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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): April 9, 1996
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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: (787) 765-9800
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(Former name of former address, if changed since last report)
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Item 5. Other Events
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On April 8, 1996, BanPonce Corporation (the "Corporation") announced by way
of a news release, its operational results for the quarter ended March 31,
1996. A copy of the Corporation's release, dated April 8, 1996, is attached
hereto as Exhibit 99(a) and is hereby incorporated by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(c) Exhibits
99(a) News release, dated April 8, 1996, announcing the Corporation and
subsidiaries earnings for the quarter ended March 31, 1996.
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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: April 9, 1996 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 April 8, 1996
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EXHIBIT 99 (a)
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BANPONCE CORPORATION
P.O. Box 362708
[BANPONCE San Juan, Puerto Rico 00936-2708
CORPORATION LOGO] Telephone (809) 765-9800
For additional information contact:
Jorge A. Junquera
Senior Executive Vice President
Telephone (787) 754-1685
April 8, 1996 News Release
BanPonce Corporation and subsidiaries earnings
for the quarter ended March 31, 1996
BanPonce Corporation (the Corporation) today announced net income of $45.1
million for the first quarter of 1996 as compared with $33.7 million reported
for the same quarter of 1995, an increase of $11.4 million or 34%. Earnings
per common share (EPS) for the quarter were $1.31, based on 32,974,936 average
shares outstanding, as compared with $0.96, based on 32,866,623 average shares
outstanding for the quarter ended March 31, 1995. Net earnings for the last
quarter of 1995 were $40.3 million, or $1.15 per share, based on 32,948,636
average shares outstanding.
The Corporation's return on assets (ROA) and return on common equity (ROE) for
the first quarter of 1996 were 1.17% and 16.39%, respectively. For the same
period of 1995, the Corporation reported ROA and ROE of 1.06% and 13.96%,
respectively. For the last quarter of 1995 these ratios were 1.05% and 14.82%.
Of the $11.4 million increase in net income, $6.7 million were attained at
Banco Popular, the Corporation's principal subsidiary. The U.S. subsidiaries
of the Corporation contributed with $1.2 million to the increase, while the
operations of Puerto Rico Home Mortgage and BP Capital Markets, acquired in the
second quarter of 1995, had net earnings of $1.2 million during the first
quarter of 1996. The holding company and the other subsidiaries of the group
contributed with the remaining $2.3 million of the increase in net income.
The Corporation's results of operations for the quarter ended March 31, 1996,
reflected an increase of $24.9 million in net interest income and an increase
of $14.4 million in other revenues when compared with the same quarter of 1995.
These improvements were partially offset by a rise of $12.4 million in
operating expenses, $9.5 million in the provision for loan losses and $6
million in income taxes.
The rise in net interest income for the quarter resulted mainly from an
increase of $2.6 billion in the average volume of earning assets, principally
in investment, money market and trading securities mostly due to the inclusion
of BP Capital and to higher volumes held at Banco Popular. Average loans also
increased, particularly in the commercial and mortgage portfolios. 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 March
31, 1996, was 4.44%, compared with 4.56% for the first quarter of 1995. The
decrease in the net interest yield results mainly from the net interest
margin of only 0.47% earned by BP Capital due to its significant volume of
arbitrage activities. For the last quarter of 1995 the net interest yield was
4.37%. The Corporation's net interest margin benefitted from the decline in
interest rates at the beginning of 1996.
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2- BanPonce Corporation First Quarter Results
The increase in the provision for loan losses is the result of a rise in the
Corporation's loan portfolio and increases in net charge-offs and
non-performing assets. Net charge-offs for the quarter ended March 31, 1996,
were $14.9 million or 0.68% of average loans compared with $8.0 million or
0.41% for the first quarter of 1995, and $17.3 million or 0.81% for the fourth
quarter of 1995. Non-performing assets were $149.3 million or 1.69% of
ending loans at March 31, 1996, compared with $124.1 million, or 1.55%, at the
end of the first quarter of 1995 and $155 million, or 1.79%, at December 31,
1995.
Other operating income and other service fees increased $6.2 million and $3.6
million, respectively, while service charges on deposit accounts rose $3
million. The increase in other operating income was mainly due to higher gains
on sale of mortgage loans realized by Equity One, gains realized by Puerto Rico
Home Mortgage, and the income from investment banking services provided by BP
Capital Markets. Furthermore, the increase in daily rental income and higher
gains realized on the sale of daily rental units by the Corporation's leasing
subsidiaries contributed to the growth in this revenue category. Other service
fees in Banco Popular increased $3.5 million, mainly in mortgage servicing
fees, primarily due to the servicing portfolio acquired from Puerto Rico Home
Mortgage, credit and debit card fees, fees related to the sale and
administration of investment products and the fees collected on the growing
volume of transactions at point-of-sale (POS) terminals and other electronic
transactions. Service charges on deposit accounts increased $2.8 million at
Banco Popular due to a higher activity on commercial accounts together with
revisions made to their fee structure in mid-1995 and additional services
provided.
Personnel costs increased $7.4 million as compared with the first quarter of
1995, of which $2.7 million were reflected in the profit sharing expense due to
an improvement in the profitability ratios of the Corporation, and $1.5 million
represented expenses of Puerto Rico Home Mortgage and BP Capital Markets. In
addition, annual merit increases and business expansion contributed to the
increase in personnel costs. Other operating expenses increased $5 million,
mostly in equipment expenses, professional fees, net occupancy expense and
business promotion. These increases are mostly attributed to the growth in the
Corporation's business activity, including the costs related to the expansion
of the electronic payment system, the growth in the network of POS terminals,
the continued investment in new technology and the development of new products
and services. The operations of Puerto Rico Home Mortgage and BP Capital
Markets accounted for $1.1 million of the increase in other operating
expenses. Partially offsetting these increases was a reduction in the FDIC
assessment of $4.8 million, caused by a decrease in the assessment rate during
the third quarter of 1995, when the Bank Insurance Fund (BIF) reached its
statutory level.
The Corporation's total assets at March 31, 1996, amounted to $15.8 billion,
compared with $13.1 billion at March 31, 1995. Most of the growth relates to
Banco Popular, which increased $1.4 billion in total assets and BP Capital
Markets, which had $878 million in assets at March 31, 1996. Total assets at
December 31, 1995, were $15.7 billion. At the same date, total loans amounted
to $8.9 billion compared with $8.0 billion a year ago and $8.7 billion at
December 31, 1995. Commercial loans reflected the major growth, particularly
at Banco Popular.
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3- BanPonce Corporation First Quarter Results
The allowance for loan losses amounted to $174.7 million as of March 31, 1996,
or 1.97% of loans, compared with $157.5 million or 1.97% at the same date in
1995. At December 31, 1995, the allowance for loan losses totaled $168.4
million or 1.94% of loans. The allowance as a percentage of non-performing
assets was 117.1% at March 31, 1996, compared with 126.9% at the end of the
first quarter of 1995 and 108.6% at December 31, 1995.
Total deposits were $10.2 billion at March 31, 1996, compared with $9.4 billion
at March 31, 1995, and $9.9 billion at the end of 1995. Most of the increase
was attained at Banco Popular, where total deposits increased $757 million.
At March 31, 1996, stockholders' equity was $1.2 billion, compared with $1.0
billion at the same date last year. Stockholders' equity was $1.1 billion at
December 31, 1995. The allowance for unrealized holding losses on securities
available-for-sale, net of deferred taxes, as required by SFAS 115, amounted to
$19 thousand at March 31, 1996, compared with $7.7 million a year ago. At the
end of 1995 the allowance for unrealized holding gains on securities available-
for-sale, net of taxes, amounted to $16.2 million.
The market value of the Corporation's common stock at March 31, 1996, was
$46.25 per share, compared with $31.50 at March 31, 1995, and $38.75 at
December 31, 1995. The Corporation's market capitalization at March 31, 1996,
was $1.5 billion, compared with $1 billion at March 31, 1995, and $1.3 billion
at December 31, 1995. At March 31, 1996, the Corporation's common stock had a
book value per share of $32.13.
The market value of the Corporation's preferred stock at March 31, 1996, was
$27.25 per share compared with $25.50 at March 31, 1995, and $27.25 at December
31, 1995.
Continuing with the Corporation's strategic expansion plans, in March 1996 the
Corporation made its first international investment with the purchase of 20% of
the common stock of Jamaica's fourth largest financial institution,
CitizensBank. The Corporation also acquired preferred stock of CitizensBank,
which is convertible into common stock equal to an additional 10% of common
equity at the option of BanPonce.
ATH-Dominicana, the first automated teller machine (ATM) network in the
Dominican Republic, began operations on March 25, 1996. This network, which
was launched by integrating Banco Popular Dominicano's 60+ ATM's, facilitates
electronic transactions to customers and will eventually include at least 15
other banks. This joint venture combines Banco Popular's technological
infrastructure and expertise with Codetel's (the Dominican Republic telephone
company) telecommunication platform, in order to provide customers with access
to ATMs in Puerto Rico and the United States, and vice-versa.
***
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BANPONCE CORPORATION
FINANCIAL SUMMARY
(In thousands, except per share data)
<TABLE>
<CAPTION>
Quarter ended First
March 31 Quarter ----------
------------------------- 1996-1995 Fourth
Percent Quarter
1996 1995 Variance 1995
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<S> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Interest income $302,927 $250,219 21.06% $298,311
Interest expense 140,467 112,691 24.65 142,191
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Net interest for income 162,460 137,528 18.13 156,120
Provision for loan losses 21,273 11,698 81.85 21,227
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Net interest income after provision
for loan losses 141,187 125,830 12.20 134,893
Other operating income 50,325 37,557 34.00 44,084
Gain on sale of securities 729 46 3,306
Trading account profit (loss) 938 (50) 1,192
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Total other income 51,992 37,553 38.45 48,582
Salaries and benefits 61,733 57,091 8.13 57,250
Profit sharing 6,070 3,327 82.45 4,735
Other operating expenses 62,896 57,900 8.63 62,212
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Total operating expenses 130,699 118,318 10.46 124,197
Income before income tax 62,480 45,065 38.64 59,278
Income tax 17,338 11,324 53.11 19,026
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Net income $ 45,142 $ 33,741 33.79 $ 40,252
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Net income applicable to common stock $ 43,054 $ 31,654 36.01 $ 38,164
========================= ===== ========
Earnings per common share:
Net income $ 1.31 $ 0.96 35.57 $ 1.15
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Average common shares outstanding 32,974,936 32,866,623 32,948,636
Common shares outstanding at end of period 32,974,936 32,866,623 32,948,636
</TABLE>
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BANPONCE CORPORATION
FINANCIAL SUMMARY
(In thousands)
<TABLE>
<CAPTION>
Quarter ended First
March 31 Quarter ------------
------------------------------- 1996-1995 Fourth
Percent Quarter
1996 1995 Variance 1995
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<S> <C> <C> <C> <C>
SELECTED AVERAGE BALANCES
Total assets $15,556,830 $12,933,815 20.28 $15,182,816
Loans 8,748,657 7,863,742 11.25 8,548,163
Earning assets 14,630,906 12,067,979 21.24 14,276,343
Interest-bearing liabilities 12,209,571 9,871,081 23.69 11,911,582
Stockholders' equity 1,156,888 1,020,191 13.40 1,121,219
PERFORMANCE RATIOS
Net interest yield* 4.44% 4.56% 4.37%
Return on assets 1.17 1.06 1.05
Return on common equity 16.39 13.96 14.82
CREDIT QUALITY DATA
Nonperforming assets $ 149,259 $ 124,138 20.24 $ 155,031
Net loans charged-off 14,942 8,029 86.10 17,264
Allowance for loan losses 174,724 157,467 10.96 168,393
Nonperforming assets to total assets 0.94% 0.95% 0.99%
Allowance for losses to loans 1.97 1.97 1.94
SELECTED FINANCIAL DATA AT PERIOD-END
Total assets . . . . . . . . . . . . . . . . . . $15,805,083 $13,075,543 20.88 $15,675,451
Loans . . . . . . . . . . . . . . . . . . . . . . 8,850,078 7,993,717 10.71 8,677,484
Earning assets . . . . . . . . . . . . . . . . . 14,801,283 12,179,033 21.53 14,668,195
Interest-bearing liabilities . . . . . . . . . . 12,434,422 10,055,955 23.65 12,246,017
Stockholders' equity . . . . . . . . . . . . . . 1,159,570 1,038,318 11.68 1,141,697
</TABLE>
* Not on a taxable equivalent basis
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