8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): July 31, 2012

First BanCorp.

(Exact Name of Registrant as Specified in its Charter)

Puerto Rico	001-14793	66-0561822
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
1519 Ponce de Leon Ave. P.O. Box 9146 San Juan, Puerto Rico		00908-0146
(Address of Principal Executive Offices)		(Zip Code)

(787) 729-8200

(Registrant’s Telephone Number, including Area Code)

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On July 31, 2012, First BanCorp. (the “Corporation”), the bank holding company for FirstBank Puerto Rico (“FirstBank” or “the Bank”), issued a press release announcing its unaudited results of operations for the second quarter ended June 30, 2012. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. Also incorporated by reference herein is an investor presentation that is attached hereto as Exhibit 99.2.

The Corporation has included in this release the following financial measures that are not recognized under generally accepted accounting principles, which are referred to as non-GAAP financial measures: (i) the calculation of net interest income, interest rate spread and net interest margin rate on a tax-equivalent basis and excluding changes in the fair value of derivative instruments and certain financial liabilities; (ii) the calculation of the tangible common equity ratio and the tangible book value per common share; (iii) the Tier 1 common equity to risk-weighted assets ratio; and (iv) the adjusted pre-tax, pre-provision income. Investors should be aware that non-GAAP financial measures have inherent limitations and should be read only in conjunction with the Corporation’s consolidated financial data prepared in accordance with GAAP.

Net interest income, interest rate spread and net interest margin are reported on a tax-equivalent basis and excluding changes in the fair value of derivative instruments and financial liabilities elected to be measured at fair value (“valuations”). The presentation of net interest income excluding valuations provides additional information about the Corporation’s net interest income and facilitates comparability and analysis. The changes in the fair value of derivative instruments and unrealized gains and losses on liabilities measured at fair value have no effect on interest due or interest earned on interest-bearing liabilities or interest-earning assets, respectively. The tax-equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a marginal income tax rate, as described in Exhibit A — Tables 2 and 3 of the press release attached hereto as Exhibit 99.1. Income from tax-exempt earning assets is increased by an amount equivalent to the taxes that would have been paid if this income had been taxable at statutory rates. Management believes that it is a standard practice in the banking industry to present net interest income, interest rate spread and net interest margin on a fully tax-equivalent basis. This adjustment puts all earning assets, most notably tax-exempt securities and certain loans, on a common basis that facilitates comparison of the Corporation’s results to results of its peers.

2

The following table reconciles the non-GAAP financial measure “net interest income on a tax-equivalent basis excluding valuations” with net interest income calculated and presented in accordance with GAAP. The table also reconciles the non-GAAP financial measures “net interest spread on a tax-equivalent basis and excluding valuations” and “net interest margin on a tax-equivalent basis and excluding valuations” with net interest spread and net interest margin calculated and presented in accordance with GAAP.

(dollars in thousands)
	Quarter Ended															Six-Month Period Ended
	June 30, 2012			March 31, 2012			December 31, 2011			September 30, 2011			June 30, 2011			June 30, 2012			June 30, 2011
Net Interest Income
Interest Income - GAAP	$	153,652		$	152,107		$	156,752		$	158,542		$	163,418		$	305,759		$	344,321
Unrealized loss (gain) on derivative instruments		33			(332	)		(246	)		954			1,185			(299	)		840
Interest income excluding valuations		153,685			151,775			156,506			159,496			164,603			305,460			345,161
Tax-equivalent adjustment		1,634			1,741			1,456			1,521			1,504			3,375			3,818
Interest income on a tax-equivalent basis excluding valuations		155,319			153,516			157,962			161,017			166,107			308,835			348,979
Interest Expense - GAAP		44,947			50,241			58,209			64,287			68,983			95,188			143,607
Unrealized gain (loss) on derivative instruments and liabilities measured at fair value		539			(49	)		(1,992	)		(1,601	)		23			490			(575	)
Interest expense excluding valuations		45,486			50,192			56,217			62,686			69,006			95,678			143,032
Net interest income - GAAP	$	108,705		$	101,866		$	98,543		$	94,255		$	94,435		$	210,571		$	200,714
Net interest income excluding valuations	$	108,199		$	101,583		$	100,289		$	96,810		$	95,597		$	209,782		$	202,129
Net interest income on a tax-equivalent basis excluding valuations	$	109,833		$	103,324		$	101,745		$	98,331		$	97,101		$	213,157		$	205,947
Average Balances
Loans and leases	$	10,183,229		$	10,389,246		$	10,637,523		$	10,832,426		$	10,997,295		$	10,286,238		$	11,333,092
Total securities and other short-term investments		2,450,198			2,397,918			2,665,918			2,787,708			3,550,743			2,424,057			3,569,281
Average Interest-Earning Assets	$	12,633,427		$	12,787,164		$	13,303,441		$	13,620,134		$	14,548,038		$	12,710,295		$	14,902,373
Average Interest-Bearing Liabilities	$	10,577,054		$	10,725,162		$	11,255,725		$	11,944,454		$	12,809,375		$	10,651,107		$	13,150,146
Average Yield/Rate
Average yield on interest-earning assets - GAAP		4.89	%		4.78	%		4.67	%		4.62	%		4.51	%		4.84	%		4.66	%
Average rate on interest-bearing liabilities - GAAP		1.71	%		1.88	%		2.05	%		2.14	%		2.16	%		1.80	%		2.20	%
Net interest spread - GAAP		3.18	%		2.90	%		2.62	%		2.48	%		2.35	%		3.04	%		2.46	%
Net interest margin - GAAP		3.46	%		3.20	%		2.94	%		2.75	%		2.60	%		3.33	%		2.72	%
Average yield on interest-earning assets excluding valuations		4.89	%		4.77	%		4.67	%		4.65	%		4.54	%		4.83	%		4.67	%
Average rate on interest-bearing liabilities excluding valuations		1.73	%		1.88	%		1.98	%		2.08	%		2.16	%		1.81	%		2.19	%
Net interest spread excluding valuations		3.16	%		2.89	%		2.69	%		2.57	%		2.38	%		3.02	%		2.48	%
Net interest margin excluding valuations		3.44	%		3.20	%		2.99	%		2.82	%		2.64	%		3.32	%		2.74	%
Average yield on interest-earning assets on a tax-equivalent basis and excluding valuations		4.94	%		4.83	%		4.71	%		4.69	%		4.58	%		4.89	%		4.72	%
Average rate on interest-bearing liabilities excluding valuations		1.73	%		1.88	%		1.98	%		2.08	%		2.16	%		1.81	%		2.19	%
Net interest spread on a tax-equivalent basis and excluding valuations		3.21	%		2.95	%		2.73	%		2.61	%		2.42	%		3.08	%		2.53	%
Net interest margin on a tax-equivalent basis and excluding valuations		3.50	%		3.25	%		3.03	%		2.86	%		2.68	%		3.37	%		2.79	%

3

The tangible common equity ratio and tangible book value per common share are non-GAAP financial measures generally used by the financial community to evaluate capital adequacy. Tangible common equity is total equity less preferred equity, goodwill, core deposit intangibles and purchased credit card relationship intangible. Tangible assets are total assets less goodwill, core deposit intangibles and purchased credit card relationship intangibles. Management and many stock analysts use the tangible common equity ratio and tangible book value per common share in conjunction with more traditional bank capital ratios to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, typically stemming from the use of the purchase method of accounting for mergers and acquisitions. Neither tangible common equity nor tangible assets, or related measures should be considered in isolation or as a substitute for stockholders’ equity, total assets or any other measure calculated in accordance with GAAP. Moreover, the manner in which the Corporation calculates its tangible common equity, tangible assets and any other related measures may differ from that of other companies reporting measures with similar names. The following table is a reconciliation of the Corporation’s tangible common equity and tangible assets:

(Dollars in thousands, except per share information)
	June 30, 2012			March 31, 2012			December 31, 2011			September 30, 2011			June 30, 2011
Tangible Equity:
Total equity - GAAP	$	1,448,959		$	1,433,023		$	1,444,144		$	986,847		$	1,009,578
Preferred equity		(63,047	)		(63,047	)		(63,047	)		(430,498	)		(428,703	)
Goodwill		(28,098	)		(28,098	)		(28,098	)		(28,098	)		(28,098	)
Purchased credit card relationship		(24,342	)		—			—			—			—
Core deposit intangible		(10,512	)		(11,100	)		(11,689	)		(12,277	)		(12,866	)
Tangible common equity	$	1,322,960		$	1,330,778		$	1,341,310		$	515,974		$	539,911
Tangible Assets:
Total assets - GAAP	$	12,913,650		$	13,085,623		$	13,127,275		$	13,475,572		$	14,113,973
Goodwill		(28,098	)		(28,098	)		(28,098	)		(28,098	)		(28,098	)
Purchased credit card relationship		(24,342	)		—			—			—			—
Core deposit intangible		(10,512	)		(11,100	)		(11,689	)		(12,277	)		(12,866	)
Tangible assets	$	12,850,698		$	13,046,425		$	13,087,488		$	13,435,197		$	14,073,009
Common shares outstanding		206,134			206,134			205,134			21,304			21,304
Tangible common equity ratio		10.29	%		10.20	%		10.25	%		3.84	%		3.84	%
Tangible book value per common share	$	6.42		$	6.46		$	6.54		$	24.22		$	25.34

4

The Tier 1 common equity to risk-weighted assets ratio is calculated by dividing (a) tier 1 capital less non-common elements including qualifying perpetual preferred stock and qualifying trust preferred securities by (b) risk-weighted assets, which assets are calculated in accordance with applicable bank regulatory requirements. The Tier 1 common equity ratio is not required by GAAP or on a recurring basis by applicable bank regulatory requirements. However, this ratio will be required under Basel III capital standards as proposed. Management is currently monitoring this ratio, along with the other ratios discussed above, in evaluating the Corporation’s capital levels and believes that, at this time, the ratio may be of interest to investors.

The following table reconciles stockholders’ equity (GAAP) to Tier 1 common equity:

(Dollars in thousands)	As of
	June 30, 2012			March 31, 2012			December 31, 2011			September 30, 2011			June 30, 2011
Tier 1 Common Equity:
Total equity - GAAP	$	1,448,959		$	1,433,023		$	1,444,144		$	986,847		$	1,009,578
Qualifying preferred stock		(63,047	)		(63,047	)		(63,047	)		(430,498	)		(428,703	)
Unrealized gain on available-for-sale securities (1)		(26,623	)		(20,233	)		(19,234	)		(13,957	)		(12,659	)
Disallowed deferred tax asset (2)		(41	)		(25	)		—			(267	)		(272	)
Goodwill		(28,098	)		(28,098	)		(28,098	)		(28,098	)		(28,098	)
Core deposit intangible		(10,512	)		(11,100	)		(11,689	)		(12,277	)		(12,866	)
Cumulative change gain in fair value of liabilities accounted for under a fair value option		—			(2,434	)		(2,009	)		(952	)		(1,889	)
Other disallowed assets		(2,917	)		(807	)		(922	)		(907	)		(808	)
Tier 1 common equity	$	1,317,721		$	1,307,279		$	1,319,145		$	499,890		$	524,283
Total risk-weighted assets	$	10,046,284		$	9,947,559		$	10,180,226		$	10,432,804		$	10,630,162
Tier 1 common equity to risk-weighted assets ratio		13.12	%		13.14	%		12.96	%		4.79	%		4.93	%

1- Tier 1 capital excludes net unrealized gains (losses) on available-for-sale debt securities and net unrealized gains on available-for-sale equity securities with readily determinable fair values, in accordance with regulatory risk-based capital guidelines. In arriving at Tier 1 capital, institutions are required to deduct net unrealized losses on available-for-sale equity securities with readily determinable fair values, net of tax.

2- Approximately $12 million of the Corporation’s deferred tax assets at June 30, 2012 (March 31, 2012 - $12 million; December 31, 2011 - $13 million; September 30, 2011 - $12 million; June 30, 2011 - $11 million) was included without limitation in regulatory capital pursuant to the risk-based capital guidelines, while approximately $41k of such assets at June 30, 2012 (March 31, 2012 - $25k; December 31, 2011 - $0; September 30, 2011 - $0.3 million; June 30, 2011 - $0.3 million) exceeded the limitation imposed by these guidelines and, as “disallowed deferred tax assets,” was deducted in arriving at Tier 1 capital. According to regulatory capital guidelines, the deferred tax assets that are dependent upon future taxable income are limited for inclusion in Tier 1 capital to the lesser of: (i) the amount of such deferred tax asset that the entity expects to realize within one year of the calendar quarter end-date, based on its projected future taxable income for that year, or (ii) 10% of the amount of the entity’s Tier 1 capital. Approximately $7 million of the Corporation’s other net deferred tax liability at June 30, 2012 (March 31, 2012 - $7 million; December 31, 2011 - $8 million; September 30, 2011 - $7 million; June 30, 2011 - $5 million) represented primarily the deferred tax effects of unrealized gains and losses on available-for-sale debt securities, which are permitted to be excluded prior to deriving the amount of net deferred tax assets subject to limitation under the guidelines.

5

One non-GAAP performance metric that management believes is useful in analyzing underlying performance trends, particularly in times of economic stress, is adjusted pre-tax, pre-provision income. Adjusted pre-tax, pre-provision income, as defined by management, represents net (loss) income excluding income tax expense (benefit), the provision for loan and lease losses, gains on sale and other-then-temporary impairment charge (OTTI) of investment securities, fair value adjustments on derivatives and liabilities measured at fair value, equity in earnings or losses of unconsolidated entities as well as certain items identified as unusual, non-recurring or non-operating.

From time to time, revenue and expenses are impacted by items judged by management to be outside of ordinary banking activities and/or by items that, while they may be associated with ordinary banking activities, are so unusually large that management believes that a complete analysis of its Corporation’s performance requires consideration also of results that exclude such amounts. These items result from factors originating outside the Corporation such as regulatory actions or assessments, and may result from unusual management decisions, such as the early extinguishment of debt.

The following table reconciles income (loss) before income taxes (GAAP) to adjusted pre-tax, pre-provision income:

(Dollars in thousands)	Quarter Ended
	June 30, 2012			March 31, 2012			December 31, 2011			September 30, 2011			June 30, 2011
Income (loss) before income taxes	$	10,901		$	(11,049	)	$	(14,600	)	$	(21,158	)	$	(12,318	)
Add: Provision for loan and lease losses		24,884			36,197			41,987			46,446			59,184
Less: Net loss (gain) on sale and OTTI of investment securities		143			1,207			1,014			(12,156	)		(21,342	)
Add: Unrealized (gain) loss on derivatives instruments and liabilities measured at fair value		(506	)		(283	)		1,746			2,555			1,162
Add: Contingency adjustment - tax credits		—			2,489			—			—			—
Add: Loss on early extinguishment of borrowings		—			—			—			9,012			1,823
Add: Equity in losses (earnings) of unconsolidated entities		2,491			6,236			(1,666	)		4,357			1,536
Adjusted Pre-tax, pre-provision income (1)	$	37,913		$	34,797		$	28,482		$	29,056		$	30,045
Change from most recent prior quarter - amount	$	3,116		$	6,315		$	(574	)	$	(989	)	$	(11,920	)
Change from most recent prior quarter - percent		9.0	%		22.2	%		-2.0	%		-3.3	%		-28.4	%

Item 7.01. Regulation FD Disclosure

The executive officers of First BanCorp intend to use the materials filed herewith, in whole or in part, in one or more meetings with investors and analysts. A copy of the investor presentation is attached hereto as Exhibit 99.2.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit	Description of Exhibit
99.1	Press Release dated July 31, 2012 - First BanCorp Announces Earnings for the Quarter Ended June 30, 2012
99.2	Investor Presentation dated July 2012

6

Exhibits 99.1 and 99.2 referenced therein, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall Exhibits 99.1 and 99.2 be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended.

7

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: July 31, 2012	First BanCorp.
	By:	/s/ Orlando Berges
	Name:	Orlando Berges
	Title:	EVP and Chief Financial Officer

8

Exhibit Index

Exhibit	Description of Exhibit
99.1	Press Release dated July 31, 2012 - First BanCorp Announces Earnings for the Quarter Ended June 30, 2012
99.2	Investor Presentation dated July 2012

9

EX-99.1

Exhibit 99.1

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012

SAN JUAN, Puerto Rico – July 31, 2012 – First BanCorp. (the “Corporation”) (NYSE: FBP), the bank holding company for FirstBank Puerto Rico (“FirstBank” or “the Bank”), today reported a net income of $9.4 million for the second quarter of 2012, or $0.05 per diluted share, an improvement compared to a net loss of $13.2 million, or $0.06 loss per diluted share, for the first quarter of 2012 and a net loss of $14.9 million, or $1.04 loss per diluted share for the second quarter of 2011. The net loss for the six-month period ended June 30, 2012 was $3.8 million, or $0.02 loss per diluted share, compared to a net loss of $43.3 million, or $2.71 loss per diluted share for the same period in 2011.

2012 Second Quarter Highlights Compared with 2012 First Quarter:

• Net income of $9.4 million is the first profit for a quarter since the 2009 first quarter.

• Growth in Net Interest Income and Margin:

• Net interest income, excluding fair value adjustments of $0.5 million, increased by $6.6 million.

• Net interest margin, excluding fair value adjustments, increased by 24 basis points to 3.44%.

• Provision for loan and lease losses of $24.9 million, down $11.3 million.

• Stable non-performing assets levels:

• Total non-performing assets decreased by $24.2 million.

• The level of non-performing loans decreased for the ninth consecutive quarter, declining by $53.7 million from the previous quarter to $1.07 billion.

• Inflows of loans into non-performing status declined by $18.5 million, or 15% from the previous quarter.

• Increase of $5.5 million in Non-interest income:

• Non-cash charge associated with the equity in losses of unconsolidated entities of $2.5 million, compared to losses of $6.2 million in the first quarter of 2012.

• Interchange and other related fees of $1.0 million earned on the newly acquired credit cards portfolio.

• Increase of $1.7 million in Non-Interest Expenses led by higher losses on real estate owned (REO) operations and credit card processing expenses.

• Strong capital position:

• Total capital, Tier 1 capital and Leverage ratios of the Corporation of 17.30%,15.98% and 12.51%, respectively, as of June 30, 2012 compared to 17.36%, 16.04% and 12.31%, respectively, as of March 31, 2012.

• Total capital, Tier 1 capital and Leverage ratios of the Corporation’s wholly owned banking subsidiary, FirstBank of 16.80%, 15.48% and 12.13%, respectively, as of June 30, 2012 compared to 16.83%, 15.50%, and 11.91%, respectively, as of March 31, 2012.

• 13.12% Tier 1 common risk-based capital ratio as of June 30, 2012, compared to 13.14% as of March 31, 2012.

• 10.29% tangible common equity ratio as of June 30, 2012, compared to 10.20% as of March 31, 2012.

• Growth of $147.7 million, or 2%, in total deposits, excluding brokered certificates of deposit (CDs), while brokered CDs decreased by $155.8 million, or 4%.

• Re-entered the credit card business with the acquisition of an approximate $406 million portfolio of First Bank-branded credit card accounts from FIA Card Services.

• Strong loan originations amounted to $838 million for the second quarter.

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 2 of 30

Aurelio Alemán, President and Chief Executive Officer of First BanCorp., commented: “We are very pleased to report our first quarterly profit in over three years. We are encouraged by the improvements achieved which reflect the prudent and proactive strategies that we have employed, and demonstrate the commitment of the management team and the progress in the execution of our plan to return to profitability. This plan includes the expansion of our products mix, improvement on net interest margin, reduction of our risk profile, and improvements in the quality of earnings and operating metrics.

Over the past twelve months we have focused on the execution of our strategic plan and have achieved significant milestones; Pre-tax, pre-provision income up 26% from the same quarter last year, Net Interest Margin at 3.44% is up significantly from 2.64% last year, Non-brokered deposits up 10% from last year, Loan originations (excluding the credit card transaction) up from a year ago, Non-performing Assets down 6% from a year ago, and Net charge offs down 35% from the same quarter a year ago.

Our improved performance this quarter reflects lower estimated credit losses on the commercial and construction loan portfolios and our focus on more profitable and diversified banking activities. Improvements in the funding mix through growth in lower cost deposits and deposit pricing strategies continued to impact net interest income and margin favorably. Our strategies to increase non-brokered deposits were successful, as these grew by $147.7 million during the second quarter. Increased loan origination activity also added to our revenues growth opportunities. The acquisition of the $406 million credit card portfolio of approximately 140,000 active First Bank branded credit card accounts was a significant contributor to our improvement in net interest income, non-interest income and efficiency ratios, and provides additional cross sell opportunities for our continued organic core deposit growth.

Many of our credit quality performance metrics remain stable; nevertheless, non-performing asset levels remain elevated and continue to be a challenge in the current economic environment. Improving asset quality continues to be our first priority.”

Mr. Alemán stated further: “Our capital levels continue to be strong and we will continue to execute our strategic plan, as we did during the first half of the year, by making selective investments in initiatives to achieve consistent, profitable growth in quarters and years to come. We will remain disciplined in our pricing of loans and deposits, and will stay focused on increasing customer cross-sell and work to improve our credit quality, risk profile and operating efficiency. Disciplined management of capital in order to generate an appropriate return to our stockholders is our priority.”

The following table provides details with respect to the calculation of the earnings (loss) per common share for the quarters ended June 30, 2012, March 31, 2012 and June 30, 2011 and for the six-month periods ended June 30, 2012 and June 30, 2011:

(In thousands, except per share information)	Quarter Ended								Six-month Period Ended
	June 30,		March 31,			June 30,			June 30,			June 30,
	2012		2012			2011			2012			2011
Net income (loss)	$	9,356	$	(13,182	)	$	(14,924	)	$	(3,826	)	$	(43,344	)
Cumulative convertible preferred stock dividend (Series G)		—		—			(5,302	)		—			(10,604	)
Preferred stock discount accretion (Series G)		—		—			(1,979	)		—			(3,694	)
Net income (loss) attributable to common stockholders	$	9,356	$	(13,182	)	$	(22,205	)	$	(3,826	)	$	(57,642	)
Average common shares outstanding		205,415		205,217			21,303			205,316			21,303
Average potential common shares		537		—			—			—			—
Average common shares outstanding - assuming dilution		205,952		205,217			21,303			205,316			21,303
Basic earnings (loss) per common share	$	0.05	$	(0.06	)	$	(1.04	)	$	(0.02	)	$	(2.71	)
Diluted earnings (loss) per common share	$	0.05	$	(0.06	)	$	(1.04	)	$	(0.02	)	$	(2.71	)

This press release includes certain non-GAAP financial measures and should be read in conjunction with the accompanying tables (Exhibit A), which are an integral part of this press release.

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 3 of 30

Adjusted Pre-Tax, Pre-Provision Income Trends

One metric that Management believes is useful in analyzing performance is the level of earnings adjusted to exclude tax expense, the provision for loan and lease losses, securities gains or losses, fair value adjustments on derivatives and liabilities measured at fair value and equity in earnings or losses of unconsolidated entities. In addition, from time to time, earnings are adjusted for items judged by management to be outside of ordinary banking activities and/or by items that, while they may be associated with ordinary banking activities, are so unusually large that management believes that a complete analysis of its Corporation’s performance requires consideration also of results that exclude such amounts (see “Adjusted Pre-Tax, Pre-Provision Income” in “Basis of Presentation” for a full discussion.)

The following table shows adjusted pre-tax, pre-provision income of $37.9 million in the 2012 second quarter, up from $34.8 million in the prior quarter:

Pre-Tax, Pre-Provision Income

(Dollars in thousands)	Quarter Ended
	June 30, 2012			March 31, 2012			December 31, 2011			September 30, 2011			June 30, 2011
Income (loss) before income taxes	$	10,901		$	(11,049	)	$	(14,600	)	$	(21,158	)	$	(12,318	)
Add: Provision for loan and lease losses		24,884			36,197			41,987			46,446			59,184
Less: Net loss (gain) on sale and OTTI of investment securities		143			1,207			1,014			(12,156	)		(21,342	)
Add: Unrealized (gain) loss on derivatives instruments and liabilities measured at fair value		(506	)		(283	)		1,746			2,555			1,162
Add: Contingency adjustment - tax credits		—			2,489			—			—			—
Add: Loss on early extinguishment of borrowings		—			—			—			9,012			1,823
Add: Equity in losses (earnings) of unconsolidated entities		2,491			6,236			(1,666	)		4,357			1,536
Adjusted Pre-tax, pre-provision income (1)	$	37,913		$	34,797		$	28,482		$	29,056		$	30,045
Change from most recent prior quarter - amount	$	3,116		$	6,315		$	(574	)	$	(989	)	$	(11,920	)
Change from most recent prior quarter - percent		9.0	%		22.2	%		-2.0	%		-3.3	%		-28.4	%

(1) See “Basis of Presentation” for definition.

As discussed in the sections that follow, the increase in pre-tax, pre-provision income from the 2012 first quarter primarily reflected: (i) an increase of $6.6 million in net interest income, excluding fair value adjustments of $0.5 million, and (ii) interchange income and other related fees of $1.0 million earned on the recently acquired credit card portfolio from FIA Card Services (FIA). Partially offsetting these increases was a $4.2 million increase in non-interest expenses, excluding a tax-credit contingency adjustment of $2.5 million recorded in the first quarter, led by higher losses on REO operations and credit card processing expenses. This increase reflects higher write-downs to the value of REO properties, increased operational costs attributable to a larger inventory and the impact in the previous quarter of a $1.3 million gain realized on the sale of certain REO commercial properties. Higher marketing expenses and accrued costs related to the administration of the credit card portfolio and related rewards program also contributed to the increase in non-interest expenses. As economic conditions improve and management continues to focus on the execution of its strategic plan, we should start to see a consistent positive trend in pre-tax, pre-provision income. We see opportunities in the second half of 2012 for expansion of net interest margin, through the growth of our consumer portfolio and proper management of deposit growth.

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 4 of 30

Net Interest Income

Net interest income, excluding fair value adjustments on derivatives and financial liabilities measured at fair value (“valuations”), and net interest income on a tax-equivalent basis are non-GAAP measures. (See “Basis of Presentation – Net Interest Income” below for additional information.) The following table reconciles net interest income in accordance with GAAP to net interest income, excluding valuations, and net interest income on a tax-equivalent basis. The table also reconciles net interest spread and net interest margin on a GAAP basis to these items excluding valuations and on a tax-equivalent basis.

(dollars in thousands)
	Quarter Ended
	June 30, 2012			March 31, 2012			December 31, 2011			September 30, 2011			June 30, 2011
Net Interest Income (in thousands)
Interest Income - GAAP	$	153,652		$	152,107		$	156,752		$	158,542		$	163,418
Unrealized loss (gain) on derivative instruments		33			(332	)		(246	)		954			1,185
Interest income excluding valuations		153,685			151,775			156,506			159,496			164,603
Tax-equivalent adjustment		1,634			1,741			1,456			1,521			1,504
Interest income on a tax-equivalent basis excluding valuations		155,319			153,516			157,962			161,017			166,107
Interest Expense - GAAP		44,947			50,241			58,209			64,287			68,983
Unrealized gain (loss) on derivative instruments and liabilities measured at fair value		539			(49	)		(1,992	)		(1,601	)		23
Interest expense excluding valuations		45,486			50,192			56,217			62,686			69,006
Net interest income - GAAP	$	108,705		$	101,866		$	98,543		$	94,255		$	94,435
Net interest income excluding valuations	$	108,199		$	101,583		$	100,289		$	96,810		$	95,597
Net interest income on a tax-equivalent basis excluding valuations	$	109,833		$	103,324		$	101,745		$	98,331		$	97,101
Average Balances (in thousands)
Loans and leases	$	10,183,229		$	10,389,246		$	10,637,523		$	10,832,426		$	10,997,295
Total securities and other short-term investments		2,450,198			2,397,918			2,665,918			2,787,708			3,550,743
Average Interest-Earning Assets	$	12,633,427		$	12,787,164		$	13,303,441		$	13,620,134		$	14,548,038
Average Interest-Bearing Liabilities	$	10,577,054		$	10,725,162		$	11,255,725		$	11,944,454		$	12,809,375
Average Yield/Rate
Average yield on interest-earning assets - GAAP		4.89	%		4.78	%		4.67	%		4.62	%		4.51	%
Average rate on interest-bearing liabilities - GAAP		1.71	%		1.88	%		2.05	%		2.14	%		2.16	%
Net interest spread - GAAP		3.18	%		2.90	%		2.62	%		2.48	%		2.35	%
Net interest margin - GAAP		3.46	%		3.20	%		2.94	%		2.75	%		2.60	%
Average yield on interest-earning assets excluding valuations		4.89	%		4.77	%		4.67	%		4.65	%		4.54	%
Average rate on interest-bearing liabilities excluding valuations		1.73	%		1.88	%		1.98	%		2.08	%		2.16	%
Net interest spread excluding valuations		3.16	%		2.89	%		2.69	%		2.57	%		2.38	%
Net interest margin excluding valuations		3.44	%		3.20	%		2.99	%		2.82	%		2.64	%
Average yield on interest-earning assets on a tax-equivalent basis and excluding valuations		4.94	%		4.83	%		4.71	%		4.69	%		4.58	%
Average rate on interest-bearing liabilities excluding valuations		1.73	%		1.88	%		1.98	%		2.08	%		2.16	%
Net interest spread on a tax-equivalent basis and excluding valuations		3.21	%		2.95	%		2.73	%		2.61	%		2.42	%
Net interest margin on a tax-equivalent basis and excluding valuations		3.50	%		3.25	%		3.03	%		2.86	%		2.68	%

Net interest income, excluding valuations, increased $6.6 million when compared to the first quarter of 2012 driven by the purchase in late May of approximately $406 million of consumer credit cards and further reductions in the overall cost of funding. The acquisition of the credit card portfolio from FIA increased the average balance of consumer loans by approximately $125.7 million and contributed $6.2 million to interest income, including $0.7 million related to the discount accretion recorded as an adjustment to the yield of the purchased portfolio. As this purchase was the main driver for the 12 basis points increase in the yield on total earning assets, the improvement in net interest margin of 24 basis points to 3.44% was also derived from a reduction in the overall cost of funding, achieved through lower deposit pricing and the maturity and prepayment of some high-cost borrowings. Low market interest rates, diligence in managing deposit pricing and an improved deposit mix resulted in the second quarter cost of interest-bearing deposits declining 13 basis points in comparison to the previous quarter. The average rate paid on non-brokered deposits, including interest-bearing checking accounts, savings and retail certificates of deposit (CDs), declined by 12 basis points to 1.13% during the second quarter of 2012 while the average volume increased by $114.0 million. The Corporation continued with its planned reduction of brokered CDs, which decreased by $163.1 million in average balances. These factors combined with the maturity of a $100 million repurchase agreement that carried a cost of 4.38%, the maturity of a $40 million public fund CD that carried a cost of 4.66% and the prepayment of a $15.4 million medium-term note that carried a cost of 6%, resulted in a 15 basis points reduction in the overall cost of funding. Further reductions in interest expense and the average cost of funds could be realized during 2012, as maturing brokered CDs and advances are renewed at lower current rates.

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 5 of 30

The benefit derived from the lower cost of funds and the credit card portfolio was partially offset by: (i) the reduction in the average balance of commercial loans due to significant loans paid-off and repayments and (ii) lower yields on investment securities attributed to calls of $92 million of Puerto Rico government obligations with an average yield of 5.22% not reinvested and maintained in low-yielding cash balances. In addition the decrease in interest income from residential mortgages was driven by the partial reversal of $0.5 million of interest receivable on delinquent residential mortgage loans insured by the Federal Housing Administration (FHA) or guaranteed by the Veterans Administration (VA).

Provision for Loan and Lease Losses

The provision for loan and lease losses for the second quarter of 2012 was $24.9 million, down $11.3 million from the first quarter 2012 provision. The decline in the provision reflected primarily a lower provision for commercial and industrial (“C&I”) and construction loans due to reduced charges to the specific reserve of certain collateral dependent loans, the overall decrease in the size of these portfolios and the improvement in the cumulative charge-off history used for the general reserve determination. The current quarter’s provision for loan and lease losses was $26.8 million less than total net charge-offs, as approximately 67% of charge-offs for commercial and construction loans were against previously established specific reserves and did not require additional provisions (see “Credit Quality” section below for a full discussion.)

Non-Interest Income

	Quarter Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
(In thousands)	2012			2012			2011			2011			2011
Other service charges	$	1,226		$	1,519		$	2,116		$	1,485		$	1,456
Service charges on deposit accounts		3,240			3,247			2,988			3,098			3,054
Mortgage banking activities		4,057			4,475			3,717			3,676			9,336
(Loss) gain on sale of investments, net of impairments		(143	)		(1,207	)		(1,014	)		12,156			21,342
Broker-dealer income		1,347			1,263			381			173			783
Other operating income		6,786			5,414			4,816			6,745			6,250
Loss on early extinguishment of borrowings		—			—			—			(9,012	)		(1,823	)
Equity in (losses) earnings of unconsolidated entities		(2,491	)		(6,236	)		1,666			(4,357	)		(1,536	)
Non-interest income	$	14,022		$	8,475		$	14,670		$	13,964		$	38,862

Non-interest income increased $5.5 million from the 2012 first quarter primarily due to:

• Non-cash charges associated with the equity in losses of unconsolidated entities of approximately $2.5 million recorded in the second quarter, a variance of $3.7 million compared to $6.2 million for the first quarter of 2012. This non-cash adjustment mainly relates to the Bank’s investment in CPG/GS PR NPL, LLC (“CPG/GS”), the entity that purchased $269.2 million of loans from FirstBank in 2011. The Bank holds a 35% subordinated ownership interest in CPG/GS.

• Lower other-than-temporary impairment charge (OTTI) on private label mortgage-backed securities, a variance of $1.1 million.

• Interchange revenues and other related fees of $1.0 million earned on the $406 million credit card portfolio purchased in May and the impact in the previous quarter of a $0.3 million loss realized on the sale of a vacant parcel of land, both included as part of “other operating income” in the table above.

These variances were partially offset by a $0.4 million decrease in revenues from mortgage banking activities driven by a $0.4 million adjustment to the carrying value of servicing assets related to repurchased delinquent FHA/VA insured loans and higher temporary impairments of servicing assets. Nevertheless revenues from sales and securitizations of mortgage loans increased by $0.3 million.

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 6 of 30

Non-Interest Expenses

	Quarter Ended
(In thousands)	June 30, 2012		March 31, 2012		December 31, 2011		September 30, 2011		June 30, 2011
Employees’ compensation and benefits	$	31,101	$	31,611	$	29,254	$	29,375	$	29,407
Occupancy and equipment		15,181		15,676		15,603		15,468		15,603
Deposit insurance premium		11,982		11,987		12,411		13,602		14,125
Other taxes, insurance and supervisory fees		4,755		4,437		4,332		4,859		3,557
Professional fees		5,322		5,179		4,692		5,983		6,072
Business promotion		3,475		2,547		3,482		2,509		3,628
Net loss on REO operations		6,786		3,443		8,602		4,952		5,971
Other		8,340		10,313		7,450		6,183		8,068
Total	$	86,942	$	85,193	$	85,826	$	82,931	$	86,431

Non-interest expenses increased $1.7 million to $86.9 million in the second quarter of 2012 compared to the first quarter of 2012, substantially related to:

• A $3.3 million increase in losses from REO activities, reflecting higher write-downs to the value of REO properties, an increase of $1.7 million, and higher operational costs attributable to a larger inventory, an increase of $0.8 million. In addition, the variance reflects the impact in the previous quarter of a $1.3 million gain realized on the sale of certain commercial REO properties.

• A $0.9 million increase in business promotion expenses, mainly due to higher marketing activities and expenses related to the credit card portfolio rewards program.

• An aggregate increase of $0.7 million in expenses related to the interim servicing of the credit card portfolio and the amortization of the Purchase Credit Card Relationship intangible recognized upon the acquisition of the credit cards portfolio, both included as part of “Other expenses” in the table above.

Partially offset by:

• The impact in the previous quarter of a $2.5 million non-recurring charge associated with a contingency adjustment related to the collectibility of certain tax credits, included as part of “Other expenses” in the table above.

• A $0.5 million decrease in employees’ compensation and benefits expenses, reflecting lower payroll taxes and bonus expenses.

• A $0.5 million decrease in occupancy and equipment expenses driven by a reduction in the depreciation expense from assets which became fully depreciated in the latter part of the previous quarter.

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 7 of 30

Income Taxes

The income tax expense for the second quarter of 2012 amounted to $1.5 million compared to an income tax expense of $2.1 million for the first quarter of 2012, a variance driven by lower taxable income of profitable subsidiaries. As of June 30, 2012, the deferred tax asset, net of a valuation allowance of $366.9 million, amounted to $4.7 million compared to $4.9 million as of March 31, 2012. The Corporation continued to increase the valuation allowance related to deferred tax assets created in connection with the operations of its banking subsidiary FirstBank. Under the Puerto Rico Internal Revenue Code, the Corporation and its subsidiaries are treated as separate taxable entities and are not entitled to file consolidated tax returns; thus, losses of one entity cannot offset income of another entity.

CREDIT QUALITY

(Dollars in thousands)	June 30, 2012			March 31, 2012			December 31, 2011			September 30, 2011			June 30, 2011
Non-performing loans held for investment:
Residential mortgage	$	333,043		$	341,188		$	338,208		$	364,561		$	380,165
Commercial mortgage		239,881			244,391			240,414			188,326			196,037
Commercial and Industrial		255,253			263,604			270,171			315,360			309,888
Construction		202,133			231,071			250,022			270,411			280,286
Consumer and Finance leases		35,378			39,159			39,547			45,031			42,065
Total non-performing loans held for investment		1,065,688			1,119,413			1,138,362			1,183,689			1,208,441
REO		167,341			135,905			114,292			109,514			96,618
Other repossessed property		10,601			12,494			15,392			14,397			14,884
Other assets (1)		64,543			64,543			64,543			64,543			64,543
Total non-performing assets, excluding loans held for sale	$	1,308,173		$	1,332,355		$	1,332,589		$	1,372,143		$	1,384,486
Non-performing loans held for sale		—			—			4,764			5,107			5,087
Total non-performing assets, including loans held for sale (2)	$	1,308,173		$	1,332,355		$	1,337,353		$	1,377,250		$	1,389,573
Past due loans 90 days and still accruing	$	120,585		$	133,191		$	130,816		$	156,775		$	156,919
Non-performing loans held for investment to total loans held for investment		10.35	%		10.87	%		10.78	%		11.13	%		11.23	%
Non-performing assets, excluding non-performing loans held for sale, to total assets, excluding non-performing loans held for sale		10.13	%		10.18	%		10.15	%		10.19	%		9.81	%
Non-performing assets to total assets		10.13	%		10.18	%		10.19	%		10.22	%		9.85	%

(1) Collateral pledged with Lehman Brothers Special Financing, Inc.

(2) Amount excludes purchased credit impaired loans with a fair value of approximately $15.1 million acquired as part of the credit card portfolio acquired from FIA.

Credit quality continued to improve at a slow but steady pace in the second quarter of 2012. Total non-performing loans decreased by $53.7 million led by foreclosures, charge-offs and a decrease in the inflows of non-performing loans. Total non-performing assets, which include repossessed assets, decreased by $24.2 million, or 2%. New non-performing loans inflows of $102.5 million, decreased by $18.5 million, or 15%, compared to inflows of $121.0 million in the prior quarter. Total delinquencies, which include all loans 30 days or more past due and non-accrual loans decreased by $62.6 million and the level of adversely classified commercial and construction loans decreased by $109.3 million, or 9% compared to the prior quarter. The initial fair value of purchased credit-impaired (PCI) loans includes an estimate of credit losses expected to be realized over the remaining lives, therefore, PCI loans with a fair value of approximately $15.1 million acquired as part of the credit card portfolio acquired from FIA are excluded from delinquency and non-performing loan statistics. The net charge-off activity showed an increase of $5.5 million mainly reflecting a higher inventory of residential real estate properties subject to updated appraisals.

Non-Performing Loans and Non-Performing Assets

Total non-performing loans were $1.07 billion at June 30, 2012, which represented 10.35% of total loans held for investment. This represents a decrease of $53.7 million, or 5%, from $1.12 billion, or 10.87% of total loans held for investment at March 31, 2012.

Non-performing construction loans decreased by $28.9 million, or 13%, from the end of the first quarter of 2012, mainly due to the transfer to REO of properties acquired in foreclosure aggregating $19.1 million. Construction

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 8 of 30

loans net charge-offs of $15.2 million in the second quarter also contributed to the decrease in non-performing construction loans. The inflows of non-performing construction loans decreased by $1.96 million from $10.7 million for the first quarter of 2012 to $8.8 million in the second quarter of 2012.

Non-performing C&I loans decreased by $8.4 million, or 3%, on a sequential quarter basis, reflecting primarily foreclosures of approximately $11.1 million, net charge-offs of $8.4 million, borrowers’ payments and payoffs of $5.3 million and loans brought current. The decrease was primarily associated with loans in Puerto Rico. Total inflows of non-performing C&I loans remained stable with a slight increase of $0.7 million from $19.9 million for the first quarter of 2012 to $20.6 million for the second quarter of 2012.

Non-performing residential mortgage loans decreased by $8.1 million, or 2%, from March 31, 2012. The decrease includes approximately $20.8 million of loans with cured delinquencies and also reflects reductions due to foreclosures of $14.6 million and the restoration to accrual status of modified loans that successfully completed a trial performance period aggregating to approximately $10 million. Borrowers’ payments, payoffs and charge-offs also contributed to the decrease. The decrease was primarily concentrated in Puerto Rico. The level of inflows of non-performing residential mortgage loans decreased by 18% from $57.3 million for the first quarter of 2012 to $46.9 million in the second quarter. Approximately $219.6 million, or 66% of total non-performing residential mortgage loans, have been written down to their net realizable value.

Non-performing commercial mortgage loans decreased by $4.5 million, or 2%, from the end of the first quarter of 2012, primarily reflecting both net charge-off activity of $6.3 million and foreclosures of $6.6 million. Most of the decrease was in the United States and the Virgin Islands. Total inflows of non-performing commercial mortgage loans declined 30% from $18.7 million for the first quarter of 2012 to $13.9 million for the second quarter of 2012.

The levels of non-performing consumer loans, including finance leases, showed a $3.8 million decrease during the second quarter of 2012. The decrease was mainly related to a reduction in the boat financing category reflecting both repossessions and borrowers’ payments. The inflows of non-performing consumer loans declined 9% from $14.3 million for the first quarter of 2012 to $13.0 million for the second quarter of 2012.

As of June 30, 2012, approximately $281.8 million, or 26%, of total non-performing loans held for investment have been charged-off to their net realizable value. (See Allowance for Loan and Lease Losses discussion below for additional information.)

The REO portfolio, which is part of non-performing assets, increased by $31.4 million to $167.3 million, including in-substance foreclosures of two construction projects in Puerto Rico amounting to $16.0 million. We expect to see continued movement of credits in and out of REO as we progress in our loan resolution strategies.

The following table shows the activity during the second quarter of 2012 of the REO portfolio by geographic region and type of property:

(In thousands)	As of June 30, 2012
	Puerto Rico									Virgin Islands									Florida								Consolidated
	Residential			Commercial			Construction			Residential			Commercial			Construction			Residential			Commercial			Construction
Beginning Balance	$	54,987		$	31,105		$	5,360		$	6,146		$	3,061		$	18,056		$	4,783		$	8,666		$	3,741	$	135,905
Additions		13,585			16,493			19,075			—			1,183			—			1,049			1,888			—		53,273
Sales		(10,514	)		(1,234	)		(642	)		(166	)		—			—			(1,828	)		(790	)		—		(15,174	)
Fair value adjustments		(1,863	)		(2,098	)		(1,077	)		(1,272	)		(43	)		(304	)		(6	)		—			—		(6,663	)
Ending balance	$	56,195		$	44,266		$	22,716		$	4,708		$	4,201		$	17,752		$	3,998		$	9,764		$	3,741	$	167,341

The over 90-day delinquent, but still accruing loans, excluding loans guaranteed by the U.S. Government, decreased during the second quarter of 2012 by $12.1 million to $37.1 million, or 0.36% of total loans held for investment, at June 30, 2012. Loans 30 to 89 days delinquent increased by $3.8 million, to $277.6 million as of June 30, 2012.

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 9 of 30

Allowance for Loan and Lease Losses

The following table sets forth an analysis of the allowance for loan and lease losses during the periods indicated:

(Dollars in thousands)	June 30, 2012			March 31, 2012			December 31, 2011			September 30, 2011			June 30, 2011
Allowance for loan and lease losses, beginning of period	$	483,943		$	493,917		$	519,687		$	540,878		$	561,695
Provision (recovery) for loan and lease losses:
Residential mortgage		16,368			2,336			8,423			17,744			12,845
Commercial mortgage		142			1,578			21,746			13,324			6,062
Commercial and Industrial		2,427			20,158			5,302			10,437			21,486
Construction		(666	)		7,716			(1,096	)		(2,547	)		21,354
Consumer and finance leases		6,613			4,409			7,612			7,488			(2,563	)
Total provision for loan and lease losses		24,884			36,197			41,987			46,446			59,184
Loans net charge-offs:
Residential mortgage		(14,211	)		(5,731	)		(9,077	)		(15,816	)		(8,937	)
Commercial mortgage		(6,271	)		(3,594	)		(13,555	)		(3,309	)		(3,150	)
Commercial and Industrial		(8,385	)		(12,669	)		(17,285	)		(22,526	)		(10,763	)
Construction		(15,186	)		(15,392	)		(19,492	)		(16,823	)		(47,207	)
Consumer and finance leases		(7,621	)		(8,785	)		(8,348	)		(9,163	)		(9,944	)
Net charge-offs		(51,674	)		(46,171	)		(67,757	)		(67,637	)		(80,001	)
Allowance for loan and lease losses, end of period	$	457,153		$	483,943		$	493,917		$	519,687		$	540,878
Allowance for loan and lease losses to period end total loans held for investment		4.44	%		4.70	%		4.68	%		4.89	%		5.02	%
Net charge-offs (annualized) to average loans outstanding during the period		2.03	%		1.78	%		2.55	%		2.50	%		2.91	%
Provision for loan and lease losses to net charge-offs during the period		0.48x			0.78x			0.62x			0.69x			0.74x

Provision for Loan and Lease Losses

The provision for loan and lease losses of $24.9 million in the second quarter of 2012 was $11.3 million lower than the provision recorded in the first quarter of 2012. The decrease in the provision was principally related to the C&I and construction loan portfolios, reflecting lower charges to specific reserves for collateral dependent loans, the overall reduction in the size of these portfolios and improved charge-off trends. These variances were partially offset by increases in the provision for residential and consumer loans. It is important to note that, despite the total decrease of $26.8 million in the allowance for loan losses, the reserve coverage for non-performing loans has not changed significantly. The allowance for loan losses to total non-performing loans ratio was 42.90% as of June 30, 2012 compared to 43.23% for the prior quarter.

In Puerto Rico, the Corporation recorded a provision for loan and lease losses of $27.0 million, a decrease of $8.2 million compared to the first quarter of 2012. The decrease was mainly related to reductions of $16.0 million in the provision for C&I loans and $2.3 million in the provision for construction loans due to lower charges to specific reserves for certain collateral dependent loans, the reduction in the size of these portfolios and the improvement in the cumulative charge-off history used for the general reserve determination. Partially offsetting these decreases was an $11.2 million increase in the provision for residential mortgage loans, reflecting higher charge-offs and expected increases in loss severities as the Corporation continues with its strategy to accelerate the disposition of REO properties, and an increase of $0.9 million in the provision for consumer loans mainly related to the increase in the size of the portfolio.

The Corporation recorded a reserve release of $0.5 million in the United States for the second quarter of 2012, compared to a release of $4.8 million for the first quarter of 2012. The decrease was mainly attributable to the release in the previous quarter of a $3.3 million reserve related to a $5.3 million non-performing loan paid-off during the first quarter.

With respect to the Virgin Islands portfolio, the Corporation recorded a reserve release of $1.6 million for the second quarter of 2012 compared to a provision of $5.8 million for the first quarter of 2012. The decrease was driven by lower charges to specific reserves for certain commercial construction projects.

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 10 of 30

The following table sets forth information concerning the ratio of the allowance to non-performing loans held for investment as of June 30, 2012 and March 31, 2012 by loan category:

(Dollars in thousands)	Residential Mortgage Loans			Commercial Mortgage Loans			C&I Loans			Construction Loans			Consumer and Finance Leases			Total
As of June 30, 2012
Non-performing loans held for investment charged-off to realizable value	$	219,596		$	14,763		$	31,465		$	13,259		$	2,722		$	281,805
Other non-performing loans held for investment		113,447			225,118			223,788			188,874			32,656			783,883
Total non-performing loans held for investment	$	333,043		$	239,881		$	255,253		$	202,133		$	35,378		$	1,065,688
Allowance to non-performing loans held for investment		20.25	%		42.04	%		65.04	%		33.57	%		155.43	%		42.90	%
Allowance to non-performing loans held for investment, excluding non-performing loans charged-off to realizable value		59.45	%		44.80	%		74.19	%		35.93	%		168.39	%		58.32	%
As of March 31, 2012
Non-performing loans held for investment charged-off to realizable value	$	222,093		$	11,335		$	58,205		$	41,531		$	2,624		$	335,788
Other non-performing loans held for investment		119,095			233,056			205,399			189,540			36,535			783,625
Total non-performing loans held for investment	$	341,188		$	244,391		$	263,604		$	231,071		$	39,159		$	1,119,413
Allowance to non-performing loans held for investment		19.13	%		43.77	%		65.24	%		36.23	%		142.99	%		43.23	%
Allowance to non-performing loans held for investment, excluding non-performing loans charged-off to realizable value		54.82	%		45.90	%		83.73	%		44.16	%		153.26	%		61.76	%

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 11 of 30

The following table sets forth information concerning the composition of the Corporation’s allowance for loan and lease losses as of June 30, 2012 and March 31, 2012 by loan category and by whether the allowance and related provisions were calculated individually for impairment purposes or through a general valuation allowance.

(Dollars in thousands)	Residential Mortgage Loans			Commercial Mortgage Loans			C&I Loans			Construction Loans			Consumer and Finance Leases			Total
As of June 30, 2012
Impaired loans without specific reserves:
Principal balance of loans, net of charge-offs	$	184,198		$	37,042		$	14,279		$	37,735		$	2,804		$	276,058
Impaired loans with specific reserves:
Principal balance of loans, net of charge-offs		415,179			324,259			244,086			152,338			20,574			1,156,436
Allowance for loan and lease losses		49,111			52,591			70,936			34,938			2,284			209,860
Allowance for loan and lease losses to principal balance		11.83	%		16.22	%		29.06	%		22.93	%		11.10	%		18.15	%
Loans with general allowance:
Principal balance of loans		2,164,689			1,117,767			3,479,554			174,861			1,926,750			8,863,621
Allowance for loan and lease losses		18,329			48,255			95,085			32,920			52,704			247,293
Allowance for loan and lease losses to principal balance		0.85	%		4.32	%		2.73	%		18.83	%		2.74	%		2.79	%
Total loans held for investment:
Principal balance of loans	$	2,764,066		$	1,479,068		$	3,737,919		$	364,934		$	1,950,128		$	10,296,115
Allowance for loan and lease losses		67,440			100,846			166,021			67,858			54,988			457,153
Allowance for loan and lease losses to principal balance		2.44	%		6.82	%		4.44	%		18.59	%		2.82	%		4.44	%
As of March 31, 2012
Impaired loans without specific reserves:
Principal balance of loans, net of charge-offs	$	185,194		$	53,854		$	10,356		$	37,895		$	3,139		$	290,438
Impaired loans with specific reserves:
Principal balance of loans, net of charge-offs		415,457			313,679			251,082			184,704			21,672			1,186,594
Allowance for loan and lease losses		47,105			57,932			67,248			46,796			5,495			224,576
Allowance for loan and lease losses to principal balance		11.34	%		18.47	%		26.78	%		25.34	%		25.36	%		18.93	%
Loans with general allowance:
Principal balance of loans		2,198,573			1,133,213			3,782,495			176,457			1,528,015			8,818,753
Allowance for loan and lease losses		18,178			49,044			104,731			36,914			50,500			259,367
Allowance for loan and lease losses to principal balance		0.83	%		4.33	%		2.77	%		20.92	%		3.30	%		2.94	%
Total loans held for investment:
Principal balance of loans	$	2,799,224		$	1,500,746		$	4,043,933		$	399,056		$	1,552,826		$	10,295,785
Allowance for loan and lease losses		65,283			106,976			171,979			83,710			55,995			483,943
Allowance for loan and lease losses to principal balance		2.33	%		7.13	%		4.25	%		20.98	%		3.61	%		4.70	%

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 12 of 30

Net Charge-Offs

Total net charge-offs for the second quarter of 2012 were $51.7 million, or 2.03% of average loans on an annualized basis, up from $46.2 million, or an annualized 1.78%, for the first quarter of 2012. Approximately 67% of construction and commercial charge-offs recorded in the second quarter were against previously established specific reserves.

Residential mortgage loans net charge-offs in the second quarter of 2012 were $14.2 million, or an annualized 2.04% of related average loans, up from $5.7 million, or an annualized 0.82%, in the prior quarter, mainly reflecting a higher inventory of residential real estate properties subject to updated appraisals.

Commercial mortgage loans net charge-offs in the second quarter of 2012 were $6.3 million, or an annualized 1.68% of related average loans, up from $3.6 million, or an annualized 0.92% of related loans, in the first quarter of 2012. Commercial mortgage loans net charge-offs in the second quarter of 2012 were almost equally spread between Puerto Rico and the United States, mainly related to foreclosures and include three relationships with individual charge-offs in excess of $1 million.

C&I loans net charge-offs in the second quarter of 2012 were $8.4 million, or an annualized 0.88% of related average loans, down from $12.7 million, or an annualized 1.25% of related loans, in the first quarter of 2012. Substantially all of the charge-offs recorded in the second quarter were in Puerto Rico spread through several industries, including $3.6 million on two relationships with individual charge-offs in excess of $1 million, both with previously established adequate reserves.

Construction loans net charge-offs in the second quarter of 2012 were $15.2 million, or an annualized 15.21% of related average loans, down from $15.4 million, or an annualized 14.23% of related loans, in the first quarter of 2012. Construction loans net charge-offs include a $12.8 million charge-off on one project in the Virgin Islands with a previously established adequate reserve.

Net charge-offs on consumer loans and finance leases in the second quarter of 2012 were $7.6 million, or an annualized 1.81% of related average loans, compared to $8.8 million, or an annualized 2.26% of average loans in the first quarter of 2012. This decrease reflected the continued high credit quality of originations and an improved ratio also impacted by a larger portfolio led by the newly acquired credit cards portfolio.

The following table presents annualized net charge-offs to average loans held-in-portfolio:

	Quarter Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2012			2012			2011			2011			2011
Residential mortgage		2.04	%		0.82	%		1.29	%		2.24	%		1.24	%
Commercial mortgage		1.68	%		0.92	%		3.44	%		0.84	%		0.81	%
Commercial and Industrial		0.88	%		1.25	%		1.64	%		2.09	%		1.01	%
Construction		15.21	%		14.23	%		16.43	%		12.78	%		28.62	%
Consumer and finance leases		1.81	%		2.26	%		2.13	%		2.30	%		2.43	%
Total loans		2.03	%		1.78	%		2.55	%		2.50	%		2.91	%

The ratios above are based on annualized net charge-offs and are not necessarily indicative of the results expected in subsequent periods.

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 13 of 30

The following table presents annualized net charge-offs to average loans by geographic segment:

	Quarter Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2012			2012			2011			2011			2011
PUERTO RICO:
Residential mortgage		2.42	%		0.95	%		1.15	%		2.50	%		1.39	%
Commercial mortgage		1.18	%		0.98	%		4.25	%		0.99	%		0.34	%
Commercial and Industrial		0.98	%		1.33	%		1.72	%		2.20	%		1.08	%
Construction		3.63	%		15.78	%		19.45	%		15.02	%		6.90	%
Consumer and finance leases		1.73	%		2.28	%		2.22	%		2.33	%		2.49	%
Total loans		1.58	%		1.80	%		2.57	%		2.62	%		1.57	%
VIRGIN ISLANDS:
Residential mortgage		0.08	%		0.08	%		0.27	%		0.19	%		-0.13	%(3)
Commercial mortgage		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Commercial and Industrial		0.00	%		0.03	%		0.00	%		0.00	%		-0.19	%(4)
Construction		42.57	%		19.29	%		12.92	%		9.78	%		77.30	%
Consumer and finance leases		1.07	%		0.90	%		0.14	%		2.34	%		0.75	%
Total loans		6.23	%		3.22	%		2.24	%		1.84	%		14.59	%
FLORIDA:
Residential mortgage		1.91	%		0.90	%		3.76	%		3.27	%		2.07	%
Commercial mortgage		3.32	%		0.93	%		1.98	%		0.62	%		2.00	%
Commercial and Industrial		-3.38	%(1)		0.72	%		3.34	%		2.32	%		0.00	%
Construction		-0.76	%(2)		-33.52	%(2)		0.92	%		6.38	%		38.62	%
Consumer and finance leases		6.92	%		3.59	%		1.20	%		1.02	%		2.85	%
Total loans		2.45	%		0.00	%		2.61	%		1.93	%		4.38	%

(1) For the second quarter of 2012, recoveries in commercial and industrial loans in Florida exceeded charge-offs.

(2) For the second and first quarter of 2012, recoveries in construction loans in Florida exceeded charge-offs.

(3) For the second quarter of 2011, recoveries in residential mortgage loans in the Virgin Islands exceeded charge-offs.

(4) For the second quarter of 2011, recoveries in commercial and industrial loans in the Virgin Islands exceeded charge-offs.

Balance Sheet

Total assets were approximately $12.9 billion as of June 30, 2012, down $172.0 million from March 31, 2012. Proceeds from loan and, MBS repayments and calls of investment securities were used, in part, to repay high cost borrowings. Total investment securities decreased by $307.8 million mainly due to maturities of $300 million of U.S. agency debt securities and calls of $92 million of Puerto Rico Government Obligations. A portion of the proceeds from calls and maturities of investment securities had not been reinvested at the end of the second quarter and was maintained as excess liquidity. The balance of cash and cash equivalents increased by $140.7 million. Total loans, net of the allowance for loan and lease losses, increased by $43.2 million, led by the aforementioned purchase of a $406 million credit card portfolio and an increase in the volume of loan originations, which was partially offset by significant repayments of commercial loans, charge-offs and foreclosures. The Corporation reduced its portfolio of loans granted to government entities by approximately $216 million during the second quarter. The credit card portfolio acquired during the second quarter of 2012 was recorded at an initial fair value of approximately $369 million, and the Corporation recognized a purchased credit card relationship intangible asset of $24.4 million.

The Corporation is experiencing continued loan demand and has continued with its targeted origination strategy. During the second quarter of 2012, total loan originations, including refinancings and draws from existing commitments, amounted to approximately $837.7 million, up from $569.3 million in loan originations in the previous quarter, reflecting increases in residential mortgage, consumer and C&I loan originations. Originations and purchases of residential mortgage loans amounted to $193.6 million in the second quarter, an increase of $31.7 million, or 20%, compared to the first quarter of 2012. Originations of auto loans (including finance leases)

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 14 of 30

amounted to $146.0 million for the second quarter of 2012 compared to $116.8 million for the first quarter of 2012 and other personal loan originations amounted to $91.0 million, an increase of $47.5 million compared to the prior quarter driven by credit cards utilization activity of approximately $34 million. C&I loan originations amounted to $380.9 million, an increase of $151.2 million compared to the prior quarter.

As of June 30, 2012, liabilities totaled $11.5 billion, a decrease of approximately $187.9 million from March 31, 2012. The decline in total liabilities is mainly attributable to a decrease of $155.8 million in brokered CDs. Approximately $577.5 million of brokered CDs with an average cost of 1.93% matured during the second quarter. Approximately $433.4 million of the matured brokered CDs were renewed at an average cost of 0.96%. In addition, the Corporation repaid $20 million of maturing Federal Home Loan Bank advances and $100 million of a matured repurchase agreement and prepaid a $15.4 million medium-term note. The Corporation continued to grow its core deposit base and reduce its reliance on brokered CDs. Core savings accounts (including money market accounts) reflected an increase of $30.5 million, retail CDs increased by $16.6 million and commercial and individual demand deposits increased by $14.1 million since the end of the previous quarter.

The Corporation’s total stockholders’ equity amounted to $1.45 billion as of June 30, 2012, an increase of $15.9 million from March 31, 2012, driven by internal capital generation including net income of $9.4 million and an increase of $6.4 million in other comprehensive income due to higher unrealized gains on available for sale securities.

The Corporation’s total capital, Tier 1 capital, and leverage ratios as of June 30, 2012 of 17.30%, 15.98% and 12.51%, respectively, were down from total capital and Tier 1 capital of 17.36% and 16.04%, respectively, and up from leverage of 12.31% at the end of the prior quarter. Meanwhile, the total capital, Tier 1 capital, and leverage ratios as of June 30, 2012 of its banking subsidiary, FirstBank Puerto Rico, of 16.80%, 15.48% and 12.13%, respectively, were down from total capital and Tier 1 capital of 16.83% and 15.50%, respectively, and up from leverage of 11.91% at the end of the prior quarter. The decrease in total and Tier 1 capital ratios was driven by an increase in risk-weighted assets mainly associated with the acquisition of the credit card portfolio that carried a 100% risk weighting, while most of the commercial loans with government entities that were repaid carried a lower risk-weighting. This was offset, in part, by the internal generation of capital in the second quarter. The increase in the leverage ratio was due to the decrease in average total assets. All of the regulatory capital ratios for the Bank are well above the minimum required under the Consent Order entered into with the Federal Deposit Insurance Corporation (FDIC) and the Office of the Commissioner of Financial Institutions of the Commonwealth of Puerto Rico. Given the Consent Order, however, the Bank cannot be considered to be a well-capitalized institution.

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 15 of 30

Tangible Common Equity

The Corporation’s tangible common equity ratio increased to 10.29% as of June 30, 2012 from 10.20% as of March 31, 2012 and the Tier 1 common equity to risk-weighted assets ratio as of June 30, 2012 decreased to 13.12% from 13.14% as of March 31, 2012.

The following table is a reconciliation of the Corporation’s tangible common equity and tangible assets over the last five quarters to the comparable GAAP items:

(In thousands, except ratios and per share information)
	June 30,			March 31,			December 31,			September 30,			June 30,
	2012			2012			2011			2011			2011
Tangible Equity:
Total equity - GAAP	$	1,448,959		$	1,433,023		$	1,444,144		$	986,847		$	1,009,578
Preferred equity		(63,047	)		(63,047	)		(63,047	)		(430,498	)		(428,703	)
Goodwill		(28,098	)		(28,098	)		(28,098	)		(28,098	)		(28,098	)
Purchased credit card relationship		(24,342	)		—			—			—			—
Core deposit intangible		(10,512	)		(11,100	)		(11,689	)		(12,277	)		(12,866	)
Tangible common equity	$	1,322,960		$	1,330,778		$	1,341,310		$	515,974		$	539,911
Tangible Assets:
Total assets - GAAP	$	12,913,650		$	13,085,623		$	13,127,275		$	13,475,572		$	14,113,973
Goodwill		(28,098	)		(28,098	)		(28,098	)		(28,098	)		(28,098	)
Purchased credit card relationship		(24,342	)		—			—			—			—
Core deposit intangible		(10,512	)		(11,100	)		(11,689	)		(12,277	)		(12,866	)
Tangible assets	$	12,850,698		$	13,046,425		$	13,087,488		$	13,435,197		$	14,073,009
Common shares outstanding		206,134			206,134			205,134			21,304			21,304
Tangible common equity ratio		10.29	%		10.20	%		10.25	%		3.84	%		3.84	%
Tangible book value per common share	$	6.42		$	6.46		$	6.54		$	24.22		$	25.34

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 16 of 30

The following table reconciles stockholders’ equity (GAAP) to Tier 1 common equity:

(Dollars in thousands)	As of
	June 30,			March 31,			December 31,			September 30,			June 30,
	2012			2012			2011			2011			2011
Tier 1 Common Equity:
Total equity - GAAP	$	1,448,959		$	1,433,023		$	1,444,144		$	986,847		$	1,009,578
Qualifying preferred stock		(63,047	)		(63,047	)		(63,047	)		(430,498	)		(428,703	)
Unrealized gain on available-for-sale securities (1)		(26,623	)		(20,233	)		(19,234	)		(13,957	)		(12,659	)
Disallowed deferred tax asset (2)		(41	)		(25	)		—			(267	)		(272	)
Goodwill		(28,098	)		(28,098	)		(28,098	)		(28,098	)		(28,098	)
Core deposit intangible		(10,512	)		(11,100	)		(11,689	)		(12,277	)		(12,866	)
Cumulative change gain in fair value of liabilities accounted for under a fair value option		—			(2,434	)		(2,009	)		(952	)		(1,889	)
Other disallowed assets		(2,917	)		(807	)		(922	)		(907	)		(808	)
Tier 1 common equity	$	1,317,721		$	1,307,279		$	1,319,145		$	499,890		$	524,283
Total risk-weighted assets	$	10,046,284		$	9,947,559		$	10,180,226		$	10,432,804		$	10,630,162
Tier 1 common equity to risk-weighted assets ratio		13.12	%		13.14	%		12.96	%		4.79	%		4.93	%

1- Tier 1 capital excludes net unrealized gains (losses) on available-for-sale debt securities and net unrealized gains on available-for-sale equity securities with readily determinable fair values, in accordance with regulatory risk-based capital guidelines. In arriving at Tier 1 capital, institutions are required to deduct net unrealized losses on available-for-sale equity securities with readily determinable fair values, net of tax.

2- Approximately $12 million of the Corporation’s deferred tax assets at June 30, 2012 (March 31, 2012 - $12 million; December 31, 2011 - $13 million; September 30, 2011 - $12 million; June 30, 2011 - $11 million) was included without limitation in regulatory capital pursuant to the risk-based capital guidelines, while approximately $41k of such assets at June 30, 2012 (March 31, 2012 - $25k; December 31, 2011 - $0; September 30, 2011 - $0.3 million; June 30, 2011 - $0.3 million) exceeded the limitation imposed by these guidelines and, as “disallowed deferred tax assets,” was deducted in arriving at Tier 1 capital. According to regulatory capital guidelines, the deferred tax assets that are dependent upon future taxable income are limited for inclusion in Tier 1 capital to the lesser of: (i) the amount of such deferred tax asset that the entity expects to realize within one year of the calendar quarter end-date, based on its projected future taxable income for that year, or (ii) 10% of the amount of the entity’s Tier 1 capital. Approximately $7 million of the Corporation’s other net deferred tax liability at June 30, 2012 (March 31, 2012 - $7 million; December 31, 2011 - $8 million; September 30, 2011 - $7 million; June 30, 2011 - $5 million) represented primarily the deferred tax effects of unrealized gains and losses on available-for-sale debt securities, which are permitted to be excluded prior to deriving the amount of net deferred tax assets subject to limitation under the guidelines.

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 17 of 30

Conference Call / Webcast Information

First BanCorp’s senior management will host an earnings conference call and live webcast on Thursday, August 2, 2012, at 10:00 a.m. (Eastern Time). The call may be accessed via a live Internet webcast through the investor relations section of the Corporation’s website: www.firstbankpr.com or through a dial-in telephone number at (877) 317-6789 or (412) 317–6789. Listeners are recommended to go to the website at least 15 minutes prior to the call to download and install any necessary software. A replay of the webcast will be archived in the investor relations section of First BanCorp’s website, www.firstbankpr.com, until August 2, 2013. A telephone replay will be available one hour after the end of the conference call through 9:00 a.m. Eastern time September 3, 2012 at (877) 344-7529 or (412) 317-0088. The conference number is 10016191.

Safe Harbor

This press release may contain “forward-looking statements” concerning the Corporation’s future economic performance. The words or phrases “expect,” “anticipate,” “look forward,” “should,” “believes” and similar expressions are meant to identify “forward-looking statements” within the meaning of Section 27A of the Private Securities Litigation Reform Act of 1995, and are subject to the safe harbor created by such section. The Corporation wishes to caution readers not to place undue reliance on any such “forward-looking statements,” which speak only as of the date made, and to advise readers that various factors, including, but not limited to, the following could cause actual results to differ materially from those expressed in, or implied by such forward-looking statements: uncertainty about whether the Corporation and FirstBank will be able to fully comply with the written agreement dated June 3, 2010 that the Corporation entered into with the Federal Reserve Bank of New York (“FED”) and the order dated June 2, 2010 that FirstBank entered into with the FDIC and the Office of the Commissioner of Financial Institutions of the Commonwealth of Puerto Rico that, among other things, require FirstBank to maintain certain capital levels and reduce its special mention, classified, delinquent and non-performing assets; the risk of being subject to possible additional regulatory actions; uncertainty as to the availability of certain funding sources, such as retail brokered CDs; the Corporation’s reliance on brokered CDs and its ability to obtain, on a periodic basis, approval from the FDIC to issue brokered CDs to fund operations and provide liquidity in accordance with the terms of the FDIC Order; the risk of not being able to fulfill the Corporation’s cash obligations or resume paying dividends to the Corporation’s stockholders in the future due to the Corporation’s inability to receive approval from the FED to receive dividends from FirstBank or FirstBank’s failure to generate sufficient cash flow to make a dividend payment to the Corporation; the strength or weakness of the real estate markets and of the consumer and commercial credit sectors and their potential impact on the credit quality of the Corporation’s loans and other assets, including the Corporation’s construction and commercial real estate loan portfolios, which have contributed and may continue to contribute to, among other things, the high levels of non-performing assets, charge-offs and the provision expense and may subject the Corporation to further risk from loan defaults and foreclosures; adverse changes in general economic conditions in the U.S. and in Puerto Rico, including the interest rate environment, market liquidity, housing absorption rates, real estate prices and disruptions in the U.S. capital markets, which may reduce interest margins, impact funding sources, affect demand for all of the Corporation’s products and services and reduce the Corporation’s revenues, earnings and the value of the Corporation’s assets; an adverse change in the Corporation’s ability to attract new clients and retain existing ones; a decrease in demand for the Corporation’s products and services and lower revenues and earnings because of the continued recession in Puerto Rico and the current fiscal problems and budget deficit of the Puerto Rico government; uncertainty about regulatory and legislative changes for financial services companies in Puerto Rico, the U.S. and the U.S. and British Virgin Islands, which could affect the Corporation’s financial condition or performance and could cause the Corporation’s actual results for future periods to differ materially from prior results and anticipated or projected results; uncertainty about the effectiveness of the various actions undertaken to stimulate the U.S. economy and stabilize the U.S. financial markets, and the impact such actions may have on the Corporation’s business, financial condition and results of operations; changes in the fiscal and monetary policies and regulations of the federal government, including those determined by the Federal Reserve, the FDIC, government-sponsored housing agencies and regulators in Puerto Rico and the U.S. and British Virgin Islands; the risk of possible failure or circumvention of controls and procedures and the risk that the Corporation’s risk management policies may not be adequate; the risk that the FDIC may further increase the deposit insurance premium and/or

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 18 of 30

require special assessments to replenish its insurance fund, causing an additional increase in the Corporation’s non-interest expense; risks of not being able to recover the assets pledged to Lehman Brothers Special Financing, Inc.; the impact on the Corporation’s results of operations and financial condition associated with acquisitions and dispositions; a need to recognize additional impairments on financial instruments or goodwill relating to acquisitions; risks that downgrades in the credit ratings of the Corporation’s long-term senior debt will adversely affect the Corporation’s ability to access necessary external funds; the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on the Corporation’s businesses, business practices and cost of operations; and general competitive factors and industry consolidation. The Corporation does not undertake, and specifically disclaims any obligation, to update any “forward-looking statements” to reflect occurrences or unanticipated events or circumstances after the date of such statements except as required by the federal securities laws.

Basis of Presentation

Use of Non-GAAP Financial Measures

This press release contains non-GAAP financial measures. Non-GAAP financial measures are set forth when management believes they will be helpful to an understanding of the Corporation’s results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the text or in the attached tables to this earnings release.

Tangible Common Equity Ratio and Tangible Book Value per Common Share

The tangible common equity ratio and tangible book value per common share are non-GAAP measures generally used by the financial community to evaluate capital adequacy. Tangible common equity is total equity less preferred equity, goodwill, core deposit intangibles and purchased credit card relationship intangible. Tangible assets are total assets less goodwill, core deposit intangibles and purchased credit card relationship intangible. Management and many stock analysts use the tangible common equity ratio and tangible book value per common share in conjunction with more traditional bank capital ratios to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, typically stemming from the use of the purchase method of accounting for mergers and acquisitions. Neither tangible common equity nor tangible assets, or the related measures should be considered in isolation or as a substitute for stockholders’ equity, total assets or any other measure calculated in accordance with GAAP. Moreover, the manner in which the Corporation calculates its tangible common equity, tangible assets and any other related measures may differ from that of other companies reporting measures with similar names.

Tier 1 Common Equity to Risk-Weighted Assets Ratio

The Tier 1 common equity to risk-weighted assets ratio is calculated by dividing (a) tier 1 capital less non-common elements including qualifying perpetual preferred stock and qualifying trust preferred securities by (b) risk-weighted assets, which assets are calculated in accordance with applicable bank regulatory requirements. The Tier 1 common equity ratio is not required by GAAP or on a recurring basis by applicable bank regulatory requirements. However, this ratio will be required under Basel III capital standards as proposed. Management is currently monitoring this ratio, along with the other ratios discussed above, in evaluating the Corporation’s capital levels and believes that, at this time, the ratio may be of interest to investors.

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 19 of 30

Adjusted Pre-Tax, Pre-Provision Income

One non-GAAP performance metric that management believes is useful in analyzing underlying performance trends, particularly in times of economic stress, is adjusted pre-tax, pre-provision income. Adjusted pre-tax, pre-provision income, as defined by management, represents net (loss) income excluding income tax expense (benefit), the provision for loan and lease losses, gains on sale and OTTI of investment securities, fair value adjustments on derivatives and liabilities measured at fair value, equity in earnings or losses of unconsolidated entities as well as certain items identified as unusual, non-recurring or non-operating.

From time to time, revenue and expenses are impacted by items judged by management to be outside of ordinary banking activities and/or by items that, while they may be associated with ordinary banking activities, are so unusually large that management believes that a complete analysis of its Corporation’s performance requires consideration also of results that exclude such amounts. These items result from factors originating outside the Corporation such as regulatory actions/assessments, and may result from unusual management decisions, such as the early extinguishment of debt.

Net Interest Income, Excluding Valuations and on a Tax-Equivalent Basis

Net interest income, interest rate spread and net interest margin are reported excluding the changes in the fair value of derivative instruments and financial liabilities elected to be measured at fair value on a tax equivalent basis. The presentation of net interest income excluding valuations provides additional information about the Corporation’s net interest income and facilitates comparability and analysis. The changes in the fair value of derivative instruments and unrealized gains and losses on liabilities measured at fair value have no effect on interest due or interest earned on interest-bearing liabilities or interest-earning assets, respectively. The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a marginal income tax rate. Income from tax-exempt earning assets is increased by an amount equivalent to the taxes that would have been paid if this income had been taxable at statutory rates. Management believes that it is a standard practice in the banking industry to present net interest income, interest rate spread and net interest margin on a fully tax equivalent basis. This adjustment puts all earning assets, most notably tax-exempt securities and certain loans, on a common basis that facilitates comparison of results to results of peers.

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 20 of 30

FIRST BANCORP.

Condensed Consolidated Statements of Financial Condition

	As of
	June 30,			March 31,			December 31,
(In thousands, except for share information)	2012			2012			2011
ASSETS
Cash and due from banks	$	518,725		$	380,065		$	206,897
Money market investments:
Federal funds sold		—			1,069			2,603
Time deposits with other financial institutions		1,055			955			955
Other short-term investments		239,123			236,116			236,111
Total money market investments		240,178			238,140			239,669
Investment securities available for sale, at fair value		1,541,525			1,843,484			1,923,268
Other equity securities		32,141			37,951			37,951
Total investment securities		1,573,666			1,881,435			1,961,219
Investment in unconsolidated entities		34,499			36,990			43,401
Loans, net of allowance for loan and lease losses of $457,153 (March 31, 2012 - $483,943; December 31, 2011 - $493,917)		9,838,962			9,811,842			10,065,475
Loans held for sale, at lower of cost or market		60,393			44,352			15,822
Total loans, net		9,899,355			9,856,194			10,081,297
Premises and equipment, net		185,721			189,966			194,942
Other real estate owned		167,341			135,905			114,292
Accrued interest receivable on loans and investments		51,958			47,840			49,957
Other assets		242,207			319,088			235,601
Total assets	$	12,913,650		$	13,085,623		$	13,127,275
LIABILITIES
Deposits:
Non-interest-bearing deposits	$	776,947		$	761,744		$	705,789
Interest-bearing deposits		9,123,226			9,146,500			9,201,965
Total deposits		9,900,173			9,908,244			9,907,754
Securities sold under agreements to repurchase		900,000			1,000,000			1,000,000
Advances from the Federal Home Loan Bank (FHLB)		333,440			353,440			367,440
Notes payable		—			16,016			23,342
Other borrowings		231,959			231,959			231,959
Accounts payable and other liabilities		99,119			142,941			152,636
Total liabilities		11,464,691			11,652,600			11,683,131
STOCKHOLDERS’ EQUITY
Preferred Stock, authorized 50,000,000 shares: issued 22,828,174 shares; outstanding 2,521,872; aggregate liquidation value $63,047		63,047			63,047			63,047
Common stock, $0.10 par value, authorized 2,000,000,000 shares; issued 206,629,311 (March 31, 2012 - 206,629,311 shares issued; December 31, 2011 - 205,794,024 shares issued)		20,663			20,663			20,579
Less: Treasury stock (at par value)		(49	)		(49	)		(66	)
Common stock outstanding, 206,134,458 shares outstanding (March 31, 2012 - 206,134,458 shares outstanding; December 31, 2011 - 205,134,171 shares outstanding)		20,614			20,614			20,513
Additional paid-in capital		885,130			884,938			884,002
Retained earnings		453,558			444,202			457,384
Accumulated other comprehensive income		26,610			20,222			19,198
Total stockholders’ equity		1,448,959			1,433,023			1,444,144
Total liabilities and stockholders’ equity	$	12,913,650		$	13,085,623		$	13,127,275

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 21 of 30

FIRST BANCORP.

Condensed Consolidated Statements of Income (Loss)

	Quarter Ended									Six-Month Period Ended
(In thousands, except per share information)	June 30, 2012			March 31, 2012			June 30, 2011			June 30, 2012			June 30, 2011
Net interest income:
Interest income	$	153,652		$	152,107		$	163,418		$	305,759		$	344,321
Interest expense		44,947			50,241			68,983			95,188			143,607
Net interest income		108,705			101,866			94,435			210,571			200,714
Provision for loan and lease losses		24,884			36,197			59,184			61,081			147,916
Net interest income after provision for loan and lease losses		83,821			65,669			35,251			149,490			52,798
Non-interest income:
Other service charges		1,226			1,519			1,456			2,745			3,174
Service charges on deposit accounts		3,240			3,247			3,054			6,487			6,386
Mortgage banking activities		4,057			4,475			9,336			8,532			15,927
Net (loss) gain on investments and impairments		(143	)		(1,207	)		21,342			(1,350	)		40,683
Loss on early extinguishment of borrowings		—			—			(1,823	)		—			(1,823	)
Equity in losses of unconsolidated entities		(2,491	)		(6,236	)		(1,536	)		(8,727	)		(1,536	)
Other non-interest income		8,133			6,677			7,033			14,810			16,536
Total non-interest income		14,022			8,475			38,862			22,497			79,347
Non-interest expenses:
Employees’ compensation and benefits		31,101			31,611			29,407			62,712			59,846
Occupancy and equipment		15,181			15,676			15,603			30,857			30,853
Business promotion		3,475			2,547			3,628			6,022			6,292
Professional fees		5,322			5,179			6,072			10,501			11,209
Taxes, other than income taxes		3,435			3,416			3,278			6,851			6,533
Insurance and supervisory fees		13,302			13,008			14,404			26,310			29,581
Net loss on real estate owned (REO) operations		6,786			3,443			5,971			10,229			11,471
Other non-interest expenses		8,340			10,313			8,068			18,653			13,512
Total non-interest expenses		86,942			85,193			86,431			172,135			169,297
Income (loss) before income taxes		10,901			(11,049	)		(12,318	)		(148	)		(37,152	)
Income tax expense		(1,545	)		(2,133	)		(2,606	)		(3,678	)		(6,192	)
Net income (loss)	$	9,356		$	(13,182	)	$	(14,924	)	$	(3,826	)	$	(43,344	)
Net income (loss) attributable to common stockholders	$	9,356		$	(13,182	)	$	(22,205	)	$	(3,826	)	$	(57,642	)
Earnings (loss) per common share:
Basic	$	0.05		$	(0.06	)	$	(1.04	)	$	(0.02	)	$	(2.71	)
Diluted	$	0.05		$	(0.06	)	$	(1.04	)	$	(0.02	)	$	(2.71	)

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 22 of 30

About First BanCorp.

First BanCorp. is the parent corporation of FirstBank Puerto Rico, a state-chartered commercial bank with operations in Puerto Rico, the Virgin Islands and Florida, and of FirstBank Insurance Agency. First BanCorp. and FirstBank Puerto Rico operate within U.S. banking laws and regulations. The Corporation operates a total of 153 branches, stand-alone offices and in-branch service centers throughout Puerto Rico, the U.S. and British Virgin Islands, and Florida. Among the subsidiaries of FirstBank Puerto Rico are First Federal Finance Corp., a small loan company; FirstBank Puerto Rico Securities, a broker-dealer subsidiary; First Management of Puerto Rico; and FirstMortgage, Inc., a mortgage origination company. In the U.S. Virgin Islands, FirstBank operates First Express, a small loan company. First BanCorp’s common shares trade on the New York Stock Exchange under the symbol FBP. Additional information about First BanCorp. may be found at www.firstbankpr.com.

###

First BanCorp.

John B. Pelling III

Investor Relations Officer

john.pelling@firstbankpr.com

(305) 577-6000 Ext. 162

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 23 of 30

EXHIBIT A

Table 1 – Selected Financial Data

(In thousands, except for per share and financial ratios)	Quarter Ended									Six-Month Period Ended
	June 30, 2012			March 31, 2012			June 30, 2011			June 30, 2012			June 30, 2011
Condensed Income Statements:
Total interest income	$	153,652		$	152,107		$	163,418		$	305,759		$	344,321
Total interest expense		44,947			50,241			68,983			95,188			143,607
Net interest income		108,705			101,866			94,435			210,571			200,714
Provision for loan and lease losses		24,884			36,197			59,184			61,081			147,916
Non-interest income		14,022			8,475			38,862			22,497			79,347
Non-interest expenses		86,942			85,193			86,431			172,135			169,297
Income (loss) before income taxes		10,901			(11,049	)		(12,318	)		(148	)		(37,152	)
Income tax expense		(1,545	)		(2,133	)		(2,606	)		(3,678	)		(6,192	)
Net income (loss)		9,356			(13,182	)		(14,924	)		(3,826	)		(43,344	)
Net income (loss) attributable to common stockholders - basic		9,356			(13,182	)		(22,205	)		(3,826	)		(57,642	)
Net income (loss) attributable to common stockholders - diluted		9,356			(13,182	)		(22,205	)		(3,826	)		(57,642	)
Per Common Share Results:
Net earnings (loss) per share basic	$	0.05		$	(0.06	)	$	(1.04	)	$	(0.02	)	$	(2.71	)
Net earnings (loss) per share diluted	$	0.05		$	(0.06	)	$	(1.04	)	$	(0.02	)	$	(2.71	)
Cash dividends declared	$	—		$	—		$	—		$	—		$	—
Average shares outstanding		205,415			205,217			21,303			205,316			21,303
Average shares outstanding diluted		205,952			205,217			21,303			205,316			21,303
Book value per common share	$	6.72		$	6.65		$	27.27		$	6.72		$	27.27
Tangible book value per common share (1)	$	6.42		$	6.46		$	25.34		$	6.42		$	25.34
Selected Financial Ratios (In Percent):
Profitability:
Return on Average Assets		0.29			(0.41	)		(0.41	)		(0.06	)		(0.58	)
Interest Rate Spread (2)		3.21			2.95			2.42			3.08			2.53
Net Interest Margin (2)		3.50			3.25			2.68			3.37			2.79
Return on Average Total Equity		2.62			(3.67	)		(5.81	)		(0.53	)		(8.45	)
Return on Average Common Equity		2.74			(3.84	)		(14.77	)		(0.56	)		(19.11	)
Average Total Equity to Average Total Assets		11.14			11.09			7.01			11.12			6.88
Total capital		17.30			17.36			12.40			17.30			12.40
Tier 1 capital		15.98			16.04			11.08			15.98			11.08
Leverage		12.51			12.31			8.04			12.51			8.04
Tangible common equity ratio (1)		10.29			10.20			3.84			10.29			3.84
Tier 1 common equity to risk-weight assets (1)		13.12			13.14			4.93			13.12			4.93
Dividend payout ratio		—			—			—			—			—
Efficiency ratio (3)		70.84			77.21			64.84			73.86			60.45
Asset Quality:
Allowance for loan and lease losses to loans held for investment		4.44			4.70			5.02			4.44			5.02
Net charge-offs (annualized) to average loans		2.03			1.78			2.91			1.90			2.82
Provision for loan and lease losses to net charge-offs		48.16			78.40			73.98			62.43			92.41
Non-performing assets to total assets		10.13			10.18			9.85			10.13			9.85
Non-performing loans held for investment to total loans held for investment		10.35			10.87			11.23			10.35			11.23
Allowance to total non-performing loans held for investment		42.90			43.23			44.76			42.90			44.76
Allowance to total non-performing loans held for investment excluding residential real estate loans		62.40			62.19			65.30			62.40			65.30
Other Information:
Common Stock Price: End of period	$	3.96		$	4.40		$	4.31		$	3.96		$	4.31

1- Non-GAAP measure. See pages 15-16 for GAAP to Non-GAAP reconciliations.

2- On a tax-equivalent basis. See page 4 for GAAP to Non-GAAP reconciliations and refer to discussions in Tables 2 and 3 below.

3- Non-interest expenses to the sum of net interest income and non-interest income. The denominator includes non-recurring income and changes in the fair value of derivative instruments and financial liabilities measured at fair value.

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 24 of 30

Table 2 – Quarterly Statement of Average Interest-Earning Assets and Average Interest-Bearing Liabilities (On a Tax Equivalent Basis and Excluding Valuations)

(Dollars in thousands)
	Average volume						Interest income (1) / expense						Average rate (1)
Quarter ended	June 30, 2012		March 31, 2012		June 30, 2011		June 30, 2012		March 31, 2012		June 30, 2011		June 30, 2012			March 31, 2012			June 30, 2011
Interest-earning assets:
Money market & other short-term investments	$	656,642	$	502,182	$	558,388	$	456	$	369	$	400		0.28	%		0.30	%		0.29	%
Government obligations (2)		675,729		956,338		1,829,696		3,091		4,078		6,214		1.84	%		1.72	%		1.36	%
Mortgage-backed securities		1,082,175		899,370		1,114,221		8,366		7,435		10,560		3.11	%		3.32	%		3.80	%
Corporate bonds		1,876		2,000		2,000		31		29		29		6.65	%		5.83	%		5.82	%
FHLB stock		32,399		36,651		45,061		353		401		452		4.38	%		4.40	%		4.02	%
Equity securities		1,377		1,377		1,377		—		—		—		0.00	%		0.00	%		0.00	%
Total investments (3)		2,450,198		2,397,918		3,550,743		12,297		12,312		17,655		2.02	%		2.07	%		1.99	%
Residential mortgage loans		2,784,364		2,790,723		2,890,228		36,822		38,740		40,171		5.32	%		5.58	%		5.57	%
Construction loans		399,394		432,550		659,887		2,556		2,659		4,268		2.57	%		2.47	%		2.59	%
C&I and commercial mortgage loans		5,315,831		5,611,554		5,811,917		54,321		56,643		58,921		4.11	%		4.06	%		4.07	%
Finance leases		239,943		243,344		267,816		5,226		5,312		5,570		8.76	%		8.78	%		8.34	%
Consumer loans		1,443,697		1,311,075		1,367,447		44,097		37,850		39,522		12.28	%		11.61	%		11.59	%
Total loans (4) (5)		10,183,229		10,389,246		10,997,295		143,022		141,204		148,452		5.65	%		5.47	%		5.41	%
Total interest-earning assets	$	12,633,427	$	12,787,164	$	14,548,038	$	155,319	$	153,516	$	166,107		4.94	%		4.83	%		4.58	%
Interest-bearing liabilities:
Brokered CDs	$	3,473,457	$	3,636,596	$	5,550,750	$	17,803	$	19,733	$	29,696		2.06	%		2.18	%		2.15	%
Other interest-bearing deposits		5,587,225		5,473,194		5,172,845		15,686		17,001		19,828		1.13	%		1.25	%		1.54	%
Other borrowed funds		1,171,833		1,251,580		1,592,538		8,969		10,217		15,262		3.08	%		3.28	%		3.84	%
FHLB advances		344,539		363,792		493,242		3,028		3,241		4,220		3.53	%		3.58	%		3.43	%
Total interest-bearing liabilities (6)	$	10,577,054	$	10,725,162	$	12,809,375	$	45,486	$	50,192	$	69,006		1.73	%		1.88	%		2.16	%
Net interest income							$	109,833	$	103,324	$	97,101
Interest rate spread														3.21	%		2.95	%		2.42	%
Net interest margin														3.50	%		3.25	%		2.68	%

1- On a tax-equivalent basis. The tax-equivalent yield was estimated by dividing the interest rate spread on exempt assets by 1 less the Puerto Rico statutory tax rate (30% for 2012; 30% for the Corporation’s subsidiaries other than International Banking Entities (IBEs) and 25% for the Corporation’s IBEs in 2011) and adding to it the cost of interest-bearing liabilities. When adjusted to a tax-equivalent basis, yields on taxable and exempt assets are comparable. Changes in the fair value of derivative instruments and unrealized gains or losses on liabilities measured at fair value are excluded from interest income and interest expense because the changes in valuation do not affect interest paid or received.

2- Government obligations include debt issued by government sponsored agencies.

3- Unrealized gains and losses on available-for-sale securities are excluded from the average volumes.

4- Average loan balances include the average of total non-performing loans.

5- Interest income on loans includes $2.9 million, $2.4 million and $2.5 million for the quarters ended June 30, 2012, March 31, 2012 and June 30, 2011, respectively, of income from prepayment penalties and late fees related to the Corporation’s loan portfolio.

6- Unrealized gains and losses on liabilities measured at fair value are excluded from the average volumes.

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 25 of 30

Table 3 – Year to Date Statement of Average Interest-Earning Assets and Average Interest-Bearing Liabilities (On a Tax Equivalent Basis and Excluding Valuations)

(Dollars in thousands)
	Average volume				Interest income (1) / expense				Average rate (1)
Six-Month Period Ended	June 30, 2012		June 30, 2011		June 30, 2012		June 30, 2011		June 30, 2012			June 30, 2011
Interest-earning assets:
Money market & other short-term investments	$	579,412	$	523,431	$	825	$	709		0.29	%		0.27	%
Government obligations (2)		816,034		1,588,216		7,169		12,403		1.77	%		1.57	%
Mortgage-backed securities		990,772		1,406,078		15,801		27,565		3.21	%		3.95	%
Corporate bonds		1,937		2,000		60		58		6.23	%		5.85	%
FHLB stock		34,525		48,179		754		1,165		4.39	%		4.88	%
Equity securities		1,377		1,377		—		1		0.00	%		0.15	%
Total investments (3)		2,424,057		3,569,281		24,609		41,901		2.04	%		2.37	%
Residential mortgage loans		2,787,543		3,075,475		75,562		88,015		5.45	%		5.77	%
Construction loans		415,972		735,290		5,215		10,645		2.52	%		2.92	%
C&I and commercial mortgage loans		5,463,693		5,859,558		110,964		117,112		4.08	%		4.03	%
Finance leases		241,643		273,199		10,538		11,264		8.77	%		8.31	%
Consumer loans		1,377,387		1,389,570		81,947		80,042		11.96	%		11.62	%
Total loans (4) (5)		10,286,238		11,333,092		284,226		307,078		5.56	%		5.46	%
Total interest-earning assets	$	12,710,295	$	14,902,373	$	308,835	$	348,979		4.89	%		4.72	%
Interest-bearing liabilities:
Brokered CDs	$	3,555,026	$	5,783,610	$	37,536	$	62,465		2.12	%		2.18	%
Other interest-bearing deposits		5,530,210		5,205,321		32,687		41,118		1.19	%		1.59	%
Other borrowed funds		1,211,706		1,626,460		19,186		30,484		3.18	%		3.78	%
FHLB advances		354,165		534,755		6,269		8,965		3.56	%		3.38	%
Total interest-bearing liabilities (6)	$	10,651,107	$	13,150,146	$	95,678	$	143,032		1.81	%		2.19	%
Net interest income					$	213,157	$	205,947
Interest rate spread										3.08	%		2.53	%
Net interest margin										3.37	%		2.79	%

1- On a tax-equivalent basis. The tax-equivalent yield was estimated by dividing the interest rate spread on exempt assets by 1 less the Puerto Rico statutory tax rate (30% for 2012; 30% for the Corporation’s subsidiaries other than IBEs and 25% for the Corporation’s IBEs in 2011) and adding to it the cost of interest-bearing liabilities. When adjusted to a tax-equivalent basis, yields on taxable and exempt assets are comparable. Changes in the fair value of derivative instruments and unrealized gains or losses on liabilities measured at fair value are excluded from interest income and interest expense because the changes in valuation do not affect interest paid or received.

2- Government obligations include debt issued by government sponsored agencies.

3- Unrealized gains and losses on available-for-sale securities are excluded from the average volumes.

4- Average loan balances include the average of total non-performing loans.

5- Interest income on loans includes $5.3 million and $4.7 million for the six-month periods ended June 30, 2012 and 2011, respectively, of income from prepayment penalties and late fees related to the Corporation’s loan portfolio.

6- Unrealized gains and losses on liabilities measured at fair value are excluded from the average volumes.

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 26 of 30

Table 4 – Non-Interest Income

	Quarter Ended									Six-Month Period Ended
(In thousands)	June 30, 2012			March 31, 2012			June 30, 2011			June 30, 2012			June 30, 2011
Other service charges	$	1,226		$	1,519		$	1,456		$	2,745		$	3,174
Service charges on deposit accounts		3,240			3,247			3,054			6,487			6,386
Mortgage banking activities		4,057			4,475			9,336			8,532			15,927
Insurance income		1,312			1,480			1,063			2,792			2,396
Broker-dealer income		1,347			1,263			783			2,610			831
Other operating income		5,474			3,934			5,187			9,408			13,309
Non-interest income before net gain on investments, loss on early extinguishment of borrowings and equity in losses of unconsolidated entities		16,656			15,918			20,879			32,574			42,023
Proceeds from securities litigation settlement and other proceeds		—			26			—			26			679
Net gain on sale of investments		—			—			21,949			—			40,611
OTTI on debt securities		(143	)		(1,233	)		(607	)		(1,376	)		(607	)
Net (loss) gain on investments		(143	)		(1,207	)		21,342			(1,350	)		40,683
Loss on early extinguishment of borrowings		—			—			(1,823	)		—			(1,823	)
Equity in losses of unconsolidated entities		(2,491	)		(6,236	)		(1,536	)		(8,727	)		(1,536	)
	$	14,022		$	8,475		$	38,862		$	22,497		$	79,347

Table 5 – Non-Interest Expenses

	Quarter Ended						Six-Month Period Ended
(In thousands)	June 30, 2012		March 31, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Employees’ compensation and benefits	$	31,101	$	31,611	$	29,407	$	62,712	$	59,846
Occupancy and equipment		15,181		15,676		15,603		30,857		30,853
Deposit insurance premium		11,982		11,987		14,125		23,969		27,590
Other taxes, insurance and supervisory fees		4,755		4,437		3,557		9,192		8,524
Professional fees		5,322		5,179		6,072		10,501		11,209
Servicing and processing fees		3,017		2,160		2,151		5,177		4,362
Business promotion		3,475		2,547		3,628		6,022		6,292
Communications		1,758		1,721		1,864		3,479		3,742
Net loss on REO operations		6,786		3,443		5,971		10,229		11,471
Other		3,565		6,432		4,053		9,997		5,408
Total	$	86,942	$	85,193	$	86,431	$	172,135	$	169,297

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 27 of 30

Table 6 – Selected Balance Sheet Data

(In thousands)	As of
	June 30, 2012		March 31, 2012		December 31, 2011
Balance Sheet Data:
Loans, including loans held for sale	$	10,356,508	$	10,340,137	$	10,575,214
Allowance for loan and lease losses		457,153		483,943		493,917
Money market and investment securities		1,813,844		2,119,575		2,200,888
Intangible assets		62,952		39,198		39,787
Deferred tax asset, net		4,664		4,945		5,442
Total assets		12,913,650		13,085,623		13,127,275
Deposits		9,900,173		9,908,244		9,907,754
Borrowings		1,465,399		1,601,415		1,622,741
Total preferred equity		63,047		63,047		63,047
Total common equity		1,359,302		1,349,754		1,361,899
Accumulated other comprehensive income, net of tax		26,610		20,222		19,198
Total equity		1,448,959		1,433,023		1,444,144

Table 7 – Loan Portfolio

Composition of the loan portfolio including loans held for sale at period end.

(In thousands)	As of
	June 30, 2012		March 31, 2012		December 31, 2011
Residential mortgage loans	$	2,764,066	$	2,799,224	$	2,873,785
Commercial loans:
Construction loans		364,934		399,056		427,863
Commercial mortgage loans		1,479,068		1,500,746		1,565,411
Commercial and Industrial loans		3,475,356		3,774,913		3,856,695
Loans to local financial institutions collateralized by real estate mortgages		262,563		269,020		273,821
Commercial loans		5,581,921		5,943,735		6,123,790
Finance leases		240,589		242,228		247,003
Consumer loans		1,709,539		1,310,598		1,314,814
Loans held for investment		10,296,115		10,295,785		10,559,392
Loans held for sale		60,393		44,352		15,822
Total loans	$	10,356,508	$	10,340,137	$	10,575,214

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 28 of 30

Table 8 – Loan Portfolio by Geography

(In thousands)	As of June 30, 2012
	Puerto Rico		Virgin Islands		Florida		Consolidated
Residential mortgage loans	$	2,101,423	$	388,811	$	273,832	$	2,764,066
Commercial loans:
Construction loans		234,114		107,943		22,877		364,934
Commercial mortgage loans		1,041,024		63,042		375,002		1,479,068
Commercial and Industrial loans		3,234,421		203,211		37,724		3,475,356
Loans to a local financial institution collateralized by real estate mortgages		262,563		—		—		262,563
Commercial loans		4,772,122		374,196		435,603		5,581,921
Finance leases		240,589		—		—		240,589
Consumer loans		1,623,208		53,776		32,555		1,709,539
Loans held for investment		8,737,342		816,783		741,990		10,296,115
Loans held for sale		56,616		3,777		—		60,393
Total loans	$	8,793,958	$	820,560	$	741,990	$	10,356,508

Table 9 – Non-Performing Assets

(Dollars in thousands)	June 30, 2012			March 31, 2012			December 31, 2011
Non-performing loans held for investment:
Residential mortgage	$	333,043		$	341,188		$	338,208
Commercial mortgage		239,881			244,391			240,414
Commercial and Industrial		255,253			263,604			270,171
Construction		202,133			231,071			250,022
Consumer and Finance leases		35,378			39,159			39,547
Total non-performing loans held for investment		1,065,688			1,119,413			1,138,362
REO		167,341			135,905			114,292
Other repossessed property		10,601			12,494			15,392
Other Assets (1)		64,543			64,543			64,543
Total non-performing assets, excluding loans held for sale	$	1,308,173		$	1,332,355		$	1,332,589
Non-performing loans held for sale		—			—			4,764
Total non-performing assets, including loans held for sale (2)	$	1,308,173		$	1,332,355		$	1,337,353
Past due loans 90 days and still accruing	$	120,585		$	133,191		$	130,816
Allowance for loan and lease losses	$	457,153		$	483,943		$	493,917
Allowance to total non-performing loans held for investment		42.90	%		43.23	%		43.39	%
Allowance to total non-performing loans held for investment, excluding residential real estate loans		62.40	%		62.19	%		61.73	%

(1) Collateral pledged to Lehman Brothers Special Financing, Inc.

(2) Amount excludes purchased credit impaired loans with a fair value of approximately $15.1 million acquired as part of the credit card portfolio acquired from FIA.

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 29 of 30

Table 10 – Non-Performing Assets by Geography

(In thousands)	June 30, 2012		March 31, 2012		December 31, 2011
Puerto Rico:
Non-performing loans held for investment:
Residential mortgage	$	296,496	$	305,955	$	297,595
Commercial mortgage		176,572		172,825		170,949
Commercial and Industrial		242,144		252,345		261,189
Construction		115,958		137,078		137,478
Finance leases		2,829		3,387		3,485
Consumer		29,879		33,686		34,888
Total non-performing loans held for investment		863,878		905,276		905,584
REO		123,178		91,452		85,788
Other repossessed property		10,530		12,415		15,283
Investment securities		64,543		64,543		64,543
Total non-performing assets, excluding loans held for sale	$	1,062,129	$	1,073,686	$	1,071,198
Non-performing loans held for sale		—		—		4,764
Total non-performing assets, including loans held for sale (1)	$	1,062,129	$	1,073,686	$	1,075,962
Past due loans 90 days and still accruing	$	117,936	$	124,940	$	118,888
Virgin Islands:
Non-performing loans held for investment:
Residential mortgage	$	14,454	$	11,731	$	11,470
Commercial mortgage		11,716		14,991		12,851
Commercial and Industrial		11,909		9,631		7,276
Construction		79,794		87,555		110,594
Consumer		830		489		518
Total non-performing loans held for investment		118,703		124,397		142,709
REO		26,661		27,263		7,200
Other repossessed property		58		36		67
Total non-performing assets, excluding loans held for sale	$	145,422	$	151,696	$	149,976
Non-performing loans held for sale		—		—		—
Total non-performing assets, including loans held for sale	$	145,422	$	151,696	$	149,976
Past due loans 90 days and still accruing	$	2,649	$	8,251	$	11,204
Florida:
Non-performing loans held for investment:
Residential mortgage	$	22,093	$	23,502	$	29,143
Commercial mortgage		51,593		56,575		56,614
Commercial and Industrial		1,200		1,628		1,706
Construction		6,381		6,438		1,950
Consumer		1,840		1,597		656
Total non-performing loans held for investment		83,107		89,740		90,069
REO		17,502		17,190		21,304
Other repossessed property		13		43		42
Total non-performing assets, excluding loans held for sale	$	100,622	$	106,973	$	111,415
Non-performing loans held for sale		—		—		—
Total non-performing assets, including loans held for sale	$	100,622	$	106,973	$	111,415
Past due loans 90 days and still accruing	$	—	$	—	$	724

(1) Amount excludes purchased credit impaired loans with a fair value of approximately $15.1 million acquired as part of the credit card portfolio acquired from FIA.

First BanCorp. Announces Earnings for the Quarter Ended June 30, 2012 – Page 30 of 30

Table 11 – Allowance for Loan and Lease Losses

	Quarter Ended									Six-Month Period Ended
(Dollars in thousands)	June 30, 2012			March 31, 2012			June 30, 2011			June 30, 2012			June 30, 2011
Allowance for loan and lease losses, beginning of period	$	483,943		$	493,917		$	561,695		$	493,917		$	553,025
Provision (recovery) for loan and lease losses:
Residential mortgage		16,368			2,336			12,845			18,704			19,172
Commercial mortgage		142			1,578			6,062			1,720			19,443
Commercial and Industrial		2,427			20,158			21,486			22,585			62,972
Construction		(666	)		7,716			21,354			7,050			43,817
Consumer and finance leases		6,613			4,409			(2,563	)		11,022			2,512
Total provision for loan and lease losses		24,884			36,197			59,184			61,081			147,916
Loans net charge-offs:
Residential mortgage		(14,211	)		(5,731	)		(8,937	)		(19,942	)		(14,098	)
Commercial mortgage		(6,271	)		(3,594	)		(3,150	)		(9,865	)		(34,254	)
Commercial and Industrial		(8,385	)		(12,669	)		(10,763	)		(21,054	)		(27,051	)
Construction		(15,186	)		(15,392	)		(47,207	)		(30,578	)		(64,445	)
Consumer and finance leases		(7,621	)		(8,785	)		(9,944	)		(16,406	)		(20,215	)
Net charge-offs		(51,674	)		(46,171	)		(80,001	)		(97,845	)		(160,063	)
Allowance for loan and lease losses, end of period	$	457,153		$	483,943		$	540,878		$	457,153		$	540,878
Allowance for loan and lease losses to period end total loans held for investment		4.44	%		4.70	%		5.02	%		4.44	%		5.02	%
Net charge-offs (annualized) to average loans outstanding during the period		2.03	%		1.78	%		2.91	%		1.90	%		2.82	%
Provision for loan and lease losses to net charge-offs during the period		0.48x			0.78x			0.74x			0.62x			0.92x

Table 12 – Net Charge-Offs to Average Loans

	Six-month period ended			Year ended
	June 30, 2012			December 31, 2011			December 31, 2010			December 31, 2009			December 31, 2008
Residential mortgage		1.43	%		1.32	%		1.80	%(1)		0.82	%		0.19	%
Commercial mortgage		1.29	%		3.21	%		5.02	%(2)		1.64	%		0.27	%
Commercial and Industrial		1.07	%		1.57	%		2.16	%(3)		0.72	%		0.59	%
Construction		14.70	%		16.33	%		23.80	%(4)		11.54	%		0.52	%
Consumer and finance leases		2.03	%		2.33	%		2.98	%		3.05	%		3.19	%
Total loans		1.90	%		2.68	%		4.76	%(5)		2.48	%		0.87	%

(1) Includes net charge-offs totaling $7.8 million associated with non-performing residential mortgage loans sold in a bulk sale.

(2) Includes net charge-offs totaling $29.5 million associated with loans transferred to held for sale. Commercial mortgage net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale, was 3.38%.

(3) Includes net charge-offs totaling $8.6 million associated with loans transferred to held for sale. Commercial and Industrial net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale, was 1.98%.

(4) Includes net charge-offs totaling $127.0 million associated with loans transferred to held for sale. Construction net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale, was 18.93%.

(5) Includes net charge-offs totaling $165.1 million associated with loans transferred to held for sale. Total net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale, was 3.60%.

###

EX-99.2

Investor Presentation

Investor Presentation

July 2012

July 2012

Exhibit 99.2

Disclaimer

2

This presentation contains “forward-looking statements” concerning First BanCorp’s (the “Corporation”) future economic performance. The words or phrases “would be,” “will

allow,” “intends to,” “will likely result,” “are expected to,” “expect,” “anticipate,” “look forward,” “should,” “believes” and similar expressions are meant to identify “forward-

looking statements” within the meaning of Section 27A of the Private Securities Litigation Reform Act of 1995, and are subject to the safe harbor created by such section. The

Corporation wishes to caution readers not to place undue reliance on any such “forward-looking statements,” which speak only as of the date made, and to advise readers that

various factors, including, but not limited to, uncertainty about whether the Corporation and FirstBank Puerto Rico (“FirstBank” or “the Bank”)  will be able to fully comply with

the written agreement dated June 3, 2010 that the Corporation entered into with the Federal Reserve Bank of New York (the “FED”) and the order dated June 2, 2010 (the

“Order”)that FirstBank  entered into with the FDIC and the Office of the Commissioner of Financial Institutions of Puerto Rico that, among other things, require FirstBank to

maintain certain capital levels and reduce its special mention, classified, delinquent and non-performing assets; the risk of being subject to possible additional regulatory actions;

uncertainty as to the availability of certain funding sources, such as retail brokered CDs; the Corporation’s reliance on brokered CDs and its ability to obtain, on a periodic basis,

approval from the FDIC to issue brokered CDs to fund operations and provide liquidity in accordance with the terms of the Order; the risk of not being able to fulfill the

Corporation’s cash obligations or resume paying dividends to the Corporation’s stockholders in the future due to the Corporation’s inability to receive approval from the FED to

receive dividends from FirstBank or FirstBank’s failure to generate sufficient cash flow to make a dividend payment to the Corporation; the strength or weakness of the real

estate markets and of the consumer and commercial credit sectors and their impact on the credit quality of the Corporation’s loans and other assets, including the Corporation’s

construction and commercial real estate loan portfolios, which have contributed and may continue to contribute to, among other things, the high levels of non-performing

assets, charge-offs and the provision expense and may subject the Corporation to further risk from loan defaults and foreclosures; adverse changes in general economic

conditions in the United States and in Puerto Rico, including the interest rate scenario, market liquidity, housing absorption rates, real estate prices and disruptions in the U.S.

capital markets, which may reduce interest margins, impact funding sources and affect demand for all of the Corporation’s products and services and the value of the

Corporation’s assets; an adverse change in the Corporation’s ability to attract new clients and retain existing ones; a decrease in demand for the Corporation’s products and

services and lower revenues and earnings because of the continued recession in Puerto Rico and the current fiscal problems and budget deficit of the Puerto Rico government;

uncertainty about regulatory and legislative changes for financial services companies in Puerto Rico, the United States and the U.S. and British Virgin Islands, which could affect

the Corporation’s financial performance and could cause the Corporation’s actual results for future periods to differ materially from prior results and anticipated or projected

results; uncertainty about the effectiveness of the various actions undertaken to stimulate the United States economy and stabilize the United States’ financial markets, and the

impact such actions may have on the Corporation’s business, financial condition and results of operations; changes in the fiscal and monetary policies and regulations of the

federal government, including those determined by the Federal Reserve System, the FDIC, government-sponsored housing agencies and regulators in Puerto Rico and the U.S.

and British Virgin Islands; the risk of possible failure or circumvention of controls and procedures and the risk that the Corporation’s risk management policies may not be

adequate; the risk that the FDIC may further increase the deposit insurance premium and/or require special assessments to replenish its insurance fund, causing an additional

increase in the Corporation’s non-interest expense; risks of not being able to recover the assets pledged to Lehman Brothers Special Financing, Inc.; the impact on the

Corporation’s results of operations and financial condition associated with acquisitions and dispositions; a need to recognize additional impairments on financial instruments or

goodwill relating to acquisitions; risks that downgrades in the credit ratings of the Corporation’s long-term senior debt will adversely affect the Corporation’s ability to access

necessary external funds; the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on the Corporation’s businesses, business practices and cost of

operations; and general competitive factors and industry consolidation.  The Corporation does not undertake, and specifically disclaims any obligation, to update any “forward-

looking statements” to reflect occurrences or unanticipated events or circumstances after the date of such statements except as required by the federal securities laws.

Investors should refer to the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2011 for a discussion of such factors and certain risks and uncertainties

to which the Corporation is subject.

Franchise Overview

Founded in 1948 (63 years)

Headquartered in San Juan, Puerto Rico with

operations in PR, Eastern Caribbean (Virgin

Islands) and Florida

A well diversified operation with over 650,000

retail & commercial customers

2nd largest financial holding company in Puerto

Rico with attractive business mix and

substantial loan market share

A leading bank in the Virgin Islands with over

40% market share

Small presence in Florida serving south Florida

region

151 ATM machines and largest ATM network  in

the Eastern Caribbean Region

~2,500 FTE employees

As of Jun 30, 2012

Eastern Caribbean Region or ECR includes United States and British Virgin Islands

FTE = Full Time Equivalent

Well diversified with significant competitive strengths

3

Total Assets -

$12.9B

Total Deposits -

$9.9B

Total Loans -

$10.4B

Puerto Rico:  86% of Assets

48 branches

5 branches

2 branches

38 branches

26 branches

8 In-branch

offices

Florida: 

7% of Assets

Eastern Caribbean: 

7% of Assets

Franchise Overview

Strong and uniquely positioned market franchise in

densely populated operating footprints

Strong market share in loan portfolios facilitates

customer relationship expansion and cross sell to

increase deposit share

Unique challenger to Puerto Rico’s largest player

4

Puerto

Rico

Total

Assets

Puerto Rico Total Loans

Puerto

Rico

Deposits,

Net

of

Brokered

Puerto Rico

ECR

Florida

Banking Branches

48

14

11

Wholesale Banking

Retail Banking

Consumer Lending

2

Mortgage Banking

Insurance

Retail Brokerage

3

Wholesale Brokerage

4

($ in millions)

Portfolio

Balance

Market

Share

Portfolio

Balance

Market

Share

Portfolio

Balance

Market Share

1

Banco Popular

$25,303

35.9%

1

Banco Popular

$19,019

36.5%

1

Banco Popular

$17,516

44.8%

2

FirstBank

$10,595

15.0%

2

FirstBank

$8,536

16.4%

2

Banco Santander

$5,080

13.0%

3

Scotiabank

$7,896

11.2%

3

Scotiabank

$5,615

10.8%

3

FirstBank

$3,827

9.8%

4

Banco Santander

$6,948

9.9%

4

Banco Santander

$5,309

10.2%

4

Scotiabank

$3,570

9.1%

5

Oriental Bank

$6,421

9.1%

5

Doral Bank

$4,201

8.1%

5

BBVA

$2,759

7.1%

6

Doral Bank

$5,633

8.0%

6

BBVA

$3,707

7.1%

6

Oriental Bank

$2,068

5.3%

7

BBVA

$5,177

7.4%

7

Other

$2,562

4.9%

7

Doral Bank

$1,934

4.9%

8

Citibank

$1,884

2.7%

8

Oriental Bank

$1,739

3.3%

8

Citibank

$1,888

4.8%

9

Banco Cooperativo

$544

0.8%

9

Citibank

$708

1.4%

9

Banco Cooperativo

$469

1.2%

10

BBU

$7

0.0%

10

Bank of America

$501

1.0%

10

BBU

$19

0.0%

Total

$70,410

100%

11

Banco Cooperativo

$168

0.3%

Total

$39,131

100%

Total

$52,067

100%

Institutions

Institutions

Institutions

1

1

1

1 Puerto Rico only; 2 FirstBank acquired the FirstBank-branded credit card portfolio of $391MM book balance as of June 30, 2012; 3 Provided through alliance with UBS; 4 Established primarily for 

Source: PR Market Share Report prepared with data provided by the Commissioner of Financial Institutions of Puerto Rico as of 3/31/2012

municipal financing

Economic Environment Continues to Stabilize

Puerto Rico

Puerto Rico market showing signs of improvement;

projected positive GNP growth of 0.9% for 2012

Economic Activity Index continues to reflect

stabilization with certain improving trends

Retail Sales show a stable trend over the last two

years

New car sales have shown a positive year over year

trend since December 2009

Government efforts to control fiscal imbalances have

been showing results

The deficit as of January 2009 was $3B; it was reduced

to $2.1B in 2010, to $1B in 2011, to $610 MM in 2012

and is projected at $332 MM for fiscal year 2013

Public/private partnerships (PPPs) are in process to

improve physical/functional infrastructure and build

strategic/regional projects to jump-start the

economy

PPP for Toll Roads PR-22 and PR-5 / $1.4B

investment

PPP for Modernization and New construction of

Schools / $756 MM investment

PPP for Luis Muñoz Marín International Airport

Improving unemployment trend

5

GDB -

Economic Activity Index

Puerto Rico GNP & Yearly

% Growth

2000 –

2011

Unemployment Rate

2

1 GDB Puerto Rico (www.bgfpr.com).  Index and its indicators are subject to monthly revisions. Data used for GDB-EAI is adjusted for seasonality and variability

2 PR Planning Board (www.jp.gobierno.pr). GNP in millions and at constant prices of 1954.  Estimate as of April 19, 2012. Years are from July 1 to June 30 of next year (fiscal year)

6

Building Franchise Value

Executing Strategic Plan Toward Goal to Return to Profitability

During

the

recent

cycle

(consolidations,

capital

raise,

economic

challenges),

Management

focused

on strengthening the franchise and succeeded in solidifying its strong #2 position in PR

Balance Sheet

Improving risk profile;  focusing on reducing NPAs

Executing on opportunities to reduce cost of funds

Franchise Value

Expanding products mix and maximizing cross selling opportunities

Growing core

deposits

Sustaining

well

diversified

loan

production

across

multiple

line

of

businesses

and

geographies

Managing expenses carefully;  continued focus on operational excellence

Capital

Strong capital base to support execution of Strategic Plan

Risk Management

Proactive approach to risk management

In compliance with Regulatory Agreements

Enhancing BOD talent with additional financial and risk management expertise

Focus on Rebuilding Earnings

2Q 2012 Highlights

Net income of $9.4 million is the first quarterly profit since 1Q 2009

Improvement of $3.1 MM in pre-tax pre-provision income

Improvement

of

24

bps

in

net-interest

margin

reaching

3.44%

for

the

quarter

compared

to

3.20%

in

the

last

quarter

Continued trend of reductions in provision for loan losses, the sixth consecutive quarter of reduction

Capital remains strong with total capital ratio, tier 1 and leverage reaching 17.3%, 16.0% and 12.5%, respectively

1 Non-GAAP financial measure

2 Fair value adjustments on derivatives and financial liabilities measured at fair value

3 See reconciliation on page 19

4 See reconciliation on page 20

Achieved profitability in 2Q 2012 and continued improvement in PTPP earnings

7

($ in millions, except per share results)

Income Statement

2Q 2011

3Q 2011

4Q 2011

1Q 2012

2Q 2012

Net interest income, excluding valuations

95.6

$               

96.8

$               

100.3

$            

101.6

$            

108.2

$            

Valuations

(1.2)

(2.5)

(1.7)

0.3

0.5

GAAP Net Interest Income

94.4

94.3

98.6

101.9

108.7

Provision for loan and lease losses

59.2

46.4

42.0

36.2

24.9

Non-interest income

40.4

18.4

13.0

14.7

16.5

Equity in (losses) gains of unconsolidated entities

(1.5)

(4.4)

1.7

(6.2)

(2.5)

Non-interest expense

86.4

83.0

85.9

85.2

86.9

Pre-tax net income (loss)

(12.3)

(21.1)

(14.6)

(11.0)

10.9

Income tax (expense) benefit

(2.6)

(2.9)

(0.2)

(2.1)

(1.5)

Net income (loss)

(14.9)

$             

(24.0)

$             

(14.8)

$             

(13.1)

$             

9.4

$                  

30.0

$               

29.1

$               

28.5

$               

34.8

$               

37.9

$               

Net Interest Margin, excluding valuations (%)

2.64%

2.82%

2.99%

3.20%

3.44%

Net

income

(loss)

per

common

share-basic

2,4

(1.04)

$             

(1.46)

$             

1.36

$               

(0.06)

$             

0.05

$               

Adjusted Pre-tax pre-provision earnings

1,3

Building Franchise Value

Puerto Rico

Opportunities for ongoing market share gains on selected

products based on fair share of market

–

Largest opportunity on deposit products, electronic

banking & transaction services

–

Selected loan products growth for balanced risk/return

to manage risk concentration and diversify income

sources

Acquired FirstBank-branded credit card portfolio from FIA

Card Services, N.A.

–

Diversifies revenue stream and loan portfolio

composition

–

Opportunity to broaden and deepen relationships

Florida

Expansion prospects in Florida given long term

demographic trends

–

Continue focus in core deposit growth, commercial and

transaction banking and conforming residential

mortgages

Virgin Islands

Solidify leadership position by further increasing customer

share of wallet

Targeted strategies for growth

8

Market Share in Main Market

1

15%

8%

18%

13%

19%

16%

10%

16%

12%

10%

7%

10%

6%

10%

11%

85%

92%

82%

87%

81%

84%

90%

84%

88%

90%

93%

91%

94%

90%

89%

Assets

Personal Loans

Commercial Loans

Construction

Auto/Leasing

Small Personal Loans

Mortgage Originations

Credit Cards

Insurance

ACH Transactions

POS Terminals

ATM Terminals

Debit Cards

Deposits

Branches

FirstBank

Other Banks

2

2

4

3

2

2

3

4

3

4

2

4

3

4

5

Rank

Source: Office of the Commissioner of Financial Institutions of Puerto Rico as of 3/31/2012 and internal reports; commercial loans include loans collateralized by real estate; Insurance share is for 

income information included in regulatory reports filed by banks for the year 2009

1 Puerto Rico only

1 Net of Brokered CDs

Successful execution of deposit growth strategy; $148 MM

during 2Q 2012 and $1.3B since 2009

Expanded electronic services offering to support deposit

growth strategy

Cost of interest bearing deposits, net of brokered CDs,

decreased to 1.13% from 1.51% in 2011

Reduced reliance on brokered CDs

Building Franchise Value

Successful deposits growth over recent years

9

($ in millions)

Deposits, Net of Brokered CDs

Total Deposit Composition

Cost of Deposits

$1,505

$2,090

$2,126

$2,065

$448

$470

$481

$584

$774

$763

$915

$959

$2,381

$2,477

$2,654

$2,826

$-

$6,500

2009

2010

2011

Jun 2012

CDs & IRAs

Government

Commercial

Retail

$5,108

$5,800

$6,176

$6,434

Interest Bearing

57%

Non-interest

Bearing

8%

Brokered CDs

35%

2.20%

1.79%

1.51%

1.13%

1.87%

1.56%

1.34%

0.99%

0.00%

1.00%

2.00%

3.00%

2009

2010

2011

2Q 2012

Interest Bearing Deposits, Net of Brokered CDs

Total Deposits, Net of Brokered CDs

1

35% of deposits are brokered CDs, down from 60% in 2009

Well Diversified Loan Portfolio

Strong origination activity in Q2 vs. Q1:

Residential

mortgages

increased

$32

million

20%

Consumer:

Auto

loans

increased

$29

million

25%

Consumer:

Personal

loans

increased

$13

million

31%

Consumer: Credit card utilization activity of $34 million

C&I loan

originations

increased

$151

million

66%

Reentered credit card business with the acquisition of

$406 MM credit card portfolio of ~140K active FirstBank-

branded credit cards

Expanding products mix in commercial and small &

middle market business

Strong Origination Capabilities

10

($ in millions)

$13,421

$11,403

$10,081

$9,899

$4,867

$3,369

$2,244

$1,848

$1,340

$821

$802

$1,166

$19,628

$15,593

$13,127

$12,914

$0

$20,000

2009

2010

2011

June 2012

Total loans, net of ALLL

Investments & Money Markets

Cash & Other

$3,596

$3,417

$2,874

$2,764

$1,898

$1,716

$1,562

$1,950

$6,942

$5,822

$5,695

$5,217

$1,493

$701

$428

$365

$20

$301

$16

$60

$13,949

$11,957

$10,575

$10,357

$-

$15,000

2009

2010

2011

Jun 2012

Residential

Consumer

Commercial & CRE

Construction

Loans Held for Sale

$140

$148

$160

$162

$194

$139

$149

$163

$160

$202

$34

$271

$446

$344

$237

$391

$19

$25

$14

$10

$16

$569

$768

$680

$569

$838

$

$1,300

2Q 2011

3Q 2011

4Q 2011

1Q 2012

2Q 2012

Residential

Consumer

Credit Cards

Commercial & CRE

Construction

Loan Originations

Loan Portfolio

Improved Risk Profile

Reduced

NPLs

by

35%

since

peak

in

1Q

2010

1,

and

stabilized

migration to NPL

Reduced

exposure

to

construction

loans

by

76%

since

peak

2

, a

major driver of losses

Decreasing charge-off trend

Heightened focus on opportunistic loan sales, organic workouts,

note sales and OREO disposition through Special Assets Group

OREO increased $30MM mainly due to foreclosed commercial

properties as a result of the Special Asset Group’s focus on

resolutions, allowing greater flexibility in disposition strategies

Commercial NPLs are being carried at 58% of unpaid principal

balance, net of specific reserves

1 As of  June 30, 2012

2 From December 31, 2008 to June 30, 2012

3 Net Carrying Amount = % of carrying value net of reserves and accumulated charge-offs

4 Non performing loan breakdown on page 19

11

($ in millions)

Allowance coverage ratio of 4.4%

Net Charge-offs

Non-performing Assets

$1,790

$1,701

$1,669

$1,562

$1,410

$1,390

$1,377

$1,337

$1,332

$1,308

$-

$1,800

Mar 10

Jun 10

Sep 10

Dec 10

Mar 11

Jun 11

Sep 11

Dec 11

Mar 12

Jun 12

Non-performing Loans

Repossessed Assets & Investment Sec.

Loans Held for Sale

$29

$63

$39

$20

$61

$54

$37

$16

$60

$180

$118

$31

$183

$313

$101

$31

$333

$610

$295

$98

$-

$650

2009

2010

2011

2Q 2012 YTD

Residential

Consumer

Commercial & CRE

Construction

Book Value

Accumulated

Charge-offs

Reserves

Net Carrying

Amount

3

C & I

255

$             

103

$             

69

$               

52%

Construction

202

125

40

50%

CRE

240

23

36

77%

Total

697

$             

250

$             

145

$             

58%

Commercial Non-performing Loans

1

Proactively Managing Asset Quality

12

Path to Profitability

Executing on Key Profitability Improvement Opportunities

Achieve additional reduction of NPAs and classified assets

Continue to execute core deposit strategic plan

Rebuild pre-tax pre-provision income

Execute process improvement and efficiency initiatives

Focus on Rebuilding Earnings

Re-energizing loan production in key focus areas:  consumer, auto, residential

mortgages & small commercial

Maximize fee income growth

Enhance credit card business to increase revenues & cross sell opportunity

Further reductions in funding costs

-

$2.2B in Brokered CDs maturing in the next 12 months with avg. cost of 2.04%;

new issuance at current rates could range between 75-125 bps

-

Core deposit pricing reduction

Increase OREO disposition efficiency

Summary of Investment Opportunity

Strong and uniquely positioned franchise with strengthened capital base

Stable pre-tax, pre-provision earnings with realizable opportunities for

improvement

Executing on our strategic plan

Continued improvements in asset quality

Core-deposit plan

Disciplined  ongoing expense management

Fully

reserved

deferred

tax

asset

of

$366.9

MM

that

will

accrete

to

capital

as

the Corporation turns to profitability

Committed management team with proven execution skills

Attractive valuation on a pro-forma tangible book value basis

13

Exhibits

Exhibits

Investor Presentation

Investor Presentation

July 2012

July 2012

15

Stock Profile

Trading Symbol:

•

FBP

Exchange:

•

NYSE

Share

Price

(7/27/12):

•

$3.86

Shares Outstanding:

•

206,629,311

Market Capitalization

(7/27/12):

•

$795.68 MM

1 Yr. Average Daily Volume:

•

203,410

Price

(7/27/12)

to

Tangible

Book

(6/30/2012):

•

0.601x

Beneficial Owner

Amount

Percent of

Class

Entities affiliated with Thomas H. Lee

Partners, L.P.

50,684,485

24.59%

Entities affiliated with Oaktree Capital

Management, L.P.

50,684,485

24.59%

Wellington Management Company, LLP.

20,336,087

9.87%

United States Department of the

Treasury

1

34,227,696

16.50%

5% or more Beneficial Ownership

1 Includes the U.S. Treasury warrant that entitles it to purchase up to 1,285,899 shares of Common Stock at an exercise price of $3.29 per share, as adjusted as a result of the issuance of shares of

Common Stock in the Corporation’s recently completed $525MMprivate placement of Common Stock (the “Capital Raise”). The exercise price and the number of shares issuable upon exercise of

the warrant are subject to further adjustments under certain circumstances to prevent dilution. The warrant has a 10-year term from its issue date and is exercisable in whole or in part at any time.

Despite the recent Moody’s downgrade of PR’s General Obligation

Bond and other associated credits, investors continued to show their

confidence by purchasing more than $2B in bonds for the Schools of the  

21st

Century

Projects,

Housing

incentives

enacted

in

Puerto

Rico

were

extended up to December 2012

Retail Sales show a stable trend over the last two years

New car sales have shown a positive year over year trend since

December 2009

Stabilization of the banking system was reflected in financial results and

a leveling of assets in the overall system

In April 2012, Moody's placed on review for downgrade certain ratings

of three Puerto Rican banks due to a weakened economy

The Puerto Rico Electric Power Authority (PREPA) concluded the sale of

a $650 MM bond issue in April 2012

On July 18, 2012 Moody’s  downgraded Puerto Rico’s Sales Tax

Financing Corporation’s (COFINA) outstanding sales tax revenue bonds

from Aa2 to Aa3 and the outstanding subordinate sales tax revenue

bonds from A1 to A3

During 2012 the Government has been accessing the market to take

advantage of the low rate environment and reduce their borrowing

cost. More than $6B have been issued  to refund existing debt and

reduce borrowings cost

Economic Environment Continues to Stabilize

Puerto Rico

Economic Activity Index continues to reflect stabilization with certain

improving trends

Government efforts to control fiscal imbalances have been showing

results

The deficit as of January 2009 was $3B; it was reduced to $2.1B in 2010,

to $1B in 2011, to $610 MM in 2012 and is projected at $332 MM for

fiscal year 2013

Public/private partnerships (PPPs) are in process to improve

physical/functional infrastructure and build strategic/regional projects

to jump-start the economy

PPP for Toll Roads PR-22 and PR-5 / $1.4B investment

PPP for Modernization and New construction of Schools / $756 MM

investment

Others

are

currently

in

process

Luis

Muñoz

Marín

International

Airport / final bid submission is scheduled for June 2012

In July 2011, Commonwealth issued bonds of $300 MM for

infrastructure projects to continue stimulating the economy

16

-

2

Puerto

Rico

GNP

&

Yearly

%

Growth

2000

–

2011

GDB -

Economic Activity Index

1 GDB Puerto Rico (www.bgfpr.com).  Index and its indicators are subject to monthly revisions. Data used for GDB-EAI is adjusted for seasonality and variability

2 PR Planning Board (www.jp.gobierno.pr). GNP in millions and at constant prices of 1954.  Estimate as of April 19, 2012. Years are from July 1 to June 30 of next year (fiscal year)

Economic Environment Continues to Stabilize

17

Florida

May 2012 unemployment rate was 8.6%.  It reflects -2.0%

decrease compared to May 2011

Total number of tourist visitors for 2011 increased by

4.4%, when compared to 2010, reaching 85.9 million

Number of homes sold increased 8% in 2011 compared to

prior year but average sales price dropped 3% to $131,700

Virgin Islands

Number of homes sold increased 8% in 2011 compared to

last year but average sales price dropped 3% to $131,700

During May 2012, unemployment rate increased 2.8% to

12.2% from 9.4% in May 2011

1.4 million visitors arrived YTD May 2012, representing a

growth of 2.4% over prior year. Cruise visitors decreased -

1.0% over prior year, but air visitors increased by 13.8%. 

Hotel occupancy rate for the past twelve months was

52%, a decrease of 4% compared to the same period in

the prior year

US

Virgin

Island’s

Unemployment

Rate

Florida

single

family

median

home

price

1

0.0%

5.0%

10.0%

15.0%

Unemployment Rate

Territory

St. Croix

St. Thomas/ St. John

$

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Statewide

Fort Lauderdale

Miami

Orlando

Tampa

3

1 Florida Association of Realtors, Moody’s Economy.com

2 Seasonally adjusted, preliminary data provided by the U.S. Bureau of Labor Statistics

3

VI  Bureau  of  Economic  Research,  Bureau  of  Labor  Statistics,  US Census

Non-performing Assets

1 Collateral pledged with Lehman Brothers Special Financing, Inc.

18

($ in millions)

Jun 2012

Mar 2012

% change

Non-performing loans

Residential mortgage

333.0

$           

341.2

$           

0.9%

Commercial mortgage

239.9

244.4

1.7%

Commercial & Industrial

255.3

263.6

-2.4%

Construction

202.1

231.1

-9.3%

Consumer Loans & Finance Leases

35.4

39.1

-1.3%

Total non-performing loans

1,065.7

1,119.4

-2.1%

REO

167.3

135.9

18.9%

Other repossessed property

10.6

12.5

-18.8%

Other assets

1

64.5

64.5

0.0%

Total non-performing assets

1,308.2

1,332.3

-0.4%

19

Adjusted Pre-tax, Pre-provision Income Reconciliation

($ in thousands)

2Q 2012

1Q 2012

4Q 2011

3Q 2011

2Q 2011

Income (loss) before income taxes

10,901

$        

(11,049)

$      

(14,600)

$      

(21,158)

$      

(12,318)

$      

Add: Provision for loan and lease losses

24,884

36,197

41,987

46,446

59,184

Less: Net (gain) loss on sale and OTTI of investment

securities

143

1,207

1,014

(12,156)

(21,342)

Add: Unrealized loss (gain) on derivatives instruments

and liabilities measured at fair value

(506)

(283)

1,746

2,555

1,162

Add: Contingency adjustment - tax credits

-

2,489

-

-

-

Add:  Loss on early extinguishment of repurchase

agreement

-

-

-

9,012

1,823

Add: Equity in losses (earnings) of unconsolidated

entities

2,491

6,236

(1,666)

4,357

1,536

Adjusted Pre-tax, pre-provision income

37,913

$        

34,797

$        

28,481

$        

29,056

$        

30,045

$        

Quarter Ended

1 Includes a non-cash adjustments of $0.2 MM for the quarter ended June 30, 2011 as an acceleration of the Series G preferred stock discount accretion pursuant to amendments to the exchange agreement with the

U.S. Treasury, the sole holder of the Series G Preferred Stock

2 Excess of carrying amount of the Series G Preferred Stock exchanged over the fair value of new common shares issued in the fourth quarter of 2011

20

Reconciliation of the (Loss) Earnings per Common Share

($ in thousands, except per share information)

2Q 2012

1Q 2012

4Q 2011

3Q 2011

2Q 2011

Net income (loss)

9,356

$        

(13,182)

$     

(14,842)

$     

(24,046)

$     

(14,924)

$     

Cumulative convertible preferred stock dividend (Series G)

-

-

(997)

(5,302)

(5,302)

Preferred

stock

discount

accretion

(Series

G)

1

-

-

(145)

(1,795)

(1,979)

Favorable impact from issuing common stock in exchange for

Series

G

preferred

stock,

net

of

issuance

costs

2

-

-

277,995

-

-

Net

income

(loss)

attributable

to

common

stockholders

-

basic

9,356

$        

(13,182)

$     

262,011

$    

(31,143)

$     

(22,205)

$     

Convertible preferred stock dividends and accretion

-

-

1,142

-

-

Net

income

(loss)

attributable

to

common

stockholders

-

diluted

9,356

$        

(13,182)

$     

263,153

$    

(31,143)

$     

(22,205)

$     

Average common shares outstanding

205,415

205,217

192,546

21,303

21,303

Average potential common shares

537

-

2,195

-

-

Average

common

shares

outstanding

-

assuming

dilution

205,952

205,217

194,741

21,303

21,303

Basic earnings (loss) per common share

0.05

$           

(0.06)

$         

1.36

$           

(1.46)

$         

(1.04)

$         

Diluted earnings (loss) per common share

0.05

$           

(0.06)

$         

1.35

$           

(1.46)

$         

(1.04)

$