1057706--2/29/2008--FIRST_BANCORP

related topics

{loan, real, estate}

{condition, economic, financial}

{capital, credit, financial}

{tax, income, asset}

{investment, property, distribution}

{regulation, government, change}

Downgrades in the Corporation s credit ratings could potentially increase the cost of borrowing funds Fluctuations in interest rates may impact the Corporation s results of operations Increases in interest rates may reduce net interest income Increases in interest rates may reduce the value of holdings of securities Increases in interest rates may reduce demand for mortgage and other loans Decreases in interest rates may increase the exercise of embedded calls in the investment securities portfolio Decreases in interest rates may reduce net interest income due to the current unprecedented re-pricing mismatch of assets and liabilities tied to short-term interest rates (Basis Risk) The Corporation is subject to default risk on loans, which may adversely affect its results The Corporation is subject to greater credit risk with respect to its portfolio of construction and commercial loans Changes in collateral valuation for properties located in stagnant or distressed economies may require increased reserves The Corporation s business concentration in Puerto Rico imposes risks First BanCorp s credit quality may be adversely affected by Puerto Rico s current economic condition Rating downgrades on the Government of Puerto Rico s debt obligations may affect the Corporation s credit exposure A prolonged economic slowdown or the decline in the real estate market in the U.S. mainland could harm the results of operations Changes in regulations and legislation could have a financial impact on First BanCorp

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1057706--2/29/2008--FIRST_BANCORP_/PR/