UPDATE 1-First BanCorp says court OKs $74.25 mln settlement

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Aug 6 (Reuters) - First BanCorp (FBP.N) said a U.S. federal court has issued a preliminary order, approving the settlement of a shareholder class-action lawsuit for $74.25 million.

The bank holding company said the payment would not impact its 2007 earnings as it had previously set aside the amount for the settlement.

The lawsuit filed in 2005 had accused the company of inflating its stock price by accounting improperly for mortgage transactions.

The lawsuit came after First Bancorp announced an internal review of its accounting for mortgage-related transactions.

In a statement, First Bancorp said the final order of the settlement has been set for Oct. 15.

The company said it intends to comply with the $61 million payment requirement within the timeframe set forth in the terms of the settlement.

The remaining amount will be paid before Dec. 31, it added.

First BanCorp said it expects to seek recovery of about $14.75 million from its insurance companies and former executives.

Shares of the company were trading down nearly 4 percent at $8.31 in morning trade on the Nasdaq.

(Reporting by Deepti Chaudhary in Bangalore)

((Editing by Gopakumar Warrier; Reuters Messaging: deepti.chaudhary.reuters.com@reuters.net; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800)) Keywords: FIRSTBANCORP LAWSUIT/

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