8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): September 1, 2020

First BanCorp.

(Exact Name of Registrant as Specified in its Charter)

Puerto Rico	001-14793	66-0561882
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

1519 Ponce De Leon Ave. P.O. Box 9146 San Juan, Puerto Rico	00908-0146
(Address of Principal Executive Offices)	(Zip Code)

(787) 729-8200

(Registrant’s Telephone Number, including Area Code)

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock ($0.10 par value)	FBP	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.01 Completion of Acquisition or Disposition of Assets.

On September 1, 2020, First BanCorp. (the “Corporation”), the bank holding company of FirstBank Puerto Rico (“FirstBank”), completed its previously announced acquisition of Santander BanCorp (“Santander BanCorp”) and its wholly-owned subsidiary Banco Santander Puerto Rico (“Banco Santander”) (the “Acquisition”) pursuant to that certain Stock Purchase Agreement, dated as of October 21, 2019, by and among FirstBank, Santander Holdings USA, Inc. (“Seller”) and, solely for purposes of Article IV, Section 5.03 and Article X therein, the Corporation (the “Purchase Agreement”).  In consideration for the acquisition of Santander BanCorp and Banco Santander, the Corporation paid Seller cash in an amount of approximately (i) $394.8 million base purchase price for 117.5% of Banco Santander’s core tangible common equity, comprised of a $58.8 million premium on $336 million of core tangible common equity, plus (ii) $882.8 million for Santander BanCorp’s excess capital (paid at par), which represents the estimated closing payment pursuant to the terms of the Purchase Agreement. The merger transactions were described in the Purchase Agreement filed with the U.S. Securities and Exchange Commission (the “SEC”) on October 21, 2019.

The foregoing description of the Purchase Agreement and related transactions does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement, which is filed as Exhibit 2.1 to this Form 8-K, and is incorporated into this report by reference. Except for its status as a contractual document that establishes and governs the legal relations between the parties with respect to the transactions described above, the Purchase Agreement is not intended to be a source of factual, business or operational information about the parties. Representations and warranties may be used as a tool to allocate risks between the parties to the Purchase Agreement, including where the parties do not have complete knowledge of all facts, instead of establishing these matters as facts. Furthermore, they may be subject to standards of materiality applicable to the contracting parties, which may differ from those applicable to investors. The assertions embodied in such representations and warranties are qualified by information contained in disclosure schedules that the parties exchanged in connection with signing the Purchase Agreement.

Item 8.01 Other Events.

On September 1, 2020, the Corporation issued a press release announcing the completion of its previously announced acquisition of Santander BanCorp and Banco Santander.

A copy of the press release is being furnished as Exhibit 99.1 to this report. The information in Items 8.01 and Exhibit 99.1 of this report shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of Section 18 of the Exchange Act, or incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d)            Exhibits. The following exhibits are filed with this report:

Exhibit No.	Description
2.1	Stock Purchase Agreement, dated October 21, 2019, among Seller, FirstBank, and, solely for the purposes set forth therein, the Corporation (incorporated by reference to Exhibit 2.1 to the Form 8-K filed by the Corporation on October 21, 2019).
99.1	Press Release, issued by the Corporation, September 1, 2020.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: September 1, 2020	FIRST BANCORP.
	By:	/s/ Lawrence Odell
	Name:	Lawrence Odell
	Title:	Executive Vice President and General Counsel

EX-99.1

Exhibit 99.1

First BanCorp. Completes Acquisition of Banco Santander Puerto Rico

SAN JUAN, Puerto Rico--(BUSINESS WIRE)--September 1, 2020--First BanCorp. (the “Corporation”) (NYSE: FBP), the bank holding company for FirstBank Puerto Rico (“FirstBank”), announced today the completion of its previously announced acquisition of Santander BanCorp (“Santander BanCorp”) and its wholly-owned subsidiary Banco Santander Puerto Rico (“Banco Santander”). In connection with the acquisition, Santander BanCorp and Banco Santander will be merged into FirstBank, with FirstBank being the surviving entity. As of July 31, 2020, Banco Santander had approximately $5.5 billion in assets, $2.7 billion in total loans and $4.2 billion in deposits. In consideration for the acquisition of Santander BanCorp and Banco Santander, the Corporation paid Seller cash in an amount of approximately (i) $394.8 million base purchase price for 117.5% of Banco Santander’s core tangible common equity, comprised of a $58.8 million premium on $336 million of core tangible common equity, plus (ii) $882.8 million for Santander’s BanCorp excess capital (paid at par), which represents the estimated closing payment pursuant to the terms of the Purchase Agreement.

Aurelio Alemán, President and Chief Executive Officer of the Corporation, commented: “Today we completed the acquisition of Banco Santander announced back in October 2019. The completion of this transaction marks a significant milestone in our journey. I want to acknowledge the hard work and dedication of both teams who have worked diligently on integration planning and execution throughout the operational disruption caused by the pandemic.

We welcome the Banco Santander employees and customers and look forward to exceeding their expectations with an expanded branch network and service channels and enhanced technological offerings. This transaction significantly improves our scale, talent strength and competitiveness in retail, commercial and business banking. Our existing customers will also benefit from this expanded reach. Furthermore, we have and will continue to make considerable investments in technological innovations and talent development to enhance our portfolio of product offerings and ability to service our customers.

The integration process will be carried out gradually to minimize the impact on FirstBank and Banco Santander customers, and we expect to complete the integration process during the second quarter of 2021. In the meantime, each of the FirstBank and Banco Santander customers prior to the merger will continue to conduct their banking business through their existing relationship branches and corresponding bank platforms. We expect that the combined strength of our franchises will expand our earnings power and capital ratios, which already exceed the well-capitalized regulatory guidelines. This is a new chapter for First BanCorp and we are delighted to make evident to our shareholders, customers and employees what we are capable of accomplishing together.”

This transaction further cements the Corporation’s prominent position in the island's financial services industry and significantly expands our ability to serve our customers by providing them with:

• A network of 73 branches throughout Puerto Rico, significantly expanding our presence in San Juan, Bayamón, Caguas, and Guaynabo, as well as in the western and southern regions of the island. Over the next few months, we will be working on integrating the branch systems so that we can serve customers of both banks in all branches;
• More than 445 ATMs throughout Puerto Rico. Moreover, both FirstBank and Banco Santander customers will be able to use both FirstBank and Banco Santander ATMs free of charge. In addition, upon the completion of the system integration process, customers will have access to more than 100 ATMs with remote deposit capacity;
• An extensive portfolio of financial products and services, including innovative digital banking alternatives, to conveniently address the needs of our individual and commercial customers; and
• Enhanced resources, professional knowhow, and talents focused on helping our customers achieve all their goals and dreams.

About First BanCorp.

First BanCorp. is the parent corporation of FirstBank Puerto Rico, a Puerto Rico-chartered commercial bank with operations in Puerto Rico, the U.S. and British Virgin Islands and Florida, and of FirstBank Insurance Agency, LLC. Among the subsidiaries of FirstBank Puerto Rico are First Federal Finance Limited Liability Company and First Express, Inc., both small loan companies. First BanCorp’s shares of common stock trade on the New York Stock Exchange under the symbol “FBP.”

Safe Harbor

This press release may contain “forward-looking statements” concerning the Corporation. The words or phrases “expect,” “anticipate,” “intend,” “look forward,” “should,” “would,” “believes” and similar expressions are meant to identify “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created by such sections. Such forward-looking statements are subject to known and unknown risks, uncertainties and contingencies that may cause actual results to differ materially from the expectations, intentions, beliefs, plans, estimates or predictions of the future expressed or implied by such forward-looking statements. These risks, uncertainties and contingencies include, but are not limited to the factors described in the Corporation’s Annual Report on Form 10-K, in its Quarterly Reports on Form 10-Q and in other filings with the SEC. 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, except as required by the federal securities laws.

Contacts

First BanCorp.
John B. Pelling III
Investor Relations Officer
787-729-8003
john.pelling@firstbankpr.com

XML

Document and Entity Information	Sep. 01, 2020
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Sep. 01, 2020
Entity Registrant Name	First BanCorp.
Entity Incorporation, State or Country Code	PR
Entity File Number	001-14793
Entity Tax Identification Number	66-0561882
Entity Address, Address Line One	1519 Ponce De Leon Ave.
Entity Address, Address Line Two	P.O. Box 9146
Entity Address, City or Town	San Juan
Entity Address, Country	PR
Entity Address, Postal Zip Code	00908-0146
City Area Code	787
Local Phone Number	729-8200
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0001057706
Title of 12(b) Security	Common Stock ($0.10 par value)
Trading Symbol	FBP
Security Exchange Name	NYSE