SAN JUAN, Puerto Rico, Feb. 16 /PRNewswire-FirstCall/ -- First BanCorp (NYSE:FBP) today announced that it has entered into a definitive agreement to issue approximately 9.250 million shares of its common stock to Scotiabank (TSX, NYSE: BNS), through a private placement offering, valuing the stock at $10.25 per share for a total purchase price of approximately $94.8 million. The valuation reflects a premium of approximately 5% over the volume weighted- average closing share price over the 30 trading day period ending January 30, 2007. After the investment, Scotiabank will hold 10% of First BanCorp's then outstanding common shares. "This investment signals a vote of confidence in the financial strength of First BanCorp, in the value of the FirstBank franchise and in the professionalism and capability of our management team," said Luis Beauchamp, President and Chief Executive Officer of First BanCorp. "Scotiabank is a premier global financial institution and Canada's most international bank, and we welcome them as an institutional shareholder joining other institutional investors who hold equity positions in First BanCorp." First BanCorp has agreed to give Scotiabank notice if any decision to commence a process involving the sale of First BanCorp during the 18 months after Scotiabank's investment is made, and to negotiate with Scotiabank exclusively for 30 days thereafter if Scotiabank so requests. In addition, during the 18-month period Scotiabank may give notice to First BanCorp providing its offer for the acquisition of the Corporation. First BanCorp has agreed to negotiate the offer received on an exclusive basis for a period of 30 days. Also, First BanCorp has agreed to give Scotiabank notice of the terms of any proposed acquisition received from a third party during the 18-month period and to allow Scotiabank five business days to indicate whether it will present a counteroffer. Finally, Scotiabank may have a non-voting observer at First BanCorp's director meetings so long as Scotiabank holds 5% of First BanCorp's stock. Mr. Beauchamp added, "This private placement further strengthens First BanCorp's capital position, which will enhance the implementation of its corporate strategies." The private placement, which has been approved by First BanCorp's Board of Directors, and is subject to regulatory approvals, is expected to close within ninety days. UBS Investment Bank served as placement agent and acted as First BanCorp's financial advisor in the offering. 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 153 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. About Scotiabank Scotiabank is one of North America's premier financial institutions and Canada's most international bank. With close to 57,000 employees, Scotiabank and its affiliates serve approximately 12 million customers in some 50 countries around the world. Scotiabank offers a diverse range of products and services, including personal, commercial, corporate and investment banking. With $379 billion in assets (as of October 31, 2006), Scotiabank trades on the Toronto (BNS) and New York (BNS) Stock Exchanges. For more information please visit http://www.scotiabank.com/ . 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 completion of the sale of shares of common stock to Scotiabank, First BanCorp's ability to return to compliance with the reporting requirements under the Securities Exchange Act of 1934, the ability to settle the shareholder litigation and SEC inquiry relating to First BanCorp's recent restatement of its financial statements, 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 consent orders on the Corporation's future operations and results, the Corporation's ability to continue to implement the terms of the consent orders, FirstBank's ability to issue brokered certificates of deposit, its liquidity, the impact of the Corporation's restated and more current financial statements on customers and lenders, the ability to fund operations, changes in the interest rate environment, including the impact on the Corporation's financial statements for periods prior to April 3, 2006 of changes in the value of interest rate swaps resulting from changes in interest rates, 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. DATASOURCE: First BanCorp CONTACT: Alan Cohen, Senior Vice President, Marketing and Public Relations, +1-787-729-8256, or Web site: http://www.firstbankpr.com/ http://www.scotiabank.com/

Copyright