SAN JUAN, Puerto Rico–(Business Wire)–
First BanCorp (the “Corporation”) (NYSE: FBP), the bank holding company for
FirstBank Puerto Rico (“FirstBank”), announced today that FirstBank has agreed
to a Consent Order with the Federal Deposit Insurance Corporation (“FDIC”) and
the Office of the Commissioner of Financial Institutions of Puerto Rico (“OCIF”)
and that the Corporation has agreed to enter into a written agreement with the
Federal Reserve Bank of New York (collectively the “Agreements”). Pursuant to
the Agreements, FirstBank and the Corporation have agreed to take certain
actions intended to address various matters, including among others, the
development and adoption of a plan to attain certain capital levels, and the
reduction of non-performing and classified assets that have impacted FirstBank’s
financial condition and performance.

Management and the Board of Directors of the Corporation and FirstBank have been
working proactively over the past months to address many of the items that have
been outlined in the Agreements which stem from the FDIC`s examination as of the
period ended June 30, 2009 conducted during the second half of 2009. In previous
filings with the Securities and Exchange Commission, the Corporation had
disclosed its capital and strategic plans, as well as specific actions underway
intended to improve asset quality, deleverage the balance sheet, mitigate loan
losses and diversify its funding sources.

Aurelio Alemán, Chief Executive Officer of First BanCorp, said, “The prolonged
economic recession in Puerto Rico and Florida has negatively affected real
estate values, the construction industry and the financial condition of many of
our customers. As we have reported in the past, the Corporation’s loan portfolio
and financial performance have been adversely impacted by these matters.”

“We are committed to continue to work expeditiously to resolve the items
detailed in the Agreements and execute our strategies to strengthen our balance
sheet and return FirstBank to its full earnings potential. We have been
rigorously engaged in steps to improve the Corporation`s asset quality and
capital levels, while at the same time, we continue to serve our customers with
the high level of service and dedication for which our franchise is recognized
in the market,” Mr. Alemán concluded.

The Corporation confirmed that it currently meets the established minimum
regulatory capital ratios for a well-capitalized bank and is working towards
further strengthening its position by deploying its capital plan strategy. To
that effect, the Corporation is focusing its efforts in the execution of its
capital initiatives which include efforts to: convert into common stock the $400
million of preferred stock sold to the United States Department of the Treasury
(“U.S. Treasury”) under the Capital Purchase Program (“CPP”); raise $500 million
of equity; and issue shares of common stock in exchange for its non-cumulative
preferred shares. In this regard, the Corporation filed with the Securities and
Exchange Commission a registration statement for the exchange for its
non-cumulative preferred stock and is currently in advanced discussions with the
U.S. Treasury to negotiate the exchange of the CPP preferred stock for shares of
the Corporation`s common stock to be accomplished in one or more transactions.

The Agreements impose no restrictions on FirstBank`s products or services
offered to customers, nor do they impose any type of penalties or fines upon
FirstBank or the Corporation. Concurrent with the Agreements, the FDIC granted
FirstBank a temporary waiver to enable it to continue accessing the brokered
deposit market. FirstBank will request approvals for future periods.

Copies of these Agreements are included in a Current Report on Form 8-K filed
today with the U.S. Securities and Exchange Commission (SEC). The 8-K can be
accessed through the Corporation’s website at www.firstbankpr.com, Investor
Relations section, or at the SEC website at www.second.gov.

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, and of FirstBank Insurance Agency. First BanCorp and
FirstBank Puerto Rico operate under U.S. banking laws and regulations. The
Corporation operates a total of 175 branches, stand-alone offices and in-branch
service centers throughout Puerto Rico, the U.S. and British Virgin Islands, and
Florida. Among the subsidiaries of FirstBank Puerto Rico are First Federal
Finance Corp., a small loan company; First Leasing and Rental Corp., a leasing
company; FirstBank Puerto Rico Securities, a broker-dealer subsidiary; First
Management of Puerto Rico; and FirstMortgage, Inc., a mortgage origination
company. In the U.S. Virgin Islands, FirstBank operates First Insurance VI, an
insurance agency, and First Express, a small loan company. First BanCorp`s
common and publicly-held preferred shares trade on the New York Stock Exchange
under the symbols FBP, FBPPrA, FBPPrB, FBPPrC, FBPPrD and FBPPrE. Additional
information about First BanCorp may be found at www.firstbankpr.com.

Safe Harbor

This press release may contain “forward-looking statements” concerning the
Corporation`s future economic performance. The words or phrases “expect,”
“anticipate,” “look forward,” “should,” “believes” and similar expressions are
meant to identify “forward-looking statements” within the meaning of Section 27A
of the Private Securities Litigation Reform Act of 1995, and are subject to the
safe harbor created by such section. 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, but not limited to, uncertainty about whether the Corporation`s
actions to improve its capital structure will have their intended effect; the
risk of being subject to additional regulatory action as a result of, among
other things, failure to comply with the provisions of the Agreements, which
require, among other requirements, that the Corporation maintain its regulatory
capital ratios at levels that exceed the regulatory capital minimum requirements
for a well-capitalized bank and reduce its non-performing and classified assets
to levels specified in the Agreements within certain timeframes; the
Corporation`s reliance on brokered certificates of deposit and its ability to
continue to obtain the regulatory approval required by the Agreements to issue
brokered certificates of deposit to fund operations and provide liquidity; the
strength or weakness of the real estate markets and of the consumer and
commercial credit sectors and its impact on the credit quality of the
Corporation`s loans and other assets, including the Corporation`s construction
and commercial real estate loan portfolios, which have contributed and may
continue to contribute to, among other things, the increase in the levels of
non-performing assets, charge-offs and the provision expense; additional adverse
changes in general economic conditions in the United States and in Puerto Rico,
including the interest rate scenario, market liquidity, housing absorption
rates, real estate prices and disruptions in the U.S. capital markets, which may
reduce interest margins further, adversely impact current funding sources and
adversely affect demand for all of the Corporation`s products and services and
the value of the Corporation`s assets, including the value of derivative
instruments used for protection from interest rate fluctuations; an adverse
change in the Corporation`s ability to attract new clients and retain existing
ones; a decrease in demand for the Corporation`s products and services and lower
revenues and additional losses because of the continued recession and the recent
and any future consolidation of the banking industry in Puerto Rico and the
current fiscal problems and budget deficit of the Puerto Rico government; a need
to recognize additional impairments on financial instruments or impairments of
goodwill relating to acquisitions; uncertainty about regulatory and legislative
changes for financial services companies in Puerto Rico, the United States and
the U.S. and British Virgin Islands, which could adversely affect the
Corporation`s financial performance and could cause the Corporation`s actual
results for future periods to differ materially from prior results and
anticipated or projected results; uncertainty about the effectiveness of the
various actions undertaken to stimulate the United States economy and stabilize
the United States financial markets, and the impact such actions may have on the
Corporation’s business, financial condition and results of operations; changes
in the fiscal and monetary policies and regulations of the federal government,
including those determined by the Federal Reserve System, the FDIC,
government-sponsored housing agencies and local regulators in Puerto Rico and
the U.S. and British Virgin Islands; the risk that the FDIC may further increase
the deposit insurance premium and/or require special assessments to replenish
its insurance fund, causing an additional increase in our non-interest expense;
risks of not being able to generate sufficient income to realize the benefit of
the deferred tax asset; risks of not being able to recover the assets pledged to
Lehman Brothers Special Financing, Inc.; changes in the Corporation`s expenses
associated with acquisitions and dispositions; developments in technology; the
impact of Doral Financial Corporation`s financial condition on the repayment of
its outstanding secured loans to the Corporation; risks associated with further
downgrades in the credit ratings of the Corporation`s securities; general
competitive factors and industry consolidation; and the possible future dilution
to holders of common stock resulting from additional issuances of common stock
or securities convertible into common stock. 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 except as required by the federal securities
laws.

First BanCorp
Alan Cohen, 787-729-8256
Senior Vice President
Marketing and Public Relations
alan.cohen@firstbankpr.com

Copyright Business Wire 2010