Santander Bancorp 8-K Santander Bancorp Doubles Earnings for 2004 Versus 2003

SANTANDER BANCORP
UNAUDITED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2004 AND 2003
(Dollars in thousands, except per share data)
ASSETS
					Variance
		31-Dec-04		31-Dec-03	12/04 - 12/03
CASH AND CASH EQUIVALENTS:
Cash and due from banks	$	110,148	$	99,183	11.06	%
Interest bearing deposits		42,612		15,300	175.51	%
Federal funds sold and securities purchased under agreements to resell		326,650		278,750	17.18	%
Total cash and cash equivalents		479,410		393,233	21.91	%
INTEREST BEARING DEPOSITS		50,000		10,000	400.00	%
TRADING SECURITIES		34,184		42,547	(19.66)	%
INVESTMENT SECURITIES AVAILABLE FOR SALE, at fair value		1,138,171		1,664,311	(31.61)	%
INVESTMENT SECURITIES HELD TO MATURITY, at amortized cost		813,788		818,127	(0.53)	%
OTHER INVESTMENT SECURITIES, at amortized cost		37,500		15,000	150.00	%
LOANS HELD FOR SALE, net		271,596		297,201	(8.62)	%
LOANS, net		5,311,936		3,917,566	35.59	%
ALLOWANCE FOR LOAN LOSSES		(69,177)		(69,693)	(0.74)	%
PREMISES AND EQUIPMENT, net		52,854		61,107	(13.51)	%
ACCRUED INTEREST RECEIVABLE		44,682		36,398	22.76	%
GOODWILL		34,791		34,791	0.00	%
INTANGIBLE ASSETS		8,003		6,362	71.66	%
OTHER ASSETS		118,076		140,350	(16.77)	%
	$	8,325,814	$	7,367,300	13.01	%
LIABILITIES AND STOCKHOLDERS' EQUITY
DEPOSITS:
Non-interest bearing	$	744,019	$	700,413	6.23	%
Interest bearing		4,004,120		3,441,815	16.34	%
Total deposits		4,748,139		4,142,228	14.63	%
FEDERAL FUNDS PURCHASED AND OTHER BORROWINGS		780,334		350,000	122.95	%
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE		1,349,444		1,808,238	(25.37)	%
COMMERCIAL PAPER ISSUED		629,544		254,904	146.97	%
TERM NOTES		31,457		165,966	(81.05)	%
CAPITAL NOTES		72,588		15,925	355.81	%
ACCRUED INTEREST PAYABLE		22,666		18,728	21.03	%
OTHER LIABILITIES		151,605		130,479	16.19	%
		7,785,777		6,886,468	13.06	%
STOCKHOLDERS' EQUITY:
Series A Preferred stock, $25 par value; 10,000,000 shares authorized, none issued or outstanding		-		-	-
Common stock, $2.50 par value; 200,000,000 shares authorized; 50,650,364 shares issued in
December 2004 and 46,410,214 shares issued in December 2003; 46,639,104 shares
outstanding in December 2004 and 42,398,954 shares outstanding in December 2003.		126,626		116,026	9.14	%
Capital paid in excess of par value		304,171		211,742	43.65	%
Treasury stock at cost, 4,011,260 shares in December 2004 and 2003.		(67,552)		(67,552)	0.00	%
Accumulated other comprehensive loss, net of taxes		(22,784)		(19,465)	17.05	%
Retained earnings-
Reserve fund		127,086		119,432	6.41	%
Undivided profits		72,490		120,649	(39.92)	%
Total stockholders' equity		540,037		480,832	12.31	%
	$	8,325,814	$	7,367,300	13.01	%

SANTANDER BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS AND THE QUARTERS ENDED DECEMBER 31, 2004 AND 2003
(Dollars in thousands, except per share data)
		For the years ended				For the quarters ended
		December 31,		December 31,		December 31,		December 31,
		2004		2003		2004		2003
INTEREST INCOME:
Loans	$	257,852	$	237,712	$	72,857	$	57,560
Investment securities		97,901		85,215		21,084		27,940
Interest bearing deposits		1,054		664		480		105
Federal funds sold and securities purchased under
agreements to resell		3,123		1,990		1,106		535
Total interest income		359,930		325,581		95,527		86,140
INTEREST EXPENSE:
Deposits		60,279		56,030		18,164		13,107
Securities sold under agreements to repurchase
and other borrowings		79,901		75,896		21,213		18,247
Subordinated capital notes		582		425		528		30
Total interest expense		140,762		132,351		39,905		31,384
Net interest income		219,168		193,230		55,622		54,756
PROVISION FOR LOAN LOSSES		26,270		49,745		4,500		15,000
Net interest income after provision for loan losses		192,898		143,485		51,122		39,756
OTHER INCOME:
Bank service charges, fees and other		38,977		38,990		10,027		9,349
Broker/dealer, asset management and insurance fees		51,113		49,005		12,936		12,236
Gain on sale of securities		11,475		10,790		10		779
Gain on sale of mortgage servicing rights		400		457		116		131
Gain on sale of loans		431		9,829		515		2,982
Gain on sale of building		2,754		-		-		-
Other income		12,089		10,348		5,628		2,141
Total other income		117,239		119,419		29,232		27,618
OTHER OPERATING EXPENSES:
Salaries and employee benefits		91,582		89,394		22,544		23,201
Occupancy costs		13,959		13,534		3,850		3,416
Equipment expenses		6,946		7,291		1,629		1,674
EDP servicing, amortization and technical expenses		31,291		40,502		8,072		11,110
Communication expenses		8,976		8,612		2,183		2,336
Business promotion		10,435		6,760		3,294		1,849
Other taxes		8,584		9,811		2,010		2,286
Other operating expenses		45,760		47,840		11,372		11,464
Total other operating expenses		217,533		223,744		54,954		57,336
Income before provision (benefit) for income tax		92,604		39,160		25,400		10,038
PROVISION (BENEFIT) FOR INCOME TAX		8,145		(285)		4,070		(5,704)
NET INCOME		84,459		39,445		21,330		15,742
DIVIDENDS TO PREFERRED SHAREHOLDERS		-		7,114		-		3,688
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS		84,459		32,331		21,330		12,054
EARNINGS PER COMMON SHARE*	$	1.81	$	0.69	$	0.46	$	0.26
*After giving retroactive effect to the stock dividend declared on July 9, 2004

SANTANDER BANCORP
	Dec. 2004	2004	2004	Dec. 2003
	Year to	Fourth	Third	Year to	Fourth
SELECTED RATIOS	Date	Quarter	Quarter	Date	Quarter
Net interest margin (1)	3.27%	3.24%	3.19%	3.30%	3.48%
Return on average assets (2)	1.10%	1.08%	1.10%	0.59%	0.87%
Return on average common equity (2)	16.90%	16.04%	17.14%	6.08%	8.89%
Efficiency Ratio (1,3)	63.54%	60.48%	61.97%	70.05%	66.07%
Non interest income to revenues	24.57%	23.43%	23.50%	26.84%	24.28%
Capital:
Total capital to risk-adjusted assets	-	11.90%	10.87%	-	10.41%
Tier I capital to risk-adjusted assets	-	9.27%	9.32%	-	8.84%
Leverage ratio	-	6.36%	6.13%	-	6.04%
Non-performing loans to total loans	-	1.57%	1.84%	-	2.33%
Non-performing loans plus accruing loans
past-due 90 days or more to loans	-	1.63%	1.89%	-	2.39%
Allowance for loan losses to non-
performing loans	-	79.05%	73.05%	-	70.85%
Allowance for loans losses to period-
end loans	-	1.24%	1.34%	-	1.65%
OTHER SELECTED FINANCIAL DATA		12/31/04	12/31/03
		(dollars in millions)
Customer Financial Assets Under Control:
Bank deposits (excluding brokered deposits)		$ 4,275.4	$ 3,782.8
Broker-dealer customer accounts		4,543.3	3,727.4
Mutual fund and assets managed		2,640.0	1,859.0
Trust, institutional and private accounts assets under management		1,369.0	1,300.6
Total		$ 12,827.7	$ 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					Years ended December 31,
	Dec. 31,	Dec. 31,	Sept. 30,	4Q04/4Q03	4Q04/3Q04
	2004	2003	2004	Variation	Variation	2004	2003	Variation
Interest Income	$ 95,527	$ 86,140	$ 92,449	10.9%	3.3%	$ 359,930	$ 325,581	10.6%
Tax equivalent adjustment	6,022	5,184	5,025	16.2%	19.8%	20,162	17,550	14.9%
Interest income on a tax equivalent basis	101,549	91,324	97,474	11.2%	4.2%	380,092	343,131	10.8%
Interest expense	39,905	31,384	36,510	27.2%	9.3%	140,762	132,351	6.4%
Net interest income on a tax equivalent basis	61,644	59,940	60,964	2.8%	1.1%	239,330	210,780	13.5%
Provision for loan losses	4,500	15,000	7,020	(70.0)%	(35.9)%	26,270	49,745	(47.2)%
Net interest income on a tax equivalent basis after provision	57,144	44,940	53,944	27.2%	5.9%	213,060	161,035	32.3%
Other operating income	28,707	23,857	26,176	20.3%	9.7%	102,579	98,800	3.8%
Gain on sale of securities	10	779	2,462	(98.7)%	(99.6)%	11,475	10,790	(6.3)%
Gain on sale of loans	515	2,982	(240)	(82.7)%	(314.6)%	431	9,829	95.6%
Gain on sale of building	-	-	-	N/A	N/A	2,754	-	N/A
Other operating expenses	54,954	57,336	53,851	(4.2)%	2.0%	217,533	223,744	(2.8)%
Income on a tax equivalent basis before income taxes	31,422	15,222	28,491	106.4%	10.3%	112,766	56,710	98.8%
Provision (credit) for income taxes	4,070	(5,704)	1,597	(171.4)%	154.9%	8,145	(285)	(2957.9)%
Tax equivalent adjustment	6,022	5,184	5,025	16.2%	19.8%	20,162	17,550	14.9%
NET INCOME (LOSS)	$ 21,330	$ 15,742	$ 21,869	35.5%	(2.5)%	$ 84,459	$ 39,445	114.1%
SELECTED RATIOS:
Per share data (1):
Earnings (loss) per common share	$ 0.46	$ 0.26	$ 0.34			$ 1.81	$ 0.69
Average common shares
outstanding **	46,639,104	46,639,104	46,639,104			46,639,104	46,661,248
Common shares outstanding
at end of period **	46,639,104	46,639,104	46,639,104			46,639,104	46,639,104
Cash Dividends per Share:
Preferred Stock*	$ -	$ 0.41	$ -			$ -	$ 1.73
Common Stock	$ 0.16	$ 0.11	$ 0.11			$ 0.49	$ 0.44
(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
**After giving retroactive effect to the stock dividend declared on July 9, 2004