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What changed in FIRST BANCORP /PR/'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of FIRST BANCORP /PR/'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+342 added−359 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-28)

Top changes in FIRST BANCORP /PR/'s 2025 10-K

342 paragraphs added · 359 removed · 177 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

64 edited+119 added−29 removed47 unchanged
Biggest changeThe ultimate impact of any changes to certain federal agencies, like the CFPB, is uncertain at this time. 13 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”).
Biggest changeThe Volcker Rule also restricts banking entities from acquiring or retaining any ownership in, or acting as sponsor to, a hedge fund or private equity fund (“covered fund”). The Corporation and the Bank are not engaged in “proprietary trading” as defined in the Volcker Rule.
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 6 acquires and sells mortgages in the secondary market.
Conforming loans are those that meet the standards for sale under the U.S. Federal National Mortgage Association (“FNMA”) and the U.S. Federal Home Loan Mortgage Corporation (“FHLMC”) programs. Loans that do not meet 6 FNMA or FHLMC standards are referred to as non-conforming residential real estate loans. The Mortgage Banking segment also acquires and sells mortgages in the secondary market.
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.
Sustainability 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 sustainability matters, and it has primary oversight of ESG policies, practices and disclosures.
(d/b/a Money Express La Financiera), a finance company specializing in the origination of small loans with 25 offices in Puerto Rico; First Management of Puerto Rico, a Puerto Rico corporation, which holds tax-exempt assets; FirstBank Overseas Corporation, an international banking entity (an “IBE”) organized under the International Banking Entity Act of Puerto Rico; two companies engaged in the operation of certain real estate owned (“OREO”) properties and limited liability corporation organized in 2022 under the laws of the Commonwealth of Puerto Rico and Puerto Rico Tax Incentive Code (“Act 60 of 2019”), which commenced operations in 2023 and engages in qualified investing and lending transactions.
(d/b/a Money Express La Financiera), a finance company specializing in the origination of small loans with 25 offices in Puerto Rico; First Management of Puerto Rico, a Puerto Rico corporation, which holds tax-exempt assets; FirstBank Overseas Corporation, an international banking entity (an “IBE”) organized under the International Banking Entity Act of Puerto Rico; two companies engaged in the operation of certain real estate owned properties and a limited liability corporation organized in 2022 under the laws of the Commonwealth of Puerto Rico and Puerto Rico Tax Incentive Code (“Act 60 of 2019”), which commenced operations in 2023 and engages in qualified investing and lending transactions.
This discussion is qualified in its entirety by reference to the full texts of the laws, regulations and policies described. 10 Bank Holding Company Activities and Other Limitations The Corporation is registered 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.
This discussion is qualified in its entirety by reference to the full texts of the laws, regulations and policies described. 10 Bank Holding Company Activities and Other Limitations The Corporation is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended (the “Bank Holding Company Act”), and is subject to ongoing supervision, regulation, and examination by the Federal Reserve Board.
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%.
These requirements include: (i) a minimum common equity Tier 1 Capital (“CET1”) ratio of 4.5%, plus a 2.5% capital conservation buffer; (ii) a minimum Tier 1 capital ratio of 6.0%, plus a 2.5% capital conservation buffer; (iii) a minimum Total capital (Tier 1 plus Tier 2) ratio of 8.0%, plus a 2.5% capital conservation buffer; and (iv) a required minimum leverage ratio (Tier 1 capital to average on-balance sheet non-risk adjusted assets) of 4%.
Treasury. 14 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.
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.
State-Chartered Non-Member Bank and Banking Laws and Regulations in 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.
State-Chartered Non-Member Bank and Banking Laws and Regulations in General FirstBank is subject to supervision, regulation, and examination by the OCIF, the CFPB and the FDIC, and is subject to comprehensive federal and state (including, for this purpose, the Commonwealth of Puerto Rico) regulations that regulate, among other things, the scope of its businesses, its investments, its reserves against deposits, the timing and availability of deposited funds, and the nature and amount of collateral required for certain loans.
The 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.
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.
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.
BUSINESS SEGMENTS The Corporation has six reportable segments: Mortgage Banking; Consumer (Retail) Banking; Commercial and Corporate Banking; Treasury and Investments; United States Operations; and Virgin Islands Operations. These segments are described below, as well as in Note 21 – “Segment Information” to the audited financial statements included in Part II, Item 8 of this Form 10-K.
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.
As part of the sustainability governance structure set forth in FirstBanCorp.’s Sustainability Policy, which was approved by the Corporation’s Board of Directors in 2022 and subsequently amended, the responsibility of day-to-day management of its sustainability framework and strategy has been delegated to a management-level Sustainability Committee, comprised of leaders from different areas, such as Human Resources, Enterprise Risk Management, Strategic Planning and Investor Relations, Legal and Corporate Affairs, Marketing, Compliance, Finance, and Corporate Internal Audit.
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.
For a discussion of certain significant events that have occurred in the year ended December 31, 2025, please refer to “Significant Events” included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-K.
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.
As of December 31, 2025, the Corporation also had presence in the state of Florida and in the USVI and the BVI. Puerto Rico banks are subject to the same federal laws, regulations and supervision that apply to similar institutions on the United States mainland.
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.
The Sustainability Committee is tasked with aligning priorities and initiatives for the year, setting and monitoring long-term objectives, and leading the annual reporting process on sustainability-related topics. The Sustainability Committee reports to the Corporate Governance and Nominating Committee of the Board of Directors.
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”).
In January 2021, major legislative amendments to U.S. anti-money laundering requirements became effective through the enactment of Division F of the National Defense Authorization Act for fiscal year 2021, otherwise known as the Anti-Money Laundering Act of 2020 (the “AML Act”). The AML Act significantly modernized the U.S.
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.
Consumer Financial Protection Bureau (“CFPB”) The CFPB has primary examination and enforcement authority over FirstBank and other banks with assets exceeding $10 billion with respect to consumer financial products and services.
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 the event of a bank holding company’s bankruptcy, any commitment made by the bank holding company to a federal bank regulatory agency to maintain capital of a subsidiary bank will be assumed by the bankruptcy trustee and accorded priority for payment.
In addition, any capital loans by a bank holding company to any of its subsidiary banks must be subordinated in right of payment to deposits and to certain other indebtedness of such subsidiary bank. As of December 31, 2024, and the date hereof, FirstBank was and is the only banking subsidiary of the Corporation.
In addition, any capital loans by a bank holding company to any of its subsidiary banks must be subordinated in right of payment to deposits and to certain other indebtedness of such subsidiary bank. As of December 31, 2025, and the date hereof, FirstBank was and is the Corporation’s sole banking subsidiary.
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
The 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 Item 1C. Cybersecurity to this Form 10-K.
Financial Privacy and Cybersecurity The Gramm-Leach-Bliley Act limits the ability of financial institutions to disclose non-public information about consumers to non- affiliated 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.
Financial Privacy and Cybersecurity The Gramm-Leach-Bliley Act limits the ability of financial institutions to disclose non-public consumer information to non- affiliated third parties, requires disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to a non-affiliated third party.
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.
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.
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.
USA PATRIOT Act and Other Anti-Money Laundering Requirements As a regulated depository institution, FirstBank is subject to the Bank Secrecy Act, which requires financial institutions to file suspicious activity and currency transaction reports that are designed to assist in the detection and prevention of money laundering, terrorist financing and other criminal activities.
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.
SUPERVISION AND REGULATION The Corporation and FirstBank, its bank subsidiary, are subject to comprehensive federal and Puerto Rican supervision and regulation that govern all aspects of the Corporation’s and the Bank’s activities, including commercial and consumer lending, deposit taking, management, governance and other activities.
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”).
As of December 31, 2025, the Corporation had total assets of $19.1 billion, including loans held for investment of $13.1 billion, total deposits of $16.7 billion, and total stockholders’ equity of $2.0 billion. The Corporation has two wholly-owned subsidiaries: FirstBank and FirstBank Insurance Agency, Inc. (“FirstBank Insurance Agency”).
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.
Dividend Restrictions The Federal Reserve Board generally restricts bank holding companies from paying cash dividends unless its net income available to common shareholders for the past four quarters, net of dividends previously paid during that period, has been sufficient to fully fund the dividends and the prospective rate of earnings retention appears to be consistent with the organization’s capital needs, asset quality, and overall current and prospective financial condition.
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.
As a result, the Corporation has elected to be a financial holding company under the Bank Holding Company Act and may engage, directly or indirectly, in any activity that is determined to be (i) financial in nature, (ii) incidental to such financial activity, or (iii) complementary to a financial activity and does not pose a substantial risk to the safety and soundness of depository institutions or the financial system generally.
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.
Under the Federal Reserve Board’s regulatory capital rule (Regulation Q), a bank holding company must maintain a capital conservation buffer of CET1 capital in an amount greater than 2.5% of total risk- weighted assets to avoid limits on capital distributions.
The Corporation is 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.
In this capacity, the Corporation is required to file periodic and annual reports as well as other information regarding its own business operations and those of its subsidiaries. The Bank Holding Company Act also permits a bank holding company to elect to become a financial holding company and engage in a broader range of financial activities.
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.
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.
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.
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.
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.
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.
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.
AML and counter-terrorist financing framework, including the creation of a national database of corporate beneficial ownership along with significantly enhanced reporting 13 requirements, increased penalties for Bank Secrecy Act violations, clarification of Suspicious Activity Report filing and sharing requirements, and provisions addressing the adverse consequences of “de-risking,” namely, the practice of financial institutions’ termination or limitation of business relationships with clients or classes of clients in order to manage the risks associated with such clients.
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.
The attraction and selection process includes: ● Posting vacancies internally and externally; ● Building employer brand through digital presence, professional events and job fairs, and university partnerships; ● Collaboration with hiring managers to ensure accurate role alignment to accelerate the recruitment process and attraction of top candidates with the right fit for the role; ● A robust management information system to enhance recruitment effectiveness and provide candidates with unique experience; and ● A robust on-boarding process to engage and support new employees’ induction process, including assignment of a “FirstPal” from day one to help with the organizational culture transition and learning process.
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.
Employees As of December 31, 2025, the Corporation and its subsidiaries had 3,218 regular employees representing a 3.4% increase in overall headcount from December 31, 2024. The Corporation had 2,854 employees in the Puerto Rico region, 206 employees in the Florida region, and 158 employees in the Virgin Islands region.
As 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”).
As part of regulatory relief measures implemented in response to the economic impact of COVID-19, the federal banking agencies issued an interim final rule on March 31, 2020, providing the option to temporarily delay the regulatory capital effects of current expected credit losses (“CECL”). This transition framework provided for a total five-year phase-in period, which ended on January 1, 2025.
The Corporation 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.
These programs are reviewed annually to ensure alignment with business strategies, performance objectives, and sound risk management practices. The Corporation’s Management Award Program recognizes and rewards outstanding performance for exempt employees who do not participate in other variable pay programs.
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.
In 2025, the Corporation published its most recent First Bancorp Corporate Sustainability Report for 2024 (the “2024 Report”), which provides 7 disclosure on a wide range of ESG topics, including governance; business ethics and compliance; responsible marketing and sales practices; sustainable and accessible finance; responsible banking, including details as to data security and cyber management; people and culture; community impact; and environmental responsibility.
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 life insurance and disability plans, as well as a defined contribution retirement plan in which both employees and the employer contribute. For employees in the Puerto Rico region, the Corporation provides an additional true-up contribution.
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.
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 consider the rating when reviewing certain applications such as mergers, branch establishment, and other activities.
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.
The federal banking regulators regularly issue guidance to strengthen cybersecurity risk management standards. Financial institutions are expected to maintain multiple lines of defense and robust risk management processes to address potential cyber threats.
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.
Our Corporate Information Security Program (“CISP”) reflects these requirements and outlines our overall vision, direction, and governance efforts to protect the confidentiality, integrity, and availability of customer information and prevent access by unauthorized personnel. In July 2023, the SEC adopted rules requiring registrants to disclose material cybersecurity incidents and provide annual reporting regarding cybersecurity risk management, strategy, and governance.
Retail deposits gathered through each branch serve as the primary funding sources for the segment’s lending activities. 7 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.
CORPORATE SUSTAINABILITY PROGRAM OVERVIEW The Corporation is committed to supporting its clients, employees, shareholders and communities it serves. Its Corporate Sustainability program, which includes environmental, social and governance (“ESG”) matters, builds on its core values, including being a socially responsible company. The Corporation sees effective ESG management as a critical step towards a sustainable and successful future.
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.
Registrants must report cybersecurity material incidents on Item 1.05 of Form 8-K within four business days of determining materiality, describing the incident’s nature, scope, and timing, as well as its material impact or reasonably likely material impact on the registrant.
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.
Oversight The Human Resources Division, led by the Human Resources Director who reports directly to the Corporation’s Chief Consumer Officer and Corporate Chief of Staff, 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 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.
The Volcker Rule Section 13 of the Bank Holding Company Act, commonly known as the Volcker Rule, generally prohibits a banking entity, including the Corporation and the Bank, from engaging in short-term proprietary trading of certain securities, derivatives, commodity futures, and options on these instruments for its own account.
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.
Under federal law and Federal Reserve Board policy, a bank holding company, such as the Corporation, is expected to act as a source of strength to its banking subsidiaries, including by providing capital and other support as necessary.
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.
The CFPB supervises “covered persons” (broadly defined to include any person offering or providing a consumer financial product or service and any affiliated service provider) for compliance with federal consumer financial laws, including the Equal Credit Opportunity Act, the Truth in Lending Act (“TILA”) and the Real Estate Settlement Procedures Act (“RESPA”).
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 addition to these learning opportunities, we support professional development and career growth, including the internal career advancement, performance management processes, annual talent review, and robust succession planning.
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.
In addition, the Corporation has reviewed its investments and concluded that they are not considered covered funds under the Volcker Rule. Community Reinvestment Act The CRA encourages banks to help meet the credit needs of communities they serve, including low- and moderate-income individuals, consistent with the safe and sound operation of the bank.
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.
These requirements are redesigned to align U.S. regulatory capital requirements with international regulatory capital standards adopted by the Basel Committee on Banking Supervision (“Basel Committee”), in particular, the international capital accord known as “Basel III.” Under the Basel III rules, the Corporation must maintain certain minimum capital ratios to be considered adequately capitalized and to avoid the regulatory limitations described above.
In October 2023, the U.S. federal banking regulatory agencies issued a final rule to strengthen and modernize their regulations implementing the CRA.
In October 2023, the U.S. federal banking regulatory agencies issued a final rule to strengthen and modernize their regulations implementing the CRA, originally scheduled to take effect on April 1, 2024, with most of its provisions applicable beginning January 1, 2026 and data reporting required in 2027.
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.
The OCIF, the CFPB and the FDIC conduct periodic examinations of FirstBank to assess its financial condition, ensure the maintenance of safe and sound banking practices, and evaluate compliance with applicable statutory and regulatory requirements. Supervision by the FDIC is also intended for the protection of the Deposit Insurance Fund (“DIF”) and depositors.
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.
The CFPB also has authority to prescribe rules applicable to covered persons and service providers in connection with consumer financial products and services. 12 Among other actions, the CFPB has issued mortgage servicing regulations applicable to the Bank, addressing consumer notices regarding delinquency, foreclosure alternatives, modification applications, interest rate adjustments and options for avoiding “force- placed” insurance, as well integrated disclosure requirements under TILA and RESPA applicable to mortgage loan origination and closing.
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.
As part of this regulatory framework, the Corporation and the Bank are subject to extensive consumer financial protection laws, regulatory, legal, and supervisory requirements, which continue to change in response to new legislative or regulatory actions. See Part I, Item 1, “Business–General” above for additional regulatory oversight and supervision of FirstBank Insurance Agency.
FirstBank Well-Capitalized 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. 12 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.
FirstBank Well-Capitalized Minimum As of December 31, 2025 Total capital to risk-weighted assets 18.01% 17.61% 10.00% CET1 Capital to risk-weighted assets 16.76% 15.60% 6.50% Tier 1 capital to risk-weighted assets 16.76% 16.35% 8.00% Leverage ratio (1) 11.58% 11.30% 5.00% _______________ (1) Tier 1 capital to average assets.
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.
Stress-Testing and Capital Planning Requirements Federal regulations currently do not impose formal stress-testing requirements on banking organizations with total assets of less than $100 billion, such as the Corporation and FirstBank. Instead, the capital planning and risk management practices of such banks are reviewed through the regular supervisory process.
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 First BanCorp.
The Corporation and the Bank elected to utilize this transition option and, as of January 1, 2025, have fully recognized the impact of CECL in their regulatory capital ratios. 11 The following table presents the Corporation’s and FirstBank’s regulatory capital ratios as of December 31, 2025, based on Federal Reserve and FDIC guidelines: Banking Subsidiary First BanCorp.
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.
Our learning and development program strives to align with both employees’ and the organization’s needs, offering online, in- person, and virtual training, as well as development activities, special projects, and partial tuition reimbursement to complete a bachelor’s or master’s degree to eligible employees.
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.
Enforcement actions include civil monetary penalties, cease-and-desist or removal orders, and injunctive actions which may be imposed for violations of laws and regulations, or for unsafe or unsound practices. Other actions or failure to act may provide the basis for enforcement action, including the filing of misleading or untimely reports with regulatory authorities.
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.
Management must ensure effective procedures to respond to and recover operations after a cyber-attack and establish processes to restore data and business functions if a critical service provider is impacted.
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.
However, several banking industry groups filed a lawsuit challenging the rule, and in March 2024 a federal judge granted an injunction delaying its effective date. In July 2025, the FDIC, Federal Reserve Board, and OCC announced their intent to rescind the 2023 CRA final rule and revert to the 1995 CRA regulations.
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.
Work-life balance remains a key priority; therefore, the Corporation offers various paid time-off benefits, including vacation, sick leave, maternity and paternity leave, bereavement leave, marriage leave, personal days, and flexible work arrangements, including hybrid work arrangements.
The 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.
The Corporation’s voluntary turnover rate declined to 9.59% in 2025, compared to 10.91% in 2024, with turnover primarily attributable to hourly employees in call centers, collections centers and branches. Turnover among high performers improved, decreasing to 2.4% in 2025 from 3.6% for 2024, underscoring the effectiveness of the Corporation’s compensation, engagement, and retention strategies.
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.
New supervisors completed programs focused on foundational supervision, leadership, communication, and HR policies, while the leadership curriculum continued to strengthen both technical and people -management skills. The Leadership Development program, which incorporates structured feedback from instructors and peers, has reached 63% of current leaders since its launch.
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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.
Added
The limited liability corporation organized under the laws of Act 60 of 2019 has one wholly-owned subsidiary organized under such laws.
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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.
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During 2021, the Corporation adopted an ESG framework to guide its corporate sustainability strategy and governance.
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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.
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As of December 31, 2025, approximately 66% of the total employee population and 58% of management positions were women.
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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.
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In addition to base salaries, certain job positions are eligible to participate in variable pay programs designed to align employee performance with the Corporation’s strategic and financial objectives. The Corporation maintains incentive programs for revenue generation and sales functions to support business units.
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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 9 of directors.
Added
In addition, the Corporation maintains a long-term incentive plan for top-performing leaders and employees, as well as identified high-potential talent, to promote sustained performance, leadership development, and long-term retention. These programs have fostered a stable and experienced workforce, reflected in an average tenure of 11 years as of December 31, 2025.
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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.
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The Learning and Development priorities cover five areas: Fundamentals, Governance and Compliance, Technical and Specialized Development, Professional Development, and Leadership. In 2025, we delivered more than 114,000 training hours across more than 1,800 courses through all learning modalities.
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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.
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We also encourage employees to participate in community initiatives, volunteering over 2,800 hours supporting more than 35 organizations in 202 5. 9 Health & Wellness First BanCorp. provides comprehensive health and wellness benefits designed to support employees’ occupational, physical, emotional, and financial well-being.
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In addition, the Corporation offers a fitness facility in its main offices which allows employees to participate in fitness activities including instructor- led wellness sessions. Additionally, in 2024 we included in-house chiropractic services and wellness tours to promote healthy lifestyle practices.
Added
Benefits include health, dental and vision insurance offered through multiple insurance providers, enabling employees to select coverage options that best meet their individual and family needs. The Corporation also offers an Employee Assistance Program to provide holistic support and resources addressing a broad range of employees’ needs.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWhile 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.
Biggest changeWhile we maintain a CISP that continuously monitors cyber-related risks and ultimately ensures protection for the processing, transmission, and storage of confidential, proprietary, and other information in our computer systems and networks, as well as a Vendor Management Program to oversee third party and vendor risks, there is no guarantee that we will not be exposed to or be affected by a cybersecurity incident. 29 Cyber threats are rapidly changing, and future attacks or breaches could lead to other security breaches of the networks, systems, or devices that our customers use to access our integrated products and services, which, in turn, could result in unauthorized disclosure, release, gathering, monitoring, misuse, loss or destruction of confidential, proprietary, and other information (including account data information) or data security compromises.
As 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.
As discussed in Part I, Item 1, “Business” of this Form 10-K, the Corporation is currently subject to the interagency guidance governing the incentive compensation activities of regulated banks and bank holding companies, and other financial regulators have also implemented regulations regarding compensation practices.
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.
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. 24 Deterioration in collateral values may result in additional losses.
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.
The resolution of legal actions or regulatory matters, when unfavorable, has had, and could in the future have, a material adverse effect on our consolidated results of operations for the quarter in which such actions or matters are resolved or a reserve is established. 27 Our businesses may be negatively affected by adverse publicity or other reputational harm.
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. 29 Recognition of deferred tax assets is dependent upon the generation of future taxable income by the Bank.
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.
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 30 ownership change and, consequently, a Section 382 limitation.
It is possible that the utilization of our U.S. and USVI NOLs could be further limited due to future changes in our stock ownership, as a result of either sales of our outstanding shares or issuances of new shares that could separately or cumulatively trigger an ownership change and, consequently, a Section 382 limitation.
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.
As a holding company, dividends from FirstBank, our banking subsidiary, have provided a substantial portion of our cash flow used to service the interest payments on our obligations. FirstBank is limited by law in its ability to make dividend payments and other distributions to us based on its earnings and capital position.
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.
Internal Revenue Code under the “mirror system” established by the Naval Service Appropriations Act of 1922. However, the USVI jurisdiction also imposes an additional 10% surtax on the USVI tax liability, if any. 28 These tax laws are complex and subject to different interpretations.
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’s judgments regarding tax accounting policies and the resolution of potential 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.
In the event of a bankruptcy or insolvency proceeding involving one of such counterparties, we may experience 26 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 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.
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. 27 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.
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.
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 25 well as the activities of our customers.
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.
Should these events affect us, or the customers, vendors or 28 counterparties with which we conduct business, our consolidated results of operations could be negatively affected.
Should these events affect us, or the customers, vendors or counterparties with which we conduct business, our consolidated results of operations could be negatively affected.
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.
We recognize periodic credit loss expenses on loans, which lead to reductions in our income from operations, in order to maintain our ACL on loans at a level that our management deems to be appropriate based upon an assessment of the quality of the loan and lease portfolios.
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. 33 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.
Our failure to satisfy these restrictions and guidelines could expose us to adverse regulatory criticism, lowered supervisory ratings, and restrictions on our operations and acquisition activities. 31 We are subject to regulatory capital adequacy guidelines, and, if we fail to meet these guidelines, our business and financial condition will be adversely affected. We are subject to stringent regulatory capital requirements.
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.
The Corporation’s credit quality and the value of the portfolio of Puerto Rico government securities have been, and in the future may be, adversely affected by Puerto 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.
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.
Natural disasters, whose nature and severity may be impacted by climate change, such as hurricanes, floods, extreme cold events and other adverse weather conditions; public health crises; political crises, such as terrorist attacks, war, labor unrest, other political instability, trade policies, tariffs and sanctions, including the ongoing conflict in Ukraine, the conflict in the Middle East, recent conflicts in South America, and the possible expansion of such conflicts in surrounding areas and potential geopolitical consequences; negative global climate patterns, especially in water stressed regions; or other catastrophic events, such as fires or other disasters occurring at our locations, whether occurring in Puerto Rico, the U.S., or internationally, could cause a significant adverse effect on the economy and disrupt our operations.
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).
If we fail to comply with the requirements from our regulators, we may become subject to regulatory enforcement action and other adverse regulatory actions that might have a material and adverse effect on our operations. The FDIC insures deposits at FDIC-insured depository institutions up to certain limits (currently, $250,000 per depositor at same depository institution).
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.
Although the Corporation and FirstBank met well-capitalized capital ratios as of December 31, 2025, and we expect both companies will continue to exceed the minimum risk-based and leverage capital ratio requirements for well-capitalized status under the current capital rules, we cannot assure that we will remain at such levels.
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.
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. 23 A deterioration in economic conditions in the U.S.
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.
Also, as of December 31, 2025, the outstanding balance of construction loans funded through conduit financing structures to support the federal programs of Low-Income Housing Tax Credit (“LIHTC”) combined with Community Development Block Grant- Disaster Recovery (“CDBG-DR”) funding amounted to $92.4 million. The main objective of these programs is to spur development in new or rehabilitated and affordable rental housing.
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.
In addition, the Corporation had $290.0 million of long-term FHLB advances outstanding as of December 31, 2025, with an average remaining term to maturity of 1.36 years. Although FirstBank has historically been able to replace maturing deposits and advances, we may not be able to replace these funds in the future if our financial condition or general market conditions change.
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.
Our business is affected by the value of the assets securing our loans or underlying our investments. We had a commercial and construction loan portfolio held for investment in the amount of $6.5 billion as of December 31, 2025.
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.
We could also be subject to adverse actions or responses by governmental actors (such as anti-ESG legislation or retaliatory legislative treatment) or consumers (through boycotts or negative publicity campaigns) that could adversely affect our reputation, results of operations and financial condition.
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.
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.
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.
We may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to our customers. Failure to effectively respond to technological change in the financial services industry could have a material adverse effect on our business, financial condition, and results of operations.
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.
For example, we may be exposed to negative publicity based on the identity and activities of those to whom we lend or with whom we otherwise do business, and on the public’s view of the ESG-related approach and performance of our customers and business partners.
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 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.
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).
In addition to municipalities, the total direct exposure also included $8.7 million in a loan extended to an affiliate of PREPA, $32.9 million in loans to a public corporation of the Puerto Rico government, and an obligation of the Puerto Rico government, specifically a residential pass-through MBS issued by the PR Housing Finance Authority (“PRHFA”), at an amortized cost of $2.7 million as part of its available-for-sale debt securities portfolio (fair value of $1.6 million as of December 31, 2025).
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 impact on our customers will likely vary depending on their specific attributes, including reliance on our role in fossil fuel activities. The Corporation may face reductions in creditworthiness on the part of some customers or in the value of assets securing loans.
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.
Item 1A. Risk Factors Below is a discussion about material risks and uncertainties that could impact the Corporation’s businesses, results of operations, financial condition, liquidity, and capital position, and could cause actual results to differ materially from those projected in any forward-looking statements.
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.
As of December 31, 2025, approximately $211.3 million of the exposure consisted of loans and obligations of municipalities in Puerto Rico that are supported by assigned property tax revenues and for which, in most cases, the good faith, credit and unlimited taxing power of the applicable municipality have been pledged to their repayment, and $42.2 million consisted of loans and obligations which are supported by one or more specific sources of municipal revenues.
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.
FirstBank relies primarily on customer deposits, the issuance of brokered CDs, and advances from the FHLB of New York to maintain its lending activities and to replace certain maturing liabilities. As of December 31, 2025, we had $593.6 million in brokered CDs outstanding, representing approximately 4% of our total deposits.
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.
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.
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.
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.
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.
In addition, as of December 31, 2025, the Corporation had $67.1 million in exposure to residential mortgage loans guaranteed by the PRHFA. The Corporation operates in various jurisdictions highly dependent on federal funding programs.
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.
During the fourth quarter of 2025, a qualitative goodwill impairment analysis determined that it was more -likely-than-not that the fair value of our reporting units exceeded their carrying value; therefore, no goodwill impairment was recorded. As of December 31, 2025, our goodwill book value was $38.6 million, all recorded at FirstBank.
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.
As of December 31, 2025 and 2024, the Corporation had $138.7 million and $100.4 million, respectively, in loans to USVI public corporations, all of which were performing as of that date.
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.
As of December 31, 2025, $2.8 billion of our commercial and construction loan portfolio held for investment, or 21% of the total loan portfolio held for investment, consisted of commercial mortgage and construction loans, of which $1.9 billion was in the Puerto Rico region.
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.
Net interest income may be affected by prepayments on MBS. Generally, when rates rise, prepayments of principal and interest will decrease, and the duration of MBS securities will increase and vice versa. Conversely, when rates fall, prepayments of principal and interest will increase, and the duration of MBS will decrease.
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.
During periods of rising interest rates, the refinancing of many mortgage products tends to decrease as the economic incentives for borrowers to refinance their existing mortgage loans are reduced.
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.
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.
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.
Approximately $394.0 million, or 66% in brokered CDs mature 25 over the twelve months ending December 31, 2025, and the average remaining term to maturity of the brokered CDs outstanding as of December 31, 2025 was approximately 1.0 year. None of these brokered CDs are callable at the Corporation’s option.
We are also subject to increased scrutiny of our compliance with trade and economic sanctions requirements and rules enforced by OFAC.
We are also subject to increased scrutiny of compliance with economic and trade sanctions administered by OFAC.
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’s ability to compete effectively depends on the relative performance of its products, the degree to which the features of its products 22 appeal to customers, and the extent to which the Corporation meets clients’ needs and expectations.
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.
Like most financial institutions, FirstBank significantly depends on technology to deliver its products and other services and to otherwise conduct business. To remain technologically competitive and operationally efficient, FirstBank invests in system upgrades, new technological solutions, and other technological initiatives. Competitors may introduce new products, services, or platforms that leverage emerging technologies or new industry standards.
If 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.
If our AML, sanctions, or related compliance programs are deemed inadequate, we could be subject to liability, including fines and regulatory actions, which may include restrictions on our ability to pay dividends and the necessity to obtain regulatory approvals to proceed with certain aspects of our business plan, including our acquisition plans.
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.
Our business is highly dependent on the security, reliability, and effectiveness of our technology infrastructure and data management systems, as well as those of our customers, vendors, and other third parties.
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.
Although non-performing assets decreased by $4.2 million to $114.1 million as of December 31, 2025, or 4%, from $118.3 million as of December 31, 2024, we continue to have a relevant amount of nonaccrual loans.
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.
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.
Any of the foregoing consequences could materially and adversely affect our businesses and results of operations. 32 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.
The continued adoption of these and other emerging technologies could materially and adversely affect our business and results of operations. 30 The Corporation is subject to stringent and changing privacy laws, regulations, and standards as well as policies, contracts, and other obligations related to data privacy and security.
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.
The Community Reinvestment Act, the Equal Credit Opportunity Act, the Fair Housing Act, and other fair lending laws and regulations impose nondiscriminatory lending requirements on financial institutions. These laws are enforced by the U.S.
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.
Monetary policies and regulations of the Federal Reserve Board could adversely affect our business, financial condition and results of operations. In addition to general economic conditions, our earnings and growth are significantly influenced by the monetary policies and regulatory actions of the Federal Reserve Board.
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.
Any failure by us or our business partners to comply with applicable laws, rules, and regulations could result in investigations or actions against us by governmental entities, private claims and litigation, fines, penalties or other liabilities. Such outcomes could increase our expenses, expose us to liabilities, and harm our reputation, and have a material adverse effect on our business.
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.
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.
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.
However, our ability to reduce our Puerto Rico tax liability through such a credit or deduction will depend on our tax profile at each annual taxable period, which is dependent on various factors. The utilization of our NOL carryforwards is subject to significant judgment and depends on future taxable income and the continued applicability of current tax laws.
These requirements would likely result in increased ESG- related 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.
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.
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.
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.
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.
If we are unable to timely adopt, develop, or integrate new technologies, or if our existing systems and offerings become obsolete, we may lose current and future customers, which could have a material adverse effect on our business, financial condition and results of operations.
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.
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.
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.
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.
The impact of market volatility from adverse developments in the banking industry such as this one are highly uncertain and difficult to predict. 22 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.
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.
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 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.
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.
If our estimates prove to be incorrect, our ACL on loans may not be sufficient to cover losses in our loan portfolio and our credit loss expense on loans could increase substantially. 26 In addition, any increases in our credit loss expense on loans or any loan losses in excess of our ACL on loans could have a material adverse effect on our future capital ratios, financial condition and results of operations.
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.
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.
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.
The estimated losses will be recovered through quarterly special assessments collected from certain insured depository institutions, including the Bank, and collection began during the quarter ended June 30, 2024. As of 21 December 31, 2025, the Corporation’s total estimated FDIC special assessment amounted to $6.3 million, of which $5.5 million has been paid.
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.
If these conditions persist, they could materially and adversely affect the Corporation’s operations, competitive position, and overall financial results. The failure of other financial institutions could adversely affect us. Our ability to engage in routine financing transactions could be adversely affected by future failures of financial institutions and the actions and commercial soundness of other financial institutions.
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.
Additional risks and uncertainties not currently known to the Corporation or deemed immaterial may also materially adversely affect the Corporation. Thus, the following should not be considered a complete discussion of all of the risks and uncertainties the Corporation may face. See the discussion under “Forward-Looking Statements,” in this Form 10-K.
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.
However, ongoing fiscal and economic challenges in the USVI may deteriorate the overall financial and economic conditions in the area, which could negatively affect the 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.
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.
Changes in monetary policies and regulatory actions of the Federal Reserve Board have had, and may continue to have, a significant impact on the operating results of commercial banks. The effects of such policies upon our business, financial condition and results of operations have been adverse in the past and may be adverse in the future.
Pursuant to the PR Tax Code, the carry-forward period for NOLs incurred during taxable years commencing after December 31, 2012 is 10 years.
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.
District Court for the 24 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.
District Court for the District of Columbia enjoined the Trump administration from implementing OMB Memorandum M-25-13 for disbursements under open awards.
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 Bank Secrecy Act, the USA PATRIOT Act, and related regulations require us to maintain an effective anti-money laundering program and file suspicious activity and currency transaction reports as appropriate, among other duties. Enforcement agencies, including the Financial Crimes Enforcement Network, federal banking regulators, and the U.S. Department of Justice, have significantly increased coordination and enforcement activity in this area.
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.
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.
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 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.
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.
Department of Justice and other federal agencies A successful regulatory challenge related to our compliance with these requirements could result in a wide variety of sanctions, including damages and civil money penalties, injunctive relief, and restrictions on mergers and acquisitions, expansion, or entry into new business lines.
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.
Competitive pressures to attract deposits may increase reliance on higher-cost funding, including wholesale funding, which could further compress net interest margin. Interest rates are influenced by factors beyond our control, including general economic conditions, inflationary trends, changes in government spending and debt issuances and monetary policy actions of governmental and regulatory agencies, including the Federal Reserve Board.
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.
A significant portion of our business activities and credit exposure is concentrated in Puerto Rico, which has faced prolonged economic and fiscal challenges.
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.
If we were to become the subject of such negative publicity, our relationships and reputation with existing and prospective customers and third parties with which we do business could be damaged, which could have an adverse effect on our ability to attract and retain customers and employees and could have a negative impact on our business, financial condition and results of operations.
For example, the interest expense for liability instruments might not change by the same amount as interest income received from loans or investments.
Additionally, basis risk may adversely affect net interest income. Basis risk arises when interest rates for different financial instruments with similar maturities, or the indices used to price them, change at different times or by different magnitudes. For example, the interest expense for liability instruments might not change by the same amount as interest income received from loans or investments.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Removed
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.
Added
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.
Removed
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 Regulation W.
Added
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”).
Removed
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.
Added
Cybersecurity risk is managed as part of the overall information technology risk, under the direction of the Corporate Security Office (“CSO”) led by the Chief Information Security Officer (“CISO”) who ultimately reports to the Chief Operating Officer (“COO”).
Removed
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.
Added
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.
Removed
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.
Added
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.
Removed
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.
Added
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.
Removed
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.
Added
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.
Removed
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.
Added
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.
Removed
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.
Added
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.
Removed
In addition, the aggregate amount of extensions of credit by a bank to insiders cannot exceed the bank’s unimpaired capital and surplus.
Added
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.
Removed
Furthermore, Section 22(g) of the Federal Reserve Act places additional restrictions on loans to executive officers. 15 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.
Added
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.
Removed
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.
Added
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, 2025.
Removed
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.
Added
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.
Removed
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.
Added
Events, when detected by security tools or third parties, may not always be immediately understood or acted upon.
Removed
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.
Added
See Item 1A, “Risk Factors – Risks Relating to Cybersecurity and Technology” for more information on how cybersecurity risk could adversely affect the Corporation, which should be read in conjunction with this Item 1C. 33 Governance Responsibility for risk oversight and management generally lies with the Corporation’s Board of Directors.
Removed
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.
Added
To effectively manage oversight of the CISP’s governance and cybersecurity risk management, the Board has delegated such responsibility to the Risk Committee. As part of its oversight, the Risk Committee receives reports from the Executive Risk Management Committee and IT Steering Committee, which are committees at the management level, on the Corporation’s cybersecurity processes.
Removed
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.
Added
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. The periodicity of testing is determined by the Corporate Internal Audit Department based on their risk assessment.
Removed
These rules require companies to clearly disclose the relationship between executive compensation and the company’s financial performance.
Added
Findings from internal audit procedures are reported to Management and the Audit Committee. In addition, the Vendor Management Committee periodically reports to the Risk Committee about the Vendor Management program status.
Removed
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.
Added
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.
Removed
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: well- capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized.
Added
The CSO oversees the CISP, its development, and any applicable updates in response to changes in operations and other circumstances, and reports on a quarterly basis to the IT Steering Committee and to the Board’s Risk Committee.
Removed
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.
Added
The Security and Facilities Management Director, who has been in charge since 2016, has over 20 years of experience in functional expertise concerning all aspects of information security, integrity and privacy of systems, and data resources, and holds several relevant licenses and/or certifications.
Removed
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.
Added
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.
Removed
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.
Added
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. 34
Removed
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.
Removed
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.
Removed
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.
Removed
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.
Removed
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.
Removed
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.
Removed
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%.
Removed
For 2023, the 16 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.
Removed
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.
Removed
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.
Removed
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.
Removed
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.
Removed
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.
Removed
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.
Removed
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.
Removed
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.
Removed
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.
Removed
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.
Removed
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.
Removed
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.
Removed
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.
Removed
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.
Removed
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.
Removed
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.
Removed
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”).
Removed
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 non- objection for an acquisition of control of an “insured institution” (as defined in the Act) or holding company thereof by any person (or persons acting in concert).
Removed
Control is deemed to exist if, among other things, a person (or group of persons acting in concert) acquires 17 25% or more of any class of voting stock of an insured institution or holding company thereof.
Removed
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.
Removed
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.
Removed
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.
Removed
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.
Removed
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.
Removed
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.
Removed
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.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 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.
Biggest changeItem 2. Properties As of December 31, 2025, First BanCorp. has ownership in the following principal buildings: - Headquarters – Located at First Federal Building, 1519 Ponce de 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 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.
This three-story facility is fully occupied by the Corporation and accommodates a retail branch, Money Express Headquarters, Auto Wholesale and Retail Financing, and Leasing Financing, among others. The Corporation owns 18 retail branches and 10 office centers, other facilities, and/or parking lots. It leases 88 branch premises, loan and office centers and other facilities.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe 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.
Biggest changeDuring 2025, the Corporation repurchased 7,674,399 shares of its common stock at an average price of $19.55 for a total cost of $150.0 million, of which 7,085,582 million shares for a total cost of $138.3 million, were associated with the remaining amount of the 202 4 capital plan authorization of $250 million and 588,817 million shares, for a total cost of $11.7 million, were associated with the 202 5 capital plan authorization of $200 million.
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 Performance Graph assumes that $100 was invested on December 31, 2020 in each of First BanCorp. common stock, the S&P 500 Index and the Peer Group. The comparisons in this table are set forth in response to SEC disclosure requirements and are therefore not intended to forecast or be indicative of future performance of First BanCorp.’s common stock.
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.
Refer to “Stock Repurchases” for more information on common stock repurchases during the fourth quarter of 2025 held as treasury stock. DIVIDENDS Since November 2018, the Corporation has made quarterly cash dividend payments on its shares of common stock.
Investors should consult with a tax professional regarding their specific AMT obligations under Puerto Rico law. 38 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.
Investors should consult with a tax professional regarding their specific AMT obligations under Puerto Rico law. 36 STOCK REPURCHASES Since April 2021, the Corporation’s Board of Directors has announced repurchase program authorizations totaling up to $1.3 billion of the Corporation’s outstanding stock and/or junior subordinated debentures.
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.
The dividend is payable on March 13, 2026 to shareholders of record at the close of business on February 26, 2026. The Corporation intends to continue to pay quarterly dividends on common stock. However, the 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.
(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.
(2) Includes 388 shares of common stock acquired by the Corporation to cover minimum tax withholding obligations upon the vesting of equity-based awards.
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.
On January 26, 2026, the Corporation announced that its Board of Directors had declared a quarterly cash dividend of $0.20 per common share, which represents an increase of $0.02 per common share, or an 11% increase, compared to its most recent quarterly dividend paid in December 12, 2025.
The 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. 40
The cumulative total stockholder return was obtained by dividing (i) the cumulative amount of dividends per share, assuming dividend reinvestment since the measurement point, December 31, 2020, plus (ii) the change in the per share price since the measurement date, by the share price at the measurement date. 38 Item 6. [Reserved] 39
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.
On February 20, 2026, there were 430 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, 2025 and 2024, the Corporation had 67,044,120 and 59,794,239 shares held as treasury stock, respectively.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet be Purchased Under The Plans or Programs (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.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares That May Yet be Purchased Under The Plans or Programs (in thousands) (1) October 1, 2025 - October 31, 2025 899,888 $ 19.77 899,500 $ 220,514 November 1, 2025 - November 30, 2025 1,616,090 19.93 1,616,090 188,300 December 1, 2025 - December 31, 2025 - - - 188,300 Total 2,515,978 (2) 2,515,590 (1) As of December 31, 2025, the Corporation was authorized to purchase up to $200 million of the Corporation’s common stock under the 2025 stock repurchase program that was publicly announced on October 22, 2025.
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. 39 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 Corporation intends to continue to satisfy statutory tax withholding obligations in connection with the vesting of outstanding restricted stock and performance units through the withholding of shares. 37 $0 $50 $100 $150 $200 $250 $300 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 PERFORMANCE OF FIRST BANCORP'S COMMON STOCK BASED ON TOTAL RETURN First Bank S&P 500 S&P Supercom Banks Index STOCK PERFORMANCE GRAPH The following graph shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that First BanCorp. specifically incorporates this information by reference, and shall not otherwise be deemed filed with the SEC.
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.
Repurchases under the program may be executed through open market purchases, accelerated share repurchases, privately negotiated transactions or plans, including plans complying with Rule 10b5-1 under the Exchange Act. The repurchase program does not obligate it to acquire any specific number of shares and does not have an expiration date.
The 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.
As of December 31, 2025, the Corporation has remaining authorization to repurchase approximately $188.3 million of common stock. The amount and timing of stock repurchases will be based on various factors, including our capital requirements, market conditions (including the trading price of our stock), and regulatory and legal considerations.
Removed
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.
Added
The following table provides information in relation to the Corporation’s purchases of shares of its common stock during the quarter ended December 31, 2025.
Removed
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.
Added
The repurchase program may be modified, suspended, or terminated at any time at the Corporation’s discretion. During the fourth quarter of 2025, the Corporation repurchased approximately $50.0 million in common stock, of which $38.3 million were associated with the remaining amount of the 2024 capital plan authorization of $250 million.
Removed
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.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 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. 109
Biggest changeItem 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. 95

Other FBP 10-K year-over-year comparisons