First BanCorp (the "Corporation”) (NYSE:FBP) announced today that it is
planning to conduct an exchange offer under which it will be offering to
exchange newly issued shares of common stock for the issued and
outstanding shares of publicly held Series A through E Noncumulative
Perpetual Monthly Income Preferred Stock ("Preferred Stock"), subject to
any necessary proration. The exchange offer will be conducted to improve
its capital structure given the current economic conditions in the
markets in which it operates and the evolving regulatory environment.
Through the exchange offer First BanCorp seeks to improve its Tier 1
common equity ratio. The Corporation expects to file a registration
statement for the exchange offer after it files its annual report on
Form 10-K for fiscal year 2009 with the Securities and Exchange
Commission in March 2010. Completion of the exchange offer will be
subject to certain conditions, including the approval by stockholders of
the issuance of shares of the common stock pursuant to the exchange.
This does not constitute an offer of any securities for sale. Holders of
the Preferred Stock should read the registration statement for the
exchange offer when it is filed as it will contain important information
about the exchange offer. The registration statement will be available
for free on the Securities and Exchange Commission’s website, www.sec.gov,
and the prospectus included in the registration statement will be
available for free from the Corporation.
About First BanCorp
First BanCorp is the parent corporation of FirstBank Puerto Rico, a
state-chartered commercial bank with operations in Puerto Rico, the
Virgin Islands and Florida, and of FirstBank Insurance Agency. First
BanCorp and FirstBank Puerto Rico all operate within U.S. banking laws
and regulations. The Corporation operates a total of 186 branches,
stand-alone offices and in-branch service centers throughout Puerto
Rico, the U.S. and British Virgin Islands, and Florida. Among the
subsidiaries of FirstBank Puerto Rico are First Federal Finance Corp., a
small loan company; First Leasing and Rental Corp., a leasing company;
FirstBank Puerto Rico Securities, a broker-dealer subsidiary; First
Management of Puerto Rico; and FirstMortgage, Inc., a mortgage
origination company. In the U.S. Virgin Islands, FirstBank operates
First Insurance VI, an insurance agency, and First Express, a small loan
company. First BanCorp’s common and publicly-held preferred shares trade
on the New York Stock Exchange under the symbols FBP, FBPPrA, FBPPrB,
FBPPrC, FBPPrD and FBPPrE. Additional information about First BanCorp
may be found at www.firstbankpr.com.
Safe Harbor
This press release may contain "forward-looking statements” concerning
the Corporation’s future economic performance. The words or phrases
"expect,” "anticipate,” "look forward,” "should,” "believes” and similar
expressions are meant to identify "forward-looking statements” within
the meaning of Section 27A of the Private Securities Litigation Reform
Act of 1995, and are subject to the safe harbor created by such section.
The Corporation 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 ability to complete the exchange offer; the strength or
weakness of the real estate markets and of the consumer and commercial
credit sectors and its impact on the credit quality of the Corporation’s
loans and other assets, including the Corporation’s construction and
commercial real estate loan portfolios, which have contributed and may
continue to contribute, among other things, to the increase in the
levels of non-performing assets, charge-offs and the provision expense;
adverse changes in general economic conditions in the United States and
Puerto Rico, including the interest rate scenario, market liquidity,
housing absorption rates and real estate prices, and disruptions in the
U.S. capital markets, which may reduce interest margins, impact funding
sources and affect demand for all of the Corporation’s products and
services and the value of the Corporation’s assets, including the value
of derivative instruments used for protection from interest rate
fluctuations; 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 and the current fiscal
problems and budget deficit of the Puerto Rico government; uncertainty
about the legislative and other measures adopted by the Puerto Rico
government in response to its fiscal deficit situation and the impact of
such measures on several sectors of the Puerto Rico economy; uncertainty
about the effectiveness of the various actions undertaken to stimulate
the United States economy and stabilize the United States financial
markets, and the impact such actions may have on the Corporation's
business, financial condition and results of operations; changes in the
fiscal and monetary policies and regulations of the federal government,
including those determined by the Federal Reserve System, the Federal
Deposit Insurance Corporation, government-sponsored housing agencies and
local regulators agencies in Puerto Rico and the U.S. and British Virgin
Islands; risks of not being able to generate sufficient income to
realize the benefit of the deferred tax asset; risks of not being able
to recover the assets pledged to Lehman Brothers Special Financing,
Inc.; risks associated with the soundness of other financial
institutions; changes in the Corporation’s expenses associated with
acquisitions and dispositions; developments in technology; the impact of
Doral Financial Corporation’s financial condition on the repayment of
its outstanding secured loans to the Corporation; the Corporation’s
ability to issue brokered certificates of deposit and fund operations;
risks associated with downgrades in the credit ratings of the
Corporation’s securities; general competitive factors and industry
consolidation; risks associated with regulatory and legislative changes
for financial services companies in Puerto Rico, the United States, and
the U.S. and British Virgin Islands, which could affect the
Corporation’s financial performance and could cause the Corporation’s
actual results for future periods to differ materially from those
anticipated or projected; and the risk that the FDIC may further
increase the deposit insurance premium and/or require special
assessments to replenish its insurance fund, causing an increase in our
non-interest expenses. 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.
