First BanCorp (FBP.N) said private equity firm Oaktree Capital Management agreed to invest about $175.5 million, making it the second private equity firm to invest in the bank in less than two months, sending the company's shares up 13 percent.
Private equity firm Thomas H Lee Partners had agreed to invest $180 million in the Puerto Rico-based bank in May.
Oaktree will buy shares of First BanCorp, the holding company for FirstBank, at $3.50 per share, a 3.3 percent discount to the stock's Monday closing.
The private equity firm will own a quarter of the bank, once the $425 million preferred shares held by the U.S. Treasury are converted into common stock.
The lender said the transaction, which gives Oaktree the right to a board seat, is contingent on it raising a minimum of $500 million, but not more than $550 million.
First BanCorp has also entered into agreements with institutional investors and other private equity firms for the issuance of around $164 million of the company's stock, which, together with the Thomas H Lee and Oaktree investments, total $515 million in commitments, the company said in a statement.
In June last year, First BanCorp said it would raise $500 million in equity after banking regulators asked it to boost its capital ratios.
The bank had previously announced that it will also begin a $35 million rights offering, giving existing shareholders the right to purchase common stock at $3.50 per share.
The $35 million raised through the rights offering would count toward the $500-$550 million capital raise.
First BanCorp has 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.
Shares of First BanCorp were trading up 13 percent at $4.10 in early trade on Tuesday on the New York Stock Exchange.
(Reporting by Tanya Agrawal in Bangalore; Editing by Sriraj Kalluvila)