First BanCorp : Q1 2023

NEWS RELEASE

FIRST BANCORP. ANNOUNCES EARNINGS

FOR THE QUARTER ENDED MARCH 31, 2023

• Net income of $70.7 million, or $0.39 per diluted share, for the first quarter of 2023, compared to $73.2 million, or $0.40 per diluted share, for the fourth quarter of 2022. Income before income taxes of $102.6 million for the first quarter of 2023, compared to $106.5 million for the fourth quarter of 2022. Return on average assets for the first quarter of 2023 remains strong at 1.55%.
• On a non-GAAP basis, pre-tax,pre-provision income of $118.1 million for the first quarter of 2023, compared to pre-tax, pre- provision income of $122.2 million for the fourth quarter of 2022.
• Net interest income of $200.9 million for the first quarter of 2023, compared to $205.6 million for the fourth quarter of 2022. The results for the first quarter of 2023 include a reduction of approximately $2.5 million in net interest income associated to the effect of two fewer days. In addition, there was an increase in interest expense as a result of a higher cost of deposits combined with a higher level of borrowings, partially offset by the upward repricing of variable-rate commercial loans, higher yields in the consumer loan portfolios, and higher average loan balances.
• Net interest margin of 4.34% for the first quarter of 2023, compared to 4.37% for the fourth quarter of 2022, reflecting, among other things, the effect of the increase in borrowings in the first quarter and a 38 basis points increase in the average cost of interest-bearing deposits. These factors were partially offset by the upward repricing of variable-rate commercial loans, and the growth in higher yielding loans, primarily consumer loans.
• Provision for credit losses of $15.5 million for the first quarter of 2023, relatively flat compared to $15.7 million for the fourth quarter of 2022. The ratio of the ACL for loans and finance leases to total loans held for investment was 2.29% as of March 31, 2023, compared to 2.25% as of December 31, 2022.
• Non-interestincome increased to $32.5 million for the first quarter of 2023, compared to $29.6 million for the fourth quarter of 2022, mainly driven by seasonal contingent insurance commissions recorded in the first quarter of 2023.
• Non-interestexpenses increased by $2.4 million to $115.3 million for the first quarter of 2023, compared to $112.9 million for the fourth quarter of 2022, mainly driven by an increase in employees' compensation and benefits expense. The efficiency ratio for the first quarter of 2023 was 49.39%, compared to 48.02% for the fourth quarter of 2022.
• Income tax expense of $31.9 million for the first quarter of 2023, a decrease of $1.5 million, compared to $33.4 million for the fourth quarter of 2022, mainly related to lower pre-tax income when compared to the prior quarter.
• Credit quality variances:
• • Non-performingassets decreased by $0.2 million to $129.0 million as of March 31, 2023, mainly due to a $0.8 million decrease in non-performing loans. The decline in non-performing loans was mainly related to a $6.3 million decrease in nonaccrual residential mortgage loans mainly due to loans restored to accrual status, partially offset by an increase of $4.4 million in nonaccrual commercial and construction loans, mainly due to the inflow of a $7.1 million commercial and industrial loan in the Florida region in the power generation industry.
  • Annualized net charge-offs to average loans ratio remained flat at 0.46% for both the first quarter of 2023 and fourth quarter of 2022.
• Total loans increased $28.0 million from the prior quarter to $11.6 billion as of March 31, 2023. The increase consisted of $79.5 million growth in consumer loans, primarily auto loans and leases, partially offset by decreases of $32.9 million in residential mortgage loans and $18.6 million in commercial and construction loans. The increase consisted of a $141.5 million growth in the Puerto Rico region, partially offset by decreases of $108.6 million in the Florida region and $4.9 million in the Virgin Islands region.
• Total loan originations, including refinancings, renewals, and draws from existing commitments (other than credit card utilization activity), amounted to $1.1 billion in the first quarter of 2023, a decrease of $237.8 million compared to the fourth

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quarter of 2022. The decline in total loan originations consisted of: (i) a $188.3 million decrease in commercial and construction loan originations; (ii) a $38.3 million decrease in residential mortgage loan originations; and (iii) an $11.2 million decrease in consumer loan originations.

• Total deposits, excluding brokered certificates of deposit ("brokered CDs") and government deposits, decreased by $142.7 million to $13.1 billion as of March 31, 2023, reflecting reductions of $139.4 million in the Florida region and $14.6 million in the Virgin Islands region, partially offset by an increase of $11.3 million in the Puerto Rico region.
• Government deposits, which are fully collateralized, decreased in the first quarter of 2023 by $95.9 million and totaled $2.7 billion as of March 31, 2023, or 16.7% of total deposits. The decrease in government deposits reflect reductions of $114.7 million in the Puerto Rico region and $0.3 million in the Florida region, partially offset by an increase of $19.1 million in the Virgin Islands region.
• Brokered CDs increased by $147.1 million during the first quarter of 2023 to $252.9 million as of March 31, 2023, or 1.6% of total deposits.
• Borrowings increased by $347.8 million during the first quarter of 2023 to $1.3 billion as of March 31, 2023, due to an increase of $250.0 million in Federal Home Loan Bank ("FHLB") advances and an increase of $97.8 million in securities sold under agreements to repurchase ("repurchase agreements"). The increase in borrowings was mostly a precautionary measure to increase available cash as a result of the recent runoff in bank deposits at some banking institutions in the United States.
• Cash and cash equivalents amounted to $823.6 million as of March 31, 2023. When adding $2.4 billion of free high-quality liquid securities that could be liquidated or pledged within one day, the total core liquidity amounted to $3.2 billion as of March 31, 2023, or 16.77% of total assets, compared to 19.02% as of December 31, 2022. Including the $882.5 million in available lending capacity at the FHLB, available liquidity increases to 21.42% as of March 31, 2023, compared to 22.48% as of December 31, 2022.
• During the first quarter of 2023, First BanCorp. repurchased approximately 3.6 million shares of common stock for a total purchase price of $50.0 million and increased quarterly dividends from $0.12 per share to $0.14 per share.
• Capital ratios exceed required regulatory levels for bank holding companies and well-capitalized banks. Estimated total capital, common equity tier 1 ("CET1") capital, tier 1 capital, and leverage ratios were 19.02%, 16.33%, 16.33%, and 10.57%, respectively, as of March 31, 2023. On a non-GAAP basis, the tangible common equity ratio was 7.12% as of March 31, 2023, compared to 6.81% as of December 31, 2022.

SAN JUAN, Puerto Rico - April 25, 2023 - First BanCorp. (the "Corporation" or "First BanCorp.") (NYSE: FBP), the bank holding company for FirstBank Puerto Rico ("FirstBank" or "the Bank"), today reported a net income of $70.7 million, or $0.39 per diluted share, for the first quarter of 2023, compared to $73.2 million, or $0.40 per diluted share, for the fourth quarter of 2022, and $82.6 million, or $0.41 per diluted share, for the first quarter of 2022.

Aurelio Alemán, President and Chief Executive Officer of First BanCorp., commented: "We begin 2023 with very encouraging financial results for the franchise which once again prove the resiliency of our business model amidst changing market conditions. We delivered a strong Return on Average Assets of 1.55%, further strengthened our liquidity position, and registered our fifth consecutive quarter of loan growth. We generated $70.7 million in net income and achieved a pre-taxpre-provision income of $118.1 million, up 6% when compared to the first quarter of 2022 and slightly down when compared to the previous quarter.

We registered healthy loan originations driven by steady consumer and commercial credit demand, particularly in Puerto Rico where commercial and consumer loans grew by $92.3 million and $78.9 million, respectively, during the quarter. Our credit metrics continued to improve with early delinquency indicators decreasing across most portfolios and non-performing assets registering a decrease to 0.68% of total assets. Core deposits, which exclude brokered and government deposits, decreased by $142.7 million during the quarter reflecting reductions of $139.4 million in Florida and $14.6 million in the Virgin Islands, partially offset by an increase of $11.3 million registered in Puerto Rico. Over two thirds of the deposit reduction took place in the first two months of the quarter and was primarily driven by Florida customers looking for higher yielding deposit alternatives outside the traditional banking sector. Our deposit base remained very stable following the March industry events as we opened more new deposit accounts during March than any of the prior twelve months. Our diversified deposit franchise is strategically distributed between retail and commercial customers, with low average balances per deposit account, and with over 70% of deposits insured or fully collateralized.

Finally, we continued to execute our capital deployment strategy by repurchasing approximately $50.0 million in shares of common stock and raising the common stock dividend by 17% to $0.14 per share during the quarter. Considering the industry-wide uncertain environment, we opted to pause share buybacks during the second quarter and we expect to resume share repurchases during the second

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half of the year. We believe that our robust capital and liquidity position coupled with our unwavering commitment to meet the banking needs of our customers will enable us to continue delivering shareholder value for the foreseeable future. We operate a well-diversified organization that serves as a vital source of credit to small businesses and consumers across multiple industries and are very fortunate to have their support and that of the communities we serve."

NON-GAAP DISCLOSURES

This press release contains GAAP financial measures and non-GAAP financial measures. Non-GAAP financial measures are used when management believes that the presentation of these non-GAAP financial measures enhances the ability of analysts and investors to analyze trends in the Corporation's business and understand the performance of the Corporation. The Corporation may utilize these non- GAAP financial measures as guides in its budgeting and long-term planning process. Where non-GAAP financial measures are used, the most comparable GAAP financial measure, as well as the reconciliation of the non-GAAP financial measure to the most comparable GAAP financial measure, can be found in the text or in the tables in or attached to this press release. Any analysis of these non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP.

Non-GAAP financial measures include adjusted pre-tax,pre-provision income, adjusted net interest income and margin, tangible common equity, tangible book value per common share, and certain capital ratios. These measures should be read in conjunction with the accompanying tables (Exhibit A), which are an integral part of this press release, and the Corporation's other financial information that is presented in accordance with GAAP.

Special Items

The financial results for the first quarter of 2023 and fourth and first quarters of 2022 did not include any significant Special Items.

Non-GAAP Financial Measures

Adjusted Pre-Tax,Pre-Provision Income

Adjusted pre-tax,pre-provision income is a non-GAAP performance metric that management uses and believes that investors may find useful in analyzing underlying performance trends, particularly in times of economic stress, including as a result of natural catastrophes or health epidemics. Adjusted pre-tax,pre-provision income, as defined by management, represents income before income taxes adjusted to exclude the provisions for credit losses on loans, unfunded loan commitments and debt securities and any gains or losses on sales of investment securities. In addition, from time to time, earnings are also adjusted for certain items that management believes are not reflective of core operating performance regarded as Special Items.

Tangible Common Equity Ratio and Tangible Book Value per Common Share

The tangible common equity ratio and tangible book value per common share are non-GAAP financial measures that management believes are generally used by the financial community to evaluate capital adequacy. Tangible common equity is total common equity less goodwill and other intangibles. Tangible assets are total assets less goodwill and other intangibles. Management uses and believes that many stock analysts use the tangible common equity ratio and tangible book value per common share in conjunction with other more traditional bank capital ratios to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, typically stemming from the use of the purchase method of accounting for mergers and acquisitions. Accordingly, the Corporation believes that disclosure of these financial measures may be useful to investors. Neither tangible common equity nor tangible assets, or the related measures, should be considered in isolation or as a substitute for stockholders' equity, total assets, or any other measure calculated in accordance with GAAP. Moreover, the manner in which the Corporation calculates its tangible common equity, tangible assets, and any other related measures may differ from that of other companies reporting measures with similar names.

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Net Interest Income Excluding Valuations, and on a Tax-Equivalent Basis

Net interest income, interest rate spread, and net interest margin are reported excluding the changes in the fair value of derivative instruments and on a tax-equivalent basis in order to provide to investors additional information about the Corporation's net interest income that management uses and believes should facilitate comparability and analysis of the periods presented. The changes in the fair value of derivative instruments have no effect on interest due or interest earned on interest-bearing liabilities or interest-earning assets, respectively. The tax-equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax- exempt assets and assumes a marginal income tax rate. Income from tax-exempt earning assets is increased by an amount equivalent to the taxes that would have been paid if this income had been taxable at statutory rates. Management believes that it is a standard practice in the banking industry to present net interest income, interest rate spread, and net interest margin on a fully tax-equivalent basis. This adjustment puts all earning assets, most notably tax-exempt securities and tax-exempt loans, on a common basis that management believes facilitates comparison of results to the results of peers.

INCOME BEFORE INCOME TAXES AND RECONCILIATION TO PRE-TAX,PRE-PROVISION INCOME (NON-GAAP)

Income before income taxes was $102.6 million for the first quarter of 2023, compared to $106.5 million for the fourth quarter of 2022. Pre-tax,pre-provision income was $118.1 million for the first quarter of 2023, compared to $122.2 million for the fourth quarter of 2022. Compared to the first quarter of 2022, pre-tax,pre-provision income increased 5.7%. The following table reconciles income before income taxes to pre-tax,pre-provision income for the last five quarters:

								Quarter Ended
		March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022			March 31, 2022
(Dollars in thousands)
Income before income taxes	$	102,633	$	106,530	$	106,631		$	108,798	$	125,625
Add/Less: Provision for credit losses expense (benefit)		15,502			15,712			15,783			10,003			(13,802)
Pre-tax,pre-provision income (1)	$	118,135		$	122,242		$	122,414		$	118,801		$	111,823
Change from most recent prior quarter (amount)	$	(4,107)	$	(172)	$	3,613		$	6,978	$	6,915
Change from most recent prior quarter (percentage)		-3.4%			-0.1%			3.0%			6.2%			6.6%

(1) Non-GAAP financial measure. See Non-GAAPDisclosures above for the definition and additional information about this non-GAAP financial measure.

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NET INTEREST INCOME

The following table sets forth information concerning net interest income for the last five quarters:

										Quarter Ended
(Dollars in thousands)		March 31,2023		December 31, 2022			September 30, 2022		June 30, 2022			March 31,2022
Net Interest Income
Interest income	$	242,396	$	233,452	$	222,683		$	208,625	$	197,854
Interest expense		41,511			27,879				14,773			12,439			12,230
Net interest income	$	200,885	$	205,573	$	207,910		$	196,186	$	185,624
Average Balances
Loans and leases	$	11,519,399	$	11,364,963	$	11,218,864		$	11,102,310	$	11,106,855
Total securities, other short-term investments and interest-bearing cash balances		7,232,347			7,314,293				7,938,530			8,568,022			8,647,087
Average interest-earning assets	$	18,751,746		$	18,679,256			$	19,157,394		$	19,670,332		$	19,753,942
Average interest-bearing liabilities	$	10,957,892	$	10,683,776	$	11,026,975		$	11,567,228	$	11,211,780
Average Yield/Rate
Average yield on interest-earning assets - GAAP		5.24%			4.96%				4.61%			4.25%			4.06%
Average rate on interest-bearing liabilities - GAAP		1.54%			1.04%				0.53%			0.43%			0.44%
Net interest spread - GAAP		3.70%			3.92%				4.08%			3.82%			3.62%
Net interest margin - GAAP			4.34%			4.37%				4.31%			4.00%			3.81%

Net interest income amounted to $200.9 million for the first quarter of 2023, a decrease of $4.7 million, compared to $205.6 million for the fourth quarter of 2022, which includes a net reduction of approximately $2.5 million associated to the effect of two fewer days. The decrease in net interest income reflects the following:

• An $8.8 million increase in interest expense on interest-bearing deposits, including:
• • A $4.7 million increase in interest expense on time deposits, excluding brokered CDs, mainly associated with higher rates being paid in the first quarter of 2023 on new issuances and renewals, and the increase of $161.4 million in the average balance, partially offset by the effect of two fewer days in the first quarter of 2023. The average cost of time deposits in the first quarter of 2023, excluding brokered CDs, increased 77 basis points to 1.87% as compared to the previous quarter.
  • A $2.8 million increase in interest expense on interest-bearing checking and saving accounts, of which approximately $4.0 million was driven by the increase in average rates paid in the first quarter, partially offset by a reduction of $364.9 million in the average balance of interest-bearing checking and saving accounts, which resulted in a decrease of approximately $0.8 million in interest expense, and the effect of two fewer days in the first quarter of 2023, which resulted in a reduction of approximately $0.4 million in interest expense.
  • A $1.3 million increase in interest expense on brokered CDs, mainly driven by the increase of $119.4 million in the average balance of brokered CDs, which resulted in additional interest expense of approximately $1.0 million, and the effect of higher rates paid in the first quarter of 2023.
• A $4.7 million increase in interest expense on FHLB advances mainly associated with an increase of $408.5 million in the average balance to provide for additional liquidity.

Partially offset by:

• A $4.8 million increase in interest income on commercial and construction loans, of which approximately $6.3 million was related to the effect of higher interest rates in the upward repricing of variable-rate loans and new loan originations, and approximately $1.0 million was related to the $57.9 million increase in the average balance of this portfolio. These variances were partially offset by the effects of two fewer days in the first quarter of 2023, which resulted in a reduction of approximately $1.9 million in interest income and a $0.6 million reduction in interest income from Small Business Administration Paycheck Protection Program loans.
• A $2.1 million increase in interest income on consumer loans and finance leases, primarily due to an increase of approximately $100.6 million in the average balance of this portfolio, which increased interest income by approximately $2.3 million, and a $1.2 million increase mainly due to the effects of higher yields in the auto loans and finance leases and credit card portfolios,