The FirstBank 401(k) Retirement Plan for Residents of the U.S. Virgin
Islands and the United States of America
Notes to the
Financial Statements
December 31, 2022 and 2021
These are called 401(k) Matching Contributions and 401(k) Additional Matching
Contributions, respectively.
Investment of participants and employers contributions are directed by
participants into various investment options, which include several mutual funds and the common stock of First BanCorp., the Banks parent company. The Plan allows for rollover contributions from other qualified plans.
Participants age 50 or older are permitted to make an additional $6,500 pre-tax
contribution for the tax year ended December 31, 2022 after contributing the Plan limit of $20,500 of their pre-tax annual compensation.
Participant Accounts
Each participants account is credited with the participants contributions and allocations of the Banks
contributions and Plan earnings. Allocations are based on the participants contributions in the case of matching contributions, or account balances in each investment option in the case of plan earnings. The benefit to which a participant is
entitled is the benefit that can be provided from the participants vested account. Forfeited nonvested accounts are used to cover administrative expenses, or used to reduce future Bank contributions. Certain administrative expenses directly
associated with the Plan are paid using the Plan assets and then the expenses are allocated among all participants accounts.
Vesting
Participants are immediately vested in their contributions and the 401(k) Matching Contributions plus actual earnings thereon.
The 401(k) Additional Matching Contribution is subject to the completion of at least three years of service for vesting.
Notes receivable from participants
The Plan allows participants and their beneficiaries to borrow from their accounts a minimum of $1,000 up to a maximum equal to
the lesser of 50% of the participants vested account balance or $50,000. A maximum of one loan outstanding is permitted at any time. Interest rates on loans are generally calculated based on the prime rate plus 2% as of the date the loan is
granted. As of December 31, 2022 and 2021, substantially all of the loans have interest rates ranging from 5.25% to 9.50%. Principal and interest are paid to the Plan ratably through biweekly payroll deductions. The loans have a term of
repayment up to five years. The Plan Administrator may fix the term for repayment of a home loan for a period exceeding five years. A home loan is a loan used to acquire a dwelling unit which, within a reasonable time, the participant will use as a
principal residence. Loan transactions are treated as a transfer to (from) the investment funds from (to) the Participants Loan account and are secured by the balance in the participants account.
Payment of Benefits
Plan participants are permitted to make withdrawals from the Plan, subject to provisions in the Plan agreement. On termination
of service due to death, disability or retirement all distributions from the Plan will be made in a single lump-sum cash payment. If the value of the vested account is more than $5,000, the participant may
elect to defer any benefit payable under the Plan until a specified future date. However, if the value of the account balance does not exceed $1,000, the distribution will be made to the participant, regardless of whether the participant consents to
receive it. The Plan allows for participants to receive hardship distributions.
In the case of participant termination
because of death, all amounts credited to such participants account shall become fully vested and the entire amount is paid to the person or persons legally entitled thereto. In addition, a participant will fully vest in his or her account
balance (including 401(k) Additional Matching Contributions) upon permanent and total disability.
6