FIRST BANCORP /PR/FBP

FIRST BANCORP /PR/ Debt Disclosure

10-KFiled Feb 27, 20263 min read
NOTE 9 –BORROWINGS
Advances from the Federal Home Loan Bank (“FHLB”)
The following is a summary of the advances from the FHLB as of the indicated dates:
December 31, 2025
December 31, 2024
(In thousands)
Long-term
Fixed
-rate advances from the FHLB
(1)
$
290,000
$
500,000
(1)
Weighted-average interest rate of
4.32
% and
4.45
% as of December 31, 2025 and 2024, respectively, with contractual maturity
dates ranging from March 2026 to
November 2027.
Advances from the FHLB mature as follows as of the indicated date:
December 31, 2025
(In thousands)
Three months or less
$
90,000
Over one year to two years
200,000
Total
(1)
$
290,000
(1) Average remaining term to maturity of
1.36
years.
The maximum
aggregate balance
of advances
from the
FHLB outstanding
at any
month-end during
the years
ended December 31,
2025 and
2024 was
$
650.0
million and
$
500.0
million, respectively.
The total
average balance
of FHLB
advances during
2025 was
$
347.4
million (2024 - $
500.1
million).
The
Corporation
obtains
advances and
applies for
the issuance
of letters
of
credit from
the FHLB
under an
Advances, Collateral
Pledge,
and
Security
Agreement
(the
“Collateral
Agreement”)
that
requires
the
pledge
of
qualifying
mortgage
collateral
or
U.S.
Treasury
or U.S.
agencies debt
securities’ collateral,
as applicable.
Collateral values
are subject
to FHLB-determined
haircuts, which
represent a percentage reduction applied
to the collateral’s
value. As of December 31, 2025
and 2024, the estimated value of
mortgage
loans pledged
as collateral,
net of
haircut, amounted
to $
1.4
billion and
$
1.2
billion, respectively,
and U.S.
agencies’ obligations
and
MBS pledged as collateral,
net of haircut, amounted
to $
216.4
million and $
438.5
million, respectively.
As of December 31, 2025,
the
Corporation had approximately
$
1.1
billion of additional
borrowing capacity under
this facility based on
the pledged collateral,
net of
haircut. Advances
may be
prepaid, in
whole or
in part
at the
borrower’s
option, subject
to applicable
fees determined
by the
FHLB,
based on all relevant factors including, but not limited to, the terms of
the advance and related hedging or funding costs.
Junior Subordinated Debentures
Junior subordinated debentures, as of the indicated dates, consisted of:
(In thousands)
December 31, 2025
December 31, 2024
Long-term floating rate junior subordinated debentures (FBP Statutory Trust I)
(1)
$
-
$
43,143
Long-term floating rate junior subordinated debentures (FBP Statutory Trust II)
(2)
-
18,557
$
-
$
61,700
(1)
Amount represents
junior subordinated
interest-bearing
debentures
due in
2034 with
a floating
interest rate
of
2.75
% over
3-month CME Term SOFR
plus a
0.26161
% tenor
spread
adjustment as of December 31, 2024 (
7.36
% as of December 31, 2024).
(2)
Amount represents
junior subordinated
interest-bearing
debentures
due in
2034 with
a floating
interest rate
of
2.50
% over
3-month CME Term SOFR
plus a
0.26161
% tenor
spread
adjustment as of December 31, 2024 (
7.12
% as of December 31, 2024).
During 2025, the
Corporation redeemed $
61.7
million of the remaining
TruPS issued
by FBP Statutory
Trusts I and
II, which were
outstanding as
of December
31, 2024.
See Note
12 –
“Stockholders’ Equity”
for additional
information regarding
the redemption
of
these TruPS.
Loans Payable
The Corporation
participates in
the Borrower-in-Custody
Program (the
“BIC Program”)
of the
FED. Through
the BIC
Program, a
broad
range
of
loans
may
be
pledged
as
collateral
for
borrowings
through
the
FED
Discount
Window.
As
of
December
31,
2025,
pledged
collateral
that
is
related
to
this
credit
facility
amounted
to
$
2.6
billion,
net
of
haircut,
mainly
commercial,
consumer,
and
residential mortgage
loans,
which is
fully available
for funding.
The FED
Discount Window
program provide
s
access to
a low-cost,
short-term liquidity source during periods of market volatility.

Historical Timeline

Fiscal YearFiled
2025Feb 27, 2026Showing above
2024Feb 28, 2025
2021Mar 1, 2022
2020Mar 1, 2021
2019Mar 2, 2020
2018Mar 1, 2019
2017Mar 16, 2018
2016Mar 16, 2017
2015Mar 14, 2016

About Debt Disclosures

Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.

Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.

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