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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
- - - - - --- THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the Fiscal Year Ended December 31, 1993
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
- - - - - --- THE SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)
Commission File No. 0-13818
BANPONCE CORPORATION
Incorporated in the Commonwealth of Puerto Rico
IRS Employer Identification No. 66-0416582
Principal Executive Offices:
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
Telephone Number: (809) 765-9800
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
Common Stock ($6.00 par value)
Series A Participating Cumulative Preferred
Stock Purchase Rights
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No .
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. / /
As of March 11, 1994 the Corporation had 32,756,219 shares of common stock
outstanding. The aggregate market value of the common stock held by
non-affiliates of the Corporation was $1,044,104,000 based upon the reported
closing price of $31.875 on the NASDAQ National Market System, on that date.
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DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the Corporation's Annual Report to shareholders for
the fiscal year ended December 31, 1993 are incorporated herein by reference in
response to Item 1 of Part I, Items 5 through 8 of Part II and Item 14 of Part
IV.
(2) Portions of the Corporation's Proxy Statement relating to the 1994
Annual Meeting of Stockholders of the Corporation are incorporated herein by
reference to Items 10 through 13 of Part III.
10-K CROSS-REFERENCE INDEX DOCUMENT & PAGE NUMBER
- - - - - -------------------------- ----------------------
PART I
- - - - - ------
Form 10-K 3 - 11
Item 1 Business ........................Annual Report 25-27;31-42
Item 2 Properties ......................Form 10-K 11 - 12
Item 3 Legal Proceedings ...............Form 10-K 12
Item 4 Submission of Matters
to a Vote of Security
Holders .........................Form 10-K 12
PART II
- - - - - -------
Item 5 Market for Registrant's
Common Stock and Related Form 10-K 13 - 14
Stockholder Matters .............Annual Report(*) 19 - 20
Item 6 Selected Financial Data .........Annual Report(*) 4 - 5
Item 7 Management's Discussion
and Analysis of Financial
Condition and Results of Form 10-K 15
Operations ......................Annual Report(*) 2 - 26
Item 8 Financial Statements and
Supplementary Data...............Annual Report(*) 27 - 47
Item 9 Changes in and Disagreements
with Accountants on Accounting
and Financial Disclosure........Form 10-K 16
PART III
- - - - - --------
3 - 8;9
Item 10 Directors and Executive..........Proxy Statement 9 - 11
Officers of the Registrant
Item 11 Executive Compensation ..........Proxy Statement 11-15; 16
Item 12 Security Ownership of
Certain Beneficial Owners
and Management ..................Proxy Statement 2;3 - 4
Item 13 Certain Relationships and
Related Transactions ............Proxy Statement 11
PART IV
- - - - - -------
Item 14 Exhibits, Financial
Statement Schedules, and
Reports on Form 8-K .............Form 10-K 17 - 21
(*)Financial review section of the Corporation's Annual Report to
Shareholders for the year ended December 31, 1993.
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PART I
ITEM 1 BUSINESS
BANPONCE CORPORATION is a diversified, publicly owned
bank holding company (NASDAQ symbol: BPOP), incorporated under the General
Corporation Law of Puerto Rico in November 1984. It provides a wide variety of
financial services through its principal subsidiaries: Banco Popular de Puerto
Rico ("Banco Popular"), Vehicle Equipment Leasing Company, Inc. ("VELCO") and
Popular International Bank, Inc. (PIB). BanPonce Corporation is subject to the
provisions of the U.S. Bank Holding Company Act of 1956 (the "BHC Act") and,
accordingly, subject to the supervision and regulation of the Board of
Governors of the Federal Reserve System. BANCO POPULAR DE PUERTO RICO is a
member of the Federal Reserve System and is also subject to the supervision of
the Office of the Commissioner of Financial Institutions of the Commonwealth of
Puerto Rico and the Superintendent of Banks of the State of New York. Deposits
of Banco Popular are insured by the Federal Deposit Insurance Corporation.
Banco Popular is the Corporation's full-service commercial banking subsidiary
and Puerto Rico's largest banking institution, with $11.5 billion in assets,
$8.5 billion in deposits, and a delivery system of 165 branches throughout
Puerto Rico, 30 branches in New York City, one in Chicago, one in Los Angeles,
7 branches in the U.S. Virgin Islands and one in the British Virgin Islands. In
addition, Banco Popular has two subsidiaries, POPULAR LEASING & RENTAL, INC.,
Puerto Rico's second largest vehicle leasing and daily rental company, and
POPULAR CONSUMER SERVICES, INC., a small-loans company with 26 offices
operating under the name of Best Finance. VELCO is a wholly owned subsidiary
of BanPonce Corporation engaged in finance leasing and daily rental of motor
vehicles to corporations and professionals. It is the leading leasing
operation in Puerto Rico. PIB, incorporated under the Puerto Rico International
Banking Center Act, owns all issued and outstanding stock of BANPONCE FINANCIAL
CORP.("FINANCIAL"), a Delaware Corporation. SPRING FINANCIAL SERVICES, INC.,
also a Delaware Corporation and a wholly owned subsidiary of Financial, is a
diversified consumer finance company engaged in the business of making personal
and mortgage loans, and dealer finance through 58 offices located in 14 states.
The Corporation took on its present form at the end of
1990 when Banco Popular, with assets of $5.9 billion, acquired the "old"
BanPonce Corporation (including its main subsidiary bank, Banco de Ponce), with
assets of $3.1 billion (the "Merger"). The name of BanPonce was used for the
parent company, while the name of Banco Popular de Puerto Rico was used for the
subsidiary bank. While Banco Popular had long been the leading bank in Puerto
Rico, its acquisition of "old" BanPonce Corporation at year-end 1990 increased
its assets by 50% and widened its market share as the Merger joined the
institutions that held the first and third positions in many market segments.
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The Corporation is a legal entity separate and distinct from its subsidiaries.
There are various legal limitations governing the extent to which the
Corporation's banking subsidiaries may extend credit, pay dividends or
otherwise supply funds to, or engage in transactions with, the Corporation or
certain of its other subsidiaries. The rights of the Corporation to
participate in any distribution of assets of any subsidiary upon its
liquidation or reorganization or otherwise are subject to the prior claims of
creditors of that subsidiary, except to the extent that the Corporation may
itself be a creditor of that subsidiary and its claims are recognized. Claims
on the Corporation's subsidiaries by creditors other than the Corporation
include long-term debt and substantial obligations with respect to deposit
liabilities, federal funds purchased, securities sold under repurchase
agreements and commercial paper, as well as various other liabilities.
The Corporation's business is described on pages 25
through 27 and pages 31 through 42 of the Business Review Section of the Annual
Report to shareholders for the fiscal year ended December 31, 1993, which
information is incorporated herein by reference, and in the following
paragraphs.
REGULATION AND SUPERVISION
GENERAL
The Corporation is a bank holding company subject to
supervision and regulation by the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board") under the Bank Holding Company Act. As a
bank holding company, the Corporation's activities and those of its banking and
nonbanking subsidiaries are limited to the business of banking and activities
closely related or incidental to banking, and the Corporation may not directly
or indirectly acquire the ownership or control of more than 5% of any class of
voting shares or substantially all of the assets of any company, including a
bank, without the prior approval of the Federal Reserve Board.
Banco Popular is considered a foreign bank for purposes
of the International Banking Act of 1978 (the "IBA"). Under the IBA and the
BHC Act, the Corporation and Banco Popular are not permitted to operate a
branch or agency, or acquire more than 5% of any class of the voting shares of,
or substantially all the assets of, or control of an additional bank or bank
holding company that is located outside of their "home state", except that (i)
the Corporation may acquire control of a bank in a state if the laws of that
state explicitly authorize a bank holding company from such bank holding
company's home state to do so and (ii) Banco Popular may continue to operate a
"grandfathered" branch or agency. The Commonwealth of Puerto Rico is not
considered a state for purposes of these geographic limitations. Banco Popular
has designated the state of New York as its home state. In addition, some
states have laws prohibiting or restricting foreign banks from acquiring banks
located in such states and treat Puerto Rico's banks and bank holding companies
as foreign banks for such purposes.
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Banco Popular operates branches in Chicago and Los
Angeles that are not grandfathered for purposes of the IBA. The Federal
Reserve Board has required that Banco Popular conform their existence to the
legal requirements set forth above. Banco Popular has petitioned the Federal
Reserve Board for a period of four years from December 31, 1990 to conform
these activities to the requirements of the IBA and to obtain the necessary
approvals of Illinois and California regulatory authorities to maintain these
two facilities. There can be no assurance that the Federal Reserve Board will
grant Banco Popular's request or that Banco Popular will be able to obtain the
regulatory approvals of California and Illinois authorities necessary to
maintain these two facilities.
Banco Popular is subject to supervision and examination
by applicable federal, state and Puerto Rican banking agencies, including the
Federal Reserve Board. Banco Popular is insured by, and therefore subject to
the regulations of, the Federal Deposit Insurance Corporation (the "FDIC"), and
to the requirements and restrictions under federal, state and Puerto Rican law,
including requirements to maintain reserves against deposits, restrictions on
the types and amounts of loans that may be granted and the interest that may be
charged thereon, and limitations on the types of investments that may be made
and the types of services that may be offered. Various consumer laws and
regulations also affect the operations of Banco Popular. In addition to the
impact of regulation, commercial banks are affected significantly by the
actions of the Federal Reserve Board as it attempts to control the money supply
and credit availability in order to influence the economy.
As a result of the enactment of the Financial
Institutions Reform, Recovery and Enforcement Act on August 9, 1989, a
depository institution insured by the FDIC can be held liable for any loss
incurred by, or reasonably expected to be incurred by, the FDIC after August 9,
1989, in connection with (i) the default of a commonly controlled FDIC-insured
depository institution or (ii) any assistance provided by the FDIC to a
commonly controlled depository institution in danger of default.
The Federal Deposit Insurance Corporation Improvement Act
of 1991 ("FDICIA") was enacted on December 19, 1991. FDICIA substantially
revises the depository institutions regulatory and funding provisions of the
Federal Deposit Insurance Act and makes revisions to several other federal
banking statutes.
Among other things, FDICIA requires the federal banking
regulators to take prompt corrective action in respect of depository
institutions that do not meet minimum capital requirements. FDICIA established
five capital tiers: "well capitalized", "adequately capitalized,"
"undercapitalized", "significantly undercapitalized", and "critically
undercapitalized".
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A depository institution is considered "well capitalized"
if it has (i) a total risk-based capital ratio of 10% or greater, (ii) a Tier 1
risk-based capital ratio of 6% or greater, (iii) a leverage ratio of 5% or
greater and (iv) is not subject of any order or written directive to meet and
maintain a specific capital level. An "adequately capitalized" depository
institution is one that has (i) a total risk-based capital ratio of 8% or
greater, (ii) a Tier 1 risk-based capital ratio of 4% or greater and (iii) a
leverage ratio of 4% or greater (or, in the case of a bank with the highest
examination rating, 3%). A depository institution is considered (A)
"undercapitalized" if it does not meet any of the above definitions; (B)
"significantly undercapitalized" if it has (i) a total risk-based capital ratio
of less than 6%, (ii) a Tier 1 risk-based capital ratio of less than 3% and
(iii) a leverage ratio of less than 3%; and (C) "critically undercapitalized"
if it has a ratio of tangible equity to total assets less than or equal to 2%.
A depository institution may be deemed to be in a capitalization category that
is lower than is indicated by its actual capital position if it receives a less
than satisfactory examination rating in any one of the four rating categories.
As of the date hereof, Banco Popular is considered "well-capitalized".
FDICIA generally prohibits a depository institution from
making any capital distribution (including payment of a dividend) or paying any
management fee to its holding company if the depository institution would
thereafter be undercapitalized. Undercapitalized depository institutions are
subject to restrictions on borrowing from the Federal Reserve System. In
addition, undercapitalized depository institutions are subject to growth
limitations and are required to submit capital restoration plans. A depository
institution's holding company must guarantee the capital plan, up to an amount
equal to the lesser of five percent of the depository institution's assets at
the time it becomes undercapitalized or the amount of the capital deficiency
when the institution fails to comply with the plan. The federal banking
agencies may not accept a capital plan without determining, among other things,
that the plan is based on realistic assumptions and is likely to succeed in
restoring the depository institution's capital. If a depository institution
fails to submit an acceptable plan, it is treated as if it is significantly
undercapitalized.
Significantly undercapitalized depository institutions
may be subject to a number of requirements and restrictions, including orders
to sell sufficient stock to become adequately capitalized, requirements to
reduce total assets, and cessation of receipt of deposits from correspondent
banks. Critically undercapitalized depository institutions are subject to
appointment of a receiver or conservator.
Under FDICIA, a depository institution that is not well
capitalized is generally prohibited from accepting brokered deposits and
offering interest rates on deposits higher than the prevailing rates in its
market.
Under FDICIA, the FDIC is permitted to provide financial
assistance to an insured bank before appointment of a conservator or
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receiver only under limited circumstances. The FDIC's policy is that for such
assistance to be provided, existing shareholders and debt holders must make
substantial concessions.
HOLDING COMPANY STRUCTURE
Banco Popular is subject to restrictions under federal
law that limit the transfer of funds by Banco Popular to the Corporation and
its nonbanking subsidiaries, whether in the form of loans, other extensions of
credit, investments or asset purchases. Such transfers by Banco Popular to the
Corporation or any nonbanking subsidiary of the Corporation are limited in
amount to 10% of Banco Popular's capital and surplus and, with respect to the
Corporation and all nonbanking subsidiaries, to an aggregate of 20% of Banco
Popular's capital and surplus. Furthermore, such loans and extensions of
credit are required to be secured in specified amounts.
Under Federal Reserve Board policy, a bank holding
company is expected to act as a source of financial strength to each of its
subsidiary banks and to commit resources to support each such subsidiary bank.
This support may be required at times when, absent such policy, the bank
holding company might not otherwise provide such support. Any capital loans by
a bank holding company to any of its subsidiary banks are subordinated in right
of payment to deposits and to certain other indebtedness of such subsidiary
bank. In the event of a bank holding company's bankruptcy, any commitment by
the bank holding company to a federal bank regulatory agency to maintain the
capital of a subsidiary bank will be assumed by the bankruptcy trustee and
entitled to a priority of payment.
Because the Corporation is a holding company, its right to
participate in the assets of any subsidiary upon the latter's liquidation or
reorganization will be subject to the prior claims of the subsidiary's
creditors (including depositors in the case of bank subsidiaries) except to the
extent that the Corporation itself is a creditor with recognized claims against
the subsidiary.
DIVIDEND RESTRICTIONS
Various statutory provisions limit the amount of
dividends Banco Popular can pay to the Corporation without regulatory approval.
The principal source of cash flow for the Corporation is dividends from Banco
Popular.
As a member bank subject to the regulations of the
Federal Reserve Board, Banco Popular must obtain the approval of the Federal
Reserve Board for any dividend if the total of all dividends declared by the
member bank in any calendar year would exceed the total of its net profits, as
defined by the Federal Reserve Board, for that year, combined with its retained
net profits for the preceding two years. In addition, a member bank may not
pay a dividend in an amount greater than its undivided profits then on hand
after deducting its losses and bad debts. For this purpose, bad debts are
generally defined to
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include the principal amount of loans that are in arrears with respect to
interest by six months or more unless such loans are fully secured and in the
process of collection. Moreover, for purposes of this limitation, a member
bank is not permitted to add the balance in its allowance for loan losses
account to its undivided profits then on hand, however, it may net the sum of
its bad debts as so defined against the balance in its allowance for loan
losses account and deduct from undivided profits only bad debts as so defined
in excess of that account. At December 31, 1993, Banco Popular could have
declared a dividend of approximately $123,794,000 without the approval of the
Federal Reserve Board.
The payment of dividends by Banco Popular may also be
affected by other regulatory requirements and policies, such as the maintenance
of adequate capital. If, in the opinion of the applicable regulatory
authority, a bank under its jurisdiction is engaged in, or is about to engage
in, an unsafe or unsound practice (which, depending on the financial condition
of the bank, could include the payment of dividends), such authority may
require, after notice and hearing, that such bank cease and desist from such
practice. The Federal Reserve Board and the FDIC have issued policy statements
that provide that insured bank and bank holding companies should generally pay
dividends only out of current operating earnings. In addition, all insured
depository institutions are subject to the capital-based limitations described
under FDICIA.
FDIC INSURANCE ASSESSMENTS
Banco Popular is subject to FDIC deposit insurance
assessments for the Bank Insurance Fund (the "BIF"). Pursuant to FDICIA, the
FDIC has adopted a risk-based assessment system, under which the assessment
rate for an insured depository institution varies according to the level of
risk incurred in its activities. An institution's risk category is based
partly upon whether the institution is well capitalized, adequately capitalized
or less that adequately capitalized. Each insured depository institution is
also assigned to one of the following "supervisory subgroups": "A", "B" or "C".
Group "A" institutions are financially sound institutions with only a few minor
weaknesses; Group "B" institutions are institutions that demonstrate weaknesses
which, if not corrected, would result in significant deterioration; and Group
"C" institutions are institutions for which there is a substantial probability
that the FDIC will suffer a loss in connection with the institution unless
effective action is taken to correct the areas of weakness. Based on its
capital and supervisory subgroups, each BIF member institution is assigned an
annual FDIC assessment rate varying between 0.23% and 0.31%. It remains
possible that assessments may be raised to higher levels in the future.
CAPITAL ADEQUACY
The information in Table N, "Capital Adequacy Data", on
page 19 of the Financial Review Section of the Corporation's Annual Report to
shareholders for the year ended December 31, 1993, is incorporated
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herein by reference.
The Federal Reserve Board has adopted risk-based capital
guidelines for bank holding companies. Under the guidelines the minimum ratio
of qualifying total capital to risk-weighted assets (including certain
off-balance sheet items, such as standby letters of credit) is 8%. At least
half of the total capital is to be comprised of stockholders' common equity,
retained earnings, non-cumulative perpetual preferred stock, and a limited
amount of cumulative perpetual preferred stock less goodwill ("Tier 1
Capital"). The remainder ("Tier 2 Capital") may consist of a limited amount of
subordinated debt, other preferred stock, certain other instruments, and a
limited amount of loan and lease loss reserves.
In addition, the Federal Reserve Board has established
minimum leverage ratio (Tier 1 Capital to quarterly average assets) guidelines
for bank holding companies. These guidelines provide for a minimum leverage
ratio of 3% for bank holding companies that meet certain specified criteria,
including that they have the highest regulatory rating. All other bank holding
companies are required to maintain a leverage ratio of 3% plus an additional
cushion of at least 100 to 200 basis points. The guidelines also provide that
banking organizations experiencing internal growth or making acquisitions are
expected to maintain strong capital positions substantially above the minimum
supervisory levels, without significant reliance on intangible assets.
Furthermore, the guidelines indicate that the Federal Reserve Board will
continue to consider a "tangible Tier 1 leverage ratio" in evaluating proposals
for expansion or new activities. The tangible Tier 1 leverage ratio is the
ratio of a banking organization's Tier 1 Capital, less all intangibles, to
total assets, less all intangibles. The Federal Reserve Board has not advised
the Corporation of any specific minimum leverage ratio applicable to it.
Effective for the periods ending on or after March
15, 1993, the Federal Reserve Board adopted regulations with respect to
risk-based and leverage capital ratios that would require most intangibles,
including core deposit intangibles, to be deducted from Tier 1 capital. The
regulations, however, permit the inclusion of a limited amount of intangibles
related to purchased mortgage servicing rights and purchased credit card
relationships and includes a "grandfather" provision permitting the continued
inclusion of certain existing intangibles.
Banco Popular is subject to similar risk-based and
leverage capital requirements adopted by the Federal Reserve Board. As of
December 31, 1993, Banco Popular had a tier 1 capital ratio of 11.85%, a total
capital ratio of 13.72% and a leverage ratio of 6.96%.
Failure to meet capital guidelines could subject a bank to
a variety of enforcement remedies, including the termination of deposit
insurance by the FDIC, and to certain restrictions on its business.
Bank regulators continue to indicate their desire to
raise capital
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requirements applicable to banking organizations beyond their current levels.
However, management is unable to predict whether and when higher capital
requirements would be imposed and, if so, at what levels and on what schedule.
The following table reflects the capital position of the
Corporation as of December 31, 1993 and December 31, 1992.
December 31, Minimum Regulatory
1993 1992 Requirements
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Tier 1 Leverage Ratio 6.95% 7.26% 3.00%
Risk-Based Capital Ratio(1)
Tier 1 12.29% 12.88% 4.00%
Total Capital 13.95% 14.85% 8.00%
The table below describes the components of the
Corporations' Tier 1 and Tier 2 Capital.
December 31,
(in millions) 1993 1992
------ ------
Tier 1 Capital
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Stockholders' Equity $845 $763
Less:
Goodwill (58) (41)
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Tier 1 Capital $787 $722
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Tier 2 Capital
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Subordinated Notes $ 25 $ 40
Allowance for Loan Losses 81 71
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Tier 2 Capital $106 $111
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Total Capital $893 $833
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Puerto Rico Regulation
As a commercial bank organized under the laws of the
Commonwealth of Puerto Rico (the "Commonwealth"), Banco Popular is subject to
supervision, examination and regulation by the Office of the Commissioner of
Financial Institutions of the Commonwealth (the "Office of the Commissioner"),
pursuant to the Puerto Rico Banking Act of 1933, as amended (the "Banking
Law").
Section 27 of the Banking Law requires that at least ten
percent (10%) of the yearly net income of the Bank be credited annually to a
reserve fund. This apportionment shall be done every year until the
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reserve fund shall be equal to ten percent (10%) of the total deposits or the
total paid-in capital, whichever is greater. At the end of its most recent
fiscal year, the Bank had an adequate reserve fund established.
Section 27 of the Banking Law also provides that when the
expenditures of a bank are greater than the receipts, the excess of the former
over the latter shall be charged against the undistributed profits of the bank,
and the balance, if any, shall be charged against the reserve fund, as a
reduction thereof. If there is no reserve fund sufficient to cover such
balance in whole or in part, the outstanding amount shall be charged against
the capital account and no dividend shall be declared until said capital has
been restored to its original amount and the reserve fund to 20% of the
original capital.
Section 16 of the Banking Law requires every bank to
maintain a legal reserve which shall not be less than 20% of its demand
liabilities, except government deposits (federal, state and municipal) which
are secured by actual collateral. However, if a bank becomes a member of the
Federal Reserve System, the 20% legal reserve shall not be effective and the
reserve requirements demanded by the Federal Reserve System shall be
applicable. Pursuant to an order of the Board of Governors dated November 24,
1982, the Bank has been exempted from such reserve requirements with respect to
deposits payable in Puerto Rico.
Section 14 of the Banking Law authorizes the Bank to
conduct certain financial and related activities directly or through
subsidiaries, including finance leasing of personal property and operating a
small loans company. Banco Popular engages in these activities through its
wholly-owned subsidiaries, Popular Leasing & Rental, Inc. and Popular Consumer
Services, Inc., respectively, both of which are organized and operate solely in
Puerto Rico.
Employees
At December 31, 1993, the Corporation employed 7,439
persons. None of its employees are represented by a collective bargaining
group.
ITEM 2. PROPERTIES
As of December 31, 1993, the Bank owned (and wholly or
partially occupied) approximately 65 branches and other facilities throughout
the Commonwealth, 15 branches in New York, and a branch in Los Angeles. In
addition, as of such date, the Bank leased properties for branch operations in
approximately 105 locations in Puerto Rico, 15 locations in New York, 7
locations in the U.S Virgin Islands, one location in British Virgin Islands and
one location in Chicago . The Corporation's management believes that each of
its facilities is well-maintained and suitable for its purpose. The principal
properties owned by the Bank for banking operations and other services are
described below:
Popular Center, the metropolitan area headquarters
building, located at 209 Munoz Rivera Avenue, Hato Rey, Puerto Rico, a 20 story
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office building. Approximately 60% of the office space is leased to outside
tenants.
Hato Rey Center, a 23 story office structure located at
268 Munoz Rivera Avenue, Hato Rey, Puerto Rico. The office space is mostly
rented to outside tenants.
Cupey Center Complex, two buildings of three and two
stories, respectively, located at Cupey, Rio Piedras, Puerto Rico. The
computer center, operational and support services, and a recreational and
training center for employees are some of the main activities conducted at
these facilities.
Stop 22 - Santurce building, a twelve story structure
located in Santurce, Puerto Rico. A branch, the accounting department, the
human resources division, the auditing department and the international
division are the main activities conducted at this facility.
San Juan building, a twelve story structure located at
Old San Juan, Puerto Rico. The Bank occupies 50% of the basement, the entire
ground floor, the mezzanine and the 10th floor. Most of the rest of the
building is rented to outside tenants.
Mortgage Loan Center, a seven story building located at
153 Ponce de Leon Avenue, Hato Rey, Puerto Rico, is fully occupied by the
mortgage loans and mortgage servicing departments.
Los Angeles building, a nine story structure located at
354 South Spring Street, Los Angeles, California in which office space is
mostly rented to outside tenants.
New York building, a nine story structure with two
underground levels located at 7 West 51th Street, New York City, where
approximately 54% of the office space is used for banking operations. The
remaining space is rented or available for rent to outside tenants.
ITEM 3. LEGAL PROCEEDINGS
The Corporation and its subsidiaries are defendants in
various lawsuits arising in the ordinary course of business. Management is of
the opinion that the aggregate liabilities, if any, arising from such actions
would not have a material adverse effect in the financial position of the
Corporation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
The information contained under Table 0, "Stock Performance", on page 20,
and under the captions "Common Stock" and "Dividends", on page 19 of the
Financial Review Section of the Corporation's Annual Report to shareholders for
the year ended December 31, 1993, is incorporated herein by reference.
Information concerning legal or regulatory restrictions on the payment of
dividends by the Corporation and the Bank is contained under the caption
"Regulation and Supervision" in Item 1 herein. In addition, the information
contained in Notes 13 and 14 to the Consolidated Financial Statements
describing various contractual restrictions on the payments of dividends by the
Corporation and the Bank is incorporated herein by reference.
The Corporation currently has outstanding Senior Notes due January 14,
1997 in the aggregate principal amount of $30,000,000 (the "1997 Senior
Notes"). The 1997 Senior Notes contain various covenants, which, among others,
restrict the payment of dividends. The 1997 Senior Notes prohibit the
Corporation from paying dividends or making any other distributions with
respect to the Corporation's Common Stock if such aggregate distribution
exceeds $50,000,000 plus 50% of consolidated net income (or minus 100% of
consolidated net loss), computed on a cumulative basis from January 1, 1992 to
the date of payment of any such dividends or other distributions or if an event
of default has occurred and is continuing.
Banco Popular has outstanding $12,000,000 in subordinated notes due in
June 28, 1996 (the "1996 Subordinated Notes") which contain certain restrictive
covenants, including restrictions on the ability of Banco Popular to pay
dividends to the Corporation. Pursuant to the covenants contained in the 1996
Subordinated Notes, Banco Popular may not pay dividends or other distribution
on its common stock unless the sum of (i) 100% of its capital stock, (ii) its
unimpaired reserve fund, and (iii) its undivided profits equals or exceeds the
sum of (x) $80,000,000 and (y) the cumulative amount of all cash dividends or
other distributions declared or paid after June 30, 1989.
As of December 31, 1993, the sum of (i) the capital stock of Banco
Popular, (ii) its unimpaired reserve fund, and (iii) its undivided profits was
$759,260,753. Dividends and other distributions made with respect to the
common stock since June 30, 1989 amounted to $82,937,419 for purposes of the
1996 Subordinated Notes.
In addition, the 1996 Subordinated Notes provide that Banco Popular may
not pay any dividend or other distributions on its common
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14
stock except out of undivided profits and only if, after giving effect to such
distribution, the following conditions are satisfied: (i) funded debt (as
defined in the agreements governing the 1996 Subordinated Notes) of Banco
Popular would not exceed the sum of (a) 100% of its capital stock and (b) 50%
of its reserve fund; (ii) undivided profits of Banco Popular would not be less
than $1,000,000; (iii) certain amounts are transferred as required for
redemption of the Subordinated Notes at maturity; and (iv) certain amounts are
transferred as required for the redemption of other funded debt at maturity.
As of December 31, 1993, funded debt of Banco Popular was approximately
$91.5 million, and the sum of 100% of its capital stock and 50% of its reserve
fund is $264,233,274.
As of March 11, 1994, the Corporation had 5,306 stockholders of record,
not including beneficial owners whose shares are held in record names of
brokers or other nominees. The last sales price for the Corporation's Common
Stock on such date, as quoted on the National Association of Securities Dealers
Automated Quotation National Market System, was $31.875 per share.
The Puerto Rico Income Tax Act of 1954, as amended, generally imposes a
withholding tax on the amount of any dividends paid by corporations to
individuals, whether residents of Puerto Rico or not, trusts, estates and
special partnerships at a special 20% withholding tax rate. The rate of
withholding is 25% if the recipient is a foreign corporation or partnership not
engaged in trade or business within Puerto Rico.
Prior to the first dividend distribution for the taxable year, individuals
who are residents of Puerto Rico may elect to be taxed on the dividends at the
regular rates, in which case the special 20% tax will not be withheld from such
year's distributions.
United States citizens who are non-residents of Puerto Rico may also make
such an election, and will not be subject to Puerto Rico tax on dividends, if
said individual's gross income from sources within Puerto Rico during the
taxable year does not exceed $1,300 if single, or $3,000 if married.
U.S. income tax law permits a credit against U.S. income tax liability,
subject to certain limitations, for certain foreign income taxes paid or deemed
paid with respect to such dividends.
ITEM 6. SELECTED FINANCIAL DATA
The information in Table C, "Selected Financial Data", for only the years
1993, 1992, 1991, 1990 and 1989, on pages 4 and 5 and the text under the
caption "Earnings Analysis", on pages 3 and 6 of the Financial Review Section
of the Annual Report to shareholders, is incorporated herein by reference, and
in the following paragraphs.
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15
The Corporation's ratio of earnings to fixed charges on a
consolidated basis for each of the last five years is as follows:
Year ended December 31,
-----------------------
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
Excluding Interest on Deposits 3.0 2.9 2.1 3.6 2.4
Including Interest on Deposits 1.5 1.3 1.2 1.3 1.2
For purposes of computing these consolidated ratios,
earnings represent income before income taxes, plus fixed charges excluding
capitalized interest. Fixed charges represent all interest expense (ratios are
presented both excluding and including interest on deposits), the portion of
net rental expense which is deemed representative of the interest factor, the
amortization of debt issuance expense and capitalized interest.
The Corporation's long term senior debt and preferred
stock on a consolidated basis for each of the last five years ended December
31, is as follows:
Year ended December 31,
-----------------------
(In thousands) 1993 1992 1991 1990 1989
---- ---- ---- ---- ----
Long term obligation
(excludes deposits) $283,855 $120,062 $103,752 $38,018 $2,245
Cumulative perpetual
preferred stock of
subsidiary bank $ 11,000 $ 11,000 $ 11,000 $11,000 -
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The information under the caption "Management's
Discussion and Analysis of Financial Condition and Results of Operations", on
pages 2 through 26 of the Financial Review Section of the Annual Report to
shareholders, is incorporated herein by reference.
Table K, "Maturity Distribution of Earning Assets", on
page 16 of the Financial Review Section of the Annual Report to shareholders,
has been prepared on the basis of contractual maturities. The Corporation does
not have a policy with respect to rolling over maturing loans but rolls over
loans only on a case-by-case basis after review of such loans in accordance
with the Corporation's lending criteria.
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16
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The report of the independent accountants, the Consolidated Financial
Statements of the Corporation and its subsidiaries, together with the notes, on
pages 27 through 47 of the Financial Review Section of the Annual Report to
shareholders, are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not Applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information contained under the captions "Shares Beneficially Owned by
Directors, Nominees and Executive Officers of the Corporation", and "Board of
Directors and Committees" on pages 3 through 8 and "Nominees for Election as
Directors" on page 9 of the Corporation's definitive proxy statement filed with
the Securities and Exchange Commission on March 18, 1994 (the "Proxy
Statement"), and under the caption "Executive Officers", on pages 9 through 11
of the Proxy Statement, is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information under the caption "Executive Compensation Program", on
pages 11 through 15 and under the caption "BanPonce Corporation Performance
Graph" on page 16 of the Proxy Statement, is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The information under the captions "Principal Stockholders", on page 2
and under "Shares Beneficially Owned by Directors, Nominees and Officers of the
Corporation", on pages 3 and 4 of the Proxy Statement, is incorporated herein
by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information under the caption "Family Relationships" and "Other
relationships and transactions", on page 11 of the Proxy Statement, is
incorporated herein by reference.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K
A.1 The following financial statements and reports included on
pages 27 through 47 of the financial review section of the
Corporation's Annual Report to Shareholders, have been
incorporated herein by reference:
Report of Independent Auditors.
Consolidated Statements of Condition as of December 31, 1993
and 1992.
Consolidated Statements of Income for each of the years in the
three-year period ended December 31, 1993.
Consolidated Statements of Cash Flows for each of the years in
the three-year period ended December 31, 1993.
Consolidated Statements of Changes in Stockholders' Equity for
each of the years in the three-year period ended December 31,
1993.
Notes to Consolidated Financial Statements.
A.2 Financial Statement Schedules: No schedules are presented
because the information is not applicable or is included in the
Consolidated Financial Statements described in A.1 above or in
the notes thereto.
A.3 Exhibits
EXHIBIT NO. DESCRIPTION
----------- -----------
3.1 Restated certificate of Incorporation
and By-Laws of BanPonce Corporation (1)
4.1 Form of certificate for common stock (1a)
4.2 Certificates of Resolution of the Board of
Directors of BanPonce Corporation dated August 11,
1988 creating a series of Preferred Stock of
the Corporation designated as Series A
Participating Cumulative Preferred Stock
Purchase rights and the designation and amount
of such series, the voting power preferences,
and relative, participating, optional, or other
special rights of the shares of such series, and
the qualifications, limitations or restrictions
thereof. Rights Agreement dated as of August 11,
1988 by and between BanPonce Corporation and
17
18
Manufacturers Hanover Trust Company regarding
the issuance of certain Rights to the
Corporation's shareholders. (2)
4.3 Amendment to Rights Agreement dated as of
December 11, 1990. (3)
4.4 Indenture, dated as of October 1, 1991, among
BanPonce Financial Corp., BanPonce Corporation
and Citibank, N.A. relating to the debt
securities of BanPonce Financial guaranteed
by BanPonce Corporation. (2a)
4.5 Form of medium-term fixed rate note of BanPonce
Financial Corp. guaranteed by BanPonce
Corporation. (2b)
4.6 Form of medium-term floating rate note of
BanPonce Financial Corp. guaranteed by BanPonce
Corporation. (2c)
10.1 Certificate of Designation dated June 7,
1984 for Treasury Indexed Preferred
Stock of Banco Popular de Puerto Rico.
("Banco Popular"), as successor of
Banco de Ponce. (4)
10.2 Form of 8-A Filing filed in connection with
the Series A Participating Cumulative
Preferred Stock Purchase Rights. (5)
10.3 Senior Note Agreement dated as of January 15,
1992, between BanPonce Corporation and New
York Life Insurance Company regarding
the issuance by BanPonce Corporation of
$30,000,000 Senior Notes due January 15, 1997. (12)
10.3.1 Amended and Restated Senior Notes Agreement dated
June 11, 1993 by and among BanPonce Corporation,
New York Life Insurance Company and New York Life
Insurance Company and Annuity Company.
10.4 Reimbursement Agreement dated October 24,
1989 between BanPonce Corporation and Barclays
Bank PLC; Underwriting Agreement dated October
20, 1989 by and between Vehicle Equipment
Leasing Company Inc., BanPonce Corporation and
the First Boston Corporation. (6)
10.5 Note Purchase Agreement dated June 28, 1989
relating to $12,000,000 principal amount of
Capital Notes of Banco de Ponce; Letter of
Credit and Reimbursement Agreement dated
June 28, 1989 between Banco de Ponce and
The Bank of Nova Scotia; Issuing Bank Fee
Agreement dated June 28, 1989. (7)
10.6 Amended and Restated Agreement and Plan of
Merger dated as of January 10, 1990 by and
among BanPonce Corporation, Banco de Ponce,
Banco Popular de P.R. and the Interim
Corporation. (8)
10.7 Note Purchase Agreement dated March 15,
1989 for $50,000,000 of senior subordinated
18
19
Capital Notes, maturing on June 15, 1996 by
and between Banco Popular de Puerto Rico and
Chase Manhattan Capital Markets Corporation
of Puerto Rico. (9)
10.8 Management Incentive Plan for certain Division
Supervisors approved in January 1987.
10.9 Letter of Credit and Reimbursement Agreement
dated November 22, 1991 between BanPonce Corporation
and Barclays Bank PLC relating to Velco 1991-A Grantor
Trust, Assets Backed Certificates; Underwriting
Agreement dated November 21, 1991 by and between
Vehicle Equipment Leasing Company, Inc., BanPonce
Corporation and the First Boston Corporation. (11)
10.10 Revolving loan agreement executed by and
between Vehicle Equipment Leasing and BanPonce
Corporation as of January 15, 1992 in the
aggregate principal amount of $30,000,000. (13)
10.11 $85,785,000 Banco Popular de Puerto Rico 1992
Grantor Trust 1 Mortgage Pass - Through
Certificates, Class A, offering memorandum dated
June 25, 1992. Underwriting Agreement by and
between Merril Lynch, Pierce, Ferrer & Smith
Incorporated, acting through its Puerto Rico
branch office and Lehman Brothers Puerto Rico, Inc.
and Banco Popular de Puerto Rico dated June 25, 1992;
Insurance Agreement by and between Municipal Bond
Investors Assurance Corporation as Insurer, Banco
Popular de Puerto Rico as Settlor, Banco Popular
de Puerto Rico as Servicer, Banco Central as
Collateral Agent and Banco Central as Trustee
dated June 25, 1992. (14)
10.12 Credit Agreement by and between BanPonce Corporation,
BanPonce Financial Corp., Vehicle Equipment Leasing,
Company, Inc. ("The Companies") and Citibank, N.A.
for borrowing up to the principal amount of
$35,000,000 dated as of May 22, 1992; Credit Agreement
by and between the Companies and Barclays Bank PLC,
acting through its Miami Agency for borrowings up to
the principal amount $25,000,000 dated as of May 19,
1992; Credit Agreement by and between the Companies
and The First National Bank of Chicago, acting
individually and as agent, for borrowings up to
the aggregate amount of $40,000,000 dated as of
May 1, 1992. (15)
10.12.1 First and Second Amendments to Credit Agreement
by and between BanPonce Corporation, BanPonce Financial
Corp., Vehicle Equipment Leasing,Company,Inc. ("The
Companies") and Citibank,N.A. for borrowings up to the
principal amount of $50,000,000 dated as of April 8,
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20
1993 and May 21, 1993, respectively. First and Second
Amendments to Credit Agreement by and between the Companies
and Barclays Bank PLC, acting through its Miami Agency for
borrowings up to the principal amount of $45,000,000 both
dated as of April 2, 1993. First and Second Amendments to
Credit Agreement by and between the companies and the First
National Bank of Chicago, acting individually and as agent,
for borrowings up to $60,000,000 dated April 1, 1993 and
June 1, 1993 respectively.
10.12.2 Credit Agreement by and between BanPonce Corporation,
BanPonce Financial Corp., Vehicle Equipment
Leasing,Company,Inc. and Chemical Bank for borrowings up to
the principal amount of $25,000,000 dated as of April 1,
1993 as amended on June 1, 1993.
12.0 Computation of ratio of earnings to fixed charges.
13.1 Registrant's Annual Report to Shareholders for the year
ended December 31, 1993.
21.1 Schedule of Subsidiaries
23.1 Consent of Independent Auditors
99.1 Registrant's Proxy Statement for the April 22, 1994 Annual
Meeting of Stockholders
B. No report on Form 8-K was filed for the year ended December 31,
1993.
(1) Incorporated by reference to Exhibit 4.1 of Registration
Statement No. 33-39028.
(1a)Incorporated by reference to exhibit 4.1 of the Corporation's
Annual Report on Form 10-K for the year ended December 31, 1990
(the "1990 Form 10-K").
(2) Incorporated by reference to Exhibit 4.3 of Registration Statement
No. 33-39028.
(2a) Incorporated by reference to Exhibit 4(c) to Registration
Statement No. 33-41686.
(2b) Incorporated by reference to Exhibit 2 on Form 8-K filed on
October 8, 1991.
(2c) Incorporated by reference to Exhibit 3 on Form 8-K filed on
October 8, 1991.
(3) Incorporated by reference to Exhibit 4.4 of Registration
Statement No. 33-39028.
(4) Incorporated by reference to Exhibit number 10.2 of Registration
Statement No. 33-00497.
20
21
(5) Incorporated by reference to Exhibit 10.3 of the 1991
Form 10-K.
(6) Incorporated by reference to Exhibit 10.8 of the 1991
Form 10-K.
(7) Incorporated by reference to Exhibit 10.9 of the 1991
Form 10-K.
(8) Incorporated by reference to Exhibit 10.10 of the 1991
Form 10-K.
(9) Incorporated by reference to Exhibit 10.12 of the 1991
Form 10-K.
(10) Incorporated by reference to Exhibit 10.13 of the 1991
Form 10-K.
(11) Incorporated by reference to Exhibit 10.14 of the 1991
Form 10-K.
(12) Incorporated by reference to Exhibit 10.19 of the 1991
Form 10-K.
(13) Incorporated by reference to Exhibit 10.6 of the 1991
Form 10-K.
(14) Incorporated by reference to Exhibit 10.14 of the 1992
Form 10-K.
(15) Incorporated by reference to Exhibit 10.15 of the 1992
Form 10-K.
21
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SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
BANPONCE CORPORATION
(Registrant)
By: /s/ Richard L. Carrion
--------------------------------
Richard L. Carrion
Chairman of the Board, President
and Chief Executive Officer
(Principal Executive Officer)
By: /s/ David H. Chafey, Jr.
--------------------------------
David H. Chafey, Jr.
Executive Vice President
(Principal Executive Officer)
By: /s/ Orlando Berges
--------------------------------
Orlando Berges
Treasurer
(Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signatures Titles Dates
---------- ------ -----
/s/ Richard L. Carrion Chairman of the Board,
- - - - - -------------------------------- President and Chief
Richard L. Carrion Executive Officer 3-10-94
--------
/s/ Alfonso F. Ballester Vice Chairman of
- - - - - -------------------------------- the Board 3-10-94
Alfonso F. Ballester --------
/s/ Manuel L. Del Valle Vice Chairman of
- - - - - -------------------------------- the Board 3-10-94
Manuel L. Del Valle --------
/s/ Antonio Luis Ferre Vice Chairman of
- - - - - --------------------------------- the Board 3-10-94
Antonio Luis Ferre --------
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/s/Juan J. Bermudez
- - - - - ----------------------------------
Juan J. Bermudez Director 3-10-94
--------
/s/Sila M. Calderon
- - - - - ----------------------------------
Sila M. Calderon Director 3-10-94
--------
/s/Francisco J. Carreras
- - - - - ----------------------------------
Francisco J. Carreras Director 3-10-94
--------
/s/Waldemar Del Valle
- - - - - ----------------------------------
Waldemar Del Valle Director 3-10-94
--------
/s/Luis E. Dubon, Jr.
- - - - - ----------------------------------
Luis E. Dubon, Jr. Director 3-10-94
--------
/s/Roberto W. Esteves
- - - - - ----------------------------------
Roberto W. Esteves Director 3-10-94
--------
/s/Hector R. Gonzalez
- - - - - ----------------------------------
Hector R. Gonzalez Director 3-10-94
--------
/s/Franklin A. Mathias
- - - - - ----------------------------------
Franklin A. Mathias Director 3-10-94
--------
/s/Hugh G. McComas
- - - - - ----------------------------------
Hugh G. McComas Director 3-10-94
--------
/s/Manuel Morales, Jr.
- - - - - ----------------------------------
Manuel Morales, Jr. Director 3-10-94
--------
/s/Alberto M. Paracchini
- - - - - ----------------------------------
Alberto M. Paracchini Director 3-10-94
--------
- - - - - ----------------------------------
Francisco Perez, Jr. Director
--------
/s/Francisco M. Rexach, Jr.
- - - - - ----------------------------------
Francisco M. Rexach, Jr. Director 3-10-94
--------
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24
/s/Felix J. Serralles, Jr.
- - - - - ----------------------------------
Felix J. Serralles, Jr. Director 3-10-94
--------
/s/Emilio Jose Venegas
- - - - - -----------------------------------
Emilio Jose Venegas Director 3-10-94
--------
/s/Julio E. Vizcarrondo, Jr.
- - - - - -----------------------------------
Julio E. Vizcarrondo, Jr. Director 3-10-94
--------
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EXHIBIT INDEX
Exhibit No. DESCRIPTION
3.1 Restated certificate of Incorporation
and By-Laws of BanPonce Corporation (1)
4.1 Form of certificate for common stock (1a)
4.2 Certificates of Resolution of the Board of
Directors of BanPonce Corporation dated August 11, 1988
creating a series of Preferred Stock
of the Corporation designated as Series A
Participating Cumulative Preferred Stock
Purchase rights and the designation and amount
of such series, the voting power preferences,
and relative, participating, optional, or other
special rights of the shares of such series, and
the qualifications, limitations or restrictions
thereof. Rights Agreement dated as of August 11,
1988 by and between BanPonce Corporation and
Manufacturers Hanover Trust Company regarding
the issuance of certain Rights to the
Corporation's shareholders. (2)
4.3 Amendment to Rights Agreement dated as of
December 11, 1990. (3)
4.4 Indenture, dated as of October 1, 1991, among
BanPonce Financial Corp., BanPonce Corporation
and Citibank, N.A. relating to the debt
securities of BanPonce Financial guaranteed
by BanPonce Corporation. (2a)
4.5 Form of medium-term fixed rate note of BanPonce
Financial Corp. guaranteed by BanPonce
Corporation. (2b)
4.6 Form of medium-term floating rate note of
BanPonce Financial Corp. guaranteed by BanPonce
Corporation. (2c)
10.1 Certificate of Designation dated June 7,
1984 for Treasury Indexed Preferred
Stock of Banco Popular de Puerto Rico.
("Banco Popular"), as successor of
Banco de Ponce. (4)
10.2 Form of 8-A Filing filed in connection with
the Series A Participating Cumulative
Preferred Stock Purchase Rights. (5)
10.3 Senior Note Agreement dated as of January 15,
1992, between BanPonce Corporation and New
York Life Insurance Company regarding
the issuance by BanPonce Corporation of
$30,000,000 Senior Notes due January 15, 1997. (12)
10.3.1 Amended and Restated Senior Notes Agreement dated
June 11, 1993 by and among BanPonce Corporation,
New York Life Insurance Company and New York Life
25
26
Insurance Company and Annuity Company.
10.4 Reimbursement Agreement dated October 24,
1989 between BanPonce Corporation and Barclays
Bank PLC; Underwriting Agreement dated October
20, 1989 by and between Vehicle Equipment
Leasing Company Inc., BanPonce Corporation and
the First Boston Corporation. (6)
10.5 Note Purchase Agreement dated June 28, 1989
relating to $12,000,000 principal amount of
Capital Notes of Banco de Ponce; Letter of
Credit and Reimbursement Agreement dated
June 28, 1989 between Banco de Ponce and
The Bank of Nova Scotia; Issuing Bank Fee
Agreement dated June 28, 1989. (7)
10.6 Amended and Restated Agreement and Plan of
Merger dated as of January 10, 1990 by and
among BanPonce Corporation, Banco de Ponce,
Banco Popular de P.R. and the Interim
Corporation. (8)
10.7 Note Purchase Agreement dated March 15,
1989 for $50,000,000 of senior subordinated
Capital Notes, maturing on June 15, 1996 by
and between Banco Popular de Puerto Rico and
Chase Manhattan Capital Markets Corporation
of Puerto Rico. (9)
10.8 Management Incentive Plan for certain
Division Supervisors approved in January
1987. (10)
10.9 Letter of Credit and Reimbursement
Agreement dated November 22, 1991
between BanPonce Corporation and
Barclays Bank PLC relating to Velco
1991-A Grantor Trust, Assets Backed
Certificates; Underwriting Agreement
dated November 21, 1991 by and between
Vehicle Equipment Leasing Company, Inc.,
BanPonce Corporation and the First Boston
Corporation. (11)
10.10 Revolving loan agreement executed by and
between Vehicle Equipment Leasing and BanPonce
Corporation as of January 15, 1992 in the
aggregate principal amount of $30,000,000. (13)
10.11 $85,785,000 Banco Popular de Puerto Rico 1992
Grantor Trust 1 Mortgage Pass - Through
Certificates, Class A, offering memorandum dated
June 25, 1992. Underwriting Agreement by and
between Merrill Lynch, Pierce, Ferrer & Smith
Incorporated, acting through its Puerto Rico
branch office and Lehman Brothers Puerto Rico, Inc.
and Banco Popular de Puerto Rico dated June 25, 1992;
Insurance Agreement by and between Municipal Bond
Investors Assurance Corporation as Insurer, Banco
Popular de Puerto Rico as Settlor, Banco Popular
26
27
de Puerto Rico as Servicer, Banco Central as
Collateral Agent and Banco Central as Trustee
dated June 25, 1992. (14)
10.12 Credit Agreement by and between BanPonce Corporation,
BanPonce Financial Corp., Vehicle Equipment Leasing,
Company, Inc. ("The Companies") and Citibank, N.A.
for borrowing up to the principal amount of
$35,000,000 dated as of May 22, 1992; Credit Agreement
by and between the Companies and Barclays Bank PLC,
acting through its Miami Agency for borrowings up to
the principal amount $25,000,000 dated as of May 19,
1992; Credit Agreement by and between the Companies
and The First National Bank of Chicago, acting
individually and as agent, for borrowings up to
the aggregate amount of $40,000,000 dated as of
May 1, 1992. (15)
10.12.1 First and Second Amendments to Credit Agreement
by and between BanPonce Corporation, BanPonce Financial
Corp., Vehicle Equipment Leasing,Company,Inc. ("The Companies")
and Citibank,N.A. for borrowings up to the
principal amount of $50,000,000 dated as of April 8, 1993
and May 21, 1993, respectively. First and Second
Amendments to Credit Agreement by and between the
Companies and Barclays Bank PLC, acting through its
Miami Agency for borrowings up to the principal amount
of $45,000,000 both dated as of April 2, 1993. First and
Second Amendments to Credit Agreement by and between the
companies and the First National Bank of Chicago, acting
individually and as agent, for borrowings up to
$60,000,000 dated April 1, 1993 and June 1, 1993
respectively.
10.12.2 Credit Agreement by and between BanPonce Corporation,
BanPonce Financial Corp., Vehicle Equipment
Leasing,Company,Inc. and Chemical Bank for borrowings up
to the principal amount of $25,000,000 dated as of April 1, 1993
as amended on June 1, 1993.
12.0 Computation of ratio of earnings to fixed
charges.
13.1 Registrant's Annual Report to Shareholders for
the year ended December 31, 1993.
21.1 Schedule of Subsidiaries
23.1 Consent of Independent Auditors
99.1 Registrant's Proxy Statement for the April 22,
1994 Annual Meeting of Stockholders
- - - - - --------------------
(1) Incorporated by reference to Exhibit 4.1 of Registration
Statement No. 33-39028.
(1a)Incorporated by reference to exhibit 4.1 of the Corporation's
Annual Report on Form 10-K for the year ended December 31, 1990
(the "1990 Form 10-K").
27
28
(2) Incorporated by reference to Exhibit 4.3 of Registration Statement
No. 33-39028.
(2a) Incorporated by reference to Exhibit 4(c) to Registration
Statement No. 33-41686.
(2b) Incorporated by reference to Exhibit 2 on Form 8-K filed on
October 8, 1991.
(2c) Incorporated by reference to Exhibit 3 on Form 8-K filed on
October 8, 1991.
(3) Incorporated by reference to Exhibit 4.4 of Registration
Statement No. 33-39028.
(4) Incorporated by reference to Exhibit number 10.2 of Registration
Statement No. 33-00497.
(5) Incorporated by reference to Exhibit 10.3 of the 1991
Form 10-K.
(6) Incorporated by reference to Exhibit 10.8 of the 1991
Form 10-K.
(7) Incorporated by reference to Exhibit 10.9 of the 1991
Form 10-K.
(8) Incorporated by reference to Exhibit 10.10 of the 1991
Form 10-K.
(9) Incorporated by reference to Exhibit 10.12 of the 1991
Form 10-K.
(10) Incorporated by reference to Exhibit 10.13 of the 1991
Form 10-K.
(11) Incorporated by reference to Exhibit 10.14 of the 1991
Form 10-K.
(12) Incorporated by reference to Exhibit 10.19 of the 1991
Form 10-K.
(13) Incorporated by reference to Exhibit 10.6 of the 1991
Form 10-K.
(14) Incorporated by reference to Exhibit 10.14 of the 1992
Form 10-K.
(15) Incorporated by reference to Exhibit 10.15 of the 1992
Form 10-K.
28