10-Q

 

  UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

______________

FORM 10-Q

(Mark One)

[X]         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2015

[   ]         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from ______ to _______

COMMISSION FILE NUMBER 001-14793

First BanCorp.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Puerto Rico	66-0561882
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification number)
1519 Ponce de León Avenue, Stop 23 Santurce, Puerto Rico (Address of principal executive offices)	00908 (Zip Code)
(787) 729-8200
(Registrant’s telephone number, including area code)
Not applicable (Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ    Noo 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). 

Yes þ   Noo 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filerþ
Non-accelerated filer o  (Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes  o  No  þ 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common stock:  213,810,782 shares outstanding as of April 30, 2015.

FIRST BANCORP.

INDEX PAGE

PART I. FINANCIAL INFORMATION	PAGE
Item 1. Financial Statements:
Consolidated Statements of Financial Condition (Unaudited) as of March 31, 2015 and December 31, 2014	5
Consolidated Statements of  Income  (Unaudited) – Quarters ended March 31, 2015 and March 31, 2014	6
Consolidated Statements of Comprehensive Income (Unaudited) – Quarters ended March 31, 2015 and March 31, 2014	7
Consolidated Statements of Cash Flows (Unaudited) – Quarters ended March 31, 2015 and March 31, 2014	8
Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) – Quarters ended March 31, 2015 and March 31, 2014	9
Notes to Consolidated Financial Statements (Unaudited)	10
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations	72
Item 3. Quantitative and Qualitative Disclosures About Market Risk	122
Item 4. Controls and Procedures	122
PART II. OTHER INFORMATION
Item 1.    Legal Proceedings	123
Item 1A. Risk Factors	123
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds	123
Item 3.    Defaults Upon Senior Securities	123
Item 4.    Mine Safety Disclosures	123
Item 5.    Other Information	123
Item 6.    Exhibits	124
SIGNATURES

2

Forward Looking Statements

This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),which are subject to the safe harbor created by such sections.  When used in this Form 10-Q or future filings by First BanCorp. (the “Corporation”) with the U.S. Securities and Exchange Commission (“SEC”), in the Corporation’s press releases or in other public or stockholder communications, or in oral statements made with the approval of an authorized executive officer, the word or phrases “would be,” “will allow,” “intends to,” “will likely result,” “are expected to,” “should,” “anticipate” and other terms of similar meaning or import in connection with any discussion of future operating, financial or other performance are meant to identify “forward-looking statements.”

First BanCorp. 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 (the “Written Agreement”) that the Corporation entered into with the Federal Reserve Bank of New York (the “New York FED” or “Federal Reserve”) that, among other things, requires the Corporation to serve as a source of strength to FirstBank Puerto Rico (“FirstBank” or “the Bank”) 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 retail brokered certificates of deposit (“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 United States (“U.S.”), and the U.S. Virgin Islands (“USVI”), and British Virgin Islands (“BVI”), 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, and may once again have those effects;

3

·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 unrealized losses on the Puerto Rico government’s obligations;   

·uncertainty about regulatory and legislative changes for financial services companies in Puerto Rico, the U.S., the USVI and the BVI, 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, the USVI and the BVI;

·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 (the “Dodd-Frank 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, 2014, as well as “Part II, Item 1A, Risk Factors” in this quarterly report on Form 10-Q, for a discussion of such factors and certain risks and uncertainties to which the Corporation is subject.

4

FIRST BANCORP.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

	March 31, 2015		December 31, 2014
(In thousands, except for share information)
ASSETS
Cash and due from banks	$	767,471	$	779,147
Money market investments:
Time deposits with other financial institutions		300		300
Other short-term investments		216,665		16,661
Total money market investments		216,965		16,961
Investment securities available for sale, at fair value:
Securities pledged that can be repledged		1,001,725		1,025,966
Other investment securities		972,501		939,700
Total investment securities available for sale		1,974,226		1,965,666
Other equity securities		26,185		25,752
Loans, net of allowance for loan and lease losses of $226,064
(2014 - $222,395)		9,259,308		9,040,041
Loans held for sale, at lower of cost or market		81,723		76,956
Total loans, net		9,341,031		9,116,997
Premises and equipment, net		166,799		166,926
Other real estate owned		122,628		124,003
Accrued interest receivable on loans and investments		49,302		50,796
Other assets		483,312		481,587
Total assets	$	13,147,919	$	12,727,835
LIABILITIES
Non-interest-bearing deposits	$	1,175,943	$	900,616
Interest-bearing deposits		8,665,095		8,583,329
Total deposits		9,841,038		9,483,945
Securities sold under agreements to repurchase		900,000		900,000
Advances from the Federal Home Loan Bank (FHLB)		325,000		325,000
Other borrowings		231,959		231,959
Accounts payable and other liabilities		144,172		115,188
Total liabilities		11,442,169		11,056,092
STOCKHOLDERS' EQUITY
Preferred stock, authorized, 50,000,000 shares:
Non-cumulative Perpetual Monthly Income Preferred Stock:
issued  22,004,000 shares, outstanding 1,444,146 shares, aggregate
liquidation value of $36,104		36,104		36,104
Common stock, $0.10 par value, authorized, 2,000,000,000 shares;
issued, 214,618,015 shares (2014 - 213,724,749 shares issued)		21,462		21,372
Less: Treasury stock (at par value)		(79)		(74)
Common stock outstanding, 213,827,258 shares outstanding (2014 - 212,984,700
shares outstanding)		21,383		21,298
Additional paid-in capital		917,203		916,067
Retained earnings, includes legal surplus reserve of $40.0 million		742,271		716,625
Accumulated other comprehensive loss, net of tax of $7,752		(11,211)		(18,351)
Total stockholders' equity		1,705,750		1,671,743
Total liabilities and stockholders' equity	$	13,147,919	$	12,727,835
The accompanying notes are an integral part of these statements.

5

FIRST BANCORP.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Quarter Ended
	March 31, 2015		March 31, 2014
(In thousands, except per share information)
Interest and dividend income:
Loans	$	139,344	$	144,843
Investment securities		12,604		15,228
Money market investments		537		500
Total interest income	152,485		160,571
Interest expense:
Deposits		17,694		20,299
Securities sold under agreements to repurchase		6,393		6,368
Advances from FHLB		934		824
Notes payable and other borrowings		1,817		1,760
Total interest expense	26,838		29,251
Net interest income		125,647		131,320
Provision for loan and lease losses		32,970		31,915
Net interest income after provision for loan and lease losses	92,677		99,405
Non-interest income:
Service charges and fees on deposit accounts		4,555		4,127
Mortgage banking activities		3,618		3,368
Other-than-temporary impairment losses on available-for-sale debt securities:
Total other-than-temporary impairment losses		-		-
Portion of other-than-temporary impairment losses previously recognized in
other comprehensive income		(156)		-
Net impairment losses on available-for-sale debt securities		(156)		-
Equity in loss of unconsolidated entity		-		(6,610)
Insurance commission income		3,022		2,571
Bargain purchase gain		13,443		-
Other non-interest income		8,247		7,894
Total non-interest income	32,729		11,350
Non-interest expenses:
Employees' compensation and benefits		35,654		32,898
Occupancy and equipment		14,349		14,318
Business promotion		2,868		3,973
Professional fees		15,218		10,493
Taxes, other than income taxes		3,001		4,575
Insurance and supervisory fees		6,860		10,990
Net loss on other real estate owned (OREO) and OREO operations		2,628		5,837
Credit and debit card processing expenses		3,957		3,824
Communications		1,608		1,879
Other non-interest expenses		5,585		3,998
Total non-interest expenses	91,728		92,785
Income before income taxes		33,678		17,970
Income tax expense		(8,032)		(887)
Net income	$	25,646	$	17,083
Net income attributable to common stockholders	$	25,646	$	17,462
Net income per common share:
Basic	$	0.12	$	0.08
Diluted	$	0.12	$	0.08
Dividends declared per common share	$	-	$	-
The accompanying notes are an integral part of these statements.

6

FIRST BANCORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Quarter Ended
		March 31,		March 31,
	2015			2014
(In thousands)
Net income	$	25,646	$	17,083
Available-for-sale debt securities on which an other-than-temporary
impairment has been recognized:
Subsequent unrealized gain on debt securities on which an
other-than-temporary impairment has been recognized		689		913
Reclassification adjustment for other-than-temporary impairment
on debt securities included in net income		156		-
All other unrealized holding gains on available-for-sale securities arising during the period		6,295		21,626
Other comprehensive income for the period, net of tax		7,140		22,539
Total comprehensive income	$	32,786	$	39,622
The accompanying notes are an integral part of these statements.

7

FIRST BANCORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Quarter Ended
	March 31, 2015		March 31, 2014
(In thousands)
Cash flows from operating activities:
Net income	$	25,646	$	17,083
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		5,306		5,453
Amortization of intangible assets		1,093		1,235
Provision for loan and lease losses		32,970		31,915
Deferred income tax expense (benefit)		2,060		(700)
Stock-based compensation		1,457		717
Bargain purchase gain		(13,443)		-
Other-than-temporary impairments on debt securities		156		-
Equity in loss of unconsolidated entity		-		6,610
Derivative instruments and financial liabilities measured at fair value, unrealized loss (gain)		72		(148)
Gain on sale of premises and equipment and other assets		(194)		(25)
Net gain on sales of loans		(1,689)		(2,017)
Net amortization/accretion of premiums, discounts and deferred loan fees and costs		(673)		(477)
Originations and purchases of loans held for sale		(89,425)		(72,748)
Sales and repayments of loans held for sale		87,051		72,865
Amortization of broker placement fees		1,335		1,785
Net amortization/accretion of premium and discounts on investment securities		1,269		(284)
Increase in accrued income tax payable		5,481		1,476
Decrease in accrued interest receivable		1,953		4,992
Increase in accrued interest payable		1,000		2,106
(Increase) decrease in other assets		3,081		8,657
Increase (decrease) in other liabilities		11,007		(4,987)
Net cash provided by operating activities		75,513		73,508
Cash flows from investing activities:
Principal collected on loans		751,062		776,086
Loans originated and purchased		(705,621)		(774,764)
Proceeds from sales of loans held for investment		2,230		16,558
Proceeds from sales of repossessed assets		18,446		12,262
Purchases of securities available for sale		(56,429)		(76,253)
Proceeds from principal repayments and maturities of securities available for sale		53,596		45,422
Additions to premises and equipment		(3,027)		(7,696)
Proceeds from sale of premises and equipment and other assets		2,492		25
Net cash received from acquisition		217,659		-
Purchases of other equity securities		(433)		-
Net cash provided by (used in) investing activities		279,975		(8,360)
Cash flows from financing activities:
Net (decrease) increase in deposits		(166,924)		120,977
Repurchase of outstanding common stock		(236)		(246)
Issuance costs of common stock issued in exchange for preferred stock Series A through E		-		(53)
Net cash (used in) provided by financing activities		(167,160)		120,678
Net increase in cash and cash equivalents		188,328		185,826
Cash and cash equivalents at beginning of period		796,108		655,671
Cash and cash equivalents at end of period	$	984,436	$	841,497
Cash and cash equivalents include:
Cash and due from banks	$	767,471	$	824,547
Money market instruments		216,965		16,950
	$	984,436	$	841,497
The accompanying notes are an integral part of these statements.

8

FIRST BANCORP.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)

	Quarter Ended
	March 31,		March 31,
	2015		2014
(In thousands)
Preferred Stock
Balance at beginning of period	$	36,104	$	63,047
Exchange of preferred stock- Series A through E		-		(6,237)
Balance at end of period		36,104		56,810
Common Stock outstanding:
Balance at beginning of period		21,298		20,707
Common stock issued as compensation		8		6
Common stock withheld for taxes		(5)		(4)
Common stock issued in exchange for Series A through E preferred stock		-		107
Restricted stock grants		83		81
Restricted stock forfeited		(1)		-
Balance at end of period		21,383		20,897
Additional Paid-In-Capital:
Balance at beginning of period		916,067		888,161
Stock-based compensation		1,457		717
Common stock withheld for taxes		(231)		(242)
Common stock issued in exchange for Series A through E preferred stock		-		5,538
Reversal of issuance costs of Series A through E preferred stock exchanged		-		213
Issuance costs of common stock issued in exchange for Series A through E preferred stock		-		(53)
Restricted stock grants		(83)		(81)
Common stock issued as compensation		(8)		(6)
Restricted stock forfeited		1		-
Balance at end of period		917,203		894,247
Retained Earnings:
Balance at beginning of period		716,625		322,679
Net income		25,646		17,083
Excess of carrying amount of Series A though E preferred stock exchanged over
fair value of new shares of common stock		-		379
Balance at end of period		742,271		340,141
Accumulated Other Comprehensive Income (Loss), net of tax:
Balance at beginning of period		(18,351)		(78,736)
Other comprehensive income, net of tax		7,140		22,539
Balance at end of period		(11,211)		(56,197)
Total stockholders' equity	$	1,705,750	$	1,255,898
The accompanying notes are an integral part of these statements.

9

FIRST BANCORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The Consolidated Financial Statements (unaudited) of First BanCorp. (“the Corporation”) have been prepared in conformity with the accounting policies stated in the Corporation’s Audited Consolidated Financial Statements included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2014. Certain information and note disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been condensed or omitted from these statements pursuant to the rules and regulations of the SEC and, accordingly, these financial statements should be read  in conjunction with the Audited Consolidated Financial Statements of the Corporation for the year ended December 31, 2014, which are included in the Corporation’s 2014 Annual Report on Form 10-K. All adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the statement of financial position, results of operations and cash flows for the interim periods have been reflected. All significant intercompany accounts and transactions have been eliminated in consolidation.

The results of operations for the quarter ended March 31, 2015 are not necessarily indicative of the results to be expected for the entire year. 

Adoption of new accounting requirements and recently issued but not yet effective accounting requirements

The Financial Accounting Standards Board (“FASB”) has issued the following accounting pronouncements and guidance relevant to the Corporation’s operations:

In January 2014, the FASB updated the Accounting Standards Codification (the “Codification”) to clarify when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan so that the loan should be derecognized and the real estate property recognized in the financial statements. The Update clarifies that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan upon either: (i) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure, or (ii) the borrower conveying all interest in the residential real estate property to the creditor to satisfy the loan through completion of a deed in lieu of foreclosure or through a similar legal agreement.  In addition,  creditors are required to disclose on an annual and interim basis both (i) the amount of the foreclosed residential real estate property held and (ii) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments are effective for public business entities for annual periods beginning after December 15, 2014, and interim periods within those fiscal years. Early adoption is permitted. The guidance can be implemented using either a modified retrospective transition method or a prospective transition method. The Corporation adopted the provisions of this guidance on a prospective basis during the first quarter of 2015 without any material impact on the Corporation’s financial statements. Refer to Notes 7 and 10 for required disclosures.

In May 2014, the FASB updated the Codification to create a new, principle-based revenue recognition framework. The Update is the culmination of efforts by the FASB and the International Accounting Standards Board to develop a common revenue standard for U.S. GAAP and International Financial Reporting Standards. The core principal of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance describes a 5-step process entities can apply to achieve the core principle of revenue recognition and requires disclosures sufficient to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers and the significant judgments used in determining that information. The amendments are expect to become effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those reporting periods, as a result of the FASB’s recent issuance of a proposal to defer the effective date of the standard by one year.  Early adoption is not permitted. The Corporation is currently evaluating the impact that the adoption of this guidance will have on the presentation and disclosures in its financial statements.

In June 2014, the FASB updated the Codification to respond to stakeholders’ concerns about current accounting and disclosures for repurchase agreements and similar transactions. This Update requires two accounting changes. First, the Update changes the accounting for repurchase-to-maturity transactions to secured borrowing accounting. Second, for repurchase financing arrangements, the Update requires separate accounting for a transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counterparty, which will result in secured borrowing accounting for the repurchase agreement. Additionally, the Update introduces new disclosures to (i) increase transparency about the types of collateral pledged in secured borrowing transactions and (ii) enable users to better understand transactions in which the transferor retains substantially all of the exposure to the economic return on the transferred financial asset throughout the term of the transaction. For public business entities, the disclosure for repurchase agreements, securities lending transactions, and repurchase-to-maturity transactions accounted for as secured borrowings is required to

10

be presented for annual periods beginning after December 15, 2014, and for interim periods beginning after March 15, 2015. All other accounting and disclosure amendments in the Update are effective for public business entities for the first interim or annual period beginning after December 15, 2014. The adoption of this guidance did not have a material effect on the Corporation’s financial statements.

In June 2014, the FASB updated the Codification to provide guidance for determining compensation cost under specific circumstances when an employee’s compensation award is eligible to vest regardless of whether the employee is rendering service on the date the performance target is achieved. This Update becomes effective for annual and interim periods beginning after December 15, 2015 with early adoption permitted. The Corporation is currently evaluating the impact that the adoption of this guidance will have on the presentation and disclosures in its financial statements, if any.

In August 2014, the FASB updated the Codification to reduce the diversity found in the classification of certain foreclosed mortgage loans held by creditors that are either fully or partially guaranteed under government programs. Consistency in classification upon foreclosure is expected in order to provide more decision-useful information. The amendments in this Update require that a mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if: (i) the loan has a government guarantee that is not separable from the loan before foreclosure; (ii) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under the claim, and (iii) at the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. Upon foreclosure, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. The Update is effective for public business entities for annual periods, and interim periods within those annual periods beginning after December 15, 2014. The guidance can be implemented using either a prospective transition method or a modified retrospective transition method. The Corporation adopted the provisions of this guidance on a prospective basis during the first quarter of 2015 without any material impact on the Corporation’s financial statements.

In August 2014, the FASB updated the Codification to provide guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. If conditions or events raise substantial doubt about an entity’s ability to continue as a going concern, but the substantial doubt is alleviated as a result of consideration of management’s plans, the entity should disclose information that enables users of the financial statements to understand such determination.  The Update is effective for all business entities for annual periods ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Corporation expects the adoption of this guidance will have no impact on the Corporation’s financial position, results of operations, comprehensive income, cash flows and disclosures.

In November 2014, the FASB updated the Codification to clarify how current GAAP should be interpreted in evaluating the economic characteristics and risk of a host contract in a hybrid financial instrument that is issued in the form of a share. In addition, the Update was issued to clarify that, in evaluating the nature of a host contract, an entity should assess the substance of the relevant terms and features (that is, the relative strength of the debt-like or equity-like terms and features given the facts and circumstances) when considering how to weight those terms and features. The effects of initially adopting this Update should be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are effective. Retrospective application is permitted to all relevant prior periods. This Update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption in an interim period is permitted. The Corporation is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements, if any.

In January 2015, the FASB updated the Codification to eliminate from GAAP the concept of extraordinary items as part of its initiative to reduce complexity in accounting standards (the Simplification Initiative).  Under current GAAP, an event or transaction is presumed to be an ordinary and usual activity of the reporting entity unless evidence clearly supports its classification as an extraordinary item. In order to be classified as an extraordinary item, the event or transaction must be: (i) unusual in nature, and (ii) infrequent in occurrence.  Before the update was issued, an entity was required to segregate these items from the results of ordinary operations and show the items separately in the income statement, net of tax, after income from continuing operations. This Update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption in an interim period is permitted. The Corporation expects the adoption of this guidance will have no impact on the Corporation’s consolidated financial statements.

In February 2015, the FASB updated the Codification to eliminate the deferral of FAS 167, which has allowed reporting entities with interests  in certain investment funds to follow the previous consolidation guidance in FIN 46(R), and  to make other changes to both the variable interest model and the voting model. While the Update is aimed at asset managers, it will affect all reporting entities involved with limited partnerships or similar entities. In some cases, consolidation conclusions will change. In other cases, reporting entities will need to provide additional disclosure about entities that currently are not considered VIEs but will be considered VIEs under the new guidance when they have a variable interest  in those VIEs.  Regardless of whether conclusions change or additional disclosure requirements are triggered, reporting entities will need to re-evaluate limited partnerships or similar entities for

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consolidation and revise their documentation. For public business entities, the Update is effective for annual and interim periods beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. A reporting entity must apply the amendments retrospectively. The Corporation is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements, if any.

In April 2015, the FASB updated the Codification  to clarify that customers should determine whether a cloud computing arrangement includes the license of software by applying the same guidance cloud service providers use to make this determination. Examples of cloud computing arrangements include software as a service, platform as a service, infrastructure as a service and other hosting arrangements. If a hosting arrangement includes a software license for internal use software, the software license should be accounted for by the customer under ASC 350-40. A license of software other than internal use software would be accounted for by the customer under other U.S. GAAP (e.g., a research and development cost and software to be sold, leased or otherwise marketed). If a hosting arrangement includes a software licenses, then that would be in addition to any service contract in the arrangement. Hosting arrangements that do not include software licenses should be accounted for as service contracts. The Update also eliminates the existing requirement for customers to account for software licenses they acquire by analogizing to the guidance on leases. Instead, customers will account for software licenses that are in the scope of ASC 350-40 in the same manner as licenses of other intangible assets. Entities have the option of applying the guidance (1) prospectively to all arrangements entered into or materially modified after the effective date or (2) retrospectively. Entities that elect prospective application are required to disclose the reason for the change in accounting principle, the transition method, and a description of the financial statement line items affected by the change. Entities that elect retrospective application must disclose the information required by ASC 250. For public business entities, the guidance is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. The Corporation is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements, if any.

NOTE 2 – BUSINESS COMBINATION

On February 27, 2015, FirstBank acquired 10 Puerto Rico branches of Doral Bank, assumed $522.7 million in deposits related to such branches, acquired approximately $324.8 million in principal balance of loans, primarily residential mortgage loans, acquired $5.5 million of property, plant and equipment and received $217.7 million of cash, through an alliance with Banco Popular of Puerto Rico (“Popular”), who was the successful lead bidder with the FDIC on the failed Doral Bank, as well as other co-bidders (the “Doral Bank Transaction”). This transaction solidified FirstBank as the second largest bank in Puerto Rico, enhanced FirstBank’s presence in geographical areas in Puerto Rico with growth potential for deposits and mortgage originations, two of the main business strategies of the institution, and provides a stable source of low-cost deposits that are expected to support and enhance future growth activities.

Under the FDIC’s bidding format, Popular was the lead bidder and party to the purchase and assumption agreement with the FDIC covering all assets and deposits to be acquired by Popular and its alliance co-bidders. Popular entered into back to back purchase assumption agreements with the alliance co-bidders, including FirstBank, for the transferred assets and deposits. There is no loss-share arrangement with the FDIC related to the acquired assets.

The Corporation accounted for this transaction as a business combination. The following table identifies the fair value of assets acquired and liabilities assumed from Doral Bank on February 27, 2015:
	Asset/Liabilities
	(at Fair Value)
	(In thousands)
ASSETS
Cash	$	217,659
Loans		311,410
Premises and equipment, net		5,450
Core Deposit Intangible		5,820
Total assets acquired		540,339
LIABILITIES
Deposits		523,517
Other liabilities		3,379
Net assets - Bargain purchase gain	$	13,443

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The application of the acquisition-method of accounting resulted in a bargain purchase gain of $13.4 million, which is included in non-interest income in the Corporation’s consolidated statement of income for the quarter ended March 31, 2015, and a core deposit intangible of $5.8 million. The net after-tax gain of $8.2 million represents the excess of the estimated fair value of the assets acquired (including cash payments received from the FDIC) over the estimated fair value of the liabilities assumed and is influenced significantly by the FDIC-assisted transaction process.

The following is a description of the methods used to determine the fair values of significant assets and liabilities presented above:

Cash and due from banks – The carrying amount of these assets is a reasonable estimate of fair value based on the short-term nature of these assets. This balance primarily represents the cash settlement received from Popular for the net equity received, assets discount bid and other customary closing adjustments.

Loans – Fair values for loans were based on a discounted cash flow methodology that uses market-driven assumptions such as prepayment rate, default rate, and loss severity on a loan level basis.  The forecasted cash flows are then discounted by yields observed in sales of similar portfolios in Puerto Rico and the continental U.S.

The Corporation evaluated the residential mortgage loans acquired and determined that $227.9 million are non-credit impaired purchased loans and have been accounted in accordance with the provisions of FASB ASC Topic 310-20, Nonrefundable Fees and Other Costs, and were recorded with a premium of $1.3 million. The remaining approximately $93.3 million of residential mortgage loans excluded were considered purchased credit impaired loans within the provisions of FASB ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, and were recorded with a $13.4 million discount. These purchased credit impaired loans will recognize interest income through accretion of the difference between the fair value of the loans and the expected cash flows.

Core deposit intangible – This intangible asset represents the value of the relationships that Doral Bank had with its deposit customers. The fair value of this intangible asset was estimated based on a discounted cash flow methodology that gave appropriate consideration to expected customer attrition rates, cost of the deposit base, and the net maintenance cost attributable to customer deposits. The Corporation recorded $5.8 million of core deposit intangible.

Deposits – The fair values used for the demand and savings deposits that comprise the transaction accounts acquired, by definition, equal the amount payable on demand at the acquisition date.  The fair value adjustment of $0.8 million was applied for time deposits because the estimated weighted average interest rate of the assumed certificates of deposits were estimated to be above the current market rates. 

ASC Topic 805 requires the measurement of all recognized assets acquired and liabilities assumed in a business combination at their acquisition-date fair values. Accordingly, the Corporation initially recorded amounts for the fair values of the assets acquired and liabilities assumed based on the best information available at the acquisition date. The Corporation may retrospectively adjust these amounts to reflect new information obtained during the measurement period (not to exceed 12 months) about facts and circumstances that existed as of the acquisition date that, if known, would have affected the acquisition-date fair value measurements. Any retrospective adjustments to acquisition date fair values will affect the bargain purchase gain recognized. During the first quarter of 2015, the Corporation incurred $3.9 million of expenses related to this transaction, primarily included in professional fees expenses in the consolidated statement of income, of which $2.1 million represents acquisition and conversion costs that are considered non-recurring in nature.

The Corporation’s operating results for the quarter ended March 31, 2015, include the operating results of the acquired assets and assumed liabilities subsequent to the acquisition date. The Corporation also considered the pro forma requirements of ASC 805 and deemed it not necessary to provide pro forma financial statements as required under the standard for the Doral Bank transaction as is was not material to the Corporation.

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NOTE 3 – EARNINGS PER COMMON SHARE

	The calculations of earnings per common share for the quarters ended on March 31, 2015 and 2014 are as follows:
		Quarter Ended
		March 31,		March 31,
		2015		2014
		(In thousands, except per share information)
Net income		$	25,646	$	17,083
Favorable impact from issuing common stock in exchange for
	Series A through E preferred stock (1)		-		379
Net income attributable to common stockholders		$	25,646	$	17,462
Weighted-Average Shares:
	Average common shares outstanding		210,686		205,732
	Average potential dilutive common shares		2,060		1,144
	Average common shares outstanding-assuming dilution		212,746		206,876
Income per common share:
	Basic	$	0.12	$	0.08
	Diluted	$	0.12	$	0.08
(1)	Excess of carrying amount of the Series A through E preferred stock exchanged over the fair value of new common shares issued in the first quarter of 2014.

Earnings per common share is computed by dividing net income attributable to common stockholders by the weighted average number of common shares issued and outstanding. Net income attributable to common stockholders represents net income adjusted for any preferred stock dividends, including any dividends declared, and any cumulative dividends related to the current dividend period that have not been declared as of the end of the period. For the first quarter of 2014, net income attributable to common stockholders includes the one-time effect to retained earnings of the issuance of common stock in exchange for Series A through E preferred stock. This transaction is discussed in Note 19 to the unaudited consolidated financial statements. Basic weighted average common shares outstanding exclude unvested shares of restricted stock.

Potential common shares consist of common stock issuable under the assumed exercise of stock options, unvested shares of restricted stock, and outstanding warrants using the treasury stock method. This method assumes that the potential common shares are issued and the proceeds from the exercise, in addition to the amount of compensation cost attributable to future services, are used to purchase common stock at the exercise date. The difference between the numbers of potential shares issued and potential shares purchased is added as incremental shares to the actual number of shares outstanding to compute diluted earnings per share. Stock options, unvested shares of restricted stock, and outstanding warrants that result in lower potential shares issued than potential shares purchased under the treasury stock method are not included in the computation of dilutive earnings per share since their inclusion would have an antidilutive effect on earnings per share. Stock options not included in the computation of outstanding shares because they were antidilutive amounted to 69,848 and 88,640 for the quarters ended March 31, 2015 and 2014, respectively. 

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NOTE 4 – STOCK-BASED COMPENSATION

As of January 21, 2007, the Corporation’s 1997 stock option plan expired and no additional awards could be granted under that plan.  All outstanding awards granted under this plan have continue in full force and effect since then, subject to their original terms. 

The activity of stock options granted under the 1997 stock option plan for the quarter ended March 31, 2015 is set forth below:
	Number of Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (In thousands)
Beginning of period outstanding
and exercisable	82,575	$	187.75
Options expired	(11,395)		358.80
Options cancelled	(1,332)		164.10
End of period outstanding and
exercisable	69,848	$	160.30	1.3	$	-

On April 29, 2008, the Corporation’s stockholders approved the First BanCorp 2008 Omnibus Incentive Plan (the “Omnibus Plan”).  The Omnibus Plan provides for equity-based compensation incentives (the “awards”) through the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, and other stock-based awards.  The Omnibus Plan authorizes the issuance of up to 8,169,807 shares of common stock, subject to adjustments for stock splits, reorganizations, and other similar events.  The Corporation’s Board of Directors, upon receiving the relevant recommendation of the Compensation Committee, has the power and authority to determine those eligible to receive awards and to establish the terms and conditions of any awards, subject to various limits and vesting restrictions that apply to individual and aggregate awards. 

    Under the Omnibus Plan, during the first quarter of 2015, 30,068 shares of restricted stock were awarded to one of the Corporation’s independent directors of which 4,295 shares vest in one year and the remaining 25,773 shares vest in five years.  In addition, in the first quarter of 2015, the Corporation issued 791,464 shares of restricted stock that will vest based on the employees’ continued service with the Corporation. For 40,000 of the 791,464 shares awarded to employees, the requisite service period is approximately three months. For the remaining 751,464 shares granted to employees, fifty percent (50%) of those shares vest in two years from the grant date and the remaining 50% percent vest in three years from the grant date. Included in those 751,464 shares of restricted stock are 615,464 shares granted to certain senior officers consistent with the requirements of the Troubled Asset Relief Program (“TARP”) Interim Final Rule, which permit TARP recipients to grant “long-term restricted stock” without violating the prohibition on paying or accruing a bonus payment provided that: (i) the value of the grant may not exceed one-third of the amount of the employee’s annual compensation, (ii) no portion of the grant may vest before two years after the grant date, and (iii) the grant must be subject to a further restriction on transfer or payment as described below. Specifically, the stock that has otherwise vested may not become transferable at any time earlier than as permitted under the schedule set forth by TARP, which is based on the repayment in 25% increments of the aggregate financial assistance received from the U.S. Treasury. Hence, notwithstanding the vesting period mentioned above, the employees covered by TARP are restricted from transferring the shares. The U.S. Treasury confirmed that, effective March 2014, it has recovered more than a 25% of its investment in First BanCorp. Therefore, the restriction on transfer relating to 25% of the shares granted under TARP requirements was released.

     The fair value of the shares of restricted stock granted in the first quarter of 2015 was based on the market price of the Corporation’s outstanding common stock on the date of the grant. For the 615,464 shares of restricted stock granted under the TARP requirements, the market price was discounted due to account for TARP transferability restrictions. For purposes of determining the awards fair value, the Corporation estimated an appreciation of 14% in the value of the common stock using the Capital Asset Pricing Model as a basis of what would be a market participant’s expected return on the Corporation’s stock and assumed that the Treasury would hold the common stock of the Corporation that it currently owns for a period not to exceed one year, resulting in a fair value of $3.18 for restricted shares granted under the TARP requirements. Also, the Corporation used empirical data to estimate employee terminations; separate groups of employees that have similar historical exercise behavior were considered separately for valuation purposes.

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The following table summarizes the restricted stock activity in 2015 under the Omnibus Plan for both executive officers covered by the TARP requirements and other employees as well as for the independent directors:
	Quarter Ended
	March 31, 2015
	Number of
	shares of		Weighted-Average
	restricted		Grant Date
	stock		Fair Value
Non-vested shares at beginning of period	2,327,156	$	3.39
Granted	821,532		3.92
Forfeited	(8,500)		5.07
Vested	(63,750)		4.00
Non-vested shares at March 31, 2015	3,076,438	$	3.51

    For the quarters ended March 31, 2015 and 2014, the Corporation recognized $1.0 million and $0.4 million, respectively, of stock-based compensation expense related to restricted stock awards. As of March 31, 2015, there was $6.0 million of total unrecognized compensation cost related to non-vested shares of restricted stock. The weighted average period over which the Corporation expects to recognize such cost is 2.3 years.

   During the first quarter of 2014, the Corporation issued 810,138 shares of restricted stock that will vest based on the employees’ continued service with the Corporation. Fifty percent (50%) of those shares vest in two years from the grant date and the remaining 50% percent vest in three years from the grant date. Included in those 810,138 shares of restricted stock are 653,138 shares granted to certain senior officers consistent with the requirements of TARP. The employees covered by TARP are restricted from transferring the shares, subject to certain conditions as explained above.

  The fair value of the shares of restricted stock granted in the first quarter of 2014 was based on the market price of the Corporation’s outstanding common stock on the date of the grant. For the 653,138 shares of restricted stock granted under the TARP requirements, the market price was discounted due to the postvesting restrictions. For purposes of computing the discount, the Corporation estimated an appreciation of 16% in the value of the common stock using the Capital Asset Pricing Model as a basis of what would be a market participant’s expected return on the Corporation’s stock and assumed that the Treasury would hold the common stock of the Corporation that it owned as of the date of the grants for an additional two years, resulting in a fair value of $2.63 for restricted shares granted under the TARP requirements.

Stock-based compensation accounting guidance requires the Corporation to develop an estimate of the number of share-based awards that will be forfeited due to employee or director turnover. Quarterly changes in the estimated forfeiture rate may have a significant effect on share-based compensation, as the effect of adjusting the rate for all expense amortization is recognized in the period in which the forfeiture estimate is changed. If the actual forfeiture rate is higher than the estimated forfeiture rate, then an adjustment is made to increase the estimated forfeiture rate, which will result in a decrease in the expense recognized in the financial statements. If the actual forfeiture rate is lower than the estimated forfeiture rate, then an adjustment is made to decrease the estimated forfeiture rate, which will result in an increase in the expense recognized in the financial statements. When unvested options or shares of restricted stock are forfeited, any compensation expense previously recognized on the forfeited awards is reversed in the period of the forfeiture. Approximately $26 thousand and $5 thousand of compensation expense was reversed during the first quarter of 2015 and 2014, respectively, related to forfeited awards.

     Also, under the Omnibus Plan, effective April 1, 2013, the Corporation’s Board of Directors determined to increase the salary amounts paid to certain executive officers primarily by paying the increased salary amounts in the form of shares of the Corporation’s common stock, instead of cash. During the first quarter of 2015, the Corporation issued 80,234 shares of common stock with a weighted average market value of $6.02 as salary stock compensation. This resulted in a compensation expense of $0.4 million recorded in the first quarter of 2015.

  For the quarter ended March 31, 2015, the Corporation withheld 28,183 shares from the common stock paid to certain senior officers as additional compensation and 22,525 shares of the restricted stock that vested during the first quarter of 2015 to cover employees’ payroll and income tax withholding liabilities; these shares are held as treasury shares. The Corporation paid any fractional share of salary stock that the officer was entitled to in cash. In the consolidated financial statements, the Corporation treats shares withheld for tax purposes as common stock repurchases.

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NOTE 5 – INVESTMENT SECURITIES

Investment Securities Available for Sale

The amortized cost, non-credit loss component of other-than-temporary impairment (“OTTI”) recorded in other comprehensive income (“OCI”), gross unrealized gains and losses recorded in OCI, approximate fair value, weighted average yield and contractual maturities of investment securities available for sale as of March 31, 2015 and December 31, 2014 were as follows:

		March 31, 2015
		Amortized cost		Noncredit Loss Component of OTTI Recorded in OCI		Gross				Fair value		Weighted average yield%
						Unrealized
						gains		losses
		(Dollars in thousands)
U.S. Treasury securities:
	Due within one year	$	7,500	$	-	$	-	$	-	$	7,500	0.11
Obligations of U.S.
government-sponsored
agencies:
	After 1 to 5 years		278,054		-		318		1,918		276,454	1.25
	After 5 to 10 years		102,745		-		850		1,037		102,558	1.93
Puerto Rico government
obligations:
	After 1 to 5 years		39,836		-		-		16,922		22,914	4.49
	After 5 to 10 years		875		-		-		-		875	5.20
	After 10 years		24,821		-		1		7,148		17,674	5.37
United States and Puerto
Rico government
obligations:			453,831		-		1,169		27,025		427,975	1.90
Mortgage-backed securities:
FHLMC certificates:
	After 1 to 5 years		432		-		46		-		478	4.95
	After 10 years		304,628		-		2,733		560		306,801	2.17
			305,060		-		2,779		560		307,279	2.17
GNMA certificates:
	Due within one year		17		-		-		-		17	3.52
	After 1 to 5 years		55		-		2		-		57	3.93
	After 5 to 10 years		24,189		-		956		-		25,145	3.62
	After 10 years		316,122		-		21,942		-		338,064	3.85
			340,383		-		22,900		-		363,283	3.83
FNMA certificates:
	After 1 to 5 years		3,743		-		155		-		3,898	3.37
	After 5 to 10 years		16,924		-		646		31		17,539	2.90
	After 10 years		814,520		-		10,059		2,251		822,328	2.35
			835,187		-		10,860		2,282		843,765	2.37
Other mortgage pass-through
trust certificates:
	Over  5 to 10 years		108		-		-		-		108	7.26
	After 10 years		43,012		11,296		-		-		31,716	2.15
			43,120		11,296		-		-		31,824	2.15
Total mortgage-backed
securities			1,523,750		11,296		36,539		2,842		1,546,151	2.65
Other (1)
	After 1 to 5 years		100		-		-		-		100	1.50
Total investment securities
	available for sale	$	1,977,681	$	11,296	$	37,708	$	29,867	$	1,974,226	2.48
(1)	Represents investment in a Community Investment Fund.

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		December 31, 2014
		Amortized cost		Noncredit Loss Component of OTTI Recorded in OCI		Gross				Fair value		Weighted average yield%
						Unrealized
						gains		losses
		(Dollars in thousands)
U.S. Treasury securities:
	Due within one year	$	7,498	$	-	$	1	$	-	$	7,499	0.11
Obligations of U.S.
government-sponsored
agencies:
	After 1 to 5 years		260,889		-		42		4,219		256,712	1.22
	After 5 to 10 years		78,234		-		246		2,077		76,403	1.72
Puerto Rico government
obligations:
	After 1 to 5 years		39,827		-		-		12,419		27,408	4.49
	After 5 to 10 years		886		-		1		-		887	5.20
	After 10 years		20,498		-		-		5,571		14,927	5.83
United States and Puerto
Rico government
obligations:			407,832		-		290		24,286		383,836	1.86
Mortgage-backed securities:
FHLMC certificates:
	After 10 years		315,311		-		1,743		1,260		315,794	2.17
GNMA certificates:
	After 1 to 5 years		39		-		1		-		40	3.26
	After 5 to 10 years		17,108		-		501		-		17,609	3.65
	After 10 years		338,842		-		20,957		-		359,799	3.83
			355,989		-		21,459		-		377,448	3.83
FNMA certificates:
	After 1 to 5 years		4,160		-		181		-		4,341	3.40
	After 5 to 10 years		9,584		-		521		5		10,100	3.49
	After 10 years		837,597		-		7,756		4,854		840,499	2.36
			851,341		-		8,458		4,859		854,940	2.37
Other mortgage pass-through
trust certificates:
	Over  5 to 10 years		111		-		1		-		112	7.27
	After 10 years		45,677		12,141		-		-		33,536	2.17
			45,788		12,141		1		-		33,648	2.17
Total mortgage-backed
	securities		1,568,429		12,141		31,661		6,119		1,581,830	2.66
Total investment securities
	available for sale	$	1,976,261	$	12,141	$	31,951	$	30,405	$	1,965,666	2.49

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Maturities of mortgage-backed securities are based on contractual terms assuming no prepayments. Expected maturities of investments might differ from contractual maturities because they may be subject to prepayments and/or call options. The weighted average yield on investment securities available for sale is based on amortized cost and, therefore, does not give effect to changes in fair value. The net unrealized gain or loss on securities available for sale and the non credit loss component of OTTI are presented as part of OCI.

The following tables show the Corporation’s available-for-sale investments’ fair value and gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of March 31, 2015 and December 31, 2014. The tables also include debt securities for which an OTTI was recognized and only the amount related to a credit loss was recognized in earnings. Unrealized losses for which OTTI had been recognized have been reduced by any subsequent recoveries in fair value.

	As of March 31, 2015
	Less than 12 months				12 months or more				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
		(In thousands)
Debt securities:
Puerto Rico government obligations	$	-	$	-	$	36,314	$	24,070	$	36,314	$	24,070
U.S. government agencies obligations		4,999		-		261,252		2,955		266,251		2,955
Mortgage-backed securities:
FNMA		311,339		1,195		99,932		1,087		411,271		2,282
FHLMC		110,475		352		21,419		208		131,894		560
Other mortgage pass-through
trust certificates		-		-		31,716		11,296		31,716		11,296
	$	426,813	$	1,547	$	450,633	$	39,616	$	877,446	$	41,163
	As of December 31, 2014
	Less than 12 months				12 months or more				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
		(In thousands)
Debt securities:
Puerto Rico government obligations	$	-	$	-	$	42,335	$	17,990	$	42,335	$	17,990
U.S. government agencies obligations		46,436		74		257,996		6,222		304,432		6,296
Mortgage-backed securities:
FNMA		2,038		5		541,642		4,854		543,680		4,859
FHLMC		-		-		135,277		1,260		135,277		1,260
Other mortgage pass-through
trust certificates		-		-		33,536		12,141		33,536		12,141
	$	48,474	$	79	$	1,010,786	$	42,467	$	1,059,260	$	42,546

19

Assessment for OTTI

On a quarterly basis, the Corporation performs an assessment to determine whether there have been any events or economic circumstances indicating that a security with an unrealized loss has suffered an OTTI. A debt security is considered impaired if the fair value is less than its amortized cost basis at the reporting date. The accounting literature requires the Corporation to assess whether the unrealized loss is other than temporary.

OTTI losses must be recognized in earnings if an investor has the intent to sell the debt security or it is more likely than not that it will be required to sell the debt security before recovery of its amortized cost basis.  However, even if an investor does not expect to sell a debt security, it must evaluate expected cash flows to be received and determine if a credit loss has occurred. 

An unrealized loss is generally deemed to be other-than-temporary and a credit loss is deemed to exist if the present value of the expected future cash flows is less than the amortized cost basis of the debt security. The credit loss component of an OTTI, if any, is recorded as a component of net impairment losses on investment securities in the accompanying consolidated statements of income, while the remaining portion of the impairment loss is recognized in OCI, provided the Corporation does not intend to sell the underlying debt security and it is “more likely than not” that the Corporation will not have to sell the debt security prior to recovery.

Debt securities issued by U.S. government agencies, government-sponsored entities and the Treasury accounted for approximately 96% of the total available-for-sale portfolio as of March 31, 2015 and no credit losses are expected, given the explicit and implicit guarantees provided by the U.S. federal government.  The Corporation’s assessment for OTTI was concentrated mainly on private label mortgage-backed securities (“MBS”) with an amortized cost of $43.0 million for which credit losses are evaluated on a quarterly basis and on Puerto Rico Government obligations held as part of the available-for-sale securities portfolio.  The Corporation considered the following factors in determining whether a credit loss exists and the period over which the debt security is expected to recover:

·The length of time and the extent to which the fair value has been less than the amortized cost basis;

·Changes in the near term prospects of the underlying collateral of a security such as changes in default rates, loss severity given default, and significant changes in prepayment assumptions;

·The level of cash flows generated from the underlying collateral supporting the principal and interest payments on the debt securities; and

·Any adverse change to the credit conditions and liquidity of the issuer, taking into consideration the latest information available about the overall financial condition of the issuer, credit ratings, recent legislation and government actions affecting the issuer’s industry and actions taken by the issuer to deal with the present economic climate. 

The Corporation recorded OTTI losses on available-for-sale debt securities as follows:

	Private Label MBS
	Quarter ended March 31,
	2015		2014
(In thousands)
Total other-than-temporary impairment  losses	$	-	$	-
Portion of  other-than-temporary impairment losses
previously recognized in OCI		(156)		-
Net impairment losses recognized in earnings	$	(156)	$	-

20

The following table summarizes the roll-forward of credit losses on debt securities held by the Corporation for which a portion of an OTTI is recognized in OCI:
	Quarter ended March 31,
	2015		2014
(In thousands)
Credit losses at the beginning of the period	$	5,777	$	5,389
Additions:
Credit losses on debt securities for which an
OTTI was previously recognized		156		-
Ending balance of credit losses on debt securities held for
which a portion of an OTTI was recognized in OCI	$	5,933	$	5,389

For the first quarter of 2015, the $156 thousand credit related impairment loss is related to private label MBS, which are collateralized by fixed-rate mortgages on single-family residential properties in the United States. The interest rates on these private-label MBS are variable, tied to 3-month LIBOR and limited to the weighted-average coupon of the underlying collateral. The underlying mortgages are fixed-rate single-family loans with original high FICO scores (over 700) and moderate original loan-to-value ratios (under 80%), as well as moderate delinquency levels.

Based on the expected cash flows derived from the model, and since the Corporation does not have the intention to sell the securities and has sufficient capital and liquidity to hold these securities until a recovery of the fair value occurs, only the credit loss component was reflected in earnings.  Significant assumptions in the valuation of the private label MBS were as follows:

	March 31, 2015		December 31, 2014
	Weighted		Weighted
	Average	Range	Average	Range
Discount rate	14.5%	14.5%	14.5%	14.5%
Prepayment rate	32%	18.04%-100.00%	32%	19.89%-100.00%
Projected Cumulative Loss Rate	7.3%	0.00%-80.00%	7.9%	0.64%-80.00%

     As of March 31, 2015, the Corporation held approximately $65.5 million of Puerto Rico government and agencies bond obligations, mainly bonds of the Government Development Bank (“GDB”) and the Puerto Rico Building Authority, as part of its available-for-sale investment securities portfolio, which were reflected at their aggregate fair value of $41.5 million.  During the first quarter of 2015, the fair value of these obligation decreased by $6.1 million. In February and March 2014, Standard & Poor’s (“S&P”), Moody’s Investor Service (“Moody’s”) and Fitch Ratings (“Fitch”) downgraded the Commonwealth of Puerto Rico general obligations bonds and other obligations of Puerto Rico instrumentalities to non-investment grade categories. In February and April 2015, Moody’s and S&P downgraded the Puerto Rico’s general obligation debt further and right now is rated seven notches below investment grade.

   The issuers of Puerto Rico government and agencies bonds held by the Corporation have not defaulted, and the contractual payments on these securities have been made as scheduled. The Corporation has the ability and intent to hold these securities until a recovery of the fair value occurs, and it is not more likely than not that the Corporation will be required to sell the securities prior to such recovery. It is uncertain how the financial markets may react to any potential further rating downgrade of Puerto Rico’s debt. However, further deterioration in the fiscal situation could further adversely affect the value of Puerto Rico’s government obligations. The Corporation will continue to closely monitor Puerto Rico’s political and economic status and evaluate the portfolio for any declines in value that could be considered other-than-temporary.

21

NOTE 6 – OTHER EQUITY SECURITIES

Institutions that are members of the FHLB system are required to maintain a minimum investment in FHLB stock. Such minimum investment is calculated as a percentage of aggregate outstanding mortgages, and an additional investment is required that is calculated as a percentage of total FHLB advances, letters of credit, and the collateralized portion of interest-rate swaps outstanding. The stock is capital stock issued at $100 par value. Both stock and cash dividends may be received on FHLB stock.

As of March 31, 2015 and December 31, 2014, the Corporation had investments in FHLB stock with a book value of $25.5 million. The net realizable value is a reasonable proxy for the fair value of these instruments. Dividend income from FHLB stock for each of the quarters ended March 31, 2015 and 2014 was $0.3 million.

The shares of FHLB stock owned by the Corporation were issued by the FHLB of New York. The FHLB of New York is part of the Federal Home Loan Bank System, a national wholesale banking network of 12 regional, stockholder-owned congressionally chartered banks. The Federal Home Loan Banks are all privately capitalized and operated by their member stockholders. The system is supervised by the Federal Housing Finance Agency, which ensures that the Federal Home Loan Banks operate in a financially safe and sound manner, remain adequately capitalized and able to raise funds in the capital markets, and carry out their housing finance mission.

The Corporation has other equity securities that do not have a readily available fair value. The carrying value of such securities as of March 31, 2015 and December 31, 2014 was $0.7 million and $0.3 million, respectively.

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NOTE 7 – LOANS HELD FOR INVESTMENT

The following provides information about the loan portfolio held for investment:

		March 31,		December 31,
			2015		2014
(In thousands)
Residential mortgage loans, mainly secured by first mortgages		$	3,331,620	$	3,011,187
Commercial loans:
Construction loans			124,440		123,480
Commercial mortgage loans			1,649,263		1,665,787
Commercial and Industrial loans (1)			2,442,867		2,479,437
Total Commercial loans			4,216,570		4,268,704
Finance leases			230,183		232,126
Consumer loans			1,706,999		1,750,419
Loans held for investment			9,485,372		9,262,436
Allowance for loan and lease losses			(226,064)		(222,395)
Loans held for investment, net		$	9,259,308	$	9,040,041
__________
(1)	As of March 31, 2015 and December 31, 2014, includes $1.1 billion of commercial loans that are secured by real estate but are not dependent upon the real estate for repayment.

Loans held for investment on which accrual of interest income had been discontinued as of the indicated dates were as follows:
(In thousands)		March 31,		December 31,
		2015		2014
Non-performing loans:
Residential mortgage		$	172,583	$	180,707
Commercial mortgage			142,385		148,473
Commercial and Industrial			186,500		122,547
Construction:
Land			14,091		15,030
Construction-residential			13,072		14,324
Consumer:
Auto loans			19,043		22,276
Finance leases			2,979		5,245
Other consumer loans			12,891		15,294
Total non-performing loans held for investment (1)(2)(3)		$	563,544	$	523,896
_______________
(1)	As of March 31, 2015 and December 31, 2014, excludes $54.6 million of non-performing loans held for sale.
(2)	Amount excludes purchased-credit impaired ("PCI") loans with a carrying value of approximately $181.1 million and $102.6 million as of March 31, 2015 and December 31, 2014, respectively, primarily mortgage loans acquired from Doral Bank in the first quarter of 2015 and second quarter of 2014, as further discussed below. These loans are not considered non-performing due to the application of the accretion method, under which these loans will accrete interest income over the remaining life of the loans using an estimated cash flow analysis.
(3)	Non-performing loans exclude $434.2 million and $494.6 million of Troubled Debt Restructuring ("TDR") loans that are in compliance with the modified terms and in accrual status as of March 31, 2015 and December 31, 2014, respectively.

Loans in Process of Foreclosure

    As of March 31, 2015, the recorded investment of residential mortgage loans collateralized by residential real estate property that are in the process of foreclosure amounted to $161.1 million. The Corporation commences the foreclosure process on residential real estate loans when a borrower becomes 120 days delinquent in accordance with Consumer Finance Protection Bureau Guidelines (CFPB). Foreclosure procedures and timelines vary depending on whether the property address resides on a judicial or non-judicial state. Judicial states (Puerto Rico) require the foreclosure to be processed through the state’s court while non-judicial states are

23

processed without court intervention. Foreclosure timelines vary according to state law and Investor Guidelines. Occasionally foreclosures may be delayed due to mandatory mediations, bankruptcy, court delays and title issues, among other reasons.

The Corporation’s aging of the loans held for investment portfolio is as follows:
As of March 31, 2015
(In thousands)		30-59 Days Past Due		60-89 Days Past Due		90 days or more Past Due (1)		Total Past Due		Purchased Credit-Impaired Loans		Current		Total loans held for investment		90 days past due and still accruing (2)
Residential mortgage:
FHA/VA and other government-guaranteed
loans (2)(3)(4)		$	-	$	8,200	$	96,086	$	104,286	$	-	$	51,376	$	155,662	$	96,086
Other residential mortgage loans (4)			-		88,209		191,014		279,223		177,601		2,719,134		3,175,958		18,431
Commercial:
Commercial and Industrial loans			22,933		3,193		207,063		233,189		-		2,209,678		2,442,867		20,563
Commercial mortgage loans (4)			-		1,564		165,778		167,342		3,279		1,478,642		1,649,263		23,393
Construction:
Land (4)			-		383		14,291		14,674		-		39,516		54,190		200
Construction-commercial			-		-		-		-		-		27,456		27,456		-
Construction-residential (4)			-		-		13,072		13,072		-		29,722		42,794		-
Consumer:
Auto loans			76,721		18,548		19,043		114,312		-		914,058		1,028,370		-
Finance leases			10,975		2,893		2,979		16,847		-		213,336		230,183		-
Other consumer loans			10,355		5,464		16,339		32,158		234		646,237		678,629		3,448
Total loans held for investment		$	120,984	$	128,454	$	725,665	$	975,103	$	181,114	$	8,329,155	$	9,485,372	$	162,121
_____________
(1)	Includes non-performing loans and accruing loans which are contractually delinquent 90 days or more (i.e., FHA/VA guaranteed loans and credit cards). Credit card loans continue to accrue finance charges fees until charged-off at 180 days.
(2)	It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as past-due loans 90 days and still accruing as opposed to non-performing loans since the  principal repayment is insured. These balances include $30.1 million of residential mortgage loans insured by the FHA or guaranteed by the VA, which are over 18 months delinquent, and are no longer accruing interest as of March 31, 2015.
(3)	As of March 31, 2015, includes $26.2 million of defaulted loans collateralizing Government National Mortgage Association ("GNMA") securities for which the Corporation has an unconditional option (but not an obligation) to repurchase the defaulted loans.
(4)	According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the  Federal Reserve Board, residential mortgage, commercial mortgage, and construction loans are considered past due when the borrower is in arrears two or more monthly payments. FHA/VA government guaranteed loans, other residential mortgage loans, commercial mortgage loans, land loans and construction-residential loans past due 30-59 days as of March 31, 2015 amounted to $12.2 million, $177.4 million, $38.4 million, $6.1 million, and $1.6 million, respectively.

As of December 31, 2014
(In thousands)		30-59 Days Past Due		60-89 Days Past Due		90 days or more Past Due (1)		Total Past Due		Purchased Credit- Impaired Loans		Current		Total loans held for investment		90 days past due and still accruing (2)
Residential mortgage:
FHA/VA and other government-guaranteed
loans (2)(3)(4)		$	-	$	9,733	$	81,055	$	90,788	$	-	$	62,782	$	153,570	$	81,055
Other residential mortgage loans (4)			-		78,336		199,078		277,414		98,494		2,481,709		2,857,617		18,371
Commercial:
Commercial and Industrial loans			22,217		7,445		143,928		173,590		-		2,305,847		2,479,437		21,381
Commercial mortgage loans (4)			-		15,482		171,281		186,763		3,393		1,475,631		1,665,787		22,808
Construction:
Land (4)			-		210		15,264		15,474		-		40,447		55,921		234
Construction-commercial (4)			-		-		-		-		-		24,562		24,562		-
Construction-residential (4)			-		-		14,324		14,324		-		28,673		42,997		-
Consumer:
Auto loans			77,385		19,665		22,276		119,326		-		941,456		1,060,782		-
Finance leases			8,751		2,734		5,245		16,730		-		215,396		232,126		-
Other consumer loans			9,801		6,054		18,671		34,526		717		654,394		689,637		3,377
Total loans held for investment		$	118,154	$	139,659	$	671,122	$	928,935	$	102,604	$	8,230,897	$	9,262,436	$	147,226
____________
(1)	Includes non-performing loans and accruing loans which are contractually delinquent 90 days or more (i.e. FHA/VA guaranteed loans and credit cards). Credit card loans continue to accrue finance charges and fees until charged-off at 180 days.
(2)	It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as past-due loans 90 days and still accruing as opposed to non-performing loans since the principal repayment is insured. These balances include $40.4 million of residential mortgage loans insured by the FHA or guaranteed by the VA, which are over 18 months delinquent, and are no longer accruing interest as of December 31, 2014.
(3)	As of December 31, 2014, includes $9.3 million of defaulted loans collateralizing GNMA securities for which the Corporation has an unconditional option (but not an obligation) to repurchase  the defaulted loans.
(4)	According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the  Federal Reserve Board, residential mortgage, commercial mortgage, and construction loans are considered past due when the borrower is in arrears two or more monthly payments.  FHA/VA government guaranteed loans, other residential mortgage loans, commercial mortgage loans, land loans and construction-residential loans past due 30-59 days as of December 31, 2014 amounted to $14.0 million, $189.1 million, $20.8 million, $0.8 million and $1.0 million , respectively.

24

The Corporation’s credit quality indicators by loan type as of March 31, 2015 and December 31, 2014 are summarized below:
		Commercial Credit Exposure-Credit Risk Profile Based on Creditworthiness Category:
		Substandard		Doubtful		Loss		Total Adversely Classified (1)		Total Portfolio
March 31, 2015
(In thousands)
Commercial mortgage		$	227,195	$	-	$	-	$	227,195	$	1,649,263
Construction:
Land			15,930		-		-		15,930		54,190
Construction-commercial			11,790		-		-		11,790		27,456
Construction-residential			12,265		808		-		13,073		42,794
Commercial and Industrial			229,112		6,293		789		236,194		2,442,867
		Commercial Credit Exposure-Credit Risk Profile Based on Creditworthiness Category:
		Substandard		Doubtful		Loss		Total Adversely Classified (1)		Total Portfolio
December 31, 2014
(In thousands)
Commercial mortgage		$	273,027	$	897	$	-	$	273,924	$	1,665,787
Construction:
Land			16,915		-		-		16,915		55,921
Construction-commercial			11,790		-		-		11,790		24,562
Construction-residential			13,548		776		-		14,324		42,997
Commercial and Industrial			234,926		4,884		801		240,611		2,479,437
_________
(1)	Excludes $54.6 million ($7.8 million land, $39.1 million construction-commercial, $0.9 million construction-residential, and $ 6.8 million commercial mortgage) as of March 31, 2015 and December 31, 2014, of non-performing loans held for sale.

The Corporation considers a loan as adversely classified if its risk rating is Substandard, Doubtful or Loss.   These categories are defined as follows:

Substandard- A Substandard asset is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful- Doubtful classifications have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions and values, highly questionable and improbable. A Doubtful classification may be appropriate in cases where significant risk exposures are perceived, but Loss cannot be determined because of specific reasonable pending factors, which may strengthen the credit in the near term.

Loss- Assets classified Loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future. There is little or no prospect for near term improvement and no realistic strengthening action of significance pending.

25

March 31, 2015		Consumer Credit Exposure-Credit Risk Profile Based on Payment Activity
		Residential Real-Estate				Consumer
		FHA/VA/ Guaranteed (1)		Other residential loans		Auto		Finance Leases		Other Consumer
(In thousands)
Performing		$	155,662	$	2,825,774	$	1,009,327	$	227,204	$	665,504
Purchased Credit-Impaired (2)			-		177,601		-		-		234
Non-performing			-		172,583		19,043		2,979		12,891
Total		$	155,662	$	3,175,958	$	1,028,370	$	230,183	$	678,629
(1)	It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as past due loans 90 days and still accruing as opposed to non-performing loans since the principal repayment is insured. These balances include $30.1 million of  residential mortgage loans insured by the FHA or guaranteed by the VA, which are over 18 months delinquent, and are no longer accruing interest as of March 31, 2015.
(2)	PCI loans are excluded from non-performing statistics due to the application of the accretion method, under which these loan will accrete interest income over the remaining life of the loans using estimated cash flow analysis.
December 31, 2014		Consumer Credit Exposure-Credit Risk Profile Based on Payment Activity
			Residential Real-Estate			Consumer
		FHA/VA/ Guaranteed (1)		Other residential loans		Auto		Finance Leases		Other Consumer
(In thousands)
Performing		$	153,570	$	2,578,416	$	1,038,506	$	226,881	$	673,626
Purchased Credit-Impaired (2)			-		98,494		-		-		717
Non-performing			-		180,707		22,276		5,245		15,294
Total		$	153,570	$	2,857,617	$	1,060,782	$	232,126	$	689,637
(1)	It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as past due loans 90 days and still accruing as opposed to non-performing loans since the principal repayment is insured. These balances include $40.4 million of  residential mortgage loans insured by the FHA or guaranteed by the VA, which are over 18 months delinquent, and are no longer accruing interest as of December 31, 2014.
(2)	PCI loans are excluded from non-performing statistics due to the application of the accretion method, under which these loan will accrete interest income over the remaining life of the loans using estimated cash flow analysis.

26

The following tables present information about impaired loans, excluding purchased credit-impaired loans, which are reported separately as discussed below:
Impaired Loans
(In thousands)
	Recorded Investment		Unpaid Principal Balance		Related Specific Allowance		Average Recorded Investment		Interest Income Recognized On Accrual Basis		Interest Income Recognized On Cash Basis
As of March 31, 2015
With no related allowance recorded:
FHA/VA-Guaranteed loans	$	-	$	-	$	-	$	-	$	-	$	-
Other residential mortgage loans		62,337		68,263		-		63,040		199		79
Commercial:
Commercial mortgage loans		100,797		120,956		-		101,196		406		425
Commercial and Industrial Loans		32,080		36,975		-		33,802		18		200
Construction:
Land		1,473		4,726		-		1,473		-		-
Construction-commercial		-		-		-		-		-		-
Construction-residential		6,762		9,346		-		6,943		41		-
Consumer:
Auto loans		562		562		-		562		10		-
Finance leases		-		-		-		-		-		-
Other consumer loans		3,229		4,634		-		3,268		10		26
	$	207,240	$	245,462	$	-	$	210,284	$	684	$	730
With an allowance recorded:
FHA/VA-Guaranteed loans	$	-	$	-	$	-	$	-	$	-	$	-
Other residential mortgage loans		367,189		416,579		14,862		368,999		4,224		414
Commercial:
Commercial mortgage loans		123,568		143,090		13,238		124,701		475		279
Commercial and Industrial Loans		194,576		227,417		24,871		196,896		1,950		43
Construction:
Land		9,355		13,181		1,220		9,413		15		9
Construction-commercial		11,790		11,790		1,145		11,790		128		-
Construction-residential		8,213		8,917		1,016		8,202		3		-
Consumer:
Auto loans		16,986		16,986		3,058		17,472		328		-
Finance leases		2,053		2,053		186		2,137		48		-
Other consumer loans		14,011		14,259		2,544		14,266		382		3
	$	747,741	$	854,272	$	62,140	$	753,876	$	7,553	$	748
Total:
FHA/VA-Guaranteed loans	$	-	$	-	$	-	$	-	$	-	$	-
Other residential mortgage loans		429,526		484,842		14,862		432,039		4,423		493
Commercial:
Commercial mortgage loans		224,365		264,046		13,238		225,897		881		704
Commercial and Industrial Loans		226,656		264,392		24,871		230,698		1,968		243
Construction:
Land		10,828		17,907		1,220		10,886		15		9
Construction-commercial		11,790		11,790		1,145		11,790		128		-
Construction-residential		14,975		18,263		1,016		15,145		44		-
Consumer:
Auto loans		17,548		17,548		3,058		18,034		338		-
Finance leases		2,053		2,053		186		2,137		48		-
Other consumer loans		17,240		18,893		2,544		17,534		392		29
	$	954,981	$	1,099,734	$	62,140	$	964,160	$	8,237	$	1,478

27

Impaired Loans
(In thousands)
	Recorded Investment		Unpaid Principal Balance		Related Specific Allowance		Average Recorded Investment
As of December 31, 2014
With no related allowance recorded:
FHA/VA-Guaranteed loans	$	-	$	-	$	-	$	-
Other residential mortgage loans		74,177		80,522		-		75,711
Commercial:
Commercial mortgage loans		109,271		132,170		-		113,674
Commercial and Industrial Loans		41,131		47,647		-		42,011
Construction:
Land		2,994		6,357		-		3,030
Construction-commercial		-		-		-		-
Construction-residential		7,461		10,100		-		8,123
Consumer:
Auto loans		-		-		-		-
Finance leases		-		-		-		-
Other consumer loans		3,778		5,072		-		3,924
	$	238,812	$	281,868	$	-	$	246,473
With an allowance recorded:
FHA/VA-Guaranteed loans	$	-	$	-	$	-	$	-
Other residential mortgage loans		350,067		396,203		10,854		357,129
Commercial:
Commercial mortgage loans		101,467		116,329		14,289		104,191
Commercial and Industrial Loans		195,240		226,431		21,314		198,930
Construction:
Land		9,120		12,821		794		10,734
Construction-commercial		11,790		11,790		790		11,867
Construction-residential		8,102		8,834		993		8,130
Consumer:
Auto loans		16,991		16,991		2,787		18,504
Finance leases		2,181		2,181		253		2,367
Other consumer loans		11,637		12,136		3,131		12,291
	$	706,595	$	803,716	$	55,205	$	724,143
Total:
FHA/VA-Guaranteed loans	$	-	$	-	$	-	$	-
Other residential mortgage loans		424,244		476,725		10,854		432,840
Commercial:
Commercial mortgage loans		210,738		248,499		14,289		217,865
Commercial and Industrial Loans		236,371		274,078		21,314		240,941
Construction:
Land		12,114		19,178		794		13,764
Construction-commercial		11,790		11,790		790		11,867
Construction-residential		15,563		18,934		993		16,253
Consumer:
Auto loans		16,991		16,991		2,787		18,504
Finance leases		2,181		2,181		253		2,367
Other consumer loans		15,415		17,208		3,131		16,215
	$	945,407	$	1,085,584	$	55,205	$	970,616
Interest income of approximately $7.6 million ($5.9 million accrual basis and $1.7 million cash basis) was recognized on impaired loans for the first quarter of 2014.

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The following table shows the activity for impaired loans and the related specific reserve during  the first quarter of 2015 and 2014:
	Quarter ended
	March 31, 2015		March 31, 2014
Impaired Loans:	(In thousands)
Balance at beginning of period	$	945,407	$	919,112
Loans determined impaired during the period		62,933		54,277
Charge-offs		(11,715)		(32,039)
Loans sold, net of charge-offs		(1,137)		-
Increases to impaired loans- additional disbursements		519		625
Foreclosures		(9,952)		(4,006)
Loans no longer considered impaired		(9,898)		(3,728)
Paid in full or partial payments		(21,176)		(54,853)
Balance at end of period	$	954,981	$	879,388

	Quarter ended
	March 31, 2015		March 31, 2014
Specific Reserve:	(In thousands)
Balance at beginning of period	$	55,205	$	102,601
Provision for loan losses		18,650		14,454
Charge-offs		(11,715)		(32,039)
Balance at end of period	$	62,140	$	85,016

Purchased Credit Impaired (“PCI”) Loans

   As described in Note 2, Business Combination, the Corporation acquired PCI loans as part of the Doral Bank transaction and in previously completed asset acquisitions which are accounted under ASC 310-30. These previous transactions include the acquisition from Doral Financial in the second quarter of 2014 of all its rights, title and interest in first and second residential mortgages loans in full satisfaction of secured borrowings owed by such entity to FirstBank, and the acquisition in 2012 of a FirstBank-branded credit card loans portfolio from FIA Card Services (“FIA”).

Under ASC 310-30, the acquired PCI loans were aggregated into pools based on similar characteristics (i.e. delinquency status, loan terms). Each loan pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows. Since the loans are accounted for by the Corporation  under ASC 310-30, they are not considered non-performing and will continue to have an accretable yield as long as there is a reasonable expectation about the timing and amount of cash flows expected to be collected. The Corporation recognizes additional losses for this portfolio when it is probable that the Corporation will be unable to collect all cash flows expected as of the acquisition date plus additional cash flows expected to be collected arising from changes in estimates after the acquisition date.      

The carrying amount of PCI loans follows:
		March 31,		December 31,
		2015		2014
	(In thousands)
Residential mortgage loans	$	177,601	$	98,494
Commercial mortgage loans		3,279		3,393
Credit Cards		234		717
	$	181,114	$	102,604

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	The following tables present PCI loans by past due status as of March 31, 2015 and December 31, 2014:
As of March 31, 2015		30-59 Days		60-89 Days		90 days or more		Total Past Due				Total PCI loans
										Current
		(In thousands)
Residential mortgage loans (1)		$	-	$	13,572	$	15,775	$	29,347	$	148,254	$	177,601
Commercial mortgage loans (1)			-		130		653		783		2,496		3,279
Credit Cards			22		-		22		44		190		234
		$	22	$	13,702	$	16,450	$	30,174	$	150,940	$	181,114
_____________
(1)	According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the  Federal Reserve Board, residential mortgage and commercial mortgage loans are considered past due when the borrower is in arrears two or more monthly payments. PCI residential mortgage loans and commercial mortgage loans past due 30-59 days as of March 31, 2015 amounted to $32.0 million and $0.3 million, respectively.
As of December 31, 2014		30-59 Days		60-89 Days		90 days or more		Total Past Due				Total PCI loans
										Current
		(In thousands)
Residential mortgage loans (1)		$	-	$	12,571	$	15,176	$	27,747	$	70,747	$	98,494
Commercial mortgage loans (1)			-		356		443		799		2,594		3,393
Credit Cards			47		25		42		114		603		717
		$	47	$	12,952	$	15,661	$	28,660	$	73,944	$	102,604
_____________
(1)	According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the  Federal Reserve Board, residential mortgage and commercial mortgage loans are considered past due when the borrower is in arrears two or more monthly payments. PCI residential mortgage loans and commercial mortgage loans past due 30-59 days as of December 31, 2014 amounted to $16.6 million and $0.8 million, respectively.

Initial Fair Value and Accretable Yield of PCI Loans

At acquisition, the Corporation estimated the cash flows the Corporation expected to collect on PCI loans. Under the accounting guidance for PCI loans, the difference between the contractually required payments and the cash flows expected to be collected at acquisition is referred to as the nonaccretable difference. This difference is neither accreted into income nor recorded on the Corporation’s consolidated statement of financial condition. The excess of cash flows expected to be collected over the estimated fair value is referred to as the accretable yield and is recognized in interest income over the remaining life of the loans, using the effective-yield method.

The following table presents acquired loans from Doral Bank in the first quarter of 2015 accounted for pursuant to ASC 310-30 as of the acquisition date:
		(In thousands)
Contractually- required principal and interest		$	166,947
Less: Nonaccretable difference			(48,739)
Cash flows expected to be collected			118,208
Less: Accretable yield			(38,319)
Fair value of loans acquired in 2015 (1)		$	79,889
(1)	Amounts are preliminary estimates based on the best information available at the acquisition date and adjustments in future quarters may occur up to one year from the date of acquisition.

The cash flows expected to be collected consider the estimated remaining life of the underlying loans and include the effects of estimated prepayments.

Changes in accretable yield of acquired loans

30

Subsequent to acquisition, the Corporation is required to periodically evaluate its estimate of cash flows expected to be collected. These evaluations, performed quarterly, require the continued use of key assumptions and estimates, similar to the initial estimate of fair value. Subsequent changes in the estimated cash flows expected to be collected may result in changes in the accretable yield and nonaccretable difference or reclassifications from nonaccretable yield to accretable. Increases in the cash flows expected to be collected will generally result in an increase in interest income over the remaining life of the loan or pool of loans. Decreases in expected cash flows due to further credit deterioration will generally result in an impairment charge recognized in the Corporation’s provision for loan and lease losses, resulting in an increase to the allowance for loan losses. During the first quarter of 2015 and 2014, the Corporation did not record charges to the provision for loan losses related to PCI loans.

Changes in the accretable yield of PCI loans for the quarters ended March 31, 2015 and 2014 were as follows:
	March 31, 2015		March 31, 2014
	(In thousands)
Balance at beginning of period	$	82,460	$	-
Additions (accretable yield at acquisition
of loans from Doral Bank)		38,319		-
Accretion recognized in earnings		(2,277)		-
Balance at end of period	$	118,502	$	-

The outstanding principal balance of PCI loans, including amounts charged off by the Corporation, amounted to $226.7 million as of March 31, 2015 (December 31, 2014- $135.5 million).

Changes in the carrying amount of loans accounted for pursuant to ASC 310-30 follows:
	Quarter ended
	March 31, 2015
	(In thousands)
Balance at beginning of period	$	102,604
Additions		79,889
Accretion		2,277
Collections		(3,656)
Ending balance	$	181,114

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Purchases and Sales of Loans

As described in Note 2, Business Combination, on February 27, 2015, FirstBank acquired $324.8 million in principal of loans, primarily residential mortgage loans through an alliance with other co-bidders on the failed Doral Bank, a portion of which was accounted as PCI loans as described above. Pursuant to the terms of the purchase and assumption agreement, FirstBank purchased the loans at an aggregate discount of 9.0%, or approximately $29 million through an FDIC facilitated transaction. The transaction was accounted under ASC Topic 820, which requires all recognized assets acquired and liabilities assumed in a business combination to be measured at their acquisition-date fair values. The fair value of the loans acquired in this transaction was $311.4 million at acquisition date. 

In addition, during the first quarter of 2015, the Corporation purchased $23.8 million of residential mortgage loans consistent with a strategic program established by the Corporation in 2005 to purchase ongoing residential mortgage loan production from mortgage bankers in Puerto Rico and purchased a $21.1 million participation on a commercial loan. Generally, the loans purchased from mortgage bankers were conforming residential mortgage loans. Purchases of conforming residential mortgage loans provide the Corporation the flexibility to retain or sell the loans, including through securitization transactions, depending upon the Corporation’s interest rate risk management strategies. When the Corporation sells such loans, it generally keeps the servicing of the loans.

In the ordinary course of business, the Corporation sells residential mortgage loans (originated or purchased) to GNMA and government-sponsored entities (“GSEs”) such as Fannie Mae (“FNMA”) and Freddie Mac (“FHLMC”), generally securitize the transferred loans into mortgage-backed securities for sale into the secondary market. The Corporation sold approximately $38.4 million of performing residential mortgage loans in the secondary market to FNMA and FHLMC during the first quarter of 2015.  Also, the Corporation securitized $46.9 million of FHA/VA mortgage loans into GNMA mortgage-backed securities during the first quarter of 2015. The Corporation’s continuing involvement in these loan sales consists primarily of servicing the loans. In addition, the Corporation agreed to repurchase loans when it breaches any of the representations and warranties included in the sale agreement. These representations and warranties are consistent with the GSEs’ selling and servicing guidelines (i.e., ensuring that the mortgage was properly underwritten according to established guidelines).

For loans sold to GNMA, the Corporation holds an option to repurchase individual delinquent loans issued on or after January 1, 2003 when the borrower fails to make any payment for three consecutive months. This option gives the Corporation the ability, but not the obligation, to repurchase the delinquent loans at par without prior authorization from GNMA.

Under ASC Topic 860, Transfer and Servicing, once the Corporation has the unilateral ability to repurchase the delinquent loan, it is considered to have regained effective control over the loan and is required to recognize the loan and a corresponding repurchase liability on the balance sheet regardless of the Corporation’s intent to repurchase the loan.

During the first quarter of 2015, the Corporation repurchased pursuant to its repurchase option with GNMA $3.0 million of loans previously sold to GNMA.  The principal balance of these loans is fully guaranteed and the risk of loss related to repurchases is generally limited to the difference between the delinquent interest payment advanced to GNMA computed at the loan’s interest rate and the interest payments reimbursed by FHA, which are computed at a pre-determined debenture rate.  Repurchases of GNMA loans allow the Corporation, among other things, to maintain acceptable delinquency rates on outstanding GNMA pools and remain as a seller and servicer in good standing with GNMA.  The Corporation generally remediates any breach of representations and warranties related to the underwriting of such loans according to established GNMA guidelines without incurring losses.  The Corporation does not maintain a liability for estimated losses as a result of breaches in representations and warranties.

Loan sales to FNMA and FHLMC are without recourse in relation to the future performance of the loans.  The Corporation repurchased at par loans previously sold to FNMA and FHLMC in the amount of $0.2 million during the first quarter of 2015. The Corporation’s risk of loss with respect to these loans is also minimal as these repurchased loans are generally performing loans with documentation deficiencies. No losses related to breaches of representations and warranties were incurred in the first quarter of 2015.  Historically, losses experienced on these loans have been immaterial. As a consequence, as of March 31, 2015, the Corporation does not maintain a liability for estimated losses on loans expected to be repurchased as a result of breaches in loan and servicer representations and warranties.

In addition, the Corporation sold $3.5 million of non-performing commercial and industrial loans in the first quarter of 2015.

Loan Portfolio Concentration

The Corporation’s primary lending area is Puerto Rico.  The Corporation’s banking subsidiary, First Bank, also lends in the USVI and BVI markets and in the United States (principally in the state of Florida).  Of the total gross loans held for investment of $9.5 billion as of March 31, 2015, approximately 83% have credit risk concentration in Puerto Rico, 11% in the United States, and 6% in the USVI and BVI.

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    As of March 31, 2015, the Corporation had $335.7 million of credit facilities granted to the Puerto Rico government, its municipalities and public corporations, of which $321.7 million was outstanding, compared to $308.0 million outstanding as of December 31, 2014. In addition, the outstanding balance of facilities granted to the government of the Virgin Islands amounted to $61.0 million as of March 31, 2015, compared to $57.7 million as of December 31, 2014.  Approximately $201.3 million of the granted credit facilities outstanding consists of loans to municipalities in Puerto Rico. Municipal debt exposure is secured by ad valorem taxation without limitation as to rate or amount on all taxable property within the boundaries of each municipality. The good faith, credit, and unlimited taxing power of the applicable municipality have been pledged to the repayment of all outstanding bonds and notes. Approximately $24.5 million consists of loans to units of the central government, and approximately $95.9 million consists of loans to public corporations that generally receive revenues from the rates they charge for services or products, such as electric power services, including a $75.0 million credit facility extended to the Puerto Rico Electric Power Authority (“PREPA”) for fuel purchases that have priority over senior bonds and other debt. The $75 million outstanding under this credit facility was placed in non-accrual status in the first quarter of 2015 since the government agency has not yet completed its restructuring plan.  Major public corporations have varying degrees of independence from the central government and many receive appropriations or other payments from the Puerto Rico’s government general fund. Debt issued by the central government can either carry the full faith, credit and taxing power of the Commonwealth of Puerto Rico or represent an obligation that is subject to annual budget appropriations.

    Furthermore, the Corporation had $132.5 million outstanding as of March 31, 2015 in loans to the hotel industry in Puerto Rico guaranteed by the Puerto Rico Tourism Development Fund (“TDF”), compared to $133.3 million as of December 31, 2014. The TDF is a subsidiary of the GDB that works with private-sector financial institutions to structure financings for new hospitality projects.

  As disclosed in Note 5, S&P, Moody’s and Fitch downgraded the credit rating of the Commonwealth of Puerto Rico’s debt to non-investment grade categories. The Corporation cannot predict at this time the impact that the current fiscal situation of the Commonwealth of Puerto Rico and the various legislative and other measures adopted and to be adopted by the Puerto Rico government in response to such fiscal situation will have on the Puerto Rico economy and on the Corporation’s financial condition and results of operations.

Troubled Debt Restructurings

The Corporation provides homeownership preservation assistance to its customers through a loss mitigation program in Puerto Rico that is similar to the U.S. government’s Home Affordable Modification Program guidelines. Depending upon the nature of borrowers’ financial condition, restructurings or loan modifications through this program as well as other restructurings of individual commercial, commercial mortgage, construction, and residential mortgage loans in the U.S. mainland fit the definition of a TDR. A restructuring of a debt constitutes a TDR if the creditor for economic or legal reasons related to the debtor’s financial difficulties grants a concession to the debtor that it would not otherwise consider. Modifications involve changes in one or more of the loan terms that bring a defaulted loan current and provide sustainable affordability. Changes may include the refinancing of any past-due amounts, including interest and escrow, the extension of the maturity of the loan and modifications of the loan rate. As of March 31, 2015, the Corporation’s total TDR loans of $705.1 million consisted of $354.1 million of residential mortgage loans, $166.7 million of commercial and industrial loans, $136.8 million of commercial mortgage loans, $12.5 million of construction loans, and $35.0 million of consumer loans. Outstanding unfunded commitments on TDR loans amounted to $47 thousand as of March 31, 2015.

The Corporation’s loss mitigation programs for residential mortgage and consumer loans can provide for one or a combination of the following: movement of interest past due to the end of the loan, extension of the loan term, deferral of principal payments and reduction of interest rates either permanently or for a period of up to four years (increasing back in step-up rates). Additionally, in certain cases, the restructuring may provide for the forgiveness of contractually due principal or interest. Uncollected interest is added to the end of the loan term at the time of the restructuring and not recognized as income until collected or when the loan is paid off. These programs are available only to those borrowers who have defaulted, or are likely to default, permanently on their loan and would lose their homes in the foreclosure action absent some lender concession. Nevertheless, if the Corporation is not reasonably assured that the borrower will comply with its contractual commitment, properties are foreclosed.

   Prior to permanently modifying a loan, the Corporation may enter into trial modifications with certain borrowers. Trial modifications generally represent a six-month period during which the borrower makes monthly payments under the anticipated modified payment terms prior to a formal modification. Upon successful completion of a trial modification, the Corporation and the borrower enter into a permanent modification. TDR loans that are participating in or that have been offered a binding trial modification are classified as TDRs when the trial offer is made and continue to be classified as TDR regardless of whether the borrower enters into a permanent modification. As of March 31, 2015, we classified an additional $11.5 million of residential mortgage loans as TDRs that were participating in or had been offered a trial modification.

For the commercial real estate, commercial and industrial, and construction loan portfolios, at the time of a restructuring, the Corporation determines, on a loan-by-loan basis, whether a concession was granted for economic or legal reasons related to the borrower’s financial difficulty. Concessions granted for commercial loans could include: reductions in interest rates to rates that are considered below market; extension of repayment schedules and maturity dates beyond original contractual terms; waivers of borrower covenants; forgiveness of principal or interest; or other contract changes that would be considered a concession. The

33

Corporation mitigates loan defaults for its commercial loan portfolios through its collection function. The function’s objective is to minimize both early stage delinquencies and losses upon default of commercial loans. In the case of the commercial and industrial,  commercial mortgage, and construction loan portfolios, the Corporation’s Special Asset Group (“SAG”) focuses on strategies for the accelerated reduction of non-performing assets through note sales, short sales, loss mitigation programs, and sales of OREO.  In addition to the management of the resolution process for problem loans, the SAG oversees collection efforts for all loans to prevent migration to the non-performing and/or adversely classified status.  The SAG utilizes relationship officers, collection specialists, and attorneys. In the case of residential construction projects, the workout function monitors project specifics, such as project management and marketing, as deemed necessary. The SAG utilizes its collections infrastructure of workout collection officers, credit work-out specialists, in-house legal counsel, and third-party consultants. In the case of residential construction projects and large commercial loans, the function also utilizes third-party specialized consultants to monitor the residential and commercial construction projects in terms of construction, marketing and sales, and assist with the restructuring of large commercial loans.

In addition, the Corporation extends, renews, and restructures loans with satisfactory credit profiles. Many commercial loan facilities are structured as lines of credit, which are mainly one year in term and therefore are required to be renewed annually. Other facilities may be restructured or extended from time to time based upon changes in the borrower’s business needs, use of funds, timing of completion of projects, and other factors. If the borrower is not deemed to have financial difficulties, extensions, renewals, and restructurings are done in the normal course of business and not considered concessions, and the loans continue to be recorded as performing.

Selected information on TDRs that includes the recorded investment by loan class and modification type is summarized in the following tables. This information reflects all TDRs:
		March 31, 2015
(In thousands)		Interest rate below market		Maturity or term extension		Combination of reduction in interest rate and extension of maturity		Forgiveness of principal and/or interest		Other (1)		Total
Troubled Debt Restructurings:
Non- FHA/VA Residential Mortgage loans		$	26,039	$	5,206	$	281,824	$	-	$	41,025	$	354,094
Commercial Mortgage Loans			26,952		12,685		73,956		-		23,187		136,780
Commercial and Industrial Loans			4,431		78,171		30,830		3,057		50,247		166,736
Construction Loans:
Land			-		201		1,680		-		596		2,477
Construction-residential			6,154		378		3,095		-		433		10,060
Consumer Loans - Auto			-		324		10,736		-		6,487		17,547
Finance Leases			-		285		1,768		-		-		2,053
Consumer Loans - Other			37		317		12,774		379		1,869		15,376
Total Troubled Debt Restructurings (2)		$	63,613	$	97,567	$	416,663	$	3,436	$	123,844	$	705,123
(1)	Other concessions granted by the Corporation include deferral of principal and/or interest payments for a period longer than what would be considered insignificant, payment plans under judicial stipulation, or a combination of the concessions listed in the table.
(2)	Excludes TDRs held for sale amounting to $45.7 million as of March 31, 2015.

		December 31, 2014
(In thousands)		Interest rate below market		Maturity or term extension		Combination of reduction in interest rate and extension of maturity		Forgiveness of principal and/or interest		Other (1)		Total
Troubled Debt Restructurings:
Non- FHA/VA Residential Mortgage loans		$	24,850	$	5,859	$	283,317	$	-	$	35,749	$	349,775
Commercial Mortgage Loans			29,881		12,737		72,493		-		12,655		127,766
Commercial and Industrial Loans			7,533		80,642		31,553		3,074		49,124		171,926
Construction Loans:
Land			-		202		1,732		-		536		2,470
Construction-residential			6,154		337		3,112		-		434		10,037
Consumer Loans - Auto			-		380		10,363		-		6,248		16,991
Finance Leases			-		376		1,805		-		-		2,181
Consumer Loans - Other			37		129		10,812		443		1,886		13,307
Total Troubled Debt Restructurings (2)		$	68,455	$	100,662	$	415,187	$	3,517	$	106,632	$	694,453
(1)	Other concessions granted by the Corporation include deferral of principal and/or interest payments for a period longer than what would be considered insignificant, payment plans under judicial stipulation or a combination of the concessions listed in the table.
(2)	Excludes TDRs held for sale amounting to $45.7 million as of December 31, 2014.

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The following table presents the Corporation's TDR activity
(In thousands)	Quarter Ended
	March 31, 2015		March 31, 2014
Beginning Balance of TDRs	$	694,453	$	630,258
New TDRs		31,601		19,935
Increases to existing TDRs - additional disbursements		335		27
Charge-offs post modification		(3,781)		(7,982)
Foreclosures		(7,156)		(1,074)
Paid-off, partial payments, and other		(10,329)		(18,844)
Ending balance of TDRs	$	705,123	$	622,320

TDRs are classified as either accrual or nonaccrual loans. A loan on nonaccrual and restructured as a TDR will remain on nonaccrual status until the borrower has proven the ability to perform under the modified structure, generally for a minimum of six months, and there is evidence that such payments can and are likely to continue as agreed. Performance prior to the restructuring or significant events that coincide with the restructuring are included in assessing whether the borrower can meet the new terms and may result in the loans being returned to accrual at the time of the restructuring or after a shorter performance period. If the borrower’s ability to meet the revised payment schedule is uncertain, the loan remains classified as a nonaccrual loan. Loan modifications increase the Corporation’s interest income by returning a non-performing loan to performing status, if applicable, increase cash flows by providing for payments to be made by the borrower, and avoid increases in foreclosure and OREO costs. The Corporation continues to consider a modified loan as an impaired loan for purposes of estimating the allowance for loan and lease losses. A TDR loan that specifies an interest rate that at the time of the restructuring is greater than or equal to the rate the Corporation is willing to accept for a new loan with comparable risk may not be reported as a TDR, or as impaired loan in the calendar years subsequent to the restructuring if it is in compliance with its modified terms. The Corporation did not remove loans from the TDR classification during the first quarter of 2015.

35

The following table provides a breakdown between the accrual and nonaccrual status of TDRs:
(In thousands)		March 31, 2015
		Accrual		Nonaccrual (1)(2)		Total TDRs
Non-FHA/VA Residential Mortgage loans		$	273,890	$	80,204	$	354,094
Commercial Mortgage Loans			75,541		61,239		136,780
Commercial and Industrial Loans			55,394		111,342		166,736
Construction Loans:
Land			779		1,698		2,477
Construction-residential			3,472		6,588		10,060
Consumer Loans - Auto			11,011		6,536		17,547
Finance Leases			1,875		178		2,053
Consumer Loans - Other			12,237		3,139		15,376
Total Troubled Debt Restructurings		$	434,199	$	270,924	$	705,123
(1)	Included in non-accrual loans are $121.9 million in loans that are performing under the terms of a restructuring agreement but are reported  in non-accrual status until the restructured loans meet the criteria of sustained payment performance under the revised terms for reinstatement to accrual status and there is no doubt about full collectability.
(2)	Excludes non-accrual TDRs held for sale with a carrying value of $45.7 million as of March 31, 2015.

(In thousands)		December 31, 2014
		Accrual		Nonaccrual (1)(2)		Total TDRs
Non-FHA/VA Residential Mortgage loans		$	266,810	$	82,965	$	349,775
Commercial Mortgage Loans			69,374		58,392		127,766
Commercial and Industrial Loans			131,544		40,382		171,926
Construction Loans:
Land			834		1,636		2,470
Construction-residential			3,448		6,589		10,037
Consumer Loans - Auto			10,558		6,433		16,991
Finance Leases			1,926		255		2,181
Consumer Loans - Other			10,146		3,161		13,307
Total Troubled Debt Restructurings		$	494,640	$	199,813	$	694,453
(1)	Included in non-accrual loans are $52.8 million in loans that are performing under the terms of a restructuring agreement but are reported  in non-accrual status until the restructured loans meet the criteria of sustained payment performance under the revised terms for reinstatement to  accrual status and there is no doubt about full collectability.
(2)	Excludes non-accrual TDRs held for sale with a carrying value of $45.7 million as of December 31, 2014.

TDRs exclude restructured residential mortgage loans that are guaranteed by the U.S. federal government (i.e., FHA/VA loans) totaling $65.7 million. The Corporation excludes FHA/VA guaranteed loans from TDRs given that, in the event that the borrower defaults on the loan, the principal and interest (debenture rate) are guaranteed by the U.S. government; therefore, the risk of loss on these types of loans is very low. The Corporation does not consider loans with U.S. federal government guarantees to be impaired loans for the purpose of calculating the allowance for loan and lease losses.

36

Loans modifications that are considered TDRs and were completed during the first quarter of 2015 and 2014 were as follows:
(Dollars in thousands)	Quarter ended March 31, 2015
	Number of contracts	Pre-modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings:
Non-FHA/VA Residential Mortgage loans	81	$	11,495	$	11,265
Commercial Mortgage Loans	8		12,821		12,931
Commercial and Industrial Loans	1		1,681		1,681
Construction Loans:
Land	1		64		64
Consumer Loans - Auto	146		2,173		2,130
Finance Leases	8		233		184
Consumer Loans - Other	377		3,391		3,346
Total Troubled Debt Restructurings	622	$	31,858	$	31,601

(Dollars in thousands)	Quarter ended March 31, 2014
	Number of contracts	Pre-modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings:
Non-FHA/VA Residential Mortgage loans	47	$	7,709	$	7,711
Commercial Mortgage Loans	3		834		837
Commercial and Industrial Loans	5		7,964		7,630
Consumer Loans - Auto	117		1,605		1,605
Finance Leases	10		193		193
Consumer Loans - Other	429		1,959		1,959
Total Troubled Debt Restructurings	611	$	20,264	$	19,935

Recidivism, or the borrower defaulting on its obligation pursuant to a modified loan, results in the loan once again becoming a non-performing loan. Recidivism occurs at a notably higher rate than do defaults on new origination loans, so modified loans present a higher risk of loss than do new origination loans. The Corporation considers a loan to have defaulted if the borrower has failed to make payments of either principal, interest, or both for a period of 90 days or more.

Loan modifications considered TDRs that defaulted during the quarters ended March 31, 2015 and March 31, 2014 and had become TDRs during the 12-month period preceding the default date, were as follows:
	Quarter ended March 31,
(Dollars in thousands)	2015			2014
	Number of contracts	Recorded Investment		Number of contracts	Recorded Investment
Non-FHA/VA Residential Mortgage loans	12	$	1,773	14	$	2,552
Commercial and Industrial Loans	4		5,745	-		-
Consumer Loans - Auto	2		8	4		39
Consumer Loans - Other	53		229	45		176
Finance Leases	1		15	-		-
Total	72	$	7,770	63	$	2,767

For certain TDRs, the Corporation splits the loans into two new notes, A and B notes. The A note is restructured to comply with the Corporation’s lending standards at current market rates, and is tailored to suit the customer’s ability to make timely interest and principal payments. The B note includes the granting of the concession to the borrower and varies by situation. The B note is charged off but the borrower’s obligation is not forgiven and any payments collected are accounted for as recoveries. At the time of restructuring, the A note is identified and classified as a TDR. If the loan performs for at least six months according to the modified terms, the A note may be returned to accrual status. The borrower’s payment performance prior to the restructuring is included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of the restructuring. In the periods following the calendar year in which a loan was restructured, the A Note may no longer be reported as a

37

TDR if it is on accrual status, is in compliance with its modified terms, and yields a market rate (as determined and documented at the time of the restructuring).

The recorded investment in loans held for investment restructured using the A/B note restructure workout strategy was approximately $42.9 million at March 31, 2015. The following table provides additional information about the volume of this type of loan restructuring and the effect on the allowance for loan and lease losses in the first quarter of 2015 and 2014:

(In thousands)	March 31, 2015			March 31, 2014
Principal balance deemed collectible at end of period	$	42,907	$	78,833
Amount charged off	$	-	$	-
(Reductions) charges to the provision for loan losses	$	(24)	$	(15)
Allowance for loan losses at end of period	$	707	$	1,547

Of the loans comprising the $42.9 million that have been deemed collectible, approximately $41.2 million were placed in accruing status as the borrowers have exhibited a period of sustained performance. These loans continue to be individually evaluated for impairment purposes.

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NOTE 8 – ALLOWANCE FOR LOAN AND LEASE LOSSES

The changes in the allowance for loan and lease losses were as follows:
(In thousands)	Residential Mortgage Loans		Commercial Mortgage Loans		Commercial & Industrial Loans		Construction Loans		Consumer Loans		Total
Quarter ended March 31, 2015
Allowance for loan and lease losses:
Beginning balance	$	27,301	$	50,894	$	63,721	$	12,822	$	67,657	$	222,395
Charge-offs		(5,192)		(4,006)		(4,453)		(605)		(17,757)		(32,013)
Recoveries		98		276		558		207		1,573		2,712
Provision		6,475		(2,137)		10,353		1,215		17,064		32,970
Ending balance	$	28,682	$	45,027	$	70,179	$	13,639	$	68,537	$	226,064
Ending balance: specific reserve for
impaired loans	$	14,862	$	13,238	$	24,871	$	3,381	$	5,788	$	62,140
Ending balance: purchased credit-impaired loans	$	-	$	-	$	-	$	-	$	-	$	-
Ending balance: general allowance	$	13,820	$	31,789	$	45,308	$	10,258	$	62,749	$	163,924
Loans held for investment:
Ending balance	$	3,331,620	$	1,649,263	$	2,442,867	$	124,440	$	1,937,182	$	9,485,372
Ending balance: impaired loans	$	429,526	$	224,365	$	226,656	$	37,593	$	36,841	$	954,981
Ending balance: purchased credit-
impaired loans	$	177,601	$	3,279	$	-	$	-	$	234	$	181,114
Ending balance: loans with general allowance	$	2,724,493	$	1,421,619	$	2,216,211	$	86,847	$	1,900,107	$	8,349,277

(In thousands)	Residential Mortgage Loans		Commercial Mortgage Loans		Commercial & Industrial Loans		Construction Loans		Consumer Loans		Total
Quarter ended March 31, 2014
Allowance for loan and lease losses:
Beginning balance	$	33,110	$	73,138	$	85,295	$	35,814	$	58,501	$	285,858
Charge-offs		(6,422)		(5,810)		(22,459)		(970)		(18,046)		(53,707)
Recoveries		69		35		663		617		1,328		2,712
Provision		3,751		(851)		16,091		(8,050)		20,974		31,915
Ending balance	$	30,508	$	66,512	$	79,590	$	27,411	$	62,757	$	266,778
Ending balance: specific reserve for
impaired loans	$	17,273	$	29,833	$	19,098	$	15,154	$	3,658	$	85,016
Ending balance: purchased credit-impaired loans	$	-	$	-	$	-	$	-	$	-	$	-
Ending balance: general allowance	$	13,235	$	36,679	$	60,492	$	12,257	$	59,099	$	181,762
Loans held for investment:
Ending balance	$	2,548,101	$	1,846,016	$	2,947,837	$	152,579	$	2,072,252	$	9,566,785
Ending balance: impaired loans	$	419,308	$	219,860	$	151,653	$	58,636	$	29,931	$	879,388
Ending balance: purchased credit-
impaired loans	$	-	$	-	$	-	$	-	$	3,383	$	3,383
Ending balance: loans with general allowance	$	2,128,793	$	1,626,156	$	2,796,184	$	93,943	$	2,038,938	$	8,684,014

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   During the second quarter of 2014, the Corporation made certain enhancements to the general allowance estimation process for commercial loans, which mainly consisted of the following:

Utilization of longer historical loss periods to better reflect the level of incurred losses in the portfolio. Historical charge-off rates are calculated by the Corporation on a quarterly basis by tracking cumulative charge-offs experienced over a two-year loss period on loans according to their internal risk rating (referred to as “base rate” for the quarter). Prior to the second quarter 2014 enhancements, the Corporation would use the base rate of the current quarter or the average of the last 4 quarters, if greater. During the second quarter of 2014, the Corporation eliminated the use of the “greater of” approach and began to use the base rate average of the last 8 quarters. This change captures a longer historical period that helps mitigate period to period volatility in the loss rates.

Enhancements of the environmental factors adjustment. Prior to the second quarter of 2014 enhancements, these adjustments were applied in the form of basis point additions to the loss ratio based on changes in credit and economic indicators observed in the most recent periods. Beginning in the second quarter of 2014, the resulting factor derived from a set of risk-based ratings and weights assigned to credit and economic indicators over a reasonable period is applied to a developed expected range of historical losses, in order to adjust the base rates. These enhancements result in a framework that can be applied more consistently, by having a more granular analysis that better captures trends in economic conditions and the impact on the Corporation’s portfolio.

    In addition, the calculation of loss rates for asset classifications with limited or zero loss history was improved to consider these loans’ migration experience.

   At the date of implementation, the Corporation performed a parallel computation of the general reserve for commercial loans. The enhancements to the general allowance estimation process resulted in a net decrease to the allowance for loan losses of $4.8 million as of the implementation date of May 31, 2014.

    During the third quarter of 2014, similar enhancements to the environmental factors adjustment framework were applied to the consumer loans portfolio. The framework was defined for secured and unsecured loans to consider the specific behaviors separately. With respect to the historical charge-off rates, during the third quarter of 2014, the Corporation adopted the utilization of the base rate calculated as the average of the net charge-off ratio for the 12-month period preceding the most recent four quarters. Previously, the base rate was calculated as the average of the last two years’ annual net charge-off ratio. The effect of these enhancements on the allowance for consumer loans was immaterial as of the implementation date of August 31, 2014.

   As of March 31, 2015, the Corporation maintained a $0.5 million reserve for unfunded loan commitments mainly related to outstanding construction and commercial and industrial loan commitments. The reserve for unfunded loan commitments is an estimate of the losses inherent in off-balance sheet loan commitments to borrowers that are experiencing financial difficulties at the balance sheet date. It is calculated by multiplying an estimated loss factor by an estimated probability of funding, and then by the period-end amounts for unfunded commitments. The reserve for unfunded loan commitments is included as part of accounts payable and other liabilities in the consolidated statement of financial condition.

NOTE 9 – LOANS HELD FOR SALE

The Corporation’s loans held-for-sale portfolio was composed of:

		As of		As of
	March 31, 2015		December 31, 2014
	(In thousands)
Residential mortgage loans	$	27,135	$	22,315
Construction loans		47,802		47,802
Commercial mortgage loans		6,786		6,839
Total	$	81,723	$	76,956

Non-performing loans held for sale totaled $54.6 million ($6.8 million commercial mortgage loans and $47.8 million construction loans) as of March 31, 2015 and December 31, 2014. 

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NOTE 10 – OTHER REAL ESTATE OWNED

The following table presents OREO inventory as of the dates indicated:
		Quarter Ended
		March 31,			December 31,
		2015		2014
			(Dollars in thousands)
OREO
OREO balances, carrying value:
FHA/VA-Guaranteed (1)		$	6,867	$	7,059
Other residential			26,031		22,520
Commercial			72,473		75,654
Construction			17,257		18,770
Total		$	122,628	$	124,003
(1)	As of March 31, 2015, exclude $0.2 million of foreclosures completed in 2015 that meet the conditions of ASC 310-40 and are presented as a receivable (other assets) in the statement of financial condition.

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NOTE 11 – DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

One of the market risks facing the Corporation is interest rate risk, which includes the risk that changes in interest rates will result in changes in the value of the Corporation’s assets or liabilities and the risk that net interest income from its loan and investment portfolios will be adversely affected by changes in interest rates.  The overall objective of the Corporation’s interest rate risk management activities is to reduce the variability of earnings caused by changes in interest rates.

The Corporation designates a derivative as a fair value hedge, cash flow hedge or economic undesignated hedge when it enters into the derivative contract. As of March 31, 2015 and December 31, 2014, all derivatives held by the Corporation were considered economic undesignated hedges.  These undesignated hedges are recorded at fair value with the resulting gain or loss recognized in current earnings.

The following summarizes the principal derivative activities used by the Corporation in managing interest rate risk:

Interest rate cap agreements - Interest rate cap agreements provide the right to receive cash if a reference interest rate rises above a contractual rate. The value increases as the reference interest rate rises. The Corporation enters into interest rate cap agreements for protection from rising interest rates.

Interest rate swaps - Interest rate swap agreements generally involve the exchange of fixed and floating-rate interest payment obligations without the exchange of the underlying notional principal amount. As of March 31, 2015 and December 31, 2014, most of the interest rate swaps outstanding are used for protection against rising interest rates. Similar to unrealized gains and losses arising from changes in fair value, net interest settlements on interest rate swaps are recorded as an adjustment to interest income or interest expense depending on whether an asset or liability is being economically hedged.

Forward Contracts - Forward contracts are sales of to-be-announced (“TBA”) mortgage-backed securities that will settle over the standard delivery date and do not qualify as “regular way” security trades. Regular-way security trades are contracts that have no net settlement provision and no market mechanism to facilitate net settlement and that provide for delivery of a security within the time generally established by regulations or conventions in the market place or exchange in which the transaction is being executed. The forward sales are considered derivative instruments that need to be marked to market. These securities are used to economically hedge the FHA/VA residential mortgage loan securitizations of the mortgage-banking operations. Unrealized gains (losses) are recognized as part of mortgage banking activities in the consolidated statement of income.

To satisfy the needs of its customers, the Corporation may enter into nonhedging transactions. In these transactions, generally, the Corporation participates as a buyer in one of the agreements and as a seller in the other agreement under the same terms and conditions.

In addition, the Corporation enters into certain contracts with embedded derivatives that do not require separate accounting as these are clearly and closely related to the economic characteristics of the host contract. When the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract, it is bifurcated, carried at fair value, and designated as a trading or nonhedging derivative instrument.

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The following table summarizes the notional amounts of all derivative instruments:
	Notional Amounts
	As of		As of
	March 31,		December 31,
	2015		2014
Undesignated economic hedges:	(In thousands)
Interest rate contracts:
Interest rate swap agreements	$	5,440	$	5,440
Written interest rate cap agreements		36,809		37,132
Purchased interest rate cap agreements		36,809		37,132
Forward Contracts:
Sale of TBA GNMA MBS pools		32,000		19,000
	$	111,058	$	98,704
Notional amounts are presented on a gross basis with no netting of offseting exposure positions.

The following table summarizes the fair value of derivative instruments as of the indicated dates and the location in the statement of financial condition:
	Asset Derivatives					Liability Derivatives
	Statement of	March 31,		December 31,			March 31,		December 31,
	Financial	2015		2014			2015		2014
	Condition Location	Fair Value		Fair Value		Statement of Financial Condition Location	Fair Value		Fair Value
	(In thousands)
Undesignated economic hedges:
Interest rate contracts:
Interest rate swap agreements	Other assets	$	-	$	33	Accounts payable and other liabilities	$	-	$	33
Written interest rate cap agreements	Other assets		-		-	Accounts payable and other liabilities		1		6
Purchased interest rate cap agreements	Other assets		1		6	Accounts payable and other liabilities		-		-
Forward Contracts:
Sales of TBA GNMA MBS pools	Other assets		-		-	Accounts payable and other liabilities		220		148
		$	1	$	39		$	221	$	187

The following table summarizes the effect of derivative instruments on the statement of income :
		Gain (or Loss)
	Location of  Gain or (Loss)		Quarter Ended
	Recognized in Income on	March 31,
(In thousands)	Derivatives	2015		2014
			(In thousands)
UNDESIGNATED ECONOMIC HEDGES:
Interest rate contracts:
Interest rate swap agreements	Interest income - Loans	$	-	$	313
Forward contracts:
Sales of TBA GNMA MBS pools	Mortgage Banking Activities		(72)		(165)
Total (loss) gain on derivatives		$	(72)	$	148

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Derivative instruments, such as interest rate swaps, are subject to market risk.  As is the case with investment securities, the market value of derivative instruments is largely a function of the financial market’s expectations regarding the future direction of interest rates.  Accordingly, current market values are not necessarily indicative of the future impact of derivative instruments on earnings.  This will depend, for the most part, on the shape of the yield curve and the level of interest rates, as well as the expectations for rates in the future. 

   A summary of interest rate swaps is as follows:

	As of		As of
	March 31,		December 31,
	2015		2014
		(Dollars in thousands)
Pay fixed/receive floating :
Notional amount	$	5,440	$	5,440
Weighted-average receive rate at period end		2.04%		2.03%
Weighted-average pay rate at period end		3.45%		3.45%
As of March 31, 2015, the Corporation has not entered into any derivative instrument containing credit-risk-related
contingent features.

NOTE 12 – OFFSETTING OF ASSETS AND LIABILITIES

The Corporation enters into master agreements with counterparties that may allow for netting of exposures in the event of default, primarily related to derivatives and repurchase agreements. In an event of default, each party has a right of set-off against the other party for amounts owed in the related agreement and any other amount or obligation owed in respect of any other agreement or transaction between them. The following table presents information about the offsetting of financial assets and liabilities as well as derivative assets and liabilities:

Offsetting of Financial Assets and Derivative Assets
In thousands
As of March 31, 2015
							Gross Amounts Not Offset in the Statement of Financial Position
					Net Amounts of Assets Presented in the Statement of Financial Position
	Gross Amounts of Recognized  Assets		Gross Amounts Offset in the Statement of Financial Position
							Financial Instruments		Cash Collateral Received
											Net Amount
Description
Derivatives	$	1	$	-	$	1	$	(1)	$	-	$	-
As of December 31, 2014
							Gross Amounts Not Offset in the Statement of Financial Position
					Net Amounts of Assets Presented in the Statement of Financial Position
	Gross Amounts of Recognized  Assets		Gross Amounts Offset in the Statement of Financial Position
							Financial Instruments		Cash Collateral
											Net Amount
Description
Derivatives	$	6	$	-	$	6	$	(6)	$	-	$	-

44

Offsetting of Financial Liabilities and Derivative Liabilities
In thousands
As of March 31, 2015
							Gross Amounts Not Offset in the Statement of Financial Position
					Net Amounts of Liabilities Presented in the Statement of Financial Position
	Gross Amounts of Recognized  Liabilities		Gross Amounts Offset in the Statement of Financial Position
							Financial Instruments		Cash Collateral Received
											Net Amount
Description
Repurchase agreements		600,000		-		600,000		(600,000)		-		-
Total	$	600,000	$	-	$	600,000	$	(600,000)	$	-	$	-
As of December 31, 2014
							Gross Amounts Not Offset in the Statement of Financial Position
					Net Amounts of Liabilities Presented in the Statement of Financial Position
	Gross Amounts of Recognized  Liabilities		Gross Amounts Offset in the Statement of Financial Position
							Financial Instruments		Cash Collateral
											Net Amount
Description
Derivatives	$	33	$	-	$	33	$	(33)	$	-	$	-
Repurchase agreements		600,000		-		600,000		(600,000)		-		-
Total	$	600,033	$	-	$	600,033	$	(600,033)	$	-	$	-

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NOTE 13 – GOODWILL AND OTHER INTANGIBLES

Goodwill as of March 31, 2015 and December 31, 2014 amounted to $28.1 million, recognized as part of “Other Assets” in the consolidated statement of financial condition. The Corporation conducted its annual evaluation of goodwill and intangibles during the fourth quarter of 2014. The Corporation’s goodwill is related to the acquisition of Firstbank Florida in 2005.

The Corporation bypassed the qualitative assessment in 2014 and proceeded directly to perform the first step of the two-step goodwill impairment test. The Step 1 evaluation of goodwill allocated to the Florida reporting unit under both valuation approaches (market and discounted cash flow analysis) indicated that the fair value of the unit was above the carrying amount of its equity book value as of the valuation date (October 1); therefore, the completion of Step 2 was not required. Based on the analysis under both the market and discounted cash flow analysis, the estimated fair value of equity of the reporting unit exceeded the carrying amount of the entity, including goodwill at the evaluation date. There have been no events related to the Florida reporting unit that could indicate potential goodwill impairment since the date of the last evaluation; therefore, no goodwill impairment evaluation was performed during the first quarter of 2015. Goodwill and other indefinite life intangibles are reviewed at least annually for impairment.

In connection with the acquisition of the FirstBank-branded credit card loan portfolio, in the second quarter of 2012, the Corporation recognized a purchased credit card relationship intangible of $24.5 million, which is being amortized over the next 6.7 years on an accelerated basis based on the estimated attrition rate of the purchased credit card accounts, which reflects the pattern in which the economic benefits of the intangible asset are consumed. These benefits are consumed as the revenue stream generated by the cardholder relationship is realized. 

The core deposit intangible acquired in the February 2015 Doral Bank transaction amounted to $5.8 million.

The following table shows the gross amount and accumulated amortization of the Corporation’s intangible assets recognized as part of Other Assets in the consolidated statement of financial condition:
	As of		As of
	March 31,		December 31,
	2015		2014
(Dollars in thousands)
Core deposit intangible:
Gross amount, beginning of period	$	45,844	$	45,844
Addition as a result of acquisition		5,820		-
Accumulated amortization		(40,750)		(40,424)
Net carrying amount	$	10,914	$	5,420
Remaining amortization period		9.9 years		8.4 years
Purchased credit card relationship intangible:
Gross amount	$	24,465	$	24,465
Accumulated amortization		(8,843)		(8,076)
Net carrying amount	$	15,622	$	16,389
Remaining amortization period		6.7 years		6.9 years

For the quarters ended March 31, 2015 and 2014, the amortization expense of core deposit intangibles amounted to $0.3 million and $0.4 million, respectively. For each of the quarters ended March 31, 2015 and 2014, the amortization expense of the purchased credit card relationship intangible amounted to $0.8 million.

	The estimated aggregate amortization expense related to these intangible assets for future periods is as follows:
			Amount
			(In thousands)
2015		$	3,813
2016			4,737
2017			4,197
2018			3,293

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NOTE 14 – NON-CONSOLIDATED VARIABLE INTEREST ENTITIES AND SERVICING ASSETS

The Corporation transfers residential mortgage loans in sale or securitization transactions in which it has continuing involvement, including servicing responsibilities and guarantee arrangements. All such transfers have been accounted for as sales as required by applicable accounting guidance.

    When evaluating transfers and other transactions with Variable Interest Entities (“VIEs”) for consolidation, the Corporation first determines if the counterparty is an entity for which a variable interest exists. If no scope exception is applicable and a variable interest exists, the Corporation then evaluates if it is the primary beneficiary of the VIE and whether the entity should be consolidated or not.

    Below is a summary of transfers of financial assets to VIEs for which the Corporation has retained some level of continuing involvement:

GNMA

The Corporation typically transfers first lien residential mortgage loans in conjunction with GNMA securitization transactions in which the loans are exchanged for cash or securities that are readily redeemed for cash proceeds and servicing rights. The securities issued through these transactions are guaranteed by the issuer and, as such, under seller/servicer agreements, the Corporation is required to service the loans in accordance with the issuer’s servicing guidelines and standards. As of March 31, 2015, the Corporation serviced loans securitized through GNMA with a principal balance of $1.2 billion.

Trust Preferred Securities

     In 2004, FBP Statutory Trust I, a financing subsidiary of the Corporation, sold to institutional investors $100 million of its variable rate trust-preferred securities. The proceeds of the issuance, together with the proceeds of the purchase by the Corporation of $3.1 million of FBP Statutory Trust I variable rate common securities, were used by FBP Statutory Trust I to purchase $103.1 million aggregate principal amount of the Corporation’s Junior Subordinated Deferrable Debentures. Also in 2004, FBP Statutory Trust II, a statutory trust that is wholly owned by the Corporation, sold to institutional investors $125 million of its variable rate trust-preferred securities. The proceeds of the issuance, together with the proceeds of the purchase by the Corporation of $3.9 million of FBP Statutory Trust II variable rate common securities, were used by FBP Statutory Trust II to purchase $128.9 million aggregate principal amount of the Corporation’s Junior Subordinated Deferrable Debentures. The debentures are presented in the Corporation’s consolidated statement of financial condition as Other Borrowings, net of related issuance costs. The variable rate trust-preferred securities are fully and unconditionally guaranteed by the Corporation. The $100 million Junior Subordinated Deferrable Debentures issued by the Corporation in April 2004 and the $125 million issued in September 2004 mature on June 17, 2034 and September 20, 2034, respectively; however, under certain circumstances, the maturity of Junior Subordinated Deferrable Debentures may be shortened (such shortening would result in a mandatory redemption of the variable rate trust-preferred securities). The Collins Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act eliminates certain trust-preferred securities from Tier 1 Capital. Bank holding companies, such as the Corporation, must fully phase out these instruments from Tier 1 capital by January 1, 2016 (25% allowed in 2015 and 0% in 2016); however, these instruments may remain in Tier 2 capital until the instruments are redeemed or mature. The Corporation has elected to defer the interest payments that were due on quarterly periods since March 2012. The aggregate amount of payments deferred and accrued approximates $23.7 million as of March 31, 2015. Under the indentures, the Corporation has the right, from time to time, and without causing an event of default, to defer payments of interest on the subordinated debentures by extending the interest payment period at any time and from time to time during the term of the subordinated debentures for up to twenty consecutive quarterly periods. Future interest payments are subject to Federal Reserve approval.

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Grantor Trusts

    During 2004 and 2005, a third party to the Corporation, from now on identified as the seller, established a series of statutory trusts to effect the securitization of mortgage loans and the sale of trust certificates. The seller initially provided the servicing for a fee, which is senior to the obligations to pay trust certificate holders. The seller then entered into a sales agreement through which it sold and issued the trust certificates in favor of the Corporation’s banking subsidiary. Currently, the Bank is the sole owner of the trust certificates; the servicing of the underlying residential mortgages that generate the principal and interest cash flows, is performed by another third party, which receives a servicing fee. The securities are variable rate securities indexed to 90-day LIBOR plus a spread. The principal payments from the underlying loans are remitted to a paying agent (servicer) who then remits interest to the Bank; interest income is shared to a certain extent with the FDIC, which has an interest only strip (“IO”) tied to the cash flows of the underlying loans and is entitled to receive the excess of the interest income less a servicing fee over the variable rate income that the Bank earns on the securities. This IO is limited to the weighted average coupon of the securities. The FDIC became the owner of the IO upon the intervention of the seller, a failed financial institution. No recourse agreement exists and the risk from losses on non accruing loans and repossessed collateral is absorbed by the Bank as the sole holder of the certificates.  As of March 31, 2015, the amortized balance and carrying value of the Grantor Trusts amounted to $43.0 million and $31.7 million, respectively, with a weighted average yield of 2.15%.

Investment in unconsolidated entity

On February 16, 2011, FirstBank sold an asset portfolio consisting of performing and non-performing construction, commercial mortgage and commercial and industrial loans with an aggregate book value of $269.3 million to CPG/GS, an entity organized under the laws of the Commonwealth of Puerto Rico and majority owned by PRLP Ventures LLC ("PRLP"), a company created by Goldman, Sachs & Co. and Caribbean Property Group.  In connection with the sale, the Corporation received $88.5 million in cash and a 35% interest in CPG/GS, and made a loan in the amount of $136.1 million representing seller financing provided by FirstBank. The loan had a seven-year maturity and bears variable interest at 30-day LIBOR plus 300 basis points and is secured by a pledge of all of the acquiring entity's assets as well as the PRLP's 65% ownership interest in CPG/GS. As of March 31, 2015, the carrying amount of the loan was $25.2 million, which was included in the Corporation's Commercial and Industrial loans held for investment portfolio.  FirstBank’s equity interest in CPG/GS is accounted for under the equity method and included as part of Investment in unconsolidated entity in the Consolidated Statements of Financial Condition. When applying the equity method, the Bank follows the HLBV method to determine its share in CPG/GS’s earnings or loss. Under HLBV, the Bank determines its share in CPG/GS’s earnings or loss by determining the difference between its “claim on CPG/GS’s book value” at the end of the period as compared to the beginning of the period. This claim is calculated as the amount the Bank would receive if CPG/GS were to liquidate all of its assets at recorded amounts determined in accordance with GAAP and distribute the resulting cash to the investors, PRLP, and FirstBank, according to their respective priorities as provided in the contractual agreement. The Bank reports its share of CPG/GS’s operating results on a one-quarter lag basis. In addition, as a result of using HLBV, the difference between the Bank’s investment in CPG/GS and its claim on the book value of CPG/GS at the date of the investment, known as the basis difference, is amortized over the estimated life of the investment, or five years.  CPG/GS records its loans receivable under the fair value option. The loss recorded in the first half of 2014 reduced to zero the carrying amount of the Bank’s investment in CPG/GS. No negative investment needs to be reported as the Bank has no legal obligation or commitment to provide further financial support to this entity; thus, no further losses will be recorded on this investment.  Any potential increase in the carrying value of the investment in CPG/GS, under the HLBV method, would depend upon how better off the Bank is at the end of the period than it was at the beginning of the period after the waterfall calculation performed to determine the amount of gain allocated to the investors.

FirstBank also provided an $80 million advance facility to CPG/GS to fund unfunded commitments and costs to complete projects under construction, which was fully disbursed in 2011, and a $20 million working capital line of credit to fund certain expenses of CPG/GS.  During 2013, the working capital line of credit was renewed and reduced to $7 million for a period of two years expiring on September 2015. During 2012, CPG/GS repaid the outstanding balance of the advance facility to fund unfunded commitments, and the funds became available to redraw under a one-time revolver agreement. These loans bear variable interest at 30-day LIBOR plus 300 basis points. As of March 31, 2015, the carrying values of the revolver agreement and the working capital line were $38.4 million and $0, respectively, and are included in the Corporation's commercial and industrial loans held for investment portfolio.

Cash proceeds received by CPG/GS are first used to cover operating expenses and debt service payments, including the note receivable, the advance facility, and the working capital line, described above, which must be substantially repaid before proceeds can be used for other purposes, including the return of capital to both PRLP and FirstBank. FirstBank will not receive any return on its equity interest until PRLP receives an aggregate amount equivalent to its initial investment and a priority return of at least 12%, resulting in FirstBank’s interest in CPG/GS being subordinate to PRLP’s interest. CPG/GS will then begin to make payments pro rata to PRLP and FirstBank, 35% and 65%, respectively, until FirstBank has achieved a 12% return on its invested capital and the aggregate amount of distributions is equal to FirstBank’s capital contributions to CPG/GS.

The Bank has determined that CPG/GS is a VIE in which the Bank is not the primary beneficiary.  In determining the primary beneficiary of CPG/GS, the Bank considered applicable guidance that requires the Bank to qualitatively assess the determination of the primary beneficiary (or consolidator) of CPG/GS based on whether it has both the power to direct the activities of CPG/GS that

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most significantly impact the entity's economic performance and the obligation to absorb losses of CPG/GS that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE.

The Bank determined that it does not have the power to direct the activities that most significantly impact the economic performance of CPG/GS as it does not have the right to manage the loan portfolio, impact foreclosure proceedings, or manage the construction and sale of the property; therefore, the Bank concluded that it is not the primary beneficiary of CPG/GS. As a creditor to CPG/GS, the Bank has certain rights related to CPG/GS; however, these are intended to be protective in nature and do not provide the Bank with the ability to manage the operations of CPG/GS. Since CPG/GS is not a consolidated subsidiary of the Bank and the transaction met the criteria for sale accounting under authoritative guidance, the Bank accounted for this transaction as a true sale, recognizing the cash received, the notes receivable, and the interest in CPG/GS and derecognizing the loan portfolio sold.

The initial fair value of the investment in CPG/GS was determined using techniques with significant unobservable (Level 3) inputs. The valuation inputs included an estimate of future cash flows, expectations about possible variations in the amount and timing of cash flows, and a discount factor based on a rate of return. The Corporation researched available market data and internal information (i.e., proposals received for the servicing of distressed assets and public disclosures and other information about similar structures and/or of distressed asset sales) and determined reasonable ranges of expected returns for FirstBank’s equity interest.

The rate of return of 17.57% was used as the discount factor to estimate the value of FirstBank’s equity interest and represents the Bank’s estimate of the yield a market participant would require. A reasonable range of equity returns was assessed based on consideration of a range of company-specific risk premiums. The valuation of this type of equity interest is highly subjective and somewhat dependent on nonobservable market assumptions, which may result in variations from market participant to market participant.

The following table shows summarized unaudited income statement information of CPG/GS for the quarters ended March 31, 2015 and 2014:
	Quarter Ended
	March 31,		March 31,
	2015		2014
	(In thousands)
Revenues, including net realized gains on sale of
investments in loans and OREO	$	588	$	751
Gross profit (loss)	$	(8,240)	$	(1,508)
Net loss	$	(7,751)	$	(2,447)

Servicing Assets

The Corporation is actively involved in the securitization of pools of FHA-insured and VA-guaranteed mortgages for issuance of GNMA mortgage-backed securities. Also, certain conventional conforming loans are sold to FNMA or FHLMC with servicing retained. The Corporation recognizes as separate assets the rights to service loans for others, whether those servicing assets are originated or purchased.

The changes in servicing assets are shown below:
		Quarter ended
		March 31,		March 31,
		2015		2014
			(In thousands)
Balance at beginning of period		$	22,838	$	21,987
Capitalization of servicing assets			1,073		1,052
Amortization			(856)		(783)
Adjustment to fair value			(38)		(219)
Other (1)			(44)		(11)
Balance at end of period		$	22,973	$	22,026
(1)	Amount represents the adjustment to fair value related to the repurchase of loans serviced for others.

Impairment charges are recognized through a valuation allowance for each individual stratum of servicing assets. The valuation allowance is adjusted to reflect the amount, if any, by which the cost basis of the servicing asset for a given stratum of loans being serviced exceeds its fair value. Any fair value in excess of the cost basis of the servicing asset for a given stratum is not recognized.

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Changes in the impairment allowance were as follows:
	Quarter ended
	March 31,		March 31,
	2015		2014
		(In thousands)
Balance at beginning of period	$	55	$	212
Temporary impairment charges		58		219
Recoveries		(20)		-
Balance at end of period	$	93	$	431

	The components of net servicing income are shown below:
		Quarter ended
		March 31,		March 31,
		2015		2014
			(In thousands)
Servicing fees		$	1,764	$	1,671
Late charges and prepayment penalties			190		164
Adjustment for loans repurchased			(44)		(11)
Other (1)			(89)		(358)
Servicing income, gross			1,821		1,466
Amortization and impairment of servicing assets			(894)		(1,002)
Servicing income, net		$	927	$	464
(1)	Mainly consisted of compensatory fees imposed by GSEs and losses related to representations and warranties.

   The Corporation’s servicing assets are subject to prepayment and interest rates risks. Constant prepayment rate assumptions for the Corporation’s servicing assets for the government guaranteed mortgage loans were 9.2% and 9.1% for the quarters ended March 31, 2015 and 2014, respectively. For conventional conforming mortgage loans, the Corporation used 9.0% and 8.9%, and for the conventional non-conforming mortgage loans 14.0% and 13.4%, for the quarters ended March 31, 2015 and 2014, respectively. Discount rate assumptions used were 11.5% for government guaranteed mortgage loans for each of the quarters ended March 31, 2015 and 2014; 9.5% for conventional conforming mortgage loans for each of the quarters ended March 31, 2015 and 2014; and 13.8% and 13.9% for conventional non-conforming mortgage loans for the quarters ended March 31, 2015 and 2014, respectively.

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     As of March 31, 2015, fair values of the Corporation’s servicing assets were based on a valuation model that incorporates market driven assumptions regarding discount rates and mortgage prepayment rates, adjusted by the particular characteristics of the Corporation’s servicing portfolio. The weighted-averages of the key economic assumptions used by the Corporation in its valuation model and the sensitivity of the current fair value to immediate 10% and 20% adverse changes in those assumptions for mortgage loans as of March 31, 2015 were as follows:

	(Dollars in thousands)
Carrying amount of servicing assets	$	22,973
Fair value	$	25,195
Weighted-average expected life (in years)		8.47
Constant prepayment rate (weighted-average annual rate)		10.25%
Decrease in fair value due to 10% adverse change	$	948
Decrease in fair value due to 20% adverse change	$	1,838
Discount rate (weighted-average annual rate)		10.62%
Decrease in fair value due to 10% adverse change	$	1,050
Decrease in fair value due to 20% adverse change	$	2,020

These sensitivities are hypothetical and should be used with caution. As the figures indicate, changes in fair value based on a 10% variation in assumptions generally cannot be extrapolated because the relationship of the change in assumption and the change in fair value may not be linear. Also, in this table, the effect of a variation in a particular assumption on the fair value of the servicing asset is calculated without changing any other assumption; in reality, changes in one factor may result in changes in another (for example, increases in market interest rates may result in lower prepayments), which may magnify or counteract the sensitivities.

NOTE 15 – DEPOSITS

The following table summarizes deposit balances:
	March 31,			December 31,
	2015		2014
	(In thousands)
Type of account:
Non-interest bearing checking accounts	$	1,175,943	$	900,616
Savings accounts		2,641,793		2,450,484
Interest-bearing checking accounts		1,127,560		1,054,136
Certificates of deposit		2,323,259		2,191,663
Brokered CDs		2,572,483		2,887,046
	$	9,841,038	$	9,483,945

Brokered CDs mature as follows:
	March 31, 2015
	(In thousands)
Three months or less	$	362,501
Over three months to six months		577,737
Over six months to one year		832,235
One to three years		745,922
Three to five years		18,037
Over five years		36,051
Total	$	2,572,483

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The following are the components of interest expense on deposits:
	Quarter Ended
	March 31,			March 31,
	2015			2014
	(In thousands)
Interest expense on deposits	$	16,359	$	18,514
Amortization of broker placement fees		1,335		1,785
Interest expense on deposits	$	17,694	$	20,299

NOTE 16 – SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Securities sold under agreements to repurchase (repurchase agreements) consist of the following:
		March, 31		December 31,
		2015		2014
		(Dollars in thousands)
Repurchase agreements, interest ranging from 1.96% to 3.33%
(December 31, 2014: 2.45% to 4.50%) (1)		$	900,000	$	900,000
(1)	As of March 31, 2015, includes $800 million with an average rate of 2.71% that lenders have the right to call before their contractual maturities at various dates beginning on April 9, 2015. Subsequent to April 9, 2015, no lender has exercised its call option on repurchase agreements. In addition, $700 million is tied to variable rates.

In the first quarter of 2015, the Corporation restructured $400 million of its repurchase agreements, $200 million of which were restructured by extending the contractual maturity and changing from a fixed interest rate to a variable rate, and entered into $200 million of reverse repurchase agreements with the same counterparty (effective April, 2015) under a master netting arrangement that provides for a right to setoff that meets the conditions of ASC 210-20-45-11. These repurchase agreements and reverse repurchase agreements will be presented net on the consolidated statement of financial condition beginning in the second quarter of 2015. In addition, in the first quarter of 2015, the Corporation restructured an additional $200 million of its repurchase agreements with a different counterparty by extending the contractual maturity and reducing the interest rate in these agreements.

Repurchase agreements mature as follows:
		March 31, 2015
		(In thousands)
	One year to three years	$	500,000
	Over five years		400,000
	Total	$	900,000

As of March 31, 2015 and December 31, 2014, the securities underlying such agreements were delivered to the dealers with which the repurchase agreements were transacted.

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Repurchase agreements as of March 31, 2015, grouped by counterparty, were as follows:
	(Dollars in thousands)			Weighted-Average
	Counterparty	Amount		Maturity (In Months)
	Citigroup Global Markets	$	300,000	19
	JP Morgan Chase		200,000	82
	Dean Witter / Morgan Stanley		100,000	31
	Credit Suisse First Boston		300,000	60
		$	900,000

NOTE 17 – ADVANCES FROM THE FEDERAL HOME LOAN BANK (FHLB)

The following is a summary of the advances from the FHLB:
			As of		As of
		March 31,		December 31,
		2015		2014
		(Dollars in thousands)
	Fixed-rate advances from FHLB, with a weighted-
	average interest rate of 1.17%	$	325,000	$	325,000

Advances from FHLB mature as follows:
		March 31,
		2015
		(In thousands)
	Over one year to three years	$	300,000
	Over three to four years		25,000
	Total	$	325,000

As of March 31, 2015, the Corporation had additional capacity of approximately $615.4 million on this credit facility based on collateral pledged at the FHLB, including a haircut reflecting the perceived risk associated with the collateral.

NOTE 18 – OTHER BORROWINGS

 Other borrowings, as of the indicated dates, consist of:

	March 31,		December 31,
	2015		2014
	(In thousands)
Junior subordinated debentures due in 2034,
interest-bearing at a floating rate of 2.75%
over 3-month LIBOR (3.02% as of  March 31, 2015
and 2.99% as of December 31, 2014)	$	103,093	$	103,093
Junior subordinated debentures due in 2034,
interest-bearing at a floating rate of 2.50%
over 3-month LIBOR (2.77% as of  March 31, 2015
and 2.75% as of December 31, 2014)		128,866		128,866
	$	231,959	$	231,959

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NOTE 19 – STOCKHOLDERS’ EQUITY

Common Stock

As of March 31, 2015 and December 31, 2014, the Corporation had 2,000,000,000 authorized shares of common stock with a par value of $0.10 per share. As of March 31, 2015 and December 31, 2014, there were 214,618,015 and 213,724,749 shares issued, respectively, and 213,827,258 and 212,984,700 shares outstanding, respectively. On July 30, 2009, the Corporation announced the suspension of common and preferred stock dividends effective with the preferred dividend for the month of August 2009.

  During the first quarter of 2015, the Corporation awarded 30,068 shares of restricted stock under the Omnibus Plan to one of the Corporation’s independent directors, of which 4,295 shares vest in one year and the remaining 25,773 shares vest in five years.  Also in the first quarter of 2015, the Corporation granted 791,464 shares of restricted stock to certain senior officers and certain other employees. For 40,000 of the 791,464 shares awarded to employees, the requisite service period is approximately three months. For the remaining 751,464 shares, the restrictions on such restricted stock will lapse with respect to 50% over a two-year period and 50% over a three-year period. Included in the shares of restricted stock granted in the first quarter of 2015 are 615,464 shares granted to certain senior officers consistent with the requirements of TARP. In addition, in the first quarter of 2015, the Corporation issued 80,234 shares of common stock as increased compensation to certain executive officers. As of March 31, 2015 and December 31, 2014, there were 3,076,438 and 2,327,156 shares of unvested restricted stock outstanding. During the first quarter of 2015, 8,500 shares of restricted stock were forfeited and the restrictions on 63,750 shares of restricted stock lapsed. Refer to Note 4 for additional information.

Preferred Stock

The Corporation has 50,000,000 authorized shares of preferred stock with a par value of $1, redeemable at the Corporation’s option subject to certain terms. This stock may be issued in series and the shares of each series shall have such rights and preferences as are fixed by the Board of Directors when authorizing the issuance of that particular series.  As of March 31, 2015, the Corporation has five outstanding series of nonconvertible, non-cumulative preferred stock: 7.125% non-cumulative perpetual monthly income preferred stock, Series A; 8.35% noncumulative perpetual monthly income preferred stock, Series B; 7.40% noncumulative perpetual monthly income preferred stock, Series C; 7.25% noncumulative perpetual monthly income preferred stock, Series D; and 7.00% noncumulative perpetual monthly income preferred stock, Series E.  The liquidation value per share is $25.

Effective January 17, 2012, the Corporation delisted all of its outstanding series of nonconvertible, noncumulative preferred stock from the New York Stock Exchange. The Corporation has not arranged for listing and/or registration on another national securities exchange or for quotation of the Series A through E Preferred Stock in a quotation medium.

     In the first quarter of 2014, the Corporation issued an aggregate of 1,075,283 shares of its common stock in exchange for an aggregate of 249,477 shares of the Corporation’s Series A through E Preferred Stock, having an aggregate liquidation value of $6.2 million. The shares of common stock were issued to two holders of the Series A through E Preferred Stock in reliance upon the exemption set forth in Section 3(a)(9) of the Securities Act of 1933, as amended, for securities exchanged by an issuer with existing security holders where no commission or other remuneration is paid or given directly or indirectly by the issuer for soliciting such exchange. The carrying (liquidation) value of the Series A through E preferred stock exchanged, or $6.2 million, was reduced, and common stock and additional paid-in capital increased in the amount of the fair value of the common stock issued. The Corporation recorded the par value of the shares issued as common stock ($0.10 per common share) or $0.1 million. The excess of the common stock fair value over the par value, or $5.5 million, was recorded in additional paid-in capital. The excess of the carrying amount of the shares of preferred stock over the fair value of the shares of common stock, or $0.4 million, was recorded as an increase to retained earnings and an increase in earnings per common share computation.

Treasury stock

During the first quarter of 2015, the Corporation withheld an aggregate of 50,708 shares of the common stock that was paid to certain senior officers as additional compensation and of restricted stock that vested during the first quarter of 2015 to cover employees’ payroll and income tax withholding liabilities; these shares are also held as treasury shares. As of March 31, 2015 and December 31, 2014, the Corporation had 790,757 and 740,049 shares held as treasury stock, respectively.

FirstBank Statutory Reserve (Legal Surplus)

The Banking Law of the Commonwealth of Puerto Rico requires that a minimum of 10% of FirstBank’s net income for the year be transferred to legal surplus until such surplus equals the total of paid-in-capital on common and preferred stock. Amounts transferred to the legal surplus account from the retained earnings account are not available for distribution to the stockholders without the prior consent of the Puerto Rico Commissioner of Financial Institutions. The Puerto Rico Banking Law provides that when the expenditures of a Puerto Rico commercial bank are greater than receipts, the excess of the expenditures over receipts shall be charged against the undistributed profits of the bank, and the balance, if any shall be charged against the reserve fund, as a reduction thereof. If there is no

54

reserve fund sufficient to cover such balance in whole or in part, the outstanding amount shall be charged against the capital account and the Bank cannot pay dividends until it can replenish the reserve fund to an amount of at least 20% of the original capital contributed. During the fourth quarter of 2014, $40.0 million was transferred to the legal surplus reserve. FirstBank’s legal surplus reserve, included as part of retained earnings in the Corporation’s statement of financial condition, amounted to $40.0 million as of March 31, 2015.  There were no transfers to the legal surplus reserve during the quarter ended March 31, 2015.  

NOTE 20 - INCOME TAXES

   Income tax expense includes Puerto Rico and USVI income taxes as well as applicable United States (“U.S.”) federal and state taxes. The Corporation is subject to Puerto Rico income tax on its income from all sources. As a Puerto Rico corporation, First Bancorp. is treated as a foreign corporation for U.S. and USVI income tax purposes and is generally subject to U.S. and USVI income tax only on its income from sources within the U.S. and USVI or income effectively connected with the conduct of a trade or business in those regions. Any such tax paid is also creditable against the Corporation’s Puerto Rico tax liability, subject to certain conditions and limitations.

  Under the Puerto Rico Internal Revenue Code of 2011, as amended (the “2011 PR Code”), the Corporation and its subsidiaries are treated as separate taxable entities and are not entitled to file consolidated tax returns and, thus, the Corporation is not able to utilize losses from one subsidiary to offset gains in another subsidiary. Accordingly, in order to obtain a tax benefit from a net operating loss (“NOL”), a particular subsidiary must be able to demonstrate sufficient taxable income within the applicable NOL carry forward period. The 2011 PR Code provides a dividend received deduction of 100% on dividends received from “controlled” subsidiaries subject to taxation in Puerto Rico and 85% on dividends received from other taxable domestic corporations.

    The Corporation has maintained an effective tax rate lower than the maximum statutory rate mainly by investing in government obligations and mortgage-backed securities exempt from U.S. and Puerto Rico income taxes and by doing business through an International Banking Entity (“IBE”) unit of the Bank, and through the Bank’s subsidiary, FirstBank Overseas Corporation, whose interest income and gain on sales is exempt from Puerto Rico and U.S. income taxation. The IBE and FirstBank Overseas Corporation were created under the International Banking Entity Act of Puerto Rico, which provides for total Puerto Rico tax exemption on net income derived by IBEs operating in Puerto Rico on the specific activities identified in the IBE Act.  An IBE that operates as a unit of a bank pays income taxes at the corporate standard rates to the extent that the IBE’s net income exceeds 20% of the bank’s total net taxable income.

     In 2010, the Corporation established a valuation allowance for substantially all of the deferred tax assets of its banking subsidiary, FirstBank, primarily due to significant operational losses driven by charges to the provision for loan losses, a three-year cumulative loss position as of the end of the year 2010, and uncertainty regarding the amount of future taxable income that the Bank could forecast. As of December 31, 2014, based upon the assessment of all positive and negative evidence, management concluded that it was more likely than not that FirstBank will generate sufficient taxable income within the applicable NOL carry-forward periods to realize $313.0 million of its deferred tax assets and, therefore, reversed $302.9 million of the valuation allowance. As of March 31, 2015, the deferred tax assets, net of a valuation allowance of $198.6 million, amounted to $310.9 million and management concluded, based upon the assessment of all positive and negative evidence, that it is more likely than not that the Corporation will generate sufficient taxable income within the applicable NOL carry-forward periods to realize such amount.

       The Corporation recorded income tax expense of $8.0 million in the first quarter of 2015 compared to $0.9 million for the quarter ended March 31, 2014.  For the quarter ended March 31, 2015, the Corporation calculated the provision for income taxes by applying the estimated annual effective tax rate for the full fiscal year to ordinary income or loss.  The Corporation had historically calculated the provision for income taxes for interim periods by using a discrete effective tax rate method since it had a full valuation allowance on most of its deferred tax assets.  As a result of the partial valuation allowance release during the fourth quarter of 2014, management will use the annual estimated effective tax rate as required by ASC 740 for interim period reporting.  In the computation of the consolidated worldwide annual estimated effective tax rate, the ASC 740-270 requires the exclusion of legal entities with pre-tax losses from which a tax benefit cannot be recognized.  The consolidated worldwide estimated effective tax rate excluding entities with pre-tax losses from which a tax benefit cannot be recognized is 22%.  The effective tax rate including all entities is 24%. 

    As of March 31, 2015, the Corporation did not have Unrecognized Tax Benefits (“UTBs”) recorded on its books. During 2014, the Corporation reached final settlement with the IRS in connection with the 2007-2009 examination periods.  As a result of a final settlement with the IRS Appeals office during 2014, the Corporation released a portion of its reserve for uncertain tax positions, resulting in a tax benefit of $1.8 million, and paid $2.5 million to settle the tax liability resulting from the audit.

   The Corporation’s liability for income taxes includes the estimate of interest not yet paid related to the settlement reached with the IRS to close the tax years 2007 through 2009. The Corporation classifies all interest and penalties, if any, related to tax uncertainties as income tax expense. As of March 31, 2015, the Corporation’s accrued interest that relates to the IRS examination amounted to $1.3 million and there was no need to accrue for the payment of penalties. Audit periods remain open for review until the statute of limitations has passed. The statue of limitations under the 2011 PR code is 4 years; the statutes of limitations for Virgin Islands and U.S. income tax purposes are each three years after a tax return is due or filed, whichever is later. The completion of an audit by the

55

taxing authorities or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Corporation’s liability for income taxes. Any such adjustment could be material to the  results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. For Virgin Islands and U.S. income tax purposes, all tax years subsequent to 2010 remain open to examination. The 2012 tax year U.S. federal tax return is currently under examination by the IRS. For Puerto Rico purposes, all tax years subsequent to 2010 remain open to examination.

   During 2013, the Puerto Rico Government approved Act No. 40, which imposed a national gross receipts tax.  The national gross receipts tax for financial institutions was computed on the basis of 1% of gross income, net of allowable exclusions. Subject to certain limitations, a financial institution was able to claim a credit of 0.5% of its gross income, against its regular income tax or the alternative minimum tax (“AMT”). However, on December 22, 2014, the Governor of Puerto Rico signed Act No. 238, which amended the 2011 PR Code. Act No. 238 clarifies that the national gross receipts tax will not be applicable to taxable years starting after December 31, 2014. Accordingly, during this quarter, the Corporation did not record national gross receipts tax expense. In March 31, 2014, a $1.5 million gross receipt tax expense was included as part of “Taxes, other than income taxes” in the consolidated statement of income and a $0.7 million benefit related to this credit was recorded as a reduction to the provision for income taxes.

      In February 2015, the Governor of Puerto Rico announced a proposal for a new tax code that would, among other things, replace the current 7% sales and use tax with a 16% value-added tax, while lowering income taxes. Legislative changes in tax laws could adversely impact our results of operations. On April 30, 2015, the legislature voted against the new tax code. New proposals or amendments to the tax code  have not yet been disclosed.

NOTE 21 – FAIR VALUE

Fair Value Measurement

The FASB authoritative guidance for fair value measurement defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  This guidance also establishes a fair value hierarchy for classifying financial instruments.  The hierarchy is based on whether the inputs to the valuation techniques used to measure fair value are observable or unobservable.  Three levels of inputs may be used to measure fair value:

Level 1	Valuations of Level 1 assets and liabilities are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. Level 1 assets and liabilities include equity securities that trade in an active exchange market, as well as certain U.S. Treasury and other U.S. government and agency securities and corporate debt securities that are traded by dealers or brokers in active markets.
Level 2	Valuations of Level 2 assets and liabilities are based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include (i) mortgage-backed securities for which the fair value is estimated based on the value of identical or comparable assets, (ii) debt securities with quoted prices that are traded less frequently than exchange-traded instruments, and (iii) derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.
Level 3	Valuations of Level 3 assets and liabilities are based on unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined by using pricing models for which the determination of fair value required significant management judgments estimation.

For 2015, there have been no transfers into or out of Level 1, Level 2 or Level 3 of the fair value hierarchy.

Financial Instruments Recorded at Fair Value on a Recurring Basis

Investment securities available for sale

The fair value of investment securities was the market value based on quoted market prices (as is the case with equity securities, Treasury notes, and non-callable U.S. Agency debt securities), when available (Level 1), or market prices for identical or comparable assets (as is the case with MBS and callable U.S. agency debt) that are based on observable market parameters, including benchmark yields, reported trades, quotes from brokers or dealers, issuer spreads, bids, offers and reference data including market research

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operations (Level 2). Observable prices in the market already consider the risk of nonperformance. If listed prices or quotes are not available, fair value is based upon models that use unobservable inputs due to the limited market activity of the instrument, as is the case with certain private label mortgage-backed securities held by the Corporation (Level 3).

Private label MBS are collateralized by fixed-rate mortgages on single-family residential properties in the United States; the interest rate on the securities is variable, tied to 3-month LIBOR and limited to the weighted average coupon of the underlying collateral. The market valuation represents the estimated net cash flows over the projected life of the pool of underlying assets applying a discount rate that reflects market observed floating spreads over LIBOR, with a widening spread based on a nonrated security. The market valuation is derived from a model that utilizes relevant assumptions such as prepayment rate, default rate, and loss severity on a loan level basis. The Corporation modeled the cash flow from the fixed-rate mortgage collateral using a static cash flow analysis according to collateral attributes of the underlying mortgage pool (i.e., loan term, current balance, note rate, rate adjustment type, rate adjustment frequency, rate caps, and others) in combination with prepayment forecasts obtained from a commercially available prepayment model (ADCO). The variable cash flow of the security is modeled using the 3-month LIBOR forward curve. Loss assumptions were driven by the combination of default and loss severity estimates, taking into account loan credit characteristics (loan-to-value, state, origination date, property type, occupancy loan purpose, documentation type, debt-to-income ratio, and other) to provide an estimate of default and loss severity. Refer to the table below for further information regarding qualitative information for all assets and liabilities measured at fair value using significant unobservable inputs (Level 3).

Derivative instruments

The fair value of most of the Corporation’s derivative instruments is based on observable market parameters and takes into consideration the credit risk component of paying counterparties, when appropriate, except when collateral is pledged. That is, on interest rate swaps, the credit risk of both counterparties is included in the valuation; and, on options and caps, only the seller's credit risk is considered. The derivative instruments, namely swaps and caps, were valued using a discounted cash flow approach using the related LIBOR and swap rate for each cash flow. Derivatives include interest rate swaps used for protection against rising interest rates. For these interest rate swaps, a credit component was not considered in the valuation since the Corporation has fully collateralized with investment securities any marked-to-market loss with the counterparty and, if there were market gains, the counterparty had to deliver collateral to the Corporation.

Although most of the derivative instruments are fully collateralized, a credit spread is considered for those that are not secured in full. The cumulative mark-to-market effect of credit risk in the valuation of derivative instruments for the quarters ended March 31,  2015 and 2014 was immaterial.

Assets and liabilities measured at fair value on a recurring basis, are summarized below:
	As of March 31, 2015								As of December 31, 2014
	Fair Value Measurements Using								Fair Value Measurements Using
(In thousands)	Level 1		Level 2		Level 3		Assets/Liabilities at Fair Value		Level 1		Level 2		Level 3		Assets/Liabilities at Fair Value
Assets:
Securities available for sale :
U.S. Treasury Securities	$	7,500	$	-	$	-	$	7,500	$	7,499	$	-	$	-	$	7,499
Noncallable U.S. agency debt		-		286,066		-		286,066		-		228,157		-		228,157
Callable U.S. agency debt and MBS		-		1,607,273		-		1,607,273		-		1,653,140		-		1,653,140
Puerto Rico government obligations		-		39,073		2,390		41,463		-		40,658		2,564		43,222
Private label MBS		-		-		31,824		31,824		-		-		33,648		33,648
Other investments held for sale		-		-		100		100		-		-		-		-
Derivatives, included in assets:
Interest rate swap agreements		-		-		-		-		-		33		-		33
Purchased interest rate cap agreements		-		1		-		1		-		6		-		6
Liabilities:
Derivatives, included in liabilities:
Interest rate swap agreements		-		-		-		-		-		33		-		33
Written interest rate cap agreement		-		1		-		1		-		6		-		6
Forward contracts		-		220		-		220		-		148		-		148

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The table below presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the quarters ended March 31, 2015 and 2014.

		Quarter ended March 31,
		2015		2014
Level 3 Instruments Only		Securities		Securities
(In thousands)		Available For Sale(1)		Available For Sale(1)
Beginning balance		$	36,212		43,292
Total gains (losses) (realized/unrealized):
Included in earnings			(156)		-
Included in other comprehensive income			619		964
Purchases			100		5,123
Principal repayments and amortization			(2,461)		(1,869)
Ending balance		$	34,314	$	47,510
(1)	Amounts mostly related to private label MBS.

The table below presents qualitative information for significant assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at March 31, 2015:
	March 31, 2015
(In thousands)	Fair Value		Valuation Technique	Unobservable Input	Range
Investment securities available-for-sale:
Private label MBS	$	31,824	Discounted cash flow	Discount rate	14.5%
				Prepayment rate	18.04% -100.00% (Weighted Average 32%)
				Projected Cumulative Loss Rate	0.00% -80.00% (Weighted Average 7.3%)
Puerto Rico Government Obligations		2,390	Discounted cash flow	Prepayment speed	2.89%

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Information about Sensitivity to Changes in Significant Unobservable Inputs

Private label MBS: The significant unobservable inputs in the valuation include probability of default, the loss severity assumption, and prepayment rates. Shifts in those inputs would result in different fair value measurements. Increases in the probability of default, loss severity assumptions, and prepayments rates in isolation would generally result in an adverse effect on the fair value of the instruments. Meaningful and possible shifts of each input were modeled to assess the effect on the fair value estimation.

Puerto Rico Government Obligations: The significant unobservable input used in the fair value measurement is the assumed prepayment rate. A significant increase (decrease) in the assumed rate would lead to a higher (lower) fair value estimate. Loss severity and probability of default are not included as significant unobservable variables because the notes are guaranteed by the Puerto Rico Housing Finance Authority (“PRHFA”). The PRHFA credit risk is modeled by discounting the cash flows using a curve appropriate to the PRHFA credit rating.

The table below summarizes changes in unrealized gains and losses recorded in earnings for the quarters ended March 31, 2015 and 2014 for Level 3 assets and liabilities that are still held at the end of each period:
		Changes in Unrealized Losses		Changes in Unrealized Losses
		(Quarter ended March 31, 2015)		(Quarter Ended March 31, 2014)
Level 3 Instruments Only	Securities		Securities
(In thousands)	Available For Sale		Available For Sale
Changes in unrealized losses relating to assets still held at reporting date:
Net impairment losses on investment securities (credit component)		$ (156)		$ -

Additionally, fair value is used on a nonrecurring basis to evaluate certain assets in accordance with GAAP. Adjustments to fair value usually result from the application of lower-of-cost or market accounting (e.g., loans held for sale carried at the lower-of-cost or fair value and repossessed assets) or write downs of individual assets (e.g., goodwill, loans).

As of March 31, 2015, impairment or valuation adjustments were recorded for assets recognized at fair value on a non-recurring basis as shown in the following table:
		Carrying value as of March 31, 2015						Losses recorded for the Quarter Ended March 31, 2015
		Level 1		Level 2		Level 3
			(In thousands)
Loans receivable (1)		$	-	$	-	$	436,944	$	(13,725)
Other Real Estate Owned (2)			-		-		122,628		(2,711)
Mortgage servicing rights (3)			-		-		22,973		(38)
Loans Held For Sale (4)			-		-		54,588		-
(1)	Mainly impaired commercial and construction loans.  The impairment was generally measured based on the fair value of the collateral. The fair values were derived from external appraisals that take into consideration prices in observed transactions involving similar assets in similar locations but adjusted for specific characteristics and assumptions of the collateral (e.g., absorption rates), which are not market observable.
(2)	The fair value was derived from appraisals that take into consideration prices in observed transactions involving similar assets in similar locations but adjusted for specific characteristics and assumptions of the properties (e.g., absorption rates and net operating income of income producing properties), which are not market observable.  Losses were related to market valuation adjustments after the transfer of the loan to the OREO portfolio.
(3)	Fair value adjustments to mortgage servicing rights were mainly due to assumptions associated with mortgage prepayment rates. The Corporation carries its mortgage servicing rights at the lower of cost or market, measured at fair value on a non-recurring basis.  Assumptions for the value of mortgage servicing rights included:  Prepayment rate-10.25%, Discount Rate-10.62%.
(4)	The value of these loans was derived from external appraisals, adjusted for specific characteristics of the loans, and, for loans with signed sale agreements, the value was determined based on the sales price in such agreements.

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As of March 31, 2014, impairment or valuation adjustments were recorded for assets recognized at fair value on a non-recurring basis as shown in the following table:
		Carrying value as of March 31, 2014						(Losses) Gain recorded for the Quarter Ended March 31, 2014
		Level 1		Level 2		Level 3
		(In thousands)
Loans receivable (1)		$	-	$	-	$	478,393	$	(23,793)
Other Real Estate Owned (2)			-		-		138,622		(4,747)
Mortgage servicing rights (3)			-		-		22,026		(219)
Loans Held For Sale (4)			-		-		54,755		-
(1)	Mainly impaired commercial and construction loans.  The impairment was generally measured based on the fair value of the collateral. The fair values were derived from external appraisals that take into consideration prices in observed transactions involving similar assets in similar locations but adjusted for specific characteristics and assumptions of the collateral (e.g. absorption rates), which are not market observable.
(2)	The fair value was derived from appraisals that take into consideration prices in observed transactions involving similar assets in similar locations but adjusted for specific characteristics and assumptions of the properties (e.g., absorption rates and net operating income of income producing properties), which are not market observable.  Losses were related to market valuation adjustments after the transfer of the loan to the OREO portfolio.
(3)	Fair value adjustments to the mortgage servicing rights were mainly due to assumptions associated with mortgage prepayments rates. The Corporation carries its mortgage servicing rights at the lower-of-cost or market, measured at fair value on a non-recurring basis. Assumptions for the value of mortgage servicing rights included: Prepayment Rate-9.10%, Discount Rate-10.61%.
(4)	The value of these loans was derived from external appraisals, adjusted for specific characteristics of the loans, and, for loans with signed sale agreements, the value was determined based on the sales price in such agreements.

Qualitative information regarding the fair value measurements for Level 3 financial instruments is as follows:
	March 31, 2015
	Method	Inputs
Loans	Income, Market, Comparable Sales, Discounted Cash Flows	External appraised values; probability weighting of broker price opinions; management assumptions regarding market trends or other relevant factors
OREO	Income, Market, Comparable Sales, Discounted Cash Flows	External appraised values; probability weighting of broker price opinions; management assumptions regarding market trends or other relevant factors
Mortgage servicing rights	Discounted Cash Flow	Weighted average prepayment rate of 10.25%; weighted average discount rate of 10.62%

The following is a description of the valuation methodologies used for instruments that are not measured or reported at fair value on a recurring basis or reported at fair value on a non-recurring basis. The estimated fair value was calculated using certain facts and assumptions, which vary depending on the specific financial instrument.

 Cash and due from banks and money market investments

The carrying amounts of cash and due from banks and money market investments are reasonable estimates of their fair value. Money market investments include held-to-maturity securities, which have a contractual maturity of three months or less. The fair value of these securities is based on quoted market prices in active markets that incorporate the risk of nonperformance.

Other equity securities

Equity or other securities that do not have a readily available fair value are stated at their net realizable value, which management believes is a reasonable proxy for their fair value. This category is principally composed of stock that is owned by the Corporation to comply with FHLB regulatory requirements. The realizable value of the FHLB stock equals its cost as this stock can be freely redeemed at par.

Loans receivable, including loans held for sale

The fair value of loans held for investment and of mortgage loans held for sale was estimated using discounted cash flow analyses, based on interest rates currently being offered for loans with similar terms and credit quality and with adjustments that the Corporation’s management believes a market participant would consider in determining fair value. Loans were classified by type, such

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as commercial, residential mortgage, and automobile. These asset categories were further segmented into fixed- and adjustable-rate categories.  Valuations are carried out based on categories and not on a loan-by-loan basis.  The fair values of performing fixed-rate and adjustable-rate loans were calculated by discounting expected cash flows through the estimated maturity date. This fair value is not currently an indication of an exit price as that type of assumption could result in a different fair value estimate. The fair value of credit card loans was estimated using a discounted cash flow method and excludes any value related to a customer account relationship. Other loans with no stated maturity, like credit lines, were valued at book value. Prepayment assumptions were considered for non-residential loans. For residential mortgage loans, prepayment estimates were based on a prepayments model that combined both a historical calibration and current market prepayment expectations.  Discount rates were based on the U.S. Treasury and LIBOR/Swap Yield Curves at the date of the analysis, and included appropriate adjustments for expected credit losses and liquidity.  For impaired collateral dependent loans, the impairment was primarily measured based on the fair value of the collateral, which is derived from appraisals that take into consideration prices in observable transactions involving similar assets in similar locations.The market valuation of the loans acquired from Doral Bank in the first quarter of 2015 was derived from a model of forecasted cash flows that uses market-driven assumptions such as prepayment rate, default rate, and loss severity on a loan level basis. The forecasted cash flows are then discounted by yields observed in sales of similar portfolios in Puerto Rico and the continental U.S. 

Deposits

The estimated fair value of demand deposits and savings accounts, which are deposits with no defined maturities, equals the amount payable on demand at the reporting date. The fair values of retail fixed-rate time deposits, with stated maturities, are based on the present value of the future cash flows expected to be paid on the deposits. The cash flows were based on contractual maturities; no early repayments were assumed. Discount rates were based on the LIBOR yield curve.

The estimated fair value of total deposits excludes the fair value of core deposit intangibles, which represents, the value of the customer relationship measured by the value of demand deposits and savings deposits that bear a low or zero rate of interest and do not fluctuate in response to changes in interest rates.

The fair value of brokered CDs, which are included within deposits, is determined using discounted cash flow analyses over the full term of the CDs. The fair value of the CDs is computed using the outstanding principal amount. The discount rates used were based on brokered CD market rates as of March 31, 2015.  The fair value does not incorporate the risk of nonperformance, since interests in brokered CDs are generally sold by brokers in amounts of less than $250,000 and, therefore, are insured by the FDIC.

Securities sold under agreements to repurchase

Some repurchase agreements reprice at least quarterly, and their outstanding balances are estimated to be their fair value. Where longer commitments are involved, fair value is estimated using exit price indications of the cost of unwinding the transactions as of the end of the reporting period. The brokers who are the counterparties provide these indications. Securities sold under agreements to repurchase are fully collateralized by investment securities.

Advances from FHLB

The fair value of advances from FHLB with fixed maturities is determined using discounted cash flow analyses over the full term of the borrowings, using indications of the fair value of similar transactions. The cash flows assume no early repayment of the borrowings. Discount rates are based on the LIBOR yield curve.   Advances from FHLB are fully collateralized by mortgage loans and, to a lesser extent, investment securities.

Other borrowings

Other borrowings consist of junior subordinated debentures. Projected cash flows from the debentures were discounted using the Bloomberg BB Finance curve plus a credit spread. This credit spread was estimated using the difference in yield curves between swap rates and a yield curve that considers the industry and credit rating of the Corporation as issuer of the note at a tenor comparable to the time to maturity of the debentures.

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The following table presents the estimated fair value and carrying value of financial instruments as of March 31, 2015 and December 31, 2014
	Total Carrying Amount in Statement of Financial Condition March 31, 2015		Fair Value Estimated March 31, 2015		Level 1		Level 2		Level 3
	(In thousands)
Assets:
Cash and due from banks and money
market investments	$	984,436	$	984,436	$	984,436	$	-	$	-
Investment securities available
for sale		1,974,226		1,974,226		7,500		1,932,412		34,314
Other equity securities		26,185		26,185		-		26,185		-
Loans held for sale		81,723		82,942		-		28,301		54,641
Loans held for investment		9,485,372
Less: allowance for loan and lease losses		(226,064)
Loans held for investment, net of allowance	$	9,259,308		9,115,707		-		-		9,115,707
Derivatives, included in assets		1		1		-		1		-
Liabilities:
Deposits		9,841,038		9,852,630		-		9,852,630		-
Securities sold under agreements to repurchase		900,000		966,365		-		966,365		-
Advances from FHLB		325,000		326,087		-		326,087		-
Other borrowings		231,959		169,935		-		-		169,935
Derivatives, included in liabilities		221		221		-		221		-

	Total Carrying Amount in Statement of Financial Condition December 31, 2014		Fair Value Estimated December 31, 2014		Level 1		Level 2		Level 3
	(In thousands)
Assets:
Cash and due from banks and money
market investments	$	796,108	$	796,108	$	796,108	$	-	$	-
Investment securities available
for sale		1,965,666		1,965,666		7,499		1,921,955		36,212
Other equity securities		25,752		25,752		-		25,752		-
Loans held for sale		76,956		77,888		-		23,247		54,641
Loans held for investment		9,262,436
Less: allowance for loan and lease losses		(222,395)
Loans held for investment, net of allowance	$	9,040,041		8,844,659		-		-		8,844,659
Derivatives, included in assets		39		39		-		39		-
Liabilities:
Deposits		9,483,945		9,486,325		-		9,486,325		-
Securities sold under agreements to repurchase		900,000		958,715		-		958,715		-
Advances from FHLB		325,000		324,376		-		324,376		-
Other borrowings		231,959		162,344		-		-		162,344
Derivatives, included in liabilities		187		187		-		187		-

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NOTE 22 – SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information is as follows:

	Quarter  Ended March 31,
	2015		2014
	(In thousands)
Cash paid for:
Interest on borrowings	$	24,502	$	23,359
Income tax		82		113
Non-cash investing and financing activities:
Additions to other real estate owned		12,702		8,176
Additions to auto and other repossessed assets		20,464		20,771
Capitalization of servicing assets		1,073		1,052
Loan securitizations		46,914		50,792
Preferred stock exchanged for new common stock issued:
Preferred stock exchanged (Series A through E)		-		6,024
New common stock issued		-		5,645
Fair value of assets acquired (liabilities assumed) in the Doral Bank transaction:
Loans		311,410		-
Premises and equipment, net		5,450		-
Core deposit intangible		5,820		-
Deposits		(523,517)		-

NOTE 23 – SEGMENT INFORMATION

Based upon the Corporation’s organizational structure and the information provided to the Chief Executive Officer of the Corporation and, to a lesser extent, the Board of Directors, the operating segments are driven primarily by the Corporation’s lines of business for its operations in Puerto Rico, the Corporation’s principal market, and by geographic areas for its operations outside of Puerto Rico.  As of March 31, 2015, the Corporation had six reportable segments: Commercial and Corporate Banking; Mortgage Banking; Consumer (Retail) Banking; Treasury and Investments; United States Operations, and Virgin Islands Operations.  Management determined the reportable segments based on the internal reporting used to evaluate performance and to assess where to allocate resources. Other factors such as the Corporation’s organizational chart, nature of the products, distribution channels, and the economic characteristics of the product were also considered in the determination of the reportable segments.

The Commercial and Corporate Banking segment consists of the Corporation’s lending and other services for large customers represented by specialized and middle-market clients and the public sector. The Commercial and Corporate Banking segment offers commercial loans, including commercial real estate and construction loans, and floor plan financings, as well as other products, such as cash management and business management services. The Mortgage Banking segment consists of the origination, sale, and servicing of a variety of residential mortgage loans. The Mortgage Banking segment also acquires and sells mortgages in the secondary markets.  In addition, the Mortgage Banking segment includes mortgage loans purchased from other local banks and mortgage bankers.  The Consumer (Retail) Banking segment consists of the Corporation’s consumer lending and deposit-taking activities conducted mainly through its branch network and loan centers. The Treasury and Investments segment is responsible for the Corporation’s investment portfolio and treasury functions executed to manage and enhance liquidity.  This segment lends funds to the Commercial and Corporate Banking, Mortgage Banking and Consumer (Retail) Banking segments to finance their lending activities and borrows from those segments and from the United States Operations segment.  The Consumer (Retail) Banking and the United States Operations segments also lend funds to other segments. The interest rates charged or credited by Treasury and Investments, the Consumer (Retail) Banking and the United States Operations segments are allocated based on market rates. The difference between the allocated interest income or expense and the Corporation’s actual net interest income from centralized management of funding costs is reported in the Treasury and Investments segment. The United States Operations segment consists of all banking activities conducted by FirstBank in the United States mainland, including commercial and retail banking services.  The Virgin Islands Operations segment consists of all banking activities conducted by the Corporation in the USVI and BVI, including commercial and retail banking services.

The accounting policies of the segments are the same as those referred to in Note 1- “Nature of Business and Summary of Significant Accounting Policies,” in the audited consolidated financial statements of the Corporation for the year ended December 31, 2014, which are included in the Corporation’s 2014 Annual Report on Form 10-K.

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The Corporation evaluates the performance of the segments based on net interest income, the estimated provision for loan and lease losses, non-interest income, and direct non-interest expenses. The segments are also evaluated based on the average volume of their interest-earning assets less the allowance for loan and lease losses.

The following table presents information about the reportable segments:
(In thousands)	Mortgage Banking		Consumer (Retail) Banking		Commercial and Corporate		Treasury and Investments		United States Operations		Virgin Islands Operations		Total
For the quarter ended March 31, 2015:
Interest income	$	33,876	$	49,836	$	34,803	$	13,067	$	11,231	$	9,672	$	152,485
Net (charge) credit for transfer of funds		(11,236)		3,684		(3,795)		7,754		3,593		-		-
Interest expense		-		(5,657)		-		(16,007)		(4,339)		(835)		(26,838)
Net interest income		22,640		47,863		31,008		4,814		10,485		8,837		125,647
(Provision) release for loan and lease losses		(6,963)		(16,685)		(9,093)		-		2,133		(2,362)		(32,970)
Non-interest income		3,399		12,417		524		(100)		524		2,522		19,286
Direct non-interest expenses		(8,065)		(31,559)		(7,979)		(1,339)		(7,183)		(8,580)		(64,705)
Segment income	$	11,011	$	12,036	$	14,460	$	3,375	$	5,959	$	417	$	47,258
Average earnings assets	$	2,492,247	$	2,045,277	$	3,028,358	$	2,764,058	$	971,887	$	639,162	$	11,940,989
(In thousands)	Mortgage Banking		Consumer (Retail) Banking		Commercial and Corporate		Treasury and Investments		United States Operations		Virgin Islands Operations		Total
For the quarter ended March 31, 2014:
Interest income	$	25,748	$	55,812	$	42,299	$	15,583	$	10,896	$	10,233	$	160,571
Net (charge) credit for transfer of funds		(8,546)		3,635		(2,999)		5,800		2,110		-		-
Interest expense		-		(6,796)		-		(16,761)		(4,797)		(897)		(29,251)
Net interest income		17,202		52,651		39,300		4,622		8,209		9,336		131,320
(Provision) release for loan and lease losses		(3,384)		(20,495)		(13,345)		-		5,959		(650)		(31,915)
Non-interest income (loss)		3,102		10,630		1,767		53		441		1,967		17,960
Direct non-interest expenses		(9,832)		(32,015)		(12,578)		(1,126)		(7,220)		(9,024)		(71,795)
Segment income	$	7,088	$	10,771	$	15,144	$	3,549	$	7,389	$	1,629	$	45,570
Average earnings assets	$	1,955,990	$	2,006,395	$	3,921,439	$	2,710,930	$	846,152	$	655,568	$	12,096,474

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The following table presents a reconciliation of the reportable segment financial information to the consolidated totals:
		Quarter Ended
		March 31,
		2015		2014
Net income:
Total income for segments and other		$	47,258	$	45,570
Other non-interest gain (loss) (1)			13,443		(6,610)
Other operating expenses (2)			(27,023)		(20,990)
Income before income taxes			33,678		17,970
Income tax expense			(8,032)		(887)
Total consolidated net income		$	25,646	$	17,083
Average assets:
Total average earning assets for segments		$	11,940,989	$	12,096,474
Other average earning assets (1)			-		6,570
Average non-earning assets			934,999		671,146
Total consolidated average assets		$	12,875,988	$	12,774,190
(1)	The bargain purchase gain on the acquisition of assets and assumption of deposits from Doral Bank in 2015 as well as the activities related to the Bank's equity interest in CPG/GS are presented as an Other non-interest income (loss) and the investment in CPG/GS is presented as Other average earning assets in the tables above.
(2)	Expenses pertaining to corporate administrative functions that support the operating segment but are not specifically attributable to or managed by any segment are not included in the reported financial results of the operating segments. The unallocated corporate expenses include certain general and administrative expenses and related depreciation and amortization expenses.

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NOTE 24 – REGULATORY MATTERS, COMMITMENTS AND CONTINGENCIES

The Corporation is subject to various regulatory capital requirements imposed by the federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material adverse effect on the Corporation’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Corporation must meet specific capital guidelines that involve quantitative measures of the Corporation’s assets and liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Corporation’s capital amounts and classification are also subject to qualitative judgment and adjustment by the regulators with respect to minimum capital requirements, components, risk weightings, and other factors.

FirstBank received notification from the FDIC that the Consent Order under which the Bank had been operating since June 2, 2010 was terminated effective April 29, 2015.  Although the Consent Order has been terminated, First BanCorp. is still subject to the Written Agreement that the Corporation entered with the Federal Reserve Bank of New York on June 3, 2010.

The Written Agreement provides, among other things, that the holding company must serve as a source of strength to FirstBank, and that, except with the consent generally of the New York FED and Federal Reserve Board, (1) the holding company may not pay dividends to stockholders or receive dividends from FirstBank, (2) the holding company and its nonbank subsidiaries may not make payments on trust-preferred securities or subordinated debt, and (3) the holding company cannot incur, increase, or guarantee debt or repurchase any capital securities. The Written Agreement also requires that the holding company submit a capital plan that reflects sufficient capital at First BanCorp. on a consolidated basis, which must be acceptable to the New York FED, and follow certain guidelines with respect to the appointment or change in responsibilities of senior officers. The foregoing summary is not complete and is qualified in all respects by reference to the actual language of the Written Agreement.

The Corporation submitted its Capital Plan setting forth its plans for how to improve capital positions to comply with the Written Agreement over time. In addition to the Capital Plan, the Corporation submitted to its regulators a liquidity and brokered CD plan, including a contingency funding plan, a non-performing asset reduction plan, a budget and profit plan, a strategic plan, and a plan for the reduction of classified and special mention assets.  As of March 31, 2015, the Corporation had completed all of the items included in the Capital Plan and is continuing to work on reducing non-performing loans. The Written Agreement also requires the submission to the regulators of quarterly progress reports.

In July 2013, the U.S. banking regulators approved a revised regulatory capital framework for U.S. banking organizations (the “Basel III rules”) that is based on international regulatory capital requirements adopted by the Basel Committee on Banking Supervision over the past several years. The Basel III rules introduce new minimum capital ratios and capital conservation buffer requirements, change the composition of regulatory capital, require a number of new adjustments to and deductions from regulatory capital, and introduce a new “Standardized Approach” for the calculation of risk-weighted assets. The new minimum regulatory capital requirements and the Standardized Approach for the calculation of risk-weighted assets became effective for the Corporation and FirstBank on January 1, 2015.  The phase-in period for certain deductions and adjustments to regulatory capital began on January 1, 2015 and will be completed on January 1, 2018. The phase-in period for the capital conservation buffer requirements begins on January1, 2016 and will be completed on January 1, 2019.

The Basel III rules introduce a new and separate ratio of Common Equity Tier 1 capital (“CET1”) to risk-weighted assets. CET1, a narrower subcomponent of total Tier 1 capital, generally consists of common stock and related surplus, retained earnings, accumulated other comprehensive income (“AOCI”), and qualifying minority interests. Certain banking organizations, however, including the Corporation and FirstBank, were allowed to make a one-time permanent election in early 2015 to continue to exclude AOCI items. The Corporation and FirstBank have elected to permanently exclude capital in AOCI in order to avoid significant variations in the level of capital depending upon the impact of interest rate fluctuations on the fair value of the securities portfolio.  In addition, the Basel III rules require the Corporation to maintain an additional CET1 capital conservation buffer of 2.5%. The capital conservation buffer must be maintained to avoid limitations on both (i) capital distributions (e.g. repurchases of capital instruments or dividend or interest payments on capital instruments), and (ii) discretionary bonus payments to executive officers and heads of major business lines. Under the fully phased-in rules, the Corporation will be required to maintain: (i) a minimum CET1 to risk-weighted assets ratio of at least 4.5%, plus the 2.5% “capital conservation buffer,” resulting in a required minimum CET1 ratio of at least 7%, (ii) a minimum ratio of total Tier 1 capital to risk-weighted assets of at least 6.0%, plus the 2.5% capital conservation buffer, resulting in a required minimum Tier 1 capital ratio of 8.5%, (iii) a minimum ratio of total Tier 1 plus Tier 2 capital to risk-weighted assets of at least 8.0%, plus the 2.5% capital conservation buffer, resulting in a required minimum total capital ratio of 10.5%, and (iv) a required minimum leverage ratio of 4%, calculated as the ratio of Tier 1 capital to average on-balance sheet (non-risk adjusted) assets. The phase-in of the capital conservation buffer will begin on January 1, 2016 with a first year requirement of 0.625% of additional CET1, which will be progressively increased over a four-year period, increasing by that same percentage amount on each subsequent January 1 until it reaches the fully phased-in 2.5% CET1 requirement on January 1, 2019.

In addition, the Basel III rules require a number of new deductions from and adjustments to CET1, including deductions from CET1 for certain intangible assets, and deferred tax assets dependent upon future taxable income; the four-year phase-in period for these adjustments generally began on January 1, 2015.  Mortgage servicing assets and deferred tax assets attributable to temporary

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differences, among others, are required to be deducted to the extent that any one such category exceeds 10% of CET1 or all such categories in the aggregate exceed 15% of CET1.

      In addition, the Federal Reserve Board’s Basel III rules require that certain non-qualifying capital instruments, including cumulative preferred stock and trust preferred securities (“TRuPs”), be excluded from Tier 1 capital. In general, banking organizations such as the Corporation began to phase out TRuPs from Tier 1 capital on January 1, 2015. The Corporation is allowed to include 25% of the $225 million outstanding qualifying TRuPs as Tier 1 capital in 2015 and the TRuPs must be fully phased out from Tier 1 capital by January 1, 2016. However, the Corporation’s TRuPs may continue to be included in Tier 2 capital until the instruments are redeemed or mature.

The Basel III rules also revise the “prompt corrective action” (“PCA”) regulations that apply to depository institutions, including FirstBank, pursuant to Section 38 of the Federal Deposit Insurance Act by (i) introducing a separate CET1 ratio requirement for each PCA capital category (other than critically undercapitalized) with the required CET1 ratio being 6.5% for well-capitalized status; (ii) increasing the minimum Tier 1 capital ratio requirement for each PCA capital category with the minimum Tier 1 capital ratio for well-capitalized status being 8% (as compared to the previous 6%); and (iii) eliminating the provision that allowed a bank with a composite supervisory rating of 1 to have a 3% leverage ratio and still be adequately capitalized and maintaining the minimum leverage ratio for well-capitalized status at 5%. The Basel III rules do not change the total risk-based capital requirement (10% for well-capitalized status) for any PCA capital category. The new PCA requirements became effective on January 1, 2015.

The Corporation and FirstBank compute risk weighted assets using the Standardized Approach required by the Basel III rules. The Standardized Approach for risk-weightings has expanded the risk-weighting categories from the four major risk-weighting categories under the previous regulatory capital rules (0%, 20%, 50%, and 100%) to a much larger and more risk-sensitive number of categories, depending on the nature of the assets. In a number of cases, the Standardized Approach results in higher risk weights for a variety of asset categories. Specific changes to the risk-weightings of assets include, among other things: (i) applying a 150% risk weight instead of a 100% risk weight for certain high volatility commercial real estate acquisition, development and construction loans, (ii) assigning a 150% risk weight to exposures that are 90 days past due (other than qualifying residential mortgage exposures, which remain at an assigned risk-weighting of 100%), (iii) establishing a 20% credit conversion factor for the unused portion of a commitment with an original maturity of one year or less that is not unconditionally cancellable, in contrast to the 0% risk-weighting under the prior rules and (iv) capital is required to cover the risk of unexpected losses due to failure of a customer or counterparty to meet its financial obligations in accordance with contractual terms (repo-style transactions).

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	The Corporation's and its banking subsidiary's regulatory capital positions as of  March 31, 2015 and December 31, 2014 were as follows:
		Regulatory Requirements
		Actual			For Capital Adequacy Purposes			To be Well-Capitalized-Regular Thresholds
		Amount		Ratio	Amount		Ratio	Amount		Ratio
		(Dollars in thousands)
As of March 31, 2015 (Basel III)
Total Capital (to
Risk-Weighted Assets)
First BanCorp.		$	1,828,253	19.20%	$	761,694	8%		N/A	N/A
FirstBank		$	1,798,122	18.89%	$	761,410	8%	$	951,763	10%
Common Equity Tier 1 Capital
(to Risk-Weighted Assets)
First BanCorp.		$	1,537,862	16.15%	$	428,453	4.5%		N/A	N/A
FirstBank		$	1,486,508	15.62%	$	428,293	4.5%	$	618,646	6.5%
Tier I Capital (to
Risk-Weighted Assets)
First BanCorp.		$	1,537,862	16.15%	$	571,271	6%		N/A	N/A
FirstBank		$	1,676,525	17.61%	$	571,058	6%	$	761,410	8%
Leverage ratio
First BanCorp.		$	1,537,862	12.16%	$	505,698	4%		N/A	N/A
FirstBank		$	1,676,525	13.28%	$	505,036	4%	$	631,295	5%
As of December 31, 2014 (Basel I)
Total Capital (to
Risk-Weighted Assets)
First BanCorp.		$	1,748,120	19.70%	$	709,723	8%		N/A	N/A
FirstBank		$	1,717,432	19.37%	$	709,395	8%	$	886,744	10%
Tier I Capital (to
Risk-Weighted Assets)
First BanCorp.		$	1,636,004	18.44%	$	354,861	4%		N/A	N/A
FirstBank		$	1,605,367	18.10%	$	354,698	4%	$	532,046	6%
Leverage ratio
First BanCorp.		$	1,636,004	13.27%	$	493,159	4%		N/A	N/A
FirstBank		$	1,605,367	13.04%	$	492,468	4%	$	615,585	5%

The Corporation enters into financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments may include commitments to extend credit and commitments to sell mortgage loans at fair value. As of March 31, 2015, commitments to extend credit amounted to approximately $1.1 billion, of which $645.6 million relates to credit card loans. Commercial and Financial standby letters of credit amounted to approximately $44.5 million. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any conditions established in the contract. Commitments generally have fixed expiration dates or other termination clauses. Since certain commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. For most of the commercial lines of credit, the Corporation has the option to reevaluate the agreement prior to additional disbursements. In the case of credit cards and personal lines of credit, the Corporation can cancel the unused credit facility at any time and without cause. Generally, the Corporation’s mortgage banking activities do not enter into interest rate lock agreements with prospective borrowers.

As of March 31, 2015, First BanCorp. and its subsidiaries were defendants in various legal proceedings arising in the ordinary course of business. Management believes that the final disposition of these matters, to the extent not previously provided for, will not have a material adverse effect, individually or in the aggregate, on the Corporation’s financial position, results of operations or cash flows.

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NOTE 25 – FIRST BANCORP. (HOLDING COMPANY ONLY) FINANCIAL INFORMATION

The following condensed financial information presents the financial position of the Holding Company only as of March 31,  2015 and December 31, 2014 and the results of its operations for the quarters ended March 31, 2015 and 2014.

Statements of Financial Condition
	As of March 31,			As of December 31,
	2015		2014
	(In thousands)
Assets
Cash and due from banks	$	29,726	$	30,380
Money market investments		6,111		6,111
Other investment securities		285		285
Loans held for investment, net		298		322
Investment in First Bank Puerto Rico, at equity		1,900,671		1,866,090
Investment in First Bank Insurance Agency, at equity		13,356		11,890
Investment in FBP Statutory Trust I		3,093		3,093
Investment in FBP Statutory Trust II		3,866		3,866
Other assets		4,617		4,357
Total assets	$	1,962,023	$	1,926,394
Liabilities and Stockholders' Equity
Liabilities:
Other borrowings	$	231,959	$	231,959
Accounts payable and other liabilities		24,314		22,692
Total liabilities		256,273		254,651
Stockholders' equity		1,705,750		1,671,743
Total liabilities and stockholders' equity	$	1,962,023	$	1,926,394

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Statements of Income
	Quarter Ended
	March 31,		March 31,
	2015		2014
	(In thousands)
Income:
Interest income on money market investments	$	5	$	5
Other income		56		53
		61		58
Expense:
Notes payable and other borrowings		1,817		1,760
Other operating expenses		604		506
		2,421		2,266
Loss before income taxes and equity in undistributed
earnings of subsidiaries		(2,360)		(2,208)
Income tax provision		-		(2)
Equity in undistributed earnings of subsidiaries		28,006		19,293
Net income	$	25,646	$	17,083
Other comprehensive income, net of tax		7,140		22,539
Comprehensive income	$	32,786	$	39,622

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NOTE 26 – SUBSEQUENT EVENTS

As discussed in Note 24, FirstBank received notification from the FDIC that the Consent Order under which the Bank had been operating since June 2, 2010 was terminated effective April 29, 2015.  Although the Consent Order has been terminated, First BanCorp. is still subject to the Written Agreement that the Corporation entered into with the Federal Reserve Bank of New York on June 3, 2010.

The Corporation has performed an evaluation of events occurring subsequent to March 31, 2015; management has determined that there are no additional events occurring in this period, except as previously disclosed, that required disclosure in or adjustment to the accompanying financial statements.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

                 OPERATIONS (MD&A)

SELECTED FINANCIAL DATA
		Quarter ended
(In thousands, except for per share and financial ratios)		March 31,
		2015		2014
Condensed Income Statements:
	Total interest income	$	152,485	$	160,571
	Total interest expense		26,838		29,251
	Net interest income		125,647		131,320
	Provision for loan and lease losses		32,970		31,915
	Non-interest income		32,729		11,350
	Non-interest expenses		91,728		92,785
	Income before income taxes		33,678		17,970
	Income tax expense		(8,032)		(887)
	Net income		25,646		17,083
	Net income attributable to common stockholders		25,646		17,462
Per Common Share Results:
	Net earnings per share-basic	$	0.12	$	0.08
	Net earnings per share-diluted	$	0.12	$	0.08
	Cash dividends declared	$	-	$	-
	Average shares outstanding		210,686		205,732
	Average shares outstanding diluted		212,746		206,876
	Book value per common share	$	7.81	$	5.74
	Tangible book value per common share (1)	$	7.55	$	5.48
Selected Financial Ratios (In Percent):
Profitability:
	Return on Average Assets		0.81		0.54
	Interest Rate Spread (2)		4.13		4.25
	Net Interest Margin (2)		4.31		4.43
	Return on Average Total Equity		6.15		5.55
	Return on Average Common Equity		6.29		5.85
	Average Total Equity to Average Total Assets		13.13		9.77
	Tangible common equity ratio (1)		12.33		8.97
	Dividend payout ratio		-		-
	Efficiency ratio (3)		57.92		65.03
Asset Quality:
	Allowance for loan and lease losses to total loans held for investment		2.38		2.79
	Net charge-offs (annualized) to average loans (4)		1.25		2.11
	Provision for loan and lease losses to net charge-offs		112.52		62.59
	Non-performing assets to total assets (4)		5.74		5.70
	Non-performing loans held for investment to total loans held for investment (4)		5.94		5.45
	Allowance to total non-performing loans held for investment (4)		40.11		51.13
	Allowance to total non-performing loans held for investment,
	excluding residential real estate loans (4)		57.82		76.45
Other Information:
	Common Stock Price: End of period	$	6.20	$	5.44
		As of March 31, 2015		As of December 31, 2014
Balance Sheet Data:
	Loans, including loans held for sale	$	9,567,095	$	9,339,392
	Allowance for loan and lease losses		226,064		222,395
	Money market and investment securities		2,217,376		2,008,380
	Intangible assets		54,634		49,907
	Deferred tax asset, net		310,869		313,045
	Total assets		13,147,919		12,727,835
	Deposits		9,841,038		9,483,945
	Borrowings		1,456,959		1,456,959
	Total preferred equity		36,104		36,104
	Total common equity		1,680,857		1,653,990
	Accumulated other comprehensive loss, net of tax		(11,211)		(18,351)
	Total equity		1,705,750		1,671,743
__________________
(1)	Non-GAAP measure. Refer to "Capital" below for additional information about the components and a reconciliation of these measures.
(2)	On a tax-equivalent basis and excluding the changes in fair value of derivative instruments (see "Net Interest Income" below for a reconciliation of these non-GAAP measures).
(3)	Non-interest expense to the sum of net interest income and non-interest income. The denominator includes non-recurring income and changes in the fair value of derivative instruments.
(4)	Loans used in the denominator in calculating net charge-offs, non performing loan and non-performing asset rates include purchased credit-impaired ("PCI") loans. However, the Corporation separately tracks and reports PCI loans and excludes these from non-performing loan and non-performing asset statistics.

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The following Management’s Discussion and Analysis of Financial Condition and Results of Operations relates to the accompanying unaudited consolidated financial statements of First BanCorp. (the “Corporation” or “First BanCorp.”) and should be read in conjunction with such financial statements and the notes thereto.

EXECUTIVE SUMMARY

First BanCorp. is a diversified financial holding company headquartered in San Juan, Puerto Rico offering a full range of financial products to consumers and commercial customers through various subsidiaries. First BanCorp. is the holding company of FirstBank Puerto Rico (“FirstBank” or the “Bank”) and FirstBank Insurance Agency. Through its wholly owned subsidiaries, the Corporation operates offices in Puerto Rico, the United States Virgin Islands and British Virgin Islands, and the State of Florida (USA), concentrating in commercial banking, residential mortgage loan originations, finance leases, credit cards, personal loans, small loans, auto loans, and insurance agency and broker-dealer activities.

RECENT SIGNIFICANT EVENTS

Consent Order Lifted

As described in Note 24 to the consolidated unaudited financial statements, Regulatory Matters, Commitment and Contingencies, FirstBank received notification from the FDIC that the Consent Order under which the Bank had been operating since June 2, 2010 was terminated effective April 29, 2015.  Although the Consent Order has been terminated, First BanCorp. is still subject to the Written Agreement that the Corporation entered into with the Federal Reserve Bank of New York (the “New York FED” or “Federal Reserve”).

Doral Bank Transaction

On February 27, 2015, FirstBank acquired 10 Puerto Rico branches of Doral Bank, assumed $522.7 million in deposits related to such branches, acquired approximately $324.8 million in principal balance of loans, primarily residential mortgage loans, acquired $5.5 million of property, plant and equipment and received $217.7 million of cash, through an alliance with other co-bidders on the failed Doral Bank (the “Doral Bank transaction”). This transaction solidifies FirstBank as the second largest bank in Puerto Rico, enhances FirstBank’s presence in geographical areas in Puerto Rico with growth potential for deposits and mortgage origination, two of the main business strategies of the institution, and provides a stable source of low-cost deposits that are expected to support and enhance future growth activities.

Under the FDIC’s bidding format, Banco Popular of Puerto Rico (“Popular”) was the lead bidder and party to the purchase agreement with the FDIC covering all assets and deposits acquired by Popular and its alliance co-bidders.  Popular entered into back to back purchase and assumption agreements with the alliance co-bidders, including FirstBank, for the transferred assets and deposits.  There is no loss-share arrangement with the FDIC related to the acquired assets.

The Corporation accounted for this transaction as a business combination. As a result of the acquisition, FirstBank recorded a $13.4 million bargain purchase gain and a core deposit intangible of $5.8 million.  Refer to Note 2 to the consolidated unaudited financial statements, Business Combination, for further details of this transaction.

OVERVIEW OF RESULTS OF OPERATIONS

First BanCorp.'s results of operations generally depend primarily upon its net interest income, which is the difference between the interest income earned on its interest-earning assets, including investment securities and loans, and the interest expense incurred on its interest-bearing liabilities, including deposits and borrowings.  Net interest income is affected by various factors, including: the interest rate scenario; the volumes, mix and composition of interest-earning assets and interest-bearing liabilities; and the re-pricing characteristics of these assets and liabilities. The Corporation's results of operations also depend on the provision for loan and lease losses, non-interest expenses (such as personnel, occupancy, deposit insurance premiums and other costs), non-interest income (mainly service charges and fees on deposits, insurance income and revenues from broker-dealer operations), gains (losses) on sales of investments, gains (losses) on mortgage banking activities, and income taxes.

Net income was $25.6 million, or $0.12 per diluted common share, for the quarter ended March 31, 2015 compared to net income of $17.1 million, or $0.08 per diluted common share, for the same period in 2014.   

The key drivers of the Corporation’s financial results for the quarter ended March 31, 2015 include the following:

·Net interest income decreased $5.7 million to $125.6 million for the quarter ended March 31, 2015 compared to the same period in 2014. The decrease in net interest income was primarily driven by: (i) a reduction in the average yield and volume of consumer loans, including the fact that the remaining discount related to the credit card portfolio acquired in 2012 was fully accreted into income during the first half of 2014, (ii) a reduction in the average yield and volume of the Corporation’s

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investments in mortgage-backed securities (“MBS”) reflecting, among other things, the gradual reinvestment of MBS prepayments in lower-yielding investments given the low interest rate environment, and (iii) a reduction in the average volume of commercial and construction loans.

These decreases in net interest income were partially offset by the increased volume of residential mortgage loans derived from several acquisitions of loans from Doral Bank completed after the end of the first quarter of 2014, including the most recent acquisition described above, and the reduction in the cost of funds due to lower rates paid on certain of the Bank’s savings and interest-bearing checking accounts, and a decrease in the average volume of brokered CDs. The net interest margin, excluding fair value adjustments, decreased 8 basis points to 4.18% for the first quarter of 2015 compared to the same period in 2014.  For a definition and reconciliation of this non-GAAP measure, refer to “Net Interest Income” below.

·The provision for loan and lease losses increased $1.1 million to $33.0 million for the first quarter of 2015 compared to $31.9 million for the same period in 2014. The increase was driven by: (i) a change of $9.3 million in the provision for construction loans, reflecting a $1.2 million provision for the quarter ended March 31, 2015 compared to a reserve release of $8.1 million for the same period in 2014 that was primarily attributable to certain loans that were paid-off and (ii) a $2.7 million increase in the provision related to residential mortgage loans due to decreases in appraisal values and the increase in the portfolio size. 

These increases were partially offset by: (i) a $5.7 million decrease in the provision for commercial and industrial loans mainly due to a decline in charge-offs, (ii) a $3.9 million decrease in the provision for consumer loans due to decreases in charge-offs and loss severity rates on auto loans and the decrease in the portfolio size, and (iii) a $1.3 million decrease in the provision for commercial mortgage loans driven by the reduction in adversely classified loans, primarily in the Florida (United States) region. 

Net charge-offs totaled $29.3 million for the first quarter of 2015, or 1.25% of average loans on an annualized basis, compared to $51.0 million, or 2.11% of average loans for the same period in 2014.  The decrease was primarily reflected in the commercial and industrial loan portfolio.  Refer to the discussions under “Provision for loan and lease losses” and “Risk Management” below for an analysis of the allowance for loan and lease losses and non-performing assets and related ratios.

·The Corporation recorded non-interest income of $32.7 million for the first quarter of 2015, compared to $11.4 million for the same period in 2014.  The increase primarily reflects the $13.4 million bargain purchase gain on assets acquired and deposits assumed from Doral Bank and the $6.6 million equity in loss of unconsolidated entity recognized in the first quarter of 2014 related to the Bank’s investment in CPG/GS PR NPL, LLC (“CPG/GS”).  The value of the investment in this unconsolidated entity became zero in the second quarter of 2014.

Excluding the bargain purchase gain recorded in the first quarter of 2015 and the equity in loss of unconsolidated entity recorded in the first quarter of 2014, non-interest income increased by $1.3 million reflecting: (i) a $0.7 million increase in service charges on deposits and other fees related to deposits assumed from Doral Bank, (ii) a $0.5 million increase in insurance commission income, net of reserves, and (iii) an increase of $0.3 million in revenues from the mortgage banking business. These increases were partially offset by a $0.2 million other-than-temporary impairment charge on private label MBS recorded in the first quarter of 2015. 

·Non-interest expenses decreased by $1.1 million to $91.7 million for the first quarter of 2015 compared to the same period in 2014.  Excluding non-recurring acquisition and conversion costs related to the Doral Bank transaction of $2.1 million, non-interest expenses decreased by $3.1 million reflecting: (i) a $4.1 million decrease in the FDIC deposit insurance premium expense reflecting, among other things, improved earnings trends, the decrease in brokered deposits, a strengthened capital position and higher liquidity levels, (ii) a $3.2 million decrease in losses on other real estate owned (“OREO”) operations, primarily due to lower write-downs, (iii) a $1.5 million decrease in taxes, other than income taxes, reflecting the elimination of Puerto Rico’s national gross receipts tax in 2015, and (iv) a $1.1 million decrease in business promotion expenses, mainly marketing expenses.

These decreases were partially offset by: (i) a $2.8 million increase in  employees’ compensation and benefits mainly due to salary merit increases in the second quarter of 2014, higher stock-based compensation expenses, and $0.3 million related to personnel costs of Doral Bank acquired branches, (ii) a $1.7 million  increase in collections, appraisals and other credit related professional service fees related to troubled loan resolution efforts, (iii) $1.1 million of pass-through loan and deposit interim servicing costs incurred in the first quarter of 2015 in connection with the Doral Bank transaction, and (iv) a $0.9 million increase in the provision for unfunded loan commitments.  Refer to the “Non Interest Expenses” discussion below for additional information.

·For the first quarter of 2015, the Corporation recorded an income tax expense of $8.0 million, compared to $0.9 million for the same period in 2014. As a result of the partial reversal of the deferred tax assets valuation allowance recorded in the fourth quarter of 2014, the Corporation is now required to estimate and record a provision for income tax expense for interim periods.  The Corporation’s effective tax rate for the first quarter of 2015 was 24%, which approximates the expected

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effective tax rate for the year (22% when excluding entities for which a tax benefit from ordinary losses cannot be recognized). As of March 31, 2015, the Corporation had a net deferred tax asset of $310.9 million (net of a valuation allowance of $198.6 million).  Refer to “Income Taxes” below for additional information.  

·As of March 31, 2015, total assets were $13.1 billion, an increase of $420.1 million, or 3%, from December 31, 2014. The increase was mainly due to a $325.2 million increase in residential mortgage loans driven by the acquisition of loans from Doral Bank (which had a carrying value of $309.0 million as of March 31, 2015), partially offset by a $52.1 million decrease in commercial and construction loans and a $45.4 million decrease in consumer loans.  In addition, cash and cash equivalents increased by $188.3 million primarily as a result of the increase in total deposits.  The Corporation received $217.7 million of cash as part of the Doral Bank transaction, a portion of which was utilized to pay off maturing brokered CDs.  Refer to “Financial Condition and Operating Data” below for additional information.

·As of March 31, 2015, total liabilities were $11.4 billion, an increase of $386.1 million, from December 31, 2014.  Organic deposit growth accounted for $157.9 million of the increase, primarily growth in demand deposits and saving accounts.  In addition, the Doral Bank transaction added $506.9 million in non-brokered deposits as of March 31, 2015.  This was partially offset by a $314.6 million decrease in brokered CDs. Refer to “Risk Management – Liquidity and Capital Adequacy” below for additional information about the Corporation’s funding sources.

·As of March 31, 2015, the Corporation’s stockholders’ equity was $1.7 billion, an increase of $34.0 million from December 31, 2014.  The increase was mainly driven by the net income of $25.6 million for the first quarter of 2015 and a $7.1 million increase in other comprehensive income, mainly attributable to an increase in the fair value of U.S. agency MBS and debt securities. 

·The Corporation’s Total Capital, Common equity Tier 1 Capital, Tier 1 Capital and Leverage ratios calculated under the Basel III rules were 19.20%, 16.15%, 16.15%, and 12.16%,  respectively, as of March 31, 2015.  The Corporation’s tangible common equity ratio decreased to 12.33% as of March 31, 2015, from 12.51% as of December 31, 2014 due to the increase in asset size.  Refer to “Risk Management – Capital” below for additional information including further information about the implementation of the Basel III rules in 2015. 

·Total loan production, including purchases, refinancings, renewals and draws from existing revolving and non-revolving commitments, was $688.9 million for the quarter ended March 31, 2015, excluding the utilization activity on outstanding credit cards, compared to $770.6 million, for the same period in 2014. 

·Total non-performing loans, including non-performing loans held for sale, were $618.1 million as of March 31, 2015, an increase of $39.6 million, or 7%, from December 31, 2014. The increase was primarily attributable to the inflow of a $75.0 million credit facility of a government public corporation, partially offset by charge-offs, cash collections, restorations to accrual status of loans brought current, loans modified and the sale of $3.5 million of commercial and industrial non-performing loans.

·Total non-performing assets were $754.3 million as of March 31, 2015, an increase of $37.6 million from December 31, 2014.  Given the prolonged recession and uncertainties in the economic environment in Puerto Rico, the Corporation continued to face pressures related to its non-performing loans and charge-off levels. Refer to “Risk Management - Non-accruing and Non-performing Assets” below for additional information.

·Adversely classified commercial and construction loans, including non-performing loans held for sale, decreased by $53.4 million to $558.8 million, or 9%, from December 31, 2014.   

Critical Accounting Policies and Practices

The accounting principles of the Corporation and the methods of applying these principles conform to generally accepted accounting principles in the United States (“GAAP”). The Corporation’s critical accounting policies relate to: 1) the allowance for loan and lease losses; 2) other-than-temporary impairments (“OTTIs”); 3) income taxes; 4) the classification and values of investment securities; 5) the valuation of financial instruments; 6) income recognition on loans; 7) fair values and accounting of loans acquired; 8) loans held for sale; 9) accounting for business combinations; and 10) equity method of accounting for investment in unconsolidated entity. These critical accounting policies involve judgments, estimates and assumptions made by management that affect the amounts recorded for assets and liabilities and for contingent liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from estimates, if different assumptions or conditions prevail. Certain determinations inherently require greater reliance on the use of estimates, assumptions, and judgments and, as such, have a greater possibility of producing results that could be materially different than those originally reported.

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The Corporation’s critical accounting policies are described in the Management’s Discussion and Analysis of Financial Condition and Results of Operations included in First BanCorp’s 2014 Annual Report on Form 10-K. There have not been any material changes in the Corporation’s critical accounting policies since December 31, 2014. 

RESULTS OF OPERATIONS

Net Interest Income

Net interest income is the excess of interest earned by First BanCorp. on its interest-earning assets over the interest incurred on its interest-bearing liabilities. First BanCorp.’s net interest income is subject to interest rate risk due to the repricing and maturity mismatch of the Corporation’s assets and liabilities. Net interest income for the quarter ended March 31, 2015 was $125.6 million compared to $131.3 million for the comparable period in 2014. On a tax-equivalent basis and excluding the changes in the fair value of derivative instruments, net interest income for the quarter ended March 31, 2015 was $129.7 million compared to $136.2 million for the comparable period of 2014.

The following tables include a detailed analysis of net interest income. Part I presents average volumes and rates on an adjusted tax-equivalent basis and Part II presents, also on an adjusted tax-equivalent basis, the extent to which changes in interest rates and changes in volume of interest-related assets and liabilities have affected the Corporation’s net interest income. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (i) changes in volume (changes in volume multiplied by prior period rates), and (ii) changes in rate (changes in rate multiplied by prior period volumes). Rate-volume variances (changes in rate multiplied by changes in volume) have been allocated to the changes in volume and rate based upon their respective percentage of the combined totals.

 The net interest income is computed on an adjusted tax-equivalent basis and excluding the change in the fair value of derivative instruments. For a definition and reconciliation of this non-GAAP measure, refer to the discussions below.

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Part I
		Average Volume				Interest income (1) / expense				Average Rate (1)
	Quarter ended March 31,	2015		2014		2015		2014		2015		2014
	(Dollars in thousands)
	Interest-earning assets:
	Money market & other short-term investments	$	808,754	$	744,326	$	537	$	500	0.27	%	0.27	%
	Government obligations (2)		421,948		342,851		2,338		2,058	2.25	%	2.43	%
	Mortgage-backed securities		1,551,804		1,700,350		12,501		16,092	3.27	%	3.84	%
	FHLB stock		25,467		28,406		295		341	4.70	%	4.87	%
	Equity securities		357		320		-		-	0.00	%	0.00	%
	Total investments (3)		2,808,330		2,816,253		15,671		18,991	2.26	%	2.73	%
	Residential mortgage loans		3,120,648		2,549,924		43,482		34,958	5.65	%	5.56	%
	Construction loans		172,055		216,539		1,532		2,015	3.61	%	3.77	%
	C&I and commercial mortgage loans		4,127,305		4,825,369		43,671		51,312	4.29	%	4.31	%
	Finance leases		230,299		246,229		4,611		5,190	8.12	%	8.55	%
	Consumer loans		1,729,448		1,824,674		47,523		53,015	11.14	%	11.78	%
	Total loans (4) (5)		9,379,755		9,662,735		140,819		146,490	6.09	%	6.15	%
	Total interest-earning assets	$	12,188,085	$	12,478,988	$	156,490	$	165,481	5.21	%	5.38	%
	Interest-bearing liabilities:
	Brokered CDs	$	2,736,653	$	3,185,520	$	6,610	$	7,607	0.98	%	0.97	%
	Other interest-bearing deposits		5,848,597		5,925,314		11,084		12,692	0.77	%	0.87	%
	Other borrowed funds		1,131,959		1,131,959		8,210		8,128	2.94	%	2.91	%
	FHLB advances		325,000		300,000		934		824	1.17	%	1.11	%
	Total interest-bearing liabilities (6)	$	10,042,209	$	10,542,793	$	26,838	$	29,251	1.08	%	1.13	%
	Net interest income					$	129,652	$	136,230
	Interest rate spread									4.13	%	4.25	%
	Net interest margin									4.31	%	4.43	%

(1)	On an adjusted tax-equivalent basis.  The adjusted tax-equivalent yield was estimated by dividing the interest rate spread on exempt assets by 1 less the Puerto Rico statutory tax rate (39.0%) and adding to it the cost of interest-bearing liabilities.  The tax-equivalent adjustment recognizes the income tax savings when comparing taxable and tax-exempt assets.  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. Changes in the fair value of derivatives are excluded from interest income and interest expense because the changes in valuation do not affect interest paid or received.
(2)	Government obligations include debt issued by government sponsored agencies.
(3)	Unrealized gains and losses on available-for-sale securities are excluded from the average volumes.
(4)	Average loan balances include the average of non-performing loans.
(5)	Interest income on loans includes $2.7 million and $3.0 million for the first quarter of 2015 and 2014, respectively, of income from prepayment penalties and late fees related to the Corporation’s loan portfolio.
(6)	Unrealized gains and losses on liabilities measured at fair value are excluded from the average volumes.

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Part II
		Quarter ended March 31,
		2015 compared to 2014
		Increase (decrease)
		Due to:
	(In thousands)	Volume		Rate		Total
	Interest income on interest-earning assets:
	Money market & other short-term investments	$	43	$	(6)	$	37
	Government obligations		461		(181)		280
	Mortgage-backed securities		(1,328)		(2,263)		(3,591)
	FHLB stock		(34)		(12)		(46)
	Total investments		(858)		(2,462)		(3,320)
	Residential mortgage loans		7,944		580		8,524
	Construction loans		(399)		(84)		(483)
	C&I and commercial mortgage loans		(7,387)		(254)		(7,641)
	Finance leases		(326)		(253)		(579)
	Consumer loans		(2,693)		(2,799)		(5,492)
	Total loans		(2,861)		(2,810)		(5,671)
	Total interest income		(3,719)		(5,272)		(8,991)
	Interest expense on interest-bearing liabilities:
	Brokered CDs		(1,086)		89		(997)
	Other interest-bearing deposits		(162)		(1,446)		(1,608)
	Other borrowed funds		-		82		82
	FHLB advances		71		39		110
	Total interest expense		(1,177)		(1,236)		(2,413)
	Change in net interest income	$	(2,542)	$	(4,036)	$	(6,578)

Portions of the Corporation’s interest-earning assets, mostly investments in obligations of some U.S. government agencies and sponsored entities, generate interest which is exempt from income tax, principally in Puerto Rico. Also, interest and gains on sales of investments held by the Corporation’s international banking entities (“IBEs”) are tax-exempt under Puerto Rico tax law (refer to the Income Taxes discussion below for additional information). To facilitate the comparison of all interest data related to these assets, the interest income has been converted to an adjusted tax equivalent basis. The tax equivalent yield was estimated by dividing the interest rate spread on exempt assets by 1 less the Puerto Rico statutory tax rate as adjusted for changes to enacted tax rates (39.0%) and adding to it the average cost of interest-bearing liabilities. The computation considers the interest expense disallowance required by Puerto Rico tax law.

The presentation of net interest income excluding the effects of the changes in the fair value of the derivative instruments (“valuations”) provides additional information about the Corporation’s net interest income and facilitates comparability and analysis. The changes in the fair value of the derivative instruments have no effect on interest due or interest earned on interest-bearing liabilities or interest-earning assets, respectively, or on interest payments exchanged with interest rate swap counterparties.

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The following table reconciles net interest income in accordance with GAAP to net interest income, excluding valuations, and net interest income on an adjusted tax-equivalent basis. The table also reconciles net interest spread and net interest margin on a GAAP basis to these items excluding valuations and on an adjusted tax-equivalent basis:
	Quarter Ended March 31,
(Dollars in thousands)	2015			2014
Interest Income - GAAP	$	152,485		$	160,571
Unrealized gain on derivative instruments		-			(313)
Interest income excluding valuations		152,485			160,258
Tax-equivalent adjustment		4,005			5,223
Interest income on a tax-equivalent basis excluding valuations		156,490			165,481
Interest Expense - GAAP		26,838			29,251
Net interest income - GAAP	$	125,647		$	131,320
Net interest income excluding valuations	$	125,647		$	131,007
Net interest income on a tax-equivalent basis excluding valuations	$	129,652		$	136,230
Average Balances
Loans and leases	$	9,379,755		$	9,662,735
Total securities and other short-term investments		2,808,330			2,816,253
Average Interest-Earning Assets	$	12,188,085		$	12,478,988
Average Interest-Bearing Liabilities	$	10,042,209		$	10,542,793
Average Yield/Rate
Average yield on interest-earning assets - GAAP		5.07	%		5.22	%
Average rate on interest-bearing liabilities - GAAP		1.08	%		1.13	%
Net interest spread - GAAP		3.99	%		4.09	%
Net interest margin - GAAP		4.18	%		4.27	%
Average yield on interest-earning assets excluding valuations		5.07	%		5.21	%
Average rate on interest-bearing liabilities excluding valuations		1.08	%		1.13	%
Net interest spread excluding valuations		3.99	%		4.08	%
Net interest margin excluding valuations		4.18	%		4.26	%
Average yield on interest-earning assets on a tax-equivalent basis
and excluding valuations		5.21	%		5.38	%
Average rate on interest-bearing liabilities excluding valuations		1.08	%		1.13	%
Net interest spread on a tax-equivalent basis and excluding valuations		4.13	%		4.25	%
Net interest margin on a tax-equivalent basis and excluding valuations		4.31	%		4.43	%

Interest income on interest-earning assets primarily represents interest earned on loans held for investment and investment securities.

Interest expense on interest-bearing liabilities primarily represents interest paid on brokered CDs, branch-based deposits, repurchase agreements, advances from the FHLB and notes payable.

Unrealized gains or losses on derivatives represent changes in the fair value of derivatives, primarily interest rate swaps and caps used for protection against rising interest rates.

Derivative instruments, such as interest rate swaps, are subject to market risk. While the Corporation does have certain trading derivatives to facilitate customer transactions, the Corporation does not utilize derivative instruments for speculative purposes. As of March 31, 2015, most of the interest rate swaps outstanding are used for protection against rising interest rates, although not designated as hedges. Refer to Note 11 of the accompanying unaudited consolidated financial statements for further details concerning the notional amounts of derivative instruments and additional information. As is the case with investment securities, the market value of derivative instruments is largely a function of the financial market’s expectations regarding the future direction of interest rates. Accordingly, current market values are not necessarily indicative of the future impact of derivative instruments on net interest income. This will depend, for the most part, on the shape of the yield curve, the level of interest rates, and the expectations for rates in the future.

For the quarter ended March 31, 2015, net interest income decreased $5.7 million to $125.6 million and the net interest margin, excluding valuations, decreased by 8 basis points to 4.18%. The decrease in net interest income and margin was primarily driven by a reduction in the average volume of commercial, construction and consumer loans, a reduction in the average volume and yield of U.S. agency MBS, and a decrease in the average yield of consumer loans. These decreases in net interest income and margin were partially offset by the increased volume of residential mortgage loans derived from the several acquisitions of loans from Doral Bank

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completed after the end of the first quarter of 2014 and reductions in the cost of funds due to lower rates paid on certain savings and interest-bearing checking accounts, and a decrease in the average volume of brokered CDs. 

The decrease of $742.6 million in the average volume of commercial and construction loans resulted in a $7.6 million reduction in interest income, while the $111.2 million decrease in the average volume of consumer loans resulted in an additional $3.0 million decrease in interest income. 

In addition, the average yield on consumer loans (including finance leases) decreased to 10.79% for the first quarter of 2015, from 11.40% for the same period in 2014, for an adverse impact of approximately $3.0 million in interest income.  The decline in the average yield on consumer loans reflects both the impact of lower rates on new loan originations given the current level of interest rates and the fact that the remaining discount related to the credit card portfolio acquired in 2012 was fully accreted into income during the first half of 2014.  The discount accretion included in interest income in the first quarter of 2014 was $2.3 million.

Net interest income and margin were also adversely impacted by a $2.9 million decrease in interest income on MBS, reflecting the gradual reinvestment of MBS prepayments in lower-yielding investments given the low interest rate environment or the deposit of such prepayments in cash balances maintained at the Federal Reserve Bank. 

The aforementioned variances were partially offset by an $8.7 million increase in interest income on residential mortgage loans and a $2.4 million decrease in total interest expense.  The increase in interest income on residential mortgage loans was driven by a $570.7 million increase in the average volume.  In three separate transactions after the end of the first quarter of 2014, the Corporation acquired from Doral Bank approximately $760 million in principal balance of residential mortgage loans. 

The Corporation reduced the average cost of funds as a result of lower rates paid on savings and interest-bearing checking accounts.  The Corporation’s strategic focus remains to grow non-brokered deposits and improve the overall funding mix.  For the quarter ended March 31, 2015, the average rate paid on non-brokered deposits decreased by 10 basis points to 0.77% compared to the same period in 2014, resulting in a decrease of approximately $1.4 million in interest expense.

For the quarter ended March 31, 2015, the average balance of brokered CDs decreased by $448.9 million compared to the same period last year, resulting in a $1.0 million decrease in interest expense.  Over the last four quarters, the Corporation repaid approximately $1.8 billion of maturing brokered CDs with an all-in cost of 0.82% and issued $1.2 billion of new brokered CDs with an all-in cost of 0.78%.

On an adjusted tax-equivalent basis, net interest income for the first quarter of 2015 decreased by $6.6 million to $129.7 million compared to the same period in 2014. In addition to the facts discussed above, the decrease also includes a decrease of $1.2 million in the tax-equivalent adjustment attributable to a lower volume of tax-exempt assets.

Provision for Loan and Lease Losses

The provision for loan and lease losses is charged to earnings to maintain the allowance for loan and lease losses at a level that the Corporation considers adequate to absorb probable losses inherent in the portfolio. The adequacy of the allowance for loan and lease losses is also based upon a number of additional factors including trends in charge-offs and delinquencies, current economic conditions, the fair value of the underlying collateral and the financial condition of the borrowers, and, as such, includes amounts based on judgments and estimates made by the Corporation. Although the Corporation believes that the allowance for loan and lease losses is adequate, factors beyond the Corporation’s control, including factors affecting the economies of Puerto Rico, the United States, the U.S. Virgin Islands and the British Virgin Islands, may contribute to delinquencies and defaults, thus necessitating additional reserves.

     For the quarter ended March 31, 2015, the Corporation recorded a provision for loan and lease losses of $33.0 million, compared to $31.9 million for the comparable period in 2014.  The increase was mainly related to the impact in the first quarter of 2014 of reserve releases on certain construction loans that were paid-off and an increase in the provision for residential mortgage loans due to declines in appraisal values and the increase in the portfolio size. These increases were partially offset by decreases in the provision for commercial, commercial mortgage and consumer loans mainly driven by lower charge-offs and a reduction in the portfolio size. In addition, decreases in the commercial mortgage provision reflects a reduction in the adversely classified loans balance, while the decrease in the consumer loans provision also reflects decreases in loss severity rates on auto loans.

In terms of geography and categories, in Puerto Rico, the Corporation recorded a provision of $32.7 million in the first quarter of 2015 compared to $37.2 million for the same period in 2014. The decrease was mainly due to: (i) a $4.2 million reduction in the provision for commercial and construction loans, related to lower charge-offs and decreases in the sizes of these portfolios, and (ii) a $3.8 million decrease in the provision for consumer loans reflecting decreases in loss severity rates on auto loans and the decrease in size of this portfolio.  These reductions were partially offset by a $3.6 million increase in the provision for residential mortgage loans mainly due to decreases in appraisal values of the portfolio, and the increase in the portfolio size.

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The Virgin Islands region recorded a provision of $2.4 million for the first quarter of 2015 compared to $0.6 million for the same period in 2014.  The increase primarily reflects the migration in the first quarter of 2015 of a commercial and industrial loan relationship to a worse loan classification.   

With respect to the loan portfolio in the United States, the Corporation recorded a negative provision of $2.1 million for the first quarter of 2015, compared to a negative provision of $6.0 million for the same period in 2014.  Higher reserve releases were recorded in 2014 in connection with certain construction loans that were paid-off.  The negative provision in 2015 was mainly related to the reserve release of a commercial mortgage loan that is no longer adversely classified.        

Refer to “Credit Risk Management” below for an analysis of the allowance for loan and lease losses, non-performing assets, impaired loans and related information, including information about enhancements to the estimation process for the allowance for loan losses that was implemented during the second quarter of 2014, and refer to “Financial Condition and Operating Data Analysis – Loan Portfolio” and “Risk Management — Credit Risk Management” below for additional information concerning the Corporation’s loan portfolio exposure in the geographic areas where the Corporation does business.

Non-Interest Income
		Quarter Ended March 31,
		2015		2014
			(In thousands)
	Service charges on deposit accounts	$	4,555	$	4,127
	Mortgage banking activities		3,618		3,368
	Insurance income		3,022		2,571
	Broker-dealer income		-		459
	Other operating income		8,247		7,435
	Non-interest income before net loss on investments, bargain
	purchase gain and equity in loss of unconsolidated entity		19,442		17,960
	OTTI on debt securities		(156)		-
	Bargain purchase gain		13,443		-
	Equity in loss of unconsolidated entity		-		(6,610)
	Total	$	32,729	$	11,350

Non-interest income primarily consists of service charges on deposit accounts; commissions derived from various banking, securities and insurance activities; gains and losses on mortgage banking activities; interchange and other fees related to debit and credit cards; equity in earnings (loss) of the unconsolidated entity through the second quarter of 2014; and net gains and losses on investments and impairments.  

 Service charges on deposit accounts include monthly fees, overdraft fees and other fees on deposit accounts.

Income from mortgage banking activities includes gains on sales and securitization of loans, revenues earned for administering residential mortgage loans originated by the Corporation and subsequently sold with servicing retained, and unrealized gains and losses on forward contracts used to hedge the Corporation’s securitization pipeline.  In addition, lower-of-cost-or-market valuation adjustments to the Corporation’s residential mortgage loans held for sale portfolio and servicing rights portfolio, if any, are recorded as part of mortgage banking activities.

Insurance income consists of insurance commissions earned by the Corporation’s subsidiary, FirstBank Insurance Agency, Inc.

Broker-dealer income consists of commissions earned from the activities of the Corporation’s broker-dealer subsidiary, FirstBank Puerto Rico Securities.

The other operating income category is composed of miscellaneous fees such as debit, credit card and point of sale (POS) interchange fees.

The net gain (loss) on investment securities reflects gains or losses as a result of sales that are consistent with the Corporation’s investment policies as well as OTTI charges on the Corporation’s investment portfolio.

Equity in earnings (losses) of unconsolidated entity relates to FirstBank’s investment in CPG/GS, the entity that purchased $269 million of loans from FirstBank during the first quarter of 2011.  The Bank holds a 35% subordinated ownership interest in CPG/GS.  The value of the investment in this unconsolidated entity became zero in the second quarter of 2014. Refer to Note 14 of the Corporation’s unaudited consolidated financial statements for the quarter ended March 31, 2015 for additional information about the Bank’s investment in CPG/GS.

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Non-interest income for the first quarter of 2015 amounted to $32.7 million, compared to $11.4 million for the same period in 2014. The increase in non-interest income was primarily due to:

·A $13.4 million bargain purchase gain on assets acquired and deposits assumed from Doral Bank.

·A $6.6 million equity in loss of unconsolidated entity recognized in the first quarter of 2014, on the Bank’s investment in the unconsolidated entity CPG/GS.  The value of the investment in this unconsolidated entity became zero in the second quarter of 2014.

·A $0.7 million aggregate increase in service charges on deposits ($0.3 million) and other fees ($0.4 million) related to deposits assumed from Doral Bank.

·A $0.5 million increase in insurance commission income.

·A $0.5 million increase in merchant fees, included as part of “Other operating income” in the table above.

·A $0.3 million increase in revenues from the mortgage banking business.  The variance reflects a $0.3 million decrease in charges related to breaches of representations and warranties on residential mortgage sales and compensatory fees imposed by government-sponsored agencies, a $0.2 million decrease in charges to the valuation allowance of servicing assets, a $0.3 million decrease in realized and unrealized losses on to-be-announced (TBAs) MBS forward contracts, and a $0.1 million increase in servicing fees.  These variances were partially offset by a $0.6 million decrease in realized gains on sales of residential mortgage loans. Loans sold and securitized in the secondary market to government-sponsored entities amounted to $85.3 million with a related gain of $2.9 million in the first quarter of 2015, compared to $86.2 million and a gain of $3.5 million recorded in the same period in 2014.  

Partially offset by:

·A $0.5 million decrease in fee income from the broker-dealer subsidiary as a result of underwriting fees on a bond issuance of the Puerto Rico government that took place in the first quarter of 2014.

·A $0.2 million OTTI impairment on private label MBS recorded in the first quarter of 2015.

Non-Interest Expenses
The following table presents non-interest expenses for the periods indicated:
		Quarter Ended March 31,
		2015		2014
		(In thousands)
	Employees' compensation and benefits	$	35,654	$	32,898
	Occupancy and equipment		14,349		14,318
	Insurance and supervisory fees		6,860		10,990
	Taxes, other than income taxes		3,001		4,575
	Professional fees:
	Collections, appraisals and other credit related fees		3,447		1,754
	Outsourcing technology services		4,704		4,214
	Other professional fees		7,067		4,525
	Credit and debit card processing expenses		3,957		3,824
	Business promotion		2,868		3,973
	Communications		1,608		1,879
	Net loss on OREO operations		2,628		5,837
	Other		5,585		3,998
	Total	$	91,728	$	92,785

Non-interest expenses decreased by $1.1 million to $91.7 million for the first quarter of 2015 compared to $92.8 for the same period in 2014.  The activity is the result of the net effect of:

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·A $4.1 million decrease in the FDIC deposit insurance premium expense reflecting, among other things, improved earnings trends, the decrease in brokered deposits, a strengthened capital position and higher liquidity levels. This expense is included as part of “Insurance and supervisory fees” in the table above.

·A $3.2 million decrease in losses on OREO properties, primarily due to a $2.2 million decrease in write-downs to the value of OREO properties and a $1.2 million net gain realized at the time of disposition of certain commercial OREO properties in the first quarter of 2015. 

·A $1.5 million decrease in taxes, other than income taxes, mainly related to the elimination of Puerto Rico’s national gross receipts tax effective January 1, 2015.

·A $1.1 million decrease in business promotion expenses due mainly to lower marketing expenses.

Partially offset by:

·The $2.1 million non-recurring acquisition and conversion costs related to the Doral Bank transaction ($1.7 million professional fees, $0.2 million business promotion expenses, $0.1 million occupancy and equipment costs and $0.1 million other expenses).  Additional conversion costs are expected to be incurred in the upcoming months until the acquired assets and assumed liabilities are fully converted to FirstBank’s operating systems.

·A $1.7 million increase in collections, appraisals and other credit related professional service fees related to troubled loan resolution efforts.

·Pass-through loan and deposit interim servicing costs of $1.1 million incurred in the first quarter of 2015 in connection with the Doral Bank transaction.  These costs could vary in the future after the completion of the conversion to our systems.

·A $2.8 million increase in employees’ compensation and benefits mainly due to salary merit increases in the second quarter of 2014, higher stock-based compensation expense, and $0.3 million related to personnel costs of Doral Bank acquired branches.

· A $0.9 million increase in the provision for unfunded loan commitments.

Income Taxes

   Income tax expense includes Puerto Rico and USVI income taxes as well as applicable United States (“U.S.”) federal and state taxes. The Corporation is subject to Puerto Rico income tax on its income from all sources. As a Puerto Rico corporation, First Bancorp. is treated as a foreign corporation for U.S. and USVI income tax purposes and is generally subject to U.S. and USVI income tax only on its income from sources within the U.S. and USVI or income effectively connected with the conduct of a trade or business in those regions. Any such tax paid is also creditable against the Corporation’s Puerto Rico tax liability, subject to certain conditions and limitations.

Under the Puerto Rico Internal Revenue Code of 2011, as amended (the “2011 PR Code”), the Corporation and its subsidiaries are treated as separate taxable entities and are not entitled to file consolidated tax returns and, thus, the Corporation is not able to utilize losses from one subsidiary to offset gains in another subsidiary. Accordingly, in order to obtain a tax benefit from a net operating loss (“NOL”), a particular subsidiary must be able to demonstrate sufficient taxable income within the applicable NOL carry forward period. The 2011 PR Code provides a dividend received deduction of 100% on dividends received from “controlled” subsidiaries subject to taxation in Puerto Rico and 85% on dividends received from other taxable domestic corporations.

    The Corporation has maintained an effective tax rate lower than the maximum statutory rate mainly by investing in government obligations and mortgage-backed securities exempt from U.S. and Puerto Rico income taxes and by doing business through an International Banking Entity (“IBE”) unit of the Bank, and through the Bank’s subsidiary, FirstBank Overseas Corporation, whose interest income and gain on sales is exempt from Puerto Rico and U.S. income taxation. The IBE and FirstBank Overseas Corporation were created under the International Banking Entity Act of Puerto Rico, which provides for total Puerto Rico tax exemption on net income derived by IBEs operating in Puerto Rico on the specific activities identified in the IBE Act. An IBE that operates as a unit of a bank pays income taxes at the corporate standard rates to the extent that the IBE’s net income exceeds 20% of the bank’s total net taxable income.

     In 2010, the Corporation established a valuation allowance for substantially all of the deferred tax assets of its banking subsidiary, FirstBank, primarily due to significant operational losses driven by charges to the provision for loan losses, a three-year cumulative

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loss position as of the end of the year 2010, and uncertainty regarding the amount of future taxable income that the Bank could forecast. As of December 31, 2014, based upon the assessment of all positive and negative evidence, management concluded that it was more likely than not that FirstBank will generate sufficient taxable income within the applicable NOL carry-forward periods to realize $313.0 million of its deferred tax assets and, therefore, reversed $302.9 million of the valuation allowance. As of March 31, 2015, the deferred tax assets, net of a valuation allowance of $198.6 million, amounted to $310.9 million and management concluded, based upon the assessment of all positive and negative evidence, that it is more likely than not that the Corporation will generate sufficient taxable income within the applicable NOL carry-forward periods to realize such amount.

The Corporation recorded income tax expense of $8.0 million in the first quarter of 2015 compared to $0.9 million for the quarter ended March 31, 2014. For the quarter ended March 31, 2015, the Corporation calculated the provision for income taxes by applying the estimated annual effective tax rate for the full fiscal year to ordinary income or loss.  The Corporation had historically calculated the provision for income taxes for interim periods by using a discrete effective tax rate method since it had a full valuation allowance on most of its deferred tax assets.  As a result of the partial valuation allowance release during the fourth quarter of 2014, management will use the annual estimated effective tax rate as required by ASC 740 for interim period reporting.  In the computation of the consolidated worldwide annual estimated effective tax rate, ASC 740-270 requires the exclusion of legal entities with pre-tax losses from which a tax benefit cannot be recognized.  The consolidated worldwide estimated effective tax rate excluding entities with pre-tax losses from which a tax benefit cannot be recognized is 22%.  The effective tax rate including all entities is 24%. 

As of March 31, 2015, the Corporation did not have Unrecognized Tax Benefits (“UTBs”) recorded on its books. During 2014, the Corporation reached final settlement with the IRS in connection with the 2007-2009 examination periods. As a result of a final settlement with the IRS Appeals office during 2014, the Corporation released a portion of its reserve for uncertain tax positions, resulting in a tax benefit of $1.8 million, and paid $2.5 million to settle the tax liability resulting from the audit.

   The Corporation’s liability for income taxes includes the estimate of interest not yet paid related to the settlement reached with the IRS to close the tax years 2007 through 2009. The Corporation classifies all interest and penalties, if any, related to tax uncertainties as income tax expense. As of March 31, 2015, the Corporation’s accrued interest that relates to the IRS examination amounted to $1.3 million and there was no need to accrue for the payment of penalties. Audit periods remain open for review until the statute of limitations has passed. The statue of limitations under the 2011 PR code is 4 years; the statutes of limitations for Virgin Islands and U.S. income tax purposes are each three years after a tax return is due or filed, whichever is later. The completion of an audit by the taxing authorities or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Corporation’s liability for income taxes. Any such adjustment could be material to the results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. For Virgin Islands and U.S. income tax purposes, all tax years subsequent to 2010 remain open to examination. The 2012 tax year U.S. federal tax return is currently under examination by the IRS. For Puerto Rico purposes, all tax years subsequent to 2010 remain open to examination.

   During 2013, the Puerto Rico Government approved Act No. 40, which imposed a national gross receipts tax. The national gross receipts tax for financial institutions was computed on the basis of 1% of gross income, net of allowable exclusions. Subject to certain limitations, a financial institution was able to claim a credit of 0.5% of its gross income against its regular income tax or the alternative minimum tax (“AMT”). However, on December 22, 2014, the Governor of Puerto Rico signed Act No. 238, which amended the 2011 PR Code. Act No. 238 clarifies that the national gross receipts tax will not be applicable to taxable years starting after December 31, 2014. Accordingly, during this quarter, the Corporation did not record national gross receipts tax expense. In March 31, 2014, a $1.5 million gross receipt tax expense was included as part of “Taxes, other than income taxes” in the consolidated statement of income and a $0.7 million benefit related to this credit was recorded as a reduction to the provision for income taxes.

      In February 2015, the Governor of Puerto Rico announced a proposal for a new tax code that would, among other things, replace the current 7% sales and use tax with a 16% value-added tax, while lowering income taxes. Legislative changes in tax laws, could adversely impact our results of operations. On April 30, 2015, the legislature voted against the new tax code. New proposals or amendments to the tax code have not yet been disclosed.

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FINANCIAL CONDITION AND OPERATING DATA ANALYSIS

Assets

    Total assets were $13.1 billion as of March 31, 2015, an increase of $420.1 million, or 3%, from December 31, 2014. The increase was mainly due to a $325.2 million increase in residential mortgage loans driven by the most recent acquisition of loans from Doral Bank (which had a carrying value of $309.0 million as of March 31, 2015), partially offset by a $52.1 million decrease in commercial and construction loans and a $45.4 million decrease in consumer loans.  In addition, cash and cash equivalents increased by $188.3 million resulting primarily from the increase in total deposits.  The Corporation received $217.7 million of cash as part of the Doral Bank transaction, a portion of which has been utilized to pay off maturing brokered CDs.

Loan Portfolio

The following table presents the composition of the Corporation’s loan portfolio, including loans held for sale, as of the dates indicated:
		March 31,		December 31,
	(In thousands)	2015		2014
	Residential mortgage loans	$	3,331,620		3,011,187
	Commercial loans:
	Commercial mortgage loans		1,649,263		1,665,787
	Construction loans		124,440		123,480
	Commercial and Industrial loans		2,442,867		2,479,437
	Total commercial loans		4,216,570		4,268,704
	Finance leases		230,183		232,126
	Consumer loans		1,706,999		1,750,419
	Total loans held for investment		9,485,372		9,262,436
	Less:
	Allowance for loan and lease losses		(226,064)		(222,395)
	Total loans held for investment, net	$	9,259,308	$	9,040,041
	Loans held for sale		81,723		76,956
	Total loans, net	$	9,341,031	$	9,116,997

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     As of March 31, 2015, the Corporation’s total loans held for investment, net of allowance, increased by $219.3 million, when compared to the balance as of December 31, 2014.  The increase was mainly due to the acquisition of approximately $324.8 million in principal balance of loans from Doral Bank (which had a carrying value of $311.5 million as of March 31, 2015), primarily residential mortgage loans, partially offset by the $52.1 million decrease in commercial and construction loans and the $45.4 million decrease in consumer loans. 

      As shown in the table above, as of March 31, 2015, the loans held for investment portfolio was comprised of commercial loans (44%), residential real estate loans (36%), and consumer and finance leases (20%).  Of the total gross loan portfolio held for investment of $9.5 billion as of March 31, 2015, approximately 83% has credit risk concentration in Puerto Rico, 11% in the United States (mainly in the state of Florida) and 6% in the Virgin Islands, as shown in the following table:

As of March 31, 2015	Puerto Rico		Virgin  Islands		United  States		Total
	(In thousands)
Residential mortgage loans	$	2,632,602	$	336,916	$	362,102	$	3,331,620
Commercial mortgage loans		1,309,257		68,367		271,639		1,649,263
Construction loans		69,810		28,564		26,066		124,440
Commercial and Industrial loans		2,018,229		125,389		299,249		2,442,867
Total commercial loans		3,397,296		222,320		596,954		4,216,570
Finance leases		230,183		-		-		230,183
Consumer loans		1,621,126		47,273		38,600		1,706,999
Total loans held for investment, gross	$	7,881,207	$	606,509	$	997,656	$	9,485,372
Loans held for sale		40,284		40,314		1,125		81,723
Total  loans	$	7,921,491	$	646,823	$	998,781	$	9,567,095

As of December 31, 2014	Puerto Rico		Virgin  Islands		United  States		Total
		(In thousands)
Residential mortgage loans	$	2,325,455	$	341,098	$	344,634	$	3,011,187
Commercial mortgage loans		1,305,057		69,629		291,101		1,665,787
Construction loans		70,618		30,011		22,851		123,480
Commercial and Industrial loans		2,072,265		120,947		286,225		2,479,437
Total commercial loans		3,447,940		220,587		600,177		4,268,704
Finance leases		232,126		-		-		232,126
Consumer loans		1,666,373		47,811		36,235		1,750,419
Total loans held for investment, gross	$	7,671,894	$	609,496	$	981,046	$	9,262,436
Loans held for sale		34,972		40,317		1,667		76,956
Total  loans	$	7,706,866	$	649,813	$	982,713	$	9,339,392

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Loan Production

First BanCorp. relies primarily on its retail network of branches to originate residential and consumer loans. The Corporation supplements its residential mortgage originations with wholesale servicing released mortgage loan purchases from mortgage bankers.  The Corporation manages its construction and commercial loan originations through centralized units and most of its originations come from existing customers as well as through referrals and direct solicitations.

   The following table provides a breakdown of First BanCorp’s loan production, including purchases, refinancings, renewals and draws from existing revolving and nonrevolving commitments, for the periods indicated:

	Quarter Ended March 31,
	2015		2014
		(In thousands)
Residential real estate	$	152,675	$	151,124
C&I and commercial mortgage		394,762		420,853
Construction		9,424		6,482
Finance leases		19,656		24,587
Consumer		189,537		250,262
Total loan production	$	766,054	$	853,308

The Corporation is experiencing continued loan demand and has continued its targeted origination strategy. During the first quarter of 2015, total loan originations, including purchases, refinancings and draws from existing revolving and non-revolving commitments, amounted to approximately $766.1 million, compared to $853.3 million for the comparable period in 2014.

C&I loan originations (excluding government loans) amounted to $313.6 million, compared to $294.3 million in the first quarter of 2014; the increase was mainly related to disbursements on revolving credit facilities in Puerto Rico. Government loan originations amounted to $15.7 million, compared to $114.1 million for the first quarter of 2014.  Construction loan originations amounted to $9.4 million for the first quarter of 2015, compared to $6.5 million for the same period in 2014.  Residential mortgage loan originations and purchases amounted to $152.7 million for the first quarter of 2015 compared to $151.1 million for the first quarter of 2014.    Originations of auto loans (including finance leases) amounted to $89.2 million for the first quarter of 2015 compared to $144.2 million for the first quarter of 2014 and other personal loan originations amounted to $42.9 million, compared to $47.9 million for the first quarter of 2014.  The decrease in consumer loan originations was mainly due to decreased activity in new auto sales reflecting lower consumer confidence as a result of the prolonged economic recession in Puerto Rico.  The total loan originations include the utilization activity on outstanding credit cards portfolio of approximately $77.1 million for the first quarter of 2015 compared to $82.7 million for the comparable period in 2014. Total loan originations exclude the $324.8 million of loans acquired in the Doral Bank transaction.

Residential Real Estate Loans

     As of March 31, 2015, the Corporation’s residential real estate loan portfolio held for investment increased by $320.4 million as compared to the balance as of December 31, 2014, mainly reflecting the impact of $321.0 million in principal balance of residential mortgage loans acquired from Doral. The remaining increase is mainly related to the origination of non-conforming loans which are generally retained in our held for investment portfolio.

The majority of the Corporation’s outstanding balance of residential mortgage loans consists of fixed-rate, fully amortizing, full documentation loans. In accordance with the Corporation’s underwriting guidelines, residential real estate loans are mostly fully documented loans, and the Corporation does not generally originate negative amortization loans. Refer to “Contractual Obligations and Commitments” below for additional information about outstanding commitments to sell mortgage loans.

Commercial and Construction Loans

As of March 31, 2015, the Corporation’s commercial and construction loan portfolio held for investment decreased by $52.1 million, as compared to the balance as of December 31, 2014. The reduction primarily reflects repayments, including a $6.3 million  non-performing commercial mortgage loan in the U.S. that was repaid in full through a short sale, the sale of $3.5 million of non-performing commercial and industrial loans, charge-offs and foreclosures. 

     As of March 31, 2015, the Corporation had $335.7 million of credit facilities granted to the Puerto Rico Government, its municipalities and public corporations, of which $321.7 million was outstanding, compared to $308.0 million outstanding as of December 31, 2014. Approximately $201.3 million of the granted credit facilities outstanding consisted of loans to municipalities in

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Puerto Rico for which, in most cases, the good faith, credit and unlimited taxing power of the applicable municipality have been pledged to their repayment.  Approximately $24.5 million consisted of loans to units of the central government, and approximately $95.9 million consisted of loans to public corporations, including the $75.0 million direct exposure to the Puerto Rico Electric Power Authority (“PREPA”) that was placed in non-performing status in the first quarter since the government agency has not yet completed its restructuring plan.  In addition, the Corporation had $132.5 million outstanding in loans to the hotel industry in Puerto Rico guaranteed by the Puerto Rico Tourism Development Fund (the “TDF”) as of March 31, 2015, down $0.9 million, compared to $133.3 million outstanding as of December 31, 2014.  The TDF is a subsidiary of the Government Development Bank (“GDB”) that works with private-sector financial institutions to structure financings for new hospitality projects.

The Corporation has significantly reduced its exposure to construction loans and current originations are mainly draws from existing commitments, including construction facilities tied to financings to the hotel industry guaranteed by the TDF. 

     The composition of the Corporation’s construction loan portfolio held for investment as of March 31, 2015 by category and geographic location follows:

As of March 31, 2015
		Puerto Rico		Virgin Islands		United  States		Total
			(In thousands)
Loans for residential housing projects:
Mid-rise (1)		$	7,776	$	4,131	$	-	$	11,907
Single-family, detached			14,028		-		13,506		27,534
Total for residential housing projects			21,804		4,131		13,506		39,441
Construction loans to individuals secured by residential properties			1,142		1,639		-		2,781
Loans for commercial projects			10,989		4,386		12,198		27,573
Bridge loans - commercial			-		13,121		-		13,121
Land loans - residential			21,182		5,395		362		26,939
Land loans - commercial			14,284		-		-		14,284
Total before net deferred fees and allowance for loan losses		$	69,401	$	28,672	$	26,066	$	124,139
Net deferred cost (fees)			409		(108)		-		301
Total construction loan portfolio, gross			69,810		28,564		26,066		124,440
Allowance for loan losses			(10,308)		(2,097)		(1,234)		(13,639)
Total construction loan portfolio, net		$	59,502	$	26,467	$	24,832	$	110,801
____________________
(1)	Mid-rise relates to buildings of up to 7 stories.

The following table presents further information related to the Corporation’s construction portfolio as of and for the quarter ended March 31, 2015:
	(In thousands)
	Total undisbursed funds under existing commitments	$	72,074
	Construction loans held for investment in non-accrual status	$	27,163
	Construction loans held for sale in non-accrual status	$	47,802
	Net charge offs - Construction loans	$	398
	Allowance for loan losses - Construction loans	$	13,639
	Non-performing construction loans to total construction loans, including held for sale		43.52%
	Allowance for loan losses - construction loans to total construction loans held for investments		10.96%
	Net charge-offs (annualized) to total average construction loans		0.93%

The following summarizes the construction loans for residential housing projects in Puerto Rico segregated by the  estimated selling price of the units:
		(In thousands)
	Under $300k	$	11,982
	Over $600k (1)		9,822
		$	21,804
_____________
(1)	Mainly composed of two residential housing projects in Puerto Rico.

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Consumer Loans and Finance Leases

As of March 31, 2015, the Corporation’s consumer loan and finance lease portfolio decreased by $45.4 million, as compared to the portfolio balance as of December 31, 2014, mainly the result of charge-offs and repayments. The auto and finance lease portfolio decreased by $34.4 million during the first quarter of 2015 reflecting repayments, charge-offs and the reduced activity in new loan originations. Originations of auto loans (including finance leases) for the first quarter of 2015 amounted to $89.2 million, a decrease of $55.0 million, compared to $144.2 million for the same period last year.  The auto loan and finance lease portfolios in Puerto Rico amounted to $1.0 billion and $230.2 million, respectively, as of March 31, 2015. The remaining decrease in the consumer loan portfolio was primarily related to an $8.0 million decline in the credit card loan portfolio balance and a $2.6 million decrease in boat financings.

Investment Activities

As part of its liquidity, revenue diversification and interest rate risk strategies, First BanCorp. maintains an investment portfolio that is classified as available for sale. The Corporation’s total available-for-sale investment securities portfolio as of March 31, 2015 amounted to $2.0 billion, an increase of $8.6 million from December 31, 2014. The increases were mainly due to purchases of approximately $52.0 million of U.S. government and sponsored agencies debt and MBS securities (average yield 2.21%) and a $7.1 million increase in the fair value of available-for-sale securities, partially offset by repayments.

Approximately 96% of the Corporation’s available-for-sale securities portfolio is invested in U.S. Government and Agency debentures and fixed-rate U.S. government sponsored-agency MBS (mainly GNMA, FNMA and FHLMC fixed-rate securities).

As of March 31, 2015, the Corporation held approximately $65.5 million of Puerto Rico government and agencies bond obligations, mainly bonds of the GDB and the Puerto Rico Building Authority, as part of its available-for-sale investment securities portfolio, which were reflected at their aggregate fair value of $41.5 million. 

In February 2014, the credit ratings of the Commonwealth of Puerto Rico (the “Commonwealth” or “Puerto Rico”) and most of its public corporations were lowered to non-investment grade by the three main rating agencies: Moody’s, Fitch, and S&P. 

In June 2014, the Commonwealth enacted the Fiscal Sustainability Act, which is a temporary fiscal emergency law designed to address the fiscal condition of the Commonwealth. This law represented an important effort to control expenses across the entire government structure. Further, the Commonwealth also enacted the Puerto Rico Public Corporation Debt Enforcement and Recovery Act (the “Recovery Act”), which essentially created a legal framework to allow certain public corporations to restructure their debt obligations. Prior to the enactment of the Recovery Act, there was no Commonwealth statute providing an orderly recovery regime for public corporations experiencing financial difficulties.  During July 2014, the credit ratings of the Commonwealth and most of its public corporations were lowered by the three main rating agencies: Moody’s, Fitch, and S&P as a direct result of the Commonwealth’s enactment of the Recovery Act.  On February 2015, a US District Court judge ruled that the Recovery Act is pre-empted by the Federal Bankruptcy Court and therefore void. 

During February and March 2015, the credit ratings of the Commonwealth and most of its public corporations were lowered further by the three main rating agencies. In April 2015, S&P further downgraded its General Obligations rating on the Commonwealth given their view that the Commonwealth will experience further weakening of its access to the capital markets at reasonable rates.

     The issuers of Puerto Rico government and agencies bonds held by the Corporation have not defaulted, and the contractual payments on these securities have been made as scheduled.  The Corporation’s holdings of Puerto Rico Government investments face inherent uncertainties of a challenged economy but, at this time, management does not believe that these investments are at imminent risk of default.  There are no policy triggers that mandate disposition of the securities in the event of price reductions or rating downgrades. Nor is there any indication a regulator would require the Corporation to sell its Puerto Rico Government security holdings.The Corporation has the ability and intent to hold these securities until a recovery of the fair value occurs, and it is not more likely than not that the Corporation will be required to sell the securities prior to such recovery.  It is uncertain how the financial markets may react to any potential further rating downgrade of Puerto Rico’s debt.  However, further deterioration in the fiscal situation could adversely affect the value of Puerto Rico’s government obligations.  The Corporation will continue to closely monitor Puerto Rico’s political and economic status and evaluate the portfolio for any declines in value that could be considered other-than-

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temporary. Among the events that could shed new light on the Corporation’s position are: the presentation and components of a balanced budget for the Government’s fiscal year 2016, the result of the expected PREPA re-structuring plan, and the final outcome of the proposed changes to the Sales and Use Tax, Value Added Tax, or any other tax reform variant.

The following table presents the carrying value of investments as of the indicated dates:
	As of		As of
	March 31,		December 31,
	2015		2014
		(In thousands)
Money market investments	$	216,965	$	16,961
Investment securities available for sale, at fair value:
U.S. Government and agencies obligations		386,512		340,614
Puerto Rico government obligations		41,463		43,222
Mortgage-backed securities		1,546,151		1,581,830
Other		100		-
		1,974,226		1,965,666
Other equity securities, including $28.4 million of FHLB stock		26,185		25,752
Total money market and investment securities	$	2,217,376	$	2,008,379

Mortgage-backed securities as of the indicated dates consist of:
	As of		As of
	March 31,		December 31,
(In thousands)	2015		2014
Available for sale:
FHLMC certificates	$	307,279	$	315,794
GNMA certificates		363,283		377,448
FNMA certificates		843,765		854,940
Other mortgage pass-through certificates		31,824		33,648
Total mortgage-backed securities	$	1,546,151	$	1,581,830

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The carrying values of investment securities classified as available for sale as of March 31, 2015 by contractual maturity (excluding mortgage-backed securities and equity securities) are shown below:
	Carrying		Weighted
(Dollars in thousands)	Amount		Average Yield %
U.S. Government and agencies obligations
Due within one year	$	7,500	0.11
Due after one year through five years		276,454	1.25
Due after five years through ten years		102,558	1.93
		386,512	1.39
Puerto Rico Government obligations
Due after one year through five years		22,914	4.49
Due after five years through ten years		875	5.20
Due after ten years		17,674	5.37
		41,463	4.83
Other Investment Securities
Due after one year through five years		100	1.50
Total		428,075	1.90
Mortgage-backed securities		1,546,151	2.65
Total investment securities available for sale	$	1,974,226	2.48

Net interest income of future periods could be affected by prepayments of mortgage-backed securities. Acceleration in the prepayments of mortgage-backed securities would lower yields on these securities, as the amortization of premiums paid upon acquisition of these securities would accelerate. Conversely, acceleration of the prepayments of mortgage-backed securities would increase yields on securities purchased at a discount, as the amortization of the discount would accelerate. These risks are directly linked to future period market interest rate fluctuations. Also, net interest income in future periods might be affected by the Corporation’s investment in callable securities. As of March 31, 2015, the Corporation has approximately $98.1 million in debt securities (U.S. Agencies and Puerto Rico government securities) with embedded calls and with an average yield of 2.04%. Refer to “Risk Management” below for further analysis of the effects of changing interest rates on the Corporation’s net interest income and of the interest rate risk management strategies followed by the Corporation. Also refer to Note 5 to the accompanying unaudited consolidated financial statements for additional information regarding the Corporation’s investment portfolio.

RISK MANAGEMENT

Risks are inherent in virtually all aspects of the Corporation’s business activities and operations. Consequently, effective risk management is fundamental to the success of the Corporation. The primary goals of risk management are to ensure that the Corporation’s risk taking activities are consistent with the Corporation’s objectives and risk tolerance, and that there is an appropriate balance between risk and reward in order to maximize stockholder value.

The Corporation has in place a risk management framework to monitor, evaluate and manage the principal risks assumed in conducting its activities. First BanCorp.’s business is subject to nine broad categories of risks: (1) liquidity risk, (2) interest rate risk, (3) market risk, (4) credit risk, (5) operational risk, (6) legal and compliance risk, (7) reputational risk, (8) model risk, and (9) capital risk.  First BanCorp. has adopted policies and procedures designed to identify and manage the risks to which the Corporation is exposed.

The Corporation’s risk management policies are described below as well as in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of First BanCorp’s 2014 Annual Report on Form 10-K.

Liquidity Risk and Capital Adequacy

Liquidity is the ongoing ability to accommodate liability maturities and deposit withdrawals, fund asset growth and business operations, and meet contractual obligations through unconstrained access to funding at reasonable market rates. Liquidity management involves forecasting funding requirements and maintaining sufficient capacity to meet the needs for liquidity and accommodate fluctuations in asset and liability levels due to changes in the Corporation’s business operations or unanticipated events.

The Corporation manages liquidity at two levels. The first is the liquidity of the parent company, which is the holding company that owns the banking and non-banking subsidiaries. The second is the liquidity of the banking subsidiary. As of March 31, 2015, FirstBank

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could not pay any dividend to the parent company except upon receipt of prior approval by the New York FED and the Federal Reserve Board because of the Written Agreement. 

The Asset and Liability Committee of the Board of Directors is responsible for establishing the Corporation’s liquidity policy as well as approving operating and contingency procedures, and monitoring liquidity on an ongoing basis. The Management Investment and Asset Liability Committee (“MIALCO”), using measures of liquidity developed by management, which involve the use of several assumptions, reviews the Corporation’s liquidity position on a monthly basis. The MIALCO oversees liquidity management, interest rate risk and other related matters.

The MIALCO, which reports to the Board of Directors’ Asset and Liability Committee, is composed of senior management officers, including the Chief Executive Officer, the Chief Financial Officer, the Chief Risk Officer, the Retail Financial Services Director, the Risk Manager of the Treasury and Investments Division, the Financial Analysis and Asset/Liability Director and the Treasurer. The Treasury and Investments Division is responsible for planning and executing the Corporation’s funding activities and strategy, monitoring liquidity availability on a daily basis and reviewing liquidity measures on a weekly basis. The Treasury and Investments Accounting and Operations area of the Comptroller’s Department is responsible for calculating the liquidity measurements used by the Treasury and Investment Division to review the Corporation’s liquidity position on a monthly basis; the Financial Analysis and Asset/Liability Director estimates the liquidity gap for longer periods.

In order to ensure adequate liquidity through the full range of potential operating environments and market conditions, the Corporation conducts its liquidity management and business activities in a manner that will preserve and enhance funding stability, flexibility and diversity. Key components of this operating strategy include a strong focus on the continued development of customer-based funding, the maintenance of direct relationships with wholesale market funding providers, and the maintenance of the ability to liquidate certain assets when, and if, requirements warrant.

The Corporation develops and maintains contingency funding plans. These plans evaluate the Corporation’s liquidity position under various operating circumstances and allow the Corporation to ensure that it will be able to operate through periods of stress when access to normal sources of funds is constrained. The plans project funding requirements during a potential period of stress, specify and quantify sources of liquidity, outline actions and procedures for effectively managing through a difficult period, and define roles and responsibilities.  Under the contingency funding plan, the Corporation stresses the balance sheet and the liquidity position to critical levels that imply difficulties in getting new funds or even maintaining the current funding position of the Corporation and the Bank, thereby ensuring the ability of the Corporation and the Bank to honor its respective commitments, and establishing liquidity triggers monitored by the MIALCO in order to maintain the ordinary funding of the banking business. Four different scenarios are defined in the contingency funding plan: local market event, credit rating downgrade, an economic cycle downturn event, and a concentration event. They are reviewed and approved annually by the Board of Directors’ Asset and Liability Committee.

The Corporation manages its liquidity in a proactive manner, and maintains a sound liquidity position. Multiple measures are utilized to monitor the Corporation’s liquidity position, including core liquidity, basic liquidity, and time-based reserve measures. As of March 31, 2015, the estimated core liquidity reserve (which includes cash and free liquid assets) was $1.7 billion or 13.0% of total assets, compared to $1.5 billion or 11.7% of total assets as of December 31, 2014. The basic liquidity ratio (which adds available secured lines of credit to the core liquidity) was approximately 17.7% of total assets, compared to 15.6% of total assets as of December 31, 2014. As of March 31, 2015, the Corporation had $615.4 million available for additional credit from the FHLB NY. Unpledged liquid securities as of March 31, 2015, mainly fixed-rate MBS and U.S. agency debentures, amounted to approximately $745.2 million. The Corporation does not rely on uncommitted inter-bank lines of credit (federal funds lines) to fund its operations and does not include them in the basic liquidity measure. The increased liquidity was primarily tied to the increase in total deposits.  As of March 31, 2015, the holding company had $35.8 million of cash and cash equivalents. Cash and cash equivalents at the Bank level as of March 31, 2015 were approximately $977.6 million. The Bank has $2.6 billion in brokered CDs as of March 31, 2015, of which approximately $1.8 billion mature over the next twelve months. Liquidity at the Bank level is highly dependent on bank deposits, which fund 75% of the Bank’s assets (or 56% excluding brokered CDs).

Sources of Funding

The Corporation utilizes different sources of funding to help ensure that adequate levels of liquidity are available when needed. Diversification of funding sources is of great importance to protect the Corporation’s liquidity from market disruptions. The principal sources of short-term funds are deposits, including brokered CDs, securities sold under agreements to repurchase, and lines of credit with the FHLB.

The Asset Liability Committee of the Board of Directors reviews credit availability on a regular basis. The Corporation has also securitized and sold mortgage loans as a supplementary source of funding. Long-term funding has also been obtained in the past through the issuance of notes and, to a lesser extent, long-term brokered CDs. The cost of these different alternatives, among other things, is taken into consideration.

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The Corporation has continued reducing the amounts of outstanding brokered CDs. As of March 31, 2015, brokered CDs decreased $314.6 million to $2.6 billion from brokered CDs of $2.9 billion as of December 31, 2014. At the same time as the Corporation focuses on reducing its reliance on brokered CDs, it is seeking to add core deposits.  During the first quarter of 2015, the Corporation increased non-brokered deposits, excluding government deposits, by $621.5 million to $6.8 billion.  Organic deposit growth accounted for $157.9 million of the increase, primarily growth in demand deposits and saving accounts.  The Doral Bank transaction added $463.6 million in non-brokered deposits as of March 31, 2015, excluding $43.3 million of government deposits. 

The Corporation continues to have the support of creditors, including counterparties to repurchase agreements, the FHLB, and other agents such as wholesale funding brokers. While liquidity is an ongoing challenge for all financial institutions, management believes that the Corporation’s available borrowing capacity and efforts to grow retail deposits will be adequate to provide the necessary funding for the Corporation’s business plans in the foreseeable future.

     The Corporation’s principal sources of funding are:

Brokered CDs – A large portion of the Corporation’s funding has been retail brokered CDs issued by FirstBank. Total brokered CDs decreased by $314.6 million from December 31, 2014 to $2.6 billion as of March 31, 2015. The Corporation utilized a portion of the cash received in the Doral Bank transaction to pay off maturing brokered CDs.    

     The average remaining term to maturity of the retail brokered CD outstanding as of March 31, 2015 is approximately 0.9 years.

     The use of brokered CDs has been particularly important for the growth of the Corporation. The Corporation encounters intense competition in attracting and retaining regular retail deposits in Puerto Rico. The brokered CD market is very competitive and liquid, and has enabled the Corporation to obtain substantial amounts of funding in short periods of time. This strategy has enhanced the Corporation’s liquidity position, since the brokered CDs are insured by the FDIC up to regulatory limits and can be obtained faster than regular retail deposits. During the first quarter of 2015, the Corporation issued $46.3 million in brokered CDs with an average cost of 0.93%.  

The following table presents a maturity summary of brokered and retail CDs with denominations of $100,000 or higher as of March 31, 2015:
			Total
			(In thousands)
	Three months or less	$	642,912
	Over three months to six months		799,656
	Over six months to one year		1,280,251
	Over one year		1,303,301
	Total	$	4,026,120

Certificates of deposit in denominations of $100,000 or higher include brokered CDs of $2.6 billion issued to deposit brokers in the form of large ($100,000 or more) certificates of deposit that are generally participated out by brokers in shares of less than $100,000 and are therefore insured by the FDIC. Certificates of deposits with denominations of $100,000 or higher also include $2.4 million of deposits through the Certificate of Deposit Account Registry Service.

Government deposits – As of March 31, 2015, the Corporation had $283.0 million of Puerto Rico public sector deposits compared to $227.4 million as of December 31, 2014.  Approximately 46% came from municipalities in Puerto Rico and 54% came from public corporations and the central government and agencies. The Doral Bank transaction added $43.3 million in government deposits as of March 31, 2015.

In addition, as of March 31, 2015, the Corporation had $167.9 million of government deposits in the Virgin Islands, compared to $173.3 million as of December 31, 2014.

Retail deposits – The Corporation’s deposit products also include regular savings accounts, demand deposit accounts, money market accounts and retail CDs.On February 27, 2015, FirstBank acquired 10 Puerto Rico branches of Doral Bank and assumed $522.6 million in deposits related to such branches. Total deposits, excluding brokered CDs and government deposits, increased by $621.5 million to $6.8 billion from the balance of $6.2 billion as of December 31, 2014.  Organic deposit growth accounted for $157.9 million of the increase, primarily growth in demand deposits and saving accounts, spread through the Corporation’s geographic segments. Refer to Note 15 in the accompanying unaudited consolidated financial statements for further details.

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Refer to the “Net Interest Income” discussion above for information about average balances of interest-bearing deposits, and the average interest rate paid on deposits for the quarters ended March 31, 2015 and 2014.

Securities sold under agreements to repurchase - The Corporation’s investment portfolio is funded in part with repurchase agreements. The Corporation’s outstanding securities sold under repurchase agreements amounted to $900 million as of March 31, 2015 and December 31, 2014. One of the Corporation’s strategies has been the use of structured repurchase agreements and long-term repurchase agreements to reduce liquidity risk and manage exposure to interest rate risk by lengthening the final maturities of its liabilities while keeping funding costs at reasonable levels. All of the $900 million of repurchase agreements outstanding as of March 31, 2015 consisted of structured repurchase agreements. In addition to these repurchase agreements, the Corporation has been able to maintain access to credit by using cost-effective sources such as FHLB advances. Refer to Note 16 in the Corporation’s unaudited consolidated financial statements for the quarter ended March 31, 2015 for further details about repurchase agreements outstanding by counterparty and maturities.

During the first quarter of 2015, the Corporation restructured $400 million of its repurchase agreements. Of those, $200 million were restructured by extending the contractual maturity and changing from a fixed interest rate to a variable rate; and the Corporation entered into $200 million of reverse repurchase agreements with the same counterparty under a master netting arrangement, effective April 2015, that provides for a right of setoff that meets the conditions of ASC 210-20-45-11. These repurchase agreements and reverse repurchase agreements will be presented net on the consolidated statement of financial condition in the second quarter of 2015. In addition, during the first quarter of 2015, the Corporation restructured an additional $200 million of its repurchase agreements with a different counterparty, by extending the contractual maturity and reducing the interest rate in these agreements.

Under the Corporation’s repurchase agreements, as is the case with derivative contracts, the Corporation is required to pledge cash or qualifying securities to meet margin requirements. To the extent that the value of securities previously pledged as collateral declines due to changes in interest rates, a liquidity crisis or any other factor, the Corporation is required to deposit additional cash or securities to meet its margin requirements, thereby adversely affecting its liquidity.

     Given the quality of the collateral pledged, the Corporation has not experienced significant margin calls from counterparties arising from credit-quality-related write-downs in valuations and, as of March 31, 2015, it had only $0.2 million of cash equivalent instruments deposited in connection with collateralized interest rate swap agreements.

Advances from the FHLB – The Bank is a member of the FHLB system and obtains advances to fund its operations under a collateral agreement with the FHLB that requires the Bank to maintain qualifying mortgages and/or investments as collateral for advances taken. As of March 31, 2015 and December 31, 2014, the outstanding balance of FHLB advances was $325.0 million. As of March 31, 2015, the Corporation had $615.4 million available for additional credit on FHLB lines of credit.

Though currently not in use, other potential sources of short-term funding for the Corporation include commercial paper and federal funds purchased. Furthermore, in previous years, the Corporation entered into several financing transactions to diversify its funding sources, including the issuance of notes payable and junior subordinated debentures as part of its longer-term liquidity and capital management activities.  No assurance can be given that these sources of liquidity will be available in the future and, if available, will be on comparable terms. 

In 2004, FBP Statutory Trust I, a statutory trust that is wholly owned by the Corporation and not consolidated in the Corporation’s financial statements, sold to institutional investors $100 million of its variable rate trust-preferred securities. The proceeds of the issuance, together with the proceeds of the purchase by the Corporation of $3.1 million of FBP Statutory Trust I variable rate common securities, were used by FBP Statutory Trust I to purchase $103.1 million aggregate principal amount of the Corporation’s Junior Subordinated Deferrable Debentures.

Also in 2004, FBP Statutory Trust II, a statutory trust that is wholly owned by the Corporation and not consolidated in the Corporation’s financial statements, sold to institutional investors $125 million of its variable rate trust-preferred securities. The proceeds of the issuance, together with the proceeds of the purchase by the Corporation of $3.9 million of FBP Statutory Trust II variable rate common securities, were used by FBP Statutory Trust II to purchase $128.9 million aggregate principal amount of the Corporation’s Junior Subordinated Deferrable Debentures.

The trust-preferred debentures are presented in the Corporation’s consolidated statement of financial condition as Other Borrowings. The variable rate trust-preferred securities are fully and unconditionally guaranteed by the Corporation. The $100 million Junior Subordinated Deferrable Debentures issued by the Corporation in April 2004 and the $125 million issued in September 2004 mature on June 17, 2034 and September 20, 2034, respectively; however, under certain circumstances, the maturity of Junior Subordinated Debentures may be shortened (such shortening would result in a mandatory redemption of the variable rate trust-preferred securities). The Collins Amendment of the Dodd-Frank Act eliminated certain trust-preferred securities from Tier 1 Capital. Bank holding companies, such as the Corporation, must fully phase out these instruments from Tier I capital by January 1, 2016 (25% allowed in 2015 and 0% in 2016), however, these instrument may remain in Tier 2 capital until the instruments are redeemed or

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mature. As of December 31, 2014, the Corporation had $225 million in trust preferred securities that are subject to the phase-out from Tier 1 Capital under the Basel III Rule.

With respect to the outstanding subordinated debentures, the Corporation has elected to defer the interest payments that were due in quarterly periods since March 2012. The aggregate amount of payments deferred and accrued approximates $23.7 million as of March 31, 2015. Under the indentures, we have the right, from time to time, and without causing an event of default, to defer payments of interest on the subordinated debentures by extending the interest payment period at any time and from time to time during the term of the subordinated debentures for up to twenty consecutive quarterly periods. Future interest payments are subject to Federal Reserve approval.

The Corporation’s principal uses of funds are for the origination of loans and the repayment of maturing deposits and borrowings. The ratio of residential real estate loans to total loans has increased over time. Commensurate with the increase in its mortgage banking activities, the Corporation has also invested in technology and personnel to enhance the Corporation’s secondary mortgage market capabilities.

The enhanced capabilities improve the Corporation’s liquidity profile as they allow the Corporation to derive liquidity, if needed, from the sale of mortgage loans in the secondary market. The U.S. (including Puerto Rico) secondary mortgage market is still highly liquid in large part because of the sale of mortgages through guarantee programs of the FHA, VA, HUD, FNMA and FHLMC.

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The Corporation obtained commitment authority to issue GNMA mortgage-backed securities from GNMA, and, under this program, the Corporation completed the securitization of approximately $46.9 million of FHA/VA mortgage loans into GNMA MBS during the first quarter of 2015. Any regulatory actions affecting GNMA, FNMA or FHLMC could adversely affect the secondary mortgage market.

Impact of Credit Ratings on Access to Liquidity

The Corporation’s liquidity is contingent upon its ability to obtain external sources of funding to finance its operations. The Corporation’s current credit ratings and any further downgrades in credit ratings can hinder the Corporation’s access to new forms of external funding and/or cause external funding to be more expensive, which could in turn adversely affect results of operations. Also, changes in credit ratings may further affect the fair value of unsecured derivatives that consider the Corporation’s own credit risk as part of the valuation.

The Corporation does not have any outstanding debt or derivative agreements that would be affected by credit downgrades. Furthermore, given our non-reliance on corporate debt or other instruments directly linked in terms of pricing or volume to credit ratings, the liquidity of the Corporation so far has not been affected in any material way by downgrades. The Corporation’s ability to access new non-deposit sources of funding, however, could be adversely affected by credit downgrades.

The Corporation’s credit as a long-term issuer is currently rated B+ by S&P and B- by Fitch. At the FirstBank subsidiary level, long-term issuer ratings are currently B3 by Moody’s, six notches below their definition of investment grade, B+ by S&P, four notches below their definition of investment grade, and B- by Fitch, six notches below their definition of investment grade.

 Cash Flows

Cash and cash equivalents were $984.4 million as of March 31, 2015, an increase of $188.3 million when compared to the balance as of December 31, 2014. The following discussion highlights the major activities and transactions that affected the Corporation’s cash flows during the first quarter of 2015 and 2014.

Cash Flows from Operating Activities

First BanCorp.’s operating assets and liabilities vary significantly in the normal course of business due to the amount and timing of cash flows. Management believes cash flows from operations, available cash balances and the Corporation’s ability to generate cash through short- and long-term borrowings will be sufficient to fund the Corporation’s operating liquidity needs.

For the first quarter of 2015 and 2014, net cash provided by operating activities was $75.5 million and $73.5 million, respectively.  Net cash generated from operating activities was higher than net income reported largely as a result of adjustments for items such as the provision for loan and lease losses, depreciation and amortization, proceeds from sales of loans held for sale, and impairments.

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Cash Flows from Investing Activities

The Corporation’s investing activities primarily relate to originating loans to be held for investment and purchasing, selling and repayments of available-for-sale investment securities. For the quarter ended March 31, 2015, net cash provided by investing activities was $280.0 million, primarily reflecting the net cash received from the FDIC in the Doral Bank transaction.

For the first quarter of 2014, net cash used in investing activities was $8.4 million, primarily reflecting purchases of investment securities.

Cash Flows from Financing Activities

The Corporation’s financing activities primarily include the receipt of deposits and the issuance of brokered CDs, the issuance and payments of long-term debt, the issuance of equity instruments and activities related to its short-term funding. During the first quarter of 2015, net cash used in financing activities was $167.2 million, mainly due to the repayments of maturing brokered CDs, partially offset by the organic increase in non-brokered deposits.

In the first quarter of 2014, net cash provided by financing activities was $120.7 million, mainly due to the increase in non-brokered deposits.

Capital

As of March 31, 2015, the Corporation’s stockholders’ equity was $1.7 billion, an increase of $34.0 million from December 31, 2014.  The increase was mainly driven by the net income of $25.6 million for the first quarter of 2015 and a $7.1 million increase in other comprehensive income, mainly attributable to an increase in the fair value of U.S. agency MBS and debt securities of approximately $12.4 million, partially offset by a $6.1 million decrease in the fair value of Puerto Rico government obligations held by the Corporation as part of its available-for-sale investment securities portfolio.  As a result of the Written Agreement with the New York FED, currently neither First BanCorp., nor FirstBank, is permitted to pay dividends on capital securities without prior approval. 

In July 2013, the U.S. banking regulators approved a revised regulatory capital framework for U.S. banking organizations (the “Basel III rules”) that is based on international regulatory capital requirements adopted by the Basel Committee on Banking Supervision over the past several years. The Basel III rules introduce new minimum capital ratios and capital conservation buffer requirements, change the composition of regulatory capital, require a number of new adjustments to and deductions from regulatory capital, and introduce a new “Standardized Approach” for the calculation of risk-weighted assets. The new minimum regulatory capital requirements and the Standardized Approach for the calculation of risk-weighted assets became effective for the Corporation and FirstBank on January 1, 2015. The phase-in period for certain deductions and adjustments to regulatory capital began on January 1, 2015 and will be completed on January 1, 2018. The phase-in period for the capital conservation buffer requirements begins on January 1, 2016 and will be completed on January 1, 2019.

     The Basel III rules introduce a new and separate ratio of Common Equity Tier 1 capital (“CET1”) to risk-weighted assets. CET1, a narrower subcomponent of total Tier 1 capital, generally consists of common stock and related surplus, retained earnings, accumulated other comprehensive income (“AOCI”), and qualifying minority interests. Certain banking organizations, however, including the Corporation and FirstBank, were allowed to make a one-time permanent election in early 2015 to continue to exclude AOCI items. The Corporation and FirstBank have elected to permanently exclude capital in AOCI in order to avoid significant variations in the level of capital depending upon the impact of interest rate fluctuations on the fair value of the securities portfolio.  In addition, the Basel III rules require the Corporation to maintain an additional CET1 capital conservation buffer of 2.5%. Under the fully phased-in rules, the Corporation will be required to maintain: (i) a minimum CET1 to risk-weighted assets ratio of at least 4.5%, plus the 2.5% “capital conservation buffer,” resulting in a required minimum CET1 ratio of at least 7%, (ii) a minimum ratio of total Tier 1 capital to risk-weighted assets of at least 6.0%, plus the 2.5% capital conservation buffer, resulting in a required minimum Tier 1 capital ratio of 8.5%, (iii) a minimum ratio of total Tier 1 plus Tier 2 capital to risk-weighted assets of at least 8.0%, plus the 2.5% capital conservation buffer, resulting in a required minimum total capital ratio of 10.5%, and (iv) a required minimum leverage ratio of 4%, calculated as the ratio of Tier 1 capital to average on-balance sheet (non-risk adjusted) assets. The phase-in of the capital conservation buffer will begin on January 1, 2016 with a first year requirement of 0.625% of additional CET1, which will be progressively increased over a four-year period, increasing by that same percentage amount on each subsequent January 1 until it reaches the fully phased-in 2.5% CET1 requirement on January 1, 2019.

In addition, the Basel III rules require a number of new deductions from and adjustments to CET1, including deductions from CET1 for certain intangible assets, and deferred tax assets dependent upon future taxable income; the four-year phase-in period for these adjustments generally began on January 1, 2015. Mortgage servicing assets and deferred tax assets attributable to temporary differences, among others, are required to be deducted to the extent that any one such category exceeds 10% of CET1 or all such categories in the aggregate exceed 15% of CET1.

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      In addition, the Federal Reserve Board’s, Basel III rules require that certain non-qualifying capital instruments, including cumulative preferred stock and trust preferred securities (“TRuPs”), be excluded from Tier 1 capital. In general, banking organizations such as the Corporation, began to phase out TRuPs from Tier 1 capital on January 1, 2015. The Corporation is allowed to include 25% of the $225 million outstanding qualifying TRuPs as Tier 1 capital in 2015 and the TRuPs must be fully phased out from Tier 1 capital by January 1, 2016. However, the Corporation’s TRuPs may continue to be included in Tier 2 capital until the instruments are redeemed or mature.

      The Basel III rules also revise the “prompt corrective action” (“PCA”) regulations that apply to depository institutions, including FirstBank, pursuant to Section 38 of the Federal Deposit Insurance Act by (i) introducing a separate CET1 ratio requirement for each PCA capital category (other than critically undercapitalized) with the required CET1 ratio being 6.5% for well-capitalized status; (ii) increasing the minimum Tier 1 capital ratio requirement for each PCA capital category with the minimum Tier 1 capital ratio for well-capitalized status being 8% (as compared to the previous 6%); and (iii) eliminating the previous provision that allowed a bank with a composite supervisory rating of 1 to have a 3% leverage ratio and still be adequately capitalized and maintaining the minimum leverage ratio for well-capitalized status at 5%. The Basel III rules do not change the total risk-based capital requirement (10% for well-capitalized status) for any PCA capital category. The new PCA requirements became effective on January 1, 2015.

     The Corporation and FirstBank compute risk weighted assets using the Standardized Approach required by the Basel III rules. The Standardized Approach for risk-weightings has expanded the risk-weighting categories from the four major risk-weighting categories under the previous regulatory capital rules (0%, 20%, 50%, and 100%) to a much larger and more risk-sensitive number of categories, depending on the nature of the assets. In a number of cases, the Standardized Approach results in higher risk weights for a variety of asset categories. Specific changes to the risk-weightings of assets include, among other things: (i) applying a 150% risk weight instead of a 100% risk weight for certain high volatility commercial real estate acquisition, development and construction loans, (ii) assigning a 150% risk weight to exposures that are 90 days past due (other than qualifying residential mortgage exposures, which remain at an assigned risk-weighting of 100%), (iii) establishing a 20% credit conversion factor for the unused portion of a commitment with an original maturity of one year or less that is not unconditionally cancellable, in contrast to the 0% risk-weighting under the prior rules and (iv) capital is required to cover the risk of unexpected losses due to failure of a customer or counterparty to meet its financial obligations in accordance with contractual terms (repo-style transactions).

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Set forth below are First BanCorp.'s and FirstBank's regulatory capital ratios as of March 31, 2015 and December 31, 2014:
			Banking Subsidiary
	First BanCorp		FirstBank		To be well capitalized
		Fully		Fully
As of March 31, 2015	Actual (1)	Phased-in (2)	Actual (1)	Phased-in (2)
Total capital ratio (Total capital to risk-weighted assets)	19.20%	18.67%	18.89%	18.37%	10.00%
Common Equity Tier 1 capital ratio
(Common equity Tier 1 capital to risk weighted assets) (3)	16.15%	14.72%	15.62%	13.93%	6.50%
Tier 1 capital ratio (Tier 1 capital to risk-weighted assets)	16.15%	15.09%	17.61%	17.11%	8.00%
Leverage ratio	12.16%	11.61%	13.28%	13.15%	5.00%
			Banking Subsidiary
	First BanCorp		FirstBank		To be well capitalized
As of December 31, 2014 (1)
Total capital (Total capital to risk-weighted assets)	19.70%		19.37%		10.00%
Tier 1 capital ratio (Tier 1 capital to risk-weighted assets)	18.44%		18.10%		6.00%
Leverage ratio	13.27%		13.04%		5.00%
(1) Ratios as of March 31, 2015 reflect the adoption of the Basel III Capital Rules in effect beginning January 1, 2015. Ratios for December 31, 2014
represent the previous capital rules under Basel I.
(2) Certain adjustments required under the Basel III Capital Rules will be phased in through the end of 2018. The ratios shown in this column are calculated
assuming a fully phased-in basis of all such adjustments as if they were effective as of March 31, 2015.
(3) As of March 31, 2015, Common Equity Tier 1 capital ratio is a new ratio requirement under the Basel III Capital Rules and represents common equity,
less goodwill and intangible assets, divided by risk-weighted assets (subject to phase-in adjusments as indicated in footnote above).

     The Corporation, as an institution with more than $10 billion but less than $50 billion of total consolidated assets, is subject to certain requirements established by the Dodd-Frank Act, including those related to capital stress testing. The Dodd-Frank Act stress testing requirements are implemented for the Corporation through the Federal Reserve’s Comprehensive Capital Analysis and Review program (CCAR), and the Dodd-Frank Act Stress Testing program (DFAST). Consistent with requirements of these programs, the Corporation submitted its first annual company-run stress test prior to the established deadline of March 31, 2015. Public disclosure of the results for the severely adverse economic scenario is expected to be made during the second quarter of 2015 on the Corporation’s website.

     The tangible common equity ratio and tangible book value per common share are non-GAAP 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 purchased credit card relationship intangible assets. Tangible assets are total assets less goodwill, core deposit intangibles, and purchased credit card relationship intangible assets.  Refer to “Basis of Presentation” section below for additional information.

The following table is a reconciliation of the Corporation’s tangible common equity and tangible assets as of March 31, 2015 and December 31, 2014, respectively:
		March 31,		December 31,
	(In thousands, except ratios and per share information)	2015		2014
	Total equity - GAAP	$	1,705,750	$	1,671,743
	Preferred equity		(36,104)		(36,104)
	Goodwill		(28,098)		(28,098)
	Purchased credit card relationship		(15,622)		(16,389)
	Core deposit intangible		(10,914)		(5,420)
	Tangible common equity	$	1,615,012	$	1,585,732
	Total assets - GAAP	$	13,147,919	$	12,727,835
	Goodwill		(28,098)		(28,098)
	Purchased credit card relationship		(15,622)		(16,389)
	Core deposit intangible		(10,914)		(5,420)
	Tangible assets	$	13,093,285	$	12,677,928
	Common shares outstanding		213,827		212,985
	Tangible common equity ratio		12.33%		12.51%
	Tangible book value per common share	$	7.55	$	7.45

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Off -Balance Sheet Arrangements

In the ordinary course of business, the Corporation engages in financial transactions that are not recorded on the balance sheet, or may be recorded on the balance sheet in amounts that are different from the full contract or notional amount of the transaction. These transactions are designed to (1) meet the financial needs of customers, (2) manage the Corporation’s credit, market or liquidity risks, (3) diversify the Corporation’s funding sources, and (4) optimize capital.

     As a provider of financial services, the Corporation routinely enters into commitments with off-balance-sheet risk to meet the financial needs of its customers. These financial instruments may include loan commitments and standby letters of credit. These commitments are subject to the same credit policies and approval processes used for on-balance-sheet instruments. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the statement of financial position. As of March 31, 2015, commitments to extend credit and commercial and financial standby letters of credit amounted to approximately $1.1 billion (including $645.6 million pertaining to credit card loans) and $44.5 million, respectively. Commitments to extend credit are agreements to lend to customers as long as the conditions established in the contract are met. Generally, the Corporation does not enter into interest rate lock agreements with prospective borrowers in connection with mortgage banking activities.

Contractual Obligations and Commitments
The following table presents a detail of the maturities of the Corporation’s contractual obligations and commitments, which consist of CDs, long-term contractual debt obligations, commitments to sell mortgage loans and commitments to extend credit:
	Contractual Obligations and Commitments
	As of March 31, 2015
	Total		Less than 1 year		1-3 years		3-5 years		After 5 years
	(In thousands)
Contractual obligations:
Certificates of deposit	$	4,895,742	$	3,274,957	$	1,450,423	$	134,012	$	36,350
Securities sold under agreements to repurchase		900,000		-		500,000		-		400,000
Advances from FHLB		325,000		-		300,000		25,000		-
Other borrowings		231,959		-		-		-		231,959
Total contractual obligations	$	6,352,701	$	3,274,957	$	2,250,423	$	159,012	$	668,309
Commitments to sell mortgage loans	$	83,534
Standby letters of credit	$	2,598
Commitments to extend credit:
Lines of credit	$	1,046,582
Letters of credit		41,872
Commitments to originate loans		72,074
Total commercial commitments	$	1,160,528

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The Corporation has obligations and commitments to make future payments under contracts, such as debt and lease agreements, and under other commitments to sell mortgage loans at fair value and to extend credit. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Other contractual obligations result mainly fromcontracts for the rental and maintenance of equipment. Since certain commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. For most of the commercial lines of credit, the Corporation has the option to reevaluate the agreement prior to additional disbursements. There have been no significant or unexpected draws on existing commitments.  In the case of credit cards and personal lines of credit, the Corporation can cancel the unused credit facility at any time and without cause.

Interest Rate Risk Management

First BanCorp. manages its asset/liability position in order to limit the effects of changes in interest rates on net interest income and to maintain stability of profitability under varying interest rate scenarios. The MIALCO oversees interest rate risk, and MIALCO meetings focus on, among other things, current and expected conditions in world financial markets, competition and prevailing rates in the local deposit market, liquidity, loan originations pipeline, securities market values, recent or proposed changes to the investment portfolio, alternative funding sources and related costs, hedging and the possible purchase of derivatives such as swaps and caps, and any tax or regulatory issues which may be pertinent to these areas. The MIALCO approves funding decisions in light of the Corporation’s overall strategies and objectives.

On a quarterly basis, the Corporation performs a consolidated net interest income simulation analysis to estimate the potential change in future earnings from projected changes in interest rates. These simulations are carried out over a one to five-year time horizon, assuming upward and downward yield curve shifts. The rate scenarios considered in these simulations reflect gradual upward and downward interest rate movements of 200 basis points during a twelve-month period. Simulations are carried out in two ways:

(1)Using a static balance sheet, as the Corporation had on the simulation date, and

(2)Using a dynamic balance sheet based on recent patterns and current strategies.

The balance sheet is divided into groups of assets and liabilities detailed by maturity or re-pricing structure and their corresponding interest yields and costs. As interest rates rise or fall, these simulations incorporate expected future lending rates, current and expected future funding sources and costs, the possible exercise of options, changes in prepayment rates, deposit decay and other factors, which may be important in projecting net interest income.

The Corporation uses a simulation model to project future movements in the Corporation’s balance sheet and income statement. The starting point of the projections generally corresponds to the actual values on the balance sheet on the date of the simulations.

 These simulations are highly complex, and are based on many assumptions that are intended to reflect the general behavior of the balance sheet components over the period in question. It is unlikely that actual events will match these assumptions in all cases. For this reason, the results of these forward-looking computations are only approximations of the true sensitivity of net interest income to changes in market interest rates. Several benchmark and market rate curves were used in the modeling process, primarily the LIBOR/SWAP curve, Prime, Treasury, FHLB rates, brokered CDs rates, repurchase agreement rates and the mortgage commitment rate of 30 years.

The 12-month net interest income is forecasted assuming the March 31, 2015 interest rate curves remain constant. Then net interest income is estimated under rising and falling rates scenarios. For rising rate scenarios, a gradual (ramp) parallel upward shift of the yield curves is assumed during the first twelve months (the “+200 ramp” scenario). Conversely, for the falling rate scenarios, a gradual (ramp) parallel downward shift of the yield curves is assumed during the first twelve months (the “-200 ramp” scenario). However, given the current low levels of interest rates, a full downward shift of 200 bps would represent an unrealistic scenario. Therefore, under the falling rate scenario, rates move downward up to 200 basis points, but without reaching zero. The resulting scenario shows interest rates close to zero in most cases, reflecting a flattening yield curve instead of a parallel downward scenario.

     The Libor/Swap curve for March 2015, as compared to December 2014, reflected a slight increase in the short-term horizon, between one to twelve months, with an increase of 2 basis points, while market rates decreased by 19 basis points in the medium term, that is, between 2 to 5 years. In the long term, that is, over a 5-year-time horizon, market rates decreased by 27 basis points. The Treasury curve remained flat in the short-term and decreased by 20 basis points in the medium-term horizon as compared to December 2014 end of month levels. The long-term horizon decreased by 22 basis points, as compared to December 2014 end of month levels.

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The following table presents the results of the simulations as of March 31, 2015 and December 31, 2014.  Consistent with prior years, these exclude non-cash changes in the fair value of derivatives:
	March 31, 2015								December 31, 2014
	Net Interest Income Risk								Net Interest Income Risk
	(Projected for the next 12 months)								(Projected for the next 12 months)
	Static Simulation				Growing Balance Sheet				Static Simulation				Growing Balance Sheet
(Dollars in millions)	Change		% Change		Change		% Change		Change		% Change		Change		% Change
+ 200 bps ramp	$	11.5	2.21	%	$	9.6	1.84	%	$	9.6	1.88	%	$	9.8	1.90	%
- 200 bps ramp	$	(2.6)	(0.50)	%	$	(5.3)	(1.01)	%	$	(8.2)	(1.60)	%	$	(9.3)	(1.80)	%

     The Corporation continues to manage its balance sheet structure to control the overall interest rate risk. Among the major drivers behind the change in interest income sensitivity to interest rate shifts is the increase of $671.6 million in non-brokered deposits, with an organic growth of $164.7 million, while the Doral Bank transaction added $506.9 million. Exposure to wholesale funding keeps a downward trend, with the reduction of $314.6 million in brokered CDs. On the asset side, the total loan portfolio increased by $227.7 million mainly due to the acquisition of $324.8 million in principal balance of loans, primarily residential mortgage loans, from Doral Bank while the cash and cash equivalents balance increased by $188.3 million.

Taking into consideration the above-mentioned facts for modeling purposes, the net interest income for the next twelve months under a non-static balance sheet or growing balance sheet scenario, is estimated to increase by $9.6 million in the rising rate scenario when compared to the Corporation’s flat or unchanged interest rate forecast scenario. Under the falling rate, non-static scenario, the net interest income is estimated to decrease $5.3 million.

Derivatives

First BanCorp. uses derivative instruments and other strategies to manage its exposure to interest rate risk caused by changes in interest rates beyond management’s control.

The following summarizes major strategies, including derivative activities, used by the Corporation in managing interest rate risk:

Interest rate cap agreements - Interest rate cap agreements provide the right to receive cash if a reference interest rate rises above a contractual rate. The value increases as the reference interest rate rises. The Corporation enters into interest rate cap agreements for protection from rising interest rates.

Interest rate swaps - Interest rate swap agreements generally involve the exchange of fixed-and-floating-rate interest payment obligations without the exchange of the underlying notional principal amount. As of March 31, 2015, most of the interest rate swaps outstanding are used for protection against rising interest rates. Similar to unrealized gains and losses arising from changes in fair value, net interest settlements on interest rate swaps are recorded as an adjustment to interest income or interest expense depending on whether an asset or liability is being economically hedged.

Forward Contracts - Forward contracts are sales of to-be-announced (“TBA”) mortgage-backed securities that will settle over the standard delivery date and do not qualify as “regular way” security trades. Regular-way security trades are contracts that have no net settlement provision and no market mechanism to facilitate net settlement and provide for delivery of a security within the time generally established by regulations or conventions in the market-place or exchange in which the transaction is being executed. The forward sales are considered derivative instruments that need to be marked-to-market. These securities are used to hedge the FHA/VA residential mortgage loan securitizations of the mortgage-banking operations. Unrealized gains (losses) are recognized as part of mortgage banking activities in the consolidated statement of income (loss).

     For detailed information regarding the volume of derivative activities (e.g. notional amounts), location and fair values of derivative instruments in the Statement of Financial Condition and the amount of gains and losses reported in the Statement of Income), refer to Note 11 in the accompanying unaudited consolidated financial statements.

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The following tables summarize the fair value changes in the Corporation’s derivatives as well as the sources of the fair values:
	Asset Derivatives		Liability Derivatives
	Quarter Ended		Quarter Ended
(In thousands)	March 31, 2015		March 31, 2015
Fair value of contracts outstanding at the beginning
of the period	$	39	$	(187)
Changes in fair value during the period		(38)		(34)
Fair value of contracts outstanding as of  March 31, 2015	$	1	$	(221)

	Sources of Fair Value
		Payment Due by Period
		Maturity   Less Than One Year			Maturity     1-3 Years		Maturity    3-5 Years		Maturity      in Excess      of 5 Years		Total Fair Value
(In thousands)
As of March 31, 2015
Pricing from observable market inputs -
Asset Derivatives			$	-	$	1	$	-	$	-	$	1
Pricing from observable market inputs -
Liability Derivatives				(221)		-		-		-		(221)
			$	(221)	$	1	$	-	$	-	$	(220)

Derivative instruments, such as interest rate swaps, are subject to market risk.  As is the case with investment securities, the market value of derivative instruments is largely a function of the financial market’s expectations regarding the future direction of interest rates.  Accordingly, current market values are not necessarily indicative of the future impact of derivative instruments on earnings.  This will depend, for the most part, on the level of interest rates, as well as expectations for rates in the future.

As of March 31, 2015 and December 31, 2014, all of the derivative instruments held by the Corporation were considered undesignated economic hedges.

The use of derivatives involves market and credit risk. The market risk of derivatives stems principally from the potential for changes in the value of derivative contracts based on changes in interest rates. The credit risk of derivatives arises from the potential of default from the counterparty. To manage this credit risk, the Corporation deals with counterparties of good credit standing, enters into master netting agreements whenever possible and, when appropriate, obtains collateral. Master netting agreements incorporate rights of set-off that provide for the net settlement of contracts with the same counterparty in the event of default.  All of the Corporation’s interest rate swaps are supported by securities collateral agreements, which allow the delivery of securities to and from the counterparties depending on the fair value of the instruments, to minimize credit risk.

Refer to Note 21 of the accompanying unaudited consolidated financial statements for additional information regarding the fair value determination of derivative instruments.

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Credit Risk Management

First BanCorp. is subject to credit risk mainly with respect to its portfolio of loans receivable and off-balance-sheet instruments, mainly derivatives and loan commitments. Loan receivables represents loans that First BanCorp. holds for investment and, therefore, First BanCorp. is at risk for the term of the loan. Loan commitments represent commitments to extend credit, subject to specific conditions, for specific amounts and maturities. These commitments may expose the Corporation to credit risk and are subject to the same review and approval process as for loans. Refer to “Contractual Obligations and Commitments” above for further details. The credit risk of derivatives arises from the potential of the counterparty’s default on its contractual obligations. To manage this credit risk, the Corporation deals with counterparties of good credit standing, enters into master netting agreements whenever possible and, when appropriate, obtains collateral. For further details and information on the Corporation’s derivative credit risk exposure, refer to “—Interest Rate Risk Management” above. The Corporation manages its credit risk through its credit policy, underwriting, independent loan review and quality control procedures, statistical analysis, comprehensive financial analysis, and established management committees. The Corporation also employs proactive collection and loss mitigation efforts. Furthermore, personnel performing structured loan workout functions are responsible for mitigating defaults and minimizing losses upon default within each region and for each business segment. In the case of the C&I, commercial mortgage and construction loan portfolios, the Special Asset Group (“SAG”) focuses on strategies for the accelerated reduction of non-performing assets through note sales, short sales, loss mitigation programs, and sales of OREO.  In addition to the management of the resolution process for problem loans, the SAG oversees collection efforts for all loans to prevent migration to the non-performing and/or adversely classified status.  The SAG utilizes relationship officers, collection specialists and attorneys. In the case of residential construction projects, the workout function monitors project specifics, such as project management and marketing, as deemed necessary.

The Corporation may also have risk of default in the securities portfolio. The securities held by the Corporation are principally fixed-rate U.S. agency mortgage-backed securities and U.S. Treasury and agency securities. Thus, a substantial portion of these instruments is backed by mortgages, a guarantee of a U.S. government-sponsored entity or the full faith and credit of the U.S. government.

Management, consisting of the Corporation’s Commercial Credit Risk Officer, Retail Credit Risk Officer, Chief Lending Officer and other senior executives, has the primary responsibility for setting strategies to achieve the Corporation’s credit risk goals and objectives. These goals and objectives are documented in the Corporation’s Credit Policy.

Allowance for Loan and Lease Losses and Non-performing Assets

Allowance for Loan and Lease Losses

The allowance for loan and lease losses represents the estimate of the level of reserves appropriate to absorb inherent credit losses. The amount of the allowance was determined by empirical analysis and judgments regarding the quality of each individual loan portfolio. All known relevant internal and external factors that affected loan collectability were considered, including analyses of historical charge-off experience, migration patterns, changes in economic conditions, and changes in loan collateral values. For example, factors affecting the economies of Puerto Rico, Florida (USA), the US Virgin Islands and the British Virgin Islands may contribute to delinquencies and defaults above the Corporation’s historical loan and lease losses. Such factors are subject to regular review and may change to reflect updated performance trends and expectations, particularly in times of severe stress. The process includes judgments and quantitative elements that may be subject to significant change. There is no certainty that the allowance will be adequate over time to cover credit losses in the portfolio because of continued adverse changes in the economy, market conditions, or events adversely affecting specific customers, industries or markets. To the extent actual outcomes differ from our estimates, the credit quality of our customer base materially decreases, the risk profile of a market, industry, or group of customers changes materially, or the allowance is determined to not be adequate, additional provisions for credit losses could be required, which could adversely affect our business, financial condition, liquidity, capital, and results of operations in future periods.

The allowance for loan and lease losses provides for probable losses that have been identified with specific valuation allowances for individually evaluated impaired loans and probable losses believed to be inherent in the loan portfolio that have not been specifically identified. An internal risk rating is assigned to each business loan at the time of approval and is subject to subsequent periodic reviews by the Corporation’s senior management. The allowance for loan and lease losses is reviewed on a quarterly basis as part of the Corporation’s continued evaluation of its asset quality.

The ratio of allowance for loan losses to total loans held for investment decreased slightly to 2.38% as of March 31, 2015 from 2.40% as of December 31, 2014, primarily due to the increase in the residential portfolio resulting from the acquisition of loans of Doral Bank. The allowance to total loans for each of the Corporation’s categories of loans changed as follows: the allowance to total loans for the C&I portfolio increased from 2.57% as of December 31, 2014 to 2.87% at March 31, 2015; the allowance to total loans for the commercial mortgage portfolio decreased from 3.06% at December 31, 2014 to 2.73% at March 31, 2015; the allowance to total loans for the construction loan portfolio increased from 10.38% at December 31, 2014 to 10.96% at March 31, 2015; the allowance to total loans for the residential mortgage portfolio decreased from 0.91% at December 31, 2014 to 0.86% at March 31, 2015; and the allowance to total consumer loans and finance leases increased from 3.41% as of December 31, 2014 to 3.54% as of March 31, 2015.

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Substantially all of the Corporation’s loan portfolio is located within the boundaries of the U.S. economy. Whether the collateral is located in Puerto Rico, the U.S. and British Virgin Islands or the U.S. mainland (mainly in the state of Florida), the performance of the Corporation’s loan portfolio and the value of the collateral supporting the transactions are dependent upon the performance of and conditions within each specific area’s real estate market. The real estate market in Puerto Rico experienced readjustments in value over the last few years driven by the loss of income due to higher unemployment, reduced demand and general adverse economic conditions. The Corporation sets adequate loan-to-value ratios upon original approval following its regulatory and credit policy standards. The real estate market for the U.S. Virgin Islands has declined mostly due to reduced business activity in the region, partially related to the closing in 2012 of the Hovensa refinery in St Croix. In Florida, we operate mostly in Miami, where home prices have improved, mostly driven by a higher demand from foreign investors, and a decrease in distressed property sales.

As shown in the following table, the allowance for loan and lease losses amounted to $226.1 million as of March 31, 2015, or 2.38% of total loans, compared with $222.4 million, or 2.40% of total loans, as of December 31, 2014. Refer to “Provision for Loan and Lease Losses” above for additional information.

	Quarter Ended March 31
(Dollars in thousands)	2015			2014
Allowance for loan and lease losses, beginning of period	$	222,395		$	285,858
Provision (release) for loan and lease losses:
Residential Mortgage		6,475			3,751
Commercial Mortgage		(2,137)			(851)
Commercial and Industrial		10,353			16,091
Construction		1,215			(8,050)
Consumer and Finance Leases		17,064			20,974
Provision for loan and lease losses		32,970			31,915
Charge-offs
Residential Mortgage		(5,192)			(6,422)
Commercial Mortgage		(4,006)			(5,810)
Commercial and Industrial		(4,453)			(22,459)
Construction		(605)			(970)
Consumer and Finance Leases		(17,757)			(18,046)
Total charge offs		(32,013)			(53,707)
Recoveries:
Residential Mortgage		98			69
Commercial Mortgage		276			35
Commercial and Industrial		558			663
Construction		207			617
Consumer and Finance Leases		1,573			1,328
Total recoveries		2,712			2,712
Net Charge-Offs		(29,301)			(50,995)
Allowance for loan and lease losses, end of period	$	226,064		$	266,778
Allowance for loan and lease losses to period end total loans held for investment		2.38	%		2.79	%
Net charge-offs (annualized) to average loans outstanding during the period		1.25	%		2.11	%

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The following table sets forth information concerning the allocation of the loan allowance for loan and lease losses by loan
category and the percentage of loan balances in each category to the total of such loans as of the dates indicated:
	As of					As of
	March 31, 2015					December 31, 2014
(In thousands)	Amount		Percent of loans in each category to total loans			Amount		Percent of loans in each category to total loans
Residential mortgage	$	28,682		35	%	$	27,301		33	%
Commercial mortgage loans		45,027		17	%		50,894		18	%
Construction loans		13,639		1	%		12,822		1	%
Commercial and Industrial loans (including loan
to a local financial institution)		70,179		26	%		63,721		27	%
Consumer loans and finance leases		68,537		21	%		67,657		21	%
	$	226,064		100	%	$	222,395		100	%

The following table sets forth information concerning the composition of the Corporation's allowance for loan and lease losses as of March 31, 2015 and December 31, 2014 by loan category and by whether the allowance and related provisions were calculated individually or through a general valuation allowance.
As of March 31, 2015	Residential Mortgage Loans			Commercial Mortgage Loans									Consumer and Finance Leases
										Construction Loans
(Dollars in thousands)							C&I Loans									Total
Impaired loans without specific reserves:
Principal balance of loans, net of charge-offs	$	62,337		$	100,797		$	32,080		$	8,235		$	3,791		$	207,240
Impaired loans with specific reserves:
Principal balance of loans, net of charge-offs		367,189			123,568			194,576			29,358			33,050			747,741
Allowance for loan and lease losses		14,862			13,238			24,871			3,381			5,788			62,140
Allowance for loan and lease losses to principal
balance		4.04	%		10.71	%		12.78	%		11.51	%		17.51	%		8.31	%
PCI loans:
Carrying value of PCI loans		177,601			3,279			-			-			234			181,114
Allowance for PCI loans		-			-			-			-			-			-
Allowance for PCI loans to carrying value		-			-			-			-			-			-
Loans with general allowance:
Principal balance of loans		2,724,493			1,421,619			2,216,211			86,847			1,900,107			8,349,277
Allowance for loan and lease losses		13,820			31,789			45,308			10,258			62,749			163,924
Allowance for loan and lease losses to principal
balance		0.51	%		2.24	%		2.04	%		11.81	%		3.30	%		1.96	%
Total loans held for investment:
Principal balance of loans	$	3,331,620		$	1,649,263		$	2,442,867		$	124,440		$	1,937,182		$	9,485,372
Allowance for loan and lease losses		28,682			45,027			70,179			13,639			68,537			226,064
Allowance for loan and lease losses to principal
balance (1)		0.86	%		2.73	%		2.87	%		10.96	%		3.54	%		2.38	%

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		Residential Mortgage Loans			Commercial Mortgage Loans									Consumer and Finance Leases
											Construction Loans
(Dollars in thousands)								C&I Loans									Total
As of December 31, 2014
Impaired loans without specific reserves:
Principal balance of loans, net of charge-offs		$	74,177		$	109,271		$	41,131		$	10,455		$	3,778		$	238,812
Impaired loans with specific reserves:
Principal balance of loans, net of charge-offs			350,067			101,467			195,240			29,012			30,809			706,595
Allowance for loan and lease losses			10,854			14,289			21,314			2,577			6,171			55,205
Allowance for loan and lease losses to principal
balance			3.10	%		14.08	%		10.92	%		8.88	%		20.03	%		7.81	%
PCI loans:
Carrying value of PCI loans			98,494			3,393			-			-			717			102,604
Allowance for PCI loans			-			-			-			-			-			-
Allowance for PCI loans to carrying value			-			-			-			-			-			-
Loans with general allowance:
Principal balance of loans			2,488,449			1,451,656			2,243,066			84,013			1,947,241			8,214,425
Allowance for loan and lease losses			16,447			36,605			42,407			10,245			61,486			167,190
Allowance for loan and lease losses to principal
balance			0.66	%		2.52	%		1.89	%		12.19	%		3.16	%		2.04	%
Total loans held for investment:
Principal balance of loans		$	3,011,187		$	1,665,787		$	2,479,437		$	123,480		$	1,982,545		$	9,262,436
Allowance for loan and lease losses			27,301			50,894			63,721			12,822			67,657			222,395
Allowance for loan and lease losses to principal
balance (1)			0.91	%		3.06	%		2.57	%		10.38	%		3.41	%		2.40	%
__________
(1)	Loans used in the denominator include PCI loans of $181.1 million and $102.6 million as of March 31, 2015 and December 31, 2014, respectively. However, the Corporation separately tracks and reports  PCI loans and excludes these loans from non-performing loans, impaired loans, TDRs and non-performing assets statistics.

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The following tables show the activity for impaired loans held for investment and the related specific reserve during the first quarter of 2015 and 2014:
		March 31, 2015		March 31, 2014
		(In thousands)
	Impaired Loans:
	Balance at beginning of period	$	945,407	$	919,112
	Loans determined impaired during the period		62,933		54,277
	Charge-offs		(11,715)		(32,039)
	Loans sold, net of charge-offs		(1,137)		-
	Increases to impaired loans - additional disbursements		519		625
	Foreclosures		(9,952)		(4,006)
	Loans no longer considered impaired		(9,898)		(3,728)
	Paid in full or partial payments		(21,176)		(54,853)
	Balance at end of period	$	954,981	$	879,388
		March 31, 2015		March 31, 2014
		(In thousands)
	Specific Reserve:
	Balance at beginning of period	$	55,205	$	102,601
	Provision for loan losses		18,650		14,454
	Charge-offs		(11,715)		(32,039)
	Balance at end of period	$	62,140	$	85,016

Non-performing Loans and Non-performing Assets

Total non-performing assets consist of non-performing loans (generally loans held for investment or loans held for sale on which the recognition of interest income has been discontinued when the loan became 90 days past due or earlier if the full and timely collection of interest or principal is uncertain), foreclosed real estate and other repossessed properties, as well as non-performing investment securities. When a loan is placed in non-performing status, any interest previously recognized and not collected is reversed and charged against interest income.

Non-performing Loans Policy

Residential Real Estate Loans — The Corporation classifies real estate loans in non-performing status when interest and principal have not been received for a period of 90 days or more.

Commercial and Construction Loans — The Corporation places commercial loans (including commercial real estate and construction loans) in non-performing status when interest and principal have not been received for a period of 90 days or more or when collection of all of the principal or interest is not expected due to deterioration in the financial condition of the borrower.     

Finance Leases — Finance leases are classified in non-performing status when interest and principal have not been received for a period of 90 days or more.

Consumer Loans — Consumer loans are classified in non-performing status when interest and principal have not been received for a period of 90 days or more. Credit card loans continue to accrue finance charges and fees until charged-off at 180 days delinquent.

PCI Loans — PCI loans were recorded at fair value at acquisition. Since the initial fair value of these loans included an estimate of credit losses expected to be realized over the remaining lives of the loans, the subsequent accounting for PCI loans differs from the accounting for non-PCI loans. The Corporation, therefore, separately tracks and reports PCI loans and excludes these from its non-performing loans, impaired loans, TDRs, and non-performing assets statistics.

Cash payments received on certain loans that are impaired and collateral dependent are recognized when collected in accordance with the contractual terms of the loans.  The principal portion of the payment is used to reduce the principal balance of the loan, whereas the interest portion is recognized on a cash basis (when collected). However, when management believes that the ultimate collectability of principal is in doubt, the interest portion is applied to the outstanding principal.  The risk exposure of this portfolio is diversified as to individual borrowers and industries, among other factors. In addition, a large portion is secured with real estate collateral.

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Other Real Estate Owned

OREO acquired in settlement of loans is carried at the lower of cost (the carrying value of the loan) or fair value less estimated costs to sell off the real estate. Appraisals are obtained periodically, generally, on an annual basis.

Other Repossessed Property

The other repossessed property category generally includes repossessed boats and autos acquired in settlement of loans. Repossessed boats and autos are recorded at the lower of cost or estimated fair value.

Past-Due Loans 90 days and still accruing

These are accruing loans that are contractually delinquent 90 days or more. These past-due loans are either current as to interest but delinquent as to the payment of principal or are insured or guaranteed under applicable FHA and VA programs. Past due loans 90 days and still accruing also include PCI loans with individual delinquencies over 90 days, primarily related to mortgage loans acquired from Doral in 2014.

     TDRs are classified as either accrual or nonaccrual loans. A loan on nonaccrual and restructured as a TDR will remain on nonaccrual status until the borrower has proven the ability to perform under the modified structure, generally for a minimum of six months, and there is evidence that such payments can and are likely to continue as agreed. Performance prior to the restructuring, or significant events that coincide with the restructuring, are included in assessing whether the borrower can meet the new terms and may result in the loans being returned to accrual status at the time of the restructuring or after a shorter performance period. If the borrower’s ability to meet the revised payment schedule is uncertain, the loan remains classified as a nonaccrual loan.

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The following table presents non-performing assets as of the dates indicated:
		March 31,			December 31,
(Dollars in thousands)		2015			2014
Non-performing loans held for investment:
Residential mortgage		$	172,583		$	180,707
Commercial mortgage			142,385			148,473
Commercial and Industrial			186,500			122,547
Construction			27,163			29,354
Finance leases			2,979			5,245
Consumer			31,934			37,570
Total non-performing loans held for investment		$	563,544		$	523,896
OREO			122,628			124,003
Other repossessed property			13,585			14,229
Total non-performing assets, excluding loans held for sale		$	699,757		$	662,128
Non-performing loans held for sale			54,588			54,641
Total non-performing assets, including loans held for sale (1)(2)		$	754,345		$	716,769
Past due loans 90 days and still accruing (3)(4)		$	178,572		$	162,887
Non-performing assets to total assets			5.74	%		5.63	%
Non-performing loans held for investment to total loans held for investment			5.94	%		5.66	%
Allowance for loan and lease losses		$	226,064		$	222,395
Allowance to total non-performing loans held for investment			40.11	%		42.45	%
Allowance to total non-performing loans held for investment,
excluding residential real estate loans			57.82	%		64.80	%
___________
(1)	Purchased credit impaired loans accounted for under ASC 310-30 of $181.1 million and $102.6 million as of March 31, 2015 and December 31, 2014, respectively, are excluded and not considered non-performing due to the application of the accretion method, under which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analysis.
(2)	Non-performing assets exclude $434.2 million and $494.6 million of TDR loans that are in compliance with the modified terms and in accrual status as of March 31, 2015 and December 31, 2014, respectively.
(3)	It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as past-due loans 90 days and still accruing as opposed to non-performing loans since the principal repayment is insured. These balances include $30.1 million of residential mortgage loans insured by the FHA or guaranteed by the VA, which are over 18 months delinquent, and are no longer accruing interest as of March 31, 2015.
(4)	Amounts include purchased credit impaired loans with individual delinquencies over 90 days and still accruing with a carrying value as of March 31, 2015 and December 31, 2014 of approximately $16.4 million and $15.7 million, respectively, primarily related to loans acquired from Doral in 2014.

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The following table shows non-performing assets by geographic segment:
		March 31,		December 31,
(Dollars in thousands)		2015		2014
Puerto Rico:
Non-performing loans held for investment:
Residential mortgage		$	149,156	$	156,361
Commercial mortgage			120,770		121,879
Commercial and Industrial			180,793		116,301
Construction			23,269		24,526
Finance leases			2,979		5,245
Consumer			30,003		35,286
Total non-performing loans held for investment			506,970		459,598
OREO			110,378		111,041
Other repossessed property			13,520		14,150
Total non-performing assets, excluding loans held for sale		$	630,868	$	584,789
Non-performing loans held for sale			14,583		14,636
Total non-performing assets, including loans held for sale (1)		$	645,451	$	599,425
Past due loans 90 days and still accruing  (2)		$	176,361	$	154,375
Virgin Islands:
Non-performing loans held for investment:
Residential mortgage		$	16,522	$	15,483
Commercial mortgage			12,909		11,770
Commercial and Industrial			5,707		6,246
Construction			3,738		4,064
Consumer			549		887
Total non-performing loans held for investment			39,425		38,450
OREO			6,064		6,967
Other repossessed property			30		22
Total non-performing assets, excluding loans held for sale		$	45,519	$	45,439
Non-performing loans held for sale			40,005		40,005
Total non-performing assets, including loans held for sale		$	85,524	$	85,444
Past due loans 90 days and still accruing		$	2,004	$	5,281
United States:
Non-performing loans held for investment:
Residential mortgage		$	6,905	$	8,863
Commercial mortgage			8,706		14,824
Construction			156		764
Consumer			1,382		1,397
Total non-performing loans held for investment			17,149		25,848
OREO			6,186		5,995
Other repossessed property			35		57
Total non-performing assets, excluding loans held for sale		$	23,370	$	31,900
Non-performing loans held for sale			-		-
Total non-performing assets, including loans held for sale		$	23,370	$	31,900
Past due loans 90 days and still accruing		$	207	$	3,231
(1)	Purchased credit impaired loans accounted for under ASC 310-30 of $181.1 million and $102.6 million as of March 31, 2015 and December 31, 2014, respectively, are excluded and not considered non-performing due to the application of the accretion method, under which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analysis.
(2)	Amounts include purchased credit impaired loans with individual delinquencies over 90 days and still accruing with a carrying value as of March 31, 2015 and December 31, 2014 of approximately $16.4 million and $15.7 million, respectively, primarily related to loans acquired from Doral in 2014.

      Total non-performing loans, including non-performing loans held for sale, were $618.1 million as of March 31, 2015. This represents an increase of $39.6 million, or 7%, from $578.5 million as of December 31, 2014.  The increase in non-performing assets

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was primarily attributable to the inflow of a $75.0 million credit facility with the Puerto Rico Electric Power Authority (“PREPA”), a government public corporation.  Excluding the $75.0 million PREPA credit facility, total non-performing loans decreased by $35.4 million driven by charge-offs, cash collections on commercial and construction non-performing loans (including dispositions through short sales), the restoration to accrual status of residential mortgage loans modified in TDRs after a sustained performance period, and the sale of $3.5 million of commercial and industrial non-performing loans. 

      Non-performing commercial mortgage loans, including non-performing commercial mortgage loans held for sale, decreased by $6.1 million, or 4%, from December 31, 2014. The decrease was primarily driven by cash collections and charge-offs mainly in the United States and Puerto Rico, including the disposition through a short-sale of a $6.3 million loan.  Total inflows of non-performing commercial mortgage loans of $5.8 million during the first quarter of 2015 decreased by $26.3 million compared to $32.1 million for the same period in 2014.

     Non-performing C&I loans increased by $64.0 million compared to December 31, 2014, driven by the inflow of the $75.0 million credit facility with PREPA.  Excluding the PREPA credit facility, non-performing C&I loans decreased by $11.0 million mainly due to foreclosures, charge-offs, principal repayments and a $3.5 million sale. Total inflows of non-performing C&I loans were $79.5 million.  Excluding the aforementioned PREPA credit facility, total inflows were $4.5 million during the first quarter of 2015 compared to inflows of $20.7 million for the same period in 2014.

Non-performing construction loans, including non-performing construction loans held for sale, decreased by $2.2 million, or 3%, from December 31, 2014, primarily cash collections. The inflows of non-performing construction loans of $0.1 million during the first quarter of 2015 remained unchanged compared to inflows for the same period in 2014.

The following tables present the activity of commercial and construction non-performing loans held for investment:
		Commercial Mortgage		Commercial & Industrial		Construction			Total
(In thousands)
Quarter ended March 31, 2015
Beginning balance		$	148,473	$	122,547	$	29,354		300,374
Plus:
	Additions to non-performing		5,802		79,503		128		85,433
Less:
	Non-performing loans transferred to OREO		-		(4,866)		(265)		(5,131)
	Non-performing loans charged-off		(3,970)		(4,304)		(605)		(8,879)
	Loans returned to accrual status/loan collections		(7,920)		(4,150)		(1,200)		(13,270)
	Reclassification		-		-		(249)		(249)
	Non-performing loans sold, net of charge-offs		-		(2,230)		-		(2,230)
Ending balance		$	142,385	$	186,500	$	27,163	$	356,048

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		Commercial Mortgage		Commercial & Industrial		Construction			Total
(In thousands)
Quarter ended March 31, 2014
Beginning balance		$	120,107	$	114,833	$	58,866		293,806
Plus:
	Additions to non-performing		32,084		20,655		111		52,850
Less:
	Non-performing loans transferred to OREO		(231)		-		(2,174)		(2,405)
	Non-performing loans charged-off		(5,810)		(14,422)		(871)		(21,103)
	Loans returned to accrual status/loan collections		(1,790)		(5,895)		(5,545)		(13,230)
	Reclassification		1,175		(1,175)		-		-
Ending balance		$	145,535	$	113,996	$	50,387	$	309,918

Total non-performing commercial and construction loans, including non-performing loans held for sale, with a book value of $410.6 million as of March 31, 2015 are being carried at 58% of unpaid principal balance, net of reserves and accumulated charge-offs.

Non-performing residential mortgage loans decreased by $8.1 million, or 4%, from December 31, 2014. The decrease was mainly driven by loans brought current, modifications through TDRs after a sustained performance period, charge-offs, foreclosures and cash collections during the quarter, partially offset by inflows of $19.2 million. The inflows of non-performing residential mortgage loans of $19.2 million during the first quarter of 2015 decreased compared to inflows of $34.9 million for the same period in 2014. Approximately $51.2 million, or 30% of total non-performing residential mortgage loans, have been written down to their net realizable value and no specific reserve was allocated.

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	The following table presents the activity of residential non-performing loans held for investment:
		Quarters Ended
(In thousands)		March 31, 2015		March 31, 2014
Beginning balance		$	180,707	$	161,441
Plus:
Additions to non-performing			19,213		34,883
Less:
Non-performing loans transferred to OREO			(5,048)		(1,968)
Non-performing loans charged-off			(5,073)		(5,222)
Loans returned to accrual status/loan collections			(17,465)		(16,338)
Reclassification			249
Ending balance		$	172,583	$	172,796

The amount of non-performing consumer loans, including finance leases, showed a $7.9 million decrease during the first quarter of 2015 mainly related to charge-offs and cash collections, primarily in auto loans and boat financings.  The inflows of non-performing consumer loans of $14.1 million decreased $2.2 million compared to inflows of $16.3 million for the same period in 2014.

As of March 31, 2015, approximately $198.2 million of the loans placed in non-accrual status, mainly commercial loans, were current, or had delinquencies of less than 90 days in their interest payments, including $121.9 million of TDRs maintained in nonaccrual status until the restructured loans meet the criteria of sustained payment performance under the revised terms for reinstatement to accrual status and there is no doubt about full collectability. Collections on these loans are being recorded on a cash basis through earnings, or on a cost-recovery basis, as conditions warrant.

During the quarter ended March 31, 2015, interest income of approximately $1.4 million related to non-performing loans with a carrying value of $285.8 million as of March 31, 2015, mainly non-performing construction and commercial loans, was applied against the related principal balances under the cost-recovery method.   

The allowance to non-performing loans held for investment ratio as of March 31, 2015 was 40.11%, compared to 42.45% as of December 31, 2014. As of March 31, 2015, approximately $152.6 million, or 27%, of total non-performing loans held for investment has been charged-off to their net realizable value and no specific reserve was allocated as shown in the following table.

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(Dollars in thousands)	Residential Mortgage Loans			Commercial Mortgage Loans			C&I Loans			Construction Loans			Consumer and Finance Leases			Total
As of March 31, 2015
Non-performing loans held for investment
charged-off to realizable value	$	51,163		$	63,645		$	30,763		$	5,140		$	1,865		$	152,576
Other non-performing loans held
for investment		121,420			78,740			155,737			22,023			33,048			410,968
Total non-performing loans held
for investment	$	172,583		$	142,385		$	186,500		$	27,163		$	34,913		$	563,544
Allowance to non-performing loans held for
investments		16.62	%		31.62	%		37.63	%		50.21	%		196.31	%		40.11	%
Allowance to non-performing loans held for
investments, excluding non-performing loans
charged-off to realizable value		23.62	%		57.18	%		45.06	%		61.93	%		207.39	%		55.01	%
As of December 31, 2014
Non-performing loans held for investment
charged-off to realizable value	$	74,177		$	85,824		$	40,697		$	6,182		$	1,672		$	208,552
Other non-performing loans held
for investment		106,530			62,649			81,850			23,172			41,143			315,344
Total non-performing loans held
for investment	$	180,707		$	148,473		$	122,547		$	29,354		$	42,815		$	523,896
Allowance to non-performing loans held for
investments		15.11	%		34.28	%		52.00	%		43.68	%		158.02	%		42.45	%
Allowance to non-performing loans held for
investments, excluding non-performing loans
charged-off to realizable value		25.63	%		81.24	%		77.85	%		55.33	%		164.44	%		70.52	%

The Corporation provides homeownership preservation assistance to its customers through a loss mitigation program in Puerto Rico that is similar to the U.S. government’s Home Affordable Modification Program guidelines. Depending upon the nature of borrowers’ financial condition, restructurings or loan modifications through this program, as well as other restructurings of individual commercial, commercial mortgage, construction, and residential mortgage loans in the U.S. mainland, fit the definition of a TDR. A restructuring of a debt constitutes a TDR if the creditor for economic or legal reasons related to the debtor’s financial difficulties grants a concession to the debtor that it would not otherwise consider. Modifications involve changes in one or more of the loan terms that bring a defaulted loan current and provide sustainable affordability. Changes may include the refinancing of any past-due amounts, including interest and escrow, the extension of the maturity of the loan and modifications of the loan rate. As of March 31, 2015, the Corporation’s total TDR loans held for investment of $705.1 million consisted of $354.1 million of residential mortgage loans, $166.7 million of commercial and industrial loans, $136.8 million of commercial mortgage loans, $12.5 million of construction loans, and $35.0 million of consumer loans. Outstanding unfunded commitments on TDR loans amounted to $47 thousand as of March 31, 2015.

The Corporation’s loss mitigation programs for residential mortgage and consumer loans can provide for one or a combination of the following: movement of interest past due to the end of the loan, extension of the loan term, deferral of principal payments, and reduction of interest rates either permanently or for a period of up to four years increasing back in step-up rates. Additionally, in certain cases, the restructuring may provide for the forgiveness of contractually due principal or interest. Uncollected interest is added to the end of the loan term at the time of the restructuring and not recognized as income until collected or when the loan is paid off. These programs are available only to those borrowers who have defaulted, or are likely to default, permanently on their loan and would lose their homes in the foreclosure action absent some lender concession. Nevertheless, if the Corporation is not reasonably assured that the borrower will comply with its contractual commitment, properties are foreclosed.

Prior to permanently modifying a loan, the Corporation may enter into trial modifications with certain borrowers. Trial modifications generally represent a six-month period during which the borrower makes monthly payments under the anticipated modified payment terms prior to a formal modification. Upon successful completion of a trial modification, the Corporation and the borrower enter into a permanent modification. TDR loans that are participating in, or that have been offered a binding trial modification are classified as TDRs when the trial offer is made and continue to be classified as TDRs regardless of whether the borrower enters into a permanent modification. As of March 31, 2015, the Corporation classified an additional $11.5 million of residential mortgage loans as TDRs that were participating in or had been offered a trial modification.

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 For the commercial real estate, commercial and industrial, and construction portfolios, at the time of a restructuring, the Corporation determines, on a loan-by-loan basis, whether a concession was granted for economic or legal reasons related to the borrower’s financial difficulty. Concessions granted for commercial loans could include: reductions in interest rates to rates that are considered below market; extension of repayment schedules and maturity dates beyond original contractual terms; waivers of borrower covenants; forgiveness of principal or interest; or other contract changes that would be considered a concession. The Corporation mitigates loan defaults for its commercial loan portfolios through its collection function. The function’s objective is to minimize both early stage delinquencies and losses upon default of commercial loans. In the case of the commercial and industrial, commercial mortgage, and construction loan portfolios, the SAG focuses on strategies for the accelerated reduction of non-performing assets through note sales, short sales, loss mitigation programs, and sales of OREO.  In addition to the management of the resolution process for problem loans, the SAG oversees collection efforts for all loans to prevent migration to the non-performing and/or adversely classified status.  The SAG utilizes relationship officers, collection specialists, and attorneys. In the case of residential construction projects, the workout function monitors project specifics, such as project management and marketing, as deemed necessary. The SAG utilizes its collections infrastructure of workout collection officers, credit work-out specialists, in-house legal counsel, and third-party consultants. In the case of residential construction projects and large commercial loans, the function also utilizes third-party specialized consultants to monitor the residential and commercial construction projects in terms of construction, marketing and sales, and assist with the restructuring of large commercial loans.

 In addition, the Corporation extends, renews, and restructures loans with satisfactory credit profiles. Many commercial loan facilities are structured as lines of credit, which are mainly one year in term and therefore are required to be renewed annually. Other facilities may be restructured or extended from time to time based upon changes in the borrower’s business needs, use of funds, the timing of completion of projects, and other factors. If the borrower is not deemed to have financial difficulties, extensions, renewals, and restructurings are done in the normal course of business and not considered concessions, and the loans continue to be recorded as performing.

TDRs are classified as either accrual or nonaccrual loans. A loan on nonaccrual status and restructured as a TDR will remain on nonaccrual status until the borrower has proven the ability to perform under the modified structure, generally for a minimum of six months, and there is evidence that such payments can and are likely to continue as agreed. Performance prior to the restructuring or significant events that coincide with the restructuring are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual at the time of the restructuring or after a shorter performance period. If the borrower’s ability to meet the revised payment schedule is uncertain, the loan remains classified as a nonaccrual loan. Loan modifications increase the Corporation’s interest income by returning a non-performing loan to performing status, if applicable, increase cash flows by providing for payments to be made by the borrower, and avoid increases in foreclosure and OREO costs. The Corporation continues to consider a modified loan as an impaired loan for purposes of estimating the allowance for loan and lease losses.

The following table provides a breakdown between the accrual and nonaccrual TDRs:
(In thousands)		March 31, 2015
		Accrual		Nonaccrual (1) (2)		Total TDRs
Non-FHA/VA Residential Mortgage loans		$	273,890	$	80,204	$	354,094
Commercial Mortgage Loans			75,541		61,239		136,780
Commercial and Industrial Loans			55,394		111,342		166,736
Construction Loans			4,251		8,286		12,537
Consumer Loans - Auto			11,011		6,536		17,547
Finance Leases			1,875		178		2,053
Consumer Loans - Other			12,237		3,139		15,376
Total Troubled Debt Restructurings		$	434,199	$	270,924	$	705,123
(1)	Included in non-accrual loans are $121.9 million in loans that are performing under the terms of a restructuring agreement but are reported in non-accrual status until the restructured loans meet the criteria of sustained payment performance under the revised terms for reinstatement to accrual status and there is no doubt about full collectability.
(2)	Excludes non-accrual TDRs transferred to held for sale with a carrying value of $45.7 million as of March 31, 2015.

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The OREO portfolio, which is part of non-performing assets, decreased by $1.4 million. The following table shows the activity during the quarter ended March 31, 2015 of the OREO portfolio by geographic region and type of property:

(In thousands)	As of March 31, 2015
	Puerto Rico						Virgin Islands						Florida						Consolidated
	Residential		Commercial		Construction		Residential		Commercial		Construction		Residential		Commercial		Construction
Beginning Balance	$	25,667	$	74,532	$	10,841	$	648	$	114	$	6,206	$	3,264	$	1,008	$	1,723	$	124,003
Additions		6,613		3,099		1,238		1,093		-		39		620		-		-		12,702
Sales		(3,001)		(4,651)		(118)		(318)		-		(1,718)		(350)		-		-		(10,156)
Fair value adjustments		(1,299)		(1,629)		(914)		-		-		-		(39)		-		(40)		(3,921)
	$	27,980	$	71,351	$	11,047	$	1,423	$	114	$	4,527	$	3,495	$	1,008	$	1,683	$	122,628

Net Charge-offs and Total Credit Losses

Total net charge-offs for the first quarter of 2015 were $29.3 million, or 1.25% of average loans on an annualized basis, compared to $51.0 million, or an annualized 2.11%, for the first quarter of 2014, mainly reflecting lower charge-offs in the commercial and industrial and commercial mortgage loan portfolios.

C&I loans net charge-offs in the first quarter of 2015 totaled $3.9 million, or an annualized 0.63% of related average loans, compared to $21.8 million, or an annualized 2.90%, for the first quarter of 2014.  Substantially all of the charge-offs recorded in the first quarter of 2015 were in Puerto Rico, including charge-offs of $1.3 million on the $3.5 million sale of non-performing loans. 

Commercial mortgage loans net charge-offs in the first quarter of 2015 were $3.7 million, or an annualized 0.90% of related average loans, compared to $5.8 million, or an annualized 1.27%, for the first quarter of 2014.  Approximately $2.8 million of the total net charge-offs is associated with two relationships.   

Construction loans net charge-offs in the first quarter of 2015 were $0.4 million, or an annualized 0.93% of related average loans, compared to $0.4 million, or an annualized 0.65%, for the first quarter of 2014.  Substantially all of the charge-offs recorded in the first quarter of 2015 were associated with two relationships. 

     Residential mortgage loans net charge-offs in the first quarter of 2015 were $5.1 million, or an annualized 0.65% of related average loans, compared to $6.4 million, or an annualized 1.00%, for the first quarter of 2014.   Approximately $3.8 million in charge-offs for the first quarter of 2015 resulted from valuations for impairment purposes of residential mortgage loans considered homogeneous given high delinquency and loan-to-value levels, compared to $5.1 million for the first quarter of 2014. Net charge-offs on residential mortgage loans also included $1.1 million related to foreclosures, compared to $1.0 million in the first quarter of 2014.

Net charge-offs of consumer loans and finance leases in the first quarter of 2015 were $16.2 million, or an annualized 3.30% of related average loans, compared to $16.7 million, or an annualized 3.23% of average loans, in the first quarter of 2014.  The decrease is mainly attributable to the auto loan portfolio.

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The following table presents annualized net charge-offs to average loans held-in-portfolio:
		Quarter Ended
		March 31, 2015		March 31, 2014
Residential mortgage loans		0.65	%	1.00	%
Commercial mortgage		0.90	%	1.27	%
Commercial and industrial		0.63	%	2.90	%
Construction loans		0.93	%	0.65	%
Consumer loans (1)		3.30	%	3.23	%
Total loans		1.25	%	2.11	%
_______________
(1)	Includes lease financing.

The following table presents net charge-offs to average loans held in various portfolios by geographic segment:
		Quarter Ended
		March 31,		March 31,
		2015		2014
PUERTO RICO:
	Residential mortgage	0.82	%	1.27	%
	Commercial mortgage	0.75	%	1.58	%
	Commercial and Industrial	0.72	%	3.27	%
	Construction	2.21	%	0.45	%
	Consumer and finance leases	3.42	%	3.32	%
	Total loans	1.43	%	2.47	%
VIRGIN ISLANDS:
	Residential mortgage	0.04	%	0.22	%
	Commercial mortgage	-	%	0.39	%
	Commercial and Industrial	0.61	%	0.11	%
	Construction	0.66	%	3.73	%
	Consumer and finance leases	0.13	%	0.53	%
	Total loans	0.22	%	0.63	%
FLORIDA:
	Residential mortgage	0.08	%	0.11	%
	Commercial mortgage (1)	1.80	%	(0.03)	%
	Commercial and Industrial	-	%	-	%
	Construction (2)	(2.36)	%	(6.40)	%
	Consumer and finance leases	1.25	%	1.64	%
	Total loans (3)	0.53	%	(0.12)	%
(1)  For the first quarter of  2014 recoveries in commercial mortgage loans in Florida exceeded charge-offs.
(2)  For the first quarter of  2015 and 2014 recoveries in construction loans in Florida exceeded charge-offs.
(3)  For the first quarter of  2014 recoveries in total loans in Florida exceeded charge-offs.

The above ratios are based on annualized charge-offs and are not necessarily indicative of the results expected for the entire year or in subsequent periods.

    Total credit losses (equal to net charge-offs plus losses on OREO operations) for the first quarter of 2015 amounted to $31.9 million, or 1.34% on an annualized basis to average loans and repossessed assets, in contrast to credit losses of $56.8  million, or a loss rate of 2.31%, for the same period in 2014.

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The following table presents a detail of the OREO inventory and credit losses for the periods indicated:
		Quarter Ended
		March 31,
		2015		2014
			(Dollars in thousands)
OREO
OREO balances, carrying value:
Residential		$	32,898	$	39,343
Commercial			72,473		69,167
Construction			17,257		30,112
Total		$	122,628	$	138,622
OREO activity (number of properties):
Beginning property inventory,			458		496
Properties acquired			67		69
Properties disposed			(52)		(65)
Ending property inventory			473		500
Average holding period (in days)
Residential			456		459
Commercial			436		399
Construction			970		649
			517		473
OREO operations (loss) gain:
Market adjustments and (losses) gain on sale:
Residential		$	(1,063)	$	(1,873)
Commercial			(37)		(2,257)
Construction			(406)		(450)
			(1,506)		(4,580)
Other OREO operations expenses			(1,122)		(1,257)
Net Loss on OREO operations		$	(2,628)	$	(5,837)
CHARGE-OFFS
Residential charge offs, net			(5,094)		(6,353)
Commercial charge offs, net			(7,625)		(27,571)
Construction charge offs, net			(398)		(353)
Consumer and finance leases charge-offs, net			(16,184)		(16,718)
Total charge-offs, net			(29,301)		(50,995)
TOTAL CREDIT LOSSES (1)		$	(31,929)	$	(56,832)
LOSS RATIO PER CATEGORY (2):
Residential			0.78%		1.27%
Commercial			0.73%		2.43%
Construction			1.68%		1.31%
Consumer			3.28%		3.20%
TOTAL CREDIT LOSS RATIO (3)			1.34%		2.31%
________
(1)	Equal to OREO operations (losses) gains plus charge-offs, net.
(2)	Calculated as net charge-offs plus market adjustments and gains (losses) on sale of OREO divided by average loans and repossessed assets.
(3)	Calculated as net charge-offs plus net loss on OREO operations divided by average loans and repossessed assets.

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Operational Risk

The Corporation faces ongoing and emerging risk and regulatory pressure related to the activities that surround the delivery of banking and financial products. Coupled with external influences such as market conditions, security risks, and legal risk, the potential for operational and reputational loss has increased. In order to mitigate and control operational risk, the Corporation has developed, and continues to enhance, specific internal controls, policies and procedures that are designated to identify and manage operational risk at appropriate levels throughout the organization. The purpose of these mechanisms is to provide reasonable assurance that the Corporation’s business operations are functioning within the policies and limits established by management.

The Corporation classifies operational risk into two major categories: business specific and corporate-wide affecting all business lines. For business specific risks, a risk assessment group works with the various business units to ensure consistency in policies, processes and assessments. With respect to corporate-wide risks, such as information security, business recovery, and legal and compliance, the Corporation has specialized groups, such as the Legal Department, Information Security, Corporate Compliance, and Operations. These groups assist the lines of business in the development and implementation of risk management practices specific to the needs of the business groups.

Legal and Compliance Risk

Legal and compliance risk includes the risk of noncompliance with applicable legal and regulatory requirements, the risk of adverse legal judgments against the Corporation, and the risk that a counterparty’s performance obligations will be unenforceable. The Corporation is subject to extensive regulation in the different jurisdictions in which it conducts its business, and this regulatory scrutiny has been significantly increasing over the last several years. The Corporation has established and continues to enhance procedures based on legal and regulatory requirements that are designed to ensure compliance with all applicable statutory and regulatory requirements. The Corporation has a Compliance Director who reports to the Chief Risk Officer and is responsible for the oversight of regulatory compliance and implementation of an enterprise-wide compliance risk assessment process. The Compliance division has officer roles in each major business area with direct reporting relationships to the Corporate Compliance Group.

Concentration Risk

The Corporation conducts its operations in a geographically concentrated area, as its main market is Puerto Rico. However, the Corporation has diversified its geographical risk as evidenced by its operations in the Virgin Islands and in Florida. Of the total gross loans held for investment of $9.5 billion as of March 31, 2015, approximately 83% have credit risk concentration in Puerto Rico, 11% in the United States, and 6% in the Virgin Islands.

Exposure to Puerto Rico Government

 As of March 31, 2015, the Corporation had $335.7 million of credit facilities granted to the Puerto Rico Government, its municipalities and public corporations, of which $321.7 million was outstanding, compared to $308.0 million outstanding as of December 31, 2014. Approximately $201.3 million of the granted credit facilities outstanding consisted of loans to municipalities in Puerto Rico for which, in most cases, the good faith, credit and unlimited taxing power of the applicable municipality have been pledged to their repayment.  Approximately $24.5 million consisted of loans to units of the central government, and approximately $95.9 million consisted of loans to public corporations, including the $75.0 million direct exposure to PREPA that was placed in non-performing status in the first quarter of 2015 since the government agency has not yet completed its restructuring plan.  In addition, the Corporation had $132.5 million outstanding in financings to the hotel industry in Puerto Rico guaranteed by the Puerto Rico Tourism Development Fund as of March 31, 2015, down $0.9 million, compared to $133.3 million outstanding as of December 31, 2014.  The TDF is a subsidiary of the GDB that works with private-sector financial institutions to structure financings for new hospitality projects.

  In addition, as of March 31, 2015, the Corporation held approximately $65.5 million of Puerto Rico government and agencies bond obligations, mainly bonds of the GDB and the Puerto Rico Building Authority, as part of its available-for-sale investment securities portfolio, which were reflected at their aggregate fair value of $41.5 million. 

As of March 31, 2015, the Corporation had $283.0 million of Puerto Rico public sector deposits compared to $227.4 million as of December 31, 2014.  Approximately 46% came from municipalities in Puerto Rico and 54% came from public corporations and the central government and agencies. The Doral Bank transaction added $43.3 million in government deposits as of March 31, 2015.

Impact of Inflation and Changing Prices

The financial statements and related data presented herein have been prepared in conformity with GAAP, which requires the measurement of financial position and operating results in terms of historical dollars without considering changes in the relative purchasing power of money over time due to inflation.

120

Unlike most industrial companies, substantially all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates have a greater impact on a financial institution’s performance than the effects of general levels of inflation. Interest rate movements are not necessarily correlated with changes in the prices of goods and services.

Basis of Presentation

The Corporation has included in this Form 10-Q the following financial measures that are not recognized under generally accepted accounting principles, which are referred to as non-GAAP financial measures: (i) the calculation of net interest income, interest rate spread and net interest margin rate on a tax-equivalent basis and excluding changes in the fair value of derivative instruments; 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 financial 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 excluding changes in the fair value of derivative instruments  (“valuations”), and on a tax-equivalent basis. The presentation of net interest income excluding valuations provides additional information about the Corporation’s net interest income and facilitates 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 results of peers. Refer to “Net Interest Income” above for the table that reconciles the non-GAAP financial measure “net interest income excluding fair value changes and on a tax-equivalent basis” 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 excluding fair value changes and on a tax-equivalent basis” with net interest spread and margin calculated and presented in accordance with GAAP.

     The tangible common equity ratio and tangible book value per common share are non-GAAP 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. Refer to “Risk Management-Capital” above for a reconciliation of the Corporation’s tangible common equity and tangible assets.

     Management believes that these non-GAAP measures enhance the ability of analysts and investors to analyze trends in the Corporation’s business and to better understand the performance of the Corporation. In addition, the Corporation may utilize these non-GAAP financial measures as a guide in its budgeting and long-term planning process. Any analysis of these non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP. 

121

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For information regarding market risk to which the Corporation is exposed, see the information contained in “Part I – Item 2 -“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management.”

ITEM 4.  CONTROLS AND PROCEDURES

Disclosure Control and Procedures

              First BanCorp.’s management, including its Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of First BanCorp.’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of March 31, 2015. Based on this evaluation, as of the end of the period covered by this Form 10-Q, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective.

Internal Control over Financial Reporting

              There have been no changes to the Corporation’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

122

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

    In the opinion of the Corporation's management, the pending and threatened legal proceedings of which management is aware will not have a material adverse effect on the financial condition, results of operations or cash flows of the Corporation.

ITEM 1A.  RISK FACTORS

The Corporation’s business, operating results and/or the market price of our common and preferred stock may be significantly affected by a number of factors.  For a detailed discussion of certain risk factors that could affect the Corporation’s future operations, financial condition or results for future periods see the risk factors in Item 1A, “Risk Factors,” in the Corporation’s 2014 Annual Report on Form 10-K.  These factors could also cause actual results to differ materially from historical results or the results contemplated by the forward-looking statements contained in this report.  Also refer to the discussion in “Part I – Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report for additional information that may supplement or update the discussion of  risk factors in the Corporation’s 2014 Form 10-K.

  Additional risks and uncertainties not currently known to the Corporation or currently deemed by the Corporation to be immaterial also may materially adversely affect the Corporation’s business, financial condition or results of operations. 

ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds

a)Not applicable.

b)Not applicable

c)Purchase of equity securities by the issuer and affiliated purchases. The following table provides information relating to the Corporation’s purchases of shares of its common stock in the first quarter of 2015.

Period	Total number of shares purchased (1)		Average price paid	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares That May Yet be Purchased Under These Plans or Programs
January, 2015	8,820	$	5.56	-	-
February, 2015	7,632		6.06	-	-
March, 2015	34,256		6.25	-	-
Total	50,708	$	6.10	-	-

(1) Reflects shares of common stock withheld from the common stock paid to certain senior officers as additional compensation which the Corporation calls salary stock, and upon vesting of restricted stock to cover minimum tax withholding obligations. The Corporation intends to continue to satisfy statutory tax withholding obligations in connection with shares paid as salary stock to certain senior officers and the vesting of outstanding restricted stock through the withholding of shares.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.  OTHER INFORMATION

           Not applicable.

123

ITEM 6.  EXHIBITS

See the Exhibit Index following the signature page to this Quarterly Report on Form 10-Q for a list of exhibits filed or furnished with this report, which Exhibit Index is incorporated herein by reference.

124

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Corporation has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized: 

First BanCorp.

Registrant

Date: May 11, 2015	By:	/s/ Aurelio Alemán
		Aurelio Alemán
		President and Chief Executive Officer

Date: May 11, 2015	By:	/s/ Orlando Berges
		Orlando Berges
		Executive Vice President and Chief Financial Officer

125

Exhibit Index

10.1 – Purchase and Assumption Agreement dated as of February 18, 2015 between Banco Popular de Puerto Rico and FirstBank Puerto Rico.

12.1 – Ratio of Earnings to Fixed Charges.

12.2 – Ratio of Earnings to Fixed Charges and Preference Dividends.

31.1 – CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 - CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 - CEO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 - CFO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.1- Interactive Data File (Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015, furnished in XBRL (eXtensible Business Reporting Language)

126

EX-10

Exhibit 10.1

EXECUTION COPY

PURCHASE AND ASSUMPTION AGREEMENT

between

BANCO POPULAR DE PUERTO RICO

(“Seller”)

and

FIRSTBANK PUERTO RICO

(“Purchaser”)

TABLE OF CONTENTS

		Page
ARTICLE I	TRANSFER OF ASSETS AND LIABILITIES; INTENT OF THE PARTIES		2
Section 1.1.	Transferred Assets		2
Section 1.2.	Assumed Liabilities		3
Section 1.3.	Intention of the Parties		5
ARTICLE II	BID SUBMISSION, EFFECTIVE TIME AND CLOSING		5
Section 2.1.	Bid Submission		5
Section 2.2.	Effective Time		6
Section 2.3.	Closing		6
Section 2.4.	Purchase Price		7
Section 2.5.	Post-Closing Adjustments; Settlement		8
Section 2.6.	Periodic Payments		10
ARTICLE III	TRANSITIONAL MATTERS		10
Section 3.1.	Data Conversion		10
Section 3.2.	Planning		11
Section 3.3.	Signage		11
ARTICLE IV	INDEMNIFICATION		11
Section 4.1.	Seller’s Indemnification of Purchaser		11
Section 4.2.	Purchaser’s Indemnification of Seller		12
Section 4.3.	Claims for Indemnity		12
Section 4.4.	Treatment of Indemnification Payments		13
ARTICLE V	REPRESENTATIONS AND WARRANTIES OF SELLER		13
Section 5.1.	Corporate Organization		13
Section 5.2.	No Violation		13
Section 5.3.	Corporate Authority		14
Section 5.4.	Enforceable Agreement		14
Section 5.5.	No Brokers		14
Section 5.6.	Regulatory Matters		14
Section 5.7.	No Liens		14
Section 5.8.	Limitation of Representations and Warranties		14
ARTICLE VI	REPRESENTATIONS AND WARRANTIES OF PURCHASER		15
Section 6.1.	Corporate Organization		15
Section 6.2.	No Violation		15
Section 6.3.	Corporate Authority		15
Section 6.4.	Enforceable Agreement		15
Section 6.5.	No Brokers		15

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Section 6.6.	Regulatory Matters	15
Section 6.7.	Acknowledgement	16
Section 6.8.	Limitation of Representations and Warranties	16
ARTICLE VII	RIGHTS AND OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE TIME	16
Section 7.1.	Application for Approval to Effect Purchase of Transferred Assets and Assumption of Assumed Liabilities	16
Section 7.2.	Public Announcements	16
Section 7.3.	Fees and Expenses	17
Section 7.4.	Efforts; Further Assurances	17
Section 7.5.	Liabilities, Duties and Obligations under the Primary P&A Agreement	17
Section 7.6.	Bank Premises and Personal Property	17
Section 7.7.	Assignable Contracts	20
Section 7.8.	Transferred Loans	20
Section 7.9.	Put Right with Respect to Certain Loans	20
Section 7.10.	Retention or Repurchase of Assets Essential to Receiver	22
Section 7.11.	Agreement with Respect to Public Deposits	22
Section 7.12.	Agreement with Respect to Interest on Non-Transaction Deposits and Early Withdrawal	22
Section 7.13.	Agreement with Respect to Unclaimed Deposits	22
Section 7.14.	Continuation of Banking Business	23
Section 7.15.	Insurance	24
Section 7.16.	Office Space for Receiver and Corporation	24
Section 7.17.	Employee Matters	24
Section 7.18.	Duties with Respect to Depositors of Transferred Branches	25
Section 7.19.	Books and Records	26
Section 7.20.	Payment of Transferred Deposits	27
Section 7.21.	Withheld Payments of Transferred Deposits	27
Section 7.22.	Proceedings with Respect to Certain Transferred Assets and Assumed Liabilities	27
Section 7.23.	Information	28
Section 7.24.	Audit by Receiver or Corporation	28
Section 7.25.	Tax Matters	28
Section 7.26.	Operating Expenses	29
Section 7.27.	Defense and Settlement of Certain Claims	29
Section 7.28.	Wrong Pocket Assets	29
ARTICLE VIII	CONDITIONS TO PURCHASER’S OBLIGATIONS	30
Section 8.1.	Representations and Warranties	30
Section 8.2.	Obligations Performed	30
Section 8.3.	Bid Acceptance; Primary P&A Closing	30
Section 8.4.	Regulatory Approval	30
Section 8.5.	Orders	30

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ARTICLE IX	CONDITIONS TO SELLER’S OBLIGATIONS	30
Section 9.1.	Representations and Warranties	30
Section 9.2.	Obligations Performed	30
Section 9.3.	Bid Acceptance; Primary P&A Closing	31
Section 9.4.	Regulatory Approval	31
Section 9.5.	Orders	31
ARTICLE X	TERMINATION	31
Section 10.1.	Automatic Termination	31
Section 10.2.	Other Termination	31
Section 10.3.	Procedure upon Termination	31
Section 10.4.	Payment of Expenses	32
ARTICLE XI	MISCELLANEOUS PROVISIONS	32
Section 11.1.	Survival	32
Section 11.2.	Amendment and Modification	32
Section 11.3.	Waiver or Extension	32
Section 11.4.	Assignment	32
Section 11.5.	Confidentiality	33
Section 11.6.	Addresses for Notices, Etc.	33
Section 11.7.	Counterparts	34
Section 11.8.	Headings; Construction	34
Section 11.9.	Governing Law	34
Section 11.10.	Jurisdiction; Enforcement	34
Section 11.11.	Waiver of Jury Trial	35
Section 11.12.	Entire Agreement	35
Section 11.13.	Severability	35
Section 11.14.	Parties in Interest	35

-iii-

Exhibits

1	Transferred Branches
1.1(a)(1)(A)	Owned Bank Premises
1.1(a)(2)(B)	Leased Bank Premises
1.1(a)(5)(C)	Final Project 15001 Loan Pools as of 12/31/14
1.2(a)(1)	Assumed Deposits Associated with Transferred Branches
2.2(b)(6)	Form of Closing Statement

-iv-

Table of Definitions

Acquired Assets	Section 7.19(a)
Agreement	Preamble
Alliance Agreement	Recitals
Alliance Bid	Recitals
Alliance Bidder	Recitals
Assignable Contracts	Section 1.1(a)(2)(B)
Assignment and Assumption Agreement	Section 2.3(b)(9)
Assumed Deposits	Section 1.2(a)(1)
Assumed Liabilities	Section 1.2(a)
Bank Closing Date	Section 2.2
Bank Premises	Section 1.1(a)(1)(B)
Bank Premises Surrender Date	Section 7.6(c)(1)
Bid Acceptance Deadline	Recitals
Bid Form	Section 2.4(c)(4)
Bill of Sale	Section 2.3(b)(8)
Book Value	Section 2.4(a)
Business Day	Section 2.2
Closing	Section 2.2
Closing Date	Section 2.2
Closing Statement	Section 2.3(b)(6)
Coins and Currency	Section 1.1(a)(5)(C)
Conversion	Section 3.1
Conversion Manager	Section 3.2
Corporation	Recitals
Credit Files	Section 7.9(c)(2)
day	Section 2.2
Deposit Secured Loans	Section 1.1(a)(5)(B)
Effective Time	Section 2.2
Eligible Individuals	Section 7.17(b)
Excluded Assets	Section 1.1(b)
Failed Bank	Recitals
Failed Bank Assessment Area	Section 7.14(a)
Failed Bank Records	Section 1.1(a)(8)
Fair Market Value	Section 7.6(c)(2)
FDIC	Recitals
FDIC Obligations	Section 1.2(a)(2)
FDIC Office Space	Section 7.16
Information	Section 11.5
IRA Accounts	Section 1.2(a)(1)(B)(ii)
Lead Bidder	Recitals
Leased Bank Premises	Section 1.1(a)(1)(B)
Leased Data Management Equipment	Section 1.1(a)(1)(C)
Liabilities Assumed	Section 7.19(a)
Liens	Section 1.1(a)

-v-

Loss	Section 4.1
Optional Loan Pools 30	Section 1.1(a)(5)(C)
Order	Section 8.5
Overdraft Loans	Section 1.1(a)(5)(A)
Owned Bank Premises	Section 1.1(a)(1)(A)
Parties	Preamble
Personal Property	Section 1.1(a)(1)(C)
Post-Closing Statement	Section 2.5(a)
Primary P&A Agreement	Recitals
Pro Forma	Section 2.5(a)
Purchase Price	Section 2.4
Purchaser	Preamble
Qualified Beneficiaries	Section 7.17(c)
Receiver	Recitals
Repurchase Price	Section 7.9(c)(5)
Retained Employees	Section 7.17(a)
Retained Records	Section 7.19(a)
Safe Deposit Box Business	Section 7.14(b)
Safe Deposit Contracts	Section 1.1(a)(3)
Safekeeping Assets	Section 1.1(a)(4)
Safekeeping Business	Section 7.14(c)
Seller	Preamble
Seller Transfer Costs	Section 2.4(d)
Settlement Date	Section 2.5(c)
Settlement Interest Rate	Section 2.5(d)
SFR Loans	Section 1.1(a)(5)(C)
Specialty Assets	Section 1.1(a)(1)(C)
Tax	Section 7.25(f)
Tax Authority	Section 7.25(h)
Tax Returns	Section 7.19(c)
Transfer Taxes	Section 7.25(g)
Transferred Assets	Section 1.1(a)
Transferred Branch Employees	Section 7.17(a)
Transferred Branches	Recitals
Transferred Deposits	Section 1.2(a)(1)
Transferred Loans	Section 1.1(a)(5)(C)
TSA	Section 3.1
Unclaimed Deposits	Section 7.13

-vi-

PURCHASE AND ASSUMPTION AGREEMENT

This PURCHASE AND ASSUMPTION AGREEMENT (this “Agreement”) is entered into as of February 18, 2015 between Banco Popular de Puerto Rico (“Seller”), and FirstBank Puerto Rico (“Purchaser”, together with Seller, the “Parties”).

W I T N E S S E T H:

WHEREAS, the Federal Deposit Insurance Corporation (“FDIC”) is currently marketing FDIC Project 15001, a failed bank acquisition of Doral Bank (the “Failed Bank”), and has announced that February 19th, 2015 at 8:00 am CST is the bid acceptance deadline (the “Bid Acceptance Deadline”);

WHEREAS, the FDIC has provided a process whereby prospective bidders may establish an alliance to submit a bid (an “Alliance Bid”) through a lead bidder (the “Lead Bidder”) that encompasses assets or liabilities of the Failed Bank that such Lead Bidder intends to acquire and then subsequently transfer to a third-party member of the alliance (such third party, an “Alliance Bidder”);

WHEREAS, the Parties desire to make one or more Alliance Bids by the Bid Acceptance Deadline, with Seller serving as the Lead Bidder and party to the purchase and assumption agreement to be entered by and among Seller, the FDIC, in its capacity as Receiver (the “Receiver”) and the FDIC, acting in its corporate capacity (the “Corporation”) (the “Primary P&A Agreement”), and with Purchaser serving as an Alliance Bidder;

WHEREAS, the Parties entered into an alliance agreement, dated as of February 18, 2015, by and between the Parties (the “Alliance Agreement”) and agreed to work in good faith to enter into this Agreement as promptly as practical after the date of the Alliance Agreement;

WHEREAS, if an Alliance Bid is accepted by the FDIC, Seller, in its capacity as the Lead Bidder, will purchase certain assets and assume certain liabilities of the Failed Bank upon the terms and conditions to be set forth in the Primary P&A Agreement, including certain assets and liabilities associated with the branches of the Failed Bank set forth in Exhibit 1 (the “Transferred Branches”); and

WHEREAS, Purchaser, as an Alliance Bidder, desires to purchase from Seller, and Seller, as the Lead Bidder, desires to sell to Purchaser, the Transferred Assets, and Purchaser, as an Alliance Bidder, desires to assume from Seller, and Seller, as the Lead Bidder, desires to have Purchaser assume, the Assumed Liabilities (including the Transferred Deposits) (each as defined herein), in each case upon the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and mutual agreements hereinafter set forth, Seller and Purchaser agree as follows:

ARTICLE I

TRANSFER OF ASSETS AND LIABILITIES; INTENT OF THE PARTIES

Section 1.1. Transferred Assets.

(a) As of the Effective Time and upon the terms and conditions set forth herein, Seller will sell, assign, transfer, convey and deliver to Purchaser, and Purchaser will purchase from Seller on the terms set forth herein, all of the rights, title and interest of Seller in the following assets, only to the extent such assets are transferred to Seller under the Primary P&A Agreement or the FDIC agrees to transfer any such assets directly to Purchaser and subject to all liabilities for indebtedness collateralized by “Liens” (as defined in the Primary P&A Agreement) affecting such assets (if any) to the extent provided in Section 2.1 of the Primary P&A Agreement other than liabilities for borrowings from, and obligations and indebtedness to, Federal Reserve Banks and Federal Home Loan Banks (if any) (collectively, the “Transferred Assets”):

(1) the rights set out in Section 7.6 of this Agreement with respect to:

(A) all real estate and improvements thereon of the Transferred Branches that are owned by the Failed Bank (the “Owned Bank Premises”), all of which Owned Bank Premises are listed on Exhibit 1.1(a)(1)(A);

(B) all leases under which land and/or buildings used as Transferred Branches that are leased by the Failed Bank as of the Closing Date and which Seller has an option to assume under the Primary P&A Agreement (the “Leased Bank Premises”, and together with the Owned Bank Premises, the “Bank Premises”), all of which Leased Bank Premises are listed on Exhibit 1.1(a)(1)(B);

(C) furniture, fixtures, leasehold improvements, equipment and other tangible personal property located at the Transferred Branches (but only to the extent that they are located at the Transferred Branches), including “Specialty Assets” but excluding “Leased Data Management Equipment” (each as defined in the Primary P&A Agreement) (collectively, the “Personal Property”); and

(D) leases of Personal Property located at the Transferred Branches;

(2) the rights set out in Section 7.7 of this Agreement with respect to those operating contracts under which goods or services are provided at the Transferred Branches, but excluding (A) all contracts that do not apply solely to the Transferred Branches but also apply to other branches or operations of the Failed Bank, and (B) all data processing contracts, regardless of scope (subject, in each case, to such exclusions, the “Assignable Contracts”);

-2-

(3) all safe deposit contracts and leases for the safe deposit boxes located at the Transferred Branches (the “Safe Deposit Contracts”), if any;

(4) all securities and other items held at the Transferred Branches in safekeeping for customers of the Failed Bank (the “Safekeeping Assets”), if any;

(5) the loans set forth below:

(A) overdrafts of customers (including but not limited to overdrafts made pursuant to an overdraft protection plan or similar extension of credit) in connection with the Transferred Deposits (the “Overdraft Loans”);

(B) “Deposit Secured Loans” (as defined in the Primary P&A Agreement) that are fully secured by the Transferred Deposits; and

(C) all loans in “Optional Loan Pool 30” (as defined in the document attached as Annex A to Exhibit 1.1(a)(5)(C) (“Final Project 15001 Loan Pools as of 12/31/14”) (“SFR Loans” and, together with the Overdraft Loans and Deposit Secured Loans, the “Transferred Loans”);

(6) all coins and currency located at the Transferred Branches as of the Effective Time (the “Coins and Currency”);

(7) any such Bank Premises, Personal Property or Assignable Contracts that are acquired by Purchaser pursuant to this Agreement; and

(8) “Failed Bank Records” (as defined in the Primary P&A Agreement) relating to the Transferred Assets, subject to Section 7.19 of this Agreement.

(b) The Parties understand and agree that Purchaser is purchasing only the assets specified in this Agreement and only to the extent Seller obtains such assets under the Primary P&A Agreement or the FDIC agrees to transfer any such assets directly to Purchaser. Purchaser shall have no interest in or right to any other assets (the “Excluded Assets”).

Section 1.2. Assumed Liabilities.

(a) From and after the Effective Time, Purchaser will assume, and will pay, perform and discharge as they become due, all of the following (collectively the “Assumed Liabilities”):

(1) all liabilities, duties and obligations related to the “Assumed Deposits” (as defined in the Primary P&A Agreement) that were transferred to Seller under the Primary P&A Agreement that (A) are booked at the Transferred Branches or (B) are (i) non-brokered certificate of deposits or (ii) Assumed Deposits in individual retirement accounts (the “IRA Accounts”), in each of the cases of clauses (A) and (B), which were booked at the Transferred Branches as of September 30, 2014 to the extent such deposits remain outstanding as of the

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Effective Time, in each of the cases of clauses (A) and (B), including accrued but unpaid or uncredited interest thereon (collectively, the “Transferred Deposits”). For informational purposes only, a list of the amounts of Assumed Deposits associated with the Transferred Branches as of December 31, 2014 based upon the information provided by the FDIC is attached as Exhibit 1.2(a)(1);

(2) all of the liabilities, duties and obligations of Seller existing or required to be performed from and after the Effective Time under the Primary P&A Agreement with respect to the Transferred Assets, the Assumed Liabilities or the Transferred Branches (the “FDIC Obligations”);

(3) all liabilities, duties and obligations relating to the Transferred Branch Employees to the extent that Seller is responsible for those liabilities, duties and obligations under the Primary P&A;

(4) all liabilities, duties and obligations for Taxes relating to the Transferred Assets, the Assumed Liabilities or the Transferred Branches to the extent that Seller is responsible for those liabilities, duties and obligations under the Primary P&A, including, but not limited to, all liabilities, duties and obligations for Taxes set forth in Section 7.25 of this Agreement; and

(5) all other liabilities, duties and obligations of any nature whatsoever, whether accrued or unaccrued, primary or secondary, contingent or non-contingent, direct or indirect, asserted or unasserted, known or unknown, relating to the Transferred Assets, the Assumed Liabilities or the Transferred Branches to the extent that Seller is responsible for those liabilities, duties and obligations under the Primary P&A (including all accrued interest and fees relating to the Transferred Deposits), except for liabilities, duties or obligations of any nature whatsoever that have been created or have resulted from the actions or inactions of Seller.

(b) Without limiting the generality of the foregoing, it is not the intention of the Parties that the assumption by Purchaser of the Assumed Liabilities shall in any way enlarge the rights of any third parties relating thereto. Nothing contained in this Agreement shall prevent either Party hereto from contesting matters relating to the Assumed Liabilities with any third-party obligee. The Parties understand and agree that Purchaser is assuming only those liabilities, duties and obligations set forth in Section 1.2(a) of this Agreement above and Purchaser shall have no liability, duty or obligation of any kind except to the extent expressly set forth above. Under no circumstances will Purchaser have any liability, duty or obligation in connection with any of the Excluded Assets.

(c) Notwithstanding the foregoing, any IRA Account that requires consent to transfer will remain with Seller until such time as all required consents have been obtained. From and after the Effective Time, Purchaser and Seller will use their respective commercially reasonable efforts to obtain any such consents. Seller and Purchaser will use their respective commercially reasonable efforts to cooperate with each other in taking any action necessary to accomplish either the appointment of Purchaser as successor custodian or the delegation to Purchaser of Seller’s authority and responsibility as custodian of such IRA Accounts (other than IRA Accounts that are self-directed).

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Section 1.3. Intention of the Parties.

(a) It is the express intention of the Parties that this Agreement replicate, in all ways possible, a direct purchase of the Transferred Assets and assumption of the Assumed Liabilities by Purchaser from the Receiver. Seller’s role in this Agreement is intended to be a pass-through to synthetically recreate, by contract, the terms of such a direct purchase and assumption. Accordingly, this Agreement shall be interpreted, and the Parties agree to cooperate to take all steps necessary, to effectuate this intention.

(b) Certain provisions of this Agreement rely on Seller being able to exercise certain rights under the Primary P&A Agreement on behalf of Purchaser. The Parties acknowledge and agree that (1) the Receiver may not permit such actions or may require additional agreements or undertakings from the Parties prior to permitting such actions and (2) whenever possible, the Parties agree to work with the Receiver to permit Purchaser to interface directly with the Receiver and exercise any rights directly without the involvement of Seller. The Parties acknowledge and agree that to the extent that the Receiver does not permit Purchaser to interface directly with the Receiver and exercise rights relating to the Transferred Assets and the Assumed Liabilities in a manner that allows Purchaser to exercise all rights to the Transferred Assets and the Assumed Liabilities that Seller has with respect to such Transferred Assets and Assumed Liabilities as a party to the Primary P&A Agreement, Seller and Purchaser will cooperate to allow Purchaser to exercise such rights as if Purchaser had the rights of Seller under Primary P&A Agreement, to the extent possible. Without limiting the generality of the foregoing, Purchaser and Seller will use their respective commercially reasonable efforts to obtain any consents from any third party that are required in order for Purchaser to obtain the benefits provided for in this Agreement, including all right, title and interest to the Transferred Assets. The Parties acknowledge and agree that any costs incurred by Seller in the exercise of any rights by or on behalf of Purchaser shall be reimbursed by Purchaser pursuant to Section 2.6 of this Agreement.

ARTICLE II

BID SUBMISSION, EFFECTIVE TIME AND CLOSING

Section 2.1. Bid Submission. Purchaser and Seller agree that, unless this Agreement is terminated prior to the Bid Acceptance Deadline, Seller shall submit one or more Alliance Bids to the Receiver by the Bid Acceptance Deadline, with Seller serving as the Lead Bidder and Purchaser serving as an Alliance Bidder. Seller will coordinate with Purchaser the submission of any Alliance Bid and will keep Purchaser reasonably apprised in a timely manner of the status of the Alliance Bid(s) and any communications to or from the FDIC relating to the Transferred Assets, Assumed Deposits or Transferred Branches. The Parties will cooperate with each other in connection with responding to any communication from the FDIC relating to the Transferred Assets, Assumed Deposits or Transferred Branches, including, without limitation, any subsequent rounds of bidding or requests for a “best and final” bid by the FDIC, if any. Any modifications to any Alliance Bid that may affect the rights or obligations of Purchaser as set forth in this Agreement must be mutually agreed between the Parties in writing, and in the absence thereof, the then-current Alliance Bid shall remain in effect.

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Section 2.2. Effective Time. Subject to the submission of an Alliance Bid set forth in Section 2.1 of this Agreement and the acceptance of an Alliance Bid by the Receiver, the purchase of the Transferred Assets and assumption of the Assumed Liabilities provided for in this Agreement shall occur at closing (the “Closing”). Purchaser and Seller both agree that the Closing will be consummated on the same day as the “Bank Closing Date” (as defined in the Primary P&A Agreement) subject to the satisfaction or waiver of all conditions set forth in Article VIII and Article IX (excluding any such conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions) (the “Closing Date”). The effective time (the “Effective Time”) shall be 12:01 a.m. on the Closing Date. For purposes of this Agreement, the term “Business Day” shall have the same meaning as set forth in the Primary P&A Agreement, and the term “day” shall mean calendar day.

Section 2.3. Closing.

(a) All actions taken and documents delivered at the Closing shall be deemed to have been taken and executed simultaneously, and no action shall be deemed taken nor any document delivered until all have been taken and delivered.

(b) At the Closing, subject to all the terms and conditions of this Agreement, Seller shall deliver or cause to be delivered to Purchaser (it being understood that the items listed in subsections (b)(1) and (b)(2) shall be transferred by Seller promptly upon the receipt of such items by Seller from the Receiver or at such later time as provided in Section 7.19 of this Agreement, which may be after the Closing):

(1) keys to the safe deposit boxes and copies of all other records in the possession of Seller related to the Safe Deposit Box Business and the Safekeeping Business;

(2) records in the possession of Seller related to the Transferred Deposits, the Transferred Loans and any collateral securing the Transferred Loans;

(3) immediately available funds in the net amount shown as owing to Purchaser by Seller on the Closing Statement, if the Purchase Price is positive;

(4) the Coins and Currency and the Safekeeping Assets;

(5) a certificate of a proper officer of Seller, dated as of the Closing Date, certifying to the fulfillment of all conditions which are the obligation of Seller hereunder;

(6) a Closing Statement, substantially in the form attached hereto as Exhibit 2.2(b)(6) (the “Closing Statement”);

(7) a duly executed counterpart to the TSA;

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(8) a bill of sale transferring to Purchaser all of Seller’s interest in the Transferred Assets that are tangible personal property (“Bill of Sale”); and

(9) an assignment and assumption agreement assigning Seller’s interest in the Safe Deposit Contracts, Transferred Loans and Transferred Deposits (“Assignment and Assumption Agreement”).

(c) At the Closing, subject to all the terms and conditions of this Agreement, Purchaser shall deliver to Seller:

(1) immediately available funds in the net amount shown as owing to Seller by Purchaser on the Closing Statement, if the Purchase Price is negative;

(2) a certificate and receipt acknowledging the delivery and receipt of possession of the property and records referred to in this Agreement;

(3) a certificate of a proper officer of Purchaser, dated as of the Closing Date, certifying to the fulfillment of all conditions that are the obligation of Purchaser hereunder; and

(4) a duly executed counterpart to the TSA, the Bill of Sale and the Assignment and Assumption Agreement.

The Parties agree that, from time to time, whether before, on or after the Closing Date, each of them will execute and deliver such further instruments of assignments and directions for conveyance and transfer and take such other actions as may be reasonably necessary to carry out the purposes and intent of this Agreement, including such further actions as are required under Section 9.1 or Section 9.2 of the Primary P&A Agreement. Any exhibits or agreements not attached to this Agreement will be in a form to be mutually agreed by the Parties.

Section 2.4. Purchase Price. At the Closing, as consideration for the purchase of the Transferred Assets and assumption of the Assumed Liabilities, Seller shall pay Purchaser a purchase price (or, in the event that the purchase price calculated pursuant hereto is a negative number, Purchaser shall pay to Seller the absolute value of such figure) equal to the sum of the following (the “Purchase Price”), each as set forth on the Closing Statement:

(a) an amount equal to the aggregate “Book Value,” as such term is defined in the Primary P&A Agreement, of the Transferred Deposits, MINUS

(b) an amount equal to a deposit premium of 1.6% applied to the total amount of the Transferred Deposits; provided that, to the extent any accounts associated with the Transferred Deposits are listed in Schedule 7 of the Primary P&A Agreement as excluded from the calculation of premium to be paid on Assumed Deposits under the Primary P&A Agreement, such same accounts shall be excluded from the calculation of the deposit premium to be paid on the Transferred Deposits, MINUS

(c) an amount equal to the sum of the following:

(1) an amount equal to 91.0% of the aggregate Book Value of the SFR Loans; PLUS

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(2) an amount equal to 62.4% of the aggregate Book Value of the Overdraft Loans and Deposit Secured Loans; PLUS

(3) the aggregate face amount any Coins and Currency; PLUS

(4) the aggregate fixed price of the Owned Bank Premises set forth on the “Bid Form”; MINUS,

(d) an amount equal to the sum of the following (“Seller Transfer Costs”) to the extent paid by Seller or payable on the Closing Date:

(1) the amount of any ad valorem Tax liability related to the Transferred Assets that Seller is required to assume pursuant to Section 2.1(d) of the Primary P&A Agreement, PLUS

(2) the amount of any deferred revenue, income or fees recorded on the general ledger of the Failed Bank as of the Bank Closing Date attributable to the Safe Deposit Box Business and the Safekeeping Business conducted at the Transferred Branches (if any) as provided in Section 2.1(n) of the Primary P&A Agreement, PLUS

(3) the amount of any costs, fees and expenses incurred by Seller in (A) the transfer of the Transferred Assets and Transferred Deposits from the Failed Bank to Seller and (B) the transfer of the Transferred Assets and Transferred Deposits from Seller to Purchaser, in each case, including any MERS transaction charges (if any) and, for the avoidance of doubt, including any legal fees or transfer fees reasonably incurred by Seller in consultation with Purchaser in connection with such transfer.

(e) For avoidance of doubt, to the extent that pursuant to this Agreement, Purchaser acquires any of the Transferred Assets or assumes any of the Transferred Deposits directly from the Receiver and payment therefor is made by Purchaser directly to the Receiver or from Receiver directly to Purchaser, then the amount of the Purchase Price owed by Seller to Purchaser or by Purchaser to Seller, as the case may be, shall be adjusted to reflect such direct exchange of funds between the Receiver and Purchaser. Under no circumstances will Purchaser be required to pay an amount for a Transferred Asset which is in excess of the amount set forth in this Agreement.

Section 2.5. Post-Closing Adjustments; Settlement.

(a) Post-Closing Statement. As soon as practicable after receiving the “Pro Forma” (as defined in the Primary P&A Agreement) statement provided to Seller by the Receiver under Section 8.1 of the Primary P&A Agreement, Seller shall deliver to Purchaser a post-closing statement, dated as of Bank Closing Date, reflecting (1) any needed changes to the Closing Statement based on changes reflected in the Pro Forma statement with respect to the

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Transferred Assets, the Assumed Liabilities or the Transferred Branches (including any amounts relating to the rights set out in Section 7.6 of this Agreement) and (2) any Seller Transfer Costs paid by Seller prior to the date of the Post-Closing Statement and not taken into account in calculating the Purchase Price (the “Post-Closing Statement”).

(b) Correction of Errors and Omissions; Other Liabilities.

(1) Adjustments to Correct Errors. In the event any bookkeeping omissions or errors are discovered in the Failed Bank’s records through the Receiver’s preparing any Pro Forma statement or in completing the transfers and assumptions contemplated by the Primary P&A Agreement or this Agreement, Purchaser agrees to correct such errors and omissions in its records with respect to the Transferred Assets, the Assumed Liabilities or the Transferred Branches in accordance with Section 8.2(a) of the Primary P&A Agreement.

(2) Receiver’s Rights Regarding Other Liabilities. Subsequent to the date of the Primary P&A Agreement, if the Receiver, in its discretion, requires any claim with respect to the Transferred Assets, the Assumed Liabilities or the Transferred Branches to be assumed by Seller in a manner contemplated by Section 8.2(b) of the Primary P&A Agreement, Purchaser shall agree to assume such claim from Seller. If the Receiver makes any adjustments to the Pro Forma statement provided by the Receiver to Seller pursuant to Section 8.1 of the Primary P&A Agreement, Seller will make appropriate adjustments to the Post-Closing Statement provided by Seller to Purchaser pursuant to Section 2.5(b)(1) of this Agreement as may be necessary.

(3) Other Adjustments. To the extent applicable, Purchaser agrees to make any adjustment required by Section 8.2(c) of the Primary P&A Agreement.

(c) Payments.

(1) Seller agrees to pay to Purchaser on the “Settlement Date” (as defined in the Primary P&A Agreement), or Purchaser agrees to pay to Seller on the Settlement Date, as the case may be, a payment in an amount which reflects net adjustments (including any costs, expenses and fees associated with determinations of value with respect to the Transferred Assets, the Assumed Liabilities or the Transferred Branches) made pursuant to Section 2.5(a) and Section 2.5(b) of this Agreement, plus interest as provided in Section 2.5(d) of this Agreement.

(2) If any further transfer of assets to or assumption of liabilities or claims by Seller is necessary in accordance with Section 8.1 or Section 8.2 of the Primary P&A Agreement, to the extent that corresponding further transfer of assets to or assumption of liabilities or claims by Purchaser is necessary in accordance with Section 2.5(a) or Section 2.5(b) of this Agreement, the Parties will seek arrangements so that Purchaser can effect any further transfer of assets to or assumption of liabilities or claims by Purchaser directly with the Receiver on

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the Settlement Date. If such an arrangement is not practical, the Parties agree to cooperate so as to effect both (i) any further transfer of assets to or assumption of liabilities or claims by Seller necessary in accordance with Section 8.1 or Section 8.2 of the Primary P&A Agreement and (ii) any further transfer of assets to or assumption of liabilities or claims by Purchaser necessary in accordance with Section 2.5(a) or Section 2.5(b) of this Agreement.

(d) Interest. Any amounts paid under Section 2.5(c) or Section 2.5(e) of this Agreement shall bear interest for the period from and including the day following the Bank Closing Date to and including the day preceding the payment at the “Settlement Interest Rate” (as defined in the Primary P&A Agreement).

(e) Subsequent Adjustments. In the event that any errors or omissions as contemplated by Section 2.5(b) of this Agreement or any error with respect to the payment made under Section 2.5(c) of this Agreement with respect to the Transferred Assets, the Assumed Liabilities or the Transferred Branches are discovered after the Settlement Date, the Parties agree to promptly correct any such errors or omissions, make any payments and effect any transfers or assumptions as may be necessary to reflect any such correction plus interest as provided in Section 2.5(d) of this Agreement; provided that, no subsequent adjustments pursuant to this Section 2.5(e) of this Agreement shall be made unless and until any corresponding subsequent adjustments are also made pursuant to Section 8.5 of the Primary P&A Agreement.

Section 2.6. Periodic Payments. From and after the Effective Time, (a) Purchaser agrees to reimburse Seller for any amounts owed by Seller to the Receiver with respect to the Transferred Assets, the Assumed Liabilities or the Transferred Branches and any Seller Transfer Costs not taken into account in the calculation of the Purchase Price, as adjusted by the Post-Closing Statement (including any amounts relating to the rights set out in Section 7.6 of this Agreement) and (b) Seller agrees to pass on to Purchaser any amounts received by Seller from the Receiver with respect to the Transferred Assets, the Assumed Liabilities or the Transferred Branches (including any amounts relating to the rights set out in Section 7.6 of this Agreement). At least once every two (2) weeks during the first six (6) months after the Bank Closing Date, and on a monthly basis thereafter until the eighteenth (18^th) month anniversary of the Bank Closing Date, Seller will deliver to Purchaser a statement showing the net amounts owed or received under this Section 2.6 of this Agreement. Any such amounts will be settled within two (2) Business Days of delivery of each such statement and, if owing to the Receiver or third parties, will be paid directly to the Receiver or the other third parties when possible.

ARTICLE III

TRANSITIONAL MATTERS

Section 3.1. Data Conversion.

(a) The Parties agree that the conversion of the data processing with respect to the Transferred Assets, Assumed Liabilities and the Transferred Branches (the “Conversion”) will occur after the Closing, on a date to be mutually agreed by the Parties. The Parties agree to use their commercially reasonable efforts to cause the Conversion to occur as soon as reasonably

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practicable but in no event later than one hundred and eighty (180) days from the Closing Date. Prior to the Conversion, Seller will service the Transferred Branches pursuant to a transition services agreement (“TSA”) to be entered into by the Parties within seven (7) Business Days after the date of this Agreement. The Parties will undertake in good faith to enter into a TSA which is designed to provide for the provision of transition services by Seller to Purchaser in a manner that enables the Purchaser to receive services reasonably necessary to operate the Transferred Branches during the transition period in a manner consistent with market practice, including, the servicing of loans secured by mortgages forming part of the Transferred Assets. All services under the TSA will be provided at cost, without any markup.

(b) Prior to the Conversion, Purchaser will provide Seller with a timetable, data and other materials necessary for Seller to complete the Conversion. Included in such information will be initial data definitions and layouts, which Seller can use to form the basis for electronic data transfers by Seller or its service provider.

(c) Prior to Conversion, Purchaser and Seller will agree on Conversion requirements, transitional and Closing matters.

Section 3.2. Planning. Within five (5) Business Days after the Closing Date, Purchaser and Seller shall each appoint qualified staff members to act as project managers for the Conversion (each a “Conversion Manager”). The Conversion Managers shall act as the principal contacts between the Parties on matters relating to the Conversion and shall mutually develop a conversion plan.

Section 3.3. Transferred Branches. From and after the Closing Date and subject to the terms of this Agreement and the TSA, Purchaser may make any and all changes at the Transferred Branches, including, but not limited to, removal and disposition of any interior and exterior signage, computers, printers , monitors, chairs, desks, cubicles, logos, decals, safes, locks, merchandising and promotional material. Purchaser may also rearrange or modify interior branch furniture and décor layouts, ATM locations or number of ATM’s, and color schemes, in each case, subject to the terms of this Agreement and the TSA.

ARTICLE IV

INDEMNIFICATION

Section 4.1. Seller’s Indemnification of Purchaser. From and after the Effective Time, Seller shall indemnify, hold harmless and defend Purchaser and its representatives, directors, officers, employees, agents, controlling persons and affiliates from and against any and all costs, expenses, liabilities, losses or damages, including reasonable attorneys’ fees and expenses (a “Loss”) to the extent arising out of or related to (a) any breach by Seller of any representation or warranty contained herein; (b) any breach by Seller of any covenant, agreement or undertaking of Seller contained herein; (c) any failure to perform any actions required to be performed by Seller under the Primary P&A Agreement with respect to any matter related to the Transferred Assets and the Assumed Liabilities, provided that such failure is not the result of the failure of Purchaser to perform any actions required to be performed by Purchaser under this Agreement; (d) claims arising after the Effective Time with respect to Excluded Assets; and (e) without

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limiting the provisions in subsection (b), Losses resulting from third-party claims arising in connection with any Lien on the Transferred Assets in favor of Federal Reserve Banks or Federal Home Loan Banks existing on the Bank Closing Date (“Covered Liens”).

Section 4.2. Purchaser’s Indemnification of Seller. From and after the Effective Time, Purchaser shall indemnify, hold harmless and defend Seller and its representatives, agents, controlling persons and affiliates from and against any Loss incurred by Seller to the extent arising out of or relating to (a) any breach by Purchaser of any representation or warranty contained herein, (b) any breach by Purchaser of any covenant or agreement contained herein or in any lease governing a Leased Bank Premises, (c) actions or omissions of Purchaser occurring from and after the Effective Time in conducting the operations at the Transferred Branches, (d) any failure to perform any actions required to be performed by Purchaser under this Agreement with respect to the Transferred Assets, the Assumed Liabilities or the Transferred Branches and (e) any claims arising after the Effective Time with respect to the Transferred Assets, the Assumed Liabilities or the Transferred Branches (including, for the avoidance of doubt, any claims brought by the Receiver or the Corporation against Seller pursuant to Section 12.4 of Primary P&A Agreement as a result of Purchaser’s failure to perform its obligations under this Agreement).

Section 4.3. Claims for Indemnity.

(a) A claim for indemnity shall be made by the claiming Party by the giving of written notice thereof to the other Party. Such written notice shall set forth in reasonable detail the basis upon which such claim for indemnity is made.

(b) In the event that any person or entity not a Party hereto (including the Receiver and the Corporation) shall make any demand or claim or file or threaten to file any lawsuit, which demand, claim or lawsuit could result in any Loss to a Party hereto of the kind for which such Party is entitled to indemnification pursuant to Section 4.1 or Section 4.2 of this Agreement, such indemnified Party shall notify the indemnifying Party of such demand, claim or lawsuit in writing within fifteen (15) days of such demand, claim, filing or threat specifying in reasonable detail the source of the Loss or potential Loss; provided, however, that any failure by the indemnified Party to so notify the indemnifying Party shall not relieve the indemnifying Party from its obligations hereunder, except to the extent that the indemnifying Party is actually and materially prejudiced by such failure to be given such notice. Following receipt of notice of a demand, claim or lawsuit, the indemnifying Party shall have the option, at its cost and expense, to assume the defense of such matter and to retain counsel (not reasonably objected to by the indemnified Party) to defend any such demand, claim or lawsuit, and the indemnifying Party shall not be liable to the indemnified Party for any fees of other counsel or any other expenses (except as expressly provided to the contrary herein) with respect to the defense of such claim or litigation, other than reasonable fees and expenses of counsel employed by the indemnified Party for any period during which the indemnifying Party has not assumed the defense thereof. If the indemnifying Party elects to defend, compromise or settle such demand, claim or lawsuit, the indemnified Party shall cooperate in the defense against, or compromise or settlement of, such demand, claim or lawsuit, including making available to the indemnifying Party any personnel or any books, records or other documents within its control that are reasonably necessary or appropriate for such defense. The indemnified Party shall have the option of participating in (but not controlling) the

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defense of such demand, claim or lawsuit with counsel reasonably acceptable to the indemnifying Party (which shall be at the cost and expense of the indemnified Party unless (1) counsel to the indemnified Party reasonably determines, based on the advice of counsel, that joint representation would be inappropriate due to a conflict of interest or the availability of material defenses not available to the indemnifying Party or (2) the indemnifying Party fails to assume the defense of such demand, claim or lawsuit within a reasonable period of time following written notice thereof), and counsel for each Party shall, to the extent consistent with its professional responsibilities, cooperate with the other Party and any counsel designated by that Party. In effecting the settlement of any such demand, claim or lawsuit, the indemnifying Party or the indemnified Party, as the case may be, shall act in good faith and shall enter into only such settlement as the other Party shall consent to, such consent not to be unreasonably withheld, conditioned or delayed; provided, however, that an indemnifying Party may enter into a settlement without the consent of an indemnified Party so long as such settlement contains an unconditional release of such indemnified Party from all liabilities arising out of such demand, claim or lawsuit and does not include any admission of fault by the indemnified Party. An indemnifying Party shall not be liable for any settlement not made in accordance with the preceding sentence. Notwithstanding anything contained herein to the contrary, if the indemnifying Party disputes its potential liability to the indemnified Party under Section 4.3 of this Agreement and if such dispute is resolved in favor of the indemnifying Party, then the indemnified Party shall not be required to bear the costs and expenses of the indemnified Party’s defense pursuant to Section 4.3 of this Agreement.

Section 4.4. Treatment of Indemnification Payments. Seller and Purchaser agree to treat any indemnification payment under this Article IV as an adjustment of the consideration paid for the Transferred Assets for income Tax purposes.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller hereby represents and warrants to Purchaser that:

Section 5.1. Corporate Organization. Seller is a Puerto Rico-chartered commercial bank duly organized, validly existing and in good standing under the laws of the Commonwealth of Puerto Rico. Seller has the corporate power to execute and deliver this Agreement and related documents and to effect the transactions contemplated herein.

Section 5.2. No Violation. Assuming receipt of the regulatory approvals referenced in Section 7.1 of this Agreement and any third-party consents required, neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated herein, will violate or conflict with (a) Seller’s charter or bylaws; (b) any provision or any agreement or any other material restriction of any kind which Seller is a party or by which Seller is bound; or (c) any statute, law, decree, regulation or order of any governmental authority, in the case of either of clauses (b) or (c) as would materially impair or delay the consummation of the transactions contemplated herein.

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Section 5.3. Corporate Authority. The execution and delivery of this Agreement, and the consummation of the transactions contemplated herein, have been duly authorized by Seller, and no further corporate authorization is necessary for Seller to consummate the transactions contemplated hereunder. Seller satisfies the purchaser eligibility criteria provided by the FDIC and has submitted the required purchaser eligibility certification.

Section 5.4. Enforceable Agreement. This Agreement has been duly authorized, executed and delivered by Seller and, upon execution and delivery by Purchaser, will be the legal, valid, and binding agreement of Seller, enforceable against Seller in accordance with its terms.

Section 5.5. No Brokers. In the negotiation of this Agreement, there has been no participation or intervention by any person, firm or corporation engaged by Seller that would give rise to any claim against Purchaser for a finder’s fee, commission, or similar payment.

Section 5.6. Regulatory Matters.

(a) Seller is, and on a pro forma basis giving effect to the transactions contemplated by the Primary P&A Agreement, will be, (1) “well capitalized,” as such term is defined in the FDIC’s prompt corrective action regulations and (2) in compliance with all capital requirements, standards and ratios required by each state, commonwealth or federal bank regulator with jurisdiction over Seller, and no such regulator is likely to, or has indicated that it may, condition any of the necessary regulatory approvals of the transactions provided in the Primary P&A Agreement upon an increase in Seller’s capital or compliance with any capital requirement, standard or ratio.

(b) Seller was rated “Satisfactory” or “Outstanding” following its most recent Community Reinvestment Act examination by the regulatory agency responsible for its supervision.

(c) The required regulatory approvals Seller needs to consummate the transactions contemplated by the Primary P&A Agreement is the approval of the Board of Governors of the Federal Reserve System and the Office of the Commissioner of Financial Institutions of Puerto Rico. Seller knows of no reason why it will not receive all necessary regulatory approvals on an expedited basis to allow the Closing to occur on the Bank Closing Date. Seller agrees to promptly inform Purchaser after it knows of any reason that the necessary regulatory approvals will not be received on an expedited basis.

Section 5.7. No Liens. There are, and will be at Closing, no Lien on the Transferred Assets created by virtue of Seller’s acquiring the Transferred Assets.

Section 5.8. Limitation of Representations and Warranties. Except as may be expressly represented or warranted by Seller in this Agreement or in any document or instrument executed or delivered by Seller in connection with this Agreement, Seller makes no representations or warranties whatsoever. Specifically, Seller makes no representations or warranties whatsoever about the Transferred Assets, Assumed Liabilities or Transferred Branches or about its ability to exercise any right under the Primary P&A Agreement on behalf of Purchaser.

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ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser hereby represents and warrants to Seller as follows:

Section 6.1. Corporate Organization. Purchaser is a Puerto Rico-chartered commercial bank duly organized, validly existing and in good standing under the laws of the Commonwealth of Puerto Rico. Purchaser has the corporate power and authority to own the properties being acquired, to assume the liabilities being transferred, to execute and deliver this Agreement and related documents and to effect the transactions contemplated herein.

Section 6.2. No Violation. Assuming receipt of the regulatory approvals referenced in Section 7.1 of this Agreement, neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated herein, will violate or conflict with (a) the charter or bylaws of Purchaser; (b) any provision of any agreement or any other material restriction of any kind to which Purchaser is a party or by which Purchaser is bound; or (c) any statute, law, decree, regulation or order of any governmental authority, in each of the cases of clause (b) or (c), as would materially impair or delay the consummation of the transactions contemplated hereby.

Section 6.3. Corporate Authority. The execution and delivery of this Agreement, and the consummation of the transactions contemplated herein, prior to the Effective Time will have been duly authorized by Purchaser, and no further corporate authorization on the part of Purchaser is necessary to consummate the transactions contemplated hereunder. Purchaser satisfies the purchaser eligibility criteria provided by the FDIC and has submitted the required purchaser eligibility certification.

Section 6.4. Enforceable Agreement. This Agreement has been duly authorized, executed and delivered by Purchaser and, upon execution and delivery by Seller, will be the legal, valid and binding agreement of Purchaser enforceable against Purchaser in accordance with its terms.

Section 6.5. No Brokers. In the negotiation of this Agreement, there has been no participation or intervention by any person, firm or corporation engaged by Purchaser that would give rise to any claim against Seller for a finder’s fee, commission, or similar payment.

Section 6.6. Regulatory Matters.

(a) Purchaser is, and on a pro forma basis giving effect to the transactions contemplated by this Agreement, will be, (1) “well capitalized,” as such term is defined in the FDIC’s prompt corrective action regulations and (2) in compliance with all capital requirements, standards and ratios required by each state, commonwealth or federal bank regulator with jurisdiction over Purchaser, and no such regulator is likely to, or has indicated that it may, condition any of the necessary regulatory approvals of the transactions provided in this Agreement upon an increase in Purchaser’s capital or compliance with any capital requirement, standard or ratio.

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(b) Purchaser was rated “Satisfactory” or “Outstanding” following its most recent Community Reinvestment Act examination by the regulatory agency responsible for its supervision.

(c) The required regulatory approvals Purchaser needs to consummate the transactions contemplated hereby is the approval of the FDIC and the Office of the Commissioner of Financial Institutions of Puerto Rico. Purchaser knows of no reason why it will not receive all necessary regulatory approvals on an expedited basis to allow the Closing to occur on the Bank Closing Date. Purchaser agrees to promptly inform Seller after it knows of any reason that the necessary regulatory approvals will not be received on an expedited basis.

Section 6.7. Acknowledgement. Purchaser has read the form of Primary P&A Agreement provided by the FDIC and understand the obligations related to the Transferred Assets, Assumed Liabilities and Transferred Branches. Purchaser understands and acknowledges that Seller is making no representations or warranties about the ability of Seller or Purchaser to exercise (directly or indirectly) any rights contained in the Primary P&A Agreement, including the options in Section 7.6 and the put right in Section 7.9 of this Agreement.

Section 6.8. Limitation of Representations and Warranties. Except as may be expressly represented or warranted by Purchaser in this Agreement or in any document or instrument executed or delivered by Purchaser in connection with this Agreement, Purchaser makes no representations or warranties whatsoever.

ARTICLE VII

RIGHTS AND OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE TIME

Section 7.1. Application for Approval to Effect Purchase of Transferred Assets and Assumption of Assumed Liabilities. The Parties agree that, no later than the first (1st) Business Day after the Bid Acceptance Deadline, each of Purchaser and Seller will file any applications required by law with the appropriate regulatory authorities for approval to effect the transactions contemplated by this Agreement, including approval for Purchaser to purchase the Transferred Assets, assume the Assumed Liabilities and establish the Transferred Branches, in each case, on the Bank Closing Date. From the date hereof, each of Purchaser and Seller agrees to process such applications in a diligent manner, to use its reasonable best efforts to obtain any necessary regulatory approval as promptly as reasonably practicable, and to keep the other Party reasonably informed about the status of any such applications. From and after the date hereof, each of Purchaser and Seller shall promptly notify the other Party upon receipt of notification that any application provided for hereunder has been denied or delayed.

Section 7.2. Public Announcements. Other than mutually agreed upon press releases and other materials issued upon announcement and completion of the transactions contemplated by this Agreement, from and after the date hereof, neither Party shall make any public announcement or public comment, regarding this Agreement or the transactions contemplated herein without first consulting with the other Party and reaching an agreement upon the substance and timing of such announcement or comment, except that nothing contained in this

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Agreement shall prevent either Party, or the holding company of either Party, from making any disclosure required to comply with any applicable securities law and regulations or the rules and regulations of any securities exchange upon which the securities of either Party, or the holding company of either Party, are listed.

Section 7.3. Fees and Expenses. From and after the date hereof, except as otherwise specifically provided herein, the Parties agree that each Party will pay for any fees or expenses it incurs with respect to the transactions contemplated in this Agreement.

Section 7.4. Efforts; Further Assurances. From and after the date hereof, the Parties agree to use their reasonable best efforts to satisfy or cause to be satisfied as soon as practicable their respective obligations hereunder and the conditions precedent to the Closing. From and after the Effective Time, each Party hereto shall execute and deliver such instruments and take such other actions as the other Party may reasonably require in order to carry out the intent of this Agreement.

Section 7.5. Liabilities, Duties and Obligations under the Primary P&A Agreement. From and after the Effective Date, Purchaser agrees to assume, pay, perform and discharge all of Seller’s FDIC Obligations, regardless of whether such liabilities, duties or obligations are specifically listed in this Agreement. In addition, Purchaser agrees to comply with any additional requests made by the Receiver to Seller pursuant to the terms of, or in accordance with, the Primary P&A Agreement with respect to any Transferred Assets, Assumed Liabilities or Transferred Branches.

Section 7.6. Bank Premises and Personal Property.

(a) Owned Bank Premises. Purchaser is electing to exercise the fixed price option to purchase the Owned Bank Premises at the fixed price set forth on the Bid Form on the Bank Closing Date. Purchaser will purchase such Owned Bank Premises directly from the Receiver or, if not possible, from Seller in the manner contemplated in Section 4.6(a)(i) of the Primary P&A Agreement (to the extent such Owned Bank Premises are transferred to Seller pursuant to the Primary P&A Agreement).

(b) Leased Bank Premises. If Purchaser elects to assume any leases relating to the Leased Bank Premises, the Parties agree to attempt to seek arrangements so that Purchaser can assume such leases directly from the Receiver in the manner contemplated in Section 4.6(b) of the Primary P&A Agreement. If such arrangements are not practical, Purchaser may, with the Receiver’s permission, negotiate directly with the landlord of such Leased Bank Premises. The Parties acknowledge and agree that the exercise of the option to assume any leases relating to the Leased Bank Premises must be made prior to the deadline provided in Section 4.6(b) of the Primary P&A Agreement. Seller agrees to promptly provide the Receiver with any notification received from Purchaser hereunder.

(c) Surrender of Bank Premises.

(1) If Purchaser elects not to assume the leases relating to any Leased Bank Premises or elects to assume any lease but is unable to do so, Purchaser agrees to provide written notice to Seller of its intent to surrender such Bank

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Premises, including an intended date of surrender (such date, the “Bank Premises Surrender Date”). The written notice to surrender the Bank Premises must be given at least five (5) Business Days prior to the deadline provided in Section 4.6(d) of the Primary P&A Agreement. Seller agrees to promptly provide the Receiver with any notification received from Purchaser hereunder. After such notice is delivered to Seller, Purchaser cannot exercise the options provided in Section 7.6(a) and Section 7.6(b) of this Agreement.

(2) If Purchaser elects not to assume the leases relating to any Leased Bank Premises or elects to assume any lease but is unable to do so, Purchaser agrees to vacate any Bank Premises it is surrendering no later than one hundred and fifty (150) days after the Bank Closing Date in the manner contemplated in Section 4.6(g) of the Primary P&A Agreement. Purchaser shall be responsible for ensuring all Personal Property located at any surrendered Bank Premise is returned to the Receiver in the same condition as existing on the Bank Closing Date (normal wear and tear excepted). Purchaser agrees to promptly pay directly to the Receiver or, if not possible, to Seller, the “Fair Market Value” (as defined in the Primary P&A Agreement) of any Personal Property which is determined by the Receiver to be missing after the surrender of any Bank Premises.

(3) If Purchaser fails to provide notice of its intention to surrender the Bank Premises as contemplated in Section 7.6(c)(1) of this Agreement or remains in any such Bank Premises more than one hundred and fifty (150) days after the Bank Closing Date (unless Purchaser must do so to comply with Section 7.14 of this Agreement and appropriate arrangements with the Receiver have been made and written evidence of such arrangements has been provided to Seller), Purchaser agrees to assume, pay, perform and discharge any additional liabilities, duties or obligations imposed on Seller at the Receiver’s option as contemplated in Section 4.6(g) of the Primary P&A Agreement.

(d) Occupancy Costs. For each Bank Premise, Purchaser shall pay directly to the Receiver or to other parties directed by the Receiver or, if not possible, to Seller the amounts required to be paid pursuant to Section 4.6(e) of the Primary P&A Agreement, for the time periods provided in the Primary P&A Agreement. In addition, Purchaser agrees to comply with the terms of any lease relating to the Lease Bank Premises, including the timely payment of rent.

(e) Personal Property.

(1) If Purchaser purchases any Owned Bank Premise, accepts an assignment of a lease for any Leased Bank Premise or otherwise obtains the right to occupy any Bank Premise within twelve (12) months of the Bank Closing Date (whether by assignment, sublease, purchase or otherwise), Purchaser shall:

(A) effective as of the Bank Closing Date, purchase directly from the Receiver or, if not possible, from Seller, any Personal Property owned by the Failed Bank and located on such Bank Premise with an appraised value (as determined by the Primary P&A Agreement) of less than $10,000;

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(B) accept an assignment or a sublease of the leases or negotiate new leases for any Personal Property leased by the Failed Bank and located on the Bank Premise; and

(C) if applicable, accept an assignment or sublease of any ground lease or negotiate a new ground lease with respect to any land on which such Bank Premise is located;

provided that the Receiver has not previously disposed of such Personal Property or repudiated the leases referred to in Section 7.6(e)(1)(B) and Section 7.6(e)(1)(C) of this Agreement.

(2) If Purchaser elects not to assume the leases relating to any Leased Bank Premises or elects to assume any lease but is unable to do so, Purchaser may elect to purchase the Personal Property (other than Specialty Assets) located at the surrendered Bank Premises. If Purchaser elects to purchase any such Personal Property, Purchaser will purchase directly from the Receiver or, if not possible, from Seller in the manner contemplated in Section 4.6(h) of the Primary P&A Agreement (to the extent such Personal Property are transferred to Seller pursuant to the Primary P&A Agreement). The Parties acknowledge and agree that the exercise of the option to purchase any Personal Property in accordance with this Section 7.6(e)(2) must be made at the time of the delivery of the notice of surrender set forth in Section 7.6(c) of this Agreement. Seller agrees to promptly provide the Receiver with any notification received from Purchaser hereunder.

(3) Specialty Assets. If Purchaser is required to, or elects to, purchase any Specialty Assets, Purchaser will purchase directly from the Receiver or, if not possible, from Seller any Specialty Assets in the manner contemplated in Section 4.6(j) of the Primary P&A Agreement (to the extent such Specialty Assets are transferred to Seller pursuant to the Primary P&A Agreement). The Parties acknowledge and agree that the exercise of the option to purchase any Specialty Assets (if applicable) must be made prior to the deadline provided in Section 4.6(j) of the Primary P&A Agreement. Seller agrees to promptly provide the Receiver with any notification received from Purchaser hereunder.

(f) Data Removal. If Seller or Purchaser is required to return any automated teller machine under the Primary P&A Agreement, Purchaser will return such automated teller machine directly to the Receiver or, if not possible, to Seller in the manner contemplated in Section 4.6(k) of the Primary P&A Agreement. Prior to returning any automated teller machine to Seller or the Receiver, and unless otherwise requested by Seller or the Receiver, Purchaser shall (1) remove all data from that automated teller machine and (2) provide a written statement to Seller and the Receiver that all data has been removed in a manner that renders it unrecoverable.

(g) Costs; Indemnity. Purchaser will be responsible for any and all costs and expenses of Seller in connection with the transfer of any property under this Section 7.6, including any such costs and expenses for which Purchaser is responsible pursuant to Section 7.25 of this Agreement and the costs of legal counsel used by Seller relating to any such transfer. Purchaser will promptly reimburse Seller for all such costs and expenses upon request.

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Section 7.7. Assignable Contracts. If Purchaser elects to assume any Assignable Contracts, the Parties agree to seek arrangements so that Purchaser can assume any Assignable Contracts directly from the Receiver in the manner contemplated in Section 4.8 of the Primary P&A Agreement. If such arrangements are not practical, Seller will not exercise the option to assume such Assignable Contracts. To the extent Purchaser is using any such Assignable Contracts, it will promptly pay directly to the Receiver or any third parties directed by the Receiver or, if not possible, to Seller all costs under the terms of such Assignable Contracts. The Parties acknowledge and agree that the exercise of the option to assume any Assignable Contracts must be made prior to the deadline provided in Section 4.8(a) of the Primary P&A Agreement. Seller agrees to promptly provide the Receiver with any notification received from Purchaser hereunder. If Purchaser fails to provide timely notification to Seller of its intention to assume the Assignable Contracts, Seller will give notice to the Receiver that it elects not to assume any Assignable Contracts.

Section 7.8. Transferred Loans.

(a) Seller agrees to transfer to Purchaser as of the Effective Time, subject to the terms and conditions of this Agreement, all of Seller’s right, title and interest in (including collateral relating thereto) the Transferred Loans, which shall include any and all escrows of property Taxes and insurance with respect to such Transferred Loans. The Transferred Loans shall be transferred by means of a blanket (collective) assignment; provided, however, that, to the extent required by law, Seller shall provide Purchaser with a power of attorney authorizing Purchaser to execute individual assignments of the Transferred Loans on behalf of Seller, and to the extent necessary, shall use its commercially reasonable efforts to procure for Purchaser an assignment from the Receiver authorizing Purchaser to execute such assignments, or shall, at the request of Purchaser, to the extent practicable, execute assignments for each such Transferred Loan.

(b) In connection with the transfer of any Transferred Loans requiring notice to the borrower, Purchaser shall comply with all notice and reporting requirements of the loan documents or of any law or regulation.

Section 7.9. Put Right with Respect to Certain Loans.

(a) During the thirty (30) day period following the Bank Closing Date (which thirty (30) day period may be extended in writing in the sole and absolute discretion of the Receiver for any Transferred Loan), Purchaser may require that Seller make a request in a form and manner reasonably selected by Purchaser to the Receiver to purchase any Deposit Secured Loans that Purchaser determines are not fully secured by the Transferred Deposits due to either insufficient Transferred Deposit or deposit collateral or deficient documentation regarding such collateral; provided that, (1) Purchaser represents to Seller that Purchaser has not prior to such request taken any of the actions set forth in Section 3.4(a)(iii) of the Primary P&A Agreement, and (2) Purchaser agrees in writing to indemnify the Receiver against any and all claims of any person with respect to such Deposit Secured Loans (including any claims of the Receiver pursuant to Section 3.4(h) of the Primary P&A Agreement).

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(b) Prior to the Settlement Date, not more than once a month, Purchaser may require that Seller make a request in a form and manner reasonable selected by Purchaser to the Receiver to purchase any Transferred Loan that Purchaser can establish is evidenced by forged or stolen instruments as of the Bank Closing Date; provided that, (1) Purchaser represents to Seller that it has not prior to such request taken any of the actions set forth in Section 3.4(a)(iii) of the Primary P&A Agreement and (2) Purchaser agrees in writing to indemnify Seller and Receiver against any and all claims of any person with respect to such Transferred Loan (including any claims of the Receiver pursuant to Section 3.4(b) of the Primary P&A Agreement).

(c) In connection with any attempted put under this Section 7.9:

(1) Prior to Seller making any such request, Purchaser shall provide Seller all information required by the Receiver in such form as provided for in the Primary P&A Agreement;

(2) Purchaser shall deliver directly to the Receiver or, if not possible, to Seller all documents, “Credit Files” (as defined in the Primary P&A Agreement), the information required by Section 9.6(c) of the Primary P&A Agreement and any additional information as the Receiver may request;

(3) Purchaser shall provide the Receiver with full access to all relevant books and records;

(4) Purchaser agrees to enter into any repurchase, indemnity or other agreement requested by the Receiver;

(5) Any repurchases will be at the “Repurchase Price” (as defined in the Primary P&A Agreement) as set forth in the Primary P&A Agreement; and

(6) Prior to any repurchase, Purchaser will administer and manage any Transferred Asset with usual and prudent banking standards and business practices until such repurchase is complete.

(d) Purchaser agrees to repurchase (or to pay Seller the funds necessary to repurchase) any Transferred Asset that the Receiver has the right to reverse the repurchase of in accordance with Section 3.4(g) of the Primary P&A Agreement and agrees to transfer any required purchase price directly to the Receiver or, if not possible, to Seller.

(e) The Parties agree that the only obligation of Seller under this Section 7.9 is to make the request of Purchaser and to cooperate with any purchase that the Receiver agrees to (including passing on any funds if received by Seller). Seller makes no representation or warranty as to whether Receiver will honor this put right for the Transferred Assets.

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Section 7.10. Retention or Repurchase of Assets Essential to Receiver.

(a) Purchaser agrees, at the request of the Receiver set forth in a written notice to Seller or Purchaser, to sell, assign, transfer, convey, and deliver directly to the Receiver or, if not possible, to Seller all of its right, title and interest in and to, any Transferred Asset essential to the Receiver as determined by the Receiver in its discretion in the manner contemplated in Section 3.6 of the Primary P&A Agreement.

(b) Upon the repurchase of any Transferred Assets by the Receiver pursuant to Section 3.6 of the Primary P&A Agreement, Purchaser shall receive the amount contemplated in Section 3.6(b) of the Primary P&A Agreement directly from the Receiver or, if not possible, from Seller, on the date received from the Receiver.

Section 7.11. Agreement with Respect to Public Deposits. Purchaser agrees that with respect to any Transferred Deposits of public money, it shall, promptly after the Effective Time, properly secure such Transferred Deposits with assets of Purchaser sufficient to properly secure such Transferred Deposits, as contemplated in Section 2.1(a) of the Primary P&A Agreement.

Section 7.12. Agreement with Respect to Interest on Non-Transaction Deposits and Early Withdrawal. Purchaser agrees to, from and after the Effective Time, assume the obligations of Seller under Section 2.2 of the Primary P&A Agreement with respect to interest on Transferred Deposits, including but not limited to:

(a) paying an interest rate on any non-transaction Transferred Deposit that is not less than the lowest rate offered by Purchaser or Seller to its depositors for non-transaction deposit liabilities (it being understood that Seller will, upon request, provide information necessary for Purchaser to comply with this covenant); and

(b) permitting each owner of a Transferred Deposit to withdraw all or any portion of such depositor’s Transferred Deposits, without penalty for early withdrawal, as long as such deposits are not pledged as collateral for a loan. If any Transferred Deposit has been pledged to secure an obligation of the depositor or other party, any withdrawal thereof shall be subject to the terms of the agreement governing such pledge.

Section 7.13. Agreement with Respect to Unclaimed Deposits.

(a) Purchaser agrees to, from and after the Effective Time, fully comply with all obligations of Seller with respect to all Transferred Deposits that have not been claimed by the depositor by certain dates (the “Unclaimed Deposits”) contained in Section 2.3 of the Primary P&A Agreement, including but not limited to:

(1) providing to the Receiver (with a copy to Seller) a list of all Unclaimed Deposits no later than the fifteenth (15) month anniversary of the Bank Closing Date;

(2) sending the final notice in the form contained in Exhibit 2.3A of the Primary P&A Agreement to the owners of any Unclaimed Deposits promptly after Seller (provided Seller has provided Purchaser prompt written notice thereof) or Purchaser receives the Receiver’s authorization;

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(3) promptly after mailing the final notice, completing and providing to the Receiver (with a copy to Seller) an affidavit of mailing in the form contained in Exhibit 2.3B of the Primary P&A Agreement; and

(4) within fifteen (15) days of the end of the eighteen (18) month period commencing from the Bank Closing Date, (A) refunding directly to the Receiver or, if not possible, to Seller the full amount of any Unclaimed Deposit (without reduction for service charges), (B) providing directly to the Receiver or, if not possible, to Seller a schedule of all such Unclaimed Deposits in a form satisfactory to the Receiver, and (C) assigning, transferring, conveying and delivering directly to the Receiver or, if not possible, to Seller all right, title and interest of Purchaser in and to any records related to the Unclaimed Deposits.

(b) From and after the Effective Time and continuing until the end of the eighteen (18) month period commencing from the Effective Time, Purchaser hereby agrees to provide directly to the Receiver or, if not possible, to Seller, in response to any request by the Receiver, a schedule of Unclaimed Deposits, in substantially the form requested by the Receiver.

Section 7.14. Continuation of Banking Business.

(a) Full Service Banking. For the period commencing on the first (1st) Business Day after the Bank Closing Date and ending one hundred and eighty (180) days from the Bank Closing Date, Purchaser shall provide full service banking in the “Failed Bank Assessment Area” (as defined in the Primary P&A Agreement). During such one hundred and eighty (180) day period, Purchaser may not close or sell any Transferred Branches without the consent of Seller, who will only consent if Seller or Purchaser has received the prior written consent of the Receiver and provides evidence of the receipt of any other required regulatory approvals.

(b) Safe Deposit Box Business. From and after the Effective Time, Purchaser agrees to assume, perform and discharge, in the usual course of conducting a banking business, the duties and obligations of Seller under the Primary P&A Agreement with respect to all safe deposit boxes, if any, of the Transferred Branches (the “Safe Deposit Box Business”) and to maintain all of the necessary facilities for the use of such boxes by the renters thereof during the period for which such boxes have been rented and the rent therefor paid to the Failed Bank, subject to the provisions of the Safe Deposit Contracts between the Failed Bank and the respective renters of such boxes; provided that Purchaser may relocate the safe deposit boxes of any Transferred Branches to any office of Purchaser located in the Failed Bank Assessment Area in which such safe deposit boxes were located. The safe deposit boxes shall be located and maintained in such Failed Bank Assessment Area for a minimum of one (1) year from the Bank Closing Date.

(c) Safekeeping Business. From and after the Effective Time, Purchaser agrees to accept the Safekeeping Assets, if any, held by the Transferred Branches in safekeeping for its customers as of the Bank Closing Date (the “Safekeeping Business”). Purchaser agrees to assume, perform and discharge all duties and obligations with respect to such Safekeeping Assets held in safekeeping. Purchaser agrees to provide directly to the Receiver or, if not possible, to

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Seller, written verification of all Safekeeping Assets within sixty (60) days after the Bank Closing Date and hold and maintain the Safekeeping Assets in the Failed Bank Assessment Area for a minimum of one (1) year from the Bank Closing Date. Notwithstanding the foregoing, Purchaser may relocate the Safekeeping Assets of any Transferred Branches to any office of Purchaser within the Failed Bank Assessment Area.

Section 7.15. Insurance.

(a) From and after the Effective Time, Purchaser agrees to obtain and maintain insurance coverage acceptable to the Receiver (including public liability, fire, and extended coverage insurance) naming Purchaser as insured and the Receiver as additional insured, effective from and after the Bank Closing Date, with respect to all Bank Premises and Personal Property located on or at those Bank Premises. Purchaser’s obligation to insure and to maintain the Receiver as an additional insured on Bank Premises insurance coverage will cease upon either the Bank Premises Surrender Date or the date Purchaser receives a deed for Owned Bank Premises or assumes the lease for Leased Bank Premises.

(b) From and after the Effective Time, Purchaser agrees to assume, perform and discharge Seller’s FDIC Obligations with respect to insurance as it relates to the Transferred Branches set forth in Section 4.10 of the Primary P&A Agreement, including the obligation to reimburse the Receiver in accordance with Section 4.10(b) of the Primary P&A Agreement.

Section 7.16. Office Space for Receiver and Corporation. For the period commencing on the day following the Bank Closing Date and ending on the one hundred fiftieth (150th) day following the Bank Closing Date (subject to the Receiver’s right to an extension as provided in Section 4.11(b) of the Primary P&A Agreement), Purchaser agrees to provide the Receiver to the extent it is requested by the Receiver of Purchaser as an Alliance Bidder, without charge, adequate and suitable “FDIC Office Space” (as defined in the Primary P&A Agreement) at the Bank Premises occupied by Purchaser, to promptly reimburse the Receiver for any relocation costs and to pay any occupancy related invoices, in each case, to the extent provided in Section 4.11 of the Primary P&A Agreement (either directly or, if not possible, through Seller).

Section 7.17. Employee Matters.

(a) Transferred Branch Employees. Within fifteen (15) days after the Bank Closing Date, Purchaser shall make a final determination as to whether it desires to retain any of the employees of the Transferred Branches (such employees, collectively, the “Transferred Branch Employees”) and in conjunction with such final determination, Purchaser shall (1) make an offer to each Transferred Branch Employee that it desires to retain (collectively, the “Retained Employees”) and (2) provide Seller with written notice of each Transferred Branch Employee that it has determined not to retain (it being understood that Seller will promptly pass on the final determination made by Purchaser to the Receiver). Purchaser agrees to be responsible for all salaries and other compensation, the cost of providing employee benefits, other payroll costs and any costs incurred by Seller pursuant to Section 4.12(c) of the Primary P&A Agreement, in each case, for each Transferred Branch Employee from the Bank Closing Date until Purchaser either hires such Transferred Branch Employee who is a Retained Employee or provides Seller written notice that it will not retain such Transferred Branch Employee. For the avoidance of doubt, a

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Retained Employee who rejects Purchaser’s offer of employment shall cease to be a Retained Employee as of the date of such rejection and shall be deemed to be a Transferred Branch Employee that Purchaser has determined not to retain. Purchaser hereby agrees to offer to the Retained Employees employee benefits that are substantially comparable in the aggregate to those employee benefits that Purchaser offers to its similarly situated employees. In the event the Receiver utilizes the services of any Transferred Branch Employee, the Parties hereby agree to seek arrangements so that the Receiver can reimburse Purchaser directly (or if not possible, Seller hereby agrees to pass on all such reimbursement from the Receiver to Purchaser).

(b) Continuation Coverage. From and after the Effective Time, Purchaser agrees to assist the Receiver in offering Transferred Branch Employees or former employees of the Transferred Branches (if any), who, prior to the Bank Closing Date, were “Eligible Individuals” (as defined in the Primary P&A Agreement), the opportunity to obtain health insurance coverage in the Corporation’s Federal Insurance Administration Continuation Coverage Plan as provided in Section 4.12(a) of the Primary P&A Agreement. Purchaser agrees to provide the Receiver with the written notice required by Section 4.12(a) of the Primary P&A Agreement not later than five (5) Business Days after the Bank Closing Date (with a copy of such notice delivered to Seller).

(c) Qualified Beneficiaries; Expenses. From and after the Effective Time, Purchaser agrees to assist the Receiver in offering the Eligible Individuals who are “Qualified Beneficiaries” (as defined in the Primary P&A Agreement) of the Transferred Branches the opportunity to obtain health insurance coverage in the Corporation’s Federal Insurance Administration Continuation Coverage Plan as provided in Section 4.12(b) of the Primary P&A Agreement. Purchaser hereby agrees to bear all expenses incurred and paid by Seller (A) in connection with the FDIC Obligations with respect to the Transferred Branches and (B) in providing health insurance continuation coverage to any Eligible Individuals of the Transferred Branches who are Retained Employees and such Retained Employees’ Qualified Beneficiaries.

Section 7.18. Duties with Respect to Depositors of Transferred Branches.

(a) Payment of Checks, Drafts, Orders and Transferred Deposits. From and after the Effective Time, subject to Section 7.21 of this Agreement, Purchaser agrees to pay all properly drawn checks, drafts, withdrawal orders and deposits of holders of Transferred Deposits presented for payment, whether drawn on the check or draft forms provided by the Failed Bank or Purchaser, to the extent that the deposit balances to the credit of the respective makers or drawers assumed are sufficient to permit the payment thereof, and in all other respects to discharge, in the usual course of conducting a banking business, the duties and obligations of the Failed Bank or Seller with respect to the deposit balances due and owing to the depositors of the Failed Bank assumed by Purchaser under this Agreement.

(b) Certain Agreements Related to Transferred Deposits. From and after the Effective Time, except as may be modified in accordance with Section 2.2 of the Primary P&A Agreement, Purchaser agrees to honor the terms and conditions of any written escrow or loan servicing agreement or other similar agreement related to the Transferred Deposits.

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(c) Notice to Depositors. From and after the Effective Time, Purchaser agrees to timely provide each notice required by Section 5.3 of the Primary P&A Agreement, including the newspaper notice required by Section 5.3(a) of the Primary P&A Agreement; provided that, prior to making any such notices, Purchaser will seek the approval of the Receiver (or its counsel). Purchaser will provide to Seller and the Receiver the affidavits of publication and mailing as required by and in the timeframe provided in Section 5.3(c) of the Primary P&A Agreement.

Section 7.19. Books and Records.

(a) As of the Effective Time, subject to applicable law and Seller’s obligations under the Primary P&A Agreement, Seller shall assign, transfer, convey and deliver to Purchaser all files, documents and records in Seller’s possession to the extent that they solely pertain to the Transferred Assets and Assumed Liabilities, including any account history related to the Transferred Deposits and Transferred Loans and all such files, documents and records maintained on electronic or magnetic media in the electronic database system of Seller that are reasonably accessible on a branch-by-branch basis, and, to the extent permitted by law, including copies of all personnel files relating to the Transferred Branch Employees; provided that Seller may retain any records necessary to provide services under the TSA for the duration of the term of the TSA (such records, and together with other files, documents and records in Seller’s possession to the extent they pertain to both the Transferred Assets and Assumed Liabilities under this Agreement and the “Acquired Assets” and “Liabilities Assumed” (each as defined in the Primary P&A Agreement) under the Primary Agreement, the “Retained Records”) and Seller shall provide Purchaser reasonable access to the Retained Records. Such files, documents and records shall include all materials set forth in Section 6.1 of the Primary P&A Agreements with respect to the Transferred Assets, the Assumed Liabilities and the Transferred Branches that are in Seller’s possession. Purchaser agrees, at Seller’s expense, to return to Seller all files, documents and records located in any Transferred Branches to the extent that they do not relate to the Transferred Assets or the Assumed Liabilities and Purchaser agrees not to make any use of such records or documents and to keep such records and documents confidential in accordance with Section 11.5 of this Agreement.

(b) From and after the Effective Time, subject to Seller’s obligations under the Primary P&A Agreement, as to any file, document, or record, as of the time of transfer and until any return thereof to Seller, Purchaser shall become responsible for maintaining such file, document or record transferred to it pursuant hereto. Purchaser will preserve and hold such files, documents and records in safekeeping as required by applicable law and in accordance with Purchaser’s customary practices.

(c) From and after the Effective Time, Purchaser will permit Seller and its representatives, at reasonable times and upon reasonable notice, at Seller’s sole cost and expense, except as set forth in Section 7.19(d) of this Agreement, to examine, inspect, copy and reproduce any such files, documents or records, to the extent reasonably required in connection with any third party claim, action, litigation or other proceeding involving Seller or its affiliates or in connection with any legal obligation owed by Seller or its affiliates to any present or former depositor or obligor or other customer or any governmental authority, including for purposes of preparing regulatory reports and Tax Returns. “Tax Returns” means, collectively, any return,

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declaration, report, claim for refund, or information return, statement or other filing relating to Taxes and declaration of estimated Tax, including any schedule or attachment thereto, and including any amendment thereof.

(d) From and after the Effective Time, except to the extent such records were required to be transferred pursuant to Section 7.19(a) of this Agreement and were not so transferred (in which case the records shall be provided at no cost), the Party providing copies of records may charge its customary rate for research and for the cost of providing such copies, including its personnel costs.

(e) From and after the Effective Time, Purchaser agrees to assume Seller’s FDIC Obligations with respect to compliance with Sections 6.3 and 6.4 of the Primary P&A Agreement with respect to any books and records transferred to the Purchaser pursuant to this Section 7.19. Purchaser will retain all records (1) transferred hereunder and (2) generated after the Effective Time with respect to the Transferred Assets, the Assumed Liabilities and the Transferred Branches, in each case, for at least the period during which Seller is required to retain such records under Section 6.3 of the Primary P&A Agreement and will permit the Receiver access to such records to the extent provided in Section 6.4 of the Primary P&A Agreement. Purchaser acknowledges and agrees that Seller’s obligations hereunder are subject in all respects to Seller’s FDIC Obligations under Article VI of the Primary P&A Agreement.

Section 7.20. Payment of Transferred Deposits. From and after the Effective Time, in the event any depositor does not accept the obligation of Purchaser to pay any deposit liability of the Failed Bank assumed by Purchaser pursuant to this Agreement and asserts a claim against the Receiver or Seller for all or any portion of any such liability, Purchaser agrees on demand to provide directly to the Receiver or, if not possible, to Seller funds sufficient to pay such claim in an amount not in excess of the liability reflected on the books of Purchaser at the time such claim is made. Upon payment by Purchaser to Seller or the Receiver or Seller of such amount, Purchaser will be discharged from any further obligation under this Agreement to pay to any such depositor the amount of such Transferred Deposit liability paid to Seller or the Receiver.

Section 7.21. Withheld Payments of Transferred Deposits. From and after the Effective Time, at any time, if Seller receives direction from the Receiver to withhold payment of all or any portion of any Transferred Deposit pursuant to Section 9.5 of the Primary P&A Agreement, upon notice from Seller, Purchaser agrees to hold such deposit and not to make any payment of such deposit balance to or on behalf of the depositor, or to itself, whether by way of transfer, set-off or otherwise. Purchaser agrees to maintain the “withheld payment” status of any such deposit balance, return all or any portion of such deposit balance directly to the Receiver or the Corporation, as appropriate, or, if not possible, to Seller, or reimburse directly to the Corporation or the Receiver, as the case may be, or, if not possible, to Seller in the manner contemplated in Section 9.5 of the Primary P&A Agreement.

Section 7.22. Proceedings with Respect to Certain Transferred Assets and Assumed Liabilities.

(a) From and after the Effective Time, in connection with any investigation, proceeding or other matter with respect to any asset or liability of the Failed Bank retained by the

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Receiver, or any asset of the Failed Bank repurchased by the Receiver pursuant to the Primary P&A Agreement, Purchaser agrees to cooperate to the extent reasonably required by the Receiver, at its own expense.

(b) From and after the Effective Time, in addition to its obligations under Section 7.19 of this Agreement, Purchaser agrees to provide representatives of the Receiver access in the manner contemplated in Section 9.6(b) of the Primary P&A Agreement.

Section 7.23. Information. From and after the Effective Time, Purchaser agrees to promptly provide to the Corporation such other information, including financial statements and computations, relating to the performance of the provisions of the Primary P&A Agreement with respect to the Transferred Assets, the Assumed Liabilities and the Transferred Branches, as the Corporation or the Receiver may request from time to time (including requests by Seller), and, at the request of the Receiver, make available employees of the Failed Bank employed or retained by Purchaser to assist in preparation of the Pro Forma statement.

Section 7.24. Audit by Receiver or Corporation. From and after the Effective Time, Purchaser agrees to cooperate with Seller if and when the Receiver or the Corporation performs an audit to determine Seller’s compliance with the Primary P&A Agreement in the manner contemplated in Section 13.17 of the Primary P&A Agreement and to the extent that such audit is related to any Transferred Assets or Assumed Liabilities herein, at its own expense. Purchaser agrees to make any required adjustments to the Purchase Price resulting from any such audit in a manner to give such adjustments retroactive effect.

Section 7.25. Tax Matters.

(a) Purchaser shall be responsible for all Transfer Taxes that may be imposed on the purchase and sale of the Transferred Assets.

(b) Purchaser shall be responsible for paying all real property Taxes related to the Transferred Assets or Assumed Liabilities allocable to the period from and after the Effective Time. If Tax statements for any Transferred Assets or Assumed Liabilities are sent directly to Seller by a Tax Authority after the date of this Agreement, then Seller shall cause such statements to be forwarded promptly to Purchaser.

(c) Purchaser shall promptly notify Seller in writing upon the receipt of notice of any pending or threatened audits or assessments with respect to Taxes for which Seller may be liable hereunder. Seller shall be entitled to participate at its expense in the defenses of, and, at its option, take control of the complete defense of, any Tax audit or administrative or court proceeding relating to Taxes for which Seller may be liable, and to employ counsel of its choice at its expense; provided that if Purchaser may also be liable under such pending or threatened audits or assessments with respect to Taxes, Purchaser shall be entitled to participate at its expense in the defenses of any such Tax audit or administrative or court proceeding relating to Taxes for which Purchaser may be liable, and to employ counsel of its choice at its expense. Purchaser may not agree to settle any claim for Taxes for which Seller may be liable without prior written consent of Seller.

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(d) Purchaser agrees to, from and after the Effective Time, assume, perform and discharge Seller’s FDIC Obligations with respect to United States Federal and state income tax informational reporting and other items as provided for in Section 4.9 of the Primary P&A Agreement, solely to the extent applicable to Purchaser.

(e) Purchaser shall not at any time, without the Corporation’s prior consent, seek a private letter ruling or other determination from the Internal Revenue Service or otherwise seek to qualify for any special tax treatment or benefits associated with any payments made by the Receiver or Corporation pursuant to the Primary P&A Agreement.

(f) “Tax” or “Taxes” means all taxes payable to any Taxing Authority, domestic or foreign, including net income, gross receipts, alternative minimum, sales, use, ad valorem, net worth, value added, transfer, franchise, employment, withholding, stamp, property or other taxes including all interest and penalties thereon, and additions to tax or additional amounts imposed by any Taxing Authority, domestic or foreign.

(g) “Transfer Taxes” means all sales, use, value added, excise, registration, documentary, stamp, transfer, real property transfer, recording, gains and other similar Taxes and fees (together with any interest, penalties or additions to Tax). The Parties shall cooperate in good faith to minimize such Transfer Taxes to the extent legally permissible.

(h) “Tax Authority” means any foreign, federal, state or local government, political subdivision or governmental or regulatory authority, agency, board, bureau, commission, instrumentality or court or quasi-governmental authority, body, or instrumentality exercising any authority to impose, regulate, or administer the imposition of any Tax.

Section 7.26. Operating Expenses. Purchaser shall also be responsible for all utility payments, telephone charges, rent, salaries, deposit insurance premiums, other ordinary operating expenses of the Transferred Branches and other expenses related to the Assumed Liabilities or Transferred Assets (including, for the avoidance of doubt, any prepaid premiums or assessments related to insurance of the Transferred Deposits by the FDIC) from and after the Effective Time.

Section 7.27. Defense and Settlement of Certain Claims. Purchaser agrees that the Receiver shall have the right, in its discretion, to defend or settle any claim or suit against Seller or Purchaser with respect to any Assumed Liability, which claim or suit may result in a loss to the Receiver arising out of the Primary P&A Agreement, or which existed against the Failed Bank before the Bank Closing Date.

Section 7.28. Wrong Pocket Assets. If any time after the Closing Date, Seller, on the one hand, or Purchaser, on the other hand, shall receive or otherwise possess any asset that should belong to the other Party under this Agreement, Seller and Purchaser agree to promptly transfer such asset to the Party so entitled hereto.

Section 7.29. Release of Liens. As soon as reasonably practical following the Closing Date, Seller will cause to be satisfied and fully released any and all Covered Liens on the Transferred Assets.

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ARTICLE VIII

CONDITIONS TO PURCHASER’S OBLIGATIONS

The obligations of Purchaser to complete the transactions contemplated in this Agreement are conditioned upon fulfillment, on or before the Closing, of each of the following conditions:

Section 8.1. Representations and Warranties. The representations and warranties made by Seller in Article V in this Agreement shall be true in all material respects on and as of the Effective Time as though such representations and warranties were made at and as of such time, except to the extent otherwise provided herein or consented to by Purchaser.

Section 8.2. Obligations Performed. Seller shall have performed and complied in all material respects with all obligations and agreements required by this Agreement to be performed or complied with by it prior to or on the Effective Time.

Section 8.3. Bid Acceptance; Primary P&A Closing. The Alliance Bid shall have been accepted by the FDIC and the closing under the Primary P&A Agreement shall have occurred.

Section 8.4. Regulatory Approval. Purchaser and Seller shall have received all necessary regulatory approvals of the transactions provided in this Agreement, all notice and waiting periods required by law to pass shall have passed, no proceeding to enjoin, restrain, prohibit or invalidate such transactions shall have been instituted or threatened, and any conditions of any regulatory approval shall have been met.

Section 8.5. Orders. No court or governmental authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, judgment, decree, injunction or other order (whether temporary, preliminary or permanent) (any of the foregoing, an “Order”) which is in effect and which prohibits or makes illegal the consummation of the transactions contemplated hereby.

ARTICLE IX

CONDITIONS TO SELLER’S OBLIGATIONS

The obligations of Seller to complete the transactions contemplated in this Agreement are conditioned upon fulfillment, on or before the Closing, of each of the following conditions:

Section 9.1. Representations and Warranties. The representations and warranties made by Purchaser in this Agreement shall be true in all material respects at and as of the Effective Time as though such representations and warranties were made at and as of such time, except to the extent otherwise provided herein or consented to by Seller.

Section 9.2. Obligations Performed. Purchaser shall have performed and complied in all material respects with all obligations and agreements required by this Agreement to be performed or complied with by it prior to or on the Effective Time.

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Section 9.3. Bid Acceptance; Primary P&A Closing. The Alliance Bid shall have been accepted by the FDIC and the closing under the Primary P&A Agreement shall have occurred.

Section 9.4. Regulatory Approval. Purchaser and Seller shall have received all necessary regulatory approvals of the transactions provided in this Agreement, all notice and waiting periods required by law to pass shall have passed, no proceeding to enjoin, restrain, prohibit or invalidate such transactions shall have been instituted or threatened, and any conditions of any regulatory approval shall have been met.

Section 9.5. Orders. No court or governmental authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any Order which is in effect and which prohibits or makes illegal the consummation of the transactions contemplated hereby.

ARTICLE X

TERMINATION

Section 10.1. Automatic Termination. Subject to Section 11.1 of this Agreement, this Agreement will automatically terminate with no further action of the Parties, if (a) prior to the Effective Time, one or more third parties (including a “franchise” winner) enter into a purchase and assumption agreement with the Receiver as the receiver of the Failed Bank and the Federal Deposit Insurance Corporation in its corporate capacity or (b) the Closing does not occur on the Bank Closing Date;

Section 10.2. Other Termination. Subject to Section 11.1 of this Agreement, this Agreement may be terminated prior to the Effective Time:

(a) by the mutual consent in writing of Purchaser and Seller;

(b) by Purchaser or Seller in writing if the other shall have (1) been in breach of any representation and warranty in any respect as would violate the closing condition set forth in Section 8.1 or Section 9.1 of this Agreement, as applicable (as if such representation and warranty had been made on and as of the date hereof and on the date of the notice of breach referred to below) or (2) failed to perform, in any material respect, any covenant or obligation required to be performed prior to the Closing, and the Party seeking to terminate the Agreement is not in breach of any covenant, undertaking or obligation contained herein, and such breach has not been cured by the Bank Closing Date;

(c) by either Purchaser or Seller in writing at any time after any applicable regulatory authority has denied, by final non-appealable order, approval of any application of either Party for approval of the transactions contemplated herein; and

(d) by either Purchaser or Seller, in the event that an Order prohibiting or making illegal the consummation of the transactions contemplated hereby is in effect and has become final and non-appealable.

Section 10.3. Procedure upon Termination. In the event of termination pursuant to Section 10.2 of this Agreement, and except as otherwise specifically stated therein, written notice

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thereof shall be given to the other Party, and this Agreement shall terminate immediately upon receipt of such notice unless an extension is consented to by the Party having the right to terminate. If this Agreement is terminated as provided herein,

(a) each Party will return all documents, work papers and other materials of the other Party, including photocopies or other duplications thereof, relating to this transaction, whether obtained before or after the execution hereof, to the Party furnishing the same; and

(b) all information received by either Party hereto with respect to the business of the other Party (other than information that is a matter of public knowledge or that has heretofore been published in any publication for public distribution or filed as public information with any governmental authority) shall not at any time be used for any business purpose by such Party or disclosed by such Party to third persons, unless required to disclose such information pursuant to order, request or demand of a governmental authority or by judicial or administrative process or by law.

Section 10.4. Payment of Expenses. Should the transactions contemplated herein not be consummated because of a Party’s breach of this Agreement, in addition to such damages as may be recoverable in law or equity, the other Party shall be entitled to recover from the breaching Party, upon demand, itemization and documentation, its reasonable outside legal, accounting, consulting and other out-of-pocket expenses.

ARTICLE XI

MISCELLANEOUS PROVISIONS

Section 11.1. Survival. The Parties’ respective representations and warranties contained in this Agreement shall survive until the expiration of any applicable statute of limitations. The agreements and covenants contained in this Agreement that by their terms contemplate performance after the Effective Time shall survive the Effective Time in accordance with their terms.

Section 11.2. Amendment and Modification. The Parties hereto, by mutual consent of their duly authorized officers, may amend, modify and supplement this Agreement in such manner as may be agreed upon by them in writing.

Section 11.3. Waiver or Extension. Except with respect to required approvals of the applicable governmental authorities, either Party, by written instrument signed by a duly authorized officer, may extend the time for the performance of any of the obligations or other acts of the other Party and may waive (a) any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto or (b) compliance with any of the undertakings, obligations, covenants or other acts contained herein.

Section 11.4. Assignment. This Agreement and all of the provisions hereof shall be binding upon, and shall inure to the benefit of, the Parties hereto and their permitted assigns, but neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by either of the Parties hereto without the prior written consent of the other Party.

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Section 11.5. Confidentiality. Each Party shall hold, and shall cause their respective directors, officers, employees, agents, consultants and advisors to hold, in confidence, unless compelled to disclose by judicial or administrative process or by other requirements of applicable law or the applicable requirements of any regulatory agency or relevant stock exchange, all non-public records, books, contracts, instruments, computer data and other data and information (collectively, “Information”) concerning the other Party (or, if required under a contract with a third party, such third party) furnished to it by such other Party or its representatives in connection with the transactions contemplated by this Agreement (except to the extent that such Information was (i) previously known by such Party on a non-confidential basis, (ii) in the public domain through no fault of such Party or (iii) later lawfully acquired from other sources by the Party to which it was furnished).

Section 11.6. Addresses for Notices, Etc. All notices, requests, demands, consents and other communications provided for hereunder and under the related documents shall be in writing and transmitted by nationally recognized air courier (charges prepaid), telecopied or personally delivered (with receipt thereof acknowledged) to the applicable Party at the address indicated below:

If to Seller:	Banco Popular de Puerto Rico
	209 Muñoz Rivera Avenue
	Hato Rey, Puerto Rico 00918
	Fax Number: 787-756-0277
	Attn: Ignacio Alvarez and Javier D. Ferrer
With a copy to:	Sullivan & Cromwell LLP
	125 Broad Street
	New York, New York 10004
	Fax Number: 212-558-3588
	Attn: Donald J. Toumey and Jared M. Fishman
If to Purchaser:	FirstBank Puerto Rico
	1519 Ponce De Leon Ave
	Santurce, Puerto Rico 00909
	Fax Number: 787-729-8139
	Attn: Lawrence Odell
with a copy to:	Holland & Knight LLP
	701 Brickell Avenue, Suite 3300
	Miami, Florida 33131
	Fax Number: 305-789-7799
	Attn: Alberto M. Hernandez and Roberto R. Pupo

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or, as to each Party, at such other address as shall be designated by such Party by notice to the other Party complying with the terms of this Section 11.6 of this Agreement.

Section 11.7. Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

Section 11.8. Headings; Construction. The headings of the Sections and Articles of this Agreement are inserted for convenience only and shall not constitute a part thereof. References to sections, articles, schedules or exhibits are to the sections, articles, schedules and exhibits contained in, referred to or attached to this Agreement, unless otherwise specified. The Parties and their respective counsel have participated jointly in the negotiation and drafting of this Agreement. In addition, each of the Parties acknowledges that it is sophisticated and has been advised by experienced counsel and, to the extent it deemed necessary, other advisors in connection with the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Any reference to the knowledge of a Party will be deemed to refer to the actual knowledge of such Party. Any reference to any law will be deemed to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word “including” means “including without limitation.” A statement that an action has not occurred in the past means that it is also not presently occurring. When any Party may take any permissive action, including the granting of a consent, the waiver of any provision of this Agreement or otherwise, whether to take such action is in its sole and absolute discretion. The use of the masculine, feminine or neuter gender or the singular or plural form of words will not limit any provisions of this Agreement. A statement that an item is listed, disclosed or described means that it is correctly listed, disclosed or described, and a statement that a copy of an item has been delivered means a true and correct copy of the item has been delivered.

Section 11.9. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Puerto Rico.

Section 11.10. Jurisdiction; Enforcement. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement exclusively in any state court sitting in San Juan, Puerto Rico, or in the event (but only in the event) that such court does not have subject matter jurisdiction over such action or proceeding, in any federal court sitting in San Juan, Puerto Rico. In addition, each of the Parties hereto irrevocably agrees that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other Party hereto or its successors or assigns shall be brought and determined exclusively in any state court sitting in San Juan, Puerto Rico, or in the event (but only in the event) that such court does not have subject matter jurisdiction over such action or proceeding, in any federal court sitting in San Juan, Puerto Rico.

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Section 11.11. Waiver of Jury Trial. THE PARTIES HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE. THE PARTIES HEREBY FURTHER AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

Section 11.12. Entire Agreement. Except for the Alliance Agreement, the TSA and the Primary P&A Agreement, this Agreement and the exhibits and attachments hereto represent the entire agreement between the Parties respecting the transactions contemplated hereby, and all prior or contemporaneous written or oral proposals, agreements in principle, representations, warranties and understandings between the Parties with respect to such matters are superseded hereby and merged herein.

Section 11.13. Severability. If any provision of this Agreement is invalid or unenforceable, the balance of this Agreement shall remain in effect.

Section 11.14. Parties in Interest. Except as set forth in Section 4.1 and Section 4.2 of this Agreement, nothing in this Agreement, express or implied, is intended or shall be construed to confer upon or give to any person (other than the Parties hereto, their successors and permitted assigns) any rights or remedies under or by reason of this Agreement, or any term, provision, condition, undertaking, warranty, representation, indemnity, covenant or agreement contained herein.

[signature page follows]

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed by their duly authorized officers as of the date first written above.

SELLER:
BANCO POPULAR DE PUERTO RICO
By:	/s/ Richard L. Carrión
	Name:	Richard L. Carrión
	Title:	Chairman and Chief Executive Officer
PURCHASER:
FIRSTBANK PUERTO RICO
By:	/s/ Lawrence Odell
	Name:	LAWRENCE ODELL
	Title:	Executive Vice President & General Counsel

[Signature Page to FirstBank Puerto Rico P&A Agreement]

CONFIDENTIAL

Exhibit 1

Transferred Branches

Branch Name	Branch Address	City	State	Zip Code	Owned/Leased
Aguadilla Branch	Plaza Ferran Shopping Center Carr#2 Km. 12.5	Aguadilla	PR	00603	Leased
Rio Hondo Branch	Comerio Ave Plaza Del Parque Shopping Center	Bayamon	PR	00959	Leased
Santa Rosa Branch	Road #2 Santa Rosa Shopping Center	Bayamon	PR	00957	Leased
Las Catalinas Branch	Las Catalinas Mall Carr. PR-53, Intersección PR 156	San Juan	PR	00725	Leased
Isla Verde Branch	Isla Verde Ave Lots 71,73 and 75	Carolina	PR	00979	Owned
Condado Branch	Ashford Ave #1476 Esq De Diego	Guaynabo	PR	00970	Owned
Humacao II Branch	Triumph Plaza Road #3 Km 83.6	Humacao	PR	00792	Leased
Mayaguez Branch	Western Plaza II Road #2 Km 179.5	Mayaguez	PR	00680	Leased
Galerias Paseos Mall Branch	Grand Boulevard Paseos, Suite 107	San Juan	PR	00926	Leased
Vega Baja Branch	Calle Marginal Road # Km 38.0	Vega Baja	PR	00693	Owned

CONFIDENTIAL

Exhibit 1.1(a)(1)(A)

Owned Bank Premises

Branch Name	Branch Address	City	State	Zip Code
Isla Verde Branch	Isla Verde Ave Lots 71,73 and 75	Carolina	PR	00979
Condado Branch	Ashford Ave #1476 Esq De Diego	Guaynabo	PR	00970
Vega Baja Branch	Calle Marginal Road # Km 38.0	Vega Baja	PR	00693

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CONFIDENTIAL

Exhibit 1.1(a)(1)(B)

Leased Bank Premises

Branch Name	Branch Address	City	State	Zip Code
Aguadilla Branch	Plaza Ferran Shopping Center Carr#2 Km. 12.5	Aguadilla	PR	00603
Rio Hondo Branch	Comerio Ave Plaza Del Parque Shopping Center	Bayamon	PR	00959
Santa Rosa Branch	Road #2 Santa Rosa Shopping Center	Bayamon	PR	00957
Humacao II Branch	Triumph Plaza Road #3 Km 83.6	Humacao	PR	00792
Mayaguez Branch	Western Plaza II Road #2 Km 179.5	Mayaguez	PR	00680
Galerias Paseos Mall Branch	Grand Boulevard Paseos Suite 107	San Juan	PR	00926
Las Catalinas Branch	Las Catalinas Mall Carr. PR-53, Intersección PR 156	San Juan	PR	00725

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CONFIDENTIAL

Exhibit 1.1(a)(5)(C)

Final Project 15001 Loan Pools as of 12/31/14¹

(see attached Annex A)

¹  Provided by the FDIC.

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CONFIDENTIAL

Exhibit 1.2(a)(1)

Assumed Deposits Associated with Transferred Branches as of 12/31/142

Branch Name	Branch Address	City	State	Balance
Aguadilla Branch	Plaza Ferran Shopping.Center Carr#2 Km. 12.5	Aguadilla	PR	$	31,787,427
Rio Hondo Branch	Comerio Ave Plaza Del Parque Shopping Center	Bayamon	PR	$	109,087,236
Santa Rosa Branch	Road #2 Santa Rosa Shopping Center	Bayamon	PR	$	47,500,204
Las Catalinas Branch	Las Catalinas Mall Carr. PR-53, Intersección PR 156	San Juan	PR	$	136,299,572
Isla Verde Branch	Isla Verde Ave Lots 71,73 and 75	Carolina	PR	$	33,063,087
Condado Branch	Ashford Ave #1476 Esq De Diego	Guaynabo	PR	$	37,597,093
Humacao II Branch	Triumph Plaza Road #3 Km 83.6	Humacao	PR	$	49,888,494
Mayaguez Branch	Western Plaza II Road #2 Km 179.5	Mayaguez	PR	$	37,710,749
Galerias Paseos Mall Branch	Grand Boulevard Paseos Suite 107	San Juan	PR	$	93,324,179
Vega Baja Branch	Calle Marginal Road # Km 38.0	Vega Baja	PR	$	49,136,958
Total					625,395,000

²  For informational purposes only. Information provided by the FDIC.

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CONFIDENTIAL

Exhibit 2.2(b)(6)

Form of Closing Statement

CLOSING STATEMENT

Cash due to Purchaser for:
Transferred Deposits1					$
Total Cash due to Purchaser					$
Cash due to Seller for:
Real Property and Personal					$
Property
Coins and Currency - Face					$
Amount
Transferred Loans	Book Value2	Percentage			Purchase Price
Overdraft Loans	$		62.40	%	$
Deposit Secured Loans	$		62.40	%	$
SFR Loans	$		91.00	%	$
Premium for Transferred Deposits			1.60	%	$
Seller Transfer Costs					$
Total Cash due to Seller					$
Net cash due to Purchaser					$

¹  At Book Value as defined in the Primary P&A Agreement.

²  As defined in the Primary P&A Agreement.

-6-

ANNEX A

CONFIDENTIAL

As of 12/31/14 PR Asset Pools

		Pool				Current		Number of
Pool Description	Pool #	Totals		Status	Loan Type	Balance		Loans
	Pool 10 is Required
Deposit Secured Consumer Credit Card Overdraft Protection	10		U.S. Loans	Performing	Deposit Secured-US		8,622,533		9
	10		PR Loans	Performing	Deposit Secured		156,040		53
	10		PR Loans	Performing	Consumer		711,913		205
	10		PR Loans	Non-performing	Consumer		97,078		96
	10		PR Loans	Performing	Credit Card		5,157,446		2,362
	10		PR Loans	Non-performing	Credit Card		461,134		139
	10		PR Loans	Performing	OD Protection Loans		6,863,336		2,205
	10		PR Loans	Non-performing	OD Protection Loans		53,949		2
	Total Pool 10	$	22,123,429				22,123,429		5,071
	Pool 20 is Required
PERFORMING SFR	20			Performing	SFR - 1st lien		604,108,767		4,792
	20			Performing	SFR 2nd and 3rd lien		78,804,731		3,131
	Total Pool 20	$	682,913,498				682,913,498		7,923
	30-Optional Pool
PERFORMING SFR OTHER	30			Performing	Condo		320,898,936		2,718
	30			Performing	2 to 4		2,964,306		14
	30			Performing	SFR Other		863,107		4
	Total Pool 30	$	324,726,350				324,726,350		2,736
	40-Optional Pool		(not tied to franchise bid - may be bid stand alone by asset buyer)
PERFORMING SFR MODS	40			Mod	SFR Mods 1st client		202,413,640		2,465
	40			Mod	SFR Mods 2nd client		4,972,211		229
	Total Pool 40	$	207,385,850				207,385,850		2,694
	50-Optional Pool		(not tied to franchise bid - may be bid stand alone by asset buyer)
NON-PERFORMING SFR	50			Non-performing	SFR 1st Lien		69,664,367		605
	50			Non-performing	SFR 2nd and 3rd lien		8,505,866		358
	50			Non-performing	Condo and multi family		30,880,329		310
	50			Non-performing	SFR Mods - 1st lien NPL		91,159,726		1,135
	50			Non-performing	SFR Mods - 2nd and 3rd lien NPL		1,908,686		100
	Total Pool 50	$	202,118,973				202,118,973		2,508
	60-Optional Pool
PERFORMING CRE AND C&I	60			Performing	CRE Multi-family		587,389		4
	60			Performing	CRE Office		2,540,725		9
	60			Performing	CRE Retail/Gas/C-store		2,417,930		20
	60			Performing	CRE Lodging		180,289		2
	60			Performing	CRE Industrial		22,696,251		4
	60			Performing	CRE Other (mixed use)		62,282,412		500
	60			Performing	C&I Secured by SFR		6,219,612		35
	60			Performing	C&I Secured by Other RE		26,173		1
	60			Performing	C&I other		553,691		34
	Total Pool 60	$	97,504,473				97,504,473		609

CONFIDENTIAL

	70-Optional Pool		(not tied to franchise bid - may be bid stand alone by asset buyer)
Recovery SFR	70			Performing	Recovery Residential RE	154,498,223	2,243
	70			Non-performing	Recovery Residential RE	95,592,722	1,339
	Total Pool 70	$	250,090,944			250,090,944	3,582
	80-Optional Pool		(not tied to franchise bid - may be bid stand alone by asset buyer)
GOVERNMENT GUARANTEED	80			Performing	Govt. Guaranteed SFR	42,351,006	416
	80			Performing	Govt. Guaranteed CRE	3,744,773	17
	80			Non-performing	Govt. Guaranteed SFR	6,511,304	96
	80			Non-performing	Govt. Guaranteed CRE	11,468,908	97
	Total Pool 80	$	64,075,991			64,075,991	626
	90-Optional Pool		(not tied to franchise bid - may be bid stand alone by asset buyer)
DORAL RECOVERY and Commercial PERFORMING AND NON-PERFORMING	90			Performing	ADC - Commercial	6,362,815	15
	90			Performing	Land	15,468,734	171
	90			Performing	CRE	57,167,009	252
	90			Performing	C&I	3,020,254	25
	90			Non-performing	Land	67,134,207	103
	90			Non-performing	CRE Multi-family	6,377,344	54
	90			Non-performing	CRE office	8,933,212	39
	90			Non-performing	CRE Retail/Gas/C-store	21,225,541	97
	90			Non-performing	Church	1,948,054	3
	90			Non-performing	CRE Industrial	10,339,697	5
	90			Non-performing	CRE Other (mixed use)	229,384,105	731
	90			Non-performing	C&I SFR/ORE/Unsecured	6,198,233	151
	90			Non-performing	ADC	18,641,120	18
	90
	Total Pool 90	$	452,200,325			452,200,325	1,664
	Total Main PR	$	2,303,139,833

Please note that all pools are tied to the franchise bid except for bids on pools: 40, 50, 70, 80, 90, ORE, The “Doral Money, Inc. Package”, Doral Mortgage, LLC and the MSR’s. (These may be bid by both asset buyers and franchise buyers.)

THESE LOAN POOLS ALREADY EXCLUDE THE LOANS SOLD PRIOR TO 12/31/14 BUT THAT CLOSED IN JANUARY OF 2015.

(Any loans within Doral Money, Inc. and Doral Mortgage, LLC are NOT INCLUDED in these pools)

CONFIDENTIAL

As of 12/31/14 US Asset Pools

		Pool				Current		Number of
Loan Pool Description	Pool #	Totals		Status	Loan Type	Balance		Loans
	100-Optional
SFR	100			Performing	SFR - 1st lien		7,640,736		26
	100			Non-performing	SFR 1st, 2nd lien and other		725,510		4
	100			ORE	SFR		380,127		2
	Total Pool 100	$	8,746,374				8,746,374		30
	200-Optional
ADC and Land	200			Performing	ADC - Residential		27,857,847		3
	200			Performing	ADC - Commercial		370,076,426		96
	200			Performing	Land		11,600,000		2
	Total Pool 200	$	409,534,272				409,534,272		101
	300-Optional
CRE	300			Performing	CRE - Multi		149,484,417		27
	300			Performing	CRE office		15,314,913		4
	300			Performing	CRE Retail/Gas/C-store		1,971,122		1
	300			Performing	CRE Lodging		9,350,000		1
	300			Performing	CRE Industrial		28,704,685		1
	300			Performing	CRE Other		42,515,600		6
	300			ORE	CML		725,000		1
	Total Pool 300	$	248,065,738				248,065,738		41
	400-Optional
CRE Property Lending	400			Performing	CRE Other (mixed use)		319,902,462		40
	Total Pool 400	$	319,902,462
	500-Optional
C&I	500			Performing	C&I Secured Business Assets		7,371,228		2
	500			Performing	C&I Secured by SFR		107,648		1
	500			Performing	C&I Secured by REO		49,238,053		3
	500			Performing	C&I unsecured		—		1
	500			Performing	C&I Other		247,904,026		257
	Total Pool 500	$	304,620,955				304,620,955		264
	Total U.S. Pools	$	1,290,869,800

THESE LOAN POOLS ALREADY EXCLUDE THE LOANS SOLD PRIOR TO 12/31/14 BUT THAT CLOSED IN JANUARY OF 2015.

(Any loans within Doral Money, Inc. and Doral Mortgage, LLC are NOT INCLUDED in these pools)

EX-12

 

		Exhibit 12.1
First BanCorp
Computation of Ratio of Earnings to Fixed Charges
	Quarter Ended
	March 31, 2015
Including Interest on Deposits
Earnings:
Pre-tax income from continuing operations	$	33,678
Plus:
Fixed Charges (excluding capitalized interest)		27,727
Total earnings	$	61,405
Fixed Charges:
Interest expensed and capitalized	$	26,838
An estimate of the interest component within rental expense		889
Total Fixed Charges	$	27,727
Ratio of Earnings to Fixed Charges	2.21
Excluding Interest on Deposits
Earnings:
Pre-tax income from continuing operations	$	33,678
Plus:
Fixed Charges (excluding capitalized interest)		10,033
Total earnings	$	43,711
Fixed Charges:
Interest expensed and capitalized	$	9,144
An estimate of the interest component within rental expense		889
Total Fixed Charges	$	10,033
Ratio of Earnings to Fixed Charges	4.36

EX-12

 

		Exhibit 12.2
First BanCorp
Computation of Ratio of Earnings to Fixed Charges and Preference Dividends
	Quarter Ended
	March 31, 2015
Including Interest on Deposits
Earnings:
Pre-tax income from continuing operations	$	33,678
Plus:
Fixed Charges (excluding capitalized interest)		27,727
Total earnings	$	61,405
Fixed Charges:
Interest expensed and capitalized	$	26,838
An estimate of the interest component within rental expense		889
Total fixed charges before preferred dividends	$	27,727
Preferred dividends		-
Ratio of pre tax income to net income		1.31
Preferred dividend factor		-
Total fixed charges and preferred stock dividends	$	27,727
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends	2.21
Excluding Interest on Deposits
Earnings:
Pre-tax income from continuing operations	$	33,678
Plus:
Fixed Charges (excluding capitalized interest)		10,033
Total earnings	$	43,711
Fixed Charges:
Interest expensed and capitalized	$	9,144
An estimate of the interest component within rental expense		889
Total Fixed Charges before preferred dividends	$	10,033
Preferred dividends		-
Ratio of pre tax income to net income		1.31
Preferred dividend factor		-
Total fixed charges and preferred stock dividends	$	10,033
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends	4.36

EX-31

 

EXHIBIT 31.1

I, Aurelio Alemán, certify that:

1.I have reviewed this Form 10-Q of First BanCorp.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: May 11, 2015	By:	/s/ Aurelio Alemán
		Aurelio Alemán
		President and Chief Executive Officer

EX-31

 

EXHIBIT 31.2

I, Orlando Berges, certify that:

1.I have reviewed this Form 10-Q of First BanCorp.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: May 11, 2015	By:	/s/ Orlando Berges
		Orlando Berges
		Executive Vice President and Chief Financial Officer

EX-32

 

EXHIBIT 32.1

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18,
United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of First BanCorp., a Puerto Rico corporation (the “Company”), does hereby certify, to such officer’s knowledge, that:

     The Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 (the “Form l0-Q”) of the Company fully complies with the requirements of section l3(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 11, 2015	/s/ Aurelio Alemán
	Name: Aurelio Alemán
	Title: President and Chief Executive Officer

EX-32

 

EXHIBIT 32.2

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18,
United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of First BanCorp., a Puerto Rico corporation (the “Company”), does hereby certify, to such officer’s knowledge, that:

     The Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 (the “Form l0-Q”) of the Company fully complies with the requirements of section l3(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 11, 2015	/s/ Orlando Berges
	Name: Orlando Berges
	Title: Executive Vice President and Chief Financial Officer

XML

LOAN PORTFOLIO (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2015

Dec. 31, 2013

Loan Portfolio Held for Investment

		March 31,		December 31,
			2015		2014
(In thousands)
Residential mortgage loans, mainly secured by first mortgages		$	3,331,620	$	3,011,187
Commercial loans:
Construction loans			124,440		123,480
Commercial mortgage loans			1,649,263		1,665,787
Commercial and Industrial loans (1)			2,442,867		2,479,437
Loans to local financial institution collateralized by
Total Commercial loans			4,216,570		4,268,704
Finance leases			230,183		232,126
Consumer loans			1,706,999		1,750,419
Loans held for investment			9,485,372		9,262,436
Allowance for loan and lease losses			(226,064)		(222,395)
Loans held for investment, net		$	9,259,308	$	9,040,041
__________
(1)	As of March 31, 2015 and December 31, 2014, includes $1.1 billion of commercial loans that are secured by real estate but are not dependent upon the real estate for repayment.

Loans Held for Investment on Which Accrual of Interest Income had been Discontinued

Loans held for investment on which accrual of interest income had been discontinued as of the indicated dates were as follows:
(In thousands)		March 31,		December 31,
		2015		2014
Non-performing loans:
Residential mortgage		$	172,583	$	180,707
Commercial mortgage			142,385		148,473
Commercial and Industrial			186,500		122,547
Construction:
Land			14,091		15,030
Construction-residential			13,072		14,324
Consumer:
Auto loans			19,043		22,276
Finance leases			2,979		5,245
Other consumer loans			12,891		15,294
Total non-performing loans held for investment (1)(2)(3)		$	563,544	$	523,896
_______________
(1)	As of March 31, 2015 and December 31, 2014, excludes $54.6 million of non-performing loans held for sale.
(2)	Amount excludes purchased-credit impaired ("PCI") loans with a carrying value of approximately $181.1 million and $102.6 million as of March 31, 2015 and December 31, 2014, respectively, primarily mortgage loans acquired from Doral Bank in the first quarter of 2015 and second quarter of 2014, as further discussed below. These loans are not considered non-performing due to the application of the accretion method, under which these loans will accrete interest income over the remaining life of the loans using an estimated cash flow analysis.
(3)	Non-performing loans exclude $434.2 million and $494.6 million of Troubled Debt Restructuring ("TDR") loans that are in compliance with the modified terms and in accrual status as of March 31, 2015 and December 31, 2014, respectively.

Corporation's Aging of Loans Held for Investment Portfolio

The Corporation’s aging of the loans held for investment portfolio is as follows:
As of March 31, 2015
(In thousands)		30-59 Days Past Due		60-89 Days Past Due		90 days or more Past Due (1)		Total Past Due		Purchased Credit-Impaired Loans		Current		Total loans held for investment		90 days past due and still accruing (2)
Residential mortgage:
FHA/VA and other government-guaranteed
loans (2)(3)(4)		$	-	$	8,200	$	96,086	$	104,286	$	-	$	51,376	$	155,662	$	96,086
Other residential mortgage loans (4)			-		88,209		191,014		279,223		177,601		2,719,134		3,175,958		18,431
Commercial:
Commercial and Industrial loans			22,933		3,193		207,063		233,189		-		2,209,678		2,442,867		20,563
Commercial mortgage loans (4)			-		1,564		165,778		167,342		3,279		1,478,642		1,649,263		23,393
Construction:
Land (4)			-		383		14,291		14,674		-		39,516		54,190		200
Construction-commercial			-		-		-		-		-		27,456		27,456		-
Construction-residential (4)			-		-		13,072		13,072		-		29,722		42,794		-
Consumer:
Auto loans			76,721		18,548		19,043		114,312		-		914,058		1,028,370		-
Finance leases			10,975		2,893		2,979		16,847		-		213,336		230,183		-
Other consumer loans			10,355		5,464		16,339		32,158		234		646,237		678,629		3,448
Total loans held for investment		$	120,984	$	128,454	$	725,665	$	975,103	$	181,114	$	8,329,155	$	9,485,372	$	162,121
_____________
(1)	Includes non-performing loans and accruing loans which are contractually delinquent 90 days or more (i.e., FHA/VA guaranteed loans and credit cards). Credit card loans continue to accrue finance charges fees until charged-off at 180 days.
(2)	It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as past-due loans 90 days and still accruing as opposed to non-performing loans since the principal repayment is insured. These balances include $30.1 million of residential mortgage loans insured by the FHA or guaranteed by the VA, which are over 18 months delinquent, and are no longer accruing interest as of March 31, 2015.
(3)	As of March 31, 2015, includes $26.2 million of defaulted loans collateralizing Government National Mortgage Association ("GNMA") securities for which the Corporation has an unconditional option (but not an obligation) to repurchase the defaulted loans.
(4)	According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage, commercial mortgage, and construction loans are considered past due when the borrower is in arrears two or more monthly payments. FHA/VA government guaranteed loans, other residential mortgage loans, commercial mortgage loans, land loans and construction-residential loans past due 30-59 days as of March 31, 2015 amounted to $12.2 million, $177.4 million, $38.4 million, $6.1 million, and $1.6 million, respectively.

As of December 31, 2014
(In thousands)		30-59 Days Past Due		60-89 Days Past Due		90 days or more Past Due (1)		Total Past Due		Purchased Credit- Impaired Loans		Current		Total loans held for investment		90 days past due and still accruing (2)
Residential mortgage:
FHA/VA and other government-guaranteed
loans (2)(3)(4)		$	-	$	9,733	$	81,055	$	90,788	$	-	$	62,782	$	153,570	$	81,055
Other residential mortgage loans (4)			-		78,336		199,078		277,414		98,494		2,481,709		2,857,617		18,371
Commercial:
Commercial and Industrial loans			22,217		7,445		143,928		173,590		-		2,305,847		2,479,437		21,381
Commercial mortgage loans (4)			-		15,482		171,281		186,763		3,393		1,475,631		1,665,787		22,808
Construction:
Land (4)			-		210		15,264		15,474		-		40,447		55,921		234
Construction-commercial (4)			-		-		-		-		-		24,562		24,562		-
Construction-residential (4)			-		-		14,324		14,324		-		28,673		42,997		-
Consumer:
Auto loans			77,385		19,665		22,276		119,326		-		941,456		1,060,782		-
Finance leases			8,751		2,734		5,245		16,730		-		215,396		232,126		-
Other consumer loans			9,801		6,054		18,671		34,526		717		654,394		689,637		3,377
Total loans held for investment		$	118,154	$	139,659	$	671,122	$	928,935	$	102,604	$	8,230,897	$	9,262,436	$	147,226
____________
(1)	Includes non-performing loans and accruing loans which are contractually delinquent 90 days or more (i.e. FHA/VA guaranteed loans and credit cards). Credit card loans continue to accrue finance charges and fees until charged-off at 180 days.
(2)	It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as past-due loans 90 days and still accruing as opposed to non-performing loans since the principal repayment is insured. These balances include $40.4 million of residential mortgage loans insured by the FHA or guaranteed by the VA, which are over 18 months delinquent, and are no longer accruing interest as of December 31, 2014.
(3)	As of December 31, 2014, includes $9.3 million of defaulted loans collateralizing GNMA securities for which the Corporation has an unconditional option (but not an obligation) to repurchase the defaulted loans.
(4)	According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage, commercial mortgage, and construction loans are considered past due when the borrower is in arrears two or more monthly payments. FHA/VA government guaranteed loans, other residential mortgage loans, commercial mortgage loans, land loans and construction-residential loans past due 30-59 days as of December 31, 2014 amounted to $14.0 million, $189.1 million, $20.8 million, $0.8 million and $1.0 million , respectively.

Corporation's Credit Quality Indicators by Loan

The Corporation’s credit quality indicators by loan type as of March 31, 2015 and December 31, 2014 are summarized below:
		Commercial Credit Exposure-Credit Risk Profile Based on Creditworthiness Category:
		Substandard		Doubtful		Loss		Total Adversely Classified (1)		Total Portfolio
March 31, 2015
(In thousands)
Commercial mortgage		$	227,195	$	-	$	-	$	227,195	$	1,649,263
Construction:
Land			15,930		-		-		15,930		54,190
Construction-commercial			11,790		-		-		11,790		27,456
Construction-residential			12,265		808		-		13,073		42,794
Commercial and Industrial			229,112		6,293		789		236,194		2,442,867
		Commercial Credit Exposure-Credit Risk Profile Based on Creditworthiness Category:
		Substandard		Doubtful		Loss		Total Adversely Classified (1)		Total Portfolio
December 31, 2014
(In thousands)
Commercial mortgage		$	273,027	$	897	$	-	$	273,924	$	1,665,787
Construction:
Land			16,915		-		-		16,915		55,921
Construction-commercial			11,790		-		-		11,790		24,562
Construction-residential			13,548		776		-		14,324		42,997
Commercial and Industrial			234,926		4,884		801		240,611		2,479,437
_________
(1)	Excludes $54.6 million ($7.8 million land, $39.1 million construction-commercial, $0.9 million construction-residential, and $ 6.8 million commercial mortgage) as of March 31, 2015 and December 31, 2014, of non-performing loans held for sale.

March 31, 2015		Consumer Credit Exposure-Credit Risk Profile Based on Payment Activity
		Residential Real-Estate				Consumer
		FHA/VA/ Guaranteed (1)		Other residential loans		Auto		Finance Leases		Other Consumer
(In thousands)
Performing		$	155,662	$	2,825,774	$	1,009,327	$	227,204	$	665,504
Purchased Credit-Impaired (2)			-		177,601		-		-		234
Non-performing			-		172,583		19,043		2,979		12,891
Total		$	155,662	$	3,175,958	$	1,028,370	$	230,183	$	678,629
(1)	It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as past due loans 90 days and still accruing as opposed to non-performing loans since the principal repayment is insured. These balances include $30.1 million of residential mortgage loans insured by the FHA or guaranteed by the VA, which are over 18 months delinquent, and are no longer accruing interest as of March 31, 2015.
(2)	PCI loans are excluded from non-performing statistics due to the application of the accretion method, under which these loan will accrete interest income over the remaining life of the loans using estimated cash flow analysis.
December 31, 2014		Consumer Credit Exposure-Credit Risk Profile Based on Payment Activity
			Residential Real-Estate			Consumer
		FHA/VA/ Guaranteed (1)		Other residential loans		Auto		Finance Leases		Other Consumer
(In thousands)
Performing		$	153,570	$	2,578,416	$	1,038,506	$	226,881	$	673,626
Purchased Credit-Impaired (2)			-		98,494		-		-		717
Non-performing			-		180,707		22,276		5,245		15,294
Total		$	153,570	$	2,857,617	$	1,060,782	$	232,126	$	689,637
(1)	It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as past due loans 90 days and still accruing as opposed to non-performing loans since the principal repayment is insured. These balances include $40.4 million of residential mortgage loans insured by the FHA or guaranteed by the VA, which are over 18 months delinquent, and are no longer accruing interest as of December 31, 2014.
(2)	PCI loans are excluded from non-performing statistics due to the application of the accretion method, under which these loan will accrete interest income over the remaining life of the loans using estimated cash flow analysis.

Impaired Loans

The following tables present information about impaired loans, excluding purchased credit-impaired loans, which are reported separately as discussed below:
Impaired Loans
(In thousands)
	Recorded Investment		Unpaid Principal Balance		Related Specific Allowance		Average Recorded Investment		Interest Income Recognized On Accrual Basis		Interest Income Recognized On Cash Basis
As of March 31, 2015
With no related allowance recorded:
FHA/VA-Guaranteed loans	$	-	$	-	$	-	$	-	$	-	$	-
Other residential mortgage loans		62,337		68,263		-		63,040		199		79
Commercial:
Commercial mortgage loans		100,797		120,956		-		101,196		406		425
Commercial and Industrial Loans		32,080		36,975		-		33,802		18		200
Construction:
Land		1,473		4,726		-		1,473		-		-
Construction-commercial		-		-		-		-		-		-
Construction-residential		6,762		9,346		-		6,943		41		-
Consumer:
Auto loans		562		562		-		562		10		-
Finance leases		-		-		-		-		-		-
Other consumer loans		3,229		4,634		-		3,268		10		26
	$	207,240	$	245,462	$	-	$	210,284	$	684	$	730
With an allowance recorded:
FHA/VA-Guaranteed loans	$	-	$	-	$	-	$	-	$	-	$	-
Other residential mortgage loans		367,189		416,579		14,862		368,999		4,224		414
Commercial:
Commercial mortgage loans		123,568		143,090		13,238		124,701		475		279
Commercial and Industrial Loans		194,576		227,417		24,871		196,896		1,950		43
Construction:
Land		9,355		13,181		1,220		9,413		15		9
Construction-commercial		11,790		11,790		1,145		11,790		128		-
Construction-residential		8,213		8,917		1,016		8,202		3		-
Consumer:
Auto loans		16,986		16,986		3,058		17,472		328		-
Finance leases		2,053		2,053		186		2,137		48		-
Other consumer loans		14,011		14,259		2,544		14,266		382		3
	$	747,741	$	854,272	$	62,140	$	753,876	$	7,553	$	748
Total:
FHA/VA-Guaranteed loans	$	-	$	-	$	-	$	-	$	-	$	-
Other residential mortgage loans		429,526		484,842		14,862		432,039		4,423		493
Commercial:
Commercial mortgage loans		224,365		264,046		13,238		225,897		881		704
Commercial and Industrial Loans		226,656		264,392		24,871		230,698		1,968		243
Construction:
Land		10,828		17,907		1,220		10,886		15		9
Construction-commercial		11,790		11,790		1,145		11,790		128		-
Construction-residential		14,975		18,263		1,016		15,145		44		-
Consumer:
Auto loans		17,548		17,548		3,058		18,034		338		-
Finance leases		2,053		2,053		186		2,137		48		-
Other consumer loans		17,240		18,893		2,544		17,534		392		29
	$	954,981	$	1,099,734	$	62,140	$	964,160	$	8,237	$	1,478

Impaired Loans
(In thousands)
	Recorded Investment		Unpaid Principal Balance		Related Specific Allowance		Average Recorded Investment
As of December 31, 2014
With no related allowance recorded:
FHA/VA-Guaranteed loans	$	-	$	-	$	-	$	-
Other residential mortgage loans		74,177		80,522		-		75,711
Commercial:
Commercial mortgage loans		109,271		132,170		-		113,674
Commercial and Industrial Loans		41,131		47,647		-		42,011
Construction:
Land		2,994		6,357		-		3,030
Construction-commercial		-		-		-		-
Construction-residential		7,461		10,100		-		8,123
Consumer:
Auto loans		-		-		-		-
Finance leases		-		-		-		-
Other consumer loans		3,778		5,072		-		3,924
	$	238,812	$	281,868	$	-	$	246,473
With an allowance recorded:
FHA/VA-Guaranteed loans	$	-	$	-	$	-	$	-
Other residential mortgage loans		350,067		396,203		10,854		357,129
Commercial:
Commercial mortgage loans		101,467		116,329		14,289		104,191
Commercial and Industrial Loans		195,240		226,431		21,314		198,930
Construction:
Land		9,120		12,821		794		10,734
Construction-commercial		11,790		11,790		790		11,867
Construction-residential		8,102		8,834		993		8,130
Consumer:
Auto loans		16,991		16,991		2,787		18,504
Finance leases		2,181		2,181		253		2,367
Other consumer loans		11,637		12,136		3,131		12,291
	$	706,595	$	803,716	$	55,205	$	724,143
Total:
FHA/VA-Guaranteed loans	$	-	$	-	$	-	$	-
Other residential mortgage loans		424,244		476,725		10,854		432,840
Commercial:
Commercial mortgage loans		210,738		248,499		14,289		217,865
Commercial and Industrial Loans		236,371		274,078		21,314		240,941
Construction:
Land		12,114		19,178		794		13,764
Construction-commercial		11,790		11,790		790		11,867
Construction-residential		15,563		18,934		993		16,253
Consumer:
Auto loans		16,991		16,991		2,787		18,504
Finance leases		2,181		2,181		253		2,367
Other consumer loans		15,415		17,208		3,131		16,215
	$	945,407	$	1,085,584	$	55,205	$	970,616
Interest income of approximately $7.6 million ($5.9 million accrual basis and $1.7 million cash basis) was recognized on impaired loans for the first quarter of 2014.

Activity for Impaired loans

The following table shows the activity for impaired loans and the related specific reserve during the first quarter of 2015 and 2014:
	Quarter ended
	March 31, 2015		March 31, 2014
Impaired Loans:	(In thousands)
Balance at beginning of period	$	945,407	$	919,112
Loans determined impaired during the period		62,933		54,277
Charge-offs		(11,715)		(32,039)
Loans sold, net of charge-offs		(1,137)		-
Increases to impaired loans- additional disbursements		519		625
Foreclosures		(9,952)		(4,006)
Loans no longer considered impaired		(9,898)		(3,728)
Paid in full or partial payments		(21,176)		(54,853)
Balance at end of period	$	954,981	$	879,388

Activity for Specific Reserve

	Quarter ended
	March 31, 2015		March 31, 2014
Specific Reserve:	(In thousands)
Balance at beginning of period	$	55,205	$	102,601
Provision for loan losses		18,650		14,454
Charge-offs		(11,715)		(32,039)
Balance at end of period	$	62,140	$	85,016

Contractually Required Principal and Interest Cash Flows Expected to be Collected and Fair Value at Acquisition Related to Loans Acquired

The following table presents acquired loans from Doral Bank in the first quarter of 2015 accounted for pursuant to ASC 310-30 as of the acquisition date:
		(In thousands)
Contractually- required principal and interest		$	166,947
Less: Nonaccretable difference			(48,739)
Cash flows expected to be collected			118,208
Less: Accretable yield			(38,319)
Fair value of loans acquired in 2015 (1)		$	79,889
(1)	Amounts are preliminary estimates based on the best information available at the acquisition date and adjustments in future quarters may occur up to one year from the date of acquisition.

Carrying Value of Acquired Loans

The carrying amount of PCI loans follows:
		March 31,		December 31,
		2015		2014
	(In thousands)
Residential mortgage loans	$	177,601	$	98,494
Commercial mortgage loans		3,279		3,393
Credit Cards		234		717
	$	181,114	$	102,604

Accretable Yield

Changes in the accretable yield of PCI loans for the quarters ended March 31, 2015 and 2014 were as follows:
	March 31, 2015		March 31, 2014
	(In thousands)
Balance at beginning of period	$	82,460	$	-
Additions (accretable yield at acquisition
of loans from Doral Bank)		38,319		-
Accretion recognized in earnings		(2,277)		-
Balance at end of period	$	118,502	$	-

Selected Information on TDRs Includes Recorded Investment by Loan Class and Modification Type

Selected information on TDRs that includes the recorded investment by loan class and modification type is summarized in the following tables. This information reflects all TDRs:
		March 31, 2015
(In thousands)		Interest rate below market		Maturity or term extension		Combination of reduction in interest rate and extension of maturity		Forgiveness of principal and/or interest		Other (1)		Total
Troubled Debt Restructurings:
Non- FHA/VA Residential Mortgage loans		$	26,039	$	5,206	$	281,824	$	-	$	41,025	$	354,094
Commercial Mortgage Loans			26,952		12,685		73,956		-		23,187		136,780
Commercial and Industrial Loans			4,431		78,171		30,830		3,057		50,247		166,736
Construction Loans:
Land			-		201		1,680		-		596		2,477
Construction-residential			6,154		378		3,095		-		433		10,060
Consumer Loans - Auto			-		324		10,736		-		6,487		17,547
Finance Leases			-		285		1,768		-		-		2,053
Consumer Loans - Other			37		317		12,774		379		1,869		15,376
Total Troubled Debt Restructurings (2)		$	63,613	$	97,567	$	416,663	$	3,436	$	123,844	$	705,123
(1)	Other concessions granted by the Corporation include deferral of principal and/or interest payments for a period longer than what would be considered insignificant, payment plans under judicial stipulation, or a combination of the concessions listed in the table.
(2)	Excludes TDRs held for sale amounting to $45.7 million as of March 31, 2015.

Selected information on TDRs that includes the recorded investment by loan class and modification type is summarized in the following tables. This information reflects all TDRs:
		December 31, 2014
(In thousands)		Interest rate below market		Maturity or term extension		Combination of reduction in interest rate and extension of maturity		Forgiveness of principal and/or interest		Other (1)		Total
Troubled Debt Restructurings:
Non- FHA/VA Residential Mortgage loans		$	24,850	$	5,859	$	283,317	$	-	$	35,749	$	349,775
Commercial Mortgage Loans			29,881		12,737		72,493		-		12,655		127,766
Commercial and Industrial Loans			7,533		80,642		31,553		3,074		49,124		171,926
Construction Loans:
Land			-		202		1,732		-		536		2,470
Construction-residential			6,154		337		3,112		-		434		10,037
Consumer Loans - Auto			-		380		10,363		-		6,248		16,991
Finance Leases			-		376		1,805		-		-		2,181
Consumer Loans - Other			37		129		10,812		443		1,886		13,307
Total Troubled Debt Restructurings (2)		$	68,455	$	100,662	$	415,187	$	3,517	$	106,632	$	694,453
(1)	Other concessions granted by the Corporation include deferral of principal and/or interest payments for a period longer than what would be considered insignificant, payment plans under judicial stipulation or a combination of the concessions listed in the table.
(2)	Excludes TDRs held for sale amounting to $45.7 million as of December 31, 2014.

Corporation's TDR Activity

The following table presents the Corporation's TDR activity
(In thousands)	Quarter Ended
	March 31, 2015		March 31, 2014
Beginning Balance of TDRs	$	694,453	$	630,258
New TDRs		31,601		19,935
Increases to existing TDRs - additional disbursements		335		27
Charge-offs post modification		(3,781)		(7,982)
Foreclosures		(7,156)		(1,074)
Paid-off, partial payments, and other		(10,329)		(18,844)
Ending balance of TDRs	$	705,123	$	622,320

630,258

Breakdown Between Accrual and Nonaccrual Status of TDRs

The following table provides a breakdown between the accrual and nonaccrual status of TDRs:
(In thousands)		March 31, 2015
		Accrual		Nonaccrual (1)(2)		Total TDRs
Non-FHA/VA Residential Mortgage loans		$	273,890	$	80,204	$	354,094
Commercial Mortgage Loans			75,541		61,239		136,780
Commercial and Industrial Loans			55,394		111,342		166,736
Construction Loans:
Land			779		1,698		2,477
Construction-residential			3,472		6,588		10,060
Consumer Loans - Auto			11,011		6,536		17,547
Finance Leases			1,875		178		2,053
Consumer Loans - Other			12,237		3,139		15,376
Total Troubled Debt Restructurings		$	434,199	$	270,924	$	705,123
(1)	Included in non-accrual loans are $121.9 million in loans that are performing under the terms of a restructuring agreement but are reported in non-accrual status until the restructured loans meet the criteria of sustained payment performance under the revised terms for reinstatement to accrual status and there is no doubt about full collectability.
(2)	Excludes non-accrual TDRs held for sale with a carrying value of $45.7 million as of March 31, 2015.

(In thousands)		December 31, 2014
		Accrual		Nonaccrual (1)(2)		Total TDRs
Non-FHA/VA Residential Mortgage loans		$	266,810	$	82,965	$	349,775
Commercial Mortgage Loans			69,374		58,392		127,766
Commercial and Industrial Loans			131,544		40,382		171,926
Construction Loans:
Land			834		1,636		2,470
Construction-residential			3,448		6,589		10,037
Consumer Loans - Auto			10,558		6,433		16,991
Finance Leases			1,926		255		2,181
Consumer Loans - Other			10,146		3,161		13,307
Total Troubled Debt Restructurings		$	494,640	$	199,813	$	694,453
(1)	Included in non-accrual loans are $52.8 million in loans that are performing under the terms of a restructuring agreement but are reported in non-accrual status until the restructured loans meet the criteria of sustained payment performance under the revised terms for reinstatement to accrual status and there is no doubt about full collectability.
(2)	Excludes non-accrual TDRs held for sale with a carrying value of $45.7 million as of December 31, 2014.

Schedule Of Troubled Debt Restructurings Table [Text Block]

Loans modifications that are considered TDRs and were completed during the first quarter of 2015 and 2014 were as follows:
(Dollars in thousands)	Quarter ended March 31, 2015
	Number of contracts	Pre-modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings:
Non-FHA/VA Residential Mortgage loans	81	$	11,495	$	11,265
Commercial Mortgage Loans	8		12,821		12,931
Commercial and Industrial Loans	1		1,681		1,681
Construction Loans:
Land	1		64		64
Consumer Loans - Auto	146		2,173		2,130
Finance Leases	8		233		184
Consumer Loans - Other	377		3,391		3,346
Total Troubled Debt Restructurings	622	$	31,858	$	31,601

(Dollars in thousands)	Quarter ended March 31, 2014
	Number of contracts	Pre-modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings:
Non-FHA/VA Residential Mortgage loans	47	$	7,709	$	7,711
Commercial Mortgage Loans	3		834		837
Commercial and Industrial Loans	5		7,964		7,630
Construction Loans:
Consumer Loans - Auto	117		1,605		1,605
Finance Leases	10		193		193
Consumer Loans - Other	429		1,959		1,959
Total Troubled Debt Restructurings	611	$	20,264	$	19,935

Loan Modifications Considered Troubled Debt Restructurings Defaulted

Loan modifications considered TDRs that defaulted during the quarters ended March 31, 2015 and March 31, 2014 and had become TDRs during the 12-month period preceding the default date, were as follows:
	Quarter ended March 31,
(Dollars in thousands)	2015			2014
	Number of contracts	Recorded Investment		Number of contracts	Recorded Investment
Non-FHA/VA Residential Mortgage loans	12	$	1,773	14	$	2,552
Commercial and Industrial Loans	4		5,745	-		-
Construction Loans:
Consumer Loans - Auto	2		8	4		39
Consumer Loans - Other	53		229	45		176
Finance Leases	1		15	-		-
Total	72	$	7,770	63	$	2,767

Loan Restructuring and Effect on Allowance for Loan and Lease Losses

(In thousands)	March 31, 2015			March 31, 2014
Principal balance deemed collectible at end of period	$	42,907	$	78,833
Amount charged off	$	-	$	-
(Reductions) charges to the provision for loan losses	$	(24)	$	(15)
Allowance for loan losses at end of period	$	707	$	1,547

Past Due Purchased Credit Impaired Table [Text Block]

	The following tables present PCI loans by past due status as of March 31, 2015 and December 31, 2014:
As of March 31, 2015		30-59 Days		60-89 Days		90 days or more		Total Past Due				Total PCI loans
														Current
		(In thousands)
Residential mortgage loans (1)		$	-	$	13,572	$	15,775	$	29,347	$	148,254	$	177,601
Commercial mortgage loans (1)			-		130		653		783		2,496		3,279
Credit Cards			22		-		22		44		190		234
		$	22	$	13,702	$	16,450	$	30,174	$	150,940	$	181,114
_____________
(1)	According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage and commercial mortgage loans are considered past due when the borrower is in arrears two or more monthly payments. PCI residential mortgage loans and commercial mortgage loans past due 30-59 days as of March 31, 2015 amounted to $32.0 million and $0.3 million, respectively.
As of December 31, 2014		30-59 Days		60-89 Days		90 days or more		Total Past Due				Total PCI loans
														Current
		(In thousands)
Residential mortgage loans (1)		$	-	$	12,571	$	15,176	$	27,747	$	70,747	$	98,494
Commercial mortgage loans (1)			-		356		443		799		2,594		3,393
Credit Cards			47		25		42		114		603		717
		$	47	$	12,952	$	15,661	$	28,660	$	73,944	$	102,604
_____________
(1)	According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage and commercial mortgage loans are considered past due when the borrower is in arrears two or more monthly payments. PCI residential mortgage loans and commercial mortgage loans past due 30-59 days as of December 31, 2014 amounted to $16.6 million and $0.8 million, respectively.

Changes In Carrying Amount Of Purchased Credit Impaired Loans Table [Text Block]

Changes in the carrying amount of loans accounted for pursuant to ASC 310-30 follows:
	Quarter ended
	March 31, 2015
	(In thousands)
Balance at beginning of period	$	102,604
Additions		79,889
Accretion		2,277
Collections		(3,656)
Ending balance	$	181,114

XML

SUPPLEMENTAL CASH FLOW INFORMATION - Supplemental Cash Flow Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash paid for:
Interest on borrowings	$ 24,502	$ 23,359
Income tax	82	113
Non-cash investing and financing activities:
Additions to other real estate owned	12,702	8,176
Additions to auto repossesions	20,464	20,771
Loan securitizations	46,914	50,792
Capitalization of servicing assets	1,073	1,052
Loans held for investment transferred to held for sale	0	0
Fair Value Of Assets Acquired	540,339
Deposits [Member]
Non-cash investing and financing activities:
Liabilities Assumed1	523,517	0
Loans [Member]
Non-cash investing and financing activities:
Fair Value Of Assets Acquired	311,410	0
Property Plant And Equipment [Member]
Non-cash investing and financing activities:
Fair Value Of Assets Acquired	5,450	0
Cash [Member]
Non-cash investing and financing activities:
Fair Value Of Assets Acquired	217,659
Core Deposits [Member]
Non-cash investing and financing activities:
Fair Value Of Assets Acquired	5,820	0
Other Liabilities [Member]
Non-cash investing and financing activities:
Liabilities Assumed1	$ 3,379

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NON-CONSOLIDATED VARIABLE INTEREST ENTITIES AND SERVICING ASSETS - Components of Net Servicing Income (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014
Servicing fees	$ 1,764		$ 1,671
Late charges and prepayment penalties	190		164
Other	89	[1]	358	[1]
Adjustment to servicing assets for loans repurchased	(44)	[2]	(11)	[2]
Servicing income, gross	1,821		1,466
Amortization and impairment of servicing assets	(894)		(1,002)
Servicing income, net	$ 927		$ 464

[1] Mainly consisted of compensatory fees imposed by GSEs and losses related to representations and warranties.

[2] Amount represents the adjustment to fair value related to the repurchase of loans serviced for others.

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REGULATORY MATTERS, COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Mar. 31, 2015

Commitments And Contingencies Disclosure [Abstract]

Schedule Of Compliance With Regulatory Capital Requirements Under Banking Regulations [Text Block]

	The Corporation's and its banking subsidiary's regulatory capital positions as of March 31, 2015 and December 31, 2014 were as follows:
		Regulatory Requirements
		Actual			For Capital Adequacy Purposes			To be Well-Capitalized-Regular Thresholds
		Amount		Ratio	Amount		Ratio	Amount		Ratio
		(Dollars in thousands)
As of March 31, 2015 (Basel III)
Total Capital (to
Risk-Weighted Assets)
First BanCorp.		$	1,828,253	19.20%	$	761,694	8%		N/A	N/A
FirstBank		$	1,798,122	18.89%	$	761,410	8%	$	951,763	10%
Common Equity Tier 1 Capital
(to Risk-Weighted Assets)
First BanCorp.		$	1,537,862	16.15%	$	428,453	4.5%		N/A	N/A
FirstBank		$	1,486,508	15.62%	$	428,293	4.5%	$	618,646	6.5%
Tier I Capital (to
Risk-Weighted Assets)
First BanCorp.		$	1,537,862	16.15%	$	571,271	6%		N/A	N/A
FirstBank		$	1,676,525	17.61%	$	571,058	6%	$	761,410	8%
Leverage ratio
First BanCorp.		$	1,537,862	12.16%	$	505,698	4%		N/A	N/A
FirstBank		$	1,676,525	13.28%	$	505,036	4%	$	631,295	5%
As of December 31, 2014 (Basel I)
Total Capital (to
Risk-Weighted Assets)
First BanCorp.		$	1,748,120	19.70%	$	709,723	8%		N/A	N/A
FirstBank		$	1,717,432	19.37%	$	709,395	8%	$	886,744	10%
Tier I Capital (to
Risk-Weighted Assets)
First BanCorp.		$	1,636,004	18.44%	$	354,861	4%		N/A	N/A
FirstBank		$	1,605,367	18.10%	$	354,698	4%	$	532,046	6%
Leverage ratio
First BanCorp.		$	1,636,004	13.27%	$	493,159	4%		N/A	N/A
FirstBank		$	1,605,367	13.04%	$	492,468	4%	$	615,585	5%

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SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE (Tables)

3 Months Ended

Mar. 31, 2015

Securities Sold Under Agreements to Repurchase

Securities sold under agreements to repurchase (repurchase agreements) consist of the following:
		March, 31		December 31,
		2015		2014
		(Dollars in thousands)
Repurchase agreements, interest ranging from 1.96% to 3.33%
(December 31, 2014: 2.45% to 4.50%) (1)		$	900,000	$	900,000
(1)	As of March 31, 2015, includes $800 million with an average rate of 2.71% that lenders have the right to call before their contractual maturities at various dates beginning on April 9, 2015. Subsequent to April 9, 2015, no lender has exercised its call option on repurchase agreements. In addition, $700 million is tied to variable rates.

Schedule of Repurchase Agreement Maturity

Repurchase agreements mature as follows:
		March 31, 2015
		(In thousands)
	One year to three years	$	500,000
	Over five years		400,000
	Total	$	900,000

Repurchase Agreements Grouped by Counterparty

Repurchase agreements as of March 31, 2015, grouped by counterparty, were as follows:
	(Dollars in thousands)			Weighted-Average
	Counterparty	Amount		Maturity (In Months)
	Citigroup Global Markets	$	300,000	19
	JP Morgan Chase		200,000	82
	Dean Witter / Morgan Stanley		100,000	31
	Credit Suisse First Boston		300,000	60
		$	900,000

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SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE - Schedule of Repurchase Agreement Maturity (Parenthetical) (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015		Dec. 31, 2014
Repurchase Agreement [Line Items]
Securities Sold Under Agreements To Repurchase	$ 900,000	[1]	$ 900,000	[1]

[1] As of March 31, 2015, includes $800 million with an average rate of 2.71% that lenders have the right to call before their contractual maturities at various dates beginning on April 9, 2015. Subsequent to April 9, 2015, no lender has exercised its call option on repurchase agreements. In addition, $700 million is tied to variable rates.

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LOAN PORTFOLIO - Loan Portfolio Held for Investment (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015		Dec. 31, 2014		Mar. 31, 2014
Financial Information [Line Items]
Residential mortgage loans, mainly secured by first mortgages	$ 3,331,620		$ 3,011,187
Commercial loans:
Construction loans	124,440		123,480
Commercial mortgage loans	1,649,263		1,665,787
Commercial and Industrial loans	2,442,867	[1]	2,479,437	[1]
Loans to local financial institutions collateralized by real estate mortgages	0		0
Commercial loans	4,216,570		4,268,704
Finance leases	230,183		232,126
Consumer loans	1,706,999		1,750,419
Loans held for investment	9,485,372		9,262,436		9,566,785
Less: allowance for loan and lease losses	(226,064)		(222,395)
Loans held for investment, net	9,259,308		9,040,041
Commercial And Industrial [Member]
Commercial loans:
Loans held for investment	$ 2,442,867		$ 2,479,437

[1] As of March 31, 2015 and December 31, 2014, includes $1.1 billion of commercial loans that are secured by real estate but are not dependent upon the real estate for repayment.

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ADVANCES FROM THE FEDERAL HOME LOAN BANK (FHLB) - Summary of Advances from FHLB (Parenthetical) (Detail)	Mar. 31, 2015	Dec. 31, 2014
Short Term Debt [Line Items]
Weighted-average interest rate	1.17%	1.17%

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FIRST BANCORP. (Holding Company Only) Financial Information (Tables)

3 Months Ended

Mar. 31, 2015

Statements of Financial Condition

Statements of Financial Condition
	As of March 31,			As of December 31,
	2015		2014
	(In thousands)
Assets
Cash and due from banks	$	29,726	$	30,380
Money market investments		6,111		6,111
Investment securities available for sale, at market:
Other investment securities		285		285
Loans held for investment, net		298		322
Investment in First Bank Puerto Rico, at equity		1,900,671		1,866,090
Investment in First Bank Insurance Agency, at equity		13,356		11,890
Investment in FBP Statutory Trust I		3,093		3,093
Investment in FBP Statutory Trust II		3,866		3,866
Other assets		4,617		4,357
Total assets	$	1,962,023	$	1,926,394
Liabilities and Stockholders' Equity
Liabilities:
Other borrowings	$	231,959	$	231,959
Accounts payable and other liabilities		24,314		22,692
Total liabilities		256,273		254,651
Stockholders' equity		1,705,750		1,671,743
Total liabilities and stockholders' equity	$	1,962,023	$	1,926,394

Statements of Income (Loss)

Statements of Income
	Quarter Ended
	March 31,		March 31,
	2015		2014
	(In thousands)
Income:
Interest income on money market investments	$	5	$	5
Other income		56		53
		61		58
Expense:
Notes payable and other borrowings		1,817		1,760
Other operating expenses		604		506
		2,421		2,266
Loss before income taxes and equity in undistributed
earnings of subsidiaries		(2,360)		(2,208)
Income tax provision		-		(2)
Equity in undistributed earnings of subsidiaries		28,006		19,293
Net income	$	25,646	$	17,083
Other comprehensive income, net of tax		7,140		22,539
Comprehensive income	$	32,786	$	39,622

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LOAN PORTFOLIO - Credit Risk Payment Activity (Parenthetical) (Detail) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014
Financing Receivable Recorded Investment [Line Items]
Residential mortgage loans insured by FHA or guaranteed by the VA	$ 30,100,000	$ 40,400,000
Period of residential mortgage loan that are no longer accruing interest	1 year 6 months 0 days	1 year 6 months 0 days
Loans considered to be defaulted if borrower has failed to make payment for a period or more than the period	0 years 2 months 29 days	0 years 2 months 29 days
Loans held for sale	81,723,000	76,956,000
Non Accrual [Member]
Financing Receivable Recorded Investment [Line Items]
Loans held for sale	54,600,000	54,600,000
Non Accrual [Member] | Commercial Construction [Member]
Financing Receivable Recorded Investment [Line Items]
Loans held for sale	39,100,000	39,100,000
Non Accrual [Member] | Residential Construction [Member]
Financing Receivable Recorded Investment [Line Items]
Loans held for sale	900,000	900,000
Non Accrual [Member] | Land Construction [Member]
Financing Receivable Recorded Investment [Line Items]
Loans held for sale	7,800,000	7,800,000
Non Accrual [Member] | Commercial mortgage [Member]
Financing Receivable Recorded Investment [Line Items]
Loans held for sale		$ 6,800,000	$ 6,800,000

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Summary of Interest Rate Swaps (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Pay fixed/receive floating :
Notional amount	$ 111,058	$ 98,704
Interest Rate Swap [Member]
Pay fixed/receive floating :
Notional amount	$ 5,440	$ 5,440
Derivative Receivable [Member]
Pay fixed/receive floating :
Weighted-average receive rate at period end	2.04%	2.03%
Derivative Payable [Member]
Pay fixed/receive floating :
Weighted-average pay rate at period end	3.45%	3.45%

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NON-CONSOLIDATED VARIABLE INTEREST ENTITIES AND SERVICING ASSETS (Tables)

3 Months Ended

Mar. 31, 2015

Summarized income statement information

The following table shows summarized unaudited income statement information of CPG/GS for the quarters ended March 31, 2015 and 2014:
	Quarter Ended
	March 31,		March 31,
	2015		2014
	(In thousands)
Revenues, including net realized gains on sale of
investments in loans and OREO	$	588	$	751
Gross profit (loss)	$	(8,240)	$	(1,508)
Net loss	$	(7,751)	$	(2,447)

Changes in Servicing Assets

The changes in servicing assets are shown below:
		Quarter ended
		March 31,		March 31,
		2015		2014
			(In thousands)
Balance at beginning of period		$	22,838	$	21,987
Capitalization of servicing assets			1,073		1,052
Amortization			(856)		(783)
Adjustment to fair value			(38)		(219)
Other (1)			(44)		(11)
Balance at end of period		$	22,973	$	22,026
(1)	Amount represents the adjustment to fair value related to the repurchase of loans serviced for others.

Changes in Impairment Allowance

Changes in the impairment allowance were as follows:
	Quarter ended
	March 31,		March 31,
	2015		2014
		(In thousands)
Balance at beginning of period	$	55	$	212
Temporary impairment charges		58		219
Recoveries		(20)		-
Balance at end of period	$	93	$	431

Components of Net Servicing Income

	The components of net servicing income are shown below:
		Quarter ended
		March 31,		March 31,
		2015		2014
			(In thousands)
Servicing fees		$	1,764	$	1,671
Late charges and prepayment penalties			190		164
Adjustment for loans repurchased			(44)		(11)
Other (1)			(89)		(358)
Servicing income, gross			1,821		1,466
Amortization and impairment of servicing assets			(894)		(1,002)
Servicing income, net		$	927	$	464
(1)	Mainly consisted of compensatory fees imposed by GSEs and losses related to representations and warranties.

Weighted-Averages of Key Economic Assumptions in Valuation Model

	(Dollars in thousands)
Carrying amount of servicing assets	$	22,973
Fair value	$	25,195
Weighted-average expected life (in years)		8.47
Constant prepayment rate (weighted-average annual rate)		10.25%
Decrease in fair value due to 10% adverse change	$	948
Decrease in fair value due to 20% adverse change	$	1,838
Discount rate (weighted-average annual rate)		10.62%
Decrease in fair value due to 10% adverse change	$	1,050
Decrease in fair value due to 20% adverse change	$	2,020

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2015

SUBSEQUENT EVENTS

NOTE26 – SUBSEQUENT EVENTS

As discussed in Note 24, FirstBank received notification from the FDIC that the Consent Order under which the Bank had been operating since June 2, 2010 was terminated effective April 29, 2015. Although the Consent Order has been terminated, First BanCorp.is still subject to the Written Agreement that the Corporation entered into with the Federal Reserve Bank of New York on June 3, 2010.

The Corporation has performed an evaluation of events occurring subsequent to March 31, 2015; management has determined that there are no additional events occurring in this period, except as previously disclosed, that required disclosure in or adjustment to the accompanying financialstatements.

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LOAN PORTFOLIO - Impaired loans (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014	Dec. 31, 2013
Financing Receivable Impaired [Line Items]
Recorded Investment with no Related Allowance	$ 207,240		$ 238,812
Unpaid Principal Balance with no Related Allowance	245,462		281,868
Average Recorded Investment No Related Allowance	210,284		246,473
Interest Income with no Related Allowance Accrual Basis	684
Interest Income with No Related Allowance Cash Basis	730
Recorded Investment with Related Allowance	747,741		706,595
Unpaid Principal Balance with Related Allowance	854,272		803,716
Related Allowance	62,140	85,016	55,205	102,601
Average Recorded Investment With Related Allowance	753,876		724,143
Interest Income with Related Allowance Accrual Basis	7,553
Interest Income with Realted Allowance Cash Basis	748
Recorded Investment	954,981	879,388	945,407	919,112
Unpaid Principal Balance	1,099,734		1,085,584
Average Recorded Investments	964,160		970,616
Interest Income on Impaired Loans Accrual Basis	8,237	5,900
Interest Income on Impaired Loans Cash Basis	1,478	1,700
Fhava Guaranteed Loans [Member]
Financing Receivable Impaired [Line Items]
Recorded Investment with no Related Allowance	0		0
Unpaid Principal Balance with no Related Allowance	0		0
Average Recorded Investment No Related Allowance	0		0
Interest Income with no Related Allowance Accrual Basis	0
Interest Income with No Related Allowance Cash Basis	0
Recorded Investment with Related Allowance	0		0
Unpaid Principal Balance with Related Allowance	0		0
Related Allowance	0		0
Average Recorded Investment With Related Allowance	0		0
Interest Income with Related Allowance Accrual Basis	0
Interest Income with Realted Allowance Cash Basis	0
Recorded Investment	0		0
Unpaid Principal Balance	0		0
Average Recorded Investments	0		0
Interest Income on Impaired Loans Accrual Basis	0
Interest Income on Impaired Loans Cash Basis	0
Other Residential Mortgage Loans [Member]
Financing Receivable Impaired [Line Items]
Recorded Investment with no Related Allowance	62,337		74,177
Unpaid Principal Balance with no Related Allowance	68,263		80,522
Average Recorded Investment No Related Allowance	63,040		75,711
Interest Income with no Related Allowance Accrual Basis	199
Interest Income with No Related Allowance Cash Basis	79
Recorded Investment with Related Allowance	367,189		350,067
Unpaid Principal Balance with Related Allowance	416,579		396,203
Related Allowance	14,862		10,854
Average Recorded Investment With Related Allowance	368,999		357,129
Interest Income with Related Allowance Accrual Basis	4,224
Interest Income with Realted Allowance Cash Basis	414
Recorded Investment	429,526		424,244
Unpaid Principal Balance	484,842		476,725
Average Recorded Investments	432,039		432,840
Interest Income on Impaired Loans Accrual Basis	4,423
Interest Income on Impaired Loans Cash Basis	493
Commercial Mortgage Loans [Member]
Financing Receivable Impaired [Line Items]
Recorded Investment with no Related Allowance	100,797		109,271
Unpaid Principal Balance with no Related Allowance	120,956		132,170
Average Recorded Investment No Related Allowance	101,196		113,674
Interest Income with no Related Allowance Accrual Basis	406
Interest Income with No Related Allowance Cash Basis	425
Recorded Investment with Related Allowance	123,568		101,467
Unpaid Principal Balance with Related Allowance	143,090		116,329
Related Allowance	13,238		14,289
Average Recorded Investment With Related Allowance	124,701		104,191
Interest Income with Related Allowance Accrual Basis	475
Interest Income with Realted Allowance Cash Basis	279
Recorded Investment	224,365		210,738
Unpaid Principal Balance	264,046		248,499
Average Recorded Investments	225,897		217,865
Interest Income on Impaired Loans Accrual Basis	881
Interest Income on Impaired Loans Cash Basis	704
Commercial And Industrial Loan [Member]
Financing Receivable Impaired [Line Items]
Recorded Investment with no Related Allowance	32,080		41,131
Unpaid Principal Balance with no Related Allowance	36,975		47,647
Average Recorded Investment No Related Allowance	33,802		42,011
Interest Income with no Related Allowance Accrual Basis	18
Interest Income with No Related Allowance Cash Basis	200
Recorded Investment with Related Allowance	194,576		195,240
Unpaid Principal Balance with Related Allowance	227,417		226,431
Related Allowance	24,871		21,314
Average Recorded Investment With Related Allowance	196,896		198,930
Interest Income with Related Allowance Accrual Basis	1,950
Interest Income with Realted Allowance Cash Basis	43
Recorded Investment	226,656		236,371
Unpaid Principal Balance	264,392		274,078
Average Recorded Investments	230,698		240,941
Interest Income on Impaired Loans Accrual Basis	1,968
Interest Income on Impaired Loans Cash Basis	243
Construction Loans [Member]
Financing Receivable Impaired [Line Items]
Related Allowance	3,381	15,154
Recorded Investment	37,593	58,636
Consumer Auto Loans [Member]
Financing Receivable Impaired [Line Items]
Recorded Investment with no Related Allowance	562		0
Unpaid Principal Balance with no Related Allowance	562		0
Average Recorded Investment No Related Allowance	562		0
Interest Income with no Related Allowance Accrual Basis	10
Interest Income with No Related Allowance Cash Basis	0
Recorded Investment with Related Allowance	16,986		16,991
Unpaid Principal Balance with Related Allowance	16,986		16,991
Related Allowance	3,058		2,787
Average Recorded Investment With Related Allowance	17,472		18,504
Interest Income with Related Allowance Accrual Basis	328
Interest Income with Realted Allowance Cash Basis	0
Recorded Investment	17,548		16,991
Unpaid Principal Balance	17,548		16,991
Average Recorded Investments	18,034		18,504
Interest Income on Impaired Loans Accrual Basis	338
Interest Income on Impaired Loans Cash Basis	0
Finance Leases [Member]
Financing Receivable Impaired [Line Items]
Recorded Investment with no Related Allowance	0		0
Unpaid Principal Balance with no Related Allowance	0		0
Average Recorded Investment No Related Allowance	0		0
Interest Income with no Related Allowance Accrual Basis	0
Interest Income with No Related Allowance Cash Basis	0
Recorded Investment with Related Allowance	2,053		2,181
Unpaid Principal Balance with Related Allowance	2,053		2,181
Related Allowance	186		253
Average Recorded Investment With Related Allowance	2,137		2,367
Interest Income with Related Allowance Accrual Basis	48
Interest Income with Realted Allowance Cash Basis	0
Recorded Investment	2,053		2,181
Unpaid Principal Balance	2,053		2,181
Average Recorded Investments	2,137		2,367
Interest Income on Impaired Loans Accrual Basis	48
Interest Income on Impaired Loans Cash Basis	0
Other Consumer Loans [Member]
Financing Receivable Impaired [Line Items]
Recorded Investment with no Related Allowance	3,229		3,778
Unpaid Principal Balance with no Related Allowance	4,634		5,072
Average Recorded Investment No Related Allowance	3,268		3,924
Interest Income with no Related Allowance Accrual Basis	10
Interest Income with No Related Allowance Cash Basis	26
Recorded Investment with Related Allowance	14,011		11,637
Unpaid Principal Balance with Related Allowance	14,259		12,136
Related Allowance	2,544		3,131
Average Recorded Investment With Related Allowance	14,266		12,291
Interest Income with Related Allowance Accrual Basis	382
Interest Income with Realted Allowance Cash Basis	3
Recorded Investment	17,240		15,415
Unpaid Principal Balance	18,893		17,208
Average Recorded Investments	17,534		16,215
Interest Income on Impaired Loans Accrual Basis	392
Interest Income on Impaired Loans Cash Basis	29
Commercial Construction [Member]
Financing Receivable Impaired [Line Items]
Recorded Investment with no Related Allowance	0		0
Unpaid Principal Balance with no Related Allowance	0		0
Average Recorded Investment No Related Allowance	0		0
Interest Income with no Related Allowance Accrual Basis	0
Interest Income with No Related Allowance Cash Basis	0
Recorded Investment with Related Allowance	11,790		11,790
Unpaid Principal Balance with Related Allowance	11,790		11,790
Related Allowance	1,145		790
Average Recorded Investment With Related Allowance	11,790		11,867
Interest Income with Related Allowance Accrual Basis	128
Interest Income with Realted Allowance Cash Basis	0
Recorded Investment	11,790		11,790
Unpaid Principal Balance	11,790		11,790
Average Recorded Investments	11,790		11,867
Interest Income on Impaired Loans Accrual Basis	128
Interest Income on Impaired Loans Cash Basis	0
Residential Construction [Member]
Financing Receivable Impaired [Line Items]
Recorded Investment with no Related Allowance	6,762		7,461
Unpaid Principal Balance with no Related Allowance	9,346		10,100
Average Recorded Investment No Related Allowance	6,943		8,123
Interest Income with no Related Allowance Accrual Basis	41
Interest Income with No Related Allowance Cash Basis	0
Recorded Investment with Related Allowance	8,213		8,102
Unpaid Principal Balance with Related Allowance	8,917		8,834
Related Allowance	1,016		993
Average Recorded Investment With Related Allowance	8,202		8,130
Interest Income with Related Allowance Accrual Basis	3
Interest Income with Realted Allowance Cash Basis	0
Recorded Investment	14,975		15,563
Unpaid Principal Balance	18,263		18,934
Average Recorded Investments	15,145		16,253
Interest Income on Impaired Loans Accrual Basis	44
Interest Income on Impaired Loans Cash Basis	0
Land Construction [Member]
Financing Receivable Impaired [Line Items]
Recorded Investment with no Related Allowance	1,473		2,994
Unpaid Principal Balance with no Related Allowance	4,726		6,357
Average Recorded Investment No Related Allowance	1,473		3,030
Interest Income with no Related Allowance Accrual Basis	0
Interest Income with No Related Allowance Cash Basis	0
Recorded Investment with Related Allowance	9,355		9,120
Unpaid Principal Balance with Related Allowance	13,181		12,821
Related Allowance	1,220		794
Average Recorded Investment With Related Allowance	9,413		10,734
Interest Income with Related Allowance Accrual Basis	15
Interest Income with Realted Allowance Cash Basis	9
Recorded Investment	10,828		12,114
Unpaid Principal Balance	17,907		19,178
Average Recorded Investments	10,886		13,764
Interest Income on Impaired Loans Accrual Basis	15
Interest Income on Impaired Loans Cash Basis	$ 9

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SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE - Securities Sold Under Agreements to Repurchase (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015		Dec. 31, 2014
Securities Sold Under Agreements To Repurchase And Other Short Term Borrowings [Line Items]
Repurchase agreements, interest ranging from 2.45% to 3.35%(December 31, 2012- 2.45% to 3.39%)	$ 900,000	[1]	$ 900,000	[1]

[1] As of March 31, 2015, includes $800 million with an average rate of 2.71% that lenders have the right to call before their contractual maturities at various dates beginning on April 9, 2015. Subsequent to April 9, 2015, no lender has exercised its call option on repurchase agreements. In addition, $700 million is tied to variable rates.

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OTHER BORROWINGS - Components of Other Borrowings (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Junior subordinated debentures due in 2034	$ 231,959	$ 231,959
Junior Subordinated Debentures Bearing Interest At Floating Rate Of Two Point Seventy Five [Member]
Debt Instrument [Line Items]
Junior subordinated debentures due in 2034	103,093	103,093
Junior Subordinated Debentures Bearing Interest At Floating Rate Of Two Point Fifty Percent [Member]
Debt Instrument [Line Items]
Junior subordinated debentures due in 2034	$ 128,866	$ 128,866

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FAIR VALUE - Additional Information (Detail) (USD $)	Mar. 31, 2015
Debt Instrument [Line Items]
Maximum amount of interest in brokered CD sold by broker	$ 250,000

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LOAN PORTFOLIO - Loans Held for Investment on Which Accrual of Interest Income had been Discontinued (Parenthetical) (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Accounts Notes And Loans Receivable [Line Items]
Loans held for sale	$ 81,723	$ 76,956
Non Accrual [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans held for sale	$ 54,600	$ 54,600

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LOAN PORTFOLIO - Corporation's TDR Activity (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014
Schedule Of Financing Receivables [Line Items]
Beginning Balance of TDRs	$ 694,453	[1]
New TDRs	31,601		19,935
Increases to existing TDRs (disbursements)	335		27
Charge-offs post modification	(3,781)		(7,982)
Foreclosures	(7,156)		(1,074)
Paid-off and partial payments	(10,329)		(18,844)
Ending balance of TDRs	$ 705,123	[2]	$ 622,320

[1] Excludes TDRs held for sale amounting to $45.7 million as of December 31, 2014.

[2] Excludes TDRs held for sale amounting to $45.7 million as of March 31, 2015.

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BUSINESS COMBINATION- Additional information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014	Feb. 27, 2015
Business Acquisition [Line Items]
Branches Doral	10
Business Combination Bargain Purchase After Tax Gain Recognized Amount	$ 8.2
Premium On Loans Acquired	1.3
Business Combination Integration Related Costs	3.9
Contractually outstanding principal and interest at acquisition	226.7	135.5
Non Sop Unpaid Principal Balance	227.9
Business Combination Acquisition Nonrecurring Costs	2.1
Discount On Purchased Credit Impaired Loans	13.4
Purchased Credit Impaired Loans Acquired	93.3
Deposits [Member]
Business Acquisition [Line Items]
Business Combination Recognized Identifiable Assets Acquired And Liabilities Assumed Financial Liabilities			522.7
Liabilities Fair Value Adjustment	0.8
Property Plant And Equipment [Member]
Business Acquisition [Line Items]
Business Combination Recognized Identifiable Assets Acquired And Liabilities Assumed Financial Assets			5.5
Cash [Member]
Business Acquisition [Line Items]
Business Combination Recognized Identifiable Assets Acquired And Liabilities Assumed Financial Assets			217.7
Loans [Member]
Business Acquisition [Line Items]
Business Combination Recognized Identifiable Assets Acquired And Liabilities Assumed Financial Assets			$ 324.8

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NON-CONSOLIDATED VARIABLE INTEREST ENTITIES AND SERVICING ASSETS - Income Statement Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Variable Interest Entity [Line Items]
Net income (loss)	$ 25,646	$ 17,083
Cpg Gs [Member]
Variable Interest Entity [Line Items]
Revenues	588	751
Gross profit	(8,240)	(1,508)
Net income (loss)	$ (7,751)	$ (2,447)

XML

FAIR VALUE - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Securities available for sale
Investment securities available for sale	$ 1,974,226	$ 1,965,666
U S Treasury Securities [Member]
Securities available for sale
Investment securities available for sale	7,500	7,499
Us Government Agencies Debt Securities Noncallable [Member]
Securities available for sale
Investment securities available for sale	286,066	228,157
Us Government Agencies Debt Securities Callable [Member]
Securities available for sale
Investment securities available for sale	1,607,273	1,653,140
US States And Political Subdivisions Member [Member]
Securities available for sale
Investment securities available for sale	41,463	43,222
Private Label Mbs [Member]
Securities available for sale
Investment securities available for sale	31,824	33,648
Interest Rate Cap [Member] | Purchase
Derivatives, included in assets:
Derivatives, included in assets	1	6
Interest Rate Cap [Member] | Written
Derivatives, included in liabilities:
Derivatives, included in liabilities	1	6
Forward And Future Contracts [Member]
Derivatives, included in assets:
Derivatives, included in assets	0	0
Derivatives, included in liabilities:
Derivatives, included in liabilities	220	148
Interest Rate Swap [Member]
Derivatives, included in assets:
Derivatives, included in assets	0	33
Derivatives, included in liabilities:
Derivatives, included in liabilities	0	33
Other Available For Sale Securities [Member]
Securities available for sale
Investment securities available for sale	100	0
Fair Value Inputs Level 1 [Member] | U S Treasury Securities [Member]
Securities available for sale
Investment securities available for sale	7,500	7,499
Fair Value Inputs Level 1 [Member] | Us Government Agencies Debt Securities Noncallable [Member]
Securities available for sale
Investment securities available for sale	0	0
Fair Value Inputs Level 1 [Member] | Us Government Agencies Debt Securities Callable [Member]
Securities available for sale
Investment securities available for sale	0	0
Fair Value Inputs Level 1 [Member] | US States And Political Subdivisions Member [Member]
Securities available for sale
Investment securities available for sale	0	0
Fair Value Inputs Level 1 [Member] | Private Label Mbs [Member]
Securities available for sale
Investment securities available for sale	0	0
Fair Value Inputs Level 1 [Member] | Interest Rate Cap [Member] | Purchase
Derivatives, included in assets:
Derivatives, included in assets	0	0
Fair Value Inputs Level 1 [Member] | Interest Rate Cap [Member] | Written
Derivatives, included in liabilities:
Derivatives, included in liabilities	0	0
Fair Value Inputs Level 1 [Member] | Forward And Future Contracts [Member]
Derivatives, included in assets:
Derivatives, included in assets	0	0
Derivatives, included in liabilities:
Derivatives, included in liabilities		0
Fair Value Inputs Level 1 [Member] | Interest Rate Swap [Member]
Derivatives, included in assets:
Derivatives, included in assets	0	0
Derivatives, included in liabilities:
Derivatives, included in liabilities	0	0
Fair Value Inputs Level 1 [Member] | Other Available For Sale Securities [Member]
Securities available for sale
Investment securities available for sale	0	0
Fair Value Inputs Level 2 [Member] | U S Treasury Securities [Member]
Securities available for sale
Investment securities available for sale	0	0
Fair Value Inputs Level 2 [Member] | Us Government Agencies Debt Securities Noncallable [Member]
Securities available for sale
Investment securities available for sale	286,066	228,157
Fair Value Inputs Level 2 [Member] | Us Government Agencies Debt Securities Callable [Member]
Securities available for sale
Investment securities available for sale	1,607,273	1,653,140
Fair Value Inputs Level 2 [Member] | US States And Political Subdivisions Member [Member]
Securities available for sale
Investment securities available for sale	39,073	40,658
Fair Value Inputs Level 2 [Member] | Private Label Mbs [Member]
Securities available for sale
Investment securities available for sale	0	0
Fair Value Inputs Level 2 [Member] | Interest Rate Cap [Member] | Purchase
Derivatives, included in assets:
Derivatives, included in assets	1	6
Fair Value Inputs Level 2 [Member] | Interest Rate Cap [Member] | Written
Derivatives, included in liabilities:
Derivatives, included in liabilities	1	6
Fair Value Inputs Level 2 [Member] | Forward And Future Contracts [Member]
Derivatives, included in assets:
Derivatives, included in assets	0	0
Derivatives, included in liabilities:
Derivatives, included in liabilities	220	148
Fair Value Inputs Level 2 [Member] | Interest Rate Swap [Member]
Derivatives, included in assets:
Derivatives, included in assets	0	33
Derivatives, included in liabilities:
Derivatives, included in liabilities	0	33
Fair Value Inputs Level 2 [Member] | Other Available For Sale Securities [Member]
Securities available for sale
Investment securities available for sale	0	0
Fair Value Inputs Level 3 [Member] | U S Treasury Securities [Member]
Securities available for sale
Investment securities available for sale	0	0
Fair Value Inputs Level 3 [Member] | Us Government Agencies Debt Securities Noncallable [Member]
Securities available for sale
Investment securities available for sale	0	0
Fair Value Inputs Level 3 [Member] | Us Government Agencies Debt Securities Callable [Member]
Securities available for sale
Investment securities available for sale	0	0
Fair Value Inputs Level 3 [Member] | US States And Political Subdivisions Member [Member]
Securities available for sale
Investment securities available for sale	2,390	2,564
Fair Value Inputs Level 3 [Member] | Private Label Mbs [Member]
Securities available for sale
Investment securities available for sale	31,824	33,648
Fair Value Inputs Level 3 [Member] | Interest Rate Cap [Member] | Purchase
Derivatives, included in assets:
Derivatives, included in assets	0	0
Fair Value Inputs Level 3 [Member] | Interest Rate Cap [Member] | Written
Derivatives, included in liabilities:
Derivatives, included in liabilities	0	0
Fair Value Inputs Level 3 [Member] | Forward And Future Contracts [Member]
Derivatives, included in assets:
Derivatives, included in assets	0	0
Derivatives, included in liabilities:
Derivatives, included in liabilities	0	0
Fair Value Inputs Level 3 [Member] | Interest Rate Swap [Member]
Derivatives, included in assets:
Derivatives, included in assets	0	0
Derivatives, included in liabilities:
Derivatives, included in liabilities	0	0
Fair Value Inputs Level 3 [Member] | Other Available For Sale Securities [Member]
Securities available for sale
Investment securities available for sale	$ 100	$ 0

XML

LOAN PORTFOLIO - Corporation's Credit Quality Indicators by Loan (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015		Dec. 31, 2014
Financing Receivable Recorded Investment [Line Items]
Commercial mortgage loans	$ 1,649,263		$ 1,665,787
Construction loans	124,440		123,480
Commercial and Industrial loans	2,442,867		2,479,437
Land	54,190		55,921
Residential Construction [Member]
Financing Receivable Recorded Investment [Line Items]
Construction loans	42,794		42,997
Commercial Construction [Member]
Financing Receivable Recorded Investment [Line Items]
Construction loans	27,456		24,562
Substandard [Member]
Financing Receivable Recorded Investment [Line Items]
Commercial mortgage loans	227,195		273,027
Commercial and Industrial loans	229,112		234,926
Land	15,930		16,915
Substandard [Member] | Residential Construction [Member]
Financing Receivable Recorded Investment [Line Items]
Construction loans	12,265		13,548
Substandard [Member] | Commercial Construction [Member]
Financing Receivable Recorded Investment [Line Items]
Construction loans	11,790		11,790
Doubtful [Member]
Financing Receivable Recorded Investment [Line Items]
Commercial mortgage loans	0		897
Commercial and Industrial loans	6,293		4,884
Land	0		0
Doubtful [Member] | Residential Construction [Member]
Financing Receivable Recorded Investment [Line Items]
Construction loans	808		776
Doubtful [Member] | Commercial Construction [Member]
Financing Receivable Recorded Investment [Line Items]
Construction loans	0		0
Unlikely To Be Collected Financing Receivable [Member]
Financing Receivable Recorded Investment [Line Items]
Commercial mortgage loans	0		0
Commercial and Industrial loans	789		801
Land	0		0
Unlikely To Be Collected Financing Receivable [Member] | Residential Construction [Member]
Financing Receivable Recorded Investment [Line Items]
Construction loans	0		0
Unlikely To Be Collected Financing Receivable [Member] | Commercial Construction [Member]
Financing Receivable Recorded Investment [Line Items]
Construction loans	0		0
Total Adversely Classified [Member]
Financing Receivable Recorded Investment [Line Items]
Commercial mortgage loans	227,195	[1]	273,924	[1]
Commercial and Industrial loans	236,194	[1]	240,611	[1]
Land	15,930	[1]	16,915	[1]
Total Adversely Classified [Member] | Residential Construction [Member]
Financing Receivable Recorded Investment [Line Items]
Construction loans	13,073	[1]	14,324	[1]
Total Adversely Classified [Member] | Commercial Construction [Member]
Financing Receivable Recorded Investment [Line Items]
Construction loans	$ 11,790	[1]	$ 11,790	[1]

[1] Excludes $54.6 million ($7.8 million land, $39.1 million construction-commercial, $0.9 million construction-residential, and $ 6.8 million commercial mortgage) as of March 31, 2015 and December 31, 2014, of non-performing loans held for sale.

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FIRST BANCORP. (Holding Company Only) Financial Information - Statements of Loss (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Income:
Interest income on investment securities	$ 12,604	$ 15,228
Other Interest And Dividend Income	537	500
Expense:
Loss before income taxes and equity in undistributed earnings (losses) of subsidiaries	33,678	17,970
Income tax expense	(8,032)	(887)
Net income (loss)	25,646	17,083
Other comprehensive income (loss), net of tax	7,140	22,539
Comprehensive (loss) income	32,786	39,622
Holding Company [Member]
Income:
Other Interest And Dividend Income	5	5
Other income	56	53
Total interest income	61	58
Expense:
Notes payable and other borrowings	1,817	1,760
Other operating expenses	604	506
Total operating expenses	2,421	2,266
Loss before income taxes and equity in undistributed earnings (losses) of subsidiaries	(2,360)	(2,208)
Income tax expense	0	(2)
Equity in undistributed earnings (losses) of subsidiaries	28,006	19,293
Net income (loss)	25,646	17,083
Other comprehensive income (loss), net of tax	7,140	22,539
Comprehensive (loss) income	$ 32,786	$ 39,622

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LOAN PORTFOLIO - Accretable Yield Related to Purchased Credit Impaired Loans (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Accretable Yield [Line Items]
Accretable yield at acquisition	$ 82,460	$ 0
Additions	38,319	0
Reclassification to nonaccretable	0	0
Accretion recognized in earnings	(2,277)	0
Accretable yield at the end of the period	$ 118,502	$ 0

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REGULATORY MATTERS, COMMITMENTS AND CONTINGENCIES - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items]
Commitments	$ 1,100.0
Percentage Of Trust Preferred Securities That Qualify As Tier 1 Capital		0.00%	25.00%
Four Major Risk Weightings Categories	(0%, 20%, 50%, and 100%)
Credit Cards [Member]
Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items]
Commitments	645.6
Commercial And Financial Standby Letters Of Credit [Member]
Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items]
Commitments	44.5
Basel III [Member]
Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items]
Common Equity Tier1 Capital To Risk Weight Assets Ratio	4.50%
Common Equity Tier 1 Capital Conservation Buffer	2.50%
Common Equity Tier 1 Capital To Risk Weight Assets Ratio Plus Common Equity Tier 1 Capital Conservation Buffer	7.00%
Total Tier 1 Capital To Risk Weight Assets Ratio	6.00%
Total Tier 1 Capital To Risk Weight Assets Ratio Plus Common Equity Tier 1 Capital Conservation Buffer	8.50%
Total Tier 1 Capital And Tier 2 Capital To Risk Weight Assets Ratio	8.00%
Total Tier 1 Capital And Tier 2 Capital To Risk Weight Assets Ratio Plus Common Equity Tier 1 Capital Conservation Buffer	10.50%
Leverage Ratio	4.00%
Common Equity Tier 1 Capital Conservation Buffer First Year	0.625%
Threshold For Deductions Of Certain Items From Common Equity Tier 1 Capital	10.00%
Threshold For Total Deductions From Common Equity Tier 1 Capital	15.00%
Trust Preferred Securities	$ 225
Percentage Of Trust Preferred Securities That Qualify As Tier 1 Capital	25.00%
Leverage Ratio Composite Rating	3.00%
Risk Weightings	150.00%
Supervisory Rating	1.00%
Basel III [Member] | Well Capitalized [Member]
Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items]
Tier 1 risk based capital ratio to be considered well capitalzed under PCA	8.00%
Tier 1 Common equity ratio to be considered well capitalized	6.50%
FirstBank [Member]
Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items]
Leverage ratio	13.28%			13.04%
Tier 1 risk based capital ratio	17.61%			18.10%
Total Risk Based Capital Ratio	18.89%			19.37%
Tier 1 risk based capital ratio to be considered well capitalzed under PCA	8.00%			6.00%
Total risk based capital to be considered well capitalized under PCA	10.00%			10.00%
Leverage ratio to be considered well capitalized under PCA	5.00%			5.00%
Common Equity Tier1 Capital To Risk Weight Assets Ratio	15.62%

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LOAN PORTFOLIO - Activity for Impaired Loans (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Impaired Loans:
Balance at beginning of period	$ 945,407	$ 919,112
Loans determined impaired during the period	62,933	54,277
Charge-offs	(11,715)	(32,039)
Loans sold, net charge-offs	(1,137)	0
Increases to impaired loans (disbursements)	519	625
Foreclosures	(9,952)	(4,006)
Loans no longer considered impaired	(9,898)	(3,728)
Paid in full or partial payments	(21,176)	(54,853)
Balance at end of period	$ 954,981	$ 879,388

XML

LOAN PORTFOLIO -Changes in Carrying Amount Of Purchased Credit Impaired Loans (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Financing Receivable Impaired [Line Items]
Beggining balance: purchased credit-impaired loans	$ 102,604
Purchased Credit Impaired Loans Aquired	79,889
Accretion	2,277	0
Sop Collections	3,656
Ending balance: purchased credit-impaired loans	$ 181,114

XML

LOAN PORTFOLIO - Credit Risk Payment Activity (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015		Dec. 31, 2014		Mar. 31, 2014
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	$ 9,485,372		$ 9,262,436		$ 9,566,785
Auto loans [Member]
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	1,028,370		1,060,782
Finance Leases [Member]
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	230,183		232,126
Residential Real Estate [Member] | Fhava Guaranteed Loans [Member]
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	155,662	[1]	153,570	[2]
Residential Real Estate [Member] | Other Residential Mortgage Loans [Member]
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	3,175,958		2,857,617
Residential Real Estate [Member] | Performing Financing Receivable [Member] | Fhava Guaranteed Loans [Member]
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	155,662	[1]	153,570	[2]
Residential Real Estate [Member] | Performing Financing Receivable [Member] | Other Residential Mortgage Loans [Member]
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	2,825,774		2,578,416
Residential Real Estate [Member] | Purchased Credit Impaired [Member] | Fhava Guaranteed Loans [Member]
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	0	[1],[3]	0	[2],[3]
Residential Real Estate [Member] | Purchased Credit Impaired [Member] | Other Residential Mortgage Loans [Member]
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	177,601	[3]	98,494	[3]
Residential Real Estate [Member] | Nonperforming Financing Receivable [Member] | Fhava Guaranteed Loans [Member]
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	0	[1]	0	[2]
Residential Real Estate [Member] | Nonperforming Financing Receivable [Member] | Other Residential Mortgage Loans [Member]
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	172,583		180,707
Consumer [Member] | Auto loans [Member]
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	1,028,370		1,060,782
Consumer [Member] | Finance Leases [Member]
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	230,183		232,126
Consumer [Member] | Other Consumer Loans [Member]
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	678,629		689,637
Consumer [Member] | Performing Financing Receivable [Member] | Auto loans [Member]
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	1,009,327		1,038,506
Consumer [Member] | Performing Financing Receivable [Member] | Finance Leases [Member]
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	227,204		226,881
Consumer [Member] | Performing Financing Receivable [Member] | Other Consumer Loans [Member]
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	665,504		673,626
Consumer [Member] | Purchased Credit Impaired [Member] | Auto loans [Member]
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	0	[3]	0	[3]
Consumer [Member] | Purchased Credit Impaired [Member] | Finance Leases [Member]
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	0	[3]	0	[3]
Consumer [Member] | Purchased Credit Impaired [Member] | Other Consumer Loans [Member]
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	234	[3]	717	[3]
Consumer [Member] | Nonperforming Financing Receivable [Member] | Auto loans [Member]
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	19,043		22,276
Consumer [Member] | Nonperforming Financing Receivable [Member] | Finance Leases [Member]
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	2,979		5,245
Consumer [Member] | Nonperforming Financing Receivable [Member] | Other Consumer Loans [Member]
Financing Receivable Recorded Investment [Line Items]
Loans And Leases Receivable Gross Carrying Amount	$ 12,891		$ 15,294

[1]  It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as past due loans 90 days and still accruing as opposed to non-performing loans since the principal repayment is insured. These balances include $30.1 million of residential mortgage loans insured by the FHA or guaranteed by the VA, which are over 18 months delinquent, and are no longer accruing interest as of March 31, 2015.

[2]  It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as past due loans 90 days and still accruing as opposed to non-performing loans since the principal repayment is insured. These balances include $40.4 million of residential mortgage loans insured by the FHA or guaranteed by the VA, which are over 18 months delinquent, and are no longer accruing interest as of December 31, 2014.

[3] PCI loans are excluded from non-performing statistics due to the application of the accretion method, under which these loan will accrete interest income over the remaining life of the loans using estimated cash flow analysis.

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LOAN PORTFOLIO - Loan Portfolio Held for Investment (Parenthetical) (Detail) (USD $) In Billions, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Financial Information [Line Items]
Commercian Loans Collaterized By Real Estate	$ 1.1	$ 1.1

XML

OTHER BORROWINGS

3 Months Ended

Mar. 31, 2015

OTHER BORROWINGS

NOTE 18 – OTHER BORROWINGS

Other borrowings, as of the indicated dates, consist of:

	March 31,		December 31,
	2015		2014
	(In thousands)
Junior subordinated debentures due in 2034,
interest-bearing at a floating rate of 2.75%
over 3-month LIBOR (3.02% as of March 31, 2015
and 2.99% as of December 31, 2014)	$	103,093	$	103,093
Junior subordinated debentures due in 2034,
interest-bearing at a floating rate of 2.50%
over 3-month LIBOR (2.77% as of March 31, 2015
and 2.75% as of December 31, 2014)		128,866		128,866
	$	231,959	$	231,959

XML

FAIR VALUE - Fair Value (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014
Assets:
Investment securities available for sale	$ 1,974,226	$ 1,965,666
Less: allowance for loan and lease losses	(226,064)	(222,395)
Liabilities:
Other borrowings	231,959	231,959
Fair Value Inputs Level 3 [Member]
Assets:
Loans held for sale			54,755	[1]
Loans held for investment, net of allowance			478,393	[2]
Carrying Reported Amount Fair Value Disclosure [Member]
Assets:
Cash and due from banks and money market investments	984,436	796,108
Investment securities available for sale	1,974,226	1,965,666
Other equity securities	26,185	25,752
Loans held for sale	81,723	76,956
Loans, held for investment	9,485,372	9,262,436
Less: allowance for loan and lease losses	(226,064)	(222,395)
Loans held for investment, net of allowance	9,259,308	9,040,041
Derivatives, included in assets	1	39
Liabilities:
Deposits	9,841,038	9,483,945
Securities sold under agreements to repurchase	900,000	900,000
Advances from FHLB	325,000	325,000
Other borrowings	231,959	231,959
Derivatives, included in liabilities	221	187
Estimate Of Fair Value Fair Value Disclosure [Member]
Assets:
Cash and due from banks and money market investments	984,436	796,108
Investment securities available for sale	1,974,226	1,965,666
Other equity securities	26,185	25,752
Loans held for sale	82,942	77,888
Loans held for investment, net of allowance	9,115,707	8,844,659
Derivatives, included in assets	1	39
Liabilities:
Deposits	9,852,630	9,486,325
Securities sold under agreements to repurchase	966,365	958,715
Advances from FHLB	326,087	324,376
Other borrowings	169,935	162,344
Derivatives, included in liabilities	221	187
Estimate Of Fair Value Fair Value Disclosure [Member] | Fair Value Inputs Level 1 [Member]
Assets:
Cash and due from banks and money market investments	984,436	796,108
Investment securities available for sale	7,500	7,499
Other equity securities	0	0
Loans held for sale	0	0
Loans held for investment, net of allowance	0	0
Derivatives, included in assets	0	0
Liabilities:
Deposits	0	0
Securities sold under agreements to repurchase	0	0
Advances from FHLB	0	0
Other borrowings	0	0
Derivatives, included in liabilities	0	0
Estimate Of Fair Value Fair Value Disclosure [Member] | Fair Value Inputs Level 2 [Member]
Assets:
Cash and due from banks and money market investments	0	0
Investment securities available for sale	1,932,412	1,921,955
Other equity securities	26,185	25,752
Loans held for sale	28,301	23,247
Loans held for investment, net of allowance	0	0
Derivatives, included in assets	1	39
Liabilities:
Deposits	9,852,630	9,486,325
Securities sold under agreements to repurchase	966,365	958,715
Advances from FHLB	326,087	324,376
Other borrowings	0	0
Derivatives, included in liabilities	221	187
Estimate Of Fair Value Fair Value Disclosure [Member] | Fair Value Inputs Level 3 [Member]
Assets:
Cash and due from banks and money market investments	0	0
Investment securities available for sale	34,314	36,212
Other equity securities	0	0
Loans held for sale	54,641	54,641
Loans held for investment, net of allowance	9,115,707	8,844,659
Derivatives, included in assets	0	0
Liabilities:
Deposits	0	0
Securities sold under agreements to repurchase	0	0
Advances from FHLB	0	0
Other borrowings	169,935	162,344
Derivatives, included in liabilities	$ 0	$ 0

[1] The value of these loans was derived from external appraisals, adjusted for specific characteristics of the loans, and, for loans with signed sale agreements, the value was determined based on the sales price in such agreements.

[2]  Mainly impaired commercial and construction loans. The impairment was generally measured based on the fair value of the collateral. The fair values were derived from external appraisals that take into consideration prices in observed transactions involving similar assets in similar locations but adjusted for specific characteristics and assumptions of the collateral (e.g. absorption rates), which are not market observable.

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OTHER BORROWINGS (Tables)

3 Months Ended

Mar. 31, 2015

Components of Other Borrowings

	March 31,		December 31,
	2015		2014
	(In thousands)
Junior subordinated debentures due in 2034,
interest-bearing at a floating rate of 2.75%
over 3-month LIBOR (3.02% as of March 31, 2015
and 2.99% as of December 31, 2014)	$	103,093	$	103,093
Junior subordinated debentures due in 2034,
interest-bearing at a floating rate of 2.50%
over 3-month LIBOR (2.77% as of March 31, 2015
and 2.75% as of December 31, 2014)		128,866		128,866
	$	231,959	$	231,959

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OTHER REAL ESTATE OWNED (Tables)

3 Months Ended

Mar. 31, 2015

Text Block [Abstract]

Schedule Of Other Real Estate Assets And Foreclosed Properties [Table Text Block]

The following table presents OREO inventory as of the dates indicated:
		Quarter Ended
		March 31,			December 31,
		2015		2014
			(Dollars in thousands)
OREO
OREO balances, carrying value:
FHA/VA-Guaranteed (1)		$	6,867	$	7,059
Other residential			26,031		22,520
Commercial			72,473		75,654
Construction			17,257		18,770
Total		$	122,628	$	124,003
(1)	As of March 31, 2015, exclude $0.2 million of foreclosures completed in 2015 that meet the conditions of ASC 310-40 and are presented as a receivable (other assets) in the statement of financial condition.

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LOAN PORTFOLIO - Corporation's Aging of Loans Held for Investment Portfolio (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015 numberofpayments	Dec. 31, 2014
Accounts Notes And Loans Receivable [Line Items]
Loans considered to be defaulted if borrower has failed to make payment for a period or more than the period	0 years 2 months 29 days	0 years 2 months 29 days
Period during which credit card loans continue to accrue finance charges and fees	0 years 5 months 27 days	0 years 5 months 27 days
Defaulted loans collateralizing Ginnie Mae (GNMA) securities	$ 26.2	$ 9.3
Minimum Number of Payments in Arrears to Consider Commercial Mortgage and Construction Loan as Past Due	2
Residential mortgage loans insured by FHA or guaranteed by the VA	30.1	40.4
Period of residential mortgage loan that are no longer accruing interest	1 year 6 months 0 days	1 year 6 months 0 days
Fha Va And Other Government Guaranteed Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
30-59 Days past due Mortgages	12.2	14.0
Residential Mortgage [Member]
Accounts Notes And Loans Receivable [Line Items]
30-59 Days past due Mortgages	177.4	189.1
Commercial Mortgage Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
30-59 Days past due Mortgages	38.4	20.8
Residential Construction [Member]
Accounts Notes And Loans Receivable [Line Items]
30-59 Days past due Mortgages	1.6	1.0
Land Construction [Member]
Accounts Notes And Loans Receivable [Line Items]
30-59 Days past due Mortgages	$ 6.1	$ 0.8

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LOANS HELD FOR SALE - Portfolio of Loans Held for Sale (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Accounts Notes And Loans Receivable [Line Items]
Total	$ 81,723	$ 76,956
Residential Mortgage [Member]
Accounts Notes And Loans Receivable [Line Items]
Residential mortgage loans	27,135	22,315
Commercial Mortgage loans	6,786	6,839
Construction Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Construction loans	$ 47,802	$ 47,802

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STOCK-BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2015

Activity of Stock Options

The activity of stock options granted under the 1997 stock option plan for the quarter ended March 31, 2015 is set forth below:
	Number of Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (In thousands)
Beginning of period outstanding
and exercisable	82,575	$	187.75
Options expired	(11,395)		358.80
Options cancelled	(1,332)		164.10
End of period outstanding and
exercisable	69,848	$	160.30	1.3	$	-

Restricted Stock Activity Under Omnibus Plan

The following table summarizes the restricted stock activity in 2015 under the Omnibus Plan for both executive officers covered by the TARP requirements and other employees as well as for the independent directors:
	Quarter Ended
	March 31, 2015
	Number of
	shares of		Weighted-Average
	restricted		Grant Date
	stock		Fair Value
Non-vested shares at beginning of period	2,327,156	$	3.39
Granted	821,532		3.92
Forfeited	(8,500)		5.07
Vested	(63,750)		4.00
Non-vested shares at March 31, 2015	3,076,438	$	3.51

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SUPPLEMENTAL CASH FLOW INFORMATION (Tables)

3 Months Ended

Mar. 31, 2015

Supplemental Cash Flow Information

	Quarter Ended March 31,
	2015		2014
	(In thousands)
Cash paid for:
Interest on borrowings	$	24,502	$	23,359
Income tax		82		113
Non-cash investing and financing activities:
Additions to other real estate owned		12,702		8,176
Additions to auto and other repossessed assets		20,464		20,771
Capitalization of servicing assets		1,073		1,052
Loan securitizations		46,914		50,792
Preferred stock exchanged for new common stock issued:
Preferred stock exchanged (Series A through E)		-		6,024
New common stock issued		-		5,645
Fair value of assets acquired (liabilities assumed) in the Doral Bank transaction:
Loans		311,410		-
Premises and equipment, net		5,450		-
Core deposit intangible		5,820		-
Deposits		(523,517)		-

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INVESTMENT SECURITIES - Roll-Forward of Credit Losses on Debt Securities Held by Corporation (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Other Than Temporary Impairment Credit Losses Recognized In Earnings [Line Items]
Beginning balance of credit losses on debt securities held for which a portion of an OTTI was recognized in OCI	$ 5,777	$ 5,389
Additions:
Credit losses on debt securities for which an OTTI was previously recognized	156	0
Ending balance of credit losses on debt securities held for which a portion of an OTTI was recognized in OCI	$ 5,933	$ 5,389

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NON-CONSOLIDATED VARIABLE INTEREST ENTITIES AND SERVICING ASSETS - Changes in Impairment Allowance (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Valuation Allowance For Impairment Of Recognized Servicing Assets [Line Items]
Balance at beginning of period	$ 55	$ 212
Temporary impairment charges	58	219
Recoveries	(20)	0
Balance at end of period	$ 93	$ 431

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STOCK-BASED COMPENSATION - Activity of Stock Options (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of options, Beginning of year	82,575
Number of Options, expired	(11,395)
Number of Options, cancelled	(1,332)
Number of options, End of period outstanding and exercisable	69,848
Weighted-Average Exercise Price, beginning of year	$ 187.75
Weighted-Average Exercise Price, Options expired	$ 358.80
Weighted-Average Exercise Price, Options cancelled	$ 164.10
Weighted-Average Exercise Price, End of period outstanding and exercisable	$ 160.30
Weighted- Average Remaining Contractual Term (Years),End of period outstanding and exercisable	1 year 3 months 18 days
Aggregate Intrinsic Value, End of period outstanding and exercisable	$ 0

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DEPOSITS (Tables)

3 Months Ended

Mar. 31, 2015

Summary of Deposit Balances

The following table summarizes deposit balances:
	March 31,			December 31,
	2015		2014
	(In thousands)
Type of account:
Non-interest bearing checking accounts	$	1,175,943	$	900,616
Savings accounts		2,641,793		2,450,484
Interest-bearing checking accounts		1,127,560		1,054,136
Certificates of deposit		2,323,259		2,191,663
Brokered CDs		2,572,483		2,887,046
	$	9,841,038	$	9,483,945

Brokered Certificates Of Deposit Mature

Brokered CDs mature as follows:
	March 31, 2015
	(In thousands)
Three months or less	$	362,501
Over three months to six months		577,737
Over six months to one year		832,235
One to three years		745,922
Three to five years		18,037
Over five years		36,051
Total	$	2,572,483

Components of Interest Expense on Deposits

The following are the components of interest expense on deposits:
	Quarter Ended
	March 31,			March 31,
	2015			2014
	(In thousands)
Interest expense on deposits	$	16,359	$	18,514
Amortization of broker placement fees		1,335		1,785
Interest expense on deposits	$	17,694	$	20,299

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EARNINGS PER COMMON SHARE

3 Months Ended

Mar. 31, 2015

EARNINGS PER COMMON SHARE

NOTE 3 – EARNINGS PER COMMON SHARE

	The calculations of earnings per common share for the quarters ended on March 31, 2015 and 2014 are as follows:
		Quarter Ended
		March 31,		March 31,
		2015		2014
		(In thousands, except per share information)
Net income		$	25,646	$	17,083
	Cumulative convertible preferred stock dividends (Series G)
Favorable impact from issuing common stock in exchange for
	Series A through E preferred stock (1)		-		379
Net income attributable to common stockholders		$	25,646	$	17,462
Weighted-Average Shares:
	Average common shares outstanding		210,686		205,732
	Average potential dilutive common shares		2,060		1,144
	Average common shares outstanding-assuming dilution		212,746		206,876
Income per common share:
	Basic	$	0.12	$	0.08
	Diluted	$	0.12	$	0.08
(1)	Excess of carrying amount of the Series A through E preferred stock exchanged over the fair value of new common shares issued in the first quarter of 2014.

Earnings per common share is computed by dividing net income attributable to common stockholders by the weighted average number of common shares issued and outstanding. Net income attributable to common stockholders represents net income adjusted for any preferred stock dividends, including any dividends declared, and any cumulative dividends related to the current dividend period that have not been declared as of the end of the period.For the first quarter of 2014, net income attributable to common stockholders includes the one-time effect to retained earnings of the issuance of common stock in exchange for Series A through E preferred stock. This transaction is discussed in Note 19 to the unaudited consolidated financial statements. Basic weighted average common shares outstanding exclude unvested shares of restricted stock.

Potential common shares consist of common stock issuable under the assumed exercise of stock options, unvested shares of restricted stock, and outstanding warrants using the treasury stock method. This method assumes that the potential common shares are issued and the proceeds from the exercise, in addition to the amount of compensation cost attributable to future services, are used to purchase common stock at the exercise date. The difference between the numbers of potential shares issued and potential shares purchased is added as incremental shares to the actual number of shares outstanding to compute diluted earnings per share. Stock options, unvested shares of restricted stock, and outstanding warrants that result in lower potential shares issued than potential shares purchased under the treasury stock method are not included in the computation of dilutive earnings per share since their inclusion would have an antidilutive effect on earnings per share. Stock options not included in the computation of outstanding shares because they were antidilutive amounted to69,848and 88,640 for the quarters ended March 31, 2015 and 2014, respectively.

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FAIR VALUE - Impairment of Valuation Adjustments were Recorded for Assets Recognized at Fair Value (Parenthetical) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Repayment rate used for the calculation of mortgage servicing rights value	31.56%	32.00%
Discount rate used for calculation of mortgage servicing rights value	14.50%	14.50%
Loans held for sale	$ 81,723	$ 76,956
Mortgage Servicing Rights [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Repayment rate used for the calculation of mortgage servicing rights value	10.25%		9.10%
Discount rate used for calculation of mortgage servicing rights value	10.62%		10.61%

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DEPOSITS - Brokered Certificates Of Deposit Mature (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Deposits [Line Items]
Interest Bearing Domestic Deposit Brokered	$ 2,572,483	$ 2,887,046
One to ninety days
Deposits [Line Items]
Interest Bearing Domestic Deposit Brokered	362,501
Over three month to six months
Deposits [Line Items]
Interest Bearing Domestic Deposit Brokered	577,737
Over six months to one year
Deposits [Line Items]
Interest Bearing Domestic Deposit Brokered	832,235
One to three year
Deposits [Line Items]
Interest Bearing Domestic Deposit Brokered	745,922
Three to five years
Deposits [Line Items]
Interest Bearing Domestic Deposit Brokered	18,037
Over five years
Deposits [Line Items]
Interest Bearing Domestic Deposit Brokered	$ 36,051

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STOCK-BASED COMPENSATION - Restricted Stock Activity Under Omnibus Plan (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of non-vested shares of restricted stock, beginning of period	2,327,156
Granted shares of restricted stock	821,532
Vested	(63,750)
Weighted-Average Grant Date Fair Value, beginning of period	$ 3.39
Weighted-Average Grant Date Fair Value of Stocks	$ 3.92
Weighted-Averages Grant Date Dair Value, Forefeitures	$ 5.07
Weighted-Averages Grant Date Fair Value, Vested	$ 4.00
Weighted-Average Grant Date Fair Value, end of period	$ 3.51
Omnibus Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Forefeited	(8,500)
Number of non-vested shares of restricted stock, end of period	3,076,438

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OTHER BORROWINGS - Components of Other Borrowings (Parenthetical) (Detail)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Junior Subordinated Debentures Bearing Interest At Floating Rate Of Two Point Seventy Five [Member]
Debt Instrument [Line Items]
Floating Interest rate on junior subordinated debentures	3.02%	2.99%
Subordinated Borrowing Due Date	Jun. 17, 2034
Callable step-rate notes rate	2.75%
Junior Subordinated Debentures Bearing Interest At Floating Rate Of Two Point Fifty Percent [Member]
Debt Instrument [Line Items]
Floating Interest rate on junior subordinated debentures	2.77%	2.75%
Subordinated Borrowing Due Date	Sep. 20, 2034
Callable step-rate notes rate	2.50%

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FAIR VALUE - Assets and Liabilities Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Investment securities available-for-sale:
Discount rate used for calculation of mortgage servicing rights value	14.50%	14.50%
Fair value input prepayment rate	31.56%	32.00%
Securities available for sale
Discount rate used for calculation of mortgage servicing rights value	14.50%	14.50%
Fair value input prepayment rate	31.56%	32.00%
Private Label Mbs [Member]
Investment securities available-for-sale:
Fair Value	31,824
Discount rate used for calculation of mortgage servicing rights value	14.50%
Securities available for sale
Fair Value	31,824
Discount rate used for calculation of mortgage servicing rights value	14.50%
US States And Political Subdivisions Member [Member]
Investment securities available-for-sale:
Fair Value	2,390
Unobservable input prepayment rate	2.89%
Securities available for sale
Fair Value	2,390
Unobservable input prepayment rate	2.89%
Discounted Cash Flow [Member] | Private Label Mbs [Member]
Investment securities available-for-sale:
Valuation technique	Discounted cash flow
Securities available for sale
Valuation technique	Discounted cash flow
Discounted Cash Flow [Member] | US States And Political Subdivisions Member [Member]
Investment securities available-for-sale:
Valuation technique	Discounted cash flow
Securities available for sale
Valuation technique	Discounted cash flow
Minimum [Member]
Investment securities available-for-sale:
Fair value input prepayment rate	18.04%	19.89%
Securities available for sale
Fair value input prepayment rate	18.04%	19.89%
Minimum [Member] | Private Label Mbs [Member]
Investment securities available-for-sale:
Fair value input prepayment rate	18.04%
Fair value projected Cumulative Loss Rate	0.00%
Securities available for sale
Fair value input prepayment rate	18.04%
Fair value projected Cumulative Loss Rate	0.00%
Maximum [Member]
Investment securities available-for-sale:
Fair value input prepayment rate	100.00%	100.00%
Securities available for sale
Fair value input prepayment rate	100.00%	100.00%
Maximum [Member] | Private Label Mbs [Member]
Investment securities available-for-sale:
Fair value input prepayment rate	100.00%
Fair value projected Cumulative Loss Rate	80.00%
Securities available for sale
Fair value input prepayment rate	100.00%
Fair value projected Cumulative Loss Rate	80.00%

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

3 Months Ended

Mar. 31, 2015

Notional Amounts of All Derivative Instruments

The following table summarizes the notional amounts of all derivative instruments:
	Notional Amounts
	As of		As of
	March 31,		December 31,
	2015		2014
Undesignated economic hedges:	(In thousands)
Interest rate contracts:
Interest rate swap agreements	$	5,440	$	5,440
Written interest rate cap agreements		36,809		37,132
Purchased interest rate cap agreements		36,809		37,132
Forward Contracts:
Sale of TBA GNMA MBS pools		32,000		19,000
	$	111,058	$	98,704
Notional amounts are presented on a gross basis with no netting of offseting exposure positions.

Summary of Fair Value of Derivative Instruments and Location in Statement of Financial Condition

The following table summarizes the fair value of derivative instruments as of the indicated dates and the location in the statement of financial condition:
	Asset Derivatives					Liability Derivatives
	Statement of	March 31,		December 31,			March 31,		December 31,
	Financial	2015		2014			2015		2014
	Condition Location	Fair Value		Fair Value		Statement of Financial Condition Location	Fair Value		Fair Value
	(In thousands)
Undesignated economic hedges:
Interest rate contracts:
Interest rate swap agreements	Other assets	$	-	$	33	Accounts payable and other liabilities	$	-	$	33
Written interest rate cap agreements	Other assets		-		-	Accounts payable and other liabilities		1		6
Purchased interest rate cap agreements	Other assets		1		6	Accounts payable and other liabilities		-		-
Forward Contracts:
Sales of TBA GNMA MBS pools	Other assets		-		-	Accounts payable and other liabilities		220		148
		$	1	$	39		$	221	$	187

Effect of Derivative Instruments on Statement of Income (Loss)

The following table summarizes the effect of derivative instruments on the statement of income :
		Gain (or Loss)
	Location of Gain or (Loss)		Quarter Ended
	Recognized in Income on	March 31,
(In thousands)	Derivatives	2015		2014
			(In thousands)
UNDESIGNATED ECONOMIC HEDGES:
Interest rate contracts:
Interest rate swap agreements	Interest income - Loans	$	-	$	313
Forward contracts:
Sales of TBA GNMA MBS pools	Mortgage Banking Activities		(72)		(165)
Total (loss) gain on derivatives		$	(72)	$	148

Summary of Interest Rate Swaps

	As of		As of
	March 31,		December 31,
	2015		2014
		(Dollars in thousands)
Pay fixed/receive floating :
Notional amount	$	5,440	$	5,440
Weighted-average receive rate at period end		2.04%		2.03%
Weighted-average pay rate at period end		3.45%		3.45%
As of March 31, 2015, the Corporation has not entered into any derivative instrument containing credit-risk-related
contingent features.

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SUPPLEMENTAL CASH FLOW INFORMATION

3 Months Ended

Mar. 31, 2015

SUPPLEMENTAL CASH FLOW INFORMATION

NOTE22 – SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information is as follows:

	Quarter Ended March 31,
	2015		2014
	(In thousands)
Cash paid for:
Interest on borrowings	$	24,502	$	23,359
Income tax		82		113
Non-cash investing and financing activities:
Additions to other real estate owned		12,702		8,176
Additions to auto and other repossessed assets		20,464		20,771
Capitalization of servicing assets		1,073		1,052
Loan securitizations		46,914		50,792
Preferred stock exchanged for new common stock issued:
Preferred stock exchanged (Series A through E)		-		6,024
New common stock issued		-		5,645
Fair value of assets acquired (liabilities assumed) in the Doral Bank transaction:
Loans		311,410		-
Premises and equipment, net		5,450		-
Core deposit intangible		5,820		-
Deposits		(523,517)		-

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FAIR VALUE

3 Months Ended

Mar. 31, 2015

FAIR VALUE

NOTE 21 – FAIR VALUE

Fair Value Measurement

The FASB authoritative guidance for fair value measurement defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This guidance also establishes a fair value hierarchy for classifying financial instruments. The hierarchy is based on whether the inputs to the valuation techniques used to measure fair value are observable or unobservable. Three levels of inputs may be used to measure fair value:

Level 1	Valuations of Level 1 assets and liabilities are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. Level 1 assets and liabilities include equity securities that trade in an active exchange market, as well as certain U.S. Treasury and other U.S. government and agency securities and corporate debt securities that are traded by dealers or brokers in active markets.
Level 2	Valuations of Level 2 assets and liabilities are based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include (i) mortgage-backed securities for which the fair value is estimated based on the value of identical or comparable assets, (ii) debt securities with quoted prices that are traded less frequently than exchange-traded instruments, and (iii) derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.
Level 3	Valuations of Level 3 assets and liabilities are based on unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined by using pricing models for which the determination of fair value required significant management judgments estimation.

For 2015, there have been no transfers into or out of Level 1, Level 2 or Level 3 of the fair value hierarchy.

Financial Instruments Recorded at Fair Value on a Recurring Basis

Investment securities available for sale

The fair value of investment securities was the market value based on quoted market prices (as is the case with equity securities, Treasury notes, and non-callable U.S. Agency debt securities), when available (Level 1), or market prices for identical or comparable assets (as is the case with MBS and callable U.S. agency debt) that are based on observable market parameters, including benchmark yields, reported trades, quotes from brokers or dealers, issuer spreads, bids, offers and reference data including market research operations (Level 2). Observable prices in the market already consider the risk of nonperformance. If listed prices or quotes are not available, fair value is based upon models that use unobservable inputs due to the limited market activity of the instrument, as is the case with certain private label mortgage-backed securities held by the Corporation (Level 3).

Private label MBS are collateralized by fixed-rate mortgages on single-family residential properties in the United States; the interest rate on the securities is variable, tied to 3-month LIBOR and limited to the weightedaverage coupon of the underlying collateral. The market valuation represents the estimated net cash flows over the projected life of the pool of underlying assets applying a discount rate that reflects market observed floating spreads over LIBOR, with a widening spread based on a nonrated security. The market valuation is derived from a model that utilizes relevant assumptions such as prepayment rate, default rate, and loss severity on a loan level basis. The Corporation modeled the cash flow from the fixed-rate mortgage collateral using a static cash flow analysis according to collateral attributes of the underlying mortgage pool (i.e., loan term, current balance, note rate, rate adjustment type, rate adjustment frequency, rate caps, and others) in combination with prepayment forecasts obtained from a commercially available prepayment model (ADCO). The variable cash flow of the security is modeled using the 3-month LIBOR forward curve. Loss assumptions were driven by the combination of default and loss severity estimates, taking into account loan credit characteristics (loan-to-value, state, origination date, property type, occupancy loan purpose, documentation type, debt-to-income ratio, and other) to provide an estimate of default and loss severity. Refer to the table below for further information regarding qualitative information for all assets and liabilities measured at fair value using significant unobservable inputs (Level 3).

Derivative instruments

The fair value of most of the Corporation's derivative instruments is based on observable market parameters and takes into consideration the credit risk component of paying counterparties, when appropriate, except when collateral is pledged. That is, on interest rate swaps, the credit risk of both counterparties is included in the valuation; and, on options and caps, only the seller's credit risk is considered. The derivative instruments, namely swaps and caps, were valued using a discounted cash flow approach using the related LIBOR and swap rate for each cash flow. Derivatives include interest rate swaps used for protection against rising interest rates. For these interest rate swaps, a credit component was not considered in the valuation since the Corporation has fully collateralized with investment securities any marked-to-market loss with the counterparty and, if there were market gains, the counterparty had to deliver collateral to the Corporation.

Although most of the derivative instruments are fully collateralized, a credit spread is considered for those that are not secured in full. The cumulative mark-to-market effect of credit risk in the valuation of derivative instruments for the quarters ended March 31, 2015 and 2014 was immaterial.

Assets and liabilities measured at fair value on a recurring basis, are summarized below:
	As of March 31, 2015								As of December 31, 2014
	Fair Value Measurements Using								Fair Value Measurements Using
(In thousands)	Level 1		Level 2		Level 3		Assets/Liabilities at Fair Value		Level 1		Level 2		Level 3		Assets/Liabilities at Fair Value
Assets:
Securities available for sale :
U.S. Treasury Securities	$	7,500	$	-	$	-	$	7,500	$	7,499	$	-	$	-	$	7,499
Noncallable U.S. agency debt		-		286,066		-		286,066		-		228,157		-		228,157
Callable U.S. agency debt and MBS		-		1,607,273		-		1,607,273		-		1,653,140		-		1,653,140
Puerto Rico government obligations		-		39,073		2,390		41,463		-		40,658		2,564		43,222
Private label MBS		-		-		31,824		31,824		-		-		33,648		33,648
Other investments held for sale		-		-		100		100		-		-		-		-
Derivatives, included in assets:
Interest rate swap agreements		-		-		-		-		-		33		-		33
Purchased interest rate cap agreements		-		1		-		1		-		6		-		6
Liabilities:
Derivatives, included in liabilities:
Interest rate swap agreements		-		-		-		-		-		33		-		33
Written interest rate cap agreement		-		1		-		1		-		6		-		6
Forward contracts		-		220		-		220		-		148		-		148

The table below presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the quarters ended March 31, 2015 and 2014.

		Total Fair Value Measurements
		Quarter ended March 31,
		2015		2014
Level 3 Instruments Only		Securities		Securities
(In thousands)		Available For Sale(1)		Available For Sale(1)
Beginning balance		$	36,212		43,292
Total gains (losses) (realized/unrealized):
Included in earnings			(156)		-
Included in other comprehensive income			619		964
Held-to-Maturity investment securities reclassified to Available-for-Sale
Sales
Purchases			100		5,123
Principal repayments and amortization			(2,461)		(1,869)
Ending balance		$	34,314	$	47,510
(1)	Amounts mostly related to private label MBS.

The table below presents qualitative information for significant assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at March 31, 2015:
	March 31, 2015
(In thousands)	Fair Value		Valuation Technique	Unobservable Input	Range
Investment securities available-for-sale:
Private label MBS	$	31,824	Discounted cash flow	Discount rate	14.5%
				Prepayment rate	18.04% -100.00% (Weighted Average 32%)
				Projected Cumulative Loss Rate	0.00% -80.00% (Weighted Average 7.3%)
Puerto Rico Government Obligations		2,390	Discounted cash flow	Prepayment speed	2.89%

Information about Sensitivity to Changes in Significant Unobservable Inputs

Private label MBS: The significant unobservable inputs in the valuation include probability of default, the loss severity assumption, and prepayment rates. Shifts in those inputs would result in different fair value measurements. Increases in the probability of default, loss severity assumptions, and prepayments rates in isolation would generally result in an adverse effect on the fair value of the instruments. Meaningful and possible shifts of each input were modeled to assess the effect on the fair value estimation.

Puerto Rico Government Obligations: The significant unobservable input used in the fair value measurement is the assumed prepayment rate. A significant increase (decrease) in the assumed rate would lead to a higher (lower) fair value estimate. Loss severity and probability of default are not included as significant unobservable variables because the notesare guaranteed by the Puerto Rico Housing Finance Authority (“PRHFA”). The PRHFA credit risk is modeled by discounting the cash flows using a curve appropriate to the PRHFA credit rating.

The table below summarizes changes in unrealized gains and losses recorded in earnings for the quarters ended March 31, 2015 and 2014 for Level 3 assets and liabilities that are still held at the end of each period:
		Changes in Unrealized Losses		Changes in Unrealized Losses
		(Quarter ended March 31, 2015)		(Quarter Ended March 31, 2014)
Level 3 Instruments Only	Securities		Securities
(In thousands)	Available For Sale		Available For Sale
Changes in unrealized losses relating to assets still held at reporting date:
Net impairment losses on investment securities (credit component)		$ (156)		$ -

Additionally, fair value is used on a nonrecurring basis to evaluate certain assets in accordance with GAAP. Adjustments to fair value usually result from the application of lower-of-cost or market accounting (e.g., loans held for sale carried at the lower-of-cost or fair value and repossessed assets) or write downs of individual assets (e.g., goodwill, loans).

As of March 31, 2015, impairment or valuation adjustments were recorded for assets recognized at fair value on a non-recurring basis as shown in the following table:
		Carrying value as of March 31, 2015						Losses recorded for the Quarter Ended March 31, 2015
		Level 1		Level 2		Level 3
			(In thousands)
Loans receivable (1)		$	-	$	-	$	436,944	$	(13,725)
Other Real Estate Owned (2)			-		-		122,628		(2,711)
Mortgage servicing rights (3)			-		-		22,973		(38)
Loans Held For Sale (4)			-		-		54,588		-
(1)	Mainly impaired commercial and construction loans. The impairment was generally measured based on the fair value of the collateral. The fair values were derived from external appraisals that take into consideration prices in observed transactions involving similar assets in similar locations but adjusted for specific characteristics and assumptions of the collateral (e.g., absorption rates), which are not market observable.
(2)	The fair value was derived from appraisals that take into consideration prices in observed transactions involving similar assets in similar locations but adjusted for specific characteristics and assumptions of the properties (e.g., absorption rates and net operating income of income producing properties), which are not market observable. Losses were related to market valuation adjustments after the transfer of the loan to the OREO portfolio.
(3)	Fair value adjustments to mortgage servicing rights were mainly due to assumptions associated with mortgage prepayment rates. The Corporation carries its mortgage servicing rights at the lower of cost or market, measured at fair value on a non-recurring basis. Assumptions for the value of mortgage servicing rights included: Prepayment rate-10.25%, Discount Rate-10.62%.
(4)	The value of these loans was derived from external appraisals, adjusted for specific characteristics of the loans, and, for loans with signed sale agreements, the value was determined based on the sales price in such agreements.

As of March 31, 2014, impairment or valuation adjustments were recorded for assets recognized at fair value on a non-recurring basis as shown in the following table:
		Carrying value as of March 31, 2014						(Losses) Gain recorded for the Quarter Ended March 31, 2014
		Level 1		Level 2		Level 3
		(In thousands)
Loans receivable (1)		$	-	$	-	$	478,393	$	(23,793)
Other Real Estate Owned (2)			-		-		138,622		(4,747)
Mortgage servicing rights (3)			-		-		22,026		(219)
Loans Held For Sale (4)			-		-		54,755		-
(1)	Mainly impaired commercial and construction loans. The impairment was generally measured based on the fair value of the collateral. The fair values were derived from external appraisals that take into consideration prices in observed transactions involving similar assets in similar locations but adjusted for specific characteristics and assumptions of the collateral (e.g. absorption rates), which are not market observable.
(2)	The fair value was derived from appraisals that take into consideration prices in observed transactions involving similar assets in similar locations but adjusted for specific characteristics and assumptions of the properties (e.g., absorption rates and net operating income of income producing properties), which are not market observable. Losses were related to market valuation adjustments after the transfer of the loan to the OREO portfolio.
(3)	Fair value adjustments to the mortgage servicing rights were mainly due to assumptions associated with mortgage prepayments rates. The Corporation carries its mortgage servicing rights at the lower-of-cost or market, measured at fair value on a non-recurring basis. Assumptions for the value of mortgage servicing rights included: Prepayment Rate-9.10%, Discount Rate-10.61%.
(4)	The value of these loans was derived from external appraisals, adjusted for specific characteristics of the loans, and, for loans with signed sale agreements, the value was determined based on the sales price in such agreements.

Qualitative information regarding the fair value measurements for Level 3 financial instruments is as follows:
	March 31, 2015
	Method	Inputs
Loans	Income, Market, Comparable Sales, Discounted Cash Flows	External appraised values; probability weighting of broker price opinions; management assumptions regarding market trends or other relevant factors
OREO	Income, Market, Comparable Sales, Discounted Cash Flows	External appraised values; probability weighting of broker price opinions; management assumptions regarding market trends or other relevant factors
Mortgage servicing rights	Discounted Cash Flow	Weighted average prepayment rate of 10.25%; weighted average discount rate of 10.62%

The following is a description of the valuation methodologies used for instruments that are not measured or reported at fair value on a recurring basis or reported at fair value on a non-recurring basis. The estimated fair value was calculated using certain facts and assumptions, which vary depending on the specific financial instrument.

Cash and due from banks and money market investments

The carrying amounts of cash and due from banks and money market investments are reasonable estimates of their fair value. Money market investments include held-to-maturity securities, which have a contractual maturity of three months or less. The fair value of these securities is based on quoted market prices in active markets that incorporate the risk of nonperformance.

Other equity securities

Equity or other securities that do not have a readily available fair value are stated at their net realizable value, which management believes is a reasonable proxy for their fair value. This category is principally composed of stock that is owned by the Corporation to comply with FHLB regulatory requirements. The realizable value of the FHLB stock equals its cost as this stock can be freely redeemed at par.

Loans receivable, including loans held for sale

The fair value of loans held for investment and of mortgage loans held for sale was estimated using discounted cash flow analyses, based on interest rates currently being offered for loans with similar terms and credit quality and with adjustments that the Corporation's management believes a market participant would consider in determining fair value. Loans were classified by type, such as commercial, residential mortgage, and automobile. These asset categories were further segmented into fixed- and adjustable-rate categories. Valuations are carried out based on categories and not on a loan-by-loan basis. The fair values of performing fixed-rate and adjustable-rate loans were calculated by discounting expected cash flows through the estimated maturity date. This fair value is not currently an indication of an exit price as that type of assumption could result in a different fair value estimate. The fair value of credit card loans was estimated using a discounted cash flow method and excludes any value related to a customer account relationship. Other loans with no stated maturity, like credit lines, were valued at book value. Prepayment assumptions were considered for non-residential loans. For residential mortgage loans, prepayment estimates were based on a prepayments model that combined both a historical calibration and current market prepayment expectations. Discount rates were based on the U.S. Treasury and LIBOR/Swap Yield Curves at the date of the analysis, and included appropriate adjustments for expected credit losses and liquidity. For impaired collateral dependent loans, the impairment was primarily measured based on the fair value of the collateral, which is derived from appraisals that take into consideration prices in observable transactions involving similar assets in similar locations.The market valuation of the loans acquired from Doral Bank in the first quarter of 2015 was derived from a model of forecasted cash flows that uses market-driven assumptions such as prepayment rate, default rate, and loss severity on a loan level basis. The forecasted cash flows are then discounted by yields observed in sales of similar portfolios in Puerto Rico and the continental U.S. 

Deposits

The estimated fair value of demand deposits and savings accounts, which are deposits with no defined maturities, equals the amount payable on demand at the reporting date. The fair values of retail fixed-rate time deposits, with stated maturities, are based on the present value of the future cash flows expected to be paid on the deposits. The cash flows were based on contractual maturities; no early repayments were assumed. Discount rates were based on the LIBOR yield curve.

The estimated fair value of total deposits excludes the fair value of core deposit intangibles, which represents, the value of the customer relationship measured by the value of demand deposits and savings deposits that bear a low or zero rate of interest and do not fluctuate in response to changes in interest rates.

The fair value of brokered CDs, which are included within deposits, is determined using discounted cash flow analyses over the full term of the CDs. The fair value of the CDs is computed using the outstanding principal amount. The discount rates used were based on brokered CD market rates as of March 31, 2015. The fair value does not incorporate the risk of nonperformance, since interests in brokered CDs are generally sold by brokers in amounts of less than $250,000 and, therefore, are insured by the FDIC.

Securities sold under agreements to repurchase

Some repurchase agreements reprice at least quarterly, and their outstanding balances are estimated to be their fair value. Where longer commitments are involved, fair value is estimated using exit price indications of the cost of unwinding the transactions as of the end of the reporting period. The brokers who are the counterparties provide these indications. Securities sold under agreements to repurchase are fully collateralized by investment securities.

Advances from FHLB

The fair value of advances from FHLB with fixed maturities is determined using discounted cash flow analyses over the full term of the borrowings, using indications of the fair value of similar transactions. The cash flows assume no early repayment of the borrowings. Discount rates are based on the LIBOR yield curve. Advances from FHLB are fully collateralized by mortgage loans and, to a lesser extent, investment securities.

Other borrowings

Other borrowings consist of junior subordinated debentures. Projected cash flows from the debentures were discounted using the Bloomberg BB Finance curve plus a credit spread. This credit spread was estimated using the difference in yield curves between swap rates and a yield curve that considers the industry and credit rating of the Corporation as issuer of the note at a tenor comparable to the time to maturity of the debentures.

The following table presents the estimated fair value and carrying value of financial instruments as of March 31, 2015 and December 31, 2014
	Total Carrying Amount in Statement of Financial Condition March 31, 2015		Fair Value Estimated March 31, 2015		Level 1		Level 2		Level 3
	(In thousands)
Assets:
Cash and due from banks and money
market investments	$	984,436	$	984,436	$	984,436	$	-	$	-
Investment securities available
for sale		1,974,226		1,974,226		7,500		1,932,412		34,314
Other equity securities		26,185		26,185		-		26,185		-
Loans held for sale		81,723		82,942		-		28,301		54,641
Loans held for investment		9,485,372
Less: allowance for loan and lease losses		(226,064)
Loans held for investment, net of allowance	$	9,259,308		9,115,707		-		-		9,115,707
Derivatives, included in assets		1		1		-		1		-
Liabilities:
Deposits		9,841,038		9,852,630		-		9,852,630		-
Securities sold under agreements to repurchase		900,000		966,365		-		966,365		-
Advances from FHLB		325,000		326,087		-		326,087		-
Other borrowings		231,959		169,935		-		-		169,935
Derivatives, included in liabilities		221		221		-		221		-

	Total Carrying Amount in Statement of Financial Condition December 31, 2014		Fair Value Estimated December 31, 2014		Level 1		Level 2		Level 3
	(In thousands)
Assets:
Cash and due from banks and money
market investments	$	796,108	$	796,108	$	796,108	$	-	$	-
Investment securities available
for sale		1,965,666		1,965,666		7,499		1,921,955		36,212
Other equity securities		25,752		25,752		-		25,752		-
Loans held for sale		76,956		77,888		-		23,247		54,641
Loans held for investment		9,262,436
Less: allowance for loan and lease losses		(222,395)
Loans held for investment, net of allowance	$	9,040,041		8,844,659		-		-		8,844,659
Derivatives, included in assets		39		39		-		39		-
Liabilities:
Deposits		9,483,945		9,486,325		-		9,486,325		-
Securities sold under agreements to repurchase		900,000		958,715		-		958,715		-
Advances from FHLB		325,000		324,376		-		324,376		-
Other borrowings		231,959		162,344		-		-		162,344
Derivatives, included in liabilities		187		187		-		187		-

XML

OTHER REAL ESTATE OWNED- Additional information (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2015
Other Real Estate And Foreclosed Assets [Abstract]
Transfers From Loans to Other Receivable	$ 0.2

XML

BUSINESS COMBINATION- Business Combination (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Assets [Abstract]
Fair Value Of Assets Acquired	$ 540,339
Liabilities [Abstract]
Business Combination Bargain Purchase Gain Recognized Amount	13,443	0
Deposits [Member]
Liabilities [Abstract]
Liabilities Assumed1	523,517	0
Other Liabilities [Member]
Liabilities [Abstract]
Liabilities Assumed1	3,379
Core Deposits [Member]
Assets [Abstract]
Fair Value Of Assets Acquired	5,820	0
Property Plant And Equipment [Member]
Assets [Abstract]
Fair Value Of Assets Acquired	5,450	0
Cash [Member]
Assets [Abstract]
Fair Value Of Assets Acquired	217,659
Loans [Member]
Assets [Abstract]
Business Combination Acquired Receivables Fair Value	311,410
Fair Value Of Assets Acquired	$ 311,410	$ 0

XML

OFFSETTING OF ASSETS AND LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2015

Text Block [Abstract]

Offsetting of assets and liabilties

Offsetting of Financial Assets and Derivative Assets
In thousands
As of March 31, 2015
							Gross Amounts Not Offset in the Statement of Financial Position
					Net Amounts of Assets Presented in the Statement of Financial Position
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position
									Financial Instruments		Cash Collateral Received
													Net Amount
Description
Derivatives	$	1	$	-	$	1	$	(1)	$	-	$	-
As of December 31, 2014
							Gross Amounts Not Offset in the Statement of Financial Position
					Net Amounts of Assets Presented in the Statement of Financial Position
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position
									Financial Instruments		Cash Collateral
													Net Amount
Description
Derivatives	$	6	$	-	$	6	$	(6)	$	-	$	-

Offsetting of Financial Liabilities and Derivative Liabilities
In thousands
As of March 31, 2015
							Gross Amounts Not Offset in the Statement of Financial Position
					Net Amounts of Liabilities Presented in the Statement of Financial Position
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position
									Financial Instruments		Cash Collateral Received
													Net Amount
Description
Repurchase agreements		600,000		-		600,000		(600,000)		-		-
Total	$	600,000	$	-	$	600,000	$	(600,000)	$	-	$	-
As of December 31, 2014
							Gross Amounts Not Offset in the Statement of Financial Position
					Net Amounts of Liabilities Presented in the Statement of Financial Position
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position
									Financial Instruments		Cash Collateral
													Net Amount
Description
Derivatives	$	33	$	-	$	33	$	(33)	$	-	$	-
Repurchase agreements		600,000		-		600,000		(600,000)		-		-
Total	$	600,033	$	-	$	600,033	$	(600,033)	$	-	$	-

XML

SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2015

SEGMENT INFORMATION

NOTE 23 – SEGMENT INFORMATION

Based upon the Corporation's organizational structure and the information provided to the Chief Executive Officer of the Corporation and, to a lesser extent, the Board of Directors, the operating segments are driven primarily by the Corporation's lines of business for its operations in Puerto Rico, the Corporation's principal market, and by geographic areas for its operations outside of Puerto Rico. As of March 31, 2015, the Corporation had six reportable segments: Commercial and Corporate Banking; Mortgage Banking; Consumer (Retail) Banking; Treasury and Investments; United States Operations, and Virgin Islands Operations. Management determined the reportable segments based on the internal reporting used to evaluate performance and to assess where to allocate resources. Other factors such as the Corporation's organizational chart, nature of the products, distribution channels, and the economic characteristics of the product were also considered in the determination of the reportable segments.

The Commercial and Corporate Banking segment consists of the Corporation's lending and other services for large customers represented by specialized and middle-market clients and the public sector. The Commercial and Corporate Banking segment offers commercial loans, including commercial real estate and construction loans, and floor plan financings, as well as other products, such as cash management and business management services. The Mortgage Banking segment consists of the origination, sale, and servicing of a variety of residential mortgage loans. The Mortgage Banking segment also acquires and sells mortgages in the secondary markets. In addition, the Mortgage Banking segment includes mortgage loans purchased from other local banks and mortgage bankers. The Consumer (Retail) Banking segment consists of the Corporation's consumer lending and deposit-taking activities conducted mainly through its branch network and loan centers. The Treasury and Investments segment is responsible for the Corporation's investment portfolio and treasury functions executed to manage and enhance liquidity. This segment lends funds to the Commercial and Corporate Banking, Mortgage Banking and Consumer (Retail) Banking segments to finance their lending activities and borrows from those segments and from the United States Operations segment. The Consumer (Retail) Banking and the United States Operations segments also lend funds to other segments. The interest rates charged or credited by Treasury and Investments, the Consumer (Retail) Banking and the United States Operations segments are allocated based on market rates. The difference between the allocated interest income or expense and the Corporation's actual net interest income from centralized management of funding costs is reported in the Treasury and Investments segment. The United States Operations segment consists of all banking activities conducted by FirstBank in the United States mainland, including commercial and retail banking services. The Virgin Islands Operations segment consists of all banking activities conducted by the Corporation in the USVI and BVI, including commercial and retail banking services.

The accounting policies of the segments are the same as those referred to in Note 1- “Nature of Business and Summary of Significant Accounting Policies,” in the audited consolidated financial statements of the Corporation for the year ended December 31, 2014, which are included in the Corporation's 2014 Annual Report on Form 10-K.

The Corporation evaluates the performance of the segments based on net interest income, the estimated provision for loan and lease losses, non-interest income, and direct non-interest expenses. The segments are also evaluated based on the average volume of their interest-earning assets less the allowance for loan and lease losses.

The following table presents information about the reportable segments:
(In thousands)	Mortgage Banking		Consumer (Retail) Banking		Commercial and Corporate		Treasury and Investments		United States Operations		Virgin Islands Operations		Total
For the quarter ended March 31, 2015:
Interest income	$	33,876	$	49,836	$	34,803	$	13,067	$	11,231	$	9,672	$	152,485
Net (charge) credit for transfer of funds		(11,236)		3,684		(3,795)		7,754		3,593		-		-
Interest expense		-		(5,657)		-		(16,007)		(4,339)		(835)		(26,838)
Net interest income		22,640		47,863		31,008		4,814		10,485		8,837		125,647
(Provision) release for loan and lease losses		(6,963)		(16,685)		(9,093)		-		2,133		(2,362)		(32,970)
Non-interest income		3,399		12,417		524		(100)		524		2,522		19,286
Direct non-interest expenses		(8,065)		(31,559)		(7,979)		(1,339)		(7,183)		(8,580)		(64,705)
Segment income	$	11,011	$	12,036	$	14,460	$	3,375	$	5,959	$	417	$	47,258
Average earnings assets	$	2,492,247	$	2,045,277	$	3,028,358	$	2,764,058	$	971,887	$	639,162	$	11,940,989
(In thousands)	Mortgage Banking		Consumer (Retail) Banking		Commercial and Corporate		Treasury and Investments		United States Operations		Virgin Islands Operations		Total
For the quarter ended March 31, 2014:
Interest income	$	25,748	$	55,812	$	42,299	$	15,583	$	10,896	$	10,233	$	160,571
Net (charge) credit for transfer of funds		(8,546)		3,635		(2,999)		5,800		2,110		-		-
Interest expense		-		(6,796)		-		(16,761)		(4,797)		(897)		(29,251)
Net interest income		17,202		52,651		39,300		4,622		8,209		9,336		131,320
(Provision) release for loan and lease losses		(3,384)		(20,495)		(13,345)		-		5,959		(650)		(31,915)
Non-interest income (loss)		3,102		10,630		1,767		53		441		1,967		17,960
Direct non-interest expenses		(9,832)		(32,015)		(12,578)		(1,126)		(7,220)		(9,024)		(71,795)
Segment income	$	7,088	$	10,771	$	15,144	$	3,549	$	7,389	$	1,629	$	45,570
Average earnings assets	$	1,955,990	$	2,006,395	$	3,921,439	$	2,710,930	$	846,152	$	655,568	$	12,096,474

The following table presents a reconciliation of the reportable segment financial information to the consolidated totals:
		Quarter Ended
		March 31,
		2015		2014
Net income:
Total income for segments and other		$	47,258	$	45,570
Other non-interest gain (loss) (1)			13,443		(6,610)
Other operating expenses (2)			(27,023)		(20,990)
Income before income taxes			33,678		17,970
Income tax expense			(8,032)		(887)
Total consolidated net income		$	25,646	$	17,083
Average assets:
Total average earning assets for segments		$	11,940,989	$	12,096,474
Other average earning assets (1)			-		6,570
Average non-earning assets			934,999		671,146
Total consolidated average assets		$	12,875,988	$	12,774,190
(1)	The bargain purchase gain on the acquisition of assets and assumption of deposits from Doral Bank in 2015 as well as the activities related to the Bank's equity interest in CPG/GS are presented as an Other non-interest income (loss) and the investment in CPG/GS is presented as Other average earning assets in the tables above.
(2)	Expenses pertaining to corporate administrative functions that support the operating segment but are not specifically attributable to or managed by any segment are not included in the reported financial results of the operating segments. The unallocated corporate expenses include certain general and administrative expenses and related depreciation and amortization expenses.

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REGULATORY MATTERS, COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2015

REGULATORY MATTERS, COMMITMENTS AND CONTINGENCIES

NOTE 24 – REGULATORY MATTERS, COMMITMENTS AND CONTINGENCIES

The Corporation is subject to various regulatory capital requirements imposed by the federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material adverse effect on the Corporation's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Corporation must meet specific capital guidelines that involve quantitative measures of the Corporation's assets and liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Corporation's capital amounts and classification are also subject to qualitative judgment and adjustment by the regulators with respect to minimum capital requirements, components, risk weightings, and other factors.

FirstBank received notification from the FDIC that the Consent Order under which the Bank had been operating since June 2, 2010 was terminated effective April 29, 2015.  Although the Consent Order has been terminated, First BanCorp. is still subject to the Written Agreement that the Corporation entered with the Federal Reserve Bank of New York on June 3, 2010.

The Written Agreement provides, among other things, that the holding company must serve as a source of strength to FirstBank, and that, except with the consent generally of the New York FED and Federal Reserve Board, (1) the holding company may not pay dividends to stockholders or receive dividends from FirstBank, (2) the holding company and its nonbank subsidiaries may not make payments on trust-preferred securities or subordinated debt, and (3) the holding company cannot incur, increase, or guarantee debt or repurchase any capital securities. The Written Agreement also requires that the holding company submit a capital plan that reflects sufficient capital at First BanCorp. on a consolidated basis, which must be acceptable to the New York FED, and follow certain guidelines with respect to the appointment or change in responsibilities of senior officers. The foregoing summary is not complete and is qualified in all respects by reference to the actual language of the Written Agreement.

The Corporation submitted its Capital Plan setting forth its plans for how to improve capital positions to comply with the Written Agreement over time. In addition to the Capital Plan, the Corporation submitted to its regulators a liquidity and brokered CD plan, including a contingency funding plan, a non-performing asset reduction plan, a budget and profit plan, a strategic plan, and a plan for the reduction of classified and special mention assets. As of March 31, 2015, the Corporation had completed all of the items included in the Capital Plan and is continuing to work on reducing non-performing loans. The Written Agreement also requires the submission to the regulators of quarterly progress reports.

In July 2013, the U.S. banking regulators approved a revised regulatory capital framework for U.S. banking organizations (the “Basel III rules”) that is based on international regulatory capital requirements adopted by the Basel Committee on Banking Supervision over the past several years. The Basel III rules introduce new minimum capital ratios and capital conservation buffer requirements, change the composition of regulatory capital, require a number of new adjustments to and deductions from regulatory capital, and introduce a new “Standardized Approach” for the calculation of risk-weighted assets. The new minimum regulatory capital requirements and the Standardized Approach for the calculation of risk-weighted assets became effective for the Corporation and FirstBank on January 1, 2015. The phase-in period for certain deductions and adjustments to regulatory capital began on January 1, 2015 and will be completed on January 1, 2018.The phase-in period for the capital conservation buffer requirements begins on January1, 2016 and will be completed on January 1, 2019.

The Basel III rules introduce a new and separate ratio of Common Equity Tier 1 capital (“CET1”) to risk-weighted assets. CET1, a narrower subcomponent of total Tier 1 capital, generally consists of common stock and related surplus, retained earnings, accumulated other comprehensive income (“AOCI”), and qualifying minority interests.Certain banking organizations, however, including the Corporation and FirstBank, were allowed to make a one-time permanent election in early 2015 to continue to exclude AOCI items. The Corporation and FirstBank haveelected to permanently exclude capital in AOCI in order to avoid significant variations in the level of capital depending upon the impact of interest rate fluctuations on the fair value of the securities portfolio. In addition, the Basel III rules require the Corporation to maintain an additional CET1 capital conservation buffer of 2.5%. The capital conservation buffer must be maintained to avoid limitations on both (i) capital distributions (e.g. repurchases of capital instruments or dividend or interest payments on capital instruments), and (ii) discretionary bonus payments to executive officers and heads of major business lines. Under the fully phased-in rules, the Corporation will be required to maintain: (i) a minimum CET1 to risk-weighted assets ratio of at least 4.5%, plus the 2.5% “capital conservation buffer,” resulting in a required minimum CET1 ratio of at least 7%, (ii) a minimum ratio of total Tier 1 capital to risk-weighted assets of at least 6.0%, plus the 2.5% capital conservation buffer, resulting in a required minimum Tier 1 capital ratio of 8.5%, (iii) a minimum ratio of total Tier 1 plus Tier 2 capital to risk-weighted assets of at least 8.0%, plus the 2.5% capital conservation buffer, resulting in a required minimum total capital ratio of 10.5%, and (iv) a required minimum leverage ratio of 4%, calculated as the ratio of Tier 1 capital to average on-balance sheet(non-risk adjusted) assets. The phase-in of the capital conservation buffer will begin on January 1, 2016 with a first year requirement of 0.625% of additional CET1, which will be progressively increased over a four-year period, increasing by that same percentage amount on each subsequent January 1 until it reaches the fullyphased-in 2.5% CET1 requirement on January 1, 2019.

In addition, the Basel III rules require a number of new deductions from and adjustments to CET1, including deductions from CET1 for certain intangible assets, and deferred tax assets dependent upon future taxable income; the four-year phase-in period for these adjustments generally began on January 1, 2015.Mortgage servicing assets and deferred tax assets attributable to temporary differences, among others, are required to be deducted to the extent that any one such category exceeds 10% of CET1 or all such categories in the aggregate exceed 15% of CET1.

In addition, the Federal Reserve Board'sBasel III rules require that certain non-qualifying capital instruments, including cumulative preferred stock and trust preferred securities (“TRuPs”), be excluded from Tier 1 capital. In general, banking organizations such as the Corporation began to phase out TRuPs from Tier 1 capital on January 1, 2015. The Corporation is allowed to include 25% of the $225 million outstanding qualifying TRuPs as Tier 1 capital in 2015 and the TRuPs must be fully phased out from Tier 1 capital by January 1, 2016. However, the Corporation's TRuPs may continue to be included in Tier 2 capital until the instruments are redeemed or mature.

The Basel III rules also revise the “prompt corrective action” (“PCA”) regulations that apply to depository institutions, including FirstBank, pursuant to Section 38 of the Federal Deposit Insurance Act by (i) introducing a separate CET1 ratio requirement for each PCA capital category (other than critically undercapitalized) with the required CET1 ratio being 6.5% for well-capitalized status; (ii) increasing the minimum Tier 1 capital ratio requirement for each PCA capital category with the minimum Tier 1 capital ratio for well-capitalized status being 8% (as compared to the previous 6%); and (iii) eliminating the provision that allowed a bank with a composite supervisory rating of 1 to have a 3% leverage ratio and still be adequately capitalized and maintaining the minimum leverage ratio for well-capitalized status at 5%. The Basel III rules do not change the total risk-based capital requirement (10% for well-capitalized status) for any PCA capital category. The new PCA requirements became effective on January 1, 2015.

The Corporation and FirstBank compute risk weighted assets using the Standardized Approach required by the Basel III rules. TheStandardized Approachfor risk-weightings has expanded the risk-weighting categories from the four major risk-weighting categories under the previous regulatory capital rules (0%, 20%, 50%, and 100%) to a much larger and more risk-sensitive number of categories, depending on the nature of the assets. In a number of cases, the Standardized Approach results in higher risk weights for a variety of asset categories. Specific changes to the risk-weightings of assets include, among other things: (i) applying a 150% risk weight instead of a 100% risk weight for certain highvolatility commercial real estate acquisition, development and construction loans, (ii) assigning a 150% risk weight to exposures that are 90 days past due (other than qualifying residential mortgage exposures, which remain at an assigned risk-weighting of 100%), (iii) establishing a 20% credit conversion factor for the unused portion of a commitment with an original maturity of one year or less that is not unconditionally cancellable, in contrast to the 0% risk-weighting under the prior rules and (iv) capital is required to cover the risk of unexpected losses due to failure of a customer or counterparty to meet its financial obligations in accordance with contractual terms (repo-style transactions).

	The Corporation's and its banking subsidiary's regulatory capital positions as of March 31, 2015 and December 31, 2014 were as follows:
		Regulatory Requirements
		Actual			For Capital Adequacy Purposes			To be Well-Capitalized-Regular Thresholds
		Amount		Ratio	Amount		Ratio	Amount		Ratio
		(Dollars in thousands)
As of March 31, 2015 (Basel III)
Total Capital (to
Risk-Weighted Assets)
First BanCorp.		$	1,828,253	19.20%	$	761,694	8%		N/A	N/A
FirstBank		$	1,798,122	18.89%	$	761,410	8%	$	951,763	10%
Common Equity Tier 1 Capital
(to Risk-Weighted Assets)
First BanCorp.		$	1,537,862	16.15%	$	428,453	4.5%		N/A	N/A
FirstBank		$	1,486,508	15.62%	$	428,293	4.5%	$	618,646	6.5%
Tier I Capital (to
Risk-Weighted Assets)
First BanCorp.		$	1,537,862	16.15%	$	571,271	6%		N/A	N/A
FirstBank		$	1,676,525	17.61%	$	571,058	6%	$	761,410	8%
Leverage ratio
First BanCorp.		$	1,537,862	12.16%	$	505,698	4%		N/A	N/A
FirstBank		$	1,676,525	13.28%	$	505,036	4%	$	631,295	5%
As of December 31, 2014 (Basel I)
Total Capital (to
Risk-Weighted Assets)
First BanCorp.		$	1,748,120	19.70%	$	709,723	8%		N/A	N/A
FirstBank		$	1,717,432	19.37%	$	709,395	8%	$	886,744	10%
Tier I Capital (to
Risk-Weighted Assets)
First BanCorp.		$	1,636,004	18.44%	$	354,861	4%		N/A	N/A
FirstBank		$	1,605,367	18.10%	$	354,698	4%	$	532,046	6%
Leverage ratio
First BanCorp.		$	1,636,004	13.27%	$	493,159	4%		N/A	N/A
FirstBank		$	1,605,367	13.04%	$	492,468	4%	$	615,585	5%

The Corporation enters into financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments may include commitments to extend credit and commitments to sell mortgage loans at fair value. As of March 31, 2015, commitments to extend credit amounted to approximately $1.1billion, of which $645.6million relates to credit card loans. Commercial and Financial standby letters of credit amounted to approximately $44.5million. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any conditions established in the contract. Commitments generally have fixed expiration dates or other termination clauses. Since certain commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. For most of the commercial lines of credit, the Corporation has the option to reevaluate the agreement prior to additional disbursements. In the case of credit cards and personal lines of credit, the Corporation can cancel the unused credit facility at any time and without cause. Generally, the Corporation's mortgage banking activities do not enter into interest rate lock agreements with prospective borrowers.

As of March 31, 2015, First BanCorp. and its subsidiaries were defendants in various legal proceedings arising in the ordinarycourse of business. Management believes that the final disposition of these matters, to the extent not previously provided for, will not have a material adverse effect, individually or in the aggregate, on the Corporation's financial position, results of operations or cash flows.

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2015

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The Consolidated Financial Statements (unaudited) of First BanCorp. (“the Corporation”) have been prepared in conformity with the accounting policies stated in the Corporation's Audited Consolidated Financial Statements included in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2014. Certain information and note disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been condensed or omitted from these statements pursuant to the rules and regulations of the SEC and, accordingly, these financial statements should be read in conjunction with the Audited Consolidated Financial Statements of the Corporation for the year ended December 31, 2014, which are included in the Corporation's 2014 Annual Report on Form 10-K. All adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the statement of financial position, results of operations and cash flows for the interim periods have been reflected. All significant intercompany accounts and transactions have been eliminated in consolidation.

The results of operations for the quarter ended March 31, 2015 are not necessarily indicative of the results to be expected for the entire year.

Adoption of new accounting requirements and recently issued but not yet effective accounting requirements

The Financial Accounting Standards Board (“FASB”) has issued the following accounting pronouncements and guidance relevant to the Corporation's operations:

In January 2014, the FASB updated the Accounting Standards Codification (the “Codification”) to clarify when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan so that the loan should be derecognized and the real estate property recognized in the financial statements. The Update clarifies that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan upon either: (i) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure, or (ii) the borrower conveying all interest in the residential real estate property to the creditor to satisfy the loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. In addition, creditors are required to disclose on an annual and interim basis both (i) the amount of the foreclosed residential real estate property held and (ii) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments are effective for public business entities for annual periods beginning after December 15, 2014, and interim periods within those fiscal years. Early adoption is permitted. The guidance can be implemented using either a modified retrospective transition method or a prospective transition method. The Corporation adopted the provisions of this guidance on a prospective basis during the first quarter of 2015 without any material impact on the Corporation's financial statements. Refer to Notes 7 and 10 for required disclosures.

In May 2014, the FASB updated the Codification to create a new, principle-based revenue recognition framework. The Update is the culmination of efforts by the FASB and the International Accounting Standards Board to develop a common revenue standard for U.S. GAAP and International Financial Reporting Standards. The core principal of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance describes a 5-step process entities can apply to achieve the core principle of revenue recognition and requires disclosures sufficient to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers and the significant judgments used in determining that information. The amendments are expect to become effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those reporting periods, as a result of the FASB's recent issuance of a proposal to defer the effective date of the standard by one year. Early adoption is not permitted. The Corporation is currently evaluating the impact that the adoption of this guidance will have on the presentation and disclosures in its financial statements.

In June 2014, the FASB updated the Codification to respond to stakeholders' concerns about current accounting and disclosures for repurchase agreements and similar transactions. This Update requires two accounting changes. First, the Update changes the accounting for repurchase-to-maturity transactions to secured borrowing accounting. Second, for repurchase financing arrangements, the Update requires separate accounting for a transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counterparty, which will result in secured borrowing accounting for the repurchase agreement. Additionally, the Update introduces new disclosures to (i) increase transparency about the types of collateral pledged in secured borrowing transactions and (ii) enable users to better understand transactions in which the transferor retains substantially all of the exposure to the economic return on the transferred financial asset throughout the term of the transaction. For public business entities, the disclosure for repurchase agreements, securities lending transactions, and repurchase-to-maturity transactions accounted for as secured borrowings is required to be presented for annual periods beginning after December 15, 2014, and for interim periods beginning after March 15, 2015. All other accounting and disclosure amendments in the Update are effective for public business entities for the first interim or annual period beginning after December 15, 2014. The adoption of this guidance did not have a material effect on the Corporation's financial statements.

In June 2014, the FASB updated the Codification to provide guidance for determining compensation cost under specific circumstances when an employee's compensation award is eligible to vest regardless of whether the employee is rendering service on the date the performance target is achieved. This Update becomes effective for annual and interim periods beginning after December 15, 2015 with early adoption permitted. The Corporation is currently evaluating the impact that the adoption of this guidance will have on the presentation and disclosures in its financial statements, if any.

In August 2014, the FASB updated the Codification to reduce the diversity found in the classification of certain foreclosed mortgage loans held by creditors that are either fully or partially guaranteed under government programs. Consistency in classification upon foreclosure is expected in order to provide more decision-useful information. The amendments in this Update require that a mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if: (i) the loan has a government guarantee that is not separable from the loan before foreclosure; (ii) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under the claim, and (iii) at the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. Upon foreclosure, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. The Update is effective for public business entities for annual periods, and interim periods within those annual periods beginning after December 15, 2014. The guidance can be implemented using either a prospective transition method or a modified retrospective transition method. The Corporation adopted the provisions of this guidance on a prospective basis during the first quarter of 2015 without any material impact on the Corporation's financial statements.

In August 2014, the FASB updated the Codification to provide guidance in GAAP about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. Management's evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. If conditions or events raise substantial doubt about an entity's ability to continue as a going concern, but the substantial doubt is alleviated as a result of consideration of management's plans, the entity should disclose information that enables users of the financial statements to understand such determination.The Update is effective for all business entities for annual periods ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Corporation expects the adoption of this guidance will have no impact on the Corporation's financial position, results of operations, comprehensive income, cash flows and disclosures.

In November 2014, the FASB updated the Codification to clarify how current GAAP should be interpreted in evaluating the economic characteristics and risk of a host contract in a hybrid financial instrument that is issued in the form of a share. In addition, the Update was issued to clarify that, in evaluating the nature of a host contract, an entity should assess the substance of the relevant terms and features (that is, the relative strength of the debt-like or equity-like terms and features given the facts and circumstances) when considering how to weight those terms and features. The effects of initially adopting this Update should be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are effective. Retrospective application is permitted to all relevant prior periods. This Update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption in an interim period is permitted. The Corporation is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements, if any.

In January 2015, the FASB updated the Codification to eliminate from GAAP the concept of extraordinary items as part of its initiative to reduce complexity in accounting standards (the Simplification Initiative).Under current GAAP, an event or transaction is presumed to be an ordinary and usual activity of the reporting entity unless evidence clearly supports its classification as an extraordinary item. In order to be classified as an extraordinary item, the event or transaction must be: (i) unusual in nature, and (ii) infrequent in occurrence. Before the update was issued, an entity was required to segregate these items from the results of ordinary operations and show the items separately in the income statement, net of tax, after income from continuing operations. This Update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption in an interim period is permitted. The Corporation expects the adoption of this guidance will have no impact on the Corporation's consolidated financial statements.

In February 2015, the FASB updated the Codification to eliminate the deferral of FAS 167, which has allowed reporting entities with interests in certain investment funds to follow the previous consolidation guidance in FIN 46(R), and to make other changes to both the variable interest model and the voting model. While the Update is aimed at asset managers, it will affect all reporting entities involved with limited partnerships or similar entities. In some cases, consolidation conclusions will change. In other cases, reporting entities will need to provide additional disclosure about entities that currently are not considered VIEs but will be considered VIEs under the new guidance when they have a variable interest in those VIEs. Regardless of whether conclusions change or additional disclosure requirements are triggered, reporting entities will need to re-evaluate limited partnerships or similar entities for consolidation and revise their documentation.For public business entities, the Update is effective for annual and interim periods beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. A reporting entity must apply the amendments retrospectively. The Corporation is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements, if any.

In April 2015, the FASB updated the Codification to clarifythat customers should determine whether a cloud computing arrangement includes the license of software by applying the same guidance cloud service providers use to make this determination. Examples of cloud computing arrangements include software as a service, platform as a service, infrastructure as a service and other hosting arrangements. If a hosting arrangement includes a software license for internal use software, the software license should be accounted for by the customer under ASC 350-40. A license of software other than internal use software would be accounted for by the customer under other U.S. GAAP (e.g., a research and development cost and software to be sold, leased or otherwise marketed). If a hosting arrangement includes a software licenses, then that would be in addition to any service contract in the arrangement. Hosting arrangements that do not include software licenses should be accounted for as service contracts. The Update also eliminates the existing requirement for customers to account for software licenses they acquire by analogizing to the guidance on leases. Instead,customers will account for software licenses that are in the scope of ASC350-40 in the same manner as licenses of other intangible assets. Entities have the option of applying the guidance (1) prospectively to all arrangements entered into or materially modified after the effective date or (2) retrospectively. Entities that elect prospective application are required to disclose the reason for the change in accounting principle, the transition method, and a description of the financial statement line items affected by the change. Entities that elect retrospective application must disclose the information required by ASC 250. For public business entities, the guidance is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. The Corporation is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements, if any.

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FIRST BANCORP. (Holding Company Only) Financial Information

3 Months Ended

Mar. 31, 2015

FIRST BANCORP. (Holding Company Only) Financial Information

NOTE 25 – FIRST BANCORP. (HOLDING COMPANY ONLY) FINANCIAL INFORMATION

The following condensed financial information presents the financial position of the Holding Company only as of March 31, 2015 and December 31, 2014 and the results of its operations for the quarters ended March 31, 2015 and 2014.

Statements of Financial Condition
	As of March 31,			As of December 31,
	2015		2014
	(In thousands)
Assets
Cash and due from banks	$	29,726	$	30,380
Money market investments		6,111		6,111
Investment securities available for sale, at market:
Other investment securities		285		285
Loans held for investment, net		298		322
Investment in First Bank Puerto Rico, at equity		1,900,671		1,866,090
Investment in First Bank Insurance Agency, at equity		13,356		11,890
Investment in FBP Statutory Trust I		3,093		3,093
Investment in FBP Statutory Trust II		3,866		3,866
Other assets		4,617		4,357
Total assets	$	1,962,023	$	1,926,394
Liabilities and Stockholders' Equity
Liabilities:
Other borrowings	$	231,959	$	231,959
Accounts payable and other liabilities		24,314		22,692
Total liabilities		256,273		254,651
Stockholders' equity		1,705,750		1,671,743
Total liabilities and stockholders' equity	$	1,962,023	$	1,926,394

Statements of Income
	Quarter Ended
	March 31,		March 31,
	2015		2014
	(In thousands)
Income:
Interest income on money market investments	$	5	$	5
Other income		56		53
		61		58
Expense:
Notes payable and other borrowings		1,817		1,760
Other operating expenses		604		506
		2,421		2,266
Loss before income taxes and equity in undistributed
earnings of subsidiaries		(2,360)		(2,208)
Income tax provision		-		(2)
Equity in undistributed earnings of subsidiaries		28,006		19,293
Net income	$	25,646	$	17,083
Other comprehensive income, net of tax		7,140		22,539
Comprehensive income	$	32,786	$	39,622

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LOAN PORTFOLIO - Contractually Required Principal and Interest Cash Flows Expected to be Collected and Fair Value at Acquisition Related to Loans Acquired (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015		Feb. 27, 2015
Financing Receivable Impaired [Line Items]
Contractually outstanding principal and interest at acquisition			$ 166,947
Less: Nonaccretable difference			48,739
Cash flows expected to be collected at acquisition			118,208
Less: Accretable yield	38,319
Fair value of loans acquired	$ 79,889	[1]

[1] Amounts are preliminary estimates based on the best information available at the acquisition date and adjustments in future quarters may occur up to one year from the date of acquisition.

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NON-CONSOLIDATED VARIABLE INTEREST ENTITIES AND SERVICING ASSETS - Weighted-Averages of Key Economic Assumptions in Valuation Model (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
Carrying amount of servicing assets	$ 22,973	$ 22,838	$ 22,026	$ 21,987
Fair value	25,195
Weighted-average expected life	8 years 5 months 19 days
Constant prepayment rate	10.25%
Decrease in fair value due to 10% adverse change	948
Decrease in fair value due to 20% adverse change	1,838
Discount rate	10.62%
Decrease in fair value due to 10% adverse change	1,050
Decrease in fair value due to 20% adverse change	$ 2,020

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ALLOWANCE FOR LOAN AND LEASE LOSSES (Tables)

3 Months Ended

Mar. 31, 2015

Changes in Allowance for Loan and Lease Losses

The changes in the allowance for loan and lease losses were as follows:
(In thousands)	Residential Mortgage Loans		Commercial Mortgage Loans		Commercial & Industrial Loans		Construction Loans		Consumer Loans		Total
Quarter ended March 31, 2015
Allowance for loan and lease losses:
Beginning balance	$	27,301	$	50,894	$	63,721	$	12,822	$	67,657	$	222,395
Charge-offs		(5,192)		(4,006)		(4,453)		(605)		(17,757)		(32,013)
Recoveries		98		276		558		207		1,573		2,712
Provision		6,475		(2,137)		10,353		1,215		17,064		32,970
Ending balance	$	28,682	$	45,027	$	70,179	$	13,639	$	68,537	$	226,064
Ending balance: specific reserve for
impaired loans	$	14,862	$	13,238	$	24,871	$	3,381	$	5,788	$	62,140
Ending balance: purchased credit-impaired loans	$	-	$	-	$	-	$	-	$	-	$	-
Ending balance: general allowance	$	13,820	$	31,789	$	45,308	$	10,258	$	62,749	$	163,924
Loans held for investment:
Ending balance	$	3,331,620	$	1,649,263	$	2,442,867	$	124,440	$	1,937,182	$	9,485,372
Ending balance: impaired loans	$	429,526	$	224,365	$	226,656	$	37,593	$	36,841	$	954,981
Ending balance: purchased credit-
impaired loans	$	177,601	$	3,279	$	-	$	-	$	234	$	181,114
Ending balance: loans with general allowance	$	2,724,493	$	1,421,619	$	2,216,211	$	86,847	$	1,900,107	$	8,349,277

(In thousands)	Residential Mortgage Loans		Commercial Mortgage Loans		Commercial & Industrial Loans		Construction Loans		Consumer Loans		Total
Quarter ended March 31, 2014
Allowance for loan and lease losses:
Beginning balance	$	33,110	$	73,138	$	85,295	$	35,814	$	58,501	$	285,858
Charge-offs		(6,422)		(5,810)		(22,459)		(970)		(18,046)		(53,707)
Recoveries		69		35		663		617		1,328		2,712
Provision		3,751		(851)		16,091		(8,050)		20,974		31,915
Ending balance	$	30,508	$	66,512	$	79,590	$	27,411	$	62,757	$	266,778
Ending balance: specific reserve for
impaired loans	$	17,273	$	29,833	$	19,098	$	15,154	$	3,658	$	85,016
Ending balance: purchased credit-impaired loans	$	-	$	-	$	-	$	-	$	-	$	-
Ending balance: general allowance	$	13,235	$	36,679	$	60,492	$	12,257	$	59,099	$	181,762
Loans held for investment:
Ending balance	$	2,548,101	$	1,846,016	$	2,947,837	$	152,579	$	2,072,252	$	9,566,785
Ending balance: impaired loans	$	419,308	$	219,860	$	151,653	$	58,636	$	29,931	$	879,388
Ending balance: purchased credit-
impaired loans	$	-	$	-	$	-	$	-	$	3,383	$	3,383
Ending balance: loans with general allowance	$	2,128,793	$	1,626,156	$	2,796,184	$	93,943	$	2,038,938	$	8,684,014

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SEGMENT INFORMATION (Tables)

3 Months Ended

Mar. 31, 2015

Information about the Reportable Segments

The following table presents information about the reportable segments:
(In thousands)	Mortgage Banking		Consumer (Retail) Banking		Commercial and Corporate		Treasury and Investments		United States Operations		Virgin Islands Operations		Total
For the quarter ended March 31, 2015:
Interest income	$	33,876	$	49,836	$	34,803	$	13,067	$	11,231	$	9,672	$	152,485
Net (charge) credit for transfer of funds		(11,236)		3,684		(3,795)		7,754		3,593		-		-
Interest expense		-		(5,657)		-		(16,007)		(4,339)		(835)		(26,838)
Net interest income		22,640		47,863		31,008		4,814		10,485		8,837		125,647
(Provision) release for loan and lease losses		(6,963)		(16,685)		(9,093)		-		2,133		(2,362)		(32,970)
Non-interest income		3,399		12,417		524		(100)		524		2,522		19,286
Direct non-interest expenses		(8,065)		(31,559)		(7,979)		(1,339)		(7,183)		(8,580)		(64,705)
Segment income	$	11,011	$	12,036	$	14,460	$	3,375	$	5,959	$	417	$	47,258
Average earnings assets	$	2,492,247	$	2,045,277	$	3,028,358	$	2,764,058	$	971,887	$	639,162	$	11,940,989
(In thousands)	Mortgage Banking		Consumer (Retail) Banking		Commercial and Corporate		Treasury and Investments		United States Operations		Virgin Islands Operations		Total
For the quarter ended March 31, 2014:
Interest income	$	25,748	$	55,812	$	42,299	$	15,583	$	10,896	$	10,233	$	160,571
Net (charge) credit for transfer of funds		(8,546)		3,635		(2,999)		5,800		2,110		-		-
Interest expense		-		(6,796)		-		(16,761)		(4,797)		(897)		(29,251)
Net interest income		17,202		52,651		39,300		4,622		8,209		9,336		131,320
(Provision) release for loan and lease losses		(3,384)		(20,495)		(13,345)		-		5,959		(650)		(31,915)
Non-interest income (loss)		3,102		10,630		1,767		53		441		1,967		17,960
Direct non-interest expenses		(9,832)		(32,015)		(12,578)		(1,126)		(7,220)		(9,024)		(71,795)
Segment income	$	7,088	$	10,771	$	15,144	$	3,549	$	7,389	$	1,629	$	45,570
Average earnings assets	$	1,955,990	$	2,006,395	$	3,921,439	$	2,710,930	$	846,152	$	655,568	$	12,096,474

Reconciliation of the Reportable Segment Financial Information

The following table presents a reconciliation of the reportable segment financial information to the consolidated totals:
		Quarter Ended
		March 31,
		2015		2014
Net income:
Total income for segments and other		$	47,258	$	45,570
Other non-interest gain (loss) (1)			13,443		(6,610)
Other operating expenses (2)			(27,023)		(20,990)
Income before income taxes			33,678		17,970
Income tax expense			(8,032)		(887)
Total consolidated net income		$	25,646	$	17,083
Average assets:
Total average earning assets for segments		$	11,940,989	$	12,096,474
Other average earning assets (1)			-		6,570
Average non-earning assets			934,999		671,146
Total consolidated average assets		$	12,875,988	$	12,774,190
(1)	The bargain purchase gain on the acquisition of assets and assumption of deposits from Doral Bank in 2015 as well as the activities related to the Bank's equity interest in CPG/GS are presented as an Other non-interest income (loss) and the investment in CPG/GS is presented as Other average earning assets in the tables above.
(2)	Expenses pertaining to corporate administrative functions that support the operating segment but are not specifically attributable to or managed by any segment are not included in the reported financial results of the operating segments. The unallocated corporate expenses include certain general and administrative expenses and related depreciation and amortization expenses.

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LOAN PORTFOLIO - Loans Held for Investment on Which Accrual of Interest Income had been Discontinued (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015		Dec. 31, 2014
Non-performing loans:
Total non-performing loans held for investment	$ 563,544	[1],[2],[3]	$ 523,896	[1],[2],[3]
Residential Mortgage [Member]
Non-performing loans:
Total non-performing loans held for investment	172,583		180,707
Commercial Mortgage [Member]
Non-performing loans:
Total non-performing loans held for investment	142,385		148,473
Commercial And Industrial [Member]
Non-performing loans:
Total non-performing loans held for investment	186,500		122,547
Consumer Auto Loans [Member]
Non-performing loans:
Total non-performing loans held for investment	19,043		22,276
Finance Leases [Member]
Non-performing loans:
Total non-performing loans held for investment	2,979		5,245
Consumer Retail Banking [Member]
Non-performing loans:
Total non-performing loans held for investment	12,891		15,294
Residential Construction [Member]
Non-performing loans:
Total non-performing loans held for investment	13,072		14,324
Commercial Construction [Member]
Non-performing loans:
Total non-performing loans held for investment	0		0
Land Construction [Member]
Non-performing loans:
Total non-performing loans held for investment	$ 14,091		$ 15,030

[1] As of March 31, 2015 and December 31, 2014, excludes $54.6 million of non-performing loans held for sale.

[2] Amount excludes purchased-credit impaired ("PCI") loans with a carrying value of approximately $181.1 million and $102.6 million as of March 31, 2015 and December 31, 2014, respectively, primarily mortgage loans acquired from Doral Bank in the first quarter of 2015 and second quarter of 2014, as further discussed below. These loans are not considered non-performing due to the application of the accretion method, under which these loans will accrete interest income over the remaining life of the loans using an estimated cash flow analysis.

[3] Non-performing loans exclude $434.2 million and $494.6 million of Troubled Debt Restructuring ("TDR") loans that are in compliance with the modified terms and in accrual status as of March 31, 2015 and December 31, 2014, respectively.

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Consolidated Statements of Financial Condition (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015		Dec. 31, 2014
ASSETS
Cash and due from banks	$ 767,471		$ 779,147
Money market investments:
Time deposits with other financial institutions	300		300
Other short-term investments	216,665		16,661
Total money market investments	216,965		16,961
Investment securities available for sale, at fair value:
Securities pledged that can be repledged	1,001,725		1,025,966
Other investment securities	972,501		939,700
Total investment securities available for sale	1,974,226		1,965,666
Other equity securities	26,185		25,752
Investment in unconsolidated entities	0		0
Loans, net of allowance for loan and lease losses of $301,047 (2012 - $435,414)	9,259,308		9,040,041
Loans held for sale, at lower of cost or market	81,723		76,956
Total loans, net	9,341,031		9,116,997
Premises and equipment, net	166,799		166,926
Other real estate owned	122,628		124,003
Accrued interest receivable on loans and investments	49,302		50,796
Other assets	483,312		481,587
Total assets	13,147,919		12,727,835
LIABILITIES
Non-interest-bearing deposits	1,175,943		900,616
Interest-bearing deposits	8,665,095		8,583,329
Total deposits	9,841,038		9,483,945
Securities sold under agreements to repurchase	900,000	[1]	900,000	[1]
Advances from the Federal Home Loan Bank (FHLB)	325,000		325,000
Other borrowings	231,959		231,959
Accounts payable and other liabilities	144,172		115,188
Total liabilities	11,442,169		11,056,092
Preferred stock, authorized 50,000,000 shares:
Non-cumulative Perpetual Monthly Income Preferred Stock: issued - 22,004,000 shares, outstanding 2,521,872 shares, aggregate liquidation value of $63,047	36,104		36,104
Common stock, $0.10 par value, authorized, 2,000,000,000 shares; issued, 207,514,167 shares (2012 - 206,730,318 shares issued)	21,462		21,372
Less: Treasury stock (at par value)	(79)		(74)
Common stock outstanding, 206,982,105 shares outstanding (2012 - 206,235,465 shares	21,383		21,298
Additional paid-in capital	917,203		916,067
Retained earnings	742,271		716,625
Accumulated other comprehensive (loss) income, net of tax expense of $8,171 (2012 - $7,749)	(11,211)		(18,351)
Total stockholders' equity	1,705,750		1,671,743
Total liabilities and stockholders' equity	$ 13,147,919		$ 12,727,835

[1] As of March 31, 2015, includes $800 million with an average rate of 2.71% that lenders have the right to call before their contractual maturities at various dates beginning on April 9, 2015. Subsequent to April 9, 2015, no lender has exercised its call option on repurchase agreements. In addition, $700 million is tied to variable rates.

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GOODWILL AND OTHER INTANGIBLES (Tables)

3 Months Ended

Mar. 31, 2015

Gross Amount and Accumulated Amortization of Other Intangible Assets

The following table shows the gross amount and accumulated amortization of the Corporation’s intangible assets recognized as part of Other Assets in the consolidated statement of financial condition:
	As of		As of
	March 31,		December 31,
	2015		2014
(Dollars in thousands)
Core deposit intangible:
Gross amount, beginning of period	$	45,844	$	45,844
Addition as a result of acquisition		5,820		-
Accumulated amortization		(40,750)		(40,424)
Net carrying amount	$	10,914	$	5,420
Remaining amortization period		9.9 years		8.4 years
Purchased credit card relationship intangible:
Gross amount	$	24,465	$	24,465
Accumulated amortization		(8,843)		(8,076)
Net carrying amount	$	15,622	$	16,389
Remaining amortization period		6.7 years		6.9 years

	The estimated aggregate amortization expense related to these intangible assets for future periods is as follows:
			Amount
			(In thousands)
2015		$	3,813
2016			4,737
2017			4,197
2018			3,293

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ALLOWANCE FOR LOAN AND LEASE LOSSES - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	1 Months Ended
	May 31, 2014	Mar. 31, 2015
Financing Receivable Allowance For Credit Losses [Line Items]
Reserve for unfunded loan commitments		$ 0.5
Changes In Allowance For Loan Losses	$ (4.8)

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FAIR VALUE - Fair Value of Assets and Liabilities Measured on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014
Total gains or (losses) (realized/unrealized):
Included in earnings	$ 156		$ 0
Principal Repayments	(2,461)	[1]	(1,869)	[1]
Available for Sale Securities
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Beginning balance	36,212	[1]	43,292	[1]
Total gains or (losses) (realized/unrealized):
Included in earnings	156	[1]	0	[1]
Included in other comprehensive income	(619)	[1]	(964)	[1]
Purchases	100	[1]	5,123	[1]
Ending balance	$ 34,314	[1]	$ 47,510	[1]

[1] Amounts mostly related to private label MBS.

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NON-CONSOLIDATED VARIABLE INTEREST ENTITIES AND SERVICING ASSETS - Key Economic Assumptions Used in Determining Fair Value at Time of Sale of Loans (Detail)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Government Guaranteed Mortgage Loans [Member]
Assumption For Fair Value On Securitization Date Of Interests Continued To Be Held By Transferor Servicing Assets Or Liabilities [Line Items]
Constant prepayment rate	9.20%	9.10%
Discount rate	11.50%	11.50%
Conventional Loan [Member]
Assumption For Fair Value On Securitization Date Of Interests Continued To Be Held By Transferor Servicing Assets Or Liabilities [Line Items]
Constant prepayment rate	9.00%	8.90%
Discount rate	9.50%	9.50%
Conventional Non Conforming Mortgage Loans [Member]
Assumption For Fair Value On Securitization Date Of Interests Continued To Be Held By Transferor Servicing Assets Or Liabilities [Line Items]
Constant prepayment rate	14.00%	13.40%
Discount rate	13.80%	13.90%

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CONSOLIDATED STATEMENT OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash flows from operating activities:
Net income (loss)	$ 25,646	$ 17,083
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	5,306	5,453
Amortization and impairment of intangible assets	1,093	1,235
Provision for loan and lease losses	32,970	31,915
Deferred income tax (benefit) expense	2,060	(700)
Stock-based compensation	1,457	717
Other-than-temporary impairments on debt securities	156	0
Equity in losses of unconsolidated entities	0	6,610
Derivative instruments and financial liabilities measured at fair value, gain	72	(148)
Loss (gain) on sale of premises and equipment and other assets	194	25
Net gain on sale of loans held for investment	(1,689)	(2,017)
Net amortization of premiums, discounts and deferred loan fees and costs	(673)	(477)
Originations and purchases of loans held for sale	(89,425)	(72,748)
Sales and repayments of loans held for sale	87,051	72,865
Amortization of broker placement fees	1,335	1,785
Net amortization of premium and discounts on investment securities	1,269	(284)
(Decrease) increase in accrued income tax payable	5,481	1,476
(Increase) decrease in accrued interest receivable	1,953	4,992
Decrease in accrued interest payable	1,000	2,106
Decrease (increase) in other assets	3,081	8,657
Increase (decrease) in other liabilities	11,007	(4,987)
Business Combination Bargain Purchase Gain Recognized Amount	13,443	0
Net cash provided by operating activities	75,513	73,508
Cash flows from investing activities:
Principal collected on loans	751,062	776,086
Loans originated and purchased	(705,621)	(774,764)
Proceeds from sale of loans held for investment	2,230	16,558
Proceeds from sale of repossessed assets	18,446	12,262
Purchases of securities available for sale	(56,429)	(76,253)
Proceeds from principal repayments and maturities of securities available for sale	53,596	45,422
Additions to premises and equipment	(3,027)	(7,696)
Proceeds from sale of premises and equipment and other assets	2,492	25
Cash Acquired From Acquisition	217,659	0
(Increase) decrease in other equity securities	(433)	0
Net cash provided by investing activities	279,975	(8,360)
Cash flows from financing activities:
Net decrease in deposits	(166,924)	120,977
Net FHLB advances paid	0	0
Repayments of medium-term notes	0	0
Payments Of Stock Issuance Costs	0	53
Repurchase of outstanding common stock	(236)	(246)
Net cash provided (used in) financing activities	(167,160)	120,678
Net increase in cash and cash equivalents	188,328	185,826
Cash and cash equivalents at beginning of period	796,108	655,671
Cash and cash equivalents at end of period	984,436	841,497
Cash and cash equivalents include:
Cash and due from banks	767,471	824,547
Money market instruments	216,965	16,950
Cash and Cash Equivalents, at Carrying Value, Total	$ 984,436	$ 841,497

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LOAN PORTFOLIO - Loan Restructuring and Effect on Allowance for Loan and Lease Losses (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014	Dec. 31, 2014
Financing Receivable Allowance For Credit Losses [Line Items]
Financing Receivable, Modifications, Recorded Investment	$ 705,123	[1]	$ 622,320	$ 694,453	[2]
Charges to the provision for loan losses	32,970		31,915
Allowance for loan losses at the end of the period	226,064			222,395
Loans Split [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Financing Receivable, Modifications, Recorded Investment	42,907		78,833
Amount charged-off	0		0
Charges to the provision for loan losses	(24)		(15)
Allowance for loan losses at the end of the period	707		1,547
Accrual [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Financing Receivable, Modifications, Recorded Investment	$ 434,199			$ 494,640

[1] Excludes TDRs held for sale amounting to $45.7 million as of March 31, 2015.

[2] Excludes TDRs held for sale amounting to $45.7 million as of December 31, 2014.

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FAIR VALUE - Impairment of Valuation Adjustments were Recorded for Assets Recognized at Fair Value (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2015		Dec. 31, 2014	Dec. 31, 2013
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Mortgage servicing rights	$ 22,026		$ 22,973		$ 22,838	$ 21,987
Loans Receivable [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets Fair Value Adjustment	(23,793)	[1]
Other Real Estate Owned [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets Fair Value Adjustment	(4,747)	[2]
Mortgage Servicing Rights [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets Fair Value Adjustment	(219)	[3]
Loans Held For Sale [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets Fair Value Adjustment	0	[4]
Fair Value Measurements Nonrecurring [Member] | Loans Receivable [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets Fair Value Adjustment			(13,725)	[5]
Fair Value Measurements Nonrecurring [Member] | Other Real Estate Owned [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets Fair Value Adjustment			(2,711)	[2]
Fair Value Measurements Nonrecurring [Member] | Mortgage Servicing Rights [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets Fair Value Adjustment			(38)	[6]
Fair Value Measurements Nonrecurring [Member] | Loans Held For Sale [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets Fair Value Adjustment			0	[4]
Fair Value Inputs Level 1 [Member] | Fair Value Measurements Nonrecurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Loans receivable	0	[1]	0	[5]
Other Real Estate Owned	0	[2]	0	[2]
Mortgage servicing rights	0	[3]	0	[6]
Loans held for sale	0	[4]	0	[4]
Fair Value Inputs Level 2 [Member] | Fair Value Measurements Nonrecurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Loans receivable	0	[1]	0	[5]
Other Real Estate Owned	0	[2]	0	[2]
Mortgage servicing rights	0	[3]	0	[6]
Loans held for sale	0	[4]	0	[4]
Fair Value Inputs Level 3 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Loans receivable	478,393	[1]
Other Real Estate Owned	138,622	[2]
Mortgage servicing rights	22,026	[3]
Loans held for sale	54,755	[4]
Fair Value Inputs Level 3 [Member] | Fair Value Measurements Nonrecurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Loans receivable			436,944	[5]
Other Real Estate Owned			122,628	[2]
Mortgage servicing rights			22,973	[6]
Loans held for sale			$ 54,588	[4]

[1]  Mainly impaired commercial and construction loans. The impairment was generally measured based on the fair value of the collateral. The fair values were derived from external appraisals that take into consideration prices in observed transactions involving similar assets in similar locations but adjusted for specific characteristics and assumptions of the collateral (e.g. absorption rates), which are not market observable.

[2] The fair value was derived from appraisals that take into consideration prices in observed transactions involving similar assets in similar locations but adjusted for specific characteristics and assumptions of the properties (e.g., absorption rates and net operating income of income producing properties), which are not market observable. Losses were related to market valuation adjustments after the transfer of the loan to the OREO portfolio.

[3] Fair value adjustments to the mortgage servicing rights were mainly due to assumptions associated with mortgage prepayments rates. The Corporation carries its mortgage servicing rights at the lower-of-cost or market, measured at fair value on a non-recurring basis. Assumptions for the value of mortgage servicing rights included: Prepayment Rate-9.10%, Discount Rate-10.61%.

[4] The value of these loans was derived from external appraisals, adjusted for specific characteristics of the loans, and, for loans with signed sale agreements, the value was determined based on the sales price in such agreements.

[5] Mainly impaired commercial and construction loans. The impairment was generally measured based on the fair value of the collateral. The fair values were derived from external appraisals that take into consideration prices in observed transactions involving similar assets in similar locations but adjusted for specific characteristics and assumptions of the collateral (e.g., absorption rates), which are not market observable.

[6] Fair value adjustments to mortgage servicing rights were mainly due to assumptions associated with mortgage prepayment rates. The Corporation carries its mortgage servicing rights at the lower of cost or market, measured at fair value on a non-recurring basis. Assumptions for the value of mortgage servicing rights included: Prepayment rate-10.25%, Discount Rate-10.62%.

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FAIR VALUE - Qualitative Information Regarding Fair Value Measurements for Level 3 Financial Instruments (Detail)	3 Months Ended
	Mar. 31, 2015
Loans [Member]
Fair Value Option Quantitative Disclosures [Line Items]
Method	Income, Market, Comparable Sales, Discounted Cash Flows
Valuation technique	External appraised values; probability weighting of broker price opinions; management assumptions regarding market trends or other relevant factors
Other Real Estate Owned [Member]
Fair Value Option Quantitative Disclosures [Line Items]
Method	Income, Market, Comparable Sales, Discounted Cash Flows
Valuation technique	External appraised values; probability weighting of broker price opinions; management assumptions regarding market trends or other relevant factors
Mortgage Servicing Rights [Member]
Fair Value Option Quantitative Disclosures [Line Items]
Method	Discounted Cash Flow
Valuation technique	Weighted average prepayment rate of 10.25%; weighted average discount rate of 10.62%

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EARNINGS PER COMMON SHARE - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Earnings Per Share Diluted [Line Items]
Unvested shares of restricted stock			2,327,156
Restricted Stock [Member]
Earnings Per Share Diluted [Line Items]
Unvested shares of restricted stock			2,327,156
Stock Option [Member]
Earnings Per Share Diluted [Line Items]
Antidilutive effect on earnings per share	69,848	88,640

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OTHER REAL ESTATE OWNED- Other real estate owned (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015		Dec. 31, 2014
Other Real Estate And Foreclosed Assets [Line Items]
Other real estate owned	$ 122,628		$ 124,003
Residential Real Estate [Member]
Other Real Estate And Foreclosed Assets [Line Items]
Other real estate owned	26,031		22,520
Commercial Real Estate [Member]
Other Real Estate And Foreclosed Assets [Line Items]
Other real estate owned	72,473		75,654
Construction Real Estate [Member]
Other Real Estate And Foreclosed Assets [Line Items]
Other real estate owned	17,257		18,770
Government Guaranteed [Member]
Other Real Estate And Foreclosed Assets [Line Items]
Other real estate owned	$ 6,867	[1]	$ 7,059	[1]

[1] As of March 31, 2015, exclude $0.2 million of foreclosures completed in 2015 that meet the conditions of ASC 310-40 and are presented as a receivable (other assets) in the statement of financial condition.

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EARNINGS PER COMMON SHARE (Tables)

3 Months Ended

Mar. 31, 2015

Schedule of Earning Per Share [Table Text Block]

	The calculations of earnings per common share for the quarters ended on March 31, 2015 and 2014 are as follows:
		Quarter Ended
		March 31,		March 31,
		2015		2014
		(In thousands, except per share information)
Net income		$	25,646	$	17,083
	Cumulative convertible preferred stock dividends (Series G)
Favorable impact from issuing common stock in exchange for
	Series A through E preferred stock (1)		-		379
Net income attributable to common stockholders		$	25,646	$	17,462
Weighted-Average Shares:
	Average common shares outstanding		210,686		205,732
	Average potential dilutive common shares		2,060		1,144
	Average common shares outstanding-assuming dilution		212,746		206,876
Income per common share:
	Basic	$	0.12	$	0.08
	Diluted	$	0.12	$	0.08
(1)	Excess of carrying amount of the Series A through E preferred stock exchanged over the fair value of new common shares issued in the first quarter of 2014.

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FIRST BANCORP. (Holding Company Only) Financial Information - Statements of Financial Condition (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014
ASSETS
Cash and due from banks	$ 767,471	$ 779,147
Money market investments	216,965	16,961	16,950
Investment securities available for sale, at market:
Other investment securities	972,501	939,700
Carrying Value Of Other Equity Security	700		300
Loans Receivable, net	9,341,031	9,116,997
Other assets	483,312	481,587
Total assets	13,147,919	12,727,835
Liabilities:
Other borrowings	231,959	231,959
Accounts payable and other liabilities	144,172	115,188
Total liabilities	11,442,169	11,056,092
Stockholders Equity	1,705,750	1,671,743	1,255,898
Total liabilities and stockholders' equity	13,147,919	12,727,835
Holding Company [Member]
ASSETS
Cash and due from banks	29,726	30,380
Money market investments	6,111	6,111
Investment securities available for sale, at market:
Carrying Value Of Other Equity Security	285	285
Loans Receivable, net	298	322
Other assets	4,617	4,357
Total assets	1,962,023	1,926,394
Liabilities:
Other borrowings	231,959	231,959
Accounts payable and other liabilities	24,314	22,692
Total liabilities	256,273	254,651
Stockholders Equity	1,705,750	1,671,743
Total liabilities and stockholders' equity	1,962,023	1,926,394
Holding Company [Member] | Investment In Banking Subsidiary [Member]
Investment securities available for sale, at market:
Equity Method Investments	1,900,671	1,866,090
Holding Company [Member] | Non Banking Subsidiary [Member]
Investment securities available for sale, at market:
Equity Method Investments	13,356	11,890
Holding Company [Member] | Statutory Trust One [Member]
Investment securities available for sale, at market:
Equity Method Investments	3,093	3,093
Holding Company [Member] | Statutory Trust Two [Member]
Investment securities available for sale, at market:
Equity Method Investments	$ 3,866	$ 3,866

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INCOME TAXES - Additional Information (Detail) (USD $)	3 Months Ended		12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014	Dec. 31, 2013
Income Tax Contingency [Line Items]
Percentage of national gross tax receipt				1.00%
National gross receipt expense	$ 1,500,000
Percentage of gross receipt tax credit				0.50%
Gross income credit amount	700,000
Valuation allowance	198,600,000
Percentage of dividend received deduction from controlled subsidiaries	100.00%
Percentage of dividend received from other taxable domestic corporations	85.00%
Income tax expense	8,032,000	887,000
Deferred Tax Assets Net	310,900,000
Accrued interest related to tax uncertainties expense	1,300,000
Minimum percentage of bank net taxable income for paying Income tax at normal rate	20.00%
Valuation Allowance Deferred Tax Asset Change In Amount			302,900,000
Statutory Sales And Use Tax Rate	7.00%
Value Added Tax Rate	16.00%
Unrecognized Tax Benefits Increases Resulting From Prior Period Tax Positions			(1,800,000)
Unrecognized Tax Benefits Decreases Resulting From Settlements With Taxing Authorities			2,500,000
Effective Tax Rate Pretax Losses	22.00%
Effective Tax Rate Including All Entities	24.00%
Deferred Tax Assets Liabilities Net			$ 313,000,000
Puerto Rico [Member]
Income Tax Contingency [Line Items]
Statute of limitations under income tax act	4 years 0 months 0 days
United States [Member]
Income Tax Contingency [Line Items]
Statute of limitations under income tax act	3 years 0 months 0 days
Virgin Islands [Member]
Income Tax Contingency [Line Items]
Statute of limitations under income tax act	3 years 0 months 0 days

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INVESTMENT SECURITIES - Available-For-Sale Investments' Fair Value And Gross Unrealized Losses (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Schedule Of Available For Sale Securities [Line Items]
Fair Value Less than 12 months	$ 426,813	$ 48,474
Unrealized Losses Less than 12 months	1,547	79
Fair Value 12 months or more	450,633	1,010,786
Unrealized Losses 12 months or more	39,616	42,467
Total Fair Value	877,446	1,059,260
Total Unrealized Losses	41,163	42,546
Equity Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair Value Less than 12 months	0	0
Unrealized Losses Less than 12 months	0	0
Fair Value 12 months or more	0	0
Unrealized Losses 12 months or more	0	0
Total Fair Value	0	0
Total Unrealized Losses	0	0
Debt Securities [Member] | Puerto Rico Government Obligations [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair Value Less than 12 months	0	0
Unrealized Losses Less than 12 months	0	0
Fair Value 12 months or more	36,314	42,335
Unrealized Losses 12 months or more	24,070	17,990
Total Fair Value	36,314	42,335
Total Unrealized Losses	24,070	17,990
Debt Securities [Member] | US States And Political Subdivisions Member [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair Value Less than 12 months	4,999	46,436
Unrealized Losses Less than 12 months	0	74
Fair Value 12 months or more	261,252	257,996
Unrealized Losses 12 months or more	2,955	6,222
Total Fair Value	266,251	304,432
Total Unrealized Losses	2,955	6,296
Mortgage Backed Securities [Member] | Collateralized Mortgage Obligations Member
Schedule Of Available For Sale Securities [Line Items]
Fair Value Less than 12 months		0
Unrealized Losses Less than 12 months		0
Fair Value 12 months or more		0
Unrealized Losses 12 months or more		0
Total Fair Value		0
Total Unrealized Losses		0
Mortgage Backed Securities [Member] | Other-mortgage pass-through trust certificates [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair Value Less than 12 months	0	0
Unrealized Losses Less than 12 months	0	0
Fair Value 12 months or more	31,716	33,536
Unrealized Losses 12 months or more	11,296	12,141
Total Fair Value	31,716	33,536
Total Unrealized Losses	11,296	12,141
Mortgage Backed Securities [Member] | Federal National Mortgage Association Certificates And Obligations F N M A [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair Value Less than 12 months	311,339	2,038
Unrealized Losses Less than 12 months	1,195	5
Fair Value 12 months or more	99,932	541,642
Unrealized Losses 12 months or more	1,087	4,854
Total Fair Value	411,271	543,680
Total Unrealized Losses	2,282	4,859
Mortgage Backed Securities [Member] | Federal Home Loan Mortgage Corporation Certificates And Obligations F H L M C [Member]
Schedule Of Available For Sale Securities [Line Items]
Fair Value Less than 12 months	110,475	0
Unrealized Losses Less than 12 months	352	0
Fair Value 12 months or more	21,419	135,277
Unrealized Losses 12 months or more	208	1,260
Total Fair Value	131,894	135,277
Total Unrealized Losses	$ 560	$ 1,260

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DEPOSITS

3 Months Ended

Mar. 31, 2015

DEPOSITS

NOTE 15 – DEPOSITS

The following table summarizes deposit balances:
	March 31,			December 31,
	2015		2014
	(In thousands)
Type of account:
Non-interest bearing checking accounts	$	1,175,943	$	900,616
Savings accounts		2,641,793		2,450,484
Interest-bearing checking accounts		1,127,560		1,054,136
Certificates of deposit		2,323,259		2,191,663
Brokered CDs		2,572,483		2,887,046
	$	9,841,038	$	9,483,945

Brokered CDs mature as follows:
	March 31, 2015
	(In thousands)
Three months or less	$	362,501
Over three months to six months		577,737
Over six months to one year		832,235
One to three years		745,922
Three to five years		18,037
Over five years		36,051
Total	$	2,572,483

The following are the components of interest expense on deposits:
	Quarter Ended
	March 31,			March 31,
	2015			2014
	(In thousands)
Interest expense on deposits	$	16,359	$	18,514
Amortization of broker placement fees		1,335		1,785
Interest expense on deposits	$	17,694	$	20,299

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BUSINESS COMBINATION (Tables)

3 Months Ended

Mar. 31, 2015

Business Combination Description [Abstract]

Business Combination [Table Text Block]

The Corporation accounted for this transaction as a business combination. The following table identifies the fair value of assets acquired and liabilities assumed from Doral Bank on February 27, 2015:
	Asset/Liabilities
	(at Fair Value)
	(In thousands)
ASSETS
Cash	$	217,659
Loans		311,410
Premises and equipment, net		5,450
Core Deposit Intangible		5,820
Other assets
Total assets acquired		540,339
LIABILITIES
Deposits		523,517
Other liabilities		3,379
Net assets - Bargain purchase gain	$	13,443

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LOANS HELD FOR SALE - Additional Information (Details) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Accounts Notes And Loans Receivable [Line Items]
Loans held for sale	$ 81,723,000	$ 76,956,000
Non Accrual [Member]
Accounts Notes And Loans Receivable [Line Items]
Commercial Mortgage loans	6,800,000	6,800,000
Construction loans	$ 47,800,000	$ 47,800,000

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ADVANCES FROM THE FEDERAL HOME LOAN BANK (FHLB) - Summary of Advances from FHLB (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Short Term Debt [Line Items]
Fixed-rate advances from FHLB, with a weighted-average interest rate of 1.69% (December 31, 2012 - 2.26%)	$ 325,000	$ 325,000

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ADVANCES FROM THE FEDERAL HOME LOAN BANK (FHLB)

3 Months Ended

Mar. 31, 2015

ADVANCES FROM THE FEDERAL HOME LOAN BANK (FHLB)

NOTE 17 – ADVANCES FROM THE FEDERAL HOME LOAN BANK (FHLB)

The following is a summary of the advances from the FHLB:
			As of		As of
		March 31,		December 31,
		2015		2014
		(Dollars in thousands)
	Fixed-rate advances from FHLB, with a weighted-
	average interest rate of 1.17%	$	325,000	$	325,000

Advances from FHLB mature as follows:
		March 31,
		2015
		(In thousands)
	Over one year to three years	$	300,000
	Over three to four years		25,000
	Total	$	325,000

As of March 31, 2015, the Corporation had additional capacity of approximately $615.4million on this credit facility based on collateral pledged at the FHLB, including a haircut reflecting the perceived risk associated with the collateral.

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INVESTMENT SECURITIES - Significant Assumptions in Valuation of Private Label MBS (Detail)	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Schedule Of Investments [Line Items]
Fair Value Inputs Discount Rate	14.50%	14.50%
Fair Value Inputs Prepayment Rate	31.56%	32.00%
Weighted Average, Projected Cumulative Loss Rate	7.30%	7.90%
Minimum [Member]
Schedule Of Investments [Line Items]
Fair Value Inputs Prepayment Rate	18.04%	19.89%
Weighted Average, Projected Cumulative Loss Rate	0.00%	0.64%
Maximum [Member]
Schedule Of Investments [Line Items]
Fair Value Inputs Prepayment Rate	100.00%	100.00%
Weighted Average, Projected Cumulative Loss Rate	80.00%	80.00%

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NON-CONSOLIDATED VARIABLE INTEREST ENTITIES AND SERVICING ASSETS - Additional Information (Detail) (USD $)	3 Months Ended	12 Months Ended		1 Months Ended		0 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Apr. 30, 2004	Sep. 30, 2004	Feb. 16, 2011	Dec. 31, 2013
Servicing Liabilities At Fair Value [Line Items]
Principal amount of corporation serviced loans securitized through GNMA	$ 1,200,000,000
Balance of amortization with third party	43,000,000
Carrying value with third party	31,700,000
Percentage of weighted average yield with third party	2.15%
Percentage Of Trust Preferred Securities That Qualify As Tier 1 Capital		0.00%	25.00%
Debt Instrument Description Of Variable Rate Basis	90-day LIBOR
Working Capital Line Expiration Period	2 years 0 months 0 days
Interest Expense Accrued Trust Preferred Securities	23,700,000
Maximum [Member]
Servicing Liabilities At Fair Value [Line Items]
Percentage of variation in assumptions	20.00%
Minimum [Member]
Servicing Liabilities At Fair Value [Line Items]
Percentage of variation in assumptions	10.00%
Fbp Statutory Trust One [Member]
Servicing Liabilities At Fair Value [Line Items]
Variable rate trust preferred securities				100,000,000
Proceeds of the issuance, together with proceeds of the purchase				3,100,000
Principal amount of corporation's junior subordinated deferrable debentures				103,100,000
Fbp Statutory Trust Two [Member]
Servicing Liabilities At Fair Value [Line Items]
Variable rate trust preferred securities					125,000,000
Proceeds of the issuance, together with proceeds of the purchase					3,900,000
Principal amount of corporation's junior subordinated deferrable debentures					128,900,000
Cpg Gs [Member]
Servicing Liabilities At Fair Value [Line Items]
Loans Sold to CPG						269,300,000
Cash realized on sale of loan						88,500,000
Loans acquired on exchange of loan held for sale						136,100,000
Description of loan						30-day LIBOR plus 300 basis points 30-day LIBOR plus 300 basis points
Carrying amount of loan provided	25,200,000
Line of credit facility provided to fund unfunded commitments						80,000,000
Working capital line of credit to fund certain expenses						20,000,000	7,000,000
Revolver agreement of credit facility provided amount outstanding	38,400,000
Working capital line of credit facility provided amount outstanding	$ 0
Equity Method Investments Estimated Discount Factor	17.57%
Prlp [Member]
Servicing Liabilities At Fair Value [Line Items]
Percentage of ownership investment in unconsolidated entity						65.00%
Percentage of priority interest to be received on invested capital						12.00%
Payment to be made on pro rata basis						35.00%
FirstBank [Member]
Servicing Liabilities At Fair Value [Line Items]
Acquired Equity interest on disposal of loans held for sale						35.00%
Percentage of priority interest to be received on invested capital						12.00%
Payment to be made on pro rata basis						65.00%

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CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) In Thousands	Total	Preferred Stock [Member]	Common Stock [Member]	Additional Paid In Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]
Balance at beginning of period at Dec. 31, 2013		$ 63,047	$ 20,707	$ 888,161	$ 322,679	$ (78,736)
Total stockholders' equity	1,255,898	56,810	20,897	894,247	340,141	(56,197)
Common stock issued for compensation			6	(6)
Repurchase of common stock			(4)	(242)
Common stock sold
Restricted stock grants			81	(81)
Restricted stock forefeited			0	0
Stock-based compensation				717
Net income (loss)	17,083				17,083
Excess of carrying amount of preferred stock exchanged over fair value of new common stock	379				379
Other comprehensive income (loss), net of tax	22,539					22,539
Common stock issued in exchange of preferred stock-Series A through E			107	5,538
Exchange Of Preferred Stock Series For Common Stock		(6,237)
Reversal of Issuance cost of Series A through E of preferred stock exchanged				213
Issuance Cost Of Common Stock				(53)
Balance at end of period at Mar. 31, 2014	1,255,898	56,810	20,897	894,247	340,141	(56,197)
Balance at beginning of period at Dec. 31, 2014	1,671,743	36,104	21,298	916,067	716,625	(18,351)
Total stockholders' equity	1,705,750	36,104	21,383	917,203	742,271	(11,211)
Common stock issued for compensation			8	(8)
Repurchase of common stock			(5)	(231)
Common stock sold
Restricted stock grants			83	(83)
Restricted stock forefeited			(1)	1
Stock-based compensation				1,457
Net income (loss)	25,646				25,646
Excess of carrying amount of preferred stock exchanged over fair value of new common stock	0				0
Other comprehensive income (loss), net of tax	7,140					7,140
Common stock issued in exchange of preferred stock-Series A through E			0	0
Exchange Of Preferred Stock Series For Common Stock		0
Reversal of Issuance cost of Series A through E of preferred stock exchanged				0
Issuance Cost Of Common Stock				0
Balance at end of period at Mar. 31, 2015	$ 1,705,750	$ 36,104	$ 21,383	$ 917,203	$ 742,271	$ (11,211)

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Consolidated Statements of Financial Condition (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Allowance for loan and lease losses	$ 226,064	$ 222,395
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	22,004,000	22,004,000
Preferred stock, shares outstanding	1,444,146	1,444,146
Preferred stock, liquidation value	36,104	36,104
Common stock, par value	$ 0.10	$ 0.10
Common stock, shares authorized	2,000,000,000	2,000,000,000
Common stock, shares issued	214,618,015	213,724,749
Common stock, shares outstanding	213,827,258	212,984,700
Income tax expense	8,032
Accumulated Other Comprehensive Income (Loss) [Member]
Income tax expense	$ 7,752	$ 7,752

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OTHER REAL ESTATE OWNED

3 Months Ended

Mar. 31, 2015

Text Block [Abstract]

Other Real Estate Owned Disclosure [Text Block]

NOTE10–OTHER REAL ESTATE OWNED

The following table presents OREO inventory as of the dates indicated:
		Quarter Ended
		March 31,			December 31,
		2015		2014
			(Dollars in thousands)
OREO
OREO balances, carrying value:
FHA/VA-Guaranteed (1)		$	6,867	$	7,059
Other residential			26,031		22,520
Commercial			72,473		75,654
Construction			17,257		18,770
Total		$	122,628	$	124,003
(1)	As of March 31, 2015, exclude $0.2 million of foreclosures completed in 2015 that meet the conditions of ASC 310-40 and are presented as a receivable (other assets) in the statement of financial condition.

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Effect of Derivative Instruments on Statement of Income (Loss) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Economic undesignated hedges:
Total gain (loss) on derivatives	$ (72)	$ 148
Interest Income Loans [Member] | Interest Rate Swap [Member]
Economic undesignated hedges:
Total gain (loss) on derivatives	0	313
Mortgage Banking Activities [Member] | Forward Contracts [Member]
Economic undesignated hedges:
Total gain (loss) on derivatives	$ (72)	$ (165)

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LOAN PORTFOLIO - Loan Modifications Considered Troubled Debt Restructurings Defaulted (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Financing Receivable Modifications [Line Items]
Number of Contracts	$ 72,000	$ 63,000
Recorded Investment	7,770,000	2,767,000
Non Fha Va Residential Mortgage Loans [Member]
Financing Receivable Modifications [Line Items]
Number of Contracts	12,000	14,000
Recorded Investment	1,773,000	2,552,000
Commercial Mortgage Loans [Member]
Financing Receivable Modifications [Line Items]
Number of Contracts	0	0
Recorded Investment	0	0
Commercial And Industrial Loan [Member]
Financing Receivable Modifications [Line Items]
Number of Contracts	4,000	0
Recorded Investment	5,745,000	0
Consumer Auto Loans [Member]
Financing Receivable Modifications [Line Items]
Number of Contracts	2,000	4,000
Recorded Investment	8,000	39,000
Other Consumer Loans [Member]
Financing Receivable Modifications [Line Items]
Number of Contracts	53,000	45,000
Recorded Investment	229,000	176,000
Finance Leases [Member]
Financing Receivable Modifications [Line Items]
Number of Contracts	1,000	0
Recorded Investment	15,000	0
Commercial Construction [Member]
Financing Receivable Modifications [Line Items]
Number of Contracts	0	0
Recorded Investment	0	0
Residential Construction [Member]
Financing Receivable Modifications [Line Items]
Number of Contracts	0	0
Recorded Investment	0	0
Land Construction [Member]
Financing Receivable Modifications [Line Items]
Number of Contracts	0	0
Recorded Investment	$ 0	$ 0

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LOAN PORTFOLIO - Breakdown Between Accrual and Nonaccrual Status of TDRs (Parenthetical) (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015		Dec. 31, 2014		Mar. 31, 2014
Financing Receivable Modifications [Line Items]
Total TDR loans	$ 705,123	[1]	$ 694,453	[2]	$ 622,320
Performing Financing Receivable [Member] | Non Accrual [Member]
Financing Receivable Modifications [Line Items]
Total TDR loans	$ 121,900		$ 52,800

[1] Excludes TDRs held for sale amounting to $45.7 million as of March 31, 2015.

[2] Excludes TDRs held for sale amounting to $45.7 million as of December 31, 2014.

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SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE - Repurchase Agreements Grouped by Counterparty (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Dec. 31, 2014
Repurchase Agreement Counterparty [Line Items]
Repurchase agreements, interest ranging from 2.45% to 3.39% (December 31, 2011 - 2.50% to 4.40%) (1)	$ 900,000	[1]	$ 900,000	[1]
Citigroup Global Markets [Member]
Repurchase Agreement Counterparty [Line Items]
Repurchase agreements, interest ranging from 2.45% to 3.39% (December 31, 2011 - 2.50% to 4.40%) (1)	300,000
Weighted-Average Maturity	1 year 7 months 0 days
Jp Morgan Chase [Member]
Repurchase Agreement Counterparty [Line Items]
Repurchase agreements, interest ranging from 2.45% to 3.39% (December 31, 2011 - 2.50% to 4.40%) (1)	200,000
Weighted-Average Maturity	6 years 10 months 0 days
Dean Witter Morgan Stanley [Member]
Repurchase Agreement Counterparty [Line Items]
Repurchase agreements, interest ranging from 2.45% to 3.39% (December 31, 2011 - 2.50% to 4.40%) (1)	100,000
Weighted-Average Maturity	2 years 7 months 0 days
Credit Suisse First Boston [Member]
Repurchase Agreement Counterparty [Line Items]
Repurchase agreements, interest ranging from 2.45% to 3.39% (December 31, 2011 - 2.50% to 4.40%) (1)	$ 300,000
Weighted-Average Maturity	5 years 0 months 0 days

[1] As of March 31, 2015, includes $800 million with an average rate of 2.71% that lenders have the right to call before their contractual maturities at various dates beginning on April 9, 2015. Subsequent to April 9, 2015, no lender has exercised its call option on repurchase agreements. In addition, $700 million is tied to variable rates.

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INCOME TAXES - Reconciliation of Unrecognized Tax Benefits (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014
Reconciliation Of Unrecognized Tax Benefits Excluding Amounts Pertaining To Examined Tax Returns Roll Forward
Unrecognized Tax Benefits Increases Resulting From Prior Period Tax Positions	$ (1.8)
Unrecognized Tax Benefits Decreases Resulting From Settlements With Taxing Authorities	$ (2.5)

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REGULATORY MATTERS, COMMITMENTS AND CONTINGENCIES- Regulatory Capital Positions (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
TierOneLeverageCapitalRequiredForCapitalAdequacyToAverageAssets	4.00%
Holding Company [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Capital	$ 1,828,253	$ 1,748,120
TierOneRiskBasedCapital	1,537,862	1,636,004
TierOneLeverageCapital	1,537,862	1,636,004
CapitalRequiredForCapitalAdequacy	761,694	709,723
TierOneRiskBasedCapitalRequiredForCapitalAdequacy	571,271	354,861
TierOneLeverageCapitalRequiredForCapitalAdequacy	505,698	493,159
Capital To Risk Weighted Assets	19.20%	19.70%
Tier One Risk Based Capital To Risk Weighted Assets	16.15%	18.44%
Tier One Leverage Capital To Average Assets	12.16%	13.27%
CapitalRequiredForCapitalAdequacyToRiskWeightedAssets	8.00%	8.00%
Tier One Risk Based Capital Required For Capital AdequacyToRiskWeightedAssets	6.00%	4.00%
TierOneLeverageCapitalRequiredForCapitalAdequacyToAverageAssets		4.00%
Common Equity Tier1 Capital To Risk Weight Assets Ratio	16.15%
Common Equity Tier 1 Capital To Risk Weight Assets	1,537,862
Common Equity Tier 1 Capital To Risk Weight Assets Ratio Capital Adequacy	4.50%
Common Equity Tier 1 Capital To Risk Weight Assets Capital Adequacy	428,453
FirstBank [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Capital	1,798,122	1,717,432
TierOneRiskBasedCapital	1,676,525	1,605,367
TierOneLeverageCapital	1,676,525	1,605,367
CapitalRequiredForCapitalAdequacy	761,410	709,395
TierOneRiskBasedCapitalRequiredForCapitalAdequacy	571,058	354,698
TierOneLeverageCapitalRequiredForCapitalAdequacy	505,036	492,468
CapitalRequiredToBeWellCapitalized	951,763	886,744
TierOneRiskBasedCapitalRequiredToBeWellCapitalized	761,410	532,046
Capital To Risk Weighted Assets	18.89%	19.37%
Tier One Risk Based Capital To Risk Weighted Assets	17.61%	18.10%
Tier One Leverage Capital To Average Assets	13.28%	13.04%
CapitalRequiredForCapitalAdequacyToRiskWeightedAssets	8.00%	8.00%
Tier One Risk Based Capital Required For Capital AdequacyToRiskWeightedAssets	6.00%	4.00%
TierOneLeverageCapitalRequiredForCapitalAdequacyToAverageAssets	4.00%	4.00%
Capital Required To Be Well Capitalized To Risk Weighted Assets	10.00%	10.00%
Tier One Risk Based Capital Required To Be Well Capitalized To Risk Weighted Assets	8.00%	6.00%
Tier One Leverage Capital Required To Be Well Capitalized To Average Assets	5.00%	5.00%
Tier One Leverage Capital Required To Be Well Capitalized	631,295	615,585
Common Equity Tier1 Capital To Risk Weight Assets Ratio	15.62%
Common Equity Tier 1 Capital To Risk Weight Assets	1,486,508
Common Equity Tier 1 Capital To Risk Weight Assets Ratio Capital Adequacy	4.50%
Common Equity Tier 1 Capital To Risk Weight Assets Capital Adequacy	428,293
Common Equity Tier 1 Capital To Risk Weight Assets Well Capitalized	$ 618,646
Common Equity Tier 1 Capital To Risk Weight Assets Ratio Well Capitalized	6.50%

XML

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE - Securities Sold Under Agreements to Repurchase (Parenthetical) (Detail) (USD $)	Mar. 31, 2015		Dec. 31, 2014
Securities Sold Under Agreements To Repurchase And Other Short Term Borrowings [Line Items]
Securities sold under agreements to repurchase	$ 900,000,000	[1]	$ 900,000,000	[1]
Securites Sold Under Agreement To Repurchase Restructurings	400,000,000
Securities For Reverse Repurchase Agreements	200,000,000
Combination Of Interest Rate Reduction And Extension Of Contractual Maturity [Member]
Securities Sold Under Agreements To Repurchase And Other Short Term Borrowings [Line Items]
Securites Sold Under Agreement To Repurchase Restructurings	200,000,000
Extension Of Contractual Maturity [Member]
Securities Sold Under Agreements To Repurchase And Other Short Term Borrowings [Line Items]
Securites Sold Under Agreement To Repurchase Restructurings	200,000,000
Callable Repurchase Agreements [Member]
Securities Sold Under Agreements To Repurchase And Other Short Term Borrowings [Line Items]
Securities sold under agreements to repurchase	800,000,000
Variable Interest Rate Repurchase Agreement [Member]
Securities Sold Under Agreements To Repurchase And Other Short Term Borrowings [Line Items]
Securities sold under agreements to repurchase	$ 700,000,000
Maximum [Member]
Securities Sold Under Agreements To Repurchase And Other Short Term Borrowings [Line Items]
Assets sold under agreements to repurchase interest rate	3.33%		4.50%
Minimum [Member]
Securities Sold Under Agreements To Repurchase And Other Short Term Borrowings [Line Items]
Assets sold under agreements to repurchase interest rate	1.96%		2.45%
Weighted Average [Member] | Callable Repurchase Agreements [Member]
Securities Sold Under Agreements To Repurchase And Other Short Term Borrowings [Line Items]
Assets sold under agreements to repurchase interest rate	2.71%

[1] As of March 31, 2015, includes $800 million with an average rate of 2.71% that lenders have the right to call before their contractual maturities at various dates beginning on April 9, 2015. Subsequent to April 9, 2015, no lender has exercised its call option on repurchase agreements. In addition, $700 million is tied to variable rates.

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2015	Apr. 30, 2014
Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Trading Symbol	fbp
Entity Registrant Name	FIRST BANCORP /PR/
Entity Central Index Key	0001057706
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		213,810,782

XML

ADVANCES FROM THE FEDERAL HOME LOAN BANK (FHLB) - Advances from FHLB Mature (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 325,000	$ 325,000
Over one to three years
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	300,000
Over three years
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 25,000

XML

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

3 Months Ended

Mar. 31, 2015

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

NOTE 11–DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

One of the market risks facing the Corporation is interest rate risk, which includes the risk that changes in interest rates will result in changes in the value of the Corporation's assets or liabilities and the risk that net interest income from its loan and investment portfolios will be adversely affected by changes in interest rates. The overall objective of the Corporation's interest rate risk management activities is to reduce the variability of earnings caused by changes in interest rates.

The Corporation designates a derivative as a fair value hedge, cash flow hedge or economic undesignated hedge when it enters into the derivative contract. As of March 31, 2015 and December 31, 2014, all derivatives held by the Corporation were considered economic undesignated hedges. These undesignated hedges are recorded at fair value with the resulting gain or loss recognized in current earnings.

The following summarizes the principal derivative activities used by the Corporation in managing interest rate risk:

Interest rate cap agreements - Interest rate cap agreements provide the right to receive cash if a reference interest rate rises above a contractual rate. The value increases as the reference interest rate rises. The Corporation enters into interest rate cap agreements for protection from rising interest rates.

Interest rate swaps - Interest rate swap agreements generally involve the exchange of fixed and floating-rate interest payment obligations without the exchange of the underlying notional principal amount. As of March 31, 2015 and December 31, 2014, most of the interest rate swaps outstanding are used for protection against rising interest rates. Similar to unrealized gains and losses arising from changes in fair value, net interest settlements on interest rate swaps are recorded as an adjustment to interest income or interest expense depending on whether an asset or liability is being economically hedged.

Forward Contracts- Forward contracts are sales of to-be-announced (“TBA”) mortgage-backed securities that will settle over the standard delivery date and do not qualify as “regular way” security trades. Regular-way security trades are contracts that have no net settlement provision and no market mechanism to facilitate net settlement and that provide for delivery of a security within the time generally established by regulations or conventions in the marketplace or exchange in which the transaction is being executed. The forward sales are considered derivative instruments that need to be marked to market. These securities are used to economically hedge the FHA/VA residential mortgage loan securitizations of the mortgage-banking operations. Unrealized gains (losses) are recognized as part of mortgage banking activities in the consolidated statement of income.

To satisfy the needs of its customers, the Corporation may enter into nonhedging transactions. In these transactions, generally, the Corporation participates as a buyer in one of the agreements and as a seller in the other agreement under the same terms and conditions.

In addition, the Corporation enters into certain contracts with embedded derivatives that do not require separate accounting as these are clearly and closely related to the economic characteristics of the host contract. When the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract, it is bifurcated, carried at fair value, and designated as a trading or nonhedging derivative instrument.

The following table summarizes the notional amounts of all derivative instruments:
	Notional Amounts
	As of		As of
	March 31,		December 31,
	2015		2014
Undesignated economic hedges:	(In thousands)
Interest rate contracts:
Interest rate swap agreements	$	5,440	$	5,440
Written interest rate cap agreements		36,809		37,132
Purchased interest rate cap agreements		36,809		37,132
Forward Contracts:
Sale of TBA GNMA MBS pools		32,000		19,000
	$	111,058	$	98,704
Notional amounts are presented on a gross basis with no netting of offseting exposure positions.

The following table summarizes the fair value of derivative instruments as of the indicated dates and the location in the statement of financial condition:
	Asset Derivatives					Liability Derivatives
	Statement of	March 31,		December 31,			March 31,		December 31,
	Financial	2015		2014			2015		2014
	Condition Location	Fair Value		Fair Value		Statement of Financial Condition Location	Fair Value		Fair Value
	(In thousands)
Undesignated economic hedges:
Interest rate contracts:
Interest rate swap agreements	Other assets	$	-	$	33	Accounts payable and other liabilities	$	-	$	33
Written interest rate cap agreements	Other assets		-		-	Accounts payable and other liabilities		1		6
Purchased interest rate cap agreements	Other assets		1		6	Accounts payable and other liabilities		-		-
Forward Contracts:
Sales of TBA GNMA MBS pools	Other assets		-		-	Accounts payable and other liabilities		220		148
		$	1	$	39		$	221	$	187

The following table summarizes the effect of derivative instruments on the statement of income :
		Gain (or Loss)
	Location of Gain or (Loss)		Quarter Ended
	Recognized in Income on	March 31,
(In thousands)	Derivatives	2015		2014
			(In thousands)
UNDESIGNATED ECONOMIC HEDGES:
Interest rate contracts:
Interest rate swap agreements	Interest income - Loans	$	-	$	313
Forward contracts:
Sales of TBA GNMA MBS pools	Mortgage Banking Activities		(72)		(165)
Total (loss) gain on derivatives		$	(72)	$	148

Derivative instruments, such as interest rate swaps, are subject to market risk. As is the case with investment securities, the market value of derivative instruments is largely a function of the financial market's expectations regarding the future direction of interest rates. Accordingly, current market values are not necessarily indicative of the future impact of derivative instruments on earnings. This will depend, for the most part, on the shape of the yield curve and the level of interest rates, as well as the expectations for rates in the future.

A summary of interest rate swaps is as follows:

	As of		As of
	March 31,		December 31,
	2015		2014
		(Dollars in thousands)
Pay fixed/receive floating :
Notional amount	$	5,440	$	5,440
Weighted-average receive rate at period end		2.04%		2.03%
Weighted-average pay rate at period end		3.45%		3.45%
As of March 31, 2015, the Corporation has not entered into any derivative instrument containing credit-risk-related
contingent features.

XML

LOAN PORTFOLIO - Additional Information (Detail) (USD $)	1 Months Ended	3 Months Ended
	Feb. 27, 2015	Mar. 31, 2015		Mar. 31, 2014	Dec. 31, 2014
Accounts Notes And Loans Receivable [Line Items]
Interest Income Impaired Loans				$ 7,600,000
Interest Income on Impaired Loans Accrual Basis		8,237,000		5,900,000
Contractually outstanding principal and interest at acquisition		226,700,000			135,500,000
Securitization of mortgage loans into mortgage backed securities		46,900,000
Total gross loans held for investment portfolio		9,485,372,000		9,566,785,000	9,262,436,000
Outstanding of credit facilities granted					308,000,000
Loans to local financial institutions collateralized by real estate mortgages		0			0
Total TDR loans		705,123,000	[1]	622,320,000	694,453,000	[2]
Outstanding unfunded commitments on TDR loans		47,000
Provsion of PCI Loans		0
Loans held for sale		81,723,000			76,956,000
Non Sop Unpaid Principal Balance		227,900,000
Proceeds From Sale Of Loans Held For Investment		2,230,000		16,558,000
Discount On Loans Acquired Percentage	9.00%
Discount On Loans Acquired Amount	29,000,000
Puerto Rico Government and Political Subdivisions [Member]
Accounts Notes And Loans Receivable [Line Items]
Outstanding of credit facilities granted		201,300,000
Public Corporations [Member]
Accounts Notes And Loans Receivable [Line Items]
Outstanding of credit facilities granted		95,900,000
Government [Member]
Accounts Notes And Loans Receivable [Line Items]
Outstanding of credit facilities granted		24,500,000
Puerto Rico Tourism Development Fund [Member]
Accounts Notes And Loans Receivable [Line Items]
Outstanding of credit facilities granted		132,500,000			133,300,000
Puerto Rico Electric PowerAuthority [Member]
Accounts Notes And Loans Receivable [Line Items]
Outstanding of credit facilities granted		75,000,000
GNMA
Accounts Notes And Loans Receivable [Line Items]
Loans repurchased		3,000,000
FNMA and FHLMC
Accounts Notes And Loans Receivable [Line Items]
Loans repurchased		200,000
Government Guaranteed Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Financing Receivable Significant Sales		38,400,000
Total TDR loans		65,700,000
Loans in trial [Member]
Accounts Notes And Loans Receivable [Line Items]
Total TDR loans		11,500,000
Non Accrual [Member]
Accounts Notes And Loans Receivable [Line Items]
Total TDR loans		270,924,000	[3],[4]		199,813,000	[5],[6]
Troubled Debt Restructurings [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans held for sale					45,700,000
Loans Split [Member]
Accounts Notes And Loans Receivable [Line Items]
Total TDR loans		42,907,000		78,833,000
Non Fha Va Residential Mortgage Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Financing Receivable Significant Purchases		23,800,000
Total TDR loans		354,094,000			349,775,000
Commercial And Industrial Loan [Member]
Accounts Notes And Loans Receivable [Line Items]
Total TDR loans		166,736,000			171,926,000
Payments To Acquire Loans Held For Investment		21,100,000
Commercial Mortgage Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Total TDR loans		136,780,000			127,766,000
Commercial Construction [Member]
Accounts Notes And Loans Receivable [Line Items]
Total TDR loans		0			0
Residential Construction [Member]
Accounts Notes And Loans Receivable [Line Items]
Total TDR loans		10,060,000			10,037,000
Land Construction [Member]
Accounts Notes And Loans Receivable [Line Items]
Total TDR loans		2,477,000			2,470,000
Residential Mortgage [Member]
Accounts Notes And Loans Receivable [Line Items]
Total gross loans held for investment portfolio		3,331,620,000		2,548,101,000
Troubled Debt Restructurings [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans held for sale		45,700,000
Loans Split [Member]
Accounts Notes And Loans Receivable [Line Items]
Financing receivable loans restructured recorded investment accruals		41,200,000
Non Fha Va Residential Mortgage Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Total TDR loans		354,094,000			349,775,000
Non Fha Va Residential Mortgage Loans [Member] | Non Accrual [Member]
Accounts Notes And Loans Receivable [Line Items]
Total TDR loans		80,204,000	[3],[4]		82,965,000	[5],[6]
Commercial And Industrial Loan [Member]
Accounts Notes And Loans Receivable [Line Items]
Interest Income on Impaired Loans Accrual Basis		1,968,000
Total TDR loans		166,736,000			171,926,000
Classified and non-performing loans sold		3,500,000
Commercial And Industrial Loan [Member] | Non Accrual [Member]
Accounts Notes And Loans Receivable [Line Items]
Total TDR loans		111,342,000	[3],[4]		40,382,000	[5],[6]
Commercial Mortgage Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Interest Income on Impaired Loans Accrual Basis		881,000
Total TDR loans		136,780,000			127,766,000
Commercial Mortgage Loans [Member] | Non Accrual [Member]
Accounts Notes And Loans Receivable [Line Items]
Total TDR loans		61,239,000	[3],[4]		58,392,000	[5],[6]
Construction Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Total gross loans held for investment portfolio		124,440,000		152,579,000
Total TDR loans		12,500,000
Consumer Loan [Member]
Accounts Notes And Loans Receivable [Line Items]
Total gross loans held for investment portfolio		1,937,182,000		2,072,252,000
Total TDR loans		35,000,000
Commercial Construction [Member]
Accounts Notes And Loans Receivable [Line Items]
Interest Income on Impaired Loans Accrual Basis		128,000
Total TDR loans		0			0
Commercial Construction [Member] | Non Accrual [Member]
Accounts Notes And Loans Receivable [Line Items]
Total TDR loans		0	[3],[4]		0	[5],[6]
Residential Construction [Member]
Accounts Notes And Loans Receivable [Line Items]
Interest Income on Impaired Loans Accrual Basis		44,000
Total TDR loans		10,060,000			10,037,000
Residential Construction [Member] | Non Accrual [Member]
Accounts Notes And Loans Receivable [Line Items]
Total TDR loans		6,588,000	[3],[4]		6,589,000	[5],[6]
Land Construction [Member]
Accounts Notes And Loans Receivable [Line Items]
Interest Income on Impaired Loans Accrual Basis		15,000
Total TDR loans		2,477,000			2,470,000
Land Construction [Member] | Non Accrual [Member]
Accounts Notes And Loans Receivable [Line Items]
Total TDR loans		1,698,000	[3],[4]		1,636,000	[5],[6]
In Process Of Foreclosure [Member]
Accounts Notes And Loans Receivable [Line Items]
Recorded Investment Amount In Consumer Mortgage Loans Collateralized By Residential Real Estate Property		161,100,000
P R
Accounts Notes And Loans Receivable [Line Items]
Credit risk concentration		83.00%
Outstanding of credit facilities granted		321,700,000
Line of credit facility provided to fund unfunded commitments		335,700,000
V I
Accounts Notes And Loans Receivable [Line Items]
Credit risk concentration		6.00%
Outstanding of credit facilities granted		61,000,000			57,700,000
U S
Accounts Notes And Loans Receivable [Line Items]
Credit risk concentration		11.00%
Credit Impaired Loans [Member] | Residential Mortgage [Member]
Accounts Notes And Loans Receivable [Line Items]
Financing Receivable Recorded Investment 30 To 59 Days Past Due Mortgage		32,000,000
Credit Impaired Loans [Member] | Residential Mortgage [Member]
Accounts Notes And Loans Receivable [Line Items]
Financing Receivable Recorded Investment 30 To 59 Days Past Due Mortgage					16,600,000
Credit Impaired Loans [Member] | Commercial Mortgage Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Financing Receivable Recorded Investment 30 To 59 Days Past Due Mortgage		$ 300,000			$ 8,800,000

[1] Excludes TDRs held for sale amounting to $45.7 million as of March 31, 2015.

[2] Excludes TDRs held for sale amounting to $45.7 million as of December 31, 2014.

[3] Included in non-accrual loans are $121.9 million in loans that are performing under the terms of a restructuring agreement but are reported in non-accrual status until the restructured loans meet the criteria of sustained payment performance under the revised terms for reinstatement to accrual status and there is no doubt about full collectability.

[4] Excludes non-accrual TDRs held for sale with a carrying value of $45.7 million as of March 31, 2015.

[5] Included in non-accrual loans are $52.8 million in loans that are performing under the terms of a restructuring agreement but are reported in non-accrual status until the restructured loans meet the criteria of sustained payment performance under the revised terms for reinstatement to accrual status and there is no doubt about full collectability.

[6] Excludes non-accrual TDRs held for sale with a carrying value of $45.7 million as of December 31, 2014.

XML

LOAN PORTFOLIO - Breakdown Between Accrual and Nonaccrual Status of TDRs (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015		Dec. 31, 2014		Mar. 31, 2014
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	$ 705,123	[1]	$ 694,453	[2]	$ 622,320
Non Fha Va Residential Mortgage Loans [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	354,094		349,775
Commercial Mortgage Loans [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	136,780		127,766
Commercial And Industrial Loan [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	166,736		171,926
Construction Loans [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	12,500
Consumer Auto Loans [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	17,547
Finance Leases [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	2,053		2,181
Other Consumer Loans [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	15,376		13,307
Commercial Construction [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	0		0
Residential Construction [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	10,060		10,037
Land Construction [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	2,477		2,470
Non Accrual [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	270,924	[3],[4]	199,813	[5],[6]
Non Accrual [Member] | Non Fha Va Residential Mortgage Loans [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	80,204	[3],[4]	82,965	[5],[6]
Non Accrual [Member] | Commercial Mortgage Loans [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	61,239	[3],[4]	58,392	[5],[6]
Non Accrual [Member] | Commercial And Industrial Loan [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	111,342	[3],[4]	40,382	[5],[6]
Non Accrual [Member] | Consumer Auto Loans [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	6,536	[3],[4]	6,433	[5],[6]
Non Accrual [Member] | Finance Leases [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	178	[3],[4]	255	[5],[6]
Non Accrual [Member] | Other Consumer Loans [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	3,139	[3],[4]	3,161	[5],[6]
Non Accrual [Member] | Commercial Construction [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	0	[3],[4]	0	[5],[6]
Non Accrual [Member] | Residential Construction [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	6,588	[3],[4]	6,589	[5],[6]
Non Accrual [Member] | Land Construction [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	1,698	[3],[4]	1,636	[5],[6]
Accrual [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	434,199		494,640
Accrual [Member] | Non Fha Va Residential Mortgage Loans [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	273,890		266,810
Accrual [Member] | Commercial Mortgage Loans [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	75,541		69,374
Accrual [Member] | Commercial And Industrial Loan [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	55,394		131,544
Accrual [Member] | Consumer Auto Loans [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	11,011		10,558
Accrual [Member] | Finance Leases [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	1,875		1,926
Accrual [Member] | Other Consumer Loans [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	12,237		10,146
Accrual [Member] | Commercial Construction [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	0		0
Accrual [Member] | Residential Construction [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	3,472		3,448
Accrual [Member] | Land Construction [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	779		834
Non Fha Va Residential Mortgage Loans [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	354,094		349,775
Commercial Mortgage Loans [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	136,780		127,766
Commercial And Industrial Loan [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	166,736		171,926
Consumer Auto Loans [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	17,547		16,991
Finance Leases [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	2,053		2,181
Other Consumer Loans [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	15,376		13,307
Commercial Construction [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	0		0
Residential Construction [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	10,060		10,037
Land Construction [Member]
Financing Receivable Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	$ 2,477		$ 2,470

[1] Excludes TDRs held for sale amounting to $45.7 million as of March 31, 2015.

[2] Excludes TDRs held for sale amounting to $45.7 million as of December 31, 2014.

[3] Included in non-accrual loans are $121.9 million in loans that are performing under the terms of a restructuring agreement but are reported in non-accrual status until the restructured loans meet the criteria of sustained payment performance under the revised terms for reinstatement to accrual status and there is no doubt about full collectability.

[4] Excludes non-accrual TDRs held for sale with a carrying value of $45.7 million as of March 31, 2015.

[5] Included in non-accrual loans are $52.8 million in loans that are performing under the terms of a restructuring agreement but are reported in non-accrual status until the restructured loans meet the criteria of sustained payment performance under the revised terms for reinstatement to accrual status and there is no doubt about full collectability.

[6] Excludes non-accrual TDRs held for sale with a carrying value of $45.7 million as of December 31, 2014.

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CONSOLIDATED STATEMENTS OF INCOME (LOSS) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Interest income:
Loans	$ 139,344	$ 144,843
Investment securities	12,604	15,228
Money market investments	537	500
Total interest income	152,485	160,571
Interest expense:
Deposits	17,694	20,299
Securities sold under agreements to repurchase	6,393	6,368
Advances from FHLB	934	824
Notes payable and other borrowings	1,817	1,760
Total interest expense	26,838	29,251
Net interest income (loss)	125,647	131,320
Provision for loan and lease losses	32,970	31,915
Net interest income after provision for loan and lease losses	92,677	99,405
Non-interest income:
Service charges on deposit accounts	4,555	4,127
Mortgage banking activities	3,618	3,368
Other-than-temporary impairment losses on investment securities:
Total other-than-temporary impairment losses	0	0
Portion of loss previously recognized in other comprehensive income	(156)	0
Net impairment losses on investment securities	(156)	0
Equity in losses of unconsolidated entities	0	(6,610)
Business Combination Bargain Purchase Gain Recognized Amount	13,443	0
Insurance income	3,022	2,571
Other non-interest income	8,247	7,894
Total non-interest income	32,729	11,350
Non-interest expenses:
Employees' compensation and benefits	35,654	32,898
Occupancy and equipment	14,349	14,318
Business promotion	2,868	3,973
Professional fees	15,218	10,493
Taxes, other than income taxes	3,001	4,575
Insurance and supervisory fees	6,860	10,990
Net loss on real estate owned (REO) and REO operations	2,628	5,837
Credit and debit processing fees	3,957	3,824
Communications	1,608	1,879
Other non-interest expenses	5,585	3,998
Total non-interest expenses	91,728	92,785
Income (loss) before income taxes	33,678	17,970
Income tax expense	(8,032)	(887)
Net income (loss)	25,646	17,083
Net income (loss) attributable to common stockholders - basic	$ 25,646	$ 17,462
Net income (loss) per common share:
Basic	$ 0.12	$ 0.08
Diluted	$ 0.12	$ 0.08
Dividends declared per common share	$ 0	$ 0

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INVESTMENT SECURITIES

3 Months Ended

Mar. 31, 2015

INVESTMENT SECURITIES

NOTE 5 – INVESTMENT SECURITIES

Investment Securities Available for Sale

The amortized cost, non-credit loss component of other-than-temporary impairment (“OTTI”)recorded in other comprehensive income (“OCI”), gross unrealized gains and losses recorded in OCI, approximate fair value, weightedaverage yield and contractual maturities of investment securities available for sale as of March 31, 2015 and December 31, 2014were as follows:

		March 31, 2015
		Amortized cost		Noncredit Loss Component of OTTI Recorded in OCI		Gross						Fair value		Weighted average yield%
								Unrealized
								gains			losses
		(Dollars in thousands)
U.S. Treasury securities:
	Due within one year	$	7,500	$	-	$	-		$	-		$	7,500	0.11
Obligations of U.S.
government-sponsored
agencies:
	After 1 to 5 years		278,054		-		318			1,918			276,454	1.25
	After 5 to 10 years		102,745		-		850			1,037			102,558	1.93
Puerto Rico government
obligations:
	After 1 to 5 years		39,836		-		-			16,922			22,914	4.49
	After 5 to 10 years		875		-		-			-			875	5.20
	After 10 years		24,821		-		1			7,148			17,674	5.37
United States and Puerto
Rico government
obligations:			453,831		-		1,169			27,025			427,975	1.90
Other (1)
Mortgage-backed securities:
FHLMC certificates:
	After 1 to 5 years		432		-		46			-			478	4.95
	After 10 years		304,628		-		2,733			560			306,801	2.17
			305,060		-		2,779			560			307,279	2.17
GNMA certificates:
	Due within one year		17		-		-			-			17	3.52
	After 1 to 5 years		55		-		2			-			57	3.93
	After 5 to 10 years		24,189		-		956			-			25,145	3.62
	After 10 years		316,122		-		21,942			-			338,064	3.85
			340,383		-		22,900			-			363,283	3.83
FNMA certificates:
	After 1 to 5 years		3,743		-		155			-			3,898	3.37
	After 5 to 10 years		16,924		-		646			31			17,539	2.90
	After 10 years		814,520		-		10,059			2,251			822,328	2.35
			835,187		-		10,860			2,282			843,765	2.37
Collateralized mortgage
	obligations issued or
	guaranteed by the FHLMC:
Other mortgage pass-through
trust certificates:
	Over 5 to 10 years		108		-		-			-			108	7.26
	After 10 years		43,012		11,296		-			-			31,716	2.15
			43,120		11,296		-			-			31,824	2.15
Total mortgage-backed
securities			1,523,750		11,296		36,539			2,842			1,546,151	2.65
Other (1)
	After 1 to 5 years		100		-		-			-			100	1.50
Total investment securities
	available for sale	$	1,977,681	$	11,296	$	37,708		$	29,867		$	1,974,226	2.48
(1)	Represents investment in a Community Investment Fund.

		December 31, 2014
		Amortized cost		Noncredit Loss Component of OTTI Recorded in OCI		Gross						Fair value		Weighted average yield%
								Unrealized
								gains			losses
		(Dollars in thousands)
U.S. Treasury securities:
	Due within one year	$	7,498	$	-	$	1		$	-		$	7,499	0.11
Obligations of U.S.
government-sponsored
agencies:
	After 1 to 5 years		260,889		-		42			4,219			256,712	1.22
	After 5 to 10 years		78,234		-		246			2,077			76,403	1.72
Puerto Rico government
obligations:
	After 1 to 5 years		39,827		-		-			12,419			27,408	4.49
	After 5 to 10 years		886		-		1			-			887	5.20
	After 10 years		20,498		-		-			5,571			14,927	5.83
United States and Puerto
Rico government
obligations:			407,832		-		290			24,286			383,836	1.86
Mortgage-backed securities:
FHLMC certificates:
	After 10 years		315,311		-		1,743			1,260			315,794	2.17
GNMA certificates:
	After 1 to 5 years		39		-		1			-			40	3.26
	After 5 to 10 years		17,108		-		501			-			17,609	3.65
	After 10 years		338,842		-		20,957			-			359,799	3.83
			355,989		-		21,459			-			377,448	3.83
FNMA certificates:
	After 1 to 5 years		4,160		-		181			-			4,341	3.40
	After 5 to 10 years		9,584		-		521			5			10,100	3.49
	After 10 years		837,597		-		7,756			4,854			840,499	2.36
			851,341		-		8,458			4,859			854,940	2.37
Collateralized mortgage
	obligations issued or
	guaranteed by the FHLMC:
Other mortgage pass-through
trust certificates:
	Over 5 to 10 years		111		-		1			-			112	7.27
	After 10 years		45,677		12,141		-			-			33,536	2.17
			45,788		12,141		1			-			33,648	2.17
Total mortgage-backed
	securities		1,568,429		12,141		31,661			6,119			1,581,830	2.66
Equity securities (without
Total investment securities
	available for sale	$	1,976,261	$	12,141	$	31,951		$	30,405		$	1,965,666	2.49

Maturities of mortgage-backed securities are based on contractual terms assuming no prepayments. Expected maturities of investments might differ from contractual maturities because they may be subject to prepayments and/or call options. The weighted average yield on investment securities available for sale is based on amortized cost and, therefore, does not give effect to changes in fair value. The net unrealized gain or loss on securities available for sale and the noncredit loss component of OTTI are presented as part of OCI.

The following tables show the Corporation's available-for-sale investments' fair value and gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of March 31, 2015 and December 31, 2014. The tables also include debt securities for which an OTTI was recognized and only the amount related to a credit loss was recognized in earnings. Unrealized losses for which OTTI had been recognized have been reduced by any subsequent recoveries in fair value.

	As of March 31, 2015
	Less than 12 months				12 months or more				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
		(In thousands)
Debt securities:
Puerto Rico government obligations	$	-	$	-	$	36,314	$	24,070	$	36,314	$	24,070
U.S. government agencies obligations		4,999		-		261,252		2,955		266,251		2,955
Mortgage-backed securities:
FNMA		311,339		1,195		99,932		1,087		411,271		2,282
FHLMC		110,475		352		21,419		208		131,894		560
Collateralized mortgage
obligations issued or
Other mortgage pass-through
trust certificates		-		-		31,716		11,296		31,716		11,296
Corporate bonds
	$	426,813	$	1,547	$	450,633	$	39,616	$	877,446	$	41,163
	As of December 31, 2014
	Less than 12 months				12 months or more				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
		(In thousands)
Debt securities:
Puerto Rico government obligations	$	-	$	-	$	42,335	$	17,990	$	42,335	$	17,990
U.S. government agencies obligations		46,436		74		257,996		6,222		304,432		6,296
Mortgage-backed securities:
FNMA		2,038		5		541,642		4,854		543,680		4,859
FHLMC		-		-		135,277		1,260		135,277		1,260
Collateralized mortgage
obligations issued or
Other mortgage pass-through
trust certificates		-		-		33,536		12,141		33,536		12,141
	$	48,474	$	79	$	1,010,786	$	42,467	$	1,059,260	$	42,546

Assessment for OTTI

On a quarterly basis, the Corporation performs an assessment to determine whether there have been any events or economic circumstances indicating that a security with an unrealized loss has suffered an OTTI. A debt security is considered impaired if the fair value is less than its amortized cost basis at the reporting date. The accounting literature requires the Corporation to assess whether the unrealized loss is otherthantemporary.

OTTI losses must be recognized in earnings if an investor has the intent to sell the debt security or it is more likely than not that it will be required to sell the debt security before recovery of its amortized cost basis. However, even if an investor does not expect to sell a debt security, it must evaluate expected cash flows to be received and determine if a credit loss has occurred.

An unrealized loss is generally deemed to be other-than-temporary and a credit loss is deemed to exist if the present value of the expected future cash flows is less than the amortized cost basis of the debt security. The credit loss component of an OTTI, if any, is recorded as a component of net impairment losses on investment securities in the accompanying consolidated statements of income, while the remaining portion of the impairment loss is recognized in OCI, provided the Corporation does not intend to sell the underlying debt security and it is “more likely than not” that the Corporation will not have to sell the debt security prior to recovery.

Debt securities issued by U.S. government agencies, government-sponsored entities and theTreasury accounted for approximately96% of the total available-for-sale portfolio as of March 31, 2015 and no credit losses are expected, given the explicit and implicit guarantees provided by the U.S. federal government. The Corporation's assessment for OTTI was concentrated mainly on private label mortgage-backed securities (“MBS”) with an amortized cost of $43.0million for which credit losses are evaluated on a quarterly basis and on Puerto Rico Government obligations held as part of the available-for-sale securities portfolio. The Corporation considered the following factors in determining whether a credit loss exists and the period over which the debt security is expected to recover:

• The length of time and the extent to which the fair value has been less than the amortized cost basis;
• Changes in the near term prospects of the underlying collateral of a security such as changes in default rates, loss severity given default, and significant changes in prepayment assumptions;
• The level of cash flows generated from the underlying collateral supporting the principal and interest payments on the debt securities; and
• Any adverse change to the credit conditions and liquidity of the issuer, taking into consideration the latest information available about the overall financial condition of the issuer, credit ratings, recent legislation and government actions affecting the issuer's industry and actions taken by the issuer to deal with the present economic climate.

The Corporation recorded OTTI losses on available-for-sale debt securities as follows:

	Private Label MBS
	Quarter ended March 31,
	2015		2014
(In thousands)
Total other-than-temporary impairment losses	$	-	$	-
Credit loss on debt securities for which an OTTI was not previously recognized
Portion of other-than-temporary impairment losses
previously recognized in OCI		(156)		-
Net impairment losses recognized in earnings	$	(156)	$	-

The following table summarizes the roll-forward of credit losses on debt securities held by the Corporation for which a portion of an OTTI is recognized in OCI:
	Quarter ended March 31,
	2015		2014
(In thousands)
Credit losses at the beginning of the period	$	5,777	$	5,389
Additions:
Credit losses on debt securities for which an
OTTI was previously recognized		156		-
Ending balance of credit losses on debt securities held for
which a portion of an OTTI was recognized in OCI	$	5,933	$	5,389

For the first quarter of 2015, the $156thousandcredit related impairment loss is related to private label MBS, which are collateralized by fixed-rate mortgages on single-family residential properties in the United States. The interest rates on these private-label MBS are variable, tied to 3-month LIBOR and limited to the weighted-average coupon of the underlying collateral. The underlying mortgages are fixed-rate single-family loans with original high FICO scores (over 700) and moderate original loan-to-value ratios (under 80%), as well as moderate delinquency levels.

Based on the expected cash flows derived from the model, and since the Corporation does not have the intention to sell the securities and has sufficient capital and liquidity to hold these securities until a recovery of the fair value occurs, only the credit loss component was reflected in earnings. Significant assumptions in the valuation of the private label MBS were as follows:

	March 31, 2015		December 31, 2014
	Weighted		Weighted
	Average	Range	Average	Range
Discount rate	14.5%	14.5%	14.5%	14.5%
Prepayment rate	32%	18.04%-100.00%	32%	19.89%-100.00%
Projected Cumulative Loss Rate	7.3%	0.00%-80.00%	7.9%	0.64%-80.00%

As of March 31, 2015, the Corporation held approximately $65.5million of Puerto Rico government and agenciesbond obligations, mainly bonds of the Government Development Bank (“GDB”) and the Puerto Rico Building Authority, as part of its available-for-sale investment securities portfolio, which were reflected at their aggregate fair value of $41.5million. During the first quarter of 2015, the fair value of these obligation decreased by $6.1 million. In February and March 2014, Standard & Poor's (“S&P”), Moody's Investor Service (“Moody's”) and Fitch Ratings (“Fitch”) downgraded the Commonwealth of Puerto Rico general obligations bonds and other obligations of Puerto Rico instrumentalities to non-investment grade categories.In February and April 2015, Moody's and S&P downgraded the Puerto Rico's general obligation debt further and right now is ratedseven notches below investment grade.

The issuers of Puerto Rico government and agencies bonds held by the Corporation have not defaulted, and the contractual payments on these securities have been made as scheduled. The Corporation has the ability and intent to hold these securities until a recovery of the fair value occurs, and it is not more likely than not that the Corporation will be required to sell the securities prior to such recovery. It is uncertain how the financial markets may react to any potential further rating downgrade of Puerto Rico's debt. However, further deterioration in the fiscal situation could further adversely affect the value of Puerto Rico's government obligations. The Corporation will continue to closely monitor Puerto Rico's political and economic status and evaluate the portfolio for any declines in value thatcould be considered other-than-temporary.

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STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2015

STOCK-BASED COMPENSATION

NOTE 4 – STOCK-BASED COMPENSATION

As of January 21, 2007, the Corporation's 1997 stock option plan expired and no additional awards could be granted under that plan. All outstanding awards granted under this plan havecontinue in full force and effect since then, subject to their original terms.

The activity of stock options granted under the 1997 stock option plan for the quarter ended March 31, 2015 is set forth below:
	Number of Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (In thousands)
Beginning of period outstanding
and exercisable	82,575	$	187.75
Options expired	(11,395)		358.80
Options cancelled	(1,332)		164.10
End of period outstanding and
exercisable	69,848	$	160.30	1.3	$	-

On April 29, 2008, the Corporation's stockholders approved the First BanCorp 2008 Omnibus Incentive Plan(the “Omnibus Plan”). The Omnibus Plan provides for equity-based compensation incentives (the “awards”) through the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, and other stock-based awards. The Omnibus Plan authorizes the issuance of up to 8,169,807 shares of common stock, subject to adjustments for stock splits, reorganizations, and other similar events. The Corporation's Board of Directors, upon receiving the relevant recommendation of the Compensation Committee, has the power and authority to determine those eligible to receive awards and to establish the terms and conditions of any awards, subject to various limits and vesting restrictions that apply to individual and aggregate awards.

Under the Omnibus Plan,during the first quarter of 2015,30,068 shares of restricted stock were awarded to one of the Corporation's independent directors of which4,295shares vest in one year and the remaining 25,773shares vest in five years. In addition, in the first quarter of 2015, the Corporation issued 791,464shares of restricted stock that will vest based on the employees' continued service with the Corporation. For 40,000 of the 791,464 shares awarded to employees, the requisite serviceperiod is approximately three months. For the remaining 751,464 shares granted to employees, fifty percent (50%) of those shares vest in two years from the grant date and the remaining 50% percent vest in three years from the grant date. Included in those751,464 shares of restricted stock are 615,464 shares granted to certain senior officers consistent with the requirements of the Troubled Asset Relief Program (“TARP”) Interim Final Rule,which permit TARP recipients to grant “long-term restricted stock” without violating the prohibition on paying or accruing a bonus payment provided that: (i) the value of the grant may not exceed one-third of the amount of the employee's annual compensation, (ii) no portion of the grant may vest before two years after the grant date, and (iii) the grant must be subject to a further restriction on transfer or payment as described below. Specifically, the stock that has otherwise vested may not become transferable at any time earlier than as permitted under the schedule set forth by TARP, which is based on the repayment in 25% increments of the aggregate financial assistance received from the U.S. Treasury.Hence, notwithstanding the vesting period mentioned above, the employees covered by TARP are restricted from transferring the shares.The U.S. Treasury confirmedthat, effective March 2014, it has recovered more than a 25% of its investment in First BanCorp.Therefore, the restriction on transferrelating to25% of the shares granted under TARP requirements was released.

The fair value of the shares of restricted stock granted in the first quarter of 2015 was based on the market price of the Corporation's outstanding common stock on the date of the grant. For the 615,464 shares of restricted stock granted under the TARP requirements, the market price was discounted due to account for TARP transferability restrictions.For purposes of determining the awards fair value, the Corporation estimated an appreciation of 14% in the value of the common stock using the Capital Asset Pricing Model as a basis of what would be a market participant's expected return on the Corporation's stock and assumed that the Treasury would hold the common stock of the Corporation that it currently owns for a period not to exceed one year, resulting in a fair value of $3.18for restricted shares granted under the TARP requirements. Also, the Corporation used empirical data to estimate employee terminations; separate groups of employees that have similar historical exercise behavior were considered separately for valuation purposes.

The following table summarizes the restricted stock activity in 2015 under the Omnibus Plan for both executive officers covered by the TARP requirements and other employees as well as for the independent directors:
	Quarter Ended
	March 31, 2015
	Number of
	shares of		Weighted-Average
	restricted		Grant Date
	stock		Fair Value
Non-vested shares at beginning of period	2,327,156	$	3.39
Granted	821,532		3.92
Forfeited	(8,500)		5.07
Vested	(63,750)		4.00
Non-vested shares at March 31, 2015	3,076,438	$	3.51

For the quartersended March 31, 2015 and 2014, the Corporation recognized $1.0million and $0.4 million, respectively, of stock-based compensation expense related to restricted stock awards. As of March 31, 2015, there was $6.0million of total unrecognized compensation cost related to non-vested shares of restricted stock. The weighted average period over which the Corporation expects to recognize such cost is 2.3 years.

During the first quarter of 2014, the Corporation issued 810,138 shares of restricted stock that will vest based on the employees' continued service with the Corporation. Fifty percent (50%) of those shares vest in two years from the grant date and the remaining 50% percent vest in three years from the grant date. Included in those 810,138 shares of restricted stock are 653,138 shares granted to certain senior officers consistent with the requirements of TARP.The employees covered by TARP are restricted from transferring the shares, subject to certain conditions as explained above.

The fair value of the shares of restricted stock granted in the first quarter of 2014 was based on the market price of the Corporation's outstanding common stock on the date of the grant. For the 653,138 shares of restricted stock granted under the TARP requirements, the market price was discounted due to the postvesting restrictions. For purposes of computing the discount, the Corporation estimated an appreciation of 16% in the value of the common stock using the Capital Asset Pricing Model as a basis of what would be a market participant's expected return on the Corporation's stock and assumed that the Treasury would hold the common stock of the Corporation that it owned as of the date of the grants for an additional two years, resulting in a fair value of $2.63 for restricted shares granted under the TARP requirements.

Stock-based compensation accounting guidance requires the Corporation to develop an estimate of the number of share-based awards that will be forfeited due to employee or director turnover. Quarterly changes in the estimated forfeiture rate may have a significant effect on share-based compensation, as the effect of adjusting the rate for all expense amortization is recognized in the period in which the forfeiture estimate is changed. If the actual forfeiture rate is higher than the estimated forfeiture rate, then an adjustment is made to increase the estimated forfeiture rate, which will result in a decrease in the expense recognized in the financial statements. If the actual forfeiture rate is lower than the estimated forfeiture rate, then an adjustment is made to decrease the estimated forfeiture rate, which will result in an increase in the expense recognized in the financial statements. When unvested options or shares of restricted stock are forfeited, any compensation expense previously recognized on the forfeited awards is reversed in the period of the forfeiture.Approximately $26thousandand $5thousandof compensation expense wasreversed during the first quarter of 2015and 2014, respectively, related to forfeited awards.

Also, under the Omnibus Plan, effective April 1, 2013, the Corporation's Board of Directors determined to increase the salary amounts paid to certain executive officers primarily by paying the increased salary amounts in the form of shares of the Corporation's common stock, instead of cash. During the first quarter of 2015, the Corporation issued80,234 shares of common stock with a weighted average market value of $6.02as salary stock compensation. This resulted in a compensation expense of $0.4million recorded in the first quarter of 2015.

For the quarter ended March 31, 2015, the Corporation withheld 28,183sharesfrom the common stock paid to certain senior officers as additional compensation and 22,525 shares of the restricted stock that vested during the first quarter of 2015 to cover employees' payroll and income tax withholding liabilities; these shares are held as treasury shares. The Corporation paid any fractional share of salary stock that the officer was entitled to in cash. In the consolidated financial statements, the Corporation treats shares withheld for tax purposes as common stock repurchases.

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SEGMENT INFORMATION - Reconciliation of Reportable Segment Financial Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014
Net Income (Loss):
Total income for segments and other	$ 47,258		$ 45,570
Other non-interest income (loss)	13,443	[1]	(6,610)	[1]
Other operating expenses	(27,023)	[2]	(20,990)	[2]
Income (loss) before income taxes	33,678		17,970
Income tax expense	(8,032)		(887)
Total consolidated net income (loss)	25,646		17,083
Average assets:
Total average earning assets for segments	11,940,989		12,096,474
Other average earning assets	0	[1]	6,570	[1]
Average non-earning assets	934,999		671,146
Total consolidated average assets	$ 12,875,988		$ 12,774,190

[1] The bargain purchase gain on the acquisition of assets and assumption of deposits from Doral Bank in 2015 as well as the activities related to the Bank's equity interest in CPG/GS are presented as an Other non-interest income (loss) and the investment in CPG/GS is presented as Other average earning assets in the tables above.

[2] Expenses pertaining to corporate administrative functions that support the operating segment but are not specifically attributable to or managed by any segment are not included in the reported financial results of the operating segments. The unallocated corporate expenses include certain general and administrative expenses and related depreciation and amortization expenses.

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SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

3 Months Ended

Mar. 31, 2015

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

NOTE 16 – SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Securities sold under agreements to repurchase (repurchase agreements) consist of the following:
		March, 31		December 31,
		2015		2014
		(Dollars in thousands)
Repurchase agreements, interest ranging from 1.96% to 3.33%
(December 31, 2014: 2.45% to 4.50%) (1)		$	900,000	$	900,000
(1)	As of March 31, 2015, includes $800 million with an average rate of 2.71% that lenders have the right to call before their contractual maturities at various dates beginning on April 9, 2015. Subsequent to April 9, 2015, no lender has exercised its call option on repurchase agreements. In addition, $700 million is tied to variable rates.

In the first quarter of 2015, the Corporation restructured $400 million of its repurchase agreements, $200 million of which were restructured by extending the contractual maturity and changing from a fixed interest rate to a variable rate, and entered into $200 million of reverse repurchase agreements with the same counterparty (effective April, 2015) under a master netting arrangement that provides for a right to setoff that meets the conditions of ASC 210-20-45-11. These repurchase agreements and reverse repurchase agreements will be presented net on the consolidated statement of financial condition beginning in the second quarter of 2015. In addition, in the first quarter of 2015, the Corporation restructured an additional $200 million of its repurchase agreements with a different counterparty by extending the contractual maturity and reducing the interest rate in these agreements.

Repurchase agreements mature as follows:
		March 31, 2015
		(In thousands)
	One year to three years	$	500,000
	Over five years		400,000
	Total	$	900,000

As of March 31, 2015 and December 31, 2014, the securities underlying such agreements were delivered to the dealers with which the repurchase agreements were transacted.

Repurchase agreements as of March 31, 2015, grouped by counterparty, were as follows:
	(Dollars in thousands)			Weighted-Average
	Counterparty	Amount		Maturity (In Months)
	Citigroup Global Markets	$	300,000	19
	JP Morgan Chase		200,000	82
	Dean Witter / Morgan Stanley		100,000	31
	Credit Suisse First Boston		300,000	60
		$	900,000

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OFFSETTING OF ASSETS AND LIABILITIES

3 Months Ended

Mar. 31, 2015

Text Block [Abstract]

OFFSETTING OF ASSETS AND LIABILITIES

NOTE 12–OFFSETTING OF ASSETS AND LIABILITIES

The Corporation enters into master agreements with counterparties that may allow for netting of exposures in the event of default, primarily related to derivatives and repurchase agreements. In an event of default, each party has a right of set-off against the other party for amounts owed in the related agreement and any other amount or obligation owed in respect of any other agreement or transaction between them. The following table presents information about the offsetting of financial assets and liabilities as well as derivative assets and liabilities:

Offsetting of Financial Assets and Derivative Assets
In thousands
As of March 31, 2015
							Gross Amounts Not Offset in the Statement of Financial Position
					Net Amounts of Assets Presented in the Statement of Financial Position
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position
									Financial Instruments		Cash Collateral Received
													Net Amount
Description
Derivatives	$	1	$	-	$	1	$	(1)	$	-	$	-
As of December 31, 2014
							Gross Amounts Not Offset in the Statement of Financial Position
					Net Amounts of Assets Presented in the Statement of Financial Position
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position
									Financial Instruments		Cash Collateral
													Net Amount
Description
Derivatives	$	6	$	-	$	6	$	(6)	$	-	$	-

Offsetting of Financial Liabilities and Derivative Liabilities
In thousands
As of March 31, 2015
							Gross Amounts Not Offset in the Statement of Financial Position
					Net Amounts of Liabilities Presented in the Statement of Financial Position
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position
									Financial Instruments		Cash Collateral Received
													Net Amount
Description
Repurchase agreements		600,000		-		600,000		(600,000)		-		-
Total	$	600,000	$	-	$	600,000	$	(600,000)	$	-	$	-
As of December 31, 2014
							Gross Amounts Not Offset in the Statement of Financial Position
					Net Amounts of Liabilities Presented in the Statement of Financial Position
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position
									Financial Instruments		Cash Collateral
													Net Amount
Description
Derivatives	$	33	$	-	$	33	$	(33)	$	-	$	-
Repurchase agreements		600,000		-		600,000		(600,000)		-		-
Total	$	600,033	$	-	$	600,033	$	(600,033)	$	-	$	-

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LOAN PORTFOLIO- Carrying Value of Purchased Credit Impaired Loans (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015		Dec. 31, 2014
Financing Receivable Impaired [Line Items]
Purchased Credit Impaired Loans	$ 181,114		$ 102,604
Residential Mortgage Loans [Member]
Financing Receivable Impaired [Line Items]
Purchased Credit Impaired Loans	177,601	[1]	98,494	[2]
Commercial Mortgage Loans [Member]
Financing Receivable Impaired [Line Items]
Purchased Credit Impaired Loans	3,279	[1]	3,393	[2]
Consumer Credit Card Financing Receivable [Member]
Financing Receivable Impaired [Line Items]
Purchased Credit Impaired Loans	$ 234		$ 717

[1] According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage, commercial mortgage, and construction loans are considered past due when the borrower is in arrears two or more monthly payments. FHA/VA government guaranteed loans, other residential mortgage loans, commercial mortgage loans, land loans and construction-residential loans past due 30-59 days as of March 31, 2015 amounted to $12.2 million, $177.4 million, $38.4 million, $6.1 million, and $1.6 million, respectively.

[2] According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage, commercial mortgage, and construction loans are considered past due when the borrower is in arrears two or more monthly payments. FHA/VA government guaranteed loans, other residential mortgage loans, commercial mortgage loans, land loans and construction-residential loans past due 30-59 days as of December 31, 2014 amounted to $14.0 million, $189.1 million, $20.8 million, $0.8 million and $1.0 million , respectively.

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ALLOWANCE FOR LOAN AND LEASE LOSSES

3 Months Ended

Mar. 31, 2015

ALLOWANCE FOR LOAN AND LEASE LOSSES

NOTE8 – ALLOWANCEFORLOANAND LEASELOSSES

The changes in the allowance for loan and lease losses were as follows:
(In thousands)	Residential Mortgage Loans		Commercial Mortgage Loans		Commercial & Industrial Loans		Construction Loans		Consumer Loans		Total
Quarter ended March 31, 2015
Allowance for loan and lease losses:
Beginning balance	$	27,301	$	50,894	$	63,721	$	12,822	$	67,657	$	222,395
Charge-offs		(5,192)		(4,006)		(4,453)		(605)		(17,757)		(32,013)
Recoveries		98		276		558		207		1,573		2,712
Provision		6,475		(2,137)		10,353		1,215		17,064		32,970
Ending balance	$	28,682	$	45,027	$	70,179	$	13,639	$	68,537	$	226,064
Ending balance: specific reserve for
impaired loans	$	14,862	$	13,238	$	24,871	$	3,381	$	5,788	$	62,140
Ending balance: purchased credit-impaired loans	$	-	$	-	$	-	$	-	$	-	$	-
Ending balance: general allowance	$	13,820	$	31,789	$	45,308	$	10,258	$	62,749	$	163,924
Loans held for investment:
Ending balance	$	3,331,620	$	1,649,263	$	2,442,867	$	124,440	$	1,937,182	$	9,485,372
Ending balance: impaired loans	$	429,526	$	224,365	$	226,656	$	37,593	$	36,841	$	954,981
Ending balance: purchased credit-
impaired loans	$	177,601	$	3,279	$	-	$	-	$	234	$	181,114
Ending balance: loans with general allowance	$	2,724,493	$	1,421,619	$	2,216,211	$	86,847	$	1,900,107	$	8,349,277

(In thousands)	Residential Mortgage Loans		Commercial Mortgage Loans		Commercial & Industrial Loans		Construction Loans		Consumer Loans		Total
Quarter ended March 31, 2014
Allowance for loan and lease losses:
Beginning balance	$	33,110	$	73,138	$	85,295	$	35,814	$	58,501	$	285,858
Charge-offs		(6,422)		(5,810)		(22,459)		(970)		(18,046)		(53,707)
Recoveries		69		35		663		617		1,328		2,712
Provision		3,751		(851)		16,091		(8,050)		20,974		31,915
Ending balance	$	30,508	$	66,512	$	79,590	$	27,411	$	62,757	$	266,778
Ending balance: specific reserve for
impaired loans	$	17,273	$	29,833	$	19,098	$	15,154	$	3,658	$	85,016
Ending balance: purchased credit-impaired loans	$	-	$	-	$	-	$	-	$	-	$	-
Ending balance: general allowance	$	13,235	$	36,679	$	60,492	$	12,257	$	59,099	$	181,762
Loans held for investment:
Ending balance	$	2,548,101	$	1,846,016	$	2,947,837	$	152,579	$	2,072,252	$	9,566,785
Ending balance: impaired loans	$	419,308	$	219,860	$	151,653	$	58,636	$	29,931	$	879,388
Ending balance: purchased credit-
impaired loans	$	-	$	-	$	-	$	-	$	3,383	$	3,383
Ending balance: loans with general allowance	$	2,128,793	$	1,626,156	$	2,796,184	$	93,943	$	2,038,938	$	8,684,014

During the second quarter of 2014, the Corporation made certain enhancements to the general allowance estimation process for commercial loans, which mainly consisted of the following:

Utilization of longer historical loss periods to better reflect the level of incurred losses in the portfolio. Historical charge-off rates are calculated by the Corporation on a quarterly basis by tracking cumulative charge-offs experienced over a two-year loss period on loans according to their internal risk rating (referred to as “base rate” for the quarter). Prior to the second quarter 2014 enhancements, the Corporation would use the base rate of the current quarter or the average of the last 4 quarters, if greater. During the second quarter of 2014, the Corporation eliminated the use of the “greater of” approach and began to use the base rate average of the last 8 quarters. This change captures a longer historical period that helps mitigate period to period volatility in the loss rates.

Enhancements of the environmental factors adjustment. Prior to the second quarter of 2014 enhancements, these adjustments were applied in the form of basis point additions to the loss ratio based on changes in credit and economic indicators observed in the most recent periods. Beginning in the second quarter of 2014, the resulting factor derived from a set of risk-based ratings and weights assigned to credit and economic indicators over a reasonable period is applied to a developed expected range of historical losses, in order to adjust the base rates. These enhancements result in a framework that can be applied more consistently, by having a more granular analysis that better captures trends in economic conditions and the impact on the Corporation's portfolio.

In addition, the calculation of loss rates for asset classifications with limited or zero loss history was improved to consider these loans' migration experience.

At the date of implementation, the Corporation performed a parallel computation of the general reserve for commercial loans. The enhancements to the general allowance estimation process resulted in a net decrease to the allowance for loan losses of $4.8 million as of the implementation date of May 31, 2014.

During the third quarter of 2014, similar enhancements to the environmental factors adjustment framework were applied to the consumer loans portfolio. The framework was defined for secured and unsecured loans to consider the specific behaviors separately. With respect to the historical charge-off rates, during the third quarter of 2014, the Corporation adopted the utilization of the base rate calculated as the average of the net charge-off ratio for the 12-month period preceding the most recent four quarters. Previously, the base rate was calculated as the average of the last two years' annual net charge-off ratio. The effect of these enhancements on the allowance for consumer loans was immaterial as of the implementation date of August 31, 2014.

Asof March 31, 2015, the Corporation maintained a $0.5 million reserve for unfunded loan commitments mainly related to outstanding construction and commercial and industrial loan commitments. The reserve for unfunded loan commitments is an estimate of the losses inherent in off-balance sheet loan commitments to borrowers that are experiencing financial difficulties at the balance sheet date. It is calculated by multiplying an estimated loss factor by an estimated probability of funding, and then by the period-end amounts for unfunded commitments. The reserve for unfunded loan commitments is included as part of accounts payable and other liabilities in the consolidated statement of financial condition.

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STOCK-BASED COMPENSATION - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Apr. 29, 2008
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Granted shares of restricted stock	821,532
Restricted stock granted to Board of Directors	(63,750)
Stock based compensation expense unrecognized related to nonvested shares of restricted stock	$ 6,000,000
Period for cost recognition not yet recognized	2 years 3 months 18 days
Weighted-Average Grant Date Fair Value of Stocks	$ 3.92
Holding Period By The Us Treasury Of Outstanding Common Stock	1 year 0 months 0 days	2 years 0 months 0 days
Repurchased of common stock	50,708
Stock Issued During Period Value Restricted Stock Award Forfeitures	26,000	5,000
Restricted Stock Vested Subject To Tarp Percentage		25.00%
Board Of Directors [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Granted shares of restricted stock	30,068
Maximum [Member] | Board Of Directors [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock vesting period		5 years 0 months 0 days
Minimum [Member] | Board Of Directors [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock vesting period		1 year 0 months 0 days
Senior Executives
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Granted shares	80,234
Share based compensation cost	400,000
Weighted-Average Grant Date Fair Value of Stocks	$ 6.02
Repurchased of common stock	28,183
Management [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Granted shares of restricted stock	791,464
Omnibus Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Authorized granting up shares			8,169,807
Troubled Asset Relief Program [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage increments repayment under TARP		25.00%
Percentage of appreciation	14.00%
Troubled Asset Relief Program [Member] | Management [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Fair Value Of Restricted Stock Granted	$ 3.18
Restricted Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share based compensation cost	$ 1,000,000	$ 400,000
Repurchased of common stock	22,525
First Fifty Percentage Restricted Stock Nonvest Awards [Member] | Management [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock vesting period	2 years 0 months 0 days	2 years 0 months 0 days
Other Fifty Percentage Restricted Stock Nonvest Awards [Member] | Management [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock vesting period	3 years 0 months 0 days	3 years 0 months 0 days
Three Months Requisite Service Period [Member] | Management [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Granted shares of restricted stock	40,000
After Two To Three Years Vesting Period [Member] | Management [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of Share vest during period	50.00%	50.00%
Remaining percentage of share vest during period	50.00%	50.00%
Granted shares of restricted stock	751,464	810,138
After Two To Three Years Vesting Period [Member] | Troubled Asset Relief Program [Member] | Management [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Granted shares of restricted stock	615,464	653,138
Fair Value Of Restricted Stock Granted		$ 2.63
Percentage of appreciation		16.00%
Granted Shares With One Year Vesting Period [Member] | Board Of Directors [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Granted shares of restricted stock	4,295
Granted Shares With Five Year Vesting Period [Member] | Board Of Directors [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Granted shares of restricted stock	25,773

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NON-CONSOLIDATED VARIABLE INTEREST ENTITIES AND SERVICING ASSETS - Changes in Servicing Assets (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014
Servicing Assets At Amortized Value [Line Items]
Balance at beginning of period	$ 22,838		$ 21,987
Capitalization of servicing assets	1,073		1,052
Amortization	(856)		(783)
Adjustment to servicing assets for loans repurchased	(44)	[1]	(11)	[1]
Adjustment to fair value	(38)		(219)
Balance at end of period	$ 22,973		$ 22,026

[1] Amount represents the adjustment to fair value related to the repurchase of loans serviced for others.

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OTHER EQUITY SECURITIES

3 Months Ended

Mar. 31, 2015

OTHER EQUITY SECURITIES

NOTE6 – OTHER EQUITY SECURITIES

Institutions that are members of the FHLB system are required to maintain a minimum investment in FHLB stock. Such minimum investment is calculated as a percentage of aggregate outstanding mortgages, and an additional investment is required that is calculated as a percentage of total FHLB advances, letters of credit, and the collateralized portion of interest-rate swaps outstanding. The stock is capital stock issued at $100 par value. Both stock and cash dividends may be received on FHLB stock.

As of March 31, 2015 and December 31, 2014, the Corporation had investments in FHLB stock with a book value of $25.5million. The net realizable value is a reasonable proxy for the fair value of these instruments. Dividend income from FHLB stock foreach of the quarters ended March 31, 2015 and 2014was$0.3million.

The shares of FHLB stock owned by the Corporation were issued by the FHLB of New York.The FHLB of New York is part of the Federal Home Loan Bank System, a national wholesale banking network of 12 regional, stockholder-owned congressionally chartered banks. The Federal Home Loan Banks are all privately capitalized and operated by their member stockholders. The system is supervised by the Federal Housing Finance Agency, which ensures that the Federal Home Loan Banks operate in a financially safe and sound manner, remain adequately capitalized and able to raise funds in the capital markets, and carry out their housing finance mission.

The Corporation has other equity securities that do not have a readily available fair value. The carrying value of such securities as of March 31, 2015 and December 31, 2014 was $0.7million and $0.3 million, respectively.

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LOAN PORTFOLIO

3 Months Ended

Mar. 31, 2015

LOAN PORTFOLIO

NOTE 7 – LOANS HELD FOR INVESTMENT

The following provides information about the loan portfolio held for investment:

		March 31,		December 31,
			2015		2014
(In thousands)
Residential mortgage loans, mainly secured by first mortgages		$	3,331,620	$	3,011,187
Commercial loans:
Construction loans			124,440		123,480
Commercial mortgage loans			1,649,263		1,665,787
Commercial and Industrial loans (1)			2,442,867		2,479,437
Loans to local financial institution collateralized by
Total Commercial loans			4,216,570		4,268,704
Finance leases			230,183		232,126
Consumer loans			1,706,999		1,750,419
Loans held for investment			9,485,372		9,262,436
Allowance for loan and lease losses			(226,064)		(222,395)
Loans held for investment, net		$	9,259,308	$	9,040,041
__________
(1)	As of March 31, 2015 and December 31, 2014, includes $1.1 billion of commercial loans that are secured by real estate but are not dependent upon the real estate for repayment.

Loans held for investment on which accrual of interest income had been discontinued as of the indicated dates were as follows:
(In thousands)		March 31,		December 31,
		2015		2014
Non-performing loans:
Residential mortgage		$	172,583	$	180,707
Commercial mortgage			142,385		148,473
Commercial and Industrial			186,500		122,547
Construction:
Land			14,091		15,030
Construction-residential			13,072		14,324
Consumer:
Auto loans			19,043		22,276
Finance leases			2,979		5,245
Other consumer loans			12,891		15,294
Total non-performing loans held for investment (1)(2)(3)		$	563,544	$	523,896
_______________
(1)	As of March 31, 2015 and December 31, 2014, excludes $54.6 million of non-performing loans held for sale.
(2)	Amount excludes purchased-credit impaired ("PCI") loans with a carrying value of approximately $181.1 million and $102.6 million as of March 31, 2015 and December 31, 2014, respectively, primarily mortgage loans acquired from Doral Bank in the first quarter of 2015 and second quarter of 2014, as further discussed below. These loans are not considered non-performing due to the application of the accretion method, under which these loans will accrete interest income over the remaining life of the loans using an estimated cash flow analysis.
(3)	Non-performing loans exclude $434.2 million and $494.6 million of Troubled Debt Restructuring ("TDR") loans that are in compliance with the modified terms and in accrual status as of March 31, 2015 and December 31, 2014, respectively.

Loans in Process of Foreclosure

As of March 31, 2015, the recorded investment of residential mortgage loans collateralized by residential real estate property that are in the process of foreclosure amounted to $161.1million. The Corporationcommences the foreclosure process on residential real estate loans when a borrower becomes 120 days delinquent in accordance with Consumer Finance Protection Bureau Guidelines (CFPB). Foreclosure procedures and timelines vary depending on whether the property address resides on a judicial or non-judicial state. Judicial states (Puerto Rico) require the foreclosure to be processed through the state's court while non-judicial states are processed without court intervention. Foreclosure timelines vary according to state law and Investor Guidelines. Occasionally foreclosures may be delayed due to mandatory mediations, bankruptcy, court delays and title issues, among other reasons.

The Corporation’s aging of the loans held for investment portfolio is as follows:
As of March 31, 2015
(In thousands)		30-59 Days Past Due		60-89 Days Past Due		90 days or more Past Due (1)		Total Past Due		Purchased Credit-Impaired Loans		Current		Total loans held for investment		90 days past due and still accruing (2)
Residential mortgage:
FHA/VA and other government-guaranteed
loans (2)(3)(4)		$	-	$	8,200	$	96,086	$	104,286	$	-	$	51,376	$	155,662	$	96,086
Other residential mortgage loans (4)			-		88,209		191,014		279,223		177,601		2,719,134		3,175,958		18,431
Commercial:
Commercial and Industrial loans			22,933		3,193		207,063		233,189		-		2,209,678		2,442,867		20,563
Commercial mortgage loans (4)			-		1,564		165,778		167,342		3,279		1,478,642		1,649,263		23,393
Construction:
Land (4)			-		383		14,291		14,674		-		39,516		54,190		200
Construction-commercial			-		-		-		-		-		27,456		27,456		-
Construction-residential (4)			-		-		13,072		13,072		-		29,722		42,794		-
Consumer:
Auto loans			76,721		18,548		19,043		114,312		-		914,058		1,028,370		-
Finance leases			10,975		2,893		2,979		16,847		-		213,336		230,183		-
Other consumer loans			10,355		5,464		16,339		32,158		234		646,237		678,629		3,448
Total loans held for investment		$	120,984	$	128,454	$	725,665	$	975,103	$	181,114	$	8,329,155	$	9,485,372	$	162,121
_____________
(1)	Includes non-performing loans and accruing loans which are contractually delinquent 90 days or more (i.e., FHA/VA guaranteed loans and credit cards). Credit card loans continue to accrue finance charges fees until charged-off at 180 days.
(2)	It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as past-due loans 90 days and still accruing as opposed to non-performing loans since the principal repayment is insured. These balances include $30.1 million of residential mortgage loans insured by the FHA or guaranteed by the VA, which are over 18 months delinquent, and are no longer accruing interest as of March 31, 2015.
(3)	As of March 31, 2015, includes $26.2 million of defaulted loans collateralizing Government National Mortgage Association ("GNMA") securities for which the Corporation has an unconditional option (but not an obligation) to repurchase the defaulted loans.
(4)	According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage, commercial mortgage, and construction loans are considered past due when the borrower is in arrears two or more monthly payments. FHA/VA government guaranteed loans, other residential mortgage loans, commercial mortgage loans, land loans and construction-residential loans past due 30-59 days as of March 31, 2015 amounted to $12.2 million, $177.4 million, $38.4 million, $6.1 million, and $1.6 million, respectively.

As of December 31, 2014
(In thousands)		30-59 Days Past Due		60-89 Days Past Due		90 days or more Past Due (1)		Total Past Due		Purchased Credit- Impaired Loans		Current		Total loans held for investment		90 days past due and still accruing (2)
Residential mortgage:
FHA/VA and other government-guaranteed
loans (2)(3)(4)		$	-	$	9,733	$	81,055	$	90,788	$	-	$	62,782	$	153,570	$	81,055
Other residential mortgage loans (4)			-		78,336		199,078		277,414		98,494		2,481,709		2,857,617		18,371
Commercial:
Commercial and Industrial loans			22,217		7,445		143,928		173,590		-		2,305,847		2,479,437		21,381
Commercial mortgage loans (4)			-		15,482		171,281		186,763		3,393		1,475,631		1,665,787		22,808
Construction:
Land (4)			-		210		15,264		15,474		-		40,447		55,921		234
Construction-commercial (4)			-		-		-		-		-		24,562		24,562		-
Construction-residential (4)			-		-		14,324		14,324		-		28,673		42,997		-
Consumer:
Auto loans			77,385		19,665		22,276		119,326		-		941,456		1,060,782		-
Finance leases			8,751		2,734		5,245		16,730		-		215,396		232,126		-
Other consumer loans			9,801		6,054		18,671		34,526		717		654,394		689,637		3,377
Total loans held for investment		$	118,154	$	139,659	$	671,122	$	928,935	$	102,604	$	8,230,897	$	9,262,436	$	147,226
____________
(1)	Includes non-performing loans and accruing loans which are contractually delinquent 90 days or more (i.e. FHA/VA guaranteed loans and credit cards). Credit card loans continue to accrue finance charges and fees until charged-off at 180 days.
(2)	It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as past-due loans 90 days and still accruing as opposed to non-performing loans since the principal repayment is insured. These balances include $40.4 million of residential mortgage loans insured by the FHA or guaranteed by the VA, which are over 18 months delinquent, and are no longer accruing interest as of December 31, 2014.
(3)	As of December 31, 2014, includes $9.3 million of defaulted loans collateralizing GNMA securities for which the Corporation has an unconditional option (but not an obligation) to repurchase the defaulted loans.
(4)	According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage, commercial mortgage, and construction loans are considered past due when the borrower is in arrears two or more monthly payments. FHA/VA government guaranteed loans, other residential mortgage loans, commercial mortgage loans, land loans and construction-residential loans past due 30-59 days as of December 31, 2014 amounted to $14.0 million, $189.1 million, $20.8 million, $0.8 million and $1.0 million , respectively.

The Corporation’s credit quality indicators by loan type as of March 31, 2015 and December 31, 2014 are summarized below:
		Commercial Credit Exposure-Credit Risk Profile Based on Creditworthiness Category:
		Substandard		Doubtful		Loss		Total Adversely Classified (1)		Total Portfolio
March 31, 2015
(In thousands)
Commercial mortgage		$	227,195	$	-	$	-	$	227,195	$	1,649,263
Construction:
Land			15,930		-		-		15,930		54,190
Construction-commercial			11,790		-		-		11,790		27,456
Construction-residential			12,265		808		-		13,073		42,794
Commercial and Industrial			229,112		6,293		789		236,194		2,442,867
		Commercial Credit Exposure-Credit Risk Profile Based on Creditworthiness Category:
		Substandard		Doubtful		Loss		Total Adversely Classified (1)		Total Portfolio
December 31, 2014
(In thousands)
Commercial mortgage		$	273,027	$	897	$	-	$	273,924	$	1,665,787
Construction:
Land			16,915		-		-		16,915		55,921
Construction-commercial			11,790		-		-		11,790		24,562
Construction-residential			13,548		776		-		14,324		42,997
Commercial and Industrial			234,926		4,884		801		240,611		2,479,437
_________
(1)	Excludes $54.6 million ($7.8 million land, $39.1 million construction-commercial, $0.9 million construction-residential, and $ 6.8 million commercial mortgage) as of March 31, 2015 and December 31, 2014, of non-performing loans held for sale.

The Corporation considers a loan as adversely classified if its risk rating is Substandard, Doubtful or Loss. These categories are defined as follows:

Substandard- A Substandard asset is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful- Doubtful classifications have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions and values, highly questionable and improbable. A Doubtful classification may be appropriate in cases where significant risk exposures are perceived, but Loss cannot be determined because of specific reasonable pending factors, which may strengthen the credit in the near term.

Loss- Assets classified Loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future.There is little or no prospect for near term improvement and no realistic strengthening action of significance pending.

March 31, 2015		Consumer Credit Exposure-Credit Risk Profile Based on Payment Activity
		Residential Real-Estate				Consumer
		FHA/VA/ Guaranteed (1)		Other residential loans		Auto		Finance Leases		Other Consumer
(In thousands)
Performing		$	155,662	$	2,825,774	$	1,009,327	$	227,204	$	665,504
Purchased Credit-Impaired (2)			-		177,601		-		-		234
Non-performing			-		172,583		19,043		2,979		12,891
Total		$	155,662	$	3,175,958	$	1,028,370	$	230,183	$	678,629
(1)	It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as past due loans 90 days and still accruing as opposed to non-performing loans since the principal repayment is insured. These balances include $30.1 million of residential mortgage loans insured by the FHA or guaranteed by the VA, which are over 18 months delinquent, and are no longer accruing interest as of March 31, 2015.
(2)	PCI loans are excluded from non-performing statistics due to the application of the accretion method, under which these loan will accrete interest income over the remaining life of the loans using estimated cash flow analysis.
December 31, 2014		Consumer Credit Exposure-Credit Risk Profile Based on Payment Activity
			Residential Real-Estate			Consumer
		FHA/VA/ Guaranteed (1)		Other residential loans		Auto		Finance Leases		Other Consumer
(In thousands)
Performing		$	153,570	$	2,578,416	$	1,038,506	$	226,881	$	673,626
Purchased Credit-Impaired (2)			-		98,494		-		-		717
Non-performing			-		180,707		22,276		5,245		15,294
Total		$	153,570	$	2,857,617	$	1,060,782	$	232,126	$	689,637
(1)	It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as past due loans 90 days and still accruing as opposed to non-performing loans since the principal repayment is insured. These balances include $40.4 million of residential mortgage loans insured by the FHA or guaranteed by the VA, which are over 18 months delinquent, and are no longer accruing interest as of December 31, 2014.
(2)	PCI loans are excluded from non-performing statistics due to the application of the accretion method, under which these loan will accrete interest income over the remaining life of the loans using estimated cash flow analysis.

The following tables present information about impaired loans, excluding purchased credit-impaired loans, which are reported separately as discussed below:
Impaired Loans
(In thousands)
	Recorded Investment		Unpaid Principal Balance		Related Specific Allowance		Average Recorded Investment		Interest Income Recognized On Accrual Basis		Interest Income Recognized On Cash Basis
As of March 31, 2015
With no related allowance recorded:
FHA/VA-Guaranteed loans	$	-	$	-	$	-	$	-	$	-	$	-
Other residential mortgage loans		62,337		68,263		-		63,040		199		79
Commercial:
Commercial mortgage loans		100,797		120,956		-		101,196		406		425
Commercial and Industrial Loans		32,080		36,975		-		33,802		18		200
Construction:
Land		1,473		4,726		-		1,473		-		-
Construction-commercial		-		-		-		-		-		-
Construction-residential		6,762		9,346		-		6,943		41		-
Consumer:
Auto loans		562		562		-		562		10		-
Finance leases		-		-		-		-		-		-
Other consumer loans		3,229		4,634		-		3,268		10		26
	$	207,240	$	245,462	$	-	$	210,284	$	684	$	730
With an allowance recorded:
FHA/VA-Guaranteed loans	$	-	$	-	$	-	$	-	$	-	$	-
Other residential mortgage loans		367,189		416,579		14,862		368,999		4,224		414
Commercial:
Commercial mortgage loans		123,568		143,090		13,238		124,701		475		279
Commercial and Industrial Loans		194,576		227,417		24,871		196,896		1,950		43
Construction:
Land		9,355		13,181		1,220		9,413		15		9
Construction-commercial		11,790		11,790		1,145		11,790		128		-
Construction-residential		8,213		8,917		1,016		8,202		3		-
Consumer:
Auto loans		16,986		16,986		3,058		17,472		328		-
Finance leases		2,053		2,053		186		2,137		48		-
Other consumer loans		14,011		14,259		2,544		14,266		382		3
	$	747,741	$	854,272	$	62,140	$	753,876	$	7,553	$	748
Total:
FHA/VA-Guaranteed loans	$	-	$	-	$	-	$	-	$	-	$	-
Other residential mortgage loans		429,526		484,842		14,862		432,039		4,423		493
Commercial:
Commercial mortgage loans		224,365		264,046		13,238		225,897		881		704
Commercial and Industrial Loans		226,656		264,392		24,871		230,698		1,968		243
Construction:
Land		10,828		17,907		1,220		10,886		15		9
Construction-commercial		11,790		11,790		1,145		11,790		128		-
Construction-residential		14,975		18,263		1,016		15,145		44		-
Consumer:
Auto loans		17,548		17,548		3,058		18,034		338		-
Finance leases		2,053		2,053		186		2,137		48		-
Other consumer loans		17,240		18,893		2,544		17,534		392		29
	$	954,981	$	1,099,734	$	62,140	$	964,160	$	8,237	$	1,478

Impaired Loans
(In thousands)
	Recorded Investment		Unpaid Principal Balance		Related Specific Allowance		Average Recorded Investment
As of December 31, 2014
With no related allowance recorded:
FHA/VA-Guaranteed loans	$	-	$	-	$	-	$	-
Other residential mortgage loans		74,177		80,522		-		75,711
Commercial:
Commercial mortgage loans		109,271		132,170		-		113,674
Commercial and Industrial Loans		41,131		47,647		-		42,011
Construction:
Land		2,994		6,357		-		3,030
Construction-commercial		-		-		-		-
Construction-residential		7,461		10,100		-		8,123
Consumer:
Auto loans		-		-		-		-
Finance leases		-		-		-		-
Other consumer loans		3,778		5,072		-		3,924
	$	238,812	$	281,868	$	-	$	246,473
With an allowance recorded:
FHA/VA-Guaranteed loans	$	-	$	-	$	-	$	-
Other residential mortgage loans		350,067		396,203		10,854		357,129
Commercial:
Commercial mortgage loans		101,467		116,329		14,289		104,191
Commercial and Industrial Loans		195,240		226,431		21,314		198,930
Construction:
Land		9,120		12,821		794		10,734
Construction-commercial		11,790		11,790		790		11,867
Construction-residential		8,102		8,834		993		8,130
Consumer:
Auto loans		16,991		16,991		2,787		18,504
Finance leases		2,181		2,181		253		2,367
Other consumer loans		11,637		12,136		3,131		12,291
	$	706,595	$	803,716	$	55,205	$	724,143
Total:
FHA/VA-Guaranteed loans	$	-	$	-	$	-	$	-
Other residential mortgage loans		424,244		476,725		10,854		432,840
Commercial:
Commercial mortgage loans		210,738		248,499		14,289		217,865
Commercial and Industrial Loans		236,371		274,078		21,314		240,941
Construction:
Land		12,114		19,178		794		13,764
Construction-commercial		11,790		11,790		790		11,867
Construction-residential		15,563		18,934		993		16,253
Consumer:
Auto loans		16,991		16,991		2,787		18,504
Finance leases		2,181		2,181		253		2,367
Other consumer loans		15,415		17,208		3,131		16,215
	$	945,407	$	1,085,584	$	55,205	$	970,616
Interest income of approximately $7.6 million ($5.9 million accrual basis and $1.7 million cash basis) was recognized on impaired loans for the first quarter of 2014.

The following table shows the activity for impaired loans and the related specific reserve during the first quarter of 2015 and 2014:
	Quarter ended
	March 31, 2015		March 31, 2014
Impaired Loans:	(In thousands)
Balance at beginning of period	$	945,407	$	919,112
Loans determined impaired during the period		62,933		54,277
Charge-offs		(11,715)		(32,039)
Loans sold, net of charge-offs		(1,137)		-
Increases to impaired loans- additional disbursements		519		625
Foreclosures		(9,952)		(4,006)
Loans no longer considered impaired		(9,898)		(3,728)
Paid in full or partial payments		(21,176)		(54,853)
Balance at end of period	$	954,981	$	879,388

	Quarter ended
	March 31, 2015		March 31, 2014
Specific Reserve:	(In thousands)
Balance at beginning of period	$	55,205	$	102,601
Provision for loan losses		18,650		14,454
Charge-offs		(11,715)		(32,039)
Balance at end of period	$	62,140	$	85,016

Purchased Credit Impaired (“PCI”) Loans

As described in Note 2, Business Combination, the Corporation acquired PCI loans as part of the Doral Bank transaction and in previouslycompleted asset acquisitions which are accounted under ASC 310-30. These previous transactions include the acquisition from Doral Financial in the second quarter of 2014 of all its rights, title and interest in first and second residential mortgages loans in full satisfaction of secured borrowings owed by such entity to FirstBank,and the acquisition in 2012 of a FirstBank-branded credit card loans portfolio from FIA Card Services (“FIA”).

Under ASC 310-30, the acquired PCI loans were aggregated into pools based on similar characteristics (i.e. delinquency status, loan terms). Each loan pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows. Since the loans are accounted for by the Corporation under ASC 310-30,they are not considered non-performing and will continue to have an accretable yield as long as there is a reasonable expectation about the timing and amount of cash flows expected to be collected. The Corporation recognizes additional losses for this portfolio when it is probable that the Corporation will be unable to collect all cash flows expected as of the acquisition date plus additional cash flows expected to be collected arising from changes in estimates after the acquisition date.

The carrying amount of PCI loans follows:
		March 31,		December 31,
		2015		2014
	(In thousands)
Residential mortgage loans	$	177,601	$	98,494
Commercial mortgage loans		3,279		3,393
Credit Cards		234		717
	$	181,114	$	102,604

	The following tables present PCI loans by past due status as of March 31, 2015 and December 31, 2014:
As of March 31, 2015		30-59 Days		60-89 Days		90 days or more		Total Past Due				Total PCI loans
														Current
		(In thousands)
Residential mortgage loans (1)		$	-	$	13,572	$	15,775	$	29,347	$	148,254	$	177,601
Commercial mortgage loans (1)			-		130		653		783		2,496		3,279
Credit Cards			22		-		22		44		190		234
		$	22	$	13,702	$	16,450	$	30,174	$	150,940	$	181,114
_____________
(1)	According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage and commercial mortgage loans are considered past due when the borrower is in arrears two or more monthly payments. PCI residential mortgage loans and commercial mortgage loans past due 30-59 days as of March 31, 2015 amounted to $32.0 million and $0.3 million, respectively.
As of December 31, 2014		30-59 Days		60-89 Days		90 days or more		Total Past Due				Total PCI loans
														Current
		(In thousands)
Residential mortgage loans (1)		$	-	$	12,571	$	15,176	$	27,747	$	70,747	$	98,494
Commercial mortgage loans (1)			-		356		443		799		2,594		3,393
Credit Cards			47		25		42		114		603		717
		$	47	$	12,952	$	15,661	$	28,660	$	73,944	$	102,604
_____________
(1)	According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage and commercial mortgage loans are considered past due when the borrower is in arrears two or more monthly payments. PCI residential mortgage loans and commercial mortgage loans past due 30-59 days as of December 31, 2014 amounted to $16.6 million and $0.8 million, respectively.

Initial Fair Value and Accretable Yield of PCI Loans

At acquisition, the Corporation estimated the cash flows the Corporation expected to collect on PCI loans. Under the accounting guidance for PCI loans, the difference between the contractually required payments and the cash flows expected to be collected at acquisition is referred to as the nonaccretable difference. This difference is neither accreted into income nor recorded on the Corporation's consolidated statement of financial condition. The excess of cash flows expected to be collected over the estimated fair value is referred to as the accretable yield and is recognized in interest income over the remaining life of the loans, using the effective-yield method.

The following table presents acquired loans from Doral Bank in the first quarter of 2015 accounted for pursuant to ASC 310-30 as of the acquisition date:
		(In thousands)
Contractually- required principal and interest		$	166,947
Less: Nonaccretable difference			(48,739)
Cash flows expected to be collected			118,208
Less: Accretable yield			(38,319)
Fair value of loans acquired in 2015 (1)		$	79,889
(1)	Amounts are preliminary estimates based on the best information available at the acquisition date and adjustments in future quarters may occur up to one year from the date of acquisition.

The cash flows expected to be collected consider the estimated remaining life of the underlying loans and include the effects of estimated prepayments.

Changes in accretable yield of acquired loans

Subsequent to acquisition, the Corporation is required to periodically evaluate its estimate of cash flows expected to be collected. These evaluations, performed quarterly, require the continued use of key assumptions and estimates, similar to the initial estimate of fair value. Subsequent changes in the estimated cash flows expected to be collected may result in changes in the accretable yield and nonaccretable difference or reclassifications from nonaccretable yield to accretable. Increases in the cash flows expected to be collected will generally result in an increase in interest income over the remaining life of the loan or pool of loans. Decreases in expected cash flows due to further credit deterioration will generally result in an impairment charge recognized in the Corporation's provision for loan and lease losses, resulting in an increase to the allowance for loan losses. During the first quarter of 2015 and 2014, the Corporation did not record charges to the provision for loan losses related to PCI loans.

Changes in the accretable yield of PCI loans for the quarters ended March 31, 2015 and 2014 were as follows:
	March 31, 2015		March 31, 2014
	(In thousands)
Balance at beginning of period	$	82,460	$	-
Additions (accretable yield at acquisition
of loans from Doral Bank)		38,319		-
Accretion recognized in earnings		(2,277)		-
Balance at end of period	$	118,502	$	-

Changes in the carrying amount of loans accounted for pursuant to ASC 310-30 follows:
	Quarter ended
	March 31, 2015
	(In thousands)
Balance at beginning of period	$	102,604
Additions		79,889
Accretion		2,277
Collections		(3,656)
Ending balance	$	181,114

The outstanding principal balance of PCI loans, including amounts charged off by the Corporation, amounted to $226.7million as of March 31, 2015 (December 31, 2014- $135.5 million).

Purchases and Sales of Loans

As described in Note 2, Business Combination,on February 27, 2015, FirstBank acquired $324.8 million in principal of loans, primarily residential mortgage loans through an alliance with other co-bidders on the failed Doral Bank, a portion of which was accounted as PCI loans as described above. Pursuant to the terms of the purchase and assumption agreement, FirstBank purchased the loans at an aggregate discount of 9.0%, or approximately $29 million through an FDIC facilitated transaction. The transaction was accounted under ASC Topic 820, which requires all recognized assets acquired and liabilities assumed in a business combination to be measured at their acquisition-date fair values. The fair value of the loans acquired in this transaction was $311.4 million at acquisition date.

In addition, during the first quarter of 2015, the Corporation purchased $23.8 million of residential mortgage loans consistent with a strategic program established by the Corporation in 2005 to purchase ongoing residential mortgage loan production from mortgage bankers in Puerto Rico and purchased a $21.1 million participation on a commercial loan. Generally, the loans purchased from mortgage bankers were conforming residential mortgage loans. Purchases of conforming residential mortgage loans provide the Corporation the flexibility to retain or sell the loans, including through securitization transactions, depending upon the Corporation's interest rate risk management strategies. When the Corporation sells such loans, it generally keeps the servicing of the loans.

In the ordinary course of business, the Corporation sells residential mortgage loans (originated or purchased) to GNMA and government-sponsored entities (“GSEs”) such as Fannie Mae (“FNMA”) and Freddie Mac (“FHLMC”), generally securitize the transferred loans into mortgage-backed securities for sale into the secondary market. The Corporation sold approximately $38.4 million of performing residential mortgage loans in the secondary market to FNMA and FHLMC during the first quarter of 2015. Also, the Corporation securitized $46.9 million of FHA/VA mortgage loans into GNMA mortgage-backed securities during the first quarter of 2015. The Corporation's continuing involvement in these loan sales consists primarily of servicing the loans. In addition, the Corporation agreed to repurchase loans when it breaches any of the representations and warranties included in the sale agreement. These representations and warranties are consistent with the GSEs' selling and servicing guidelines (i.e., ensuring that the mortgage was properly underwritten according to established guidelines).

For loans sold to GNMA, the Corporation holds an option to repurchase individual delinquent loans issued on or after January 1, 2003 when the borrower fails to make any payment for three consecutive months. This option gives the Corporation the ability, but not the obligation, to repurchase the delinquent loans at par without prior authorization from GNMA.

Under ASC Topic 860, Transfer and Servicing, once the Corporation has the unilateral ability to repurchase the delinquent loan, it is considered to have regained effective control over the loan and is required to recognize the loan and a corresponding repurchase liability on the balance sheet regardless of the Corporation's intent to repurchase the loan.

During the first quarter of 2015, the Corporation repurchased pursuant to its repurchase option with GNMA $3.0million of loans previously sold to GNMA. The principal balance of these loans is fully guaranteed and the risk of loss related to repurchases is generally limited to the difference between the delinquent interest payment advanced to GNMA computed at the loan's interest rate and the interest payments reimbursed by FHA, which are computed at a pre-determined debenture rate. Repurchases of GNMA loans allow the Corporation, among other things, to maintain acceptable delinquency rates on outstanding GNMA pools and remain as a seller and servicer in good standing with GNMA. The Corporation generally remediates any breach of representations and warranties related to the underwriting of such loans according to established GNMA guidelines without incurring losses. The Corporation does not maintain a liability for estimated losses as a result of breaches in representations and warranties.

Loan sales to FNMA and FHLMC are without recourse in relation to the future performance of the loans. The Corporation repurchased at par loans previously sold to FNMA and FHLMC in the amount of $0.2 million during the first quarter of 2015. The Corporation's risk of loss with respect to these loans is also minimal as these repurchased loans are generally performing loans with documentation deficiencies. No losses related to breaches of representations and warranties were incurred in the first quarter of 2015. Historically, losses experienced on these loans have been immaterial. As a consequence, as of March 31, 2015, the Corporation does not maintain a liability for estimated losses on loans expected to be repurchased as a result of breaches in loan and servicer representations and warranties.

In addition, the Corporation sold $3.5 million of non-performing commercial and industrial loans in the first quarter of 2015.

Loan Portfolio Concentration

The Corporation's primary lending area is Puerto Rico. The Corporation's banking subsidiary, First Bank, also lends in the USVI and BVI markets and in the United States (principally in the state of Florida). Of the total gross loans held for investment of $9.5 billion as of March 31, 2015, approximately 83% have credit risk concentration in Puerto Rico, 11% in the United States, and 6% in the USVI and BVI.

As of March 31, 2015, the Corporation had $335.7 million of credit facilities granted to the Puerto Rico government, its municipalities and public corporations, of which $321.7million was outstanding, compared to $308.0 million outstanding as of December 31, 2014. In addition, the outstanding balance of facilities granted to the government of the Virgin Islands amounted to $61.0million as of March 31, 2015, compared to $57.7 million as of December 31, 2014. Approximately $201.3 million of the granted credit facilities outstanding consists of loans to municipalities in Puerto Rico. Municipal debt exposure is secured by ad valorem taxation without limitation as to rate or amount on all taxable property within the boundaries of each municipality. The good faith, credit, and unlimited taxing power of the applicable municipality have been pledged to the repayment of all outstanding bonds and notes. Approximately $24.5million consists of loans to units of the central government, and approximately $95.9million consists of loans to public corporations that generally receive revenues from the rates they charge for services or products, such as electric power services, including a $75.0 million credit facility extended to the Puerto Rico Electric Power Authority (“PREPA”) for fuel purchases that have priority over senior bonds and other debt. The $75 million outstanding under this credit facility was placed in non-accrual status in the first quarter of 2015 since the government agency has not yet completed its restructuring plan.Major public corporations have varying degrees of independence from the central government and many receive appropriations or other payments from the Puerto Rico's government general fund. Debt issued by the central government can either carry the full faith, credit and taxing power of the Commonwealth of Puerto Rico or represent an obligation that is subject to annual budget appropriations.

Furthermore, the Corporation had $132.5million outstanding as of March 31, 2015 in loans to the hotel industry in Puerto Rico guaranteed by the Puerto Rico Tourism Development Fund (“TDF”), compared to $133.3 million as of December 31, 2014. The TDF is a subsidiary of the GDB that works with private-sector financial institutions to structure financings for new hospitality projects.

As disclosed in Note 5, S&P, Moody's and Fitch downgraded the credit rating of the Commonwealth of Puerto Rico's debt to non-investment grade categories. The Corporation cannot predict at this time the impact that the current fiscal situation of the Commonwealth of Puerto Rico and the various legislative and other measures adopted and to be adopted by the Puerto Rico government in response to such fiscal situation will have on the Puerto Rico economy and on the Corporation's financial condition and results of operations.

Troubled Debt Restructurings

The Corporation provides homeownership preservation assistance to its customers through a loss mitigation program in Puerto Rico that is similar to the U.S. government's Home Affordable Modification Program guidelines. Depending upon the nature of borrowers' financial condition, restructurings or loan modifications through this program as well as other restructurings of individual commercial, commercial mortgage, construction, and residential mortgage loans in the U.S. mainland fit the definition of a TDR.A restructuring of a debt constitutes a TDR if the creditor for economic or legal reasons related to the debtor's financial difficulties grants a concession to the debtor that it would not otherwise consider. Modifications involve changes in one or more of the loan terms that bring a defaulted loan current and provide sustainable affordability. Changes may include the refinancing of any past-due amounts, including interest and escrow, the extension of the maturity of the loan and modifications of the loan rate. As of March 31, 2015, the Corporation's total TDR loans of $705.1 million consisted of $354.1million of residential mortgage loans, $166.7 million of commercial and industrial loans, $136.8million of commercial mortgage loans, $12.5million of construction loans, and $35.0million of consumer loans. Outstanding unfunded commitments on TDR loans amounted to $47thousand as of March 31, 2015.

The Corporation's loss mitigation programs for residential mortgage and consumer loans can provide for one or a combination of the following: movement of interest past due to the end of the loan, extension of the loan term, deferral of principal payments and reduction of interest rates either permanently or for a period of up to four years (increasing back instep-up rates). Additionally, in certain cases, the restructuring may provide for the forgiveness of contractually due principal or interest. Uncollected interest is added to the end of the loan term at the time of the restructuring and not recognized as income until collected or when the loan is paid off. These programs are available only to those borrowers who have defaulted, or are likely to default, permanently on their loan and would lose their homes in the foreclosure action absent some lender concession. Nevertheless, if the Corporation is not reasonably assured that the borrower will comply with its contractual commitment, properties are foreclosed.

Prior to permanently modifying a loan, the Corporation may enter into trial modifications with certain borrowers. Trial modifications generally represent a six-month period during which the borrower makes monthly payments under the anticipated modified payment terms prior to a formal modification. Upon successful completion of a trial modification, the Corporation and the borrower enter into a permanent modification. TDR loans that are participating in or that have been offered a binding trial modification are classified as TDRs when the trial offer is made and continue to be classified as TDR regardless of whether the borrower enters into a permanent modification. As of March 31, 2015, we classified an additional $11.5 million of residential mortgage loans as TDRs that were participating in or had been offered a trial modification.

For the commercial real estate, commercial and industrial, and construction loan portfolios, at the time of a restructuring, the Corporation determines, on a loan-by-loan basis, whether a concession was granted for economic or legal reasons related to the borrower's financial difficulty. Concessions granted for commercial loans could include: reductions in interest rates to rates that are considered below market; extension of repayment schedules and maturity dates beyond original contractual terms; waivers of borrower covenants; forgiveness of principal or interest; or other contract changes that would be considered a concession. The Corporation mitigates loan defaults for its commercial loan portfolios through its collection function. The function's objective is to minimize both early stage delinquencies and losses upon default of commercial loans. In the case of the commercialand industrial, commercial mortgage, and construction loan portfolios, the Corporation's Special Asset Group (“SAG”) focuses on strategies for the accelerated reduction of non-performing assets through note sales, short sales, loss mitigation programs, and sales of OREO. In addition to the management of the resolution process for problem loans, the SAG oversees collection efforts for all loans to prevent migration to the non-performing and/or adversely classified status. The SAG utilizes relationship officers, collection specialists, and attorneys. In the case of residential construction projects, the workout function monitors project specifics, such as project management and marketing, as deemed necessary. The SAG utilizes its collections infrastructure of workout collection officers, credit work-out specialists, in-house legal counsel, and third-party consultants. In the case of residential construction projects and large commercial loans, the function also utilizes third-party specialized consultants to monitor the residential and commercial construction projects in terms of construction, marketing and sales, and assist with the restructuring of large commercial loans.

In addition, the Corporation extends, renews, and restructures loans with satisfactory credit profiles. Many commercial loan facilities are structured as lines of credit, which are mainly one year in term and therefore are required to be renewed annually. Other facilities may be restructured or extended from time to time based upon changes in the borrower's business needs, use of funds, timing of completion of projects, and other factors. If the borrower is not deemed to have financial difficulties, extensions, renewals, and restructurings are done in the normal course of business and not considered concessions, and the loans continue to be recorded as performing.

Selected information on TDRs that includes the recorded investment by loan class and modification type is summarized in the following tables. This information reflects all TDRs:
		March 31, 2015
(In thousands)		Interest rate below market		Maturity or term extension		Combination of reduction in interest rate and extension of maturity		Forgiveness of principal and/or interest		Other (1)		Total
Troubled Debt Restructurings:
Non- FHA/VA Residential Mortgage loans		$	26,039	$	5,206	$	281,824	$	-	$	41,025	$	354,094
Commercial Mortgage Loans			26,952		12,685		73,956		-		23,187		136,780
Commercial and Industrial Loans			4,431		78,171		30,830		3,057		50,247		166,736
Construction Loans:
Land			-		201		1,680		-		596		2,477
Construction-residential			6,154		378		3,095		-		433		10,060
Consumer Loans - Auto			-		324		10,736		-		6,487		17,547
Finance Leases			-		285		1,768		-		-		2,053
Consumer Loans - Other			37		317		12,774		379		1,869		15,376
Total Troubled Debt Restructurings (2)		$	63,613	$	97,567	$	416,663	$	3,436	$	123,844	$	705,123
(1)	Other concessions granted by the Corporation include deferral of principal and/or interest payments for a period longer than what would be considered insignificant, payment plans under judicial stipulation, or a combination of the concessions listed in the table.
(2)	Excludes TDRs held for sale amounting to $45.7 million as of March 31, 2015.

Selected information on TDRs that includes the recorded investment by loan class and modification type is summarized in the following tables. This information reflects all TDRs:
		December 31, 2014
(In thousands)		Interest rate below market		Maturity or term extension		Combination of reduction in interest rate and extension of maturity		Forgiveness of principal and/or interest		Other (1)		Total
Troubled Debt Restructurings:
Non- FHA/VA Residential Mortgage loans		$	24,850	$	5,859	$	283,317	$	-	$	35,749	$	349,775
Commercial Mortgage Loans			29,881		12,737		72,493		-		12,655		127,766
Commercial and Industrial Loans			7,533		80,642		31,553		3,074		49,124		171,926
Construction Loans:
Land			-		202		1,732		-		536		2,470
Construction-residential			6,154		337		3,112		-		434		10,037
Consumer Loans - Auto			-		380		10,363		-		6,248		16,991
Finance Leases			-		376		1,805		-		-		2,181
Consumer Loans - Other			37		129		10,812		443		1,886		13,307
Total Troubled Debt Restructurings (2)		$	68,455	$	100,662	$	415,187	$	3,517	$	106,632	$	694,453
(1)	Other concessions granted by the Corporation include deferral of principal and/or interest payments for a period longer than what would be considered insignificant, payment plans under judicial stipulation or a combination of the concessions listed in the table.
(2)	Excludes TDRs held for sale amounting to $45.7 million as of December 31, 2014.

The following table presents the Corporation's TDR activity
(In thousands)	Quarter Ended
	March 31, 2015		March 31, 2014
Beginning Balance of TDRs	$	694,453	$	630,258
New TDRs		31,601		19,935
Increases to existing TDRs - additional disbursements		335		27
Charge-offs post modification		(3,781)		(7,982)
Foreclosures		(7,156)		(1,074)
Paid-off, partial payments, and other		(10,329)		(18,844)
Ending balance of TDRs	$	705,123	$	622,320

TDRs are classified as either accrual or nonaccrual loans. A loan on nonaccrual and restructured as a TDR will remain on nonaccrual status until the borrower has proven the ability to perform under the modified structure, generally for a minimum of six months, and there is evidence that such payments can and are likely to continue as agreed. Performance prior to the restructuring or significant events that coincide with the restructuring are included in assessing whether the borrower can meet the new terms and may result in the loans being returned to accrual at the time of the restructuring or after a shorter performance period. If the borrower's ability to meet the revised payment schedule is uncertain, the loan remains classified as a nonaccrual loan. Loan modifications increase the Corporation's interest income by returning a non-performing loan to performing status, if applicable,increase cash flows by providing for payments to be made by the borrower, and avoid increases in foreclosure and OREO costs. TheCorporation continues to consider a modified loan as an impairedloan for purposes of estimating the allowance for loan and lease losses.A TDR loan that specifies an interest rate that at the time of the restructuring is greater than or equal to the rate the Corporation is willing to accept for a new loan with comparable risk may not be reported as a TDR, or as impaired loan in the calendar years subsequent to the restructuring if it is in compliance with its modified terms. The Corporation did not remove loans from the TDR classification during the first quarter of 2015.

The following table provides a breakdown between the accrual and nonaccrual status of TDRs:
(In thousands)		March 31, 2015
		Accrual		Nonaccrual (1)(2)		Total TDRs
Non-FHA/VA Residential Mortgage loans		$	273,890	$	80,204	$	354,094
Commercial Mortgage Loans			75,541		61,239		136,780
Commercial and Industrial Loans			55,394		111,342		166,736
Construction Loans:
Land			779		1,698		2,477
Construction-residential			3,472		6,588		10,060
Consumer Loans - Auto			11,011		6,536		17,547
Finance Leases			1,875		178		2,053
Consumer Loans - Other			12,237		3,139		15,376
Total Troubled Debt Restructurings		$	434,199	$	270,924	$	705,123
(1)	Included in non-accrual loans are $121.9 million in loans that are performing under the terms of a restructuring agreement but are reported in non-accrual status until the restructured loans meet the criteria of sustained payment performance under the revised terms for reinstatement to accrual status and there is no doubt about full collectability.
(2)	Excludes non-accrual TDRs held for sale with a carrying value of $45.7 million as of March 31, 2015.

(In thousands)		December 31, 2014
		Accrual		Nonaccrual (1)(2)		Total TDRs
Non-FHA/VA Residential Mortgage loans		$	266,810	$	82,965	$	349,775
Commercial Mortgage Loans			69,374		58,392		127,766
Commercial and Industrial Loans			131,544		40,382		171,926
Construction Loans:
Land			834		1,636		2,470
Construction-residential			3,448		6,589		10,037
Consumer Loans - Auto			10,558		6,433		16,991
Finance Leases			1,926		255		2,181
Consumer Loans - Other			10,146		3,161		13,307
Total Troubled Debt Restructurings		$	494,640	$	199,813	$	694,453
(1)	Included in non-accrual loans are $52.8 million in loans that are performing under the terms of a restructuring agreement but are reported in non-accrual status until the restructured loans meet the criteria of sustained payment performance under the revised terms for reinstatement to accrual status and there is no doubt about full collectability.
(2)	Excludes non-accrual TDRs held for sale with a carrying value of $45.7 million as of December 31, 2014.

TDRs exclude restructured residential mortgage loans that are guaranteed by the U.S. federal government (i.e., FHA/VA loans) totaling $65.7 million. The Corporation excludes FHA/VA guaranteed loans from TDRs given that, in the event that the borrower defaults on the loan, the principal and interest (debenture rate) are guaranteed by the U.S. government; therefore, the risk of loss on these types of loans is very low. The Corporation does not consider loans with U.S. federal government guarantees to be impaired loans for the purpose of calculating the allowance for loan and lease losses.

Loans modifications that are considered TDRs and were completed during the first quarter of 2015 and 2014 were as follows:
(Dollars in thousands)	Quarter ended March 31, 2015
	Number of contracts	Pre-modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings:
Non-FHA/VA Residential Mortgage loans	81	$	11,495	$	11,265
Commercial Mortgage Loans	8		12,821		12,931
Commercial and Industrial Loans	1		1,681		1,681
Construction Loans:
Land	1		64		64
Consumer Loans - Auto	146		2,173		2,130
Finance Leases	8		233		184
Consumer Loans - Other	377		3,391		3,346
Total Troubled Debt Restructurings	622	$	31,858	$	31,601

(Dollars in thousands)	Quarter ended March 31, 2014
	Number of contracts	Pre-modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings:
Non-FHA/VA Residential Mortgage loans	47	$	7,709	$	7,711
Commercial Mortgage Loans	3		834		837
Commercial and Industrial Loans	5		7,964		7,630
Construction Loans:
Consumer Loans - Auto	117		1,605		1,605
Finance Leases	10		193		193
Consumer Loans - Other	429		1,959		1,959
Total Troubled Debt Restructurings	611	$	20,264	$	19,935

Recidivism, or the borrower defaulting on its obligation pursuant to a modified loan, results in the loan once again becoming a non-performing loan. Recidivism occurs at a notably higher rate than do defaults on new origination loans, so modified loans present a higher risk of loss than do new origination loans. The Corporation considers a loan to have defaulted if the borrower has failed to make payments of either principal, interest, or both for a period of 90 days or more.

Loan modifications considered TDRs that defaulted during the quarters ended March 31, 2015 and March 31, 2014 and had become TDRs during the 12-month period preceding the default date, were as follows:
	Quarter ended March 31,
(Dollars in thousands)	2015			2014
	Number of contracts	Recorded Investment		Number of contracts	Recorded Investment
Non-FHA/VA Residential Mortgage loans	12	$	1,773	14	$	2,552
Commercial and Industrial Loans	4		5,745	-		-
Construction Loans:
Consumer Loans - Auto	2		8	4		39
Consumer Loans - Other	53		229	45		176
Finance Leases	1		15	-		-
Total	72	$	7,770	63	$	2,767

For certain TDRs, the Corporation splits the loans into two new notes, A and B notes. The A note is restructured to comply with the Corporation's lending standards at current market rates, and is tailored to suit the customer's ability to make timely interest and principal payments. The B note includes the granting of the concession to the borrower and varies by situation. The B note is charged off but the borrower's obligation is not forgiven and any payments collected are accounted for as recoveries. At the time of restructuring, the A note is identified and classified as a TDR. If the loan performs for at least six months according to the modified terms, the A note may be returned to accrual status. The borrower's payment performance prior to the restructuring is included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of the restructuring. In the periods following the calendar year in which a loan was restructured, the A Note may no longer be reported as a TDR if it is on accrual status, is in compliance with its modified terms, and yields a market rate (as determined and documented at the time of the restructuring).

The recorded investment in loans held for investment restructured using the A/B note restructure workout strategy was approximately $42.9 million at March 31, 2015. The following table provides additional information about the volume of this type of loan restructuring and the effect on the allowance for loan and lease losses in the first quarter of 2015 and 2014:

(In thousands)	March 31, 2015			March 31, 2014
Principal balance deemed collectible at end of period	$	42,907	$	78,833
Amount charged off	$	-	$	-
(Reductions) charges to the provision for loan losses	$	(24)	$	(15)
Allowance for loan losses at end of period	$	707	$	1,547

Of the loans comprising the $42.9 million that have been deemed collectible, approximately $41.2 million were placed in accruing status as the borrowers have exhibited a period of sustained performance. These loans continue to be individually evaluated for impairment purposes.

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FAIR VALUE - Change in unrealized losses included in earnings (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Included in earnings	$ 156		$ 0
Available for Sale Securities
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Included in earnings	$ 156	[1]	$ 0	[1]

[1] Amounts mostly related to private label MBS.

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LOANS HELD FOR SALE

3 Months Ended

Mar. 31, 2015

LOANS HELD FOR SALE

NOTE 9–LOANS HELD FOR SALE

The Corporation's loans held-for-sale portfolio was composed of:

		As of		As of
	March 31, 2015		December 31, 2014
	(In thousands)
Residential mortgage loans	$	27,135	$	22,315
Construction loans		47,802		47,802
Commercial mortgage loans		6,786		6,839
Total	$	81,723	$	76,956

Non-performing loans held for sale totaled $54.6 million ($6.8million commercial mortgage loans and $47.8million construction loans) as of March 31, 2015 and December 31, 2014.

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INVESTMENT SECURITIES - Additional Information (Detail) (USD $)	3 Months Ended		12 Months Ended
	Mar. 31, 2015 numberofcontracts	Mar. 31, 2014	Dec. 31, 2014
Schedule Of Investments [Line Items]
Percentage Of Debt Securities Government And Government Sponsored Agencies	96.00%
Amortized cost of private label of mortgage backed security	$ 43,000,000
Credit related impairment loss is related to Private label MBS	156,000
Minimum Credit Score	700
Maximum loan to value ratio	80.00%
Proceeds From Maturities Prepayments And Calls Of Available For Sale Securities	53,596,000	45,422,000
Total investment securities available for sale	1,974,226,000		1,965,666,000
Fair value	1,974,226,000		1,965,666,000
Amortized cost	1,977,681,000		1,976,261,000
Unrealized losses	29,867,000		30,405,000
Weighted average yield	2.48%		2.49%
Puerto Rico Government obligations [Member]
Schedule Of Investments [Line Items]
Total investment securities available for sale	41,500,000		27,408,000
Fair value	41,500,000		27,408,000
Amortized cost	65,500,000
Change in net unrealized gains	$ (6,100,000)

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SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE - Schedule of Repurchase Agreement Maturity (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015		Dec. 31, 2014
Repurchase Agreement [Line Items]
Securities Sold Under Agreements To Repurchase	$ 900,000	[1]	$ 900,000	[1]
Less than three years
Repurchase Agreement [Line Items]
Securities Sold Under Agreements To Repurchase	500,000
Over five years
Repurchase Agreement [Line Items]
Securities Sold Under Agreements To Repurchase	$ 400,000

[1] As of March 31, 2015, includes $800 million with an average rate of 2.71% that lenders have the right to call before their contractual maturities at various dates beginning on April 9, 2015. Subsequent to April 9, 2015, no lender has exercised its call option on repurchase agreements. In addition, $700 million is tied to variable rates.

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LOAN PORTFOLIO- Corporation's Aging of Purchased Credit Impaired Loans (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015		Dec. 31, 2014		Mar. 31, 2014
Accounts Notes And Loans Receivable [Line Items]
30-59 Days Past Due	$ 120,984		$ 118,154
60-89 Days, Past Due	128,454		139,659
90 days or more, Past Due	725,665	[1]	671,122	[2]
Total Past Due	975,103		928,935
Financing Receivable, Current	8,329,155		8,230,897
Loans held for investment	9,485,372		9,262,436		9,566,785
90 days past due and still accruing	162,121	[3]	147,226	[4]
Purchased Credit Impaired Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
30-59 Days Past Due	22		47
60-89 Days, Past Due	13,702		12,952
90 days or more, Past Due	16,450		15,661
Total Past Due	30,174		28,660
Financing Receivable, Current	150,940		73,944
Loans held for investment	181,114		102,604
Residential Mortgage [Member]
Accounts Notes And Loans Receivable [Line Items]
30-59 Days Past Due	0	[5]	0	[6]
60-89 Days, Past Due	88,209	[5]	78,336	[6]
90 days or more, Past Due	191,014	[1],[5]	199,078	[2],[6]
Total Past Due	279,223	[5]	277,414	[6]
Financing Receivable, Current	2,719,134	[5]	2,481,709	[6]
Loans held for investment	3,175,958	[5]	2,857,617	[6]
90 days past due and still accruing	18,431	[3],[5]	18,371	[4],[6]
Residential Mortgage [Member] | Purchased Credit Impaired Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
30-59 Days Past Due	0	[7]	0	[8]
60-89 Days, Past Due	13,572	[7]	12,571	[8]
90 days or more, Past Due	15,775	[7]	15,176	[8]
Total Past Due	29,347	[7]	27,747	[8]
Financing Receivable, Current	148,254	[7]	70,747	[8]
Loans held for investment	177,601	[7]	98,494	[8]
Commercial Mortgage Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
30-59 Days Past Due	0	[5]	0	[6]
60-89 Days, Past Due	1,564	[5]	15,482	[6]
90 days or more, Past Due	165,778	[1],[5]	171,281	[2],[6]
Total Past Due	167,342	[5]	186,763	[6]
Financing Receivable, Current	1,478,642	[5]	1,475,631	[6]
Loans held for investment	1,649,263	[5]	1,665,787	[6]
90 days past due and still accruing	23,393	[3],[5]	22,808	[4],[6]
Commercial Mortgage Loans [Member] | Purchased Credit Impaired Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
30-59 Days Past Due	0	[7]	0	[8]
60-89 Days, Past Due	130	[7]	356	[8]
90 days or more, Past Due	653	[7]	443	[8]
Total Past Due	783	[7]	799	[8]
Financing Receivable, Current	2,496	[7]	2,594	[8]
Loans held for investment	3,279	[7]	3,393	[8]
Consumer Credit Card Financing Receivable [Member] | Purchased Credit Impaired Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
30-59 Days Past Due	22		47
60-89 Days, Past Due	0		25
90 days or more, Past Due	22		42
Total Past Due	44		114
Financing Receivable, Current	190		603
Loans held for investment	$ 234		$ 717

[1] Includes non-performing loans and accruing loans which are contractually delinquent 90 days or more (i.e., FHA/VA guaranteed loans and credit cards). Credit card loans continue to accrue finance charges fees until charged-off at 180 days.

[2] Includes non-performing loans and accruing loans which are contractually delinquent 90 days or more (i.e. FHA/VA guaranteed loans and credit cards). Credit card loans continue to accrue finance charges and fees until charged-off at 180 days.

[3] It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as past-due loans 90 days and still accruing as opposed to non-performing loans since the principal repayment is insured. These balances include $30.1 million of residential mortgage loans insured by the FHA or guaranteed by the VA, which are over 18 months delinquent, and are no longer accruing interest as of March 31, 2015.

[4] It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as past-due loans 90 days and still accruing as opposed to non-performing loans since the principal repayment is insured. These balances include $40.4 million of residential mortgage loans insured by the FHA or guaranteed by the VA, which are over 18 months delinquent, and are no longer accruing interest as of December 31, 2014.

[5] According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage, commercial mortgage, and construction loans are considered past due when the borrower is in arrears two or more monthly payments. FHA/VA government guaranteed loans, other residential mortgage loans, commercial mortgage loans, land loans and construction-residential loans past due 30-59 days as of March 31, 2015 amounted to $12.2 million, $177.4 million, $38.4 million, $6.1 million, and $1.6 million, respectively.

[6] According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage, commercial mortgage, and construction loans are considered past due when the borrower is in arrears two or more monthly payments. FHA/VA government guaranteed loans, other residential mortgage loans, commercial mortgage loans, land loans and construction-residential loans past due 30-59 days as of December 31, 2014 amounted to $14.0 million, $189.1 million, $20.8 million, $0.8 million and $1.0 million , respectively.

[7] According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage and commercial mortgage loans are considered past due when the borrower is in arrears two or more monthly payments. PCI residential mortgage loans and commercial mortgage loans past due 30-59 days as of March 31, 2015 amounted to $32.0 million and $0.3 million, respectively.

[8] According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage and commercial mortgage loans are considered past due when the borrower is in arrears two or more monthly payments. PCI residential mortgage loans and commercial mortgage loans past due 30-59 days as of December 31, 2014 amounted to $16.6 million and $0.8 million, respectively.

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INVESTMENT SECURITIES - OTTI Losses on Available-for-Sale Debt Securities (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Schedule Of Available For Sale Securities [Line Items]
Total other-than-temporary impairment losses	$ 0	$ 0
Net impairment losses recognized in earnings	156	0
Mortgage Backed Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Total other-than-temporary impairment losses	0	0
Portion of loss previously recognized in other comprehensive income	(156)	0
Net impairment losses recognized in earnings	$ (156)	$ 0

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Summary of Fair Value of Derivative Instruments and Location in Statement of Financial Condition (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Other Assets [Member]
Derivatives Fair Value [Line Items]
Derivatives, included in assets	$ 1	$ 39
Other Assets [Member] | Interest Rate Swap [Member]
Derivatives Fair Value [Line Items]
Derivatives, included in assets	0	33
Other Assets [Member] | Interest Rate Cap [Member] | Purchase
Derivatives Fair Value [Line Items]
Derivatives, included in assets	1	6
Other Assets [Member] | Interest Rate Cap [Member] | Written
Derivatives Fair Value [Line Items]
Derivatives, included in assets	0	0
Other Assets [Member] | Forward Contracts [Member]
Derivatives Fair Value [Line Items]
Derivatives, included in assets	0	0
Other Liabilities [Member]
Derivatives Fair Value [Line Items]
Derivatives, included in liabilities	221	187
Other Liabilities [Member] | Interest Rate Swap [Member]
Derivatives Fair Value [Line Items]
Derivatives, included in liabilities	0	33
Other Liabilities [Member] | Interest Rate Cap [Member] | Purchase
Derivatives Fair Value [Line Items]
Derivatives, included in liabilities	0	0
Other Liabilities [Member] | Interest Rate Cap [Member] | Written
Derivatives Fair Value [Line Items]
Derivatives, included in liabilities	1	6
Other Liabilities [Member] | Forward Contracts [Member]
Derivatives Fair Value [Line Items]
Derivatives, included in liabilities	$ 220	$ 148

XML

INVESTMENT SECURITIES - Investment Securities Available for Sale (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		12 Months Ended
	Mar. 31, 2015		Dec. 31, 2014
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	$ 1,977,681		$ 1,976,261
Non credit loss component of OTTI recorded in OCI	11,296		12,141
Unrealized gain on available-for-sale securities	37,708		31,951
Gross unrealized losses	29,867		30,405
Fair value	1,974,226		1,965,666
Weighted average yield	2.48%		2.49%
Puerto Rico Government obligations [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	65,500
Fair value	41,500		27,408
United States And Puerto Rico Government Obligations [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	453,831		407,832
Non credit loss component of OTTI recorded in OCI	0		0
Unrealized gain on available-for-sale securities	1,169		290
Gross unrealized losses	27,025		24,286
Fair value	427,975		383,836
Weighted average yield	1.90%		1.86%
Mortgage Backed Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	1,523,750		1,568,429
Non credit loss component of OTTI recorded in OCI	11,296		12,141
Unrealized gain on available-for-sale securities	36,539		31,661
Gross unrealized losses	2,842		6,119
Fair value	1,546,151		1,581,830
Weighted average yield	2.65%		2.66%
Federal Home Loan Mortgage Corporation Certificates And Obligations F H L M C [Member] | Mortgage Backed Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	305,060
Non credit loss component of OTTI recorded in OCI	0
Unrealized gain on available-for-sale securities	2,779
Gross unrealized losses	560
Fair value	307,279
Weighted average yield	2.17%
Government National Mortgage Association Certificates And Obligations G N M A [Member] | Mortgage Backed Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	340,383		355,989
Non credit loss component of OTTI recorded in OCI	0		0
Unrealized gain on available-for-sale securities	22,900		21,459
Gross unrealized losses	0		0
Fair value	363,283		377,448
Weighted average yield	3.83%		3.83%
Federal National Mortgage Association Certificates And Obligations F N M A [Member] | Mortgage Backed Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	835,187		851,341
Non credit loss component of OTTI recorded in OCI	0		0
Unrealized gain on available-for-sale securities	10,860		8,458
Gross unrealized losses	2,282		4,859
Fair value	843,765		854,940
Weighted average yield	2.37%		2.37%
Mortgage Backed Securities Issued By Private Enterprises [Member] | Mortgage Backed Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	43,120		45,788
Non credit loss component of OTTI recorded in OCI	11,296		12,141
Unrealized gain on available-for-sale securities	0		1
Gross unrealized losses	0		0
Fair value	31,824		33,648
Weighted average yield	2.15%		2.17%
Due Within One Year [Member] | U S Treasury Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	7,500		7,498
Non credit loss component of OTTI recorded in OCI	0		0
Unrealized gain on available-for-sale securities	0		1
Gross unrealized losses	0		0
Fair value	7,500		7,499
Weighted average yield	0.11%		0.11%
Due Within One Year [Member] | Puerto Rico Government obligations [Member]
Schedule Of Available For Sale Securities [Line Items]
Weighted average yield	0.00%
Due Within One Year [Member] | Government National Mortgage Association Certificates And Obligations G N M A [Member] | Mortgage Backed Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	17
Non credit loss component of OTTI recorded in OCI	0
Unrealized gain on available-for-sale securities	0
Gross unrealized losses	0
Fair value	17
Weighted average yield	3.52%
After One To Five Years [Member] | US Government Sponsored Enterprises Debt Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	278,054		260,889
Non credit loss component of OTTI recorded in OCI	0		0
Unrealized gain on available-for-sale securities	318		42
Gross unrealized losses	1,918		4,219
Fair value	276,454		256,712
Weighted average yield	1.25%		1.22%
After One To Five Years [Member] | Puerto Rico Government obligations [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	39,836		39,827
Non credit loss component of OTTI recorded in OCI	0		0
Unrealized gain on available-for-sale securities	0		0
Gross unrealized losses	16,922		12,419
Fair value	22,914
Weighted average yield	4.49%		4.49%
After One To Five Years [Member] | Other Available For Sale Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	100	[1]
Non credit loss component of OTTI recorded in OCI	0	[1]
Unrealized gain on available-for-sale securities	0	[1]
Gross unrealized losses	0	[1]
Fair value	100	[1]
Weighted average yield	1.50%
After One To Five Years [Member] | Federal Home Loan Mortgage Corporation Certificates And Obligations F H L M C [Member] | Mortgage Backed Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	432
Non credit loss component of OTTI recorded in OCI	0
Unrealized gain on available-for-sale securities	46
Gross unrealized losses	0
Fair value	478
Weighted average yield	4.95%
After One To Five Years [Member] | Government National Mortgage Association Certificates And Obligations G N M A [Member] | Mortgage Backed Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	55		39
Non credit loss component of OTTI recorded in OCI	0		0
Unrealized gain on available-for-sale securities	2		1
Gross unrealized losses	0		0
Fair value	57		40
Weighted average yield	3.93%		3.26%
After One To Five Years [Member] | Federal National Mortgage Association Certificates And Obligations F N M A [Member] | Mortgage Backed Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	3,743		4,160
Non credit loss component of OTTI recorded in OCI	0		0
Unrealized gain on available-for-sale securities	155		181
Gross unrealized losses	0		0
Fair value	3,898		4,341
Weighted average yield	3.37%		3.40%
After Five To Ten Years [Member] | US Government Sponsored Enterprises Debt Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	102,745		78,234
Non credit loss component of OTTI recorded in OCI	0		0
Unrealized gain on available-for-sale securities	850		246
Gross unrealized losses	1,037		2,077
Fair value	102,558		76,403
Weighted average yield	1.93%		1.72%
After Five To Ten Years [Member] | Puerto Rico Government obligations [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	875		886
Non credit loss component of OTTI recorded in OCI	0		0
Unrealized gain on available-for-sale securities	0		1
Gross unrealized losses	0		0
Fair value	875		887
Weighted average yield	5.20%		5.20%
After Five To Ten Years [Member] | Government National Mortgage Association Certificates And Obligations G N M A [Member] | Mortgage Backed Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	24,189		17,108
Non credit loss component of OTTI recorded in OCI	0		0
Unrealized gain on available-for-sale securities	956		501
Gross unrealized losses	0		0
Fair value	25,145		17,609
Weighted average yield	3.62%		3.65%
After Five To Ten Years [Member] | Federal National Mortgage Association Certificates And Obligations F N M A [Member] | Mortgage Backed Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	16,924		9,584
Non credit loss component of OTTI recorded in OCI	0		0
Unrealized gain on available-for-sale securities	646		521
Gross unrealized losses	31		5
Fair value	17,539		10,100
Weighted average yield	2.90%		3.49%
After Five To Ten Years [Member] | Mortgage Backed Securities Issued By Private Enterprises [Member] | Mortgage Backed Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	108		111
Non credit loss component of OTTI recorded in OCI	0		0
Unrealized gain on available-for-sale securities	0		1
Gross unrealized losses	0		0
Fair value	108		112
Weighted average yield	7.26%		7.27%
After Ten Years [Member] | Puerto Rico Government obligations [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	24,821		20,498
Non credit loss component of OTTI recorded in OCI	0		0
Unrealized gain on available-for-sale securities	1		0
Gross unrealized losses	7,148		5,571
Fair value	17,674		14,927
Weighted average yield	5.37%		5.83%
After Ten Years [Member] | Federal Home Loan Mortgage Corporation Certificates And Obligations F H L M C [Member] | Mortgage Backed Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	304,628		315,311
Non credit loss component of OTTI recorded in OCI	0		0
Unrealized gain on available-for-sale securities	2,733		1,743
Gross unrealized losses	560		1,260
Fair value	306,801		315,794
Weighted average yield	2.17%		2.17%
After Ten Years [Member] | Government National Mortgage Association Certificates And Obligations G N M A [Member] | Mortgage Backed Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	316,122		338,842
Non credit loss component of OTTI recorded in OCI	0		0
Unrealized gain on available-for-sale securities	21,942		20,957
Gross unrealized losses	0		0
Fair value	338,064		359,799
Weighted average yield	3.85%		3.83%
After Ten Years [Member] | Federal National Mortgage Association Certificates And Obligations F N M A [Member] | Mortgage Backed Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	814,520		837,597
Non credit loss component of OTTI recorded in OCI	0		0
Unrealized gain on available-for-sale securities	10,059		7,756
Gross unrealized losses	2,251		4,854
Fair value	822,328		840,499
Weighted average yield	2.35%		2.36%
After Ten Years [Member] | Mortgage Backed Securities Issued By Private Enterprises [Member] | Mortgage Backed Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	43,012		45,677
Non credit loss component of OTTI recorded in OCI	11,296		12,141
Unrealized gain on available-for-sale securities	0		0
Gross unrealized losses	0		0
Fair value	$ 31,716		$ 33,536
Weighted average yield	2.15%		2.17%
Equity Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Weighted average yield	0.00%

[1] Represents investment in a Community Investment Fund.

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LOAN PORTFOLIO - Loan Modifications are Considered TDRs (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015 numberofcontracts	Mar. 31, 2014 numberofcontracts
Financing Receivable Modifications [Line Items]
Number of Contracts	622	611
Pre-Modification Outstanding Recorded Investment	$ 31,858	$ 20,264
Post-Modification Outstanding Recorded Investment	31,601	19,935
Non Fha Va Residential Mortgage Loans [Member]
Financing Receivable Modifications [Line Items]
Number of Contracts	81	47
Pre-Modification Outstanding Recorded Investment	11,495	7,709
Post-Modification Outstanding Recorded Investment	11,265	7,711
Commercial Mortgage Loans [Member]
Financing Receivable Modifications [Line Items]
Number of Contracts	8	3
Pre-Modification Outstanding Recorded Investment	12,821	834
Post-Modification Outstanding Recorded Investment	12,931	837
Commercial And Industrial Loan [Member]
Financing Receivable Modifications [Line Items]
Number of Contracts	1	5
Pre-Modification Outstanding Recorded Investment	1,681	7,964
Post-Modification Outstanding Recorded Investment	1,681	7,630
Consumer Auto Loans [Member]
Financing Receivable Modifications [Line Items]
Number of Contracts	146	117
Pre-Modification Outstanding Recorded Investment	2,173	1,605
Post-Modification Outstanding Recorded Investment	2,130	1,605
Finance Leases [Member]
Financing Receivable Modifications [Line Items]
Number of Contracts	8	10
Pre-Modification Outstanding Recorded Investment	233	193
Post-Modification Outstanding Recorded Investment	184	193
Other Consumer Loans [Member]
Financing Receivable Modifications [Line Items]
Number of Contracts	377	429
Pre-Modification Outstanding Recorded Investment	3,391	1,959
Post-Modification Outstanding Recorded Investment	3,346	1,959
Commercial Construction [Member]
Financing Receivable Modifications [Line Items]
Number of Contracts	0	0
Pre-Modification Outstanding Recorded Investment	0	0
Post-Modification Outstanding Recorded Investment	0	0
Residential Construction [Member]
Financing Receivable Modifications [Line Items]
Number of Contracts	0	0
Pre-Modification Outstanding Recorded Investment	0	0
Post-Modification Outstanding Recorded Investment	0	0
Land Construction [Member]
Financing Receivable Modifications [Line Items]
Number of Contracts	1	0
Pre-Modification Outstanding Recorded Investment	64	0
Post-Modification Outstanding Recorded Investment	$ 64	$ 0

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STOCKHOLDERS' EQUITY - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015 numberofstocks	Mar. 31, 2014	Dec. 31, 2014
Class Of Stock [Line Items]
Common stock, shares authorized	2,000,000,000		2,000,000,000
Common stock, par value	$ 0.10		$ 0.10
Common stock, shares issued	214,618,015		213,724,749
Common stock, shares outstanding	213,827,258		212,984,700
Granted shares of restricted stock	821,532
Corporation has authorized shares of preferred stock	50,000,000		50,000,000
Preferred stock, par value	$ 1
Number of preferred stock series	5
Stock repurchase plan treasury stock	790,757		740,049
Repurchased of common stock	50,708
Liquidation value per share	$ 25
Legal surplus reserve amount	$ 40.0
Conversion Of Stock Shares Issued1		1,075,283
Shares Of Preferred Stock Exchanged		249,477
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Nonvested Number			2,327,156
Omnibus Plan [Member]
Class Of Stock [Line Items]
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Nonvested Number	3,076,438
Restricted Stock [Member]
Class Of Stock [Line Items]
Repurchased of common stock	22,525
FirstBank [Member]
Class Of Stock [Line Items]
Legal surplus reserve rate	10.00%
Original amount contributed in percentage	20.00%
Series A Preferred Stock [Member]
Class Of Stock [Line Items]
Preferred stock dividend rate percentage	7.125%
Series B Preferred Stock [Member]
Class Of Stock [Line Items]
Preferred stock dividend rate percentage	8.35%
Series C Preferred Stock [Member]
Class Of Stock [Line Items]
Preferred stock dividend rate percentage	7.40%
Series D Preferred Stock [Member]
Class Of Stock [Line Items]
Preferred stock dividend rate percentage	7.25%
Series E Preferred Stock [Member]
Class Of Stock [Line Items]
Preferred stock dividend rate percentage	7.00%

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Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Allowance For Loan Losses [PolicyTextBlock]

Utilization of longer historical loss periods to better reflect the level of incurred losses in the portfolio. Historical charge-off rates are calculated by the Corporation on a quarterly basis by tracking cumulative charge-offs experienced over a two-year loss period on loans according to their internal risk rating (referred to as “base rate” for the quarter). Prior to the second quarter 2014 enhancements, the Corporation would use the base rate of the current quarter or the average of the last 4 quarters, if greater. During the second quarter of 2014, the Corporation eliminated the use of the “greater of” approach and began to use the base rate average of the last 8 quarters. This change captures a longer historical period that helps mitigate period to period volatility in the loss rates.

Enhancements of the environmental factors adjustment. Prior to the second quarter of 2014 enhancements, these adjustments were applied in the form of basis point additions to the loss ratio based on changes in credit and economic indicators observed in the most recent periods. Beginning in the second quarter of 2014, the resulting factor derived from a set of risk-based ratings and weights assigned to credit and economic indicators over a reasonable period is applied to a developed expected range of historical losses, in order to adjust the base rates. These enhancements result in a framework that can be applied more consistently, by having a more granular analysis that better captures trends in economic conditions and the impact on the Corporation's portfolio.

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SEGMENT INFORMATIO - Information about reportable segments (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Segment Reporting Information [Line Items]
Interest income	$ 152,485	$ 160,571
Net (charge) credit for transfer of funds	0	0
Interest expense	(26,838)	(29,251)
Net interest income (loss)	125,647	131,320
(Provision) release for loan and lease losses	(32,970)	(31,915)
Non-interest income (loss)	19,286	17,960
Direct non-interest expenses	(64,705)	(71,795)
Segment (loss) income	47,258	45,570
Average earnings assets	11,940,989	12,096,474
Mortgage Banking [Member]
Segment Reporting Information [Line Items]
Interest income	33,876	25,748
Net (charge) credit for transfer of funds	11,236	8,546
Interest expense	0	0
Net interest income (loss)	22,640	17,202
(Provision) release for loan and lease losses	(6,963)	(3,384)
Non-interest income (loss)	3,399	3,102
Direct non-interest expenses	(8,065)	(9,832)
Segment (loss) income	11,011	7,088
Average earnings assets	2,492,247	1,955,990
Consumer Retail Banking [Member]
Segment Reporting Information [Line Items]
Interest income	49,836	55,812
Net (charge) credit for transfer of funds	(3,684)	(3,635)
Interest expense	(5,657)	(6,796)
Net interest income (loss)	47,863	52,651
(Provision) release for loan and lease losses	(16,685)	(20,495)
Non-interest income (loss)	12,417	10,630
Direct non-interest expenses	(31,559)	(32,015)
Segment (loss) income	12,036	10,771
Average earnings assets	2,045,277	2,006,395
Commercial And Corporate [Member]
Segment Reporting Information [Line Items]
Interest income	34,803	42,299
Net (charge) credit for transfer of funds	3,795	2,999
Interest expense	0	0
Net interest income (loss)	31,008	39,300
(Provision) release for loan and lease losses	(9,093)	(13,345)
Non-interest income (loss)	524	1,767
Direct non-interest expenses	(7,979)	(12,578)
Segment (loss) income	14,460	15,144
Average earnings assets	3,028,358	3,921,439
Treasury And Investments [Member]
Segment Reporting Information [Line Items]
Interest income	13,067	15,583
Net (charge) credit for transfer of funds	(7,754)	(5,800)
Interest expense	(16,007)	(16,761)
Net interest income (loss)	4,814	4,622
(Provision) release for loan and lease losses	0	0
Non-interest income (loss)	(100)	53
Direct non-interest expenses	(1,339)	(1,126)
Segment (loss) income	3,375	3,549
Average earnings assets	2,764,058	2,710,930
United States Operations [Member]
Segment Reporting Information [Line Items]
Interest income	11,231	10,896
Net (charge) credit for transfer of funds	(3,593)	(2,110)
Interest expense	(4,339)	(4,797)
Net interest income (loss)	10,485	8,209
(Provision) release for loan and lease losses	2,133	5,959
Non-interest income (loss)	524	441
Direct non-interest expenses	(7,183)	(7,220)
Segment (loss) income	5,959	7,389
Average earnings assets	971,887	846,152
Virgin Islands Operations [Member]
Segment Reporting Information [Line Items]
Interest income	9,672	10,233
Net (charge) credit for transfer of funds	0	0
Interest expense	(835)	(897)
Net interest income (loss)	8,837	9,336
(Provision) release for loan and lease losses	(2,362)	(650)
Non-interest income (loss)	2,522	1,967
Direct non-interest expenses	(8,580)	(9,024)
Segment (loss) income	417	1,629
Average earnings assets	$ 639,162	$ 655,568

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FAIR VALUE (Tables)

3 Months Ended

Mar. 31, 2015

Assets and Liabilities Measured at Fair Value on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis, are summarized below:
	As of March 31, 2015								As of December 31, 2014
	Fair Value Measurements Using								Fair Value Measurements Using
(In thousands)	Level 1		Level 2		Level 3		Assets/Liabilities at Fair Value		Level 1		Level 2		Level 3		Assets/Liabilities at Fair Value
Assets:
Securities available for sale :
U.S. Treasury Securities	$	7,500	$	-	$	-	$	7,500	$	7,499	$	-	$	-	$	7,499
Noncallable U.S. agency debt		-		286,066		-		286,066		-		228,157		-		228,157
Callable U.S. agency debt and MBS		-		1,607,273		-		1,607,273		-		1,653,140		-		1,653,140
Puerto Rico government obligations		-		39,073		2,390		41,463		-		40,658		2,564		43,222
Private label MBS		-		-		31,824		31,824		-		-		33,648		33,648
Other investments held for sale		-		-		100		100		-		-		-		-
Derivatives, included in assets:
Interest rate swap agreements		-		-		-		-		-		33		-		33
Purchased interest rate cap agreements		-		1		-		1		-		6		-		6
Liabilities:
Derivatives, included in liabilities:
Interest rate swap agreements		-		-		-		-		-		33		-		33
Written interest rate cap agreement		-		1		-		1		-		6		-		6
Forward contracts		-		220		-		220		-		148		-		148

Fair Value of Assets and Liabilities Measured on Recurring Basis

		Total Fair Value Measurements
		Quarter ended March 31,
		2015		2014
Level 3 Instruments Only		Securities		Securities
(In thousands)		Available For Sale(1)		Available For Sale(1)
Beginning balance		$	36,212		43,292
Total gains (losses) (realized/unrealized):
Included in earnings			(156)		-
Included in other comprehensive income			619		964
Held-to-Maturity investment securities reclassified to Available-for-Sale
Sales
Purchases			100		5,123
Principal repayments and amortization			(2,461)		(1,869)
Ending balance		$	34,314	$	47,510
(1)	Amounts mostly related to private label MBS.

Impairment or Valuation Adjustments were Recorded for Assets Recognized at Fair Value

The table below summarizes changes in unrealized gains and losses recorded in earnings for the quarters ended March 31, 2015 and 2014 for Level 3 assets and liabilities that are still held at the end of each period:
		Changes in Unrealized Losses		Changes in Unrealized Losses
		(Quarter ended March 31, 2015)		(Quarter Ended March 31, 2014)
Level 3 Instruments Only	Securities		Securities
(In thousands)	Available For Sale		Available For Sale
Changes in unrealized losses relating to assets still held at reporting date:
Net impairment losses on investment securities (credit component)		$ (156)		$ -

As of March 31, 2015, impairment or valuation adjustments were recorded for assets recognized at fair value on a non-recurring basis as shown in the following table:
		Carrying value as of March 31, 2015						Losses recorded for the Quarter Ended March 31, 2015
		Level 1		Level 2		Level 3
			(In thousands)
Loans receivable (1)		$	-	$	-	$	436,944	$	(13,725)
Other Real Estate Owned (2)			-		-		122,628		(2,711)
Mortgage servicing rights (3)			-		-		22,973		(38)
Loans Held For Sale (4)			-		-		54,588		-
(1)	Mainly impaired commercial and construction loans. The impairment was generally measured based on the fair value of the collateral. The fair values were derived from external appraisals that take into consideration prices in observed transactions involving similar assets in similar locations but adjusted for specific characteristics and assumptions of the collateral (e.g., absorption rates), which are not market observable.
(2)	The fair value was derived from appraisals that take into consideration prices in observed transactions involving similar assets in similar locations but adjusted for specific characteristics and assumptions of the properties (e.g., absorption rates and net operating income of income producing properties), which are not market observable. Losses were related to market valuation adjustments after the transfer of the loan to the OREO portfolio.
(3)	Fair value adjustments to mortgage servicing rights were mainly due to assumptions associated with mortgage prepayment rates. The Corporation carries its mortgage servicing rights at the lower of cost or market, measured at fair value on a non-recurring basis. Assumptions for the value of mortgage servicing rights included: Prepayment rate-10.25%, Discount Rate-10.62%.
(4)	The value of these loans was derived from external appraisals, adjusted for specific characteristics of the loans, and, for loans with signed sale agreements, the value was determined based on the sales price in such agreements.

As of March 31, 2014, impairment or valuation adjustments were recorded for assets recognized at fair value on a non-recurring basis as shown in the following table:
		Carrying value as of March 31, 2014						(Losses) Gain recorded for the Quarter Ended March 31, 2014
		Level 1		Level 2		Level 3
		(In thousands)
Loans receivable (1)		$	-	$	-	$	478,393	$	(23,793)
Other Real Estate Owned (2)			-		-		138,622		(4,747)
Mortgage servicing rights (3)			-		-		22,026		(219)
Loans Held For Sale (4)			-		-		54,755		-
(1)	Mainly impaired commercial and construction loans. The impairment was generally measured based on the fair value of the collateral. The fair values were derived from external appraisals that take into consideration prices in observed transactions involving similar assets in similar locations but adjusted for specific characteristics and assumptions of the collateral (e.g. absorption rates), which are not market observable.
(2)	The fair value was derived from appraisals that take into consideration prices in observed transactions involving similar assets in similar locations but adjusted for specific characteristics and assumptions of the properties (e.g., absorption rates and net operating income of income producing properties), which are not market observable. Losses were related to market valuation adjustments after the transfer of the loan to the OREO portfolio.
(3)	Fair value adjustments to the mortgage servicing rights were mainly due to assumptions associated with mortgage prepayments rates. The Corporation carries its mortgage servicing rights at the lower-of-cost or market, measured at fair value on a non-recurring basis. Assumptions for the value of mortgage servicing rights included: Prepayment Rate-9.10%, Discount Rate-10.61%.
(4)	The value of these loans was derived from external appraisals, adjusted for specific characteristics of the loans, and, for loans with signed sale agreements, the value was determined based on the sales price in such agreements.

Estimated Fair Value and Carrying Value of Financial Instruments

The following table presents the estimated fair value and carrying value of financial instruments as of March 31, 2015 and December 31, 2014
	Total Carrying Amount in Statement of Financial Condition March 31, 2015		Fair Value Estimated March 31, 2015		Level 1		Level 2		Level 3
	(In thousands)
Assets:
Cash and due from banks and money
market investments	$	984,436	$	984,436	$	984,436	$	-	$	-
Investment securities available
for sale		1,974,226		1,974,226		7,500		1,932,412		34,314
Other equity securities		26,185		26,185		-		26,185		-
Loans held for sale		81,723		82,942		-		28,301		54,641
Loans held for investment		9,485,372
Less: allowance for loan and lease losses		(226,064)
Loans held for investment, net of allowance	$	9,259,308		9,115,707		-		-		9,115,707
Derivatives, included in assets		1		1		-		1		-
Liabilities:
Deposits		9,841,038		9,852,630		-		9,852,630		-
Securities sold under agreements to repurchase		900,000		966,365		-		966,365		-
Advances from FHLB		325,000		326,087		-		326,087		-
Other borrowings		231,959		169,935		-		-		169,935
Derivatives, included in liabilities		221		221		-		221		-

	Total Carrying Amount in Statement of Financial Condition December 31, 2014		Fair Value Estimated December 31, 2014		Level 1		Level 2		Level 3
	(In thousands)
Assets:
Cash and due from banks and money
market investments	$	796,108	$	796,108	$	796,108	$	-	$	-
Investment securities available
for sale		1,965,666		1,965,666		7,499		1,921,955		36,212
Other equity securities		25,752		25,752		-		25,752		-
Loans held for sale		76,956		77,888		-		23,247		54,641
Loans held for investment		9,262,436
Less: allowance for loan and lease losses		(222,395)
Loans held for investment, net of allowance	$	9,040,041		8,844,659		-		-		8,844,659
Derivatives, included in assets		39		39		-		39		-
Liabilities:
Deposits		9,483,945		9,486,325		-		9,486,325		-
Securities sold under agreements to repurchase		900,000		958,715		-		958,715		-
Advances from FHLB		325,000		324,376		-		324,376		-
Other borrowings		231,959		162,344		-		-		162,344
Derivatives, included in liabilities		187		187		-		187		-

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques [Table Text Block]

Qualitative information regarding the fair value measurements for Level 3 financial instruments is as follows:
	March 31, 2015
	Method	Inputs
Loans	Income, Market, Comparable Sales, Discounted Cash Flows	External appraised values; probability weighting of broker price opinions; management assumptions regarding market trends or other relevant factors
OREO	Income, Market, Comparable Sales, Discounted Cash Flows	External appraised values; probability weighting of broker price opinions; management assumptions regarding market trends or other relevant factors
Mortgage servicing rights	Discounted Cash Flow	Weighted average prepayment rate of 10.25%; weighted average discount rate of 10.62%

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block]

The table below presents qualitative information for significant assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at March 31, 2015:
	March 31, 2015
(In thousands)	Fair Value		Valuation Technique	Unobservable Input	Range
Investment securities available-for-sale:
Private label MBS	$	31,824	Discounted cash flow	Discount rate	14.5%
				Prepayment rate	18.04% -100.00% (Weighted Average 32%)
				Projected Cumulative Loss Rate	0.00% -80.00% (Weighted Average 7.3%)
Puerto Rico Government Obligations		2,390	Discounted cash flow	Prepayment speed	2.89%

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NON-CONSOLIDATED VARIABLE INTEREST ENTITIES AND SERVICING ASSETS

3 Months Ended

Mar. 31, 2015

NON-CONSOLIDATED VARIABLE INTEREST ENTITIES AND SERVICING ASSETS

NOTE 14 – NON-CONSOLIDATED VARIABLE INTEREST ENTITIES AND SERVICING ASSETS

The Corporation transfers residential mortgage loans in sale or securitization transactions in which it has continuing involvement, including servicing responsibilities and guarantee arrangements. All such transfers have been accounted for as sales as required by applicable accounting guidance.

When evaluating transfers and other transactions with Variable Interest Entities (“VIEs”) for consolidation, the Corporation first determines if the counterparty is an entity for which a variable interest exists. If no scope exception is applicable and a variable interest exists, the Corporation then evaluates if it is the primary beneficiary of the VIE and whether the entity should be consolidated or not.

Below is a summary of transfers of financial assets to VIEs for which the Corporation has retained some level of continuing involvement:

GNMA

The Corporation typically transfers first lien residential mortgage loans in conjunction with GNMA securitization transactions in which the loans are exchanged for cash or securities that are readily redeemed for cash proceeds and servicing rights. The securities issued through these transactions are guaranteed by the issuer and, as such, under seller/servicer agreements, the Corporation is required to service the loans in accordance with the issuer's servicing guidelines and standards. As of March 31, 2015, the Corporation serviced loans securitized through GNMA with a principal balance of $1.2billion.

Trust Preferred Securities

In 2004, FBP Statutory Trust I, a financing subsidiary of the Corporation, sold to institutional investors $100 million of its variable rate trust-preferred securities. The proceeds of the issuance, together with the proceeds of the purchase by the Corporation of $3.1 million of FBP Statutory Trust I variable rate common securities, were used by FBP Statutory Trust I to purchase $103.1 million aggregate principal amount of the Corporation's Junior Subordinated Deferrable Debentures. Also in 2004, FBP Statutory Trust II, a statutory trust that is wholly owned by the Corporation, sold to institutional investors $125 million of its variable rate trust-preferred securities. The proceeds of the issuance, together with the proceeds of the purchase by the Corporation of $3.9 million of FBP Statutory Trust II variable rate common securities, were used by FBP Statutory Trust II to purchase $128.9 million aggregate principal amount of the Corporation's Junior Subordinated Deferrable Debentures. The debentures are presented in the Corporation's consolidated statement of financial condition as Other Borrowings, net of related issuance costs. The variable rate trust-preferred securities are fully and unconditionally guaranteed by the Corporation. The $100 million Junior Subordinated Deferrable Debentures issued by the Corporation in April 2004 and the $125 million issued in September 2004 mature on June 17, 2034 and September 20, 2034, respectively; however, under certain circumstances, the maturity of Junior Subordinated Deferrable Debentures may be shortened (such shortening would result in a mandatory redemption of the variable rate trust-preferred securities). The Collins Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act eliminates certain trust-preferred securities from Tier 1 Capital. Bank holding companies, such as the Corporation, must fully phase out these instruments from Tier 1 capital by January 1, 2016 (25% allowed in 2015 and 0% in 2016); however, these instruments may remain in Tier 2 capital until the instruments are redeemed or mature.The Corporation has elected to defer the interest payments that were due on quarterly periods since March 2012. The aggregate amount of payments deferred and accrued approximates $23.7million as of March 31, 2015. Under the indentures, the Corporation has the right, from time to time, and without causing an event of default, to defer payments of interest on the subordinated debentures by extending the interest payment period at any time and from time to time during the term of the subordinated debentures for up to twenty consecutive quarterly periods. Future interest payments are subject to Federal Reserve approval.

Grantor Trusts

During 2004 and 2005, a third party to the Corporation, from now on identified as the seller, established a series of statutory trusts to effect the securitization of mortgage loans and the sale of trust certificates. The seller initially provided the servicing for a fee, which is senior to the obligations to pay trust certificate holders. The seller then entered into a sales agreement through which it sold and issued the trust certificates in favor of the Corporation's banking subsidiary. Currently, the Bank is the sole owner of the trust certificates; the servicing of the underlying residential mortgages that generate the principal and interest cash flows, is performed by another third party, which receives a servicing fee. The securities are variable rate securities indexed to 90-day LIBOR plus a spread. The principal payments from the underlying loans are remitted to a paying agent (servicer) who then remits interest to the Bank; interest income is shared to a certain extent with the FDIC, which has an interest only strip (“IO”) tied to the cash flows of the underlying loans and is entitled to receive the excess of the interest income less a servicing fee over the variable rate income that the Bank earns on the securities. This IO is limited to the weighted average coupon of the securities. The FDIC became the owner of the IO upon the intervention of the seller, a failed financial institution. No recourse agreement exists and the risk from losses on non accruing loans and repossessed collateral is absorbed by the Bank as the sole holder of the certificates. As of March 31, 2015, the amortized balance and carrying value of the Grantor Trusts amounted to $43.0 million and $31.7 million, respectively, with a weighted average yield of 2.15%.

Investment in unconsolidated entity

On February 16, 2011, FirstBank sold an asset portfolio consisting of performing and non-performing construction, commercial mortgage and commercial and industrial loans with an aggregate book value of $269.3 million to CPG/GS, an entity organized under the laws of the Commonwealth of Puerto Rico and majority owned by PRLP Ventures LLC ("PRLP"), a company created by Goldman, Sachs & Co. and Caribbean Property Group. In connection with the sale, the Corporation received $88.5 million in cash and a 35% interest in CPG/GS, and made a loan in the amount of $136.1 million representing seller financing provided by FirstBank. The loan had a seven-year maturity and bears variable interest at 30-day LIBOR plus 300 basis points and is secured by a pledge of all of the acquiring entity's assets as well as the PRLP's 65% ownership interest in CPG/GS. As of March 31, 2015, the carrying amount of the loan was $25.2 million,which was included in the Corporation's Commercial and Industrial loans held for investment portfolio.FirstBank's equity interest in CPG/GS is accounted for under the equity method and included as part of Investment in unconsolidated entity in the Consolidated Statements of Financial Condition. When applying the equity method, the Bank follows the HLBV method to determine its share in CPG/GS's earnings or loss. Under HLBV, the Bank determines its share in CPG/GS's earnings or loss by determining the difference between its “claim on CPG/GS's book value” at the end of the period as compared to the beginning of the period. This claim is calculated as the amount the Bank would receive if CPG/GS were to liquidate all of its assets at recorded amounts determined in accordance with GAAP and distribute the resulting cash to the investors, PRLP, and FirstBank, according to their respective priorities as provided in the contractual agreement. The Bank reports its share of CPG/GS's operating results on a one-quarter lag basis. In addition, as a result of using HLBV, the difference between the Bank's investment in CPG/GS and its claim on the book value of CPG/GS at the date of the investment, known as the basis difference, is amortized over the estimated life of the investment, or five years.CPG/GS records its loans receivable under the fair value option.The loss recorded in the first half of 2014 reduced to zero the carrying amount of the Bank's investment in CPG/GS. No negative investment needs to be reported as the Bank has no legal obligation or commitment to provide further financial support to this entity; thus, no further losses will be recorded on this investment. Any potential increase in the carrying value of the investment in CPG/GS, under the HLBV method, would depend upon how better off the Bank is at the end of the period than it was at the beginning of the period after the waterfall calculation performed to determine the amount of gain allocated to the investors.

FirstBank also provided an $80 million advance facility to CPG/GS to fund unfunded commitments and costs to complete projects under construction, which was fully disbursed in 2011, and a $20 million working capital line of credit to fund certain expenses of CPG/GS. During 2013, the working capital line of credit was renewed and reduced to $7 million for a period of two years expiring on September 2015. During 2012, CPG/GS repaid the outstanding balance of the advance facility to fund unfunded commitments, and the funds became available to redraw under a one-time revolver agreement. These loans bear variable interest at 30-day LIBOR plus 300 basis points. As of March 31, 2015, the carrying values of the revolver agreement and the working capital line were $38.4 million and $0, respectively, and are included in the Corporation's commercial andindustrial loans held for investment portfolio.

Cash proceeds received by CPG/GS are first used to cover operating expenses and debt service payments, including the note receivable, the advance facility, and the working capital line, described above, which must be substantially repaid before proceeds can be used for other purposes, including the return of capital to both PRLP and FirstBank. FirstBank will not receive any return on its equity interest until PRLP receives an aggregate amount equivalent to its initial investment and a priority return of at least 12%, resulting in FirstBank's interest in CPG/GS being subordinate to PRLP's interest. CPG/GS will then begin to make payments pro rata to PRLP and FirstBank, 35% and 65%, respectively, until FirstBank has achieved a 12% return on its invested capital and the aggregate amount of distributions is equal to FirstBank's capital contributions to CPG/GS.

The Bank has determined that CPG/GS is a VIE in which the Bank is not the primary beneficiary. In determining the primary beneficiary of CPG/GS, the Bank considered applicable guidance that requires the Bank to qualitatively assess the determination of the primary beneficiary (or consolidator) of CPG/GS based on whether it has both the power to direct the activities of CPG/GS that most significantly impact the entity's economic performance and the obligation to absorb losses of CPG/GS that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE.

The Bank determined that it does not have the power to direct the activities that most significantly impact the economic performance of CPG/GS as it does not have the right to manage the loan portfolio, impact foreclosure proceedings, or manage the construction and sale of the property; therefore, the Bank concluded that it is not the primary beneficiary of CPG/GS. As a creditor to CPG/GS, the Bank has certain rights related to CPG/GS; however, these are intended to be protective in nature and do not provide the Bank with the ability to manage the operations of CPG/GS. Since CPG/GS is not a consolidated subsidiary of the Bank and the transaction met the criteria for sale accounting under authoritative guidance, the Bank accounted for this transaction as a true sale, recognizing the cash received, the notes receivable, and the interest in CPG/GS and derecognizing the loan portfolio sold.

The initial fair value of the investment in CPG/GS was determined using techniques with significant unobservable (Level 3) inputs. The valuation inputs included an estimate of future cash flows, expectations about possible variations in the amount and timing of cash flows, and a discount factor based on a rate of return. The Corporation researched available market data and internal information (i.e., proposals received for the servicing of distressed assets and public disclosures and other information about similar structures and/or of distressed asset sales) and determined reasonable ranges of expected returns for FirstBank's equity interest.

The rate of return of 17.57% was used as the discount factor to estimate the value of FirstBank's equity interest and represents the Bank's estimate of the yield a market participant would require. A reasonable range of equity returns was assessed based on consideration of a range of company-specific risk premiums. The valuation of this type of equity interest is highly subjective and somewhat dependent on nonobservable market assumptions, which may result in variations from market participant to market participant.

The following table shows summarized unaudited income statement information of CPG/GS for the quarters ended March 31, 2015 and 2014:
	Quarter Ended
	March 31,		March 31,
	2015		2014
	(In thousands)
Revenues, including net realized gains on sale of
investments in loans and OREO	$	588	$	751
Gross profit (loss)	$	(8,240)	$	(1,508)
Net loss	$	(7,751)	$	(2,447)

Servicing Assets

The Corporation is actively involved in the securitization of pools of FHA-insured and VA-guaranteed mortgages for issuance of GNMA mortgage-backed securities. Also, certain conventional conforming loans are sold to FNMA or FHLMC with servicing retained. The Corporation recognizes as separate assets the rights to service loans for others, whether those servicing assets are originated or purchased.

The changes in servicing assets are shown below:
		Quarter ended
		March 31,		March 31,
		2015		2014
			(In thousands)
Balance at beginning of period		$	22,838	$	21,987
Capitalization of servicing assets			1,073		1,052
Amortization			(856)		(783)
Adjustment to fair value			(38)		(219)
Other (1)			(44)		(11)
Balance at end of period		$	22,973	$	22,026
(1)	Amount represents the adjustment to fair value related to the repurchase of loans serviced for others.

Impairment charges are recognized through a valuation allowance for each individual stratum of servicing assets. The valuation allowance is adjusted to reflect the amount, if any, by which the cost basis of the servicing asset for a given stratum of loans being serviced exceeds its fair value. Any fair value in excess of the cost basis of the servicing asset for a given stratum is not recognized.

Changes in the impairment allowance were as follows:
	Quarter ended
	March 31,		March 31,
	2015		2014
		(In thousands)
Balance at beginning of period	$	55	$	212
Temporary impairment charges		58		219
Recoveries		(20)		-
Balance at end of period	$	93	$	431

	The components of net servicing income are shown below:
		Quarter ended
		March 31,		March 31,
		2015		2014
			(In thousands)
Servicing fees		$	1,764	$	1,671
Late charges and prepayment penalties			190		164
Adjustment for loans repurchased			(44)		(11)
Other (1)			(89)		(358)
Servicing income, gross			1,821		1,466
Amortization and impairment of servicing assets			(894)		(1,002)
Servicing income, net		$	927	$	464
(1)	Mainly consisted of compensatory fees imposed by GSEs and losses related to representations and warranties.

The Corporation's servicing assets are subject to prepayment and interest rates risks. Constant prepayment rate assumptions for the Corporation's servicing assets for the government guaranteed mortgage loans were 9.2% and 9.1% for the quarters ended March 31, 2015 and 2014, respectively. For conventional conforming mortgage loans, the Corporation used 9.0% and 8.9%, and for the conventional non-conforming mortgage loans 14.0% and 13.4%, for the quarters ended March 31, 2015and 2014, respectively. Discount rate assumptions used were11.5% for government guaranteed mortgage loans for each of the quarters ended March 31,2015 and 2014;9.5% for conventional conforming mortgage loans for each of the quarters ended March 31, 2015 and 2014; and 13.8% and13.9% for conventional non-conforming mortgage loans for the quarters ended March 31, 2015and 2014, respectively.

As of March 31, 2015, fair values of the Corporation's servicing assets were based on a valuation model that incorporates market driven assumptionsregarding discount rates and mortgage prepayment rates, adjusted by the particular characteristics of the Corporation's servicing portfolio. The weighted-averages of the key economic assumptions used by the Corporation in its valuation model and the sensitivity of the current fair value to immediate 10% and 20% adverse changes in those assumptions for mortgage loans as of March 31, 2015 were as follows:

	(Dollars in thousands)
Carrying amount of servicing assets	$	22,973
Fair value	$	25,195
Weighted-average expected life (in years)		8.47
Constant prepayment rate (weighted-average annual rate)		10.25%
Decrease in fair value due to 10% adverse change	$	948
Decrease in fair value due to 20% adverse change	$	1,838
Discount rate (weighted-average annual rate)		10.62%
Decrease in fair value due to 10% adverse change	$	1,050
Decrease in fair value due to 20% adverse change	$	2,020

These sensitivities are hypothetical and should be used with caution. As the figures indicate, changes in fair value based on a 10% variation in assumptions generally cannot be extrapolated because the relationship of the change in assumption and the change in fair value may not be linear. Also, in this table, the effect of a variation in a particular assumption on the fair value of the servicing asset is calculated without changing any other assumption; in reality, changes in one factor may result in changes in another (for example, increases in market interest rates may result in lower prepayments), which may magnify or counteract the sensitivities.

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DEPOSITS - Summary of Deposit Balances (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Deposits [Line Items]
Non-interest bearing checking accounts	$ 1,175,943	$ 900,616
Savings accounts	2,641,793	2,450,484
Interest-bearing checking accounts	1,127,560	1,054,136
Certificates of deposit	2,323,259	2,191,663
Brokered certificates of deposit	2,572,483	2,887,046
Total deposits	$ 9,841,038	$ 9,483,945

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STOCKHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2015

STOCKHOLDERS' EQUITY

NOTE 19 – STOCKHOLDERS' EQUITY

Common Stock

As of March 31, 2015 and December 31, 2014, the Corporation had 2,000,000,000 authorized shares of common stock with a par value of $0.10 per share. As of March 31, 2015 and December 31, 2014, there were 214,618,015 and 213,724,749 shares issued, respectively, and 213,827,258 and 212,984,700shares outstanding, respectively. On July 30, 2009, the Corporation announced the suspension of common and preferred stock dividends effective with the preferred dividend for the month of August 2009.

During the first quarter of 2015, the Corporation awarded 30,068 shares of restricted stock under the OmnibusPlan to one of the Corporation's independent directors, of which 4,295 shares vest in one year and the remaining 25,773 shares vest in five years. Also in the first quarter of 2015, the Corporation granted 791,464 shares of restricted stock to certain senior officers and certain other employees. For 40,000 of the 791,464 shares awarded to employees, the requisite service period is approximately three months.For the remaining 751,464 shares, the restrictions on such restricted stock will lapse with respect to 50% over a two-year period and 50% over a three-year period. Included in the shares of restricted stock granted in the first quarter of 2015 are 615,464 shares granted to certain senior officers consistent with the requirements of TARP. In addition, in the first quarter of 2015, theCorporationissued 80,234 shares of common stock as increased compensation to certain executive officers.As of March 31, 2015 and December 31, 2014, there were 3,076,438 and 2,327,156 shares of unvested restricted stock outstanding. During the first quarter of 2015, 8,500 shares of restricted stock were forfeited and the restrictions on 63,750 shares of restricted stock lapsed. Refer to Note 4 for additional information.

Preferred Stock

The Corporation has 50,000,000 authorized shares of preferred stock with a par value of $1, redeemable at the Corporation's option subject to certain terms. This stock may be issued in series and the shares of each series shall have such rights and preferences as are fixed by the Board of Directors when authorizing the issuance of that particular series. As of March 31, 2015, the Corporation has five outstanding series of nonconvertible, non-cumulative preferred stock: 7.125% non-cumulative perpetual monthly income preferred stock, Series A; 8.35% noncumulative perpetual monthly income preferred stock, Series B; 7.40% noncumulative perpetual monthly income preferred stock, Series C; 7.25% noncumulative perpetual monthly income preferred stock, Series D; and 7.00% noncumulative perpetual monthly income preferred stock, Series E. The liquidation value per share is $25.

Effective January 17, 2012, the Corporation delisted all of its outstanding series of nonconvertible, noncumulative preferred stock from the New York Stock Exchange. The Corporation has not arranged for listing and/or registration on another national securities exchange or for quotation of the Series A through E Preferred Stock in a quotation medium.

In the first quarter of 2014, the Corporation issued an aggregate of 1,075,283 shares of its common stock in exchange for an aggregate of 249,477 shares of the Corporation's Series A through EPreferred Stock,having an aggregate liquidation value of $6.2 million. The shares of common stock were issued to two holders of the Series A through E Preferred Stock in reliance upon the exemption set forth in Section 3(a)(9) of the Securities Act of 1933, as amended, for securities exchanged by an issuer with existing security holders where no commission or other remuneration is paid or given directly or indirectly by the issuer for soliciting such exchange. The carrying (liquidation) value of the Series A through E preferred stock exchanged, or $6.2 million, was reduced, and common stock and additional paid-in capital increased in the amount of the fair value of the common stock issued. The Corporation recorded the par value of the shares issued as common stock ($0.10 per common share) or $0.1 million. The excess of the common stock fair value over the par value, or $5.5 million, was recorded in additional paid-in capital. The excess of the carrying amount of the shares of preferred stock over the fair value of the shares of common stock, or $0.4 million, was recorded as an increase to retained earnings and an increase in earnings per common share computation.

Treasury stock

During the first quarter of 2015, the Corporation withheld an aggregate of 50,708shares of the common stock that was paid to certain senior officers as additional compensation and of restricted stockthat vested during the first quarter of 2015to cover employees' payroll and income tax withholding liabilities; these shares are also held as treasury shares. As of March 31, 2015 and December 31, 2014, the Corporation had790,757and740,049shares held as treasury stock, respectively.

FirstBank Statutory Reserve (Legal Surplus)

The Banking Law of the Commonwealth of Puerto Rico requires that a minimum of 10% of FirstBank's net income for the year be transferred to legal surplus until such surplus equals the total of paid-in-capital on common and preferred stock. Amounts transferred to the legal surplus account from the retained earnings account are not available for distribution to the stockholders without the prior consent of the Puerto Rico Commissioner of Financial Institutions. The Puerto Rico Banking Law provides that when the expenditures of a Puerto Rico commercial bank are greater than receipts, the excess of the expenditures over receipts shall be charged against the undistributed profits of the bank, and the balance, if any shall be charged against the reserve fund, as a reduction thereof. If there is no reserve fund sufficient to cover such balance in whole or in part, the outstanding amount shall be charged against the capital account and the Bank cannot pay dividends until it can replenish the reserve fund to an amount of at least 20% of the original capital contributed.During the fourth quarter of 2014, $40.0 million was transferred to the legal surplus reserve. FirstBank's legal surplus reserve, included as part of retained earnings in the Corporation's statement of financial condition, amounted to $40.0 million as of March 31, 2015. There were no transfers to the legal surplus reserve during the quarter ended March 31, 2015.

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ALLOWANCE FOR LOAN AND LEASE LOSSES - Changes in Allowance for Loan and Lease Losses (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014	Dec. 31, 2013
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning balance	$ 222,395	$ 285,858
Charge-offs	(32,013)	(53,707)
Recoveries	2,712	2,712
Provision For Loan Lease And Other Losses	32,970	31,915
Ending balance	226,064	266,778
Balance at end of period	62,140	85,016	55,205	102,601
Ending balance: general allowance	163,924	181,762
Ending balance	9,485,372	9,566,785	9,262,436
Ending balance: impaired loans	954,981	879,388	945,407	919,112
Ending balance: purchased credit-impaired loans	181,114		102,604
Ending balance: loans with general allowance	8,349,277	8,684,014
Purchased Credit Impaired [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Ending balance: purchased credit-impaired loans	0	0
Ending balance: purchased credit-impaired loans	181,114	3,383
Residential Mortgage [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning balance	27,301	33,110
Charge-offs	(5,192)	(6,422)
Recoveries	98	69
Provision For Loan Lease And Other Losses	6,475	3,751
Ending balance	28,682	30,508
Balance at end of period	14,862	17,273
Ending balance: general allowance	13,820	13,235
Ending balance	3,331,620	2,548,101
Ending balance: impaired loans	429,526	419,308
Ending balance: loans with general allowance	2,724,493	2,128,793
Residential Mortgage [Member] | Purchased Credit Impaired [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Ending balance: purchased credit-impaired loans	0	0
Ending balance: purchased credit-impaired loans	177,601	0
Commercial Mortgage [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning balance	50,894	73,138
Charge-offs	(4,006)	(5,810)
Recoveries	276	35
Provision For Loan Lease And Other Losses	(2,137)	(851)
Ending balance	45,027	66,512
Balance at end of period	13,238	29,833
Ending balance: general allowance	31,789	36,679
Ending balance	1,649,263	1,846,016
Ending balance: impaired loans	224,365	219,860
Ending balance: loans with general allowance	1,421,619	1,626,156
Commercial Mortgage [Member] | Purchased Credit Impaired [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Ending balance: purchased credit-impaired loans	0	0
Ending balance: purchased credit-impaired loans	3,279	0
Commercial And Industrial Loans [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning balance	63,721	85,295
Charge-offs	(4,453)	(22,459)
Recoveries	558	663
Provision For Loan Lease And Other Losses	10,353	16,091
Ending balance	70,179	79,590
Balance at end of period	24,871	19,098
Ending balance: general allowance	45,308	60,492
Ending balance	2,442,867	2,947,837
Ending balance: impaired loans	226,656	151,653
Ending balance: loans with general allowance	2,216,211	2,796,184
Commercial And Industrial Loans [Member] | Purchased Credit Impaired [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Ending balance: purchased credit-impaired loans	0	0
Ending balance: purchased credit-impaired loans	0	0
Construction Loans [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning balance	12,822	35,814
Charge-offs	(605)	(970)
Recoveries	207	617
Provision For Loan Lease And Other Losses	1,215	(8,050)
Ending balance	13,639	27,411
Balance at end of period	3,381	15,154
Ending balance: general allowance	10,258	12,257
Ending balance	124,440	152,579
Ending balance: impaired loans	37,593	58,636
Ending balance: loans with general allowance	86,847	93,943
Construction Loans [Member] | Purchased Credit Impaired [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Ending balance: purchased credit-impaired loans	0	0
Ending balance: purchased credit-impaired loans	0	0
Consumer Loan [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning balance	67,657	58,501
Charge-offs	(17,757)	(18,046)
Recoveries	1,573	1,328
Provision For Loan Lease And Other Losses	17,064	20,974
Ending balance	68,537	62,757
Balance at end of period	5,788	3,658
Ending balance: general allowance	62,749	59,099
Ending balance	1,937,182	2,072,252
Ending balance: impaired loans	36,841	29,931
Ending balance: loans with general allowance	1,900,107	2,038,938
Consumer Loan [Member] | Purchased Credit Impaired [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Ending balance: purchased credit-impaired loans	0	0
Ending balance: purchased credit-impaired loans	$ 234	$ 3,383

XML

ADVANCES FROM THE FEDERAL HOME LOAN BANK (FHLB) (Tables)

3 Months Ended

Mar. 31, 2015

Summary of Advances from FHLB

The following is a summary of the advances from the FHLB:
			As of		As of
		March 31,		December 31,
		2015		2014
		(Dollars in thousands)
	Fixed-rate advances from FHLB, with a weighted-
	average interest rate of 1.17%	$	325,000	$	325,000

Advances from FHLB Mature

Advances from FHLB mature as follows:
		March 31,
		2015
		(In thousands)
	Over one year to three years	$	300,000
	Over three to four years		25,000
	Total	$	325,000

XML

OFFESTTING OF ASSETS AND LIABILITIES - Offsetting of financial assets and liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Offsetting [Abstract]
Gross amount recognized of derivative asset	$ 1	$ 6
Gross amount of derivatives assets offset	0	0
Net asset amount of assets presented in the Statement of Financial Condition	1	6
Obligation to return Financial instrument, derivatives assets	(1)	(6)
Obligation to return Cash Collateral, derivative assets	0	0
Net derivative asset amount not offset	0	0
Gross amount recognized of derivative liabilities	0	33
Gross amount of derivative liabilities offset	0	0
Net derivative liability amount offset presented	0	33
Right to claim Financial instrument, derivatives liabilities	0	(33)
Right to claim Cash Collateral, derivatives liabilities	0	0
Net derivatives liability amount not offset	0	0
Gross amount recognized of repurchase agreements	600,000	600,000
Gross amount of repurchase agreements offset	0	0
Net repurchase agreements amount offset presented	600,000	600,000
Right to claim Financial instrument, repurchase agreements	(600,000)	(600,000)
Right to claim Cash Collateral, repurchase agreements	0	0
Net repurchase agreements amount not offset	0	0
Gross amount recognized of liabilities	600,000	600,033
Gross amount of liabilties offset	0	0
Net liabilities amount offset presented	600,000	600,033
Right to claim Financial instrument, liabilities	(600,000)	(600,033)
Right to claim Cash Collateral, liabilties	0	0
Net liability amount not offset	$ 0	$ 0

XML

LOANS HELD FOR SALE (Tables)

3 Months Ended

Mar. 31, 2015

Portfolio of Loans Held for Sale

		As of		As of
	March 31, 2015		December 31, 2014
	(In thousands)
Residential mortgage loans	$	27,135	$	22,315
Construction loans		47,802		47,802
Commercial mortgage loans		6,786		6,839
Total	$	81,723	$	76,956

XML

GOODWILL AND OTHER INTANGIBLES - Gross Amount and Accumulated Amortization of Other Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014	Jun. 30, 2012
Finite Lived Intangible Assets [Line Items]
Gross amount				$ 24,500
Finite lived Intangible Assets Acquired 1	5,820	0
Goodwill And Intangible Assets Disclosure [Abstract]
Finite Lived Intangible Assets Amortization Expense Next Twelve Months	3,813
Finite Lived Intangible Assets Amortization Expense Year Two	4,737
Finite Lived Intangible Assets Amortization Expense Year Three	4,197
Finite Lived Intangible Assets Amortization Expense Year Four	3,293
Core Deposits [Member]
Finite Lived Intangible Assets [Line Items]
Gross amount	45,844		45,844
Accumulated amortization	(40,750)		(40,424)
Net carrying amount	10,914		5,420
Remaining amortization period	9 years 10 months 24 days		9 years 2 months 12 days
Purchased Credit Card Relationship Intangible [Member]
Finite Lived Intangible Assets [Line Items]
Gross amount	24,465		24,465
Accumulated amortization	(8,843)		(8,076)
Net carrying amount	$ 15,622		$ 16,389
Remaining amortization period	6 years 8 months 12 days		7 years 9 months 18 days

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Net income (loss)	$ 25,646	$ 17,083
Available-for-sale debt securities on which an other-than-temporary impairment has been recognized:
Subsequent unrealized gain on debt securities on which an other-than-temporary impairment has been recognized	689	913
Reclassification adjustment for other-than-temporary impairment on debt securities included in net income	156	0
All other unrealized gains and losses on available-for-sale securities:
All other unrealized holding gains arising during the period	6,295	21,626
Income tax expense related to items of other comprehensive income	0	0
Other comprehensive income (loss) for the period, net of tax	7,140	22,539
Total comprehensive income (loss)	$ 32,786	$ 39,622

XML

LOAN PORTFOLIO - Selected Information on TDRs Includes Recorded Investment by Loan Class and Modification Type (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015		Dec. 31, 2014		Mar. 31, 2014
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	$ 705,123	[1]	$ 694,453	[2]	$ 622,320
Interest Rate Below Market [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	63,613	[1]	68,455	[2]
Maturity of Term Extension [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	97,567	[1]	100,662	[2]
Combination of reduction in interest rate and extension of maturity [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	416,663	[1]	415,187	[2]
Forgiveness of principal and/or interest [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	3,436	[1]	3,517	[2]
Other [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	123,844	[1],[3]	106,632	[2],[4]
Non Fha Va Residential Mortgage Loans [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	354,094		349,775
Non Fha Va Residential Mortgage Loans [Member] | Interest Rate Below Market [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	26,039		24,850
Non Fha Va Residential Mortgage Loans [Member] | Maturity of Term Extension [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	5,206		5,859
Non Fha Va Residential Mortgage Loans [Member] | Combination of reduction in interest rate and extension of maturity [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	281,824		283,317
Non Fha Va Residential Mortgage Loans [Member] | Forgiveness of principal and/or interest [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	0		0
Non Fha Va Residential Mortgage Loans [Member] | Other [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	41,025	[3]	35,749	[4]
Commercial Mortgage Loans [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	136,780		127,766
Commercial Mortgage Loans [Member] | Interest Rate Below Market [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	26,952		29,881
Commercial Mortgage Loans [Member] | Maturity of Term Extension [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	12,685		12,737
Commercial Mortgage Loans [Member] | Combination of reduction in interest rate and extension of maturity [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	73,956		72,493
Commercial Mortgage Loans [Member] | Forgiveness of principal and/or interest [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	0		0
Commercial Mortgage Loans [Member] | Other [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	23,187	[3]	12,655	[4]
Commercial And Industrial Loan [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	166,736		171,926
Commercial And Industrial Loan [Member] | Interest Rate Below Market [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	4,431		7,533
Commercial And Industrial Loan [Member] | Maturity of Term Extension [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	78,171		80,642
Commercial And Industrial Loan [Member] | Combination of reduction in interest rate and extension of maturity [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	30,830		31,553
Commercial And Industrial Loan [Member] | Forgiveness of principal and/or interest [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	3,057		3,074
Commercial And Industrial Loan [Member] | Other [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	50,247	[3]	49,124	[4]
Consumer Auto Loans [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	17,547		16,991
Consumer Auto Loans [Member] | Interest Rate Below Market [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	0		0
Consumer Auto Loans [Member] | Maturity of Term Extension [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	324		380
Consumer Auto Loans [Member] | Combination of reduction in interest rate and extension of maturity [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	10,736		10,363
Consumer Auto Loans [Member] | Forgiveness of principal and/or interest [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	0		0
Consumer Auto Loans [Member] | Other [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	6,487	[3]	6,248	[4]
Finance Leases [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	2,053		2,181
Finance Leases [Member] | Interest Rate Below Market [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	0		0
Finance Leases [Member] | Maturity of Term Extension [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	285		376
Finance Leases [Member] | Combination of reduction in interest rate and extension of maturity [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	1,768		1,805
Finance Leases [Member] | Forgiveness of principal and/or interest [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	0		0
Finance Leases [Member] | Other [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	0	[3]	0	[4]
Other Consumer Loans [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	15,376		13,307
Other Consumer Loans [Member] | Interest Rate Below Market [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	37		37
Other Consumer Loans [Member] | Maturity of Term Extension [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	317		129
Other Consumer Loans [Member] | Combination of reduction in interest rate and extension of maturity [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	12,774		10,812
Other Consumer Loans [Member] | Forgiveness of principal and/or interest [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	379		443
Other Consumer Loans [Member] | Other [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	1,869	[3]	1,886	[4]
Commercial Construction [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	0		0
Commercial Construction [Member] | Interest Rate Below Market [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	0		0
Commercial Construction [Member] | Maturity of Term Extension [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	0		0
Commercial Construction [Member] | Combination of reduction in interest rate and extension of maturity [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	0		0
Commercial Construction [Member] | Forgiveness of principal and/or interest [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	0		0
Commercial Construction [Member] | Other [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	0	[3]	0	[4]
Residential Construction [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	10,060		10,037
Residential Construction [Member] | Interest Rate Below Market [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	6,154		6,154
Residential Construction [Member] | Maturity of Term Extension [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	378		337
Residential Construction [Member] | Combination of reduction in interest rate and extension of maturity [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	3,095		3,112
Residential Construction [Member] | Forgiveness of principal and/or interest [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	0		0
Residential Construction [Member] | Other [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	433	[3]	434	[4]
Land Construction [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	2,477		2,470
Land Construction [Member] | Interest Rate Below Market [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	0		0
Land Construction [Member] | Maturity of Term Extension [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	201		202
Land Construction [Member] | Combination of reduction in interest rate and extension of maturity [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	1,680		1,732
Land Construction [Member] | Forgiveness of principal and/or interest [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	0		0
Land Construction [Member] | Other [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Modifications, Recorded Investment	$ 596	[3]	$ 536	[4]

[1] Excludes TDRs held for sale amounting to $45.7 million as of March 31, 2015.

[2] Excludes TDRs held for sale amounting to $45.7 million as of December 31, 2014.

[3] Other concessions granted by the Corporation include deferral of principal and/or interest payments for a period longer than what would be considered insignificant, payment plans under judicial stipulation, or a combination of the concessions listed in the table.

[4] Other concessions granted by the Corporation include deferral of principal and/or interest payments for a period longer than what would be considered insignificant, payment plans under judicial stipulation or a combination of the concessions listed in the table.

XML

BUSINESS COMBINATION

3 Months Ended

Mar. 31, 2015

Business Combination Description [Abstract]

Business Combination Disclosure [Text Block]

NOTE 2 – BUSINESS COMBINATION

OnFebruary27, 2015, FirstBank acquired 10 Puerto Rico branches of Doral Bank, assumed $522.7million in deposits related to such branches, acquired approximately $324.8 million in principal balance of loans, primarily residential mortgage loans, acquired $5.5 million of property, plant and equipment and received $217.7million of cash, through an alliance with BancoPopular of Puerto Rico (“Popular”), who was the successful lead bidder with the FDIC on the failed Doral Bank,as well as other co-bidders (the “Doral Bank Transaction”). This transaction solidified FirstBank as the second largest bank in Puerto Rico, enhanced FirstBank's presence in geographical areas in Puerto Rico with growth potential for deposits and mortgage originations, two of the main business strategies of the institution, and provides a stable source of low-cost deposits that are expected to supportand enhance future growth activities.

Under the FDIC's bidding format, Popular was the lead bidder and party to the purchase and assumption agreement with the FDIC covering all assets and deposits to be acquired by Popular and its alliance co-bidders. Popular entered into back to back purchase assumption agreements with the alliance co-bidders, includingFirstBank, for the transferred assets and deposits. There is no loss-share arrangement with the FDIC related to the acquired assets.

The Corporation accounted for this transaction as a business combination. The following table identifies the fair value of assets acquired and liabilities assumed from Doral Bank on February 27, 2015:
	Asset/Liabilities
	(at Fair Value)
	(In thousands)
ASSETS
Cash	$	217,659
Loans		311,410
Premises and equipment, net		5,450
Core Deposit Intangible		5,820
Other assets
Total assets acquired		540,339
LIABILITIES
Deposits		523,517
Other liabilities		3,379
Net assets - Bargain purchase gain	$	13,443

The application of the acquisition-method of accounting resulted in a bargain purchase gain of $13.4 million, which is included in non-interest income in the Corporation's consolidated statement of income for the quarter ended March 31, 2015, and a core deposit intangible of $5.8 million. The net after-tax gain of $8.2million represents the excess of the estimated fair value of the assets acquired (including cash payments received from the FDIC) over the estimated fair value of the liabilities assumed and is influenced significantly by the FDIC-assisted transaction process.

The following is a description of the methods used to determine the fair values of significant assets and liabilities presented above:

Cash and due from banks – The carrying amount of these assets is a reasonable estimate of fair value based on the short-term nature of these assets. This balance primarily represents the cash settlement received from Popular for the net equity received, assets discount bid and other customary closing adjustments.

Loans – Fair values for loans were based on a discounted cash flow methodology that uses market-driven assumptions such as prepayment rate, default rate, and loss severity on a loan level basis.  The forecasted cash flows are then discounted by yields observed in sales of similar portfolios in Puerto Rico and the continental U.S.

The Corporation evaluated the residential mortgage loans acquired and determined that $227.9 million are non-credit impaired purchased loans and have been accounted in accordance with the provisions of FASB ASC Topic 310-20, Nonrefundable Fees and Other Costs, and were recorded with a premium of $1.3 million. The remaining approximately $93.3 million of residential mortgage loans excluded were considered purchased credit impaired loans within the provisions of FASB ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, and were recorded with a $13.4million discount. These purchased credit impaired loans will recognize interest income through accretion of the difference between the fair value of the loans and the expected cash flows.

Core deposit intangible – This intangible asset represents the value of the relationships that Doral Bank had with its deposit customers. The fair value of this intangible asset was estimated based on a discounted cash flow methodology that gave appropriate consideration to expected customer attrition rates, cost of the deposit base, and the net maintenance cost attributable to customer deposits. The Corporation recorded $5.8 million of core deposit intangible.

Deposits – The fair values used for the demand and savings deposits that comprise the transaction accounts acquired, by definition, equal the amount payable on demand at the acquisition date.  The fair value adjustment of $0.8 million was applied for time deposits because the estimated weighted average interest rate ofthe assumed certificates of deposits were estimated to be above the current market rates.

ASC Topic 805 requires the measurement of all recognized assets acquired and liabilities assumed in a business combination at their acquisition-date fair values. Accordingly, the Corporation initially recorded amounts for the fair values of the assets acquired and liabilities assumed based on the best information available at the acquisition date. The Corporation may retrospectively adjust these amounts to reflect new information obtained during the measurement period (not to exceed 12 months) about facts and circumstances that existed as of the acquisition date that, if known, would have affected the acquisition-date fair value measurements. Any retrospective adjustments to acquisition date fair values will affect the bargain purchase gain recognized. During the first quarter of 2015, the Corporation incurred $3.9 million of expenses related to this transaction, primarily included in professional fees expenses in the consolidated statement of income, of which $2.1 million represents acquisition and conversion costs that are considered non-recurring in nature.

The Corporation's operating results for the quarter ended March 31, 2015, include the operating results of the acquired assets and assumed liabilities subsequent to the acquisition date. The Corporation also considered the pro forma requirements of ASC 805 and deemed it not necessary to provide pro forma financial statements as required under the standard for the Doral Bank transaction as is was not material to the Corporation.

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EARNINGS PER COMMON SHARE - Calculations of Earnings Per Common Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Net Income (Loss):
Net income (loss)	$ 25,646	$ 17,083
Excess of carrying amount of preferred stock exchanged over fair value of new common stock	0	379
Net income (loss) attributable to common stockholders	25,646	17,462
Weighted-Average Shares:
Basic weighted-average common shares outstanding	210,686	205,732
Average potential common shares	2,060	1,144
Diluted weighted-average number of common shares outstanding	212,746	206,876
Income (loss) per common share:
Basic	$ 0.12	$ 0.08
Diluted	$ 0.12	$ 0.08
Retained Earnings [Member]
Net Income (Loss):
Net income (loss)	25,646	17,083
Excess of carrying amount of preferred stock exchanged over fair value of new common stock	$ 0	$ 379

XML

LOAN PORTFOLIO - Activity for Specific Reserve (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Specific Reserve:
Balance at beginning of period	$ 55,205	$ 102,601
Provision for loan losses	18,650	14,454
Charge-offs	(11,715)	(32,039)
Balance at end of period	$ 62,140	$ 85,016

XML

GOODWILL AND OTHER INTANGIBLES - Additional Information (Detail) (USD $)	3 Months Ended		12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014	Jun. 30, 2012
Finite Lived Intangible Assets [Line Items]
Goodwill	$ 28,100,000		$ 28,100,000
Purchase credit card relationship intangible amount				24,500,000
Amortization expense	1,093,000	1,235,000
Purchased Credit Card Relationship Intangible [Member]
Finite Lived Intangible Assets [Line Items]
Purchase credit card relationship intangible amount	24,465,000		24,465,000
Amortization period of purchased credit card relationship intangible	6 years 8 months 12 days		7 years 9 months 18 days
Amortization expense	800,000	800,000
Core Deposits [Member]
Finite Lived Intangible Assets [Line Items]
Purchase credit card relationship intangible amount	45,844,000		45,844,000
Amortization period of purchased credit card relationship intangible	9 years 10 months 24 days		9 years 2 months 12 days
Amortization expense	$ 300,000	$ 400,000

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OTHER EQUITY SECURITIES - Additional Information (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Schedule Of Other Assets [Line Items]
Capital stock par value	$ 100
Book value of investment in FHLB stock	$ 25.5		$ 25.5
Dividend income from FHLB stock	0.3	0.3
Carrying value of other equity security	$ 0.7	$ 0.3

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INCOME TAXES

3 Months Ended

Mar. 31, 2015

INCOME TAXES

NOTE 20 - INCOME TAXES

Income tax expense includes Puerto Rico and USVI income taxes as well as applicable United States (“U.S.”)federal and state taxes. The Corporation is subject to Puerto Rico income tax on its income from all sources. As a Puerto Rico corporation, First Bancorp. is treated as a foreign corporation for U.S. and USVI income tax purposes and is generally subject to U.S. and USVI income tax only on its income from sources within the U.S. and USVI or income effectively connected with the conduct of a trade or business in those regions. Any such tax paid is also creditable against the Corporation's Puerto Rico tax liability, subject to certain conditions and limitations.

Under the Puerto Rico Internal Revenue Code of 2011, as amended (the “2011 PR Code”), the Corporation and its subsidiaries are treated as separate taxable entities and are not entitled to file consolidated tax returns and,thus, the Corporation is not able to utilize losses from one subsidiary to offset gains in another subsidiary. Accordingly, in order to obtain a tax benefit from a net operating loss(“NOL”),a particular subsidiary must be able to demonstrate sufficient taxable income within the applicable NOL carry forward period. The 2011 PR Code provides a dividend received deduction of 100% on dividends received from “controlled” subsidiaries subject to taxation in Puerto Rico and 85% on dividends received from other taxable domestic corporations.

The Corporation has maintained an effective tax rate lower than the maximum statutory rate mainly by investing in government obligations and mortgage-backed securities exempt from U.S. and Puerto Rico income taxes and by doing business through an International Banking Entity (“IBE”) unit of the Bank, and through the Bank's subsidiary, FirstBank Overseas Corporation,whose interest income and gain on sales is exempt from Puerto Rico and U.S. income taxation. The IBE and FirstBank Overseas Corporation were created under the International Banking Entity Act of Puerto Rico, which provides for total Puerto Rico tax exemption on net income derived by IBEs operating in Puerto Rico on the specific activities identified in the IBE Act. An IBEthat operates as a unit of a bank pays income taxes at the corporate standard rates to the extent that the IBE's net income exceeds 20% of the bank's total net taxable income.

In 2010, the Corporation established a valuation allowance for substantially all of the deferred tax assets of its banking subsidiary, FirstBank, primarily due to significant operational losses driven by charges to the provision for loan losses, a three-year cumulative loss position as of the end of the year 2010, and uncertainty regarding the amount of future taxable income that the Bank could forecast. As of December 31, 2014, based upon the assessment of all positive and negative evidence, management concluded that it was more likely than not that FirstBank will generate sufficient taxable income within the applicable NOL carry-forward periods to realize $313.0 million of its deferred tax assets and, therefore, reversed $302.9 million of the valuation allowance. As of March 31, 2015, the deferred tax assets, net of a valuation allowance of $198.6million, amounted to $310.9million and management concluded, based upon the assessment of all positive and negative evidence, that it is more likely than not that the Corporation will generate sufficient taxable income within the applicable NOL carry-forward periods to realize such amount.

The Corporation recorded income tax expense of $8.0 million in the first quarter of 2015 compared to $0.9 million for the quarter ended March 31, 2014. For the quarter ended March 31, 2015, the Corporation calculated the provision for income taxes by applying the estimated annual effective tax rate for the full fiscal year to ordinary income or loss. The Corporation had historically calculated the provision for income taxes for interim periods by using a discrete effective tax rate method since it had a full valuation allowance on most of its deferred tax assets. As a result of the partial valuation allowance release during the fourth quarter of 2014, management will use the annual estimated effective tax rate as required by ASC 740 for interim period reporting. In the computation of the consolidated worldwide annual estimated effective tax rate, the ASC 740-270 requires the exclusion of legal entities with pre-tax losses from which a tax benefit cannot be recognized. The consolidated worldwide estimated effective tax rate excluding entities with pre-tax losses from which a tax benefit cannot be recognized is 22%. The effective tax rate including all entities is 24%.

As of March 31, 2015, the Corporation did not have Unrecognized Tax Benefits (“UTBs”)recorded on its books.During 2014, the Corporation reached final settlement with the IRS in connection with the 2007-2009 examination periods. As a result of a final settlement with the IRS Appeals office during 2014, the Corporation released a portion of its reserve for uncertain tax positions, resulting in a tax benefit of $1.8 million, and paid $2.5 million to settle the tax liability resulting from the audit.

The Corporation's liability for income taxes includes the estimate of interest not yet paid related to the settlement reached with the IRS to close the tax years 2007 through 2009. The Corporation classifies all interest and penalties, if any, related to tax uncertainties as income tax expense. As of March 31, 2015, the Corporation's accrued interest that relates to the IRS examination amounted to $1.3 million and there was no need to accrue for the payment of penalties. Audit periods remain open for review until the statute of limitations has passed. The statue of limitations under the 2011 PR code is 4 years; the statutes of limitations for Virgin Islands and U.S. income tax purposes are each three years after a tax return is due or filed, whichever is later. The completion of an audit by the taxing authorities or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Corporation's liability for income taxes. Any such adjustment could be material to the results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. For Virgin Islands and U.S. income tax purposes, all tax years subsequent to 2010 remain open to examination. The 2012 tax year U.S. federal tax return is currently under examination by the IRS. For Puerto Rico purposes, all tax years subsequent to 2010 remain open to examination.

During 2013, the Puerto Rico Government approved Act No. 40, which imposed a national gross receipts tax. The national gross receipts tax for financial institutions was computed on the basis of 1% of gross income, net of allowable exclusions. Subject to certain limitations, a financial institution was able to claim a credit of 0.5% of its gross income, against its regular income tax or the alternative minimum tax (“AMT”). However, on December 22, 2014, the Governor of Puerto Rico signed Act No. 238, which amended the 2011 PR Code. Act No. 238 clarifies that the national gross receipts tax will not be applicable to taxable years starting after December 31, 2014. Accordingly, during this quarter, the Corporation did not record national gross receipts tax expense. In March 31, 2014, a $1.5 million gross receipt tax expense was included as part of “Taxes, other than income taxes” in the consolidated statement of income and a $0.7 million benefit related to this credit was recorded as a reduction to the provision for income taxes.

In February 2015, the Governor of Puerto Rico announced a proposal for a new tax code that would, among other things, replace the current 7% sales and use tax with a 16% value-added tax, while lowering income taxes. Legislative changes in tax laws could adversely impact our results of operations. On April 30, 2015, the legislature voted against the new tax code. New proposals or amendments to the tax code have not yet been disclosed.

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DEPOSITS - Components of Interest Expense on Deposits (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Deposits [Line Items]
Interest expense on deposits	$ 16,359	$ 18,514
Amortization of broker placement fees	1,335	1,785
Interest expense on deposits	$ 17,694	$ 20,299

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STOCKHOLDERS' EQUITY - Exchange offer with respect to Series A through E preferred stock (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2015	Dec. 31, 2014
Class Of Stock [Line Items]
Liquidation value per share		25
Preferred stock, shares outstanding		1,444,146	1,444,146
Shares Of Preferred Stock Exchanged	249,477
Preferred Stock Value		36,104	$ 36,104
Conversion Of Stock Shares Issued1	1,075,283
Series A Preferred Stock [Member]
Class Of Stock [Line Items]
Preferred stock dividend rate percentage		7.125%
Series B Preferred Stock [Member]
Class Of Stock [Line Items]
Preferred stock dividend rate percentage		8.35%
Series C Preferred Stock [Member]
Class Of Stock [Line Items]
Preferred stock dividend rate percentage		7.40%
Series D Preferred Stock [Member]
Class Of Stock [Line Items]
Preferred stock dividend rate percentage		7.25%
Series E Preferred Stock [Member]
Class Of Stock [Line Items]
Preferred stock dividend rate percentage		7.00%

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ADVANCES FROM THE FEDERAL HOME LOAN BANK (FHLB) - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2015
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Credit facility based on collateral pledged	$ 615.4

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LOAN PORTFOLIO - Corporation's Aging of Loans Held for Investment Portfolio (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015		Dec. 31, 2014		Mar. 31, 2014
Accounts Notes And Loans Receivable [Line Items]
30-59 Days Past Due	$ 120,984		$ 118,154
60-89 Days, Past Due	128,454		139,659
90 days or more, Past Due	725,665	[1]	671,122	[2]
Total Past Due	975,103		928,935
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Carrying Amount Net	181,114		102,604
Financing Receivable, Current	8,329,155		8,230,897
Loans held for investment	9,485,372		9,262,436		9,566,785
90 days past due and still accruing	162,121	[3]	147,226	[4]
Fha Va And Other Government Guaranteed Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
30-59 Days Past Due	0	[3],[5],[6]	0	[4],[7]
60-89 Days, Past Due	8,200	[3],[5],[6]	9,733	[4],[7]
90 days or more, Past Due	96,086	[1],[3],[5],[6]	81,055	[4],[7]
Total Past Due	104,286	[3],[5],[6]	90,788	[4],[7]
Financing Receivable, Current	51,376	[3],[5],[6]	62,782	[4],[7]
Loans held for investment	155,662	[3],[5],[6]	153,570	[4],[7]
90 days past due and still accruing	96,086	[3],[5],[6]	81,055	[4],[7]
Residential Mortgage [Member]
Accounts Notes And Loans Receivable [Line Items]
30-59 Days Past Due	0	[5]	0	[8]
60-89 Days, Past Due	88,209	[5]	78,336	[8]
90 days or more, Past Due	191,014	[1],[5]	199,078	[2],[8]
Total Past Due	279,223	[5]	277,414	[8]
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Carrying Amount Net	177,601	[5]	98,494	[8]
Financing Receivable, Current	2,719,134	[5]	2,481,709	[8]
Loans held for investment	3,175,958	[5]	2,857,617	[8]
90 days past due and still accruing	18,431	[3],[5]	18,371	[4],[8]
Commercial And Industrial [Member]
Accounts Notes And Loans Receivable [Line Items]
30-59 Days Past Due	22,933		22,217
60-89 Days, Past Due	3,193		7,445
90 days or more, Past Due	207,063	[1]	143,928	[2]
Total Past Due	233,189		173,590
Financing Receivable, Current	2,209,678		2,305,847
Loans held for investment	2,442,867		2,479,437
90 days past due and still accruing	20,563	[3]	21,381	[4]
Commercial Mortgage Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
30-59 Days Past Due	0	[5]	0	[8]
60-89 Days, Past Due	1,564	[5]	15,482	[8]
90 days or more, Past Due	165,778	[1],[5]	171,281	[2],[8]
Total Past Due	167,342	[5]	186,763	[8]
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Carrying Amount Net	3,279	[5]	3,393	[8]
Financing Receivable, Current	1,478,642	[5]	1,475,631	[8]
Loans held for investment	1,649,263	[5]	1,665,787	[8]
90 days past due and still accruing	23,393	[3],[5]	22,808	[4],[8]
Auto loans [Member]
Accounts Notes And Loans Receivable [Line Items]
30-59 Days Past Due	76,721		77,385
60-89 Days, Past Due	18,548		19,665
90 days or more, Past Due	19,043	[1]	22,276	[2]
Total Past Due	114,312		119,326
Financing Receivable, Current	914,058		941,456
Loans held for investment	1,028,370		1,060,782
90 days past due and still accruing	0	[3]	0	[4]
Finance Leases [Member]
Accounts Notes And Loans Receivable [Line Items]
30-59 Days Past Due	10,975		8,751
60-89 Days, Past Due	2,893		2,734
90 days or more, Past Due	2,979	[1]	5,245	[2]
Total Past Due	16,847		16,730
Financing Receivable, Current	213,336		215,396
Loans held for investment	230,183		232,126
90 days past due and still accruing	0	[3]	0	[4]
Consumer Loan [Member]
Accounts Notes And Loans Receivable [Line Items]
30-59 Days Past Due	10,355		9,801
60-89 Days, Past Due	5,464		6,054
90 days or more, Past Due	16,339	[1]	18,671	[2]
Total Past Due	32,158		34,526
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Carrying Amount Net	234		717
Financing Receivable, Current	646,237		654,394
Loans held for investment	678,629		689,637
90 days past due and still accruing	3,448	[3]	3,377	[4]
Commercial Construction [Member]
Accounts Notes And Loans Receivable [Line Items]
30-59 Days Past Due	0		0
60-89 Days, Past Due	0		0
90 days or more, Past Due	0	[1]	0	[2]
Total Past Due	0		0
Financing Receivable, Current	27,456		24,562
Loans held for investment	27,456		24,562
90 days past due and still accruing	0	[3]	0	[4]
Residential Construction [Member]
Accounts Notes And Loans Receivable [Line Items]
30-59 Days Past Due	0	[5]	0	[8]
60-89 Days, Past Due	0	[5]	0	[8]
90 days or more, Past Due	13,072	[1],[5]	14,324	[2],[8]
Total Past Due	13,072	[5]	14,324	[8]
Financing Receivable, Current	29,722	[5]	28,673	[8]
Loans held for investment	42,794	[5]	42,997	[8]
90 days past due and still accruing	0	[3],[5]	0	[4],[8]
Land Construction [Member]
Accounts Notes And Loans Receivable [Line Items]
30-59 Days Past Due	0	[5]	0	[8]
60-89 Days, Past Due	383	[5]	210	[8]
90 days or more, Past Due	14,291	[1],[5]	15,264	[2],[8]
Total Past Due	14,674	[5]	15,474	[8]
Financing Receivable, Current	39,516	[5]	40,447	[8]
Loans held for investment	54,190	[5]	55,921	[8]
90 days past due and still accruing	$ 200	[3],[5]	$ 234	[4],[8]

[1] Includes non-performing loans and accruing loans which are contractually delinquent 90 days or more (i.e., FHA/VA guaranteed loans and credit cards). Credit card loans continue to accrue finance charges fees until charged-off at 180 days.

[2] Includes non-performing loans and accruing loans which are contractually delinquent 90 days or more (i.e. FHA/VA guaranteed loans and credit cards). Credit card loans continue to accrue finance charges and fees until charged-off at 180 days.

[3] It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as past-due loans 90 days and still accruing as opposed to non-performing loans since the principal repayment is insured. These balances include $30.1 million of residential mortgage loans insured by the FHA or guaranteed by the VA, which are over 18 months delinquent, and are no longer accruing interest as of March 31, 2015.

[4] It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA or guaranteed by the VA as past-due loans 90 days and still accruing as opposed to non-performing loans since the principal repayment is insured. These balances include $40.4 million of residential mortgage loans insured by the FHA or guaranteed by the VA, which are over 18 months delinquent, and are no longer accruing interest as of December 31, 2014.

[5] According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage, commercial mortgage, and construction loans are considered past due when the borrower is in arrears two or more monthly payments. FHA/VA government guaranteed loans, other residential mortgage loans, commercial mortgage loans, land loans and construction-residential loans past due 30-59 days as of March 31, 2015 amounted to $12.2 million, $177.4 million, $38.4 million, $6.1 million, and $1.6 million, respectively.

[6] As of March 31, 2015, includes $26.2 million of defaulted loans collateralizing Government National Mortgage Association ("GNMA") securities for which the Corporation has an unconditional option (but not an obligation) to repurchase the defaulted loans.

[7] As of December 31, 2014, includes $9.3 million of defaulted loans collateralizing GNMA securities for which the Corporation has an unconditional option (but not an obligation) to repurchase the defaulted loans.

[8] According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage, commercial mortgage, and construction loans are considered past due when the borrower is in arrears two or more monthly payments. FHA/VA government guaranteed loans, other residential mortgage loans, commercial mortgage loans, land loans and construction-residential loans past due 30-59 days as of December 31, 2014 amounted to $14.0 million, $189.1 million, $20.8 million, $0.8 million and $1.0 million , respectively.

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INVESTMENT SECURITIES (Tables)

3 Months Ended

Mar. 31, 2015

Investment Securities Available for Sale

		March 31, 2015
		Amortized cost		Noncredit Loss Component of OTTI Recorded in OCI		Gross						Fair value		Weighted average yield%
								Unrealized
								gains			losses
		(Dollars in thousands)
U.S. Treasury securities:
	Due within one year	$	7,500	$	-	$	-		$	-		$	7,500	0.11
Obligations of U.S.
government-sponsored
agencies:
	After 1 to 5 years		278,054		-		318			1,918			276,454	1.25
	After 5 to 10 years		102,745		-		850			1,037			102,558	1.93
Puerto Rico government
obligations:
	After 1 to 5 years		39,836		-		-			16,922			22,914	4.49
	After 5 to 10 years		875		-		-			-			875	5.20
	After 10 years		24,821		-		1			7,148			17,674	5.37
United States and Puerto
Rico government
obligations:			453,831		-		1,169			27,025			427,975	1.90
Other (1)
Mortgage-backed securities:
FHLMC certificates:
	After 1 to 5 years		432		-		46			-			478	4.95
	After 10 years		304,628		-		2,733			560			306,801	2.17
			305,060		-		2,779			560			307,279	2.17
GNMA certificates:
	Due within one year		17		-		-			-			17	3.52
	After 1 to 5 years		55		-		2			-			57	3.93
	After 5 to 10 years		24,189		-		956			-			25,145	3.62
	After 10 years		316,122		-		21,942			-			338,064	3.85
			340,383		-		22,900			-			363,283	3.83
FNMA certificates:
	After 1 to 5 years		3,743		-		155			-			3,898	3.37
	After 5 to 10 years		16,924		-		646			31			17,539	2.90
	After 10 years		814,520		-		10,059			2,251			822,328	2.35
			835,187		-		10,860			2,282			843,765	2.37
Collateralized mortgage
	obligations issued or
	guaranteed by the FHLMC:
Other mortgage pass-through
trust certificates:
	Over 5 to 10 years		108		-		-			-			108	7.26
	After 10 years		43,012		11,296		-			-			31,716	2.15
			43,120		11,296		-			-			31,824	2.15
Total mortgage-backed
securities			1,523,750		11,296		36,539			2,842			1,546,151	2.65
Other (1)
	After 1 to 5 years		100		-		-			-			100	1.50
Total investment securities
	available for sale	$	1,977,681	$	11,296	$	37,708		$	29,867		$	1,974,226	2.48
(1)	Represents investment in a Community Investment Fund.

		December 31, 2014
		Amortized cost		Noncredit Loss Component of OTTI Recorded in OCI		Gross						Fair value		Weighted average yield%
								Unrealized
								gains			losses
		(Dollars in thousands)
U.S. Treasury securities:
	Due within one year	$	7,498	$	-	$	1		$	-		$	7,499	0.11
Obligations of U.S.
government-sponsored
agencies:
	After 1 to 5 years		260,889		-		42			4,219			256,712	1.22
	After 5 to 10 years		78,234		-		246			2,077			76,403	1.72
Puerto Rico government
obligations:
	After 1 to 5 years		39,827		-		-			12,419			27,408	4.49
	After 5 to 10 years		886		-		1			-			887	5.20
	After 10 years		20,498		-		-			5,571			14,927	5.83
United States and Puerto
Rico government
obligations:			407,832		-		290			24,286			383,836	1.86
Mortgage-backed securities:
FHLMC certificates:
	After 10 years		315,311		-		1,743			1,260			315,794	2.17
GNMA certificates:
	After 1 to 5 years		39		-		1			-			40	3.26
	After 5 to 10 years		17,108		-		501			-			17,609	3.65
	After 10 years		338,842		-		20,957			-			359,799	3.83
			355,989		-		21,459			-			377,448	3.83
FNMA certificates:
	After 1 to 5 years		4,160		-		181			-			4,341	3.40
	After 5 to 10 years		9,584		-		521			5			10,100	3.49
	After 10 years		837,597		-		7,756			4,854			840,499	2.36
			851,341		-		8,458			4,859			854,940	2.37
Collateralized mortgage
	obligations issued or
	guaranteed by the FHLMC:
Other mortgage pass-through
trust certificates:
	Over 5 to 10 years		111		-		1			-			112	7.27
	After 10 years		45,677		12,141		-			-			33,536	2.17
			45,788		12,141		1			-			33,648	2.17
Total mortgage-backed
	securities		1,568,429		12,141		31,661			6,119			1,581,830	2.66
Equity securities (without
Total investment securities
	available for sale	$	1,976,261	$	12,141	$	31,951		$	30,405		$	1,965,666	2.49

Available-for-Sale Investments' Fair Value and Gross Unrealized Losses

	As of March 31, 2015
	Less than 12 months				12 months or more				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
		(In thousands)
Debt securities:
Puerto Rico government obligations	$	-	$	-	$	36,314	$	24,070	$	36,314	$	24,070
U.S. government agencies obligations		4,999		-		261,252		2,955		266,251		2,955
Mortgage-backed securities:
FNMA		311,339		1,195		99,932		1,087		411,271		2,282
FHLMC		110,475		352		21,419		208		131,894		560
Collateralized mortgage
obligations issued or
Other mortgage pass-through
trust certificates		-		-		31,716		11,296		31,716		11,296
Corporate bonds
	$	426,813	$	1,547	$	450,633	$	39,616	$	877,446	$	41,163
	As of December 31, 2014
	Less than 12 months				12 months or more				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
		(In thousands)
Debt securities:
Puerto Rico government obligations	$	-	$	-	$	42,335	$	17,990	$	42,335	$	17,990
U.S. government agencies obligations		46,436		74		257,996		6,222		304,432		6,296
Mortgage-backed securities:
FNMA		2,038		5		541,642		4,854		543,680		4,859
FHLMC		-		-		135,277		1,260		135,277		1,260
Collateralized mortgage
obligations issued or
Other mortgage pass-through
trust certificates		-		-		33,536		12,141		33,536		12,141
	$	48,474	$	79	$	1,010,786	$	42,467	$	1,059,260	$	42,546

OTTI Losses on Available-for-Sale Debt Securities

	Private Label MBS
	Quarter ended March 31,
	2015		2014
(In thousands)
Total other-than-temporary impairment losses	$	-	$	-
Credit loss on debt securities for which an OTTI was not previously recognized
Portion of other-than-temporary impairment losses
previously recognized in OCI		(156)		-
Net impairment losses recognized in earnings	$	(156)	$	-

Roll-Forward of Credit Losses on Debt Securities Held by Corporation

The following table summarizes the roll-forward of credit losses on debt securities held by the Corporation for which a portion of an OTTI is recognized in OCI:
	Quarter ended March 31,
	2015		2014
(In thousands)
Credit losses at the beginning of the period	$	5,777	$	5,389
Additions:
Credit losses on debt securities for which an
OTTI was previously recognized		156		-
Ending balance of credit losses on debt securities held for
which a portion of an OTTI was recognized in OCI	$	5,933	$	5,389

Significant Assumptions in Valuation of Private Label MBS

	March 31, 2015		December 31, 2014
	Weighted		Weighted
	Average	Range	Average	Range
Discount rate	14.5%	14.5%	14.5%	14.5%
Prepayment rate	32%	18.04%-100.00%	32%	19.89%-100.00%
Projected Cumulative Loss Rate	7.3%	0.00%-80.00%	7.9%	0.64%-80.00%

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GOODWILL AND OTHER INTANGIBLES

3 Months Ended

Mar. 31, 2015

GOODWILL AND OTHER INTANGIBLES

NOTE 13 – GOODWILL AND OTHER INTANGIBLES

Goodwill as of March 31, 2015 and December 31, 2014 amounted to $28.1 million, recognized as part of “Other Assets” in the consolidated statement of financial condition. The Corporation conducted its annual evaluation of goodwill and intangibles during the fourth quarter of 2014. The Corporation's goodwill is related to the acquisition of Firstbank Florida in 2005.

The Corporation bypassed the qualitative assessment in 2014 and proceeded directly to perform the first step of the two-step goodwill impairment test. The Step 1 evaluation of goodwill allocated to the Florida reporting unit under both valuation approaches (market and discounted cash flow analysis) indicated that the fair value of the unit was above the carrying amount of its equity book value as of the valuation date (October 1);therefore, the completion of Step 2 was not required. Based on the analysis under both the market and discounted cash flow analysis, the estimated fair value of equity of the reporting unit exceeded the carrying amount of the entity, including goodwill at the evaluation date. There have been no events related to the Florida reporting unit that could indicate potential goodwill impairment since the date of the last evaluation; therefore, no goodwill impairment evaluation was performed during the first quarter of 2015. Goodwill and other indefinite life intangibles are reviewed at least annually for impairment.

In connection with the acquisition of the FirstBank-branded credit card loan portfolio, in the second quarter of 2012, the Corporation recognized a purchased credit card relationship intangible of $24.5 million, which is being amortized over the next 6.7years on an accelerated basis based on the estimated attrition rate of the purchased credit card accounts, which reflects the pattern in which the economic benefits of the intangible asset are consumed. These benefits are consumed as the revenue stream generated by the cardholder relationship is realized.

The core deposit intangible acquired in the February 2015 Doral Bank transaction amounted to $5.8 million.

The following table shows the gross amount and accumulated amortization of the Corporation’s intangible assets recognized as part of Other Assets in the consolidated statement of financial condition:
	As of		As of
	March 31,		December 31,
	2015		2014
(Dollars in thousands)
Core deposit intangible:
Gross amount, beginning of period	$	45,844	$	45,844
Addition as a result of acquisition		5,820		-
Accumulated amortization		(40,750)		(40,424)
Net carrying amount	$	10,914	$	5,420
Remaining amortization period		9.9 years		8.4 years
Purchased credit card relationship intangible:
Gross amount	$	24,465	$	24,465
Accumulated amortization		(8,843)		(8,076)
Net carrying amount	$	15,622	$	16,389
Remaining amortization period		6.7 years		6.9 years

For the quarters endedMarch 31, 2015and 2014, the amortization expense of core deposit intangibles amounted to $0.3million and $0.4million, respectively.For each of the quarters endedMarch 31, 2015 and 2014, the amortization expense of the purchased credit card relationship intangible amounted to $0.8million.

	The estimated aggregate amortization expense related to these intangible assets for future periods is as follows:
			Amount
			(In thousands)
2015		$	3,813
2016			4,737
2017			4,197
2018			3,293

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Notional Amounts of All Derivative Instruments (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Derivative [Line Items]
Notional amount of derivatives	$ 111,058	$ 98,704
Interest Rate Swap [Member]
Derivative [Line Items]
Notional amount of derivatives	5,440	5,440
Nondesignated [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Notional amount of derivatives	5,440	5,440
Nondesignated [Member] | Interest Rate Cap [Member] | Purchase
Derivative [Line Items]
Notional amount of derivatives	36,809	37,132
Nondesignated [Member] | Interest Rate Cap [Member] | Written
Derivative [Line Items]
Notional amount of derivatives	36,809	37,132
Nondesignated [Member] | Forward Contracts [Member]
Derivative [Line Items]
Notional amount of derivatives	$ 32,000	$ 19,000