OFG BANCORP - FORM 8-K - EX-99 - EXHIBIT 99 - October 21, 2016

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8-K - FORM 8-K - OFG BANCORPofg8K20161021.htm

 

 

Exhibit 99

 

OFG Bancorp Reports 3Q16 Results

SAN JUAN, Puerto Rico, October 21, 2016 – OFG Bancorp (NYSE: OFG) today reported results for the third quarter ended September 30, 2016.

3Q16 Highlights

•      Net income available to shareholders totaled $11.7 million, or $0.26 per share fully diluted, compared to $10.9 million, or $0.25 per share fully diluted, in 2Q16. In the year ago quarter, OFG reported $1.1 million, or $0.03 per share fully diluted.

•      Oriental Bank’s overall business performance continued strong. New loan generation totaled $226.8 million. Banking and wealth management fee revenues remained level versus 2Q16. Retail and commercial deposits grew 2.2%. Net new customer accounts continued to increase at a 4% annualized rate.

•      Major credit exposure eliminated. As previously announced, Oriental Bank sold its participation in a Puerto Rico Electric Power Authority (PREPA) fuel line of credit, with the transaction settling after the quarter end. The sale eliminated $183.0 million of non-performing assets.  As a result of the sale, a number of metrics used in this release reflect the exclusion of the PREPA credit facility.

•      Credit quality remained stable, with a meaningful improvement in net charge offs (NCOs), excluding PREPA. NCOs declined to 1.15% from 1.21% in 2Q16 while non-performing loan rates at 3.68% remained nearly level with 2Q16. Separately, early and total delinquencies were below year-ago levels.

•      Capital continued to build. Tangible book value per common share increased to $15.18 from $14.96 in 2Q16. Tangible common equity ratio increased to 10.25% from 9.92%.

•      Net Interest Margin (NIM) expanded to 4.95% from 4.69% in 2Q16. Excluding cost recoveries, NIM rose to 4.70% from 4.64%.

 

 

•      Costs remained under control. The operating efficiency ratio improved to 57.69%, the best level in the last five quarters, as a result of continued focus on optimizing the expense base.

CEO Comment

José Rafael Fernández, President, Chief Executive Officer, and Vice Chairman of the Board, commented: “OFG delivered another strong quarter. Diluted EPS of $0.26 was slightly better than the two prior quarters, and our Return on Average Assets at 0.91% and Return on Average Tangible Common Stockholders' Equity at 7.06% were the highest they’ve been in the last five quarters.

“We continue to deliver consistent earnings while being proactive in our business development strategies and prudently managing balance sheet risk. We are particularly pleased to have found an optimal exit point for the PREPA credit facility. This eliminated our single largest credit exposure and significantly reduced our Puerto Rico government related exposures. It also meaningfully increased our capital ratios and contributed to improved credit quality through a major reduction in non-performing loans.

“Oriental Bank’s franchise growth confirms the successful customer differentiation achieved in our business delivery model, emphasizing higher levels of advisory relationships and superior levels of service.

“New loan generation was good, with solid yield expansion. Retail and commercial deposits rose across all categories, due in part to continued growth in net new customers. We have been able to reduce borrowings, with an important reduction in interest expense and positive contribution to NIM. Non-interest revenues and expenses continue to be well managed, while Oriental seamlessly assumed the servicing of its originated residential mortgage loans portfolio.”

3Q16 Income Statement Highlights

The following compares data for the third quarter 2016 to the second quarter 2016, unless otherwise noted.

•      Interest Income from Loans rose $2.9 million to $82.6 million. A large portion of the increase came from a $2.2 million recovery from former Eurobank loans. While the non-acquired portfolio grew, acquired loan portfolios continued to run off.

•      Interest Income from Securities declined $0.3 million to $8.0 million, mainly due to lower balances in the mortgage-backed securities (MBS) portfolio.

•      Interest Expense declined $0.9 million to $13.7 million due to lower borrowings.

 

 

•      Total Provision for Loan and Lease Losses increased $9.0 million to $23.5 million. Provision for non-acquired loans included $2.9 million towards the sale of the PREPA credit and another $2.9 million for a single commercial loan. Provision for BBVA PR acquired loans included $4.4 million for a Puerto Rico Housing Finance Authority (PRHFA) loan, which now has a carrying amount of $3.5 million or 31% of the unpaid principal balance.

•      Total Banking and Wealth Management Revenues remained level at $18.3 million. Banking service fees increased due to higher transaction volume. Mortgage banking revenues grew, reflecting better mark to market on sales. Wealth management remained level, excluding certain annual broker dealer and insurance fees received in 2Q16.

•      Other Gains reflected a $5.0 million recovery from a Bear Stearns claim of loss in 2009 from the BALTA private label collateralized mortgage obligation.

•      Total Non-Interest Expenses increased $1.1 million to $54.9 million. Total operating expenses were $0.4 million lower despite higher compensation expenses due to the number of business days in the quarter as well as general and administrative expenses for the servicing conversion initiative. OREO related expenses increased $1.2 million as part of normal activities.

•      Income Tax Expense benefited from a $0.3 million resolution of a contingent tax position as well as from a reduction of the effective income tax rate, now estimated at 26.0%.

September 30, 2016 Balance Sheet Highlights

The following compares data as of September 30, 2016 to June 30, 2016, unless otherwise noted.

•      Total Loans Net Held for Investment at $4.30 billion remained level.

•      Total Investments declined $22.2 million to $1.30 billion, mainly due to prepayments in the MBS portfolio.

•      Total Puerto Rico Government Related Exposure fell 50.0% to $202.4 million, when taking the sale of PREPA into account. Balances now primarily consist of loans to the five largest municipalities.

•      Total Deposits increased $110.7 million to $4.75 billion across all categories, reflecting deposits from new and existing clients. Excluding brokered deposits, deposits increased $91.2 million.

 

 

•      Total Borrowings declined $237.0 million to $800.3 million primarily due to net pay down of $200.5 million in FHLB advances and the maturity of a subordinated capital note of $67.0 million.

•      Total Stockholders’ Equity was up $9.0 million to $924.9 million due to the increase in retained earnings.

Credit Quality Highlights

The following compares data as of September 30, 2016 to June 30, 2016, unless otherwise noted.

•      Net Charge-Off Rate (ex-PREPA) at 1.15% fell 6 basis points due to declines in the auto and commercial lending categories.

•      Early Delinquency Rate was 3.70% and total delinquency 6.92%, down 7 and 14 basis points, respectively, from year ago levels due to proactive measures implemented to deal with the economic environment.

•      Non-Performing Loan Rate at 3.68% declined 541 basis points reflecting the sale of PREPA, but was up only 12 basis points from the prior quarter ex-PREPA.

•      Allowance for Loan and Lease Losses fell $50.6 million to $62.2 million, also reflecting the sale of PREPA. As a result, the loan loss reserve ratio to total loans (excluding acquired loans) decreased to 2.06% from 3.53%.

Capital Position

The following compares data as of September 30, 2016 to June 30, 2016, unless otherwise noted.

Regulatory capital ratios continued to be significantly above requirements for a well-capitalized institution.

•      Tangible Common Equity to Total Tangible Assets at 10.25% increased 33 basis points to the highest level in five quarters.

•      Common Equity Tier 1 Capital Ratio (using Basel III methodology) increased to 13.34% from 12.64%.

•      Total Risk-Based Capital Ratio increased to 18.73% from 18.00%.

Conference Call

 

 

A conference call to discuss OFG’s results for the third quarter 2016, outlook and related matters will be held today, Friday, October 21, 2016 at 10:00 AM Eastern Time. The call will be accessible live via a webcast on OFG’s Investor Relations website at www.ofgbancorp.com.  A webcast replay will be available shortly thereafter. Access the webcast link in advance to download any necessary software.

Financial Supplement

OFG’s Financial Supplement, with full financial tables for the third quarter ended September 30, 2016, can be found on the Webcasts, Presentations & Other Files page, on OFG’s Investor Relations website at www.ofgbancorp.com. 

Non-GAAP Financial Measures

In addition to our financial information presented in accordance with GAAP, management uses certain “non-GAAP financial measures” within the meaning of the SEC Regulation G, to clarify and enhance understanding of past performance and prospects for the future. See Tables 9-1 and 9-2 in OFG’s above-mentioned 3Q16 Financial Supplement for reconciliation of GAAP to non-GAAP Measures and Calculations.

Forward Looking Statements

The information included in this document contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and involve certain risks and uncertainties that may cause actual results to differ materially from those expressed in the forward-looking statements.

Factors that might cause such a difference include, but are not limited to (i) the rate of growth in the economy and employment levels, as well as general business and economic conditions; (ii) changes in interest rates, as well as the magnitude of such changes; (iii) a credit default by the government of Puerto Rico; (iv) the fiscal and monetary policies of the federal government and its agencies; (v) changes in federal bank regulatory and supervisory policies, including required levels of capital; (vi) the relative strength or weakness of the consumer and commercial credit sectors and of the real estate market in Puerto Rico; (vii) the performance of the stock and bond markets; (viii) competition in the financial services industry; and (ix) possible legislative, tax or regulatory changes.

For a discussion of such factors and certain risks and uncertainties to which OFG is subject, see OFG’s annual report on Form 10-K for the year ended December 31, 2015, as well as its other filings with the U.S. Securities and Exchange Commission. Other than to the extent required by applicable law, including the requirements of applicable securities laws, OFG assumes no obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.

 

 

 

About OFG Bancorp

Now in its 52nd year in business, OFG Bancorp is a diversified financial holding company that operates under U.S. and Puerto Rico banking laws and regulations.  Its three principal subsidiaries, Oriental Bank, Oriental Financial Services and Oriental Insurance, provide a full range of commercial, consumer and mortgage banking services, as well as financial planning, trust, insurance, investment brokerage and investment banking services, primarily in Puerto Rico, through 48 financial centers. Investor information can be found at www.ofgbancorp.com.  

# # #

Contacts

Puerto Rico: Idalis Montalvo (idalis.montalvo@orientalbank.com) at (787) 777-2847

US: Steven Anreder (sanreder@ofgbancorp.com) and Gary Fishman (gfishman@ofgbancorp.com) at (212) 532-3232

  

 

 

 

 

 

 

 

 

  

OFG Bancorp

  

Financial Supplement

  

 

 

 

 

 

 

  

 

 

 

 

 

 

  

The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation, and investors should refer to our September 30, 2016 Quarterly Report on Form 10-Q once it is filed with the Securities and Exchange Commission.

  
 

 

 

 

 

 

 

  

Table of Contents

  

 

 

 

 

Pages

  

 

 

 

 

 

 

  

 

OFG Bancorp (Consolidated Financial Information)

 

 

  

 

Table  1:

 

Financial and Statistical Summary - Consolidated

 

2

  

 

Table  2:

 

Consolidated Statements of Operations

 

3

  

 

Table  3:

 

Consolidated Statements of Financial Condition

 

4

  

 

Table  4:

 

Information on Loan Portfolio and Production

 

5

  

 

Table  5:

 

Average Balances, Net Interest Income and Net Interest Margin

 

6-7

  

 

Table  6:

 

Loan Information and Performance Statistics (Excluding Acquired Loans)

 

8-9

  

 

Table  7:

 

Allowance for Loan and Lease Losses

 

10

  

 

Table  8:

 

Accretable Yield on Loans Accounted for Under ASC 310-30 (Loans Acquired

 

 

  

 

 

 

   with Deteriorated Credit Quality, Including those by Analogy)

 

11

  

 

Table  9:

 

Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory

 

 

  

 

 

 

   Capital

 

12-13

  

 

Table  10:

 

Notes to Financial Summary, Selected Metrics, Loans, and Consolidated

 

 

  

 

 

 

  Financial Statements (Tables 1-9)

 

14

  

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Table 1: Financial and Statistical Summary - Consolidated

 

  

 

 

 

2016

 

2016

 

2016

 

2015

 

2015

 

2016

 

2015

 

  

(Dollars in thousands, except per share data) (unaudited)

 

 

Q3

 

Q2

 

Q1

 

Q4

 

Q3

 

YTD

 

YTD

 

  

Earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Net interest income

 

 

$

76,927

 

$

73,312

 

$

74,975

 

$

75,622

 

$

89,823

 

$

225,214

 

$

261,750

 

  

Non-interest income, net (core)

(2)

 

 

18,277

 

 

18,284

 

 

17,125

 

 

19,349

 

 

18,703

 

 

53,686

 

 

57,285

 

  

Non-interest expense

 

 

 

54,926

 

 

53,825

 

 

54,857

 

 

58,542

 

 

69,090

 

 

163,608

 

 

189,859

 

  

Pre-provision net revenues

 

 

 

40,278

 

 

37,771

 

 

37,243

 

 

36,429

 

 

39,436

 

 

115,292

 

 

129,176

 

  

Provision for loan and lease losses

(3)

 

 

23,469

 

 

14,445

 

 

13,789

 

 

52,190

(a)

 

51,579

(b)

 

51,703

 

 

109,311

(a)(b)

  

FDIC shared-loss expense, net

 

 

 

3,296

 

 

3,420

 

 

4,029

 

 

4,400

 

 

2,079

 

 

10,745

 

 

38,408

(c)

  

Net income (loss) before income taxes

 

 

 

18,747

 

 

20,197

 

 

19,832

 

 

(20,840)

 

 

5,131

 

 

58,776

 

 

782

 

  

Income tax expense (benefit)

 

 

 

3,627

 

 

5,858

 

 

5,661

 

 

(19,864)

 

 

562

 

 

15,146

 

 

2,310

 

  

Net income (loss)

 

 

$

15,120

 

$

14,339

 

$

14,171

 

$

(976)

 

$

4,569

 

$

43,630

 

$

(1,528)

 

  

Common Share Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Earnings (loss) per common share - basic

(4)

 

$

0.27

 

$

0.25

 

$

0.24

 

$

(0.10)

 

$

0.03

 

$

0.76

 

$

(0.27)

 

  

Earnings (loss) per common share - diluted

(5)

 

$

0.26

 

$

0.25

 

$

0.24

 

$

(0.10)

 

$

0.03

 

$

0.76

 

$

(0.27)

 

  

Average common shares outstanding

 

 

 

43,926

 

 

43,914

 

 

43,898

 

 

43,868

 

 

43,929

 

 

43,913

 

 

44,353

 

  

Average common shares outstanding and equivalents

 

 

 

51,111

 

 

51,095

 

 

51,064

 

 

51,069

 

 

51,146

 

 

51,091

 

 

51,609

 

  

Cash dividends per common share

 

 

$

0.06

 

$

0.06

 

$

0.06

 

$

0.06

 

$

0.10

(d)

$

0.18

 

$

0.30

(d)

  

Book value per common share (period end)

 

 

$

17.29

 

$

17.08

 

$

16.80

 

$

16.67

 

$

16.91

 

$

17.29

 

$

16.91

 

  

Tangible book value per common share (period end)

(6)

 

$

15.18

 

$

14.96

 

$

14.68

 

$

14.53

 

$

14.76

 

$

15.18

 

$

14.76

 

  

Balance Sheet (Average Balances)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Loans

(7)

 

$

4,398,032

 

$

4,445,658

 

$

4,484,410

 

$

4,552,234

 

$

4,654,135

 

$

4,441,665

 

$

4,755,861

 

  

Interest-earning assets

 

 

 

6,169,251

 

 

6,270,042

 

 

6,437,255

 

 

6,600,614

 

 

6,740,932

 

 

6,290,862

 

 

6,740,516

 

  

Total assets

 

 

 

6,653,414

 

 

6,778,211

 

 

6,990,212

 

 

7,160,328

 

 

7,326,901

 

 

6,806,718

 

 

7,344,330

 

  

Interest-bearing deposits

 

 

 

3,920,565

 

 

3,929,280

 

 

3,956,790

 

 

3,931,009

 

 

3,932,734

 

 

3,935,216

 

 

4,027,869

 

  

Borrowings

 

 

 

917,212

 

 

1,047,753

 

 

1,239,672

 

 

1,394,171

 

 

1,572,400

 

 

1,067,662

 

 

1,472,993

 

  

Stockholders' equity

 

 

 

919,171

 

 

908,394

 

 

899,858

 

 

905,646

 

 

912,598

 

 

909,175

 

 

930,146

 

  

Common stockholders' equity

 

 

 

753,301

 

 

742,524

 

 

733,988

 

 

739,776

 

 

746,728

 

 

743,305

 

 

764,276

 

  

Performance Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Net interest margin

(8)

 

 

4.95%

 

 

4.69%

 

 

4.67%

 

 

4.55%

 

 

5.29%

 

 

4.77%

 

 

5.19%

 

  

Return on average assets

(9)

 

 

0.91%

 

 

0.85%

 

 

0.81%

 

 

-0.05%

 

 

0.25%

 

 

0.85%

 

 

-0.03%

 

  

Return on average tangible common stockholders' equity

(10)

 

 

7.06%

 

 

6.70%

 

 

6.69%

 

 

-2.75%

 

 

0.68%

 

 

6.82%

 

 

-2.38%

 

  

Efficiency ratio

(11)

 

 

57.69%

 

 

58.76%

 

 

59.56%

 

 

61.64%

 

 

63.66%

 

 

58.66%

 

 

59.51%

 

  

Full-time equivalent employees, period end

 

 

 

1,439

 

 

1,451

 

 

1,467

 

 

1,466

 

 

1,491

 

 

1,439

 

 

1,491

 

  

Credit Quality Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Excluding acquired loans:

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

    Allowance for loan and lease losses

(3)

 

$

62,168

 

$

112,812

 

$

113,238

 

$

112,626

(a)

$

80,351

 

$

62,168

 

$

80,351

 

  

    Allowance as a % of loans held for investment

 

 

 

2.06%

 

 

3.53%

 

 

3.63%

 

 

3.62%

 

 

2.65%

 

 

2.06%

 

 

2.65%

 

  

    Net charge-offs

(3)

 

$

65,352

 

$

9,478

 

$

10,048

 

$

12,737

 

$

9,097

 

$

84,878

 

$

25,410

 

  

    Net charge-off rate

(3)(12)

 

 

8.27%

 

 

1.21%

 

 

1.30%

 

 

1.67%

 

 

1.23%

 

 

3.62%

 

 

1.17%

 

  

    Early delinquency rate (30 - 89 days past due)

 

 

 

3.70%

 

 

3.31%

 

 

3.51%

 

 

3.70%

 

 

3.77%

 

 

3.70%

 

 

3.77%

 

  

    Total delinquency rate (30 days and over)

 

 

 

6.92%

 

 

6.28%

 

 

6.72%

 

 

6.94%

 

 

7.06%

 

 

6.92%

 

 

7.06%

 

  

Capital Ratios (Non-GAAP)

(13)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Leverage ratio

 

 

 

12.35%

 

 

11.92%

 

 

11.38%

 

 

11.18%

 

 

10.93%

 

 

12.35%

 

 

10.93%

 

  

Common equity Tier 1 capital ratio

 

 

 

13.34%

 

 

12.64%

 

 

12.33%

 

 

12.14%

 

 

12.03%

 

 

13.34%

 

 

12.03%

 

  

Tier 1 risk-based capital ratio

 

 

 

17.46%

 

 

16.71%

 

 

16.36%

 

 

15.99%

 

 

15.64%

 

 

17.46%

 

 

15.64%

 

  

Total risk-based capital ratio

 

 

 

18.73%

 

 

18.00%

 

 

17.67%

 

 

17.29%

 

 

16.93%

 

 

18.73%

 

 

16.93%

 

  

Tangible common equity ("TCE") ratio

 

 

 

10.25%

 

 

9.92%

 

 

9.50%

 

 

9.10%

 

 

9.11%

 

 

10.25%

 

 

9.11%

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

(a) During Q1 2015, the Company placed its $200 million participation in a fuel purchase line of credit with the Puerto Rico Electric Power Authority (PREPA) on non-accrual status and recorded a $24.0 million provision for loan and lease losses. During Q4 2015, the Company recorded an additional $29.3 million provision for loan and lease losses related to PREPA. Both were part of the overall quarterly provision for loan and lease losses.

  

(b) During Q3 2015, the Company sold a portion of covered non-performing commercial loans amounting to $197.1 million unpaid principal balance ($100.0 million carrying amount). The sales price was 18.44% of UPB, or $36.3 million. The FDIC agreed to cover $20.0 million of losses as part of its loss-share agreement with the Company. As a result, a $20.0 million reimbursement was recorded in the statement of operations. The Company also recorded a $32.9 million provision for loan and lease losses for acquired Eurobank loans, which was partially offset by $4.6 million in cost recoveries. Also, as part of this transaction, the Company sold certain non-performing commercial loans and real estate owned from the BBVAPR acquisition amounting to $38.1 million unpaid principal balance ($9.9 million carrying amount). The sales price was $5.2 million. As a result, a $5.2 million provision for loan and lease losses was recorded for BBVAPR acquired loans, which was partially offset by $2.4 million in cost recoveries. In addition, certain real estate owned with a carrying amount of $11.0 million was sold for $1.7 million. At September 30 , 2015, the Company had a $13.0 million receivable related to this sale and a $20.0 million receivable from the FDIC for the shared-loss portion, both balances were received in December 2015.

  

(c) The FDIC loss share coverage for the commercial loans and other non-single family loans was in effect until June 30, 2015. The FDIC granted an extension of 120 days for the sale of part of this portfolio and agreed to cover up to $20 million with respect to the aggregate loss resulting from this sale.

  

(d) The Board of directors decreased OFG's regular quarterly dividend per common share to $0.06 per share during Q4 2015 from $0.10 per share.

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

2

 

  

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Table 2: Consolidated Statements of Operations

 

 

 

 

 

 

 

 

  

 

 

Quarter Ended

 

Nine-Months Ended

 

  

 

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

September 30,

 

September 30,

 

  

(Dollars in thousands, except per share data) (unaudited)

 

 

2016

 

2016

 

2016

 

2015

 

2015

 

2016

 

2015

 

  

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Loans

(1)(14)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

    Non-acquired loans

 

 

$

50,818

 

$

49,108

 

$

47,915

 

$

47,261

 

$

46,036

 

$

147,841

 

$

136,532

 

  

    Acquired BBVAPR loans

 

 

 

22,446

 

 

23,670

 

 

25,676

 

 

26,976

 

 

35,214

 

 

71,792

 

 

104,444

 

  

    Acquired Eurobank loans

 

 

 

9,340

 

 

6,897

 

 

7,561

 

 

8,134

 

 

16,014

 

 

23,798

 

 

44,275

 

  

          Total interest income from loans

 

 

 

82,604

 

 

79,675

 

 

81,152

 

 

82,371

 

 

97,264

 

 

243,431

 

 

285,251

 

  

Investment securities

 

 

 

7,980

 

 

8,233

 

 

10,154

 

 

10,536

 

 

9,983

 

 

26,367

 

 

28,410

 

  

          Total interest income

 

 

 

90,584

 

 

87,908

 

 

91,306

 

 

92,907

 

 

107,247

 

 

269,798

 

 

313,661

 

  

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

    Core deposits

 

 

 

5,580

 

 

5,551

 

 

5,136

 

 

5,237

 

 

5,440

 

 

16,267

 

 

16,897

 

  

    Brokered deposits

 

 

 

1,751

 

 

1,816

 

 

1,988

 

 

1,438

 

 

1,211

 

 

5,555

 

 

3,462

 

  

          Total deposits

 

 

 

7,331

 

 

7,367

 

 

7,124

 

 

6,675

 

 

6,651

 

 

21,822

 

 

20,359

 

  

Borrowings

 

 

 

6,326

 

 

7,229

 

 

9,207

 

 

10,610

 

 

10,773

 

 

22,762

 

 

31,552

 

  

          Total interest expense

 

 

 

13,657

 

 

14,596

 

 

16,331

 

 

17,285

 

 

17,424

 

 

44,584

 

 

51,911

 

  

Net interest income

 

 

 

76,927

 

 

73,312

 

 

74,975

 

 

75,622

 

 

89,823

 

 

225,214

 

 

261,750

 

  

    Provision for loan and lease losses, excluding acquired loans

(1)(3)

 

 

14,708

 

 

9,052

 

 

10,660

 

 

45,012

(a)

 

10,459

 

 

34,420

 

 

54,322

(a)

  

    Provision for acquired BBVAPR loan and lease losses

(1)

 

 

7,942

 

 

4,362

 

 

2,324

 

 

7,332

 

 

7,630

 

 

14,628

 

 

16,795

 

  

    Provision (recapture) for acquired Eurobank loan and lease losses

(1)

 

 

819

 

 

1,031

 

 

805

 

 

(154)

 

 

33,490

(b)

 

2,655

 

 

38,194

(b)

  

          Total provision for loan and lease losses, net

 

 

 

23,469

 

 

14,445

 

 

13,789

 

 

52,190

 

 

51,579

 

 

51,703

 

 

109,311

 

  

          Net interest income after provision for loan and lease losses

 

 

 

53,458

 

 

58,867

 

 

61,186

 

 

23,432

 

 

38,244

 

 

173,511

 

 

152,439

 

  

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Banking service revenues

 

 

 

10,330

 

 

10,219

 

 

10,118

 

 

10,223

 

 

10,826

 

 

30,667

 

 

31,243

 

  

Wealth management revenues

 

 

 

6,526

 

 

7,041

 

 

6,152

 

 

7,715

 

 

6,885

 

 

19,719

 

 

21,325

 

  

Mortgage banking activities

 

 

 

1,421

 

 

1,024

 

 

855

 

 

1,411

 

 

992

 

 

3,300

 

 

4,717

 

  

          Total banking and wealth management revenues

 

 

 

18,277

 

 

18,284

 

 

17,125

 

 

19,349

 

 

18,703

 

 

53,686

 

 

57,285

 

  

FDIC shared-loss expense, net

 

 

 

(3,296)

 

 

(3,420)

 

 

(4,029)

 

 

(4,400)

 

 

(2,079)

 

 

(10,745)

 

 

(38,408)

(c)

  

Other-than-temporary impairment losses on investment securities

 

 

 

-

 

 

-

 

 

-

 

 

(1,244)

 

 

(246)

 

 

-

 

 

(246)

 

  

Reimbursement from FDIC shared-loss coverage in sale of loans

 

 

 

-

 

 

-

 

 

-

 

 

-

 

 

20,000

(b)

 

-

 

 

20,000

(b)

  

Other gains (losses), net

(15)

 

 

5,234

 

 

291

 

 

407

(d)

 

565

 

 

(401)

 

 

5,932

(d)

 

(429)

 

  

          Total non-interest income (loss), net

 

 

 

20,215

 

 

15,155

 

 

13,503

 

 

14,270

 

 

35,977

 

 

48,873

 

 

38,202

 

  

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Compensation and employee benefits

 

 

 

19,191

 

 

18,531

 

 

20,284

 

 

18,716

 

 

20,098

 

 

58,006

 

 

59,538

 

  

Rent and occupancy costs

 

 

 

7,484

 

 

8,107

 

 

7,822

 

 

8,111

 

 

8,556

 

 

23,413

 

 

26,075

 

  

Net loss on sale of foreclosed real estate and other repossessed assets

 

 

 

2,970

 

 

4,163

 

 

1,930

 

 

4,197

 

 

14,172

(b)

 

9,063

 

 

26,349

(b)

  

General and administrative expenses

 

 

 

21,562

 

 

20,821

 

 

22,566

 

 

25,512

 

 

21,537

 

 

64,949

 

 

67,895

 

  

          Total operating expenses

 

 

 

51,207

 

 

51,622

 

 

52,602

 

 

56,536

 

 

64,363

 

 

155,431

 

 

179,857

 

  

Credit related expenses

 

 

 

3,719

 

 

2,203

 

 

2,255

 

 

2,006

 

 

3,810

 

 

8,177

 

 

9,085

 

  

Other non-recurring expenses

 

 

 

-

 

 

-

 

 

-

 

 

-

 

 

917

(e)

 

-

 

 

917

(e)

  

          Total non-interest expense

 

 

 

54,926

 

 

53,825

 

 

54,857

 

 

58,542

 

 

69,090

 

 

163,608

 

 

189,859

 

  

Income (loss) before income taxes

 

 

 

18,747

 

 

20,197

 

 

19,832

 

 

(20,840)

 

 

5,131

 

 

58,776

 

 

782

 

  

Income tax expense (benefit)

 

 

 

3,627

 

 

5,858

 

 

5,661

 

 

(19,864)

 

 

562

 

 

15,146

 

 

2,310

 

  

Net income (loss)

 

 

 

15,120

 

 

14,339

 

 

14,171

 

 

(976)

 

 

4,569

 

 

43,630

 

 

(1,528)

 

  

Less:  dividends on preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

    Convertible preferred stock

 

 

 

(1,838)

 

 

(1,837)

 

 

(1,838)

 

 

(1,837)

 

 

(1,838)

 

 

(5,513)

 

 

(5,513)

 

  

    Other preferred stock

 

 

 

(1,627)

 

 

(1,629)

 

 

(1,627)

 

 

(1,629)

 

 

(1,627)

 

 

(4,883)

 

 

(4,883)

 

  

Net income (loss) available to common shareholders

 

 

$

11,655

 

$

10,873

 

$

10,706

 

$

(4,442)

 

$

1,104

 

$

33,234

 

$

(11,924)

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

(a) During Q1 2015, the Company placed its $200 million participation in a fuel purchase line of credit with the Puerto Rico Electric Power Authority (PREPA) on non-accrual status and recorded a $24.0 million provision for loan and lease losses. During Q4 2015, the Company recorded an additional $29.3 million provision for loan and lease losses related to PREPA. Both were part of the overall quarterly provision for loan and lease losses.

  

(b) During Q3 2015, the Company sold a portion of covered non-performing commercial loans amounting to $197.1 million unpaid principal balance ($100.0 million carrying amount). The sales price was 18.44% of UPB, or $36.3 million. The FDIC agreed to cover $20.0 million of losses as part of its loss-share agreement with the Company. As a result, a $20.0 million reimbursement was recorded in the statement of operations. The Company also recorded a $32.9 million provision for loan and lease losses for acquired Eurobank loans, which was partially offset by $4.6 million in cost recoveries. Also, as part of this transaction, the Company sold certain non-performing commercial loans and real estate owned from the BBVAPR acquisition amounting to $38.1 million unpaid principal balance ($9.9 million carrying amount). The sales price was $5.2 million. As a result, a $5.2 million provision for loan and lease losses was recorded for BBVAPR acquired loans, which was partially offset by $2.4 million in cost recoveries. In addition, certain real estate owned with a carrying amount of $11.0 million was sold for $1.7 million. At September 30 , 2015, the Company had a $13.0 million receivable related to this sale and a $20.0 million receivable from the FDIC for the shared-loss portion, both balances were received in December 2015.

  

(c) The FDIC loss share coverage for the commercial loans and other non-single family loans was in effect until June 30, 2015. The FDIC granted an extension of 120 days for the sale of part of this portfolio and agreed to cover up to $20 million with respect to the aggregate loss resulting from this sale.

  

(d) During Q1 2016, the Company sold mortgage backed securities amounting to $263.3 million with a gain of $16.1 million and obligations of Puerto Rico government and political subdivisions of $12.8 million with a loss of $4.1 million.  In addition, the Company partially unwound repurchase agreements in the amount of $268 million at a cost of $12 million.

  

(e) During Q3 2015, the Company offered a voluntary early retirement program for qualified employees and incurred additional compensation expenses of $917 thousand related to this program.

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

3

 

  

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 3: Consolidated Statements of Financial Condition

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

(Dollars in thousands) (unaudited)

 

 

2016

 

2016

 

2016

 

2015

 

2015

 

Cash and cash equivalents

 

 

$

512,295

 

$

520,078

 

$

681,198

 

$

540,058

 

$

530,545

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading securities

 

 

 

380

 

 

348

 

 

314

 

 

288

 

 

583

 

Investment securities available-for-sale, at fair value, with amortized cost of $623,994

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    (June 30, 2016 - $645,298; March 31, 2016 - $653,673; December 31, 2015 - $955,646;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    September 30, 2015 - $982,754)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Mortgage-backed securities

 

 

 

632,429

 

 

651,724

 

 

656,137

(a)

 

953,213

 

 

985,554

 

    Other investment securities

 

 

 

10,254

 

 

12,578

 

 

13,148

(a)

 

21,396

 

 

22,151

 

          Total investment securities available-for-sale

 

 

 

642,683

 

 

664,302

 

 

669,285

 

 

974,609

 

 

1,007,705

 

Mortgage-backed securities held-to-maturity, at amortized cost, with fair value of $650,023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    (June 30, 2016 - $643,530; March 31, 2016 - $641,346; December 31, 2015 - $614,679;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    September 30, 2015 - $595,148)

 

 

 

641,890

 

 

635,399

 

 

637,036

 

 

620,189

 

 

594,639

 

Federal Home Loan Bank (FHLB) stock, at cost

 

 

 

12,712

 

 

19,838

 

 

20,761

 

 

20,783

 

 

20,804

 

Other investments

 

 

 

3

 

 

3

 

 

3

 

 

3

 

 

3

 

          Total investments

 

 

 

1,297,668

 

 

1,319,890

 

 

1,327,399

 

 

1,615,872

 

 

1,623,734

 

Loans, net

(3)(14)

 

 

4,298,965

 

 

4,373,617

 

 

4,360,129

 

 

4,434,213

 

 

4,468,676

 

Other assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FDIC shared-loss indemnification asset

 

 

 

16,670

 

 

18,426

 

 

20,923

 

 

22,599

 

 

22,895

 

Derivative assets

 

 

 

1,503

 

 

1,926

 

 

2,662

 

 

3,025

 

 

3,290

 

Prepaid expenses

 

 

 

19,514

 

 

16,332

 

 

10,363

 

 

11,762

 

 

14,151

 

Deferred tax asset, net

 

 

 

131,061

 

 

143,048

 

 

145,518

 

 

145,901

 

 

143,935

 

Foreclosed real estate and repossessed properties

 

 

 

49,188

 

 

55,086

 

 

61,145

 

 

64,088

 

 

73,063

 

Premises and equipment, net

 

 

 

71,105

 

 

72,585

 

 

73,975

 

 

74,590

 

 

75,346

 

Goodwill

 

 

 

86,069

 

 

86,069

 

 

86,069

 

 

86,069

 

 

86,069

 

Accounts receivable and other assets

 

 

 

108,075

 

 

105,539

 

 

105,191

 

 

100,972

 

 

162,118

(b)

Total assets

 

 

$

6,592,113

 

$

6,712,596

 

$

6,874,572

 

$

7,099,149

 

$

7,203,822

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

$

2,012,255

 

 

1,972,743

 

 

2,018,346

 

 

1,862,572

 

 

1,906,658

 

Savings accounts

 

 

 

1,118,783

 

 

1,110,423

 

 

1,110,469

 

 

1,107,618

 

 

1,217,098

 

Time deposits

 

 

 

1,042,572

 

 

999,243

 

 

962,773

 

 

964,588

 

 

941,821

 

Brokered deposits

 

 

 

581,161

 

 

561,645

 

 

688,105

 

 

782,973

 

 

653,126

 

          Total deposits

 

 

 

4,754,771

 

 

4,644,054

 

 

4,779,693

 

 

4,717,751

 

 

4,718,703

 

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities sold under agreements to repurchase

 

 

 

658,232

 

 

626,109

 

 

636,172

(a)

 

934,691

 

 

1,000,664

 

Advances from FHLB and other borrowings

(16)

 

 

105,984

 

 

308,233

 

 

333,736

 

 

334,210

 

 

334,670

 

Subordinated capital notes

(16)

 

 

36,083

 

 

102,983

 

 

102,808

 

 

102,633

 

 

102,371

 

          Total borrowings

 

 

 

800,299

 

 

1,037,325

 

 

1,072,716

 

 

1,371,534

 

 

1,437,705

 

Other liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

 

 

4,306

 

 

5,413

 

 

6,220

 

 

6,162

 

 

8,622

 

Acceptances outstanding

 

 

 

18,043

 

 

20,984

 

 

19,381

 

 

14,582

 

 

19,083

 

Accrued expenses and other liabilities

 

 

 

89,760

 

 

88,930

 

 

92,761

 

 

92,043

 

 

111,821

 

          Total liabilities

 

 

 

5,667,179

 

 

5,796,706

 

 

5,970,771

 

 

6,202,072

 

 

6,295,934

 

Stockholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

 

176,000

 

 

176,000

 

 

176,000

 

 

176,000

 

 

176,000

 

Common stock

 

 

 

52,626

 

 

52,626

 

 

52,626

 

 

52,626

 

 

52,626

 

Additional paid-in capital

 

 

 

540,692

 

 

540,705

 

 

540,371

 

 

540,512

 

 

540,088

 

Legal surplus

 

 

 

74,788

 

 

73,265

 

 

71,865

 

 

70,435

 

 

70,423

 

Retained earnings 

 

 

 

169,858

 

 

162,363

 

 

155,529

 

 

148,886

 

 

155,974

 

Treasury stock, at cost

 

 

 

(104,874)

 

 

(104,874)

 

 

(104,874)

 

 

(105,379)

 

 

(105,379)

 

Accumulated other comprehensive income, net

 

 

 

15,844

 

 

15,805

 

 

12,284

 

 

13,997

 

 

18,156

 

          Total stockholders' equity

 

 

 

924,934

 

 

915,890

 

 

903,801

 

 

897,077

 

 

907,888

 

          Total liabilities and stockholders' equity

 

 

$

6,592,113

 

$

6,712,596

 

$

6,874,572

 

$

7,099,149

 

$

7,203,822

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) During Q1 2016, the Company sold mortgage backed securities amounting to $263.3 million with a gain of $16.1 million and obligations of Puerto Rico government and political subdivisions of $12.8 million with a loss of $4.1 million.  In addition, the Company partially unwound repurchase agreements in the amount of $268 million at a cost of $12 million.

(b) At September 30, 2015, amount includes a $25 million receivable from Q2 2015 loss-share certifications for non-single family residential mortgage loans and a $20 million receivable from the sale of non-performing covered loans during Q3 2015, which were paid by the FDIC in December 2015. In addition, it includes a $13 million receivable related to the sale of non-performing loans received in December 2015.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 4: Information on Loan Portfolio and Production

(14)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

(Dollars in thousands) (unaudited)

 

 

2016

 

2016

 

2016

 

2015

 

2015

 

Non-acquired loans held for investment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Mortgage

 

 

$

 735,367  

 

$

 741,917  

 

$

 751,819  

 

$

 757,828  

 

$

 762,636  

 

      Commercial

(3)

 

 

 1,267,177  

 

 

 1,476,613  

 

 

 1,425,385  

 

 

 1,441,649  

 

 

 1,389,353  

 

      Consumer

 

 

 

 278,666  

 

 

 265,269  

 

 

 252,327  

 

 

 242,950  

 

 

 227,756  

 

      Auto

 

 

 

 730,589  

 

 

 712,268  

 

 

 687,159  

 

 

 669,163  

 

 

 647,544  

 

 

 

 

 

 3,011,799  

 

 

 3,196,067  

 

 

 3,116,690  

 

 

 3,111,590  

 

 

 3,027,289  

 

      Less:  Allowance for loan and lease losses

(3)

 

 

 (62,168) 

 

 

 (112,812) 

 

 

 (113,238) 

 

 

 (112,626) 

 

 

 (80,351) 

 

 

 

 

 

 2,949,631  

 

 

 3,083,255  

 

 

 3,003,452  

 

 

 2,998,964  

 

 

 2,946,938  

 

      Deferred loan costs, net

 

 

 

 5,421  

 

 

 4,619  

 

 

 4,350  

 

 

 4,203  

 

 

 4,571  

 

          Total non-acquired loans held for investment, net

 

 

 

 2,955,052  

 

 

 3,087,874  

 

 

 3,007,802  

 

 

 3,003,167  

 

 

 2,951,509  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans:

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BBVAPR

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Accounted for under ASC 310-20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Commercial

 

 

 

 5,755  

 

 

 4,559  

 

 

 6,558  

 

 

 7,457  

 

 

 7,736  

 

      Consumer

 

 

 

 34,215  

 

 

 35,194  

 

 

 36,346  

 

 

 38,385  

 

 

 39,774  

 

      Auto

 

 

 

 64,393  

 

 

 77,118  

 

 

 91,406  

 

 

 106,911  

 

 

 124,120  

 

 

 

 

 

 104,363  

 

 

 116,871  

 

 

 134,310  

 

 

 152,753  

 

 

 171,630  

 

      Less:  Allowance for loan and lease losses

 

 

 

 (4,213) 

 

 

 (4,487) 

 

 

 (4,993) 

 

 

 (5,542) 

 

 

 (5,473) 

 

 

 

 

 

 100,150  

 

 

 112,384  

 

 

 129,317  

 

 

 147,211  

 

 

 166,157  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Accounted for under ASC 310-30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Mortgage

 

 

 

 579,769  

 

 

 591,029  

 

 

 600,901  

 

 

 608,294  

 

 

 617,268  

 

      Commercial

 

 

 

 301,599  

 

 

 323,105  

 

 

 345,789  

 

 

 375,491  

 

 

 395,637  

 

      Consumer

 

 

 

 5,768  

 

 

 7,331  

 

 

 9,345  

 

 

 11,843  

 

 

 15,072  

 

      Auto

 

 

 

 100,475  

 

 

 117,038  

 

 

 134,669  

 

 

 153,592  

 

 

 173,979  

 

 

 

 

 

 987,611  

 

 

 1,038,503  

(a)

 

 1,090,704  

 

 

 1,149,220  

 

 

 1,201,956  

 

      Less:  Allowance for loan and lease losses

 

 

 

 (29,819) 

 

 

 (22,801) 

(a)

 

 (27,747) 

 

 

 (25,785) 

 

 

 (19,986) 

 

 

 

 

 

 957,792  

 

 

 1,015,702  

 

 

 1,062,957  

 

 

 1,123,435  

 

 

 1,181,970  

 

   Total Acquired BBVAPR loans, net

 

 

 

 1,057,942  

 

 

 1,128,086  

 

 

 1,192,274  

 

 

 1,270,646  

 

 

 1,348,127  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eurobank

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Accounted for under ASC 310-30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Mortgage

 

 

 

 75,043  

 

 

 76,777  

 

 

 91,113  

 

 

 92,273  

 

 

 92,757  

 

      Commercial

 

 

 

 82,753  

 

 

 83,377  

 

 

 142,298  

 

 

 142,377  

 

 

 144,704  

 

      Consumer

 

 

 

 1,488  

 

 

 1,410  

 

 

 1,770  

 

 

 2,314  

 

 

 2,708  

 

 

 

 

 

 159,284  

 

 

 161,564  

(a)

 

 235,181  

 

 

 236,964  

 

 

 240,169  

 

      Less:  Allowance for loan and lease losses

 

 

 

 (22,812) 

 

 

 (22,116) 

(a)

 

 (92,293) 

 

 

 (90,178) 

 

 

 (90,332) 

 

   Total Acquired Eurobank loans, net

 

 

 

 136,472  

 

 

 139,448  

 

 

 142,888  

 

 

 146,786  

 

 

 149,837  

 

          Total acquired loans, net

 

 

 

 1,194,414  

 

 

 1,267,534  

 

 

 1,335,162  

 

 

 1,417,432  

 

 

 1,497,964  

 

Total loans held for investment

 

 

 

 4,149,466  

 

 

 4,355,408  

 

 

 4,342,964  

 

 

 4,420,599  

 

 

 4,449,473  

 

Mortgage loans held for sale

 

 

 

 26,362  

 

 

 18,209  

 

 

 17,165  

 

 

 13,614  

 

 

 19,203  

 

Other loans held for sale

(3)

 

 

 123,137  

 

 

 -    

 

 

 -    

 

 

 -    

 

 

 -    

 

Total loans, net

 

 

$

 4,298,965  

 

$

 4,373,617  

 

$

 4,360,129  

 

$

 4,434,213  

 

$

 4,468,676  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

2016

 

2016

 

2015

 

2015

 

(Dollars in thousands) (unaudited)

 

 

Q3

 

Q2

 

Q1

 

Q4

 

Q3

 

Quarterly loan production

(17)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Mortgage

 

 

$

 51,022  

 

$

 57,636  

 

$

 48,321  

 

$

 55,450  

 

$

 65,248  

 

    Commercial

 

 

 

 62,628  

 

 

 66,316  

 

 

 79,272  

 

 

 75,775  

 

 

 83,243  

 

    Consumer

 

 

 

 43,636  

 

 

 39,550  

 

 

 34,275  

 

 

 37,919  

 

 

 36,756  

 

    Auto and Leasing

 

 

 

 69,523  

 

 

 74,383  

 

 

 63,285  

 

 

 67,633  

 

 

 65,743  

 

        Total

 

 

$

 226,809  

 

$

 237,885  

 

$

 225,153  

 

$

 236,777  

 

$

 250,990  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) During Q2 2016, the Company changed the purchase credit impaired policy for all loans accounted for under ASC 310-30. Under the revised policy, the Company writes-off a loans' recorded investment and derecognizes the associated allowance for loan and lease losses for loans that exit the pools. The revised policy implementation is performed prospectively due to the immaterial impact for retrospective adoption. The transition to this revised policy resulted in a $8.5 million and $72.2 million initial de-recognition of loans recorded investment balance and associated allowance for loan and lease losses for acquired BBVAPR loans and acquired Eurobank loans, respectively, with no impact to provision for loan and lease losses.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5

 

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 5: Average Balances, Net Interest Income and Net Interest Margin

 

 

 

 

2016 Q3

 

2016 Q2

 

2016 Q1

 

2015 Q4

 

2014 Q3

 

 

 

 

 

Interest

 

 

 

 

 

 

Interest

 

 

 

 

 

 

Interest

 

 

 

 

 

 

Interest

 

 

 

 

 

 

Interest

 

 

 

 

 

 

Average

 

Income/

 

Yield/

 

Average

 

Income/

 

Yield/

 

Average

 

Income/

 

Yield/

 

Average

 

Income/

 

Yield/

 

Average

 

Income/

 

Yield/

(Dollars in thousands) (unaudited)

 

 

Balance

 

Expense

 

Rate

 

Balance

 

Expense

 

Rate

 

Balance

 

Expense

 

Rate

 

Balance

 

Expense

 

Rate

 

Balance

 

Expense

 

Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Cash equivalents and securities purchased under agreements to resell

 

 

$

477,968

 

$

661

 

0.55

%

 

$

512,916

 

$

612

 

0.48

%

 

$

502,718

 

$

646

 

0.52

%

 

$

438,981

 

$

327

 

0.30

%

 

$

482,959

 

$

308

 

0.25

%

    Investment securities

 

 

 

1,293,251

 

 

7,319

 

2.25

%

 

 

1,311,468

 

 

7,621

 

2.33

%

 

 

1,450,127

 

 

9,508

 

2.63

%

 

 

1,609,399

 

 

10,209

 

2.52

%

 

 

1,603,838

 

 

9,674

 

2.39

%

    Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

          Non-acquired loans

 

 

 

3,160,091

 

 

50,569

 

6.35

%

 

 

3,129,570

 

 

49,108

 

6.29

%

 

 

3,100,157

 

 

47,915

 

6.20

%

 

 

3,043,109

 

 

47,261

 

6.16

%

 

 

2,959,961

 

 

46,036

 

6.17

%

          Acquired BBVAPR loans

 

 

 

1,100,336

 

 

22,723

 

8.19

%

 

 

1,172,087

 

 

23,670

 

8.10

%

 

 

1,240,252

 

 

25,676

 

8.30

%

 

 

1,361,173

 

 

26,976

 

7.86

%

 

 

1,499,399

 

 

35,215

 

9.32

%

          Acquired Eurobank loans

 

 

 

137,605

 

 

9,313

 

26.85

%

 

 

144,001

 

 

6,897

 

19.21

%

 

 

144,001

 

 

7,561

 

21.06

%

 

 

147,952

 

 

8,134

 

21.81

%

 

 

194,775

 

 

16,014

 

32.62

%

            Total loans

 

 

 

4,398,032

 

 

82,605

 

7.45

%

 

 

4,445,658

 

 

79,675

 

7.19

%

 

 

4,484,410

 

 

81,152

 

7.26

%

 

 

4,552,234

 

 

82,371

 

7.18

%

 

 

4,654,135

 

 

97,265

 

8.29

%

Total interest-earning assets

 

 

$

6,169,251

 

$

90,585

 

5.83

%

 

$

6,270,042

 

$

87,908

 

5.62

%

 

$

6,437,255

 

$

91,306

 

5.69

%

 

$

6,600,614

 

$

92,907

 

5.58

%

 

$

6,740,932

 

$

107,247

 

6.31

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        NOW accounts

 

 

$

1,243,640

 

$

1,314

 

0.42

%

 

$

1,231,576

 

$

1,518

 

0.49

%

 

$

1,152,055

 

$

1,081

 

0.38

%

 

$

1,138,928

 

$

1,063

 

0.37

%

 

$

1,110,804

 

$

1,034

 

0.37

%

        Savings accounts

 

 

 

1,113,649

 

 

1,351

 

0.48

%

 

 

1,103,808

 

 

1,308

 

0.48

%

 

 

1,115,552

 

 

1,398

 

0.50

%

 

 

1,180,220

 

 

1,516

 

0.51

%

 

 

1,234,772

 

 

1,592

 

0.51

%

        Time deposits

 

 

 

1,013,905

 

 

2,735

 

1.07

%

 

 

981,759

 

 

2,558

 

1.05

%

 

 

954,857

 

 

2,495

 

1.05

%

 

 

938,291

 

 

2,456

 

1.04

%

 

 

939,075

 

 

2,613

 

1.10

%

        Brokered deposits

 

 

 

549,371

 

 

1,751

 

1.26

%

 

 

612,137

 

 

1,816

 

1.19

%

 

 

734,326

 

 

1,988

 

1.09

%

 

 

673,570

 

 

1,438

 

0.85

%

 

 

648,083

 

 

1,211

 

0.74

%

 

 

 

 

3,920,565

 

 

7,151

 

0.72

%

 

 

3,929,280

 

 

7,200

 

0.73

%

 

 

3,956,790

 

 

6,962

 

0.71

%

 

 

3,931,009

 

 

6,473

 

0.65

%

 

 

3,932,734

 

 

6,450

 

0.65

%

        Non-interest bearing deposit accounts

 

 

 

801,833

 

 

-

 

-

 

 

 

774,496

 

 

-

 

-

 

 

 

774,950

 

 

-

 

-

 

 

 

781,064

 

 

-

 

-

 

 

 

772,545

 

 

-

 

-

%

        Fair value premium amortization and core deposit intangible amortization

 

 

 

-

 

 

180

 

-

 

 

 

-

 

 

167

 

-

 

 

 

-

 

 

162

 

-

 

 

 

-

 

 

202

 

-

 

 

 

-

 

 

201

 

-

 

            Total deposits

 

 

 

4,722,398

 

 

7,331

 

0.62

%

 

 

4,703,776

 

 

7,367

 

0.63

%

 

 

4,731,740

 

 

7,124

 

0.60

%

 

 

4,712,073

 

 

6,675

 

0.56

%

 

 

4,705,279

 

 

6,651

 

0.56

%

    Borrowings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        Securities sold under agreements to repurchase

 

 

 

620,353

 

 

4,272

 

2.73

%

 

 

627,693

 

 

4,258

 

2.72

%

 

 

799,613

 

 

6,099

 

3.06

%

 

 

957,680

 

 

7,404

 

3.07

%

 

 

1,132,373

 

 

7,605

 

2.66

%

        Advances from FHLB and other borrowings

 

 

 

195,278

 

 

1,237

 

2.51

%

 

 

317,191

 

 

2,098

 

2.65

%

 

 

337,364

 

 

2,240

 

2.66

%

 

 

334,029

 

 

2,306

 

2.74

%

 

 

337,829

 

 

2,283

 

2.68

%

        Subordinated capital notes

 

 

 

101,581

 

 

818

 

3.19

%

 

 

102,869

 

 

873

 

3.40

%

 

 

102,695

 

 

868

 

3.39

%

 

 

102,462

 

 

900

 

3.48

%

 

 

102,198

 

 

885

 

3.44

%

            Total borrowings

 

 

 

917,212

 

 

6,327

 

2.74

%

 

 

1,047,753

 

 

7,229

 

2.77

%

 

 

1,239,672

 

 

9,207

 

2.98

%

 

 

1,394,171

 

 

10,610

 

3.02

%

 

 

1,572,400

 

 

10,773

 

2.72

%

Total interest-bearing liabilities

 

 

$

5,639,610

 

$

13,658

 

0.96

%

 

$

5,751,529

 

$

14,596

 

1.02

%

 

$

5,971,412

 

$

16,331

 

1.10

%

 

$

6,106,244

 

$

17,285

 

1.12

%

 

$

6,277,679

 

$

17,424

 

1.10

%

Interest rate spread

 

 

 

 

 

$

76,927

 

4.87

%

 

 

 

 

$

73,312

 

4.60

%

 

 

 

 

$

74,975

 

4.59

%

 

 

 

 

$

75,622

 

4.46

%

 

 

 

 

$

89,823

 

5.21

%

Net interest margin

 

 

 

 

 

 

 

 

4.95

%

 

 

 

 

 

 

 

4.69

%

 

 

 

 

 

 

 

4.67

%

 

 

 

 

 

 

 

4.55

%

 

 

 

 

 

 

 

5.29

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASC 310-30 loan cost recoveries:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

          Acquired BBVAPR loans

 

 

 

 

 

$

810

 

 

 

 

 

 

 

$

293

 

 

 

 

 

 

 

$

683

 

 

 

 

 

 

 

$

354

 

 

 

 

 

 

 

$

6,106

 

 

 

          Acquired Eurobank loans

 

 

 

 

 

 

3,012

 

 

 

 

 

 

 

 

539

 

 

 

 

 

 

 

 

1,326

 

 

 

 

 

 

 

 

2,397

 

 

 

 

 

 

 

 

6,991

 

 

 

 

 

 

 

 

 

$

3,822

 

 

 

 

 

 

 

$

832

 

 

 

 

 

 

 

$

2,009

 

 

 

 

 

 

 

$

2,751

 

 

 

 

 

 

 

$

13,097

 

 

 

Adjusted excluding cost recoveries (Non-GAAP):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest-earning assets

 

 

$

6,169,251

 

$

86,763

 

5.58

%

 

$

6,270,042

 

$

87,076

 

5.57

%

 

$

6,437,255

 

$

89,297

 

5.56

%

 

$

6,600,614

 

$

90,156

 

5.42

%

 

$

6,740,932

 

$

94,150

 

5.54

%

Interest rate spread

 

 

 

 

 

$

73,105

 

4.62

%

 

 

 

 

$

72,480

 

4.55

%

 

 

 

 

$

72,966

 

4.46

%

 

 

 

 

$

72,871

 

4.30

%

 

 

 

 

$

76,726

 

4.44

%

Net interest margin

 

 

 

 

 

 

 

 

4.70

%

 

 

 

 

 

 

 

4.64

%

 

 

 

 

 

 

 

4.55

%

 

 

 

 

 

 

 

4.38

%

 

 

 

 

 

 

 

4.52

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 5: Average Balances, Net Interest Income and Net Interest Margin (Continued)

 

 

 

 

2016 YTD

 

2015 YTD

 

 

 

 

 

 

Interest

 

 

 

 

 

 

Interest

 

 

 

 

 

 

 

Average

 

Income/

 

Yield/

 

Average

 

Income/

 

Yield/

 

(Dollars in thousands) (unaudited)

 

 

Balance

 

Expense

 

Rate

 

Balance

 

Expense

 

Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Cash equivalents and securities purchased under agreements to resell

 

 

$

497,795

 

$

1,919

 

0.51

%

 

$

508,598

 

$

953

 

0.25

%

 

    Investment securities

 

 

 

1,351,402

 

 

24,448

 

2.41

%

 

 

1,476,057

 

 

27,457

 

2.49

%

 

    Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

          Non-acquired loans

 

 

 

3,129,851

 

 

147,592

 

6.28

%

 

 

2,907,121

 

 

136,559

 

6.28

%

 

          Acquired BBVAPR loans

 

 

 

1,170,893

 

 

72,042

 

8.20

%

 

 

1,613,780

 

 

104,417

 

8.65

%

 

          Acquired Eurobank loans

 

 

 

140,921

 

 

23,798

 

22.50

%

 

 

234,960

 

 

44,275

 

25.19

%

 

            Total loans

 

 

 

4,441,665

 

 

243,432

 

7.30

%

 

 

4,755,861

 

 

285,251

 

8.02

%

 

Total interest-earning assets

 

 

$

6,290,862

 

$

269,799

 

5.71

%

 

$

6,740,516

 

$

313,661

 

6.22

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        NOW accounts

 

 

$

1,208,943

 

$

3,914

 

0.43

%

 

$

1,171,679

 

$

3,388

 

0.39

%

 

        Savings accounts

 

 

 

1,111,012

 

 

4,057

 

0.49

%

 

 

1,282,753

 

 

4,988

 

0.52

%

 

        Time deposits

 

 

 

983,618

 

 

7,789

 

1.05

%

 

 

965,862

 

 

8,213

 

1.14

%

 

        Brokered deposits

 

 

 

631,643

 

 

5,555

 

1.17

%

 

 

607,575

 

 

3,462

 

0.76

%

 

 

 

 

 

3,935,216

 

 

21,315

 

0.72

%

 

 

4,027,869

 

 

20,051

 

0.67

%

 

        Non-interest bearing deposit accounts

 

 

 

784,099

 

 

-

 

-

 

 

 

765,863

 

 

-

 

-

%

 

        Fair value premium amortization and core deposit intangible amortization

 

 

 

-

 

 

507

 

-

 

 

 

-

 

 

308

 

-

 

 

            Total deposits

 

 

 

4,719,315

 

 

21,822

 

0.62

%

 

 

4,793,732

 

 

20,359

 

0.57

%

 

Borrowings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        Securities sold under agreements to repurchase

 

 

 

682,326

 

 

14,629

 

2.86

%

 

 

1,031,316

 

 

22,163

 

2.87

%

 

        Advances from FHLB and other borrowings

 

 

 

282,957

 

 

5,574

 

2.62

%

 

 

339,738

 

 

6,766

 

2.66

%

 

        Subordinated capital notes

 

 

 

102,379

 

 

2,560

 

3.33

%

 

 

101,939

 

 

2,623

 

3.44

%

 

            Total borrowings

 

 

 

1,067,662

 

 

22,763

 

2.84

%

 

 

1,472,993

 

 

31,552

 

2.86

%

 

Total interest-bearing liabilities

 

 

$

5,786,977

 

$

44,585

 

1.03

%

 

$

6,266,725

 

$

51,911

 

1.11

%

 

Interest rate spread

 

 

 

 

 

$

225,214

 

4.68

%

 

 

 

 

$

261,750

 

5.11

%

 

Net interest margin

 

 

 

 

 

 

 

 

4.77

%

 

 

 

 

 

 

 

5.19

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASC 310-30 loan cost recoveries:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

          Acquired BBVAPR loans

 

 

 

 

 

$

1,786

 

 

 

 

 

 

 

 

8,411

 

 

 

 

       Acquired Eurobank loans

 

 

 

 

 

 

4,877

 

 

 

 

 

 

 

 

11,668

 

 

 

 

 

 

 

 

 

 

$

6,663

 

 

 

 

 

 

 

$

20,079

 

 

 

 

Adjusted excluding cost recoveries (Non-GAAP):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest-earning assets

 

 

$

6,290,862

 

$

263,136

 

5.57

%

 

$

6,740,516

 

$

293,582

 

5.82

%

 

Interest rate spread

 

 

 

 

 

$

218,551

 

4.54

%

 

 

 

 

$

241,671

 

4.71

%

 

Net interest margin

 

 

 

 

 

 

 

 

4.63

%

 

 

 

 

 

 

 

4.79

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 6: Loan Information and Performance Statistics (Excluding Acquired Loans) (1)

 

 

 

 

 

 

2016

 

2016

 

2016

 

2015

 

2015

(Dollars in thousands) (unaudited)

 

 

Q3

 

Q2

 

Q1

 

Q4

 

Q3

Net Charge-offs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

 

 

$

1,656

 

$

1,374

 

$

1,662

 

$

1,568

 

$

1,058

  Recoveries

 

 

 

(21)

 

 

(36)

 

 

(145)

 

 

(53)

 

 

(270)

      Total mortgage

 

 

 

1,635

 

 

1,338

 

 

1,517

 

 

1,515

 

 

788

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

(3)

 

 

56,700

 

 

833

 

 

1,011

 

 

3,229

 

 

828

  Recoveries

 

 

 

(93)

 

 

(228)

 

 

(88)

 

 

(60)

 

 

(63)

      Total commercial

(3)

 

 

56,607

 

 

605

 

 

923

 

 

3,169

 

 

765

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

 

 

 

3,173

 

 

2,811

 

 

2,327

 

 

2,227

 

 

2,471

  Recoveries

 

 

 

(120)

 

 

(133)

 

 

(102)

 

 

(142)

 

 

(186)

      Total consumer

 

 

 

3,053

 

 

2,678

 

 

2,225

 

 

2,085

 

 

2,285

Auto and Leasing:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

 

 

 

7,804

 

 

8,100

 

 

8,362

 

 

9,068

 

 

8,510

  Recoveries

 

 

 

(3,747)

 

 

(3,243)

 

 

(2,979)

 

 

(3,100)

 

 

(3,251)

      Total auto and leasing

 

 

 

4,057

 

 

4,857

 

 

5,383

 

 

5,968

 

 

5,259

          Total

 

 

$

65,352

 

$

9,478

 

$

10,048

 

$

12,737

 

$

9,097

Net Charge-off Rates

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

 

0.88%

 

 

0.72%

 

 

0.80%

 

 

0.80%

 

 

0.42%

Commercial

(3)

 

 

15.88%

 

 

0.17%

 

 

0.26%

 

 

0.91%

 

 

0.23%

Consumer

 

 

 

4.71%

 

 

4.35%

 

 

3.80%

 

 

3.68%

 

 

4.33%

Auto and Leasing

 

 

 

2.23%

 

 

2.75%

 

 

3.15%

 

 

3.59%

 

 

3.28%

          Total

(3)

 

 

8.27%

 

 

1.21%

 

 

1.30%

 

 

1.67%

 

 

1.23%

Average Loans Held For Investment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

$

746,613

 

$

743,516

 

$

756,291

 

$

756,530

 

$

758,689

Commercial

 

 

 

1,426,216

 

 

1,433,944

 

 

1,425,332

 

 

1,394,597

 

 

1,349,511

Consumer

 

 

 

259,535

 

 

246,003

 

 

234,499

 

 

226,783

 

 

210,933

Auto and Leasing

 

 

 

727,727

 

 

706,107

 

 

684,035

 

 

665,199

 

 

640,828

        Total

 

 

$

3,160,091

 

$

3,129,570

 

$

3,100,157

 

$

3,043,109

 

$

2,959,961

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 6: Loan Information and Performance Statistics (Excluding Acquired Loans) (Continued) (1)

 

 

 

 

2016

 

2016

 

2016

 

2015

 

2015

 

(Dollars in thousands) (unaudited)

 

 

Q3

 

Q2

 

Q1

 

Q4

 

Q3

 

Early Delinquency (30 - 89 days past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

$

37,015

 

$

33,099

 

$

31,627

 

$

36,092

 

$

37,377

(a)

Commercial

 

 

 

4,177

 

 

4,923

 

 

2,353

 

 

4,461

 

 

1,678

 

Consumer

 

 

 

4,796

 

 

3,765

(a)

 

4,341

 

 

4,128

 

 

3,585

 

Auto and Leasing

 

 

 

65,302

 

 

63,871

(a)

 

71,004

 

 

70,464

 

 

71,627

 

        Total

 

 

$

111,290

 

$

105,658

 

$

109,325

 

$

115,145

 

$

114,267

 

Early Delinquency Rates (30 - 89 days past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

 

5.03%

 

 

4.46%

 

 

4.21%

 

 

4.76%

 

 

4.90%

 

Commercial

 

 

 

0.33%

 

 

0.33%

 

 

0.17%

 

 

0.31%

 

 

0.12%

 

Consumer

 

 

 

1.72%

 

 

1.42%

(a)

 

1.72%

 

 

1.70%

 

 

1.57%

 

Auto and Leasing

 

 

 

8.94%

 

 

8.97%

(a)

 

10.33%

 

 

10.53%

 

 

11.06%

 

        Total

 

 

 

3.70%

 

 

3.31%

 

 

3.51%

 

 

3.70%

 

 

3.77%

 

Total Delinquency (30 days and over past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Traditional, Non traditional, and Loans under Loss Mitigation

 

 

$

103,770

 

$

95,909

 

$

97,424

 

$

102,988

 

$

104,355

 

    GNMA's buy-back option program

 

 

 

9,598

 

 

8,369

 

 

7,684

 

 

7,945

 

 

6,993

 

        Total mortgage

 

 

 

113,368

 

 

104,278

 

 

105,108

 

 

110,933

 

 

111,348

 

Commercial

 

 

 

14,947

 

 

20,005

 

 

19,686

 

 

21,138

 

 

17,014

 

Consumer

 

 

 

6,302

 

 

5,190

(a)

 

5,934

 

 

5,171

 

 

4,832

 

Auto and Leasing

 

 

 

73,708

 

 

71,193

(a)

 

78,746

 

 

78,757

 

 

80,613

 

        Total

 

 

$

208,325

 

$

200,666

 

$

209,474

 

$

215,999

 

$

213,807

 

Total Delinquency Rates (30 days and over past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Traditional, Non traditional, and Loans under Loss Mitigation

 

 

 

14.11%

 

 

12.93%

 

 

12.96%

 

 

13.59%

 

 

13.68%

 

    GNMA's buy-back option program

 

 

 

1.31%

 

 

1.13%

 

 

1.02%

 

 

1.05%

 

 

0.92%

 

        Total mortgage

 

 

 

15.42%

 

 

14.06%

 

 

13.98%

 

 

14.64%

 

 

14.60%

 

Commercial

 

 

 

1.18%

 

 

1.35%

 

 

1.38%

 

 

1.47%

 

 

1.22%

 

Consumer

 

 

 

2.26%

 

 

1.96%

(a)

 

2.35%

 

 

2.13%

 

 

2.12%

 

Auto and Leasing

 

 

 

10.09%

 

 

10.00%

(a)

 

11.46%

 

 

11.77%

 

 

12.45%

 

        Total

 

 

 

6.92%

 

 

6.28%

 

 

6.72%

 

 

6.94%

 

 

7.06%

 

Nonperforming Assets

(18)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

$

75,592

 

$

72,947

 

$

76,218

 

$

77,875

 

$

78,148

 

Commercial

(3)

 

 

23,347

 

 

207,768

 

 

212,345

 

 

215,281

 

 

222,072

 

Consumer

 

 

 

2,470

 

 

2,339

 

 

2,039

 

 

1,631

 

 

2,004

 

Auto and Leasing

 

 

 

9,477

 

 

7,337

 

 

7,873

 

 

8,418

 

 

10,076

 

        Total nonperforming loans

 

 

 

110,886

 

 

290,391

 

 

298,475

 

 

303,205

 

 

312,300

 

Foreclosed real estate

 

 

 

9,819

 

 

10,463

 

 

10,502

 

 

9,772

 

 

10,517

 

Other repossessed assets

 

 

 

2,462

 

 

2,979

 

 

2,796

 

 

3,845

 

 

5,134

 

        Total nonperforming assets

 

 

$

123,167

 

$

303,833

 

$

311,773

 

$

316,822

 

$

327,951

 

Nonperforming Loan Rates

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

 

10.28%

 

 

9.83%

 

 

10.14%

 

 

10.28%

 

 

10.25%

 

Commercial

(3)

 

 

1.84%

 

 

14.07%

 

 

14.90%

 

 

14.93%

 

 

15.98%

 

Consumer

 

 

 

0.89%

 

 

0.88%

 

 

0.81%

 

 

0.67%

 

 

0.88%

 

Auto and Leasing

 

 

 

1.30%

 

 

1.03%

 

 

1.15%

 

 

1.26%

 

 

1.56%

 

        Total loans

 

 

 

3.68%

 

 

9.09%

 

 

9.58%

 

 

9.74%

 

 

10.32%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) During Q3 2015, the Company changed its early delinquency reporting on mortgage loans from one scheduled payment due to two scheduled payments due in order to comply with regulatory reporting instructions and be comparable with local peers. Troubled debt restructured loans remain using one scheduled payment due.  During Q2 2016, the Company changed its early delinquency reporting on consumer and auto loans from one scheduled payment due to two scheduled payments due. This change resulted in a $19 thousand and $5.9 million reduction in early and total delinquency for consumer loans and auto loans, respectively.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 7: Allowance for Loan and Lease Losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended September 30, 2016

 

 

 

 

 

 

 

 

 

Auto and

 

 

 

 

(Dollars in thousands) (unaudited)

 

 

Mortgage

 

Commercial

 

Consumer

 

Leasing

 

Unallocated

 

Total

Non-acquired loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

18,537

 

$

63,144

 

$

11,771

 

$

19,259

 

$

101

 

$

112,812

Provision (recapture) for loan and lease losses

 

 

 

1,625

 

 

5,770

 

 

3,571

 

 

3,800

 

 

(58)

 

 

14,708

Charge-offs

(3)

 

 

(1,656)

 

 

(56,700)

 

 

(3,173)

 

 

(7,804)

 

 

-

 

 

(69,333)

Recoveries

 

 

 

21

 

 

93

 

 

120

 

 

3,747

 

 

-

 

 

3,981

    Balance at end of period

 

 

$

18,527

 

$

12,307

 

$

12,289

 

$

19,002

 

$

43

 

$

62,168

Allowance coverage ratio

 

 

 

2.52%

 

 

0.97%

 

 

4.41%

 

 

2.60%

 

 

0.00%

 

 

2.06%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired BBVAPR loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans accounted for under ASC 310-20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

 

 

 

$

21

 

$

3,002

 

$

1,464

 

$

-

 

$

4,487

Provision (recapture) for loan and lease losses

 

 

 

 

 

 

(17)

 

 

766

 

 

(201)

 

 

-

 

 

548

Charge-offs

 

 

 

 

 

 

(2)

 

 

(889)

 

 

(475)

 

 

-

 

 

(1,366)

Recoveries

 

 

 

 

 

 

16

 

 

67

 

 

461

 

 

-

 

 

544

    Balance at end of period

 

 

 

 

 

$

18

 

$

2,946

 

$

1,249

 

$

-

 

$

4,213

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans accounted for under ASC 310-30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

1,585

 

$

15,863

 

$

-

 

$

5,353

 

$

-

 

$

22,801

(Recapture) provision for loan and lease losses, net

 

 

 

1,070

 

 

6,324

 

 

-

 

 

-

 

 

-

 

 

7,394

Allowance de-recognition

 

 

 

9

 

 

(189)

 

 

-

 

 

(196)

 

 

-

 

 

(376)

    Balance at end of period

 

 

$

2,664

 

$

21,998

 

$

-

 

$

5,157

 

$

-

 

$

29,819

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired Eurobank loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

11,016

 

 

11,096

 

 

4

 

 

-

 

 

-

 

$

22,116

Provision (recapture) for loan and lease losses, net

 

 

 

893

 

 

(74)

 

 

-

 

 

-

 

 

-

 

 

819

FDIC shared-loss portion of provision for covered loan and lease losses, net

 

 

 

818

 

 

-

 

 

-

 

 

-

 

 

-

 

 

818

Allowance de-recognition

 

 

 

(459)

 

 

(478)

 

 

(4)

 

 

-

 

 

-

 

 

(941)

    Balance at end of period

 

 

$

12,268

 

$

10,544

 

$

-

 

$

-

 

$

-

 

$

22,812

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total acquired loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

12,601

 

 

26,980

 

 

3,006

 

 

6,817

 

 

-

 

 

49,404

Provision (recapture) for loan and lease losses

 

 

 

1,963

 

 

6,233

 

 

766

 

 

(201)

 

 

-

 

 

8,761

Charge-offs

 

 

 

-

 

 

(2)

 

 

(889)

 

 

(475)

 

 

-

 

 

(1,366)

Recoveries

 

 

 

-

 

 

16

 

 

67

 

 

461

 

 

-

 

 

544

FDIC shared-loss portion of provision for covered loan and lease losses, net

 

 

 

818

 

 

-

 

 

-

 

 

-

 

 

-

 

 

818

Allowance de-recognition

 

 

 

(450)

 

 

(667)

 

 

(4)

 

 

(196)

 

 

-

 

 

(1,317)

    Balance at end of period

 

 

$

14,932

 

$

32,560

 

$

2,946

 

$

6,406

 

$

-

 

$

56,844

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 8: Accretable Yield on Loans Accounted for Under ASC 310-30 (Loans Acquired with Deteriorated Credit Quality, including those by Analogy)

 

 

 

Quarter Ended September 30, 2016

(Dollars in thousands) (unaudited)

 

 

Mortgage

 

Commercial

 

Construction

 

Auto

 

Consumer

 

Total

Accretable Yield and Non-Accretable Discount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired BBVAPR loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accretable Yield

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

283,823

 

$

37,059

 

$

15,248

 

$

14,103

 

$

4,885

 

$

355,118

Accretion

 

 

 

(8,197)

 

$

(5,201)

 

$

(1,485)

 

$

(3,107)

 

$

(662)

 

$

(18,652)

Change in expected cash flows

 

 

 

(1)

 

 

1,764

 

 

(1)

 

 

618

 

 

(241)

 

 

2,139

Transfers from (to) non-accretable discount

 

 

 

24,056

 

 

(1,296)

 

 

283

 

 

(525)

 

 

233

 

 

22,751

    Balance at end of period

 

 

$

299,681

 

$

32,326

 

$

14,045

 

$

11,089

 

$

4,215

 

$

361,356

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Accretable Discount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

336,153

 

$

10,582

 

$

7,419

 

$

22,121

 

$

18,225

 

$

394,500

Change in actual and expected cash flows

 

 

 

(2,591)

 

 

(1,215)

 

 

(1)

 

 

(309)

 

 

121

 

 

(3,995)

Transfers (to) from accretable yield

 

 

 

(24,056)

 

 

1,296

 

 

(283)

 

 

525

 

 

(233)

 

 

(22,751)

    Balance at end of period

 

 

$

309,506

 

$

10,663

 

$

7,135

 

$

22,337

 

$

18,113

 

$

367,754

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction &

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Development

 

 

 

 

 

 

 

 

 

 

 

 

Loans Secured

 

 

 

 

Secured by

 

 

 

 

 

 

 

 

 

 

 

 

by 1-4 Family

 

Commercial

 

1-4 Family

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

and Other

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

Properties

 

Construction

 

Properties

 

Leasing

 

Consumer

 

Total

Acquired Eurobank loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accretable Yield

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

48,336

 

$

29,142

 

$

2,204

 

$

-

 

$

-

 

$

79,682

Accretion

 

 

 

(2,217)

 

 

(6,571)

 

 

-

 

 

(62)

 

 

(490)

 

 

(9,340)

Change in expected cash flows

 

 

 

646

 

 

1,720

 

 

(8)

 

 

62

 

 

490

 

 

2,910

Transfers from (to) non-accretable discount

 

 

 

3,737

 

 

(188)

 

 

(146)

 

 

-

 

 

-

 

 

3,403

    Balance at end of period

 

 

$

50,502

 

$

24,103

 

$

2,050

 

$

-

 

$

-

 

$

76,655

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Accretable Discount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

11,555

 

$

-

 

$

-

 

$

-

 

$

-

 

$

11,555

Change in actual and expected cash flows

 

 

 

(845)

 

 

617

 

 

10

 

 

-

 

 

-

 

 

(218)

Transfers (to) from accretable yield

 

 

 

(3,737)

 

 

188

 

 

146

 

 

-

 

 

-

 

 

(3,403)

    Balance at end of period

 

 

$

6,973

 

$

805

 

$

156

 

$

-

 

$

-

 

$

7,934

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 9: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital

 

In addition to disclosing required regulatory capital measures, we also report certain non-GAAP capital measures that management uses in assessing its capital adequacy. These non-GAAP measures include tangible common equity ("TCE") and TCE ratio. The table below provides the details of the calculation of our regulatory capital and non-GAAP capital measures. While our non-GAAP capital measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

2016

 

2016

 

2015

 

2015

(Dollars in thousands) (unaudited)

 

 

Q3

 

Q2

 

Q1

 

Q4

 

Q3

Stockholders' Equity to Non-GAAP Tangible Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

 

$

924,934

 

$

915,890

 

$

903,801

 

$

897,077

 

$

907,888

Less:  Intangible assets

 

 

 

(92,648)

 

$

(93,068)

 

$

(93,487)

 

$

(93,907)

 

$

(94,383)

           Noncumulative perpetual preferred stock

 

 

 

(176,000)

 

$

(176,000)

 

$

(176,000)

 

$

(176,000)

 

$

(176,000)

           Noncumulative perpetual preferred stock issuance costs

 

 

 

10,130

 

$

10,130

 

$

10,130

 

$

10,130

 

$

10,130

Tangible common equity

 

 

$

666,416

 

$

656,952

 

$

644,444

 

$

637,300

 

$

647,635

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock outstanding at end of period

 

 

 

43,914

 

$

43,914

 

$

43,914

 

$

43,868

 

$

43,868

Tangible book value (Non-GAAP)

 

 

$

15.18

 

$

14.96

 

$

14.68

 

$

14.53

 

$

14.76

Total Assets to Tangible Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets  

 

 

$

6,592,113

 

$

6,712,596

 

$

6,874,572

 

$

7,099,149

 

$

7,203,822

Less:  Intangible assets

 

 

 

(92,648)

 

$

(93,068)

 

$

(93,487)

 

$

(93,907)

 

$

(94,383)

Tangible assets (Non-GAAP)

 

 

$

6,499,465

 

$

6,619,528

 

$

6,781,085

 

$

7,005,242

 

$

7,109,439

Non-GAAP TCE Ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity

 

 

$

666,416

 

$

656,952

 

$

644,444

 

$

637,300

 

$

647,635

Tangible assets

 

 

 

6,499,465

 

$

6,619,528

 

$

6,781,085

 

$

7,005,242

 

$

7,109,439

TCE ratio

 

 

 

10.25%

 

$

9.92%

 

$

9.50%

 

$

9.10%

 

$

9.11%

Average Equity to Non-GAAP Average Tangible Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total stockholders' equity

 

 

$

919,171

 

$

908,394

 

$

899,858

 

$

905,646

 

$

912,598

Less:  Average noncumulative perpetual preferred stock

 

 

 

(176,000)

 

$

(176,000)

 

$

(176,000)

 

$

(176,000)

 

$

(176,000)

           Average noncumulative perpetual preferred stock issuance costs

 

 

 

10,130

 

$

10,130

 

$

10,130

 

$

10,130

 

$

10,130

Average total common stockholders' equity

 

 

$

753,301

 

$

742,524

 

$

733,988

 

$

739,776

 

$

746,728

Less:  Average intangible assets

 

 

 

(92,922)

 

$

(93,341)

 

$

(93,759)

 

$

(94,217)

 

$

(94,697)

Average tangible common equity

 

 

$

660,379

 

$

649,183

 

$

640,229

 

$

645,559

 

$

652,031

Credit Quality Metrics to Non-GAAP Credit Quality Metrics excluding PREPA  (Held-for-sale as of Q3 2016)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Charge-offs

 

 

$

65,352

 

$

9,478

 

$

10,048

 

$

12,737

 

$

9,097

Less:  PREPA charge-off

 

 

 

(56,229)

 

 

-

 

 

-

 

 

-

 

 

-

Net Charge-offs, excluding PREPA (Non-GAAP)

 

 

$

9,123

 

$

9,478

 

$

10,048

 

$

12,737

 

$

9,097

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Loans Held For Investment

 

 

$

3,160,091

 

$

3,129,570

 

$

3,100,157

 

$

3,043,109

 

$

2,959,961

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charge-off rate, excluding PREPA (Non-GAAP)

 

 

 

1.15%

 

 

1.21%

 

 

1.30%

 

 

1.67%

 

 

1.23%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming Loans

 

 

$

110,886

 

$

290,391

 

$

298,475

 

$

303,205

 

$

312,300

Less:  PREPA

 

 

 

-

 

 

(183,020)

 

 

(186,675)

 

 

(190,290)

 

 

(193,904)

Nonperforming Loans, excluding PREPA (Non-GAAP)

 

 

$

110,886

 

$

107,371

 

$

111,800

 

$

112,915

 

$

118,396

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-acquired loans held for investment, gross

 

 

$

3,011,799

 

$

3,196,067

 

$

3,116,690

 

$

3,111,590

 

$

3,027,289

Less:  PREPA

 

 

 

-

 

 

(183,020)

 

 

(186,675)

 

 

(190,290)

 

 

(193,904)

Non-acquired loans held for investment, excluding PREPA (Non-GAAP)

 

 

$

3,011,799

 

$

3,013,047

 

$

2,930,015

 

$

2,921,300

 

$

2,833,385

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loan rate, excluding PREPA (Non-GAAP)

 

 

 

3.68%

 

 

3.56%

 

 

3.82%

 

 

3.87%

 

 

4.18%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 9: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures (Continued)

 

 

 

 

 

 

BASEL III

 

 

 

 

Standardized

 

 

 

 

2016

 

2016

 

2016

 

2015

 

2015

 

(Dollars in thousands) (unaudited)

 

 

Q3

 

Q2

 

Q1

 

Q4

 

Q3

 

Regulatory Capital Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital

 

 

$

612,792

 

 

596,080

 

 

585,144

 

 

594,482

 

 

601,789

 

Tier 1 capital

 

 

 

801,882

 

 

788,349

 

 

776,180

 

 

782,912

 

 

782,561

 

Total risk-based capital

(19)

 

 

860,513

 

 

849,147

 

 

838,283

 

 

846,747

 

 

847,267

 

Risk-weighted assets

 

 

 

4,593,340

 

 

4,716,534

 

 

4,744,449

 

 

4,896,539

 

 

5,003,285

 

Regulatory Capital Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital ratio

(20)

 

 

13.34%

 

 

12.64%

 

 

12.33%

 

 

12.14%

 

 

12.03%

 

Tier 1 risk-based capital ratio

(21)

 

 

17.46%

 

 

16.71%

 

 

16.36%

 

 

15.99%

 

 

15.64%

 

Total risk-based capital ratio

(22)

 

 

18.73%

 

 

18.00%

 

 

17.67%

 

 

17.29%

 

 

16.93%

 

Leverage ratio

(23)

 

 

12.35%

 

 

11.92%

 

 

11.38%

 

 

11.18%

 

 

10.93%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

 

$

924,934

 

 

915,890

 

 

903,801

 

 

897,077

 

 

907,888

 

Less:  Noncumulative perpetual preferred stock

 

 

 

(176,000)

 

 

(176,000)

 

 

(176,000)

 

 

(176,000)

 

 

(176,000)

 

          Noncumulative perpetual preferred stock issuance costs

 

 

 

10,130

 

 

10,130

 

 

10,130

 

 

10,130

 

 

10,130

 

          Unrealized gains on available-for-sale securities, net of income tax

(24)

 

 

(17,554)

 

 

(18,085)

 

 

(15,089)

 

 

(16,925)

 

 

(22,486)

 

          Unrealized losses on cash flow hedges, net of income tax

(24)

 

 

1,710

 

 

2,281

 

 

2,805

 

 

2,927

 

 

4,330

 

 

 

 

 

743,220

 

 

734,216

 

 

725,647

 

 

717,209

 

 

723,862

 

Less:    Disallowed goodwill

 

 

 

(86,069)

 

 

(86,069)

 

 

(86,069)

 

 

(86,069)

 

 

(86,069)

 

            Disallowed other intangible assets, net

(25)

 

 

(2,408)

 

 

(2,561)

 

 

(2,715)

 

 

(1,912)

 

 

(2,028)

 

            Disallowed deferred tax assets, net

(25)

 

 

(41,951)

 

 

(49,506)

 

 

(51,719)

 

 

(34,746)

 

 

(33,976)

 

Common equity Tier 1 capital

 

 

 

612,792

 

 

596,080

 

 

585,144

 

 

594,482

 

 

601,789

 

Plus:  Qualifying noncumulative perpetual preferred stock

 

 

 

176,000

 

 

176,000

 

 

176,000

 

 

176,000

 

 

176,000

 

            Qualifying noncumulative perpetual preferred stock issuance costs

 

 

 

(10,130)

 

 

(10,130)

 

 

(10,130)

 

 

(10,130)

 

 

(10,130)

 

            Subordinated capital notes

 

 

 

35,000

 

 

35,000

 

 

35,000

 

 

35,000

 

 

35,000

 

Less:  Disallowed deferred tax assets, net

 

 

 

(11,780)

 

 

(8,601)

 

 

(9,834)

 

 

(12,440)

 

 

(20,098)

 

Tier 1 capital

 

 

 

801,882

 

 

788,349

 

 

776,180

 

 

782,912

 

 

782,561

 

Plus tier 2 capital:  Qualifying allowance for loan and lease losses

 

 

 

58,631

 

 

60,798

 

 

62,103

 

 

63,835

 

 

64,706

 

Total risk-based capital

 

 

$

860,513

 

$

849,147

 

$

838,283

 

$

846,747

 

$

847,267

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

Table 10: Notes to Financial Summary, Selected Metrics, Loans, and Consolidated Financial Statements (Tables 1 - 9)

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

We use the term "acquired loans" to refer to loans acquired from the BBVAPR acquisition (December 18, 2012) and loans acquired in the Eurobank FDIC-Assisted acquisition (April 30, 2010), recorded at fair value at acquisition. The majority of these loans acquired are subsequently accounted for based on estimated cash flows expected to be collected over the life of the loans (under the accounting standard known as ASC 310-30). Because the guidance takes into consideration future credit losses expected to be incurred over the life of the loans, there are no charge-offs or an allowance associated with this loans unless the estimated cash flows expected to be collected decrease subsequent to acquisition. In addition, these loans are not classified as delinquent or nonperforming even though the customer may be contractually past due because we expect that we will fully collect the carrying value of these loans. Acquired loans also include loans acquired in the BBVAPR acquisition that were accounted for under the provisions of ASC 310-20, which at the end of the reporting period still have unamortized premium or discount. The fair value of these loans already include a credit mark for losses estimated on these loans.  The allowance for loan and lease losses for these loans consider such marks applied. The accounting and classification of these loans may significantly alter some of our reported credit quality metrics. We therefore supplement certain reported credit quality metrics with metrics adjusted to exclude the impact of these acquired loans. Loans acquired in the BBVAPR acquisition that were accounted for under the provisions of ASC 310-20, which had fully amortized their premium or discount recorded at the date of acquisition at the end of the reporting period, are removed from the acquired loans category.

(2)

Total banking and wealth management revenues.

(3)

During Q3 2016, the Company entered into an agreement to sell its outstanding participation in the PREPA line of credit for $124 million, slightly lower than the adjusted book balance, net of reserves. At September 30, 2016, this line of credit was reported as other loans held for sale, at fair value. Proceeds were received in October 7, 2016. As a result of this transaction, the Company recognized a $56.2 million charge-off and a $2.9 provision for loan and lease losses during the quarter ended September 30, 2016.

(4)

Calculated based on net income (loss) available to common shareholders divided by average common shares outstanding for the period.

(5)

Calculated based on net income (loss) available to common shareholders plus the preferred dividends on the convertible preferred stock, divided by total average common shares outstanding and equivalents for the period as if converted.

(6)

Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 9: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.

(7)

Information includes all loans held for investment, including all acquired loans. Acquired loans, including those accounted for under ASC 310-30, are disclosed at carrying amount.

(8)

Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.

(9)

Calculated based on annualized income, net of tax, for the period divided by average total assets for the period.

(10)

Calculated based on annualized income available to common shareholders for the period divided by average tangible common equity for the period.

(11)

Calculated based on non-interest expense for the period divided by total net interest income and total banking and financial services revenues for the period.

(12)

Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.

(13)

Non-GAAP ratios. See "Table 9: Reconciliation of GAAP to Non_GAAP Measures and Calculation of Regulatory Capital Measures" for information on the calculation of each of these ratios.

(14)

Covered loans are no longer a material amount. Therefore, during Q3 2015, the Company changed its presentation of loans to include the following loan segments:  "Non-acquired" loans, "Acquired BBVAPR" loans and "Acquired Eurobank" loans.

(15)

During Q3 2016, the Company received $5 million from a claim of loss in 2009 from a BALTA private label collaterized obligation.

(16)

During Q3 2016, the Company paid down at maturity $205.0 million in FHLB advances and a former BBVA subordinated capital note of $67.0 million, assumed as part of the 2012 acquisition of its PR operations.

(17)

Production of new loans (excluding renewals).

(18)

Loans accounted for under ASC 310-30 (loans acquired with deteriorated credit quality, including those by analogy), including Eurobank acquired loans, are considered to be performing due to the application of the accretion method, in which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analyses. Therefore, they are not included as non-performing loans.

(19)

Total risk-based capital equals the sum of Tier 1 capital and Tier 2 capital.

(20)

Common equity Tier 1 capital ratio is a regulatory capital measure calculated based on Common equity Tier 1 capital divided by risk-weighted assets.

(21)

Tier 1 risk-based capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.

(22)

Total risk-based capital ratio is a regulatory capital measure calculated based on Total risk-based capital divided by risk-weighted assets.

(23)

Leverage capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by average assets, after certain adjustments.

(24)

During Q1 2015, the Company decided to elect the opt-out option to continue to exclude AOCI items from regulatory capital calculation.

(25)

Amounts based on transition provisions for regulatory capital deductions and adjustments of 60% for 2016 and 40% for 2015.

 

 

 

 

 

 

 

 

 

 

 

 

 

14

 

 

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