First BanCorp. (FBP) 8-K Results of Operations and Financial Condition

Investor Presentation

Investor Presentation

February 2012

February 2012

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,” “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: uncertainty about whether the Corporation 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 Puerto Rico

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

maintain certain capital levels and reduce its special mention, classified, delinquent and non-performing assets; 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 its

stockholders in the future due to its inability to receive approval from the FED to receive dividends from the Bank; the risk of being subject to possible additional regulatory

actions; 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

local 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 to 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 further downgrades in the credit ratings of the Corporation’s long-term senior debt will

adversely affect the Corporation’s ability to make future borrowings; 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, 2010 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

154 ATM machines and largest ATM network  in

the ECR

More than 2,500 FTE employees

As of December 31, 2011

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

-

$13.1

billion

Total

Deposits

-

$9.9

billion

Puerto Rico:  84% of Assets

Total

Loans

-

$10.6

billion

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

Unique challenger to Puerto Rico’s largest

player

1 Puerto Rico only; 2 Credit Cards provided through alliance with Bank of America; 3 Provided through alliance with UBS; 4 Established primarily for municipal financing

Source: PR Market Share Report prepared with data provided by the Commissioner of Financial Institutions of Puerto Rico as of 12/31/2011

Unique challenger to Puerto Rico’s largest player

4

Puerto Rico Total Assets¹

Puerto Rico Total Loans¹

Portfolio

Balance

Market

Share

1

Banco Popular

$25,678

36.3%

2

FirstBank

$10,840

15.3%

6

Scotiabank

$8,122

11.5%

3

Oriental Bank

$6,642

9.4%

4

Banco Santander

$6,587

9.3%

5

Doral Bank

$5,728

8.1%

7

BBVA

$5,016

7.1%

8

Citibank

$1,699

2.4%

9

Banco Cooperativo

$473

0.7%

10

BBU

$3

0.0%

Total

$70,789

100%

Institutions

Portfolio

Balance

Market

Share

1

Banco Popular

$19,150

36.4%

2

FirstBank

$8,743

16.6%

3

Scotiabank

$5,778

11.0%

4

Banco Santander

$5,348

10.2%

5

Doral Bank

$4,272

8.1%

6

BBVA

$3,700

7.0%

7

Oriental Bank

$1,731

3.3%

8

Citibank

$678

1.3%

9

Bank of America

$501

1.0%

10

Banco Cooperativo

$176

0.3%

11

Other

$2,522

4.8%

Total

$52,599

100%

Institutions

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

1 As of  December 31, 2011

2 Between December 31, 2009 and December 31, 2011

5

Successful Execution of Strategic Plan

Significant accomplishments over past 24 months

Executing

Capital Plan

Strengthened capital structure

Converted TARP preferred shares into common

Completed exchange of 89% preferred  stocks into common

Completed $528 million capital raise and rights offering

Successfully achieved imposed regulatory capital ratios of 12%, 10% and 8%

De-risking

Balance Sheet

Made significant progress on improving risk profile reducing NPAs by $453mm since 3/31/10 peak¹

Disposed of $636 million NPLs and classified loans via note sales, including a $517 million bulk sale

Deleveraged balance sheet reducing assets by 16%²

Enhancing Franchise

Value

Successfully protected our Brand, market position and franchise value

Increased core deposits by $1.1 billion²

and reduced reliance on brokered deposits by 51%²

Introduced new products and achieved efficiency improvements (new Service Center, tech

infrastructure, internet banking)

Strengthening 

Governance &

Risk Management

Strengthened management team and governance structure; culture change

Complied with Regulatory Agreements

Reconstituted Board of Directors

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

Strengthened Capital Position

Completed $528 million capital raise and rights offering

Issued

150

million

shares

of

common

stock

at

a

purchase

price

of

$3.50

per

share

to

institutional

investors

Simultaneous with the completion of the capital raise, issued 32,941,797 shares of common stock to the US Treasury

upon conversion of all of the Corporation’s outstanding Preferred Stock, Series G

Achieved

strong

capital

ratios,

well

in

excess

of

regulatory

targets

and

“well-capitalized”

levels

Improved Tangible Common Equity ratio to 10.25% and Tier 1 common equity to risk weighted assets to

12.96%¹

1 Non-GAAP financial measure. See reconciliation on page 19

Additional capital in place to support growth

6

Regulatory Capital Ratios for First BanCorp

12.0%

12.0%

12.4%

12.4%

17.1%

10.7%

10.7%

11.1%

11.1%

15.8%

7.6%

7.8%

8.0%

8.4%

11.9%

0.0%

6.0%

12.0%

18.0%

2010

1Q 11

2Q 11

3Q 11

4Q 11

Total Capital

Tier 1 Capital

Leverage

Executed Targeted Deleverage

Balance Sheet deleverage as a capital preservation

strategy, focused mostly on investment securities,

higher risk assets and non-core relationships

Loan categories decreased as a result of loan sales, pay-

downs and charge-offs

Selective well diversified loan originations to replace

interest income from non-performing loan

Continued to reduce risks in the Balance Sheet

7

($ in millions)

Loan Portfolio

Asset Composition

$690

$592

$526

$563

$899

$595

$599

$577

$2,175

$3,154

$1,707

$1,486

$476

$433

$175

$88

$4,240

$4,774

$3,008

$2,714

$-

$5,000

2008

2009

2010

2011

Residential

Consumer

Commercial & CRE

Construction

Loan Originations

$12,807

$13,421

$11,403

$10,081

$5,709

$4,867

$3,369

$2,244

$975

$1,340

$821

$802

$19,491

$19,628

$15,593

$13,127

$0

$20,000

2008

2009

2010

2011

Total loans, net of ALLL

Investments & Money Markets

Cash & Other

$3,481

$3,596

$3,417

$2,874

$2,108

$1,898

$1,716

$1,562

$5,962

$6,942

$5,822

$5,696

$1,527

$1,493

$701

$428

$10

$20

$301

$16

$13,088

$13,949

$11,956

$10,575

$-

$18,000

2008

2009

2010

2011

Residential

Consumer

Commercial & CRE

Construction

Loans Held for Sale

Improved Risk Profile

Reduced NPLs by 31% since 3/31/2010¹

Decreasing charge-off trend

Significantly reduced construction portfolio exposure by 72% to

$428 million since 2008 peak¹, a major driver of loan losses

Focused on loan sales, organic workouts, note sales and

liquidating OREO through Special Assets Group

Increased preventive measures for early detection

Opportunistic sales of non-performing assets will continue

1 As of  December 31, 2011

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

Credit quality continues to improve at a steady pace

8

($ in millions)

Allowance coverage ratio of 4.7%

Net Charge-offs

Non-performing Assets

Book Value

Accumulated

Charge-offs

Reserves

Net Carrying

Amount²

C & I

270

$             

98

$               

60

$               

57%

Construction

250

137

43

54%

CRE

240

23

41

76%

Total

761

$             

258

$             

144

$             

60%

Commercial Non-performing Loans¹

1 Net of Brokered CDs

2 As of  December 31, 2011

$1,625

$1,505

$2,090

$2,126

$564

$448

$470

$481

$723

$774

$763

$916

$1,716

$2,381

$2,477

$2,654

$4,628

$5,108

$5,800

$6,176

$-

$6,500

2008

2009

2010

2011

CDs & IRAs

Government

Commercial

Retail

Successful execution of core deposit growth strategy; $1.1 billion

or 21% increase since December 2009

Cost of interest bearing deposits, net of brokered CD’s,

decreased during 2011 to 1.51% from 2.20% in 2009

Overall deposit mix improvement with reduced reliance on

brokered CDs

38% of deposits are brokered CDs², down from 60% in 2009

Focus in electronic services strategy to support deposits’

growth

resulted in a 30% increase in Cash Management fees and an 87%

increase in POS terminals during 2011

Building Franchise Value

Successful core deposits growth over recent years

9

($ in millions)

Deposits, Net of Brokered

2.92%

2.20%

1.79%

1.51%

2.45%

1.87%

1.56%

1.34%

0.00%

1.00%

2.00%

3.00%

2008

2009

2010

2011

Interest Bearing Deposits, Net of Brokered

Total Deposits, Net of Brokered

Total Deposit Composition

Cost of Deposits¹

Interest Bearing

55%

Non-

interest

Bearing

7%

Brokered CDs

38%

Focus on Rebuilding Earnings

2011 Highlights

Net loss for the year decreased $442 million to $82 million

Net

interest

margin

increased

21

basis

points

to

2.82%

for

2011,

reaching

2.99%

in

4Q

2011

Provision for loan and lease losses decreased $398 million  to $236 million

Non-interest expenses decreased $28 million to $338 million

1 Non-GAAP financial measure

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

3 See reconciliation on page 20

4 See reconciliation on page 21. All share and per share data have been adjusted to retroactively reflect the 1-for-15 reverse stock split effected January 7, 2011

Stable PTPP earnings with realizable opportunities for improvement

10

($ in millions, except per share results)

Income Statement

4Q 2011

3Q 2011

2Q 2011

1Q 2011

4Q 2010

3Q 2010

2Q 2010

1Q 2010

Net interest income, excluding valuations

1

100

$          

97

$            

96

$            

106.5

$       

112

$          

115

$          

116

$          

119

$          

Valuations

2

(2)

(3)

(1)

(0.2)

0.1

(1.3)

3

(2)

GAAP Net Interest Income

98

$            

94

$            

94

$            

106.3

$       

112

$          

113.7

$       

119

$          

117

$          

Provision for loan and lease losses

42

46

59

89

93

120

147

171

Non-interest income

15

14

39

40

14

19

40

45

Non-interest expense

86

83

86

83

88

89

99

91

Pre-tax net loss

(15)

(21)

(12)

(25)

(55)

(76)

(87)

(100)

Provision related to loans transferred to held for sale

-

103

-

-

-

Income tax (expense) benefit

(0)

(3)

(3)

(3)

(93)

1

(4)

(7)

Net loss

(15)

$           

(24)

$           

(15)

$           

(28)

$           

(251)

$         

(75)

$           

(91)

$           

(107)

$         

Adjusted Pre-tax pre-provision earnings

1, 3

28

$            

29

$            

30

$            

42

$            

39

$            

45

$            

36

$            

40

$            

Net Interest Margin, excluding valuations (%)

2.99%

2.82%

2.64%

2.83%

2.77%

2.67%

2.51%

2.52%

Net income (loss) per common share-

basic

4

1.36

$         

(1.46)

$        

(1.04)

$        

(1.66)

$        

(12.67)

$     

31.30

$       

(15.70)

$     

(18.34)

$     

Path to Profitability

Targeted strategies for growth

11

2

2

4

4

2

2

3

4

3

4

3

4

3

4

5

Rank

Market Share in Main Market¹

1 Puerto Rico only

Source: Office of the Commissioner of Financial Institutions of Puerto Rico as of 12/31/2011 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; credit cards include portfolio managed by FIA Card Services

Puerto Rico

Strong market share in loan portfolios

provides solid base for customer relationships

expansion and cross sell

Opportunities for ongoing market share gains

on selected products based on fair share of

assets

­

Largest opportunity on deposits and electronic

banking & transaction services

­

Selected loan products growth for balanced

risk/return to avoid risk concentration and

diversify income

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

15%

8%

17%

13%

19%

16%

9%

16%

12%

11%

6%

9%

6%

11%

11%

85%

92%

83%

87%

81%

84%

91%

84%

88%

89%

94%

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

12

Path to Profitability

De-risking

Balance Sheet

Achieve additional reduction of NPAs and classified assets

Increase OREO disposition efficiency

Ongoing key credit metrics improvement

Enhancing Franchise

Value

Re-energize loan production in key focus areas

Continue to execute core deposit strategic plan focused on increasing non-

interest bearing deposits, cash management and electronic services

Rebuild pre-tax pre-provision income

Execute process improvement projects

DTA valuation allowance of $368.9 million available to offset income tax effect on

future earnings

Strengthening 

Governance &

Risk Management

Manage emerging regulatory changes

Positioned for Profitability & Growth Post Capital Raise

-

Enhance loan pricing and optimize NIM through further reductions

in funding costs

-

Launch new products

-

Expand cross sell

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

Ongoing  expense management

Committed management team with proven execution skills

Attractive valuation on a pro-forma tangible book value basis

13

Exhibits

Exhibits

Investor Presentation

Investor Presentation

February 2012

February 2012

15

Stock Profile

Trading Symbol:

•

FBP

Exchange:

•

NYSE

Share

Price

•

$3.95

Shares Outstanding:

•

205,299,171

Market Capitalization

•

$811 million

1 Yr. Average Daily Volume:

•

146,837

Price                 

to Tangible

Book

•

0.60x

Beneficial Owner

Amount

Percent of

Class

Entities affiliated with Thomas H. Lee

Partners, L.P.

50,684,485

24.69%

Entities affiliated with Oaktree Capital

Management, L.P.

50,684,485

24.69%

Wellington Management Company, LLP.

20,220,300

9.85%

United States Department of the

Treasury

34,227,696

16.57%

5% or more Beneficial Ownership

(2/24/2012):

(2/24/2012)

(12/31/11):

(2/24/12):

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 $3.3 billion; it was reduced to

$2.1 billion in 2010, to $1 billion in 2011 and is projected at $610

million for fiscal year 2012,

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 / $1.4 billion investment

­

PPP for Modernization and New construction of Schools /

$756 millions investment

­

Others are currently in process –

PPP for Energy (Via Verde),

Puerto Rico Aqueduct and

Sewer Authority and Luis Muñoz

Marín International Airport

16

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

infrastructure projects to continue stimulating the economy

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 and COFINA

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

GDB -

Economic Activity Index

Puerto Rico GNP & Yearly

% Growth

2000 –

2010

2

3.0%

1.5%

0.3%

2.1%

2.7%

1.9%

0.5%

1.2%

2.9%

4.0%

3.8%

1.0%

5%

4%

3%

2%

1%

0%

1%

2%

3%

4%

5,600.0

5,800.0

6,000.0

6,200.0

6,400.0

6,600.0

6,800.0

7,000.0

7,200.0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Est.

2011

Est.

Real GNP

GNP Growth

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 3/24/2011. Years are from July 1 to June 30 of next year (fiscal year)

Economic Environment Continues to Stabilize

Virgin Islands

During September 2011, unemployment rate increased

0.2 points to 9.7% from 9.5 in August

691,844 visitors arrived in the 1Q11, representing a

growth of 11.3% over same period, last year. Cruise

visitors increased a 16.9% over last year’s first quarter,

but air visitors declined by 5.4%. 

During 1Q11, hotel occupancy rate decreased to 49.5%

from 53% same quarter, last year

Total building permit values were flat in 1Q11 with a slight 

decrease of 0.69%  compared to 1Q10

17

Florida

Number of homes sold increased 8% in 2011 compared to

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

December unemployment rate²

was 9.9%.  It reflects a 0.1

point decrease compared to November

Total number of tourist visitors for the 3Q11 decreased by

3.77%, when compared to 2Q11, reaching 20.4 million

Number of total residential building permits issued

increased 11% in 2011 versus 2010

US Virgin Island’s Unemployment Rate³

Florida single family

median home price¹

$-

$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

8.0%

7.9%

8.3%

8.1%

8.5%

9.4%

9.2%

9.7%

8.7%

8.8%

9.0%

9.5%

8.5%

9.6%

10.4%

11.0%

10.4%

10.6%

7.5%

7.3%

7.1%

8.3%

7.6%

8.1%

8.6%

4.0%

12.0%

Jan-10

Mar-10

May-10

Jul-10

Sep-10

Nov-10

Jan-11

Mar-11

May-11

Jul-11

Sep-11

Territory

St. Croix

St. Thomas/ St. John

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

18

Non-performing Assets

($ in millions)

1 Collateral pledged with Lehman Brothers Special Financing, Inc.

12/31/2011

3/31/2010

% change

Non-performing loans held for investment

Residential mortgage

338

$               

447

$               

-24%

Commercial mortgage

240

230

4%

Commercial & Industrial

270

228

18%

Construction

250

685

-64%

Consumer Loans & Finance Leases

40

49

-19%

Total non-performing loans held for investment

               1,138

               1,639

-31%

REO

114

73

56%

Other repossessed property

15

12

23%

Other assets¹

65

65

0%

Total non-performing assets, excluding loans held for sale

               1,333

               1,790

-26%

Non-performing loans held for sale

5

-

-

Total non-performing assets, including loans held for sale

$            1,337

$            1,790

-25%

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, inaccordance 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 $13 million of the Corporation's deferred tax assets at December 31, 2011 was included without limitation in regulatory capital pursuant to the risk-based capital guidelines. 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 $8 million of the Corporation's

other net deferred tax liability at December 31, 2011 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.

19

Tangible Common Equity Ratio Reconciliation

($ in millions)

12/31/2011

12/31/2011

Total equity -

GAAP

$               1,444

Total equity -

GAAP

$               1,444

Preferred equity

(63)

Qualifying preferred stock

(63)

Goodwill

(28)

Unrealized gain on available-for-sale securities

1

(19)

Core deposit intangible

(12)

Disallowed deferred tax asset

2

-

Tangible common equity

$               1,341

Goodwill

(28)

Core deposit intangible

(12)

Total assets -

GAAP

$            13,127

Cummulative change gain in fair value of liabilities

accounted for under a fair value option

(2)

Goodwill

(28)

Other disallowed assets

(1)

Core deposit intangible

(12)

Tier 1 common equity

$               1,319

$            13,087

Total risk-weighted assets

$            10,182

205,134

Tier 1 common equity to risk-weighted assets ratio

12.96%

10.25%

$                  6.54

Tangible book value per common

Tangible equity:

Tangible assets:

Tangible assets

Common shares outstanding

Tangible common equity ratio

20

Adjusted Pre-tax, Pre-provision Income Reconciliation

($ in thousands)

12/31/2011

9/30/2011

6/30/2011

3/31/2011

12/31/2010

9/30/2010

6/30/2010

3/31/2010

Loss before income taxes

(14,600)

$      

(21,158)

$      

(12,318)

$      

(24,834)

$      

(158,016)

$    

(76,196)

$      

(86,817)

$      

(100,138)

$    

Add: Provision for loan and lease losses

41,987

46,446

59,184

88,732

196,347

120,482

146,793

170,965

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

securities

1,014

(12,156)

(21,342)

(19,341)

620

(48,281)

(24,237)

(30,764)

Less: Gain on sale of FirstBank Insurance VI

-

-

-

(2,845)

-

-

-

-

Add: Unrealized loss (gain) on derivatives instruments

and liabilities measured at fair value

1,746

2,555

1,162

253

(90)

1,464

(3,409)

1,733

Add:  Loss on early extinguishment of repurchase

agreement

-

9,012

1,823

-

-

47,405

-

-

Add: Equity in losses (gains) of unconsolidated entities

(1,666)

4,357

1,536

-

Adjusted Pre-tax, pre-provision income

28,481

$        

29,056

$        

30,045

$        

41,965

$        

38,861

$        

44,874

$        

32,330

$        

41,796

$        

Quarter Ended

21

Reconciliation of the (Loss) Earnings per Common Share

($ in thousands, except per share information)

1 Includes a non-cash adjustments of $0.2 million for the quarter ended June 30, 2011 and of $11.3 million for the quarter ended December 31, 2010 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.

3 Excess of carrying amount of Series A through E preferred stock exchanged over the fair value of new common shares issued in the third quarter of 2010.

4 Excess of carrying amount of Series F preferred stock exchanged and original warrant over the fair value of Series G preferred stock issued in the third quarter of 2010 and amended warrant.

5 All share and per share data have been adjusted to retroactively reflect the 1-for-15 reverse stock split effected January 7, 2011.

6 For the quarter ended December 31, 2011, the diluted (loss) per share, excluding the one-time favorable impact of $278.0 million from issuing common stock in exchange for the Series G Preferred

Stock, held by the U.S. Treasury, was $(0.08).

7 For the quarter ended December 31, 2010, the diluted (loss) per share, excluding the $102.9 million charge associated with loans transferred to held for sale was $(7.84). 

4Q 2011

3Q 2011

2Q 2011

1Q 2011

4Q 2010

3Q 2010

2Q 2010

1Q 2010

Net loss

(14,842)

$     

(24,046)

$     

(14,924)

$     

(28,420)

$     

(251,436)

$  

(75,233)

$     

(90,640)

$     

(106,999)

$  

Cumulative non-convertible preferred stock dividends (Series F)

-

-

-

-

-

(1,618)

(5,000)

(5,000)

Cumulative convertible preferred stock dividend (Series G)

(997)

(5,302)

(5,302)

(5,302)

(5,302)

(4,183)

-

-

Preferred

stock

discount

accretion

(Series

G

and

F)

1

(145)

(1,795)

(1,979)

(1,716)

(13,133)

(1,688)

(1,170)

(1,152)

Favorable impact from issuing common stock in exchange for

Series

G

preferred

stock,

net

of

issuance

costs

2

277,995

-

-

-

-

-

-

-

Favorable impact from issuing common stock in exchange for

Series

A

through

E

preferred

stock

net

of

issuance

costs

3

-

-

-

-

-

385,387

-

-

Favorable impact from issuing Series G mandatorily convertible

preferred

stock

in

exchange

for

Series

F

preferred

stock

4

-

-

-

-

-

55,122

-

-

Net

(loss)

income

attributable

to

common

stockholders

-

basic

262,011

$    

(31,143)

$     

(22,205)

$     

(35,438)

$     

(269,871)

$  

357,787

$    

(96,810)

$     

(113,151)

$  

Convertible preferred stock dividends and accretion

1,142

-

-

-

-

5,626

-

-

Net

(loss)

income

attributable

to

common

stockholders

-

diluted

263,153

$    

(31,143)

$     

(22,205)

$     

(35,438)

$     

(269,871)

$  

363,413

$    

(96,810)

$     

(113,151)

$  

Average

common

shares

outstanding

5

192,546

21,303

21,303

21,303

21,303

11,432

6,168

6,168

Average

potential

common

shares

5

2,195

-

-

-

-

75,119

-

-

Average

common shares

outstanding

-

assuming

dilution

5

194,741

21,303

21,303

21,303

21,303

86,551

6,168

6,168

Basic

(loss)

earnings

per

common

share

5

1.36

$           

(1.46)

$         

(1.04)

$         

(1.66)

$         

(12.67)

$       

31.30

$        

(15.70)

$       

(18.34)

$       

Diluted

(loss)

earnings

per

common

share

5

1.35

$           

6

(1.46)

$         

(1.04)

$         

(1.66)

$         

(12.67)

$       

7

4.20

$           

(15.70)

$       

(18.34)

$