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EX-99.1 - EX-99.1 - FIRST BANCORP /PR/ | g26118exv99w1.htm |
EX-99.2 - EX-99.2 - FIRST BANCORP /PR/ | g26118exv99w2.htm |
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): February 9, 2011
FIRST BANCORP.
(Exact Name of Registrant as Specified in its Charter)
001-14793
(Commission File Number)
(Commission File Number)
Puerto Rico | 66-0561882 | |
(State or Other Jurisdiction | (I.R.S. Employer | |
of Incorporation) | Identification No.) |
1519 Ponce de Leon
San Juan, Puerto Rico 00908-0146
(Address of Principal Executive Offices) (Zip Code)
San Juan, Puerto Rico 00908-0146
(Address of Principal Executive Offices) (Zip Code)
(787) 729 8200
(Registrants Telephone Number, including Area Code)
(Registrants Telephone Number, including Area Code)
Not applicable
(Former name or former address, if changed since last report)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
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)) |
TABLE OF CONTENTS
Item 2.02 Results of Operations and Financial Condition | ||||||||
Item 8.01 Other Events | ||||||||
Item 9.01 Financial Statements and Exhibits | ||||||||
SIGNATURE | ||||||||
Exhibit Index | ||||||||
EX-99.1 | ||||||||
EX-99.2 |
Table of Contents
Item 2.02 Results of Operations and Financial Condition.
On February 9, 2011, First BanCorp (the Corporation) issued a press release announcing its
unaudited results of operations for the fourth quarter and year ended December 31, 2010. A copy of
the press release is attached hereto as Exhibit 99.1 and is hereby incorporated herein by
reference.
The Corporation has included in this release the following non-GAAP financial measures: (i) the
calculation of net interest income, interest rate spread and net interest margin rate on a tax-
equivalent basis and excluding changes in the fair value of derivative instruments and certain
financial liabilities, (ii) the calculation of the tangible common equity ratio and the tangible
book value per common share, (iii) the Tier 1 common equity to risk-weighted assets ratio, (iv) the
adjusted pre-tax, pre-provision income, and (v) certain other financial measures adjusted to
exclude the effect of loans transferred to held for sale resulting from the execution of an
agreement providing for the strategic sale of loans. Investors should be aware that non-GAAP
measures have inherent limitations and should be read only in conjunction with the Corporations
consolidated financial data prepared in accordance with GAAP.
Net interest income, interest rate spread and net interest margin are reported on a tax-equivalent
basis and excluding changes in the fair value (valuations) of derivative instruments and
financial liabilities elected to be measured at fair value. The presentation of net interest income
excluding valuations provides additional information about the Corporations net interest income
and facilitates comparability and analysis. The changes in the fair value of derivative
instruments and unrealized gains and losses on liabilities measured at fair value have no effect on
interest due or interest earned on interest-bearing liabilities or interest-earning assets,
respectively. The tax-equivalent adjustment to net interest income recognizes the income tax
savings when comparing taxable and tax-exempt assets and assumes a marginal income tax rate, as
described in Exhibit A Tables 2 and 3 of the attached Press Release (included herein as Exhibit
99.1). Income from tax-exempt earning assets is increased by an amount equivalent to the taxes that
would have been paid if this income had been taxable at statutory rates. Management believes that
it is a standard practice in the banking industry to present net interest income, interest rate
spread and net interest margin on a fully tax-equivalent basis. This adjustment puts all earning
assets, most notably tax-exempt securities and certain loans, on a common basis that facilitates
comparison of results to results of peers.
The following table reconciles the non-GAAP financial measure net interest income on a
tax-equivalent basis and excluding fair value changes with net interest income calculated and
presented in accordance with GAAP. The table also reconciles the non-GAAP financial measures net
interest spread and margin on a tax-equivalent basis and excluding fair value changes with net
interest spread and margin calculated and presented in accordance with GAAP.
Table of Contents
Reconciliation of GAAP Net Interest Margin and Spread to Non-GAAP Net Interest Margin and Spread on a Tax-Equivalent Basis and excluding
fair value changes on derivative instruments and liabilities measured at fair value (valuations)
(dollars in thousands)
Quarter Ended | Year Ended | |||||||||||||||||||||||||||
December 31, 2010 | September 30, 2010 | June 30, 2010 | March 31, 2010 | December 31, 2009 | December 31, 2010 | December 31, 2009 | ||||||||||||||||||||||
Net Interest Income (in thousands) |
||||||||||||||||||||||||||||
Interest Income GAAP |
$ | 192,806 | $ | 204,028 | $ | 214,864 | $ | 220,988 | $ | 243,449 | $ | 832,686 | $ | 996,574 | ||||||||||||||
Unrealized (gain) loss on
derivative instruments |
(903 | ) | 938 | 487 | 744 | (2,764 | ) | 1,266 | (5,519 | ) | ||||||||||||||||||
Interest income excluding valuations |
191,903 | 204,966 | 215,351 | 221,732 | 240,685 | 833,952 | 991,055 | |||||||||||||||||||||
Tax-equivalent adjustment |
4,494 | 6,778 | 7,222 | 9,912 | 12,311 | 28,406 | 53,617 | |||||||||||||||||||||
Interest income on a tax-equivalent basis excluding valuations |
196,397 | 211,744 | 222,573 | 231,644 | 252,996 | 862,358 | 1,044,672 | |||||||||||||||||||||
Interest Expense GAAP |
80,758 | 90,326 | 95,802 | 104,125 | 106,152 | 371,011 | 477,532 | |||||||||||||||||||||
Unrealized (loss) gain on
derivative instruments and liabilities measured at fair value |
(813 | ) | (526 | ) | 3,896 | (989 | ) | (247 | ) | 1,568 | (45 | ) | ||||||||||||||||
Interest expense excluding valuations |
79,945 | 89,800 | 99,698 | 103,136 | 105,905 | 372,579 | 477,487 | |||||||||||||||||||||
Net interest income GAAP |
$ | 112,048 | $ | 113,702 | $ | 119,062 | $ | 116,863 | $ | 137,297 | $ | 461,675 | $ | 519,042 | ||||||||||||||
Net interest income excluding valuations |
$ | 111,958 | $ | 115,166 | $ | 115,653 | $ | 118,596 | $ | 134,780 | $ | 461,373 | $ | 513,568 | ||||||||||||||
Net interest income on a tax-equivalent basis excluding valuations |
$ | 116,452 | $ | 121,944 | $ | 122,875 | $ | 128,508 | $ | 147,091 | $ | 489,779 | $ | 567,185 | ||||||||||||||
Average Balances (in thousands) |
||||||||||||||||||||||||||||
Loans and leases |
$ | 12,185,511 | $ | 12,443,055 | $ | 13,025,808 | $ | 13,569,467 | $ | 13,777,928 | $ | 12,801,107 | $ | 13,460,562 | ||||||||||||||
Total securities and other short-term investments |
3,863,532 | 4,640,055 | 5,485,934 | 5,526,589 | 5,505,527 | 4,873,837 | 5,865,662 | |||||||||||||||||||||
Average Interest-Earning Assets |
$ | 16,049,043 | $ | 17,083,110 | $ | 18,511,742 | $ | 19,096,056 | $ | 19,283,455 | $ | 17,674,944 | $ | 19,326,224 | ||||||||||||||
Average Interest-Bearing Liabilities |
$ | 14,036,776 | $ | 15,002,168 | $ | 16,378,022 | $ | 16,910,781 | $ | 17,112,556 | $ | 15,560,623 | $ | 17,099,692 | ||||||||||||||
Average Yield/Rate |
||||||||||||||||||||||||||||
Average yield on interest-earning assets GAAP |
4.77 | % | 4.74 | % | 4.66 | % | 4.69 | % | 5.01 | % | 4.71 | % | 5.16 | % | ||||||||||||||
Average rate on interest-bearing liabilities GAAP |
2.28 | % | 2.39 | % | 2.35 | % | 2.50 | % | 2.46 | % | 2.38 | % | 2.79 | % | ||||||||||||||
Net interest spread GAAP |
2.49 | % | 2.35 | % | 2.31 | % | 2.19 | % | 2.55 | % | 2.33 | % | 2.37 | % | ||||||||||||||
Net interest margin GAAP |
2.77 | % | 2.64 | % | 2.58 | % | 2.48 | % | 2.82 | % | 2.61 | % | 2.69 | % | ||||||||||||||
Average yield on interest-earning assets excluding valuations |
4.74 | % | 4.76 | % | 4.66 | % | 4.71 | % | 4.95 | % | 4.72 | % | 5.13 | % | ||||||||||||||
Average rate on interest-bearing liabilities excluding valuations |
2.26 | % | 2.37 | % | 2.44 | % | 2.47 | % | 2.46 | % | 2.39 | % | 2.79 | % | ||||||||||||||
Net interest spread excluding valuations |
2.48 | % | 2.39 | % | 2.22 | % | 2.24 | % | 2.49 | % | 2.33 | % | 2.34 | % | ||||||||||||||
Net interest margin excluding valuations |
2.77 | % | 2.67 | % | 2.51 | % | 2.52 | % | 2.77 | % | 2.61 | % | 2.66 | % | ||||||||||||||
Average yield on interest-earning assets on a tax-equivalent basis and excluding valuations |
4.86 | % | 4.92 | % | 4.82 | % | 4.92 | % | 5.21 | % | 4.88 | % | 5.41 | % | ||||||||||||||
Average rate on interest-bearing liabilities excluding valuations |
2.26 | % | 2.37 | % | 2.44 | % | 2.47 | % | 2.46 | % | 2.39 | % | 2.79 | % | ||||||||||||||
Net interest spread on a tax-equivalent basis and excluding valuations |
2.60 | % | 2.55 | % | 2.38 | % | 2.45 | % | 2.75 | % | 2.48 | % | 2.62 | % | ||||||||||||||
Net interest margin on a tax-equivalent basis and excluding valuations |
2.88 | % | 2.83 | % | 2.66 | % | 2.73 | % | 3.03 | % | 2.77 | % | 2.93 | % | ||||||||||||||
The tangible common equity ratio and tangible book value per common share are non-GAAP
measures generally used by the financial community to evaluate capital adequacy. Tangible common
equity is total equity less preferred equity, goodwill and core deposit intangibles. Tangible
assets are total assets less goodwill and core deposit intangibles. Management and many stock
analysts use the tangible common equity ratio and tangible book value per common share in
conjunction with more traditional bank capital ratios to compare the capital adequacy of banking
organizations with significant amounts of goodwill or other intangible assets, typically stemming
from the use of the purchase accounting method of accounting for mergers and acquisitions. Neither
tangible common equity nor tangible assets, or related measures should be considered in isolation
or as a substitute for stockholders equity, total assets or any other measure calculated in
accordance with GAAP. Moreover, the manner in which the Corporation calculates its tangible common
equity, tangible assets and any other related measures may differ from that of other companies
reporting measures with similar names. The following table is a reconciliation of the Corporations
tangible common equity and tangible assets:
Table of Contents
Tangible Common Equity
(In thousands, except per share information)
(In thousands, except per share information)
As of | ||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
2010 | 2010 | 2010 | 2010 | 2009 | ||||||||||||||||
Tangible Equity: |
||||||||||||||||||||
Total equity GAAP |
$ | 1,151,663 | $ | 1,321,979 | $ | 1,438,289 | $ | 1,488,543 | $ | 1,599,063 | ||||||||||
Preferred equity |
(425,009 | ) | (411,876 | ) | (930,830 | ) | (929,660 | ) | (928,508 | ) | ||||||||||
Goodwill |
(28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | ||||||||||
Core deposit intangible |
(14,043 | ) | (14,673 | ) | (15,303 | ) | (15,934 | ) | (16,600 | ) | ||||||||||
Tangible common equity |
$ | 684,513 | $ | 867,332 | $ | 464,058 | $ | 514,851 | $ | 625,857 | ||||||||||
Tangible Assets: |
||||||||||||||||||||
Total assets GAAP |
$ | 15,686,781 | $ | 16,678,879 | $ | 18,116,023 | $ | 18,850,964 | $ | 19,628,448 | ||||||||||
Goodwill |
(28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | ||||||||||
Core deposit intangible |
(14,043 | ) | (14,673 | ) | (15,303 | ) | (15,934 | ) | (16,600 | ) | ||||||||||
Tangible assets |
$ | 15,644,640 | $ | 16,636,108 | $ | 18,072,622 | $ | 18,806,932 | $ | 19,583,750 | ||||||||||
Common shares outstanding |
21,304 | 21,304 | 6,169 | 6,169 | 6,169 | |||||||||||||||
Tangible common equity ratio |
4.38 | % | 5.21 | % | 2.57 | % | 2.74 | % | 3.20 | % | ||||||||||
Tangible book value per common share |
$ | 32.13 | $ | 40.71 | $ | 75.22 | $ | 83.45 | $ | 101.44 |
The Tier 1 common equity to risk-weighted assets ratio is calculated by dividing (a) tier 1
capital less non-common elements including qualifying perpetual preferred stock and qualifying
trust preferred securities by (b) risk-weighted assets, which assets are calculated in accordance
with applicable bank regulatory requirements. The Tier 1 common equity ratio is not required by
GAAP or on a recurring basis by applicable bank regulatory requirements. However, this ratio was
used by the Federal Reserve in connection with its stress test administered to the 19 largest U.S.
bank holding companies under the Supervisory Capital Assessment Program, the results of which were
announced on May 7, 2009. Management is currently monitoring this ratio, along with the other
ratios discussed above, in evaluating the Corporations capital levels and believes that, at this
time, the ratio may be of interest to investors.
The following table reconciles stockholders equity (GAAP) to Tier 1 common equity:
Table of Contents
Tier 1 Common Equity to Risk-Weighted Assets
(Dollars in thousands)
(Dollars in thousands)
As of | ||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
2010 | 2010 | 2010 | 2010 | 2009 | ||||||||||||||||
Tier 1 Common Equity: |
||||||||||||||||||||
Total equity GAAP |
$ | 1,151,663 | $ | 1,321,979 | $ | 1,438,289 | $ | 1,488,543 | $ | 1,599,063 | ||||||||||
Qualifying preferred stock |
(425,009 | ) | (411,876 | ) | (930,830 | ) | (929,660 | ) | (928,508 | ) | ||||||||||
Unrealized gain on available-for-sale securities (1) |
(17,718 | ) | (30,295 | ) | (63,311 | ) | (22,948 | ) | (26,617 | ) | ||||||||||
Disallowed deferred tax asset (2) |
(37,515 | ) | (43,552 | ) | (38,078 | ) | (40,522 | ) | (11,827 | ) | ||||||||||
Goodwill |
(28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | ||||||||||
Core deposit intangible |
(14,043 | ) | (14,673 | ) | (15,303 | ) | (15,934 | ) | (16,600 | ) | ||||||||||
Cumulative change gain in fair value of liabilities
accounted for under a fair value option |
(2,185 | ) | (2,654 | ) | (3,170 | ) | (951 | ) | (1,535 | ) | ||||||||||
Other disallowed assets |
(226 | ) | (636 | ) | (66 | ) | (24 | ) | (24 | ) | ||||||||||
Tier 1 common equity |
$ | 626,869 | $ | 790,195 | $ | 359,433 | $ | 450,406 | $ | 585,854 | ||||||||||
Total risk-weighted assets |
$ | 11,613,637 | $ | 11,930,854 | $ | 12,570,330 | $ | 13,402,979 | $ | 14,303,496 | ||||||||||
Tier 1 common equity to risk-weighted assets ratio |
5.40 | % | 6.62 | % | 2.86 | % | 3.36 | % | 4.10 | % |
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 $71 million of the Corporations deferred tax assets at December 31, 2010 (September 30, 2010 $64 million; June 30, 2010 $71 million; March 31, 2010 $69 million; December 31, 2009 $102 million) were included without limitation in regulatory capital pursuant to the risk-based capital guidelines, while approximately $38 million of such assets at December 31, 2010 (September 30, 2010 $44 million; June 30, 2010 $38 million; March 31, 2010 $41 million; December 31, 2009 $12 million) exceeded the limitation imposed by these guidelines and, as disallowed deferred tax assets, were deducted in arriving at Tier 1 capital. According to regulatory capital guidelines, the deferred tax assets that are dependent upon future taxable income are limited for inclusion in Tier 1 capital to the lesser of: (i) the amount of such deferred tax asset that the entity expects to realize within one year of the calendar quarter end-date, based on its projected future taxable income for that year, or (ii) 10% of the amount of the entitys Tier 1 capital. Approximately $6 million of the Corporations other net deferred tax liability at December 31, 2010 (September 30, 2010 $7 million; June 30, 2010 $12 million; March 31, 2010 $5 million; December 31, 2009 $5 million) represented primarily the deferred tax effects of unrealized gains and losses on available-for-sale debt securities, which are permitted to be excluded prior to deriving the amount of net deferred tax assets subject to limitation under the guidelines. |
One non-GAAP performance metric that management believes is useful in analyzing underlying
performance trends, particularly in times of economic stress, is adjusted pre-tax, pre-provision
income. Adjusted pre-tax, pre-provision income, as defined by management, represents net (loss)
income excluding income tax expense (benefit), the provision for loan and lease losses, gains on
sale and OTTI of investment securities, as well as certain items identified as unusual,
non-recurring or non-operating.
From time to time, revenue and expenses are impacted by items judged by management to be outside of
ordinary banking activities and/or by items that, while they may be associated with ordinary
banking activities, are so unusually large that management believes them to be nonrecurring. These
items result from factors originating outside the Corporation such as regulatory
actions/assessments, and may result from unusual management decisions, such as the early
extinguishment of debt.
The following table reconciles (loss) income before income taxes (GAAP) to adjusted pre-tax,
pre-provision income:
Table of Contents
Pre-Tax, Pre-Provision Income
(Dollars in thousands)
(Dollars in thousands)
Quarter Ended | ||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
2010 | 2010 | 2010 | 2010 | 2009 | ||||||||||||||||
Loss before income taxes |
$ | (158,016 | ) | $ | (76,196 | ) | $ | (86,817 | ) | $ | (100,138 | ) | $ | (49,891 | ) | |||||
Add: Provision for loan and lease losses |
196,347 | 120,482 | 146,793 | 170,965 | 137,187 | |||||||||||||||
Less: Net loss (gain) on sale and OTTI of investment securities |
620 | (48,281 | ) | (24,237 | ) | (30,764 | ) | (24,387 | ) | |||||||||||
Add: Loss on early extinguishment of repurchase agreements |
| 47,405 | | | | |||||||||||||||
Adjusted Pre-tax, pre-provision income |
$ | 38,951 | $ | 43,410 | $ | 35,739 | $ | 40,063 | $ | 62,909 | ||||||||||
Change from most recent prior quarter amount |
$ | (4,459 | ) | $ | 7,671 | $ | (4,324 | ) | $ | (22,846 | ) | $ | 629 | |||||||
Change from most recent prior quarter percent |
-10.3 | % | 21.5 | % | -10.8 | % | -36.3 | % | 1.0 | % |
To supplement the Corporations financial statements presented in accordance with GAAP, the
Corporation provides additional measures of net income (loss), net income (loss) per diluted share,
provision for loan and lease losses, provision for loan and lease losses to net charge-offs, net
charge-offs, and net charge-offs to average loans to exclude the impact of the transfer of $447
million of loans to held for sale. In connection with the transfer, the Corporation charged-off
$165.1 million and recognized an additional provision for loan and lease losses of $102.9 million.
Further, the net income (loss) per diluted share for the year ended December 31, 2010 also was
measured excluding the one-time favorable impact in retained earnings of $440.5 million resulting
from the issuance of common stock in exchange for Series A through E preferred stock and from the
issuance of the Series G preferred stock and amended warrant in exchange for Series F preferred
stock (exchange transactions) completed in the third quarter of 2010. Management believes that
these non-GAAP measures enhance the ability of analysts and investors to analyze trends in the
Corporations business and to better understand the performance of the Corporation. In addition,
the Corporation may utilize these non-GAAP financial measures as a guide in its budgeting and
long-term planning process. Any analysis of these non-GAAP financial measures should be used only
in conjunction with results presented in accordance with GAAP. A reconciliation of these non-GAAP
measures with the most directly comparable financial measures calculated in accordance with GAAP
follows:
Net Loss and Loss per share (Non-GAAP to GAAP reconciliation) | ||||||||||||||||||||||||
Quarter ended | Year ended | |||||||||||||||||||||||
December 31, 2010 | December 31, 2010 | |||||||||||||||||||||||
Net Loss attributable | Net Loss attributable | |||||||||||||||||||||||
(In thousands, except per share information) | Net Loss | to common stockholders (diluted)(3) | Per Share (diluted) | Net Loss | to common stockholders (diluted)(3) | Per Share (diluted) | ||||||||||||||||||
Net loss, net loss attributable to common stockholders and loss per share, excluding
special items (Non-GAAP) |
$ | (54,794 | ) | $ | (73,229 | ) | $ | (3.44 | ) | $ | (327,666 | ) | $ | (365,912 | ) | $ | (32.35 | ) | ||||||
Special items: |
||||||||||||||||||||||||
Loan sale transaction (1) |
(102,938 | ) | (102,938 | ) | (4.83 | ) | (102,938 | ) | (102,938 | ) | (9.10 | ) | ||||||||||||
Exchange transactions (2) |
| | | | 440,509 | 38.94 | ||||||||||||||||||
Net Income (loss) and earnings (loss) per share (GAAP) |
$ | (157,732 | ) | $ | (176,167 | ) | $ | (8.27 | ) | $ | (430,604 | ) | $ | (28,341 | ) | $ | (2.51 | ) | ||||||
1- | In the fourth quarter 2010, the Corporation recorded a charge of $102.9 million to the provision for loan and lease losses associated with $447 million of loans transferred to held for sale. | |
2- | In the third quarter of 2010, the Corporation recorded a one-time favorable impact to retained earnings of $385.4 million that represents the excess of the carrying amount of Series A through E preferred stock exchanged over the fair value of new common shares issued and of $55.1 million that represents the excess of the carrying amount of Series F preferred stock exchanged and original warrant over the fair value of new Series G preferred stock issued and amended warrant. | |
3- | The difference between the net loss and the net loss attributable to common stockholders consists of: (1) cumulative convertible preferred stock dividends of $5.3 million and $21.1 million for the quarter and year ended December 31, 2010, respectively, (ii) the accretion of the preferred stock discount of $13.1 million and $17.1 million for the quarter and year ended December 31, 2010, respectively, including an adjustment of $11.3 million recorded in the fourth quarter of 2010 as an acceleration of the Series G preferred stock discount accretion resulting from an amendment to the exchange agreement with the U.S. Treasury, and (iii) the aforementioned favorable impact to retained earnings of $440 million resulting from the exchange transactions completed in the third quarter of 2010. |
Table of Contents
Provision for Loan and Lease Losses, Net Charge-Offs, Provision for Loans and | ||||||||||||||||
Lease Losses to Net Charge-Offs, and Net Charge-Offs to Average Loans (Non- | ||||||||||||||||
GAAP to GAAP reconciliation) | ||||||||||||||||
Quarter ended | Year ended | |||||||||||||||
December 31, 2010 | December 31, 2010 | |||||||||||||||
Provision for Loan | Provision for Loan | |||||||||||||||
(In thousands, except per share information) | and Lease Losses | Net Charge-Offs | and Lease Losses | Net Charge-Offs | ||||||||||||
Provision for loan and lease losses, net charge-offs,
and average loans, excluding
special items (Non-GAAP) |
$ | 93,409 | $ | 86,791 | $ | 531,649 | $ | 444,625 | ||||||||
Special items: |
||||||||||||||||
Loan sale transaction (1) |
102,938 | 165,057 | 102,938 | 165,057 | ||||||||||||
Provision for loan and lease losses, net charge-offs and average loans (GAAP) |
$ | 196,347 | $ | 251,848 | $ | 634,587 | $ | 609,682 | ||||||||
Provision for loan and lease losses to net charge-offs, excluding special items (Non-GAAP) |
107.63 | % | 119.57 | % | ||||||||||||
Provision for loan and lease losses to net charge-offs (GAAP) |
77.96 | % | 104.08 | % | ||||||||||||
Net charge-offs to average loans, excluding special items (Non-GAAP) |
2.96 | % | 3.60 | % | ||||||||||||
Net charge-offs to average loans (GAAP) |
8.27 | % | 4.76 | % | ||||||||||||
1- | In the fourth quarter 2010, the Corporation recorded a charge of $102.9 million to the provision for loan and lease losses and charge-offs of $165.1 million associated with $447 million of loans transferred to held for sale. |
Item 8.01 Other Events.
On February 9, 2011, the Corporation announced that, pursuant to the non-binding letter of intent
announced on December 7, 2010, it has entered into a definitive agreement to sell a loan portfolio
with an unpaid principal balance of $516.7 million and a net book value of $438.5 million, before
the charge-off taken to properly record the loan pool as held for sale as of December 31, 2010.
Such loan portfolio is 94% adversely classified. A copy of the press release is attached hereto as
Exhibit 99.2 and is hereby incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. | Description | |
99.1
|
Press Release dated February 9, 2011 First BanCorp Reports Financial Results for the Fourth Quarter and Year Ended December 31, 2010 | |
99.2
|
Press Release dated February 9, 2011 First BanCorp Announces Loan sale |
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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.
Date: February 15, 2011 | FIRST BANCORP |
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By: | /s/ Orlando Berges | |||
Name: | Orlando Berges | |||
Title: | Executive Vice President and Chief Financial Officer |
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