FIRST BANCORP /PR/FBP

FIRST BANCORP /PR/ Leases Disclosure

10-KFiled Feb 27, 20262 min read
NOTE 18
–
OPERATING
LEASES
The
Corporation
accounts
for
its
leases
in
accordance
with
ASC
842
“Leases”
(“ASC
Topic
842).
The
Corporation’s
operating
leases are
primarily related
to the
Corporation’s
branches. Our
leases mainly
have original
terms ranging
from
two years
to
26 years
,
some
of
which
include
options
to
extend
the
leases
for
up
to
20 years
.
Liabilities
to
make
future
lease
payments
are
recorded
in
accounts payable
and other
liabilities, while
ROU assets
are recorded
in other
assets in
the Corporation’s
consolidated statements
of
financial condition. As of December 31, 2025 and 2024, the Corporation
did not classify any of its leases as a finance lease.
Operating lease cost for the
year ended December 31, 2025
amounted to $
17.7
million (2024 - $
18.1
million; 2023 - $
17.3
million),
and is recorded in occupancy and equipment in the consolidated statements
of income.
Supplemental balance sheet information related to leases was as follows as of the
indicated dates:
As of December 31,
2025
2024
(Dollars in thousands)
ROU asset
$
72,192
$
63,159
Operating lease liability
$
74,369
$
65,801
Operating lease weighted-average remaining lease term (in years)
7.7
7.4
Operating lease weighted-average discount rate
3.68%
3.11%
Generally,
the
Corporation
cannot
practically
determine
the interest
rate
implicit
in
the lease.
Therefore,
the Corporation
uses
its
incremental
borrowing
rate
as
the
discount
rate
for
the
lease.
See
Note
1
–
“Nature
of
Business
and
Summary
of
Significant
Accounting Policies” for information on how the Corporation determines
its incremental borrowing rate.
Supplemental cash flow information related to leases was as follows:
Year Ended
December 31,
2025
2024
2023
(In thousands)
Operating cash flow from operating leases
(1)
$
17,728
$
17,541
$
17,307
ROU assets obtained in exchange for operating lease liabilities
(2) (3)
$
24,465
$
10,492
$
4,960
(1)
Represents cash paid for amounts included in the measurement of operating
lease liabilities.
(2)
Represents non-cash activity and, accordingly,
is not reflected in the consolidated statements of cash flows.
(3)
For the years ended December 31, 2024 and 2023 excludes $
0.5
million and $
0.1
million, respectively, of lease
terminations.
Maturities under operating lease liabilities as of December 31, 2025 were
as follows:
Amount
(In thousands)
2026
$
17,612
2027
12,752
2028
11,552
2029
9,961
2030
8,563
2031 and later years
25,728
Total lease payments
86,168
Less: imputed interest
(11,799)
Total present value
of lease liability
$
74,369
Lease Not Yet Commenced
As of
December 31,
2025,
the Corporation
has an
additional operating
lease that
was signed
but has
not yet
commenced with
an
undiscounted contract amount of $
7.7
million and a lease term of
30 years
.

Historical Timeline

Fiscal YearFiled
2025Feb 27, 2026Showing above
2024Feb 28, 2025
2023Feb 28, 2024
2022Feb 28, 2023
2021Mar 1, 2022
2020Mar 1, 2021
2019Mar 2, 2020
2018Mar 1, 2019
2017Mar 16, 2018
2016Mar 16, 2017
2015Mar 14, 2016

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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