Puerto Rico
|
001-14793
|
66-0561822
|
(State or Other Jurisdiction
of Incorporation)
|
(Commission
File Number)
|
(I.R.S. Employer
Identification No.)
|
1519 Ponce de Leon Ave.
P.O. Box 9146
San Juan, Puerto Rico
|
00908-0146
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
¨
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
¨
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
¨
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
¨
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Item 2.02
|
Results of Operations and Financial Condition.
|
Reconciliation of GAAP Net Interest Margin and Spread to Non-GAAP Net Interest Margin and Spread on a Tax-Equivalent Basis and excluding
|
||||||||||||||||||||||||||||
fair value changes on derivative instruments and liabilities measured at fair value ("valuations")
|
||||||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||
Quarter Ended
|
Nine-Month Period Ended
|
|||||||||||||||||||||||||||
September 30, 2011
|
June 30, 2011
|
March 31, 2011
|
December 31, 2010
|
September 30, 2010
|
September 30, 2011
|
September 30, 2010
|
||||||||||||||||||||||
Net Interest Income (in thousands)
|
||||||||||||||||||||||||||||
Interest Income - GAAP
|
$ | 158,542 | $ | 163,418 | $ | 180,903 | $ | 192,806 | $ | 204,028 | $ | 502,863 | $ | 639,880 | ||||||||||||||
Unrealized loss (gain) on
|
||||||||||||||||||||||||||||
derivative instruments
|
954 | 1,185 | (345 | ) | (903 | ) | 938 | 1,794 | 2,169 | |||||||||||||||||||
Interest income excluding valuations
|
159,496 | 164,603 | 180,558 | 191,903 | 204,966 | 504,657 | 642,049 | |||||||||||||||||||||
Tax-equivalent adjustment
|
1,521 | 1,504 | 2,314 | 4,494 | 6,778 | 5,339 | 23,912 | |||||||||||||||||||||
Interest income on a tax-equivalent basis excluding valuations
|
161,017 | 166,107 | 182,872 | 196,397 | 211,744 | 509,996 | 665,961 | |||||||||||||||||||||
Interest Expense - GAAP
|
64,287 | 68,983 | 74,624 | 80,758 | 90,326 | 207,894 | 290,253 | |||||||||||||||||||||
Unrealized (loss) gain on
|
||||||||||||||||||||||||||||
derivative instruments and liabilities measured at fair value
|
(1,601 | ) | 23 | (598 | ) | (813 | ) | (526 | ) | (2,176 | ) | 2,381 | ||||||||||||||||
Interest expense excluding valuations
|
62,686 | 69,006 | 74,026 | 79,945 | 89,800 | 205,718 | 292,634 | |||||||||||||||||||||
Net interest income - GAAP
|
$ | 94,255 | $ | 94,435 | $ | 106,279 | $ | 112,048 | $ | 113,702 | $ | 294,969 | $ | 349,627 | ||||||||||||||
Net interest income excluding valuations
|
$ | 96,810 | $ | 95,597 | $ | 106,532 | $ | 111,958 | $ | 115,166 | $ | 298,939 | $ | 349,415 | ||||||||||||||
Net interest income on a tax-equivalent basis excluding valuations
|
$ | 98,331 | $ | 97,101 | $ | 108,846 | $ | 116,452 | $ | 121,944 | $ | 304,278 | $ | 373,327 | ||||||||||||||
Average Balances (in thousands)
|
||||||||||||||||||||||||||||
Loans and leases
|
$ | 10,832,426 | $ | 10,997,295 | $ | 11,672,619 | $ | 12,185,511 | $ | 12,443,055 | $ | 11,164,370 | $ | 13,008,559 | ||||||||||||||
Total securities and other short-term investments
|
2,787,708 | 3,550,743 | 3,588,028 | 3,863,532 | 4,640,055 | 3,305,893 | 5,214,304 | |||||||||||||||||||||
Average Interest-Earning Assets
|
$ | 13,620,134 | $ | 14,548,038 | $ | 15,260,647 | $ | 16,049,043 | $ | 17,083,110 | $ | 14,470,263 | $ | 18,222,863 | ||||||||||||||
Average Interest-Bearing Liabilities
|
$ | 11,944,454 | $ | 12,809,375 | $ | 13,494,702 | $ | 14,036,776 | $ | 15,002,168 | $ | 12,743,832 | $ | 16,074,153 | ||||||||||||||
Average Yield/Rate
|
||||||||||||||||||||||||||||
Average yield on interest-earning assets - GAAP
|
4.62 | % | 4.51 | % | 4.80 | % | 4.77 | % | 4.74 | % | 4.65 | % | 4.69 | % | ||||||||||||||
Average rate on interest-bearing liabilities - GAAP
|
2.14 | % | 2.16 | % | 2.24 | % | 2.28 | % | 2.39 | % | 2.18 | % | 2.41 | % | ||||||||||||||
Net interest spread - GAAP
|
2.48 | % | 2.35 | % | 2.56 | % | 2.49 | % | 2.35 | % | 2.47 | % | 2.28 | % | ||||||||||||||
Net interest margin - GAAP
|
2.75 | % | 2.60 | % | 2.82 | % | 2.77 | % | 2.64 | % | 2.73 | % | 2.57 | % | ||||||||||||||
Average yield on interest-earning assets excluding valuations
|
4.65 | % | 4.54 | % | 4.79 | % | 4.74 | % | 4.76 | % | 4.66 | % | 4.71 | % | ||||||||||||||
Average rate on interest-bearing liabilities excluding valuations
|
2.08 | % | 2.16 | % | 2.22 | % | 2.26 | % | 2.37 | % | 2.16 | % | 2.43 | % | ||||||||||||||
Net interest spread excluding valuations
|
2.57 | % | 2.38 | % | 2.57 | % | 2.48 | % | 2.39 | % | 2.50 | % | 2.28 | % | ||||||||||||||
Net interest margin excluding valuations
|
2.82 | % | 2.64 | % | 2.83 | % | 2.77 | % | 2.67 | % | 2.76 | % | 2.56 | % | ||||||||||||||
Average yield on interest-earning assets on a tax-equivalent basis and excluding valuations
|
4.69 | % | 4.58 | % | 4.85 | % | 4.86 | % | 4.92 | % | 4.71 | % | 4.89 | % | ||||||||||||||
Average rate on interest-bearing liabilities excluding valuations
|
2.08 | % | 2.16 | % | 2.22 | % | 2.26 | % | 2.37 | % | 2.16 | % | 2.43 | % | ||||||||||||||
Net interest spread on a tax-equivalent basis and excluding valuations
|
2.61 | % | 2.42 | % | 2.63 | % | 2.60 | % | 2.55 | % | 2.55 | % | 2.46 | % | ||||||||||||||
Net interest margin on a tax-equivalent basis and excluding valuations
|
2.86 | % | 2.68 | % | 2.89 | % | 2.88 | % | 2.83 | % | 2.81 | % | 2.74 | % | ||||||||||||||
Tangible Common Equity
|
||||||||||||||||||||
(In thousands, except ratios and per share information)
|
||||||||||||||||||||
September 30,
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
||||||||||||||||
2011
|
2011
|
2011
|
2010
|
2010
|
||||||||||||||||
Tangible Equity:
|
||||||||||||||||||||
Total equity - GAAP
|
$ | 986,847 | $ | 1,009,578 | $ | 1,027,269 | $ | 1,057,959 | $ | 1,321,979 | ||||||||||
Preferred equity
|
(430,498 | ) | (428,703 | ) | (426,724 | ) | (425,009 | ) | (411,876 | ) | ||||||||||
Goodwill
|
(28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | ||||||||||
Core deposit intangible
|
(12,277 | ) | (12,866 | ) | (13,454 | ) | (14,043 | ) | (14,673 | ) | ||||||||||
Tangible common equity
|
$ | 515,974 | $ | 539,911 | $ | 558,993 | $ | 590,809 | $ | 867,332 | ||||||||||
Tangible Assets:
|
||||||||||||||||||||
Total assets - GAAP
|
$ | 13,475,572 | $ | 14,113,973 | $ | 15,104,090 | $ | 15,593,077 | $ | 16,678,879 | ||||||||||
Goodwill
|
(28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | ||||||||||
Core deposit intangible
|
(12,277 | ) | (12,866 | ) | (13,454 | ) | (14,043 | ) | (14,673 | ) | ||||||||||
Tangible assets
|
$ | 13,435,197 | $ | 14,073,009 | $ | 15,062,538 | $ | 15,550,936 | $ | 16,636,108 | ||||||||||
Common shares outstanding
|
21,304 | 21,304 | 21,304 | 21,304 | 21,304 | |||||||||||||||
Tangible common equity ratio
|
3.84 | % | 3.84 | % | 3.71 | % | 3.80 | % | 5.21 | % | ||||||||||
Tangible book value per common share
|
$ | 24.22 | $ | 25.34 | $ | 26.24 | $ | 27.73 | $ | 40.71 |
Tier 1 Common Equity to Risk-Weighted Assets
|
||||||||||||||||||||
(Dollars in thousands)
|
As of
|
|||||||||||||||||||
September 30,
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
||||||||||||||||
2011
|
2011
|
2011
|
2010
|
2010
|
||||||||||||||||
Tier 1 Common Equity:
|
||||||||||||||||||||
Total equity - GAAP
|
$ | 986,847 | $ | 1,009,578 | $ | 1,027,269 | $ | 1,057,959 | $ | 1,321,979 | ||||||||||
Qualifying preferred stock
|
(430,498 | ) | (428,703 | ) | (426,724 | ) | (425,009 | ) | (411,876 | ) | ||||||||||
Unrealized gain on available-for-sale securities (1)
|
(13,957 | ) | (12,659 | ) | (15,453 | ) | (17,736 | ) | (30,295 | ) | ||||||||||
Disallowed deferred tax asset (2)
|
(267 | ) | (272 | ) | (981 | ) | (815 | ) | (43,552 | ) | ||||||||||
Goodwill
|
(28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | ||||||||||
Core deposit intangible
|
(12,277 | ) | (12,866 | ) | (13,454 | ) | (14,043 | ) | (14,673 | ) | ||||||||||
Cumulative change gain in fair value of liabilities
|
||||||||||||||||||||
accounted for under a fair value option
|
(952 | ) | (1,889 | ) | (2,156 | ) | (2,185 | ) | (2,654 | ) | ||||||||||
Other disallowed assets
|
(907 | ) | (808 | ) | (881 | ) | (226 | ) | (636 | ) | ||||||||||
Tier 1 common equity
|
$ | 499,890 | $ | 524,283 | $ | 539,522 | $ | 569,847 | $ | 790,195 | ||||||||||
Total risk-weighted assets
|
$ | 10,433,620 | $ | 10,630,162 | $ | 11,183,518 | $ | 11,372,856 | $ | 11,930,854 | ||||||||||
Tier 1 common equity to risk-weighted assets ratio
|
4.79 | % | 4.93 | % | 4.82 | % | 5.01 | % | 6.62 | % |
1- | Tier 1 capital excludes net unrealized gains (losses) on available-for-sale debt securities and net unrealized gains on available-for-sale equity securities with readily determinable fair values, in accordance with regulatory risk-based capital guidelines. In arriving at Tier 1 capital, institutions are required to deduct net unrealized losses on available-for-sale equity securities with readily determinable fair values, net of tax. |
2- | Approximately $12 million of the Corporation's deferred tax assets at September 30, 2011 (June 30, 2011 - $11 million; March 31, 2011 - $12 million December 31, 2010 - $13 million; September 30, 2010 - $64 million) was included without limitation in regulatory capital pursuant to the risk-based capital guidelines, while approximately $0.3 million of such assets at June 30, 2011 (March 31, 2011 - $1 million; December 31, 2010 - $0.8 million; September 30, 2010 - $44 million; June 30, 2010 - $38 million) exceeded the limitation imposed by these guidelines and, as "disallowed deferred tax assets," was deducted in arriving at Tier 1 capital. According to regulatory capital guidelines, the deferred tax assets that are dependent upon future taxable income are limited for inclusion in Tier 1 capital to the lesser of: (i) the amount of such deferred tax asset that the entity expects to realize within one year of the calendar quarter end-date, based on its projected future taxable income for that year, or (ii) 10% of the amount of the entity's Tier 1 capital. Approximately $7 million of the Corporation's other net deferred tax liability at September 30, 2011 (June 30, 2011 - $5 million; March 31, 2011 - $5 million; December 31, 2010 - $5 million; September 30, 2010 - $7 million) represented primarily the deferred tax effects of unrealized gains and losses on available-for-sale debt securities, which are permitted to be excluded prior to deriving the amount of net deferred tax assets subject to limitation under the guidelines. |
Pre-Tax, Pre-Provision Income
|
||||||||||||||||||||
(Dollars in thousands)
|
Quarter Ended
|
|||||||||||||||||||
September 30,
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
||||||||||||||||
2011
|
2011
|
2011
|
2010
|
2010
|
||||||||||||||||
Loss before income taxes
|
$ | (21,158 | ) | $ | (12,318 | ) | $ | (24,834 | ) | $ | (158,016 | ) | $ | (76,196 | ) | |||||
Add: Provision for loan and lease losses
|
46,446 | 59,184 | 88,732 | 196,347 | 120,482 | |||||||||||||||
Less: Net (gain) loss on sale and OTTI of investment securities
|
(12,156 | ) | (21,342 | ) | (19,341 | ) | 620 | (48,281 | ) | |||||||||||
Less: gain on sale of FirstBank Insurance VI
|
- | - | (2,845 | ) | - | - | ||||||||||||||
Add: Unrealized loss (gain) on derivatives instruments and liabilities
|
||||||||||||||||||||
measured at fair value
|
2,555 | 1,162 | 253 | (90 | ) | 1,464 | ||||||||||||||
Add: Loss on early extinguishment of borrowings
|
9,012 | 1,823 | - | - | 47,405 | |||||||||||||||
Add: Equity in losses of unconsolidated entities
|
4,357 | 1,536 | - | - | - | |||||||||||||||
Adjusted Pre-tax, pre-provision income (1)
|
$ | 29,056 | $ | 30,045 | $ | 41,965 | $ | 38,861 | $ | 44,874 | ||||||||||
Change from most recent prior quarter - amount
|
$ | (989 | ) | $ | (11,920 | ) | $ | 2,761 | $ | (4,459 | ) | $ | 7,671 | |||||||
Change from most recent prior quarter - percent
|
-3.3 | % | -28.4 | % | 7.1 | % | -10.3 | % | 21.5 | % |
Item 5.02
|
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
|
Exhibit
|
Description of Exhibit
|
|
99.1
|
Press Release dated October 26, 2011 - First BanCorp Reports Financial Results for the Quarter Ended September 30, 2011
|
Date: November 1, 2011
|
First BanCorp.
|
|
By:
|
/s/ Lawrence Odell
|
|
Name:
|
Lawrence Odell
|
|
Title:
|
EVP and General Counsel
|
Exhibit
|
Description of Exhibit
|
|
99.1
|
Press Release dated October 26, 2011 - First BanCorp Reports Financial Results for the Quarter Ended September 30, 2011
|
·
|
On October 7, 2011, the Corporation completed the previously announced private placement of $525 million of common stock to institutional investors and converted the 424,174 shares of its Fixed Rate Cumulative Mandatorily Convertible Series G Preferred Stock (“Series G Preferred Stock”) held by the U.S. Treasury into 32.9 million shares of common stock. Following the issuance of common stock in the capital raise and the conversion of the Series G Preferred Stock, the Corporation has 204.2 million common shares outstanding.
|
·
|
Pro-forma regulatory Total capital, Tier 1 capital and Leverage ratios as of September 30, 2011 for the Corporation of 16.84%, 15.51% and 11.41%, respectively, reflecting the $525 million capital raise (net of offering costs and the payment of cumulative dividends on the Series G Preferred Stock).
|
·
|
Pro-forma Tangible Common Equity and Tier 1 common equity to risk-weighted assets ratios as of September 30, 2011 for the Corporation of 9.69% and 12.76%, respectively, reflecting the $525 million capital raise (net of offering costs and the payment of cumulative dividends on the Series G Preferred Stock) and the conversion of the Series G Preferred Stock.
|
·
|
Pro-forma regulatory Total capital, Tier 1 capital and Leverage ratios as of September 30, 2011 for the Corporation’s wholly owned banking subsidiary, FirstBank, of 16.33%, 15.01% and 11.06%, respectively, reflecting $435 million of the capital raise contributed to the Bank. All ratios substantially in excess of the minimum requirements under the Consent Order with the FDIC.
|
·
|
Credit quality trends continued to improve:
|
·
|
Provision for loan and lease losses decreased $12.7 million to $46.4 million.
|
·
|
The level of non-performing loans decreased for the sixth consecutive quarter, the decline from the second quarter of 2011 was $24.7 million to $1.19 billion.
|
·
|
Net charge-offs declined $12.4 million to $67.6 million, or 2.50% of average loans.
|
·
|
Net interest income, excluding fair value adjustments, increased $1.2 million and net interest margin increased 18 basis points to 2.82%, mainly reflecting the use of proceeds from sales, calls and maturities of low-yielding investment securities and liquidity obtained from the growth in core deposits to pay down borrowings at higher interest rates. By selling low-yielding investments and increasing the proportion of loans to total earning assets, the Corporation enhanced the overall yield of its interest-earnings assets.
|
·
|
Non-interest expenses decreased $3.5 million to $82.9 million, reflecting decreases in almost all major categories including marketing, losses related to real estate owned (REO) operations and a decline in the provision for unfunded loan commitments.
|
·
|
Non-interest income decreased $24.9 million to $14.0 million:
|
·
|
Previous quarter included a gain of $20.2 million realized on the sale of $290 million of U.S. agency mortgage-backed securities (“MBS”) and a $6.8 million gain on the bulk sale of $282 million of performing residential mortgage loans, both in connection with deleveraging strategies contemplated in the Corporation’s capital plan.
|
·
|
Sale of $500 million of low-yielding U.S. Treasury notes as part of the Corporation’s balance sheet restructuring strategies, realizing a gain of $9.0 million, which was offset by a $9.0 million loss on the early termination of $200 million high-cost repurchase agreements.
|
·
|
Gain of $3.5 million recorded in connection with a tender offer of the Puerto Rico Housing Finance Authority.
|
·
|
Non-cash charges in the third quarter of $4.4 million related to FirstBank’s investment in the unconsolidated entity to which FirstBank sold loans in February 2011, or $2.8 million higher than the loss recorded in the second quarter.
|
·
|
Balance sheet and capital position:
|
·
|
Decrease in total assets by $638.4 million, or 4%, to $13.5 billion primarily related to sales, calls and maturities of investment securities resulting in proceeds used in part to pay down brokered CDs and for the early termination of repurchase agreements.
|
·
|
Increase in core deposits of $259.5 million, or 4%, while brokered CDs decreased by $713.7 million, or 14%.
|
·
|
Total capital, Tier 1 capital and Leverage ratios of the Corporation were 12.39%, 11.07% and 8.41%, respectively, compared to 12.40%, 11.08% and 8.04%, respectively, for the previous quarter.
|
·
|
Regulatory Total capital, Tier 1 capital and Leverage ratios of the Corporation’s wholly owned banking subsidiary, FirstBank were 12.15%, 10.84% and 8.24%, respectively, compared to 12.15%, 10.83%, and 7.87%, respectively, for the previous quarter. All of the capital ratios as of September 30, 2011 are above the minimum required under the Consent Order with the FDIC.
|
·
|
4.79% Tier 1 common risk-based capital ratio, down from 4.93%.
|
·
|
3.84% tangible common equity ratio, same as previous quarter.
|
(In thousands, except per share information)
|
Quarter Ended
|
Nine-Month Period Ended
|
||||||||||||||||||
September 30,
|
June 30,
|
September 30,
|
September 30,
|
September 30,
|
||||||||||||||||
2011
|
2011
|
2010
|
2011
|
2010
|
||||||||||||||||
Net loss
|
$
|
(24,046
|
)
|
$
|
(14,924
|
)
|
$
|
(75,233
|
)
|
$
|
(67,390
|
)
|
$
|
(272,872
|
)
|
|||||
Cumulative non-convertible preferred stock dividends (Series F)
|
-
|
-
|
(1,618
|
)
|
-
|
(11,618
|
)
|
|||||||||||||
Cumulative convertible preferred stock dividend (Series G)
|
(5,302
|
)
|
(5,302
|
)
|
(4,183
|
)
|
(15,906
|
)
|
(4,183
|
)
|
||||||||||
Preferred stock discount accretion (Series G and F) (1)
|
(1,795
|
)
|
(1,979
|
)
|
(1,688
|
)
|
(5,489
|
)
|
(4,010
|
)
|
||||||||||
Favorable impact from issuing common stock in exchange for Series A through E preferred stock, net of issuance costs (2)
|
||||||||||||||||||||
-
|
-
|
385,387
|
-
|
385,387
|
||||||||||||||||
Favorable impact from issuing Series G mandatorily convertible preferred stock in exchange for Series F preferred stock (3)
|
||||||||||||||||||||
-
|
-
|
55,122
|
-
|
55,122
|
||||||||||||||||
Net (loss) income attributable to common stockholders - basic
|
$
|
(31,143
|
)
|
$
|
(22,205
|
)
|
$
|
357,787
|
$
|
(88,785
|
)
|
$
|
147,826
|
|||||||
Convertible preferred stock dividends and accretion
|
-
|
-
|
5,626
|
-
|
5,626
|
|||||||||||||||
Net (loss) income attributable to common stockholders - diluted
|
$
|
(31,143
|
)
|
$
|
(22,205
|
)
|
$
|
363,413
|
$
|
(88,785
|
)
|
$
|
153,452
|
|||||||
Average common shares outstanding (4)
|
21,303
|
21,303
|
11,432
|
21,303
|
7,942
|
|||||||||||||||
Average potential common shares (4)(5)
|
-
|
-
|
75,119
|
-
|
25,315
|
|||||||||||||||
Average common shares outstanding -
|
||||||||||||||||||||
assuming dilution (4)
|
21,303
|
21,303
|
86,552
|
21,303
|
33,257
|
|||||||||||||||
Basic (loss) earnings per common share (4)
|
$
|
(1.46
|
)
|
$
|
(1.04
|
)
|
$
|
31.30
|
$
|
(4.17
|
)
|
$
|
18.61
|
|||||||
Diluted (loss) earnings per common share (4)
|
$
|
(1.46
|
)
|
$
|
(1.04
|
)
|
$
|
4.20
|
$
|
(4.17
|
)
|
$
|
4.61
|
|||||||
(1) Includes a non-cash adjustment of $0.2 million for the quarter ended June 30, 2011 and nine-month period ended September 30, 2011 as an acceleration of the Series G preferred stock discount accretion pursuant to a second amendment to the exchange agreement with the U.S. Treasury, the sole holder of the Series G Preferred Stock, that provided for a six months extension to the date by when the Corporation is required to complete an equity raise in order to compel the conversion of the Series G Preferred Stock into common stock.
|
||||||||||||||||||||
(2) Excess of carrying amount of Series A through E preferred stock exchanged over the fair value of new common shares issued in the third quarter of 2010.
|
||||||||||||||||||||
(3) Excess of carrying amount of Series F preferred stock exchanged and original warrant over the fair value of Series G preferred stock issued in the third quarter of 2010 and amended warrant.
|
||||||||||||||||||||
(4) All share and per share data has been adjusted to retroactively reflect the 1-for-15 reverse stock split effected January 7, 2011.
|
||||||||||||||||||||
(5) Assumes conversion of the Series G convertible preferred stock at the time of issuance based on the most advantageous conversion rate from the standpoint of the security holder.
|
||||||||||||||||||||
FDIC
|
|||||||||||
Consent Order
|
As of September 30, 2011
|
||||||||||
Regulatory Capital Ratios
|
Minimum Requirements
|
Actual
|
Pro forma
|
||||||||
First Bank:
|
|||||||||||
Total capital (Total capital to risk-weight assets)
|
12.00
|
%
|
12.15
|
%
|
16.33
|
%
|
|||||
Tier 1 capital (Tier 1 capital to risk-weight assets)
|
10.00
|
%
|
10.84
|
%
|
15.01
|
%
|
|||||
Leverage (Tier 1 capital to average assets)
|
8.00
|
%
|
8.24
|
%
|
11.06
|
%
|
|||||
As of September 30, 2011
|
|||||||||||
Capital Ratios
|
Actual
|
Pro forma
|
|||||||||
First BanCorp:
|
|||||||||||
Total capital (Total capital to risk-weight assets)
|
12.39
|
%
|
16.84
|
%
|
|||||||
Tier 1 capital (Tier 1 capital to risk-weight assets)
|
11.07
|
%
|
15.51
|
%
|
|||||||
Leverage (Tier 1 capital to average assets)
|
8.41
|
%
|
11.41
|
%
|
|||||||
Tangible common equity (tangible common equity to tangible assets)
|
3.84
|
%
|
9.69
|
%
|
|||||||
Tier 1 common equity to risk-weight assets
|
4.79
|
%
|
12.76
|
%
|
|||||||
Tangible book value per common share
|
$
|
24.22
|
$
|
6.60
|
|||||||
Quarter Ended
|
||||||||||||||||||||
September 30,
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
||||||||||||||||
2011
|
2011
|
2011
|
2010
|
2010
|
||||||||||||||||
Earnings (in thousands)
|
||||||||||||||||||||
Net loss
|
$
|
(24,046
|
)
|
$
|
(14,924
|
)
|
$
|
(28,420
|
)
|
$
|
(251,436
|
)
|
$
|
(75,233
|
)
|
|||||
Net (loss) income attributable to common stockholders - basic
|
$
|
(31,143
|
)
|
$
|
(22,205
|
)
|
$
|
(35,437
|
)
|
$
|
(269,871
|
)
|
$
|
357,787
|
||||||
Net (loss) income attributable to common stockholders - diluted
|
$
|
(31,143
|
)
|
$
|
(22,205
|
)
|
$
|
(35,437
|
)
|
$
|
(269,871
|
)
|
$
|
363,413
|
||||||
Adjusted Pre-Tax, Pre-Provision Income (1)
|
$
|
29,056
|
$
|
30,045
|
$
|
41,965
|
$
|
38,861
|
$
|
44,874
|
||||||||||
Common share data (2)
|
||||||||||||||||||||
(Loss) earnings per common share basic
|
$
|
(1.46
|
)
|
$
|
(1.04
|
)
|
$
|
(1.66
|
)
|
$
|
(12.67
|
)
|
$
|
31.30
|
||||||
(Loss) earnings per common share diluted
|
$
|
(1.46
|
)
|
$
|
(1.04
|
)
|
$
|
(1.66
|
)
|
$
|
(12.67
|
)
|
$
|
4.20
|
||||||
Financial ratios
|
||||||||||||||||||||
Return on average assets
|
-0.69
|
%
|
-0.41
|
%
|
-0.75
|
%
|
-6.16
|
%
|
-1.73
|
%
|
||||||||||
Return on average common equity
|
-21.33
|
%
|
-14.77
|
%
|
-23.42
|
%
|
-120.42
|
%
|
-50.80
|
%
|
||||||||||
Total capital
|
12.39
|
%
|
12.40
|
%
|
11.97
|
%
|
12.02
|
%
|
13.26
|
%
|
||||||||||
Tier 1 capital
|
11.07
|
%
|
11.08
|
%
|
10.65
|
%
|
10.73
|
%
|
11.96
|
%
|
||||||||||
Leverage
|
8.41
|
%
|
8.04
|
%
|
7.78
|
%
|
7.57
|
%
|
8.34
|
%
|
||||||||||
Tangible common equity (3)
|
3.84
|
%
|
3.84
|
%
|
3.71
|
%
|
3.80
|
%
|
5.21
|
%
|
||||||||||
Tier 1 common equity to risk-weight assets (3)
|
4.79
|
%
|
4.93
|
%
|
4.82
|
%
|
5.01
|
%
|
6.62
|
%
|
||||||||||
Net interest margin (4)
|
2.86
|
%
|
2.68
|
%
|
2.89
|
%
|
2.88
|
%
|
2.83
|
%
|
||||||||||
Efficiency
|
76.63
|
%
|
64.84
|
%
|
56.46
|
%
|
69.54
|
%
|
66.69
|
%
|
||||||||||
Common shares outstanding (2)
|
21,303,669
|
21,303,669
|
21,303,669
|
21,303,669
|
21,303,669
|
|||||||||||||||
Average common shares outstanding (2)
|
||||||||||||||||||||
Basic
|
21,302,949
|
21,302,949
|
21,302,949
|
21,302,672
|
11,432,204
|
|||||||||||||||
Diluted
|
21,302,949
|
21,302,949
|
21,302,949
|
21,302,672
|
86,551,688
|
|||||||||||||||
(1) Non-GAAP measure, see Adjusted Pre-Tax, Pre-Provision Trends and Basis of Presentation sections below for additional information.
|
||||||||||||||||||||
(2) All share and per share data have been adjusted to retroactively reflect the 1-for-15 reverse stock split effected January 7, 2011.
|
||||||||||||||||||||
(3) Non-GAAP measures, see Tangible Common Equity and Basis of Presentation sections below for additional information.
|
||||||||||||||||||||
(4) On a tax-equivalent basis. See Net interest income section below and Exhibit A (Tables 2 and 3) for additional information about this non-GAAP measure.
|
||||||||||||||||||||
Pre-Tax, Pre-Provision Income
|
||||||||||||||||||||
(Dollars in thousands)
|
Quarter Ended
|
|||||||||||||||||||
September 30,
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
||||||||||||||||
2011
|
2011
|
2011
|
2010
|
2010
|
||||||||||||||||
Loss before income taxes
|
$
|
(21,158
|
)
|
$
|
(12,318
|
)
|
$
|
(24,834
|
)
|
$
|
(158,016
|
)
|
$
|
(76,196
|
)
|
|||||
Add: Provision for loan and lease losses
|
46,446
|
59,184
|
88,732
|
196,347
|
120,482
|
|||||||||||||||
Less: Net (gain) loss on sale and OTTI of investment securities
|
(12,156
|
)
|
(21,342
|
)
|
(19,341
|
)
|
620
|
(48,281
|
)
|
|||||||||||
Less: gain on sale of FirstBank Insurance VI
|
-
|
-
|
(2,845
|
)
|
-
|
-
|
||||||||||||||
Add: Unrealized loss (gain) on derivatives instruments and liabilities
|
||||||||||||||||||||
measured at fair value
|
2,555
|
1,162
|
253
|
(90
|
)
|
1,464
|
||||||||||||||
Add: Loss on early extinguishment of borrowings
|
9,012
|
1,823
|
-
|
-
|
47,405
|
|||||||||||||||
Add: Equity in losses of unconsolidated entities
|
4,357
|
1,536
|
-
|
-
|
-
|
|||||||||||||||
Adjusted Pre-tax, pre-provision income (1)
|
$
|
29,056
|
$
|
30,045
|
$
|
41,965
|
$
|
38,861
|
$
|
44,874
|
||||||||||
Change from most recent prior quarter - amount
|
$
|
(989
|
)
|
$
|
(11,920
|
)
|
$
|
2,761
|
$
|
(4,459
|
)
|
$
|
7,671
|
|||||||
Change from most recent prior quarter - percent
|
-3.3
|
%
|
-28.4
|
%
|
7.1
|
%
|
-10.3
|
%
|
21.5
|
%
|
||||||||||
(1) See Basis of Presentation for definition.
|
||||||||||||||||||||
Quarter Ended
|
||||||||||||||||||||
September 30, 2011
|
June 30, 2011
|
March 31, 2011
|
December 31, 2010
|
September 30, 2010
|
||||||||||||||||
Net Interest Income (in thousands)
|
||||||||||||||||||||
Interest Income - GAAP
|
$
|
158,542
|
$
|
163,418
|
$
|
180,903
|
$
|
192,806
|
$
|
204,028
|
||||||||||
Unrealized loss (gain) on
|
||||||||||||||||||||
derivative instruments
|
954
|
1,185
|
(345
|
)
|
(903
|
)
|
938
|
|||||||||||||
Interest income excluding valuations
|
159,496
|
164,603
|
180,558
|
191,903
|
204,966
|
|||||||||||||||
Tax-equivalent adjustment
|
1,521
|
1,504
|
2,314
|
4,494
|
6,778
|
|||||||||||||||
Interest income on a tax-equivalent basis excluding valuations
|
161,017
|
166,107
|
182,872
|
196,397
|
211,744
|
|||||||||||||||
Interest Expense - GAAP
|
64,287
|
68,983
|
74,624
|
80,758
|
90,326
|
|||||||||||||||
Unrealized gain (loss) on
|
||||||||||||||||||||
derivative instruments and liabilities measured at fair value
|
(1,601
|
)
|
23
|
(598
|
)
|
(813
|
)
|
(526
|
)
|
|||||||||||
Interest expense excluding valuations
|
62,686
|
69,006
|
74,026
|
79,945
|
89,800
|
|||||||||||||||
Net interest income - GAAP
|
$
|
94,255
|
$
|
94,435
|
$
|
106,279
|
$
|
112,048
|
$
|
113,702
|
||||||||||
Net interest income excluding valuations
|
$
|
96,810
|
$
|
95,597
|
$
|
106,532
|
$
|
111,958
|
$
|
115,166
|
||||||||||
Net interest income on a tax-equivalent basis excluding valuations
|
$
|
98,331
|
$
|
97,101
|
$
|
108,846
|
$
|
116,452
|
$
|
121,944
|
||||||||||
Average Balances (in thousands)
|
||||||||||||||||||||
Loans and leases
|
$
|
10,832,426
|
$
|
10,997,295
|
$
|
11,672,619
|
$
|
12,185,511
|
$
|
12,443,055
|
||||||||||
Total securities and other short-term investments
|
2,787,708
|
3,550,743
|
3,588,028
|
3,863,532
|
4,640,055
|
|||||||||||||||
Average Interest-Earning Assets
|
$
|
13,620,134
|
$
|
14,548,038
|
$
|
15,260,647
|
$
|
16,049,043
|
$
|
17,083,110
|
||||||||||
Average Interest-Bearing Liabilities
|
$
|
11,944,454
|
$
|
12,809,375
|
$
|
13,494,702
|
$
|
14,036,776
|
$
|
15,002,168
|
||||||||||
Average Yield/Rate
|
||||||||||||||||||||
Average yield on interest-earning assets - GAAP
|
4.62
|
%
|
4.51
|
%
|
4.80
|
%
|
4.77
|
%
|
4.74
|
%
|
||||||||||
Average rate on interest-bearing liabilities - GAAP
|
2.14
|
%
|
2.16
|
%
|
2.24
|
%
|
2.28
|
%
|
2.39
|
%
|
||||||||||
Net interest spread - GAAP
|
2.48
|
%
|
2.35
|
%
|
2.56
|
%
|
2.49
|
%
|
2.35
|
%
|
||||||||||
Net interest margin - GAAP
|
2.75
|
%
|
2.60
|
%
|
2.82
|
%
|
2.77
|
%
|
2.64
|
%
|
||||||||||
Average yield on interest-earning assets excluding valuations
|
4.65
|
%
|
4.54
|
%
|
4.79
|
%
|
4.74
|
%
|
4.76
|
%
|
||||||||||
Average rate on interest-bearing liabilities excluding valuations
|
2.08
|
%
|
2.16
|
%
|
2.22
|
%
|
2.26
|
%
|
2.37
|
%
|
||||||||||
Net interest spread excluding valuations
|
2.57
|
%
|
2.38
|
%
|
2.57
|
%
|
2.48
|
%
|
2.39
|
%
|
||||||||||
Net interest margin excluding valuations
|
2.82
|
%
|
2.64
|
%
|
2.83
|
%
|
2.77
|
%
|
2.67
|
%
|
||||||||||
Average yield on interest-earning assets on a tax-equivalent basis and excluding valuations
|
4.69
|
%
|
4.58
|
%
|
4.85
|
%
|
4.86
|
%
|
4.92
|
%
|
||||||||||
Average rate on interest-bearing liabilities excluding valuations
|
2.08
|
%
|
2.16
|
%
|
2.22
|
%
|
2.26
|
%
|
2.37
|
%
|
||||||||||
Net interest spread on a tax-equivalent basis and excluding valuations
|
2.61
|
%
|
2.42
|
%
|
2.63
|
%
|
2.60
|
%
|
2.55
|
%
|
||||||||||
Net interest margin on a tax-equivalent basis and excluding valuations
|
2.86
|
%
|
2.68
|
%
|
2.89
|
%
|
2.88
|
%
|
2.83
|
%
|
||||||||||
·
|
A $64.8 million decline in average residential mortgage loans, primarily reflecting the full effect of the $282 million bulk sale completed in the previous quarter combined with foreclosures and pay downs, partially offset by an increased mortgage lending activity.
|
·
|
A $42.2 million decline in average consumer loans (including finance leases), primarily related to principal repayments and charge-offs that offset loan originations.
|
·
|
A 12 basis points decrease in the average yield on residential mortgage loans adversely affected by a combination of factors including the full effect of high-yielding mortgage loans sold in the previous quarter, lower income earned for non-performing loans accounted for on a cash basis and new originations at lower rates.
|
Quarter Ended
|
|||||||||||||||||||
September 30,
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
|||||||||||||||
(In thousands)
|
2011
|
2011
|
2011
|
2010
|
2010
|
||||||||||||||
Other service charges on loans
|
$
|
1,485
|
$
|
1,456
|
$
|
1,718
|
$
|
2,019
|
$
|
1,963
|
|||||||||
Service charges on deposit accounts
|
3,098
|
3,054
|
3,332
|
3,125
|
3,325
|
||||||||||||||
Mortgage banking activities
|
3,676
|
9,336
|
6,591
|
2,501
|
6,474
|
||||||||||||||
Gain (loss) on sale of investments, net of impairments
|
12,156
|
21,342
|
19,341
|
(620
|
)
|
48,281
|
|||||||||||||
Broker-dealer income
|
173
|
783
|
48
|
121
|
501
|
||||||||||||||
Other operating income
|
6,745
|
6,250
|
9,455
|
6,640
|
6,127
|
||||||||||||||
Loss on early extinguishment of borrowings
|
(9,012
|
)
|
(1,823
|
)
|
-
|
-
|
(47,405
|
)
|
|||||||||||
Equity in losses of unconsolidated entities
|
(4,357
|
)
|
(1,536
|
)
|
-
|
-
|
-
|
||||||||||||
Non-interest income
|
$
|
13,964
|
$
|
38,862
|
$
|
40,485
|
$
|
13,786
|
$
|
19,266
|
|||||||||
·
|
The impact in the previous quarter of a gain of $20.2 million realized on the sale of $290 million of MBS and the gain of $6.8 on the bulk sale of $282 million of residential mortgage loans to another financial institution, both transactions completed as part of deleveraging strategies included in the Corporation’s capital plan.
|
·
|
Equity in losses of unconsolidated entities of $4.4 million recorded in the third quarter compared to $1.5 million in the second quarter. This non-cash charge mainly relates to the Bank’s investment in CPG/GS PR NPL, LLC (“CPG/GS”), the entity that purchased $269.2 million of loans from FirstBank during the first quarter of 2011. The Bank held a 35% subordinated ownership interest in CPG/GS as of September 30, 2011.
|
·
|
A $0.6 million decrease in fees from the broker-dealer subsidiary mainly due to lower underwriting fees as fewer deals were closed during the third quarter.
|
·
|
A $3.5 million gain attributable to a tender offer by the Puerto Rico Housing Finance Authority to purchase certain of its outstanding Bonds. Bonds held by the Corporation with a book value of $19.8 million was exchanged for cash as part of the tender offer and the difference between the cash received and the book value of such instruments was recorded as part of “Gain on sale of investments” in the table above.
|
·
|
An increase of $0.8 million in gains associated with the Corporation’s residential mortgage loan securitizations, included as part of “Mortgage banking activities” in the table above.
|
·
|
A $0.4 million gain on the sale of a portfolio of dwelling insurance policies to another financial institution, included as part of “Other operating income” in the table above.
|
Quarter Ended
|
|||||||||||||||
September 30,
|
June 30,
|
March 31,
|
December, 31
|
September, 30
|
|||||||||||
(In thousands)
|
2011
|
2011
|
2011
|
2010
|
2010
|
||||||||||
Employees' compensation and benefits
|
$
|
29,375
|
$
|
29,407
|
$
|
30,439
|
$
|
28,591
|
$
|
29,849
|
|||||
Occupancy and equipment
|
15,468
|
15,603
|
15,250
|
15,537
|
14,655
|
||||||||||
Deposit insurance premium
|
13,602
|
14,125
|
13,465
|
13,568
|
14,702
|
||||||||||
Other taxes, insurance and supervisory fees
|
4,859
|
3,557
|
4,967
|
5,069
|
5,401
|
||||||||||
Professional fees
|
5,983
|
6,072
|
5,137
|
5,863
|
4,533
|
||||||||||
Business promotion
|
2,509
|
3,628
|
2,664
|
3,561
|
3,226
|
||||||||||
Net loss on REO operations
|
4,952
|
5,971
|
5,500
|
7,471
|
8,193
|
||||||||||
Other
|
6,183
|
8,068
|
5,444
|
7,843
|
8,123
|
||||||||||
Total
|
$
|
82,931
|
$
|
86,431
|
$
|
82,866
|
$
|
87,503
|
$
|
88,682
|
|||||
·
|
A $1.1 million reduction in business promotion expenses due to lower expenses incurred in advertising campaigns and sponsoring activities.
|
·
|
A $1.0 million decrease in losses from REO operations as the previous quarter included a $1.4 million loss on the disposition of a repossessed construction project in Puerto Rico.
|
·
|
A $0.5 million decrease in the deposit premium insurance assessment due to the decline in average total assets.
|
·
|
A $1.9 million decrease in “Other” expenses, spread through several items including a decline of $1.1 million in the provision for off-balance sheet exposures, mainly for unfunded loan commitments, and a decrease of $0.2 million in losses on repossessed boats. Decreases in mailing, EDP data lines, traveling and collections expenses also contributed to the decline in other expenses.
|
(Dollars in thousands)
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
|||||||||||||||
2011
|
2011
|
2011
|
2010
|
2010
|
||||||||||||||||
Non-performing loans held for investment:
|
||||||||||||||||||||
Residential mortgage
|
$
|
364,561
|
$
|
380,165
|
$
|
391,962
|
$
|
392,134
|
$
|
427,574
|
||||||||||
Commercial mortgage
|
188,326
|
196,037
|
129,828
|
217,165
|
173,350
|
|||||||||||||||
Commercial and Industrial
|
315,360
|
309,888
|
327,477
|
317,243
|
293,323
|
|||||||||||||||
Construction
|
270,411
|
280,286
|
341,179
|
263,056
|
558,148
|
|||||||||||||||
Consumer and Finance leases
|
45,031
|
42,065
|
42,605
|
49,391
|
53,608
|
|||||||||||||||
Total non-performing loans held for investment
|
1,183,689
|
1,208,441
|
1,233,051
|
1,238,989
|
1,506,003
|
|||||||||||||||
REO
|
109,514
|
96,618
|
91,948
|
84,897
|
82,706
|
|||||||||||||||
Other repossessed property
|
14,397
|
14,884
|
15,125
|
14,023
|
15,824
|
|||||||||||||||
Investment securities (1)
|
64,543
|
64,543
|
64,543
|
64,543
|
64,543
|
|||||||||||||||
Total non-performing assets, excluding loans held for sale
|
$
|
1,372,143
|
$
|
1,384,486
|
$
|
1,404,667
|
$
|
1,402,452
|
$
|
1,669,076
|
||||||||||
Non-performing loans held for sale
|
5,107
|
5,087
|
5,454
|
159,321
|
-
|
|||||||||||||||
Total non-performing assets, including loans held for sale
|
$
|
1,377,250
|
$
|
1,389,573
|
$
|
1,410,121
|
$
|
1,561,773
|
$
|
1,669,076
|
||||||||||
Past due loans 90 days and still accruing
|
$
|
156,775
|
$
|
156,919
|
$
|
154,299
|
$
|
144,114
|
$
|
139,795
|
||||||||||
Non-performing loans held for investment to total loans held for investment
|
11.13
|
%
|
11.23
|
%
|
11.12
|
%
|
10.63
|
%
|
12.36
|
%
|
||||||||||
Non-performing assets, excluding non-performing loans held for sale, to total assets, excluding non-performing loans held for sale
|
||||||||||||||||||||
10.19
|
%
|
9.81
|
%
|
9.30
|
%
|
9.03
|
%
|
10.01
|
%
|
|||||||||||
Non-performing assets to total assets
|
10.22
|
%
|
9.85
|
%
|
9.34
|
%
|
9.96
|
%
|
10.01
|
%
|
||||||||||
(1) Collateral pledged with Lehman Brothers Special Financing, Inc.
|
||||||||||||||||||||
Quarter Ended
|
||||||||||||||||||||
(Dollars in thousands)
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
|||||||||||||||
2011
|
2011
|
2011
|
2010
|
2010
|
||||||||||||||||
Allowance for loan and lease losses, beginning of period
|
$
|
540,878
|
$
|
561,695
|
$
|
553,025
|
$
|
608,526
|
$
|
604,304
|
||||||||||
Provision (recovery) for loan and lease losses:
|
||||||||||||||||||||
Residential mortgage
|
17,744
|
12,845
|
6,327
|
13,876
|
19,961
|
|||||||||||||||
Commercial mortgage
|
13,324
|
6,062
|
13,381
|
40,642
|
(1)
|
15,051
|
||||||||||||||
Commercial and Industrial
|
10,437
|
21,486
|
41,486
|
2,011
|
(2)
|
27,958
|
||||||||||||||
Construction
|
(2,547
|
)
|
21,354
|
22,463
|
125,361
|
(3)
|
44,268
|
|||||||||||||
Consumer and finance leases
|
7,488
|
(2,563
|
)
|
5,075
|
14,457
|
13,244
|
||||||||||||||
Total provision for loan and lease losses
|
46,446
|
59,184
|
88,732
|
196,347
|
120,482
|
|||||||||||||||
Loans net charge-offs:
|
||||||||||||||||||||
Residential mortgage
|
(15,816
|
)
|
(8,937
|
)
|
(5,161
|
)
|
(18,644
|
)
|
(13,109
|
)
|
||||||||||
Commercial mortgage
|
(3,309
|
)
|
(3,150
|
)
|
(31,104
|
)
|
(32,829
|
)
|
(4)
|
(11,455
|
)
|
|||||||||
Commercial and Industrial
|
(22,526
|
)
|
(10,763
|
)
|
(16,288
|
)
|
(28,752
|
)
|
(5)
|
(19,926
|
)
|
|||||||||
Construction
|
(16,823
|
)
|
(47,207
|
)
|
(17,238
|
)
|
(158,311
|
)
|
(6)
|
(58,423
|
)
|
|||||||||
Consumer and finance leases
|
(9,163
|
)
|
(9,944
|
)
|
(10,271
|
)
|
(13,312
|
)
|
(13,347
|
)
|
||||||||||
Net charge-offs
|
(67,637
|
)
|
(80,001
|
)
|
(80,062
|
)
|
(251,848
|
)
|
(116,260
|
)
|
||||||||||
Allowance for loan and lease losses, end of period
|
$
|
519,687
|
$
|
540,878
|
$
|
561,695
|
$
|
553,025
|
$
|
608,526
|
||||||||||
Allowance for loan and lease losses to period end total loans held for investment
|
4.89
|
%
|
5.02
|
%
|
5.06
|
%
|
4.74
|
%
|
5.00
|
%
|
||||||||||
Net charge-offs (annualized) to average loans outstanding during the period
|
2.50
|
%
|
2.91
|
%
|
2.74
|
%
|
8.27
|
%
|
(7)
|
3.74
|
%
|
|||||||||
Provision for loan and lease losses to net charge-offs during the period
|
0.69x
|
0.74x
|
1.11x
|
0.78x
|
(8)
|
1.04x
|
||||||||||||||
(1) Includes provision of $11.3 million associated with loans transferred to held for sale.
|
||||||||||||||||||||
(2) Includes provision of $8.6 million associated with loans transferred to held for sale.
|
||||||||||||||||||||
(3) Includes provision of $83.0 million associated with loans transferred to held for sale.
|
||||||||||||||||||||
(4) Includes net charge-offs totaling $29.5 million associated with loans transferred to held for sale.
|
||||||||||||||||||||
(5) Includes net charge-offs totaling $8.6 million associated with loans transferred to held for sale.
|
||||||||||||||||||||
(6) Includes net charge-offs totaling $127.0 million associated with loans transferred to held for sale.
|
||||||||||||||||||||
(7) Net charge-offs, excluding charge-offs related to loans transferred to held for sale, to average loans outstanding during the fourth quarter of 2010 was 2.96%.
|
||||||||||||||||||||
(8) Provision for loan and lease losses to net charge-offs, excluding impact of loans transferred to held for sale for the fourth quarter of 2010 was 1.08x.
|
(Dollars in thousands)
|
Residential
Mortgage Loans
|
Commercial
Mortgage Loans
|
C&I Loans
|
Construction
Loans
|
Consumer and
Finance Leases
|
Total
|
||||||
As of September 30, 2011
|
||||||||||||
Non-performing loans held for investment charged-off to realizable value
|
$ 248,830
|
$ 19,097
|
$ 53,909
|
$ 62,760
|
$ 1,434
|
$ 386,030
|
||||||
Other non-performing loans held for investment
|
115,731
|
169,229
|
261,451
|
207,651
|
43,597
|
797,659
|
||||||
Total non-performing loans held for investment
|
$ 364,561
|
$ 188,326
|
$ 315,360
|
$ 270,411
|
$ 45,031
|
$ 1,183,689
|
||||||
Allowance to non-performing loans held for investment
|
19.02%
|
53.52%
|
55.96%
|
41.41%
|
135.70%
|
43.90%
|
||||||
Allowance to non-performing loans held for investment, excluding non-performing loans charged-off to realizable value
|
||||||||||||
59.91%
|
59.56%
|
67.50%
|
53.92%
|
140.17%
|
65.15%
|
|||||||
As of June 30, 2011
|
||||||||||||
Non-performing loans held for investment charged-off to realizable value
|
$ 247,594
|
$ 16,444
|
$ 68,227
|
$ 62,733
|
$ 1,545
|
$ 396,543
|
||||||
Other non-performing loans held for investment
|
132,571
|
179,593
|
241,661
|
217,553
|
40,520
|
811,898
|
||||||
Total non-performing loans held for investment
|
$ 380,165
|
$ 196,037
|
$ 309,888
|
$ 280,286
|
$ 42,065
|
$ 1,208,441
|
||||||
Allowance to non-performing loans held for investment
|
17.73%
|
46.31%
|
60.85%
|
46.86%
|
149.25%
|
44.76%
|
||||||
Allowance to non-performing loans held for investment, excluding non-performing loans charged-off to realizable value
|
||||||||||||
50.84%
|
50.55%
|
78.03%
|
60.37%
|
154.94%
|
66.62%
|
|||||||
(Dollars in thousands)
|
Residential
Mortgage Loans
|
Commercial
Mortgage Loans
|
C&I Loans
|
Construction
Loans
|
Consumer and
Finance Leases
|
Total
|
||||||||||||||||||
As of September 30, 2011
|
||||||||||||||||||||||||
Impaired loans without specific reserves:
|
||||||||||||||||||||||||
Principal balance of loans, net of charge-offs
|
$
|
171,594
|
$
|
35,912
|
$
|
42,033
|
$
|
15,550
|
$
|
1,583
|
$
|
266,672
|
||||||||||||
Impaired loans with specific reserves:
|
||||||||||||||||||||||||
Principal balance of loans, net of charge-offs
|
411,880
|
210,972
|
341,977
|
222,200
|
13,923
|
1,200,952
|
||||||||||||||||||
Allowance for loan and lease losses
|
49,104
|
36,174
|
77,932
|
48,216
|
2,878
|
214,304
|
||||||||||||||||||
Allowance for loan and lease losses to principal balance
|
11.92
|
%
|
17.15
|
%
|
22.79
|
%
|
21.70
|
%
|
20.67
|
%
|
17.84
|
%
|
||||||||||||
Loans with general allowance:
|
||||||||||||||||||||||||
Principal balance of loans
|
2,290,492
|
1,337,903
|
3,739,164
|
236,062
|
1,561,897
|
9,165,518
|
||||||||||||||||||
Allowance for loan and lease losses
|
20,228
|
64,626
|
98,541
|
63,758
|
58,230
|
305,383
|
||||||||||||||||||
Allowance for loan and lease losses to principal balance
|
0.88
|
%
|
4.83
|
%
|
2.64
|
%
|
27.01
|
%
|
3.73
|
%
|
3.33
|
%
|
||||||||||||
Total loans held for investment:
|
||||||||||||||||||||||||
Principal balance of loans
|
$
|
2,873,966
|
$
|
1,584,787
|
$
|
4,123,174
|
$
|
473,812
|
$
|
1,577,403
|
$
|
10,633,142
|
||||||||||||
Allowance for loan and lease losses
|
69,332
|
100,800
|
176,473
|
111,974
|
61,108
|
519,687
|
||||||||||||||||||
Allowance for loan and lease losses to principal balance
|
2.41
|
%
|
6.36
|
%
|
4.28
|
%
|
23.63
|
%
|
3.87
|
%
|
4.89
|
%
|
||||||||||||
As of June 30, 2011
|
||||||||||||||||||||||||
Impaired loans without specific reserves:
|
||||||||||||||||||||||||
Principal balance of loans, net of charge-offs
|
$
|
170,109
|
$
|
23,357
|
$
|
59,138
|
$
|
22,533
|
$
|
1,545
|
$
|
276,682
|
||||||||||||
Impaired loans with specific reserves:
|
||||||||||||||||||||||||
Principal balance of loans, net of charge-offs
|
397,817
|
218,937
|
311,406
|
268,326
|
10,062
|
1,206,548
|
||||||||||||||||||
Allowance for loan and lease losses
|
52,073
|
30,402
|
92,162
|
71,149
|
678
|
246,464
|
||||||||||||||||||
Allowance for loan and lease losses to principal balance
|
13.09
|
%
|
13.89
|
%
|
29.60
|
%
|
26.52
|
%
|
6.74
|
%
|
20.43
|
%
|
||||||||||||
Loans with general allowance:
|
||||||||||||||||||||||||
Principal balance of loans
|
2,313,063
|
1,348,339
|
3,795,104
|
225,075
|
1,600,714
|
9,282,295
|
||||||||||||||||||
Allowance for loan and lease losses
|
15,331
|
60,383
|
96,400
|
60,195
|
62,105
|
294,414
|
||||||||||||||||||
Allowance for loan and lease losses to principal balance
|
0.66
|
%
|
4.48
|
%
|
2.54
|
%
|
26.74
|
%
|
3.88
|
%
|
3.17
|
%
|
||||||||||||
Total loans held for investment:
|
||||||||||||||||||||||||
Principal balance of loans
|
$
|
2,880,989
|
$
|
1,590,633
|
$
|
4,165,648
|
$
|
515,934
|
$
|
1,612,321
|
$
|
10,765,525
|
||||||||||||
Allowance for loan and lease losses
|
67,404
|
90,785
|
188,562
|
131,344
|
62,783
|
540,878
|
||||||||||||||||||
Allowance for loan and lease losses to principal balance
|
2.34
|
%
|
5.71
|
%
|
4.53
|
%
|
25.46
|
%
|
3.89
|
%
|
5.02
|
%
|
||||||||||||
Quarter Ended
|
|||||||||||||||||
September 30,
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
|||||||||||||
2011
|
2011
|
2011
|
2010
|
2010
|
|||||||||||||
Residential mortgage
|
2.24
|
%
|
1.24
|
%
|
0.63
|
%
|
2.20
|
%
|
(1)
|
1.52
|
%
|
||||||
Commercial mortgage
|
0.84
|
%
|
0.81
|
%
|
7.37
|
%
|
7.56
|
%
|
(2)
|
2.88
|
%
|
||||||
Commercial and Industrial
|
2.09
|
%
|
1.01
|
%
|
1.54
|
%
|
2.73
|
%
|
(3)
|
1.82
|
%
|
||||||
Construction
|
12.78
|
%
|
28.62
|
%
|
8.50
|
%
|
57.61
|
%
|
(4)
|
18.84
|
%
|
||||||
Consumer and finance leases
|
2.30
|
%
|
2.43
|
%
|
2.43
|
%
|
3.07
|
%
|
3.00
|
%
|
|||||||
Total loans
|
2.50
|
%
|
2.91
|
%
|
2.74
|
%
|
8.27
|
%
|
(5)
|
3.74
|
%
|
||||||
(1) Includes net charge-offs totaling $7.8 million associated with non-performing residential mortgage loans sold in a bulk sale.
|
|||||||||||||||||
(2) Includes net charge-offs totaling $29.5 million associated with loans transferred to held for sale. Commercial mortgage net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale, was 0.80%.
|
|||||||||||||||||
(3) Includes net charge-offs totaling $8.6 million associated with loans transferred to held for sale. Commercial and Industrial net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale, was 1.93%.
|
|||||||||||||||||
(4) Includes net charge-offs totaling $127.0 million associated with loans transferred to held for sale. Construction net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale, was 16.40%.
|
|||||||||||||||||
(5) Includes net charge-offs totaling $165.1 million associated with loans transferred to held for sale. Total net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale, was 2.96%.
|
|||||||||||||||||
Quarter Ended
|
|||||||||||||||||||
September 30,
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
|||||||||||||||
2011
|
2011
|
2011
|
2010
|
2010
|
|||||||||||||||
PUERTO RICO:
|
|||||||||||||||||||
Residential mortgage
|
2.50
|
%
|
1.39
|
%
|
0.39
|
%
|
2.39
|
%
|
(3)
|
1.61
|
%
|
||||||||
Commercial mortgage
|
0.99
|
%
|
0.34
|
%
|
10.07
|
%
|
10.64
|
%
|
(4)
|
2.49
|
%
|
||||||||
Commercial and Industrial
|
2.20
|
%
|
1.08
|
%
|
1.55
|
%
|
2.79
|
%
|
(5)
|
1.92
|
%
|
||||||||
Construction
|
15.02
|
%
|
6.90
|
%
|
8.77
|
%
|
70.85
|
%
|
(6)
|
8.30
|
%
|
||||||||
Consumer and finance leases
|
2.33
|
%
|
2.49
|
%
|
2.50
|
%
|
3.10
|
%
|
2.97
|
%
|
|||||||||
Total loans
|
2.62
|
%
|
1.57
|
%
|
2.82
|
%
|
9.02
|
%
|
(7)
|
2.61
|
%
|
||||||||
VIRGIN ISLANDS:
|
|||||||||||||||||||
Residential mortgage
|
0.19
|
%
|
-0.13
|
%
|
(1)
|
0.05
|
%
|
0.10
|
%
|
0.13
|
%
|
||||||||
Commercial mortgage
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
|||||||||
Commercial and Industrial
|
0.00
|
%
|
-0.19
|
%
|
(2)
|
1.59
|
%
|
0.00
|
%
|
-0.01
|
%
|
(2)
|
|||||||
Construction
|
9.78
|
%
|
77.30
|
%
|
0.16
|
%
|
12.66
|
%
|
0.00
|
%
|
|||||||||
Consumer and finance leases
|
2.34
|
%
|
0.75
|
%
|
1.05
|
%
|
1.97
|
%
|
1.56
|
%
|
|||||||||
Total loans
|
1.84
|
%
|
14.59
|
%
|
0.45
|
%
|
2.78
|
%
|
0.18
|
%
|
|||||||||
FLORIDA:
|
|||||||||||||||||||
Residential mortgage
|
3.27
|
%
|
2.07
|
%
|
3.26
|
%
|
3.45
|
%
|
2.59
|
%
|
|||||||||
Commercial mortgage
|
0.62
|
%
|
2.00
|
%
|
1.65
|
%
|
0.28
|
%
|
4.20
|
%
|
|||||||||
Commercial and Industrial
|
2.32
|
%
|
0.00
|
%
|
0.92
|
%
|
9.48
|
%
|
0.02
|
%
|
|||||||||
Construction
|
6.38
|
%
|
38.62
|
%
|
26.29
|
%
|
36.13
|
%
|
101.18
|
%
|
(8)
|
||||||||
Consumer and finance leases
|
1.02
|
%
|
2.85
|
%
|
1.59
|
%
|
3.91
|
%
|
8.37
|
%
|
|||||||||
Total loans
|
1.93
|
%
|
4.38
|
%
|
4.29
|
%
|
5.53
|
%
|
18.34
|
%
|
|||||||||
(1) For the second quarter of 2011, recoveries in residential mortgage loans in the Virgin Islands exceeded charge-offs.
|
|||||||||||||||||||
(2) For the second quarter of 2011 and third quarter of 2010, recoveries in commercial and industrial loans in the Virgin Islands exceeded charge-offs.
|
|||||||||||||||||||
(3) Includes net charge-offs totaling $7.8 million associated with non-performing residential mortgage loans sold in a bulk sale.
|
|||||||||||||||||||
(4) Includes net charge-offs totaling $29.5 million associated with loans transferred to held for sale. Commercial mortgage net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale in Puerto Rico, was 1.06%.
|
|||||||||||||||||||
(5) Includes net charge-offs totaling $8.6 million associated with loans transferred to held for sale. Commercial and Industrial net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale in Puerto Rico, was 1.95%.
|
|||||||||||||||||||
(6) Includes net charge-offs totaling $127.0 million associated with loans transferred to held for sale. Construction net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale in Puerto Rico, was 13.80%.
|
|||||||||||||||||||
(7) Includes net charge-offs totaling $165.1 million associated with loans transferred to held for sale. Total net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale in Puerto Rico, was 2.73%.
|
|||||||||||||||||||
(8) For the third quarter of 2010, net charge-offs for the construction loan portfolio in Florida were $40 million which once annualized for ratio calculation exceeded the average balance of this portfolio.
|
|||||||||||||||||||
(In thousands, except ratios and per share information)
|
||||||||||||||||||||
September 30,
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
||||||||||||||||
2011
|
2011
|
2011
|
2010
|
2010
|
||||||||||||||||
Tangible Equity:
|
||||||||||||||||||||
Total equity - GAAP
|
$
|
986,847
|
$
|
1,009,578
|
$
|
1,027,269
|
$
|
1,057,959
|
$
|
1,321,979
|
||||||||||
Preferred equity
|
(430,498
|
)
|
(428,703
|
)
|
(426,724
|
)
|
(425,009
|
)
|
(411,876
|
)
|
||||||||||
Goodwill
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
||||||||||
Core deposit intangible
|
(12,277
|
)
|
(12,866
|
)
|
(13,454
|
)
|
(14,043
|
)
|
(14,673
|
)
|
||||||||||
Tangible common equity
|
$
|
515,974
|
$
|
539,911
|
$
|
558,993
|
$
|
590,809
|
$
|
867,332
|
||||||||||
Tangible Assets:
|
||||||||||||||||||||
Total assets - GAAP
|
$
|
13,475,572
|
$
|
14,113,973
|
$
|
15,104,090
|
$
|
15,593,077
|
$
|
16,678,879
|
||||||||||
Goodwill
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
||||||||||
Core deposit intangible
|
(12,277
|
)
|
(12,866
|
)
|
(13,454
|
)
|
(14,043
|
)
|
(14,673
|
)
|
||||||||||
Tangible assets
|
$
|
13,435,197
|
$
|
14,073,009
|
$
|
15,062,538
|
$
|
15,550,936
|
$
|
16,636,108
|
||||||||||
Common shares outstanding
|
21,304
|
21,304
|
21,304
|
21,304
|
21,304
|
|||||||||||||||
Tangible common equity ratio
|
3.84
|
%
|
3.84
|
%
|
3.71
|
%
|
3.80
|
%
|
5.21
|
%
|
||||||||||
Tangible book value per common share
|
$
|
24.22
|
$
|
25.34
|
$
|
26.24
|
$
|
27.73
|
$
|
40.71
|
||||||||||
(Dollars in thousands)
|
As of
|
|||||||||||||||||||
September 30,
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
||||||||||||||||
2011
|
2011
|
2011
|
2010
|
2010
|
||||||||||||||||
Tier 1 Common Equity:
|
||||||||||||||||||||
Total equity - GAAP
|
$
|
986,847
|
$
|
1,009,578
|
$
|
1,027,269
|
$
|
1,057,959
|
$
|
1,321,979
|
||||||||||
Qualifying preferred stock
|
(430,498
|
)
|
(428,703
|
)
|
(426,724
|
)
|
(425,009
|
)
|
(411,876
|
)
|
||||||||||
Unrealized gain on available-for-sale securities (1)
|
(13,957
|
)
|
(12,659
|
)
|
(15,453
|
)
|
(17,736
|
)
|
(30,295
|
)
|
||||||||||
Disallowed deferred tax asset (2)
|
(267
|
)
|
(272
|
)
|
(981
|
)
|
(815
|
)
|
(43,552
|
)
|
||||||||||
Goodwill
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
||||||||||
Core deposit intangible
|
(12,277
|
)
|
(12,866
|
)
|
(13,454
|
)
|
(14,043
|
)
|
(14,673
|
)
|
||||||||||
Cumulative change gain in fair value of liabilities accounted for under a fair value option
|
||||||||||||||||||||
(952
|
)
|
(1,889
|
)
|
(2,156
|
)
|
(2,185
|
)
|
(2,654
|
)
|
|||||||||||
Other disallowed assets
|
(907
|
)
|
(808
|
)
|
(881
|
)
|
(226
|
)
|
(636
|
)
|
||||||||||
Tier 1 common equity
|
$
|
499,890
|
$
|
524,283
|
$
|
539,522
|
$
|
569,847
|
$
|
790,195
|
||||||||||
Total risk-weighted assets
|
$
|
10,433,620
|
$
|
10,630,162
|
$
|
11,183,518
|
$
|
11,372,856
|
$
|
11,930,854
|
||||||||||
Tier 1 common equity to risk-weighted assets ratio
|
4.79
|
%
|
4.93
|
%
|
4.82
|
%
|
5.01
|
%
|
6.62
|
%
|
||||||||||
1- Tier 1 capital excludes net unrealized gains (losses) on available-for-sale debt securities and net unrealized gains on available-for-sale equity securities with readily determinable fair values, in accordance with regulatory risk-based capital guidelines. In arriving at Tier 1 capital, institutions are required to deduct net unrealized losses on available-for-sale equity securities with readily determinable fair values, net of tax.
|
||||||||||||||||||||
2- Approximately $12 million of the Corporation's deferred tax assets at September 30, 2011 (June 30, 2011 - $11 million; March 31, 2011 - $12 million December 31, 2010 - $13 million; September 30, 2010 - $64 million) was included without limitation in regulatory capital pursuant to the risk-based capital guidelines, while approximately $0.3 million of such assets at June 30, 2011 (March 31, 2011 - $1 million; December 31, 2010 - $0.8 million; September 30, 2010 - $44 million; June 30, 2010 - $38 million) exceeded the limitation imposed by these guidelines and, as "disallowed deferred tax assets," was deducted in arriving at Tier 1 capital. According to regulatory capital guidelines, the deferred tax assets that are dependent upon future taxable income are limited for inclusion in Tier 1 capital to the lesser of: (i) the amount of such deferred tax asset that the entity expects to realize within one year of the calendar quarter end-date, based on its projected future taxable income for that year, or (ii) 10% of the amount of the entity's Tier 1 capital. Approximately $7 million of the Corporation's other net deferred tax liability at September 30, 2011 (June 30, 2011 - $5 million; March 31, 2011 - $5 million; December 31, 2010 - $5 million; September 30, 2010 - $7 million) represented primarily the deferred tax effects of unrealized gains and losses on available-for-sale debt securities, which are permitted to be excluded prior to deriving the amount of net deferred tax assets subject to limitation under the guidelines.
|
FIRST BANCORP
|
||||||||||||
Condensed Consolidated Statements of Financial Condition
|
||||||||||||
As of
|
||||||||||||
September 30,
|
June 30,
|
December 31,
|
||||||||||
(In thousands, except for share information)
|
2011
|
2011
|
2010
|
|||||||||
ASSETS
|
||||||||||||
Cash and due from banks
|
$
|
612,721
|
$
|
239,488
|
$
|
254,723
|
||||||
Money market investments:
|
||||||||||||
Federal funds sold
|
3,823
|
5,369
|
6,236
|
|||||||||
Time deposits with other financial institutions
|
855
|
855
|
1,346
|
|||||||||
Other short-term investments
|
182,996
|
107,985
|
107,978
|
|||||||||
Total money market investments
|
187,674
|
114,209
|
115,560
|
|||||||||
Investment securities available for sale, at fair value
|
1,863,952
|
2,834,086
|
2,744,453
|
|||||||||
Investment securities held to maturity, at amortized cost
|
-
|
-
|
453,387
|
|||||||||
Other equity securities
|
40,667
|
42,252
|
55,932
|
|||||||||
Total investment securities
|
1,904,619
|
2,876,338
|
3,253,772
|
|||||||||
Investment in unconsolidated entities
|
41,735
|
46,092
|
-
|
|||||||||
Loans, net of allowance for loan and lease losses of $519,687
|
||||||||||||
(June 30, 2011 - $540,878; December 31, 2010 - $553,025)
|
10,113,455
|
10,224,647
|
11,102,411
|
|||||||||
Loans held for sale, at lower of cost or market
|
13,605
|
20,781
|
300,766
|
|||||||||
Total loans, net
|
10,127,060
|
10,245,428
|
11,403,177
|
|||||||||
Premises and equipment, net
|
199,079
|
203,140
|
209,014
|
|||||||||
Other real estate owned
|
109,514
|
96,618
|
84,897
|
|||||||||
Accrued interest receivable on loans and investments
|
45,471
|
51,719
|
59,061
|
|||||||||
Due from customers on acceptances
|
322
|
696
|
1,439
|
|||||||||
Other assets
|
247,377
|
240,245
|
211,434
|
|||||||||
Total assets
|
$
|
13,475,572
|
$
|
14,113,973
|
$
|
15,593,077
|
||||||
LIABILITIES
|
||||||||||||
Deposits:
|
||||||||||||
Non-interest-bearing deposits
|
$
|
680,242
|
$
|
720,573
|
$
|
668,052
|
||||||
Interest-bearing deposits
|
9,977,069
|
10,352,155
|
11,391,058
|
|||||||||
Total deposits
|
10,657,311
|
11,072,728
|
12,059,110
|
|||||||||
Securities sold under agreements to repurchase
|
1,000,000
|
1,200,000
|
1,400,000
|
|||||||||
Advances from the Federal Home Loan Bank (FHLB)
|
409,440
|
420,440
|
653,440
|
|||||||||
Notes payable
|
21,114
|
19,715
|
26,449
|
|||||||||
Other borrowings
|
231,959
|
231,959
|
231,959
|
|||||||||
Bank acceptances outstanding
|
322
|
696
|
1,439
|
|||||||||
Accounts payable and other liabilities
|
168,579
|
158,857
|
162,721
|
|||||||||
Total liabilities
|
12,488,725
|
13,104,395
|
14,535,118
|
|||||||||
STOCKHOLDERS' EQUITY
|
||||||||||||
Preferred Stock, authorized 50,000,000 shares: issued 22,828,174 shares;
|
||||||||||||
outstanding 2,946,046 shares; aggregate liquidation value $487,221
|
430,498
|
428,703
|
425,009
|
|||||||||
Common stock, $0.10 par value, authorized 2,000,000,000 shares; issued 21,963,522 shares
|
2,196
|
2,196
|
2,196
|
|||||||||
Less: Treasury stock (at par value)
|
(66
|
)
|
(66
|
)
|
(66
|
)
|
||||||
Common stock outstanding, 21,303,669 shares outstanding
|
2,130
|
2,130
|
2,130
|
|||||||||
Additional paid-in capital
|
319,528
|
319,505
|
319,459
|
|||||||||
Retained earnings
|
220,764
|
246,605
|
293,643
|
|||||||||
Accumulated other comprehensive income
|
13,927
|
12,635
|
17,718
|
|||||||||
Total stockholders' equity
|
986,847
|
1,009,578
|
1,057,959
|
|||||||||
Total liabilities and stockholders' equity
|
$
|
13,475,572
|
$
|
14,113,973
|
$
|
15,593,077
|
||||||
FIRST BANCORP
|
||||||||||||||||||||
Condensed Consolidated Statements of Loss
|
||||||||||||||||||||
Quarter Ended
|
Nine-Month Period Ended
|
|||||||||||||||||||
September 30,
|
June 30,
|
September 30,
|
September 30,
|
September 30,
|
||||||||||||||||
(In thousands, except per share information)
|
2011
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||||
Net interest income:
|
||||||||||||||||||||
Interest income
|
$
|
158,542
|
$
|
163,418
|
$
|
204,028
|
$
|
502,863
|
$
|
639,880
|
||||||||||
Interest expense
|
64,287
|
68,983
|
90,326
|
207,894
|
290,253
|
|||||||||||||||
Net interest income
|
94,255
|
94,435
|
113,702
|
294,969
|
349,627
|
|||||||||||||||
Provision for loan and lease losses
|
46,446
|
59,184
|
120,482
|
194,362
|
438,240
|
|||||||||||||||
Net interest income (loss) after provision for loan and lease losses
|
47,809
|
35,251
|
(6,780
|
)
|
100,607
|
(88,613
|
)
|
|||||||||||||
Non-interest income:
|
||||||||||||||||||||
Other service charges on loans
|
1,485
|
1,456
|
1,963
|
4,659
|
5,205
|
|||||||||||||||
Service charges on deposit accounts
|
3,098
|
3,054
|
3,325
|
9,484
|
10,294
|
|||||||||||||||
Mortgage banking activities
|
3,676
|
9,336
|
6,474
|
19,603
|
11,114
|
|||||||||||||||
Net gain on investments and impairments
|
12,156
|
21,342
|
48,281
|
52,839
|
103,282
|
|||||||||||||||
Loss on early extinguishment of borrowings
|
(9,012
|
)
|
(1,823
|
)
|
(47,405
|
)
|
(10,835
|
)
|
(47,405
|
)
|
||||||||||
Equity in losses of unconsolidated entities
|
(4,357
|
)
|
(1,536
|
)
|
-
|
(5,893
|
)
|
-
|
||||||||||||
Other non-interest income
|
6,918
|
7,033
|
6,628
|
23,454
|
21,627
|
|||||||||||||||
Total non-interest income
|
13,964
|
38,862
|
19,266
|
93,311
|
104,117
|
|||||||||||||||
Non-interest expenses:
|
||||||||||||||||||||
Employees' compensation and benefits
|
29,375
|
29,407
|
29,849
|
89,221
|
92,535
|
|||||||||||||||
Occupancy and equipment
|
15,468
|
15,603
|
14,655
|
46,321
|
43,957
|
|||||||||||||||
Business promotion
|
2,509
|
3,628
|
3,226
|
8,801
|
8,771
|
|||||||||||||||
Professional fees
|
5,983
|
6,072
|
4,533
|
17,192
|
15,424
|
|||||||||||||||
Taxes, other than income taxes
|
3,420
|
3,278
|
3,316
|
9,953
|
10,954
|
|||||||||||||||
Insurance and supervisory fees
|
15,041
|
14,404
|
16,787
|
44,622
|
51,911
|
|||||||||||||||
Net loss on real estate owned (REO) operations
|
4,952
|
5,971
|
8,193
|
16,423
|
22,702
|
|||||||||||||||
Other non-interest expenses
|
6,183
|
8,068
|
8,123
|
19,695
|
32,401
|
|||||||||||||||
Total non-interest expenses
|
82,931
|
86,431
|
88,682
|
252,228
|
278,655
|
|||||||||||||||
Loss before income taxes
|
(21,158
|
)
|
(12,318
|
)
|
(76,196
|
)
|
(58,310
|
)
|
(263,151
|
)
|
||||||||||
Income tax (expense) benefit
|
(2,888
|
)
|
(2,606
|
)
|
963
|
(9,080
|
)
|
(9,721
|
)
|
|||||||||||
Net loss
|
$
|
(24,046
|
)
|
$
|
(14,924
|
)
|
$
|
(75,233
|
)
|
$
|
(67,390
|
)
|
$
|
(272,872
|
)
|
|||||
Net (loss) income attributable to common stockholders - basic
|
$
|
(31,143
|
)
|
$
|
(22,205
|
)
|
$
|
357,787
|
$
|
(88,785
|
)
|
$
|
147,826
|
|||||||
Net (loss) income attributable to common stockholders - diluted
|
$
|
(31,143
|
)
|
$
|
(22,205
|
)
|
$
|
363,413
|
$
|
(88,785
|
)
|
$
|
153,452
|
|||||||
Net (loss) income per common share:
|
||||||||||||||||||||
Basic
|
$
|
(1.46
|
)
|
$
|
(1.04
|
)
|
$
|
31.30
|
$
|
(4.17
|
)
|
$
|
18.61
|
|||||||
Diluted
|
$
|
(1.46
|
)
|
$
|
(1.04
|
)
|
$
|
4.20
|
$
|
(4.17
|
)
|
$
|
4.61
|
|||||||
(In thousands, except for per share and financial ratios)
|
Quarter Ended
|
Nine-Month Period Ended
|
||||||||||||||||||||||
September 30,
|
June 30,
|
September 30,
|
September 30,
|
September 30,
|
||||||||||||||||||||
2011
|
2011
|
2010
|
2011
|
2010
|
||||||||||||||||||||
Condensed Income Statements:
|
||||||||||||||||||||||||
Total interest income
|
$
|
158,542
|
$
|
163,418
|
$
|
204,028
|
$
|
502,863
|
$
|
639,880
|
||||||||||||||
Total interest expense
|
64,287
|
68,983
|
90,326
|
207,894
|
290,253
|
|||||||||||||||||||
Net interest income
|
94,255
|
94,435
|
113,702
|
294,969
|
349,627
|
|||||||||||||||||||
Provision for loan and lease losses
|
46,446
|
59,184
|
120,482
|
194,362
|
438,240
|
|||||||||||||||||||
Non-interest income
|
13,964
|
38,862
|
19,266
|
93,311
|
104,117
|
|||||||||||||||||||
Non-interest expenses
|
82,931
|
86,431
|
88,682
|
252,228
|
278,655
|
|||||||||||||||||||
Loss before income taxes
|
(21,158
|
)
|
(12,318
|
)
|
(76,196
|
)
|
(58,310
|
)
|
(263,151
|
)
|
||||||||||||||
Income tax (expense) benefit
|
(2,888
|
)
|
(2,606
|
)
|
963
|
(9,080
|
)
|
(9,721
|
)
|
|||||||||||||||
Net loss
|
(24,046
|
)
|
(14,924
|
)
|
(75,233
|
)
|
(67,390
|
)
|
(272,872
|
)
|
||||||||||||||
Net loss (gain) attributable to common stockholders - basic
|
(31,143
|
)
|
(22,205
|
)
|
357,787
|
(88,785
|
)
|
147,826
|
||||||||||||||||
Net loss attributable to common stockholders - diluted
|
(31,143
|
)
|
(22,205
|
)
|
363,413
|
(88,785
|
)
|
153,452
|
||||||||||||||||
Per Common Share Results (1):
|
||||||||||||||||||||||||
Net loss per share basic
|
$
|
(1.46
|
)
|
$
|
(1.04
|
)
|
$
|
31.30
|
$
|
(4.17
|
)
|
$
|
18.61
|
|||||||||||
Net loss per share diluted
|
$
|
(1.46
|
)
|
$
|
(1.04
|
)
|
$
|
4.20
|
$
|
(4.17
|
)
|
$
|
4.61
|
|||||||||||
Cash dividends declared
|
$
|
-
|
$ -
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||||||||||||
Average shares outstanding
|
21,303
|
21,303
|
11,432
|
21,303
|
7,942
|
|||||||||||||||||||
Average shares outstanding diluted
|
21,303
|
21,303
|
86,552
|
33,257
|
||||||||||||||||||||
Book value per common share
|
$
|
26.12
|
$
|
27.27
|
$
|
42.72
|
$
|
26.12
|
$
|
42.72
|
||||||||||||||
Tangible book value per common share (2)
|
$
|
24.22
|
$
|
25.34
|
$
|
40.71
|
$
|
24.22
|
$
|
40.71
|
||||||||||||||
Selected Financial Ratios (In Percent):
|
||||||||||||||||||||||||
Profitability:
|
||||||||||||||||||||||||
Return on Average Assets
|
(0.69
|
)
|
(0.41
|
)
|
(1.73
|
)
|
(0.62
|
)
|
(1.98
|
)
|
||||||||||||||
Interest Rate Spread (3)
|
2.61
|
2.42
|
2.55
|
2.55
|
2.46
|
|||||||||||||||||||
Net Interest Margin (3)
|
2.86
|
2.68
|
2.83
|
2.81
|
2.74
|
|||||||||||||||||||
Return on Average Total Equity
|
(9.46
|
)
|
(5.81
|
)
|
(21.28
|
)
|
(8.78
|
)
|
(24.40
|
)
|
||||||||||||||
Return on Average Common Equity
|
(21.33
|
)
|
(14.77
|
)
|
(50.80
|
)
|
(19.83
|
)
|
(62.75
|
)
|
||||||||||||||
Average Total Equity to Average Total Assets
|
7.31
|
7.01
|
8.13
|
7.02
|
8.11
|
|||||||||||||||||||
Tangible common equity ratio (2)
|
3.84
|
3.84
|
5.21
|
3.84
|
5.21
|
|||||||||||||||||||
Dividend payout ratio
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||
Efficiency ratio (4)
|
76.63
|
64.84
|
66.69
|
64.96
|
61.41
|
|||||||||||||||||||
Asset Quality:
|
||||||||||||||||||||||||
Allowance for loan and lease losses to loans held for investment
|
4.89
|
5.02
|
5.00
|
4.89
|
5.00
|
|||||||||||||||||||
Net charge-offs (annualized) to average loans
|
2.50
|
2.91
|
3.74
|
2.72
|
3.67
|
|||||||||||||||||||
Provision for loan and lease losses to net charge-offs
|
68.67
|
73.98
|
103.63
|
85.36
|
122.47
|
|||||||||||||||||||
Non-performing assets to total assets
|
10.22
|
(5
|
)
|
9.85
|
(5
|
)
|
10.01
|
10.22
|
(5
|
)
|
10.01
|
|||||||||||||
Non-performing loans held for investment to total loans held for investment
|
11.13
|
11.23
|
12.36
|
11.13
|
12.36
|
|||||||||||||||||||
Allowance to total non-performing loans held for investment
|
43.90
|
44.76
|
40.41
|
43.90
|
40.41
|
|||||||||||||||||||
Allowance to total non-performing loans held for investment excluding residential real estate loans
|
||||||||||||||||||||||||
63.44
|
65.30
|
56.43
|
63.44
|
56.43
|
||||||||||||||||||||
Other Information:
|
||||||||||||||||||||||||
Common Stock Price: End of period
|
$
|
2.80
|
$
|
4.31
|
$
|
4.20
|
$
|
2.80
|
$
|
4.20
|
||||||||||||||
1 - All share and per share data have been adjusted to retroactively reflect the 1-for-15 reverse stock split effected January 7, 2011.
|
||||||||||||||||||||||||
2- Non-GAAP measure. See page 20 for GAAP to Non-GAAP reconciliations.
|
||||||||||||||||||||||||
3- On a tax-equivalent basis. See page 7 for GAAP to Non-GAAP reconciliations and refer to discussions in Tables 2 and 3 below.
|
||||||||||||||||||||||||
4- Non-interest expenses to the sum of net interest income and non-interest income. The denominator includes non-recurring income and changes in the fair value of derivative instruments and financial liabilities measured at fair value.
|
||||||||||||||||||||||||
5- Non-performing assets, excluding non-performing loans held for sale, to total assets, excluding non-performing loans held for sale, was 10.19% and 9.81% as of September 30, 2011 and June 30, 2011, respectively.
|
||||||||||||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||||||||||
Average volume
|
Interest income (1) / expense
|
Average rate (1)
|
|||||||||||||||||||||||||
September 30,
|
June 30,
|
September 30,
|
September 30,
|
June 30,
|
September 30,
|
September 30,
|
June 30,
|
September 30,
|
|||||||||||||||||||
Quarter ended
|
2011
|
2011
|
2010
|
2011
|
2011
|
2010
|
2011
|
2011
|
2010
|
||||||||||||||||||
Interest-earning assets:
|
|||||||||||||||||||||||||||
Money market & other short-term investments
|
$
|
482,057
|
$
|
558,388
|
$
|
794,318
|
$
|
325
|
$
|
400
|
$
|
511
|
0.27
|
%
|
0.29
|
%
|
0.26
|
%
|
|||||||||
Government obligations (2)
|
1,273,109
|
1,829,696
|
1,361,925
|
4,646
|
6,214
|
8,023
|
1.45
|
%
|
1.36
|
%
|
2.34
|
%
|
|||||||||||||||
Mortgage-backed securities
|
988,900
|
1,114,221
|
2,416,485
|
8,771
|
10,560
|
27,491
|
3.52
|
%
|
3.80
|
%
|
4.51
|
%
|
|||||||||||||||
Corporate bonds
|
2,000
|
2,000
|
2,000
|
29
|
29
|
29
|
5.75
|
%
|
5.82
|
%
|
5.75
|
%
|
|||||||||||||||
FHLB stock
|
40,265
|
45,061
|
63,950
|
396
|
452
|
640
|
3.90
|
%
|
4.02
|
%
|
3.97
|
%
|
|||||||||||||||
Equity securities
|
1,377
|
1,377
|
1,377
|
-
|
-
|
-
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
|||||||||||||||
Total investments (3)
|
2,787,708
|
3,550,743
|
4,640,055
|
14,167
|
17,655
|
36,694
|
2.02
|
%
|
1.99
|
%
|
3.14
|
%
|
|||||||||||||||
Residential mortgage loans
|
2,825,394
|
2,890,228
|
3,454,820
|
38,822
|
40,171
|
51,839
|
5.45
|
%
|
5.57
|
%
|
5.95
|
%
|
|||||||||||||||
Construction loans
|
526,383
|
659,887
|
1,240,522
|
3,418
|
4,268
|
8,096
|
2.58
|
%
|
2.59
|
%
|
2.59
|
%
|
|||||||||||||||
C&I and commercial mortgage loans
|
5,887,610
|
5,811,917
|
5,968,781
|
60,332
|
58,921
|
65,852
|
4.07
|
%
|
4.07
|
%
|
4.38
|
%
|
|||||||||||||||
Finance leases
|
258,139
|
267,816
|
293,956
|
5,385
|
5,570
|
5,937
|
8.28
|
%
|
8.34
|
%
|
8.01
|
%
|
|||||||||||||||
Consumer loans
|
1,334,900
|
1,367,447
|
1,484,976
|
38,893
|
39,522
|
43,326
|
11.56
|
%
|
11.59
|
%
|
11.58
|
%
|
|||||||||||||||
Total loans (4) (5)
|
10,832,426
|
10,997,295
|
12,443,055
|
146,850
|
148,452
|
175,050
|
5.38
|
%
|
5.41
|
%
|
5.58
|
%
|
|||||||||||||||
Total interest-earning assets
|
$
|
13,620,134
|
$
|
14,548,038
|
$
|
17,083,110
|
$
|
161,017
|
$
|
166,107
|
$
|
211,744
|
4.69
|
%
|
4.58
|
%
|
4.92
|
%
|
|||||||||
Interest-bearing liabilities:
|
|||||||||||||||||||||||||||
Brokered CDs
|
$
|
4,887,851
|
$
|
5,550,750
|
$
|
6,929,356
|
$
|
26,286
|
$
|
29,696
|
$
|
39,086
|
2.13
|
%
|
2.15
|
%
|
2.24
|
%
|
|||||||||
Other interest-bearing deposits
|
5,308,927
|
5,172,845
|
5,008,676
|
19,855
|
19,828
|
21,917
|
1.48
|
%
|
1.54
|
%
|
1.74
|
%
|
|||||||||||||||
Loans payable
|
-
|
-
|
-
|
-
|
-
|
-
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
|||||||||||||||
Other borrowed funds
|
1,336,508
|
1,592,538
|
2,214,076
|
12,750
|
15,262
|
21,618
|
3.78
|
%
|
3.84
|
%
|
3.87
|
%
|
|||||||||||||||
FHLB advances
|
411,168
|
493,242
|
850,060
|
3,795
|
4,220
|
7,179
|
3.66
|
%
|
3.43
|
%
|
3.35
|
%
|
|||||||||||||||
Total interest-bearing liabilities (6)
|
$
|
11,944,454
|
$
|
12,809,375
|
$
|
15,002,168
|
$
|
62,686
|
$
|
69,006
|
$
|
89,800
|
2.08
|
%
|
2.16
|
%
|
2.37
|
%
|
|||||||||
Net interest income
|
$
|
98,331
|
$
|
97,101
|
$
|
121,944
|
|||||||||||||||||||||
Interest rate spread
|
2.61
|
%
|
2.42
|
%
|
2.55
|
%
|
|||||||||||||||||||||
Net interest margin
|
2.86
|
%
|
2.68
|
%
|
2.83
|
%
|
|||||||||||||||||||||
1- On a tax-equivalent basis. The tax-equivalent yield was estimated by dividing the interest rate spread on exempt assets by 1 less Puerto Rico statutory tax rate (30% for the Corporation's subsidiaries other than IBEs and 25% for the Corporation's IBEs in 2011; 40.95% for the Corporation's subsidiaries other than IBEs and 35.95% for the Corporation's IBEs in 2010) and adding to it the cost of interest-bearing liabilities. When adjusted to a tax-equivalent basis, yields on taxable and exempt assets are comparable. Changes in the fair value of derivative instruments and unrealized gains or losses on liabilities measured at fair value are excluded from interest income and interest expense because the changes in valuation do not affect interest paid or received.
|
|||||||||||||||||||||||||||
2- Government obligations include debt issued by government sponsored agencies.
|
|||||||||||||||||||||||||||
3- Unrealized gains and losses in available-for-sale securities are excluded from the average volumes.
|
|||||||||||||||||||||||||||
4- Average loan balances include the average of total non-performing loans.
|
|||||||||||||||||||||||||||
5- Interest income on loans includes $2.5 million for each of the quarters ended September 30, 2011, June 30, 2011 and September 30, 2010, of income from prepayment penalties and late fees related to the Corporation's loan portfolio.
|
|||||||||||||||||||||||||||
6- Unrealized gains and losses on liabilities measured at fair value are excluded from the average volumes.
|
|||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||
Average volume
|
Interest income (1) / expense
|
Average rate (1)
|
||||||||||||||||
September 30,
|
September 30,
|
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
Nine-Month Period Ended
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Interest-earning assets:
|
||||||||||||||||||
Money market & other short-term investments
|
$
|
509,488
|
$
|
849,183
|
$
|
1,034
|
$
|
1,571
|
0.27
|
%
|
0.25
|
%
|
||||||
Government obligations (2)
|
1,482,025
|
1,356,257
|
17,049
|
25,000
|
1.54
|
%
|
2.46
|
%
|
||||||||||
Mortgage-backed securities
|
1,265,491
|
2,938,302
|
36,336
|
103,491
|
3.84
|
%
|
4.71
|
%
|
||||||||||
Corporate bonds
|
2,000
|
2,000
|
87
|
87
|
5.82
|
%
|
5.82
|
%
|
||||||||||
FHLB stock
|
45,512
|
67,046
|
1,561
|
2,058
|
4.59
|
%
|
4.10
|
%
|
||||||||||
Equity securities
|
1,377
|
1,516
|
1
|
15
|
0.10
|
%
|
1.32
|
%
|
||||||||||
Total investments (3)
|
3,305,893
|
5,214,304
|
56,068
|
132,222
|
2.27
|
%
|
3.39
|
%
|
||||||||||
Residential mortgage loans
|
2,991,200
|
3,518,566
|
126,837
|
158,244
|
5.67
|
%
|
6.01
|
%
|
||||||||||
Construction loans
|
664,889
|
1,388,771
|
14,063
|
25,981
|
2.83
|
%
|
2.50
|
%
|
||||||||||
C&I and commercial mortgage loans
|
5,869,011
|
6,270,952
|
177,444
|
198,642
|
4.04
|
%
|
4.24
|
%
|
||||||||||
Finance leases
|
268,124
|
304,350
|
16,649
|
18,503
|
8.30
|
%
|
8.13
|
%
|
||||||||||
Consumer loans
|
1,371,146
|
1,525,920
|
118,935
|
132,369
|
11.60
|
%
|
11.60
|
%
|
||||||||||
Total loans (4) (5)
|
11,164,370
|
13,008,559
|
453,928
|
533,739
|
5.44
|
%
|
5.49
|
%
|
||||||||||
Total interest-earning assets
|
$
|
14,470,263
|
$
|
18,222,863
|
$
|
509,996
|
$
|
665,961
|
4.71
|
%
|
4.89
|
%
|
||||||
Interest-bearing liabilities:
|
||||||||||||||||||
Brokered CDs
|
$
|
5,481,742
|
$
|
7,195,479
|
$
|
88,751
|
$
|
124,967
|
2.16
|
%
|
2.32
|
%
|
||||||
Other interest-bearing deposits
|
5,240,236
|
4,854,273
|
60,973
|
65,767
|
1.56
|
%
|
1.81
|
%
|
||||||||||
Loans payable
|
-
|
400,549
|
-
|
3,442
|
0.00
|
%
|
1.15
|
%
|
||||||||||
Other borrowed funds
|
1,528,747
|
2,697,408
|
43,234
|
75,998
|
3.78
|
%
|
3.77
|
%
|
||||||||||
FHLB advances
|
493,107
|
926,444
|
12,760
|
22,460
|
3.46
|
%
|
3.24
|
%
|
||||||||||
Total interest-bearing liabilities (6)
|
$
|
12,743,832
|
$
|
16,074,153
|
$
|
205,718
|
$
|
292,634
|
2.16
|
%
|
2.43
|
%
|
||||||
Net interest income
|
$
|
304,278
|
$
|
373,327
|
||||||||||||||
Interest rate spread
|
2.55
|
%
|
2.46
|
%
|
||||||||||||||
Net interest margin
|
2.81
|
%
|
2.74
|
%
|
||||||||||||||
1- On a tax-equivalent basis. The tax-equivalent yield was estimated by dividing the interest rate spread on exempt assets by 1 less Puerto Rico statutory tax rate (30% for the Corporation's subsidiaries other than IBEs and 25% for the Corporation's IBEs in 2011; 40.95% for the Corporation's subsidiaries other than IBEs and 35.95% for the Corporation's IBEs in 2010) and adding to it the cost of interest-bearing liabilities. When adjusted to a tax-equivalent basis, yields on taxable and exempt assets are comparable. Changes in the fair value of derivative instruments and unrealized gains or losses on liabilities measured at fair value are excluded from interest income and interest expense because the changes in valuation do not affect interest paid or received.
|
||||||||||||||||||
2- Government obligations include debt issued by government sponsored agencies.
|
||||||||||||||||||
3- Unrealized gains and losses in available-for-sale securities are excluded from the average volumes.
|
||||||||||||||||||
4- Average loan balances include the average of total non-performing loans.
|
||||||||||||||||||
5- Interest income on loans includes $7.2 million and $8.1 million for the nine-month periods ended September 30, 2011 and 2010, respectively, of income from prepayment penalties and late fees related to the Corporation's loan portfolio.
|
||||||||||||||||||
6- Unrealized gains and losses on liabilities measured at fair value are excluded from the average volumes.
|
||||||||||||||||||
Quarter Ended
|
Nine-Month Period Ended
|
||||||||||||||||||||
September 30,
|
June 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||||||
(In thousands)
|
2011
|
2011
|
2010
|
2011
|
2010
|
||||||||||||||||
Other service charges on loans
|
$
|
1,485
|
$
|
1,456
|
$
|
1,963
|
$
|
4,659
|
$
|
5,205
|
|||||||||||
Service charges on deposit accounts
|
3,098
|
3,054
|
3,325
|
9,484
|
10,294
|
||||||||||||||||
Mortgage banking activities
|
3,676
|
9,336
|
6,474
|
19,603
|
11,114
|
||||||||||||||||
Insurance income
|
1,058
|
1,063
|
1,658
|
3,454
|
6,079
|
||||||||||||||||
Broker-dealer income
|
173
|
783
|
501
|
1,004
|
2,055
|
||||||||||||||||
Other operating income
|
5,687
|
5,187
|
4,469
|
18,996
|
13,493
|
||||||||||||||||
Non-interest income before net gain on investments,
|
|||||||||||||||||||||
loss on early extinguishment of borrowings and
|
|||||||||||||||||||||
equity in losses of unconsolidated entities
|
15,177
|
20,879
|
18,390
|
57,200
|
48,240
|
||||||||||||||||
Proceeds from securities litigation settlement
|
-
|
-
|
-
|
679
|
-
|
||||||||||||||||
Gain on VISA shares
|
-
|
-
|
-
|
-
|
10,668
|
||||||||||||||||
Net gain on sale of investments
|
12,506
|
21,949
|
48,281
|
53,117
|
93,217
|
||||||||||||||||
OTTI on equity securities
|
-
|
-
|
-
|
-
|
(603
|
)
|
|||||||||||||||
OTTI on debt securities
|
(350
|
)
|
(607
|
)
|
-
|
(957
|
)
|
-
|
|||||||||||||
Net gain on investments
|
12,156
|
21,342
|
48,281
|
52,839
|
103,282
|
||||||||||||||||
Loss on early extinguishment of borrowings
|
(9,012
|
)
|
(1,823
|
)
|
(47,405
|
)
|
(10,835
|
)
|
(47,405
|
)
|
|||||||||||
Equity in losses of unconsolidated entities
|
(4,357
|
)
|
(1,536
|
)
|
-
|
(5,893
|
)
|
-
|
|||||||||||||
$
|
13,964
|
$
|
38,862
|
$
|
19,266
|
$
|
93,311
|
$
|
104,117
|
||||||||||||
Quarter Ended
|
Nine-Month Period Ended
|
|||||||||||||||
September 30,
|
June 30,
|
September 30,
|
September 30,
|
September 30,
|
||||||||||||
(In thousands)
|
2011
|
2011
|
2010
|
2011
|
2010
|
|||||||||||
Employees' compensation and benefits
|
$
|
29,375
|
$
|
29,407
|
$
|
29,849
|
$
|
89,221
|
$
|
92,535
|
||||||
Occupancy and equipment
|
15,468
|
15,603
|
14,655
|
46,321
|
43,957
|
|||||||||||
Deposit insurance premium
|
13,602
|
14,125
|
14,702
|
41,192
|
46,724
|
|||||||||||
Other taxes, insurance and supervisory fees
|
4,859
|
3,557
|
5,401
|
13,383
|
16,141
|
|||||||||||
Professional fees
|
5,983
|
6,072
|
4,533
|
17,192
|
15,424
|
|||||||||||
Servicing and processing fees
|
2,329
|
2,151
|
2,188
|
6,691
|
6,751
|
|||||||||||
Business promotion
|
2,509
|
3,628
|
3,226
|
8,801
|
8,771
|
|||||||||||
Communications
|
1,651
|
1,864
|
2,060
|
5,393
|
6,002
|
|||||||||||
Net loss on REO operations
|
4,952
|
5,971
|
8,193
|
16,423
|
22,702
|
|||||||||||
Other
|
2,203
|
4,053
|
3,875
|
7,611
|
19,648
|
|||||||||||
Total
|
$
|
82,931
|
$
|
86,431
|
$
|
88,682
|
$
|
252,228
|
$
|
278,655
|
||||||
(In thousands)
|
As of
|
|||||||||
September 30,
|
June 30,
|
December 31,
|
||||||||
2011
|
2011
|
2010
|
||||||||
Balance Sheet Data:
|
||||||||||
Loans, including loans held for sale
|
$
|
10,646,747
|
$
|
10,786,306
|
$
|
11,956,202
|
||||
Allowance for loan and lease losses
|
519,687
|
540,878
|
553,025
|
|||||||
Money market and investment securities
|
2,092,293
|
2,990,547
|
3,369,332
|
|||||||
Intangible assets
|
40,375
|
40,964
|
42,141
|
|||||||
Deferred tax asset, net
|
5,451
|
6,433
|
9,269
|
|||||||
Total assets
|
13,475,572
|
14,113,973
|
15,593,077
|
|||||||
Deposits
|
10,657,311
|
11,072,728
|
12,059,110
|
|||||||
Borrowings
|
1,662,513
|
1,872,114
|
2,311,848
|
|||||||
Total preferred equity
|
430,498
|
428,703
|
425,009
|
|||||||
Total common equity
|
542,422
|
568,240
|
615,232
|
|||||||
Accumulated other comprehensive income, net of tax
|
13,927
|
12,635
|
17,718
|
|||||||
Total equity
|
986,847
|
1,009,578
|
1,057,959
|
|||||||
(In thousands)
|
As of
|
|||||||||
September 30,
|
June 30,
|
December 31,
|
||||||||
2011
|
2011
|
2010
|
||||||||
Residential mortgage loans
|
$
|
2,873,966
|
$
|
2,880,989
|
$
|
3,417,417
|
||||
Commercial loans:
|
||||||||||
Construction loans
|
473,812
|
515,934
|
700,579
|
|||||||
Commercial mortgage loans
|
1,584,787
|
1,590,633
|
1,670,161
|
|||||||
Commercial and Industrial loans (1)
|
3,844,690
|
3,883,645
|
3,861,545
|
|||||||
Loans to local financial institutions collateralized by real estate mortgages
|
278,484
|
282,003
|
290,219
|
|||||||
Commercial loans
|
6,181,773
|
6,272,215
|
6,522,504
|
|||||||
Finance leases
|
254,515
|
263,223
|
282,904
|
|||||||
Consumer loans
|
1,322,888
|
1,349,098
|
1,432,611
|
|||||||
Loans receivable
|
10,633,142
|
10,765,525
|
11,655,436
|
|||||||
Loans held for sale
|
13,605
|
20,781
|
300,766
|
|||||||
Total loans
|
$
|
10,646,747
|
$
|
10,786,306
|
$
|
11,956,202
|
||||
1 - As of September 30, 2011, includes $1.6 billion of commercial loans that are secured by real estate but are not dependent upon the real estate for repayment.
|
||||||||||
(In thousands)
|
As of September 30, 2011
|
||||||||||||
Puerto Rico
|
Virgin Islands
|
Florida
|
Consolidated
|
||||||||||
Residential mortgage loans
|
$
|
2,164,134
|
$
|
412,471
|
$
|
297,361
|
$
|
2,873,966
|
|||||
Commercial loans:
|
|||||||||||||
Construction loans
|
298,797
|
147,911
|
27,104
|
473,812
|
|||||||||
Commercial mortgage loans
|
1,075,724
|
63,910
|
445,153
|
1,584,787
|
|||||||||
Commercial and Industrial loans
|
3,562,126
|
239,444
|
43,120
|
3,844,690
|
|||||||||
Loans to a local financial institution collateralized by real estate mortgages
|
278,484
|
-
|
-
|
278,484
|
|||||||||
Commercial loans
|
5,215,131
|
451,265
|
515,377
|
6,181,773
|
|||||||||
Finance leases
|
254,515
|
-
|
-
|
254,515
|
|||||||||
Consumer loans
|
1,233,130
|
58,299
|
31,459
|
1,322,888
|
|||||||||
Loans receivable
|
8,866,910
|
922,035
|
844,197
|
10,633,142
|
|||||||||
Loans held for sale
|
12,977
|
628
|
13,605
|
||||||||||
Total loans
|
$
|
8,879,887
|
$
|
922,663
|
$
|
844,197
|
$
|
10,646,747
|
|||||
(Dollars in thousands)
|
September 30,
|
June 30,
|
December 31,
|
||||||||||
2011
|
2011
|
2010
|
|||||||||||
Non-performing loans held for investment:
|
|||||||||||||
Residential mortgage
|
$
|
364,561
|
$
|
380,165
|
$
|
392,134
|
|||||||
Commercial mortgage
|
188,326
|
196,037
|
217,165
|
||||||||||
Commercial and Industrial
|
315,360
|
309,888
|
317,243
|
||||||||||
Construction
|
270,411
|
280,286
|
263,056
|
||||||||||
Consumer and Finance leases
|
45,031
|
42,065
|
49,391
|
||||||||||
Total non-performing loans held for investment
|
1,183,689
|
1,208,441
|
1,238,989
|
||||||||||
REO
|
109,514
|
96,618
|
84,897
|
||||||||||
Other repossessed property
|
14,397
|
14,884
|
14,023
|
||||||||||
Investment securities (1)
|
64,543
|
64,543
|
64,543
|
||||||||||
Total non-performing assets, excluding loans held for sale
|
$
|
1,372,143
|
$
|
1,384,486
|
$
|
1,402,452
|
|||||||
Non-performing loans held for sale
|
5,107
|
5,087
|
159,321
|
||||||||||
Total non-performing assets, including loans held for sale
|
$
|
1,377,250
|
$
|
1,389,573
|
$
|
1,561,773
|
|||||||
Past due loans 90 days and still accruing
|
$
|
156,775
|
$
|
156,919
|
$
|
144,114
|
|||||||
Allowance for loan and lease losses
|
519,687
|
$
|
540,878
|
$
|
553,025
|
||||||||
Allowance to total non-performing loans held for investment
|
43.90
|
%
|
44.76
|
%
|
44.64
|
%
|
|||||||
Allowance to total non-performing loans held for investment, excluding residential real estate loans
|
63.44
|
%
|
65.30
|
%
|
65.30
|
%
|
|||||||
(1) Collateral pledged with Lehman Brothers Special Financing, Inc.
|
|||||||||||||
(Dollars in thousands)
|
September 30,
|
June 30,
|
December 31,
|
|||||||
2011
|
2011
|
2010
|
||||||||
Puerto Rico:
|
||||||||||
Non-performing loans held for investment:
|
||||||||||
Residential mortgage
|
$
|
308,998
|
$
|
325,145
|
$
|
330,737
|
||||
Commercial mortgage
|
140,984
|
144,668
|
177,617
|
|||||||
Commercial and Industrial
|
306,723
|
301,195
|
307,608
|
|||||||
Construction
|
157,194
|
166,467
|
196,948
|
|||||||
Finance leases
|
3,879
|
3,208
|
3,935
|
|||||||
Consumer
|
39,828
|
36,829
|
43,241
|
|||||||
Total non-performing loans held for investment
|
957,606
|
977,512
|
1,060,086
|
|||||||
REO
|
84,417
|
74,067
|
67,488
|
|||||||
Other repossessed property
|
14,209
|
14,715
|
13,839
|
|||||||
Investment securities
|
64,543
|
64,543
|
64,543
|
|||||||
Total non-performing assets, excluding loans held for sale
|
$
|
1,120,775
|
$
|
1,130,837
|
$
|
1,205,956
|
||||
Non-performing loans held for sale
|
5,107
|
5,087
|
159,321
|
|||||||
Total non-performing assets, including loans held for sale
|
$
|
1,125,882
|
$
|
1,135,924
|
$
|
1,365,277
|
||||
Past due loans 90 days and still accruing
|
$
|
135,347
|
$
|
132,491
|
$
|
142,756
|
||||
Virgin Islands:
|
||||||||||
Non-performing loans held for investment:
|
||||||||||
Residential mortgage
|
$
|
14,403
|
$
|
11,165
|
$
|
9,655
|
||||
Commercial mortgage
|
5,218
|
7,566
|
7,868
|
|||||||
Commercial and Industrial
|
6,114
|
5,689
|
6,078
|
|||||||
Construction
|
110,007
|
109,144
|
16,473
|
|||||||
Consumer
|
442
|
767
|
927
|
|||||||
Total non-performing loans held for investment
|
136,184
|
134,331
|
41,001
|
|||||||
REO
|
6,499
|
5,812
|
2,899
|
|||||||
Other repossessed property
|
136
|
137
|
108
|
|||||||
Total non-performing assets, excluding loans held for sale
|
$
|
142,819
|
$
|
140,280
|
$
|
44,008
|
||||
Non-performing loans held for sale
|
-
|
-
|
-
|
|||||||
Total non-performing assets, including loans held for sale
|
$
|
142,819
|
$
|
140,280
|
$
|
44,008
|
||||
Past due loans 90 days and still accruing
|
$
|
15,018
|
$
|
18,013
|
$
|
1,358
|
||||
Florida:
|
||||||||||
Non-performing loans held for investment:
|
||||||||||
Residential mortgage
|
$
|
41,160
|
$
|
43,855
|
$
|
51,742
|
||||
Commercial mortgage
|
42,124
|
43,803
|
31,680
|
|||||||
Commercial and Industrial
|
2,523
|
3,004
|
3,557
|
|||||||
Construction
|
3,210
|
4,675
|
49,635
|
|||||||
Consumer
|
882
|
1,261
|
1,288
|
|||||||
Total non-performing loans held for investment
|
89,899
|
96,598
|
137,902
|
|||||||
REO
|
18,598
|
16,739
|
14,510
|
|||||||
Other repossessed property
|
52
|
32
|
76
|
|||||||
Total non-performing assets, excluding loans held for sale
|
$
|
108,549
|
$
|
113,369
|
$
|
152,488
|
||||
Non-performing loans held for sale
|
-
|
-
|
-
|
|||||||
Total non-performing assets, including loans held for sale
|
$
|
108,549
|
$
|
113,369
|
$
|
152,488
|
||||
Past due loans 90 days and still accruing
|
$
|
6,410
|
$
|
6,415
|
$
|
-
|
||||
Quarter Ended
|
Nine-Month Period Ended
|
|||||||||||||||||||
(Dollars in thousands)
|
September 30,
|
June 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2011
|
2010
|
2011
|
2010
|
||||||||||||||||
Allowance for loan and lease losses, beginning of period
|
$
|
540,878
|
$
|
561,695
|
$
|
604,304
|
$
|
553,025
|
$
|
528,120
|
||||||||||
Provision (recovery) for loan and lease losses:
|
||||||||||||||||||||
Residential mortgage
|
17,744
|
12,845
|
19,961
|
36,916
|
80,007
|
|||||||||||||||
Commercial mortgage
|
13,324
|
6,062
|
15,051
|
32,767
|
82,403
|
|||||||||||||||
Commercial and Industrial
|
10,437
|
21,486
|
27,958
|
73,409
|
63,093
|
|||||||||||||||
Construction
|
(2,547
|
)
|
21,354
|
44,268
|
41,270
|
175,638
|
||||||||||||||
Consumer and finance leases
|
7,488
|
(2,563
|
)
|
13,244
|
10,000
|
37,099
|
||||||||||||||
Total provision for loan and lease losses
|
46,446
|
59,184
|
120,482
|
194,362
|
438,240
|
|||||||||||||||
Loans net charge-offs:
|
||||||||||||||||||||
Residential mortgage
|
(15,816
|
)
|
(8,937
|
)
|
(13,109
|
)
|
(29,914
|
)
|
(44,074
|
)
|
||||||||||
Commercial mortgage
|
(3,309
|
)
|
(3,150
|
)
|
(11,455
|
)
|
(37,563
|
)
|
(48,591
|
)
|
||||||||||
Commercial and Industrial
|
(22,526
|
)
|
(10,763
|
)
|
(19,926
|
)
|
(49,577
|
)
|
(69,721
|
)
|
||||||||||
Construction
|
(16,823
|
)
|
(47,207
|
)
|
(58,423
|
)
|
(81,268
|
)
|
(154,842
|
)
|
||||||||||
Consumer and finance leases
|
(9,163
|
)
|
(9,944
|
)
|
(13,347
|
)
|
(29,378
|
)
|
(40,606
|
)
|
||||||||||
Net charge-offs
|
(67,637
|
)
|
(80,001
|
)
|
(116,260
|
)
|
(227,700
|
)
|
(357,834
|
)
|
||||||||||
Allowance for loan and lease losses, end of period
|
$
|
519,687
|
$
|
540,878
|
$
|
608,526
|
$
|
519,687
|
$
|
608,526
|
||||||||||
Allowance for loan and lease losses to period end total loans held for investment
|
4.89
|
%
|
5.02
|
%
|
5.00
|
%
|
4.89
|
%
|
5.00
|
%
|
||||||||||
Net charge-offs (annualized) to average loans outstanding during the period
|
2.50
|
%
|
2.91
|
%
|
3.74
|
%
|
2.72
|
%
|
3.67
|
%
|
||||||||||
Provision for loan and lease losses to net charge-offs during the period
|
0.69x
|
0.74x
|
1.04x
|
0.85x
|
1.22x
|
|||||||||||||||
Nine-Month Period
|
||||||||||||||||||
Ended
|
Year ended
|
|||||||||||||||||
September 30,
|
December 31,
|
December 31,
|
December 31,
|
December 31,
|
||||||||||||||
2011
|
2010
|
2009
|
2008
|
2007
|
||||||||||||||
Residential mortgage
|
1.33
|
%
|
1.80
|
%
|
(1
|
)
|
0.82
|
%
|
0.19
|
%
|
0.03
|
%
|
||||||
Commercial mortgage
|
3.14
|
%
|
5.02
|
%
|
(2
|
)
|
1.64
|
%
|
0.27
|
%
|
0.10
|
%
|
||||||
Commercial and Industrial
|
1.55
|
%
|
2.16
|
%
|
(3
|
)
|
0.72
|
%
|
0.59
|
%
|
0.26
|
%
|
||||||
Construction
|
16.30
|
%
|
23.80
|
%
|
(4
|
)
|
11.54
|
%
|
0.52
|
%
|
0.26
|
%
|
||||||
Consumer and finance leases
|
2.39
|
%
|
2.98
|
%
|
3.05
|
%
|
3.19
|
%
|
3.48
|
%
|
||||||||
Total loans
|
2.72
|
%
|
4.76
|
%
|
(5
|
)
|
2.48
|
%
|
0.87
|
%
|
0.79
|
%
|
||||||
(1) Includes net charge-offs totaling $7.8 million associated with non-performing residential mortgage loans sold in a bulk sale.
|
||||||||||||||||||
(2) Includes net charge-offs totaling $29.5 million associated with loans transferred to held for sale. Commercial mortgage net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale, was 3.38%.
|
||||||||||||||||||
(3) Includes net charge-offs totaling $8.6 million associated with loans transferred to held for sale. Commercial and Industrial net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale, was 1.98%.
|
||||||||||||||||||
(4) Includes net charge-offs totaling $127.0 million associated with loans transferred to held for sale.Construction net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale, was 18.93%.
|
||||||||||||||||||
(5) Includes net charge-offs totaling $165.1 million associated with loans transferred to held for sale. Total net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale, was 3.60%.
|
||||||||||||||||||