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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 6, 1995
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BANPONCE CORPORATION
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(Exact name of registrant as specified in its charter)
COMMONWEALTH OF PUERTO RICO NO. 0-13818 NO. 66-0416582
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
209 MUNOZ RIVERA AVENUE
HATO REY, PUERTO RICO 00918
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (809) 765-9800
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On October 6, 1995, BanPonce Corporation (the "Corporation") announced
by way of a news release, its operational results for the quarter and
nine-month period ended September 30, 1995. A copy of the Corporation's
release, dated October 6, 1995, is attached hereto as Exhibit 99(a) and is
hereby incorporated by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
99(a) News release, dated October 6, 1995, announcing the Corporation
and subsidiaries earnings for the quarter and nine-month period ended September
30, 1995.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BANPONCE CORPORATION
(Registrant)
Date: October 9, 1995 By: /S/ Amilcar L. Jordan, Esq.
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Name: Amilcar L. Jordan, Esq.
Title: Senior Vice President and Comptroller
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Exhibit Index
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Exhibit Number Description
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99(a) News release, dated October 6, 1995
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BANPONCE CORPORATION ---------------------------------
For additional information: BANPONCE CORPORATION
David H. Chafey, Jr. PO Box 362708
Executive Vice President San Juan, Puerto Rico 00936-2708
Telephone (809) 751-4566 Telephone (809) 765-9800
EXHIBIT 99(a)
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October 6, 1995 News Release
BanPonce Corporation and subsidiaries earnings
for the quarter and nine-month period ended September 30, 1995
BanPonce Corporation (the Corporation) today announced net income of $38.3
million for the third quarter of 1995. Earnings per common share (EPS) for the
quarter were $1.10, based on 32,922,318 average shares outstanding. Net
earnings for the third quarter of 1994 were $31.7 million or $0.90 per common
share, based on 32,812,818 average shares outstanding. For the first and
second quarter of 1995, EPS were $0.96 and $0.98, respectively.
The Corporation's return on assets (ROA) and return on common equity (ROE) for
the third quarter of 1995 were 1.03% and 14.55%, respectively. For the same
period of 1994, the Corporation reported ROA and ROE of 1.02% and 13.26%,
respectively. ROA and ROE for the second quarter of 1995 were 1.00% and
13.47%.
For the nine-month period ended on September 30, 1995, the Corporation's net
earnings reached $106.1 million or 15.2% over the $92.1 million obtained for
the same period of 1994. EPS for the first nine months of 1995 were $3.04, as
compared with $2.74 for the same period of 1994. ROA and ROE for the first
nine months of 1995 were 1.03% and 14.00%, respectively. For the same period
of 1994 these ratios were 1.02% and 13.72%.
The Corporation's results of operations for the third quarter of 1995 show an
increase of $11.7 million in net interest income when compared with the same
quarter of 1994 and an increase of $11 million in other revenues. These
improvements were partially offset by an increase of $5.7 million in income
taxes, $5.4 million in the provision for loan losses and $5 million in
operating expenses.
The increase in net interest income for the quarter resulted mainly from an
increase of $2.2 billion in the average volume of earning assets. The increase
in the volume of earning assets was funded through a higher amount of deposits
and borrowings. The net interest yield for the quarter ended September 30,
1995 was 4.31%, compared with 4.74% for the third quarter of 1994. For the
first nine months of 1995 the net interest yield was 4.43%, compared with 4.71%
for the same period of 1994.
The increase in the provision for loan losses was mainly due to the rise in net
charge-offs. Net charge-offs for the quarter ended September 30, 1995 were
$13.3 million or 0.64% of average loans
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compared with $10.5 million or 0.57% of average loans for the same period of
1994. On a year-to-date basis, net charge-offs amounted to $32.7 million or
0.54% of average loans, compared with $28.7 million and 0.55%, respectively in
1994. The Corporation also provided for potential losses that may arise in the
U.S. Virgin Islands' loan portfolio as a result of the effects of hurricane
Marilyn on the economy of these islands.
Other operating income and other service fees increased $3.6 million and $3.4
million, respectively, while service charges on deposit accounts rose $1.6
million. The increase in other operating income was mainly due to higher gains
on sale of mortgage loans realized by Banco Popular, Equity One and Puerto Rico
Home Mortgage and the income on investment banking and underwriting services
provided by BP Capital Markets. Other service fees in Banco Popular increased
$3.2 million, mainly in mortgage servicing fees due to the acquisition of
substantially all the assets of Puerto Rico Home Mortgage on March 31, 1995.
Increases in credit card fees, fees collected on the growing volume of
transactions at point-of-sale (POS) terminals and other electronic
transactions, and fees generated through new collection and payment processing
services provided to government agencies also contributed to the rise in other
service fees. Fees related to the sale of non-deposit products also added $0.7
million to this revenue category. Service charges on deposits increased $1.3
million at Banco Popular mainly due to a higher activity on commerical accounts
and revisions made to the commercial accounts fee structure.
The gains on sale of investment securities available-for-sale for the third
quarter of 1995 amounted to $1.9 million, as compared with losses of $0.2
million for the same period of 1994. Trading transactions contributed with
$0.3 million to the Corporation's earnings in the current quarter.
Personnel costs increased $4.5 million as compared with the third quarter of
1994, of which $2.4 million represents expenses of the Corporation's new
subsidiaries, Banco Popular, FSB, Popular Mortgage and BP Capital Markets. The
rise in personnel costs is also related to normal annual merit increases,
business expansion and increased medical plan costs. Other operating expenses
increased $0.5 million after considering a reduction of $5.5 million in the
FDIC assessment. During this quarter the Corporation received a refund of $5.6
million from the FDIC due to the reduction in the assessment rate retroactive
to June 1, 1995 when the Bank Insurance Fund (BIF) reached the statutory level.
The increase in other operating expenses was mostly in equipment, net
occupancy, supplies and communication expenses. These increases are mostly
attributed to the growth and expansion of the Corporation's business activities
and the costs related to the expansion of the electronic payment system, the
growth in the network of POS terminals and the development of new products and
services. In addition, Banco Popular increased its reserve for sundry losses
to cover for estimated losses in Virgin Islands as a result of hurricane
Marilyn. The new operations of Banco Popular, FSB, Popular Mortgage and BP
Capital Markets were responsible for $2.4 million of the increase in other
operating expenses. The increase in income tax results from a higher pre-tax
income.
The Corporation's total assets at September 30, 1995, amounted to $14.9 billion,
compared with $12.4 billion at September 30, 1994. Most of the increase
relates to BP Capital Markets which had $888 million in total assets at
September 30, 1995. In addition, Banco Popular, FSB and Popular Mortgage had
$265 million and $98 million, respectively, in assets at the end of this
quarter. Total loans amounted to $8.5 billion at September 30, 1995, compared
with $7.5 billion a year ago. Commerical loans reflected the major growth,
followed by mortgage loans which also rose,
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particularly at Banco Popular, Equity One, and Popular Mortgage.
Total deposits were $9.7 billion at September 30, 1995 compared with $8.9
billion at September 30, 1994. Most of the increase was attained at Banco
Popular, where total deposits increased $647.1 million. Also contributing to
this increase were $179.2 million in deposits of Banco Popular, FSB, a new
subsidiary of the Corporation, which acquired from the Resolution Trust
Corporation four branches in January 1995 and opened two new branches in
August. Banco Popular, FSB operates in New Jersey.
The allowance for loan losses amounted to $164.4 million as of September 30,
1995, or 1.94% of loans, compared with $149.4 million or 1.99% at the same date
in 1994. Non-performing assets at September 30, 1995 were $155.9 million or
1.84% of loans, compared with $118.0 miilion or 1.57% at September 30, 1994.
At September 30, 1995, stockholders' equity was $1.1 billion, compared with
$1.0 billion at September 30, 1994. The allowance for unrealized holding gains
on securities available-for-sale net of deferred taxes, as required by SFAS
115, amounted to $5.8 million at September 30, 1995, as compared with an
allowance for unrealized losses, net of taxes, of $9.8 million a year ago.
The market value of the Corporation's common stock at September 30, 1995 was
$38.75, compared with $33.125 at September 30, 1994. At September 30, 1995,
the Corporation's common stock had a book value per share of $30.44. At the
same date, the Corporation's market capitalization was $1.3 billion.
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BANPONCE CORPORATION
Financial Summary
(In thousands, except per share data)
<TABLE>
<CAPTION>
1995 1994 Third Nine months ended
-------------------------------- Quarter September 30,
1995-1994 -----------------------------------
Third Second Third Percent Percent
Quarter Quarter Quarter Variance 1995 1994 Variance
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<S> <C> <C> <C> <C> <C> <C> <C>
Summary of Operations
Interest Income $288,458 $288,818 $228,695 26.13% $807,488 $648,106 24.59%
Interest expense 140,043 126,698 91,996 52.23 379,432 250,050 51.74
-------- -------- -------- ----- -------- -------- -----
Net Interest Income 148,416 142,120 136,699 8.57 420,063 296,056 7.54
Provision for loan losses 18,997 12,646 13,544 40.19 43,331 41,244 5.06
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Net Interest income after provision
for loan losses 129,428 129,474 123,155 5.09 384,732 356,812 7.82
Other operating income 44,588 39,956 36,022 23.78 122,100 102,950 18.60
Gain (loss) on sale of securities 1,950 66 (205) 2,062 67
Trading account profit (loss) 293 350 (8) 583 323 83.59
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Total other income 46,831 40,372 35,809 30.78 124,788 103,340 20.72
Salaries and benefits 57,928 57,803 52,467 10.41 172,822 154,066 12.17
Profit sharing 4,433 6,506 5,376 (17.52) 14,268 15,993 (10.79)
Other operating expenses 57,233 60,413 56,706 0.93 175,545 163,520 7.35
-------- -------- -------- ------ -------- -------- ------
Total operating expenses 119,597 124,722 114,551 4.41 382,635 333,581 8.71
Income before income tax and dividends on
preferred stock of Banco Popular 56,662 45,124 44,413 27.58 146,862 126,571 16.02
Income tax 18,356 11,063 12,696 44.57 40,743 34,063 19.61
-------- -------- -------- ------ -------- -------- ------
36,307 34,061 31,717 20.78 106,109 92,508 14.70
Dividends on preferred stock of
Banco Popular 385 (100.00)
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Net income $ 36,307 $ 34,061 $ 31,717 20.78 $104,109 $ 92,123 15.18
======== ======== ======== ====== ======== ======== =======
Net income applicable to common stock $ 36,220 $ 31,973 $ 29,560 22.53 $ 99,847 $ 59,955 10.96
======== ======== ======== ====== ======== ======== =======
Earnings per common share:
Net Income $ 1.10 $ 0.98 $ 0.90 22.12 $ 3.04 $ 2.74 10.61
======== ======== ======== ====== ======== ======== =======
Average common shares outstanding 32,922,316 32,893,968 32,812,818 32,894,587 32,784,802
Common shares outstanding at end of period 32,922,318 32,893,958 32,812,818 32,922,318 32,812,818
</TABLE>
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BANPONCE CORPORATION
Financial Summary
(in thousands)
<TABLE>
<CAPTION>
Third Nine months ended
1995 1994 Quarter September 30
------------------------------------- 1995-1994 -------------------------------------
Third Second Third Percent Percent
Quarter Quarter Quarter Variance 1995 1994 Variance
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<S> <C> <C> <C> <C> <C> <C> <C>
Selected Average Balances
Total assets $14,708,587 $13,616,347 $12,385,240 18.76 $13,789,417 $12,104,202 13.67
Loans 8,369,295 8,089,952 7,355,819 13.78 8,189,515 6,926,741 17.08
Earning assets 13,787,550 12,814,604 11,539,843 19.48 12,998,343 11,268,582 14.45
Interest-bearing liabilities 11,596,367 10,552,061 9,444,506 22.78 10,679,496 9,248,785 15.47
Stockholders' equity 1,087,119 1,052,106 986,282 10.22 1,052,384 901,509 16.85
Performance Ratios
Net interest yield* 4.31% 4.44% 4.74% 4.43% 4.71%
Return on assets 1.03 1.00 1.02 1.03 1.02
Return on common equity 14.55 13.47 13.26 14.00 13.72
Credit Quality Data
Nonperforming assets $ 155,917 $ 148,223 $ 117,967 32.17 $ 155,917 $ 117,967 32.17
Net loans charged-off 13,291 11,379 10,533 26.18 32,699 28,725 13.83
Allowance for loan losses 164,430 158,734 149,429 10.04 164,430 149,429 10.04
Nonperforming assets to total
assets 1.04% 1.02% 0.95% 1.04% 0.95%
Allowance for losses to loans 1.94 1.94 1.99 1.94 1.99
Selected Financial Data at
Period-End
Total assets $14,934,809 $14,573,302 $14,934,909 $12,444,525 20.01
Loans............................ 8,487,114 8,200,328 8,487,114 7,502,090 13.13
Earning assets................... 13,968,141 13,601,079 13,989,141 11,606,184 20.35
Interest-bearing liabilities..... 11,745,871 11,430,070 11,746,871 9,502,701 23.61
Stockholders equity.............. 1,102,047 1,073,170 1,102,047 988,873 11.44
</TABLE>
*Not on a taxable equivalent basis
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