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)
|
o
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
o
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
o
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
o
|
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.
|
Pre-Tax, Pre-Provision Income
|
||||||||
(Dollars in thousands)
|
Year Ended
|
Year Ended
|
||||||
December 31,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
Income (loss) before income taxes
|
$ | 90,575 | $ | (159,323 | ) | |||
Add: Provision for loan and lease losses
|
109,530 | 243,751 | ||||||
Add: Net loss on investments and impairments
|
126 | 159 | ||||||
Less: Unrealized gain on derivative instruments
|
(1,258 | ) | (1,695 | ) | ||||
Less: Prepayment penalty collected on a commercial mortgage loan
|
(2,546 | ) | - | |||||
Add: Acquisitions of mortgage loans from Doral related expenses
|
1,235 | - | ||||||
Add: Bulk sales related expenses and
|
||||||||
other professional fees related to
|
||||||||
the terminated preferred stock exchange offer
|
- | 8,294 | ||||||
Add: Loss on certain OREO properties sold as part of the bulk sale of
|
||||||||
non-performing residential mortgage assets
|
- | 1,879 | ||||||
Add: Secondary offering costs (1)
|
- | 1,669 | ||||||
Add: Credit card processing platform conversion costs
|
- | 1,715 | ||||||
Add: Branch consolidations and other restructuring expenses/valuation adjustments
|
954 | 1,421 | ||||||
Add: Write-off collateral pledged to Lehman and related expenses
|
- | 69,074 | ||||||
Add/Less: Equity in loss (earnings) of unconsolidated entity
|
7,280 | 16,691 | ||||||
Adjusted pre-tax, pre-provision income
|
$ | 205,896 | $ | 183,635 | ||||
(1) Offering of common stock by certain of the Corporation's existing stockholders.
|
Provision for loan and lease losses to Net Charge-Offs (Non-GAAP to GAAP reconciliation)
|
||||||||||||||
Year Ended December 31, 2014
|
Year Ended December 31, 2013
|
|||||||||||||
(In thousands)
|
Provision for Loan
and Lease Losses
|
Net Charge-Offs
|
Provision for Loan and
Lease Losses
|
Net Charge-Offs
|
||||||||||
Provision for loan and lease losses and net charge-offs, excluding special items (Non-GAAP)
|
$ | 108,102 | $ | 166,085 | $ | 111,749 | $ | 160,863 | ||||||
Special items:
|
||||||||||||||
Loss on acquisition of mortgage loans from Doral in full satistaction of secured
|
||||||||||||||
borrowings owed by Doral to FirstBank
|
1,428 | 6,908 | - | - | ||||||||||
Bulk sale of non-performing residential assets and loans transferred to held for sale
|
- | - | 132,002 | 232,444 | ||||||||||
Provision for loan and lease losses and net charge-offs (GAAP)
|
$ | 109,530 | $ | 172,993 | $ | 243,751 | $ | 393,307 | ||||||
Provision for loan and lease losses to net charge-offs, excluding special items (Non-GAAP)
|
65.09% | 69.47% | ||||||||||||
Provision for loan and lease losses to net charge-offs (GAAP)
|
63.31% | 61.97% |
Net Charge-offs to Average loans (GAAP to Non-GAAP reconciliation)
|
||||||||||
(Dollars in thousands)
|
||||||||||
Year Ended December 31, 2014
|
As Reported
(GAAP)
|
Loss on Acquisitions of
Mortgage Loans From
Doral
|
Adjusted, excluding Loss on
Acquisition of Mortgage Loans
from Doral (Non-GAAP)
|
|||||||
Total net charge offs
|
$ | 172,993 | $ | (6,908) | $ | 166,085 | ||||
Total net charge-offs to average loans
|
1.81% | 1.74% | ||||||||
Commercial and Industrial
|
58,255 | (6,908) | 51,347 | |||||||
2.13% | 1.95% |
(Dollars in thousands)
|
|||||||||||||
Year Ended December 31, 2013
|
As Reported
(GAAP)
|
Bulk Sales
Transaction
Impact
|
Loans
Transferred To
Held For Sale
Impact
|
Excluding Bulk Sales
and Loans Transferred
To Held For Sale
Impact (Non-GAAP)
|
|||||||||
|
|||||||||||||
Total net charge-offs
|
$ | 393,307 | $ | 196,491 | $ | 35,953 | $ | 160,863 | |||||
Total net charge-offs to average loans
|
4.01% | 1.68% | |||||||||||
Residential mortgage
|
127,999 | 98,972 | - | 29,027 | |||||||||
Residential mortgage loans net charge-offs to
|
|||||||||||||
average loans
|
4.77% | 1.13% | |||||||||||
Commercial mortgage
|
62,602 | 40,057 | 14,553 | 7,992 | |||||||||
Commercial mortgage loans net charge-offs to
|
|||||||||||||
average loans
|
3.44% | 0.45% | |||||||||||
Commercial and Industrial
|
105,213 | 44,678 | - | 60,535 | |||||||||
Commercial and Industrial loans net charge-offs
|
|||||||||||||
to average loans
|
3.52% | 2.04% | |||||||||||
Construction
|
41,247 | 12,784 | 21,400 | 7,063 | |||||||||
Construction loans net charge-offs to average loans
|
15.11% | 2.91% |
Adjusted Net Income (GAAP to Non-GAAP reconciliation)
|
||||||||||||||||
(In thousands)
|
Year ended December 31, 2013
As Reported (GAAP)
|
Bulk Sales
Transaction Impact
|
Write-off collateral
pledged to Lehman and
related contingency
for attorneys' fees
|
Year Ended December 31, 2013
Adjusted (Non-GAAP)
|
||||||||||||
Net (loss) income
|
$ | (164,487) | $ | 140,842 | $ | 69,074 | $ | 45,429 |
Item 9.01. | Financial Statements and Exhibits. |
Exhibit
|
Description of Exhibit
|
|
99.1
|
Press Release dated February 5, 2015 - First BanCorp Announces Earnings for the quarter and year ended December 31, 2014
|
99.2
|
First BanCorp Conference Call Presentation – Financial Results for the quarter and year ended December 31, 2014
|
|
Exhibits 99.1 and 99.2 referenced therein, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall Exhibits 99.1 and 99.2 be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended.
|
Date: February 5, 2015
|
|
First BanCorp.
|
||
By:
|
/s/ Orlando Berges
|
|||
Name:
|
Orlando Berges
|
|||
Title:
|
EVP and Chief Financial Officer
|
Exhibit
|
Description of Exhibit
|
|
99.1
|
Press Release dated February 5, 2015 - First BanCorp Announces Earnings for the quarter and year ended December 31, 2014
|
99.2
|
First BanCorp Conference Call Presentation – Financial Results for the quarter and year ended December 31, 2014
|
●
|
Net income of $26.3 million, or $0.12 per diluted share, compared to $23.2 million, or $0.11 per diluted share, for the third quarter of 2014.
|
●
|
Pre-tax, pre-provision income of $49.6 million, compared to $50.8 million for the third quarter of 2014.
|
●
|
Provision for loan and lease losses for the quarter decreased by $3.1 million to $23.9 million, mainly reflecting a reduction in net charge-offs, reserve releases due to improvements in the risk classification of certain commercial and industrial loans, and a decline in the migration of commercial mortgage loans to a worse loan classification.
|
●
|
Net interest income increased by $1.5 million to $129.2 million. Adjusted net interest income, excluding fair value adjustments on derivative instruments of $0.3 million and a $2.5 million prepayment penalty collected on a commercial mortgage loan paid off in the fourth quarter, decreased by $0.9 million to $126.3 million driven by declines in the size of the commercial portfolios. The related net interest margin decreased by 3 basis points in the fourth quarter of 2014 to 4.09% compared to 4.12% in the third quarter of 2014.
|
●
|
Non-interest income increased by $1.7 million to $17.9 million for the quarter, primarily due to an increase in merchant and Point of Sale (“POS”) fees as a result of seasonally higher transaction volumes and an increase in revenues from the mortgage banking business.
|
●
|
Non-interest expenses for the quarter increased by $1.2 million to $94.8 million, primarily reflecting, among other things, increases in professional service fees and business promotion expenses.
|
●
|
Credit quality variances:
|
●
|
Total capital, Tier 1 capital, and leverage ratios of 19.16%, 17.89%, and 12.54%, respectively, as of December 31, 2014. Common equity Tier 1 capital ratio of 14.93% and tangible common equity ratio of 10.35% as of December 31, 2014.
|
●
|
Non-brokered deposits, excluding government deposits, up $25.5 million to $6.2 billion as of December 31, 2014.
|
●
|
Government deposits decreased by $68.0 million to $400.7 million as of December 31, 2014 from $468.7 million as of September 30, 2014, reflecting decreases in both our Puerto Rico and Virgin Islands regions. As of December 31, 2014, the Corporation had $227.4 million of government deposits in Puerto Rico and $173.3 million in the Virgin Islands.
|
●
|
Brokered certificates of deposit decreased by $176.7 million to $2.9 billion as of December 31, 2014.
|
●
|
Total loan originations, including refinancings, renewals and draws from existing commitments (excluding credit card utilization activity), of $791.8 million for the fourth quarter of 2014, compared to $821.2 million for the third quarter of 2014.
|
(Dollars in thousands)
|
Quarter Ended
|
|||||||||||||||||||
December 31,
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
||||||||||||||||
2014
|
2014
|
2014
|
2014
|
2013
|
||||||||||||||||
Income before income taxes
|
$
|
28,391
|
$
|
23,265
|
$
|
20,949
|
$
|
17,970
|
$
|
15,634
|
||||||||||
Add: Provision for loan and lease losses
|
23,872
|
26,999
|
26,744
|
31,915
|
22,969
|
|||||||||||||||
Add/Less: Net loss (gain) on investments and impairments
|
172
|
245
|
(291
|
)
|
-
|
-
|
||||||||||||||
Less: Unrealized gain on derivative instruments
|
(265
|
)
|
(418
|
)
|
(262
|
)
|
(313
|
)
|
(355
|
)
|
||||||||||
Less: Prepayment penalty collected on a commercial mortgage loan
|
(2,546
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
Add: Acquisitions of mortgage loans from Doral related expenses
|
-
|
659
|
576
|
-
|
-
|
|||||||||||||||
Less: National gross receipt tax - outside Puerto Rico (1)
|
-
|
-
|
-
|
-
|
(473
|
)
|
||||||||||||||
Add: Branch consolidations and restructuring expenses/valuation adjustments
|
-
|
-
|
236
|
718
|
1,421
|
|||||||||||||||
Add: Loss contingency - attorneys' fees in Lehman litigation
|
-
|
-
|
-
|
-
|
2,500
|
|||||||||||||||
Add/Less: Equity in loss (earnings) of unconsolidated entity
|
-
|
-
|
670
|
6,610
|
5,893
|
|||||||||||||||
Adjusted pre-tax, pre-provision income (2)
|
$
|
49,624
|
$
|
50,750
|
$
|
48,622
|
$
|
56,900
|
$
|
47,589
|
||||||||||
Change from most recent prior quarter-amount
|
$
|
(1,126
|
)
|
$
|
2,128
|
$
|
(8,278
|
)
|
$
|
9,311
|
$
|
(3,282
|
)
|
|||||||
Change from most recent prior quarter-percentage
|
-2.2
|
%
|
4.4
|
%
|
-14.5
|
%
|
19.6
|
%
|
-6.5
|
%
|
||||||||||
(1) Represents the impact of the national gross receipts tax related to the trade or business outside of Puerto Rico that was reversed in the fourth quarter of 2013 after enactment of Act No. 117.
|
||||||||||||||||||||
(2) See "Basis of Presentation" for definition.
|
||||||||||||||||||||
●
|
A $0.9 million decrease in adjusted net interest income, excluding fair value adjustments of $0.3 million and a prepayment penalty of $2.5 million collected on a commercial mortgage loan paid off, mainly driven by the decline in the average volume of commercial and consumer loans, a decrease in commercial loans’ average yield driven by the impact in the previous quarter of past due interest collected on certain non-performing loans paid off, and the contractual repricing of a $100 million repurchase agreement, partially offset by higher interest income on residential mortgage loans attributable to the purchase of approximately $192.6 million of loans from Doral Bank early in the fourth quarter. See Net Interest Income discussion below for additional information.
|
●
|
A $1.6 million increase in adjusted non-interest income of $18.1 million for the fourth quarter of 2014, as compared to $16.4 million for the third quarter of 2014, reflecting, among other things, a $0.7 million increase in merchant and POS fees primarily as a result of seasonally higher transaction volumes and a $0.7 million increase in revenues from the mortgage banking business. Merchant and POS fees increased by $0.4 million in the fourth quarter of 2014 compared to the same quarter in 2013.
|
●
|
A $1.8 million increase in adjusted non-interest expenses of $94.8 million for the fourth quarter of 2014, as compared to adjusted non-interest expenses of $92.9 million for the third quarter of 2014, primarily due to a $2.0 million increase in adjusted professional service fees, a $0.6 million increase in business promotion expenses, and a $0.3 million increase in credit and debit card processing expenses. These variances were partially offset by a $0.7 million decrease in OREO losses and related operating expenses, and a $0.6 million decrease in the deposit insurance assessment. See Non-Interest Expenses section below for additional information.
|
(Dollars in thousands)
|
||||||||||||||||||||
Quarter Ended
|
||||||||||||||||||||
December 31, 2014
|
September 30, 2014
|
June 30, 2014
|
March 31, 2014
|
December 31, 2013
|
||||||||||||||||
Net Interest Income
|
||||||||||||||||||||
Interest income - GAAP
|
$
|
158,293
|
$
|
156,662
|
$
|
158,423
|
$
|
160,571
|
$
|
162,690
|
||||||||||
Unrealized gain on derivative instruments
|
(265
|
)
|
(418
|
)
|
(262
|
)
|
(313
|
)
|
(355
|
)
|
||||||||||
Interest income excluding valuations
|
158,028
|
156,244
|
158,161
|
160,258
|
162,335
|
|||||||||||||||
Prepayment penalty on a commercial mortgage loan tied to an interest rate swap
|
(2,546
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
Interest income excluding valuations and a $2.5 million prepayment penalty collected
|
155,482
|
156,244
|
158,161
|
160,258
|
162,335
|
|||||||||||||||
Tax-equivalent adjustment
|
3,968
|
3,995
|
5,005
|
5,223
|
5,122
|
|||||||||||||||
Prepayment penalty collected on a commercial mortgage loan
|
2,546
|
-
|
-
|
-
|
-
|
|||||||||||||||
Interest income on a tax-equivalent basis excluding valuations
|
161,996
|
160,239
|
163,166
|
165,481
|
167,457
|
|||||||||||||||
Interest expense - GAAP
|
29,141
|
28,968
|
28,516
|
29,251
|
30,031
|
|||||||||||||||
Net interest income - GAAP
|
$
|
129,152
|
$
|
127,694
|
$
|
129,907
|
$
|
131,320
|
$
|
132,659
|
||||||||||
Net interest income excluding valuations and a $2.5 million prepayment penalty collected
|
$
|
126,341
|
$
|
127,276
|
$
|
129,645
|
$
|
131,007
|
$
|
132,304
|
||||||||||
Net interest income on a tax-equivalent basis excluding valuations
|
$
|
132,855
|
$
|
131,271
|
$
|
134,650
|
$
|
136,230
|
$
|
137,426
|
||||||||||
Average Balances
|
||||||||||||||||||||
Loans and leases
|
$
|
9,488,427
|
$
|
9,476,576
|
$
|
9,560,792
|
$
|
9,662,735
|
$
|
9,665,013
|
||||||||||
Total securities and other short-term investments
|
2,764,390
|
2,768,923
|
2,811,178
|
2,816,253
|
2,719,241
|
|||||||||||||||
Average interest-earning assets
|
$
|
12,252,817
|
$
|
12,245,499
|
$
|
12,371,970
|
$
|
12,478,988
|
$
|
12,384,254
|
||||||||||
Average interest-bearing liabilities
|
$
|
10,186,134
|
$
|
10,245,634
|
$
|
10,395,437
|
$
|
10,542,793
|
$
|
10,450,671
|
||||||||||
Average Yield/Rate
|
||||||||||||||||||||
Average yield on interest-earning assets - GAAP
|
5.13
|
%
|
5.08
|
%
|
5.14
|
%
|
5.22
|
%
|
5.21
|
%
|
||||||||||
Average rate on interest-bearing liabilities - GAAP
|
1.14
|
%
|
1.12
|
%
|
1.10
|
%
|
1.13
|
%
|
1.14
|
%
|
||||||||||
Net interest spread - GAAP
|
3.99
|
%
|
3.96
|
%
|
4.04
|
%
|
4.09
|
%
|
4.07
|
%
|
||||||||||
Net interest margin - GAAP
|
4.18
|
%
|
4.14
|
%
|
4.21
|
%
|
4.27
|
%
|
4.25
|
%
|
||||||||||
Average yield on interest-earning assets excluding valuations and a $2.5 million prepayment penalty
|
5.03
|
%
|
5.06
|
%
|
5.13
|
%
|
5.21
|
%
|
5.20
|
%
|
||||||||||
Average rate on interest-bearing liabilities excluding valuations
|
1.14
|
%
|
1.12
|
%
|
1.10
|
%
|
1.13
|
%
|
1.14
|
%
|
||||||||||
Net interest spread excluding valuations and a $2.5 million prepayment penalty collected
|
3.89
|
%
|
3.94
|
%
|
4.03
|
%
|
4.08
|
%
|
4.06
|
%
|
||||||||||
Net interest margin excluding valuations and a $2.5 million prepayment penalty collected
|
4.09
|
%
|
4.12
|
%
|
4.20
|
%
|
4.26
|
%
|
4.24
|
%
|
||||||||||
Average yield on interest-earning assets on a tax-equivalent basis and excluding valuations
|
5.25
|
%
|
5.19
|
%
|
5.29
|
%
|
5.38
|
%
|
5.36
|
%
|
||||||||||
Average rate on interest-bearing liabilities excluding valuations
|
1.14
|
%
|
1.12
|
%
|
1.10
|
%
|
1.13
|
%
|
1.14
|
%
|
||||||||||
Net interest spread on a tax-equivalent basis and excluding valuations
|
4.11
|
%
|
4.07
|
%
|
4.19
|
%
|
4.25
|
%
|
4.22
|
%
|
||||||||||
Net interest margin on a tax-equivalent basis and excluding valuations
|
4.30
|
%
|
4.25
|
%
|
4.37
|
%
|
4.43
|
%
|
4.40
|
%
|
||||||||||
●
|
A $2.5 million decrease in interest income on commercial loans mainly attributable to a $147.6 million reduction in the average volume of commercial loans, or an adverse impact of approximately $1.6 million, and a 9 basis point decrease, or an adverse impact of approximately $0.9 million, in the commercial loans’ average yield mainly due to the impact in the previous quarter of past due interest collected on certain non-performing loans paid off in that quarter.
|
●
|
A $1.0 million decrease in interest income on consumer loans mainly attributable to a $37.8 million reduction in the average volume, primarily in auto loans.
|
●
|
A 21 basis point increase in the average cost of repurchase agreements, or an increase of approximately $0.5 million in interest expense, attributable to the contractual repricing of a $100 million agreement.
|
●
|
A $2.9 million increase in interest income on residential mortgage loans primarily due to the purchase from Doral Bank early in the fourth quarter of approximately $192.6 million in performing residential mortgage loans.
|
●
|
A $0.3 million decrease in interest expense on deposits attributable to both a decline in the average balance of brokered CDs and lower rates paid on savings and interest-bearing checking accounts.
|
●
|
A $5.2 million decrease in the provision for commercial and construction loans in Puerto Rico mainly reflecting a reduction in net charge-offs, reserve releases due to improvements in the risk classification of certain commercial and industrial loans, and a decline in the migration of commercial mortgage loans to a worse loan classification.
|
●
|
A $2.3 million decrease in the provision for commercial and construction loans in the Virgin Islands. The Corporation recorded a negative provision of $2.0 million for commercial and construction loans in the fourth quarter mainly attributable to the improvement in the risk classification of a commercial and industrial loan and a decrease in the general reserve for commercial mortgage loans.
|
●
|
A $2.0 million decrease in the provision for residential mortgage loans, primarily related to lower reserves allocated to loans evaluated for impairment purposes in the United States.
|
●
|
A $3.6 million decrease in loan loss recoveries related to commercial mortgage and construction loans in the United States. Commercial and construction loan loss recoveries in the United States for the fourth quarter of 2014 amounted to $2.8 million compared to $6.4 million in the third quarter.
|
●
|
A $2.1 million increase in the provision for consumer loans primarily related to higher loss severity rates on the auto loan portfolio.
|
Non-Interest Income
|
||||||||||||||||||||
Quarter Ended
|
||||||||||||||||||||
December 31,
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
||||||||||||||||
(In thousands)
|
2014
|
2014
|
2014
|
2014
|
2013
|
|||||||||||||||
Service charges on deposit accounts
|
$
|
4,155
|
$
|
4,205
|
$
|
4,222
|
$
|
4,127
|
$
|
4,114
|
||||||||||
Mortgage banking activities
|
4,472
|
3,809
|
3,036
|
3,368
|
3,906
|
|||||||||||||||
Net (loss) gain on investments and impairments
|
(172
|
)
|
(245
|
)
|
291
|
-
|
-
|
|||||||||||||
Broker-dealer income
|
-
|
-
|
-
|
459
|
97
|
|||||||||||||||
Branch consolidations - valuation adjustments on fixed assets
|
-
|
-
|
-
|
-
|
(529
|
)
|
||||||||||||||
Other operating income
|
9,438
|
8,405
|
9,052
|
10,006
|
10,790
|
|||||||||||||||
Equity in (loss) earnings of unconsolidated entity
|
-
|
-
|
(670
|
)
|
(6,610
|
)
|
(5,893
|
)
|
||||||||||||
Non-interest income
|
$
|
17,893
|
$
|
16,174
|
$
|
15,931
|
$
|
11,350
|
$
|
12,485
|
||||||||||
●
|
A $1.0 million increase in other operating income that includes a $0.7 million increase in merchant and POS fees as a result of seasonally higher transaction volumes and a $0.25 million increase in insurance commissions’ income, net of reserves.
|
●
|
A $0.7 million increase in revenues from the mortgage banking business, primarily related to a $0.7 million increase in realized gains on loan sales and securitization activities attributable to a higher volume of sales. Loans sold and securitized in the secondary market to government-sponsored entities amounted to $91.8 million with a related gain of $3.4 million in the fourth quarter of 2014, compared to $75.1 million and a gain of $2.7 million recorded in the third quarter of 2014. Also contributing to the increase in revenues from the mortgage banking business were a $0.2 million increase in servicing fees and the impact in the previous quarter of charges amounting to $0.2 million related to compensatory fees imposed by government-sponsored agencies. These variances were partially offset by a $0.4 million adverse variance in mark-to-market adjustments on to-be-announced (“TBA”) MBS forward contracts used to hedge the securitization pipeline.
|
NON-INTEREST EXPENSES
|
|||||||||||||||
Quarter Ended
|
|||||||||||||||
December 31,
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
|||||||||||
(In thousands)
|
2014
|
2014
|
2014
|
2014
|
2013
|
||||||||||
Employees' compensation and benefits
|
$
|
33,854
|
$
|
33,877
|
$
|
34,793
|
$
|
32,898
|
$
|
31,014
|
|||||
Occupancy and equipment
|
14,763
|
14,727
|
14,246
|
13,600
|
15,204
|
||||||||||
Deposit insurance premium
|
7,745
|
8,335
|
9,579
|
9,822
|
10,495
|
||||||||||
Other insurance and supervisory fees
|
1,182
|
1,158
|
1,205
|
1,168
|
957
|
||||||||||
Taxes, other than income taxes
|
4,482
|
4,528
|
4,504
|
4,575
|
4,101
|
||||||||||
Professional fees:
|
|||||||||||||||
Collections, appraisals and other credit related fees
|
4,244
|
2,914
|
2,717
|
1,754
|
2,524
|
||||||||||
Outsourcing technology services
|
4,775
|
4,840
|
4,600
|
4,214
|
4,202
|
||||||||||
Other professional fees
|
4,420
|
3,641
|
4,073
|
4,525
|
4,893
|
||||||||||
Credit and debit card processing expenses
|
4,002
|
3,741
|
3,882
|
3,824
|
4,869
|
||||||||||
Branch consolidations and restructuring expenses
|
-
|
-
|
236
|
718
|
892
|
||||||||||
Business promotion
|
4,491
|
3,925
|
4,142
|
3,973
|
5,251
|
||||||||||
Communications
|
1,851
|
2,143
|
1,894
|
1,879
|
1,836
|
||||||||||
Net loss on OREO operations
|
3,655
|
4,326
|
6,778
|
5,837
|
13,321
|
||||||||||
Acquisitions of loans from Doral related expenses
|
-
|
659
|
576
|
-
|
-
|
||||||||||
Loss contingency for attorneys' fees - Lehman litigation
|
-
|
-
|
-
|
-
|
2,500
|
||||||||||
Other
|
5,318
|
4,790
|
4,920
|
3,998
|
4,482
|
||||||||||
Total
|
$
|
94,782
|
$
|
93,604
|
$
|
98,145
|
$
|
92,785
|
$
|
106,541
|
|||||
●
|
A $1.4 million increase in professional service fees, driven by a $1.3 million increase in legal, collection fees and other costs incurred in troubled loans resolution efforts and a $0.3 million increase in consulting fees primarily related to regulatory matters, partially offset by $0.65 million of professional service fees incurred in the previous quarter on the acquisition of mortgage loans from Doral Bank.
|
●
|
A $0.6 million increase in business promotion expenses, driven by an increase of $0.5 million in marketing and charitable contribution expenses and a $0.2 million increase in expenses related to the credit card portfolio rewards program attributed to seasonally higher transaction volumes.
|
●
|
A $0.3 million increase in credit and debit card processing expenses also attributable to seasonally higher transaction volumes.
|
●
|
A $0.3 million increase in losses on sales of repossessed boats, included as part of “Other” in the table above.
|
●
|
A $0.7 million decrease in losses on OREO properties. Total write-downs on OREO properties in the fourth quarter of 2014 amounted to $2.2 million compared to $2.8 million for the third quarter of 2014, a decrease of $0.6 million.
|
●
|
A $0.3 million decrease in postage and mailing expenses, included as part of “Communications” in the table above.
|
●
|
A $0.6 million decrease in the deposit insurance assessment driven by a decrease in leverage commercial loans balance, improved earnings trends, the decrease in brokered deposits and a strengthened capital position.
|
CREDIT QUALITY
|
|||||||||||||||||||||
Non-Performing Assets
|
|||||||||||||||||||||
(Dollars in thousands)
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
||||||||||||||||
2014
|
2014
|
2014
|
2014
|
2013
|
|||||||||||||||||
Non-performing loans held for investment:
|
|||||||||||||||||||||
Residential mortgage
|
$
|
180,707
|
$
|
185,025
|
$
|
175,404
|
$
|
172,796
|
$
|
161,441
|
|||||||||||
Commercial mortgage
|
148,473
|
169,967
|
166,218
|
145,535
|
120,107
|
||||||||||||||||
Commercial and Industrial
|
122,547
|
130,917
|
143,669
|
113,996
|
114,833
|
||||||||||||||||
Construction
|
29,354
|
30,111
|
38,830
|
50,387
|
58,866
|
||||||||||||||||
Consumer and Finance leases
|
42,815
|
43,496
|
40,510
|
39,061
|
40,302
|
||||||||||||||||
Total non-performing loans held for investment
|
523,896
|
559,516
|
564,631
|
521,775
|
495,549
|
||||||||||||||||
OREO
|
124,003
|
112,803
|
121,842
|
138,622
|
160,193
|
||||||||||||||||
Other repossessed property
|
14,229
|
17,467
|
16,114
|
15,587
|
14,865
|
||||||||||||||||
Total non-performing assets, excluding loans held for sale
|
$
|
662,128
|
$
|
689,786
|
$
|
702,587
|
$
|
675,984
|
$
|
670,607
|
|||||||||||
Non-performing loans held for sale
|
54,641
|
54,641
|
54,755
|
54,755
|
54,801
|
||||||||||||||||
Total non-performing assets, including loans held for sale (1)
|
$
|
716,769
|
$
|
744,427
|
$
|
757,342
|
$
|
730,739
|
$
|
725,408
|
|||||||||||
Past-due loans 90 days and still accruing (2)
|
$
|
162,887
|
$
|
143,535
|
$
|
143,916
|
$
|
118,049
|
$
|
120,082
|
|||||||||||
Non-performing loans held for investment to total loans held for investment
|
5.66
|
%
|
6.01
|
%
|
5.96
|
%
|
5.45
|
%
|
5.14
|
%
|
|||||||||||
Non-performing loans to total loans
|
6.19
|
%
|
6.54
|
%
|
6.49
|
%
|
5.98
|
%
|
5.67
|
%
|
|||||||||||
Non-performing assets, excluding non-performing loans held for sale,
|
|||||||||||||||||||||
to total assets, excluding non-performing loans held for sale
|
5.35
|
%
|
5.48
|
%
|
5.63
|
%
|
5.30
|
%
|
5.32
|
%
|
|||||||||||
Non-performing assets to total assets
|
5.77
|
%
|
5.89
|
%
|
6.05
|
%
|
5.70
|
%
|
5.73
|
%
|
|||||||||||
(1)
|
Purchased credit impaired loans of $102.6 million accounted for under ASC 310-30 as of December 31, 2014, primarily mortgage loans acquired from Doral in the second quarter of 2014, are excluded and not considered non-performing due to the application of the accretion method, under which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analysis.
|
||||||||||||||||||||
(2)
|
Amount includes purchased credit impaired loans with individual delinquencies over 90 days and still accruing with a carrying value as of December 31, 2014 of approximately $15.7 million, primarily related to loans acquired from Doral.
|
||||||||||||||||||||
●
|
Total non-performing assets decreased by $27.7 million to $716.8 million as of December 31, 2014, compared to $744.4 million as of September 30, 2014. Total non-performing loans, including non-performing loans held for sale, decreased by $35.6 million, or 5%, from the third quarter of 2014. The decrease in non-performing assets was primarily attributable to cash collections on non-performing commercial and construction loans, charge-offs, the restoration to accrual status of loans brought current (including a $4.3 million commercial and industrial loan) and residential mortgage loans modified in trouble debt restructurings (“TDRs”) after a sustained performance period. The decrease in non-performing loans also includes the impact of foreclosures completed in the quarter that were transferred to the OREO inventory, including the collateral underlying a $21.1 million commercial mortgage loan.
|
●
|
Inflows to non-performing loans held for investment were $64.2 million, a decrease of $16.9 million, or 21%, compared to inflows of $81.1 million in the third quarter of 2014. This decrease was primarily reflected in the commercial and industrial loan portfolio that showed inflows of $5.9 million in the fourth quarter of 2014, an $8.0 million decrease, compared to inflows of $13.9 million in the third quarter of 2014 and inflows of non-performing residential mortgage loans of $27.5 million in the fourth quarter of 2014, a decline of $8.1 million, compared to inflows of $35.6 million in the third quarter of 2014.
|
●
|
Adversely classified commercial and construction loans held for investment decreased by $13.8 million to $557.6 million, or 2%, from the third quarter of 2014.
|
●
|
The OREO balance increased by $11.2 million, driven by additions of $29.3 million, including the aforementioned foreclosure of the underlying collateral of a $21.1 million commercial mortgage loan, partially offset by sales of $14.9 million and adjustments to value of $3.2 million.
|
●
|
Total TDRs held for investment were $694.5 million at December 31, 2014, down $6.7 million, or 1%, from September 30, 2014. Approximately $494.6 million of total TDRs held for investment were in accrual status as of December 31, 2014.
|
Quarter Ended
|
||||||||||||||||||||||
(Dollars in thousands)
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
|||||||||||||||||
2014
|
2014
|
2014
|
2014
|
2013
|
||||||||||||||||||
Allowance for loan and lease losses, beginning of period
|
$
|
225,434
|
$
|
241,177
|
$
|
266,778
|
$
|
285,858
|
$
|
289,379
|
||||||||||||
Provision for loan and lease losses
|
23,872
|
26,999
|
26,744
|
(1
|
)
|
31,915
|
22,969
|
|||||||||||||||
Net (charge-offs) recoveries of loans:
|
||||||||||||||||||||||
Residential mortgage
|
(6,522
|
)
|
(5,734
|
)
|
(4,687
|
)
|
(6,353
|
)
|
(4,544
|
)
|
||||||||||||
Commercial mortgage
|
(1,383
|
)
|
1,116
|
(9,126
|
)
|
(5,775
|
)
|
2,605
|
||||||||||||||
Commercial and Industrial
|
(992
|
)
|
(16,431
|
)
|
(19,036
|
)
|
(2
|
)
|
(21,796
|
)
|
(9,146
|
)
|
||||||||||
Construction
|
680
|
(3,205
|
)
|
(2,606
|
)
|
(353
|
)
|
(435
|
)
|
|||||||||||||
Consumer and finance leases
|
(18,694
|
)
|
(18,488
|
)
|
(16,890
|
)
|
(16,718
|
)
|
(14,970
|
)
|
||||||||||||
Net charge-offs
|
(26,911
|
)
|
(42,742
|
)
|
(52,345
|
)
|
(2
|
)
|
(50,995
|
)
|
(26,490
|
)
|
||||||||||
Allowance for loan and lease losses, end of period
|
$
|
222,395
|
$
|
225,434
|
$
|
241,177
|
$
|
266,778
|
$
|
285,858
|
||||||||||||
Allowance for loan and lease losses to period end total loans held for investment
|
2.40
|
%
|
2.42
|
%
|
2.55
|
%
|
2.79
|
%
|
2.97
|
%
|
||||||||||||
Net charge-offs (annualized) to average loans outstanding during the period
|
1.13
|
%
|
1.80
|
%
|
2.19
|
%
|
2.11
|
%
|
1.10
|
%
|
||||||||||||
Net charge-offs (annualized), excluding charge-offs of $6.9 million related to the acquisition of mortgage loans from Doral, to average loans outstanding during the period
|
1.13
|
%
|
1.80
|
%
|
1.90
|
%
|
2.11
|
%
|
1.10
|
%
|
||||||||||||
Provision for loan and lease losses to net charge-offs during the period
|
0.89x
|
0.63x
|
0.51x
|
0.63x
|
0.87x
|
|||||||||||||||||
Provision for loan and lease losses to net charge-offs during the period, excluding impact of the acquisition of mortgage loans from Doral
|
0.89x
|
0.63x
|
0.56x
|
0.63x
|
0.87x
|
|||||||||||||||||
(1) Includes a provision of $1.4 million associated with the acquisition of mortgage loans from Doral.
|
||||||||||||||||||||||
(2) Includes net charge-offs totaling $6.9 million associated with the acquisition of mortgage loans from Doral.
|
||||||||||||||||||||||
●
|
The ratio of the allowance for loan and lease losses to total loans held for investment was 2.40% as of December 31, 2014, compared to 2.42% as of September 30, 2014. The slight decrease in the ratio was primarily due to reserve releases related to improvement in the risk classification of certain commercial and industrial loans, and lower reserve requirements on residential mortgage loans evaluated for impairment purposes in the United States. The ratio of the allowance to non-performing loans held for investment was 42.45% as of December 31, 2014 compared to 40.29% as of September 30, 2014.
|
(Dollars in thousands)
|
Residential
Mortgage Loans
|
Commercial (including
Commercial Mortgage,
C&I, and Construction
loans)
|
Consumer and
Finance Leases
|
Total
|
||||||||||||||
As of December 31, 2014
|
||||||||||||||||||
Impaired loans:
|
||||||||||||||||||
Principal balance of loans, net of charge-offs
|
$
|
424,244
|
$
|
486,576
|
$
|
34,587
|
$
|
945,407
|
||||||||||
Allowance for loan and lease losses
|
10,854
|
38,180
|
6,171
|
55,205
|
||||||||||||||
Allowance for loan and lease losses to principal balance
|
2.56
|
%
|
7.85
|
%
|
17.84
|
%
|
5.84
|
%
|
||||||||||
PCI loans:
|
||||||||||||||||||
Carrying value of PCI loans
|
98,494
|
3,393
|
717
|
102,604
|
||||||||||||||
Allowance for PCI loans
|
-
|
-
|
-
|
-
|
||||||||||||||
Allowance for PCI loans to carrying value
|
-
|
-
|
-
|
-
|
||||||||||||||
Loans with general allowance:
|
||||||||||||||||||
Principal balance of loans
|
2,488,449
|
3,778,735
|
1,947,241
|
8,214,425
|
||||||||||||||
Allowance for loan and lease losses
|
16,447
|
89,257
|
61,486
|
167,190
|
||||||||||||||
Allowance for loan and lease losses to principal balance
|
0.66
|
%
|
2.36
|
%
|
3.16
|
%
|
2.04
|
%
|
||||||||||
Total loans held for investment:
|
||||||||||||||||||
Principal balance of loans
|
$
|
3,011,187
|
$
|
4,268,704
|
$
|
1,982,545
|
$
|
9,262,436
|
||||||||||
Allowance for loan and lease losses
|
27,301
|
127,437
|
67,657
|
222,395
|
||||||||||||||
Allowance for loan and lease losses to principal balance
|
0.91
|
%
|
2.99
|
%
|
3.41
|
%
|
2.40
|
%
|
||||||||||
As of September 30, 2014
|
||||||||||||||||||
Impaired loans:
|
||||||||||||||||||
Principal balance of loans, net of charge-offs
|
$
|
421,823
|
$
|
519,186
|
$
|
32,005
|
$
|
973,014
|
||||||||||
Allowance for loan and lease losses
|
11,658
|
38,331
|
5,295
|
55,284
|
||||||||||||||
Allowance for loan and lease losses to principal balance
|
2.76
|
%
|
7.38
|
%
|
16.54
|
%
|
5.68
|
%
|
||||||||||
PCI loans:
|
||||||||||||||||||
Carrying value of PCI loans
|
99,535
|
3,418
|
1,360
|
104,313
|
||||||||||||||
Allowance for PCI loans
|
-
|
-
|
-
|
-
|
||||||||||||||
Allowance for PCI loans to carrying value
|
-
|
-
|
-
|
-
|
||||||||||||||
Loans with general allowance:
|
||||||||||||||||||
Principal balance of loans
|
2,298,290
|
3,946,563
|
1,993,222
|
8,238,075
|
||||||||||||||
Allowance for loan and lease losses
|
18,248
|
91,995
|
59,907
|
170,150
|
||||||||||||||
Allowance for loan and lease losses to principal balance
|
0.79
|
%
|
2.33
|
%
|
3.01
|
%
|
2.07
|
%
|
||||||||||
Total loans held for investment:
|
||||||||||||||||||
Principal balance of loans
|
$
|
2,819,648
|
$
|
4,469,167
|
$
|
2,026,587
|
$
|
9,315,402
|
||||||||||
Allowance for loan and lease losses
|
29,906
|
130,326
|
65,202
|
225,434
|
||||||||||||||
Allowance for loan and lease losses to principal balance
|
1.06
|
%
|
2.92
|
%
|
3.22
|
%
|
2.42
|
%
|
||||||||||
Quarter Ended
|
|||||||||||||||||
December 31,
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
|||||||||||||
2014
|
2014
|
2014
|
2014
|
2013
|
|||||||||||||
Residential mortgage
|
0.87
|
%
|
0.82
|
%
|
0.71
|
%
|
1.00
|
%
|
0.72
|
%
|
|||||||
Commercial mortgage
|
0.31
|
%
|
-0.24
|
%
|
2.00
|
%
|
1.27
|
%
|
-0.57
|
%
|
|||||||
Commercial and Industrial
|
0.16
|
%
|
2.54
|
%
|
2.69
|
%
|
(1
|
)
|
2.90
|
%
|
1.21
|
%
|
|||||
Construction
|
-1.48
|
%
|
6.57
|
%
|
5.25
|
%
|
0.65
|
%
|
0.81
|
%
|
|||||||
Consumer and finance leases
|
3.73
|
%
|
3.62
|
%
|
3.27
|
%
|
3.23
|
%
|
2.91
|
%
|
|||||||
Total loans
|
1.13
|
%
|
1.80
|
%
|
2.19
|
%
|
(2
|
)
|
2.11
|
%
|
1.10
|
%
|
|||||
(1) Includes net charge-offs totaling $6.9 million associated with the acquisition of mortgage loans from Doral. The ratio of commercial and industrial net charge-offs to average loans, excluding charge-offs associated with the acquisition of mortgage loans from Doral, was 1.81%.
|
|||||||||||||||||
(2) Includes net charge-offs totaling $6.9 million associated with the acquisition of mortgage loans from Doral. The ratio of total net charge-offs to average loans, excluding charge-offs associated with the acquisition of mortgage loans from Doral, was 1.90%.
|
|||||||||||||||||
●
|
Net charge-offs for the fourth quarter of 2014 were $26.9 million, or an annualized 1.13%, compared to $42.7 million, or an annualized 1.80% in the third quarter of 2014. The decrease was primarily reflected in the commercial and industrial loan portfolio, as the previous quarter included $16.0 million of charge-offs related to two collateral dependent relationships in Puerto Rico. Recoveries of amounts previously charged-off decreased to $6.7 million in the fourth quarter of 2014 from $11.2 million in the third quarter of 2014.
|
●
|
A $173.9 million decrease in cash and cash equivalents, tied to the purchase of residential mortgage loans from Doral Bank and planned pay downs of maturing brokered CDs.
|
●
|
A $200.5 million decrease in commercial and construction loans and a $44.0 million decrease in consumer loans, which more than offset the increase of $191.5 million in residential mortgage loans held for investment. Most of the decrease in the commercial and construction loan portfolios was in Puerto Rico, including: (i) an aggregate decrease of approximately $98.7 million related to the payoff of two commercial loans in the fourth quarter, and (ii) the sale of loan participations and significant principal payments that reduced the risk exposure on another three commercial loans from approximately $247.6 million as of September 30, 2014 to $186.6 million as of December 31, 2014, a decrease of approximately $61 million.
|
●
|
A $176.7 million decrease in brokered CDs.
|
●
|
A $68.0 million decrease in government deposits, mainly related to transactional accounts in both our Puerto Rico and Virgin Islands regions.
|
●
|
A $25.5 million increase in non-brokered deposits, excluding government deposits, mainly demand deposits in all of our regions.
|
●
|
The net income of $26.3 million reported in the fourth quarter.
|
●
|
An increase of $16.0 million in other comprehensive income mainly attributable to an increase in the fair value of U.S. agency MBS and debt securities of approximately $18.5 million, partially offset by a $3.2 million decrease in the fair value of Puerto Rico government obligations held by the Corporation as part of its available-for-sale investment securities portfolio. See Exposure to Puerto Rico Government section below for additional information.
|
(In thousands, except ratios and per share information)
|
|||||||||||||||||||||
December 31,
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
|||||||||||||||||
2014
|
2014
|
2014
|
2014
|
2013
|
|||||||||||||||||
Tangible Equity:
|
|||||||||||||||||||||
Total equity - GAAP
|
$
|
1,367,241
|
$
|
1,324,157
|
$
|
1,306,001
|
$
|
1,255,898
|
$
|
1,215,858
|
|||||||||||
Preferred equity
|
(36,104
|
)
|
(36,104
|
)
|
(36,104
|
)
|
(56,810
|
)
|
(63,047
|
)
|
|||||||||||
Goodwill
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
|||||||||||
Purchased credit card relationship
|
(16,389
|
)
|
(17,235
|
)
|
(18,080
|
)
|
(18,942
|
)
|
(19,787
|
)
|
|||||||||||
Core deposit intangible
|
(5,420
|
)
|
(5,810
|
)
|
(6,200
|
)
|
(6,591
|
)
|
(6,981
|
)
|
|||||||||||
Tangible common equity
|
$
|
1,281,230
|
$
|
1,236,910
|
$
|
1,217,519
|
$
|
1,145,457
|
$
|
1,097,945
|
|||||||||||
Tangible Assets:
|
|||||||||||||||||||||
Total assets - GAAP
|
$
|
12,424,396
|
$
|
12,643,280
|
$
|
12,523,251
|
$
|
12,819,428
|
$
|
12,656,925
|
|||||||||||
Goodwill
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
|||||||||||
Purchased credit card relationship
|
(16,389
|
)
|
(17,235
|
)
|
(18,080
|
)
|
(18,942
|
)
|
(19,787
|
)
|
|||||||||||
Core deposit intangible
|
(5,420
|
)
|
(5,810
|
)
|
(6,200
|
)
|
(6,591
|
)
|
(6,981
|
)
|
|||||||||||
Tangible assets
|
$
|
12,374,489
|
$
|
12,592,137
|
$
|
12,470,873
|
$
|
12,765,797
|
$
|
12,602,059
|
|||||||||||
Common shares outstanding
|
212,985
|
212,978
|
212,760
|
208,968
|
207,069
|
||||||||||||||||
Tangible common equity ratio
|
10.35
|
%
|
9.82
|
%
|
9.76
|
%
|
8.97
|
%
|
8.71
|
%
|
|||||||||||
Tangible book value per common share
|
$
|
6.02
|
$
|
5.81
|
$
|
5.72
|
$
|
5.48
|
$
|
5.30
|
|||||||||||
(Dollars in thousands)
|
As of
|
||||||||||||||||||||
December 31,
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
|||||||||||||||||
2014
|
2014
|
2014
|
2014
|
2013
|
|||||||||||||||||
Tier 1 Common Equity:
|
|||||||||||||||||||||
Total equity - GAAP
|
$
|
1,367,241
|
$
|
1,324,157
|
$
|
1,306,001
|
$
|
1,255,898
|
$
|
1,215,858
|
|||||||||||
Qualifying preferred stock
|
(36,104
|
)
|
(36,104
|
)
|
(36,104
|
)
|
(56,810
|
)
|
(63,047
|
)
|
|||||||||||
Unrealized loss on available-for-sale securities (1)
|
18,351
|
34,301
|
28,381
|
56,180
|
78,734
|
||||||||||||||||
Disallowed deferred tax asset (2)
|
-
|
-
|
-
|
(25
|
)
|
-
|
|||||||||||||||
Goodwill
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
(28,098
|
)
|
|||||||||||
Core deposit intangible
|
(5,420
|
)
|
(5,810
|
)
|
(6,200
|
)
|
(6,591
|
)
|
(6,981
|
)
|
|||||||||||
Other disallowed assets
|
(422
|
)
|
(23
|
)
|
(23
|
)
|
(23
|
)
|
(23
|
)
|
|||||||||||
Tier 1 common equity
|
$
|
1,315,548
|
$
|
1,288,423
|
$
|
1,263,957
|
$
|
1,220,531
|
$
|
1,196,443
|
|||||||||||
Total risk-weighted assets
|
$
|
8,812,515
|
$
|
8,954,477
|
$
|
9,079,164
|
$
|
9,255,697
|
$
|
9,405,798
|
|||||||||||
Tier 1 common equity to risk-weighted assets ratio
|
14.93
|
%
|
14.39
|
%
|
13.92
|
%
|
13.19
|
%
|
12.72
|
%
|
|||||||||||
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 $11.2 million of the Corporation's deferred tax assets as of December 31, 2014 (September 30, 2014 - $11.3 million; June 30, 2014 - $9.9 million; March 31, 2014 - $9 million; December 31, 2013 - $7 million) was included without limitation in regulatory capital pursuant to the risk-based capital guidelines, while approximately $0 of such assets as of December 31, 2014 (September 30, 2014 - $0; June 30, 2014 - $0; March 31, 2014 - $25 thousand; December 31, 2013 - $0) exceeded the limitation imposed by these guidelines and, as "disallowed deferred tax assets," was deducted in calculating 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 $1.1 million of the Corporation's other net deferred tax liability as of December 31, 2014 (September 30, 2014 - $1.4 million deferred tax liability; June 30, 2014 - $1.2 million deferred tax liability; March 31, 2014 - $0.8 million deferred tax liability; December 31, 2013 - $0.3 million deferred tax asset) 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.
|
|||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||
2014 Fourth Quarter
|
As Reported
(GAAP)
|
Acquisition of
mortgage loans
from Doral related
expenses
|
Loss on sale of
investment
securities and
OTTI on debt
securities
|
Adjusted
(Non-GAAP)
|
||||||||||
Non-interest income
|
$
|
17,893
|
$
|
-
|
$
|
172
|
$
|
18,065
|
||||||
Non-interest expenses
|
$
|
94,782
|
$
|
-
|
$
|
-
|
$
|
94,782
|
||||||
(Dollars in thousands)
|
||||||||||||||
2014 Third Quarter
|
As Reported
(GAAP)
|
Acquisition of
mortgage loans
from Doral
related
expenses
|
OTTI on debt
securities
|
Adjusted
(Non-GAAP)
|
||||||||||
Non-interest income
|
$
|
16,174
|
$
|
-
|
$
|
245
|
$
|
16,419
|
||||||
Non-interest expenses
|
$
|
93,604
|
$
|
(659
|
)
|
$
|
-
|
$
|
92,945
|
|||||
FIRST BANCORP
|
||||||||||||
Condensed Consolidated Statements of Financial Condition
|
||||||||||||
As of
|
||||||||||||
December 31,
|
September 30,
|
December 31,
|
||||||||||
(In thousands, except for share information)
|
2014
|
2014
|
2013
|
|||||||||
ASSETS
|
||||||||||||
Cash and due from banks
|
$
|
779,147
|
$
|
953,038
|
$
|
454,302
|
||||||
Money market investments:
|
||||||||||||
Time deposits with other financial institutions
|
300
|
300
|
300
|
|||||||||
Other short-term investments
|
16,661
|
16,657
|
201,069
|
|||||||||
Total money market investments
|
16,961
|
16,957
|
201,369
|
|||||||||
Investment securities available for sale, at fair value
|
1,965,666
|
1,977,137
|
1,978,282
|
|||||||||
Other equity securities
|
25,752
|
25,752
|
28,691
|
|||||||||
Total investment securities
|
1,991,418
|
2,002,889
|
2,006,973
|
|||||||||
Investment in unconsolidated entity
|
-
|
-
|
7,279
|
|||||||||
Loans, net of allowance for loan and lease losses of $222,395 (September 30, 2014 - $225,434; December 31, 2013 - $285,858)
|
9,040,041
|
9,089,968
|
9,350,312
|
|||||||||
Loans held for sale, at lower of cost or market
|
76,956
|
80,014
|
75,969
|
|||||||||
Total loans, net
|
9,116,997
|
9,169,982
|
9,426,281
|
|||||||||
Premises and equipment, net
|
166,926
|
167,916
|
166,946
|
|||||||||
Other real estate owned
|
124,003
|
112,803
|
160,193
|
|||||||||
Accrued interest receivable on loans and investments
|
50,796
|
48,516
|
54,012
|
|||||||||
Other assets
|
178,148
|
171,179
|
179,570
|
|||||||||
Total assets
|
$
|
12,424,396
|
$
|
12,643,280
|
$
|
12,656,925
|
||||||
LIABILITIES
|
||||||||||||
Deposits:
|
||||||||||||
Non-interest-bearing deposits
|
$
|
900,616
|
$
|
862,422
|
$
|
851,212
|
||||||
Interest-bearing deposits
|
8,583,329
|
8,840,752
|
9,028,712
|
|||||||||
Total deposits
|
9,483,945
|
9,703,174
|
9,879,924
|
|||||||||
Securities sold under agreements to repurchase
|
900,000
|
900,000
|
900,000
|
|||||||||
Advances from the Federal Home Loan Bank (FHLB)
|
325,000
|
325,000
|
300,000
|
|||||||||
Other borrowings
|
231,959
|
231,959
|
231,959
|
|||||||||
Accounts payable and other liabilities
|
116,251
|
158,990
|
129,184
|
|||||||||
Total liabilities
|
11,057,155
|
11,319,123
|
11,441,067
|
|||||||||
STOCKHOLDERS' EQUITY
|
||||||||||||
Preferred Stock, authorized 50,000,000 shares: issued 22,828,174 shares; outstanding 1,444,146 shares (September 30, 2014 - 1,444,146 shares outstanding; December 31, 2013 - 2,521,872 shares outstanding); aggregate liquidation value of $36,104 (September 30, 2014 - $36,104; December 31, 2013 - $63,047)
|
36,104
|
36,104
|
63,047
|
|||||||||
Common stock, $0.10 par value, authorized 2,000,000,000 shares; issued, 213,724,749 shares (September 30, 2014 - 213,642,311 shares issued; December 31, 2013 - 207,635,157 shares issued)
|
21,372
|
21,364
|
20,764
|
|||||||||
Less: Treasury stock (at par value)
|
(74
|
)
|
(66
|
)
|
(57
|
)
|
||||||
Common stock outstanding, 212,984,700 shares outstanding (September 30, 2014 - 212,977,588 shares outstanding; December 31, 2013 - 207,068,978 shares outstanding)
|
21,298
|
21,298
|
20,707
|
|||||||||
Additional paid-in capital
|
916,067
|
915,231
|
888,161
|
|||||||||
Retained earnings
|
412,123
|
385,847
|
322,679
|
|||||||||
Accumulated other comprehensive loss
|
(18,351
|
)
|
(34,323
|
)
|
(78,736
|
)
|
||||||
Total stockholders' equity
|
1,367,241
|
1,324,157
|
1,215,858
|
|||||||||
Total liabilities and stockholders' equity
|
$
|
12,424,396
|
$
|
12,643,280
|
$
|
12,656,925
|
||||||
FIRST BANCORP
|
||||||||||||||||||||
Condensed Consolidated Statements of Income (Loss)
|
||||||||||||||||||||
Quarter Ended
|
Year Ended
|
|||||||||||||||||||
December 31,
|
September 30,
|
December 31,
|
December 31,
|
December 31,
|
||||||||||||||||
(In thousands, except per share information)
|
2014
|
2014
|
2013
|
2014
|
2013
|
|||||||||||||||
Net interest income:
|
||||||||||||||||||||
Interest income
|
$
|
158,293
|
$
|
156,662
|
$
|
162,690
|
$
|
633,949
|
$
|
645,788
|
||||||||||
Interest expense
|
29,141
|
28,968
|
30,031
|
115,876
|
130,843
|
|||||||||||||||
Net interest income
|
129,152
|
127,694
|
132,659
|
518,073
|
514,945
|
|||||||||||||||
Provision for loan and lease losses
|
23,872
|
26,999
|
22,969
|
109,530
|
243,751
|
|||||||||||||||
Net interest income after provision for loan and lease losses
|
105,280
|
100,695
|
109,690
|
408,543
|
271,194
|
|||||||||||||||
Non-interest income (loss):
|
||||||||||||||||||||
Service charges on deposit accounts
|
4,155
|
4,205
|
4,114
|
16,709
|
16,974
|
|||||||||||||||
Mortgage banking activities
|
4,472
|
3,809
|
3,906
|
14,685
|
16,830
|
|||||||||||||||
Net (loss) gain on investments and impairments
|
(172
|
)
|
(245
|
)
|
-
|
(126
|
)
|
(159
|
)
|
|||||||||||
Equity in (loss) earnings of unconsolidated entity
|
-
|
-
|
(5,893
|
)
|
(7,280
|
)
|
(16,691
|
)
|
||||||||||||
Impairment of collateral pledged to Lehman
|
-
|
-
|
-
|
-
|
(66,574
|
)
|
||||||||||||||
Other non-interest income
|
9,438
|
8,405
|
10,358
|
37,360
|
34,131
|
|||||||||||||||
Total non-interest income (loss)
|
17,893
|
16,174
|
12,485
|
61,348
|
(15,489
|
)
|
||||||||||||||
Non-interest expenses:
|
||||||||||||||||||||
Employees' compensation and benefits
|
33,854
|
33,877
|
31,428
|
135,422
|
130,815
|
|||||||||||||||
Occupancy and equipment
|
14,763
|
14,727
|
15,684
|
58,290
|
60,746
|
|||||||||||||||
Business promotion
|
4,491
|
3,925
|
5,251
|
16,531
|
15,977
|
|||||||||||||||
Professional fees
|
13,439
|
12,054
|
11,619
|
47,940
|
49,444
|
|||||||||||||||
Taxes, other than income taxes
|
4,482
|
4,528
|
4,100
|
18,089
|
18,109
|
|||||||||||||||
Insurance and supervisory fees
|
8,927
|
9,493
|
11,452
|
40,194
|
48,470
|
|||||||||||||||
Net loss on other real estate owned operations
|
3,655
|
4,326
|
13,321
|
20,596
|
42,512
|
|||||||||||||||
Other non-interest expenses
|
11,171
|
10,674
|
13,686
|
42,254
|
48,955
|
|||||||||||||||
Total non-interest expenses
|
94,782
|
93,604
|
106,541
|
379,316
|
415,028
|
|||||||||||||||
Income (loss) before income taxes
|
28,391
|
23,265
|
15,634
|
90,575
|
(159,323
|
)
|
||||||||||||||
Income tax expense
|
(2,115
|
)
|
(64
|
)
|
(845
|
)
|
(2,790
|
)
|
(5,164
|
)
|
||||||||||
Net income (loss)
|
$
|
26,276
|
$
|
23,201
|
$
|
14,789
|
$
|
87,785
|
$
|
(164,487
|
)
|
|||||||||
Net income (loss) attributable to common stockholders
|
$
|
26,276
|
$
|
23,201
|
$
|
14,789
|
$
|
89,444
|
$
|
(164,487
|
)
|
|||||||||
Earnings (loss) per common share:
|
||||||||||||||||||||
Basic
|
$
|
0.12
|
$
|
0.11
|
$
|
0.07
|
$
|
0.43
|
$
|
(0.80
|
)
|
|||||||||
Diluted
|
$
|
0.12
|
$
|
0.11
|
$
|
0.07
|
$
|
0.42
|
$
|
(0.80
|
)
|
|||||||||
EXHIBIT A
|
||||||||||||||||||||||||
Table 1 – Selected Financial Data
|
||||||||||||||||||||||||
(In thousands, except for per share and financial ratios data)
|
Quarter Ended
|
Year Ended
|
||||||||||||||||||||||
December 31,
|
September 30,
|
December 31,
|
December 31,
|
December 31,
|
||||||||||||||||||||
2014
|
2014
|
2013
|
2014
|
2013
|
||||||||||||||||||||
Condensed Income Statements:
|
||||||||||||||||||||||||
Total interest income
|
$
|
158,293
|
$
|
156,662
|
$
|
162,690
|
$
|
633,949
|
$
|
645,788
|
||||||||||||||
Total interest expense
|
29,141
|
28,968
|
30,031
|
115,876
|
130,843
|
|||||||||||||||||||
Net interest income
|
129,152
|
127,694
|
132,659
|
518,073
|
514,945
|
|||||||||||||||||||
Provision for loan and lease losses
|
23,872
|
26,999
|
22,969
|
109,530
|
243,751
|
|||||||||||||||||||
Non-interest income (loss)
|
17,893
|
16,174
|
12,485
|
61,348
|
(15,489
|
)
|
||||||||||||||||||
Non-interest expenses
|
94,782
|
93,604
|
106,541
|
379,316
|
415,028
|
|||||||||||||||||||
Income (loss) before income taxes
|
28,391
|
23,265
|
15,634
|
90,575
|
(159,323
|
)
|
||||||||||||||||||
Income tax expense
|
(2,115
|
)
|
(64
|
)
|
(845
|
)
|
(2,790
|
)
|
(5,164
|
)
|
||||||||||||||
Net income (loss)
|
26,276
|
23,201
|
14,789
|
87,785
|
(164,487
|
)
|
||||||||||||||||||
Net income (loss) attributable to common stockholders
|
26,276
|
23,201
|
14,789
|
89,444
|
(164,487
|
)
|
||||||||||||||||||
Per Common Share Results:
|
||||||||||||||||||||||||
Net earnings (loss) per share basic
|
$
|
0.12
|
$
|
0.11
|
$
|
0.07
|
$
|
0.43
|
$
|
(0.80
|
)
|
|||||||||||||
Net earnings (loss) per share diluted
|
$
|
0.12
|
$
|
0.11
|
$
|
0.07
|
$
|
0.42
|
$
|
(0.80
|
)
|
|||||||||||||
Cash dividends declared
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||||
Average shares outstanding
|
210,539
|
210,466
|
205,634
|
208,752
|
205,542
|
|||||||||||||||||||
Average shares outstanding diluted
|
212,713
|
212,359
|
207,235
|
210,540
|
205,542
|
|||||||||||||||||||
Book value per common share
|
$
|
6.25
|
$
|
6.05
|
$
|
5.57
|
$
|
6.25
|
$
|
5.57
|
||||||||||||||
Tangible book value per common share (1)
|
$
|
6.02
|
$
|
5.81
|
$
|
5.30
|
$
|
6.02
|
$
|
5.30
|
||||||||||||||
Selected Financial Ratios (In Percent):
|
||||||||||||||||||||||||
Profitability:
|
||||||||||||||||||||||||
Return on Average Assets
|
0.83
|
0.73
|
0.46
|
0.69
|
(1.28
|
)
|
||||||||||||||||||
Interest Rate Spread (2)
|
4.11
|
4.07
|
4.22
|
4.16
|
4.01
|
|||||||||||||||||||
Net Interest Margin (2)
|
4.30
|
4.25
|
4.40
|
4.34
|
4.21
|
|||||||||||||||||||
Return on Average Total Equity
|
7.75
|
7.01
|
4.75
|
6.77
|
(12.39
|
)
|
||||||||||||||||||
Return on Average Common Equity
|
7.97
|
7.21
|
5.01
|
7.03
|
(13.01
|
)
|
||||||||||||||||||
Average Total Equity to Average Total Assets
|
10.68
|
10.44
|
9.76
|
10.25
|
10.36
|
|||||||||||||||||||
Total capital
|
19.16
|
18.57
|
17.06
|
19.16
|
17.06
|
|||||||||||||||||||
Tier 1 capital
|
17.89
|
17.30
|
15.78
|
17.89
|
15.78
|
|||||||||||||||||||
Leverage
|
12.54
|
12.34
|
11.71
|
12.54
|
11.71
|
|||||||||||||||||||
Tangible common equity ratio (1)
|
10.35
|
9.82
|
8.71
|
10.35
|
8.71
|
|||||||||||||||||||
Tier 1 common equity to risk-weight assets (1)
|
14.93
|
14.39
|
12.72
|
14.93
|
12.72
|
|||||||||||||||||||
Dividend payout ratio
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||
Efficiency ratio (3)
|
64.46
|
65.06
|
73.40
|
65.46
|
83.10
|
|||||||||||||||||||
Asset Quality:
|
||||||||||||||||||||||||
Allowance for loan and lease losses to loans held for investment
|
2.40
|
2.42
|
2.97
|
2.40
|
2.97
|
|||||||||||||||||||
Net charge-offs (annualized) to average loans
|
1.13
|
1.80
|
1.10
|
1.81
|
(4
|
)
|
4.01
|
(6
|
)
|
|||||||||||||||
Provision for loan and lease losses to net charge-offs
|
88.71
|
63.17
|
86.71
|
63.31
|
(5
|
)
|
61.97
|
(7
|
)
|
|||||||||||||||
Non-performing assets to total assets
|
5.77
|
5.89
|
5.73
|
5.77
|
5.73
|
|||||||||||||||||||
Non-performing loans held for investment to total loans held for investment
|
5.66
|
6.01
|
5.14
|
5.66
|
5.14
|
|||||||||||||||||||
Allowance to total non-performing loans held for investment
|
42.45
|
40.29
|
57.69
|
42.45
|
57.69
|
|||||||||||||||||||
Allowance to total non-performing loans held for investment
|
||||||||||||||||||||||||
excluding residential real estate loans
|
64.80
|
60.20
|
85.56
|
64.80
|
85.56
|
|||||||||||||||||||
Other Information:
|
||||||||||||||||||||||||
Common Stock Price: End of period
|
$
|
5.87
|
$
|
4.75
|
$
|
6.19
|
$
|
5.87
|
$
|
6.19
|
||||||||||||||
1- Non-GAAP measure. See pages 13-14 for GAAP to Non-GAAP reconciliations.
|
||||||||||||||||||||||||
2- On a tax-equivalent basis and excluding changes in the fair value of derivative instruments (Non-GAAP measure). See page 4 for GAAP to Non-GAAP reconciliations and refer to discussions in Tables 2 and 3 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.
|
||||||||||||||||||||||||
4- The net charge-offs to average loans ratio, excluding the impact associated with the acquisition of mortgage loans from Doral, was 1.74% for the year ended December 31, 2014.
|
||||||||||||||||||||||||
5- The provision for loan and lease losses to net charge-offs ratio, excluding the impact associated with the acquisition of mortgage loans from Doral, was 65.09% for the year ended December 31, 2014.
|
||||||||||||||||||||||||
6- The net charge-offs to average loans ratio, excluding the impact associated with the bulk sales of assets and the transfer of loans to held for sale, was 1.68% for the year ended December 31, 2013.
|
||||||||||||||||||||||||
7- The provision for loan and lease losses to net charge-offs ratio, excluding the impact associated with the bulk sales of assets and the transfer of loans to held for sale, was 69.47% for the year ended December 31, 2013.
|
||||||||||||||||||||||||
Table 2 – Quarterly Statement of Average Interest-Earning Assets and Average Interest-Bearing Liabilities
|
|||||||||||||||||||||||||||
(On a Tax-Equivalent Basis and Excluding Valuations)
|
|||||||||||||||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||||||||||
Average volume
|
Interest income (1) / expense
|
Average rate (1)
|
|||||||||||||||||||||||||
December 31,
|
September 30,
|
December 31,
|
December 31,
|
September 30,
|
December 31,
|
December 31,
|
September 30,
|
December 31,
|
|||||||||||||||||||
Quarter ended
|
2014
|
2014
|
2013
|
2014
|
2014
|
2013
|
2014
|
2014
|
2013
|
||||||||||||||||||
Interest-earning assets:
|
|||||||||||||||||||||||||||
Money market & other short-term investments
|
$
|
753,234
|
$
|
744,738
|
$
|
609,398
|
$
|
465
|
$
|
473
|
$
|
433
|
0.24
|
%
|
0.25
|
%
|
0.28
|
%
|
|||||||||
Government obligations (2)
|
382,460
|
339,261
|
342,769
|
2,143
|
1,956
|
2,045
|
2.22
|
%
|
2.29
|
%
|
2.37
|
%
|
|||||||||||||||
Mortgage-backed securities
|
1,602,910
|
1,657,816
|
1,737,331
|
12,023
|
11,985
|
16,908
|
2.98
|
%
|
2.87
|
%
|
3.86
|
%
|
|||||||||||||||
FHLB stock
|
25,467
|
26,788
|
28,466
|
272
|
283
|
311
|
4.24
|
%
|
4.19
|
%
|
4.33
|
%
|
|||||||||||||||
Equity securities
|
319
|
320
|
1,277
|
-
|
-
|
-
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
|||||||||||||||
Total investments (3)
|
2,764,390
|
2,768,923
|
2,719,241
|
14,903
|
14,697
|
19,697
|
2.14
|
%
|
2.11
|
%
|
2.87
|
%
|
|||||||||||||||
Residential mortgage loans
|
3,011,682
|
2,803,138
|
2,536,086
|
42,307
|
39,401
|
35,345
|
5.57
|
%
|
5.58
|
%
|
5.53
|
%
|
|||||||||||||||
Construction loans
|
183,882
|
195,108
|
214,528
|
1,688
|
1,910
|
1,690
|
3.64
|
%
|
3.88
|
%
|
3.13
|
%
|
|||||||||||||||
C&I and commercial mortgage loans
|
4,287,157
|
4,434,798
|
4,854,366
|
48,959
|
49,043
|
51,443
|
4.53
|
%
|
4.39
|
%
|
4.20
|
%
|
|||||||||||||||
Finance leases
|
234,613
|
237,374
|
243,659
|
4,648
|
4,707
|
5,195
|
7.86
|
%
|
7.87
|
%
|
8.46
|
%
|
|||||||||||||||
Consumer loans
|
1,771,093
|
1,806,158
|
1,816,374
|
49,491
|
50,481
|
54,087
|
11.09
|
%
|
11.09
|
%
|
11.81
|
%
|
|||||||||||||||
Total loans (4) (5)
|
9,488,427
|
9,476,576
|
9,665,013
|
147,093
|
145,542
|
147,760
|
6.15
|
%
|
6.09
|
%
|
6.07
|
%
|
|||||||||||||||
Total interest-earning assets
|
$
|
12,252,817
|
$
|
12,245,499
|
$
|
12,384,254
|
$
|
161,996
|
$
|
160,239
|
$
|
167,457
|
5.25
|
%
|
5.19
|
%
|
5.36
|
%
|
|||||||||
Interest-bearing liabilities:
|
|||||||||||||||||||||||||||
Brokered CDs
|
$
|
2,989,383
|
$
|
3,097,358
|
$
|
3,110,888
|
$
|
7,309
|
$
|
7,482
|
$
|
7,686
|
0.97
|
%
|
0.96
|
%
|
0.98
|
%
|
|||||||||
Other interest-bearing deposits
|
5,739,792
|
5,691,643
|
5,907,094
|
11,709
|
11,862
|
13,186
|
0.81
|
%
|
0.83
|
%
|
0.89
|
%
|
|||||||||||||||
Other borrowed funds
|
1,131,959
|
1,131,959
|
1,131,959
|
9,168
|
8,675
|
8,308
|
3.21
|
%
|
3.04
|
%
|
2.91
|
%
|
|||||||||||||||
FHLB advances
|
325,000
|
324,674
|
300,730
|
955
|
949
|
851
|
1.17
|
%
|
1.16
|
%
|
1.12
|
%
|
|||||||||||||||
Total interest-bearing liabilities
|
$
|
10,186,134
|
$
|
10,245,634
|
$
|
10,450,671
|
$
|
29,141
|
$
|
28,968
|
$
|
30,031
|
1.14
|
%
|
1.12
|
%
|
1.14
|
%
|
|||||||||
Net interest income
|
$
|
132,855
|
$
|
131,271
|
$
|
137,426
|
|||||||||||||||||||||
Interest rate spread
|
4.11
|
%
|
4.07
|
%
|
4.22
|
%
|
|||||||||||||||||||||
Net interest margin
|
4.30
|
%
|
4.25
|
%
|
4.40
|
%
|
|||||||||||||||||||||
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 of 39% 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 are excluded from interest income 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 on 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 $5.4 million, $3.1 million and $3.0 million for the quarters ended December 31, 2014, September 30, 2014, and December 31, 2013, respectively, of income from prepayment penalties and late fees related to the Corporation's loan portfolio.
|
|||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||
Average volume
|
Interest income (1) / expense
|
Average rate (1)
|
||||||||||||||||
December 31,
|
December 31,
|
December 31,
|
December 31,
|
December 31,
|
December 31,
|
|||||||||||||
Year Ended
|
2014
|
2013
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
Interest-earning assets:
|
||||||||||||||||||
Money market & other short-term investments
|
$
|
742,929
|
$
|
684,074
|
$
|
1,892
|
$
|
1,927
|
0.25
|
%
|
0.28
|
%
|
||||||
Government obligations (2)
|
350,175
|
338,571
|
8,258
|
7,892
|
2.36
|
%
|
2.33
|
%
|
||||||||||
Mortgage-backed securities
|
1,669,406
|
1,666,091
|
54,291
|
52,841
|
3.25
|
%
|
3.17
|
%
|
||||||||||
FHLB stock
|
27,155
|
30,941
|
1,169
|
1,359
|
4.30
|
%
|
4.39
|
%
|
||||||||||
Equity securities
|
320
|
1,330
|
-
|
-
|
0.00
|
%
|
0.00
|
%
|
||||||||||
Total investments (3)
|
2,789,985
|
2,721,007
|
65,610
|
64,019
|
2.35
|
%
|
2.35
|
%
|
||||||||||
Residential mortgage loans
|
2,751,366
|
2,681,753
|
153,373
|
148,033
|
5.57
|
%
|
5.52
|
%
|
||||||||||
Construction loans
|
198,450
|
272,917
|
7,304
|
8,722
|
3.68
|
%
|
3.20
|
%
|
||||||||||
C&I and commercial mortgage loans
|
4,549,732
|
4,804,608
|
199,787
|
196,814
|
4.39
|
%
|
4.10
|
%
|
||||||||||
Finance leases
|
240,268
|
240,479
|
19,530
|
20,591
|
8.13
|
%
|
8.56
|
%
|
||||||||||
Consumer loans
|
1,806,646
|
1,799,402
|
205,278
|
220,089
|
11.36
|
%
|
12.23
|
%
|
||||||||||
Total loans (4) (5)
|
9,546,462
|
9,799,159
|
585,272
|
594,249
|
6.13
|
%
|
6.06
|
%
|
||||||||||
Total interest-earning assets
|
$
|
12,336,447
|
$
|
12,520,166
|
$
|
650,882
|
$
|
658,268
|
5.28
|
%
|
5.26
|
%
|
||||||
Interest-bearing liabilities:
|
||||||||||||||||||
Brokered CDs
|
$
|
3,098,724
|
$
|
3,251,091
|
$
|
29,894
|
$
|
38,252
|
0.96
|
%
|
1.18
|
%
|
||||||
Other interest-bearing deposits
|
5,797,998
|
5,782,501
|
48,233
|
53,535
|
0.83
|
%
|
0.93
|
%
|
||||||||||
Other borrowed funds
|
1,131,959
|
1,131,959
|
34,188
|
33,025
|
3.02
|
%
|
2.92
|
%
|
||||||||||
FHLB advances
|
312,575
|
357,661
|
3,561
|
6,031
|
1.14
|
%
|
1.69
|
%
|
||||||||||
Total interest-bearing liabilities
|
$
|
10,341,256
|
$
|
10,523,212
|
$
|
115,876
|
$
|
130,843
|
1.12
|
%
|
1.24
|
%
|
||||||
Net interest income
|
$
|
535,006
|
$
|
527,425
|
||||||||||||||
Interest rate spread
|
4.16
|
%
|
4.02
|
%
|
||||||||||||||
Net interest margin
|
4.34
|
%
|
4.21
|
%
|
||||||||||||||
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 of 39% 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 are excluded from interest income 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 on 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 $14.2 million, and $13.8 million for the year ended December 31, 2014 and 2013, respectively, of income from prepayment penalties and late fees related to the Corporation's loan portfolio.
|
||||||||||||||||||
Table 4 – Non-Interest Income
|
||||||||||||||||||||
Quarter Ended
|
Year Ended
|
|||||||||||||||||||
December 31,
|
September 30,
|
December 31,
|
December 31,
|
December 31,
|
||||||||||||||||
(In thousands)
|
2014
|
2014
|
2013
|
2014
|
2013
|
|||||||||||||||
Service charges on deposit accounts
|
$
|
4,155
|
$
|
4,205
|
$
|
4,114
|
$
|
16,709
|
$
|
16,974
|
||||||||||
Mortgage banking activities
|
4,472
|
3,809
|
3,906
|
14,685
|
16,830
|
|||||||||||||||
Insurance income
|
1,540
|
1,290
|
1,124
|
6,868
|
5,955
|
|||||||||||||||
Broker-dealer income
|
-
|
-
|
97
|
459
|
97
|
|||||||||||||||
Branch consolidations - valuation adjustments fixed assets
|
-
|
-
|
(529
|
)
|
-
|
(529
|
)
|
|||||||||||||
Other operating income
|
7,898
|
7,115
|
9,666
|
30,033
|
28,608
|
|||||||||||||||
Non-interest income before net (loss) gain on investments, equity in earnings (loss) of unconsolidated entity, and write-off of collateral pledged to Lehman
|
18,065
|
16,419
|
18,378
|
68,754
|
67,935
|
|||||||||||||||
Net gain on sale of investments
|
(29
|
)
|
-
|
-
|
262
|
-
|
||||||||||||||
OTTI on equity securities
|
-
|
-
|
-
|
-
|
(42
|
)
|
||||||||||||||
OTTI on debt securities
|
(143
|
)
|
(245
|
)
|
-
|
(388
|
)
|
(117
|
)
|
|||||||||||
Net (loss) gain on investments
|
(172
|
)
|
(245
|
)
|
-
|
(126
|
)
|
(159
|
)
|
|||||||||||
Impairment - collateral pledged to Lehman
|
-
|
-
|
-
|
-
|
(66,574
|
)
|
||||||||||||||
Equity in earnings (loss) of unconsolidated entity
|
-
|
-
|
(5,893
|
)
|
(7,280
|
)
|
(16,691
|
)
|
||||||||||||
$
|
17,893
|
$
|
16,174
|
$
|
12,485
|
$
|
61,348
|
$
|
(15,489
|
)
|
||||||||||
Table 5 – Non-Interest Expenses
|
|||||||||||||||
(in thousands)
|
Quarter Ended
|
Year Ended
|
|||||||||||||
December 31,
|
September 30,
|
December 31,
|
December 31,
|
December 31,
|
|||||||||||
2014
|
2014
|
2013
|
2014
|
2013
|
|||||||||||
Employees' compensation and benefits
|
$
|
33,854
|
$
|
33,877
|
$
|
31,014
|
$
|
135,422
|
$
|
130,401
|
|||||
Occupancy and equipment
|
14,763
|
14,727
|
15,204
|
57,336
|
60,379
|
||||||||||
Deposit insurance premium
|
7,745
|
8,335
|
10,495
|
35,481
|
43,921
|
||||||||||
Other insurance and supervisory fees
|
1,182
|
1,158
|
957
|
4,713
|
4,549
|
||||||||||
Taxes, other than income taxes
|
4,482
|
4,528
|
4,101
|
18,089
|
17,997
|
||||||||||
Professional fees:
|
|||||||||||||||
Collections, appraisals and other credit related fees
|
4,244
|
2,914
|
2,524
|
11,629
|
10,760
|
||||||||||
Outsourcing technology services
|
4,775
|
4,840
|
4,202
|
18,429
|
14,144
|
||||||||||
Other professional fees
|
4,420
|
3,641
|
4,893
|
16,659
|
15,770
|
||||||||||
Credit and debit card processing expenses
|
4,002
|
3,741
|
4,869
|
15,449
|
12,909
|
||||||||||
Credit card processing platform conversion costs
|
-
|
-
|
-
|
-
|
1,715
|
||||||||||
Branch consolidations and other restructuring expenses
|
-
|
-
|
892
|
954
|
892
|
||||||||||
Business promotion
|
4,491
|
3,925
|
5,251
|
16,531
|
15,780
|
||||||||||
Communications
|
1,851
|
2,143
|
1,836
|
7,766
|
7,401
|
||||||||||
Net loss on OREO operations
|
3,655
|
4,326
|
13,321
|
20,596
|
40,633
|
||||||||||
Secondary offering costs
|
-
|
-
|
-
|
-
|
1,669
|
||||||||||
Terminated preferred stock exchange offer expenses
|
-
|
-
|
-
|
-
|
1,333
|
||||||||||
Acquisitions of loans from Doral related expenses
|
-
|
659
|
-
|
1,235
|
-
|
||||||||||
Bulk sales expenses
|
-
|
-
|
-
|
-
|
8,840
|
||||||||||
Loss contingency for attorneys' fees - Lehman litigation
|
-
|
-
|
2,500
|
-
|
2,500
|
||||||||||
Other
|
5,318
|
4,790
|
4,482
|
19,027
|
23,435
|
||||||||||
Total
|
$
|
94,782
|
$
|
93,604
|
$
|
106,541
|
$
|
379,316
|
$
|
415,028
|
|||||
Table 6 – Selected Balance Sheet Data
|
||||||||||||
(In thousands)
|
As of
|
|||||||||||
December 31,
|
September 30,
|
December 31,
|
||||||||||
2014
|
2014
|
2013
|
||||||||||
Balance Sheet Data:
|
||||||||||||
Loans, including loans held for sale
|
$
|
9,339,392
|
$
|
9,395,416
|
$
|
9,712,139
|
||||||
Allowance for loan and lease losses
|
222,395
|
225,434
|
285,858
|
|||||||||
Money market and investment securities
|
2,008,380
|
2,019,846
|
2,208,342
|
|||||||||
Intangible assets
|
49,907
|
51,143
|
54,866
|
|||||||||
Deferred tax asset, net
|
10,146
|
9,853
|
7,644
|
|||||||||
Total assets
|
12,424,396
|
12,643,280
|
12,656,925
|
|||||||||
Deposits
|
9,483,945
|
9,703,174
|
9,879,924
|
|||||||||
Borrowings
|
1,456,959
|
1,456,959
|
1,431,959
|
|||||||||
Total preferred equity
|
36,104
|
36,104
|
63,047
|
|||||||||
Total common equity
|
1,349,488
|
1,322,376
|
1,231,547
|
|||||||||
Accumulated other comprehensive loss, net of tax
|
(18,351
|
)
|
(34,323
|
)
|
(78,736
|
)
|
||||||
Total equity
|
1,367,241
|
1,324,157
|
1,215,858
|
|||||||||
Table 7 – Loan Portfolio
|
||||||||||
Composition of the loan portfolio including loans held for sale at period-end.
|
||||||||||
(In thousands)
|
||||||||||
As of
|
||||||||||
December 31,
|
September 30,
|
December 31,
|
||||||||
2014
|
2014
|
2013
|
||||||||
Residential mortgage loans
|
$
|
3,011,187
|
$
|
2,819,648
|
$
|
2,549,008
|
||||
Commercial loans:
|
||||||||||
Construction loans
|
123,480
|
141,689
|
168,713
|
|||||||
Commercial mortgage loans
|
1,665,787
|
1,812,094
|
1,823,608
|
|||||||
Commercial and Industrial loans
|
2,479,437
|
2,515,384
|
2,788,250
|
|||||||
Loans to local financial institutions collateralized by real estate mortgages
|
-
|
-
|
240,072
|
|||||||
Commercial loans
|
4,268,704
|
4,469,167
|
5,020,643
|
|||||||
Finance leases
|
232,126
|
236,115
|
245,323
|
|||||||
Consumer loans
|
1,750,419
|
1,790,472
|
1,821,196
|
|||||||
Loans held for investment
|
9,262,436
|
9,315,402
|
9,636,170
|
|||||||
Loans held for sale
|
76,956
|
80,014
|
75,969
|
|||||||
Total loans
|
$
|
9,339,392
|
$
|
9,395,416
|
$
|
9,712,139
|
(In thousands)
|
As of December 31, 2014
|
||||||||||||
Puerto Rico
|
Virgin Islands
|
United States
|
Consolidated
|
||||||||||
Residential mortgage loans
|
$
|
2,325,455
|
$
|
341,098
|
$
|
344,634
|
$
|
3,011,187
|
|||||
Commercial loans:
|
|||||||||||||
Construction loans
|
70,618
|
30,011
|
22,851
|
123,480
|
|||||||||
Commercial mortgage loans
|
1,305,057
|
69,629
|
291,101
|
1,665,787
|
|||||||||
Commercial and Industrial loans
|
2,072,265
|
120,947
|
286,225
|
2,479,437
|
|||||||||
Commercial loans
|
3,447,940
|
220,587
|
600,177
|
4,268,704
|
|||||||||
Finance leases
|
232,126
|
-
|
-
|
232,126
|
|||||||||
Consumer loans
|
1,666,373
|
47,811
|
36,235
|
1,750,419
|
|||||||||
Loans held for investment
|
7,671,894
|
609,496
|
981,046
|
9,262,436
|
|||||||||
Loans held for sale
|
34,972
|
40,317
|
1,667
|
76,956
|
|||||||||
Total loans
|
$
|
7,706,866
|
$
|
649,813
|
$
|
982,713
|
$
|
9,339,392
|
|||||
(In thousands)
|
As of September 30, 2014
|
||||||||||||
Puerto Rico
|
Virgin Islands
|
United States
|
Consolidated
|
||||||||||
Residential mortgage loans
|
$
|
2,139,435
|
$
|
343,620
|
$
|
336,593
|
$
|
2,819,648
|
|||||
Commercial loans:
|
|||||||||||||
Construction loans
|
92,734
|
25,631
|
23,324
|
141,689
|
|||||||||
Commercial mortgage loans
|
1,445,044
|
71,888
|
295,162
|
1,812,094
|
|||||||||
Commercial and Industrial loans
|
2,131,996
|
109,943
|
273,445
|
2,515,384
|
|||||||||
Commercial loans
|
3,669,774
|
207,462
|
591,931
|
4,469,167
|
|||||||||
Finance leases
|
236,115
|
-
|
-
|
236,115
|
|||||||||
Consumer loans
|
1,705,885
|
48,841
|
35,746
|
1,790,472
|
|||||||||
Loans held for investment
|
7,751,209
|
599,923
|
964,270
|
9,315,402
|
|||||||||
Loans held for sale
|
37,909
|
40,325
|
1,780
|
80,014
|
|||||||||
Total loans
|
$
|
7,789,118
|
$
|
640,248
|
$
|
966,050
|
$
|
9,395,416
|
|||||
(In thousands)
|
As of December 31, 2013
|
||||||||||||
Puerto Rico
|
Virgin Islands
|
United States
|
Consolidated
|
||||||||||
Residential mortgage loans
|
$
|
1,906,982
|
$
|
348,816
|
$
|
293,210
|
$
|
2,549,008
|
|||||
Commercial loans:
|
|||||||||||||
Construction loans
|
105,830
|
33,744
|
29,139
|
168,713
|
|||||||||
Commercial mortgage loans
|
1,464,085
|
74,271
|
285,252
|
1,823,608
|
|||||||||
Commercial and Industrial loans
|
2,436,709
|
125,757
|
225,784
|
2,788,250
|
|||||||||
Loans to a local financial institution collateralized by real estate mortgages
|
240,072
|
-
|
-
|
240,072
|
|||||||||
Commercial loans
|
4,246,696
|
233,772
|
540,175
|
5,020,643
|
|||||||||
Finance leases
|
245,323
|
-
|
-
|
245,323
|
|||||||||
Consumer loans
|
1,739,478
|
49,689
|
32,029
|
1,821,196
|
|||||||||
Loans held for investment
|
8,138,479
|
632,277
|
865,414
|
9,636,170
|
|||||||||
Loans held for sale
|
35,394
|
40,575
|
-
|
75,969
|
|||||||||
Total loans
|
$
|
8,173,873
|
$
|
672,852
|
$
|
865,414
|
$
|
9,712,139
|
|||||
Consolidated Non-Performing Assets
|
|||||||||||||
(Dollars in thousands)
|
December 31,
|
September 30,
|
December 31,
|
||||||||||
2014
|
2014
|
2013
|
|||||||||||
Non-performing loans held for investment:
|
|||||||||||||
Residential mortgage
|
$
|
180,707
|
$
|
185,025
|
$
|
161,441
|
|||||||
Commercial mortgage
|
148,473
|
169,967
|
120,107
|
||||||||||
Commercial and Industrial
|
122,547
|
130,917
|
114,833
|
||||||||||
Construction
|
29,354
|
30,111
|
58,866
|
||||||||||
Consumer and Finance leases
|
42,815
|
43,496
|
40,302
|
||||||||||
Total non-performing loans held for investment
|
523,896
|
559,516
|
495,549
|
||||||||||
OREO
|
124,003
|
112,803
|
160,193
|
||||||||||
Other repossessed property
|
14,229
|
17,467
|
14,865
|
||||||||||
Total non-performing assets, excluding loans held for sale
|
$
|
662,128
|
$
|
689,786
|
$
|
670,607
|
|||||||
Non-performing loans held for sale
|
54,641
|
54,641
|
54,801
|
||||||||||
Total non-performing assets, including loans held for sale (1)
|
$
|
716,769
|
$
|
744,427
|
$
|
725,408
|
|||||||
Past-due loans 90 days and still accruing (2)
|
$
|
162,887
|
$
|
143,535
|
$
|
120,082
|
|||||||
Allowance for loan and lease losses
|
$
|
222,395
|
$
|
225,434
|
$
|
285,858
|
|||||||
Allowance to total non-performing loans held for investment
|
42.45
|
%
|
40.29
|
%
|
57.69
|
%
|
|||||||
Allowance to total non-performing loans held for investment, excluding residential real estate loans
|
64.80
|
%
|
60.20
|
%
|
85.56
|
%
|
|||||||
(1)
|
Purchased credit impaired loans of $102.6 million accounted for under ASC 310-30 as of December 31, 2014, primarily mortgage loans acquired from Doral in the second quarter of 2014, are excluded and not considered non-performing due to the application of the accretion method, under which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analysis.
|
||||||||||||
(2)
|
Amount includes purchased credit impaired loans with individual delinquencies over 90 days and still accruing with a carrying value as of December 31, 2014 of approximately $15.7 million, primarily related to loans acquired from Doral.
|
||||||||||||
(In thousands)
|
December 31,
|
September 30,
|
December 31,
|
|||||||
2014
|
2014
|
2013
|
||||||||
Puerto Rico:
|
||||||||||
Non-performing loans held for investment:
|
||||||||||
Residential mortgage
|
$
|
156,361
|
$
|
159,740
|
$
|
139,771
|
||||
Commercial mortgage
|
121,879
|
147,909
|
101,255
|
|||||||
Commercial and Industrial
|
116,301
|
124,406
|
109,224
|
|||||||
Construction
|
24,526
|
25,780
|
43,522
|
|||||||
Finance leases
|
5,245
|
4,501
|
3,082
|
|||||||
Consumer
|
35,286
|
36,722
|
34,660
|
|||||||
Total non-performing loans held for investment
|
459,598
|
499,058
|
431,514
|
|||||||
OREO
|
111,041
|
99,721
|
123,851
|
|||||||
Other repossessed property
|
14,150
|
17,437
|
14,806
|
|||||||
Total non-performing assets, excluding loans held for sale
|
$
|
584,789
|
$
|
616,216
|
$
|
570,171
|
||||
Non-performing loans held for sale
|
14,636
|
14,636
|
14,796
|
|||||||
Total non-performing assets, including loans held for sale (1)
|
$
|
599,425
|
$
|
630,852
|
$
|
584,967
|
||||
Past-due loans 90 days and still accruing (2)
|
$
|
154,375
|
$
|
140,229
|
$
|
118,097
|
||||
Virgin Islands:
|
||||||||||
Non-performing loans held for investment:
|
||||||||||
Residential mortgage
|
$
|
15,483
|
$
|
13,576
|
$
|
8,439
|
||||
Commercial mortgage
|
11,770
|
7,044
|
6,827
|
|||||||
Commercial and Industrial
|
6,246
|
6,511
|
5,609
|
|||||||
Construction
|
4,064
|
4,173
|
11,214
|
|||||||
Consumer
|
887
|
861
|
514
|
|||||||
Total non-performing loans held for investment
|
38,450
|
32,165
|
32,603
|
|||||||
OREO
|
6,967
|
7,904
|
14,894
|
|||||||
Other repossessed property
|
22
|
3
|
5
|
|||||||
Total non-performing assets, excluding loans held for sale
|
$
|
45,439
|
$
|
40,072
|
$
|
47,502
|
||||
Non-performing loans held for sale
|
40,005
|
40,005
|
40,005
|
|||||||
Total non-performing assets, including loans held for sale
|
$
|
85,444
|
$
|
80,077
|
$
|
87,507
|
||||
Past-due loans 90 days and still accruing
|
$
|
5,281
|
$
|
2,766
|
$
|
1,985
|
||||
United States:
|
||||||||||
Non-performing loans held for investment:
|
||||||||||
Residential mortgage
|
$
|
8,863
|
$
|
11,709
|
$
|
13,231
|
||||
Commercial mortgage
|
14,824
|
15,014
|
12,025
|
|||||||
Commercial and Industrial
|
-
|
-
|
-
|
|||||||
Construction
|
764
|
158
|
4,130
|
|||||||
Consumer
|
1,397
|
1,412
|
2,046
|
|||||||
Total non-performing loans held for investment
|
25,848
|
28,293
|
31,432
|
|||||||
OREO
|
5,995
|
5,178
|
21,448
|
|||||||
Other repossessed property
|
57
|
27
|
54
|
|||||||
Total non-performing assets, excluding loans held for sale
|
$
|
31,900
|
$
|
33,498
|
$
|
52,934
|
||||
Non-performing loans held for sale
|
-
|
-
|
-
|
|||||||
Total non-performing assets, including loans held for sale
|
$
|
31,900
|
$
|
33,498
|
$
|
52,934
|
||||
Past-due loans 90 days and still accruing
|
$
|
3,231
|
$
|
540
|
$
|
-
|
||||
(1)
|
Purchased credit impaired loans of $102.6 million accounted for under ASC 310-30 as of December 31, 2014, primarily mortgage loans acquired from Doral in the second quarter of 2014, are excluded and not considered non-performing due to the application of the accretion method, under which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analysis.
|
|||||||||
(2)
|
Amount includes purchased credit impaired loans with individual delinquencies over 90 days and still accruing with a carrying value as of December 31, 2014 of approximately $15.7 million, primarily related to loans acquired from Doral.
|
|||||||||
Quarter Ended
|
Year Ended
|
|||||||||||||||||||||
(Dollars in thousands)
|
December 31,
|
September 30,
|
December 31,
|
December 31,
|
December 31,
|
|||||||||||||||||
2014
|
2014
|
2013
|
2014
|
2013
|
||||||||||||||||||
Allowance for loan and lease losses, beginning of period
|
$
|
225,434
|
$
|
241,177
|
$
|
289,379
|
$
|
285,858
|
$
|
435,414
|
||||||||||||
Provision for loan and lease losses
|
23,872
|
26,999
|
22,969
|
109,530
|
(1
|
)
|
243,751
|
|||||||||||||||
Net (charge-offs) recoveries of loans:
|
||||||||||||||||||||||
Residential mortgage
|
(6,522
|
)
|
(5,734
|
)
|
(4,544
|
)
|
(23,296
|
)
|
(127,999
|
)
|
||||||||||||
Commercial mortgage
|
(1,383
|
)
|
1,116
|
2,605
|
(15,168
|
)
|
(62,602
|
)
|
||||||||||||||
Commercial and Industrial
|
(992
|
)
|
(16,431
|
)
|
(9,146
|
)
|
(58,255
|
)
|
(2
|
)
|
(105,213
|
)
|
||||||||||
Construction
|
680
|
(3,205
|
)
|
(435
|
)
|
(5,484
|
)
|
(41,247
|
)
|
|||||||||||||
Consumer and finance leases
|
(18,694
|
)
|
(18,488
|
)
|
(14,970
|
)
|
(70,790
|
)
|
(56,246
|
)
|
||||||||||||
Net charge-offs
|
(26,911
|
)
|
(42,742
|
)
|
(26,490
|
)
|
(172,993
|
)
|
(2
|
)
|
(393,307
|
)
|
||||||||||
Allowance for loan and lease losses, end of period
|
$
|
222,395
|
$
|
225,434
|
$
|
285,858
|
$
|
222,395
|
$
|
285,858
|
||||||||||||
Allowance for loan and lease losses to period end total loans held for investment
|
2.40
|
%
|
2.42
|
%
|
2.97
|
%
|
2.40
|
%
|
2.97
|
%
|
||||||||||||
Net charge-offs (annualized) to average loans outstanding during the period
|
1.13
|
%
|
1.80
|
%
|
1.10
|
%
|
1.81
|
%
|
4.01
|
%
|
||||||||||||
Net charge-offs (annualized), excluding charge-offs related to the acquisition of mortgage loans from Doral, loans sold and loans transferred to held for sale, to average loans outstanding during the period
|
1.13
|
%
|
1.80
|
%
|
1.10
|
%
|
1.74
|
%
|
1.68
|
%
|
||||||||||||
Provision for loan and lease losses to net charge-offs during the period
|
0.89x
|
0.63x
|
0.87x
|
0.63x
|
0.62x
|
|||||||||||||||||
Provision for loan and lease losses to net charge-offs during the period, excluding impact of the acquisition of mortgage loans from Doral, loans sold and the transfer of loans to held for sale
|
0.89x
|
0.63x
|
0.87x
|
0.65x
|
0.69x
|
|||||||||||||||||
(1) Includes a provision of $1.4 million associated with the acquisition of mortgage loans from Doral.
|
||||||||||||||||||||||
(2) Includes net charge-offs totaling $6.9 million associated with the acquisition of mortgage loans from Doral.
|
||||||||||||||||||||||
(3) Includes provision of $132.0 million associated with the bulk sales and the transfer of loans to held for sale.
|
||||||||||||||||||||||
(4) Includes net charge-offs totaling $99.0 million associated with the bulk sales.
|
||||||||||||||||||||||
(5) Includes net charge-offs of $54.6 million associated with the bulk sale of adversely classified commercial assets and the transfer of loans to held for sale.
|
||||||||||||||||||||||
(6) Includes net charge-offs totaling $44.7 million associated with the bulk sale of adversely classified commercial assets.
|
||||||||||||||||||||||
(7) Includes net charge-offs of $34.2 million associated with the bulk sales and the transfer of loans to held for sale.
|
||||||||||||||||||||||
(8) Includes net charge-offs of $232.4 million associated with the bulk sales and the transfer of loans to held for sale.
|
||||||||||||||||||||||
Year ended
|
||||||||||||||||
December 31,
|
December 31,
|
December 31,
|
December 31,
|
December 31,
|
||||||||||||
2014
|
2013
|
2012
|
2011
|
2010
|
||||||||||||
Residential mortgage
|
0.85%
|
4.77%
|
(3)
|
1.32%
|
1.32%
|
1.80%
|
(8)
|
|||||||||
Commercial mortgage
|
0.84%
|
3.44%
|
(4)
|
1.41%
|
3.21%
|
5.02%
|
(9)
|
|||||||||
Commercial and Industrial
|
2.13%
|
(1)
|
3.52%
|
(5)
|
1.21%
|
1.57%
|
2.16%
|
(10)
|
||||||||
Construction
|
2.76%
|
15.11%
|
(6)
|
10.49%
|
16.33%
|
23.80%
|
(11)
|
|||||||||
Consumer and finance leases
|
3.46%
|
2.76%
|
1.92%
|
2.33%
|
2.98%
|
|||||||||||
Total loans
|
1.81%
|
(2)
|
4.01%
|
(7)
|
1.74%
|
2.68%
|
4.76%
|
(12)
|
||||||||
(1) Includes net charge-offs totaling $6.9 million associated with the acquisition of mortgage loans from Doral. The ratio of commercial and industrial net charge-offs to average loans, excluding charge-offs associated with the acquisition of mortgage loans from Doral, was 1.95%.
|
||||||||||||||||
(2) Includes net charge-offs totaling $6.9 million associated with the acquisition of mortgage loans from Doral. The ratio of total net charge-offs to average loans, excluding charge-offs associated with the acquisition of mortgage loans from Doral, was 1.74%.
|
||||||||||||||||
(3) Includes net charge-offs totaling $99.0 million associated with the bulk loan sales. The ratio of residential mortgage net charge-offs to average loans, excluding charge-offs associated with the bulk loan sales, was 1.13%.
|
||||||||||||||||
(4) Includes net charge-offs totaling $54.6 million associated with the bulk sale of adversely classified commercial assets and the transfer of loans to held for sale in the first quarter of 2013. The ratio of commercial mortgage net charge-offs to average loans, excluding charge-offs associated with the bulk sale of adversely classified commercial assets and the transfer of loans to held for sale, was 0.45%.
|
||||||||||||||||
(5) Includes net charge-offs totaling $44.7 million associated with the bulk sale of adversely classified commercial assets. The ratio of commercial and industrial net charge-offs to average loans, excluding charge-offs associated with the bulk sale of adversely classified commercial assets, was 2.04%.
|
||||||||||||||||
(6) Includes net charge-offs totaling $34.2 million associated with the bulk loan sales and the transfer of loans to held for sale. The ratio of construction loan net charge-offs to average loans, excluding charge-offs associated with the bulk loan sales and the transfer of loans to held for sale, was 2.91%.
|
||||||||||||||||
(7) Includes net charge-offs totaling $232.4 million associated with the bulk loan sales and the transfer of loans to held for sale. The ratio of total net charge-offs to average loans, excluding charge-offs associated with the bulk loan sales and the transfer of loans to held for sale, was 1.68%.
|
||||||||||||||||
(8) Includes net charge-offs totaling $7.8 million associated with non-performing residential mortgage loans sold in a bulk sale.
|
||||||||||||||||
(9) Includes net charge-offs totaling $29.5 million associated with the transfer of loans to held for sale in the fourth quarter of 2010. The ratio of commercial mortgage net charge-offs to average loans, excluding charge-offs associated with the transfer of loans to held for sale, was 3.38%.
|
||||||||||||||||
(10) Includes net charge-offs totaling $8.6 million associated with the transfer of loans to held for sale in the fourth quarter of 2010. The ratio of commercial and industrial net charge-offs to average loans, excluding charge-offs associated with the transfer of loans to held for sale, was 1.98%.
|
||||||||||||||||
(11) Includes net charge-offs totaling $127.0 million associated with the transfer of loans to held for sale in the fourth quarter of 2010. The ratio of construction net charge-offs to average loans, excluding charge-offs associated with the transfer of loans to held for sale, was 18.93%.
|
||||||||||||||||
(12) Includes net charge-offs totaling $165.1 million associated with the transfer of loans to held for sale in the fourth quarter of 2010. The ratio of total net charge-offs to average loans, excluding charge-offs associated with the transfer of loans to held for sale, was 3.60%.
|
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