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): September 14, 2015

FIRST BANCORP.

(Exact Name of Registrant as Specified in its Charter)

001-14793

(Commission File Number)

Puerto Rico	66-0561882
(State or Other Jurisdiction of Incorporation)	(I.R.S. Employer Identification No.)

1519 Ponce de Leon

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 (17CFR240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

Information about First BanCorp’s financial condition as of June 30, 2015 is incorporated by reference herein from the investor presentation attached hereto as Exhibit 99.1.

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 99.1.

Item 9.01 Financial Statements and Exhibits.

(a) Exhibits

Exhibit No.	Description
99.1	First BanCorp Investor Presentation dated September 2015

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: September 14, 2015	FIRST BANCORP
	By:	/s/ Orlando Berges
	Name:	Orlando Berges
	Title:	Executive Vice President and Chief Financial Officer

Exhibit Index

Exhibit No.	Description
99.1	First BanCorp Investor Presentation dated September 2015

EX-99.1

First BanCorp

Investor Presentation

September 2015

Exhibit 99.1

2

This

presentation

may

contain

“forward-looking

statements”

concerning

the

Corporation’s

future

economic

performance.

The

words

or

phrases

“expect,”

“anticipate,”

“look

forward,”

“should,”

“believes”

and

similar

statements

of

a

future

or

forward-looking

nature

that

reflect

our

current

views

with

respect

to

future

events

and

financial

performance

are

meant

to

identify

“forward-looking

statements”

within

the

meaning

of

Section

27A

of

the

Securities

Act

of

1933,

as

amended,

and

Section

21E

of

the

Securities

Exchange

Act

of

1934,

as

amended,

and

are

subject

to

the

safe

harbor

created

by

such

sections.

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

will

be

able

to

continue

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

“New

York

Fed”)

that,

among

other

things,

requires

the

Corporation

to

serve

as

a

source

of

strength

to

FirstBank

and

that,

except

with

the

consent

generally

of

the

New

York

Fed

and

the

Board

of

Governors

of

the

Federal

Reserve

System

(the

“Federal

Reserve

Board”),

prohibits

the

Corporation

from

paying

dividends

to

stockholders

or

receiving

dividends

from

FirstBank,

making

payments

on

trust

preferred

securities

or

subordinated

debt

and

incurring,

increasing

or

guaranteeing

debt

or

repurchasing

any

capital

securities;

uncertainty

as

to

the

availability

of

certain

funding

sources,

such

as

brokered

CDs;

the

Corporation’s

reliance

on

brokered

CDs

to

fund

operations

and

provide

liquidity;

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

need

to

receive

approval

from

the

New

York

Fed

and

the

Federal

Reserve

Board

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

sectors

and

their

impact

on

the

credit

quality

of

the

Corporation’s

loans

and

other

assets,

which

has

contributed

and

may

continue

to

contribute

to,

among

other

things,

high

levels

of

non-performing

assets,

charge-offs

and

provisions

for

loan

and

lease

losses

and

may

subject

the

Corporation

to

further

risk

from

loan

defaults

and

foreclosures;

the

ability

of

FirstBank

to

realize

the

benefits

of

its

deferred

tax

assets

subject

to

the

remaining

valuation

allowance;

additional

adverse

changes

in

general

economic

conditions

in

Puerto

Rico,

the

U.S.,

and

the

U.S.

Virgin

Islands

and

British

Virgin

Islands,

including

the

interest

rate

environment,

market

liquidity,

housing

absorption

rates,

real

estate

prices,

and

disruptions

in

the

U.S.

capital

markets,

which

has

reduced

interest

margins

and

affected

funding

sources,

and

has

affected

demand

for

all

of

the

Corporation’s

products

and

services

and

reduced

the

Corporation’s

revenues

and

earnings,

and

the

value

of

the

Corporation’s

assets;

a

credit

default

by

the

Puerto

Rico

government

or

any

of

its

public

corporations

or

other

instrumentalities,

and

recent

and

any

future

downgrades

of

the

long-term

and

short-term

debt

ratings

of

the

Puerto

Rico

government,

which

could

exacerbate

Puerto

Rico’s

adverse

economic

conditions;

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,

the

current

fiscal

problems

of

the

Puerto

Rico

government

and

recent

credit

downgrades

of

the

Puerto

Rico

government’s

debt;

the

risk

that

any

portion

of

the

unrealized

losses

in

the

Corporation’s

investment

portfolio

is

determined

to

be

other-than-temporary,

including

additional

impairments

on

the

Puerto

Rico

government’s

obligations;

uncertainty

about

regulatory

and

legislative

changes

for

financial

services

companies

in

Puerto

Rico,

the

U.S.,

the

U.S.

Virgin

Islands

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;

changes

in

the

fiscal

and

monetary

policies

and

regulations

of

the

U.S.

federal

government

and

the

Puerto

Rico

and

other

governments,

including

those

determined

by

the

Federal

Reserve

Board,

the

New

York

Fed,

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

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

expenses;

the

impact

on

the

Corporation’s

results

of

operations

and

financial

condition

of

acquisitions

and

dispositions,

including

the

recent

acquisition

of

loans

and

branches

of

Doral

Bank

as

well

as

the

assumption

of

deposits

at

the

branches;

a

need

to

recognize

impairments

on

financial

instruments,

goodwill,

or

other

intangible

assets

relating

to

acquisitions;

the

risk

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.

Forward-Looking Statements

3

Investment Thesis

A turn-around story underscored by steady improvement and organic market share gains

in the core franchise, operating within a challenging macro environment. 

Strong, tenured leadership team with a commitment to increasing shareholder value,

while fulfilling our vision to be the most highly regarded financial institution in the

markets we serve. 

Improving operating results, together with ongoing efforts to improve efficiencies and

further build-out our core franchise, are our priorities.

Improving our risk profile and maintaining a strong capital position remain central to our

operating philosophy.

Opportunities for additional branch consolidation and market share expansion.

Share price continues to trail capital formation and profitability as TBV ended 2Q15 at

$7.35/share.

The Value of First BanCorp

Franchise Overview

4

Founded in 1948

Headquartered in San Juan, Puerto Rico

with operations in PR, Eastern Caribbean

(Virgin Islands) and Florida

–

~2,600 FTE employees

(1)

2nd largest financial holding company in

Puerto Rico with attractive business mix

and substantial loan market share

Florida presence with focus on serving

southeast Florida region

The largest depository institution in the

US Virgin Islands with approximately 40%

deposit market share

164 ATM machines and largest ATM

network  in the Eastern Caribbean

Region

(2)

A well diversified operation with over

650,000 retail & commercial customers

As

of

June

30,

2015.

1) FTE = Full Time Equivalent.

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

Well-diversified with significant competitive strengths

Eastern Caribbean Region

7% of Assets

Southeast Florida

11% of Assets

5

June 2010:

Written

Agreement

with the FED

and Consent

Order with

FDIC

July 2010:

The U.S.

Treasury

exchanged

TARP for

convertible

preferred

August 2010:

Exchange of

89% Perpetual

Preferred

Stock for

Common

Feb 2011:

Sale of non-

performing

loans with

book value

of $269

million

Feb-April 2011:

Sale of $330

million of MBS

and  $518 million

of performing

residential

mortgages

March 2013:

Sale of NPLs with

book value of

$218 million &

entered separate

agreements for

sale of NPLs with

a book value of

$99 million

2010

2011

2015

October 2011:

Conversion of the

shares held by

the U.S. Treasury

into 32.9 million

shares of

common stock

May 2012:

Acquisition of a

$406 million

portfolio of

FirstBank-

branded credit

cards from FIA

June 2013:

Write-off of $66.6

million collateral

pledged to

Lehman, sale of

NPLs with book

value of $203.8

million and $19.2

million of OREO

October 2011:

Private placement

of $525 million in

common stock. 

Lead investors

included Thomas H.

Lee & Oaktree

2012

August 2013:

Completed

secondary

offering

reducing

ownership

interest of U S

Treasury and

PE Investors

2013

Sept 2014:

UST announced

on Sept 9    its

first predefined

written trading

plan, in which

it will be selling

it’s position in

FBP.

($ in millions)

2009

2Q 2015

Change ('09-'15)

% improvement

NPAs

$1,711

$644

$1,067

62%

NPAs/assets

8.7%

5.1%

359 bps

Government exposure

$1,364

$379

$985

72%

Tier 1 Common Ratio

4.1%

16.4%

1230 bps

TCE / TA

3.2%

12.6%

939 bps

Core deposits

$5,108

$7,174

$2,066

40%

Brokered deposits

$7,561

$2,331

$5,230

69%

NIM

2.69%

4.18%

149 bps

2014

Dec 2014:

Partial recapture

of DTA Valuation

Allowance of $303

million.  TBV

$7.45/share.

UST sold 4.4 mm

shares. Ownership

at 7.7%.

Feb 2015:

Acquired 10

branches, over $500

million in deposits

and $325 million of

residential mortgage

loans from FDIC as

receiver for Doral.

April 2015:

FDIC lifted

Consent

Order.

During 1Q

UST sold 5.0

mm shares.

Ownership

at 4.8%.

May 2015:

Sold $150 million of

classified assets.

June 2015:

Released DFAST results

in severely adverse

scenario FBP exceeds

well-capitalized

threshold

Franchise Overview

Our turnaround story

De-Risking of

Balance Sheet

Capital

Enhanced Franchise

Value

th

6

Franchise Overview

Well positioned Puerto Rico institution in a consolidating market

Source:

PR

Market

Share

Report

prepared

with

data

provided

by

the

Commissioner

of

Financial

Institutions

of

Puerto

Rico

as

of

6/30/15.

1) Puerto Rico only.

2) Calculated as institution bank branches within a mile of an FBP branch as a percentage of total institution branches. Alphabetical order.

Puerto

Rico

Total

Assets

(1)

Puerto

Rico

Total

Loans

(1)

Puerto

Rico

Deposits,

Net

of

Brokered

(1)

Strong and uniquely positioned franchise in

densely populated regions of core operating

footprint

Strong market share in loan portfolios

facilitates customer relationship expansion and

cross-sell to increase deposit share

Long-term opportunity for additional

consolidation

Branch overlap of greater than 44% with

five Puerto Rico institutions

(2)

1-mile branch overlap

(2)

72

100%

48

52

44

Institutions

Portfolio

Balance

Market

Share

Institutions

Portfolio

Balance

Market

Share

Institutions

Portfolio

Balance

Market

Share

1

Banco Popular

27,974

$     

47.4%

1

Banco

Popular

19,049

$     

43.9%

1

Banco Popular

20,609

$     

51.0%

2

FirstBank

9,604

16.3%

2

FirstBank

7,361

17.0%

2

FirstBank

4,579

11.3%

3

Oriental Bank

6,917

11.7%

3

Oriental Bank

4,780

11.0%

3

Banco Santander

4,316

10.7%

4

Scotiabank

5,703

9.7%

4

Banco Santander

4,486

10.3%

4

Oriental Bank

4,151

10.3%

5

Banco Santander

5,439

9.2%

5

Scotiabank

4,202

9.7%

5

Scotiabank

3,555

8.8%

6

Citibank

2,712

4.6%

6

Other

2,826

6.5%

6

Citibank

2,698

6.7%

7

Banco Cooperativo

591

1.0%

7

Citibank

506

1.2%

7

Banco Cooperativo

498

1.2%

8

Banesco

87

0.1%

8

Banco Cooperativo

155

0.4%

8

Banesco

42

0.1%

Total

59,027

$   

100.0%

Total

43,367

$   

100.0%

Total

40,449

$   

100.0%

7

Diversified business model across all regions

Franchise Overview

Consumer Banking

Mortgage Banking

Commercial Lending

•

Focus on small to middle

market commercial and

corporate borrowers across

FBP’s footprint. Complimented

by full suite of deposit and

business products.

•

Balanced risk/return profile to

manage concentration

risk/earnings.

•

Growth opportunities centered

in south Florida region and

expanding lending teams.

•

Building stronger transaction

banking services to target

market share opportunities.

•

Emphasis on cross-sell and core

deposit gathering with recent

launch of new products and

services.

•

Average origination

(1)

volume

over past 4 quarters of $450

million.

•

Originate, sale & servicing

model. 

•

Production channels centered

on expanding branch network

vs. correspondents/brokers.

•

Target majority conforming

originations.

•

Fannie, Freddie and FHA

Servicer.

•

Recently purchased residential

mortgage portfolio of $325

million  from FDIC as receiver

for Doral Bank.

•

Average origination

(1)

volume 

over the past 4 quarters of  

$168 million.

•

Attractive branch network

across densely populated regions

in Puerto Rico, south Florida and

the V.I.  Recently expanded

Puerto Rico footprint through

Doral acquisition.

•

Full suite of leading edge

deposit products. Increased

emphasis on transaction

banking, mobile and remote

channels.

•

Well-diversified, high-yielding

consumer portfolio: auto;

personal loans;  and credit card

portfolio.

•

Earnings growth focused on

ongoing market share gains and

product penetration via cross-

selling activities —notably tied

to mortgage, credit cards,

personal loans and auto finance.

•

Average origination

(1)

volume

over past 4 quarters of $234

million.

Strong Governance, Risk Management and Compliance Culture

1) Originations include purchases, refinancings, and draws from existing revolving and non-revolving commitments.

8

Executing for Earnings Growth

17.0%

16.3%

14.8%

11.3%

21.8%

17.5%

16.3%

16.9%

17.2%

18.0%

8.6%

20.6%

13.3%

11.2%

5.8%

Total Loans

Total Assets

Branches

Deposits, net of brokered

MoneyExpress (<$5k)

Commercial Loans

Auto Loans & Leasing

Credit Cards

Residential Mortgage

Mortgage Originations

Personal Loans

POS Terminals

ATM Terminals

Debit Cards

ACH Transactions

Puerto Rico Market Share

Puerto Rico

Opportunities for ongoing market share gains

-

Largest opportunity on deposit products, electronic

banking & transaction services

-

Growth in selected loan products for balanced

risk/return to manage risk concentration and diversify

income sources

-

FirstBank-branded credit card portfolio continues to

broaden and deepen relationships, while diversifying

revenue stream

SE Florida

Expansion prospects in Florida given long-term

demographic trends

-

Continue focus in core deposit growth, commercial

and transaction banking and conforming residential

mortgages

-

Lending teams generating growth in loan portfolio. 

Origination volume YTD 2Q 2015 increased $49 million,

or 25%, compared to YTD 2Q 2014.

Virgin Islands

Solidify leadership position by further increasing

customer share of wallet

2

2Q 2015

2

2

2

3

2

2

2

2

2

2

2

2

5

4

Goal: 20%

9

Non-Performing Assets ($ millions)

$1,790

$754

-

64%

Commercial NPLs are being carried at 62% of unpaid principal balance, net of

specific reserves.

New non-performing loan inflows amounted to $44.9 million in 2Q 2015, or a 62%

decrease, compared to inflows of $118.7 million in 1Q 2015 that included the

migration of the $75.0 million credit facility with PREPA.

Total NPAs declined by $110 million or 15% compared to 1Q 2015, mainly from

the bulk sale executed in 2Q 2015.

NPAs decreased over $1.1 billion or 64% from the peak in 2010

to $644 million or 5.1% of assets.

Proactively

Managing Asset Quality

NPA Composition

$644

Loan

Portfolio

Book

Value

Accumulated

NCOs

Reserves

NCA

C&I

$143.9

$37.3

$13.1

72.2%

Const.

63.9

93.4

2.1

39.3%

CRE

95.3

18.6

7.6

77.0%

Total

$303.2

$149.3

$22.9

62.0%

Commercial NPLs (Includes HFS)

1) Net Carrying Amount = % of carrying value net of reserves and accumulated charge-offs.

Residential

Consumer

Construction

Commercial

Loans HFS

REO & Repo

$757

$744

$717

$754

$644

1,639

1,551

1,506

1,239

1,233

1,208

1,184

1,138

1,119

1,066

1,008

976

683

506

498

496

522

565

560

524

564

464

150

150

163

163

172

176

188

194

213

242

251

260

256

151

147

175

154

138

130

138

136

133

159

148

95

80

55

55

55

55

55

55

48

9.5%

10.0%

9.3%

10.2%

10.2%

9.6%

8.4%

5.7%

5.7%

5.9%

5.7%

5.1%

Loans HFI

Repossessed Assets & Other

NPLs HFS

NPAs / Assets

175

185

181

173

175

41

43

43

35

33

39

30

29

27

16

310

301

271

329

239

55

55

55

55

48

138

130

138

136

133

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

(1)

10

Total outstanding exposure to the Puerto

Rico Government was $392 million with a

book value of $378 million as of June 30,

2015.

–

Investment portfolio outstanding principal of

$65.5 million, being carried on books at $34.6

million.

–

Loan exposure is

diversified among all sectors

with the largest public company exposure to

PREPA on nonaccrual status.  PREPA UPB of

$75.0 million.

–

Largest  government exposure to

municipalities supported by assigned tax

revenues. 

In addition, there is $131 million of

indirect exposure to the Tourism

Development Fund supporting hotel

projects.

–

Any inability of the TDF to honor its payment

guaranty, for which it has been making

payments

since

2012,

may

result

in

a

change

in the classification of the underlying loans.

Total Government Deposits as of June 30,

2015 were $327 million.

–

Time deposits $22.6 million compared to $17.6

million in 1Q 2015.

–

Transaction

accounts

$304.1

million

compared

to $265.2 million in 1Q 2015.

($ in millions)

Government Unit

Time Deposits

Transaction

Accounts

Total

Municipalities

21.5

$           

154.0

$         

175.5

$        

Public Agencies

1.1

149.8

150.9

Public Corporations

-

0.3

0.3

  Total Deposits

22.6

$          

304.1

$       

326.7

$      

Investment Portfolio

52.7

$       

Central Government:

23.3

$       

   2 loans

16.3

7.0

Public Corporations:

98.1

$       

   3 loans

74.1

CRE - Operating Revenues

20.1

3.9

Municipalities:

204.3

$     

   10 loans

204.3

Total Direct Government Exposure

378.4

$    

Government Unit

Source of Repayment

Total

Outstanding

Property Tax Revenues

Commonwealth Appropriations

CRE & Commonwealth Appropriation

PREPA Fuel Line

Rental Income

Puerto Rico Government Exposure

11

Loan Originations

(1)

($ millions)

Loan Portfolio ($ millions)

2,795

2,820

3,011

3,332

3,328

2,062

2,027

1,983

1,937

1,899

148

142

123

124

121

4,461

4,327

4,145

4,092

3,870

72

80

77

82

80

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

$9,538

$9,396

$9,339

$9,567

161

169

154

153

197

272

245

235

220

235

9

8

12

9

14

440

495

490

395

419

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

$882

$917

$891

$777

Residential Mortgage

Consumer & Finance Leases

Construction

Commercial

Loans HFS

Residential mortgage portfolio has grown following

acquisition of competitor.

Reduction in the loan portfolio primarily driven by de-

risking strategies, specifically the bulk sale

transaction in 2Q 2015.

Focus remains on growth opportunities within our

markets.

Increased distribution channels are benefiting our

residential and consumer origination volume.

Florida continues to drive origination volume with

$133 million in originations during 2Q 2015.

The commercial new business pipelines for Puerto

Rico remains stable while Florida is improving.

Despite a challenging market environment, we continue

to selectively pursue quality lending relationships:

Origination and renewal activity stable across all

products in recent quarters:

1) Including refinancing and total draws from existing revolving and non-revolving commitments.

Business Model Driven by Strong Origination Capabilities

$9,298

$866

12

2Q 2015 Consumer Loan Composition

2Q 2015 Commercial Loan Composition

Our well-diversified business model within commercial,

consumer and residential across three unique regions

allows us to be agile when responding to growth

opportunities.

Commercial represents 44%, residential represents 37%

and consumer represents 19% of the total loan portfolio.

21% of Residential portfolio is located outside of Puerto

Rico.

Diversified sources of revenue:

Well Balanced Loan Portfolio Mix

2Q 2015 Residential Loans by Geography

13

Total Deposit Composition (%)

Core Deposits

(1)

($ millions)

1) Core deposits are total deposits excluding brokered CDs.

$5,108

$6,176

$6,490

$6,738

YTD 2015 core deposits increased $577 million.  Puerto

Rico core deposits, excluding the Doral acquisition, grew

approximately $270 million YTD 2015.

-

Focus on deposit pricing has improved cost of deposits,

net of brokered, which declined to 0.63% YTD June

2015.

Continue to reduce reliance on brokered deposits which

declined $556.3 million YTD 2015.

Successful core deposit growth

Retail

Consumer

CDs & IRAs

Public Funds

$7,174

$5,800

$6,597

2009

2Q 2015

Cost of Deposits

Favorable Funding Mix

2,381

2,477

2,654

2,776

2,842

2,841

3,139

774

763

915

1,108

1,136

1,263

1,346

1,505

2,090

2,126

2,077

2,054

2,092

2,195

448

470

481

529

706

401

494

2009

2010

2011

2012

2013

2014

2Q 2015

1.88%

1.56%

1.34%

0.97%

0.81%

0.72%

0.63%

0.50%

1.00%

1.50%

2.00%

2009

2010

2011

2012

2013

2014

YTD

2015

Total Deposits, Excluding Brokered CDs (%)

14

Improving Core Performance

Pre-tax pre-provision income of $47.7 million

average 4 quarters of $51 million.

Replacement of NPLs with performing loans should reduce provisioning needs.

Future earnings potential with a reduction in costs associated with managing NPLs and OREO.

Opportunities for income improvement with focused efforts on non-interest expense reduction.

Potential for additional loan growth opportunities outside of the Puerto Rico market.

Strong pre-tax pre-provision income with opportunities for improved efficiencies

1) See pre-tax pre-provision income reconciliation on page 29.

Income Statement

($ in millions except per share data)

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

GAAP Net Interest Income

129.9

$            

127.7

$             

129.2

$             

125.6

$             

126.5

$             

Provision for loan and lease losses

26.7

27.0

23.9

33.0

27.4

Provision related to bulk sale

-

-

-

-

46.9

Non-interest income

16.6

16.2

17.9

19.3

20.1

Non-recurring non-interest income

(0.7)

-

-

13.4

(13.5)

Non-interest expense

97.6

92.9

93.7

88.8

96.2

Non-recurring non-interest expense

0.6

0.7

-

2.9

6.6

Pre-tax net income (loss)

20.9

23.3

29.5

33.7

(43.9)

Income tax (expense) benefit

0.3

0.1

301.3

(8.0)

9.8

Net income (loss)

21.2

$            

23.2

$            

330.8

$          

25.6

$            

(34.1)

$           

Adjusted Pre-tax pre-provision earnings

48.6

$             

50.8

$             

50.7

$             

55.4

$             

47.7

$             

Net Interest Margin, (GAAP) (%)

4.24%

4.14%

4.18%

4.18%

4.18%

Net income (loss) per common share-basic

0.11

$             

0.11

$             

1.57

$             

0.12

$             

(0.16)

$             

Tangible book value per common share

5.72

$             

5.81

$             

7.45

$             

7.55

$             

7.35

$             

1

15

Earnings Continue to Drive Capital Formation

Total stockholders’ equity amounted to $1.7 billion as of June 30, 2015, a decrease of $37.5 million

from March 31, 2015, mainly driven by the net loss of $34.1 million and a  decrease of $10.2 million

in other comprehensive income due to the fair value of U.S. agency MBS, offset by $5.3 million of

trust preferred securities exchanged for common stock during the second quarter.

DFAST results were disclosed in 2Q 2015 and even in the severely adverse scenario, all capital ratios

exceed well-capitalized thresholds throughout the nine-quarter time horizon.

19.4%

11.9%

16.4%

12.6%

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

Total Risk

Based Capital

Tier-1

Leverage

Tier

1 Common

Tangible Common

-

-

Capital Ratios (%)

16

Stronger Franchise: PROVEN

SUCCESS

IMPLEMENTING

STRATEGIC

PLAN

Our franchise has never been stronger and is poised to increase shareholder value

navigating through fiscal and economic challenges.

Strong, tenured leadership team with exceptional track record of executing strategic

plan during challenging economic cycle. Executive officers are well-vested with over 30%

of base salary in the form of stock compensation. 

Priorities remain improving operating results, together with ongoing efforts to become

more efficient and further build-out our core franchise.

Improving our risk profile and maintaining a strong capital position remain central to our

operating philosophy.

Share price continues to trail capital formation and profitability as TBV ended 2Q15 at

$7.35/share.

The Value of First BanCorp

17

Exhibits

18

Exhibits

Page

Stock Profile…………………………………………………………………………………………………………….

19

Q2 Earnings Presentation…………………………………………………………………………………………

20

Quarterly NPL Migration Trends………….........................................……………………………………..

27

Non-GAAP Reconciliations……………………………………………………………………………………….

28

Stock Profile

19

Trading Symbol:

•

FBP

Exchange:

•

NYSE

Share Price (9/11/15):

•

$3.76

Shares Outstanding          

(as of July 31, 2015):

•

214,721,826

Market Capitalization

(9/11/15):

•

$807 million

1 Yr. Average Daily Volume:

•

903,214

Price (9/11/15)

to Tangible

Book (6/30/15):

•

0.51x

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 $525m private placement of Common Stock completed in October 2011. 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. 

2)

Information as of the 4/15/15 Proxy filing.  Excludes shares owned by directors of above named beneficial owners.

Beneficial Owner

Amount

Percent of

Class

Entities affiliated with

Thomas H. Lee Partners, L.P.

41,854,770

19.5%

Entities managed by Oaktree

Capital Management, L.P.

41,854,769

19.5%

United States Department of

the Treasury

(1)

11,577,452

5.4%

All current directors,

Executive Officers and the

Chief Accounting Officer as a

group (18 persons as a

group)

(2)

3,445,935

1.6%

20

Results

of

Operations:

SECOND

QUARTER

FINANCIAL

HIGHLIGHTS

($ in thousands, except per share data)

2Q 2015

1Q 2015

Variance

2Q 2014

Interest income

151,632

$    

152,485

$    

(854)

$         

158,423

$    

Interest expense

25,155

26,838

(1,682)

28,516

Net interest income

126,477

125,647

830

129,907

Provision for loan and lease losses

74,266

32,970

41,296

26,744

Non-interest income

19,767

19,442

325

16,310

Loss on investments & impairments

(13,097)

(156)

(12,941)

291

Bargain purchase gain

-

13,443

(13,443)

-

Equity in losses of unconsolidated entities

-

-

-

(670)

Total non-interest income

6,670

32,729

(26,059)

15,931

Personnel expense

37,945

35,654

2,291

34,793

Occupancy and equipment expense

15,059

14,349

710

14,482

Insurance and supervisory fees

6,796

6,860

(64)

10,784

REO expense

4,874

2,628

2,246

6,778

Other operating expenses

38,125

32,238

5,887

31,308

Total non-interest expense

102,799

91,729

11,070

98,145

Pre-tax income (loss)

(43,918)

33,678

(77,595)

20,949

Income tax expense (benefit)

(9,844)

8,032

(17,876)

(276)

Net income (loss)

(34,075)

$   

25,645

$    

(59,720)

$   

21,225

$    

Select Financial Information

Adjusted Pre-tax, pre-provision income

47,727

$      

55,445

$      

(7,718)

$      

48,622

$      

Fully diluted EPS

(0.16)

$        

0.12

$         

(0.28)

$       

0.11

$         

Book value per share

7.60

$         

7.81

$         

(0.21)

$       

5.97

$         

Tangible book value per share

7.35

$         

7.55

$         

(0.20)

$       

5.72

$         

Common stock price

4.82

$         

6.20

$         

(1.38)

$       

5.44

$         

Net Interest Margin (GAAP)

4.18%

4.18%

0.00%

4.20%

Efficiency ratio

77.2%

57.9%

19.3%

67.3%

21

Results of Operations: SECOND

QUARTER

FINANCIAL

HIGHLIGHTS

($ in millions)

$2.4 million of interim

servicing costs were paid in

2Q 2015 through the

conversion date. The

estimated internal costs for

the corresponding services are

approximately $0.8 million, or

approximately $0.4 million a

month. During 1Q 2015 the

interim servicing costs were

$1.2 million.

$1.3 million in consulting and

legal fees expenses for special

projects, as well as strategic,

stress testing and capital

planning

not expected to be

incurred on an ongoing basis.

1) Amount is presented net of normal processing costs.

2Q 2015

1Q 2015

Pre-tax income (loss), as reported

(43.9)

$        

33.7

$           

Significant unusual items:

   Loss on bulk sale of assets

48.7

-

   Other than temporary impairment charge

12.9

-

   Acquisition and conversion costs

2.6

2.1

   Bargain purchase gain

-

(13.4)

Adjusted pre-tax income, as reported

20.2

22.3

Other estimated non-recurring amounts:

  Excess interim servicing costs

(1)

1.6

0.8

  Other professional fees

1.3

-

Non-GAAP pre-tax income

23.0

$          

23.1

$           

22

Key Highlights

Net Interest Income ($ millions)

Net interest income increased $0.9 million in

2Q 2015. This increase was mainly due to:

o

A $2.8 million increase in interest income on

residential mortgages primarily due to the

acquisition of Doral Bank; and

o

A $1.7 million decline in interest expense and

funding costs.

This increase was partially offset by:

o

A $1.6 million decrease in interest income on

securities due to accelerated prepayment speeds;

o

A $1.5 million decline in interest income on

commercial loans attributable to $127 million

decline in average volume, including accruing loans

sold as part of the bulk sale of assets; and

o

A $0.8 million decrease in interest income on

consumer loans due to a $44 million decline in

average volumes.

GAAP NIM was flat quarter-over-quarter.

Results of Operations: NET

INTEREST

INCOME

$129.9

$127.7

$129.2

$125.6

$126.5

4.21%

4.14%

4.18%

4.18%

4.18%

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

Net Interest Income ($)

Net Interest Margin (GAAP %)

23

Key Highlights

Non-Interest Income

(1)

($ millions)

4.2

4.2

4.2

4.6

5.2

3.0

3.8

4.5

3.6

4.8

9.3

8.2

9.3

11.1

10.1

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

  Other

  Mortgage Banking

  Service Charges on Deposits

1) Non interest income excludes equity losses of unconsolidated entities, OTTI, HFS bulk sale impact and bargain purchase gain.

Excluding the $12.9 million OTTI charge on

Puerto Rico Government debt securities and

the $0.6 million pre-tax loss on a commercial

loan HFS and sold in the bulk sale, adjusted

non-interest income increased $0.8 million

compared to 1Q 2015, due to:

o

A $1.2 million increase in revenues on

mortgage banking;

o

A $0.6 million increase in service charges

on deposits and $0.3 million increase in

other fees related to deposits assumed

from Doral Bank.

This increase was partially offset by $1.5

million decrease in seasonal contingent

insurance commissions recognized in 1Q

2015.  

$16.6

$16.2

$17.9

$19.3

Results of Operations: NON-INTEREST

INCOME

$20.1

24

Results of Operations: OPERATING

EXPENSES

A $2.3 million increase in credit related expenses

driven by higher write-downs to commercial OREO

properties in Puerto Rico.

A $2.2 million increase in compensation and

benefit expenses mainly due to salary merit

increases that became effective early in the

second quarter and the full quarter impact of

personnel costs related to branches acquired from

Doral Bank.

A $0.8 million increase in adjusted occupancy and

equipment costs primarily related to the full

quarter impact of rental, depreciation and

maintenance expenses associated with the

acquired Doral Bank branches.

A $1.0 million increase in adjusted business

promotion expenses, primarily related to seasonal

marketing

campaigns.

Interim servicing costs of $2.4 million and $1.2

million were paid in the 2Q 2015 and 1Q 2015

respectively, through final conversion in May.

Assuming normal internal processing costs, these

amounts would have been approximately $0.8

million in 2Q 2015 and $0.4 million in 1Q 2015.

$1.3 million in consulting and legal fees expenses

for special projects, as well as strategic, stress

testing and capital planning not expected to be

incurred on an ongoing basis.

($ in millions)

2Q 2015

1Q 2015

% Change

Credit related expenses

8.4

$      

6.1

$      

39%

Compensation & benefits

37.8

35.7

6%

Occupancy & equipment

15.1

14.2

6%

Credit & debit card processing expenses

3.9

4.0

0%

Taxes other than income

3.1

3.0

4%

Other professional fees

4.7

4.5

4%

Deposit insurance prem & supervisory

6.8

6.9

-1%

Business promotion

3.7

2.7

35%

All other expenses

12.7

11.8

7%

Non-GAAP operating expenses

96.2

$   

88.8

$   

8%

Doral acquisition & conversion

2.6

2.1

23%

Excess interim servicing costs - Doral

1.6

0.8

89%

Other professional fees

1.3

-

Bulk sale of assets & related loss on OREO

1.2

-

  Total operating expenses, as reported

102.8

$ 

91.7

$   

12%

25

Key Highlights

Net Charge-Offs ($ millions)

5

6

7

5

3

17

18

19

16

11

28

15

2

8

62

3

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

  Residential

  Consumer

  Commercial

  Construction

Total net charge-offs for 2Q 2015 were $79 million, or

3.35% of average loans, compared to $29 million in 1Q

2015. Excluding the impact of charge-offs related to

the bulk sale, total net charge-offs in 2Q 2015 were

$17.4 million, or an annualized 0.75% of average loans,

compared to $29.3 million, or 1.25%, in 1Q 2015.

Allowance coverage ratio of 2.40% as of June 30, 2015

compared to 2.38% as of March 31, 2015. 

Loan

Portfolio

Book Value

Accumulated

NCOs

Reserves

NCA

(1)

C&I

$143.9

$37.3

$13.1

72.2%

Const.

63.9

93.4

2.1

39.3%

CRE

95.3

18.6

7.6

77.0%

Total

$303.2

$149.3

$22.9

62.0%

$52

$43

$27

$29

Commercial NPLs (Includes HFS)

1) Net Carrying Amount = % of unpaid principal balance net of reserves and accumulated charge-offs.

Results of Operations: NET

CHARGE-OFFS

$79

26

Results of Operations: KEY

MARGIN

DRIVERS

Q2  vs. Q1 Change in Average Interest Earning Assets & Interest Bearing Liabilities

1) On a tax equivalent basis and excluding valuations

$

in

%

in

Average

Average

Volume

Rate

Average total investments

(70,779)

$        

(0.25%)

(1,948)

$  

Average loans & leases:

Residential mortgage loans

200,621

(0.06%)

2,834

Construction loans

(2,165)

0.09%

34

C&I and commercial mortgage loans

(125,039)

(0.20%)

(2,838)

Finance leases

(1,550)

(0.22%)

(104)

Consumer loans

(42,205)

(0.00%)

(648)

Total average loans

29,662

(0.12%)

(722)

Average total interest-earning assets

(41,117)

(0.13%)

(2,670)

Interest-bearing liabilities:

Brokered CDs

(298,716)

0.01%

571

Other interest-bearing deposits

185,939

(0.04%)

143

Other borrowed funds

(160,765)

0.05%

979

Average total interest-bearing liabilities

(273,542)

(0.05%)

1,683

Increase (decrease) in net interest income

(1)

(987)

$      

Net Interest

Income

Changes

27

QUARTERLY

NPL MIGRATION

TRENDS

Residential

Mortgage

Commercial

Mortgage

Commercial &

Industrial

Construction

Consumer

Total

Beginning balance

172,583

$     

142,385

$     

186,500

$     

27,163

$       

34,914

$       

563,545

$     

    Plus:

         Additions to non-performing

25,058

3,902

2,576

280

13,070

44,886

    Less:

        Non-performing loans transferred to OREO

(5,630)

(6,826)

(513)

(120)

(556)

(13,644)

        Non-performing loans charged-off

(2,388)

(2,777)

(647)

-

(8,759)

(14,571)

        Loans returned to accrual status / collections

(14,588)

(7,253)

(4,061)

(151)

(5,271)

(31,324)

        Bulk sale transaction

-

(34,343)

(39,921)

(11,054)

-

(85,318)

Ending balance

175,035

$     

95,088

$       

143,935

$     

16,118

$       

33,398

$       

463,574

$     

Residential

Mortgage

Commercial

Mortgage

Commercial &

Industrial

Construction

Consumer

Total

Beginning balance

180,707

$     

148,473

$     

122,547

$     

29,354

$       

42,815

$       

523,896

$     

    Plus:

         Additions to non-performing

19,213

5,802

79,503

128

14,079

118,725

    Less:

        Non-performing loans transferred to OREO

(5,048)

-

(4,866)

(265)

-

(10,179)

        Non-performing loans charged-off

(5,073)

(3,970)

(4,304)

(605)

(13,815)

(27,767)

        Loans returned to accrual status / collections

(17,216)

(7,920)

(6,380)

(1,449)

(8,165)

(41,130)

Ending balance

172,583

$     

142,385

$     

186,500

$     

27,163

$       

34,914

$       

563,545

$     

March 31, 2015

June 30, 2015

28

Use of Non-GAAP Financial Measures

Basis of Presentation

Use of Non-GAAP Financial Measures

This presentation may contain 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 the 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 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

other

intangibles,

such

as

the

purchased credit card relationship intangible. Tangible assets are total assets less goodwill, core deposit intangibles, and other intangibles, such as the 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.

(In thousands, except ratios and per share information)

June 30,

March 31,

December 31,

September 30,

June 30,

2015

2015

2014

2014

2014

Total equity -

GAAP

$ 

1,668,220

$    

1,705,750

$

1,671,743

$    

1,324,157

$  

1,306,001

Preferred equity

(36,104)

(36,104)

(36,104)

(36,104)

(36,104)

Goodwill

(28,098)

(28,098)

(28,098)

(28,098)

(28,098)

Purchased credit card relationship

(14,854)

(15,622)

(16,389)

(17,235)

(18,080)

Core deposit intangible

(10,283)

(10,914)

(5,420)

(5,810)

(6,200)

Tangible common equity

$  

1,578,881

$   

1,615,012

$     

1,585,732

$    

1,236,910

$   

1,217,519

Total assets -

GAAP

$ 

12,578,813

$  

13,147,919

$ 

12,727,835

$  

12,643,280

$ 

12,523,251

Goodwill

(28,098)

(28,098)

(28,098)

(28,098)

(28,098)

Purchased credit card relationship

(14,854)

(15,622)

(16,389)

(17,235)

(18,080)

Core deposit intangible

(10,283)

(10,914)

(5,420)

(5,810)

(6,200)

Tangible assets

$  

12,525,578

$ 

13,093,285

$  

12,677,928

$ 

12,592,137

$ 

12,470,873

Common shares outstanding

214,694

213,827

212,985

212,978

212,760

Tangible common equity ratio

12.61%

12.33%

12.51%

9.82%

9.76%

Tangible book value per common share

7.35

$               

7.55

$               

7.45

$               

5.81

$               

5.72

$               

Tangible Equity:

Tangible Assets:

29

Use of Non-GAAP Financial Measures

Basis of Presentation

Use of Non-GAAP Financial Measures

This presentation may contain 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 the earnings release.

Adjusted Pre-Tax, Pre-Provision Income

Adjusted pre-tax, pre-provision income is a non-GAAP performance metric that management believes is useful in analyzing underlying performance trends,

particularly in times of economic stress.  Adjusted pre-tax, pre-provision income, as defined by management, represents net income (loss) 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, equity in earnings

or loss of unconsolidated entity up until the second quarter of 2014 when the value of the investment became zero as well as certain items identified as unusual,

non-recurring or non-operating.

In addition, from time to time, adjusted pre-tax, pre-provision income will reflect the omission of revenue or expense items that management judges to be outside

of

ordinary

banking

activities

or

of

items

that,

while

they

may

be

associated

with

ordinary

banking

activities,

are

so

unusually

large

that

management

believes

that

a complete analysis of the Corporation’s performance requires consideration also of adjusted pre-tax, pre-provision income that excludes such amounts.

(Dollars in thousands)

June 30,

March 31,

December 31,

September 30,

June 30,

2015

2015

2014

2014

2014

(Loss) income before income taxes

(43,918)

$           

$        

33,678

29,454

$              

23,265

$       

20,949

$              

Add: Provision for loan and lease losses

74,266

32,970

23,872

26,999

26,744

Add/Less: Net loss (gain) on investments and impairments

13,097

156

172

245

(291)

Less: Unrealized gain on derivative instruments

-

-

(265)

(418)

(262)

Less: Prepayment penalty collected on a commercial mortgage loan

-

-

(2,546)

-

-

Less: Bargain purchase gain on assets acquired/deposits assumed from Doral

-

(13,443)

-

-

-

Add: Non-recurring expenses for acquisition of loans/assumption of deposits

from Doral

2,562

2,084

-

659

576

Add: Loss on a commercial mortgage loan held for sale and certain OREOs included

in the bulk sale of assets

802

-

-

-

-

Add: Bulk sale of assets related expenses

918

-

-

-

-

Add: Branch consolidations and restructuring expenses

-

-

-

-

236

Add/Less: Equity in loss of unconsolidated entity

-

-

-

-

670

Adjusted pre-tax, pre-provision income (1)

47,727

$             

55,445

$             

50,687

$              

50,750

$       

48,622

$              

Change from most recent prior quarter-amount

(7,718)

$              

4,758

$               

(63)

$                   

2,128

$         

(8,278)

$               

Change from most recent prior quarter-percentage

-13.9%

9.4%

-0.1%

-14.5%

(1)

See

"Basis

of

Presentation"

for

definition.

Quarter Ended

4.4%