SAN JUAN, Puerto Rico -- First Federal Savings Bank of Puerto Rico said its board approved a plan to convert to a state-chartered commercial bank.

The thrift said it must get approvals from the Office of Thrift Supervision, the Puerto Rico commissioner offinancial institutions, and its own shareholders, as well as a ruling from the Internal Revenue Service.

First Federal, which has $1.9 billion of assets, said a bank charter will simplify its tax structure and allow more investments in commercial and consumer loans.

Separately, First Federal announced it will cut its interest costs with the repurchase of $50 million of its own collateralized real rate bonds in a public auction from the Resolution Trust Corp. They were issued in 1988 and initially owned by Franklin Federal Savings Association, which was placed under RTC conservatorship several years ago.

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