First BanCorp. Announces Extension of the Expiration Date and Increase in the Exchange Value for Preferred Stock Accepted in the Exchange Offer
First BanCorp. (the “Corporation”) (NYSE: FBP), the bank holding company
for FirstBank Puerto Rico (“FirstBank” or “the Bank”), announced today
that it has extended the expiration date for its offer to issue shares
of its common stock, par value $0.10 per share (“Common Stock”), in
exchange (the “Exchange Offer”) for any and all of the issued and
outstanding shares of Non-Cumulative Perpetual Monthly Income Preferred
Stock, Series A through E (collectively, “Preferred Stock”) until
midnight on Tuesday, April 9, 2013, unless the Corporation further
extends the Exchange Offer or terminates it prior to such date. Proxies
related to the consent on the amendments to the certificates of
designation for the Preferred Stock will be accepted until the new
expiration date.
The Corporation has fixed the Exchange Ratio for the issuance of shares
of Common Stock in exchange for shares of Preferred Stock at 3.57 shares
of Common Stock for each share of each series of Preferred Stock (the
“Exchange Ratio”) validly tendered and not withdrawn that are accepted
by the Corporation pursuant to the terms of the Exchange Offer. The
Exchange Ratio is based on an increased Exchange Value of $22 per share
of Preferred Stock divided by $6.1593, which was the average Volume
Weighted Average Price of a share of Common Stock during the five
trading-day period that ended on Thursday, March 21, 2013. The Exchange
Value will change based upon the price of the Common Stock. As stated in
the press release issued by the Corporation on March 22, 2013, the
original Exchange Value was $20 and the original Exchange Ratio was 3.24
shares of Common Stock for each share of Preferred Stock.
As of midnight, New York City time, on March 25, 2013, 61,076 shares of
Series A Preferred Stock, 31,187 shares of Series B Preferred Stock,
33,516 shares of Series C Preferred Stock, 35,886 shares of Series D
Preferred Stock, and 109,137 shares of Series E Preferred Stock have
been validly tendered and not withdrawn.
Except as otherwise stated in this release, all of the terms and
conditions of the Exchange Offer, as set forth in the Corporation’s
Prospectus dated February 14, 2013, which was filed with the U.S.
Securities and Exchange Commission (the “SEC”) on February 15, 2013, and
the related letter of transmittal, are unchanged.
Sandler O’Neill + Partners, L.P. is acting as the sole dealer manager,
Computershare is acting as exchange agent, and Georgeson Inc. is acting
as information agent for the Exchange Offer. For further details, please
contact Sandler O’Neill + Partners, L.P. at 866-805-4128 (toll-free) or
212-466-7807 (collect), or Georgeson Inc. at 866-856-6388 (toll-free) or
212-440-9800 (collect).
This press release is neither an offer to exchange nor a solicitation
of an offer to sell or purchase Common Stock or Preferred Stock. The
Exchange Offer is only being made pursuant to the Prospectus dated
February 14, 2013, which was filed with the SEC on February 15, 2013,
and the related letter of transmittal, which are available without
charge on the SEC’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. Box 9146,
San Juan, Puerto Rico, 00908-0146; telephone: (787) 729-8109, or
Georgeson Inc., 199 Water Street, 26th Floor, New York, NY 10038;
telephone: 866-856-6388 (toll-free) or 212-440-9800 (collect). Investors
should read the Prospectus for more complete information about the
Corporation and the Exchange Offer. None of the Corporation, the
dealer manager, the exchange agent, the information agent or any other
person is making any recommendation as to whether holders of 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, a state-chartered
commercial bank with operations in Puerto Rico, the Virgin Islands and
Florida, and of FirstBank Insurance Agency. First BanCorp. and FirstBank
operate within U.S. banking laws and regulations. The Corporation
operates a total of 154 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 are First
Federal Finance Corp., a small loan company; FirstBank Puerto Rico
Securities Corp., 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 BanCorp’s Common Stock trades on the New York Stock
Exchange under the symbol “FBP.”
Safe Harbor
This press release may contain “forward-looking statements” concerning
the Corporation’s future economic performance. The words or phrases
“expect,” “anticipate,” “look forward,” “should,” “believes” and similar
expressions are meant to identify “forward-looking statements.” 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, the following could cause actual results to differ materially from
those expressed in, or implied by such forward-looking statements:
uncertainty about whether the Corporation and FirstBank will be able to
fully comply with the written agreement dated June 3, 2010 that the
Corporation entered into with the Federal Reserve Bank of New York (the
“Federal Reserve”) and the order dated June 2, 2010 that FirstBank
entered into with the FDIC and the Office of the Commissioner of
Financial Institutions of the Commonwealth of Puerto Rico (the “FDIC
Order”) that, among other things, require FirstBank to maintain certain
capital levels and reduce its special mention, classified, delinquent,
and non-performing assets; the risk of being subject to possible
additional regulatory actions; uncertainty as to the availability of
certain funding sources, such as retail brokered CDs; the Corporation’s
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 FDIC Order; the
risk of not being able to fulfill the Corporation’s cash obligations or
resume paying dividends to the Corporation’s stockholders in the future
due to the Corporation’s inability to receive approval from the Federal
Reserve to receive dividends from FirstBank or FirstBank’s failure to
generate sufficient cash flow to make a dividend payment to the
Corporation; 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 Corporation’s loans and other assets, including
the Corporation’s construction and commercial real estate loan
portfolios, which have contributed and may continue to contribute to,
among other things, the high 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 Puerto Rico, the U.S., and the U.S.
Virgin Islands and British Virgin Islands, including the interest rate
environment, 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 Corporation’s products and services and reduce the Corporation’s
revenues, earnings, and the value of the Corporation’s assets; an
adverse change in the Corporation’s ability to attract new clients and
retain existing ones; a decrease in demand for the Corporation’s
products and services and lower revenues and earnings because of the
continued recession in Puerto Rico, the current fiscal problems, and
budget deficit of the Puerto Rico government and recent credit
downgrades of the Puerto Rico government; uncertainty about regulatory
and legislative changes for financial services companies in Puerto Rico,
the U.S., and the U.S. and British Virgin Islands, which could affect
the Corporation’s financial condition or performance and could cause the
Corporation’s actual results for future periods to differ materially
from prior results and anticipated or projected results; uncertainty
regarding the timing and final substance of any capital or liquidity
standards, including the Final Basel III requirements and their
implementation through rulemaking by the Federal Reserve, including
anticipated requirements to hold higher levels of regulatory capital and
liquidity and meet higher regulatory capital ratios as a result of Final
Basel III or other capital or liquidity standards; uncertainty about the
effectiveness of the various actions undertaken to stimulate the U.S.
economy and stabilize the U.S. financial markets, and the impact such
actions may have on the Corporation’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, the FDIC, government-sponsored housing agencies, and
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 Corporation’s 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 Corporation’s
non-interest expenses; the risks of not being able to recover the assets
pledged to Lehman Brothers Special Financing, Inc.; the impact on the
Corporation’s results of operations and financial condition of
acquisitions and disposition transactions; a need to recognize
additional impairments on financial instruments, goodwill, or other
intangible assets relating to acquisitions; the risks that downgrades in
the credit ratings of the Corporation’s long-term senior debt will
adversely affect the Corporation’s ability to access necessary external
funds; the impact of the Dodd-Frank Wall Street Reform and Consumer
Protection Act on the Corporation’s businesses, business practices, and
cost of operations; and general competitive factors and industry
consolidation. 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 except as required by the federal securities
laws.
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