SAN JUAN, Puerto Rico--(BUSINESS WIRE)--First BanCorp. (the “Corporation”) (NYSE: FBP), the bank holding company for FirstBank Puerto Rico, announced today that its Board of Directors has declared a quarterly cash dividend of $0.16 per share, which represents an increase of 14% or $0.02 per common share compared to its most recent dividend paid in December 2023. The dividend is payable on March 8, 2024 to shareholders of record at the close of business on February 23, 2024. “We are pleased to announce an i ...

Have you been paying attention to shares of First Bancorp (FBP) ? Shares have been on the move with the stock up 5.7% over the past month. The stock hit a new 52-week high of $17.45 in the previous session. First Bancorp has gained 5.7% since the start of the year compared to the 19.8% move for the Zacks Finance sector and the 10.6% return for the Zacks Banks - Southeast industry.What's Driving the Outperformance?The stock has an impressive record of positive earnings surprises, as it hasn't missed our earn ...

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q) This section provides key administrative details of First BanCorp.'s Quarterly Report on Form 10-Q, including registrant name, filing status, and common stock outstanding - First BanCorp. (FBP) filed its Quarterly Report on Form 10-Q for the period ended September 30, 2023[2](index=2&type=chunk) Registrant Information | Indicator | Value | | :--- | :--- | | Registrant Name | FIRST BANCORP. | | Commission File Number | 001-14793 | | Trading Symbol | FBP | | Exchange | New York Stock Exchange | | Filer Status | Large accelerated filer | | Common Stock Outstanding (as of Nov 1, 2023) | 172,552,186 shares | [Report Index](index=2&type=section&id=INDEX%20PAGE) This section provides a comprehensive index for navigating the various parts and items of the Quarterly Report on Form 10-Q [Forward-Looking Statements and Risk Factors](index=3&type=section&id=Forward-Looking%20Statements) This section outlines the forward-looking nature of statements in the report, cautioning readers against undue reliance. It details various factors, including elevated interest rates, financial industry volatility, regulatory changes, and natural disasters, that could cause actual results to differ materially from projections - The report contains forward-looking statements identified by terms like 'would,' 'intends,' 'will,' 'expect,' 'should,' 'plans,' 'forecast,' 'anticipate,' 'look forward,' and 'believes'[14](index=14&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements, as actual results may differ materially due to various unpredictable risks, uncertainties, estimates, and assumptions[14](index=14&type=chunk) - Key factors that could cause material differences include elevated interest rates and inflation, volatility in the financial services industry (e.g., bank failures), changes in fiscal and monetary policies, cybersecurity incidents, competitive factors, and impacts of natural disasters or geopolitical conflicts[15](index=15&type=chunk)[16](index=16&type=chunk)[18](index=18&type=chunk) [Part I. Financial Information](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents First BanCorp.'s unaudited consolidated financial statements and detailed notes, along with management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for First BanCorp., including the statements of financial condition, income, comprehensive income (loss), cash flows, and changes in stockholders' equity, providing a snapshot of the company's financial performance and position for the reported periods [Consolidated Statements of Financial Condition](index=5&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition%20(Unaudited)) This statement provides a snapshot of First BanCorp.'s assets, liabilities, and stockholders' equity at specific points in time, reflecting its financial position Financial Condition Summary | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Total Assets | $18,594,608 | $18,634,484 | $(39,876) | | Total Liabilities | $17,291,540 | $17,308,944 | $(17,404) | | Total Stockholders' Equity | $1,303,068 | $1,325,540 | $(22,472) | - Total assets decreased by **$39.9 million**, primarily due to a **$423.7 million decrease** in available-for-sale debt securities, partially offset by increases in cash and due from banks and loans, net[20](index=20&type=chunk)[342](index=342&type=chunk)[365](index=365&type=chunk) - Total liabilities decreased by **$17.4 million**, mainly driven by a **$272.2 million decrease** in borrowings and a **$37.0 million decrease** in accounts payable and other liabilities, partially offset by a **$291.8 million increase** in total deposits[20](index=20&type=chunk)[293](index=293&type=chunk) [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income%20(Unaudited)) This statement details First BanCorp.'s revenues, expenses, and net income over specific periods, illustrating its profitability and operational performance Income Statement Summary | Metric | Q3 2023 (in thousands) | Q3 2022 (in thousands) | 9M 2023 (in thousands) | 9M 2022 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Total Interest & Dividend Income | $263,405 | $222,683 | $758,005 | $629,162 | | Total Interest Expense | $63,677 | $14,773 | $157,577 | $39,442 | | Net Interest Income | $199,728 | $207,910 | $600,428 | $589,720 | | Provision for Credit Losses - Expense | $4,396 | $15,783 | $42,128 | $11,984 | | Total Non-Interest Income | $30,296 | $29,693 | $99,085 | $93,492 | | Total Non-Interest Expenses | $116,638 | $115,189 | $344,823 | $330,174 | | Net Income | $82,022 | $74,603 | $223,375 | $231,898 | | Basic EPS | $0.47 | $0.40 | $1.25 | $1.20 | | Diluted EPS | $0.46 | $0.40 | $1.25 | $1.19 | - Net income for Q3 2023 increased by **$7.4 million (9.9%)** YoY, while for 9M 2023, it decreased by **$8.5 million (3.7%)** YoY[22](index=22&type=chunk) - Net interest income for Q3 2023 decreased by **$8.2 million (3.9%)** YoY, primarily due to a significant increase in interest expense on deposits and borrowings, partially offset by higher interest income from loans and cash balances[22](index=22&type=chunk)[316](index=316&type=chunk) [Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20(Unaudited)) This statement presents First BanCorp.'s net income alongside other comprehensive income or loss items, providing a complete view of changes in equity from non-owner sources Comprehensive Income (Loss) Summary | Metric | Q3 2023 (in thousands) | Q3 2022 (in thousands) | 9M 2023 (in thousands) | 9M 2022 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net Income | $82,022 | $74,603 | $223,375 | $231,898 | | Other Comprehensive Loss, net of tax | $(78,976) | $(270,937) | $(46,585) | $(778,694) | | Total Comprehensive Income (Loss) | $3,046 | $(196,334) | $176,790 | $(546,796) | - Total comprehensive income for Q3 2023 was **$3.0 million**, a significant improvement from a loss of **$196.3 million** in Q3 2022, primarily due to a substantial reduction in net unrealized holding losses on available-for-sale debt securities[24](index=24&type=chunk) - Net unrealized holding losses on available-for-sale debt securities decreased significantly to **$(78.9) million** in Q3 2023 from **$(270.9) million** in Q3 2022, and to **$(46.5) million** in 9M 2023 from **$(778.6) million** in 9M 2022[24](index=24&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) This statement summarizes First BanCorp.'s cash inflows and outflows from operating, investing, and financing activities, indicating its liquidity and solvency over specific periods Cash Flow Summary | Cash Flow Activity | 9M 2023 (in thousands) | 9M 2022 (in thousands) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $283,723 | $334,752 | | Net Cash Provided by (Used in) Investing Activities | $17,531 | $(508,184) | | Net Cash Used in Financing Activities | $(196,846) | $(1,814,636) | | Net Increase (Decrease) in Cash & Cash Equivalents | $104,408 | $(1,988,068) | | Cash & Cash Equivalents at End of Period | $584,913 | $554,990 | - Net cash provided by investing activities significantly improved to **$17.5 million** in 9M 2023 from a use of **$508.2 million** in 9M 2022, primarily due to repayments of investment securities[28](index=28&type=chunk)[418](index=418&type=chunk) - Net cash used in financing activities decreased to **$196.8 million** in 9M 2023 from **$1.8 billion** in 9M 2022, mainly reflecting a net increase in deposits and a smaller net decrease in borrowings[28](index=28&type=chunk)[420](index=420&type=chunk)[421](index=421&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20(Unaudited)) This statement details the changes in First BanCorp.'s stockholders' equity over specific periods, reflecting the impact of net income, dividends, and other comprehensive income Stockholders' Equity Changes | Metric | Q3 2023 (in thousands) | Q3 2022 (in thousands) | 9M 2023 (in thousands) | 9M 2022 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Total Stockholders' Equity (End of Period) | $1,303,068 | $1,265,333 | $1,303,068 | $1,265,333 | | Net Income | $82,022 | $74,603 | $223,375 | $231,898 | | Dividends on Common Stock | $(24,867) | $(22,653) | $(75,575) | $(65,909) | | Common Stock Repurchases | $(75,011) | $(75,010) | $(128,228) | $(227,723) | | Accumulated Other Comprehensive Loss, net of tax | $(851,363) | $(862,693) | $(851,363) | $(862,693) | - Total stockholders' equity decreased by **$22.5 million** from December 31, 2022, primarily due to **$125.0 million** in common stock repurchases and **$75.6 million** in dividends, partially offset by net income and changes in accumulated other comprehensive loss[423](index=423&type=chunk) - Common stock repurchases for 9M 2023 totaled **$128.2 million**, compared to **$227.7 million** for 9M 2022[31](index=31&type=chunk) [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed disclosures and explanations for the figures presented in the consolidated financial statements, covering significant accounting policies, specific asset and liability categories, equity, and other financial matters [Note 1 – Basis of Presentation and Significant Accounting Policies](index=11&type=section&id=Note%201%20%E2%80%93%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policies) This note outlines the foundational principles and key accounting methods used in preparing First BanCorp.'s financial statements, including recent accounting standard adoptions - First BanCorp. adopted ASU 2022-02, 'Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings (TDR) and Vintage Disclosures,' effective January 1, 2023[38](index=38&type=chunk) - The adoption of ASU 2022-02 resulted in a net increase to the Allowance for Credit Losses (ACL) of approximately **$2.1 million** and a decrease to retained earnings of approximately **$1.3 million**, after tax, predominantly driven by residential mortgage loans[40](index=40&type=chunk) - The Corporation elected to apply a non-discounted cash flow, portfolio-based ACL approach for modified loans to borrowers experiencing financial difficulties for all portfolios[40](index=40&type=chunk) [Note 2 – Debt Securities](index=13&type=section&id=Note%202%20%E2%80%93%20Debt%20Securities) This note provides detailed information on First BanCorp.'s debt securities portfolio, distinguishing between available-for-sale and held-to-maturity classifications, and disclosing fair values and unrealized gains/losses Debt Securities Portfolio | Debt Security Type | Sep 30, 2023 (Fair Value, in thousands) | Dec 31, 2022 (Fair Value, in thousands) | | :--- | :--- | :--- | | Total Available-for-Sale Debt Securities | $5,175,803 | $5,599,520 | | Total Held-to-Maturity Debt Securities (Amortized Cost, net of ACL) | $356,919 | $429,251 | - The net unrealized loss on available-for-sale debt securities was **$844.8 million** as of September 30, 2023, primarily attributable to changes in interest rates[50](index=50&type=chunk)[51](index=51&type=chunk)[365](index=365&type=chunk) - The ACL for held-to-maturity debt securities decreased to **$2.3 million** as of September 30, 2023, from **$8.3 million** as of December 31, 2022, mostly driven by the refinancing of a **$46.5 million** municipal bond and a reduction in qualitative reserves[69](index=69&type=chunk)[118](index=118&type=chunk) [Note 3 – Loans Held for Investment](index=23&type=section&id=Note%203%20%E2%80%93%20Loans%20Held%20for%20Investment) This note provides a detailed breakdown of First BanCorp.'s loan portfolio held for investment, categorized by loan type, and includes information on nonaccrual loans Loans Held for Investment (Gross) | Loan Type | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | Residential mortgage loans | $2,812,631 | $2,847,290 | | Construction loans | $202,774 | $132,953 | | Commercial mortgage loans | $2,316,113 | $2,358,851 | | C&I loans | $3,030,954 | $2,886,263 | | Consumer loans | $3,588,460 | $3,327,468 | | Total Loans Held for Investment (Gross) | $11,950,932 | $11,552,825 | - The total loan portfolio held for investment increased by **$394.8 million (3.4%)** from December 31, 2022, driven by increases in consumer loans (+$261.0 million) and commercial and construction loans (+$171.8 million)[343](index=343&type=chunk) - Nonaccrual loans held for investment increased to **$93.2 million** as of September 30, 2023, from **$89.9 million** as of December 31, 2022, primarily due to increases in nonaccrual commercial and construction loans and consumer loans[120](index=120&type=chunk)[473](index=473&type=chunk) [Note 4 – Allowance for Credit Losses for Loans and Finance Leases](index=42&type=section&id=Note%204%20%E2%80%93%20Allowance%20for%20Credit%20Losses%20for%20Loans%20and%20Finance%20Leases) This note details First BanCorp.'s allowance for credit losses (ACL) for loans and finance leases, including its ratio to total loans and ACL for off-balance sheet credit exposures Allowance for Credit Losses | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | ACL for Loans and Finance Leases | $263,615 | $260,464 | | ACL for Loans and Finance Leases to Total Loans Held for Investment | 2.21% | 2.25% | | ACL for Off-Balance Sheet Credit Exposures | $4,761 | $4,273 | - The ACL for loans and finance leases increased by **$3.1 million** from December 31, 2022, primarily due to a **$6.6 million increase** in commercial and construction loans' ACL and a **$2.1 million increase** in consumer loans' ACL[142](index=142&type=chunk) - The increase in commercial and construction loans' ACL was driven by a deterioration in the forecasted CRE price index and portfolio growth, including a **$1.7 million** incremental reserve for a nonaccrual C&I loan in Puerto Rico[142](index=142&type=chunk) [Note 5 – Other Real Estate Owned](index=45&type=section&id=Note%205%20%E2%80%93%20Other%20Real%20Estate%20Owned) This note provides information on First BanCorp.'s Other Real Estate Owned (OREO) portfolio, detailing its composition by type and changes in carrying value Other Real Estate Owned Balances | OREO Type | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | Residential | $20,740 | $24,025 | | Construction | $1,861 | $1,764 | | Commercial | $5,962 | $5,852 | | Total OREO Balances (Carrying Value) | $28,563 | $31,641 | - The OREO portfolio decreased by **$3.1 million** from December 31, 2022, primarily due to sales exceeding additions and write-downs[147](index=147&type=chunk)[488](index=488&type=chunk) - Net gain on OREO operations for 9M 2023 was **$6.1 million**, compared to **$3.3 million** for 9M 2022, driven by increased net realized gains on sales of OREO properties[22](index=22&type=chunk)[341](index=341&type=chunk) [Note 6 – Goodwill and Other Intangibles](index=46&type=section&id=Note%206%20%E2%80%93%20Goodwill%20and%20Other%20Intangibles) This note details First BanCorp.'s goodwill and other intangible assets, including their carrying amounts and amortization expenses - Goodwill remained unchanged at **$38.6 million** as of September 30, 2023, with no impairment charges recorded during the first nine months of 2023[20](index=20&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk) Intangible Assets | Intangible Asset | Sep 30, 2023 (Net Carrying Amount, in thousands) | Dec 31, 2022 (Net Carrying Amount, in thousands) | | :--- | :--- | :--- | | Core deposit intangible | $15,229 | $20,900 | | Purchased credit card relationship intangible | $0 | $205 | | Insurance customer relationship intangible | $0 | $13 | - Amortization expense on other intangibles was **$5.9 million** for 9M 2023, compared to **$6.7 million** for 9M 2022, with the purchased credit card relationship intangible becoming fully amortized in 2023[152](index=152&type=chunk)[337](index=337&type=chunk) [Note 7 – Non-Consolidated Variable Interest Entities and Servicing Assets](index=47&type=section&id=Note%207%20%E2%80%93%20Non-Consolidated%20Variable%20Interest%20Entities%20(%22VIEs%22)%20and%20Servicing%20Assets) This note provides information on First BanCorp.'s non-consolidated variable interest entities (VIEs) and servicing assets, including details on junior subordinated debentures and mortgage servicing rights (MSRs) - The Corporation repurchased **$21.4 million** of Trust-Preferred Securities (TRuPs) in Q2 2023, resulting in a **$1.6 million** gain on early extinguishment of debt[158](index=158&type=chunk)[300](index=300&type=chunk) VIEs and Servicing Assets | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | Junior Subordinated Debentures (outstanding) | $161,700 | $183,762 | | Servicing Assets (MSRs) Balance | $27,601 | $29,037 | - Net servicing income for 9M 2023 was **$5.3 million**, compared to **$5.1 million** for 9M 2022[165](index=165&type=chunk) [Note 8 – Deposits](index=51&type=section&id=Note%208%20%E2%80%93%20Deposits) This note provides a detailed breakdown of First BanCorp.'s deposit portfolio, distinguishing between non-interest-bearing and interest-bearing deposits, and including brokered CDs Deposit Composition | Deposit Type | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | Non-interest-bearing deposits | $5,440,247 | $6,112,884 | | Interest-bearing deposits | $10,994,990 | $10,030,583 | | Total Deposits | $16,435,237 | $16,143,467 | | Brokered CDs | $310,339 | $105,826 | - Total deposits increased by **$291.8 million (1.8%)** from December 31, 2022, driven by growth in interest-bearing checking accounts and CDs, including brokered CDs, partially offset by a decrease in non-interest-bearing deposits[20](index=20&type=chunk)[169](index=169&type=chunk)[293](index=293&type=chunk) - Interest expense on deposits significantly increased to **$54.3 million** in Q3 2023 (from **$10.0 million** in Q3 2022) and to **$125.8 million** in 9M 2023 (from **$25.3 million** in 9M 2022) due to higher rates[22](index=22&type=chunk)[169](index=169&type=chunk) [Note 9 – Securities Sold Under Agreements to Repurchase](index=52&type=section&id=Note%209%20%E2%80%93%20Securities%20Sold%20Under%20Agreements%20to%20Repurchase%20(Repurchase%20Agreements)) This note details First BanCorp.'s repurchase agreements, including outstanding balances and changes over the reported periods Repurchase Agreements | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | Short-term Securities Sold Under Agreements to Repurchase | $0 | $75,133 | - The Corporation fully repaid and did not renew its short-term repurchase agreements, resulting in no outstanding balance as of September 30, 2023[170](index=170&type=chunk)[402](index=402&type=chunk) [Note 10 – Advances from the Federal Home Loan Bank](index=52&type=section&id=Note%2010%20%E2%80%93%20Advances%20from%20the%20Federal%20Home%20Loan%20Bank%20(%22FHLB%22)) This note provides information on First BanCorp.'s advances from the Federal Home Loan Bank (FHLB), detailing short-term and long-term balances and associated interest rates FHLB Advances | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | Short-term Advances from FHLB | $0 | $475,000 | | Long-term Advances from FHLB | $500,000 | $200,000 | | Total Advances from FHLB | $500,000 | $675,000 | - Total advances from the FHLB decreased by **$175.0 million** from December 31, 2022, as short-term advances were repaid, and **$300.0 million** of new long-term advances were added[172](index=172&type=chunk)[174](index=174&type=chunk) - The weighted-average interest rate on long-term FHLB advances increased to **4.45%** as of September 30, 2023, from **4.25%** as of December 31, 2022[173](index=173&type=chunk) [Note 11 – Other Long-Term Borrowings](index=52&type=section&id=Note%2011%20%E2%80%93%20Other%20Long-Term%20Borrowings) This note details First BanCorp.'s other long-term borrowings, specifically junior subordinated debentures, including their outstanding balances and interest rates Other Long-Term Borrowings | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | Floating rate junior subordinated debentures (FBP Statutory Trust I) | $43,143 | $65,205 | | Floating rate junior subordinated debentures (FBP Statutory Trust II) | $118,557 | $118,557 | | Total Other Long-Term Borrowings | $161,700 | $183,762 | - Other long-term borrowings decreased by **$22.1 million** from December 31, 2022, primarily due to the repurchase of **$21.4 million** of TRuPs during Q2 2023[158](index=158&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) - Interest rates on junior subordinated debentures increased, with FBP Statutory Trust I at **8.42%** (Sep 30, 2023) from **7.49%** (Dec 31, 2022), and FBP Statutory Trust II at **8.16%** (Sep 30, 2023) from **7.25%** (Dec 31, 2022)[175](index=175&type=chunk) [Note 12 – Earnings per Common Share](index=53&type=section&id=Note%2012%20%E2%80%93%20Earnings%20per%20Common%20Share) This note provides a breakdown of First BanCorp.'s basic and diluted earnings per common share, along with the weighted-average shares outstanding used in the calculations Earnings per Common Share | Metric | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Income Attributable to Common Stockholders (in thousands) | $82,022 | $74,603 | $223,375 | $231,898 | | Basic EPS | $0.47 | $0.40 | $1.25 | $1.20 | | Diluted EPS | $0.46 | $0.40 | $1.25 | $1.19 | | Weighted-Average Shares Outstanding (in thousands) | 176,358 | 187,236 | 178,486 | 193,217 | - Basic and diluted EPS increased for both the quarter and nine-month period ended September 30, 2023, compared to the prior year, reflecting higher net income attributable to common stockholders and a decrease in weighted-average shares outstanding[177](index=177&type=chunk) [Note 13 – Stock-Based Compensation](index=54&type=section&id=Note%2013%20%E2%80%93%20Stock-Based%20Compensation) This note details First BanCorp.'s stock-based compensation plans, including expense recognition for restricted stock and performance units, and unrecognized compensation costs Stock-Based Compensation Expense | Metric | Q3 2023 (in thousands) | Q3 2022 (in thousands) | 9M 2023 (in thousands) | 9M 2022 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Stock-based Compensation Expense (Restricted Stock) | $1,300 | $900 | $4,300 | $2,700 | | Stock-based Compensation Expense (Performance Units) | $600 | $500 | $1,600 | $1,300 | - The Corporation granted **216,876 performance units** to executives on March 16, 2023, with vesting based on Relative Total Shareholder Return (Relative TSR) and Tangible Book Value Per Share (TBVPS) goals[186](index=186&type=chunk) - As of September 30, 2023, total unrecognized compensation cost related to unvested restricted stock was **$5.4 million** (weighted average period of **1.7 years**) and for unvested performance units was **$3.6 million** (weighted average period of **2.0 years**)[183](index=183&type=chunk)[193](index=193&type=chunk) [Note 14 – Stockholders' Equity](index=57&type=section&id=Note%2014%20%E2%80%93%20Stockholders'%20Equity) This note provides a comprehensive overview of First BanCorp.'s stockholders' equity, detailing changes due to repurchases, dividends, and net income, and outlining stock repurchase programs - Stockholders' equity decreased by **$22.5 million** from December 31, 2022, primarily due to **$125.0 million** in common stock repurchases and **$75.6 million** in dividends declared, partially offset by earnings[423](index=423&type=chunk) - The Corporation completed its **$350 million** stock repurchase program in Q3 2023 by repurchasing **5.4 million shares** for **$75.0 million**[196](index=196&type=chunk)[425](index=425&type=chunk) - A new **$225 million** stock repurchase program was approved on July 24, 2023, with approximately **1.8 million shares** repurchased for **$25.0 million** under this program as of November 1, 2023[197](index=197&type=chunk)[425](index=425&type=chunk) Stockholders' Equity Impact | Metric | 9M 2023 (in thousands) | 9M 2022 (in thousands) | | :--- | :--- | :--- | | Common Stock Repurchased | $(128,228) | $(227,723) | | Dividends on Common Stock | $(75,575) | $(65,909) | [Note 15 – Accumulated Other Comprehensive Loss](index=59&type=section&id=Note%2015%20%E2%80%93%20Accumulated%20Other%20Comprehensive%20Loss) This note explains the components and changes in First BanCorp.'s accumulated other comprehensive loss, particularly focusing on unrealized holding losses on available-for-sale debt securities and their tax effects Accumulated Other Comprehensive Loss | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | Accumulated Other Comprehensive Loss, net of tax | $(851,363) | $(804,778) | | Unrealized Net Holding Losses on AFS Debt Securities (9M Period) | $(46,585) | $(778,694) | - Accumulated other comprehensive loss increased to **$(851.4) million** as of September 30, 2023, primarily due to net unrealized holding losses on available-for-sale debt securities[20](index=20&type=chunk)[31](index=31&type=chunk)[204](index=204&type=chunk) - Net unrealized holding losses on available-for-sale debt securities had no tax effect because securities are either tax-exempt, held by an International Banking Entity (IBE), or have a full deferred tax asset valuation allowance[24](index=24&type=chunk)[205](index=205&type=chunk) [Note 16 – Employee Benefit Plans](index=59&type=section&id=Note%2016%20%E2%80%93%20Employee%20Benefit%20Plans) This note provides details on First BanCorp.'s employee benefit plans, including its frozen defined benefit pension plans and post-retirement benefit plan, and their associated net periodic costs Employee Benefit Plan Costs | Metric | Q3 2023 (in thousands) | Q3 2022 (in thousands) | 9M 2023 (in thousands) | 9M 2022 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net Periodic Cost (Benefit), Pension Plans | $64 | $(386) | $193 | $(1,157) | | Net Periodic Cost, Postretirement Plan | $7 | $2 | $19 | $5 | | Total Net Periodic Cost (Benefit) | $71 | $(384) | $212 | $(1,152) | - The Corporation maintains two frozen qualified noncontributory defined benefit pension plans and a related complementary post-retirement benefit plan[206](index=206&type=chunk) [Note 17 – Income Taxes](index=60&type=section&id=Note%2017%20%E2%80%93%20Income%20Taxes) This note provides detailed information on First BanCorp.'s income tax expense, effective tax rates, and deferred tax assets and liabilities, including valuation allowances Income Tax Expense and Rate | Metric | Q3 2023 (in thousands) | Q3 2022 (in thousands) | 9M 2023 (in thousands) | 9M 2022 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Income Tax Expense | $26,968 | $32,028 | $89,187 | $109,156 | | Estimated Annual Effective Tax Rate (excluding discrete items) | 28.2% (9M 2023) | 31.8% (9M 2022) | | | - Income tax expense decreased for both the quarter and nine-month period ended September 30, 2023, due to a lower effective tax rate from increased tax-advantaged business activities and a higher proportion of exempt income[212](index=212&type=chunk)[338](index=338&type=chunk) Deferred Tax Assets | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | Deferred Tax Asset, Net | $150,805 | $155,584 | | Valuation Allowance against DTA | $195,100 | $185,500 | - Cash paid for income tax for 9M 2023 amounted to **$88.3 million**, significantly higher than **$22.9 million** for 9M 2022, due to the full utilization of certain deferred tax assets related to NOLs in 2022[256](index=256&type=chunk)[340](index=340&type=chunk) [Note 18 – Fair Value](index=62&type=section&id=Note%2018%20%E2%80%93%20Fair%20Value) This note provides disclosures on First BanCorp.'s financial instruments measured at fair value, categorizing them into a three-level hierarchy and detailing valuation methodologies and significant unobservable inputs Level 3 Assets (AFS Debt Securities) | Asset Type (Level 3) | Sep 30, 2023 (Fair Value, in thousands) | Dec 31, 2022 (Fair Value, in thousands) | | :--- | :--- | :--- | | Private label MBS | $4,918 | $5,794 | | Puerto Rico government obligations | $1,448 | $2,201 | | Total Level 3 Assets (AFS Debt Securities) | $6,366 | $8,495 | - The Corporation recorded non-recurring fair value losses or valuation adjustments on loans receivable of **$(9.2) million** for 9M 2023 and on OREO of **$(0.2) million** for 9M 2023[225](index=225&type=chunk) - Significant unobservable inputs for private label MBS valuation include discount rate (**17.3%**), prepayment rate (**1.2%-8.8%**), and projected cumulative loss rate (**0.2%-13.7%**)[222](index=222&type=chunk) [Note 19 – Revenue from Contracts with Customers](index=67&type=section&id=Note%2019%20%E2%80%93%20Revenue%20from%20Contracts%20with%20Customers) This note provides information on First BanCorp.'s revenue from contracts with customers, detailing total revenue, net interest income, and non-interest income, and clarifying the scope of ASC Topic 606 Revenue Breakdown | Revenue Type | Q3 2023 (in thousands) | Q3 2022 (in thousands) | 9M 2023 (in thousands) | 9M 2022 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $230,024 | $237,603 | $699,513 | $683,212 | | Net Interest Income | $199,728 | $207,910 | $600,428 | $589,720 | | Total Non-Interest Income | $30,296 | $29,693 | $99,085 | $93,492 | - Most of the Corporation's revenue is not within the scope of ASC Topic 606, explicitly excluding net interest income from financial assets and liabilities[241](index=241&type=chunk) Contract Liabilities | Metric | Q3 2023 (in thousands) | Q3 2022 (in thousands) | 9M 2023 (in thousands) | 9M 2022 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Contract Liabilities (Ending Balance) | $527 | $945 | $527 | $945 | [Note 20 – Segment Information](index=70&type=section&id=Note%2020%20%E2%80%93%20Segment%20Information) This note provides financial information for First BanCorp.'s six reportable segments, detailing their performance metrics and how management evaluates their results - First BanCorp. has six reportable segments: Mortgage Banking, Consumer (Retail) Banking, Commercial and Corporate Banking, Treasury and Investments, United States Operations, and Virgin Islands Operations[248](index=248&type=chunk) Segment Performance | Metric | Q3 2023 (in thousands) | Q3 2022 (in thousands) | 9M 2023 (in thousands) | 9M 2022 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Total Segment Income (Loss) | $151,198 | $147,438 | $437,957 | $454,291 | | Total Consolidated Net Income | $82,022 | $74,603 | $223,375 | $231,898 | | Total Consolidated Average Assets | $18,895,980 | $19,147,118 | $18,748,479 | $19,704,594 | - The performance of segments is evaluated based on net interest income, provision for credit losses, non-interest income, and direct non-interest expenses, as well as the average volume of interest-earning assets less the ACL[251](index=251&type=chunk) [Note 21 – Supplemental Statement of Cash Flows Information](index=73&type=section&id=Note%2021%20%E2%80%93%20Supplemental%20Statement%20of%20Cash%20Flows%20Information) This note provides supplemental information to First BanCorp.'s consolidated statements of cash flows, including non-cash investing and financing activities and cash payments for interest and income taxes Supplemental Cash Flow Data | Metric | 9M 2023 (in thousands) | 9M 2022 (in thousands) | | :--- | :--- | :--- | | Cash Paid for Interest | $143,792 | $41,205 | | Cash Paid for Income Tax | $88,258 | $22,943 | | Additions to OREO (Non-cash) | $14,951 | $13,653 | | Loan Securitizations (Non-cash) | $100,735 | $113,757 | - Cash paid for interest significantly increased to **$143.8 million** in 9M 2023 from **$41.2 million** in 9M 2022[256](index=256&type=chunk) - Cash paid for income tax increased to **$88.3 million** in 9M 2023 from **$22.9 million** in 9M 2022, due to the full utilization of certain deferred tax assets related to NOLs in 2022[256](index=256&type=chunk)[340](index=340&type=chunk) [Note 22 – Regulatory Matters, Commitments, and Contingencies](index=74&type=section&id=Note%2022%20%E2%80%93%20Regulatory%20Matters%2C%20Commitments%2C%20and%20Contingencies) This note discusses First BanCorp.'s regulatory capital compliance, commitments to extend credit, legal proceedings, and potential impacts of regulatory changes like the FDIC's proposed special assessment - First BanCorp. and FirstBank exceeded all minimum regulatory capital ratios for capital adequacy purposes as of September 30, 2023, and FirstBank was considered a well-capitalized institution[258](index=258&type=chunk)[263](index=263&type=chunk) First BanCorp. Capital Ratios | Capital Ratio (First BanCorp.) | Sep 30, 2023 | Regulatory Minimum | | :--- | :--- | :--- | | Total Capital | 18.84% | 8.0% | | CET1 Capital | 16.35% | 4.5% | | Tier I Capital | 16.35% | 6.0% | | Leverage Ratio | 10.57% | 4.0% | - Commitments to extend credit amounted to approximately **$2.0 billion** as of September 30, 2023, including **$961.1 million** for retail credit card loans[265](index=265&type=chunk) - Management believes the final disposition of legal proceedings, claims, and other loss contingencies will not have a material adverse effect on the Corporation's consolidated financial position[268](index=268&type=chunk) - The FDIC's proposed special assessment to recover costs from bank failures could increase the Corporation's non-interest expense by approximately **$6 million** if finalized as proposed[270](index=270&type=chunk)[548](index=548&type=chunk) [Note 23 – First BanCorp. (Holding Company Only) Financial Information](index=77&type=section&id=Note%2023%20%E2%80%93%20First%20BanCorp.%20(Holding%20Company%20Only)%20Financial%20Information) This note presents the separate financial information for First BanCorp. as a holding company, including its assets, liabilities, equity, and income from banking subsidiaries Holding Company Financial Condition | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | Total Assets | $1,475,687 | $1,519,376 | | Total Liabilities | $172,619 | $193,836 | | Stockholders' Equity | $1,303,068 | $1,325,540 | Holding Company Income | Metric | 9M 2023 (in thousands) | 9M 2022 (in thousands) | | :--- | :--- | :--- | | Dividend Income from Banking Subsidiaries | $239,980 | $292,000 | | Net Income | $223,375 | $231,898 | - The holding company's total assets decreased by **$43.7 million** from December 31, 2022, and its net income for 9M 2023 was **$223.4 million**[273](index=273&type=chunk)[276](index=276&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=79&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS%20(%22MD%26A%22)) This section provides management's perspective on First BanCorp.'s financial condition and results of operations, offering a detailed analysis of key financial metrics, performance drivers, and risk management strategies for the reported periods [Executive Summary](index=79&type=section&id=EXECUTIVE%20SUMMARY) This summary provides a high-level overview of First BanCorp.'s business, financial performance for the quarter, and key market trends impacting its operations - First BanCorp. is a diversified financial holding company operating in Puerto Rico, USVI, BVI, and Florida, offering a full range of financial products[279](index=279&type=chunk) - For Q3 2023, net income was **$82.0 million**, with a strong return on average assets of **1.72%**, driven by loan growth, disciplined expense management, and encouraging economic trends in its main market[282](index=282&type=chunk) - The deposit market continues to reflect a gradual erosion of excess liquidity and migration of retail customers to higher-rate options, partially offset by stabilization in commercial deposit balances[283](index=283&type=chunk) [Critical Accounting Policies and Practices](index=80&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20PRACTICES) This section highlights First BanCorp.'s critical accounting estimates that involve significant judgment and uncertainty, such as the allowance for credit losses, valuation of financial instruments, and income taxes - Critical accounting estimates, which involve significant judgment and uncertainty, include the allowance for credit losses (ACL), valuation of financial instruments, and income taxes[286](index=286&type=chunk) - Actual results could differ from estimates and assumptions if different outcomes or conditions prevail[286](index=286&type=chunk) [Overview of Results of Operations](index=81&type=section&id=Overview%20of%20Results%20of%20Operations) This section provides a summary of First BanCorp.'s key financial performance indicators, including net income, EPS, and efficiency ratio, highlighting significant changes and their drivers Key Performance Indicators | Key Performance Indicator | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Income (in millions) | $82.0 | $74.6 | $223.4 | $231.9 | | Diluted EPS | $0.46 | $0.40 | $1.25 | $1.19 | | Return on Average Assets | 1.72% | 1.55% | 1.59% | 1.57% | | Return on Average Common Equity | 20.70% | 19.00% | 19.00% | 17.73% | | Efficiency Ratio | 50.71% | 48.48% | 49.29% | 48.33% | - Net interest income for Q3 2023 decreased to **$199.7 million** (vs **$207.9 million** in Q3 2022), mainly due to increased interest expense on deposits and a continued migration to higher-cost deposits[292](index=292&type=chunk) - The provision for credit losses for Q3 2023 was **$4.4 million** (vs **$15.8 million** in Q3 2022), a decrease primarily related to updated macroeconomic variables and a higher net benefit for held-to-maturity debt securities[292](index=292&type=chunk) - Non-interest expenses for Q3 2023 increased by **$1.4 million** to **$116.6 million**, mainly due to higher employees' compensation and benefits, partially offset by decreased professional service fees and increased net gains on OREO operations[292](index=292&type=chunk) [Non-GAAP Financial Measures and Reconciliations](index=83&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES%20AND%20RECONCILIATIONS) This section explains First BanCorp.'s use of non-GAAP financial measures, such as adjusted net income and tangible common equity, and provides reconciliations to their most directly comparable GAAP measures - The Corporation uses non-GAAP financial measures such as net interest income (excluding valuations, on a tax-equivalent basis), tangible common equity ratio, and adjusted net income/efficiency ratio to provide additional information and facilitate comparability[294](index=294&type=chunk)[296](index=296&type=chunk)[298](index=298&type=chunk) - For 9M 2023, adjusted net income excludes a **$3.6 million** gain from a legal settlement and a **$1.6 million** gain on early extinguishment of debt[300](index=300&type=chunk) Adjusted Net Income Reconciliation | Metric | 9M 2023 (in thousands) | | :--- | :--- | | Net income, as reported (GAAP) | $223,375 | | Adjustments (net of tax) | $(3,855) | | Adjusted net income (Non-GAAP) | $219,520 | [Results of Operations](index=85&type=section&id=RESULTS%20OF%20OPERATIONS) This section provides a detailed breakdown of the Corporation's financial performance, analyzing changes in net interest income, provision for credit losses, non-interest income, non-interest expenses, and income taxes for the reported periods [Net Interest Income](index=85&type=section&id=Net%20Interest%20Income) This section analyzes First BanCorp.'s net interest income and net interest margin, detailing the factors influencing changes in interest income from assets and interest expense on liabilities Net Interest Income and Margin | Metric | Q3 2023 (in thousands) | Q3 2022 (in thousands) | 9M 2023 (in thousands) | 9M 2022 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income (GAAP) | $199,728 | $207,910 | $600,428 | $589,720 | | Net Interest Income (Tax-Equivalent, Excl. Valuations, Non-GAAP) | $204,415 | $217,049 | $617,005 | $615,443 | | Net Interest Margin (GAAP) | 4.15% | 4.31% | 4.24% | 4.04% | - Net interest income for Q3 2023 decreased by **$8.2 million (3.9%)** YoY, primarily due to a **$44.3 million increase** in interest expense on interest-bearing deposits and a **$4.6 million net increase** in interest expense on borrowings[316](index=316&type=chunk)[317](index=317&type=chunk) - Net interest income for 9M 2023 increased by **$10.7 million (1.8%)** YoY, driven by a **$111.9 million increase** in interest income on loans and a **$17.0 million increase** in interest income from interest-bearing cash balances and investment securities[322](index=322&type=chunk)[323](index=323&type=chunk)[324](index=324&type=chunk) - Net interest margin decreased to **4.15%** in Q3 2023 (from **4.31%** in Q3 2022) but increased to **4.24%** in 9M 2023 (from **4.04%** in 9M 2022)[320](index=320&type=chunk)[325](index=325&type=chunk) [Provision for Credit Losses](index=93&type=section&id=Provision%20for%20Credit%20Losses) This section analyzes First BanCorp.'s provision for credit losses, detailing the expense allocated to loans, unfunded commitments, and debt securities, and explaining the drivers of these changes Provision for Credit Losses | Metric | Q3 2023 (in thousands) | Q3 2022 (in thousands) | 9M 2023 (in thousands) | 9M 2022 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Provision for Credit Losses - Expense | $4,396 | $15,783 | $42,128 | $11,984 | | Loans and Finance Leases | $10,643 | $14,352 | $47,669 | $10,028 | | Unfunded Loan Commitments | $(128) | $2,071 | $488 | $2,705 | | Debt Securities | $(6,119) | $(640) | $(6,029) | $(749) | - The total provision for credit losses decreased to **$4.4 million** in Q3 2023 (from **$15.8 million** in Q3 2022), primarily due to updated macroeconomic variables and a higher net benefit for held-to-maturity debt securities[327](index=327&type=chunk)[330](index=330&type=chunk) - The total provision for credit losses increased to **$42.1 million** in 9M 2023 (from **$12.0 million** in 9M 2022), mainly driven by an expense of **$10.6 million** for commercial and construction loans and **$43.9 million** for consumer loans and finance leases[328](index=328&type=chunk) - The net benefit for held-to-maturity debt securities was **$6.2 million** in Q3 2023 and **$6.0 million** in 9M 2023, mostly due to the refinancing of a **$46.5 million** municipal bond[330](index=330&type=chunk) [Non-Interest Income](index=95&type=section&id=Non-Interest%20Income) This section analyzes First BanCorp.'s non-interest income, detailing changes in revenue streams such as card and processing income, mortgage banking activities, and other non-interest income Non-Interest Income Breakdown | Metric | Q3 2023 (in thousands) | Q3 2022 (in thousands) | 9M 2023 (in thousands) | 9M 2022 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Total Non-Interest Income | $30,296 | $29,693 | $99,085 | $93,492 | | Card and Processing Income | $10,841 | $9,834 | $32,894 | $29,815 | | Other Non-Interest Income | $4,292 | $4,015 | $17,329 | $11,495 | | Mortgage Banking Activities | $2,821 | $3,400 | $8,493 | $12,688 | - Non-interest income for Q3 2023 increased by **$0.6 million (2.0%)** YoY, driven by a **$1.0 million increase** in card and processing income and a **$0.3 million increase** in other non-interest income[333](index=333&type=chunk)[334](index=334&type=chunk) - Non-interest income for 9M 2023 increased by **$5.6 million (6.0%)** YoY, including a **$3.6 million** gain from a legal settlement and a **$1.6 million** gain on early extinguishment of debt[300](index=300&type=chunk)[333](index=333&type=chunk) - Revenues from mortgage banking activities decreased by **$0.6 million** in Q3 2023 and **$4.2 million** in 9M 2023 due to lower sales volume and margins[334](index=334&type=chunk) [Non-Interest Expenses](index=96&type=section&id=Non-Interest%20Expenses) This section analyzes First BanCorp.'s non-interest expenses, detailing changes in categories such as employees' compensation and benefits, FDIC deposit insurance, and net gains on OREO operations Non-Interest Expenses Breakdown | Metric | Q3 2023 (in thousands) | Q3 2022 (in thousands) | 9M 2023 (in thousands) | 9M 2022 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Total Non-Interest Expenses | $116,638 | $115,189 | $344,823 | $330,174 | | Employees' Compensation and Benefits | $56,535 | $52,939 | $167,271 | $153,797 | | FDIC Deposit Insurance | $2,143 | $1,466 | $6,419 | $4,605 | | Net Gain on OREO Operations | $(2,153) | $(1,064) | $(6,133) | $(3,269) | - Non-interest expenses for Q3 2023 increased by **$1.4 million (1.2%)** YoY, and for 9M 2023 increased by **$14.6 million (4.4%)** YoY[335](index=335&type=chunk)[336](index=336&type=chunk) - Employees' compensation and benefits increased by **$3.6 million** in Q3 2023 and **$13.5 million** in 9M 2023, driven by salary increases, minimum wage adjustments, and higher medical insurance costs[337](index=337&type=chunk) - Net gains on OREO operations increased by **$1.1 million** in Q3 2023 and **$2.9 million** in 9M 2023, partially offsetting the increase in expenses[335](index=335&type=chunk)[341](index=341&type=chunk) [Income Taxes](index=97&type=section&id=Income%20Taxes) This section analyzes First BanCorp.'s income tax expense and effective tax rate, explaining the factors contributing to changes in tax burden, including tax-advantaged activities and deferred tax asset utilization Income Tax Expense and Rate | Metric | Q3 2023 (in thousands) | Q3 2022 (in thousands) | 9M 2023 (in thousands) | 9M 2022 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Income Tax Expense | $26,968 | $32,028 | $89,187 | $109,156 | | Estimated Annual Effective Tax Rate (9M, excl. discrete items) | 28.2% | 31.8% | | | - Income tax expense decreased for both Q3 2023 and 9M 2023 compared to the prior year, primarily due to a lower effective tax rate from increased tax-advantaged business activities and a higher proportion of exempt income[212](index=212&type=chunk)[338](index=338&type=chunk) - Cash paid for income tax for 9M 2023 amounted to **$88.3 million**, significantly higher than **$22.9 million** for 9M 2022, due to the full utilization of certain deferred tax assets related to NOLs in 2022[256](index=256&type=chunk)[340](index=340&type=chunk) [Financial Condition and Operating Analysis](index=98&type=section&id=FINANCIAL%20CONDITION%20AND%20OPERATING%20ANALYSIS) This section analyzes the Corporation's financial position, focusing on changes in assets, particularly the loan portfolio and investment activities. Total assets slightly decreased, while the loan portfolio grew, driven by consumer and commercial loans [Assets](index=98&type=section&id=Assets) This section analyzes the changes in First BanCorp.'s total assets, identifying the primary drivers such as fluctuations in available-for-sale debt securities, loans, and cash balances - Total assets decreased by **$39.9 million** to **$18.6 billion** as of September 30, 2023, from December 31, 2022[20](index=20&type=chunk)[342](index=342&type=chunk) - The decrease was primarily related to a **$46.6 million decrease** in the fair value of available-for-sale debt securities, partially offset by increases in total loans and cash and cash equivalents[342](index=342&type=chunk) [Loans Receivable, including Loans Held for Sale](index=98&type=section&id=Loans%20Receivable%2C%20including%20Loans%20Held%20for%20Sale) This section provides a detailed analysis of First BanCorp.'s loan portfolio, including loans held for investment and sale, categorized by type, and highlights growth drivers and commercial loan exposures Loan Portfolio (Gross) | Loan Type | Sep 30, 2023 (Gross, in thousands) | Dec 31, 2022 (Gross, in thousands) | | :--- | :--- | :--- | | Residential mortgage loans | $2,812,631 | $2,847,290 | | Commercial and construction loans | $5,549,841 | $5,378,067 | | Consumer loans and finance leases | $3,588,460 | $3,327,468 | | Total Loans Held for Investment, Gross | $11,950,932 | $11,552,825 | - The total loan portfolio (before ACL) increased by **$394.8 million (3.4%)** to **$12.0 billion** as of September 30, 2023, compared to December 31, 2022[343](index=343&type=chunk) - Growth was primarily in consumer loans (+$261.0 million) and commercial and construction loans (+$171.8 million), mainly in the Puerto Rico and Virgin Islands regions[343](index=343&type=chunk) - Total commercial mortgage loan exposure amounted to **$2.3 billion** (**42%** of the total commercial loan portfolio) as of September 30, 2023[354](index=354&type=chunk) [Loan Production](index=100&type=section&id=Loan%20Production) This section analyzes First BanCorp.'s loan production across various categories, including residential mortgage, commercial, construction, and consumer loans, highlighting trends and significant originations Loan Production Summary | Loan Type | Q3 2023 (in thousands) | Q3 2022 (in thousands) | 9M 2023 (in thousands) | 9M 2022 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Residential mortgage | $129,852 | $103,897 | $322,405 | $352,942 | | Commercial and construction | $777,919 | $684,720 | $2,098,053 | $2,195,197 | | Consumer | $462,080 | $459,402 | $1,351,403 | $1,368,121 | | Total Loan Production | $1,369,848 | $1,244,913 | $3,771,761 | $3,916,258 | - Total loan production increased by **$124.9 million (10.0%)** in Q3 2023 YoY, but decreased by **$144.5 million (3.7%)** in 9M 2023 YoY[358](index=358&type=chunk) - Government loan originations significantly increased to **$168.7 million** in 9M 2023 (from **$36.6 million** in 9M 2022), mainly due to the refinancing of a **$46.5 million** municipal loan and a **$55.8 million** line of credit utilization in the Virgin Islands region[361](index=361&type=chunk) [Investment Activities](index=102&type=section&id=Investment%20Activities) This section analyzes First BanCorp.'s investment portfolio, detailing changes in available-for-sale and held-to-maturity debt securities, including fair value adjustments and the allowance for credit losses Investment Portfolio | Investment Type | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | Total Available-for-Sale Debt Securities (Fair Value) | $5,175,803 | $5,599,520 | | Total Held-to-Maturity Debt Securities (Amortized Cost, net of ACL) | $356,919 | $429,251 | | Net Unrealized Loss on AFS Debt Securities | $844,877 | $798,466 | - The total available-for-sale debt securities portfolio decreased by **$423.7 million (7.6%)** from December 31, 2022, primarily due to repayments and a **$46.6 million decrease** in fair value attributable to changes in market interest rates[365](index=365&type=chunk) - The held-to-maturity debt securities portfolio decreased by **$78.3 million (17.9%)** from December 31, 2022, mainly due to the refinancing of a **$46.5 million** municipal bond and **$33.4 million** in repayments[367](index=367&type=chunk) - The ACL for held-to-maturity debt securities decreased to **$2.3 million** as of September 30, 2023, from **$8.3 million** as of December 31, 2022[367](index=367&type=chunk) [Risk Management](index=104&type=section&id=RISK%20MANAGEMENT) This section details First BanCorp.'s comprehensive risk management framework, covering various risk categories including liquidity, interest rate, credit, operational, legal, compliance, and concentration risks. It outlines policies, procedures, and committees in place to identify, monitor, and mitigate these risks to align with the Corporation's objectives and risk tolerance [General Risk Management](index=104&type=section&id=General) This section outlines First BanCorp.'s overarching risk management framework, including its goals and the broad categories of risks monitored and managed - First BanCorp. has a risk management framework to monitor, evaluate, and manage eleven broad categories of risks, including liquidity, interest rate, market, and credit risk[374](index=374&type=chunk) - The primary goals of risk management are to ensure risk-taking activities align with objectives and risk tolerance, and to balance risks and rewards to maximize stockholder value[373](index=373&type=chunk) [Liquidity Risk](index=104&type=section&id=Liquidity%20Risk) This section details First BanCorp.'s approach to managing liquidity risk, including its core liquidity reserve, available liquidity sources, and the impact of deposit trends and credit commitments - The Corporation manages liquidity at both the parent company and banking subsidiary levels, overseen by the Asset and Liability Committee of the Board[377](index=377&type=chunk)[378](index=378&type=chunk) Liquidity Metrics | Metric | Sep 30, 2023 (in billions) | Dec 31, 2022 (in billions) | | :--- | :--- | :--- | | Estimated Core Liquidity Reserve | $2.7 | $3.5 | | Basic Liquidity Ratio (% of Total Assets) | 19.67% | 22.48% | | Total Available Liquidity (incl. FHLB & FED Discount Window) | $5.1 | N/A | | Uninsured Deposits (excl. collateralized government deposits) | $4.8 | $4.9 | - Total available liquidity of **$5.1 billion** as of September 30, 2023, represents **107%** of uninsured deposits (excluding government deposits)[383](index=383&type=chunk) - Core deposits (excluding government and brokered CDs) decreased by **$406.0 million** to **$12.9 billion** as of September 30, 2023, due to customer reallocation to higher-yielding alternatives[393](index=393&type=chunk) - Commitments to extend credit amounted to approximately **$2.0 billion** as of September 30, 2023[385](index=385&type=chunk)[386](index=386&type=chunk) [Capital](index=111&type=section&id=Capital) This section analyzes First BanCorp.'s capital position, including changes in stockholders' equity, stock repurchase programs, and key capital ratios, confirming compliance with regulatory minimums - Stockholders' equity decreased by **$22.5 million** to **$1.3 billion** as of September 30, 2023, primarily due to **$125.0 million** in common stock repurchases and **$75.6 million** in dividends, partially offset by net income[423](index=423&type=chunk) - A new **$225 million** stock repurchase program was approved on July 24, 2023. As of November 1, 2023, **$25.0 million** has been repurchased under this program[425](index=425&type=chunk) Capital Metrics | Capital Metric | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Tangible Common Equity Ratio (non-GAAP) | 6.74% | 6.81% | | Tangible Book Value Per Common Share (non-GAAP) | $7.16 | $6.93 | - The Corporation and FirstBank exceeded all minimum regulatory capital ratios as of September 30, 2023[258](index=258&type=chunk)[263](index=263&type=chunk) [Interest Rate Risk Management](index=113&type=section&id=Interest%20Rate%20Risk%20Management) This section describes First BanCorp.'s strategy for managing interest rate risk, including its use of net interest income simulation analysis and the projected sensitivity of net interest income to rate changes - First BanCorp. manages interest rate risk through quarterly net interest income simulation analysis over a one-to-five-year horizon, considering gradual and immediate interest rate movements[432](index=432&type=chunk)[434](index=434&type=chunk) Net Interest Income Sensitivity (12-month projected % change) | Scenario (12-month projected % change in NII) | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | +300 bps ramp | 0.00% | 1.42% | | -300 bps ramp | -0.30% | -2.78% | | +200 bps shock | 1.26% | 2.35% | | -200 bps shock | -2.22% | -4.71% | - As of September 30, 2023, static simulations show a relatively neutral net interest income sensitivity position for the next twelve months, a shift from an asset-sensitive position as of December 31, 2022[438](index=438&type=chunk) [Credit Risk Management](index=114&type=section&id=Credit%20Risk%20Management) This section details First BanCorp.'s credit risk management practices, including its credit policy, underwriting, monitoring of loan concentrations, and efforts to mitigate losses, along with key credit quality metrics - First BanCorp. manages credit risk through its credit policy, underwriting, monitoring of loan concentrations, and proactive collection and loss mitigation efforts[441](index=441&type=chunk) Credit Quality Metrics | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | ACL for Loans and Finance Leases | $263,615 | $260,464 | | ACL for Loans and Finance Leases to Total Loans Held for Investment | 2.21% | 2.25% | | Total Nonaccrual Loans Held for Investment | $93,164 | $89,935 | | Total Non-Performing Assets | $130,238 | $129,158 | - The ACL for loans and finance leases increased by **$3.1 million** from December 31, 2022, driven by commercial/construction and consumer loan portfolios, partially offset by residential mortgage loans[448](index=448&type=chunk) - Net charge-offs for 9M 2023 totaled **$46.6 million** (**0.54%** of average loans), compared to **$21.1 million** (**0.25%** of average loans) for 9M 2022, mainly driven by consumer loans and a **$6.2 million** charge-off on a C&I loan[490](index=490&type=chunk)[491](index=491&type=chunk)[492](index=492&type=chunk) [Operational Risk](index=129&type=section&id=Operational%20Risk) This section describes First BanCorp.'s approach to mitigating operational risk through internal controls, policies, and procedures, categorizing risks into business-specific and corporate-wide areas - The Corporation mitigates operational risk through specific internal controls, policies, and procedures, classifying risks into business-specific and corporate-wide categories[501](index=501&type=chunk)[502](index=502&type=chunk) [Legal and Compliance Risk](index=129&type=section&id=Legal%20and%20Compliance%20Risk) This section defines First BanCorp.'s legal and compliance risk, encompassing noncompliance with regulations, adverse legal judgments, and unenforceability of obligations, and outlines its oversight structure - Legal and compliance risk includes noncompliance with legal/regulatory requirements, adverse legal judgments, and unenforceability of counterparty obligations[503](index=503&type=chunk) - The Corporation has a Compliance Director responsible for overseeing regulatory compliance and implementing an enterprise-wide compliance risk assessment process[503](index=503&type=chunk) [Concentration Risk](index=129&type=section&id=Concentration%20Risk) This section addresses First BanCorp.'s concentration risk, specifically highlighting its significant geographic concentration of operations and loan portfolio in Puerto Rico, the United States, and the Virgin Islands - The Corporation's operations are geographically concentrated, with approximately **79%** of its total gross loan portfolio in Puerto Rico, **17%** in the United States, and **4%** in the Virgin Islands region as of September 30, 2023[504](index=504&type=chunk) [Update on the Puerto Rico Fiscal and Economic Situation](index=130&type=section&id=Update%20on%20the%20Puerto%20Rico%20Fiscal%20and%20Economic%20Situation) This section provides an update on Puerto Rico's fiscal and economic conditions, including positive economic indicators, the 2023 Fiscal Plan's priorities, ongoing debt restructuring efforts (especially for PREPA), and other developments like disaster relief fund disbursements and infrastructure improvements [Economic Indicators](index=130&type=section&id=Economic%20Indicators) This section presents key economic indicators for Puerto Rico, including real gross national product (GNP) growth, the Economic Activity Index, and payroll employment figures - Puerto Rico's real gross national product (GNP) expanded by **3.7%** in fiscal year 2022, the highest annual growth since 1999[507](index=507&type=chunk) - The Economic Development Bank for Puerto Rico's Economic Activity Index (EDB-EAI) increased **3.3%** year-over-year for August 2023[508](index=508&type=chunk) - Payroll employment in Puerto Rico increased by **2.3%** year-over-year in September 2023, with the unemployment rate at **6.0%**[509](index=509&type=chunk) [Fiscal Plan](index=130&type=section&id=Fiscal%20Plan) This section outlines the priorities and projections of Puerto Rico's 2023 Fiscal Plan, including financial management, public-sector performance, economic growth through structural reforms, and projected disaster relief funding disbursements - The 2023 Fiscal Plan for Puerto Rico, certified on April 3, 2023, prioritizes financial management, public-sector performance, and economic growth through structural reforms[510](index=510&type=chunk)[511](index=511&type=chunk) - The plan projects a **0.7% decline** in real GNP for FY 2023, followed by near-zero real growth through FY 2026, acknowledging the temporary impact of federal funds[512](index=512&type=chunk) - Approximately **$81 billion** in total disaster relief funding is projected for disbursement from FY 2018 through 2035, with accelerated deployment of **$9.3 billion** in COVID-19 relief funds from FY 2023 through 2025[513](index=513&type=chunk)[514](index=514&type=chunk) [Debt Restructuring](index=131&type=section&id=Debt%20Restructuring) This section provides an update on Puerto Rico's debt restructuring efforts, highlighting the progress made on public debt and the ongoing process for the Puerto Rico Electric Power Authority (PREPA) - Over **80%** of Puerto Rico's outstanding public debt has been restructured, including the central government, COFINA, HTA, and PRASA[515](index=515&type=chunk) - The Fiscal Oversight and Management Board filed a third amended Plan of Adjustment for PREPA on August 25, 2023, to reduce total asserted claims by approximately **80%** to **$2.5 billion**[517](index=517&type=chunk) - The disclosure statement hearing for PREPA's amended plan is scheduled for November 14, 2023, with the confirmation hearing expected in March 2024[517](index=517&type=chunk) [Other Developments](index=131&type=section&id=Other%20Developments) This section covers other significant developments in Puerto Rico, including increased disaster relief fund disbursements, infrastructure investments, and improvements in government financial reporting - Over **$2.6 billion** in disaster relief funds were disbursed in the first eight months of 2023, an **81% increase** compared to the same period in 2022, supporting infrastructure restoration[518](index=518&type=chunk) - The Government of Puerto Rico executed a **$2.85 billion** concession agreement with PR Tollroads, enabling HTA to pay off approximately **$1.6 billion** of its outstanding debt and fund **$1.1 billion** in new transportation investments[520](index=520&type=chunk) - Fitch Ratings highlighted the government's commitment to improving continuing disclosure practices and the timely release of audited financial statements[519](index=519&type=chunk) [Exposure to Puerto Rico Government](index=132&type=section&id=Exposure%20to%20Puerto%20Rico%20Government) This section details First BanCorp.'s direct exposure to the Puerto Rico government, its municipalities, and public corporations, including loans and public sector deposits Exposure to PR Government | Exposure Type | Sep 30, 2023 (in thousands) | Dec 31, 2

First BanCorp. (NYSE:FBP) Q3 2023 Earnings Conference Call October 20, 2023 11:00 AM ET Company Participants Ramon Rodriguez - IR Officer Aurelio Alemán-Bermudez - President and CEO Orlando Berges-González - EVP and CFO Conference Call Participants Alex Twerdahl - Piper Sandler Operator Hello, everyone, and welcome to the First BanCorp Third Quarter 2023 Financial Results. My name is Bruno and I'll be operating your call today. [Operator Instructions] I will now hand over to your host, Ramon Rodriguez, Inve ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________ FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 For the transition period from ___________________ to___________________ Not applicable (Former name, former address and former fiscal year, if changed since last report) COMMISSION FIL ...

Financial Data and Key Metrics Changes - The company reported net income of $70.7 million or $0.39 per share, translating to a return on assets of 1.51% [95] - Net interest income for the quarter was $199.8 million, which was $1.1 million lower than the previous quarter [69] - The effective tax rate decreased to 30.1%, down from 31.2% in the previous quarter [69] - Operating expenses decreased by $2.4 million to $112.9 million compared to $115 million in the previous quarter [78] Business Line Data and Key Metrics Changes - The commercial loan portfolio interest income grew by $3.4 million, with a yield increase of 15 basis points [71] - Consumer loans saw an interest income increase of $3.9 million, driven by a $71.8 million growth in average balances [71] - The loan portfolio grew by approximately $140 million during the quarter, with consumer loans increasing by $88 million (10% linked-quarter annualized) and commercial loans increasing by $71 million (5% linked-quarter annualized) [100] Market Data and Key Metrics Changes - Total deposits increased by $768 million during the quarter, with government deposits rising by $761 million primarily in Puerto Rico [106] - The average cost of non-brokered time deposits grew by 63 basis points to 2.5% during the quarter [72] - The liquidity position remains strong, with total unused liquidity increasing to $5.6 billion, representing over 117% of uninsured deposits [107] Company Strategy and Development Direction - The company continues to operate with a conservative risk appetite while maintaining a well-diversified and balanced portfolio [102] - There is a focus on core deposit strategy, including increasing client share and launching new products [107] - The company is investing in technology and process improvements, particularly in migrating to cloud-based IT systems [61] Management's Comments on Operating Environment and Future Outlook - The economic backdrop in Puerto Rico is supported by a strong labor market and a consistent flow of federal disaster funds [108] - The company remains vigilant regarding the potential impact of monetary policy and economic slowdown on credit and loan demand [104] - Management expects interest income to continue growing in the next couple of quarters due to loan repricing and portfolio growth [75] Other Important Information - The provision for credit losses increased to $22.2 million, reflecting stable credit quality with non-performing assets at 63 basis points of total assets [96] - The company completed its capital planning process and approved a $225 million common share repurchase program [98] - The allowance for credit losses stands at $281 million, reflecting growth in the portfolio and projected deterioration in commercial real estate values [83] Q&A Session Summary Question: What are the expectations for government deposit balances over the next couple of quarters? - Management expects government deposits to remain stable, with some fluctuations based on ongoing projects related to energy [31] Question: Can you provide details on the average balance of public funds for the quarter? - The average balance of government deposits in Puerto Rico was $2.9 billion, up from $2.2 billion at the end of the last quarter [24] Question: What is the timeline for capital expenditures and how will delays affect expenses? - Delays in capital projects are ongoing, and expenses will remain lower for the next couple of quarters as projects progress at a slower pace [22]

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________ FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or For the transition period from ___________________ to___________________ COMMISSION FILE NUMBER001-14793 FIRST BANCORP. (EXACT NAME OF REGISTRANT AS SPECIFIEDIN ITS CHARTER) Puerto Ric ...

First BanCorp. (NYSE:FBP) Q1 2023 Earnings Conference Call April 25, 2023 10:00 AM ET Company Participants Ramon Rodriguez - Senior Vice President, Corporate Strategy and Investor Relations Aurelio Aleman-Bermudez - President and Chief Executive Officer Orlando Berges-Gonzalez - Executive Vice President and Chief Financial Officer Conference Call Participants Timur Braziler - Wells Fargo Kelly Motta - KBW Operator Hello, everyone and welcome to First BanCorp's First Quarter 2023 Financial Results Call. My n ...

PART I [Business](index=5&type=section&id=Item%201.%20Business) First BanCorp. is a financial holding company providing diverse banking services across Puerto Rico, the U.S., and the Virgin Islands, with **$18.6 billion in assets** and six reportable segments - Key Financial Metrics as of December 31, 2022 | Metric | Amount (USD Billions) | | :--- | :--- | | Total Assets | $18.6 | | Total Loans | $11.6 | | Total Deposits | $16.1 | | Total Stockholders' Equity | $1.3 | - The Corporation operates through its main office in San Juan, Puerto Rico, and a network of **59 branches** in Puerto Rico, **8** in the USVI and BVI, and **9** in Florida[18](index=18&type=chunk) - As of December 31, 2022, the company employed **3,133 regular employees**, a **2% increase** from 2021. Women comprised approximately **67%** of the total workforce and **57%** of top and middle management[36](index=36&type=chunk) [Business Segments](index=5&type=section&id=Business%20Segments) The Corporation operates through six distinct segments, including Commercial, Mortgage, Consumer, Treasury, and U.S./Virgin Islands Operations, each focusing on specific banking activities - The Corporation has six reportable segments: Commercial and Corporate Banking; Mortgage Banking; Consumer (Retail) Banking; Treasury and Investments; United States Operations; and Virgin Islands Operations[20](index=20&type=chunk) - The United States Operations segment provides consumer and commercial banking services primarily in southern Florida through **nine branches**[27](index=27&type=chunk) - The Virgin Islands Operations segment conducts all banking activities in the USVI and BVI regions through **eight branches**[29](index=29&type=chunk) [Supervision and Regulation](index=9&type=section&id=Supervision%20and%20Regulation) The Corporation and FirstBank are subject to extensive federal and Puerto Rican regulatory oversight, covering capital requirements, dividend restrictions, consumer protection, and anti-money laundering laws - Capital Ratios as of December 31, 2022 | Ratio | First BanCorp. | FirstBank | Well-Capitalized Minimum (Bank) | | :--- | :--- | :--- | :--- | | Total capital to risk-weighted assets | 19.21% | 18.90% | 10.00% | | CET1 Capital to risk-weighted assets | 16.53% | 16.84% | 6.50% | | Tier 1 capital to risk-weighted assets | 16.53% | 17.65% | 8.00% | | Leverage ratio | 10.70% | 11.43% | 5.00% | - The Corporation and its banking subsidiary, FirstBank, elected to phase in the full effect of the Current Expected Credit Losses (CECL) accounting standard on regulatory capital over a five-year transition period starting January 1, 2022[65](index=65&type=chunk) - The principal source of funds for the Corporation is dividends from its subsidiary, FirstBank. The ability of FirstBank to pay dividends is regulated by the Puerto Rico Banking Law and the FDIA, with restrictions based on capital levels and earnings[70](index=70&type=chunk)[71](index=71&type=chunk) - The FDIC adopted a final rule to increase initial base deposit insurance assessment rates by **2 basis points**, beginning in the first quarter of 2023. The Corporation estimates this will increase its deposit insurance expense by approximately **56%** for 2023 compared to 2022[97](index=97&type=chunk) [Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) The Corporation faces significant risks from rising interest rates, economic conditions in Puerto Rico, LIBOR transition, funding reliance, credit losses, cybersecurity threats, and evolving regulatory requirements - Rising interest rates and inflation may reduce demand for new loans, increase competition, and reduce net interest income. The Federal Reserve raised the federal funds rate **seven times** in 2022[138](index=138&type=chunk) - The Corporation has significant exposure to the transition away from LIBOR, with **$1.4 billion** in variable-rate loans, **$124.4 million** in held-to-maturity securities, and **$183.8 million** of junior subordinated debentures tied to the rate as of December 31, 2022[144](index=144&type=chunk)[147](index=147&type=chunk) - A significant portion of the business is concentrated in Puerto Rico, which has experienced a prolonged economic and fiscal crisis. As of December 31, 2022, the Corporation had **$338.9 million** of direct exposure to the Puerto Rico government and its entities[157](index=157&type=chunk)[161](index=161&type=chunk) - Non-performing assets, while decreasing, remain a risk. As of December 31, 2022, non-performing assets were **$129.2 million**, a decrease of **18%** from **$158.1 million** at year-end 2021[190](index=190&type=chunk) [Properties](index=36&type=section&id=Item%202.%20Properties) As of December 31, 2022, First BanCorp. owns three main buildings and 22 other properties, while leasing 89 premises across its operating regions - The Corporation owns its headquarters building in San Juan, a Service Center in Hato Rey housing over **1,000 employees**, and a Consumer Lending Center in Hato Rey[245](index=245&type=chunk)[248](index=248&type=chunk) - In total, the Corporation owns **16 retail branches** and **6 office centers**, and leases **89 branch premises** and other facilities across its operating regions[245](index=245&type=chunk) [Legal Proceedings](index=36&type=section&id=Item%203.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 29, "Regulatory Matters, Commitments and Contingencies," in the audited consolidated financial statements included in Item 8 of this report - Details on legal proceedings are available in Note 29 of the financial statements[246](index=246&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=37&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) First BanCorp.'s common stock trades on the NYSE, with the company consistently increasing dividends and executing significant stock repurchase programs, including **$275 million** in buybacks during 2022 - The quarterly cash dividend was increased from **$0.10 to $0.12 per share** in Q2 2022, and a further increase to **$0.14 per share** was declared in February 2023[252](index=252&type=chunk) - The Board of Directors has authorized two repurchase programs totaling up to **$650 million**. In 2022, the Corporation repurchased **19.4 million shares** for **$275 million**[259](index=259&type=chunk)[279](index=279&type=chunk) - Stock Repurchases in Q4 2022 | Period | Total Shares Purchased | Average Price Paid | Approx. Dollar Value Remaining Under Program (in thousands) | | :--- | :--- | :--- | :--- | | Oct 2022 | 1,649,963 | $15.18 | $150,000 | | Nov 2022 | - | - | $150,000 | | Dec 2022 | 1,902,468 | $13.14 | $125,000 | | **Total Q4** | **3,552,431** | **$14.09** | **$125,000** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=41&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2022, First BanCorp. reported **$305.1 million** net income, driven by higher net interest income, while total assets decreased to **$18.6 billion** and loans grew, reflecting a shift in balance sheet composition - Key Performance Indicators | Indicator | 2022 | 2021 | | :--- | :--- | :--- | | Net Income (in millions) | $305.1 | $281.0 | | Diluted EPS | $1.59 | $1.31 | | Return on Average Assets | 1.57% | 1.38% | | Return on Average Total Equity | 18.66% | 12.56% | | Efficiency Ratio | 48.25% | 57.45% | - Net interest income increased to **$795.3 million** in 2022 from **$729.9 million** in 2021, driven by a **39 basis point increase** in net interest margin to **4.12%** due to the higher interest rate environment[291](index=291&type=chunk)[335](index=335&type=chunk) - The provision for credit losses was an expense of **$27.7 million** in 2022, compared to a net benefit of **$65.7 million** in 2021, reflecting loan portfolio growth and macroeconomic uncertainty[291](index=291&type=chunk) - Total assets decreased by **$2.2 billion** to **$18.6 billion** as of year-end 2022, mainly due to a **$2.1 billion** decline in cash and cash equivalents. Total loans grew by **$469.3 million**[291](index=291&type=chunk)[374](index=374&type=chunk) - Stockholders' equity decreased by **$776.2 million** to **$1.3 billion**, primarily driven by a **$718.6 million** decrease in the fair value of available-for-sale debt securities (AOCI loss) and capital returns to shareholders[292](index=292&type=chunk)[482](index=482&type=chunk) [Critical Accounting Estimates](index=48&type=section&id=Critical%20Accounting%20Estimates) Management's critical accounting estimates include the Allowance for Credit Losses, financial instrument valuation, and income taxes, all requiring significant judgment and forward-looking assumptions - The determination of the Allowance for Credit Losses (ACL) is a critical estimate, involving quantitative models, forward-looking macroeconomic scenarios (e.g., unemployment rates, real estate prices), and qualitative adjustments[299](index=299&type=chunk)[300](index=300&type=chunk)[302](index=302&type=chunk) - Valuation of financial instruments, especially Level 3 assets like private label MBS, requires significant judgment using discounted cash flow models with unobservable inputs such as prepayment and default rates[305](index=305&type=chunk)[309](index=309&type=chunk) - Accounting for income taxes is complex, requiring estimation of the realizability of a net deferred tax asset of **$155.6 million** (net of a **$185.5 million** valuation allowance) as of December 31, 2022, which depends on generating sufficient future taxable income[316](index=316&type=chunk)[317](index=317&type=chunk) [Financial Condition and Operating Data Analysis](index=66&type=section&id=Financial%20Condition%20and%20Operating%20Data%20Analysis) As of December 31, 2022, total assets decreased to **$18.6 billion** due to lower cash, while the loan portfolio grew to **$11.6 billion**, and investment securities declined due to unrealized losses - Loan Portfolio Composition as of December 31, 2022 | Loan Type | Amount (USD Billions) | % of Total | | :--- | :--- | :--- | | Commercial & Construction | $5.4 | 46% | | Residential Real Estate | $2.8 | 25% | | Consumer & Finance Leases | $3.3 | 29% | - Total loans increased by **$469.3 million** to **$11.6 billion** in 2022, driven by a **$439.5 million** increase in consumer loans and a **$184.3 million** increase in commercial and construction loans, while residential mortgage loans decreased by **$154.5 million**[376](index=376&type=chunk) - The available-for-sale debt securities portfolio decreased by **$854.2 million** to **$5.6 billion**, primarily due to a **$718.6 million** decrease in fair value from changes in market interest rates[398](index=398&type=chunk) - The held-to-maturity debt securities portfolio increased to **$437.5 million** from **$178.1 million** in 2021, mainly due to purchases of GSE MBS[400](index=400&type=chunk) [Risk Management](index=74&type=section&id=Risk%20Management) The Corporation manages liquidity, interest rate, credit, and operational risks, maintaining a **$3.5 billion** core liquidity reserve and reducing non-performing assets, while managing **$338.9 million** exposure to Puerto Rico government entities - The core liquidity reserve was **$3.5 billion**, or **19.0%** of total assets, as of December 31, 2022, a decrease from **$5.6 billion**, or **27.0%** of total assets, at year-end 2021[439](index=439&type=chunk) - The Corporation's tangible common equity ratio decreased to **6.81%** as of December 31, 2022, from **9.81%** a year prior, largely due to the impact of unrealized losses on available-for-sale securities[487](index=487&type=chunk) - Non-performing assets decreased by **$28.9 million** to **$129.2 million** as of December 31, 2022. The ratio of ACL for loans to nonaccrual loans improved to **289.61%** from **242.99%** in 2021[292](index=292&type=chunk)[513](index=513&type=chunk)[532](index=532&type=chunk) - Direct exposure to the Puerto Rico government, its municipalities, and public corporations was **$338.9 million** as of December 31, 2022, down from **$360.1 million** at year-end 2021[591](index=591&type=chunk) [Financial Statements and Supplementary Data](index=112&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the Corporation's audited consolidated financial statements for 2022 and prior years, including the independent auditor's report and detailed notes on accounting policies and financial health - Consolidated Statement of Financial Condition Highlights (in millions) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Assets | $18,634 | $20,785 | | Total Loans, net | $11,305 | $10,827 | | Total Deposits | $16,143 | $17,785 | | Total Liabilities | $17,309 | $18,684 | | Total Stockholders' Equity | $1,326 | $2,102 | - Consolidated Statement of Income Highlights (in millions) | Account | 2022 | 2021 | | :--- | :--- | :--- | | Net Interest Income | $795.3 | $729.9 | | Provision for Credit Losses | $27.7 | ($65.7) | | Non-interest Income | $123.1 | $121.2 | | Non-interest Expenses | $443.1 | $489.0 | | **Net Income** | **$305.1** | **$281.0** | - The independent auditor, Crowe LLP, issued an unqualified opinion on the financial statements and on the effectiveness of internal control over financial reporting as of December 31, 2022[609](index=609&type=chunk) [Controls and Procedures](index=221&type=section&id=Item%209A.%20Controls%20and%20Procedures) As of December 31, 2022, management and the independent auditor concluded that the Corporation's disclosure controls and internal control over financial reporting were effective - Management, including the CEO and CFO, evaluated and concluded that the Corporation's disclosure controls and procedures were effective as of December 31, 2022[1146](index=1146&type=chunk) - Management's report on internal control over financial reporting concluded that controls were effective as of December 31, 2022, a conclusion supported by the independent auditor's report[1147](index=1147&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=222&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The required information regarding directors, executive officers, corporate governance, delinquent Section 16(a) reports, and the Audit Committee Report is incorporated by reference from the company's definitive Proxy Statement for its 2023 Annual Meeting of Stockholders - Information for this item is incorporated by reference from the 2023 Proxy Statement[1153](index=1153&type=chunk) [Executive Compensation](index=222&type=section&id=Item%2011.%20Executive%20Compensation) The required information regarding executive compensation, including the Compensation Discussion and Analysis and related tables, is incorporated by reference from the company's definitive Proxy Statement for its 2023 Annual Meeting of Stockholders - Information for this item is incorporated by reference from the 2023 Proxy Statement[1154](index=1154&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=222&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section details securities authorized for issuance under equity compensation plans, with **791,923** outstanding and **3,830,165** available for future issuance as of December 31, 2022 - Equity Compensation Plan Information as of December 31, 2022 | Plan Category | Securities to be Issued Upon Exercise | Securities Remaining Available for Future Issuance | | :--- | :--- | :--- | | Equity compensation plans, approved by stockholders | 791,923 | 3,830,165 | [Certain Relationships and Related Transactions, and Director Independence](index=222&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The required information regarding certain relationships, related person transactions, and director independence is incorporated by reference from the company's definitive Proxy Statement for its 2023 Annual Meeting of Stockholders - Information for this item is incorporated by reference from the 2023 Proxy Statement[1158](index=1158&type=chunk) [Principal Accountant Fees and Services](index=223&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) The required information regarding principal accountant fees and services is incorporated by reference from the sections titled "Audit Fees" and "Audit Committee Report" in the company's definitive Proxy Statement for its 2023 Annual Meeting of Stockholders - Information for this item is incorporated by reference from the 2023 Proxy Statement[1160](index=1160&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=223&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists documents filed with the Annual Report on Form 10-K, including consolidated financial statements and the independent auditor's report, with financial schedules omitted as information is provided elsewhere - The consolidated financial statements of First BanCorp. are included in Item 8 of this report[1163](index=1163&type=chunk) - All financial schedules have been omitted because the required information is provided within the financial statements or notes[1166](index=1166&type=chunk)

First BanCorp. (NYSE:FBP) Q4 2022 Earnings Conference Call January 27, 2023 10:00 AM ET Company Participants Ramon Rodriguez - Corporate Strategy and IR Officer Aurelio Aleman - President & CEO Orlando Berges - EVP & CFO Conference Call Participants Timur Braziler - Wells Fargo Kelly Motta - KBW Alex Twerdahl - Piper Sandler Brett Rabatin - Hovde Group Operator Good morning. Thank you for attending today’s First BanCorp 4Q 2022 financial results conference call. My name is Alexis, and I'll be your moderato ...