# FIRST BANCORP /PR/ (FBP) Informational only - not investment advice. CIK: 0001057706 SIC: 6022 State Commercial Banks SIC breadcrumb: [Finance, Insurance, And Real Estate](/division/H/) > [Depository Institutions](/major-group/60/) > [SIC 6022 State Commercial Banks](/industry/6022/) Latest 10-K filed: 2026-02-27 SEC page: https://www.sec.gov/edgar/browse/?CIK=1057706 Filing source: https://www.sec.gov/Archives/edgar/data/1057706/000105770626000007/fbp-20251231.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 1255034000 | USD | 2025 | 2026-02-27 | | Net income | 344866000 | USD | 2025 | 2026-02-27 | | Assets | 19132892000 | USD | 2025 | 2026-02-27 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-27. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001057706.json. Derived margins are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | 673,246,000 | 650,810,000 | 707,277,000 | 766,469,000 | 804,208,000 | 915,872,000 | 985,706,000 | 1,156,180,000 | 1,225,875,000 | 1,255,034,000 | | Net income | 93,229,000 | 66,956,000 | 201,608,000 | 167,377,000 | 102,273,000 | 281,025,000 | 305,072,000 | 302,864,000 | 298,724,000 | 344,866,000 | | Diluted EPS | 0.43 | 0.30 | 0.92 | 0.76 | 0.46 | 1.31 | 1.59 | 1.71 | 1.81 | 2.15 | | Assets | 11,922,455,000 | 12,261,268,000 | 12,243,561,000 | 12,611,266,000 | 18,793,071,000 | 20,785,275,000 | 18,634,484,000 | 18,909,549,000 | 19,292,921,000 | 19,132,892,000 | | Liabilities | 10,136,212,000 | 10,392,171,000 | 10,198,857,000 | 10,383,193,000 | 16,517,892,000 | 18,683,508,000 | 17,308,944,000 | 17,411,940,000 | 17,623,685,000 | 17,166,027,000 | | Stockholders' equity | 1,786,243,000 | 1,869,097,000 | 2,044,704,000 | 2,228,073,000 | 2,275,179,000 | 2,101,767,000 | 1,325,540,000 | 1,497,609,000 | 1,669,236,000 | 1,966,865,000 | | Net margin | 13.85% | 10.29% | 28.50% | 21.84% | 12.72% | 30.68% | 30.95% | 26.20% | 24.37% | 27.48% | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-08. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001057706.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-30 | | | 0.38 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | | | 0.40 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | 0.39 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 252,204,000 | 70,655,000 | 0.39 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 263,405,000 | 82,022,000 | 0.46 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 265,481,000 | 79,489,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 268,505,000 | 73,458,000 | 0.44 | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 272,245,000 | 75,838,000 | 0.46 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 274,675,000 | 73,727,000 | 0.45 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 279,728,000 | 75,701,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 277,065,000 | 77,059,000 | 0.47 | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 278,190,000 | 80,180,000 | 0.50 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 282,743,000 | 100,526,000 | 0.63 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 285,158,000 | 87,101,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 279,849,000 | 88,778,000 | 0.57 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1057706/000105770626000012/fbp-20260331.htm Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high Filing date: 2026-05-08 Report date: 2026-03-31 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (“MD&A”) The following MD&A relates to the accompanying unaudited consolidated financial statements of First BanCorp. (the “Corporation,” “we,” “us,” “our,” or “First BanCorp.”) and should be read in conjunction with such financial statements and the notes thereto, and our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Annual Report on Form 10- K”). This section also presents certain financial measures that are not based on generally accepted accounting principles in the United States of America (“GAAP”). See “Non-GAAP Financial Measures and Reconciliations” below for information about why non- GAAP financial measures are presented, reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures, and references to non-GAAP financial measures reconciliations presented in other sections. EXECUTIVE SUMMARY First BanCorp. is a diversified financial holding company headquartered in San Juan, Puerto Rico, offering a full range of financial products to consumers and commercial customers through various subsidiaries. First BanCorp. is the holding company of FirstBank Puerto Rico (“FirstBank” or the “Bank”) and FirstBank Insurance Agency. Through its wholly -owned subsidiaries, the Corporation operates in Puerto Rico, the United States Virgin Islands (“USVI”), the British Virgin Islands (“BVI”), and the state of Florida, concentrating on commercial banking, residential mortgage loans, credit cards, personal loans, small loans, auto loans and leases, and insurance agency activities. Recent Developments Economy and Market Update Economic conditions in Puerto Rico continued to remain generally stable through the end of the first quarter of 2026. The unemployment rate was largely unchanged on a quarter-over-quarter basis, from 5.7% in the fourth quarter of 2025 to 5.6% by the end of the first quarter of 2026, remaining near historic lows and reflecting a resilient and stable labor market. In the broader U.S. economy, economic momentum continued to moderate during the first quarter of 2026 following softer growth trends observed in the second half of 2025. Labor market conditions eased further but remained orderly, characterized by slower hiring activity and a gradual moderation in labor demand. The U.S. unemployment rate remained elevated relative to mid-2025 levels, standing at 4.3% in January 2026, unchanged from late 2025, consistent with an ongoing transition toward a more balanced labor market rather than a deterioration in overall economic conditions. In response to these trends, and following the three 25 basis points (“bps”) rate cuts implemented in September, October, and December 2025, the Federal Reserve (the “FED”) maintained the federal funds target range at 3.50%-3.75% during the first quarter of 2026, allowing time to assess the lagged effects of prior policy actions and to help ensure that inflation continues to move sustainably toward its long-term 2% target. Business activity and economic conditions in Puerto Rico remained stable and progressed broadly in line with the Corporation’s expectations. Supported by a resilient labor market and stable economic backdrop, the Corporation remains focused on serving its customers across a range of economic environments, while closely monitoring key risks, including energy costs and their potential impact on customers. For the remainder of 2026, the Corporation continues to expect growth in the commercial and residential mortgage loan portfolios, despite the expected moderation in consumer credit demand. In addition, the Corporation expects the net interest margin to continue expanding as cash flows are reinvested in higher-yielding assets. Capital Deployment Actions In the first quarter of 2026, the Corporation delivered approximately $81.5 million in the form of capital deployment actions that included $50.0 million in repurchases of common stock and $31. 5 million in common stock dividends declared. On April 22, 2026, the Corporation’s Board of Directors declared a quarterly cash dividend of $0.20 per common share. The dividend is payable on June 12, 2026 to shareholders of record at the close of business on May 28, 2026. 61 CRITICAL ACCOUNTING POLICIES AND PRACTICES The accounting principles of the Corporation and the methods of applying these principles conform to GAAP. In preparing the consolidated financial statements, management is required to make estimates, assumptions, and judgments that affect the amounts recorded for assets, liabilities and contingent liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Note 1 of the Notes to Consolidated Financial Statements included in our 2025 Annual Report on Form 10-K, as supplemented by this Quarterly Report on Form 10-Q, including this MD&A, describes the significant accounting policies we used in our consolidated financial statements. Not all significant accounting policies require management to make difficult, subjective or complex judgments. Critical accounting estimates are those estimates made in accordance with GAAP that involve a significant level of uncertainty and have had or are reasonably likely to have a material impact on the Corporation’s financial condition and results of operations. The Corporation’s critical accounting estimates that are particularly susceptible to significant changes include, but are not limited to, the allowance for credit losses (“ACL”). In addition, the use of estimates and assumptions is also important in performing the accounting for income taxes, valuation of financial instruments, determining the accounting for goodwill, pension and postretirement benefit obligations, and provisions for losses that may arise from litigation and regulatory proceedings (including governmental investigations). For additional information, see “Critical Accounting Estimates” and “Other Estimates” in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”),” in the 2025 Annual Report on Form 10-K. In addition, the “Risk Management – Credit Risk Management” section of this MD&A details the policies, assumptions, and judgments related to the ACL. Actual results could differ from estimates and assumptions if different outcomes or conditions prevail. 62 Overview of Results of Operations The Corporation’s results of operations depend primarily on its net interest income, which is the difference between the interest income earned on its interest-earning assets, including investment securities and loans, and the interest expense incurred on its interest-bearing liabilities, including deposits and borrowings. Net interest income is affected by various factors, including the following: (i) the interest rate environment; (ii) the volumes, mix, and composition of interest-earning assets, and interest-bearing liabilities; and (iii) the repricing characteristics of these assets and liabilities. The Corporation had net income of $88.8 million ($0.57 per diluted common share), for the quarter ended March 31, 2026, compared to $77.1 million ($0.47 per diluted common share), for the quarter ended March 31, 2025. Other relevant selected financial indicators for the periods presented are included below: Quarter Ended March 31, 2026 2025 Key Performance Indicators: (1) Return on Average Assets (2) 1.89 % 1.64 % Return on Average Common Equity (3) 17.92 17.90 Efficiency Ratio (4) 49.14 49.58 (1) These financial ratios are used by management to monitor the Corporation’s financial performance and whether it is using its assets efficiently. (2) Indicates how profitable the Corporation is in relation to its total assets and is calculated by dividing net income on an annualized basis by its average total assets. (3) Measures the Corporation’s performance based on its average common stockholders’ equity and is calculated by dividing net income on an annualized basis by its average total common stockholders’ equity. (4) Measures how much the Corporation incurred to generate a dollar of revenue and is calculated by dividing non-interest expenses by total revenue. The key drivers of the Corporation’s GAAP financial results for the quarter ended March 31, 2026, compared to the first quarter of 2025, include the following: ● Net interest income increased by $8.6 million to $221.0 million for the first quarter of 2026, compared to $212.4 million for the first quarter of 2025. Net interest margin for the first quarter of 2026 increased by 23 bps to 4.75%, driven by the deployment of cash flows from lower-yielding investment securities to higher-yielding assets, and a decrease in the cost of interest-bearing liabilities due to the effect of lower interest rates on deposits, primarily on non-maturity government deposits, and the repayments of Federal Home Loan Bank (“FHLB”) advances and redemption of junior subordinated debentures. These factors were partially offset by the downward repricing of variable-rate commercial loans and the overall decline in the higher-yielding consumer loan portfolio. See “Results of Operations – Net Interest Income” below for additional information. ● The provision for credit losses on loans, finance leases, unfunded loan commitments and debt securities for the quarter ended March 31, 2026 was $17.3 million, compared to $24.8 million for the first quarter of 2025. The decrease was driven by a favorable year-over-year variance in the provision for the commercial and construction loan portfolios, primarily due to improvements in the projections of the unemployment rate and the commercial real estate (“CRE”) price index. Net charge-offs totaled $21.1 million for the first quarter of 2026, or an annualized 0.65% of average loans, compared to $21.4 million, or an annualized 0.68% of average loans, for the same period in 2025. The $0.3 million decrease was driven by a $1.1 million reduction in consumer loans and finance leases net charge-offs, after considering the impact of $2.4 million in recoveries related to the bulk sale of fully charged-off consumer loans and finance leases recognized during the first quarter of 2025. This improvement was partially offset by a $0.6 million charge-off on a nonaccrual commercial mortgage loan in the Virgin Islands region during the first quarter of 2026. See “Results of Operations – Provision for Credit Losses” and “Risk Management” below for analyses of the ACL and non-performing assets and related ratios. ● Non-interest income increased by $2.0 million to $37.7 million for the first quarter of 2026, compared to $35.7 million for the same period in 2025, driven in part by $0.9 million in higher revenues from mortgage banking activities. See “Results of Operations – Non-Interest Income” below for additional information. ● Non-interest expenses increased by $4.1 million to $127.1 mil [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (“MD&A”) The following MD&A relates to the accompanying audited consolidated financial statements of First BanCorp. (the “Corporation,” “we,” “us,” “our,” or “First BanCorp.”) and should be read in conjunction with such financial statements and the notes thereto. This section also presents certain financial measures that are not based on generally accepted accounting principles in the United States of America (“GAAP”). See “Non-GAAP Financial Measures and Reconciliations” below for information about why non-GAAP financial measures are presented, reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures, and references to non-GAAP financial measures reconciliations presented in other sections. The detailed financial discussion that follows focuses on 2025 results compared to 2024. For a discussion of 2024 results compared to 2023, see Part I, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024, filed on February 28, 2025. In this discussion and analysis of our financial condition and results of operations, we have included information that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements are not historical facts or statements of current conditions, but instead represent only our beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside our control. By identifying these statements for you in this manner, we are alerting you to the possibility that our actual results, financial condition, liquidity and capital actions may differ materially from the anticipated results, financial condition, liquidity and capital actions in these forward-looking statements. Important factors that could cause our results, financial condition, liquidity and capital actions to differ from those in these statements include, among others, those described in “Risk Factors” in Part I, Item 1A of this Form 10-K. EXECUTIVE SUMMARY First BanCorp. is a diversified financial holding company headquartered in San Juan, Puerto Rico offering a full range of financial products to consumers and commercial customers through various subsidiaries. First BanCorp. is the holding company of FirstBank Puerto Rico (“FirstBank” or the “Bank”) and FirstBank Insurance Agency. Through its wholly -owned subsidiaries, the Corporation operates in Puerto Rico, the United States Virgin Islands (“USVI”), the British Virgin Islands (“BVI”), and the state of Florida, concentrating on commercial banking, residential mortgage loans, credit cards, personal loans, small loans, auto loans and leases, and insurance agency activities. Significant Events Economy and Market Update Economic conditions in Puerto Rico remained generally stable during 2025. The unemployment rate decreased from 5.63% in 2024 to 5.56% in 2025, remaining near historic lows and reflecting a resilient labor market with steady labor force participation. In the broader U.S. economy, momentum moderated during the second half of 2025 following a strong first half. Labor market indicators softened but remained orderly, with slower hiring activity and a modest increase in unemployment. The U.S. unemployment rate stood at 4.3% in January, unchanged from August 2025, underscoring a transition toward a more balanced labor market rather than a deterioration in employment conditions. In response to these trends, the Federal Reserve (the “FED”) implemented three 25 basis points (“bps”) rate cuts in September, October, and December 2025, reducing the federal funds target range to 3.50%-3.75%, its lowest level in several years. Looking ahead to 2026, the economic backdrop remains broadly constructive and supportive of our strategic priorities. We remain focused on delivering organic loan growth, primarily on commercial and residential mortgage loans despite anticipated declines in the consumer loan portfolio, and maintaining strong profitability metrics. Asset quality is expected to remain stable, with consumer credit trends continuing to normalize. From an earnings perspective, we expect several of the favorable dynamics that drove net interest margin expansion in 2025 to continue into 2026. Based on our current outlook, which assumes two additional FED rate cuts during the second half of 2026, along with projected loan growth and deposit mix changes, we expect quarterly net interest margin expansion of approximately 2 to 3 bps. Cash flows of approximately $1.1 billion from the investment securities portfolio (excluding U.S. Treasury securities) are expected to be received during the year and redeployed into higher-yielding interest-earning assets. These dynamics, combined with continued reductions in funding costs, including brokered CDs, non-brokered time deposits, and government accounts, position us well to sustain margin performance. Overall, the Corporation enters 2026 with strong capital levels, ample liquidity, diversified earnings profile, and expects to return close to 100% of annual earnings to shareholders through capital deployment actions positioning it well to navigate a moderating economic environment while continuing to deliver value to shareholders. 40 Capital Deployment Actions and Dividend Payment Increase In 2025, the Corporation delivered approximately $327.4 million, or 95% of 2025 earnings, in the form of capital deployment actions through $150.0 million in repurchases of common stock, approximately $115.7 million in common stock dividends declared, and $61.7 million in the redemption of the remaining outstanding trust-preferred securities (“TruPS”) issued by FBP Statutory Trusts I and II. As of February 20, 2026, the Corporation has remaining authorization of approximately $187.2 million, which it expects to execute during 2026. On January 26, 2026, the Corporation’s Board of Directors declared a quarterly cash dividend of $0.20 per common share, which represents an increase of $0.02 per common share, or an 11% increase, compared to its most recent quarterly dividend paid in December 12, 2025. The dividend is payable on March 13, 202 6 to shareholders of record at the close of business on February 26, 2026. The increased quarterly dividend level equates to an annualized dividend of $0.80 per common share. Recent Tax Developments and Other Special Items The financial results for 2025 include a one-time reversal of approximately $16.6 million in valuation allowance related to deferred tax assets primarily associated with net operating loss (“NOL”) carryforwards at the holding company level following the enactment of Act 65-2025, and a $2.3 million employee retention credit (“ERC”), net of $0.3 million in related commissions. For further details related to these Special Items, refer to the Non-GAAP Disclosures – Special Items section below. Legislative and Regulatory A comprehensive discussion of legislative and regulatory matters affecting the Corporation can be found in Part I, Item 1, “Business – Supervision and Regulation” of this Form 10-K. Overview of Results of Operations The Corporation’s results of operations depend primarily on its net interest income, which is the difference between the interest income earned on its interest-earning assets, including investment securities and loans, and the interest expense incurred on its interest-bearing liabilities, including deposits and borrowings. Net interest income is affected by various factors, including the following: (i) the interest rate environment; (ii) the volumes, mix, and composition of interest-earning assets, and interest-bearing liabilities; and (iii) the repricing characteristics of these assets and liabilities. The Corporation had net income of $344.9 million ($2.15 per diluted common share), for the year ended December 31, 2025, compared to $298.7 million ($1.81 per diluted common share), for the year ended December 31, 2024. Other relevant selected financial indicators for the periods presented are included below: Year Ended December 31, 2025 2024 2023 Key Performance Indicator: (1) Return on Average Assets (2) (5) 1.81 % 1.58 % 1.62 % Return on Average Common Equity (3) (5) 18.74 19.09 21.86 Efficiency Ratio (4) 49.77 51.92 50.70 (1) These financial ratios are used by management to monitor the Corporation’s financial performance and whether it is using its assets efficiently. (2) Indicates how profitable the Corporation is in relation to its total assets and is calculated by dividing net income by its average total assets. (3) Measures the Corporation’s performance based on its average common stockholders’ equity and is calculated by dividing net income by its average total common stockholders’ equity. (4) Measures how much the Corporation incurred to generate a dollar of revenue and is calculated by dividing non-interest expenses by total revenue. (5) For the year ended December 31, 2025, the employee retention credit (“ERC”) and the one-time reversal in valuation allowance related to deferred tax assets increased the return on average assets by 10 bps and the return on average equity ratio by 98 bps. 41 The key drivers of the Corporation’s GAAP financial results for the year ended December 31, 2025, compared to the year ended December 31, 2024, include the following: ● Net interest income for the year ended December 31, 2025 increased to $868.9 million, compared to $807.5 million for the year ended December 31, 2024, driven by a lower cost of funds and the redeployment of cash flows from lower-yielding investment securities into loans and higher-yielding investment securities. See “Result of Operations – Net Interest Income” below for additional information. ● The provision for credit losses on loans, finance leases, unfunded loan commitments and debt securities for the year ended December 31, 2025 was $86.0 million, compared to $59.9 million for the year ended December 31, 2024, driven by a $27.9 million increase in the provision for the commercial and construction loan portfolios mainly due to C&I loan growth and a deterioration on the economic outlook of certain macroeconomic variables, particularly those related to commercial real estate property performance and the forecasted CRE price index . Net charge-offs totaled $80.8 million for each of the years ended December 31, 2025 and 2024, or 0.63% of average loans for the year ended December 31, 2025, compared to 0.65% of average loans for the year ended December 31, 2024. See “Results of Operations – Provision for Credit Losses” and “Risk Management” below for the analysis of the allowance for credit losses (“ACL”) and non-performing assets and related ratios. ● Non-interest income for the year ended December 31, 2025 increased to $131.9 million, compared to $130.7 million for the year ended December 31, 2024, mainly due to a $1.4 million increase in revenues from mortgage banking activities. The results for the year ended December 31, 2024 include $1.5 million in insurance proceeds mostly associated with insurance claims associated with property damage caused by Hurricane Fiona. ● Non-interest expenses for the year ended December 31, 2025 amounted to $498.1 million, compared to $487.1 million for the year ended December 31, 2024. Non-interest expenses for the year ended December 31, 2025 include the aforementioned benefit in payroll taxes related to the $2.3 million ERC, and the aforementioned benefit of $1.1 million related to the FDIC special assessment, while non-interest expenses for the same period in 2024 include the $1.1 million additional FDIC special assessment expense. On a non-GAAP basis, excluding the effect of these Special Items, adjusted non-interest expenses increased by $15.5 million, driven by an $11.7 million increase in adjusted employees’ compensation and benefits expenses and a $5.9 million unfavorable variance in net gain on OREO operations, which includes a $2.8 million valuation adjustment recorded in a commercial OREO property in the Virgin Islands region. See “Results of Operations – Non-Interest Expenses” below for additional information. ● Income tax expense decreased to $71.9 million for the year ended December 31, 2025, compared to $92.5 million for the same period in 2024, driven by a one-time reversal of approximately $16.6 million in valuation allowance related to deferred tax assets primarily associated with NOL carryforwards at the holding company level as a result of the enactment of Act 65- 2025, and a lower annual effective tax rate due to a higher proportion of exempt to taxable income. See “Income Taxes” below and Note 17 – “Income Taxes ” included in Part II, Item 8 of this Form 10-K for additional information. ● As of December 31, 2025, total assets were approximately $19.1 billion, a decrease of $160.0 million from December 31, 2024, primarily related to a decrease in cash and cash equivalents resulting from the repayment of long-term borrowings and a decrease in total deposits, partially offset by an increase in total loans and an increase in the fair value of available-for-sale debt securities due to changes in market interest rates. ● As of December 31, 2025, total liabilities were $17.2 billion, a decrease of $457.6 million from December 31, 2024, driven by a $271.7 million decrease in borrowings, which includes the repurchase of $61.7 million in junior subordinated debentures associated with the aforementioned TruPS redemption, and a $201.2 million decrease in deposits. See “Risk Management – Liquidity Risk” below for additional information about the Corporation’s funding sources and strategy. ● The Corporation’s primary sources of funding are consumer and commercial core deposits, which exclude government deposits and brokered certificates of deposit (“CDs”). Excluding fully collateralized government deposits, estimated uninsured deposits amounted to $4.8 billion as of December 31, 2025. The Corporation had approximately $2.6 billion in cash and cash equivalents and free high-quality liquid securities as of December 31, 2025. When adding approximately $2.6 billion available for funding under the FED’s Discount Window and $1.1 billion available for additional borrowing capacity on the Federal Home Loan Bank (“FHLB”) lines of credit based on collateral pledged at these entities, the Corporation had $6.3 billion, or 132% of estimated uninsured deposits (excluding fully collateralized government deposits), available to meet liquidity needs. See “Risk Management – Liquidity Risk” below for additional information about the Corporation’s funding sources and strategy. 42 ● As of December 31, 2025, the Corporation’s total stockholders’ equity was $2.0 billion, an increase of $297.6 million from December 31, 2024. The increase was driven by net income generated in 2025 and a $212.4 million increase in the fair value of available-for-sale debt securities recorded as part of accumulated other comprehensive loss in the consolidated statements of financial condition, partially offset by $150.0 million in common stock repurchases and $115.7 million, or $0.72 per common share, in common stock dividends declared in 2025. The Corporation’s CET1 capital, tier 1 capital, total capital, and leverage ratios were 16.76%, 16.76%, 18.01%, and 11.58%, respectively, as of December 31, 2025, compared to CET1 capital, tier 1 capital, total capital, and leverage ratios of 16.32%, 16.32%, 18.02%, and 11.07%, respectively, as of December 31, 2024. See “Risk Management – Capital” below for additional information. ● Total loan production, including purchases, refinancings, renewals, and draws from existing revolving and non-revolving commitments, decreased by $65.1 million to $5.4 billion for the year ended December 31, 2025. See “Financial Condition and Operating Data Analysis” below for additional information. ● Total non-performing assets were $114.1 million as of December 31, 2025, a decrease of $4.2 million, from December 31, 2024, driven by a $9.8 million decrease in the other real estate owned (“OREO”) portfolio balance, which includes a $2.8 million valuation adjustment recorded in a commercial OREO property in the Virgin Islands region, partially offset by a $5.1 million increase in nonaccrual loans, which includes a $9.2 million increase in nonaccrual commercial and construction loans, driven by the inflows of three commercial and construction loans totaling $16.2 million, partially offset by a $3.1 million payoff of a C&I loan in the Puerto Rico region. See “Risk Management – Nonaccrual Loans and Non-Performing Assets” below for additional information. ● Adversely classified commercial and construction loans decreased by $5.9 million to $81.4 million as of December 31, 2025, when compared to December 31, 2024, driven by the upgrade of a $12.0 million commercial mortgage loan in the Florida region, partially offset by the downgrade of a $10.0 million C&I loan in the Puerto Rico region. NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS The Corporation has included in this Annual Report on Form 10-K the following financial measures that are not recognized under GAAP, which are referred to as non-GAAP financial measures: Net Interest Income, Interest Rate Spread, and Net Interest Margin on a Tax -Equivalent Basis Net interest income, interest rate spread, and net interest margin are reported on a tax-equivalent basis in order to provide to investors additional information about the Corporation’s net interest income that management uses and believes should facilitate comparability and analysis of the periods presented. The tax-equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a marginal income tax rate. Income from tax-exempt earning assets is increased by an amount equivalent to the taxes that would have been paid if this income had been taxable at statutory rates. Management believes that it is a standard practice in the banking industry to present net interest income, interest rate spread, and net interest margin on a fully tax-equivalent basis. This adjustment puts all earning assets, most notably tax-exempt securities and tax- exempt loans, on a common basis that facilitates comparison of results to the results of peers. See “Results of Operations – Net Interest Income – Part I” below for a reconciliation of the Corporation’s non-GAAP financial measure of net interest income on a tax-equivalent basis to net interest income in accordance with GAAP. Tangible Common Equity Ratio and Tangible Book Value Per Common Share The tangible common equity ratio and tangible book value per common share are non-GAAP financial measures that management believes are generally used by the financial community to evaluate capital adequacy. Tangible common equity is total common equity less goodwill and other intangible assets. Similarly, tangible assets are total assets less goodwill and other intangible assets. Tangible common equity ratio is tangible common equity divided by tangible assets. Tangible book value per common share is tangible common equity divided by the number of common shares outstanding. Management uses and believes that many stock analysts use the tangible common equity ratio and tangible book value per common share in conjunction with other more traditional bank capital ratios to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, typically stemming from the use of the purchase method of accounting for mergers and acquisitions. Accordingly, the Corporation believes that disclosures of these financial measures may be useful to investors. Neither tangible common equity nor tangible assets, or the related measures, should be considered in isolation or as a substitute for stockholders’ equity, total assets, or any other measure calculated in accordance with GAAP. Moreover, the manner in which the Corporation calculates its tangible common equity, tangible assets, and any other related measures may differ from that of other companies reporting measures with similar names. 43 See “Risk Management – Capital” below for the table that reconciles the Corporation’s total equity and total assets in accordance with GAAP to the tangible common equity and tangible assets figures used to calculate the non-GAAP financial measures of tangible common equity ratio and tangible book value per common share. Adjusted Net Income, Adjusted Non-Interest Income, Adjusted Non-Interest Expenses, and Adjusted Income Tax Expense To supplement the Corporation’s financial statements presented in accordance with GAAP, the Corporation uses, and believes that investors benefit from disclosure of, non-GAAP financial measures that reflect adjustments to net income, non-interest income, non- interest expenses, and income tax expense to exclude items that management believes are not reflective of core operating performance (“Special Items”). The financial results for the years ended December 31, 2025, 2024, and 2023 included the following Special Items: Years Ended December 31, 2025, 2024, and 2023 FDIC Special Assessment Expense - A benefit of $1.1 million ($0.7 million after-tax, calculated based on the statutory tax rate of 37.5%) was recorded for the year ended December 31, 2025, related to amendments to the FDIC special assessment collection terms. On December 16, 2025, the FDIC issued an interim final rule amending the collection terms of the special assessment, which included reducing the collection rate in the eighth collection quarter from 3.36 basis points to 2.97 basis points, removing the previously established extended assessment period provisions, and providing offsets to regular quarterly deposit insurance assessments if aggregate collections exceed actual losses. As a result of these changes, the Corporation recorded a reversal of the charges of $1.1 million ($0.7 million after-tax) that were recorded for the year ended December 31, 2024. This update follows the FDIC’s 2023 final rule, which initially imposed the special assessment to recover certain estimated losses incurred by the Deposit Insurance Fund following the failures of certain financial institutions in the first half of 2023. In connection with such rule, the Corporation recorded a charge of $6.3 million ($3.9 million after-tax, calculated based on the statutory tax rate of 37.5%) during the year ended December 31, 2023. The FDIC deposit special assessment is reflected in the consolidated statements of income as part of “FDIC deposit insurance” expenses. Enactment of Act 65-2025 - A $16.6 million reversal in valuation allowance related to deferred tax assets primarily associated with NOL carryforwards at the holding company level was reflected in the consolidated statements of income for the year ended December 31, 2025 as part of “income tax expense”. On July 17, 2025, the Government of Puerto Rico enacted Act 65-2025 which, among other things, allows domestic limited liability companies owned by legal entities to elect to be treated as disregarded entities for tax purposes. This reversal reflects the Corporation’s expectation of realizing these tax benefits under the new election established by the Act. Employee Retention Credit (“ERC”) - A $2.3 million ERC, net of $0.3 million in related commissions, was reflected in the consolidated statements of income for the year ended December 31, 2025 as part of “employees’ compensation and benefits” expenses. This credit was established under the Coronavirus Aid, Relief, and Economic Security Act to support businesses that retained employees during the COVID-19 pandemic. The credit recorded during the year ended December 31, 2025 is tax exempt for Puerto Rico tax purposes. Gain Recognized from Legal Settlement - A $3.6 million ($2.3 million after-tax, calculated based on the statutory tax rate of 37.5%) gain recognized from a legal settlement was reflected in the consolidated statements of income for the year ended December 31, 2023 as part of “other non-interest income.” Gain on Early Extinguishment of Debt - A $1.6 million gain on the repurchase of $21.4 million in junior subordinated debentures was reflected in the consolidated statements of income for the year ended December 31, 2023 as “Gain on early extinguishment of debt.” The junior subordinated debentures had been recorded in the consolidated statements of financial condition as “Long-term borrowings.” The purchase price equated to 92.5% of the $21.4 million par value of the TruPS. The 7.5% discount resulted in the gain of $1.6 million. The gain, realized at the holding company level, had no effect on the income tax expense recorded during 2023. 44 The following table reconciles, for the years ended December 31, 2025, 2024, and 2023, net income to adjusted net income, a non- GAAP financial measure that excludes the Special Items identified above: Year Ended December 31, 2025 2024 2023 (In thousands) Net income, as reported (GAAP) $ 344,866 $ 298,724 $ 302,864 Adjustments: Employee retention credit (2,358) - - FDIC special assessment (reversal) expense (1,099) 1,099 6,311 Income tax impact related to the enactment of Act 65-2025 (16,553) - - Gain recognized from legal settlement - - (3,600) Gain on early extinguishment of debt - - (1,605) Income tax impact of adjustments (1) 412 (412) (1,017) Adjusted net income (Non-GAAP) $ 325,268 $ 299,411 $ 302,953 (1) See “Adjusted Net Income, Adjusted Non -Interest Income, Adjusted Non-Interest Expenses, and Adjusted Income Tax Expense” above for the individual tax impact related to the above adjustments, which were based on the Puerto Rico statutory tax rate of 37.5%, as applicable. 45 CRITICAL ACCOUNTING ESTIMATES The accounting principles of the Corporation and the methods of applying these principles conform to GAAP. In preparing the consolidated financial statements, management is required to make estimates, assumptions, and judgments that affect the amounts recorded for assets, liabilities and contingent liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Accounting estimates require assumptions and judgments about uncertain matters that could have a material effect on the consolidated financial statements. The Corporation’s critical accounting estimates that are particularly susceptible to significant changes include the following: (i) the ACL and (ii) valuation of financial instruments. Actual results could differ from estimates and assumptions if different outcomes or conditions prevail. Allowance for Credit Losses The Corporation maintains an ACL for loans and finance leases based upon management’s estimate of the lifetime expected credit losses in the loan portfolio, as of the balance sheet date, excluding loans held for sale. Additionally, the Corporation maintains an ACL for held-to-maturity and available-for-sale debt securities, and other off-balance sheet credit exposures ( e.g. , unfunded loan commitments). For loans and finance leases, unfunded loan commitments, and held-to-maturity debt securities, the estimate of lifetime credit losses includes the use of quantitative models that incorporate forward-looking macroeconomic scenarios that are applied over the contractual lives of the portfolios, adjusted, as appropriate, for prepayments and permitted extension options using historical experience. For purposes of the ACL for lending commitments, such allowance is determined using the same methodology as the ACL for loans, while also taking into consideration the probability of drawdowns or funding, and whether such commitments are cancellable by us. The ACL for available-for-sale debt securities is measured using a risk-adjusted discounted cash flow approach that also considers relevant current and forward-looking economic variables and the ACL is limited to the difference between the fair value of the security and its amortized cost. Judgment is specifically applied in the determination of economic assumptions, the length of the initial loss forecast period, the reversion of losses beyond the initial forecast period, historical loss expectations, usage of macroeconomic scenarios, and qualitative factors, which may not be adequately captured in the loss model, as further discussed below. The macroeconomic scenarios utilized by the Corporation include variables that have historically been key drivers of increases and decreases in credit losses. These variables include, but are not limited to, unemployment rates, housing and commercial real estate prices, gross domestic product levels, retail sales, interest rate forecasts, corporate bond spreads, and changes in equity market prices. The Corporation derives the economic forecasts it uses in its ACL model from Moody’s Analytics. The latter has a large team of economists, database managers and operational engineers with a history of producing monthly economic forecasts for over 25 years. The Corporation has currently set an initial forecast period (“reasonable and supportable period”) of two years and a reversion period of up to three years, utilizing a straight-line approach and reverting back to the historical macroeconomic mean for Puerto Rico and the Virgin Islands regions. For the Florida region, the methodology considers a reasonable and supportable forecast period and an implicit reversion towards the historical trend that varies for each macroeconomic variable. After the reversion period, a historical loss forecast period covering the remaining contractual life, adjusted for prepayments, is used based on the change in key historical economic variables during representative historical expansionary and recessionary periods. Changes in economic forecasts impact the probability of default (“PD”), loss-given default (“LGD”), and exposure at default (“EAD”) for each instrument, and therefore influence the amount of future cash flows for each instrument that the Corporation does not expect to collect. Further, the Corporation periodically considers the need for qualitative adjustments to the ACL. Qualitative adjustments may be related to and include, but not be limited to, factors such as the following: (i) management’s assessment of economic forecasts used in the model and how those forecasts align with management’s overall evaluation of current and expected economic conditions; (ii) organization specific risks such as credit concentrations, collateral specific risks, nature, and size of the portfolio and external factors that may ultimately impact credit quality, and (iii) other limitations associated with factors such as changes in underwriting and loan resolution strategies, among others. The qualitative factors applied at December 31, 2025, and the importance and levels of the qualitative factors applied, may change in future periods depending on the level of changes to items such as the uncertainty of economic conditions and management’s assessment of the level of credit risk within the loan portfolio as a result of such changes, compared to the amount of ACL calculated by the model. The evaluation of qualitative factors is inherently imprecise and requires significant management judgment. The ACL can also be impacted by factors outside the Corporation’s control, which include unanticipated changes in asset quality of the portfolio, such as deterioration in borrower delinquencies, or credit scores in our residential real estate and consumer portfolio. Further, the current fair value of collateral is utilized to assess the expected credit losses when a financial asset is considered to be collateral dependent. 46 Our process for determining the ACL is further discussed in Note 1 – “Nature of Business and Summary of Significant Accounting Policies” and Note 4 – “Allowance for Credit Losses and Finance Leases” included in Part II,