OFG BANCORP - FORM 8-K - EX-99 - EXHIBIT 99 - January 22, 2019

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8-K - FORM 8-K - OFG BANCORPofg8K20181231.htm

 

 

Exhibit 99

 

OFG Bancorp Reports 4Q18 & 2018 Results

SAN JUAN, Puerto Rico, January 22, 2019 – OFG Bancorp (NYSE: OFG) reported results for the fourth quarter and year ended December 31, 2018.

4Q18 Summary

·        Net income available to shareholders of $23.1 million or $0.45 per fully diluted share compared to 3Q18’s $19.6 million or $0.42 per share and 4Q17’s $13.6 million or $0.30 per share.

·        Originated loan growth of 3.0% from the preceding quarter to $3.66 billion, with new loan production of $323.0 million, continuing to exceed $300 million for the fourth consecutive quarter.

·        Strong performance metrics, with net interest margin of 5.26%, return on average assets of 1.50%, return on average tangible common stockholders’ equity of 11.67%, and efficiency ratio of 51.06%.

·        Record total stockholders’ equity of approximately $1 billion, with book value per common share of $17.90, tangible book value per common share of $16.15, and capital metrics at multi-year highs.

·        Common equity increased $84.0 million and preferred dividend payments dropped 53.0% from the preceding quarter with the conversion into common stock of the Series C 8.750% Non-Cumulative Convertible Perpetual Preferred Stock.

·        16.7% increase in the regular quarterly cash dividend per common share to $0.07, resulting in an annualized rate of $0.28 per share.

2018 Summary

Net income available to shareholders of $72.4 million or $1.52 per fully diluted share compared to 2017’s $38.8 million or $0.88 per share. 2017 included a $32.4 million pre-tax loan loss provision related to the hurricanes.

CEO Comment

“OFG achieved strong core growth in 4Q18 and 2018 based on the continued success of our strategy of differentiation – providing superior customer service, convenience and technology – coupled with Puerto Rico’s emerging economic rebound,” said José Rafael Fernández, President, Chief Executive Officer, and Vice Chairman of the Board.

“Our plan is working. For the year as a whole, we generated impressive results across the board, with originated loans up 17.3%, average deposits up 6.4%, customer count up 4.6%, and stockholders’

 

 

equity up 5.8%, as well as achieving improved credit quality, converting our Series C preferred, and increasing our quarterly dividend.

“Thanks go to our entire OFG team for their commitment and dedication and to all our retail and commercial customers for their support and loyalty. We plan to continue to focus on our growth strategies in 2019, capitalizing on our momentum, continuing to make our services better – fácil, rápido, hecho (easy, fast, done) – and developing fresh ways to employ digital technology to the benefit of customers.”

Conference Call

A conference call to discuss OFG’s 4Q18 results, outlook and related matters will be held today at 10:00 AM Eastern Time. The call can be accessed live by dialing (888) 562-3356 or (973) 582-2700. Use conference ID 378-7416. The call can also be accessed live on OFG’s website at www.ofgbancorp.com. Access the webcast link in advance to download any necessary software. A webcast replay will be available shortly thereafter.

Income Statement

Unless otherwise noted, the following compares data for the fourth quarter 2018 to the third quarter 2018.

•      Interest Income: Increased 1.0% or $1.0 million to $95.1 million. Originated Loans increased $2.4 million due to higher average balances and a 7 basis point yield increase. Acquired Loans declined $2.1 million due to pay downs and $1.2 million in lower cost recoveries. Investment Securities increased $0.7 million due to higher average balances and yields on cash and cash equivalents.

•      Interest Expense: Increased 10.2% or $1.2 million to $13.1 million, reflecting higher average deposit and borrowing balances and rates. The rate on customer deposits increased only 4 basis points.

•      Total Provision for Loan and Lease Losses: Decreased 22.6% or $3.3 million to $11.3 million. Provision for originated loans declined $2.6 million. This reflected $1.8 million cash recovery on the sale of previously charged-off loans and reduced need for provisioning on the existing portfolio. Provision for acquired loans declined $0.7 million due to improved performance in the former BBVA PR portfolio.

•      Net Interest Margin: Excluding cost recoveries, core NIM was 5.21% compared to 5.25%. OFG’s continued high NIM reflected higher yield on originated commercial loans and cash balances due to the effect of the September Federal Reserve Board rate hike. It also reflected higher proportion of higher yielding commercial and auto loans in the originated portfolio.

•      Total Banking and Wealth Management Revenues: Increased 4.4% or $0.8 million to $19.3 million. Banking service revenues increased $0.4 million due to higher transaction volume from continued strength of the local economy and year-end holiday shopping. Wealth Management increased $0.8 million due to $1.3 million from the receipt of seasonal insurance commissions, partially offset by lower broker-dealer commissions. Mortgage banking declined $0.4 million due to lower MSR valuation.

•      Other Non-Interest Income: Totaled $5.0 million due to a cash payment from OFG’s insurance company covering Hurricane Maria’s impact on operations.

 

 

•      Total Non-Interest Expenses: Increased 1.5% or $0.8 million to $51.7 million. This reflected a variety of items, such as one additional payroll date and year-end accrual for performance related compensation, lower appraisal of foreclosed real estate, lower rent and occupancy costs, and the absence of municipal tax payments made in 3Q18.

•      Effective Tax Rate: 4Q18 included a non-cash expense of $4.1 million reflecting the net impact of changes required as a consequence of the new Puerto Rico tax reform legislation. The tax reform reduces the corporate tax rate by 1.5% in 2019 which necessitated a Deferred Tax Asset write-down. Due to other provisions in the tax reform OFG does not expect significant changes on its 2019 ETR. The 2018 ETR was 33.6%.

Balance Sheet

Unless otherwise noted, the following compares data at December 31, 2018 to September 30, 2018.

•      Total Loans Net: Increased 1.8% or $78.6 million to $4.43 billion. Originated loans increased 3.0% or $107.7 million. Acquired loans declined $30.5 million. New loan production totaled $323.0 million, with auto lending at $123.8 million, commercial lending at $92.1 million, consumer lending at $42.1 million, residential mortgage lending at $33.4 million, and OFG USA loan participations at $31.7 million.

•      Total Investments: Declined 2.0% or $26.5 million to $1.28 billion due to repayments of mortgage backed securities.

•      Cash and Cash Equivalents: Average balances increased 33.7% or $109.6 million to $434.7 million, while quarter-end cash declined 17.7% or $96.7 million to $450.1 million.

•      Customer Deposits (excluding brokered): Average balances increased 1.0% or $45.8 million to $4.46 billion, while quarter-end deposits decreased 3.8% or $175.1 million to $4.38 billion, mainly related to fluctuations in insurance companies’ deposits.

•      Total Borrowings: Average balances increased 8.1% or $40.7 million to $543.9 million, while quarter-end borrowings increased 16.9% or $82.4 million to $570.4 million.

•      Total Stockholders’ Equity: Increased $30.0 million or 3.1% to $999.9 million, reflecting increased retained earnings and legal surplus and reduced accumulated other comprehensive loss.

 

 

 

 

Credit Quality

Unless otherwise noted, the following compares data on the originated loan portfolio at December 31, 2018 to September 30, 2018.

•      Credit quality: Remained strong with minor variations in key metrics. Non-performing loan rate, at 3.28%, was down 17 basis points. Allowance for loan losses remained level at $95.2 million. As a percentage of loans, the allowance, at 2.54%, was down 8 basis points. Early and total delinquency rates, at 3.34% and 6.36%, respectively, were up 2 and 17 basis points.

•      Net Charge-Offs: The rate fell 20 basis points to 1.19% and actual net charge-offs dropped 12.2% or $1.5 million. Both metrics reflected the $1.8 million recovery on the sale of previously charged-off loans.

Capital Position

Unless otherwise noted, the following compares data at December 31, 2018 to September 30, 2018.

•      Capital continued to be significantly above regulatory requirements for a well-capitalized institution: This reflected earnings growth as well as the conversion of Series C into common stock.

•      Capital Ratios: Metrics improved across the board, with Leverage at 14.22%, Common Equity Tier 1 at 16.78%, Tier 1 Risk-based at 19.20%, and Total Risk-based Capital at 20.48%, and Tangible Common Equity at 12.76%.

Financial Supplement

OFG’s Financial Supplement, with full financial tables for the quarter and year ended December 31, 2018, 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) changes to the financial condition of the government of Puerto Rico; (iv) amendments to the fiscal plan approved by the Financial Oversight and Management Board of Puerto Rico; (v) determinations in the court-supervised debt-restructuring process under Title III of PROMESA for the Puerto Rico government and all of its agencies, including some of its public corporations; (vi) the impact of property, credit and other losses

 

 

in Puerto Rico as a result of hurricanes Irma and Maria; (vii) the amount of government, private and philanthropic financial assistance for the reconstruction of Puerto Rico’s critical infrastructure, which suffered catastrophic damages caused by hurricane Maria; (viii) the pace and magnitude of Puerto Rico’s economic recovery; (ix) the potential impact of damages from future hurricanes and natural disasters in Puerto Rico; (x) the fiscal and monetary policies of the federal government and its agencies; (xi) changes in federal bank regulatory and supervisory policies, including required levels of capital; (xii) the relative strength or weakness of the commercial and consumer credit sectors and the real estate market in Puerto Rico; (xiii) the performance of the stock and bond markets; (xiv) competition in the financial services industry; and (xv) 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, 2017, 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 55th 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. 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 December 31, 2018 Annual Report on Form 10-K 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

 

 

 

 

2018

 

2018

 

2018

 

2018

 

2017

 

2018

 

2017

 

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

 

 

Q4

 

Q3

 

Q2

 

Q1

 

Q4

 

YTD

 

YTD

 

Earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

$

82,035

 

$

82,277

 

$

77,588

 

$

73,994

 

$

73,513

 

$

315,894

 

$

304,172

 

Non-interest income, net (core)

(2)

 

 

19,260

 

 

18,446

 

 

18,394

 

 

18,239

 

 

16,734

 

 

74,339

 

 

69,308

 

Non-interest expense

 

 

 

51,719

 

 

50,941

 

 

52,300

 

 

52,121

 

 

46,662

 

 

207,081

 

 

201,631

 

Pre-provision net revenues

(21)

 

 

54,574

 

 

49,956

 

 

43,991

 

 

40,387

 

 

43,666

 

 

188,908

 

 

181,228

 

Provision for loan and lease losses

 

 

 

11,300

(c)

 

14,601

 

 

14,747

 

 

15,460

 

 

24,907

(d)

 

56,108

 

 

113,139

(d)(e)

Net income before income taxes

 

 

 

43,274

 

 

35,355

 

 

29,244

 

 

24,927

 

 

18,759

 

 

132,800

 

 

68,089

 

Income tax expense

 

 

 

18,530

 

 

12,255

 

 

9,595

 

 

8,010

 

 

1,686

 

 

48,390

 

 

15,443

 

Net income

 

 

$

24,744

 

$

23,100

 

$

19,649

 

$

16,917

 

$

17,073

 (d)  

$

84,410

 

$

52,646

 

Common Share Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - basic

(3)

 

$

0.47

 

$

0.45

 

$

0.37

 

$

0.31

 

$

0.31

 (d)  

$

1.59

 

$

0.88

 

Earnings per common share - diluted

(4)

 

$

0.45

 

$

0.42

 

$

0.35

 

$

0.30

 

$

0.30

(d)

$

1.52

 

$

0.88

 

Average common shares outstanding

 

 

 

49,628

 (a)  

 

43,996

 

 

43,975

 

 

43,955

 

 

43,947

 

 

45,400

 (a)  

 

43,939

 

Average common shares outstanding and equivalents

 

 

 

51,602

 

 

51,464

 

 

51,226

 

 

51,121

 

 

51,104

 

 

51,349

 

 

51,096

 

Cash dividends per common share

 

 

$

0.07

 (b)  

$

0.06

 

$

0.06

 

$

0.06

 

$

0.06

 

$

0.25

 (b)  

$

0.24

 

Book value per common share (period end)

 

 

$

17.90

(a)

$

18.27

 

$

18.01

 

$

17.76

 

$

17.73

 

$

17.90

(a)

$

17.73

 

Tangible book value per common share (period end)

(5)

 

$

16.15

 (a)  

$

16.23

 

$

15.96

 

$

15.71

 

$

15.67

 

$

16.15

 (a)  

$

15.67

 

Balance Sheet (Average Balances)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

(6)

 

$

4,473,114

 

$

4,414,583

 

$

4,310,206

 

$

4,183,775

 

$

4,081,427

 

$

4,348,135

 

$

4,125,804

 

Interest-earning assets

 

 

 

6,183,567

 

 

6,066,821

 

 

5,933,775

 

 

5,751,783

 

 

5,735,593

 

 

5,985,524

 

 

5,818,598

 

Total assets

 

 

 

6,619,026

 

 

6,514,532

 

 

6,374,240

 

 

6,189,752

 

 

6,191,737

 

 

6,425,811

 

 

6,256,827

 

Total deposits

 

 

 

4,987,275

 

 

4,934,175

 

 

4,848,456

 

 

4,775,396

 

 

4,772,685

 

 

4,889,584

 

 

4,686,287

 

Interest-bearing deposits

 

 

 

3,866,676

 

 

3,854,342

 

 

3,766,311

 

 

3,756,607

 

 

3,835,357

 

 

3,811,406

 

 

3,826,000

 

Borrowings

 

 

 

543,920

 

 

503,268

 

 

462,614

 

 

351,793

 

 

374,059

 

 

466,051

 

 

540,367

 

Stockholders' equity

 

 

 

983,015

 

 

973,838

 

 

959,777

 

 

952,151

 

 

943,823

 

 

967,437

 

 

944,492

 

Common stockholders' equity

 

 

 

881,971

 

 

807,968

 

 

793,907

 

 

786,281

 

 

777,953

 

 

817,907

 

 

778,622

 

Performance Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

(7)

 

 

5.26%

 

 

5.38%

 

 

5.24%

 

 

5.22%

 

 

5.08%

 

 

5.28%

 

 

5.23%

 

Return on average assets

(8)

 

 

1.50%

 

 

1.42%

 

 

1.23%

 

 

1.09%

 

 

1.10%

 (d)  

 

1.31%

 

 

0.84%

 

Return on average tangible common stockholders' equity

(9)

 

 

11.67%

(a)

 

10.94%

 

 

9.20%

 

 

7.73%

 

 

7.92%

 

 

9.95%

(a)

 

5.64%

 

Efficiency ratio

(10)

 

 

51.06%

 

 

50.58%

 

 

54.49%

 

 

56.51%

 

 

51.70%

 

 

53.07%

 

 

53.99%

 

Full-time equivalent employees, period end

 

 

 

1,392

 

 

1,365

 

 

1,354

 

 

1,367

 

 

1,421

 

 

1,392

 

 

1,421

 

Credit Quality Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Excluding acquired loans:

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Allowance for loan and lease losses

 

 

$

95,193

 

$

95,236

 

$

94,218

 

$

96,832

 

 $  

92,718

 (d)  

$

95,193

 

$

92,718

 (d)(e)  

    Allowance as a % of loans held for investment

 

 

 

2.54%

 

 

2.62%

 

 

2.66%

 

 

2.92%

 

 

2.89%

(d)

 

2.54%

 

 

2.89%

 

    Net charge-offs

 

 

$

10,885

 (c)  

$

12,402

 

$

15,449

 

$

10,844

 

$

10,466

 

$

49,580

 

$

46,468

 (e)  

    Net charge-off rate

(11)

 

 

1.19%

 

 

1.39%

 

 

1.81%

 

 

1.34%

 

 

1.35%

 

 

1.14%

 

 

1.52%

(e)

    Early delinquency rate (30 - 89 days past due)

 

 

 

3.34%

 

 

3.32%

 

 

3.07%

 

 

3.20%

 

 

1.82%

 (f)  

 

3.34%

 

 

1.82%

 

    Total delinquency rate (30 days and over)

 

 

 

6.36%

 

 

6.19%

 

 

5.95%

 

 

6.25%

 

 

4.61%

(f)

 

6.36%

 

 

4.61%

 

Capital Ratios (Non-GAAP)

(12)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leverage ratio

 

 

 

14.22%

(a)

 

13.93%

 

 

13.92%

 

 

14.07%

 

 

13.92%

 

 

14.22%

(a)

 

13.92%

 

Common equity Tier 1 capital ratio

 

 

 

16.78%

 (a)  

 

14.38%

 

 

14.14%

 

 

14.52%

 

 

14.59%

 

 

16.78%

 (a)  

 

14.59%

 

Tier 1 risk-based capital ratio

 

 

 

19.20%

(a)

 

18.55%

 

 

18.38%

 

 

19.00%

 

 

19.05%

 

 

19.20%

(a)

 

19.05%

 

Total risk-based capital ratio

 

 

 

20.48%

 (a)  

 

19.84%

 

 

19.67%

 

 

20.29%

 

 

20.34%

 

 

20.48%

 (a)  

 

20.34%

 

Tangible common equity ("TCE") ratio

 

 

 

12.76%

(a)

 

10.88%

 

 

10.95%

 

 

11.22%

 

 

11.29%

 

 

12.76%

(a)

 

11.29%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) During the Q4 2018, the Company converted all of its outstanding 8.750% non-cumulative convertible perpetual preferred stock, series C into OFG Bancorp common stock. Each share of the 84,000 series C preferred stock was converted into 86.4225 shares of common stock.

(b) During the Q4 2018, the Company increased the regular cash dividend per common share to $0.07 from $0.06.

(c) During the Q4 2018, the Company received $1.8 million proceeds from the sale of fully charged-off originated auto and consumer loans.

(d) During the Q3 and Q4 2017, earnings were impacted by Hurricanes Irma and Maria, which struck the island on September 7, 2017 and September 20, 2017, respectively. Based on our assessment of the facts we increased our provision for the allowance of loan losses in the 3Q 2017 and 4Q 2017 by $27 million and $5.4 million, respectively, related to these hurricanes.

(e) On June 30, 2017, the Company entered into an agreement for the sale of a municipality loan for $28.8 million. At June 30, 2017, this loan, which included a principal payment of $4.8 million received in July 1, 2017, was reported as other loans held for sale, at fair value.  As a result of this transaction, the Company recognized a $4.3 million charge-off during the second quarter. Proceeds were received on July 5, 2017. An allowance of $5.9 million was created during the second quarter for the remaining portfolio of municipal loans.

(f) After Hurricane Irma and Maria on September 7, 2017 and September 20, 2017, respectively, the Company offered an automatic three-month moratorium for the payment of principal and interest for certain loans. During Q4 2017, the Company received payments on loans in moratorium, causing a decrease in delinquency.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 2: Consolidated Statements of Operations

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Year Ended

 

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

December 31,

 

December 31,

 

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

 

 

2018

 

2018

 

2018

 

2018

 

2017

 

2018

 

2017

 

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Non-acquired loans

 

 

$

69,240

 

 $  

66,843

 

$

61,183

 

$

56,781

 

 $  

56,183

 

$

254,047

 

 $  

220,591

(i)

    Acquired BBVAPR loans

 

 

 

12,442

 

 

13,688

 

 

13,880

 

 

14,490

 

 

15,310

 

 

54,500

 

 

71,271

(h)

    Acquired Eurobank loans

 

 

 

2,642

 

 

3,485

 

 

3,366

 

 

3,341

 

 

3,573

 

 

12,834

 

 

20,559

 

          Total interest income from loans

 

 

 

84,324

 

 

84,016

 

 

78,429

 

 

74,612

 

 

75,066

 

 

321,381

 

 

312,421

 

Investment securities

 

 

 

10,782

 

 

10,121

 

 

9,577

 

 

8,558

 

 

8,108

 

 

39,038

 

 

33,226

 

          Total interest income

 

 

 

95,106

 

 

94,137

 

 

88,006

 

 

83,170

 

 

83,174

 

 

360,419

 

 

345,647

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Core deposits

 

 

 

6,396

 

 

5,877

 

 

5,517

 

 

5,412

 

 

5,613

 

 

23,202

 

 

22,087

 

    Brokered deposits

 

 

 

3,003

 

 

2,728

 

 

2,134

 

 

1,886

 

 

2,079

 

 

9,751

 

 

8,211

 

           Total deposits

 

 

 

9,399

 

 

8,605

 

 

7,651

 

 

7,298

 

 

7,692

 

 

32,953

 

 

30,298

 

Borrowings

 

 

 

3,672

 

 

3,255

 

 

2,767

 

 

1,878

 

 

1,969

 

 

11,572

 

 

11,177

 

           Total interest expense

 

 

 

13,071

 

 

11,860

 

 

10,418

 

 

9,176

 

 

9,661

 

 

44,525

 

 

41,475

 

Net interest income

 

 

 

82,035

 

 

82,277

 

 

77,588

 

 

73,994

 

 

73,513

 

 

315,894

 

 

304,172

 

    Provision for loan and lease losses, excluding acquired loans

 (1)  

 

 

10,842

 

 

13,420

 

 

12,835

 

 

14,958

 

 

15,643

 (g)  

 

52,055

 

 

79,886

 (g)  

    Provision (recapture) for acquired BBVAPR loan and lease losses

(1)

 

 

(998)

(a)

 

875

 

 

1,247

 

 

363

 

 

7,112

(g)

 

1,487

 

 

26,528

(g)

    Provision for acquired Eurobank loan and lease losses

 (1)  

 

 

1,456

 

 

306

 

 

665

 

 

139

 

 

2,152

 (g)  

 

2,566

 

 

6,725

 (g)  

          Total provision for loan and lease losses, net

 

 

 

11,300

 

 

14,601

 

 

14,747

 

 

15,460

 

 

24,907

(g)

 

56,108

 

 

113,139

(g)

           Net interest income after provision for loan and lease losses

 

 

 

70,735

 

 

67,676

 

 

62,841

 

 

58,534

 

 

48,606

 

 

259,786

 

 

191,033

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Banking service revenues

 

 

 

11,234

 

 

10,797

 

 

11,144

 

 

10,463

 

 

8,461

 (e)  

 

43,638

 

 

39,468

 

Wealth management revenues

 

 

 

7,246

 

 

6,407

 

 

6,262

 

 

6,019

 

 

7,043

 

 

25,934

 

 

25,790

 

Mortgage banking activities

 

 

 

780

 

 

1,242

 

 

988

 

 

1,757

 

 

1,230

 

 

4,767

 

 

4,050

 

          Total banking and financial service revenues

 

 

 

19,260

 

 

18,446

 

 

18,394

 

 

18,239

 

 

16,734

 

 

74,339

 

 

69,308

 

FDIC shared-loss benefit, net

 

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

1,403

 (k)  

Other income, net

 

 

 

4,998

(b)

 

174

 

 

309

 

 

275

 

 

81

 

 

5,756

(b)

 

7,976

(j)

           Total non-interest income, net

 

 

 

24,258

 

 

18,620

 

 

18,703

 

 

18,514

 

 

16,815

 

 

80,095

 

 

78,687

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

 

 

19,322

 

 

18,495

 

 

18,099

 

 

20,608

 

 

20,205

 

 

76,524

 

 

79,751

 

Rent and occupancy costs

 

 

 

7,762

 

 

8,388

 

 

9,166

 

 

7,768

 

 

8,546

 

 

33,084

 

 

32,557

 

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

 

 

 

1,834

 

 

1,210

 

 

392

 

 

1,226

 

 

126

 

 

4,662

 

 

4,634

 

General and administrative expenses

 

 

 

20,963

 

 

20,112

 

 

22,746

 

 

20,100

 

 

16,350

(e)(f)

 

83,921

 

 

76,697

 

           Total operating expenses

 

 

 

49,881

 

 

48,205

 

 

50,403

 

 

49,702

 

 

45,227

 

 

198,191

 

 

193,639

 

Credit related expenses

 

 

 

1,838

 

 

2,736

 

 

1,897

 

 

2,419

 

 

1,435

 

 

8,890

 

 

7,992

 

           Total non-interest expense

 

 

 

51,719

 

 

50,941

 

 

52,300

 

 

52,121

 

 

46,662

 

 

207,081

 

 

201,631

 

Income before income taxes

 

 

 

43,274

 

 

35,355

 

 

29,244

 

 

24,927

 

 

18,759

 

 

132,800

 

 

68,089

 

Income tax expense

 

 

 

18,530

(c)

 

12,255

 

 

9,595

 

 

8,010

 

 

1,686

 

 

48,390

(c)

 

15,443

 

Net income

 

 

 

24,744

 

 

23,100

 

 

19,649

 

 

16,917

 

 

17,073

(g)

 

84,410

 

 

52,646

(g)

Less:  dividends on preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Convertible preferred stock

 

 

 

-

(d)

 

(1,838)

 

 

(1,837)

 

 

(1,838)

 

 

(1,838)

 

 

(5,513)

(d)

 

(7,352)

 

    Other preferred stock

 

 

 

(1,628)

 

 

(1,628)

 

 

(1,628)

 

 

(1,627)

 

 

(1,627)

 

 

(6,511)

 

 

(6,510)

 

Net income available to common shareholders

 

 

$

23,116

 

$

19,634

 

$

16,184

 

$

13,452

 

$

13,608

(g)

$

72,386

 

$

38,784

(g)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) During the 4Q 2018, the provision for acquired BBVAPR loans reflected better cashflows than expected.

 

(b) During the 4Q 2018, the Company received a $5.0 million payment from the insurance company for Hurricane María impact on the Bank's operations.

 

(c) During the 4Q 2018, the Company recognized an aggregate amount of $4.1 million income tax expense as a result of the Changes in Puerto Rico Tax Legislation, mainly driven by a reduction of the DTA since Regular Corporate Tax Rate changes from 39% to 37.5%.

 

(d) During the Q4 2018, the Company converted of all of its outstanding 8.750% non-cumulative convertible perpetual preferred stock, series C into OFG Bancorp common stock. Each share of the 84,000 series C preferred stock was converted into 86.4225 shares of common stock.

 

(e) During the 4Q 2017, electronic banking fee income and  electronic banking expenses decreased $0.9 million and $1.0 million, respectively, from the prior quarter as a result of lower point of sale (POS) activity from our customers. The decrease is directly related to business interruption in several of our commercial clients from the lack of electricity.

 

(f) During the 4Q 2017, the Company reversed $1.4 million expenses as a result of the settlement of regulatory and legal contingencies at a lower amount estimated.

 

(g) During the Q3 and Q4 2017, earnings were impacted by Hurricanes Irma and Maria, which struck the island on September 7, 2017 and September 20, 2017, respectively. Based on our assessment of the facts we increased our provision for the allowance of loan losses in the 3Q 2017 and 4Q 2017 by $27 million and $5.4 million, respectively, related to these hurricanes.

+

(h) During Q3 2017, the Company recognized $3.1 million in cost recoveries from the Puerto Rico Housing Finance Authority ("PRHFA") loan with an outstanding principal balance of $10.9 million.

 

(i) During Q3 2017, the Company received $22.4 million from the pay-off before maturity of a loan previously classified as non-accrual. As a result, the Company recorded $4.1 million in interest income and $439 thousand in prepayment penalty income, included in banking service revenues.

 

(j) During Q2 2017, the Company sold $166.0 million of mortgage-backed securities and recorded a net gain on sale of securities of $6.8 million. Also, it sold $39.2 million Treasury Notes and recorded a net gain of $112 thousand. In addition, the Company unwound repurchase agreements in the amount of $100 million at a cost of $80 thousand.

 

(k) During Q1 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 3: Consolidated Statements of Financial Condition

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

(Dollars in thousands) (unaudited)

 

 

2018

 

2018

 

2018

 

2018

 

2017

 

Cash and cash equivalents

 

 

$

450,063

 

$

546,780

 

$

378,365

 

$

365,388

 

$

488,233

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading securities

 

 

 

360

 

 

405

 

 

418

 

 

293

 

 

191

 

Investment securities available-for-sale, at fair value, with amortized cost of $854,511

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    (September 30, 2018 - $872,895; June 30, 2018 - $890,308; March 31, 2018 - $815,970;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     December 31, 2017 - $648,799)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Mortgage-backed securities

 

 

 

827,564

 

 

834,538

 

 

855,686

 

 

784,972

 

 

629,124

 

    Other investment securities

 

 

 

14,293

 

 

14,014

 

 

16,655

 

 

16,669

 

 

16,673

 

          Total investment securities available-for-sale

 

 

 

841,857

 

 

848,552

 

 

872,341

 

 

801,641

 

 

645,797

 

Mortgage-backed securities held-to-maturity, at amortized cost, with fair value of $410,353

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    (September 30, 2018 - $425,066; June 30, 2018 - $447,947; March 31, 2018 - $467,980;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     December 31, 2017 - $497,681)

 

 

 

424,740

 

 

444,679

 

 

465,427

 

 

485,143

 

 

506,064

 

Federal Home Loan Bank (FHLB) stock, at cost

 

 

 

12,644

 

 

12,461

 

 

14,919

 

 

11,499

 

 

13,995

 

Other investments

 

 

 

3

 

 

3

 

 

3

 

 

3

 

 

3

 

          Total investments

 

 

 

1,279,604

 

 

1,306,100

 

 

1,353,108

 

 

1,298,579

 

 

1,166,050

 

Loans, net

 

 

 

4,431,594

 

 

4,352,980

 

 

4,315,866

 

 

4,133,429

 

 

4,056,329

 

Other assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets

 

 

 

347

 

 

1,265

 

 

1,100

 

 

898

 

 

771

 

Prepaid expenses

 

 

 

10,283

 

 

13,461

 

 

11,127

 

 

7,625

 

 

9,734

 

Deferred tax asset, net

 

 

 

113,763

 

 

122,934

 

 

125,141

 

 

128,270

 

 

127,421

 

Foreclosed real estate and repossessed properties

 

 

 

36,754

 

 

42,014

 

 

46,035

 

 

45,396

 

 

47,721

 

Premises and equipment, net

 

 

 

68,892

 

 

67,762

 

 

66,174

 

 

67,163

 

 

67,860

 

Goodwill

 

 

 

86,069

 

 

86,069

 

 

86,069

 

 

86,069

 

 

86,069

 

Accounts receivable and other assets

 

 

 

105,983

 

 

117,309

 

 

118,577

 

 

114,304

 

 

138,865

(b)

Total assets

 

 

 $  

6,583,352

 

 $  

6,656,674

 

 $  

6,501,562

 

 $  

6,247,121

 

 $  

6,189,053

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

$

2,191,802

 

$

2,304,067

 

$

2,176,935

 

$

2,117,857

 

$

2,039,126

 

Savings accounts

 

 

 

1,187,945

 

 

1,216,190

 

 

1,219,159

 

 

1,228,646

 

 

1,204,514

 

Time deposits

 

 

 

1,003,271

 

 

1,037,858

 

 

1,022,682

 

 

1,012,329

 

 

1,037,310

 

Brokered deposits

 

 

 

525,097

 

 

530,878

 

 

461,425

 

 

474,596

 

 

518,532

 

          Total deposits

 

 

 

4,908,115

 

 

5,088,993

 

 

4,880,201

 

 

4,833,428

 

 

4,799,482

 

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities sold under agreements to repurchase

 

 

 

455,508

 

 

378,237

 

 

387,770

 

 

273,926

 

 

192,869

 

Advances from FHLB and other borrowings

 

 

 

78,834

 

 

73,723

 

 

128,413

 

 

44,328

 

 

99,796

 

Subordinated capital notes

 

 

 

36,083

 

 

36,083

 

 

36,083

 

 

36,083

 

 

36,083

 

          Total borrowings

 

 

 

570,425

 

 

488,043

 

 

552,266

 

 

354,337

 

 

328,748

 

Other liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

 

 

333

 

 

622

 

 

679

 

 

752

 

 

1,281

 

Acceptances outstanding

 

 

 

16,937

 

 

28,682

 

 

30,578

 

 

25,869

 

 

27,644

 

Accrued expenses and other liabilities

 

 

 

87,665

 

 

80,448

 

 

80,019

 

 

85,886

 

 

86,791

 

          Total liabilities

 

 

 

5,583,475

 

 

5,686,788

 

 

5,543,743

 

 

5,300,272

 

 

5,243,946

 

Stockholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

 

92,000

(a)

 

176,000

 

 

176,000

 

 

176,000

 

 

176,000

 

Common stock

 

 

 

59,885

 (a)  

 

52,626

 

 

52,626

 

 

52,626

 

 

52,626

 

Additional paid-in capital

 

 

 

619,381

(a)

 

542,078

 

 

541,734

 

 

541,404

 

 

541,600

 

Legal surplus

 

 

 

90,167

 

 

87,563

 

 

85,249

 

 

83,138

 

 

81,454

 

Retained earnings 

 

 

 

253,040

 

 

236,120

 

 

221,441

 

 

210,008

 

 

200,878

 

Treasury stock, at cost

 

 

 

(103,633)

 

 

(103,706)

 

 

(103,969)

 

 

(104,142)

 

 

(104,502)

 

Accumulated other comprehensive (loss) income, net

 

 

 

(10,963)

 

 

(20,795)

 

 

(15,262)

 

 

(12,185)

 

 

(2,949)

 

          Total stockholders' equity

 

 

 

999,877

 

 

969,886

 

 

957,819

 

 

946,849

 

 

945,107

 

          Total liabilities and stockholders' equity

 

 

$

6,583,352

 

$

6,656,674

 

$

6,501,562

 

$

6,247,121

 

$

6,189,053

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) During Q4 2018, the Company converted of all of its outstanding 8.750% non-cumulative convertible perpetual preferred stock, series C into OFG Bancorp common stock. Each share of the 84,000 series C preferred stock was converted into 86.4225 shares of common stock.

 

(b) At December 31, 2017, the Company had higher balances in accounts receivable and other assets mainly from accrued interest receivable of loans included in hurricane Maria moratorium program.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 4: Information on Loan Portfolio and Production

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

(Dollars in thousands) (unaudited)

 

 

2018

 

2018

 

2018

 

2018

 

2017

 

Non-acquired loans held for investment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Mortgage

 

 

$

668,808

 

$

667,224

 

$

678,259

 

$

682,564

 

$

683,607

 

      Commercial

 

 

 

1,597,590

 

 

1,540,027

 

 

1,507,368

 

 

1,346,404

 

 

1,307,261

 

      Consumer

 

 

 

348,980

 

 

345,399

 

 

339,341

 

 

334,865

 

 

330,039

 

      Auto

 

 

 

1,129,697

 

 

1,084,912

 

 

1,014,664

 

 

957,197

 

 

883,985

 

 

 

 

 

3,745,075

 

 

3,637,562

 

 

3,539,632

 

 

3,321,030

 

 

3,204,892

 

      Less:  Allowance for loan and lease losses

 

 

 

(95,193)

 

 

(95,236)

 

 

(94,218)

 

 

(96,832)

 

 

(92,718)

 

 

 

 

 

3,649,882

 

 

3,542,326

 

 

3,445,414

 

 

3,224,198

 

 

3,112,174

 

      Deferred loan costs, net

 

 

 

7,742

 

 

7,556

 

 

7,028

 

 

7,125

 

 

6,695

 

          Total non-acquired loans held for investment, net

 

 

 

3,657,624

 

 

3,549,882

 

 

3,452,442

 

 

3,231,323

 

 

3,118,869

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans:

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BBVAPR

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Accounted for under ASC 310-20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Commercial

 

 

 

2,546

 

 

2,778

 

 

2,909

 

 

4,222

 

 

4,380

 

      Consumer

 

 

 

23,988

 

 

24,914

 

 

25,736

 

 

27,235

 

 

28,915

 

      Auto

 

 

 

4,435

 

 

7,494

 

 

11,283

 

 

16,171

 

 

21,969

 

 

 

 

 

30,969

 

 

35,186

 

 

39,928

 

 

47,628

 

 

55,264

 

      Less:  Allowance for loan and lease losses

 

 

 

(2,062)

 

 

(2,350)

 

 

(2,726)

 

 

(3,184)

 

 

(3,862)

 

 

 

 

 

28,907

 

 

32,836

 

 

37,202

 

 

44,444

 

 

51,402

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Accounted for under ASC 310-30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Mortgage

 

 

 

492,890

 

 

503,861

 

 

516,934

 

 

526,089

 

 

532,053

 

      Commercial

 

 

 

182,319

 

 

190,178

 

 

223,853

 

 

230,988

 

 

243,092

 

      Consumer

 

 

 

-

 

 

95

 

 

495

 

 

932

 

 

1,431

 

      Auto

 

 

 

14,403

 

 

20,363

 

 

26,937

 

 

35,006

 

 

43,696

 

 

 

 

 

689,612

 

 

714,497

 

 

768,219

 

 

793,015

 

 

820,272

 

      Less:  Allowance for loan and lease losses

 

 

 

(42,010)

 

 

(43,875)

 

 

(44,176)

 

 

(43,166)

 

 

(45,755)

 

 

 

 

 

647,602

 

 

670,622

 

 

724,043

 

 

749,849

 

 

774,517

 

   Total Acquired BBVAPR loans, net

 

 

 

676,509

 

 

703,458

 

 

761,245

 

 

794,293

 

 

825,919

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eurobank

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Accounted for under ASC 310-30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Mortgage

 

 

 

63,392

 

 

64,785

 

 

65,637

 

 

69,328

 

 

69,538

 

      Commercial

 

 

 

47,826

 

 

49,262

 

 

49,706

 

 

52,418

 

 

53,793

 

      Consumer

 

 

 

846

 

 

895

 

 

935

 

 

972

 

 

1,112

 

 

 

 

 

112,064

 

 

114,942

 

 

116,278

 

 

122,718

 

 

124,443

 

      Less:  Allowance for loan and lease losses

 

 

 

(24,971)

 

 

(24,281)

 

 

(24,314)

 

 

(25,410)

 

 

(25,174)

 

   Total Acquired Eurobank loans, net

 

 

 

87,093

 

 

90,661

 

 

91,964

 

 

97,308

 

 

99,269

 

          Total acquired loans, net

 

 

 

763,602

 

 

794,119

 

 

853,209

 

 

891,601

 

 

925,188

 

Total loans held for investment

 

 

 

4,421,226

 

 

4,344,001

 

 

4,305,651

 

 

4,122,924

 

 

4,044,057

 

Mortgage loans held for sale

 

 

 

10,368

 

 

8,979

 

 

10,215

 

 

10,505

 

 

12,272

 

Total loans, net

 

 

$

4,431,594

 

$

4,352,980

 

$

4,315,866

 

$

4,133,429

 

$

4,056,329

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan Portfolio Summary:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Loans held for investment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Mortgage

 

 

$

1,225,090

 

$

1,235,870

 

$

1,260,830

 

$

1,277,981

 

$

1,285,198

 

      Commercial

 

 

 

1,830,281

 

 

1,782,245

 

 

1,783,836

 

 

1,634,032

 

 

1,608,526

 

      Consumer

 

 

 

373,814

 

 

371,303

 

 

366,507

 

 

364,004

 

 

361,497

 

      Auto

 

 

 

1,148,535

 

 

1,112,769

 

 

1,052,884

 

 

1,008,374

 

 

949,650

 

 

 

 

 

4,577,720

 

 

4,502,187

 

 

4,464,057

 

 

4,284,391

 

 

4,204,871

 

      Less:  Allowance for loan and lease losses

 

 

 

(164,236)

 

 

(165,742)

 

 

(165,434)

 

 

(168,592)

 

 

(167,509)

 

 

 

 

 

4,413,484

 

 

4,336,445

 

 

4,298,623

 

 

4,115,799

 

 

4,037,362

 

      Deferred loan costs, net

 

 

 

7,742

 

 

7,556

 

 

7,028

 

 

7,125

 

 

6,695

 

          Total loans held for investment, net

 

 

 

4,421,226

 

 

4,344,001

 

 

4,305,651

 

 

4,122,924

 

 

4,044,057

 

  Mortgage loans held for sale

 

 

 

10,368

 

 

8,979

 

 

10,215

 

 

10,505

 

 

12,272

 

Total loans, net

 

 

$

4,431,594

 

$

4,352,980

 

$

4,315,866

 

$

4,133,429

 

$

4,056,329

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

2018

 

2018

 

2018

 

2017

 

(Dollars in thousands) (unaudited)

 

 

Q4

 

Q3

 

Q2

 

Q1

 

Q4

 

Quarterly loan production

(13)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Mortgage

 

 

$

33,373

 

$

27,869

 

$

31,808

 

$

26,645

 

$

15,892

 

    Commercial

 

 

 

92,088

 

 

105,346

 

 

127,200

 

 

42,783

 

 

102,083

 

    US Loan Program

 

 

 

31,667

 

 

30,357

 

 

99,666

 

 

74,361

 

 

25,070

 

    Consumer

 

 

 

42,055

 

 

42,995

 

 

42,317

 

 

37,502

 

 

23,059

 

    Auto and Leasing

 

 

 

123,770

 

 

140,390

 

 

131,103

 

 

128,130

 

 

87,551

 

        Total

 

 

$

322,953

 

$

346,957

 

$

432,094

 

$

309,421

 

$

253,655

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5

 

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

2018 Q4

 

2018 Q3

 

2018 Q2

 

2018 Q1

 

2017 Q4

 

 

 

 

 

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

 

 

$

434,701

 

 $  

2,572

 

2.35

%

 

$

325,058

 

 $  

1,676

 

2.05

%

 

$

293,431

 

 $  

1,242

 

1.70

%

 

$

328,214

 

 $  

1,207

 

1.49

%

 

$

493,354

 

 $  

1,516

 

1.22

%

    Investment securities

 

 

 

1,275,752

 

 

8,210

 

2.55

%

 

 

1,327,180

 

 

8,445

 

2.52

%

 

 

1,330,138

 

 

8,335

 

2.51

%

 

 

1,239,794

 

 

7,350

 

2.40

%

 

 

1,160,812

 

 

6,593

 

2.25

%

    Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

          Non-acquired loans

 

 

 

3,649,423

 

 

69,240

 

7.53

%

 

 

3,557,252

 

 

66,843

 

7.45

%

 

 

3,410,044

 

 

61,183

 

7.20

%

 

 

3,244,593

 

 

56,782

 

7.10

%

 

 

3,111,849

 

 

56,183

 

7.16

%

          Acquired BBVAPR loans

 

 

 

734,600

 

 

12,442

 

6.72

%

 

 

765,705

 

 

13,688

 

7.09

%

 

 

806,830

 

 

13,880

 

6.90

%

 

 

841,638

 

 

14,490

 

6.98

%

 

 

869,269

 

 

15,310

 

6.99

%

          Acquired Eurobank loans

 

 

 

89,091

 

 

2,642

 

11.77

%

 

 

91,626

 

 

3,485

 

15.09

%

 

 

93,332

 

 

3,366

 

14.47

%

 

 

97,544

 

 

3,341

 

13.89

%

 

 

100,310

 

 

3,573

 

14.13

%

            Total loans

 

 

 

4,473,114

 

 

84,324

 

7.48

%

 

 

4,414,583

 

 

84,016

 

7.55

%

 

 

4,310,206

 

 

78,429

 

7.30

%

 

 

4,183,775

 

 

74,613

 

7.23

%

 

 

4,081,427

 

 

75,066

 

7.30

%

Total interest-earning assets

 

 

$

6,183,567

 

$

95,106

 

6.10

%

 

$

6,066,821

 

$

94,137

 

6.16

%

 

$

5,933,775

 

$

88,006

 

5.95

%

 

$

5,751,783

 

$

83,170

 

5.86

%

 

$

5,735,593

 

$

83,175

 

5.75

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        NOW accounts

 

 

$

1,109,795

 

$

1,432

 

0.51

%

 

$

1,096,023

 

$

1,196

 

0.43

%

 

$

1,052,465

 

$

966

 

0.37

%

 

$

1,059,129

 

$

898

 

0.34

%

 

$

1,040,153

 

$

922

 

0.35

%

        Savings accounts

 

 

 

1,217,931

 

 

1,741

 

0.57

%

 

 

1,211,693

 

 

1,571

 

0.51

%

 

 

1,230,741

 

 

1,555

 

0.51

%

 

 

1,206,100

 

 

1,497

 

0.50

%

 

 

1,224,815

 

 

1,530

 

0.50

%

        Time deposits

 

 

 

1,012,101

 

 

3,008

 

1.18

%

 

 

1,027,124

 

 

2,896

 

1.12

%

 

 

1,012,330

 

 

2,781

 

1.10

%

 

 

1,024,740

 

 

2,802

 

1.11

%

 

 

1,046,191

 

 

2,932

 

1.11

%

        Brokered deposits

 

 

 

526,849

 

 

3,003

 

2.26

%

 

 

519,502

 

 

2,727

 

2.08

%

 

 

470,775

 

 

2,134

 

1.82

%

 

 

466,638

 

 

1,886

 

1.64

%

 

 

524,198

 

 

2,079

 

1.57

%

 

 

 

 

3,866,676

 

 

9,184

 

0.94

%

 

 

3,854,342

 

 

8,390

 

0.86

%

 

 

3,766,311

 

 

7,436

 

0.79

%

 

 

3,756,607

 

 

7,083

 

0.76

%

 

 

3,835,357

 

 

7,463

 

0.77

%

        Non-interest bearing deposit accounts

 

 

 

1,120,599

 

 

-

 

-

 

 

 

1,079,833

 

 

-

 

-

 

 

 

1,082,145

 

 

-

 

-

 

 

 

1,018,789

 

 

-

 

-

 

 

 

937,328

 

 

-

 

-

%

        Fair value premium amortization and core deposit intangible amortization

 

 

 

-

 

 

215

 

-

 

 

 

-

 

 

215

 

-

 

 

 

-

 

 

215

 

-

 

 

 

-

 

 

215

 

-

 

 

 

-

 

 

230

 

-

 

            Total deposits

 

 

 

4,987,275

 

 

9,399

 

0.75

%

 

 

4,934,175

 

 

8,605

 

0.69

%

 

 

4,848,456

 

 

7,651

 

0.63

%

 

 

4,775,396

 

 

7,298

 

0.62

%

 

 

4,772,685

 

 

7,693

 

0.64

%

    Borrowings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        Securities sold under agreements to repurchase

 

 

 

430,889

 

 

2,633

 

2.42

%

 

 

390,225

 

 

2,242

 

2.28

%

 

 

353,313

 

 

1,843

 

2.09

%

 

 

251,582

 

 

1,076

 

1.73

%

 

 

236,522

 

 

963

 

1.62

%

        Advances from FHLB and other borrowings

 

 

 

76,948

 

 

536

 

2.76

%

 

 

76,960

 

 

517

 

2.67

%

 

 

73,218

 

 

448

 

2.45

%

 

 

64,128

 

 

374

 

2.37

2

 

 

101,454

 

 

600

 

2.35

%

        Subordinated capital notes

 

 

 

36,083

 

 

503

 

5.53

%

 

 

36,083

 

 

496

 

5.45

%

 

 

36,083

 

 

476

 

5.29

%

 

 

36,083

 

 

428

 

4.81

%

 

 

36,083

 

 

406

 

4.46

%

            Total borrowings

 

 

 

543,920

 

 

3,672

 

2.68

%

 

 

503,268

 

 

3,255

 

2.57

%

 

 

462,614

 

 

2,767

 

2.40

%

 

 

351,793

 

 

1,878

 

2.17

%

 

 

374,059

 

 

1,969

 

2.09

%

Total interest-bearing liabilities

 

 

 $  

5,531,195

 

 $  

13,071

 

0.94

%

 

 $  

5,437,443

 

 $  

11,860

 

0.87

%

 

 $  

5,311,070

 

 $  

10,418

 

0.79

%

 

 $  

5,127,189

 

 $  

9,176

 

0.73

%

 

 $  

5,146,744

 

 $  

9,662

 

0.74

%

Interest rate spread

 

 

 

 

 

$

82,035

 

5.16

%

 

 

 

 

$

82,277

 

5.29

%

 

 

 

 

$

77,588

 

5.16

%

 

 

 

 

$

73,994

 

5.13

%

 

 

 

 

$

73,513

 

5.01

%

Net interest margin

 

 

 

 

 

 

 

 

5.26

%

 

 

 

 

 

 

 

5.38

%

 

 

 

 

 

 

 

5.24

%

 

 

 

 

 

 

 

5.22

%

 

 

 

 

 

 

 

5.08

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASC 310-30 loan cost recoveries:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

          Acquired BBVAPR loans

 

 

 

 

 

$

653

 

 

 

 

 

 

 

$

1,143

 

 

 

 

 

 

 

$

291

 

 

 

 

 

 

 

$

119

 

 

 

 

 

 

 

$

199

 

 

 

          Acquired Eurobank loans

 

 

 

 

 

 

123

 

 

 

 

 

 

 

 

829

 

 

 

 

 

 

 

 

533

 

 

 

 

 

 

 

 

389

 

 

 

 

 

 

 

 

526

 

 

 

 

 

 

 

 

 

$

776

 

 

 

 

 

 

 

$

1,972

 

 

 

 

 

 

 

$

824

 

 

 

 

 

 

 

$

508

 

 

 

 

 

 

 

$

725

 

 

 

Adjusted excluding cost recoveries (Non-GAAP):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest-earning assets

 

 

$

6,183,567

 

$

94,330

 

6.05

%

 

$

6,066,821

 

$

92,165

 

6.03

%

 

$

5,933,775

 

$

87,182

 

5.89

%

 

$

5,751,783

 

$

82,662

 

5.83

%

 

$

5,735,593

 

$

82,450

 

5.70

%

Interest rate spread

 

 

 

 

 

 $  

81,259

 

5.11

%

 

 

 

 

 $  

80,305

 

5.16

%

 

 

 

 

 $  

76,764

 

5.10

%

 

 

 

 

 $  

73,486

 

5.10

%

 

 

 

 

 $  

72,788

 

4.96

%

Net interest margin

 

 

 

 

 

 

 

 

5.21

%

 

 

 

 

 

 

 

5.25

%

 

 

 

 

 

 

 

5.19

%

 

 

 

 

 

 

 

5.18

%

 

 

 

 

 

 

 

5.03

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

2018 YTD

 

2017 YTD

 

 

 

 

 

 

Interest

 

 

 

 

 

 

Interest

 

 

 

 

 

 

 

Average

 

Income/

 

Yield/

 

Average

 

Income/

 

Yield/

 

(Dollars in thousands) (unaudited)

 

 

Balance

 

Expense

 

Rate

 

Balance

 

Expense

 

Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Cash equivalents

 

 

$

343,982

 

 $  

6,698

 

1.95

%

 

$

436,913

 

 $  

4,619

 

1.06

%

 

    Investment securities

 

 

 

1,293,407

 

 

32,340

 

2.50

%

 

 

1,255,881

 

 

28,607

 

2.28

%

 

    Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

          Non-acquired loans

 

 

 

3,460,583

 

 

254,047

 

7.34

%

 

 

3,061,651

 

 

220,591

 

7.20

%

 

          Acquired BBVAPR loans

 

 

 

794,092

 

 

54,500

 

6.86

%

 

 

927,497

 

 

71,271

 

7.68

%

 

          Acquired Eurobank loans

 

 

 

93,460

 

 

12,834

 

13.73

%

 

 

136,655

 

 

20,559

 

15.04

%

 

            Total loans

 

 

 

4,348,135

 

 

321,381

 

7.39

%

 

 

4,125,804

 

 

312,421

 

7.57

%

 

Total interest-earning assets

 

 

$

5,985,524

 

$

360,419

 

6.02

%

 

$

5,818,598

 

$

345,647

 

5.94

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        NOW accounts

 

 

$

1,079,538

 

$

4,492

 

0.42

%

 

$

1,059,051

 

$

3,893

 

0.37

%

 

        Savings accounts

 

 

 

1,216,635

 

 

6,364

 

0.52

%

 

 

1,170,800

 

 

5,922

 

0.51

%

 

        Time deposits

 

 

 

1,019,061

 

 

11,487

 

1.13

%

 

 

1,039,033

 

 

11,352

 

1.09

%

 

        Brokered deposits

 

 

 

496,171

 

 

9,751

 

1.97

%

 

 

557,115

 

 

8,211

 

1.47

%

 

 

 

 

 

3,811,406

 

 

32,093

 

0.84

%

 

 

3,826,000

 

 

29,378

 

0.77

%

 

        Non-interest bearing deposit accounts

 

 

 

1,078,178

 

 

-

 

-

 

 

 

860,287

 

 

-

 

-

%

 

        Fair value premium amortization and core deposit intangible amortization

 

 

 

-

 

 

860

 

-

 

 

 

-

 

 

920

 

-

 

 

            Total deposits

 

 

 

4,889,584

 

 

32,953

 

0.67

%

 

 

4,686,287

 

 

30,298

 

0.65

%

 

Borrowings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        Securities sold under agreements to repurchase

 

 

 

357,086

 

 

7,794

 

2.18

%

 

 

401,070

 

 

7,223

 

1.80

%

 

        Advances from FHLB and other borrowings

 

 

 

72,882

 

 

1,875

 

2.57

%

 

 

103,214

 

 

2,398

 

2.32

%

 

        Subordinated capital notes

 

 

 

36,083

 

 

1,903

 

5.27

%

 

 

36,083

 

 

1,556

 

4.31

%

 

            Total borrowings

 

 

 

466,051

 

 

11,572

 

2.48

%

 

 

540,367

 

 

11,177

 

2.07

%

 

Total interest-bearing liabilities

 

 

 $  

5,355,635

 

 $  

44,525

 

0.83

%

 

 $  

5,226,654

 

 $  

41,475

 

0.79

%

 

Interest rate spread

 

 

 

 

 

$

315,894

 

5.19

%

 

 

 

 

$

304,172

 

5.15

%

 

Net interest margin

 

 

 

 

 

 

 

 

5.28

%

 

 

 

 

 

 

 

5.23

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASC 310-30 loan cost recoveries:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

          Acquired BBVAPR loans

 

 

 

 

 

$

2,206

 

 

 

 

 

 

 

 

3,964

 

 

 

 

          Acquired Eurobank loans

 

 

 

 

 

 

1,875

 

 

 

 

 

 

 

 

2,719

 

 

 

 

 

 

 

 

 

 

$

4,081

 

 

 

 

 

 

 

$

6,683

 

 

 

 

Adjusted excluding cost recoveries (Non-GAAP):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest-earning assets

 

 

$

5,985,524

 

$

356,338

 

5.95

%

 

$

5,818,598

 

$

338,964

 

5.83

%

 

Interest rate spread

 

 

 

 

 

 $  

311,813

 

5.12

%

 

 

 

 

 $  

297,489

 

5.04

%

 

Net interest margin

 

 

 

 

 

 

 

 

5.21

%

 

 

 

 

 

 

 

5.11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

2018

 

2018

 

2018

 

2018

 

2017

 

(Dollars in thousands) (unaudited)

 

 

Q4

 

Q3

 

Q2

 

Q1

 

Q4

 

Net Charge-offs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

 

 

$

1,570

 

$

1,429

 

$

1,328

 

$

968

 

$

1,248

 

  Recoveries

 

 

 

(128)

 

 

(139)

 

 

(466)

 

 

(314)

 

 

(126)

 

      Total mortgage

 

 

 

1,442

 

 

1,290

 

 

862

 

 

654

 

 

1,122

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

 

 

 

386

 

 

3,249

 

 

1,998

 

 

1,149

 

 

1,260

 

  Recoveries

 

 

 

(126)

 

 

(119)

 

 

(227)

 

 

(182)

 

 

(401)

 

      Total commercial

 

 

 

260

 

 

3,130

 

 

1,771

 

 

967

 

 

859

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

 

 

 

4,191

 

 

4,591

 

 

4,588

 

 

4,258

 

 

1,849

 

  Recoveries

 

 

 

(1,000)

 

 

(278)

 

 

(240)

 

 

(240)

 

 

(96)

 

      Total consumer

 

 

 

3,191

 

 

4,313

 

 

4,348

 

 

4,018

 

 

1,753

 

Auto and Leasing:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

 

 

 

10,843

 

 

9,111

 

 

13,748

 

 

8,982

 

 

9,182

 

  Recoveries

 

 

 

(4,851)

 

 

(5,442)

 

 

(5,280)

 

 

(3,777)

 

 

(2,450)

 

      Total auto and leasing

 

 

 

5,992

 

 

3,669

 

 

8,468

 

 

5,205

 

 

6,732

 

          Total

 

 

$

10,885

 

$

12,402

 

$

15,449

 

$

10,844

 

$

10,466

 

Net Charge-off Rates

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

 

0.87%

 

 

0.77%

 

 

0.51%

 

 

0.38%

 

 

0.65%

 

Commercial

 

 

 

0.07%

 

 

0.83%

 

 

0.50%

 

 

0.30%

 

 

0.27%

 

Consumer

 

 

 

3.89%

 

 

5.35%

 

 

5.42%

 

 

5.07%

 

 

2.30%

 

Auto and Leasing

 

 

 

2.16%

 

 

1.40%

 

 

3.39%

 

 

2.23%

 

 

3.13%

 

          Total

 

 

 

1.19%

 

 

1.39%

 

 

1.81%

 

 

1.34%

 

 

1.35%

 

Average Loans Held For Investment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

$

663,208

 

$

672,526

 

$

679,133

 

$

683,398

 

$

688,312

 

Commercial

 

 

 

1,546,870

 

 

1,513,556

 

 

1,411,177

 

 

1,310,444

 

 

1,257,619

 

Consumer

 

 

 

328,162

 

 

322,553

 

 

320,687

 

 

317,295

 

 

304,760

 

Auto and Leasing

 

 

 

1,111,183

 

 

1,048,617

 

 

999,047

 

 

933,456

 

 

861,158

 

        Total

 

 

$

3,649,423

 

$

3,557,252

 

$

3,410,044

 

$

3,244,593

 

$

3,111,849

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

2018

 

2018

 

2018

 

2018

 

2017

 

(Dollars in thousands) (unaudited)

 

 

Q4

 

Q3

 

Q2

 

Q1

 

Q4

 

Early Delinquency (30 - 89 days past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

$

26,150

 

$

25,285

 

$

26,132

 

$

29,190

 

$

17,315

 

Commercial

 

 

 

5,568

 

 

6,871

 

 

9,699

 

 

8,126

 

 

2,620

 

Consumer

 

 

 

7,285

 

 

6,661

 

 

7,063

 

 

7,478

 

 

6,149

 

Auto and Leasing

 

 

 

86,039

 

 

81,828

 

 

65,823

 

 

61,558

 

 

32,159

 

        Total

 

 

$

125,042

 

$

120,645

 

$

108,717

 

$

106,352

 

$

58,243

(a)

Early Delinquency Rates (30 - 89 days past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

 

3.91%

 

 

3.79%

 

 

3.85%

 

 

4.28%

 

 

2.53%

 

Commercial

 

 

 

0.35%

 

 

0.45%

 

 

0.64%

 

 

0.60%

 

 

0.20%

 

Consumer

 

 

 

2.09%

 

 

1.93%

 

 

2.08%

 

 

2.23%

 

 

1.86%

 

Auto and Leasing

 

 

 

7.62%

 

 

7.54%

 

 

6.49%

 

 

6.43%

 

 

3.64%

 

        Total

 

 

 

3.34%

 

 

3.32%

 

 

3.07%

 

 

3.20%

 

 

1.82%

(a)

Total Delinquency (30 days and over past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Traditional, Non traditional, and Loans under Loss Mitigation

 

 

$

82,404

 

$

83,966

 

$

83,707

 

$

89,252

 

$

76,542

 

    GNMA's buy-back option program

 

 

 

19,721

 

 

13,325

 

 

14,521

 

 

12,515

 

 

8,268

 

        Total mortgage

 

 

 

102,125

 

 

97,291

 

 

98,228

 

 

101,767

 

 

84,810

 

Commercial

 

 

 

27,423

 

 

25,191

 

 

26,269

 

 

21,544

 

 

18,509

 

Consumer

 

 

 

8,983

 

 

8,530

 

 

9,095

 

 

9,129

 

 

8,028

 

Auto and Leasing

 

 

 

99,533

 

 

93,976

 

 

76,924

 

 

75,152

 

 

36,391

 

        Total

 

 

$

238,064

 

$

224,988

 

$

210,516

 

$

207,592

 

$

147,738

(a)

Total Delinquency Rates (30 days and over past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Traditional, Non traditional, and Loans under Loss Mitigation

 

 

 

12.32%

 

 

12.58%

 

 

12.34%

 

 

13.08%

 

 

11.20%

 

    GNMA's buy-back option program

 

 

 

2.95%

 

 

2.00%

 

 

2.14%

 

 

1.83%

 

 

1.21%

 

        Total mortgage

 

 

 

15.27%

 

 

14.58%

 

 

14.48%

 

 

14.91%

 

 

12.41%

 

Commercial

 

 

 

1.72%

 

 

1.64%

 

 

1.74%

 

 

1.60%

 

 

1.42%

 

Consumer

 

 

 

2.57%

 

 

2.47%

 

 

2.68%

 

 

2.73%

 

 

2.43%

 

Auto and Leasing

 

 

 

8.81%

 

 

8.66%

 

 

7.58%

 

 

7.85%

 

 

4.12%

 

        Total

 

 

 

6.36%

 

 

6.19%

 

 

5.95%

 

 

6.25%

 

 

4.61%

(a)

Nonperforming Assets

(14)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

$

63,717

 

$

67,236

 

$

67,002

 

$

63,866

 

$

64,085

 

Commercial

 

 

 

42,456

 

 

42,807

 

 

47,451

 

 

47,044

 

 

35,253

 

Consumer

 

 

 

3,354

 

 

3,116

 

 

2,826

 

 

2,263

 

 

2,572

 

Auto and Leasing

 

 

 

13,494

 

 

12,185

 

 

11,141

 

 

13,594

 

 

4,232

 

        Total nonperforming loans

 

 

 

123,021

 

 

125,344

 

 

128,420

 

 

126,767

 

 

106,142

 

Foreclosed real estate

 

 

 

9,571

 

 

10,295

 

 

12,186

 

 

13,365

 

 

14,282

 

Other repossessed assets

 

 

 

2,986

 

 

4,146

 

 

5,483

 

 

5,082

 

 

3,172

 

        Total nonperforming assets

 

 

$

135,578

 

$

139,785

 

$

146,089

 

$

145,214

 

$

123,596

 

Nonperforming Loan Rates

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

 

9.53%

 

 

10.08%

 

 

9.88%

 

 

9.36%

 

 

9.37%

 

Commercial

 

 

 

2.66%

 

 

2.78%

 

 

3.15%

 

 

3.49%

 

 

2.70%

 

Consumer

 

 

 

0.96%

 

 

0.90%

 

 

0.83%

 

 

0.68%

 

 

0.78%

 

Auto and Leasing

 

 

 

1.19%

 

 

1.12%

 

 

1.10%

 

 

1.42%

 

 

0.48%

 

        Total loans

 

 

 

3.28%

 

 

3.45%

 

 

3.63%

 

 

3.82%

 

 

3.31%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) After Hurricane Irma and Maria on September 7, 2017 and September 20, 2017, respectively, the Company offered an automatic three-month moratorium for the payment of principal and interest for certain loans. During Q4 2017, the Company received payments on loans in moratorium, causing a decrease in delinquency.

 

 

 

9

 

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 7: Allowance for Loan and Lease Losses

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended December 31, 2018

(Dollars in thousands) (unaudited)

 

 

Mortgage

 

Commercial

 

Consumer

 

Auto

 

Total

Non-acquired loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

19,545

 

$

32,491

 

$

15,715

 

$

27,485

 

$

95,236

(Recapture) provision for loan and lease losses, net

 

 

 

1,680

 

 

(1,905)

 

 

3,047

 

 

8,020

 

 

10,842

Charge-offs

 

 

 

(1,570)

 

 

(386)

 

 

(4,191)

 

 

(10,843)

 

 

(16,990)

Recoveries

 

 

 

128

 

 

126

 

 

1,000

 

 

4,851

 

 

6,105

    Balance at end of period

 

 

$

19,783

 

$

30,326

 

$

15,571

 

$

29,513

 

$

95,193

Allowance coverage ratio

 

 

 

2.96%

 

 

1.90%

 

 

4.46%

 

 

2.61%

 

 

2.54%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired BBVAPR loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans accounted for under ASC 310-20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

 

 

 

$

17

 

$

2,140

 

$

193

 

$

2,350

(Recapture) provision for loan and lease losses, net

 

 

 

 

 

 

-

 

 

(93)

 

 

(161)

 

 

(254)

Charge-offs

 

 

 

 

 

 

-

 

 

(379)

 

 

(87)

 

 

(466)

Recoveries

 

 

 

 

 

 

5

 

 

237

 

 

190

 

 

432

    Balance at end of period

 

 

 

 

 

$

22

 

$

1,905

 

$

135

 

$

2,062

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans accounted for under ASC 310-30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

15,258

 

$

22,256

 

$

18

 

$

6,343

 

$

43,875

Provision (recapture) for loan and lease losses, net

 

 

 

35

 

 

(761)

 

 

(18)

 

 

-

 

 

(744)

Allowance de-recognition

 

 

 

(68)

 

 

(854)

 

 

-

 

 

(199)

 

 

(1,121)

    Balance at end of period

 

 

$

15,225

 

$

20,641

 

$

-

 

$

6,144

 

$

42,010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired Eurobank loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

15,155

 

$

9,122

 

$

4

 

$

-

 

$

24,281

Provision (recapture) for loan and lease losses, net

 

 

 

791

 

 

665

 

 

-

 

 

-

 

 

1,456

Allowance de-recognition

 

 

 

(564)

 

 

(202)

 

 

-

 

 

-

 

 

(766)

    Balance at end of period

 

 

$

15,382

 

$

9,585

 

$

4

 

$

-

 

$

24,971

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total acquired loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

30,413

 

$

31,395

 

$

2,162

 

$

6,536

 

$

70,506

Provision (recapture) for loan and lease losses, net

 

 

 

826

 

 

(96)

 

 

(111)

 

 

(161)

 

 

458

Charge-offs

 

 

 

-

 

 

-

 

 

(379)

 

 

(87)

 

 

(466)

Recoveries

 

 

 

-

 

 

5

 

 

237

 

 

190

 

 

432

Allowance de-recognition

 

 

 

(632)

 

 

(1,056)

 

 

-

 

 

(199)

 

 

(1,887)

    Balance at end of period

 

 

$

30,607

 

$

30,248

 

$

1,909

 

$

6,279

 

$

69,043

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 December 31, 2018

(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

 

 

$

238,637

 

$

35,275

 

$

3,463

 

$

611

 

$

408

 

$

278,394

Accretion

 

 

 

(6,538)

 

 

(2,138)

 

 

(763)

 

 

(369)

 

 

(333)

 

 

(10,141)

Change in expected cash flows

 

 

 

-

 

 

623

 

 

7

 

 

61

 

 

328

 

 

1,019

Transfers (to) from non-accretable discount

 

 

 

100

 

 

(215)

 

 

256

 

 

(60)

 

 

157

 

 

238

    Balance at end of period

 

 

$

232,199

 

$

33,545

 

$

2,963

 

$

243

 

$

560

 

$

269,510

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Accretable Discount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

292,821

 

$

2,623

 

$

8,535

 

$

23,823

 

$

19,371

 

$

347,173

Change in actual and expected cash flows

 

 

 

(834)

 

 

(764)

 

 

(7)

 

 

362

 

 

(269)

 

 

(1,512)

Transfers from (to) accretable yield

 

 

 

(100)

 

 

215

 

 

(256)

 

 

60

 

 

(157)

 

 

(238)

    Balance at end of period

 

 

$

291,887

 

$

2,074

 

$

8,272

 

$

24,245

 

$

18,945

 

$

345,423

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

$

38,023

 

$

4,353

 

$

699

 

$

-

 

$

-

 

$

43,075

Accretion

 

 

 

(1,381)

 

 

(1,235)

 

 

-

 

 

(7)

 

 

(20)

 

 

(2,643)

Change in expected cash flows

 

 

 

(155)

 

 

230

 

 

-

 

 

(12)

 

 

3

 

 

66

Transfers (to) from non-accretable discount

 

 

 

1,247

 

 

(38)

 

 

(44)

 

 

19

 

 

17

 

 

1,201

    Balance at end of period

 

 

$

37,734

 

$

3,310

 

$

655

 

$

-

 

$

-

 

$

41,699

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Accretable Discount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

2,513

 

$

-

 

$

1,506

 

$

-

 

$

168

 

$

4,187

Change in actual and expected cash flows

 

 

 

10

 

 

(38)

 

 

-

 

 

19

 

 

(18)

 

 

(27)

Transfers from (to) accretable yield

 

 

 

(1,247)

 

 

38

 

 

44

 

 

(19)

 

 

(17)

 

 

(1,201)

    Balance at end of period

 

 

$

1,276

 

$

-

 

$

1,550

 

$

-

 

$

133

 

$

2,959

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

2018

 

2018

 

2018

 

2017

 

 

2017

(Dollars in thousands) (unaudited)

 

 

Q4

 

Q3

 

Q2

 

Q1

 

Q4

 

 

YTD

Stockholders' Equity to Non-GAAP Tangible Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

 

$

999,877

 

$

969,886

 

$

957,819

 

$

946,849

 

$

945,107

 

$

945,107

Less:  Intangible assets

 

 

 

(89,437)

 

 

(89,767)

 

 

(90,097)

 

 

(90,426)

 

 

(90,756)

 

 

(90,756)

           Noncumulative perpetual preferred stock

 

 

 

(92,000)

 

 

(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

 

 

10,130

Tangible common equity

 

 

$

828,570

 

$

714,249

 

$

701,852

 

$

690,553

 

$

688,481

 

$

688,481

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock outstanding at end of period

 

 

 

51,294

 

 

44,006

 

 

43,983

 

 

43,968

 

 

43,947

 

 

43,947

Tangible book value (Non-GAAP)

 

 

$

16.15

 

$

16.23

 

$

15.96

 

$

15.71

 

$

15.67

 

$

15.67

Total Assets to Tangible Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets  

 

 

$

6,583,352

 

$

6,656,674

 

$

6,501,562

 

$

6,247,121

 

$

6,189,053

 

$

6,189,053

Less:  Intangible assets

 

 

 

(89,437)

 

 

(89,767)

 

 

(90,097)

 

 

(90,426)

 

 

(90,756)

 

 

(90,756)

Tangible assets (Non-GAAP)

 

 

$

6,493,915

 

$

6,566,907

 

$

6,411,465

 

$

6,156,695

 

$

6,098,297

 

$

6,098,297

Non-GAAP TCE Ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity

 

 

$

828,570

 

$

714,249

 

$

701,852

 

$

690,553

 

$

688,481

 

$

688,481

Tangible assets

 

 

 

6,493,915

 

 

6,566,907

 

 

6,411,465

 

 

6,156,695

 

 

6,098,297

 

 

6,098,297

TCE ratio

 

 

 

12.76%

 

 

10.88%

 

 

10.95%

 

 

11.22%

 

 

11.29%

 

 

11.29%

Average Equity to Non-GAAP Average Tangible Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total stockholders' equity

 

 

$

983,015

 

$

973,838

 

$

959,777

 

$

952,151

 

$

943,823

 

$

943,823

Less:  Average noncumulative perpetual preferred stock

 

 

 

(111,174)

 

 

(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

 

 

10,130

Average total common stockholders' equity

 

 

$

881,971

 

$

807,968

 

$

793,907

 

$

786,281

 

$

777,953

 

$

777,953

Less:  Average intangible assets

 

 

 

(89,580)

 

 

(89,933)

 

 

(90,272)

 

 

(90,624)

 

 

(90,951)

 

 

(90,951)

Average tangible common equity

 

 

$

792,391

 

$

718,035

 

$

703,635

 

$

695,657

 

$

687,002

 

$

687,002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Metrics for Hurricanes Irma and Maria - Reconciliation to GAAP Financial Measures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

17,073

 

$

52,646

Plus:  Additional loan loss provision from Hurricanes Irma and Maria

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27,000

 

 

32,406

Less:  Income tax effect

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,038)

 

 

(10,146)

Adjusted net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

36,035

 

 

74,906

Less:  dividends on preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,465)

 

 

(13,862)

Adjusted net income available to common shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

32,570

 

 

61,044

Plus:  Effect of assumed conversion of the convertible preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,838

 

 

7,350

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

34,408

 

$

68,394

Average common shares outstanding and equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

51,104

 

 

51,096

Adjusted earnings per common share - diluted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

0.67

 

$

1.34

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

36,035

 

$

74,906

Adjusted average assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,193,619

 

 

6,263,647

Adjusted return on average assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.33%

 

 

1.20%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income available to common shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

32,570

 

$

61,044

Adjusted average tangible common stockholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

687,221

 

 

687,712

Adjusted return on average tangible common stockholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18.96%

 

 

8.88%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12

 

 

 

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

BASEL III

 

 

 

 

Standardized

 

 

 

 

2018

 

2018

 

2018

 

2018

 

2017

 

(Dollars in thousands) (unaudited)

 

 

Q4

 

Q3

 

Q2

 

Q1

 

Q4

 

Regulatory Capital Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital

 

 

$

811,708

 

$

690,937

 

$

669,922

 

$

652,013

 

$

644,804

 

Tier 1 capital

 

 

 

928,578

 

 

891,807

 

 

870,792

 

 

852,883

 

 

842,133

 

Total risk-based capital

(15)

 

 

990,500

 

 

953,543

 

 

931,606

 

 

910,828

 

 

899,258

 

Risk-weighted assets

 

 

 

4,837,214

 

 

4,806,348

 

 

4,737,529

 

 

4,489,130

 

 

4,420,667

 

Regulatory Capital Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital ratio

(16)

 

 

16.78%

 

 

14.38%

 

 

14.14%

 

 

14.52%

 

 

14.59%

 

Tier 1 risk-based capital ratio

(17)

 

 

19.20%

 

 

18.55%

 

 

18.38%

 

 

19.00%

 

 

19.05%

 

Total risk-based capital ratio

(18)

 

 

20.48%

 

 

19.84%

 

 

19.67%

 

 

20.29%

 

 

20.34%

 

Leverage ratio

(19)

 

 

14.22%

 

 

13.93%

 

 

13.92%

 

 

14.07%

 

 

13.92%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

 

$

999,877

 

$

969,886

 

$

957,819

 

$

946,849

 

$

945,107

 

Less:  Noncumulative perpetual preferred stock

 

 

 

(92,000)

 

 

(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

 

 

 

10,972

 

 

21,187

 

 

15,518

 

 

12,274

 

 

2,638

 

          Unrealized losses on cash flow hedges, net of income tax

 

 

 

(9)

 

 

(392)

 

 

(256)

 

 

(89)

 

 

311

 

 

 

 

 

928,970

 

 

824,811

 

 

807,211

 

 

793,164

 

 

782,186

 

Less:    Disallowed goodwill

 

 

 

(86,069)

 

 

(86,069)

 

 

(86,069)

 

 

(86,069)

 

 

(86,069)

 

            Disallowed other intangible assets, net

(20)

 

 

(2,105)

 

 

(2,256)

 

 

(2,457)

 

 

(2,657)

 

 

(2,287)

 

            Disallowed deferred tax assets, net

(20)

 

 

(29,088)

 

 

(45,549)

 

 

(48,763)

 

 

(52,425)

 

 

(49,026)

 

Common equity Tier 1 capital

 

 

 

811,708

 

 

690,937

 

 

669,922

 

 

652,013

 

 

644,804

 

Plus:  Qualifying noncumulative perpetual preferred stock

 

 

 

92,000

 

 

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

 

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(3,541)

 

Tier 1 capital

 

 

 

928,578

 

 

891,807

 

 

870,792

 

 

852,883

 

 

842,133

 

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

 

 

 

61,922

 

 

61,736

 

 

60,814

 

 

57,945

 

 

57,125

 

Total risk-based capital

 

 

$

990,500

 

$

953,543

 

$

931,606

 

$

910,828

 

$

899,258

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 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.

(2)

Total banking and financial service 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 2018 and 2017.

(21)

Pre-provision net revenues is a non-GAAP measure calculated based on net interest income plus total non-interest income, net, less total non-interest expenses for the period.

14
                         

 

 

 

 

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