OFG BANCORP - FORM 8-K - EX-99 - PRESS RELEASE - April 21, 2017

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8-K - FORM 8-K - OFG BANCORPofg8K2017331.htm

 

 

Exhibit 99

 

OFG Bancorp Reports 4Q16 & 2016 Results

SAN JUAN, Puerto Rico, April 21, 2017 – OFG Bancorp (NYSE: OFG) today reported results for the first quarter ended March 31, 2017.

1Q17 Highlights

•      Net income available to shareholders held steady. OFG reported $11.7 million, or $0.26 per share fully diluted, compared to $12.1 million, or $0.27 per share, in 4Q16 and $10.7 million, or $0.24 per share, in the year ago 1Q16.

•      Oriental Bank’s retail franchise continues to grow. Auto and consumer loan generation was strong, customer deposits increased 1.3% from the previous quarter, and retail accounts grew 5% year over year.

•      Innovation streak continues. Oriental Bank introduced the first fully integrated online and mobile personal loan application in Puerto Rico.

•      Net interest margin expanded. NIM increased 16 basis points from 4Q16 to 5.10% due to a significant reduction in the cost of borrowings and as the proportion of higher yielding auto and consumer loans increased.

•      The remaining FDIC loss share agreement was terminated. This is in line with OFG’s ongoing efforts to optimize its operations.

•      Credit quality strong. The net charge off, non-performing loan and total delinquency rates declined from 4Q16.

•      Major performance ratios solid. Return on average assets was 0.95%, return on average tangible common stockholders' equity 7.00%, and efficiency ratio 56.15%.

•      Capital buildup continues. All major capital metrics advanced compared to the previous and year ago quarters. Tangible book value per common share at $15.33 was up 1.7% and 4.4%, respectively, and the tangible common equity ratio at 10.66% was up 33 and 116 basis points, respectively.

CEO Comment

 

 

José Rafael Fernández, President, Chief Executive Officer, and Vice Chairman of the Board, commented:

“OFG Bancorp once again delivered consistent quarterly earnings, generating $0.26 per share for the first quarter of 2017, with consistent quality in our performance, especially in light of our operating environment.

“Our overall results reflect the strength of our retail franchise, where we saw quarter over quarter and year over year increases in loan production and balances, deposits and customers.

“We continued to lead the way in deploying customer-facing banking technology in Puerto Rico, launching the first fully integrated online personal loans application. This is part of our highly successful strategy of differentiating ourselves in delivering unparalleled customer experience.

“As planned during the quarter, we significantly reduced our borrowing costs and balances and ended our remaining loss share agreement with the FDIC, as part of our ongoing efforts to optimize operating results.

“We continued to control credit quality in our challenging environment. This enabled us to dramatically lower credit risk levels, while enhancing our financial strength, as evidenced by our credit trends and capital ratios, which are significantly stronger today than they were five years ago.

“In mid-March, the Financial Oversight and Management Board and the Puerto Rico Government reached an agreement on a 10-year fiscal plan. Steps in the right direction such as this will help increase confidence among people and businesses in Puerto Rico. However, there is much more to be done to restore Puerto Rico’s fiscal stability, competitiveness and economic growth.

“To sum up, we are pleased with our performance and how we have proactively managed our business. While optimistic, we will continue to closely monitor local economic conditions.”

1Q17 Income Statement Highlights

The following compares data for the first quarter 2017 to the fourth quarter 2016, unless otherwise noted.

•      Interest Income:

o    Originated Loans: Increased $0.4 million to $52.0 million, due to higher yields from a larger proportion of retail loans.

o    Acquired Loans: Declined $1.2 million to $25.7 million, reflecting continued pay downs.

 

 

o    Securities: Increased $0.2 million to $8.5 million, a result of higher interest rates on our cash balances.

•      Interest Expense declined $1.0 million to $11.6 million. In March 2017, a $232.0 million repurchase agreement at 4.78% was repaid.

•      Total Provision for Loan and Lease Losses increased $4.3 million to $17.6 million. Provision for originated loans increased $1.1 million due to continued growth of the portfolio. Provision for acquired loans increased $3.2 million due to periodic assessment of loans remaining in these portfolios.

•      Core Net Interest Margin (excluding cost recoveries) expanded to 5.00% from 4.89% primarily due to lower borrowing balances.

•      Total Banking and Wealth Management Revenues declined $3.0 million to $17.4 million. In 4Q16, wealth management and banking services benefitted from $1.9 million in seasonal year end income. In 1Q17, mortgage banking declined $1.1 million due to lower secondary market activity and servicing asset valuation.

•      FDIC Shared-Loss Expense saw a one-time net gain of $1.4 million, reflecting the outcome of the previously announced February 2017 termination of the FDIC shared loss agreement covering the former Eurobank loan portfolio.

•      Total Non-Interest Expenses declined $0.7 million to $51.7 million due to lower costs partially offset by higher seasonal compensation and the semi-annual payment of property taxes in credit related expenses.

•      Effective Tax Rate was 38.3% compared to 41.1% in 4Q16.

March 31, 2017 Balance Sheet Highlights

The following compares data at March 31, 2017 to December 31, 2016, unless otherwise noted.

•      Total Loans Net declined $58.0 million to $4.09 billion. 1Q17 new retail loan production increased 0.8% to $172.4 million. Auto increased 11.8% due to the success of marketing efforts with our floor plan auto dealers. Consumer was level, but 23.0% higher than 1Q16, while mortgage declined 15.1% due to market contraction. Commercial loan production declined to $37.7 million, reflecting the seasonality of this business.

•      Total Investments increased $33.0 million to $1.40 billion. This reflected new purchases of agency mortgage backed securities, partially offset by prepayments.

•      Customer Deposits increased $53.9 million to $4.14 billion from both existing and new customers.

 

 

•      Total Borrowings declined $123.0 million to $672.4 million due to a reduction in repurchase agreement balances. On a year over year basis, borrowings declined $400.3 million with large reductions in all categories.

•      Total Stockholders’ Equity increased $11.0 million to $931.4 million primarily due to increases in retained earnings.

 

 

 

Credit Quality Highlights

The following compares data at March 31, 2017 to December 31, 2016, unless otherwise noted.

•      Net Charge-Off Rate fell 40 basis points to 1.40% due to declines in the commercial, auto and consumer loan categories, partially offset by an increase in mortgage loans.

•      Early Delinquency Rate increased 11 basis points to 3.42% due to increases in commercial and consumer loans, partially offset by improvements in auto and mortgage loans.

•      Non-Performing Loan Rate fell 29 basis points to 3.17% due to declines in mortgage, auto and consumer loans.

•      Total Delinquency Rate was down 15 basis points to 6.34% due to declines in auto and mortgage loans, partially offset by commercial and consumer loans.

•      Allowance for Loan and Lease Losses increased $1.2 million to $60.5 million. The loan loss reserve ratio to total loans (excluding acquired loans) rose 3 basis points to 1.98%.

Capital Position

The following compares data at March 31, 2017 to December 31, 2016, unless otherwise noted.

Capital continued to build and remains significantly above regulatory requirements for a well-capitalized institution.

•      Tangible Common Equity to Total Tangible Assets at 10.66% increased 33 basis points from 4Q16 and 116 basis points year over year to the highest level in five quarters.

•      Tangible Book Value per Common Share at $15.33 increased 1.7% from 4Q16 and 4.4% year over year to the highest level in five quarters.

•      Common Equity Tier 1 Capital Ratio (using Basel III methodology) at 14.30% increased 25 basis points from 4Q16 and 197 basis points year over year to the highest level in five quarters.

•      Total Risk-Based Capital Ratio at 20.05% increased 43 basis points from 4Q16 and 238 basis points year over year to the highest level in five quarters.

 

 

 

Conference Call

A conference call to discuss OFG’s results for the first quarter 2017, outlook and related matters will be held today, Friday, April 21, 2017 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 first quarter ended March 31, 2017, 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 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, 2016, 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 53rd 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 wide range of retail and commercial banking, lending and wealth management products, services and technology, 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 March 31, 2017 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

  

 

Table  6:

 

Loan Information and Performance Statistics (Excluding Acquired Loans)

 

7-8

  

 

Table  7:

 

Allowance for Loan and Lease Losses

 

9

  

 

Table  8:

 

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

 

 

  

 

 

 

   with Deteriorated Credit Quality, Including those by Analogy)

 

10

  

 

Table  9:

 

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

 

 

  

 

 

 

   Capital

 

11-12

  

 

Table  10:

 

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

 

 

  

 

 

 

  Financial Statements (Tables 1-9)

 

13

  

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 1: Financial and Statistical Summary - Consolidated

 

 

 

2017

 

2016

 

2016

 

2016

 

2016

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

 

 

Q1

 

Q4

 

Q3

 

Q2

 

Q1

Earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

$

74,618

 

$

74,213

 

$

76,927

 

$

73,312

 

$

74,975

Non-interest income, net (core)

(2)

 

 

17,428

 

 

20,415

 

 

18,277

 

 

18,284

 

 

17,125

Non-interest expense

 

 

 

51,684

 

 

52,382

 

 

54,926

 

 

53,825

 

 

54,857

Pre-provision net revenues

 

 

 

40,362

 

 

42,246

 

 

40,278

 

 

37,771

 

 

37,243

Provision for loan and lease losses

 

 

 

17,654

 

 

13,373

 

 

23,469

(a)

 

14,445

 

 

13,789

FDIC shared-loss (benefit) expense, net

 

 

 

(1,403)

 

 

2,836

 

 

3,296

 

 

3,420

 

 

4,029

Net income before income taxes

 

 

 

24,354

 

 

26,404

 

 

18,747

 

 

20,197

 

 

19,832

Income tax expense

 

 

 

9,204

 

 

10,848

 

 

3,627

 

 

5,858

 

 

5,661

Net income

 

 

$

15,150

 

$

15,556

 

$

15,120

 

$

14,339

 

$

14,171

Common Share Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - basic

(3)

 

$

0.27

 

$

0.28

 

$

0.27

 

$

0.25

 

$

0.24

Earnings per common share - diluted

(4)

 

$

0.26

 

$

0.27

 

$

0.26

 

$

0.25

 

$

0.24

Average common shares outstanding

 

 

 

43,915

 

 

43,914

 

 

43,926

 

 

43,914

 

 

43,898

Average common shares outstanding and equivalents

 

 

 

51,131

 

 

51,098

 

 

51,111

 

 

51,095

 

 

51,064

Cash dividends per common share

 

 

$

0.06

 

$

0.06

 

$

0.06

 

$

0.06

 

$

0.06

Book value per common share (period end)

 

 

$

17.42

 

$

17.18

 

$

17.29

 

$

17.08

 

$

16.80

Tangible book value per common share (period end)

(5)

 

$

15.33

 

$

15.08

 

$

15.18

 

$

14.96

 

$

14.68

Balance Sheet (Average Balances)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

(6)

 

$

4,141,628

 

$

4,195,966

 

$

4,398,032

 

$

4,445,658

 

$

4,484,410

Interest-earning assets

 

 

 

5,932,923

 

 

5,972,163

 

 

6,169,251

 

 

6,270,042

 

 

6,437,255

Total assets

 

 

 

6,374,177

 

 

6,455,023

 

 

6,653,446

 

 

6,778,190

 

 

6,990,161

Interest-bearing deposits

 

 

 

3,850,506

 

 

3,875,536

 

 

3,920,565

 

 

3,929,280

 

 

3,956,790

Borrowings

 

 

 

715,951

 

 

750,446

 

 

917,212

 

 

1,047,753

 

 

1,239,672

Stockholders' equity

 

 

 

926,011

 

 

919,697

 

 

919,171

 

 

908,394

 

 

899,858

Common stockholders' equity

 

 

 

760,141

 

 

753,827

 

 

753,301

 

 

742,524

 

 

733,988

Performance Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

(7)

 

 

5.10%

 

 

4.94%

 

 

4.95%

 

 

4.69%

 

 

4.67%

Return on average assets

(8)

 

 

0.95%

 

 

0.96%

 

 

0.91%

 

 

0.85%

 

 

0.81%

Return on average tangible common stockholders' equity

(9)

 

 

7.00%

 

 

7.31%

 

 

7.06%

 

 

6.70%

 

 

6.69%

Efficiency ratio

(10)

 

 

56.15%

 

 

55.36%

 

 

57.69%

 

 

58.76%

 

 

59.56%

Full-time equivalent employees, period end

 

 

 

1,429

 

 

1,416

 

 

1,439

 

 

1,451

 

 

1,467

Credit Quality Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Excluding acquired loans:

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Allowance for loan and lease losses

 

 

$

60,483

 

$

59,300

 

$

62,168

(a)

$

112,812

 

$

113,238

    Allowance as a % of loans held for investment

 

 

 

1.98%

 

 

1.95%

 

 

2.06%

 

 

3.53%

 

 

3.63%

    Net charge-offs

 

 

$

10,552

 

$

13,506

 

$

65,352

(a)

$

9,478

 

$

10,048

    Net charge-off rate

(11)

 

 

1.40%

 

 

1.80%

 

 

8.27%

(a)

 

1.21%

 

 

1.30%

    Early delinquency rate (30 - 89 days past due)

 

 

 

3.42%

 

 

3.31%

 

 

3.70%

 

 

3.31%

 

 

3.51%

    Total delinquency rate (30 days and over)

 

 

 

6.34%

 

 

6.49%

 

 

6.92%

 

 

6.28%

 

 

6.72%

Capital Ratios (Non-GAAP)

(12)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leverage ratio

 

 

 

13.20%

 

 

12.99%

 

 

12.35%

 

 

11.92%

 

 

11.38%

Common equity Tier 1 capital ratio

 

 

 

14.30%

 

 

14.05%

 

 

13.34%

 

 

12.64%

 

 

12.33%

Tier 1 risk-based capital ratio

 

 

 

18.77%

 

 

18.35%

 

 

17.46%

 

 

16.71%

 

 

16.36%

Total risk-based capital ratio

 

 

 

20.05%

 

 

19.62%

 

 

18.73%

 

 

18.00%

 

 

17.67%

Tangible common equity ("TCE") ratio

 

 

 

10.66%

 

 

10.33%

 

 

10.25%

 

 

9.92%

 

 

9.50%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) 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 on October 7, 2016. As a result of this transaction, the Company recognized a $56.2 million charge-off and a $2.9 million provision for loan and lease losses during the quarter ended September 30, 2016.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 2: Consolidated Statements of Operations

 

 

 

Quarter Ended

 

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

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

 

 

2017

 

2016

 

2016

 

2016

 

2016

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Non-acquired loans

 

 

$

51,955

 

$

51,581

 

$

50,568

 

$

49,108

 

$

47,915

    Acquired BBVAPR loans

 

 

 

19,085

 

 

20,232

 

 

22,723

 

 

23,670

 

 

25,676

    Acquired Eurobank loans

 

 

 

6,610

 

 

6,701

 

 

9,313

 

 

6,897

 

 

7,561

          Total interest income from loans

 

 

 

77,650

 

 

78,514

 

 

82,604

 

 

79,675

 

 

81,152

Investment securities

 

 

 

8,528

 

 

8,280

 

 

7,980

 

 

8,233

 

 

10,154

          Total interest income

 

 

 

86,178

 

 

86,794

 

 

90,584

 

 

87,908

 

 

91,306

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Core deposits

 

 

 

5,468

 

 

5,536

 

 

5,580

 

 

5,551

 

 

5,136

    Brokered deposits

 

 

 

1,885

 

 

1,895

 

 

1,751

 

 

1,816

 

 

1,988

          Total deposits

 

 

 

7,353

 

 

7,431

 

 

7,331

 

 

7,367

 

 

7,124

Borrowings

 

 

 

4,207

 

 

5,150

 

 

6,326

 

 

7,229

 

 

9,207

          Total interest expense

 

 

 

11,560

 

 

12,581

 

 

13,657

 

 

14,596

 

 

16,331

Net interest income

 

 

 

74,618

 

 

74,213

 

 

76,927

 

 

73,312

 

 

74,975

    Provision for loan and lease losses, excluding acquired loans

(1)

 

 

11,735

 

 

10,638

 

 

14,708

(a)

 

9,052

 

 

10,660

    Provision for acquired BBVAPR loan and lease losses

(1)

 

 

4,299

 

 

3,135

 

 

7,942

 

 

4,362

 

 

2,324

    Provision (recapture) for acquired Eurobank loan and lease losses

(1)

 

 

1,620

 

 

(400)

 

 

819

 

 

1,031

 

 

805

          Total provision for loan and lease losses, net

 

 

 

17,654

 

 

13,373

 

 

23,469

 

 

14,445

 

 

13,789

          Net interest income after provision for loan and lease losses

 

 

 

56,964

 

 

60,840

 

 

53,458

 

 

58,867

 

 

61,186

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Banking service revenues

 

 

 

10,626

 

 

10,980

 

 

10,330

 

 

10,219

 

 

10,118

Wealth management revenues

 

 

 

6,215

 

 

7,714

 

 

6,526

 

 

7,041

 

 

6,152

Mortgage banking activities

 

 

 

587

 

 

1,721

 

 

1,421

 

 

1,024

 

 

855

          Total banking and wealth management revenues

 

 

 

17,428

 

 

20,415

 

 

18,277

 

 

18,284

 

 

17,125

FDIC shared-loss benefit (expense), net

(21)

 

 

1,403

 

 

(2,836)

 

 

(3,296)

 

 

(3,420)

 

 

(4,029)

Other gains, net

 

 

 

243

 

 

367

 

 

5,234

(b)

 

291

 

 

407

          Total non-interest income, net

 

 

 

19,074

 

 

17,946

 

 

20,215

 

 

15,155

 

 

13,503

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

 

 

20,390

 

 

18,928

 

 

19,191

 

 

18,531

 

 

20,284

Rent and occupancy costs

 

 

 

7,367

 

 

7,553

 

 

7,484

 

 

8,107

 

 

7,822

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

 

 

 

1,326

 

 

1,219

 

 

2,970

 

 

4,163

 

 

1,930

General and administrative expenses

 

 

 

19,975

 

 

22,592

 

 

21,562

 

 

20,821

 

 

22,566

          Total operating expenses

 

 

 

49,058

 

 

50,292

 

 

51,207

 

 

51,622

 

 

52,602

Credit related expenses

 

 

 

2,626

 

 

2,090

 

 

3,719

 

 

2,203

 

 

2,255

          Total non-interest expense

 

 

 

51,684

 

 

52,382

 

 

54,926

 

 

53,825

 

 

54,857

Income before income taxes

 

 

 

24,354

 

 

26,404

 

 

18,747

 

 

20,197

 

 

19,832

Income tax expense

 

 

 

9,204

 

 

10,848

 

 

3,627

 

 

5,858

 

 

5,661

Net income

 

 

 

15,150

 

 

15,556

 

 

15,120

 

 

14,339

 

 

14,171

Less:  dividends on preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Convertible preferred stock

 

 

 

(1,838)

 

 

(1,837)

 

 

(1,838)

 

 

(1,837)

 

 

(1,838)

    Other preferred stock

 

 

 

(1,627)

 

 

(1,629)

 

 

(1,627)

 

 

(1,629)

 

 

(1,627)

Net income available to common shareholders

 

 

$

11,685

 

$

12,090

 

$

11,655

 

$

10,873

 

$

10,706

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) 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 on 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.

(b) During Q3 2016, the Company received $5 million from a 2009 claim of loss related to a private label collateralized obligation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 3: Consolidated Statements of Financial Condition

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

(Dollars in thousands) (unaudited)

 

 

2017

 

2016

 

2016

 

2016

 

2016

 

Cash and cash equivalents

 

 

$

483,301

 

$

513,469

 

$

512,295

 

$

520,078

 

$

681,198

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading securities

 

 

 

314

 

 

347

 

 

380

 

 

348

 

 

314

 

Investment securities available-for-sale, at fair value, with amortized cost of $796,558

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    (December 31, 2016 - $749,867; September 30, 2016 - $623,994; June 30, 2016 - $645,298;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    March 31, 2016 - $653,673)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Mortgage-backed securities

 

 

 

741,405

 

 

692,552

 

 

632,429

 

 

651,724

 

 

656,137

 

    Other investment securities

 

 

 

58,637

 

 

58,932

 

 

10,254

 

 

12,578

 

 

13,148

 

          Total investment securities available-for-sale

 

 

 

800,042

 

 

751,484

 

 

642,683

 

 

664,302

 

 

669,285

 

Mortgage-backed securities held-to-maturity, at amortized cost, with fair value of $570,963

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    (December 31, 2016 - $592,763; September 30, 2016 - $650,023; June 30, 2016 - $643,530;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     March 31, 2016 - $641,346)

 

 

 

577,997

 

 

599,884

 

 

641,890

 

 

635,399

 

 

637,036

 

Federal Home Loan Bank (FHLB) stock, at cost

 

 

 

17,161

 

 

10,793

 

 

12,712

 

 

19,838

 

 

20,761

 

Other investments

 

 

 

3

 

 

3

 

 

3

 

 

3

 

 

3

 

          Total investments

 

 

 

1,395,517

 

 

1,362,511

 

 

1,297,668

 

 

1,319,890

 

 

1,327,399

 

Loans, net

 

 

 

4,089,708

 

 

4,147,692

 

 

4,298,965

(a)

 

4,373,617

 

 

4,360,129

 

Other assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FDIC shared-loss indemnification asset

(21)

 

 

-

 

 

14,411

 

 

16,670

 

 

18,426

 

 

20,923

 

Derivative assets

 

 

 

1,123

 

 

1,330

 

 

1,503

 

 

1,926

 

 

2,662

 

Prepaid expenses

 

 

 

15,496

 

 

17,096

 

 

19,514

 

 

16,332

 

 

10,363

 

Deferred tax asset, net

 

 

 

121,442

 

 

124,200

 

 

131,061

 

 

143,048

 

 

145,518

 

Foreclosed real estate and repossessed properties

 

 

 

50,820

 

 

50,743

 

 

49,188

 

 

55,086

 

 

61,145

 

Premises and equipment, net

 

 

 

69,786

 

 

70,407

 

 

71,105

 

 

72,585

 

 

73,975

 

Goodwill

 

 

 

86,069

 

 

86,069

 

 

86,069

 

 

86,069

 

 

86,069

 

Accounts receivable and other assets

 

 

 

101,345

 

 

113,896

 

 

108,075

 

 

105,539

 

 

105,191

 

Total assets

 

 

$

6,414,607

 

$

6,501,824

 

$

6,592,113

 

$

6,712,596

 

$

6,874,572

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

$

1,944,921

 

$

1,939,764

 

$

2,012,255

 

$

1,972,743

 

$

2,018,346

 

Savings accounts

 

 

 

1,174,581

 

 

1,128,190

 

 

1,118,783

 

 

1,110,423

 

 

1,110,469

 

Time deposits

 

 

 

1,022,447

 

 

1,020,138

 

 

1,042,572

 

 

999,243

 

 

962,773

 

Brokered deposits

 

 

 

575,879

 

 

576,395

 

 

581,161

 

 

561,645

 

 

688,105

 

          Total deposits

 

 

 

4,717,828

 

 

4,664,487

 

 

4,754,771

 

 

4,644,054

 

 

4,779,693

 

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities sold under agreements to repurchase

 

 

 

531,179

 

 

653,756

 

 

658,232

 

 

626,109

 

 

636,172

 

Advances from FHLB and other borrowings

 

 

 

105,133

 

 

105,515

 

 

105,984

(b)

 

308,233

 

 

333,736

 

Subordinated capital notes

 

 

 

36,083

 

 

36,083

 

 

36,083

(b)

 

102,983

 

 

102,808

 

          Total borrowings

 

 

 

672,395

 

 

795,354

 

 

800,299

 

 

1,037,325

 

 

1,072,716

 

Other liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

 

 

1,967

 

 

2,437

 

 

4,306

 

 

5,413

 

 

6,220

 

Acceptances outstanding

 

 

 

24,288

 

 

23,765

 

 

18,043

 

 

20,984

 

 

19,381

 

Accrued expenses and other liabilities

 

 

 

66,700

 

 

95,370

 

 

89,760

 

 

88,930

 

 

92,761

 

          Total liabilities

 

 

 

5,483,178

 

 

5,581,413

 

 

5,667,179

 

 

5,796,706

 

 

5,970,771

 

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

 

 

 

540,808

 

 

540,948

 

 

540,692

 

 

540,705

 

 

540,371

 

Legal surplus

 

 

 

77,772

 

 

76,293

 

 

74,788

 

 

73,265

 

 

71,865

 

Retained earnings 

 

 

 

185,377

 

 

177,808

 

 

169,858

 

 

162,363

 

 

155,529

 

Treasury stock, at cost

 

 

 

(104,502)

 

 

(104,860)

 

 

(104,874)

 

 

(104,874)

 

 

(104,874)

 

Accumulated other comprehensive income, net

 

 

 

3,348

 

 

1,596

 

 

15,844

 

 

15,805

 

 

12,284

 

          Total stockholders' equity

 

 

 

931,429

 

 

920,411

 

 

924,934

 

 

915,890

 

 

903,801

 

          Total liabilities and stockholders' equity

 

 

$

6,414,607

 

$

6,501,824

 

$

6,592,113

 

$

6,712,596

 

$

6,874,572

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) 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 on 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.

(b) During Q3 2016, the Company paid-off, 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 4: Information on Loan Portfolio and Production

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

(Dollars in thousands) (unaudited)

 

 

2017

 

2016

 

2016

 

2016

 

2016

 

Non-acquired loans held for investment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Mortgage

 

 

$

 709,863  

 

$

 721,494  

 

$

 735,367  

 

$

 741,917  

 

$

 751,819  

 

      Commercial

 

 

 

 1,253,712  

 

 

 1,277,866  

 

 

 1,267,177  

(b)

 

 1,476,613  

 

 

 1,425,385  

 

      Consumer

 

 

 

 300,412  

 

 

 290,515  

 

 

 278,666  

 

 

 265,269  

 

 

 252,327  

 

      Auto

 

 

 

 786,606  

 

 

 756,395  

 

 

 730,589  

 

 

 712,268  

 

 

 687,159  

 

 

 

 

 

 3,050,593  

 

 

 3,046,270  

 

 

 3,011,799  

 

 

 3,196,067  

 

 

 3,116,690  

 

      Less:  Allowance for loan and lease losses

 

 

 

 (60,483) 

 

 

 (59,301) 

 

 

 (62,168) 

(b)

 

 (112,812) 

 

 

 (113,238) 

 

 

 

 

 

 2,990,110  

 

 

 2,986,969  

 

 

 2,949,631  

 

 

 3,083,255  

 

 

 3,003,452  

 

      Deferred loan costs, net

 

 

 

 6,464  

 

 

 5,766  

 

 

 5,421  

 

 

 4,619  

 

 

 4,350  

 

          Total non-acquired loans held for investment, net

 

 

 

 2,996,574  

 

 

 2,992,735  

 

 

 2,955,052  

 

 

 3,087,874  

 

 

 3,007,802  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans:

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BBVAPR

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Accounted for under ASC 310-20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Commercial

 

 

 

 5,436  

 

 

 5,562  

 

 

 5,755  

 

 

 4,559  

 

 

 6,558  

 

      Consumer

 

 

 

 31,001  

 

 

 32,862  

 

 

 34,215  

 

 

 35,194  

 

 

 36,346  

 

      Auto

 

 

 

 42,523  

 

 

 53,026  

 

 

 64,393  

 

 

 77,118  

 

 

 91,406  

 

 

 

 

 

 78,960  

 

 

 91,450  

 

 

 104,363  

 

 

 116,871  

 

 

 134,310  

 

      Less:  Allowance for loan and lease losses

 

 

 

 (3,615) 

 

 

 (4,299) 

 

 

 (4,213) 

 

 

 (4,487) 

 

 

 (4,993) 

 

 

 

 

 

 75,345  

 

 

 87,151  

 

 

 100,150  

 

 

 112,384  

 

 

 129,317  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Accounted for under ASC 310-30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Mortgage

 

 

 

 558,112  

 

 

 569,253  

 

 

 579,769  

 

 

 591,029  

 

 

 600,901  

 

      Commercial

 

 

 

 278,665  

 

 

 292,564  

 

 

 301,599  

 

 

 323,105  

 

 

 345,789  

 

      Consumer

 

 

 

 3,201  

 

 

 4,301  

 

 

 5,768  

 

 

 7,331  

 

 

 9,345  

 

      Auto

 

 

 

 71,495  

 

 

 85,676  

 

 

 100,475  

 

 

 117,038  

 

 

 134,669  

 

 

 

 

 

 911,473  

 

 

 951,794  

 

 

 987,611  

 

 

 1,038,503  

(a)

 

 1,090,704  

 

      Less:  Allowance for loan and lease losses

 

 

 

 (34,930) 

 

 

 (31,056) 

 

 

 (29,819) 

 

 

 (22,801) 

(a)

 

 (27,747) 

 

 

 

 

 

 876,543  

 

 

 920,738  

 

 

 957,792  

 

 

 1,015,702  

 

 

 1,062,957  

 

   Total Acquired BBVAPR loans, net

 

 

 

 951,888  

 

 

 1,007,889  

 

 

 1,057,942  

 

 

 1,128,086  

 

 

 1,192,274  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eurobank

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Accounted for under ASC 310-30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Mortgage

 

 

 

 72,966  

 

 

 73,018  

 

 

 75,043  

 

 

 76,777  

 

 

 91,113  

 

      Commercial

 

 

 

 73,181  

 

 

 81,460  

 

 

 82,753  

 

 

 83,377  

 

 

 142,298  

 

      Consumer

 

 

 

 1,268  

 

 

 1,372  

 

 

 1,488  

 

 

 1,410  

 

 

 1,770  

 

 

 

 

 

 147,415  

 

 

 155,850  

 

 

 159,284  

 

 

 161,564  

(a)

 

 235,181  

 

      Less:  Allowance for loan and lease losses

 

 

 

 (22,006) 

 

 

 (21,281) 

 

 

 (22,812) 

 

 

 (22,116) 

(a)

 

 (92,293) 

 

   Total Acquired Eurobank loans, net

 

 

 

 125,409  

 

 

 134,569  

 

 

 136,472  

 

 

 139,448  

 

 

 142,888  

 

          Total acquired loans, net

 

 

 

 1,077,297  

 

 

 1,142,458  

 

 

 1,194,414  

 

 

 1,267,534  

 

 

 1,335,162  

 

Total loans held for investment

 

 

 

 4,073,871  

 

 

 4,135,193  

 

 

 4,149,466  

 

 

 4,355,408  

 

 

 4,342,964  

 

Mortgage loans held for sale

 

 

 

 15,837  

 

 

 12,499  

 

 

 26,362  

 

 

 18,209  

 

 

 17,165  

 

Other loans held for sale

 

 

 

 -    

 

 

 -    

 

 

 123,137  

(b)

 

 -    

 

 

 -    

 

Total loans, net

 

 

$

 4,089,708  

 

$

 4,147,692  

 

$

 4,298,965  

 

$

 4,373,617  

 

$

 4,360,129  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan Portfolio Summary:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Loans held for investment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Mortgage

 

 

$

 1,340,941  

 

$

 1,363,765  

 

$

 1,390,179  

 

$

 1,409,723  

 

$

 1,443,833  

 

      Commercial

 

 

 

 1,610,994  

 

 

 1,657,452  

 

 

 1,657,284  

 

 

 1,887,654  

 

 

 1,920,030  

 

      Consumer

 

 

 

 335,882  

 

 

 329,050  

 

 

 320,137  

 

 

 309,204  

 

 

 299,788  

 

      Auto and leasing

 

 

 

 900,624  

 

 

 895,097  

 

 

 895,457  

 

 

 906,424  

 

 

 913,234  

 

 

 

 

 

 4,188,441  

 

 

 4,245,364  

 

 

 4,263,057  

 

 

 4,513,005  

 

 

 4,576,885  

 

      Less:  Allowance for loan and lease losses

 

 

 

 (121,034) 

 

 

 (115,937) 

 

 

 (119,012) 

 

 

 (162,216) 

 

 

 (238,271) 

 

 

 

 

 

 4,067,407  

 

 

 4,129,427  

 

 

 4,144,045  

 

 

 4,350,789  

 

 

 4,338,614  

 

      Deferred loan costs, net

 

 

 

 6,464  

 

 

 5,766  

 

 

 5,421  

 

 

 4,619  

 

 

 4,350  

 

          Total loans held for investment, net

 

 

 

 4,073,871  

 

 

 4,135,193  

 

 

 4,149,466  

 

 

 4,355,408  

 

 

 4,342,964  

 

  Mortgage loans held for sale

 

 

 

 15,837  

 

 

 12,499  

 

 

 26,362  

 

 

 18,209  

 

 

 17,165  

 

  Other loans held for sale

 

 

 

 -    

 

 

 -    

 

 

 123,137  

 

 

 -    

 

 

 -    

 

Total loans, net

 

 

$

 4,089,708  

 

$

 4,147,692  

 

$

 4,298,965  

 

$

 4,373,617  

 

$

 4,360,129  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

2016

 

2016

 

2016

 

2016

 

(Dollars in thousands) (unaudited)

 

 

Q1

 

Q4

 

Q3

 

Q2

 

Q1

 

Quarterly loan production

(13)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Mortgage

 

 

$

 43,474  

 

$

 51,208  

 

$

 51,022  

 

$

 57,636  

 

$

 48,321  

 

    Commercial

 

 

 

 37,691  

 

 

 86,832  

 

 

 62,628  

 

 

 66,316  

 

 

 79,272  

 

    Consumer

 

 

 

 42,149  

 

 

 42,295  

 

 

 43,636  

 

 

 39,550  

 

 

 34,275  

 

    Auto and Leasing

 

 

 

 86,784  

 

 

 77,602  

 

 

 69,523  

 

 

 74,383  

 

 

 63,285  

 

        Total

 

 

$

 210,098  

 

$

 257,937  

 

$

 226,809  

 

$

 237,885  

 

$

 225,153  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 was performed prospectively due to the immaterial impact for retrospective adoption. The transition to this revised policy resulted in an $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 the provision for loan and lease losses.

(b) 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 on 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5

 

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

2017 Q1

 

2016 Q4

 

2016 Q3

 

2016 Q2

 

2016 Q1

 

 

 

 

 

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

 

 

$

431,109

 

$

845

 

0.79

%

 

$

445,246

 

$

581

 

0.52

%

 

$

477,968

 

$

661

 

0.55

%

 

$

512,916

 

$

612

 

0.48

%

 

$

502,718

 

$

646

 

0.52

%

    Investment securities

 

 

 

1,360,186

 

 

7,683

 

2.29

%

 

 

1,330,951

 

 

7,699

 

2.30

%

 

 

1,293,251

 

 

7,319

 

2.25

%

 

 

1,311,468

 

 

7,621

 

2.33

%

 

 

1,450,127

 

 

9,508

 

2.63

%

    Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

          Non-acquired loans

 

 

 

3,015,456

 

 

51,955

 

6.99

%

 

 

3,009,579

 

 

51,581

 

6.82

%

 

 

3,160,091

 

 

50,569

 

6.35

%

 

 

3,129,570

 

 

49,108

 

6.29

%

 

 

3,100,157

 

 

47,915

 

6.20

%

          Acquired BBVAPR loans

 

 

 

997,649

 

 

19,085

 

7.76

%

 

 

1,050,468

 

 

20,232

 

7.66

%

 

 

1,100,336

 

 

22,723

 

8.19

%

 

 

1,172,087

 

 

23,670

 

8.10

%

 

 

1,240,252

 

 

25,676

 

8.30

%

          Acquired Eurobank loans

 

 

 

128,522

 

 

6,610

 

20.86

%

 

 

135,919

 

 

6,701

 

19.61

%

 

 

137,605

 

 

9,313

 

26.85

%

 

 

144,001

 

 

6,897

 

19.21

%

 

 

144,001

 

 

7,561

 

21.06

%

            Total loans

 

 

 

4,141,628

 

 

77,650

 

7.60

%

 

 

4,195,966

 

 

78,514

 

7.44

%

 

 

4,398,032

 

 

82,605

 

7.45

%

 

 

4,445,658

 

 

79,675

 

7.19

%

 

 

4,484,410

 

 

81,152

 

7.26

%

Total interest-earning assets

 

 

$

5,932,923

 

$

86,178

 

5.89

%

 

$

5,972,163

 

$

86,794

 

5.78

%

 

$

6,169,251

 

$

90,585

 

5.83

%

 

$

6,270,042

 

$

87,908

 

5.62

%

 

$

6,437,255

 

$

91,306

 

5.69

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        NOW accounts

 

 

$

1,092,389

 

$

1,041

 

0.39

%

 

$

1,119,597

 

$

1,172

 

0.42

%

 

$

1,243,640

 

$

1,314

 

0.42

%

 

$

1,231,576

 

$

1,518

 

0.49

%

 

$

1,152,055

 

$

1,081

 

0.38

%

        Savings accounts

 

 

 

1,164,040

 

 

1,481

 

0.52

%

 

 

1,126,600

 

 

1,384

 

0.49

%

 

 

1,113,649

 

 

1,351

 

0.48

%

 

 

1,103,808

 

 

1,308

 

0.48

%

 

 

1,115,552

 

 

1,398

 

0.50

%

        Time deposits

 

 

 

1,019,528

 

 

2,715

 

1.08

%

 

 

1,045,732

 

 

2,794

 

1.06

%

 

 

1,013,905

 

 

2,735

 

1.07

%

 

 

981,759

 

 

2,558

 

1.05

%

 

 

954,857

 

 

2,495

 

1.05

%

        Brokered deposits

 

 

 

574,549

 

 

1,885

 

1.33

%

 

 

583,607

 

 

1,895

 

1.29

%

 

 

549,371

 

 

1,751

 

1.26

%

 

 

612,137

 

 

1,816

 

1.19

%

 

 

734,326

 

 

1,988

 

1.09

%

 

 

 

 

3,850,506

 

 

7,122

 

0.75

%

 

 

3,875,536

 

 

7,245

 

0.74

%

 

 

3,920,565

 

 

7,151

 

0.72

%

 

 

3,929,280

 

 

7,200

 

0.73

%

 

 

3,956,790

 

 

6,962

 

0.71

%

        Non-interest bearing deposit accounts

 

 

 

832,665

 

 

-

 

-

 

 

 

832,332

 

 

-

 

-

 

 

 

801,833

 

 

-

 

-

 

 

 

774,496

 

 

-

 

-

 

 

 

774,950

 

 

-

 

-

%

        Fair value premium amortization and core deposit intangible amortization

 

 

 

-

 

 

231

 

-

 

 

 

-

 

 

186

 

-

 

 

 

-

 

 

180

 

-

 

 

 

-

 

 

167

 

-

 

 

 

-

 

 

162

 

-

 

            Total deposits

 

 

 

4,683,171

 

 

7,353

 

0.64

%

 

 

4,707,868

 

 

7,431

 

0.63

%

 

 

4,722,398

 

 

7,331

 

0.62

%

 

 

4,703,776

 

 

7,367

 

0.63

%

 

 

4,731,740

 

 

7,124

 

0.60

%

    Borrowings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        Securities sold under agreements to repurchase

 

 

 

574,771

 

 

3,244

 

2.29

%

 

 

608,802

 

 

4,177

 

2.73

%

 

 

620,353

 

 

4,272

 

2.73

%

 

 

627,693

 

 

4,258

 

2.72

%

 

 

799,613

 

 

6,099

 

3.06

%

        Advances from FHLB and other borrowings

 

 

 

105,097

 

 

596

 

2.30

%

 

 

105,561

 

 

611

 

2.30

%

 

 

195,278

 

 

1,237

 

2.51

%

 

 

317,191

 

 

2,098

 

2.65

2

 

 

337,364

 

 

2,240

 

2.66

%

        Subordinated capital notes

 

 

 

36,083

 

 

367

 

4.12

%

 

 

36,083

 

 

362

 

3.99

%

 

 

101,581

 

 

818

 

3.19

%

 

 

102,869

 

 

873

 

3.40

%

 

 

102,695

 

 

868

 

3.39

%

            Total borrowings

 

 

 

715,951

 

 

4,207

 

2.38

%

 

 

750,446

 

 

5,150

 

2.73

%

 

 

917,212

 

 

6,327

 

2.74

%

 

 

1,047,753

 

 

7,229

 

2.77

%

 

 

1,239,672

 

 

9,207

 

2.98

%

Total interest-bearing liabilities

 

 

$

5,399,122

 

$

11,560

 

0.87

%

 

$

5,458,314

 

$

12,581

 

0.92

%

 

$

5,639,610

 

$

13,658

 

0.96

%

 

$

5,751,529

 

$

14,596

 

1.02

%

 

$

5,971,412

 

$

16,331

 

1.10

%

Interest rate spread

 

 

 

 

 

$

74,618

 

5.02

%

 

 

 

 

$

74,213

 

4.86

%

 

 

 

 

$

76,927

 

4.87

%

 

 

 

 

$

73,312

 

4.60

%

 

 

 

 

$

74,975

 

4.59

%

Net interest margin

 

 

 

 

 

 

 

 

5.10

%

 

 

 

 

 

 

 

4.94

%

 

 

 

 

 

 

 

4.95

%

 

 

 

 

 

 

 

4.69

%

 

 

 

 

 

 

 

4.67

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASC 310-30 loan cost recoveries:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

          Acquired BBVAPR loans

 

 

 

 

 

$

439

 

 

 

 

 

 

 

$

130

 

 

 

 

 

 

 

$

809

 

 

 

 

 

 

 

$

293

 

 

 

 

 

 

 

$

683

 

 

 

          Acquired Eurobank loans

 

 

 

 

 

 

996

 

 

 

 

 

 

 

 

729

 

 

 

 

 

 

 

 

3,012

 

 

 

 

 

 

 

 

539

 

 

 

 

 

 

 

 

1,326

 

 

 

 

 

 

 

 

 

$

1,435

 

 

 

 

 

 

 

$

859

 

 

 

 

 

 

 

$

3,821

 

 

 

 

 

 

 

$

832

 

 

 

 

 

 

 

$

2,009

 

 

 

Adjusted excluding cost recoveries (Non-GAAP):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest-earning assets

 

 

$

5,932,923

 

$

84,743

 

5.79

%

 

$

5,972,163

 

$

85,935

 

5.72

%

 

$

6,169,251

 

$

86,764

 

5.58

%

 

$

6,270,042

 

$

87,076

 

5.57

%

 

$

6,437,255

 

$

89,297

 

5.56

%

Interest rate spread

 

 

 

 

 

$

73,183

 

4.92

%

 

 

 

 

$

73,354

 

4.80

%

 

 

 

 

$

73,106

 

4.62

%

 

 

 

 

$

72,480

 

4.55

%

 

 

 

 

$

72,966

 

4.46

%

Net interest margin

 

 

 

 

 

 

 

 

5.00

%

 

 

 

 

 

 

 

4.89

%

 

 

 

 

 

 

 

4.70

%

 

 

 

 

 

 

 

4.64

%

 

 

 

 

 

 

 

4.55

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

2017

 

2016

 

2016

 

2016

 

2016

(Dollars in thousands) (unaudited)

 

 

Q1

 

Q4

 

Q3

 

Q2

 

Q1

Net Charge-offs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

 

 

$

2,379

 

$

2,075

 

$

1,656

 

$

1,374

 

$

1,662

  Recoveries

 

 

 

(56)

 

 

(125)

 

 

(21)

 

 

(36)

 

 

(145)

      Total mortgage

 

 

 

2,323

 

 

1,950

 

 

1,635

 

 

1,338

 

 

1,517

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

 

 

 

856

 

 

3,901

 

 

56,700

(a)

 

833

 

 

1,011

  Recoveries

 

 

 

(89)

 

 

(53)

 

 

(93)

 

 

(228)

 

 

(88)

      Total commercial

 

 

 

767

 

 

3,848

 

 

56,607

(a)

 

605

 

 

923

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

 

 

 

3,358

 

 

3,243

 

 

3,173

 

 

2,811

 

 

2,327

  Recoveries

 

 

 

(165)

 

 

(97)

 

 

(120)

 

 

(133)

 

 

(102)

      Total consumer

 

 

 

3,193

 

 

3,146

 

 

3,053

 

 

2,678

 

 

2,225

Auto and Leasing:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

 

 

 

7,563

 

 

7,464

 

 

7,804

 

 

8,100

 

 

8,362

  Recoveries

 

 

 

(3,294)

 

 

(2,902)

 

 

(3,747)

 

 

(3,243)

 

 

(2,979)

      Total auto and leasing

 

 

 

4,269

 

 

4,562

 

 

4,057

 

 

4,857

 

 

5,383

          Total

 

 

$

10,552

 

$

13,506

 

$

65,352

(a)

$

9,478

 

$

10,048

Net Charge-off Rates

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

 

1.31%

 

 

1.07%

 

 

0.88%

 

 

0.72%

 

 

0.80%

Commercial

 

 

 

0.25%

 

 

1.22%

 

 

15.88%

(a)

 

0.17%

 

 

0.26%

Consumer

 

 

 

4.57%

 

 

4.62%

 

 

4.71%

 

 

4.35%

 

 

3.80%

Auto and Leasing

 

 

 

2.19%

 

 

2.44%

 

 

2.23%

 

 

2.75%

 

 

3.15%

          Total

 

 

 

1.40%

 

 

1.80%

 

 

8.27%

(a)

 

1.21%

 

 

1.30%

Average Loans Held For Investment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

$

711,553

 

$

730,707

 

$

746,613

 

$

743,516

 

$

756,291

Commercial

 

 

 

1,245,530

 

 

1,258,896

 

 

1,426,216

 

 

1,433,944

 

 

1,425,332

Consumer

 

 

 

279,558

 

 

272,353

 

 

259,535

 

 

246,003

 

 

234,499

Auto and Leasing

 

 

 

778,815

 

 

747,623

 

 

727,727

 

 

706,107

 

 

684,035

        Total

 

 

$

3,015,456

 

$

3,009,579

 

$

3,160,091

 

$

3,129,570

 

$

3,100,157

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) 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 on 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

2017

 

2016

 

2016

 

2016

 

2016

 

(Dollars in thousands) (unaudited)

 

 

Q1

 

Q4

 

Q3

 

Q2

 

Q1

 

Early Delinquency (30 - 89 days past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

$

30,827

 

$

32,516

 

$

37,015

 

$

33,099

 

$

31,627

 

Commercial

 

 

 

5,708

 

 

1,602

 

 

4,177

 

 

4,923

 

 

2,353

 

Consumer

 

 

 

6,024

 

 

5,106

 

 

4,796

 

 

3,765

(a)

 

4,341

 

Auto and Leasing

 

 

 

61,912

 

 

61,728

 

 

65,302

 

 

63,871

(a)

 

71,004

 

        Total

 

 

$

104,471

 

$

100,952

 

$

111,290

 

$

105,658

 

$

109,325

 

Early Delinquency Rates (30 - 89 days past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

 

4.34%

 

 

4.51%

 

 

5.03%

 

 

4.46%

 

 

4.21%

 

Commercial

 

 

 

0.46%

 

 

0.13%

 

 

0.33%

 

 

0.33%

 

 

0.17%

 

Consumer

 

 

 

2.01%

 

 

1.76%

 

 

1.72%

 

 

1.42%

(a)

 

1.72%

 

Auto and Leasing

 

 

 

7.87%

 

 

8.16%

 

 

8.94%

 

 

8.97%

(a)

 

10.33%

 

        Total

 

 

 

3.42%

 

 

3.31%

 

 

3.70%

 

 

3.31%

 

 

3.51%

 

Total Delinquency (30 days and over past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Traditional, Non traditional, and Loans under Loss Mitigation

 

 

$

90,849

 

$

98,506

 

$

103,770

 

$

95,909

 

$

97,424

 

    GNMA's buy-back option program

 

 

 

9,973

 

 

9,681

 

 

9,598

 

 

8,369

 

 

7,684

 

        Total mortgage

 

 

 

100,822

 

 

108,187

 

 

113,368

 

 

104,278

 

 

105,108

 

Commercial

 

 

 

15,711

 

 

12,798

 

 

14,947

 

 

20,005

 

 

19,686

 

Consumer

 

 

 

7,383

 

 

6,752

 

 

6,302

 

 

5,190

(a)

 

5,934

 

Auto and Leasing

 

 

 

69,622

 

 

69,901

 

 

73,708

 

 

71,193

(a)

 

78,746

 

        Total

 

 

$

193,538

 

$

197,638

 

$

208,325

 

$

200,666

 

$

209,474

 

Total Delinquency Rates (30 days and over past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Traditional, Non traditional, and Loans under Loss Mitigation

 

 

 

12.80%

 

 

13.65%

 

 

14.11%

 

 

12.93%

 

 

12.96%

 

    GNMA's buy-back option program

 

 

 

1.40%

 

 

1.34%

 

 

1.31%

 

 

1.13%

 

 

1.02%

 

        Total mortgage

 

 

 

14.20%

 

 

14.99%

 

 

15.42%

 

 

14.06%

 

 

13.98%

 

Commercial

 

 

 

1.25%

 

 

1.00%

 

 

1.18%

 

 

1.35%

 

 

1.38%

 

Consumer

 

 

 

2.46%

 

 

2.32%

 

 

2.26%

 

 

1.96%

(a)

 

2.35%

 

Auto and Leasing

 

 

 

8.85%

 

 

9.24%

 

 

10.09%

 

 

10.00%

(a)

 

11.46%

 

        Total

 

 

 

6.34%

 

 

6.49%

 

 

6.92%

 

 

6.28%

 

 

6.72%

 

Nonperforming Assets

(14)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

$

66,781

 

$

74,503

 

$

75,592

 

$

72,947

 

$

76,218

 

Commercial

 

 

 

19,387

 

 

19,786

 

 

23,347

(b)

 

207,768

 

 

212,345

 

Consumer

 

 

 

1,948

 

 

1,986

 

 

2,470

 

 

2,339

 

 

2,039

 

Auto and Leasing

 

 

 

8,709

 

 

9,052

 

 

9,477

 

 

7,337

 

 

7,873

 

        Total nonperforming loans

 

 

 

96,825

 

 

105,327

 

 

110,886

 

 

290,391

 

 

298,475

 

Foreclosed real estate

 

 

 

12,946

 

 

11,867

 

 

9,819

 

 

10,463

 

 

10,502

 

Other repossessed assets

 

 

 

2,600

 

 

2,408

 

 

2,462

 

 

2,979

 

 

2,796

 

        Total nonperforming assets

 

 

$

112,371

 

$

119,602

 

$

123,167

 

$

303,833

 

$

311,773

 

Nonperforming Loan Rates

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

 

9.41%

 

 

10.33%

 

 

10.28%

 

 

9.83%

 

 

10.14%

 

Commercial

 

 

 

1.55%

 

 

1.55%

 

 

1.84%

(b)

 

14.07%

 

 

14.90%

 

Consumer

 

 

 

0.65%

 

 

0.68%

 

 

0.89%

 

 

0.88%

 

 

0.81%

 

Auto and Leasing

 

 

 

1.11%

 

 

1.20%

 

 

1.30%

 

 

1.03%

 

 

1.15%

 

        Total loans

 

 

 

3.17%

 

 

3.46%

 

 

3.68%

 

 

9.09%

 

 

9.58%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) 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.

 

(b) 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 on 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 7: Allowance for Loan and Lease Losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended March 31, 2017

 

 

 

 

 

 

 

 

 

Auto and

 

 

 

 

(Dollars in thousands) (unaudited)

 

 

Mortgage

 

Commercial

 

Consumer

 

Leasing

 

Unallocated

 

Total

Non-acquired loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

17,344

 

$

8,995

 

$

13,067

 

$

19,463

 

$

431

 

$

59,300

Provision (recapture) for loan and lease losses, net

 

 

 

3,557

 

 

1,660

 

 

3,520

 

 

3,427

 

 

(429)

 

 

11,735

Charge-offs

 

 

 

(2,379)

 

 

(856)

 

 

(3,358)

 

 

(7,563)

 

 

-

 

 

(14,156)

Recoveries

 

 

 

56

 

 

89

 

 

165

 

 

3,294

 

 

-

 

 

3,604

    Balance at end of period

 

 

$

18,578

 

$

9,888

 

$

13,394

 

$

18,621

 

$

2

 

$

60,483

Allowance coverage ratio

 

 

 

2.62%

 

 

0.79%

 

 

4.46%

 

 

2.37%

 

 

0.00%

 

 

1.98%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired BBVAPR loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans accounted for under ASC 310-20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

 

 

 

$

169

 

$

3,028

 

$

1,103

 

$

-

 

$

4,300

Provision (recapture) for loan and lease losses, net

 

 

 

 

 

 

19

 

 

384

 

 

(436)

 

 

-

 

 

(33)

Charge-offs

 

 

 

 

 

 

(6)

 

 

(885)

 

 

(278)

 

 

-

 

 

(1,169)

Recoveries

 

 

 

 

 

 

1

 

 

64

 

 

452

 

 

-

 

 

517

    Balance at end of period

 

 

 

 

 

$

183

 

$

2,591

 

$

841

 

$

-

 

$

3,615

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans accounted for under ASC 310-30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

2,682

 

$

23,452

 

$

-

 

$

4,922

 

$

-

 

$

31,056

Provision for loan and lease losses, net

 

 

 

923

 

 

223

 

 

-

 

 

3,186

 

 

-

 

 

4,332

Allowance de-recognition and other adjustments

 

 

 

(32)

 

 

(147)

 

 

-

 

 

(279)

 

 

-

 

 

(458)

    Balance at end of period

 

 

$

3,573

 

$

23,528

 

$

-

 

$

7,829

 

$

-

 

$

34,930

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired Eurobank loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

11,947

 

 

9,328

 

 

6

 

 

-

 

 

-

 

$

21,281

Provision (recapture) for loan and lease losses, net

 

 

 

2,398

 

 

(778)

 

 

-

 

 

-

 

 

-

 

 

1,620

Allowance de-recognition and other adjustments

 

 

 

(177)

 

 

(717)

 

 

(1)

 

 

-

 

 

-

 

 

(895)

    Balance at end of period

 

 

$

14,168

 

$

7,833

 

$

5

 

$

-

 

$

-

 

$

22,006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total acquired loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

14,629

 

 

32,949

 

 

3,034

 

 

6,025

 

 

-

 

 

56,637

Provision (recapture) for loan and lease losses, net

 

 

 

3,321

 

 

(536)

 

 

384

 

 

2,750

 

 

-

 

 

5,919

Charge-offs

 

 

 

-

 

 

(6)

 

 

(885)

 

 

(278)

 

 

-

 

 

(1,169)

Recoveries

 

 

 

-

 

 

1

 

 

64

 

 

452

 

 

-

 

 

517

Allowance de-recognition and other adjustments

 

 

 

(209)

 

 

(864)

 

 

(1)

 

 

(279)

 

 

-

 

 

(1,353)

    Balance at end of period

 

 

$

17,741

 

$

31,544

 

$

2,596

 

$

8,670

 

$

-

 

$

60,551

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9

 

 

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 March 31, 2017

(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

 

 

$

292,115

 

$

37,117

 

$

13,249

 

$

8,538

 

$

3,682

 

$

354,701

Accretion

 

 

 

(7,890)

 

$

(3,744)

 

$

(1,237)

 

$

(2,147)

 

$

(602)

 

$

(15,620)

Change in expected cash flows

 

 

 

1

 

 

149

 

 

49

 

 

52

 

 

36

 

 

287

Transfers (to) from non-accretable discount

 

 

 

(7,409)

 

 

1,326

 

 

(7)

 

 

140

 

 

(58)

 

 

(6,008)

    Balance at end of period

 

 

$

276,817

 

$

34,848

 

$

12,054

 

$

6,583

 

$

3,058

 

$

333,360

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Accretable Discount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

305,615

 

$

9,665

 

$

7,300

 

$

22,407

 

$

18,120

 

$

363,107

Change in actual and expected cash flows

 

 

 

(3,031)

 

 

(795)

 

 

(48)

 

 

297

 

 

(19)

 

 

(3,596)

Transfers from (to) accretable yield

 

 

 

7,409

 

 

(1,326)

 

 

7

 

 

(140)

 

 

58

 

 

6,008

    Balance at end of period

 

 

$

309,993

 

$

7,544

 

$

7,259

 

$

22,564

 

$

18,159

 

$

365,519

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

$

45,839

 

$

16,475

 

$

2,194

 

$

-

 

$

-

 

$

64,508

Accretion

 

 

 

(1,904)

 

 

(4,510)

 

 

(38)

 

 

-

 

 

(158)

 

 

(6,610)

Change in expected cash flows

 

 

 

81

 

 

778

 

 

37

 

 

(143)

 

 

310

 

 

1,063

Transfers from (to) non-accretable discount

 

 

 

681

 

 

-

 

 

(322)

 

 

143

 

 

(152)

 

 

350

    Balance at end of period

 

 

$

44,697

 

$

12,743

 

$

1,871

 

$

-

 

$

-

 

$

59,311

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Accretable Discount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

8,441

 

$

3,880

 

$

11

 

$

-

 

$

8

 

$

12,340

Change in actual and expected cash flows

 

 

 

(334)

 

 

(1,409)

 

 

-

 

 

143

 

 

(154)

 

 

(1,754)

Transfers (to) from accretable yield

 

 

 

(681)

 

 

-

 

 

322

 

 

(143)

 

 

152

 

 

(350)

    Balance at end of period

 

 

$

7,426

 

$

2,471

 

$

333

 

$

-

 

$

6

 

$

10,236

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10

 

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

2016

 

2016

 

2016

 

2016

(Dollars in thousands) (unaudited)

 

 

Q1

 

Q4

 

Q3

 

Q2

 

Q1

Stockholders' Equity to Non-GAAP Tangible Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

 

$

931,429

 

$

920,411

 

$

924,934

 

$

915,890

 

$

903,801

Less:  Intangible assets

 

 

 

(91,861)

 

 

(92,229)

 

 

(92,648)

 

 

(93,068)

 

 

(93,487)

           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

 

 

$

673,698

 

$

662,312

 

$

666,416

 

$

656,952

 

$

644,444

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock outstanding at end of period

 

 

 

43,947

 

 

43,915

 

 

43,914

 

 

43,914

 

 

43,914

Tangible book value (Non-GAAP)

 

 

$

15.33

 

$

15.08

 

$

15.18

 

$

14.96

 

$

14.68

Total Assets to Tangible Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets  

 

 

$

6,414,607

 

$

6,501,824

 

$

6,592,113

 

$

6,712,596

 

$

6,874,572

Less:  Intangible assets

 

 

 

(91,861)

 

 

(92,229)

 

 

(92,648)

 

 

(93,068)

 

 

(93,487)

Tangible assets (Non-GAAP)

 

 

$

6,322,746

 

$

6,409,595

 

$

6,499,465

 

$

6,619,528

 

$

6,781,085

Non-GAAP TCE Ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity

 

 

$

673,698

 

$

662,312

 

$

666,416

 

$

656,952

 

$

644,444

Tangible assets

 

 

 

6,322,746

 

 

6,409,595

 

 

6,499,465

 

 

6,619,528

 

 

6,781,085

TCE ratio

 

 

 

10.66%

 

 

10.33%

 

 

10.25%

 

 

9.92%

 

 

9.50%

Average Equity to Non-GAAP Average Tangible Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total stockholders' equity

 

 

$

926,011

 

$

919,697

 

$

919,171

 

$

908,394

 

$

899,858

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

 

 

$

760,141

 

$

753,827

 

$

753,301

 

$

742,524

 

$

733,988

Less:  Average intangible assets

 

 

 

(92,102)

 

 

(92,502)

 

 

(92,922)

 

 

(93,341)

 

 

(93,759)

Average tangible common equity

 

 

$

668,039

 

$

661,325

 

$

660,379

 

$

649,183

 

$

640,229

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Charge-offs

 

 

$

10,552

 

$

13,506

 

$

65,352

 

$

9,478

 

$

10,048

Less:  PREPA charge-off

 

 

 

-

 

 

-

 

 

(56,229)

 

 

-

 

 

-

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

 

 

$

10,552

 

$

13,506

 

$

9,123

 

$

9,478

 

$

10,048

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Loans Held For Investment

 

 

$

3,015,456

 

$

3,009,579

 

$

3,160,091

 

$

3,129,570

 

$

3,100,157

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

1.40%

 

 

1.80%

 

 

1.15%

 

 

1.21%

 

 

1.30%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming Loans

 

 

$

96,825

 

$

105,327

 

$

110,886

 

$

290,391

 

$

298,475

Less:  PREPA

 

 

 

-

 

 

-

 

 

-

 

 

(183,020)

 

 

(186,675)

Nonperforming Loans, excluding PREPA (Non-GAAP)

 

 

$

96,825

 

$

105,327

 

$

110,886

 

$

107,371

 

$

111,800

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-acquired loans held for investment, gross

 

 

$

3,050,593

 

$

3,046,270

 

$

3,011,799

 

$

3,196,067

 

$

3,116,690

Less:  PREPA

 

 

 

-

 

 

-

 

 

-

 

 

(183,020)

 

 

(186,675)

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

 

 

$

3,050,593

 

$

3,046,270

 

$

3,011,799

 

$

3,013,047

 

$

2,930,015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loan rate, excluding PREPA (Non-GAAP)

 

 

 

3.17%

 

 

3.46%

 

 

3.68%

 

 

3.56%

 

 

3.82%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

BASEL III

 

 

 

 

Standardized

 

 

 

 

2017

 

2016

 

2016

 

2016

 

2016

 

(Dollars in thousands) (unaudited)

 

 

Q1

 

Q4

 

Q3

 

Q2

 

Q1

 

Regulatory Capital Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital

 

 

$

626,707

 

$

627,732

 

$

612,792

 

$

596,080

 

$

585,144

 

Tier 1 capital

 

 

 

822,847

 

 

819,661

 

 

801,882

 

 

788,349

 

 

776,180

 

Total risk-based capital

(15)

 

 

878,867

 

 

876,656

 

 

860,513

 

 

849,147

 

 

838,283

 

Risk-weighted assets

 

 

 

4,383,517

 

 

4,467,556

 

 

4,593,340

 

 

4,716,534

 

 

4,744,449

 

Regulatory Capital Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital ratio

(16)

 

 

14.30%

 

 

14.05%

 

 

13.34%

 

 

12.64%

 

 

12.33%

 

Tier 1 risk-based capital ratio

(17)

 

 

18.77%

 

 

18.35%

 

 

17.46%

 

 

16.71%

 

 

16.36%

 

Total risk-based capital ratio

(18)

 

 

20.05%

 

 

19.62%

 

 

18.73%

 

 

18.00%

 

 

17.67%

 

Leverage ratio

(19)

 

 

13.20%

 

 

12.99%

 

 

12.35%

 

 

11.92%

 

 

11.38%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

 

$

931,429

 

$

920,411

 

$

924,934

 

$

915,890

 

$

903,801

 

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

 

 

 

(3,849)

 

 

(2,209)

 

 

(17,554)

 

 

(18,085)

 

 

(15,089)

 

          Unrealized losses on cash flow hedges, net of income tax

 

 

 

501

 

 

612

 

 

1,710

 

 

2,281

 

 

2,805

 

 

 

 

 

762,211

 

 

752,944

 

 

743,220

 

 

734,216

 

 

725,647

 

Less:    Disallowed goodwill

 

 

 

(86,069)

 

 

(86,069)

 

 

(86,069)

 

 

(86,069)

 

 

(86,069)

 

            Disallowed other intangible assets, net

(20)

 

 

(2,826)

 

 

(2,255)

 

 

(2,408)

 

 

(2,561)

 

 

(2,715)

 

            Disallowed deferred tax assets, net

(20)

 

 

(46,609)

 

 

(36,888)

 

 

(41,951)

 

 

(49,506)

 

 

(51,719)

 

Common equity Tier 1 capital

 

 

 

626,707

 

 

627,732

 

 

612,792

 

 

596,080

 

 

585,144

 

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

 

 

 

(4,730)

 

 

(8,941)

 

 

(11,780)

 

 

(8,601)

 

 

(9,834)

 

Tier 1 capital

 

 

 

822,847

 

 

819,661

 

 

801,882

 

 

788,349

 

 

776,180

 

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

 

 

 

56,020

 

 

56,995

 

 

58,631

 

 

60,798

 

 

62,103

 

Total risk-based capital

 

 

$

878,867

 

$

876,656

 

$

860,513

 

$

849,147

 

$

838,283

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12

 

 

 

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 considers 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)

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

(4)

Calculated based on net income 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.

(5)

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.

(6)

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.

(7)

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

(8)

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

(9)

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

(10)

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.

(11)

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

(12)

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.

(13)

Production of new loans (excluding renewals).

(14)

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.

(15)

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

(16)

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

(17)

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

(18)

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

(19)

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

(20)

Amounts based on transition provisions for regulatory capital deductions and adjustments of 80% for 2017 and 60% for 2016.

(21)

On February 6, 2017, the Bank and the FDIC agreed to terminate the single family and commercial shared-loss agreements related to the FDIC assisted acquisition of Eurobank on April 30, 2010, resulting in a benefit of $1.4 million.

 

 

 

 

 

 

 

 

 

 

 

 

 

13

 

 

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