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| FBP > SEC Filings for FBP > Form 8-K on 1-Nov-2012 | All Recent SEC Filings |
1-Nov-2012
Results of Operations and Financial Condition, Financial Statements and Exhibi
On October 31, 2012, First BanCorp. (the "Corporation"), the bank holding company for FirstBank Puerto Rico ("FirstBank" or "the Bank"), issued a press release announcing its unaudited results of operations for the third quarter ended September 30, 2012. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
A copy of the presentation that the Corporation will use at its conference call
to discuss its financial results for the quarter ended September 30, 2012 is
attached hereto as Exhibit 99.2 and is incorporated herein by reference. As
announced in a press release dated October 23, 2012, the call may be accessed
via a live Internet webcast at 10:00 a.m. Eastern time on Thursday, November 1,
2012 through the investor relations section of the Corporation's website:
www.firstbankpr.com or through the dial-in telephone number (877) 317-6789 or
(412) 317-6789. The conference number is 10018992.
The Corporation has included in this release the following financial measures that are not recognized under generally accepted accounting principles, which are referred to as non-GAAP financial measures: (i) the calculation of net interest income, interest rate spread and net interest margin rate on a tax-equivalent basis and excluding changes in the fair value of derivative instruments and certain financial liabilities; (ii) the calculation of the tangible common equity ratio and the tangible book value per common share; (iii) the Tier 1 common equity to risk-weighted assets ratio; and (iv) the adjusted pre-tax, pre-provision income. Investors should be aware that non-GAAP financial measures have inherent limitations and should be read only in conjunction with the Corporation's consolidated financial data prepared in accordance with GAAP. The release includes a reconciliation of these non-GAAP financial measures to the GAAP financial measures, except for the reconciliation with respect to the calculation of net interest income, interest rate spread and net interest margin rate on a tax-equivalent basis and excluding changes in the fair value of derivative instruments and certain financial liabilities which is included below.
Net interest income, interest rate spread and net interest margin are reported on a tax-equivalent basis and excluding changes in the fair value of derivative instruments and financial liabilities elected to be measured at fair value ("valuations"). 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 and unrealized gains and losses on liabilities measured at fair value 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, as described in Exhibit A - Tables 2 and 3 of the press release attached hereto as Exhibit 99.1. 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 the Corporation's results to results of its peers.
The following table reconciles the non-GAAP financial measure "net interest income on a tax-equivalent basis excluding valuations" with net interest income calculated and presented in accordance with GAAP. The table also reconciles the non-GAAP financial measures "net interest spread on a tax-equivalent basis and excluding valuations" and "net interest margin on a tax-equivalent basis and excluding valuations" with net interest spread and net interest margin calculated and presented in accordance with GAAP.
Reconciliation of GAAP Net Interest Margin and Spread to Non-GAAP Net Interest Margin and Spread on a
Tax-Equivalent Basis and excluding
fair value changes on derivative instruments and liabilities measured at fair value
("valuations")
(Dollars in Thousands)
Quarter Ended Nine-Month Period Ended
September 30, June 30, March 31, December 31, September 30, September 30, September 30,
2012 2012 2012 2011 2011 2012 2011
Net Interest Income
Interest Income - GAAP $ 166,964 $ 153,652 $ 152,107 $ 156,752 $ 158,542 $ 472,723 $ 502,863
Unrealized loss (gain) on
derivative instruments (170 ) 33 (332 ) (246 ) 954 (469 ) 1,794
Interest income excluding
valuations 166,794 153,685 151,775 156,506 159,496 472,254 504,657
Tax-equivalent adjustment 1,463 1,634 1,741 1,456 1,521 4,838 5,339
Interest income on a
tax-equivalent basis excluding
valuations 168,257 155,319 153,516 157,962 161,017 477,092 509,996
Interest Expense - GAAP 41,461 44,947 50,241 58,209 64,287 136,649 207,894
Unrealized gain (loss) on
derivative instruments and
liabilities measured at fair
value - 539 (49 ) (1,992 ) (1,601 ) 490 (2,176 )
Interest expense excluding
valuations 41,461 45,486 50,192 56,217 62,686 137,139 205,718
Net interest income - GAAP $ 125,503 $ 108,705 $ 101,866 $ 98,543 $ 94,255 $ 336,074 $ 294,969
Net interest income excluding
valuations $ 125,333 $ 108,199 $ 101,583 $ 100,289 $ 96,810 $ 335,115 $ 298,939
Net interest income on a
tax-equivalent basis excluding
valuations $ 126,796 $ 109,833 $ 103,324 $ 101,745 $ 98,331 $ 339,953 $ 304,278
Average Balances
Loans and leases $ 10,297,835 $ 10,183,229 $ 10,389,246 $ 10,637,523 $ 10,832,426 $ 10,290,132 $ 11,164,370
Total securities and other
short-term investments 2,238,701 2,450,198 2,397,918 2,665,918 2,787,708 2,361,820 3,305,893
Average Interest-Earning Assets $ 12,536,536 $ 12,633,427 $ 12,787,164 $ 13,303,441 $ 13,620,134 $ 12,651,952 $ 14,470,263
Average Interest-Bearing
Liabilities $ 10,518,169 $ 10,577,054 $ 10,725,162 $ 11,255,725 $ 11,944,454 $ 10,606,471 $ 12,743,832
Average Yield/Rate
Average yield on
interest-earning assets - GAAP 5.30 % 4.89 % 4.78 % 4.67 % 4.62 % 4.99 % 4.65 %
Average rate on interest-bearing
liabilities - GAAP 1.57 % 1.71 % 1.88 % 2.05 % 2.14 % 1.72 % 2.18 %
Net interest spread - GAAP 3.73 % 3.18 % 2.90 % 2.62 % 2.48 % 3.27 % 2.47 %
Net interest margin - GAAP 3.98 % 3.46 % 3.20 % 2.94 % 2.75 % 3.55 % 2.73 %
Average yield on
interest-earning assets
excluding valuations 5.29 % 4.89 % 4.77 % 4.67 % 4.65 % 4.99 % 4.66 %
Average rate on interest-bearing
liabilities excluding valuations 1.57 % 1.73 % 1.88 % 1.98 % 2.08 % 1.73 % 2.16 %
Net interest spread excluding
valuations 3.72 % 3.16 % 2.89 % 2.69 % 2.57 % 3.25 % 2.50 %
Net interest margin excluding
valuations 3.98 % 3.44 % 3.20 % 2.99 % 2.82 % 3.54 % 2.76 %
Average yield on
interest-earning assets on a
tax-equivalent basis and
excluding valuations 5.34 % 4.94 % 4.83 % 4.71 % 4.69 % 5.04 % 4.71 %
Average rate on interest-bearing
liabilities excluding valuations 1.57 % 1.73 % 1.88 % 1.98 % 2.08 % 1.73 % 2.16 %
Net interest spread on a
tax-equivalent basis and
excluding valuations 3.77 % 3.21 % 2.95 % 2.73 % 2.61 % 3.31 % 2.55 %
Net interest margin on a
tax-equivalent basis and
excluding valuations 4.02 % 3.50 % 3.25 % 3.03 % 2.86 % 3.59 % 2.81 %
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(d) Exhibits
Exhibit Description of Exhibit
99.1 Press Release dated October 31, 2012 - First BanCorp
Announces Earnings for the Quarter Ended September 30,
2012
99.2 First BanCorp Conference Call Presentation - Financial
Results Third Quarter 2012
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Exhibits 99.1 and 99.2 referenced therein, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall Exhibits 99.1 and 99.2 be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended.
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