San Juan, Puerto Rico, Aug. 29 /PRNewswire-FirstCall/ -- First BanCorp today announced that its subsidiary, FirstBank, has consented to a Cease and Desist order with the Federal Deposit Insurance Corporation (FDIC) under which the Company agreed to take certain actions to strengthen the Bank's compliance with the Bank Secrecy Act (BSA).
The consent Order requires FirstBank to take various affirmative actions, including that FirstBank operate under adequate management supervision and Board of Directors oversight with respect to BSA matters, implementing systems of internal controls, independent testing and training programs to ensure full compliance with BSA, and amending existing policies, procedures, and processes relating to internal and external audits to review compliance with BSA provisions, among others.
Since the beginning of 2006, the Bank has been refining core areas of its risk management and compliance systems, and to-date has instituted a significant number of measures required by the agreement. The consent Order, which resulted from the FDIC's recently completed audit as of December 31, 2005, does not impose any civil or monetary penalties, and does not restrict FirstBank's business operations.
"FirstBank has been working diligently to strengthen and enhance its BSA policies and procedures. We remain steadfastly committed to maintain the highest standards of compliance," said Luis Beauchamp, President and Chief Executive Officer of FirstBank.
As previously announced, First BanCorp is in the process of preparing restated financial statements. First BanCorp anticipates it will file an amended annual report on Form 10-K for 2004 this summer, and then its historical financial statements for 2005 and the first two quarters of 2006.
About First BanCorp
First BanCorp is the parent corporation of FirstBank Puerto Rico, a state chartered commercial bank with operations in Puerto Rico, the Virgin Islands and Florida; of FirstBank Insurance Agency; and of Ponce General Corporation. First BanCorp, FirstBank Puerto Rico and FirstBank Florida, formerly UniBank, the thrift subsidiary of Ponce General, all operate within U.S. banking laws and regulations. The Corporation operates a total of 139 financial services facilities throughout Puerto Rico, the U.S. and British Virgin Islands, and Florida. Among the subsidiaries of FirstBank Puerto Rico are Money Express, a finance company; First Leasing and Car Rental, a car and truck rental leasing company; and FirstMortgage, a mortgage origination company. In the U.S. Virgin Islands, FirstBank operates First Insurance VI, an insurance agency; First Trade, Inc., a foreign corporation management company; and First Express, a small loan company. First BanCorp's common and preferred shares trade on the New York Stock Exchange under the symbols FBP, FBPPrA, FBPPrB, FBPPrC, FBPPrD and FBPPrE.
Safe Harbor
The Corporation wishes to caution readers not to place undue reliance on any such "forward-looking statements," which speak only as of the date made, and to advise readers that various factors, including the interest rate risk relating to the secured loans to Doral and R&G Financial, the continued repayment by Doral and R&G Financial of their outstanding loans, the impact on net income of the reduction in net interest income resulting from the repayment of a significant amount of the commercial loans to Doral, the impact of the March and August 2006 consent Orders on the Corporation's future operations and results, FirstBank's ability to issue brokered certificates of deposit, its liquidity, the results of the Corporation's continuing review of the accounting judgments reflected in its historical financial statements, the impact of the announced restatement on the Corporation's customers and lenders, the ability to fund operations, changes in the interest rate environment, regional and national economic conditions, competitive and regulatory factors and legislative changes, could affect the Corporation's financial performance and could cause the Corporation's actual results for future periods to differ materially from those anticipated or projected. The Corporation does not undertake, and specifically disclaims any obligation, to update any "forward-looking statements" to reflect occurrences or unanticipated events or circumstances after the date of such statements.
Alan Cohen
Senior Vice President, Marketing and Public Relations
Office (787) 729-8256 / Cell (787) 685-4229
