Business Wire | Oct 30, 2020 07:31AM EDT

First Bancorp. Announces Earnings for the Quarter Ended September 30, 2020

Oct. 30, 2020

SAN JUAN, Puerto Rico--(BUSINESS WIRE)--Oct. 30, 2020--First BanCorp. (the "Corporation") (NYSE: FBP), the bank holding company for FirstBank Puerto Rico ("FirstBank" or "the Bank"), today reported net income of $28.6 million, or $0.13 per diluted share, for the third quarter of 2020, compared to $21.3 million, or $0.09 per diluted share, for the second quarter of 2020, and $46.3 million, or $0.21 per diluted share, for the third quarter of 2019. Financial results for the third quarter of 2020 reflected a current period provision for credit losses of $46.9 million, of which $38.9 million ($25.9 million after-tax, or $(0.12) per diluted share) was a result of the initial establishment of the Day 1 reserves required by CECL in connection with non-PCD loans acquired in the BSPR acquisition. Additionally, in the third quarter of 2020, the Corporation incurred merger and restructuring related costs of $10.4 million ($6.5 million after-tax, or $(0.03) per diluted share) in connection with the closing of the BSPR acquisition, recognized an $8.0 million tax benefit related to a partial reversal of the deferred tax asset valuation allowance, or $0.04 per diluted share, and recorded a tax-exempt gain from sales of investment securities of $5.3 million, or $0.02 per diluted share.

The Corporation completed the acquisition of BSPR effective September 1, 2020. The Corporation's financial statements for the third quarter include 30 days of BSPR operations, post-acquisition, which have an effect on the comparability of the current quarter's results to prior periods. The Corporation's statement of financial condition as of September 30, 2020 reflects $5.6 billion in total assets, $2.6 billion in gross loans, and $4.2 billion in total deposits acquired in the BSPR acquisition. BSPR operated 27 banking branches in Puerto Rico.

The following table summarizes the composition of the earnings reported for the third quarter of 2020:

First BSPR BanCorp. Acquired Other Total Legacy Operation Transactions Operations Net Interest $ 134,659 $ 14,037 $ - $ Income 148,696

Provision for Credit Losses 8,032 - - 8,032 (legacyoperations)Day 1ReservesRequired for 38,882 Acquired - - 38,882Non-PCD Loansand relatedcommitmentsProvision for 38,882 Credit 8,032 - 46,914Losses Net interest income after 126,627 14,037 (38,882 ) 101,782 provision forcredit losses Non-interest 22,861 Income 1,785 - 24,646

Gain on sale of investment - - 5,288 5,288securitiesTotal 22,861 non-interest 1,785 5,288 29,934income Non interest 86,390 10,677 expenses - 97,067

Merger and 10,441 Restructuring - - 10,441costs Total 86,390 10,677 10,441 non-interest 107,508expenses Income before 63,098 (44,035 ) income taxes 5,145 24,208

Income tax (18,801 ) ) 16,898 )(expense) (1,692 (3,595benefitPartialreversal of deferred tax - - 8,000 8,000 assetvaluationallowance Net Income $ 44,297 $ 3,453 $ (19,137 ) $ (Loss) 28,613

Aurelio Alemn, President and Chief Executive Officer of First BanCorp., commented: "We are very pleased with the closing of the strategic acquisition of Banco Santander Puerto Rico solidifying our position on the island and strengthening our competitiveness in commercial, retail and residential lending. The acquisition brings us greater reach and market share gains across the island, as well as new levers to improve our efficiency metrics. This acquisition contributed $4.2 billion in deposits and $2.6 billion in loans, the acquired loan portfolio complements our loan book nicely, and the deposit book significantly improves our funding. Our loan to deposit ratio now stands at 78% and our expanded customer base should drive future growth. We welcome the former Banco Santander employees and customers to our family and look forward to exceeding their expectations with an expanded branch network, service channels and enhanced technological offerings. Our existing customers will also benefit from this expansion.

There is still over $60 billion of remaining estimated hurricane and pandemic relief funding in Puerto Rico which will contribute to the economic recovery already underway in our main market. Employment figures continue to trend positive now at 92% of August 2019 levels and lending activity continues to improve in most products. We are optimistic for the prospects of growth for the island and are well prepared to support increased economic activity. We remain vigilant to potential economic hurdles related to future COVID-19 restrictions. We have worked hard to build a fortress balance sheet and even following the completed acquisition our liquidity levels, reserve coverage, and capital position are among the highest in the banking sector and have positioned us well to take advantage of growth opportunities.

We generated net income of $28.6 million during the quarter, including only one month of earnings contribution from the acquired operations; on a non-GAAP basis, pre-tax pre-provision income for the quarter was over $77 million, an increase of 14.6% over the prior quarter. The enhanced funding profile of our combined institution and greater customer reach should help to drive additional loan growth and net interest income, which will improve further our outsized capital position. Capital deployment opportunities remain a priority as our economic environment stabilizes.

The integration efforts are well underway, I am very proud of what the combined team has been able to accomplish thus far and we are excited for the future growth prospects of our institution."

NON-GAAP DISCLOSURES

This press release includes certain non-GAAP financial measures, including adjusted net income, adjusted pre-tax, pre-provision income, adjusted net interest income and margin, adjusted non-interest expenses, tangible common equity, tangible book value per common share, certain capital ratios, and certain other financial measures that exclude the effect of items that management believes are not reflective of core operating performance, are not expected to reoccur with any regularity or may reoccur at uncertain times and in uncertain amounts (the "Special Items"), and should be read in conjunction with the discussion below in Basis of Presentation - Use of Non-GAAP Financial Measures and the accompanying tables (Exhibit A), which are an integral part of this press release.

BSPR ACQUISITION

Effective September 1, 2020, the Corporation completed the acquisition of BSPR pursuant to a stock purchase agreement dated as of October 21, 2019. The transaction was structured as an all-cash acquisition of all of the issued and outstanding common stock of Santander Bancorp, the sole shareholder of BSPR, a corporation incorporated under the laws of the Commonwealth of Puerto Rico and sole shareholder of Santander Insurance Agency, Inc. (collectively referred to as "BSPR"). In consideration for the acquisition, the Corporation paid cash in an amount of approximately (i) $394.8 million for 117.5% of BSPR's core tangible common equity, comprised of a $58.8 million premium on $336 million of core tangible common equity, plus (ii) $882.8 million for BSPR's excess capital (paid at par), which represents the estimated closing payment pursuant to the terms of the stock purchase agreement.

The following table summarizes the estimated fair value of assets acquired and liabilities assumed of BSPR as of September 1, 2020 under the acquisition method of accounting:

(In thousands) Total purchase price consideration (cash) $ 1,277,626

Fair value of assets acquired: Fair ValueCash and cash equivalents $ 1,684,252

Investment securities available for sale 1,167,225

Loans, net 2,514,916

Premises and equipment, net 12,499

Intangible assets 39,232

Other assets 189,131

Total assets and identifiable intangible assets acquired $ 5,607,255

Fair value of liabilities assumed: Deposits $ 4,194,940

Other liabilities 140,992

Total liabilities assumed 4,335,932

Fair value of net assets and identifiable intangible assets $ 1,271,323acquired Goodwill $ 6,303

As of September 30, 2020, the purchase price remains subject to final adjustments and fair value measurements remain preliminary due to the timing of the acquisition. The Corporation continues to review information relating to events or circumstances existing at the acquisition date and expects to finalize its analysis of the acquired assets and assumed liabilities over the next few months, but not later than one year after the acquisition.

SPECIAL ITEMS

The financial results for the third and second quarters of 2020 and the third quarter of 2019 included the following significant Special Items:

Quarter ended September 30, 2020

* Merger and restructuring costs of $10.4 million ($6.5 million after-tax) in connection with the acquisition of BSPR and related restructuring initiatives. Merger and restructuring costs in the third quarter of 2020 primarily included consulting, legal, system conversions and other integration related efforts. * An $8.0 million tax benefit related to a partial reversal of the deferred tax asset valuation allowance. * A $5.3 million aggregate gain on sales of approximately $116.6 million of U.S. agencies MBS and $803.3 million of U.S. Treasury Notes executed in the latter part of September. The gain on tax-exempt securities or realized at the tax-exempt international banking entity subsidiary level had no effect in the income tax expense recorded in the third quarter of 2020. * Costs of $1.0 million ($0.6 million after-tax) related to the COVID-19 pandemic response efforts, primarily costs related to additional cleaning, safety materials, and security matters.

Quarter ended June 30, 2020

* A $5.0 million ($3.1 million after-tax) benefit resulting from the final settlement of the Corporation's business interruption insurance claim related to lost profits caused by Hurricanes Irma and Maria in 2017. * Merger and restructuring costs of $2.9 million ($1.8 million after-tax) in connection with the acquisition of BSPR and related restructuring initiatives. Merger and restructuring costs in the second quarter of 2020 primarily included consulting, legal, and other pre-conversion related efforts. * Costs of $3.0 million ($1.9 million after-tax) related to the COVID-19 pandemic response efforts, including approximately $1.7 million in bonuses paid to branch personnel and other essential employees for working during the pandemic, as well as other employee-related expenses, including expenses for the administration of COVID-19 tests and purchases of personal protective equipment. * A $0.2 million loss realized on sales of U.S. agencies MBS. The loss, realized at the tax-exempt international banking entity subsidiary, had no effect on the income tax expense recorded in the second quarter of 2020.

Quarter ended September 30, 2019

* A $3.0 million ($1.8 million after-tax) positive effect in earnings related to the acceleration of the discount accretion from the payoff of an acquired commercial mortgage loan. * A $0.4 million ($0.2 million after-tax) benefit resulting from hurricane-related insurance recoveries related to repairs and maintenance costs incurred on facilities in the U.S. Virgin Islands.

NET INCOME AND RECONCILIATION TO ADJUSTED NET INCOME (NON-GAAP)

Net income was $28.6 million for the third quarter of 2020, compared to $21.3 million for the second quarter of 2020. Adjusted net income was $22.4 million, or $0.10 per diluted share, for the third quarter of 2020, compared to $22.0 million, or $0.10 per diluted share, for the second quarter of 2020. The following table reconciles for the third and second quarters of 2020 and the third quarter of 2019 the net income to adjusted net income and adjusted earnings per share, which are non-GAAP financial measures that exclude the significant Special Items identified above, as well as a non-significant gain realized on the repurchase and cancellation of trust preferred securities in the third quarter of 2020.

Quarter Ended Quarter Ended Quarter Ended(In thousands,except per share September 30, 2020 June 30, 2020 September 30, 2019information) Net income, as $ 28,613 $ 21,256 $ 46,327 reported (GAAP)Adjustments: Merger and 10,441 2,902 restructuring 592costsPartial reversal of deferred tax (8,000 ) - - asset valuationallowanceAccelerateddiscount (2,953 )accretion due to - - early payoff ofacquired loan Benefit from hurricane-related - (5,000 ) (379 )insurancerecoveries(Gain) loss on sales of (5,288 ) 155 - investmentsecuritiesGain on early ) extinguishment of (94 - -debtCOVID-19 2,961 pandemic-related 962 -expensesIncome tax impact (4,276 ) (324 ) 1,028 of adjustments (1)Adjusted net $ 22,358 $ 21,950 $ 44,615 income (Non-GAAP)Preferred stock (669 ) (669 ) (669 )dividendsAdjusted netincomeattributable to $ 21,689 $ 21,281 $ 43,946 commonstockholders(Non-GAAP) Weighted-average $ 217,715 217,570 $ 217,227 diluted shares outstanding Earnings Per $ 0.13 $ 0.09 $ 0.21 Share - diluted (GAAP) Adjusted EarningsPer Share - $ 0.10 $ 0.10 $ 0.20 diluted(Non-GAAP) (1) See Basis of Presentation for the individual tax impact related to reconciling items. INCOME (LOSS) BEFORE INCOME TAXES AND RECONCILIATION TO ADJUSTED PRE-TAX, PRE-PROVISION INCOME (NON-GAAP)

Income before income taxes was $24.2 million for the third quarter of 2020, compared to $27.3 million for the second quarter of 2020. Adjusted pre-tax, pre-provision income was $77.1 million for the third quarter of 2020, up $9.8 million from the second quarter of 2020. The following table reconciles income (loss) before income taxes to adjusted pre-tax, pre-provision income for the last five quarters:

(Dollars in thousands) Quarter Ended September 30, June 30, March 31, December 31, September 30, 2020 2020 2020 2019 2019

Income (loss) before $ 24,208 $ 27,302 $ (701 ) $ 53,547 $ 65,595 income taxes Add: Provision for 46,914 39,014 77,366 8,473 7,398 credit lossesLess/Add: Net (gain) (5,288 ) 155 (8,247 ) loss on sales of - -investment securitiesAdd: Credit loss 497 impairment on debt - - - - securities (1)Less: Accelerated discount accretion due - - - - (2,953 )to early payoff ofacquired loan Less: Benefit from (5,000 ) (1,153 ) (727 ) (379 )hurricane-related - insurance recoveriesLess: Gain on early ) extinguishment of debt (94 - - - -

Add: COVID-19 2,961 363 pandemic-related 962 - -expensesAdd: Merger and 10,441 2,902 845 10,850 592 restructuring costsAdjusted pre-tax, $ 77,143 $ 67,334 $ 68,473 $ 72,143 $ 70,750 pre-provision income (2) Change from most $ 9,809 $ (1,139 ) $ (3,670 ) $ 1,393 $ (262 )recent prior quarter (amount)Change from most 14.6 % -1.7 % -5.1 % 2.0 % -0.4 %recent prior quarter (percentage) (1) ASC 326, which became effective on January 1, 2020, requires credit losseson available-for-sale debt securities to be presented as an allowance ratherthan as a write-down. Thus, credit losses on debt securities recorded prior toJanuary 1, 2020 are presented as credit loss impairment on debt securities inthe table above, while credit losses on debt securities recorded after January1, 2020 are presented as part of provision for credit losses in the tableabove.(2) Non-GAAP financial measure. See Basis of Presentation below for definitionand additional information about this non-GAAP financial measure. Adjusted pre-tax, pre-provision income for the third quarter of 2020 included $5.1 million related to the operations of BSPR from the acquisition date to the end of the third quarter.

NET INTEREST INCOME

The following table sets forth information concerning net interest income during the periods indicated:

(Dollars in Quarter Endedthousands) September 30, June 30, 2020 March 31, 2020 December 31, September 30, 2020 2019 2019Net Interest Income Interest income $ 170,402 $ 158,616 $ 165,264 $ 167,620 $ 172,295

Interest 21,706 23,406 26,615 27,691 27,870 expense Net interest $ 148,696 $ 135,210 $ 138,649 $ 139,929 $ 144,425 income Average Balances Loans and leases $ 10,163,671 $ 9,247,878 $ 8,997,418 $ 8,952,209 $ 9,026,725

Totalsecurities,other short-term 4,871,710 3,636,532 3,055,546 2,865,530 2,691,584 investments andinterest-bearingcash balances Average interest-earning $ 15,035,381 $ 12,052,964 $ 11,817,739 $ 11,718,309 assets $ 12,884,410

Average $ 9,732,691 $ 8,436,511 $ 8,099,199 $ 7,845,104 $ 7,819,008 interest-bearing liabilities Average Yield/ RateAverage yield on 4.51 % 4.95 % 5.51 % 5.63 % 5.83 %interest-earning assets - GAAPAverage rate oninterest-bearing 0.89 % 1.12 % 1.34 % 1.40 % 1.41 %liabilities -GAAPNet interest 3.62 % 3.83 % 4.17 % 4.23 % 4.42 %spread - GAAPNet interest 3.93 % 4.22 % 4.63 % 4.70 % 4.89 %margin - GAAP Net interest income amounted to $148.7 million for the third quarter of 2020, an increase of $13.5 million, compared to net interest income of $135.2 million for the second quarter of 2020. The increase in net interest income was mainly due to:

* A $5.1 million increase in interest income on commercial and construction loans, primarily due to a $539.9 million increase in the average commercial and construction loan balance. The BSPR acquisition added $1.5 billion of commercial and construction loans, contributing to an increase of $498.1 million in the average balance and $7.8 million in interest income during the third quarter. Total discount accretion related to commercial and construction loans acquired from BSPR amounted to $1.8 million in the third quarter of 2020. In addition, there was a $0.6 million increase in interest income on commercial and construction loans related to the effect of one additional day in the third quarter. These variances were partially offset by the downward repricing of the legacy variable-rate commercial and construction loans portfolio, which resulted in a decrease in interest income of approximately $1.3 million. The interest rate on approximately 38% of the Corporation's commercial and construction loans, excluding SBA PPP loans, is based upon LIBOR indexes and 16% is based upon the Prime rate index. For the third quarter of 2020, the average one-month LIBOR declined 20 basis points, and the average three-month LIBOR declined 36 basis points, compared to the average rates for such indexes during the second quarter of 2020. * A $3.8 million increase in interest income on residential mortgage loans, primarily due to a $269.9 million increase in the average balance of this portfolio. The BSPR acquisition added $821.9 million of residential mortgage loans, contributing to an increase of $265.2 million in the average balance and $4.1 million in interest income during the third quarter. Total discount accretion related to residential mortgage loans acquired from BSPR amounted to $0.2 million in the third quarter of 2020. * A $3.5 million increase in interest income on consumer loans, primarily due to a $106.1 million increase in the average balance of this portfolio. The BSPR acquisition added $210.9 million of consumer loans, contributing to an increase of $69.9 million in the average balance and $2.5 million in interest income during the third quarter. Total discount accretion related to consumer loans acquired from BSPR amounted to $0.1 million in the third quarter of 2020. The remaining increase was primarily related to both an increase of $36.2 million in the average balance of the legacy consumer loan portfolio, predominantly auto loans, which resulted in an increase in interest income of approximately $0.8 million, and a $0.6 million increase in interest income related to the effect of one additional day in the third quarter. * A $1.7 million decrease in interest expense, including a reduction of $0.7 million related to the downward repricing of junior subordinated debentures and variable-rate repurchase agreements tied to the decrease in the three-month LIBOR index, and a $0.9 million decrease in interest expense on interest-bearing deposits. The decrease in interest expense on interest-bearing deposits reflects a reduction of approximately $2.3 million attributable to the lower average rates paid on legacy interest-bearing checking, savings, and non-brokered time deposits, partially offset by an increase of approximately $1.3 million related to an increase of $1.3 billion in the average balance of interest-bearing deposits. The BSPR acquisition added $2.9 billion of interest-bearing deposits, contributing to an increase of $977.2 million in the average balance and $0.8 million in interest expense during the third quarter (net of a $0.3 million premium accretion). The average cost of interest-bearing deposits assumed from BSPR was 0.34% during the month of September, which was below the average cost of 0.72% for the legacy non-brokered interest-bearing deposits for the third quarter of 2020.

Partially offset by:

* A $0.7 million decrease in interest income on investment securities, primarily due to a $2.7 million increase in U.S. agencies MBS premium amortization expense (including $0.7 million related to U.S, agencies MBS acquired in the BSPR transaction) affected by the low interest rate environment. This variance was partially offset by an $859.1 million increase in the average balance of total investment securities. Purchases of U.S. agencies MBS and callable debentures during the last two quarters contributed to an increase of approximately $520.1 million in the average balance of investment securities, which resulted in an increase in interest income of approximately $1.2 million. Purchases of U.S. agencies callable debentures and MBS during the third quarter amounting to $850.7 million carries an average yield of 0.90%, which is a lower yield compared to yields on securities that were called prior to maturity and MBS prepayments. This, together with the low yields on the investment securities portfolio acquired from BSPR had an adverse effect in the net interest margin for the third quarter. The BSPR acquisition added $308 million of U.S. agencies MBS, $803 million of U.S. Treasury Notes, and $56 million of Puerto Rico municipal bonds at acquisition date. This accounted for $339.2 million of the total increase in the average balance of investment securities and contributed $0.4 million in interest income, net of a $1.4 million amortization of the premium resulting from the new amortized cost basis of securities acquired from BSPR. As a result of the purchase accounting requirements, the acquired U.S. Treasury Notes were booked at a yield of 0.15%, therefore, in the latter part of the third quarter, the Corporation sold all the U.S. Treasury Notes acquired from BSPR and reinvested the proceeds in U.S. agency securities at an approximate average yield of 0.94%. The average yield of the U.S. agencies MBS acquired from BSPR was 0.42% for the month of September.

Net interest margin was 3.93%, compared to 4.22% for the second quarter of 2020. The decrease was primarily attributable to the effect of the low interest rate environment in the repricing of variable rate commercial loans and the acceleration of the U.S. agencies MBS premium amortization, as well as a higher proportion of low-yielding assets, such as U.S. agencies MBS, callable debentures and interest-bearing cash balances, to total interest-earning assets, partially offset by the lower cost of deposits and higher loan accretion income.

The acquisition of BSPR had a one basis point dilutive impact on the net interest margin in the third quarter of 2020, primarily due to the above-mentioned low yields on acquired investment securities and interest-bearing cash balances that more than offset the benefit of higher yields on acquired loans and lower average cost of assumed deposits as compared to the legacy portfolios. The results for the third quarter include the effect of acquisition marks and related accretion for the BSPR acquisition. Net interest income benefited from $0.7 million of net loan and investment securities accretion income and $0.3 million of deposits premium accretion, which added two basis points of net interest margin on a combined basis.

The third quarter results also include the effect of SBA PPP loans. Interest income includes $2.2 million on average SBA PPP loan balances of $399.9 million, which had a 5 basis points dilutive impact on net interest margin.

NON-INTEREST INCOME

The following table sets forth information concerning non-interest income during the periods indicated:

Quarter Ended September 30, June 30, March 31, December 31, September 30,(In thousands) 2020 2020 2020 2019 2019

Service charges on $ 5,848 $ 4,475 $ 5,957 $ 6,205 $ 6,108 deposit accounts Mortgage 3,686 3,788 4,640 4,396 banking 7,099 activities Net gain (loss) on (155 ) 8,247 (497 ) investments 5,288 - and impairments Gain on early extinguishment 94 - - - - of debt Other 11,605 12,886 12,208 13,560 11,394 operating income Non-interest $ 29,934 $ 20,892 $ 30,200 $ 24,405 $ 21,401 income Non-interest income amounted to $29.9 million for the third quarter of 2020, compared to $20.9 million for the second quarter of 2020. The $9.0 million increase in non-interest income was primarily due to:

* The $5.3 million gain on sales of approximately $116.6 million of available-for-sale U.S. agencies MBS and $803.3 million of available-for-sale U.S. Treasury Notes. The Corporation realized a $5.1 million gain on the U.S. agencies MBS sold, which carried an increased prepayment risk given the low market interest rate environment, and a $0.2 million gain on the sale of the U.S. Treasury Notes that were acquired in the BSPR transaction. * A $3.4 million increase in revenues from mortgage banking activities, driven by a $4.5 million increase in realized gains on sales of residential mortgage loans in the secondary market, driven by both a higher volume of conforming loan originations and sales and higher gain margins, and a $0.6 million increase in servicing fee income, partially offset by a $0.7 million decrease related to the net change in mark-to-market gains and losses from both interest rate lock commitments and To-Be-Announced ("TBA") MBS forward contracts, and a $0.7 million increase in the servicing assets amortization expense. Total loans sold in the secondary market to U.S. government-sponsored agencies during the third quarter of 2020 amounted to $161.8 million, with a related net gain of $5.9 million (net of realized losses of $0.4 million on TBA hedges), compared to total loans sold in the secondary market during the second quarter of 2020 of $63.8 million, with a related net gain of $1.4 million (net of realized losses of $1.1 million on TBA hedges). Revenues from mortgage banking activities from BSPR included in the third quarter financial results amounted to approximately $0.1 million. The BSPR acquisition added $1.0 billion to the residential mortgage loan servicing portfolio. * A $2.8 million increase in transactional fee income from credit and debit cards, automated teller machines (ATMs), and Point-of-Sale (POS) and merchant-related activity, primarily reflecting higher sales volume associated with the gradual reopening of businesses and resumption of economic activity. Approximately $0.3 million of the increase is related to transactional fee income generated by the BSPR operations from the date of acquisition to the end of the third quarter of 2020. These amounts are included as part of "Other operating income" in the table above. * A $1.4 million increase in service charges on deposits, including an increase of $1.1 million related to deposit accounts acquired from BSPR of which $0.6 million relates to cash management fee income. The remaining increase was primarily related to a higher number of cash management fee transactions in the legacy portfolio as a result of increased customer activity since the gradual reopening of business activities after the COVID-19 related lockdowns and quarantines. * A $0.4 million increase in fees and commissions from other banking services, such as mail and cable transmission, official checks, safe deposits and insurance referrals, among others, reflecting increased customer activity. These fees are included as part of "Other operating income" in the table above. * A $0.2 million gain on the sale of a land lot during the third quarter of 2020, included as part of "Other operating income" in the table above.

Partially offset by:

* The $5.0 million benefit recorded in the second quarter of 2020 resulting from the final settlement of the Corporation's business interruption insurance claim related to lost profits caused by Hurricanes Irma and Maria in 2017, included as part of "Other operating income" in the table above.

NON-INTEREST EXPENSES

The following table sets forth information concerning non-interest expenses during the periods indicated:

Quarter Ended September 30, June 30, March 31, December 31, September 30,(In thousands) 2020 2020 2020 2019 2019

Employees' $ $ $ $ $ 41,409 compensation 43,063 39,532 42,859 40,856 and benefits Occupancy and 19,064 16,376 15,127 16,151 15,129 equipment Deposit 1,630 1,436 1,522 1,674 1,465 insurance premium Other insurance and 1,389 1,129 1,087 919 960 supervisory fees Taxes, other 4,510 3,577 3,880 3,864 3,904 than income taxes Professional fees: Collections, appraisals and 1,262 1,387 1,696 2,345 1,797 other credit-related fees Outsourcing 6,949 7,672 6,829 6,036 6,206 technology services Other 3,352 2,909 3,268 3,652 3,872 professional fees Credit and debit card 4,859 3,938 3,950 3,734 4,764 processing expenses Business 3,046 2,314 3,622 4,060 4,004 promotion Communications 2,246 1,852 1,877 1,591 1,834

Net loss on other real 1,019 811 1,188 3,280 2,578 estate owned ("OREO") operations Merger and 10,441 2,902 845 10,850 restructuring 592 costs Other 4,678 3,951 4,434 3,302 4,319

$ $ $ $ $ 92,833 Total 107,508 89,786 92,184 102,314

Non-interest expenses amounted to $107.5 million in the third quarter of 2020, an increase of $17.7 million from $89.8 million in the second quarter of 2020. Included in non-interest expenses are the following Special Items:

* Merger and restructuring costs associated with the acquisition of BSPR of $10.4 million for the third quarter of 2020, compared to $2.9 million for the second quarter of 2020. The increase was primarily related to higher legal and financial consultant fees as well as expenses incurred in integration efforts during the third quarter. * COVID-19 pandemic-related expenses of $1.0 million for the third quarter of 2020, compared to $3.0 million for the second quarter of 2020. COVID-19 pandemic-related expenses for the third quarter of 2020, primarily consist of $0.8 million of expenses associated with cleaning and security protocols, included as part of "Occupancy and equipment" in the table above, compared to $0.9 million in the second quarter of 2020. For the second quarter of 2020, COVID-19 pandemic-related expenses also include $1.7 million incurred in employee-related expenses primarily related to bonuses paid to branch personnel and other essential employees for working during the pandemic, as well as expenses for the administration of COVID-19 tests and purchases of personal protective equipment, both recorded as part of "Employees' compensation and benefits" in the table above.

On a non-GAAP basis, adjusted non-interest expenses, excluding the effect of the Special Items mentioned above, amounted to $96.1 million for the third quarter of 2020, compared to $83.9 million for the second quarter of 2020. The $12.2 million increase in adjusted non-interest expenses reflects, among other things, the effect of both a $10.7 million increase resulting from the addition of operations, personnel and branches retained from the acquisition of BSPR and volume-related expense increases related to the reopening of business activities. The most significant variances were:

* A $5.2 million increase in adjusted employees' compensation and benefits expenses, driven by a $3.0 million increase related to personnel retained from the acquisition of BSPR and a $1.6 million decrease in deferred loan origination costs primarily in connection with a lower amount of SBA PPP loans originated during the third quarter. * A $2.8 million increase in adjusted occupancy and equipment costs, including approximately $2.7 million incremental expenses related to the acquired operations. * A $1.0 million increase in adjusted business promotion expenses, driven by a $0.6 million increase in direct and digital marketing expenses and a $0.3 million increase in the cost of credit and debit card reward programs. Approximately $0.5 million of the total increase in business promotion expenses is related to incremental expenses of the acquired operations. * A $0.9 million increase in adjusted taxes, other than income taxes, primarily related to a $0.5 million increase in business to business sales and use tax expenses due to the effect in the second quarter of legislation that provided for a temporary exemption of the 4% tax associated with business to business services up to June 30, 2020, and approximately $0.5 million incremental expenses related to the acquired operations, primarily municipal license taxes and personal property taxes. * A $0.9 million increase in credit and debit card processing expenses related to higher transactions volume, including a $0.4 million incremental expense related to the acquired operations. * A $0.7 million increase in "Other" in the table above including incremental expenses of approximately $1.1 million related to the acquired operations, partially offset by reductions of $0.3 million in printing expenses and $0.2 million in labor-related legal reserves. Incremental expenses include $0.8 million related to the amortization of core deposit and purchased credit card relationship intangible assets recorded in connection with the acquisition of BSPR. * A $0.4 million increase in adjusted communications-related expenses, primarily due to higher telephone and mailing expenses. Approximately $0.2 million is related to incremental expenses of the acquired operations.

Partially offset by:

* A $0.4 million decrease in adjusted professional service fees, primarily due to a $0.7 million decrease in outsourced technology fees, driven by lower costs incurred in connection with the platform used for the origination of SBA PPP loans, partially offset by a $0.3 million increase in consulting fees. Incremental professional service fees related to acquired operations amounted to $1.8 million, representing temporary technology processing costs of the acquired operations while system conversions is completed.

The adjusted financial metrics presented above are non-GAAP financial measures. See Basis of Presentation for additional information and the reconciliation of total non-interest expenses and certain non-interest expenses components to adjusted total non-interest expenses and certain adjusted non-interest expense components.

INCOME TAXES

The Corporation recorded an income tax benefit of $4.4 million for the third quarter of 2020, compared to an income tax expense of $6.0 million for the second quarter of 2020. The variance was primarily related to the $8.0 million benefit resulting from the partial reversal of the deferred tax asset valuation allowance.

The Corporation's estimated effective tax rate, excluding entities with pre-tax losses from which a tax benefit cannot be recognized and discrete items, decreased to 21.4%, compared to 25.2% as of the end of the second quarter of 2020, primarily due to a decrease of taxable income proportionate to pre-tax income. As of September 30, 2020, the Corporation had a deferred tax asset of $347.5 million (net of a valuation allowance of $99.6 million, including a valuation allowance of $62.1 million against the deferred tax assets of the Corporation's banking subsidiary, FirstBank). The BSPR acquisition added $32.5 million of net deferred tax assets at the acquisition date.

CREDIT QUALITY

Non-Performing Assets

(Dollars in September June 30, March 31, December 31, Septemberthousands) 30, 30, 2020 2020 2020 2019 2019

Nonaccrual loansheld for investment: Residential $ 122,797 $ 122,249 $ 122,903 $ 121,408 $ 127,040 mortgage Commercial 29,651 34,109 35,953 40,076 42,525 mortgage Commercial and 20,882 19,995 19,734 18,773 20,725 Industrial Construction 13,090 9,574 9,663 9,782 6,358

Consumer and 14,870 18,047 24,042 20,629 19,579 Finance leases Total nonaccrual 201,290 203,974 212,295 210,668 216,227 loans held for investment OREO 89,049 96,319 99,674 101,626 103,033

Other repossessed 3,006 3,554 5,832 5,115 5,932 property Total non-performing assets, $ 293,345 $ 303,847 $ 317,801 $ 317,409 $ 325,192 excluding nonaccrual loans held for sale Nonaccrual loans - - - - 6,906 held for sale Total non-performing assets, $ 293,345 $ 303,847 $ 317,801 $ 317,409 $ 332,098 including nonaccrual loans held for sale (1) Past-due loans 90 $ 160,066 $ 164,519 $ 132,058 $ 135,490 $ 144,787 days and still accruing (2) Nonaccrual loansheld for investment 1.70 % 2.18 % 2.35 % 2.34 % 2.41 %to total loans heldfor investmentNonaccrual loans to 1.69 % 2.17 % 2.35 % 2.33 % 2.48 %total loansNon-performingassets, excludingnonaccrual loansheld for sale, to 1.57 % 2.16 % 2.44 % 2.52 % 2.60 %total assets,excludingnonaccrual loansheld for saleNon-performing 1.57 % 2.16 % 2.44 % 2.52 % 2.65 %assets to total assets Excludes purchased-credit deteriorated ("PCD") loans previously accounted for under Accounting Standards Codification ("ASC") 310-30 for which the Corporation made the accounting policy election of maintaining pools of loans accounted for under ASC 310-30 as "units of account" both at the time of adoption of ASC 326 and on an ongoing basis for credit loss measurement. These(1) loans accrete interest income based on the effective interest rate of the loan pools determined at the time of adoption of ASC 326 and 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 amortized cost of such loans as of September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, and September 30, 2019 amounted to $133.2 million, $134.4 million, $134.0 million, $136.7 million, and $139.3 million, respectively. These include loans rebooked, which were previously pooled into GNMA securities amounting to $17.7 million (June 30, 2020 - $69.9 million; March 31, 2020 - $34.8 million; December 31, 2019 - $35.3 million; September 30, 2019 - $37.8 million). Under the GNMA program, the Corporation has the option but not the(2) 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. During the third quarter of 2020, the Corporation repurchased, pursuant to the aforementioned repurchase option, $52.0 million of loans previously sold to GNMA. Variances in credit quality metrics:

* Total non-performing assets decreased by $10.5 million to $293.3 million as of September 30, 2020, compared to $303.8 million as of June 30, 2020. Total nonaccrual loans decreased by $2.7 million to $201.3 million as of September 30, 2020, compared to $204.0 million as of June 30, 2020. The decrease in non-performing assets consisted of: - A $7.3 million decrease in the OREO portfolio balance. The decrease was driven by sales of $6.9 million, primarily residential OREO properties in the Puerto Rico region, and approximately $1.5 million of fair value and other adjustments that reduced the OREO carrying value, partially offset by additions of $1.1 million. - A $3.2 million decrease in nonaccrual consumer loans, primarily auto loans and finance leases, driven by charge-offs and collections recorded in the third quarter, partially offset by inflows of $8.4 million. - A $0.5 million decrease in non-real estate repossessed assets, primarily repossessed automobiles. - A $0.1 million decrease in nonaccrual commercial and construction loans, primarily due to a $3.1 million charge-off taken on a nonaccrual commercial mortgage loan in the Puerto Rico region and collections recorded in the third quarter, partially offset by the inflow of a $3.5 million construction loan in the Puerto Rico region. - A $0.5 million increase in nonaccrual residential mortgage loans, reflecting inflows of $5.4 million primarily resulting from the failure of certain borrowers that were delinquent prior to the COVID-19 payment moratorium relief to resume monthly payments after the end of their payment moratorium period. The increase related to inflows was partially offset by collections, charge-offs, and loans brought current or with a sustained performance period and restored to accrual status during the third quarter. * Inflows to nonaccrual loans held for investment were $18.4 million, a $7.7 million increase compared to inflows of $10.7 million in the second quarter of 2020. Inflows to nonaccrual residential mortgage loans were $5.4 million in the third quarter of 2020, an increase of $2.4 million compared to inflows of $3.0 million in the second quarter of 2020. Inflows to nonaccrual consumer loans were $8.4 million, an increase of $1.3 million compared to inflows of $7.1 million in the second quarter of 2020. Inflows to nonaccrual commercial and construction loans were $4.6 million in the third quarter of 2020, an increase of $3.9 million compared to inflows of $0.7 million in the second quarter of 2020, driven by the aforementioned inflow of a $3.5 million construction loan in the Puerto Rico region. See Early Delinquency, Payment Deferral Programs, and SBA PPP Loans below for additional information. * Adversely classified commercial and construction loans increased by $39.8 million to $157.3 million as of September 30, 2020, primarily related to the downgrade of two commercial relationships in the Florida region engaged in the transportation industry totaling $38.8 million. * Total Troubled Debt Restructured ("TDR") loans held for investment were $488.6 million as of September 30, 2020, down $7.6 million from June 30, 2020. Approximately $399.7 million of total TDR loans held for investment were in accrual status as of September 30, 2020. These figures exclude $58.8 million of TDR residential mortgage loans guaranteed by the U.S. federal government (i.e., Federal Housing Administration and Veterans Administration loans).

Early Delinquency, Payment Deferral Programs, and SBA PPP Loans

Total loans in early delinquency (i.e., 30-89 days past due loans, as defined in regulatory report instructions) amounted to $110.4 million as of September 30, 2020, an increase of $18.8 million, compared to $91.6 million as of June 30, 2020. The statement of financial condition as of September 30, 2020 reflects $14.1 million of 30-89 days past due loans resulting from the BSPR acquisition. The variances by major portfolio categories were as follow:

* Residential mortgage loans in early delinquency increased by $4.7 million to $44.5 million as of September 30, 2020, and consumer loans in early delinquency increased by $0.1 million to $35.7 million as of September 30, 2020. The early delinquency residential mortgage loans as of September 30, 2020 reflect $4.0 million and $2.9 million of 30-89 past due residential mortgage and consumer loans, respectively, resulting from the BSPR acquisition. * Commercial and construction loans in early delinquency increased in the third quarter by $13.9 million to $30.1 million as of September 30, 2020, including as a result of the migration of a commercial mortgage loan that is delinquent for over 30 days with respect to a $5.0 million final balloon payment but with respect to which the Corporation continues to receive from the borrower interest and principal payments. In addition, there was an increase of $7.2 million related to loans acquired in the BSPR transaction, primarily a $6.1 million matured commercial and industrial loan.

In working with borrowers affected by the COVID-19 pandemic, the Corporation has agreed to let consumer borrowers (i.e., borrowers under residential mortgages, personal loans, auto loans, finance leases and small loans) that were current in their payments or no more than 2 payments in arrears (not having exceeded 89 days past due as of March 16, 2020) to defer payments on their loans in some cases for up to six months but not beyond September 30, 2020, with few exceptions. In the case of credit cards and individual lines of credit, the borrowers were required to be current or less than 29 days past due in their payments as of March 16, 2020 to qualify for the payment deferral program providing for payment deferrals in some cases up to August 31, 2020. For both consumer and residential mortgage loans subject to the deferral programs, each borrower is required to begin making their regularly scheduled loan payment at the end of the deferral period and the deferred amounts were moved to the end of the loan. The payment deferral programs were applied prospectively beginning, in some instances, with the scheduled contractual payment due in March. For commercial loans, any request for payment deferral is analyzed on a case by case basis. Most of these deferred repayment arrangements have been done under the provisions of the Section 4013 of the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act of 2020") or the Revised Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus. In Puerto Rico, the moratoriums for consumer and residential mortgage products were mandated by local law.

As of September 30, 2020, the Corporation had under deferred repayment arrangements 25,173 loans, totaling $1.2 billion, or 10% of its total loan portfolio held for investment, as shown in the following table:

PaymentDeferralPrograms(Dollars in thousands) As of September 30, 2020 Count BalanceResidential 3,227 $ 511,878mortgage loans Commercial and 196 540,772Constructionloans Consumer 21,750 168,679loans Loans held 25,173 $ 1,221,329 for investmentLoans held for sale - -

Total 25,173 $ 1,221,329 loans As of October 21, 2020, approximately $83.7 million, or 1%, of the total loan portfolio held for investment balance continue to be under deferment programs, primarily commercial and construction loans. The $83.7 million of loans under deferred payment agreements as of October 21, 2020 consisted of 69 residential mortgage loans, totaling $18.4 million, 52 commercial and construction loans, totaling $62.9 million, and 160 consumer loans, totaling $2.3 million.

As a certified SBA lender, the Corporation is participating in the SBA Paycheck Protection Program (PPP) to help provide loans to the Corporation's small business customers to provide them with additional working capital. During the third quarter of 2020, the Corporation originated 636 loans under this program, totaling $15.1 million. Together with originations closed in the second quarter, the Corporation has executed over 6,000 loans for approximately $390.3 million in the two rounds of the program. The acquisition of BSPR added $77.6 million of SBA PPP loans as of September 30, 2020. As of September 30, 2020, the total amount of SBA PPP loans carried on books amounted to $453.4 million (outstanding balance - $462.3 million).

Allowance for Credit Losses

Effective January 1, 2020, the Corporation adopted the CECL impairment model required by the Accounting Standards Codification Topic 326 ("ASC 326"). The adoption of this standard replaced the incurred loss methodology with a methodology, which is referred to as CECL, to estimate the allowance for credit losses ("ACL") for the remaining estimated life of a financial asset carried at amortized cost and certain off-balance sheet credit exposures considering, among other things, expected future changes in macroeconomic conditions. ASC 326 does not require restatement of comparative period financial statements; as such, results for the first nine months of 2020 reflect the adoption of ASC 326, while prior periods reflect results under the previously required incurred loss methodology.

The following table summarizes the activity of the ACL for on-balance sheet and off-balance sheet exposures during the third quarter and nine-month period ended September 30, 2020:

Quarter Ended September 30, 2020 Loans and Unfunded Loan Held-to-Maturity Availabe-for-Sale Allowancefor Credit Finance Leases Commitments Debt Securities Debt Securities TotalLosses(Dollars in thousands)Allowancefor credit $ $ 7,084 $ 9,268 $ 1,631 $ losses, 319,297 337,280beginningbalance Provision 48,078 (803 ) (361 ) 46,914 for credit - losses Initial 1,269 allowance on 28,744 - - 30,013PCD assetsNet ) (245 ) )charge-offs (11,401 - - (11,646

Allowance for credit $ 384,718 $ 6,281 (1 ) $ 10,176 $ 1,386 $ 402,561 losses, endof period (1) Includedin accountspayable and otherliabilities. Nine-Month Period Ended September 30, 2020 Loans and Unfunded Loan Held-to-Maturity Availabe-for-Sale Allowancefor Credit Finance Leases Commitments Debt Securities Debt Securities TotalLosses(Dollars in thousands)Allowancefor creditlosses, beginning $ 155,139 $ - $ - $ - $ 155,139 balanceprior toadoption ofCECLImpact ofadoptingCECL 3,922 8,134 (cumulative 81,165 - 93,221transitionadjustment)(2)Allowancefor credit 3,922 8,134 losses, 236,304 - 248,360January 1,2020Provision 158,531 2,359 773 1,631 163,294 for credit losses Initial 1,269 allowance on 28,744 - - 30,013PCD assetsNet ) (245 ) )charge-offs (38,861 - - (39,106

Allowance for credit $ 384,718 $ 6,281 (1 ) $ 10,176 $ 1,386 $ 402,561 losses, endof period (1) Included in accounts payable and other liabilities.(2) Cumulative effect judgement recorded on January 1, 2020. The main variances of the total ACL by main categories follow:

Allowance for Credit Losses for Loans and Finance Leases

The following table sets forth information concerning the allowance for credit losses for loans and finance leases during the periods indicated:

Quarter Ended(Dollars in September June 30, March 31, December 31, Septemberthousands) 30, 30, 2020 2020 2020 2019 2019

Allowance forcredit losses, $ 319,297 $ 292,774 $ 155,139 $ 165,575 $ 172,011 beginningbalance Impact of - 81,165 - - adopting ASC -326Allowance forcredit losseson loans andfinance 319,297 292,774 236,304 165,575 172,011 leases,beginningbalance afterCECL adoption Provision for 48,078 36,408 74,045 8,473 7,398 credit losses Initial 28,744 - - - - allowance onPCD loansNet(charge-offs) recoveries ofloans: Residential (2,283 ) (1,794 ) (3,779 ) (5,930 ) (4,414 ) mortgage Commercial (3,104 ) 25 (84 ) (103 ) (717 ) mortgage Commercial (70 ) 5 (10 ) 208 1,439 and Industrial Construction 36 (54 ) 24 (8 ) 211

Consumer and (5,980 ) (8,067 ) (13,726 ) (13,076 ) (10,353 ) finance leasesNet (11,401 ) (9,885 ) (17,575 ) (18,909 ) (13,834 )charge-offsAllowance forcredit losseson loans and $ 384,718 $ 319,297 $ 292,774 $ 155,139 $ 165,575 financeleases, end ofperiod Allowance forcredit losseson loans andfinance leases 3.25 % 3.41 % 3.24 % 1.72 % 1.85 %to period endtotal loansheld forinvestment Netcharge-offs(annualized)to average 0.45 % 0.43 % 0.78 % 0.84 % 0.61 %loansoutstandingduring theperiodProvision forcredit losseson loans andfinance leases 4.22 x 3.68 x 4.21 x 0.45 x 0.53 xto netcharge-offsduring theperiod * As of September 30, 2020, the ACL for loans and finance leases was $384.7 million, up $65.4 million from June 30, 2020. The increase was primarily due to the initial ACL required with respect to loans from the acquisition of BSPR. The CECL accounting standard requires the Corporation to provide for an ACL for non-PCD loans at the time of acquisition through a direct charge to earnings, in addition to any fair value adjustments on these loans. Accordingly, the Corporation recorded approximately $37.5 million in provision for credit losses for non-PCD loans acquired in the BSPR acquisition. In addition, for purchased credit deteriorated ("PCD") loans totaling $785 million, the Corporation established a $28.7 million ACL representing the fair value credit marks on these loans. The initial ACL for PCD loans is not established through a charge to the provision for credit losses, but, rather, through an initial adjustment to the loan's amortized cost. * The provision for credit losses on loans and finance leases was $48.1 million for the third quarter of 2020, up $11.7 million from $36.4 million in the second quarter of 2020. The increase reflects the effect of the aforementioned charge of $37.5 million recorded in the third quarter with respect to non-PCD loans acquired in the BSPR transaction, partially offset by lower reserve builds for the legacy loan portfolio in the third quarter. The following table shows the breakdown of the provision for credit losses by portfolio for the third and second quarters of 2020:

Quarter Ended September 30, 2020 Residential Commercial Loans Consumer (Dollars in Mortgage (including Commercial and Finance Total thousands) Loans Mortgage, C&I, and Leases Construction) Provision for credit losses on loans and $ (3,730 ) $ 11,147 $ 3,167 $ 10,584 finance leases (legacy operations) Day 1 reserves required for 13,605 13,769 10,120 37,494 acquired non-PCD loans Provision for credit losses on $ 9,875 $ 24,916 $ 13,287 $ 48,078 loans and finance leases Quarter Ended June 30, 2020 Residential Commercial Loans Consumer (Dollars in Mortgage (including Commercial and Finance Total thousands) Loans Mortgage, C&I, and Leases Construction) Provision for credit losses on $ 6,162 $ 18,035 $ 12,211 $ 36,408 loans and finance leases - Provision for credit losses for the legacy commercial and construction loans portfolio of $11.1 million, compared to $18.0 million in the second quarter of 2020, reflecting lower reserve builds compared to the more significant increase in reserves in the second quarter. Notwithstanding, a reserve build of $5.8 million for the legacy commercial and construction loan portfolio was recorded in the third quarter of 2020 primarily reflecting adverse changes in the economic forecast used in the Corporation's CECL model affecting the retail real estate industry.

- Release of credit losses for the legacy residential mortgage loans portfolio of $3.7 million, compared to a provision of $6.2 million in the second quarter of 2020. The reserve release for the legacy portfolio in the third quarter reflects the effect of favorable changes in the economic forecast used in the Corporation's CECL model, primarily in the regional home price index, and the overall decrease in size of the legacy portfolio.

- Provision for credit losses for the legacy consumer loans and finance leases portfolio of $3.2 million, compared to $12.2 million in the second quarter of 2020. The decrease primarily reflects the effect of lower reserve builds for the legacy auto loan portfolio in the third quarter compared to the more significant increase in the reserve in the second quarter, and a decrease in charge-offs taken on small personal loans. In addition, there were reserve releases recorded for the legacy credit card and personal loan portfolios, primarily related to the decrease in the overall size of these components of the consumer loan portfolio and changes in economic forecast employed in the Corporation's CECL model.

* The ratio of the ACL for loans and finance leases to total loans held for investment was 3.25% as of September 30, 2020, compared to 3.41% as of June 30, 2020. No ACL was allocated to SBA PPP loans as they are fully guaranteed. On a non-GAAP basis, excluding SBA PPP loans, the ratio of the ACL for loans and finance leases to adjusted total loans held for investment was 3.38% as of September 30, 2020 compared to 3.55% as of June 30, 2020. The ratio of the total allowance for credit losses for loans and finance leases to nonaccrual loans held for investment was 191.15% as of September 30, 2020, compared to 156.54% as of June 30, 2020. The total ACL established for loans acquired in the BSPR acquisition was $66.2 million, or 2.68% of the total loans held for investment acquired from BSPR (excluding SBA PPP loans), as of September 30, 2020.

The following table sets forth information concerning the composition of the Corporation's ACL for loans and finance leases as of September 30, 2020 and June 30, 2020 by loan category:

Residential Commercial Loans Consumer and(Dollars in Mortgage (including Commercial Finance Totalthousands) Loans Mortgage, C&I, and Leases Construction) As ofSeptember 30, 2020Total loansheld for investment: Amortized $ $ $ $ cost 3,636,713 5,638,476 2,572,086 11,847,275

Allowance for credit 131,781 128,876 124,061 384,718losses onloansAllowancefor creditlosses on 3.62% 2.29% 4.82% 3.25%loans toamortizedcost As of June 30, 2020 Total loansheld for investment: Amortized $ $ $ $ cost 2,890,301 4,180,672 2,295,243 9,366,216

Allowance for credit 111,450 95,545 112,302 319,297losses onloansAllowancefor creditlosses on 3.86% 2.29% 4.89% 3.41%loans toamortizedcost Net Charge-Offs

The following table presents ratios of annualized net charge-offs to average loans held-in-portfolio:

Quarter Ended September June March December September 30, 30, 31, 31, 30, 2020 2020 2020 2019 2019

Residential mortgage 0.29% 0.25% 0.52% 0.80% 0.58%

Commercial mortgage 0.73% -0.01% 0.02% 0.03% 0.19%

Commercial and 0.01% 0.00% 0.00% -0.04% -0.26%Industrial Construction -0.08% 0.13% -0.08% 0.03% -0.81%

Consumer and finance 1.00% 1.41% 2.38% 2.34% 1.92%leases Total loans 0.45% 0.43% 0.78% 0.84% 0.61%

The ratios above are based on annualized net charge-offs and are not necessarily indicative of the results expected in subsequent periods.

Net charge-offs were $11.4 million for the third quarter of 2020, or an annualized 0.45% of average loans, compared to $9.9 million, or an annualized 0.43% of average loans, in the second quarter of 2020. The increase of $1.5 million in net charge-offs consisted of:

* A $3.2 million increase in commercial and construction loan net charge-offs, primarily due to the $3.1 million charge-off taken on a commercial mortgage loan in the Puerto Rico region. * A $2.1 million decrease in consumer loan net charge-offs, primarily reflecting decreases in charge-offs taken on small personal loans and credit cards. * A $0.4 million increase in residential mortgage loan net charge-offs, primarily related to charge-offs taken on delinquent loans repurchased from GNMA pools.

Allowance for Credit Losses for Unfunded Loan Commitments

The Corporation estimates expected credit losses over the contractual period in which the Corporation is exposed to credit risk as a result of a contractual obligation to extend credit, such as pursuant to unfunded loan commitments and standby letters of credit for commercial and construction loans, unless the obligation is unconditionally cancellable by the Corporation. The ACL for off-balance sheet credit exposures is adjusted as a provision for credit loss expense. As of September 30, 2020, the ACL for off-balance sheet credit exposures was $6.3 million, down $0.8 million from $7.1 million as of June 30, 2020. The decrease consisted of a $2.1 million release recorded as a reduction of the provision for credit losses related to unfunded loan commitments of the legacy portfolio, mainly in connection with a construction loan facility, partially offset by a $1.3 million charge recorded in connection with unfunded loan commitments assumed in the BSPR acquisition.

Allowance for Credit Losses for Held-to-Maturity Debt Securities

As of September 30, 2020, the held-to-maturity securities portfolio consisted of Puerto Rico municipal bonds. As of September 30, 2020, the ACL for held-to-maturity debt securities was $10.2 million, up $0.9 million from $9.3 million as of June 30, 2020. The $0.9 million increase consisted of a $1.3 million initial ACL established for PCD debt securities acquired in the BSPR acquisition, partially offset by a $0.4 million release related to the repayment of certain bonds of the legacy debt securities portfolio during the third quarter. The initial ACL for PCD debt securities is not established through a charge to the provision for credit losses, but rather through an initial adjustment to the debt securities' amortized cost.

Allowance for Credit Losses for Available-for-Sale Debt Securities

As of September 30, 2020, the ACL for available-for-sale debt securities was $1.4 million, down $0.2 million from $1.6 million as of June 30, 2020. The $0.2 million decrease was related to a charge-off taken against the previously-established reserve for private label MBS.

STATEMENT OF FINANCIAL CONDITION

Total assets were approximately $18.7 billion as of September 30, 2020, up $4.6 billion from June 30, 2020. The statement of financial condition as of September 30, 2020 includes $2.6 billion in loans and $354.8 million in investment securities related to the acquisition of BSPR. In addition, there was a $1.2 billion increase in cash and cash equivalents, reflecting both the effect of proceeds from the aforementioned sales of U.S. Treasury Notes acquired from BSPR amounting to $803.3 million and a $406.6 million increase related to the excess of the cash acquired in the BSPR acquisition over the cash consideration paid at closing.

The following variances within the main components of total assets are noted:

* A $2.5 billion increase in total loans. The increase reflects primarily $2.6 billion of loans (including $77.6 million of SBA PPP loans) resulting from the BSPR acquisition in the Puerto Rico region, partially offset by a $60.5 million decrease in the legacy portfolio. Loans held for investment include a net purchase accounting discount of $66.9 million as of September 30, 2020 related to the acquisition of BSPR. The decrease of $60.5 million in the legacy portfolio during the third quarter consisted of reductions of $60.3 million in the Puerto Rico region and $3.4 million in the Virgin Islands region, partially offset by a $3.2 million increase in the Florida region. On a portfolio basis, the decrease of the legacy portfolio consisted of reductions of $65.8 million in residential mortgage loans and $60.7 million in commercial and construction loans (net of a $16.2 million increase in SBA PPP loans), partially offset by a $66.0 million increase in consumer loans. The following table provides additional information about the decrease/increase on loans:

(In thousands) Change Composition September 30, June 30, Balance Organic Organic 2020 2020 Growth/ Change Acquired Growth/(Loss) (Loss) % Residential $ 3,636,713 $ 2,890,301 $ 746,412 $ 816,608 $ (70,196 ) -2.43 % mortgage loans Commercial loans: Construction 13,579 7.64 % loans 191,356 177,777 - 13,579

Commercial 765,194 762,663 0.17 % mortgage 2,220,277 1,455,083 2,531 loans Commercial and 3,226,843 2,547,812 679,031 755,852 (76,821 ) -3.02 % Industrial loans Commercial 1,457,804 1,518,515 ) -1.45 % loans 5,638,476 4,180,672 (60,711

19,530 4.45 % Finance leases 458,381 438,851 - 19,530

-

257,313 210,860 2.50 % Consumer loans 2,113,705 1,856,392 46,453

Loans held 2,481,059 2,545,983 ) -0.69 % for 11,847,275 9,366,216 (64,924 investment Loans held for 9,684 5,272 11.32 % sale 48,670 38,986 4,412

Total loans $ 11,895,945 $ 9,405,202 $ 2,490,743 $ 2,551,255 $ (60,512 ) -0.64 %

The decrease in the legacy loan portfolio related to the Puerto Rico region consisted of a decrease of $81.1 million in commercial and construction loans and a $48.6 million decrease in residential mortgage loans, partially offset by a $69.4 million increase in consumer loans, primarily auto loans. The decrease in the legacy commercial and construction loan portfolio reflects a $43.1 million reduction in exposure to three large commercial and industrial relationships, a $26.6 million decrease in the balance of floor plan lines of credit, and other reductions in revolving lines of credits, partially offset by a $14.6 million increase in SBA PPP loans. The decline in the legacy residential mortgage loan portfolio in the Puerto Rico region reflects the effect of collections and charge-offs, which more than offset the volume of non-conforming loan originations. Approximately 92% of the $136.3 million in residential mortgage loan originations in the Puerto Rico region during the third quarter of 2020 consisted of conforming loan originations and refinancings. The growth in consumer loans was driven by new loan originations, primarily auto loans and finance leases.

The decrease in total loans in the Virgin Islands region consisted of a $3.8 million decrease in residential mortgage loans, partially offset by a $0.4 million increase in the balance of commercial and construction loans. The increase in commercial and construction loans included an increase of $0.8 million in SBA PPP loans.

The increase in total loans in the Florida region consisted of a $20.0 million increase in the balance of commercial and construction loans, driven by the origination of two large commercial loans totaling $29.9 million, partially offset by reductions of $13.4 million in residential mortgage loans and $3.4 million in consumer loans.

Total loan originations, including refinancings, renewals and draws from existing commitments (excluding credit card utilization activity), amounted to $971.1 million in the third quarter of 2020, compared to $902.9 million in the second quarter of 2020. Total loan originations in the third quarter included $15.1 million of SBA PPP loan originations, compared to $375.2 million originated in the second quarter of 2020. Excluding SBA PPP loans, total loan originations of $956.0 million in the third quarter of 2020 increased by $428.3 million from $527.7 million in the second quarter of 2020 consisting of: (i) a $217.0 million increase in commercial and construction loan originations, driven by higher utilization of commercial lines of credit, an increased volume of loan renewals and refinancings, and a higher volume of new commercial loan originations in the Florida region; (ii) a $135.6 million increase in consumer loan originations as the auto and finance leases originations picked up after the reopening of the auto retail industry in the latter part of the second quarter; and (iii) a $75.8 million increase in residential mortgage loan originations, driven by a higher volume of refinancings and conforming loan originations due to the lower mortgage loan interest rate environment.

Total loan originations in the Puerto Rico region amounted to $760.0 million in the third quarter of 2020, compared to $618.6 million in the second quarter of 2020. Total loan originations in the Puerto Rico region during the third quarter of 2020 included $14.0 million of SBA PPP loan originations, compared to $252.0 million originated in the second quarter of 2020. Excluding SBA PPP loans, total loan originations of $746.0 million in the Puerto Rico region during the third quarter of 2020 increased by $379.4 million from $366.6 million in the second quarter of 2020, consisting of a $181.9 million increase in commercial and construction loan originations, driven by higher utilization of commercial lines of credit and an increased volume of loan renewals and refinancings, a $134.5 million increase in consumer loan originations, and a $63.0 million increase in residential mortgage loan originations. The increase in residential mortgage loans was driven by refinancings and conforming loan originations sold in the secondary market, while the increase in consumer loan originations primarily reflects the effect of the reopening of the auto retail industry in the latter part of the second quarter after disruptions caused by the COVID-19 pandemic-related lockdowns and quarantines.

Total loan originations in the Virgin Islands region amounted to $31.0 million in the third quarter of 2020, compared to $40.8 million in the second quarter of 2020. Total loan originations in the Virgin Islands region during the third quarter of 2020 included $0.7 million of SBA PPP loan originations, compared to $29.7 million originated in the second quarter of 2020. Excluding SBA PPP loans, total loan originations of $30.4 million in the Virgin Islands region during the third quarter of 2020 increased by $19.3 million from $11.1 million in the second quarter of 2020, consisting of a $19.3 million increase in commercial and construction loan originations, driven by the refinancing and renewal of certain government loans, and a $1.1 million increase in consumer loan originations, partially offset by a $1.1 million decrease in residential mortgage loan originations.

Total loan originations in the Florida region amounted to $180.0 million in the third quarter of 2020, compared to $243.4 million in the second quarter of 2020. Total loan originations in the Florida region during the third quarter of 2020 included $0.4 million of SBA PPP loan originations, compared to $93.5 million originated in the second quarter of 2020. Excluding SBA PPP loans, total loan originations of $179.6 million in the Florida region during the third quarter of 2020 increased by $29.7 million from $149.9 million in the second quarter of 2020, consisting of a $15.7 million increase in commercial and construction loan originations, driven by the aforementioned origination of two large commercial loans totaling $29.9 million, and a $14.0 million increase in residential mortgage loan originations.

* A $624.2 million increase in investment securities, mainly driven by purchases of $850.7 million of U.S. agencies MBS and callable debentures during the third quarter, and the acquisition of BSPR, which added $294.7 million of U.S. agencies residential pass-through MBS, $56.9 million of Puerto Rico municipal bonds accounted for as held-to-maturity investment securities, and $3.0 million of FHLB stock as of September 30, 2020. These variances were partially offset by approximately $205.9 million of U.S. agencies bonds that were called prior to maturity during the third quarter, prepayments of $179.9 million of U.S. agencies residential pass-through MBS, and the sales of $116.6 million of U.S. agencies MBS. The sales of $116.6 million have settlement dates in October; thus, as of September 30, 2020, the decrease in the investment securities portfolio was offset by a corresponding increase in accounts receivable on unsettled investment sales included as part of Other assets in the consolidated statement of financial condition.

* A $65.4 million increase in the ACL for loans and finance leases, reflecting a provision of $48.1 million and an initial ACL of $28.7 million with respect to PCD loans from the acquisition of BSPR. The provision was primarily a result of the BSPR acquisition and reserves build for the legacy commercial and construction loan portfolio.

* A $1.2 billion increase in cash and cash equivalents attributable, among other things, to proceeds from sales of U.S. Treasury Notes acquired from BSPR and the $406.6 million increase related to the excess of the cash acquired in the BSPR acquisition over the cash consideration paid at closing.

* Core deposits and other intangible assets of $38.5 million as of September 30, 2020 related to the acquisition of BSPR.

* A $41.4 million increase in net deferred tax assets, primarily related to the acquisition of BSPR.

Total liabilities were approximately $16.4 billion as of September 30, 2020, up $4.6 billion from June 30, 2020. The increase was mainly the result of the acquisition of BSPR, which added $4.2 billion in total deposits as of September 30, 2020.

The increase in total liabilities was mainly due to:

* A $3.7 billion increase in total deposits, excluding brokered deposits and government deposits, consisting of a growth of $3.7 billion in the Puerto Rico region, partially offset by decreases of $30.3 million and $14.5 million in the Florida and Virgin Islands regions, respectively. The increase in the Puerto Rico region reflects primarily $3.4 billion of deposits (net of brokered and government deposits) resulting from the BSPR acquisition. Organic deposit growth was $216.4 million during the third quarter, primarily demand deposits, which grew by 6%, or $250.4 million.

* An $899.3 million increase in government deposits, reflecting increases of $782.9 million, $115.8 million, and $0.7 million in the Puerto Rico, Virgin Islands, and Florida regions, respectively. The increase in the Puerto Rico region during the third quarter reflects primarily $670.5 million of government deposits resulting from the BSPR acquisition. The remaining $228.8 million of organic growth reflects an increase in balances of transactional accounts of certain municipalities in Puerto Rico, related to the collection of municipal license taxes, and higher balances on transactional accounts of the central government in the U.S. Virgin Islands driven by collection of income taxes.

Partially offset by:

* A $56.0 million decrease in brokered deposits, reflecting the effect of the maturity of approximately $87.3 million of brokered CDs, with an all-in cost of 2.15%, that were paid off during the third quarter, partially offset by an increase of $31.2 million in the balance of non-maturity brokered money market deposit accounts maintained by a deposit broker. The BSPR acquisition added $56.1 million in non-maturity brokered deposits as of September 30, 2020.

The following table provides additional information about the increase/decrease on deposits:

(In Change Composition thousands) September 30, June 30, Balance Organic Organic 2020 2020 Change Acquired Growth/(Loss) Growth/ (Loss) % Demand $ 6,619,389 $ 4,163,889 $ 2,455,500 $ 2,205,143 $ 250,357 6.01 %DepositsSavings 3,226,685 2,229,684 997,001 975,420 21,581 0.97 %AccountsGovernment 2,116,867 1,217,529 899,338 670,493 228,845 18.80 %DepositsCertificates 2,685,413 2,475,030 210,383 265,890 (55,507 ) -2.24 %of DepositsBrokered 554,544 610,554 (56,010 ) 56,087 (112,097 ) -18.36 %Deposits Total $ 15,202,898 $ 10,696,686 $ 4,506,212 $ 4,173,033 $ 333,179 3.11 % Deposits Total stockholders' equity amounted to $2.2 billion as of September 30, 2020, an increase of $10.4 million from June 30, 2020. The increase was driven by earnings generated in the third quarter, partially offset by common and preferred stock dividends declared in the second quarter totaling $11.0 million.

The Corporation implemented the CECL model commencing January 1, 2020 and elected to phase in the full effect of CECL on regulatory capital over the five-year transition period. As of September 30, 2020, capital ratios remained strong compared to regulatory levels for well capitalized banks. The Corporation's preliminary estimated common equity tier 1 capital, tier 1 capital, total capital and leverage ratios under the Basel III rules were 17.22%, 17.53%, 20.32% and 13.04%, respectively, as of September 30, 2020, compared to common equity tier 1 capital, tier 1 capital, total capital and leverage ratios of 21.52%, 21.90%, 25.08%, and 15.23%, respectively, as of June 30, 2020.

Meanwhile, the preliminary estimated common equity tier 1 capital, tier 1 capital, total capital and leverage ratios of our banking subsidiary, FirstBank Puerto Rico, were 15.94%, 18.60%, 19.86%, and 13.85%, respectively, as of September 30, 2020, compared to common equity tier 1 capital, tier 1 capital, total capital and leverage ratios of 20.02%, 23.32%, 24.59% and 16.23%, respectively, as of June 30, 2020.

The acquired assets and off-balance sheet items of BSPR have been fully included and risk weighted in the regulatory capital position determination of the Corporation and FirstBank Puerto Rico as of September 30, 2020. However, following regulatory capital requirements, the quarterly average asset calculation used for the leverage ratio includes the dollar amounts of the acquired assets from the acquisition date through the end of the third quarter, and the denominator for the number of days in the entire quarter, which resulted in a diluted quarterly average asset balance for the quarter ended September 30, 2020. The full effect in the leverage ratio of the assets acquired in the transaction will be reflected in the regulatory capital position determination as of December 31, 2020.

Tangible Common Equity

The Corporation's tangible common equity ratio decreased to 11.36% as of September 30, 2020, compared to 15.25% as of June 30, 2020.

The following table presents a reconciliation of the Corporation's tangible common equity and tangible assets over the last five quarters to the comparable GAAP items:

(In thousands,except ratios and per shareinformation) September 30, June 30, March 31, December 31, September 30, 2020 2020 2020 2019 2019

Tangible Equity: Total equity $ 2,225,282 $ 2,214,834 $ 2,199,751 $ 2,228,073 $ 2,200,595 - GAAP Preferred ) ) ) ) ) equity (36,104 (36,104 (36,104 (36,104 (36,104

) ) ) ) ) Goodwill (34,401 (28,098 (28,098 (28,098 (28,098

Purchased credit card (5,789 ) (2,668 ) (3,141 ) (3,615 ) (4,137 ) relationship intangible Core deposit ) ) ) ) ) intangible (37,749 (3,086 (3,287 (3,488 (3,695

Insurance customer (355 ) (394 ) (432 ) (470 ) (508 ) relationship intangible Tangible $ 2,110,884 $ 2,144,484 $ 2,128,689 $ 2,156,298 $ 2,128,053 common equity Tangible Assets: Total assets $ 18,659,768 $ 14,096,406 $ 13,047,977 $ 12,611,266 $ 12,530,713 - GAAP ) ) ) ) ) Goodwill (34,401 (28,098 (28,098 (28,098 (28,098

Purchased credit card (5,789 ) (2,668 ) (3,141 ) (3,615 ) (4,137 ) relationship intangible Core deposit ) ) ) ) ) intangible (37,749 (3,086 (3,287 (3,488 (3,695

Insurance customer (355 ) (394 ) (432 ) (470 ) (508 ) relationship intangible Tangible $ 18,581,474 $ 14,062,160 $ 13,013,019 $ 12,575,595 $ 12,494,275 assets Common shares 218,229 218,158 218,161 217,359 217,361 outstanding Tangible 11.36 % 15.25 % 16.36 % 17.15 % 17.03 % common equity ratio Tangible book value $ 9.67 $ 9.83 $ 9.76 $ 9.92 $ 9.79 per common share Exposure to Puerto Rico Government

As of September 30, 2020, the Corporation had $400.6 million of direct exposure to the Puerto Rico Government, its municipalities and public corporations, compared to $203.5 million as of June 30, 2020. The direct exposure to the Puerto Rico government as of September 30, 2020 reflects $216.6 million in Puerto Rico government loans and bonds resulting from the BSPR acquisition. As of September 30, 2020, approximately $270.2 million of the exposure consisted of loans and obligations of municipalities in Puerto Rico that are supported by assigned property tax revenues and for which, in most cases, the good faith, credit and unlimited taxing power of the applicable municipality have been pledged to their repayment, and $65.4 million consisted of municipal revenue or special obligation bonds. The Corporation's total direct exposure to the Puerto Rico Government also included $13.8 million in loans extended to an affiliate of a public corporation, $43.2 million in loans of an agency of the Puerto Rico central government, and obligations of the Puerto Rico Government, specifically bonds of the PRHFA, at an amortized cost of $8.0 million (fair value of $6.9 million as of September 30, 2020), included as part of the Corporation's available-for-sale investment securities portfolio. These bonds include a residential pass-through MBS issued by the PRHFA that is collateralized by certain second mortgages with a fair value of $2.9 million, which had an unrealized loss of $1.1 million as of September 30, 2020, of which $0.3 million is due to credit deterioration and was charged against earnings through an ACL during the second quarter of 2020.

The aforementioned exposure to municipalities in Puerto Rico included $189.3 million of financing arrangements with Puerto Rico municipalities that were issued in bond form, but underwritten as loans with features that are typically found in commercial loans. These bonds are accounted for as held-to-maturity investment securities. Included in these Puerto Rico municipal bonds are $56.9 million of Puerto Rico municipal bonds resulting from the acquisition of BSPR. As of September 30, 2020, the ACL for these securities was $10.2 million, up $0.9 million from $9.3 million as of June 30, 2020.

As of September 30, 2020, the Corporation had $1.7 billion of public sector deposits in Puerto Rico, compared to $920.1 million as of June 30, 2020. These public sector deposits include $670.5 million in government deposits resulting from the BSPR acquisition. Approximately 25% of the public sector deposits as of September 30, 2020 is from municipalities and municipal agencies in Puerto Rico and 75% is from public corporations, the Puerto Rico central government and agencies, and U.S. federal government agencies in Puerto Rico.

Conference Call / Webcast Information

First BanCorp's senior management will host an earnings conference call and live webcast on Friday, October 30, 2020, at 10:00 a.m. (Eastern Time). The call may be accessed via a live Internet webcast through the investor relations section of the Corporation's web site: www.1firstbank.com or through a dial-in telephone number at (877) 506-6537 or (412) 380-2001 for international callers. The Corporation recommends that listeners go to the web site at least 15 minutes prior to the call to download and install any necessary software. Following the webcast presentation, a question and answer session will be made available to research analysts and institutional investors. A replay of the webcast will be archived in the investor relations section of First BanCorp's website, www.1firstbank.com, until October 30, 2021. A telephone replay will be available one hour after the end of the conference call through November 30, 2020 at (877) 344-7529 or (412) 317-0088 for international callers. The replay access code is 10149354.

Safe Harbor

This press release may contain "forward-looking statements" concerning the Corporation's future economic, operational and financial performance. The words or phrases "expect," "anticipate," "intend," "should," "would," "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 made, and advises readers that various factors, including, but not limited to, the following could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements: uncertainties relating to the impact of the COVID-19 pandemic, including recent increases in, and any additional waves of, COVID-19 cases and the development and availability of a vaccine and treatments for the disease, on the Corporation's business, operations, employees, credit quality, financial condition and net income, including because of uncertainties as to the extent and duration of the pandemic and the impact of the pandemic on consumer spending, borrowing and saving habits, the underemployment and unemployment rates, which can adversely affect repayment patterns, the Puerto Rico economy and the global economy, as well as the risk that COVID-19 may exacerbate any other factor that could cause our actual results to differ materially from those expressed in or implied by any forward-looking statements; the success of our preventative actions to protect the Corporation's information and that of its customers in response to the cyber incident that we recently experienced, including the integrity of our data and data security systems, increased mitigation costs or an adverse effect to our reputation; risks related to the effect on the Corporation and its customers of governmental, regulatory, or central bank responses to COVID-19 and the Corporation's participation in any such responses or programs, such as the Paycheck Protection Program established by the CARES Act of 2020, including any judgments, claims, damages, penalties, fines or reputational damage resulting from claims or challenges against the Corporation by governments, regulators, customers or otherwise, relating to the Corporation's participation in any such responses or programs; the risk that costs, expenses, and resources associated with the Corporation's recent acquisition of BSPR may be higher than expected; the ability to successfully complete the integration of systems, procedures, and personnel of BSPR into FirstBank that are necessary to make the transaction economically successful; the risk that the Corporation may not be able to effectively integrate BSPR into the Corporation's internal control over financial reporting; the risk that the cost savings and any other synergies from the acquisition may not be fully realized or may take longer to realize than expected, such as the risk that deposit attrition, customer loss and/or revenue loss following the acquisition may exceed expectations, including because of the impact of the COVID-19 pandemic on customers; uncertainty as to the ultimate outcomes of actions taken, or those that may be taken, by the Puerto Rico government, or the oversight board established by the Puerto Rico Oversight, Management, and Economic Stability Act ("PROMESA") to address the Commonwealth of Puerto Rico's financial problems, including a court-supervised debt restructuring process similar to U.S. bankruptcy protection undertaken pursuant to Title III of PROMESA, the designation by the PROMESA oversight board of Puerto Rico municipalities as instrumentalities covered under PROMESA, the effects of measures included in the Puerto Rico government fiscal plan, or any revisions to it, on our clients and loan portfolios, and any potential impact from future economic or political developments in Puerto Rico; changes in economic and business conditions, including those caused by the COVID-19 pandemic, including recent increases in, and any additional waves of, COVID-19 cases, or other global or regional health crises as well as past or future natural disasters, such as the earthquakes affecting Puerto Rico's southern coast, that directly or indirectly affect the financial health of the Corporation's customer base in the geographic areas we serve and may result in increased costs or losses of property and equipment and other assets; the impact that a slowing economy and increased unemployment or underemployment may have on the performance of our loan and lease portfolio, the market price of our investment securities, the availability of sources of funding and the demand for our products; a decrease in demand for the Corporation's products and services, resulting in lower revenues and earnings because of the continued economic recession in Puerto Rico; uncertainty as to the availability of certain funding sources, such as brokered CDs; the deteriorating weakness of the real estate markets and of the consumer and commercial sectors, which may be exacerbated by unemployment and underemployment and government restrictions imposed as a result of the COVID-19 pandemic, including recent increases in, and any additional waves of, COVID-19 cases, and their impact on the credit quality of the Corporation's loans and other assets, which have contributed and may continue to contribute to, among other things, higher than targeted levels of non-performing assets, charge-offs and provisions for credit losses, and may subject the Corporation to further risk from loan defaults and foreclosures; the impact of changes in accounting standards or assumptions in applying those standards, including the impact of the COVID-19 pandemic on the determination of the allowance for credit losses required by the new CECL accounting standard effective since January 1, 2020; the ability of FirstBank to realize the benefits of its net deferred tax assets; the ability of FirstBank to generate sufficient cash flow to make dividend payments to the Corporation; adverse changes in general economic conditions in Puerto Rico, the U.S., the U.S. Virgin Islands, and the British Virgin Islands, including the interest rate environment, market liquidity, housing absorption rates, real estate prices, and disruptions in the U.S. capital markets, including as a result of the COVID-19 pandemic and recent increases in, and any additional waves of, COVID-19 cases, which may further reduce interest margins, affect funding sources and demand for all of the Corporation's products and services, and reduce the Corporation's revenues and earnings and the value of the Corporation's assets; uncertainty related to the effect of the discontinuation of the London Interbank Offered Rate at the end of 2021; an adverse change in the Corporation's ability to attract new clients and retain existing ones; the risk that additional portions of the unrealized losses in the Corporation's investment portfolio are determined to be credit-related, including additional charges to the provision for credit losses on the Corporation's remaining $8.0 million exposure to the Puerto Rico government's debt securities held as part of the available-for-sale securities portfolio; uncertainty about legislative, tax or regulatory changes that affect financial services companies in Puerto Rico, the U.S., and the U.S. and British Virgin Islands, which could affect the Corporation's financial condition or performance and could cause the Corporation's actual results for future periods to differ materially from prior results and anticipated or projected results; changes in the fiscal and monetary policies and regulations of the U.S. federal government and the Puerto Rico and other governments, including those determined by the Federal Reserve Board, the New York FED, the FDIC, government-sponsored housing agencies, and regulators in Puerto Rico and the U.S. and British Virgin Islands; the risk of possible failure or circumvention of the Corporation's internal controls and procedures and the risk that the Corporation's risk management policies may not be adequate; the Corporation's ability to identify and prevent cyber-security incidents, such as data security breaches, malware, "denial of service" attacks, "hacking" and identity theft, a failure of which most recently caused a cyber incident, and which may result in misuse or misappropriation of confidential or proprietary information, and could result in the disruption or damage to our systems, increased costs and losses or an adverse effect to our reputation; the risk that the FDIC may increase the deposit insurance premium and/or require special assessments to replenish its insurance fund, causing an additional increase in the Corporation's non-interest expenses; the impact on the Corporation's results of operations and financial condition of business acquisitions, such as the recent acquisition of BSPR, and dispositions; a need to recognize impairments on the Corporation's financial instruments, goodwill and other intangible assets relating to business acquisitions, including as a result of the COVID-19 pandemic; the effect of changes in the interest rate environment, including as a result of the impact of the COVID-19 pandemic, including recent increases in, and any additional waves of, COVID-19 cases, on the global economy, on the Corporation's businesses, business practices and results of operations; the risk that the impact of the occurrence of any of these uncertainties on the Corporation's capital would preclude further growth of the Bank and preclude the Corporation's Board of Directors from declaring dividends; uncertainty as to whether FirstBank will be able to continue to satisfy its regulators regarding, among other things, its asset quality, liquidity plans, maintenance of capital levels and compliance with applicable laws, regulations, and related requirements; and general competitive factors and industry consolidation. 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.

Basis of Presentation

Use of Non-GAAP Financial Measures

This press release contains non-GAAP financial measures. Non-GAAP financial measures are used when management believes they will be helpful to an investor's understanding of the Corporation's results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation of the non-GAAP financial measure to the comparable GAAP financial measure, can be found in the text or in the tables in or attached to this earnings release. Any analysis of these non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP.

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 equity less preferred equity, goodwill, core deposit intangibles, and other intangibles, such as the purchased credit card relationship intangible and the insurance customer relationship intangible. Tangible assets are total assets less goodwill, core deposit intangibles, and other intangibles, such as the purchased credit card relationship intangible and the insurance customer relationship intangible. Management and many stock analysts use the tangible common equity ratio and tangible book value per common share in conjunction with 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.

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, such as the hurricanes that affected the Corporation's service areas in 2017 and the earthquakes experienced in Puerto Rico in early 2020, or health epidemics, such as the COVID-19 pandemic in 2020. 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, finance leases 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 regarded as Special Items, such as hurricane-related insurance recoveries, costs incurred in connection with the COVID-19 pandemic response efforts, merger and restructuring costs in connection with the acquisition of BSPR, and the accelerated discount from the early payoff of an acquired commercial mortgage loan reflected above, because management believes these items are not reflective of core operating performance, are not expected to reoccur with any regularity or may reoccur at uncertain times and in uncertain amounts.

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 facilitates comparison of results to the results of peers.

The following table reconciles net interest income in accordance with GAAP to net interest income excluding valuations, and net interest income on a tax-equivalent basis for third and second quarters of 2020, the third quarter of 2019 and the nine-month periods ended September 30, 2020 and 2019. The table also reconciles net interest spread and net interest margin to these items excluding valuations, and on a tax-equivalent basis.

(Dollars in Quarter Ended Nine-Month Period Endedthousands) September 30, June 30, September 30, September 30, September 30, 2020 2020 2019 2020 2019Net Interest Income Interest income $ 170,402 $ 158,616 $ 172,295 $ 494,282 $ 508,277 - GAAPUnrealized loss onderivative ) ) instruments (18 - 1 (18 6

Interest income 170,384 158,616 172,296 494,264 508,283 excluding valuationsPrepaymentpenalty incomeon a commercial - mortgage loan - - - -tied to aninterest rateswap Interest incomeexcludingvaluations and a 170,384 158,616 172,296 172,296 169,511 $2.5 million prepaymentpenaltycollected Tax-equivalent 4,964 5,135 4,964 15,751 15,215 adjustmentInterest incomeon atax-equivalent $ 175,348 $ 163,751 $ 177,260 $ 510,015 $ 523,498 basis andexcludingvaluations Interest expense 21,706 23,406 27,870 71,727 81,125 - GAAP Net interest $ 148,696 $ 135,210 $ 144,425 $ 422,555 $ 427,152 income - GAAP Net interest $ 148,678 $ 135,210 $ 144,426 $ 422,537 $ 427,158 income excluding valuations Net interestincome on atax-equivalent $ 153,642 $ 140,345 $ 149,390 $ 438,288 $ 442,373 basis andexcludingvaluations Average Balances Loans and leases $ 10,163,671 $ 9,247,878 $ 9,026,725 $ 9,472,189 $ 8,992,156

Totalsecurities,other short-term 4,871,710 3,636,532 2,691,584 3,859,381 2,655,820 investments andinterest-bearingcash balances Average $ 15,035,381 $ 12,884,410 $ 11,718,309 $ 13,331,570 $ 11,647,976 interest-earning assets Average $ 9,732,691 $ 8,436,511 $ 7,819,008 $ 8,729,809 $ 7,716,951 interest-bearing liabilities Average Yield/ RateAverage yield on 4.51 % 4.95 % 5.83 % 4.95 % 5.83 %interest-earning assets - GAAPAverage rate oninterest-bearing 0.89 % 1.12 % 1.41 % 1.10 % 1.41 %liabilities -GAAPNet interest 3.62 % 3.83 % 4.42 % 3.85 % 4.42 %spread - GAAPNet interest 3.93 % 4.22 % 4.89 % 4.23 % 4.90 %margin - GAAP Average yield oninterest-earning 4.51 % 4.95 % 5.83 % 4.95 % 5.83 %assets excludingvaluations Average rate oninterest-bearing 0.89 % 1.12 % 1.41 % 1.10 % 1.41 %liabilities excludingvaluationsNet interest 3.62 % 3.83 % 4.42 % 3.85 % 4.42 %spread excluding valuations Net interest 3.93 % 4.22 % 4.89 % 4.23 % 4.90 %margin excluding valuations Average yield oninterest-earningassets on a 4.64 % 5.11 % 6.00 % 5.11 % 6.01 %tax-equivalent basis andexcludingvaluationsAverage rate oninterest-bearing 0.89 % 1.12 % 1.41 % 1.10 % 1.41 %liabilities excludingvaluationsNet interestspread on atax-equivalent 3.75 % 3.99 % 4.59 % 4.01 % 4.60 %basis andexcludingvaluationsNet interestmargin on atax-equivalent 4.07 % 4.38 % 5.06 % 4.39 % 5.08 %basis andexcludingvaluations Financial measures adjusted to exclude the effect of Special Items that management believes are not reflective of core operating performance, are not expected to reoccur with any regularity or may reoccur at uncertain times and in uncertain amounts.

To supplement the Corporation's financial statements presented in accordance with GAAP, the Corporation uses, and believes that investors would benefit from disclosure of, non-GAAP financial measures that reflect adjustments to net income and non-interest expenses to exclude items that management identifies as Special Items because management believes they are not reflective of core operating performance, are not expected to reoccur with any regularity or may reoccur at uncertain times and in uncertain amounts. This press release includes the following non-GAAP financial measures for the third and second quarters of 2020 and the third quarter of 2019 that reflect the described items that were excluded for one of those reasons:

* Adjusted net income for the third and second quarters of 2020 and the third quarter of 2019 reflect the following exclusions:

- Gain of $5.3 million and loss of $0.2 million on the sales of U.S. agencies MBS and U.S. Treasury Notes recorded in the third quarter of 2020 and second quarter of 2020, respectively.

- Merger and restructuring costs of $10.4 million, $2.9 million, and $0.6 million recorded in the third quarter of 2020, second quarter of 2020, and third quarter of 2019, respectively, related to transaction costs and restructuring initiatives in connection with the acquisition of BSPR.

- The $8.0 million benefit related to the partial reversal of the deferred tax asset valuation allowance.

- COVID-19 pandemic-related expenses of $1.0 million and $3.0 million in the third quarter of 2020 and second quarter of 2020, respectively.

- A $0.1 million gain on the repurchase and cancellation of $0.4 million in trust preferred securities in the third quarter of 2020 reflected in the statement of income set forth above as "Gain on early extinguishment of debt."

- Benefit of $5.0 million and $0.4 million recorded in the second quarter of 2020 and third quarter of 2019, respectively, resulting from insurance recoveries associated with business interruption and hurricane-related expenses and impairments related to Hurricanes Irma and Maria.

- The accelerated discount accretion of $3.0 million resulting from the early payoff of an acquired commercial mortgage loan in the third quarter of 2019.

- The tax-related effects of all of the pre-tax items mentioned in the above bullets as follows:

* Tax benefit of $3.9 million, $1.1 million and $0.2 million in the third quarter of 2020, second quarter of 2020, and third quarter of 2019, respectively, related to merger and restructuring costs in connection with the pending acquisition of BSPR (calculated based on the statutory tax rate of 37.5%).

* Tax benefit of $0.4 million and $1.1 million in the third quarter of 2020 and second quarter of 2020, respectively, in connection with the COVID-19 pandemic-related expenses (calculated based on the statutory tax rate of 37.5%)

* Tax expense of $1.9 million and $0.1 million in the second quarter of 2020 and third quarter of 2019, respectively, related to the benefit of hurricane-related insurance recoveries (calculated based on the statutory tax rate of 37.5%).

* Tax expense of $1.1 million in the third quarter of 2019 related to the accelerated discount accretion from the payoff of an acquired commercial mortgage loan (calculated based on the statutory tax rate of 37.5% for 2019).

* No tax expense/benefit was recorded for the gain/loss on sales of U.S. agencies MBS and U.S. Treasury Notes in the third and second quarters of 2020. Those sales consisted of tax-exempt securities or were recorded at the tax-exempt international banking entity subsidiary level.

* The gain realized on the repurchase and cancellation of trust-preferred securities in the third quarter of 2020 recorded at the holding company level had no effect on the income tax expense in 2020.

* Adjusted non-interest expenses - The following tables reconcile for the third and second quarters of 2020 the non-interest expenses to adjusted non-interest expenses, which is a non-GAAP financial measure that excludes some of the Special Items identified above:

(Dollars in thousands)Third Non-Interest Expenses Merger and COVID-19 Pandemic- Adjusted (Non-GAAP)Quarter 2020 (GAAP) Restructuring Costs Related Expenses Non-interest $ 107,508 $ 10,441 $ 962 $ 96,105expenses Employees' 43,045compensation 43,063 - 18and benefitsOccupancy 768 18,296and 19,064 - equipmentBusiness 2,975promotion 3,046 - 71

Professional 11,561service fees 11,563 - 2

Taxes, other 4,428than income 4,510 - 82taxesInsurance and 3,019 - - 3,019supervisoryfeesNet loss on other real 1,019 - - 1,019estate ownedoperationsMerger and 10,441 restrucuring 10,441 - - costsOther 11,762non-interest 11,783 - 21expenses (Dollars in thousands) Second Non-Interest Expenses (GAAP) Merger and Restructuring Costs COVID-19 Pandemic-Related Expenses Adjusted (Non-GAAP)Quarter 2020 Non-interest $ 89,786 $ 2,902 $ 2,961 $ 83,923expenses Employees' 1,695 37,837compensation 39,532 - and benefitsOccupancy 851 15,525and 16,376 - equipmentBusiness 295 2,019promotion 2,314 -

Professional 11,963service fees 11,968 - 5

Taxes, other 3,500than income 3,577 - 77 taxesInsurance and 2,565 - - 2,565supervisoryfeesNet loss on other real 811 - - 811estate ownedoperationsMerger and 2,902 restrucuring 2,902 - - costsOther 9,703non-interest 9,741 - 38 expenses * Allowance for credit losses on loans and finance leases to adjusted total loans held for investment ratio - The following table reconciles the ratio of the allowance for credit losses on loans and finance leases to adjusted total loans held for investment, excluding SBA PPP loans, as of September 30, 2020 and June 30, 2020:

Allowance for credit losses for loans and finance leases to Loans Held for Investment (GAAP to Non-GAAP reconciliation) As of September 30, 2020 (In Allowance for Credit Losses for Loans Held for Investmentthousands) Loans and Finance Leases Allowancefor creditlosses forloans and finance $ 384,718 $ 11,847,275leases andloans heldforinvestment(GAAP)Less: SBA PPP loans - 453,358

Allowancefor creditlosses forloans andfinanceleases and adjusted $ 384,718 $ 11,393,917loans heldforinvestment,excludingSBA PPPloans(Non-GAAP) Allowancefor creditlosses forloans andfinance 3.25 % leases toloans heldforinvestment(GAAP)Allowancefor creditlosses forloans andfinanceleases toadjusted 3.38 % loans heldforinvestment,excludingSBA PPPloans(Non-GAAP) Allowance for credit losses for loans and finance leases to Loans Held for Investment (GAAP to Non-GAAP reconciliation) As of June 30, 2020 (In Allowance for Credit Losses for Loans Held for Investmentthousands) Loans and Finance Leases Allowancefor creditlosses forloans and finance $ 319,297 $ 9,366,216leases andloans heldforinvestment(GAAP)Less: SBA PPP loans - 359,572

Allowancefor creditlosses forloans andfinanceleases and adjusted $ 319,297 $ 9,006,644loans heldforinvestment,excludingSBA PPPloans(Non-GAAP) Allowancefor creditlosses forloans andfinance 3.41 % leases toloans heldforinvestment(GAAP)Allowancefor creditlosses forloans andfinanceleases toadjusted 3.55 % loans heldforinvestment,excludingSBA PPPloans(Non-GAAP) * Adjusted provision for credit losses on loans to net charge-offs ratios - The following table reconciles the ratio of the provision for credit losses on loans and finance leases to net charge-offs to the ratio of adjusted provision for credit losses on loans and finance leases to net charge-offs for the nine-month period ended September 30, 2019 excluding the hurricane-related qualitative reserve releases, which the Corporation regards as a Special Item:

Provision for credit losses for loans and finance leases to Net Charge-Offs (GAAP to Non-GAAP reconciliation) Nine-Month Period Ended September 30, 2019 (In thousands) Provision for Credit Losses for Net Charge-Offs Loans and Finance Leases Provision forcredit losses for $ $ 62,539loans and finance 31,752 leases and netcharge-offs (GAAP)Less Special Item: Hurrricane-related qualitative 6,425 - reserve release Provision forcredit losses forloans and finance $ $ 62,539leases and net 38,177 charge-offs,excluding specialitem (Non-GAAP) Provision forcredit losses for 50.77 %loans and finnace leases to netcharge-offs (GAAP)Provision forcredit losses forloans and finance 61.05 %leases to net charge-offs,excluding specialitem (Non-GAAP) Management believes that the presentation of adjusted net income, adjusted non-interest expenses and adjustments to the various components of non-interest expenses, the ratio of allowance for credit losses to adjusted total loans held for investment, and the ratio of adjusted provision for credit losses for loans and finance leases to net charge-offs enhances the ability of analysts and investors to analyze trends in the Corporation's business and understand the performance of the Corporation. In addition, the Corporation may utilize these non-GAAP financial measures as guides in its budgeting and long-term planning process.

FIRST BANCORP

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

As of September 30, June 30, December 31,(In thousands, 2020 2020 2019 except for share information)ASSETS Cash and due from $ 2,360,524 $ 1,203,791 $ 546,391 banks Money market investments:Time deposits with other financial 300 300 300institutionsOther short-term investments 108,683 97,392 97,408

Total money market investments 108,983 97,692 97,708

Investmentsecurities availablefor sale, at fairvalue (allowance for 3,294,649 2,723,171 2,123,525 credit losses of $1,078 as ofSeptember 30, 2020; $1,631 as of June30, 2020) Investmentsecurities held tomaturity, atamortized cost, net of allowance for 178,980 129,265 138,675 credit losses of$10,176 as ofSeptember 30, 2020and $9,268 as ofJune 30, 2020 Equity securities 39,290 36,262 38,249

Total investment 3,512,919 2,888,698 2,300,449 securities Loans, net ofallowance for credit losses of $384,718(June 30, 2020 - 11,462,557 9,046,919 8,847,066 $319,297; December 31, 2019 - $155,139)Loans held for sale, at lower of cost or 48,670 38,986 39,477marketTotal loans, net 11,511,227 9,085,905 8,886,543

Premises and 148,054 149,989 equipment, net 159,772

Other real estate 101,626 owned 89,049 96,319

Accrued interest receivable on loans 77,240 62,983 50,205and investmentsDeferred tax asset, 306,175 264,842 net 347,543

Goodwill 34,401 28,098 28,098

Intangible assets 43,893 5,754 7,103

172,937 178,312 Other assets 414,217

Total assets $ 18,659,768 $ 14,096,406 $ 12,611,266

LIABILITIES Deposits: Non-interest-bearing $ 4,467,041 $ 3,081,936 $ 2,367,856 depositsInterest-bearing 10,735,857 7,614,750 6,980,573 deposits Total deposits 15,202,898 10,696,686 9,348,429

Securities sold 300,000 100,000 under agreements to 300,000 repurchaseAdvances from the 490,000 570,000 Federal Home Loan 490,000 Bank (FHLB) 184,150 184,150 Other borrowings 183,762

Accounts payable and 210,736 180,614 other liabilities 257,826

Total liabilities 16,434,486 11,881,572 10,383,193

STOCKHOLDERS' EQUITY Preferred Stock,authorized50,000,000 shares;issued 22,828,174 shares; outstanding 36,104 36,104 36,1041,444,146 shares;aggregateliquidation value of$36,104 Common stock, $0.10par value,authorized2,000,000,000shares; issued, 223,028,185 shares 22,303 22,296 22,210(June 30, 2020 -222,955,394 sharesissued; December 31,2019 - 222,103,721shares issued)Less: Treasury stock ) ) )(at par value) (480 (480 (474

Common stockoutstanding,218,228,901 sharesoutstanding (June 30, 2020 - 21,823 21,816 21,736 218,157,639 sharesoutstanding;December 31, 2019 -217,359,337 sharesoutstanding)Additional paid-in 943,816 941,652 capital 945,213

Retained earnings 1,176,815 1,159,828 1,221,817

Accumulated other comprehensive 45,327 53,270 6,764income Total stockholders' 2,225,282 2,214,834 2,228,073 equityTotal liabilities $ 18,659,768 $ 14,096,406 $ 12,611,266 and stockholders' equity FIRST BANCORP CONDENSED CONSOLIDATED STATEMENTS OF INCOME Quarter Ended Nine-Month Period Ended September 30, June 30, September 30, September 30, September 30, (In thousands,except per 2020 2020 2019 2020 2019 shareinformation) Net interest income:Interest $ 170,402 $ 158,616 $ 172,295 $ 494,282 $ 508,277 incomeInterest 21,706 23,406 27,870 71,727 81,125 expenseNet interest 148,696 135,210 144,425 422,555 427,152 incomeProvision for credit losses: Loans 48,078 36,408 7,398 158,531 31,752

Unfunded ) 1,343 2,359 (412 )loan (803 - commitments Debt ) 1,263 2,404 securities (361 - -

46,914 39,014 7,398 163,294 31,340 Provision for credit lossesNet interestincome after 101,782 96,196 137,027 259,261 395,812 provision forcredit losses Non-interest income:Service charges on 5,848 4,475 6,108 16,280 17,711 depositaccountsMortgage 3,686 4,396 14,573 12,418 banking 7,099 activitiesNet (loss) (155 ) (497 ) 13,380 (497 )gain on 5,288 investmentsGain on early extinguishment 94 - - 94 - of debtOther 11,605 12,886 11,394 36,699 36,535 non-interest incomeTotal 29,934 20,892 21,401 81,026 66,167 non-interest income Non-interest expenses:Employees' 43,063 39,532 41,409 125,454 121,518 compensation and benefitsOccupancy and 19,064 16,376 15,129 50,567 47,018 equipmentBusiness 2,314 4,004 8,982 11,650 promotion 3,046

Professional 11,563 11,968 11,875 35,324 33,856 service feesTaxes, other 3,577 3,904 11,967 11,461 than income 4,510 taxesInsurance and 2,565 2,425 8,193 7,322 supervisory 3,019 feesNet loss on other real 1,019 811 2,578 3,018 11,364 estate ownedoperationsMerger and 10,441 2,902 592 14,188 restructuring 592 costsOther 11,783 9,741 10,917 31,785 31,373 non-interest expensesTotal 107,508 89,786 92,833 289,478 276,154 non-interest expenses Income before 24,208 27,302 65,595 50,809 185,825 income taxesIncome tax (6,046 ) (19,268 ) 1,326 (54,897 )benefit 4,405 (expense) Net income $ 28,613 $ 21,256 $ 46,327 $ 52,135 $ 130,928

Net incomeattributable $ 27,944 $ 20,587 $ 45,658 $ 50,128 $ 128,921 to commonstockholders Earnings per common share: Basic $ 0.13 $ 0.09 $ 0.21 $ 0.23 $ 0.60

Diluted $ 0.13 $ 0.09 $ 0.21 $ 0.23 $ 0.59

About First BanCorp.

First BanCorp. is the parent corporation of FirstBank Puerto Rico, a state-chartered commercial bank with operations in Puerto Rico, the U.S. and the British Virgin Islands and Florida, and of FirstBank Insurance Agency. Among the subsidiaries of FirstBank Puerto Rico are First Federal Finance Corp. and First Express, both small loan companies. First BanCorp's shares of common stock trade on the New York Stock Exchange under the symbol FBP. Additional information about First BanCorp. may be found at www.1firstbank.com.

EXHIBIT A

Table 1 - Selected Financial Data

(In thousands,except per shareamounts and Quarter Ended Nine-Month Period Endedfinancialratios) September 30, June 30, September 30, September 30, September 30, 2020 2020 2019 2020 2019

Condensed Income Statements: Total interest $ 170,402 $ 158,616 $ 172,295 $ 494,282 $ 508,277 income Total interest 21,706 23,406 27,870 71,727 81,125 expense Net interest 148,696 135,210 144,425 422,555 427,152 income Provision for 46,914 39,014 7,398 31,340 credit losses 163,294

Non-interest 29,934 20,892 21,401 81,026 66,167 income Non-interest 107,508 89,786 92,833 289,478 276,154 expenses Income before 24,208 27,302 65,595 50,809 185,825 income taxes Income tax ) ) ) expense 4,405 (6,046 (19,268 1,326 (54,897

Net income 28,613 21,256 46,327 52,135 130,928

Net income attributable 27,944 20,587 45,658 50,128 128,921 to common stockholders Per Common Share Results: Net earnings $ $ $ $ $ per share - 0.13 0.09 0.21 0.23 0.60 basic Net earnings $ $ $ $ $ per share - 0.13 0.09 0.21 0.23 0.59 diluted Cash dividends $ $ $ $ $ declared 0.05 0.05 0.03 0.15 0.09

Average shares 216,922 216,920 216,690 216,876 outstanding 216,569

Average shares 217,715 217,570 217,227 217,533 outstanding 217,053 diluted Book value per $ $ $ $ $ common share 10.03 9.99 9.96 10.03 9.96

Tangible book value per $ 9.67 $ 9.83 $ 9.79 $ 9.67 $ 9.79 common share (1) SelectedFinancial Ratios (In Percent): Profitability: Return on 0.72 0.63 0.50 Average Assets 1.47 1.41

Interest Rate Spread (2) 3.75 3.99 4.59 4.01 4.60

Net Interest Margin (2) 4.07 4.38 5.06 4.39 5.08

Return on Average Total 5.07 3.86 8.39 3.13 8.19 Equity Return on 5.03 3.80 3.06 Average Common 8.53 8.33 Equity Average Total Equity to 14.22 16.32 17.55 15.84 17.22 Average Total Assets 20.32 25.08 Total capital 25.27 20.32 25.27

Common equity 17.22 21.52 Tier 1 capital 21.61 17.22 21.61

17.53 21.90 Tier 1 capital 22.02 17.53 22.02

13.04 15.23 Leverage 16.04 13.04 16.04

Tangible 11.36 common equity 15.25 17.03 11.36 17.03 ratio (1) Dividend payout ratio 38.81 52.68 14.24 64.90 15.12

Efficiency 60.18 55.98 57.48 55.98 ratio (3) 57.52

Asset Quality: Allowance for credit losses on loans and 3.25 3.41 1.85 finance leases 3.25 1.85 to loans held for investment Net charge-offs 0.45 0.43 0.61 (annualized) 0.55 0.93 to average loans Provision for credit losses for loans and 421.70 368.31 53.48 finance leases 407.94 50.77 to net charge-offs (4) Non-performing 1.57 2.16 2.65 assets to 1.57 2.65 total assets Nonaccrual loans held for investment to 1.70 2.18 2.41 1.70 2.41 total loans held for investment Allowance for credit losses on loans and finance leases 191.13 156.54 76.57 191.13 76.57 to total nonaccrual loans held for investment Allowance for credit losses on loans and finance leases to total nonaccrual loans held for investment, excluding residential 490.13 390.70 185.65 490.13 185.65 real estate loans . Other Information: Common Stock $ $ $ $ $ Price: End of 5.22 5.59 9.98 5.22 9.98 period 1- Non-GAAP financial measure. See page 24 for GAAP to Non-GAAPreconciliations.2- On a tax-equivalent basis and excluding changes in the fair value ofderivative instruments (Non-GAAP financial measure). See page 28 for GAAP toNon-GAAP reconciliations and refer to discussions in Table 2 and 3 below.3- Non-interest expenses to the sum of net interest income and non-interestincome. The denominator includes non-recurring income and changes in the fairvalue of derivative instruments.4- The ratio of the provision for credit losses for loans and finance leases tonet charge-offs, excluding the hurricane-related qualitative reserve release was 61.05% for the nine-month period ended September 30, 2019. Table 2 - Quarterly Statement of Average Interest-Earning Assets and Average Interest-Bearing Liabilities (On a Tax-Equivalent Basis)

(Dollars in thousands) Average volume Interest income (1) / expense Average rate (1) September 30, June 30, September 30, September 30, June 30, September 30, September June September 30, 30, 30,Quarter ended 2020 2020 2019 2020 2020 2019 2020 2020 2019

Interest-earning assets:Money market & $ 1,450,669 $ 1,073,669 $ 762,934 $ 405 $ 283 $ 4,081 0.11 % 0.11 % 2.12 %other short-term investmentsGovernment 1,129,976 588,287 4,890 6,752 1.72 % 2.87 % 4.55 %obligations (2) 737,301 5,263

Mortgage-backed 2,253,121 1,295,189 11,525 12,340 9,820 2.03 % 2.78 % 3.01 %securities 1,787,611

31,635 41,779 441 660 5.55 % 6.22 % 6.27 %FHLB stock 31,684 490

Other 6,309 3,395 0.63 % 0.64 % 0.82 %investments 6,267 10 10 7

Total 4,871,710 2,691,584 17,271 18,386 21,320 1.41 % 2.03 % 3.14 %investments (3) 3,636,532

Residential 3,117,021 3,018,603 41,577 37,812 40,610 5.31 % 5.34 % 5.34 %mortgage loans 2,847,192

Construction 185,359 104,816 2,453 1,691 5.26 % 5.18 % 6.40 %loans 169,508 2,185

C&I and 4,468,614 3,748,186 51,902 46,755 55,543 4.62 % 4.77 % 5.88 %commercial 3,944,614 mortgage loans 447,854 378,866 8,349 7,192 7.42 % 7.26 % 7.53 %Finance leases 429,286 7,747

1,944,823 1,776,254 53,796 50,866 50,904 11.00 % 11.02 % 11.37 %Consumer loans 1,857,278

Total loans (4) 10,163,671 9,026,725 158,077 145,365 155,940 6.19 % 6.32 % 6.85 %(5) 9,247,878

Total $ 15,035,381 $ 12,884,410 $ 11,718,309 $ 175,348 $ 163,751 $ 177,260 4.64 % 5.11 % 6.00 %interest-earning assets Interest-bearing liabilities:Brokered CDs $ 332,429 $ 418,246 $ 502,569 $ 1,850 $ 2,270 $ 2,843 2.21 % 2.18 % 2.24 %

Other 8,412,342 6,290,767 14,238 14,727 17,498 0.67 % 0.85 % 1.10 %interest-bearing 6,987,301 deposits 0.00 % 0.25 % Loans payable - 29,451 - - 18 - -

Other borrowed 493,572 284,150 2,840 3,651 2.29 % 2.92 % 5.10 %funds 484,150 3,521

494,348 741,522 2,778 3,878 2.24 % 2.23 % 2.07 %FHLB advances 517,363 2,870

Total $ 9,732,691 $ 8,436,511 $ 7,819,008 $ 21,706 $ 23,406 $ 27,870 0.89 % 1.12 % 1.41 %interest-bearing liabilities Net interest $ 153,642 $ 140,345 $ 149,390 incomeInterest rate 3.75 % 3.99 % 4.59 %spreadNet interest 4.07 % 4.38 % 5.06 %margin 1- On a tax-equivalent basis. The tax-equivalent yield was estimated bydividing the interest rate spread on exempt assets by 1 less the Puerto Ricostatutory tax rate of 37.5% and adding to it the cost of interest-bearingliabilities. When adjusted to a tax-equivalent basis, yields on taxable andexempt assets are comparable. Changes in the fair value of derivativeinstruments are excluded from interest income because the changes in valuationdo not affect interest paid or received. See page 28 for GAAP to Non-GAAPreconciliations. 2- Government obligations include debt issued by government-sponsoredagencies. 3- Unrealized gains and losses on available-for-sale securities are excludedfrom the average volumes.4- Average loan balances include the average of non-performing loans. 5- Interest income on loans includes $1.5 million, $0.9 million and $2.4million for the quarters ended September 30, 2020, June 30, 2020, and September30, 2019, respectively, of income from prepayment penalties and late feesrelated to the Corporation's loan portfolio. Table 3 - Year-to-Date Statement of Average Interest-Earning Assets and Average Interest-Bearing Liabilities (On a Tax-Equivalent Basis)

(Dollars in thousands) Average volume Interest income (1) / expense Average rate (1) September 30, September 30, September 30, September 30, September September 30, 30,Nine-Month Period 2020 2019 2020 2019 2020 2019Ended Interest-earning assets:Money market & $ 1,099,634 $ 615,499 $ 2,950 $ 10,350 0.36 % 2.25 %other short-term investmentsGovernment 690,566 15,454 21,482 2.63 % 4.16 %obligations (2) 784,348

Mortgage-backed 1,304,777 37,874 32,033 2.61 % 3.28 %securities 1,937,083

41,809 1,527 2,013 6.33 % 6.44 %FHLB stock 32,234

3,169 0.68 % 0.84 %Other investments 6,082 31 20

Total investments 2,655,820 57,836 65,898 2.00 % 3.32 %(3) 3,859,381

Residential 3,071,624 118,044 123,779 5.34 % 5.39 %mortgage loans 2,952,278

94,075 6,519 4,531 5.47 % 6.44 %Construction loans 159,092

C&I and commercial 3,760,878 146,629 163,518 4.86 % 5.81 %mortgage loans 4,032,497

360,429 24,015 20,313 7.41 % 7.54 %Finance leases 433,014

1,705,150 156,972 145,459 11.06 % 11.41 %Consumer loans 1,895,308

8,992,156 452,179 457,600 6.38 % 6.80 %Total loans (4) (5) 9,472,189

Total $ 13,331,570 $ 11,647,976 $ 510,015 $ 523,498 5.11 % 6.01 %interest-earning assets Interest-bearing liabilities:Brokered CDs $ 393,038 $ 511,567 $ 6,572 $ 8,312 2.23 % 2.17 %

Other 6,166,594 46,167 48,624 0.84 % 1.05 %interest-bearing 7,330,643 deposits 0.25 % Loans payable 11,241 - 21 - -

Other borrowed 298,277 10,311 12,699 2.91 % 5.69 %funds 472,715

740,513 8,656 11,490 2.21 % 2.07 %FHLB advances 522,172

Total $ 8,729,809 $ 7,716,951 $ 71,727 $ 81,125 1.10 % 1.41 %interest-bearing liabilities Net interest income $ 438,288 $ 442,373

Interest rate 4.01 % 4.60 %spreadNet interest margin 4.39 % 5.08 %

1- On a tax-equivalent basis. The tax-equivalent yield was estimated bydividing the interest rate spread on exempt assets by 1 less the Puerto Ricostatutory tax rate of 37.5% and adding to it the cost of interest-bearingliabilities. When adjusted to a tax-equivalent basis, yields on taxable andexempt assets are comparable. Changes in the fair value of derivativeinstruments are excluded from interest income because the changes in valuationdo not affect interest paid or received. See page 28 for GAAP to Non-GAAPreconciliation. 2- Government obligations include debt issued by government-sponsoredagencies. 3- Unrealized gains and losses on available-for-sale securities are excludedfrom the average volumes. 4- Average loan balances include the average of non-performing loans. 5- Interest income on loans includes $4.6 million and $6.7 million for thenine-month periods ended September 30, 2020 and 2019, respectively, of incomefrom prepayment penalties and late fees related to the Corporation's loanportfolio. Table 4 - Non-Interest Income

Quarter Ended Nine-Month Period Ended September 30, June 30, September 30, September 30, September 30,(In thousands) 2020 2020 2019 2020 2019

Service charges on $ 5,848 $ 4,475 $ 6,108 $ 16,280 $ 17,711 deposit accounts Mortgage 7,099 3,686 4,396 14,573 12,418 banking activities Insurance 1,473 1,381 1,983 7,436 8,258 income Other 10,132 11,505 9,411 29,263 28,277 operating income Non-interest income before net gain on sales of 24,552 21,047 21,898 67,552 66,664 investments and gain on early extinguishment of debt Net gain (loss) on 5,288 (155 ) - 13,380 - sales of investments OTTI on debt (497 ) (497 ) securities - - -

Net gain 5,288 (155 ) (497 ) 13,380 (497 ) (loss) on investments Gain on early extinguishment 94 - - 94 - of debt $ 29,934 $ 20,892 $ 21,401 $ 81,026 $ 66,167

Table 5 - Non-Interest Expenses

Quarter Ended Nine-Month Period Ended September 30, June 30, September 30, September 30, September 30,(In thousands) 2020 2020 2019 2020 2019

Employees' $ $ $ 41,409 $ 125,454 $ 121,518 compensation 43,063 39,532 and benefits Occupancy and 16,376 15,129 50,567 47,018 equipment 19,064

Deposit 4,588 4,645 insurance 1,630 1,436 1,465 premium Other insurance and 1,389 1,129 960 3,605 2,677 supervisory fees Taxes, other 3,577 3,904 11,967 11,461 than income 4,510 taxes Collections, appraisals and 1,262 1,387 1,797 4,345 5,460 other credit related fees Outsourcing 6,206 technology 6,949 7,672 21,450 17,524 services Other 3,872 professional 3,352 2,909 9,529 10,872 fees Credit and debit card 4,859 3,938 4,764 12,747 12,738 processing expenses Business 2,314 4,004 8,982 11,650 promotion 3,046

1,852 1,834 5,975 5,300 Communications 2,246

Net loss on 811 2,578 3,018 11,364 OREO 1,019 operations Merger and restructuring 10,441 2,902 592 14,188 592 costs Other 4,678 3,951 4,319 13,063 13,335

$ 107,508 $ $ 92,833 $ 289,478 $ 276,154 Total 89,786

Table 6 - Selected Balance Sheet Data

(In thousands) As of September 30, June 30, December 31, 2020 2020 2019

Balance Sheet Data: Loans, including loans $ $ $ 9,041,682 held for sale 11,895,945 9,405,202

Allowance for credit 384,718 319,297 155,139 losses for loans and finance leases Money market and investment securities, 3,621,902 2,986,390 2,398,157 net of allowance for credit losses for debt securities Intangible assets 78,294 34,246 35,671

Deferred tax asset, net 347,543 306,175 264,842

Total assets 18,659,768 14,096,406 12,611,266

Deposits 15,202,898 10,696,686 9,348,429

Borrowings 973,762 974,150 854,150

Total preferred equity 36,104 36,104 36,104

Total common equity 2,143,851 2,125,460 2,185,205

Accumulated other 45,327 53,270 comprehensive income, 6,764 net of tax Total equity 2,225,282 2,214,834 2,228,073

Table 7 - Loan Portfolio

Composition of the loan portfolio including loans held for sale at period-end.

(In thousands) As of September 30, June 30, December 31, 2020 2020 2019

Residential $ $ $ mortgage loans 3,636,713 2,890,301 2,933,773

Commercial loans: Construction 191,356 177,777 111,317 loans Commercial 2,220,277 1,455,083 1,444,586 mortgage loans Commercial and 3,226,843 2,547,812 2,230,876 Industrial loans Commercial 5,638,476 4,180,672 3,786,779loans Finance leases 458,381 438,851 414,532

Consumer loans 2,113,705 1,856,392 1,867,121

Loans held for 11,847,275 9,366,216 9,002,205 investmentLoans held for sale 48,670 38,986 39,477

$ 11,895,945 $ $ Total loans 9,405,202 9,041,682

Table 8 - Loan Portfolio by Geography

(In thousands) As of September 30, 2020 Puerto Rico Virgin Islands United States Consolidated Residential $ $ 218,826 $ 536,354 $ mortgage loans 2,881,533 3,636,713

Commercial loans: Construction 11,451 121,350 loans 58,555 191,356

Commercial 61,633 385,996 mortgage 1,772,648 2,220,277 loans Commercial and 2,154,786 132,809 939,248 3,226,843 Industrial loans 205,893 1,446,594 Commercial loans 3,985,989 5,638,476

Finance leases 458,381 - - 458,381

51,158 30,126 Consumer loans 2,032,421 2,113,705

Loans held for 475,877 2,013,074 investment 9,358,324 11,847,275

Loans held 39,958 - 8,712 48,670forsale Total loans $ 9,398,282 $ 475,877 $ 2,021,786 $ 11,895,945

(In thousands) As of June 30, 2020 Puerto Rico Virgin Islands United States Consolidated Residential $ $ 222,581 $ 550,012 $ mortgage loans 2,117,708 2,890,301

Commercial loans: Construction 11,512 114,971 loans 51,294 177,777

Commercial 62,600 370,298 mortgage 1,022,185 1,455,083 loans Commercial and 1,475,110 131,419 941,283 2,547,812 Industrial loans 205,531 1,426,552 Commercial loans 2,548,589 4,180,672

Finance leases 438,851 - - 438,851

51,163 33,570 Consumer loans 1,771,659 1,856,392

Loans held for 479,275 2,010,134 investment 6,876,807 9,366,216

Loans held 30,525 - 8,461 38,986forsale $ 6,907,332 $ 479,275 $ 2,018,595 $ Total loans 9,405,202

(In thousands) As of December 31, 2019 Puerto Rico Virgin Islands United States Consolidated Residential $ $ 230,769 $ 566,186 $ mortgage loans 2,136,818 2,933,773

Commercial loans: Construction 12,144 63,071 loans 36,102 111,317

Commercial 67,377 364,686 mortgage 1,012,523 1,444,586 loans Commercial and 1,285,594 105,819 839,463 2,230,876 Industrial loans 185,340 1,267,220 Commercial loans 2,334,219 3,786,779

Finance leases 414,532 - - 414,532

49,924 40,522 Consumer loans 1,776,675 1,867,121

Loans held for 466,033 1,873,928 investment 6,662,244 9,002,205

Loans held for 350 5,418 sale 33,709 39,477

$ 6,695,953 $ 466,383 $ 1,879,346 $ Total loans 9,041,682

Table 9 - Non-Performing Assets

As of(Dollars in September 30, June 30, December 31,thousands) 2020 2020 2019

Nonaccrual loansheld for investment: Residential $ 122,797 $ 122,249 $ 121,408 mortgage Commercial mortgage 29,651 34,109 40,076

Commercial and Industrial 20,882 19,995 18,773

Construction 13,090 9,574 9,782

Consumer and Finance leases 14,870 18,047 20,629

Total nonaccrual 201,290 203,974 210,668 loans held for investment 101,626 OREO 89,049 96,319

Other repossessed property 3,006 3,554 5,115

Total non-performing assets, $ 293,345 $ 303,847 $ 317,409 excluding nonaccrual loans held for sale Nonaccrual loans held for sale - - -

Total non-performing assets, $ 293,345 $ 303,847 $ 317,409 including nonaccrual loans held for sale (1) Past-due loans 90 $ 160,066 $ 164,519 $ 135,490 days and still accruing (2) Allowance for $ 384,718 $ 319,297 $ 155,139 credit losses on loansAllowance forcredit losses onloans to total 191.13 % 156.54 % 73.64 %nonaccrual loansheld forinvestment Allowance forcredit losses onloans to totalnonaccrual loans 490.13 % 390.70 % 173.81 %held for investment,excludingresidential realestate loans (1) Excludes purchased-credit deteriorated ("PCD") loans previously accountedfor under Accounting Standards Codification ("ASC") 310-30 for which theCorporation made the accounting policy election of maintaining pools of loansaccounted for under ASC 310-30 as "units of account" both at the time ofadoption of ASC 326 and on an ongoing basis for credit loss measurement. Theseloans accrete interest income based on the effective interest rate of the loanpools determined at the time of adoption of ASC 326 and will continue to beexcluded from nonaccrual loan statistics as long as the Corporation canreasonably estimate the timing and amount of cash flows expected to becollected on the loan pools. The amortized cost of such loans as of September30, 2020, June 30, 2020, and December 31, 2019 amounted to $133.2 million,$134.4 million, and $136.7 million, respectively. (2) These include loans rebooked, which were previously pooled into GNMAsecurities amounting to $17.7 million (June 30, 2020 - $69.9 million; December31, 2019 - $35.3 million). Under the GNMA program, the Corporation has theoption but not the obligation to repurchase loans that meet GNMA's specifieddelinquency criteria. For accounting purposes, these loans subject to therepurchase option are required to be reflected on the financial statements withan offsetting liability. During the third quarter of 2020, the Corporationrepurchased, pursuant to the aforementioned repurchase option, $52.0 millionof loans previously sold to GNMA. Table 10 - Non-Performing Assets by Geography

As of (In thousands) September 30, June 30, December 31, 2020 2020 2019

Puerto Rico: Nonaccrual loansheld for investment: Residential $ 98,473 $ 97,715 $ 97,214 mortgage Commercial 18,291 22,354 23,963 mortgage Commercial and 18,464 18,283 16,155 Industrial Construction 5,430 1,910 2,024

1,521 1,354 Finance leases 879

Consumer 13,290 15,480 18,129

Total nonaccrual 154,827 157,263 158,839 loans held for investment OREO 83,712 90,688 96,585

Other 2,790 3,404 4,810repossessed property Total non-performing assets, $ 241,329 $ 251,355 $ 260,234 excluding nonaccrual loans held for saleNonaccrual loans held for sale - - -

Total non-performing assets, $ 241,329 $ 251,355 $ 260,234 including nonaccrual loans held for sale (1)Past-due loans90 days and $ 157,829 $ 161,959 $ 129,463still accruing(2) Virgin Islands: Nonaccrual loansheld for investment: Residential $ 9,824 $ 10,295 $ 10,903 mortgage Commercial 11,360 11,755 16,113 mortgage Commercial and 1,425 1,443 2,303 Industrial Construction 7,660 7,664 7,758

Consumer 229 204 467

Total nonaccrual 30,498 31,361 37,544 loans held for investment OREO 5,273 5,420 4,909

Other repossessed 143 119 146property Total non-performing assets, $ 35,914 $ 36,900 $ 42,599 excluding nonaccrual loans held for saleNonaccrual loans held for sale - - -

Total non-performing assets, $ 35,914 $ 36,900 $ 42,599 including nonaccrual loans held for salePast-due loans $ 1,986 $ 2,310 $ 5,89890 days and still accruing United States: Nonaccrual loansheld for investment: Residential $ 14,500 $ 14,239 $ 13,291 mortgage Commercial mortgage - - -

Commercial and Industrial 993 269 315

Construction - - -

Consumer 472 842 679

Total nonaccrual 15,965 15,350 14,285 loans held for investment OREO 64 211 132

Other repossessed 73 31 159property Total non-performing assets, $ 16,102 $ 15,592 $ 14,576 excluding nonaccrual loans held for saleNonaccrual loans held for sale - - -

Total non-performing assets, $ 16,102 $ 15,592 $ 14,576 including nonaccrual loans held for salePast-due loans $ 251 $ 250 $ 12990 days and still accruing (1) Excludes purchased-credit deteriorated ("PCD") loans previously accountedfor under Accounting Standards Codification ("ASC") 310-30 for which theCorporation made the accounting policy election of maintaining pools of loansaccounted for under ASC 310-30 as "units of account" both at the time ofadoption of ASC 326 and on an ongoing basis for credit loss measurement. Theseloans accrete interest income based on the effective interest rate of the loanpools determined at the time of adoption of ASC 326 and will continue to beexcluded from nonaccrual loan statistics as long as the Corporation canreasonably estimate the timing and amount of cash flows expected to becollected on the loan pools. The amortized cost of such loans as of September30, 2020, June 30, 2020, and December 31, 2019 amounted to $133.2 million,$134.4 million, and $136.7 million, respectively.(2) These include loans rebooked, which were previously pooled into GNMAsecurities amounting to $17.7 million (June 30, 2020 - $69.9 million; December31, 2019 - $35.3 million). Under the GNMA program, the Corporation has theoption but not the obligation to repurchase loans that meet GNMA's specifieddelinquency criteria. For accounting purposes, these loans subject to the repurchase option are required to be reflected on the financial statements withan offsetting liability. During the third quarter of 2020, the Corporationrepurchased, pursuant to the aforementioned repurchase option, $52.0 millionof loans previously sold to GNMA. Table 11 - Allowance for Credit Losses for Loans and Finance Leases

Quarter Ended Nine-Month Period Ended (Dollars in September 30, June 30, September 30, September 30, September 30, thousands) 2020 2020 2019 2020 2019

Allowance forcredit losses on $ 319,297 $ 292,774 $ 172,011 $ 155,139 $ 196,362 loans and finance leases, beginningbalance Impact of - 81,165 adopting ASC 326 - - -

Allowance forcredit losses onloans and finance 319,297 292,774 172,011 236,304 196,362 leases, beginningbalance afterCECL adoptionProvision forcredit losses on 48,078 36,408 7,398 158,531 31,752 (1 )loans and financeleasesInitial allowance 28,744 - 28,744 on PCD loans - -

Net (charge-offs)recoveries of loans: Residential (2,283 ) (1,794 ) (4,414 ) (7,856 ) (14,149 ) mortgage Commercial (3,104 ) 25 (717 ) (3,163 ) (14,587 ) mortgage Commercial and ) 1,439 (75 ) (3,860 ) Industrial (70 5

(54 ) Construction 36 211 6 282

Consumer and (5,980 ) (8,067 ) (10,353 ) (27,773 ) (30,225 ) finance leasesNet charge-offs (11,401 ) (9,885 ) (13,834 ) (38,861 ) (62,539 )

Allowance forcredit losses on $ 384,718 $ 319,297 $ 165,575 $ 384,718 $ 165,575 loans and finance leases, end ofperiod Allowance forcredit losses onloans and finance 3.25 % 3.41 % 1.85 % 3.25 % 1.85 %leases to period end total loansheld forinvestment Net charge-offs(annualized) to 0.45 % 0.43 % 0.61 % 0.55 % 0.93 %average loans outstandingduring the periodProvision forcredit losses onloans and finance 4.22x 3.68x 0.53x 4.08x 0.51xleases to netcharge-offsduring the periodProvision forcredit losses onloans and financeleases to netcharge-offsduring theperiod, excluding 4.22x 3.68x 0.53x 4.08x 0.61xeffect of thehurricane-relatedqualitativereserve releasesinthe first ninemonths of 2019 (1) Net of a $6.4 million net credit loss reserve release on loans associatedwith the effect of Hurricanes Irma and Maria. Table 12 - Net Charge-Offs to Average Loans

Nine-Month Period Ended Year Ended September December December December December 30, 2020 31, 31, 31, 31, (annualized) 2019 2018 2017 2016

Residential 0.35% 0.66% 0.67% 0.79% 0.93%mortgage Commercial 0.27% 0.97% 1.03% 2.42% 1.28%mortgage Commercial and 0.00% 0.16% 0.38% 0.66% 1.11%Industrial Construction -0.01% -0.28% 6.75% 2.05% 1.02%

Consumer and 1.59% 2.05% 2.31% 2.12% 2.63%finance leases Total loans 0.55% 0.91% 1.09% 1.33% 1.37%

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CONTACT: First BanCorp. John B. Pelling III Investor Relations Officer john.pelling@firstbankpr.com (787) 729-8003