Type to search

Banking Financial District

First BanCorp sells $223M of non-performing residential mortgage loans, OREO

FirstBank continues to clean up its balance sheet through the sale of its bad loan portfolio.

FirstBank continues to clean up its balance sheet through the sale of its bad loan portfolio.

First BanCorp, the parent company of FirstBank Puerto Rico, announced today it has completed a sale of non-performing residential mortgage loans with an unpaid principal balance of $236.6 million (book value of $203.6 million), as well as other real estate owned (“OREO”) properties with an appraised value of $22.3 million (book value $19.2 million).

The aggregate sales price is approximately $128.3 million in an all cash transaction, or approximately 49.6 percent of the sum of the unpaid principal balance of the loans and the appraised value of the OREO.

This transaction will adversely affect the results for the second quarter by approximately $71.7 million (pre-tax), including $2.2 million of estimated selling costs, bank officials said.

“We continue to aggressively address credit issues in legacy loans during this persistently challenging economic environment. We have made great strides over the last two quarters through opportunistic loan sales,” said First BanCorp’s President Aurelio Alemán.

“These transactions have greatly improved our credit risk profile and our capital position remains strong,” he said.

The completion of this transaction together with other transactions and events previously reported in this period will have the effect of improving the bank’s ratio of non-performing assets to total assets on a pro-forma basis as of March 31, 2013, from 8.35 percent to 5.93 percent.

Mission Capital Advisors, LLC advised FirstBank on the transaction.

Author Details
Author Details
Business reporter with 29 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

Leave a Comment

Your email address will not be published. Required fields are marked *