Intelgenx Technologies Corp
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Health Care : Pharmaceuticals | Small Cap Growth
Based in Canada
Company profile

IntelGenx Technologies Corp is a Canada-based drug delivery company focused on the development of oral immediate-release and controlled-release products and on developing pharmaceutical products based on its drug delivery technologies. Its product development efforts are based upon over three delivery platform technologies, such as VersaFilm, an oral film technology; VersaTab, a multilayer tablet technology, and AdVersa, a mucoadhesive tablet technology. The VersaFilm technology consists of a thin (25 to 35 micron) polymeric film consisting of the United States Pharmacopeia (USP) components for use in food, pharmaceutical and cosmetic products. Its Multilayer Tablet platform technology allows for the development of oral controlled-release products. Its product portfolio includes INT0001/2004, INT0004/2006, INT0007/2006, INT0008/2007, INT0010/2006, INT0027/2011, INT0030/2011, INT0036/2013, INT0037/2013, INT0039/2013, INT0040/2014, INT0041/2015, INT0042/2015 and INT0043/2015.

Closing Price
$0.46
Day's Change
0.0196 (4.45%)
Bid
--
Ask
--
B/A Size
--
Day's High
0.50
Day's Low
0.431
Volume
(Above Average)
Volume:
378,286

10-day average volume:
355,223
378,286

First BanCorp. Announces Earnings for the Quarter and Year Ended December 31, 2020

7:00 am ET January 29, 2021 (BusinessWire) Print

--- Provision for credit losses on loans, finance leases and debt securities of $7.7 million for the fourth quarter of 2020, compared to a provision of $46.9 million for the third quarter of 2020. Approximately $38.9 million ($25.9 million after-tax, or a decrease of $0.12 per diluted share) of the provision for the third quarter was a result of the Day 1 reserves required by the current expected credit losses ("CECL") methodology for non-purchased credit deteriorated ("non-PCD") acquired loans in conjunction with the acquisition of BSPR.

--- Tax-exempt gain of $5.3 million on the sales of investment securities in the third quarter of 2020, or $0.02 per diluted share.

--- Income tax benefit of $8.0 million in the third quarter of 2020, or $0.04 per diluted share, resulting from a partial reversal of the deferred tax asset valuation allowance.

--- Non-performing assets ("NPAs") increased by $0.2 million to $293.5 million as of December 31, 2020, compared to $293.3 million as of September 30, 2020. The increase was driven by a $2.6 million increase in nonaccrual residential mortgage loans, a $1.4 million increase in nonaccrual consumer loans, and a $2.4 million increase in non-real estate repossessed assets. These variances were partially offset by a $6.0 million decrease in the other real estate owned ("OREO") portfolio balance, driven by sales of residential properties.

--- An annualized net charge-offs to average loans ratio of 0.30% for the fourth quarter of 2020, compared to 0.45% for the third quarter of 2020. The decrease reflects, among other things, the effect of loan loss recoveries on certain commercial loans that were paid off and a decrease in residential mortgage loan net charge-offs.

First BanCorp. (the "Corporation") (NYSE: FBP), the bank holding company for FirstBank Puerto Rico ("FirstBank" or "the Bank"), today reported net income of $50.1 million, or $0.23 per diluted share, for the fourth quarter of 2020, compared to $28.6 million, or $0.13 per diluted share, for the third quarter of 2020, and $36.4 million, or $0.16 per diluted share, for the fourth quarter of 2019. Financial results for the fourth quarter of 2020 reflected the effect of the acquisition of BSPR completed on September 1, 2020 for an entire quarter and included merger and restructuring costs of $12.3 million ($7.7 million after-tax, or a decrease of $0.04 per diluted share) in connection with the BSPR acquisition integration process. Financial results for the third quarter of 2020 included a charge to the provision for credit losses of $38.9 million ($25.9 million after-tax, or a decrease of $0.12 per diluted share) related to the initial establishment of the Day 1 reserves required by CECL in connection with non-PCD acquired loans in conjunction with the BSPR acquisition, merger and restructuring related costs of $10.4 million ($6.5 million after-tax, or a decrease of $0.03 per diluted share) in connection with the closing of the BSPR acquisition, 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 a tax-exempt gain from sales of investment securities of $5.3 million, or $0.02 per diluted share.

For the year ended December 31, 2020, the Corporation reported net income of $102.3 million, or $0.46 per diluted share, compared to $167.4 million, or $0.76 per diluted share, for the year ended December 31, 2019, primarily reflecting the effect of the increase in credit loss reserves due to the adverse impact of the COVID-19 pandemic on the economic forecast utilized by the Corporation in its CECL model, in particular during the first half of 2020, and the initial establishment of the Day 1 reserves required by the CECL methodology in connection with the closing of the BSPR acquisition in the third quarter of 2020. Adjusted pre-tax, pre-provision income increased by 6% to $299.8 million in 2020 as compared to the prior year. In addition, total NPAs decreased by $23.9 million, or 7.5%, to $293.5 million as of December 31, 2020 as compared to total NPAs as of December 31, 2019.

Aurelio Aleman, President and Chief Executive Officer of First BanCorp., commented: "We are very pleased with our operational and strategic results for the year 2020. I am proud of what our team has accomplished despite the many challenges posed by the global pandemic. It was a transformational year for our Company. The acquisition of Banco Santander Puerto Rico, completed on September 1st, 2020, has expanded our market share and solidified our market position in Puerto Rico. The results of the fourth quarter reflect the first full quarter of operation of the combined franchise. We are diligently working on the integration, which is progressing as planned, and is expected to be completed by the end of summer.

For the year, we generated $102 million of net income, or $0.46 per share, compared to $167 million, or $0.76 per share, in 2019, despite the higher provisioning for expected credit losses resulting from the pandemic impacts on economic activity, as well as Day 1 reserves required by CECL for the acquired loan portfolio. Pre-tax, pre-provision income for the year increased 6% to $300 million with only four months of our combined Company. Total loan originations and renewals for the year reached $4.4 billion, and organic core deposits, which excludes brokered deposits, grew a record of $2.0 billion; the acquisition contributed an additional $4.1 billion in core deposits. Even more important, we supported our communities through economic challenges by providing extensive moratoriums programs to our borrowers and generating over $450 million of SBA PPP loans. Our clients' adoption of digital channels during 2020 is driving our technological transformation with login activity up over 33% and digital transactions increasing over 55% for the year. Technology infrastructure projects initiated this year will drive future efficiencies and support our growing customer base. With over 30% growth in our customer base, to now approximately 675,000 banking customers, our enhanced market penetration should drive profitability as we progress on the integration and rationalization of our expense base.

We generated net income of $50 million for the fourth quarter, or $0.23 per share, compared to $29 million in the third quarter. Loan origination activity was robust this quarter at $1.4 billion, with growth in commercial and consumer portfolios. Our $11.8 billion loan portfolio declined slightly from the prior quarter due to continued strategic reductions in residential mortgage lending and a $49 million decrease resulting from SBA PPP loan forgiveness. With ample liquidity in our market, we are diligently working toward increasing loan generation. This is important for our franchise as our deposits, net of government and brokered, continue to grow at a strong pace, up $257 million to $12.8 billion. Asset quality ratios remain stable, and we continue to closely monitor the credit trends of our borrowers impacted by a prolonged shutdown.

An improving geopolitical environment in Puerto Rico and economic measures stemming from additional stimulus and disaster relief funding should provide additional support to those impacted by the pandemic. Our fortress balance sheet, with liquidity, reserve coverage, and capital ratios above peers, will continue to support loan growth initiatives and capital deployment strategies. I am proud and grateful for what we have accomplished and the obstacles we have overcome during 2020, and we look to the future with great optimism."

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.

SPECIAL ITEMS

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

Quarter ended December 31, 2020

- Merger and restructuring costs of $12.3 million ($7.7 million after-tax) in connection with the BSPR acquisition integration process and related restructuring initiatives. Merger and restructuring costs in the fourth quarter included a $4.3 million charge associated with an Employee Voluntary Separation Program ("VSP") offered to eligible employees in the Puerto Rico region. Approximately 100 employees participated in the program. To allow for a transition period, the effective separation date for eligible employees is the period between the end of November 2020 until the end of June 2021. The estimated total cost of the VSP is approximately $9.2 million; thus, the Corporation anticipates additional charges of approximately $3.2 million in the first quarter of 2021 and $1.7 million in the second quarter of 2021. In addition to the charge associated with the VSP, merger and restructuring costs in the fourth quarter of 2020 primarily included bonuses, consulting fees, and expenses related to system conversions and other integration related efforts.

- Costs of $1.1 million ($0.7 million after-tax) related to the COVID-19 pandemic response efforts, primarily costs related to additional cleaning, safety materials, and security matters.

- Loss of $0.2 million realized on sales of available-for-sale investment securities. The loss realized at the tax-exempt international banking entity subsidiary level had no effect on the income tax expense recorded in the fourth quarter of 2020.

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.

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

- An aggregate gain of $5.3 million 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 on 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 December 31, 2019

- Merger and restructuring costs of $10.9 million ($6.8 million after-tax) in connection with the BSPR acquisition and related restructuring initiatives. Merger and restructuring costs in the fourth quarter of 2019 primarily included advisory, legal, valuation, and other professional service fees associated with the then pending acquisition of BSPR, as well as a $3.4 million charge related to a VSP offered to eligible employees of FirstBank in connection with initiatives to capitalize on expected operational efficiencies from the acquisition.

- A $0.7 million ($0.5 million after-tax) benefit resulting from hurricane-related insurance recoveries related to repairs and maintenance costs incurred on facilities in the Virgin Islands region.

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

Net income was $50.1 million for the fourth quarter of 2020, compared to $28.6 million for the third quarter of 2020. Adjusted net income was $58.7 million, or $0.27 per diluted share, for the fourth quarter of 2020, compared to $22.4 million, or $0.10 per diluted share, for the third quarter of 2020. The following table reconciles for the fourth and third quarters of 2020 and the fourth 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                      Quarter Ended                       Quarter Ended                      Quarter Ended        Quarter Ended                       Quarter Ended
(In thousands, except per share information)                         December 31, 2020                   December 31, 2020                 September 30, 2020                  September 30, 2020                  December 31, 2019    December 31, 2019                   December 31, 2019
                                                                   -------------------- ---------------------------------------------------------------------- ---------------------------------------------------------------------- -------------------- --------------------------------------------------
                                                                                                                       
Net income, as reported (GAAP)                                                        $                    $  50,138                      $                    $  28,613                      $                    $                    $  36,449  
Adjustments:
   Merger and restructuring costs                                       12,321        10,441          10,850  
   Partial reversal of deferred tax asset valuation allowance                -        (8,000 )                                -  
   Benefit from hurricane-related insurance recoveries                       -             -            (727 )
   Loss (gain) on sales of investment securities                           182        (5,288 )                                -  
   Gain on early extinguishment of debt                                      -           (94 )                                -  
   COVID-19 pandemic-related expenses                                    1,125           962               -  
   Income tax impact of adjustments (1)                                 (5,042 )                         (4,276 )                           (3,796 )
                                                                   -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
Adjusted net income (Non-GAAP)                                                        $                    $  58,724                      $                    $  22,358                      $                    $                    $  42,776  
   Preferred stock dividends                                              (669 )                           (669 )                             (669 )
                                                                   -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
Adjusted net income attributable to common stockholders (Non-GAAP)                    $                    $  58,055                      $                    $  21,689                      $                    $                    $  42,107  
                                                                   ==================== ==================== ======= ==================== ==================== ==================== ======= ==================== ==================== ==================== ==================== ======= ====================
                                                                                                                       
Weighted-average diluted shares outstanding                                           $                    $ 218,071       217,715                      $                    $                    $ 217,379  
                                                                   -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
                                                                                                                       
Earnings Per Share - diluted (GAAP)                                                   $                    $    0.23                      $                    $    0.13                      $                    $                    $    0.16  
                                                                   ==================== ==================== ======= ==================== ==================== ==================== ======= ==================== ==================== ==================== ==================== ======= ====================
                                                                                                                       
Adjusted Earnings Per Share - diluted (Non-GAAP)                                      $                    $    0.27                      $                    $    0.10                      $                    $                    $    0.19  
                                                                   ==================== ==================== ======= ==================== ==================== ==================== ======= ==================== ==================== ==================== ==================== ======= ====================
                                                                                                                       
------------------------------------------------------------------

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

Income before income taxes was $65.5 million for the fourth quarter of 2020, compared to $24.2 million for the third quarter of 2020. Adjusted pre-tax, pre-provision income was $86.8 million for the fourth quarter of 2020, up $9.7 million from the third quarter of 2020 mainly related to the effect of the BSPR acquisition for an entire quarter. 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                                                                                                                                                                  Quarter Ended
                                                            -------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                        December 31,                            December 31,                       December 31,                       September 30,                      September 30,                        June 30,                           June 30,                           March 31,                          March 31,                        December 31,                       December 31,
                            2020                                    2020                               2020                               2020                               2020                               2020                               2020                               2020                               2020                               2019                               2019
----------------------------------------------------------- -------------------- ----------------------------------------------   -------------------- ----------------------------------------------   -------------------- ----------------------------------------------   -------------------- ----------------------------------------------   -------------------- ----------------------------------------------
                                                                                                                                                                            
Income (loss) before income taxes                                              $                    $ 65,514                      $                    $ 24,208                      $                    $ 27,302                      $                    $   (701                    )                    $                    $ 53,547  
Add: Provision for credit losses                                 7,691       46,914       39,014       77,366        8,473  
Add/Less: Net loss (gain) on sales of investment securities        182       (5,288 )                           155       (8,247 )                             -  
Less: Benefit from hurricane-related insurance recoveries            -            -       (5,000 )                        (1,153 )                          (727 )
Less: Gain on early extinguishment of debt                           -          (94 )                             -            -            -  
Add: COVID-19 pandemic-related expenses                          1,125          962        2,961          363            -  
Add: Merger and restructuring costs                             12,321       10,441        2,902          845       10,850  
                                                            -------------------- -------------------- ------ -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- ------ --------------------
   Adjusted pre-tax, pre-provision income (1)                                  $                    $ 86,833                      $                    $ 77,143                      $                    $ 67,334                      $                    $ 68,473                      $                    $ 72,143  
                                                            ==================== ==================== ====== ==================== ==================== ==================== ====== ==================== ==================== ==================== ====== ==================== ==================== ==================== ====== ==================== ==================== ==================== ====== ====================
                                                                                                                                                                            
Change from most recent prior quarter (amount)                                 $                    $  9,690                      $                    $  9,809                      $                    $ (1,139 )                                       $                    $ (3,670 )                                       $                    $  1,393  
Change from most recent prior quarter (percentage)                12.6                    %       14.6                    %       -1.7                    %       -5.1                    %        2.0                    %
                                                                                                                                                                            

NET INTEREST INCOME

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

(Dollars in thousands)                                                                Quarter Ended                                                                                                                                                                            Quarter Ended
                                                                                  -------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                 December 31, 2020                                  December 31, 2020                    December 31, 2020                   September 30, 2020                   September 30, 2020                      June 30, 2020                        June 30, 2020                       March 31, 2020                       March 31, 2020                      December 31, 2019                    December 31, 2019
--------------------------------------------------------------------------------- -------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- -----------------------------------------------------
Net Interest Income
Interest income                                                                                      $                    $    198,700                      $                    $    170,402                      $                    $    158,616                      $                    $    165,264                      $                    $    167,620  
Interest expense                                                                          20,933           21,706           23,406           26,615           27,691  
                                                                                  -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                  
Net interest income                                                                                  $                    $    177,767                      $                    $    148,696                      $                    $    135,210                      $                    $    138,649                      $                    $    139,929  
                                                                                  ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ====================
                                                                                                                                                                                                                                  
Average Balances
Loans and leases                                                                                     $                    $ 11,843,157                      $                    $ 10,163,671                      $                    $  9,247,878                      $                    $  8,997,418                      $                    $  8,952,209  
Total securities, other short-term investments and interest-bearing cash balances      6,057,360        4,871,710        3,636,532        3,055,546        2,865,530  
                                                                                  -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
Average interest-earning assets                                                                      $                    $ 17,900,517                      $                    $ 15,035,381                      $                    $ 12,884,410                      $                    $ 12,052,964                      $                    $ 11,817,739  
                                                                                  -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                  
Average interest-bearing liabilities                                                                 $                    $ 11,704,166                      $                    $  9,732,691                      $                    $  8,436,511                      $                    $  8,099,199                      $                    $  7,845,104  
                                                                                  -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                  
Average Yield/Rate
Average yield on interest-earning assets - GAAP                                             4.42                    %           4.51                    %           4.95                    %           5.51                    %           5.63                    %
Average rate on interest-bearing liabilities - GAAP                                         0.71                    %           0.89                    %           1.12                    %           1.34                    %           1.40                    %
                                                                                  -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
Net interest spread - GAAP                                                                  3.71                    %           3.62                    %           3.83                    %           4.17                    %           4.23                    %
                                                                                  ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ====================
Net interest margin - GAAP                                                                  3.95                    %           3.93                    %           4.22                    %           4.63                    %           4.70                    %
                                                                                  ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ====================

Net interest income amounted to $177.8 million for the fourth quarter of 2020, an increase of $29.1 million, compared to net interest income of $148.7 million for the third quarter of 2020. The increase in net interest income was mainly due to:

A $15.8 million increase in interest income on commercial and construction loans, reflecting a $988.9 million increase in the average commercial and construction loan portfolio balance, primarily related to the effect of the BSPR acquisition for an entire quarter. Total discount accretion related to fair value marks on commercial and construction loans acquired from BSPR amounted to $3.7 million in the fourth quarter of 2020, compared to $1.8 million in the third quarter of 2020. In addition to the contribution of the acquired portfolio, higher average yields on commercial and construction loans reflect the effect of approximately $1.1 million of interest payments collected on certain nonaccrual loans that were paid off and the acceleration of fee income recognition related to forgiveness remittances for SBA PPP loans received in the fourth quarter that resulted in an increase in interest income of approximately $0.7 million. A $6.4 million increase in interest income on residential mortgage loans, reflecting a $498.0 million increase in the average balance of this portfolio, primarily related to the effect of the BSPR acquisition for an entire quarter. A $5.6 million increase in interest income on consumer loans and finance leases, reflecting a $192.6 million increase in the average balance of this portfolio, primarily related to the effect of the BSPR acquisition for an entire quarter. In addition to the contribution of the acquired portfolio, the increase in interest income reflect the effect of a $0.9 million increase in credit card loans late fees after the end of the COVID-19 moratorium period. A $0.5 million increase in interest income on investment securities, primarily related to a $903.9 million increase in the average balance of investment securities, primarily related to the full quarter's effect of the BSPR acquisition. In addition, the increase reflects the effect of the reinvestment of proceeds from sales of $803 million of low-yielding U.S. Treasury Notes acquired from BSPR into higher-yielding U.S agencies MBS and callable debentures. As a result of the purchase accounting requirements, those U.S. Treasury Notes carried a yield of 0.15%. These benefits were partially offset by a $3.1 million increase in U.S. agencies MBS premium amortization expense (including $1.5 million related to U.S. agencies MBS acquired in the BSPR transaction). A $0.8 million decrease in interest expense, including a reduction of approximately $1.9 million related to lower average rates paid on interest-bearing checking, savings, and non-brokered time deposits and a $0.4 million decrease related to a $78.9 million decrease in the average balance of brokered CDs. These variances were partially offset by an increase in interest expense of approximately $1.9 million related to a $2.1 billion increase in the average balance of non-brokered interest-bearing deposits, primarily related to the effect of deposits assumed from BSPR for an entire quarter. The decrease in total interest expense also reflects the effect of reductions in the average balance of Federal Home Loan Bank ("FHLB") advances.

Net interest margin was 3.95%, compared to 3.93% for the third quarter of 2020. The increase was primarily attributable to the higher average yield on commercial loans related to the aforementioned payments collected on certain nonaccrual loans that were paid off, the acceleration of fee income recognition related to forgiveness remittances for SBA PPP loans that accounted for approximately two basis points of the increase in net interest margin as compared to the third quarter, and a lower cost of deposits, partially offset by lower yields on U.S. agencies MBS affected by higher prepayment rates.

The fourth quarter results continue to reflect the effect of SBA PPP loans. Interest income on SBA PPP loans in the fourth quarter includes $3.2 million on average SBA PPP loan balances of $435.6 million, which had a 3 basis points dilutive impact in net interest margin.

NON-INTEREST INCOME

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

                 Quarter Ended                                  Quarter Ended                                                                                                                                                      Quarter Ended
---------------------------------------------- ---------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                 December 31,                                   December 31,                                    December 31,                       September 30,              September 30,               June 30,                           June 30,                           March 31,                  March 31,               December 31,               December 31,
(In thousands)                                                                                                      2020                               2020                       2020                      2020                               2020                               2020                       2020                      2019                       2019
                                                                                              ----------------------------------------------   -------------------- ------------------------------  -------------------- ----------------------------------------------   -------------------- ------------------------------  -------------------- ------------------------------
                                                                                                                                                       
Service charges on deposit accounts            Service charges on deposit accounts                               $  8,332                      $                    $      5,848                    $                    $  4,475                      $                    $      5,957                    $                    $      6,205
Mortgage banking activities                    Mortgage banking activities                       7,551            7,099      3,686            3,788          4,640
Net (loss) gain on investments and impairments Net (loss) gain on investments and impairments     (182                    )          5,288       (155                    )          8,247              -
Gain on early extinguishment of debt           Gain on early extinguishment of debt                  -               94          -                -              -
Other operating income                         Other operating income                           14,499           11,605     12,886           12,208         13,560
                                                                                              -------------------- ------ -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
Non-interest income                            Non-interest income                                               $ 30,200                      $                    $     29,934                    $                    $ 20,892                      $                    $     30,200                    $                    $     24,405
                                                                                              ==================== ====== ==================== ==================== ==================== ========== ==================== ==================== ====== ==================== ==================== ==================== ========== ==================== ==================== ==========

Non-interest income amounted to $30.2 million for the fourth quarter of 2020, compared to $29.9 million for the third quarter of 2020. The $0.3 million increase in non-interest income consisted of:

A $2.5 million increase in service charges on deposits, primarily related to the effect of the BSPR acquisition for an entire quarter. The increase also reflects the effect of a higher number of returned items and overdraft fee transactions. A $0.5 million increase in revenues from mortgage banking activities, driven by a $1.5 million increase in realized gains on sales of residential mortgage loans in the secondary market, driven by higher gain margins, and a $0.3 million increase in servicing fee income reflecting, primarily the effect of the BSPR acquisition for an entire quarter, partially offset by a $1.5 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. Total loans sold in the secondary market to U.S. government-sponsored agencies during the fourth quarter of 2020 amounted to $157.1 million, with a related net gain of $7.4 million (net of realized losses of $0.1 million on TBA hedges), compared to total loans sold during the third quarter of 2020 of $161.8 million, with a related net gain of $5.9 million (net of realized losses of $0.4 million on TBA hedges). A $2.9 million increase in Other operating income in the table above, primarily related to fee income of $1.4 million recorded in connection with the sale of a 95% participation in the $184.4 million of Main Street loans originated during the fourth quarter, as well as higher credit cards and merchant transactional fee income related to the effect of the BSPR acquisition for an entire quarter. The Corporation participates in the Main Street Lending program established by the FED under the CARES Act of 2020 to support lending to small and medium-sized businesses that were in sound financial condition before the onset of the COVID-19 pandemic. Under this program, the Corporation originates loans to borrowers meeting the terms and requirements of the program, including requirements as to eligibility, use of proceeds and priority, and sells a 95% participation interest in these loans to an SPV organized by the FED to purchase the participation interests from eligible lenders, including the Corporation. During the fourth quarter of 2020, the Corporation originated 23 loans under this program totaling $184.4 million in principal amount and sold participation interests totaling $175.1 million to the Main Street SPV, resulting in the aforementioned fee income recognition of $1.4 million related to the portion of the loans sold.

Partially offset by:

The effect in the third quarter of 2020 of the $5.3 million gain recorded 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.

NON-INTEREST EXPENSES

The following table sets forth information concerning non-interest expenses for the last five quarters:

                     Quarter Ended                                          Quarter Ended                                                                                                                                          Quarter Ended
----------------------------------------------------- -------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                     December 31,                                           December 31,                                 December 31,              September 30,              September 30,               June 30,                   June 30,                  March 31,                  March 31,               December 31,               December 31,
(In thousands)                                                                                                               2020                      2020                       2020                      2020                       2020                      2020                       2020                      2019                       2019
                                                                                                               ------------------------------  -------------------- ------------------------------  -------------------- ------------------------------  -------------------- ------------------------------  -------------------- ------------------------------
                                                                                                                                                 
Employees' compensation and benefits                  Employees' compensation and benefits                                        $     50,458                    $                    $     43,063                    $                    $     39,532                    $                    $     42,859                    $                    $     40,856
Occupancy and equipment                               Occupancy and equipment                                        24,066         19,064         16,376         15,127         16,151
Deposit insurance premium                             Deposit insurance premium                                       1,900          1,630          1,436          1,522          1,674
Other insurance and supervisory fees                  Other insurance and supervisory fees                            2,720          1,389          1,129          1,087            919
Taxes, other than income taxes                        Taxes, other than income taxes                                  5,795          4,510          3,577          3,880          3,864
Professional fees:                                    Professional fees:
Collections, appraisals and other credit-related fees    Collections, appraisals and other credit-related fees        1,218          1,262          1,387          1,696          2,345
Outsourcing technology services                          Outsourcing technology services                             12,524          6,949          7,672          6,829          6,036
Other professional fees                                  Other professional fees                                      3,567          3,352          2,909          3,268          3,652
Credit and debit card processing expenses             Credit and debit card processing expenses                       6,397          4,859          3,938          3,950          3,734
Business promotion                                    Business promotion                                              3,163          3,046          2,314          3,622          4,060
Communications                                        Communications                                                  2,462          2,246          1,852          1,877          1,591
Net loss on OREO operations                           Net loss on OREO operations                                       580          1,019            811          1,188          3,280
Merger and restructuring costs                        Merger and restructuring costs                                 12,321         10,441          2,902            845         10,850
Other                                                 Other                                                           7,591          4,678          3,951          4,434          3,302
                                                                                                               -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
Total                                                    Total                                                                    $    134,762                    $                    $    107,508                    $                    $     89,786                    $                    $     92,184                    $                    $    102,314
                                                                                                               ==================== ========== ==================== ==================== ========== ==================== ==================== ========== ==================== ==================== ========== ==================== ==================== ==========

Non-interest expenses amounted to $134.8 million in the fourth quarter of 2020, an increase of $27.3 million from $107.5 million in the third quarter of 2020. Included in non-interest expenses are the following Special Items:

Merger and restructuring costs associated with the acquisition of BSPR of $12.3 million for the fourth quarter of 2020, compared to $10.4 million for the third quarter of 2020. The costs for the fourth quarter of 2020 included the $4.3 million charge associated with the VSP offered to eligible employees in the Puerto Rico region as part of the integration process. COVID-19 pandemic-related expenses of $1.1 million for the fourth quarter of 2020, compared to $1.0 million for the third quarter of 2020. COVID-19 pandemic-related expenses for the fourth quarter of 2020, primarily consist of $1.0 million of expenses associated with cleaning and security protocols, included as part of Occupancy and equipment in the table above, compared to $0.8 million in the third quarter of 2020.

On a non-GAAP basis, adjusted non-interest expenses, excluding the effect of the Special Items mentioned above, amounted to $121.3 million for the fourth quarter of 2020, compared to $96.1 million for the third quarter of 2020. The $25.2 million increase in adjusted non-interest expenses reflects, among other things, the effect of operations, personnel, and branches obtained in the acquisition of BSPR for an entire quarter, higher expenses related to transaction volume increases associated with increases in the level of economic activity, and the following significant variances:

A $0.9 million increase associated with performance-related bonus accruals, reflected as part of Employees' compensation and benefits expenses in the table above. A $2.3 million increase in outsourced technology fees, primarily related to information technology and data security matters. A $1.5 million increase in the amortization of core deposit and purchased credit card relationship intangible assets recorded in connection with the acquisition of BSPR, included as part of Other expenses in the table above. A $0.4 million increase related to the effect of credit card networks incentive payments recorded in the third quarter, included as a contra expense as part of Credit and debit card processing expenses in the table above. A $0.4 million increase related to higher costs on insurance policies, reflected as part of Other insurance and supervisory fees in the table above.

The adjusted non-interest expenses financial metric presented above is a non-GAAP financial measure. 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 expense of $15.4 million for the fourth quarter of 2020, compared to an income tax benefit of $4.4 million for the third quarter of 2020. The variance was primarily related to the effect in the third quarter of both a tax benefit of approximately $13.0 million in connection with the aforementioned $38.9 million charge to the provision for credit losses related to the Day 1 reserves required for non-PCD acquired loans in conjunction the BSPR acquisition, and the $8.0 million tax benefit related to the partial reversal of the deferred tax asset valuation allowance. These variances were partially offset by a lower than previously estimated effective tax rate for the year.

The Corporation's effective tax rate, excluding entities with pre-tax losses from which a tax benefit cannot be recognized and discrete items, decreased to 17.1%, compared to the estimated effective tax rate of 21.4% as of the end of the third quarter of 2020, primarily due to a decrease of taxable income proportionate to pre-tax income. As of December 31, 2020, the Corporation had a deferred tax asset of $329.3 million (net of a valuation allowance of $102.0 million, including a valuation allowance of $59.9 million against the deferred tax assets of the Corporation's banking subsidiary, FirstBank).

CREDIT QUALITY

Non-Performing Assets

The following table sets forth information concerning non-performing assets for the last five quarters:

                                                                                                                                                                                                                                             
(Dollars in thousands)                                                                                                                        December 31,                       September 30,                       September 30,                        June 30,                            June 30,                           March 31,                           March 31,                        December 31,                        December 31,
                                                           2020                                                                                   2020                               2020                                2020                               2020                                2020                               2020                                2020                               2019                                2019
-------------------------------------------------------------------------------------------------------------------------- -----------------------------------------------   -------------------- -----------------------------------------------   -------------------- -----------------------------------------------   -------------------- -----------------------------------------------   -------------------- -----------------------------------------------
Nonaccrual loans held for investment:
   Residential mortgage                                                                                                                       $ 125,367                      $                    $ 122,797                      $                    $ 122,249                      $                    $ 122,903                      $                    $ 121,408  
   Commercial mortgage                                                                                                        29,611        29,651        34,109        35,953        40,076  
   Commercial and Industrial                                                                                                  20,881        20,882        19,995        19,734        18,773  
   Construction                                                                                                               12,971        13,090         9,574         9,663         9,782  
   Consumer and Finance leases                                                                                                16,259        14,870        18,047        24,042        20,629  
                                                                                                                           -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
      Total nonaccrual loans held for investment                                                                             205,089       201,290       203,974       212,295       210,668  
                                                                                                                           -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
                                                                                                                                                                                                                                             
OREO                                                                                                                          83,060        89,049        96,319        99,674       101,626  
Other repossessed property                                                                                                     5,357         3,006         3,554         5,832         5,115  
                                                                                                                           -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
      Total non-performing assets, excluding nonaccrual loans held for sale                                                                   $ 293,506                      $                    $ 293,345                      $                    $ 303,847                      $                    $ 317,801                      $                    $ 317,409  
                                                                                                                                                                                                                                             
Nonaccrual loans held for sale                                                                                                     -             -             -             -             -  
                                                                                                                           -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
      Total non-performing assets, including nonaccrual loans held for sale (1)                                                               $ 293,506                      $                    $ 293,345                      $                    $ 303,847                      $                    $ 317,801                      $                    $ 317,409  
                                                                                                                           ==================== ======= ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                                                                             
Past-due loans 90 days and still accruing (2)                                                                                                 $ 146,889                      $                    $ 160,066                      $                    $ 164,519                      $                    $ 132,058                      $                    $ 135,490  
Nonaccrual loans held for investment to total loans held for investment                                                         1.74                    %        1.70                    %        2.18                    %        2.35                    %        2.34                    %
Nonaccrual loans to total loans                                                                                                 1.73                    %        1.69                    %        2.17                    %        2.35                    %        2.33                    %
Non-performing assets, excluding nonaccrual loans held for sale, to total assets, excluding nonaccrual loans held for sale      1.56                    %        1.57                    %        2.16                    %        2.44                    %        2.52                    %
Non-performing assets to total assets                                                                                           1.56                    %        1.57                    %        2.16                    %        2.44                    %        2.52                    %
(1)
     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 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 December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019 amounted to $130.9 million, $133.2 million, $134.4 million, $134.0 million, and $136.7 million, respectively.

Variances in credit quality metrics:

Total non-performing assets increased by $0.2 million to $293.5 million as of December 31, 2020, compared to $293.3 million as of September 30, 2020. Total nonaccrual loans increased by $3.8 million to $205.1 million as of December 31, 2020, compared to $201.3 million as of September 30, 2020.

The increase in non-performing assets consisted of:

- A $2.6 million increase in nonaccrual residential mortgage loans, primarily resulting from the migration of loans previously subject to the COVID-19 payment moratorium relief. The increase related to inflows was partially offset by collections, charge-offs, and loans restored to accrual status during the fourth quarter.

- A $2.4 million increase in non-real estate repossessed assets, primarily repossessed automobiles.

- A $1.4 million increase in nonaccrual consumer loans, primarily personal loans and finance leases, driven by inflows, partially offset by charge-offs, collections, and auto repossessions recorded in the fourth quarter.

Partially offset by:

- A $6.0 million decrease in the OREO portfolio balance. The decrease was driven by sales of $5.8 million, primarily residential OREO properties in the Puerto Rico region.

- A $0.1 million decrease in nonaccrual commercial and construction loans, primarily due to loan repayments, including the payoff of a $3.0 million commercial and industrial loan, and a $2.8 million charge-off taken on a nonaccrual commercial and industrial loan in the Puerto Rico region, partially offset by the inflow of a $6.1 million matured commercial and industrial loan in the Puerto Rico region.

Inflows to nonaccrual loans held for investment were $32.9 million, a $14.5 million increase compared to inflows of $18.4 million in the third quarter of 2020. Inflows to nonaccrual residential mortgage loans were $12.8 million in the fourth quarter of 2020, an increase of $7.4 million compared to inflows of $5.4 million in the third quarter of 2020. Inflows to nonaccrual consumer loans were $11.5 million, an increase of $3.1 million compared to inflows of $8.4 million in the third quarter of 2020. Inflows to nonaccrual commercial and construction loans were $8.7 million in the fourth quarter of 2020, an increase of $4.1 million compared to inflows of $4.6 million in the third quarter of 2020, driven by the aforementioned inflow of a $6.1 million commercial and industrial 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 decreased by $2.1 million to $155.2 million as of December 31, 2020. Total Troubled Debt Restructured ("TDR") loans held for investment were $479.2 million as of December 31, 2020, down $9.4 million from September 30, 2020. Approximately $393.3 million of total TDR loans held for investment were in accrual status as of December 31, 2020. These figures exclude $58.7 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 $148.8 million as of December 31, 2020, an increase of $38.4 million, compared to $110.4 million as of September 30, 2020. The variances by major portfolio categories were as follow:

- Residential mortgage loans in early delinquency increased by $22.0 million to $66.5 million as of December 31, 2020, and consumer loans in early delinquency increased by $20.0 million to $55.7 million as of December 31, 2020. The increases primarily reflect the effect of certain loans previously subject to the COVID-19 payment deferral programs that reached delinquent status during the fourth quarter.

- Commercial and construction loans in early delinquency decreased in the fourth quarter by $4.3 million to $25.9 million as of December 31, 2020, including as a result of the migration to non-performing status of the aforementioned $6.1 million matured commercial and industrial loan in the Puerto Rico region.

As of December 31, 2020, the Corporation had under temporary deferred repayment arrangements 688 loans, totaling approximately $32.7 million, or 0.3%, of the total loan portfolio held for investment balance. The $32.7 million of loans under deferred payment agreements as of December 31, 2020 consisted of 89 residential mortgage loans totaling $18.4 million, 580 consumer loans totaling $8.0 million, and 19 commercial and construction loans totaling $6.3 million. These deferred repayment arrangements have been done under the provisions of Section 4013 of 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.

As of December 31, 2020, SBA PPP loans, net of unearned fees of $6.8 million, totaled $406.0 million. The unearned fees are being accreted into income based on the two-year contractual maturity (five years for the $26.9 million in SBA PPP loans originated after June 5, 2020). During the fourth quarter of 2020, the SBA approved and remitted payments for forgiveness applications totaling $48.9 million in principal balance, resulting in the acceleration of fee income recognition in the amount of approximately $0.7 million. For loans originated under the SBA's PPP loan program, interest and principal payment on these loans were originally deferred for six months following the funding date, during which time interest would continue to accrue. On October 7, 2020, the Paycheck Protection Program Flexibility Act of 2020 (the "Flexibility Act") extended the deferral period for borrower payments of principal, interest, and fees on all SBA PPP loans to the date that the SBA remits the borrower's loan forgiveness amount to the lender (or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower's loan forgiveness covered period). The extension of the deferral period under the Flexibility Act automatically applied to all SBA PPP loans.

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 year ended December 31, 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 fourth quarter and year ended December 31, 2020:

       Quarter Ended December 31, 2020          Quarter Ended December 31, 2020    Quarter Ended December 31, 2020                                                                                                                                                      Quarter Ended December 31, 2020
-------------------------------------------- ------------------------------------ ------------------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                  Loans and                                Loans and                          Loans and                                Loans and                        Unfunded Loan                      Unfunded Loan                    Held-to-Maturity                   Held-to-Maturity                  Available-for-Sale                 Available-for-Sale
Allowance for Credit Losses                                                                Finance Leases                           Finance Leases                       Commitments                        Commitments                      Debt Securities                    Debt Securities                    Debt Securities                    Debt Securities                         Total                               Total
----------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------- --------------------------------------------------
(In thousands)
Allowance for credit losses, beginning balance                                                                  $                    $ 384,718                      $                    $  6,281                      $                    $ 10,176                      $                    $  1,386                      $                    $ 402,561  
Provision for credit losses                                                                       10,186       (1,176                    )     (1,329                    )         10         7,691  
Net charge-offs                                                                                   (9,017                    )          -            -          (86                    )      (9,103                    )
                                                                                  ------------------------------- -------------------- ------- -------------------- -------------------- -------------------- ------ -------------------- -------------------  -------------------- ------ -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- ------- --------------------
Allowance for credit losses, end of period                                                                      $                    $ 385,887                      $                    $  5,105                    (1)                    $  8,847                      $                    $  1,310                      $                    $ 401,149  
                                                                                  =============================== ==================== ======= ==================== ==================== ==================== ====== ====================                      ==================== ====== ==================== ==================== ==================== ====== ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                           
-------------------------------------------- ------------------------------------
(1) Included in accounts payable and other liabilities.
                                                                                                                                                                                                                        
                                                                                                                                                                                                                        
                                                                                                                                                                                                                        
                                                                                                                                                                                                                        
        Year Ended December 31, 2020             Year Ended December 31, 2020       Year Ended December 31, 2020                                                                                                                                                         Year Ended December 31, 2020
-------------------------------------------- ------------------------------------ ------------------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                  Loans and                                Loans and                          Loans and                                Loans and                        Unfunded Loan                      Unfunded Loan                    Held-to-Maturity                   Held-to-Maturity                  Available-for-Sale                 Available-for-Sale
Allowance for Credit Losses                                                                Finance Leases                           Finance Leases                       Commitments                        Commitments                      Debt Securities                    Debt Securities                    Debt Securities                    Debt Securities                         Total                               Total
----------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------- --------------------------------------------------
(In thousands)
Allowance for credit losses, beginning balance prior to adoption of CECL                                        $                    $ 155,139                      $                    $      -                      $                    $      -                      $                    $      -                      $                    $ 155,139  
Impact of adopting CECL (cumulative transition adjustment) (2)                                    81,165        3,922        8,134            -        93,221  
                                                                                  ------------------------------- -------------------- ------- -------------------- -------------------- -------------------- ------ -------------------- -------------------  -------------------- ------ -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- ------- --------------------
Allowance for credit losses, January 1, 2020                                  236,304        3,922        8,134            -       248,360  
Provision for credit losses                                                                      168,717        1,183         (556                    )      1,641       170,985  
Initial allowance on PCD assets                                                                   28,744            -        1,269            -        30,013  
Net charge-offs                                                                                  (47,878                    )          -            -         (331                    )     (48,209                    )
                                                                                  ------------------------------- -------------------- ------- -------------------- -------------------- -------------------- ------ -------------------- -------------------  -------------------- ------ -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- ------- --------------------
Allowance for credit losses, end of period                                                                      $                    $ 385,887                      $                    $  5,105                    (1)                    $  8,847                      $                    $  1,310                      $                    $ 401,149  
                                                                                  =============================== ==================== ======= ==================== ==================== ==================== ====== ====================                      ==================== ====== ==================== ==================== ==================== ====== ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                           
-------------------------------------------- ------------------------------------
(1) Included in accounts payable and other liabilities.

The main variances of the total ACL by main categories are discussed below:

Allowance for Credit Losses for Loans and Finance Leases

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

                   Quarter Ended                                      Quarter Ended                                                                                                                                                                                    Quarter Ended
-------------------------------------------------- -------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)                                                                                                   December 31,                       September 30,                       September 30,                        June 30,                            June 30,                           March 31,                           March 31,                        December 31,                        December 31,
                                                 2020                                                                        2020                               2020                                2020                               2020                                2020                               2020                                2020                               2019                                2019
----------------------------------------------------------------------------------------------------  -----------------------------------------------   -------------------- -----------------------------------------------   -------------------- -----------------------------------------------   -------------------- -----------------------------------------------   -------------------- -----------------------------------------------
                                                                                                                                                                                                                        
Allowance for credit losses, beginning balance                                                                           $ 384,718                      $                    $ 319,297                      $                    $ 292,774                      $                    $ 155,139                      $                    $ 165,575  
Impact of adopting ASC 326                                                                                    -             -             -        81,165             -  
                                                                                                      -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Allowance for credit losses on loans and finance leases, beginning balance after CECL adoption          384,718       319,297       292,774       236,304       165,575  
                                                                                                      -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Provision for credit losses                                                                              10,186        48,078        36,408        74,045         8,473  
                                                                                                      -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Initial allowance on PCD loans                                                                                -        28,744             -             -             -  
                                                                                                      -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Net (charge-offs) recoveries of loans:
   Residential mortgage                                                                                  (1,642 )                         (2,283 )                         (1,794 )                         (3,779 )                         (5,930 )
   Commercial mortgage                                                                                    1,769        (3,104 )                             25           (84 )                           (103 )
   Commercial and Industrial                                                                               (367 )                            (70 )                              5           (10 )                            208  
   Construction                                                                                             102            36           (54 )                             24            (8 )
   Consumer and finance leases                                                                           (8,879 )                         (5,980 )                         (8,067 )                        (13,726 )                        (13,076 )
                                                                                                      -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Net charge-offs                                                                                          (9,017 )                        (11,401 )                         (9,885 )                        (17,575 )                        (18,909 )
                                                                                                      -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Allowance for credit losses on loans and finance leases, end of period                                                   $ 385,887                      $                    $ 384,718                      $                    $ 319,297                      $                    $ 292,774                      $                    $ 155,139  
                                                                                                      ==================== ======= ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                                                        
Allowance for credit losses on loans and finance leases to period end total loans held for investment      3.28                    %        3.25                    %        3.41                    %        3.24                    %        1.72                    %
Net charge-offs (annualized) to average loans outstanding during the period                                0.30                    %        0.45                    %        0.43                    %        0.78                    %        0.84                    %

As of December 31, 2020, the ACL for loans and finance leases was $385.9 million, up $1.2 million from September 30, 2020. The increase was primarily due to a $23.8 million increase in the ACL for commercial and construction loans, primarily related to the effect of the deterioration in the Commercial Real Estate Price Index forecast in the Corporation's commercial retail real estate portfolio. This increase was partially offset by decreases of $11.5 million in the ACL for residential mortgage loans, driven by improvements in macroeconomic variables, such as the regional unemployment rate, and the overall decrease in the size of this portfolio, and $11.1 million in the ACL for consumer loans, also driven by improvements in macroeconomic variables. The provision for credit losses on loans and finance leases was $10.2 million for the fourth quarter of 2020, down $37.9 million from $48.1 million in the third quarter of 2020. The decrease primarily reflects the effect of the aforementioned charge recorded in the third quarter with respect to non-PCD loans acquired in the BSPR transaction. The following table shows the breakdown of the provision for credit losses by portfolio for the fourth and third quarters of 2020:

             Quarter Ended December 31, 2020                Quarter Ended December 31, 2020                                                                                                    Quarter Ended December 31, 2020
------------------------------------------------------- ------------------------------------- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                        Residential                                Residential                     Commercial Loans           Commercial Loans              Consumer                           Consumer                             Total                      Total
                                                                       Mortgage                                   Mortgage                          (including                 (including                 Loans and                          Loans and
                                                                         Loans                                      Loans                           Commercial                 Commercial                  Finance                            Finance
                                                                                                                                                Mortgage, C&I, and         Mortgage, C&I, and              Leases                             Leases
                                                                                                                                                   Construction)              Construction)
                                                        ------------------------------------- ----------------------------------------------   -------------------- ------------------------------  -------------------- ----------------------------------------------   -------------------- ------------------------------
                                                                                                                                        
Provision for credit losses on loans and finance leases                                     $                    $ (9,828 )                                       $                    $     22,286                    $                    $ (2,272 )                                       $                    $     10,186
                                                        ===================================== ==================== ====== ==================== ==================== ==================== ========== ==================== ==================== ====== ==================== ==================== ==================== ==========
                                                                                                                                        
                                                                                                                                        
            Quarter Ended September 30, 2020               Quarter Ended September 30, 2020                                                                                                   Quarter Ended September 30, 2020
------------------------------------------------------- ------------------------------------- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                        Residential                                Residential                     Commercial Loans           Commercial Loans              Consumer                           Consumer                             Total                      Total
                                                                       Mortgage                                   Mortgage                          (including                 (including                 Loans and                          Loans and
                                                                         Loans                                      Loans                           Commercial                 Commercial                  Finance                            Finance
                                                                                                                                                Mortgage, C&I, and         Mortgage, C&I, and              Leases                             Leases
                                                                                                                                                   Construction)              Construction)
                                                        ------------------------------------- ----------------------------------------------   -------------------- ------------------------------  -------------------- ----------------------------------------------   -------------------- ------------------------------
                                                                                                                                        
Provision for credit losses on loans and finance leases (legacy operations)                                      $ (3,730 )                                       $                    $     11,147                    $                    $  3,167                      $                    $     10,584
Day 1 reserves required for acquired non-PCD loans                           13,605           13,769     10,120           37,494
                                                        ------------------------------------- -------------------- ------ -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- ----------

- Provision for credit losses for the commercial and construction loans portfolio of $22.3 million, compared to $24.9 million in the third quarter of 2020. Excluding the $13.8 million charge recorded in the third quarter related to the Day 1 reserve required for non-PCD commercial loans acquired in the acquisition of BSPR, the provision for commercial and construction loans increased by $11.1 million compared to the third quarter, driven primarily by higher reserve builds associated with the deterioration in the Commercial Real Estate Price Index forecast considered in the Corporation's CECL model affecting more significantly the commercial retail real estate portfolio.

- Release of credit losses for the residential mortgage loans portfolio of $9.8 million, compared to a provision of $9.9 million in the third quarter of 2020. Excluding the $13.6 million charge recorded in the third quarter related to the Day 1 reserve required for non-PCD residential mortgage loans acquired in the acquisition of BSPR, the release of credit losses for residential mortgage loans was $6.1 million higher than the release recorded in the third quarter. The reserve release in the fourth quarter reflects the effect of favorable changes in the economic forecast used in the Corporation's CECL model, primarily in the regional unemployment rate variable, and the overall decrease in size of this portfolio.

- Release of credit losses for the consumer loans and finance leases portfolio of $2.3 million, compared to a provision of $13.3 million in the third quarter of 2020. Excluding the $10.1 million charge recorded in the third quarter related to the Day 1 reserve required for non-PCD consumer loans acquired in the acquisition of BSPR, the positive variance of $5.5 million primarily reflects the effect of reserve releases recorded for the personal loan, small loan and finance lease portfolios, driven by improvements in macroeconomic variables such as the regional unemployment rate.

The ratio of the ACL for loans and finance leases to total loans held for investment was 3.28% as of December 31, 2020, compared to 3.25% as of September 30, 2020. No ACL was allocated to SBA PPP loans since 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 3.39% as of December 31, 2020 compared to 3.38% as of September 30, 2020. The ratio of the total allowance for credit losses for loans and finance leases to nonaccrual loans held for investment was 188.16% as of December 31, 2020, compared to 191.13% 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 December 31, 2020 and September 30, 2020 by loan category:

(Dollars in thousands)                                                         Residential                       Commercial Loans                     Commercial Loans                      Consumer and                         Consumer and                            Total                                Total
                                                                                Mortgage                       (including Commercial                (including Commercial                  Finance Leases                       Finance Leases
                                                                                  Loans                         Mortgage, C&I, and                   Mortgage, C&I, and
                                                                                                                   Construction)                        Construction)
                                                          -------------------------------------------------   --------------------- -------------------------------------------------   -------------------- -------------------------------------------------   -------------------- --------------------------------------------------
                                                                                                                                                                      
As of December 31, 2020
                                                                                                                                                                      
Total loans held for investment:
   Amortized cost                                                            $ 3,521,954                       $                    $ 5,645,692                      $                    $ 2,609,643                      $                    $ 11,777,289  
   Allowance for credit losses on loans                       120,311          152,666         112,910          385,887  
   Allowance for credit losses on loans to amortized cost        3.42                    %           2.70                    %          4.33                    %           3.28                    %
                                                                                                                                                  
As of September 30, 2020
                                                                                                                                                                      
Total loans held for investment:
   Amortized cost                                                            $ 3,636,713                       $                    $ 5,638,476                      $                    $ 2,572,086                      $                    $ 11,847,275  
   Allowance for credit losses on loans                       131,781          128,876         124,061          384,718  

Net Charge-Offs

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

        Quarter Ended           Quarter Ended                                                                                            Quarter Ended
--------------------------- -------------------- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
        December 31,            December 31,         December 31,         September 30,        September 30,          June 30,             June 30,             March 31,            March 31,          December 31,         December 31,
            2020                    2020                 2020                 2020                 2020                 2020                 2020                 2020                 2020                 2019                 2019
--------------------------- -------------------- -------------------  -------------------- -------------------  -------------------- -------------------  -------------------- -------------------  -------------------- -------------------
                            
Residential mortgage                        0.18       0.18         %                 0.29       0.29         %                 0.25       0.25         %                 0.52       0.52         %                 0.80       0.80         %
                            
Commercial mortgage                        -0.31      -0.31         %                 0.73       0.73         %                -0.01      -0.01         %                 0.02       0.02         %                 0.03       0.03         %
                            
Commercial and Industrial                   0.05       0.05         %                 0.01       0.01         %                 0.00       0.00         %                 0.00       0.00         %                -0.04      -0.04         %
                            
Construction                               -0.21      -0.21         %                -0.08      -0.08         %                 0.13       0.13         %                -0.08      -0.08         %                 0.03       0.03         %
                            
Consumer and finance leases                 1.37       1.37         %                 1.00       1.00         %                 1.41       1.41         %                 2.38       2.38         %                 2.34       2.34         %
                            
   Total loans                              0.30       0.30         %                 0.45       0.45         %                 0.43       0.43         %                 0.78       0.78         %                 0.84       0.84         %

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 $9.0 million for the fourth quarter of 2020, or an annualized 0.30% of average loans, compared to $11.4 million, or an annualized 0.45% of average loans, in the third quarter of 2020. The decrease of $2.4 million in net charge-offs consisted of:

A $4.7 million decrease in commercial and construction loan net charge-offs, as the Corporation recorded net recoveries of $1.5 million in the fourth quarter of 2020 compared to net charge-offs of $3.2 million in the third quarter of 2020. The commercial and construction loan loss net recoveries in the fourth quarter of 2020 included recoveries totaling $3.9 million in connection with the repayment and cancellation of two nonaccrual commercial loans. A $0.6 million decrease in residential mortgage loan net charge-offs, primarily related to the effect in the third quarter of charge-offs taken on delinquent loans repurchased from GNMA pools.

Partially offset by:

A $2.9 million increase in consumer loan net charge-offs, primarily reflecting increases in charge-offs taken on personal loans, small loans, and auto loans.

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 December 31, 2020, the ACL for off-balance sheet credit exposures was $5.1 million, down $1.2 million from $6.3 million as of September 30, 2020. The decrease was mainly in connection with a construction loan commitment due to improvements in the borrower's financial metrics as well as an improvement in the underlying collateral value of such facility.

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

As of December 31, 2020, the held-to-maturity debt securities portfolio consisted of Puerto Rico municipal bonds. As of December 31, 2020, the ACL for held-to-maturity debt securities was $8.8 million, down $1.4 million from $10.2 million as of September 30, 2020. The release was primarily related to favorable changes in economic forecasts employed in the Corporation's CECL model driven by changes in market risk factors.

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

As of December 31, 2020, the ACL for available-for-sale debt securities was $1.3 million, down $0.1 million from $1.4 million as of September 30, 2020. The $0.1 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 $18.8 billion as of December 31, 2020, up $133.3 million from September 30, 2020.

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

A $1.4 billion increase in investment securities, mainly driven by purchases of U.S. agencies MBS and U.S agencies callable and bullet debentures totaling $1.8 billion during the fourth quarter, partially offset by approximately $238.6 million of U.S. agencies bonds that were called prior to maturity during the fourth quarter, and prepayments of $244.6 million of U.S. agencies residential pass-through MBS. The purchases of investment securities reflect the effect of the reinvestment of proceeds from sales in the latter part of the third quarter of the approximately $803 million of U.S. Treasury Notes acquired from BSPR, as well as the deployment of a portion of cash balances into U.S. agencies investment securities. A $975.7 million decrease in cash and cash equivalents attributable, among other things, to the deployment of some cash balances into U.S agencies MBS and debt securities, as well as the repayment of matured FHLB advances and brokered CDs. A $121.8 million decrease in accounts receivable on unsettled investment sales, included as part of Other assets in the consolidated statements of financial condition, related to the settlement in the fourth quarter of sales of U.S. agencies MBS executed in the latter part of September. A $68.4 million decrease in total loans. The decrease consisted of reductions of $31.3 million in the Puerto Rico region, $28.0 million in the Florida region, and $9.1 million in the Virgin Islands region. On a portfolio basis, the decrease consisted of a reduction of $113.1 million in residential mortgage loans, partially offset by increases of $37.6 million in consumer loans and $7.2 million in commercial and construction loans (net of a $49.2 million decrease in principal balance related to SBA PPP loans forgiveness remittances).

The decrease in the Puerto Rico region consisted of an $87.7 million decrease in residential mortgage loans, partially offset by increases of $40.4 million in consumer loans, primarily auto loans, and $16.0 million in commercial and construction loans. The decline in the residential mortgage loan portfolio in the Puerto Rico region reflects the effect of repayments and charge-offs, which more than offset the volume of non-conforming loan originations. Approximately 94% of the $133.5 million in residential mortgage loan originations in the Puerto Rico region during the fourth 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 increase in the commercial and construction loan portfolio was achieved despite a $32.3 million decrease in the carrying value of SBA PPP loans. Excluding the decline in the SBA PPP loan portfolio, commercial and construction loans in the Puerto Rico region increased by $48.3 million, driven by the origination of six large new originations individually in excess of $10 million and totaling $106.9 million, partially offset by reductions in balances of revolving lines of credit.

The decrease in total loans in the Florida region consisted of reductions of $20.7 million in residential mortgage loans, $3.9 million in commercial and construction loans, and $3.4 million in consumer loans. The decrease in the commercial and construction loan portfolio included a $14.2 million decrease in the carrying value of SBA PPP loans. Excluding the decline in the SBA PPP loans portfolio, commercial and construction loans in the Florida region increased by $10.3 million, driven by the origination of two large commercial loans individually in excess of $10 million and totaling $34.8 million and the approximately $6.5 million in participations retained in connection with the origination of Main Street loans in the fourth quarter, partially offset by loan repayments.

The decrease in total loans in the Virgin Islands region consisted of reductions of $4.9 million in commercial and construction loans and $4.8 million in residential mortgage loans, partially offset by a $0.6 million increase in the balance of consumer loans. The decrease in commercial and construction loans reflects, among other things, a decrease of $1.0 million in the carrying value of SBA PPP loans and a $2.1 million decrease in the balance of a line of credit of a government entity.

Total loan originations, including refinancings, renewals and draws from existing commitments (excluding credit card utilization activity), amounted to $1.4 billion in the fourth quarter of 2020, compared to $971.1 million in the third quarter of 2020. During the fourth quarter of 2020, the Corporation originated Main Street loans totaling $184.4 million in principal amount and sold participation interests totaling $175.1 million to the SPV organized by the FED to purchase the participation interests from eligible lenders. Excluding Main Street loans and $15.1 million of SBA PPP loans originated in the third quarter of 2020, total loan originations increased by $277.6 million from $956.0 million in the third quarter of 2020 to $1.2 billion in the fourth quarter of 2020, consisting of: (i) a $295.1 million increase in commercial and construction loan originations, including the origination of eight large facilities individually in excess of $10 million and totaling $141.7 million, (ii) a $15.3 million decrease in residential mortgage loan originations, primarily in the Florida region; and (iii) a $2.2 million decrease in consumer loan originations.

Total loan originations in the Puerto Rico region amounted to $1.1 billion in the fourth quarter of 2020, compared to $760.0 million in the third quarter of 2020. Total loan originations in the Puerto Rico region during the fourth quarter of 2020 included $54.1 million of Main Street loans, for which the Corporation sold participation interests of $51.4 million to the FED. Excluding Main Street loans and $14.0 million of SBA PPP loans originated in the third quarter of 2020, total loan originations in the Puerto Rico region increased by $269.3 million from $746.0 million in the third quarter of 2020 to $1.0 billion in the fourth quarter of 2020, consisting of: (i) a $275.4 million increase in commercial and construction loan originations, including the origination of six large facilities individually in excess of $10 million and totaling $106.9 million, as well as an increased volume of loan renewals and refinancings; (ii) a $2.8 million decrease in residential mortgage loan originations; and (iii) a $3.3 million decrease in consumer loan originations.

Total loan originations in the Florida region amounted to $325.7 million in the fourth quarter of 2020, compared to $180.0 million in the third quarter of 2020. Total loan originations in the Florida region during the fourth quarter of 2020 included $130.2 million of Main Street loans, for which the Corporation sold participation interests of $123.7 million to the FED. Excluding Main Street loans and $0.4 million of SBA PPP loans originated in the third quarter of 2020, total loan originations in the Florida region increased by $15.8 million from $179.6 million in the third quarter of 2020 to $195.5 million in the fourth quarter of 2020, consisting of: (i) a $29.3 million increase in commercial and construction loan originations, primarily related to higher utilization of commercial lines of credit; (ii) a $13.7 million decrease in residential mortgage loan originations; and (iii) a $0.2 million increase in consumer loan originations.

Total loan originations in the Virgin Islands region amounted to $22.9 million in the fourth quarter of 2020, compared to $31.0 million in the third quarter of 2020. Excluding SBA PPP loans of $0.7 million originated in the third quarter of 2020, total loan originations in the Virgin Islands region decreased by $7.6 million from $30.4 million in the third quarter of 2020 to $22.9 million in the fourth quarter of 2020, consisting of: (i) a $9.6 million decrease in commercial and construction loan originations, driven by the effect in the third quarter of the refinancing and renewal of certain government loans; (ii) a $1.1 million increase in residential mortgage loan originations; and (iii) a $0.9 million increase in consumer loan originations.

Total liabilities were approximately $16.5 billion as of December 31, 2020, up $83.4 million from September 30, 2020.

The increase in total liabilities was mainly due to:

A $257.2 million increase in total deposits, excluding brokered deposits and government deposits, consisting of increases of $156.3 million in the Puerto Rico region, $94.2 million in the Florida region, and $6.7 million in the Virgin Islands region. On a deposit type basis, the increase consisted of increases of $159.2 million in demand deposits and $150.7 million in savings deposits across all regions, partially offset by a $52.7 million decrease in retail CDs. A $24.0 million increase in accounts payable on unsettled investment purchases, included as part of Accounts payable and other liabilities in the consolidated statements of financial condition, related to purchases of U.S. agencies MBS with settlement dates in January 2021.

Partially offset by:

A $112.8 million decrease in brokered deposits, reflecting the effect of the maturity of approximately $60.1 million of brokered CDs, with an all-in cost of 2.45%, that were paid off during the fourth quarter, and a $52.8 million decrease in the balance of non-maturity brokered money market deposit accounts maintained by a deposit broker. A $50.0 million decrease related to the repayment at maturity of a FHLB advance that had a cost of 2.08%. A $29.8 million decrease in government deposits, primarily reflecting a reduction of $124.5 million in the Virgin Islands region, partially offset by an increase of $94.1 million in the Puerto Rico region. The decrease in the Virgin Islands was primarily related to the distribution of stimulus payments by the Virgin Islands central government, while the increase in the Puerto Rico region was primarily related to increases in transactional account balances of government public corporations and agencies of the Puerto Rico central government.

Total stockholders' equity amounted to $2.3 billion as of December 31, 2020, an increase of $49.9 million from September 30, 2020. The increase was driven by earnings generated in the fourth quarter, and a $10.4 million increase in the fair value of available-for-sale investment securities recorded as part of Other comprehensive income in the consolidated statements of financial condition, partially offset by common and preferred stock dividends declared in the fourth quarter totaling $11.6 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 December 31, 2020, capital ratios remained strong compared to required 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 17.31%, 17.61%, 20.37% and 11.26%, respectively, as of December 31, 2020, compared to common equity tier 1 capital, tier 1 capital, total capital and leverage ratios of 17.21%, 17.52%, 20.32%, and 13.04%, respectively, as of September 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 16.05%, 18.65%, 19.91%, and 11.92%, respectively, as of December 31, 2020, compared to common equity tier 1 capital, tier 1 capital, total capital and leverage ratios of 15.91%, 18.57%, 19.83% and 13.83%, respectively, as of September 30, 2020.

The decrease in the leverage ratios from September 30, 2020 reflected the effect of the acquisition of BSPR on average consolidated total assets for an entire quarter.

Tangible Common Equity

The Corporation's tangible common equity ratio increased to 11.54% as of December 31, 2020, compared to 11.36% as of September 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 share information)
        December 31,                December 31,                            December 31,                         September 30,                        September 30,                          June 30,                             June 30,                             March 31,                            March 31,                          December 31,                         December 31,
            2020                        2020                                    2020                                 2020                                 2020                                 2020                                 2020                                 2020                                 2020                                 2019                                 2019
--------------------------- --------------------------- --------------------------------------------------   -------------------- --------------------------------------------------   -------------------- --------------------------------------------------   -------------------- --------------------------------------------------   -------------------- --------------------------------------------------
Tangible Equity:
   Total equity - GAAP                                                     $  2,275,179                      $                    $  2,225,282                      $                    $  2,214,834                      $                    $  2,199,751                      $                    $  2,228,073  
   Preferred equity                                          (36,104 )                           (36,104 )                           (36,104 )                           (36,104 )                           (36,104 )
   Goodwill                                                  (38,632 )                           (34,401 )                           (28,098 )                           (28,098 )                           (28,098 )
   Purchased credit card relationship intangible              (4,733 )                            (5,789 )                            (2,668 )                            (3,141 )                            (3,615 )
   Core deposit intangible                                   (35,842 )                           (37,749 )                            (3,086 )                            (3,287 )                            (3,488 )
   Insurance customer relationship intangible                   (318 )                              (355 )                              (394 )                              (432 )                              (470 )
                                                        -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                      
   Tangible common equity                                                  $  2,159,550                      $                    $  2,110,884                      $                    $  2,144,484                      $                    $  2,128,689                      $                    $  2,156,298  
                                                        -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                      
Tangible Assets:
   Total assets - GAAP                                                     $ 18,793,071                      $                    $ 18,659,768                      $                    $ 14,096,406                      $                    $ 13,047,977                      $                    $ 12,611,266  
   Goodwill                                                  (38,632 )                           (34,401 )                           (28,098 )                           (28,098 )                           (28,098 )
   Purchased credit card relationship intangible              (4,733 )                            (5,789 )                            (2,668 )                            (3,141 )                            (3,615 )
   Core deposit intangible                                   (35,842 )                           (37,749 )                            (3,086 )                            (3,287 )                            (3,488 )
   Insurance customer relationship intangible                   (318 )                              (355 )                              (394 )                              (432 )                              (470 )
                                                        -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                   
   Tangible assets                                                         $ 18,713,546                      $                    $ 18,581,474                      $                    $ 14,062,160                      $                    $ 13,013,019                      $                    $ 12,575,595  
                                                        -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                   
   Common shares outstanding                                 218,235          218,229          218,158          218,161          217,359  
                                                        -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                   
   Tangible common equity ratio                                11.54                    %          11.36                    %          15.25                    %          16.36                    %          17.15                    %

Exposure to Puerto Rico Government

As of December 31, 2020, the Corporation had $394.8 million of direct exposure to the Puerto Rico Government, its municipalities and public corporations, compared to $400.5 million as of September 30, 2020. As of December 31, 2020, approximately $201.5 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 $133.9 million consisted of municipal revenue or special obligation bonds. The Corporation's total direct exposure to the Puerto Rico Government also included $13.6 million in loans extended to an affiliate of a public corporation, $41.8 million in loans of an agency of the Puerto Rico central government, and obligations of the Puerto Rico Government, specifically a residential pass-through MBS issued by the Puerto Rico Housing Finance Authority ("PRHFA") , at an amortized cost of $4.0 million (fair value of $2.9 million as of December 31, 2020), included as part of the Corporation's available-for-sale investment securities portfolio. This residential pass-through MBS issued by the PRHFA is collateralized by certain second mortgages and had an unrealized loss of $1.1 million as of December 31, 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 $189.5 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. As of December 31, 2020, the ACL for these securities was $8.8 million, down $1.4 million from $10.2 million as of September 30, 2020.

As of December 31, 2020, the Corporation had $1.8 billion of public sector deposits in Puerto Rico, compared to $1.7 billion as of September 30, 2020. Approximately 23% of the public sector deposits as of December 31, 2020 is from municipalities and municipal agencies in Puerto Rico and 77% 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, January 29, 2021, 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 January 29, 2022. A telephone replay will be available one hour after the end of the conference call through March 1, 2021 at (877) 344-7529 or (412) 317-0088 for international callers. The replay access code is 10151639.

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 availability and efficacy 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 on 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; risks, uncertainties and other factors related to the Corporation's recent acquisition of BSPR, including the risk that costs, expenses, and the use of resources associated with the acquisition may be higher than expected, the risk that the Corporation's integration of procedures, personnel and systems, such as the Corporation's internal control over financial reporting, of BSPR into FirstBank are not effective, thus risking the economic success resulting from the transaction and the risk that the Corporation may not realize, either fully or on a timely basis, the cost savings and any other synergies from the acquisition that the Corporation expected, such as because of deposit attrition, customer loss and/or revenue loss following the acquisition, 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, 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; 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, 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 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, 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 $4.0 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, including as a result of the change in the political landscape resulting from the 2020 election in the U.S. and Puerto Rico, 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 caused a recent cyber incident, and the occurrence of any of 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, 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, and merger and restructuring costs in connection with the acquisition of BSPR 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.

The following table reconciles income before income taxes to adjusted pre-tax, pre-provision income for the years ended December 31, 2020 and 2019:

(Dollars in thousands)                                                                        Year Ended                                                                        Year Ended
                                                                                         -------------------- ----------------------------------------------------------------------------------------------------------------------------------------------
                                      December 31,                                           December 31,                        December 31,                       December 31,                        December 31,
                                          2020                                                   2020                                2020                               2019                                2019
---------------------------------------------------------------------------------------- -------------------- -----------------------------------------------   -------------------- -----------------------------------------------
                                                                                                                                         
Income before income taxes                                                                                  $                    $ 116,323                      $                    $ 239,372  
Add: Provision for credit losses                                                             170,985        39,813  
Less: Net gain on sales of investment securities                                             (13,198 )                              -  
Add: Credit loss impairment on debt securities (1)                                                 -           497  
Less: Accelerated discount accretion due to early payoff of acquired loan                          -        (2,953 )
Less: Employee retention benefit - Disaster Tax Relief and Airport Extension Act of 2017           -        (2,317 )
Less: Benefit from hurricane-related insurance recoveries                                     (6,153 )                         (1,926 )
Less: Gain on early extinguishment of debt                                                       (94 )                              -  
Add: COVID-19 pandemic-related expenses                                                        5,411             -  
Add: Merger and restructuring costs                                                           26,509        11,442  
                                                                                         -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
   Adjusted pre-tax, pre-provision income                                                                   $                    $ 299,783                      $                    $ 283,928  
                                                                                         ==================== ==================== ======= ==================== ==================== ==================== ======= ====================
                                                                                                                                         
Change from most recent prior year (amount)                                                                 $                    $  15,855                      $                    $  34,228  
(1)
     ASC 326, which became effective on January 1, 2020, requires credit losses on available-for-sale debt securities to be presented as an allowance rather than as a write-down. Thus, credit losses on debt securities recorded prior to January 1, 2020 are presented as credit loss impairment on debt securities in the table above, while credit losses on debt securities recorded after January 1, 2020 are presented as part of provision for credit losses in the table above.

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 the 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 the fourth and third quarters of 2020, the fourth quarter of 2019 and the years ended December 31, 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 thousands)                                                                             Quarter Ended                                                                                                              Quarter Ended                                                                                                   Year Ended                                                                Year Ended
                                                                                  --------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------------
                                 December 31, 2020                                               December 31, 2020                                December 31, 2020                   September 30, 2020                   September 30, 2020                    December 31, 2019                    December 31, 2019                    December 31, 2020                    December 31, 2020                    December 31, 2019                    December 31, 2019
--------------------------------------------------------------------------------- --------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- -----------------------------------------------------
Net Interest Income
Interest income - GAAP                                                                                                        $                    $    198,700                      $                    $    170,402                      $                    $    167,620                      $                    $    692,982                      $                    $    675,897  
Unrealized loss (gain) on
   derivative instruments                                                                                              (9           )                     (18           )                       -              (27           )                       6  
                                                                                  --------------------------------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
Interest income excluding valuations                                                                              198,691          170,384          167,620          692,955          675,903  
Tax-equivalent adjustment                                                                                           5,308            4,964            5,050           21,059           20,265  
                                                                                  --------------------------------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
Interest income on a tax-equivalent basis and excluding valuations                                                            $                    $    203,999                      $                    $    175,348                      $                    $    172,670                      $                    $    714,014                      $                    $    696,168  
                                                                                                                                                                                                                                                           
Interest expense - GAAP                                                                                            20,933           21,706           27,691           92,660          108,816  
                                                                                  --------------------------------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                                           
Net interest income - GAAP                                                                                                    $                    $    177,767                      $                    $    148,696                      $                    $    139,929                      $                    $    600,322                      $                    $    567,081  
                                                                                  ============================================= ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ====================
                                                                                                                                                                                                                                                           
Net interest income excluding valuations                                                                                      $                    $    177,758                      $                    $    148,678                      $                    $    139,929                      $                    $    600,295                      $                    $    567,087  
                                                                                  ============================================= ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ====================
                                                                                                                                                                                                                                                           
Net interest income on a tax-equivalent basis and excluding valuations                                                        $                    $    183,066                      $                    $    153,642                      $                    $    144,979                      $                    $    621,354                      $                    $    587,352  
                                                                                  ============================================= ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ====================
                                                                                                                                                                                                                                                           
Average Balances
Loans and leases                                                                                                              $                    $ 11,843,157                      $                    $ 10,163,671                      $                    $  8,952,209                      $                    $ 10,068,702                      $                    $  8,982,087  
Total securities, other short-term investments and interest-bearing cash balances                               6,057,360        4,871,710        2,865,530        4,411,880        2,708,677  
                                                                                  --------------------------------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
Average interest-earning assets                                                                                               $                    $ 17,900,517                      $                    $ 15,035,381                      $                    $ 11,817,739                      $                    $ 14,480,582                      $                    $ 11,690,764  
                                                                                  --------------------------------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                                           
Average interest-bearing liabilities                                                                                          $                    $ 11,704,166                      $                    $  9,732,691                      $                    $  7,845,104                      $                    $  9,477,461                      $                    $  7,749,252  
                                                                                  --------------------------------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                                           
Average Yield/Rate
Average yield on interest-earning assets - GAAP                                                                      4.42                    %           4.51                    %           5.63                    %           4.79                    %           5.78                    %
Average rate on interest-bearing liabilities - GAAP                                                                  0.71                    %           0.89                    %           1.40                    %           0.98                    %           1.40                    %
                                                                                  --------------------------------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
Net interest spread - GAAP                                                                                           3.71                    %           3.62                    %           4.23                    %           3.81                    %           4.38                    %
                                                                                  ============================================= ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ====================
Net interest margin - GAAP                                                                                           3.95                    %           3.93                    %           4.70                    %           4.15                    %           4.85                    %
                                                                                  ============================================= ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ====================
                                                                                                                                                                                                                                           
Average yield on interest-earning assets excluding valuations                                                        4.42                    %           4.51                    %           5.63                    %           4.79                    %           5.78                    %
Average rate on interest-bearing liabilities excluding valuations                                                    0.71                    %           0.89                    %           1.40                    %           0.98                    %           1.40                    %
                                                                                  --------------------------------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
Net interest spread excluding valuations                                                                             3.71                    %           3.62                    %           4.23                    %           3.81                    %           4.38                    %
                                                                                  ============================================= ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ====================
Net interest margin excluding valuations                                                                             3.95                    %           3.93                    %           4.70                    %           4.15                    %           4.85                    %
                                                                                  ============================================= ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ====================
                                                                                                                                                                                                                                           
Average yield on interest-earning assets on a tax-equivalent basis and excluding valuations                                             4.53                    %           4.64                    %           5.80                    %           4.93                    %           5.95                    %
Average rate on interest-bearing liabilities excluding valuations                                                    0.71                    %           0.89                    %           1.40                    %           0.98                    %           1.40                    %
                                                                                  --------------------------------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
Net interest spread on a tax-equivalent basis and excluding valuations                                               3.82                    %           3.75                    %           4.40                    %           3.95                    %           4.55                    %
                                                                                  ============================================= ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ====================

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 fourth and third quarters of 2020 and the fourth quarter of 2019 that reflect the described items that were excluded for one of those reasons:

Adjusted net income - The adjusted net income amounts for the fourth and third quarters of 2020 and the fourth quarter of 2019 reflect the following exclusions:

- Merger and restructuring costs of $12.3 million, $10.4 million, and $10.9 million recorded in the fourth quarter of 2020, third quarter of 2020, and fourth quarter of 2019, respectively, related to transaction costs and restructuring initiatives in connection with the acquisition of BSPR.

- COVID-19 pandemic-related expenses of $1.1 million and $1.0 million in the fourth quarter of 2020 and third quarter of 2020, respectively.

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

- The $8.0 million benefit related to the partial reversal of the deferred tax asset valuation allowance recorded in the third quarter of 2020.

- 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 below as "Gain on early extinguishment of debt."

- Benefit of $0.7 million recorded in the fourth quarter of 2019 resulting from insurance recoveries associated with hurricane-related expenses and impairments related to Hurricanes Irma and Maria.

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

Tax benefit of $4.6 million, $3.9 million and $4.1 million in the fourth quarter of 2020, third quarter of 2020, and fourth quarter of 2019, respectively, related to merger and restructuring costs in connection with the acquisition of BSPR (calculated based on the statutory tax rate of 37.5%). Tax benefit of $0.4 million for each of the fourth quarter of 2020 and third quarter of 2020 in connection with the COVID-19 pandemic-related expenses (calculated based on the statutory tax rate of 37.5%). Tax expense of $0.3 million in the fourth quarter of 2019 related to the benefit of hurricane-related insurance recoveries (calculated based on the statutory tax rate of 37.5%). No tax benefit/expense was recorded for the loss/gain on sales of U.S. agencies MBS and U.S. Treasury Notes in the fourth and third 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 fourth and third quarters of 2020 the non-interest expenses to adjusted non-interest expenses, which is a non-GAAP financial measure that excludes the relevant Special Items identified above:

                                                                                
(In thousands)
                Fourth Quarter 2020                Non-Interest Expenses      Non-Interest Expenses          Merger and                 Merger and            COVID-19 Pandemic-         COVID-19 Pandemic-        Adjusted (Non-GAAP)        Adjusted (Non-GAAP)
                                                          (GAAP)                     (GAAP)              Restructuring Costs        Restructuring Costs        Related Expenses           Related Expenses
------------------------------------------------- --------------------- ------------------------------  -------------------- ------------------------------  -------------------- ------------------------------  -------------------- ------------------------------
                                                                                      
Non-interest expenses                                                 $                    $    134,762                    $                    $     12,321                    $                    $      1,125                    $                    $    121,316
   Employees' compensation and benefits                    50,458              -              8         50,450
   Occupancy and equipment                                 24,066              -            961         23,105
   Business promotion                                       3,163              -             38          3,125
   Professional service fees                               17,309              -              1         17,308
   Taxes, other than income taxes                           5,795              -            113          5,682
   Insurance and supervisory fees                           4,620              -              -          4,620
   Net loss on other real estate owned operations             580              -              -            580
   Merger and restrucuring costs                           12,321         12,321              -              -
   Other non-interest expenses                             16,450              -              4         16,446
                                                                                
(In thousands)
                Third Quarter 2020                 Non-Interest Expenses      Non-Interest Expenses          Merger and                 Merger and            COVID-19 Pandemic-         COVID-19 Pandemic-        Adjusted (Non-GAAP)        Adjusted (Non-GAAP)
                                                          (GAAP)                     (GAAP)              Restructuring Costs        Restructuring Costs        Related Expenses           Related Expenses
------------------------------------------------- --------------------- ------------------------------  -------------------- ------------------------------  -------------------- ------------------------------  -------------------- ------------------------------
                                                                                
Non-interest expenses                                                 $                    $    107,508                    $                    $     10,441                    $                    $        962                    $                    $     96,105
   Employees' compensation and benefits                    43,063              -             18         43,045
   Occupancy and equipment                                 19,064              -            768         18,296
   Business promotion                                       3,046              -             71          2,975
   Professional service fees                               11,563              -              2         11,561
   Taxes, other than income taxes                           4,510              -             82          4,428
   Insurance and supervisory fees                           3,019              -              -          3,019
   Net loss on other real estate owned operations           1,019              -              -          1,019
   Merger and restrucuring costs                           10,441         10,441              -              -

Allowance for credit losses - The ACL on loans and finance leases to adjusted total loans held for investment ratio - The following table reconciles the ratio of the ACL on loans and finance leases to adjusted total loans held for investment, excluding SBA PPP loans, as of December 31, 2020 and September 30, 2020:

                                                                                                                                                                                                    
                                     Allowance for credit losses for loans and finance leases to                                     Allowance for credit losses for loans and finance leases to Allowance for credit losses for loans and finance leases to                           Allowance for credit losses for loans and finance leases to
                                             Loans Held for Investment (GAAP to Non-GAAP                                                     Loans Held for Investment (GAAP to Non-GAAP                 Loans Held for Investment (GAAP to Non-GAAP                                           Loans Held for Investment (GAAP to Non-GAAP
                                                           reconciliation)                                                                                 reconciliation)                                             reconciliation)                                                                       reconciliation)
----------------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- -----------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                             
                                                       As of December 31, 2020                                                                         As of December 31, 2020                                     As of December 31, 2020                                                               As of December 31, 2020
----------------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- -----------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                             
(In thousands)                                                                                                                                     Allowance for Credit Losses for                             Allowance for Credit Losses for                         Allowance for Credit Losses for            Loans Held for Investment     Loans Held for Investment
                                                                                                                                                      Loans and Finance Leases                                    Loans and Finance Leases                                Loans and Finance Leases
                                                                                                                                    ----------------------------------------------------------- ----------------------------------------------------------- --------------------------------------------------   ------------------------- --------------------------------
                                                                                                                                                                                                                                             
Allowance for credit losses for loans and finance leases and loans held for investment (GAAP)                                                                                                 $                                                           $                    $    385,887                           $                    $   11,777,289
Less:
   SBA PPP loans                                                                                                                                                                                                                 -                 405,953
Allowance for credit losses for loans and finance leases and adjusted loans held for investment, excluding SBA PPP loans (Non-GAAP)                                                           $                                                           $                    $    385,887                           $                    $   11,371,336
                                                                                                                                    =========================================================== =========================================================== ==================== ========== ==================== ========================= ==================== ============
                                                                                                                                                                                                                                             
Allowance for credit losses for loans and finance leases to loans held for investment (GAAP)                                                                                                                                  3.28                    %
                                                                                                                                    ----------------------------------------------------------- ----------------------------------------------------------- -------------------- ---------- --------------------
Allowance for credit losses for loans and finance leases to adjusted loans held for investment, excluding SBA PPP loans (Non-GAAP)                                                                                            3.39                    %
                                                                                                                                    ----------------------------------------------------------- ----------------------------------------------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                             
                                     Allowance for credit losses for loans and finance leases to                                     Allowance for credit losses for loans and finance leases to Allowance for credit losses for loans and finance leases to                           Allowance for credit losses for loans and finance leases to
                                             Loans Held for Investment (GAAP to Non-GAAP                                                     Loans Held for Investment (GAAP to Non-GAAP                 Loans Held for Investment (GAAP to Non-GAAP                                           Loans Held for Investment (GAAP to Non-GAAP
                                                           reconciliation)                                                                                 reconciliation)                                             reconciliation)                                                                       reconciliation)
----------------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- -----------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                             
                                                      As of September 30, 2020                                                                        As of September 30, 2020                                    As of September 30, 2020                                                              As of September 30, 2020
----------------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- -----------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                             
(In thousands)                                                                                                                                     Allowance for Credit Losses for                             Allowance for Credit Losses for                         Allowance for Credit Losses for            Loans Held for Investment     Loans Held for Investment
                                                                                                                                                      Loans and Finance Leases                                    Loans and Finance Leases                                Loans and Finance Leases
                                                                                                                                    ----------------------------------------------------------- ----------------------------------------------------------- --------------------------------------------------   ------------------------- --------------------------------
                                                                                                                                                                                                                                             
Allowance for credit losses for loans and finance leases and loans held for investment (GAAP)                                                                                                 $                                                           $                    $    384,718                           $                    $   11,847,275
Less:
   SBA PPP loans                                                                                                                                                                                                                 -                 453,358
Allowance for credit losses for loans and finance leases and adjusted loans held for investment, excluding SBA PPP loans (Non-GAAP)                                                           $                                                           $                    $    384,718                           $                    $   11,393,917
                                                                                                                                    =========================================================== =========================================================== ==================== ========== ==================== ========================= ==================== ============
                                                                                                                                                                                                                                             
Allowance for credit losses for loans and finance leases to loans held for investment (GAAP)                                                                                                                                  3.25                    %
                                                                                                                                    ----------------------------------------------------------- ----------------------------------------------------------- -------------------- ---------- --------------------

Adjusted provision for credit losses on loans and finance leases 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 the adjusted provision for credit losses on loans and finance leases to net charge-offs for the year ended December 31, 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                            Provision for credit losses for loans and finance leases Provision for credit losses for loans and finance leases                          Provision for credit losses for loans and finance leases
                                      to Net Charge-Offs (GAAP to Non-GAAP                                                to Net Charge-Offs (GAAP to Non-GAAP                     to Net Charge-Offs (GAAP to Non-GAAP                                              to Net Charge-Offs (GAAP to Non-GAAP
                                                 reconciliation)                                                                     reconciliation)                                          reconciliation)                                                                   reconciliation)
--------------------------------------------------------------------------------------------------------------- -------------------------------------------------------- -------------------------------------------------------- ----------------------------------------------------------------------------------------------------
                                                                                                                                                                                                              
                                          Year Ended December 31, 2019                                                        Year Ended December 31, 2019                             Year Ended December 31, 2019                                                      Year Ended December 31, 2019
--------------------------------------------------------------------------------------------------------------- -------------------------------------------------------- -------------------------------------------------------- ----------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                              
(In thousands)                                                                                                               Provision for Credit Losses for                          Provision for Credit Losses for                        Provision for Credit Losses for              Net Charge-Offs            Net Charge-Offs
                                                                                                                                Loans and Finance Leases                                 Loans and Finance Leases                               Loans and Finance Leases
                                                                                                                -------------------------------------------------------- -------------------------------------------------------- --------------------------------------------------   -------------------- ------------------------------
                                                                                                                                                                                                              
Provision for credit losses for loans and finance leases and net charge-offs (GAAP)                                                                                    $                                                        $                    $     40,225                      $                    $     81,448
Less Special Item:
   Hurricane-related qualitative reserve release                                                                                                                                                   6,425                -
Provision for credit losses for loans and finance leases and net charge-offs, excluding special item (Non-GAAP)                                                        $                                                        $                    $     46,650                      $                    $     81,448
                                                                                                                ======================================================== ======================================================== ==================== ========== ==================== ==================== ==================== ==========
                                                                                                                                                                                                              
Provision for credit losses for loans and finance leases to net charge-offs (GAAP)                                                                                                                 49.39                    %
                                                                                                                -------------------------------------------------------- -------------------------------------------------------- -------------------- ---------- --------------------

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                                                                     As of                                                                                                          As of
------------------------------------------------------------------------------------------------------------------------------- -------------------- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          December 31,                                                              December 31,                         December 31,                         September 30,                        September 30,                        December 31,                         December 31,
(In thousands, except for share information)                                                                                            2020                                                                      2020                                                                      2019
                                                                                                                                                                               2020                                                                      2020                                                                      2019
                                                                                                                                -------------------- --------------------------------------------------   -------------------- --------------------------------------------------   -------------------- --------------------------------------------------
ASSETS
                                                                                                                                                                                        
Cash and due from banks                                                                                                                            $                    $  1,433,261                      $                    $  2,360,524                      $                    $    546,391  
                                                                                                                                -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                        
Money market investments:
Time deposits with other financial institutions                                                                                            300              300              300  
Other short-term investments                                                                                                            60,272          108,683           97,408  
                                                                                                                                -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
   Total money market investments                                                                                                       60,572          108,983           97,708  
                                                                                                                                -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                        
Investment securities available for sale, at fair value (allowance for credit losses of $1,310 as of December 31, 2020;
   $1,386 as of September 30, 2020)                                                                                                  4,647,019        3,294,649        2,123,525  
                                                                                                                                                                                        
Investment securities held to maturity, at amortized cost, net of allowance for credit losses of $8,845 as of December 31, 2020
   and $10,176 as of September 30, 2020                                                                                                180,643          178,980          138,675  
                                                                                                                                                                                        
Equity securities                                                                                                                       37,588           39,290           38,249  
                                                                                                                                -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                        
   Total investment securities                                                                                                       4,865,250        3,512,919        2,300,449  
                                                                                                                                -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
Loans, net of allowance for credit losses of $385,887
   (September 30, 2020 - $384,718; December 31, 2019 - $155,139)                                                                    11,391,402       11,462,557        8,847,066  
Loans held for sale, at lower of cost or market                                                                                         50,289           48,670           39,477  
                                                                                                                                -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
   Total loans, net                                                                                                                 11,441,691       11,511,227        8,886,543  
                                                                                                                                -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                        
Premises and equipment, net                                                                                                            158,209          159,772          149,989  
Other real estate owned                                                                                                                 83,060           89,049          101,626  
Accrued interest receivable on loans and investments                                                                                    69,505           77,240           50,205  
Deferred tax asset, net                                                                                                                329,261          347,543          264,842  
Goodwill                                                                                                                                38,632           34,401           28,098  
Intangible assets                                                                                                                       40,893           43,893            7,573  
Other assets                                                                                                                           272,737          414,217          177,842  
                                                                                                                                -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
   Total assets                                                                                                                                    $                    $ 18,793,071                      $                    $ 18,659,768                      $                    $ 12,611,266  
                                                                                                                                ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ====================
                                                                                                                                                                                        
LIABILITIES
                                                                                                                                                                                        
Deposits:
Non-interest-bearing deposits                                                                                                                      $                    $  4,546,123                      $                    $  4,467,041                      $                    $  2,367,856  
Interest-bearing deposits                                                                                                           10,771,260       10,735,857        6,980,573  
                                                                                                                                -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
   Total deposits                                                                                                                   15,317,383       15,202,898        9,348,429  
                                                                                                                                -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
Securities sold under agreements to repurchase                                                                                         300,000          300,000          100,000  
Advances from the Federal Home Loan Bank (FHLB)                                                                                        440,000          490,000          570,000  
Other borrowings                                                                                                                       183,762          183,762          184,150  
Accounts payable and other liabilities                                                                                                 276,747          257,826          180,614  
                                                                                                                                -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
   Total liabilities                                                                                                                16,517,892       16,434,486       10,383,193  
                                                                                                                                -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                        
STOCKHOLDERS' EQUITY
                                                                                                                                                                                        
Preferred Stock, authorized 50,000,000 shares; issued 22,828,174 shares;
   outstanding 1,444,146 shares; aggregate liquidation value of $36,104                                                                 36,104           36,104           36,104  
                                                                                                                                -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                        
Common stock, $0.10 par value, authorized 2,000,000,000 shares; issued, 223,034,348 shares
   (September 30, 2020 - 223,028,185 shares issued; December 31, 2019 - 222,103,721 shares issued)                                      22,303           22,303           22,210  
Less: Treasury stock (at par value)                                                                                                       (480 )                              (480 )                              (474 )
                                                                                                                                -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                        
Common stock outstanding, 218,235,064 shares outstanding
   (September 30, 2020 - 218,228,901 shares outstanding; December 31, 2019 - 217,359,337 shares outstanding)                            21,823           21,823           21,736  
                                                                                                                                -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
Additional paid-in capital                                                                                                             946,476          945,213          941,652  
Retained earnings                                                                                                                    1,215,321        1,176,815        1,221,817  
Accumulated other comprehensive income                                                                                                  55,455           45,327            6,764  
                                                                                                                                -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
   Total stockholders' equity                                                                                                        2,275,179        2,225,282        2,228,073  
                                                                                                                                -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
   Total liabilities and stockholders' equity                                                                                                      $                    $ 18,793,071                      $                    $ 18,659,768                      $                    $ 12,611,266  
                                                                                                                                ==================== ==================== ========== ==================== ==================== ==================== ========== ==================== ==================== ==================== ========== ====================
                                                                                                                                                                                                                  FIRST BANCORP
                                                                                                                                                                                                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                                                                                                                                                                                            
                      Quarter Ended                          Quarter Ended                                                                                              Quarter Ended                                                                                              Year Ended                                                                        Year Ended
-------------------------------------------------------- -------------------- -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------------------------
                      December 31,                           December 31,                        December 31,                       September 30,                       September 30,                      December 31,                        December 31,                       December 31,                        December 31,                       December 31,                        December 31,
(In thousands, except per share information)                     2020                                2020                               2020                                2020                               2019                                2019                               2020                                2020                               2019                                2019
                                                         -------------------- -----------------------------------------------   -------------------- -----------------------------------------------   -------------------- -----------------------------------------------   -------------------- -----------------------------------------------   -------------------- -----------------------------------------------
                                                                                                                                                                                                            
Net interest income:
Interest income                                                             $                    $ 198,700                      $                    $ 170,402                      $                    $ 167,620                      $                    $ 692,982                      $                    $ 675,897  
Interest expense                                              20,933        21,706        27,691        92,660       108,816  
                                                         -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
   Net interest income                                       177,767       148,696       139,929       600,322       567,081  
Provision for credit losses:
   Loans                                                      10,186        48,078         8,473       168,717        40,225  
   Unfunded loan commitments                                  (1,176 )                           (803 )                              -         1,183          (412 )
   Debt securities                                            (1,319 )                           (361 )                              -         1,085             -  
                                                         -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
      Provision for credit losses                              7,691        46,914         8,473       170,985        39,813  
                                                         -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
   Net interest income after provision for credit losses     170,076       101,782       131,456       429,337       527,268  
                                                         -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
                                                                                                                                                                                                            
Non-interest income:
Service charges on deposit accounts                            8,332         5,848         6,205        24,612        23,916  
Mortgage banking activities                                    7,551         7,099         4,640        22,124        17,058  
Net (loss) gain on investments                                  (182 )                          5,288             -        13,198          (497 )
Gain on early extinguishment of debt                               -            94             -            94             -  
Other non-interest income                                     14,499        11,605        13,560        51,198        50,095  
                                                         -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
   Total non-interest income                                  30,200        29,934        24,405       111,226        90,572  
                                                         -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
                                                                                                                                                                                                            
Non-interest expenses:
Employees' compensation and benefits                          50,458        43,063        40,856       175,912       162,374  
Occupancy and equipment                                       24,066        19,064        16,151        74,633        63,169  
Business promotion                                             3,163         3,046         4,060        12,145        15,710  
Professional service fees                                     17,309        11,563        12,033        52,633        45,889  
Taxes, other than income taxes                                 5,795         4,510         3,864        17,762        15,325  
Insurance and supervisory fees                                 4,620         3,019         2,593        12,813         9,915  
Net loss on other real estate owned operations                   580         1,019         3,280         3,598        14,644  
Merger and restructuring costs                                12,321        10,441        10,850        26,509        11,442  
Other non-interest expenses                                   16,450        11,783         8,627        48,235        40,000  
                                                         -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
   Total non-interest expenses                               134,762       107,508       102,314       424,240       378,468  
                                                         -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
                                                                                                                                                                                                            
Income before income taxes                                    65,514        24,208        53,547       116,323       239,372  
Income tax (expense) benefit                                 (15,376 )                          4,405       (17,098 )                        (14,050 )                        (71,995 )
                                                         -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
                                                                                                                                                                                                            
Net income                                                                  $                    $  50,138                      $                    $  28,613                      $                    $  36,449                      $                    $ 102,273                      $                    $ 167,377  
                                                         ==================== ==================== ======= ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                                            
Net income attributable to common stockholders                              $                    $  49,469                      $                    $  27,944                      $                    $  35,780                      $                    $  99,597                      $                    $ 164,701  
                                                         ==================== ==================== ======= ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                                            
Earnings per common share:
                                                                                                                                                                                                            
   Basic                                                                    $                    $    0.23                      $                    $    0.13                      $                    $    0.17                      $                    $    0.46                      $                    $    0.76  
                                                         ==================== ==================== ======= ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ====================

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 share amounts and financial ratios)                                                                                                                              Quarter Ended                                                                                     Year Ended                                                             Year Ended
                                                                                                          -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------
                                               December 31,                                                                  December 31,                       September 30,              September 30,             December 31,                        December 31,                       December 31,                        December 31,                       December 31,                        December 31,
                                                   2020                                                                          2020                               2020                       2020                      2019                                2019                               2020                                2020                               2019                                2019
--------------------------------------------------------------------------------------------------------- -----------------------------------------------   -------------------- ------------------------------  -------------------- -----------------------------------------------   -------------------- -----------------------------------------------   -------------------- -----------------------------------------------
Condensed Income Statements:
   Total interest income                                                                                                     $ 198,700                      $                    $    170,402                    $                    $ 167,620                      $                    $ 692,982                      $                    $ 675,897  
   Total interest expense                                                                                    20,933           21,706      27,691        92,660       108,816  
   Net interest income                                                                                      177,767          148,696     139,929       600,322       567,081  
   Provision for credit losses                                                                                7,691           46,914       8,473       170,985        39,813  
   Non-interest income                                                                                       30,200           29,934      24,405       111,226        90,572  
   Non-interest expenses                                                                                    134,762          107,508     102,314       424,240       378,468  
   Income before income taxes                                                                                65,514           24,208      53,547       116,323       239,372  
   Income tax (expense) benefit                                                                             (15,376 )                             4,405     (17,098 )                        (14,050 )                        (71,995 )
   Net income                                                                                                50,138           28,613      36,449       102,273       167,377  
   Net income attributable to common stockholders                                                            49,469           27,944      35,780        99,597       164,701  
                                                                                                                                                                                                          
                                                                                                                                                                                                          
Per Common Share Results:
   Net earnings per share - basic                                                                                            $    0.23                      $                    $       0.13                    $                    $    0.17                      $                    $    0.46                      $                    $    0.76  
   Net earnings per share - diluted                                                                                          $    0.23                      $                    $       0.13                    $                    $    0.16                      $                    $    0.46                      $                    $    0.76  
   Cash dividends declared                                                                                                   $    0.05                      $                    $       0.05                    $                    $    0.05                      $                    $    0.20                      $                    $    0.14  
   Average shares outstanding                                                                               216,987          216,922     216,750       216,904       216,614  
   Average shares outstanding diluted                                                                       218,071          217,715     217,379       217,668       217,134  
   Book value per common share                                                                                               $   10.26                      $                    $      10.03                    $                    $   10.08                      $                    $   10.26                      $                    $   10.08  
   Tangible book value per common share (1)                                                                                  $    9.90                      $                    $       9.67                    $                    $    9.92                      $                    $    9.90                      $                    $    9.92  
                                                                                                                                                                                                                                       
Selected Financial Ratios (In Percent):
                                                                                                                                                                                                          
Profitability:
   Return on Average Assets                                                                                    1.06             0.72        1.15          0.67          1.34  
   Interest Rate Spread (2)                                                                                    3.82             3.75        4.40          3.95          4.55  
   Net Interest Margin (2)                                                                                     4.07             4.07        4.87          4.29          5.02  
   Return on Average Total Equity                                                                              8.91             5.07        6.48          4.59          7.75  
   Return on Average Common Equity                                                                             8.93             5.03        6.59          4.54          7.88  
   Average Total Equity to Average Total Assets                                                               11.95            14.22       17.73         14.64         17.35  
   Total capital                                                                                              20.37            20.32       25.22         20.37         25.22  
   Common equity Tier 1 capital                                                                               17.31            17.21       21.60         17.31         21.60  
   Tier 1 capital                                                                                             17.61            17.52       22.00         17.61         22.00  
   Leverage                                                                                                   11.26            13.04       16.15         11.26         16.15  
   Tangible common equity ratio (1)                                                                           11.54            11.36       17.15         11.54         17.15  
   Dividend payout ratio                                                                                      21.93            38.81       30.29         43.56         18.41  
   Efficiency ratio (3)                                                                                       64.80            60.18       62.26         59.62         57.55  
                                                                                                                                                                                                          
Asset Quality:
   Allowance for credit losses on loans and finance leases to loans held for investment                        3.28             3.25        1.72          3.28          1.72  
   Net charge-offs (annualized) to average loans                                                               0.30             0.45        0.84          0.48          0.91  
   Provision for credit losses for loans and finance leases to net charge-offs (4)                           112.96           421.70       44.81        352.39         49.39  
   Non-performing assets to total assets                                                                       1.56             1.57        2.52          1.56          2.52  
   Nonaccrual loans held for investment to total loans held for investment                                     1.74             1.70        2.34          1.74          2.34  
   Allowance for credit losses on loans and finance leases to total nonaccrual loans held for investment     188.16           191.13       73.64        188.16         73.64  
   Allowance for credit losses on loans and finance leases to total nonaccrual loans held for investment,
      excluding residential real estate loans                                                                484.04           490.13      173.81        484.04        173.81  
                                                                                                                                                                                                          
Other Information:
   Common Stock Price: End of period                                                                                         $    9.22                      $                    $       5.22                    $                    $   10.59                      $                    $    9.22                      $                    $   10.59  
1-
    Non-GAAP financial measure. See page 20 for GAAP to Non-GAAP reconciliations.
2-
    On a tax-equivalent basis and excluding changes in the fair value of derivative instruments (Non-GAAP financial measure). See page 25 for GAAP to Non-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-interest income. The denominator includes non-recurring income and changes in the fair value of derivative instruments.
 
Table 2 - Quarterly Statement of Average Interest-Earning Assets and Average Interest-Bearing Liabilities (On a Tax-Equivalent Basis)
                                                                                                                                     
(Dollars in thousands)
               Average volume                                                                             Average volume                                                               Interest income (1) / expense                                       Interest income (1) / expense                                              Average rate (1)          Average rate (1)                                               Average rate (1)
------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------
                December 31,                          December 31,              September 30,              September 30,             December 31,               December 31,                   December 31,                   December 31,              September 30,              September 30,             December 31,               December 31,              December 31,         December 31,         September 30,        September 30,        December 31,         December 31,
Quarter ended                                             2020                      2020                       2020                      2019                       2019                           2020                           2020                      2020                       2020                      2019                       2019                      2020                 2020                 2020                 2020                 2019                 2019
                                            ------------------------------  -------------------- ------------------------------  -------------------- ------------------------------  ----------------------------- ------------------------------  -------------------- ------------------------------  -------------------- ------------------------------  -------------------- -------------------  -------------------- -------------------  -------------------- -------------------
                                                                                                                                     
Interest-earning assets:
Money market & other short-term investments                    $  1,732,372                    $                    $  1,450,669                    $                    $    748,672                             $                    $        438                    $                    $        405                    $                    $      3,042                 0.10       0.10         %                 0.11       0.11         %                 1.61       1.61         %
Government obligations (2)                     1,159,053      1,129,976        462,015                   5,768          4,890          4,818                 1.98       1.98         %                 1.72       1.72         %                 4.14       4.14         %
Mortgage-backed securities                     3,127,296      2,253,121      1,613,488                  10,809         11,525         12,736                 1.38       1.38         %                 2.03       2.03         %                 3.13       3.13         %
FHLB stock                                        31,937         31,635         37,256                     432            441            669                 5.38       5.38         %                 5.55       5.55         %                 7.12       7.12         %
Other investments                                  6,702          6,309          4,099                      10             10             12                 0.59       0.59         %                 0.63       0.63         %                 1.16       1.16         %
                                            -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- ----------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
Total investments (3)                          6,057,360      4,871,710      2,865,530                  17,457         17,271         21,277                 1.15       1.15         %                 1.41       1.41         %                 2.95       2.95         %
                                            -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- ----------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
Residential mortgage loans                     3,615,018      3,117,021      2,960,727                  47,975         41,577         39,884                 5.28       5.28         %                 5.31       5.31         %                 5.34       5.34         %
Construction loans                               198,377        185,359        108,082                   2,575          2,453          1,722                 5.16       5.16         %                 5.26       5.26         %                 6.32       6.32         %
C&I and commercial mortgage loans              5,444,469      4,468,614      3,644,319                  68,201         51,902         50,049                 4.98       4.98         %                 4.62       4.62         %                 5.45       5.45         %
Finance leases                                   463,973        447,854        400,645                   8,500          8,349          7,680                 7.29       7.29         %                 7.42       7.42         %                 7.61       7.61         %
Consumer loans                                 2,121,320      1,944,823      1,838,436                  59,291         53,796         52,058                11.12      11.12         %                11.00      11.00         %                11.23      11.23         %
                                            -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- ----------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
Total loans (4) (5)                           11,843,157     10,163,671      8,952,209                 186,542        158,077        151,393                 6.27       6.27         %                 6.19       6.19         %                 6.71       6.71         %
                                            -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- ----------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
Total interest-earning assets                                  $ 17,900,517                    $                    $ 15,035,381                    $                    $ 11,817,739                             $                    $    203,999                    $                    $    175,348                    $                    $    172,670                 4.53       4.53         %                 4.64       4.64         %                 5.80       5.80         %
                                            ==================== ========== ==================== ==================== ========== ==================== ==================== ========== ============================= ==================== ========== ==================== ==================== ========== ==================== ==================== ==========
                                                                                                                                     
Interest-bearing liabilities:
Brokered CDs                                                   $    253,508                    $                    $    332,429                    $                    $    468,715                             $                    $      1,417                    $                    $      1,850                    $                    $      2,724                 2.22       2.22         %                 2.21       2.21         %                 2.31       2.31         %
Other interest-bearing deposits               10,511,135      8,412,342      6,450,902                  14,232         14,238         18,122                 0.54       0.54         %                 0.67       0.67         %                 1.11       1.11         %
Other borrowed funds                             483,762        493,572        284,476                   2,689          2,840          3,372                 2.21       2.21         %                 2.29       2.29         %                 4.70       4.70         %
FHLB advances                                    455,761        494,348        641,011                   2,595          2,778          3,473                 2.27       2.27         %                 2.24       2.24         %                 2.15       2.15         %
                                            -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- ----------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
Total interest-bearing liabilities                             $ 11,704,166                    $                    $  9,732,691                    $                    $  7,845,104                             $                    $     20,933                    $                    $     21,706                    $                    $     27,691                 0.71       0.71         %                 0.89       0.89         %                 1.40       1.40         %
                                            ==================== ========== ==================== ==================== ========== ==================== ==================== ========== ============================= ==================== ========== ==================== ==================== ========== ==================== ==================== ==========
Net interest income                                                       $                    $                               $                    $                               $                             $                    $    183,066                    $                    $    153,642                    $                    $    144,979
                                            ==============================  ==================== ==============================  ==================== ==============================  ============================= ==================== ========== ==================== ==================== ========== ==================== ==================== ==========
Interest rate spread                                                   3.82                 3.82                            3.82                 3.82                            3.82                          3.82                            3.82                 3.82                            3.82                 3.82                            3.82                 3.82       3.82         %                 3.75       3.75         %                 4.40       4.40         %
Net interest margin                                                    4.07                 4.07                            4.07                 4.07                            4.07                          4.07                            4.07                 4.07                            4.07                 4.07                            4.07                 4.07       4.07         %                 4.07       4.07         %                 4.87       4.87         %
1-
    On a tax-equivalent basis. The tax-equivalent yield was estimated by dividing the interest rate spread on exempt assets by 1 less the Puerto Rico statutory tax rate of 37.5% and adding to it the cost of interest-bearing liabilities. When adjusted to a tax-equivalent basis, yields on taxable and exempt assets are comparable. Changes in the fair value of derivative instruments are excluded from interest income because the changes in valuation do not affect interest paid or received. See page 25 for GAAP to Non-GAAP reconciliations.
2-
    Government obligations include debt issued by government-sponsored agencies.
3-
    Unrealized gains and losses on available-for-sale securities are excluded from the average volumes.
4-
    Average loan balances include the average of non-performing loans.
 
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                                                  Average volume                                     Interest income (1) / expense                            Interest income (1) / expense                              Average rate (1)                                Average rate (1)
------------------------------------------- ------------------------------------------------------------------------------------------------------------------ --------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------
                December 31,                          December 31,              December 31,               December 31,                   December 31,                   December 31,              December 31,               December 31,              December 31,         December 31,         December 31,               December 31,
Year Ended                                                2020                      2019                       2019                           2020                           2020                      2019                       2019                      2020                 2020                 2019                       2019
                                            ------------------------------  -------------------- ------------------------------  ----------------------------- ------------------------------  -------------------- ------------------------------  -------------------- -------------------  -------------------- ------------------------------
                                                                                                         
Interest-earning assets:
Money market & other short-term investments                    $  1,258,683                    $                    $    649,065                             $                    $      3,388                    $                    $     13,392                 0.27       0.27         %                 2.06       2.06                    %
Government obligations (2)                       878,537        632,959                  21,222         26,300                 2.42       2.42         %                 4.16       4.16                    %
Mortgage-backed securities                     2,236,262      1,382,589                  48,683         44,769                 2.18       2.18         %                 3.24       3.24                    %
FHLB stock                                        32,160         40,661                   1,959          2,682                 6.09       6.09         %                 6.60       6.60                    %
Other investments                                  6,238          3,403                      41             32                 0.66       0.66         %                 0.94       0.94                    %
                                            -------------------- ---------- -------------------- -------------------- ---------- ----------------------------- -------------------- ---------- -------------------- -------------------- ----------
Total investments (3)                          4,411,880      2,708,677                  75,293         87,175                 1.71       1.71         %                 3.22       3.22                    %
                                            -------------------- ---------- -------------------- -------------------- ---------- ----------------------------- -------------------- ---------- -------------------- -------------------- ----------
Residential mortgage loans                     3,119,400      3,043,672                 166,019        163,663                 5.32       5.32         %                 5.38       5.38                    %
Construction loans                               168,967         97,605                   9,094          6,253                 5.38       5.38         %                 6.41       6.41                    %
C&I and commercial mortgage loans              4,387,419      3,731,499                 214,830        213,567                 4.90       4.90         %                 5.72       5.72                    %
Finance leases                                   440,796        370,566                  32,515         27,993                 7.38       7.38         %                 7.55       7.55                    %
Consumer loans                                 1,952,120      1,738,745                 216,263        197,517                11.08      11.08         %                11.36      11.36                    %
                                            -------------------- ---------- -------------------- -------------------- ---------- ----------------------------- -------------------- ---------- -------------------- -------------------- ----------
Total loans (4) (5)                           10,068,702      8,982,087                 638,721        608,993                 6.34       6.34         %                 6.78       6.78                    %
                                            -------------------- ---------- -------------------- -------------------- ---------- ----------------------------- -------------------- ---------- -------------------- -------------------- ----------
Total interest-earning assets                                  $ 14,480,582                    $                    $ 11,690,764                             $                    $    714,014                    $                    $    696,168                 4.93       4.93         %                 5.95       5.95                    %
                                            ==================== ========== ==================== ==================== ========== ============================= ==================== ========== ==================== ==================== ==========
                                                                                                   
Interest-bearing liabilities:
Brokered CDs                                                   $    357,965                    $                    $    500,766                             $                    $      7,989                    $                    $     11,036                 2.23       2.23         %                 2.20       2.20                    %
Other interest-bearing deposits                8,130,111      6,238,255                  60,399         66,746                 0.74       0.74         %                 1.07       1.07                    %
Loans payable                                      8,415              -                      21              -                 0.25       0.25         %                    -          -  
Other borrowed funds                             475,492        294,798                  13,000         16,071                 2.73       2.73         %                 5.45       5.45                    %
FHLB advances                                    505,478        715,433                  11,251         14,963                 2.23       2.23         %                 2.09       2.09                    %
                                            -------------------- ---------- -------------------- -------------------- ---------- ----------------------------- -------------------- ---------- -------------------- -------------------- ----------
Total interest-bearing liabilities                             $  9,477,461                    $                    $  7,749,252                             $                    $     92,660                    $                    $    108,816                 0.98       0.98         %                 1.40       1.40                    %
                                            ==================== ========== ==================== ==================== ========== ============================= ==================== ========== ==================== ==================== ==========
Net interest income                                                       $                    $                               $                             $                    $    621,354                    $                    $    587,352
                                            ==============================  ==================== ==============================  ============================= ==================== ========== ==================== ==================== ==========
Interest rate spread                                                   3.95                 3.95                            3.95                          3.95                            3.95                 3.95                            3.95                 3.95       3.95         %                 4.55       4.55                    %
1-
    On a tax-equivalent basis. The tax-equivalent yield was estimated by dividing the interest rate spread on exempt assets by 1 less the Puerto Rico statutory tax rate of 37.5% and adding to it the cost of interest-bearing liabilities. When adjusted to a tax-equivalent basis, yields on taxable and exempt assets are comparable. Changes in the fair value of derivative instruments are excluded from interest income because the changes in valuation do not affect interest paid or received. See page 25 for GAAP to Non-GAAP reconciliation.
2-
    Government obligations include debt issued by government-sponsored agencies.
3-
    Unrealized gains and losses on available-for-sale securities are excluded from the average volumes.
4-
    Average loan balances include the average of non-performing loans.
                                                                                                                  
Table 4 - Non-Interest Income
                                                                                                                  
                            Quarter Ended                               Quarter Ended                                                                           Quarter Ended                                                                            Year Ended                                                    Year Ended
------------------------------------------------------------------- -------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------
                            December 31,                                December 31,                       December 31,                       September 30,              September 30,             December 31,               December 31,              December 31,               December 31,              December 31,                       December 31,
(In thousands)                                                              2020                               2020                               2020                       2020                      2019                       2019                      2020                       2020                      2019                               2019
                                                                    -------------------- ----------------------------------------------   -------------------- ------------------------------  -------------------- ------------------------------  -------------------- ------------------------------  -------------------- ----------------------------------------------
                                                                                                                                 
   Service charges on deposit accounts                                                 $                    $  8,332                      $                    $      5,848                    $                    $      6,205                    $                    $     24,612                    $                    $ 23,916  
   Mortgage banking activities                                           7,551            7,099          4,640         22,124     17,058  
   Insurance income                                                      1,928            1,473          1,928          9,364     10,186  
   Other operating income                                               12,571           10,132         11,632         41,834     39,909  
                                                                    -------------------- -------------------- ------ -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ------ --------------------
                                                                                                                                                             
                                                                                                                                                             
   Non-interest income before net gain on
      sales of investments and gain on early extinguishment of debt     30,382           24,552         24,405         97,934     91,069  
                                                                    -------------------- -------------------- ------ -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ------ --------------------
                                                                                                                                                             
   Net (loss) gain on sales of investments                                (182                    )          5,288              -         13,198          -  
   OTTI on debt securities                                                   -                -              -              -       (497                    )
                                                                    -------------------- -------------------- ------ -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ------ --------------------
   Net (loss) gain on investments                                         (182                    )          5,288              -         13,198       (497                    )
                                                                    -------------------- -------------------- ------ -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ------ --------------------
                                                                                                                                                             
   Gain on early extinguishment of debt                                      -               94              -             94          -  
                                                                    -------------------- -------------------- ------ -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ------ --------------------
                                                                  $                    $                    $ 30,200                      $                    $     29,934                    $                    $     24,405                    $                    $    111,226                    $                    $ 90,572  
=================================================================== ==================== ==================== ====== ==================== ==================== ==================== ========== ==================== ==================== ========== ==================== ==================== ========== ==================== ==================== ====== ====================
                                                                                                                                                                     
Table 5 - Non-Interest Expenses
                                                                                                                                                                     
                        Quarter Ended                           Quarter Ended                                                                   Quarter Ended                                                                   Year Ended                                           Year Ended
----------------------------------------------------------- -------------------- -------------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------
                        December 31,                            December 31,               December 31,              September 30,              September 30,             December 31,               December 31,              December 31,               December 31,              December 31,               December 31,
(In thousands)                                                      2020                       2020                      2020                       2020                      2019                       2019                      2020                       2020                      2019                       2019
                                                            -------------------- ------------------------------  -------------------- ------------------------------  -------------------- ------------------------------  -------------------- ------------------------------  -------------------- ------------------------------
                                                                                                        
   Employees' compensation and benefits                                        $                    $     50,458                    $                    $     43,063                    $                    $     40,856                    $                    $    175,912                    $                    $    162,374
   Occupancy and equipment                                          24,066         19,064         16,151         74,633         63,169
   Deposit insurance premium                                         1,900          1,630          1,674          6,488          6,319
   Other insurance and supervisory fees                              2,720          1,389            919          6,325          3,596
   Taxes, other than income taxes                                    5,795          4,510          3,864         17,762         15,325
      Collections, appraisals and other credit related fees          1,218          1,262          2,345          5,563          7,805
      Outsourcing technology services                               12,524          6,949          6,036         33,974         23,560
      Other professional fees                                        3,567          3,352          3,652         13,096         14,524
   Credit and debit card processing expenses                         6,397          4,859          3,734         19,144         16,472
   Business promotion                                                3,163          3,046          4,060         12,145         15,710
   Communications                                                    2,462          2,246          1,591          8,437          6,891
   Net loss on OREO operations                                         580          1,019          3,280          3,598         14,644
   Merger and restructuring costs                                   12,321         10,441         10,850         26,509         11,442
   Other                                                             7,591          4,678          3,302         20,654         16,637
                                                            -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
   Total                                                                       $                    $    134,762                    $                    $    107,508                    $                    $    102,314                    $                    $    424,240                    $                    $    378,468
                                                            ==================== ==================== ========== ==================== ==================== ========== ==================== ==================== ========== ==================== ==================== ========== ==================== ==================== ==========
                                                                                  
Table 6 - Selected Balance Sheet Data
                                                                                  
(In thousands)                                                                                            As of                                                                           As of
                                                                                                  -------------------- ------------------------------------------------------------------------------------------------------------------------------------------
                                           December 31,                                               December 31,               December 31,              September 30,              September 30,             December 31,               December 31,
                                               2020                                                       2020                       2020                      2020                       2020                      2019                       2019
------------------------------------------------------------------------------------------------- -------------------- ------------------------------  -------------------- ------------------------------  -------------------- ------------------------------
Balance Sheet Data:
   Loans, including loans held for sale                                                                              $                    $ 11,827,578                    $                    $ 11,895,945                    $                    $  9,041,682
   Allowance for credit losses for loans and finance leases                                              385,887        384,718        155,139
   Money market and investment securities, net of allowance for credit losses for debt securities      4,925,822      3,621,902      2,398,157
   Intangible assets                                                                                      79,525         78,294         35,671
   Deferred tax asset, net                                                                               329,261        347,543        264,842
   Total assets                                                                                       18,793,071     18,659,768     12,611,266
   Deposits                                                                                           15,317,383     15,202,898      9,348,429
   Borrowings                                                                                            923,762        973,762        854,150
   Total preferred equity                                                                                 36,104         36,104         36,104
   Total common equity                                                                                 2,183,620      2,143,851      2,185,205
   Accumulated other comprehensive income, net of tax                                                     55,455         45,327          6,764
   Total equity                                                                                        2,275,179      2,225,282      2,228,073
Table 7 - Loan Portfolio
Composition of the loan portfolio including loans held for sale, at period-end.
                   
(In thousands)                             As of                                                                           As of
                                   -------------------- ------------------------------------------------------------------------------------------------------------------------------------------
           December 31,                December 31,               December 31,              September 30,              September 30,             December 31,               December 31,
               2020                        2020                       2020                      2020                       2020                      2019                       2019
---------------------------------- -------------------- ------------------------------  -------------------- ------------------------------  -------------------- ------------------------------
                                                       
Residential mortgage loans                            $                    $  3,521,954                    $                    $  3,636,713                    $                    $  2,933,773
                                   -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
                                                 
Commercial loans:
   Construction loans                     212,500        191,356        111,317
   Commercial mortgage loans            2,230,602      2,220,277      1,444,586
   Commercial and Industrial loans      3,202,590      3,226,843      2,230,876
Commercial loans                        5,645,692      5,638,476      3,786,779
                                   -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
                                                 
Finance leases                            472,989        458,381        414,532
                                   -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
                                                 
Consumer loans                          2,136,654      2,113,705      1,867,121
                                   -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
   Loans held for investment           11,777,289     11,847,275      9,002,205
Loans held for sale                        50,289         48,670         39,477
                                   -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
Total loans                                           $                    $ 11,827,578                    $                    $ 11,895,945                    $                    $  9,041,682
                                   ==================== ==================== ========== ==================== ==================== ========== ==================== ==================== ==========
                       
Table 8 - Loan Portfolio by Geography
                       
(In thousands)                      As of December 31, 2020                                                                                     As of December 31, 2020
                                   ------------------------ -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
            Puerto Rico                   Puerto Rico                  Puerto Rico             Virgin Islands             Virgin Islands             United States              United States             Consolidated               Consolidated
---------------------------------- ------------------------ ---------------------------------------------------- ---------------------------------------------------- ---------------------------------------------------- --------------------------------
                                                                          
Residential mortgage loans                                $                    $  2,788,827                    $                    $    213,376                    $                    $    519,751                    $                    $  3,521,954
                                   ------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
                                                                               
Commercial loans:
   Construction loans                          73,619         11,397        127,484        212,500
   Commercial mortgage loans                1,793,095         60,129        377,378      2,230,602
   Commercial and Industrial loans          2,135,291        129,440        937,859      3,202,590
Commercial loans                            4,002,005        200,966      1,442,721      5,645,692
                                   ------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
                                                                               
Finance leases                                472,989              -              -        472,989
                                   ------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
                                                                               
Consumer loans                              2,058,217         51,726         26,711      2,136,654
                                   ------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
   Loans held for investment                9,322,038        466,068      1,989,183     11,777,289
                                                                               
Loans held for sale                            44,994            681          4,614         50,289
                                   ------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
      Total loans                                         $                    $  9,367,032                    $                    $    466,749                    $                    $  1,993,797                    $                    $ 11,827,578
                                   ======================== ==================== ========== ==================== ==================== ========== ==================== ==================== ========== ==================== ==================== ==========
                                                                    
                                                                    
(In thousands)                     As of September 30, 2020                                                                                    As of September 30, 2020
                                   ------------------------ -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
            Puerto Rico                   Puerto Rico                  Puerto Rico             Virgin Islands             Virgin Islands             United States              United States             Consolidated               Consolidated
---------------------------------- ------------------------ ---------------------------------------------------- ---------------------------------------------------- ---------------------------------------------------- --------------------------------
                                                                          
Residential mortgage loans                                $                    $  2,881,533                    $                    $    218,826                    $                    $    536,354                    $                    $  3,636,713
                                   ------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
                                                                               
Commercial loans:
   Construction loans                          58,555         11,451        121,350        191,356
   Commercial mortgage loans                1,772,648         61,633        385,996      2,220,277
   Commercial and Industrial loans          2,154,786        132,809        939,248      3,226,843
Commercial loans                            3,985,989        205,893      1,446,594      5,638,476
                                   ------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
                                                                               
Finance leases                                458,381              -              -        458,381
                                   ------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
                                                                               
Consumer loans                              2,032,421         51,158         30,126      2,113,705
                                   ------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
   Loans held for investment                9,358,324        475,877      2,013,074     11,847,275
                                                                               
Loans held for sale                            39,958              -          8,712         48,670
                                   ------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
      Total loans                                         $                    $  9,398,282                    $                    $    475,877                    $                    $  2,021,786                    $                    $ 11,895,945
                                   ======================== ==================== ========== ==================== ==================== ========== ==================== ==================== ========== ==================== ==================== ==========
                                                                    
                                                                    
(In thousands)                      As of December 31, 2019                                                                                     As of December 31, 2019
                                   ------------------------ -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
            Puerto Rico                   Puerto Rico                  Puerto Rico             Virgin Islands             Virgin Islands             United States              United States             Consolidated               Consolidated
---------------------------------- ------------------------ ---------------------------------------------------- ---------------------------------------------------- ---------------------------------------------------- --------------------------------
                                                                          
Residential mortgage loans                                $                    $  2,136,818                    $                    $    230,769                    $                    $    566,186                    $                    $  2,933,773
                                   ------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
                                                                               
Commercial loans:
   Construction loans                          36,102         12,144         63,071        111,317
   Commercial mortgage loans                1,012,523         67,377        364,686      1,444,586
   Commercial and Industrial loans          1,285,594        105,819        839,463      2,230,876
Commercial loans                            2,334,219        185,340      1,267,220      3,786,779
                                   ------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
                                                                               
Finance leases                                414,532              -              -        414,532
                                   ------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
                                                                               
Consumer loans                              1,776,675         49,924         40,522      1,867,121
                                   ------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
   Loans held for investment                6,662,244        466,033      1,873,928      9,002,205
                                                                               
Loans held for sale                            33,709            350          5,418         39,477
                                   ------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
      Total loans                                         $                    $  6,695,953                    $                    $    466,383                    $                    $  1,879,346                    $                    $  9,041,682
                                   ======================== ==================== ========== ==================== ==================== ========== ==================== ==================== ========== ==================== ==================== ==========
                                                                                                                                                                              
Table 9 - Non-Performing Assets
                                                                                                                                                                              
                                                            As of                                                                   As of                                                                                                      As of
--------------------------------------------------------------------------------------------------------------------------- -------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)                                                                                                          December 31,                        December 31,                       September 30,                       September 30,                      December 31,                        December 31,
                                                            2020                                                                    2020                                2020                               2020                                2020                               2019                                2019
--------------------------------------------------------------------------------------------------------------------------- -------------------- -----------------------------------------------   -------------------- -----------------------------------------------   -------------------- -----------------------------------------------
Nonaccrual loans held for investment:
    Residential mortgage                                                                                                                       $                    $ 125,367                      $                    $ 122,797                      $                    $ 121,408  
    Commercial mortgage                                                                                                          29,611        29,651        40,076  
    Commercial and Industrial                                                                                                    20,881        20,882        18,773  
    Construction                                                                                                                 12,971        13,090         9,782  
    Consumer and Finance leases                                                                                                  16,259        14,870        20,629  
                                                                                                                            -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
       Total nonaccrual loans held for investment                                                                               205,089       201,290       210,668  
                                                                                                                            -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
                                                                                                                                                                                                           
OREO                                                                                                                             83,060        89,049       101,626  
Other repossessed property                                                                                                        5,357         3,006         5,115  
                                                                                                                            -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
       Total non-performing assets, excluding nonaccrual loans held for sale                                                                   $                    $ 293,506                      $                    $ 293,345                      $                    $ 317,409  
                                                                                                                                                                              
Nonaccrual loans held for sale                                                                                                        -             -             -  
                                                                                                                            -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
       Total non-performing assets, including nonaccrual loans held for sale (1)                                                               $                    $ 293,506                      $                    $ 293,345                      $                    $ 317,409  
                                                                                                                            ==================== ==================== ======= ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ====================
                                                                                                                                                                              
Past-due loans 90 days and still accruing (2)                                                                                                  $                    $ 146,889                      $                    $ 160,066                      $                    $ 135,490  
Allowance for credit losses on loans                                                                                                           $                    $ 385,887                      $                    $ 384,718                      $                    $ 155,139  
Allowance for credit losses on loans to total nonaccrual loans held for investment                                               188.16                    %      191.13                    %       73.64                    %
Allowance for credit losses on loans to total nonaccrual loans held for investment, excluding residential real estate loans      484.04                    %      490.13                    %      173.81                    %
(1)
     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 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 December 31, 2020, September 30, 2020, and December 31, 2019 amounted to $130.9 million, $133.2 million, and $136.7 million, respectively.
                                                                
Table 10 - Non-Performing Assets by Geography
                                                                
                                      As of                                             As of                                                                           As of
------------------------------------------------------------------------------- -------------------- ------------------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                      December 31,               December 31,              September 30,              September 30,             December 31,               December 31,
                                      2020                                              2020                       2020                      2020                       2020                      2019                       2019
------------------------------------------------------------------------------- -------------------- ------------------------------  -------------------- ------------------------------  -------------------- ------------------------------
Puerto Rico:
Nonaccrual loans held for investment:
   Residential mortgage                                                                            $                    $    101,763                    $                    $     98,473                    $                    $     97,214
   Commercial mortgage                                                                  18,733         18,291         23,963
   Commercial and Industrial                                                            18,876         18,464         16,155
   Construction                                                                          5,323          5,430          2,024
   Finance leases                                                                        1,466            879          1,354
   Consumer                                                                             13,615         13,290         18,129
                                                                                -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
      Total nonaccrual loans held for investment                                       159,776        154,827        158,839
                                                                                -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
                                                                                              
OREO                                                                                    78,618         83,712         96,585
Other repossessed property                                                               5,120          2,790          4,810
                                                                                -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
      Total non-performing assets, excluding nonaccrual loans held for sale                        $                    $    243,514                    $                    $    241,329                    $                    $    260,234
Nonaccrual loans held for sale                                                               -              -              -
                                                                                -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
      Total non-performing assets, including nonaccrual loans held for sale (1)                    $                    $    243,514                    $                    $    241,329                    $                    $    260,234
                                                                                ==================== ==================== ========== ==================== ==================== ========== ==================== ==================== ==========
Past-due loans 90 days and still accruing (2)                                                      $                    $    144,619                    $                    $    157,829                    $                    $    129,463
                                                                                              
Virgin Islands:
Nonaccrual loans held for investment:
   Residential mortgage                                                                            $                    $      9,182                    $                    $      9,824                    $                    $     10,903
   Commercial mortgage                                                                  10,878         11,360         16,113
   Commercial and Industrial                                                             1,444          1,425          2,303
   Construction                                                                          7,648          7,660          7,758
   Consumer                                                                                354            229            467
                                                                                -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
      Total nonaccrual loans held for investment                                        29,506         30,498         37,544
                                                                                -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
                                                                                              
OREO                                                                                     4,411          5,273          4,909
Other repossessed property                                                                 109            143            146
                                                                                -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
      Total non-performing assets, excluding nonaccrual loans held for sale                        $                    $     34,026                    $                    $     35,914                    $                    $     42,599
Nonaccrual loans held for sale                                                               -              -              -
                                                                                -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
      Total non-performing assets, including nonaccrual loans held for sale                        $                    $     34,026                    $                    $     35,914                    $                    $     42,599
                                                                                ==================== ==================== ========== ==================== ==================== ========== ==================== ==================== ==========
Past-due loans 90 days and still accruing                                                          $                    $      2,020                    $                    $      1,986                    $                    $      5,898
                                                                                              
United States:
Nonaccrual loans held for investment:
   Residential mortgage                                                                            $                    $     14,422                    $                    $     14,500                    $                    $     13,291
   Commercial mortgage                                                                       -              -              -
   Commercial and Industrial                                                               561            993            315
   Construction                                                                              -              -              -
   Consumer                                                                                824            472            679
                                                                                -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
      Total nonaccrual loans held for investment                                        15,807         15,965         14,285
                                                                                -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
                                                                                              
OREO                                                                                        31             64            132
Other repossessed property                                                                 128             73            159
                                                                                -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
      Total non-performing assets, excluding nonaccrual loans held for sale                        $                    $     15,966                    $                    $     16,102                    $                    $     14,576
Nonaccrual loans held for sale                                                               -              -              -
                                                                                -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
      Total non-performing assets, including nonaccrual loans held for sale                        $                    $     15,966                    $                    $     16,102                    $                    $     14,576
                                                                                ==================== ==================== ========== ==================== ==================== ========== ==================== ==================== ==========
(1)
     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 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 December 31, 2020, September 30, 2020, and December 31, 2019 amounted to $130.9 million, $133.2 million, and $136.7 million, respectively.
                                                                                                                                                                                                                                                                     
Table 11 - Allowance for Credit Losses for Loans and Finance Leases
                                                                                                                                                                                                                                                                     
                                             Quarter Ended                                                Quarter Ended                                                                                              Quarter Ended                                                                                              Year Ended                                                             Year Ended
----------------------------------------------------------------------------------------------------- -------------------- -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)                                                                                    December 31,                        December 31,                       September 30,                       September 30,                      December 31,                        December 31,                       December 31,                        December 31,                       December 31,                        December 31,
                                                 2020                                                         2020                                2020                               2020                                2020                               2019                                2019                               2020                                2020                               2019                                2019
----------------------------------------------------------------------------------------------------- -------------------- -----------------------------------------------   -------------------- -----------------------------------------------   -------------------- -----------------------------------------------   -------------------- -----------------------------------------------   -------------------- -----------------------------------------------
                                                                                                                                                                                                                          
Allowance for credit losses on loans and finance leases, beginning balance                                               $                    $ 384,718                      $                    $ 319,297                      $                    $ 165,575                      $                    $ 155,139                      $                    $ 196,362  
Impact of adopting ASC 326                                                                                      -             -             -        81,165             -  
                                                                                                      -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Allowance for credit losses on loans and finance leases, beginning balance after CECL adoption            384,718       319,297       165,575       236,304       196,362  
                                                                                                      -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Provision for credit losses on loans and finance leases                                                    10,186        48,078         8,473       168,717        40,225  
                                                                                                      -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Initial allowance on PCD loans                                                                                  -        28,744             -        28,744             -  
                                                                                                      -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Net (charge-offs) recoveries of loans:
   Residential mortgage                                                                                    (1,642                    )      (2,283                    )      (5,930                    )      (9,498 )                        (20,079 )
   Commercial mortgage                                                                                      1,769        (3,104                    )        (103                    )      (1,394 )                        (14,690 )
   Commercial and Industrial                                                                                 (367                    )         (70                    )         208          (442 )                         (3,652 )
   Construction                                                                                               102            36            (8                    )         108           274  
   Consumer and finance leases                                                                             (8,879                    )      (5,980                    )     (13,076                    )     (36,652 )                        (43,301 )
                                                                                                      -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Net charge-offs                                                                                            (9,017                    )     (11,401                    )     (18,909                    )     (47,878 )                        (81,448 )
                                                                                                      -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Allowance for credit losses on loans and finance leases, end of period                                                   $                    $ 385,887                      $                    $ 384,718                      $                    $ 155,139                      $                    $ 385,887                      $                    $ 155,139  
                                                                                                      ==================== ==================== ======= ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                                                          
Allowance for credit losses on loans and finance leases to period end total loans held for investment        3.28                    %        3.25                    %        1.72                    %        3.28                    %        1.72                    %
Net charge-offs (annualized) to average loans outstanding during the period                                  0.30                    %        0.45                    %        0.84                    %        0.48                    %        0.91                    %
Provision for credit losses on loans and finance leases to net charge-offs during the period                         1.13x                                             1.13x                4.22x                                             4.22x                0.45x                                             0.45x                3.52x                                             3.52x                0.49x                                             0.49x
Provision for credit losses on loans and finance leases to net charge-offs during the period,
   excluding effect of the hurricane-related qualitative reserve releases in
(1)
     Net of a $6.4 million net credit loss reserve release on loans associated with the effect of Hurricanes Irma and Maria.
                            
Table 12 - Net Charge-Offs to Average Loans
                            
         Year Ended              Year Ended                                                                                               Year Ended
--------------------------- -------------------- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
        December 31,            December 31,         December 31,         December 31,         December 31,         December 31,         December 31,         December 31,         December 31,         December 31,         December 31,
            2020                    2020                 2020                 2019                 2019                 2018                 2018                 2017                 2017                 2016                 2016
--------------------------- -------------------- -------------------  -------------------- -------------------  -------------------- -------------------  -------------------- -------------------  -------------------- -------------------
                            
Residential mortgage                        0.30       0.30         %                 0.66       0.66         %                 0.67       0.67         %                 0.79       0.79         %                 0.93       0.93         %
                            
Commercial mortgage                         0.08       0.08         %                 0.97       0.97         %                 1.03       1.03         %                 2.42       2.42         %                 1.28       1.28         %
                            
Commercial and Industrial                   0.02       0.02         %                 0.16       0.16         %                 0.38       0.38         %                 0.66       0.66         %                 1.11       1.11         %
                            
Construction                               -0.06      -0.06         %                -0.28      -0.28         %                 6.75       6.75         %                 2.05       2.05         %                 1.02       1.02         %
                            
Consumer and finance leases                 1.53       1.53         %                 2.05       2.05         %                 2.31       2.31         %                 2.12       2.12         %                 2.63       2.63         %
                            
   Total loans                              0.48       0.48         %                 0.91       0.91         %                 1.09       1.09         %                 1.33       1.33         %                 1.37       1.37         %

View source version on businesswire.com: https://www.businesswire.com/news/home/20210129005128/en/

SOURCE: First BanCorp.

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

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