First Bancorp Files 2023 Annual Report on Form 10-K

TL;DR

<b>First Bancorp has filed its 2023 annual report (10-K) detailing financial performance and operational segments.</b>

AI Summary

FIRST BANCORP /PR/ (FBP) filed a Annual Report (10-K) with the SEC on February 28, 2024. First Bancorp filed its 2023 Form 10-K on February 28, 2024, reporting on its fiscal year ending December 31, 2023. The filing covers the parent company and its operations, including segments like United States Operations, Treasury and Investments, Consumer Retail Banking, Commercial and Corporate, and Virgin Islands Operations. Key financial data points such as total assets and total debt are included for the fiscal year 2023. The report details various financial instruments and disclosures, including fair value disclosures for Level 2 and Level 3 inputs. Specific disclosures are made regarding residential mortgage-backed securities and conventional loans, with data for the fiscal year 2023.

Why It Matters

For investors and stakeholders tracking FIRST BANCORP /PR/, this filing contains several important signals. This 10-K filing provides a comprehensive overview of First Bancorp's financial health and strategic operations for the fiscal year 2023, crucial for investors assessing its performance and future outlook. The detailed segment reporting and financial instrument disclosures offer insights into the company's diverse business activities and risk exposures, particularly in its banking operations.

Risk Assessment

Risk Level: medium — FIRST BANCORP /PR/ shows moderate risk based on this filing. The company operates in the banking sector, which is subject to significant regulatory oversight and economic fluctuations, as evidenced by the detailed disclosures on loans and securities.

Analyst Insight

Investors should review the detailed segment performance and risk factor sections to understand First Bancorp's strategic positioning and potential challenges in the current economic environment.

Key Numbers

• 2023-12-31 — Fiscal Year End (Reporting period)
• 2024-02-28 — Filing Date (Date of submission)
• 219 — Public Document Count (Number of documents in the filing)
• 0001057706-24-000004 — Accession Number (Unique identifier for the filing)

Key Players & Entities

• FIRST BANCORP /PR/ (company) — Filer name
• FBP (company) — Ticker symbol
• 2023-12-31 (date) — Fiscal year end
• 2024-02-28 (date) — Filing date
• PR (location) — State of incorporation
• 7877298200 (phone) — Business phone number

FAQ

Industry Context

First Bancorp operates within the commercial banking industry, a sector characterized by its sensitivity to interest rate changes, economic conditions, and regulatory policies.

Regulatory Implications

As a financial institution, First Bancorp is subject to extensive regulation by federal and state authorities, impacting its lending practices, capital requirements, and operational compliance.

What Investors Should Do

1. Review First Bancorp's detailed financial statements and notes for the fiscal year 2023.
2. Analyze the performance of each reported operating segment to understand revenue drivers and potential risks.
3. Examine the risk factors section for any new or evolving risks that could impact the company's future performance.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K filing.
• 2024-02-28: Filing Date — Date the 10-K was officially submitted to the SEC.

Year-Over-Year Comparison

This filing represents the annual 10-K report for the fiscal year 2023, providing updated financial and operational data compared to previous filings.

Key Financial Figures

• $0.10 — ange on which registered Common Stock ($0.10 par value) FBP New York Stock Exchang
• $12.22 — 201,179 based on the closing price of $12.22 per share of the registrant's common s
• $18.9 b — the Corporation had total assets of $18.9 billion, including loans of $12.2 billion
• $12.2 b — of $18.9 billion, including loans of $12.2 billion, total deposits of $16.6 billion
• $16.6 b — ans of $12.2 billion, total deposits of $16.6 billion, and total stockholders' equity o
• $1.5 billion — lion, and total stockholders' equity of $1.5 billion. The Corporation has two wholly-ow

Filing Documents

• fbp2023123110k.htm (10-K) — 12441KB
• exhibit41.htm (EX-4) — 30KB
• exhibit102.htm (EX-10) — 68KB
• exhibit211.htm (EX-21) — 5KB
• exhibit231.htm (EX-23) — 4KB
• exhibit311.htm (EX-31) — 23KB
• exhibit312.htm (EX-31) — 24KB
• exhibit321.htm (EX-32) — 6KB
• exhibit322.htm (EX-32) — 6KB
• exhibit97.htm (EX-97) — 81KB
• fbp2023123110kp39i0.gif (GRAPHIC) — 17KB
• 0001057706-24-000004.txt (&nbsp;) — 50575KB
• fbp-20231231.xsd (EX-101.SCH) — 204KB
• fbp-20231231_cal.xml (EX-101.CAL) — 181KB
• fbp-20231231_def.xml (EX-101.DEF) — 1548KB
• fbp-20231231_lab.xml (EX-101.LAB) — 2214KB
• fbp-20231231_pre.xml (EX-101.PRE) — 1954KB
• fbp2023123110k_htm.xml (XML) — 12935KB

of this Annual Report on Form 10-K; (b) all directors

Part III of this Annual Report on Form 10-K; (b) all directors of the registrant; and (c) each shareholder, including the registrant's employee benefit plans but excluding shareholders that file on Schedule 13G, known to the registrant to be the beneficial owner of 5% or more of the outstanding shares of common stock of the registrant as of June 30, 2023. The registrant's response to this item is not intended to be an admission that any person is an affiliate of the registrant for any purposes other than this response. Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: 167,317,829 shares as of February 21, 2024. Documents incorporated by reference: Portions of the definitive proxy statement relating to the registrant's annual meeting of stockholders scheduled to be held on May 23, 2024 are incorporated by reference in response to Items 10, 11, 12, 13 and 14 of Part III of this Form 10-K. 2 FIRST BANCORP. 2023 ANNUAL REPORT ON FORM 10-K TABLE OF CONTENTS PART I Item 1.

Business

Business 5 Item 1A.

Risk Factors

Risk Factors 21 Item 1B. Unresolved Staff Comments 35 Item 1C. Cybersecurity 35 Item 2.

Properties

Properties 36 Item 3.

Legal Proceedings

Legal Proceedings 36 Item 4. Mine Safety Disclosures 36 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 37 Item 6. [Reserved] 40 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 41 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 114 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 115 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 235 Item 9A.

Controls and Procedures

Controls and Procedures 235 Item 9B. Other Information 235 Item 9C. Disclosure regarding Foreign Jurisdictions that Prevent Inspections 235 PART III Item 10. Directors, Executive Officers and Corporate Governance 236 Item 11.

Executive Compensation

Executive Compensation 236 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 236 Item 13. Certain Relationships and Related Transactions, and Director Independence 236 Item 14. Principal Accountant Fees and Services 237 PART IV Item 15. Exhibits and Financial Statement Schedules 237 Item 16. Form 10-K Summary 237 Exhibit Index

SIGNATURES

SIGNATURES 3

Forward-Looking Statements

Forward-Looking Statements This Annual Report on Form 10-K (this "Form 10-K") contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are subject to the safe harbor created by such sections. When used in this Form 10-K or future filings by First BanCorp. (the "Corporation," "we," "us," or "our") with the U.S. Securities and Exchange Commission (the "SEC"), in the Corporation's press releases or in other public or stockholder communications made by the Corporation, or in oral statements made on behalf of the Corporation by, or with the approval of, an authorized executive officer of the Corporation, the words or phrases "would," "intends," "will," "expect," "should," "plans," "forecast," "anticipate," "look forward," "believes," and other terms of similar meaning or import, or the negatives of these terms or variations of them, in connection with any discussion of future operating, financial or other performance are meant to identify "forward-looking statements." The Corporation cautions readers not to place undue reliance on any such "forward-looking statements," which speak only as of the date made or, with respect to such

forward-looking statements

forward-looking statements contained in this Form 10-K, the date hereof, and advises readers that any such

forward-looking statements

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, could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. Factors that could cause results to differ materially from those expressed in, or implied by, the Corporation's forward-looking statements include, but are not limited to, risks described or referenced in Part I, Item 1A, "Risk Factors," and the following: the effect of the current interest rate environment or changes in interest rates 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 effect 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, including failures or rumored failures of other depository institutions, and actions taken by governmental agencies to stabilize the financial system, 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 and monetary policies and regulations of the United States ("U.S.") federal government, the Puerto Rico government and other governments, including those determined by the Board of the Gov

Business

Business GENERAL First BanCorp. is a publicly owned financial holding company that is subject to regulation, supervision and examination by the Federal Reserve Board. The Corporation was incorporated under the laws of the Commonwealth of Puerto Rico in 1948 to serve as the bank holding company for FirstBank. Through its subsidiaries, including FirstBank, the Corporation 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. As of December 31, 2023, the Corporation had total assets of $18.9 billion, including loans of $12.2 billion, total deposits of $16.6 billion, and total stockholders' equity of $1.5 billion. The Corporation has two wholly-owned subsidiaries: FirstBank and FirstBank Insurance Agency, Inc. ("FirstBank Insurance Agency"). FirstBank is a Puerto Rico-chartered commercial bank, and FirstBank Insurance Agency is a Puerto Rico-chartered insurance agency. FirstBank 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 FirstBank, the Bank's 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 FirstBank's consumer financial products and services. FirstBank Insurance Agency is subject to t

properties

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. For a discussion of certain significant events that have occurred in the year ended December 31, 2023, please refer to "Significant Events" included in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Form 10-K. BUSINESS SEGMENTS The Corporation has six reportable segments: Commercial and Corporate Banking; Mortgage Banking; Consumer (Retail) Banking; Treasury and Investments; United States Operations; and Virgin Islands Operations. These segments are described below, as well as in Note 27 – "Segment Information" to the audited consolidated financial statements included in Part II, Item 8 of this Form 10-K. Commercial and Corporate Banking The Commercial and Corporate Banking segment consists of the Corporation'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

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 6 loans 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

business

business ethics and compliance; responsible marketing and sales practices; ESG integration in credit analysis; data security and cyber management; people and culture; community impact; and environmental stewardship. ESG Governance The Corporation's Board of Directors and executive leadership team share responsibilities relating to oversight of our ESG policies and practices. In February 2022, the Corporate Governance and Nominating Committee of the Board of Directors amended its charter to include oversight responsibility of ESG matters, and it has primary oversight of ESG policies, practices and disclosures. Nonetheless, other committees of the Corporation's Board of Directors also play a role in ESG oversight in matters related to risk and cybersecurity management, human capital management, investment management and credit risk management. As part of the ESG governance structure set forth in FirstBanCorp.'s Sustainability Policy, which was approved by the Corporation's Board of Directors in 2022, the responsibility of day-to-day management of our ESG framework and strategy has been delegated to a management-level ESG Committee, comprised of leaders from different areas, such as Human Resources, Enterprise Risk Management, Strategic Planning and Investor Relations, Legal and Corporate Affairs, Marketing, Compliance, Finance, and Corpo