FirstBank will appeal the court’s decision on the pending collateral.

First BanCorp on Monday announced the U.S. Bankruptcy Court for the Southern District of New York denied the bank’s motion for summary judgment filed in connection to $66.6 million it had posted as collateral with Lehman Brothers Inc., which filed for Ch. 11 nearly five years ago.

“When Lehman filed for bankruptcy, it did not return that collateral and transferred it to Barclays Capital,” First BanCorp.’s President Aurelio Alemán explained to this media outlet.

The issue at hand relates to the claim that the bank filed against Barclays Capital in an attempt to recover the securities — or the cash equivalence —  that were posted as collateral in connection with certain interest hedge agreements executed with a Lehman affiliate.

“At the time, we filed two claims, one was informing Barclays that the collateral belonged to us and another under the Securities Investors Protection Act (SIPA), stating our status as client and saying when the time came to distribute, that sum was ours,” Alemán said. “We never got anything back and had that pending as a pending account receivable, even though in reality, it’s a non-performing asset.”

In fact, FirstBanCorp classified the pledged securities as a non-performing asset with a book value of $64.5 million in 2009.

Because of the bankruptcy court’s decision last Friday, FirstBank’s parent company determined “it is probable that the asset has been impaired” and will recognize the $64.5 million, plus $2.1 million in accrued interest, as an NPA during the second quarter of 2013 to write-off the carrying value of the pledged securities.

The bank intends to appeal the court’s decision denying its Motion for Summary Judgment, the financial institution stated.

In addition to this lawsuit, the corporation continues to pursue its claim filed in the bankruptcy court in January 2009 in the proceedings under SIPA with regard to Lehman, on the basis that it was a “customer” that “entrusted” the pledged securities to Lehman for safe keeping, and, accordingly, should be afforded protection thereunder. The court has yet to revolve on the corporation’s claim.

“Over the past three years we have been diligently working with counsel in this litigation and have been reporting the status of the litigation in our corporate filings. Based on Friday’s court decision, we have determined to take the full impairment charge,” Alemán said.

“We will continue our efforts through the legal process to recover the value of the assets that we strongly believe belong to the corporation,” he said. “Despite the impact of this charge in the second quarter, our capital ratios will remain strong.”

From left: Antonio Pertiñez, senior vice president of marketing and public relations and Karla Colón, marketing and business intelligence manager at FirstBank.

“Emotions” — or the transformation of a frame of mind, typically accompanied by physiological and behavioral changes in the individual — is the title of FirstBank’s new brand campaign, representing the evolution of its previous institutional efforts.

The $2 million campaign succeeds the “Tu Banco I and II” efforts, which focused on personalizing services. This time around, FirstBank is presenting several executions where the bank supports its customers through different life stages to achieve their dreams and goals.

“We were able to convey the message of our personalized service through the cinematographic resource mnemonic, which allows a mental association to bolster the memory of an experience. On this occasion, we are not substituting names, but emotions,” said Antonio Pertiñez, senior vice president of marketing and public relations at FirstBank.

“This way, by placing the bank’s logo over the face of our customers, we achieved animated executions, through digital handling of movements,” he added.

In a recent Advertising Tracking survey performed by Ipsos Hispania, customers ranked FirstBank in second place among its peers, as the bank that helps them achieve their goals and dreams. At the same time, RepTrack Pulse Puerto Rico’s global assessment performed by Gaither rated FirstBank as the bank with the best reputation, which also validates the consumers’ opinion about the financial institution, Pertiñez noted.

“This success is obtained by a special connection with our customers. The campaign acknowledges the values of our institution, and the capacity of our employees, who day after day make true our brand’s promise… to serve all our customers as if the Bank belongs to each one of them”, added Pertiñez.

The new ad campaign, produced by a team of 60 local professionals, including talent, was executed by Norstrom production house, under the direction of Populicom advertising agency, using digital cameras for the car action shots.

All the locations were filmed in Puerto Rico, to highlight the architectural beauty of important buildings, such as the National Archives of Puerto Rico, the new boarding area of the Luis Muñoz Marín International Airport and the gardens of the Museum of Art of Puerto Rico.

The new campaign includes point-of-purchase material for branches, television and cable executions, outdoor advertising, press, cinema, as well as Internet, Facebook and YouTube integration.

Payment processing firm Evertec’s Cupey headquarters.

Transaction processing firm Evertec Inc. announced $27.5 million in adjusted net income, or a 37 percent year-over-year increase, for the first quarter ended March 31, during which it completed two key transactions: an initial public offering and debt refinancing in April.

“We are pleased to report another quarter of strong financial results and to begin a new chapter as a publicly traded company. Our successful initial public offering and our continued strong financial results are a testament to the value of our best-in-class technology platform, diversified business model and leading franchise,” said Everted CEO Peter Harrington.

The increase in adjusted net income, which compared to the $20.1 million for the same quarter last year, was primarily driven by the same factors impacting adjusted EBITDA and lower pro forma cash interest expense as a result of the refinancing.

On April 17, 2013, Evertec successfully completed its IPO of 28.8 million shares of common stock at $20 per share. The offering included 6.3 million primary shares sold by Evertec and 22.5 million secondary shares sold by certain company stockholders. Net proceeds of about $117.4 million were used to redeem $91 million aggregate principal amount of the 11 percent senior notes due 2018 issued by two of Evertec’s subsidiaries and pay transaction related fees and expenses, the company said.

Concurrent with its IPO, Evertec’s subsidiary entered into $800 million of new senior secured credit facilities comprised of a $100 million revolving credit facility, $300 million term loan A, and $400 million term loan B.

Net proceeds from the loans were used to refinance all of the company’s outstanding indebtedness under its existing senior secured credit facilities and to redeem the portion of the 11 percent senior notes due 2018 that remained outstanding after the application of net primary IPO proceeds. Evertec will reduce its annual interest expense by approximately 55 percent, or $29.6 million annually.

Meanwhile, total revenues for the quarter ended March 31 were $87.3 million, representing an increase of 6 percent as compared to $82.5 million in the prior year.

“These qualities have allowed us to provide our customers with differentiated, value-add services, become the leading payments processor and related technology provider in the Latin American region and to continue to penetrate new markets and geographies,” said Harrington. “We remain excited by the breadth of opportunities available to us to continue to build long-term shareholder value including our continuing ability to capitalize on the powerful secular trends in the high-growth Latin American payments market.”

Meanwhile, the results show that Evertec’s merchant acquiring revenues for the quarter ended reached $17.5 million, a 1 percent decrease to the $17.7 million reported the prior year. The revenue growth comparison in this quarter is impacted by certain effects related to the Durbin Amendment, which went into effect in the fourth quarter of 2011.

The company reported payment-processing revenues of$24.1 million for the quarter, representing an 5 percent increase versus the $22.9 million in the prior year. The growth was primarily driven by an increase in transactions processed and accounts on file, Evertec said.

Finally, business solutions revenues for the quarter were $45.8 million, representing an increase of 9 percent, when compared to $41.9 million in the prior year. Revenue growth was primarily driven by an increase in demand for Evertec’s network and core banking products and services.

Banco Popular and RIncón Health Center executives walk through the future health facility.

Banco Popular de Puerto Rico recently approved $2.5 million in financing to Rincón Health Center Inc. for the construction of the Costa Salud community health center in the western municipality of Rincón.

Costa Salud will be located in the town’s Muñoz Rivera Street, will expand a current location from 9,600 to 22,000 square feet to offer a wide range of health services, including an emergency room (which will operate until 9 p.m.), a clinical laboratory, X-ray, pediatrics, dental, and pharmacy, among others

Construction will follow LEED specifications, granted to green or eco-friendly buildings that save electricity, water and minimize their impact on the environment. Rincón Health Center Inc. is a nonprofit corporation founded in 1975 whose board is composed of community members, including patients themselves of what is now known as the Rincón Health Center and provides private health services to residents of Rincón and surrounding towns.

After the expansion, the new Costa Salud center also will feature several special collaborative programs like Ryan White (AIDS patients), for patients with diabetes and hypertension (including a diabetic foot clinic), home visits to bedridden patients, and an inpatient pediatric asthma program.

“At Banco Popular we’re extremely proud to be partnering with this development that will positively impact the health of residents of Rincón and other western towns,” said Olga Morales, vice president of Banco Popular in the Western Region.

Costa Salud’s mission is to serve uninsured or under-insured patients and provide access to quality services, but also serve all types of patients, including Medicare, Mi Salud beneficiaries, or private insurance holders.

Oriental President José Rafael Fernández

OFG Bancorp, which until earlier this week was known as Oriental Financial Group Inc., revealed its first quarter results Thursday, which reflected income of $17.7 million for the three-month period, up from the $9.5 million reported for the same year-ago quarter, and a loss of $23.3 million, or ($0.53) per share, in the fourth quarter of 20112.

The results are directly related to several factors: the acquisition of Banco Bilbao Vizcaya Argentaria, S.A.’s Puerto Rico operations on Dec. 18, 2012; the deleveraging of the investment securities portfolio; and continued organic growth that “transformed OFG’s profitability in line with its strategic direction.”

“We are off to an excellent start for the year,” said OFG Bancorp President José Rafael Fernández. “Our first quarter 2013 results demonstrate OFG’s much improved earnings capability and quality. By the end of last year, we had transformed our balance sheet.”

“In the first quarter we transformed our income statement. We expect results to continue to benefit from our more diversified business portfolios as well as increased scale and leadership in our market,” he said.

Return on assets for the quarter stood at 0.95 percent, return on equity was 10.14 percent, while the efficiency ratio was 56.1 percent – all of which represent improvements from both the year ago and preceding quarters, the bank’s report shows.

“ROA, ROE and the efficiency ratio were on, or moving toward, our targets of more than 1.00 percent and 12.00 percent, and the low 50 percent range, respectively. Capital is growing, and we are realizing the anticipated benefits of the acquisition,” Fernández said.

OFG Bancorp’s, interest income from loans totaled $100.5 million, up 153.4 percent from the year-ago quarter and 109.8 percent from the preceding quarter, while interest income from investments of $13.1 million declined 56.6 percent from the same quarter in 2012 and 20.3 percent from the fourth quarter of last year.

The changes primarily reflect OFG’s significantly larger and higher yielding loan assets, along with the sharply reduced size of the investment securities portfolio, the bank said.

“With 1Q13 earnings meeting expectations, we are on track to achieve our initial guidance of $1.40 GAAP EPS for 2013. Operations are moving in line with our plan. The loan portfolio is performing well,” he said.

The bank’s total net loans of $5.2 billion were up 215.3 percent from a year ago and up slightly from Dec. 31, 2012. The non-covered loan portfolio of $4.8 billion was up 305.6 percent year over year and 1.0 percent from the end of 2012.

Net loans covered by the FDIC loss-share — certain former Eurobank loans taken over after Oriental purchased the troubled bank in 2010 — continued to pay down, declining to $379.7 million, a decrease of 17.8 percent from a year ago and 3.9 percent from the end of last year.

“Credit quality remains strong. The pipeline for loan generation is building as expected, and integration is moving ahead smoothly,” Fernández noted.

Total bank and wealth management revenues of $23.2 million were up 102.2 percent from the year ago quarter and 58.1 percent from the preceding quarter. The increase reflects a full quarter of OFG’s larger fee generating businesses, particularly as related to banking service fees and mortgage banking activities, as well as overall organic growth.

From left: Puerto Rico Community Foundation President Nelson I. Colón-Tarrats, Jesús Méndez, vice president of Doral’s Puerto Rico operations, and Lucienne Gigante, vice president of the bank’s marketing, public relations and community division.

Doral Bank unveiled details Wednesday of the second edition of its “Mujeres d Éxito,” institutional program that aims to bolster Puerto Rican women’s professional and economic development. The bank will be investing $1 million in several initiatives within the community program, namely “Despegue Empresarial,” “Fondo Doral,” “Internado Doral” and “Ruta Mujeres d Éxito.”

“In Puerto Rico, one of every three families is led by a woman. As women’s professional participation increases, so does her accountability in the financial decision-making process. Therefore, it is evident that if we support women in the entrepreneurial sense, we will also support Puerto Rico’s economy and job creation,” said Jesús Méndez, vice president of Doral’s Puerto Rico operations.

“For that reason, delivering on our promise of making the difference in our communities, this year we increase the assignments given through the program’s initiatives,” he added.

“Mujeres d Éxito” launched in 2011 and has had a positive impact on more than 500 women through capital and mentorship, bank officials said. The bank’s program has also propelled the creation of more than 50 jobs, all in women-led businesses.

One such case is that of María de Jesús-Rodríguez, who through Despegue Empresarial was able to expand her hydroponic produce business under the “VerdeEs” brand, and is now distributing her products to public school lunchrooms.

Through “Despegue Empresarial,” which has benefitted 10 businesses led by women and has created more than 30 jobs, Doral will distribute up to $50,000 to 20 small, women-led businesses this year. The program will also assign $30,000 in loans through the Puerto Rico Community Foundation to benefit 15 additional businesses.

This program’s application deadline is June 24, at 5 p.m. The application is found online and should be delivered to Doral’s Roosevelt Avenue headquarters.

Doral also partners with the Community Foundation to develop microloans through Fondo Doral, which last year helped create 14 new businesses and 28 jobs in a variety of industries such as tourism, art, education, food service and finance. One of those organizations, nonprofit Incubadora Microempresa Bieke, is in Vieques, where the unemployment rate is significant.

“Women are drivers of economic development. It is a fact evidenced in multiple studies, and one we believe to be true at [the Puerto Rico Community Foundation]. Collaborating with Doral for the second year in a row by administering Fondo Doral, part of the program Mujeres d Éxito, fills us with satisfaction,” the nonprofit organization’s President, Nelson I. Colón-Tarrats, said.

“This collaboration lets us be part of the strengthening of the nonprofit sector to provide the capital needed to promote self-employment. We are convinced that if we strengthen the entrepreneurial capacity of women, we will also strengthen the economic activity of their communities,” he added.

This year, Fondo Doral will also benefit new nonprofits, the Communities Business Financing Corporation and the United Retailers for Camuy Community Development, and renew support to others already benefiting, namely the Trujillo Alto Economic Development Corporation, the Ceiba Economic Development Corporation, the Promotion and Human Development Office, as well as the Vieques nonprofit. Doral’s total investment will be $100,000.

Internships and roadshow
Through its “Internado Doral” initiative, the bank will extend its internship program, working with partner universities to give students a chance to gain hands-on experience. Last year, the bank offered about 12 students a chance to learn the ropes, working with Sacred Heart University, University of Puerto Rico in Río Piedras and Bayamón, Universidad del Turabo, and the Polytechnic University to pick the interns.

The next internship session begins in August, along with the school semester. As part of this initiative Doral also sponsors “Style a Student,” to prepare senior year students for their first job through leaderships and work ethics workshops.

Meanwhile, Doral returns with an expanded “Ruta Mujeres d Éxito,” which will make stops in four new locations: Mayagüez, Ponce, Río Grande and Puerto Nuevo. The bank will offer free workshops every Saturday in June.

Banco Popular’s headquarters in Hato Rey.

Popular Inc. reported a first quarter loss of $120.3 million that reflected some $189.6 million in after-tax losses and adjustments related to the sale of a bad loan portfolio and other assets.

Excluding the effect of the transaction completed last month, Popular Inc. would have reported adjusted net income of $60.3 million for the three-month period, according to the bank’s latest financial report released Thursday.

Through the sale of about $509 million in non-performing loans and other assets, the financial institution’s bad loan portfolio declined by $565.2 million, or 32 percent, quarter over quarter.

“We delivered a good underlying performance in the quarter and two important transactions were completed in recent weeks,” said Popular Inc. CEO Richard Carrión.

“The non-performing asset sale, the successful [initial public offering] of EVERTEC and the continuing organic improvements in our credit quality build on our efforts to de-risk our balance sheet, build capital and continue to drive value for our shareholders,” he said.

EVERTEC Inc.’s recently completed initial public offering benefited Popular Inc. as a minority owner as it stands to receive about $254.3 million from the $505.3 million raised through the sale of 25.3 million shares. Popular Inc. will recognize an after-tax gain of approximately $169.4 million during the second quarter of 2013.

“The EVERTEC IPO also represents an important step toward clarifying and realizing the significant value of our stake,” said Carrión during a call with investors Thursday, noting that the IPO price puts a value of some $530 million on the 33.5 percent stake Popular Inc. retains.

Credit quality improves on NPL drop
Meanwhile, Popular Inc.’s credit quality continued to improve as a result of its strategies to reduce non-performing loans and stabilize and improve the economic conditions of its current loan portfolios.

The bank’s non-performing loan portfolio decreased by $374.5 million, or 26 percent, from the fourth quarter of 2012, and 55 percent from peak levels in the third quarter of 2010 as a result of the sale in March.

“By selling nearly one-third of our [non-performing assets], we have substantially de-risked our balance sheet and made a positive contribution to future profitability. In addition, we retained a 24.9 percent interest in the acquiring entity, which ensures that we will participate in any future upside,” Carrión told industry analysts during the call.

TARP and the economy
During the presentation, Carrión addressed the looming issue of repaying the $935 million loan the bank has pending with the U.S. government’s Troubled Asset Relief Program.

Popular Inc. President Richard Carrión

Carrión said the proceeds from the EVERTEC IPO, combined with the gain from the recent non-performing loan sale — which add up to about $530 million combined — brings a “boost to our capital rations and represents another important step toward an ultimate TARP exit.”

“I know many of you would like to know when we might exit from TARP and what I can tell you is that I will continue to work with our regulators to chart a path toward [an] exit. I cannot provide a definitive time frame for you since the ultimate decision is up to the regulators,” he said, noting the bank is in discussions with the U.S. Treasury and the Federal Reserve on which avenue to take.

“But yes, we’ve looked at different scenarios for paying it off, with clearly some component of the EVERTEC proceeds,” he said.

Meanwhile, the veteran banking executive expressed optimism on an eventual economic recovery for Puerto Rico based on recent actions by the government.

“We mentioned before that we are very encouraged by the fiscal team that the new governor has appointed. Recent signing into law of the Puerto Rico retirement plan reform was a big accomplishment early on for the administration. And that, along with completing the airport transaction and other steps being taken, advances the agenda to improve the fiscal standing of the Commonwealth and pave the way for an eventual economic recovery,” Carrión said.

“There’s still a couple of areas that need to get tackled, specifically the Highway Authority and the [Puerto Rico Electric] Power Authority seem to be two large structural issues,” he said. “The governor is focused, I think, on job creation and we think that’s the right metric. But he’s been there 100 days, so you can’t expect too much change.”

Río Piedras-based Evertec is going public today.

EVERTEC Inc. announced Thursday it has priced its shares at $20 for an initial public offering through which it could raise about $500 million for up to 25.2 million shares for going public.

The transaction processing company is putting up 6.2 million of the shares, while company stockholders Apollo Global Management and Popular Inc. will sell a combined 19 million shares. While Apollo will offer 10.2 million, minority owner Popular Inc. is looking to unload 8.8 million shares.

The shares are expected to begin trading on the New York Stock Exchange today under the symbol “EVTC.” The offering is expected to close on or about April 17, 2013, subject to customary closing conditions.

In a statement issued Thursday, Evertec said it expects to garner $117.4 million from the 6.25 million it is offering, after discounts and commissions. It intends to use a substantial portion of the net proceeds of the offering to repay existing indebtedness. EVERTEC will not receive any proceeds from the sale of shares by selling stockholders.

IPO underwriters will have a 30-day option to buy up to an additional 3.7 million shares of common stock from Apollo at the initial public offering price, minus underwriting discounts and commissions.

After the IPO, Apollo and Popular will own 33.6 percent and 33.5 percent, respectively, of Evertec’s oustanding shares. However, if the underwriters’ 30-day option is exercised in full, then Apollo will retain 28.8 percent ownership and Popular will hold on to 33.5 percent.

Goldman, Sachs & Co., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Deutsche Bank Securities Inc., BofA Merrill Lynch, Credit Suisse Securities (USA) LLC and UBS Securities LLC are acting as joint bookrunners for the offering.

William Blair, Apollo Global Securities, LLC and Popular Securities, Inc. are acting as co-managers of the offering.

FirstBank looks to continue cleaning up its balance sheet through the sale of its bad loan portfolio.

FirstBank Puerto Rico has entered into three separate agreements to sell a total of $532 million bad commercial loans with a book value of $315 million, for $201 million, or 38 percent of the unpaid principal balance.

The bank will take a pre-tax loss of about $65 million in reserves. However, upon closing the deal, FirstBank will reduce its nonperforming assets by approximately 23 percent or $282 million. FirstBank’s non-performing asset-to-total-asset ratio as of Dec. 31, 2012 decreases from 9.45 percent to 7.30 percent, bank officials said.

“Through aggressive remediation, these transactions are a positive step as we work toward achieving our goal of substantially reducing problem assets. While there is an impact to earnings, these transactions greatly improve our credit risk profile,” said FirstBank President Aurelio Alemán. “In addition to improving our risk profile and reducing expenses, these transactions will free up time for management to focus on growth opportunities.”

On March 28, FirstBank completed the sale to Lone Star Funds of a portfolio of non-performing and classified commercial real estate loans, construction loans, and commercial loans with an unpaid principal balance of $378 million and book value of $216 million. The transaction will result in a pre-tax loss, net of reserves, of approximately $60 million, including estimated transaction expenses.

The purchase price for the assets is equal to 31.8 percent of the unpaid principal balance of the loans, or $120 million in an all cash transaction.

FirstBank has also entered into two other transactions — a definitive agreement and a Letter of Intent, with other third-party investors to sell an additional $154 million of unpaid principal balance and $99 million of book value in nonperforming commercial and construction loans, which could occur in the second quarter of 2013.

The combined sales price for the two transactions under agreement is $81 million, or 52 percent of unpaid principal balance. These transactions will result in a pre-tax loss net of reserves of approximately $5 million, the bank noted.

Banco Popular’s headquarters in Hato Rey.

Banco Popular de Puerto Rico announced Monday it completed the previously announced sale of a portfolio of non-performing commercial and construction loans, and commercial and single-family real estate owned, with a combined unpaid principal balance on loans and appraised value of other real estate owned of approximately $995 million and book value of approximately $540 million to an entity majority owned by a joint venture between Caribbean Property Group LLC and certain affiliates of Perella Weinberg Partners’ Asset Based Value Strategy.

As part of the transaction, Banco Popular will acquire a 24.9 percent equity interest in the purchasing entity.

The purchase price for the assets was approximately $338 million, or 34 percent of the sum of the unpaid principal balance of the loans and the appraised value of the other real estate owned as of the agreed cut-off date, adjusted for certain collections and advances.

As previously announced, the transaction will significantly reduce Popular’s non-performing assets and credit-related expenses.

The transaction is expected to result in an after-tax loss of approximately $179 million, which will be recognized in the first quarter of 2013.

This transaction is similar to another completed in September 2011, when Popular sold a portfolio of mostly non-performing construction and commercial real estate loans with a book value of about $148 million to a joint venture by Goldman Sachs & Co., Caribbean Property Group LLC and East Rock Capital LLC.

From left: Dacio Pasarell, chief banking operations officer of FirstBank; FirstBank President Aurelio Alemán; and Marcelo Annarumma, managing director, FIS Latin America and Caribbean.

FirstBank Puerto Rico announced Wednesday it has formalized a seven-year strategic alliance with FIS, a global provider of banking and payment technologies, to provide state-of-the-art products and services to its clients.

Through this alliance, FirstBank will have the capabilities to proactively take action on constant regulatory changes and data security requirements, integrate its systems platform, launch new initiatives and complete projects more rapidly, as well as have access to new products and services, bank officials said.

“This agreement will help us accelerate the execution of our strategic objectives and will better prepare our organization for future growth,” said FirstBank President Aurelio Alemán. “It will certainly position us at the forefront in banking technology services, resulting in additional benefits to our customers, thus, strengthening our reputation as a leader in customer service in the local financial industry.”

Starting April 1, 2013, FIS will manage FirstBank’s Data Center and will be in charge of all technology related matters. The bank will, in turn, maintain control over priorities and business opportunities, and will also retain the project management functions.

FIS serves more than 14,000 institutions in more than 110 countries and employs more than 35,000 people. Its global expertise in software and technology management, including third party platforms, will provide FirstBank access to best practices in the technology industry.

“We’re delighted to be working with FirstBank Puerto Rico,” said Marcelo Annarumma, managing director, FIS Latin America & Caribbean. “The agreement will allow us to bring our global expertise in outsourcing for Financial Institutions to bear for the benefit of FirstBank and its customers.”

The deal also gives FirstBank access to FIS’ leading portfolio of banking and payment applications as they launch new products and services and drive their business forward into new markets, he said.

Popular Inc. President Richard Carrión

The Federal Reserve Bank of New York announced Friday that Popular Inc. President Richard Carrión has been elected a Class A director for a three-year term representing Group 1 which consists of banks with capital and surplus of more than $1 billion.

Carrión, who is also CEO of Banco Popular de Puerto Rico, was elected in 2008 by the Group 2 banks to serve on the Fed’s board. At that time, Banco Popular de Puerto Rico had a capital and surplus of less than $1 billion and therefore was classified as a Group 2 bank. Banco Popular de Puerto Rico now has a capital and surplus exceeding $1 billion and therefore has been reclassified as a Group 1 bank.

An election for a Group 2 director in Class A will be held shortly to fill the post Carrión leaves vacant. Carrión previously served as a Class A Director of the Federal Reserve Bank of New York for the year 1999.

The possibility of Carrión moving up the ranks of the Fed board had been circulating for several months.

Carrión was born in San Juan and received a bachelor’s degree from the Wharton School of Finance and Commerce in 1975 and a master’s degree in Management Information Systems from the Massachusetts Institute of Technology in 1976, the same year he joined Banco Popular.

Among his other activities, he oversaw the implementation of the ATM system throughout the branch network in Puerto Rico and the United States, and the implementation of numerous electronic services to facilitate banking transactions.

Carrión is president of Banco Popular Foundation, and is a member of the board of Verizon Communications. He has been a member of the International Olympic Committee since 1990 and currently chairs the Finance Commission and was elected to the IOC Executive Board in 2004.

In its report, EVERTEC noted that the income tax benefit granted by the government late last year slashed the company’s tax expenses by half to $800,000 for the quarter, when compared to the same period the prior year.

EVERTEC Group, LLC reported Thursday consolidated results for the fourth quarter and year ended December 31, 2012, reporting $91 million and $341.7 million for each respective period. Both results were up 6 percent year-over-year, company executives said.

“We are pleased to report another strong quarter and year of double-digit Adjusted EBITDA growth and revenue increases across our business lines,” said EVERTEC President Peter Harrington. “Our continued strong financial performance is a testament to the value of our diversified business model, which has enabled us to provide our customers with differentiated, value-add capabilities and successfully penetrate new markets and geographies.”

The EVERTEC executive listed a “number of important steps” taken during 2012, including obtaining a 15-year tax grant from the government of Puerto Rico, which “has structurally enhanced our advantaged free cash flow profile and further positions us to compound our momentum in the Latin American payments market,” Harrington said.

Total revenues for the quarter ended Dec. 31, 2012 represented an increase of $5.4 million compared to the corresponding 2011 period, which reflected an increase in merchant acquiring revenue of $100,000, payment processing revenue of $2.4 million — reflecting a 6 percent increase attributed to an increase in volume and higher demand for services — and business solutions revenue of $2.9 million.

In its report, EVERTEC noted that the income tax benefit granted by the government late last year slashed the company’s tax expenses by half to $800,000 for the quarter, when compared to the same period the prior year.

Meanwhile, total revenue for the 12-months ended Dec. 31, 2012 were $341.7 million, representing an increase of $20.6 million or 6 percent when compared to the same period in 2011.

Merchant acquiring revenue for the year reached $69.6 million, representing an increase of $7.6 million or 12 percent as compared 2011. Payment processing revenue for 2012 was $94.8 million, representing an increase of $9.1 million or 11 percent when compared to the prior year, attributed to an increase in volume.

Business Solutions revenues for the year ended Dec. 31, 2012 were $177.3 million, representing an increase of $3.9 million or 2 percent as compared to the corresponding 2011 period, primarily due to higher demand for services, EVERTEC said in its report.

Total operating costs and expenses, excluding depreciation and amortization, for the year ended December 31, 2012 were $190.2 million, representing an increase of $1.5 million or 1 percent as compared to the 2011 period. The increase was associated with an increase in revenues, partially offset by a reduction in personnel costs.

Gilberto Monzón (right) discusses Popular Mortgage’s results, as Pablo Pérez (left) and Mariel Arraiza (center) look on.

Popular Mortgage closed 10,400 new mortgages and refinancing loans in Puerto Rico last year, representing about $1.5 billion for the bank that as a result locked down a market share of about 31 percent in 2012, financial institution officials said Thursday.

During a news conference, Pablo Pérez, president of Popular Inc.’s loan division, said last year’s results were the best in seven years in a market that has been on a rollercoaster ride due to its slumped economy.

“For Popular Mortgage these results are the highest in the past seven years, which responds to the attractive interest rates and market strategies focused on the client’s welfare and the experience of our colleagues,” said Pérez.

Popular Mortgage’s results reflected a 20 percent year-over-year growth, when compared to the $1.2 billion in loan activity it reported for 2011. When put into context, Puerto Rico’s total mortgage activity totaled about $4.9 billion last year, a slight increase from the $4 billion on record for 2011.

The 10,400 loans Popular Mortgage closed are split between 3,800 new loans and 6,600 refinancing agreements, which Pérez said practically doubled year-over-year. While this type of arrangement represented 33 percent of the bank’s activity in 2011, it swelled to 60 percent last year, as new home sales dropped to 40 percent from 67 percent year-over-year.

Unsurprisingly, the majority (82 percent) of the refinancing agreements were structured as governmental and conforming loans, while the remaining 18 percent were non-conforming loans.

Significant savings
By refinancing last year, average customers were able to shave off about $171 from their monthly payment, bank executives said.

When multiplied by the average 30-year loan, the savings total about $61,500 at interest rates that in some cases came down to 3.16 percent.

“The past few years have been full of challenges for the industry, but the effort and clear and specialized guidance of our colleagues at Popular Mortgage paid off,” said Gilberto Monzón, executive vice president Popular’s individual credit group.

Springboarding off those reported savings, Popular Mortgage launched Thursday its latest ad campaign focused on the “More in your pocket” slogan, through which it will depict everything consumers can achieve with the left over money they will have when signing up to the bank’s products and services.

“That at the end of the day the customer can keep more in their pocket is the job of the Popular Mortgage team, that’s why they’re experts in mortgages,” said Mariel Arraiza, Banco Popular’s first vice president of marketing and business intelligence.

The $2 million multimedia campaign is the follow up to the bank’s “Eres” initiative launched last year.

Carlos V. Ubiñas, CEO of UBS Financial Services Incorporated of Puerto Rico.

UBS Puerto Rico executives announced Wednesday the creation of the U.S. Municipal & Income Fund Inc., an additional investment alternative to its existing portfolio of funds.

UBS Financial Services Incorporated of Puerto Rico is distributing the fund exclusively.

“We have designed a new fund to further broaden our offering of investment alternatives to address the needs of investors in Puerto Rico,” said Carlos V. Ubiñas, CEO of UBS Financial Services Incorporated of Puerto Rico. “The fund seeks to provide monthly income through the distribution of dividends consistent with the preservation of capital.”

The fund offers tax benefits under the Puerto Rico tax code, while it invests up to 80 percent of its assets in U.S. municipal securities and at least 20 percent in Puerto Rico taxable securities, Ubiñas explained.

“It is a great addition to the family of funds,” he said.

Generally, the fund is 100 percent exempt from estate taxes in Puerto Rico and the United States. The investment advisor of the fund is UBS Asset Managers of Puerto Rico, which manages the UBS family of funds in Puerto Rico.

Meanwhile, Nuveen Asset Management, LLC will manage the U.S. municipal bond portion. A recognized leader in the U.S. municipal bond market, Nuveen is responsible for more than $90 billion of municipal assets as of Dec. 31, 2012, and draws upon its history of financing Puerto Rico’s infrastructure and essential services, dating back more than 80 years ago, the company said in a statement.

The U.S. Municipal & Income Fund invests at least 95 percent of its assets in investment grade instruments and is an open-end fund that offers daily purchases and redemptions of shares exclusively for Puerto Rico’s residents, Ubiñas concluded.