Federal Reserve Terminates Enforcement Action Against First BanCorp

The Federal Reserve has terminated its enforcement action against First BanCorp (FBP), driving up shares by more than 2%.

According to the order between the Fed and First BanCorp as of June 3, 2010, the bank could not issue dividends or distributions without the prior agreement of the Fed, and could not directly or indirectly incur, increase or guarantee any debt without the prior written approval of the Fed. The order was enacted to maintain the financial soundness of First BanCorp.

Additionally, the bank had to issue to the Fed a written plan to maintain sufficient capital within 30 days of the order.

The bank said the Fed terminated the formal written agreement as of Oct. 3, but the bank agreed it wil continue to obtain Reserve Bank approval before paying dividends, receiving dividends from the Bank, making payments on subordinated debt or trust preferred securities, incurring or guaranteeing debt or purchasing or redeeming any corporate stock.

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