FIRST BANCORP PR

registrants to

describe the

board

of

directors’

of

risks

from

threats

and

role

and

expertise

in

assessing

and

material risks from such threats. These disclosures were included in Part I, Item

1C, “Cybersecurity” to this Form 10-K.

Limitations on Transactions with Affiliates

and Insiders

Certain transactions between FDIC-insured

banks financial institutions such

as FirstBank and its affiliates

are governed by Sections

23A and

23B of the

Federal Reserve Act

and by

Regulation W.

An affiliate

of a bank

is, in general,

any corporation

or entity

that controls,

is controlled

by,

or is

under common

control with

the bank,

parent holding

company and

any companies that are controlled by such holding company.

Sections 23A and 23B of

the Federal Reserve Act (i)

limit the extent to which

the bank or its subsidiaries

may engage in

transactions”

with

any

one

to

an

amount

equal

to

10%

of

such

capital

stock

and

surplus,

and

contain

an

aggregate limit

on all

such transactions

with all

affiliates to

an amount

equal to 20%

of such

capital stock and

surplus and

(ii)

require that

all “covered

transactions” be

on terms

substantially the

same, or

as favorable

to the

bank or

affiliate,

as

those

to

a

non-affiliate.

The

term

transaction”

the

making

of

loans,

purchase

of

assets,

of

a

guarantee, credit

derivatives, securities

lending and

other similar

transactions entailing

the provision

support by

the bank

to an affiliate. In

addition, loans or other extensions

of credit by the bank to

the affiliate are required

to be collateralized in accordance

with the requirements set forth in Section 23A of the Federal Reserve Act.

In

Sections

22(h)

and

(g)

of

the

Federal

Reserve

Act,

through

Regulation

O,

place

on

commercial bank loans to executive officers,

directors, and principal stockholders of

the bank and its affiliates. Under

Section 22(h) of

the Federal Reserve

Act, bank loans to

a director, an

executive officer,

a greater than 10%

stockholder of the

bank, and certain related

interests of these persons,

may not exceed, together

with all other outstanding

loans to such persons

and affiliated interests,

limit on loans

to one borrower,

which is generally

equal to 15%

of the bank’s

unimpaired capital and

surplus in the

case of loans

that

are not fully secured,

and an additional 10% of

the bank's unimpaired capital

and unimpaired surplus in

the case of loans that

are fully

secured by

readily marketable

collateral having

a market

value at

least equal

to the

the loan.

Section 22(h)

of the

Federal

Reserve Act also requires

that loans to directors,

executive officers, and

principal stockholders be made

on terms that are substantially

as offered

in comparable

transactions to

other persons

and also

requires prior

board approval

for certain

loans. In

the

amount

of

extensions

of

credit

by

a

bank

to

insiders

cannot

exceed

the

unimpaired

capital

and

surplus.

Furthermore, Section 22(g) of the Federal Reserve Act places additional

restrictions on loans to executive officers.

The federal banking agencies have

adopted interagency guidance governing

incentive-based compensation programs,

which applies

to

all

banking

regardless

of

asset

size.

This

uses

a

principles-based

to

ensure

that

compensation arrangements

appropriately tie

rewards to

longer-term performance

and do

not undermine

the safety

and soundness

of

banking organizations

or create

undue risks

to the

financial system.

The interagency

guidance is

three major

principles:

(i)

balanced risk-taking

incentives; (ii) compatibility

with effective

controls and

risk management; and

(iii) strong

corporate governance.

The guidance further provides

that, where appropriate, the

banking agencies will take supervisory

or enforcement action to ensure

that

material deficiencies that pose a threat to the safety and soundness of the organization

are promptly addressed.

In May 2016, the federal financial regulators proposed

regulations (first proposed in 2011) governing

incentive-based compensation

practices at

covered

banking institutions,

which

would

among

others,

with assets

of

$1 billion

or

greater.

Portions of these

proposed rules would

apply to the

Corporation and FirstBank.

Those applicable provisions

would generally

(i)

types

and

of

that

encourage

inappropriate

risk

because

they

are

“excessive”

or

“could

lead

to

loss”

at

the

banking

institution;

(ii)

require

arrangements to

adhere to

three basic

principles: (1)

a balance

between risk

and reward;

(2) effective

and controls;

and

(3)

governance;

and

(iii)

require

board

of

(or

committee)

and

recordkeeping

and

to

the

banking

primary

agency.

The

nature

and

substance

of

any

final

action

to

adopt

these

proposed rules, and the timing of any such action, are not known at this time.

In October

SEC finalized

a rule

that directs

stock exchanges

to require

listed companies

to implement

clawback policies

to recover

incentive-based compensation

from current

or former

executive officers

in the

certain financial

restatements, and

to,

among

other

things,

file

their

clawback

as

Exhibit

of

Form

10-K.

Our

Clawback

Policy is compliant with NYSE’s listing

standards pursuant to this new rule, and is filed as Exhibit 97.1 to this Form 10-K.

Prompt Corrective Action

The

“prompt

action”

of

the

FDIA

require

the

federal

bank

to

take

prompt

action

against

any

insured

that

is

undercapitalized.

The

FDIA

establishes

five

capital

categories:

well-

capitalized,

capitalized,

undercapitalized,

undercapitalized,

and

critically

undercapitalized.

Well-capitalized

insured depository institutions significantly exceed the required minimum level

for each relevant capital measure.

A bank’s

capital category

may not

constitute

an accurate

representation

of the

overall financial

or prospects

of a

bank,

such

as

the

Bank,

and

should

be

in

with

other

the

and

results of operations of such bank.

Deposit Insurance

is

subject

to

FDIC

deposit

which

for

all

banks,

the

in

deposit

to

up

to

$250,000

per

and

the

FDIC’s

to

premiums implemented

by the

Dodd-Frank Act.

The FDIA

further requires

designated reserve

ratio for

the DIF

for any

year

not be

1.35% of

estimated insured

deposits or

the comparable

percentage of

the new

deposit assessment

base.

was required

to take

the necessary

actions for

ratio to

reach 1.35%

of estimated

insured deposits

by September

30, 2020.

managed to

reach the

goal early,

achieving a

reserve ratio

of 1.36%

in September

2018. However,

in the

third

2020, the

FDIC announced

reserve ratio

of the

DIF fell

nine basis

points between

the first

and second

quarters of

2020,

from 1.39%

to 1.30%.

The decline

was attributed

to an

surge

in deposits.

a plan

that

is

expected to restore

the DIF to

at least 1.35%

within eight years,

as required by

the FDIA. Under

the plan, the

FDIC will maintain

the

current

of assessment

rates for

all banks;

monitor

deposit

balance

trends,

potential losses

and

other

factors

that

affect

the

reserve

ratio;

and

provide

updates

to

its

loss

and

income

at

least twice

a

year.

The

FDIC has

also

adopted

a

final

rule

raising its

industry target

reserves to

insured deposits

to 2%,

65 basis

points above

the statutory

minimum, but

has

indicated that it does not project that goal to be met for several years.

In

October

2022,

the

FDIC

adopted

a

final

rule,

to

all

insured

to

initial

base

deposit

insurance assessment rate schedules

uniformly by 2 basis points,

beginning in the first quarterly

assessment period of 2023.

also

concurrently

the

designated

reserve

ratio

for

the

DIF

at

2%

for

The

in

rate

is

intended to increase

the likelihood that

the reserve ratio

of the DIF

reaches the statutory

minimum of

1.35% by the

statutory deadline

of September 30, 2028. The new assessment rate schedules

will remain in effect unless and until the reserve

ratio meets or exceeds 2%

to support growth

in the DIF

and progress

toward the FDIC’s

long-term goal

of a 2%

designated reserve

ratio. Progressively

lower

rate

will

take

effect

when

ratio

reaches

2%

and

again

when

it

reaches

2.5%.

For

2023,

the

Corporation recognized an increase of

approximately $2.4 million in deposit insurance

expense, when compared to 2022, as

a result of

the increase on the initial base deposit insurance assessment rate.

In November 2023, the

FDIC approved a final rule

to implement a special assessment

to recover the loss to

the DIF associated with

protecting uninsured

depositors following

the closure

of Silicon Valley

Signature Bank during

the first half

Under

the final

rule,

will

collect the

at a

rate of

3.36

first

assessment period

of 2024 (i.e,

January 1 through

March 31, 2024)

with an invoice

payment date

of June 28,

2024, and will

to

collect

special

assessments

for

an

total

of

eight

The

base

for

the

special

is

equal to the

estimated uninsured deposits

reported for the

reporting period, adjusted

to exclude the

first $5 billion

of such amount. In association with this final rule,

during the fourth quarter of 2023, the Corporation

recorded a charge of $6.3 million

in the

as part

of “FDIC

expenses,” which

reflects the

expected total

payment to

be made

to the

FDIC as

31, 2023.

retains the

cease collection

early,

collection period

beyond the

eight-quarter collection

period, or

impose an

additional shortfall

on a

one-time basis

after the receiverships for the two banks are terminated.

FDIC Insolvency Authority

Under

Puerto

Rico banking

laws, the

OCIF may

appoint

as conservator

or receiver

of a

failed or

failing

FDIC-insured

Puerto Rican bank, and

the FDIA authorizes the FDIC

to accept such an appointment.

In addition, the FDIC has

broad authority under

the FDIA

to appoint

itself as

conservator

or receiver

of a

failed or

failing state

bank, including

Rican bank.

If the

FDIC is

conservator

or

receiver

of

a

bank

upon

the

insolvency

or

the

of

other

events,

the

FDIC

may

sell

or

transfer some, part or all

of a bank’s

assets and liabilities to another bank,

or liquidate the bank and pay

out insured depositors, as well

as uninsured

depositors and

other creditors

to the

extent of

the closed

available assets.

As part

of its

insolvency authority,

the

FDIC has

the authority,

things, to

take possession

of and

administer the

receivership

estate, pay

out estate

claims,

and

repudiate or

disaffirm certain

types of

contracts to

bank was

a party

if the

FDIC believes

such contract

is burdensome

and

its disaffirmance

will aid

in

the

administration

of the

receivership.

The

FDIA

that, in

the

event

of

the

liquidation

or

other

resolution of

an insured

depository institution,

Bank, the

claims of

depositors of

the institution

(including the

claims of

the

FDIC

as

subrogee

of

insured

depositors)

and

certain

claims

for

of

the

FDIC

as

a

receiver

would

have

priority over

other general

unsecured claims

against the

institution. If

were to

fail, insured

and uninsured

depositors, along

FDIC, would

have priority

in payment

ahead of

unsecured, non-deposit

creditors, including

to

any extensions of credit they have made to such insured depository institution.

Activities and Investments

The

of

FDIC-insured,

state-chartered

banks,

such

as

are

limited

to

those

that

are

permissible for national

banks. Similarly,

under regulations dealing

with equity investments, an

insured state-chartered bank

may not directly

or indirectly acquire or

retain any equity

investments of a type,

or in an amount,

that is not permissible

for a national

bank.

Federal Home Loan Bank System

a member

of the

FHLB system.

The FHLB

system consists

of eleven

regional FHLBs

governed and

regulated by

the

Federal

Housing

Finance

Agency.

The

FHLBs

serve

as

reserve

or

credit

facilities

for

member

within

their

regions.

FirstBank 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.

FirstBank is in

with

the

stock

of

the

FHLB

of

New

York.

All

loans,

and

other

extensions

of

credit

made

by

the

FHLB

to

are

secured

by

a

portion

of

loan

or

certain

other

investments and the capital stock of the FHLB held by FirstBank.

The board of

directors of each

FHLB can increase

the minimum investment

requirements if it

has concluded that

additional capital

is required to meet its own regulatory capital requirements. Any

increase in the minimum investment requirements outside of specified

ranges requires

the approval of

the Federal Housing

Finance Agency.

Because the extent

of any obligation

to increase our

in any of

the FHLBs depends

entirely upon

the occurrence of

a future

event, the

amount of any

future investment

in the capital

stock

of the FHLBs is not determinable.

Ownership and Control

Because

of

status

as

an

FDIC-insured

bank,

as

defined

in

the

Bank

Holding

Company

Act,

the

as

the

owner of

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”).

Regulations

adopted

to

the

Bank

Holding Company Act and

the CBCA generally require prior

Federal Reserve Board or other federal

banking agency approval or non-

objection for an acquisition

of control of an “insured

institution” (as defined in

the Act) or holding

company thereof by any person

(or

persons acting in

concert). Control is deemed

to exist if, among

other things, a person

(or group of persons

acting in concert)

acquires

25% or more

of any class of

voting stock of

an insured institution

or holding company

thereof. Under the CBCA,

control is presumed

to exist

rebuttal if

a person

(or group

of persons

acting in

concert) acquires

10% or

more of

any class

of voting

stock and

either (i) the

corporation has

registered securities under

Section 12

of the Exchange

Act, or (ii)

no person (or

group of persons

acting

in

concert)

will own,

control

or

hold

the

power

to

vote

a

greater

percentage

of that

class of

voting

immediately

after

the

transaction.

The

concept

of

acting

in

concert

is

broad

and

subject

to

certain

rebuttable

presumptions,

among

others,

that

relatives, business partners,

management officials,

affiliates and

others are

presumed to

be acting in

concert with

each other

and their

businesses. The regulations of the FDIC implementing the CBCA are generally

similar to those described above.

Rico Banking

Law requires

the approval

of the

OCIF for

control of

Rico bank.

See “Puerto

Rico

Banking Law” below for further detail.

Standards for Safety and Soundness

The

FDIA

the

FDIC

and

other

federal

bank

to

prescribe

of

safety

and

soundness.

Bank

have

various

remedies

if

they

that

the

capital

resources,

asset

prospects, management,

aspects of

a banking

organization’s

unsatisfactory.

The regulators

may also

take action

if they

organization or

its management

is violating

or has

violated any

law or

regulation. The

have

the

power

to,

among

other

things,

unsafe

or

unsound

practices,

require

affirmative

actions

to

correct

any

violation

or

practice,

issue

orders

that

can

be

judicially

enforced,

direct

in

direct

the

sale

of

or

other

assets,

limit

and

distributions,

restrict

growth,

assess

civil

penalties,

remove

officers

and

directors, and terminate deposit insurance.

Engaging in

unsafe or

unsound practices

or failing

with applicable

laws, regulations,

and supervisory

agreements could

subject

the

its

subsidiaries,

and

their

directors,

and

institution-affiliated

parties

to

the

remedies

described above,

sanctions. In

addition, the

FDIC may

terminate a

upon a

finding that

financial condition is unsafe or unsound

or that the bank has engaged in unsafe

or unsound practices or has violated

an applicable rule,

regulation, order, or condition enacted

or imposed by the bank’s regulatory

agency.

Brokered Deposits

FDIC regulations

adopted

FDIA govern

the receipt

of

brokered deposits

by banks.

Well-capitalized

institutions are

not

subject

to

on

while

capitalized

are

able

to

accept,

renew

or

rollover

deposits only

with a

waiver from

and subject

restrictions on

paid on

such deposits.

Undercapitalized

are

not

to

accept

In

October

2020,

the

FDIC

adopted

revisions

to

its

deposit

regulations that became

effective on April

1, 2021, with

full compliance extended

to January 1,

2022. For brokered

deposits, the final

rule established

a new framework

for analyzing

certain parts of

the “deposit

broker” definition,

including a new

interpretation for

the

“primary purpose” exception and the

business relationships that meet the exception.

Pursuant to this revision, during the fourth

quarter

of 2021, certain non-maturity deposits previously reported as brokered

deposits were recharacterized as non-brokered deposits.

Puerto Rico Banking Law

As

a

bank

under

the

laws

of

the

of

Puerto

Rico,

is

subject

to

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 Banking Law

contains various provisions

relating to FirstBank

and its affairs,

including its incorporation

and organization,

the

rights and responsibilities of

its directors, officers and

stockholders and its corporate powers,

lending limitations, capital requirements,

and investment requirements. In addition,

the Commissioner is given extensive rule-making

power and administrative discretion under

the Banking Law.

The Banking Law requires

every bank to maintain

a legal reserve, which shall

not be less than

20% of its demand

liabilities, except

government deposits (federal,

state and municipal) that

are secured by actual

collateral. The reserve is required

to be composed of

any

of

the

or

a

combination

thereof:

(i) legal

tender

of

the

United

States;

(ii) checks

on

banks

or

trust

located in any

part of Puerto

Rico that are

to be presented

for collection during

the day following

the day on

which they are

received;

(iii) money deposited

banks provided

said deposits

are authorized

by the

Commissioner and

immediate collection;

(iv) federal

funds

sold

to any

Federal

Reserve

Bank

and

under

agreements to

resell

by the

bank

with

such funds

be repaid

to the

bank on

or before

the close

of the

next

business day;

and

(v) any

other asset

Commissioner identifies from time to time.

Section

of

the

Banking

Law

permits

Puerto

Rico

banks

to

make

loans

to

any

one

person,

firm,

partnership

or

corporation in an aggregate

amount of up to

15% of the sum of:

(i) the bank’s

paid-in capital; (ii) the bank’s

reserve fund; (iii) 50% of

retained earnings, subject

to certain limitations;

and (iv) any other

components that the

Commissioner may determine

from

time to time. If such loans are secured by

collateral worth at least 25% of the amount of the

loan, the aggregate maximum amount may

reach 33.33% of

the sum of

paid-in capital, reserve

fund, 50% of

retained earnings, subject

to certain limitations,

and such

other components

Commissioner may

determine from

time to

time. There

are no

restrictions under

the Banking

Law on

the

amount of loans that may

be wholly secured by

bonds, securities and other

evidences of indebtedness of

the government of the

United

States,

or

of

the

of

Puerto

Rico,

or

by

bonds,

not

in

default,

of

or

instrumentalities

of

the

Commonwealth of Puerto Rico.

The Banking Law

requires that Puerto Rico

commercial banks prepare

each year a balance

summary of their

operations and submit

summary

for approval

at a

regular meeting

of stockholders,

together with

an explanatory

report thereon.

The Banking

Law also requires

that at least

10% of the

yearly net income

of a Puerto

Rico commercial bank

be credited annually

to a reserve

fund

until such reserve fund is in amount equal to the total paid-in-capital of the bank.

The

Banking

Law

also

that

when

the

of

a

Puerto

Rico

bank

are

greater

than

its

receipts,

the

excess of the expenditures

over receipts must be

charged against the

undistributed profits of the

bank, and the balance,

if any,

charged

against

the

reserve

fund,

as a

thereof.

If

there

is no

reserve

fund

to cover

in

whole or

in

part,

the

outstanding amount

must be

charged against

the capital

account and

no dividend

may be declared

until said

capital has

been restored

to its original amount and the amount in the reserve fund equals 20% of the original

capital.

The Finance Board, which

is composed of nine members

from enumerated Puerto Rico

Government agencies, instrumentalities and

public

the

Commissioner,

has

the

to

regulate

the

maximum

rates

and

finance

charges

that

may be

charged on

individuals

and unincorporated

businesses in

The current

regulations of

the Finance

Board

provide that the applicable

interest rate on loans to

individuals and unincorporated

businesses, including real estate

development loans

but excluding certain

other personal and

commercial loans

secured by mortgages

on real estate

properties, is

to be determined

by free

competition. Accordingly,

the regulations do

not set a maximum

rate for charges

on retail installment

sales contracts, small

credit card purchases. Furthermore, there is no

maximum rate set for installment sales contracts involving

motor vehicles, commercial,

agricultural and industrial equipment, commercial electric appliances and

insurance premiums.

International Banking Center Regulatory Act of Puerto Rico (“IBE Act 52”)

The business and operations

of FirstBank International Branch

(“FirstBank IBE” or the “IBE

division of FirstBank”) and

Overseas Corporation (the IBE

subsidiary of FirstBank) are subject

to supervision and regulation

by the Commissioner.

FirstBank and

were

created

under

Puerto

Rico

Act

52-1989,

as

amended,

known

as

the

“International

Banking

Center

Act”

(the

IBE

Act

52),

which

for

total

Puerto

Rico

tax

on

net

income

derived

by

an

IBE

operating in

on the specific

activities identified

in the

IBE Act 52.

An IBE

that operates

as a

unit of a

bank pays

income

taxes at the corporate standard

rates to the extent that

the IBE’s net

income exceeds 20% of the bank’s

total net taxable income. Under

the IBE Act 52, certain

sales, encumbrances, assignments, mergers,

exchanges or transfers of shares,

interests or participation(s) in

the

capital

of

an

IBE

may

not be

initiated

without

the

prior

of the

Commissioner.

The

IBE

Act

and

the regulations

issued

thereunder

by

the

Commissioner

(the

“IBE

Regulations”)

limit

the

that

may

be

carried

out

by

an

IBE.

Such

activities are limited in part to persons and assets located outside of Puerto

Rico.

Pursuant to

the IBE Act

52 and the

IBE Regulations,

each of FirstBank

IBE and FirstBank

Overseas Corporation

must maintain

in

Puerto

Rico

books

and

records

of

its

in

the

course

of

IBE

and

are also

submit to

and annual

reports of

their financial

results

of

operations, including annual audited financial statements.

The IBE Act

52 empowers

to revoke

or suspend, after

notice and hearing,

a license issued

thereunder if,

among

other things, the IBE fails to

comply with the IBE Act 52, the IBE

Regulations or the terms of its license, or

if the Commissioner finds

that the business or affairs of the IBE are conducted in a manner that

is not consistent with the public interest.

In 2012, the Puerto Rico

government approved Act Number

273 (“Act 273”).

Act 273 replaces, prospectively,

IBE Act 52 with the

objective of

improving the

conditions for

conducting international

financial transactions

An IBE

existing on

of approval

of Act

273, such

as FirstBank

IBE and

FirstBank Overseas

Corporation, can

continue operating

under IBE

Act 52,

or it

can

convert

to

an

Entity

(“IFE”)

under

Act

so

it

may

broaden

its

scope

of

IFE

Activities, as

defined

below,

and

obtain

a grant

of tax

under Act

As of

of the

10-K,

FirstBank IBE and FirstBank Overseas Corporation are operating under

IBE Act 52.

16, 2024,

the Governor

Rico approved

Act 45

of 2024

which amends

the IBE

Act. The

amendments of

the

IBE Act are effective on

May 15, 2024, and, among other things,

the amendments include an increase to

the annual license fee paid by

the

IBEs

to

OCIF

from

$5

thousand

to

$25

thousand

and

amends

certain

other

The

to

evaluate the complete impact of the amendments but understands that they

do not have a material impact to the Corporation.

Puerto Rico Income Taxes

Internal Revenue

Code of

2011,

(the “PR

Tax

Code”), the

are

treated

as

taxable

and

are

not

to

file

tax

returns

and,

thus,

the

is

not

to

utilize

losses

from

one

to

offset

gains

in

another

subsidiary.

to

obtain

a

tax

benefit

from

a

net

loss

(“NOL”),

a

must

be

able

to

demonstrate

taxable

income

within

the

NOL

period.

certain

that

are organized

as limited

with

a partnership

are

treated as

pass-through entities

for Puerto

purposes. The

PR Tax

Code provides

a dividend

received deduction

of 100%

on

dividends received from “controlled” subsidiaries subject to taxation

in Puerto Rico and 85% on dividends received from other

taxable

domestic corporations.

The

has

an

tax

rate

lower

than

the

maximum

rate

in

Puerto

Rico,

which

has

mainly

from conducting

business through

certain

special

tax treatments,

doing business

through

an

IBE

unit of the

Bank and through

FirstBank Overseas Corporation,

each of which

are generally exempt

from Puerto

Rico income taxation

under IBE

Act 52,

and through

a wholly-owned

subsidiary that

engages in

certain Puerto

Rico qualified

investing activities

certain tax advantages under Act 60 of 2019.

United States Income Taxes

As

a

Puerto

Rico

First

is

treated

as

a

foreign

for

U.S.

and

USVI

income

tax

and,

accordingly,

USVI income

tax only

on its income

from sources

within the

USVI or

income

connected with

the conduct

of a

trade or

business in

those jurisdictions.

Any such

tax paid

in the

USVI

is also

creditable against the Corporation’s

Puerto Rico tax liability, subject

to certain conditions and limitations.

Insurance Operations Regulation

As a financial holding

company under the Bank

Holding Company Act, we

are permitted to engage

in a broader range of

including insurance activities, that are permitted to bank holding companies.

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

of Puerto Rico and

the Division of

Banking, Insurance and

Financial Regulation in

relating to,

licensing of

sales and

solicitation and

advertising practices,

and by

the

Board as

consumer protection

provisions mandated

by the

Gramm-Leach-Bliley Act

and its

Mortgage Banking Operations

In

to

FDIC

and

CFPB

is

subject

to

the

rules

and

of

the

FHA,

VA,

FNMA,

FHLMC,

GNMA, and

Department of

Housing and

Urban Development

(“HUD”)

to originating,

selling and

servicing mortgage

loans and the

issuance and

sale of MBS.

Those rules

and regulations, among

other things, prohibit

discrimination

and

that

include

for

inspections

and

appraisals,

require

credit

reports

on

and

fix

maximum

loan

amounts,

and,

with

respect

to

VA

loans,

fix

maximum

rates.

lenders

such

as

FirstBank 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. FirstBank’s

affairs are

also subject

and examination

by the

FHA,

VA,

FNMA,

FHLMC,

GNMA

and

HUD

at

all

times

to

assure

with

and

Mortgage origination activities are subject

to, among other requirements, the Equal

Credit Opportunity Act, TILA and

the RESPA

and

the

promulgated

thereunder

that,

among

other

things,

discrimination

and

require

the

basic

information to

mortgagors concerning

credit terms

and settlement

costs. FirstBank

is licensed

by the

Commissioner under

Rico

Banking

Law,

and,

as

such,

is

subject

to

by

the

Commissioner,

with

respect

to,

among

other

things,

licensing requirements and the establishment of maximum origination

fees on certain types of mortgage loan products.

WEBSITE ACCESS TO REPORT

makes available

annual reports

on Form

10-K, quarterly

reports on Form

10-Q, and

current reports

on Form

8-K,

and amendments to

those reports, and proxy

statements on Schedule 14A,

filed or furnished pursuant

to Sections 13(a), 14(a)

or 15(d)

of the Exchange

Act, free of

charge on or

through its internet

website at www.1firstbank.com

(under “Investor Relations”)

or directly

through

the

relations

website,

fbpinvestor.com,

as

soon

as

practicable

after

the

electronically

files

such

with,

or

furnishes

it

to,

the

SEC.

The

SEC

a

website

that

contains

reports,

proxy

and

information statements, and other information regarding issuers that file electronically

with the SEC at www.sec.gov.

The

also

makes

its

Guidelines

and

Principles,

the

charters

of

the

Audit,

Asset/Liability,

and

Benefits,

Credit,

Risk,

Trust,

and

and

Committees

and

the

documents listed below,

free of charge on or through its internet website at www.fbpinvestor.com

(under Corporate Governance):

•

Code of Ethics for CEO and Senior Financial Officers (the “Code of

Ethics”)

•

Code of Ethical Conduct applicable to all employees

•

Independence Principles for Directors

•

Corporate Sustainability/ESG Reports

•

Sustainability Policy

Governance Guidelines and

Principles and the

aforementioned charters

and documents may

also be obtained

free of

charge

by

sending

a written

request

to

Mrs. Sara

Alvarez Cabrero

,

Vice

President,

General

Counsel

and

Secretary

of the

Board, PO Box 9146, San Juan, Puerto Rico 00908.

Website addresses

referenced in this Form 10-K

are provided as textual references

and for convenience only,

and the content on the

referenced

websites does

not constitute

a part

of this

Form

10-K

or any

other report

or document

files with

or

furnishes to the SEC.