| Fair Value Measurements |
Fair Value Measurements ASC Topic 820, “Fair Value Measurement,” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This guidance also establishes a three-level hierarchy for measuring fair value based on the observability of inputs: (i) Level 1 inputs are quoted prices in active markets for identical assets and liabilities; (ii) Level 2 inputs are observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices); and (iii) Level 3 inputs are significant unobservable inputs, requiring significant judgment due to limited or no market activity. As of December 31, 2025 and 2024, the Plan’s investments measured at fair value consisted of the following instruments and classifications within the fair value hierarchy:
As of December 31, 2025 Fair Value Measurements Using Level 1 Level 2 Level 3 Assets at Fair Value Investments in mutual funds and money market funds $ 26,084,654 $ - $ - $ 26,084,654 Investment in First BanCorp. 1,320,517 - - 1,320,517 PCRA 288,440 57,825 - 346,265 Total investments at fair value $ 27,693,611 $ 57,825 $ - $ 27,751,436 As of December 31, 2024 Fair Value Measurements Using Level 1 Level 2 Level 3 Assets at Fair Value Investments in mutual funds and money market funds $ 23,047,504 $ - $ - $ 23,047,504 Investment in First BanCorp. 1,018,946 - - 1,018,946 PCRA 869,626 74,907 - 944,533 Total investments at fair value $ 24,936,076 $ 74,907 $ - $ 25,010,983 Following is a description of the Plan’s valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2025 and 2024. Mutual Funds and money market funds: These open-ended funds are valued at the daily closing price as reported by the funds, which represents the net asset value of shares held by the Plan at the reporting date. The net asset value is a quoted market price available in an active market. Investment in First BanCorp.: Investment in First BanCorp. consists of common stock of First BanCorp. and is valued based on the closing price per the stock exchange on which they are traded. Self-directed brokerage accounts: Investments held in a PCRA include exchange-traded funds and other short-term assets, which are valued using quoted market prices at period end and, as such, are classified as Level 1. These investments also include corporate obligations and long-term time deposits, which are valued based on the present value of future cash flows discounted based on the current interest rate at the reporting date and, as such, are classified as Level 2. |