First BanCorp. (the “Corporation”) (NYSE: FBP), the bank holding company
for FirstBank Puerto Rico (“FirstBank” or “the Bank”), today reported
net income of $23.2 million for the third quarter of 2014, or $0.11 per
diluted share, compared to $21.2 million, or $0.11 per diluted share,
for the second quarter of 2014 and $15.9 million, or $0.08 per diluted
share, for the third quarter of 2013.
Aurelio Alemán, President and Chief Executive Officer of First BanCorp.,
commented: “We are very pleased to report net income of $23.2 million
for the third quarter of 2014, a 46% increase compared to the third
quarter of 2013 and our highest net income since returning to
profitability. Our pre-tax, pre-provision income was strong at $50.8
million for the third quarter, up $2.1 million compared to the second
quarter of 2014. The third quarter was highlighted by increased
origination activity in commercial and residential loans and over $105
million in core deposit growth.”
Mr. Alemán continued, “Despite the still challenging economic
environment and its impact on the consumer in Puerto Rico, we have
stayed the course in the execution of our strategies. While our overall
loan portfolio declined slightly due to some pay downs of commercial
loans and lower consumer loan volumes, our pipeline remains stable. We
continue to proactively manage our expense base and implement efficiency
initiatives. Our non-performing assets and loans declined slightly this
quarter. We also saw a decrease in inflows of non-performing loans as
well as a decrease in adversely classified loans compared to the second
quarter of 2014.”
Mr. Alemán stated further: “Earnings generation over the past three
quarters has strengthened our capital position. Asset quality
improvement remains our top priority, we will continue to invest in our
franchise and improve operating efficiency, and evaluate market
opportunities in order to achieve consistent, profitable growth in the
future and generate appropriate returns for our shareholders.”
This press release includes certain non-GAAP financial measures,
including adjusted pre-tax, pre-provision income, adjusted net interest
income and margin, and certain capital ratios and should be read in
conjunction with the accompanying tables (Exhibit A), which are an
integral part of this press release.
ADJUSTED PRE-TAX, PRE-PROVISION INCOME TRENDS
One metric that management believes is useful in analyzing performance
is the level of earnings adjusted to exclude tax expense, the provision
for loan and lease losses, securities gains or losses, fair value
adjustments on derivatives measured at fair value and equity in earnings
or loss of unconsolidated entity, which is a non-GAAP financial measure.
In addition, from time to time, earnings are adjusted also for items
judged by management to be outside of ordinary banking activities and/or
for items that, while they may be associated with ordinary banking
activities, are so unusually large that management believes that a
complete analysis of the Corporation’s performance requires
consideration also of results that exclude such amounts (for additional
information about this non-GAAP financial measure, see “Adjusted
Pre-Tax, Pre-Provision Income” in “Basis of Presentation”).
The following table reconciles income before income taxes to adjusted
pre-tax, pre-provision income for the last five quarters including
adjusted pre-tax, pre-provision income of $50.8 million in the third
quarter of 2014, up $2.1 million from the prior quarter:
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
Quarter Ended
|
|
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
$
|
23,265
|
|
|
$
|
20,949
|
|
|
$
|
17,970
|
|
|
$
|
15,634
|
|
|
$
|
19,616
|
|
|
Add: Provision for loan and lease losses
|
|
|
26,999
|
|
|
|
26,744
|
|
|
|
31,915
|
|
|
|
22,969
|
|
|
|
22,195
|
|
|
Add/Less: Net loss (gain) on investments and impairments
|
|
|
245
|
|
|
|
(291
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Unrealized gain on derivative instruments
|
|
|
(418
|
)
|
|
|
(262
|
)
|
|
|
(313
|
)
|
|
|
(355
|
)
|
|
|
(232
|
)
|
|
Add: Acquisitions of mortgage loans from Doral related expenses
|
|
|
659
|
|
|
|
576
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Add: Secondary offering costs (1)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,669
|
|
|
Add: Credit card processing platform conversion costs
|
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|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
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1,715
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|
|
Less: National gross receipt tax - outside Puerto Rico (2)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(473
|
)
|
|
|
-
|
|
|
Add: Branch consolidations and restructuring expenses/valuation
adjustments
|
|
|
-
|
|
|
|
236
|
|
|
|
718
|
|
|
|
1,421
|
|
|
|
-
|
|
|
Add: Loss contingency - attorneys' fees Lehman litigation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,500
|
|
|
|
-
|
|
|
Add/Less: Equity in loss (earnings) of unconsolidated entity
|
|
|
-
|
|
|
|
670
|
|
|
|
6,610
|
|
|
|
5,893
|
|
|
|
5,908
|
|
|
Adjusted pre-tax, pre-provision income (3)
|
|
$
|
50,750
|
|
|
$
|
48,622
|
|
|
$
|
56,900
|
|
|
$
|
47,589
|
|
|
$
|
50,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change from most recent prior quarter-amount
|
|
$
|
2,128
|
|
|
$
|
(8,278
|
)
|
|
$
|
9,311
|
|
|
$
|
(3,282
|
)
|
|
$
|
14,976
|
|
|
Change from most recent prior quarter-percentage
|
|
|
4.4
|
%
|
|
|
-14.5
|
%
|
|
|
19.6
|
%
|
|
|
-6.5
|
%
|
|
|
41.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Offering of common stock by certain of the Corporation's
existing stockholders.
|
|
(2) Represents the impact of the national gross receipts tax related
to the trade or business outside of Puerto Rico that was reversed in
the fourth quarter of 2013 after enactment of Act No. 117.
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|
(3) See "Basis of Presentation" for definition.
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The increase in adjusted pre-tax, pre-provision income from the 2014
second quarter primarily reflected:
-
A $4.4 million decrease in adjusted non-interest expenses of $92.9
million for the third quarter of 2014, as compared to adjusted
non-interest expenses of $97.3 million for the second quarter of 2014,
primarily due to a $2.5 million decrease in OREO losses and related
operating expenses, a $1.2 million decrease in the deposit insurance
assessment and a $1.1 million decrease in employees’ compensation and
benefits expense. See Non-Interest Expenses section below for
additional information.
Adjusted non-interest expenses in the last two quarters exclude: (i)
professional service fees related to acquisitions of mortgage loans from
Doral Financial Corporation ("Doral"); and (ii) expenses related to
branch consolidations and other restructuring efforts. See Basis of
Presentation section below for a reconciliation of this non-GAAP
financial measure to the corresponding GAAP measure.
-
A $0.1 million increase in adjusted non-interest income of $16.4
million for the third quarter of 2014, as compared to $16.3 million
for the second quarter of 2014, reflecting a $0.8 million increase in
revenues from the mortgage banking business, partially offset by
decreases in insurance commission income as well as credit and debit
cards fee income.
Adjusted non-interest income excludes the equity in earnings (loss) of
unconsolidated entity, gain or loss on sales of investment securities
and other-than-temporary impairment (“OTTI”) on investment securities.
See Basis of Presentation section below for a reconciliation of
this non-GAAP financial measure to the corresponding GAAP measure.
Partially offset by:
-
A $2.4 million decrease in net interest income, excluding fair value
adjustments, mainly driven by faster prepayment rates on U.S. agency
MBS investments and a decrease in the average yield on consumer loans.
See Net Interest Income discussion below for additional
information.
NET INTEREST INCOME
Net interest income, excluding fair value adjustments on derivatives
(“valuations”), and net interest income on a tax-equivalent basis are
non-GAAP measures. (See “Basis of Presentation – Net Interest
Income, Excluding Valuations and on a Tax-Equivalent Basis” below
for additional information.) The following table reconciles net
interest income in accordance with GAAP to net interest income,
excluding valuations, and net interest income on a tax-equivalent basis.
The table also reconciles net interest spread and net interest margin on
a GAAP basis to these items excluding valuations and on a tax-equivalent
basis.
|
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|
|
|
|
|
|
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
September 30,
2014
|
|
June 30,
2014
|
|
March 31,
2014
|
|
December 31,
2013
|
|
September 30,
2013
|
|
Net Interest Income
|
|
|
|
|
|
|
|
|
|
|
|
Interest Income - GAAP
|
|
$
|
156,662
|
|
|
$
|
158,423
|
|
|
$
|
160,571
|
|
|
$
|
162,690
|
|
|
$
|
162,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain on derivative instruments
|
|
|
(418
|
)
|
|
|
(262
|
)
|
|
|
(313
|
)
|
|
|
(355
|
)
|
|
|
(232
|
)
|
|
Interest income excluding valuations
|
|
|
156,244
|
|
|
|
158,161
|
|
|
|
160,258
|
|
|
|
162,335
|
|
|
|
161,971
|
|
|
Tax-equivalent adjustment
|
|
|
3,995
|
|
|
|
5,005
|
|
|
|
5,223
|
|
|
|
5,122
|
|
|
|
4,420
|
|
|
Interest income on a tax-equivalent basis excluding valuations
|
|
|
160,239
|
|
|
|
163,166
|
|
|
|
165,481
|
|
|
|
167,457
|
|
|
|
166,391
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense - GAAP
|
|
|
28,968
|
|
|
|
28,516
|
|
|
|
29,251
|
|
|
|
30,031
|
|
|
|
31,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income - GAAP
|
|
$
|
127,694
|
|
|
$
|
129,907
|
|
|
$
|
131,320
|
|
|
$
|
132,659
|
|
|
$
|
130,905
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income excluding valuations
|
|
$
|
127,276
|
|
|
$
|
129,645
|
|
|
$
|
131,007
|
|
|
$
|
132,304
|
|
|
$
|
130,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income on a tax-equivalent basis excluding valuations
|
|
$
|
131,271
|
|
|
$
|
134,650
|
|
|
$
|
136,230
|
|
|
$
|
137,426
|
|
|
$
|
135,093
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Balances
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases
|
|
$
|
9,476,576
|
|
|
$
|
9,560,792
|
|
|
$
|
9,662,735
|
|
|
$
|
9,665,013
|
|
|
$
|
9,639,612
|
|
|
Total securities and other short-term investments
|
|
|
2,768,923
|
|
|
|
2,811,178
|
|
|
|
2,816,253
|
|
|
|
2,719,241
|
|
|
|
2,719,973
|
|
|
Average Interest-Earning Assets
|
|
$
|
12,245,499
|
|
|
$
|
12,371,970
|
|
|
$
|
12,478,988
|
|
|
$
|
12,384,254
|
|
|
$
|
12,359,585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Interest-Bearing Liabilities
|
|
$
|
10,245,634
|
|
|
$
|
10,395,437
|
|
|
$
|
10,542,793
|
|
|
$
|
10,450,671
|
|
|
$
|
10,409,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Yield/Rate
|
|
|
|
|
|
|
|
|
|
|
|
Average yield on interest-earning assets - GAAP
|
|
|
5.08
|
%
|
|
|
5.14
|
%
|
|
|
5.22
|
%
|
|
|
5.21
|
%
|
|
|
5.21
|
%
|
|
Average rate on interest-bearing liabilities - GAAP
|
|
|
1.12
|
%
|
|
|
1.10
|
%
|
|
|
1.13
|
%
|
|
|
1.14
|
%
|
|
|
1.19
|
%
|
|
Net interest spread - GAAP
|
|
|
3.96
|
%
|
|
|
4.04
|
%
|
|
|
4.09
|
%
|
|
|
4.07
|
%
|
|
|
4.02
|
%
|
|
Net interest margin - GAAP
|
|
|
4.14
|
%
|
|
|
4.21
|
%
|
|
|
4.27
|
%
|
|
|
4.25
|
%
|
|
|
4.20
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average yield on interest-earning assets excluding valuations
|
|
|
5.06
|
%
|
|
|
5.13
|
%
|
|
|
5.21
|
%
|
|
|
5.20
|
%
|
|
|
5.20
|
%
|
|
Average rate on interest-bearing liabilities excluding valuations
|
|
|
1.12
|
%
|
|
|
1.10
|
%
|
|
|
1.13
|
%
|
|
|
1.14
|
%
|
|
|
1.19
|
%
|
|
Net interest spread excluding valuations
|
|
|
3.94
|
%
|
|
|
4.03
|
%
|
|
|
4.08
|
%
|
|
|
4.06
|
%
|
|
|
4.01
|
%
|
|
Net interest margin excluding valuations
|
|
|
4.12
|
%
|
|
|
4.20
|
%
|
|
|
4.26
|
%
|
|
|
4.24
|
%
|
|
|
4.19
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average yield on interest-earning assets on a tax-equivalent basis
and excluding valuations
|
|
|
5.19
|
%
|
|
|
5.29
|
%
|
|
|
5.38
|
%
|
|
|
5.36
|
%
|
|
|
5.34
|
%
|
|
Average rate on interest-bearing liabilities excluding valuations
|
|
|
1.12
|
%
|
|
|
1.10
|
%
|
|
|
1.13
|
%
|
|
|
1.14
|
%
|
|
|
1.19
|
%
|
|
Net interest spread on a tax-equivalent basis and excluding
valuations
|
|
|
4.07
|
%
|
|
|
4.19
|
%
|
|
|
4.25
|
%
|
|
|
4.22
|
%
|
|
|
4.15
|
%
|
|
Net interest margin on a tax-equivalent basis and excluding
valuations
|
|
|
4.25
|
%
|
|
|
4.37
|
%
|
|
|
4.43
|
%
|
|
|
4.40
|
%
|
|
|
4.34
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income, excluding valuations, amounted to $127.3 million, a
decrease of $2.4 million when compared to the second quarter of 2014.
The net interest margin decreased to 4.12% for the third quarter of 2014
from 4.20% for the second quarter of 2014. The decreases in net interest
income and margin were mainly due to:
-
A 39 basis point decrease in the average yield of consumer loans, or a
decrease of approximately $2.1 million in interest income, as the
remaining discount of $1.5 million of the credit card portfolio
acquired in 2012 was fully accreted to income during the second
quarter of 2014. The decrease also reflects the impact of new loan
originations booked at lower rates than the average yield of loans
that are maturing given the current level of interest rates.
-
A 35 basis point decrease in the average yield of MBS investments, or
a decrease of approximately $1.5 million in interest income,
attributable to faster prepayment rates on U.S. agency MBS investments
purchased at a premium.
-
A $1.1 million decrease in interest income attributable to the $126.5
million reduction in total average earning assets.
-
A 16 basis point increase in the average cost of repurchase
agreements, or an increase of approximately $0.4 million in interest
expense, attributable to the contractual repricing of a $100 million
agreement.
Partially offsetting the aforementioned items were:
-
Increased interest income reflecting the full quarter impact of the
acquisition of mortgage loans from Doral in full satisfaction of
secured borrowings on May 30, 2014. The interest income recorded on
such loans was approximately $1.8 million higher than the interest
income recorded in the second quarter on previous commercial secured
borrowings.
-
An increase in net interest income of approximately $0.7 million
related to the impact of one additional day in the current quarter.
-
A $0.3 million decrease in interest expense attributable to the $149.8
million reduction on total interest-bearing liabilities, primarily
reflecting the full quarter impact of government deposit withdrawals
by public corporations in Puerto Rico in the latter part of the second
quarter of 2014.
PROVISION FOR LOAN AND LEASE LOSSES
The provision for loan and lease losses for the third quarter of 2014
was $27.0 million, an increase of $0.3 million, compared to $26.7
million for the second quarter of 2014. The Corporation recorded a
negative provision for loan losses of $7.1 million for the commercial
and construction loan portfolio in Florida compared to a negative
provision of $10.5 million in the second quarter of 2014. Despite higher
loan loss recoveries, the variance in the provision mainly reflects the
impact in the previous quarter of reserve releases related to updated
appraisals.
The provision for residential mortgage loans in the third quarter of
2014 increased by $2.0 million to $5.9 million compared to the second
quarter of 2014 primarily due to an increase in charge-offs and the
overall increase in portfolio size. The provision for consumer loans of
$19.0 million in the third quarter of 2014 remained relatively flat as
compared to the second quarter of 2014, an increase of $0.2 million.
The provision for commercial and construction loans in Puerto Rico in
the third quarter of 2014 decreased by $5.3 million to $8.9 million
compared to the second quarter of 2014 mainly related to lower specific
reserve requirements on certain noncollateral dependent loans, including
the specific reserve of a commercial and industrial loan determined
impaired during the third quarter that was less than the estimated loss
previously held as part of the general reserve, partially offset by an
increase in net charge-offs of commercial and industrial loans and the
impact in the previous quarter of a $4.8 million reserve release
associated with the enhancements to the general allowance estimation
process.
See Credit Quality discussion below for additional information
regarding the allowance for loan and lease losses, including variances
in charge-offs and loss recoveries.
NON-INTEREST INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
(In thousands)
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts
|
|
$
|
3,235
|
|
|
$
|
3,290
|
|
|
$
|
3,203
|
|
|
$
|
3,162
|
|
|
$
|
3,157
|
|
|
|
Mortgage banking activities
|
|
|
3,809
|
|
|
|
3,036
|
|
|
|
3,368
|
|
|
|
3,906
|
|
|
|
3,521
|
|
|
|
Net (loss) gain on investments and impairments
|
|
|
(245
|
)
|
|
|
291
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
Broker-dealer income
|
|
|
-
|
|
|
|
-
|
|
|
|
459
|
|
|
|
97
|
|
|
|
-
|
|
|
|
Branch consolidations - valuation adjustments on fixed assets
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(529
|
)
|
|
|
-
|
|
|
|
Other operating income
|
|
|
9,375
|
|
|
|
9,984
|
|
|
|
10,930
|
|
|
|
11,742
|
|
|
|
9,290
|
|
|
|
Equity in (loss) earnings of unconsolidated entity
|
|
|
-
|
|
|
|
(670
|
)
|
|
|
(6,610
|
)
|
|
|
(5,893
|
)
|
|
|
(5,908
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest income
|
|
$
|
16,174
|
|
|
$
|
15,931
|
|
|
$
|
11,350
|
|
|
$
|
12,485
|
|
|
$
|
10,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest income for the third quarter of 2014 amounted to $16.2
million, compared to $15.9 million for the second quarter of 2014. The
increase was primarily due to:
-
A $0.8 million increase in revenues from the mortgage banking
business, primarily related to a $0.5 million decrease in losses
related to compensatory fees imposed by government-sponsored agencies,
and a $0.5 million decrease in mark-to-market losses on
to-be-announced (“TBA”) MBS forward contracts used to hedge the
securitization pipeline.
The aforementioned were partially offset by a $0.2 million decrease in
realized gains on loan sales and securitization activities attributable
to lower sales. Loans sold and securitized in the secondary market to
government-sponsored entities in the third quarter of 2014 amounted to
$75.1 million with a related gain of $2.7 million, compared to $83.1
million and a gain of $2.9 million recorded in the second quarter of
2014.
-
A $0.7 million positive variance related to the accounting for the
Bank’s investment in CPG/GS PR NPL, LLC (“CPG/GS”). The equity in loss
of unconsolidated entity of $0.7 million recorded in the second
quarter of 2014 reduced to zero the book value of the Bank’s
investment in CPG/GS. The Bank holds a 35% subordinated ownership
interest in CPG/GS, the entity that purchased $269.2 million of loans
from FirstBank in 2011. This investment is accounted for under the
equity method and following the hypothetical liquidation book value
(“HLBV”) method to determine the Bank’s share in CPG/GS earnings or
losses.
Partially offset by:
-
A $0.4 million decrease in other operating income that includes
reductions in credit and debit card fees, merchant fees and losses on
sales of certain fixed assets.
-
The impact in the previous quarter of the $0.3 million gain on sale of
investments recorded in connection with the sale of a $4.6 million
Puerto Rico government agency bond.
-
A $0.2 million decrease in insurance commission income.
-
A $0.2 million other-than-temporary impairment on private label MBS.
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
(In thousands)
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employees' compensation and benefits
|
|
$
|
33,964
|
|
$
|
35,023
|
|
$
|
32,942
|
|
$
|
31,062
|
|
$
|
32,823
|
|
|
Occupancy and equipment
|
|
|
14,727
|
|
|
14,246
|
|
|
13,600
|
|
|
15,204
|
|
|
15,109
|
|
|
Deposit insurance premium
|
|
|
8,335
|
|
|
9,579
|
|
|
9,822
|
|
|
10,495
|
|
|
10,479
|
|
|
Other insurance and supervisory fees
|
|
|
1,158
|
|
|
1,205
|
|
|
1,168
|
|
|
957
|
|
|
1,034
|
|
|
Taxes, other than income taxes
|
|
|
4,528
|
|
|
4,504
|
|
|
4,575
|
|
|
4,101
|
|
|
4,718
|
|
|
Professional fees :
|
|
|
|
|
|
|
|
|
|
|
|
|
Collections, appraisals and other credit related fees
|
|
|
2,480
|
|
|
2,363
|
|
|
1,345
|
|
|
2,198
|
|
|
2,780
|
|
|
Outsourcing technology services
|
|
|
4,840
|
|
|
4,600
|
|
|
4,214
|
|
|
4,202
|
|
|
4,338
|
|
|
Other professional fees
|
|
|
3,554
|
|
|
3,843
|
|
|
4,481
|
|
|
4,845
|
|
|
4,086
|
|
|
Credit and debit card processing expenses
|
|
|
3,741
|
|
|
3,882
|
|
|
3,824
|
|
|
4,869
|
|
|
2,682
|
|
|
Credit card processing platform conversion costs
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,715
|
|
|
Branch consolidations and restructuring expenses
|
|
|
-
|
|
|
236
|
|
|
718
|
|
|
892
|
|
|
-
|
|
|
Business promotion
|
|
|
3,925
|
|
|
4,142
|
|
|
3,973
|
|
|
5,251
|
|
|
3,478
|
|
|
Communications
|
|
|
2,143
|
|
|
1,894
|
|
|
1,879
|
|
|
1,836
|
|
|
1,866
|
|
|
Net loss on OREO operations
|
|
|
4,326
|
|
|
6,778
|
|
|
5,837
|
|
|
13,321
|
|
|
7,052
|
|
|
Acquisitions of loans from Doral related expenses
|
|
|
659
|
|
|
576
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
Secondary offering costs
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,669
|
|
|
Loss contingency for attorneys' fees - Lehman litigation
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
2,500
|
|
|
-
|
|
|
Other
|
|
|
5,224
|
|
|
5,274
|
|
|
4,407
|
|
|
4,808
|
|
|
5,325
|
|
|
Total
|
|
$
|
93,604
|
|
$
|
98,145
|
|
$
|
92,785
|
|
$
|
106,541
|
|
$
|
99,154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest expenses in the third quarter of 2014 amounted to $93.6
million, a decrease of $4.5 million from $98.1 million for the second
quarter of 2014. The main drivers of the decrease were:
-
A $2.5 million decrease in losses on OREO properties and related
operating expenses. Total write-downs on OREO properties in the third
quarter of 2014 amounted to $2.8 million compared to $5.2 million for
the second quarter of 2014, a decrease of $2.4 million.
-
A $1.2 million decrease in the deposit insurance assessment driven by
improvements in liquidity, a decrease in leverage commercial loans
balance, a strengthened capital position, and a decrease in average
assets.
-
A $1.1 million decrease in employees’ compensation and benefit
expenses primarily due to a reduction in performance-based
compensation and stock-based compensation expense.
INCOME TAXES
The Corporation recorded an income tax expense for the third quarter of
2014 of $0.1 million compared to an income tax benefit of $0.3 million
for the second quarter of 2014. The income tax benefit in the previous
quarter mainly resulted from the $1.8 million adjustment recorded to
reduce the liability for uncertain tax positions of prior years that was
partially offset by a $1.0 million charge to the Alternative Minimum Tax
(“AMT”) expense in the second quarter. Under the Puerto Rico Internal
Revenue Code, the Corporation and its subsidiaries are treated as
separate taxable entities and are not entitled to file consolidated tax
returns and, thus, the Corporation is not able to utilize losses from
one subsidiary to offset gains in another subsidiary. As of September
30, 2014, the deferred tax asset, net of a valuation allowance of $505.2
million, amounted to $9.9 million.
CREDIT QUALITY
Non-Performing Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
Non-performing loans held for investment:
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage
|
|
$
|
185,025
|
|
|
$
|
175,404
|
|
|
$
|
172,796
|
|
|
$
|
161,441
|
|
|
$
|
142,002
|
|
|
|
Commercial mortgage
|
|
|
169,967
|
|
|
|
166,218
|
|
|
|
145,535
|
|
|
|
120,107
|
|
|
|
127,374
|
|
|
|
Commercial and Industrial
|
|
|
130,917
|
|
|
|
143,669
|
|
|
|
113,996
|
|
|
|
114,833
|
|
|
|
127,584
|
|
|
|
Construction
|
|
|
30,111
|
|
|
|
38,830
|
|
|
|
50,387
|
|
|
|
58,866
|
|
|
|
64,241
|
|
|
|
Consumer and Finance leases
|
|
|
43,496
|
|
|
|
40,510
|
|
|
|
39,061
|
|
|
|
40,302
|
|
|
|
37,184
|
|
|
|
Total non-performing loans held for investment
|
|
|
559,516
|
|
|
|
564,631
|
|
|
|
521,775
|
|
|
|
495,549
|
|
|
|
498,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OREO
|
|
|
112,803
|
|
|
|
121,842
|
|
|
|
138,622
|
|
|
|
160,193
|
|
|
|
133,284
|
|
|
Other repossessed property
|
|
|
17,467
|
|
|
|
16,114
|
|
|
|
15,587
|
|
|
|
14,865
|
|
|
|
14,125
|
|
|
|
Total non-performing assets, excluding loans held for sale
|
|
$
|
689,786
|
|
|
$
|
702,587
|
|
|
$
|
675,984
|
|
|
$
|
670,607
|
|
|
$
|
645,794
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing loans held for sale
|
|
|
54,641
|
|
|
|
54,755
|
|
|
|
54,755
|
|
|
|
54,801
|
|
|
|
80,234
|
|
|
|
Total non-performing assets, including loans held for sale (1)
|
|
$
|
744,427
|
|
|
$
|
757,342
|
|
|
$
|
730,739
|
|
|
$
|
725,408
|
|
|
$
|
726,028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Past-due loans 90 days and still accruing (2)
|
|
$
|
143,535
|
|
|
$
|
143,916
|
|
|
$
|
118,049
|
|
|
$
|
120,082
|
|
|
$
|
127,735
|
|
|
Non-performing loans held for investment to total loans held for
investment
|
|
|
6.01
|
%
|
|
|
5.96
|
%
|
|
|
5.45
|
%
|
|
|
5.14
|
%
|
|
|
5.24
|
%
|
|
Non-performing loans to total loans
|
|
|
6.54
|
%
|
|
|
6.49
|
%
|
|
|
5.98
|
%
|
|
|
5.67
|
%
|
|
|
6.01
|
%
|
|
Non-performing assets, excluding non-performing loans held for
sale to total assets, excluding non-performing loans held for sale
|
|
|
5.48
|
%
|
|
|
5.63
|
%
|
|
|
5.30
|
%
|
|
|
5.32
|
%
|
|
|
5.08
|
%
|
|
Non-performing assets to total assets
|
|
|
5.89
|
%
|
|
|
6.05
|
%
|
|
|
5.70
|
%
|
|
|
5.73
|
%
|
|
|
5.68
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Purchased credit impaired loans of $104.3 million accounted
for under ASC 310-30 as of September 30, 2014, primarily mortgage
loans acquired from Doral in the second quarter of 2014, are
excluded and not considered non-performing due to the application
of the accretion method, under which these loans will accrete
interest income over the remaining life of the loans using
estimated cash flow analysis.
|
|
(2) Amount includes purchased credit impaired loans with
individual delinquencies over 90 days and still accruing with a
carrying value as of September 30, 2014 of approximately $15.6
million, primarily related to loans acquired from Doral.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit quality metrics variances:
-
Total non-performing assets decreased to $744.4 million as of
September 30, 2014, compared to $757.3 million as of June 30, 2014.
Total non-performing loans, including non-performing loans held for
sale, decreased by $5.2 million, or 1%, from the second quarter of
2014. The decrease was primarily driven by charge-offs of commercial
and industrial and construction loans in both Puerto Rico and the
Virgin Islands regions, partially offset by increases in consumer,
residential and commercial mortgage non-performing loans. The largest
individual relationship placed in non-performing status during the
third quarter of 2014 was a $4.7 million defaulted commercial mortgage
restructured loan.
-
Inflows of non-performing loans held for investment decreased by $59.1
million, or 42%, compared to inflows in the second quarter of 2014.
This decrease was primarily reflected in the commercial and industrial
and commercial mortgage portfolios, a decrease of $64.6 million. These
decreases were partially offset by an increase in inflows of
non-performing residential mortgage loans of $5.7 million.
-
Adversely classified commercial and construction loans held for
investment decreased by $35.0 million to $571.4 million, or 6%, from
the second quarter of 2014.
-
The OREO balance decreased by $9.0 million, driven by sales of $12.3
million and write-downs of $2.8 million, partially offset by additions.
-
Total troubled debt restructured loans (“TDRs”) held for investment
were $701.1 million at September 30, 2014, up $72.9 million, or 12%,
from June 30, 2014. Approximately $485.1 million of total TDRs held
for investment were in accrual status as of September 30, 2014. The
increase in the balance of TDRs was mainly related to the forbearance
granted in the third quarter of 2014 to the $75.0 million direct
exposure with the Puerto Rico Electric Power Authority (“PREPA”). See Exposure
to the Puerto Rico Government discussion below for additional
information.
Allowance for Loan and Lease Losses
The following table sets forth an analysis of the allowance for loan and
lease losses during the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
(Dollars in thousands)
|
|
September 30,
|
|
June 30,
|
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
|
|
|
2014
|
|
2014
|
|
|
2014
|
|
2013
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses, beginning of period
|
|
$
|
241,177
|
|
|
$
|
266,778
|
|
|
|
$
|
285,858
|
|
|
$
|
289,379
|
|
|
$
|
301,047
|
|
|
Provision for loan and lease losses
|
|
|
26,999
|
|
|
|
26,744
|
|
(1)
|
|
|
31,915
|
|
|
|
22,969
|
|
|
|
22,195
|
|
|
Net (charge-offs) recoveries of loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage
|
|
|
(5,734
|
)
|
|
|
(4,687
|
)
|
|
|
|
(6,353
|
)
|
|
|
(4,544
|
)
|
|
|
(8,457
|
)
|
|
|
Commercial mortgage
|
|
|
1,116
|
|
|
|
(9,126
|
)
|
|
|
|
(5,775
|
)
|
|
|
2,605
|
|
|
|
(5,918
|
)
|
|
|
Commercial and Industrial
|
|
|
(16,431
|
)
|
|
|
(19,036
|
)
|
(2)
|
|
|
(21,796
|
)
|
|
|
(9,146
|
)
|
|
|
(5,718
|
)
|
|
|
Construction
|
|
|
(3,205
|
)
|
|
|
(2,606
|
)
|
|
|
|
(353
|
)
|
|
|
(435
|
)
|
|
|
71
|
|
|
|
Consumer and finance leases
|
|
|
(18,488
|
)
|
|
|
(16,890
|
)
|
|
|
|
(16,718
|
)
|
|
|
(14,970
|
)
|
|
|
(13,841
|
)
|
|
Net charge-offs
|
|
|
(42,742
|
)
|
|
|
(52,345
|
)
|
|
|
|
(50,995
|
)
|
|
|
(26,490
|
)
|
|
|
(33,863
|
)
|
|
Allowance for loan and lease losses, end of period
|
|
$
|
225,434
|
|
|
$
|
241,177
|
|
|
|
$
|
266,778
|
|
|
$
|
285,858
|
|
|
$
|
289,379
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses to period end total loans held
for investment
|
|
|
2.42
|
%
|
|
|
2.55
|
%
|
|
|
|
2.79
|
%
|
|
|
2.97
|
%
|
|
|
3.04
|
%
|
|
Net charge-offs (annualized) to average loans outstanding during the
period
|
|
|
1.80
|
%
|
|
|
2.19
|
%
|
|
|
|
2.11
|
%
|
|
|
1.10
|
%
|
|
|
1.41
|
%
|
|
Net charge-offs (annualized), excluding charge-offs of $6.9
million related to the acquisition of mortgage loans from Doral,
to average loans outstanding during the period
|
|
|
1.80
|
%
|
|
|
1.90
|
%
|
|
|
|
2.11
|
%
|
|
|
1.10
|
%
|
|
|
1.41
|
%
|
|
Provision for loan and lease losses to net charge-offs during the
period
|
|
0.63x
|
|
0.51x
|
|
|
0.63x
|
|
0.87x
|
|
0.66x
|
|
Provision for loan and lease losses to net charge-offs during the
period, excluding impact of the acquisition of mortgage loans from
Doral
|
|
0.63x
|
|
0.56x
|
|
|
0.63x
|
|
0.87x
|
|
0.66x
|
|
(1) Includes provision of $1.4 million associated with the
acquisition of mortgage loans from Doral.
|
|
(2) Includes net charge-offs totaling $6.9 million associated with
the acquisition of mortgage loans from Doral.
|
|
|
-
The ratio of the allowance for loan and lease losses to loans held for
investment was 2.42% as of September 30, 2014, compared to 2.55% as of
June 30, 2014. The slight decrease in the ratio was primarily due to
lower specific reserve requirements on certain noncollateral dependent
commercial and industrial loans and certain charge-offs of loans with
previously established reserves. The ratio of the allowance to
non-performing loans held for investment was 40.29% as of September
30, 2014 compared to 42.71% as of June 30, 2014.
The following table sets forth information concerning the composition of
the Corporation’s allowance for loan and lease losses as of September
30, 2014 and June 30, 2014 by loan category and by whether the allowance
and related provisions were calculated individually for impairment
purposes or through a general valuation allowance:
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
Residential
Mortgage Loans
|
|
Commercial (including
Commercial Mortgage,
C&I,
and Construction
loans)
|
|
Consumer and
Finance Leases
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2014
|
|
|
|
|
|
|
|
|
|
Impaired loans:
|
|
|
|
|
|
|
|
|
|
Principal balance of loans, net of charge-offs
|
|
$
|
421,823
|
|
|
$
|
519,186
|
|
|
$
|
32,005
|
|
|
$
|
973,014
|
|
|
Allowance for loan and lease losses
|
|
|
17,515
|
|
|
|
38,331
|
|
|
|
5,295
|
|
|
|
61,141
|
|
|
Allowance for loan and lease losses to principal balance
|
|
|
4.15
|
%
|
|
|
7.38
|
%
|
|
|
16.54
|
%
|
|
|
6.28
|
%
|
|
|
|
|
|
|
|
|
|
|
|
PCI loans:
|
|
|
|
|
|
|
|
|
|
Carrying value of PCI loans
|
|
|
99,535
|
|
|
|
3,418
|
|
|
|
1,360
|
|
|
|
104,313
|
|
|
Allowance for PCI loans
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Allowance for PCI loans to carrying value
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans with general allowance:
|
|
|
|
|
|
|
|
|
|
Principal balance of loans
|
|
|
2,298,290
|
|
|
|
3,946,563
|
|
|
|
1,993,222
|
|
|
|
8,238,075
|
|
|
Allowance for loan and lease losses
|
|
|
12,391
|
|
|
|
91,995
|
|
|
|
59,907
|
|
|
|
164,293
|
|
|
Allowance for loan and lease losses to principal balance
|
|
|
0.54
|
%
|
|
|
2.33
|
%
|
|
|
3.01
|
%
|
|
|
1.99
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Total loans held for investment:
|
|
|
|
|
|
|
|
|
|
Principal balance of loans
|
|
$
|
2,819,648
|
|
|
$
|
4,469,167
|
|
|
$
|
2,026,587
|
|
|
$
|
9,315,402
|
|
|
Allowance for loan and lease losses
|
|
|
29,906
|
|
|
|
130,326
|
|
|
|
65,202
|
|
|
|
225,434
|
|
|
Allowance for loan and lease losses to principal balance
|
|
|
1.06
|
%
|
|
|
2.92
|
%
|
|
|
3.22
|
%
|
|
|
2.42
|
%
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired loans:
|
|
|
|
|
|
|
|
|
|
Principal balance of loans, net of charge-offs
|
|
$
|
414,448
|
|
|
$
|
465,482
|
|
|
$
|
28,928
|
|
|
$
|
908,858
|
|
|
Allowance for loan and lease losses
|
|
|
16,464
|
|
|
|
48,024
|
|
|
|
3,870
|
|
|
|
68,358
|
|
|
Allowance for loan and lease losses to principal balance
|
|
|
3.97
|
%
|
|
|
10.32
|
%
|
|
|
13.38
|
%
|
|
|
7.52
|
%
|
|
|
|
|
|
|
|
|
|
|
|
PCI loans:
|
|
|
|
|
|
|
|
|
|
Carrying value of PCI loans
|
|
|
99,997
|
|
|
|
3,447
|
|
|
|
2,176
|
|
|
|
105,620
|
|
|
Allowance for PCI loans
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Allowance for PCI loans to carrying value
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans with general allowance:
|
|
|
|
|
|
|
|
|
|
Principal balance of loans
|
|
|
2,280,714
|
|
|
|
4,140,745
|
|
|
|
2,031,164
|
|
|
|
8,452,623
|
|
|
Allowance for loan and lease losses
|
|
|
13,291
|
|
|
|
98,736
|
|
|
|
60,792
|
|
|
|
172,819
|
|
|
Allowance for loan and lease losses to principal balance
|
|
|
0.58
|
%
|
|
|
2.38
|
%
|
|
|
2.99
|
%
|
|
|
2.04
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Total loans held for investment:
|
|
|
|
|
|
|
|
|
|
Principal balance of loans
|
|
$
|
2,795,159
|
|
|
$
|
4,609,674
|
|
|
$
|
2,062,268
|
|
|
$
|
9,467,101
|
|
|
Allowance for loan and lease losses
|
|
|
29,755
|
|
|
|
146,760
|
|
|
|
64,662
|
|
|
|
241,177
|
|
|
Allowance for loan and lease losses to principal balance
|
|
|
1.06
|
%
|
|
|
3.18
|
%
|
|
|
3.14
|
%
|
|
|
2.55
|
%
|
|
|
|
|
|
|
|
|
|
|
Net Charge-Offs
The following table presents annualized net charge-offs to average loans
held-in-portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage
|
|
0.82
|
%
|
|
0.71
|
%
|
|
1.00
|
%
|
|
0.72
|
%
|
|
1.31
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial mortgage
|
|
-0.24
|
%
|
|
2.00
|
%
|
|
1.27
|
%
|
|
-0.57
|
%
|
|
1.23
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and Industrial
|
|
2.54
|
%
|
|
2.69
|
%
|
(1)
|
2.90
|
%
|
|
1.21
|
%
|
|
0.81
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
|
|
6.57
|
%
|
|
5.25
|
%
|
|
0.65
|
%
|
|
0.81
|
%
|
|
-0.11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer and finance leases
|
|
3.62
|
%
|
|
3.27
|
%
|
|
3.23
|
%
|
|
2.91
|
%
|
|
2.71
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans
|
|
1.80
|
%
|
|
2.19
|
%
|
(2)
|
2.11
|
%
|
|
1.10
|
%
|
|
1.41
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes net charge-offs totaling $6.9 million associated with
the acquisition of mortgage loans from Doral. The ratio of
commercial and industrial net charge-offs to average loans,
excluding charge-offs associated with the acquisition of mortgage
loans from Doral, was 1.81%.
|
|
(2) Includes net charge-offs totaling $6.9 million associated with
the acquisition of mortgage loans from Doral. The ratio of total
net charge-offs to average loans, excluding charge-offs associated
with the acquisition of mortgage loans from Doral, was 1.90%.
|
|
|
|
|
|
|
|
The ratios above are based on annualized net charge-offs and are not
necessarily indicative of the results expected in subsequent periods.
-
Net charge-offs for the third quarter of 2014 were $42.7 million, or
an annualized 1.80%, compared to $52.3 million, or an annualized 2.19%
in the second quarter of 2014. Net charge-offs for the second quarter
of 2014 included a $6.9 million charge-off resulting from fair value
adjustments related to the mortgage loans acquired from Doral in full
satisfaction of commercial secured borrowings. Excluding the
charge-offs resulting from the Doral transaction, total net
charge-offs decreased by $2.7 million, primarily due to an increase in
loss recoveries. Approximately $16.0 million of the charge-offs
recorded in the third quarter of 2014 relates to two collateral
dependent commercial and industrial relationships in Puerto Rico.
Recoveries of amounts previously charged-off increased to $11.2
million in the third quarter of 2014 from $6.7 million in the second
quarter of 2014. The majority of the recoveries recorded in the last
two quarters are related to the commercial mortgage and construction
loan portfolios in Florida.
STATEMENT OF FINANCIAL CONDITION
Total assets were approximately $12.6 billion as of September 30, 2014,
up $120.0 million from June 30, 2014.
The increase was mainly due to:
-
A $292.3 million increase in cash and cash equivalents, tied to the
increase in deposits and cash inflows from loan repayments.
Partially offset by:
-
A $136.0 million decrease in loans held for investment, net of
allowance, mainly reflecting decreases in commercial loans, including
a $63.8 million decrease in outstanding loans to government entities
in Puerto Rico and the Virgin Islands, a $54.6 million commercial and
industrial loan paid in full in Puerto Rico before contractual
maturity, and an $18.8 million commercial mortgage loan paid in full
in Florida.
Total loan originations, including refinancings, renewals, and draws
from existing revolving and non-revolving commitments, amounted to
approximately $821.2 million, compared to $781.3 million in the second
quarter of 2014. These figures exclude the credit card utilization
activity. The increase was mainly related to commercial and industrial
loans in both our Puerto Rico and the Virgin Islands regions.
-
A $20.3 million decrease in available-for-sale securities, mainly due
to regular MBS repayments and a $5.9 million decrease in the fair
value of available-for-sale securities, partially offset by the
purchase of approximately $44 million of U.S. government and
sponsored-agencies debt securities with an average yield of 1.72%.
-
A $9.0 million decrease in the OREO inventory balance driven by sales
of $12.3 million and write-downs of $2.8 million, partially offset by
additions in the quarter.
Total liabilities were approximately $11.3 billion as of September 30,
2014, up $101.9 million from June 30, 2014.
The increase was mainly due to:
-
A $76.6 million increase in non-brokered deposits, excluding
government deposits, mainly savings and retail CDs in Puerto Rico.
-
A $28.9 million increase in government deposits, mainly related to
transactional accounts in the Virgin Islands.
-
A $25.0 million 4-year FHLB advance with a rate of 1.79% entered into
in the third quarter that replaced a $20.0 million advance that
matured early in the quarter.
Partially offset by:
-
A $33.1 million decrease in brokered CDs.
Total stockholders’ equity amounted to $1.3 billion as of September 30,
2014, an increase of $18.2 million from June 30, 2014, mainly driven by:
-
The net income of $23.2 million reported in the third quarter.
Partially offset by:
-
A decrease of $5.9 million in other comprehensive income mainly
attributable to a decrease in the fair value of U.S. agency MBS and
debt securities of approximately $7.6 million, partially offset by an
increase of $1.3 million in the fair value of Puerto Rico government
obligations held by the Corporation as part of its available-for-sale
investment securities portfolio. See Exposure to Puerto Rico
Government section below for additional information.
The Corporation’s total capital, Tier 1 capital, and leverage ratios as
of September 30, 2014 were 18.57%, 17.30%, and 12.34%, respectively,
compared to total capital, Tier 1 capital and leverage ratios of 18.06%,
16.80%, and 12.04%, respectively, as of the end of the second quarter of
2014. Meanwhile, the total capital, Tier 1 capital, and leverage ratios
as of September 30, 2014 of our banking subsidiary, FirstBank Puerto
Rico, were 18.21%, 16.95%, and 12.10%, respectively, compared to total
capital, Tier 1 capital, and leverage ratios of 17.70%, 16.43%, and
11.79%, respectively, as of the end of the prior quarter. All of the
regulatory capital ratios for the Bank are well above the minimum
required under the consent order entered into with the FDIC and the
Office of the Commissioner of Financial Institutions of the Commonwealth
of Puerto Rico. Given such consent order, however, the Bank cannot be
considered to be a well-capitalized institution.
Based on our current interpretation of the international regulatory
capital requirements adopted by the Basel Committee on Banking
Supervision (known as “Basel 3”), we anticipate that, when these are
effective, we will exceed the fully phased-in minimum capital ratios
these rules establish.
Tangible Common Equity
The Corporation’s tangible common equity ratio increased to 9.82% as of
September 30, 2014 from 9.76% as of June 30, 2014, and the Tier 1 common
equity to risk-weighted assets ratio increased to 14.39% as of September
30, 2014 from 13.92% as of June 30, 2014.
The following table is a reconciliation of the Corporation’s tangible
common equity and tangible assets over the last five quarters to the
comparable GAAP items:
|
(In thousands, except ratios and per share information)
|
|
|
|
|
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
Tangible Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity - GAAP
|
|
$
|
1,324,157
|
|
|
$
|
1,306,001
|
|
|
$
|
1,255,898
|
|
|
$
|
1,215,858
|
|
|
$
|
1,220,593
|
|
|
|
Preferred equity
|
|
|
(36,104
|
)
|
|
|
(36,104
|
)
|
|
|
(56,810
|
)
|
|
|
(63,047
|
)
|
|
|
(63,047
|
)
|
|
|
Goodwill
|
|
|
(28,098
|
)
|
|
|
(28,098
|
)
|
|
|
(28,098
|
)
|
|
|
(28,098
|
)
|
|
|
(28,098
|
)
|
|
|
Purchased credit card relationship
|
|
|
(17,235
|
)
|
|
|
(18,080
|
)
|
|
|
(18,942
|
)
|
|
|
(19,787
|
)
|
|
|
(20,718
|
)
|
|
|
Core deposit intangible
|
|
|
(5,810
|
)
|
|
|
(6,200
|
)
|
|
|
(6,591
|
)
|
|
|
(6,981
|
)
|
|
|
(7,570
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible common equity
|
|
$
|
1,236,910
|
|
|
$
|
1,217,519
|
|
|
$
|
1,145,457
|
|
|
$
|
1,097,945
|
|
|
$
|
1,101,160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets - GAAP
|
|
$
|
12,643,280
|
|
|
$
|
12,523,251
|
|
|
$
|
12,819,428
|
|
|
$
|
12,656,925
|
|
|
$
|
12,787,450
|
|
|
|
Goodwill
|
|
|
(28,098
|
)
|
|
|
(28,098
|
)
|
|
|
(28,098
|
)
|
|
|
(28,098
|
)
|
|
|
(28,098
|
)
|
|
|
Purchased credit card relationship
|
|
|
(17,235
|
)
|
|
|
(18,080
|
)
|
|
|
(18,942
|
)
|
|
|
(19,787
|
)
|
|
|
(20,718
|
)
|
|
|
Core deposit intangible
|
|
|
(5,810
|
)
|
|
|
(6,200
|
)
|
|
|
(6,591
|
)
|
|
|
(6,981
|
)
|
|
|
(7,570
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible assets
|
|
$
|
12,592,137
|
|
|
$
|
12,470,873
|
|
|
$
|
12,765,797
|
|
|
$
|
12,602,059
|
|
|
$
|
12,731,064
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding
|
|
|
212,978
|
|
|
|
212,760
|
|
|
|
208,968
|
|
|
|
207,069
|
|
|
|
207,043
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible common equity ratio
|
|
|
9.82
|
%
|
|
|
9.76
|
%
|
|
|
8.97
|
%
|
|
|
8.71
|
%
|
|
|
8.65
|
%
|
|
|
Tangible book value per common share
|
|
$
|
5.81
|
|
|
$
|
5.72
|
|
|
$
|
5.48
|
|
|
$
|
5.30
|
|
|
$
|
5.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles stockholders’ equity (GAAP) to Tier 1
common equity based on current applicable bank regulatory requirements
(known as “Basel 1”):
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
As of
|
|
|
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 Common Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity - GAAP
|
|
$
|
1,324,157
|
|
|
$
|
1,306,001
|
|
|
$
|
1,255,898
|
|
|
$
|
1,215,858
|
|
|
$
|
1,220,593
|
|
|
|
Qualifying preferred stock
|
|
|
(36,104
|
)
|
|
|
(36,104
|
)
|
|
|
(56,810
|
)
|
|
|
(63,047
|
)
|
|
|
(63,047
|
)
|
|
|
Unrealized loss on available-for-sale securities (1)
|
|
|
34,301
|
|
|
|
28,381
|
|
|
|
56,180
|
|
|
|
78,734
|
|
|
|
58,485
|
|
|
|
Disallowed deferred tax asset (2)
|
|
|
-
|
|
|
|
-
|
|
|
|
(25
|
)
|
|
|
-
|
|
|
|
(43
|
)
|
|
|
Goodwill
|
|
|
(28,098
|
)
|
|
|
(28,098
|
)
|
|
|
(28,098
|
)
|
|
|
(28,098
|
)
|
|
|
(28,098
|
)
|
|
|
Core deposit intangible
|
|
|
(5,810
|
)
|
|
|
(6,200
|
)
|
|
|
(6,591
|
)
|
|
|
(6,981
|
)
|
|
|
(7,570
|
)
|
|
|
Other disallowed assets
|
|
|
(23
|
)
|
|
|
(23
|
)
|
|
|
(23
|
)
|
|
|
(23
|
)
|
|
|
(410
|
)
|
|
|
Tier 1 common equity
|
|
$
|
1,288,423
|
|
|
$
|
1,263,957
|
|
|
$
|
1,220,531
|
|
|
$
|
1,196,443
|
|
|
$
|
1,179,910
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total risk-weighted assets
|
|
$
|
8,954,477
|
|
|
$
|
9,079,164
|
|
|
$
|
9,255,697
|
|
|
$
|
9,405,798
|
|
|
$
|
9,402,910
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 common equity to risk-weighted assets ratio
|
|
|
14.39
|
%
|
|
|
13.92
|
%
|
|
|
13.19
|
%
|
|
|
12.72
|
%
|
|
|
12.55
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1) Tier 1 capital excludes net unrealized gains (losses) on
available-for-sale debt securities and net unrealized gains on
available-for-sale equity securities with readily determinable
fair values, in accordance with regulatory risk-based capital
guidelines. In arriving at Tier 1 capital, institutions are
required to deduct net unrealized losses on available-for-sale
equity securities with readily determinable fair values, net of
tax.
|
|
2) Approximately $11.3 million of the Corporation's deferred tax
assets as of September 30, 2014 (June 30, 2014 - $9.9 million;
March 31, 2014 - $9 million; December 31, 2013 - $7 million;
September 30, 2013 - $7.7 million) was included without limitation
in regulatory capital pursuant to the risk-based capital
guidelines, while approximately $0 of such assets as of September
30, 2014 (June 30, 2014 - $0; March 31, 2014 - $25 thousand;
December 31, 2013 - $0; September 30, 2013 - $43 thousand)
exceeded the limitation imposed by these guidelines and, as
"disallowed deferred tax assets," was deducted in calculating Tier
1 capital. According to regulatory capital guidelines, the
deferred tax assets that are dependent upon future taxable income
are limited for inclusion in Tier 1 capital to the lesser of: (i)
the amount of such deferred tax asset that the entity expects to
realize within one year of the calendar quarter-end date, based on
its projected future taxable income for that year, or (ii) 10% of
the amount of the entity's Tier 1 capital. Approximately $1.4
million of the Corporation's other net deferred tax liability as
of September 30, 2014 (June 30, 2014 - $1.2 million deferred tax
liability; March 31, 2014 - $0.8 million deferred tax liability;
December 31, 2013 - $0.3 million deferred tax asset; September 30,
2013 - $0.3 million deferred tax liability) 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.
|
|
|
|
Exposure to Puerto Rico Government
As of September 30, 2014, the Corporation had $364.3 million of credit
facilities granted to the Puerto Rico Government, its municipalities and
public corporations, of which $316.3 million was outstanding, compared
to $340.7 million outstanding as of June 30, 2014. Approximately $201.4
million of the granted credit facilities outstanding consisted of loans
to municipalities in Puerto Rico for which, in most cases, the good
faith, credit and unlimited taxing power of the applicable municipality
have been pledged to their repayment. Approximately $24.8 million
consisted of loans to units of the central government, and approximately
$90.1 million consisted of loans to public corporations, including a
$75.0 million direct exposure to PREPA. In addition, the Corporation had
$200.4 million outstanding in financings to the hotel industry in Puerto
Rico guaranteed by the Puerto Rico Tourism Development Fund.
In August 2014, PREPA entered into a forbearance agreement with a group
of banks, including First Bank, to extend further its maturing credit
lines to March 31, 2015.
The Corporation had outstanding $61.1 million in obligations of the
Puerto Rico government as part of its available-for-sale investment
securities portfolio carried on its books at a fair value of $46.4
million as of September 30, 2014. The fair value of the Puerto Rico
government obligations held by the Corporation increased by
approximately $1.3 million during the third quarter of 2014.
As of September 30, 2014, the Corporation had $250.9 million of public
sector deposits in Puerto Rico, compared to $252.6 million as of June
30, 2014. Approximately 57% is from municipalities in Puerto Rico and
43% is from public corporations and the central government and agencies.
Conference Call / Webcast Information
First BanCorp’s senior management will host an earnings conference call
and live webcast on Tuesday, October 28, 2014, at 10:00 a.m. (Eastern
Time). The call may be accessed via a live Internet webcast through the
investor relations section of the Corporation’s web site: www.firstbankpr.com
or through a dial-in telephone number at (877) 506-6537 or (412)
380–2001 for international callers. The Corporation recommends that
listeners go to the web site at least 15 minutes prior to the call to
download and install any necessary software. Following the webcast
presentation, a question and answer session will be made available to
research analysts and institutional investors. A replay of the webcast
will be archived in the investor relations section of First BanCorp’s
web site, www.firstbankpr.com,
until October 28, 2015. A telephone replay will be available one hour
after the end of the conference call through November 28, 2014 at (877)
344-7529 or (412) 317-0088 for international callers. The conference
number is 10054531.
Safe Harbor
This press release may contain “forward-looking statements” concerning
the Corporation’s future economic performance. The words or phrases
“expect,” “anticipate,” “look forward,” “should,” “believes” and similar
expressions are meant to identify “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended, and
are subject to the safe harbor created by such sections. 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,
the following could cause actual results to differ materially from those
expressed in, or implied by such forward-looking statements: uncertainty
about whether the Corporation and FirstBank 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 “New York
Fed”) and the consent order dated June 2, 2010 that FirstBank entered
into with the FDIC and the Office of the Commissioner of Financial
Institutions of the Commonwealth of Puerto Rico (the “FDIC Order”) 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 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 FDIC 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 New York Fed or
the Board of Governors of the Federal Reserve System (the “Federal
Reserve Board”) 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, which has
contributed and may continue to contribute to, among other things, high
levels of non-performing assets, charge-offs, and provisions and may
subject the Corporation to further risk from loan defaults and
foreclosures; the ability of FirstBank to realize the benefit of its
deferred tax asset; adverse changes in general economic conditions in
Puerto Rico, the U.S., and the U.S. Virgin Islands and British Virgin
Islands, including the interest rate environment, 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 reduce the Corporation’s revenues, earnings, and the value
of the Corporation’s assets; a credit default by the Puerto Rico
government or any of its public corporations or other instrumentalities,
and recent and any future downgrades of the long-term and short-term
debt ratings of the Puerto Rico government, which could exacerbate
Puerto Rico’s adverse economic conditions; 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,
the current fiscal problems of the Puerto Rico government and recent
credit downgrades of the Puerto Rico government’s debt; the risk that
any portion of the unrealized losses in the Corporation’s investment
portfolio is determined to be other-than-temporary, including unrealized
losses on Puerto Rico government obligations; uncertainty about
regulatory and legislative changes for financial services companies in
Puerto Rico, the U.S., and the U.S. Virgin Islands and British Virgin
Islands, which could affect the Corporation’s financial condition or
performance and could cause the Corporation’s actual results for future
periods to differ materially from prior results and anticipated or
projected results; changes in the fiscal and monetary policies and
regulations of the U.S. federal government, including those determined
by the Federal Reserve Board, the New York Fed, 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 expenses; the
impact on the Corporation’s results of operations and financial
condition of acquisitions and dispositions; a need to recognize
additional impairments on financial instruments, goodwill, or other
intangible assets relating to acquisitions; the risk 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.
Basis of Presentation
Use of Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. Non-GAAP
financial measures are set forth when management believes they will be
helpful to an understanding of the Corporation’s results of operations
or financial position. Where non-GAAP financial measures are used, the
comparable GAAP financial measure, as well as the reconciliation to the
comparable GAAP financial measure, can be found in the text or in the
attached tables to this earnings release.
Tangible Common Equity Ratio and Tangible Book Value per Common Share
The tangible common equity ratio and tangible book value per common
share are non-GAAP financial measures generally used by the financial
community to evaluate capital adequacy. Tangible common equity is total
equity less preferred equity, goodwill, core deposit intangibles, and
other intangibles, such as the purchased credit card relationship
intangible. Tangible assets are total assets less goodwill, core deposit
intangibles, and other intangibles, such as the purchased credit card
relationship intangible. Management and many stock analysts use the
tangible common equity ratio and tangible book value per common share in
conjunction with more traditional bank capital ratios to compare the
capital adequacy of banking organizations with significant amounts of
goodwill or other intangible assets, typically stemming from the use of
the purchase method of accounting for mergers and acquisitions. Neither
tangible common equity nor tangible assets, or the related measures
should be considered in isolation or as a substitute for stockholders’
equity, total assets, or any other measure calculated in accordance with
GAAP. Moreover, the manner in which the Corporation calculates its
tangible common equity, tangible assets, and any other related measures
may differ from that of other companies reporting measures with similar
names.
Tier 1 Common Equity to Risk-Weighted Assets Ratio
The Tier 1 common equity to risk-weighted assets ratio is calculated by
dividing (a) Tier 1 capital less non-common elements including
qualifying perpetual preferred stock and qualifying trust preferred
securities by (b) risk-weighted assets, which assets are calculated in
accordance with current applicable bank regulatory requirements (Basel
1). The Tier 1 common equity ratio is not required by GAAP or on a
recurring basis by applicable bank regulatory requirements. Management
is currently monitoring this ratio, along with the other ratios
discussed above, in evaluating the Corporation’s capital levels and
believes that, at this time, the ratio may be of interest to investors.
Adjusted Pre-Tax, Pre-Provision Income
Adjusted pre-tax, pre-provision income is a non-GAAP performance metric
that management believes is useful in analyzing underlying performance
trends, particularly in times of economic stress. Adjusted pre-tax,
pre-provision income, as defined by management, represents net income
(loss) excluding income tax expense (benefit), the provision for loan
and lease losses, gains on sale and OTTI of investment securities, fair
value adjustments on derivatives, equity in earnings or loss of
unconsolidated entity as well as certain items identified as unusual,
non-recurring or non-operating.
In addition, from time to time, adjusted pre-tax, pre-provision income
will reflect the omission of revenue or expense items that management
judges to be outside of ordinary banking activities and/or of items
that, while they may be associated with ordinary banking activities, are
so unusually large that management believes that a complete analysis of
the Corporation’s performance requires consideration also of adjusted
pre-tax, pre-provision income that excludes such amounts.
Net Interest Income, Excluding Valuations and on a Tax-Equivalent
Basis
Net interest income, interest rate spread, and net interest margin are
reported excluding the changes in the fair value of derivative
instruments and on a tax-equivalent basis. The presentation of net
interest income excluding valuations provides additional information
about the Corporation’s net interest income and facilitates
comparability and analysis. The changes in the fair value of derivative
instruments have no effect on interest due or interest earned on
interest-bearing liabilities or interest-earning assets, respectively.
The tax-equivalent adjustment to net interest income recognizes the
income tax savings when comparing taxable and tax-exempt assets and
assumes a marginal income tax rate. Income from tax-exempt earning
assets is increased by an amount equivalent to the taxes that would have
been paid if this income had been taxable at statutory rates. Management
believes that it is a standard practice in the banking industry to
present net interest income, interest rate spread, and net interest
margin on a fully tax-equivalent basis. This adjustment puts all earning
assets, most notably tax-exempt securities and certain loans, on a
common basis that facilitates comparison of results to results of peers.
Financial measures adjusted to exclude the effect of expenses related
to the acquisitions of mortgage loans from Doral, expenses related to
branch consolidations and other restructuring expenses, equity in
earnings (loss) of unconsolidated entity, gains or losses on sales of
investment securities and OTTI of investment securities.
To supplement the Corporation’s financial statements presented in
accordance with GAAP, the Corporation provides additional measures of
adjusted non-interest expenses and adjusted non-interest income.
Adjusted non-interest expenses exclude professional service fees
specifically related to the acquisitions of mortgage loans from Doral,
expenses related to branch consolidations in Puerto Rico, and expenses
associated with the restructuring of some business units. Adjusted
non-interest income excludes equity in earnings (loss) of unconsolidated
entity, gains (losses) on sales of investments and OTTI of investment
securities. Management believes that these non-GAAP measures enhance the
ability of analysts and investors to analyze trends in the Corporation’s
business and to better understand the performance of the Corporation. In
addition, the Corporation may utilize these non-GAAP financial measures
as a guide in its budgeting and long-term planning process. Any analysis
of these non-GAAP financial measures should be used only in conjunction
with results presented in accordance with GAAP. The following table
shows reconciliations of these non-GAAP financial measures to the
corresponding measures calculated and presented in accordance with GAAP.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 Third Quarter
|
|
As Reported (GAAP)
|
|
Branch consolidation
and optimization
expenses
|
|
Equity in loss of
unconsolidated
entity
|
|
Acquisition of
mortgage loans
from Doral
related
expenses
|
|
OTTI on debt
securities
|
|
Adjusted (Non-
GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest income
|
|
$
|
16,174
|
|
$
|
-
|
|
|
$
|
-
|
|
$
|
-
|
|
|
$
|
245
|
|
|
$
|
16,419
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest expenses
|
|
$
|
93,604
|
|
$
|
-
|
|
|
$
|
-
|
|
$
|
(659
|
)
|
|
$
|
-
|
|
|
$
|
92,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 Second Quarter
|
|
As Reported
(GAAP)
|
|
Branch consolidation
and optimization
expenses
|
|
Equity in loss of
unconsolidated
entity
|
|
Acquisition of
mortgage loans
from Doral
related
expenses
|
|
Gain on sale of
investments
|
|
Adjusted (Non-
GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest income
|
|
$
|
15,931
|
|
$
|
-
|
|
|
$
|
670
|
|
|
|
$
|
(291
|
)
|
|
$
|
16,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest expenses
|
|
$
|
98,145
|
|
$
|
(236
|
)
|
|
$
|
-
|
|
$
|
(576
|
)
|
|
|
|
$
|
97,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST BANCORP
|
|
Condensed Consolidated Statements of Financial Condition
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
September 30,
|
|
June 30,
|
|
December 31,
|
|
(In thousands, except for share information)
|
|
2014
|
|
2014
|
|
2013
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks
|
|
$
|
953,038
|
|
|
$
|
660,709
|
|
|
$
|
454,302
|
|
|
|
|
|
|
|
|
|
|
Money market investments:
|
|
|
|
|
|
|
|
Time deposits with other financial institutions
|
|
|
300
|
|
|
|
300
|
|
|
|
300
|
|
|
Other short-term investments
|
|
|
16,657
|
|
|
|
16,653
|
|
|
|
201,069
|
|
|
Total money market investments
|
|
|
16,957
|
|
|
|
16,953
|
|
|
|
201,369
|
|
|
|
|
|
|
|
|
|
|
Investment securities available for sale, at fair value
|
|
|
1,977,137
|
|
|
|
1,997,408
|
|
|
|
1,978,282
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other equity securities
|
|
|
25,752
|
|
|
|
29,141
|
|
|
|
28,691
|
|
|
|
|
|
|
|
|
|
|
Total investment securities
|
|
|
2,002,889
|
|
|
|
2,026,549
|
|
|
|
2,006,973
|
|
|
|
|
|
|
|
|
|
|
Investment in unconsolidated entity
|
|
|
-
|
|
|
|
-
|
|
|
|
7,279
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, net of allowance for loan and lease losses of $225,434 (June
30, 2014 - $241,177; December 31, 2013 - $285,858)
|
|
|
9,089,968
|
|
|
|
9,225,924
|
|
|
|
9,350,312
|
|
|
Loans held for sale, at lower of cost or market
|
|
|
80,014
|
|
|
|
72,105
|
|
|
|
75,969
|
|
|
Total loans, net
|
|
|
9,169,982
|
|
|
|
9,298,029
|
|
|
|
9,426,281
|
|
|
|
|
|
|
|
|
|
|
Premises and equipment, net
|
|
|
167,916
|
|
|
|
170,056
|
|
|
|
166,946
|
|
|
Other real estate owned
|
|
|
112,803
|
|
|
|
121,842
|
|
|
|
160,193
|
|
|
Accrued interest receivable on loans and investments
|
|
|
48,516
|
|
|
|
52,092
|
|
|
|
54,012
|
|
|
Other assets
|
|
|
171,179
|
|
|
|
177,021
|
|
|
|
179,570
|
|
|
Total assets
|
|
$
|
12,643,280
|
|
|
$
|
12,523,251
|
|
|
$
|
12,656,925
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
Non-interest-bearing deposits
|
|
$
|
862,422
|
|
|
$
|
851,038
|
|
|
$
|
851,212
|
|
|
Interest-bearing deposits
|
|
|
8,840,752
|
|
|
|
8,779,750
|
|
|
|
9,028,712
|
|
|
Total deposits
|
|
|
9,703,174
|
|
|
|
9,630,788
|
|
|
|
9,879,924
|
|
|
|
|
|
|
|
|
|
|
Securities sold under agreements to repurchase
|
|
|
900,000
|
|
|
|
900,000
|
|
|
|
900,000
|
|
|
Advances from the Federal Home Loan Bank (FHLB)
|
|
|
325,000
|
|
|
|
320,000
|
|
|
|
300,000
|
|
|
Other borrowings
|
|
|
231,959
|
|
|
|
231,959
|
|
|
|
231,959
|
|
|
Accounts payable and other liabilities
|
|
|
158,990
|
|
|
|
134,503
|
|
|
|
129,184
|
|
|
Total liabilities
|
|
|
11,319,123
|
|
|
|
11,217,250
|
|
|
|
11,441,067
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock, authorized 50,000,000 shares: issued 22,828,174
shares;
outstanding 1,444,146 (June 30, 2014 - 1,444,146
shares outstanding;
December 31, 2013 - 2,521,872 shares
outstanding); aggregate
liquidation value of $36,104 (June
30, 2014 - $36,104; December 31, 2013 - $63,047)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,104
|
|
|
|
36,104
|
|
|
|
63,047
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.10 par value, authorized 2,000,000,000 shares;
issued, 213,642,311 shares
|
|
|
|
|
|
|
|
(June 30, 2014 - 213,399,037 shares issued; December 31, 2013 -
207,635,157 shares issued)
|
|
|
21,364
|
|
|
|
21,340
|
|
|
|
20,764
|
|
|
Less: Treasury stock (at par value)
|
|
|
(66
|
)
|
|
|
(64
|
)
|
|
|
(57
|
)
|
|
|
|
|
|
|
|
|
|
Common stock outstanding, 212,977,588 shares outstanding
|
|
|
|
|
|
|
|
(June 30, 2014 - 212,760,158 shares outstanding; December 31, 2013 -
207,068,978 shares outstanding)
|
|
|
21,298
|
|
|
|
21,276
|
|
|
|
20,707
|
|
|
Additional paid-in capital
|
|
|
915,231
|
|
|
|
914,382
|
|
|
|
888,161
|
|
|
Retained earnings
|
|
|
385,847
|
|
|
|
362,646
|
|
|
|
322,679
|
|
|
Accumulated other comprehensive loss
|
|
|
(34,323
|
)
|
|
|
(28,407
|
)
|
|
|
(78,736
|
)
|
|
Total stockholders' equity
|
|
|
1,324,157
|
|
|
|
1,306,001
|
|
|
|
1,215,858
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
12,643,280
|
|
|
$
|
12,523,251
|
|
|
$
|
12,656,925
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST BANCORP
|
|
Condensed Consolidated Statements of Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Nine-Month Period Ended
|
|
(In thousands, except per share information)
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
2014
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income:
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
$
|
156,662
|
|
|
$
|
158,423
|
|
|
$
|
162,203
|
|
|
$
|
475,656
|
|
|
$
|
483,098
|
|
|
Interest expense
|
|
|
28,968
|
|
|
|
28,516
|
|
|
|
31,298
|
|
|
|
86,735
|
|
|
|
100,812
|
|
|
Net interest income
|
|
|
127,694
|
|
|
|
129,907
|
|
|
|
130,905
|
|
|
|
388,921
|
|
|
|
382,286
|
|
|
Provision for loan and lease losses
|
|
|
26,999
|
|
|
|
26,744
|
|
|
|
22,195
|
|
|
|
85,658
|
|
|
|
220,782
|
|
|
Net interest income after provision for loan and lease losses
|
|
|
100,695
|
|
|
|
103,163
|
|
|
|
108,710
|
|
|
|
303,263
|
|
|
|
161,504
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts
|
|
|
3,235
|
|
|
|
3,290
|
|
|
|
3,157
|
|
|
|
9,728
|
|
|
|
9,635
|
|
|
Mortgage banking activities
|
|
|
3,809
|
|
|
|
3,036
|
|
|
|
3,521
|
|
|
|
10,213
|
|
|
|
12,924
|
|
|
Net (loss) gain on investments and impairments
|
|
|
(245
|
)
|
|
|
291
|
|
|
|
-
|
|
|
|
46
|
|
|
|
(159
|
)
|
|
Equity in (loss) earnings of unconsolidated entity
|
|
|
-
|
|
|
|
(670
|
)
|
|
|
(5,908
|
)
|
|
|
(7,280
|
)
|
|
|
(10,798
|
)
|
|
Impairment of collateral pledged to Lehman
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(66,574
|
)
|
|
Other non-interest income
|
|
|
9,375
|
|
|
|
9,984
|
|
|
|
9,290
|
|
|
|
30,748
|
|
|
|
26,998
|
|
|
Total non-interest income (loss)
|
|
|
16,174
|
|
|
|
15,931
|
|
|
|
10,060
|
|
|
|
43,455
|
|
|
|
(27,974
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Employees' compensation and benefits
|
|
|
33,964
|
|
|
|
35,023
|
|
|
|
32,823
|
|
|
|
101,929
|
|
|
|
99,493
|
|
|
Occupancy and equipment
|
|
|
14,727
|
|
|
|
14,482
|
|
|
|
15,109
|
|
|
|
43,527
|
|
|
|
45,062
|
|
|
Business promotion
|
|
|
3,925
|
|
|
|
4,142
|
|
|
|
3,538
|
|
|
|
12,040
|
|
|
|
10,726
|
|
|
Professional fees
|
|
|
11,533
|
|
|
|
11,371
|
|
|
|
11,840
|
|
|
|
32,944
|
|
|
|
36,707
|
|
|
Taxes, other than income taxes
|
|
|
4,528
|
|
|
|
4,504
|
|
|
|
4,718
|
|
|
|
13,607
|
|
|
|
14,009
|
|
|
Insurance and supervisory fees
|
|
|
9,493
|
|
|
|
10,784
|
|
|
|
11,513
|
|
|
|
31,267
|
|
|
|
37,018
|
|
|
Net loss on other real estate owned operations
|
|
|
4,326
|
|
|
|
6,778
|
|
|
|
7,052
|
|
|
|
16,941
|
|
|
|
29,191
|
|
|
Other non-interest expenses
|
|
|
11,108
|
|
|
|
11,061
|
|
|
|
12,561
|
|
|
|
32,279
|
|
|
|
36,281
|
|
|
Total non-interest expenses
|
|
|
93,604
|
|
|
|
98,145
|
|
|
|
99,154
|
|
|
|
284,534
|
|
|
|
308,487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
23,265
|
|
|
|
20,949
|
|
|
|
19,616
|
|
|
|
62,184
|
|
|
|
(174,957
|
)
|
|
Income tax (expense) benefit
|
|
|
(64
|
)
|
|
|
276
|
|
|
|
(3,676
|
)
|
|
|
(675
|
)
|
|
|
(4,319
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
23,201
|
|
|
$
|
21,225
|
|
|
$
|
15,940
|
|
|
$
|
61,509
|
|
|
$
|
(179,276
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common stockholders
|
|
$
|
23,201
|
|
|
$
|
22,505
|
|
|
$
|
15,940
|
|
|
$
|
63,168
|
|
|
$
|
(179,276
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.11
|
|
|
$
|
0.11
|
|
|
$
|
0.08
|
|
|
$
|
0.30
|
|
|
$
|
(0.87
|
)
|
|
Diluted
|
|
$
|
0.11
|
|
|
$
|
0.11
|
|
|
$
|
0.08
|
|
|
$
|
0.30
|
|
|
$
|
(0.87
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
About First BanCorp.
First BanCorp. is the parent corporation of FirstBank Puerto Rico, a
state-chartered commercial bank with operations in Puerto Rico, the
Virgin Islands and Florida, and of FirstBank Insurance Agency. First
BanCorp. and FirstBank Puerto Rico operate within U.S. banking laws and
regulations. The Corporation operates a total of 143 branches,
stand-alone offices, and in-branch service centers throughout Puerto
Rico, the U.S. and British Virgin Islands, and Florida. Among the
subsidiaries of FirstBank Puerto Rico are First Federal Finance Corp., a
small loan company; FirstBank Puerto Rico Securities, a broker-dealer
subsidiary; First Management of Puerto Rico; and FirstMortgage, Inc., a
mortgage origination company. In the U.S. Virgin Islands, FirstBank
operates First Express, a small loan company. First BanCorp’s shares of
common stock trade on the New York Stock Exchange under the symbol FBP.
Additional information about First BanCorp. may be found at www.firstbankpr.com.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXHIBIT A
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 1 - Selected Financial Data
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except for per share
|
|
|
|
|
|
and financial ratios data)
|
|
Quarter Ended
|
|
Nine-Month Period Ended
|
|
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
2014
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
Condensed Income Statements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest income
|
|
$
|
156,662
|
|
|
$
|
158,423
|
|
$
|
162,203
|
|
|
$
|
475,656
|
|
|
$
|
483,098
|
|
|
|
|
Total interest expense
|
|
|
28,968
|
|
|
|
28,516
|
|
|
31,298
|
|
|
|
86,735
|
|
|
|
100,812
|
|
|
|
|
Net interest income
|
|
|
127,694
|
|
|
|
129,907
|
|
|
130,905
|
|
|
|
388,921
|
|
|
|
382,286
|
|
|
|
|
Provision for loan and lease losses
|
|
|
26,999
|
|
|
|
26,744
|
|
|
22,195
|
|
|
|
85,658
|
|
|
|
220,782
|
|
|
|
|
Non-interest income (loss)
|
|
|
16,174
|
|
|
|
15,931
|
|
|
10,060
|
|
|
|
43,455
|
|
|
|
(27,974
|
)
|
|
|
|
Non-interest expenses
|
|
|
93,604
|
|
|
|
98,145
|
|
|
99,154
|
|
|
|
284,534
|
|
|
|
308,487
|
|
|
|
|
Income (loss) before income taxes
|
|
|
23,265
|
|
|
|
20,949
|
|
|
19,616
|
|
|
|
62,184
|
|
|
|
(174,957
|
)
|
|
|
|
Income tax (expense) benefit
|
|
|
(64
|
)
|
|
|
276
|
|
|
(3,676
|
)
|
|
|
(675
|
)
|
|
|
(4,319
|
)
|
|
|
|
Net income (loss)
|
|
|
23,201
|
|
|
|
21,225
|
|
|
15,940
|
|
|
|
61,509
|
|
|
|
(179,276
|
)
|
|
|
|
Net income (loss) attributable to common stockholders
|
|
|
23,201
|
|
|
|
22,505
|
|
|
15,940
|
|
|
|
63,168
|
|
|
|
(179,276
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Common Share Results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) per share basic
|
|
$
|
0.11
|
|
|
$
|
0.11
|
|
$
|
0.08
|
|
|
$
|
0.30
|
|
|
$
|
(0.87
|
)
|
|
|
|
Net earnings (loss) per share diluted
|
|
$
|
0.11
|
|
|
$
|
0.11
|
|
$
|
0.08
|
|
|
$
|
0.30
|
|
|
$
|
(0.87
|
)
|
|
|
|
Cash dividends declared
|
|
$
|
-
|
|
|
$
|
-
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
Average shares outstanding
|
|
|
210,466
|
|
|
|
208,202
|
|
|
205,579
|
|
|
|
208,151
|
|
|
|
205,512
|
|
|
|
|
Average shares outstanding diluted
|
|
|
212,359
|
|
|
|
210,144
|
|
|
207,316
|
|
|
|
209,811
|
|
|
|
205,512
|
|
|
|
|
Book value per common share
|
|
$
|
6.05
|
|
|
$
|
5.97
|
|
$
|
5.59
|
|
|
$
|
6.05
|
|
|
$
|
5.59
|
|
|
|
|
Tangible book value per common share (1)
|
|
$
|
5.81
|
|
|
$
|
5.72
|
|
$
|
5.32
|
|
|
$
|
5.81
|
|
|
$
|
5.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial Ratios (In Percent):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profitability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Average Assets
|
|
|
0.73
|
|
|
|
0.67
|
|
|
0.50
|
|
|
|
0.65
|
|
|
|
(1.86
|
)
|
|
|
|
Interest Rate Spread (2)
|
|
|
4.07
|
|
|
|
4.19
|
|
|
4.15
|
|
|
|
4.17
|
|
|
|
3.94
|
|
|
|
|
Net Interest Margin (2)
|
|
|
4.25
|
|
|
|
4.37
|
|
|
4.34
|
|
|
|
4.35
|
|
|
|
4.15
|
|
|
|
|
Return on Average Total Equity
|
|
|
7.01
|
|
|
|
6.66
|
|
|
5.19
|
|
|
|
6.43
|
|
|
|
(17.65
|
)
|
|
|
|
Return on Average Common Equity
|
|
|
7.21
|
|
|
|
6.95
|
|
|
5.47
|
|
|
|
6.69
|
|
|
|
(18.51
|
)
|
|
|
|
Average Total Equity to Average Total Assets
|
|
|
10.44
|
|
|
|
10.10
|
|
|
9.68
|
|
|
|
10.10
|
|
|
|
10.56
|
|
|
|
|
Total capital
|
|
|
18.57
|
|
|
|
18.06
|
|
|
16.89
|
|
|
|
18.57
|
|
|
|
16.89
|
|
|
|
|
Tier 1 capital
|
|
|
17.30
|
|
|
|
16.80
|
|
|
15.61
|
|
|
|
17.30
|
|
|
|
15.61
|
|
|
|
|
Leverage
|
|
|
12.34
|
|
|
|
12.04
|
|
|
11.65
|
|
|
|
12.34
|
|
|
|
11.65
|
|
|
|
|
Tangible common equity ratio (1)
|
|
|
9.82
|
|
|
|
9.76
|
|
|
8.65
|
|
|
|
9.82
|
|
|
|
8.65
|
|
|
|
|
Tier 1 common equity to risk-weight assets (1)
|
|
|
14.39
|
|
|
|
13.92
|
|
|
12.55
|
|
|
|
14.39
|
|
|
|
12.55
|
|
|
|
|
Dividend payout ratio
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
Efficiency ratio (3)
|
|
|
65.06
|
|
|
|
67.30
|
|
|
70.34
|
|
|
|
65.81
|
|
|
|
87.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses to loans held for investment
|
|
|
2.42
|
|
|
|
2.55
|
|
|
3.04
|
|
|
|
2.42
|
|
|
|
3.04
|
|
|
|
|
Net charge-offs (annualized) to average loans
|
|
|
1.80
|
|
|
|
2.19
|
(4)
|
|
1.41
|
|
|
|
2.04
|
|
(4)
|
|
4.97
|
|
(6)
|
|
|
Provision for loan and lease losses to net charge-offs
|
|
|
63.17
|
|
|
|
51.09
|
(5)
|
|
65.54
|
|
|
|
58.64
|
|
(5)
|
|
60.19
|
|
(7)
|
|
|
Non-performing assets to total assets
|
|
|
5.89
|
|
|
|
6.05
|
|
|
5.68
|
|
|
|
5.89
|
|
|
|
5.68
|
|
|
|
|
Non-performing loans held for investment to total loans held for
investment
|
|
|
6.01
|
|
|
|
5.96
|
|
|
5.24
|
|
|
|
6.01
|
|
|
|
5.24
|
|
|
|
|
Allowance to total non-performing loans held for investment
|
|
|
40.29
|
|
|
|
42.71
|
|
|
58.06
|
|
|
|
40.29
|
|
|
|
58.06
|
|
|
|
|
Allowance to total non-performing loans held for investment
|
|
|
|
|
|
|
|
|
|
|
|
excluding residential real estate loans
|
|
|
60.20
|
|
|
|
61.96
|
|
|
81.20
|
|
|
|
60.20
|
|
|
|
81.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock Price: End of period
|
|
$
|
4.75
|
|
|
$
|
5.44
|
|
$
|
5.68
|
|
|
$
|
4.75
|
|
|
$
|
5.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1) Non-GAAP measure. See pages 13-14 for GAAP to Non-GAAP
reconciliations.
|
|
2) On a tax-equivalent basis and excluding changes in the fair
value of derivative instruments (Non-GAAP measure). See page 4 for
GAAP to Non-GAAP reconciliations and refer to discussions in
Tables 2 and 3 below.
|
|
3) Non-interest expenses to the sum of net interest income and
non-interest income. The denominator includes non-recurring income
and changes in the fair value of derivative instruments.
|
|
4) The net charge-offs to average loans ratio, excluding the
impact associated with the acquisition of mortgage loans from
Doral, was 1.90% for the quarter ended June 30, 2014 and 1.94% for
the nine-month period ended September 30, 2014, respectively.
|
|
5) The provision for loan and lease losses to net charge-offs
ratio, excluding the impact associated with the acquisition of
mortgage loans from Doral, was 55.72% for the quarter ended June
30, 2014 and 60.52% for the nine-month period ended September 30,
2014, respectively.
|
|
6) The net charge-offs to average loans ratio, excluding the
impact associated with the bulk sales of assets and the transfer
of loans to held for sale, was 1.87% for the nine-month period
ended September 30, 2013.
|
|
7) The provision for loan and lease losses to net charge-offs
ratio, excluding the impact associated with the bulk sales of
assets and the transfer of loans to held for sale, was 66.07% for
the nine-month period ended September 30, 2013.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 2 - Statement of Average Interest-Earning Assets and
Average Interest-Bearing Liabilities (On a Tax Equivalent Basis)
|
|
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average volume
|
|
Interest income (1) / expense
|
|
Average rate (1)
|
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
Quarter ended
|
|
2014
|
|
2014
|
|
2013
|
|
2014
|
|
2014
|
|
2013
|
|
2014
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market & other short-term investments
|
|
$
|
744,738
|
|
$
|
729,302
|
|
$
|
639,285
|
|
$
|
473
|
|
$
|
454
|
|
$
|
456
|
|
0.25
|
%
|
|
0.25
|
%
|
|
0.28
|
%
|
|
Government obligations (2)
|
|
|
339,261
|
|
|
335,813
|
|
|
342,739
|
|
|
1,956
|
|
|
2,101
|
|
|
2,008
|
|
2.29
|
%
|
|
2.51
|
%
|
|
2.32
|
%
|
|
Mortgage-backed securities
|
|
|
1,657,816
|
|
|
1,717,748
|
|
|
1,705,745
|
|
|
11,985
|
|
|
14,191
|
|
|
14,847
|
|
2.87
|
%
|
|
3.31
|
%
|
|
3.45
|
%
|
|
FHLB stock
|
|
|
26,788
|
|
|
27,995
|
|
|
30,884
|
|
|
283
|
|
|
273
|
|
|
311
|
|
4.19
|
%
|
|
3.91
|
%
|
|
4.00
|
%
|
|
Equity securities
|
|
|
320
|
|
|
320
|
|
|
1,320
|
|
|
-
|
|
|
-
|
|
|
-
|
|
0.00
|
%
|
|
0.00
|
%
|
|
0.00
|
%
|
|
Total investments (3)
|
|
|
2,768,923
|
|
|
2,811,178
|
|
|
2,719,973
|
|
|
14,697
|
|
|
17,019
|
|
|
17,622
|
|
2.11
|
%
|
|
2.43
|
%
|
|
2.57
|
%
|
|
Residential mortgage loans
|
|
|
2,803,138
|
|
|
2,635,082
|
|
|
2,580,758
|
|
|
39,401
|
|
|
36,707
|
|
|
37,273
|
|
5.58
|
%
|
|
5.59
|
%
|
|
5.73
|
%
|
|
Construction loans
|
|
|
195,108
|
|
|
198,665
|
|
|
257,188
|
|
|
1,910
|
|
|
1,691
|
|
|
2,141
|
|
3.88
|
%
|
|
3.41
|
%
|
|
3.30
|
%
|
|
C&I and commercial mortgage loans
|
|
|
4,434,798
|
|
|
4,658,776
|
|
|
4,755,518
|
|
|
49,043
|
|
|
50,473
|
|
|
48,971
|
|
4.39
|
%
|
|
4.35
|
%
|
|
4.09
|
%
|
|
Finance leases
|
|
|
237,374
|
|
|
243,014
|
|
|
241,256
|
|
|
4,707
|
|
|
4,985
|
|
|
5,188
|
|
7.87
|
%
|
|
8.23
|
%
|
|
8.53
|
%
|
|
Consumer loans
|
|
|
1,806,158
|
|
|
1,825,255
|
|
|
1,804,892
|
|
|
50,481
|
|
|
52,291
|
|
|
55,196
|
|
11.09
|
%
|
|
11.49
|
%
|
|
12.13
|
%
|
|
Total loans (4) (5)
|
|
|
9,476,576
|
|
|
9,560,792
|
|
|
9,639,612
|
|
|
145,542
|
|
|
146,147
|
|
|
148,769
|
|
6.09
|
%
|
|
6.13
|
%
|
|
6.12
|
%
|
|
Total interest-earning assets
|
|
$
|
12,245,499
|
|
$
|
12,371,970
|
|
$
|
12,359,585
|
|
$
|
160,239
|
|
$
|
163,166
|
|
$
|
166,391
|
|
5.19
|
%
|
|
5.29
|
%
|
|
5.34
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brokered CDs
|
|
$
|
3,097,358
|
|
$
|
3,124,808
|
|
$
|
3,149,417
|
|
$
|
7,482
|
|
$
|
7,496
|
|
$
|
8,295
|
|
0.96
|
%
|
|
0.96
|
%
|
|
1.04
|
%
|
|
Other interest-bearing deposits
|
|
|
5,691,643
|
|
|
5,838,450
|
|
|
5,773,400
|
|
|
11,862
|
|
|
11,970
|
|
|
13,158
|
|
0.83
|
%
|
|
0.82
|
%
|
|
0.90
|
%
|
|
Other borrowed funds
|
|
|
1,131,959
|
|
|
1,131,959
|
|
|
1,131,959
|
|
|
8,675
|
|
|
8,217
|
|
|
8,321
|
|
3.04
|
%
|
|
2.91
|
%
|
|
2.92
|
%
|
|
FHLB advances
|
|
|
324,674
|
|
|
300,220
|
|
|
355,016
|
|
|
949
|
|
|
833
|
|
|
1,524
|
|
1.16
|
%
|
|
1.11
|
%
|
|
1.70
|
%
|
|
Total interest-bearing liabilities
|
|
$
|
10,245,634
|
|
$
|
10,395,437
|
|
$
|
10,409,792
|
|
$
|
28,968
|
|
$
|
28,516
|
|
$
|
31,298
|
|
1.12
|
%
|
|
1.10
|
%
|
|
1.19
|
%
|
|
Net interest income
|
|
|
|
|
|
|
|
$
|
131,271
|
|
$
|
134,650
|
|
$
|
135,093
|
|
|
|
|
|
|
|
Interest rate spread
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.07
|
%
|
|
4.19
|
%
|
|
4.15
|
%
|
|
Net interest margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.25
|
%
|
|
4.37
|
%
|
|
4.34
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1) On a tax-equivalent basis. The tax-equivalent yield was
estimated by dividing the interest rate spread on exempt assets by
1 less the Puerto Rico statutory tax rate of 39% and adding to it
the cost of interest-bearing liabilities. When adjusted to a
tax-equivalent basis, yields on taxable and exempt assets are
comparable. Changes in the fair value of derivative instruments
are excluded from interest income because the changes in valuation
do not affect interest paid or received.
|
|
2) Government obligations include debt issued by
government-sponsored agencies.
|
|
3) Unrealized gains and losses on available-for-sale securities
are excluded from the average volumes.
|
|
4) Average loan balances include the average of total
non-performing loans.
|
|
5) Interest income on loans includes $3.1 million, $2.8 million
and $3.7 million for the quarters ended September 30, 2014, June
30, 2014, and September 30, 2013, respectively, of income from
prepayment penalties and late fees related to the Corporation's
loan portfolio.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 3 - Year-To-Date Statement of Average Interest-Earning
Assets and Average Interest-Bearing Liabilities (On a Tax Equivalent
Basis)
|
|
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average volume
|
|
Interest income (1) / expense
|
|
Average rate (1)
|
|
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
Nine-Month Period Ended
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market & other short-term investments
|
|
$
|
739,456
|
|
$
|
709,240
|
|
$
|
1,427
|
|
$
|
1,494
|
|
0.26
|
%
|
|
0.28
|
%
|
|
Government obligations (2)
|
|
|
339,295
|
|
|
337,156
|
|
|
6,115
|
|
|
5,847
|
|
2.41
|
%
|
|
2.32
|
%
|
|
Mortgage-backed securities
|
|
|
1,691,816
|
|
|
1,642,080
|
|
|
42,268
|
|
|
35,933
|
|
3.34
|
%
|
|
2.93
|
%
|
|
FHLB stock
|
|
|
27,724
|
|
|
31,775
|
|
|
897
|
|
|
1,048
|
|
4.33
|
%
|
|
4.41
|
%
|
|
Equity securities
|
|
|
320
|
|
|
1,348
|
|
|
-
|
|
|
-
|
|
0.00
|
%
|
|
0.00
|
%
|
|
Total investments (3)
|
|
|
2,798,611
|
|
|
2,721,599
|
|
|
50,707
|
|
|
44,322
|
|
2.42
|
%
|
|
2.18
|
%
|
|
Residential mortgage loans
|
|
|
2,663,641
|
|
|
2,730,842
|
|
|
111,066
|
|
|
112,688
|
|
5.57
|
%
|
|
5.52
|
%
|
|
Construction loans
|
|
|
203,359
|
|
|
292,594
|
|
|
5,616
|
|
|
7,032
|
|
3.69
|
%
|
|
3.21
|
%
|
|
C&I and commercial mortgage loans
|
|
|
4,638,218
|
|
|
4,787,841
|
|
|
150,828
|
|
|
145,371
|
|
4.35
|
%
|
|
4.06
|
%
|
|
Finance leases
|
|
|
242,173
|
|
|
239,407
|
|
|
14,882
|
|
|
15,396
|
|
8.22
|
%
|
|
8.60
|
%
|
|
Consumer loans
|
|
|
1,818,628
|
|
|
1,793,811
|
|
|
155,787
|
|
|
166,002
|
|
11.45
|
%
|
|
12.37
|
%
|
|
Total loans (4) (5)
|
|
|
9,566,019
|
|
|
9,844,495
|
|
|
438,179
|
|
|
446,489
|
|
6.12
|
%
|
|
6.06
|
%
|
|
Total interest-earning assets
|
|
$
|
12,364,630
|
|
$
|
12,566,094
|
|
$
|
488,886
|
|
$
|
490,811
|
|
5.29
|
%
|
|
5.22
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brokered CDs
|
|
$
|
3,135,572
|
|
$
|
3,298,338
|
|
$
|
22,585
|
|
$
|
30,566
|
|
0.96
|
%
|
|
1.24
|
%
|
|
Other interest-bearing deposits
|
|
|
5,817,613
|
|
|
5,740,514
|
|
|
36,524
|
|
|
40,349
|
|
0.84
|
%
|
|
0.94
|
%
|
|
Other borrowed funds
|
|
|
1,131,959
|
|
|
1,131,959
|
|
|
25,020
|
|
|
24,717
|
|
2.96
|
%
|
|
2.92
|
%
|
|
FHLB advances
|
|
|
308,388
|
|
|
376,847
|
|
|
2,606
|
|
|
5,180
|
|
1.13
|
%
|
|
1.84
|
%
|
|
Total interest-bearing liabilities
|
|
$
|
10,393,532
|
|
$
|
10,547,658
|
|
$
|
86,735
|
|
$
|
100,812
|
|
1.12
|
%
|
|
1.28
|
%
|
|
Net interest income
|
|
|
|
|
|
$
|
402,151
|
|
$
|
389,999
|
|
|
|
|
|
Interest rate spread
|
|
|
|
|
|
|
|
|
|
4.17
|
%
|
|
3.94
|
%
|
|
Net interest margin
|
|
|
|
|
|
|
|
|
|
4.35
|
%
|
|
4.15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1) On a tax-equivalent basis. The tax-equivalent yield was
estimated by dividing the interest rate spread on exempt assets by
1 less the Puerto Rico statutory tax rate of 39% and adding to it
the cost of interest-bearing liabilities. When adjusted to a
tax-equivalent basis, yields on taxable and exempt assets are
comparable. Changes in the fair value of derivative instruments
are excluded from interest income because the changes in valuation
do not affect interest paid or received.
|
|
2) Government obligations include debt issued by
government-sponsored agencies.
|
|
3) Unrealized gains and losses on available-for-sale securities
are excluded from the average volumes.
|
|
4) Average loan balances include the average of total
non-performing loans.
|
|
5) Interest income on loans includes $8.8 million, and $10.8
million for the nine-month period ended September 30, 2014 and
2013, respectively, of income from prepayment penalties and late
fees related to the Corporation's loan portfolio.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 4 - Non-Interest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Nine-Month Period Ended
|
|
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
(In thousands)
|
|
2014
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts
|
|
$
|
3,235
|
|
|
$
|
3,290
|
|
|
$
|
3,157
|
|
|
$
|
9,728
|
|
|
$
|
9,635
|
|
|
|
Mortgage banking activities
|
|
|
3,809
|
|
|
|
3,036
|
|
|
|
3,521
|
|
|
|
10,213
|
|
|
|
12,924
|
|
|
|
Insurance income
|
|
|
1,290
|
|
|
|
1,467
|
|
|
|
1,303
|
|
|
|
5,328
|
|
|
|
4,831
|
|
|
|
Broker-dealer income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
459
|
|
|
|
-
|
|
|
|
Other operating income
|
|
|
8,085
|
|
|
|
8,517
|
|
|
|
7,987
|
|
|
|
24,961
|
|
|
|
22,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest income before net (loss) gain on investments, equity
in earnings (loss) of unconsolidated entity, and write-off of
collateral pledged with Lehman
|
|
|
16,419
|
|
|
|
16,310
|
|
|
|
15,968
|
|
|
|
50,689
|
|
|
|
49,557
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain on sale of investments
|
|
|
-
|
|
|
|
291
|
|
|
|
-
|
|
|
|
291
|
|
|
|
-
|
|
|
|
OTTI on equity securities
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(42
|
)
|
|
|
OTTI on debt securities
|
|
|
(245
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(245
|
)
|
|
|
(117
|
)
|
|
|
Net (loss) gain on investments
|
|
|
(245
|
)
|
|
|
291
|
|
|
|
-
|
|
|
|
46
|
|
|
|
(159
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment - collateral pledged to Lehman
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(66,574
|
)
|
|
|
Equity in earnings (loss) of unconsolidated entity
|
|
|
-
|
|
|
|
(670
|
)
|
|
|
(5,908
|
)
|
|
|
(7,280
|
)
|
|
|
(10,798
|
)
|
|
|
|
|
$
|
16,174
|
|
|
$
|
15,931
|
|
|
$
|
10,060
|
|
|
$
|
43,455
|
|
|
$
|
(27,974
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 5 - Non-Interest Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Nine-Month Period Ended
|
|
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
(In thousands)
|
|
2014
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employees' compensation and benefits
|
|
$
|
33,964
|
|
|
$
|
35,023
|
|
|
$
|
32,823
|
|
|
$
|
101,929
|
|
|
$
|
99,493
|
|
|
|
Occupancy and equipment
|
|
|
14,727
|
|
|
|
14,246
|
|
|
|
15,109
|
|
|
|
42,573
|
|
|
|
45,062
|
|
|
|
Deposit insurance premium
|
|
|
8,335
|
|
|
|
9,579
|
|
|
|
10,479
|
|
|
|
27,736
|
|
|
|
33,426
|
|
|
|
Other insurance and supervisory fees
|
|
|
1,158
|
|
|
|
1,205
|
|
|
|
1,034
|
|
|
|
3,531
|
|
|
|
3,592
|
|
|
|
Taxes, other than income taxes
|
|
|
4,528
|
|
|
|
4,504
|
|
|
|
4,718
|
|
|
|
13,607
|
|
|
|
14,009
|
|
|
|
Professional fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
Collections, appraisals and other credit related fees
|
|
|
2,480
|
|
|
|
2,363
|
|
|
|
2,780
|
|
|
|
6,188
|
|
|
|
7,224
|
|
|
|
Outsourcing technology services
|
|
|
4,840
|
|
|
|
4,600
|
|
|
|
4,338
|
|
|
|
13,654
|
|
|
|
9,942
|
|
|
|
Other professional fees
|
|
|
3,554
|
|
|
|
3,843
|
|
|
|
4,086
|
|
|
|
11,878
|
|
|
|
10,771
|
|
|
|
Credit and debit card processing expenses
|
|
|
3,741
|
|
|
|
3,882
|
|
|
|
2,682
|
|
|
|
11,447
|
|
|
|
8,040
|
|
|
|
Credit card processing platform conversion costs
|
|
|
-
|
|
|
|
-
|
|
|
|
1,715
|
|
|
|
-
|
|
|
|
1,715
|
|
|
|
Branch consolidations and other restructuring expenses
|
|
|
-
|
|
|
|
236
|
|
|
|
-
|
|
|
|
954
|
|
|
|
-
|
|
|
|
Business promotion
|
|
|
3,925
|
|
|
|
4,142
|
|
|
|
3,478
|
|
|
|
12,040
|
|
|
|
10,529
|
|
|
|
Communications
|
|
|
2,143
|
|
|
|
1,894
|
|
|
|
1,866
|
|
|
|
5,916
|
|
|
|
5,565
|
|
|
|
Net loss on OREO operations
|
|
|
4,326
|
|
|
|
6,778
|
|
|
|
7,052
|
|
|
|
16,941
|
|
|
|
27,312
|
|
|
|
Secondary offering costs
|
|
|
-
|
|
|
|
-
|
|
|
|
1,669
|
|
|
|
-
|
|
|
|
1,669
|
|
|
|
Terminated preferred stock exchange offer expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,333
|
|
|
|
Acquisitions of loans from Doral related expenses
|
|
|
659
|
|
|
|
576
|
|
|
|
-
|
|
|
|
1,235
|
|
|
|
-
|
|
|
|
Bulk sales expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8,840
|
|
|
|
Other
|
|
|
5,224
|
|
|
|
5,274
|
|
|
|
5,325
|
|
|
|
14,905
|
|
|
|
19,965
|
|
|
|
Total
|
|
$
|
93,604
|
|
|
$
|
98,145
|
|
|
$
|
99,154
|
|
|
$
|
284,534
|
|
|
$
|
308,487
|
|
|
|
|
|
|
|
|
|
|
Table 6 - Selected Balance Sheet Data
|
|
|
|
|
|
|
|
(In thousands)
|
|
As of
|
|
|
|
|
September 30,
|
|
June 30,
|
|
December 31,
|
|
|
|
|
2014
|
|
2014
|
|
2013
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
Loans, including loans held for sale
|
|
$
|
9,395,416
|
|
|
$
|
9,539,206
|
|
|
$
|
9,712,139
|
|
|
|
Allowance for loan and lease losses
|
|
|
225,434
|
|
|
|
241,177
|
|
|
|
285,858
|
|
|
|
Money market and investment securities
|
|
|
2,019,846
|
|
|
|
2,043,501
|
|
|
|
2,208,342
|
|
|
|
Intangible assets
|
|
|
51,143
|
|
|
|
52,378
|
|
|
|
54,866
|
|
|
|
Deferred tax asset, net
|
|
|
9,853
|
|
|
|
8,738
|
|
|
|
7,644
|
|
|
|
Total assets
|
|
|
12,643,280
|
|
|
|
12,523,251
|
|
|
|
12,656,925
|
|
|
|
Deposits
|
|
|
9,703,174
|
|
|
|
9,630,788
|
|
|
|
9,879,924
|
|
|
|
Borrowings
|
|
|
1,456,959
|
|
|
|
1,451,959
|
|
|
|
1,431,959
|
|
|
|
Total preferred equity
|
|
|
36,104
|
|
|
|
36,104
|
|
|
|
63,047
|
|
|
|
Total common equity
|
|
|
1,322,376
|
|
|
|
1,298,304
|
|
|
|
1,231,547
|
|
|
|
Accumulated other comprehensive loss, net of tax
|
|
|
(34,323
|
)
|
|
|
(28,407
|
)
|
|
|
(78,736
|
)
|
|
|
Total equity
|
|
|
1,324,157
|
|
|
|
1,306,001
|
|
|
|
1,215,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 7 - Consolidated Loan Portfolio
|
|
|
|
|
|
|
|
(In thousands)
|
|
As of
|
|
|
|
|
September 30,
|
|
June 30,
|
|
December 31,
|
|
|
|
|
2014
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage loans
|
|
$
|
2,819,648
|
|
$
|
2,795,159
|
|
$
|
2,549,008
|
|
|
|
|
|
|
|
|
|
|
Commercial loans:
|
|
|
|
|
|
|
|
|
Construction loans
|
|
|
141,689
|
|
|
148,266
|
|
|
168,713
|
|
|
Commercial mortgage loans
|
|
|
1,812,094
|
|
|
1,813,930
|
|
|
1,823,608
|
|
|
Commercial and Industrial loans
|
|
|
2,515,384
|
|
|
2,647,478
|
|
|
2,788,250
|
|
|
Loans to local financial institutions collateralized by real estate
mortgages
|
|
|
-
|
|
|
-
|
|
|
240,072
|
|
Commercial loans
|
|
|
4,469,167
|
|
|
4,609,674
|
|
|
5,020,643
|
|
|
|
|
|
|
|
|
|
|
Finance leases
|
|
|
236,115
|
|
|
240,593
|
|
|
245,323
|
|
|
|
|
|
|
|
|
|
|
Consumer loans
|
|
|
1,790,472
|
|
|
1,821,675
|
|
|
1,821,196
|
|
|
Loans held for investment
|
|
|
9,315,402
|
|
|
9,467,101
|
|
|
9,636,170
|
|
Loans held for sale
|
|
|
80,014
|
|
|
72,105
|
|
|
75,969
|
|
|
Total loans
|
|
$
|
9,395,416
|
|
$
|
9,539,206
|
|
$
|
9,712,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 8 - Loan Portfolio by Geography
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
As of September 30, 2014
|
|
|
|
|
Puerto Rico
|
|
Virgin Islands
|
|
United States
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage loans
|
|
$
|
2,139,435
|
|
$
|
343,620
|
|
$
|
336,593
|
|
$
|
2,819,648
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
Construction loans
|
|
|
92,734
|
|
|
25,631
|
|
|
23,324
|
|
|
141,689
|
|
|
Commercial mortgage loans
|
|
|
1,445,044
|
|
|
71,888
|
|
|
295,162
|
|
|
1,812,094
|
|
|
Commercial and Industrial loans
|
|
|
2,131,996
|
|
|
109,943
|
|
|
273,445
|
|
|
2,515,384
|
|
Commercial loans
|
|
|
3,669,774
|
|
|
207,462
|
|
|
591,931
|
|
|
4,469,167
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance leases
|
|
|
236,115
|
|
|
-
|
|
|
-
|
|
|
236,115
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer loans
|
|
|
1,705,885
|
|
|
48,841
|
|
|
35,746
|
|
|
1,790,472
|
|
Loans held for investment
|
|
|
7,751,209
|
|
|
599,923
|
|
|
964,270
|
|
|
9,315,402
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for sale
|
|
|
37,909
|
|
|
40,325
|
|
|
1,780
|
|
|
80,014
|
|
|
Total loans
|
|
$
|
7,789,118
|
|
$
|
640,248
|
|
$
|
966,050
|
|
$
|
9,395,416
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
As of June 30, 2014
|
|
|
|
|
Puerto Rico
|
|
Virgin Islands
|
|
United States
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage loans
|
|
$
|
2,132,586
|
|
$
|
342,516
|
|
$
|
320,057
|
|
$
|
2,795,159
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
Construction loans
|
|
|
94,979
|
|
|
30,855
|
|
|
22,432
|
|
|
148,266
|
|
|
Commercial mortgage loans
|
|
|
1,423,948
|
|
|
72,262
|
|
|
317,720
|
|
|
1,813,930
|
|
|
Commercial and Industrial loans
|
|
|
2,260,456
|
|
|
149,884
|
|
|
237,138
|
|
|
2,647,478
|
|
Commercial loans
|
|
|
3,779,383
|
|
|
253,001
|
|
|
577,290
|
|
|
4,609,674
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance leases
|
|
|
240,593
|
|
|
-
|
|
|
-
|
|
|
240,593
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer loans
|
|
|
1,738,203
|
|
|
49,737
|
|
|
33,735
|
|
|
1,821,675
|
|
Loans held for investment
|
|
|
7,890,765
|
|
|
645,254
|
|
|
931,082
|
|
|
9,467,101
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for sale
|
|
|
31,168
|
|
|
40,153
|
|
|
784
|
|
|
72,105
|
|
|
Total loans
|
|
$
|
7,921,933
|
|
$
|
685,407
|
|
$
|
931,866
|
|
$
|
9,539,206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
As of December 31, 2013
|
|
|
|
|
Puerto Rico
|
|
Virgin Islands
|
|
United States
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage loans
|
|
$
|
1,906,982
|
|
$
|
348,816
|
|
$
|
293,210
|
|
$
|
2,549,008
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
Construction loans
|
|
|
105,830
|
|
|
33,744
|
|
|
29,139
|
|
|
168,713
|
|
|
Commercial mortgage loans
|
|
|
1,464,085
|
|
|
74,271
|
|
|
285,252
|
|
|
1,823,608
|
|
|
Commercial and Industrial loans
|
|
|
2,436,709
|
|
|
125,757
|
|
|
225,784
|
|
|
2,788,250
|
|
|
Loans to a local financial institution collateralized by real estate
mortgages
|
|
|
240,072
|
|
|
-
|
|
|
-
|
|
|
240,072
|
|
Commercial loans
|
|
|
4,246,696
|
|
|
233,772
|
|
|
540,175
|
|
|
5,020,643
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance leases
|
|
|
245,323
|
|
|
-
|
|
|
-
|
|
|
245,323
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer loans
|
|
|
1,739,478
|
|
|
49,689
|
|
|
32,029
|
|
|
1,821,196
|
|
Loans held for investment
|
|
|
8,138,479
|
|
|
632,277
|
|
|
865,414
|
|
|
9,636,170
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for sale
|
|
|
35,394
|
|
|
40,575
|
|
|
-
|
|
|
75,969
|
|
|
Total loans
|
|
$
|
8,173,873
|
|
$
|
672,852
|
|
$
|
865,414
|
|
$
|
9,712,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 9 - Consolidated Non-Performing Assets
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
September 30,
|
|
June 30,
|
|
December 31,
|
|
|
|
|
2014
|
|
2014
|
|
2013
|
|
Non-performing loans held for investment:
|
|
|
|
|
|
|
|
|
Residential mortgage
|
|
$
|
185,025
|
|
|
$
|
175,404
|
|
|
$
|
161,441
|
|
|
|
Commercial mortgage
|
|
|
169,967
|
|
|
|
166,218
|
|
|
|
120,107
|
|
|
|
Commercial and Industrial
|
|
|
130,917
|
|
|
|
143,669
|
|
|
|
114,833
|
|
|
|
Construction
|
|
|
30,111
|
|
|
|
38,830
|
|
|
|
58,866
|
|
|
|
Consumer and Finance leases
|
|
|
43,496
|
|
|
|
40,510
|
|
|
|
40,302
|
|
|
|
Total non-performing loans held for investment
|
|
|
559,516
|
|
|
|
564,631
|
|
|
|
495,549
|
|
|
|
|
|
|
|
|
|
|
|
OREO
|
|
|
112,803
|
|
|
|
121,842
|
|
|
|
160,193
|
|
|
Other repossessed property
|
|
|
17,467
|
|
|
|
16,114
|
|
|
|
14,865
|
|
|
|
Total non-performing assets, excluding loans held for sale
|
|
$
|
689,786
|
|
|
$
|
702,587
|
|
|
$
|
670,607
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing loans held for sale
|
|
|
54,641
|
|
|
|
54,755
|
|
|
|
54,801
|
|
|
|
Total non-performing assets, including loans held for sale (1)
|
|
$
|
744,427
|
|
|
$
|
757,342
|
|
|
$
|
725,408
|
|
|
|
|
|
|
|
|
|
|
|
Past-due loans 90 days and still accruing (2)
|
|
$
|
143,535
|
|
|
$
|
143,916
|
|
|
$
|
120,082
|
|
|
Allowance for loan and lease losses
|
|
$
|
225,434
|
|
|
$
|
241,177
|
|
|
$
|
285,858
|
|
|
Allowance to total non-performing loans held for investment
|
|
|
40.29
|
%
|
|
|
42.71
|
%
|
|
|
57.69
|
%
|
|
Allowance to total non-performing loans held for investment,
excluding residential real estate loans
|
|
|
60.20
|
%
|
|
|
61.96
|
%
|
|
|
85.56
|
%
|
|
|
|
|
|
|
|
|
|
|
(1) Purchased credit impaired loans of $104.3 million accounted
for under ASC 310-30 as of September 30, 2014, primarily mortgage
loans acquired from Doral in the second quarter of 2014, are
excluded and not considered non-performing due to the application
of the accretion method, under which these loans will accrete
interest income over the remaining life of the loans using
estimated cash flow analysis.
|
|
(2) Amount includes purchased credit impaired loans with
individual delinquencies over 90 days and still accruing with a
carrying value as of September 30, 2014 of approximately $15.6
million, primarily related to loans acquired from Doral.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 10 - Non-Performing Assets by Geography
|
|
|
|
|
|
|
|
(In thousands)
|
|
September 30,
|
|
June 30,
|
|
December 31,
|
|
|
|
|
2014
|
|
2014
|
|
2013
|
|
Puerto Rico:
|
|
|
|
|
|
|
|
Non-performing loans held for investment:
|
|
|
|
|
|
|
|
|
Residential mortgage
|
|
$
|
159,740
|
|
$
|
149,946
|
|
$
|
139,771
|
|
|
Commercial mortgage
|
|
|
147,909
|
|
|
142,417
|
|
|
101,255
|
|
|
Commercial and Industrial
|
|
|
124,406
|
|
|
137,046
|
|
|
109,224
|
|
|
Construction
|
|
|
25,780
|
|
|
30,229
|
|
|
43,522
|
|
|
Finance leases
|
|
|
4,501
|
|
|
3,414
|
|
|
3,082
|
|
|
Consumer
|
|
|
36,722
|
|
|
34,768
|
|
|
34,660
|
|
|
Total non-performing loans held for investment
|
|
|
499,058
|
|
|
497,820
|
|
|
431,514
|
|
|
|
|
|
|
|
|
|
|
OREO
|
|
|
99,721
|
|
|
101,051
|
|
|
123,851
|
|
Other repossessed property
|
|
|
17,437
|
|
|
16,056
|
|
|
14,806
|
|
|
Total non-performing assets, excluding loans held for sale
|
|
$
|
616,216
|
|
$
|
614,927
|
|
$
|
570,171
|
|
Non-performing loans held for sale
|
|
|
14,636
|
|
|
14,750
|
|
|
14,796
|
|
|
Total non-performing assets, including loans held for sale (1)
|
|
$
|
630,852
|
|
$
|
629,677
|
|
$
|
584,967
|
|
Past-due loans 90 days and still accruing (2)
|
|
$
|
140,229
|
|
$
|
139,173
|
|
$
|
118,097
|
|
|
|
|
|
|
|
|
|
|
Virgin Islands:
|
|
|
|
|
|
|
|
Non-performing loans held for investment:
|
|
|
|
|
|
|
|
|
Residential mortgage
|
|
$
|
13,576
|
|
$
|
12,797
|
|
$
|
8,439
|
|
|
Commercial mortgage
|
|
|
7,044
|
|
|
7,708
|
|
|
6,827
|
|
|
Commercial and Industrial
|
|
|
6,511
|
|
|
6,623
|
|
|
5,609
|
|
|
Construction
|
|
|
4,173
|
|
|
8,442
|
|
|
11,214
|
|
|
Consumer
|
|
|
861
|
|
|
876
|
|
|
514
|
|
|
Total non-performing loans held for investment
|
|
|
32,165
|
|
|
36,446
|
|
|
32,603
|
|
|
|
|
|
|
|
|
|
|
OREO
|
|
|
7,904
|
|
|
14,597
|
|
|
14,894
|
|
Other repossessed property
|
|
|
3
|
|
|
-
|
|
|
5
|
|
|
Total non-performing assets, excluding loans held for sale
|
|
$
|
40,072
|
|
$
|
51,043
|
|
$
|
47,502
|
|
Non-performing loans held for sale
|
|
|
40,005
|
|
|
40,005
|
|
|
40,005
|
|
|
Total non-performing assets, including loans held for sale
|
|
$
|
80,077
|
|
$
|
91,048
|
|
$
|
87,507
|
|
Past-due loans 90 days and still accruing
|
|
$
|
2,766
|
|
$
|
4,743
|
|
$
|
1,985
|
|
|
|
|
|
|
|
|
|
|
United States:
|
|
|
|
|
|
|
|
Non-performing loans held for investment:
|
|
|
|
|
|
|
|
|
Residential mortgage
|
|
$
|
11,709
|
|
$
|
12,661
|
|
$
|
13,231
|
|
|
Commercial mortgage
|
|
|
15,014
|
|
|
16,093
|
|
|
12,025
|
|
|
Commercial and Industrial
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
Construction
|
|
|
158
|
|
|
159
|
|
|
4,130
|
|
|
Consumer
|
|
|
1,412
|
|
|
1,452
|
|
|
2,046
|
|
|
Total non-performing loans held for investment
|
|
|
28,293
|
|
|
30,365
|
|
|
31,432
|
|
|
|
|
|
|
|
|
|
|
OREO
|
|
|
5,178
|
|
|
6,194
|
|
|
21,448
|
|
Other repossessed property
|
|
|
27
|
|
|
58
|
|
|
54
|
|
|
Total non-performing assets, excluding loans held for sale
|
|
$
|
33,498
|
|
$
|
36,617
|
|
$
|
52,934
|
|
Non-performing loans held for sale
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
Total non-performing assets, including loans held for sale
|
|
$
|
33,498
|
|
$
|
36,617
|
|
$
|
52,934
|
|
Past-due loans 90 days and still accruing
|
|
$
|
540
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
(1) Purchased credit impaired loans of $104.3 million accounted
for under ASC 310-30 as of September 30, 2014, primarily mortgage
loans acquired from Doral in the second quarter of 2014, are
excluded and not considered non-performing due to the application
of the accretion method, under which these loans will accrete
interest income over the remaining life of the loans using
estimated cash flow analysis.
|
|
(2) Amount includes purchased credit impaired loans with
individual delinquencies over 90 days and still accruing with a
carrying value as of September 30, 2014 of approximately $15.6
million, primarily related to loans acquired from Doral.
|
|
|
|
|
Table 11 - Allowance for Loan and Lease Losses
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Nine-Month Period Ended
|
|
|
(Dollars in thousands)
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
2014
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses, beginning of period
|
|
$
|
241,177
|
|
|
$
|
266,778
|
|
|
$
|
301,047
|
|
|
$
|
285,858
|
|
|
$
|
435,414
|
|
|
|
Provision for loan and lease losses
|
|
|
26,999
|
|
|
|
26,744
|
|
(1)
|
|
22,195
|
|
|
|
85,658
|
|
(1)
|
|
220,782
|
|
(3)
|
|
Net (charge-offs) recoveries of loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage
|
|
|
(5,734
|
)
|
|
|
(4,687
|
)
|
|
|
(8,457
|
)
|
|
|
(16,774
|
)
|
|
|
(123,455
|
)
|
(4)
|
|
|
Commercial mortgage
|
|
|
1,116
|
|
|
|
(9,126
|
)
|
|
|
(5,918
|
)
|
|
|
(13,785
|
)
|
|
|
(65,207
|
)
|
(5)
|
|
|
Commercial and Industrial
|
|
|
(16,431
|
)
|
|
|
(19,036
|
)
|
(2)
|
|
(5,718
|
)
|
|
|
(57,263
|
)
|
(2)
|
|
(96,067
|
)
|
(6)
|
|
|
Construction
|
|
|
(3,205
|
)
|
|
|
(2,606
|
)
|
|
|
71
|
|
|
|
(6,164
|
)
|
|
|
(40,812
|
)
|
(7)
|
|
|
Consumer and finance leases
|
|
|
(18,488
|
)
|
|
|
(16,890
|
)
|
|
|
(13,841
|
)
|
|
|
(52,096
|
)
|
|
|
(41,276
|
)
|
|
|
Net charge-offs
|
|
|
(42,742
|
)
|
|
|
(52,345
|
)
|
(2)
|
|
(33,863
|
)
|
|
|
(146,082
|
)
|
(2)
|
|
(366,817
|
)
|
(8)
|
|
Allowance for loan and lease losses, end of period
|
|
$
|
225,434
|
|
|
$
|
241,177
|
|
|
$
|
289,379
|
|
|
$
|
225,434
|
|
|
$
|
289,379
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses to period end total loans held
for investment
|
|
|
2.42
|
%
|
|
|
2.55
|
%
|
|
|
3.04
|
%
|
|
|
2.42
|
%
|
|
|
3.04
|
%
|
|
|
Net charge-offs (annualized) to average loans outstanding during the
period
|
|
|
1.80
|
%
|
|
|
2.19
|
%
|
|
|
1.41
|
%
|
|
|
2.04
|
%
|
|
|
4.97
|
%
|
|
|
Net charge-offs (annualized), excluding charge-offs related to the
acquisition of mortgage loans from Doral, loans sold and loans
transferred to held for sale, to average loans outstanding during
the period
|
|
|
1.80
|
%
|
|
|
1.90
|
%
|
|
|
1.41
|
%
|
|
|
1.94
|
%
|
|
|
1.87
|
%
|
|
|
Provision for loan and lease losses to net charge-offs during the
period
|
|
0.63x
|
|
0.51x
|
|
0.66x
|
|
0.59x
|
|
0.60x
|
|
|
Provision for loan and lease losses to net charge-offs during the
period, excluding impact of the acquisition of mortgage loans from
Doral, loans sold and the transfer of loans to held for sale
|
|
0.63x
|
|
0.56x
|
|
0.66x
|
|
0.61x
|
|
0.66x
|
|
|
(1) Includes provision of $1.4 million associated with the
acquisition of mortgage loans from Doral.
|
|
|
(2) Includes net charge-offs totaling $6.9 million associated with
the acquisition of mortgage loans from Doral.
|
|
|
(3) Includes provision of $132.0 million associated with the bulk
sales and the transfer of loans to held for sale.
|
|
|
(4) Includes net charge-offs totaling $99.0 million associated with
the bulk sales.
|
|
|
(5) Includes net charge-offs of $54.6 million associated with the
bulk sale of adversely classified commercial assets and the transfer
of loans to held for sale.
|
|
|
(6) Includes net charge-offs totaling $44.7 million associated with
the bulk sale of adversely classified commercial assets.
|
|
|
(7) Includes net charge-offs of $34.2 million associated with the
bulk sales and the transfer of loans to held for sale.
|
|
|
(8) Includes net charge-offs of $232.4 million associated with the
bulk sales and the transfer of loans to held for sale.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 12 – Net Charge-Offs to Average Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine-Month Period Ended
|
|
|
Year ended
|
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage
|
|
0.84
|
%
|
|
|
4.77
|
%
|
(3)
|
|
1.32
|
%
|
|
1.32
|
%
|
|
1.80
|
%
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial mortgage
|
|
1.00
|
%
|
|
|
3.44
|
%
|
(4)
|
|
1.41
|
%
|
|
3.21
|
%
|
|
5.02
|
%
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and Industrial
|
|
2.72
|
%
|
(1)
|
|
3.52
|
%
|
(5)
|
|
1.21
|
%
|
|
1.57
|
%
|
|
2.16
|
%
|
(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
|
|
4.04
|
%
|
|
|
15.11
|
%
|
(6)
|
|
10.49
|
%
|
|
16.33
|
%
|
|
23.80
|
%
|
(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer and finance leases
|
|
3.37
|
%
|
|
|
2.76
|
%
|
|
|
1.92
|
%
|
|
2.33
|
%
|
|
2.98
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans
|
|
2.04
|
%
|
(2)
|
|
4.01
|
%
|
(7)
|
|
1.74
|
%
|
|
2.68
|
%
|
|
4.76
|
%
|
(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes net charge-offs totaling $6.9 million associated with
the acquisition of mortgage loans from Doral. The ratio of
commercial and industrial net charge-offs to average loans,
excluding charge-offs associated with the acquisition of mortgage
loans from Doral, was 2.51%.
|
|
(2) Includes net charge-offs totaling $6.9 million associated with
the acquisition of mortgage loans from Doral. The ratio of total
net charge-offs to average loans, excluding charge-offs associated
with the acquisition of mortgage loans from Doral, was 1.94%.
|
|
(3) Includes net charge-offs totaling $99.0 million associated with
the bulk loan sales. The ratio of residential mortgage net
charge-offs to average loans, excluding charge-offs associated with
the bulk loan sales, was 1.13%.
|
|
(4) Includes net charge-offs of $54.6 million associated with the
bulk sale of adversely classified commercial assets and the
transfer of loans to held for sale in the first quarter of 2013.
The ratio of commercial mortgage net charge-offs to average loans,
excluding charge-offs associated with the bulk sale of adversely
classified commercial assets and the transfer of loans to held for
sale, was 0.45%.
|
|
(5) Includes net charge-offs totaling $44.7 million associated with
the bulk sale of adversely classified commercial assets. The ratio
of commercial and industrial net charge-offs to average loans,
excluding charge-offs associated with the bulk sale of adversely
classified commercial assets, was 2.04%.
|
|
(6) Includes net charge-offs of $34.2 million associated with the
bulk loan sales and the transfer of loans to held for sale. The
ratio of construction loan net charge-offs to average loans,
excluding charge-offs associated with the bulk loan sales and the
transfer of loans to held for sale, was 2.91%.
|
|
(7) Includes net charge-offs of $232.4 million associated with the
bulk loan sales and the transfer of loans to held for sale. The
ratio of total net charge-offs to average loans, excluding
charge-offs associated with the bulk loan sales and the transfer
of loans to held for sale, was 1.68%.
|
|
(8) Includes net charge-offs totaling $7.8 million associated with
non-performing residential mortgage loans sold in a bulk sale.
|
|
(9) Includes net charge-offs totaling $29.5 million associated with
the transfer of loans to held for sale in the fourth quarter of
2010. The ratio of commercial mortgage net charge-offs to average
loans, excluding charge-offs associated with the transfer of loans
to held for sale, was 3.38%.
|
|
(10) Includes net charge-offs totaling $8.6 million associated with
the transfer of loans to held for sale in the fourth quarter of
2010. The ratio of commercial and industrial net charge-offs to
average loans, excluding charge-offs associated with the transfer of
loans to held for sale, was 1.98%.
|
|
(11) Includes net charge-offs totaling $127.0 million associated
with the transfer of loans to held for sale in the fourth quarter
of 2010. The ratio of construction net charge-offs to average
loans, excluding charge-offs associated with the transfer of loans
to held for sale, was 18.93%.
|
|
(12) Includes net charge-offs totaling $165.1 million associated
with the transfer of loans to held for sale in the fourth quarter
of 2010. The ratio of total net charge-offs to average loans,
excluding charge-offs associated with the transfer of loans to
held for sale, was 3.60%.
|
|
|
Copyright Business Wire 2014