After accounting restatements forced First BanCorp to play catch-up in its financial reporting, the San Juan, Puerto Rico, banking company said it became current this week by filing its first- and second-quarter results.
Luis M. Beauchamp, First BanCorp's chief executive and president, said in a press release that it endured a "painstaking 24-month process" to get current in its filings with regulators late Monday. For the first six months of this year, the $17.6 billion-asset company reported, it earned $46.6 million, or 32 cents a share, up 30.5% from a year earlier.
"I am pleased we will be reporting in a normal cycle and continuing an open dialogue with shareholders and the investment community at large," Mr. Beauchamp said. A spokesman said Mr. Beauchamp was tied up in meetings and unavailable to comment.
Though First BanCorp's earnings rose in the first half, several one-time items muddied the comparison with prior periods. Its first-half loan-loss provision was $49.5 million, up 72.4% from a year earlier.
First BanCorp cited "deteriorating economic conditions in Puerto Rico" and the fact that its loss provision was reduced in the same period in 2006 after another banking company on the island repaid a $2.4 billion secured commercial loan. However, this year's higher loss provision was largely offset by its tax provision, which dropped from a year earlier by 53%, to $14.4 million.
Though the company increased its loan-loss provision, it said it "has not experienced significant losses in either the residential real estate portfolio or commercial portfolio."
Fernando Scherrer, the chief financial officer, said in the release, "Although we have seen a slowdown and, in some specific areas, a decrease in real estate values, FirstBank has a seasoned portfolio with adequate loan-to-value ratios."
Shares of First BanCorp fell 2.5% Tuesday.
Its total loan portfolio of $11.2 billion at June 30 was up 8.8% from a year earlier. Deposits rose 5.4% from the end of 2006, to $11.6 billion.
The Puerto Rican banking scene has been roiled by accounting problems since early 2005 when three companies on the island determined they had wrongly accounted for mortgage sales for several years. Doral Financial Corp. and R&G Financial Corp. also were also forced to restate earnings, which delayed timely filing for several quarters. Doral became current in financial reporting in August with its second-quarter results. R&G is still working to restate earnings for 2002 through 2004 and must file results for the first three quarters of 2005 and 2006, and the first two quarters of this year. On Tuesday, Doral fell 7.7%, and R&G dropped 4.2%.
To improve its capital position First BanCorp has sold $94.8 million of stock, or a 10% stake, through a private placement to Scotiabank. In its release, it said it is now focused on cutting costs. Its $152.8 million of first-quarter noninterest expense was up 7% from a year earlier, partly due to higher employment in its audit and compliance units.
