-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BiLUHWvxM9A+k7g4VfZbRJYaE2RaPyQajQF67D39TtasA7VAw3m+qgGxYhZ3NHV9 DJ0XC7DA6zHNnFH4BCPR0w== 0000950144-96-007013.txt : 19961011 0000950144-96-007013.hdr.sgml : 19961011 ACCESSION NUMBER: 0000950144-96-007013 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961007 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961010 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANPONCE CORP CENTRAL INDEX KEY: 0000763901 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 660416582 STATE OF INCORPORATION: PR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-13818 FILM NUMBER: 96642010 BUSINESS ADDRESS: STREET 1: 209 MUNOZ RIVERA AVE STREET 2: POPULAR CENTER BUILDING CITY: HATO REY STATE: PR ZIP: 00918 BUSINESS PHONE: 8097659800 MAIL ADDRESS: STREET 1: P.O. BOX 362708 CITY: SAN JUAN STATE: PR ZIP: 00936-2708 8-K 1 BANPONCE CORPORATION 8-K 10/7/96 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): October 7, 1996 BANPONCE CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) COMMONWEALTH OF PUERTO RICO NO. 0-13818 NO. 66-0416582 - ---------------------------- ----------- ------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 209 MUNOZ RIVERA AVENUE HATO REY, PUERTO RICO 00918 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (787) 765-9800 ----------------- ------------------------------------------------------------- (Former name or former address, if changed since last report) 2 Item 5. Other Events On October 7, 1996, BanPonce Corporation (the "Corporation") announced by way of a news release, its operational results for the quarter and nine-month period ended September 30, 1996. A copy of the Corporation's release, dated October 7, 1996, is attached hereto as Exhibit 99(a) and is hereby incorporated by reference. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (c) Exhibits 99(a) News release, dated October 7, 1996, announcing the Corporation and subsidiaries earnings for the quarter and nine-month period ended September 30, 1996. 3 Exhibit Index Exhibit Number Description -------------- ----------- 99(a) News release, dated October 7, 1996 4 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BANPONCE CORPORATION (Registrant) Date: October 9, 1996 By: /S/ Amilcar L. Jordan, Esq. ----------------------------------- Name : Amilcar L. Jordan, Esq. Title : Senior Vice President and Comptroller EX-99.A 2 NEWS RELEASE 10/7/96 1 BANPONCE (letterhead) BANPONCE CORPORATION CORPORATION For additional information contact: Jorge A. Junquera Senior Executive Vice President (787) 754-1685 October 7, 1996 News Release BANPONCE CORPORATION AND SUBSIDIARIES (THE CORPORATION) EARNINGS FOR THE QUARTER AND NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1996 BanPonce Corporation reported net income of $46.3 million for the third quarter of 1996, compared with $38.3 million reported for the same quarter of 1995, an increase of $8.0 million or 20.8%. Earnings per common share (EPS) for the quarter were $0.67, based on 66,048,673 average shares outstanding, compared with $0.55, based on 65,844,636 average shares outstanding for the quarter ended September 30, 1995, after adjusting for the stock split in the form of a dividend of one share for each share outstanding effective on July 1, 1996. Net earnings for the first and second quarter of 1996 were $45.1 million and $46.1 million, respectively, or $0.65 and $0.67 per common share, based on 65,949,872 and 66,001,180 average shares outstanding. Return on assets (ROA) and return on common equity (ROE) for the third quarter of 1996 were 1.10% and 15.94%, respectively. For the same period of 1995, the Corporation reported ROA and ROE of 1.03% and 14.55%, respectively. For the second quarter of 1996 these ratios were 1.16% and 16.56%. For the first nine months of 1996, the Corporation's net earnings amounted to $137.5 million, compared with $106.1 million for the same period in 1995. EPS for the first nine months of 1996 were $1.99, compared with $1.52 for the same period of 1995. ROA and ROE for the first nine months of 1996 were 1.14% and 16.29%, respectively. For the same period of 1995 these ratios were 1.03% and 14.00%. On April 26, 1996, the Board of Directors authorized a two-for-one common stock split effected in the form of a dividend, which doubled the total outstanding shares at the time. The new shares were distributed on July 1, 1996, to shareholders of record as of June 14, 1996. All per share data included herein has been adjusted to reflect the stock split. 2 2 - BANPONCE CORPORATION 1996 THIRD QUARTER RESULTS The Corporation's results of operations for the quarter ended September 30, 1996, reflected an increase of $23.8 million in net interest income and an increase of $4.6 million in other revenues when compared with the same quarter of 1995. These improvements were partially offset by an increase of $15.9 million in operating expenses, $3.4 million in the provision for loan losses and $1.1 million in income taxes. The rise in net interest income for the quarter resulted mainly from an increase of $2.0 billion in the average volume of earning assets. Investment securities, trading and money market investments accounted for $1.0 billion of that increase, while average loans accounted for the remaining $ 1.0 billion increase. Most loan categories showed increases. The increase in the volume of earning assets was funded through a higher amount of deposits and borrowings. The net interest margin (NIM) for the quarter ended September 30, 1996, was 4.40%, compared with 4.33% for the third quarter of 1995. For the first and second quarter of 1996 the NIM was 4.48% and 4.52%, respectively. For the first nine months of 1996 the NIM was 4.47%, compared with 4.46% for the same period of 1995. The growth in the Corporation's loan portfolio and an increase in net charge-offs were the major reasons for the increase in the provision for loan losses. Net charge-offs for the quarter ended September 30, 1996, were $18.8 million or 0.80% of average loans compared with $13.3 million or 0.64% for the third quarter of 1995, and $18.1 million or 0.80% for the second quarter of 1996. As a percentage of average loans, net charge-offs were 0.76% and 0.54% for the nine-month periods ended on September 30, 1996 and 1995, respectively. Non-performing assets were $153 million or 1.60% of ending loans at September 30, 1996, compared with $156 million or 1.84% at the end of the third quarter of 1995 and $152 million or 1.64% at June 30, 1996. Other service fees and service charges on deposit accounts rose $2.6 million and $1.4 million, respectively, partially offset by a reduction of $1.9 million in other operating income. Banco Popular accounted for $2.1 million of the increase in other service fees. This rise was mainly reflected in fees related to transactions at point-of-sale (POS) terminals, credit and debit card fees and commissions earned on the sale and administration of investment products. Service charges on deposit accounts increased $1.2 million at Banco Popular mainly due to a higher activity on 3 3 - BANPONCE CORPORATION 1996 THIRD QUARTER RESULTS commercial accounts and higher volume of deposits. The reduction in other operating income was primarily a result of write-downs recorded on impaired assets and a reduction in the gain on sale of mortgage loans, partially offset by higher daily rental income realized by the Corporation's leasing subsidiaries. During this quarter, the Corporation realized $4.9 million in gains on sale of securities. A significant portion of those gains was realized on the sale of equity securities by one of the Corporation's subsidiaries. Personnel costs increased $5.7 million as compared with the third quarter of 1995. Most of the increase was reflected in salaries and benefits expenses due mainly to annual merit increases, greater use of incentive pay for increased sales efforts and the Corporation's business expansion. Other operating expenses increased $10.2 million, mostly in professional fees, business promotion, equipment expenses and communications. These increases were principally attributed to the growth in the Corporation's business activity, including the costs related to the expansion of the electronic payment system, the growth in the network of POS terminals and the development and promotion of new products and services in accordance with the Corporation's ongoing strategic initiatives. Also increasing other operating expenses in this quarter was a $1.15 million expense recorded by Banco Popular, FSB, as a result of a one-time assessment to capitalize the Savings Association Insurance Fund (SAIF). The Corporation's total assets at September 30, 1996, amounted to $16.8 billion, compared with $14.9 billion at September 30, 1995. Banco Popular accounted for $865 million of that growth, while BP Capital and Equity One increased $454 million and $202 million, respectively. Total assets at June 30, 1996, were $16.4 billion. At September 30, 1996, total loans amounted to $9.6 billion, compared with $8.5 billion a year ago and $9.3 billion at June 30, 1996. Commercial loans reflected the major growth, particularly at Banco Popular. The allowance for loan losses amounted to $182.4 million as of September 30, 1996, or 1.90% of loans, compared with $164.4 million or 1.94% at the same date in 1995. At June 30, 1996, the allowance for loan losses totaled $178.3 million or 1.92% of loans. The allowance as a percentage of non-performing assets was 118.9% at September 30, 1996, compared with 105.5% at the end of the third quarter of 1995 and 117.0% at June 30, 1996. 4 4 - BANPONCE CORPORATION 1996 THIRD QUARTER RESULTS Total deposits were $10.6 billion at September 30, 1996, compared with $9.7 billion at September 30, 1995, and $10.6 billion at the end of the second quarter of 1996. Banco Popular accounted for $768 million of the increase in deposits. At September 30, 1996, stockholders' equity totaled $1.22 billion, compared with $1.10 billion at the same date last year. Stockholders' equity was $1.19 billion at June 30, 1996. The market value of the Corporation's common stock at September 30, 1996, was $27.00 per share, compared with $19.38 at September 30, 1995, and $22.50 at June 30, 1996. The Corporation's market capitalization at September 30, 1996, was $1.8 billion, compared with $1.3 billion at September 30, 1995, and $1.5 billion at June 30, 1996. At September 30, 1996, the Corporation's common stock had a book value per share of $16.96. Acquisitions continue to be an integral component of the Corporation's diversification strategy, focusing its expansion plans on the mainland and in the Caribbean. On September 30, 1996, the Corporation acquired all the common stock of Comban Corp, which is the bank holding company of Commerce National Bank, based in City of Commerce, California. This acquisition brings to the Corporation $75 million in assets and $63 million in deposits at September 30, 1996, and three branches in California, where Banco Popular already operates a branch. The new branches are located in City of Commerce, Montebello and Downey. In September 26, the Corporation signed a letter of intent to acquire CBC Bancorp and its two state banking subsidiaries. CBC Bancorp is the parent company of Capitol Bank & Trust in Chicago and Capitol Bank of Westmont. CBC Bancorp, with assets of $315 million and deposits of $280 million at June 30, 1996, operates three branches in Chicago and Westmont, Illinois. Through this acquisition the Corporation will increase its existing franchise in the Chicago market to approximately $750 million in assets, $650 million in deposits and eight branches. In August, the U.S. Congress approved legislation that increased the federal minimum wage and repealed Section 936 of the U.S. Internal Revenue Code. In general terms, Section 936 provided U.S. companies (936 Corporations) operating on the island with a tax credit against the federal tax liability on income derived from business operations and investment income in Puerto Rico. The bill approved repealed the Qualified Possession Source Investment Income ("QPSII") for taxable 5 5 - BANPONCE CORPORATION 1996 THIRD QUARTER RESULTS years beginning after June 30, 1996, while the income and the wage credit will be phased out in 10 years. The tax-exempt status of passive investments in Puerto Rico held by 936 Corporations has created a local funds market whose cost is usually below that of the U.S. mainland or the Eurodollar market. The Corporation anticipates a substantial reduction in the volume of 936 funds, although as of this writing there have been no significant changes in the local market. Most of these funds will be replaced with conventional funds, which may cause the cost of funds to slightly increase and the net interest income to decrease during the fourth quarter of 1996. The anticipated negative impact in the net interest income is expected to be partially offset by a decrease in the cost of complying with various investment requirements imposed by local regulations to all recipients of 936 funds. At September 30, 1996 the Corporation maintained $3.2 billion in 936 funds, representing 20.6% of its liabilities. On September 30, 1996, President Clinton signed into law, as part of the Omnibus Budget Reconciliation Act, the "Deposit Insurance Funds Act of 1996" (the Act). The Act provides for the capitalization of the Savings Association Insurance Fund (SAIF) to its designated reserve ratio of 1.25% of insured deposits in thrift institutions. In doing so, the Act gives the FDIC the legal authority to impose a special one-time assessment on all SAIF insured institutions. As previously mentioned and as a result of the above, Banco Popular, FSB, an indirect subsidiary of the Corporation, recognized a $1.15 million expense related to this one-time assessment at the end of this quarter. * * * 6 BANPONCE CORPORATION FINANCIAL SUMMARY (In thousands, except per share data)
Third FOR THE NINE MONTHS ENDED 1996 1995 Quarter SEPTEMBER 30 ----------------------------------- 1996-1995 ----------------------------------- THIRD Second Third Percent Percent QUARTER Quarter Quarter Variance 1996 1995 Variance ----------------------------------- --------- ----------------------------------- SUMMARY OF OPERATIONS Interest income $327,097 $309,975 $288,459 13.39% $939,999 $807,495 16.41% Interest expense 154,861 141,767 140,044 10.58 437,095 379,433 15.20 ----------------------------------- --------- ----------------------------------- Net interest income 172,236 188,206 148,415 16.05 502,904 428,062 17.48 Provision for loan losses 22,436 21,672 18,987 18.17 65,381 43,331 50.89 ----------------------------------- --------- ----------------------------------- Net interest income after provision for loan losses 149,800 146,536 129,428 15.74 437,523 384,731 13.72 Other operating income 46,704 50,718 44,588 4.75 147,747 122,101 21.00 Gain (loss) on sale of securities 4,911 (20) 1,950 5,620 2,062 Trading account profit (loss) (216) (1,383) 293 (661) 593 ----------------------------------- --------- ----------------------------------- Total other income $ 51,399 49,315 46,831 9.75 152,706 124,766 22.40 Salaries and benefits 62,304 61,766 57,928 7.56 185,803 172,822 7.51 Profit sharing 5,789 5,685 4,435 30.53 17,544 14,268 22.96 Other operating expenses 67,360 64,393 57,233 17.69 194,649 175,545 10.88 ----------------------------------- --------- ----------------------------------- Total operating expenses 135,453 131,844 119,596 13.26 397,996 362,635 9.75 ----------------------------------- --------- ----------------------------------- Income before income tax 65,746 64,007 56,663 16.03 192,233 146,852 30.90 Income tax 19,473 17,952 18,356 6.09 54,763 40,743 34.41 ----------------------------------- --------- ----------------------------------- Net income $ 46,273 $ 46,055 $ 38,307 20.80 $137,470 $106,109 29.56 =================================== ========= =================================== Net income applicable to common stock $ 44,185 $ 43,967 $ 36,220 21.99 $131,208 $ 99,847 31.41 =================================== ========= =================================== Earnings per common share: Net income* $ 0.67 $ 0.67 $ 0.55 21.62 $ 1.99 $ 1.52 30.99 ======== ======== ======== ===== ======== ======== ===== Average common shares outstanding* 66,048,673 66,001,180 65,844,636 66,000,086 65,789,0l4 Common shares outstanding at end of period* 66,048,673 66,00l,180 65,844,636 66,048,673 65,844,636
* Restated to reflect the stock split in the form of a dividend of one share for each share outstanding effective on July 1, 1996. 7 BANPONCE CORPORATION Financial Summary (in thousands)
Third For the nine months ended 1996 1995 Quarter September 30 -------------------------------------- 1996-1995 ----------------------------------- Third Second Third Percent Percent Quarter Quarter Quarter Variance 1996 1995 Variance -------------------------------------- --------- ----------------------------------- SELECTED AVERAGE BALANCES Total assets $16,796,305 $15,988,100 $14,708,550 14.19 $16,116,236 $13,759,405 17.13 Loans 9,386,931 9,033,179 8,360,391 12.28 9,057,462 8,106,514 11.73 Earning assets 15,769,431 15,020,119 13,787,514 14.37 15,142,449 12,896,331 17.42 Interest-bearing liabilities 13,285,087 12,464,300 11,596,367 14.56 12,655,292 10,679,496 18.50 Stockholders' equity 1,202,292 1,167,856 1,087,119 10.59 1,175,776 1,053,384 11.62 PEFORMANCE RATIOS Net interest yield* 4.40% 4.52% 4.33% 4.47% 4.46% Return on assets 1.10 1.16 1.03 1.14 1.03 Return on common equity 15.94 16.56 14.55 16.29 14.00 CREDIT QUALITY DATA Nonperforming assets $ 153,400 $ 152,401 $ 155,915 -1.61 $ 153,400 $ 155,915 -1.61 Net loans charged-off 18,796 18,066 13,291 41.42 51,804 32,699 58.43 Allowance for loan losses 182,372 178,330 164,430 10.91 182,372 164,430 10.91 Nonperforming assets to total assets 0.92% 0.93% 1.04% 0.92% 1.04% Allowance for losses to loans 1.90 1.92 1.94 1.90 1.94 SELECTED FINANCIAL DATA AT PERIOD-END Total assets ............... $16,755,598 $16,442,137 $14,934,595 $16,755,598 $14,934,595 12.19 Loans ...................... 9,589,289 9,279,332 8,486,900 8,589,289 8,486,900 12.99 Earning assets ............. 15,666,005 15,333,607 13,967,927 15,666,005 13,967,927 12.16 Interest-bearing liabilities 13,158,716 12,833,828 11,745,871 13,158,716 11,745,871 12.03 Stockholder's equity ....... 1,220,105 1,187,138 1,102,047 1,220,105 1,102,047 10.71
* Not on a taxable equivalent basis -----END PRIVACY-ENHANCED MESSAGE-----