its financial condition and results of operations. The Corporation holds debt and equity securities, derivatives, and other financial instruments at fair value. The Corporation holds its investments and liabilities mainly to manage liquidity needs and interest rate risks. A meaningful part of the Corporation’s total assets is reflected at fair value on the Corporation’s financial statements. The FASB’s authoritative guidance for fair value measurement defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly

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Under the fair value accounting guidance, an entity has the irrevocable option to elect, on a contract-by-contract basis, to measure certain financial assets and liabilities at fair value at the inception of the contract and, thereafter, to reflect any changes in fair value in current earnings. The Corporation did not make any fair value option election as of December 31, 2024 or 2023. See Note 23 – “Fair Value” for additional information. Revenue from contract with customers See Note 24 – “Revenue from Contracts with Customers” for a detailed description of the Corporation’s policies on the recognition and presentation of revenues from contracts with customers, including the income recognition for the insurance agency commissions’ revenue. Earnings per common share Basic earnings per share is calculated by dividing net income attributable to common stockholders by the weighted-average number of common shares issued and outstanding. Net income attributable to common stockholders represents net income adjusted for any preferred stock dividends, if any, including any preferred stock dividends declared but not yet paid, and any cumulative preferred stock dividends related to the current dividend period that have not been declared as of the end of the period. Basic weighted-average common shares outstanding excludes unvested shares of restricted stock that do not contain non-forfeitable dividend rights. The computation of diluted earnings per share is similar to the computation of basic earnings per share except that the number of weighted- average common shares is increased to include the number of additional common shares that would have been outstanding if the dilutive common shares had been issued, referred to as potential common shares. Potential dilutive common shares consist of unvested shares of restricted stock that do not contain non-forfeitable dividend rights, warrants outstanding during the period, and common stock issued under the assumed exercise of stock options, if any, using the treasury stock method. This method assumes that the potential dilutive common shares are issued and outstanding and the proceeds from the exercise, in addition to the amount of compensation cost attributable to future services, are used to purchase common stock at the exercise date. The difference between the number of potential dilutive shares issued and the shares purchased is added as incremental shares to the actual number of shares outstanding to compute diluted earnings per share. Unvested shares of restricted stock, stock options, and warrants outstanding during the period, if any, that result in lower potential dilutive shares issued than shares purchased under the treasury stock method are not included in the computation of dilutive earnings per share since their inclusion would have an antidilutive effect on earnings per share. Potential dilutive common shares also include performance units that do not contain non-forfeitable dividend rights if the performance condition is met as of the end of the reporting period.

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Adoption of New Accounting Requirements Standard Description Effective Date Effect on the financial statements ASU 2023-07 - Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure, Issued November 2023 In November 2023, the FASB issued ASU 2023-07 to improve the disclosures about a public entity’s reportable segments. Among other things, the amendments in this ASU require disclosure on an interim and annual basis of the following: significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss; and an amount for other segment items (to reconcile segment revenues less significant expenses to the reported measure(s) of a segment’s profit or loss) by reportable segment and a description of its composition. This ASU also requires disclosure on an annual basis of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. In addition, this ASU requires interim disclosure of segment-related disclosures that were previously only required on an annual basis and permits disclosure of multiple measures of segment profit or loss, provided that disclosure of the measure that is closest to GAAP is also provided and certain other criteria are met. Management adopted the guidance during the fourth quarter of 2024. The ASU has been applied retrospectively. As part of the adoption of this ASU, the Corporation added the disclosure of significant segment expenses and the title and position of the CODM.

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Recently Issued Accounting Standards Not Yet Effective or Not Yet Adopted Standard Description Effective Date Effect on the financial statements ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220- 40): Disaggregation of Income Statement Expenses, Issued November 2024 In November 2024, the FASB issued ASU 2024-03, which requires disclosure in the notes to financial statements at each interim and annual reporting period, of specified information about certain costs and expenses in a tabular format, including but not limited to, employee compensation and intangible asset amortization; the inclusion of amounts already required under previous GAAP in the same disclosure as these disaggregation requirements; and a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. Effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted for annual financial statements not yet issued. The amendments in this ASU should be applied on a prospective basis. Retrospective application is permitted. The Corporation will be impacted by the standard and will disclose required information by the adoption date. ASU 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures, Issued December 2023 In December 2023, the FASB issued ASU 2023-09 to improve the annual income tax disclosures to, among other things, require disclosure of the following: eight prescribed categories in the tabular rate reconciliation (using both percentages and dollar amounts) with certain reconciling items at or above 5% further broken out by nature and/or jurisdiction; income taxes paid (net of refunds received) disaggregated by federal, state, and foreign taxes; the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5% of total income taxes paid (net of refunds received); income or loss from continuing operations before income tax expense or benefit disaggregated between domestic and foreign; and income tax expense or benefit from continuing operations disaggregated by federal, state, and foreign. Effective for fiscal years ending on December 31, 2025. Early adoption is permitted for annual financial statements not yet issued. The amendments in this ASU should be applied on a prospective basis. Retrospective application is permitted. The Corporation will be impacted by the standard and will disclose required information by the adoption date. The Corporation is reviewing its processes to ensure accurate data collection for disaggregation of income taxes by jurisdiction and other required disclosures. Preparatory steps will be taken to comply with the new disclosure requirements, ensuring timely and accurate reporting starting in 2025.

The Corporation does not expect to be impacted by the following ASUs issued during 2024 that are not yet effective or have not yet been adopted: ● ASU 2024-04, “Debt – Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments” ● 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”

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Money market investments are composed of time deposits, overnight deposits with other financial institutions, and other short-term investments with original maturities of three months or less. Money market investments were as follows as of the indicated dates:

As of December 31, 2024 2023 (Dollars in thousands) Time deposits with other financial institutions (1) $ 500 $ 300 Overnight deposits with other financial institutions (2) 200 439 Other short-term investments (3) 500 500 $ 1,200 $ 1,239 (1) Consists of time deposits segregated for compliance with the Puerto Rico International Banking Law. Interest rate of 1.05 % as of each of December 31, 2024 and 2023, respectively. (2) Weighted-average interest rate of 4.33 % and 5.33 % as of December 31, 2024 and 2023, respectively. (3) Weighted-average interest rate of 1.39 % and 2.47 % as of December 31, 2024 and 2023, respectively.

As of December 31, 2024, the Corporation had $ 0.1 million (2023 - $ 0.4 million) in money market investments pledged as collateral as part of margin calls associated to derivative contracts.

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NOTE 3 – DEBT SECURITIES Available-for-Sale Debt Securities The amortized cost, gross unrealized gains and losses, ACL, estimated fair value, and weighted-average yield of available-for-sale debt securities by contractual maturities as of December 31, 2024 and 2023 were as follows:

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 Collateralized mortgage obligations (“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.

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December 31, 2023 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 $ 80,314 $ - $ 2,144 $ - $ 78,170 0.66 After 1 to 5 years 60,239 - 3,016 - 57,223 0.75 U.S. GSEs’ obligations: Due within one year 542,847 - 15,832 - 527,015 0.77 After 1 to 5 years 1,899,620 49 135,347 - 1,764,322 0.86 After 5 to 10 years 8,850 - 687 - 8,163 2.64 After 10 years 8,891 8 2 - 8,897 5.49 Puerto Rico government obligation: After 10 years (3) 3,156 - 1,346 395 1,415 - United States and Puerto Rico government obligations 2,603,917 57 158,374 395 2,445,205 0.85 MBS: Residential MBS: FHLMC certificates: After 1 to 5 years 19,561 - 868 - 18,693 2.06 After 5 to 10 years 153,308 - 12,721 - 140,587 1.55 After 10 years 991,060 15 161,197 - 829,878 1.41 1,163,929 15 174,786 - 989,158 1.44 GNMA certificates: Due within one year 254 - 3 - 251 3.27 After 1 to 5 years 16,882 - 872 - 16,010 1.19 After 5 to 10 years 27,916 8 2,247 - 25,677 1.62 After 10 years 206,254 87 22,786 - 183,555 2.57 251,306 95 25,908 - 225,493 2.38 FNMA certificates: After 1 to 5 years 32,489 - 1,423 - 31,066 2.11 After 5 to 10 years 293,492 - 23,146 - 270,346 1.70 After 10 years 1,047,298 83 156,344 - 891,037 1.37 1,373,279 83 180,913 - 1,192,449 1.46 CMOs issued or guaranteed by the FHLMC, FNMA, and GNMA: After 10 years 273,539 - 52,263 - 221,276 1.54 Private label: After 10 years 7,086 - 2,185 116 4,785 7.66 Total Residential MBS 3,069,139 193 436,055 116 2,633,161 1.55 Commercial MBS: After 1 to 5 years 45,022 - 6,898 - 38,124 2.17 After 5 to 10 years 22,386 - 2,685 - 19,701 2.16 After 10 years 122,830 - 29,037 - 93,793 1.36 Total Commercial MBS 190,238 - 38,620 - 151,618 1.64 Total MBS 3,259,377 193 474,675 116 2,784,779 1.55 Total available-for-sale debt securities $ 5,863,294 $ 250 $ 633,049 $ 511 $ 5,229,984 1.24 (1) Excludes accrued interest receivable on available-for-sale debt securities that totaled $ 10.6 million as of December 31, 2023 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 $ 477.9 million (amortized cost - $ 527.2 million) that was pledged at the FHLB as collateral for borrowings and letters of credit as well as $ 2.8 billion (amortized cost - $ 3.2 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) During 2024, the Corporation purchased approximately $ 266.2 million of available-for-sale debt securities, mainly consisting of $ 224.5 million of residential MBS and $ 40.7 million of commercial 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 December 31, 2024 and 2023. The tables also include debt securities for which an ACL was recorded.

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. As of December 31, 2023 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 $ 2,544 $ 2 $ 2,428,784 $ 157,026 $ 2,431,328 $ 157,028 Puerto Rico government obligation - - 1,415 1,346 (1) 1,415 1,346 MBS: Residential MBS: FHLMC 9 - 988,092 174,786 988,101 174,786 GNMA 12,257 100 202,390 25,808 214,647 25,908 FNMA - - 1,183,275 180,913 1,183,275 180,913 CMOs issued or guaranteed by the FHLMC, FNMA, and GNMA - - 221,276 52,263 221,276 52,263 Private label - - 4,785 2,185 (1) 4,785 2,185 Commercial MBS 11,370 18 140,248 38,602 151,618 38,620 $ 26,180 $ 120 $ 5,170,265 $ 632,929 $ 5,196,445 $ 633,049 (1) Unrealized losses do not include the credit loss component recorded as part of the ACL. As of December 31, 2023, the PRHFA bond and private label MBS had an ACL of $ 0.4 million and $ 0.1 million, respectively.

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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 December 31, 2024, 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 December 31, 2024, 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 Puerto Rico government debt securities, 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 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 23 – “Fair Value ” for the significant assumptions used in the valuation of the private label MBS as of December 31, 2024 and 2023.

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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) The following tables present a roll-forward of the ACL on available-for-sale debt securities by major security type for the years ended December 31, 2024, 2023 and 2022:

Year Ended December 31, 2024 Private label MBS Puerto Rico Government Obligations Total (In thousands) Beginning balance $ 116 $ 395 $ 511 Provision for credit losses - (benefit) - ( 50 ) ( 50 ) Net recoveries 60 - 60 ACL on available-for-sale debt securities $ 176 $ 345 $ 521 Year Ended December 31, 2023 Private label MBS Puerto Rico Government Obligations Total (In thousands) Beginning balance $ 83 $ 375 $ 458 Provision for credit losses - expense - 20 20 Net recoveries 33 - 33 ACL on available-for-sale debt securities $ 116 $ 395 $ 511 Year Ended December 31, 2022 Private label MBS Puerto Rico Government Obligations Total (In thousands) Beginning balance $ 797 $ 308 $ 1,105 Provision for credit losses - (benefit) expense ( 501 ) 67 ( 434 ) Net charge-offs ( 213 ) - ( 213 ) ACL on available-for-sale debt securities $ 83 $ 375 $ 458

During 2024, the Corporation recognized $ 71.7 million of interest income on available-for-sale debt securities (2023 - $ 78.3 million; 2022 - $ 86.1 million), of which $ 36.2 million was exempt (2023 - $ 39.1 million; 2022 - $ 40.7 million). The exempt securities primarily relate to MBS and government obligations held by IBEs (as defined in the International Banking Entity Act of Puerto Rico), whose interest income and sales are exempt from Puerto Rico income taxation under that act.

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Held-to-Maturity Debt Securities The amortized cost, gross unrecognized gains and losses, estimated fair value, ACL, weighted-average yield and contractual maturities of held-to-maturity debt securities as of December 31, 2024 and 2023 were as follows:

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.

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December 31, 2023 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 $ 3,165 $ 8 $ 38 $ 3,135 $ 50 9.30 After 1 to 5 years 51,230 994 710 51,514 1,266 7.78 After 5 to 10 years 36,050 3,540 210 39,380 604 7.13 After 10 years 16,595 269 - 16,864 277 8.87 Total Puerto Rico municipal bonds 107,040 4,811 958 110,893 2,197 7.78 MBS: Residential MBS: FHLMC certificates: After 5 to 10 years 16,469 - 556 15,913 - 3.03 After 10 years 18,324 - 714 17,610 - 4.32 34,793 - 1,270 33,523 - 3.71 GNMA certificates: After 10 years 16,265 - 789 15,476 - 3.32 FNMA certificates: After 10 years 67,271 - 2,486 64,785 - 4.18 CMOs issued or guaranteed by FHLMC, FNMA, and GNMA: After 10 years 28,139 - 1,274 26,865 - 3.49 Total Residential MBS 146,468 - 5,819 140,649 - 3.84 Commercial MBS: After 1 to 5 years 9,444 - 297 9,147 - 3.48 After 10 years 91,226 - 5,783 85,443 - 3.15 Total Commercial MBS 100,670 - 6,080 94,590 - 3.18 Total MBS 247,138 - 11,899 235,239 - 3.57 Total held-to-maturity debt securities $ 354,178 $ 4,811 $ 12,857 $ 346,132 $ 2,197 4.84 (1) Excludes accrued interest receivable on held-to-maturity debt securities that totaled $ 4.8 million as of December 31, 2023 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 $ 126.6 million (fair value - $ 125.9 million) that serves as collateral for the uninsured portion of government deposits. The secured parties are not permitted to sell or repledge the collateral.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) 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 December 31, 2024 and 2023, including debt securities for which an ACL was recorded:

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 As of December 31, 2023 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 $ - $ - $ 34,682 $ 958 $ 34,682 $ 958 MBS: Residential MBS: FHLMC certificates - - 33,523 1,270 33,523 1,270 GNMA certificates - - 15,476 789 15,476 789 FNMA certificates - - 64,785 2,486 64,785 2,486 CMOs issued or guaranteed by FHLMC, FNMA, and GNMA - - 26,865 1,274 26,865 1,274 Commercial MBS - - 94,590 6,080 94,590 6,080 Total held-to-maturity debt securities $ - $ - $ 269,921 $ 12,857 $ 269,921 $ 12,857

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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.” 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 December 31, 2024. The ACL of Puerto Rico municipal bonds decreased to $ 0.8 million as of December 31, 2024, from $ 2.2 million as of December 31, 2023, mostly related to updated financial information of a bond issuer received during 2024. The following tables present the activity in the ACL for held-to-maturity debt securities by major security type for the years ended December 31, 2024, 2023 and 2022:

Puerto Rico Municipal Bonds Year Ended December 31, 2024 2023 2022 (In thousands) Beginning Balance $ 2,197 $ 8,286 $ 8,571 Provision for credit losses - (benefit) ( 1,395 ) ( 6,089 ) ( 285 ) ACL on held-to-maturity debt securities $ 802 $ 2,197 $ 8,286

Municipalities, which are covered instrumentalities under Puerto Rico Oversight, Management, and Economic Stability Act (“PROMESA”), may be affected by the negative economic and other effects resulting from expense, revenue, or cash management measures taken by the Puerto Rico government to address its fiscal situation, or measures included in its fiscal plan or fiscal plans of other government entities. Given the inherent uncertainties about the fiscal situation of the Puerto Rico central government and the measures taken, or to be taken, by other government entities in response to economic and fiscal challenges, the Corporation cannot be certain whether future charges to the ACL on these securities will be required. 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 December 31, 2024 and 2023, the Corporation had no outstanding held-to-maturity securities that were classified as cash and cash equivalents.

During 2024, the Corporation recognized $ 17.1 million of interest income on held-to-maturity debt securities (2023 - $ 20.9 million; 2022 - $ 15.5 million), of which $ 16.8 million was exempt (2023 - $ 20.5 million; 2022 - $ 15.4 million). The exempt securities relate to tax-exempt Puerto Rico municipal bonds and MBS held by IBEs (as defined in the International Banking Entity Act of Puerto Rico), whose interest income and sales are exempt from Puerto Rico income taxation under that act.

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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. The asset categories are defined below: Pass – Assets classified as Pass have a well-defined primary source of repayment, with no apparent risk, strong financial position, minimal operating risk, profitability, liquidity and strong capitalization and include assets categorized as Watch. Assets classified as Watch have acceptable business credit, but borrowers’ operations, cash flow or financial condition evidence more than average risk and requires additional level of supervision and attention from loan officers. Special Mention – Special Mention assets have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Corporation’s credit position at some future date. Special Mention assets are not adversely classified and do not expose the Corporation to sufficient risk to warrant adverse classification. Substandard – Substandard assets are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets classified as Substandard must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful – Doubtful classifications have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable, based on currently known facts, conditions and values. A Doubtful classification may be appropriate in cases where significant risk exposures are perceived, but loss cannot be determined because of specific reasonable pending factors, which may strengthen the credit in the near term. Loss – Assets classified as Loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this asset even though partial recovery may occur in the future. There is little or no prospect for near term improvement and no realistic strengthening action of significance pending. The Corporation periodically reviews its Puerto Rico municipal bonds to evaluate if they are properly classified, and to measure credit losses on these securities. The frequency of these reviews will depend on the amount of the aggregate outstanding debt, and the risk rating classification of the obligor. The 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 December 31, 2024 and 2023, 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 December 31, 2024 and 2023. A security is considered to be past due once it is 30 days contractually past due under the terms of the agreement.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) NOTE 4 – LOANS HELD FOR INVESTMENT The following table provides information about the loan portfolio held for investment by portfolio segment and disaggregated by geographic locations as of the indicated dates:

As of December 31, As of December 31, 2024 2023 (In thousands) Puerto Rico and Virgin Islands region: Residential mortgage loans, mainly secured by first mortgages $ 2,323,205 $ 2,356,006 Construction loans 184,427 115,401 Commercial mortgage loans 1,867,894 1,790,637 C&I loans 2,325,875 2,249,408 Consumer loans 3,750,205 3,651,770 Loans held for investment $ 10,451,606 $ 10,163,222 Florida region: Residential mortgage loans, mainly secured by first mortgages $ 505,226 $ 465,720 Construction loans 43,969 99,376 Commercial mortgage loans 698,090 526,446 C&I loans 1,040,163 924,824 Consumer loans 7,502 5,895 Loans held for investment $ 2,294,950 $ 2,022,261 Total: Residential mortgage loans, mainly secured by first mortgages $ 2,828,431 $ 2,821,726 Construction loans 228,396 214,777 Commercial mortgage loans 2,565,984 2,317,083 C&I loans (1) 3,366,038 3,174,232 Consumer loans 3,757,707 3,657,665 Loans held for investment (2) 12,746,556 12,185,483 ACL on loans and finance leases ( 243,942 ) ( 261,843 ) Loans held for investment, net $ 12,502,614 $ 11,923,640 (1) As of December 31, 2024 and 2023, includes $ 780.9 million and $ 787.5 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 $ 23.6 million and $ 24.7 million as of December 31, 2024 and 2023, respectively.

As of December 31, 2024 and 2023, the Corporation had net deferred origination costs on its loan portfolio amounting to $ 1.8 million and $ 6.1 million, respectively. The total loan portfolio is net of unearned income of $ 130.4 million and $ 132.6 million as of December 31, 2024 and 2023, respectively, of which $ 126.0 million and $ 128.0 million are related to finance leases as of December 31, 2024 and 2023, respectively. As of December 31, 2024, the Corporation was servicing residential mortgage loans owned by others in an aggregate amount of $ 3.7 billion (2023 — $ 3.8 billion), and commercial loan participations owned by others in an aggregate amount of $ 262.9 million as of December 31, 2024 (2023 — $ 230.5 million).

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 $ 5.4 billion and $ 4.6 billion as of December 31, 2024 and 2023, respectively. As of December 31, 2024 and 2023, loans pledged as collateral include $ 1.7 billion and $ 1.8 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, compared to $ 2.5 billion as of December 31, 2023; $ 163.5 million pledged to secure as collateral for the uninsured portion of government deposits, compared to $ 166.9 million as of December 31, 2023; and $ 123.0 million pledged to secure time deposits accounts, compared to $ 121.1 million as of December 31, 2023

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) 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 December 31, 2024 and 2023 are as follows:

As of December 31, 2024 Days Past Due and Accruing Current 30-59 60-89 90+ (1) (2) (3) Nonaccrual (4) Total loans held for investment Nonaccrual Loans with no ACL (5) (In thousands) Residential mortgage loans, mainly secured by first mortgages: FHA/VA government-guaranteed loans (1) (3) (6) $ 70,529 $ - $ 2,907 $ 18,816 $ - $ 92,252 $ - Conventional residential mortgage loans (2) (6) 2,666,959 - 29,867 7,404 31,949 2,736,179 1,773 Commercial loans: Construction loans 227,031 - - - 1,365 228,396 968 Commercial mortgage loans (2) (6) 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 $ 11,972 (1) 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. (2) Includes purchased credit deteriorated (“PCD”) loans previously accounted for under ASC Subtopic 310-30 for which the Corporation made the accounting policy election of maintaining pools of loans as “units of account” both at the time of adoption of CECL methodology on January 1, 2020 and on an ongoing basis for credit loss measurement. These loans will continue to be excluded from nonaccrual loan statistics as long as the Corporation can reasonably estimate the timing and amount of cash flows expected to be collected on the loan pools. The portion of such loans contractually past due 90 days or more, amounting to $ 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. (3) 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. (4) 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. (5) There were no nonaccrual loans with no ACL in the Florida region as of December 31, 2024. (6) 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.

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As of December 31, 2023 Days Past Due and Accruing Current 30-59 60-89 90+ (1) (2) (3) Nonaccrual (4) Total loans held for investment Nonaccrual Loans with no ACL (5) (In thousands) Residential mortgage loans, mainly secured by first mortgages: FHA/VA government-guaranteed loans (1) (3) (6) $ 68,332 $ - $ 2,592 $ 29,312 $ - $ 100,236 $ - Conventional residential mortgage loans (2) (6) 2,644,344 - 33,878 11,029 32,239 2,721,490 1,742 Commercial loans: Construction loans 210,911 - - 2,297 1,569 214,777 972 Commercial mortgage loans (2) (6) 2,303,753 17 - 1,108 12,205 2,317,083 2,536 C&I loans 3,148,254 1,130 1,143 8,455 15,250 3,174,232 1,687 Consumer loans: Auto loans 1,846,652 60,283 13,753 - 15,568 1,936,256 4 Finance leases 837,881 13,786 1,861 - 3,287 856,815 12 Personal loans 370,746 5,873 2,815 - 1,841 381,275 - Credit cards 313,360 5,012 3,589 7,251 - 329,212 - Other consumer loans 147,278 3,084 1,997 - 1,748 154,107 - Total loans held for investment $ 11,891,511 $ 89,185 $ 61,628 $ 59,452 $ 83,707 $ 12,185,483 $ 6,953 (1) 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 $ 15.4 million of residential mortgage loans guaranteed by the FHA that were over 15 months delinquent as of December 31, 2023. (2) Includes PCD loans previously accounted for under ASC Subtopic 310-30 for which the Corporation made the accounting policy election of maintaining pools of loans as “units of account” 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 $ 8.3 million as of December 31, 2023 ($ 7.4 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. (3) Include rebooked loans, which were previously pooled into GNMA securities, amounting to $ 7.9 million as of December 31, 2023. 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. (4) Nonaccrual loans in the Florida region amounted to $ 8.0 million as of December 31, 2023, of which $ 7.2 million were residential mortgage loans and $ 0.7 million were C&I loans. (5) There were no nonaccrual loans with no ACL in the Florida region as of December 31, 2023. (6) 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, 2023 amounted to $ 8.2 million, $ 69.9 million, and $ 1.1 million, respectively.

When a loan is placed in nonaccrual status, any accrued but uncollected interest income is reversed and charged against interest income and the amortization of any net deferred fees is suspended. The amount of accrued interest reversed against interest income totaled $ 3.1 million, $ 2.7 million, and $ 1.7 million for the years ended December 31, 2024, 2023, and 2022, respectively. For each of the years ended December 31, 2024 and 2023, interest income recognized on nonaccrual loans amounted to $ 1.8 million, and $ 1.5 million for the year ended December 31, 2022. As of December 31, 2024, the recorded investment on residential mortgage loans collateralized by residential real estate property that were in the process of foreclosure amounted to $ 30.0 million, including $ 10.4 million of FHA/VA government-guaranteed mortgage loans, and $ 4.4 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.” For residential mortgage and consumer loans, the Corporation evaluates credit quality based on its interest accrual status.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Based on the most recent analysis performed, the amortized cost of commercial and construction loans by portfolio classes and by origination year based on the internal credit-risk category as of December 31, 2024 and 2023, and the gross charge-offs for the years ended December 31, 2024 and 2023 by portfolio classes and by origination year were as follows:

As of December 31,2024 Puerto Rico and Virgin Islands Regions Term Loans Amortized Cost Basis by Origination Year (1) 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Total (In thousands) CONSTRUCTION Risk Ratings: Pass $ 55,802 $ 101,104 $ 9,771 $ 9,877 $ - $ 3,201 $ - $ 179,755 Criticized: Special Mention - - - - - - - - Substandard - 3,307 - - - 1,365 - 4,672 Doubtful - - - - - - - - Loss - - - - - - - - Total construction loans $ 55,802 $ 104,411 $ 9,771 $ 9,877 $ - $ 4,566 $ - $ 184,427 Charge-offs on construction loans $ - $ - $ - $ - $ - $ - $ - $ - COMMERCIAL MORTGAGE Risk Ratings: Pass $ 325,359 $ 169,370 $ 424,613 $ 139,839 $ 313,431 $ 426,946 $ 5,318 $ 1,804,876 Criticized: Special Mention - 3,710 3,158 - 30,167 - - 37,035 Substandard - - - - - 25,983 - 25,983 Doubtful - - - - - - - - Loss - - - - - - - - Total commercial mortgage loans $ 325,359 $ 173,080 $ 427,771 $ 139,839 $ 343,598 $ 452,929 $ 5,318 $ 1,867,894 Charge-offs on commercial mortgage loans $ - $ - $ - $ - $ - $ - $ - $ - C&I Risk Ratings: Pass $ 238,283 $ 375,698 $ 277,074 $ 125,063 $ 136,222 $ 297,364 $ 799,976 $ 2,249,680 Criticized: Special Mention - 2,308 - 10,005 - 399 32,188 44,900 Substandard 148 - 3,139 14,119 230 6,445 7,214 31,295 Doubtful - - - - - - - - Loss - - - - - - - - Total C&I loans $ 238,431 $ 378,006 $ 280,213 $ 149,187 $ 136,452 $ 304,208 $ 839,378 $ 2,325,875 Charge-offs on C&I loans $ - $ 606 $ 304 $ - $ - $ 1,261 $ 264 $ 2,435 (1) Excludes accrued interest receivable.

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As of December 31,2024 Term Loans Florida Region Amortized Cost Basis by Origination Year (1) 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Total (In thousands) CONSTRUCTION Risk Ratings: Pass $ 13,112 $ 15,331 $ - $ - $ - $ - $ 15,526 $ 43,969 Criticized: Special Mention - - - - - - - - Substandard - - - - - - - - Doubtful - - - - - - - - Loss - - - - - - - - Total construction loans $ 13,112 $ 15,331 $ - $ - $ - $ - $ 15,526 $ 43,969 Charge-offs on construction loans $ - $ - $ - $ - $ - $ - $ - $ - COMMERCIAL MORTGAGE Risk Ratings: Pass $ 80,981 $ 28,684 $ 227,896 $ 104,931 $ 38,570 $ 159,595 $ 32,079 $ 672,736 Criticized: Special Mention - - - - - - - - Substandard - - 12,183 - 993 12,178 - 25,354 Doubtful - - - - - - - - Loss - - - - - - - - Total commercial mortgage loans $ 80,981 $ 28,684 $ 240,079 $ 104,931 $ 39,563 $ 171,773 $ 32,079 $ 698,090 Charge-offs on commercial mortgage loans $ - $ - $ - $ - $ - $ - $ - $ - C&I Risk Ratings: Pass $ 247,268 $ 170,620 $ 188,162 $ 136,625 $ 23,563 $ 116,814 $ 146,048 $ 1,029,100 Criticized: Special Mention - - - - - 11,063 - 11,063 Substandard - - - - - - - - Doubtful - - - - - - - - Loss - - - - - - - - Total C&I loans $ 247,268 $ 170,620 $ 188,162 $ 136,625 $ 23,563 $ 127,877 $ 146,048 $ 1,040,163 Charge-offs on C&I loans $ - $ - $ - $ - $ - $ 48 $ 259 $ 307 (1) Excludes accrued interest receivable.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

As of December 31,2024 Term Loans Total Amortized Cost Basis by Origination Year (1) 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Total (In thousands) CONSTRUCTION Risk Ratings: Pass $ 68,914 $ 116,435 $ 9,771 $ 9,877 $ - $ 3,201 $ 15,526 $ 223,724 Criticized: Special Mention - - - - - - - - Substandard - 3,307 - - - 1,365 - 4,672 Doubtful - - - - - - - - Loss - - - - - - - - Total construction loans $ 68,914 $ 119,742 $ 9,771 $ 9,877 $ - $ 4,566 $ 15,526 $ 228,396 Charge-offs on construction loans $ - $ - $ - $ - $ - $ - $ - $ - COMMERCIAL MORTGAGE Risk Ratings: Pass $ 406,340 $ 198,054 $ 652,509 $ 244,770 $ 352,001 $ 586,541 $ 37,397 $ 2,477,612 Criticized: Special Mention - 3,710 3,158 - 30,167 - - 37,035 Substandard - - 12,183 - 993 38,161 - 51,337 Doubtful - - - - - - - - Loss - - - - - - - - Total commercial mortgage loans $ 406,340 $ 201,764 $ 667,850 $ 244,770 $ 383,161 $ 624,702 $ 37,397 $ 2,565,984 Charge-offs on commercial mortgage loans $ - $ - $ - $ - $ - $ - $ - $ - C&I Risk Ratings: Pass $ 485,551 $ 546,318 $ 465,236 $ 261,688 $ 159,785 $ 414,178 $ 946,024 $ 3,278,780 Criticized: Special Mention - 2,308 - 10,005 - 11,462 32,188 55,963 Substandard 148 - 3,139 14,119 230 6,445 7,214 31,295 Doubtful - - - - - - - - Loss - - - - - - - - Total C&I loans $ 485,699 $ 548,626 $ 468,375 $ 285,812 $ 160,015 $ 432,085 $ 985,426 $ 3,366,038 Charge-offs on C&I loans $ - $ 606 $ 304 $ - $ - $ 1,309 $ 523 $ 2,742 (1) Excludes accrued interest receivable.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

As of December 31, 2023 Puerto Rico and Virgin Islands Regions Term Loans Amortized Cost Basis by Origination Year (1) 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Total (In thousands) CONSTRUCTION Risk Ratings: Pass $ 52,675 $ 40,825 $ 15,936 $ - $ - $ 3,734 $ - $ 113,170 Criticized: Special Mention - - - - - - - - Substandard - - - - - 2,231 - 2,231 Doubtful - - - - - - - - Loss - - - - - - - - Total construction loans $ 52,675 $ 40,825 $ 15,936 $ - $ - $ 5,965 $ - $ 115,401 Charge-offs on construction loans $ - $ - $ - $ - $ - $ 62 $ - $ 62 COMMERCIAL MORTGAGE Risk Ratings: Pass $ 176,519 $ 381,695 $ 135,163 $ 319,111 $ 276,078 $ 326,420 $ 3,418 $ 1,618,404 Criticized: Special Mention - 4,394 - 30,169 - 112,063 - 146,626 Substandard - 124 - - - 25,483 - 25,607 Doubtful - - - - - - - - Loss - - - - - - - - Total commercial mortgage loans $ 176,519 $ 386,213 $ 135,163 $ 349,280 $ 276,078 $ 463,966 $ 3,418 $ 1,790,637 Charge-offs on commercial mortgage loans $ - $ - $ - $ - $ - $ 1,133 $ - $ 1,133 C&I Risk Ratings: Pass $ 410,721 $ 298,285 $ 158,636 $ 155,984 $ 249,481 $ 171,586 $ 729,246 $ 2,173,939 Criticized: Special Mention 542 - 578 - 476 2,447 36,333 40,376 Substandard 1 - 3,848 599 12,844 16,477 1,324 35,093 Doubtful - - - - - - - - Loss - - - - - - - - Total C&I loans $ 411,264 $ 298,285 $ 163,062 $ 156,583 $ 262,801 $ 190,510 $ 766,903 $ 2,249,408 Charge-offs on C&I loans $ - $ - $ - $ - $ - $ 218 $ 140 $ 358 (1) Excludes accrued interest receivable.

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As of December 31, 2023 Term Loans Florida Region Amortized Cost Basis by Origination Year (1) 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Total (In thousands) CONSTRUCTION Risk Ratings: Pass $ 995 $ 57,712 $ 38,289 $ - $ - $ - $ 2,380 $ 99,376 Criticized: Special Mention - - - - - - - - Substandard - - - - - - - - Doubtful - - - - - - - - Loss - - - - - - - - Total construction loans $ 995 $ 57,712 $ 38,289 $ - $ - $ - $ 2,380 $ 99,376 Charge-offs on construction loans $ - $ - $ - $ - $ - $ - $ - $ - COMMERCIAL MORTGAGE Risk Ratings: Pass $ 28,814 $ 186,098 $ 63,561 $ 39,844 $ 63,332 $ 119,460 $ 24,344 $ 525,453 Criticized: Special Mention - - - - - - - - Substandard - - - 993 - - - 993 Doubtful - - - - - - - - Loss - - - - - - - - Total commercial mortgage loans $ 28,814 $ 186,098 $ 63,561 $ 40,837 $ 63,332 $ 119,460 $ 24,344 $ 526,446 Charge-offs on commercial mortgage loans $ - $ - $ - $ - $ - $ - $ - $ - C&I Risk Ratings: Pass $ 139,800 $ 237,189 $ 166,998 $ 47,394 $ 109,123 $ 48,106 $ 130,585 $ 879,195 Criticized: Special Mention - - 19,485 - 11,725 10,836 - 42,046 Substandard - - - 252 191 3,140 - 3,583 Doubtful - - - - - - - - Loss - - - - - - - - Total C&I loans $ 139,800 $ 237,189 $ 186,483 $ 47,646 $ 121,039 $ 62,082 $ 130,585 $ 924,824 Charge-offs on C&I loans $ - $ - $ - $ 376 $ - $ 6,202 $ - $ 6,578 (1) Excludes accrued interest receivable.

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As of December 31, 2023 Term Loans Total Amortized Cost Basis by Origination Year (1) 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Total (In thousands) CONSTRUCTION Risk Ratings: Pass $ 53,670 $ 98,537 $ 54,225 $ - $ - $ 3,734 $ 2,380 $ 212,546 Criticized: Special Mention - - - - - - - - Substandard - - - - - 2,231 - 2,231 Doubtful - - - - - - - - Loss - - - - - - - - Total construction loans $ 53,670 $ 98,537 $ 54,225 $ - $ - $ 5,965 $ 2,380 $ 214,777 Charge-offs on construction loans $ - $ - $ - $ - $ - $ 62 $ - $ 62 COMMERCIAL MORTGAGE Risk Ratings: Pass $ 205,333 $ 567,793 $ 198,724 $ 358,955 $ 339,410 $ 445,880 $ 27,762 $ 2,143,857 Criticized: Special Mention - 4,394 - 30,169 - 112,063 - 146,626 Substandard - 124 - 993 - 25,483 - 26,600 Doubtful - - - - - - - - Loss - - - - - - - - Total commercial mortgage loans $ 205,333 $ 572,311 $ 198,724 $ 390,117 $ 339,410 $ 583,426 $ 27,762 $ 2,317,083 Charge-offs on commercial mortgage loans $ - $ - $ - $ - $ - $ 1,133 $ - $ 1,133 C&I Risk Ratings: Pass $ 550,521 $ 535,474 $ 325,634 $ 203,378 $ 358,604 $ 219,692 $ 859,831 $ 3,053,134 Criticized: Special Mention 542 - 20,063 - 12,201 13,283 36,333 82,422 Substandard 1 - 3,848 851 13,035 19,617 1,324 38,676 Doubtful - - - - - - - - Loss - - - - - - - - Total C&I loans $ 551,064 $ 535,474 $ 349,545 $ 204,229 $ 383,840 $ 252,592 $ 897,488 $ 3,174,232 Charge-offs on C&I loans $ - $ - $ - $ 376 $ - $ 6,420 $ 140 $ 6,936 (1) Excludes accrued interest receivable.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) The following tables present the amortized cost of residential mortgage loans by portfolio classes and by origination year based on accrual status as of December 31, 2024 and 2023, and the gross charge-offs for the years ended December 31, 2024 and 2023 by origination year:

As of December 31,2024 Term Loans Amortized Cost Basis by Origination Year (1) 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Total (In thousands) Puerto Rico and Virgin Islands Regions: FHA/VA government-guaranteed loans Accrual Status: Performing $ - $ 1,146 $ 1,143 $ 927 $ 640 $ 87,268 $ - $ 91,124 Non-Performing - - - - - - - - Total FHA/VA government-guaranteed loans $ - $ 1,146 $ 1,143 $ 927 $ 640 $ 87,268 $ - $ 91,124 Conventional residential mortgage loans Accrual Status: Performing $ 188,865 $ 165,191 $ 151,553 $ 62,795 $ 27,078 $ 1,613,190 $ - $ 2,208,672 Non-Performing - - 68 - - 23,341 - 23,409 Total conventional residential mortgage loans $ 188,865 $ 165,191 $ 151,621 $ 62,795 $ 27,078 $ 1,636,531 $ - $ 2,232,081 Total Accrual Status: Performing $ 188,865 $ 166,337 $ 152,696 $ 63,722 $ 27,718 $ 1,700,458 $ - $ 2,299,796 Non-Performing - - 68 - - 23,341 - 23,409 Total residential mortgage loans $ 188,865 $ 166,337 $ 152,764 $ 63,722 $ 27,718 $ 1,723,799 $ - $ 2,323,205 Charge-offs on residential mortgage loans $ - $ 4 $ - $ - $ 9 $ 1,958 $ - $ 1,971 (1) Excludes accrued interest receivable.

As of December 31,2024 Term Loans Amortized Cost Basis by Origination Year (1) 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Total (In thousands) Florida Region: FHA/VA government-guaranteed loans Accrual Status: Performing $ - $ - $ - $ - $ - $ 1,128 $ - $ 1,128 Non-Performing - - - - - - - - Total FHA/VA government-guaranteed loans $ - $ - $ - $ - $ - $ 1,128 $ - $ 1,128 Conventional residential mortgage loans Accrual Status: Performing $ 89,474 $ 86,241 $ 69,077 $ 41,583 $ 27,147 $ 182,036 $ - $ 495,558 Non-Performing - - 1,233 - - 7,307 - 8,540 Total conventional residential mortgage loans $ 89,474 $ 86,241 $ 70,310 $ 41,583 $ 27,147 $ 189,343 $ - $ 504,098 Total Accrual Status: Performing $ 89,474 $ 86,241 $ 69,077 $ 41,583 $ 27,147 $ 183,164 $ - $ 496,686 Non-Performing - - 1,233 - - 7,307 - 8,540 Total residential mortgage loans $ 89,474 $ 86,241 $ 70,310 $ 41,583 $ 27,147 $ 190,471 $ - $ 505,226 Charge-offs on residential mortgage loans $ - $ - $ - $ - $ - $ - $ - $ - (1) Excludes accrued interest receivable.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

As of December 31,2024 Term Loans Amortized Cost Basis by Origination Year (1) 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Total (In thousands) Total: FHA/VA government-guaranteed loans Accrual Status: Performing $ - $ 1,146 $ 1,143 $ 927 $ 640 $ 88,396 $ - $ 92,252 Non-Performing - - - - - - - - Total FHA/VA government-guaranteed loans $ - $ 1,146 $ 1,143 $ 927 $ 640 $ 88,396 $ - $ 92,252 Conventional residential mortgage loans Accrual Status: Performing $ 278,339 $ 251,432 $ 220,630 $ 104,378 $ 54,225 $ 1,795,226 $ - $ 2,704,230 Non-Performing - - 1,301 - - 30,648 - 31,949 Total conventional residential mortgage loans $ 278,339 $ 251,432 $ 221,931 $ 104,378 $ 54,225 $ 1,825,874 $ - $ 2,736,179 Total Accrual Status: Performing $ 278,339 $ 252,578 $ 221,773 $ 105,305 $ 54,865 $ 1,883,622 $ - $ 2,796,482 Non-Performing - - 1,301 - - 30,648 - 31,949 Total residential mortgage loans $ 278,339 $ 252,578 $ 223,074 $ 105,305 $ 54,865 $ 1,914,270 $ - $ 2,828,431 Charge-offs on residential mortgage loans $ - $ 4 $ - $ - $ 9 $ 1,958 $ - $ 1,971 (1) Excludes accrued interest receivable.

As of December 31, 2023 Term Loans Amortized Cost Basis by Origination Year (1) 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Total (In thousands) Puerto Rico and Virgin Islands Regions: FHA/VA government-guaranteed loans Accrual Status: Performing $ 378 $ 681 $ 942 $ 525 $ 1,468 $ 95,299 $ - $ 99,293 Non-Performing - - - - - - - - Total FHA/VA government-guaranteed loans $ 378 $ 681 $ 942 $ 525 $ 1,468 $ 95,299 $ - $ 99,293 Conventional residential mortgage loans Accrual Status: Performing $ 173,086 $ 164,895 $ 69,253 $ 29,558 $ 44,289 $ 1,750,620 $ - $ 2,231,701 Non-Performing - 69 35 - 173 24,735 - 25,012 Total conventional residential mortgage loans $ 173,086 $ 164,964 $ 69,288 $ 29,558 $ 44,462 $ 1,775,355 $ - $ 2,256,713 Total Accrual Status: Performing $ 173,464 $ 165,576 $ 70,195 $ 30,083 $ 45,757 $ 1,845,919 $ - $ 2,330,994 Non-Performing - 69 35 - 173 24,735 - 25,012 Total residential mortgage loans $ 173,464 $ 165,645 $ 70,230 $ 30,083 $ 45,930 $ 1,870,654 $ - $ 2,356,006 Charge-offs on residential mortgage loans $ - $ 2 $ - $ 3 $ 12 $ 3,222 $ - $ 3,239 (1) Excludes accrued interest receivable.

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As of December 31, 2023 Term Loans Amortized Cost Basis by Origination Year (1) 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Total (In thousands) Florida Region: FHA/VA government-guaranteed loans Accrual Status: Performing $ - $ - $ - $ - $ - $ 943 $ - $ 943 Non-Performing - - - - - - - - Total FHA/VA government-guaranteed loans $ - $ - $ - $ - $ - $ 943 $ - $ 943 Conventional residential mortgage loans Accrual Status: Performing $ 90,018 $ 77,960 $ 45,781 $ 29,166 $ 26,903 $ 187,722 $ - $ 457,550 Non-Performing - 16 - - 257 6,954 - 7,227 Total conventional residential mortgage loans $ 90,018 $ 77,976 $ 45,781 $ 29,166 $ 27,160 $ 194,676 $ - $ 464,777 Total Accrual Status: Performing $ 90,018 $ 77,960 $ 45,781 $ 29,166 $ 26,903 $ 188,665 $ - $ 458,493 Non-Performing - 16 - - 257 6,954 - 7,227 Total residential mortgage loans $ 90,018 $ 77,976 $ 45,781 $ 29,166 $ 27,160 $ 195,619 $ - $ 465,720 Charge-offs on residential mortgage loans $ - $ - $ - $ - $ - $ 6 $ - $ 6 (1) Excludes accrued interest receivable.

As of December 31, 2023 Term Loans Amortized Cost Basis by Origination Year (1) 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Total (In thousands) Total: FHA/VA government-guaranteed loans Accrual Status: Performing $ 378 $ 681 $ 942 $ 525 $ 1,468 $ 96,242 $ - $ 100,236 Non-Performing - - - - - - - - Total FHA/VA government-guaranteed loans $ 378 $ 681 $ 942 $ 525 $ 1,468 $ 96,242 $ - $ 100,236 Conventional residential mortgage loans Accrual Status: Performing $ 263,104 $ 242,855 $ 115,034 $ 58,724 $ 71,192 $ 1,938,342 $ - $ 2,689,251 Non-Performing - 85 35 - 430 31,689 - 32,239 Total conventional residential mortgage loans $ 263,104 $ 242,940 $ 115,069 $ 58,724 $ 71,622 $ 1,970,031 $ - $ 2,721,490 Total Accrual Status: Performing $ 263,482 $ 243,536 $ 115,976 $ 59,249 $ 72,660 $ 2,034,584 $ - $ 2,789,487 Non-Performing - 85 35 - 430 31,689 - 32,239 Total residential mortgage loans $ 263,482 $ 243,621 $ 116,011 $ 59,249 $ 73,090 $ 2,066,273 $ - $ 2,821,726 Charge-offs on residential mortgage loans $ - $ 2 $ - $ 3 $ 12 $ 3,228 $ - $ 3,245 (1) Excludes accrued interest receivable.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) The following tables present the amortized cost of consumer loans by portfolio classes and by origination year based on accrual status as of December 31, 2024 and 2023, and the gross charge-offs for the years ended December 31, 2024 and 2023 by portfolio classes and by origination year:

As of December 31, 2024 Term Loans Amortized Cost Basis by Origination Year (1) 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Total (In thousands) Puerto Rico and Virgin Islands Regions: Auto loans Accrual Status: Performing $ 630,491 $ 505,173 $ 399,840 $ 271,258 $ 115,246 $ 88,682 $ - $ 2,010,690 Non-Performing 1,412 3,794 3,182 2,810 1,227 2,870 - 15,295 Total auto loans $ 631,903 $ 508,967 $ 403,022 $ 274,068 $ 116,473 $ 91,552 $ - $ 2,025,985 Charge-offs on auto loans $ 1,711 $ 10,903 $ 10,338 $ 5,571 $ 1,872 $ 3,409 $ - $ 33,804 Finance leases Accrual Status: Performing $ 252,402 $ 266,188 $ 194,334 $ 112,417 $ 44,157 $ 26,136 $ - $ 895,634 Non-Performing 260 834 1,155 525 289 749 - 3,812 Total finance leases $ 252,662 $ 267,022 $ 195,489 $ 112,942 $ 44,446 $ 26,885 $ - $ 899,446 Charge-offs on finance leases $ 171 $ 2,628 $ 3,278 $ 1,420 $ 488 $ 1,147 $ - $ 9,132 Personal loans Accrual Status: Performing $ 127,284 $ 115,428 $ 73,254 $ 17,562 $ 8,359 $ 16,146 $ - $ 358,033 Non-Performing 173 924 593 193 40 213 - 2,136 Total personal loans $ 127,457 $ 116,352 $ 73,847 $ 17,755 $ 8,399 $ 16,359 $ - $ 360,169 Charge-offs on personal loans $ 729 $ 8,217 $ 9,503 $ 2,114 $ 667 $ 1,876 $ - $ 23,106 Credit cards Accrual Status: Performing $ - $ - $ - $ - $ - $ - $ 321,014 $ 321,014 Non-Performing - - - - - - - - Total credit cards $ - $ - $ - $ - $ - $ - $ 321,014 $ 321,014 Charge-offs on credit cards $ - $ - $ - $ - $ - $ - $ 24,531 $ 24,531 Other consumer loans Accrual Status: Performing $ 67,473 $ 36,941 $ 16,902 $ 4,940 $ 3,627 $ 3,587 $ 8,621 $ 142,091 Non-Performing 518 370 214 58 11 166 163 1,500 Total other consumer loans $ 67,991 $ 37,311 $ 17,116 $ 4,998 $ 3,638 $ 3,753 $ 8,784 $ 143,591 Charge-offs on other consumer loans $ 1,754 $ 9,473 $ 4,648 $ 1,120 $ 278 $ 569 $ 623 $ 18,465 Total Accrual Status: Performing $ 1,077,650 $ 923,730 $ 684,330 $ 406,177 $ 171,389 $ 134,551 $ 329,635 $ 3,727,462 Non-Performing 2,363 5,922 5,144 3,586 1,567 3,998 163 22,743 Total consumer loans $ 1,080,013 $ 929,652 $ 689,474 $ 409,763 $ 172,956 $ 138,549 $ 329,798 $ 3,750,205 Charge-offs on total consumer loans $ 4,365 $ 31,221 $ 27,767 $ 10,225 $ 3,305 $ 7,001 $ 25,154 $ 109,038 (1) Excludes accrued interest receivable.

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As of December 31, 2024 Term Loans Amortized Cost Basis by Origination Year (1) 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Total (In thousands) Florida Region: Auto loans Accrual Status: Performing $ - $ - $ - $ - $ - $ 183 $ - $ 183 Non-Performing - - - - - 10 - 10 Total auto loans $ - $ - $ - $ - $ - $ 193 $ - $ 193 Charge-offs on auto loans $ - $ - $ - $ - $ - $ 77 $ - $ 77 Finance leases Accrual Status: Performing $ - $ - $ - $ - $ - $ - $ - $ - Non-Performing - - - - - - - - Total finance leases $ - $ - $ - $ - $ - $ - $ - $ - Charge-offs on finance leases $ - $ - $ - $ - $ - $ - $ - $ - Personal loans Accrual Status: Performing $ 1,693 $ 46 $ - $ - $ - $ - $ - $ 1,739 Non-Performing - - - - - - - - Total personal loans $ 1,693 $ 46 $ - $ - $ - $ - $ - $ 1,739 Charge-offs on personal loans $ - $ - $ - $ - $ - $ - $ - $ - Credit cards Accrual Status: Performing $ - $ - $ - $ - $ - $ - $ - $ - Non-Performing - - - - - - - - Total credit cards $ - $ - $ - $ - $ - $ - $ - $ - Charge-offs on credit cards $ - $ - $ - $ - $ - $ - $ - $ - Other consumer loans Accrual Status: Performing $ 1,186 $ 52 $ - $ 215 $ 314 $ 1,891 $ 1,877 $ 5,535 Non-Performing - - - - - 16 19 35 Total other consumer loans $ 1,186 $ 52 $ - $ 215 $ 314 $ 1,907 $ 1,896 $ 5,570 Charge-offs on other consumer loans $ - $ - $ - $ - $ - $ - $ - $ - Total Accrual Status: Performing $ 2,879 $ 98 $ - $ 215 $ 314 $ 2,074 $ 1,877 $ 7,457 Non-Performing - - - - - 26 19 45 Total consumer loans $ 2,879 $ 98 $ - $ 215 $ 314 $ 2,100 $ 1,896 $ 7,502 Charge-offs on total consumer loans $ - $ - $ - $ - $ - $ 77 $ - $ 77 (1) Excludes accrued interest receivable.

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As of December 31, 2024 Term Loans Amortized Cost Basis by Origination Year (1) 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Total (In thousands) Total: Auto loans Accrual Status: Performing $ 630,491 $ 505,173 $ 399,840 $ 271,258 $ 115,246 $ 88,865 $ - $ 2,010,873 Non-Performing 1,412 3,794 3,182 2,810 1,227 2,880 - 15,305 Total auto loans $ 631,903 $ 508,967 $ 403,022 $ 274,068 $ 116,473 $ 91,745 $ - $ 2,026,178 Charge-offs on auto loans $ 1,711 $ 10,903 $ 10,338 $ 5,571 $ 1,872 $ 3,486 $ - $ 33,881 Finance leases Accrual Status: Performing $ 252,402 $ 266,188 $ 194,334 $ 112,417 $ 44,157 $ 26,136 $ - $ 895,634 Non-Performing 260 834 1,155 525 289 749 - 3,812 Total finance leases $ 252,662 $ 267,022 $ 195,489 $ 112,942 $ 44,446 $ 26,885 $ - $ 899,446 Charge-offs on finance leases $ 171 $ 2,628 $ 3,278 $ 1,420 $ 488 $ 1,147 $ - $ 9,132 Personal loans Accrual Status: Performing $ 128,977 $ 115,474 $ 73,254 $ 17,562 $ 8,359 $ 16,146 $ - $ 359,772 Non-Performing 173 924 593 193 40 213 - 2,136 Total personal loans $ 129,150 $ 116,398 $ 73,847 $ 17,755 $ 8,399 $ 16,359 $ - $ 361,908 Charge-offs on personal loans $ 729 $ 8,217 $ 9,503 $ 2,114 $ 667 $ 1,876 $ - $ 23,106 Credit cards Accrual Status: Performing $ - $ - $ - $ - $ - $ - $ 321,014 $ 321,014 Non-Performing - - - - - - - - Total credit cards $ - $ - $ - $ - $ - $ - $ 321,014 $ 321,014 Charge-offs on credit cards $ - $ - $ - $ - $ - $ - $ 24,531 $ 24,531 Other consumer loans Accrual Status: Performing $ 68,659 $ 36,993 $ 16,902 $ 5,155 $ 3,941 $ 5,478 $ 10,498 $ 147,626 Non-Performing 518 370 214 58 11 182 182 1,535 Total other consumer loans $ 69,177 $ 37,363 $ 17,116 $ 5,213 $ 3,952 $ 5,660 $ 10,680 $ 149,161 Charge-offs on other consumer loans $ 1,754 $ 9,473 $ 4,648 $ 1,120 $ 278 $ 569 $ 623 $ 18,465 Total Accrual Status: Performing $ 1,080,529 $ 923,828 $ 684,330 $ 406,392 $ 171,703 $ 136,625 $ 331,512 $ 3,734,919 Non-Performing 2,363 5,922 5,144 3,586 1,567 4,024 182 22,788 Total consumer loans $ 1,082,892 $ 929,750 $ 689,474 $ 409,978 $ 173,270 $ 140,649 $ 331,694 $ 3,757,707 Charge-offs on total consumer loans $ 4,365 $ 31,221 $ 27,767 $ 10,225 $ 3,305 $ 7,078 $ 25,154 $ 109,115 (1) Excludes accrued interest receivable.

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As of December 31, 2023 Term Loans Amortized Cost Basis by Origination Year (1) 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Total (In thousands) Puerto Rico and Virgin Islands Regions: Auto loans Accrual Status: Performing $ 630,507 $ 532,854 $ 384,103 $ 178,566 $ 131,913 $ 61,640 $ - $ 1,919,583 Non-Performing 2,474 4,031 3,103 1,426 2,610 1,912 - 15,556 Total auto loans $ 632,981 $ 536,885 $ 387,206 $ 179,992 $ 134,523 $ 63,552 $ - $ 1,935,139 Charge-offs on auto loans $ 1,969 $ 8,029 $ 4,688 $ 1,854 $ 2,413 $ 1,665 $ - $ 20,618 Finance leases Accrual Status: Performing $ 311,620 $ 246,085 $ 152,028 $ 64,930 $ 54,207 $ 24,658 $ - $ 853,528 Non-Performing 309 1,188 663 351 191 585 - 3,287 Total finance leases $ 311,929 $ 247,273 $ 152,691 $ 65,281 $ 54,398 $ 25,243 $ - $ 856,815 Charge-offs on finance leases $ 473 $ 1,889 $ 1,162 $ 557 $ 593 $ 725 $ - $ 5,399 Personal loans Accrual Status: Performing $ 169,905 $ 118,433 $ 32,104 $ 16,282 $ 28,224 $ 14,213 $ - $ 379,161 Non-Performing 190 1,078 207 106 145 115 - 1,841 Total personal loans $ 170,095 $ 119,511 $ 32,311 $ 16,388 $ 28,369 $ 14,328 $ - $ 381,002 Charge-offs on personal loans $ 1,118 $ 9,028 $ 2,881 $ 1,191 $ 2,317 $ 1,284 $ - $ 17,819 Credit cards Accrual Status: Performing $ - $ - $ - $ - $ - $ - $ 329,212 $ 329,212 Non-Performing - - - - - - - - Total credit cards $ - $ - $ - $ - $ - $ - $ 329,212 $ 329,212 Charge-offs on credit cards $ - $ - $ - $ - $ - $ - $ 18,276 $ 18,276 Other consumer loans Accrual Status: Performing $ 82,245 $ 32,594 $ 9,897 $ 5,612 $ 4,915 $ 3,731 $ 8,919 $ 147,913 Non-Performing 634 537 113 61 72 135 137 1,689 Total other consumer loans $ 82,879 $ 33,131 $ 10,010 $ 5,673 $ 4,987 $ 3,866 $ 9,056 $ 149,602 Charge-offs on other consumer loans $ 2,151 $ 7,397 $ 2,308 $ 577 $ 1,043 $ 361 $ 453 $ 14,290 Total Accrual Status: Performing $ 1,194,277 $ 929,966 $ 578,132 $ 265,390 $ 219,259 $ 104,242 $ 338,131 $ 3,629,397 Non-Performing 3,607 6,834 4,086 1,944 3,018 2,747 137 22,373 Total consumer loans $ 1,197,884 $ 936,800 $ 582,218 $ 267,334 $ 222,277 $ 106,989 $ 338,268 $ 3,651,770 Charge-offs on total consumer loans $ 5,711 $ 26,343 $ 11,039 $ 4,179 $ 6,366 $ 4,035 $ 18,729 $ 76,402 (1) Excludes accrued interest receivable.

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As of December 31, 2023 Term Loans Amortized Cost Basis by Origination Year (1) 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Total (In thousands) Florida Region: Auto loans Accrual Status: Performing $ - $ - $ - $ - $ 135 $ 970 $ - $ 1,105 Non-Performing - - - - - 12 - 12 Total auto loans $ - $ - $ - $ - $ 135 $ 982 $ - $ 1,117 Charge-offs on auto loans $ - $ - $ - $ - $ 24 $ 300 $ - $ 324 Finance leases Accrual Status: Performing $ - $ - $ - $ - $ - $ - $ - $ - Non-Performing - - - - - - - - Total finance leases $ - $ - $ - $ - $ - $ - $ - $ - Charge-offs on finance leases $ - $ - $ - $ - $ - $ - $ - $ - Personal loans Accrual Status: Performing $ 202 $ - $ 71 $ - $ - $ - $ - $ 273 Non-Performing - - - - - - - - Total personal loans $ 202 $ - $ 71 $ - $ - $ - $ - $ 273 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 $ 54 $ 47 $ 223 $ 328 $ - $ 2,246 $ 1,548 $ 4,446 Non-Performing - - - - - 19 40 59 Total other consumer loans $ 54 $ 47 $ 223 $ 328 $ - $ 2,265 $ 1,588 $ 4,505 Charge-offs on other consumer loans $ - $ - $ - $ - $ - $ - $ - $ - Total Accrual Status: Performing $ 256 $ 47 $ 294 $ 328 $ 135 $ 3,216 $ 1,548 $ 5,824 Non-Performing - - - - - 31 40 71 Total consumer loans $ 256 $ 47 $ 294 $ 328 $ 135 $ 3,247 $ 1,588 $ 5,895 Charge-offs on total consumer loans $ - $ - $ - $ - $ 24 $ 300 $ - $ 324 (1) Excludes accrued interest receivable.

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As of December 31, 2023 Term Loans Amortized Cost Basis by Origination Year (1) 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Total (In thousands) Total: Auto loans Accrual Status: Performing $ 630,507 $ 532,854 $ 384,103 $ 178,566 $ 132,048 $ 62,610 $ - $ 1,920,688 Non-Performing 2,474 4,031 3,103 1,426 2,610 1,924 - 15,568 Total auto loans $ 632,981 $ 536,885 $ 387,206 $ 179,992 $ 134,658 $ 64,534 $ - $ 1,936,256 Charge-offs on auto loans $ 1,969 $ 8,029 $ 4,688 $ 1,854 $ 2,437 $ 1,965 $ - $ 20,942 Finance leases Accrual Status: Performing $ 311,620 $ 246,085 $ 152,028 $ 64,930 $ 54,207 $ 24,658 $ - $ 853,528 Non-Performing 309 1,188 663 351 191 585 - 3,287 Total finance leases $ 311,929 $ 247,273 $ 152,691 $ 65,281 $ 54,398 $ 25,243 $ - $ 856,815 Charge-offs on finance leases $ 473 $ 1,889 $ 1,162 $ 557 $ 593 $ 725 $ - $ 5,399 Personal loans Accrual Status: Performing $ 170,107 $ 118,433 $ 32,175 $ 16,282 $ 28,224 $ 14,213 $ - $ 379,434 Non-Performing 190 1,078 207 106 145 115 - 1,841 Total personal loans $ 170,297 $ 119,511 $ 32,382 $ 16,388 $ 28,369 $ 14,328 $ - $ 381,275 Charge-offs on personal loans $ 1,118 $ 9,028 $ 2,881 $ 1,191 $ 2,317 $ 1,284 $ - $ 17,819 Credit cards Accrual Status: Performing $ - $ - $ - $ - $ - $ - $ 329,212 $ 329,212 Non-Performing - - - - - - - - Total credit cards $ - $ - $ - $ - $ - $ - $ 329,212 $ 329,212 Charge-offs on credit cards $ - $ - $ - $ - $ - $ - $ 18,276 $ 18,276 Other consumer loans Accrual Status: Performing $ 82,299 $ 32,641 $ 10,120 $ 5,940 $ 4,915 $ 5,977 $ 10,467 $ 152,359 Non-Performing 634 537 113 61 72 154 177 1,748 Total other consumer loans $ 82,933 $ 33,178 $ 10,233 $ 6,001 $ 4,987 $ 6,131 $ 10,644 $ 154,107 Charge-offs on other consumer loans $ 2,151 $ 7,397 $ 2,308 $ 577 $ 1,043 $ 361 $ 453 $ 14,290 Total Accrual Status: Performing $ 1,194,533 $ 930,013 $ 578,426 $ 265,718 $ 219,394 $ 107,458 $ 339,679 $ 3,635,221 Non-Performing 3,607 6,834 4,086 1,944 3,018 2,778 177 22,444 Total consumer loans $ 1,198,140 $ 936,847 $ 582,512 $ 267,662 $ 222,412 $ 110,236 $ 339,856 $ 3,657,665 Charge-offs on total consumer loans $ 5,711 $ 26,343 $ 11,039 $ 4,179 $ 6,390 $ 4,335 $ 18,729 $ 76,726 (1) Excludes accrued interest receivable.

As of December 31, 2024 and 2023, the balance of revolving loans converted to term loans was no t material. Accrued interest receivable on loans totaled $ 58.2 million as of December 31, 2024 ($ 62.3 million as of December 31, 2023), 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.

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The following tables present information about collateral dependent loans that were individually evaluated for purposes of determining the ACL as of December 31, 2024 and 2023 :

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

As of December 31, 2023 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 $ 25,355 $ 1,732 $ - $ 25,355 $ 1,732 Commercial loans: Construction loans - - 956 956 - Commercial mortgage loans 4,454 135 40,683 45,137 135 C&I loans 9,390 1,563 6,780 16,170 1,563 Consumer loans: Personal loans 28 1 - 28 1 Other consumer loans 123 12 - 123 12 $ 39,350 $ 3,443 $ 48,419 $ 87,769 $ 3,443

The underlying collateral for residential mortgage and consumer collateral dependent loans consisted of single-family residential properties, and for commercial and construction loans consisted primarily of office buildings, multifamily residential properties, and retail establishments. The weighted-average loan-to-value coverage for collateral dependent loans as of December 31, 2024 was 68 %, compared to 65 % as of December 31, 2023, mainly related to the inflow to nonaccrual status of a $ 16.5 million commercial relationship in the Puerto Rico region in the food retail industry, with a high loan-to-value, classified as collateral dependent, partially offset by the sale of an $ 8.2 million nonaccrual C&I loan in the Puerto Rico region, which resulted in a $ 1.2 million charge-off that had been previously reserved.

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Purchases and Sales of Loans In the ordinary course of business, the Corporation enters into securitization transactions and whole loan sales with GNMA and GSEs, such as FNMA and FHLMC. During the years ended December 31, 2024, 2023, and 2022, loans pooled into GNMA MBS amounted to approximately $ 127.9 million, $ 125.4 million, and $ 144.5 million, respectively, for which the Corporation recognized a net gain on sale of $ 4.6 million, $ 2.6 million, and $ 4.2 million, respectively. Also, during the years ended December 31, 2024, 2023, and 2022, the Corporation sold approximately $ 32.1 million, $ 29.8 million, and $ 93.8 million, respectively, of performing residential mortgage loans to GSEs, for which the Corporation recognized a net gain on sale of $ 0.8 million, $ 0.7 million, and $ 4.2 million, respectively. The Corporation’s continuing involvement with the loans that it sells consists primarily of servicing the loans. In addition, the Corporation agrees to repurchase loans if it breaches any of the representations and warranties included in the sale agreement. These representations and warranties are consistent with the GSEs’ selling and servicing guidelines ( i.e. , ensuring that the mortgage was properly underwritten according to established guidelines). For loans pooled into GNMA MBS, the Corporation, as servicer, holds an option to repurchase individual delinquent loans issued on or after January 1, 2003, when certain delinquency criteria are met. This option gives the Corporation the unilateral ability, but not the obligation, to repurchase the delinquent loans at par without prior authorization from GNMA. Since the Corporation is considered to have regained effective control over the loans, it is required to recognize the loans and a corresponding repurchase liability regardless of its intent to repurchase the loans. As of December 31, 2024 and 2023, rebooked GNMA delinquent loans that were included in the residential mortgage loan portfolio amounted to $ 5.7 million and $ 7.9 million, respectively. During the years ended December 31, 2024, 2023, and 2022, the Corporation repurchased, pursuant to the aforementioned repurchase option, $ 2.2 million, $ 2.9 million, and $ 8.2 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 year ended December 31, 2024, the Corporation purchased commercial loan participations in the Florida region totaling $ 223.9 million, which consisted of approximately $ 210.2 million in the C&I portfolio and $ 13.7 million in the commercial mortgage portfolio, compared to C&I loan participations purchased in the Florida region totaling $ 61.3 million and $ 135.4 million during the years ended December 31, 2023 and 2022, respectively. In addition, during the year ended December 31, 2024, the Corporation purchased commercial mortgage loan participations in the Puerto Rico region totaling $ 38.9 million. During the year ended December 31, 2024, the Corporation recognized a $ 10.0 million recovery associated with the bulk sale of fully charged-off consumer loans and sold the aforementioned $ 8.2 million nonaccrual C&I loan in the Puerto Rico region, net of a $ 1.2 million charge-off. Meanwhile, during the year ended December 31, 2022, the Corporation sold a $ 35.2 million C&I loan participation in the Puerto Rico region and a $ 23.9 million criticized C&I loan participation in the Florida region. There were no significant sales of loans during the year ended December 31, 2023, other than the sales of conforming residential mortgage loans mentioned above.

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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 $ 12.7 billion as of December 31, 2024, credit risk concentration was approximately 79 % in Puerto Rico, 18 % in the U.S., and 3 % in the USVI and the BVI. As of December 31, 2024, the Corporation had $ 193.3 million outstanding in loans extended to the Puerto Rico government, its municipalities and public corporations, compared to $ 174.9 million as of December 31, 2023. As of December 31, 2024, approximately $ 132.2 million consisted of loans extended to municipalities in Puerto Rico that are general obligations supported by assigned property tax revenues, and $ 22.2 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 December 31, 2024 included $ 8.8 million in a loan granted to an affiliate of the Puerto Rico Electric Power Authority (“PREPA”) and $ 30.1 million in loans to a public corporation of the Puerto Rico government. Moreover, as of December 31, 2024, the outstanding balance of construction loans funded through conduit financing structures to support the federal programs of Low-Income Housing Tax Credit (“LIHTC”) combined with Community Development Block Grant- Disaster Recovery (“CDBG-DR”) funding amounted to $ 59.2 million, compared to $ 12.8 million as of December 31, 2023. The main objective of these programs is to spur development in new or rehabilitated and affordable rental housing. PRHFA, as program subrecipient and conduit issuer, issues tax-exempt obligations which are acquired by private financial institutions and are required to co-underwrite with PRHFA a mirror construction loan agreement for the specific project loan to which the Corporation will serve as ultimate lender but where the PRHFA will be the lender of record. In addition, as of December 31, 2024, the Corporation had $ 72.5 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 $ 77.7 million as of December 31, 2023. Residential mortgage loans guaranteed by the PRHFA are secured by the underlying properties and the guarantees serve to cover shortfalls in collateral in the event of a borrower default. The Corporation also has credit exposure to USVI government entities. As of December 31, 2024, the Corporation had $ 100.4 million in loans to USVI government public corporations, compared to $ 90.5 million as of December 31, 2023. As of December 31, 2024, all loans were currently performing and up to date on principal and interest payments.

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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. Borrower s continue making reduced monthly payments during the trial period, which is generally of 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 $ 4.5 million in restructured residential mortgage loans that are government-guaranteed (e.g., FHA/VA loans) and were modified during the year ended December 31, 2024, compared to $ 3.9 million for the comparable period in 2023.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) The following tables present the amortized cost basis as of December 31, 2024 and 2023 of loans modified to borrowers experiencing financial difficulty during the years ended December 31, 2024 and 2023, by portfolio classes and type of modification granted, and the percentage of these modified loans relative to the total period-end amortized cost basis of receivables in the portfolio class:

Year Ended December 31, 2024 Payment Delay Only Trial Modification Change in Amortization Term Interest Rate Reduction Term Extension Combination of Interest Rate Reduction and Term Extension Other Total Percentage of Total by Portfolio Classes (In thousands) Conventional residential mortgage loans $ 305 $ - $ - $ 598 $ 57 $ - $ 960 0.04 % Construction loans - - - 120 - - 120 0.05 % Commercial mortgage loans - - - 127,161 374 - 127,535 4.97 % C&I loans - 3,273 79 2,864 4,019 - (1) 10,235 0.30 % Consumer loans: Auto loans - - - 442 220 3,199 (1) 3,861 0.19 % Personal loans - - - 12 178 - 190 0.05 % Credit cards - - 2,905 (2) - - - 2,905 0.90 % Other consumer loans - - - 352 216 29 (1) 597 0.40 % Total modifications $ 305 $ 3,273 $ 2,984 $ 131,549 $ 5,064 $ 3,228 $ 146,403

Year Ended December 31, 2023 Payment Delay Only Trial Modification Change in Amortization Term Interest Rate Reduction Term Extension Combination of Interest Rate Reduction and Term Extension Other Total Percentage of Total by Portfolio Classes (In thousands) Conventional residential mortgage loans $ 501 $ - $ - $ 999 $ 238 $ - $ 1,738 0.06 % Construction loans - - - - - - - - Commercial mortgage loans - - - 2,222 30,170 - 32,392 1.40 % C&I loans - - 186 185 - - 371 0.01 % Consumer loans: Auto loans - - - 474 215 2,084 (1) 2,773 0.14 % Personal loans - - - 138 202 - 340 0.09 % Credit cards - - 1,424 (2) - - - 1,424 0.43 % Other consumer loans - - - 424 78 29 (1) 531 0.34 % Total modifications $ 501 $ - $ 1,610 $ 4,442 $ 30,903 $ 2,113 $ 39,569 (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 line privileges.

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The following tables present by portfolio classes the financial effects of the modifications granted to borrowers experiencing financial difficulty, other than those associated to payment delay, during the years ended December 31, 2024 and 2023. The financial effects of the modifications associated to payment delay were discussed above and, as such, were excluded from the tables below: Year Ended December 31, 2024 Combination of Interest Rate Reduction and Term Extension Weighted-Average Interest Rate Reduction (%) Weighted-Average Term Extension (in months) Weighted-Average Interest Rate Reduction (%) Weighted-Average Term Extension (in months) Change in Amortization Term (In thousands) Conventional residential mortgage loans - % 103 1.80 % 106 - Construction loans - % 83 - % - - Commercial mortgage loans - % 36 0.50 % 88 - C&I loans 15.25 % 18 3.00 % 9 38 Consumer loans: Auto loans - % 27 2.74 % 27 - Personal loans - % 25 4.01 % 16 - Credit cards 16.77 % - - % - - Other consumer loans - % 26 3.00 % 20 -

Year Ended December 31, 2023 Combination of Interest Rate Reduction and Term Extension Weighted-Average Interest Rate Reduction (%) Weighted-Average Term Extension (in months) Weighted-Average Interest Rate Reduction (%) Weighted-Average Term Extension (in months) Change in Amortization Term (In thousands) Conventional residential mortgage loans - % 93 2.95 % 105 - Construction loans - % - - % - - Commercial mortgage loans - % 13 0.25 % 64 - C&I loans 0.45 % 72 - % - - Consumer loans: Auto loans - % 23 2.95 % 24 - Personal loans - % 36 4.57 % 29 - Credit cards 16.09 % - - % - - Other consumer loans - % 26 1.60 % 22 -

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The following tables present by portfolio classes the performance of loans modified during the years ended December 31, 2024 and 2023 that were granted to borrowers experiencing financial difficulty: Year Ended December 31, 2024 30-59 60-89 90+ Total Delinquency Current Total (In thousands) Conventional residential mortgage loans $ - $ - $ - $ - $ 960 $ 960 Construction loans - - - - 120 120 Commercial mortgage loans - - - - 127,535 127,535 C&I loans - - 22 22 10,213 10,235 Consumer loans: Auto loans 15 - 10 25 3,836 3,861 Personal loans - - - - 190 190 Credit cards 382 110 52 544 2,361 2,905 Other consumer loans 32 18 7 57 540 597 Total modifications $ 429 $ 128 $ 91 $ 648 $ 145,755 $ 146,403

Year Ended December 31, 2023 30-59 60-89 90+ Total Delinquency Current Total (In thousands) Conventional residential mortgage loans $ 14 $ - $ - $ 14 $ 1,724 $ 1,738 Construction loans - - - - - - Commercial mortgage loans - - - - 32,392 32,392 C&I loans - - - - 371 371 Consumer loans: Auto loans 27 18 18 63 2,710 2,773 Personal loans 52 - 15 67 273 340 Credit cards 43 16 2 61 1,363 1,424 Other consumer loans 46 11 20 77 454 531 Total modifications $ 182 $ 45 $ 55 $ 282 $ 39,287 $ 39,569

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Troubled Debt Restructuring (“TDR”) Disclosures Prior to Adoption of ASU 2022-02 The following provides additional disclosures previously required by ASC Subtopic 310-40, Receivables - Troubled Debt Restructurings by Creditors, related to the year ended December 31, 2022. Prior to the adoption of ASU 2022-02, a restructuring of a loan constituted a TDR if the creditor, for economic or legal reasons related to the borrower's financial difficulties, granted a concession to the borrower that it would not otherwise consider. See Note 1 -“Nature of Business and Summary of Significant Accounting Policies” and Note 4 - “Loans Held For Investment” included in the Annual Report on Form 10-K for the year ended December 31, 2022, as amended on October 13, 2023, for additional discussion of TDRs. The following tables present TDR loans completed during the year ended December 31, 2022: Year Ended December 21, 2022 Total Interest rate below market Maturity or term extension Combination of reduction in interest rate and extension of maturity Forgiveness of principal and/or interest Other (1) Total (In thousands) TDRs: Conventional residential mortgage loans $ 433 $ 1,551 $ 242 $ - $ 4,874 $ 7,100 Construction loans - - - - - - Commercial mortgage loans - 245 5,178 - 467 5,890 C&I loans 2,402 - 618 825 1,083 4,928 Consumer loans: Auto loans 2,877 232 345 - - 3,454 Finance leases - 573 - - 18 591 Personal loans 99 171 105 - 19 394 Credit cards 816 (2) - - - - 816 Other consumer loans 112 272 16 43 - 443 Total TDRs $ 6,739 $ 3,044 $ 6,504 $ 868 $ 6,461 $ 23,616 (1) Other concessions granted by the Corporation include payment plans under judicial stipulation or loss mitigation programs, or a combination of two or more of the concessions listed in the table. Amounts included in Other that represent a combination of concessions are excluded from the amounts reported in the column for such individual concessions. (2) Concession consists of reduction in interest rate and revocation of revolving line privileges.

Year Ended December 31, 2022 Number of contracts Pre-modification Amortized Cost Post-modification Amortized Cost (Dollars in thousands) TDRs: Conventional residential mortgage loans 68 $ 7,165 $ 7,100 Construction loans - - - Commercial mortgage loans 3 5,897 5,890 C&I loans 17 5,156 4,928 Consumer loans: Auto loans 168 3,404 3,454 Finance leases 33 592 591 Personal loans 26 366 394 Credit Cards 170 815 816 Other consumer loans 115 434 443 Total TDRs 600 $ 23,829 $ 23,616

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Loan modifications considered TDR loans that defaulted (failure by the borrower to make payments of either principal, interest, or both for a period of 90 days or more) during the year ended December 31, 2022, and had become TDR loans during the 12-months preceding the default date, were as follows: Year Ended December 31, 2022 Number of contracts Amortized Cost (Dollars in thousands) Conventional residential mortgage loans 2 $ 124 Construction loans - - Commercial mortgage loans - - C&I loans - - Consumer loans: Auto loans 96 2,049 Finance leases 1 16 Personal loans - - Credit cards 28 156 Other consumer loans 8 30 Total 135 $ 2,375

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) NOTE 5 – 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 Year Ended December 31, 2024 (In thousands) ACL: Beginning balance $ 57,397 $ 5,605 $ 32,631 $ 33,190 $ 133,020 $ 261,843 Provision for credit losses - (benefit) expense ( 16,225 ) ( 1,912 ) ( 10,717 ) ( 4,886 ) 96,601 62,861 Charge-offs ( 1,971 ) - - ( 2,742 ) ( 109,115 ) ( 113,828 ) Recoveries 1,453 131 533 6,704 24,245 (1) 33,066 Ending balance $ 40,654 $ 3,824 $ 22,447 $ 32,266 $ 144,751 $ 243,942 (1) Includes recoveries totaling $ 10 .0 million associated with the bulk sale of fully charged-off consumer loans and finance leases.

Residential Mortgage Loans Construction Loans Commercial Mortgage C&I Loans Consumer Loans Total Year Ended December 31, 2023 (In thousands) ACL: Beginning balance $ 62,760 $ 2,308 $ 35,064 $ 32,906 $ 127,426 $ 260,464 Impact of adoption of ASU 2022-02 (1) 2,056 - - 7 53 2,116 Provision for credit losses - (benefit) expense ( 6,866 ) 1,408 ( 2,086 ) 6,372 67,816 66,644 Charge-offs ( 3,245 ) ( 62 ) ( 1,133 ) ( 6,936 ) ( 76,726 ) ( 88,102 ) Recoveries 2,692 1,951 786 841 14,451 20,721 Ending balance $ 57,397 $ 5,605 $ 32,631 $ 33,190 $ 133,020 $ 261,843 (1) Recognized as a result of the adoption of ASU 2022-02, for which the Corporation elected to discontinue the use of a discounted cash flow methodology for restructured accruing loans, which had a corresponding decrease, net of applicable taxes, in beginning retained earnings as of January 1, 2023.

Residential Mortgage Loans Construction Loans Commercial Mortgage C&I Loans Consumer Loans Total Year Ended December 31, 2022 (In thousands) ACL: Beginning balance $ 74,837 $ 4,048 $ 52,771 $ 34,284 $ 103,090 $ 269,030 Provision for credit losses - (benefit) expense ( 8,734 ) ( 2,342 ) ( 18,994 ) ( 1,770 ) 57,519 25,679 Charge-offs ( 6,890 ) ( 123 ) ( 85 ) ( 2,067 ) ( 48,165 ) ( 57,330 ) Recoveries 3,547 725 1,372 2,459 14,982 23,085 Ending balance $ 62,760 $ 2,308 $ 35,064 $ 32,906 $ 127,426 $ 260,464

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The Corporation estimates the ACL following the methodologies described in Note 1 – “Nature of Business and Summary of Significant Accounting Policies” for each portfolio segment . The Corporation generally applies probability weights to the baseline and alternative downside economic scenarios to estimate the ACL with the baseline scenario carrying the highest weight. The scenarios that are chosen each quarter and the weighting given to each scenario for the different loan portfolio categories depend on a variety of factors including recent economic events, leading national and regional economic indicators, and industry trends. As of December 31, 2024 and 2023, 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. At least every other year, the Corporation reviews the credit models used in determining the ACL. Such exercise consists primarily in updating the model with recent historical losses and determining if other changes are required for purposes of estimating credit losses. During 2024, the Corporation completed the aforementioned review for the residential mortgage, auto loan, and finance lease portfolios, primarily for the Puerto Rico region. The residential mortgage loan portfolio, which has recently experienced a historically low level of credit losses, as a result of high collateral values in the Puerto Rico region, resulted in a lower required reserve level. For the auto loan and finance lease portfolios, historical loss trends were updated and resulted in an increase in the required reserve levels as the loss experience in such portfolios have been trending higher towards historical loss experience. As of December 31, 2024, the ACL for loans and finance leases was $ 243.9 million, a decrease of $ 17.9 million, from $ 261.8 million as of December 31, 2023. The ACL for residential mortgage loans decreased by $ 16.7 million, driven by the aforementioned updated historical loss experience used for determining the ACL estimate resulting in a downward revision of estimated loss severities and improvements in the long-term projections of the unemployment rate in the Puerto Rico region, partially offset by newly originated loans. The ACL for commercial and construction loans decreased by $ 12.9 million, mainly due to reserve releases associated with the improved financial condition of certain borrowers and an improvement on the economic outlook of certain macroeconomic variables, particularly variables associated with commercial real estate property performance and the forecasted CRE price index, partially offset by loan portfolio growth . Meanwhile, the ACL for consumer loans increased by $ 11.7 million driven by higher charge-off and delinquency levels and loan portfolio growth, mainly in auto loans and finance leases. Net charge-offs were $ 80.8 million for the year ended December 31, 2024, compared to $ 67.4 million for the same period in 2023. The $ 13.4 million increase in net charge-offs for the year ended December 31, 2024 was driven by an increase in consumer loans and finance leases charge-offs across all major portfolio classes, partially offset by the effect during 2024 of both the $ 10.0 million recovery associated with the bulk sale of fully charged-off consumer loans and finance leases and a $ 5.0 million recovery associated with a C&I loan in the Puerto Rico region, and a $ 6.0 million net charge-off recorded on a C&I participated loan in the Florida region during 2023.

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The tables below present the ACL related to loans and finance leases and the carrying values of loans by portfolio segment as of December 31, 2024 and 2023: 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 32,266 144,751 243,942 Allowance for credit losses to amortized cost 1.44 % 1.67 % 0.87 % 0.96 % 3.85 % 1.91 %

As of December 31, 2023 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 $ 2,821,726 $ 214,777 $ 2,317,083 $ 3,174,232 $ 3,657,665 $ 12,185,483 Allowance for credit losses 57,397 5,605 32,631 33,190 133,020 261,843 Allowance for credit losses to amortized cost 2.03 % 2.61 % 1.41 % 1.05 % 3.64 % 2.15 %

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 27 – “Regulatory Matters, Commitments and Contingencies” for information on off-balance sheet exposures as of December 31, 2024 and 2023. The Corporation estimates the ACL for these off-balance sheet exposures following the methodology described in Note 1 – “Nature of Business and Summary of Significant Accounting Policies.” As of December 31, 2024, the ACL for off-balance sheet credit exposures amounted to $ 3.1 million, compared to $ 4.6 million as of December 31, 2023. The decrease was driven by an improvement on the economic outlook of certain macroeconomic variables, particularly in variables associated with the CRE price index. The following table presents the activity in the ACL for unfunded loan commitments and standby letters of credit for the years ended December 31, 2024, 2023 and 2022:

Year Ended December 31, 2024 2023 2022 (In thousands) Beginning Balance $ 4,638 $ 4,273 $ 1,537 Provision for credit losses - (benefit) expense ( 1,495 ) 365 2,736 Ending balance $ 3,143 $ 4,638 $ 4,273

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) NOTE 6 – PREMISES AND EQUIPMENT Premises and equipment comprise:

Useful Life Range In Years As of December 31, Minimum Maximum 2024 2023 (Dollars in thousands) Buildings and improvements 10 35 $ 144,935 $ 143,470 Leasehold improvements 2 10 79,498 77,702 Furniture, equipment and software 2 10 152,588 161,886 377,021 383,058 Accumulated depreciation and amortization ( 274,731 ) ( 277,853 ) 102,290 105,205 Land 29,965 29,965 Projects in progress 1,182 6,846 Total premises and equipment, net $ 133,437 $ 142,016

Depreciation and amortization expense amounted to $ 18.6 million, $ 20.5 million, and $ 22.3 million for the years ended December 31, 2024, 2023, and 2022, respectively. During the year ended December 31, 2024, the Corporation recognized $ 0.1 million in net gains from sales of fixed assets; compared to $ 3.5 million for the same period of 2023, of which $ 3.0 million was related to the sale of a banking premise in the Florida region; and $ 0.9 million for the same period in 2022. These amounts are included as part of other non-interest income in the consolidated statements of income. During the years ended December 31, 2024 and 2023, the Corporation received insurance proceeds of $ 1.5 million and $ 0.7 million, respectively, of which $ 0.7 million and $ 0.2 million, respectively, were related to collections of insurance claims associated with property damage caused by Hurricane Fiona. These amounts are included as part of other non-interest income in the consolidated statements of income. See Note 23 – “Fair Value” for information on write-downs recorded on long-lived assets held for sale.

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NOTE 7 – OTHER REAL ESTATE OWNED (“OREO”)

The following table presents the OREO inventory as of the indicated dates: December 31, 2024 December 31, 2023 (In thousands) OREO balances, carrying value: Residential (1) $ 12,897 $ 20,261 Construction 522 1,601 Commercial (2) 3,887 10,807 Total $ 17,306 $ 32,669 (1) Excludes $ 5.2 million and $ 16.6 million as of December 31, 2024 and 2023, respectively, of foreclosures that met the conditions of ASC Subtopic 310-40 “Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure,” and are presented as a receivable as part of other assets in the consolidated statements of financial condition. (2) Decrease was mainly associated with the sale of a $ 5.3 million commercial real estate OREO property in Puerto Rico during 2024 at a gain of $ 2.3 million.

See Note 23 – “Fair Value” for information on subsequent measurement adjustments recorded on OREO properties reported as part of “Net gain on OREO operations” in the consolidated statements of income during the years ended December 31, 2024, 2023, and 2022.

NOTE 8 – RELATED-PARTY TRANSACTIONS The Corporation has granted loans to its directors, executive officers, and certain related individuals or entities in the ordinary course of business. The movement and balance of these loans were as follows:

Amount (1) (In thousands) Balance at December 31, 2022 $ 883 Additions 333 Payments ( 389 ) Balance at December 31, 2023 827 Additions 80 Payments ( 120 ) Balance at December 31, 2024 $ 787 (1) Includes loans granted to related parties which were then sold in the secondary market.

These loans were made subject to the provisions of the Federal Reserve Board’s Regulation O – “Loans to Executive Officers, Directors and Principal Shareholders of Member Banks,” which governs the permissible lending relationships between a financial institution and its executive officers, directors, principal shareholders, their families, and related parties. There were no changes in the status of related parties during 2024 and 2023. From time to time, the Corporation, in the ordinary course of its business, obtains services from related parties or makes contributions to non-profit organizations that have some association with the Corporation.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) NOTE 9 – GOODWILL AND OTHER INTANGIBLES Goodwill Goodwill as of each of December 31, 2024 and 2023 amounted to $ 38.6 million. The Corporation’s policy is to assess goodwill and other intangibles for impairment on an annual basis during the fourth quarter of each year, and more frequently if events or circumstances lead management to believe that the values of goodwill or other intangibles may be impaired. During the fourth quarter of 2024, management performed a qualitative analysis of the carrying amount of each relevant reporting units’ goodwill and concluded that it is more-likely-than-not that the fair value of the reporting units exceeded their carrying value, and thus no impairment charges for goodwill were recorded. This assessment involved identifying the inputs and assumptions that most affect fair value, including evaluating significant and relevant events impacting each reporting entity, and evaluating such factors to determine if a positive assertion can be made that it is more-likely-than-not that the fair value of the reporting units exceeded their carrying amount. In the qualitative assessment performed for each reporting unit, the Corporation evaluated events and circumstances that could impact the fair value including the following: ● Macroeconomic conditions, such as improvement or deterioration in general economic conditions; ● Industry and market considerations; ● Interest rate fluctuations; ● Overall financial performance of the reporting unit; ● Performance of industry peers over the last year; and ● Recent market transactions There were no changes in the carrying amount of goodwill during the years ended December 31, 2024, 2023, and 2022.

Other Intangible Assets The following table presents the gross amount and accumulated amortization of the Corporation’s intangible assets subject to amortization as of the indicated dates:

As of As of December 31, 2024 December 31, 2023 (Dollars in thousands) Core deposit intangible: Gross amount $ 87,544 $ 87,544 Accumulated amortization ( 80,577 ) ( 74,161 ) Net carrying amount $ 6,967 $ 13,383 Remaining amortization period (in years) 5.0 6.0

During the years ended December 31, 2024, 2023, and 2022, the Corporation recognized $ 6.4 million, $ 7.7 million, and $ 8.8 million, respectively, in amortization expense on its intangible assets subject to amortization. The Corporation amortizes core deposit intangibles based on the projected useful lives of the related deposits. Core deposit intangibles are analyzed annually for impairment, or sooner if events and circumstances indicate possible impairment. Factors that may suggest impairment include customer attrition and run-off. Management is unaware of any events and/or circumstances that would indicate a possible impairment to the core deposit intangibles as of December 31, 2024. The estimated aggregate annual amortization expense related to core deposit intangibles for future periods was as follows as of December 31, 2024:

(In thousands) 2025 $ 3,509 2026 872 2027 872 2028 872 2029 842

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NOTE 10 – 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 April 2004, FBP Statutory Trust I, a financing trust that is wholly owned by the Corporation, sold to institutional investors $ 100 million of its variable-rate TruPS. FBP Statutory Trust I used the proceeds of the issuance, together with the proceeds of the purchase by the Corporation of $ 3.1 million of FBP Statutory Trust I variable-rate common securities, to purchase $ 103.1 million aggregate principal amount of the Corporation’s Junior Subordinated Deferrable Debentures. In September 2004, FBP Statutory Trust II, a financing trust that is wholly owned by the Corporation, sold to institutional investors $ 125 million of its variable-rate TruPS. FBP Statutory Trust II used the proceeds of the issuance, together with the proceeds of the purchase by the Corporation of $ 3.9 million of FBP Statutory Trust II variable-rate common securities, to purchase $ 128.9 million aggregate principal amount of the Corporation’s Junior Subordinated Deferrable Debentures. The debentures, net of related issuance costs, are reflected in the Corporation’s consolidated statements of financial condition as “Long-term borrowings.” These TruPS are variable-rate instruments indexed to 3- month CME Term SOFR plus a tenor spread adjustment of 0.26161 % and the original spread of 2.75 % for the FBP Statutory Trust I and 2.50 % for the FBP Statutory Trust II. The Junior Subordinated Deferrable Debentures mature on June 17, 2034, and September 20, 2034, respectively; however, under certain circumstances, the maturity of Junior Subordinated Deferrable Debentures may be shortened (such shortening would result in a mandatory redemption of the variable-rate TruPS). During 2024, the Corporation redeemed $ 100.0 million, or 84 %, of outstanding TruPS issued by FBP Statutory Trust II (or $ 97.0 million after excluding the Corporation’s interest in the Trust of approximately $ 3.0 million) at a contractual call price of 100 %, as further explained in Note 15 – “Stockholders’ Equity.” As of December 31, 2024 and 2023, these Junior Subordinated Deferrable Debentures amounted to $ 61.7 million and $ 161.7 million, respectively. On February 18, 2025, the Corporation notified the holders of the debentures of the Corporation’s intent to redeem $ 50.0 million in debentures in March 2025. The Corporation expects to execute the redemption of the remaining junior subordinated debentures also in 2025. Under the indentures of these instruments, the Corporation has the right, from time to time, and without causing an event of default, to defer payments of interest on the Junior Subordinated Deferrable Debentures by extending the interest payment period at any time and from time to time during the term of the subordinated debentures for up to twenty consecutive quarterly periods. As of December 31, 2024, the Corporation was current on all interest payments due on its subordinated debt.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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 effect the securitization of mortgage loans and the sale of trust certificates (“private label MBS”). The seller initially provided the servicing for a fee, which is senior to the obligations to pay private label MBS holders. The seller then entered into a sales agreement through which it sold and issued the private label MBS in favor of the Corporation’s banking subsidiary, FirstBank. Currently, the Bank is the sole owner of these private label MBS; the servicing of the underlying residential mortgages that generate the principal and interest cash flows is performed by another third party, which receives a servicing fee. These private label MBS are variable -rate securities indexed to 3-month CME Term SOFR plus a tenor spread adjustment of 0.26161 % and the original spread limited to the weighted-average coupon of the underlying collateral. The principal payments from the underlying loans are remitted to a paying agent (servicer), who then remits interest to the Bank. Interest income is shared to a certain extent with the FDIC, which has an interest only strip (“IO”) tied to the cash flows of the underlying loans and 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. The FDIC became the owner of the IO upon its intervention of the seller, a failed financial institution. No recourse agreement exists, and the Bank, as the sole holder of the securities, absorbs all risks from losses on non-accruing loans and repossessed collateral. As of December 31, 2024, the amortized cost and fair value of these private label MBS amounted to $ 6.1 million and $ 4.2 million, respectively, with a weighted-average yield of 6.62 %, which is included as part of the Corporation’s available -for-sale debt securities portfolio, compared to an amortized cost and fair value of $ 7.1 million and $ 4.8 million, respectively, with a weighted average yield of 7.66 % as of December 31, 2023. As described in Note 3 – “Debt Securities,” the ACL on these private label MBS amounted to $ 0.2 million as of December 31, 2024.

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 December 31, 2024, 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:

Year Ended December 31, 2024 2023 2022 (In thousands) Balance at beginning of year $ 26,941 $ 29,037 30,986 Capitalization of servicing assets 2,342 2,240 3,122 Amortization ( 4,175 ) ( 4,322 ) ( 4,978 ) Temporary impairment (charges) recoveries ( 44 ) 12 66 Other (1) ( 45 ) ( 26 ) ( 159 ) Balance at end of year $ 25,019 $ 26,941 29,037 (1) Mainly represents adjustments related to the repurchase of loans serviced for others.

Impairment charges are recognized through a valuation allowance for each individual stratum of servicing assets. The valuation allowance is adjusted to reflect the amount, if any, by which the cost basis of the servicing asset for a given stratum of loans being serviced exceeds its fair value. Any fair value in excess of the cost basis of the servicing asset for a given stratum is not recognized.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Changes in the impairment allowance were as follows for the indicated periods:

Year Ended December 31, 2024 2023 2022 (In thousands) Balance at beginning of year $ - $ 12 $ 78 Temporary impairment charges (recoveries) 44 ( 12 ) ( 66 ) Balance at end of year $ 44 $ - $ 12

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:

Year Ended December 31, 2024 2023 2022 (In thousands) Servicing fees $ 10,315 $ 10,595 $ 11,096 Late charges and prepayment penalties 710 708 823 Other (1) ( 45 ) ( 26 ) ( 159 ) Servicing income, gross 10,980 11,277 11,760 Amortization and impairment of servicing assets ( 4,219 ) ( 4,310 ) ( 4,912 ) Servicing income, net $ 6,761 $ 6,967 $ 6,848 (1) Mainly represents adjustments related to the repurchase of loans serviced for others.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) 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 Year Ended December 31, 2024 Constant prepayment rate: Government-guaranteed mortgage loans 6.7 % 17.1 % 3.0 % Conventional conforming mortgage loans 6.8 % 20.6 % 2.1 % Conventional non-conforming mortgage loans 6.2 % 8.0 % 2.8 % 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 11.4 % 12.5 % 11.0 % Year Ended December 31, 2023 Constant prepayment rate: Government-guaranteed mortgage loans 6.6 % 18.0 % 3.8 % Conventional conforming mortgage loans 7.3 % 16.9 % 2.4 % Conventional non-conforming mortgage loans 6.0 % 9.0 % 2.1 % Discount rate: Government-guaranteed mortgage loans 11.5 % 11.5 % 11.5 % Conventional conforming mortgage loans 9.5 % 10.0 % 9.5 % Conventional non-conforming mortgage loans 12.6 % 14.0 % 11.0 % Year Ended December 31, 2022 Constant prepayment rate: Government-guaranteed mortgage loans 6.7 % 18.3 % 4.8 % Conventional conforming mortgage loans 7.4 % 18.4 % 3.4 % Conventional non-conforming mortgage loans 6.0 % 21.9 % 3.6 % Discount rate: Government-guaranteed mortgage loans 11.7 % 12.0 % 11.5 % Conventional conforming mortgage loans 9.7 % 10.0 % 9.5 % Conventional non-conforming mortgage loans 12.5 % 14.5 % 11.5 %

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) 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:

December 31, 2024 December 31, 2023 (In thousands) Carrying amount of servicing assets $ 25,019 $ 26,941 Fair value $ 43,046 $ 45,244 Weighted-average expected life (in years) 7.63 7.79 Constant prepayment rate (weighted-average annual rate) 6.34 % 6.27 % Decrease in fair value due to 10% adverse change $ 858 $ 886 Decrease in fair value due to 20% adverse change $ 1,675 $ 1,731 Discount rate (weighted-average annual rate) 10.72 % 10.68 % Decrease in fair value due to 10% adverse change $ 1,815 $ 1,927 Decrease in fair value due to 20% adverse change $ 3,495 $ 3,712

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 .

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) NOTE 11 – DEPOSITS

The following table summarizes deposit balances as of the indicated dates: December 31, 2024 December 31, 2023 (In thousands) Type of account: Non-interest-bearing deposit accounts $ 5,547,538 $ 5,404,121 Interest-bearing checking accounts 4,308,116 3,937,945 Interest-bearing saving accounts 3,530,382 3,596,855 Time deposits 3,007,144 2,833,730 Brokered certificates of deposits (“CDs”) 478,118 783,334 Total $ 16,871,298 $ 16,555,985

The weighted-average interest rate on total interest-bearing deposits as of December 31, 2024 and 2023 was 2.18 % and 2.24 %, respectively. As of December 31, 2024, the aggregate amount of unplanned overdrafts of demand deposits that were reclassified as loans amounted to $ 2.0 million (2023 - $ 1.4 million). Pre-arranged overdrafts lines of credit, also reported as loans, amounted to $ 25.6 million as of December 31, 2024 (2023 - $ 23.8 million).

The following table presents the remaining contractual maturities of time deposits, including brokered CDs, as of December 31, 2024: Total (In thousands) Three months or less $ 1,030,064 Over three months to six months 542,847 Over six months to one year 1,038,620 Over one year to two years 580,075 Over two years to three years 117,792 Over three years to four years 101,693 Over four years to five years 52,281 Over five years 21,890 Total $ 3,485,262

Total Puerto Rico and U.S. time deposits with balances of more than $250,000 amounted to $ 1.5 billion and $ 1.4 billion as of December 31, 2024 and 2023, respectively. This amount does not include brokered CDs that are generally participated out by brokers in shares of less than the FDIC insurance limit. As of December 31, 2024, unamortized broker placement fees amounted to $ 1.1 million (2023 - $ 1.0 million), which are amortized over the contractual maturity of the brokered CDs under the interest method.

As of December 31, 2024, deposit accounts issued to government agencies amounted to $ 3.5 billion (2023 – $ 3.2 billion). These deposits are insured by the FDIC up to the applicable limits. The uninsured portions were collateralized by securities and loans with an amortized cost of $ 3.7 billion (2023 – $ 3.5 billion) and an estimated market value of $ 3.3 billion (2023 – $ 3.1 billion). In addition to securities and loans, as of both December 31, 2024 and 2023, the Corporation used $ 175.0 million in letters of credit issued by the FHLB as pledges for public deposits in the Virgin Islands. As of December 31, 2024, the Corporation had $ 3.1 billion of government deposits in Puerto Rico (2023 – $ 2.7 billion), $ 424.2 million in the Virgin Islands (2023 – $ 449.4 million) and $ 21.3 million in Florida (2023 – $ 10.2 million).

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A table showing interest expense on interest-bearing deposits for the indicated periods follows: Year Ended December 31, 2024 2023 2022 (In thousands) Checking accounts $ 86,537 $ 74,271 $ 15,568 Saving accounts 29,025 25,955 11,191 Time deposits 105,712 68,605 18,102 Brokered CDs 31,833 16,630 1,500 Total $ 253,107 $ 185,461 $ 46,361

NOTE 12 –BORROWINGS

Advances from the Federal Home Loan Bank (“FHLB”)

The following is a summary of the advances from the FHLB as of the indicated dates: December 31, 2024 December 31, 2023 (In thousands) Long-term Fixed -rate advances from the FHLB (1) $ 500,000 $ 500,000 (1) Weighted-average interest rate of 4.45 % as of each of December 31, 2024 and 2023, respectively.

Advances from the FHLB mature as follows as of the indicated date: December 31, 2024 (In thousands) Three months or less $ 180,000 Over six months to one year 30,000 Over one year to two years 90,000 Over two years to three years 200,000 Total (1) $ 500,000 (1) Average remaining term to maturity of 1.48 years.

The maximum aggregate balance of advances from the FHLB outstanding at any month end during the years ended December 31, 2024 and 2023 was $ 500.0 million and $ 925.0 million, respectively. The total average balance of FHLB advances during 2024 was $ 500.1 million (2023 - $ 541.0 million). The Corporation receives advances and applies for the issuance of letters of credit from the FHLB under an Advances, Collateral Pledge, and Security Agreement (the “Collateral Agreement”), which requires the Corporation to maintain a minimum of qualifying mortgage collateral or U.S. Treasury or U.S. agencies MBS collateral, as applicable. The amount of collateral required for an advance incorporates a collateral discount or “haircut,” which is incorporated into the member’s pledge and determined by the FHLB. Haircut refers to the percentage by which an asset’s market value is reduced for the purpose of collateral levels. As of each of December 31, 2024 and 2023, the estimated value of specific mortgage loans pledged as collateral, net of haircut, amounted to $ 1.2 billion, as computed by the FHLB for collateral purposes. As of December 31, 2024 and 2023, the estimated value of U.S. government- sponsored agencies’ obligations and U.S. agencies MBS pledged as collateral, net of haircut, amounted to $ 438.5 million and $ 454.0 million, respectively. As of December 31, 2024, the Corporation had additional capacity of approximately $ 950.9 million on this credit facility based on collateral pledged at the FHLB, adjusted by a haircut reflecting the perceived risk associated with the collateral. Advances may be repaid prior to maturity, in whole or in part, at the option of the borrower upon payment of any applicable fee specified in the contract governing such advance. In calculating the fee, due consideration is given to (i) all relevant factors, including, but not limited to, any and all applicable costs of repurchasing and/or prepaying any associated liabilities and/or hedges entered into with respect to the applicable advance; (ii) the financial characteristics, in their entirety, of the advance being prepaid; and (iii), in the case of adjustable-rate advances, the expected future earnings of the replacement borrowing as long as the replacement borrowing is at least equal to the original advance’s par value and the replacement borrowing’s tenor is at least equal to the remaining maturity of the prepaid advance.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Securities Sold Under Agreements to Repurchase (“Repurchase Agreements”) There was no maximum aggregate balance of repurchase agreements outstanding at any month-end for the year ended December 31, 2024. The maximum aggregate balance of repurchase agreements outstanding at any month-end for the year ended December 31, 2023 was $ 173.0 million. The average balance during 2024 was $ 0.2 million (2023- $ 54.6 million).

Junior Subordinated Debentures Junior subordinated debentures, as of the indicated dates, consisted of:

(In thousands) December 31, 2024 December 31, 2023 Long-term floating rate junior subordinated debentures (FBP Statutory Trust I) (1) $ 43,143 $ 43,143 Long-term floating rate junior subordinated debentures (FBP Statutory Trust II) (2) 18,557 118,557 $ 61,700 $ 161,700 (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 and 2023 ( 7.36 % as of December 31, 2024 and 8.39 % as of December 31, 2023). (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 and 2023 ( 7.12 % as of December 31, 2024 and 8.13 % as of December 31, 2023).

See Note 10 – “Non-Consolidated Variable Interest Entities (“VIEs”) and Servicing Assets” and Note 15 – “Stockholders’ Equity” for additional information on junior subordinated debentures, including the $ 100.0 million redemption of outstanding TruPS issued by FBP Statutory Trust II.

Loans Payable The Corporation participates in the Borrower-in-Custody Program (the “BIC Program”) of the FED. Through the BIC Program, a broad range of loans (including commercial, consumer, and residential mortgages) may be pledged as collateral for borrowings through the FED Discount Window. As of December 31, 2024, pledged collateral that is related to this credit facility amounted to $ 2.6 billion, net of haircut, mainly commercial, consumer, and residential mortgage loans, which is fully available for funding. The FED Discount Window program provides the opportunity to access a low-rate short-term source of funding in a high volatility market environment.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) NOTE 13 – EARNINGS PER COMMON . SHARE

The calculations of earnings per common share for the years ended December 31, 2024, 2023, and 2022 are as follows: Year Ended December 31, 2024 2023 2022 (In thousands, except per share information) Net income attributable to common stockholders $ 298,724 $ 302,864 $ 305,072 Weighted-Average Shares: Average common shares outstanding 164,549 176,504 190,805 Average potential dilutive common shares 719 676 1,163 Average common shares outstanding - assuming dilution 165,268 177,180 191,968 Earnings per common share: Basic $ 1.82 $ 1.72 $ 1.60 Diluted $ 1.81 $ 1.71 $ 1.59

Earnings per common share is computed by dividing net income attributable to common stockholders by the weighted-average number of common shares issued and outstanding. Basic weighted-average common shares outstanding exclude unvested shares of restricted stock that do not contain non-forfeitable dividend rights . Potential dilutive common shares consist of unvested shares of restricted stock and performance units (if any of the performance conditions are met as of the end of the reporting period) that do not contain non-forfeitable dividend or dividend equivalent rights using the treasury stock method. This method assumes that proceeds equal to the amount of compensation cost attributable to future services is used to repurchase shares on the open market at the average market price for the period. The difference between the number of potential dilutive shares issued and the shares purchased is added as incremental shares to the actual number of shares outstanding to compute diluted earnings per share. Unvested shares of restricted stock outstanding during the period that result in lower potentially dilutive shares issued than shares purchased under the treasury stock method are not included in the computation of dilutive earnings per share since their inclusion would have an antidilutive effect on earnings per share. There were no antidilutive shares of common stock during the years ended December 31, 2024, 2023 and 2022.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) NOTE 14 – STOCK-BASED . COMPENSATION

The First Bancorp Omnibus Plan, which is effective until May 24, 2026, provides for equity-based and non-equity-based compensation incentives (the “awards”). The Omnibus Plan authorizes the issuance of up to 14,169,807 shares of common stock, subject to adjustments for stock splits, reorganizations and other similar events. As of December 31, 2024, there were 2,587,453 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 years ended December 31, 2024, 2023 and 2022: Year Ended December 31, 2024 2023 2022 Number of Weighted- Number of Weighted- Number of Weighted- shares of Average shares of Average shares of Average restricted Grant Date restricted Grant Date restricted Grant Date stock Fair Value stock Fair Value stock Fair Value Unvested shares outstanding at beginning of year 889,642 $ 12.30 938,491 $ 9.14 1,148,775 $ 6.61 Granted (1) 415,577 17.50 522,801 12.07 327,195 13.21 Forfeited ( 14,896 ) 14.07 ( 63,133 ) 11.36 ( 15,108 ) 8.79 Vested ( 282,702 ) 12.40 ( 508,517 ) 6.36 ( 522,371 ) 6.13 Unvested shares outstanding at end of year 1,007,621 $ 14.39 889,642 $ 12.30 938,491 $ 9.14 (1) For the year ended December 31, 2024, includes 18,509 shares of restricted stock awarded to independent directors and 397,068 shares of restricted stock awarded to employees, of which 84,122 shares were granted to retirement-eligible employees and thus charged to earnings as of the grant date. For the year ended December 31, 2023, includes 28,973 shares of restricted stock awarded to independent directors and 494,008 shares of restricted stock awarded to employees, of which 33,718 shares were granted to retirement-eligible employees and thus charged to earnings as of the grant date. For the year ended December 31, 2022, includes 27,529 shares of restricted stock awarded to independent directors and 299,666 shares of restricted stock awarded to employees, of which 6,084 shares were granted to retirement-eligible employees and thus charged to earnings as of the grant date.

For the years ended December 31, 2024, 2023 and 2022, the Corporation recognized $ 6.2 million, $ 5.7 million and $ 3.7 million, respectively, of stock-based compensation expense related to restricted stock awards. As of December 31, 2024, there was $ 4.8 million of total unrecognized compensation cost related to unvested shares of restricted stock that the Corporation expects to recognize over a weighted-average period of 1.5 years.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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, do not contain non-forfeitable rights to dividend equivalent amounts and can only be settled in shares of the Corporation’s common stock. Performance units granted during the years ended December 31, 2024 and 2023 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. Performance units granted prior to March 16, 2023 vest subject only to achievement of a TBVPS goal and the participant may earn only up to 100% of their target opportunity. The following table summarizes the performance units activity under the Omnibus Plan during the years ended December 31, 2024, 2023 and 2022:

Year Ended December 31, 2024 2023 2022 Number Weighted- Number Weighted- Number Weighted- of Average of Average of Average Performance Grant Date Performance Grant Date Performance Grant Date Units Fair Value Units Fair Value Units Fair Value Performance units at beginning of year 534,261 $ 12.25 791,923 $ 7.36 814,899 $ 7.06 Additions (1) 165,487 18.39 216,876 12.24 166,669 13.15 Vested (2) ( 150,716 ) 11.26 ( 474,538 ) 4.08 ( 189,645 ) 11.16 Performance units at end of year 549,032 $ 14.37 534,261 $ 12.25 791,923 $ 7.36 (1) Units granted during 2024 and 2023 are based on the achievement of the Relative TSR and TBVPS performance goals during a three-year performance cycle beginning January 1, 2024 and January 1, 2023, respectively, and ending on December 31, 2026 and December 31, 2025, respectively. Units granted during 2022 are subject to the achievement of the TBVPS performance goal during a three-year performance cycle beginning January 1, 2022 and ending on December 31, 2024. (2) Units vested during 2024, 2023 and 2022 are related to performance units granted in 2021, 2020 and 2019, 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 during the years ended December 31, 2024, 2023 and 2022, 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 December 31, 2024, 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 during 2024 and 2023, 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table summarizes the valuation assumptions used to calculate the fair value of the Relative TSR component of the performance units granted under the Omnibus Plan during the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Risk-free interest rate (1) 4.41 % 3.98 % Correlation coefficient 73.80 77.16 Expected dividend yield (2) - - Expected volatility (3) 34.65 41.37 Expected life (in years) 2.78 2.79 (1) Based on the yield on zero-coupon U.S. Treasury Separate Trading of Registered Interest and Principal of Securities as of the grant date for a period equal to the simulation term. (2) Assumes that dividends are reinvested at each ex-dividend date. (3) Calculated based on the historical volatility of the Corporation's stock price with a look-back period equal to the simulation term using daily stock prices.

For the years ended December 31, 2024, 2023 and 2022, the Corporation recognized $ 2.5 million, $ 2.1 million and $ 1.7 million, respectively, of stock-based compensation expense related to performance units. As of December 31, 2024, there was $ 3.6 million of total unrecognized compensation cost related to unvested performance units that the Corporation expects to recognize over a weighted-average period of 1.8 years. Shares withheld During 2024, the Corporation withheld 138,460 shares (2023 – 289,623 shares; 2022 – 205,807 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 15 – STOCKHOLDERS’ EQUITY Repurchase Programs On July 24, 2023, the Corporation announced that its Board approved a stock repurchase program, under which the Corporation may repurchase up to $ 225 million of its outstanding common stock (the “2023 stock repurchase program”). Furthermore, on July 22, 2024, the Corporation announced that its Board of Directors approved a new repurchase program (“the 2024 repurchase program”), under which the Corporation may repurchase up to an additional $ 250 million that could include repurchases of common stock or junior subordinated debentures, which it expects to execute during 2025. Under the 2023 stock repurchase program, the Corporation repurchased 5,846,872 shares of common stock through open market transactions at an average price of $ 17.10 for a total cost of approximately $ 100.0 million during 2024 and 5,080,832 shares of common stock through open market transactions at an average price of $ 14.76 for a total cost approximately $ 75.0 million during 2023. In addition, the Corporation redeemed $ 100.0 million of junior subordinated debentures. As of December 31, 2024, the Corporation has remaining authorization of approximately $ 200.0 million. Repurchases under these programs 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 s are subject to various factors, including the Corporation’s capital position, liquidity, financial performance and alternative uses of capital, stock trading price, and general market conditions. The Corporation’s repurchase programs do not obligate it to acquire any specific number of shares and do not have an expiration date. The repurchase programs may be modified, suspended, or terminated at any time at the Corporation’s discretion. Any repurchased shares of common stock are expected to be held as treasury shares. The Corporation’s holding company has no operations and depends on dividends, distributions and other payments from its subsidiaries to fund dividend payments, stock repurchases, and to fund all payments on its obligations, including debt obligations. Common Stock

The following table shows the changes in shares of common stock outstanding for the years ended December 31, 2024, 2023 and 2022: Total Number of Shares 2024 2023 2022 Common stock outstanding, beginning of year 169,302,812 182,709,059 201,826,505 Common stock repurchased (1) ( 5,985,332 ) ( 14,340,453 ) ( 19,619,178 ) Common stock reissued under stock-based compensation plan 566,293 997,339 516,840 Restricted stock forfeited ( 14,896 ) ( 63,133 ) ( 15,108 ) Common stock outstanding, end of year 163,868,877 169,302,812 182,709,059 (1) For 2024, 2023 and 2022, includes 138,460 ; 289,623 and 205,807 shares, respectively, of common stock surrendered to cover plan participants' payroll and income taxes.

For the years ended December 31, 2024, 2023 and 2022, total cash dividends declared on shares of common stock amounted to $ 106.0 million ($ 0.64 per share), $ 99.6 million ($ 0.56 per share) and $ 88.2 million ($ 0.46 per share), respectively. On January 21, 2025 , the Corporation’s Board of Directors declared a quarterly cash dividend of $ 0.18 per common share, which represents an increase of $ 0.02 per common share, or a 13 % increase, compared to its most recent quarterly dividend paid in December 2024. The dividend is payable on March 7, 2025 to shareholders of record at the close of business on February 21, 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 Directors at the relevant times.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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 December 31, 2024 and 2023. Treasury Stock

The following table shows the changes in shares of treasury stock for the years ended December 31, 2024, 2023 and 2022: Total Number of Shares 2024 2023 2022 Treasury stock, beginning of year 54,360,304 40,954,057 21,836,611 Common stock repurchased 5,985,332 14,340,453 19,619,178 Common stock reissued under stock-based compensation plan ( 566,293 ) ( 997,339 ) ( 516,840 ) Restricted stock forfeited 14,896 63,133 15,108 Treasury stock, end of year 59,794,239 54,360,304 40,954,057

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. During the years ended December 31, 2024, 2023, and 2022, the Corporation transferred $ 30.6 million, $ 31.1 million, and $ 30.9 million, respectively, to the legal surplus reserve. 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 December 31, 2024 and $ 199.6 million as of December 31, 2023.

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NOTE 16 – ACCUMULATED OTHER COMPREHENSIVE LOSS The following table presents the changes in accumulated other comprehensive loss for the years ended December 31, 2024, 2023, and 2022:

Changes in Accumulated Other Comprehensive Loss by Component (1) Year Ended December 31, 2024 2023 2022 (In thousands) Unrealized net holding losses on available-for-sale debt securities: Beginning balance $ ( 640,552 ) $ ( 805,972 ) $ ( 87,390 ) Other comprehensive income (loss) (2) 73,214 165,420 ( 718,582 ) Ending balance $ ( 567,338 ) $ ( 640,552 ) $ ( 805,972 ) Adjustment of pension and postretirement benefit plans: Beginning balance $ 1,382 $ 1,194 $ 3,391 Other comprehensive (loss) income ( 600 ) 188 ( 2,197 ) Ending balance $ 782 $ 1,382 $ 1,194 (1) All amounts presented are net of tax. (2) Net unrealized holding losses on available-for-sale debt securities have no tax effect because securities are either tax-exempt, held by an IBE, or have a full deferred tax asset valuation allowance.

The following table presents the amounts reclassified out of each component of accumulated other comprehensive loss for the years ended December 31, 2024, 2023, and 2022:

Reclassifications Out of Accumulated Other Comprehensive Loss Affected Line Item in the Consolidated Statements of Income Year Ended December 31, 2024 2023 2022 (In thousands) Adjustment of pension and postretirement benefit plans: Amortization of net loss Other expenses $ 56 $ 17 $ 3 Total before tax $ 56 $ 17 $ 3 Income tax expense ( 21 ) ( 6 ) ( 1 ) Total, net of tax $ 35 $ 11 $ 2

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) NOTE 17 – EMPLOYEE BENEFIT PLANS The Corporation maintains two frozen qualified noncontributory defined benefit pension plans (the “Pension Plans”), and a related complementary post-retirement benefit plan (the “Postretirement Benefit Plan”) covering medical benefits and life insurance after retirement that it obtained in the BSPR acquisition on September 1, 2020. One defined benefit pension plan covers substantially all of 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 Corporation requires recognition of a plan’s overfunded and underfunded status as an asset or liability with an offsetting adjustment to accumulated other comprehensive loss pursuant to the ASC Topic 715, “Compensation-Retirement Benefits.”

The following table presents the changes in projected benefit obligation and changes in plan assets for the years ended December 31, 2024 and 2023:

December 31, 2024 December 31, 2023 (In thousands) Changes in projected benefit obligation: Projected benefit obligation at the beginning of year, defined benefit pension plans $ 73,547 $ 73,508 Interest cost 3,603 3,800 Actuarial (gain) loss ( 1,813 ) 1,966 Benefits paid ( 5,778 ) ( 5,727 ) Projected benefit obligation at the end of year, pension plans $ 69,559 $ 73,547 Projected benefit obligation, other postretirement benefit plan 151 244 Projected benefit obligation at the end of year $ 69,710 $ 73,791 Changes in plan assets: Fair value of plan assets at the beginning of year $ 77,365 $ 77,189 Actual return on plan assets - gain 1,221 5,903 Benefits paid ( 5,778 ) ( 5,727 ) Fair value of pension plan assets at the end of year (1) $ 72,808 $ 77,365 Net asset, pension plans 3,249 3,818 Net benefit obligation, other postretirement benefit plan ( 151 ) ( 244 ) Net asset $ 3,098 $ 3,574 (1) Other postretirement plan did not contain any assets as of December 31, 2024 and 2023.

The weighted-average discount rate used to determine the benefit obligation as of December 31, 2024 and 2023, was 5.60 % and 5.14 %, respectively. The discount rate is estimated as the single equivalent rate such that the present value of the plan’s projected benefit obligation cash flows using the single rate equals the present value of those cash flows using the above mean actuarial yield curve. In developing the expected long-term rate of return assumption, the Corporation evaluated input from a consultant and the Corporation’s long-term inflation assumptions and interest rate scenarios. Projected returns are based on the same asset categories as the plan using well-known broad indexes. Expected returns are based on historical returns with adjustments to reflect a more realistic future return. The Corporation anticipated that the Plan’s portfolio would generate a long-term rate of return of 5.75 % and 5.51 % as of December 31, 2024 and 2023. Adjustments are done by categories, taking into consideration current and future market conditions. The Corporation also considered historical returns on its plan assets to review the expected rate of return. The investment policy statement for the Pension Plans includes the following: (i) liability hedging assets to reduce funded status risk, (ii) diversified return seeking assets to reduce equity risk, and (iii) establishes different glidepaths specific for each plan to systematically reduce risk as the funded status improves.

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The following table presents information for the plans with a projected benefit obligation and accumulated benefit obligation in excess of plan assets for the years ended December 31, 2024 and 2023: December 31, 2024 December 31, 2023 (In thousands) Projected benefit obligation $ 47,305 $ 49,793 Accumulated benefit obligation 47,305 49,793 Fair value of plan assets 43,651 46,801

The following table presents the components of net periodic (benefit) cost for the years ended December 31, 2024, 2023, and 2022:

Affected Line Item in the Consolidated Year Ended December 31, Statements of Income 2024 2023 2022 (In thousands) Net periodic (benefit) cost, pension plans: Interest cost Other expenses $ 3,603 $ 3,800 $ 2,614 Expected return on plan assets Other expenses ( 4,072 ) ( 3,543 ) ( 4,158 ) Net periodic (benefit) cost, pension plans ( 469 ) 257 ( 1,544 ) Net periodic cost, postretirement plan Other expenses 66 25 8 Net periodic (benefit) cost $ ( 403 ) $ 282 $ ( 1,536 )

The following table presents the weighted-average assumptions used to determine the net periodic (benefit) cost for the pension and other postretirement benefit plans for the years ended December 31, 2024, 2023, and 2022:

Year Ended December 31, 2024 2023 2022 Discount rate 5.14 % 5.43 % 2.77 % Expected return on plan assets 5.51 % 4.80 % 4.43 %

The following table presents the changes in pre-tax accumulated other comprehensive income of the Pension Plans and Postretirement Benefit Plan for the years ended December 31, 2024, 2023, and 2022: Year Ended December 31, 2024 2023 2022 (In thousands) Accumulated other comprehensive income at beginning of year, pension plans $ 2,369 $ 1,974 $ 5,457 Net (loss) gain ( 1,038 ) 395 ( 3,483 ) Accumulated other comprehensive income at end of year, pension plans 1,331 2,369 1,974 Accumulated other comprehensive loss at end of year, postretirement plan ( 77 ) ( 155 ) ( 61 ) Accumulated other comprehensive income at end of year $ 1,254 $ 2,214 $ 1,913

The following are the pre-tax amounts recognized in accumulated other comprehensive income for the years ended December 31, 2024, 2023, and 2022:

Year Ended December 31, 2024 2023 2022 (In thousands) Net actuarial (loss) gain, pension plans $ ( 1,038 ) $ 395 $ ( 3,483 ) Net actuarial gain (loss), other postretirement benefit plan 22 ( 111 ) ( 35 ) Amortization of net loss 56 17 3 Net amount recognized $ ( 960 ) $ 301 $ ( 3,515 )

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The Pension Plans asset allocations by asset category are as follows as of the indicated dates: December 31, 2024 December 31, 2023 Asset category Investment in funds 96 % 97 % Other 4 % 3 % 100 % 100 %

As of December 31, 2024 and 2023, substantially all of the plan assets of $ 72.8 million and $ 77.4 million, respectively, were invested in common collective trusts, which primarily consist of equity securities, MBS, corporate bonds and U.S. Treasuries. Determination of Fair Value The following is a description of the valuation inputs and techniques used to measure the fair value of pension plan assets: Investment in Funds - Investment in common collective trusts have been measured at fair value using the net asset value per unit as a practical expedient and, accordingly, have not been classified in the fair value hierarchy. Fair value is based on the calculated net asset value of shares held by the Plan as reported by the sponsor of the funds. Interest-Bearing Deposits - Interest-bearing deposits consist of money market accounts with short-term maturities and, therefore, the carrying value approximates fair value.

The Corporation does not expect to contribute to the Pension Plans during 2025. The Corporation’s investment policy with respect to the Corporation’s Pension Plans is to optimize, without undue risk, the total return on investment of the Plan assets after inflation, within a framework of prudent and reasonable portfolio risk. The investment portfolio is diversified in multiple asset classes to reduce portfolio risk, and assets may be shifted between asset classes to reduce volatility when warranted by projections of the economic and/or financial market environment, consistent with Employee Retirement Income Security Act of 1974, as amended (ERISA). As circumstances and market conditions change, the Corporation’s target asset allocations may be amended to reflect the most appropriate distribution given the new environment, consistent with the investment objectives. Expected future benefit payments for the plans during the next ten years are as follows:

Amount (In thousands) 2025 $ 6,223 2026 6,203 2027 6,077 2028 5,848 2029 5,796 2030 through 2034 27,141 $ 57,288

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Defined Contribution Plan In addition, FirstBank provides contributory retirement plans pursuant to Section 1081.01 of the Puerto Rico Internal Revenue Code of 2011, as amended (the “PR Tax Code”) for Puerto Rico employees and Section 401(k) of the U.S. Internal Revenue Code for USVI and U.S. employees (the “Plans”). Eligible employees may participate in the Plans after completion of three months of service for purposes of making elective deferral contributions and one year of service with at least 1,000 hours of service for purposes of sharing in the Bank’s matching, qualified matching, and qualified non-elective contributions. The Bank contributes a matching contribution of fifty cents for every dollar up to the first 6 % of the participants’ eligible compensation that a participant contributes to the Plan on a pre-tax basis. The matching contribution of fifty cents for every dollar of the employee’s contribution is comprised of: (i) twenty-five cents for every dollar of the employee’s contribution up to 6 % of the employee’s eligible compensation to be paid to the Plan as of each bi-weekly payroll; and (ii) an additional twenty-five cents for every dollar of the employee’s contribution up to 6 % of the employee’s eligible compensation to be deposited as a lump sum subsequent to the Plan Year. Puerto Rico employees were permitted to contribute up to $ 15,000 for each of the years ended December 31, 2024, 2023 and 2022 (USVI and U.S. employees - $ 23,000 for 2024, $ 22,500 for 2023 and $ 20,500 for 2022). Additional contributions to the Plans may be voluntarily made by the Bank as determined by its Board of Directors. No additional discretionary contributions were made for the years ended December 31, 2024, 2023, and 2022. The Bank had total plan expenses of $ 4.1 million for the year ended December 31, 2024 (2023 - $ 3.4 million; 2022 - $ 3.5 million).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) NOTE 18 – OTHER NON-INTEREST INCOME

A detail of other non-interest income is as follows for the indicated periods: Year Ended December 31, 2024 2023 2022 (In thousands) Non-deferrable loan fees $ 3,692 $ 4,412 $ 3,167 Mail and cable transmission commissions 3,354 3,289 3,100 Gain from insurance proceeds 1,523 379 - Net (loss) gain on equity securities ( 19 ) 21 ( 522 ) Insurance referrals commissions 2,151 2,722 2,660 Gain from sales of fixed assets (1) 103 3,514 924 Gain recognized from legal settlement - 3,600 - Other 8,088 7,851 6,521 Total $ 18,892 $ 25,788 $ 15,850 (1) See Note 6 - “Premises and Equipment” for additional information related to gains from sales of fixed assets.

NOTE 19 – OTHER NON-INTEREST EXPENSES

A detail of other non-interest expenses is as follows for the indicated periods: Year Ended December 31, 2024 2023 2022 (In thousands) Supplies and printing $ 1,732 $ 1,543 $ 1,505 Amortization of intangible assets 6,416 7,735 8,816 Servicing and processing fees 5,694 5,342 5,343 Insurance and supervisory fees 8,639 9,385 9,354 Provision for operational losses 6,780 3,305 2,518 Net periodic (benefit) cost, pension and other postretirement plans ( 403 ) 282 ( 1,536 ) Other 6,074 6,074 4,662 Total $ 34,932 $ 33,666 $ 30,662

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NOTE 20 – INCOME TAXES The Corporation is subject to Puerto Rico income tax on its income from all sources. Under the PR Tax Code, the Corporation and its subsidiaries are treated as separate taxable entities and are not entitled to file consolidated tax returns. However, certain subsidiaries that are organized as limited liability companies with a partnership election are treated as pass-through entities for Puerto Rico tax purposes. Furthermore, the Corporation conducts business through certain entities that have special tax treatments, including doing business through an IBE unit of the Bank and through FirstBank Overseas Corporation, each of which are generally exempt from Puerto Rico income taxation under the International Banking Entity Act of Puerto Rico (“IBE Act”). An IBE that operates as a unit of a bank pays income taxes at the corporate standard rates to the extent that the IBE’s net income exceeds 20% of the bank’s total net taxable income. In addition to the IBE entities, the bank has a wholly owned subsidiary that engages in certain Puerto Rico qualified investing and lending activities that have certain tax advantages under Act 60 of 2019. Under the PR Tax Code, the Corporation is generally not entitled to utilize losses from one subsidiary to offset gains in another subsidiary. Accordingly, in order to obtain a tax benefit from a net operating loss (“NOL”), a particular subsidiary must be able to demonstrate sufficient taxable income within the applicable NOL carry-forward period. Pursuant to the PR Tax Code, the carryforward period for NOLs incurred during taxable years commencing after December 31, 2012 is 10 years. The PR Tax Code provides a dividend received deduction of 100 % on dividends received from “controlled” subsidiaries subject to taxation in Puerto Rico and 85 % on dividends received from other taxable domestic corporations. 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.

The components of income tax expense are summarized below for the indicated periods: Year Ended December 31, 2024 2023 2022 (In thousands) Current income tax expense $ 78,352 $ 88,467 $ 88,296 Deferred income tax expense 14,131 6,105 54,216 Total income tax expense $ 92,483 $ 94,572 $ 142,512

The Corporation maintains an effective tax rate lower than the Puerto Rico maximum statutory tax rate of 37.5 %. The differences between the income tax expense applicable to income before the provision for income taxes and the amount computed by applying the statutory tax rate in Puerto Rico were as follows for the indicated periods: Year Ended December 31, 2024 2023 2022 Amount % of Pretax Income Amount % of Pretax Income Amount % of Pretax Income (Dollars in thousands) Computed income tax at statutory rate $ 146,702 37.5 % $ 149,038 37.5 % $ 167,844 37.5 % Federal and state taxes 10,690 2.7 % 10,008 2.4 % 10,268 2.2 % Benefit of net exempt income ( 40,599 ) ( 10.4 ) % ( 35,153 ) ( 8.8 ) % ( 31,266 ) ( 7.0 ) % Disallowed NOL carryforward resulting from net exempt income (1) - - % - - % 14,221 3.2 % Deferred tax valuation allowance (1) - - % - - % ( 8,410 ) ( 1.9 ) % Share-based compensation windfall ( 823 ) ( 0.2 ) % ( 2,134 ) ( 0.5 ) % ( 1,492 ) ( 0.3 ) % Preferential tax treatment on qualified investing and lending activities ( 19,642 ) ( 5.0 ) % ( 19,125 ) ( 4.8 ) % ( 4,500 ) ( 1.0 ) % Other permanent differences ( 4,284 ) ( 1.1 ) % ( 5,138 ) ( 1.3 ) % ( 3,147 ) ( 0.7 ) % Tax return to provision adjustments 23 - % ( 1,709 ) ( 0.4 ) % ( 519 ) ( 0.1 ) % Other-net 416 0.1 % ( 1,215 ) ( 0.3 ) % ( 487 ) ( 0.1 ) % Total income tax expense $ 92,483 23.6 % $ 94,572 23.8 % $ 142,512 31.8 % (1) During 2022 the Corporation fully utilized certain NOLs which under the PR Tax Code were disallowed for carryforward purposes; therefore, there was no adjustment in 2023 and 2024 in the amount of disallowed NOL carryforward and any related deferred tax valuation allowance.

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Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. Significant components of the Corporation's deferred tax assets and liabilities as of December 31, 2024 and 2023 were as follows: As of December 31, 2024 2023 (In thousands) Deferred tax asset: NOL and capital loss carryforwards $ 36,721 $ 48,633 Allowance for credit losses 88,149 102,005 Alternative Minimum Tax credits available for carryforward 33,220 39,898 Unrealized loss on OREO valuation 4,126 6,360 Share-based compensation cost 4,763 3,569 Legal and other reserves 3,121 4,059 Reserve for insurance premium cancellations 746 824 Differences between the assigned values and tax bases of assets and liabilities recognized in purchase business combinations 8,007 6,690 Unrealized loss on available-for-sale debt securities, net 76,616 82,944 Other 8,808 4,264 Total gross deferred tax assets $ 264,277 $ 299,246 Deferred tax liabilities: Servicing assets 8,282 9,002 Pension Plan assets 472 832 Other 87 97 Total gross deferred tax liabilities 8,841 9,931 Valuation allowance ( 119,080 ) ( 139,188 ) Net deferred tax asset $ 136,356 $ 150,127

Accounting for income taxes requires that companies assess whether a valuation allowance should be recorded against their deferred tax asset based on an assessment of the amount of the deferred tax asset that is “more likely than not” to be realized. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. Management assesses the valuation allowance recorded against deferred tax assets at each reporting date. The determination of whether a valuation allowance for deferred tax assets is appropriate is subject to considerable judgment and requires the evaluation of positive and negative evidence that can be objectively verified. Consideration must be given to all sources of taxable income available to realize the deferred tax asset, including, as applicable, the future reversal of existing temporary differences, future taxable income forecasts exclusive of the reversal of temporary differences and carryforwards, and tax planning strategies. In estimating taxes, management assesses the relative merits and risks of the appropriate tax treatment of transactions considering statutory, judicial, and regulatory guidance. As of December 31, 2024, the Corporation had a net deferred tax asset of $ 136.4 million, net of a valuation allowance of $ 119.1 million, compared to a net deferred tax asset of $ 150.1 million, net of a valuation allowance of $ 139.2 million, as of December 31, 2023. The net deferred tax asset of the Corporation’s banking subsidiary, FirstBank, amounted to $ 136.4 million as of December 31, 2024, net of a valuation allowance of $ 98.5 million, compared to a net deferred tax asset of $ 150.1 million, net of a valuation allowance of $ 111.4 million, as of December 31, 2023. The decrease in the net deferred tax asset was mainly related to the usage of alternative minimum tax credits and the decrease in the ACL. Meanwhile, the decrease in the valuation allowance was related primarily to changes in the market value of available-for-sale debt securities and the expiration of capital loss carryforwards, both which resulted in an equal change in the net deferred tax asset without impacting earnings. The Corporation maintains a full valuation allowance for its deferred tax assets associated with capital loss carryforwards, NOL carryforwards and unrealized losses of available- for-sale debt securities. Management’s estimate of future taxable income is based on internal projections that consider historical performance, multiple internal scenarios and assumptions, as well as external data that management believes is reasonable. If events are identified that affect the Corporation’s ability to utilize its deferred tax assets, the analysis will be updated to determine if any adjustments to the valuation allowance are required. If actual results differ significantly from the current estimates of future taxable income, even if caused by

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adverse macro-economic conditions, the remaining valuation allowance may need to be increased. Such an increase could have a material adverse effect on the Corporation’s financial condition and results of operations. As of December 31, 2024, approximately $ 233.5 million of the deferred tax assets of the Corporation are attributable to temporary differences or tax credit carryforwards that have no expiration date, compared to $ 253.9 million in 2023. The valuation allowance attributable to FirstBank’s deferred tax assets of $ 98.5 million as of December 31, 2024 is related to the change in the market value of available-for-sale debt securities, NOLs attributable to the Virgin Islands jurisdiction, and capital loss carryforwards. The remaining balance of $ 20.6 million of the Corporation’s deferred tax asset valuation allowance non-attributable to FirstBank is mainly related to NOLs at the holding company level. The Corporation will continue to provide a valuation allowance against its deferred tax assets in each applicable tax jurisdiction until the need for a valuation allowance is eliminated. The need for a valuation allowance is eliminated when the Corporation determines that it is more likely than not the deferred tax assets will be realized. The ability to recognize the remaining deferred tax assets that continue to be subject to a valuation allowance will be evaluated on a quarterly basis to determine if there were any significant events that would affect the ability to utilize these deferred tax assets. As of December 31, 2024, of the $ 36.7 million of NOL and capital loss carryforwards deferred tax assets, $ 21.9 million, which are fully valued, have expiration dates ranging from year 2025 through year 2037. From this amount, approximately $ 3.4 million expires in year 2025 and are not expected to be realized.

In 2017, the Corporation completed a formal ownership change analysis within the meaning of Section 382 of the U.S. Internal Revenue Code (“Section 382”) covering a comprehensive period and concluded that an ownership change had occurred during such period. The Section 382 limitation has resulted in higher U.S. and USVI income tax liabilities than we would have incurred in the absence of such limitation. The Corporation has mitigated to an extent the adverse effects associated with the Section 382 limitation as any such tax paid in the U.S. or USVI can be creditable against Puerto Rico tax liabilities or taken as a deduction against taxable income. However, our ability to reduce our Puerto Rico tax liability through such a credit or deduction depends on our tax profile at each annual taxable period, which is dependent on various factors. For 2024, 2023, and 2022, FirstBank incurred current income tax expense of approximately $ 10.6 million, $ 9.9 million, and $ 10.3 million, respectively, related to its U.S. operations. The limitation did not impact the USVI operations in 2024, 2023, and 2022. The Corporation accounts for uncertain tax positions under the provisions of ASC Topic 740, “Income Taxes.” The Corporation’s policy is to report interest and penalties related to unrecognized tax positions in income tax expense. As of December 31, 2024, the Corporation had $ 0.4 million in uncertain tax positions, which includes $ 0.1 million of accrued interest and penalties, acquired from BSPR, which, if recognized, would decrease the effective income tax rate in future periods. During 2024, a $ 0.4 million tax contingency accrual release was recognized as a result of the expiration of the statute of limitation on uncertain tax positions, which were acquired from BSPR. 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. The completion of an audit by the taxing authorities or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Corporation’s liability for income taxes. Any such adjustment could be material to the results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. 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 2018 remain open to examination.

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NOTE 21 – OPERATING LEASES

The Corporation accounts for its leases in accordance with ASC 842 “Leases” (“ASC Topic 842). The Corporation’s operating leases are primarily related to the Corporation’s branches. Our leases mainly have terms ranging from two years to 20 years , some of which include options to extend the leases for up to ten years . Liabilities to make future lease payments are recorded in accounts payable and other liabilities, while ROU assets are recorded in other assets in the Corporation’s consolidated statements of financial condition. As of December 31, 2024 and 2023, the Corporation did not classify any of its leases as a finance lease. Operating lease cost for the year ended December 31, 2024 amounted to $ 18.1 million (2023 - $ 17.3 million; 2022 - $ 18.4 million), and is recorded in occupancy and equipment in the consolidated statements of income. Supplemental balance sheet information related to leases was as follows as of the indicated dates:

As of December 31, 2024 2023 (Dollars in thousands) ROU asset $ 63,159 $ 68,495 Operating lease liability $ 65,801 $ 71,419 Operating lease weighted-average remaining lease term (in years) 7.4 7.0 Operating lease weighted-average discount rate 3.11 % 2.63 %

Generally, the Corporation cannot practically determine the interest rate implicit in the lease. Therefore, the Corporation uses its incremental borrowing rate as the discount rate for the lease. See Note 1 – “Nature of Business and Summary of Significant Accounting Policies” for information on how the Corporation determines its incremental borrowing rate.

Supplemental cash flow information related to leases was as follows: Year Ended December 31, 2024 2023 2022 (In thousands) Operating cash flow from operating leases (1) $ 17,541 $ 17,307 $ 18,202 ROU assets obtained in exchange for operating lease liabilities (2) (3) $ 10,492 $ 4,960 $ 5,744 (1) Represents cash paid for amounts included in the measurement of operating lease liabilities. (2) Represents non-cash activity and, accordingly, is not reflected in the consolidated statements of cash flows. (3) For the years ended December 31, 2024, 2023, and 2022 excludes $ 0.5 million, $ 0.1 million, and $ 3.0 million, respectively, of lease terminations.

Maturities under operating lease liabilities as of December 31, 2024, were as follows: Amount (In thousands) 2025 $ 17,465 2026 16,509 2027 8,508 2028 7,277 2029 5,575 2030 and later years 19,672 Total lease payments 75,006 Less: imputed interest ( 9,205 ) Total present value of lease liability $ 65,801

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NOTE 22 – DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES One of the market risks facing the Corporation is interest rate risk, which includes the risk that changes in interest rates will result in changes in the value of the Corporation’s assets or liabilities and will adversely affect the Corporation’s net interest income from its loan and investment portfolios. The overall objective of the Corporation’s interest rate risk management activities is to reduce the variability of earnings caused by changes in interest rates. As of December 31, 2024 and 2023, all derivatives held by the Corporation were considered economic undesignated hedges. The Corporation records these undesignated hedges at fair value with the resulting gain or loss recognized in current earnings. The following summarizes the principal derivative activities used by the Corporation in managing interest rate risk: Interest Rate Swaps – An interest rate swap is an agreement between two entities to exchange cash flows in the future. The agreements consist of the Corporation offering borrower-facing derivative products using a “back-to-back” structure in which the borrower-facing derivative transaction is paired with an identical, offsetting transaction with an approved dealer-counterparty. By using a back-to-back trading structure, both the commercial borrower and the Corporation are largely insulated from market risk and volatility. The agreements set the dates on which the cash flows will be paid and the manner in which the cash flows will be calculated. Interest Rate Cap Agreements – Interest rate cap agreements provide the right to receive cash if a reference interest rate rises above a contractual rate. The value of the interest rate cap increases as the reference interest rate rises. The Corporation enters into interest rate cap agreements for protection from rising interest rates. Interest Rate Lock Commitments – Interest rate lock commitments are agreements under which the Corporation agrees to extend credit to a borrower under certain specified terms and conditions in which the interest rate and the maximum amount of the residential mortgage loan are set prior to funding. Under the agreement, the Corporation commits to lend funds to a potential borrower, generally on a fixed rate basis, regardless of whether interest rates change in the market. Forward Contracts – Forward contracts are primarily sales of to-be-announced (“TBA”) MBS that will settle over the standard delivery date and do not qualify as “regular way” security trades. Regular-way security trades are contracts that have no net settlement provision and no market mechanism to facilitate net settlement and that provide for delivery of a security within the time frame generally established by regulations or conventions in the marketplace or exchange in which the transaction is being executed. The forward sales are considered derivative instruments that need to be marked to market. The Corporation uses these securities to economically hedge the FHA/VA residential mortgage loan securitizations of the mortgage banking operations. The Corporation also reports as forward contracts the mandatory mortgage loan sales commitments that it enters into with GSEs that require or permit net settlement via a pair-off transaction or the payment of a pair-off fee. To satisfy the needs of its customers, the Corporation may enter into non-hedging transactions. In these transactions, the Corporation generally participates as a buyer in one of the agreements and as a seller in the other agreement under the same terms and conditions. In addition, the Corporation enters into certain contracts with embedded derivatives that do not require separate accounting as these are clearly and closely related to the economic characteristics of the host contract. When the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract, it is bifurcated, carried at fair value, and designated as a trading or non-hedging derivative instrument.

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The following table summarizes for derivative instruments their notional amounts, fair values and location in the consolidated statements of financial condition as of the indicated dates: Asset Derivatives Liability Derivatives Notional Amounts (1) Statements of Financial Condition Location Fair Value Statements of Financial Condition Location Fair Value December 31, December 31, December 31, 2024 2023 2024 2023 2024 2023 (In thousands) Undesignated economic hedges: Interest rate contracts: Interest rate swap agreements $ 8,623 $ 8,969 Other assets $ 164 $ 283 Accounts payable and other liabilities $ 136 $ 255 Interest rate lock commitments 4,413 2,252 Other assets 27 58 Accounts payable and other liabilities - - Forward Contracts: Sales of TBA GNMA MBS pools 21,000 7,000 Other assets 127 - Accounts payable and other liabilities 14 62 $ 34,036 $ 18,221 $ 318 $ 341 $ 150 $ 317 (1) Notional amounts are presented on a gross basis with no netting of offsetting exposure positions.

The following table summarizes the effect of derivative instruments on the consolidated statements of income for the indicated periods: (Loss) Gain Location of (Loss) Gain Year Ended on Derivatives Recognized in December 31, Statements of Income 2024 2023 2022 (In thousands) Undesignated economic hedges: Interest rate contracts: Interest rate swap agreements Interest income - loans $ - $ ( 7 ) $ 28 Written and purchased interest rate cap agreements Interest income - loans - ( 1 ) 2 Interest rate lock commitments Mortgage banking activities ( 21 ) ( 74 ) ( 322 ) Forward contracts: Sales of TBA GNMA MBS pools Mortgage banking activities 175 ( 119 ) 135 Forward loan sales commitments Mortgage banking activities - - ( 20 ) Total gain (loss) on derivatives $ 154 $ ( 201 ) $ ( 177 )

Derivative instruments are subject to market risk. As is the case with investment securities, the market value of derivative instruments is largely a function of the financial market’s expectations regarding the future direction of interest rates. Accordingly, current market values are not necessarily indicative of the future impact of derivative instruments on earnings. This will depend, for the most part, on the shape of the yield curve, and the level of interest rates, as well as the expectations for rates in the future.

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Credit and Market Risk of Derivatives The Corporation uses derivative instruments to manage interest rate risk. By using derivative instruments, the Corporation is exposed to credit and market risk. If the counterparty fails to perform, credit risk is equal to the extent of the Corporation’s fair value gain on the derivative. When the fair value of a derivative instrument contract is positive, this generally indicates that the counterparty owes the Corporation which, therefore, creates a credit risk for the Corporation. When the fair value of a derivative instrument contract is negative, the Corporation owes the counterparty. The Corporation minimizes its credit risk in derivative instruments by entering into transactions with reputable broker dealers ( i.e., financial institutions) that are reviewed periodically by the Management Investment and Asset Liability Committee of the Corporation (the “MIALCO”) and by the Corporation’s Board of Directors. The Corporation also has a policy of requiring that all derivative instrument contracts be governed by an International Swaps and Derivatives Association Master Agreement, which includes a provision for netting. The Corporation has a policy of diversifying derivatives counterparties to reduce the consequences of counterparty default. The cumulative mark-to-market effect of credit risk in the valuation of derivative instruments in 2024, 2023, and 2022 was immaterial. Market risk is the adverse effect that a change in interest rates or implied volatility rates has on the value of a financial instrument. The Corporation manages the market risk associated with interest rate contracts by establishing and monitoring limits as to the types and degree of risk that may be undertaken. In accordance with the master agreements, in the event of default, each party has a right of set-off against the other party for amounts owed under the related agreement and any other amount or obligation owed with respect to any other agreement or transaction between them. As of December 31, 2024 and 2023, derivatives were overcollateralized.

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NOTE 23 – 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. Following is a description of the valuation methodologies used to measure financial instruments at fair value on a recurring basis, as well as the classification of such instruments pursuant to the fair value hierarchy. There were no transfers of assets and liabilities measured at fair value between Level 1 and Level 2 measurements during the years ended December 31, 2024 and 2023.

Financial Instruments Recorded at Fair Value on a Recurring Basis Available-for-sale debt securities and marketable equity securities held at fair value The fair value of investment securities was based on unadjusted quoted market prices (as is the case with U.S. Treasury securities and equity securities with readily determinable fair values), when available (Level 1), or market prices for comparable assets (as is the case with U.S. agencies MBS and U.S. agency debt securities) that are based on observable market parameters, including benchmark yields, reported trades, quotes from brokers or dealers, issuer spreads, bids, offers and reference data, including market research operations, when available (Level 2). Observable prices in the market already consider the risk of nonperformance. If listed prices or quotes are not available, fair value is based upon discounted cash flow models that use unobservable inputs due to the limited market activity of the instrument, as is the case with certain private label MBS held by the Corporation (Level 3). Derivative instruments The fair value of most of the Corporation’s derivative instruments is based on observable market parameters (Level 2) and takes into consideration the credit risk component of paying counterparties, when appropriate. On interest rate caps, only the seller’s credit risk is considered. The Corporation valued the interest rate swaps and caps using a discounted cash flow approach based on the related reference rate for each cash flow.

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Assets and liabilities measured at fair value on a recurring basis are summarized below as of December 31, 2024 and 2023: As of December 31, 2024 As of December 31, 2023 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 $ 59,189 $ - $ - $ 59,189 $ 135,393 $ - $ - $ 135,393 Noncallable U.S. agencies debt securities - 533,296 - 533,296 - 433,437 - 433,437 Callable U.S. agencies debt securities - 1,307,035 - 1,307,035 - 1,874,960 - 1,874,960 MBS - 2,658,967 4,195 (1) 2,663,162 - 2,779,994 4,785 (1) 2,784,779 Puerto Rico government obligation - - 1,620 1,620 - - 1,415 1,415 Other investments - - 1,000 1,000 - - - - Equity securities 4,886 - - 4,886 4,893 - - 4,893 Derivative assets - 318 - 318 - 341 - 341 Liabilities: Derivative liabilities - 150 - 150 - 317 - 317 (1) Related to private label MBS.

The table below presents a reconciliation of the beginning and ending balances of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2024, 2023, and 2022: Available-for-Sale Debt Securities (1) Level 3 Instruments Only 2024 2023 2022 (In thousands) Beginning balance $ 6,200 $ 8,495 $ 11,084 Total gains (losses): Included in other comprehensive income (loss) (unrealized) 830 ( 750 ) ( 401 ) Included in earnings (unrealized) (2) 50 ( 20 ) 434 Purchases 1,000 - - Principal repayments and amortization (3) ( 1,265 ) ( 1,525 ) ( 2,622 ) Ending balance $ 6,815 $ 6,200 $ 8,495 (1) Amounts mostly related to private label MBS. (2) Changes in unrealized gains (losses) included in earnings were recognized within provision for credit losses - expense and relate to assets still held as of the reporting date. (3) For each of the years ended December 31, 2023 and 2022, includes a $ 0.5 million repayment of a matured debt security.

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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 December 31, 2024 and 2023: 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 %

December 31, 2023 Fair Value Valuation Technique Unobservable Input Range Weighted Average Minimum Maximum (Dollars in thousands) Available-for-sale debt securities: Private label MBS $ 4,785 Discounted cash flows Discount rate 16.1 % 16.1 % 16.1 % Prepayment rate 0.0 % 6.9 % 3.7 % Projected cumulative loss rate 0.1 % 10.9 % 4.2 % Puerto Rico government obligation $ 1,415 Discounted cash flows Discount rate 14.1 % 14.1 % 14.1 % Projected cumulative loss rate 25.8 % 25.8 % 25.8 %

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 3 – “Debt Securities” for information on the methodology used to calculate the fair value of this debt security.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Additionally, fair value is used on a non-recurring basis to evaluate certain assets in accordance with GAAP.

For the years ended December 31, 2024, 2023, and 2022, the Corporation recorded losses or valuation adjustments for assets recognized at fair value on a non-recurring basis and still held at the respective reporting dates, as shown in the following table: Carrying value as of December 31, Related to losses recorded for the Year Ended December 31, 2024 2023 2022 2024 2023 2022 (In thousands) Level 3: Loans receivable (1) $ 16,296 $ 15,609 $ 11,437 $ ( 373 ) $ ( 1,839 ) $ ( 736 ) OREO (2) 1,471 3,218 5,461 ( 100 ) ( 416 ) ( 917 ) Premises and equipment (3) - - 1,242 - - ( 218 ) Level 2: Loans held for sale (4) $ 15,276 $ - $ 12,306 $ ( 78 ) $ - $ ( 106 ) (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 haircuts applied on appraisals for the year ended December 31, 2024 were 8 %, and for the year ended December 31, 2023 the haircuts ranged from 16 % to 20 %. There were no haircuts applied on appraisals for the year ended December 31, 2022. (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 haircuts applied on appraisals ranged from 2 % to 44 % for the year ended December 31, 2024 and 1 % to 28 %, for the years ended December 31 , 2023 and 2022. (3) Relates to a banking facility reclassified to held-for-sale and measured at the fair value of the collateral. (4) The Corporation derived the fair value of these loans based on published secondary market prices of MBS with similar characteristics.

Qualitative information regarding the financial instruments measured at fair value on a non-recurring basis using significant unobservable inputs (Level 3) as of December 31, 2024 are as follows: December 31, 2024 Method Inputs Loans Income, Market, Comparable Sales, Discounted Cash Flows External appraised values; probability weighting of broker price opinions; management assumptions regarding market trends or other relevant factors OREO Income, Market, Comparable Sales, Discounted Cash Flows External appraised values; probability weighting of broker price opinions; management assumptions regarding market trends or other relevant factors Premises and equipment Market External appraised value

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The following tables present the carrying value, estimated fair value and estimated fair value level of the hierarchy of financial instruments as of December 31, 2024 and 2023: 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 and forward contracts.

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Total Carrying Amount in Statement of Financial Condition as of December 31, 2023 Fair Value Estimate as of December 31, 2023 Level 1 Level 2 Level 3 (In thousands) Assets: Cash and due from banks and money market investments (amortized cost) $ 663,164 $ 663,164 $ 663,164 $ - $ - Available-for-sale debt securities (fair value) 5,229,984 5,229,984 135,393 5,088,391 6,200 Held-to-maturity debt securities: Held-to-maturity debt securities (amortized cost) 354,178 Less: ACL on held-to-maturity debt securities ( 2,197 ) Held-to-maturity debt securities, net of ACL $ 351,981 346,132 - 235,239 110,893 Equity securities (amortized cost) 44,782 44,782 - 44,782 (1) - Other equity securities (fair value) 4,893 4,893 4,893 - - Loans held for sale (lower of cost or market) 7,368 7,476 - 7,476 - Loans held for investment: Loans held for investment (amortized cost) 12,185,483 Less: ACL for loans and finance leases ( 261,843 ) Loans held for investment, net of ACL $ 11,923,640 11,762,855 - - 11,762,855 MSRs (amortized cost) 26,941 45,244 - - 45,244 Derivative assets (fair value) (2) 341 341 - 341 - Liabilities: Deposits (amortized cost) $ 16,555,985 $ 16,565,435 $ - $ 16,565,435 $ - Long-term advances from the FHLB (amortized cost) 500,000 500,522 - 500,522 - Junior subordinated debentures (amortized cost) 161,700 159,999 - - 159,999 Derivative liabilities (fair value) (2) 317 317 - 317 - (1) Includes FHLB stock with a carrying value of $ 34.6 million, which is considered restricted. (2) Includes interest rate swap agreements, interest rate caps, 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.

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NOTE 24 – 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 years ended December 31, 2024, 2023 and 2022:

Year Ended December 31, 2024 Mortgage Banking Consumer (Retail) Banking Commercial and Corporate Treasury and Investments United States Operations Virgin Islands Operations Total (In thousands) Net interest income (loss) (1) $ 72,455 $ 550,820 $ 157,672 $ ( 112,151 ) $ 77,988 $ 60,695 $ 807,479 Service charges and fees on deposit accounts - 30,608 4,538 - 613 3,060 38,819 Insurance commission income - 12,781 - - 178 611 13,570 Card and processing income - 40,223 899 - 115 5,521 46,758 Other service charges and fees 189 7,238 751 - 2,649 611 11,438 Not in scope of ASC Topic 606 (1) 13,318 5,389 808 455 34 133 20,137 Total non-interest income 13,507 96,239 6,996 455 3,589 9,936 130,722 Total Revenue (Loss) $ 85,962 $ 647,059 $ 164,668 $ ( 111,696 ) $ 81,577 $ 70,631 $ 938,201

Year Ended December 31, 2023 Mortgage Banking Consumer (Retail) Banking Commercial and Corporate Treasury and Investments United States Operations Virgin Islands Operations Total (In thousands) Net interest income (loss) (1) $ 75,774 $ 484,306 $ 142,313 $ ( 31,944 ) $ 70,798 $ 55,863 $ 797,110 Service charges and fees on deposit accounts - 29,946 4,553 - 648 2,895 38,042 Insurance commission income - 11,906 - - 202 655 12,763 Card and processing income - 37,853 1,647 - 99 4,310 43,909 Other service charges and fees 289 8,049 849 - 2,485 893 12,565 Not in scope of ASC Topic 606 (1) 10,924 4,854 4,004 2,125 3,405 103 25,415 Total non-interest income 11,213 92,608 11,053 2,125 6,839 8,856 132,694 Total Revenue (Loss) $ 86,987 $ 576,914 $ 153,366 $ ( 29,819 ) $ 77,637 $ 64,719 $ 929,804

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Year Ended December 31, 2022 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) $ 78,098 $ 463,203 $ 143,776 $ ( 13,964 ) $ 74,168 $ 50,012 $ 795,293 Service charges and fees on deposit accounts - 29,702 4,616 - 607 2,898 37,823 Insurance commission income - 12,733 - - 15 995 13,743 Card and processing income - 35,042 1,501 - 67 3,806 40,416 Other service charges and fees 341 7,021 874 - 2,113 684 11,033 Not in scope of ASC Topic 606 (1) 15,357 4,359 283 ( 161 ) 204 35 20,077 Total non-interest income (loss) 15,698 88,857 7,274 ( 161 ) 3,006 8,418 123,092 Total Revenue (Loss) $ 93,796 $ 552,060 $ 151,050 $ ( 14,125 ) $ 77,174 $ 58,430 $ 918,385 (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 2024, 2023, and 2022, most of the Corporation’s revenue within the scope of ASC Topic 606 was related to performance obligations satisfied at a point in time. The following is a discussion of the revenues under the scope of ASC Topic 606. Service Charges and Fees on Deposit Accounts Service charges and fees on deposit accounts relate to fees generated from a variety of deposit products and services rendered to customers. Charges primarily include, but are not limited to, overdraft fees, insufficient fund fees, dormant fees, and monthly service charges. Such fees are recognized concurrently with the event at the time of occurrence or on a monthly basis, in the case of monthly service charges. These depository arrangements are considered day-to-day contracts that do not extend beyond the services performed, as customers have the right to terminate these contracts with no penalty or, if any, nonsubstantive penalties. Insurance Commissions For insurance commissions, which include regular and contingent commissions paid to the Corporation’s insurance agency, the agreements contain a performance obligation related to the sale/issuance of the policy and ancillary administrative post-issuance support. The performance obligations are satisfied when the policies are issued, and revenue is recognized at that point in time. In addition, contingent commission income may be considered to be constrained, as defined under ASC Topic 606. Contingent commission income is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur or payments are received, thus, is recorded in subsequent periods. For the years ended December 31, 2024, 2023, and 2022, the Corporation recognized contingent commission income at the time that payments were confirmed and constraints were released of $ 3.5 million, $ 2.5 million, and $ 3.2 million, respectively, which was related to the volume of insurance policies sold in the prior year. Card and processing income Card and processing income includes merchant-related income, and credit and debit card fees. For merchant-related income, the determination of income recognition included the consideration of a 2015 sale of merchant contracts that involved sales of point of sale (“POS”) terminals and a marketing alliance under a revenue-sharing agreement. The Corporation concluded that control of the POS terminals and merchant contracts was transferred to the customer at the contract’s inception. With respect to the related revenue-sharing agreement, the Corporation satisfies the marketing alliance performance obligation over the life of the contract, and recognizes the associated transaction price as the entity performs and any constraints over the variable consideration are resolved. Credit and debit card fees primarily represent revenues earned from interchange fees and ATM fees. Interchange and network revenues are earned on credit and debit card transactions conducted with payment networks. ATM fees are primarily earned as a result of surcharges assessed to non-FirstBank customers who use a FirstBank ATM. Such fees are generally recognized concurrently with the delivery of services on a daily basis.

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The Corporation offers products, primarily credit cards, that offer various rewards to reward program members, such as airline tickets, cash, or merchandise, based on account activity. The Corporation generally recognizes the cost of rewards as part of business promotion expenses when the rewards are earned by the customer and, at that time, records the corresponding reward liability. The Corporation determines the reward liability based on points earned to date that the Corporation expects to be redeemed and the average cost per point redemption. The reward liability is reduced as points are redeemed. In estimating the reward liability, the Corporation considers historical reward redemption behavior, the terms of the current reward program, and the card purchase activity. The reward liability is sensitive to changes in the reward redemption type and redemption rate, which is based on the expectation that the vast majority of all points earned will eventually be redeemed. The reward liability, which is included in other liabilities in the consolidated statements of financial condition, totaled $ 9.4 million and $ 8.9 million as of December 31, 2024 and 2023, respectively. Other Fees Other fees primarily include revenues generated from wire transfers, lockboxes, bank issuances of checks and trust fees recognized from transfer paying agent, retirement plan, and other trustee activities. Revenues are recognized on a recurring basis when the services are rendered and are included as part of other non-interest income in the consolidated statements of income.

Contract Balances As of December 31, 2024 and 2023, there were no contract assets recorded on the Corporation’s consolidated financial statements. Moreover, the balances of contract liabilities as of such 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.

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NOTE 25 – 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 December 31, 2024, 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. During the fourth quarter of 2024, the Corporation adopted ASU 2023-07. In addition, as part of the Corporation’s ongoing efforts to enhance internal reporting, in the fourth quarter of 2024, the Corporation refined its segment performance methodology. These refinements align with improvements in internal reporting. Key changes included the following: Support units and Overhead Expense Allocations – Previously, support units and corporate overhead expenses were not allocated to segments due to limitations in identifying appropriate cost drivers. With enhanced granularity in expense drivers, the Corporation implemented a refined allocation methodology based on specific usage, allowing for a reasonable allocation of these expenses to each reportable segment. This change resulted in a decrease in segment income across business lines, as expenses that were previously excluded from segment reporting are now appropriately allocated. Recharacterization of Certain Business Products and Enhancements to FTP – Previously, certain commercial and retail business products were reported under the segment where the product is reported for purposes of credit-risk oversight, rather than the segment responsible for the customer relationship and overall business results. The shift from commercial products to retail business products aligns product classification with the business unit managing the customer relationship. Also, the Corporation refined its FTP methodology to better reflect the cost of funds and transfer pricing mechanics across business lines and recharacterization. These refinements resulted in adjustments to the FTP charges and credits, improving the comparability of segment results. Specifically, the Corporation transitioned to a SOFR/swap curve with term rates-based approach, replacing the previous methodology that was based on historical market rates tied to the portfolio type of each segment. In the aggregate, due to the above, this resulted in lower income from funds loaned to other business segments in the Consumer (Retail) Banking Segment and a related impact on the remaining segments.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) To ensure comparability, prior period segment results have been recast to reflect these refinements. See Note 1 – “Nature of Business and Summary of Significant Accounting Policies” for the accounting policies of the segments and information related to the adoption of ASU 2023-07.

The following tables present information about the reportable segments for the indicated periods: Mortgage Banking Consumer (Retail) Banking Commercial and Corporate Banking Treasury and Investments United States Operations Virgin Islands Operations Total (In thousands) Year Ended December 31, 2024 Interest income $ 127,189 $ 423,738 $ 251,899 $ 116,734 $ 146,637 $ 28,956 $ 1,095,153 Net (charge) credit for transfer of funds ( 54,734 ) 284,065 ( 78,291 ) ( 184,627 ) ( 7,215 ) 40,802 - Interest expense - ( 156,983 ) ( 15,936 ) ( 44,258 ) ( 61,434 ) ( 9,063 ) ( 287,674 ) Net interest income (loss) 72,455 550,820 157,672 ( 112,151 ) 77,988 60,695 807,479 Provision for credit losses - (benefit) expense ( 15,526 ) 95,315 ( 12,928 ) ( 50 ) ( 6,661 ) ( 229 ) 59,921 Non-interest income 13,507 96,239 6,996 455 3,589 9,936 130,722 Non-interest expenses: Employees' compensation and benefits 27,144 139,176 19,538 3,648 28,203 17,986 235,695 Occupancy and equipment 5,858 59,478 5,725 739 7,607 9,020 88,427 Business promotion 1,264 12,331 1,166 727 1,280 877 17,645 Professional fees 7,638 27,618 4,022 1,313 4,383 4,481 49,455 Taxes, other than income taxes 1,808 16,702 2,107 407 503 669 22,196 FDIC deposit insurance 1,832 3,415 2,926 - 962 683 9,818 Net (gain) loss on OREO operations ( 5,553 ) ( 51 ) ( 2,483 ) - ( 4 ) 617 ( 7,474 ) Credit and debit processing expenses - 23,620 764 - 10 3,206 27,600 Other non-interest expenses (1) 2,994 26,159 5,956 2,363 2,640 3,599 43,711 Total non-interest expenses 42,985 308,448 39,721 9,197 45,584 41,138 487,073 Segment income (loss) $ 58,503 $ 243,296 $ 137,875 $ ( 120,843 ) $ 42,654 $ 29,722 $ 391,207 Average interest-earning assets $ 2,134,551 $ 4,042,201 $ 3,518,554 $ 5,850,884 $ 2,176,701 $ 403,365 $ 18,126,256

Mortgage Banking Consumer (Retail) Banking Commercial and Corporate Banking Treasury and Investments United States Operations Virgin Islands Operations Total (In thousands) Year Ended December 31, 2023 Interest income $ 127,154 $ 390,619 $ 229,217 $ 116,382 $ 132,490 $ 27,624 $ 1,023,486 Net (charge) credit for transfer of funds ( 51,380 ) 214,392 ( 71,813 ) ( 111,433 ) ( 12,830 ) 33,064 - Interest expense - ( 120,705 ) ( 15,091 ) ( 36,893 ) ( 48,862 ) ( 4,825 ) ( 226,376 ) Net interest income (loss) 75,774 484,306 142,313 ( 31,944 ) 70,798 55,863 797,110 Provision for credit losses - (benefit) expense ( 7,908 ) 66,072 ( 5,997 ) 20 8,687 66 60,940 Non-interest income 11,213 92,608 11,053 2,125 6,839 8,856 132,694 Non-interest expenses: Employees' compensation and benefits 25,463 133,422 17,426 3,354 25,960 17,230 222,855 Occupancy and equipment 6,015 58,000 4,987 717 6,959 9,233 85,911 Business promotion 1,446 13,787 1,218 881 1,221 1,073 19,626 Professional fees 7,054 25,251 3,501 654 4,300 5,081 45,841 Taxes, other than income taxes 1,382 16,891 1,272 425 552 714 21,236 FDIC deposit insurance 2,879 5,043 4,311 - 1,524 1,116 14,873 Net (gain) loss on OREO operations ( 7,305 ) ( 58 ) 96 - ( 150 ) 279 ( 7,138 ) Credit and debit processing expenses - 22,258 1,457 - 10 2,272 25,997 Other non-interest expenses (1) 2,968 25,878 5,332 2,562 2,393 3,094 42,227 Total non-interest expenses 39,902 300,472 39,600 8,593 42,769 40,092 471,428 Segment income (loss) $ 54,993 $ 210,370 $ 119,763 $ ( 38,432 ) $ 26,181 $ 24,561 $ 397,436 Average interest-earning assets $ 2,149,445 $ 3,770,393 $ 3,299,209 $ 6,186,018 $ 2,072,292 $ 389,489 $ 17,866,846

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Mortgage Banking Consumer (Retail) Banking Commercial and Corporate Banking Treasury and Investments United States Operations Virgin Islands Operations Total (In thousands) Year ended December 31, 2022: Interest income $ 130,844 $ 331,558 $ 177,526 $ 102,991 $ 94,782 $ 24,913 $ 862,614 Net (charge) credit for transfer of funds ( 52,746 ) 161,946 ( 30,130 ) ( 96,178 ) ( 9,065 ) 26,173 - Interest expense - ( 30,301 ) ( 3,620 ) ( 20,777 ) ( 11,549 ) ( 1,074 ) ( 67,321 ) Net interest income (loss) 78,098 463,203 143,776 ( 13,964 ) 74,168 50,012 795,293 Provision for credit losses - (benefit) expense ( 7,936 ) 54,934 ( 17,759 ) ( 434 ) ( 3,073 ) 1,964 27,696 Non-interest income 15,698 88,857 7,274 ( 161 ) 3,006 8,418 123,092 Non-interest expenses: Employees' compensation and benefits 24,460 120,356 16,841 3,168 24,626 16,587 206,038 Occupancy and equipment 6,647 58,036 5,449 814 7,141 10,190 88,277 Business promotion 1,371 12,754 1,061 901 1,104 1,040 18,231 Professional fees 7,716 25,120 3,990 1,292 4,472 5,258 47,848 Taxes, other than income taxes 964 17,105 816 370 419 593 20,267 FDIC deposit insurance 1,346 1,983 1,793 - 565 462 6,149 Net (gain) loss on OREO operations ( 6,391 ) 27 610 - ( 172 ) 100 ( 5,826 ) Credit and debit processing expenses - 19,452 1,292 - 11 1,981 22,736 Other non-interest expenses (1) 2,802 23,644 4,619 2,451 2,531 3,338 39,385 Total non-interest expenses 38,915 278,477 36,471 8,996 40,697 39,549 443,105 Segment income (loss) $ 62,817 $ 218,649 $ 132,338 $ ( 22,687 ) $ 39,550 $ 16,917 $ 447,584 Average interest-earning assets $ 2,240,946 $ 3,372,309 $ 3,165,020 $ 7,300,208 $ 2,069,030 $ 369,591 $ 18,517,104 (1) Consists of communication expenses and the expense categories included in Note 19 - “Other Non-Interest Expenses.”

The following table presents a reconciliation of the reportable segment financial information to the consolidated totals for the indicated periods: Year Ended December 31, 2024 2023 2022 (In thousands) Average assets: Total average interest-earning assets for segments $ 18,126,256 $ 17,866,846 $ 18,517,104 Average non-interest-earning assets (1) 835,100 839,577 861,545 Total consolidated average assets $ 18,961,356 $ 18,706,423 $ 19,378,649 (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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table presents revenues (interest income plus non-interest income) and selected balance sheet data by geography based on the location in which the transaction was originated as of the indicated dates: 2024 2023 2022 (In thousands) Revenues: Puerto Rico $ 1,036,757 $ 980,371 $ 854,587 United States 150,226 139,329 97,788 Virgin Islands 38,892 36,480 33,331 Total consolidated revenues $ 1,225,875 $ 1,156,180 $ 985,706 Selected Balance Sheet Information: Total assets: Puerto Rico $ 16,427,587 $ 16,308,000 $ 16,020,987 United States 2,403,379 2,141,427 2,213,333 Virgin Islands 461,955 460,122 400,164 Loans: Puerto Rico $ 10,036,686 $ 9,745,872 $ 9,097,013 United States 2,295,234 2,022,261 2,088,351 Virgin Islands 429,912 424,718 379,767 Deposits: Puerto Rico (1) $ 13,562,227 $ 13,429,303 $ 12,933,570 United States (2) 1,864,772 1,631,402 1,623,725 Virgin Islands 1,444,299 1,495,280 1,586,172 (1) For 2024, 2023, and 2022, includes $ 33.0 million, $ 420.2 million, and $ 1.4 million, respectively, of brokered CDs allocated to Puerto Rico operations. (2) For 2024, 2023, and 2022, includes $ 445.1 million, $ 363.1 million, and $ 104.4 million, respectively, of brokered CDs allocated to United States operations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) NOTE 26 – SUPPLEMENTAL STATEMENT OF CASH FLOWS INFORMATION Supplemental statement of cash flows information is as follows for the indicated periods:

Year Ended December 31, 2024 2023 2022 (In thousands) Cash paid for: Interest $ 281,733 $ 207,829 $ 65,986 Income tax 93,231 109,512 51,798 Operating cash flow from operating leases 17,541 17,307 18,202 Non-cash investing and financing activities: Additions to OREO 9,278 22,649 15,350 Additions to auto and other repossessed assets 61,766 66,796 45,607 Capitalization of servicing assets 2,342 2,240 3,122 Loan securitizations 125,672 122,732 141,909 Loans held for investment transferred to held for sale 118 3,451 4,632 Loans held for sale transferred to held for investment 1,049 3,424 7,391 Right-of-use assets obtained in exchange for operating lease liabilities, net of lease terminations 9,959 4,861 2,733 Redemption of investment in FBP Statutory Trust II 3,000 662 -

218

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 27 – 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 December 31, 2024 and 2023, the Corporation and FirstBank exceeded the minimum regulatory capital ratios for capital adequacy purposes and FirstBank exceeded the minimum regulatory capital ratios to be considered a well-capitalized institution under the regulatory framework for prompt corrective action. As of December 31, 2024, 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. As part of its response to the impact of COVID-19, on March 31, 2020, the federal banking agencies issued an interim final rule that provided the option to temporarily delay the effects of CECL on regulatory capital for two years, followed by a three-year transition period. The interim final rule provides that, at the election of a qualified banking organization, the day one impact to retained earnings plus 25 % of the change in the ACL (as defined in the final rule) from January 1, 2020 to December 31, 2021 will be delayed for two years and phased-in at 25 % per year beginning on January 1, 2022 over a three-year period, resulting in a total transition period of five years. Accordingly, as of December 31, 2024, the capital measures of the Corporation and the Bank included $ 48.6 million associated with the CECL day one impact to retained earnings plus 25 % of the increase in the ACL (as defined in the interim final rule) from January 1, 2020 to December 31, 2021, and $ 16.2 million remains excluded to be phased-in on January 1, 2025.

219

FIRST BANCORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) The regulatory capital position of the Corporation and FirstBank as of December 31, 2024 and 2023, which reflects the delay in the full effect of CECL on regulatory capital, were as follows:

Regulatory Requirements Actual For Capital Adequacy Purposes To be Well -Capitalized Thresholds Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) As of December 31, 2024 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 % As of December 31, 2023 Total Capital (to Risk-Weighted Assets) First BanCorp. $ 2,403,319 18.57 % $ 1,035,589 8.0 % N/A N/A FirstBank $ 2,376,003 18.36 % $ 1,035,406 8.0 % $ 1,294,257 10.0 % CET1 Capital (to Risk-Weighted Assets) First BanCorp. $ 2,084,432 16.10 % $ 528,519 4.5 % N/A N/A % FirstBank $ 2,113,995 16.33 % $ 582,416 4.5 % $ 841,267 6.5 % Tier I Capital (to Risk-Weighted Assets) First BanCorp. $ 2,084,432 16.10 % $ 776,692 6.0 % N/A N/A FirstBank $ 2,213,995 17.11 % $ 776,554 6.0 % $ 1,035,406 8.0 % Leverage ratio First BanCorp. $ 2,084,432 10.78 % $ 773,615 4.0 % N/A N/A FirstBank $ 2,213,995 11.45 % $ 773,345 4.0 % $ 966,682 5.0 %

220

FIRST BANCORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Cash Restrictions Cash and cash equivalents include amounts segregated for regulatory purposes. The Corporation’s bank subsidiary, FirstBank, is required by the Puerto Rico Banking Law to maintain minimum average weekly reserve balances to cover demand deposits. The amount of those minimum average weekly reserve balances was $ 1.0 billion for the periods that ended December 31, 2024 and 2023. As of December 31, 2024 and 2023, the Bank complied with the requirement. Cash and due from banks as well as other highly liquid securities are used to cover the required average reserve balances. As of December 31, 2024, and as required by the Puerto Rico International Banking Law, the Corporation maintained $ 0.5 million in time deposits, related to FirstBank Overseas Corporation, an international banking entity that is a subsidiary of FirstBank.

Commitments The Corporation’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument on commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. Management uses the same credit policies and approval process in entering into commitments and conditional obligations as it does for on-balance sheet instruments. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any conditions established in the contract. Commitments generally have fixed expiration dates or other termination clauses. Since certain commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. For most of the commercial lines of credit, the Corporation has the option to reevaluate the agreement prior to additional disbursements. In the case of credit cards and personal lines of credit, the Corporation can cancel the unused credit facility at any time and without cause. In general, commercial and standby letters of credit are issued to facilitate foreign and domestic trade transactions. Normally, commercial and standby letters of credit are short-term commitments used to finance commercial contracts for the shipment of goods. The collateral for these letters of credit includes cash or available commercial lines of credit. The fair value of commercial and standby letters of credit is based on the fees currently charged for such agreements, which, as of December 31, 2024 and 2023, were not significant.

The following table summarizes commitments to extend credit and standby letters of credit as of the indicated dates: December 31, 2024 2023 (In thousands) Financial instruments whose contract amounts represent credit risk: Commitments to extend credit: Construction undisbursed funds $ 283,302 $ 234,974 Unused credit card lines 787,849 882,486 Unused personal lines of credit 37,140 38,956 Commercial lines of credit 1,053,938 862,963 Letters of credit: Commercial letters of credit 41,738 69,543 Standby letters of credit 24,635 8,313

221

FIRST BANCORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Contingencies As of December 31, 2024, 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 December 31, 2024, 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 such, during the years ended December 31, 2024 and 2023, the Corporation recorded charges of $ 1.1 million and $ 6.3 million, respectively, in the consolidated statements of income as part of “FDIC deposit insurance” expenses. As of December 31, 2024, the Corporation’s total estimated FDIC special assessment amounted to $ 7.4 million, of which $ 2.4 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.

222

FIRST BANCORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) NOTE 28 – FIRST BANCORP. (HOLDING COMPANY ONLY) FINANCIAL INFORMATION

The following condensed financial information presents the financial position of First BanCorp. at the holding company level only as of December 31, 2024 and 2023, and the results of its operations and cash flows for the years ended December 31, 2024, 2023 and 2022: Statements of Financial Condition As of December 31, 2024 2023 (In thousands) Assets Cash and due from banks $ 13,295 $ 11,452 Other investment securities 1,275 825 Investment in First Bank Puerto Rico, at equity 1,694,000 1,627,172 Investment in First Bank Insurance Agency, at equity 24,121 18,376 Investment in FBP Statutory Trust I 1,289 1,289 Investment in FBP Statutory Trust II (1) 561 3,561 Dividends receivable 619 713 Other assets 459 476 Total assets $ 1,735,619 $ 1,663,864 Liabilities and Stockholders’ Equity Liabilities: Long-term borrowings (1) $ 61,700 $ 161,700 Accounts payable and other liabilities 4,683 4,555 Total liabilities 66,383 166,255 Stockholders’ equity 1,669,236 1,497,609 Total liabilities and stockholders’ equity $ 1,735,619 $ 1,663,864 (1) During 2024, the Corporation redeemed $ 100.0 million, or 84 %, of outstanding TruPS issued by FBP Statutory Trust II (or $ 97.0 million after excluding the Corporation’s interest in the Trust of approximately $ 3.0 million), as further explained in Note 10 - “Non-Consolidated Variable Interest Entities (“VIEs”) and Servicing Assets” and Note 15 - “Stockholders' Equity.”

223

FIRST BANCORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Statements of Income Year Ended December 31, 2024 2023 2022 (In thousands) Income Interest income on money market investments $ 292 $ 228 $ 79 Dividend income from banking subsidiaries 320,366 319,683 368,670 Dividend income from non-banking subsidiaries - 12,000 - Gain on early extinguishment of debt - 1,605 - Other income 360 406 248 Total income 321,018 333,922 368,997 Expense Interest expense on long-term borrowings 11,986 13,535 8,253 Other non-interest expenses 1,704 1,817 1,730 Total expense 13,690 15,352 9,983 Income before income taxes and equity in undistributed earnings of subsidiaries 307,328 318,570 359,014 Income tax expense 1 1 1 Equity in undistributed earnings of subsidiaries (distribution in excess of earnings) ( 8,603 ) ( 15,705 ) ( 53,941 ) Net income $ 298,724 $ 302,864 $ 305,072 Other comprehensive income (loss), net of tax 72,614 165,608 ( 720,779 ) Comprehensive income (loss) $ 371,338 $ 468,472 $ ( 415,707 )

224

FIRST BANCORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Statements of Cash Flows Year Ended December 31, 2024 2023 2022 (In thousands) Cash flows from operating activities: Net income $ 298,724 $ 302,864 $ 305,072 Adjustments to reconcile net income to net cash provided by operating activities: Stock-based compensation 143 145 148 Equity in distributions in excess of earnings of subsidiaries 8,603 15,705 53,941 Gain on early extinguishment of debt - ( 1,605 ) - Net increase in other assets ( 2 ) ( 146 ) ( 688 ) Net decrease in other liabilities ( 201 ) ( 1,998 ) ( 1,902 ) Net cash provided by operating activities 307,267 314,965 356,571 Cash flows from investing activities: Purchase of equity securities ( 450 ) ( 90 ) ( 450 ) Return of capital from wholly-owned subsidiaries (1) - - 8,000 Net cash (used in) provided by investing activities ( 450 ) ( 90 ) 7,550 Cash flows from financing activities: Repurchase of common stock ( 102,393 ) ( 203,241 ) ( 277,769 ) Repayment of junior subordinated debentures ( 97,000 ) ( 19,795 ) - Dividends paid on common stock ( 105,581 ) ( 99,666 ) ( 87,824 ) Net cash used in financing activities ( 304,974 ) ( 322,702 ) ( 365,593 ) Net increase (decrease) in cash and cash equivalents 1,843 ( 7,827 ) ( 1,472 ) Cash and cash equivalents at beginning of year 11,452 19,279 20,751 Cash and cash equivalents at end of year $ 13,295 $ 11,452 $ 19,279 Cash and cash equivalents include: Cash and due from banks $ 13,295 $ 11,452 $ 19,279 Money market instruments - - - $ 13,295 $ 11,452 $ 19,279 (1) During 2022, FirstBank, a wholly-owned subsidiary of First BanCorp., redeemed 0.3 million shares of its preferred stock for a total price of approximately $ 8.0 million.

225

Item 9. Changes in and Disagreements with Accountants on Accounting andFinancial Disclosures

None.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures First BanCorp.’s management, including its Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of First BanCorp.’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the

end of the period covered by this Form 10-K. Based on this evaluation as of the period covered by this Form 10-K, our CEO and CFO concluded that the Corporation’s disclosure controls and procedures were effective and provide reasonable assurance that the information required to be disclosed by the Corporation in reports that the Corporation files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and is accumulated and reported to the Corporation’s management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Management’s Report on Internal Control over Financial Reporting is included in Part II, Item 8 of this Form 10-K and incorporated herein by reference.

The effectiveness of the Corporation’s internal control over financial reporting as of December 31, 2024 has been audited by Crowe LLP, an independent registered public accounting firm, as stated in their report included in Part II, Item 8 of this Annual Report on Form 10-K.

Changes in Internal Control over Financial Reporting

There have been no changes to the Corporation’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d- 15(f) under the Exchange Act) during our most recent quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

Item 9B. Other Information

Rule 10b5-1 Trading Arrangements

During the quarter ended December 31, 2024, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Exchange Act)adoptedorterminateda “Rule 10b5-1 trading arrangement” or “non-Rule10b5-1trading arrangement,” as those terms are defined in Item 408 of Regulation S-K.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

226

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Except as stated below, information in response to this item is incorporated herein by reference from the sections entitled “Information With Respect to Nominees Standing for Election as Directors and With Respect to Executive Officers of the Corporation,” “Corporate Governance and Related Matters,” “Delinquent Section 16(a) Reports” and “Audit Committee Report” contained in First BanCorp.’s definitive Proxy Statement for use in connection with its 2025 Annual Meeting of Stockholders (the “2025 Proxy Statement”) to be filed with the SEC within 120 days of December 31, 2024.

The Company has adopted insider trading policies and procedures regarding securities transactions (the “Insider Trading Policy”)
that apply to all officers, directors, employees, consultants and contractors of the Company and its subsidiaries, as well as the Company itself. The Company believes that the Insider Trading Policy is reasonably designed to promote compliance with insider trading laws, rules and regulations with respect to the purchase, sale and/or other dispositions of the Company’s securities, as well as the applicable rules and regulations of the New York Stock Exchange. A copy of the Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.

Item 11. Executive Compensation.

Information in response to this item is incorporated herein by reference from the sections entitled “Compensation Committee Interlocks and Insider Participation,” “Compensation of Directors,” “Non-Management Chairman and Specialized Expertise,” “Executive Compensation Disclosure – Compensation Discussion and Analysis,” “Executive Compensation Tables and Compensation Information” “Compensation Committee Report” in the 2025 Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Securities authorized for issuance under equity compensation plans

The following table sets forth information about First BanCorp. common stock authorized for issuance under First BanCorp.’s existing equity compensation plan as of December 31, 2024:

(c)

Number of Securities

Remaining Available for

(a)(b)Future Issuance Under

Number of Securities toWeighted Average ExerciseEquity Compensation

be Issued Upon ExercisePrice of OutstandingPlans (Excluding

of Outstanding Options,Options, Warrants andSecurities Reflected in

Plan categoryWarrants and RightsRightsColumn (a)) Equity compensation plans, approved by stockholders549,032(1)$-2,587,453(2)
Equity compensation plans not approved by stockholdersN/AN/AN/A Total549,032$-2,587,453
(1)Amount represents unvested performance-based units granted to executives, with each unit representing one share of the Corporation's common stock. Performance shares will vest on the achievement of a pre-established performance target goal at the end of a three-year performance period. See Note 14 - “Stock-Based Compensation” to the audited consolidated financial

statements included in Part II, Item 8 of this Form 10-K for more information on performance units.
(2)Securities available for future issuance under the First BanCorp. Omnibus Incentive Plan, as amended (the “Omnibus Plan”), which is effective until May 24, 2026. The Omnibus Plan provides for equity-based compensation incentives through the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, and other stockbased awards. As amended, the Omnibus Plan provides for the issuance of up to 14,169,807 shares of common stock, subject to adjustments for stock splits, reorganization and other similar events.

Additional information in response to this item is incorporated by reference from the section entitled “Security Ownership of Certain Beneficial Owners and Management” in the 2025 Proxy Statement.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Information in response to this item is incorporated herein by reference from the sections entitled “Certain Relationships and Related Person Transactions” and “Corporate Governance and Related Matters” in the 2025 Proxy Statement.

227

Item 14. Principal Accountant Fees and Services.

Audit Fees Information in response to this item is incorporated herein by reference from the section entitled “Audit Fees” and “Audit Committee Report” in the 2025 Proxy Statement.

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) List of documents filed as part of this report.
(1)Financial Statements.

The following consolidated financial statements of First BanCorp., together with the reports thereon of First BanCorp.’s independent registered public accounting firm, Crowe LLP (PCAOB ID No. 173), dated February 28, 2025, are included in Part II, Item 8 of this Form 10-K:
– Report of Crowe LLP, Independent Registered Public Accounting Firm.

– Attestation Report of Crowe LLP, Independent Registered Public Accounting Firm on Internal Control over Financial Reporting.

– Consolidated Statements of Financial Condition as of December 31, 2024 and 2023.

– Consolidated Statements of Income for Each of the Three Years in the Period Ended December 31, 2024.

– Consolidated Statements of Comprehensive Income (Loss) for Each of the Three Years in the Period Ended December 31, 2024.

– Consolidated Statements of Cash Flows for Each of the Three Years in the Period Ended December 31, 2024.

– Consolidated Statements of Changes in Stockholders’ Equity for Each of the Three Years in the Period Ended December 31, 2024.

– Notes to the Consolidated Financial Statements.
(2)Financial statement schedules.

All financial schedules have been omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

(b) Exhibits listed in the Exhibit Index below are filed herewith as part of this Annual Report on Form 10-K and are incorporated herein by reference.

Item 16. Form 10-K Summary Not applicable.

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EXHIBIT INDEX

Exhibit No.Description

3.1Restated Articles of Incorporation, incorporated by reference from Exhibit 3.1 of the Registration Statement on Form S- 1/A, filed on October 20, 2011.
3.2Amended and Restated By-Laws, incorporated by reference from Exhibit 3.2 of the Form 8-K, filed on March 31, 2020.
4.1Description of First BanCorp. capital stock.
10.1First BanCorp Omnibus Incentive Plan, as amended, incorporated by reference from Exhibit 99.1 of the Form S-8, filed on June 21, 2016.
10.2Form of Restricted Stock Award Agreement, incorporated by reference from Exhibit 10.2 of the Form 10-K for the year ended December 31, 2023, filed on February 28, 2024 10.3Form of First BanCorp Short-Term Incentive Program, as amended on March 16, 2023, incorporated by reference from Exhibit 10.1 of the Form 10-Q for the quarter ended March 31, 2024, filed on May 9, 2024 10.4Form of First BanCorp Long-Term Incentive Award Agreement, incorporated by reference from Exhibit 10.1 of the Form 10-Q for the quarter ended March 31, 2023, filed on May 10, 2023.
10.5Employment Agreement between First BanCorp and Aurelio Alemán, incorporated by reference from Exhibit 10.6- of the Form 10-K for the year ended December 31, 1998, filed on March 26, 1999.
10.6Amendment No. 1 to Employment Agreement between First BanCorp and Aurelio Alemán, incorporated by reference from Exhibit 10.2 of the Form 10-Q for the quarter ended March 31, 2009, filed on May 11, 2009.
10.7Amendment No. 2 to Employment Agreement between First BanCorp and Aurelio Alemán, incorporated by reference from Exhibit 10.6 of the Form 10-K for the year ended December 31, 2009, filed on March 2, 2010.
10.8Employment Agreement between First BanCorp and Orlando Berges, incorporated by reference from Exhibit 10.1 of the Form 10-Q for the quarter ended June 30, 2009, filed on August 11, 2009.
10.9Letter Agreement between First BanCorp. and Roberto R. Herencia, incorporated by reference from Exhibit 10.1 of the Form 8-K/A, filed on November 2, 2011.
10.10Offer Letter between First BanCorp and Juan Acosta Reboyras, incorporated by reference from Exhibit 10.1 of the Form 8- K, filed on September 3, 2014.
10.11Offer Letter between First BanCorp and Luz A. Crespo, incorporated by reference from Exhibit 10.1 of the Form 8-K, filed on February 9, 2015.
10.12Offer Letter between First BanCorp and John A. Heffern, incorporated by reference from Exhibit 10.1 of the Form 8-K, filed on November 1, 2017.
10.13Offer Letter between First BanCorp and Daniel E. Frye, incorporated by reference from Exhibit 10.1 of the Form 8-K, filed on August 31, 2018.
10.14Offer Letter between First BanCorp and Félix M. Villamil, incorporated by reference from Exhibit 10.1 of the Form 8-K, filed on November 5, 2020.
10.15Offer Letter between First BanCorp and Patricia M. Eaves, incorporated by reference from Exhibit 10.1 of the Form 8-K, filed on April 1, 2021.
10.16Form of Executive Employment Agreement executed by each executive officer, incorporated by reference from Exhibit 10.1 of the Form 10-Q for the quarter ended June 30, 2018, filed on August 9, 2018.
10.17Revised Non-Management and Non-Employee Directors of the Board of Directors Compensation Structure 18.1Preferability letter from Crowe, LLP regarding a change in accounting method dated November 8, 2022, incorporated by reference form Exhibit 18 of the Form 10-Q for the quarter ended September 30, 2022, filed on November 8, 2022.
19.1First BanCorp Policy Statement on Inside Information and Insider Trading 21.1List of First BanCorp’s subsidiaries 23.1Consent of Crowe LLP 31.1CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1CEO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2CFO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 97.1FirstBanCorp Compensation Clawback Policy, incorporated by reference from Exhibit 97.1 of the Form 10-K for the year ended December 31, 2023, filed on February 28, 2024 101.INSInline 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.SCHInline XBRL Taxonomy Extension Schema Document, filed herewith 101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document, filed herewith 101.LABInline XBRL Taxonomy Extension Label Linkbase Document, filed herewith 101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document, filed herewith 101.DEFInline XBRL Taxonomy Extension Definitions Linkbase Document, filed herewith 104The cover page of First BanCorp. Annual Report on Form 10-K for the year ended December 31, 2024, formatted in Inline XBRL (included within the Exhibit 101 attachments)
_________ Management contract or compensatory plan or agreement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Corporation has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

FIRST BANCORP.

By:/s/ Aurelio AlemánDate: 2/28/2025 Aurelio Alemán President, Chief Executive Officer and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Aurelio AlemánDate: 2/28/2025 Aurelio Alemán President, Chief Executive Officer and Director

/s/ Orlando BergesDate: 2/28/2025 Orlando Berges, CPA Executive Vice President and Chief Financial Officer

/s/ Roberto R. HerenciaDate: 2/28/2025 Roberto R. Herencia, Director and Chairman of the Board

/s/ Patricia M. EavesDate: 2/28/2025 Patricia M. Eaves, Director

/s/ Luz A. CrespoDate: 2/28/2025 Luz A. Crespo, Director

/s/ Juan Acosta-ReboyrasDate: 2/28/2025 Juan Acosta-Reboyras, Director

/s/ John A. HeffernDate: 2/28/2025 John A. Heffern, Director

/s/ Daniel E. FryeDate: 2/28/2025 Daniel E. Frye, Director

/s/ Tracey DedrickDate: 2/28/2025 Tracey Dedrick, Director

/s/ Felix VillamilDate: 2/28/2025 Felix Villamil, Director

/s/ Said OrtizDate: 2/28/2025 Said Ortiz, CPA Senior Vice President and Chief Accounting Officer

230

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