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STOCK-BASED COMPENSATION | 9 Months Ended
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Sep. 30, 2021
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
STOCK-BASED COMPENSATION [Text Block] | NOTE 4 – STOCK-BASED COMPENSATION On May 24, 2016, the Corporation’s stockholders approved the amendment and restatement of the First BanCorp. Omnibus Incentive Plan, as amended (the “Omnibus Plan”), to, among other things, increase the number of shares of common stock reserved for issuance under the Omnibus Plan, extend the term of the Omnibus Plan to May 24, 2026 and re-approve the material terms of the performance goals under the Omnibus Plan for purposes of the then-effective Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended. The Omnibus Plan provides for equity-based and non equity-based compensation incentives (the “awards”) through the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, other stock-based awards and cash-based awards. The Omnibus Plan authorizes the issuance of up to 14,169,807 shares of common stock, subject to adjustments for stock splits, reorganizations and other similar events. As of September 30, 2021, there were 5,074,056 authorized shares of common stock which remained available for issuance under the Omnibus Plan. The Corporation’s Board of Directors, based on the recommendation of the Corporation’s Compensation and Benefits Committee, has the power and authority to determine those eligible to receive awards and to establish the terms and conditions of any awards, subject to various limits and vesting restrictions that apply to individual and aggregate awards. Restricted Stock Under the Omnibus Plan, the Corporation may grant restricted stock to plan participants, subject to forfeiture upon the occurrence of certain events until the dates specified in the participant’s award agreement. While the restricted stock is subject to forfeiture and does not contain non-forfeitable dividend rights, participants may exercise full voting rights with respect to the shares of restricted stock granted to them. The restricted stock granted under the Omnibus Plan is typically subject to a vesting period. During the first nine months of 2021, the Corporation awarded to its independent directors 26,361 shares of restricted stock that are subject to one-year vesting from the date of grant. In addition, during the first nine months of 2021, the Corporation awarded 290,069 shares of restricted stock to employees; fifty percent (50%) of those shares vest on the two-year anniversary of the grant date and the remaining 50% vest on the three-year anniversary of the grant date. Included in those 290,069 shares of restricted stock were 19,271 shares granted to retirement-eligible employees. The total expense determined for the restricted stock awarded to retirement-eligible employees was charged against earnings as of the grant date. During the first nine months of 2020, the Corporation awarded to its independent directors 53,634 shares of restricted stock that were subject to one-year vesting. In addition, during the first nine months of 2020, the Corporation awarded 851,673 shares of restricted stock to employees; 50% of those shares vest on the two-year anniversary of the grant date and the remaining 50% vest on the three-year anniversary of the grant date. Included in those 851,673 shares of restricted stock were 47,194 shares granted to retirement-eligible employees. The fair value of the shares of restricted stock granted in the first nine months of 2021 and 2020 was based on the market price of the Corporation’s outstanding common stock on the date of the respective grant.
| The following table summarizes the restricted stock activity in the first nine months of 2021 under the Omnibus Plan:
|  | Nine-Month Period Ended
|  | September 30, 2021
|  | Number of shares |  |  | Weighted-Average
|  | of restricted |  |  | Grant Date
|  | stock |  |  | Fair Value
Unvested shares outstanding at beginning of period | 1,320,723 |  | $ | 5.74
Granted | 316,430 |  |  | 11.40
Forfeited | (24,792) |  |  | 6.32
Vested | (407,659) |  |  | 7.70
Unvested shares outstanding as of September 30, 2021 | 1,204,702 |  | $ | 6.55
For the quarter and nine-month period ended September 30, 2021, the Corporation recognized $0.8 million and $2.6 million, respectively, of stock-based compensation expense related to restricted stock awards, compared to $0.8 million and $2.4 million for the same periods in 2020, respectively. As of September 30, 2021, there was $4.0 million of total unrecognized compensation cost related to unvested shares of restricted stock. The weighted average period over which the Corporation expects to recognize such cost was 1.6 years as of September 30, 2021. Stock-based compensation accounting guidance requires the Corporation to reverse compensation expense for any awards that are forfeited due to employee or director turnover. Quarterly changes in the estimated forfeiture rate may have a significant effect on stock-based compensation, as the Corporation recognizes the effect of adjusting the rate for all expense amortization in the period in which the forfeiture estimate is changed. If the actual forfeiture rate is higher than the estimated forfeiture rate, an adjustment is made to increase the estimated forfeiture rate, which will decrease the expense recognized in the financial statements. If the actual forfeiture rate is lower than the estimated forfeiture rate, an adjustment is made to decrease the estimated forfeiture rate, which will increase the expense recognized in the financial statements. Performance Units Under the Omnibus Plan, the Corporation may award performance units to Omnibus Plan participants. During the first nine months of 2021, the Corporation granted 160,485 units to executives, with each unit representing the value of one share of the Corporation’s common stock. The performance units granted in 2021 are for the performance period beginning January 1, 2021 and ending on December 31, 2023. These awards do not contain non-forfeitable rights to dividend equivalent amounts and can only be settled in shares of the Corporation’s common stock. The performance units will vest on the third anniversary of the effective date of the awards, subject to the achievement of a pre-established tangible book value per share target as of December 31, 2023. All the performance units will vest if performance is at the pre-established performance target level or above. However, the participants may vest with respect to 50% of the awards to the extent that performance is below the target but not less than 80% of the pre-established performance target level (the “80% minimum threshold”), which is measured based upon the growth in the tangible book value during the performance cycle. If performance is between the 80% minimum threshold and the pre-established performance target level, the participants will vest on a proportional amount. No performance units will vest if performance is below the 80% minimum threshold. During the first nine months of 2021, the Corporation issued 304,408 shares of common stock related to performance units granted in 2018 that met the pre-established target and vested in the first quarter of 2021. During the first nine months of 2020 and 2019, the Corporation awarded 502,307 and 200,053 performance units to executives, respectively. The performance units will vest on the third anniversary of the effective date of the awards and are subject to a pre-established performance target level as described above.
The following table summarizes the performance units activity in the first nine months of 2021 under the Omnibus Plan:
|  | Nine-Month Period Ended
(Number of units) | September 30, 2021
Performance units at beginning of year | 1,006,768
Additions | 160,485
Vested | (304,408)
Performance units at September 30, 2021 | 862,845
The fair values of the performance units awarded were based on the market price of the Corporation’s outstanding common stock on the respective date of the grant. For the quarter and nine-month period ended September 30, 2021, the Corporation recognized $0.5 million and $1.5 million, respectively, of stock-based compensation expense related to performance units, compared to $0.5 million and $1.3 million for the same periods in 2020, respectively. As of September 30, 2021, there was $2.9 million of total unrecognized compensation cost related to unvested performance units that the Corporation expects to recognize over the next three years. The total amount of compensation expense recognized reflects management’s assessment of the probability that the pre-established performance goal will be achieved. The Corporation will recognize a cumulative adjustment to compensation expense in the then-current period to reflect any changes in the probability of achievement of the performance goals. Other awards Under the Omnibus Plan, the Corporation may grant shares of unrestricted stock to plan participants. During the third quarter of 2020, the Corporation granted to its independent directors 19,157 shares of unrestricted stock that were fully vested at the time of the grant date. For the quarter ended September 30, 2020, the Corporation recognized $0.1 million of stock-based compensation expense related to unrestricted stock awards. There were no grants of unrestricted stock in 2021. Shares withheld During the first nine months of 2021, the Corporation withheld 213,757 shares (first nine months of 2020 – 51,814 shares) of the restricted stock and performance units that vested during such period to cover the officers’ payroll and income tax withholding liabilities; these shares are held as treasury shares. The Corporation paid in cash any fractional share of salary stock to which an officer was entitled. In the consolidated financial statements, the Corporation presents shares withheld for tax purposes as common stock repurchases.

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