8-K
First Bancorp /Pr/ (FBP)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): April 24, 2025
First BanCorp.
(Exact Name of Registrant as Specified in its Charter)
| Puerto Rico | 001-14793 | 66-0561882 |
|---|---|---|
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| 1519 Ponce de Leon Ave.<br><br> <br>P.O. Box 9146<br><br> <br>San Juan, Puerto Rico | 00908-0146 | |
| --- | --- | |
| (Address of Principal Executive Offices) | (Zip Code) |
(787) 729-8200
(Registrant’s Telephone Number, including Area Code)
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br><br> <br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock ($0.10 par value) | FBP | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On April 24, 2025, First BanCorp. (the “Corporation”), the bank holding company for FirstBank Puerto Rico (“FirstBank” or the “Bank”), issued a press release announcing its unaudited results of operations for the quarter ended March 31, 2025. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
A copy of the presentation that the Corporation will use at its conference call to discuss its financial results for the quarter ended March 31, 2025 is attached hereto as Exhibit 99.2 and is incorporated herein by reference. As announced in a press release dated April 3, 2025, the call may be accessed via a live Internet webcast at 12:00 p.m. Eastern time on Thursday, April 24, 2025, through the Corporation’s investor relations website: www.fbpinvestor.com or through the dial-in telephone number 833-470-1428 or 404-975-4839. The participant access code is 811566.
| Item 9.01 | Financial Statements and Exhibits |
|---|
(d) Exhibits
| Exhibit | Description of Exhibit |
|---|---|
| 99.1 | Press Release dated April 24, 2025 - First BanCorp Announces Earnings for the quarter ended March 31, 2025 |
| --- | --- |
| 99.2 | First BanCorp Conference Call Presentation – Financial Results for the quarter ended March 31, 2025 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
| Exhibits 99.1 and 99.2 referenced therein, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall Exhibits 99.1 and<br> 99.2 be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended. |
2
Exhibit Index
| Exhibit | Description of Exhibit |
|---|---|
| 99.1 | Press Release dated April 24, 2025 - First BanCorp Announces Earnings for the quarter ended March 31, 2025 |
| --- | --- |
| 99.2 | First BanCorp Conference Call Presentation – Financial Results for the quarter ended March 31, 2025 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
| Exhibits 99.1 and 99.2 referenced therein, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall Exhibits 99.1 and<br> 99.2 be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: April 24, 2025 | First BanCorp. | |
|---|---|---|
| By: | /s/ Orlando Berges | |
| Name: | Orlando Berges | |
| Title: | EVP and Chief Financial Officer |
3
Exhibit 99.1
FIRST BANCORP. ANNOUNCES EARNINGS FOR THE QUARTER ENDED MARCH 31, 2025
SAN JUAN, Puerto Rico – April 24, 2025 – First BanCorp. (the “Corporation” or “First BanCorp.”) (NYSE: FBP), the bank holding company for FirstBank Puerto Rico (“FirstBank” or “the Bank”), today reported a net income of $77.1 million, or $0.47 per diluted share, for the first quarter of 2025, compared to $75.7 million, or $0.46 per diluted share, for the fourth quarter of 2024, and $73.5 million, or $0.44 per diluted share, for the first quarter of 2024.
Aurelio Alemán, President and Chief Executive Officer of First BanCorp, commented: “We began the year with another quarter of strong performance for the franchise highlighted by encouraging margin expansion, positive operating leverage, and solid profitability metrics. We produced $77 million in net income, grew pre-tax pre-provision income by 7% to $125 million, and posted a return on average assets of 1.64%. We enter 2025 from a position of strength, with strong capital levels, and ample experience navigating economic uncertainty while serving our clients and communities across all environments.
Core customer deposits were up by $29 million during the quarter, inclusive of a $70 million increase in non-interest-bearing deposits. Consistent with our strategy, stable deposit trends enabled us to redeploy investment portfolio cash flows towards higher-yielding assets while improving our funding profile by paying down higher-cost wholesale borrowings. Total loans were slightly down on a linked-quarter basis mostly due to the expected repayments of commercial loans during the quarter. Credit performance remained relatively stable, and we continue to see consumer credit normalization trends, with consumer loans in early delinquency down when compared to the prior quarter.
Finally, as good stewards of capital, we first and foremost seek to use our capital to support business growth opportunities and franchise investments for future growth. This quarter, our strong capital generation profile allowed us to execute on capital action priorities by redeeming approximately $50.0 million of junior subordinated debentures, resuming our common share repurchase program, and sustaining a competitive dividend payout ratio. Despite increased concerns about global trade, tariffs, and other potential policy changes that will affect markets everywhere, we remain focused on our disciplined approach of delivering consistent results and creating value for all our stakeholders. Our teams have been tested by multiple challenges over the past decade and have a proven track record of successfully managing unforeseen conditions.”
| Q1 | Q4 | Q1 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2024 | |||||||
| Financial Highlights (1) | |||||||||
| Net interest income | $ | 212,397 | $ | 209,267 | $ | 196,520 | |||
| Provision for credit losses | 24,810 | 20,904 | 12,167 | ||||||
| Non-interest income | 35,734 | 32,199 | 33,983 | ||||||
| Non-interest expenses | 123,022 | 124,533 | 120,923 | ||||||
| Income before income taxes | 100,299 | 96,029 | 97,413 | ||||||
| Income tax expense | 23,240 | 20,328 | 23,955 | ||||||
| Net income | $ | 77,059 | $ | 75,701 | $ | 73,458 | |||
| Q1 | Q4 | Q1 | |||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2025 | 2024 | 2024 | |||||||
| Selected Financial Data (1) | |||||||||
| Net interest margin | 4.52 | % | 4.33 | % | 4.16 | % | |||
| Efficiency ratio | 49.58 | % | 51.57 | % | 52.46 | % | |||
| Earnings per share - diluted | $ | 0.47 | $ | 0.46 | $ | 0.44 | |||
| Book value per share | $ | 10.91 | $ | 10.19 | $ | 8.88 | |||
| Tangible book value per share^^^(2)^ | $ | 10.64 | $ | 9.91 | $ | 8.58 | |||
| Return on average equity | 17.90 | % | 17.77 | % | 19.56 | % | |||
| Return on average assets | 1.64 | % | 1.56 | % | 1.56 | % | |||
| Results for the First Quarter of 2025 compared to the Fourth Quarter of 2024 | |||||||||
| --- | --- | ||||||||
| Profitability | Net income – $77.1<br> million, or $0.47 per diluted share compared to $75.7 million, or $0.46 per diluted share.<br><br> <br>Income before income taxes – $100.3 million compared to $96.0 million.<br><br> <br>Adjusted pre-tax, pre-provision income (Non-GAAP)^(2)^ – $125.1 million compared to $116.9 million.<br><br> <br>Net interest income –<br> $212.4 million compared to $209.3 million. The increase is net of a reduction of approximately $2.7 million associated with the effect of two less days in the first quarter of 2025. Net interest margin increased by 19 basis points to<br> 4.52%, driven by a change in asset mix from lower-yielding investment securities to higher-yielding interest-earning assets and a decrease in the cost of interest-bearing deposits.<br><br> <br>Provision for credit losses – $24.8 million compared to $20.9 million. The increase was mainly in the provision for the commercial and construction loan portfolios due to a deterioration in the economic outlook of the forecasted commercial real estate (“CRE”)<br> price index, partially offset by a decrease in the provision for the consumer loan and finance lease portfolios, which included $2.4 million in recoveries associated with a bulk sale of fully charged-off consumer loans and finance leases.<br> The provision for the first quarter of 2025 also includes the impact of higher qualitative adjustments due to the uncertainty in the economic environment.<br><br> <br>Non-interest income –<br> $35.7 million compared to $32.2 million. The increase was driven by $3.3 million in seasonal contingent insurance commissions recorded in the first quarter of 2025.<br><br> <br>Non-interest expenses –<br> $123.0 million compared to $124.5 million. The efficiency ratio was 49.58%, compared to 51.57%.<br><br> <br>Income taxes – $23.2<br> million compared to $20.3 million. The fourth quarter of 2024 includes a reduction in income tax expense due to a higher actual than forecasted proportion of exempt income to taxable income for the year 2024. | ||||||||
| Balance<br><br> <br>Sheet | Total loans – decreased by $71.7 million<br> to $12.7 billion, mainly due to the payoff of a $73.8 million commercial mortgage loan in the Puerto Rico region. Total loan originations, other than credit card utilization activity, of $1.1 billion, down $463.1 million, mainly in<br> commercial and construction loans.<br><br> <br>Core deposits (other than brokered and government deposits) – increased by $29.0 million to $12.9 billion, which consists of growth of $75.0 million in the Puerto Rico region and $38.9 million in the Virgin Islands region, partially offset by a decrease of $84.9 million in<br> the Florida region. This increase includes a $69.8 million increase in non-interest-bearing deposits.<br><br> <br>Government deposits (fully collateralized) – decreased by $82.1 million to $3.4 billion, driven by a decline of $142.2 million in the Puerto Rico region, partially offset by a $57.4 million increase in the Virgin Islands region. | ||||||||
| Asset<br><br> <br>Quality | Allowance for credit losses (“ACL”) coverage ratio – amounted to 1.95%, compared to 1.91%.<br><br> <br>Annualized net charge-offs to average loans ratio decreased to 0.68%, compared to 0.78%, mainly due to an 8 basis points decrease due to the aforementioned bulk sale of fully charged-off consumer loans and finance leases.<br><br> <br>Non-performing assets – increased by<br> $11.1 million to $129.4 million, mainly due to the inflow to nonaccrual status of a $12.6 million commercial mortgage loan in the Florida region in the hospitality industry during the first quarter of 2025. | ||||||||
| Liquidity<br><br> <br>and<br><br> <br>Capital | Liquidity – Cash and cash equivalents<br> amounted to $1.3 billion, compared to $1.2 billion. When adding $1.4 billion of free high-quality liquid securities that could be liquidated or pledged within one day and $862.2 million in available lending capacity at the Federal Home<br> Loan Bank (“FHLB”), available liquidity amounted to 18.76% of total assets, compared to 17.27%.<br><br> <br>Capital – Redeemed $50.6 million of<br> junior subordinated debentures, repurchased $21.8 million in common stock and declared $29.6 million in common stock dividends. Capital ratios exceeded required regulatory levels. The Corporation’s estimated total capital, common equity<br> tier 1 (“CET1”) capital, tier 1 capital, and leverage ratios were 17.96%, 16.62%, 16.62%, and 11.20%, respectively, as of March 31, 2025. On a non-GAAP basis, the tangible common equity ratio^(2)^ increased to 9.10% when<br> compared to 8.44%, driven by earnings less dividends and repurchases of common stock and an $84.1 million increase in the fair value of available-for-sale debt securities due to changes in market interest rates, which is recognized as<br> part of accumulated other comprehensive loss. | ||||||||
| (1) In thousands, except per share information and financial ratios.<br><br> <br>(2) Represents non-GAAP financial measures. Refer to Non-GAAP Disclosures - Non-GAAP<br> Financial Measures for the definition of and additional information about these non-GAAP financial measures. |
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 2 of 26
NET INTEREST INCOME
The following table sets forth information concerning net interest income for the last five quarters:
| Quarter Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | ||||||||||
| Net Interest Income | |||||||||||||||
| Interest income | $ | 277,065 | $ | 279,728 | $ | 274,675 | $ | 272,245 | $ | 268,505 | |||||
| Interest expense | 64,668 | 70,461 | 72,611 | 72,617 | 71,985 | ||||||||||
| Net interest income | $ | 212,397 | $ | 209,267 | $ | 202,064 | $ | 199,628 | $ | 196,520 | |||||
| Average Balances | |||||||||||||||
| Loans and leases | $ | 12,632,501 | $ | 12,584,143 | $ | 12,354,679 | $ | 12,272,816 | $ | 12,207,840 | |||||
| Total securities, other short-term investments and interest-bearing cash balances | 6,444,016 | 6,592,411 | 6,509,789 | 6,698,609 | 6,720,395 | ||||||||||
| Average interest-earning assets | $ | 19,076,517 | $ | 19,176,554 | $ | 18,864,468 | $ | 18,971,425 | $ | 18,928,235 | |||||
| Average interest-bearing liabilities | $ | 11,749,011 | $ | 11,911,904 | $ | 11,743,122 | $ | 11,868,658 | $ | 11,838,159 | |||||
| Average Yield/Rate | |||||||||||||||
| Average yield on interest-earning assets - GAAP | 5.89 | % | 5.79 | % | 5.78 | % | 5.76 | % | 5.69 | % | |||||
| Average rate on interest-bearing liabilities - GAAP | 2.23 | % | 2.35 | % | 2.45 | % | 2.45 | % | 2.44 | % | |||||
| Net interest spread - GAAP | 3.66 | % | 3.44 | % | 3.33 | % | 3.31 | % | 3.25 | % | |||||
| Net interest margin - GAAP | 4.52 | % | 4.33 | % | 4.25 | % | 4.22 | % | 4.16 | % |
Net interest income amounted to $212.4 million for the first quarter of 2025, an increase of $3.1 million, compared to $209.3 million for the fourth quarter of 2024, which is net of a reduction of approximately $2.7 million associated with the effect of two less days in the first quarter of 2025. The increase in net interest income reflects the following:
| • | A $4.2 million decrease in interest expense on interest-bearing deposits, consisting of: |
|---|---|
| - | A $2.3 million decrease in interest expense on interest-bearing checking and savings accounts, driven by the effect of lower interest rates and a $0.6 million decrease associated with the effect of<br> two less days in the first quarter of 2025. The average cost of interest-bearing checking and savings accounts in the first quarter of 2025 decreased 7 basis points to 1.45% when compared to the previous quarter. |
| --- | --- |
| - | A $1.5 million decrease in interest expense on time deposits, excluding brokered certificates of deposit (“CDs”), mainly associated with issuances and renewals at lower interest rates when compared<br> to the fourth quarter of 2024 and a $0.6 million decrease associated with the effect of two less days in the first quarter of 2025. The average cost of non-brokered time deposits in the first quarter of 2025 decreased 12 basis points to<br> 3.39% when compared to the previous quarter. |
| --- | --- |
| - | A $0.4 million decrease in interest expense on brokered CDs, mainly associated with new issuances at lower interest rates than maturing brokered CDs. |
| --- | --- |
| • | A $1.6 million decrease in interest expense on borrowings, driven by a $1.1 million decrease in interest expense on junior subordinated debentures mainly due to the full quarter effect of the $50.0<br> million redemption of trust-preferred securities (“TruPS”) in December 2024, and a $0.5 million decrease in interest expense on FHLB advances driven by a $31.6 million decrease in the average balance due to the $180.0 million in FHLB<br> advances that matured and were repaid in March 2025. |
| --- | --- |
| • | A $0.4 million increase in interest income on debt securities, mainly due to $222.1 million in purchases of higher-yielding mortgage-backed securities (“MBS”) with an average yield of 5.40% during<br> the fourth quarter of 2024 replacing maturities of lower-yielding debt securities and, to a lesser extent, lower U.S. agencies MBS premium amortization expense associated with a reduction in anticipated prepayments. |
| --- | --- |
| • | A $0.2 million increase in interest income from interest-bearing cash balances, driven by a $116.6 million increase in the average balances, which consisted primarily of deposits maintained at the<br> Federal Reserve Bank (the “FED”), which more than compensated for the reduction in the federal funds rate and the effect of two less days in the first quarter of 2025. |
| --- | --- |
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 3 of 26
Partially offset by:
| • | A $3.3 million decrease in interest income on loans driven by: |
|---|---|
| - | A $3.0 million decrease in interest income on commercial and construction loans, driven by a $2.2 million decrease associated with the effect of two less days in the first quarter of 2025 and a<br> $1.5 million net decrease due to the effect of lower interest rates on the downward repricing of variable-rate loans, which was partially offset by $1.2 million in interest income recognized during the first quarter of 2025 related to<br> prepayment penalties and acceleration of unamortized net deferred fees associated with the aforementioned payoff of a $73.8 million commercial mortgage loan. |
| --- | --- |
As of March 31, 2025, the interest rate on approximately 52% of the Corporation’s commercial and construction loans was tied to variable rates, with 33% based upon SOFR of 3 months or less, 11% based upon the Prime rate index, and 8% based on other indexes. For the quarter ended March 31, 2025, the average one-month SOFR decreased 28 basis points, the average three-month SOFR decreased 20 basis points, and the average Prime rate decreased 32 basis points, compared to the average rates for such indexes for the previous quarter.
| - | A $0.3 million decrease in interest income on consumer loans and finance leases, mainly due to a $1.7 million decrease associated with the effect of two less days in the first quarter of 2025, and<br> a $0.3 million decrease in interest income mainly due to a decrease in the average balance of personal loans and credit cards, partially offset by an increase in interest income due to higher yields and higher income from late fees, mainly<br> in the auto loans portfolio. |
|---|
Net interest margin for the first quarter of 2025 was 4.52%, a 19 basis points increase when compared to the fourth quarter of 2024, mostly reflecting a change in asset mix associated with the deployment of cash flows from lower-yielding investment securities to higher-yielding interest-earning assets, and a decrease in the cost of interest-bearing deposits due to the effect of lower interest rates. The results also include an increase of 4 basis points associated with prepayment penalties in the commercial loan portfolio and higher income from late fees in the consumer loan portfolio. These factors were partially offset by the downward repricing of variable-rate commercial loans and a lower federal funds rate on cash deposited at the FED.
NON-INTEREST INCOME
The following table sets forth information concerning non-interest income for the last five quarters:
| Quarter Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | ||||||
| (In thousands) | ||||||||||
| Service charges and fees on deposit accounts | $ | 9,640 | $ | 9,748 | $ | 9,684 | $ | 9,725 | $ | 9,662 |
| Mortgage banking activities | 3,177 | 3,183 | 3,199 | 3,419 | 2,882 | |||||
| Insurance commission income | 5,805 | 2,274 | 3,003 | 2,786 | 5,507 | |||||
| Card and processing income | 11,475 | 12,155 | 11,768 | 11,523 | 11,312 | |||||
| Other non-interest income | 5,637 | 4,839 | 4,848 | 4,585 | 4,620 | |||||
| Non-interest income | $ | 35,734 | $ | 32,199 | $ | 32,502 | $ | 32,038 | $ | 33,983 |
Non-interest income increased by $3.5 million to $35.7 million for the first quarter of 2025, compared to $32.2 million for the fourth quarter of 2024, mainly due to a $3.5 million increase in insurance commission income driven by $3.3 million in seasonal contingent commissions recorded in the first quarter of 2025 based on prior year’s production of insurance policies. Other variances included a $1.3 million increase related to higher realized gains from purchased income tax credits, partially offset by $0.6 million in debit card and merchant volume-based incentives recognized during the fourth quarter of 2024 and lower interchange income.
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 4 of 26
NON-INTEREST EXPENSES
The following table sets forth information concerning non-interest expenses for the last five quarters:
| Quarter Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | |||||||||||
| (In thousands) | |||||||||||||||
| Employees’ compensation and benefits | $ | 62,137 | $ | 59,652 | $ | 59,081 | $ | 57,456 | $ | 59,506 | |||||
| Occupancy and equipment | 22,630 | 22,771 | 22,424 | 21,851 | 21,381 | ||||||||||
| Business promotion | 3,278 | 5,328 | 4,116 | 4,359 | 3,842 | ||||||||||
| Professional service fees: | |||||||||||||||
| Collections, appraisals and other credit-related fees | 598 | 956 | 688 | 1,149 | 1,366 | ||||||||||
| Outsourcing technology services | 7,921 | 7,499 | 7,771 | 7,698 | 7,469 | ||||||||||
| Other professional fees | 2,967 | 3,355 | 4,079 | 3,584 | 3,841 | ||||||||||
| Taxes, other than income taxes | 5,878 | 5,994 | 5,665 | 5,408 | 5,129 | ||||||||||
| FDIC deposit insurance | 2,236 | 2,236 | 2,164 | 2,316 | 3,102 | ||||||||||
| Other insurance and supervisory fees | 1,551 | 1,967 | 2,092 | 2,287 | 2,293 | ||||||||||
| Net gain on OREO operations | (1,129 | ) | (1,074 | ) | (1,339 | ) | (3,609 | ) | (1,452 | ) | |||||
| Credit and debit card processing expenses | 5,110 | 7,147 | 7,095 | 7,607 | 5,751 | ||||||||||
| Communications | 2,245 | 2,251 | 2,170 | 2,261 | 2,097 | ||||||||||
| Other non-interest expenses | 7,600 | 6,451 | 6,929 | 6,315 | 6,598 | ||||||||||
| Total non-interest expenses | $ | 123,022 | $ | 124,533 | $ | 122,935 | $ | 118,682 | $ | 120,923 |
Non-interest expenses amounted to $123.0 million in the first quarter of 2025, a decrease of $1.5 million, from $124.5 million in the fourth quarter of 2024. The $1.5 million decrease reflects the following significant variances:
| • | A $2.1 million decrease in business promotion expenses, mainly as a result of a seasonal decrease in campaign efforts and lower donations. |
|---|---|
| • | A $2.0 million decrease in credit and debit card processing expenses, mainly due to $2.2 million in credit and debit card expense reimbursements received during the first quarter of 2025. |
| --- | --- |
Partially offset by:
| • | A $2.5 million increase in employees’ compensation and benefits expenses, driven by a $1.6 million seasonal increase in payroll taxes and benefits and $2.9 million in bonuses<br> which include $1.9 million in stock-based compensation expense of retirement-eligible employees, partially offset by a $1.6 million decrease in salary compensation mainly due to the effect of two less working days in the first quarter of<br> 2025. |
|---|
INCOME TAXES
The Corporation recorded an income tax expense of $23.2 million for the first quarter of 2025, compared to $20.3 million for the fourth quarter of 2024. The fourth quarter of 2024 includes a reduction in income tax expense due to a higher actual than forecasted proportion of exempt income to taxable income for the year 2024.
The Corporation’s estimated annual effective tax rate, excluding entities with pre-tax losses from which a tax benefit cannot be recognized and discrete items, was 23.7% for the first quarter of 2025, compared to an annual effective tax rate of 23.0% for the fourth quarter of 2024. As of March 31, 2025, the Corporation had a deferred tax asset of $134.3 million, net of a valuation allowance of $108.7 million against the deferred tax assets.
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 5 of 26
CREDIT QUALITY
Non-Performing Assets
The following table sets forth information concerning non-performing assets for the last five quarters:
| (Dollars in thousands) | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Nonaccrual loans held for investment: | |||||||||||||||
| Residential mortgage | $ | 30,793 | $ | 31,949 | $ | 31,729 | $ | 31,396 | $ | 32,685 | |||||
| Construction | 1,356 | 1,365 | 4,651 | 4,742 | 1,498 | ||||||||||
| Commercial mortgage | 23,155 | 10,851 | 11,496 | 11,736 | 11,976 | ||||||||||
| Commercial and industrial (“C&I”) | 20,344 | 20,514 | 18,362 | 27,661 | 25,067 | ||||||||||
| Consumer and finance leases | 22,813 | 22,788 | 23,106 | 20,638 | 21,739 | ||||||||||
| Total nonaccrual loans held for investment | $ | 98,461 | $ | 87,467 | $ | 89,344 | $ | 96,173 | $ | 92,965 | |||||
| OREO | 15,880 | 17,306 | 19,330 | 21,682 | 28,864 | ||||||||||
| Other repossessed property | 13,444 | 11,859 | 8,844 | 7,513 | 6,226 | ||||||||||
| Other assets ^(1)^ | 1,599 | 1,620 | 1,567 | 1,532 | 1,551 | ||||||||||
| Total non-performing assets ^(2)^ | $ | 129,384 | $ | 118,252 | $ | 119,085 | $ | 126,900 | $ | 129,606 | |||||
| Past due loans 90 days and still accruing ^(3)^ | $ | 37,117 | $ | 42,390 | $ | 43,610 | $ | 47,173 | $ | 57,515 | |||||
| Nonaccrual loans held for investment to total loans held for investment | 0.78 | % | 0.69 | % | 0.72 | % | 0.78 | % | 0.76 | % | |||||
| Nonaccrual loans to total loans | 0.78 | % | 0.69 | % | 0.72 | % | 0.78 | % | 0.75 | % | |||||
| Non-performing assets to total assets | 0.68 | % | 0.61 | % | 0.63 | % | 0.67 | % | 0.69 | % |
| (1) | Residential pass-through MBS issued by the Puerto Rico Housing Finance Authority (“PRHFA”) held as part of the available-for-sale debt securities portfolio. |
|---|---|
| (2) | Excludes purchased-credit deteriorated (“PCD”) loans previously accounted for under Accounting Standards Codification (“ASC”) Subtopic 310-30 for which the<br> Corporation made the accounting policy election of maintaining pools of loans as “units of account” both at the time of adoption of current expected credit losses (“CECL”) on January 1, 2020 and on an ongoing basis for credit loss<br> measurement. These loans will continue to be excluded from nonaccrual loan statistics as long as the Corporation can reasonably estimate the timing and amount of cash flows expected to be collected on the loan pools. The portion of such<br> loans contractually past due 90 days or more amounted to $5.7 million as of March 31, 2025 (December 31, 2024 - $6.2 million; September 30, 2024 - $6.5 million; June 30, 2024 - $7.4 million; March 31, 2024 - $8.6 million). |
| --- | --- |
| (3) | These include rebooked loans, which were previously pooled into Government National Mortgage Association (“GNMA”) securities, amounting to $6.4 million as of March<br> 31, 2025 (December 31, 2024- $5.7 million; September 30, 2024 - $6.6 million; June 30, 2024 - $6.8 million; March 31, 2024 - $8.8 million). Under the GNMA program, the Corporation has the option but not the obligation to repurchase loans<br> that meet GNMA’s specified delinquency criteria. For accounting purposes, the loans subject to the repurchase option are required to be reflected on the financial statements with an offsetting liability. |
| --- | --- |
Variances in credit quality metrics:
| • | Total non-performing assets increased by $11.1 million to $129.4 million as of March 31, 2025,<br> compared to $118.3 million as of December 31, 2024. Total nonaccrual loans held for investment amounted to $98.4 million as<br> of March 31, 2025, compared to $87.4 million as of December 31, 2024. |
|---|
The increase in non-performing assets was driven by:
| - | A $12.1 million increase in nonaccrual commercial and construction loans, mainly due to the inflow to nonaccrual status of a $12.6 million commercial mortgage loan in the Florida region in the<br> hospitality industry during the first quarter of 2025. |
|---|---|
| - | A $1.5 million increase in other repossessed property, consisting of repossessed automobiles. |
| --- | --- |
Partially offset by:
| - | A $1.4 million decrease in the other real estate owned (“OREO”) portfolio balance, mainly attributable to the sale of residential properties in the Puerto Rico region. |
|---|---|
| - | A $1.1 million decrease in nonaccrual residential mortgage loans. |
| --- | --- |
| • | Inflows to nonaccrual loans held for investment were $43.4 million in the first quarter of 2025, an increase of $6.3 million, when compared to the fourth quarter of 2024. Inflows to nonaccrual<br> commercial and construction loans were $13.8 million in the first quarter of 2025, an increase of $12.4 million compared to inflows of $1.4 million in the fourth quarter of 2024, driven by the aforementioned inflow of the $12.6 million<br> commercial mortgage loan in the Florida region. Inflows to nonaccrual residential mortgage loans were $4.6 million in the first quarter of 2025, an increase of $0.4 million compared to inflows of $4.2 million in the fourth quarter of 2024.<br> Inflows to nonaccrual consumer loans were $25.0 million in the first quarter of 2025, a decrease of $6.5 million compared to inflows of $31.5 million in the fourth quarter of 2024. See Early Delinquency for additional information. |
| --- | --- |
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 6 of 26
| • | Adversely classified commercial loans increased by $13.6 million to $100.9 million as of March 31, 2025, driven by the<br> downgrades of two commercial mortgage loans in the Florida region totaling $18.3 million, including the aforementioned $12.6 million inflow to nonaccrual status, partially offset by the upgrade of a $5.0 million commercial mortgage loan in<br> the Puerto Rico region. |
|---|
Early Delinquency
Total loans held for investment in early delinquency (i.e., 30-89 days past due accruing loans, as defined in regulatory reporting instructions) amounted to $131.2 million as of March 31, 2025, a decrease of $21.8 million, compared to $153.0 million as of December 31, 2024. The variances by major portfolio are as follows:
| • | Consumer loans in early delinquency decreased by $19.5 million to $98.5 million, mainly in the auto loans portfolio. |
|---|---|
| • | Residential mortgage loans in early delinquency decreased by $3.9 million to $28.9 million. |
| --- | --- |
Partially offset by:
| • | Commercial and construction loans in early delinquency increased by $1.6 million to $3.8 million. |
|---|
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 7 of 26
Allowance for Credit Losses
The following table summarizes the activity of the ACL for on-balance sheet and off-balance sheet exposures during the first quarter of 2025 and fourth quarter of 2024:
| Quarter Ended March 31, 2025 | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Loans and Finance Leases | Debt Securities | |||||||||||||||||||||||
| (Dollars in thousands) | Residential Mortgage Loans | Commercial<br><br> <br>and<br><br> <br>Construction<br><br> <br>Loans | Consumer<br><br> <br>Loans and<br><br> <br>Finance<br><br> <br>Leases | Total Loans<br><br> <br>and Finance<br><br> <br>Leases | Unfunded<br><br> <br>Loans<br><br> <br>Commitments | Held-to-<br><br> <br>Maturity | Available-<br><br> <br>for-Sale | Total ACL | ||||||||||||||||
| Allowance for Credit Losses | ||||||||||||||||||||||||
| Allowance for credit losses, beginning balance | $ | 40,654 | $ | 59,305 | $ | 143,983 | $ | 243,942 | $ | 3,143 | $ | 802 | $ | 521 | $ | 248,408 | ||||||||
| Provision for credit losses - expense (benefit) | 1,004 | 4,588 | 19,245 | 24,837 | (63 | ) | 41 | (5 | ) | 24,810 | ||||||||||||||
| Net (charge-offs) recoveries | (18 | ) | 131 | (21,623 | ) | (21,510 | ) | - | - | - | (21,510 | ) | ||||||||||||
| Allowance for credit losses, end of period | $ | 41,640 | $ | 64,024 | $ | 141,605 | $ | 247,269 | $ | 3,080 | $ | 843 | $ | 516 | $ | 251,708 | ||||||||
| Amortized cost of loans and finance leases | $ | 2,837,846 | $ | 6,095,998 | $ | 3,741,554 | $ | 12,675,398 | ||||||||||||||||
| Allowance for credit losses on loans to amortized cost | 1.47 | % | 1.05 | % | 3.78 | % | 1.95 | % | ||||||||||||||||
| Quarter Ended December 31, 2024 | ||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Loans and Finance Leases | Debt Securities | |||||||||||||||||||||||
| (Dollars in thousands) | Residential Mortgage Loans | Commercial and Construction Loans | Consumer Loans and Finance Leases | Total Loans<br><br> <br>and Finance<br><br> <br>Leases | Unfunded Loans Commitments | Held-to-Maturity | Available-for-Sale | Total ACL | ||||||||||||||||
| Allowance for Credit Losses | ||||||||||||||||||||||||
| Allowance for credit losses, beginning balance | $ | 40,651 | $ | 63,302 | $ | 143,043 | $ | 246,996 | $ | 3,461 | $ | 1,119 | $ | 526 | $ | 252,102 | ||||||||
| Provision for credit losses - expense (benefit) | 308 | (3,965 | ) | 25,201 | 21,544 | (318 | ) | (317 | ) | (5 | ) | 20,904 | ||||||||||||
| Net charge-offs | (305 | ) | (32 | ) | (24,261 | ) | (24,598 | ) | - | - | - | (24,598 | ) | |||||||||||
| Allowance for credit losses, end of period | $ | 40,654 | $ | 59,305 | $ | 143,983 | $ | 243,942 | $ | 3,143 | $ | 802 | $ | 521 | $ | 248,408 | ||||||||
| Amortized cost of loans and finance leases | $ | 2,828,431 | $ | 6,160,418 | $ | 3,757,707 | $ | 12,746,556 | ||||||||||||||||
| Allowance for credit losses on loans to amortized cost | 1.44 | % | 0.96 | % | 3.83 | % | 1.91 | % |
Allowance for Credit Losses for Loans and Finance Leases
As of March 31, 2025, the ACL for loans and finance leases was $247.3 million, an increase of $3.4 million, from $243.9 million as of December 31, 2024. The ACL for the first quarter of 2025 includes higher qualitative adjustments due to the uncertainty in the economic environment. The increase was mainly related to the ACL for commercial and construction loans, which increased by $4.7 million, mainly due to the impact of renewals of lines of credit, updated financial information of certain commercial borrowers, and a deterioration in the economic outlook of the forecasted CRE price index. Also, the ACL for residential mortgage loans increased by $0.9 million mainly due to newly originated loans that carry a higher loss rate, partially offset by improvements in the long-term projections of the unemployment rate and the Housing Price Index. Meanwhile, the ACL for consumer loans decreased by $2.2 million, driven by improvements in macroeconomic variables, mainly in the projection of the unemployment rate.
The provision for credit losses on loans and finance leases was $24.8 million for the first quarter of 2025, compared to $21.5 million in the fourth quarter of 2024, as detailed below:
| • | Provision for credit losses for the commercial and construction loan portfolios was an expense of $4.6 million for the first quarter of 2025, compared to a net benefit of $4.1 million for the<br> fourth quarter of 2024. The expense recorded during the first quarter of 2025 was driven by the aforementioned impact of renewals of lines of credit, updated financial information of certain commercial borrowers and deterioration in the<br> forecasted CRE price index. Meanwhile, the net benefit recorded during the fourth quarter of 2024 was driven by releases associated with the improved financial condition of certain commercial borrowers and an improvement on the economic<br> outlook of certain macroeconomic variables, particularly variables associated with commercial real estate property performance, partially offset by loan growth. |
|---|---|
| • | Provision for credit losses for the residential mortgage loan portfolio was an expense of $1.0 million for the first quarter of 2025, compared to an expense of $0.3 million for the fourth quarter<br> of 2024. The expense recorded during the first quarter of 2025 was driven by the aforementioned factors. |
| --- | --- |
| • | Provision for credit losses for the consumer loan and finance lease portfolios was an expense of $19.2 million for the first quarter of 2025, compared to an expense of $25.3 million for the fourth<br> quarter of 2024. The $6.1 million decrease in provision expense reflects $2.4 million in recoveries associated with the aforementioned bulk sale of fully charged-off consumer loans and finance leases during the first quarter of 2025, and<br> the aforementioned changes in macroeconomic variables. |
| --- | --- |
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 8 of 26
The ratio of the ACL for loans and finance leases to total loans held for investment was 1.95% as of March 31, 2025, compared to 1.91% as of December 31, 2024. The ratio of the total ACL for loans and finance leases to nonaccrual loans held for investment decreased to 251.13% as of March 31, 2025, compared to 278.90% as of December 31, 2024, driven by the aforementioned inflow of the $12.6 million commercial mortgage loan in the Florida region, which did not trigger any additional ACL based on the collateral value.
Net Charge-Offs
The following table presents ratios of net charge-offs (recoveries) to average loans held-in-portfolio for the last five quarters:
| Quarter Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | |||||||||||
| Residential mortgage | 0.00 | % | 0.04 | % | -0.01 | % | 0.01 | % | 0.03 | % | |||||
| Construction | -0.02 | % | -0.17 | % | -0.02 | % | -0.02 | % | -0.02 | % | |||||
| Commercial mortgage | -0.01 | % | -0.01 | % | -0.01 | % | -0.07 | % | -0.01 | % | |||||
| C&I | -0.01 | % | 0.02 | % | 0.15 | % | -0.08 | % | -0.58 | % | |||||
| Consumer loans and finance leases | 2.31 | %^(1)^ | 2.59 | % | 2.46 | % | 2.38 | % | 1.69 | %^(1)^ | |||||
| Total loans | 0.68 | %^(1)^ | 0.78 | % | 0.78 | % | 0.69 | % | 0.37 | %^(1)^ | |||||
| (1) | The net charge-offs for the quarters ended March 31, 2025 and 2024 included $2.4 million and $9.5 million, respectively, in recoveries associated with the<br> bulk sales of fully charged-off consumer loans and finance leases. The aforementioned recoveries reduced the ratios of consumer loans and finance leases and total net charge-offs to related average loans for the quarter ended March 31,<br> 2025 by 25 basis points and 8 basis points, respectively, and by 104 basis points and 31 basis points, respectively, for the quarter ended March 31, 2024. | ||||||||||||||
| --- | --- |
The ratios above are based on annualized net charge-offs and are not necessarily indicative of the results expected in subsequent periods.
Net charge-offs were $21.4 million for the first quarter of 2025, or an annualized 0.68% of average loans, compared to $24.6 million, or an annualized 0.78% of average loans, in the fourth quarter of 2024. The $3.2 million decrease in net charge-offs includes $2.4 million in recoveries associated with the aforementioned bulk sale of fully charged-off consumer loans and finance leases during the first quarter of 2025.
Allowance for Credit Losses for Unfunded Loan Commitments
As of each of March 31, 2025 and December 31, 2024, the ACL for off-balance sheet credit exposures amounted to $3.1 million.
Allowance for Credit Losses for Debt Securities
As of March 31, 2025, the ACL for debt securities was $1.4 million, of which $0.9 million was related to Puerto Rico municipal bonds classified as held-to-maturity, compared to $1.3 million and $0.8 million, respectively, as of December 31, 2024.
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 9 of 26
STATEMENT OF FINANCIAL CONDITION
Total assets were approximately $19.1 billion as of March 31, 2025, down $185.9 million from December 31, 2024.
The following variances within the main components of total assets are noted:
| • | A $168.9 million increase in cash and cash equivalents, mainly related to repayments from the investment securities and loans portfolios, partially offset by the $230.6 million decrease in<br> borrowings, the overall decrease in deposits, the payment of common stock dividends, and the repurchases of common stock. |
|---|---|
| • | A $264.6 million decrease in investment securities, driven by $241.0 million in maturities of U.S. agencies debentures and U.S. Treasury securities and $111.4 million in principal repayments of<br> U.S. agencies MBS and debentures, partially offset by the effect during the first quarter of 2025 of the $84.1 million increase in the fair value of available-for-sale debt securities attributable to changes in market interest rates and<br> $12.3 million in purchases of GNMA MBS with an average yield of 5.57%. |
| --- | --- |
| • | A $71.7 million decrease in total loans mainly due to the payoff of the aforementioned $73.8 million commercial mortgage loan in the Puerto Rico region. On a portfolio basis, the variance consisted<br> of decreases of $64.4 million in commercial and construction loans and $16.2 million in consumer loans, partially offset by an $8.9 million increase in residential mortgage loans. In terms of geography, the decline consisted of a $143.6<br> million decrease in the Puerto Rico region, partially offset by increases of $45.0 million in the Florida region and $26.9 million in the Virgin Islands region. The decrease in commercial and construction loans reflects the aforementioned<br> $73.8 million payoff and a $49.0 million reduction in balance of floor plan lines of credit in the Puerto Rico region. These variances were partially offset by the origination of four commercial loans in the Florida region totaling $55.3<br> million and a $15.6 million disbursement of a government line of credit in the Virgin Islands region. |
| --- | --- |
Total loan originations, including refinancings, renewals, and draws from existing commitments (excluding credit card utilization activity), amounted to $1.1 billion in the first quarter of 2025, a decrease of $463.1 million compared to the fourth quarter of 2024.
Total loan originations in the Puerto Rico region amounted to $765.0 million in the first quarter of 2025, compared to $1.2 billion in the fourth quarter of 2024. The $409.3 million decrease in total loan originations was mainly in commercial and construction loans, driven by five commercial mortgage loan originations totaling $171.5 million, each in excess of $15.0 million, mainly consisting of refinancings during the fourth quarter of 2024, and lower utilization of C&I lines of credit during the first quarter of 2025.
Total loan originations in the Virgin Islands region amounted to $48.0 million in the first quarter of 2025, compared to $65.1 million in the fourth quarter of 2024. The $17.1 million decrease in total loan originations was mainly in commercial and construction loans.
Total loan originations in the Florida region amounted to $261.4 million in the first quarter of 2025, compared to $298.1 million in the fourth quarter of 2024. The $36.7 million decrease in total loan originations was mainly related to a $23.2 million decrease in commercial and construction loan originations and a $13.1 million decrease in residential mortgage loan originations.
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 10 of 26
Total liabilities were approximately $17.3 billion as of March 31, 2025, a decrease of $296.0 million from December 31, 2024.
The following variances within the main components of total liabilities are noted:
| • | A $230.6 million decrease in borrowings related to the aforementioned repayment of $180.0 million in FHLB advances that matured during the first quarter of 2025 and the redemption of $50.6 million<br> in outstanding TruPS issued by FBP Statutory Trusts I and II, financing trusts that are wholly owned by the Corporation. |
|---|---|
| • | Total deposits decreased $48.8 million consisting of: |
| --- | --- |
| o | An $82.1 million decrease in government deposits, which reflects a decline of $142.2 million in the Puerto Rico region, partially<br> offset by an increase of $57.4 million in the Virgin Islands region. |
| --- | --- |
Partially offset by:
| o | A $29.0 million increase in deposits, excluding brokered CDs and government deposits, which consists of growth of $75.0 million in the Puerto Rico region and $38.9 million in the Virgin Islands<br> region, partially offset by a decrease of $84.9 million in the Florida region. The increase in such deposits includes a $69.8 million increase in non-interest-bearing deposits. |
|---|---|
| o | A $4.3 million increase in brokered CDs in the Florida region. The increase reflects $40.0 million of new issuances with original average maturities of approximately 1.4 years and an all-in cost of<br> 4.36%, partially offset by maturing brokered CDs amounting to $35.7 million with an all-in cost of 4.89% that were paid off during the first quarter of 2025. |
| --- | --- |
Total stockholders’ equity amounted to $1.8 billion as of March 31, 2025, an increase of $110.1 million from December 31, 2024, driven by the $84.1 million increase in the fair value of available-for-sale debt securities due to changes in market interest rates recognized as part of accumulated other comprehensive loss and the net income generated in the first quarter of 2025, partially offset by $29.6 million in common stock dividends declared in the first quarter of 2025 and $21.8 million in common stock repurchases at an average price of $18.21.
As of March 31, 2025, capital ratios exceeded the required regulatory levels for bank holding companies and well-capitalized banks. The Corporation’s estimated CET1 capital, tier 1 capital, total capital and leverage ratios under the Basel III rules were 16.62%, 16.62%, 17.96%, and 11.20%, respectively, as of March 31, 2025, compared to CET1 capital, tier 1 capital, total capital, and leverage ratios of 16.32%, 16.32%, 18.02%, and 11.07%, respectively, as of December 31, 2024.
Meanwhile, estimated CET1 capital, tier 1 capital, total capital and leverage ratios of our banking subsidiary, FirstBank, were 15.56%, 16.32%, 17.58%, and 11.00%, respectively, as of March 31, 2025, compared to CET1 capital, tier 1 capital, total capital and leverage ratios of 15.76%, 16.51%, 17.76%, and 11.20%, respectively, as of December 31, 2024.
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 11 of 26
LIQUIDITY
Cash and cash equivalents increased by $168.9 million to $1.3 billion as of March 31, 2025. When adding $1.4 billion of free high-quality liquid securities that could be liquidated or pledged within one day, total core liquidity amounted to $2.7 billion as of March
31, 2025, or 14.25% of total assets, compared to $2.4 billion, or 12.54% of total assets as of December 31,
2024. In addition, as of March 31, 2025, the Corporation had $862.2 million available for credit with the FHLB based on the value of the collateral pledged with the FHLB. As such, the basic
liquidity ratio \(which includes cash, free high-quality liquid assets such as U.S. government and government-sponsored enterprises’ obligations that could be liquidated or pledged within one day, and available secured lines of credit with the
FHLB to total assets\) was approximately 18.76% as of March 31, 2025, compared to 17.27% as of December 31, 2024.
In addition to the aforementioned available credit from the FHLB, the Corporation also maintains borrowing capacity at the FED Discount Window Program. The Corporation had approximately $2.6 billion available for funding under the FED’s Borrower-In-Custody Program as of March 31, 2025. In the aggregate, as of March 31, 2025, the Corporation had $6.2 billion available to meet liquidity needs, or 133% of estimated uninsured deposits (excluding fully collateralized government deposits).
The Corporation’s total deposits, excluding brokered CDs, amounted to $16.3 billion as of March 31, 2025, compared to $16.4 billion as of December 31, 2024, which includes $3.4 billion and $3.5 billion, respectively, in government
deposits that are fully collateralized. Excluding fully collateralized government deposits and FDIC-insured deposits, as of March 31, 2025, the estimated amount of
uninsured deposits was $4.6 billion, which represents 28.44% of total deposits, compared to $4.8 billion, or 29.36% of total deposits, as of December 31, 2024. Refer to Table 10 in the accompanying
tables \(Exhibit A\) for additional information about the deposits composition.
Tangible Common Equity (Non-GAAP)
On a non-GAAP basis, the Corporation’s tangible common equity ratio increased to 9.10% as of March 31, 2025, compared to 8.44% as of December 31, 2024, driven by earnings less dividends and repurchases of common stock and the $84.1 million increase in the fair value of available-for-sale debt securities. Refer to Non-GAAP Disclosures- Non-GAAP Financial Measures for the definition of and additional information about this non-GAAP financial measure.
The following table presents a reconciliation of the Corporation’s tangible common equity and tangible assets to the most comparable GAAP items as of the indicated dates:
| March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In thousands, except ratios and per share information) | |||||||||||||||
| Tangible Equity: | |||||||||||||||
| Total common equity - GAAP | $ | 1,779,342 | $ | 1,669,236 | $ | 1,700,885 | $ | 1,491,460 | $ | 1,479,717 | |||||
| Goodwill | (38,611 | ) | (38,611 | ) | (38,611 | ) | (38,611 | ) | (38,611 | ) | |||||
| Other intangible assets | (5,715 | ) | (6,967 | ) | (8,260 | ) | (9,700 | ) | (11,542 | ) | |||||
| Tangible common equity - non-GAAP | $ | 1,735,016 | $ | 1,623,658 | $ | 1,654,014 | $ | 1,443,149 | $ | 1,429,564 | |||||
| Tangible Assets: | |||||||||||||||
| Total assets - GAAP | $ | 19,106,983 | $ | 19,292,921 | $ | 18,859,170 | $ | 18,881,374 | $ | 18,890,961 | |||||
| Goodwill | (38,611 | ) | (38,611 | ) | (38,611 | ) | (38,611 | ) | (38,611 | ) | |||||
| Other intangible assets | (5,715 | ) | (6,967 | ) | (8,260 | ) | (9,700 | ) | (11,542 | ) | |||||
| Tangible assets - non-GAAP | $ | 19,062,657 | $ | 19,247,343 | $ | 18,812,299 | $ | 18,833,063 | $ | 18,840,808 | |||||
| Common shares outstanding | 163,104 | 163,869 | 163,876 | 163,865 | 166,707 | ||||||||||
| Tangible common equity ratio - non-GAAP | 9.10 | % | 8.44 | % | 8.79 | % | 7.66 | % | 7.59 | % | |||||
| Tangible book value per common share - non-GAAP | $ | 10.64 | $ | 9.91 | $ | 10.09 | $ | 8.81 | $ | 8.58 |
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 12 of 26
Exposure to Puerto Rico Government
Direct Exposure
As of March 31, 2025, the Corporation had $288.1 million of direct exposure to the Puerto Rico government, its municipalities, and public corporations, compared to $288.6 million as of December 31, 2024. As of March 31, 2025, approximately $196.0 million of the exposure consisted of loans and obligations of municipalities in Puerto Rico that are supported by assigned property tax revenues and for which, in most cases, the good faith, credit, and unlimited taxing power of the applicable municipality have been pledged to their repayment, and $50.9 million consisted of loans and obligations which are supported by one or more specific sources of municipal revenues. The Corporation’s total direct exposure to the Puerto Rico government also included $8.8 million in a loan extended to an affiliate of the Puerto Rico Electric Power Authority and $29.5 million in loans to public corporations of Puerto Rico. In addition, the total direct exposure included an obligation of the Puerto Rico government, specifically a residential pass-through MBS issued by the PRHFA, at an amortized cost of $2.9 million (fair value of $1.6 million as of March 31, 2025), included as part of the Corporation’s available-for-sale debt securities portfolio. This residential pass-through MBS issued by the PRHFA is collateralized by certain second mortgages and had an unrealized loss of $1.3 million as of March 31, 2025, of which $0.3 million is due to credit deterioration.
The aforementioned exposure to municipalities in Puerto Rico included $92.5 million of financing arrangements with Puerto Rico municipalities that were issued in bond form but underwritten as loans with features that are typically found in commercial loans. These bonds are accounted for as held-to-maturity debt securities.
Indirect Exposure
As of March 31, 2025 and December 31, 2024, the Corporation had $2.9 billion and $3.1 billion, respectively, of public sector deposits in Puerto Rico. Approximately 19% of the public sector deposits as of March 31, 2025 were from municipalities and municipal agencies in Puerto Rico, and 81% were from public corporations, the Puerto Rico central government and agencies, and U.S. federal government agencies in Puerto Rico.
Additionally, as of March 31, 2025, the outstanding balance of construction loans funded through conduit financing structures to support the federal programs of Low-Income Housing Tax Credit (“LIHTC”) combined with Community Development Block Grant-Disaster Recovery (“CDBG-DR”) funding amounted to $62.6 million, compared to $59.2 million as of December 31, 2024. The main objective of these programs is to spur development in new or rehabilitated and affordable rental housing. PRHFA, as program subrecipient and conduit issuer, issues tax-exempt obligations which are acquired by private financial institutions and are required to co-underwrite with PRHFA a mirror construction loan agreement for the specific project loan to which the Corporation will serve as ultimate lender but where the PRHFA will be the lender of record. The total amount of unfunded loan commitments related to these loans as of March 31, 2025 was $76.2 million.
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 13 of 26
NON-GAAP DISCLOSURES
This press release contains GAAP financial measures and non-GAAP financial measures. Non-GAAP financial measures are used when management believes that the presentation of these non-GAAP financial measures enhances the ability of analysts and investors to analyze trends in the Corporation’s business and understand the performance of the Corporation. The Corporation may utilize these non-GAAP financial measures as guides in its budgeting and long-term planning process. Where non-GAAP financial measures are used, the most comparable GAAP financial measure, as well as the reconciliation of the non-GAAP financial measure to the most comparable GAAP financial measure, can be found in the text or in the tables in or attached to this press release. Any analysis of these non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP.
Certain non-GAAP financial measures, such as adjusted net income and adjusted earnings per share, and adjusted pre-tax, pre-provision income, exclude the effect of items that management believes are not reflective of core operating performance (the “Special Items”). Other non-GAAP financial measures include adjusted net interest income and adjusted net interest income margin, tangible common equity, tangible book value per common share, and certain capital ratios. These measures should be read in conjunction with the accompanying tables (Exhibit A), which are an integral part of this press release, and the Corporation’s other financial information that is presented in accordance with GAAP.
Special Items
The financial results for the quarter ended March 31, 2024 included the following Special Item:
FDIC Special Assessment Expense
| - | A charge of $0.9 million ($0.6 million after-tax, calculated based on the statutory tax rate of 37.5%) was recorded for the quarter ended March 31, 2024 to increase the special<br> assessment imposed by the FDIC in connection with losses to the Deposit Insurance Fund associated with protecting uninsured deposits following the failures of certain financial institutions during the first half of 2023. The estimated FDIC<br> special assessment of $7.4 million was the revised estimated loss reflected in the FDIC invoice for the first quarterly collection period with a payment date of June 28, 2024. The FDIC deposit special assessment is reflected in the<br> condensed consolidated statements of income as part of “FDIC deposit insurance” expenses. |
|---|
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 14 of 26
Non-GAAP Financial Measures
Adjusted Pre-Tax, Pre-Provision Income
Adjusted pre-tax, pre-provision income is a non-GAAP performance metric that management uses and believes that investors may find useful in analyzing underlying performance trends, particularly in times of economic stress, including as a result of natural catastrophes or health epidemics. Adjusted pre-tax, pre-provision income, as defined by management, represents income before income taxes adjusted to exclude the provisions for credit losses on loans, unfunded loan commitments and debt securities. In addition, from time to time, earnings are also adjusted for certain items that management believes are not reflective of core operating performance, which are regarded as Special Items.
Tangible Common Equity Ratio and Tangible Book Value per Common Share
The tangible common equity ratio and tangible book value per common share are non-GAAP financial measures that management believes are generally used by the financial community to evaluate capital adequacy. Tangible common equity is total common equity less goodwill and other intangible assets. Tangible assets are total assets less goodwill and other intangible assets. Tangible common equity ratio is tangible common equity divided by tangible assets. Tangible book value per common share is tangible assets divided by common shares outstanding. Refer to Statement of Financial Condition - Tangible Common Equity (Non-GAAP) for a reconciliation of the Corporation’s total stockholders’ equity and total assets in accordance with GAAP to the non-GAAP financial measures of tangible common equity and tangible assets, respectively. Management uses and believes that many stock analysts use the tangible common equity ratio and tangible book value per common share in conjunction with other more traditional bank capital ratios to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, typically stemming from the use of the purchase method of accounting for mergers and acquisitions. Accordingly, the Corporation believes that disclosure of these financial measures may be useful to investors. Neither tangible common equity nor tangible assets, or the related measures, should be considered in isolation or as a substitute for stockholders’ equity, total assets, or any other measure calculated in accordance with GAAP. Moreover, the manner in which the Corporation calculates its tangible common equity, tangible assets, and any other related measures may differ from that of other companies reporting measures with similar names.
Net Interest Income Excluding Valuations, and on a Tax-Equivalent Basis
Net interest income, interest rate spread, and net interest margin are reported excluding the changes in the fair value of derivative instruments and on a tax-equivalent basis in order to provide to investors additional information about the Corporation’s net interest income that management uses and believes should facilitate comparability and analysis of the periods presented. The changes in the fair value of derivative instruments have no effect on interest due or interest earned on interest-bearing liabilities or interest-earning assets, respectively. The tax-equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a marginal income tax rate. Income from tax-exempt earning assets is increased by an amount equivalent to the taxes that would have been paid if this income had been taxable at statutory rates. Refer to Table 4 in the accompanying tables (Exhibit A) for a reconciliation of the Corporation’s net interest income to adjusted net interest income excluding valuations, and on a tax-equivalent basis. Management believes that it is a standard practice in the banking industry to present net interest income, interest rate spread, and net interest margin on a fully tax-equivalent basis. This adjustment puts all earning assets, most notably tax-exempt securities and tax-exempt loans, on a common basis that management believes facilitates comparison of results to the results of peers.
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 15 of 26
NET INCOME AND RECONCILIATION TO ADJUSTED NET INCOME (NON-GAAP)
The following table shows, for the first quarter of 2025 and fourth quarter of 2024, net income and earnings per diluted share, and reconciles, for the first quarter of 2024, net income to adjusted net income and adjusted earnings per diluted share, which are non-GAAP financial measures that exclude the significant Special Items discussed in the Non-GAAP
Disclosures - Special Items section.
| Quarter Ended | |||||||
|---|---|---|---|---|---|---|---|
| March 31, 2025 | December 31, 2024 | March 31, 2024 | |||||
| (In thousands, except per share information) | |||||||
| Net income, as reported (GAAP) | $ | 77,059 | $ | 75,701 | $ | 73,458 | |
| Adjustments: | |||||||
| FDIC special assessment expense | - | - | 947 | ||||
| Income tax impact of adjustments ^(1)^ | - | - | (355 | ) | |||
| Adjusted net income attributable to common stockholders (non-GAAP) | $ | 77,059 | $ | 75,701 | $ | 74,050 | |
| Weighted-average diluted shares outstanding | 163,749 | 163,893 | 167,798 | ||||
| Earnings per share - diluted (GAAP) | $ | 0.47 | $ | 0.46 | $ | 0.44 | |
| Adjusted earnings per share - diluted (non-GAAP) | $ | 0.47 | $ | 0.46 | $ | 0.44 | |
| (1) | See Non-GAAP Disclosures - Special Items above for discussion of the individual<br> tax impact related to the above adjustment. | ||||||
| --- | --- |
INCOME BEFORE INCOME TAXES AND RECONCILIATION TO ADJUSTED PRE-TAX, PRE-PROVISION INCOME (NON-GAAP)
The following table reconciles income before income taxes to adjusted pre-tax, pre-provision income for the last five quarters:
| Quarter Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | |||||||||||
| (Dollars in thousands) | |||||||||||||||
| Income before income taxes | $ | 100,299 | $ | 96,029 | $ | 96,386 | $ | 101,379 | $ | 97,413 | |||||
| Add: Provision for credit losses expense | 24,810 | 20,904 | 15,245 | 11,605 | 12,167 | ||||||||||
| Add: FDIC special assessment expense | - | - | - | 152 | 947 | ||||||||||
| Adjusted pre-tax, pre-provision income ^(1)^ | $ | 125,109 | $ | 116,933 | $ | 111,631 | $ | 113,136 | $ | 110,527 | |||||
| Change from most recent prior period (amount) | $ | 8,176 | $ | 5,302 | $ | (1,505 | ) | $ | 2,609 | $ | 530 | ||||
| Change from most recent prior period (percentage) | 7.0 | % | 4.7 | % | -1.3 | % | 2.4 | % | 0.5 | % |
| (1) | Non-GAAP financial measure. See Non-GAAP Disclosures above for the definition<br> and additional information about this non-GAAP financial measure. |
|---|
Conference Call / Webcast Information
First BanCorp.’s senior management will host an earnings conference call and live webcast on Thursday, April 24, 2025, at 12:00 p.m. (Eastern Time). The call may be accessed via a live Internet webcast through the Corporation’s investor relations website, fbpinvestor.com, or through a dial-in telephone number at (833) 470-1428 or (404) 975-4839. The participant access code is 811566. The Corporation recommends that listeners go to the web site at least 15 minutes prior to the call to download and install any necessary software. Following the webcast presentation, a question and answer session will be made available to research analysts and institutional investors. A replay of the webcast will be archived in the Corporation’s investor relations website, fbpinvestor.com, until April 24, 2026. A telephone replay will be available one hour after the end of the conference call through May 24, 2025, at (866) 813-9403. The replay access code is 686791.
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 16 of 26
Safe Harbor
This press release may contain “forward-looking statements” concerning the Corporation’s future economic, operational, and financial performance. The words or phrases “expect,” “anticipate,” “intend,” “should,” “would,” “will,” “plans,” “forecast,” “believe,” and similar expressions are meant to identify “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created by such sections. The Corporation cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date hereof, and advises readers that any such forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, estimates, and assumptions by us that are difficult to predict. Various factors, some of which are beyond our control, including, but not limited to, the uncertainties more fully discussed in Part I, Item 1A, “Risk Factors” of the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024, and the following, could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements: the effect of changes in the interest rate environment and inflation levels on the level, composition and performance of the Corporation’s assets and liabilities, and corresponding effects on the Corporation’s net interest income, net interest margin, loan originations, deposit attrition, overall results of operations, and liquidity position; volatility in the financial services industry, which could result in, among other things, bank deposit runoffs, liquidity constraints, and increased regulatory requirements and costs; the effect of continued changes in the fiscal, monetary and trade policies and regulations of the U.S. federal government (including as a result of the current U.S. presidential administration), the Puerto Rico government and other governments, including those determined by the Federal Reserve Board, the Federal Reserve Bank of New York, the FDIC, government-sponsored housing agencies and regulators in Puerto Rico, the U.S., and the U.S. and British Virgin Islands, that may affect the future results of the Corporation; uncertainty as to the ability of FirstBank to retain its core deposits and generate sufficient cash flow through its wholesale funding sources, such as securities sold under agreements to repurchase, FHLB advances, and brokered CDs, which may require us to sell investment securities at a loss; adverse changes in general political and economic conditions in Puerto Rico, the U.S., and the U.S. and British Virgin Islands, including in the interest rate environment, unemployment rates, market liquidity and volatility, housing absorption rates, real estate markets, and U.S. capital markets, which may affect funding sources, loan portfolio performance and credit quality, market prices of investment securities, and demand for the Corporation’s products and services, and which may reduce the Corporation’s revenues and earnings and the value of the Corporation’s assets; the impact of government financial assistance for hurricane recovery and other disaster relief on economic activity in Puerto Rico, and the timing and pace of disbursements of funds earmarked for disaster relief; the ability of the Corporation, FirstBank, and third-party service providers to identify and prevent cyber-security incidents, such as data security breaches, ransomware, malware, “denial of service” attacks, “hacking,” identity theft, and state-sponsored cyberthreats, and the occurrence of and response to any incidents that occur, which may result in misuse or misappropriation of confidential or proprietary information, disruption, or damage to our systems or those of third-party service providers on which we rely, increased costs and losses and/or adverse effects to our reputation; general competitive factors and other market risks as well as the implementation of existing or planned strategic growth opportunities, including risks, uncertainties, and other factors or events related to any business acquisitions, dispositions, strategic partnerships, strategic operational investments, including systems conversions, and any anticipated efficiencies or other expected results related thereto; uncertainty as to the implementation of the debt restructuring plan of Puerto Rico and the fiscal plan for Puerto Rico as certified on June 5, 2024, by the oversight board established by the Puerto Rico Oversight, Management, and Economic Stability Act, or any revisions to it, on our clients and loan portfolios, and any potential impact from future economic or political developments and tax regulations in Puerto Rico; the impact of changes in accounting standards, or determinations and assumptions in applying those standards, and of forecasts of economic variables considered for the determination of the ACL; the ability of FirstBank to realize the benefits of its net deferred tax assets; the ability of FirstBank to generate sufficient cash flow to pay dividends to the Corporation; environmental, social, and governance (“ESG”) matters, including our climate-related initiatives and commitments, as well as the impact and potential cost to us of any policies, legislation, or initiatives in opposition to our ESG policies; the impacts of natural or man-made disasters, widespread health emergencies, geopolitical conflicts (including sanctions, war or armed conflict, such as the ongoing conflict in Ukraine, the conflict in the Middle East, the possible expansion of such conflicts in surrounding areas and potential geopolitical consequences, and the threat of conflict from neighboring countries in our region), terrorist attacks, or other catastrophic external events, including impacts of such events on general economic conditions and on the Corporation’s assumptions regarding forecasts of economic variables; the risk that additional portions of the unrealized losses in the Corporation’s debt securities portfolio are determined to be credit-related, resulting in additional charges to the provision for credit losses on the Corporation’s debt securities portfolio, and the potential for additional credit losses that could emerge from further downgrades of the U.S.’s Long-Term Foreign-Currency Issuer Default Rating and negative ratings outlooks; the impacts of applicable legislative, tax, or regulatory changes or changes in legislative, tax, or regulatory priorities, the reduction in staffing at U.S. governmental agencies, potential government shutdowns, and political impasses, including uncertainties regarding the U.S. debt ceiling and federal budget, as well as the current U.S. presidential administration and Puerto Rico government administration, on the Corporation’s financial condition or performance; the risk of possible failure or circumvention of the Corporation’s internal controls and procedures and the risk that the Corporation’s risk management policies may not be adequate; the risk that the FDIC may further increase the deposit insurance premium and/or require further special assessments, causing an additional increase in the Corporation’s non-interest expenses; any need to recognize impairments on the Corporation’s financial instruments, goodwill, and other intangible assets; the risk that the impact of the occurrence of any of these uncertainties on the Corporation’s capital would preclude further growth of FirstBank and preclude the Corporation’s Board of Directors from declaring dividends; and uncertainty as to whether FirstBank will be able to continue to satisfy its regulators regarding, among other things, its asset quality, liquidity plans, maintenance of capital levels, and compliance with applicable laws, regulations and related requirements. The Corporation does not undertake to, and specifically disclaims any obligation to update any “forward-looking statements” to reflect occurrences or unanticipated events or circumstances after the date of such statements, except as required by the federal securities laws.
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 17 of 26
About First BanCorp.
First BanCorp. is the parent corporation of FirstBank Puerto Rico, a state-chartered commercial bank with operations in Puerto Rico, the U.S., and the British Virgin Islands and Florida, and of FirstBank Insurance Agency. First BanCorp.’s shares of common stock trade on the New York Stock Exchange under the symbol FBP. Additional information about First BanCorp. may be found at www.1firstbank.com.
First BanCorp.
Ramon Rodriguez
Senior Vice President
Corporate Strategy and Investor Relations
ramon.rodriguez@firstbankpr.com
(787) 729-8200 Ext. 82179
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 18 of 26
EXHIBIT A
Table 1 – Condensed Consolidated Statements of Financial Condition
| December 31, 2024 | |||||
| (In thousands, except for share information) | |||||
| ASSETS | |||||
| Cash and due from banks | 1,327,075 | $ | 1,158,215 | ||
| Money market investments: | |||||
| Time deposit with another financial institution | 500 | 500 | |||
| Other short-term investments | 700 | 700 | |||
| Total money market investments | 1,200 | 1,200 | |||
| Available-for-sale debt securities, at fair value (ACL of 516 as of March 31, 2025 and 521 as of December 31, 2024) | 4,312,884 | 4,565,302 | |||
| Held-to-maturity debt securities, at amortized cost, net of ACL of 843 as of March 31, 2025 and 802 as of<br> December 31, 2024; (fair value of 305,501 as of March 31, 2025 and 308,040 as of December 31, 2024) | 311,964 | 316,984 | |||
| Total debt securities | 4,624,848 | 4,882,286 | |||
| Equity securities | 44,813 | 52,018 | |||
| Total investment securities | 4,669,661 | 4,934,304 | |||
| Loans, net of ACL of 247,269 as of March 31, 2025 and 243,942 as of December 31, 2024 | 12,428,129 | 12,502,614 | |||
| Mortgage loans held for sale, at lower of cost or market | 14,713 | 15,276 | |||
| Total loans, net | 12,442,842 | 12,517,890 | |||
| Accrued interest receivable on loans and investments | 63,777 | 71,881 | |||
| Premises and equipment, net | 130,469 | 133,437 | |||
| OREO | 15,880 | 17,306 | |||
| Deferred tax asset, net | 134,346 | 136,356 | |||
| Goodwill | 38,611 | 38,611 | |||
| Other intangible assets | 5,715 | 6,967 | |||
| Other assets | 277,407 | 276,754 | |||
| Total assets | 19,106,983 | $ | 19,292,921 | ||
| LIABILITIES | |||||
| Deposits: | |||||
| Non-interest-bearing deposits | 5,629,383 | $ | 5,547,538 | ||
| Interest-bearing deposits | 11,193,146 | 11,323,760 | |||
| Total deposits | 16,822,529 | 16,871,298 | |||
| Advances from the FHLB | 320,000 | 500,000 | |||
| Other borrowings | 11,143 | 61,700 | |||
| Accounts payable and other liabilities | 173,969 | 190,687 | |||
| Total liabilities | 17,327,641 | 17,623,685 | |||
| STOCKHOLDERSʼ EQUITY | |||||
| Common stock, 0.10 par value, 223,663,116 shares issued (March 31, 2025 - 163,104,181 shares outstanding and December 31, 2024 - 163,868,877 shares outstanding) | 22,366 | 22,366 | |||
| Additional paid-in capital | 957,380 | 964,964 | |||
| Retained earnings | 2,086,276 | 2,038,812 | |||
| Treasury stock, at cost (March 31, 2025 - 60,558,935 shares and December 31, 2024 - 59,794,239 shares) | (804,185 | ) | (790,350 | ) | |
| Accumulated other comprehensive loss | (482,495 | ) | (566,556 | ) | |
| Total stockholdersʼ equity | 1,779,342 | 1,669,236 | |||
| Total liabilities and stockholdersʼ equity | 19,106,983 | $ | 19,292,921 |
All values are in US Dollars.
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 19 of 26
Table 2 – Condensed Consolidated Statements of Income
| Quarter Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| March 31, 2025 | December 31, 2024 | March 31, 2024 | |||||||
| (In thousands, except per share information) | |||||||||
| Net interest income: | |||||||||
| Interest income | $ | 277,065 | $ | 279,728 | $ | 268,505 | |||
| Interest expense | 64,668 | 70,461 | 71,985 | ||||||
| Net interest income | 212,397 | 209,267 | 196,520 | ||||||
| Provision for credit losses - expense (benefit): | |||||||||
| Loans | 24,837 | 21,544 | 12,917 | ||||||
| Unfunded loan commitments | (63 | ) | (318 | ) | 281 | ||||
| Debt securities | 36 | (322 | ) | (1,031 | ) | ||||
| Provision for credit losses - expense | 24,810 | 20,904 | 12,167 | ||||||
| Net interest income after provision for credit losses | 187,587 | 188,363 | 184,353 | ||||||
| Non-interest income: | |||||||||
| Service charges and fees on deposit accounts | 9,640 | 9,748 | 9,662 | ||||||
| Mortgage banking activities | 3,177 | 3,183 | 2,882 | ||||||
| Card and processing income | 11,475 | 12,155 | 11,312 | ||||||
| Other non-interest income | 11,442 | 7,113 | 10,127 | ||||||
| Total non-interest income | 35,734 | 32,199 | 33,983 | ||||||
| Non-interest expenses: | |||||||||
| Employees’ compensation and benefits | 62,137 | 59,652 | 59,506 | ||||||
| Occupancy and equipment | 22,630 | 22,771 | 21,381 | ||||||
| Business promotion | 3,278 | 5,328 | 3,842 | ||||||
| Professional service fees | 11,486 | 11,810 | 12,676 | ||||||
| Taxes, other than income taxes | 5,878 | 5,994 | 5,129 | ||||||
| FDIC deposit insurance | 2,236 | 2,236 | 3,102 | ||||||
| Net gain on OREO operations | (1,129 | ) | (1,074 | ) | (1,452 | ) | |||
| Credit and debit card processing expenses | 5,110 | 7,147 | 5,751 | ||||||
| Other non-interest expenses | 11,396 | 10,669 | 10,988 | ||||||
| Total non-interest expenses | 123,022 | 124,533 | 120,923 | ||||||
| Income before income taxes | 100,299 | 96,029 | 97,413 | ||||||
| Income tax expense | 23,240 | 20,328 | 23,955 | ||||||
| Net income | $ | 77,059 | $ | 75,701 | $ | 73,458 | |||
| Net income attributable to common stockholders | $ | 77,059 | $ | 75,701 | $ | 73,458 | |||
| Earnings per common share: | |||||||||
| Basic | $ | 0.47 | $ | 0.46 | $ | 0.44 | |||
| Diluted | $ | 0.47 | $ | 0.46 | $ | 0.44 |
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 20 of 26
Table 3 – Selected Financial Data
| Quarter Ended | ||||||
|---|---|---|---|---|---|---|
| March 31, 2025 | December 31, 2024 | March 31, 2024 | ||||
| (Shares in thousands) | ||||||
| Per Common Share Results: | ||||||
| Net earnings per share - basic | $ | 0.47 | $ | 0.46 | $ | 0.44 |
| Net earnings per share - diluted | $ | 0.47 | $ | 0.46 | $ | 0.44 |
| Cash dividends declared | $ | 0.18 | $ | 0.16 | $ | 0.16 |
| Average shares outstanding | 162,934 | 163,084 | 167,142 | |||
| Average shares outstanding diluted | 163,749 | 163,893 | 167,798 | |||
| Book value per common share | $ | 10.91 | $ | 10.19 | $ | 8.88 |
| Tangible book value per common share ^(1)^ | $ | 10.64 | $ | 9.91 | $ | 8.58 |
| Common stock price: end of period | $ | 19.17 | $ | 18.59 | $ | 17.54 |
| Selected Financial Ratios (In Percent): | ||||||
| Profitability: | ||||||
| Return on average assets | 1.64 | 1.56 | 1.56 | |||
| Return on average equity | 17.90 | 17.77 | 19.56 | |||
| Interest rate spread ^(2)^ | 3.79 | 3.55 | 3.35 | |||
| Net interest margin ^(2)^ | 4.65 | 4.44 | 4.27 | |||
| Efficiency ratio ^(3)^ | 49.58 | 51.57 | 52.46 | |||
| Capital and Other: | ||||||
| Average total equity to average total assets | 9.14 | 8.80 | 7.99 | |||
| Total capital | 17.96 | 18.02 | 18.36 | |||
| Common equity Tier 1 capital | 16.62 | 16.32 | 15.90 | |||
| Tier 1 capital | 16.62 | 16.32 | 15.90 | |||
| Leverage | 11.20 | 11.07 | 10.65 | |||
| Tangible common equity ratio ^(1)^ | 9.10 | 8.44 | 7.59 | |||
| Dividend payout ratio | 38.06 | 34.47 | 36.41 | |||
| Basic liquidity ratio ^(4)^ | 18.76 | 17.27 | 19.60 | |||
| Core liquidity ratio ^(5)^ | 14.25 | 12.54 | 14.45 | |||
| Loan to deposit ratio | 75.44 | 75.64 | 74.48 | |||
| Uninsured deposits, excluding fully collateralized deposits, to total deposits ^(6)^ | 28.44 | 29.36 | 27.93 | |||
| Asset Quality: | ||||||
| Allowance for credit losses for loans and finance leases to total loans held for investment | 1.95 | 1.91 | 2.14 | |||
| Net charge-offs (annualized) to average loans outstanding | 0.68 | 0.78 | 0.37 | |||
| Provision for credit losses for loans and finance leases to net charge-offs | 115.47 | 87.58 | 115.66 | |||
| Non-performing assets to total assets | 0.68 | 0.61 | 0.69 | |||
| Nonaccrual loans held for investment to total loans held for investment | 0.78 | 0.69 | 0.76 | |||
| Allowance for credit losses for loans and finance leases to total nonaccrual loans held for investment | 251.13 | 278.90 | 283.54 | |||
| Allowance for credit losses for loans and finance leases to total nonaccrual loans held for investment, excluding residential estate loans | 365.41 | 439.39 | 437.28 |
| (1) | Non-GAAP financial measures. Refer to Non-GAAP Disclosures and Statement of Financial Condition - Tangible Common Equity<br> (Non-GAAP) above for additional information about the components and a reconciliation of these measures. |
|---|---|
| (2) | Non-GAAP financial measures reported on a tax-equivalent basis and excluding changes in the fair value of derivative instruments. Refer to Non-GAAP Disclosures and<br> Table 4 below for additional information and a reconciliation of these measures. |
| --- | --- |
| (3) | Non-interest expenses to the sum of net interest income and non-interest income. |
| --- | --- |
| (4) | Defined as the sum of cash and cash equivalents, free high quality liquid assets that could be liquidated within one day, and available secured lines of credit with the FHLB to total assets. |
| --- | --- |
| (5) | Defined as the sum of cash and cash equivalents and free high quality liquid assets that could be liquidated within one day to total assets. |
| --- | --- |
| (6) | Exclude insured deposits not covered by federal deposit insurance. |
| --- | --- |
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 21 of 26
Table 4 – Reconciliation of Net Interest Income to Net Interest Income Excluding Valuations and on a Tax-Equivalent Basis
The following table reconciles net interest income in accordance with GAAP to net interest income excluding valuations, and net interest income on a tax-equivalent basis for the first quarter of 2025 and for the fourth and first quarters of 2024. The table also reconciles net interest spread and net interest margin to these items excluding valuations, and on a tax-equivalent basis.
| Quarter Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | March 31, 2025 | December 31, 2024 | March 31, 2024 | ||||||
| Net Interest Income | |||||||||
| Interest income - GAAP | $ | 277,065 | $ | 279,728 | $ | 268,505 | |||
| Unrealized loss (gain) on derivative instruments | 3 | (3 | ) | (2 | ) | ||||
| Interest income excluding valuations - non-GAAP | 277,068 | 279,725 | 268,503 | ||||||
| Tax-equivalent adjustment | 6,232 | 5,226 | 4,813 | ||||||
| Interest income on a tax-equivalent basis and excluding valuations - non-GAAP | $ | 283,300 | $ | 284,951 | $ | 273,316 | |||
| Interest expense - GAAP | $ | 64,668 | $ | 70,461 | $ | 71,985 | |||
| Net interest income - GAAP | $ | 212,397 | $ | 209,267 | $ | 196,520 | |||
| Net interest income excluding valuations - non-GAAP | $ | 212,400 | $ | 209,264 | $ | 196,518 | |||
| Net interest income on a tax-equivalent basis and excluding valuations - non-GAAP | $ | 218,632 | $ | 214,490 | $ | 201,331 | |||
| Average Balances | |||||||||
| Loans and leases | $ | 12,632,501 | $ | 12,584,143 | $ | 12,207,840 | |||
| Total securities, other short-term investments and interest-bearing cash balances | 6,444,016 | 6,592,411 | 6,720,395 | ||||||
| Average interest-earning assets | $ | 19,076,517 | $ | 19,176,554 | $ | 18,928,235 | |||
| Average interest-bearing liabilities | $ | 11,749,011 | $ | 11,911,904 | $ | 11,838,159 | |||
| Average assets ^(1)^ | $ | 19,107,102 | $ | 19,217,363 | $ | 18,858,299 | |||
| Average non-interest-bearing deposits | $ | 5,425,836 | $ | 5,402,606 | $ | 5,308,531 | |||
| Average Yield/Rate | |||||||||
| Average yield on interest-earning assets - GAAP | 5.89 | % | 5.79 | % | 5.69 | % | |||
| Average rate on interest-bearing liabilities - GAAP | 2.23 | % | 2.35 | % | 2.44 | % | |||
| Net interest spread - GAAP | 3.66 | % | 3.44 | % | 3.25 | % | |||
| Net interest margin - GAAP | 4.52 | % | 4.33 | % | 4.16 | % | |||
| Average yield on interest-earning assets excluding valuations - non-GAAP | 5.89 | % | 5.79 | % | 5.69 | % | |||
| Average rate on interest-bearing liabilities | 2.23 | % | 2.35 | % | 2.44 | % | |||
| Net interest spread excluding valuations - non-GAAP | 3.66 | % | 3.44 | % | 3.25 | % | |||
| Net interest margin excluding valuations - non-GAAP | 4.52 | % | 4.33 | % | 4.16 | % | |||
| Average yield on interest-earning assets on a tax-equivalent basis and excluding valuations - non-GAAP | 6.02 | % | 5.90 | % | 5.79 | % | |||
| Average rate on interest-bearing liabilities | 2.23 | % | 2.35 | % | 2.44 | % | |||
| Net interest spread on a tax-equivalent basis and excluding valuations - non-GAAP | 3.79 | % | 3.55 | % | 3.35 | % | |||
| Net interest margin on a tax-equivalent basis and excluding valuations - non-GAAP | 4.65 | % | 4.44 | % | 4.27 | % |
| (1) | Includes, among other things, the ACL on loans and finance leases and debt securities, as well as unrealized gains and losses on available-for-sale debt securities. |
|---|
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 22 of 26
Table 5 – Quarterly Statement of Average Interest-Earning Assets and Average Interest-Bearing Liabilities (On a Tax-Equivalent Basis)
| Average Volume | Interest Income ^(1)^ / Expense | Average Rate ^(1)^ | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter Ended | March 31, | December 31, | March 31, | March 31, | December 31, | March 31, | March 31, | December 31, | March 31, | ||||||||||||
| 2025 | 2024 | 2024 | 2025 | 2024 | 2024 | 2025 | 2024 | 2024 | |||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||
| Money market and other short-term investments | $ | 1,111,087 | $ | 994,674 | $ | 533,747 | $ | 12,205 | $ | 11,986 | $ | 7,254 | 4.45 | % | 4.78 | % | 5.45 | % | |||
| Government obligations ^(2)^ | 1,971,327 | 2,248,155 | 2,684,169 | 6,970 | 7,681 | 9,053 | 1.43 | % | 1.36 | % | 1.35 | % | |||||||||
| MBS | 3,308,964 | 3,295,492 | 3,451,293 | 17,497 | 15,685 | 15,238 | 2.14 | % | 1.89 | % | 1.77 | % | |||||||||
| FHLB stock | 32,661 | 33,995 | 34,635 | 790 | 790 | 854 | 9.81 | % | 9.22 | % | 9.89 | % | |||||||||
| Other investments | 19,977 | 20,095 | 16,551 | 247 | 160 | 66 | 5.01 | % | 3.16 | % | 1.60 | % | |||||||||
| Total investments ^(3)^ | 6,444,016 | 6,592,411 | 6,720,395 | 37,709 | 36,302 | 32,465 | 2.37 | % | 2.18 | % | 1.94 | % | |||||||||
| Residential mortgage loans | 2,841,918 | 2,832,473 | 2,810,304 | 41,484 | 41,574 | 40,473 | 5.92 | % | 5.82 | % | 5.78 | % | |||||||||
| Construction loans | 232,295 | 228,438 | 218,854 | 5,596 | 5,351 | 4,537 | 9.77 | % | 9.29 | % | 8.32 | % | |||||||||
| C&I and commercial mortgage loans | 5,806,929 | 5,775,301 | 5,504,782 | 99,759 | 102,720 | 99,074 | 6.97 | % | 7.06 | % | 7.22 | % | |||||||||
| Finance leases | 901,768 | 894,116 | 863,685 | 17,854 | 17,546 | 17,127 | 8.03 | % | 7.79 | % | 7.95 | % | |||||||||
| Consumer loans | 2,849,591 | 2,853,815 | 2,810,215 | 80,898 | 81,458 | 79,640 | 11.51 | % | 11.32 | % | 11.37 | % | |||||||||
| Total loans ^(4) (5)^ | 12,632,501 | 12,584,143 | 12,207,840 | 245,591 | 248,649 | 240,851 | 7.88 | % | 7.84 | % | 7.91 | % | |||||||||
| Total interest-earning assets | $ | 19,076,517 | $ | 19,176,554 | $ | 18,928,235 | $ | 283,300 | $ | 284,951 | $ | 273,316 | 6.02 | % | 5.90 | % | 5.79 | % | |||
| Interest-bearing liabilities: | |||||||||||||||||||||
| Time deposits | $ | 3,048,778 | $ | 3,042,752 | $ | 2,892,355 | $ | 25,468 | $ | 26,946 | $ | 24,410 | 3.39 | % | 3.51 | % | 3.39 | % | |||
| Brokered CDs | 483,774 | 485,176 | 749,760 | 5,461 | 5,907 | 9,680 | 4.58 | % | 4.83 | % | 5.18 | % | |||||||||
| Other interest-bearing deposits | 7,693,900 | 7,777,387 | 7,534,344 | 27,568 | 29,854 | 28,935 | 1.45 | % | 1.52 | % | 1.54 | % | |||||||||
| Securities sold under agreements to repurchase | - | 976 | - | - | 12 | - | 0.00 | % | 4.88 | % | 0.00 | % | |||||||||
| Advances from the FHLB | 468,667 | 500,217 | 500,000 | 5,190 | 5,674 | 5,610 | 4.49 | % | 4.50 | % | 4.50 | % | |||||||||
| Other borrowings | 53,892 | 105,396 | 161,700 | 981 | 2,068 | 3,350 | 7.38 | % | 7.78 | % | 8.31 | % | |||||||||
| Total interest-bearing liabilities | $ | 11,749,011 | $ | 11,911,904 | $ | 11,838,159 | $ | 64,668 | $ | 70,461 | $ | 71,985 | 2.23 | % | 2.35 | % | 2.44 | % | |||
| Net interest income | $ | 218,632 | $ | 214,490 | $ | 201,331 | |||||||||||||||
| Interest rate spread | 3.79 | % | 3.55 | % | 3.35 | % | |||||||||||||||
| Net interest margin | 4.65 | % | 4.44 | % | 4.27 | % |
| (1) | Non-GAAP financial measures reported on a tax-equivalent basis. The tax-equivalent yield was estimated by dividing the interest rate spread on exempt assets by 1 less the Puerto Rico statutory tax rate of<br> 37.5% and adding to it the cost of interest-bearing liabilities. When adjusted to a tax-equivalent basis, yields on taxable and exempt assets are comparable. Changes in the fair value of derivative instruments are excluded from interest<br> income because the changes in valuation do not affect interest paid or received. Refer to Non-GAAP Disclosures - Non-GAAP Financial Measures and Table 4 above for additional information and a<br> reconciliation of these measures. |
|---|---|
| (2) | Government obligations include debt issued by government-sponsored agencies. |
| --- | --- |
| (3) | Unrealized gains and losses on available-for-sale debt securities are excluded from the average volumes. |
| --- | --- |
| (4) | Average loan balances include the average of non-performing loans. |
| --- | --- |
| (5) | Interest income on loans includes $5.4 million, $3.9 million, and $3.2 million, for the quarters ended March 31, 2025, December 31, 2024, and March 31, 2024, respectively, of income from prepayment<br> penalties and late fees related to the Corporation’s loan portfolio. The results for the first quarter of 2025 include the aforementioned prepayment penalties associated with the payoff of a $73.8 million commercial mortgage loan and<br> higher income from late fees in the consumer loans and finance leases portfolios. |
| --- | --- |
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 23 of 26
Table 6 – Loan Portfolio by Geography
| As of March 31, 2025 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Puerto Rico | Virgin Islands | United States | Consolidated | |||||
| (In thousands) | ||||||||
| Residential mortgage loans | $ | 2,181,346 | $ | 153,307 | $ | 503,193 | $ | 2,837,846 |
| Commercial loans: | ||||||||
| Construction loans | 183,220 | 10,571 | 40,650 | 234,441 | ||||
| Commercial mortgage loans | 1,706,319 | 75,083 | 720,287 | 2,501,689 | ||||
| C&I loans | 2,140,246 | 149,032 | 1,070,590 | 3,359,868 | ||||
| Commercial loans | 4,029,785 | 234,686 | 1,831,527 | 6,095,998 | ||||
| Finance leases | 905,035 | - | - | 905,035 | ||||
| Consumer loans | 2,762,208 | 68,833 | 5,478 | 2,836,519 | ||||
| Loans held for investment | 9,878,374 | 456,826 | 2,340,198 | 12,675,398 | ||||
| Mortgage loans held for sale | 14,713 | - | - | 14,713 | ||||
| Total loans | $ | 9,893,087 | $ | 456,826 | $ | 2,340,198 | $ | 12,690,111 |
| As of December 31, 2024 | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Puerto Rico | Virgin Islands | United States | Consolidated | |||||
| (In thousands) | ||||||||
| Residential mortgage loans | $ | 2,166,980 | $ | 156,225 | $ | 505,226 | $ | 2,828,431 |
| Commercial loans: | ||||||||
| Construction loans | 181,607 | 2,820 | 43,969 | 228,396 | ||||
| Commercial mortgage loans | 1,800,445 | 67,449 | 698,090 | 2,565,984 | ||||
| C&I loans | 2,192,468 | 133,407 | 1,040,163 | 3,366,038 | ||||
| Commercial loans | 4,174,520 | 203,676 | 1,782,222 | 6,160,418 | ||||
| Finance leases | 899,446 | - | - | 899,446 | ||||
| Consumer loans | 2,781,182 | 69,577 | 7,502 | 2,858,261 | ||||
| Loans held for investment | 10,022,128 | 429,478 | 2,294,950 | 12,746,556 | ||||
| Mortgage loans held for sale | 14,558 | 434 | 284 | 15,276 | ||||
| Total loans | $ | 10,036,686 | $ | 429,912 | $ | 2,295,234 | $ | 12,761,832 |
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 24 of 26
Table 7 – Non-Performing Assets by Geography
| As of March 31, 2025 | ||||||||
|---|---|---|---|---|---|---|---|---|
| (In thousands) | Puerto Rico | Virgin Islands | United States | Total | ||||
| Nonaccrual loans held for investment: | ||||||||
| Residential mortgage | $ | 15,081 | $ | 6,820 | $ | 8,892 | $ | 30,793 |
| Construction | 396 | 960 | - | 1,356 | ||||
| Commercial mortgage | 2,583 | 8,075 | 12,497 | 23,155 | ||||
| C&I | 19,672 | 672 | - | 20,344 | ||||
| Consumer and finance leases | 22,460 | 335 | 18 | 22,813 | ||||
| Total nonaccrual loans held for investment | 60,192 | 16,862 | 21,407 | 98,461 | ||||
| OREO | 12,265 | 3,615 | - | 15,880 | ||||
| Other repossessed property | 13,309 | 127 | 8 | 13,444 | ||||
| Other assets ^(1)^ | 1,599 | - | - | 1,599 | ||||
| Total non-performing assets ^(2)^ | $ | 87,365 | $ | 20,604 | $ | 21,415 | $ | 129,384 |
| Past due loans 90 days and still accruing ^(3)^ | $ | 34,056 | $ | 3,061 | $ | - | $ | 37,117 |
| As of December 31, 2024 | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (In thousands) | Puerto Rico | Virgin Islands | United States | Total | ||||
| Nonaccrual loans held for investment: | ||||||||
| Residential mortgage | $ | 16,854 | $ | 6,555 | $ | 8,540 | $ | 31,949 |
| Construction | 403 | 962 | - | 1,365 | ||||
| Commercial mortgage | 2,716 | 8,135 | - | 10,851 | ||||
| C&I | 19,595 | 919 | - | 20,514 | ||||
| Consumer and finance leases | 22,538 | 205 | 45 | 22,788 | ||||
| Total nonaccrual loans held for investment | 62,106 | 16,776 | 8,585 | 87,467 | ||||
| OREO | 13,691 | 3,615 | - | 17,306 | ||||
| Other repossessed property | 11,637 | 219 | 3 | 11,859 | ||||
| Other assets ^(1)^ | 1,620 | - | - | 1,620 | ||||
| Total non-performing assets ^(2)^ | $ | 89,054 | $ | 20,610 | $ | 8,588 | $ | 118,252 |
| Past due loans 90 days and still accruing ^(3)^ | $ | 39,307 | $ | 3,083 | $ | - | $ | 42,390 |
| (1) | Residential pass-through MBS issued by the PRHFA held as part of the available-for-sale debt securities portfolio. |
|---|---|
| (2) | Excludes PCD loans previously accounted for under ASC Subtopic 310-30 for which the Corporation made the accounting policy election of maintaining pools of loans as “units of account” both at the time of<br> adoption of CECL on January 1, 2020 and on an ongoing basis for credit loss measurement. These loans will continue to be excluded from nonaccrual loan statistics as long as the Corporation can reasonably estimate the timing and amount of<br> cash flows expected to be collected on the loan pools. The portion of such loans contractually past due 90 days or more amounted to $5.7 million as of March 31, 2025 (December 31, 2024 - $6.2 million). |
| --- | --- |
| (3) | These include rebooked loans, which were previously pooled into GNMA securities, amounting to $6.4 million as of March 31, 2025 (December 31, 2024 - $5.7 million). Under the GNMA program, the Corporation<br> has the option but not the obligation to repurchase loans that meet GNMA's specified delinquency criteria. For accounting purposes, the loans subject to the repurchase option are required to be reflected on the financial statements with<br> an offsetting liability. |
| --- | --- |
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 25 of 26
Table 8 – Allowance for Credit Losses on Loans and Finance Leases
| Quarter Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| March 31, 2025 | December 31, 2024 | March 31, 2024 | |||||||
| (Dollars in thousands) | |||||||||
| Allowance for credit losses on loans and finance leases, beginning of period | $ | 243,942 | $ | 246,996 | $ | 261,843 | |||
| Provision for credit losses on loans and finance leases expense | 24,837 | 21,544 | 12,917 | ||||||
| Net (charge-offs) recoveries of loans and finance leases: | |||||||||
| Residential mortgage | (18 | ) | (305 | ) | (244 | ) | |||
| Construction | 14 | 96 | 10 | ||||||
| Commercial mortgage | 40 | 59 | 40 | ||||||
| C&I | 77 | (187 | ) | 4,587 | |||||
| Consumer loans and finance leases (1) | (21,623 | ) | (24,261 | ) | (15,561 | ) | |||
| Net charge-offs (1) | (21,510 | ) | (24,598 | ) | (11,168 | ) | |||
| Allowance for credit losses on loans and finance leases, end of period | $ | 247,269 | $ | 243,942 | $ | 263,592 | |||
| Allowance for credit losses on loans and finance leases to period end total<br><br> <br>loans held for investment | 1.95 | % | 1.91 | % | 2.14 | % | |||
| Net charge-offs (annualized) to average loans outstanding during the period | 0.68 | % | 0.78 | % | 0.37 | % | |||
| Provision for credit losses on loans and finance leases to net charge-offs during the period | 1.15 | x | 0.88 | x | 1.16 | x | |||
| (1) | For the quarters ended March 31, 2025 and 2024, includes recoveries totaling $2.4 million and $9.5 million, respectively, associated with the bulk sales of fully charged-off<br> consumer loans and finance leases. | ||||||||
| --- | --- |
Table 9 – Annualized Net Charge-Offs (Recoveries) to Average Loans
| Quarter Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| March 31, 2025 | December 31, 2024 | March 31, 2024 | |||||||
| Residential mortgage | 0.00 | % | 0.04 | % | 0.03 | % | |||
| Construction | -0.02 | % | -0.17 | % | -0.02 | % | |||
| Commercial mortgage | -0.01 | % | -0.01 | % | -0.01 | % | |||
| C&I | -0.01 | % | 0.02 | % | -0.58 | % | |||
| Consumer loans and finance leases | 2.31 | % ^(1)^ | 2.59 | % | 1.69 | % ^(1)^ | |||
| Total loans | 0.68 | % ^(1)^ | 0.78 | % | 0.37 | % ^(1)^ | |||
| (1) | The aforementioned recoveries associated with the bulk sales of fully charged-off consumer loans and finance leases during the first quarters of 2025 and 2024 reduced the ratios of consumer loans and<br> finance leases and total net charge-offs to related average loans for the quarter ended March 31, 2025 by 25 basis points and 8 basis points, respectively, and by 104 basis points and 31 basis points, respectively, for the quarter ended<br> March 31, 2024. | ||||||||
| --- | --- |
First BanCorp. Announces Earnings for the Quarter Ended March 31, 2025 – Page 26 of 26
Table 10 – Deposits
| As of | ||||
|---|---|---|---|---|
| March 31, 2025 | December 31, 2024 | |||
| (In thousands) | ||||
| Time deposits | $ | 3,124,391 | $ | 3,007,144 |
| Interest-bearing saving and checking accounts | 7,586,288 | 7,838,498 | ||
| Non-interest-bearing deposits | 5,629,383 | 5,547,538 | ||
| Total deposits, excluding brokered CDs ^(1)^ | 16,340,062 | 16,393,180 | ||
| Brokered CDs | 482,467 | 478,118 | ||
| Total deposits | $ | 16,822,529 | $ | 16,871,298 |
| Total deposits, excluding brokered CDs and government deposits | $ | 12,896,786 | $ | 12,867,789 |
| (1) | As of March 31, 2025, government deposits amounted to $3.4 billion, compared to $3.5 billion as of December 31, 2024. |
|---|
Exhibit 99.2
Financial ResultsFirst Quarter 2025April 24, 2025
Forward Looking Statements This presentation contains “forward-looking statements” concerning the Corporation’s future economic, operational and financial performance. The words or phrases “expect,” “anticipate,” “intend,” “should,” “would,” “will,” “plans,” “forecast,” “believe” and similar expressions are meant to identify “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created by such sections. The Corporation cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date hereof, and advises readers that any such forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, estimates and assumptions by us that are difficult to predict. Various factors, some of which are beyond our control, including, but not limited to, the uncertainties more fully discussed in Part I, Item 1A, “Risk Factors” of the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024, and the following, could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements: the effect of the current global interest rate environment (including the potential for ongoing reductions in interest rates) and inflation levels on the level, composition and performance of the Corporation’s assets and liabilities, and corresponding effects on the Corporation’s net interest income, net interest margin, loan originations, deposit attrition, overall results of operations, and liquidity position; the effects of changes in the interest rate environment, including any adverse change in the Corporation’s ability to attract and retain clients and gain acceptance from current and prospective customers for new products and services, including those related to the offering of digital banking and financial services; volatility in the financial services industry, which could result in, among other things, bank deposit runoffs, liquidity constraints, and increased regulatory requirements and costs; uncertainty as to the ability of FirstBank to retain its core deposits and generate sufficient cash flow through its wholesale funding sources, which may require us to sell investment securities at a loss; adverse changes in general political and economic conditions in Puerto Rico, the U.S., and the U.S. and British Virgin Islands, including in the interest rate environment, unemployment rates, market liquidity, housing absorption rates, real estate markets and U.S. capital markets; general competitive factors and other market risks as well as the implementation of existent or planned strategic growth opportunities, including risks, uncertainties, and other factors or events related to any business acquisitions, dispositions, strategic partnerships, strategic operational investments including system conversions, and any anticipated efficiencies or other expected results related thereto; uncertainty as to the implementation of the debt restructuring plan of Puerto Rico and the Fiscal Plan for Puerto Rico as certified on June 5, 2024 by the Financial Oversight and Management Board for Puerto Rico, or any revisions to it, on our clients and loan portfolios, and any potential impact from future economic or political developments and tax regulations in Puerto Rico; the impact of government financial assistance for hurricane recovery and other disaster relief on economic activity in Puerto Rico; the timing of sales of properties from our other real estate owned (“OREO”) portfolio; the impacts of applicable legislative, tax or regulatory changes on the Corporation’s financial condition or performance; and the effect of continued changes in the fiscal, monetary, and trade policies and regulations of the U.S. federal government, the Puerto Rico government and other governments. The Corporation does not undertake and specifically disclaims any obligation to update any “forward-looking statements” to reflect occurrences or unanticipated events or circumstances after the date of such statements, except as required by the federal securities laws. Non-GAAP Financial Measures In addition to the Corporation’s financial information presented in accordance with GAAP, management uses certain “non-GAAP” financial measures” within the meaning of Regulation G promulgated by the SEC, to clarify and enhance understanding of past performance and prospects for the future. Please refer to pages 16-18 for a reconciliation of GAAP to non-GAAP measures and calculations.
Agenda 1 1Q 2025 – Quarter Highlights Aurelio Alemán, President and Chief Executive Officer 2 1Q 2025 – Results of Operations Orlando Berges, Executive Vice President and Chief Financial Officer 3 1Q 2025 – Questions and Answers
First Quarter 2025 Financial Performance Highlights Balance Sheet Total loans decreased by $71.7 million to $12.7 billion (-0.5% vs. prior quarter) primarily reflecting decrease in commercial loan portfolio Core deposits, other than brokered and fully collateralized government deposits, grew by $29.0 million reaching $12.9 billion Fully collateralized government deposits decreased by $82.1 million to $3.4 billion Non-performing assets ("NPA”) increased by $11.1 million to $129.4 million; NPAs represent 0.68% of total assets Allowance for credit losses (“ACL”) coverage ratio on loans and leases increased by 4 basis points to 1.95% Asset Quality Total available liquidity sources of approximately $6.2 billion or 1.3x of uninsured deposits Redeemed $50.6 million in junior subordinated debentures, repurchased $21.8 million in common stock, and declared $29.6 million in common stock dividends; CET1 remains strong and above well-capitalized levels at 16.6% On a non-GAAP basis, tangible book value per share grew by 7.4% to $10.64 and tangible common equity ratio reached 9.1% Liquidity and Capital Profitability Net income of $77.1 million ($0.47 per diluted share), compared to $75.7 million ($0.46 per diluted share) in 4Q 2024 Strong return on average assets (“ROAA”) of 1.64%, compared to 1.56% in 4Q 2024; margin up 19 bps to 4.52% On a non-GAAP basis, adjusted pre-tax, pre-provision income grew by $8.2 million or 7.0% sequentially to $125.1 million Sustained expense management discipline resulting in efficiency ratio of 49.6% compared to 51.6% in 4Q 2024
Franchise Highlights and Operating Environment ROAA: 1.64% Adj. ROACE(1): 13.8% 1 CET1 Ratio:16.6% ACL Coverage: 2.0% 2 7% Growth in Tangible Book Value 3 PR Economic Activity Index (EAI)(2) 1Q20 2Q20 4Q21 4Q22 4Q23 1Q24 2Q24 3Q24 YoY Change PR Payroll Employment (Thousands) 1Q20 2Q20 4Q20 4Q21 4Q22 4Q23 4Q24 Unemployment Rate (SA) 2022 2023 2024 $3,537 $4,778 $5,054 $3,492(69%) $1,313(26%) $250(5%) FEMA HUD (CDBG) Other PR Disaster Relief Funds Disbursed Per Year(3) Strategic Priorities (1) Non-GAAP financial measure. Please refer to the calculation and management’s reason for using this measure on slide 18 titled “First Quarter 2025 - Use of Non-GAAP Financial Measures.” (2) Puerto Rico Economic Development Bank (EDB). (3) www.recovery.pr.gov and Recovery Support Function Leadership Group (RSFLG) - https://recovery.fema.gov/rsflg-monthly-data. ($ millions) 1Q 2025 Franchise Highlights and Priorities Operating Environment Operating Environment Despite US macro uncertainty, steady business activity and consumer spending in main market still evidenced by rise in tax collections and debit and credit card sales, among other metrics Resilient labor market with historical low unemployment rate of 5.4% Ongoing economic support from disaster relief funds; focus on development of affordable housing and utility infrastructure projects Digital Progress Retail digital banking registered users up 2.6% linked quarter (10.7% vs. prior year) Over 60% of all customers enrolled in digital platforms Over 42% of commercial and retail deposits captured through self-service and digital functionalities Maintain strong balance sheet position focused on reasonable and thoughtful capital deployment Selectively grow market share in core business segments while sustaining operational leverage and safeguarding asset quality Proactively monitor US policy changes and their implications for businesses and consumers
Results of Operations
First Quarter 2025 Discussion of Results 1Q25 Adjusted Tangible Common Equity Ratio 1Q25 Adjusted Tangible Book Value per Share 1Q25 Adjusted ROACE 1Q25 TCE Ratio AOCL Impact Adj. TCE Ratio 2.2% 1Q25 TBVPS AOCL Impact Adj. TBVPS 1Q25 ROACE 4.1% AOCL Impact Adj. ROACE (1) Non-GAAP financial measures. Please refer to the calculation and management’s reason for using these measures on slides 16-18 titled “First Quarter 2025 - Use of Non-GAAP Financial Measures.” Income Statement and Selected Financial Data Non-GAAP Reconciliation – Selected Data(1)
First Quarter 2025 Profitability Dynamics Net Interest Income ($MM) 4.16% 1Q24 4.22% 2Q24 4.25% 3Q24 4.33% 4Q24 4.52% 1Q25 Net Interest Income ($) Net Interest Margin (GAAP %) Net interest income amounted to $212.4 million, an increase of $3.1 million vs. the prior quarter, including a $1.2 million prepayment penalty collected on a commercial loan and a $2.7 million reduction from two less days in the quarter. The increase primarily reflects: A $5.8 million decrease in interest expense mostly due to lower rates on interest-bearing deposits, a reduction in wholesale borrowing balances, and a $1.4 million effect of two less days in the quarter Partially offset by a $2.7 million decrease in interest income primarily driven by a $4.1 million impact of two less days in the quarter and the effect of lower rates on the repricing of floating rate commercial loans, partially compensated by the deployment of investment portfolio cash flows Net interest margin increased during the quarter by 19 bps to 4.52%, mostly reflecting a change in asset mix resulting from the deployment of cash flows from lower yielding securities to higher yielding interest-earning assets and a decrease in the cost of interest-bearing deposits, while simultaneously redeeming higher cost junior subordinated debentures Key Highlights Evolution of Loan Yields and Cost of Funds(1) (1) Cost of funds include cost of all interest-bearing deposits, non-interest-bearing deposits, and wholesale funding 1Q24 2Q24 3Q24 4Q24 1Q25 6.11% 6.15% 6.14% 6.10% 6.22% Loan Yields Cost of Funds
First Quarter 2025 Profitability Dynamics Non-Interest Expenses ($MM) Non-interest expenses of $123.0 million, down $1.5 million vs. prior quarter mainly due to: A $2.1 million decrease in seasonal business promotion expenses and a $2.0 million decrease in card processing expenses mainly due to $2.2 million in reimbursements received during the quarter Partially offset by a $2.5 million increase in compensation expense driven by seasonal increase in payroll taxes and bonuses, which were partially offset by the effect of two less working days in the quarter Efficiency ratio decreased from 51.6% to 49.6%, below the 52% operating target Key Highlights Non-Interest Income ($MM) Key Highlights Non-interest income of $35.7 million, compared to $32.2 million in prior quarter; the $3.5 million increase includes: A $3.5 million increase in insurance income mostly driven by seasonal contingent commissions recorded in the first quarter A $1.3 million increase in gains from purchased income tax credits, partially offset by $0.6 million in debit cards and merchant volume-based incentives recognized in 4Q24 -20 0 80 100 120 140 -$0.1 $61.5 1Q24 -$2.5 $63.7 2Q24 4Q24 $65.0 $61.4 -$0.1 -$0.5 $122.9 3Q24 $118.7 $124.5 $64.5 $120.9 1Q25 -$0.7 $123.0 Credit Related Payroll Related Other Operating Expenses 1Q24 2Q24 3Q24 4Q24 $34.0 $32.0 $32.5 $32.2 1Q25 $35.7 $2.9 $3.2 $3.2 $3.2 Other Mortgage Banking Service Charges on Deposits
First Quarter 2025 Asset Quality Non-Performing Assets ($MM) Increase in NPAs was primarily driven by the inflow of a $12.6 million commercial mortgage loan in Florida, partially offset by lower OREO balances and non-accrual residential mortgage loans Inflows to nonaccrual loans held for investment were $43.4 million, an increase of $6.3 million when compared to the prior quarter, related to the aforementioned inflow of the $12.6 million commercial mortgage Florida loan, partially offset by a decrease of $6.5 million in consumer loan inflows during the quarter Loans in early delinquency (i.e., 30-89 days past due accruing loans) amounted to $131.2 million, a decrease of $21.8 million vs. 4Q 2024, mostly related to a $19.5 million decrease in consumer loans Total non-performing assets increased by $11.1 million to $129.4 million or 0.68% of total assets 0.69% 1Q24 0.67% 2Q24 $89 0.63% 3Q24 $87 0.61% 4Q24 0.68% 1Q25 $130 $127 $119 $118 $129 Repossessed Assets and Other Loans HFI NPAs/Assets $1 1Q24 $5 2Q24 $4 3Q24 $1 4Q24 $1 1Q25 $130 $127 $119 $118 $129 Repossessed Assets and Other Consumer Residential Construction Commercial
First Quarter 2025 ACL and Capital Total stockholders’ equity amounted to $1.8 billion, an increase of $110.1 million vs. the prior quarter, driven by an $84.1 million increase in the fair value of available-for-sale debt securities due to changes in market rates recognized as part of accumulated other comprehensive loss and the earnings generated during the quarter Partially offset by $29.6 million in common stock dividends declared during the quarter and $21.8 million in common stock repurchases All regulatory ratios remain significantly above “well-capitalized” levels Evolution of ACL ($MM) and ACL on Loans to Total Loans (%) Capital Ratios (%) The allowance for credit losses (ACL) on loans and leases was $247.3 million, up $3.4 million vs. prior quarter; the ratio of the ACL on loans and finance leases to total loans held for investment increased to 1.95% Increase driven by $4.7 million in the commercial ACL mainly due to a slight deterioration in the macro-outlook of CRE prices, partially offset by a $2.2 million decrease in the consumer ACL due to an improvement in the outlook for unemployment Net charge-offs of $21.4 million (0.68% of average loans), net of $2.4 million in recoveries from the sale of charged-off loans; adjusted net charge-offs ratio of 0.76% Key Highlights Key Highlights $0.0 1.72% 2019 $8.0 2.61% Day-1 CECL $0.0 2.14% 1Q24 2.06% 4Q24 3Q24 1.98% 2Q24 1.95% 1Q25 $155.0 $248.0 1.91% $260.9 $252.1 $248.4 $251.7 $270.2 Off-BS Credit Exposure Debt Securities Loans ACL on Loans/Loans 15.9 1Q24 15.8 2Q24 16.2 3Q24 4Q24 1Q25 Total Risk-Based Capital Tier-1 Capital Tier-1 Common Leverage Tangible Common
1Q 2025 Financial Results Appendix and Non-GAAP Financial Measures
First Quarter 2025 Appendix – Balance Sheet Highlights Loan Portfolio - $MM Loan Originations - $MM(1) Total Deposits (excluding Brokered CDs) - $MM Composition of Deposit Portfolio vs. Available Liquidity - $MM(2) $12 $237 1Q24 $10 $186 2Q24 $13 $207 3Q24 $15 $228 4Q24 $15 $234 1Q25 Loans HFS Commercial Consumer Construction Residential $12,324 $12,396 $12,459 $12,762 $12,690 $47 1Q24 $122 $48 2Q24 $117 $45 3Q24 $133 $60 4Q24 $114 $49 1Q25 Consumer Credit Cards Residential Construction Commercial $1,201 $1,260 $1,303 $1,654 $1,177 1Q24 2Q24 3Q24 4Q24 1Q25 Public Funds CDs & IRAs Commercial Retail $15,820 $15,904 $15,827 $16,393 $16,340 Loan Originations include refinancing and renewals, as well as credit card utilization activity Uninsured deposits exclude public funds which are fully collateralized $5,629(34%) $10,711(66%) 1Q25 NIB IB $16,340 $8,250(50%) $4,647(29%) $3,443(21%) Insured Uninsured Public Funds Uninsured Deposits Available Liquidity $6,186 Cash & Equivalents Free Liquid Securities FHLB Availability Fed Line Commercial Loan Portfolio Distribution - $MM $2,502(43%) $3,360(57%) 1Q25 CRE C&I $5,862 $3,360(57%) $436(8%) $55(1%) $2,011(34%) C&I Office CRE (PR) Office CRE (US) Other CRE CRE Maturities < 12 Months ($MM) Retail Office Industrial Multifamily Other Hotel $185 6.4% 6.2% 5.4% 7.2% 5.3% 7.0% Weighted Avg. Rate
First Quarter 2025 Appendix - Puerto Rico Government Exposure Government Loans Key Highlights Government Deposits Key Highlights As of 1Q 2025, the Corporation had $288.1 million of direct exposure and $62.6 million of indirect exposure to the Puerto Rico government, its municipalities and public corporations 86% of direct government exposure is to municipalities in Puerto Rico, which are supported by assigned property tax revenues or by one or more specific sources of municipal revenues As of 1Q 2025, the Corporation had $2.9 billion of public sector deposits in Puerto Rico, compared to $3.1 billion in 4Q 2024 Approximately 19% were from municipalities and municipal agencies in Puerto Rico and 81% were from public corporations, the Puerto Rico central government and agencies, and U.S. federal government agencies in Puerto Rico
First Quarter 2025 Appendix - NPL Migration
First Quarter 2025 Appendix - Use of Non-GAAP Financial Measures Basis of Presentation: Use of Non-GAAP Financial Measures This presentation contains non-GAAP financial measures. Non-GAAP financial measures are used when management believes that the presentation of these non-GAAP financial measures enhances the ability of analysts and investors to analyze trends in the Corporation’s business and understand the performance of the Corporation. Where non-GAAP financial measures are used, the most comparable GAAP financial measure, as well as the reconciliation of the non-GAAP financial measure to the most comparable GAAP financial measure, can be found in the text or in the attached tables to this earnings presentation. Any analysis of these non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP. Tangible Common Equity Ratio and Tangible Book Value per Common Share The tangible common equity ratio and tangible book value per common share are non-GAAP financial measures that management believes are generally used by the financial community to evaluate capital adequacy. Tangible common equity is total common equity less goodwill and other intangibles. Tangible assets are total assets less goodwill and other intangibles. Management and many stock analysts use the tangible common equity ratio and tangible book value per common share in conjunction with more traditional bank capital ratios to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, typically stemming from the use of the purchase method of accounting for mergers and acquisitions. Accordingly, the Corporation believes that disclosure of these financial measures may be useful to investors. Neither tangible common equity nor tangible assets, or the related measures, should be considered in isolation or as a substitute for stockholders’ equity, total assets, or any other measure calculated in accordance with GAAP. Moreover, the way the Corporation calculates its tangible common equity, tangible assets, and any other related measures may differ from that of other companies reporting measures with similar names.
First Quarter 2025 Appendix - Use of Non-GAAP Financial Measures Basis of Presentation: Use of Non-GAAP Financial Measures This presentation contains non-GAAP financial measures. Non-GAAP financial measures are used when management believes that the presentation of these non-GAAP financial measures enhances the ability of analysts and investors to analyze trends in the Corporation’s business and understand the performance of the Corporation. Where non-GAAP financial measures are used, the most comparable GAAP financial measure, as well as the reconciliation of the non-GAAP financial measure to the most comparable GAAP financial measure, can be found in the text or in the attached tables to this earnings presentation. Any analysis of these non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP. Adjusted Pre-Tax, Pre-Provision Income Adjusted pre-tax, pre-provision income is a non-GAAP performance metric that management uses and believes that investors may find useful in analyzing underlying performance trends, particularly in times of economic stress, including as a result of natural catastrophes or health epidemies. Adjusted pre-tax, pre-provision income, as defined by management, represents income before income taxes adjusted to exclude the provision for credit losses expense, as well as certain items that management believes are not reflective of core operating performance.
First Quarter 2025 Appendix - Use of Non-GAAP Financial Measures Basis of Presentation: Use of Non-GAAP Financial Measures This presentation contains non-GAAP financial measures. Non-GAAP financial measures are used when management believes that the presentation of these non-GAAP financial measures enhances the ability of analysts and investors to analyze trends in the Corporation’s business and understand the performance of the Corporation. Where non-GAAP financial measures are used, the most comparable GAAP financial measure, as well as the reconciliation of the non-GAAP financial measure to the most comparable GAAP financial measure, can be found in the text or in the attached tables to this earnings presentation. Any analysis of these non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP. Adjusted Tangible Common Equity Ratio Adjusted tangible common equity, which is total common equity less goodwill and other intangibles, after exclusion of net unrealized losses on available-for-sale debt securities recognized as part of accumulated other comprehensive loss, divided by adjusted tangible assets, which are total assets less goodwill and other intangible assets, after exclusion of the net unrealized losses on available-for- sale debt securities. Adjusted Tangible Book Value Per Share Adjusted tangible common equity, which is total common equity less goodwill and other intangibles, after exclusion of net unrealized losses on available-for-sale debt securities recognized as part of accumulated other comprehensive loss, divided by common shares outstanding. Adjusted Return on Average Common Equity Ratio Net income divided by adjusted average common equity, which is average total common equity, after exclusion of average net unrealized losses on available-for-sale debt securities recognized as part of accumulated other comprehensive loss.
