First BanCorp in Puerto Rico to Sell $200M in Loans

By Tanaya Macheel May 26, 2015, 6:08 p.m. EDT 1 Min Read

M&A

Doral Financial Loan Sales Lowered Capital, Bolstered Liquidity

Doral Financial in San Juan, Puerto Rico, has sold more loans in a move that will deplete capital but bolster the company's liquidity.

By Paul Davis

October 1
Community banking

Borrower Dispute Underscores Woes for Puerto Rican Banks

Several Puerto Rican banks are dealing with a sour participation to a major utility on the island. The creditor like the Puerto Rican government is barred from filing for bankruptcy, complicating matters for its lenders.

By Jackie Stewart

May 21

First BanCorp in San Juan, Puerto Rico, has agreed to sell about $200 million in nonperforming loans and other assets to improve credit quality.

The $13 billion-asset company will sell the $199.8 million loan portfolio for $87.6 million in cash, or 43.8% of the unpaid principal balance. The loans carried a book value of about $150 million. The portfolio consists of nonperforming and classified commercial loans, and other real estate owned. First BanCorp did not identify the buyer; the deal is expected to close next month.

First BanCorp will record a pretax loss of $47.2 million as a result of the sale. The transaction will improve First BanCorp's ratio of nonperforming assets to total assets by 72 basis points to 5.02%.

The deal will contribute to future reductions in our expense base, Aurelio Alemán-Bermudez, chief executive, said in a Tuesday news release.

First BanCorp last month was released from a 2010 consent order with the Federal Deposit Insurance Corp.

Tanaya Macheel

Reporter