1.

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

2.

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 and the insurance
customer relationship intangible. Tangible assets are
total assets less goodwill, core deposit intangibles, and
other intangibles, such as the purchased credit card
relationship intangible and the insurance customer
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.
Accordingly, the Corporation believes that disclosures of
these financial measures may be useful also to investors.
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.

3.

Adjusted pre-tax, pre-provision income is a non-GAAP
performance metric that management uses and believes that
investors may find useful in analyzing underlying
performance trends, particularly in times of economic
stress. Adjusted pre-tax, pre-provision income, as
defined by management, represents income before income
taxes excluding the provision for loan and lease losses,
as well as certain items that management believes are not
reflective of core operating performance, are not
expected to reoccur with any regularity or may reoccur at
uncertain times and in uncertain amounts.

4.

Adjusted provision for loan and lease losses, adjusted
net charge-offs, adjusted net charge-offs to average
loans ratios, and adjusted provision for loan and lease
losses to net charge-offs ratios are non-GAAP financial
measures that excludes the effects related to the sale of
the Corporations participation in the Puerto Rico
Electric Power Authority (PREPA) line of credit in the
first quarter of 2017 with a book value of $64 million at
the time of sale and the sale of a $16.3 million pool of
non-performing assets in the fourth quarter of 2016.
Management believes this information helps investors
understand the effect of items that are not expected to
reoccur with any regularity or may reoccur at uncertain
times and in uncertain amounts on reported results and
facilitate comparisons with prior periods.

5.

Adjusted non-interest income that excludes the effect of
other-than-temporary impairment (OTTI) charges on debt
securities in the first quarter of 2017 and first quarter
of 2016, the effect of a gain from a recovery of a
residual collateralized mortgage obligation (CMO)
previously written off recorded in the fourth quarter of
2016, the effect of brokerage and insurance commissions
from the sale of large fixed annuities contracts in the
fourth quarter of 2016, the effect of a gain on the
repurchase and cancellation of trust preferred securities
in the first quarter of 2016, and the effect of a gain on
sale of a U.S. Treasury bill in the first quarter of
2016. Management believes this information helps
investors understand the effect of items that are not
expected to reoccur with any regularity or may reoccur at
uncertain times and in uncertain amounts on reported
results, facilitates comparisons with prior periods, and
provides an alternate presentation of the Corporations
performance.

6.

Adjusted non-interest expenses that exclude the effect of
costs associated with secondary offerings of the
Corporations common stock by certain of the existing
stockholders in the first quarter of 2017 and fourth
quarter of 2016, an adjustment recorded in the fourth
quarter of 2016 to reduce the credit card rewards
liability due to unusually large customer forfeitures
related to the expiration of reward points earned by
customers up to September 2013 (the conversion date of
the credit card portfolio acquired from FIA in May 2012),
and the effect of incentive costs related to the sale of
large fixed annuities contracts in the fourth quarter of
2016. Management believes this information helps
investors understand the effect of adjustments that are
above normal or recurring levels, are not expected to
reoccur with any regularity or may reoccur at uncertain
times and in uncertain amounts on reported results,
facilitate comparisons with prior periods, and provides
an alternate presentation of the Corporations
performance.

7.

Adjusted net income that excludes the effect of a tax
benefit recorded in the first quarter of 2017 related to
the change in tax status of certain subsidiaries from
taxable corporations to limited liability companies, and
the effect of all the items mentioned above and their tax
related impacts. Management believes this information
helps investors understand the effect of items that are
not reflective of core operating performance, are not
expected to reoccur with any regularity or may reoccur at
uncertain times and in uncertain amounts on reported
results, facilitate comparisons with prior periods, and
provides an alternate presentation of the Corporations
performance.

99.1

Press Release dated April 25, 2017 – First BanCorp
Announces Earnings for the quarter ended March 31, 2017

9.2

First BanCorp Conference Call Presentation Financial
Results for the first quarter ended March 31, 2017

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