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First BanCorp Announces Preliminary Results of Preferred Stock Exchange Offer

^{Published on 2010-08-25 06:05:38 - Market Wire}
 

SAN JUAN, Puerto Rico--([ BUSINESS WIRE ])--First BanCorp(the aCorporationa) (NYSE: FBP), [NYSE:FBPPrA], [NYSE:FBPPrB], [NYSE:FBPPrC], [NYSE:FBPPrD], [NYSE:FBPPrE], announced today the preliminary results as of 11:59 p.m., New York City time, August 24, 2010, of its offer to exchange (the aExchange Offera) up to 256,401,610 newly issued shares of its common stock, par value $0.10 per share (aCommon Stocka), for any and all of the issued and outstanding shares of Non-Cumulative Perpetual Monthly Income Preferred Stock, SeriesA through E (collectively, aPreferred Stocka). The offer has been extended to 9:30 a.m., New York City time, on August25, 2010. Final results of the Exchange Offer will be announced as soon as possible thereafter. The Relevant Price as defined in the preliminary prospectus dated August 25, 2010 was fixed on August 20, 2010 and is $1.18.

The Corporation announced that 3,145,436 shares of Series A Preferred Stock, 2,515,053 shares of Series B Preferred Stock, 3,666,254 shares of Series C Preferred Stock, 3,130,810 shares of Series D Preferred Stock, and 6,880,599 shares of Series E Preferred Stock have been validly tendered and not withdrawn. In total, approximately $483.5 million, or approximately 87.9%, of the liquidation preference of the Preferred Stock have been tendered. These tenders will result in the issuance of approximately 225.3 million new shares of First BanCorp Common Stock.

Aurelio Alemn, President and Chief Executive Officer of First BanCorp commented, aThe high participation rate of our preferred stockholders in the exchange of preferred stock for common stock would satisfy one of the substantive conditions of the agreement with the U.S. Treasury to convert the Fixed Rate Cumulative Mandatorily Convertible Preferred Stock, Series G, into shares of common stock. The successful exchange of Series A to E Preferred Stock into common stock and the approval of all proposals at yesterdaya™s special stockholdera™s meeting are important milestones for the Corporation which will enhance our ability to continue executing our capital plan.a

This press release is neither an offer to exchange nor a solicitation of an offer to sell Common Stock or Preferred Stock. The Exchange Offer is only being made pursuant to the Registration Statement, as amended (including the preliminary prospectus, the letter of transmittal and related offer documents), filed with the U.S. Securities and Exchange Commission (the aSECa) on August 25, 2010, which is available without charge on the SECa™s website site at [ www.sec.gov ] or can be obtained, without charge, upon written or oral request to: First BanCorp, Attention: Lawrence Odell, Secretary, P.O.Box9146, SanJuan, Puerto Rico, 00908-0146; telephone: (787)729-8109. The Registration Statement has not yet become effective. Investors should read the preliminary prospectus in the Registration Statement, and related documents, for more complete information about the Corporation and the Exchange Offer. Neither the Corporation, the dealer manager, the information agent, the exchange agent nor any other person is making any recommendation as to whether or not holders of the Preferred Stock should tender their shares of Preferred Stock for exchange in the exchange offer.

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 176 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; 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 BanCorpa™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 aforward-looking statementsa concerning the Corporationa™s future economic performance. The words or phrases aexpect,a aanticipate,a alook forward,a ashould,a abelievesa and similar expressions are meant to identify aforward-looking statementsa within the meaning of Section27A 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 aforward-looking statements,a which speak only as of the date made, and to advise readers that various factors, including, but not limited to, uncertainty about whether the Corporation will be able to fully comply with the written agreement dated June3, 2010 that the Corporation entered into with the Federal Reserve Bank of New York and the order dated June2, 2010 (the aOrdera) that the Corporation and FirstBank Puerto Rico entered into with the FDIC and the OCIF that, among other things, require the Corporation to attain certain capital levels and reduce its special mention, classified, delinquent and non-accrual assets; uncertainty as to whether the Corporation will be able to meet the remaining conditions, including the issuance of approximately $500million of equity in one or more public or private offerings, necessary to compel the United States Department of the Treasury (the aU.S. Treasurya) to convert into Common Stock the shares of SeriesG Preferred Stock that the Corporation issued to the U.S. Treasury in exchange for its shares of SeriesF Preferred Stock; uncertainty as to whether the Corporation will be able to complete future capital-raising efforts; the risk of being subject to possible additional regulatory actions; the strength or weakness of the real estate markets and of the consumer and commercial credit sectors and their impact on the credit quality of the Corporationa™s loans and other assets, including the Corporationa™s construction and commercial real estate loan portfolios, which have contributed and may continue to contribute to, among other things, the increase in the levels of non-performing assets, charge-offs and the provision expense; a continuation of adverse changes in general economic conditions in the United States and in Puerto Rico, including the interest rate scenario, market liquidity, housing absorption rates, 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 Corporationa™s products and services and the value of the Corporationa™s assets; the Corporationa™s reliance on brokered certificates of deposit and the Corporationa™s ability to obtain, on a periodic basis, approval to issue brokered certificates of deposit to fund operations and provide liquidity in accordance with the terms of the Order; an adverse change in the Corporationa™s ability to attract new clients and retain existing ones; a decrease in demand for the Corporationa™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; a need to recognize additional impairments on financial instruments or goodwill relating to acquisitions; uncertainty about the impact of regulatory and legislative changes on financial services companies in Puerto Rico, the United States and the U.S. and British Virgin Islands, which could affect the Corporationa™s financial performance and could cause the Corporationa™s actual results for future periods to differ materially from prior results and anticipated or projected results; 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 Corporationa™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 in Puerto Rico and the U.S. and British Virgin Islands; the risk that the FDIC may further increase the deposit insurance premium and/or require special assessments to replenish its insurance fund, causing an additional increase in our non-interest expense; 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.; changes in the Corporationa™s expenses associated with acquisitions and dispositions; developments in technology; the impact of Doral Financial Corporationa™s financial condition on the repayment of its outstanding secured loans to the Corporation; risks associated with further downgrades in the credit ratings of the Corporationa™s securities; general competitive factors and industry consolidation; and the possible future dilution to holders of common stock resulting from additional issuances of common stock or securities convertible into common stock. The Corporation does not undertake, and specifically disclaims any obligation, to update any aforward-looking statementsa to reflect occurrences or unanticipated events or circumstances after the date of such statements.