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.