-1x Bp (LSE:SBP)
Historical Stock Chart
From Jul 2019 to Jul 2024
![Click Here for more -1x Bp Charts. Click Here for more -1x Bp Charts.](/p.php?pid=staticchart&s=L%5ESBP&p=8&t=15)
Santander BanCorp Reports Earnings for the Second Quarter and
First Semester of 2005
* Net income for the quarter ended June 30, 2005 reached $19.3 million, or
$0.41 per share, a 20.0% improvement over net income of $16.0 million, or $0.34
per share reported for the second quarter of 2004.
SAN JUAN, Puerto Rico, July 28 /PRNewswire-FirstCall/ -- Santander BanCorp
(NYSE: SBP; LATIBEX: XSBP) ("the Company"), reported today its unaudited
financial results for the quarter and the semester ended June 30, 2005. Net
income for the quarter ended June 30, 2005 reached $19.3 million, a 20.0%
improvement over net income of $16.0 million reported during the second quarter
of 2004. For the first semester of 2005, net income amounted to $44.8 million,
an 8.5% increase over net income of $41.3 million for the six-month period
ended June 30, 2004. Income before provision for income taxes for the quarter
and semester ended June 30, 2005 increased by 70.7% and 36.9%, respectively,
when compared to the same periods of 2004.
Net income for the quarter ended June 30, 2005 reached $19.3 million or $0.41
per common share. This represents an increase of 20.0% over net income for the
quarter ended June 30, 2004 of $16.0 million or $0.34 per common share.
Annualized Return on Average Common Equity (ROE) and Return on Average Assets
(ROA) were 12.57% and 0.95%, respectively, for the quarter ended June 30, 2005,
compared to 13.8% and 0.86%, respectively, for the second quarter of 2004. The
Efficiency Ratio(1) for the quarter ended June 30, 2005 reflected a significant
improvement of 570 basis points, reaching 61.79% compared to 67.49% for the
quarter ended June 30, 2004.
Net income for the six-month period ended June 30, 2005 reached $44.8 million
or $0.96 per common share. This represents an increase of 8.5% over net income
reported for the six-month period ended June 30, 2004 of $41.3 million or $0.88
per common share. ROE and ROA were 15.37% and 1.10%, respectively, at June 30,
2005, compared to ROE and ROA of 17.35% and 1.12%, respectively, at June 30,
2004. The Efficiency Ratio1 for the six-month period ended June 30, 2005 also
reflected a significant improvement of 401 basis points, reaching 62.06%
compared to 66.07% for the six-month period ended June 30, 2004.
Shares and earnings per share computations for 2004 presented in the
accompanying financial information have been adjusted retroactively to reflect
the 10% stock dividend declared by the Board of Directors on July 9, 2004.
Income Statement
The 20.0% increase in net income for the quarter ended June 30, 2005 compared
to the same period in 2004 was principally due to an increase of $9.4 million
in non-interest income and a decrease in the provision for loan losses of $2.0
million. These changes were reduced by an increase in income tax expense of
$8.1 million.
The increase of $3.5 million or 8.5% in net income for the six-month period
ended June 30, 2005 compared to the amount reported for the same period in 2004
was principally due to an increase of $11.9 million in non-interest income, an
increase of $1.5 million in net interest income and a decrease in the provision
for loan losses of $4.0 million. These changes were partially offset by an
increase in operating expenses and income tax expense of $1.4 million and $12.6
million, respectively.
For the quarter ended June 30, 2005, net interest income(1) amounted to $56.5
million, a decrease of 2.7% compared to $58.0 million for the second quarter in
2004. This decrease was principally due to an increase in the cost of funds of
90 basis points that was partially offset by an increase in the yield on
interest earning assets of 46 basis points.
For the second quarter of 2005 average earnings assets increased by $520.1
million offset by an increase in average earnings liabilities of $450.9
million. The increase in average interest earning assets compared to the
second quarter of 2004 was driven by an increase in average net loans of $1.3
billion which was partially offset by a decrease in average investment
securities. The decrease in investment securities is mainly attributed to the
sale of $785 million of securities during the first quarter of 2005 resulting
in a reduction in the yield on investment securities of 23 basis points from
4.84% for the quarter ended June 30, 2004 to 4.61% for the quarter ended June
30, 2005, which further explains the reduction in net interest income for the
quarter. The above mentioned sale generated a gain of $16.9 million that was
partially offset by a loss of $6.7 million on the extinguishment of certain
term repo transactions that were funding part of the securities sold. The
increase in average interest bearing liabilities of $450.9 million was driven
by an increase in average time deposits of $1.0 billion or 65.7%, being
partially offset by a decrease in average borrowings of $537.6 million as
compared to the quarter ended June 30, 2004.
For the six-month period ended June 30, 2005, net interest income(1) amounted
to $116.5 million, a decrease of 0.2% compared to $116.7 million reported for
the same period in 2004. The decrease is mainly attributed to an increment of
71 basis points in the cost of funds while the yield in interest earning assets
increased 30 basis points. Further expanding on the behavior of net interest
income for the period referred to above, average net loans increased $1.3
billion or 29.7%. This increment was partially offset by a reduction in average
investment securities of $589.7 million and an increment in average interest
bearing liabilities of $663.9 or 10.9% as compared to June 30, 2004.
Net interest margin(1) for the second quarter of 2005 was 2.94% compared with
3.24% for the second quarter of 2004. This decrease of 30 basis points in net
interest margin(1) was mainly due to an increase of 90 basis points in the
average cost of interest bearing liabilities due to short-term interest rate
increases. The Federal Reserve increased the discount rate by 225 basis points
during the period from June 2004 to June 2005. The average yield on interest
earning assets increased 46 basis points also as a result of the higher
interest rate scenario. The average yield on the commercial loan portfolio,
which has a high proportion of floating rate loans, increased 106 basis points
during the period. Compared to the sequential quarter ended March 31, 2005, the
decrease in the net interest margin(1) was 14 basis points. This reduction was
mainly due to an increase of 27 basis points in the cost of funding earning
assets, and a reduction of 58 basis points in the average yield of the
investment securities portfolio, which was offset by an increase of 21 basis
points in the average yield of the loan portfolio for a total increase of 12
basis points in the average yield of earning assets.
Net interest margin(1) for the semester ended June 30, 2005 was 3.01% compared
with 3.33% to the first semester of 2004. This decrease of 32 basis points in
net interest margin(1) was mainly due to an increment of 71 basis points in the
average cost of interest bearing liabilities due to short-term interest rate
increases, while the average yield of interest earnings assets increased by 30
basis points.
The provision for loan losses reflected a decrease of $2.0 million or 32.5%
from $6.0 million for the quarter ended June 30, 2004 to $4.1 million for the
second quarter in 2005. For the six-month period ended June 30, 2005, the
reduction in the provision for loan losses was $4.0 million or 27.1% compared
to the same period in 2004. The reduction in the provision for loan losses was
due to a 20.2% decrease in non-performing loans which are down to $76.6 million
as of June 30, 2005, from $96.0 million as of June 30, 2004, and $87.5 million
as of December 31, 2004. In addition, there was a reduction in non-performing
commercial loans without real estate collateral of $9.2 million or 43.8%,
compared to June 2004 which had a direct positive impact on the level of the
allowance required for this specific portfolio.
Other income increased $9.4 million or 40.7% to $32.5 million for the quarter
ended June 30, 2005, from $23.1 million for the same period in 2004. This
increase was the result of higher gain on sale of loans of $6.2 million. This
gain resulted from the sale of certain charged off consumer loans to an
unrelated third party. In addition, higher broker-dealer, asset management and
insurance fees of $1.0 million, higher credit card fees of $0.5 million, and
higher recognition of mortgage servicing rights on mortgage loans sold of $0.9
million contributed to the increase in other income for the quarter ended June
30, 2005.
For the semester ended June 30, 2005, other income increased $12.0 million or
20.1% to $71.6 million from $59.6 million compared to the same period in 2004.
This increase was the result of higher gain on sale of securities of $8.4
million. During March 2005, the Company modified its asset/liability mix to
adjust for expectations of further rises in short term rates and a flattening
yield curve. The Company sold $785 million of investment securities and
realized a gain of $16.9 million. This gain was partially offset by a loss of
$6.7 million on the extinguishment of certain term repo transactions that were
funding part of the securities sold. As previously mentioned, during the first
semester of 2005 there was a higher gain on sale of loans of $7.1 million as a
result of the sale of certain previously charged off consumer loans to an
unrelated third party. Further explaining the increment in other income for the
semester ended June 30, 2005, there was an increase in the gain on derivatives
of $3.0 million and higher broker-dealer, asset management and insurance fees
of $1.1 million. These gains were partially offset by lower trading gains of
$0.8 million.
For the quarter ended June 30, 2005, the Efficiency Ratio(1) improved 570 basis
points to 61.79% compared to 67.49% for the quarter ended June 30, 2004. This
improvement was mainly the result of higher revenues (excluding gains on sales
of securities, loss on extinguishment of debt during 2005, and gain on the sale
of a building during 2004) and stable operating expenses during the periods.
For the six-month period ended June 30, 2005, the Efficiency Ratio(1) improved
401 basis points to 62.06% from 66.07% for the same period in 2004. This
improvement was the result of higher revenues (excluding gains on sales of
securities, loss on extinguishment of debt during 2005 and gain on the sale of
a building during the first quarter of 2004) partially offset by an increase of
$1.4 million in other operating expenses.
Operating expenses remained essentially at the same level for the quarters
ended June 30, 2005 and 2004. An increase in salaries and employee benefits of
$1.4 million was offset by a decrease in other operating expenses of $1.4
million. The increase in salaries and employee benefits was due to higher
salaries and a decrease in expenses deferred as loan origination costs, and was
partially offset by a decrease in severance payments, commissions and bonuses.
Other operating expenses reflected a decrease of $1.4 million as a result of
decreases in EDP servicing expense, collections and related legal costs,
provision for repossessed assets and related expenses, and equipment expenses.
For the six-month period ended June 30, 2005, operating expenses increased $1.4
million or 1.3% when compared to the same period in 2004. There was an increase
of $2.1 million in salaries and employee benefits that was only partially
offset by a decrease of $0.7 million in other operating expenses. The increase
in salaries and employee benefits was due to higher salaries and a decrease in
expenses deferred as loan origination costs, and was partially offset by a
decrease in severance payments, commissions and bonuses.
Balance Sheet
Total assets as of June 30, 2005 increased by $577.7 million or 7.3% to $8.5
billion compared to $8.0 billion as of June 30, 2004, and $188.2 million or
2.3% compared to total assets of $8.3 billion as of December 31, 2004. As of
June 30, 2005, there was an increase of $1.1 billion in net loans, including
loans held for sale (further explained below) compared to June 30, 2004
balances and $464.1 million compared to December 31, 2004 balances. The
investment securities portfolio decreased by $919.1 million, from $2.4 billion
as of June 30, 2004 to $1.5 billion as of June 30, 2005.
The net loan portfolio, including loans held for sale, reflected an increase of
23.4% or $1.1 billion, reaching $6.0 billion at June 30, 2005, compared to the
figures reported as of June 30, 2004. Compared to December 31, 2004, the net
loan portfolio grew by $464.1 million or 8.4% from $5.5 billion. The mortgage
loan portfolio at June 30, 2005 grew $854.2 million or 41.8% compared to June
30, 2004 and $317.4 million or 12.3% compared to December 31, 2004. The
commercial loan portfolio (including construction loans) and the consumer loan
portfolio also reflected increases of $179.2 million or 7.3% and $97.2 million
or 23.5%, respectively, as of June 30, 2005, compared to June 30, 2004.
Compared to December 31, 2004 the commercial and consumer loan portfolios
reflected increases of $86.1 million or 3.4% and $57.2 million or 12.6%,
respectively. Compared to the sequential quarter ended March 31, 2005, the
annualized growth in the mortgage, commercial and consumer loan portfolio was
20.3%, 11.8% and 33.4%, respectively. The annualized growth in the consumer
loan portfolio is attributable to an increment of 45.2% and 28.7% in credit
cards and other consumer loans, respectively.
Mortgage loans originated for the second quarter of 2005 reached $205.1 million
and net purchases were $33.9 million, composed of $89.7 million loans purchased
and $55.8 million of loans sold. The mortgage loans purchased and sold during
the second quarter of 2005 were negotiated at their fixed rates. Mortgage loan
originations for the first semester of 2005 reached $377.4 million and net
purchases were $144.5 million composed of $289.9 million loans purchased and
$145.4 million loans sold. Of the $289.9 million of loans purchased during the
first semester of 2005, $200.2 million were fixed rate loans that were swapped
to create floating rate assets and the mortgage loans were sold at their fixed
rates.
Deposits at June 30, 2005 reflected an increase of $1.3 billion or 29.9%,
compared to deposits of $4.4 billion as of June 30, 2004 and $971.0 million or
20.5%, compared to deposits of $4.7 billion as of December 31, 2004,
respectively. Non-interest bearing deposits, when compared to June 30, 2004
and December 31, 2004, increased by $95.3 million or 13.7% and $48.6 million or
6.5%, respectively, reaching $792.7 million as June 30, 2005. This increase was
also in line with the objective of enhancing customer activity and market share.
Total borrowings at June 30, 2005 (comprised of federal funds purchased and
other borrowings, securities sold under agreements to repurchase, commercial
paper issued, and term and capital notes) decreased $855.2 million or 29.9% and
$857.8 million or 30.0%, compared to borrowings at June 30, 2004 and December
31, 2004, respectively.
Financial Strength
Non-performing loans to total loans as of June 30, 2005 was 1.27%, a 68 basis
point improvement over the reported 1.95% as of June 30, 2004, and a 30 basis
point improvement over the reported 1.57% as of December 31, 2004. Non-
performing loans at June 30, 2005 amounted to $76.6 million, a 20.2%
improvement compared to $96.0 million as of June 30, 2004, and a 12.4%
improvement compared to $87.5 million as of December 31, 2004. There had been
an improving trend in this indicator during 2004, which has continued
throughout the first semester of 2005.
The annualized ratio of net charge-offs to average loans for the semester ended
June 30, 2005 improved 29 basis points to 0.50% from 0.79% reported for the
semester ended June 30, 2004. Management is committed and has directed its
efforts to continue improving this ratio.
The allowance for loan losses to total non-performing loans at June 30, 2005
improved to 85.64% compared to 69.45% at June 30, 2004 and 79.05% at December
31, 2004. Excluding non-performing mortgage loans (for which the Company has
historically had a minimal loss experience) this ratio is 208.0% at June 30,
2005 compared to 140.4% as of June 30, 2004 and 135.0% as of December 31, 2004.
The allowance for loan losses represents 1.09% of total loans as of June 30,
2005, a 27 basis point reduction over 1.36% reported as of June 30, 2004 and a
15 basis point reduction over the 1.24% reported as of December 31, 2004. The
allowance for loan losses to total loans excluding mortgage loans as of June
30, 2005 was 2.09%.
As of June 30, 2005, total capital to risk-adjusted assets (BIS ratio) reached
12.34% and Tier I capital to risk-adjusted assets and leverage ratios were
9.75% and 6.52%, respectively.
The Legislature of Puerto Rico approved a temporary, two-year surtax of 2.5%
for corporations effective for taxable years beginning after December 31, 2004,
which would increase the maximum marginal tax rate from 39% to 41.5%. The new
proposal is pending signature by the Governor of Puerto Rico. The
implementation of the new proposal, if signed into law, should not have a
significant impact on the Corporation's results of operations for the year.
Customer Financial Assets Under Control
As of June 30, 2005, the Company had $13.8 billion in Customer Financial Assets
Under Control, which represents a 20.0% or $2.3 billion increase over balances
as of June 30, 2004. This is a significant part of the financial assets of
Puerto Rico households and reflects the Company's strong positioning in its
primary market. Customer Financial Assets Under Control include bank deposits
(excluding brokered deposits), broker-dealer customer accounts, mutual fund
assets managed, and trust, institutional and private accounts under management.
The growth in customer financial assets and the stability of customer deposits
is a strong indication of the Company's successful efforts to regain market
share and reposition itself as a leading provider of financial services.
Shareholder Value
During the first semester of 2005, Santander BanCorp declared a cash dividend
of 32 cents per common share, resulting in a current annualized dividend yield
of 2.55%. Market capitalization reached approximately $1.2 billion as of June
30, 2005.
There were no stock repurchases during 2005 and 2004 under the Stock Repurchase
Program. As of June 30, 2005, the Company had acquired, as treasury stock, a
total of 4,011,260 shares of common stock, amounting to $67.6 million.
Institutional Background
Santander BanCorp is a publicly held financial holding company that is traded
on the New York Stock Exchange (SBP) and on Latibex (Madrid Stock Exchange)
(XSBP). 89% of the outstanding common of Santander BanCorp is owned by Banco
Santander Central Hispano, S.A (Santander). The Company has three wholly owned
subsidiaries, Banco Santander Puerto Rico, Santander Securities Corporation and
Santander Insurance Agency. Banco Santander Puerto Rico has been operating in
Puerto Rico for nearly three decades. It offers a full array of services
through 65 branches in the areas of commercial, mortgage and consumer banking,
supported by a team of over 1,600 employees. Santander Securities offers
securities brokerage services and provides portfolio management services
through its wholly owned subsidiary Santander Asset Management Corporation.
Santander Insurance Agency offers life, health and disability coverage as a
corporate agent and also operates as a general agent. For more information,
visit the Company's website at http://www.santandernet.com/.
Santander (SAN.MC, STD.N) is the 9th largest bank in the world by market
capitalization and the largest in the Euro Zone. Founded in 1857, Santander has
63 million customers, 9,970 offices and a presence in over 40 countries. It is
the largest financial group in Spain and Latin America, and is a major player
elsewhere in Europe, including the United Kingdom through its Abbey subsidiary
and Portugal, where it is the third largest banking group. Through Santander
Consumer it also operates a leading consumer finance franchise in Germany,
Italy, Spain and nine other European countries. In 2004, Santander recorded 3.6
billion euro in net attributable profits.
In Latin America, Santander manages over US$130 billion in business volumes
(loans, deposits and off-balance sheet assets under management) through 4,000
offices in 10 countries.
Projected calendar for SBP reporting 2005 quarterly financial results
Third quarter results - October 27, 2005
Fourth quarter results - January 27, 2006
This news release contains forward-looking statements that are based on current
expectations, estimates, forecasts and projections about the industry in which
the Company operates, its beliefs and its management's assumptions. Words such
as "expects," "anticipates," "targets," "goals," "projects," "intends,"
"plans," "believes," "seeks," "estimates" and variations of such words and
similar expressions are intended to identify such forward-looking statements.
These statements are not guarantees of future performance and involve certain
risks, uncertainties and assumptions that are difficult to predict. Therefore,
actual outcomes and results may differ materially from what is expressed or
forecast in such forward-looking statements. Except as otherwise required under
federal securities laws and the rules and regulations of the SEC, the Company
does not have any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events, changes in assumptions or otherwise.
(1) On a tax equivalent basis.
SANTANDER BANCORP
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
AS OF JUNE 30, 2005 AND 2004 AND DECEMBER 31, 2004
(Dollars in thousands, except share data)
ASSETS
Variance
06/05-
30-Jun-05 30-Jun-04 31-Dec-04 12/04
CASH AND CASH EQUIVALENTS:
Cash and due from banks $198,086 $157,982 $110,148 79.84%
Interest bearing deposits 52,520 14,233 42,612 23.25%
Federal funds sold and
securities purchased under
agreements to resell 398,630 241,150 326,650 22.04%
Total cash and cash
equivalents 649,236 413,365 479,410 35.42%
INTEREST BEARING DEPOSITS 100,000 300 50,000 100.00%
TRADING SECURITIES 50,000 42,945 34,184 46.27%
INVESTMENT SECURITIES
AVAILABLE FOR SALE, at fair
value 1,443,424 1,554,685 1,978,132 -27.03%
INVESTMENT SECURITIES HELD TO
MATURITY, at amortized cost - 845,377 - N/A
OTHER INVESTMENT SECURITIES,
at amortized cost 37,500 - 37,500 0.00%
LOANS HELD FOR SALE, net 278,314 291,068 271,596 2.47%
LOANS, net 5,765,793 4,622,433 5,311,936 8.54%
ALLOWANCE FOR LOAN LOSSES (65,623) (66,665) (69,177) -5.14%
PREMISES AND EQUIPMENT, net 54,245 50,283 52,854 2.63%
ACCRUED INTEREST RECEIVABLE 50,797 36,943 44,682 13.69%
GOODWILL 34,791 34,791 34,791 0.00%
INTANGIBLE ASSETS 9,283 4,251 8,003 15.99%
OTHER ASSETS 122,263 122,589 107,869 13.34%
$8,530,023 $7,952,365 $8,341,780 2.26%
LIABILITIES AND STOCKHOLDERS' EQUITY
DEPOSITS:
Non-interest bearing $792,667 $697,319 $744,019 6.54%
Interest bearing 4,926,478 3,704,886 4,004,120 23.04%
Total deposits 5,719,145 4,402,205 4,748,139 20.45%
FEDERAL FUNDS PURCHASED AND
OTHER BORROWINGS 750,541 427,000 780,334 -3.82%
SECURITIES SOLD UNDER
AGREEMENTS TO REPURCHASE 876,532 1,669,033 1,349,444 -35.04%
COMMERCIAL PAPER ISSUED 264,592 574,636 629,544 -57.97%
TERM NOTES 39,282 174,113 31,457 24.88%
CAPITAL NOTES 74,574 15,925 72,588 2.74%
ACCRUED INTEREST PAYABLE 37,384 18,867 22,666 64.93%
OTHER LIABILITIES 196,664 178,791 151,605 29.72%
7,958,714 7,460,570 7,785,777 2.22%
STOCKHOLDERS' EQUITY:
Series A Preferred stock,
$25 par value; 10,000,000
shares authorized, none
issued or outstanding - - - N/A
Common stock, $2.50 par
value; 200,000,000 shares
authorized; 50,650,364
shares issued;
46,639,104 shares outstanding
in June 2005 and December
2004 and 42,398,954 shares
outstanding in June 2004. 126,626 116,026 126,626 0.00%
Capital paid in excess of
par value 304,171 211,742 304,171 0.00%
Treasury stock at cost,
4,011,260 shares in June
2005, 2004 and December
2004. (67,552) (67,552) (67,552) 0.00%
Accumulated other
comprehensive loss, net of
taxes (21,350) (40,428) (6,818) 213.14%
Retained earnings-
Reserve fund 127,086 119,432 127,086 0.00%
Undivided profits 102,328 152,575 72,490 41.16%
Total stockholders'
equity 571,309 491,795 556,003 2.75%
$8,530,023 $7,952,365 $8,341,780 2.26%
SANTANDER BANCORP
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE SIX MONTH PERIODS AND THE QUARTERS ENDED JUNE 30, 2005 AND 2004
(Dollars in thousands, except per share data)
For the six months For the quarters
ended ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
INTEREST INCOME:
Loans $161,577 $118,753 $84,842 $60,853
Investment securities 38,414 51,747 15,958 24,532
Interest bearing deposits 1,547 234 1,336 102
Federal funds sold and securities
purchased under agreements to
resell 2,668 1,219 1,320 639
Total interest income 204,206 171,953 103,456 86,126
INTEREST EXPENSE:
Deposits 53,214 26,711 30,933 13,531
Securities sold under agreements
to repurchase and other borrowings 40,555 37,607 18,157 18,958
Subordinated capital notes 1,299 28 698 7
Total interest expense 95,068 64,346 49,788 32,496
Net interest income 109,138 107,607 53,668 53,630
PROVISION FOR LOAN LOSSES 10,750 14,750 4,050 6,000
Net interest income after
provision for loan losses 98,388 92,857 49,618 47,630
OTHER INCOME:
Bank service charges, fees and
other 20,627 19,224 10,432 9,579
Broker/dealer, asset management
and insurance fees 26,339 25,265 13,766 12,814
Gain on sale of securities 17,376 9,003 415 100
Loss on extinguishment of debt (6,744) - (17) -
Gain on sale of mortgage servicing
rights 55 196 12 105
Gain on sale of loans 7,207 157 6,127 (55)
Gain on sale of building - 2,754 - -
Other income 6,712 3,009 1,749 539
Total other income 71,572 59,608 32,484 23,082
OTHER OPERATING EXPENSES:
Salaries and employee benefits 48,289 46,229 24,121 22,680
Occupancy costs 8,388 6,670 4,364 3,270
Equipment expenses 2,957 3,602 1,481 1,838
EDP servicing, amortization and
technical expenses 14,232 16,097 6,999 7,466
Communication expenses 4,196 4,590 2,180 2,482
Business promotion 5,042 4,312 2,680 2,632
Other taxes 4,188 4,525 2,086 2,251
Other operating expenses 22,805 22,702 10,795 12,039
Total other operating
expenses 110,097 108,727 54,706 54,658
Income before provision for
income tax 59,863 43,738 27,396 16,054
PROVISION FOR INCOME TAX 15,099 2,477 8,141 8
NET INCOME AVAILABLE TO COMMON
SHAREHOLDERS $44,764 $41,261 $19,255 $16,046
EARNINGS PER COMMON SHARE* $0.96 $0.88 $0.41 $0.34
* After giving retroactive effect to the stock dividend declared on July
9, 2004
SANTANDER BANCORP
2004
YTD QTD QTD YTD QTD
June 30, June 30, March 31, June 30, June 30,
SELECTED RATIOS 2005 2005 2005 2004 2004
Net interest margin (1) 3.01% 2.94% 3.08% 3.33% 3.24%
Return on average
assets (2) 1.10% 0.95% 1.25% 1.12% 0.86%
Return on average common
equity (2) 15.37% 12.57% 18.48% 17.35% 13.80%
Efficiency Ratio (1,3) 62.06% 61.79% 62.34% 66.07% 67.49%
Non-interest income to
revenues 25.95% 23.90% 27.95% 25.74% 21.14%
Capital:
Total capital to risk-
adjusted assets - 12.34% 11.97% - 10.64%
Tier I capital to
risk-adjusted assets - 9.75% 9.40% - 9.09%
Leverage ratio - 6.52% 6.18% - 6.17%
Non-performing loans to
total loans - 1.27% 1.47% - 1.95%
Non-performing loans plus
accruing loans
past-due 90 days or
more to loans - 1.32% 1.54% - 2.03%
Allowance for loan losses
to non-performing loans - 85.64% 81.55% - 69.45%
Allowance for loans
losses to period-end
loans - 1.09% 1.20% - 1.36%
OTHER SELECTED FINANCIAL DATA 6/30/2005 6/30/2004 12/31/2004
(dollars in millions)
Customer Financial Assets
Under Control:
Bank deposits (excluding
brokered deposits) $4,701.5 $4,016.6 $4,275.4
Broker-dealer customer
accounts 4,865.2 4,188.1 4,543.3
Mutual fund and assets
managed 2,835.9 2,085.4 2,640.0
Trust, institutional and
private accounts assets
under management 1,389.9 1,208.0 1,369.0
Total $13,792.5 $11,498.1 $12,827.7
(1) On a tax-equivalent basis.
(2) Ratios for the quarters are annualized.
(3) Operating expenses divided by net interest income, on a tax equivalent
basis, plus other income, excluding gain on sale of securities, loss
on extinguishment of debt in 2005 and gain on sale of building for
1Q04.
SANTANDER BANCORP
SELECTED CONSOLIDATED FINANCIAL INFORMATION:
(DOLLARS IN THOUSANDS)
For the Quarters Ended
June 30, June 30, March 31, 2Q05/2Q04 2Q05/1Q05
2005 2004 2005 Variation Variation
Interest Income $103,456 $86,126 $100,750 20.1% 2.7%
Tax equivalent
adjustment 2,786 4,375 4,534 -36.3% -38.6%
Interest income on a
tax equivalent basis 106,242 90,501 105,284 17.4% 0.9%
Interest expense 49,788 32,496 45,280 53.2% 10.0%
Net interest income
on a tax
equivalent basis 56,454 58,005 60,004 -2.7% -5.9%
Provision for
loan losses 4,050 6,000 6,700 -32.5% -39.6%
Net interest income
on a tax equivalent
basis after provision 52,404 52,005 53,304 0.8% -1.7%
Other operating
income 25,942 23,037 21,047 12.6% 23.3%
Gain on sale of
securities 415 100 16,960 315.0% -97.6%
Gain on sale of loans 6,127 (55) 1,081 -11240.0% 466.8%
Gain on sale of
building - - - N/A N/A
Other operating
expenses 54,706 54,658 55,391 0.1% -1.2%
Income on a tax
equivalent basis
before income taxes 30,182 20,429 37,001 47.7% -18.4%
Provision (credit)
for income taxes 8,141 8 6,958 101662.5% 17.0%
Tax equivalent
adjustment 2,786 4,375 4,534 -36.3% -38.6%
NET INCOME (LOSS) $19,255 $16,046 $25,509 20.0% -24.5%
SELECTED RATIOS:
Per share data (1):
Earnings (loss) per
common share $0.41 $0.34 $0.55
Average common shares
outstanding** 46,639,104 46,639,104 46,639,104
Common shares
outstanding at
end of period** 46,639,104 46,639,104 46,639,104
Cash Dividends
per Share $0.16 $0.11 $0.16
Six Months Ended June 30,
2005 2004 Variation
Interest Income $204,206 $171,953 18.8%
Tax equivalent adjustment 7,321 9,115 -19.7%
Interest income on a
tax equivalent basis 211,527 181,068 16.8%
Interest expense 95,068 64,346 47.7%
Net interest income on a
tax equivalent basis 116,459 116,722 -0.2%
Provision for loan losses 10,750 14,750 -27.1%
Net interest income on a
tax equivalent basis
after provision 105,709 101,972 3.7%
Other operating income 46,989 47,694 -1.5%
Gain on sale of securities 17,376 9,003 -93.0%
Gain on sale of loans 7,207 157 -4490.4%
Gain on sale of building - 2,754 -100.0%
Other operating expenses 110,097 108,727 1.3%
Income on a tax equivalent
basis before income taxes 67,184 52,853 27.1%
Provision (credit) for
income taxes 15,099 2,477 509.6%
Tax equivalent adjustment 7,321 9,115 -19.7%
NET INCOME (LOSS) $44,764 $41,261 8.5%
SELECTED RATIOS:
Per share data (1):
Earnings (loss) per common share $0.96 $0.88
Average common shares
outstanding** 46,639,104 46,639,104
Common shares outstanding
at end of period ** 46,639,104 46,639,104
Cash Dividends per Share $0.32 $0.11
(1) Per share data is based on the average number of shares outstanding
during the period.
Basic and diluted earnings per share are the same.
** After giving retroactive effect to the stock dividend declared on
July 9, 2004
DATASOURCE: Santander BanCorp
CONTACT: Maria Calero, +1-787-777-4437, or Evelyn Vega, +1-787-777-4546,
both for Santander BanCorp
Web site: http://www.santandernet.com/