0001057706-14-000007.txt : 20140512 0001057706-14-000007.hdr.sgml : 20140512 20140512154644 ACCESSION NUMBER: 0001057706-14-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 20140331 FILED AS OF DATE: 20140512 DATE AS OF CHANGE: 20140512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST BANCORP /PR/ CENTRAL INDEX KEY: 0001057706 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 660561882 STATE OF INCORPORATION: PR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-14793 FILM NUMBER: 14833305 BUSINESS ADDRESS: STREET 1: 1519 PONCE DE LEON AVE STREET 2: SANTURCE CITY: SAN JUAN STATE: PR ZIP: 00908-0146 BUSINESS PHONE: 7877298200 MAIL ADDRESS: STREET 1: 1519 PONCE DE LEON AVE STREET 2: PO BOX 9146 CITY: SAN JUAN STATE: PR ZIP: 00908-0146 10-Q 1 fbp03312014x10q.htm 10-Q  

 

  UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

 

_____________

 

FORM 10-Q

(Mark One)

 

[X]         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2014

 

[   ]         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 For the transition period from ______ to _______

 

COMMISSION FILE NUMBER 001-14793

 

First BanCorp.

 

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

 

Puerto Rico

 

66-0561882

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. employer

identification number)

 

 

 

1519 Ponce de León Avenue, Stop 23

Santurce, Puerto Rico

(Address of principal executive offices)

 

00908

(Zip Code)

 

 

 

(787) 729-8200

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ    No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). 

 

Yes þ   No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

   Large accelerated filer

Accelerated filerþ 

 

 

  Non-accelerated filer  (Do not check if a smaller reporting company)

Smaller reporting company

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes  o  No  þ 

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Common stock:  209,204,337 shares outstanding as of April 30, 2014.

 


 

 

 

FIRST BANCORP.

INDEX PAGE

 

 

PART I. FINANCIAL INFORMATION

PAGE

             Item 1. Financial Statements:

 

Consolidated Statements of Financial Condition (Unaudited) as of March 31, 2014 and December 31, 2013 

 

5

Consolidated Statements of  Income (Loss) (Unaudited) – Quarters ended March 31, 2014 and March 31, 2013

 

6

Consolidated Statements of Comprehensive Income (Loss) (Unaudited) – Quarters ended March 31, 2014 and March 31, 2013

 

7

Consolidated Statements of Cash Flows (Unaudited) – Quarters ended March 31, 2014 and March 31, 2013

 

8

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) – Quarters ended March 31, 2014 and March 31, 2013

 

9

                                  Notes to Consolidated Financial Statements (Unaudited)                                                

10

             Item 2. Management's Discussion and Analysis of Financial Condition

 

                          and Results of Operations                                                                          

66

             Item 3. Quantitative and Qualitative Disclosures About Market Risk

118

             Item 4. Controls and Procedures

118

 

 

PART II. OTHER INFORMATION

 

             Item 1.    Legal Proceedings

119

             Item 1A. Risk Factors

119

             Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

121

             Item 3.    Defaults Upon Senior Securities

122

             Item 4.    Mine Safety Disclosures 

122

             Item 5.    Other Information

122

             Item 6.    Exhibits

122

 

 

SIGNATURES           

 

 

 

2 

 


 

 

Forward Looking Statements

 

This Form 10-Q contains 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, which are subject to the safe harbor created by such sections.  When used in this Form 10-Q or future filings by First BanCorp. (the “Corporation”) with the U.S. Securities and Exchange Commission (“SEC”), in the Corporation’s press releases or in other public or stockholder communications, or in oral statements made with the approval of an authorized executive officer, the word or phrases “would be,” “will allow,” “intends to,” “will likely result,” “are expected to,” “should,” “anticipate” and similar expressions are meant to identify “forward-looking statements.”

 

First Bancorp. 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 Puerto Rico (“FirstBank” or “the Bank”) will be able to fully comply with the written agreement dated June 3, 2010 (the “Written Agreement”) that the Corporation entered into with the Federal Reserve Bank of New York (the “New York FED” or “Federal Reserve”) and the consent order dated June 2, 2010 (the “FDIC Order”) and, together with the Written Agreement, (the “Agreements”) that the Corporation’s banking subsidiary, FirstBank entered into with the Federal Deposit Insurance Corporation (“FDIC”) and the Office of the Commissioner of Financial Institutions of the Commonwealth of Puerto Rico (“OCIF”) that, among other things, require the Bank to maintain certain capital levels and reduce its special mention, classified, delinquent and non-performing assets;

·         the risk of being subject to possible additional regulatory actions;

·         uncertainty as to the availability of certain funding sources, such as retail brokered certificates of deposit (“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 and 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 United States (“U.S.”) and the U.S. Virgin Islands (“USVI”), and British Virgin Islands (“BVI”), 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;

·         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 and budget deficit of the Puerto Rico government and recent credit downgrades of the Puerto Rico government debt;

·         a credit default by the Puerto Rico government or any of its public corporations or other instrumentalities, and recent and any future additional downgrades of the long-term debt ratings of the Puerto Rico government, which could exacerbate Puerto Rico’s adverse economic conditions;

·         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;

3 

 


 

 

·         uncertainty about regulatory and legislative changes for financial services companies in Puerto Rico, the U.S., the USVI, and the BVI, 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, the USVI and the BVI;

·         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 of loss from loan defaults and foreclosures, including the risk of non compliance by Doral Financial in timely paying principal and interest on their outstanding secured loan to the Corporation and/or non compliance with the collateral substitution provision under the loan agreement;

·         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 (the “Dodd-Frank Act”) on the Corporation’s businesses, business practices and cost of operations;

·         the risk of losses in the value of investments in unconsolidated entities that the Corporation does not control; and

·         general competitive factors and industry consolidation.

 

 

 

The Corporation does not undertake, and specifically disclaims any obligation, to update any “forward-looking statements” to reflect occurrences or unanticipated events or circumstances after the date of such statements except as required by the federal securities laws.

 

Investors should refer to the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2013, as well as “Part II, Item 1A, Risk Factors” in this quarterly report on Form 10-Q, for a discussion of such factors and certain risks and uncertainties to which the Corporation is subject.

4 

 


 

 

FIRST BANCORP.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

 

  

March 31, 2014

  

December 31, 2013

(In thousands, except for share information)

  

ASSETS

  

  

  

  

  

Cash and due from banks

$

 824,547 

  

$

 454,302 

Money market investments:

  

  

  

  

  

   Time deposits with other financial institutions

  

 300 

  

  

 300 

   Other short-term investments

  

 16,650 

  

  

 201,069 

      Total money market investments

  

 16,950 

  

  

 201,369 

Investment securities available for sale, at fair value:

  

  

  

  

  

   Securities pledged that can be repledged

  

 1,037,523 

  

  

 1,042,482 

   Other investment securities

  

 994,421 

  

  

 935,800 

      Total investment securities available for sale

  

 2,031,944 

  

  

 1,978,282 

Other equity securities

  

 28,691 

  

  

 28,691 

Investment in unconsolidated entity

  

 669 

  

  

 7,279 

Loans, net of allowance for loan and lease losses of $266,778

  

  

  

  

  

   (2013 - $285,858)

  

 9,300,007 

  

  

 9,350,312 

Loans held for sale, at lower of cost or market

  

 78,912 

  

  

 75,969 

      Total loans, net

  

 9,378,919 

  

  

 9,426,281 

Premises and equipment, net

  

 169,189 

  

  

 166,946 

Other real estate owned

  

 138,622 

  

  

 160,193 

Accrued interest receivable on loans and investments

  

 49,020 

  

  

 54,012 

Other assets

  

 180,877 

  

  

 179,570 

      Total assets

$

 12,819,428 

  

$

 12,656,925 

LIABILITIES

  

  

  

  

  

Non-interest-bearing deposits

$

 905,650 

  

$

 851,212 

Interest-bearing deposits

  

 9,097,035 

  

  

 9,028,712 

      Total deposits

  

 10,002,685 

  

  

 9,879,924 

Securities sold under agreements to repurchase

  

 900,000 

  

  

 900,000 

Advances from the Federal Home Loan Bank (FHLB)

  

 300,000 

  

  

 300,000 

Other borrowings

  

 231,959 

  

  

 231,959 

Accounts payable and other liabilities

  

 128,886 

  

  

 129,184 

      Total liabilities

  

 11,563,530 

  

  

 11,441,067 

STOCKHOLDERS' EQUITY

  

  

  

  

  

Preferred stock, authorized, 50,000,000 shares:

  

  

  

  

  

      Non-cumulative Perpetual Monthly Income Preferred Stock:

  

  

  

  

  

         issued  22,004,000 shares, outstanding 2,272,395 shares

  

  

  

  

  

         (2013-2,521,872 shares outstanding), aggregate liquidation

  

  

  

  

  

          value of $56,810 (2013-$63,047)

  

 56,810 

  

  

 63,047 

Common stock, $0.10 par value, authorized, 2,000,000,000 shares;

  

  

  

  

  

         issued, 209,578,959  shares (2013 - 207,635,157 shares issued)

  

 20,958 

  

  

 20,764 

Less: Treasury stock (at par value)

  

(61)

  

  

(57)

Common stock outstanding, 208,967,883 shares outstanding (2013 - 207,068,978

  

  

  

  

  

         shares outstanding)

  

 20,897 

  

  

 20,707 

Additional paid-in capital

  

 894,247 

  

  

 888,161 

Retained earnings

  

 340,141 

  

  

 322,679 

Accumulated other comprehensive loss, net of tax of $7,753 (2013- $7,755)

  

(56,197)

  

  

(78,736)

    Total stockholders' equity

  

 1,255,898 

  

  

 1,215,858 

      Total liabilities and stockholders' equity

$

 12,819,428 

  

$

 12,656,925 

  

  

  

  

  

  

The accompanying notes are an integral part of these statements.

5 

 


 

 

FIRST BANCORP.

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(Unaudited)

  

Quarter Ended

  

March 31,

  

March 31,

(In thousands, except per share information)

2014 

  

2013 

Interest and dividend income:

  

  

  

  

  

   Loans

$

 144,843 

  

$

 148,643 

   Investment securities

  

 15,228 

  

  

 11,043 

   Money market investments

  

 500 

  

  

 539 

      Total interest income

 160,571 

  

 160,225 

Interest expense:

  

  

  

  

  

   Deposits

  

 20,299 

  

  

 25,544 

   Securities sold under agreements to repurchase

  

 6,368 

  

  

 6,417 

   Advances from FHLB

  

 824 

  

  

 2,025 

   Notes payable and other borrowings

  

 1,760 

  

  

 1,746 

      Total interest expense

 29,251 

  

 35,732 

         Net interest income

  

 131,320 

  

  

 124,493 

Provision for loan and lease losses

  

 31,915 

  

  

 111,123 

Net interest income after provision for loan and lease losses

 99,405 

  

 13,370 

Non-interest income:

  

  

  

  

  

   Service charges on deposit accounts

  

 3,203 

  

  

 3,380 

   Mortgage banking activities

  

 3,368 

  

  

 4,580 

   Other-than-temporary impairment losses on available-for-sale debt securities:

  

  

  

  

  

      Total other-than-temporary impairment losses

  

 - 

  

  

 - 

      Portion of other-than-temporary impairment losses recognized in other

  

  

  

  

  

          comprehensive income

  

 - 

  

  

 (117) 

   Net impairment losses on available-for-sale debt securities

  

 - 

  

  

 (117) 

   Equity in loss of unconsolidated entity

  

 (6,610) 

  

  

 (5,538) 

   Insurance income

  

 2,571 

  

  

 2,020 

   Other non-interest income

  

 8,818 

  

  

 9,304 

      Total non-interest income

 11,350 

  

 13,629 

Non-interest expenses:

  

  

  

  

  

   Employees' compensation and benefits

  

 32,942 

  

  

 33,554 

   Occupancy and equipment

  

 14,346 

  

  

 15,070 

   Business promotion

  

 3,973 

  

  

 3,357 

   Professional fees

  

 10,040 

  

  

 11,133 

   Taxes, other than income taxes

  

 4,547 

  

  

 2,989 

   Insurance and supervisory fees

  

 10,990 

  

  

 12,806 

   Net loss on other real estate owned (OREO) and OREO operations

  

 5,837 

  

  

 7,310 

   Credit and debit card processing expenses

  

 3,824 

  

  

 3,077 

   Communications

  

 1,879 

  

  

 1,814 

   Other non-interest expenses

  

 4,407 

  

  

 6,900 

      Total non-interest expenses

 92,785 

  

 98,010 

Income (loss) before income taxes

  

 17,970 

  

  

 (71,011) 

Income tax expense

  

 (887) 

  

  

 (1,622) 

Net income (loss)

$

 17,083 

  

$

 (72,633) 

Net income (loss) attributable to common stockholders

$

 17,462 

  

$

 (72,633) 

Net income (loss) per common share:

  

  

  

  

  

   Basic

$

 0.08 

  

$

 (0.35) 

   Diluted

$

 0.08 

  

$

 (0.35) 

Dividends declared per common share

$

 - 

  

$

 - 

  

  

  

  

  

  

The accompanying notes are an integral part of these statements.

  

  

  

  

  

6 

 


 

 

FIRST BANCORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

  

Quarter Ended

  

  

March 31,

  

  

March 31,

  

2014 

  

  

2013 

(In thousands)

  

  

  

  

  

  

  

Net income (loss)

$

 17,083 

  

$

 (72,633) 

  

  

  

  

  

  

Available-for-sale debt securities on which an other-than-temporary

  

  

  

  

  

      impairment has been recognized:

  

  

  

  

  

   Subsequent unrealized gain on debt securities on which an

  

  

  

  

  

      other-than-temporary impairment has been recognized

  

 913 

  

  

 843 

   Reclassification adjustment for other-than-temporary impairment

  

  

  

  

  

      on debt securities included in net income

  

 - 

  

  

 117 

All other unrealized holding gains (losses) on available-for-sale securities arising during the period

  

 21,624 

  

  

 (9,570) 

Income tax benefit related to items of other comprehensive income

  

 2 

  

  

 - 

      Other comprehensive income (loss) for the period, net of tax

  

 22,539 

  

  

 (8,610) 

         Total comprehensive income (loss)

$

 39,622 

  

$

 (81,243) 

  

  

  

  

  

  

  

  

  

  

  

  

The accompanying notes are an integral part of these statements.

7 

 


 

 

FIRST BANCORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

  

Quarter Ended

  

March 31, 2014

  

March 31, 2013

(In thousands)

  

  

  

  

  

Cash flows from operating activities:

  

  

  

  

  

   Net income (loss)

$

 17,083 

  

$

 (72,633) 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

  

  

  

  

  

   Depreciation

  

 5,453 

  

  

 6,002 

   Amortization of intangible assets

  

 1,235 

  

  

 1,520 

   Provision for loan and lease losses

  

 31,915 

  

  

 111,123 

   Deferred income tax (benefit) expense

  

 (700) 

  

  

 421 

   Stock-based compensation

  

 717 

  

  

 219 

   Other-than-temporary impairments on debt securities

  

 - 

  

  

 117 

   Equity in loss of unconsolidated entity

  

 6,610 

  

  

 5,538 

   Derivative instruments and financial liabilities measured at fair value, gain

  

 (148) 

  

  

 (295) 

   Gain on sale of premises and equipment and other assets 

  

 (25) 

  

  

 - 

   Net gain on sales of loans

  

 (2,017) 

  

  

 (1,761) 

   Net amortization of premiums, discounts and deferred loan fees and costs

  

 (477) 

  

  

 (1,364) 

   Originations and purchases of loans held for sale

  

 (72,748) 

  

  

 (159,559) 

   Sales and repayments of loans held for sale

  

 72,865 

  

  

 119,891 

   Amortization of broker placement fees

  

 1,785 

  

  

 2,155 

   Net amortization of premium and discounts on investment securities

  

 (284) 

  

  

 3,649 

   Increase in accrued income tax payable

  

 1,476 

  

  

 971 

   Decrease (increase) in accrued interest receivable

  

 4,992 

  

  

 (296) 

   Increase (decrease) in accrued interest payable

  

 2,106 

  

  

 (246) 

   Decrease in other assets

  

 8,657 

  

  

 5,888 

   (Decrease) increase in other liabilities

  

 (4,987) 

  

  

 9,358 

         Net cash provided by operating activities

  

 73,508 

  

  

 30,698 

  

  

  

  

  

  

Cash flows from investing activities:

  

  

  

  

  

   Principal collected on loans

  

 776,086 

  

  

 643,168 

   Loans originated and purchased

  

 (774,764) 

  

  

 (660,818) 

   Proceeds from sales of loans held for investment

  

 16,558 

  

  

 130,296 

   Proceeds from sales of repossessed assets

  

 12,262 

  

  

 14,640 

   Purchases of securities available for sale

  

 (76,253) 

  

  

 (444,999) 

   Proceeds from principal repayments and maturities of securities available for sale

  

 45,422 

  

  

 112,756 

   Additions to premises and equipment

  

 (7,696) 

  

  

 (2,978) 

   Proceeds from sale of premises and equipment and other assets

  

 25 

  

  

 - 

   Net redemptions/sales of other equity securities

  

 - 

  

  

 5,865 

      Net cash used in investing activities

  

 (8,360) 

  

  

 (202,070) 

  

  

  

  

  

  

Cash flows from financing activities:

  

  

  

  

  

   Net increase in deposits

  

 120,977 

  

  

 116,868 

   Net FHLB advances paid

  

 - 

  

  

 (130,000) 

   Repurchase of outstanding common stock

  

 (246) 

  

  

 - 

   Issuance costs of common stock issued in exchange for preferred stock Series A through E

  

 (53) 

  

  

 - 

      Net cash provided by (used in) financing activities

  

 120,678 

  

  

 (13,132) 

   Net increase (decrease) in cash and cash equivalents

  

 185,826 

  

  

 (184,504) 

Cash and cash equivalents at beginning of period

  

 655,671 

  

  

 946,851 

Cash and cash equivalents at end of period

$

 841,497 

  

$

 762,347 

  

  

  

  

  

  

Cash and cash equivalents include:

  

  

  

  

  

   Cash and due from banks

$

 824,547 

  

$

 545,719 

   Money market instruments

  

 16,950 

  

  

 216,628 

  

$

 841,497 

  

$

 762,347 

  

  

  

  

  

  

The accompanying notes are an integral part of these statements.

  

  

  

  

  

8 

 


 

 

FIRST BANCORP.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)

  

Quarter Ended

  

March 31,

  

March 31,

  

2014 

  

2013 

(In thousands)

  

  

  

  

  

Preferred Stock

  

  

  

  

  

   Balance at beginning of period

$

 63,047 

  

$

 63,047 

   Exchange of preferred stock- Series A through E

  

(6,237)

  

  

 - 

      Balance at end of period

  

 56,810 

  

  

 63,047 

  

  

  

  

  

  

Common Stock outstanding:

  

  

  

  

  

   Balance at beginning of period

  

 20,707 

  

  

 20,624 

   Common stock issued as compensation

  

 6 

  

  

 - 

   Common stock withheld for taxes

  

(4)

  

  

 - 

   Common stock issued in exchange for Series A through E preferred stock

  

 107 

  

  

 - 

   Restricted stock grants

  

 81 

  

  

 - 

   Restricted stock forfeited

  

 - 

  

  

 (1) 

      Balance at end of period

  

 20,897 

  

  

 20,623 

  

  

  

  

  

  

Additional Paid-In-Capital:

  

  

  

  

  

   Balance at beginning of period

  

 888,161 

  

  

 885,754 

   Stock-based compensation

  

 717 

  

  

 219 

   Common stock withheld for taxes

  

(242)

  

  

 - 

   Common stock issued in exchange for Series A through E preferred stock

  

 5,538 

  

  

 - 

   Reversal of issuance costs of Series A through E preferred stock exchanged

  

 213 

  

  

 - 

   Issuance costs of common stock issued in exchange for Series A through E preferred stock

  

(53)

  

  

 - 

   Restricted stock grants

  

(81)

  

  

 - 

   Common stock issued as compensation

  

(6)

  

  

 - 

   Restricted stock forfeited

  

 -   

  

  

 1 

      Balance at end of period

  

 894,247 

  

  

 885,974 

  

  

  

  

  

  

Retained Earnings:

  

  

  

  

  

   Balance at beginning of period

  

 322,679 

  

  

 487,166 

   Net income (loss)

  

 17,083 

  

  

(72,633)

   Excess of carrying amount of Series A though E preferred stock exchanged over

  

  

  

  

  

      fair value of new shares of common stock

  

 379 

  

  

 - 

      Balance at end of period

  

 340,141 

  

  

 414,533 

  

  

  

  

  

  

Accumulated Other Comprehensive Income (Loss), net of tax:

  

  

  

  

  

   Balance at beginning of period

  

(78,736)

  

  

 28,432 

   Other comprehensive income (loss) , net of tax

  

 22,539 

  

  

(8,610)

      Balance at end of period

  

(56,197)

  

  

 19,822 

  

  

  

  

  

  

         Total stockholders' equity

$

 1,255,898 

  

$

 1,403,999 

  

  

  

  

  

  

The accompanying notes are an integral part of these statements.

  

  

  

  

  

9 

 


 

 

FIRST BANCORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

 

The Consolidated Financial Statements (unaudited) of First BanCorp. (“the Corporation”) have been prepared in conformity with the accounting policies stated in the Corporation’s Audited Consolidated Financial Statements included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2013. Certain information and note disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been condensed or omitted from these statements pursuant to the rules and regulations of the SEC and, accordingly, these financial statements should be read  in conjunction with the Audited Consolidated Financial Statements of the Corporation for the year ended December 31, 2013, which are included in the Corporation’s 2013 Annual Report on Form 10-K. All adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the statement of financial position, results of operations and cash flows for the interim periods have been reflected. All significant intercompany accounts and transactions have been eliminated in consolidation.

 

The results of operations for the quarter ended March 31, 2014 are not necessarily indicative of the results to be expected for the entire year. 

 

Adoption of new accounting requirements and recently issued but not yet effective accounting requirements

 

The Financial Accounting Standards Board (“FASB”) has issued the following accounting pronouncements and guidance relevant to the Corporation’s operations:

 

In July 2013, the FASB updated the Codification to provide explicit guidelines on how to present an unrecognized tax benefit in financial statements when a net operating loss (“NOL”) carryforward, a similar tax loss, or a tax credit carryforward exists. An unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. The amendments are effective for public entities with fiscal periods beginning after December 15, 2013. The adoption of this guidance in 2014 did not have an effect on the Corporation’s financial statements as the Corporation’s NOLs and tax credit carryfowards are not available to settle any additional income taxes that would result from the disallowance of the Corporation’s unrecognized tax benefits.

 

In January 2014, the FASB updated the Codification to clarify when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan so that the loan should be derecognized and the real estate property recognized in the financial statements. The Update clarifies that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either: (i) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure, or (ii) the borrower conveying all interest in the residential real estate property to the creditor to satisfy the loan through completion of a deed in lieu of foreclosure or through a similar legal agreement.  In addition,  creditors are required to disclose on an annual and interim basis both (i) the amount of the foreclosed residential real estate property held and (ii) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments are effective for public business entities for annual periods beginning after December 15, 2014, and interim periods within annual periods beginning after December 31, 2015. Early adoption is permitted. The guidance can be implemented using either a modified retrospective transition method or a prospective transition method. The Corporation is currently evaluating the impact of the adoption of this guidance, if any, on its financial statements.

 

In April 2014, the FASB issued an update to current accounting standards which will change the criteria for reporting discontinued operations. The amendments will also require new disclosures about discontinued operations and disposals of components of an entity that do not qualify for discontinued operations reporting. The amendments are effective for the Corporation for new disposals (or classifications as held for sale) of components of the Corporation, should they occur, beginning in the first quarter of fiscal year 2016. Early adoption is permitted for disposals (or classifications as held for sale) that have not been previously reported. 

10 

 


 

 

NOTE 2 – EARNINGS PER COMMON SHARE

 

    The calculations of earnings (losses) per common share for the quarters ended on March 31, 2014 and 2013 are as follows:

  

  

  

  

  

  

  

  

Quarter Ended

  

  

March 31,

  

March 31,

  

  

2014 

  

2013 

  

  

  

(In thousands, except per share information)

 Net income (loss)

$

 17,083 

  

$

 (72,633) 

  

 Favorable impact from issuing common stock in exchange for

  

  

  

  

  

  

     Series A through E preferred stock

  

 379 

  

  

 - 

  

 Net income (loss) attributable to common stockholders

$

 17,462 

  

$

 (72,633) 

  

  

  

  

  

  

  

  

Weighted-Average Shares:

  

  

  

  

  

  

   Basic weighted-average common shares outstanding

  

 205,732 

  

  

 205,465 

  

   Average potential common shares

  

 1,144 

  

  

 - 

  

   Diluted weighted-average number of common shares outstanding

  

 206,876 

  

  

 205,465 

  

  

  

  

  

  

  

  

Income (loss) per common share:

  

  

  

  

  

  

   Basic

$

 0.08 

  

$

 (0.35) 

  

   Diluted

$

 0.08 

  

$

 (0.35) 

  

  

  

  

  

  

  

  

  

 

Earnings (loss) per common share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares issued and outstanding. Net income (loss) attributable to common stockholders represents net income (loss) adjusted for any preferred stock dividends, including any dividends declared, and any cumulative dividends related to the current dividend period that have not been declared as of the end of the period. For the first quarter of 2014, net income attributable to common stockholders also includes the one-time effect of the issuance of common stock in exchange for Series A through E preferred stock. This transaction is discussed in Note 17 to the unaudited consolidated financial statements. Basic weighted average common shares outstanding exclude unvested shares of restricted stock.

 

Potential common shares consist of common stock issuable under the assumed exercise of stock options, unvested shares of restricted stock, and outstanding warrants using the treasury stock method. This method assumes that the potential common shares are issued and the proceeds from the exercise, in addition to the amount of compensation cost attributable to future services, are used to purchase common stock at the exercise date. The difference between the number of potential shares issued and the shares purchased is added as incremental shares to the actual number of shares outstanding to compute diluted earnings per share. Stock options, unvested shares of restricted stock, and outstanding warrants that result in lower potential shares issued than shares purchased under the treasury stock method are not included in the computation of dilutive earnings per share since their inclusion would have an antidilutive effect on earnings per share. Stock options not included in the computation of outstanding shares because they were antidilutive amounted to 88,640 and 105,363 for the quarters ended March 31, 2014 and 2013, respectively. Warrants outstanding to purchase 1,285,899 shares of common stock and 763,022 unvested shares of restricted stock were excluded from the computation of diluted earnings per share for the quarter ended March 31, 2013 because the Corporation reported a net loss attributable to common stockholders for the period and their inclusion would have an antidilutive effect. 

 

NOTE 3 – STOCK-BASED COMPENSATION

 

Between 1997 and January 2007, the Corporation had the 1997 stock option plan that authorized the granting of up to 579,740 options on shares of the Corporation’s common stock to eligible employees. The options granted under the plan could not exceed 20% of the number of common shares outstanding.

 

On January 21, 2007, the 1997 stock option plan expired; all outstanding awards granted under this plan continue in full force and effect, subject to their original terms.  No awards for shares could be granted under the 1997 stock option plan as of its expiration.

 

The activity of stock options granted under the 1997 stock option plan for the quarter ended March 31, 2014 is set forth below:

  

  

  

Number of Options

  

Weighted-Average Exercise Price

  

Weighted-Average Remaining Contractual Term (Years)

  

Aggregate Intrinsic Value (In thousands)

  

  

  

  

  

  

  

  

  

  

Beginning of period outstanding

  

  

  

  

  

  

  

  

  

   and exercisable

 101,435 

  

$

 206.95 

  

  

  

  

  

Options expired

(12,795)

  

  

 321.75 

  

  

  

  

  

End of period outstanding and

  

  

  

  

  

  

  

  

  

  exercisable

 88,640 

  

$

 190.38 

  

 2.1 

  

$

 - 

  

  

  

  

  

  

  

  

  

  

11 

 


 

 

 

On April 29, 2008, the Corporation’s stockholders approved the First BanCorp. 2008 Omnibus Incentive Plan, as amended (the “Omnibus Plan”).  The Omnibus Plan provides for equity-based compensation incentives (the “awards”) through the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, and other stock-based awards.  The Omnibus Plan authorizes the issuance of up to 8,169,807 shares of common stock, subject to adjustments for stock splits, reorganizations, and other similar events.  The Corporation’s Board of Directors, upon receiving the relevant recommendation of the Compensation Committee, has the power and authority to determine those eligible to receive awards and to establish the terms and conditions of any awards, subject to various limits and vesting restrictions that apply to individual and aggregate awards. 

 

Under the Omnibus Plan, during the first quarter of 2014, the Corporation issued 810,138 shares of restricted stock that will vest based on the employees’ continued service with the Corporation. Fifty percent (50%) of those shares vest in two years from the grant date and the remaining 50% percent vest in three years from the grant date. Included in those 810,138 shares of restricted stock are 653,138 shares granted to certain senior officers consistent with the requirements of the Troubled Asset Relief Program (“TARP”) Interim Final Rule, which permit TARP recipients to grant “long-term restricted stock” without violating the prohibition on paying or accruing a bonus payment if it satisfies the following requirements: (i) the value of the grant may not exceed one-third of the amount of the employee’s annual compensation, (ii) no portion of the grant may vest before two years after the grant date, and (iii) the grant must be subject to a further restriction on transfer or payment as described below. Specifically, the stock that has otherwise vested may not become transferable at any time earlier than as permitted under the schedule set forth by TARP, which is based on the repayment in 25% increments of the aggregate financial assistance received from the U.S. Department of Treasury (the “Treasury”). Hence, notwithstanding the vesting period mentioned above, the employees covered by TARP are restricted from transferring the shares.

 

     The fair value of the shares of restricted stock granted in the first quarter of 2014 was based on the market price of the Corporation’s outstanding common stock on the date of the grant. For the 653,138 shares of restricted stock granted under the TARP requirements, the market price was discounted due to postvesting restrictions. For purposes of computing the discount, the Corporation estimated an appreciation of 16% in the value of the common stock using the Capital Asset Pricing Model as a basis of what would be a market participant’s expected return on the Corporation’s stock and assumed that the Treasury would hold its outstanding common stock of the Corporation for two years, resulting in a fair value of $2.63 for restricted shares granted under the TARP requirements. Also, the Corporation used empirical data to estimate employee termination; separate groups of employees that have similar historical exercise behavior were considered separately for valuation purposes.

 

 

The following table summarizes the restricted stock activity in 2014 under the Omnibus Plan for both executive officers covered by the TARP requirements and other employees as well as for the independent directors:

 

  

Quarter Ended

  

March 31, 2014

  

Number of

  

  

  

  

shares of

  

  

Weighted-Average

  

restricted

  

  

Grant Date

  

stock

  

  

 Fair Value

  

  

  

  

  

Non-vested shares at beginning of period

 1,411,185 

  

$

 3.04 

Granted

 810,138 

  

  

 3.14 

Forfeited

 (2,000) 

  

  

 6.03 

Vested

 (67,500) 

  

  

 4.00 

Non-vested shares at March 31, 2014

 2,151,823 

  

$

 3.06 

  

  

  

  

  

 

For the quarters ended March 31, 2014 and 2013, the Corporation recognized $0.4 million and $0.2 million, respectively, of stock-based compensation expense related to restricted stock awards. As of March 31, 2014, there was $4.2 million of total unrecognized compensation cost related to non-vested shares of restricted stock. The weighted average period over which the Corporation expects to recognize such cost is 2.1 years.

 

Stock-based compensation accounting guidance requires the Corporation to develop an estimate of the number of share-based awards that will be forfeited due to employee or director turnover. Quarterly changes in the estimated forfeiture rate may have a

12 

 


 

 

significant effect on share-based compensation, as the effect of adjusting the rate for all expense amortization is recognized in the period in which the forfeiture estimate is changed. If the actual forfeiture rate is higher than the estimated forfeiture rate, then an adjustment is made to increase the estimated forfeiture rate, which will result in a decrease in the expense recognized in the financial statements. If the actual forfeiture rate is lower than the estimated forfeiture rate, then an adjustment is made to decrease the estimated forfeiture rate, which will result in an increase in the expense recognized in the financial statements. When unvested options or shares of restricted stock are forfeited, any compensation expense previously recognized on the forfeited awards is reversed in the period of the forfeiture. Approximately $5 thousand of compensation expense was reversed during the first quarter of 2014 related to forfeited awards.

 

     Also, under the Omnibus Plan, effective April 1, 2013, the Corporation’s Board of Directors determined to increase the salary amounts paid to certain executive officers primarily by paying the increased salary amounts in the form of shares of the Corporation’s common stock, instead of cash. During the first quarter of 2014, the Corporation issued 60,381 shares of common stock with a weighted average market value of $5.26 as salary stock compensation. This resulted in a compensation expense of $0.4 million recorded in the first quarter of 2014. For the quarter ended March 31, 2014, the Corporation withheld 21,342 shares from the common stock paid to certain senior officers as additional compensation and 23,555 shares of restricted stock vested during the first quarter of 2014, to cover employees’ payroll and income tax withholding liabilities; these shares are held as treasury shares. The Corporation paid any fractional share of salary stock that the officer was entitled to in cash. In the consolidated financial statements, the Corporation treat shares withheld for tax purposes as common stock repurchases.

13 

 


 

 

NOTE 4 – INVESTMENT SECURITIES

 

Investment Securities Available for Sale

 

The amortized cost, non-credit loss component of other-than-temporary impairment (“OTTI”) recorded in other comprehensive income (“OCI”), gross unrealized gains and losses recorded in OCI, approximate fair value, weighted average yield and contractual maturities of investment securities available for sale as of March 31, 2014 and December 31, 2013 were as follows:

 

  

  

March 31, 2014

  

  

Amortized cost

  

Noncredit Loss Component of OTTI Recorded in OCI

  

Gross

  

Fair value

  

Weighted average yield%

  

  

  

Unrealized

  

  

  

  

  

  

gains

  

losses

  

  

  

  

(Dollars in thousands)

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

U.S. Treasury securities:

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Due within one year

$

 7,500 

  

$

 - 

  

$

 - 

  

$

 - 

  

$

 7,500 

  

 0.12 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Obligations of U.S.

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

    government-sponsored

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

    agencies:

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

   After 1 to 5 years

  

 50,000 

  

  

 - 

  

  

 - 

  

  

 1,100 

  

  

 48,900 

  

 1.05 

  

   After 5 to 10 years

  

 214,259 

  

  

 - 

  

  

 - 

  

  

 10,584 

  

  

 203,675 

  

 1.31 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Puerto Rico government

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

    obligations:

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

   Due within one year

  

 10,000 

  

  

 - 

  

  

 - 

  

  

 - 

  

  

 10,000 

  

 3.50 

  

   After 1 to 5 years

  

 39,798 

  

  

 - 

  

  

 - 

  

  

 9,785 

  

  

 30,013 

  

 4.49 

  

   After 5 to 10 years

  

 910 

  

  

 - 

  

  

 - 

  

  

 - 

  

  

 910 

  

 5.20 

  

   After 10 years

  

 25,485 

  

  

 - 

  

  

 - 

  

  

 5,053 

  

  

 20,432 

  

 6.01 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

United States and Puerto

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

    Rico government

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

    obligations:

  

 347,952 

  

  

 - 

  

  

 - 

  

  

 26,522 

  

  

 321,430 

  

 2.03 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Mortgage-backed securities:

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

 FHLMC certificates:

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

After 10 years

  

 345,590 

  

  

 - 

  

  

 374 

  

  

 7,416 

  

  

 338,548 

  

 2.21 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

 GNMA certificates:            

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

After 1 to 5 years

  

 73 

  

  

 - 

  

  

 4 

  

  

 - 

  

  

 77 

  

 3.44 

  

After 5 to 10 years

  

 763 

  

  

 - 

  

  

 36 

  

  

 - 

  

  

 799 

  

 2.54 

  

After 10 years

  

 412,063 

  

  

 - 

  

  

 19,371 

  

  

 8 

  

  

 431,426 

  

 3.83 

  

  

  

 412,899 

  

  

 - 

  

  

 19,411 

  

  

 8 

  

  

 432,302 

  

 3.82 

 FNMA certificates:

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

After 1 to 5 years

  

 1,255 

  

  

 - 

  

  

 72 

  

  

 - 

  

  

 1,327 

  

 4.79 

   

After 5 to 10 years

  

 7,341 

  

  

 - 

  

  

 566 

  

  

 - 

  

  

 7,907 

  

 4.09 

  

After 10 years

 912,020 

  

  

 - 

  

  

 3,823 

  

  

 25,329 

  

  

 890,514 

  

 2.38 

    

  

  

 920,616 

  

  

 - 

  

  

 4,461 

  

  

 25,329 

  

  

 899,748 

  

 2.40 

Collateralized mortgage

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

obligations issued or

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

guaranteed by the FHLMC:

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

After 1 to 5 years

  

 46 

  

  

 - 

  

  

 - 

  

  

 1 

  

  

 45 

  

 3.01 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Other mortgage pass-through

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

     trust certificates:

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

   Over  5 to 10 years

  

 123 

  

  

 - 

  

  

 1 

  

  

 - 

  

  

 124 

  

 7.27 

  

   After 10 years

  

 53,126 

  

  

 13,397 

  

  

 - 

  

  

 - 

  

  

 39,729 

  

 2.22 

  

  

  

 53,249 

  

  

 13,397 

  

  

 1 

  

  

 - 

  

  

 39,853 

  

 2.22 

Total mortgage-backed

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

     securities

  

 1,732,400 

  

  

 13,397 

  

  

 24,247 

  

  

 32,754 

  

  

 1,710,496 

  

 2.70 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Equity securities (without

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

contractual maturity) (1)

  

 35 

  

  

 - 

  

  

 - 

  

  

 17 

  

  

 18 

  

 -   

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Total investment securities

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

available for sale

$

 2,080,387 

  

$

 13,397 

  

$

 24,247 

  

$

 59,293 

  

$

 2,031,944 

  

 2.58 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

(1)

Represents common shares of another financial institution in Puerto Rico.

  

  

  

  

  

  

  

  

14 

 


 

 

 

  

  

December 31, 2013

  

  

Amortized cost

  

Noncredit Loss Component of OTTI Recorded in OCI

  

Gross

  

Fair value

  

Weighted average yield%

  

  

  

Unrealized

  

  

  

  

  

  

gains

  

losses

  

  

  

  

(Dollars in thousands)

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

U.S. Treasury securities:

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Due within one year

$

 7,498 

  

$

 - 

  

$

 1 

  

$

 - 

  

$

 7,499 

  

 0.12 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Obligations of U.S.

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

    government-sponsored

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

    agencies:

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

   After 1 to 5 years

  

 50,000 

  

  

 - 

  

  

 - 

  

  

 1,408 

  

  

 48,592 

  

 1.05 

  

   After 5 to 10 years

  

 214,271 

  

  

 - 

  

  

 - 

  

  

 13,368 

  

  

 200,903 

  

 1.31 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Puerto Rico government

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

     obligations:

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

   Due within one year

  

 10,000 

  

  

 - 

  

  

 - 

  

  

 210 

  

  

 9,790 

  

 3.50 

  

   After 5 to 10 years

  

 40,699 

  

  

 - 

  

  

 - 

  

  

 12,962 

  

  

 27,737 

  

 4.51 

  

   After 10 years

  

 20,309 

  

  

 - 

  

  

 - 

  

  

 6,506 

  

  

 13,803 

  

 5.82 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

United States and Puerto

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

    Rico government

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

    obligations:

  

 342,777 

  

  

 - 

  

  

 1 

  

  

 34,454 

  

  

 308,324 

  

 1.96 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Mortgage-backed securities:

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

 FHLMC certificates:

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

After 10 years

  

 332,766 

  

  

 - 

  

  

 133 

  

  

 10,712 

  

  

 322,187 

  

 2.16 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

 GNMA certificates:            

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

After 1 to 5 years

  

 86 

  

  

 - 

  

  

 4 

  

  

 - 

  

  

 90 

  

 3.48 

  

After 5 to 10 years

  

 800 

  

  

 - 

  

  

 37 

  

  

 - 

  

  

 837 

  

 2.47 

  

After 10 years

  

 425,589 

  

  

 - 

  

  

 18,492 

  

  

 - 

  

  

 444,081 

  

 3.82 

  

  

  

 426,475 

  

  

 - 

  

  

 18,533 

  

  

 - 

  

  

 445,008 

  

 3.82 

 FNMA certificates:

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

After 1 to 5 years

  

 1,389 

  

  

 - 

  

  

 84 

  

  

 - 

  

  

 1,473 

  

 4.82 

   

After 5 to 10 years

  

 7,765 

  

  

 - 

  

  

 389 

  

  

 - 

  

  

 8,154 

  

 4.09 

  

After 10 years

 882,798 

  

  

 - 

  

  

 2,984 

  

  

 33,626 

  

  

 852,156 

  

 2.36 

    

  

  

 891,952 

  

  

 - 

  

  

 3,457 

  

  

 33,626 

  

  

 861,783 

  

 2.38 

Collateralized mortgage

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

obligations issued or

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

guaranteed by the FHLMC:

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

After 1 to 5 years

  

 82 

  

  

 - 

  

  

 - 

  

  

 1 

  

  

 81 

  

 3.01 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Other mortgage pass-through

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

     trust certificates:

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

   Over  5 to 10 years

  

 127 

  

  

 - 

  

  

 1 

  

  

 - 

  

  

 128 

  

 7.27 

  

   After 10 years

  

 55,048 

  

  

 14,310 

  

  

 - 

  

  

 - 

  

  

 40,738 

  

 2.24 

  

  

  

 55,175