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8-K - FORM 8-K - FIRST BANCORP /PR/ | g26118e8vk.htm |
EX-99.2 - EX-99.2 - FIRST BANCORP /PR/ | g26118exv99w2.htm |
News Release | ||
December 31, 2010
| Transfer of $447 million of loans, including $263 million of non-performing 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. On February 8, 2011, the Corporation entered into a definitive agreement to sell substantially all of these loans. | ||
| Credit quality metrics: |
- | Non-performing loans held for investment decreased $267.0 million, or 18%, compared to the third quarter of 2010. | ||
- | Provision for loan and lease losses of $196.3 million, including the $102.9 million associated with loans transferred to held for sale. Excluding the impact of loans transferred to held for sale, the provision decreased to $93.4 million, down from $120.5 million for the third quarter of 2010. | ||
- | Net charge-offs of $251.8 million, including net charge-offs of $165.1 million related to loans transferred to held for sale. Excluding the impact of loans transferred to held for sale, net charge-offs were $86.8 million, or an annualized 2.96% of average loans, down 25% from $116.3 million, or an annualized 3.74%, in the third quarter of 2010. |
| Improvement in core operating metrics: |
- | Net interest margin improved by 10 basis points, primarily related to lower funding costs. | ||
- | Total core deposits, which exclude brokered deposits and public funds, increased 2%, or $90.6 million, compared to the previous quarter-ending balances. | ||
- | Non-interest expenses declined $1.2 million compared to the previous quarter. |
| Capital plan activities: |
- | Exchange agreement with the United States Department of the Treasury (U.S. Treasury) amended to reduce from $500 million to $350 million the size of the capital raise required to satisfy the remaining substantive condition to compel the conversion of the Series G mandatorily convertible preferred stock into shares of common stock. | ||
- | Tier 1, Total capital and leverage ratios were 11.00%, 12.29% and 7.94%, respectively, down from 11.96%, 13.26% and 8.34%, respectively, for the third quarter of 2010. | ||
- | 4.38% tangible common equity and 5.40% Tier 1 common risk-based capital ratio, down from 5.21% and 6.62%, respectively, for the third quarter of 2010. | ||
- | A 1-for-15 reverse stock split on common stock was implemented effective January 7, 2011. |
| Balance sheet deleverage: |
- | Total assets decreased $992.1 million, or 6%, compared to September 30, 2010, as a portion of the proceeds from repayments of mortgage-backed securities and loans, as well as excess liquidity, was used to pay down maturing brokered certificates of deposit (CDs) and advances from FHLB not renewed. | ||
- | Brokered CDs decreased by $429.1 million, or 6%, from September 30, 2010. |
First BanCorp Reports Financial Results for the Quarter and Year Ended December 31, 2010 Page 2 of 36
First BanCorp Reports Financial Results for the Quarter and Year Ended December 31, 2010 Page 3 of 36
Quarter Ended | Year Ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
(In thousands, except per share information) | 2010 | 2010 | 2009 | 2010 | 2009 | |||||||||||||||
Net loss |
$ | (157,732 | ) | $ | (75,233 | ) | $ | (53,202 | ) | $ | (430,604 | ) | $ | (275,187 | ) | |||||
Non-cumulative preferred stock dividends (Series A through E) |
| | | | (23,494 | ) | ||||||||||||||
Cumulative non-convertible preferred stock dividends (Series F) |
| (1,618 | ) | (5,000 | ) | (11,618 | ) | (19,167 | ) | |||||||||||
Cumulative convertible preferred stock dividend (Series G) |
(5,302 | ) | (4,183 | ) | | (9,485 | ) | | ||||||||||||
Preferred stock discount accretion (Series F and G) (1) |
(13,133 | ) | (1,688 | ) | (1,132 | ) | (17,143 | ) | (4,227 | ) | ||||||||||
Favorable impact from issuing common stock
in exchange for Series A through E preferred stock,
net of issuance costs (2) |
| 385,387 | | 385,387 | | |||||||||||||||
Favorable impact from issuing Series G
mandatorily convertible preferred stock in exchange
for Series F preferred stock (3) |
| 55,122 | | 55,122 | | |||||||||||||||
Net (loss) income available to common
stockholders basic |
$ | (176,167 | ) | $ | 357,787 | $ | (59,334 | ) | $ | (28,341 | ) | $ | (322,075 | ) | ||||||
Convertible preferred stock dividends and accretion |
| 5,626 | | | | |||||||||||||||
Net (loss) income available to common
stockholders diluted |
$ | (176,167 | ) | $ | 363,413 | $ | (59,334 | ) | $ | (28,341 | ) | $ | (322,075 | ) | ||||||
Average common shares outstanding (4) |
21,303 | 11,432 | 6,168 | 11,310 | 6,167 | |||||||||||||||
Average potential common shares (4) (5) |
| 75,119 | | | | |||||||||||||||
Average common shares outstanding
assuming dilution (4) |
21,303 | 86,552 | 6,168 | 11,310 | 6,167 | |||||||||||||||
Basic (loss) earnings per common share (4) |
$ | (8.27 | ) | $ | 31.30 | $ | (9.62 | ) | $ | (2.51 | ) | $ | (52.22 | ) | ||||||
Diluted (loss) earnings per common share (4) |
$ | (8.27 | ) (6) | $ | 4.20 | $ | (9.62 | ) | $ | (2.51 | ) (7) | $ | (52.22 | ) | ||||||
(1) | Includes a non-cash adjustment of $11.3 million for the fourth quarter and year ended December 31,2010 as an acceleration of the Series G preferred stock discount accretion pursuant to an amendment to the exchange agreement with the U.S. Treasury. | |
(2) | Excess of carrying amount of Series A through E preferred stock exchanged over the fair value of new common shares issued. | |
(3) | Excess of 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. | |
(4) | All share and per share data have been adjusted to retroactively reflect the 1-for-15 reverse stock split effected January 7, 2011. | |
(5) | Assumes conversion of the Series G convertible preferred stock based on the most advantegeous conversion rate from the standpoint of the security holder. | |
(6) | For the quarter ended December 31, 2010, the diluted (loss) per share, excluding the $102.9 million charge associated with loans transferred to held for sale, was ($3.44). | |
(7) | For the year ended December 31, 2010, the diluted (loss) per share, excluding the $102.9 million charge associated with loans transferred to held for sale and excluding the one-time favorable impact of $440.5 million from issuing common stock in exchange for Series A through E preferred stock and from issuing the Series G preferred stock and amended warrant in exchange for Series F preferred stock, was ($32.35). |
First BanCorp Reports Financial Results for the Quarter and Year Ended December 31, 2010 Page 4 of 36
Quarter Ended | ||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
2010 | 2010 | 2010 | 2010 | 2009 | ||||||||||||||||
Earnings (in thousands) |
||||||||||||||||||||
Net loss |
$ | (157,732 | ) | $ | (75,233 | ) | $ | (90,640 | ) | $ | (106,999 | ) | $ | (53,202 | ) | |||||
Net (loss) income available to common stockholders basic |
$ | (176,167 | ) | $ | 357,787 | $ | (96,810 | ) | $ | (113,151 | ) | $ | (59,334 | ) | ||||||
Net (loss) income available to common stockholders diluted |
$ | (176,167 | ) | $ | 363,413 | $ | (96,810 | ) | $ | (113,151 | ) | $ | (59,334 | ) | ||||||
Adjusted Pre-Tax, Pre-Provision Income (1) |
$ | 38,951 | $ | 43,410 | $ | 35,739 | $ | 40,063 | $ | 62,909 | ||||||||||
Common share data (2) |
||||||||||||||||||||
(Loss) earnings per common share basic |
$ | (8.27 | ) | $ | 31.30 | $ | (15.70 | ) | $ | (18.34 | ) | $ | (9.62 | ) | ||||||
(Loss) earnings per common share diluted |
$ | (8.27 | ) | $ | 4.20 | $ | (15.70 | ) | $ | (18.34 | ) | $ | (9.62 | ) | ||||||
Financial ratios |
||||||||||||||||||||
Return on average assets |
-3.86 | % | -1.73 | % | -1.94 | % | -2.25 | % | -1.08 | % | ||||||||||
Return on average common equity |
-78.61 | % | -50.80 | % | -70.31 | % | -68.06 | % | -30.54 | % | ||||||||||
Tier 1 capital |
11.00 | % | 11.96 | % | 12.05 | % | 11.98 | % | 12.16 | % | ||||||||||
Total capital |
12.29 | % | 13.26 | % | 13.35 | % | 13.26 | % | 13.44 | % | ||||||||||
Leverage |
7.94 | % | 8.34 | % | 8.14 | % | 8.37 | % | 8.91 | % | ||||||||||
Tangible common equity (3) |
4.38 | % | 5.21 | % | 2.57 | % | 2.74 | % | 3.20 | % | ||||||||||
Tier 1 common equity to risk-weight assets (3) |
5.40 | % | 6.62 | % | 2.86 | % | 3.36 | % | 4.10 | % | ||||||||||
Net interest margin (4) |
2.88 | % | 2.83 | % | 2.66 | % | 2.73 | % | 3.03 | % | ||||||||||
Efficiency |
69.54 | % | 66.69 | % | 62.18 | % | 56.33 | % | 50.43 | % | ||||||||||
Common shares outstanding (2) |
21,303,669 | 21,303,669 | 6,169,455 | 6,169,455 | 6,169,455 | |||||||||||||||
Average common shares outstanding (2) |
||||||||||||||||||||
Basic |
21,302,672 | 11,432,204 | 6,168,083 | 6,168,083 | 6,167,608 | |||||||||||||||
Diluted |
21,302,672 | 86,551,688 | 6,168,083 | 6,168,083 | 6,167,608 |
(1) | Non-GAAP measure, see Adjusted Pre-Tax, Pre-Provision Trends and Basis of Presentation sections below for additional information. | |
(2) | All share and per share data have been adjusted to retroactively reflect the 1-for-15 reverse stock split effected January 7, 2011. | |
(3) | Non-GAAP measures, see Tangible Common Equity and Basis of Presentation sections below for additional information. | |
(4) | On a tax-equivalent basis. See Net interest income section below and Exhibit A (Tables 2 and 3) for additional information about this non-gaap measure. |
First BanCorp Reports Financial Results for the Quarter and Year Ended December 31, 2010 Page 5 of 36
Excluding | ||||||||||||
As | Loan Sale | Loan Sale | ||||||||||
2010 Fourth Quarter | Reported | Transaction Impact | Transaction Impact | |||||||||
Total loans held for investment December 31, 2010 |
$ | 11,655,436 | $ | (446,675 | ) | $ | 12,102,111 | |||||
Construction loans |
700,579 | (334,220 | ) | 1,034,799 | ||||||||
Commercial mortgage |
1,670,161 | (83,211 | ) | 1,753,372 | ||||||||
Commercial and Industrial |
4,151,764 | (29,244 | ) | 4,181,008 | ||||||||
Total net charge-offs (1) |
$ | 251,848 | $ | 165,057 | $ | 86,791 | ||||||
Total net charge-offs to average loans |
8.27 | % | 2.96 | % | ||||||||
Construction loans |
158,311 | 126,950 | 31,361 | |||||||||
Construction loans net charge-offs to average loans |
57.61 | % | 16.40 | % | ||||||||
Commercial mortgage |
32,829 | 29,506 | 3,323 | |||||||||
Commercial mortgage loans net charge-offs to average loans |
7.56 | % | 0.80 | % | ||||||||
Commercial and Industrial |
28,752 | 8,601 | 20,151 | |||||||||
Commercial and Industrial loans net charge-offs to average loans |
2.73 | % | 1.93 | % | ||||||||
Loans held for sale December 31, 2010 |
$ | 300,766 | $ | 281,618 | $ | 19,148 | (2) | |||||
Construction loans |
207,270 | 207,270 | | |||||||||
Commercial mortgage |
53,705 | 53,705 | | |||||||||
Commercial and Industrial |
20,643 | 20,643 | | |||||||||
Provision for loans and lease losses |
$ | 196,347 | $ | 102,938 | $ | 93,409 | ||||||
Net loss |
$ | (157,732 | ) | $ | (102,938 | ) | $ | (54,794 | ) | |||
Net loss per common share |
$ | (8.27 | ) | $ | (4.83 | ) | $ | (3.44 | ) | |||
Non-performing loans December 31, 2010 |
$ | 1,398,310 | $ | (103,883) | (3) | $ | 1,502,193 |
1 | - | Charge-off percentages annualized |
2 | - | Consists of certain conforming residential mortgage loans held for sale in the ordinary course of business. |
3 | - | Represents charge-offs associated with non-perfroming loans transferred to held for sale. |
First BanCorp Reports Financial Results for the Quarter and Year Ended December 31, 2010 Page 6 of 36
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 (1) |
$ | 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 | % |
(1) | See Basis of Presentation for definition |
First BanCorp Reports Financial Results for the Quarter and Year Ended December 31, 2010 Page 7 of 36
Quarter Ended | ||||||||||||||||||||
December 31, 2010 | September 30, 2010 | June 30, 2010 | March 31, 2010 | December 31, 2009 | ||||||||||||||||
Net Interest Income (in thousands) |
||||||||||||||||||||
Interest Income GAAP |
$ | 192,806 | $ | 204,028 | $ | 214,864 | $ | 220,988 | $ | 243,449 | ||||||||||
Unrealized (gain) loss on
derivative instruments |
(903 | ) | 938 | 487 | 744 | (2,764 | ) | |||||||||||||
Interest income excluding valuations |
191,903 | 204,966 | 215,351 | 221,732 | 240,685 | |||||||||||||||
Tax-equivalent adjustment |
4,494 | 6,778 | 7,222 | 9,912 | 12,311 | |||||||||||||||
Interest income on a tax-equivalent basis excluding valuations |
196,397 | 211,744 | 222,573 | 231,644 | 252,996 | |||||||||||||||
Interest Expense GAAP |
80,758 | 90,326 | 95,802 | 104,125 | 106,152 | |||||||||||||||
Unrealized (loss) gain on
derivative instruments and liabilities measured at fair value |
(813 | ) | (526 | ) | 3,896 | (989 | ) | (247 | ) | |||||||||||
Interest expense excluding valuations |
79,945 | 89,800 | 99,698 | 103,136 | 105,905 | |||||||||||||||
Net interest income GAAP |
$ | 112,048 | $ | 113,702 | $ | 119,062 | $ | 116,863 | $ | 137,297 | ||||||||||
Net interest income excluding valuations |
$ | 111,958 | $ | 115,166 | $ | 115,653 | $ | 118,596 | $ | 134,780 | ||||||||||
Net interest income on a tax-equivalent basis excluding valuations |
$ | 116,452 | $ | 121,944 | $ | 122,875 | $ | 128,508 | $ | 147,091 | ||||||||||
Average Balances (in thousands) |
||||||||||||||||||||
Loans and leases |
$ | 12,185,511 | $ | 12,443,055 | $ | 13,025,808 | $ | 13,569,467 | $ | 13,777,928 | ||||||||||
Total securities and other short-term investments |
3,863,532 | 4,640,055 | 5,485,934 | 5,526,589 | 5,505,527 | |||||||||||||||
Average Interest-Earning Assets |
$ | 16,049,043 | $ | 17,083,110 | $ | 18,511,742 | $ | 19,096,056 | $ | 19,283,455 | ||||||||||
Average Interest-Bearing Liabilities |
$ | 14,036,776 | $ | 15,002,168 | $ | 16,378,022 | $ | 16,910,781 | $ | 17,112,556 | ||||||||||
Average Yield/Rate |
||||||||||||||||||||
Average yield on interest-earning assets GAAP |
4.77 | % | 4.74 | % | 4.66 | % | 4.69 | % | 5.01 | % | ||||||||||
Average rate on interest-bearing liabilities GAAP |
2.28 | % | 2.39 | % | 2.35 | % | 2.50 | % | 2.46 | % | ||||||||||
Net interest spread GAAP |
2.49 | % | 2.35 | % | 2.31 | % | 2.19 | % | 2.55 | % | ||||||||||
Net interest margin GAAP |
2.77 | % | 2.64 | % | 2.58 | % | 2.48 | % | 2.82 | % | ||||||||||
Average yield on interest-earning assets excluding valuations |
4.74 | % | 4.76 | % | 4.66 | % | 4.71 | % | 4.95 | % | ||||||||||
Average rate on interest-bearing liabilities excluding valuations |
2.26 | % | 2.37 | % | 2.44 | % | 2.47 | % | 2.46 | % | ||||||||||
Net interest spread excluding valuations |
2.48 | % | 2.39 | % | 2.22 | % | 2.24 | % | 2.49 | % | ||||||||||
Net interest margin excluding valuations |
2.77 | % | 2.67 | % | 2.51 | % | 2.52 | % | 2.77 | % | ||||||||||
Average yield on interest-earning assets on a tax-equivalent basis and excluding valuations |
4.86 | % | 4.92 | % | 4.82 | % | 4.92 | % | 5.21 | % | ||||||||||
Average rate on interest-bearing liabilities excluding valuations |
2.26 | % | 2.37 | % | 2.44 | % | 2.47 | % | 2.46 | % | ||||||||||
Net interest spread on a tax-equivalent basis and excluding valuations |
2.60 | % | 2.55 | % | 2.38 | % | 2.45 | % | 2.75 | % | ||||||||||
Net interest margin on a tax-equivalent basis and excluding valuations |
2.88 | % | 2.83 | % | 2.66 | % | 2.73 | % | 3.03 | % | ||||||||||
| $776.5 million, or 17% decrease, in average investment securities and other short term investments, including the full effect of the $1.2 billion sale of mortgage-backed securities (MBS) completed in the middle of the third quarter, and | ||
| $257.5 million, or 2% decrease, in average total loans and leases, mainly resulting from a combination of charge-offs and sales of loans. |
First BanCorp Reports Financial Results for the Quarter and Year Ended December 31, 2010 Page 8 of 36
First BanCorp Reports Financial Results for the Quarter and Year Ended December 31, 2010 Page 9 of 36
Quarter Ended | ||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
(In thousands) | 2010 | 2010 | 2010 | 2010 | 2009 | |||||||||||||||
Other service charges on loans |
$ | 2,019 | $ | 1,963 | $ | 1,486 | $ | 1,756 | $ | 1,982 | ||||||||||
Service charges on deposit accounts |
3,125 | 3,325 | 3,501 | 3,468 | 3,357 | |||||||||||||||
Mortgage banking activities |
2,501 | 6,474 | 2,140 | 2,500 | 2,426 | |||||||||||||||
(Loss) gain on sale of investments and impairments |
(620 | ) | 48,281 | 24,237 | 30,764 | 24,387 | ||||||||||||||
Broker-dealer income |
121 | 501 | 1,347 | 207 | 61 | |||||||||||||||
Other operating income |
6,640 | 6,127 | 6,814 | 6,631 | 6,594 | |||||||||||||||
Loss on early extinguishment of repurchase agreements |
| (47,405 | ) | | | | ||||||||||||||
Non-interest income |
$ | 13,786 | $ | 19,266 | $ | 39,525 | $ | 45,326 | $ | 38,807 | ||||||||||
- | A $4.0 million, or 61%, decrease in mortgage banking income as the prior quarter included a $4.7 million gain (including the recognition of servicing rights) on the bulk sale of $83 million of residential mortgage loans. | ||
- | A $0.6 million other-than-temporary impairment charge related to the credit loss portion of private label MBS. | ||
- | A $0.4 million decrease in broker-dealer commissions. |
Quarter Ended | ||||||||||||||||||||
December, 31 | September, 30 | June 30, | March 31, | December 31, | ||||||||||||||||
(In thousands) | 2010 | 2010 | 2010 | 2010 | 2009 | |||||||||||||||
Employees compensation and benefits |
$ | 28,591 | $ | 29,849 | $ | 30,958 | $ | 31,728 | $ | 29,617 | ||||||||||
Occupancy and equipment |
15,537 | 14,655 | 14,451 | 14,851 | 14,822 | |||||||||||||||
Deposit insurance premium |
13,568 | 14,702 | 15,369 | 16,653 | 13,923 | |||||||||||||||
Other taxes, insurance and supervisory fees |
5,069 | 5,401 | 5,054 | 5,686 | 5,127 | |||||||||||||||
Professional fees |
5,863 | 4,533 | 5,604 | 5,287 | 4,883 | |||||||||||||||
Business promotion |
3,561 | 3,226 | 3,340 | 2,205 | 4,327 | |||||||||||||||
Net loss on REO operations |
7,471 | 8,193 | 10,816 | 3,693 | 4,847 | |||||||||||||||
Other |
7,843 | 8,123 | 13,019 | 11,259 | 11,262 | |||||||||||||||
Total |
$ | 87,503 | $ | 88,682 | $ | 98,611 | $ | 91,362 | $ | 88,808 | ||||||||||
| A $1.3 million decrease in employee compensation and benefit expenses, reflecting further reductions in headcount which decreased by approximately 87, or 3%, over the last two quarters, and further reductions in bonuses and incentive-based compensation. | ||
| A $1.1 million decrease in the federal deposit insurance premium, mainly related to a lower average volume of brokered CDs. | ||
| A $0.7 million decrease in losses on real estate owned (REO) operations, mainly due to lower write-downs to the value of repossessed residential and commercial properties. |
First BanCorp Reports Financial Results for the Quarter and Year Ended December 31, 2010 Page 10 of 36
| A $0.7 million decrease in other expenses associated with the settlement of a lawsuit in the previous quarter and a decrease in sundry losses provision. |
| A $1.3 million increase in professional service fees mainly related to higher legal expenses. | ||
| A $0.9 million increase in occupancy and equipment costs, primarily reflecting higher depreciation expenses associated with the new service center building, as well as higher maintenance costs that offset reductions in rental expense. | ||
| A $0.3 million increase in business promotion expenses, reflecting increases in branding and product advertising activities. |
First BanCorp Reports Financial Results for the Quarter and Year Ended December 31, 2010 Page 11 of 36
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
(Dollars in thousands) | 2010 | 2010 | 2010 | 2010 | 2009 | |||||||||||||||
Non-performing loans held for investment: |
||||||||||||||||||||
Residential mortgage |
$ | 392,134 | $ | 427,574 | $ | 448,079 | $ | 446,676 | $ | 441,642 | ||||||||||
Commercial mortgage |
217,165 | 173,350 | 200,033 | 230,468 | 196,535 | |||||||||||||||
Commercial and Industrial |
317,243 | 293,323 | 233,201 | 228,113 | 241,316 | |||||||||||||||
Construction |
263,056 | 558,148 | 621,387 | 685,415 | 634,329 | |||||||||||||||
Consumer and Finance leases |
49,391 | 53,608 | 47,965 | 48,672 | 50,041 | |||||||||||||||
Total non-performing loans held for investment |
1,238,989 | 1,506,003 | 1,550,665 | 1,639,344 | 1,563,863 | |||||||||||||||
REO |
84,897 | 82,706 | 72,358 | 73,444 | 69,304 | |||||||||||||||
Other repossessed property |
14,023 | 15,824 | 13,383 | 12,464 | 12,898 | |||||||||||||||
Investment securities (1) |
64,543 | 64,543 | 64,543 | 64,543 | 64,543 | |||||||||||||||
Total non-performing assets, excluding loans held for sale |
$ | 1,402,452 | $ | 1,669,076 | $ | 1,700,949 | $ | 1,789,795 | $ | 1,710,608 | ||||||||||
Non-performing loans held for sale |
159,321 | | | | | |||||||||||||||
Total non-performing assets, including loans held for sale |
$ | 1,561,773 | $ | 1,669,076 | $ | 1,700,949 | $ | 1,789,795 | $ | 1,710,608 | ||||||||||
Past due loans 90 days and still accruing |
$ | 144,114 | $ | 139,795 | $ | 187,659 | $ | 189,647 | $ | 165,936 | ||||||||||
Non-performing loans held for investment to total loans held for investment |
10.63 | % | 12.36 | % | 12.40 | % | 12.35 | % | 11.23 | % | ||||||||||
Non-performing assets, excluding loans held for sale,
to total assets, excluding non-performing loans transferred to held for sale |
9.03 | % | 10.01 | % | 9.39 | % | 9.49 | % | 8.71 | % | ||||||||||
Non-performing assets to total assets |
9.96 | % | 10.01 | % | 9.39 | % | 9.49 | % | 8.71 | % |
(1) | Collateral pledged with Lehman Brothers Special Financing, Inc. |
First BanCorp Reports Financial Results for the Quarter and Year Ended December 31, 2010 Page 12 of 36
First BanCorp Reports Financial Results for the Quarter and Year Ended December 31, 2010 Page 13 of 36
Quarter Ended | ||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
(Dollars in thousands) | 2010 | 2010 | 2010 | 2010 | 2009 | |||||||||||||||
Allowance for loan and lease losses, beginning of period |
$ | 608,526 | $ | 604,304 | $ | 575,303 | $ | 528,120 | $ | 471,484 | ||||||||||
Provision (recovery) for loan and lease losses: |
||||||||||||||||||||
Residential mortgage |
13,875 | 19,961 | 31,307 | 28,739 | 8,206 | |||||||||||||||
Commercial mortgage |
35,120 | (1) | 11,546 | 22,759 | 37,560 | 24,906 | ||||||||||||||
Commercial and Industrial |
(334 | ) (2) | 27,280 | 41,525 | (7,685 | ) | 25,503 | |||||||||||||
Construction |
133,230 | (3) | 48,451 | 40,398 | 99,300 | 64,196 | ||||||||||||||
Consumer and finance leases |
14,456 | 13,244 | 10,804 | 13,051 | 14,376 | |||||||||||||||
Total provision for loan and lease losses |
196,347 | 120,482 | 146,793 | 170,965 | 137,187 | |||||||||||||||
Loans net charge-offs: |
||||||||||||||||||||
Residential mortgage |
(18,644 | ) | (13,109 | ) | (17,619 | ) | (13,346 | ) | (7,488 | ) | ||||||||||
Commercial mortgage |
(32,829 | ) (4) | (11,455 | ) | (17,839 | ) | (19,297 | ) | (5,221 | ) | ||||||||||
Commercial and Industrial |
(28,752 | ) (5) | (19,926 | ) | (26,019 | ) | (23,776 | ) | (7,739 | ) | ||||||||||
Construction |
(158,311 | ) (6) | (58,423 | ) | (43,204 | ) | (53,215 | ) | (44,906 | ) | ||||||||||
Consumer and finance leases |
(13,312 | ) | (13,347 | ) | (13,111 | ) | (14,148 | ) | (15,197 | ) | ||||||||||
Net charge-offs |
(251,848 | ) | (116,260 | ) | (117,792 | ) | (123,782 | ) | (80,551 | ) | ||||||||||
Allowance for loan and lease losses, end of period |
$ | 553,025 | $ | 608,526 | $ | 604,304 | $ | 575,303 | $ | 528,120 | ||||||||||
Allowance for loan and lease losses to period end total loans receivable |
4.74 | % | 5.00 | % | 4.83 | % | 4.33 | % | 3.79 | % | ||||||||||
Net charge-offs (annualized) to average loans outstanding during the period |
8.27 | % | 3.74 | % | 3.62 | % | 3.65 | % | 2.34 | % | ||||||||||
Net charge-offs (annualized), excluding charge-offs related to loans transferred
to held for sale, to average loans outstanding during the period |
2.96 | % | 3.74 | % | 3.62 | % | 3.65 | % | 2.34 | % | ||||||||||
Provision for loan and lease losses to net charge-offs during the period |
0.78 | x | 1.04 | x | 1.25 | x | 1.38 | x | 1.70 | x | ||||||||||
Provision for loan and lease losses to net charge-offs during the period, excluding
impact of loans transferred to held for sale |
1.08 | x | 1.04 | x | 1.25 | x | 1.38 | x | 1.70 | x |
(1) | Includes provision of $11.3 million associated with loans transferred to held for sale. | |
(2) | Includes provision of $8.6 million associated with loans transferred to held for sale. | |
(3) | Includes provision of $83.0 million associated with loans transferred to held for sale. | |
(4) | Includes net charge-offs totaling $29.5 million associated with loans transferred to held for sale. | |
(5) | Includes net charge-offs totaling $8.6 million associated with loans transferred to held for sale. | |
(6) | Includes net charge-offs totaling $127.0 million associated with loans transferred to held for sale. |
Residential | Commercial | Construction | Consumer and | |||||||||||||||||||||
(Dollars in thousands) | Mortgage Loans | Mortgage Loans | C&I Loans | Loans | Finance Leases | Total | ||||||||||||||||||
As of December 31, 2010 |
||||||||||||||||||||||||
Non-performing loans held for investment charged-off to realizable value |
$ | 281,807 | $ | 20,239 | $ | 101,151 | $ | 32,139 | $ | 2,916 | $ | 438,252 | ||||||||||||
Other non-performing loans held for investment |
110,327 | 196,926 | 216,092 | 230,917 | 46,475 | 800,737 | ||||||||||||||||||
Total non-performing loans held for investment |
$ | 392,134 | $ | 217,165 | $ | 317,243 | $ | 263,056 | $ | 49,391 | $ | 1,238,989 | ||||||||||||
Allowance to non-performing loans held for investment |
15.90 | % | 48.62 | % | 48.11 | % | 57.77 | % | 162.96 | % | 44.64 | % | ||||||||||||
Allowance to non-performing loans held for investment,
excluding non-performing loans charged-off to realizable value |
56.50 | % | 53.62 | % | 70.64 | % | 65.81 | % | 173.18 | % | 69.06 | % | ||||||||||||
As of September 30, 2010 |
||||||||||||||||||||||||
Non-performing loans held for investment charged-off to realizable value |
$ | 307,398 | $ | 34,028 | $ | 101,473 | $ | 129,814 | $ | | $ | 572,713 | ||||||||||||
Other non-performing loans held for investment |
120,176 | 139,322 | 191,850 | 428,334 | 53,608 | 933,290 | ||||||||||||||||||
Total non-performing loans held for investment |
$ | 427,574 | $ | 173,350 | $ | 293,323 | $ | 558,148 | $ | 53,608 | $ | 1,506,003 | ||||||||||||
Allowance to non-performing loans held for investment |
15.69 | % | 56.41 | % | 61.15 | % | 33.13 | % | 148.00 | % | 40.41 | % | ||||||||||||
Allowance to non-performing loans held for investment,
excluding non-performing loans charged-off to realizable value |
55.83 | % | 70.18 | % | 93.50 | % | 43.17 | % | 148.00 | % | 65.20 | % |
Residential | Commercial | Construction | Consumer and | |||||||||||||||||||||
(Dollars in thousands) | Mortgage Loans | Mortgage Loans | C&I Loans | Loans | Finance Leases | Total | ||||||||||||||||||
As of December 31, 2010 |
||||||||||||||||||||||||
Impaired loans without specific reserves: |
||||||||||||||||||||||||
Principal balance of loans, net of charge-offs |
$ | 251,900 | $ | 28,252 | $ | 54,631 | $ | 24,919 | $ | 2,916 | $ | 362,618 | ||||||||||||
Impaired loans with specific reserves: |
||||||||||||||||||||||||
Principal balance of loans, net of charge-offs |
304,754 | 148,139 | 325,374 | 237,908 | 3,386 | 1,019,561 | ||||||||||||||||||
Allowance for loan and lease losses |
43,482 | 26,831 | 65,030 | 57,833 | 251 | 193,427 | ||||||||||||||||||
Allowance for loan and lease losses to principal balance |
14.27 | % | 18.11 | % | 19.99 | % | 24.31 | % | 7.41 | % | 18.97 | % | ||||||||||||
Loans with general allowance: |
||||||||||||||||||||||||
Principal balance of loans |
2,860,763 | 1,493,770 | 3,771,759 | 437,752 | 1,709,213 | 10,273,257 | ||||||||||||||||||
Allowance for loan and lease losses |
18,848 | 78,765 | 87,611 | 94,139 | 80,235 | 359,598 | ||||||||||||||||||
Allowance for loan and lease losses to principal balance |
0.66 | % | 5.27 | % | 2.32 | % | 21.51 | % | 4.69 | % | 3.50 | % | ||||||||||||
Total loans held for investment: |
||||||||||||||||||||||||
Principal balance of loans |
$ | 3,417,417 | $ | 1,670,161 | $ | 4,151,764 | $ | 700,579 | $ | 1,715,515 | $ | 11,655,436 | ||||||||||||
Allowance for loan and lease losses |
62,330 | 105,596 | 152,641 | 151,972 | 80,486 | 553,025 | ||||||||||||||||||
Allowance for loan and lease losses to principal balance |
1.82 | % | 6.32 | % | 3.68 | % | 21.69 | % | 4.69 | % | 4.74 | % | ||||||||||||
As of September 30, 2010 |
||||||||||||||||||||||||
Impaired loans without specific reserves: |
||||||||||||||||||||||||
Principal balance of loans, net of charge-offs |
$ | 234,012 | $ | 38,181 | $ | 93,025 | $ | 121,517 | $ | | $ | 486,735 | ||||||||||||
Impaired loans with specific reserves: |
||||||||||||||||||||||||
Principal balance of loans, net of charge-offs |
294,943 | 160,335 | 392,120 | 546,937 | | 1,394,335 | ||||||||||||||||||
Allowance for loan and lease losses |
30,629 | 35,946 | 88,555 | 116,295 | | 271,425 | ||||||||||||||||||
Allowance for loan and lease losses to principal balance |
10.38 | % | 22.42 | % | 22.58 | % | 21.26 | % | 0.00 | % | 19.47 | % | ||||||||||||
Loans with general allowance: |
||||||||||||||||||||||||
Principal balance of loans |
2,919,380 | 1,543,946 | 3,635,626 | 446,193 | 1,753,811 | 10,298,956 | ||||||||||||||||||
Allowance for loan and lease losses |
36,469 | 61,836 | 90,826 | 68,629 | 79,341 | 337,101 | ||||||||||||||||||
Allowance for loan and lease losses to principal balance |
1.25 | % | 4.01 | % | 2.50 | % | 15.38 | % | 4.52 | % | 3.27 | % | ||||||||||||
Total loans held for investment: |
||||||||||||||||||||||||
Principal balance of loans |
$ | 3,448,335 | $ | 1,742,462 | $ | 4,120,771 | $ | 1,114,647 | $ | 1,753,811 | $ | 12,180,026 | ||||||||||||
Allowance for loan and lease losses |
67,098 | 97,782 | 179,381 | 184,924 | 79,341 | 608,526 | ||||||||||||||||||
Allowance for loan and lease losses to principal balance |
1.95 | % | 5.61 | % | 4.35 | % | 16.59 | % | 4.52 | % | 5.00 | % |
Quarter Ended | ||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
2010 | 2010 | 2010 | 2010 | 2009 | ||||||||||||||||
Residential mortgage |
2.20 | % (1) | 1.52 | % | 1.99 | % | 1.50 | % | 0.84 | % | ||||||||||
Commercial mortgage |
7.56 | % (2) | 2.88 | % | 4.56 | % | 4.85 | % | 1.35 | % | ||||||||||
Commercial and Industrial |
2.73 | % (3) | 1.82 | % | 2.25 | % | 1.88 | % | 0.60 | % | ||||||||||
Construction |
57.61 | % (4) | 18.84 | % | 11.96 | % | 14.35 | % | 11.34 | % | ||||||||||
Consumer and finance leases |
3.07 | % | 3.00 | % | 2.86 | % | 3.01 | % | 3.16 | % | ||||||||||
Total loans |
8.27 | % (5) | 3.74 | % | 3.62 | % | 3.65 | % | 2.34 | % |
(1) | Includes net charge-offs totaling $7.8 million associated with non-performing residential mortgage loans sold in a bulk sale. | |
(2) | Includes net charge-offs totaling $29.5 million associated with loans transferred to held for sale. Commercial mortgage net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale, was 0.80%. | |
(3) | Includes net charge-offs totaling $8.6 million associated with loans transferred to held for sale. Commercial and Industrial net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale, was 1.93%. | |
(4) | Includes net charge-offs totaling $127.0 million associated with loans transferred to held for sale. Construction net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale, was 16.40%. | |
(5) | Includes net charge-offs totaling $165.1 million associated with loans transferred to held for sale. Total net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale, was 2.96%. |
Quarter Ended | ||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
2010 | 2010 | 2010 | 2010 | 2009 | ||||||||||||||||
PUERTO RICO: |
||||||||||||||||||||
Residential mortgage |
2.39 | % (1) | 1.61 | % | 2.09 | % | 1.11 | % | 0.62 | % | ||||||||||
Commercial mortgage |
10.64 | % (2) | 2.49 | % | 0.34 | % | 0.71 | % | 0.80 | % | ||||||||||
Commercial and Industrial |
2.79 | % (3) | 1.92 | % | 2.48 | % | 1.92 | % | 0.63 | % | ||||||||||
Construction |
70.85 | % (4) | 8.30 | % | 8.56 | % | 13.45 | % | 0.76 | % | ||||||||||
Consumer and finance leases |
3.10 | % | 2.97 | % | 2.94 | % | 2.95 | % | 3.05 | % | ||||||||||
Total loans |
9.02 | % (5) | 2.61 | % | 2.81 | % | 2.80 | % | 1.03 | % | ||||||||||
VIRGIN ISLANDS: |
||||||||||||||||||||
Residential mortgage |
0.10 | % | 0.13 | % | 0.00 | % | 0.47 | % | 0.00 | % | ||||||||||
Commercial mortgage |
0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||
Commercial and Industrial |
0.00 | % | -0.01 | % (6) | -1.41 | % (6) | -0.02 | % (6) | 0.06 | % | ||||||||||
Construction |
12.66 | % | 0.00 | % | 0.01 | % | 0.15 | % | 0.00 | % | ||||||||||
Consumer and finance leases |
1.97 | % | 1.56 | % | 0.46 | % | 3.82 | % | 3.44 | % | ||||||||||
Total loans |
2.78 | % | 0.18 | % | -0.32 | % | 0.55 | % | 0.33 | % | ||||||||||
FLORIDA: |
||||||||||||||||||||
Residential mortgage |
3.45 | % | 2.59 | % | 3.67 | % | 5.70 | % | 3.42 | % | ||||||||||
Commercial mortgage |
0.28 | % | 4.20 | % | 13.84 | % | 13.23 | % | 2.58 | % | ||||||||||
Commercial and Industrial |
9.48 | % | 0.02 | % | 1.16 | % | 10.78 | % | 0.53 | % | ||||||||||
Construction |
36.13 | % | 101.18 | % (7) | 32.75 | % | 27.23 | % | 44.34 | % | ||||||||||
Consumer and finance leases |
3.91 | % | 8.37 | % | 4.86 | % | 3.96 | % | 7.39 | % | ||||||||||
Total loans |
5.53 | % | 18.34 | % | 14.59 | % | 13.90 | % | 14.92 | % |
(1) | Includes net charge-offs totaling $7.8 million associated with non-performing residential mortgage loans sold in a bulk sale. | |
(2) | Includes net charge-offs totaling $29.5 million associated with loans transferred to held for sale. Commercial mortgage net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale in Puerto Rico, was 1.06%. | |
(3) | Includes net charge-offs totaling $8.6 million associated with loans transferred to held for sale. Commercial and Industrial net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale in Puerto Rico, was 1.95%. | |
(4) | Includes net charge-offs totaling $127.0 million associated with loans transferred to held for sale. Construction net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale in Puerto Rico, was 13.80%. | |
(5) | Includes net charge-offs totaling $165.1 million associated with loans transferred to held for sale. Total net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale in Puerto Rico, was 2.73%. | |
(6) | For the third quarter, second quarter and first quarter of 2010, recoveries in commercial and industrial loans in the Virgin Islands exceeded charge-offs. | |
(7) | For the third quarter of 2010, net charge-offs for the construction loan portfolio in Florida were $40 million which once annualized for ratio calculation exceeded the average balance of this portfolio. |
As of | ||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
(In thousands, except per share information) | 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 |
As of | ||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
(Dollars in thousands) | 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. |
Condensed Consolidated Statements of Financial Condition
As of | ||||||||||||
December 31, | September 30, | December 31, | ||||||||||
(In thousands, except for share information) | 2010 | 2010 | 2009 | |||||||||
ASSETS |
||||||||||||
Cash and due from banks |
$ | 254,723 | $ | 689,132 | $ | 679,798 | ||||||
Money market investments: |
||||||||||||
Federal funds sold and securities purchased under agreements to sell |
6,236 | 5,769 | 1,140 | |||||||||
Time deposits with other financial institutions |
1,346 | 1,746 | 600 | |||||||||
Other short-term investments |
107,978 | 207,979 | 22,546 | |||||||||
Total money market investments |
115,560 | 215,494 | 24,286 | |||||||||
Investment securities available for sale, at fair value |
2,744,453 | 2,976,180 | 4,170,782 | |||||||||
Investment securities held to maturity, at amortized cost |
453,387 | 489,967 | 601,619 | |||||||||
Other equity securities |
55,932 | 64,310 | 69,930 | |||||||||
Total investment securities |
3,253,772 | 3,530,457 | 4,842,331 | |||||||||
Loans, net of allowance for loan and lease losses of $553,025
(September 30, 2010 - $608,526; December 31, 2009 - $528,120) |
11,102,411 | 11,571,500 | 13,400,331 | |||||||||
Loans held for sale, at lower of cost or market |
300,766 | 9,196 | 20,775 | |||||||||
Total loans, net |
11,403,177 | 11,580,696 | 13,421,106 | |||||||||
Premises and equipment, net |
209,014 | 205,782 | 197,965 | |||||||||
Other real estate owned |
84,897 | 82,706 | 69,304 | |||||||||
Accrued interest receivable on loans and investments |
59,061 | 61,977 | 79,867 | |||||||||
Due from customers on acceptances |
1,439 | 754 | 954 | |||||||||
Accounts receivable from investment sales |
| | | |||||||||
Other assets |
305,138 | 311,881 | 312,837 | |||||||||
Total assets |
$ | 15,686,781 | $ | 16,678,879 | $ | 19,628,448 | ||||||
LIABILITIES |
||||||||||||
Deposits: |
||||||||||||
Non-interest-bearing deposits |
$ | 668,052 | $ | 703,836 | $ | 697,022 | ||||||
Interest bearing deposits |
11,391,058 | 11,839,731 | 11,972,025 | |||||||||
Total deposits |
12,059,110 | 12,543,567 | 12,669,047 | |||||||||
Advances from the Federal Reserve |
| | 900,000 | |||||||||
Securities sold under agreements to repurchase |
1,400,000 | 1,400,000 | 3,076,631 | |||||||||
Advances from the Federal Home Loan Bank (FHLB) |
653,440 | 835,440 | 978,440 | |||||||||
Notes payable |
26,449 | 25,057 | 27,117 | |||||||||
Other borrowings |
231,959 | 231,959 | 231,959 | |||||||||
Bank acceptances outstanding |
1,439 | 754 | 954 | |||||||||
Accounts payable from investment purchases |
| 159,390 | | |||||||||
Accounts payable and other liabilities |
162,721 | 160,733 | 145,237 | |||||||||
Total liabilities |
14,535,118 | 15,356,900 | 18,029,385 | |||||||||
STOCKHOLDERS EQUITY |
||||||||||||
Preferred stock, authorized 50,000,000 shares: issued and
outstanding 2,946,046 shares (September 30, 2010 and December 31, 2009 -
2,946,046 and 22,404,000 shares issued and outstanding, respectively)
aggregate liquidation value of $487,221 (September 30, 2010 and
December 31, 2009 - $487,221 and $950,100, respectively) |
425,009 | 411,876 | 928,508 | |||||||||
Common stock, $0.10 par value, (September 30, 2010 and December 31, 2009 -
$0.10 and $1 par value, respectively) authorized 2,000,000,000 shares;
issued 21,963,522 shares(September 30, 2010 and December 31, 2009 -
21,963,522 and 6,829,308 shares issued, respectively) |
2,196 | 2,196 | 6,829 | |||||||||
Less: Treasury stock (at par value) |
(66 | ) | (66 | ) | (660 | ) | ||||||
Common stock outstanding, 21,303,669 shares outstanding
(September 30, 2010 and December 31, 2009 - 21,303,669 and 6,169,455
shares outstanding, respectively) |
2,130 | 2,130 | 6,169 | |||||||||
Additional paid-in capital |
319,459 | 319,466 | 220,596 | |||||||||
Legal surplus |
299,006 | 299,006 | 299,006 | |||||||||
Retained earnings |
88,341 | 259,206 | 118,291 | |||||||||
Accumulated other comprehensive income |
17,718 | 30,295 | 26,493 | |||||||||
Total stockholdersequity |
1,151,663 | 1,321,979 | 1,599,063 | |||||||||
Total liabilities and stockholdersequity |
$ | 15,686,781 | $ | 16,678,879 | $ | 19,628,448 | ||||||
Condensed Consolidated Statements of Loss
Quarter Ended | Year Ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
(In thousands, except per share information) | 2010 | 2010 | 2009 | 2010 | 2009 | |||||||||||||||
Net interest income: |
||||||||||||||||||||
Interest income |
$ | 192,806 | $ | 204,028 | $ | 243,449 | $ | 832,686 | $ | 996,574 | ||||||||||
Interest expense |
80,758 | 90,326 | 106,152 | 371,011 | 477,532 | |||||||||||||||
Net interest income |
112,048 | 113,702 | 137,297 | 461,675 | 519,042 | |||||||||||||||
Provision for loan and lease losses |
196,347 | 120,482 | 137,187 | 634,587 | 579,858 | |||||||||||||||
Net interest (loss) income after provision for loan and lease losses |
(84,299 | ) | (6,780 | ) | 110 | (172,912 | ) | (60,816 | ) | |||||||||||
Non-interest income: |
||||||||||||||||||||
Other service charges on loans |
2,019 | 1,963 | 1,982 | 7,224 | 6,830 | |||||||||||||||
Service charges on deposit accounts |
3,125 | 3,325 | 3,357 | 13,419 | 13,307 | |||||||||||||||
Mortgage banking activities |
2,501 | 6,474 | 2,426 | 13,615 | 8,605 | |||||||||||||||
Net (loss) gain on investments and impairments |
(620 | ) | 48,281 | 24,387 | 102,662 | 85,146 | ||||||||||||||
Loss on early extinguishment of repurchase agreements |
| (47,405 | ) | | (47,405 | ) | | |||||||||||||
Other non-interest income |
6,761 | 6,628 | 6,655 | 28,388 | 28,376 | |||||||||||||||
Total non-interest income |
13,786 | 19,266 | 38,807 | 117,903 | 142,264 | |||||||||||||||
Non-interest expenses: |
||||||||||||||||||||
Employees compensation and benefits |
28,591 | 29,849 | 29,617 | 121,126 | 132,734 | |||||||||||||||
Occupancy and equipment |
15,537 | 14,655 | 14,822 | 59,494 | 62,335 | |||||||||||||||
Business promotion |
3,561 | 3,226 | 4,327 | 12,332 | 14,158 | |||||||||||||||
Professional fees |
5,863 | 4,533 | 4,883 | 21,287 | 15,217 | |||||||||||||||
Taxes, other than income taxes |
3,274 | 3,316 | 3,936 | 14,228 | 15,847 | |||||||||||||||
Insurance and supervisory fees |
15,363 | 16,787 | 15,114 | 67,274 | 45,605 | |||||||||||||||
Net loss on real estate owned (REO) operations |
7,471 | 8,193 | 4,847 | 30,173 | 21,863 | |||||||||||||||
Other non-interest expenses |
7,843 | 8,123 | 11,262 | 40,244 | 44,342 | |||||||||||||||
Total non-interest expenses |
87,503 | 88,682 | 88,808 | 366,158 | 352,101 | |||||||||||||||
Loss before income taxes |
(158,016 | ) | (76,196 | ) | (49,891 | ) | (421,167 | ) | (270,653 | ) | ||||||||||
Income tax benefit (expense) |
284 | 963 | (3,311 | ) | (9,437 | ) | (4,534 | ) | ||||||||||||
Net loss |
$ | (157,732 | ) | $ | (75,233 | ) | $ | (53,202 | ) | $ | (430,604 | ) | $ | (275,187 | ) | |||||
Net (loss) income available to common stockholders basic |
$ | (176,167 | ) | $ | 357,787 | $ | (59,334 | ) | $ | (28,341 | ) | $ | (322,075 | ) | ||||||
Net (loss) income available to common stockholders diluted |
$ | (176,167 | ) | $ | 363,413 | $ | (59,334 | ) | $ | (28,341 | ) | $ | (322,075 | ) | ||||||
Net (loss) income per common share: |
||||||||||||||||||||
Basic |
$ | (8.27 | ) | $ | 31.30 | $ | (9.62 | ) | $ | (2.51 | ) | $ | (52.22 | ) | ||||||
Diluted |
$ | (8.27 | ) | $ | 4.20 | $ | (9.62 | ) | $ | (2.51 | ) | $ | (52.22 | ) | ||||||
Alan Cohen
Senior Vice President
Marketing and Public Relations
alan.cohen@firstbankpr.com
(787) 729-8256
Quarter Ended | Year Ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
(In thousands, except for per share and financial ratios) | 2010 | 2010 | 2009 | 2010 | 2009 | |||||||||||||||
Condensed Income Statements: |
||||||||||||||||||||
Total interest income |
$ | 192,806 | $ | 204,028 | $ | 243,449 | $ | 832,686 | $ | 996,574 | ||||||||||
Total interest expense |
80,758 | 90,326 | 106,152 | 371,011 | 477,532 | |||||||||||||||
Net interest income |
112,048 | 113,702 | 137,297 | 461,675 | 519,042 | |||||||||||||||
Provision for loan and lease losses |
196,347 | 120,482 | 137,187 | 634,587 | 579,858 | |||||||||||||||
Non-interest income |
13,786 | 19,266 | 38,807 | 117,903 | 142,264 | |||||||||||||||
Non-interest expenses |
87,503 | 88,682 | 88,808 | 366,158 | 352,101 | |||||||||||||||
Loss before income taxes |
(158,016 | ) | (76,196 | ) | (49,891 | ) | (421,167 | ) | (270,653 | ) | ||||||||||
Income tax benefit (expense) |
284 | 963 | (3,311 | ) | (9,437 | ) | (4,534 | ) | ||||||||||||
Net loss |
(157,732 | ) | (75,233 | ) | (53,202 | ) | (430,604 | ) | (275,187 | ) | ||||||||||
Net (loss) income available to common stockholders basic |
(176,167 | ) | 357,787 | (59,334 | ) | (28,341 | ) | (322,075 | ) | |||||||||||
Net (loss) income available to common stockholders diluted |
(176,167 | ) | 363,413 | (59,334 | ) | (28,341 | ) | (322,075 | ) | |||||||||||
Per Common Share Results (1): |
||||||||||||||||||||
Net (loss) income per share basic |
$ | (8.27 | ) | $ | 31.30 | $ | (9.62 | ) | $ | (2.51 | ) | $ | (52.22 | ) | ||||||
Net (loss) income per share diluted |
$ | (8.27 | ) | $ | 4.20 | $ | (9.62 | ) | $ | (2.51 | ) | $ | (52.22 | ) | ||||||
Cash dividends declared |
$ | | $ | | $ | | $ | | $ | 2.10 | ||||||||||
Average shares outstanding |
21,303 | 11,432 | 6,168 | 11,310 | 6,167 | |||||||||||||||
Average shares outstanding diluted |
21,303 | 86,552 | 6,168 | 11,310 | 6,167 | |||||||||||||||
Book value per common share |
$ | 34.11 | $ | 42.72 | $ | 108.70 | $ | 34.11 | $ | 108.70 | ||||||||||
Tangible book value per common share (2) |
$ | 32.13 | $ | 40.71 | $ | 101.45 | $ | 32.13 | $ | 101.45 | ||||||||||
Selected Financial Ratios (In Percent): |
||||||||||||||||||||
Profitability: |
||||||||||||||||||||
Return on Average Assets |
(3.86 | ) | (1.73 | ) | (1.08 | ) | (2.41 | ) | (1.39 | ) | ||||||||||
Interest Rate Spread (3) |
2.60 | 2.55 | 2.75 | 2.48 | 2.62 | |||||||||||||||
Net Interest Margin (3) |
2.88 | 2.83 | 3.03 | 2.77 | 2.93 | |||||||||||||||
Return on Average Total Equity |
(47.93 | ) | (21.28 | ) | (12.48 | ) | (29.75 | ) | (14.84 | ) | ||||||||||
Return on Average Common Equity |
(78.61 | ) | (50.80 | ) | (30.54 | ) | (66.73 | ) | (34.07 | ) | ||||||||||
Average Total Equity to Average Total Assets |
8.06 | 8.13 | 8.67 | 8.10 | 9.36 | |||||||||||||||
Tangible common equity ratio (2) |
4.38 | 5.21 | 3.20 | 4.38 | 3.20 | |||||||||||||||
Dividend payout ratio |
| | | | (4.03 | ) | ||||||||||||||
Efficiency ratio (4) |
69.54 | 66.69 | 50.43 | 63.18 | 53.24 | |||||||||||||||
Asset Quality: |
||||||||||||||||||||
Allowance for loan and lease losses to loans receivable |
4.74 | 5.00 | 3.79 | 4.74 | 3.79 | |||||||||||||||
Net charge-offs (annualized) to average loans |
8.27 | (5) | 3.74 | 2.34 | 4.76 | (5) | 2.48 | |||||||||||||
Provision for loan and lease losses to net charge-offs |
77.96 | (6) | 103.63 | 170.31 | 104.08 | (6) | 173.99 | |||||||||||||
Non-performing assets to total assets |
9.96 | (7) | 10.01 | 8.71 | 9.96 | (7) | 8.71 | |||||||||||||
Non-performing loans held for investment to total loans held for investment |
10.63 | 12.36 | 11.23 | 10.63 | 11.23 | |||||||||||||||
Allowance to total non-performing loans held for investment |
44.64 | 40.41 | 33.77 | 44.64 | 33.77 | |||||||||||||||
Allowance to total non-performing loans held for investment
excluding residential real estate loans |
65.30 | 56.43 | 47.06 | 65.30 | 47.06 | |||||||||||||||
Other Information: |
||||||||||||||||||||
Common Stock Price: End of period |
$ | 6.90 | $ | 4.20 | $ | 34.50 | $ | 6.90 | $ | 34.50 |
1- | All share and per share data have been adjusted to retroactively reflect the 1-for-15 reverse stock split effected January 7, 2011. | |
2- | Non-GAAP measure. See page 20 for GAAP to Non-GAAP reconciliations. | |
3- | On a tax-equivalent basis. See page 6 for GAAP to Non-GAAP reconciliations and refer to discussions in Tables 2 and 3 below. | |
4- | Non-interest expenses to the sum of net interest income and non-interest income. The denominator includes non-recurring income and changes in the fair value of derivative instruments and financial liabilities measured at fair value. | |
5- | Net charge-offs to average loans, excluding impact associated with loans transferred to held for sale, were 2.96% and 3.60% for the quarter and year ended December 31, 2010, respectively. | |
6- | Provision for loan and lease losses to net charge-offs excluding the impact of loans transferred to held for sale was 107.63% and 119.57% for the quarter and year ended December 31, 2010, respectively. | |
7- | Non-performing assets, excluding non-performing loans held for sale, to total assets, excluding non-performing loans transferred to held for sale, was 9.03% as of December 31, 2010. |
Average volume | Interest income (1) / expense | Average rate (1) | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | December 31, | September 30, | December 31, | December 31, | September 30, | December 31, | December 31, | September 30, | December 31, | |||||||||||||||||||||||||||
Quarter ended | 2010 | 2010 | 2009 | 2010 | 2010 | 2009 | 2010 | 2010 | 2009 | |||||||||||||||||||||||||||
Interest-earning assets: |
||||||||||||||||||||||||||||||||||||
Money market & other short-term investments |
$ | 568,407 | $ | 794,318 | $ | 268,295 | $ | 478 | $ | 511 | $ | 184 | 0.33 | % | 0.26 | % | 0.27 | % | ||||||||||||||||||
Government obligations (2) |
1,404,304 | 1,361,925 | 1,316,211 | 7,466 | 8,023 | 9,109 | 2.11 | % | 2.34 | % | 2.75 | % | ||||||||||||||||||||||||
Mortgage-backed securities |
1,827,339 | 2,416,485 | 3,843,609 | 18,096 | 27,491 | 51,971 | 3.93 | % | 4.51 | % | 5.36 | % | ||||||||||||||||||||||||
Corporate bonds |
2,000 | 2,000 | 2,000 | 29 | 29 | 30 | 5.75 | % | 5.75 | % | 5.95 | % | ||||||||||||||||||||||||
FHLB stock |
60,105 | 63,950 | 73,435 | 836 | 640 | 896 | 5.52 | % | 3.97 | % | 4.84 | % | ||||||||||||||||||||||||
Equity securities |
1,377 | 1,377 | 1,977 | | | 72 | 0.00 | % | 0.00 | % | 14.45 | % | ||||||||||||||||||||||||
Total investments (3) |
3,863,532 | 4,640,055 | 5,505,527 | 26,905 | 36,694 | 62,262 | 2.76 | % | 3.14 | % | 4.49 | % | ||||||||||||||||||||||||
Residential mortgage loans |
3,397,444 | 3,454,820 | 3,568,367 | 49,456 | 51,839 | 54,200 | 5.78 | % | 5.95 | % | 6.03 | % | ||||||||||||||||||||||||
Construction loans |
1,099,244 | 1,240,522 | 1,584,282 | 7,348 | 8,096 | 13,262 | 2.65 | % | 2.59 | % | 3.32 | % | ||||||||||||||||||||||||
C&I and commercial mortgage loans |
5,953,586 | 5,968,781 | 6,698,689 | 64,298 | 65,852 | 70,610 | 4.28 | % | 4.38 | % | 4.18 | % | ||||||||||||||||||||||||
Finance leases |
286,572 | 293,956 | 324,591 | 5,913 | 5,937 | 6,609 | 8.19 | % | 8.01 | % | 8.08 | % | ||||||||||||||||||||||||
Consumer loans |
1,448,665 | 1,484,976 | 1,601,999 | 42,477 | 43,326 | 46,053 | 11.63 | % | 11.58 | % | 11.41 | % | ||||||||||||||||||||||||
Total loans (4) (5) |
12,185,511 | 12,443,055 | 13,777,928 | 169,492 | 175,050 | 190,734 | 5.52 | % | 5.58 | % | 5.49 | % | ||||||||||||||||||||||||
Total interest-earning assets |
$ | 16,049,043 | $ | 17,083,110 | $ | 19,283,455 | $ | 196,397 | $ | 211,744 | $ | 252,996 | 4.86 | % | 4.92 | % | 5.21 | % | ||||||||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||||||||||||||||||
Brokered CDs |
$ | 6,429,232 | $ | 6,929,356 | $ | 7,398,276 | $ | 35,661 | $ | 39,086 | $ | 47,081 | 2.20 | % | 2.24 | % | 2.52 | % | ||||||||||||||||||
Other interest-bearing deposits |
5,171,779 | 5,008,676 | 4,172,437 | 22,319 | 21,917 | 20,471 | 1.71 | % | 1.74 | % | 1.95 | % | ||||||||||||||||||||||||
Loans payable |
| | 849,853 | | | 908 | 0.00 | % | 0.00 | % | 0.42 | % | ||||||||||||||||||||||||
Other borrowed funds |
1,660,662 | 2,214,076 | 3,588,300 | 15,388 | 21,618 | 29,227 | 3.68 | % | 3.87 | % | 3.23 | % | ||||||||||||||||||||||||
FHLB advances |
775,103 | 850,060 | 1,103,690 | 6,577 | 7,179 | 8,218 | 3.37 | % | 3.35 | % | 2.95 | % | ||||||||||||||||||||||||
Total
interest-bearing liabilities (6) |
$ | 14,036,776 | $ | 15,002,168 | $ | 17,112,556 | $ | 79,945 | $ | 89,800 | $ | 105,905 | 2.26 | % | 2.37 | % | 2.46 | % | ||||||||||||||||||
Net interest income |
$ | 116,452 | $ | 121,944 | $ | 147,091 | ||||||||||||||||||||||||||||||
Interest rate spread |
2.60 | % | 2.55 | % | 2.75 | % | ||||||||||||||||||||||||||||||
Net interest margin |
2.88 | % | 2.83 | % | 3.03 | % |
1- | On a tax-equivalent basis. The tax-equivalent yield was estimated by dividing the interest rate spread on exempt assets by 1 less Puerto Rico statutory tax rate as adjusted for changes to enacted tax rates (40.95% for the Corporations subsidiaries other than IBEs and 35.95% for the Corporations IBEs) and adding to it the cost of interest-bearing liabilities. When adjusted to a tax-equivalent basis, yields on taxable and exempt assets are comparable. Changes in the fair value of derivative instruments and unrealized gains or losses on liabilities measured at fair value are excluded from interest income and interest expense because the changes in valuation do not affect interest paid or received. | |
2- | Government obligations include debt issued by government sponsored agencies. | |
3- | Unrealized gains and losses in available-for-sale securities are excluded from the average volumes. | |
4- | Average loan balances include the average of total non-performing loans. | |
5- | Interest income on loans includes $2.6 million, $2.5 million and $2.8 million for the fourth quarter of 2010, third quarter of 2010 and fourth quarter of 2009, respectively, of income from prepayment penalties and late fees related to the Corporations loan portfolio. | |
6- | Unrealized gains and losses on liabilities measured at fair value are excluded from the average volumes. |
(Dollars in thousands) | Average Volume | Interest income (1) / expense | Average rate (1) | |||||||||||||||||||||
Year Ended December 31, | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | ||||||||||||||||||
Interest-earning assets: |
||||||||||||||||||||||||
Money market & other short-term investments |
$ | 778,412 | $ | 182,205 | $ | 2,049 | $ | 577 | 0.26 | % | 0.32 | % | ||||||||||||
Government obligations (2) |
1,368,368 | 1,345,591 | 32,466 | 54,323 | 2.37 | % | 4.04 | % | ||||||||||||||||
Mortgage-backed securities |
2,658,279 | 4,254,044 | 121,587 | 238,992 | 4.57 | % | 5.62 | % | ||||||||||||||||
Corporate bonds |
2,000 | 4,769 | 116 | 294 | 5.80 | % | 6.16 | % | ||||||||||||||||
FHLB stock |
65,297 | 76,982 | 2,894 | 3,082 | 4.43 | % | 4.00 | % | ||||||||||||||||
Equity securities |
1,481 | 2,071 | 15 | 126 | 1.01 | % | 6.08 | % | ||||||||||||||||
Total investments (3) |
4,873,837 | 5,865,662 | 159,127 | 297,394 | 3.26 | % | 5.07 | % | ||||||||||||||||
Residential mortgage loans |
3,488,037 | 3,523,576 | 207,700 | 213,583 | 5.95 | % | 6.06 | % | ||||||||||||||||
Construction loans |
1,315,794 | 1,590,309 | 33,329 | 52,908 | 2.53 | % | 3.33 | % | ||||||||||||||||
C&I and commercial mortgage loans |
6,190,959 | 6,343,635 | 262,940 | 263,935 | 4.25 | % | 4.16 | % | ||||||||||||||||
Finance leases |
299,869 | 341,943 | 24,416 | 28,077 | 8.14 | % | 8.21 | % | ||||||||||||||||
Consumer loans |
1,506,448 | 1,661,099 | 174,846 | 188,775 | 11.61 | % | 11.36 | % | ||||||||||||||||
Total loans (4) (5) |
12,801,107 | 13,460,562 | 703,231 | 747,278 | 5.49 | % | 5.55 | % | ||||||||||||||||
Total interest-earning assets |
$ | 17,674,944 | $ | 19,326,224 | $ | 862,358 | $ | 1,044,672 | 4.88 | % | 5.41 | % | ||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||||||
Brokered CDs |
$ | 7,002,343 | $ | 7,300,696 | $ | 160,628 | $ | 227,896 | 2.29 | % | 3.12 | % | ||||||||||||
Other interest-bearing deposits |
4,934,302 | 4,087,262 | 88,086 | 89,966 | 1.79 | % | 2.20 | % | ||||||||||||||||
Loans payable |
299,589 | 643,618 | 3,442 | 2,331 | 1.15 | % | 0.36 | % | ||||||||||||||||
Other borrowed funds |
2,436,091 | 3,745,980 | 91,386 | 124,340 | 3.75 | % | 3.32 | % | ||||||||||||||||
FHLB advances |
888,298 | 1,322,136 | 29,037 | 32,954 | 3.27 | % | 2.49 | % | ||||||||||||||||
Total interest-bearing liabilities (6) |
$ | 15,560,623 | $ | 17,099,692 | $ | 372,579 | $ | 477,487 | 2.39 | % | 2.79 | % | ||||||||||||
Net interest income |
$ | 489,779 | $ | 567,185 | ||||||||||||||||||||
Interest rate spread |
2.48 | % | 2.62 | % | ||||||||||||||||||||
Net interest margin |
2.77 | % | 2.93 | % |
1- | On a tax-equivalent basis. The tax-equivalent yield was estimated by dividing the interest rate spread on exempt assets by 1 less Puerto Rico statutory tax rate as adjusted for changes to enacted tax rates (40.95% for the Corporations subsidiaries other than IBEs and 35.95% for the Corporations IBEs) and adding to it the cost of interest-bearing liabilities. When adjusted to a tax-equivalent basis, yields on taxable and exempt assets are comparable. Changes in the fair value of derivative instruments and unrealized gains or losses on liabilities measured at fair value are excluded from interest income and interest expense because the changes in valuation do not affect interest paid or received. | |
2- | Government obligations include debt issued by government sponsored agencies. | |
3- | Unrealized gains and losses in available-for-sale securities are excluded from the average volumes. | |
4- | Average loan balances include the average of total non-performing loans. | |
5- | Interest income on loans includes $10.7 million and $11.2 million for the year ended December 31, 2010 and 2009, respectively, of income from prepayment penalties and late fees related to the Corporations loan portfolio. | |
6- | Unrealized gains and losses on liabilities measured at fair value are excluded from the average volumes. |
Quarter Ended | Year Ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | |||||||||||||||||
(In thousands) | 2010 | 2010 | 2009 | 2010 | 2009 | |||||||||||||||
Other service charges on loans |
$ | 2,019 | $ | 1,963 | $ | 1,982 | $ | 7,224 | $ | 6,830 | ||||||||||
Service charges on deposit accounts |
3,125 | 3,325 | 3,357 | 13,419 | 13,307 | |||||||||||||||
Mortgage banking activities |
2,501 | 6,474 | 2,426 | 13,615 | 8,605 | |||||||||||||||
Rental income |
| | 100 | | 1,346 | |||||||||||||||
Insurance income |
1,673 | 1,658 | 1,753 | 7,752 | 8,668 | |||||||||||||||
Broker-dealer income |
121 | 501 | 61 | 2,176 | 61 | |||||||||||||||
Other operating income |
4,967 | 4,469 | 4,741 | 18,460 | 18,301 | |||||||||||||||
Non-interest income before net gain
on investments
and loss on early extinguishment of
repurchase agreements |
14,406 | 18,390 | 14,420 | 62,646 | 57,118 | |||||||||||||||
Gain on VISA shares |
| | | 10,668 | 3,784 | |||||||||||||||
Net (loss) gain on sale of investments |
(38 | ) | 48,281 | 24,387 | 93,179 | 83,020 | ||||||||||||||
OTTI on equity securities |
| | | (603 | ) | (388 | ) | |||||||||||||
OTTI on debt securities |
(582 | ) | | | (582 | ) | (1,270 | ) | ||||||||||||
Net gain on investments |
(620 | ) | 48,281 | 24,387 | 102,662 | 85,146 | ||||||||||||||
Loss on early extinguishment of
repurchase agreements |
| (47,405 | ) | | (47,405 | ) | | |||||||||||||
$ | 13,786 | $ | 19,266 | $ | 38,807 | $ | 117,903 | $ | 142,264 | |||||||||||
Quarter Ended | Year Ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | |||||||||||||||||
(In thousands) | 2010 | 2010 | 2009 | 2010 | 2009 | |||||||||||||||
Employees compensation and benefits |
$ | 28,591 | $ | 29,849 | $ | 29,617 | $ | 121,126 | $ | 132,734 | ||||||||||
Occupancy and equipment |
15,537 | 14,655 | 14,822 | 59,494 | 62,335 | |||||||||||||||
Deposit insurance premium |
13,568 | 14,702 | 13,923 | 60,292 | 40,582 | |||||||||||||||
Other taxes, insurance and supervisory fees |
5,069 | 5,401 | 5,127 | 21,210 | 20,870 | |||||||||||||||
Professional fees recurring |
5,282 | 4,043 | 3,628 | 18,500 | 12,980 | |||||||||||||||
Professional fees non-recurring |
581 | 490 | 1,255 | 2,787 | 2,237 | |||||||||||||||
Servicing and processing fees |
2,233 | 2,188 | 2,832 | 8,984 | 10,174 | |||||||||||||||
Business promotion |
3,561 | 3,226 | 4,327 | 12,332 | 14,158 | |||||||||||||||
Communications |
1,977 | 2,060 | 2,055 | 7,979 | 8,283 | |||||||||||||||
Net loss on REO operations |
7,471 | 8,193 | 4,847 | 30,173 | 21,863 | |||||||||||||||
Other |
3,633 | 3,875 | 6,375 | 23,281 | 25,885 | |||||||||||||||
Total |
$ | 87,503 | $ | 88,682 | $ | 88,808 | $ | 366,158 | $ | 352,101 | ||||||||||
As of | ||||||||||||
December 31, | September 30, | December 31, | ||||||||||
(In thousands) | 2010 | 2010 | 2009 | |||||||||
Balance Sheet Data: |
||||||||||||
Loans, including loans held for sale |
$ | 11,956,202 | $ | 12,189,222 | $ | 13,949,226 | ||||||
Allowance for loan and lease losses |
553,025 | 608,526 | 528,120 | |||||||||
Money market and investment securities |
3,369,332 | 3,745,951 | 4,866,617 | |||||||||
Intangible assets |
42,141 | 42,771 | 44,698 | |||||||||
Deferred tax asset, net |
102,973 | 101,248 | 109,197 | |||||||||
Total assets |
15,686,781 | 16,678,879 | 19,628,448 | |||||||||
Deposits |
12,059,110 | 12,543,567 | 12,669,047 | |||||||||
Borrowings |
2,311,848 | 2,492,456 | 5,214,147 | |||||||||
Total preferred equity |
425,009 | 411,876 | 928,508 | |||||||||
Total common equity |
708,936 | 879,808 | 644,062 | |||||||||
Accumulated other comprehensive
income, net of tax |
17,718 | 30,295 | 26,493 | |||||||||
Total equity |
1,151,663 | 1,321,979 | 1,599,063 |
As of | ||||||||||||
December 31, | September 30, | December 31, | ||||||||||
(In thousands) | 2010 | 2010 | 2009 | |||||||||
Residential mortgage loans |
$ | 3,417,417 | $ | 3,448,335 | $ | 3,595,508 | ||||||
Commercial loans: |
||||||||||||
Construction loans |
700,579 | 1,114,647 | 1,492,589 | |||||||||
Commercial mortgage loans |
1,670,161 | 1,742,462 | 1,693,424 | |||||||||
Commercial and Industrial loans (1) |
3,861,545 | 3,824,916 | 4,927,304 | |||||||||
Loans to local financial
institutions collateralized by
real estate mortgages |
290,219 | 295,855 | 321,522 | |||||||||
Commercial loans |
6,522,504 | 6,977,880 | 8,434,839 | |||||||||
Finance leases |
282,904 | 289,573 | 318,504 | |||||||||
Consumer loans |
1,432,611 | 1,464,238 | 1,579,600 | |||||||||
Loans receivable |
11,655,436 | 12,180,026 | 13,928,451 | |||||||||
Loans held for sale |
300,766 | 9,196 | 20,775 | |||||||||
Total loans |
$ | 11,956,202 | $ | 12,189,222 | $ | 13,949,226 | ||||||
1 - | As of December 31, 2010, includes $1.7 billion of commercial loans that are secured by real estate but are not dependent upon the real estate for repayment. |
As of December 31, 2010 | ||||||||||||||||
(In thousands) | Puerto Rico | Virgin Islands | Florida | Consolidated | ||||||||||||
Residential mortgage loans |
$ | 2,651,200 | $ | 430,949 | $ | 335,268 | $ | 3,417,417 | ||||||||
Commercial loans: |
||||||||||||||||
Construction loans |
437,294 | 184,762 | 78,523 | 700,579 | ||||||||||||
Commercial mortgage loans |
1,138,274 | 67,299 | 464,588 | 1,670,161 | ||||||||||||
Commercial and Industrial loans |
3,646,586 | 185,540 | 29,419 | 3,861,545 | ||||||||||||
Loans to a local financial
institution collateralized by
real estate mortgages |
290,219 | | | 290,219 | ||||||||||||
Commercial loans |
5,512,373 | 437,601 | 572,530 | 6,522,504 | ||||||||||||
Finance leases |
282,904 | | | 282,904 | ||||||||||||
Consumer loans |
1,329,603 | 72,659 | 30,349 | 1,432,611 | ||||||||||||
Loans receivable |
9,776,080 | 941,209 | 938,147 | 11,655,436 | ||||||||||||
Loans held for sale |
293,998 | 6,768 | | 300,766 | ||||||||||||
Total loans |
$ | 10,070,078 | $ | 947,977 | $ | 938,147 | $ | 11,956,202 | ||||||||
December 31, | September 30, | December 31, | ||||||||||
(Dollars in thousands) | 2010 | 2010 | 2009 | |||||||||
Non-performing loans held for investment: |
||||||||||||
Residential mortgage |
$ | 392,134 | $ | 427,574 | $ | 441,642 | ||||||
Commercial mortgage |
217,165 | 173,350 | 196,535 | |||||||||
Commercial and Industrial |
317,243 | 293,323 | 241,316 | |||||||||
Construction |
263,056 | 558,148 | 634,329 | |||||||||
Finance leases |
3,935 | 4,692 | 5,207 | |||||||||
Consumer |
45,456 | 48,916 | 44,834 | |||||||||
Total non-performing loans held for investment |
1,238,989 | 1,506,003 | 1,563,863 | |||||||||
REO |
84,897 | 82,706 | 69,304 | |||||||||
Other repossessed property |
14,023 | 15,824 | 12,898 | |||||||||
Investment securities (1) |
64,543 | 64,543 | 64,543 | |||||||||
Total non-performing assets, excluding loans held for sale |
$ | 1,402,452 | $ | 1,669,076 | $ | 1,710,608 | ||||||
Non-performing loans held for sale |
159,321 | | | |||||||||
Total non-performing assets, including loans held for sale |
$ | 1,561,773 | $ | 1,669,076 | $ | 1,710,608 | ||||||
Past due loans 90 days and still accruing |
$ | 144,114 | $ | 139,795 | $ | 165,936 | ||||||
Allowance for loan and lease losses |
$ | 553,025 | $ | 608,526 | $ | 528,120 | ||||||
Allowance to total non-performing loans held for investment |
44.64 | % | 40.41 | % | 33.77 | % | ||||||
Allowance to total non-performing loans held for investment, excluding loans held for sale and
residential real estate loans |
65.30 | % | 56.43 | % | 47.06 | % |
(1) | Collateral pledged with Lehman Brothers Special Financing, Inc. |
December 31, | September 30, | December 31, | ||||||||||
(Dollars in thousands) | 2010 | 2010 | 2009 | |||||||||
Puerto Rico: |
||||||||||||
Non-performing loans held for investment: |
||||||||||||
Residential mortgage |
$ | 330,737 | $ | 366,470 | $ | 376,018 | ||||||
Commercial mortgage |
177,617 | 123,550 | 128,001 | |||||||||
Commercial and Industrial |
307,608 | 284,684 | 229,039 | |||||||||
Construction |
196,948 | 463,052 | 385,259 | |||||||||
Finance leases |
3,935 | 4,692 | 5,207 | |||||||||
Consumer |
43,241 | 46,681 | 40,132 | |||||||||
Total non-performing loans held for investment |
1,060,086 | 1,289,129 | 1,163,656 | |||||||||
REO |
67,488 | 58,508 | 49,337 | |||||||||
Other repossessed property |
13,839 | 15,580 | 12,634 | |||||||||
Investment securities |
64,543 | 64,543 | 64,543 | |||||||||
Total non-performing assets, excluding loans held for sale |
$ | 1,205,956 | $ | 1,427,760 | $ | 1,290,170 | ||||||
Non-performing loans held for sale |
159,321 | | | |||||||||
Total non-performing assets, including loans held for sale |
$ | 1,365,277 | $ | 1,427,760 | $ | 1,290,170 | ||||||
Past due loans 90 days and still accruing |
$ | 142,756 | $ | 136,266 | $ | 128,016 | ||||||
Virgin Islands: |
||||||||||||
Non-performing loans held for investment: |
||||||||||||
Residential mortgage |
$ | 9,655 | $ | 9,961 | $ | 9,063 | ||||||
Commercial mortgage |
7,868 | 8,228 | 11,727 | |||||||||
Commercial and Industrial |
6,078 | 5,847 | 8,300 | |||||||||
Construction |
16,473 | 20,295 | 2,796 | |||||||||
Consumer |
927 | 1,064 | 3,540 | |||||||||
Total non-performing loans held for investment |
41,001 | 45,395 | 35,426 | |||||||||
REO |
2,899 | 1,203 | 470 | |||||||||
Other repossessed property |
108 | 196 | 221 | |||||||||
Total non-performing assets, excluding loans held for sale |
$ | 44,008 | $ | 46,794 | $ | 36,117 | ||||||
Non-performing loans held for sale |
| | | |||||||||
Total non-performing assets, including loans held for sale |
$ | 44,008 | $ | 46,794 | $ | 36,117 | ||||||
Past due loans 90 days and still accruing |
$ | 1,358 | $ | 952 | $ | 23,876 | ||||||
Florida: |
||||||||||||
Non-performing loans held for investment: |
||||||||||||
Residential mortgage |
$ | 51,742 | $ | 51,143 | $ | 56,561 | ||||||
Commercial mortgage |
31,680 | 41,572 | 56,807 | |||||||||
Commercial and Industrial |
3,557 | 2,792 | 3,977 | |||||||||
Construction |
49,635 | 74,801 | 246,274 | |||||||||
Consumer |
1,288 | 1,171 | 1,162 | |||||||||
Total non-performing loans held for investment |
137,902 | 171,479 | 364,781 | |||||||||
REO |
14,510 | 22,995 | 19,497 | |||||||||
Other repossessed property |
76 | 48 | 43 | |||||||||
Total non-performing assets, excluding loans held for sale |
$ | 152,488 | $ | 194,522 | $ | 384,321 | ||||||
Non-performing loans held for sale |
| | | |||||||||
Total non-performing assets, including loans held for sale |
$ | 152,488 | $ | 194,522 | $ | 384,321 | ||||||
Past due loans 90 days and still accruing |
$ | | $ | 2,577 | $ | 14,044 |
Quarter Ended | Year Ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
(Dollars in thousands) | 2010 | 2010 | 2009 | 2010 | 2009 | |||||||||||||||
Allowance for loan and lease losses, beginning of period |
$ | 608,526 | $ | 604,304 | $ | 471,484 | $ | 528,120 | $ | 281,526 | ||||||||||
Provision (recovery) for loan and lease losses: |
||||||||||||||||||||
Residential mortgage |
13,875 | 19,961 | 8,206 | 93,882 | 45,010 | |||||||||||||||
Commercial mortgage |
35,120 | (1) | 11,546 | 22,406 | 106,985 | (1) | 75,314 | |||||||||||||
Commercial and Industrial |
(334 | ) (2) | 27,280 | 28,003 | 60,786 | (2) | 142,244 | |||||||||||||
Construction |
133,230 | (3) | 48,451 | 64,196 | 321,379 | (3) | 264,246 | |||||||||||||
Consumer and finance leases |
14,456 | 13,244 | 14,376 | 51,555 | 53,044 | |||||||||||||||
Total provision for loan and lease losses |
196,347 | 120,482 | 137,187 | 634,587 | 579,858 | |||||||||||||||
Loans net charge-offs: |
||||||||||||||||||||
Residential mortgage |
(18,644 | ) | (13,109 | ) | (7,488 | ) | (62,718 | ) | (28,861 | ) | ||||||||||
Commercial mortgage |
(32,829 | ) (4) | (11,455 | ) | (5,221 | ) | (81,420 | ) (4) | (25,204 | ) | ||||||||||
Commercial and Industrial |
(28,752 | ) (5) | (19,926 | ) | (7,739 | ) | (98,473 | ) (5) | (34,508 | ) | ||||||||||
Construction |
(158,311 | ) (6) | (58,423 | ) | (44,906 | ) | (313,153 | ) (6) | (183,600 | ) | ||||||||||
Consumer and finance leases |
(13,312 | ) | (13,347 | ) | (15,197 | ) | (53,918 | ) | (61,091 | ) | ||||||||||
Net charge-offs |
(251,848 | ) | (116,260 | ) | (80,551 | ) | (609,682 | ) | (333,264 | ) | ||||||||||
Allowance for loan and lease losses, end of period |
$ | 553,025 | $ | 608,526 | $ | 528,120 | $ | 553,025 | $ | 528,120 | ||||||||||
Allowance for loan and lease losses to period end total loans receivable |
4.74 | % | 5.00 | % | 3.79 | % | 4.74 | % | 3.79 | % | ||||||||||
Net charge-offs (annualized) to average loans outstanding during the period |
8.27 | % | 3.74 | % | 2.34 | % | 4.76 | % | 2.48 | % | ||||||||||
Net charge-offs (annualized), excluding charge-offs related to loans transferred
to held for sale, to average loans outstanding during the period |
2.96 | % | 3.74 | % | 2.34 | % | 3.60 | % | 2.48 | % | ||||||||||
Provision for loan and lease losses to net charge-offs during the period |
0.78 | x% | 1.04 | x | 1.70 | x | 1.04 | x | 1.74 | x | ||||||||||
Provision for loan and lease losses to net charge-offs during the period, excluding
impact of loans transferred to held
for sale |
1.08 | x% | 1.04 | x | 1.70 | x | 1.20 | x | 1.74 | x |
(1) | Includes provision of $11.3 million associated with loans transferred to held for sale for the quarter and year ended December 31, 2010. | |
(2) | Includes provision of $8.6 million associated with loans transferred to held for sale for the quarter and year ended December 31, 2010. | |
(3) | Includes provision of $83.0 million associated with loans transferred to held for sale for the quarter and year ended December 31, 2010. | |
(4) | Includes net charge-offs totaling $29.5 million associated with loans transferred to held for sale for the quarter and year ended December 31, 2010. | |
(5) | Includes net charge-offs totaling $8.6 million associated with loans transferred to held for sale for the quarter and year ended December 31, 2010. | |
(6) | Includes net charge-offs totaling $127.0 million associated with loans transferred to held for sale for the quarter and year ended December 31, 2010. |
Year ended | ||||||||||||||||||||
December 31, | December 31, | December 31, | December 31, | December 31, | ||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Residential mortgage |
1.80 | % (1) | 0.82 | % | 0.19 | % | 0.03 | % | 0.04 | % | ||||||||||
Commercial mortgage |
5.02 | % (2) | 1.64 | % | 0.27 | % | 0.10 | % | 0.00 | % | ||||||||||
Commercial and Industrial |
2.16 | % (3) | 0.72 | % | 0.59 | % | 0.26 | % | 0.06 | % | ||||||||||
Construction |
23.80 | % (4) | 11.54 | % | 0.52 | % | 0.26 | % | 0.00 | % | ||||||||||
Consumer and finance leases |
2.98 | % | 3.05 | % | 3.19 | % | 3.48 | % | 2.90 | % | ||||||||||
Total loans |
4.76 | % (5) | 2.48 | % | 0.87 | % | 0.79 | % | 0.55 | % |
(1) | Includes net charge-offs totaling $7.8 million associated with non-performing residential mortgage loans sold in a bulk sale. | |
(2) | Includes net charge-offs totaling $29.5 million associated with loans transferred to held for sale. Commercial mortgage net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale, was 3.38%. | |
(3) | Includes net charge-offs totaling $8.6 million associated with loans transferred to held for sale. Commercial and Industrial net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale, was 1.98%. | |
(4) | Includes net charge-offs totaling $127.0 million associated with loans transferred to held for sale. Construction net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale, was 18.93%. | |
(5) | Includes net charge-offs totaling $165.1 million associated with loans transferred to held for sale. Total net charge-offs to average loans, excluding charge-offs associated with loans transferred to held for sale, was 3.60%. |