Puerto Rico | 66-0561882 | |
(State or Other Jurisdiction | (I.R.S. Employer | |
of Incorporation) | Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition | ||||||||
Item 8.01 Other Events | ||||||||
Item 9.01 Financial Statements and Exhibits | ||||||||
SIGNATURE | ||||||||
Exhibit Index | ||||||||
EX-99.1 | ||||||||
EX-99.2 |
Quarter Ended | Year Ended | |||||||||||||||||||||||||||
December 31, 2010 | September 30, 2010 | June 30, 2010 | March 31, 2010 | December 31, 2009 | December 31, 2010 | December 31, 2009 | ||||||||||||||||||||||
Net Interest Income (in thousands) |
||||||||||||||||||||||||||||
Interest Income GAAP |
$ | 192,806 | $ | 204,028 | $ | 214,864 | $ | 220,988 | $ | 243,449 | $ | 832,686 | $ | 996,574 | ||||||||||||||
Unrealized (gain) loss on
derivative instruments |
(903 | ) | 938 | 487 | 744 | (2,764 | ) | 1,266 | (5,519 | ) | ||||||||||||||||||
Interest income excluding valuations |
191,903 | 204,966 | 215,351 | 221,732 | 240,685 | 833,952 | 991,055 | |||||||||||||||||||||
Tax-equivalent adjustment |
4,494 | 6,778 | 7,222 | 9,912 | 12,311 | 28,406 | 53,617 | |||||||||||||||||||||
Interest income on a tax-equivalent basis excluding valuations |
196,397 | 211,744 | 222,573 | 231,644 | 252,996 | 862,358 | 1,044,672 | |||||||||||||||||||||
Interest Expense GAAP |
80,758 | 90,326 | 95,802 | 104,125 | 106,152 | 371,011 | 477,532 | |||||||||||||||||||||
Unrealized (loss) gain on
derivative instruments and liabilities measured at fair value |
(813 | ) | (526 | ) | 3,896 | (989 | ) | (247 | ) | 1,568 | (45 | ) | ||||||||||||||||
Interest expense excluding valuations |
79,945 | 89,800 | 99,698 | 103,136 | 105,905 | 372,579 | 477,487 | |||||||||||||||||||||
Net interest income GAAP |
$ | 112,048 | $ | 113,702 | $ | 119,062 | $ | 116,863 | $ | 137,297 | $ | 461,675 | $ | 519,042 | ||||||||||||||
Net interest income excluding valuations |
$ | 111,958 | $ | 115,166 | $ | 115,653 | $ | 118,596 | $ | 134,780 | $ | 461,373 | $ | 513,568 | ||||||||||||||
Net interest income on a tax-equivalent basis excluding valuations |
$ | 116,452 | $ | 121,944 | $ | 122,875 | $ | 128,508 | $ | 147,091 | $ | 489,779 | $ | 567,185 | ||||||||||||||
Average Balances (in thousands) |
||||||||||||||||||||||||||||
Loans and leases |
$ | 12,185,511 | $ | 12,443,055 | $ | 13,025,808 | $ | 13,569,467 | $ | 13,777,928 | $ | 12,801,107 | $ | 13,460,562 | ||||||||||||||
Total securities and other short-term investments |
3,863,532 | 4,640,055 | 5,485,934 | 5,526,589 | 5,505,527 | 4,873,837 | 5,865,662 | |||||||||||||||||||||
Average Interest-Earning Assets |
$ | 16,049,043 | $ | 17,083,110 | $ | 18,511,742 | $ | 19,096,056 | $ | 19,283,455 | $ | 17,674,944 | $ | 19,326,224 | ||||||||||||||
Average Interest-Bearing Liabilities |
$ | 14,036,776 | $ | 15,002,168 | $ | 16,378,022 | $ | 16,910,781 | $ | 17,112,556 | $ | 15,560,623 | $ | 17,099,692 | ||||||||||||||
Average Yield/Rate |
||||||||||||||||||||||||||||
Average yield on interest-earning assets GAAP |
4.77 | % | 4.74 | % | 4.66 | % | 4.69 | % | 5.01 | % | 4.71 | % | 5.16 | % | ||||||||||||||
Average rate on interest-bearing liabilities GAAP |
2.28 | % | 2.39 | % | 2.35 | % | 2.50 | % | 2.46 | % | 2.38 | % | 2.79 | % | ||||||||||||||
Net interest spread GAAP |
2.49 | % | 2.35 | % | 2.31 | % | 2.19 | % | 2.55 | % | 2.33 | % | 2.37 | % | ||||||||||||||
Net interest margin GAAP |
2.77 | % | 2.64 | % | 2.58 | % | 2.48 | % | 2.82 | % | 2.61 | % | 2.69 | % | ||||||||||||||
Average yield on interest-earning assets excluding valuations |
4.74 | % | 4.76 | % | 4.66 | % | 4.71 | % | 4.95 | % | 4.72 | % | 5.13 | % | ||||||||||||||
Average rate on interest-bearing liabilities excluding valuations |
2.26 | % | 2.37 | % | 2.44 | % | 2.47 | % | 2.46 | % | 2.39 | % | 2.79 | % | ||||||||||||||
Net interest spread excluding valuations |
2.48 | % | 2.39 | % | 2.22 | % | 2.24 | % | 2.49 | % | 2.33 | % | 2.34 | % | ||||||||||||||
Net interest margin excluding valuations |
2.77 | % | 2.67 | % | 2.51 | % | 2.52 | % | 2.77 | % | 2.61 | % | 2.66 | % | ||||||||||||||
Average yield on interest-earning assets on a tax-equivalent basis and excluding valuations |
4.86 | % | 4.92 | % | 4.82 | % | 4.92 | % | 5.21 | % | 4.88 | % | 5.41 | % | ||||||||||||||
Average rate on interest-bearing liabilities excluding valuations |
2.26 | % | 2.37 | % | 2.44 | % | 2.47 | % | 2.46 | % | 2.39 | % | 2.79 | % | ||||||||||||||
Net interest spread on a tax-equivalent basis and excluding valuations |
2.60 | % | 2.55 | % | 2.38 | % | 2.45 | % | 2.75 | % | 2.48 | % | 2.62 | % | ||||||||||||||
Net interest margin on a tax-equivalent basis and excluding valuations |
2.88 | % | 2.83 | % | 2.66 | % | 2.73 | % | 3.03 | % | 2.77 | % | 2.93 | % | ||||||||||||||
As of | ||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
2010 | 2010 | 2010 | 2010 | 2009 | ||||||||||||||||
Tangible Equity: |
||||||||||||||||||||
Total equity GAAP |
$ | 1,151,663 | $ | 1,321,979 | $ | 1,438,289 | $ | 1,488,543 | $ | 1,599,063 | ||||||||||
Preferred equity |
(425,009 | ) | (411,876 | ) | (930,830 | ) | (929,660 | ) | (928,508 | ) | ||||||||||
Goodwill |
(28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | ||||||||||
Core deposit intangible |
(14,043 | ) | (14,673 | ) | (15,303 | ) | (15,934 | ) | (16,600 | ) | ||||||||||
Tangible common equity |
$ | 684,513 | $ | 867,332 | $ | 464,058 | $ | 514,851 | $ | 625,857 | ||||||||||
Tangible Assets: |
||||||||||||||||||||
Total assets GAAP |
$ | 15,686,781 | $ | 16,678,879 | $ | 18,116,023 | $ | 18,850,964 | $ | 19,628,448 | ||||||||||
Goodwill |
(28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | ||||||||||
Core deposit intangible |
(14,043 | ) | (14,673 | ) | (15,303 | ) | (15,934 | ) | (16,600 | ) | ||||||||||
Tangible assets |
$ | 15,644,640 | $ | 16,636,108 | $ | 18,072,622 | $ | 18,806,932 | $ | 19,583,750 | ||||||||||
Common shares outstanding |
21,304 | 21,304 | 6,169 | 6,169 | 6,169 | |||||||||||||||
Tangible common equity ratio |
4.38 | % | 5.21 | % | 2.57 | % | 2.74 | % | 3.20 | % | ||||||||||
Tangible book value per common share |
$ | 32.13 | $ | 40.71 | $ | 75.22 | $ | 83.45 | $ | 101.44 |
As of | ||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
2010 | 2010 | 2010 | 2010 | 2009 | ||||||||||||||||
Tier 1 Common Equity: |
||||||||||||||||||||
Total equity GAAP |
$ | 1,151,663 | $ | 1,321,979 | $ | 1,438,289 | $ | 1,488,543 | $ | 1,599,063 | ||||||||||
Qualifying preferred stock |
(425,009 | ) | (411,876 | ) | (930,830 | ) | (929,660 | ) | (928,508 | ) | ||||||||||
Unrealized gain on available-for-sale securities (1) |
(17,718 | ) | (30,295 | ) | (63,311 | ) | (22,948 | ) | (26,617 | ) | ||||||||||
Disallowed deferred tax asset (2) |
(37,515 | ) | (43,552 | ) | (38,078 | ) | (40,522 | ) | (11,827 | ) | ||||||||||
Goodwill |
(28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | (28,098 | ) | ||||||||||
Core deposit intangible |
(14,043 | ) | (14,673 | ) | (15,303 | ) | (15,934 | ) | (16,600 | ) | ||||||||||
Cumulative change gain in fair value of liabilities
accounted for under a fair value option |
(2,185 | ) | (2,654 | ) | (3,170 | ) | (951 | ) | (1,535 | ) | ||||||||||
Other disallowed assets |
(226 | ) | (636 | ) | (66 | ) | (24 | ) | (24 | ) | ||||||||||
Tier 1 common equity |
$ | 626,869 | $ | 790,195 | $ | 359,433 | $ | 450,406 | $ | 585,854 | ||||||||||
Total risk-weighted assets |
$ | 11,613,637 | $ | 11,930,854 | $ | 12,570,330 | $ | 13,402,979 | $ | 14,303,496 | ||||||||||
Tier 1 common equity to risk-weighted assets ratio |
5.40 | % | 6.62 | % | 2.86 | % | 3.36 | % | 4.10 | % |
1- | Tier 1 capital excludes net unrealized gains (losses) on available-for-sale debt securities and net unrealized gains on available-for-sale equity securities with readily determinable fair values, in accordance with regulatory risk-based capital guidelines. In arriving at Tier 1 capital, institutions are required to deduct net unrealized losses on available-for-sale equity securities with readily determinable fair values, net of tax. | |
2- | Approximately $71 million of the Corporations deferred tax assets at December 31, 2010 (September 30, 2010 $64 million; June 30, 2010 $71 million; March 31, 2010 $69 million; December 31, 2009 $102 million) were included without limitation in regulatory capital pursuant to the risk-based capital guidelines, while approximately $38 million of such assets at December 31, 2010 (September 30, 2010 $44 million; June 30, 2010 $38 million; March 31, 2010 $41 million; December 31, 2009 $12 million) exceeded the limitation imposed by these guidelines and, as disallowed deferred tax assets, were deducted in arriving at Tier 1 capital. According to regulatory capital guidelines, the deferred tax assets that are dependent upon future taxable income are limited for inclusion in Tier 1 capital to the lesser of: (i) the amount of such deferred tax asset that the entity expects to realize within one year of the calendar quarter end-date, based on its projected future taxable income for that year, or (ii) 10% of the amount of the entitys Tier 1 capital. Approximately $6 million of the Corporations other net deferred tax liability at December 31, 2010 (September 30, 2010 $7 million; June 30, 2010 $12 million; March 31, 2010 $5 million; December 31, 2009 $5 million) represented primarily the deferred tax effects of unrealized gains and losses on available-for-sale debt securities, which are permitted to be excluded prior to deriving the amount of net deferred tax assets subject to limitation under the guidelines. |
Quarter Ended | ||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
2010 | 2010 | 2010 | 2010 | 2009 | ||||||||||||||||
Loss before income taxes |
$ | (158,016 | ) | $ | (76,196 | ) | $ | (86,817 | ) | $ | (100,138 | ) | $ | (49,891 | ) | |||||
Add: Provision for loan and lease losses |
196,347 | 120,482 | 146,793 | 170,965 | 137,187 | |||||||||||||||
Less: Net loss (gain) on sale and OTTI of investment securities |
620 | (48,281 | ) | (24,237 | ) | (30,764 | ) | (24,387 | ) | |||||||||||
Add: Loss on early extinguishment of repurchase agreements |
| 47,405 | | | | |||||||||||||||
Adjusted Pre-tax, pre-provision income |
$ | 38,951 | $ | 43,410 | $ | 35,739 | $ | 40,063 | $ | 62,909 | ||||||||||
Change from most recent prior quarter amount |
$ | (4,459 | ) | $ | 7,671 | $ | (4,324 | ) | $ | (22,846 | ) | $ | 629 | |||||||
Change from most recent prior quarter percent |
-10.3 | % | 21.5 | % | -10.8 | % | -36.3 | % | 1.0 | % |
Net Loss and Loss per share (Non-GAAP to GAAP reconciliation) | ||||||||||||||||||||||||
Quarter ended | Year ended | |||||||||||||||||||||||
December 31, 2010 | December 31, 2010 | |||||||||||||||||||||||
Net Loss attributable | Net Loss attributable | |||||||||||||||||||||||
(In thousands, except per share information) | Net Loss | to common stockholders (diluted)(3) | Per Share (diluted) | Net Loss | to common stockholders (diluted)(3) | Per Share (diluted) | ||||||||||||||||||
Net loss, net loss attributable to common stockholders and loss per share, excluding
special items (Non-GAAP) |
$ | (54,794 | ) | $ | (73,229 | ) | $ | (3.44 | ) | $ | (327,666 | ) | $ | (365,912 | ) | $ | (32.35 | ) | ||||||
Special items: |
||||||||||||||||||||||||
Loan sale transaction (1) |
(102,938 | ) | (102,938 | ) | (4.83 | ) | (102,938 | ) | (102,938 | ) | (9.10 | ) | ||||||||||||
Exchange transactions (2) |
| | | | 440,509 | 38.94 | ||||||||||||||||||
Net Income (loss) and earnings (loss) per share (GAAP) |
$ | (157,732 | ) | $ | (176,167 | ) | $ | (8.27 | ) | $ | (430,604 | ) | $ | (28,341 | ) | $ | (2.51 | ) | ||||||
1- | In the fourth quarter 2010, the Corporation recorded a charge of $102.9 million to the provision for loan and lease losses associated with $447 million of loans transferred to held for sale. | |
2- | In the third quarter of 2010, the Corporation recorded a one-time favorable impact to retained earnings of $385.4 million that represents the excess of the carrying amount of Series A through E preferred stock exchanged over the fair value of new common shares issued and of $55.1 million that represents the excess of the carrying amount of Series F preferred stock exchanged and original warrant over the fair value of new Series G preferred stock issued and amended warrant. | |
3- | The difference between the net loss and the net loss attributable to common stockholders consists of: (1) cumulative convertible preferred stock dividends of $5.3 million and $21.1 million for the quarter and year ended December 31, 2010, respectively, (ii) the accretion of the preferred stock discount of $13.1 million and $17.1 million for the quarter and year ended December 31, 2010, respectively, including an adjustment of $11.3 million recorded in the fourth quarter of 2010 as an acceleration of the Series G preferred stock discount accretion resulting from an amendment to the exchange agreement with the U.S. Treasury, and (iii) the aforementioned favorable impact to retained earnings of $440 million resulting from the exchange transactions completed in the third quarter of 2010. |
Provision for Loan and Lease Losses, Net Charge-Offs, Provision for Loans and | ||||||||||||||||
Lease Losses to Net Charge-Offs, and Net Charge-Offs to Average Loans (Non- | ||||||||||||||||
GAAP to GAAP reconciliation) | ||||||||||||||||
Quarter ended | Year ended | |||||||||||||||
December 31, 2010 | December 31, 2010 | |||||||||||||||
Provision for Loan | Provision for Loan | |||||||||||||||
(In thousands, except per share information) | and Lease Losses | Net Charge-Offs | and Lease Losses | Net Charge-Offs | ||||||||||||
Provision for loan and lease losses, net charge-offs,
and average loans, excluding
special items (Non-GAAP) |
$ | 93,409 | $ | 86,791 | $ | 531,649 | $ | 444,625 | ||||||||
Special items: |
||||||||||||||||
Loan sale transaction (1) |
102,938 | 165,057 | 102,938 | 165,057 | ||||||||||||
Provision for loan and lease losses, net charge-offs and average loans (GAAP) |
$ | 196,347 | $ | 251,848 | $ | 634,587 | $ | 609,682 | ||||||||
Provision for loan and lease losses to net charge-offs, excluding special items (Non-GAAP) |
107.63 | % | 119.57 | % | ||||||||||||
Provision for loan and lease losses to net charge-offs (GAAP) |
77.96 | % | 104.08 | % | ||||||||||||
Net charge-offs to average loans, excluding special items (Non-GAAP) |
2.96 | % | 3.60 | % | ||||||||||||
Net charge-offs to average loans (GAAP) |
8.27 | % | 4.76 | % | ||||||||||||
1- | In the fourth quarter 2010, the Corporation recorded a charge of $102.9 million to the provision for loan and lease losses and charge-offs of $165.1 million associated with $447 million of loans transferred to held for sale. |
Exhibit No. | Description | |
99.1
|
Press Release dated February 9, 2011 First BanCorp Reports Financial Results for the Fourth Quarter and Year Ended December 31, 2010 | |
99.2
|
Press Release dated February 9, 2011 First BanCorp Announces Loan sale |
Date: February 15, 2011 | FIRST BANCORP |
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By: | /s/ Orlando Berges | |||
Name: | Orlando Berges | |||
Title: | Executive Vice President and Chief Financial Officer |