EuroBancshares Inc. (EUBK) filed Quarterly Report for the period ended 2009-06-30.
Eurobancshares is a diversified financial holding company headquartered in San Juan Puerto Rico offering a broad array of financial services through its wholly owned banking subsidiary Eurobank and its wholly owned insurance agency subsidiary EuroSeguros Inc. EuroBancshares Inc. has a market cap of $40 million; its shares were traded at around $2.05 with and P/S ratio of 0.3.
Highlight of Business Operations:
Loans that management has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are reported at their outstanding unpaid principal balances adjusted by any partial charge-offs, unearned finance charges, allowance for loan and lease losses, and net deferred nonrefundable fees or costs on origination. The allowance for loan and lease losses is an estimate to provide for probable losses that may have been incurred in our loan and lease portfolio. The allowance for loan and lease losses amounted to $42.7 million, $41.6 million and $30.2 million as of June 30, 2009, December 31, 2008 and June 30, 2008, respectively. Losses charged to the allowance amounted to $18.4 million for the six months ended June 30, 2009, compared to $17.1 million for the same period in 2008. Recoveries were credited to the allowance in the amounts of $1.1 million and $1.3 million for the same periods, respectively. For additional information on the allowance for loan and lease losses, see the section of this discussion and analysis captioned “Allowance for Loan and Lease Losses.”
Total repossessed boats amounted to $589,000, $1.2 million and $1.8 million as of June 30, 2009 and December 31, 2008 and June 30, 2008, respectively. For the quarter and six months ended June 30, 2009, the total loss on sale of repossessed boats was $323,000 and $412,000, respectively, compared to a loss of $105,000 and $169,000 for the same periods in 2008. This increase was primarily attributable to our strategy of being more aggressive in the sale of repossessed boats to expedite their disposition and avoid build-up of inventory. During the six months ended June 30, 2009, we sold 11 boats and repossessed 3 boats, compared to 10 boats sold and 8 boats repossessed during the same period in 2008. Our inventory of repossessed boats totaled 7 units as of June 30, 2009, compared to 16 units as of June 30, 2008. As of June 30, 2009 and December 31, 2008, our boat financing portfolio amounted to $28.2 million and $30.3 million, respectively.
Repossessed equipment amounted to $35,000 and $6,000 as of June 30, 2009 and December 31, 2008, respectively. There was no repossessed equipment as of June 30, 2008. For the quarter and six months ended June 30, 2009, the total amount of repossessed equipment sold amounted to $108,000 and $149,000, respectively, resulting in a total gain of $15,000 and $16,000 for those same periods, compared to $197,000 in equipment sold during the six months ended June 30, 2008, resulting in a total gain of $17,000. No repossessed equipment was sold during the second quarter of 2008.
During the quarter and six months ended June 30, 2009, the average interest yield on a fully taxable equivalent basis earned on net loans was 5.47% and 5.59%, respectively, compared to 5.71% for the previous quarter and 6.45% and 6.83% for the same periods in 2008. Average net loans amounted to $1.693 billion and $1.713 billion for the quarter and six months ended June 30, 2009, compared to $1.734 billion for the previous quarter, and $1.818 billion and $1.827 billion for the same periods in 2008. Average interest yield on a fully taxable equivalent basis earned on investments remained relatively stable at 7.15%, 7.16% and 7.28% for the quarters ended June 30, 2009, March 31, 2009 and June 30, 2008, respectively, while it remained at 7.16% for the six-month periods ended June 30, 2009 and 2008. Average investments amounted to $758.5 million and $810.5 million for the quarter and six months ended June 30, 2009, compared to $863.1 million for the previous quarter, and $826.9 million and $788.8 million for the same periods in 2008.
Nonaccrual loans amounted to $162.4 million, $130.4 million and $86.3 million as of June 30, 2009, March 31, 2009 and June 30, 2008, respectively. If these loans had been accruing interest during the quarter and six months ended June 30, 2009, the additional interest income realized would have been approximately $2.4 million and $4.7 million, respectively, compared to $1.6 million and $3.4 million during the same periods in 2008.
For the quarter and six months ended June 30, 2009, our total interest expense amounted to $21.6 million and $43.7 million, respectively, compared to $22.2 million for the previous quarter, and $25.6 million and $53.0 million for the same periods in 2008. These decreases resulted mainly from the net effect of a re-pricing in all deposit categories and other borrowings under a lower interest rate environment; and a net increase in average interest-bearing liabilities. For the quarter and six months ended June 30, 2009, the average interest rate on a fully taxable equivalent basis paid for interest-bearing liabilities decreased to 3.70% and 3.79%, respectively, from 3.89% for the previous quarter, and 4.59% and 4.85% for the same periods in 2008. During the quarter and six months ended June 30, 2009, average interest-bearing liabilities amounted to $2.558 billion and $2.538 billion, respectively, compared to $2.518 billion for the previous quarter, and $2.510 billion and $2.462 billion for the same periods in 2008.
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