FIRST BANCORP PR

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

Shareholders and the Board of Directors of First BanCorp.

San Juan, Puerto Rico

Opinions on the Financial Statements and Internal Control

We have

audited the accompanying consolidated

statements of financial condition of

First BanCorp. (the "Company") as of

31,

2023,

and

2022,

the

related

of

income,

income

(loss),

cash

flows,

and

changes

in

stockholders’

equity

for

each

of

the

years

in

the

period

ended

31,

2023,

and

the

related

notes

(collectively

to

as

the

"financial

statements").

We

also

have

audited

the

control

over

as

of

31,

2023,

based

on

in

Control

–

Integrated

Framework:

(2013)

issued

by

the

of

Sponsoring Organizations of the Treadway

Commission (COSO).

In our opinion,

the financial statements

referred to above

present fairly,

in all material respects,

the financial position

of the Company

as of

2023, and

2022, and

the results

of its

operations and

its cash

flows for

each of

in the

three-year period

31, 2023, in

conformity with

accounting principles

in the United

States of America.

Also in our

opinion, the Company maintained,

in all material respects, effective

internal control over financial

reporting as of December

based on criteria established in Internal Control – Integrated Framework:

(2013) issued by COSO.

Basis for Opinions

The

is

for

these

for

control

over

and

for

its

of

the

of

control

over

in

the

accompanying

Report

on

Control

over

Reporting.

Our

is

to

express

an

opinion

on

the

and an

opinion on

the Company’s

reporting based

on our

audits.

We

are a

public

accounting firm

registered with

the Public

Company Accounting

Oversight Board

(United States)

("PCAOB") and

are required

to be

independent with

the Company

in accordance

U.S. federal

securities laws and

the applicable

rules and regulations

of the Securities and Exchange Commission and the PCAOB.

We conducted

our audits in accordance with the

standards of the PCAOB. Those standards require

that we plan and perform the audits

to obtain reasonable

assurance about whether

the financial statements are

free of material misstatement,

whether due to error

or fraud,

and whether effective internal control over financial reporting

was maintained in all material respects.

Our

audits

of

the

performing

to

assess

the

risks

of

misstatement

of

the

statements, whether due to error or fraud,

and performing procedures that respond to

those risks. Such procedures included examining,

on

a

test basis,

the

amounts

and

in

the

Our

audits

also

the

used

and

made

by

as

well

as

the

overall

of

the

financial statements. Our audit

of internal control over

financial reporting included obtaining

an understanding of internal

control over

financial reporting, assessing the risk that a material weakness

exists, and testing and evaluating the design

and operating effectiveness

of internal control

assessed risk.

Our audits also

included performing

such other procedures

as we considered

in the circumstances.

We believe that our audits

provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s

internal control over financial reporting is a

process designed to provide reasonable assurance

regarding the reliability of

financial reporting and

the preparation of

financial statements for

external purposes in

accordance with generally

accepted accounting

principles.

A

control

over

those

and

that

(1)

pertain

to

the

of

records

that,

in

detail,

and

fairly

reflect

the

and

dispositions

of

the

assets

of

the

company; (2) provide

reasonable assurance that

transactions are recorded

as necessary to permit

preparation of financial

statements in

accounting principles,

receipts and

expenditures of

the company

are being

made only

in

with

of

and

of

the

company;

and

(3)

provide

prevention or timely detection of unauthorized acquisition, use, or

disposition of the company’s

assets that could have a material effect

on the financial statements.

Because of its inherent limitations, internal control over

financial reporting may not prevent or detect misstatements.

Also, projections

of any evaluation

of effectiveness to

future periods are

subject to the

risk that controls

may become inadequate

because of changes

in

conditions, or that the degree of compliance with the policies or procedures

may deteriorate.

Critical Audit Matter

The

audit

matter

below

is a

matter

arising

from

the

current

period

audit

of

the

that

was

communicated or required

to be communicated

to the audit

committee and that:

(1) relates to accounts

or disclosures that

are material

to the financial

statements and (2)

involved our especially

challenging, subjective,

or complex judgments.

The communication

of the

audit

matter

does

not

alter

in

any

way

our

opinion

on

the

taken

as

a

whole,

and

we

are

not,

by

communicating

the

audit

matter

below,

a

opinion

on

the

audit

matter

or

on

the

or

disclosures to which it relates.

Allowance for Credit Losses – Economic Forecasts and Macroeconomic Variables

As described

in Notes

1 and

5 to

statements, the

allowance for

(“ACL”) for

is an

of

credit

losses

over

the

life

of

assets

carried

at

cost

and

off-balance-

sheet credit exposures.

The calculation

of the

ACL for

finance leases,

is primarily

measured based

on a

probability of

default /

loss given

default

modeled approach. The

estimate of the

probability of default

and loss given

default assumptions uses

one or more

economic forecasts

of

current

and

by

such

as:

rate;

housing

and

real

estate

price

indices;

rates;

market

risk

factors;

and

gross

product,

and

Puerto

Rico,

the

Virgin

Islands,

and

the

State

of

Florida.

A

amount

of

is

to

assess

the

of

the

selection

of

and

Changes

to

these

could

have

a

material effect on the Company’s

financial results.

The economic

forecasts and

forward-looking macroeconomic

variables used

contribute significantly

to the

of the ACL for loans

and finance leases. We

identified the assessment of

economic forecasts and relevant

macroeconomic variables as

a critical

audit matter

as the

impact of

these judgments

represents a

significant portion

of the

ACL for

and

because

subjective

auditor

and

audit

effort,

the

need

for

specialized skill.

The primary procedures we performed to address these critical audit matters included:

●

Testing

of controls

the selection

forecasts and

and forward-

looking macroeconomic variables, including controls addressing:

o

Management’s review and

approval of the economic forecasts and macroeconomic variables.

o

review

of

the

of

the

results

of

the

selection

of

and

macroeconomic variables used in the calculation.

●

Substantively

testing

their

and

for

selection and macroeconomic variables, which included:

o

Evaluation of reasonableness of economic forecasts selection.

o

Evaluation

of

the

completeness

and

of

data

inputs

used

as

a

basis

for

the

relating

to

macroeconomic variables.

o

Evaluation,

with

the

of

professionals

with

skill

and

knowledge,

of

the

of

judgments related

to the

economic forecast

and macroeconomic

variables used

in the

of

the

ACL

for

loans.

Among

other

our

considered,

from

and

sources, loan portfolio performance trends and whether such assumptions were

applied consistently period to period.

o

Analytical evaluation of the variables period to period for directional consistency

and testing for reasonableness.

We have served

as the Company’s auditor since 2018.

/s/

Crowe LLP

Fort Lauderdale, Florida

February 28, 2024

Stamp No. E511125

of the

Puerto Rico Society of Certified

Public Accountants was affixed to

the record copy this report.