About First BanCorp.

First BanCorp. operates as the bank holding for FirstBank Puerto Rico (FirstBank) that provides full-service commercial and consumer banking services, mortgage banking services, automobile financing, insurance agency services, and other financial products and services in Puerto Rico, the U.S., the USVI and the BVI. The bank is subject to the supervision, examination and regulation of both the Office of the Commissioner of Financial Institutions of Puerto Rico (OCIF) and the FDIC. Deposits are insured through the FDIC Deposit Insurance Fund (the DIF). In addition, within the bank, its USVI operations are subject to regulation and examination by the USVI Division of Banking Insurance, and Financial Regulation; its BVI operations are subject to regulation by the BVI Financial Services Commission; and its operations in the state of Florida are subject to regulation and examination by the Florida Office of Financial Regulation. The Consumer Financial Protection Bureau (CFPB) regulates the bank’s consumer financial products and services. FirstBank Insurance Agency is subject to the supervision, examination and regulation of the Office of the Insurance Commissioner of the Commonwealth of Puerto Rico and the Division of Banking and Insurance Financial Regulation in the USVI. FirstBank conducts its business through its main office located in San Juan, Puerto Rico, banking branches in Puerto Rico, banking branches in the USVI and the BVI, and banking branches in the state of Florida. FirstBank has six wholly-owned subsidiaries with operations in Puerto Rico: First Federal Finance Corp. (doing business as Money Express La Financiera), a finance company specializing in the origination of small loans with offices in Puerto Rico; First Management of Puerto Rico, a Puerto Rico corporation, which holds tax-exempt assets; FirstBank Overseas Corporation, an international banking entity (an IBE) organized under the International Banking Entity Act of Puerto Rico; two companies engaged in the operation of certain real estate owned(OREO) properties and limited liability corporation organized in 2022 under the laws of the Commonwealth of Puerto Rico and Puerto Rico Tax Incentive Code (Act 60 of 2019), which commenced operations in 2023 and engages in qualified investing and lending transactions. The company is a publicly owned financial holding company that is subject to regulation, supervision and examination by the Federal Reserve Board. Segments The company operates through six segments: Commercial and Corporate Banking; Mortgage Banking; Consumer (Retail) Banking; Treasury and Investments; United States Operations; and Virgin Islands Operations. Commercial and Corporate Banking The Commercial and Corporate Banking segment consists of the company’s lending and other services for large customers represented by specialized and middle-market clients and the government sector in the Puerto Rico region. The Commercial and Corporate Banking segment offers commercial loans, including commercial real estate and construction loans, as well as other products, such as cash management and business management services. A substantial portion of the commercial and corporate banking portfolio is secured by the underlying real estate collateral and the personal guarantees of the borrowers. Mortgage Banking The Mortgage Banking segment consists of the origination, sale and servicing of a variety of residential mortgage loan products and related hedging activities in the Puerto Rico region. Originations are sourced through different channels, such as FirstBank branches and purchases from mortgage bankers, and in association with new project developers. The Mortgage Banking segment focuses on originating residential real estate loans, some of which conform to the U.S. Federal Housing Administration (the “FHA”), the U.S. Veterans Administration (the VA) and the U.S. Department of Agriculture Rural Development (the RD) standards. Originated 6loans that meet the FHA’s standards qualify for the FHA’s insurance program whereas loans that meet the standards of the VA or the RD are guaranteed by those respective federal agencies. Mortgage loans that do not qualify under the FHA, the VA or the RD programs are referred to as conventional loans. Conventional real estate loans can be conforming or non-conforming. Conforming loans are residential real estate loans that meet the standards for sale under the U.S. Federal National Mortgage Association (FNMA) and the U.S. Federal Home Loan Mortgage Corporation (FHLMC) programs. Loans that do not meet FNMA or FHLMC standards are referred to as non-conforming residential real estate loans. The Mortgage Banking segment also acquires and sells mortgages in the secondary markets. Residential real estate conforming loans are sold to investors like FNMA and FHLMC. Most of the Corporation’s residential mortgage loan portfolio consists of fixed-rate, fully amortizing, full documentation loans. The Corporation has commitment authority to issue Government National Mortgage Association (GNMA) mortgage-backed securities (MBS). Under this program, the Corporation has been selling FHA/VA mortgage loans into the secondary market since 2009. Consumer (Retail) Banking The Consumer (Retail) Banking segment consists of the company’s consumer lending and deposit-taking activities conducted mainly through FirstBank’s branch network, ATMs and online banking in the Puerto Rico region. Loans to consumers include auto loans, finance leases, boat and personal loans, credit card loans, and lines of credit. Deposit products include interest-bearing and non-interest-bearing checking and savings accounts, Individual Retirement Accounts (IRAs) and retail certificates of deposit (retailCDs). Retail deposits gathered through each branch of FirstBank’s retail network serve as one of the funding sources for its lending and investment activities. This segment also includes the company’s insurance agency activities in the Puerto Rico region through FirstBank Insurance Agency. Treasury and Investments The Treasury and Investments segment is responsible for the company’s treasury and investment management functions. The treasury function, which includes funding and liquidity management, lends funds to the Commercial and Corporate Banking, the Mortgage Banking, the Consumer (Retail) Banking and the United States Operations segments to finance their respective lending activities and borrows from those segments. The Treasury and Investments segment also obtains funding through brokered deposits, advances from the FHLB, and repurchase agreements involving investment securities, among other possible funding sources. United States Operations The United States Operations segment consists of all banking activities conducted by FirstBank on the U.S. mainland. FirstBank provides a wide range of banking services to individual and corporate customers, primarily in southern Florida through eight banking branches. The United States Operations segment offers an array of both consumer and commercial banking products and services. Consumer banking products include checking, savings and money market accounts, retail CDs, internet banking services, residential mortgages, home equity loans, and lines of credit. Retail deposits, as well as FHLB advances and brokered CDs assigned to this segment, serve as funding sources for its lending activities. Commercial banking services include checking, savings and money market accounts, retail CDs, internet banking services, cash management services, remote deposit capture, and automated clearing house (ACH) transactions. Loan products include the traditional commercial and industrial (C&I) and commercial real estate products, such as lines of credit, term loans and construction loans. Virgin Islands Operations The Virgin Islands Operations segment consists of all banking activities conducted by FirstBank in the USVI and the BVI regions, including consumer and commercial banking services, with a total of eight banking branches serving the islands of St. Thomas, St.Croix, and St. John in the USVI, and the island of Tortola in the BVI. The Virgin Islands Operations segment is driven by its consumer, commercial lending and deposit -taking activities. Loans to consumers include auto loans, lines of credit, and personal and residential mortgage loans. Deposit products include interest-bearing and non-interest-bearing checking and savings accounts, IRAs, and retail CDs. Retail deposits gathered through each branch serve as the funding sources for its own lending activities. Investment Portfolio As of December 31, 2023, the company’s investment portfolio included U.S. government and agencies obligations; Puerto Rico government obligations; MBS (Residential and Commercial); and Others. Deposits As of December 31, 2023, the company’s deposits included interest-bearing checking accounts, interest-bearing saving accounts, time deposits, and non-interest-bearing deposits. Supervision and Regulation The company is registered under the Bank Holding Company Act of 1956, as amended (the Bank Holding Company Act), and is subject to ongoing supervision, regulation and examination by the Federal Reserve Board. The company is required to file with the Federal Reserve Board periodic and annual reports and other information concerning its own business operations and those of its subsidiaries. The Bank Holding Company Act also permits a bank holding company to elect to become a financial holding company and engage in a broader range of financial activities. The company has elected to be a financial holding company under the Bank Holding Company Act. The company and the bank must be well-capitalized and well-managed for regulatory purposes, and the bank must earn satisfactory or better ratings on its periodic Community Reinvestment Act (CRA)examinations for the company to preserve its financial holding company status. The bank is subject to regulation and examination by the OCIF, the CFPB and the FDIC, and is subject to comprehensive federal and state (Commonwealth of Puerto Rico) regulations that regulate, among other things, the scope of their businesses, their investments, their reserves against deposits, the timing and availability of deposited funds, and the nature and amount of collateral for certain loans. The OCIF, the CFPB and the FDIC periodically examine the bank to test its conformance to safe and sound banking practices and compliance with various statutory and regulatory requirements. As a regulated depository institution, the bank is subject to the Bank Secrecy Act, which imposes a variety of reporting and other requirements, including the requirement to file suspicious activity and currency transaction reports that are designed to assist in the detection and prevention of money laundering, terrorist financing and other criminal activities. Regulations implementing the Bank Secrecy Act and the USA PATRIOT Act are published and primarily enforced by the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury. Failure of a financial institution, such as the company or the bank, to comply with the requirements of the Bank Secrecy Act or the USA PATRIOT Act could have serious legal and reputational consequences for the institution, including the possibility of regulatory enforcement or other legal actions, such as significant civil monetary penalties. The company is also required to comply with federal economic and trade sanctions requirements enforced by the Office of Foreign Assets Control (OFAC), a bureau of the U.S. Treasury. Certain transactions between FDIC-insured banks financial institutions, such as FirstBank and its affiliates are governed by Sections23A and 23B of the Federal Reserve Act and by Federal Reserve Regulation W. Generally, Sections 23A and 23B of the Federal Reserve Act limit the extent to which the bank or its subsidiaries may engage in covered transactions with any one affiliate to an amount equal to 10% of such bank’s capital stock and surplus, and contain an aggregate limit on all such transactions with all affiliates to an amount equal to 20% of such bank’s capital stock and surplus and require that all covered transactions be on terms that are substantially the same, or at least as favorable to the bank or affiliate, as those provided to a non-affiliate. The bank is subject to FDIC deposit insurance assessments, which increased for all banks, including the bank, following the increase in deposit insurance coverage to up to $250,000 per customer and the FDIC’s expanded authority to increase insurance premiums implemented by the Dodd-Frank Act. The principal activities of FDIC-insured, state-chartered banks, such as the bank, are generally limited to those that are permissible for national banks. The bank is a member of the FHLB system. The FHLB system consists of eleven regional FHLBs governed and regulated by the Federal Housing Finance Agency. The bank is a member of the FHLB of New York and, as such, is required to acquire and hold shares of capital stock in the FHLB of New York in an amount calculated in accordance with the requirements set forth in applicable laws and regulations. The bank is incompliance with the stock ownership requirements of the FHLB of New York. Because of the bank’s status as an Federal Deposit Insurance Corporation (FDIC)-insured bank, as defined in the Bank Holding Company Act, the company, as the owner of its common stock, is subject to certain restrictions and disclosure obligations under various federal laws, including the Bank Holding Company Act and the Change in Bank Control Act (the CBCA). As a commercial bank organized under the laws of the Commonwealth of Puerto Rico, the bank is subject to supervision, examination and regulation by the commissioner of OCIF (the Commissioner) pursuant to the Puerto Rico Banking Law of 1933, as amended (the Banking Law). The business and operations of FirstBank International Branch (FirstBank IBE or the IBE division of the bank) and FirstBank Overseas Corporation (the IBE subsidiary of the bank) are subject to supervision and regulation by the Commissioner. FirstBank Insurance Agency is registered as an insurance agency with the Insurance Commissioner of Puerto Rico and is subject to regulations issued by the Insurance Commissioner and the Division of Banking and Insurance Financial Regulation in the United States Virgin Islands (USVI) relating to, among other things, the licensing of employees and sales and solicitation and advertising practices, and by the Federal Reserve as to certain consumer protection provisions mandated by the Gramm-Leach-Bliley Act and its implementing regulations. In addition to FDIC and CFPB regulations, the bank is subject to the rules and regulations of the FHA, VA, FNMA, FHLMC, GNMA, and the U.S. Department of Housing and Urban Development (HUD) with respect to originating, processing, selling and servicing mortgage loans and the issuance and sale of MBS. Moreover, lenders such as the bank are required annually to submit audited financial statements to the FHA, VA, FNMA, FHLMC, GNMA and HUD and each regulatory entity has its own financial requirements. The bank’s affairs are also subject to supervision and examination by the FHA, VA, FNMA, FHLMC, GNMA and HUD at all times to assure compliance with applicable regulations, policies and procedures. History First BanCorp. was founded in 1948. The company was incorporated in 1998.