First BanCorp consents to FDIC cease-and-desist order

Wednesday, August 30, 2006

Puerto Rico's First BanCorp (NYSE: FBP) said its banking subsidiary FirstBank consented to a cease-and-desist order from the Federal Deposit Insurance Corporation (FDIC) and to take the necessary action to strengthen its compliance with the bank secrecy act.

The consent order, which resulted from the FDIC's recently completed audit of December 31, 2005, does not impose any civil or monetary penalties and does not restrict FirstBank's business operations, the bank said in a press release.

This is the second cease-and-desist order First BanCorp faces this year, as it agreed in March with fellow Puerto Rican mortgage lenders Doral Financial Corporation (NYSE: DRL) and R&G Financial Corporation (NYSE: RGF) to hire independent consultants to review their home loan portfolios.

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The new consent order requires FirstBank to implement internal control systems and amend policies to ensure compliance with the secrecy act among other measures.

Last December, First BanCorp said that it would restate more than four years of financial results after an internal audit found it had incorrectly accounted for mortgage loans purchased from Doral and R&G Financial.

The company said it expects to file an amended 2004 annual report this summer, and then its historical financial statements for 2005 and the first two quarters of 2006.