San Juan-based bank holding company First BanCorp (NYSE: FBP), parent of FirstBank Puerto Rico, remains short of capital requirements demanded by regulators despite improving its ratios and significantly slashing losses in 1Q11.
FirstBank's 11.7% total risk-based capital and 7.60% leverage ratios as of end-March were up from 11.6% and 7.25% at end-2010, respectively. However, federal requirements demand ratios of 12% and 8%.
FirstBank's shortages prompted regulators to tell the company one year ago to come up with a capital plan.
All ratios as of March 31 were above the targets included in the plan submitted to regulators, the company said in a press release.
Thanks to an agreement reached with the US Treasury, First BanCorp extended to October 7 the date by which it has to complete a pending US$350mn equity raise to compel conversion of its series G preferred stock into common shares.
"Our first quarter results demonstrated progress in executing our capital plan and implementing our key operating strategies, improving asset quality, reducing loan exposure on riskier loan categories, managing operating expenses and improving the mix of deposits," company president and CEO Aurelio Alemán said.
NARROWER Q1 LOSSES
The company narrowed losses by 73% in 1Q11 to US$28.4mn compared with the same period in 2010, thanks to lower charges related to troubled loans and a US$19mn gain from the sale of mortgage-backed securities.
First BanCorp is the island's second largest financial institution with US$15.1bn in assets as of March 31. Canada's Scotiabank (NYSE: BNS) holds a 10% stake in the company.
To read the company's full earnings release, go to this link