. ,. -—’ , The Yagrumo leaffeaturedin the 2000 Annual Report, symbolizesour beliefin conservationof naturalresourcesand our commitment to customers’banking needs.We have made a commitment to promotethe environ- mentalqualityof Puerto Ricoby supportingthe PuertoRicoConservationTrust. The Yagrumo treegrows abundantly,as our commitment to servecustomers. The flexibilityofitswood isa symbol ofour capabilityto adaptto changingneeds. Itsumbrella-likeleavesrepresentourdiversificationofservices.Itscapacity to bloom and givefruityearround,isa symbol ofinnovationand constant evolution.The harmony ofitsleaves,shows our determinationto ofFer w .>’” the bestquality,personalservice. At FirstBan Corpwe believein Ikeepinga perfectbalancewith our mission 2 t . as a leadingfinancialinstitutionand the well-beingofthe community. t i “inthousands (except for per share results) [-----... . _._--.=.-.=.....=............................. OPERQTING RESULTS: net interest income provision for loan losses other income other operating expenses income tax prow”sion net income per common share: net income - basic net income - diluted QUERfiGE COMMON SHQRES: WEIGHTED ........... -e. basic diluted 1,49 .......=. . 1,48 -.. +. ... —.-= -,.,...- :~=:.: +.,.. .,..,, ,-.=..:.- ~.––.. .= .=;. ---- .“.. .:.. —e; __.:..,, .:; 1998 1999 2000 returnon assets [’ii’ [[ 1998 1999 2000 per common market price share $190,773 45,718 50,032 113,050 14,761 67,276 2.22 2.21 . 26,943 27,145 .., -. .—=- ;-. ..- —. <’ [ -.. . -.. $185,733 ~ 47,960 32,862 101,272 \ ( ; ; 7,288 .! .. 62,075 ;’ 2.00 ~ 1.98 28,941 29,199 $1.74 $109E —:— —.~... ---- &- —= .... —. ..... — -—.. .T: [[ 199; -: .- _..- -., _---- ‘. ----- 1999 dilutedearnings: per common share . — . . .__. 2000 .— .. fiT VERH END: . assets loans allowanceforloanLosses investments deposi~ borrowings capital $5,919,657 3,498,198 76,919 2,233,216 3,345,984 2,069,484 434,461 $4,721,568 2,745,368 71,784 3,811,164 2,565,422 1,803,729 294,902 20,54 $185.7 $270,4 19.96 . returnon corn[mon equity 1996 2000 net interestincome —. cornrnnn stockholders’ equity l . 1. Aguada 2. Aguadilla 3. Isabela 16. Humacao 17. Caguas 18. AguasBuenas 4. San Sebastian 19. Cidra 5. Arecibo 6. Manati 20. Guaya,ma 21. Cayey 7. Vega Baja 22. Barranquitas 8. Dorado 9. Toa Baja 10. Bayam6n 11. Guaynabo 12. San Juan” 13. Caro[ina 23. Ponce 24. Utuado 25. Yauco 26. Cabo Rojo 27. Mayagtiez 28. SaintThomas M q $ q “ BRANCH MONEY EXPRESS 48 2E FIRST LEASING &RENTAL CORP G AUTO LOAN CENTER 14. RioGrande 29. SaintCroix.. r MORTGAGE LOAN CENTER 15. Fajardo . 1 1 4 86 I . l c . . ..- . . ..- , ... ---””’.-’ ~.“, ., .--, ,, // .’:/; 1 ,,, , >’. >’,”‘- ;. k, t >~” , ,. FirstBanCorp(theCorporation),incorporatedinPuertoRico,istheholdingcompany forFirstBank (theBank),thesecond largestlocal[yowned commercialbank in PuertoRico.FirstBanCorp,a FinancialHoldingCompany which operatesprimarilyin the PuertoRicobankingmarket,had totalassetsof $5.9 billionas of December 31,2000. The Corporationoffersa wide selection offinancialservicesto a growingnumber ofconsumerand commercialcustomers.Commercial loans,consumerloans,mortgageloansand investmentoperationsarethe most importantareas ofitsbusiness. The Corporationhas a $1.6 billionportfolioof commercialloans,commercial mortgages, constructionloansand otherrelatedcommercialproducts.Itscommercialclientsincludebusi- nessescoveringa wide rangeofeconomicactivities.FirstBanCorphas a $747 millionportfolio ofresidentialmortgages.The institutionalsohas $1.2billionin consumerloans,concentrated in auto loansand leases,personalloansand creditcards.Its$2.2billioninvestmentportfolio consistsmostly of U.S.government securitiesand mortgage backed securities.Through a strategicalliance”with PaineWebber, FirstBanCorp’offersbrokerageservicesin-itslargest branches.Approximately1,650professionalsand a sophisticatedcomputerizedsystemsupport the businessactivitiesofthe Corporation. Firstcharteredin 1948, FirstBanCorp was the firstsavingsbank establishedin PuertoRico, under the name of “FirstFederalSavingsand Loan Association”.It has been a stockholder owned institutionsince1987.In October,1994,itbecame a PuertoRicocharteredcommercial bank and assumed the name of “FirstBank”.EffectiveOctober1, 1998,theBank reorganized, making FirstBanka subsidiayofthe holdingcompany FirstBanCorp. FirstBanCorp,which isa well-capitalizedinstitutionunderfederalstandards,operates48 full servicebranchesincludingfourofficesinthe U.S.VirginIslands.The Corporationalsohas an auto loan center,a personalloan centerand fourmortgage loan centersin PuertoRico.A secondtiersubsidiayof FirstBanCorp,Money Express,operates26 smallloanofficesthrough- . ..— . ,’. . out PuertoRico.FirstBanCorp alsohas a second tiersubsidiaryknown as FirstLeasingand RentalCorp.which rentsand leasesmotor vehiclesfrom itssixofficesin PuertoRico. FirstBanCorp has distinguisheditselfby providinginnovativemarketingstrategiesand novel productsto attractclients.Besidesitsmain branchesand specializedlendingofFices,the Cor- porationhas offereda telephoneinformationservicecal[ed“Telebanco”since1983.Thiswas the firsttelebankingserviceofferedin PuertoRico.FirstBanCorp clientshave accessto an extensiveATM networkcoveringthe U.S.VirginIslands,the U.S.mainlandand the restofthe world.The Corporationwas alsothe firstin PuertoRicoto open on weekends and the firstto offerin-storebranchesto itsctients.FirstBanCorp was alsothe firstbankinginstitutionin PuertoRicowith a presenceon the internet.The Corporationoffersa wide menu of internet bankingservicesto itsclients. FirstBanCorpand itssubsidiariesaresubjectto supe~”sion,examinationand regulationby the FederalReserveBoard,the FederalDepositInsuranceCorporationand the Commissionerof FinancialInstitutionsof PuertoRico. FirstBanCorpiscommittedto providingthe most efficientand costeffectivebankingse~”ces possible.Management’sgoalisto be the premierfinancialinstitutionin PuertoRicoand a leaderin financialproductsand services.FirstBanCorp’sManagement works constantlyto exceedthe expectationsofitsstockholders,clientsand employees. . . i . . TO OUR STOCI+HOI-OERS: AngelAlvarez-P6rez,President On behalfof the Board of Directorsand staffof First BanCorpI am pleasedto submitourannualreportfor 2000, another record year.In 2000, FirstBanCorp earned$67.3 million,representing$2.22 per common share (basic)and $2.21 percommon share(diLuted). These earningscompare favorablywith 1999, when the Corporationearned $62.1 million,which came to $2.00 per common share(basic)or $1.98 percommon share(diluted).Netincome increased8.4°/0and diluted . earnings per share rose 11.6°/0 in 2000. These achievements continued our record of consistent . earningsgrowth. ,)+ ‘. GFICIUJTH9NCI DIUERSIFIC9T1CIN Profitsgrew inspiteof highinterestratesduring2000.The growthofthe loanportfolio,strict . controlsoveroperatingcosts,and increasesinotherincome allhelpedto make thisperformance possible. . Our businessgrew substantiallyin 2000.Totalassetsincreased250/. from $4.7 billionat the end of 1999 to $5.9billionon December 31,2000. Loansgrew by $753 million.Much ofthis growthtookplaceincommercial,constructionand commercialmortgagelending,whichexpanded by $431 million.Residentialmortgage loansaLsogrew $27 million.Thispatternof growth providesadditionaldiversificationin the loan portfolio,which used to be concentratedin consumer lending.Consumer loansand leaseswere 570/.of the loan portfolioat the end of 1997,comparedwith33°/0atDecember31,2000.We aremaintaininghighunderwritingstandards in alllendingareas. To supportfuturegrowth,First’BanCorpissued$75 mitlionofadditiona[preferredstockduring 2000. Thisissuancebringstota[preferredstockto $165 mil,lion,a[[owingthe Corporationto maintainstrongcapitalratiosas itcontinuesgrowing. Duringthe pastyearourefficiencyratioaveraged46.950/.,almostthesame asthevey favorab[e 46.330/.of1999. Otherincome increasedby $17.2mi[[ion,ofwhich $6.5mi[lionwere gainson the sa~eofinvestments.The remaining$10.7 mi[[ionrepresentedadditiona[servicesprovided by the Corporationinc[udinginvestmentbanking,servicesto commercia[clients,and others. We expectfeeincome to grow as we increasethe sophisticationof the servicesofferedwhi[e deliveringthem to a growingbase ofclients. IMPROUING SERUICETIICORPCIR9TECLIENTS During1999,we took severa[stepsto expand commerciallending,inc[udingthe recruitmentof seniorexecutivesfrom major money centerbanks with [oca[experienceand established relationships.In mid-1999 the Corporationacquiredthe PuertoRicooperationsof the Roya[ Bank of Canada.Thistransactiongave us a seasoned portfo[ioof comrnercia[loansand an establishedbranchin Hato Rey,the commercialand financia[centerofthe Island. ‘ In 2000 we bui[ton”theseachievements,expandingthe commercia[portfolioand improving corporateservices.The Corporationoffersan extensivemenu of servicesto corporatec[ients. We provideinternationallettersofcredit,a VISAcorporate.creditcard,directdepositofpayro[[, servicepointofsa[etransactions,and a se[ectionofcashmanagement accounts.Achievingthis levelofse~”ce has requiredcontinua[investment in new and more sophisticatedtechnology. We arecommitted to providingstateofthe’artse~icesto a[[of our corporatecustomers. REM91