FIRST BANCORP /PR/

SIGNATURES

Forward-Looking Statements

This Quarterly

Form 10-Q

(this “Form

10-Q”) contains

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-Q or future filings

by

First

(the

“Corporation,”

“we,”

“us,”

or

“our”)

with

the

U.S.

Securities

and

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

by,

or

with

the

of,

an

authorized

executive

officer

of

the

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

contained in

this Form

10-Q, the

date hereof,

and advises

readers that

any such

are not

guarantees of

future performance

and involve

certain risks,

uncertainties, estimates,

and

by us

difficult

to predict

.

Various

factors, some

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

forward-looking

statements include, but are not

limited to, risks described or

referenced in Part I, Item 1A,

“Risk Factors,” in the Corporation’s

Annual

Report on Form 10-K for the fiscal year ended December 31, 2025 (“the 2025

Annual Report on Form 10-K”), and the following:

●

the effect

of changes

in the

environment

and inflation

levels on

the level,

and performance

of the

liabilities, and

effects on

income, net

interest margin,

loan originations, deposit attrition, overall results of operations, and liquidity

position;

●

volatility

in

the

which

could

result

in,

among

other

things,

bank

deposit

runoffs,

constraints, and increased regulatory requirements and costs;

●

the effect of continued changes in the fiscal, monetary,

and trade policies and regulations of the United States (“U.S.”) federal

government, the

government and

other governments,

including those

determined by

the Board

of Governors

of

the Federal Reserve

System (the “Federal

Reserve Board”), the Federal

Reserve Bank of New

York

(the “FED”), the

Federal

Deposit

Insurance

(the

“FDIC”),

government-sponsored

housing

agencies

and

regulators

in

Puerto

Rico,

the

U.S., and

the U.S.

Virgin

Islands (the

“USVI”) and

British Virgin

Islands (the

“BVI”), that

may affect

the future

results of

the Corporation;

●

uncertainty as

to the

ability of

FirstBank Puerto

Rico (“FirstBank”

or the

“Bank”), to

retain its core

deposits and

generate sufficient

cash flow through

its wholesale funding

sources, such as

securities sold under

to

repurchase,

Federal

Home

Loan

Bank

(“FHLB”)

advances,

and

certificates

of

deposit

(“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 USVI

and the BVI,

in the interest

rate environment, unemployment

rates, market liquidity

and volatility,

trade policies, housing

absorption rates,

real

estate

and

U.S.

capital

which

may

affect

funding

sources,

loan

and

credit

market

prices

of

and

demand

for

the

products

and

services,

and which

may

reduce the Corporation’s revenues

and earnings and the value of the Corporation’s

assets;

●

the impact of

litigation or the

threat of litigation

or other dispute

resolutions,

including any adverse

settlements or judgments

against

the

and

the

costs,

negative

publicity

or

other

reputational

harm;

and

the

effects of asserted and unasserted claims and the extent of

available insurance coverage;

●

the impact

of government

financial assistance

for hurricane

recovery and

other disaster

relief on

economic activity

Rico, and the timing and pace of disbursements of funds earmarked for

disaster relief;

●

the ability

of the

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,

threats resulting

from critical

vulnerabilities in

widely used

third-party software

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

or

planned

growth

opportunities,

risks,

uncertainties,

and

other

factors

or

events

related

to

any

acquisitions,

dispositions,

partnerships,

investments,

systems

conversions,

and

any

anticipated

efficiencies

or

other expected results related thereto;

●

the

implementation

of

Puerto

debt

plan

(“Plan

of

Adjustment”)

and

the

revised

fiscal plan for

Puerto Rico, as

certified on June

19, 2026 (the

“Fiscal Plan”) by

the oversight board

established by the

Puerto

Rico

Oversight,

Management,

and

Stability

Act

(“PROMESA”),

or

any

revisions

to

it,

on

our

clients

and

loan

portfolios, and any potential impact of future economic or political developments

and tax regulations in Puerto Rico;

●

the

impact

of

changes

in

or

determinations

and

in

applying

those

and

of

forecasts of economic variables considered for the determination of

the allowance for credit losses (“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,

ongoing

in

the

Middle

East,

such

as

the

war

in

Iran,

recent

in

South

America,

the

possible

expansion

of

such

in

surrounding

areas

and

geopolitical

consequences,

and

the

threat

of

conflict

from

neighboring

countries

in

our

region),

terrorist

attacks,

or

other

catastrophic

events,

impacts

of

such

events

on

general

and

on

the

regarding forecasts of economic variables;

●

the

risk

that

portions

of

the

losses in

the

debt

securities portfolio

are

determined

to

be

credit-related, resulting

in additional

charges to

the provision

losses on

portfolio,

and

the potential

for additional

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

legislative,

tax,

or

changes

or

changes

in

legislative,

tax,

or

priorities,

as

a

result

of

the

One

Big

Beautiful

Bill

Act,

signed

into

law

on

July

4,

2025,

the

in

staffing

at

U.S.

governmental agencies,

the effects of

U.S. federal government

shutdowns and political

impasses, and uncertainties

the U.S. debt ceiling and federal budget, on the Corporation’s

financial condition or performance;

●

the

risk

of

possible

failure

or

circumvention

of

the

internal

controls

and

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

impact

of the

occurrence

of any

of these

uncertainties on

capital would

preclude

further

growth of FirstBank and preclude the Corporation’s

Board of Directors (the “Board”) from declaring dividends; and

●

uncertainty as

to whether

FirstBank will

be able

to continue

to satisfy

its regulators

regarding,

among other

things, its

asset

plans,

maintenance

of

capital

levels,

and

with

laws,

and

related

The

does

not

undertake

to

and

specifically

disclaims

any

to

update

any

“forward-looking

statements”

to

reflect

occurrences

or

unanticipated

events

or

circumstances

after

the

date

of

such

statements,

except

as

by

the

federal

securities laws.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(In thousands, except for share information)

ASSETS

Cash and due from banks

$

461,014

$

657,149

Money market investments:

Time deposit with another financial institution

1,000

Other short-term investments

Total money market investments

1,700

1,450

Available-for-sale debt securities, at fair value (amortized cost of

$

5,200,017

4,901,982

as of December 31, 2025; ACL of $

Held-to-maturity debt securities, at amortized

cost, net of ACL of $

as of December 31, 2025 (fair value of

$

207,866

262,055

217,392

264,563

44,232

44,753

Total investment securities

4,980,308

4,863,348

Loans held for investment, net of ACL of

$

241,673

249,037

as of December 31, 2025

Mortgage loans held for sale, at lower of

cost or fair value

16,545

16,697

Total loans, net

13,139,372

12,893,016

Accrued interest receivable on loans and

investments

75,871

71,351

Premises and equipment, net

128,402

126,920

Other real estate owned (“OREO”)

5,629

7,522

Deferred tax asset, net

135,043

149,012

38,611

38,611

2,804

3,458

281,580

321,055

Total assets

$

$

LIABILITIES

Non-interest-bearing deposits

$

5,465,908

$

5,549,416

Interest-bearing deposits

11,452,728

11,120,727

Total deposits

Short-term borrowings

23,805

Long-term borrowings

200,000

290,000

Accounts payable and other liabilities

232,409

205,884

Total liabilities

17,374,850

17,166,027

Commitments and contingencies (See

Note 18)

(nil)

(nil)

STOCKHOLDERS’ EQUITY

Common stock, $

0.10

par value,

2,000,000,000

shares authorized;

223,663,116

shares issued;

shares outstanding as of September 30,

156,618,996

shares outstanding as of December 31, 2025

22,366

22,366

Additional paid-in capital

957,920

963,543

Retained earnings, includes legal surplus

reserve of $

262,534

as of each of September 30, 2026 and

2,268,011

Treasury stock (at cost),

shares as of September 30, 2026 and

67,044,120

shares as of December 31, 2025

(932,505)

Accumulated other comprehensive loss,

net of tax of $

7,986

as of each of September 30, 2026 and

(354,550)

Total stockholders’ equity

Total liabilities and stockholders’ equity

$

$

The accompanying notes are an integral part

of these statements.

CONSOLIDATED STATEMENTS OF INCOME

Interest and dividend income:

Loans

$

247,948

$

247,216

$

734,371

$

731,121

Investment securities

37,993

25,832

108,530

73,080

Money market investments and interest-bearing cash accounts

4,904

9,695

15,503

33,797

Total interest and dividend income

290,845

282,743

858,404

837,998

Interest expense:

Deposits

61,016

61,345

173,140

178,480

Short-term borrowings

Long-term borrowings

2,155

3,472

7,191

13,260

Total interest expense

63,318

64,827

180,790

191,826

Net interest income

227,527

217,916

677,614

646,172

Provision for credit losses - expense (benefit):

Loans and finance leases

14,877

18,270

48,005

63,488

Unfunded loan commitments

(120)

(756)

1,466

(532)

Debt securities

(124)

(232)

Provision for credit losses - expense

14,633

17,593

49,239

62,990

Net interest income after provision for credit losses

212,894

200,323

628,375

583,182

Non-interest income:

9,839

9,811

29,656

29,207

Mortgage banking activities

3,694

3,309

11,464

9,887

2,884

2,618

11,942

10,961

12,540

11,682

36,810

35,037

Other non-interest income

3,633

3,374

16,135

12,386

32,590

30,794

106,007

97,478

64,286

59,761

193,024

181,956

22,299

22,185

66,470

67,112

4,254

3,884

12,244

10,657

Professional service fees

11,435

11,903

37,463

34,998

6,233

6,092

18,488

17,682

2,156

2,236

6,381

6,707

(766)

1,033

(2,545)

(687)

9,457

7,889

25,298

20,746

Communications

2,274

2,294

6,796

6,747

8,594

7,617

21,032

25,335

130,222

124,894

384,651

371,253

Income before income taxes

115,262

106,223

349,731

309,407

Income tax expense

19,147

5,697

68,684

51,642

$

96,115

$

100,526

$

281,047

$

257,765

Net income attributable to common stockholders

$

96,115

$

100,526

$

281,047

$

257,765

Net income per common share:

Basic

$

0.64

$

0.63

$

1.83

$

1.60

Diluted

$

0.63

$

0.63

$

1.82

$

1.59

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)

INCOME

$

96,115

$

100,526

$

281,047

$

257,765

Other comprehensive (loss) income, net of tax:

Available-for-sale debt securities:

Net unrealized holding (losses) gains on debt securities

(1)

48,834

174,100

Other comprehensive (loss) income for the period, net of tax

48,834

174,100

Total comprehensive (loss) income

$

(23,260)

$

149,360

$

147,773

$

431,865

(1)

Net unrealized holding

(losses) gains on

securities have no

tax effect because

securities are either

tax-exempt, held by

an International Banking

Entity (“IBE”), or

have a full

deferred tax asset

valuation allowance.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Cash flows from operating activities:

$

281,047

$

257,765

Adjustments to reconcile net income to net cash provided by operating

activities:

Depreciation and amortization

12,364

13,128

Amortization of intangible assets

3,291

Provision for credit losses

49,239

62,990

Deferred income tax expense (benefit)

13,970

(10,570)

Stock-based compensation

8,742

7,987

Unrealized gain on derivative instruments

(880)

(472)

Net gain on disposals or sales, and impairments of premises

and equipment and other assets

(773)

Net gain on sales of loans and loans held for sale valuation

(4,260)

(3,262)

Net accretion of discounts, premiums, and deferred loan fees

and costs

(1,403)

(766)

Originations and purchases of loans held for sale

(131,260)

(124,210)

Sales and repayments of loans held for sale

135,406

130,123

Amortization of broker placement fees

Net (accretion) amortization of premiums and discounts on investment

(552)

Increase in accrued interest receivable

(11,559)

(2,751)

(Decrease) increase in accrued interest payable

(2,577)

1,399

(Increase) decrease in other assets

(34,696)

8,851

Increase (decrease) in other liabilities

4,320

(2,862)

Net cash provided by operating activities

318,338

341,295

Cash flows from investing activities:

Net disbursements on loans held for investment

(324,821)

(398,533)

Proceeds from sales of loans held for investment

2,475

Proceeds from sales of repossessed assets

38,236

41,125

Purchases of available-for-sale debt securities

(2,266,487)

(922,383)

Proceeds from principal repayments and maturities of available-for-sale

1,991,446

1,134,582

Proceeds from principal repayments and maturities of held-to-maturity

49,954

45,402

Additions to premises and equipment

(14,023)

(6,955)

Proceeds from sales of premises and equipment and other assets

Net redemptions of equity securities

7,751

Net cash used in investing activities

(524,459)

(96,536)

Cash flows from financing activities:

Net increase (decrease) in deposits

324,594

(43,588)

Repayments of long-term borrowings

(90,000)

(269,850)

Proceeds from short-term borrowings

23,805

Repurchase of outstanding common stock

(154,957)

(103,664)

Dividends paid on common stock

(93,206)

(87,502)

Net cash provided by (used in) financing activities

10,236

(504,604)

Net decrease in cash and cash equivalents

(195,885)

(259,845)

Cash and cash equivalents at beginning of year

658,599

1,159,415

Cash and cash equivalents at end of period

$

462,714

$

899,570

Cash and cash equivalents include:

Cash and due from banks

$

461,014

$

897,877

Money market investments

1,700

1,693

$

462,714

$

899,570

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’

EQUITY

Common Stock

$

22,366

$

22,366

$

22,366

$

22,366

Additional Paid-In Capital:

955,527

959,629

963,543

964,964

Stock-based compensation expense

2,318

2,109

8,742

7,987

(318)

(297)

(15,093)

(11,653)

957,920

961,441

957,920

961,441

Retained Earnings:

2,390,394

2,137,421

2,268,011

2,038,812

96,115

100,526

281,047

257,765

Dividends on common stock ($

0.20

per share and $

0.18

per share for the quarters ended

September 30, 2026 and 2025, respectively; $

0.60

per share and $

0.54

per share for the

nine-month periods ended September 30, 2026 and 2025, respectively)

(30,390)

(28,749)

(92,939)

(87,379)

2,209,198

2,209,198

Treasury Stock (at cost):

(1,023,005)

(832,671)

(932,505)

(790,350)

Common stock repurchases (See Note 10)

(50,017)

(50,130)

(154,957)

(103,664)

15,093

11,653

(393)

(728)

(143)

(882,504)

(882,504)

Accumulated Other Comprehensive Loss, net

of tax:

(368,449)

(441,290)

(354,550)

(566,556)

Other comprehensive (loss) income, net of tax

48,834

174,100

(392,456)

(392,456)

Total stockholders’ equity

$

$

1,918,045

$

$

1,918,045

INDEX TO NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

PAGE

Note 1 –

Basis of Presentation and Significant Accounting Policies

Note 2 –

Debt Securities

Note 3 –

Loans Held for Investment

Note 4

–

Allowance for Credit Losses for Loans and Finance Leases

Note 5 –

Other Real Estate Owned (“OREO”)

Note 6 –

Deposits

Note 7 –

Borrowings

Note 8 –

Earnings per Common Share

Note 9 –

Stock-Based Compensation

Note 10 –

Stockholders’ Equity

Note 11 –

Accumulated Other Comprehensive Loss

Note 12 –

Employee Benefit Plans

Note 13 –

Income Taxes

Note 14

–

Note 15

–

Revenue from Contracts with Customers

Note 16 –

Segment Information

Note 17 –

Supplemental Statements

of Cash Flows Information

Note 18 –

Regulatory Matters, Commitments, and Contingencies

Note 19 –

First BanCorp. (Holding Company Only) Financial Information

STATEMENTS

NOTE 1 – BASIS

OF PRESENTATION AND

SIGNIFICANT

ACCOUNTING

POLICIES

The Consolidated

Financial Statements

(unaudited) for

2026 (the

“unaudited

consolidated financial

statements”) of

(the “Corporation”)

have been

prepared in

conformity with

the accounting

stated

in

the

Audited

for

the

fiscal

year

ended

31,

(the

“audited

consolidated financial

statements”) included

in the

2025 Annual

Form 10-K,

as updated

by the

information contained

in this

report.

Certain

and

note

normally

in

the

prepared

in

with

accepted accounting principles in the United States of America

(“GAAP”) have been condensed or omitted from these statements pursuant

to

the

rules

and

of

the

SEC

and,

accordingly,

these

should

be

read

in

conjunction

with

the

audited

consolidated financial statements, which are included in the 2025 Annual Report on Form 10-K. All adjustments (consisting only of normal

recurring adjustments) that are, in the opinion of management,

necessary for a fair presentation of the statement of

financial position, results

of operations and cash flows

for the interim periods have

been reflected. All significant

intercompany accounts and transactions

have been

eliminated in consolidation. The Corporation evaluates subsequent events through

the date of filing with the SEC.

The results of operations for the quarter and nine-month period ended September 30, 2026 are not necessarily indicative of the results to

be expected

for the

entire

year.

Adoption of New Accounting Requirements

Standard

Description

Effective Date

Effect on the financial statements

Accounting Standards

Update (“ASU”) 2025-05,

“Financial Instruments –

Credit Losses (Topic 326):

Measurement of Credit

Losses for Accounts

Receivable and Contract

Assets”

In July 2025, the Financial Accounting

Standards Board (“FASB”) issued ASU

2025-05, which provides a practical

expedient for current accounts receivable

and current contract assets accounted for

pursuant to ASC Topic 606. Such practical

expedient, if elected, allows an entity to

assume that current economic conditions as

of the reporting date remain unchanged over

their remaining lives.

Effective for annual reporting

periods beginning after December

15, 2025, and interim reporting

periods within those annual

reporting periods. Prospective

application is required.

Although ASU 2025-05 became

effective during the first quarter of

2026, the adoption of this ASU did

not have an impact on the

Corporation’s financial position or

results of operations, as the

Corporation did not elect the

practical expedient provided therein.

Recently Issued Accounting Standards Not Yet

Effective or Not Yet

Adopted

For issued accounting

standards not yet effective

or not yet adopted,

see Note 1 –

“Nature of Business and

Summary of Significant

Accounting Policies,” to the audited consolidated financial statements included

in the 2025 Annual Report on Form 10-K.

NOTE 2 – DEBT SECURITIES

Available-for-Sale

Debt Securities

The amortized

cost, gross

unrealized gains

and losses,

ACL, estimated

fair value,

and weighted-average

yield of

debt securities by contractual maturities as of September 30, 2026 and

December 31, 2025 were as follows:

(1)

Gross Unrealized

ACL

(2)

Gains

Losses

U.S. Treasury securities:

$

373,295

$

$

$

$

373,218

3.82

49,607

49,188

4.31

U.S. government-sponsored entities (“GSEs”) obligations:

308,664

3,695

304,969

0.88

417,374

14,169

403,205

2.62

14,996

14,401

4.75

6,028

6,005

4.01

(3)

2,567

1,579

United States and Puerto Rico government obligations

1,172,531

19,681

1,152,565

2.65

Mortgage-backed securities (“MBS”):

2,260,579

326,829

1,933,764

1.94

U.S. Agencies collateralized mortgage

obligations (“CMOs”)

1,457,540

86,720

1,370,824

4.51

4,108

2,769

6.38

3,722,227

414,302

3,307,357

2.96

305,159

46,498

258,662

3.36

4,027,386

460,800

3,566,019

2.99

Other

4.50

Total available-for-sale debt securities

$

5,200,017

$

$

480,481

$

$

2.91

(1)

Gross Unrealized

ACL

(2)

Gains

Losses

U.S. Treasury securities:

$

497,159

$

$

$

$

497,342

3.85

U.S. GSEs’ obligations:

402,352

4,659

397,710

0.92

500,025

16,114

483,916

1.45

14,996

14,985

4.75

6,547

6,501

3.97

(3)

2,700

1,620

United States and Puerto Rico government obligations

1,423,779

21,592

1,402,074

2.18

MBS:

2,401,704

2,360

256,589

2,147,475

1.80

833,330

4,123

39,299

798,154

3.95

5,072

1,361

3,266

5.92

3,240,106

6,483

297,249

2,948,895

2.36

U.S Agencies Commercial MBS

238,097

35,542

203,063

2.42

3,478,203

6,991

332,791

3,151,958

2.36

Total available-for-sale debt securities

$

4,901,982

$

7,196

$

354,383

$

$

2.31

(1)

Excludes accrued interest

receivable on

securities that totaled

$

14.2

$

9.4

2026 and December

respectively, reported

as part of

accrued interest

receivable on loans and investment securities in the consolidated statements of financial condition, and excluded from the estimate of credit losses.

(2)

Includes $

182.4

million (amortized cost - $

206.0

million) and $

230.2

million (amortized cost - $

251.0

million) as of September 30,

2026 and December 31, 2025, respectively,

that was pledged at the FHLB

as collateral

for borrowings

and letters

of credit,

as well

as $

2.5

billion (amortized

cost -

$

2.7

billion) as

of each

pledged as

collateral for

the uninsured

portion of

government deposits. The secured parties are not permitted to sell or repledge the collateral.

(3)

Consists of a

residential pass-through MBS

issued by the

Puerto Rico Housing

Finance Authority ("PRHFA")

that is collateralized

by certain second

mortgages originated under

a program launched

by the Puerto

Rico

government in 2010 and is in nonaccrual status based on the delinquency status of the underlying second mortgage loans collateral.

of 2026, the

Corporation purchased approximately

$

2.3

billion in available-for-sale

debt securities, of

which

$

1.1

billion

were

U.S.

agencies’

MBS

with

an

average

yield

of

5.05

%;

and

$

1.0

billion

were

U.S.

bills

with

an

average yield of

3.73

%.

The

tables

present

the

fair

value

and

gross

losses

of

the

debt

aggregated by

investment category

and length of

time that individual

securities have

been in a

continuous unrealized

loss position, as

of September 30, 2026 and December 31, 2025. The tables also include debt

securities for which an ACL was recorded.

Total

Losses

Losses

Losses

U.S. Treasury and U.S. GSEs’ obligations

$

651,966

$

6,353

$

498,167

$

12,626

$

1,150,133

$

18,979

1,579

(1)

1,579

MBS:

371,492

9,714

1,561,583

317,115

1,933,075

326,829

1,221,324

41,483

147,582

45,237

1,368,906

86,720

2,769

(1)

2,769

137,844

5,988

116,933

40,510

254,777

46,498

$

2,382,626

$

63,538

$

2,328,613

$

416,943

$

4,711,239

$

480,481

(1)

Unrealized losses do not include the credit loss component recorded

as part of the ACL. As of September 30, 2026, the

PRHFA bond and private label MBS

had an ACL of $

0.3

million

and $

0.6

Total

Losses

Losses

Losses

U.S. Treasury and U.S. GSEs’ obligations

$

91,584

$

$

796,505

$

20,730

$

888,089

$

20,830

1,620

(1)

1,620

MBS:

52,599

1,851,881

256,441

1,904,480

256,589

74,773

170,490

38,897

245,263

39,299

3,266

1,361

(1)

3,266

1,361

2,810

138,412

35,392

141,222

35,542

$

221,766

$

$

2,962,174

$

353,583

$

3,183,940

$

354,383

(1)

Unrealized losses do

not include the credit

loss component recorded

as part of the

ACL. As of December

31, 2025, the PRHFA

bond and private

label MBS had an

ACL of $

0.3

million

and $0.5 million, respectively.

Assessment for Credit Losses

expects no

credit losses on

issued by

U.S. government

agencies, U.S.

GSEs and

the U.S. Treasury

given the explicit

and implicit guarantees

provided by the

U.S. federal government.

Because the decline

in fair value

is attributable to

changes in interest

rates, and not

credit quality,

and because, as

of September 30,

2026, the Corporation

did not have

the intent to sell

these

debt

and

determined

that

it

was

likely

that

it

will

not

be

to

sell

these

before

their

anticipated

recovery,

the

does

not

consider

impairments

on

these

to

be

credit

related.

The

credit

loss

assessment was

concentrated mainly

on private

label MBS

and on

Rico government

debt security,

for which

are evaluated on a quarterly basis.

a roll-forward

of the ACL

on available-for-sale

by major

security type

for the quarters

MBS

Total

MBS

Total

$

$

$

$

$

$

Provision for credit losses – expense (benefit)

(16)

(1)

(9)

(12)

(12)

(1)

(1)

ACL on available-for-sale debt securities

$

$

$

$

$

$

MBS

Total

MBS

Total

$

$

$

$

$

$

Provision for credit losses - expense (benefit)

(32)

(17)

(36)

(36)

(1)

(1)

ACL on available-for-sale debt securities

$

$

$

$

$

$

Held-to-Maturity Debt Securities

The

cost,

gross

gains

and

losses,

fair

value,

ACL,

yield

and

maturities of held-to-maturity debt securities as of September 30, 2026

and December 31, 2025 were as follows:

(1) (2)

Gross Unrecognized

Gains

Losses

ACL

$

17,483

$

$

$

17,473

$

7.03

26,655

1,261

27,904

6.98

7,016

7,062

6.51

9,520

9,932

7.25

Total Puerto Rico municipal bonds

60,674

1,892

62,371

6.98

MBS:

79,909

7,154

72,755

4.02

18,711

1,018

17,693

3.40

98,620

8,172

90,448

3.90

58,454

3,407

55,047

1.94

157,074

11,579

145,495

3.17

$

217,748

$

1,892

$

11,774

$

207,866

$

4.23

(1) (2)

Gross Unrecognized

Gains

Losses

ACL

$

1,044

$

$

$

1,083

$

4.94

53,265

1,916

55,050

7.05

10,376

10,870

4.78

14,870

14,886

7.46

Total Puerto Rico municipal bonds

79,555

2,633

81,889

6.81

MBS:

89,798

2,245

87,553

3.99

21,653

21,261

3.40

111,451

2,637

108,814

3.87

72,944

2,943

70,001

2.13

184,395

5,580

178,815

3.19

Other

1,346

1,351

6.87

$

265,296

$

2,638

$

5,879

$

262,055

$

4.29

(1)

Excludes accrued

interest receivable

on held-to-maturity

that totaled

$

1.4

$

3.2

respectively, reported

as part

of accrued

receivable on loans and investment securities in the consolidated statements of financial condition, and excluded from the estimate of credit losses.

(2)

Includes $

144.1

million (fair value - $

139.3

million) and $

153.0

million (fair value - $

150.9

million) as of September 30,

2026 and December 31, 2025, respectively,

that serves as collateral for

the uninsured portion of

government deposits. The secured parties are not permitted to sell or repledge the collateral.

The

tables

present

the

debt

securities’

fair

value

and

gross

losses,

aggregated

by

category

and

length

of

time

that

had

been

in

a

continuous

loss

as

of

September 30, 2026 and December 31, 2025, including debt securities for which

an ACL was recorded:

Total

Losses

Losses

Losses

Puerto Rico municipal bonds

$

$

$

12,847

$

$

12,847

$

MBS:

12,380

60,375

6,229

72,755

7,154

17,693

1,018

17,693

1,018

55,047

3,407

55,047

3,407

$

12,380

$

$

145,962

$

10,849

$

158,342

$

11,774

Total

Losses

Losses

Losses

Puerto Rico municipal bonds

$

$

$

21,460

$

$

21,460

$

MBS:

U.S Agencies MBS

87,553

2,245

87,553

2,245

21,261

21,261

70,001

2,943

70,001

2,943

$

$

$

200,275

$

5,879

$

200,275

$

5,879

The

classifies

the

debt

into

the

major

security

types:

MBS

issued

or

guaranteed by

GSEs and

underlying collateral

and Puerto

Rico municipal

bonds. The

Corporation does

not recognize

an ACL

for MBS

issued or guaranteed by GSEs since they are highly rated by major rating agencies and have a long history of no credit losses. In the case of

municipal bonds,

determines the

ACL based

on the

product of

a cumulative

probability of

default and

loss-

given default, and the amortized cost basis of the bonds over their remaining expected life as described in Note 1 – “Nature of Business and

Summary of Significant Accounting Policies” to the audited financial

statements included in the 2025 Annual Report on Form 10-K.

the activity

in the

ACL for

for

and

periods

ended September 30, 2026 and 2025:

$

$

Provision for credit losses - benefit

(123)

(67)

(1)

$

$

Beginning Balance

$

$

Provision for credit losses - benefit

(377)

(104)

(1)

$

$

(1) Mostly related to Puerto Rico municipal bonds.

Credit Quality Indicators:

The

debt

of

GSEs’

MBS,

for

which

the

expects

no

credit

losses,

and

financing arrangements

government issued

in bond form

,

accounted for as

securities but

are underwritten

as loans

with

features

that

are

found

in

loans.

Accordingly,

the

monitors

the

credit

quality

of

these

bonds through

the use

of internal

credit-risk ratings,

which

are generally

updated

on a

basis. The

a government

bond as

a criticized

asset if

its risk

rating

is Special

Mention,

Substandard,

Doubtful, or

Loss. Government

bonds that do not meet the criteria

for classification as criticized assets are

considered to be Pass-rated securities. For

the definitions of

the internal-credit ratings,

see Note 2

— “Debt Securities,”

Form 10-K.

Loan Review Group

reports to the Risk

Management Committee

and administratively to

the Chief Risk Officer.

It

performs

annual

reviews

of

the

Bank’s

loan

portfolios,

the

above-mentioned

bonds.

These

reviews assess

the accuracy

of loan

risk ratings

and compliance

with lending

policies and

procedures.

The monitoring

performed by

this

group

helps

credit

risk,

adherence

to

underwriting

and

the

effectiveness

of

credit

while

identifying any

deficiencies. Based on

its findings,

it recommends corrective

actions, as needed.

Results of the

credit process reviews

are reported to the Risk Management Committee.

As of September 30, 2026 and December 31, 2025, all government bonds

classified as held-to-maturity were classified as Pass.

No

held-to-maturity debt

securities were

on nonaccrual

status, 90 days

and still accruing,

or past

due as

30,

2025. A security

is considered

to be past

due once

it is 30

days contractually

past due under

the terms of

the

agreement.

NOTE 3 – LOANS HELD FOR INVESTMENT

The

following table

provides information

about

the

loan

for

investment by

portfolio segment

and

disaggregated by

geographic locations

as of the indicated

dates:

As of December 31,

Puerto Rico and Virgin Islands region:

$

2,403,745

$

2,377,604

214,563

263,640

1,822,959

1,763,927

Commercial and Industrial (“C&I”) loans

2,630,576

2,519,002

3,632,289

3,703,019

$

10,704,132

$

10,627,192

Florida region:

$

540,199

$

530,698

3,124

1,928

796,434

790,325

6,187

5,857

$

$

Total:

$

$

217,687

265,568

(1)

(2)

ACL on loans and finance leases

(241,673)

(249,037)

Loans held for investment, net

$

$

(1)

As of September 30, 2026 and December 31,

2025, includes $

892.8

887.5

million, respectively, of commercial loans

that were secured by real estate

and for which the primary source of repayment at origination was

not dependent upon such real estate.

(2)

Includes accretable fair value net purchase discounts of $

16.6

18.4

million as of September 30, 2026 and December 31, 2025, respectively.

Various

loans were

assigned as

collateral for

borrowings, government

deposits, certain

time deposits

accounts, and

related unused

commitments.

The carrying

value of

loans pledged

as collateral

to $

5.6

billion and

$

5.7

and

31,

2025,

As

of

30,

and

31,

2025,

loans

pledged

as

include

$

2.2

billion

and

$

2.1

that

were

pledged

at

the

FHLB

as

for

borrowings

and

letters

of

credit;

$

3.3

billion

pledged as

collateral to

secure borrowing

capacity at

the FED

Discount Window

as of

to $

3.4

billion

as

of

31,

2025;

$

73.3

million

pledged

to

secure

as

for

the

portion

of

as

of

September 30, 2026, compared

to $

126.1

million as of December 31, 2025;

and $

114.7

million pledged to secure certain

time deposits

accounts as of September 30, 2026, compared to $

111.2

million as of December 31, 2025

.

aging of

the loan

for investment,

as well

as information

about nonaccrual

loans with

no ACL,

by

portfolio classes as of September 30, 2026 and December 31, 2025 are as follows:

Days Past Due and Accruing

Current

(1)

30-59

60-89

90+

(2) (3) (4)

(5)

Total loans held

Loans with no

ACL

(6)

Residential mortgage loans, mainly secured by first mortgages:

FHA/VA government-guaranteed

loans

(1)

(2) (4)

$

72,486

$

$

2,341

$

12,642

$

$

87,469

$

(1) (3) (5)

2,799,657

28,698

4,176

23,944

2,856,475

203,888

8,339

5,460

217,687

(1) (3)

2,608,998

1,443

8,428

6,065

(5)

3,897,289

4,848

1,164

1,922

39,777

20,612

1,934,150

62,650

11,117

12,471

2,020,388

846,692

14,097

2,828

3,050

866,667

323,816

4,707

2,399

1,581

332,503

262,798

3,575

2,565

5,067

274,005

138,736

3,069

1,620

1,488

144,913

Total loans held for investment

$

13,088,510

$

102,728

$

52,732

$

24,331

$

96,199

$

$

28,955

(1)

delinquency policy and

consistent with the

instructions for the

preparation of the

Consolidated Financial

Statements for Bank

Holding Companies (FR

Y-9C)

required by

the Federal

Reserve Board, residential mortgage, commercial mortgage,

and construction loans are considered past due when

the borrower is in arrears

on two or more monthly payments.

Federal Housing Authority (“FHA”)/U.S.

Department of

Veterans

Affairs (“VA”)

government-guaranteed loans,

conventional residential

mortgage loans,

and commercial

30-59 days,

but less

than two

payments in

arrears, as

of

September 30, 2026 amounted to $

8.3

million, $

60.7

million, and $

1.6

(2)

It is the

Corporation’s policy

to report delinquent

FHA/VA

government-guaranteed residential mortgage

loans as past-due

loans 90 days

and still accruing

as opposed to

nonaccrual loans. The

accruing interest on these loans until they

have passed the 15-month delinquency mark, taking

into consideration the FHA interest curtailment process. These

balances include $

3.7

million of residential mortgage loans

guaranteed by the FHA that were over 15 months delinquent as of September 30, 2026.

(3)

Includes purchased credit deteriorated (“PCD”) loans previously accounted

for under ASC Subtopic 310-30 for

which the Corporation elected to treat pools of

these loans as single assets both at the

time of adoption of

current expected

credit loss

(“CECL”) methodology 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 cash flows expected

to be collected on

the loan pools. The

portion of such loans

contractually past due 90 days

or more, amounting to

$

3.0

September 30, 2026 ($

2.5

million conventional residential mortgage loans and $

0.5

million commercial mortgage loans), is presented in the loans past due 90 days or more and still accruing category in the table above.

(4)

Included rebooked loans,

which were previously

pooled into Government

National Mortgage Association

(“GNMA”) securities, amounting

to $

5.2

September 30, 2026.

Under the GNMA

program, the

Corporation has the option but not

the obligation to repurchase loans that meet

GNMA’s

specified delinquency criteria. For accounting

purposes, these loans subject to the repurchase option

are required to be reflected

on the financial statements with an offsetting liability.

(5)

Nonaccrual loans

in the

Florida region

$

24.0

$

15.4

C&I loans,

$

6.7

loans, $

1.8

million was

a commercial

mortgage loan, and $

0.1

million were consumer loans.

(6)

Nonaccrual loans with no ACL in the Florida region amounted to $

11.7

million as of September 30, 2026, of which $

9.9

million was a C&I loan and $

1.8

million was a commercial mortgage loan.

Days Past Due and Accruing

Current

(1)

30-59

60-89

90+

(2) (3) (4)

(5)

Total loans held

Loans with no

ACL

(6)

Residential mortgage loans, mainly secured by first mortgages:

FHA/VA government-guaranteed

loans

(1)

(2) (4)

$

70,781

$

$

2,163

$

15,776

$

$

88,720

$

(1) (3) (5)

2,758,359

25,985

6,069

29,169

2,819,582

260,032

5,536

265,568

(1) (3)

2,544,283

8,382

(5)

3,653,509

1,514

2,563

2,730

28,042

13,752

1,952,600

63,085

12,661

14,665

2,043,011

871,810

14,049

2,670

3,510

892,039

325,474

5,185

2,705

1,792

335,156

278,938

4,479

3,266

6,405

293,088

140,117

2,157

1,841

1,467

145,582

Total loans held for investment

$

12,855,903

$

90,610

$

54,367

$

31,913

$

92,563

$

$

16,391

(1)

delinquency policy

and consistent

instructions for

the preparation

of the

Consolidated Financial

Statements for

Bank Holding

Companies (FR

Y-9C)

required by

the Federal

Reserve Board, residential

mortgage, commercial mortgage,

and construction loans

are considered past

due when the

borrower is in

arrears on two

or more monthly

payments. FHA/VA

government-guaranteed loans,

conventional residential mortgage loans,

and commercial mortgage loans

past due 30-59 days,

but less than two payments

in arrears, as of

December 31, 2025 amounted to

$

8.7

million, $

59.1

million, and $

0.8

(2)

It is

policy to

report delinquent

FHA/VA

government-guaranteed residential

as past-due

loans 90

days and

still accruing

as opposed

to nonaccrual

accruing interest on these

loans until they have

passed the 15-month delinquency mark,

taking into consideration the

FHA interest curtailment process.

These balances include $

4.1

million of residential mortgage

loans

guaranteed by the FHA that were over 15 months delinquent as of December 31, 2025.

(3)

Includes PCD loans previously accounted for under ASC Subtopic 310-30 for which the Corporation elected to treat pools of these loans as single assets both at the time of 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 cash flows expected to be

collected on the loan

pools. The portion of such

loans contractually past due 90

days or more, amounting to

$

4.8

31, 2025 ($

3.9

million conventional residential mortgage loans

and $

0.9

million

commercial mortgage loans), is presented in the loans past due 90 days or more and still accruing category in the table above.

(4)

Include rebooked loans,

which were previously

pooled into GNMA

securities, amounting to

$

6.7

December 31, 2025.

Under the GNMA

program, the Corporation

has the option

but not the

obligation to

repurchase loans that meet GNMA’s

specified delinquency criteria. For accounting purposes, these loans subject to the repurchase option are required to be reflected on the financial statements with an offsetting liability.

(5)

Nonaccrual loans in the Florida region amounted to $

11.3

million as of December 31, 2025, of which $

11.1

million were residential mortgage loans and $

0.2

million was a C&I loan.

(6)

no

nonaccrual loans with no ACL in the Florida region as of December 31, 2025.

When

a

loan

is placed

in

status,

any

accrued

but uncollected

income

is reversed

and

charged

against interest

income

and the

amortization of

any net

deferred fees

is suspended.

The amount

of accrued

interest reversed

against interest

income

totaled $

0.7

2.2

million for the quarter

and nine-month period ended

September 30, 2026, respectively,

compared to $

0.8

2.4

million for the same periods

in 2025, respectively.

For the quarter and

nine-month period ended September

interest income recognized on nonaccrual

loans amounted to $

0.5

1.7

compared to $

0.4

$

1.1

million for the same periods in 2025, respectively.

As of

recorded investment

on residential

collateralized by

residential real

estate property

that

were

in

the

process

of

foreclosure

to

$

19.7

$

5.2

million

of

FHA/VA

government-guaranteed

loans,

and

$

2.1

million

of

PCD

loans

acquired

prior

to

the

adoption,

on

January

1,

2020,

of

CECL.

The

commences the foreclosure

process on residential

real estate loans

after

days of delinquency

have passed. Foreclosure

and timelines

vary depending

on whether

the property

is located

in a judicial

or non-judicial

state. Occasionally,

foreclosures may

be

delayed due to, among other reasons, mandatory mediations, bankruptcy,

court delays, and title issues.

Credit Quality Indicators:

categorizes loans

into risk

categories based

on relevant

about the

ability of

the borrowers

to service

their debt

such as

current financial

information, historical

payment experience,

credit documentation,

public information,

and current

trends,

among

other

The

analyzes

non-homogeneous

loans,

such

as commercial

mortgage,

C&I,

and

construction loans individually

to classify the loans’ credit

risk. The Corporation

periodically reviews its commercial

loans

to

if

they

are

properly

classified.

The

frequency

of

these

reviews

will

depend

on

the

amount

of

the

aggregate

debt,

and

the

risk

rating

classification

of

the

obligor.

In

during

the

renewal

and

annual

review

process

of

applicable credit facilities,

the Corporation evaluates

the corresponding loan

grades. The Corporation

uses the same definition

for risk

ratings

as

those

described

for

bonds

accounted

for

as

debt

as

discussed

in

Note

“Debt

Securities,”

to the audited consolidated financial statements included in the 2025

Annual Report on Form 10-K.

For residential mortgage and consumer loans, the Corporation evaluates

credit quality based on its interest accrual status.

Based on

the most

recent analysis

performed, the

of commercial

loans by portfolio

by

origination year

the internal

credit-risk category

as of

gross charge

-offs for

period

by portfolio

by origination

year, and

the amortized

cost of

by portfolio classes based on the internal credit-risk category as of December

31, 2025, were as follows:

As of

Puerto Rico and Virgin Islands Region

(1)

Prior

Loans

Total

Total

Pass

$

7,432

$

25,799

$

135,520

$

8,340

$

1,327

$

1,435

$

$

179,853

$

258,104

29,250

29,250

4,201

1,259

5,460

5,536

$

7,432

$

25,799

$

135,520

$

41,791

$

1,327

$

2,694

$

$

214,563

$

263,640

$

$

$

$

$

$

$

$

Pass

$

228,016

$

209,677

$

294,975

$

207,452

$

318,464

$

537,905

$

8,700

$

1,805,189

$

1,741,159

3,244

3,495

3,588

13,867

14,275

19,180

$

228,016

$

209,928

$

294,975

$

211,104

$

318,464

$

551,772

$

8,700

$

1,822,959

$

1,763,927

$

$

$

$

$

$

$

$

C&I

Pass

$

418,721

$

463,123

$

242,760

$

117,900

$

228,238

$

287,816

$

801,568

$

2,560,126

$

2,440,152

1,589

33,162

34,751

40,643

1,689

26,269

7,446

35,699

38,207

$

418,721

$

464,812

$

242,792

$

119,647

$

228,343

$

314,085

$

842,176

$

2,630,576

$

2,519,002

$

$

$

$

$

$

$

$

As of

Florida Region

(1)

Prior

Loans

Total

Total

Pass

$

$

2,479

$

$

$

$

$

$

3,124

$

1,928

$

$

2,479

$

$

$

$

$

$

3,124

$

1,928

$

$

$

$

$

$

$

$

Pass

$

116,914

$

163,830

$

46,876

$

25,616

$

168,709

$

201,598

$

41,943

$

765,486

$

771,997

11,907

11,907

1,802

16,476

19,041

18,328

$

116,914

$

175,737

$

48,678

$

25,616

$

185,185

$

202,361

$

41,943

$

796,434

$

790,325

$

$

$

$

$

$

$

$

C&I

Pass

$

179,076

$

289,955

$

252,465

$

140,548

$

102,182

$

93,738

$

203,571

$

1,261,535

$

1,154,271

24,395

24,395

14,898

11,239

13,122

3,970

28,494

$

179,076

$

289,955

$

288,099

$

140,548

$

115,304

$

93,901

$

207,541

$

$

$

$

$

$

$

$

$

$

As of

Total

(1)

Prior

Loans

Total

Total

Pass

$

7,432

$

28,278

$

136,165

$

8,340

$

1,327

$

1,435

$

$

182,977

$

260,032

29,250

29,250

4,201

1,259

5,460

5,536

$

7,432

$

28,278

$

136,165

$

41,791

$

1,327

$

2,694

$

$

217,687

$

265,568

$

$

$

$

$

$

$

$

Pass

$

344,930

$

373,507

$

341,851

$

233,068

$

487,173

$

739,503

$

50,643

$

2,570,675

$

2,513,156

12,158

3,244

15,402

3,588

1,802

16,476

14,630

33,316

37,508

$

344,930

$

385,665

$

343,653

$

236,720

$

503,649

$

754,133

$

50,643

$

$

$

$

$

$

$

$

$

$

C&I

Pass

$

597,797

$

753,078

$

495,225

$

258,448

$

330,420

$

381,554

$

1,005,139

$

3,821,661

$

3,594,423

24,395

1,589

33,162

59,146

55,541

1,689

11,271

13,227

26,432

11,416

64,193

38,394

$

597,797

$

754,767

$

530,891

$

260,195

$

343,647

$

407,986

$

1,049,717

$

$

$

$

$

$

$

$

$

$

tables present the

amortized cost of

loans by portfolio

classes and by

origination year

accrual

status as

of

30,

2026,

the

gross charge

-offs

for

the

period

ended

30,

2026 by

origination

year, and the amortized cost of residential mortgage

loans by portfolio classes based on accrual status as of December 31, 2025:

As of

Puerto Rico and Virgin Islands Region

(1)

Prior

Loans

Total

Total

$

$

$

$

1,694

$

1,355

$

82,511

$

$

86,161

$

87,635

$

$

$

$

1,694

$

1,355

$

82,511

$

$

86,161

$

87,635

$

186,596

$

228,024

$

167,654

$

146,744

$

136,132

$

1,435,191

$

$

2,300,341

$

2,271,925

16,612

17,243

18,044

$

186,596

$

228,063

$

167,853

$

146,744

$

136,525

$

1,451,803

$

$

2,317,584

$

2,289,969

Total

$

186,596

$

228,344

$

167,935

$

148,438

$

137,487

$

1,517,702

$

$

2,386,502

$

2,359,560

16,612

17,243

18,044

$

186,596

$

228,383

$

168,134

$

148,438

$

137,880

$

1,534,314

$

$

2,403,745

$

2,377,604

$

$

$

$

$

$

$

$

(1)

As of

Florida Region

(1)

Prior

Loans

Total

Total

$

$

$

$

$

$

1,308

$

$

1,308

$

1,085

$

$

$

$

$

$

1,308

$

$

1,308

$

1,085

$

58,411

$

67,902

$

77,679

$

68,586

$

57,907

$

201,705

$

$

532,190

$

518,488

1,527

1,086

3,590

6,701

11,125

$

58,411

$

68,224

$

77,855

$

70,113

$

58,993

$

205,295

$

$

538,891

$

529,613

Total

$

58,411

$

67,902

$

77,679

$

68,586

$

57,907

$

203,013

$

$

533,498

$

519,573

1,527

1,086

3,590

6,701

11,125

$

58,411

$

68,224

$

77,855

$

70,113

$

58,993

$

206,603

$

$

540,199

$

530,698

$

$

$

$

$

$

$

$

(1)

As of

Total

(1)

Prior

Loans

Total

Total

$

$

$

$

1,694

$

1,355

$

83,819

$

$

87,469

$

88,720

$

$

$

$

1,694

$

1,355

$

83,819

$

$

87,469

$

88,720

$

245,007

$

295,926

$

245,333

$

215,330

$

194,039

$

1,636,896

$

$

2,832,531

$

2,790,413

1,527

1,479

20,202

23,944

29,169

$

245,007

$

296,287

$

245,708

$

216,857

$

195,518

$

1,657,098

$

$

2,856,475

$

2,819,582

Total

$

245,007

$

296,246

$

245,614

$

217,024

$

195,394

$

1,720,715

$

$

2,920,000

$

2,879,133

1,527

1,479

20,202

23,944

29,169

$

245,007

$

296,607

$

245,989

$

218,551

$

196,873

$

1,740,917

$

$

$

$

$

$

$

$

$

$

$

1,032

(1)

The

tables present

the

cost

of

loans

by

classes

and

by origination

year

accrual

status as

the gross

for the

by portfolio

by origination year, and the amortized

cost of consumer loans by portfolio classes based on accrual status as of December 31,

2025:

As of

Total

(1)

Prior

Loans

Total

Total

$

438,922

$

500,488

$

417,002

$

296,819

$

208,622

$

146,064

$

$

2,007,917

$

2,028,346

1,756

2,066

2,608

2,159

3,428

12,471

14,665

Total auto loans

$

439,376

$

502,244

$

419,068

$

299,427

$

210,781

$

149,492

$

$

2,020,388

$

2,043,011

Charge-offs on auto loans

$

$

4,792

$

5,842

$

6,338

$

3,563

$

3,083

$

$

24,394

$

170,883

$

199,831

$

177,796

$

167,336

$

103,014

$

44,757

$

$

863,617

$

888,529

1,125

3,050

3,510

Total finance leases

$

170,883

$

199,991

$

178,198

$

168,190

$

103,523

$

45,882

$

$

866,667

$

892,039

Charge-offs on finance leases

$

$

$

1,747

$

2,526

$

1,747

$

1,576

$

$

8,519

$

101,501

$

85,806

$

60,324

$

48,537

$

27,799

$

6,955

$

$

330,922

$

333,364

1,581

1,792

Total personal loans

$

101,578

$

86,169

$

60,608

$

49,047

$

28,057

$

7,044

$

$

332,503

$

335,156

Charge-offs on personal loans

$

$

2,122

$

3,445

$

3,768

$

2,382

$

$

$

12,571

$

$

$

$

$

$

$

274,005

$

274,005

$

293,088

Total credit cards

$

$

$

$

$

$

$

274,005

$

274,005

$

293,088

Charge-offs on credit cards

$

$

$

$

$

$

$

13,771

$

13,771

$

60,994

$

34,038

$

18,810

$

11,913

$

4,556

$

3,326

$

9,788

$

143,425

$

144,115

1,488

1,467

Total other consumer loans

$

61,202

$

34,508

$

19,114

$

12,092

$

4,615

$

3,352

$

10,030

$

144,913

$

145,582

Charge-offs on other consumer loans

$

$

4,942

$

3,091

$

1,818

$

$

$

$

11,545

Total

$

772,300

$

820,163

$

673,932

$

524,605

$

343,991

$

201,102

$

283,793

$

3,619,886

$

3,687,442

2,749

3,056

4,151

2,985

4,668

18,590

21,434

Total consumer loans

$

773,039

$

822,912

$

676,988

$

528,756

$

346,976

$

205,770

$

284,035

$

$

Charge-offs on total consumer loans

$

1,477

$

12,713

$

14,125

$

14,450

$

8,335

$

5,595

$

14,105

$

70,800

(1)

As of September 30, 2026 and December 31, 2025, the balance of revolving

loans converted to term loans was

no

t material.

Accrued interest

receivable on loans

totaled $

60.3

($

58.7

December 31, 2025),

was

reported as part

of accrued interest receivable

on loans and

investment securities in

the consolidated statements

of financial condition,

and is excluded from the estimate of credit losses.

The

tables

present

about

loans

that

were

individually

evaluated

for

purposes

of

determining the ACL as of September 30, 2026 and December

31, 2025:

Collateral Dependent Loans -

With Allowance

Collateral Dependent

Loans - With No

Related Allowance

Collateral Dependent Loans - Total

Related

Related

Residential mortgage loans:

$

20,457

$

1,327

$

$

20,457

$

1,327

4,201

5,157

18,365

18,365

4,928

20,606

25,534

$

29,586

$

2,643

$

39,927

$

69,513

$

2,643

Collateral Dependent Loans -

With Allowance

Collateral Dependent

Loans - With No

Related Allowance

Collateral Dependent Loans - Total

Related

Related

Residential mortgage loans:

$

22,919

$

1,233

$

$

22,919

$

1,233

4,321

5,277

4,454

19,009

23,463

13,753

13,753

$

31,694

$

1,990

$

33,718

$

65,412

$

1,990

The

for

and

loans consisted

of

single-family

properties,

and for

consisted primarily

of office

buildings, multifamily

residential properties,

and

retail establishments. The weighted-average

loan-to-value coverage for collateral

dependent loans as of September

30, 2026 was

%,

% as of December 31, 2025.

Purchases and Sales of Loans

In

the

ordinary

course

of

business,

the

enters

into

securitization

and

whole

loan

sales

with

GNMA

and

GSEs,

such

as

Federal

National

Association

(“FNMA”)

and

Federal

Home

Loan

(“FHLMC”).

During the first nine months

of 2026 and 2025, loans

pooled into GNMA MBS amounted

to approximately $

122.5

120.2

for

which

the

a

net

gain

on

sale

of

$

6.1

million

and

$

4.4

Also,

during

the

first

nine

months

of

and

2025,

the

sold

$

9.5

million

and

$

8.8

of

performing

loans

to

GSEs,

for

which

the

a

net

gain

on

sale

of

$

0.3

million

and

$

0.4

The Corporation’s continuing

involvement with the loans that it

sells consists primarily of servicing

the loans. In

the

agrees

to

loans

if

it

breaches

any

of

the

representations

and

warranties

in

the

sale

agreement. These

representations and

warranties are consistent

with the GSEs’

selling and servicing

guidelines (

i.e.

, ensuring that

the

mortgage was properly underwritten according to established guidelines).

For loans

pooled into

GNMA MBS,

the Corporation,

as servicer,

holds an

option to

repurchase individual

delinquent loans

issued

on or after

January 1, 2003,

when certain delinquency

criteria are met. This

option gives the

Corporation the unilateral

ability,

but not

the obligation, to

repurchase the delinquent

loans at par without

prior authorization from

GNMA. Since the

Corporation is considered

to

have

regained

control

over

the

loans,

it

is

to

recognize

the

loans

and

a

regardless of its

intent to repurchase

the loans. As

rebooked GNMA delinquent

loans

that were included in the residential mortgage loan portfolio amounted

to $

5.2

6.7

During

each

of

the

periods

ended

30,

and

2025,

the

repurchased,

pursuant

to

the

aforementioned repurchase

option $

1.3

million of

loans previously

pooled into

GNMA MBS.

The principal

balance of

these loans

is

fully

guaranteed,

and

the

risk

of

loss

related

to

the

loans

is

limited

to

the

between

the

interest payment

advanced

to GNMA,

which

is computed

at the

loan’s

interest rate,

and

the interest

reimbursed

by FHA,

computed at

a pre-determined

debenture rate.

Repurchases of

GNMA loans

allow the

Corporation, among

to

maintain acceptable delinquency

rates on outstanding GNMA

pools and remain as

a seller and servicer

in good standing with

GNMA.

Historically, losses

on these repurchases of

GNMA delinquent loans have

been immaterial and no provision has

been made at the time

of sale.

Loan sales to FNMA and

FHLMC are without recourse

in relation to the future

performance of the loans.

risk of

loss

with

respect

to

these

loans

is

also

minimal

as

these

loans

are

performing

loans

with

documentation

deficiencies.

During

the

first

nine

months

of

2026,

the

C&I

loan

participations

in

the

Florida

region

totaling

$

179.4

Meanwhile,

during

the

first

nine

months

of

2025,

the

C&I

loan

participations

in

region

totaling $

98.6

million, and a commercial mortgage loan in the Puerto Rico region totaling $

20.0

2025, the

Corporation recognized

recoveries of

$

2.4

a bulk

sale of

fully charged-off

leases.

no significant

loans during

other than

conforming residential mortgage loans mentioned above.

Loan Portfolio Concentration

primary

lending area

is Puerto

Rico. The

FirstBank, also

lends in

the USVI

and the BVI markets and

in the United States (principally

in the state of Florida).

Of the total gross loans held

for investment portfolio

of $

13.4

billion as of

credit risk concentration

was approximately

% in Puerto

Rico,

% in the

U.S., and

%

in the USVI and the BVI.

As of

30,

2026,

had $

292.2

million outstanding

in loans

extended

to the

Puerto

Rico government,

its

and

public

corporations,

to

$

215.5

million

as

of

31,

The

of

$

222.9

million in municipal

loans supported

by assigned tax

revenues, generally

the municipalities’

good faith, credit,

and

unlimited taxing

power, and

$

15.9

million supported

by one or

more specific sources

of municipal

revenues. The remaining

included $

8.5

million in a

loan to an

affiliate of

the Puerto Rico

Electric Power

Authority (“PREPA”)

and $

44.9

million in loans

to a

Puerto Rico public corporation.

Moreover,

as of

outstanding balance

of construction

loans funded

through conduit

financing structures

to

support

the

federal

of

Low-Income

Housing

Tax

Credit

(“LIHTC”)

combined

with

other

federal

to

$

78.4

to $

92.4

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

institutions

and

are

to

co-underwrite

with

PRHFA

a

mirror

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.

In

as

of

30,

2026,

the

had

$

63.6

million

in

to

loans

that

are

guaranteed by the

PRHFA, a

government instrumentality

that has been designated

as a covered

entity under PROMESA,

$

67.1

million

as

of

31,

loans

by

the

PRHFA

are

secured

by

the

properties and the guarantees serve to cover shortfalls in collateral in the event

of a borrower default.

The

also

has

credit

to

USVI

entities.

As

of

30,

2026,

the

had

$

165.0

million in loans

to USVI government

public corporations, compared

to $

138.7

31, 2025. As of

2026, all loans were currently performing and up to date on principal

and interest payments.

Loss Mitigation Program for Borrowers Experiencing

Financial Difficulty

The Corporation provides assistance to

its customers through a loss mitigation

program. Depending upon the

nature of a borrower’s

or

loan

through

this

program

are

provided,

as

well

as

other

of

C&I,

mortgage,

construction,

and

loans.

The

may

also

modify

terms to comply with regulations regarding the treatment of certain bankruptcy

filings and discharge situations.

The

loan

granted

to

that

are

with

payment

delays

include the following:

Forbearance plans –

Payments of either interest

and/or principal are

deferred for a pre-established

period of time, generally

not

exceeding

six

months

in

any

given

year.

The

and/or

is

repaid

as

either

a

lump

sum

payment

at

maturity date or by extending the loan’s

maturity date by the number of forbearance months granted.

Payment

plans

–

Borrowers

are

allowed

to

pay

the

regular

monthly

payment

plus

the

pre-established

amounts

during a period generally not exceeding

six months.

At the end of the payment plan, the

borrower is required to resume making

its regularly scheduled loan payments.

Trial

–

These

types

of

loan

are granted

for

loans

and

home

equity

lines of

credit. Borrowers

continue making reduced monthly

payments during the

trial period, which is

generally up to six

months. The

reduced

that

are

made

by

the

borrower

during

the

trial

period

will

result

in

a

payment

delay

with

respect

to

the

original contractual terms of

the loan since the loan has

not yet been contractually

modified. After successful completion

of the

trial period, the mortgage loan is contractually modified.

Modifications

in the

form

of a

rate,

term extension,

change in

amortization

term,

an other

-than-insignificant

payment

delay,

or

any

combination

of

these

types

of

loan

that

have

occurred

in

the

current

period

for

a

borrower

are

disclosed

in

the

tables

below.

Many

factors

are

when

evaluating

whether

there is

an other-than-insignificant

payment delay,

such as

the significance

of the

restructured payment

amount relative

to the

unpaid

principal balance or collateral value of the loan or the relative significance of

the delay to the original loan terms.

The

below

relate

to

loan

granted

to

in

which

there

was

a

change

in

the

timing

and/or

amount

of

cash

flows

in

the

form

of

any

of

the

types

of

modifications,

that

resulted

in

a

more-than-insignificant

payment

delay.

These

exclude

$

1.5

million

and

$

4.5

million in restructured

loans that are

government-guaranteed (e.g.

FHA/VA

loans) and were

modified during the

quarter

to $

1.6

$

4.6

million for

the comparable

The

tables

present

the

cost

basis

as

of

30,

and

of

loans

to

experiencing financial difficulty

during the quarters

and nine-month periods

2026 and 2025,

by portfolio classes

and type

of modification

granted, and

the percentage

of these

loans relative

to the

total period-end

basis of

receivables in the portfolio class:

Payment

Plan

Trial

term

Term

Rate

Other

Total

Classes

$

$

$

$

$

$

$

$

$

0.01%

0.00%

2,841

(1)

(2)

1,726

4,593

0.12%

(3)

1,495

0.07%

0.03%

(2)

0.17%

0.04%

$

$

2,841

$

$

$

$

$

2,155

$

$

7,191

Payment

Plan

Trial

Term

Term

Rate

Other

Total

Classes

$

$

$

$

$

$

$

$

$

0.02%

0.01%

(1)

1,377

0.07%

0.04%

(2)

0.32%

(1)

0.04%

$

$

$

$

$

$

$

$

$

3,483

Payment Plan

Trial

Term

Term

Rate

Other

Total

Classes

$

$

$

$

$

$

$

$

0.02%

0.00%

0.03%

3,138

(1)

(2)

2,188

5,363

0.14%

1,940

(3)

2,937

0.15%

0.11%

1,576

(2)

1,576

0.58%

0.09%

$

3,500

$

$

$

1,613

$

$

3,508

$

1,940

$

11,774

Payment

Plan

Trial

Term

Term

Rate

Other

Total

Classes

$

$

$

$

$

$

$

$

1,047

0.04%

30,166

30,166

1.18%

(4)

1,008

(3)

1,301

0.04%

2,428

(3)

3,243

0.16%

0.13%

2,942

(2)

2,942

1.00%

(3)

0.24%

$

$

$

30,166

$

2,942

$

2,229

$

$

2,479

$

39,475

(1)

Modification consists of a repayment plan and the permanent revocation of revolving utilization privileges of a C&I line of credit.

(2)

Modification consists of reduction in interest rate and revocation of revolving utilization privileges.

(3)

Modification consists of court mandated reduction to 0% interest rate for remaining loan term to borrowers in bankruptcy proceedings unless dismissal occurs.

(4)

Modification consists of a six-month deferral of principal and interest to be repaid on or before the end of the forbearance

plan.

The

tables

present

by

classes

the

effects

of

the

granted

to

financial difficulty,

other than

those associated

to payment

delay,

and

The

effects

of

the

to

payment

delay

were

discussed

above

and,

as

such,

were

excluded from the tables below:

months)

months)

%

%

%

%

%

%

11.25

%

2.42

%

%

3.16

%

%

5.83

%

14.67

%

%

%

4.45

%

months)

months)

%

%

%

%

%

%

%

%

%

3.09

%

%

4.59

%

15.64

%

%

%

%

months)

months)

%

2.00

%

%

%

%

3.25

%

13.68

%

2.38

%

%

3.25

%

2.74

%

5.71

%

14.50

%

%

%

3.73

%

months)

months)

%

%

%

%

%

%

%

0.50

%

%

3.03

%

%

4.57

%

15.67

%

%

%

3.01

%

The

tables

present

by

classes

the

of

loans

during

the

last

twelve

months

ended

September 30, 2026 and 2025 that were granted to borrowers experiencing

financial difficulty:

Last Twelve Months Ended September 30, 2026

30-59

60-89

90+

Total

Delinquency

Current

Total

$

$

$

$

$

$

1,029

5,714

5,714

3,456

3,803

1,762

2,182

$

$

$

$

1,125

$

13,101

$

14,226

Last Twelve Months Ended September 30, 2025

30-59

60-89

90+

Total

Delinquency

Current

Total

$

$

$

$

$

1,119

$

1,234

42,086

42,086

6,939

6,965

3,823

4,123

2,900

3,675

$

$

$

$

1,380

$

57,640

$

59,020

NOTE 4 – ALLOWANCE

FOR CREDIT LOSSES FOR LOANS AND FINANCE LEASES

The following tables present the activity in the ACL on loans and finance leases by

portfolio segment for the indicated periods:

Loans

Loans

Leases

Loans

C&I

Loans

Total

ACL:

$

42,758

$

2,329

$

23,506

$

42,959

$

133,487

$

245,039

(1,900)

(53)

(2,731)

3,240

16,321

14,877

(373)

(193)

(228)

(23,349)

(24,143)

5,560

5,900

$

40,698

$

2,334

$

20,617

$

46,005

$

132,019

$

241,673

Loans

Loans

Loans

C&I

Loans

Leases

Total

ACL:

$

42,448

$

4,551

$

22,746

$

39,359

$

139,474

$

248,578

(2,208)

2,503

(1,397)

18,876

18,270

(459)

(173)

(24,553)

(25,185)

4,341

5,327

$

40,272

$

5,360

$

25,366

$

37,854

$

138,138

$

246,990

Loans

Loans

Loans

C&I

Loans

Leases

Total

ACL:

$

41,071

$

5,672

$

23,832

$

41,416

$

137,046

$

249,037

(358)

(3,422)

(2,690)

5,351

49,124

48,005

(1,032)

(755)

(948)

(70,800)

(73,535)

1,017

16,649

18,166

$

40,698

$

2,334

$

20,617

$

46,005

$

132,019

$

241,673

Loans

Loans

Loans

C&I

Loans

Leases

Total

ACL:

$

40,654

$

3,824

$

22,447

$

33,034

$

143,983

$

243,942

(411)

1,196

2,711

4,091

55,901

63,488

(979)

(316)

(76,629)

(77,924)

1,008

1,045

14,883

(1)

17,484

$

40,272

$

5,360

$

25,366

$

37,854

$

138,138

$

246,990

(1)

Includes recoveries totaling $

2.4

million associated with the bulk sale of fully charged-off consumer loans and finance leases.

The

the

ACL

the

methodologies

described

in

Note

–

of

and

Summary

of

Significant Accounting

Policies” to the

audited consolidated

included in

the 2025

Form 10-K,

as updated by the information contained in this report, for each portfolio segment.

generally applies

probability weights

to the

baseline and

alternative downside

economic scenarios

to estimate

the

ACL with

the

the highest

weight.

The

chosen each

quarter

and

the

weighting

given

to

each

for

the

loan

categories

depend

on

a

variety

of

factors

recent

events,

leading

and regional

economic indicators,

and industry

trends. As

applied

100%

to

the

for

the

and

loan

since

certain

macroeconomic variables

associated with

commercial real

estate property

performance and

the commercial

real estate

(“CRE”) price

index,

in

the

Puerto

Rico

region,

are

to

to

perform

in

a

more

manner

than

the

downside economic scenario.

As of September 30, 2026, the ACL for loans and finance leases was $

241.7

million, a decrease of $

7.3

million from $

249.0

million

as of

related

to a

$

4.9

million

the ACL

for

finance

leases, driven

by lower

levels in

the unsecured

loan portfolios

and improvements

in macroeconomic

variables, partially

offset by higher reserves in

the auto loan portfolio due to updated

loss expectations based on recent portfolio performance.

the

ACL

for

and

loans

by

$

2.0

driven

by

an

improvement

in

the

of

certain

variables,

offset

by

loan

growth

and

changes

in

the

of

certain

borrowers.

Also,

the

ACL for

loans decreased

by $

0.4

million, driven

by updated

historical loss

experience used

for determining

the

ACL, resulting in a downward

revision of estimated loss severities

and lower reserve levels,

as well as improvements in

the projection

of the unemployment rate and the House Price Index, partially offset

by loan growth.

were $

18.2

55.4

million for the third

quarter and first

nine months of

2026, respectively,

$

19.9

million

and $

60.4

for the

The $

1.7

for the

of 2026

a

$

2.4

million

in

finance

leases net

across

all major

classes.

The $

5.0

for the nine-month

period was driven

by a $

7.6

million reduction in

and finance leases

net

across all major

portfolio classes,

after considering

the impact of

$

2.4

million in recoveries

the bulk sale during the first

quarter of 2025. This decrease

was partially offset by

a $

0.9

million reduction in C&I recoveries

and $

0.8

million in charge-offs on a nonaccrual commercial

mortgage loan in the Virgin

Islands region during the first nine months of 2026.

The tables below present the

ACL related to loans and

finance leases and the carrying

values of loans by portfolio

segment as of

September 30, 2026 and December 31, 2025:

Loans

Loans

Loans

C&I

Loans

Leases

Total

$

$

217,687

$

$

$

$

40,698

2,334

20,617

46,005

132,019

241,673

Allowance for credit losses to

1.38

%

1.07

%

0.79

%

1.17

%

3.63

%

1.81

%

Loans

Loans

Loans

C&I

Loans

Leases

Total

$

$

265,568

$

$

$

$

41,071

5,672

23,832

41,416

137,046

249,037

Allowance for credit losses to

1.41

%

2.14

%

0.93

%

1.12

%

3.70

%

1.90

%

In

the

credit

losses

over

the

period

in

which

the

is

exposed

to

credit

risk

via

a

to

extend

credit,

such

as

unfunded

loan

and

standby

letters

of

credit

for

and

loans,

unless

the

is

unconditionally

cancellable

by

the

Corporation.

See

Note

–

“Regulatory Matters, Commitments

and Contingencies” for

information on off

-balance sheet exposures

Corporation estimates

the ACL

for these

sheet exposures

following the

methodology described

in

Note

1 –

of Business

and

Summary

of Significant

Accounting

Policies”

to

the audited

in

the

Annual

Report

on

Form

10-K.

As

of

30,

2026,

the

ACL

for

sheet

credit

increased to

$

4.5

to $

3.0

primarily driven

by renewals

of existing

C&I lines

of

credit.

the activity

in the

ACL for

standby letters

for the

$

4,599

$

3,367

$

3,013

$

3,143

(120)

(756)

1,466

(532)

$

4,479

$

2,611

$

4,479

$

2,611

NOTE 5

–

OTHER REAL ESTATE

OWNED (“OREO”)

The following table presents the OREO inventory as of the indicated dates:

OREO balances, carrying value:

(1)

$

4,586

$

6,524

Total

$

5,629

$

7,522

(1)

Excludes $

1.5

4.1

million as of September

30, 2026 and December

31, 2025, respectively,

of foreclosures that met

the conditions of ASC Subtopic

310-40 “Reclassification

of Residential Real Estate Collateralized Consumer

Mortgage Loans upon Foreclosure,” and

are presented as a receivable as part

of other assets in the consolidated statements

of financial

condition.

See Note 14 – “Fair

Value”

for information on subsequent

measurement adjustments recorded

on OREO properties reported

as part

of “Net (gain)

loss on OREO

operations” in

statements of income

ended

September 30, 2026 and 2025.

NOTE 6 – DEPOSITS

The following table summarizes deposit balances as of the indicated dates:

Type of account:

Non-interest-bearing deposit accounts

$

5,465,908

$

5,549,416

Interest-bearing checking accounts

3,613,874

3,512,649

Interest-bearing saving accounts

3,450,994

3,452,192

3,787,656

3,562,331

600,204

593,555

Total

$

$

the remaining

contractual maturities

of time

deposits, including

CDs, as

30,

2026:

Total

Three months or less

$

1,085,861

Over three months to six months

951,010

Over six months to one year

1,402,572

705,395

Over two years to three years

138,630

Over three years to four years

39,217

Over four years to five years

49,467

Over five years

15,708

Total

$

4,387,860

Total

Puerto

Rico

and

U.S.

time

with

of

more

than

$250,000

to

$

1.9

billion

and

$

1.8

billion

as

of

and December 31,

2025, respectively.

This amount does

not include brokered

CDs that are generally

out by brokers in shares

of less than the FDIC insurance

limit. As of September 30,

2026 and December 31, 2025,

unamortized broker

placement

fees

to

$

0.6

million

and

$

0.9

which

are

over

the

of

the

brokered CDs under the interest method.

NOTE 7 – BORROWINGS

As of September 30, 2026 and December 31, 2025, total borrowings consisted

of FHLB advances as set forth below:

Long-term

Fixed

-rate advances from the FHLB

(1)

$

200,000

$

290,000

(1)

Weighted-average interest rate of

4.25

% and

4.32

% as of September 30, 2026 and December 31, 2025, respectively. Contractual

maturity date of November 2027

as of September 30, 2026.

Advances from the FHLB mature as follows as of the indicated date:

(1)

$

200,000

(1) Average remaining term to maturity of

1.14

years.

Securities Sold Under Agreement to Repurchase (“Repurchase Agreement”)

As of

30,

2026,

had

a

$

23.8

million

with

Citigroup

at

an

rate

of

4.01

%,

maturing

in

The

the

were

delivered

to

the

in

accordance with the terms of the repurchase agreement.

NOTE 8 – EARNINGS PER COMMON

.

SHARE

The calculations of earnings per

common share for the quarters

and nine-month periods ended

September 30, 2026 and 2025

are as

follows:

Net income attributable to common stockholders

$

96,115

$

100,526

$

281,047

$

257,765

Shares:

Average common

shares outstanding

151,096

159,291

153,259

161,023

Average potential

dilutive common shares

Average common

shares outstanding - assuming dilution

151,950

160,087

154,056

161,770

Earnings per common share:

Basic

$

0.64

$

0.63

$

1.83

$

1.60

Diluted

$

0.63

$

0.63

$

1.82

$

1.59

Earnings

per

common

share

is

computed

by

dividing

net

income

to

common

stockholders

by

the

number

of

common

shares

issued

and

outstanding.

Basic

common

shares

exclude

unvested shares

of

restricted stock that do not contain non-forfeitable dividend rights

.

Potential dilutive

common

shares consist

of unvested

stock

and

units (if

any

of the

are

met

as

of

the

end

of

the

period)

that

do

not

contain

non-forfeitable

or

rights

using the

treasury stock

method. This

method assumes

that proceeds

equal to

the amount

of compensation

cost attributable

to future

is

used

to

shares

on

the

open

market

at

the

average

market

price

for

the

period.

The

between

the

number

of

dilutive

shares

issued

and

the

shares

is

added

as

incremental

shares

to

the

actual

number

of

shares

to

compute

diluted

per

share.

Unvested

shares

of

stock

during

the

period

that

result

in

lower potentially

dilutive shares issued

than shares purchased

treasury stock method

are not included

in the computation

of

dilutive

per

share

since

their

inclusion

would

have an

antidilutive

effect

on

per

share.

There

were

no

antidilutive

shares of common stock during the quarters and nine-month periods

ended September 30, 2026 and 2025.

NOTE 9 – STOCK-BASED

.

COMPENSATION

The

Omnibus Incentive

Plan (the

“2026

Omnibus

Plan”),

which

became effective

on May

6, 2026

and

will

remain

in

effect

through