Financial Analysis

NOTE 9 BORROWINGS Advances from the Federal Home Loan Bank (FHLB) The following is a summary of the advances from the FHLB as of the indicated dates: December 31, 2025 December 31, 2024 (In thousands) Long-term Fixed -rate advances from the FHLB (1) $ 290,000 $ 500,000 (1) Weighted-average interest rate of 4.32 % and 4.45 % as of December 31, 2025 and 2024, respectively, with contractual maturity dates ranging from March 2026 to November 2027. Advances from the FHLB mature as follows as of the indicated date: December 31, 2025 (In thousands) Three months or less $ 90,000 Over one year to two years 200,000 Total (1) $ 290,000 (1) Average remaining term to maturity of 1.36 years. The maximum aggregate balance of advances from the FHLB outstanding at any month-end during the years ended December 31, 2025 and 2024 was $ 650.0 million and $ 500.0 million, respectively. The total average balance of FHLB advances during 2025 was $ 347.4 million (2024 - $ 500.1 million). The Corporation obtains advances and applies for the issuance of letters of credit from the FHLB under an Advances, Collateral Pledge, and Security Agreement (the Collateral Agreement) that requires the pledge of qualifying mortgage collateral or U.S. Treasury or U.S. agencies debt securities collateral, as applicable. Collateral values are subject to FHLB-determined haircuts, which represent a percentage reduction applied to the collaterals value. As of December 31, 2025 and 2024, the estimated value of mortgage loa …

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Year Ended December 31, 2025 Mortgage Banking Consumer (Retail) Banking Commercial and Corporate Treasury and Investments United States Operations Virgin Islands Operations Total (In thousands) Net interest income (loss) (1) $ 70,868 $ 583,749 $ 173,775 $ (112,561) $ 87,335 $ 65,774 $ 868,940 Service charges and fees on deposit accounts - 29,520 5,903 - 596 3,049 39,068 Insurance commission income - 12,493 - - 174 559 13,226 Card and processing income - 41,021 1,090 - 98 5,181 47,390 Other service charges and fees 64 7,294 290 - 1,510 547 9,705 Not in scope of ASC Topic 606 (1) 14,894 5,130 867 249 1,198 151 22,489 Total non-interest income 14,958 95,458 8,150 249 3,576 9,487 131,878 Total Revenue (Loss) $ 85,826 $ 679,207 $ 181,925 $ (112,312) $ 90,911 $ 75,261 $ 1,000,818 Year Ended December 31, 2024 Mortgage Banking Consumer (Retail) Banking Commercial and Corporate Treasury and Investments United States Operations Virgin Islands Operations Total (In thousands) Net interest income (loss) (1) $ 72,455 $ 550,820 $ 157,672 $ (112,151) $ 77,988 $ 60,695 $ 807,479 Service charges and fees on deposit accounts - 30,608 4,538 - 613 3,060 38,819 Insurance commission income - 12,781 - - 178 611 13,570 Card and processing income - 40,223 899 - 115 5,521 46,758 Other service charges and fees 189 7,238 751 - 2,649 611 11,438 Not in scope of ASC Topic 606 (1) 13,318 5,389 808 455 34 133 20,137 Total non-interest income 13,507 96,239 6,996 455 3,589 9,936 130,722 Total Revenue (Loss) $ 8 …

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NOTE 11 STOCK-BASED . COMPENSATION The First BanCorp. Omnibus Plan, which is effective until May 24, 2026, provides for equity-based and non-equity-based compensation incentives (the awards). The Omnibus Plan authorizes the issuance of up to 14,169,807 shares of common stock, subject to adjustments for stock splits, reorganizations and other similar events. As of December 31, 2025, there were 1,973,213 authorized shares of common stock available for issuance under the Omnibus Plan. The Corporations Board of Directors, based on the recommendation of the Compensation and Benefits Committee of the Board, has the power and authority to determine those eligible to receive awards and to establish the terms and conditions of any awards, subject to various limits and vesting restrictions that apply to individual and aggregate awards. Restricted Stock Under the Omnibus Plan, the Corporation may grant restricted stock to plan participants, subject to forfeiture upon the occurrence of certain events until the dates specified in the participants award agreement. While the restricted stock is subject to forfeiture and does not contain non-forfeitable dividend rights, participants may exercise full voting rights with respect to the shares of restricted stock granted to them. The fair value of the shares of restricted stock granted was based on the market price of the Corporations common stock on the date of the respective grant. The shares of restricted stocks granted to employees are subj …

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NOTE 19 FAIR VALUE Fair Value Measurement ASC Topic 820, Fair Value Measurement, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This guidance also establishes a three-level hierarchy for measuring fair value based on the observability of inputs: (i) Level 1 inputs are quoted prices in active markets for identical assets and liabilities; (ii) Level 2 inputs are observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices); and (iii) Level 3 inputs are significant unobservable inputs, requiring significant judgment due to limited or no market activity. There were no transfers of assets and liabilities measured at fair value between Level 1 and Level 2 measurements during the years ended December 31, 2025 and 2024. Financial Instruments Recorded at Fair Value on a Recurring Basis Available-for-sale debt securities and marketable equity securities held at fair value The fair value of investment securities was based on unadjusted quoted market prices (as is the case with U.S. Treasury securities and equity securities with readily determinable fair values), when available (Level 1), or market prices for compar …

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NOTE 17 INCOME TAXES The Corporation is subject to Puerto Rico income tax on its income from all sources. Under the PR Tax Code, the Corporation and its subsidiaries are treated as separate taxable entities and are not entitled to file consolidated tax returns. However, certain subsidiaries that are organized as limited liability companies with a partnership election are treated as pass-through entities for Puerto Rico tax purposes. Furthermore, the Corporation conducts business through certain entities that have special tax treatments, including doing business through an IBE unit of the Bank and through FirstBank Overseas Corporation, each of which are generally exempt from Puerto Rico income taxation under the International Banking Entity Act of Puerto Rico (IBE Act), and through a wholly owned subsidiary that engages in certain Puerto Rico qualified investing and lending activities that have certain tax advantages under Act 60 of 2019. Under the PR Tax Code, a subsidiary may realize a tax benefit from a net operating loss (NOL) only if it can generate sufficient taxable income within the applicable NOL carryforward period. Pursuant to the PR Tax Code, the carryforward period for NOLs incurred during taxable years commencing after December 31, 2012 is 10 years. The PR Tax Code provides a dividend received deduction of 100 % on dividends received from controlled subsidiaries subject to taxation in Puerto Rico and 85 % on dividends received from other taxable domestic corpora …

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NOTE 23 REGULATORY MATTERS, COMMITMENTS AND CONTINGENCIES Regulatory Matters The Corporation and FirstBank are each subject to various regulatory capital requirements imposed by the U.S. federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material adverse effect on the Corporations financial statements and activities. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Corporation must meet specific capital guidelines that involve quantitative measures of the Corporations and FirstBanks assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Corporations capital amounts and classification are also subject to qualitative judgments and adjustment by the regulators with respect to minimum capital requirements, components, risk weightings, and other factors. As of December 31, 2025 and 2024, the Corporation and FirstBank exceeded the minimum regulatory capital ratios for capital adequacy purposes and FirstBank exceeded the minimum regulatory capital ratios to be considered a well-capitalized institution under the regulatory framework for prompt corrective action. As of December 31, 2025, management does not believe that any condition has changed or event has occurred that would have changed the institutions status. The Corporatio …

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NOTE 18 OPERATING LEASES The Corporation accounts for its leases in accordance with ASC 842 Leases (ASC Topic 842). The Corporations operating leases are primarily related to the Corporations branches. Our leases mainly have original terms ranging from two years to 26 years , some of which include options to extend the leases for up to 20 years . Liabilities to make future lease payments are recorded in accounts payable and other liabilities, while ROU assets are recorded in other assets in the Corporations consolidated statements of financial condition. As of December 31, 2025 and 2024, the Corporation did not classify any of its leases as a finance lease. Operating lease cost for the year ended December 31, 2025 amounted to $ 17.7 million (2024 - $ 18.1 million; 2023 - $ 17.3 million), and is recorded in occupancy and equipment in the consolidated statements of income. Supplemental balance sheet information related to leases was as follows as of the indicated dates: As of December 31, 2025 2024 (Dollars in thousands) ROU asset $ 72,192 $ 63,159 Operating lease liability $ 74,369 $ 65,801 Operating lease weighted-average remaining lease term (in years) 7.7 7.4 Operating lease weighted-average discount rate 3.68% 3.11% Generally, the Corporation cannot practically determine the interest rate implicit in the lease. Therefore, the Corporation uses its incremental borrowing rate as the discount rate for the lease. See Note 1 Nature of Business and Summary of Significant Accounti …

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Adoption of New Accounting Requirements Standard Description Effective Date Effect on the financial statements ASU 2023-09 -Income Taxes (Topic 740): Improvements to Income Tax Disclosures, Issued December 2023 In December 2023, the FASB issued ASU 2023-09 to improve the annual income tax disclosures to, among other things, require disclosure of the following: eight prescribed categories in the tabular rate reconciliation (using both percentages and dollar amounts) with certain reconciling items at or above 5% further broken out by nature and/or jurisdiction; income taxes paid (net of refunds received) disaggregated by federal, state, and foreign taxes; the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5% of total income taxes paid (net of refunds received); income or loss from continuing operations before income tax expense or benefit disaggregated between domestic and foreign; and income tax expense or benefit from continuing operations disaggregated by federal, state, and foreign. Management adopted the guidance during the fourth quarter of 2025. The ASU has been applied retrospectively. Accordingly, comparative disclosures were provided for all periods presented. As part of the adoption of this ASU, the Corporation expanded its income tax rate reconciliation to separately present nontaxable or nondeductible items, as well as changes in unrecog …

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NOTE 14 EMPLOYEE BENEFIT PLANS The Corporation maintains two frozen qualified noncontributory defined benefit pension plans (the Pension Plans), and a related complementary post-retirement benefit plan (the Postretirement Benefit Plan) covering medical benefits and life insurance after retirement that it obtained in the BSPR acquisition on September 1, 2020. One defined benefit pension plan covers substantially all of BSPRs former employees who were active before January 1, 2007, while the other defined benefit pension plan covers personnel of an institution previously acquired by BSPR. Benefits are based on salary and years of service. The accrual of benefits under the Pension Plans is frozen to all participants. The following table presents the changes in projected benefit obligation and changes in plan assets for the years ended December 31, 2025 and 2024: December 31, 2025 December 31, 2024 (In thousands) Changes in projected benefit obligation: Projected benefit obligation at the beginning of year, defined benefit pension plans $ 69,559 $ 73,547 Interest cost 3,710 3,603 Actuarial loss (gain) 1,896 (1,813) Benefits paid (5,701) (5,778) Projected benefit obligation at the end of year, pension plans $ 69,464 $ 69,559 Projected benefit obligation, other postretirement benefit plan 151 151 Projected benefit obligation at the end of year $ 69,615 $ 69,710 Changes in plan assets: Fair value of plan assets at the beginning of year $ 72,808 $ 77,365 Actual return on plan assets …

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NOTE 7 RELATED-PARTY TRANSACTIONS The Corporation has granted loans to its directors, executive officers, and certain related individuals or entities in the ordinary course of business. The movement and balance of these loans were as follows: Amount (1) (In thousands) Balance at December 31, 2023 $ 827 Additions 80 Payments (120) Balance at December 31, 2024 787 Additions 63 Payments (157) Other changes (495) Balance at December 31, 2025 $ 198 (1) Includes loans granted to related parties which were then sold in the secondary market. These loans were made subject to the provisions of the Federal Reserve Boards Regulation O Loans to Executive Officers, Directors and Principal Shareholders of Member Banks, which governs the permissible lending relationships between a financial institution and its executive officers, directors, principal shareholders, their families, and related parties. Amounts arising from changes in the status of individuals considered related parties are reported as other changes in the table above, which for 2025 reflected the retirement of three executive officers. There were no changes in the status of related parties during 2024. From time to time, the Corporation, in the ordinary course of its business, obtains services from related parties or makes contributions to non-profit organizations that have some association with the Corporation. …

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NOTE 20 REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue Recognition In accordance with ASC Topic 606, Revenue from Contracts with Customers (ASC Topic 606), revenues are recognized when control of promised goods or services is transferred to customers and in an amount that reflects the consideration to which the Corporation expects to be entitled in exchange for those goods or services. At contract inception, once the contract is determined to be within the scope of ASC Topic 606, the Corporation assesses the goods or services that are promised within each contract, identifies the respective performance obligations, and assesses whether each promised good or service is distinct. The Corporation then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Disaggregation of Revenue The following tables summarize the Corporations revenue, which includes net interest income on financial instruments that is outside of ASC Topic 606 and non-interest income, disaggregated by type of service and business segment for the years ended December 31, 2025, 2024 and 2023: Year Ended December 31, 2025 Mortgage Banking Consumer (Retail) Banking Commercial and Corporate Treasury and Investments United States Operations Virgin Islands Operations Total (In thousands) Net interest income (loss) (1) $ 70,868 $ 583,749 $ 173,775 $ (112,561) $ 87,335 $ 65,774 $ 868,940 Service charges and …

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NOTE 21 SEGMENT INFORMATION The Corporations operating segments are based primarily on the Corporations lines of business for its operations in Puerto Rico, the Corporations principal market, and by geographic areas for its operations outside of Puerto Rico. As of December 31, 2025, the Corporation had six reportable segments: Mortgage Banking; Consumer (Retail) Banking; Commercial and Corporate Banking; Treasury and Investments; United States Operations; and Virgin Islands Operations. The Chief Executive Officer (CEO), who is the designated chief operating decision maker (CODM), as ultimate decision maker, evaluates performance and allocates resources based on financial information provided by management. In determining the reportable segments, the Corporation considers factors such as the organizational structure, nature of the products, distribution channels, customer relationship management, and economic characteristics of the business lines. The Corporation evaluates the performance of the segments based on segment income or loss, which consists of net interest income, the provision for credit losses, non-interest income and non-interest expenses. Segment income or loss is measured on a pre-tax basis, consistent with the Corporations consolidated financial statements under GAAP. The total segment income or loss equals consolidated pre-tax income or loss, and no adjustments or reconciliations are necessary. The segments are also evaluated based on the average volume of th …

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NOTE 12 STOCKHOLDERS EQUITY Repurchase Programs On July 22, 2024, the Corporation announced that its Board of Directors had approved a repurchase program authorizing up to $ 250 million in repurchases, which could include common stock and/or junior subordinated debentures. Under this program, the Corporation repurchased 7,085,582 shares of common stock through open market transactions at an average price of $ 19.52 , for a total cost of approximately $ 138.3 million during 2025. In addition, the Corporation redeemed $ 111.7 million of junior subordinated debentures, of which $ 61.7 million were redeemed during 2025. These transactions completed the $ 250 million repurchase program. Furthermore, on October 22, 2025, the Corporation announced that its Board of Directors approved a new stock repurchase program authorizing up to $ 200 million of its outstanding common stock. Repurchases under the program may be executed through open market purchases, accelerated share repurchases and privately negotiated transactions or plans, including plans complying with Rule 10b5-1 under the Exchange Act, and will be conducted in accordance with applicable legal and regulatory requirements. The Corporations repurchase program is subject to various factors, including the Corporations capital position, liquidity, financial performance and alternative uses of capital, stock trading price, and general market conditions. The repurchase program does not obligate it to acquire any specific number of …

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