NEW YORK (Standard & Poor's) Nov. 2, 2005--Standard & Poor's Rating Services said today that its concerns that FirstBank Puerto Rico (FirstBank; NYSE: BBB-/Watch Neg/--) will breach the regulatory "well-capitalized" threshold have lessened, even if the bank is required to reclassify residential mortgage loans as commercial loans secured by mortgages. If further issues arise from the formal internal and SEC investigations currently underway at FirstBank that would adversely affect capital, funding, or profitability, the rating would most likely be lowered. The continuation of the CreditWatch listing reflects FirstBank's overdependence on wholesale funding sources like brokered CDs, uncertainty regarding the ultimate findings in the internal and SEC accounting review, and the associated financial impact to its GAAP and regulatory capital measures.
