Summary of FIRST BANCORP /PR/

Results of Operations and Financial Condition, Financial Statements and Exhibi

Item 2.02 Results of Operations and Financial Condition
On April 27, 2009, First BanCorp. (the "Corporation") issued a press release announcing its unaudited results of operations for the first quarter ended March 31, 2009. A copy of the press release is attached hereto as Exhibit 99.1 and is hereby incorporated herein by reference.
The Corporation has included in this release the following non-GAAP financial measure: (i) the calculation of net interest income, interest rate spread and net interest margin rate on a tax equivalent basis and excluding the unrealized changes in the fair value of derivative instruments and certain financial liabilities (mainly changes in the fair value of interest rate swaps and certain brokered certificates of deposit), and (ii) the calculation of the tangible common equity ratio and the tangible book value per common share. Investors should be aware that non-GAAP measures have inherent limitations and should be read only in conjunction with the Corporation's consolidated financial data prepared in accordance with GAAP.
Net interest income, interest rate spread and net interest margin are reported on a tax equivalent basis and excluding the unrealized changes in the fair value of derivative instruments and financial liabilities elected to be measured at fair value under Statement of Financial Accounting Standard No. ("SFAS") 159 ("SFAS 159 liabilities"). The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a marginal income tax rate, as described in Exhibit A - Table 2 of the attached Press Release (included herein as Exhibit 99.1). Management believes that it is a standard practice in the banking industry to present net interest income, interest rate spread and net interest margin on a fully tax equivalent basis. Therefore, management believes these measures provide useful information to investors by allowing them to make peer comparisons. The following table reconciles the non-GAAP financial measure "net interest income on a tax-equivalent basis and excluding fair value changes" with net interest income calculated and presented in accordance with GAAP. The table also reconciles the non-GAAP financial measures "net interest spread and margin on a tax-equivalent basis and excluding fair value changes" with net interest spread and margin calculated and presented in accordance with GAAP.

Reconciliation of GAAP Net Interest Margin and Spread to Non-GAAP Net Interest Margin and Spread on a Tax-Equivalent Basis and excluding fair value changes on derivative instruments and SFAS 159 liabilities ("valuations")
(dollars in thousands)

                                                                                  Quarters Ended
                                                         March 31, 2009          December 31, 2008          March 31, 2008

Interest Income                                         $        258,323        $           282,910        $        279,087
Unrealized (gains) and losses on derivative
instruments                                                         (775 )                    7,383                   4,723

Interest Income - excluding valuations                           257,548                    290,293                 283,810
Tax Equivalent Adjustment                                         14,448                     15,706                   9,082

Interest Income - Tax Equivalent                                 271,996                    305,999                 292,892

Interest Expense                                                 136,725                    158,714                 154,629
Unrealized gains on derivative instruments and
SFAS 159 liabilities                                               2,860                      2,122                   6,989

Interest Expense - excluding valuations                          139,585                    160,836                 161,618


Net Interest Income                                     $        121,598        $           124,196        $        124,458


Net Interest Income - excluding valuations              $        117,963        $           129,457        $        122,192


Net Interest Income - Tax Equivalent and excluding
valuations                                              $        132,411        $           145,163        $        131,274


Average Interest-Earning Assets                         $     18,830,013        $        18,853,837        $     17,078,129

Average Interest-Bearing Liabilities                    $     16,684,497        $        17,056,777        $     15,244,132

Average rate on interest-earning assets                             5.56 %                     5.97 %                  6.57 %
Average rate on interest-earning assets -
excluding valuations                                                5.55 %                     6.13 %                  6.68 %
Average rate on interest-earning assets - Tax
Equivalent and excluding valuations                                 5.86 %                     6.46 %                  6.90 %

Average rate on interest-bearing liabilities                        3.32 %                     3.70 %                  4.08 %
Average rate on interest-bearing liabilities -
excluding valuations                                                3.39 %                     3.75 %                  4.26 %

Net Interest Spread                                                 2.24 %                     2.27 %                  2.49 %
Net Interest Spread - excluding valuations                          2.16 %                     2.38 %                  2.42 %
Net Interest Spread - Tax Equivalent and excluding
valuations                                                          2.47 %                     2.71 %                  2.64 %

Net Interest Margin                                                 2.62 %                     2.62 %                  2.93 %
Net Interest Margin - excluding valuations                          2.54 %                     2.73 %                  2.88 %
Net Interest Margin - Tax Equivalent and excluding
valuations                                                          2.85 %                     3.06 %                  3.09 %

The tangible common equity ratio and the tangible book value per common share are non-GAAP measures generally used by financial analysts and investment bankers to evaluate capital adequacy. Tangible common equity is total equity less preferred equity, goodwill and core deposit intangibles. Tangible Assets are total assets less goodwill and core deposit intangibles. Management and many stock analysts use the tangible common equity ratio and the 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 accounting method accounting for mergers and acquisitions. Neither tangible common equity nor tangible assets or related measures should be considered in isolation or as a substitute for stockholders' equity, total assets or any other measure calculated in accordance with GAAP. Moreover, the manner in which the Corporation calculates its tangible common equity, tangible assets and any other related measures may differ from that of other companies reporting measures with similar names. The following table is a reconciliation of the Corporation's tangible common equity and tangible assets for the periods ended March 31, 2009, December 31, 2008 and March 31, 2008, respectively.

                                                         March 31,          December 31,          March 31,
(In thousands)                                              2009                2008                 2008

Total equity per consolidated financial statements      $  1,977,240        $   1,548,117        $  1,450,258
Preferred equity                                            (925,162 )           (550,100 )          (550,100 )
Goodwill                                                     (28,098 )            (28,098 )           (28,098 )
Core deposit intangible                                      (19,273 )            (23,985 )           (27,543 )


Tangible common equity                                  $  1,004,707        $     945,934        $    844,517

Total assets per consolidated financial statements      $ 19,709,150        $  19,491,268        $ 18,149,029
Goodwill                                                     (28,098 )            (28,098 )           (28,098 )
Core deposit intangible                                      (19,273 )            (23,985 )           (27,543 )


Tangible assets                                         $ 19,661,779        $  19,439,185        $ 18,093,388
Common shares outstanding                                     92,546               92,546              92,504

Tangible common equity ratio                                    5.11 %               4.87 %              4.67 %
Tangible book value per common share                    $      10.86        $       10.22        $       9.13