Santander BanCorp Doubles Earnings per Share for the Third Quarter
of 2004 Versus Last Year's Same Quarter * Earnings per common share
(EPS) for the quarter ended September 30, 2004 amounted to $0.47
per share, an improvement of $0.25 compared to $0.22 for the same
quarter in 2003, which more than doubles EPS for the same quarter
of last year. SAN JUAN, Puerto Rico, Oct. 28 /PRNewswire-FirstCall/
-- Santander BanCorp (NYSE: SBP; LATIBEX: XSBP), reported today its
unaudited financial results for the quarter and nine month period
ended September 30, 2004. The financial results for the third
quarter of 2004 reflect a substantial improvement in net income,
which reached $21.9 million, an 89.5% improvement over net income
of $11.5 million reported during the third quarter of 2003. For the
nine-month period ended September 30, 2004, net income amounted to
$63.1 million, a significant increase of 166.3% over net income of
$23.7 million for the nine months ended September 30, 2003. For the
quarter ended September 30, 2004, net income amounted to $21.9
million or $0.47 per common share compared to net income of $11.5
million or $0.22 per common share(2) for the third quarter of 2003.
This represents a $0.25 per common share increase which more than
doubles earnings over last year's same quarter. Return on Average
Common Equity (ROE) and Return on Average Assets (ROA) were 17.14%
and 1.10%, respectively, for the quarter ended September 30, 2004,
compared to 7.93% and 0.67%, respectively, for the third quarter of
2003. The Efficiency Ratio1 improved 566 basis points to 61.97% for
the third quarter of 2004, compared to 67.63% reported during the
third quarter of 2003. The improvement in the efficiency ratio
during the third quarter of 2004, when compared to the same quarter
of 2003, is a direct result of higher revenues and lower expenses.
Net income for the nine-month period ended September 30, 2004
reached $63.1 million or $1.35 per common share. This represents an
increase of 166.3% over net income for the nine-month period ended
September 30, 2003 of $23.7 million or $0.43(2) per common share.
ROE and ROA were 17.21% and 1.12%, respectively for the nine month
period ended September 30, 2004, an increase of 1,210 basis points
in ROE and 64 basis points in ROA when compared to ROE and ROA of
5.11% and 0.48%, respectively for the nine month period ended
September 30, 2003. The Efficiency Ratio1 for the nine-month period
ended September 30, 2004 also reflected a significant improvement
of 688 basis points reaching 64.65% compared to 71.53% for the
nine-month period ended September 30, 2003. The consolidated
Balance Sheet and Income Statement Data for the quarter and
nine-month period ended September 30, 2003, has been restated to
give retroactive effect to the acquisition of Santander Securities
Corporation by Santander BanCorp on December 30, 2003. The earnings
per share computations for all periods 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 $10.3 million
improvement in net income for the third quarter of 2004 compared to
the same period in 2003 was principally due to an increase of $7.0
million in net interest income, a decrease of $1.9 million in the
provision for loan losses, a $3.5 million decrease in operating
expenses and a decrease in the provision for income tax of $0.9
million. These changes were partially offset by a decrease of $3.0
million in other income due primarily to decreases in gain on sale
of loans and in broker-dealer, asset management and insurance fees.
The increase of $39.4 million or 166.3% in net income for the
nine-month period ended September 30, 2004 compared to the same
period in 2003 was principally due to an increase of $25.1 million
in net interest income, a decrease in the provision for loan losses
of $13.0 million, a decrease in operating expenses of $3.8 million
and a decrease in the provision for income tax of $1.3 million.
These changes were partially offset by a decrease of $3.8 million
in other income due primarily to a decrease in gain on sale of
loans. For the quarter ended September 30, 2004, net interest
income(1) amounted to $61.0 million, an increase of 14.2% compared
to $53.4 million for the third quarter in 2003. The improvement in
net interest income1 was principally due to an increase in average
interest earning assets of $1.1 billion or 17.2% and a decrease of
16 basis points in total cost of funds. For the nine-month period
ended September 30, 2004, net interest income(1) amounted to $177.7
million, an increase of 17.8% compared to $150.8 million for the
same period in 2003. This improvement was due to an increase in
average interest earning assets of $998 million or 16.0% and a
decrease in total cost of funds of 42 basis points. The provision
for loan losses reflected a decrease of $1.9 million or 21.7% from
$9.0 million for the quarter ended September 30, 2003 to $7.0
million for the third quarter of 2004. Furthermore, for the
nine-month period ended September 30, 2004, the reduction in the
provision for loan losses was $13.0 million or 37.3% compared to
the same period in 2003. The reduction in the provision for loan
losses was due to a 9% decrease in non-performing loans, which are
down to $96.8 million as of September 30, 2004 from $106.0 million
as of September 30, 2003. A 26.7% reduction in net charge-offs from
$28.3 million for the nine-months ended September 30, 2003 to $20.7
million for the same period in 2004 also had a favorable impact on
the provision for loan losses. In addition to the improvement in
non-performing loans, the reduction in the provision for loan
losses is due to a significant decrease in the percentage of net
consumer loan charge-offs during the first three quarters of 2004,
resulting in a reduction in the loss ratios used by the Company in
the determination of the provision for loan losses. There was a
decrease in other income of $3.0 million or 9.6% from $31.4 million
for the quarter ended September 30, 2003 to $28.4 million for the
quarter ended September 30, 2004. This reduction was principally
due to decreases of $3.1 million in gain on sale of loans and $2.6
million in broker- dealer, asset management and insurance fees.
These decreases were partially offset by a $2.5 million increase in
gains on sale of securities. For the nine months ended September
30, 2004, other income decreased $3.8 million compared to the same
period in 2003. This decrease was the result of lower gain on sale
of loans of $6.9 million that were only partially offset by
increases of $1.4 million in fee income from the broker-dealer,
asset management and insurance operations, $1.5 million on gain on
sale of securities and $1.0 in bank service fees on deposit
accounts and other gains and losses. The increase in other gains
and losses resulted from the gain on sale of a building during the
first quarter of 2004 and was partially offset by lower trading
gains. For the quarter ended September 30, 2004, the Efficiency
Ratio(1) improved 566 basis points to 61.97%, compared to 67.63%
for the quarter ended September 30, 2003. This improvement was
mainly a result of higher revenues (excluding gains on sales of
securities) and a decrease of $3.5 million in operating expenses.
For the nine-month period ended September 30, 2004, the Efficiency
Ratio(1) improved 688 basis points to 64.65% from 71.53% for the
same period in 2003. This improvement was a result of higher
revenues (excluding gains on sales of securities and a gain on the
sale of a building during the first quarter of 2004) and a decrease
of $3.8 million in operating expenses. Operating expenses decreased
$3.5 million or 6.1% from $57.4 million for the quarter ended
September 30, 2003 to $53.9 million for the quarter ended September
30, 2004. This decrease was due primarily to a decrease in EDP
servicing, amortization and technical services of $3.1 million due
to lower servicing costs, a decrease of $1.0 million in collections
and related legal costs as a result of in-sourcing of the
collections function, a decrease of $0.7 million in repossessed
assets provisions and expenses and a decrease in amortization of
intangibles of $0.5 million. These decreases were partially offset
by increases of $1.6 million in professional services, partly
associated with the implementation of certain provisions of the
Sarbanes-Oxley Act as well as other consulting services, and an
increase of $1.2 million in advertising and promotion consistent
with our strategy to increase market share and grow the volume of
our business. For the nine-month period ended September 30 2004,
there was a decrease of $3.8 million or 2.3% in operating expenses
compared to the same period in 2003. There was an increase in
personnel expenses of $2.8 million due to higher salaries,
in-sourcing of collection services and severance payments,
partially offset by an increase in expenses deferred as loan
origination costs. The increase in personnel costs was offset by a
decrease in other operating expenses of $6.7 million. This decrease
was primarily due to a decrease of $6.2 million or 21% in EDP
servicing, amortization and technical services due to lower
servicing costs. There were also decreases in amortization of
intangibles of $2.8 million, repossessed assets provision and
expenses of $2.0 million and collections and related legal costs of
$2.4 million. These decreases were partially offset by increases in
professional services of $4.0 million, business promotion of $2.2
million and other of $1.4 million. Balance Sheet Total assets as of
September 30, 2004 increased by $0.6 billion or 8.1% to $8.0
billion compared to $7.4 billion as of December 31, 2003 and
reflected an increase of $0.8 billion or 10.4% compared to $7.2
billion in total assets as of September 30, 2003. As of September
30, 2004, there was an increase of $1.1 billion and $1.2 billion in
net loans, including loans held for sale (further explained below)
compared to December 31 and September 30, 2003 balances,
respectively. The increase in net loans at September 30, 2004
compared to December 31, 2003 was partially offset by a decrease in
investment securities of $599.2 million, a decrease of $11.2
million in premises and equipment due to the sale of a building
with a book value of approximately $7.7 million, and normal
depreciation for the period. There was also a decrease of $17.4
million in other assets due to a reduction in accounts receivable
and net deferred tax assets. As a result of management's efforts to
increase market share, the net loan portfolio, including loans held
for sale, reflected a $1.1 billion or 25.5% increase, reaching $5.2
billion at September 30, 2004, compared to the figures reported as
of December 31, 2003. The mortgage loan portfolio grew $946.4
million or 64.8% during the third quarter of 2004 compared to the
December 31, 2003 mortgage loan portfolio. There was a 12.2%
increase in mortgage loan production for the nine month period
ended September 30, 2004 compared to the same period in 2003. The
commercial loan portfolio (including construction loans) and the
consumer loan portfolio also reflected increases of $66.9 million
or 2.9% and $43.7 million or 10.8%, respectively as of September
30, 2004 compared to December 31, 2003. Deposits at September 30,
2004 reflected an increase of $374.0 million or 9.03% compared to
deposits of $4.1 billion as of December 31, 2003, and an increase
of $825.8 million or 22.4% compared to deposits of $3.7 billion as
of September 30, 2003. This increase was also in line with
Company's objective of increasing its market share. Total
borrowings (comprised of federal funds purchased and other
borrowings, securities sold under agreements to repurchase,
commercial paper issued, term and capital notes) increased $168.2
million compared to borrowings at December 31, 2003. Financial
Strength Non-performing loans to total loans as of September 30,
2004 amounted to 1.84%, a 49 basis point improvement over the
reported 2.33% as of December 31, 2003 and a 77 basis point
improvement over the reported 2.61% as of September 30, 2003.
Non-performing loans at September 30, 2004 amounted to $96.8
million, a 1.6% improvement compared to $98.4 million as of
December 31, 2003 and an 8.7% improvement compared to $106.0
million as of September 30, 2003. There had been an improving trend
in this indicator during 2003, which further continued through the
third quarter of 2004. The annualized ratio of net charge-offs to
average loans for the quarter ended September 30, 2004 improved 38
basis points to 0.27% from 0.65% reported for the quarter ended
September 30, 2003. For the third quarter of 2004 there was a
decrease in net charge-offs of $3.2 million compared to the third
quarter of 2003. Net charge-offs for the nine-month period ended
September 30, 2004 decreased $7.5 million, or 26.7%, compared to
the same period in 2003. The annualized ratio of net charge-offs to
average loans for the nine months ended September 30, 2004 improved
35 basis points to 0.60% from 0.95% for the same period in 2003.
The Company is committed and has directed its efforts to continue
improving this ratio. The allowance for loan losses represents
1.34% of total loans as of September 30, 2004, a 33 basis point
reduction over the 1.67% reported as of December 31, 2003. The
allowance for loan losses to total non-performing loans at
September 30, 2004 reached 73.05% compared to 71.74% at December
31, 2003 and 60.78% at September 30, 2003. Excluding non-performing
mortgage loans (for which the Company has historically had a
minimal loss experience) this ratio is 153.8% compared to 152.8%
and 133.5% as of December 31 and September 30, 2003, respectively.
As of September 30, 2004, total capital to risk-adjusted assets
(BIS ratio) reached 10.87% and Tier I capital to risk-adjusted
assets and leverage ratios were 9.32% and 6.13%, respectively.
Customer Financial Assets Under Control Santander BanCorp is a
client-focused organization that seeks to earn the trust of
customers to manage their financial assets. As of September 30,
2004, the Company had over $12.1 billion in Customer Financial
Assets Under Control, which represents a $1.4 billion increase over
balances as of December 31, 2003. 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 On July 9, 2004 the Board of Directors declared a 10% stock
dividend to all shareholders of record as of July 20, 2004. The
common stock dividend was distributed on August 3, 2004. Cash was
paid in lieu of fractional shares. The earnings per share
computations for all periods presented in the accompanying
financial information have been adjusted retroactively to reflect
this stock dividend. During the third quarter of 2004, the
Company's common stock price per share increased from $21.84 (after
adjustment for the stock dividend) to $25.00, representing a $147.4
million increase in aggregate shareholder value. During the third
quarter of 2004, Santander BanCorp declared a cash dividend of 11
cents per common share to its shareholders of record as of
September 10, 2004, payable on October 1, 2004, resulting in an
annualized dividend yield of 1.76%. There were no stock repurchases
during the last three quarters of 2003 and the first three quarters
of 2004 under the Stock Repurchase Program. As of September 30,
2004, 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 and on Latibex (Madrid Stock Exchange). It 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 27
years. 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/. Grupo Santander
(SAN.MC, STD.N) is the largest financial group in Spain and Latin
America, and the second largest bank in the Euro Zone by market
capitalization, as of 12.31.03. Founded in 1857, it has forged
important business initiatives, including a 15-year old alliance
with The Royal Bank of Scotland, ownership of the third largest
banking group in Portugal and a leading consumer finance franchise
in Germany, Italy and seven other European countries. Grupo
Santander maintains a leading position in Latin America, with 4,052
offices in ten countries, serving more than 12 million individual
clients and approximately half a million small and medium sized
companies, managing over $115 billion in business (on &
off-balance sheet). In 2003, Santander recorded $1.49 billion in
net attributable profits in Latin America, an increase of over 14%.
Expected date for reporting 2004 fourth quarter and year-end
financial results Fourth quarter and year-end results - January 27,
2005 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. (2) After
giving retroactive effect for the 10% stock dividend declared on
July 9, 2004. SANTANDER BANCORP CONSOLIDATED BALANCE SHEETS AS OF
SEPTEMBER 30, 2004 AND 2003 AND DECEMBER 31, 2003 (Dollars in
thousands, except per share data) ASSETS As restated (Unaudited)
(Unaudited) (Audited) Variance 09/04- 30-Sep-04 30-Sep-03 31-Dec-03
12/03 CASH AND CASH EQUIVALENTS: Cash and due from banks $153,049
$122,312 $99,183 54.31% Interest bearing deposits 45,452 21,770
15,300 197.07% Federal funds sold and securities purchased under
agreements to resell 339,150 235,700 278,750 21.67% Total cash and
cash equivalents 537,651 379,782 393,233 36.73% INTEREST BEARING
DEPOSITS 50,000 - 10,000 N/A TRADING SECURITIES 13,423 29,499
42,547 -68.45% INVESTMENT SECURITIES AVAILABLE FOR SALE, at fair
value 1,051,852 1,677,482 1,664,311 -36.80% INVESTMENT SECURITIES
HELD TO MATURITY, at amortized cost 846,368 887,169 833,127 1.59%
LOANS HELD FOR SALE, net 283,017 316,666 297,201 -4.77% LOANS, net
4,988,793 3,747,736 3,917,566 27.34% ALLOWANCE FOR LOAN LOSSES
(70,731) (64,425) (70,572) 0.23% PREMISES AND EQUIPMENT, net 49,930
60,639 61,107 -18.29% ACCRUED INTEREST RECEIVABLE 45,354 36,577
36,398 24.61% GOODWILL 34,791 34,791 34,791 0.00% INTANGIBLE ASSETS
5,949 4,881 4,662 27.61% OTHER ASSETS 124,638 98,390 142,050
-12.26% $7,961,035 $7,209,187 $7,366,421 8.07% LIABILITIES AND
STOCKHOLDERS' EQUITY DEPOSITS: Non-interest bearing $699,993
$665,397 $700,413 -0.06% Interest bearing 3,816,200 3,024,956
3,441,815 10.88% Total deposits 4,516,193 3,690,353 4,142,228 9.03%
FEDERAL FUNDS PURCHASED AND OTHER BORROWINGS 722,000 467,000
350,000 106.29% SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
1,301,627 1,921,893 1,808,238 -28.02% COMMERCIAL PAPER ISSUED
599,376 224,807 254,904 135.14% TERM NOTES 124,281 127,401 165,966
-25.12% CAPITAL NOTES 15,925 15,925 15,925 0.00% ACCRUED INTEREST
PAYABLE 23,246 22,933 18,728 24.12% OTHER LIABILITIES 132,150
124,537 129,600 1.97% 7,434,798 6,594,849 6,885,589 7.98%
STOCKHOLDERS' EQUITY: Series A Preferred stock, $25 par value;
10,000,000 shares authorized; 2,610,008 shares issued and
outstanding in September 2003 -- 65,250 -- N/A Common stock, $2.50
par value; 200,000,000 shares authorized; 50,650,058 shares issued
in September 2004 and 46,410,214 shares issued in September and
December 2003; 46,639,104 shares outstanding in September 2004 and
42,398,954 shares outstanding in September and December 2003.
126,626 116,026 116,026 9.14% Capital paid in excess of par value
304,171 211,742 211,742 43.65% Treasury stock at cost, 4,011,260
shares in June 2004, 2003 and December 2003. (67,552) (67,552)
(67,552) 0.00% Accumulated other comprehensive loss, net of taxes
(22,719) (5,867) (19,465) 16.72% Retained earnings- Reserve fund
119,432 116,482 119,432 0.00% Undivided profits 66,279 178,257
120,649 -45.06% Total stockholders' equity 526,237 614,338 480,832
9.44% $7,961,035 $7,209,187 $7,366,421 8.07% SANTANDER BANCORP
CONSOLIDATED STATEMENTS OF INCOME FOR THE NINE MONTH PERIODS AND
THE QUARTERS ENDED SEPTEMBER 30, 2004 AND 2003 (Dollars in
thousands, except per share data) For the nine months ended For the
quarters ended As restated As restated (Unaudited) (Unaudited)
(Unaudited) (Unaudited) September 30, September 30, September 30,
September 30, 2004 2003 2004 2003 INTEREST INCOME: Loans $184,995
$180,153 $66,242 $58,617 Investment securities 76,817 57,274 25,070
22,229 Interest bearing deposits 573 559 338 150 Federal funds sold
and securities purchased under agreements to resell 2,018 1,455 799
499 Total interest income 264,403 239,441 92,449 81,495 INTEREST
EXPENSE: Deposits 42,115 42,923 15,404 12,788 Securities sold under
agreements to repurchase and other borrowings 58,688 57,649 21,081
19,761 Subordinated capital notes 54 395 25 (10) Total interest
expense 100,857 100,967 36,510 32,539 Net interest income 163,546
138,474 55,939 48,956 PROVISION FOR LOAN LOSSES 21,770 34,745 7,020
8,965 Net interest income after provision for loan losses 141,776
103,729 48,919 39,991 OTHER INCOME: Bank service charges, fees and
other 28,949 29,641 9,725 9,724 Broker/dealer, asset management and
insurance fees 38,176 36,769 12,911 15,551 Gain on sale of
securities 11,465 10,012 2,462 4 Gain on sale of mortgage servicing
rights 284 327 88 142 Gain on sale of loans (84) 6,845 (240) 2,833
Gain on sale of building 2,754 -- -- -- Other income 6,463 8,205
3,452 3,175 Total other income 88,007 91,799 28,398 31,429
OPERATING EXPENSES: Salaries and employee benefits 69,037 66,193
22,808 22,982 Occupancy costs 10,109 10,117 3,439 3,495 Equipment
expenses 5,317 5,631 1,715 1,861 EDP servicing, amortization and
technical expenses 23,219 29,375 7,121 10,233 Communication
expenses 6,792 6,276 2,202 2,165 Business promotion 7,140 4,911
2,828 1,668 Other taxes 6,574 7,525 2,049 2,368 Other operating
expenses 34,390 36,377 11,689 12,591 Total other operating expenses
162,578 166,405 53,851 57,363 Income before provision for income
tax 67,205 29,123 23,466 14,057 PROVISION FOR INCOME TAX 4,075
5,419 1,597 2,514 NET INCOME 63,130 23,704 21,869 11,543 DIVIDENDS
TO PREFERRED SHAREHOLDERS -- 3,426 -- 1,142 NET INCOME AVAILABLE TO
COMMON SHAREHOLDERS 63,130 20,278 21,869 10,401 EARNINGS PER COMMON
SHARE* $1.35 $0.43 $0.47 $0.22 * After giving retroactive effect to
the stock dividend declared on July 9, 2004 SANTANDER BANCORP
30-Sep 30-Sep-03 2004 2004 2004 As restated Year to Third Second
Year to Third SELECTED RATIOS Date Quarter Quarter Date Quarter Net
interest margin (1) 3.28% 3.19% 3.24% 3.23% 3.27% Return on average
assets (2) 1.12% 1.10% 0.86% 0.48% 0.67% Return on average common
equity (2) 17.21% 17.14% 13.80% 5.11% 7.93% Efficiency Ratio (1,3)
64.65% 61.97% 67.49% 71.53% 67.63% Non interest income to revenues
24.97% 23.50% 21.14% 27.71% 27.83% Capital: Total capital to
risk-adjusted assets -- 10.87% 10.64% -- 13.16% Tier I capital to
risk-adjusted assets -- 9.32% 9.09% -- 11.90% Leverage ratio --
6.13% 6.17% -- 7.86% Non-performing loans to total loans -- 1.84%
1.95% -- 2.61% Non-performing loans plus accruing loans past-due 90
days or more to loans -- 1.89% 2.03% -- 2.69% Allowance for loan
losses to non-performing loans -- 73.05% 70.77% -- 60.78% Allowance
for loans losses to period-end loans -- 1.34% 1.38% -- 1.59% OTHER
SELECTED FINANCIAL DATA 9/30/2004 9/30/2003 12/31/2003 (dollars in
millions) Customer Financial Assets Under Control: Bank deposits
(excluding brokered deposits) $4,116.7 $3,393.2 $3,782.8
Broker-dealer customer accounts 4,393.3 3,505.4 3,727.4 Mutual fund
and assets managed 2,308.0 1,761.0 1,859.0 Trust, institutional and
private accounts assets under management 1,247.0 1,207.0 1,300.6
Total $12,065.0 $9,866.6 $10,669.7 (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 (and gain on
sale of building for 1Q04). SANTANDER BANCORP SELECTED CONSOLIDATED
FINANCIAL INFORMATION: (DOLLARS IN THOUSANDS) For the Quarters
Ended As restated Sept. 30, Sept. 30, June 30, 3Q04/3Q03 3Q04/2Q04
2004 2003 2004 Variation Variation Interest Income $92,449 $81,495
$86,126 13.4% 7.3% Tax equivalent adjustment 5,025 4,440 4,375
13.2% 14.9% Interest income on a tax equivalent basis 97,474 85,935
90,501 13.4% 7.7% Interest expense 36,510 32,539 32,496 12.2% 12.4%
Net interest income on a tax equivalent basis 60,964 53,396 58,005
14.2% 5.1% Provision for loan losses 7,020 8,965 6,000 -21.7% 17.0%
Net interest income on a tax equivalent basis after provision
53,944 44,431 52,005 21.4% 3.7% Other operating income 26,176
28,592 23,037 -8.4% 13.6% Gain on sale of securities 2,462 4 100
61450.0% 2362.0% Gain on sale of loans (240) 2,833 (55) -108.5%
336.4% Gain on sale of building -- -- -- N/A N/A Other operating
expenses 53,851 57,363 54,658 -6.1% -1.5% Income on a tax
equivalent basis before income taxes 28,491 18,497 20,429 54.0%
39.5% Provision (credit) for income taxes 1,597 2,514 8 -36.5%
19862.5% Tax equivalent adjustment 5,025 4,440 4,375 13.2% 14.9%
NET INCOME (LOSS) $21,869 $11,543 $16,046 89.5% 36.3% SELECTED
RATIOS: Per share data (1): Earnings (loss) per common share $0.47
$0.22 $0.34 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:
Preferred Stock* $-- $0.44 $-- Common Stock $0.11 $0.11 $0.11
Nine-month Periods ended September 30, As restated 2004 2003
Variation Interest Income $264,403 $239,441 10.4% Tax equivalent
adjustment 14,141 12,366 14.4% Interest income on a tax equivalent
basis 278,544 251,807 10.6% Interest expense 100,857 100,967 -0.1%
Net interest income on a tax equivalent basis 177,687 150,840 17.8%
Provision for loan losses 21,770 34,745 -37.3% Net interest income
on a tax equivalent basis after provision 155,917 116,095 34.3%
Other operating income 73,872 74,942 -1.4% Gain on sale of
securities 11,465 10,012 -14.5% Gain on sale of loans (84) 6,845
101.2% Gain on sale of building 2,754 -- N/A Other operating
expenses 162,578 166,405 -2.3% Income on a tax equivalent basis
before income taxes 81,346 41,489 96.1% Provision (credit) for
income taxes 4,075 5,419 -24.8% Tax equivalent adjustment 14,141
12,366 14.4% NET INCOME (LOSS) $63,130 $23,704 166.3% SELECTED
RATIOS: Per share data (1): Earnings (loss) per common share $1.35
$0.43 Average common shares outstanding ** 46,639,104 46,668,710
Common shares outstanding at end of period ** 46,639,104 46,639,104
Cash Dividends per Share: Preferred Stock* $-- $1.31 Common Stock
$0.33 $0.33 (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. * Including redemption premium in Dec. 2003
** After giving retroactive effect to the stock dividend declared
on July 9, 2004 DATASOURCE: Santander BanCorp CONTACT: Maria
Calero, +1-787-751-6640, or Evelyn Vega, +1-787-777-4546, for
Santander BanCorp Web site: http://www.santandernet.com/
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