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Popular, First Bancorp, R-G Financial Had Solid 4Q

Local financial institutions continue their steady advance


February 5, 2004
Copyright © 2004 CARIBBEAN BUSINESS. All Rights Reserved.

Popular Inc., First BanCorp, and R-G Financial Corp. reported positive results for the fourth quarter of 2003 (4Q03), which ended Dec. 31.

Popular Inc.

In 4Q03, Popular Inc. had net income of $106.3 million or $0.78 per common share basic and diluted, compared with $80.8 million or $0.61 in 4Q02. Net income reached $470.9 million in 2003, an increase of 34% over 2002’s $351.9 million.

Return on assets (ROA) and return on equity (ROE) for 4Q03 were 1.18% and 16.38%, respectively, compared with 0.96% and 14.64% for 4Q02. For the year 2003, ROA was 1.36% and ROE 19.30%, up from 1.11% and 16.29% in 2002. Earnings per common share, basic and diluted, were $3.47 in 2003, compared with $2.61 in 2002, representing a 33% gain.

The fourth quarter of 2003 saw improvements of $23 million in net interest income and $1.6 million in noninterest income compared with 4Q02. Net interest income rose 9% from $1.2 billion in 2002 to $1.3 billion in 2003. Noninterest income amounted to $618.5 million for 2003, compared with $523.7 million for 2002, an increase of 18%.

The provision for loan losses totaled $195.9 million in 2003, or 113% of net charge-offs, compared with $205.6 million or 120% in 2002.

On a combined basis, service charges on deposit accounts and other service fees rose $20.5 million, or 5%, compared with 2002. Popular recorded $10.2 million in trading losses during 2003.

Sundry losses during 2003 amounted to some $19 million, including losses related to unauthorized transactions with credit cards issued by Banco Popular de Puerto Rico. Operating expenses at the end of 2003 included a $21.6 million fine related to a federal investigation that led to a deferred prosecution agreement.

Total assets as of Dec. 31, 2003 were $36.4 billion, compared with $33.7 billion on that date the previous year. Total loans went from $19.6 billion to $22.6 billion over the year.

In 2003, stockholders’ equity was $2.8 billion, compared with $2.4 billion in 2002. The company’s common stock market value was $44.85 per share in 2003, compared with $33.80 per share in 2002. Market capitalization at the close of 2003 was $6 billion, up from $4.5 billion the year before.

"We are pleased with the year-end results of the corporation, considering the historically low interest rates and the relatively slow economic growth. The increase in net interest income and the improvement in the quality of our loan portfolio are particularly satisfactory," said Jorge A. Junquera, Popular’s chief financial officer.

First BanCorp

First BanCorp, the second-largest financial holding company in Puerto Rico, reported net income in 4Q03 of nearly $55 million or $1.12 per share (basic) and $1.09 per share (diluted), compared with some $28 million or 53 cents per share (basic) and 52 cents per share (diluted) in 4Q02. The earnings gain for the quarter was 96%.

For 2003, earnings were $152.3 million or $3.04 per share (basic) and $2.98 per share (diluted), compared with nearly $108 million or $2.04 per share (basic) and $2.01 per share (diluted) in 2002, representing a 41% gain.

ROA and ROE in 4Q03 were 1.84% and 35%, respectively, compared with 1.16% and 21.08% in 4Q02. For the year 2003, ROA and ROE were 1.46% and 25.2%, compared with 1.23% and 21.9% for 2002.

Earnings for 4Q03 and for the full year included a gain of $18.8 million or 46 cents per share diluted (net of tax) on the sale of a large part of the bank’s subsidiary credit card portfolio.

Net interest income was $84 million in 4Q03, up from $68.7 million in 4Q02. Compared with 2002, net interest income increased by $25.4 million to end 2003 at $292.2 million.

Total assets in 2003 stood at nearly $12.7 billion, 31.4% higher than 2002’s $9.6 billion. Deposits increased 24% from $5.5 billion in 2002 to $6.8 billion in 2003.

Loans had jumped to $7 billion by the end of 2003, a 25% gain over 2002’s $5.6 billion. Loan losses were $10.8 million for 4Q03, slightly more than the $10.1 million lost in 4Q02. Nonperforming loans at last year’s end were $85.5 million, or 1.21% of total loans, compared with $91.8 million or 1.63% at the end of 2002.

Other operating income amounted to $50.4 million for 4Q03.

Angel Alvarez, president & CEO of First BanCorp, said, "2003 was a challenging year. Nevertheless, we earned record profits through the continuous growth of our loan portfolios, especially commercial and residential loans, and by maintaining low delinquency rates in a difficult economic environment, especially in the consumer portfolios."

R-G Financial Corp.

R-G Financial Corp., the holding company of R-G Premier Bank, R-G Crown Bank, and R&G Mortgage Corp, reported net income for 4Q03 of $36.1 million, up 33% from $27.1 million in 4Q02. For the year 2003, net income was $131 million, compared with $96.3 million in 2002, an improvement of 36%.

For 4Q03, consolidated earnings per diluted share were $0.94, 38% higher than 4Q02’s $0.68. Consolidated earnings per diluted share went from $2.49 in 2002 to $3.37 in 2003, representing a 35% gain. ROE and ROA in 4Q03 were 24.52% and 1.80%.

In 4Q03, the gain on the origination and sale of loans increased 41% to $38.9 million, while net interest income rose 22% to $53.4 million. For the year 2003, the gain on the origination and sale of loans increased 72% to $146.9 million, while net interest income increased 23% to $188 million.

Total loan production during 4Q03 was $1.1 billion, a 23% increase over the same quarter the previous year. Total loan production for all of 2003 was $4.5 billion, up 52%.

Impairment charges of the servicing asset (included in operating expenses) for 4Q03 and the full year amounted to $5.6 million and $37.7 million, respectively, compared with $7.3 million and $21 million in 2002.

R-G Crown Bank had total assets of $1.3 billion in 4Q03, jumping 56% during the year. In 2003, R-G’s total banking assets increased 35% to $7.4 billion, representing 90% of the consolidated assets as of Dec. 31, 2003.

"We are pleased to report these excellent results for the quarter and year ended Dec. 31, 2003," said R-G Financial Chairman & CEO Victor J. Galan. "During the quarter, the company continued to expand its loan portfolio, which is attributable both to general market growth and the company’s ongoing efforts in residential and commercial lending in Central Florida and Puerto Rico. This year should also be strong for R-G, with continued growth and greater profitability."

This Caribbean Business article appears courtesy of Casiano Communications.
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