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FirstBank Holding Its Own Through Hard Times

Feb. 8, 2009 — While the nightly news brings dire reports on the U.S. economy and the finance industry, First BanCorp, the parent company of FirstBank Puerto Rico and St. Croix FirstBank, is profitable, growing and doing well — with a bit of federal assistance.
"The issuance of $400 million in preferred shares to the U.S. Treasury in January 2009 has strengthened the corporation's capital position to unprecedented levels during a period of uncertainty in the economy," said First BanCorp CEO Luis Beauchamps in the company's earnings release.
The extra capital brings the bank's capital ratio close to 14 percent, he said, putting it $1.1 billion above the level needed to meet the requirement to be well capitalized.
First BanCorp reported net income for the 2008 calendar year of $109.9 million, an increase of 61percent from $68.1 million a year earlier.
First Bank, along with Banco Popular, two local banks with headquarters in Puerto Rico, are among the many nationwide receiving federal bailout money. Banco Popular's parent corporation, Popular Inc., secured $935 million Dec. 5 and First BanCorp, parent of First Bank, got $400 million Jan. 16, according to the U.S. Treasury.
Total assets increased to $19.5 billion, up from $17.2 billion in 2007. Total deposits, not counting brokered certificates of deposit, increased to $4.6 billion, up $770.1 million or 20 percent from $3.9 billion at the end of 2007. Total stockholders' equity amounted to $1.5 billion as of Dec. 31, an increase of $126.5 million from Dec. 31, 2007.
Net income for the fourth quarter of 2008 was $18.8 million, up considerably from $7.4 million a year earlier. After payment of preferred dividends, the bank recorded 2008 fourth quarter net income for common shareholders of $8.7 million or nine cents per diluted common share. The fourth quarter of the year before, the bank showed a net loss for common shareholders of $2.7 million, or three cents per diluted common share.
Other highlights of the bank's 2008 earnings statement:
— Net interest income was up 12 percent to $124.2 million;
— $999.4 million in loan originations;
— Net loan and lease charge-offs increased 17 percent to $28.2 million from $24.1 million; and
— Non-performing assets of $637.2 million, of which $274.9 million are residential mortgage loans.
This is up $197.9 million, or 45 percent, from $439.3 million the previous year.
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; of FirstBank Insurance Agency; and of Ponce General Corporation. The corporation operates a total of 153 financial services facilities throughout Puerto Rico, the U.S. and British Virgin Islands, and Florida. Among the subsidiaries of FirstBank Puerto Rico are Money Express, a finance company; First Leasing and Car Rental, a car and truck rental leasing company; and FirstMortgage, 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.
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