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.
|
(dollars in thousands)
|
||||||||||||||||||||
Quarter Ended
|
||||||||||||||||||||
March 31, 2012
|
December 31, 2011
|
September30,2011
|
June 30, 2011
|
March 31, 2011
|
||||||||||||||||
Net Interest Income (in thousands)
|
||||||||||||||||||||
Interest Income - GAAP
|
$ | 152,107 | $ | 156,752 | $ | 158,542 | $ | 163,418 | $ | 180,903 | ||||||||||
Unrealized (gain) loss on
|
||||||||||||||||||||
derivative instruments
|
(332 | ) | (246 | ) | 954 | 1,185 | (345 | ) | ||||||||||||
Interest income excluding valuations
|
151,775 | 156,506 | 159,496 | 164,603 | 180,558 | |||||||||||||||
Tax-equivalent adjustment
|
1,741 | 1,456 | 1,521 | 1,504 | 2,314 | |||||||||||||||
Interest income on a tax-equivalent basis excluding valuations
|
153,516 | 157,962 | 161,017 | 166,107 | 182,872 | |||||||||||||||
Interest Expense - GAAP
|
50,241 | 58,209 | 64,287 | 68,983 | 74,624 | |||||||||||||||
Unrealized (loss) gain on
|
||||||||||||||||||||
derivative instruments and liabilities measured at fair value
|
(49 | ) | (1,992 | ) | (1,601 | ) | 23 | (598 | ) | |||||||||||
Interest expense excluding valuations
|
50,192 | 56,217 | 62,686 | 69,006 | 74,026 | |||||||||||||||
Net interest income - GAAP
|
$ | 101,866 | $ | 98,543 | $ | 94,255 | $ | 94,435 | $ | 106,279 | ||||||||||
Net interest income excluding valuations
|
$ | 101,583 | $ | 100,289 | $ | 96,810 | $ | 95,597 | $ | 106,532 | ||||||||||
Net interest income on a tax-equivalent basis excluding valuations
|
$ | 103,324 | $ | 101,745 | $ | 98,331 | $ | 97,101 | $ | 108,846 | ||||||||||
Average Balances (in thousands)
|
||||||||||||||||||||
Loans and leases
|
$ | 10,389,246 | $ | 10,637,523 | $ | 10,832,426 | $ | 10,997,295 | $ | 11,672,619 | ||||||||||
Total securities and other short-term investments
|
2,397,918 | 2,665,918 | 2,787,708 | 3,550,743 | 3,588,028 | |||||||||||||||
Average Interest-Earning Assets
|
$ | 12,787,164 | $ | 13,303,441 | $ | 13,620,134 | $ | 14,548,038 | $ | 15,260,647 | ||||||||||
Average Interest-Bearing Liabilities
|
$ | 10,725,162 | $ | 11,255,725 | $ | 11,944,454 | $ | 12,809,375 | $ | 13,494,702 | ||||||||||
Average Yield/Rate
|
||||||||||||||||||||
Average yield on interest-earning assets - GAAP
|
4.78 | % | 4.67 | % | 4.62 | % | 4.51 | % | 4.80 | % | ||||||||||
Average rate on interest-bearing liabilities - GAAP
|
1.88 | % | 2.05 | % | 2.14 | % | 2.16 | % | 2.24 | % | ||||||||||
Net interest spread - GAAP
|
2.90 | % | 2.62 | % | 2.48 | % | 2.35 | % | 2.56 | % | ||||||||||
Net interest margin - GAAP
|
3.20 | % | 2.94 | % | 2.75 | % | 2.60 | % | 2.82 | % | ||||||||||
Average yield on interest-earning assets excluding valuations
|
4.77 | % | 4.67 | % | 4.65 | % | 4.54 | % | 4.79 | % | ||||||||||
Average rate on interest-bearing liabilities excluding valuations
|
1.88 | % | 1.98 | % | 2.08 | % | 2.16 | % | 2.22 | % | ||||||||||
Net interest spread excluding valuations
|
2.89 | % | 2.69 | % | 2.57 | % | 2.38 | % | 2.57 | % | ||||||||||
Net interest margin excluding valuations
|
3.20 | % | 2.99 | % | 2.82 | % | 2.64 | % | 2.83 | % | ||||||||||
Average yield on interest-earning assets on a tax-equivalent basis and excluding valuations
|
4.83 | % | 4.71 | % | 4.69 | % | 4.58 | % | 4.86 | % | ||||||||||
Average rate on interest-bearing liabilities excluding valuations
|
1.88 | % | 1.98 | % | 2.08 | % | 2.16 | % | 2.22 | % | ||||||||||
Net interest spread on a tax-equivalent basis and excluding valuations
|
2.95 | % | 2.73 | % | 2.61 | % | 2.42 | % | 2.64 | % | ||||||||||
Net interest margin on a tax-equivalent basis and excluding valuations
|
3.25 | % | 3.03 | % | 2.86 | % | 2.68 | % | 2.89 | % |
Tangible Common Equity
|
||||||||||||||||||||
(In thousands, except ratios and per share information) | ||||||||||||||||||||
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
2012
|
2011
|
2011
|
2011
|
2011
|
||||||||||||||||
Tangible Equity:
|
||||||||||||||||||||
Total equity - GAAP
|
$ | 1,433,023 | $ | 1,444,144 | $ | 986,847 | $ | 1,009,578 | $ | 1,027,269 | ||||||||||
Preferred equity
|
(63,047 | ) | (63,047 | ) | (430,498 | ) | (428,703 | ) | (426,724 | ) | ||||||||||
Goodwill
|
(28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | ||||||||||
Core deposit intangible
|
(11,100 | ) | (11,689 | ) | (12,277 | ) | (12,866 | ) | (13,454 | ) | ||||||||||
Tangible common equity
|
$ | 1,330,778 | $ | 1,341,310 | $ | 515,974 | $ | 539,911 | $ | 558,993 | ||||||||||
Tangible Assets:
|
||||||||||||||||||||
Total assets - GAAP
|
$ | 13,085,623 | $ | 13,127,275 | $ | 13,475,572 | $ | 14,113,973 | $ | 15,104,090 | ||||||||||
Goodwill
|
(28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | ||||||||||
Core deposit intangible
|
(11,100 | ) | (11,689 | ) | (12,277 | ) | (12,866 | ) | (13,454 | ) | ||||||||||
Tangible assets
|
$ | 13,046,425 | $ | 13,087,488 | $ | 13,435,197 | $ | 14,073,009 | $ | 15,062,538 | ||||||||||
Common shares outstanding
|
206,134 | 205,134 | 21,304 | 21,304 | 21,304 | |||||||||||||||
Tangible common equity ratio
|
10.20 | % | 10.25 | % | 3.84 | % | 3.84 | % | 3.71 | % | ||||||||||
Tangible book value per common share
|
$ | 6.46 | $ | 6.54 | $ | 24.22 | $ | 25.34 | $ | 26.24 |
Tier 1 Common Equity to Risk-Weighted Assets
|
||||||||||||||||||||
(Dollars in thousands)
|
As of
|
|||||||||||||||||||
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
2012
|
2011
|
2011
|
2011
|
2011
|
||||||||||||||||
Tier 1 Common Equity:
|
||||||||||||||||||||
Total equity - GAAP
|
$ | 1,433,023 | $ | 1,444,144 | $ | 986,847 | $ | 1,009,578 | $ | 1,027,269 | ||||||||||
Qualifying preferred stock
|
(63,047 | ) | (63,047 | ) | (430,498 | ) | (428,703 | ) | (426,724 | ) | ||||||||||
Unrealized gain on available-for-sale securities (1)
|
(20,233 | ) | (19,234 | ) | (13,957 | ) | (12,659 | ) | (15,453 | ) | ||||||||||
Disallowed deferred tax asset (2)
|
(25 | ) | - | (267 | ) | (272 | ) | (981 | ) | |||||||||||
Goodwill
|
(28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | ||||||||||
Core deposit intangible
|
(11,100 | ) | (11,689 | ) | (12,277 | ) | (12,866 | ) | (13,454 | ) | ||||||||||
Cumulative change gain in fair value of liabilities
|
||||||||||||||||||||
accounted for under a fair value option
|
(2,434 | ) | (2,009 | ) | (952 | ) | (1,889 | ) | (2,156 | ) | ||||||||||
Other disallowed assets
|
(807 | ) | (922 | ) | (907 | ) | (808 | ) | (881 | ) | ||||||||||
Tier 1 common equity
|
$ | 1,307,279 | $ | 1,319,145 | $ | 499,890 | $ | 524,283 | $ | 539,522 | ||||||||||
Total risk-weighted assets
|
$ | 9,947,559 | $ | 10,180,226 | $ | 10,432,804 | $ | 10,630,162 | $ | 11,183,518 | ||||||||||
Tier 1 common equity to risk-weighted assets ratio
|
13.14 | % | 12.96 | % | 4.79 | % | 4.93 | % | 4.82 | % | ||||||||||
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 March 31, 2012 (December 31, 2011 - $13 million; September 30, 2011 - $12 million
|
||||||||||||||||||||
June 30, 2011 - $11 million; March 31, 2011 - $12 million) was included without limitation in regulatory capital pursuant to the risk-based capital guidelines,
|
||||||||||||||||||||
while approximately $25k of such assets at March 31, 2012 (December 31, 2011 - $0; September 30, 2011 - $0.3 million; June 30, 2011 - $0.3 million;
|
||||||||||||||||||||
March 31, 2011 - $1 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 March 31, 2012 (December 31, 2011 - $8 million;
|
||||||||||||||||||||
September 30, 2011 - $7 million; June 30, 2011 - $5 million; March 31, 2011 - $5 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
|
|||||||||||||||||||
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
2012
|
2011
|
2011
|
2011
|
2011
|
||||||||||||||||
Loss before income taxes
|
$ | (11,049 | ) | $ | (14,600 | ) | $ | (21,158 | ) | $ | (12,318 | ) | $ | (24,834 | ) | |||||
Add: Provision for loan and lease losses
|
36,197 | 41,987 | 46,446 | 59,184 | 88,732 | |||||||||||||||
Less: Net loss (gain) on sale and OTTI of investment securities
|
1,207 | 1,014 | (12,156 | ) | (21,342 | ) | (19,341 | ) | ||||||||||||
Less: Gain on sale of FirstBank Insurance VI
|
- | - | - | - | (2,845 | ) | ||||||||||||||
Add: Unrealized (gain) loss on derivatives instruments and liabilities
|
||||||||||||||||||||
measured at fair value
|
(283 | ) | 1,746 | 2,555 | 1,162 | 253 | ||||||||||||||
Add: Contingency adjustment - tax credits
|
2,489 | - | - | - | - | |||||||||||||||
Add: Loss on early extinguishment of borrowings
|
- | - | 9,012 | 1,823 | - | |||||||||||||||
Add: Equity in losses (earnings) of unconsolidated entities
|
6,236 | (1,666 | ) | 4,357 | 1,536 | - | ||||||||||||||
Adjusted Pre-tax, pre-provision income (1)
|
$ | 34,797 | $ | 28,482 | $ | 29,056 | $ | 30,045 | $ | 41,965 | ||||||||||
Change from most recent prior quarter - amount
|
$ | 6,315 | $ | (574 | ) | $ | (989 | ) | $ | (11,920 | ) | $ | 2,761 | |||||||
Change from most recent prior quarter - percent
|
22.2 | % | -2.0 | % | -3.3 | % | -28.4 | % | 7.1 | % | ||||||||||
Net loss excluding equity in losses of unconsolidated entities
|
||||
Quarter Ended
|
||||
March 31, 2012
|
||||
(In thousands)
|
||||
Net loss excluding equity in losses
|
||||
of unconsolidated entities (non-GAAP)
|
$ | (6,946 | ) | |
Equity in losses of unconsolidated entities
|
(6,236 | ) | ||
Net loss (GAAP)
|
$ | (13,182 | ) | |
Net Loss attributable to common stockholders and Loss per share ( Non-GAAP to GAAP reconciliation) | |||||||||
Quarter ended
|
|||||||||
December 31, 2011
|
|||||||||
(In thousands, except per share information)
|
Net Loss attributable to common
stockholders
|
Per Share
|
|||||||
Net loss attributable to common
stockholders and loss per share,
excluding special items (Non-GAAP)
|
$ | (15,984 | ) | $ | (0.08 | ) | |||
Special items:
|
|||||||||
Exchange transaction (1)
|
277,995 | 1.44 | |||||||
Net Income and earnings per share (GAAP)
|
$ | 262,011 | $ | 1.36 | |||||
___________________________________________________________ | |||||||||
1- For the quarter ended December 31, 2011, the Corporation recorded a one-time favorable impact to retained earnings of $278.0 million
|
|||||||||
that represents the excess of the carrying amount of the Series G preferred stock over the fair values of new common shares issued.
|
|||||||||
Exhibit
|
Description of Exhibit
|
|
99.1
|
Press Release dated May 7, 2012 - First BanCorp Reports Financial Results for the First Quarter Ended March 31, 2012
|
99.2
|
Press Release dated May 7, 2012 - First BanCorp Enters into Agreement to Purchase FirstBank-branded Credit Card Portfolio of Approximately $400 Million
|
First BanCorp. | |||
Date: May 11, 2012
|
By:
|
/s/ Orlando Berges | |
Name | Orlando Berges | ||
Title | EVP and Chief Financial Officer | ||
Exhibit
|
Description of Exhibit
|
|
99.1
|
Press Release dated May 7, 2012 - First BanCorp Reports Financial Results for the First Quarter Ended March 31, 2012
|
99.2
|
Press Release dated May 7, 2012 - First BanCorp Enters into Agreement to Purchase FirstBank-branded Credit Card Portfolio of Approximately $400 Million
|
●
|
Growth in Net Interest Income and Margin:
|
o
|
Net interest income, excluding fair value adjustments, increased by $1.3 million.
|
o
|
Net interest margin, excluding fair value adjustments, increased by 21 basis points to 3.20%.
|
●
|
Improvement in Charge-Offs activity and stable non-performing assets levels:
|
o
|
Net charge-offs decreased by $21.6 million to $46.2 million, or 1.78% (annualized) of average loans, the lowest level since the first quarter of 2009.
|
o
|
Provision for loan and lease losses decreased for the fifth consecutive quarter, a decrease of $5.8 million to $36.2 million.
|
o
|
Inflows of loans into non-performing status declined by $50.8 million, or 30% from the previous quarter.
|
o
|
The level of non-performing loans decreased for the eighth consecutive quarter, declining by $23.7 million from the previous quarter to $1.12 billion.
|
o
|
Total non-performing assets decreased by $5.0 million.
|
●
|
Improved fee income from diversified sources:
|
o
|
Revenues from broker-dealer activities increased by $0.9 million.
|
o
|
Revenues from insurance activities increased by $0.5 million.
|
o
|
Deposit fee income increased by $0.3 million.
|
●
|
Decrease of $0.6 million in Non-Interest Expenses.
|
●
|
Non-cash charge associated with the equity in losses of unconsolidated entities of $6.2 million, compared to gains of $1.7 million in the fourth quarter of 2011.
|
●
|
Increase of $1.9 million in the Income Tax Expense mainly related to increased income from profitable subsidiaries.
|
●
|
Strong capital position:
|
o
|
Total capital, Tier 1 capital and Leverage ratios of the Corporation of 17.36%, 16.04% and 12.31%, respectively, up from 17.12%, 15.79% and 11.91%, respectively, as of December 31, 2011.
|
o
|
Total capital, Tier 1 capital and Leverage ratios of the Corporation’s wholly owned banking subsidiary, FirstBank of 16.83%, 15.50% and 11.91%, respectively, up from 16.58%, 15.25%, and 11.52%, respectively, as of December 31, 2011.
|
o
|
13.14% Tier 1 common risk-based capital ratio, up from 12.96% as of December 31, 2011.
|
o
|
10.20% tangible common equity ratio, down from 10.25% as of December 31, 2011.
|
●
|
Growth of $119.6 million, or 2%, in core deposits while reducing its cost by 14 basis points, reflecting increases in retail and commercial demand deposits, as well as in savings accounts, since December 31, 2011. Brokered deposits decreased by $125.6 million, or 3%.
|
●
|
Strong loan originations amounted to $569 million for the first quarter.
|
●
|
Total assets of $13.1 billion, a decrease of $41.7 million since the beginning of the year, driven by commercial loans paid-off during the quarter.
|
(In thousands, except per share information)
|
Quarter Ended
|
|||||||||||
March 31,
|
December 31,
|
March 31,
|
||||||||||
2012
|
2011
|
2011
|
||||||||||
Net loss
|
$
|
(13,182
|
)
|
$
|
(14,842
|
)
|
$
|
(28,420
|
)
|
|||
Cumulative convertible preferred stock dividend (Series G)
|
-
|
(997
|
)
|
(5,302
|
)
|
|||||||
Preferred stock discount accretion (Series G)
|
-
|
(145
|
)
|
(1,715
|
)
|
|||||||
Favorable impact from issuing common stock in exchange for Series G
|
||||||||||||
preferred stock, net of issuance costs (1)
|
-
|
277,995
|
-
|
|||||||||
Net (loss) income attributable to common stockholders - basic
|
$
|
(13,182
|
)
|
$
|
262,011
|
$
|
(35,437
|
)
|
||||
Convertible preferred stock dividends and accretion
|
-
|
1,142
|
-
|
|||||||||
Net (loss) income attributable to common stockholders - diluted
|
$
|
(13,182
|
)
|
$
|
263,153
|
$
|
(35,437
|
)
|
||||
Average common shares outstanding
|
205,217
|
192,546
|
21,303
|
|||||||||
Average potential common shares
|
-
|
2,195
|
-
|
|||||||||
Average common shares outstanding -
|
||||||||||||
assuming dilution
|
205,217
|
194,741
|
21,303
|
|||||||||
Basic (loss) earnings per common share
|
$
|
(0.06
|
)
|
$
|
1.36
|
$
|
(1.66
|
)
|
||||
Diluted (loss) earnings per common share
|
$
|
(0.06
|
)
|
$
|
1.35
|
$
|
(1.66
|
)
|
||||
(1) Excess of carrying amount of the Series G Preferred Stock exchanged over the fair value of new common shares issued in the fourth quarter of 2011.
|
Quarter Ended
|
||||||||||||||||||||
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
2012
|
2011
|
2011
|
2011
|
2011
|
||||||||||||||||
Earnings (in thousands)
|
||||||||||||||||||||
Net loss
|
$
|
(13,182
|
)
|
$
|
(14,842
|
)
|
$
|
(24,046
|
)
|
$
|
(14,924
|
)
|
$
|
(28,420
|
)
|
|||||
Net (loss) income attributable to common stockholders - basic
|
$
|
(13,182
|
)
|
$
|
262,011
|
$
|
(31,143
|
)
|
$
|
(22,205
|
)
|
$
|
(35,437
|
)
|
||||||
Net (loss) income attributable to common stockholders - diluted
|
$
|
(13,182
|
)
|
$
|
263,153
|
$
|
(31,143
|
)
|
$
|
(22,205
|
)
|
$
|
(35,437
|
)
|
||||||
Adjusted Pre-Tax, Pre-Provision Income (1)
|
$
|
34,797
|
$
|
28,481
|
$
|
29,056
|
$
|
30,045
|
$
|
41,965
|
||||||||||
Common share data
|
||||||||||||||||||||
(Loss) earnings per common share basic
|
$
|
(0.06
|
)
|
$
|
1.36
|
$
|
(1.46
|
)
|
$
|
(1.04
|
)
|
$
|
(1.66
|
)
|
||||||
(Loss) earnings per common share diluted
|
$
|
(0.06
|
)
|
$
|
1.35
|
$
|
(1.46
|
)
|
$
|
(1.04
|
)
|
$
|
(1.66
|
)
|
||||||
Financial ratios
|
||||||||||||||||||||
Return on average assets
|
-0.41
|
%
|
-0.43
|
%
|
-0.69
|
%
|
-0.41
|
%
|
-0.75
|
%
|
||||||||||
Return on average common equity
|
-3.84
|
%
|
-4.77
|
%
|
-21.33
|
%
|
-14.77
|
%
|
-23.42
|
%
|
||||||||||
Total capital
|
17.36
|
%
|
17.12
|
%
|
12.39
|
%
|
12.40
|
%
|
11.97
|
%
|
||||||||||
Tier 1 capital
|
16.04
|
%
|
15.79
|
%
|
11.07
|
%
|
11.08
|
%
|
10.65
|
%
|
||||||||||
Leverage
|
12.31
|
%
|
11.91
|
%
|
8.41
|
%
|
8.04
|
%
|
7.78
|
%
|
||||||||||
Tangible common equity (2)
|
10.20
|
%
|
10.25
|
%
|
3.84
|
%
|
3.84
|
%
|
3.71
|
%
|
||||||||||
Tier 1 common equity to risk-weight assets (2)
|
13.14
|
%
|
12.96
|
%
|
4.79
|
%
|
4.93
|
%
|
4.82
|
%
|
||||||||||
Net interest margin (3)
|
3.25
|
%
|
3.03
|
%
|
2.86
|
%
|
2.68
|
%
|
2.89
|
%
|
||||||||||
Efficiency
|
77.21
|
%
|
75.81
|
%
|
76.63
|
%
|
64.84
|
%
|
56.46
|
%
|
||||||||||
Common shares outstanding
|
206,134,458
|
205,134,171
|
21,303,669
|
21,303,669
|
21,303,669
|
|||||||||||||||
Average common shares outstanding
|
||||||||||||||||||||
Basic
|
205,217,068
|
192,545,961
|
21,302,949
|
21,302,949
|
21,302,949
|
|||||||||||||||
Diluted
|
205,217,068
|
194,740,802
|
21,302,949
|
21,302,949
|
21,302,949
|
|||||||||||||||
(1) Non-GAAP measure, see "Adjusted Pre-Tax, Pre-Provision" in "Basis of Presentation" section below for additional information.
|
||||||||||||||||||||
(2) Non-GAAP measures, see "Tangible Common Equity" and "Basis of Presentation" sections below for additional information.
|
||||||||||||||||||||
(3) On a tax-equivalent basis. See Net interest income section below and Exhibit A (Table 2) for additional information about this non-GAAP measure.
|
||||||||||||||||||||
Pre-Tax, Pre-Provision Income
|
||||||||||||||||||||
(Dollars in thousands)
|
Quarter Ended
|
|||||||||||||||||||
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
2012
|
2011
|
2011
|
2011
|
2011
|
||||||||||||||||
Loss before income taxes
|
$
|
(11,049
|
)
|
$
|
(14,600
|
)
|
$
|
(21,158
|
)
|
$
|
(12,318
|
)
|
$
|
(24,834
|
)
|
|||||
Add: Provision for loan and lease losses
|
36,197
|
41,987
|
46,446
|
59,184
|
88,732
|
|||||||||||||||
Less: Net loss (gain) on sale and OTTI of investment securities
|
1,207
|
1,014
|
(12,156
|
)
|
(21,342
|
)
|
(19,341
|
)
|
||||||||||||
Less: Gain on sale of FirstBank Insurance VI
|
-
|
-
|
-
|
-
|
(2,845
|
)
|
||||||||||||||
Add: Unrealized (gain) loss on derivatives instruments and liabilities
|
||||||||||||||||||||
measured at fair value
|
(283
|
)
|
1,746
|
2,555
|
1,162
|
253
|
||||||||||||||
Add: Contingency adjustment - tax credits
|
2,489
|
-
|
-
|
-
|
-
|
|||||||||||||||
Add: Loss on early extinguishment of borrowings
|
-
|
-
|
9,012
|
1,823
|
-
|
|||||||||||||||
Add: Equity in losses (earnings) of unconsolidated entities
|
6,236
|
(1,666
|
)
|
4,357
|
1,536
|
-
|
||||||||||||||
Adjusted Pre-tax, pre-provision income (1)
|
$
|
34,797
|
$
|
28,482
|
$
|
29,056
|
$
|
30,045
|
$
|
41,965
|
||||||||||
Change from most recent prior quarter - amount
|
$
|
6,315
|
$
|
(574
|
)
|
$
|
(989
|
)
|
$
|
(11,920
|
)
|
$
|
2,761
|
|||||||
Change from most recent prior quarter - percent
|
22.2
|
%
|
-2.0
|
%
|
-3.3
|
%
|
-28.4
|
%
|
7.1
|
%
|
||||||||||
(1) See "Basis of Presentation" for definition.
|
||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||
Quarter Ended
|
||||||||||||||||||||
March 31, 2012
|
December 31, 2011
|
September 30, 2011
|
June 30, 2011
|
March 31, 2011
|
||||||||||||||||
Net Interest Income (in thousands)
|
||||||||||||||||||||
Interest Income - GAAP
|
$
|
152,107
|
$
|
156,752
|
$
|
158,542
|
$
|
163,418
|
$
|
180,903
|
||||||||||
Unrealized (gain) loss on
|
||||||||||||||||||||
derivative instruments
|
(332
|
)
|
(246
|
)
|
954
|
1,185
|
(345
|
)
|
||||||||||||
Interest income excluding valuations
|
151,775
|
156,506
|
159,496
|
164,603
|
180,558
|
|||||||||||||||
Tax-equivalent adjustment
|
1,741
|
1,456
|
1,521
|
1,504
|
2,314
|
|||||||||||||||
Interest income on a tax-equivalent basis excluding valuations
|
153,516
|
157,962
|
161,017
|
166,107
|
182,872
|
|||||||||||||||
Interest Expense - GAAP
|
50,241
|
58,209
|
64,287
|
68,983
|
74,624
|
|||||||||||||||
Unrealized (loss) gain on
|
||||||||||||||||||||
derivative instruments and liabilities measured at fair value
|
(49
|
)
|
(1,992
|
)
|
(1,601
|
)
|
23
|
(598
|
)
|
|||||||||||
Interest expense excluding valuations
|
50,192
|
56,217
|
62,686
|
69,006
|
74,026
|
|||||||||||||||
Net interest income - GAAP
|
$
|
101,866
|
$
|
98,543
|
$
|
94,255
|
$
|
94,435
|
$
|
106,279
|
||||||||||
Net interest income excluding valuations
|
$
|
101,583
|
$
|
100,289
|
$
|
96,810
|
$
|
95,597
|
$
|
106,532
|
||||||||||
Net interest income on a tax-equivalent basis excluding valuations
|
$
|
103,324
|
$
|
101,745
|
$
|
98,331
|
$
|
97,101
|
$
|
108,846
|
||||||||||
Average Balances (in thousands)
|
||||||||||||||||||||
Loans and leases
|
$
|
10,389,246
|
$
|
10,637,523
|
$
|
10,832,426
|
$
|
10,997,295
|
$
|
11,672,619
|
||||||||||
Total securities and other short-term investments
|
2,397,918
|
2,665,918
|
2,787,708
|
3,550,743
|
3,588,028
|
|||||||||||||||
Average Interest-Earning Assets
|
$
|
12,787,164
|
$
|
13,303,441
|
$
|
13,620,134
|
$
|
14,548,038
|
$
|
15,260,647
|
||||||||||
Average Interest-Bearing Liabilities
|
$
|
10,725,162
|
$
|
11,255,725
|
$
|
11,944,454
|
$
|
12,809,375
|
$
|
13,494,702
|
||||||||||
Average Yield/Rate
|
||||||||||||||||||||
Average yield on interest-earning assets - GAAP
|
4.78
|
%
|
4.67
|
%
|
4.62
|
%
|
4.51
|
%
|
4.80
|
%
|
||||||||||
Average rate on interest-bearing liabilities - GAAP
|
1.88
|
%
|
2.05
|
%
|
2.14
|
%
|
2.16
|
%
|
2.24
|
%
|
||||||||||
Net interest spread - GAAP
|
2.90
|
%
|
2.62
|
%
|
2.48
|
%
|
2.35
|
%
|
2.56
|
%
|
||||||||||
Net interest margin - GAAP
|
3.20
|
%
|
2.94
|
%
|
2.75
|
%
|
2.60
|
%
|
2.82
|
%
|
||||||||||
Average yield on interest-earning assets excluding valuations
|
4.77
|
%
|
4.67
|
%
|
4.65
|
%
|
4.54
|
%
|
4.79
|
%
|
||||||||||
Average rate on interest-bearing liabilities excluding valuations
|
1.88
|
%
|
1.98
|
%
|
2.08
|
%
|
2.16
|
%
|
2.22
|
%
|
||||||||||
Net interest spread excluding valuations
|
2.89
|
%
|
2.69
|
%
|
2.57
|
%
|
2.38
|
%
|
2.57
|
%
|
||||||||||
Net interest margin excluding valuations
|
3.20
|
%
|
2.99
|
%
|
2.82
|
%
|
2.64
|
%
|
2.83
|
%
|
||||||||||
Average yield on interest-earning assets on a tax-equivalent basis and excluding valuations
|
4.83
|
%
|
4.71
|
%
|
4.69
|
%
|
4.58
|
%
|
4.86
|
%
|
||||||||||
Average rate on interest-bearing liabilities excluding valuations
|
1.88
|
%
|
1.98
|
%
|
2.08
|
%
|
2.16
|
%
|
2.22
|
%
|
||||||||||
Net interest spread on a tax-equivalent basis and excluding valuations
|
2.95
|
%
|
2.73
|
%
|
2.61
|
%
|
2.42
|
%
|
2.64
|
%
|
||||||||||
Net interest margin on a tax-equivalent basis and excluding valuations
|
3.25
|
%
|
3.03
|
%
|
2.86
|
%
|
2.68
|
%
|
2.89
|
%
|
||||||||||
Quarter Ended
|
|||||||||||||||||||
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
|||||||||||||||
(In thousands)
|
2012
|
2011
|
2011
|
2011
|
2011
|
||||||||||||||
Other service charges
|
$
|
1,519
|
$
|
2,116
|
$
|
1,485
|
$
|
1,456
|
$
|
1,718
|
|||||||||
Service charges on deposit accounts
|
3,247
|
2,988
|
3,098
|
3,054
|
3,332
|
||||||||||||||
Mortgage banking activities
|
4,475
|
3,717
|
3,676
|
9,336
|
6,591
|
||||||||||||||
(Loss) gain on sale of investments, net of impairments
|
(1,207
|
)
|
(1,014
|
)
|
12,156
|
21,342
|
19,341
|
||||||||||||
Broker-dealer income
|
1,263
|
381
|
173
|
783
|
48
|
||||||||||||||
Other operating income
|
5,414
|
4,816
|
6,745
|
6,250
|
9,455
|
||||||||||||||
Loss on early extinguishment of borrowings
|
-
|
-
|
(9,012
|
)
|
(1,823
|
)
|
-
|
||||||||||||
Equity in (losses) earnings of unconsolidated entities
|
(6,236
|
)
|
1,666
|
(4,357
|
)
|
(1,536
|
)
|
-
|
|||||||||||
Non-interest income
|
$
|
8,475
|
$
|
14,670
|
$
|
13,964
|
$
|
38,862
|
$
|
40,485
|
|||||||||
●
|
Non-cash charge associated with the equity in losses of unconsolidated entities of approximately $6.2 million recorded in the first quarter, a variance of $7.9 million compared to the fourth quarter of 2011. This non-cash adjustment 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 in 2011. The Bank held a 35% subordinated ownership interest in CPG/GS as of March 31, 2012.
|
●
|
A $0.4 million decrease in credit card merchant fees mainly due to seasonality, included as part of “Other service charges” in the table above.
|
●
|
An increase of $0.2 million in other-than-temporary impairment charges (OTTI) on debt securities, included as part of “(Loss) gain on sale of investments, net of impairments” in the table above.
|
●
|
A $0.9 million increase in income from the Corporation’s broker-dealer activities, primarily driven by fees recorded in connection with the underwriting of notes and bonds issued by government entities in Puerto Rico.
|
●
|
A $0.8 million increase in revenues from mortgage banking activities, driven by higher gains on the sale of mortgage loans. The Corporation sold approximately $46.9 million of residential mortgage loans in the first quarter of 2012 realizing a gain (including the recognition of servicing rights) of $1.5 million compared to a gain of $0.8 million recorded in the previous quarter on the sale of $32.9 million of residential mortgage loans. The linked-quarter comparison was also favorably impacted by a $0.6 million reduction in temporary impairments of servicing assets. This was partially offset by a $0.5 million reduction in income from the Corporation’s mortgage loan securitization activities.
|
●
|
A $0.5 million increase in income from the insurance agency operations in Puerto Rico primarily reflecting seasonal profit sharing received by the agency based on the volume of insurance policies production of the agency for the year 2011.
|
●
|
A $0.3 million increase in deposit fee income, reflecting higher overdraft and service charge fees attributable to both increased volume activity and fees from increased service charges on certain savings accounts.
|
Quarter Ended
|
|||||||||||||||
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
|||||||||||
(In thousands)
|
2012
|
2011
|
2011
|
2011
|
2011
|
||||||||||
Employees' compensation and benefits
|
$
|
31,611
|
$
|
29,254
|
$
|
29,375
|
$
|
29,407
|
$
|
30,439
|
|||||
Occupancy and equipment
|
15,676
|
15,603
|
15,468
|
15,603
|
15,250
|
||||||||||
Deposit insurance premium
|
11,987
|
12,411
|
13,602
|
14,125
|
13,465
|
||||||||||
Other taxes, insurance and supervisory fees
|
4,437
|
4,332
|
4,859
|
3,557
|
4,967
|
||||||||||
Professional fees
|
5,179
|
4,692
|
5,983
|
6,072
|
5,137
|
||||||||||
Business promotion
|
2,547
|
3,482
|
2,509
|
3,628
|
2,664
|
||||||||||
Net loss on REO operations
|
3,443
|
8,602
|
4,952
|
5,971
|
5,500
|
||||||||||
Other
|
10,313
|
7,450
|
6,183
|
8,068
|
5,444
|
||||||||||
Total
|
$
|
85,193
|
$
|
85,826
|
$
|
82,931
|
$
|
86,431
|
$
|
82,866
|
|||||
●
|
A decrease of $5.2 million in losses from REO activities, reflecting a $3.8 million decrease in write-downs to the value of REO properties. The prior quarter included write-downs of approximately $1.8 million related to $10.0 million of REO properties optioned as part of a special auction sponsored by the Corporation. Approximately $5.6 million of such properties were sold during the first quarter. Also impacting the comparison to the previous quarter was the $1.3 million gain realized in the first quarter of 2012 on the sale of certain commercial REO properties in both, Puerto Rico and Florida.
|
●
|
A decrease of $0.9 million in business promotion expenses, mainly due to lower marketing activities as well as decreases in marketing research-related costs.
|
●
|
A decrease of $0.4 million in the deposit insurance premium expense mainly resulting from the decrease in the Bank’s average total assets.
|
●
|
A decrease of $0.4 million in write-downs and realized losses on the disposition of non-real estate repossessed assets.
|
●
|
An increase of $2.4 million in employees’ compensation and benefits expenses, reflecting higher seasonal payroll taxes and higher bonuses expenses.
|
●
|
A $2.5 million non-recurring charge associated with a contingency adjustment related to the collectibility of certain tax credits, included as part of “other expenses” in the table above.
|
●
|
A $0.5 million increase in professional fees, primarily legal fees and related expenses, partially offset by the decrease of $1.4 million in directors’ fees associated with the election of new directors to the Corporation’s Board of Directors during the previous quarter.
|
●
|
A negative variance of $0.85 million in the provision for off-balance sheet exposures, as the previous quarter included a $0.7 million reserve release related to the decline in the amount of unfunded loan commitments compared to a slight reserve increase of $0.2 million in the first quarter of 2012.
|
(Dollars in thousands)
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
2012
|
2011
|
2011
|
2011
|
2011
|
|||||||||||||||||
Non-performing loans held for investment:
|
|||||||||||||||||||||
Residential mortgage
|
$
|
341,188
|
$
|
338,208
|
$
|
364,561
|
$
|
380,165
|
$
|
391,962
|
|||||||||||
Commercial mortgage
|
244,391
|
240,414
|
188,326
|
196,037
|
129,828
|
||||||||||||||||
Commercial and Industrial
|
263,604
|
270,171
|
315,360
|
309,888
|
327,477
|
||||||||||||||||
Construction
|
231,071
|
250,022
|
270,411
|
280,286
|
341,179
|
||||||||||||||||
Consumer and Finance leases
|
39,159
|
39,547
|
45,031
|
42,065
|
42,605
|
||||||||||||||||
Total non-performing loans held for investment
|
1,119,413
|
1,138,362
|
1,183,689
|
1,208,441
|
1,233,051
|
||||||||||||||||
REO
|
135,905
|
114,292
|
109,514
|
96,618
|
91,948
|
||||||||||||||||
Other repossessed property
|
12,494
|
15,392
|
14,397
|
14,884
|
15,125
|
||||||||||||||||
Other assets (1)
|
64,543
|
64,543
|
64,543
|
64,543
|
64,543
|
||||||||||||||||
Total non-performing assets, excluding loans held for sale
|
$
|
1,332,355
|
$
|
1,332,589
|
$
|
1,372,143
|
$
|
1,384,486
|
$
|
1,404,667
|
|||||||||||
Non-performing loans held for sale
|
-
|
4,764
|
5,107
|
5,087
|
5,454
|
||||||||||||||||
Total non-performing assets, including loans held for sale
|
$
|
1,332,355
|
$
|
1,337,353
|
$
|
1,377,250
|
$
|
1,389,573
|
$
|
1,410,121
|
|||||||||||
Past due loans 90 days and still accruing
|
$
|
133,191
|
$
|
130,816
|
$
|
156,775
|
$
|
156,919
|
$
|
154,299
|
|||||||||||
Non-performing loans held for investment to total loans held for investment
|
10.87
|
%
|
10.78
|
%
|
11.13
|
%
|
11.23
|
%
|
11.12
|
%
|
|||||||||||
Non-performing assets, excluding non-performing loans held for sale,
|
|||||||||||||||||||||
to total assets, excluding non-performing loans held for sale
|
10.18
|
%
|
10.15
|
%
|
10.19
|
%
|
9.81
|
%
|
9.30
|
%
|
|||||||||||
Non-performing assets to total assets
|
10.18
|
%
|
10.19
|
%
|
10.22
|
%
|
9.85
|
%
|
9.34
|
%
|
|||||||||||
(1) Collateral pledged with Lehman Brothers Special Financing, Inc.
|
|||||||||||||||||||||
(In thousands)
|
As of March 31, 2012
|
||||||||||||||||||||||||||||||||||||||
Puerto Rico
|
Virgin Islands
|
Florida
|
Consolidated
|
||||||||||||||||||||||||||||||||||||
Residential
|
Commercial
|
Construction
|
Residential
|
Commercial
|
Construction
|
Residential
|
Commercial
|
Construction
|
|||||||||||||||||||||||||||||||
Beginning Balance
|
$
|
55,381
|
$
|
24,629
|
$
|
5,778
|
$
|
6,520
|
$
|
-
|
$
|
680
|
$
|
5,710
|
$
|
11,613
|
$
|
3,981
|
$
|
114,292
|
|||||||||||||||||||
Additions
|
12,774
|
11,477
|
76
|
-
|
3,061
|
17,388
|
1,483
|
1,989
|
-
|
48,248
|
|||||||||||||||||||||||||||||
Sales
|
(10,099
|
)
|
(3,008
|
)
|
(163
|
)
|
(374
|
)
|
-
|
-
|
(2,188
|
)
|
(4,695
|
)
|
-
|
(20,527
|
)
|
||||||||||||||||||||||
Fair value adjustments
|
(3,069
|
)
|
(1,993
|
)
|
(331
|
)
|
-
|
-
|
(12
|
)
|
(222
|
)
|
(241
|
)
|
(240
|
)
|
(6,108
|
)
|
|||||||||||||||||||||
Ending balance
|
$
|
54,987
|
$
|
31,105
|
$
|
5,360
|
$
|
6,146
|
$
|
3,061
|
$
|
18,056
|
$
|
4,783
|
$
|
8,666
|
$
|
3,741
|
$
|
135,905
|
|||||||||||||||||||
(Dollars in thousands)
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||||||
2012
|
2011
|
2011
|
2011
|
2011
|
|||||||||||||||||
Allowance for loan and lease losses, beginning of period
|
$
|
493,917
|
$
|
519,687
|
$
|
540,878
|
$
|
561,695
|
$
|
553,025
|
|||||||||||
Provision (recovery) for loan and lease losses:
|
|||||||||||||||||||||
Residential mortgage
|
2,336
|
8,423
|
17,744
|
12,845
|
6,327
|
||||||||||||||||
Commercial mortgage
|
1,578
|
21,746
|
13,324
|
6,062
|
13,381
|
||||||||||||||||
Commercial and Industrial
|
20,158
|
5,302
|
10,437
|
21,486
|
41,486
|
||||||||||||||||
Construction
|
7,716
|
(1,096
|
)
|
(2,547
|
)
|
21,354
|
22,463
|
||||||||||||||
Consumer and finance leases
|
4,409
|
7,612
|
7,488
|
(2,563
|
)
|
5,075
|
|||||||||||||||
Total provision for loan and lease losses
|
36,197
|
41,987
|
46,446
|
59,184
|
88,732
|
||||||||||||||||
Loans net charge-offs:
|
|||||||||||||||||||||
Residential mortgage
|
(5,731
|
)
|
(9,077
|
)
|
(15,816
|
)
|
(8,937
|
)
|
(5,161
|
)
|
|||||||||||
Commercial mortgage
|
(3,594
|
)
|
(13,555
|
)
|
(3,309
|
)
|
(3,150
|
)
|
(31,104
|
)
|
|||||||||||
Commercial and Industrial
|
(12,669
|
)
|
(17,285
|
)
|
(22,526
|
)
|
(10,763
|
)
|
(16,288
|
)
|
|||||||||||
Construction
|
(15,392
|
)
|
(19,492
|
)
|
(16,823
|
)
|
(47,207
|
)
|
(17,238
|
)
|
|||||||||||
Consumer and finance leases
|
(8,785
|
)
|
(8,348
|
)
|
(9,163
|
)
|
(9,944
|
)
|
(10,271
|
)
|
|||||||||||
Net charge-offs
|
(46,171
|
)
|
(67,757
|
)
|
(67,637
|
)
|
(80,001
|
)
|
(80,062
|
)
|
|||||||||||
Allowance for loan and lease losses, end of period
|
$
|
483,943
|
$
|
493,917
|
$
|
519,687
|
$
|
540,878
|
$
|
561,695
|
|||||||||||
Allowance for loan and lease losses to period end total loans held for investment
|
4.70
|
%
|
4.68
|
%
|
4.89
|
%
|
5.02
|
%
|
5.06
|
%
|
|||||||||||
Net charge-offs (annualized) to average loans outstanding during the period
|
1.78
|
%
|
2.55
|
%
|
2.50
|
%
|
2.91
|
%
|
2.74
|
%
|
|||||||||||
Provision for loan and lease losses to net charge-offs during the period
|
0.78x
|
0.62x
|
0.69x
|
0.74x
|
1.11x
|
||||||||||||||||
(Dollars in thousands)
|
Residential
Mortgage Loans
|
Commercial
Mortgage Loans
|
C&I Loans
|
Construction Loans
|
Consumer and
Finance Leases
|
Total
|
||||||||||||||||||
As of March 31, 2012
|
||||||||||||||||||||||||
Non-performing loans held for investment charged-off to realizable value
|
$
|
222,093
|
$
|
11,335
|
$
|
58,205
|
$
|
41,531
|
$
|
2,624
|
$
|
335,788
|
||||||||||||
Other non-performing loans held for investment
|
119,095
|
233,056
|
205,399
|
189,540
|
36,535
|
783,625
|
||||||||||||||||||
Total non-performing loans held for investment
|
$
|
341,188
|
$
|
244,391
|
$
|
263,604
|
$
|
231,071
|
$
|
39,159
|
$
|
1,119,413
|
||||||||||||
Allowance to non-performing loans held for investment
|
19.13
|
%
|
43.77
|
%
|
65.24
|
%
|
36.23
|
%
|
142.99
|
%
|
43.23
|
%
|
||||||||||||
Allowance to non-performing loans held for investment,
|
||||||||||||||||||||||||
excluding non-performing loans charged-off to realizable value
|
54.82
|
%
|
45.90
|
%
|
83.73
|
%
|
44.16
|
%
|
153.26
|
%
|
61.76
|
%
|
||||||||||||
As of December 31, 2011
|
||||||||||||||||||||||||
Non-performing loans held for investment charged-off to realizable value
|
$
|
233,703
|
$
|
21,925
|
$
|
70,462
|
$
|
70,959
|
$
|
2,605
|
$
|
399,654
|
||||||||||||
Other non-performing loans held for investment
|
104,505
|
218,489
|
199,709
|
179,063
|
36,942
|
738,708
|
||||||||||||||||||
Total non-performing loans held for investment
|
$
|
338,208
|
$
|
240,414
|
$
|
270,171
|
$
|
250,022
|
$
|
39,547
|
$
|
1,138,362
|
||||||||||||
Allowance to non-performing loans held for investment
|
20.31
|
%
|
45.33
|
%
|
60.88
|
%
|
36.55
|
%
|
152.66
|
%
|
43.39
|
%
|
||||||||||||
Allowance to non-performing loans held for investment,
|
||||||||||||||||||||||||
excluding non-performing loans charged-off to realizable value
|
65.72
|
%
|
49.88
|
%
|
82.36
|
%
|
51.04
|
%
|
163.42
|
%
|
66.86
|
%
|
||||||||||||
(Dollars in thousands)
|
Residential
Mortgage Loans
|
Commercial
Mortgage Loans
|
C&I Loans
|
Construction Loans
|
Consumer and
Finance Leases
|
Total
|
||||||||||||||||||
As of March 31, 2012
|
||||||||||||||||||||||||
Impaired loans without specific reserves:
|
||||||||||||||||||||||||
Principal balance of loans, net of charge-offs
|
$
|
185,194
|
$
|
53,854
|
$
|
10,356
|
$
|
37,895
|
$
|
3,139
|
$
|
290,438
|
||||||||||||
Impaired loans with specific reserves:
|
||||||||||||||||||||||||
Principal balance of loans, net of charge-offs
|
415,457
|
313,679
|
251,082
|
184,704
|
21,672
|
1,186,594
|
||||||||||||||||||
Allowance for loan and lease losses
|
47,105
|
57,932
|
67,248
|
46,796
|
5,495
|
224,576
|
||||||||||||||||||
Allowance for loan and lease losses to principal balance
|
11.34
|
%
|
18.47
|
%
|
26.78
|
%
|
25.34
|
%
|
25.36
|
%
|
18.93
|
%
|
||||||||||||
Loans with general allowance:
|
||||||||||||||||||||||||
Principal balance of loans
|
2,198,573
|
1,133,213
|
3,782,495
|
176,457
|
1,528,015
|
8,818,753
|
||||||||||||||||||
Allowance for loan and lease losses
|
18,178
|
49,044
|
104,731
|
36,914
|
50,500
|
259,367
|
||||||||||||||||||
Allowance for loan and lease losses to principal balance
|
0.83
|
%
|
4.33
|
%
|
2.77
|
%
|
20.92
|
%
|
3.30
|
%
|
2.94
|
%
|
||||||||||||
Total loans held for investment:
|
||||||||||||||||||||||||
Principal balance of loans
|
$
|
2,799,224
|
$
|
1,500,746
|
$
|
4,043,933
|
$
|
399,056
|
$
|
1,552,826
|
$
|
10,295,785
|
||||||||||||
Allowance for loan and lease losses
|
65,283
|
106,976
|
171,979
|
83,710
|
55,995
|
483,943
|
||||||||||||||||||
Allowance for loan and lease losses to principal balance
|
2.33
|
%
|
7.13
|
%
|
4.25
|
%
|
20.98
|
%
|
3.61
|
%
|
4.70
|
%
|
||||||||||||
As of December 31, 2011
|
||||||||||||||||||||||||
Impaired loans without specific reserves:
|
||||||||||||||||||||||||
Principal balance of loans, net of charge-offs
|
$
|
181,081
|
$
|
13,797
|
$
|
40,453
|
$
|
33,759
|
$
|
2,840
|
$
|
271,930
|
||||||||||||
Impaired loans with specific reserves:
|
||||||||||||||||||||||||
Principal balance of loans, net of charge-offs
|
423,340
|
354,954
|
223,572
|
213,388
|
20,192
|
1,235,446
|
||||||||||||||||||
Allowance for loan and lease losses
|
48,566
|
59,167
|
58,652
|
44,768
|
3,749
|
214,902
|
||||||||||||||||||
Allowance for loan and lease losses to principal balance
|
11.47
|
%
|
16.67
|
%
|
26.23
|
%
|
20.98
|
%
|
18.57
|
%
|
17.39
|
%
|
||||||||||||
Loans with general allowance:
|
||||||||||||||||||||||||
Principal balance of loans
|
2,269,364
|
1,196,660
|
3,866,491
|
180,716
|
1,538,785
|
9,052,016
|
||||||||||||||||||
Allowance for loan and lease losses
|
20,112
|
49,824
|
105,838
|
46,618
|
56,623
|
279,015
|
||||||||||||||||||
Allowance for loan and lease losses to principal balance
|
0.89
|
%
|
4.16
|
%
|
2.74
|
%
|
25.80
|
%
|
3.68
|
%
|
3.08
|
%
|
||||||||||||
Total loans held for investment:
|
||||||||||||||||||||||||
Principal balance of loans
|
$
|
2,873,785
|
$
|
1,565,411
|
$
|
4,130,516
|
$
|
427,863
|
$
|
1,561,817
|
$
|
10,559,393
|
||||||||||||
Allowance for loan and lease losses
|
68,678
|
108,991
|
164,490
|
91,386
|
60,372
|
493,917
|
||||||||||||||||||
Allowance for loan and lease losses to principal balance
|
2.39
|
%
|
6.96
|
%
|
3.98
|
%
|
21.36
|
%
|
3.87
|
%
|
4.68
|
%
|
||||||||||||
Quarter Ended
|
||||||||||||||||
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||
2012
|
2011
|
2011
|
2011
|
2011
|
||||||||||||
Residential mortgage
|
0.82
|
%
|
1.29
|
%
|
2.24
|
%
|
1.24
|
%
|
0.63
|
%
|
||||||
Commercial mortgage
|
0.92
|
%
|
3.44
|
%
|
0.84
|
%
|
0.81
|
%
|
7.37
|
%
|
||||||
Commercial and Industrial
|
1.25
|
%
|
1.64
|
%
|
2.09
|
%
|
1.01
|
%
|
1.54
|
%
|
||||||
Construction
|
14.23
|
%
|
16.43
|
%
|
12.78
|
%
|
28.62
|
%
|
8.50
|
%
|
||||||
Consumer and finance leases
|
2.26
|
%
|
2.13
|
%
|
2.30
|
%
|
2.43
|
%
|
2.43
|
%
|
||||||
Total loans
|
1.78
|
%
|
2.55
|
%
|
2.50
|
%
|
2.91
|
%
|
2.74
|
%
|
||||||
Quarter Ended
|
||||||||||
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||
2012
|
2011
|
2011
|
2011
|
2011
|
||||||
PUERTO RICO:
|
||||||||||
Residential mortgage
|
0.95%
|
1.15%
|
2.50%
|
1.39%
|
0.39%
|
|||||
Commercial mortgage
|
0.98%
|
4.25%
|
0.99%
|
0.34%
|
10.07%
|
|||||
Commercial and Industrial
|
1.33%
|
1.72%
|
2.20%
|
1.08%
|
1.55%
|
|||||
Construction
|
15.78%
|
19.45%
|
15.02%
|
6.90%
|
8.77%
|
|||||
Consumer and finance leases
|
2.28%
|
2.22%
|
2.33%
|
2.49%
|
2.50%
|
|||||
Total loans
|
1.80%
|
2.57%
|
2.62%
|
1.57%
|
2.82%
|
|||||
VIRGIN ISLANDS:
|
||||||||||
Residential mortgage
|
0.08%
|
0.27%
|
0.19%
|
-0.13%
|
(2)
|
0.05%
|
||||
Commercial mortgage
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
|||||
Commercial and Industrial
|
0.03%
|
0.00%
|
0.00%
|
-0.19%
|
(3)
|
1.59%
|
||||
Construction
|
19.29%
|
12.92%
|
9.78%
|
77.30%
|
0.16%
|
|||||
Consumer and finance leases
|
0.90%
|
0.14%
|
2.34%
|
0.75%
|
1.05%
|
|||||
Total loans
|
3.22%
|
2.24%
|
1.84%
|
14.59%
|
0.45%
|
|||||
FLORIDA:
|
||||||||||
Residential mortgage
|
0.90%
|
3.76%
|
3.27%
|
2.07%
|
3.26%
|
|||||
Commercial mortgage
|
0.93%
|
1.98%
|
0.62%
|
2.00%
|
1.65%
|
|||||
Commercial and Industrial
|
0.72%
|
3.34%
|
2.32%
|
0.00%
|
0.92%
|
|||||
Construction
|
-33.52%
|
(1)
|
0.92%
|
6.38%
|
38.62%
|
26.29%
|
||||
Consumer and finance leases
|
3.59%
|
1.20%
|
1.02%
|
2.85%
|
1.59%
|
|||||
Total loans
|
0.00%
|
2.61%
|
1.93%
|
4.38%
|
4.29%
|
|||||
(1) For the first quarter of 2012, recoveries in construction loans in Florida exceeded charge-offs.
|
||||||||||
(2) For the second quarter of 2011, recoveries in residential mortgage loans in the Virgin Islands exceeded charge-offs.
|
||||||||||
(3) For the second quarter of 2011, recoveries in commercial and industrial loans in the Virgin Islands exceeded charge-offs.
|
||||||||||
(In thousands, except ratios and per share information)
|
|||||||||||||||||||||
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
|||||||||||||||||
2012
|
2011
|
2011
|
2011
|
2011
|
|||||||||||||||||
Tangible Equity:
|
|||||||||||||||||||||
Total equity - GAAP
|
$
|
1,433,023
|
$
|
1,444,144
|
$
|
986,847
|
$
|
1,009,578
|
$
|
1,027,269
|
|||||||||||
Preferred equity
|
(63,047
|
)
|
(63,047
|
)
|
(430,498
|
)
|
(428,703
|
)
|
(426,724
|
)
|
|||||||||||
Goodwill
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
|||||||||||
Core deposit intangible
|
(11,100
|
)
|
(11,689
|
)
|
(12,277
|
)
|
(12,866
|
)
|
(13,454
|
)
|
|||||||||||
Tangible common equity
|
$
|
1,330,778
|
$
|
1,341,310
|
$
|
515,974
|
$
|
539,911
|
$
|
558,993
|
|||||||||||
Tangible Assets:
|
|||||||||||||||||||||
Total assets - GAAP
|
$
|
13,085,623
|
$
|
13,127,275
|
$
|
13,475,572
|
$
|
14,113,973
|
$
|
15,104,090
|
|||||||||||
Goodwill
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
|||||||||||
Core deposit intangible
|
(11,100
|
)
|
(11,689
|
)
|
(12,277
|
)
|
(12,866
|
)
|
(13,454
|
)
|
|||||||||||
Tangible assets
|
$
|
13,046,425
|
$
|
13,087,488
|
$
|
13,435,197
|
$
|
14,073,009
|
$
|
15,062,538
|
|||||||||||
Common shares outstanding
|
206,134
|
205,134
|
21,304
|
21,304
|
21,304
|
||||||||||||||||
Tangible common equity ratio
|
10.20
|
%
|
10.25
|
%
|
3.84
|
%
|
3.84
|
%
|
3.71
|
%
|
|||||||||||
Tangible book value per common share
|
$
|
6.46
|
$
|
6.54
|
$
|
24.22
|
$
|
25.34
|
$
|
26.24
|
|||||||||||
(Dollars in thousands)
|
As of
|
||||||||||||||||||||
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
|||||||||||||||||
2012
|
2011
|
2011
|
2011
|
2011
|
|||||||||||||||||
Tier 1 Common Equity:
|
|||||||||||||||||||||
Total equity - GAAP
|
$
|
1,433,023
|
$
|
1,444,144
|
$
|
986,847
|
$
|
1,009,578
|
$
|
1,027,269
|
|||||||||||
Qualifying preferred stock
|
(63,047
|
)
|
(63,047
|
)
|
(430,498
|
)
|
(428,703
|
)
|
(426,724
|
)
|
|||||||||||
Unrealized gain on available-for-sale securities (1)
|
(20,233
|
)
|
(19,234
|
)
|
(13,957
|
)
|
(12,659
|
)
|
(15,453
|
)
|
|||||||||||
Disallowed deferred tax asset (2)
|
(25
|
)
|
-
|
(267
|
)
|
(272
|
)
|
(981
|
)
|
||||||||||||
Goodwill
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
|||||||||||
Core deposit intangible
|
(11,100
|
)
|
(11,689
|
)
|
(12,277
|
)
|
(12,866
|
)
|
(13,454
|
)
|
|||||||||||
Cumulative change gain in fair value of liabilities
|
|||||||||||||||||||||
accounted for under a fair value option
|
(2,434
|
)
|
(2,009
|
)
|
(952
|
)
|
(1,889
|
)
|
(2,156
|
)
|
|||||||||||
Other disallowed assets
|
(807
|
)
|
(922
|
)
|
(907
|
)
|
(808
|
)
|
(881
|
)
|
|||||||||||
Tier 1 common equity
|
$
|
1,307,279
|
$
|
1,319,145
|
$
|
499,890
|
$
|
524,283
|
$
|
539,522
|
|||||||||||
Total risk-weighted assets
|
$
|
9,947,559
|
$
|
10,180,226
|
$
|
10,432,804
|
$
|
10,630,162
|
$
|
11,183,518
|
|||||||||||
Tier 1 common equity to risk-weighted assets ratio
|
13.14
|
%
|
12.96
|
%
|
4.79
|
%
|
4.93
|
%
|
4.82
|
%
|
|||||||||||
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 March 31, 2012 (December 31, 2011 - $13 million; September 30, 2011 - $12 million
|
|||||||||||||||||||||
June 30, 2011 - $11 million; March 31, 2011 - $12 million) was included without limitation in regulatory capital pursuant to the risk-based capital guidelines,
|
|||||||||||||||||||||
while approximately $25k of such assets at March 31, 2012 (December 31, 2011 - $0; September 30, 2011 - $0.3 million; June 30, 2011 - $0.3 million;
|
|||||||||||||||||||||
March 31, 2011 - $1 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 March 31, 2012 (December 31, 2011 - $8 million;
|
|||||||||||||||||||||
September 30, 2011 - $7 million; June 30, 2011 - $5 million; March 31, 2011 - $5 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
|
||||||||
March 31,
|
December 31,
|
|||||||
(In thousands, except for share information)
|
2012
|
2011
|
||||||
ASSETS
|
||||||||
Cash and due from banks
|
$
|
380,065
|
$
|
206,897
|
||||
Money market investments:
|
||||||||
Federal funds sold
|
1,069
|
2,603
|
||||||
Time deposits with other financial institutions
|
955
|
955
|
||||||
Other short-term investments
|
236,116
|
236,111
|
||||||
Total money market investments
|
238,140
|
239,669
|
||||||
Investment securities available for sale, at fair value
|
1,843,484
|
1,923,268
|
||||||
Other equity securities
|
37,951
|
37,951
|
||||||
Total investment securities
|
1,881,435
|
1,961,219
|
||||||
Investment in unconsolidated entities
|
36,990
|
43,401
|
||||||
Loans, net of allowance for loan and lease losses of $483,943
|
||||||||
(December 31, 2011 - $493,917)
|
9,811,842
|
10,065,475
|
||||||
Loans held for sale, at lower of cost or market
|
44,352
|
15,822
|
||||||
Total loans, net
|
9,856,194
|
10,081,297
|
||||||
Premises and equipment, net
|
189,966
|
194,942
|
||||||
Other real estate owned
|
135,905
|
114,292
|
||||||
Accrued interest receivable on loans and investments
|
47,840
|
49,957
|
||||||
Other assets
|
319,088
|
235,601
|
||||||
Total assets
|
$
|
13,085,623
|
$
|
13,127,275
|
||||
LIABILITIES
|
||||||||
Deposits:
|
||||||||
Non-interest-bearing deposits
|
$
|
761,744
|
$
|
705,789
|
||||
Interest-bearing deposits
|
9,146,500
|
9,201,965
|
||||||
Total deposits
|
9,908,244
|
9,907,754
|
||||||
Securities sold under agreements to repurchase
|
1,000,000
|
1,000,000
|
||||||
Advances from the Federal Home Loan Bank (FHLB)
|
353,440
|
367,440
|
||||||
Notes payable
|
16,016
|
23,342
|
||||||
Other borrowings
|
231,959
|
231,959
|
||||||
Accounts payable and other liabilities
|
142,941
|
152,636
|
||||||
Total liabilities
|
11,652,600
|
11,683,131
|
||||||
STOCKHOLDERS' EQUITY
|
||||||||
Preferred Stock, authorized 50,000,000 shares: issued 22,828,174 shares;
|
||||||||
outstanding 2,521,872; aggregate liquidation value $63,047
|
63,047
|
63,047
|
||||||
Common stock, $0.10 par value, authorized 2,000,000,000 shares; issued 206,629,311
|
||||||||
(December 31, 2011 - 205,794,024 shares issued)
|
20,663
|
20,579
|
||||||
Less: Treasury stock (at par value)
|
(49
|
)
|
(66
|
)
|
||||
Common stock outstanding, 206,134,458 shares outstanding
|
||||||||
(December 31, 2011 - 205,134,171 shares outstanding)
|
20,614
|
20,513
|
||||||
Additional paid-in capital
|
884,938
|
884,002
|
||||||
Retained earnings
|
444,202
|
457,384
|
||||||
Accumulated other comprehensive income
|
20,222
|
19,198
|
||||||
Total stockholders' equity
|
1,433,023
|
1,444,144
|
||||||
Total liabilities and stockholders' equity
|
$
|
13,085,623
|
$
|
13,127,275
|
||||
FIRST BANCORP
|
||||||||||||
Condensed Consolidated Statements of Loss
|
||||||||||||
Quarter Ended
|
||||||||||||
March 31,
|
December 31,
|
March 31,
|
||||||||||
(In thousands, except per share information)
|
2012
|
2011
|
2011
|
|||||||||
Net interest income:
|
||||||||||||
Interest income
|
$
|
152,107
|
$
|
156,752
|
$
|
180,903
|
||||||
Interest expense
|
50,241
|
58,209
|
74,624
|
|||||||||
Net interest income
|
101,866
|
98,543
|
106,279
|
|||||||||
Provision for loan and lease losses
|
36,197
|
41,987
|
88,732
|
|||||||||
Net interest income after provision for loan and lease losses
|
65,669
|
56,556
|
17,547
|
|||||||||
Non-interest income:
|
||||||||||||
Other service charges
|
1,519
|
2,116
|
1,718
|
|||||||||
Service charges on deposit accounts
|
3,247
|
2,988
|
3,332
|
|||||||||
Mortgage banking activities
|
4,475
|
3,717
|
6,591
|
|||||||||
Net (loss) gain on investments and impairments
|
(1,207
|
)
|
(1,014
|
)
|
19,341
|
|||||||
Equity in (losses) earnings of unconsolidated entities
|
(6,236
|
)
|
1,666
|
-
|
||||||||
Other non-interest income
|
6,677
|
5,197
|
9,503
|
|||||||||
Total non-interest income
|
8,475
|
14,670
|
40,485
|
|||||||||
Non-interest expenses:
|
||||||||||||
Employees' compensation and benefits
|
31,611
|
29,254
|
30,439
|
|||||||||
Occupancy and equipment
|
15,676
|
15,603
|
15,250
|
|||||||||
Business promotion
|
2,547
|
3,482
|
2,664
|
|||||||||
Professional fees
|
5,179
|
4,692
|
5,137
|
|||||||||
Taxes, other than income taxes
|
3,416
|
3,442
|
3,255
|
|||||||||
Insurance and supervisory fees
|
13,008
|
13,301
|
15,177
|
|||||||||
Net loss on real estate owned (REO) operations
|
3,443
|
8,602
|
5,500
|
|||||||||
Other non-interest expenses
|
10,313
|
7,450
|
5,444
|
|||||||||
Total non-interest expenses
|
85,193
|
85,826
|
82,866
|
|||||||||
Loss before income taxes
|
(11,049
|
)
|
(14,600
|
)
|
(24,834
|
)
|
||||||
Income tax expense
|
(2,133
|
)
|
(242
|
)
|
(3,586
|
)
|
||||||
Net loss
|
$
|
(13,182
|
)
|
$
|
(14,842
|
)
|
$
|
(28,420
|
)
|
|||
Net (loss) income attributable to common stockholders - basic
|
$
|
(13,182
|
)
|
$
|
262,011
|
$
|
(35,437
|
)
|
||||
Net (loss) income attributable to common stockholders - diluted
|
$
|
(13,182
|
)
|
$
|
263,153
|
$
|
(35,437
|
)
|
||||
Net (loss) income per common share:
|
||||||||||||
Basic
|
$
|
(0.06
|
)
|
$
|
1.36
|
$
|
(1.66
|
)
|
||||
Diluted
|
$
|
(0.06
|
)
|
$
|
1.35
|
$
|
(1.66
|
)
|
(In thousands, except for per share and financial ratios)
|
Quarter Ended
|
||||||||||||
March 31,
|
December 31,
|
March 31,
|
|||||||||||
2012
|
2011
|
2011
|
|||||||||||
Condensed Income Statements:
|
|||||||||||||
Total interest income
|
$
|
152,107
|
$
|
156,752
|
$
|
180,903
|
|||||||
Total interest expense
|
50,241
|
58,209
|
74,624
|
||||||||||
Net interest income
|
101,866
|
98,543
|
106,279
|
||||||||||
Provision for loan and lease losses
|
36,197
|
41,987
|
88,732
|
||||||||||
Non-interest income
|
8,475
|
14,670
|
40,485
|
||||||||||
Non-interest expenses
|
85,193
|
85,826
|
82,866
|
||||||||||
Loss before income taxes
|
(11,049
|
)
|
(14,600
|
)
|
(24,834
|
)
|
|||||||
Income tax expense
|
(2,133
|
)
|
(242
|
)
|
(3,586
|
)
|
|||||||
Net loss
|
(13,182
|
)
|
(14,842
|
)
|
(28,420
|
)
|
|||||||
Net (loss) income attributable to common stockholders - basic
|
(13,182
|
)
|
262,011
|
(35,437
|
)
|
||||||||
Net (loss) income attributable to common stockholders - diluted
|
(13,182
|
)
|
263,153
|
(35,437
|
)
|
||||||||
Per Common Share Results:
|
|||||||||||||
Net (loss) earnings per share basic
|
$
|
(0.06
|
)
|
$
|
1.36
|
$
|
(1.66
|
)
|
|||||
Net (loss) earnings per share diluted
|
$
|
(0.06
|
)
|
$
|
1.35
|
$
|
(1.66
|
)
|
|||||
Cash dividends declared
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||||
Average shares outstanding
|
205,217
|
192,546
|
21,303
|
||||||||||
Average shares outstanding diluted
|
205,217
|
194,741
|
21,303
|
||||||||||
Book value per common share
|
$
|
6.65
|
$
|
6.73
|
$
|
28.19
|
|||||||
Tangible book value per common share (1)
|
$
|
6.46
|
$
|
6.54
|
$
|
26.24
|
|||||||
Selected Financial Ratios (In Percent):
|
|||||||||||||
Profitability:
|
|||||||||||||
Return on Average Assets
|
(0.41
|
)
|
(0.43
|
)
|
(0.75
|
)
|
|||||||
Interest Rate Spread (2)
|
2.95
|
2.73
|
2.64
|
||||||||||
Net Interest Margin (2)
|
3.25
|
3.03
|
2.89
|
||||||||||
Return on Average Total Equity
|
(3.67
|
)
|
(4.16
|
)
|
(11.09
|
)
|
|||||||
Return on Average Common Equity
|
(3.84
|
)
|
(4.77
|
)
|
(23.42
|
)
|
|||||||
Average Total Equity to Average Total Assets
|
11.09
|
10.45
|
6.76
|
||||||||||
Tangible common equity ratio (1)
|
10.20
|
10.25
|
3.71
|
||||||||||
Dividend payout ratio
|
-
|
-
|
-
|
||||||||||
Efficiency ratio (3)
|
77.21
|
75.81
|
56.46
|
||||||||||
Asset Quality:
|
|||||||||||||
Allowance for loan and lease losses to loans held for investment
|
4.70
|
4.68
|
5.06
|
||||||||||
Net charge-offs (annualized) to average loans
|
1.78
|
2.55
|
2.74
|
||||||||||
Provision for loan and lease losses to net charge-offs
|
78.40
|
61.97
|
110.83
|
||||||||||
Non-performing assets to total assets
|
10.18
|
10.19
|
9.34
|
||||||||||
Non-performing loans held for investment to total loans held for investment
|
10.87
|
10.78
|
11.12
|
||||||||||
Allowance to total non-performing loans held for investment
|
43.23
|
43.39
|
45.55
|
||||||||||
Allowance to total non-performing loans held for investment
|
|||||||||||||
excluding residential real estate loans
|
62.19
|
61.73
|
66.78
|
||||||||||
Other Information:
|
|||||||||||||
Common Stock Price: End of period
|
$
|
4.40
|
$
|
3.49
|
$
|
5.00
|
|||||||
1- Non-GAAP measure. See pages 19-20 for GAAP to Non-GAAP reconciliations.
|
|||||||||||||
2- On a tax-equivalent basis. See page 6 for GAAP to Non-GAAP reconciliations and refer to discussions in Table 2 below.
|
|||||||||||||
3- 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.
|
|||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||||||||||
Average volume
|
Interest income (1) / expense
|
Average rate (1)
|
|||||||||||||||||||||||||
March 31,
|
December 31,
|
March 31,
|
March 31,
|
December 31,
|
March 31,
|
March 31,
|
December 31,
|
March 31,
|
|||||||||||||||||||
Quarter ended
|
2012
|
2011
|
2011
|
2012
|
2011
|
2011
|
2012
|
2011
|
2011
|
||||||||||||||||||
Interest-earning assets:
|
|||||||||||||||||||||||||||
Money market & other short-term investments
|
$
|
502,182
|
$
|
733,072
|
$
|
488,087
|
$
|
369
|
$
|
522
|
$
|
309
|
0.30
|
%
|
0.28
|
%
|
0.26
|
%
|
|||||||||
Government obligations (2)
|
956,338
|
960,234
|
1,344,053
|
4,078
|
3,943
|
6,189
|
1.72
|
%
|
1.63
|
%
|
1.87
|
%
|
|||||||||||||||
Mortgage-backed securities
|
899,370
|
931,008
|
1,701,179
|
7,435
|
7,804
|
17,005
|
3.32
|
%
|
3.33
|
%
|
4.05
|
%
|
|||||||||||||||
Corporate bonds
|
2,000
|
2,000
|
2,000
|
29
|
29
|
29
|
5.83
|
%
|
5.75
|
%
|
5.88
|
%
|
|||||||||||||||
FHLB stock
|
36,651
|
38,227
|
51,332
|
401
|
324
|
713
|
4.40
|
%
|
3.36
|
%
|
5.63
|
%
|
|||||||||||||||
Equity securities
|
1,377
|
1,377
|
1,377
|
-
|
-
|
1
|
0.00
|
%
|
0.00
|
%
|
0.29
|
%
|
|||||||||||||||
Total investments (3)
|
2,397,918
|
2,665,918
|
3,588,028
|
12,312
|
12,622
|
24,246
|
2.07
|
%
|
1.88
|
%
|
2.74
|
%
|
|||||||||||||||
Residential mortgage loans
|
2,790,723
|
2,805,567
|
3,262,780
|
38,740
|
38,665
|
47,844
|
5.58
|
%
|
5.47
|
%
|
5.95
|
%
|
|||||||||||||||
Construction loans
|
432,550
|
474,647
|
811,530
|
2,659
|
2,963
|
6,377
|
2.47
|
%
|
2.48
|
%
|
3.19
|
%
|
|||||||||||||||
C&I and commercial mortgage loans
|
5,611,554
|
5,791,380
|
5,907,727
|
56,643
|
59,966
|
58,191
|
4.06
|
%
|
4.11
|
%
|
3.99
|
%
|
|||||||||||||||
Finance leases
|
243,344
|
249,394
|
278,642
|
5,312
|
5,230
|
5,694
|
8.78
|
%
|
8.32
|
%
|
8.29
|
%
|
|||||||||||||||
Consumer loans
|
1,311,075
|
1,316,535
|
1,411,940
|
37,850
|
38,516
|
40,520
|
11.61
|
%
|
11.61
|
%
|
11.64
|
%
|
|||||||||||||||
Total loans (4) (5)
|
10,389,246
|
10,637,523
|
11,672,619
|
141,204
|
145,340
|
158,626
|
5.47
|
%
|
5.42
|
%
|
5.51
|
%
|
|||||||||||||||
Total interest-earning assets
|
$
|
12,787,164
|
$
|
13,303,441
|
$
|
15,260,647
|
$
|
153,516
|
$
|
157,962
|
$
|
182,872
|
4.83
|
%
|
4.71
|
%
|
4.86
|
%
|
|||||||||
Interest-bearing liabilities:
|
|||||||||||||||||||||||||||
Brokered CDs
|
$
|
3,636,596
|
$
|
4,104,884
|
$
|
6,019,057
|
$
|
19,733
|
$
|
22,726
|
$
|
32,769
|
2.18
|
%
|
2.20
|
%
|
2.21
|
%
|
|||||||||
Other interest-bearing deposits
|
5,473,194
|
5,505,317
|
5,238,157
|
17,001
|
19,276
|
21,290
|
1.25
|
%
|
1.39
|
%
|
1.65
|
%
|
|||||||||||||||
Loans payable
|
-
|
-
|
-
|
-
|
-
|
-
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
|||||||||||||||
Other borrowed funds
|
1,251,580
|
1,253,921
|
1,660,759
|
10,217
|
10,639
|
15,222
|
3.28
|
%
|
3.37
|
%
|
3.72
|
%
|
|||||||||||||||
FHLB advances
|
363,792
|
391,603
|
576,729
|
3,241
|
3,576
|
4,745
|
3.58
|
%
|
3.62
|
%
|
3.34
|
%
|
|||||||||||||||
Total interest-bearing liabilities (6)
|
$
|
10,725,162
|
$
|
11,255,725
|
$
|
13,494,702
|
$
|
50,192
|
$
|
56,217
|
$
|
74,026
|
1.88
|
%
|
1.98
|
%
|
2.22
|
%
|
|||||||||
Net interest income
|
$
|
103,324
|
$
|
101,745
|
$
|
108,846
|
|||||||||||||||||||||
Interest rate spread
|
2.95
|
%
|
2.73
|
%
|
2.64
|
%
|
|||||||||||||||||||||
Net interest margin
|
3.25
|
%
|
3.03
|
%
|
2.89
|
%
|
|||||||||||||||||||||
1- On a tax-equivalent basis. The tax-equivalent yield was estimated by dividing the interest rate spread on exempt assets by 1 less the Puerto Rico statutory tax rate (30% for
|
|||||||||||||||||||||||||||
2012; 30% for the Corporation's subsidiaries other than IBEs and 25% for the Corporation's IBEs in 2011) 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 $2.4 million, $2.6 million and $2.2 million for the quarters ended March 31, 2012, December 31, 2011 and March 31, 2011, 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
|
|||||||
March 31,
|
December 31,
|
March 31,
|
|||||
(In thousands)
|
2012
|
2011
|
2011
|
||||
Other service charges
|
$ 1,519
|
$ 2,116
|
$ 1,718
|
||||
Service charges on deposit accounts
|
3,247
|
2,988
|
3,332
|
||||
Mortgage banking activities
|
4,475
|
3,717
|
6,591
|
||||
Insurance income
|
1,480
|
1,002
|
1,333
|
||||
Broker-dealer income
|
1,263
|
381
|
48
|
||||
Other operating income
|
3,934
|
3,814
|
8,122
|
||||
Non-interest income before net gain on investments,
|
|||||||
loss on early extinguishment of borrowings and
|
|||||||
equity in losses of unconsolidated entities
|
15,918
|
14,018
|
21,144
|
||||
Proceeds from securities litigation settlement and other proceeds
|
26
|
-
|
631
|
||||
Net gain on sale of investments
|
-
|
-
|
18,710
|
||||
OTTI on debt securities
|
(1,233)
|
(1,014)
|
-
|
||||
Net (loss) gain on investments
|
(1,207)
|
(1,014)
|
19,341
|
||||
Equity in (losses) earnings of unconsolidated entities
|
(6,236)
|
1,666
|
-
|
||||
$ 8,475
|
$ 14,670
|
$ 40,485
|
|||||
Quarter Ended
|
|||||||||
March 31,
|
December 31,
|
March 31,
|
|||||||
2012
|
2011
|
2011
|
|||||||
Employees' compensation and benefits
|
$
|
31,611
|
$
|
29,254
|
$
|
30,439
|
|||
Occupancy and equipment
|
15,676
|
15,603
|
15,250
|
||||||
Deposit insurance premium
|
11,987
|
12,411
|
13,465
|
||||||
Other taxes, insurance and supervisory fees
|
4,437
|
4,332
|
4,967
|
||||||
Professional fees
|
5,179
|
4,692
|
5,137
|
||||||
Servicing and processing fees
|
2,160
|
2,454
|
2,211
|
||||||
Business promotion
|
2,547
|
3,482
|
2,664
|
||||||
Communications
|
1,721
|
1,724
|
1,878
|
||||||
Net loss on REO operations
|
3,443
|
8,602
|
5,500
|
||||||
Other
|
6,432
|
3,272
|
1,355
|
||||||
Total
|
$
|
85,193
|
$
|
85,826
|
$
|
82,866
|
|||
(In thousands)
|
As of
|
||||||
March 31,
|
December 31,
|
||||||
2012
|
2011
|
||||||
Balance Sheet Data:
|
|||||||
Loans, including loans held for sale
|
$
|
10,340,137
|
$
|
10,575,214
|
|||
Allowance for loan and lease losses
|
483,943
|
493,917
|
|||||
Money market and investment securities
|
2,119,575
|
2,200,888
|
|||||
Intangible assets
|
39,198
|
39,787
|
|||||
Deferred tax asset, net
|
4,945
|
5,442
|
|||||
Total assets
|
13,085,623
|
13,127,275
|
|||||
Deposits
|
9,908,244
|
9,907,754
|
|||||
Borrowings
|
1,601,415
|
1,622,741
|
|||||
Total preferred equity
|
63,047
|
63,047
|
|||||
Total common equity
|
1,349,754
|
1,361,899
|
|||||
Accumulated other comprehensive income, net of tax
|
20,222
|
19,198
|
|||||
Total equity
|
1,433,023
|
1,444,144
|
|||||
(In thousands)
|
As of
|
||||||
March 31,
|
December 31,
|
||||||
2012
|
2011
|
||||||
Residential mortgage loans
|
$
|
2,799,224
|
$
|
2,873,785
|
|||
Commercial loans:
|
|||||||
Construction loans
|
399,056
|
427,863
|
|||||
Commercial mortgage loans
|
1,500,746
|
1,565,411
|
|||||
Commercial and Industrial loans
|
3,774,913
|
3,856,695
|
|||||
Loans to local financial institutions collateralized by real estate mortgages
|
269,020
|
273,821
|
|||||
Commercial loans
|
5,943,735
|
6,123,790
|
|||||
Finance leases
|
242,228
|
247,003
|
|||||
Consumer loans
|
1,310,598
|
1,314,814
|
|||||
Loans held for investment
|
10,295,785
|
10,559,392
|
|||||
Loans held for sale
|
44,352
|
15,822
|
|||||
Total loans
|
$
|
10,340,137
|
$
|
10,575,214
|
|||
(In thousands)
|
As of March 31, 2012
|
||||||||||||
Puerto Rico
|
Virgin Islands
|
Florida
|
Consolidated
|
||||||||||
Residential mortgage loans
|
$
|
2,123,972
|
$
|
392,768
|
$
|
282,484
|
$
|
2,799,224
|
|||||
Commercial loans:
|
|||||||||||||
Construction loans
|
252,965
|
122,280
|
23,811
|
399,056
|
|||||||||
Commercial mortgage loans
|
1,053,441
|
64,471
|
382,834
|
1,500,746
|
|||||||||
Commercial and Industrial loans
|
3,503,499
|
227,825
|
43,589
|
3,774,913
|
|||||||||
Loans to a local financial institution collateralized by real estate mortgages
|
269,020
|
-
|
-
|
269,020
|
|||||||||
Commercial loans
|
5,078,925
|
414,576
|
450,234
|
5,943,735
|
|||||||||
Finance leases
|
242,228
|
-
|
-
|
242,228
|
|||||||||
Consumer loans
|
1,223,211
|
55,467
|
31,920
|
1,310,598
|
|||||||||
Loans held for investment
|
8,668,336
|
862,811
|
764,638
|
10,295,785
|
|||||||||
Loans held for sale
|
42,456
|
1,896
|
-
|
44,352
|
|||||||||
Total loans
|
$
|
8,710,792
|
$
|
864,707
|
$
|
764,638
|
$
|
10,340,137
|
|||||
(Dollars in thousands)
|
March 31,
|
December 31,
|
|||||||
2012
|
2011
|
||||||||
Non-performing loans held for investment:
|
|||||||||
Residential mortgage
|
$
|
341,188
|
$
|
338,208
|
|||||
Commercial mortgage
|
244,391
|
240,414
|
|||||||
Commercial and Industrial
|
263,604
|
270,171
|
|||||||
Construction
|
231,071
|
250,022
|
|||||||
Consumer and Finance leases
|
39,159
|
39,547
|
|||||||
Total non-performing loans held for investment
|
1,119,413
|
1,138,362
|
|||||||
REO
|
135,905
|
114,292
|
|||||||
Other repossessed property
|
12,494
|
15,392
|
|||||||
Other Assets (1)
|
64,543
|
64,543
|
|||||||
Total non-performing assets, excluding loans held for sale
|
$
|
1,332,355
|
$
|
1,332,589
|
|||||
Non-performing loans held for sale
|
-
|
4,764
|
|||||||
Total non-performing assets, including loans held for sale
|
$
|
1,332,355
|
$
|
1,337,353
|
|||||
Past due loans 90 days and still accruing
|
$
|
133,191
|
$
|
130,816
|
|||||
Allowance for loan and lease losses
|
483,943
|
$
|
493,917
|
||||||
Allowance to total non-performing loans held for investment
|
43.23
|
%
|
43.39
|
%
|
|||||
Allowance to total non-performing loans held for investment, excluding residential real estate loans
|
62.19
|
%
|
61.73
|
%
|
|||||
(1) Collateral pledged to Lehman Brothers Special Financing, Inc.
|
|||||||||
(Dollars in thousands)
|
March 31,
|
December 31,
|
|||||
2012
|
2011
|
||||||
Puerto Rico:
|
|||||||
Non-performing loans held for investment:
|
|||||||
Residential mortgage
|
$
|
305,955
|
$
|
297,595
|
|||
Commercial mortgage
|
172,825
|
170,949
|
|||||
Commercial and Industrial
|
252,345
|
261,189
|
|||||
Construction
|
137,078
|
137,478
|
|||||
Finance leases
|
3,387
|
3,485
|
|||||
Consumer
|
33,686
|
34,888
|
|||||
Total non-performing loans held for investment
|
905,276
|
905,584
|
|||||
REO
|
91,452
|
85,788
|
|||||
Other repossessed property
|
12,415
|
15,283
|
|||||
Investment securities
|
64,543
|
64,543
|
|||||
Total non-performing assets, excluding loans held for sale
|
$
|
1,073,686
|
$
|
1,071,198
|
|||
Non-performing loans held for sale
|
-
|
4,764
|
|||||
Total non-performing assets, including loans held for sale
|
$
|
1,073,686
|
$
|
1,075,962
|
|||
Past due loans 90 days and still accruing
|
$
|
124,940
|
$
|
118,888
|
|||
Virgin Islands:
|
|||||||
Non-performing loans held for investment:
|
|||||||
Residential mortgage
|
$
|
11,731
|
$
|
11,470
|
|||
Commercial mortgage
|
14,991
|
12,851
|
|||||
Commercial and Industrial
|
9,631
|
7,276
|
|||||
Construction
|
87,555
|
110,594
|
|||||
Consumer
|
489
|
518
|
|||||
Total non-performing loans held for investment
|
124,397
|
142,709
|
|||||
REO
|
27,263
|
7,200
|
|||||
Other repossessed property
|
36
|
67
|
|||||
Total non-performing assets, excluding loans held for sale
|
$
|
151,696
|
$
|
149,976
|
|||
Non-performing loans held for sale
|
-
|
-
|
|||||
Total non-performing assets, including loans held for sale
|
$
|
151,696
|
$
|
149,976
|
|||
Past due loans 90 days and still accruing
|
$
|
8,251
|
$
|
11,204
|
|||
Florida:
|
|||||||
Non-performing loans held for investment:
|
|||||||
Residential mortgage
|
$
|
23,502
|
$
|
29,143
|
|||
Commercial mortgage
|
56,575
|
56,614
|
|||||
Commercial and Industrial
|
1,628
|
1,706
|
|||||
Construction
|
6,438
|
1,950
|
|||||
Consumer
|
1,597
|
656
|
|||||
Total non-performing loans held for investment
|
89,740
|
90,069
|
|||||
REO
|
17,190
|
21,304
|
|||||
Other repossessed property
|
43
|
42
|
|||||
Total non-performing assets, excluding loans held for sale
|
$
|
106,973
|
$
|
111,415
|
|||
Non-performing loans held for sale
|
-
|
-
|
|||||
Total non-performing assets, including loans held for sale
|
$
|
106,973
|
$
|
111,415
|
|||
Past due loans 90 days and still accruing
|
$
|
-
|
$
|
724
|
|||
Quarter Ended
|
|||||||||||||
(Dollars in thousands)
|
March 31,
|
December 31,
|
March 31,
|
||||||||||
2012
|
2011
|
2011
|
|||||||||||
Allowance for loan and lease losses, beginning of period
|
$
|
493,917
|
$
|
519,687
|
$
|
553,025
|
|||||||
Provision (recovery) for loan and lease losses:
|
|||||||||||||
Residential mortgage
|
2,336
|
8,423
|
6,327
|
||||||||||
Commercial mortgage
|
1,578
|
21,746
|
13,381
|
||||||||||
Commercial and Industrial
|
20,158
|
5,302
|
41,486
|
||||||||||
Construction
|
7,716
|
(1,096
|
)
|
22,463
|
|||||||||
Consumer and finance leases
|
4,409
|
7,612
|
5,075
|
||||||||||
Total provision for loan and lease losses
|
36,197
|
41,987
|
88,732
|
||||||||||
Loans net charge-offs:
|
|||||||||||||
Residential mortgage
|
(5,731
|
)
|
(9,077
|
)
|
(5,161
|
)
|
|||||||
Commercial mortgage
|
(3,594
|
)
|
(13,555
|
)
|
(31,104
|
)
|
|||||||
Commercial and Industrial
|
(12,669
|
)
|
(17,285
|
)
|
(16,288
|
)
|
|||||||
Construction
|
(15,392
|
)
|
(19,492
|
)
|
(17,238
|
)
|
|||||||
Consumer and finance leases
|
(8,785
|
)
|
(8,348
|
)
|
(10,271
|
)
|
|||||||
Net charge-offs
|
(46,171
|
)
|
(67,757
|
)
|
(80,062
|
)
|
|||||||
Allowance for loan and lease losses, end of period
|
$
|
483,943
|
$
|
493,917
|
$
|
561,695
|
|||||||
Allowance for loan and lease losses to period end total loans held for investment
|
4.70
|
%
|
4.68
|
%
|
5.06
|
%
|
|||||||
Net charge-offs (annualized) to average loans outstanding during the period
|
1.78
|
%
|
2.55
|
%
|
2.74
|
%
|
|||||||
Provision for loan and lease losses to net charge-offs during the period
|
0.78x
|
0.62x
|
1.11x
|
||||||||||
Quarter ended
|
Year ended
|
||||||||||||||||
March 31,
|
December 31,
|
December 31,
|
December 31,
|
December 31,
|
|||||||||||||
2012
|
2011
|
2010
|
2009
|
2008
|
|||||||||||||
Residential mortgage
|
0.82
|
%
|
1.32
|
%
|
1.80
|
%
|
(1)
|
0.82
|
%
|
0.19
|
%
|
||||||
Commercial mortgage
|
0.92
|
%
|
3.21
|
%
|
5.02
|
%
|
(2)
|
1.64
|
%
|
0.27
|
%
|
||||||
Commercial and Industrial
|
1.25
|
%
|
1.57
|
%
|
2.16
|
%
|
(3)
|
0.72
|
%
|
0.59
|
%
|
||||||
Construction
|
14.23
|
%
|
16.33
|
%
|
23.80
|
%
|
(4)
|
11.54
|
%
|
0.52
|
%
|
||||||
Consumer and finance leases
|
2.26
|
%
|
2.33
|
%
|
2.98
|
%
|
3.05
|
%
|
3.19
|
%
|
|||||||
Total loans
|
1.78
|
%
|
2.68
|
%
|
4.76
|
%
|
(5)
|
2.48
|
%
|
0.87
|
%
|
||||||
(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%.
|