On May 12, 2009, Standard&Poor's Ratings Services revised its outlook on FirstBank Puerto Rico to negative from stable. At the same time, Standard&Poor's affirmed its 'BB+' long-term counterparty credit rating on FirstBank Puerto Rico. The negative outlook reflects our increased concerns over the rapid deterioration in credit quality showing up in elevated nonperforming assets (NPAs) and net charge-offs (NCOs); this points to higher reserves in future. We expect that rising credit costs will continue to pressure operating earnings growth and capital ratios. We are factoring in material additions to nonperforming levels (NPAs including delinquencies/total assets stood at 7.14% at March 31, 2009 while NCOs were 1.18%) this year and next, which also are currently higher than
