Commonwealth of Puerto Rico | 001-12647 | 66-0538893 | ||
(State or other Jurisdiction of Incorporation) |
(Commission File No.) | (I.R.S. Employer Identification No.) |
Oriental Center | ||
Professional Offices Park | ||
997 San Roberto Street, 10th Floor | ||
San Juan, Puerto Rico | 00926 | |
(Address of Principal Executive Offices) | (Zip Code) |
Item 2.02. Results of Operations and Financial Condition. | ||||||||
Item 9.01. Financial Statements and Exhibits. | ||||||||
SIGNATURES | ||||||||
EX-99 |
Exhibit No. | Description of Document | |
99
|
Press release by the Company dated July 21, 2011. |
2
ORIENTAL FINANCIAL GROUP INC. |
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Date: July 22, 2011 | By: | /s/ Norberto González | ||
Norberto González | ||||
Executive Vice President and Chief Financial Officer | ||||
| Income available to common shareholders increased to $25.3 million, compared to a loss of $4.2 million in the year ago quarter and a profit of $1.9 million in the March 2011 quarter. | |
| Income per common share increased to $0.56, compared to a loss of $0.13 in the year ago quarter and income of $0.04 in the March 2011 quarter. | |
| There were approximately 45.1 million average common shares outstanding in the quarter ended June 30, 2011, up 36.6% from the year ago quarter due to the 2010 equity offerings, and 2.3% below the March 2011 quarter as a result of share buybacks. | |
| Pre-tax operating income of $18.5 million increased 23.1% from the year ago quarter and 42.0% from the March 2011 quarter. |
| Loan production totaled $116.7 million, up 30.6% from a year ago and 49.6% on a sequential quarter basis. Commercial loan production of $45.6 million increased 125.5% year over year and 174.2% sequentially. | |
| Net interest income was $42.7million, up 15.6% from a year ago and 14.9% on a sequential quarter basis. The increase on a sequential quarter basis primarily reflects a 16.7% increase in interest income on mortgage backed securities, mainly as a result of lower premium amortization based on a slowdown in pre-payments during the quarter. |
| Core retail deposit cost was 1.83%, down 54 basis points from a year ago and down 15 basis points on a sequential quarter basis, primarily due to the maturing of higher-priced retail certificates of deposit. | |
| Book value per common share was $14.91 at June 30, 2011, up 6.6% from a year ago and 4.9% from March 31, 2011. Sequential growth primarily reflects increased retained earnings. |
| $9.1 million gain on the sale of investment securities with a book value of $156.3 million as Oriental took advantage of market opportunities. | |
| $3.6 million in derivative loss from the strategic decision, as previously announced, to sell Orientals remaining swap options, purchase new swaps to manage interest rate exposure, and apply hedge accounting on them. As a result, fluctuations in valuation of the swaps that meet the hedge effectiveness requirements are recorded in Other Comprehensive Income. | |
| $3.0 million tax benefit from the settlement of various tax contingencies. | |
| $1.8 million negative adjustment to interest income from non-covered residential mortgage loans as certain interest receivable accrued in prior years was deemed to be uncollectible. |
| Total interest income increased 5.5%, to $82.2 million, primarily due to mortgage-backed securities. Excluding the previously mentioned adjustment, interest income from non-covered loans remained level, while interest income from covered loans declined, as these loans continue to pay down. | |
| Total interest expense fell 3.1%, to $39.5 million. This reflects both lower cost of deposits (1.89% vs. 1.91%) and of borrowings (2.85% vs. 2.91%). | |
| Provision for non-covered loans remained level at $3.8 million, while no provision for covered loans, net of the shared-loss asset, was deemed necessary. | |
| As a result of the above factors, net interest income after provision for loan and lease losses increased 18.6%, to $38.9 million, and net interest margin expanded to 2.63% from 2.25%. | |
| Assets under management, which generate recurring non-interest income, rose 2.2%, to $4.1 billion at June 30, 2011. | |
| Mortgage banking activities increased 24.3%, to $2.4 million, as production picked up 18.2%, to $56.9 million, and Oriental obtained favorable pricing of mortgages sold into the secondary market. | |
| Non-interest expenses remained level at $30.7 million. |
| Total loans not covered under shared-loss agreements with the FDIC, net, increased 1.9%, to $1.16 billion, primarily due to a 14.6% increase in commercial loans. |
| Investment securities of $4.5 billion remained approximately level. | |
| Approximately 97% of Orientals investment portfolio consists of agency mortgage-backed securities guaranteed or issued by FNMA, FHLMC or GNMA. |
| The allowance of $34.2 million increased 4.6%, rising to 2.85% of total non-covered loans and leases versus 2.78% at March 31, 2011. | |
| Net credit losses of $2.3 million (0.78% of average loans outstanding) decreased 8.2% from the previous quarter. | |
| The increase in non-performing loans primarily reflects the addition of an $8.5 million commercial loan, which is collateralized by an existing, owner-occupied commercial real estate property. |
| On June 29, 2011, Oriental announced completion of its $30 million common stock repurchase program and the adoption of a new program to purchase an additional $70 million in shares in the open market. | |
| Under the $30 million program, initiated in February 2011, Oriental purchased a total of 2,406,303 shares, equal to approximately 5.5% of shares outstanding, at an average price of $12.10 per share. | |
| As part of this program, during the second quarter, Oriental returned $16.7 million to shareholders, buying back 1,377,724 shares, at an average price of $12.08 per share. |
| Oriental continues to maintain regulatory capital ratios well above the requirements for a well-capitalized institution. | |
| At June 30, 2011, the Leverage Capital Ratio was 9.74%, Tier-1 Risk-Based Capital Ratio was 30.40%, and Total Risk-Based Capital Ratio was 31.68%. |
QUARTER ENDED | SIX-MONTH PERIOD ENDED | |||||||||||||||||||||||||||
SUMMARY OF OPERATIONS (Dollars in thousands): | 30-Jun-11 | 30-Jun-10 | % | 31-Mar-11 | 30-Jun-11 | 30-Jun-10 | % | |||||||||||||||||||||
Interest Income: |
||||||||||||||||||||||||||||
Loans |
||||||||||||||||||||||||||||
Loans not covered under shared-loss agreements with the FDIC |
$ | 15,969 | $ | 17,813 | -10.4 | % | $ | 17,841 | $ | 33,808 | $ | 35,450 | -4.6 | % | ||||||||||||||
Loans covered under shared-loss agreements with the FDIC |
13,060 | 11,587 | 12.7 | % | 14,226 | 27,285 | 11,586 | 135.5 | % | |||||||||||||||||||
Mortgage-backed securities |
51,021 | 41,519 | 22.9 | % | 43,738 | 94,759 | 85,113 | 11.3 | % | |||||||||||||||||||
Investment securities |
1,882 | 8,782 | -78.6 | % | 1,855 | 3,738 | 17,845 | -79.1 | % | |||||||||||||||||||
Short term investments |
270 | 143 | 88.8 | % | 250 | 520 | 185 | 181.1 | % | |||||||||||||||||||
Total interest income |
82,202 | 79,844 | 3.0 | % | 77,910 | 160,110 | 150,179 | 6.6 | % | |||||||||||||||||||
Interest Expense: |
||||||||||||||||||||||||||||
Deposits |
11,588 | 11,951 | -3.0 | % | 12,214 | 23,802 | 23,194 | 2.6 | % | |||||||||||||||||||
Securities sold under agreements to repurchase |
23,512 | 25,487 | -7.7 | % | 24,159 | 47,671 | 50,772 | -6.1 | % | |||||||||||||||||||
Advances from FHLB and other borrowings |
3,061 | 3,053 | 0.3 | % | 3,049 | 6,110 | 6,065 | 0.7 | % | |||||||||||||||||||
FDIC-guaranteed term notes |
1,021 | 1,021 | 0.0 | % | 1,021 | 2,042 | 2,042 | 0.0 | % | |||||||||||||||||||
Note payable to the FDIC |
| 1,064 | -100.0 | % | | | 1,064 | -100.0 | % | |||||||||||||||||||
Subordinated capital notes |
308 | 305 | 1.0 | % | 302 | 611 | 603 | 1.3 | % | |||||||||||||||||||
Total interest expense |
39,490 | 42,881 | -7.9 | % | 40,745 | 80,236 | 83,740 | -4.2 | % | |||||||||||||||||||
Net interest income |
42,712 | 36,963 | 15.6 | % | 37,165 | 79,874 | 66,439 | 20.2 | % | |||||||||||||||||||
Provision for non-covered loan and lease losses |
3,800 | 4,100 | -7.3 | % | 3,800 | 7,600 | 8,114 | -6.3 | % | |||||||||||||||||||
Provision for covered loan and lease losses, net |
| | 0.0 | % | 549 | 549 | | 100.0 | % | |||||||||||||||||||
Net interest income after provision for loan and lease losses |
38,912 | 32,863 | 18.4 | % | 32,816 | 71,725 | 58,325 | 23.0 | % | |||||||||||||||||||
Non-Interest Income (Loss): |
||||||||||||||||||||||||||||
Wealth management revenues |
4,572 | 4,625 | -1.1 | % | 4,676 | 9,249 | 8,603 | 7.5 | % | |||||||||||||||||||
Banking service revenues |
3,306 | 3,041 | 8.7 | % | 3,835 | 7,143 | 4,663 | 53.2 | % | |||||||||||||||||||
Mortgage banking activities |
2,435 | 2,339 | 4.1 | % | 1,959 | 4,394 | 4,136 | 6.2 | % | |||||||||||||||||||
Investment banking revenues (losses) |
| 34 | -100.0 | % | 6 | 6 | 34 | -82.4 | % | |||||||||||||||||||
Total banking and wealth management revenues |
10,313 | 10,039 | 2.7 | % | 10,476 | 20,792 | 17,436 | 19.2 | % | |||||||||||||||||||
Total loss on other-than-temporarily impaired securities |
| (1,796 | ) | -100.0 | % | | | (41,386 | ) | -100.0 | % | |||||||||||||||||
Portion of loss on securities recognized in other comprehensive income |
| | 0.0 | % | | | 38,958 | -100.0 | % | |||||||||||||||||||
Other-than-temporary impairments on securities |
| (1,796 | ) | -100.0 | % | | | (2,428 | ) | -100.0 | % | |||||||||||||||||
Accretion of FDIC loss-share indemnification asset |
1,020 | 1,314 | -22.4 | % | 1,211 | 2,231 | 1,314 | 69.8 | % | |||||||||||||||||||
Net gain (loss) on: |
||||||||||||||||||||||||||||
Sales of securities |
9,132 | 11,833 | -22.8 | % | (2 | ) | 9,130 | 23,853 | -61.7 | % | ||||||||||||||||||
Derivatives |
(3,603 | ) | (26,615 | ) | -86.5 | % | (3,968 | ) | (7,571 | ) | (37,251 | ) | -79.7 | % | ||||||||||||||
Trading securities |
(6 | ) | 1 | -700.0 | % | (31 | ) | (37 | ) | (2 | ) | 1750.0 | % | |||||||||||||||
Fair value adjustment on FDIC equity appreciation instrument |
| 909 | -100.0 | % | | | 909 | -100.0 | % | |||||||||||||||||||
Foreclosed real estate |
(3 | ) | (26 | ) | -88.5 | % | (132 | ) | (135 | ) | (143 | ) | -5.6 | % | ||||||||||||||
Other |
7 | 7 | 0.0 | % | (27 | ) | (20 | ) | 17 | -217.6 | % | |||||||||||||||||
Total non-interest income (loss), net |
16,860 | (4,334 | ) | -489.0 | % | 7,527 | 24,390 | 3,705 | 558.3 | % | ||||||||||||||||||
Non-Interest Expenses: |
||||||||||||||||||||||||||||
Compensation and employee benefits |
11,230 | 10,433 | 7.6 | % | 11,688 | 22,918 | 18,683 | 22.7 | % | |||||||||||||||||||
Professional and service fees |
5,750 | 3,920 | 46.7 | % | 5,451 | 11,201 | 6,073 | 84.4 | % | |||||||||||||||||||
Occupancy and equipment |
4,214 | 4,404 | -4.3 | % | 4,405 | 8,619 | 7,998 | 7.8 | % | |||||||||||||||||||
Insurance |
1,646 | 1,733 | -5.0 | % | 1,985 | 3,632 | 3,566 | 1.9 | % | |||||||||||||||||||
Electronic banking charges |
1,155 | 1,112 | 3.9 | % | 1,454 | 2,610 | 1,791 | 45.7 | % | |||||||||||||||||||
Taxes, other than payroll and income taxes |
858 | 1,261 | -32.0 | % | 1,380 | 2,237 | 2,118 | 5.6 | % | |||||||||||||||||||
Advertising, business promotion, and strategic initiatives |
1,508 | 1,364 | 10.6 | % | 1,192 | 2,700 | 2,064 | 30.8 | % | |||||||||||||||||||
Loan servicing and clearing expenses |
1,076 | 793 | 35.7 | % | 1,021 | 2,097 | 1,518 | 38.1 | % | |||||||||||||||||||
Foreclosure and repossession expenses |
761 | 523 | 45.5 | % | 729 | 1,490 | 825 | 80.6 | % | |||||||||||||||||||
Communication |
425 | 735 | -42.2 | % | 397 | 822 | 1,078 | -23.7 | % | |||||||||||||||||||
Directors and investor relations |
339 | 388 | -12.6 | % | 287 | 625 | 703 | -11.1 | % | |||||||||||||||||||
Printing, postage, stationery and supplies |
362 | 292 | 24.0 | % | 282 | 644 | 495 | 30.1 | % | |||||||||||||||||||
Other |
1,372 | 892 | 53.8 | % | 519 | 1,891 | 1,330 | 42.2 | % | |||||||||||||||||||
Total non-interest expenses |
30,696 | 27,850 | 10.2 | % | 30,790 | 61,486 | 48,242 | 27.5 | % | |||||||||||||||||||
Income before income taxes |
25,076 | 679 | 3593.1 | % | 9,553 | 34,629 | 13,788 | 151.2 | % | |||||||||||||||||||
Income tax expense (benefit) |
(1,391 | ) | 34 | -4191.2 | % | 6,472 | 5,081 | 1,206 | 321.3 | % | ||||||||||||||||||
Net income |
26,467 | 645 | 4003.4 | % | 3,081 | 29,548 | 12,582 | 134.8 | % | |||||||||||||||||||
Less: Dividends on preferred stock |
(1,200 | ) | (1,733 | ) | -30.8 | % | (1,201 | ) | (2,402 | ) | (2,934 | ) | -18.1 | % | ||||||||||||||
Less: Allocation of undistributed earnings for participating
preferred shares |
| (3,104 | ) | -100.0 | % | | | (3,104 | ) | -100.0 | % | |||||||||||||||||
Income available (loss) to common shareholders |
$ | 25,267 | $ | (4,192 | ) | -702.7 | % | $ | 1,880 | $ | 7,146 | $ | 6,544 | 314.8 | % | |||||||||||||
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QUARTER ENDED | SIX-MONTH PERIOD ENDED | |||||||||||||||||||||||||||
(Dollars in thousands, except per share data) | 30-Jun-11 | 30-Jun-10 | % | 31-Mar-11 | 30-Jun-11 | 30-Jun-10 | % | |||||||||||||||||||||
PRE-TAX OPERATING INCOME |
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Net interest income |
$ | 42,712 | $ | 36,963 | 15.6 | % | $ | 37,165 | $ | 79,874 | $ | 66,439 | 20.2 | % | ||||||||||||||
Less provision for non-covered loan and lease losses |
(3,800 | ) | (4,100 | ) | -7.3 | % | (3,800 | ) | (7,600 | ) | (8,114 | ) | 6.3 | % | ||||||||||||||
Core non-interest income: |
||||||||||||||||||||||||||||
Wealth management revenues |
4,572 | 4,625 | -1.1 | % | 4,676 | 9,249 | 8,603 | 7.5 | % | |||||||||||||||||||
Banking service revenues |
3,306 | 3,041 | 8.7 | % | 3,835 | 7,143 | 4,663 | 53.2 | % | |||||||||||||||||||
Mortgage banking activities |
2,435 | 2,339 | 4.1 | % | 1,959 | 4,394 | 4,136 | 6.2 | % | |||||||||||||||||||
Investment banking revenues |
| 34 | -100.0 | % | 6 | 6 | 34 | 100.0 | % | |||||||||||||||||||
Total core non-interest income |
10,313 | 10,039 | 2.7 | % | 10,476 | 20,792 | 17,436 | 19.2 | % | |||||||||||||||||||
Less non interest expenses |
(30,696 | ) | (27,850 | ) | 10.2 | % | (30,790 | ) | (61,486 | ) | (48,242 | ) | -27.5 | % | ||||||||||||||
Total Pre-tax operating income |
$ | 18,529 | $ | 15,052 | 23.1 | % | $ | 13,051 | $ | 31,580 | $ | 27,519 | 14.8 | % | ||||||||||||||
INCOME (LOSS) PER COMMON SHARE |
||||||||||||||||||||||||||||
Basic |
$ | 0.56 | $ | (0.13 | ) | -542.4 | % | $ | 0.04 | $ | 0.60 | $ | 0.22 | 168.3 | % | |||||||||||||
Diluted |
$ | 0.56 | $ | (0.13 | ) | -541.5 | % | $ | 0.04 | $ | 0.59 | $ | 0.22 | 167.8 | % | |||||||||||||
COMMON STOCK DATA |
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Average common shares outstanding and equivalents |
45,135 | 33,053 | 36.6 | % | 46,179 | 45,656 | 29,471 | 54.9 | % | |||||||||||||||||||
Cash dividends per share of common stock |
$ | 0.05 | $ | 0.04 | 25.1 | % | $ | 0.05 | $ | 0.10 | $ | 0.08 | 26.8 | % | ||||||||||||||
Cash dividends declared on common shares |
$ | 2,206 | $ | 1,322 | 66.9 | % | $ | 2,269 | $ | 4,475 | $ | 2,644 | 69.2 | % | ||||||||||||||
Pay-out ratio |
8.95 | % | -31.60 | % | -128.3 | % | 122.85 | % | 17.10 | % | 36.11 | % | -52.6 | % | ||||||||||||||
SELECTED FINANCIAL DATA |
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PERFORMANCE RATIOS: |
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Return on average assets |
1.48 | % | 0.03 | % | 4172.5 | % | 0.17 | % | 0.82 | % | 0.37 | % | 122.5 | % | ||||||||||||||
Return on average common equity |
15.36 | % | -4.07 | % | 477.6 | % | 1.15 | % | 8.26 | % | 3.62 | % | 128.2 | % | ||||||||||||||
Equity-to-assets ratio |
10.23 | % | 9.05 | % | 13.0 | % | 9.94 | % | 10.23 | % | 9.05 | % | 13.0 | % | ||||||||||||||
Efficiency ratio |
57.89 | % | 59.25 | % | -2.3 | % | 64.63 | % | 61.08 | % | 57.52 | % | 6.2 | % | ||||||||||||||
Expense ratio |
1.26 | % | 1.04 | % | 20.6 | % | 1.23 | % | 1.24 | % | 0.95 | % | 30.3 | % | ||||||||||||||
TAX EQUIVALENT SPREAD |
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Interest-earning assets |
5.06 | % | 4.67 | % | 8.4 | % | 4.72 | % | 4.89 | % | 4.65 | % | 5.2 | % | ||||||||||||||
Tax equivalent adjustment |
0.70 | % | 1.36 | % | -48.5 | % | 0.69 | % | 0.69 | % | 0.72 | % | -4.2 | % | ||||||||||||||
Interest-earning assets tax equivalent |
5.76 | % | 6.03 | % | -4.5 | % | 5.41 | % | 5.58 | % | 5.37 | % | 3.9 | % | ||||||||||||||
Interest-bearing liabilities |
2.48 | % | 2.54 | % | -2.4 | % | 2.51 | % | 2.50 | % | 2.66 | % | -6.0 | % | ||||||||||||||
Tax equivalent interest rate spread |
3.28 | % | 3.49 | % | -6.0 | % | 2.90 | % | 3.08 | % | 2.71 | % | 13.7 | % | ||||||||||||||
Tax equivalent interest rate margin |
3.33 | % | 3.52 | % | -5.4 | % | 2.94 | % | 3.13 | % | 2.78 | % | 12.6 | % | ||||||||||||||
NORMAL SPREAD |
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Investments |
4.49 | % | 3.90 | % | 15.1 | % | 3.80 | % | 4.14 | % | 4.09 | % | 1.2 | % | ||||||||||||||
Loans |
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Loans not covered under shared-loss agreements with the FDIC |
5.42 | % | 6.17 | % | -12.2 | % | 6.11 | % | 5.75 | % | 6.15 | % | -6.5 | % | ||||||||||||||
Loans covered under shared-loss agreements with the FDIC |
9.12 | % | 8.89 | % | 2.6 | % | 9.30 | % | 9.21 | % | 8.89 | % | 3.6 | % | ||||||||||||||
6.63 | % | 7.02 | % | -5.6 | % | 7.20 | % | 6.91 | % | 6.66 | % | 3.8 | % | |||||||||||||||
Interest-earning assets |
5.06 | % | 4.67 | % | 8.4 | % | 4.72 | % | 4.89 | % | 4.65 | % | 5.2 | % | ||||||||||||||
Deposits |
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Retail deposits |
1.83 | % | 2.37 | % | -22.78 | % | 1.98 | % | 1.91 | % | 2.36 | % | -19.07 | % | ||||||||||||||
Wholesale deposits |
2.17 | % | 1.26 | % | 72.22 | % | 1.61 | % | 1.87 | % | 2.04 | % | -8.33 | % | ||||||||||||||
1.89 | % | 2.08 | % | -9.13 | % | 1.91 | % | 1.90 | % | 2.29 | % | -17.03 | % | |||||||||||||||
Borrowings |
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Securities sold under agreements to repurchase |
2.72 | % | 2.86 | % | -4.9 | % | 2.79 | % | 2.75 | % | 2.84 | % | -3.2 | % | ||||||||||||||
Advances from FHLB and other borrowings |
3.84 | % | 3.70 | % | 3.8 | % | 3.79 | % | 3.83 | % | 3.70 | % | 3.5 | % | ||||||||||||||
FDIC-guaranteed term notes |
3.88 | % | 3.88 | % | 0.0 | % | 3.86 | % | 3.87 | % | 3.87 | % | 0.0 | % | ||||||||||||||
Purchase money note issued to the FDIC |
| 1.01 | % | | | | 1.01 | % | | |||||||||||||||||||
Subordinated capital notes |
3.41 | % | 3.38 | % | 0.9 | % | 3.35 | % | 3.39 | % | 3.34 | % | 1.5 | % | ||||||||||||||
2.85 | % | 2.77 | % | 2.9 | % | 2.91 | % | 2.88 | % | 2.84 | % | 1.4 | % | |||||||||||||||
Interest-bearing liabilities |
2.48 | % | 2.54 | % | -2.4 | % | 2.51 | % | 2.50 | % | 2.66 | % | -6.0 | % | ||||||||||||||
Interest rate spread |
2.58 | % | 2.13 | % | 21.1 | % | 2.21 | % | 2.39 | % | 1.99 | % | 20.1 | % | ||||||||||||||
Interest rate margin |
2.63 | % | 2.16 | % | 21.8 | % | 2.25 | % | 2.44 | % | 2.06 | % | 18.4 | % | ||||||||||||||
AVERAGE BALANCES |
||||||||||||||||||||||||||||
Investments |
$ | 4,741,578 | $ | 5,169,087 | -8.3 | % | $ | 4,821,029 | $ | 4,781,056 | $ | 5,045,001 | -5.2 | % | ||||||||||||||
Loans |
1,751,074 | 1,675,227 | 4.5 | % | 1,780,341 | 1,767,620 | 1,412,676 | 25.1 | % | |||||||||||||||||||
Interest-earning assets |
$ | 6,492,652 | $ | 6,844,314 | -5.1 | % | $ | 6,601,370 | $ | 6,548,676 | $ | 6,457,678 | 1.4 | % | ||||||||||||||
Deposits |
$ | 2,446,652 | $ | 2,298,265 | 6.5 | % | $ | 2,560,501 | $ | 2,503,209 | $ | 2,029,539 | 23.3 | % | ||||||||||||||
Borrowings |
3,922,568 | 4,461,755 | -12.1 | % | 3,925,939 | 3,923,244 | 4,258,742 | -7.9 | % | |||||||||||||||||||
Interest-bearing liabilities |
$ | 6,369,220 | $ | 6,760,020 | -5.8 | % | $ | 6,486,440 | $ | 6,426,453 | $ | 6,288,282 | 2.2 | % | ||||||||||||||
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AS OF | ||||||||||||||||||||
(Dollars in thousands) | 30-Jun-11 | 30-Jun-10 | % | 31-Mar-11 | 31-Dec-10 | |||||||||||||||
BALANCE SHEET |
||||||||||||||||||||
Cash and cash equivalents |
$ | 281,029 | $ | 472,635 | -40.6 | % | $ | 317,411 | $ | 448,946 | ||||||||||
Investments: |
||||||||||||||||||||
Trading securities |
864 | 56 | 1442.9 | % | 1,444 | 1,330 | ||||||||||||||
Investment securities available-for-sale, at fair value, with amortized cost of $3,529,671
(June 30, 2010 - $4,913,939, March 31, 2011 - $3,562,749, December 31, 2010 - $3,661,146): |
||||||||||||||||||||
FNMA and FHLMC certificates |
3,106,006 | 3,647,734 | -14.9 | % | 3,187,292 | 3,282,190 | ||||||||||||||
Obligations of US Government sponsored agencies |
| 603,735 | -100.0 | % | | 3,000 | ||||||||||||||
Non-agency collateralized mortgage obligations |
| 71,805 | -100.0 | % | | | ||||||||||||||
CMOs issued by US Government sponsored agencies |
246,663 | 204,920 | 20.4 | % | 160,508 | 177,804 | ||||||||||||||
GNMA certificates |
98,892 | 303,637 | -67.4 | % | 117,710 | 127,714 | ||||||||||||||
Structured credit investments |
45,713 | 41,606 | 9.9 | % | 45,162 | 41,693 | ||||||||||||||
Obligations of Puerto Rico Government and political subdivisions |
77,703 | 68,091 | 14.1 | % | 77,258 | 67,663 | ||||||||||||||
Other debt securities |
6,110 | | 100.0 | % | | | ||||||||||||||
Total investment securities available-for-sale |
3,581,087 | 4,941,528 | -27.5 | % | 3,587,930 | 3,700,064 | ||||||||||||||
FNMA and FHLMC certificates held-to-maturity, at amortized cost, with fair value
of $858,226 (March 31, 2011 - $855,816, December 31, 2010 - $675,721) |
863,779 | | 100.0 | % | 875,494 | 689,917 | ||||||||||||||
Federal Home Loan Bank (FHLB) stock, at cost |
23,779 | 22,496 | 5.7 | % | 22,496 | 22,496 | ||||||||||||||
Other investments |
150 | 150 | 0.0 | % | 150 | 150 | ||||||||||||||
Total investments |
4,469,659 | 4,964,230 | -10.0 | % | 4,487,514 | 4,413,957 | ||||||||||||||
Securities sold but not yet delivered |
| 1,490 | -100.0 | % | | | ||||||||||||||
Loans: |
||||||||||||||||||||
Loans not covered under shared-loss agreements with the FDIC: |
||||||||||||||||||||
Mortgage |
849,843 | 900,356 | -5.6 | % | 861,602 | 872,482 | ||||||||||||||
Commercial |
264,962 | 208,102 | 27.3 | % | 231,288 | 234,992 | ||||||||||||||
Leasing |
17,104 | 1,451 | 1078.8 | % | 13,763 | 10,257 | ||||||||||||||
Consumer |
37,560 | 27,642 | 35.9 | % | 38,818 | 35,942 | ||||||||||||||
Total loans receivable not covered under shared-loss agreements with the FDIC, gross |
1,169,469 | 1,137,551 | 2.8 | % | 1,145,471 | 1,153,673 | ||||||||||||||
Less: Deferred loan fees, net |
(4,780 | ) | (3,590 | ) | 33.1 | % | (4,390 | ) | (4,354 | ) | ||||||||||
Total loans receivable not covered under shared-loss agreements with the FDIC |
1,164,689 | 1,133,961 | 2.7 | % | 1,141,081 | 1,149,319 | ||||||||||||||
Allowance for loan and lease losses on non-covered loans |
(34,229 | ) | (28,002 | ) | 22.2 | % | (32,727 | ) | (31,430 | ) | ||||||||||
Loans receivable, net |
1,130,460 | 1,105,959 | 2.2 | % | 1,108,354 | 1,117,889 | ||||||||||||||
Mortgage loans held for sale |
34,246 | 27,519 | 24.4 | % | 34,216 | 33,979 | ||||||||||||||
Total loans not covered under shared-loss agreements with the FDIC, net |
1,164,706 | 1,133,478 | 2.8 | % | 1,142,570 | 1,151,868 | ||||||||||||||
Loans covered under shared-loss agreements with the FDIC: |
||||||||||||||||||||
Loans secured by 1-4 family residential properties |
160,362 | 178,097 | -10.0 | % | 161,145 | 166,865 | ||||||||||||||
Construction and development secured by 1-4 family residential properties |
14,688 | 19,048 | -22.9 | % | 16,516 | 17,253 | ||||||||||||||
Commercial and other construction |
345,349 | 424,794 | -18.7 | % | 378,940 | 388,240 | ||||||||||||||
Leasing |
58,290 | 114,707 | -49.2 | % | 69,630 | 79,093 | ||||||||||||||
Consumer |
16,890 | 21,524 | -21.5 | % | 17,140 | 18,546 | ||||||||||||||
Loans covered under shared-loss agreements with the FDIC |
595,579 | 758,170 | -21.4 | % | 643,371 | 669,997 | ||||||||||||||
Allowance for loan and lease losses on covered loans |
(53,036 | ) | | -100.0 | % | (53,480 | ) | (49,286 | ) | |||||||||||
Loans covered under shared-loss agreements with the FDIC, net |
542,543 | 758,170 | -28.4 | % | 589,891 | 620,711 | ||||||||||||||
Total loans, net |
1,707,249 | 1,891,648 | -9.7 | % | 1,732,461 | 1,772,579 | ||||||||||||||
FDIC shared-loss indemnification asset |
437,434 | 546,527 | -20.0 | % | 436,889 | 471,872 | ||||||||||||||
Foreclosed real estate covered under shared-loss agreements with the FDIC |
16,918 | 15,463 | 9.4 | % | 16,212 | 14,871 | ||||||||||||||
Foreclosed real estate not covered under shared-loss agreements with the FDIC |
12,031 | 12,277 | -2.0 | % | 12,793 | 11,969 | ||||||||||||||
Other repossessed assets covered under shared-loss agreements with the FDIC |
1,893 | 3,091 | -38.8 | % | 2,503 | 2,350 | ||||||||||||||
Core deposit intangible |
1,257 | 1,399 | -10.2 | % | 1,292 | 1,328 | ||||||||||||||
FDIC loss share receivable |
3,199 | 1,099 | 191.1 | % | 2,022 | 1,757 | ||||||||||||||
Accrued interest receivable |
26,430 | 34,633 | -23.7 | % | 28,634 | 28,716 | ||||||||||||||
Deferred tax asset, net |
32,637 | 27,375 | 19.2 | % | 30,786 | 30,732 | ||||||||||||||
Prepaid FDIC Insurance |
13,851 | 19,565 | -29.2 | % | 15,173 | 16,796 | ||||||||||||||
Premises and equipment, net |
23,649 | 18,113 | 30.6 | % | 23,353 | 23,941 | ||||||||||||||
Other prepaid expenses |
11,572 | 9,175 | 26.1 | % | 8,093 | 7,858 | ||||||||||||||
Derivative asset |
90 | | 100.0 | % | 7,203 | 11,023 | ||||||||||||||
Servicing asset |
9,840 | 9,285 | 6.0 | % | 9,963 | 9,695 | ||||||||||||||
Tax credits |
2,604 | 3,432 | -24.1 | % | 3,105 | 3,432 | ||||||||||||||
Debt issuance costs |
1,683 | 2,915 | -42.3 | % | 1,991 | 2,299 | ||||||||||||||
Goodwill |
2,370 | 2,370 | 0.0 | % | 2,370 | 2,370 | ||||||||||||||
Investment in statutory trust |
1,086 | 1,086 | 0.0 | % | 1,086 | 1,086 | ||||||||||||||
Investment in equity indexed options |
11,925 | 4,433 | 169.0 | % | 11,764 | 9,870 | ||||||||||||||
Investment in swap options |
| | 0.0 | % | 7,804 | 7,422 | ||||||||||||||
Accounts receivable and other assets |
14,141 | 13,135 | 7.7 | % | 15,840 | 15,855 | ||||||||||||||
Total assets |
$ | 7,082,547 | $ | 8,055,376 | -12.1 | % | $ | 7,176,262 | $ | 7,310,724 | ||||||||||
3 of 6
AS OF | ||||||||||||||||||||
(Dollars in thousands) | 30-Jun-11 | 30-Jun-10 | % | 31-Mar-11 | 31-Dec-10 | |||||||||||||||
Deposits: |
||||||||||||||||||||
Non-interest bearing demand deposits |
$ | 182,658 | $ | 168,771 | 8.0 | % | $ | 175,679 | $ | 170,705 | ||||||||||
Interest-bearing savings and demand deposits |
1,007,659 | 921,465 | 9.4 | % | 1,012,710 | 1,019,539 | ||||||||||||||
Individual retirement accounts |
356,764 | 340,273 | 4.8 | % | 358,688 | 361,972 | ||||||||||||||
Retail certificates of deposit |
438,532 | 419,655 | 4.5 | % | 490,313 | 477,180 | ||||||||||||||
Total Retail Deposits |
1,985,613 | 1,850,164 | 7.3 | % | 2,037,390 | 2,029,396 | ||||||||||||||
Institutional deposits |
211,032 | 544,146 | -61.2 | % | 240,779 | 280,617 | ||||||||||||||
Brokered Deposits |
188,586 | 144,114 | 30.9 | % | 223,303 | 278,875 | ||||||||||||||
Total deposits |
2,385,231 | 2,538,424 | -6.1 | % | 2,501,472 | 2,588,888 | ||||||||||||||
Borrowings: |
||||||||||||||||||||
Short-term borrowings |
31,812 | 45,200 | -29.6 | % | 32,335 | 42,470 | ||||||||||||||
Securities sold under agreements to repurchase |
3,459,135 | 3,557,087 | -2.8 | % | 3,456,605 | 3,456,781 | ||||||||||||||
Advances from FHLB |
281,747 | 281,735 | 0.0 | % | 281,687 | 281,753 | ||||||||||||||
FDIC-guaranteed term notes |
105,834 | 105,834 | 0.0 | % | 105,112 | 105,834 | ||||||||||||||
Note payable to the FDIC |
| 711,076 | -100.0 | % | | | ||||||||||||||
Subordinated capital notes |
36,083 | 36,083 | 0.0 | % | 36,083 | 36,083 | ||||||||||||||
Total borrowings |
3,914,611 | 4,737,015 | -17.4 | % | 3,911,822 | 3,922,921 | ||||||||||||||
Total interest-bearing liabilities |
6,299,842 | 7,275,439 | -13.4 | % | 6,413,294 | 6,511,809 | ||||||||||||||
Securities purchased but not yet received |
| 533 | -100.0 | % | | | ||||||||||||||
FDIC net settlement payable |
602 | 3,789 | -84.1 | % | 1,911 | 22,954 | ||||||||||||||
Derivative liability |
13,918 | 3,374 | 312.5 | % | | 64 | ||||||||||||||
Accrued expenses and other liabilities |
43,828 | 42,902 | 2.2 | % | 47,929 | 43,566 | ||||||||||||||
Total liabilities |
6,358,190 | 7,326,037 | -13.2 | % | 6,463,134 | 6,578,393 | ||||||||||||||
Preferred stock |
68,000 | 245,289 | -72.3 | % | 68,000 | 68,000 | ||||||||||||||
Additional paid-in capital from beneficial conversion feature |
| 22,711 | -100.0 | % | | | ||||||||||||||
Common stock |
47,808 | 34,481 | 38.7 | % | 47,808 | 47,808 | ||||||||||||||
Additional paid-in capital |
498,556 | 288,749 | 72.7 | % | 498,303 | 498,435 | ||||||||||||||
Legal surplus |
49,414 | 46,655 | 5.9 | % | 46,717 | 46,331 | ||||||||||||||
Retained earnings |
71,091 | 83,212 | -14.6 | % | 50,727 | 51,502 | ||||||||||||||
Treasury stock, at cost |
(45,386 | ) | (17,120 | ) | 165.1 | % | (28,746 | ) | (16,732 | ) | ||||||||||
Accumulated other comprehensive income, net |
34,874 | 25,362 | 37.5 | % | 30,319 | 36,987 | ||||||||||||||
Total stockholders equity |
724,357 | 729,339 | -0.7 | % | 713,128 | 732,331 | ||||||||||||||
Total liabilities and stockholders equity |
$ | 7,082,547 | $ | 8,055,376 | -12.1 | % | $ | 7,176,262 | $ | 7,310,724 | ||||||||||
SELECTED FINANCIAL DATA AT PERIOD-END |
||||||||||||||||||||
Common shares outstanding at end of period |
44,009 | 32,988 | 33.4 | % | 45,375 | 46,349 | ||||||||||||||
Book value per common share |
$ | 14.91 | $ | 13.99 | 6.6 | % | $ | 14.22 | $ | 14.33 | ||||||||||
Tangible book value per common share |
$ | 14.83 | $ | 13.87 | 6.9 | % | $ | 14.14 | $ | 14.25 | ||||||||||
Trust assets managed |
$ | 2,266,770 | $ | 1,859,941 | 21.9 | % | $ | 2,245,158 | $ | 2,175,270 | ||||||||||
Broker-dealer assets gathered |
1,859,580 | 1,347,224 | 38.0 | % | 1,792,264 | 1,695,634 | ||||||||||||||
Total assets managed |
$ | 4,126,350 | $ | 3,207,165 | 28.7 | % | $ | 4,037,422 | $ | 3,870,904 | ||||||||||
4 of 6
AS OF | ||||||||||||||||||||
30-Jun-11 | 30-Jun-10 | % | 31-Mar-11 | 31-Dec-10 | ||||||||||||||||
CAPITAL DATA |
||||||||||||||||||||
Leverage capital ratio |
9.74 | % | 8.95 | % | 8.8 | % | 9.48 | % | 9.50 | % | ||||||||||
Leverage capital ratio required |
4.00 | % | 4.00 | % | 4.00 | % | 4.00 | % | ||||||||||||
Actual tier 1 capital |
$ | 690,453 | $ | 709,503 | -2.7 | % | $ | 687,112 | $ | 699,746 | ||||||||||
Tier 1 capital required |
$ | 283,515 | $ | 317,075 | -10.6 | % | $ | 289,950 | $ | 294,500 | ||||||||||
Excess over regulatory requirement |
$ | 406,938 | $ | 392,428 | 3.7 | % | $ | 397,162 | $ | 405,246 | ||||||||||
Tier 1 risk-based capital ratio |
30.40 | % | 27.13 | % | 12.0 | % | 30.64 | % | 31.05 | % | ||||||||||
Tier 1 risk-based capital ratio required |
4.00 | % | 4.00 | % | 4.00 | % | 4.00 | % | ||||||||||||
Actual tier 1 risk-based capital |
$ | 690,453 | $ | 709,503 | -2.7 | % | $ | 687,112 | $ | 699,746 | ||||||||||
Tier 1 risk-based capital required |
$ | 90,854 | $ | 104,614 | -13.2 | % | $ | 89,696 | $ | 90,141 | ||||||||||
Excess over regulatory requirement |
$ | 599,599 | $ | 604,889 | -0.9 | % | $ | 597,416 | $ | 609,605 | ||||||||||
Risk-weighted assets |
$ | 2,271,341 | $ | 2,615,355 | -13.2 | % | $ | 2,242,407 | $ | 2,253,525 | ||||||||||
Total risk-based capital ratio |
31.68 | % | 28.21 | % | 12.3 | % | 31.92 | % | 32.33 | % | ||||||||||
Total risk-based capital ratio required |
8.00 | % | 8.00 | % | 8.00 | % | 8.00 | % | ||||||||||||
Actual total risk-based capital |
$ | 719,593 | $ | 737,750 | -2.5 | % | $ | 715,868 | $ | 728,572 | ||||||||||
Total risk-based capital required |
$ | 181,707 | $ | 209,228 | -13.2 | % | $ | 179,393 | $ | 180,282 | ||||||||||
Excess over regulatory requirement |
$ | 537,886 | $ | 528,522 | 1.8 | % | $ | 536,475 | $ | 548,290 | ||||||||||
Risk-weighted assets |
$ | 2,271,341 | $ | 2,615,355 | -13.2 | % | $ | 2,242,407 | $ | 2,253,525 | ||||||||||
Tangible common equity to total assets |
9.22 | % | 8.16 | % | 13.0 | % | 8.94 | % | 9.04 | % | ||||||||||
Tangible common equity to total risk-weighted assets |
28.74 | % | 25.14 | % | 14.3 | % | 28.61 | % | 29.32 | % | ||||||||||
Total equity to total assets |
10.23 | % | 9.05 | % | 13.0 | % | 9.94 | % | 10.02 | % | ||||||||||
Total equity to risk-weighted assets |
31.89 | % | 27.89 | % | 14.3 | % | 31.80 | % | 32.50 | % | ||||||||||
Tier 1 common equity to risk-weighted assets |
27.40 | % | 24.53 | % | 11.7 | % | 27.61 | % | 28.03 | % | ||||||||||
Tier 1 common equity |
$ | 622,453 | $ | 641,503 | -3.0 | % | $ | 619,112 | $ | 631,746 |
5 of 6
QUARTER ENDED | SIX-MONTH PERIOD ENDED | |||||||||||||||||||||||||||
(Dollars in thousands) | 30-Jun-11 | 30-Jun-10 | % | 31-Mar-11 | 30-Jun-11 | 30-Jun-10 | % | |||||||||||||||||||||
Loan Production and Purchases Summary: |
||||||||||||||||||||||||||||
Mortgage loans production |
$ | 56,940 | $ | 58,424 | -2.5 | % | $ | 48,166 | $ | 105,106 | $ | 110,734 | -5.1 | % | ||||||||||||||
Mortgage loans purchased |
2,754 | 5,368 | -48.7 | % | 4,641 | 7,395 | 8,867 | -16.6 | % | |||||||||||||||||||
Total mortgage |
59,694 | 63,792 | -6.4 | % | 52,807 | 112,501 | 119,601 | -5.9 | % | |||||||||||||||||||
Commercial |
45,638 | 20,238 | 125.5 | % | 16,643 | 62,281 | 40,308 | 54.5 | % | |||||||||||||||||||
Leasing |
5,669 | 1,794 | 216.0 | % | 4,872 | 10,542 | 1,794 | 487.6 | % | |||||||||||||||||||
Consumer |
5,666 | 3,509 | 61.5 | % | 3,640 | 9,306 | 5,741 | 62.1 | % | |||||||||||||||||||
Total loan production and purchases |
$ | 116,667 | $ | 89,333 | 30.6 | % | $ | 77,962 | $ | 194,630 | $ | 167,444 | 16.2 | % | ||||||||||||||
CREDIT DATA |
||||||||||||||||||||||||||||
Net credit losses, excluding loans covered under shared-loss agreements
with the FDIC: |
||||||||||||||||||||||||||||
Mortgage |
$ | 1,268 | $ | 1,267 | 0.1 | % | $ | 1,775 | $ | 3,044 | $ | 2,363 | 28.8 | % | ||||||||||||||
Commercial |
713 | 379 | 88.1 | % | 272 | 985 | 478 | 106.1 | % | |||||||||||||||||||
Consumer |
286 | 429 | -33.3 | % | 395 | 681 | 544 | 25.2 | % | |||||||||||||||||||
Leasing |
30 | | 100.0 | % | 61 | 91 | | 100.0 | % | |||||||||||||||||||
Total net credit losses |
$ | 2,297 | $ | 2,075 | 10.7 | % | $ | 2,503 | $ | 4,801 | $ | 3,385 | 41.8 | % | ||||||||||||||
Net credit losses to average loans outstanding |
0.78 | % | 0.42 | % | 85.7 | % | 0.86 | % | 0.82 | % | 0.34 | % | 140.3 | % | ||||||||||||||
AS OF | ||||||||||||||||||||
30-Jun-11 | 30-Jun-10 | % | 31-Mar-11 | 31-Dec-10 | ||||||||||||||||
Allowance for loan and lease losses on non-covered loans |
$ | 34,229 | $ | 28,002 | 22.2 | % | $ | 32,727 | $ | 31,430 | ||||||||||
Allowance coverage ratios: |
||||||||||||||||||||
Allowance for loan and lease losses to total loans (excluding loans covered under
shared-loss agreements with the FDIC) |
2.85 | % | 2.41 | % | 18.4 | % | 2.78 | % | 2.66 | % | ||||||||||
Allowance for loan and lease losses to non-performing loans |
26.38 | % | 25.45 | % | 3.7 | % | 27.02 | % | 25.67 | % | ||||||||||
Non-performing assets summary (excluding assets covered under shared-loss
agreements with the FDIC): |
||||||||||||||||||||
Mortgage |
$ | 93,792 | $ | 94,942 | -1.2 | % | $ | 92,403 | $ | 98,008 | ||||||||||
Commercial |
35,061 | 14,220 | 146.6 | % | 27,562 | 23,619 | ||||||||||||||
Consumer |
765 | 866 | -11.7 | % | 777 | 761 | ||||||||||||||
Leasing |
130 | | 100.0 | % | 395 | 35 | ||||||||||||||
Non-performing loans |
129,748 | 110,028 | 17.9 | % | 121,137 | 122,423 | ||||||||||||||
Foreclosed properties |
12,031 | 12,277 | -2.0 | % | 12,793 | 11,969 | ||||||||||||||
Non-performing assets |
$ | 141,779 | $ | 122,305 | 15.9 | % | $ | 133,930 | $ | 134,392 | ||||||||||
Non-performing loans to: |
||||||||||||||||||||
Total loans, excluding covered loans |
11.14 | % | 9.70 | % | 14.8 | % | 10.62 | % | 10.65 | % | ||||||||||
Total assets, excluding covered assets |
2.01 | % | 1.51 | % | 33.1 | % | 1.86 | % | 1.85 | % | ||||||||||
Total capital |
17.91 | % | 15.09 | % | 18.7 | % | 16.99 | % | 16.72 | % | ||||||||||
Non-performing assets to total assets, excluding covered assets |
2.19 | % | 1.68 | % | 30.4 | % | 2.06 | % | 2.03 | % | ||||||||||
Non-performing assets to total capital |
19.57 | % | 16.77 | % | 16.7 | % | 18.78 | % | 18.35 | % | ||||||||||
6 of 6
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