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BUSINESS PROFILE
Eurobancshares, Inc., a financial holding company of Eurobank is a full financial services provider with operations in Puerto Rico. Our institution was incorporated on November 21, 2001 under the laws of the Commonwealth of Puerto Rico to engage, for profit, in any lawful acts or businesses and serve as
the holding company for Eurobank, our wholly-owned banking subsidiary.
| EUBK (Nasdaq) |
Current
Price: |
$6.00
Time: 4:07 PM ET
May 16, 2008 |
| Change: |
 $0.05 |
| Prior Close: |
$5.95 |
| Open: |
$5.99 |
| High: |
$6.05 |
| Low: |
$5.97 |
| Volume: |
4,400 |
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Eurobank founded in 1979, offers full individual and commercial banking services with a particular emphasis in businesses to profitably deliver high quality financial services with a personal touch. The bank also offers auto and lease financing, mortgage, asset and wealth management and consumer lending in our 24 branches throughout the island. Each branch now has the opportunity to sell not only traditional products such as commercial credit, leasing, construction, mortgages, consumer credit, and personal secured loans, but also to cross-sell Eurobancshares' entire product line, including leases and mortgages and investment product opportunities.
As a financial holding company, Eurobancshares is subject to the provisions of the Bank Holding Company Act and to the supervision and regulation by the board of governors of the Federal Reserve System.
We are a relationship-driven financial services company focused on providing personalized banking services. We established our position in the small and middle market business community as a secondary alternative to our larger competitors, who we believed were under-serving the market. Today, we compete head to head with all Puerto Rico commercial banks for the primary banking relationship of these customers. Our personalized customer service and experienced and focused management team are at the core of our strategy. While we have grown in size, we remain focused on providing services with a personal touch. Additionally, we have sought to further develop our footprint throughout the entire island by opening branches along the main vehicular arteries that circle Puerto Rico. By the year 2007, we intend to have a branch located within a convenient drive of approximately 80% of the population of Puerto Rico. We believe this is achievable with a 26 branch network.
Our niche is to provide one-on-one services to small and mid-sized commercial businesses in Puerto Rico. Most of these businesses are involved in service industries, wholesale and retail distribution, dairy farming, construction, manufacturing, transportation and professional services, and have annual sales between $2.0 and $40.0 million. However, we also provide responsive customer service and convenient banking products to smaller companies with sales ranging from $500,000 to $2.0 million, consisting primarily of lawyers, healthcare providers, CPAs, engineers, small contractors and other professionals. While we do not mass market to the retail segment, we do provide retail banking services to the owners and families of our targeted commercial and small business customers, their employees and individuals who reside or work near our branch offices. These customers are usually also depositors of Eurobank. We seek to provide all of our customers with quick, responsive service and foster a culture in which customers are valued and respected.
We target experienced real estate developers and provide them with acquisition, development, and construction loans. We place particular emphasis on single-family homes, townhouses, and walk-up developments throughout the Island. We also finance commercial real estate development and construction projects, particularly if they are owner-occupied, ideally limiting our maximum credit exposure between $7.5 million and $10.0 million for these types of credits. Under the tradename "EuroMortgage," we support these activities by providing financing to the purchasers of these real estate units. In addition, through a staff of salespeople, today we also provide mortgages to our branch customers and the general public. On a selective basis, we provide financing to owner-occupied properties and to a lesser extent to income producing properties.
In 1999, under the tradename "EuroLease," we began providing open-end lease financing pursuant to which the lessee is responsible for the residual value, if any, of the leased asset. This short to medium-term fixed rate financing blends well with our primarily floating rate commercial loan portfolio.
Long-term, it is our objective to leverage our relationships with our primary customers by cross-selling a complete array of banking products and services directly or through third-party providers. Through our trust department and EuroSeguros, we seek to assist our customers with a full array of wealth management products and services.
Our formula is simple: convenient locations, friendly personalized service and a complete line of quality products to supply customer needs, administered by qualified professionals who are customer oriented to make Eurobank …Su Banco Personal.
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FROM THE CHAIRMAN
WHERE WE HAVE BEEN…
WHERE WE ARE…
WHERE WE ARE GOING…
The strategic planning cycle begun at the end of 1993 called for providing the kind of personalized service that would differentiate our small bank in the marketplace. The Bank turned its attention to the commercial sector, and looked for opportunities for expansion that allowed a measured growth, never outstripping its ability to provide the personalized service at the core of our philosophy or reducing the quality of our loan and investment portfolios.
During the following years the Bank focused on assimilating the new acquisition and making new investments in technology, new products, branches in the new millennium. Also in 2001 Eurobank Statutory Trust I, in conjunction with Eurobank, raised in capital. In 2002, Eurobank became a billion dollar asset institution, reaching new heights of performance and acquiring all the issued and outstanding shares of Banco Financiero de Puerto Rico. The outstanding growth in total assets was accompanied by the significant increase in stockholders' equity.
We reported that in 2003 we again reached record-breaking levels of performance with increases in total assets, in net income and in earnings per share, continuing a ten-year tradition of outstanding performance for our shareholders.
In 2004 we were presented with new and significant challenges as we required The Bank & Trust of Puerto Rico, a $550 million asset commercial bank. During this year we are continuing to invest significantly in a rage of initiatives that include opening new branches, restructuring our mortgage origination division, upgrading our technology and devising new strategies for our trust/investment department to provide innovative wealth management services to our customers.
During 2005, despite the challenging interest rate environment and fierce competition, we were able to increase our commercial loan portfolio, which is our main line of business, by over 25%. In addition, during the third quarter of 2005, we repositioned our investment portfolio in an effort to improve our net interest margin.
The 2005 was a very difficult year for the Puerto Rico banking industry and all financial institutions in general. In the last quarter of 2005, we experienced an unexpected increase in the number of repossessed vehicles resulting from the impairment of certain leases in our automobile leasing portfolio. In order to maintain the quality of our leasing portfolio, we tightened our underwriting standards for our automobile loans and hired additional experienced underwriting personnel.
Also, during 2005, we worked to complete the final stages of the integration of the former The Bank & Trust of Puerto Rico ("BankTrust"), which we acquired and merged into Eurobank, our banking subsidiary, on May 3, 2004. We continued preparing and adjusting our platform to leverage this acquisition and expand our business relations with the former customers of BankTrust. Additionally, we continued spreading our footprint throughout the Island by opening two additional branches in Canóvanas and Aguadilla.
The year 2006 was a very difficult year for the Puerto Rico banking industry and all financial institutions in general. The interest rate environment, together with the deterioration in the Puerto Rico economy impacted our performance during the year. However, despite these difficulties, we were able to increase our commercial loan portfolio, which is our main line of business, by almost 17%. Also, it was gratifying to see the beneficial effect of the proactive actions we started taking during the third quarter of 2005 to tighten our underwriting standards and strategically pare back our automobile leasing operations. Nonetheless, we believe we still have room for improvement. The progress toward our strategic goals, together with investments made in our branch network, mortgage business, our centralized operations, and technology continue to provide economies of scale to facilitate gains in market share.
We remain committed to leadership in serving primarily small-and mid-sized clients. This commitment means providing personalized banking services to our customers. We are focus to transform cliché to a true level of continuing and outstanding customer care with a human touch. We must make good on our promise to excel day after day in the eyes of our clients as well as our shareholders.
It is our ambition to become the number one bank in Puerto Rico, not in size but in service. We are recognized as a great place to work, due to the highest ethical values and commitment to the communities we serve. We believe in - "Grande para atender sus necesidades; pequeño para ofrecerle un trato personal"- Big enough to serve your needs; small enough to provide personalized service - sums up our ongoing strategy and goals.
We plan to continue our growth based on strategic accretive acquisitions and "novo" branching.
Our plan for achieving profitable growth continues to emphasize effectively invested assets, efficient sales and marketing of our products and controlled expense levels. In 2007, we expect to move into our new headquarters building. The new facilities will improve our efficiency, consolidating our corporate offices and five different operating locations. We will continue to use technology for efficient delivery of services, operating within a framework of reporting transparency and applying the highest ethical standards in all we do.
Community
Eurobank serves and takes a proactive role in supporting many charities, helping people, community organizations and cultural initiatives that promote a better quality of life. We are strongly committed with our community.
As part of our corporate social responsibility, we are committed to sponsor events such as: sports, educational, non-profit organizations programs, and community activities in which we will integrate our personnel.
This initiative will encourage the relationship between our institution and the community.
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