UPDATE 1-First BanCorp posts surprise profit after six straight losses

July 31 (Reuters) - First BanCorp posted a surprise second-quarter profit, after six quarters of losses, as the Puerto Rican lender set aside less money to cover bad loans, sending its shares up as much as 5 percent.

Bad loans have plagued bank balance sheets in Puerto Rico, leading regulators to take over three banks in the last two years. The island still has one of the highest unemployment rates in the Unites States as the downturn hit its major industries, manufacturing and tourism.

The bank posted a profit of $9.4 million, or 5 cents per share, for the second quarter, from a loss of $14.9 million, or $1.04 per share, a year earlier.

Analysts on average had expected the lender to post a loss of 2 cents, excluding items, according to Thomson Reuters I/B/E/S.

Provision for bad loans more than halved to $24.9 million.

"Our improved performance this quarter reflects lower estimated credit losses on the commercial and construction loan portfolios and our focus on more profitable and diversified banking activities," Chief Executive Aurelio Alemán said in a statement.

The holding company for FirstBank Puerto Rico had been battered by a decline in value of residential and commercial real estate properties in Florida and Puerto Rico in the wake of the financial crisis.

The lender has been bolstering its lending services. In May, it said it would re-enter the credit card business through a portfolio buy.

First BanCorp sold its shares to private equity firms OakTree Capital and Thomas H Lee Partners last year to boost its capital cushion.

Shares of First BanCorp were up slightly at $3.69 in early trade on the New York Stock Exchange. They had touched a high of $3.85 earlier in the session.