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First BanCorp(FBP - Get Report) have plunged 45% year to date and 66% over a one-year period.
The holding company of FirstBank Puerto Rico had commercial real estate loans totaling $3.76 billion or 217% of its capital. Nonperforming CRE loans stood at $288.9 million or nearly 17% of its capital.
Construction, land development and land loans are the biggest problem areas for the bank, hurt by its aggressive expansion into North Carolina's market in the boom years. Real estate construction loans accounted for 18% of the total loans in 2010, while commercial mortgages and other loans outside of residential real estate formed 29% of the total loan portfolio.
The bank said in the first quarter that it did not expect material improvement in nonperforming assets, nor deterioration, in the near future.
First BanCorp said in early June that private equity firm Thomas H. Lee had agreed to buy $180 million of its common stock, conditional upon it being able to raise another $320 million in common stock that will allow it to convert TARP preferred stock into common shares.
The additional capital is expected to cushion further losses.
Michael Diana, analyst at Cantor, reduced his estimates to reflect the expansion in the equity base, but viewed the deal as a positive for the stock, as it ensured First Bancorp's "survival as an individual entity."
The deal with Thomas Lee has triggered deal chatter. Cantor expects
Doral(DRL), its smaller rival, to renew takeover talks with First BanCorp. Other reports speculate that
Bank of Nova Scotia(BNS) might be interested in buying the bank.
According to Reuters, four analysts rate the stock a buy, while two rate it an outperform. There are no hold or sell ratings on the stock.