SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13
or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): March 23, 1999
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First BanCorp.
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(Exact name of registrant as specified in this charter)
Puerto Rico 001-14793 66-0561882
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(State or other jurisdiction of (Commission File No.) (IRS Employer
Identification No.)
incorporation)
1519 Ponce De Leon Avenue, San Juan, Puerto Rico 00908-0146
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (787) 729-8200
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ITEM 5. OTHER EVENTS
On March 23, 1999, First BanCorp. (the "Company") announced plans to
simplify its operations to make the Company more efficient and responsive in
serving customers. The project, known as "The Next 50", was launched during late
1998, as the Company celebrated its 50th anniversary.
Once the plan is fully implemented, the improvements are expected to
add $12 million in annualized recurring pre-tax earnings, through cost
reductions and revenues enhancements. The after tax costs related to the project
are estimated to be $2.8 million.
Project "The Next Fifty" was conducted with the assistance of Tandon
Capital Associates, Inc.; a New York advisory firm.
In addition, the Company, on April 12, 1999, released its unaudited
earnings for the quarter ended March 31, 1999. The Company's press release also
included certain unaudited balance sheet and operational data as of March 31,
1999. A copy of the press release disclosing the Company's unaudited earnings
for March 31, 1999 is attached as an exhibit to this Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA, FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
99.1 Press Release dated March 23, 1999.
99.2 Press Release dated April 12, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant had duly caused this report to be signed on its behalf of the
undersigned hereunto duly authorized.
FIRST BANCORP.
By: /s/ Annie Astor de Carbonell
Annie Astor de Carbonell
Senior Executive Vice President
and Chief Financial Officer
Date: April 14, 1999
EXHIBIT 99.1
FIRST BANCORP TO INCREASE
EFFICIENCY THROUGH PROJECT "THE NEXT 50"
San Juan, Puerto Rico, March 23, 1999-First BanCorp, (NYSE:FBP) today
announced plans to simplify and streamline its operations, in order to make the
company more efficient, responsive and convenient in serving customers. The
project, known as "The Next 50", was launched during late 1998, as the company
celebrated its 50th anniversary and marks the beginning of the next 50 years of
the financial services company.
Project "The Next 50" involved the full time participation of 45
employees, who generated m more than 500 improvement ideas. The ideas will be
implemented during the next 18 months. Once fully implemented, the improvements
are expected to ad $12 million in annualized recurring pre-tax earnings, through
cost reductions and revenues enhancements. First BanCorp has estimated its total
after tax costs related to this project, to achieve this improvement, will only
be $2.8 million. This amount will be recorded as soon as the required accounting
conditions exist which will enable the Corporation to record this adjustment.
This will most likely occur during the quarter ended June 30, 1999.
First BanCorp, which already has one of the best efficiency ratios in
the industry, took the initiative of this project recognizing the importance of
retaining a competitive advantage in the rapidly evolving financial services
industry. "Being the most efficient financial services organization will enable
First BanCorp to deliver a very competitive value to both customers and
shareholders, helping to ensure a bright future for the company and its
employees", said Angel Alvarez, Chairman and CEO of First BanCorp.
Project "The Next Fifty" was conducted with the assistance of Tandon
Capital Associates, Inc.; a New York based advisory firm.
First BanCorp is the holding company of FirstBank Puerto Rico, which
has total assets of $4.0 billion, and is the second largest independently owned
commercial bank in Puerto Rico. The Bank, which is a well-capitalized
institution, operates a total of 55 financial service facilities throughout
Puerto Rico and the US Virgin Islands. FirstBank also operates Money Express, a
finance company, with 26 offices throughout the Island and First leasing and Car
Rental a car and truck rental leasing company, with offices in Bayamon, Rio
Piedras, Guaynabo, Isabela and Caguas.
FirstBank Puerto Rico reorganized into a Holding Company, First
BanCorp, effective October 1, 1998.
EXHIBIT 99.2
FIRST BANCORP REPORTS RECORD EARNINGS;
14.3% INCREASE
IN EARNINGS PER SHARE
San Juan, Puerto Rico, April 12, 1999-First BanCorp (NYSE:FBP) reported
today earnings of $14,141,216 ir $0.48 per share (basic and diluted), for the
quarter ended March 31, 1999, as compared to earnings of $12,360,684 or $0.42
per share (basic and diluted) for the first quarter of 1998, an increase of
14.3% in earnings per share. Return on assets (ROA) for the first quarter of
1999 was 1.42% compared to 1.48% for the first quarter of 1998. Return on equity
(ROE) was 21.78% for the first quarter of 1999, as compared to 20.27% for the
first quarter of 1998. Diluted weighted average shares were 29,540,661 in 1999.
Net interest Income, the Corporation's main source of income, increased
from $40.6 million during the first quarter of 1998, to $44.6 million during the
first quarter of 1999.
Operating expenses were $23.7 million during this quarter, a slight
increase as compared to the same quarter of 1998 expenses of $21.6 million, but
a decrease of $800,000 when compared to expenses of $24.5 million during the
previous December 1998 quarter.
The efficiency ratio was 46.01% and 45.7% for the three months ended
March 31, 1999 and 1998, respectively. Other Income decreased from $16.8 million
during the first quarter of 1998 to $8.2 million during the first quarter of
1999, monthly as a result of investment gains of $10.1 million registered during
the first quarter of 1998.
Commenting of these first quarter results, Mr. Angel Alvarez- Perez,
Chairman, President and CEO of First BanCorp said. "we are extremely pleased at
the results of the first three months of 1999, which were over our projections.
Loan growth was healthy in all areas. There was also a notable improvement in
asset quality. It becomes evident every day that the corporate community of our
Island is increasingly making FirstBank, our subsidiary, its main banking
relationship."
Total assets were $4,045 million as of March 31, 1999, as compared to
$3,394 million as of March 31, 1998 and $4,017 million as of December 31, 1998.
Total deposits at March 31, 1999 of $1,847 million, increased significantly by
$231.3 million and $72 million, when compared to March 31, 1998 and December 31,
1998,
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respectively. Loans receivable increased to $2,162 million, as compared to
$1,961 million as of March 31, 1998 and $2,120 million as of December 31, 1998.
Non-performing loans as of March 31, 1999 were $59.9 million or 2.77% of
total loans, a decrease of $1.0 million and $12.1 million, when compared to
$60.9 million (3.10% of total loans) and $72.1 million (3.40% of total loans) as
of March 31, 1998, and December 31, 1998, respectively. (Non-performing loans ad
ratios involving non-performing loans may not be comparable to other banks in
Puerto Rico because First BanCorp includes past due loans over 90 days still
accruing as non-performing loans while other major banks do not include them).
The allowance for loan losses to non-performing loans (reserve coverage)
increased to 114.65% as of March 31, 1999, when compared to 98.0% as of March
31, 1998 and 94.2%, as of December 31, 1998 as a result of the significant
decrease of non-performing loans and a steady increase in the loan loss
allowance. Non-performing assets to total assets decreased to 1.68% when
compared to 2.03% as of March 31, 1998 and 1.94% as of December 31, 1998.
The Corporation provided $13.8 million for loan losses during the
quarter, as compared to a $21.7 million provision for the first quarter of 1998
as a result of a lower provision need due to an improvement in the asset
quality. Net charge offs during the 1999 first quarter were $12.9 million.
Charge offs for the previous four quarters were $19.8 million, $14.3 million,
$13.9 million and $18.2 million for March 1998, June 1998, September 1998, and
December 1998, respectively. The Corporation's reserve for loan losses increased
to $68.2 million at the end of the quarter, up from $59.6 million at March 31,
1998 and $67.9 million at December 31, 1998.
First BanCorp is the holding company of FirstBank Puerto Rico, which
has total assets of $4.0 billion, and is the second largest independently owned
commercial bank in Puerto Rico. The Bank, which is a well-capitalized
institution, operates a total of 55 financial service facilities throughout
Puerto Rico and the US Virgin Islands. FirstBank also operated Money Express, a
finance company, with 26 offices throughout the Island and First Leasing and Car
Rental, a car and truck rental leasing company, with offices in Bayamon, Rio
Piedras, Guaynabo, Isabela, and Caguas. The Corporation recently announced it
has filed a registration statement with the Securities and Exchange Commission
for the offering of $90 million perpetual preferred stock, to support the
Corporation's growth plans.
FirstBank Puerto Rico reorganized into a Bank Holding Company
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structure effective October 1, 1998.
FIRST BANCORP
(NYSE: FBP)
CONDENSED FINANCIAL HIGHLIGHTS
(000's OMITTED)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Three Months Ended
March 31
Results of operations: 1999 1998
Net interest income $44,598 $40,608
Provision for possible 13,800 21,738
loan losses
Other income 8,168 16,752
Operating expenses 23,686 21,591
Income before income 15,280 14,031
tax provision
Income tax provision 1,139 1,670
Net Income $14,141 $12,361
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Net income per common $.48 $.42
share - basic
Net income per common $.48 $.42
share-diluted
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FIRST BANCORP
(NYSE: FBP)
CONDENSED FINANCIAL HIGHLIGHTS
(000's OMITTED)
At March 31 At March 31
1999 1998
Total assets $4,045,229 $3,394,201
Total investments securities 1,754,728 1,336,441
Total loans 2,161,748 1,960,945
Reserve for possible loan 68,717 59,628
losses
Total deposits 1,847,026 1,615,755
Common stockholder's equity 249,244 236,564
</TABLE>
