Santander Bancorp 8-K Other events

SANTANDER BANCORP
UNAUDITEDCONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2004 AND 2003 AND DECEMBER 31, 2003
(Dollars in thousands, except per share data)
ASSETS
				As restated			Variance
		30-Jun-04		30-Jun-03		31-Dec-03	06/04-12/03
CASH AND CASH EQUIVALENTS:
Cash and due from banks	$	157,982	$	132,873	$	99,183	59.28%
Interest bearing deposits		14,233		25,302		15,300	-6.97%
Federal funds sold and securities purchased under agreements to resell		241,150		255,700		278,750	-13.49%
Total cash and cash equivalents		413,365		413,875		393,233	5.12%
INTEREST BEARING DEPOSITS		300		-		10,000	N/A
TRADING SECURITIES		42,945		21,620		42,547	0.94%
INVESTMENT SECURITIES AVAILABLE FOR SALE, at fair value		1,554,685		1,064,435		1,664,311	-6.59%
INVESTMENT SECURITIES HELD TO MATURITY, at amortized cost		845,377		902,544		833,127	1.47%
LOANS HELD FOR SALE, net		291,068		381,583		297,201	-2.06%
LOANS, net		4,622,433		3,641,749		3,917,566	17.99%
ALLOWANCE FOR LOAN LOSSES		(67,936)		(61,986)		(70,572)	-3.74%
PREMISES AND EQUIPMENT, net		50,283		61,508		61,107	-17.71%
ACCRUED INTEREST RECEIVABLE		36,943		32,175		36,398	1.50%
GOODWILL		34,791		34,791		34,791	0.00%
INTANGIBLE ASSETS		4,251		5,662		4,662	-8.82%
OTHER ASSETS		122,589		132,745		142,050	-13.70%
	$	7,951,094	$	6,630,701	$	7,366,421	7.94%
LIABILITIES AND STOCKHOLDERS' EQUITY
DEPOSITS:
Non-interest bearing	$	697,319	$	686,445	$	700,413	-0.44%
Interest bearing		3,704,886		3,077,729		3,441,815	7.64%
Total deposits		4,402,205		3,764,174		4,142,228	6.28%
FEDERAL FUNDS PURCHASED AND OTHER BORROWINGS		427,000		392,320		350,000	22.00%
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE		1,669,033		1,287,087		1,808,238	-7.70%
COMMERCIAL PAPER ISSUED		574,636		174,775		254,904	125.43%
TERM NOTES		174,113		258,036		165,966	4.91%
CAPITAL NOTES		15,925		3,925		15,925	0.00%
ACCRUED INTEREST PAYABLE		18,867		20,417		18,728	0.74%
OTHER LIABILITIES		177,520		128,736		129,600	36.98%
		7,459,299		6,029,470		6,885,589	8.33%
STOCKHOLDERS' EQUITY:
Series A Preferred stock, $25 par value; 10,000,000 shares authorized; 2,610,008 shares issued
and outstanding in June 2003		-		65,250		-	N/A
Common stock, $2.50 par value; 200,000,000 shares authorized; 46,410,214 shares issued;
42,398,954 shares outstanding in June 2004, 2003 and December 2003.		116,026		116,026		116,026	0.00%
Capital paid in excess of par value		211,742		211,742		211,742	0.00%
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		(40,428)		(13,239)		(19,465)	107.70%
Retained earnings-
Reserve fund		119,432		116,482		119,432	0.00%
Undivided profits		152,575		172,522		120,649	26.46%
Total stockholders' equity		491,795		601,231		480,832	2.28%
	$	7,951,094	$	6,630,701	$	7,366,421	7.94%

SANTANDER BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTH PERIODS AND THE QUARTERS ENDED JUNE 30, 2004 AND 2003
(Dollars in thousands, except per share data)
		For the six months ended				For the quarters ended
				As restated				As restated
		June 30,		June 30,		June 30,		June 30,
		2004		2003		2004		2003
INTEREST INCOME:
Loans	$	118,753	$	121,535.00	$	60,853.00	$	61,274.00
Investment securities		51,747		35,045		24,532		16,892
Interest bearing deposits		234		410		102		192
Federal funds sold and securities purchased under
agreements to resell		1,219		956		639		566
Total interest income		171,953		157,946		86,126		78,924
INTEREST EXPENSE:
Deposits		26,711		30,135		13,531		14,069
Securities sold under agreements to repurchase
and other borrowings		37,607		37,888		18,958		18,778
Subordinated capital notes		28		405		7		186
Total interest expense		64,346		68,428		32,496		33,033
Net interest income		107,607		89,518		53,630		45,891
PROVISION FOR LOAN LOSSES		14,750		25,780		6,000		13,715
Net interest income after provision for loan losses		92,857		63,738		47,630		32,176
OTHER INCOME:
Bank service charges, fees and other		19,224		19,916		9,579		9,685
Broker/dealer, asset management and insurance fees		25,265		21,218		12,814		9,874
Gain on sale of securities		9,003		10,008		100		5,339
Gain on sale of mortgage servicing rights		196		185		105		60
Gain(loss) on sale of loans		157		4,013		(55)		3,723
Gain on sale of building		2,754		-		-		-
Other income		3,009		5,031		539		3,080
Total other income		59,608		60,371		23,082		31,761
OTHER OPERATING EXPENSES:
Salaries and employee benefits		46,229		43,211		22,680		21,386
Occupancy costs		6,670		6,622		3,270		3,346
Equipment expenses		3,602		3,770		1,838		1,915
EDP servicing, amortization and technical expenses		16,097		19,142		7,466		10,353
Communication expenses		4,590		4,110		2,482		2,144
Business promotion		4,312		3,243		2,632		1,217
Other taxes		4,525		5,157		2,251		2,588
Other operating expenses		22,702		23,788		12,039		11,713
Total other operating expenses		108,727		109,043		54,658		54,662
Income before provision for income tax		43,738		15,066		16,054		9,275
PROVISION FOR INCOME TAX		2,477		2,905		8		2,253
NET INCOME		41,261		12,161		16,046		7,022
DIVIDENDS TO PREFERRED SHAREHOLDERS		-		2,284		-		1,142
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS		41,261		9,877		16,046		5,880
EARNINGS PER COMMON SHARE*	$	0.88	$	0.21	$	0.34	$	0.13

SANTANDER BANCORP
	30-Jun			30-Jun-03
	2004	2004	2004	As restated
	Year to	Second	First	Year to	Second
SELECTED RATIOS	Date	Quarter	Quarter	Date	Quarter
Net interest margin (1)	3.33%	3.24%	3.42%	3.22%	3.26%
Return on average assets (2)	1.12%	0.86%	1.40%	0.38%	0.44%
Return on average common equity (2)	17.35%	13.80%	21.01%	3.72%	4.42%
Efficiency Ratio (1,3)	66.07%	67.49%	67.71%	73.77%	72.07%
Non interest income to revenues	25.74%	21.14%	29.95%	27.65%	28.69%
Capital:
Total capital to risk-adjusted assets	-	10.64%	10.97%	-	13.16%
Tier I capital to risk-adjusted assets	-	9.09%	9.39%	-	11.91%
Leverage ratio	-	6.17%	6.33%	-	8.40%
Non-performing loans to total loans	-	1.95%	2.11%	-	2.67%
Non-performing loans plus accruing loans
past-due 90 days or more to loans	-	2.03%	2.18%	-	2.78%
Allowance for loan losses to non-
performing loans	-	70.77%	77.74%	-	57.64%
Allowance for loans losses to period-
end loans	-	1.38%	1.64%	-	1.54%

OTHER SELECTED FINANCIAL DATA		6/30/04		6/30/03		12/31/03
		(dollars in millions)
Customer Financial Assets Under Control:
Bank deposits (excluding brokered deposits)	$	4,016.6	$	3,536.0	$	3,782.8
Broker-dealer customer accounts		4,188.1		3,365.2		3,727.4
Mutual fund and assets managed		2,085.0		1,507.5		1,859.0
Trust, institutional and private accounts assets under management		1,208.0		908.7		1,300.6
Total	$	11,497.7	$	9,317.4	$	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)
		Quarters Ended								Six-month Periods ended June 30,
				As restated							As restated
		June 30,		June 30,		Mar. 31,	2Q04/2Q03	2Q04/1Q04
		2004		2003		2004	Variation	Variation		2004		2003	Variation
Interest Income	$	86,126	$	78,924	$	85,827	9.1%	0.3%	$	171,953	$	157,946	8.9%
Tax equivalent adjustment		4,375		3,535		4,740	23.8%	-7.7%		9,115		7,926	15.0%
Interest income on a tax equivalent basis		90,501		82,459		90,567	9.8%	-0.1%		181,068		165,872	9.2%
Interest expense		32,496		33,033		31,851	-1.6%	2.0%		64,346		68,428	-6.0%
Net interest income on a tax equivalent basis		58,005		49,426		58,716	17.4%	-1.2%		116,722		97,444	19.8%
Provision for loan losses		6,000		13,715		8,750	-56.3%	-31.4%		14,750		25,780	-42.8%
Net interest income on a tax equivalent basis after provision		52,005		35,711		49,966	45.6%	4.1%		101,972		71,664	42.3%
Other operating income		23,037		22,699		24,763	1.5%	-7.0%		47,694		46,350	2.9%
Gain on sale of securities		100		5,339		8,903	-98.1%	-98.9%		9,003		10,008	10.0%
Gain on sale of loans		(55)		3,723		212	-101.5%	-125.9%		157		4,013	96.1%
Gain on sale of building		-		-		2,754	N/A	-100.0%		2,754		-	N/A
Other operating expenses		54,658		54,662		54,174	0.0%	0.9%		108,727		109,043	-0.3%
Income on a tax equivalent basis before income taxes		20,429		12,810		32,424	59.5%	-37.0%		52,853		22,992	129.9%
Provision (credit) for income taxes		8		2,253		2,469	-99.6%	-99.7%		2,477		2,905	-14.7%
Tax equivalent adjustment		4,375		3,535		4,740	23.8%	-7.7%		9,115		7,926	15.0%
NET INCOME (LOSS)	$	16,046	$	7,022	$	25,215	128.5%	-36.4%	$	41,261	$	12,161	239.3%

SELECTED RATIOS:
	Quarters Ended						Six-month Periods ended June 30,
				As restated
		June 30,		June 30,		Mar. 31,				As restated
		2004		2003		2004		2004		2003
Per share data (1):
Earnings (loss) per common share	$	0.34	$	0.13	$	0.54	$	0.88	$	0.21
Average common shares
outstanding **		46,638,849		46,638,849		46,638,849		46,638,849		46,683,594
Common shares outstanding
at end of period **		46,638,849		46,638,849		46,638,849		46,638,849		46,638,849
Cash Dividends per Share:
Preferred Stock*	$	-	$	0	$	-	$	-	$	0.87
Common Stock	$	0.11	$	0.11	$	0.11	$	0.22	$	0.22
(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