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| 8-K - FORM 8-K - FIRST BANCORP /PR/ | d575135d8k.htm |
 Investor
Presentation Investor Presentation
July 2013
July 2013
Exhibit 99.1 |
 Disclaimer
2
This presentation contains “forward-looking statements” concerning First
BanCorp’s (the “Corporation”) future economic performance. The words or phrases “would be,” “will allow,”
“intends to,” “will likely result,” “are expected to,”
“expect,” “anticipate,” “look forward,” “should,” “believes” and similar expressions are meant to identify “forward-looking
statements” within the meaning of Section 27A of the Private Securities Litigation Reform
Act of 1995, and are subject to the safe harbor created by such section. The Corporation
wishes to caution readers not to place undue reliance on any such “forward-looking
statements,” which speak only as of the date made, and to advise readers that various factors,
including, but not limited to, uncertainty about whether the Corporation and FirstBank Puerto
Rico (“FirstBank” or “the Bank”) will be able to fully comply with the written agreement
dated June 3, 2010 that the Corporation entered into with the Federal Reserve Bank of New York
(the “FED”) and the order dated June 2, 2010 (the “Order”) that FirstBank entered
into with the FDIC and the Office of the Commissioner of Financial Institutions of Puerto Rico
that, among other things, require FirstBank to maintain certain capital levels and reduce
its special mention, classified, delinquent and non-performing assets; the risk of being
subject to possible additional regulatory actions; uncertainty as to the availability of certain
funding sources, such as retail brokered CDs; the Corporation’s reliance on brokered CDs
and its ability to obtain, on a periodic basis, approval from the FDIC to issue brokered CDs to
fund operations and provide liquidity in accordance with the terms of the Order; the risk of
not being able to fulfill the Corporation’s cash obligations or resume paying dividends to
the Corporation’s stockholders in the future due to the Corporation’s inability to
receive approval from the FED to receive dividends from FirstBank or FirstBank’s failure to generate
sufficient cash flow to make a dividend payment to the Corporation; the strength or weakness
of the real estate markets and of the consumer and commercial credit sectors and their
impact on the credit quality of the Corporation’s loans and other assets, including the
Corporation’s construction and commercial real estate loan portfolios, which have contributed
and may continue to contribute to, among other things, the high levels of non-performing
assets, charge-offs and the provision expense and may subject the Corporation to further
risk from loan defaults and foreclosures; adverse changes in general economic conditions in
the United States and in Puerto Rico, including the interest rate scenario, market liquidity,
housing absorption rates, real estate prices and disruptions in the U.S. capital markets,
which may reduce interest margins, impact funding sources and affect demand for all of the
Corporation’s products and services and the value of the Corporation’s assets; an
adverse change in the Corporation’s ability to attract new clients and retain existing ones; a decrease
in demand for the Corporation’s products and services and lower revenues and earnings
because of the continued recession in Puerto Rico and the current fiscal problems and budget
deficit of the Puerto Rico government; uncertainty about regulatory and legislative changes
for financial services companies in Puerto Rico, the United States and the U.S. and British
Virgin Islands, which could affect the Corporation’s financial performance and could
cause the Corporation’s actual results for future periods to differ materially from prior results and
anticipated or projected results; uncertainty about the effectiveness of the various actions
undertaken to stimulate the United States economy and stabilize the United States’
financial markets, and the impact such actions may have on the Corporation’s business,
financial condition and results of operations; changes in the fiscal and monetary policies and
regulations of the federal government, including those determined by the Federal Reserve
System, the FDIC, government-sponsored housing agencies and regulators in Puerto Rico
and the U.S. and British Virgin Islands; the risk of possible failure or circumvention of
controls and procedures and the risk that the Corporation’s risk management policies may not be
adequate; the risk that the FDIC may further increase the deposit insurance premium and/or
require special assessments to replenish its insurance fund, causing an additional increase
in the Corporation’s non-interest expense; risks of not being able to recover the
assets pledged to Lehman Brothers Special Financing, Inc.; the impact on the Corporation’s results of
operations and financial condition associated with acquisitions and dispositions; a need to
recognize additional impairments on financial instruments or goodwill relating to
acquisitions; risks that downgrades in the credit ratings of the Corporation’s
long-term senior debt will adversely affect the Corporation’s ability to access necessary external funds; the
impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on the
Corporation’s businesses, business practices and cost of operations; and general competitive factors
and industry consolidation. The Corporation does not undertake, and specifically
disclaims any obligation, to update any “forward-looking statements” to reflect occurrences or
unanticipated events or circumstances after the date of such statements except as required by
the federal securities laws. Investors should refer to the Corporation’s Annual Report on
Form 10-K for the year ended December 31, 2012 for a discussion of such factors and
certain risks and uncertainties to which the Corporation is subject.
|
 Franchise
Overview Founded in 1948 (65 years)
Headquartered in San Juan, Puerto Rico
with operations in PR, Eastern Caribbean
(Virgin Islands) and Florida
A well diversified operation with over
650,000 retail & commercial customers
2nd largest financial holding company in
Puerto Rico with attractive business mix
and substantial loan market share
The largest bank in the Virgin Islands with
over 40% market share
Small presence in Florida serving south
Florida region
151 ATM machines and largest ATM
network in the Eastern Caribbean Region
~2,500 FTE employees
As of June 30, 2013
Eastern Caribbean Region or ECR includes United States and British Virgin Islands
FTE = Full Time Equivalent
Well diversified with significant competitive strengths
3
Total Assets -
$12.8B
Total Loans -
$9.7B
Total Deposits -
$10.0B
13 bank branches
1 Loan Production Office
Florida:
7% of Assets
14 bank branches
3 First Express branches
Eastern Caribbean:
7% of Assets |
 Franchise
Overview Our Turnaround Story
2H 2011
2012
1H 2013
June 3, 2010, First BanCorp
entered into the Written
Agreement with the FED
July 20, 2010, the U.S. Treasury
exchanged TARP for preferred,
which the FBP could compel
conversion upon completion
of capital raise
August 30, 2010, completed
exchange of 89% Series A-E
Noncumulative Perpetual
Preferred Stock for Common
During 2010 & 2011, the Company
initiated Strategic Plan focused on
the following initiatives: org.
restructuring, increasing capital,
de-risking balance sheet, enhancing
franchise value and the strength
governance & risk mgmt
January 7, 2011, one-for-
fifteen reverse stock split of
all outstanding shares of its
common stock
February 16, 2011, the Corporation
sold loans with a book value of
$270 million to a joint venture
with Goldman & CPG
On March 7, 2011, FBP continued
de-risking and de-leveraging and
sold approximately $330 million
of MBS intended to be held to
maturity.
Compelled the conversion of the 424,174
shares of the Corporation’s Series G
Preferred Stock, held by the U.S. Treasury,
into 32.9 million shares of common stock
During 2H 2011, continued
deleveraging and de-risking
strategies.
October 2011, completed a
$525 million capital raise
and converted the UST
to common stock.
May 30, 2012, the Corporation
reentered the credit card business
with the acquisition of an
approximate $406 million portfolio
of FirstBank-branded credit cards
from FIA.
Post capital raise, the Company shifted from a defensive to offensive
posture.
The Company returned to profitability in 2012 and generated $179 million
in pre-provision pre-tax income, a 38% increase compared to 2011. Through
organic workouts the Company reduced NPAs by $99mm & NPLs by
$165mm.
During the first quarter of 2013, the
Corporation entered into three
separate agreements to sell classified
and non-performing loans with an
aggregate carrying value of
approximately $309.7 million.
June 2013, announced the write-off of
$66.6 million collateral pledged to
Lehman , the bulk sale of a non-
performing pool of residential loans
with book value of $203.8 million, as
well as $19.2 million of OREO for $128.3
million in an all cash transaction.
2013 NPAs are down over $1 billion, or
58%, since the peak in Q1 10. Capital
ratios strong: Total RBC Ratio 16.6%;
Tier 1 Capital Ratio 15.3%; and
Leverage Ratio 11.3%. DTA of $523
million.
On October 7, 2011, the Corporation
successfully completed a private
placement of $525 million in shares of
common stock -
Lead investors
include funds affiliated with Thomas
H. Lee Partners & Oaktree Capital
Management.
4
During 2011, as part of de-
leveraging sold $518 million of
performing residential mortgages. |
 5
Core Franchise is Strong
Effectively executing Strategic Plan towards Profitability
Management focused on continued strengthening of the franchise and
executing on profitability levers
Franchise Value
Pre-tax pre-provision income $86.4 million YTD 2013 up 19% from 1H 2012
Stable Net
Interest
Margin
4.06%
in
6
months
ended
2013
compared
to
3.37%
for
the six months ended June 30, 2012
Expanding products mix and maximizing cross-selling opportunities
Growing core
deposits up $205 million in 2013
Reenergized loan production $1.8 billion originations 1H13 vs. $1.4 billion 1H12
Optimizing expenses; continued focus on operational excellence
Capital
Strong capital base, growing through earnings generation, to support continued
execution of Strategic Plan. $523 million Deferred Tax Asset Valuation Allowance.
Risk Management
Proactive approach to risk management
In compliance with Regulatory Agreements
Enhanced BOD talent with additional financial and risk management expertise
Balance Sheet
Improving risk profile;
focusing
on
reducing NPAs
•
Completed two bulk sales of adversely classified loans and OREO properties
with total book value of $441 million in first half of 2013
•
NPAs decreased for the 13 consecutive quarter
•
NPAs down 39% or $486 million YTD 2013
Executing
on
opportunities
to
reduce
cost
of
funds
•
$1.8 billion brokered CDs maturing in twelve months at average rate of 1.28%
th |
 Franchise
Overview Source: PR Market Share Report prepared with data provided by the Commissioner
of Financial Institutions of Puerto Rico as of 3/31/13. Unique challenger to Puerto
Rico’s largest player 6
Puerto Rico Total Assets
Puerto Rico Total Loans
Puerto Rico Deposits, Net of Brokered
($ in millions)
Strong and uniquely positioned market
franchise in densely populated operating
footprints
Strong market share in loan portfolios
facilitates customer relationship expansion and
cross sell to increase deposit share
Banking Branches
Wholesale Banking
Retail Banking
Consumer Lending
2
Mortgage Banking
Insurance
Retail Brokerage
3
Wholesale Brokerage
4
1 Puerto Rico only; 2 FirstBank acquired the FirstBank-branded credit card portfolio of
$391MM book balance as of June 30, 2012; 3 Provided through alliance with UBS; 4 Established primarily for
municipal financing
1
1
1
Puerto Rico
ECR
Florida
47
14
13
Portfolio
Balance
Market
Share
Portfolio
Balance
Market
Share
Portfolio
Balance
Market
Share
1
Banco Popular
$ 26,171
39.4%
1
Banco Popular
$ 19,586
38.1%
1
Banco Popular
$ 17,460
43.6%
2
FirstBank
9,879
14.9%
2
FirstBank
8,313
16.2%
2
Banco Santander
5,672
14.2%
3
Oriental Bank
7,489
11.3%
3
Scotiabank
5,481
10.7%
3
Oriental Bank
4,733
11.8%
4
Banco Santander
7,091
10.7%
4
Oriental Bank
5,302
10.3%
4
FirstBank
3,752
9.4%
5
Scotiabank
7,060
10.6%
5
Banco Santander
5,207
10.1%
5
Scotiabank
3,358
8.4%
6
Doral Bank
5,470
8.2%
6
Doral Bank
3,928
7.6%
6
Citibank
2,702
6.7%
7
Citibank
2,705
4.1%
7
Other
2,667
5.2%
7
Doral Bank
1,951
4.9%
8
Banco Cooperativo
514
0.8%
8
Citibank
746
1.5%
8
Banco Cooperativo
435
1.1%
9
BBU
9
0.0%
9
Banco Cooperativo
203
0.4%
9
BBU
21
0.1%
Total
66,390
$
100%
Total
51,433
$
100%
Total
40,084
$
100%
Institutions
Institutions
Institutions |
 Dec-09
Mar-13
Rank
18%
2
9%
4
21%
2
17%
3
22%
2
16%
2
6%
4
20%
2
2%
6
3%
3
8%
4
5%
4
10%
4
10%
4
15%
8%
20%
14%
19%
20%
14%
19%
10%
11%
10%
7%
9%
12%
85%
92%
80%
86%
81%
80%
86%
81%
90%
89%
90%
93%
91%
88%
Assets
Personal Loans
Commercial Loans
Construction
Auto/Leasing
Small Personal Loans
Mortgage Originations
Credit Cards
ACH Transactions
POS Terminals
ATM Terminals
Debit Cards
Deposits
Branches
FirstBank
Building Franchise Value
Targeted strategies for growth
7
Puerto Rico
Opportunities for ongoing market share gains on
selected products based on fair share of market
Largest opportunity on deposit products, electronic
banking & transaction services
Selected loan products growth for balanced
risk/return to manage risk concentration and
diversify income sources
Acquired FirstBank-branded credit card portfolio from
FIA Card Services, N.A.
Diversifies revenue stream and loan portfolio
composition
Opportunity to broaden and deepen relationships
Florida
Expansion prospects in Florida given long term
demographic trends
Continue focus in core deposit growth, commercial
and transaction banking and conforming residential
mortgages
Virgin Islands
Solidify leadership position by further increasing
customer share of wallet
1 Puerto Rico only
Source: Office of the Commissioner of Financial Institutions of Puerto Rico as of 3/31/13 and
internal reports; commercial loans include loans collateralized by real estate
Market
Share
in
Main
Market
1 |
 1 Total
Deposits excluding Brokered CDs Building Franchise Value
Successful deposits growth over recent years
8
($ in millions)
Core Deposits
Total Deposit Composition
Cost of Deposits
Core deposit growth strategy continues providing
positive results; $1.5B since 2009
Focus remains on cross-selling opportunities
Cost of interest bearing deposits, net of brokered CDs,
decreased to 0.93%
Reduced reliance on brokered CDs
–
33% of deposits are brokered CDs, down from
60% in 2009
$1.8 billion brokered CDs maturing in twelve months at
average rate of 1.28%
1
1 |
 Well Diversified
Loan Portfolio Continued focus on revenue generation through growth in
Consumer and Residential Mortgage market share & rebuilding
Commercial portfolio.
Strong origination activity at $1 billion for Q2 13:
Residential mortgages originations increased $33 million
Consumer loans originations increased $33 million
•
Auto loan originations increased $11 million
•
Personal loan originations increased $13 million
•
Credit card utilization activity of $96 million
Strong Origination Capabilities
9
($ in millions)
Loan Portfolio
Asset Composition
Loan Originations
Loans Held for Sale
Commercial
Construction
Consumer & Finance Leases
Residential Mortgage
1 Originations including refinancings and draws from existing revolving and non-revolving
commitments 1 |
 Focus on
Strategic Plan Rebuild earnings and de-risk Balance Sheet
10
($ in millions, except per share results)
2Q 2013 Highlights
Net loss of $122.6 million, or $0.60 per diluted share, including a $72.9 million loss related
to the bulk sale of assets and $66.6 million loss related to the write-off of
assets pledged as collateral with Lehman. Adjusted net income of $16.8 million, or $0.08
per diluted share, excluding the aforementioned items. Net interest margin increased by
8 basis points to 4.04%; 58 basis point increase YoY driven by further reductions in funding
costs.
Completed the bulk sale of a nonperforming pool of residential loans with book value of $203.8
million, as well as $19.2 million of
OREO for $128.3 million in an all cash transaction.
Completed sale of $40.8 million non-performing commercial mortgage loan (one of two
transactions moved to held for sale status in Q1) without incurring in additional
losses. Capital remains strong with total capital ratio, tier 1 and leverage of 16.6%,
15.3% and 11.3%, respectively Expect credit related expenses for the second half of 2013
to be lower than the first half by approximately $10 million
Income Statement
2Q 2012
3Q 2012
4Q 2012
1Q 2013
2Q 2013
GAAP Net Interest Income
108.7
$
125.5
$
125.6
$
124.5
$
126.9
$
Provision for loan and lease losses
24.9
29.0
30.5
111.1
87.5
Non-interest income
16.5
17.3
20.1
19.1
14.3
Impairment of collateral pledged to Lehman
(66.6)
Equity in (losses) gains of unconsolidated entities
(2.5)
(2.2)
(8.3)
(5.5)
0.6
Non-interest expense
86.9
91.8
90.9
98.0
111.3
Pre-tax net income (loss)
10.9
19.8
16.0
(71.0)
(123.6)
Income tax (expense) benefit
(1.5)
(0.8)
(1.5)
(1.6)
1.0
Net income (loss)
9.4
$
19.1
$
14.5
$
(72.6)
$
(122.6)
$
Adjusted Pre-tax pre-provision earnings
37.9
$
51.4
$
54.5
$
50.5
$
35.9
$
Net Interest Margin, (GAAP) (%)
3.46%
3.98%
3.91%
3.96%
4.04%
Net income (loss) per common share-basic
0.05
$
0.09
$
0.07
$
(0.35)
$
(0.60)
$
|
 1,639
506
1,790
1,087
752
$-
$1,800
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
Loans Held for Sale
Repossessed Assets & Other
NPLs Held for Investment
Improving Risk Profile
11
($ in millions)
Net Charge-offs
Non-performing Assets
1)
In 2010 there were $165 million of net charge-offs associated with the bulk sale to
CPG. Excluding the bulk sale net charge-offs for 2010 were $444 million.
2)
June 30, 2013.
3)
Net Carrying Amount = % of carrying value net of reserves and accumulated
charge-offs NPAs are down over $1 billion, or 58%, since the peak in Q1 10.
Total
NPLs
are
also
down
over
$1
billion,
or
73%,
since
the
peak
in
Q1
10.
1
st
Half of 12013:
Completed a bulk sale of adversely classified loans and OREO properties with a
book value of $217.7 million, including $185.0 million of non-performing
assets,
for
$120.2
million
in
a
cash
transaction.
Resulting
net
charge-
offs
$98.5 million.
Transferred $181.6 million of loans to held for sale resulting in net charge-offs
of $36.0 million. Completed sale of a $40.8 million loan held for sale.
Completed a bulk sale of nonperforming residential loans with book value of
$203.8 million, as well as $19.2 million of OREO, for $128.3 million in a cash
transaction. Resulting net charge-offs $98.0 million.
Recorded a non-cash charge of $66.6 million associated with the write-off of
the
carrying
value
and
accrued
interest
for
securities
pledged
to
Lehman.
2010
2011
2012
2013
Excl. Bulk Sales
Product
Book Value
Accumulated
Charge-offs
Reserves
Net Carrying
Amount
3
C & I
$129.1
$45.1
$28.2
57.9%
CRE
177.6
42.9
29.7
67.1%
Construction
125.1
104.5
15.6
47.7%
Total
$431.8
$192.5
$73.5
57.4%
Commercial Non-performing Loans (includes HFS)
2
Proactively Managing Asset Quality |
 12
Capital Position and Asset Quality
Asset
quality
remains
our
number
one
focus,
while
preserving
and
growing
capital.
Strong capital position: Total capital, Tier 1 capital and Leverage ratios of the
Corporation of 16.6%, 15.3% and 11.3%, respectively. $523
million
Deferred
Tax
Asset
Valuation
Allowance.
Core Franchise is Strong
9.5%
NPAs / Assets
8.4%
5.9%
13.3%
Total Capital Ratio
17.4%
16.6%
12.0%
Tier 1 Capital Ratio
16.2%
15.3%
8.4%
Leverage Ratio
12.1%
11.3%
0.0%
6.0%
12.0%
18.0%
Q1 10
Q2 10
Q3 10
Q4 10
Q1 11
Q2 11
Q3 11
Q4 11
Q1 12
Q2 12
Q3 12
Q4 12
Q1 13
Q2 13 |
 13
We are confident in the strength of our core franchise and in our ability to
successfully execute on our strategic plan.
Investment Opportunity
Focus on execution of our Strategic Plan & Drivers for Improved Profitability:
Asset Quality
remains our number one focus and our Special Assets group continues to
make progress. We will continue to closely manage our NPA book.
As NPAs continue to
roll-off,
we
will
re-deploy
thorough
growth
in
higher
yielding
consumer,
residential
and
commercial loan portfolio.
Profitability
$86.4 million of pre-tax pre-provision income for YTD 2013 compared to
$72.7 million same period 2012; Stable Net Interest Margin of 4.06% YTD 2013.
Continued focus on reduction in funding costs, optimization of expense base and
growth in noninterest income.
Loan Portfolio
focus on solid relationships with core balances toward achieving loan
portfolio growth. Origination activity over $1.8 billion YTD 2013.
Core Deposits
continue to grow, up $205 million YTD 2013, as we cross-sell with new
and enhanced product offering while reducing our reliance on brokered CDs.
–
–
–
–
Core Franchise is Strong |
 Exhibits
Exhibits
Investor Presentation
Investor Presentation
July 2013
July 2013 |
 15
Stock Profile
Trading Symbol:
•
FBP
Exchange:
•
NYSE
Share
Price
(7/26/13):
•
$7.96
Shares Outstanding:
•
206,982,105
Market Capitalization
(7/26/13):
•
$1.65 Billion
1 Yr. Average Daily Volume:
•
374,127
Price
(7/26/13)
to
Tangible
Book
(6/30/13):
•
1.50x
Beneficial Owner
Amount
Percent of
Class
Entities affiliated with Thomas H. Lee
Partners, L.P.
50,684,485
24.59%
Entities affiliated with Oaktree Capital
Management, L.P.
50,684,485
24.59%
Wellington Management Company, LLP.
20,336,087
9.87%
United States Department of the
Treasury¹
34,227,696
16.50%
5% or more Beneficial Ownership
1 Includes the U.S. Treasury warrant that entitles it to purchase up to 1,285,899 shares of
Common Stock at an exercise price of $3.29 per share, as adjusted as a result of the issuance of shares of
Common Stock in the Corporation’s recently completed $525MMprivate placement of Common
Stock (the “Capital Raise”). The exercise price and the number of shares issuable upon exercise
of the warrant are subject to further adjustments under certain circumstances to prevent
dilution. The warrant has a 10-year term from its issue date and is exercisable in whole or in part at
any time.
|
 16
Economic Activity
Adopted Fiscal Measures
Puerto Rico’s Planning Board most recent economic growth
projections of -0.4% and 0.2% for FY 2013 and FY 2014,
respectively.
The Government Development Bank’s Economic Activity Index
(EAI) for the month of May 2013 reflected a 3.4% decline
compared to May 2012.
EAI fiscal year-to-date as of May 2013 reflected a reduction of
0.5% compared to the same period during previous fiscal year.
Employment
•
June 2013 unemployment rate of 13.2% compared to June
2012 of 14.1%
•
Average unemployment rate for FY 2013 was 14.1% compared
to 15.2% during the same period for FY 2014.
Tourism
•
Recent tourism activity showing marked improvement as hotel
registrations were up 6.7% for the first eight months of FY
2013 compared to same period on previous year.
•
Hotel occupancy rate of 69.9% for the first eight months of FY
2013 up compared to average occupancy rate of 68.6% during
previous three fiscal years.
Public Private Partnerships (PPPs)
On June 26, 2013, the Board of Directors of the Puerto Rico
Public-Private Partnerships Authority (PPPA) announced plans to
move forward with the evaluation of strategic infrastructure
projects including a commuter train from San Juan to Caguas, new
correctional facilities, and key natural gas conversion projects
at
PREPA’s main generating plants.
Critical measures adopted by government to safeguard Puerto
Rico’s general obligations credit rating:
•
Extension of excise tax on multinational foreign corporations
(Act 154 of 2010) for five year period –
significant source of
revenue for General Fund.
•
Enacted meaningful Pension Reform to address unfunded
liability of major public pension system.
•
Adopted revenue enhancement measures to curtail
operational deficits at major public corporations and utilities
(i.e. Aqueduct and Sewer Authority and Highways and
Transportation Authority) to address continued needed
financial support from GDB.
Adopted FY 2014 Budget and General Fund Structural Deficit
On June 30, 2013, the Puerto Rico Government approved Act No.
40, which amended the Puerto Rico Internal Revenue Code of
2011, and Act No. 46 bringing several changes, among others:
•
Modification to sales and use tax regime (business-to-business)
•
New national gross receipts tax
•
Higher AMT rate
Adopted budget reduces projected general fund deficit to $820
million, or 8.6% of projected revenues, down from estimated $1.3
billion deficit as of end of FY 2013 and lowest projected deficit
compared to previous five fiscal years.
Budgeted revenue base for FY 2014 is expected to increase $1.380
billion as a result of adopted legislation to address structural
deficit.
Puerto Rico Market |
 Non-performing Assets
1 Collateral pledged with Lehman Brothers Special Financing, Inc.
17
($ in millions)
2009
2010
2011
2012
6/30/2013
Non-performing loans held for investment:
Residential mortgage
441,642
$
392,134
$
338,208
$
313,626
$
133,937
$
Commercial mortgage
196,535
217,165
240,414
214,780
136,737
Commercial & industrial
241,316
317,243
270,171
230,090
131,906
Construction
634,329
263,056
250,022
178,190
68,204
Consumer & finance leases
50,041
49,391
39,547
38,875
35,416
Total non-performing loans held for investment
1,563,863
1,238,989
1,138,362
975,561
506,200
OREO
69,304
84,897
114,292
185,764
139,257
Other repossessed property
12,898
14,023
15,392
10,107
11,503
Other assets
(1)
64,543
64,543
64,543
64,543
-
Total non-performing assets, excluding loans
held for sale 1,710,608
1,402,452
1,332,589
1,235,975
656,960
Non-performing loans held for sale
-
159,321
4,764
2,243
94,951
Total non-performing assets
1,710,608
$
1,561,773
$
1,337,353
$
1,238,218
$
751,911
$ |
  18
Adjusted Pre-tax, Pre-provision Income Reconciliation
($ in thousands)
2Q 2012
3Q 2012
4Q 2012
1Q 2013
2Q 2013
Income (loss) before income taxes
10,901
$
19,834
$
16,028
$
(71,011)
$
(123,562)
$
Add: Provision for loan and lease losses
24,884
28,952
30,466
111,123
87,464
Add: Net loss on investments and impairments
143
547
69
117
42
Less: Unrealized gain (loss) on derivatives instruments and
liabilities measured at fair value
(506)
(170)
(432)
(400)
(708)
Add: Bulk sales related expenses and other professional fees related
to the terminated preferred stock exchange offer
-
-
-
5,096
3,198
Add: Loss on certain OREO properties sold as part of the bulk sale
of non-performing residential mortgage assets
-
-
-
-
1,879
Add: National gross tax receipts tax corresponding to Q1 2013
recorded during Q2 2013 after enactment
-
-
-
-
1,656
Add: write-off of collateral pledged to Lehman
-
-
-
-
66,574
Add: Equity in losses (earnings) of unconsolidated entities
2,491
2,199
8,330
5,538
(648)
Adjusted Pre-tax, pre-provision income
37,913
$
51,362
$
54,461
$
50,463
$
35,895
$
Quarter Ended |
  19
Increase of $8.1 million in credit
related expenses:
–
$1.9 million loss on OREO sales as part
of the bulk sale transaction
–
$5.3 million in fair value adjustment of
almost all commercial OREOs in the VI
$3.2 million impact of new tax on
gross revenues enacted by the PR tax
authorities. Includes $1.7 million
retroactive impact from Q1 13.
Increase of $2.7 million in outsourcing
technology services to FIS, partially
offset by savings of $1.8 million in
compensation expense and computer
applications maintenance fees
through the relationship with FIS.
($ in millions)
Q1 13
Q2 13
Credit related expenses
9.2
$
17.3
$
Bulk sale professional fees
3.9
3.1
Terminated preferred stock exchange
1.1
0.1
Outsourcing technology services
1.3
4.3
Taxes other than income tax
3.0
6.2
All other expenses
79.5
80.3
Total
98.0
$
111.3
$
Results of Operations –
Operating Expenses |