Santander Bancorp 8-K Santander Bancorp Reports Earnings

SANTANDER BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
AS OF MARCH 31, 2005 AND 2004 AND DECEMBER 31, 2004
(Dollars in thousands, except share data)
ASSETS
								Variance
		31-Mar-05		31-Mar-04		31-Dec-04		03/05-12/04
CASH AND CASH EQUIVALENTS:
Cash and due from banks	$	131,698	$	131,001	$	110,148	$	19.56%
Interest bearing deposits		25,066		51,671		42,612		-41.18%
Federal funds sold and securities purchased under agreements to resell		327,041		295,725		326,650		0.12%
Total cash and cash equivalents		483,805		478,397		479,410		0.92%
INTEREST BEARING DEPOSITS		51,090		10,000		50,000		2.18%
TRADING SECURITIES		38,364		57,808		34,184		12.23%
INVESTMENT SECURITIES AVAILABLE FOR SALE, at fair value		1,811,147		1,347,181		1,978,132		-8.44%
INVESTMENT SECURITIES HELD TO MATURITY, at amortized cost		-		832,627		-		N/A
OTHER INVESTMENT SECURITIES, at amortized cost		37,500		-		37,500		0.00%
LOANS HELD FOR SALE, net		247,003		294,874		271,596		-9.05%
LOANS, net		5,541,819		4,147,714		5,311,936		4.33%
ALLOWANCE FOR LOAN LOSSES		(69,205)		(71,689)		(69,177)		0.04%
PREMISES AND EQUIPMENT, net		53,102		51,747		52,854		0.47%
ACCRUED INTEREST RECEIVABLE		45,335		36,472		44,682		1.46%
GOODWILL		34,791		34,791		34,791		0.00%
INTANGIBLE ASSETS		8,782		4,454		8,003		9.73%
OTHER ASSETS		134,414		178,587		107,869		24.61%
	$	8,417,947	$	7,402,963	$	8,341,780		0.91%
LIABILITIES AND STOCKHOLDERS' EQUITY
DEPOSITS:
Non-interest bearing	$	736,600	$	704,974	$	744,019		-1.00%
Interest bearing		4,565,231		3,443,773		4,004,120		14.01%
Total deposits		5,301,831		4,148,747		4,748,139		11.66%
FEDERAL FUNDS PURCHASED AND OTHER BORROWINGS		730,644		315,000		780,334		-6.37%
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE		1,119,442		1,686,090		1,349,444		-17.04%
COMMERCIAL PAPER ISSUED		379,813		374,753		629,544		-39.69%
TERM NOTES		31,560		180,750		31,457		0.33%
CAPITAL NOTES		72,133		15,925		72,588		-0.63%
ACCRUED INTEREST PAYABLE		30,620		23,884		22,666		35.09%
OTHER LIABILITIES		206,958		149,490		151,605		36.51%
		7,873,001		6,894,639		7,785,777		1.12%
STOCKHOLDERS' EQUITY:
Series A Preferred stock, $25 par value; 10,000,000 shares authorized, none issued and outstanding		-		-		-		N/A
Common stock, $2.50 par value; 200,000,000 shares authorized; 50,650,364 shares issued in
March 2005 and December 2004 and 46,410,214 shares issued in March 2004; 46,639,104 shares
outstanding in March 2005 and December 2004 and 42,398,954 shares outstanding in March 2004.		126,626		116,026		126,626		0.00%
Capital paid in excess of par value		304,171		211,742		304,171		0.00%
Treasury stock at cost, 4,011,260 shares in March 2005, 2004 and December 2004.		(67,552)		(67,552)		(67,552)		0.00%
Accumulated other comprehensive loss, net of taxes		(35,921)		(12,521)		(6,818)		426.86%
Retained earnings-
Reserve fund		127,086		119,432		127,086		0.00%
Undivided profits		90,536		141,197		72,490		24.89%
Total stockholders' equity		544,946		508,324		556,003		-1.99%
	$	8,417,947	$	7,402,963	$	8,341,780		0.91%

SANTANDER BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE QUARTERS ENDED MARCH 31, 2005 AND 2004
(Dollars in thousands, except per share data)
		For the quarters ended
		March 31,		March 31,
		2005		2004
INTEREST INCOME:
Loans	$	76,735	$	57,900
Investment securities		22,457		27,215
Interest bearing deposits		210		132
Federal funds sold and securities purchased under
agreements to resell		1,348		580
Total interest income		100,750		85,827
INTEREST EXPENSE:
Deposits		22,281		13,180
Securities sold under agreements to repurchase
and other borrowings		22,398		18,649
Subordinated capital notes		601		22
Total interest expense		45,280		31,851
Net interest income		55,470		53,976
PROVISION FOR LOAN LOSSES		6,700		8,750
Net interest income after provision for loan losses		48,770		45,226
OTHER INCOME:
Bank service charges, fees and other		10,196		9,645
Broker/dealer, asset management and insurance fees		12,572		12,451
Gain on sale of securities		16,960		8,903
Loss on extinguishment of debt		(6,727)		-
Gain on sale of mortgage servicing rights		43		91
Gain on sale of loans		1,081		212
Gain on sale of building		-		2,754
Other income		4,963		2,471
Total other income		39,088		36,527
OTHER OPERATING EXPENSES:
Salaries and employee benefits		24,169		23,549
Occupancy costs		4,024		3,400
Equipment expenses		1,476		1,764
EDP servicing, amortization and technical expenses		7,233		8,631
Communication expenses		2,016		2,109
Business promotion		2,362		1,680
Other taxes		2,101		2,275
Other		12,010		10,661
Total other operating expenses		55,391		54,069
Income before provision for income tax		32,467		27,684
PROVISION FOR INCOME TAX		6,958		2,469
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	25,509	$	25,215
EARNINGS PER COMMON SHARE*	$	0.55	$	0.54
*After giving retroactive effect to the stock dividend declared on July 9, 2004

SANTANDER BANCORP AND SUBSIDIARIES
	QTD	QTD	2004
		As restated
	March 31,	March 31,		Fourth
SELECTED RATIOS	2005	2004	Year-end	Quarter
Net interest margin (1)	3.08%	3.42%	3.27%	3.24%
Return on average assets (2)	1.25%	1.40%	1.10%	1.08%
Return on average common equity (2)	18.48%	21.01%	16.90%	16.04%
Efficiency Ratio (1,3)	62.34%	64.69%	63.54%	60.48%
Non-interest income to revenues	27.95%	29.85%	24.57%	23.43%
Capital:
Total capital to risk-adjusted assets	11.97%	11.02%	-	12.09%
Tier I capital to risk-adjusted assets	9.40%	9.45%	-	9.46%
Leverage ratio	6.18%	6.33%	-	6.49%
Non-performing loans to total loans	1.47%	2.11%	-	1.57%
Non-performing loans plus accruing loans
past-due 90 days or more to loans	1.54%	2.18%	-	1.63%
Allowance for loan losses to non-
performing loans	81.55%	77.74%	-	79.05%
Allowance for loans losses to period-
end loans	1.20%	1.61%	-	1.24%
OTHER SELECTED FINANCIAL DATA	3/31/05	3/31/04	12/31/04
	(dollars in millions)
Customer Financial Assets Under Control:
Bank deposits (excluding brokered deposits)	$ 4,402.4	$ 3,788.7	$ 4,275.4
Broker-dealer customer accounts	4,735.0	4,053.1	4,543.3
Mutual funds and assets managed	2,671.0	2,065.8	2,640.0
Trust, institutional and private accounts assets under management	1,358.0	1,326.4	1,369.0
Total	$ 13,166.4	$ 11,234.0	$ 12,827.7
(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).

SELECTED CONSOLIDATED FINANCIAL INFORMATION:
(DOLLARS IN THOUSANDS)
	For the Quarters Ended
	March 31,	March 31,	Dec. 31,	1Q05/1Q04	1Q05/4Q04
	2005	2004	2004	Variance	Variance
Interest Income	$ 100,750	$ 85,827	$ 95,527	17.4%	5.5%
Tax equivalent adjustment	4,534	4,740	6,022	-4.3%	-24.7%
Interest income on a tax equivalent basis	105,284	90,567	101,549	16.2%	3.7%
Interest expense	45,280	31,851	39,905	42.2%	13.5%
Net interest income on a tax equivalent basis	60,004	58,716	61,644	2.2%	-2.7%
Provision for loan losses	6,700	8,750	4,500	-23.4%	48.9%
Net interest income on a tax equivalent basis after provision	53,304	49,966	57,144	6.7%	-6.7%
Other operating income	27,774	24,658	28,707	12.6%	-3.3%
Gain on sale of securities	16,960	8,903	10	90.5%	169500.0%
Loss on extinguishment of debt	(6,727)	-	-	N/A	N/A
Gain on sale of loans	1,081	212	515	409.9%	109.9%
Gain on sale of building	-	2,754	-	-100.0%	N/A
Other operating expenses	55,391	54,069	54,954	2.4%	0.8%
Income on a tax equivalent basis before income taxes	37,001	32,424	31,422	14.1%	17.8%
Provision (credit) for income taxes	6,958	2,469	4,070	181.8%	71.0%
Tax equivalent adjustment	4,534	4,740	6,022	-4.3%	-24.7%
NET INCOME (LOSS)	$ 25,509	$ 25,215	$ 21,330	1.2%	19.6%
SELECTED RATIOS:
Per share data (1):
Earnings (loss) per common share	$ 0.55	$ 0.54	$ 0.46
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	$ 0.16	$ 0.11	$ 0.16
(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.
**After giving retroactive effect to the stock dividend declared on July 9, 2004