First BanCorp in P.R. sells block of nonperforming loans

First BanCorp in San Juan, Puerto Rico, sold $52.5 million of nonperforming mortgages.

The $21.4 billion-asset company disclosed in a quarterly regulatory filing that it received an unsolicited offer to buy the loans, along with $2 million of related servicing rights.

First BanCorp said it received $31.5 million, or 58% of book value before reserves, for the loans and servicing rights. About $20.9 million of reserves are already applied to the assets sold, so the company said it realized an additional loss of $2.1 million following the sale. 

 “The corporation's primary goal with respect to this transaction is to accelerate the disposition of nonperforming assets,” the filing said. 

The sale lowered the amount of nonperforming mortgages at First BanCorp by 43%. 

First BanCorp said its ratio of nonperforming loans to total loans held for investment would have decreased from 1.6% to 1.15% had the sale taken place during the second quarter.