First BanCorp. (FBP) 8-K First Bancorp. Announces Earnings

Financial Results

3Q 2015

Exhibit 99.2

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,

2013

for

a

discussion

of

such

factors

and

certain

risks

and

uncertainties

to

which

the

Corporation

is

subject.

Forward-Looking Statements

Agenda

Third Quarter 2015 Highlights

Aurelio Alemán, President & Chief Executive Officer

Third Quarter 2015 Results of Operations

Orlando Berges, Executive Vice President & Chief Financial Officer

Questions & Answers

3

Key Highlights

4

Third Quarter Results

5

Profitability

Net income of $14.8 million, or $0.07 per diluted share.

Pre-tax income for 3Q 2015 was $19.2 million compared to adjusted pre-tax income of $20.2 million

for 2Q 2015, excluding the bulk sale, OTTI adjustments and some interim servicing costs from the

Doral transaction.

During 3Q 2015 net interest margin increased 1 basis point to 4.19%.

Adjusted pre-tax, pre-provision income of $50.5 million, compared to $47.7 million for 2Q 2015.

Asset

Quality

Total NPAs declined by $27.3 million, or 4%; NPAs/assets 4.81% as of September 30, 2015.

Inflows to nonperforming of $50.8 million compared to $44.9 million in 2Q 2015.

Provision for loan and lease losses of $31.2 million.  Excluding the 2Q 2015 charge related to the bulk

sale, the provision increased $3.9  million.

Core

Deposits

Deposits, net of government and brokered, increased by $26.4 million to $6.7 billion.

Total cost of deposits, net of brokered, remained at 0.61%.

Brokered certificates of deposit (CDs) decreased by $62.7 million in 3Q 2015.

Capital

3Q 2015 capital position:

–

Total Risk Based Capital Ratio of 19.7%;

–

Tier 1 Ratio Risk Based Capital Ratio of 16.6%; and

–

Leverage Ratio of 12.4%.

Book value per common share of $7.74 compared to $7.60 in 2Q 2015.

Tangible book value per common share of $7.50 compared to $7.35 in 2Q 2015.

Third Quarter 2015 Highlights

6

Loan Originations* ($ millions)

Loan Portfolio ($ millions)

2,820

3,011

3,332

3,328

3,330

2,027

1,983

1,937

1,899

1,862

142

123

124

121

164

4,327

4,145

4,092

3,870

3,946

80

77

82

80

35

3Q 2014

4Q 2014

1Q 2015

2Q 2015

3Q 2015

$9,396

$9,339

$9,567

169

154

153

197

179

245

235

221

235

234

7

12

9

14

4

496

490

398

420

394

3Q 2014

4Q 2014

1Q 2015

2Q 2015

3Q 2015

$917

$891

$777

Residential Mortgage

Consumer & Finance Leases

Construction

Commercial

Loans HFS

Growth in commercial portfolio supported by Florida and

the Eastern Caribbean.

–

Florida and the Eastern Caribbean contributed

approximately $100 million in commercial origination

volume in 3Q 2015.

Focus remains on growth opportunities within our markets.

Origination and renewal activity continues to

sustain our loan portfolio levels.

Increased distribution channels are supporting our

origination volume.

The commercial new business pipelines for Puerto

Rico remains stable while Florida is improving.

Despite a challenging market environment, we continue to achieve results through our regional diversification:

* Including refinancing and draws from existing revolving and non-revolving commitments.

Third

Quarter

2015

Highlights:

LOAN

PORTFOLIO

$9,298

$866

$9,337

$854

7

Total Deposit Composition (%)

Core Deposits* ($ millions)

2,814

2,841

3,203

3,139

3,079

1,246

1,263

1,390

1,346

1,438

2,111

2,092

2,225

2,194

2,189

469

401

451

495

743

3Q 2014

4Q 2014

1Q 2015

2Q 2015

3Q 2015

* Core deposits are total deposits excluding brokered CDs.

$6,640

$6,597

$7,269

Interest

Bearing

63%

Non-

Interest

Bearing

14%

Brokered

CDs

23%

Non-brokered deposits, excluding government deposits, increased $26.4 million in 3Q 2015 and $509 million YTD 2015.

Total cost of deposits, net of brokered, remained at 0.61%.

Government deposits increased $248.2 million in 3Q 2015, a significant portion of this increase is considered temporary.

Continue to reduce reliance on brokered deposits which declined $62.7 million compared to 2Q 2015 and $619 million YTD

2015.

Core deposits stable; continue reducing reliance on brokered deposits

Third

Quarter

2015

Highlights:

DEPOSIT

MIX

Retail

Commercial

CDs & IRAs

Public Funds

$7,174

$7,449

8

Third

Quarter

2015

Highlights:

PR

GOVERNMENT

EXPOSURE

Total outstanding exposure to the Puerto

Rico Government was $402 million with a

book value of $371 million as of

September 30, 2015, down from $378

million as of June 30, 2015.

—

Investment portfolio outstanding principal of

$65.6 million, being carried on books at

$34.1 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 $130 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 an

adverse impact to asset quality metrics.

—

Government tax revenues generated on

these projects continue to substantially

exceed payments made by the TDF.

Total Government Deposits as of

September 30, 2015 were $524.5 million.

($ in millions)

Government Unit

Time Deposits

Transaction

Accounts

Total

Municipalities

19.1

$           

138.1

$         

157.2

$        

Municipal Agency

-

183.5

183.5

Public Agencies

30.7

151.6

182.3

Public Corporations

-

1.5

1.5

  Total Deposits

49.8

$          

474.7

$       

524.5

$      

Investment Portfolio

52.7

$      

Central Government:

21.0

$      

2 loans

14.0

7.0

Public Corporations:

97.9

$      

3 loans

72.6

CRE -

Operating Revenues

21.5

3.8

Municipalities:

199.5

$    

10 loans

199.5

Total Direct Government Exposure

371.1

$   

Property Tax Revenues

Commonwealth Appropriations

CRE & Commonwealth Appropriations

PREPA Fuel Line

Rental Income

Government Unit

Source of Repayment

Total

Outstanding

9

Results of Operations

Third Quarter Results

10

Results

of

Operations:

THIRD

QUARTER

FINANCIAL

HIGHLIGHTS

($ in thousands, except per share data)

Select Financial Information

3Q 2015

2Q 2015

Variance

3Q 2014

Interest income

149,812

$    

151,632

$    

(1,820)

$      

156,662

$    

Interest expense

24,883

25,155

(272)

28,968

Net interest income

124,929

126,477

(1,548)

127,694

Provision for loan and lease losses

31,176

74,266

(43,090)

26,999

Non-interest income

18,989

19,767

(778)

16,419

Loss on investments & impairments

(231)

(13,097)

12,866

(245)

Bargain purchase gain

-

-

-

-

Total non-interest income

18,758

6,670

12,088

16,174

Personnel expense

37,284

37,841

(557)

33,877

Occupancy and equipment expense

15,248

15,059

189

14,727

Insurance and supervisory fees

6,590

6,796

(206)

9,493

REO expense

4,345

4,874

(529)

4,326

Other operating expenses

29,810

38,229

(8,419)

31,181

Total non-interest expense

93,277

102,799

(9,522)

93,604

Pre-tax income (loss)

19,234

(43,918)

63,152

23,265

Income tax (expense) benefit

(4,476)

9,844

(14,320)

(64)

Net income (loss)

14,758

$    

(34,074)

$   

48,832

$    

23,201

$    

Select Financial Information

Adjusted Pre-tax, pre-provision income

50,497

$      

47,727

$      

2,770

$       

50,750

$      

Fully diluted EPS

0.07

$         

(0.16)

$        

0.23

$         

0.11

$         

Book value per share

7.74

$         

7.60

$         

0.14

$         

6.05

$         

Tangible book value per share

7.50

$         

7.35

$         

0.15

$         

5.81

$         

Common stock price

3.56

$         

4.82

$         

(1.26)

$       

4.75

$         

Net Interest Margin (GAAP)

4.19%

4.18%

0.01%

4.14%

Efficiency ratio

64.9%

77.2%

(12.3%)

65.1%

11

Key Highlights

Net Interest Income ($ millions)

$127.7

$129.2

$125.6

$126.5

$124.9

4.14%

4.18%

4.18%

4.18%

4.19%

3Q 2014

4Q 2014

1Q 2015

2Q 2015

3Q 2015

  Net Interest Income ($)

  Net Interest Margin (GAAP %)

Net interest income decreased $1.6 million in

3Q 2015. This decrease was mainly due to:

o

A $0.8 million decrease in interest income on

commercial and construction loans;

o

A $0.5 million decline in interest income on

consumer loans (primarily auto) driven by lower

volumes;

o

A $0.3 million decrease in interest income on

securities due to lower volume; and

o

A $0.3 million decrease in interest income on

residential mortgage loans.

This decrease was partially offset by:

o

A $0.3 million decrease in interest expense

primarily driven by the full quarter impact of

interest income earned on a reverse repurchase

agreement entered into in mid-April 2015.

GAAP NIM increased 1 basis point to 4.19%.

Results

of

Operations:

NET

INTEREST

INCOME

12

Key Highlights

Cost of Deposits (%)

0.83%

0.81%

0.77%

0.73%

0.74%

0.72%

0.70%

0.66%

0.61%

0.61%

0.50%

0.60%

0.70%

0.80%

0.90%

3Q 2014

4Q 2014

1Q 2015

2Q 2015

3Q 2015

  Interest Bearing Deposits (%)

  Total Deposits (%)

Cost of total deposits, excluding brokered

CDs, remained flat at 0.61%.

The average rate paid on non-brokered

interest-bearing deposits increased by 1

basis point to 0.74% during the third quarter.

Brokered CDs declined by $62.7 million

during 3Q 2015.

Results

of

Operations:

COST

OF

FUNDS

13

Key Highlights

Non-Interest Income* ($ millions)

* 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 in 2Q 2015,

adjusted non-interest income decreased $1.3

million, due to:

o

A $0.5 million decrease in revenues on

mortgage banking;

o

A $0.3 million decrease in insurance

commissions; and

o

A $0.3 million decline due to a gain on

the exchange of trust preferred securities

in 2Q 2015.

$16.2

$17.9

$19.3

Results

of

Operations:

NON-INTEREST

INCOME

$20.1

$18.8

14

Results

of

Operations:

OPERATING

EXPENSES

Non-interest expenses decreased by $9.5 million in

3Q 2015 to $93.3 million. 2Q 2015 expenses

included:

-

$2.6 million acquisition and conversion costs

related to the Doral transaction; and

-

$1.2 million of expenses and losses directly

associated with the bulk sale transaction.

Excluding these items, non-interest expense

declined $5.8 million due to:

-

A $1.8 million decrease in credit related expenses

due to lower legal, appraisal and OREO operating

expenses;

-

A $0.6 million decrease in adjusted employees’

compensation and benefit expenses mainly due to a

decrease in payroll taxes and incentive

compensation;

-

$1.3 million in consulting and legal fees during 2Q

for special projects as well as strategic, stress

testing, and capital planning; and

-

$1.6 million of excess interim servicing costs in 2Q

2015 on Doral accounts over internal processing

costs

This reduction was partially offset by higher

business promotion expenses and credit &

debit card processing related to post-

conversion costs on accounts acquired from

Doral.

($ in millions)

3Q 2015

2Q 2015

% Change

Credit related expenses

6.6

$      

8.4

$      

-21%

Compensation & benefits

37.3

37.8

-1%

Occupancy & equipment

15.2

15.1

1%

Credit & debit card processing expenses

4.3

3.9

9%

Taxes other than income

3.1

3.1

-2%

Deposit insurance prem & supervisory

6.6

6.8

-3%

Other professional fees

3.9

6.0

-35%

Excess interim servicing costs - Doral

-

1.6

Business promotion

4.1

3.7

12%

All other expenses

12.2

12.7

-4%

Non-GAAP operating expenses

93.3

$   

99.1

$   

-6%

Doral acquisition & conversion

-

2.6

Bulk sale of assets & related loss on OREO

-

1.2

  Total operating expenses, as reported

93.3

$   

102.8

$ 

-9%

15

Non-Performing Assets ($ millions)

$1,790

$754

-

66%

Total non-performing loans, including non-performing loans held for

sale, decreased by $30.9 million, or 6%.

NPAs declined $27.3 million in 3Q 2015.

New non-performing loan inflows amounted to $50.8 million compared

to inflows of $44.9 million in 2Q 2015. 

NPAs decreased by $27.3 million to $617 million or 4.8% of assets:

Results

of

Operations:

ASSET

QUALITY

Q-o-Q Change in NPAs

Migration Trend ($ millions)

$644

$617

Loan

3Q

2Q

$

%

Portfolio

2015

2015

Change

Change

Residential

$175

$175

($0)

(0%)

Consumer

$31

$33

($2)

(6%)

C&I and CRE

$211

$239

($28)

(12%)

Construction

$56

$16

$40

247%

Loans HFS

$8

$48

($40)

(83%)

Total NPLs

$481

$512

($31)

(6%)

REO & Repo

$137

$133

$4

3%

Total NPAs

$617

$644

($27)

(4%)

Loan

3Q

2Q

$

%

Portfolio

2015

2015

Change

Change

Residential

$27

$25

$2

9%

Consumer

$13

$13

($0)

(0%)

$10

$7

$4

53%

$51

$45

$6

13%

Commercial &

Construction

Total   

Migration

16

Key Highlights

Net Charge-Offs ($ millions)

6

7

5

3

5

18

19

16

11

14

15

2

8

62

5

3

2

3Q 2014

4Q 2014

1Q 2015

2Q 2015

3Q 2015

  Residential

  Consumer

  Commercial

  Construction

Total net charge-offs for 3Q 2015 were $24 million, or

1.02% of average loans, compared to $79 million in 2Q

2015. Excluding the impact of charge-offs related to the

bulk sale ($61.4 million), total net charge-offs were $6.4

million higher in 3Q 2015.

Allowance coverage ratio of 2.46% as of September 30,

2015 compared to 2.40% as of June 30, 2015. 

The ratio of the allowance to NPLs held for investment

was 48.44% as of September 30, 2015 compared to

47.79% as of June

30, 2015.     

$43

$27

$29

Commercial NPLs (Includes HFS)

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

Results

of

Operations:

NET

CHARGE-OFFS

$79

$24

Product

Book Value

Accum.

Charge-offs

Reserves

Net

Carrying

Amount

*

C&I

$141.9

$33.4

$16.3

71.6%

Const.

63.8

89.6

2.1

40.2%

CRE

69.2

21.8

5.4

70.1%

Total

$274.8

$144.8

$23.9

59.8%

17

Results of Operations: CAPITAL

POSITION

Total stockholders’ equity amounted to $1.7 billion as of September 30, 2015, an increase of $32.7

million from June 30, 2015, mainly driven by net income of $14.8 million and an increase of $16.7

million in other comprehensive income due to the fair value of U.S. agency MBS and U.S. agency

debt obligations.

Capital Ratios (%)

18

Third Quarter Results

Q & A

19

Third Quarter Results

Exhibits

20

Results

of

Operations:

KEY

MARGIN

DRIVERS

Q3  vs. Q2 Change in Average Interest Earning Assets & Interest Bearing Liabilities

* On a tax equivalent basis and excluding valuations

$

in

%

in

Average

Average

Volume

Rate

Average total investments

(174,829)

$       

0.06%

(315)

$       

Average loans & leases:

Residential mortgage loans

(4,751)

(0.09%)

(321)

Construction loans

67

0.14%

79

C&I and commercial mortgage loans

(108,879)

(0.05%)

(1,214)

Finance leases

(837)

0.07%

75

Consumer loans

(35,273)

(0.02%)

(540)

Total average loans

(149,673)

(0.05%)

(1,921)

Average total interest-earning assets

(324,502)

0.01%

(2,236)

Interest-bearing liabilities:

Brokered CDs

(157,628)

0.04%

96

Other interest-bearing deposits

(152,153)

0.01%

33

Other borrowed funds

(44,702)

0.04%

154

Average total interest-bearing liabilities

(354,483)

0.02%

272

Increase (decrease) in net interest income *

(1,964)

$   

Net Interest

Income

Changes

21

NPLS

HELD

FOR

INVESTMENT

-

MIGRATION

Residential

Mortgage

Commercial

Mortgage

Commercial &

Industrial

Construction

Consumer

Total

Beginning balance

175,035

$     

95,088

$       

143,935

$     

16,118

$       

33,397

$       

463,573

$     

    Plus:

         Additions to non-performing

27,392

4,530

5,756

57

13,055

50,790

    Less:

        Non-performing loans transferred to OREO

(10,833)

(866)

(2,531)

(102)

-

(14,332)

        Non-performing loans charged-off

(2,790)

(3,522)

(805)

(70)

(11,759)

(18,946)

        Loans returned to accrual status / collections

(14,249)

(26,123)

(4,324)

(37)

(3,418)

(48,151)

        Transfer from Loans Held for Sale

-

-

-

40,005

-

40,005

        Non-performing loans sold

-

(128)

(176)

-

-

(304)

Ending balance

174,555

$     

68,979

$       

141,855

$     

55,971

$       

31,275

$       

472,635

$     

Residential

Mortgage

Commercial

Mortgage

Commercial &

Industrial

Construction

Consumer

Total

Beginning balance

172,583

$     

142,385

$     

186,500

$     

27,163

$       

34,913

$       

563,544

$     

    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

$       

33,397

$       

463,573

$     

June 30, 2015

September 30, 2015

22

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.

23

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.