FBP » Topics » Non-interest expenses

This excerpt taken from the FBP 8-K filed Nov 3, 2009.

Non-interest expenses

2009 Third Quarter versus 2009 Second Quarter

Non-interest expenses decreased $13.2 million to $82.8 million, from the 2009 second quarter. The decrease in non-interest expenses reflected:

  • An $8.0 million decrease in FDIC assessment fees, as the prior quarter includes $8.9 million of the FDIC special assessment.
  • A $2.2 million decrease in occupancy and equipment expenses, as the prior quarter includes accruals of $2.6 million for the reassessed value of certain real properties.
  • A $1.6 million decrease in the net loss of real estate owned (REO) operations, as the prior quarter includes a $1.5 million write-down to a foreclosed condo-conversion project in Florida. Also contributing to the decrease were lower taxes and maintenance and operating expenses related to properties in Florida partially offset by an increase of $0.9 million in write-downs to repossessed properties in Puerto Rico.
  • A $1.0 million decrease in business promotion expenses, as compared to a higher level of marketing activities in the prior quarter.

All other non-interest expenses were relatively stable as management has worked to control costs through its corporate-wide Business Rationalization initiative.

2009 Third Quarter versus 2008 Third Quarter

Non-interest expenses increased $0.4 million to $82.8 million, from the third quarter of 2008. The slight increase in non-interest expenses is mainly related to:

  • An increase of $3.9 million in the FDIC deposit insurance premium, related to increases in regular assessment rates, which is an uncontrollable expense.

The increase was almost entirely offset by reductions of $3.5 million in controllable expenses such as reductions in employees’ compensation and benefits expenses, mainly due to a decrease in the accrual of bonuses, as well as reductions in business promotion, occupancy, REO losses and taxes (other than income taxes) expenses, partially offset by an increase in professional fees. Management is intensely focused on managing risks, controlling expenses and improving profitability.

The efficiency ratio for the third quarter of 2009 was 46.21% compared to 51.97% for the same period in 2008.

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