Attached files
file | filename |
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8-K - FORM 8-K - FIRST BANCORP /PR/ | g27630e8vk.htm |
EX-10.2 - EX-10.2 - FIRST BANCORP /PR/ | g27630exv10w2.htm |
EX-10.3 - EX-10.3 - FIRST BANCORP /PR/ | g27630exv10w3.htm |
EX-99.2 - EX-99.2 - FIRST BANCORP /PR/ | g27630exv99w2.htm |
EX-10.1 - EX-10.1 - FIRST BANCORP /PR/ | g27630exv10w1.htm |
Exhibit 99.1
FIRST BANCORP ANNOUNCES DEFINITIVE AGREEMENTS
FOR AGGREGATE COMMITMENTS OF $339.5 MILLION IN NEW CAPITAL
FOR AGGREGATE COMMITMENTS OF $339.5 MILLION IN NEW CAPITAL
SAN JUAN, Puerto Rico June 28, 2011 First BanCorp (the Corporation) (NYSE: FBP), the bank
holding company for FirstBank Puerto Rico (FirstBank or the Bank), today announced that it has
entered into a definitive agreement with two funds managed by Oaktree Capital Management, L.P.
(together Oaktree) under which Oaktree would purchase an aggregate of approximately $175.5
million of common stock of the Corporation at a per share price of $3.50. The Oaktree investment
will represent 24.9% of the outstanding shares of the Corporations common stock upon completion of
the capital raise and the conversion into common stock of the $424.2 million of Series G
Mandatorily Convertible Preferred Stock (Series G Preferred Stock) held by the United States
Department of the Treasury.
The Oaktree investment will be made on substantially the same terms as the previously announced
investment agreement with Thomas H. Lee Partners, L.P. (THL). In addition, like the THL
transaction, the Oaktree agreement gives Oaktree the right to designate a person to serve on the
Corporations Board of Directors upon completion of the sale of shares of common stock to Oaktree.
In addition to customary closing conditions, the Oaktree investment is conditioned upon the
Corporation raising a total of at least $500 million but no more than $550 million of new capital
(inclusive of the Oaktree and THL investments and the previously announced proposed $35 million
rights offering to current stockholders), the conversion into common stock of the Series G
Preferred Stock, approval by the Corporations stockholders of the issuance of shares of common
stock in the capital raise and required regulatory approvals.
The Corporation also has entered into investment agreements with institutional investors and other
private equity firms for the issuance of an aggregate of approximately $164 million of the
Corporations common stock, which, together with the THL and Oaktree investments, totals $515
million in commitments.
Aurelio Alemán, President and Chief Executive Officer of First BanCorp commented, With the
aggregate amount of these commitments we now exceed the minimum $500 million required for
completion of the capital raise. The total amount of the capital raise will enable us to compel the
conversion of the Series G Preferred Stock, substantially strengthen our capital ratios and
reinforces First BanCorps position as the second largest banking franchise in Puerto Rico. The
Corporation will now proceed with the actions necessary for completion of the transaction,
including seeking stockholder approval for the aggregate sale of shares under these investment
agreements.
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 160 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 Express, a small
loan company. First BanCorps 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.
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Safe Harbor
This press release may contain forward-looking statements concerning the Corporations
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, uncertainty
about whether the Corporation will be able to satisfy the conditions to the sale of shares under
the investment and subscription agreements with THL, Oaktree and others, including the requirement
that stockholders approve the sales, and be in a position to compel the United States Department of
the Treasury (U.S. Treasury) to convert into common stock the shares of Series G Preferred Stock
that the Corporation issued to the U.S. Treasury; fully comply with the written agreement dated
June 3, 2010 that the Corporation entered into with the Federal Reserve Bank of New York (FED)
and the order dated June 2, 2010 (the Order) that FirstBank Puerto Rico entered into with the
Federal Deposit Insurance Corporation (FDIC) and the Office of the Commissioner of Financial
Institutions of Puerto Rico that, among other things, require FirstBank 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 complete any other future capital-raising efforts;
uncertainty as to the availability of certain funding sources, such as retail brokered CDs; the
Corporations reliance on brokered CDs and its ability to obtain, on a periodic basis, approval
from the FDIC to issue brokered CDs to fund operations and provide liquidity in accordance with the
terms of the Order; the risk of not being able to fulfill the Corporations cash obligations or pay
dividends to its shareholders in the future due to its inability to receive approval from the FED
to receive dividends from FirstBank Puerto Rico; 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 Corporations loans and
other assets, including the Corporations
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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 and may subject the Corporation to further risk from loan
defaults and foreclosures; 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 Corporations products and services and the
value of the Corporations assets; an adverse change in the Corporations ability to attract new
clients and retain existing ones; a decrease in demand for the Corporations 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 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 Corporations financial performance and could
cause the Corporations 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 Corporations 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 FDIC,
government-sponsored housing agencies and local regulators in Puerto Rico and the U.S. and British
Virgin Islands; the risk of possible failure or circumvention of controls and procedures and the
risk that the Corporations risk management policies may not be adequate; 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 the Corporations non-interest expense; risks
of not being able to recover the assets pledged to Lehman Brothers Special Financing, Inc.; impact
to the Corporations results of operations and financial condition associated with acquisitions and
dispositions; a need to recognize additional impairments on financial instruments or goodwill
relating to acquisitions; the adverse effect of litigation; risks that further downgrades in the
credit ratings of the
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Corporations long-term senior debt will adversely affect the Corporations ability to make
future borrowings; 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 forward-looking statements to reflect occurrences or
unanticipated events or circumstances after the date of such statements.
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For First BanCorp:
Sara Alvarez
Vice President
Corporate Affairs Office
sara.alvarez@firstbankpr.com
(787) 729-8041
Sara Alvarez
Vice President
Corporate Affairs Office
sara.alvarez@firstbankpr.com
(787) 729-8041
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