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Deposits and Related Interest

12 Months Ended

Dec. 31, 2014

NOTE 12— DEPOSITS AND RELATED INTEREST

Total deposits as of December 31, 2014 and 2013 consist of the following:

	December 31,
	2014		2013
	(In thousands)
Non-interest bearing demand deposits	$	745,142	$	744,327
Interest-bearing savings and demand deposits		2,544,665		2,489,971
Individual retirement accounts		303,049		347,262
Retail certificates of deposit		452,150		568,367
Institutional certificates of deposit		260,090		405,224
Total core deposits		4,305,096		4,555,151
Brokered deposits		619,310		828,114
Total deposits	$	4,924,406	$	5,383,265

Brokered deposits include $526.2 million in certificates of deposits and $93.1 million in money market accounts at December 31, 2014, and $729.8 million in certificates of deposits and $98.3 million in money market accounts at December 31, 2013.

The weighted average interest rate of the Company's deposits was 0.66% and 0.73% at December 31, 2014 and 2013 respectively, inclusive of non-interest bearing deposits of $745.1 million and $744.3 million, respectively. Interest expense for the years ended December 31, 2014 and 2013 was as follows:

	Year Ended December 31,
	2014		2013		2012
	(In thousands)
Demand and savings deposits	$	17,724	$	22,498		11,232
Certificates of deposit		16,230		18,479		18,417
	$	33,954	$	40,977		29,649

At December 31, 2014 and 2013, demand and interest-bearing deposits and certificates of deposit included deposits of Puerto Rico Cash & Money Market Fund, Inc., which amounted to $96.8 million and $93.1 million, respectively, with a weighted average rate of 0.78% for 2014 and 0.77% for 2013 and were collateralized with investment securities with a fair value of $76.3 million and $67.5 million, respectively.

At December 31, 2014 and 2013, time deposits in denominations of $100 thousand or higher, excluding accrued interest and unamortized discounts, amounted to $608.1 million and $845.8 million, including public fund time deposits from various Puerto Rico government municipalities, agencies, and corporations of $6.9 million and $26.7 million, respectively, at a weighted average rate of 0.50% and 0.32% at December 31, 2014 and 2013.

At December 31, 2014 and 2013, total public fund deposits from various Puerto Rico government municipalities, agencies, and corporations amounted to $318.5 million and $328.6 million, respectively. These public funds were collateralized with commercial loans amounting to $414.5 million at December 31, 2014, and with investment securities with a fair value of $97.8 million and commercial loans amounting to $549.0 million at December 31, 2013.

Excluding equity indexed options in the amount of $4.2 million, which are used by the Company to manage its exposure to the S&P 500 Index, and also excluding accrued interest of $1.7 million and unamortized deposit discount in the amount of $787.5 thousand, the scheduled maturities of certificates of deposit at December 31, 2014 are as follows:

	December 31, 2014
	(In thousands)
Within one year:
Three (3) months or less	$	382,673
Over 3 months through 1 year		395,057
		777,730
Over 1 through 2 years		458,882
Over 2 through 3 years		213,570
Over 3 through 4 years		49,401
Over 4 through 5 years		35,176
	$	1,534,759

The table of scheduled maturities of certificates of deposits above includes brokered deposits.

The aggregate amount of overdrafts in demand deposit accounts that were reclassified to loans amounted to $845 thousand and $1.8 million as of December 31, 2014 and 2013, respectively.

- Definition

The entire disclosure for deposit liabilities including data and tables. It may include a description of the entity's deposit liabilities, the aggregate amount of time deposits (including certificates of deposit) in denominations of $100,000 or more at the balance sheet date; the aggregate amount of any demand deposits that have been reclassified as loan balances, such as overdrafts, at the balance sheet date; deposits that are received on terms other than those in the normal course of business, the amount of accrued interest on deposit liabilities; securities, mortgage loans or other financial instruments that serve as collateral for deposits; for time deposits having a remaining term of more than one year, the aggregate amount of maturities for each of the five years following the balance sheet date; and the weighted average interest rate for all deposit liabilities held by the entity.

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