First BanCorp unable to file timely ’10 annual report with SEC

Written by  //  April 1, 2011  //  Banking, Financial District  //  No comments

(Credit: Víctor Román)

First BanCorp on Friday informed the Securities and Exchange Commission that it will not be able to file its annual report for the year ended Dec. 31, 2010 on time, “without unreasonable effort and expense,” as it has not finished preparing the documents for that filing period.

The troubled financial institution told the SEC that it needs more time to evaluate the impact in the fourth quarter of 2010 of several matters regarding the financial statement, including the potential valuation of adjustments related to the $93.7 million net deferred tax asset of its subsidiary, First Bank.
“[The] process involves significant management judgment and subjective assessments,” said the bank. “Until the corporation’s analysis is completed and the corporation has determined the impact this may have on its results of operations, and the corporation’s independent registered public accounting firm has completed its year-end audit, the corporation will be unable to file the [annual report].”
First BanCorp did not hint at when it would be ready to file, and just said that it will do so “as soon as practiceable.” The report was due March 31.
In its earnings release dated Feb. 9, 2011, First BanCorp reported a net loss of $430.6 million for the year ended December 31, 2010, compared to a net loss of $275.2 million for the same period the prior year. Because it is still evaluating certain line items, First BanCorp will be unable to tell whether those results will change.
“Upon completion of the preparation of the Corporation’s consolidated financial statements, it is possible that the reported net loss for 2010 could increase by up to the amount of the net deferred tax asset,” the bank said.
First BanCorp has been attempting to improve its embattled financial condition since late last year. In December, the bank said it intended to sell $701.9 million in bad loans at a sharp discount, for which it expected to receive $401.9 million, or 57.5 percent of the value of the portfolio.
A month later, it announced it would implement a 1-for-15 reverse stock split of all outstanding shares of its common stock as a way to remain listed on the New York Stock Exchange, where it was facing a delisting.
Finally, earlier this week, it was reported that there is a possibility that First BanCorp could be sold to a group of private investors headed by the Carlyle Group and former Banco Popular executive David Chafey.

The transaction would call for the sale of 70 percent of First BanCorp’s shares for between $350 million and $500 million. The rest of the shares would remain in current stockholder’s hands.

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