First BanCorp : Third Quarter 2023 Earnings Presentation

FINANCIAL RESULTS

3Q 2023

FORWARD LOOKING STATEMENTS

This presentation contains "forward-looking statements" concerning the Corporation's future economic, operational and financial performance. The words or phrases "expect," "anticipate," "intend," "should," "would," "will," "plans," "forecast," "believe" and similar expressions are meant to identify "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created by such sections. The Corporation cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date hereof, and advises readers that any such forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, estimates and assumptions by us that are difficult to predict. Various factors, some of which are beyond our control, including, but not limited to, the uncertainties more fully discussed in Part I, Item 1A, "Risk Factors" of the Corporation's Annual Report on Form 10-K for the year ended December 31, 2022, Part II Item 1A, "Risk Factors" of the Corporation's Quarterly Report on Form 10Q for the quarterly period ended March 31, 2023, and the following, could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements: the impacts of rising interest rates and inflation on the Corporation, including a decrease in demand for new loan originations and refinancings, increased competition for borrowers, attrition in deposits, a reduction in the fair value of the Corporation's debt securities portfolio, and an increase in non-interest expenses; volatility in the financial services industry, which could result in, among other things, bank deposit runoffs and liquidity constraints; uncertainty as to the ability of FirstBank to retain its core deposits and generate sufficient cash flow through its wholesale funding sources; adverse changes in general economic conditions in Puerto Rico, the U.S., and the U.S. and British Virgin Islands, including in the interest rate environment, unemployment rates, market liquidity, housing absorption rates, real estate markets and U.S. capital markets; general competitive factors, as well as the implementation of strategic growth opportunities and ability to continue to invest in capital projects; uncertainty as to the implementation of the debt restructuring plan of Puerto Rico and the Fiscal Plan for Puerto Rico as certified on April 3,2023 by the Financial Oversight and Management Board for Puerto Rico, or any revisions to it, on our clients and loan portfolios, and any potential impact from future economic or political developments and tax regulations in Puerto Rico; the impact of government financial assistance for hurricane recovery and other disaster relief on economic activity in Puerto Rico; the timing of sales of properties from our other real estate owned ("OREO") portfolio; any adverse change in the Corporation's ability to attract and retain clients and gain acceptance from current and prospective customers for new products and services, including those related to the offering of digital banking and financial services; the impacts of applicable legislative, tax or regulatory changes on the Corporation's financial condition or performance; and the effect of continued changes in the fiscal and monetary policies and regulations of the U.S. federal government and the Puerto Rico and other governments. The Corporation does not undertake, and specifically disclaims any obligation to update any "forward-looking statements" to reflect occurrences or unanticipated events or circumstances after the date of such statements, except as required by the federal securities laws.

Non-GAAP Financial Measures

In addition to the Corporation's financial information presented in accordance with GAAP, management uses certain "non-GAAP" financial measures" within the meaning of Regulation G promulgated by the SEC, to clarify and enhance understanding of past performance and prospects for the future. Please refer to pages 17-18 for a reconciliation of GAAP to non-GAAP measures and calculations.

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AGENDA

3Q 2023 Quarter Highlights

Aurelio Alemán, President and Chief Executive Officer

3Q 2023 Results of Operations

Orlando Berges, Executive Vice President and Chief Financial Officer

Questions and Answers

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THIRD QUARTER 2023

PERFORMANCE HIGHLIGHTS

Profitability

Asset Quality

Liquidity and

Capital

• Net income of $82.0 million ($0.46 per diluted share), compared to $70.7 million ($0.39 per diluted share) in 2Q 2023
• Return on average assets ("ROAA") remains strong at 1.72%, compared to 1.51% in 2Q 2023
• On a non-GAAP basis, adjusted pre-tax,pre-provision income of $113.4 million, compared to $118.0 million in 2Q 2023
• Net interest income of $199.7 million, compared to $199.8 million in 2Q 2023; margin decreased 8 bps to 4.15%
• Disciplined expense management with an efficiency ratio of 50.7% as of 3Q 2023
• Provision for credit losses of $4.4 million compared to $22.2 million in 2Q 2023
• Non-performingassets ("NPA") increased to $130.2 million, $9.1 million above 2Q 2023; NPAs stand at 0.70% of total assets
• The ratio of the ACL for loans and finance leases to total loans held for investment was 2.21% as of 3Q 2023 compared to 2.28% as of 2Q 2023
• Total available liquidity of approximately $5.1 billion or 1.1x of uninsured deposits as of 3Q 2023
• Completed 2022 share repurchase program by repurchasing $75 million in common shares during 3Q 2023
• Expect to continue repurchasing shares of common stock during the fourth quarter under the recently announced $225 million share repurchase program
• Strong capital position with a Common Equity Tier-1 ratio of 16.4% in 3Q 2023

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THIRD QUARTER 2023

BALANCE SHEET METRICS - LOAN PORTFOLIO

Loan Portfolio - $MM

		$11,311	$11,566	$11,593	$11,734	$11,960
				$9
														$14
				$12					$15
Loans HFS			$12
																$5,347
				$5,246	$5,216	$5,267
Commercial	$5,124
Consumer	$3,220	$3,327	$3,407	$3,495	$3,588
Construction		$124		$133		$203
				$144
						$164
Residential	$2,831	$2,847	$2,811	$2,794	$2,813
			3Q22		4Q22		1Q23		2Q23		3Q23

Loan Originations - $MM(1)

				$1,441							$1,370
		$1,245	$328	$1,193	$1,209
				$339
Consumer	$335	$129	$317	$328	$123
Credit Cards				$116
$124	$24	$118	$126		$130
Residential
	$104										$72
					$77			$115
		$22			$36
Construction		$845			$47	$706
$660
Commercial	$645
		$593
		3Q22	4Q22	1Q23		2Q23	3Q23

(1) Loan Originations include refinancing and renewals, as well as credit card utilization activity

Commercial Loan Portfolio Distribution - $MM

										Exposure at Repricing
		$5,347								/ Maturity Date
						C&I	$3,031			2023-2024		$66
CRE	$2,316
			PR Office CRE
(43%)				(57%)			> 2025		$308
					US Office CRE
						Other CRE			$374
								(7%)
								$44	(PR - WA. LTV: 65%)
								(1%)
C&I	$3,031
(57%)					$1,898		2023-2024		$11
							(36%)		> 2025		$33
		3Q23
									(US - WA. LTV: 53%)

Loan Portfolio Highlights

• Total loan portfolio grew by $226.3 million or 8% on a linked-quarter annualized (LQA) basis reaching $12.0 billion; registered growth across all business and regional segments
• Excluding refinancing of a $46.5 million municipal bond into a shorter-term commercial loan structure, LQA growth for the quarter was 6%, in line with loan growth guidance

1. Commercial and construction loans grew by $119.6 million (+9% LQA), consumer loans increased by $93.2 million (+11% LQA), and residential mortgage loans were up by $13.5 million (+2% LQA)

• 1. In terms of geography, loan growth consisted of $174.1 million in Puerto Rico, $46.4 million in Florida, and $5.8 million in the Virgin Islands
• Total loan originations, other than credit card utilization activity, amounted to $1.2 billion, up $163.1 million vs. 2Q 2023

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THIRD QUARTER 2023

BALANCE SHEET METRICS - DEPOSITS AND LIQUIDITY

Total Deposits (excluding Brokered CDs) - $MM

		$16,524	$16,038	$15,799	$16,456	$16,125
Public Funds	$2,941	$2,770	$2,673	$3,435	$3,262
CDs & IRAs	$1,827	$1,962	$2,238	$2,387	$2,465
Commercial	$5,737	$5,456	$5,229	$5,188	$5,147
Retail	$6,019	$5,850	$5,659	$5,446	$5,251
		3Q22	4Q22	1Q23	2Q23	3Q23

Deposit Portfolio Highlights

• Core deposits(1), excluding brokered CDs and government deposits, decreased by $159.0 million to $12.9 billion, mainly reflecting a:

1. $52.0 million reduction in Puerto Rico,

1. $44.9 million reduction in Florida, and

• 1. $62.1 million reduction in the Virgin Islands
• Government deposits, which are fully collateralized, decreased by $172.2 million reaching $3.3 billion in 3Q 2023 mostly related to reduction in Puerto Rico government deposits

1. Core Deposits exclude brokered CDs and government deposits
2. Uninsured deposits exclude public funds which are fully collateralized

Composition of Deposit Portfolio vs. Available Liquidity - $MM(2)

		Cash & Equivalents
		Free Liquid Securities
$16,125		FHLB Availability
	Fed Line

NIB	$5,440		$8,111
(34%)			$5,073
		$4,751
			(50%)	$585
			$4,751
			(30%)		$2,130
IB	$10,685	Insured
(66%)			$948
	Uninsured
		$3,262
		Public Funds		$1,410
		(20%)
	3Q23			Uninsured	Available
				Deposits	Liquidity

Liquidity Highlights

• Strength of deposit franchise evidenced by composition of deposit base:

1. Approximately 70% of deposit portfolio insured (including fully collateralized public funds)

1. Attractive mix of commercial and retail accounts

• 1. Strong non-interest-bearing (NIB) ratio of 34% as of end of quarter, excluding brokered deposits
• Total available liquidity of approximately $5.1 billion or 107% of uninsured deposits as of 3Q 2023

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OPERATING ENVIRONMENT AND FRANCHISE HIGHLIGHTS

Stable operating environment in our main market

Franchise Highlights

PR Economic Activity Index (EAI)(1)

					YoY Change							125.9	127.3	128.4	128.2
	121.2					122.8	123.5
	115.5	+6.3%										+3.5%	+3.3%
	-0.9%								+0.6%	-0.3%	+1.8%
						-6.2%

1Q20 3Q20 3Q21 3Q22 1Q23 2Q23 Jul-23Aug-23

Disaster Relief Funds Disbursed Per Year(2)

Year-to-date as of August of each year			$ in millions
		FEMA
		HUD (CDBG)
$2,883			$240
		Other	$1,676			(8%)	$1,785
					$858
					(62%)
$1,042
			(30%)
2021	2022	2023

• Economic Activity Index continues to show a recovery trend; August 2023 registered a year- over-year increase of 3.3%
• Record passenger activity at SJU airport; September 2023 traffic up 24% vs. September 2022
• Stable labor market trends, August 2023 payroll employment up 2.5% vs. August 2022; unemployment rate at record lows
• Fiscal year 2023 retail sales (July/22 - June/23) up 4% when compared to fiscal year 2022
• Year-to-dateauto sales up 3.0% as of September compared to same period in 2022; highest monthly sales reached in September 2023
• Over $2.9 billion in disaster relief funds have been disbursed during the first 8 months of 2023 (72% above the same period in 2022)
• Ongoing investment in infrastructure and development projects through P3 framework

• Well-diversifiedand granular deposit franchise
• Strong earnings generation capacity and disciplined expense management culture with lowest efficiency ratio among peers
• Robust capital position allows us to return 100% of earnings to shareholders through buybacks and the payment of common stock dividends while strategically investing in the organization
• Reached over 430K registered users in Retail Digital Banking application, up 3.6% during the third quarter and 14.5% year-over year
• Continue to capture over 42% of all deposit transactions through digital and self-service channels
• Enhanced digital sales capabilities in our recently launched corporate portal (1firstbank.com)
• Committed to our Environmental, Social, and Governance (ESG) principles by launching the "Rescue our Coasts" program to mitigate growing coastline erosion in the northern part of Puerto Rico

1. Sources: Puerto Rico Economic Development Bank (EDB)
2. www.recovery.pr.govand Recovery Support Function Leadership Group (RSFLG) - https://recovery.fema.gov/rsflg-monthly-data. Data as of August 2023.

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RESULTS OF OPERATIONS

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THIRD QUARTER 2023

DISCUSSION OF RESULTS

Income Statement

		3Q 2023		2Q 2023		Variance		3Q 2022
($ in thousands)
Interest income	$263,405	$252,204	$ 11,201	$222,683
Interest expense	63,677	52,389	11,288	14,773
Net interest income	199,728	199,815	(87)	207,910
Provision for credit losses	4,396	22,230	(17,834)	15,783
Total non-interest income	30,296	36,271	(5,975)	29,693
Personnel expense	56,535	54,314	2,221	52,939
Occupancy and equipment expense	21,781	21,097	684	22,543
Insurance and supervisory fees	4,499	4,495	4	3,853
Net gain of OREO operations	(2,153)	(1,984)	(169)	(1,064)
Other non-interest expenses	35,976	34,995	981	36,918
Total non-interest expenses	116,638	112,917	3,721	115,189
Pre-tax income	108,990	100,939	8,051	106,631
Income tax expense	26,968	30,284	(3,316)	32,028
Net income	$ 82,022	$ 70,655	$ 11,367	$ 74,603

Selected Financial Data

	3Q 2023	2Q 2023	Variance	3Q 2022
($ in thousands, except per share data and financial
ratios)
Adjusted pre-tax,pre-provision income	113,386	117,964	(4,578)	122,414
Fully diluted EPS (GAAP)	0.46	0.39	0.07	0.40
Fully diluted Adjusted EPS (Non-GAAP)	0.46	0.37	0.09	0.40
Cash dividend declared	0.14	0.14	-	0.12
Book value per share	7.47	7.78	(0.31)	6.79
Tangible book value per share	7.16	7.47	(0.31)	6.46
Common stock price as of end of quarter	13.46	12.22	1.24	13.68
Net Interest Margin (GAAP)	4.15%	4.23%	-0.08%	4.31%
Efficiency ratio	50.71%	47.83%	2.88%	48.48%
Return on Average Assets (ROAA)	1.72%	1.51%	0.21%	1.55%
Return on Average Common Equity (ROACE)	20.70%	19.66%	1.04%	19.00%

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THIRD QUARTER 2023

PROFITABILITY DYNAMICS

Net Interest Income ($MM)

250	$207.9	$205.6										10
200	$200.9	$199.8	$199.7	8
150	4.31%	4.37%	4.34%	4.23%	4.15%	6
100																4
50																2
0																	0
3Q22	4Q22	1Q23	2Q23	3Q23

Net Interest Income ($)

Net Interest Margin (GAAP %)

Key Highlights

• Net interest income registered a slight decrease to $199.7 million during the quarter primarily reflecting the following variances:

1. A $12.7 million increase in interest expense on interest-bearing deposits

1. A $9.9 million increase in interest income from total loans due to 1) higher average balances, 2) repricing on commercial variable rate loans, 3) higher yielding new loans, 4) a $1.2 million collection of a charged-off loan, and 5) effect of one additional day in the quarter

• 1. A $1.3 million increase in interest income from cash balances and securities and a $1.4 million decrease in interest expense on borrowings due to lower balances
• Net interest margin contracted by 8 bps to 4.15% reflecting the effect of higher rates paid on deposits which exceeded the increase in earning asset yields over the quarter

Cumulative Deposit Betas by Deposit Type(1)

				75%	78%
		62%	61%		57%
				52%
38%			43%
		22%		14%	14%
6%	9%	11%	12%
3Q22		4Q22	1Q23	2Q23	3Q23

IB Public Funds (PR)

Time Deposits (Ex. Brokered)

IB Deposits (Ex. Brokered CDs, Public Funds and Time Deposits)

Evolution of Loan Yields and Cost of Funds(2)

6.78%	7.09%	7.37%	7.52%	7.67%
6.44%	6.44%	6.38%	6.29%	6.21%
		0.99%	1.23%	1.46%
	0.65%
0.34%
3Q22	4Q22	1Q23	2Q23	3Q23
		Loan Yields	Cost of Funds

(1)	Cumulative deposit betas on interest-bearing deposits (based on end of quarter figures)
(2)	Cost of funds include cost of all interest-bearing deposits, non-interest-bearing deposits, and wholesale funding.	| 10