EX-10.2






UNITED STATES OF AMERICA

BEFORE THE

BOARD OF GOBERNORS OF THE FEDERAL RESERVE SYSTEM

WASHINGTON, DC




Written Agreement by and between



Docket No. 121-WA/RB-HC



FIRST BANCORP


San Juan, Puerto Rico



and



FEDERAL RESERVE BANK OF


NEW YORK



WHEREAS, First BanCorp, San Juan, Puerto Rico (“FB”), a registered bank holding company, owns
and controls FirstBank, Puerto Rico, San Juan, Puerto Rico (the “Bank”), a state chartered
nonmember bank, and various nonbank subsidiaries;



WHEREAS, it is the common goal of FB and the Federal Reserve Bank of New York (the “Reserve
Bank”) to maintain the financial soundness of FB so that FB may serve as a source of strength to
the Bank;



WHEREAS, FB and the Reserve Bank have mutually agreed to enter into this Written Agreement
(the “Agreement”); and



WHEREAS, on June 3, 2010, the board of directors of FB at a duly constituted meeting, adopted
a resolution authorizing and directing Mr. Aurelio Alemán, CEO and President, to enter into this
Agreement of behalf of FB, and consenting to compliance with each and every provision of this
Agreement by FB and its institution-affiliated parties, as defined in sections 3(u) and 8(b)(3) of
the Federal Deposit Insurance Act, as amended (the “FDI Act”) (12 U.S.C. ) § §§1813(u) and
1818(b)(3)).



NOW, THEREFORE, FB and the Reserve bank agree as follows:



Source of Strength




	 	1.	 	The board of directors of FB shall take appropriate steps to fully utilize
FB’s financial and managerial resources, pursuant to section 225.4(a) of Regulation Y
of the Board of Governors of the Federal Reserve System (the “Board of Governors”) (12
C.F.R. §225.4(a)), to serve as a source of strength to the Bank, including, but not
limited to, taking steps to ensure that the Bank complies with the consent order
entered into with the Federal Deposit Insurance Corporation on June 1, 2010 and any
other supervisory action taken by the Bank’s federal or state regulator.





Dividends and Distributions




2. (a) FB shall not declare or pay any dividends without the prior            written
approval of the Reserve Bank and the Director of the Division of Banking Supervision and
Regulation (the “Director”) of the Board of Governors of the Federal Reserve System (the
“Board of Governors”).




(b) FB shall not directly or indirectly take dividends or any other form of
payment representing a reduction in capital from the Bank without the prior written
approval of the Reserve Bank.




(c) FB and its nonbank subsidiaries shall not make any distributions of
interest, principal, or other sums on subordinated debentures or trust preferred
securities without the prior written approval of the Reserve Bank and the Director.




	 	(d)	 	All requests for prior approval shall be received by the
Reserve Bank at least 30 days prior to the proposed dividend declaration date,
proposed distribution on subordinated debentures, and required notice of
deferral on trust preferred securities. All requests shall contain, at a
minimum, current and projected information of FB’s capital, earnings, and cash
flow; the Bank’s capital, asset quality, earnings, and allowance for loan and
lease losses; and identification of the sources of funds for the proposed
payment or distribution. For requests to declare or pay dividends, FB must
also demonstrate that the requested declaration or payment of dividends is
consistent with the Board of Governor’s Policy Statement on the Payment of
Cash Dividends by State Member Banks and Bank Holding Companies, dated
November 14, 1985 (Federal Reserve Regulatory Service, 4-877 at page 4-323).





Debt and Stock Redemption




3. (a) FB and any nonbank subsidiary shall not, directly or            indirectly,
incur, increase, or guarantee any debt without the prior written approval if the
Reserve Bank. All requests for prior written approval shall contain, but not be
limited to, a statement regarding the purpose of the debt, the terms of the debt,
and the planned source(s) for debt repayment, and an analysis of the cash flow
resources available to meet such debt repayment.




	 	(b)	 	FB shall not, directly or indirectly,
purchase or redeem any shares of its stock without the prior written
approval of the Reserve Bank.





Capital Plan




	 	4.	 	Within 30 days of this Agreement, FB shall submit to the Reserve Bank an
acceptable written plan to maintain sufficient capital at FB on a consolidated basis.
The plan shall, at a minimum, address, consider, and include:






	 	(a)	 	The consolidated organization’s and the
Bank’s current and future capital requirements, including
compliance with the Capital Adequacy Guidelines for Bank Holding
Companies: Risk-Based Measure and Tier 1 Leverage Measure,
Appendices A and D of regulation Y of the Board of Governors (12
C.F.R. Part 225, App. A and D) and the applicable capital adequacy
guidelines for the Bank issued by the Bank’s federal regulator;






	 	(b)	 	The adequacy of the Bank’s capital,
taking into account the volume of classified credits,
concentrations of credit, allowance for loan and lease losses,
current and projected asset growth, and projected retained
earnings;






	 	(c)	 	The source and timing of additional
funds necessary to fulfill the consolidated organization’s and the
Bank’s future capital requirements;






	 	(d)	 	Supervisory requests for additional
capital at the Bank or the requirements of any supervisory action
imposed on the Bank by its federal regulators; and






	 	(e)	 	The requirements of section 225.4(a) of
Regulation Y of the Board of Governors (12 C.F.R. § 225.4(a)) that
FB serve as a source of strength to the Bank.






	 	5.	 	FB shall notify the Reserve Bank, in writing, no more than 30 days after the
end of any quarter in which any of FB’s capital ratios fall below the approved plan’s
minimum ratios. Together with the notification, FB shall submit an acceptable written
plan that details the steps that FB will take to increase FB’s capital ratios to or
above the approved plan’s minimums.





Compliance with Laws and Regulations




	 	6.	 	(a) In appointing any new director or senior executive officer, or changing
the responsibilities of any senior executive officer so that the officer would assume
a different senior executive officer position, FB shall comply with the notice
provisions of section 32 of the FDI Act (12 U.S.C. § 1831i) and Subpart H of
Regulation Y of the Board of Governors (12 C.F.R. §§225.71 et seq.).






	 	(b)	 	FB shall comply with the restrictions on
indemnification and severance payments of section 18(k) of the FDI Act
(12 U.S.C. § 1828(k)) and Part 359 of the Federal Deposit Insurance
Corporation’s regulations (12 C.F.R. Part 359).





Progress Reports




	 	7.	 	Within 45 days after the end of each calendar quarter following the date of
this Agreement, the board of directors shall submit to the Reserve Bank written
progress reports detailing the form and manner of all actions taken to secure
compliance with the provisions of this Agreement and the results thereof, and a parent
company only balance sheet, income statement, and, as applicable, report of changes in
stockholders’ equity.





Approval and Implementation of Plans




8. (a) FB shall submit a written capital plan that is acceptable to the Reserve Bank
within the applicable time period set forth in paragraph 4 of this Agreement.




(b) Within 30 days of approval by the Reserve Bank, FB shall adopt the
approved capital plan. Upon adoption, FB shall promptly implement the approved
plan, and thereafter fully comply with it.




(c) During the term of this Agreement, the approved capital plan shall not be
amended or rescinded without the prior written approval of the Reserve Bank.




9. All communications regarding this Agreement shall be sent to:




Mr. Meinrad Danzer


Examining Officer


Regional Team Leader


Federal Reserve Bank of New York


33 Liberty Street, Attention 33 ML, 20th Floor


New York, New York 10045-0001




	 	(a)	 	Mr. Aurelio Alemán






President and Chief Executive Officer


First BanCorp


1519 Ponce de León Avenue


San Juan, Puerto Rico 00908-0146



Miscellaneous




	 	10.	 	Notwithstanding any provision of this Agreement, the Reserve Bank may, in its
sole discretion, grant written extensions of time to FB to comply with any provision
of this Agreement.






	 	11.	 	The provisions of this Agreement shall be binding upon FB and its
institution-affiliated parties, in their capacities as such, and their successors and
assigns.






	 	12.	 	Each provision of this Agreement shall remain effective and enforceable until
stayed, modified, terminated, or suspended in writing by the Reserve Bank.






	 	13.	 	The provisions of this Agreement shall not bar, estop, or otherwise prevent
the Board of Governors, the Reserve Bank, or any other federal or state agency from
taking any other action affecting FB, the Bank, any nonbank subsidiary of FB, or any
of their current or former institution-affiliated parties and their successors and
assigns.






	 	 	 	14.




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Pursuant to section 50 of the FDI Act (12 U.S.C. § 1831 aa), this Agreement is
enforceable by the Board of Governors under section 8 of the FDI Act (12 U.S.C.
§1818).



IN WITNESS WHEREOF, the parties have caused this agreement to be executed as of the 3rd
day of June, 2010.



FIRST BANCORP FEDERAL RESERVE BAK




OF NEW YORK



	 	 	 
	By: /s/ Aurelio Alemán       

	 	By: /s/ John J. Ruocco      
	 

	Aurelio Alemán

President and Chief Executive

	 	John J. Ruocco

Assistant Vice President






Officer




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