EX-99 2 d339177dex99.htm EXHIBIT 99  

 

 

 

Exhibit 99

 

OFG Bancorp Reports 2Q13 Results

SAN JUAN, Puerto Rico, July 22, 2013 – OFG Bancorp (NYSE: OFG) reported today results for the second quarter ended June 30, 2013.

2Q13 Financial Summary

·         Income available to common shareholders increased to $34.1 million, or $0.68 per share diluted, compared to $13.8 million, or $0.34 per share, in the second quarter of 2012, and $17.7 million, or $0.37 per share, in the first quarter of 2013.

·         Net Interest Margin was 5.56% compared to 4.71% in the preceding quarter.

·         Second quarter results reflect the positive impact of a $37.0 million reduction in tax provisions stemming from the increase in deferred tax assets as a result of enactment during the quarter of amendments to the Puerto Rico Income Tax Code (the “Tax Code Amendments”),and a $2.1 million recovery from the sale of a claim in the Lehman Brothers bankruptcy.

·         The quarter’s results also reflect the negative impact of $21.0 million in additional provision for loan and lease losses due to reclassification to held-for-sale of $59.0 million of non-performing residential mortgage loans, $7.1 million in additional amortization of the FDIC Indemnification Asset from stepped up cost recoveries on certain loan pools, and $5.3 million in planned integration expenses.

·         For the six months ended June 30, 2013, income available to common shareholders increased to $51.8 million, or $1.05 per share diluted, compared to $23.2 million, or $0.57 per share, in the year ago period.

CEO’s Comment

“The second quarter was an excellent one for OFG Bancorp,” said José Rafael Fernández, President, Chief Executive Officer and Vice Chairman of the Board. “Our results,both organic and with the quarter specific items, were strong.”

 

 

 

 

 

“Strategically, Oriental is growing in Puerto Rico as a major player with a solid track record for consistent, quality service in retail and commercial banking and financial services. Operationally, we are demonstrating our ability to smoothly integrate OFG and the former BBVA-PR businesses into a larger, more effective platform.

“During the quarter, we saw record levels of loan income and production, wealth management and banking fee income, and retail and commercial deposits. Reclassifying substantially all non-performing residential loans that Oriental originated prior to 2009 as held-for-sale has increased our ability to further enhance our already strong credit quality.

“Taking into consideration our higher tax rate, the DTA benefit, and the increase in provision related to moving the non-performingloans to held-for-sale, our original guidance of $1.40 GAAP EPS is now $1.55. Second half core business indicators look promising, with continued growth virtually across the board.”

2Q13 Income Statement Analysis

Net Interest Income

·         Interest income from loans increased 14.0% from the preceding quarter, to a record $114.6 million, while interest income from investments of $11.2 million declined 14.8%. The foregoing resultsreflect OFG's strategic decision last year to focus its growth on higher yielding loans and sharply reduce the size of its investment portfolio when interest rates were at record low levels.

·         Deposit interest expense of $10.0 million declined 4.8% from the preceding quarter, reflecting continued reductions in the cost of deposits on larger balances. Due to reduced reliance on wholesale funding,interest expense from borrowings of $10.5 million was 1.0% less than the preceding quarter.

·         Consequently, net interest income increased 13.8% from the preceding quarter, to $105.4 million.

·         Excluding the previously mentioned net impact of $21.0 million for reclassifying non-performing loans (NPLs) to held-for-sale, the provision for loan and lease losses was $17.7 million compared to $8.6 million in the preceding quarter. The increase is primarily due to higher levels of loan production, lower collateral value on certain loans, and a reserve on an impaired loan.

Non-Interest Income

·         Total bank and wealth management revenues increased 3.0%from the preceding quarter,to a record $24.0 million, reflecting the expansion of services to OFG’s larger client base.

·         Trust assets managed at June 30, 2013of $2.6 billion increased 1.7% from the preceding quarter and broker dealer assets gathered of $2.8 billion were up 1.1%,both reflecting organic growth and higher market values of customer assets.

 

 

 

 

 

·         Non-core, non-interest items totaled ($16.1) million compared to ($12.1) million in the first quarter of 2013. The difference includes the aforementioned $7.1 million in additional net amortization of the shared-loss indemnification asset related to the 2010 FDIC-assisted Eurobank acquisition.

·         Non-core, non-interest items also included the previously mentioned $2.1 million gain from the sale of OFG’s claim in the Lehman Brothers bankruptcy.

Non-Interest Expenses & Taxes

·         Operating expenses of $63.5 million increased from $61.3 million from the preceding quarter. The increase primarily reflects the$2.0 million impact for the first and second quarters’application of the new 1.0% tax on gross revenues which waspart of the Tax Code Amendments.

·         Merger and restructuring costs totaled $5.3 million as compared to $5.5 million in the preceding quarter, which included $3.7 million for the previously disclosed termination of an external loan servicing contract in the first quarter of 2013. Total integration expenses are projected to be around $8.5 million in 2013.

·         Income tax benefit of $31.9 million includes three items: (i) the previously mentioned $37.0 million benefitfrom an increase in OFG’s Deferred Tax Asset as a result of the Tax Code Amendments, which raised corporate income taxes to 39% from 30%; (ii) second quarter 2013 income taxes at OFG’s effective rate of 35.5%; and (iii) an amount to bring the first quarter 2013’s effective rate up to 35.5%, from the previously reported 25.2%.

June 30, 2013 Balance Sheet Analysis

Loans & Deposits

·         The non-covered loan portfolio declined $200.2 million, to $4.6 billion, from the first quarter of 2013 primarily due to the early pay down of some commercial loans and reclassification of the aforementioned NPLs to held-for-sale.

·         Consolidated loan production increased 19.0% from the preceding quarter, to a record $327.0 million. The foregoing reflects production increases of 41.0% in commercial loans, 31.3% in residential mortgage loans, and 17.8% in consumer loans. Auto loan production declined 6.2%, reflecting seasonal trends.

·         Net loans covered under loss share agreements with the FDIC continued to pay down, declining 2.7%, from the first quarter of 2013, to $369.4 million.

·         Deposits increased 2.9% from the preceding quarter, to a record $5.7 billion. Despite the consolidation of eight branches during the quarter, retail deposits increased 6.7% and commercial deposits increased 8.7% from the first quarter of 2013.

Investment Securities & Borrowings

 

 

 

 

 

·         Investment securities totaled $1.9 billion, down 9.2% from the first quarter of 2013, while borrowings of $1.7 billion were down 17.9%. The declines reflectOFG’s strategic decision of relying less on investment securities financed through wholesale funding as a source of net interest income.

Stockholders’ Equity

·         Total stockholders’ equity of $870.9 million was level with the first quarter of 2013 as growth in retained earnings largely offset a reduction in accumulated other comprehensive income from lower unrealized gains on investment securities.On a per common share basis, tangible book value of $13.49 compares with $13.46 in the first quarter of 2013.

Other 2Q13 Highlights

·         Credit quality, excluding acquired and covered loans, remained strong. Excluding the impact of reclassifying NPLs to held-for-sale, net credit losses of $5.0 million compare to $3.4 million in the preceding quarter. NPLs of $88.5 million declined from $130.5 million in the preceding quarter primarily due to moving non-performing residential mortgage loans, which were originated prior to 2009, to held-for-sale. The allowance for loan and lease losses as a percentage of loans held for investments increased to 2.57% from 2.89% in the preceding quarter. Credit quality of the acquired BBVA PR loans was in line with expectations.

·         Regulatory capital ratios improved across the board and continue to be above requirements for a well-capitalized institution.

·         Compared to the precedingquarter, tangible common equity to total tangible assets of 7.32% increased from 7.13%, leverage capital ratio of 8.54% increased from 8.07%, tier 1 risk-based capital ratio increased to 13.79% from 13.01%, and total risk-based capital ratio increased to 15.83% from 15.03%.

Conference Call

A conference call to discuss OFG’s resultsfor the second quarter of 2013, outlook and related matters will be held Tuesday, July 23, 2013 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.

Full Financial Tables

Full financial tables for 2Q13 can be found on the Webcasts, Presentations & Other Files page, on OFG’s Investor Relations website at www.ofgbancorp.com.

About OFG Bancorp

 

 

 

 

 

Now in its 49th year in business, OFG Bancorp is a diversified financial holding company that operates under U.S. and Puerto Rico banking laws and regulations. Its three principal subsidiaries, Oriental Bank, Oriental Financial Services and Oriental Insurance, provide a full range of commercial, consumer and mortgage banking services, as well as financial planning, trust, insurance, investment brokerage and investment banking services, primarily in Puerto Rico, through 56 financial centers. Investor information can be found at www.ofgbancorp.com.

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) difficulties in integrating the acquired Puerto Rico operations of Banco Bilbao VizcayaArgentaria, S.A (BBVA PR) into OFG’s operations; (ii) the amounts by which our assumptions related to the acquisition fail to approximate actual results; (iii) the rate of growth in the economy and employment levels, as well as general business and economic conditions; (iv) changes in interest rates, as well as the magnitude of such changes; (v) the fiscal and monetary policies of the federal government and its agencies; (vi) changes in federal bank regulatory and supervisory policies, including required levels of capital; (vii) the relative strength or weakness of the consumer and commercial credit sectors and of the real estate market in Puerto Rico; (viii) the performance of the stock and bond markets; (ix) competition in the financial services industry; (x) possible legislative, tax or regulatory changes; and (xi) difficulties in combining the operations of any other acquired entity.

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, 2012, 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.

# # #

Contacts

Puerto Rico: Alexandra López (allopez@ofgbancorp.com), OFG Bancorp, (787) 522-6970

US: Steven Anreder (steven.anreder@anreder.com) and Gary Fishman (gary.fishman@anreder.com), Anreder& Company, (212) 532-3232

 

 

 

OFGBancorp logo silver and orange.JPG 

 

 

 

 

 

 

  

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 June 30, 2013 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

 

1-2

  

 

Table  2:

 

Statements of Operations

 

3 

  

 

Table  3:

 

Statements of Financial Condition

 

4-5

  

 

Table  4:

 

Information on Loans and Production

 

6 

  

 

Table  5:

 

Average Balances, Net Interest Income and Net Interest Margin

 

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 Non-GAAP Measures and Calculation of Regulatory

 

 

  

 

 

 

  Capital Measures

 

12-13

  

 

Table  10:

 

Notes to Financial Statements, Statistical Summary, and Loan Information

 

14 

  

 

 

 

OFGBancorp logo silver and orange.JPG 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 1: Financial and Statistical Summary - Consolidated (2)(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2013

 

2013

 

2012

 

2012

 

2012

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

 

 

Q2

 

Q1

 

Q4

 

Q3

 

Q2

Earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

$

 105,369 

 

$

 92,582 

 

$

 42,904 

 

$

 40,267 

 

$

 33,156 

Non-interest income (loss), net

(4)

 

 

 7,796 

 

 

 11,133 

 

 

 (19,360) 

 

 

 13,652 

 

 

 17,836 

Total revenue

 

 

 

 113,165 

 

 

 103,715 

 

 

 23,544 

 

 

 53,919 

 

 

 50,992 

Provision for loan and lease losses

 

 

 

 38,738 

 

 

 8,588 

 

 

 4,436 

 

 

 3,821 

 

 

 5,267 

Operating expenses

 

 

 

 63,548 

 

 

 61,275 

 

 

 34,522 

 

 

 30,443 

 

 

 29,710 

Merger and restructuring charges

(5)

 

 

 5,274 

 

 

 5,534 

 

 

 4,990 

 

 

 - 

 

 

 - 

Net income (loss) before income taxes

 

 

 

 5,605 

 

 

 28,318 

 

 

 (20,404) 

 

 

 19,655 

 

 

 16,015 

Income tax expense (benefit)

(6)

 

 

 (31,934) 

 

 

 7,126 

 

 

 (1,587) 

 

 

 1,894 

 

 

 1,057 

Net income (loss)  

 

 

 

 37,539 

 

 

 21,192 

 

 

 (18,817) 

 

 

 17,761 

 

 

 14,958 

Preferred stock dividends

(7)

 

 

 (3,466) 

 

 

 (3,465) 

 

 

 (4,499) 

 

 

 (3,039) 

 

 

 (1,201) 

Net income (loss) available to common stockholders

 

 

$

 34,073 

 

$

 17,727 

 

$

 (23,316) 

 

$

 14,722 

 

$

 13,757 

Common Share Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per common share - basic

(8)

 

$

 0.75 

 

$

 0.39 

 

$

 (0.53) 

 

$

 0.36 

 

$

 0.34 

Earnings (loss) per common share - diluted

(9)

 

$

 0.68 

 

$

 0.37 

 

$

 (0.53) 

 

$

 0.35 

 

$

 0.34 

Common shares outstanding (period end)

(10)

 

 

 45,640 

 

 

 45,621 

 

 

 45,580 

 

 

 40,746 

 

 

 40,731 

Weighted average common shares and share equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Average common shares outstanding

 

 

 

 45,630 

 

 

 45,595 

 

 

 44,020 

 

 

 40,738 

 

 

 40,703 

   Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Average potential common shares-options

 

 

 

 200 

 

 

 159 

 

 

 119 

 

 

 102 

 

 

 105 

      Average potential common shares-assuming convertible preferred stock

 

 

 

 7,138 

 

 

 7,138 

 

 

 7,138 

 

 

 7,138 

 

 

 - 

   Total weighted average common shares outstanding and equivalents

 

 

 

 52,968 

 

 

 52,892 

 

 

 51,277 

 

 

 47,978 

 

 

 40,808 

Cash dividends per common share

 

 

$

 0.06 

 

$

 0.06 

 

$

 0.06 

 

$

 0.06 

 

$

 0.06 

Tangible book value per common share (period end)

(11)

 

$

 13.49 

 

$

 13.46 

 

$

 13.31 

 

$

 15.30 

 

$

 15.30 

Balance Sheet (Period End)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans held for investment

(12)

 

$

 4,960,135 

 

$

 5,168,799 

 

$

 5,148,070 

 

$

 1,601,102 

 

$

 1,627,069 

Interest-earning assets

 

 

 

 7,526,190 

 

 

 7,833,281 

 

 

 8,266,730 

 

 

 5,496,246 

 

 

 5,845,028 

Total assets

 

 

 

 8,497,851 

 

 

 8,705,445 

 

 

 9,196,262 

 

 

 6,051,655 

 

 

 6,376,164 

Interest-bearing liabilities

 

 

 

 7,462,089 

 

 

 7,677,359 

 

 

 8,177,231 

 

 

 5,193,846 

 

 

 5,606,159 

Total deposits

 

 

 

 5,726,955 

 

 

 5,563,513 

 

 

 5,689,559 

 

 

 2,214,002 

 

 

 2,223,558 

Borrowings

 

 

 

 1,735,134 

 

 

 2,113,846 

 

 

 2,487,672 

 

 

 2,979,844 

 

 

 3,382,601 

Stockholders' equity

 

 

 

 870,924 

 

 

 870,242 

 

 

 863,606 

 

 

 771,687 

 

 

 692,202 

Balance Sheet (Quarterly Average Balances)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average loans held for investment

(12)

 

$

 5,103,125 

 

$

 5,205,138 

 

$

 2,156,737 

 

$

 1,637,927 

 

$

 1,658,962 

Average interest-earning assets

 

 

 

 7,580,468 

 

 

 7,863,293 

 

 

 5,886,126 

 

 

 5,813,395 

 

 

 5,794,684 

Average total assets

 

 

 

 8,477,402 

 

 

 8,797,721 

 

 

 6,483,466 

 

 

 6,427,182 

 

 

 6,583,581 

Average interest-bearing deposits

 

 

 

 4,849,173 

 

 

 4,835,546 

 

 

 2,447,505 

 

 

 2,028,099 

 

 

 2,135,654 

Average total deposits

 

 

 

 5,616,476 

 

 

 5,602,174 

 

 

 2,732,279 

 

 

 2,212,651 

 

 

 2,246,170 

Average borrowings

 

 

 

 1,865,242 

 

 

 2,199,049 

 

 

 2,863,922 

 

 

 3,070,684 

 

 

 3,380,086 

Average stockholders' equity

 

 

 

 854,574 

 

 

 861,077 

 

 

 800,718 

 

 

 783,608 

 

 

 698,366 

Average common stockholders' equity

 

 

 

 688,704 

 

 

 695,200 

 

 

 642,556 

 

 

 642,484 

 

 

 633,028 

Average tangible common stockholders' equity

 

 

 

 598,725 

 

 

 608,694 

 

 

 625,660 

 

 

 638,682 

 

 

 629,191 

1 

 

 

OFGBancorp logo silver and orange.JPG 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 1: Financial and Statistical Summary - Consolidated (Continued) (2)(3)

 

 

 

2013

 

2013

 

2012

 

2012

 

2012

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

 

 

Q2

 

Q1

 

Q4

 

Q3

 

Q2

Performance Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income growth (quarter over quarter)

 

 

 

14%

 

 

116%

 

 

7%

 

 

21%

 

 

-15%

Non-interest income growth (quarter over quarter)

 

 

 

-30%

 

 

158%

 

 

-242%

 

 

-23%

 

 

38%

Total net revenue growth (quarter over quarter)

 

 

 

9%

 

 

341%

 

 

-56%

 

 

6%

 

 

-2%

Total net revenue margin

(13)

 

 

5.97%

 

 

5.28%

 

 

1.60%

 

 

3.71%

 

 

3.52%

Net interest margin

(14)

 

 

5.56%

 

 

4.71%

 

 

2.92%

 

 

2.77%

 

 

2.29%

Return on average assets

(15)

 

 

1.77%

 

 

0.96%

 

 

-1.16%

 

 

1.11%

 

 

0.91%

Return on average common stockholders' equity

(16)

 

 

19.79%

 

 

10.20%

 

 

-14.51%

 

 

9.17%

 

 

8.69%

Return on average tangible common stockholders' equity

(17)

 

 

22.76%

 

 

11.65%

 

 

-14.91%

 

 

9.22%

 

 

8.75%

Non-interest expense as a % of average loans held for investment

(18)

 

 

4.98%

 

 

4.71%

 

 

6.40%

 

 

7.43%

 

 

7.16%

Efficiency ratio

(19)

 

 

53.24%

 

 

57.70%

 

 

68.62%

 

 

59.11%

 

 

66.55%

Effective income tax rate

(6)

 

 

-569.74%

 

 

25.16%

 

 

7.78%

 

 

9.64%

 

 

6.60%

Full-time equivalent employees, period end

 

 

 

 1,573 

 

 

 1,565 

 

 

 1,654 

 

 

 759 

 

 

 758 

Credit Quality Metrics

(20)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Excluding acquired loans:

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Allowance for loan and lease losses

 

 

$

 45,701 

 

$

 42,334 

 

$

 39,921 

 

$

 39,120 

 

$

 37,402 

    Allowance as a % of loans held for investment

 

 

 

2.57%

 

 

2.89%

 

 

3.21%

 

 

3.29%

 

 

3.17%

    Net charge-offs

 

 

$

 32,552 

 

$

 3,383 

 

$

 2,653 

 

$

 1,882 

 

$

 3,758 

    Net charge-off rate

(21)

 

 

7.55%

 

 

0.97%

 

 

0.87%

 

 

0.63%

 

 

1.25%

    Early delinquency rate (30 - 89 days past due)

(26) (27)

 

 

2.71%

 

 

6.51%

 

 

6.44%

 

 

3.24%

 

 

3.25%

    Total delinquency rate (30 days and over)

(26) (27)

 

 

7.43%

 

 

15.08%

 

 

17.62%

 

 

12.20%

 

 

12.41%

Capital Ratios

(22)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leverage ratio

 

 

 

8.54%

 

 

8.07%

 

 

6.42%

 

 

10.91%

 

 

10.75%

Tier 1 common ratio

 

 

 

9.85%

 

 

9.20%

 

 

8.87%

 

 

31.03%

 

 

28.19%

Tier 1 risk-based capital ratio

 

 

 

13.79%

 

 

13.01%

 

 

12.70%

 

 

36.33%

 

 

33.11%

Total risk-based capital ratio

 

 

 

15.83%

 

 

15.03%

 

 

14.92%

 

 

37.63%

 

 

34.40%

Tangible common equity ("TCE") ratio

 

 

 

7.32%

 

 

7.13%

 

 

6.66%

 

 

10.31%

 

 

9.78%

2 

 

 

OFGBancorp logo silver and orange.JPG 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 2: Consolidated Statements of Operations (2)(3)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

March 31,

 

June 30,

 

June 30,

 

June 30,

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

 

 

2013

 

2013

 

2012

 

2013

 

2012

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Loans not covered under shared-loss agreements with the FDIC

 

 

$

 90,611 

 

$

 80,263 

 

$

 17,223 

 

$

 170,874 

 

$

 35,345 

    Loans covered under shared-loss agreements with the FDIC

 

 

 

 23,999 

 

 

 20,229 

 

 

 20,342 

 

 

 44,228 

 

 

 41,884 

          Total interest income from loans

 

 

 

 114,610 

 

 

 100,492 

 

 

 37,565 

 

 

 215,102 

 

 

 77,229 

Investment securities

 

 

 

 11,198 

 

 

 13,136 

 

 

 23,223 

 

 

 24,334 

 

 

 53,479 

          Total interest income

 

 

 

 125,808 

 

 

 113,628 

 

 

 60,788 

 

 

 239,436 

 

 

 130,708 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Retail deposits

 

 

 

 6,816 

 

 

 6,208 

 

 

 6,623 

 

 

 13,024 

 

 

 14,246 

    Institutional deposits

 

 

 

 2,594 

 

 

 2,621 

 

 

 411 

 

 

 5,215 

 

 

 870 

    Brokered deposits

 

 

 

 563 

 

 

 1,649 

 

 

 851 

 

 

 2,212 

 

 

 1,892 

          Total deposits

 

 

 

 9,973 

 

 

 10,478 

 

 

 7,885 

 

 

 20,451 

 

 

 17,008 

Borrowings

 

 

 

 10,466 

 

 

 10,568 

 

 

 19,747 

 

 

 21,034 

 

 

 41,558 

          Total interest expense

 

 

 

 20,439 

 

 

 21,046 

 

 

 27,632 

 

 

 41,485 

 

 

 58,566 

Net interest income

 

 

 

 105,369 

 

 

 92,582 

 

 

 33,156 

 

 

 197,951 

 

 

 72,142 

    Provision for non-covered loan and lease losses

 

 

 

 37,527 

 

 

 7,916 

 

 

 3,800 

 

 

 45,443 

 

 

 6,800 

    Provision for covered loan and lease losses, net

 

 

 

 1,211 

 

 

 672 

 

 

 1,467 

 

 

 1,883 

 

 

 8,624 

          Total provision for loan and lease losses, net

 

 

 

 38,738 

 

 

 8,588 

 

 

 5,267 

 

 

 47,326 

 

 

 15,424 

          Net interest income after provision for loan and lease losses

 

 

 

 66,631 

 

 

 83,994 

 

 

 27,889 

 

 

 150,625 

 

 

 56,718 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial services revenues

 

 

 

 8,030 

 

 

 7,660 

 

 

 5,903 

 

 

 15,690 

 

 

 11,791 

Banking service revenues

 

 

 

 13,334 

 

 

 12,382 

 

 

 3,145 

 

 

 25,716 

 

 

 6,225 

Mortgage banking activities

 

 

 

 2,525 

 

 

 3,153 

 

 

 2,436 

 

 

 5,679 

 

 

 4,938 

          Total banking and financial services revenues

 

 

 

 23,889 

 

 

 23,195 

 

 

 11,484 

 

 

 47,085 

 

 

 22,954 

FDIC shared-loss expense, net

 

 

 

 (19,965) 

 

 

 (12,871) 

 

 

 (5,583) 

 

 

 (32,836) 

 

 

 (10,410) 

Net gain (loss) on:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Sales of securities and derivative activities

 

 

 

 1,540 

 

 

 (336) 

 

 

 11,872 

 

 

 1,204 

 

 

 19,223 

    Early extinguishment of subordinated capital note

 

 

 

 - 

 

 

 1,061 

 

 

 - 

 

 

 1,061 

 

 

 - 

Other

(23)

 

 

 2,332 

 

 

 84 

 

 

 63 

 

 

 2,416 

 

 

 (772) 

          Total non-interest income, net

 

 

 

 7,796 

 

 

 11,133 

 

 

 17,836 

 

 

 18,930 

 

 

 30,995 

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

 

 

 24,089 

 

 

 23,249 

 

 

 11,184 

 

 

 47,338 

 

 

 21,550 

Rent and occupancy costs

 

 

 

 8,066 

 

 

 9,216 

 

 

 4,292 

 

 

 17,282 

 

 

 8,501 

Merger and restructuring charges

(5)

 

 

 5,274 

 

 

 5,534 

 

 

 - 

 

 

 10,808 

 

 

 - 

General and administrative expenses

 

 

 

 31,393 

 

 

 28,810 

 

 

 14,234 

 

 

 60,204 

 

 

 29,058 

          Total non-interest expense

 

 

 

 68,822 

 

 

 66,809 

 

 

 29,710 

 

 

 135,632 

 

 

 59,109 

Income before income taxes

 

 

 

 5,605 

 

 

 28,318 

 

 

 16,015 

 

 

 33,923 

 

 

 28,604 

Income tax expense (benefit)

 

 

 

 (31,934) 

 

 

 7,126 

 

 

 1,057 

 

 

 (24,808) 

 

 

 2,994 

Net income

 

 

 

 37,539 

 

 

 21,192 

 

 

 14,958 

 

 

 58,731 

 

 

 25,610 

Less:  dividends on preferred stock

 

 

 

 (3,466) 

 

 

 (3,465) 

 

 

 (1,201) 

 

 

 (6,931) 

 

 

 (2,401) 

Net income available to common shareholders

 

 

$

 34,073 

 

$

 17,727 

 

$

 13,757 

 

$

 51,800 

 

$

 23,209 

3 

 

 

OFGBancorp logo silver and orange.JPG 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

Table 3: Consolidated Statements of Financial Condition (2)(3)

 

 

 

 

 

 

 

 

June 30,

 

March 31,

 

December 31,

 

June 30,

(Dollars in thousands) (unaudited)

 

 

2013

 

2013

 

2012

 

2012

Cash and cash equivalents

 

 

$

 810,230 

 

$

 561,446 

 

$

 868,695 

 

$

 464,579 

Securities purchased under agreements to resell

 

 

 

 - 

 

 

 60,000 

 

 

 80,000 

 

 

 225,000 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading securities

 

 

 

 2,209 

 

 

 1,787 

 

 

 495 

 

 

 214 

Investment securities available-for-sale, at fair value, with amortized cost of $1,821,825

 

 

 

 

 

 

 

 

 

 

 

 

 

    (December 31, 2012 - $2,118,825, June 30, 2012 - $2,536,772):

 

 

 

 

 

 

 

 

 

 

 

 

 

    Mortgage-backed securities

 

 

 

 1,650,165 

 

 

 1,837,613 

 

 

 2,000,012 

 

 

 2,363,754 

    Other investment securities

 

 

 

 186,064 

 

 

 175,542 

 

 

 194,274 

 

 

 249,085 

          Total investment securities available-for-sale

 

 

 

 1,836,229 

 

 

 2,013,155 

 

 

 2,194,286 

 

 

 2,612,839 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

    $925,266 at June 30, 2012

 

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 895,500 

Federal Home Loan Bank (FHLB) stock, at cost

 

 

 

 22,156 

 

 

 33,458 

 

 

 38,411 

 

 

 22,868 

Other investments

 

 

 

 66 

 

 

 66 

 

 

 73 

 

 

 69 

          Total investments

 

 

 

 1,860,660 

 

 

 2,048,466 

 

 

 2,233,265 

 

 

 3,531,490 

Securities sold but not yet delivered

 

 

 

 16,732 

 

 

 - 

 

 

 - 

 

 

 - 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans not covered under shared-loss agreements with the FDIC:

 

 

 

 

 

 

 

 

 

 

 

 

 

    Commercial

 

 

 

 1,747,397 

 

 

 1,891,548 

 

 

 1,855,261 

 

 

 322,593 

    Mortgage

 

 

 

 1,536,454 

 

 

 1,592,356 

 

 

 1,598,622 

 

 

 788,184 

    Consumer

 

 

 

 238,083 

 

 

 234,895 

 

 

 235,328 

 

 

 38,548 

    Auto and Leasing

 

 

 

 1,068,821 

 

 

 1,070,266 

 

 

 1,063,552 

 

 

 30,024 

          Total loans receivable not covered under shared-loss agreements with the FDIC, gross

 

 

 

 4,590,755 

 

 

 4,789,065 

 

 

 4,752,763 

 

 

 1,179,349 

Less: Deferred loan fees, net

 

 

 

 (831) 

 

 

 (2,138) 

 

 

 (3,463) 

 

 

 (4,029) 

          Total loans receivable not covered under shared-loss agreements with the FDIC

 

 

 

 4,589,924 

 

 

 4,786,927 

 

 

 4,749,300 

 

 

 1,175,320 

Allowance for loan and lease losses on non-covered loans

 

 

 

 (46,625) 

 

 

 (42,720) 

 

 

 (39,921) 

 

 

 (37,402) 

Loans receivable held for investment, net

 

 

 

 4,543,299 

 

 

 4,744,207 

 

 

 4,709,379 

 

 

 1,137,918 

Mortgage loans held for sale

 

 

 

 78,350 

 

 

 77,644 

 

 

 64,544 

 

 

 34,718 

          Total loans not covered under shared-loss agreements with the FDIC, net

 

 

 

 4,621,649 

 

 

 4,821,851 

 

 

 4,773,923 

 

 

 1,172,636 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans covered under shared-loss agreements with the FDIC

 

 

 

 423,372 

 

 

 432,708 

 

 

 449,431 

 

 

 506,348 

Allowance for loan and lease losses on covered loans

 

 

 

 (53,992) 

 

 

 (52,974) 

 

 

 (54,124) 

 

 

 (58,628) 

Loans covered under shared-loss agreements with the FDIC, net

 

 

 

 369,380 

 

 

 379,734 

 

 

 395,307 

 

 

 447,720 

          Total loans, net

 

 

 

 4,991,029 

 

 

 5,201,585 

 

 

 5,169,230 

 

 

 1,620,356 

Other assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

FDIC shared-loss indemnification asset

 

 

 

 236,472 

 

 

 266,958 

 

 

 286,799 

 

 

 359,767 

Derivative assets

 

 

 

 19,655 

 

 

 23,233 

 

 

 21,889 

 

 

 11,367 

Prepaid expenses

 

 

 

 23,568 

 

 

 22,852 

 

 

 26,047 

 

 

 21,062 

Deferred tax asset, net

 

 

 

 155,165 

 

 

 117,875 

 

 

 122,501 

 

 

 35,887 

Foreclosed real estate and repossessed properties

 

 

 

 90,610 

 

 

 87,145 

 

 

 79,600 

 

 

 32,247 

Goodwill

 

 

 

 76,383 

 

 

 76,383 

 

 

 76,383 

 

 

 2,701 

Accounts receivable and other assets

 

 

 

 217,347 

 

 

 239,501 

 

 

 231,853 

 

 

 71,708 

Total assets

 

 

$

 8,497,851 

 

$

 8,705,444 

 

$

 9,196,262 

 

$

 6,376,164 

4 

 

 

OFGBancorp logo silver and orange.JPG 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

Table 3: Consolidated Statement of Financial Condition (Continued) (2)(3)

 

 

 

 

 

 

 

 

June 30,

 

March 31,

 

December 31,

 

June 30,

(Dollars in thousands) (unaudited)

 

 

2013

 

2013

 

2012

 

2012

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail deposits

 

 

$

 4,404,629 

 

$

 4,129,557 

 

$

 4,158,565 

 

$

 1,997,518 

Institutional deposits

 

 

 

 645,037 

 

 

 593,524 

 

 

 602,828 

 

 

 79,376 

Brokered deposits

 

 

 

 677,289 

 

 

 840,432 

 

 

 928,166 

 

 

 146,664 

          Total deposits

 

 

 

 5,726,955 

 

 

 5,563,513 

 

 

 5,689,559 

 

 

 2,223,558 

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

 

 

 - 

 

 

 60,829 

 

 

 92,210 

 

 

 - 

Securities sold under agreements to repurchase

 

 

 

 1,313,870 

 

 

 1,491,675 

 

 

 1,695,247 

 

 

 3,053,865 

Advances from FHLB and other borrowings

 

 

 

 292,872 

 

 

 433,294 

 

 

 544,276 

 

 

 292,653 

Federal funds purchased

 

 

 

 29,431 

 

 

 29,612 

 

 

 9,901 

 

 

 - 

Subordinated capital notes

 

 

 

 98,961 

 

 

 98,436 

 

 

 146,038 

 

 

 36,083 

          Total borrowings

 

 

 

 1,735,134 

 

 

 2,113,846 

 

 

 2,487,672 

 

 

 3,382,601 

Other liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

 

 

 16,701 

 

 

 24,024 

 

 

 26,260 

 

 

 56,217 

Acceptances outstanding

 

 

 

 30,571 

 

 

 32,512 

 

 

 26,996 

 

 

 27 

Accrued expenses and other liabilities

 

 

 

 117,566 

 

 

 101,307 

 

 

 102,169 

 

 

 21,559 

          Total liabilities

 

 

 

 7,626,927 

 

 

 7,835,202 

 

 

 8,332,656 

 

 

 5,683,962 

Stockholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

 

 176,000 

 

 

 176,000 

 

 

 176,000 

 

 

 68,000 

Common stock

 

 

 

 52,689 

 

 

 52,671 

 

 

 52,671 

 

 

 47,842 

Additional paid-in capital

 

 

 

 538,105 

 

 

 537,500 

 

 

 537,453 

 

 

 499,852 

Legal surplus

 

 

 

 57,906 

 

 

 54,128 

 

 

 52,143 

 

 

 52,668 

Retained earnings 

 

 

 

 111,292 

 

 

 83,739 

 

 

 70,734 

 

 

 83,982 

Treasury stock, at cost

 

 

 

 (80,834) 

 

 

 (80,847) 

 

 

 (81,275) 

 

 

 (81,403) 

Accumulated other comprehensive income, net

 

 

 

 15,766 

 

 

 47,051 

 

 

 55,880 

 

 

 21,261 

          Total stockholders' equity

 

 

 

 870,924 

 

 

 870,242 

 

 

 863,606 

 

 

 692,202 

          Total liabilities and stockholders' equity

 

 

$

 8,497,851 

 

$

 8,705,444 

 

$

 9,196,262 

 

$

 6,376,164 

5 

 

 

OFGBancorp logo silver and orange.JPG 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 4: Information on Loan Portfolio and Production

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

March 31,

 

December 31,

 

June 30,

 

 

 

(Dollars in thousands) (unaudited)

 

 

2013

 

2013

 

2012

 

2012

 

 

 

Acquired loans:

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-covered loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Acquired loans accounted for under ASC 310-30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Period-end unpaid principal balance

 

 

$

 2,445,112 

 

$

 2,776,136 

 

$

 2,914,527 

 

$

 - 

 

 

 

      Period-end loans held for investment carrying amount

 

 

 

 2,219,591 

 

 

 2,507,886 

 

 

 2,620,613 

 

 

 - 

 

 

 

      Average loans held for investment

 

 

 

 2,412,332 

 

 

 2,605,738 

 

 

 404,855 

 

 

 - 

 

 

 

   Acquired loans not accounted for under ASC 310-30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Period-end unpaid principal balance

 

 

 

 566,642 

 

 

 791,360 

 

 

 861,065 

 

 

 - 

 

 

 

      Period-end loans held for investment carrying amount

 

 

 

 591,092 

 

 

 817,896 

 

 

 889,287 

 

 

 - 

 

 

 

      Average loans held for investment

 

 

 

 592,504 

 

 

 817,691 

 

 

 130,481 

 

 

 - 

 

 

 

Covered loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Acquired loans accounted for under ASC 310-30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Period-end unpaid principal balance

 

 

 

 897,184 

 

 

 931,923 

 

 

 989,236 

 

 

 1,093,152 

 

 

 

      Period-end loans held for investment carrying amount

 

 

 

 369,380 

 

 

 379,734 

 

 

 395,307 

 

 

 447,720 

 

 

 

      Average loans held for investment

 

 

 

 374,625 

 

 

 391,154 

 

 

 408,365 

 

 

 458,325 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total acquired loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Period-end unpaid principal balance

 

 

 

 3,908,938 

 

 

 4,499,419 

 

 

 4,764,828 

 

 

 1,093,152 

 

 

 

      Period-end loans held for investment carrying amount

 

 

 

 3,180,063 

 

 

 3,705,516 

 

 

 3,905,207 

 

 

 447,720 

 

 

 

      Average loans held for investment

 

 

 

 3,379,461 

 

 

 3,814,583 

 

 

 943,701 

 

 

 458,325 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Originated and other loans held for investment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Period-end unpaid principal balance

 

 

 

 1,780,072 

 

 

 1,463,283 

 

 

 1,242,863 

 

 

 1,179,349 

 

 

 

      Period-end loans held for investment carrying amount

 

 

 

 1,780,072 

 

 

 1,463,283 

 

 

 1,242,863 

 

 

 1,179,349 

 

 

 

      Average loans held for investment

 

 

 

 1,724,216 

 

 

 1,390,555 

 

 

 1,213,036 

 

 

 1,200,637 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Period-end unpaid principal balance

 

 

$

 5,689,010 

 

$

 5,962,702 

 

$

 6,007,691 

 

$

 2,272,501 

 

 

 

      Period-end loans held for investment carrying amount

 

 

 

 4,960,135 

 

 

 5,168,799 

 

 

 5,148,070 

 

 

 1,627,069 

 

 

 

      Average loans held for investment

 

 

 

 5,103,677 

 

 

 5,205,138 

 

 

 2,156,737 

 

 

 1,658,962 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2013

 

2013

 

2012

 

2012

 

2012

(Dollars in thousands) (unaudited)

 

 

Q2

 

Q1

 

Q4

 

Q3

 

Q2

Loan production for the quarter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Mortgage

 

 

$

 101,279 

 

$

 77,124 

 

$

 61,795 

 

$

 46,985 

 

$

 48,909 

    Commercial

 

 

 

 104,345 

 

 

 74,004 

 

 

 56,270 

 

 

 43,572 

 

 

 35,461 

    Consumer

 

 

 

 26,634 

 

 

 22,614 

 

 

 9,451 

 

 

 9,528 

 

 

 7,676 

    Auto and Leasing

 

 

 

 94,737 

 

 

 100,981 

 

 

 20,011 

 

 

 6,301 

 

 

 4,350 

        Total

 

 

$

 326,995 

 

$

 274,723 

 

$

 147,527 

 

$

 106,386 

 

$

 96,396 

6 

 

 

OFGBancorp logo silver and orange.JPG 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

2013 Q2

 

2013 Q1

 

2012 Q4

 

2012 Q2

 

 

 

 

 

Interest

 

 

 

 

 

 

Interest

 

 

 

 

 

 

Interest

 

 

 

 

 

 

Interest

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Cash equivalents

 

 

$

 538,920 

 

$

 243 

 

 0.18 

%

 

$

 550,084 

 

$

 308 

 

 0.22 

%

 

$

 969,259 

 

$

 473 

 

 0.20 

%

 

$

 634,707 

 

$

 377 

 

 0.24 

%

    Investment securities

 

 

 

 1,938,423 

 

 

 10,955 

 

 2.26 

%

 

 

 2,108,071 

 

 

 12,829 

 

 2.43 

%

 

 

 2,760,130 

 

 

 16,020 

 

 2.32 

%

 

 

 3,501,015 

 

 

 22,846 

 

 2.61 

%

    Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        Loans not covered under shared-loss agreements with the FDIC

 

 

 

 4,728,500 

 

 

 90,611 

 

 7.67 

%

 

 

 4,813,984 

 

 

 80,262 

 

 6.67 

%

 

 

 1,748,372 

 

 

 26,687 

 

 6.11 

%

 

 

 1,200,637 

 

 

 17,222 

 

 5.74 

%

        Loans covered under shared-loss agreements with the FDIC

 

 

 

 374,625 

 

 

 23,999 

 

 25.62 

%

 

 

 391,154 

 

 

 20,230 

 

 20.69 

%

 

 

 408,365 

 

 

 21,209 

 

 20.77 

%

 

 

 458,325 

 

 

 20,342 

 

 17.75 

%

            Total loans

 

 

 

 5,103,125 

 

 

 114,610 

 

 8.98 

%

 

 

 5,205,138 

 

 

 100,492 

 

 7.72 

%

 

 

 2,156,737 

 

 

 47,896 

 

 8.88 

%

 

 

 1,658,962 

 

 

 37,564 

 

 9.06 

%

Total interest-earning assets

 

 

$

 7,580,468 

 

$

 125,808 

 

 6.64 

%

 

$

 7,863,293 

 

$

 113,629 

 

 5.78 

%

 

$

 5,886,126 

 

$

 64,389 

 

 4.38 

%

 

$

 5,794,684 

 

$

 60,787 

 

 4.20 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        Retail deposits

 

 

$

 4,104,437 

 

$

 9,430 

 

 0.92 

%

 

$

 4,144,991 

 

$

 10,594 

 

 1.02 

%

 

$

 2,325,640 

 

$

 6,150 

 

 1.06 

%

 

$

 1,983,581 

 

$

 6,559 

 

 1.32 

%

        Institutional deposits

 

 

 

 653,270 

 

 

 2,664 

 

 1.63 

%

 

 

 601,044 

 

 

 2,695 

 

 1.79 

%

 

 

 149,055 

 

 

 623 

 

 1.67 

%

 

 

 95,382 

 

 

 506 

 

 2.12 

%

        Brokered deposits

 

 

 

 858,769 

 

 

 1,790 

 

 0.83 

%

 

 

 856,139 

 

 

 1,989 

 

 0.93 

%

 

 

 257,584 

 

 

 975 

 

 1.51 

%

 

 

 167,207 

 

 

 851 

 

 2.04 

%

 

 

 

 

 5,616,476 

 

 

 13,884 

 

 0.99 

%

 

 

 5,602,174 

 

 

 15,278 

 

 1.09 

%

 

 

 2,732,279 

 

 

 7,748 

 

 1.13 

%

 

 

 2,246,170 

 

 

 7,916 

 

 1.41 

%

        Deposit fair value premium amortization

 

 

 

 - 

 

 

 (4,326) 

 

 - 

 

 

 

 - 

 

 

 (5,215) 

 

 - 

 

 

 

 - 

 

 

 (279) 

 

 - 

 

 

 

 - 

 

 

 (67) 

 

 - 

 

        Core deposit intangible amortization

 

 

 

 - 

 

 

 415 

 

 - 

 

 

 

 - 

 

 

 414 

 

 - 

 

 

 

 - 

 

 

 90 

 

 - 

 

 

 

 - 

 

 

 36 

 

 - 

 

            Total deposits

 

 

 

 5,616,476 

 

 

 9,973 

 

 0.71 

%

 

 

 5,602,174 

 

 

 10,477 

 

 0.75 

%

 

 

 2,732,279 

 

 

 7,559 

 

 1.11 

%

 

 

 2,246,170 

 

 

 7,885 

 

 1.40 

%

Borrowings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        Securities sold under agreements to repurchase

 

 

 

 1,356,856 

 

 

 7,109 

 

 2.10 

%

 

 

 1,524,876 

 

 

 7,248 

 

 1.90 

%

 

 

 2,449,922 

 

 

 11,161 

 

 1.82 

%

 

 

 3,057,598 

 

 

 16,500 

 

 2.16 

%

        Advances from FHLB and other borrowings

 

 

 

 409,742 

 

 

 2,187 

 

 2.14 

%

 

 

 529,499 

 

 

 1,660 

 

 1.25 

%

 

 

 361,381 

 

 

 2,258 

 

 2.50 

%

 

 

 286,405 

 

 

 2,926 

 

 4.09 

%

        Subordinated capital notes

 

 

 

 98,644 

 

 

 1,170 

 

 4.74 

%

 

 

 144,674 

 

 

 1,660 

 

 4.59 

%

 

 

 52,619 

 

 

 507 

 

 3.85 

%

 

 

 36,083 

 

 

 321 

 

 3.56 

%

            Total borrowings

 

 

 

 1,865,242 

 

 

 10,466 

 

 2.24 

%

 

 

 2,199,049 

 

 

 10,568 

 

 1.92 

%

 

 

 2,863,922 

 

 

 13,926 

 

 1.95 

%

 

 

 3,380,086 

 

 

 19,747 

 

 2.34 

%

Total interest-bearing liabilities

 

 

$

 7,481,718 

 

$

 20,439 

 

 1.09 

%

 

$

 7,801,223 

 

$

 21,045 

 

 1.08 

%

 

$

 5,596,201 

 

$

 21,485 

 

 1.54 

%

 

$

 5,626,256 

 

$

 27,632 

 

 1.96 

%

Interest rate spread

 

 

 

 

 

$

 105,369 

 

 5.55 

%

 

 

 

 

$

 92,584 

 

 4.70 

%

 

 

 

 

$

 42,904 

 

 2.84 

%

 

 

 

 

$

 33,155 

 

 2.24 

%

Interest rate margin

 

 

 

 

 

 

 

 

 5.56 

%

 

 

 

 

 

 

 

 4.71 

%

 

 

 

 

 

 

 

 2.92 

%

 

 

 

 

 

 

 

 2.29 

%

7 

 

 

OFGBancorp logo silver and orange.JPG 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

2013

 

2013

 

2012

 

2012

 

2012

(Dollars in thousands) (unaudited)

 

 

Q2

 

Q1

 

Q4

 

Q3

 

Q2

Net Charge-offs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

(24)

 

$

 29,119 

 

$

 2,588 

 

$

 1,871 

 

$

 1,752 

 

$

 1,948 

  Recoveries

 

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 (131) 

 

 

 - 

      Total mortgage

 

 

 

 29,119 

 

 

 2,588 

 

 

 1,871 

 

 

 1,621 

 

 

 1,948 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

 

 

 

 2,887 

 

 

 557 

 

 

 658 

 

 

 65 

 

 

 1,721 

  Recoveries

 

 

 

 (234) 

 

 

 (28) 

 

 

 (27) 

 

 

 (28) 

 

 

 (34) 

      Total commercial

 

 

 

 2,653 

 

 

 529 

 

 

 631 

 

 

 37 

 

 

 1,687 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

 

 

 

 323 

 

 

 246 

 

 

 176 

 

 

 198 

 

 

 182 

  Recoveries

 

 

 

 (43) 

 

 

 (65) 

 

 

 (41) 

 

 

 (46) 

 

 

 (55) 

      Total consumer

 

 

 

 280 

 

 

 181 

 

 

 135 

 

 

 152 

 

 

 127 

Auto and Leasing:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

 

 

 

 709 

 

 

 91 

 

 

 35 

 

 

 74 

 

 

 - 

  Recoveries

 

 

 

 (209) 

 

 

 (6) 

 

 

 (19) 

 

 

 (2) 

 

 

 (4) 

      Total auto and leasing

 

 

 

 500 

 

 

 85 

 

 

 16 

 

 

 72 

 

 

 (4) 

          Total

 

 

$

 32,552 

 

$

 3,383 

 

$

 2,653 

 

$

 1,882 

 

$

 3,758 

Net Charge-off Rates

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

 

14.39%

 

 

1.26%

 

 

0.93%

 

 

0.80%

 

 

0.95%

Commercial

 

 

 

1.65%

 

 

0.51%

 

 

0.76%

 

 

0.05%

 

 

2.17%

Consumer

 

 

 

1.40%

 

 

1.27%

 

 

1.17%

 

 

1.43%

 

 

1.28%

Auto and Leasing

 

 

 

1.05%

 

 

0.34%

 

 

0.18%

 

 

0.92%

 

 

-0.06%

          Total

 

 

 

7.55%

 

 

0.97%

 

 

0.87%

 

 

0.63%

 

 

1.25%

Period-end Loans Held For Investment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Traditional, Non traditional, and Loans under Loss Mitigation

 

 

$

 722,785 

 

$

 780,729 

 

$

 764,401 

 

$

 771,734 

 

$

 788,184 

    GNMA's buy-back option program

 

 

 

 32,513 

 

 

 20,190 

 

 

 25,676 

 

 

 - 

 

 

 - 

        Total mortgage

 

 

 

 755,298 

 

 

 800,919 

 

 

 790,077 

 

 

 771,734 

 

 

 788,184 

Commercial

 

 

 

 702,074 

 

 

 450,312 

 

 

 353,930 

 

 

 338,364 

 

 

 322,593 

Consumer

 

 

 

 89,608 

 

 

 65,363 

 

 

 48,136 

 

 

 43,643 

 

 

 38,548 

Auto and Leasing

 

 

 

 233,092 

 

 

 146,689 

 

 

 50,720 

 

 

 33,772 

 

 

 30,024 

        Total

 

 

$

 1,780,072 

 

$

 1,463,283 

 

$

 1,242,863 

 

$

 1,187,513 

 

$

 1,179,349 

Average Loans Held For Investment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

$

 809,690 

 

$

 819,941 

 

$

 801,516 

 

$

 808,949 

 

$

 821,807 

Commercial

 

 

 

 644,175 

 

 

 414,985 

 

 

 330,539 

 

 

 317,888 

 

 

 311,299 

Consumer

 

 

 

 80,222 

 

 

 56,877 

 

 

 46,128 

 

 

 42,382 

 

 

 39,623 

Auto and Leasing

 

 

 

 190,129 

 

 

 98,752 

 

 

 34,853 

 

 

 31,426 

 

 

 27,908 

        Total

 

 

$

 1,724,216 

 

$

 1,390,555 

 

$

 1,213,036 

 

$

 1,200,645 

 

$

 1,200,637 

8 

 

 

OFGBancorp logo silver and orange.JPG 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

2013

 

2013

 

2012

 

2012

 

2012

(Dollars in thousands) (unaudited)

 

 

Q2

 

Q1

 

Q4

 

Q3

 

Q2

Early Delinquency (30 - 89 days past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

(26) (27)

 

$

 23,622 

 

$

 87,147 

 

$

 68,898 

 

$

 35,284 

 

$

 33,702 

Commercial

 

 

 

 12,804 

 

 

 4,069 

 

 

 9,866 

 

 

 1,916 

 

 

 3,609 

Consumer

 

 

 

 835 

 

 

 680 

 

 

 839 

 

 

 624 

 

 

 456 

Auto and Leasing

 

 

 

 10,901 

 

 

 3,313 

 

 

 381 

 

 

 688 

 

 

 553 

        Total

 

 

$

 48,162 

 

$

 95,209 

 

$

 79,984 

 

$

 38,512 

 

$

 38,320 

Early Delinquency Rates (30 - 89 days past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

(26) (27)

 

 

3.13%

 

 

10.88%

 

 

8.72%

 

 

4.57%

 

 

4.28%

Commercial

 

 

 

1.82%

 

 

0.90%

 

 

2.79%

 

 

0.57%

 

 

1.12%

Consumer

 

 

 

0.93%

 

 

1.04%

 

 

1.74%

 

 

1.43%

 

 

1.18%

Auto and Leasing

 

 

 

4.68%

 

 

2.26%

 

 

0.75%

 

 

2.04%

 

 

1.84%

        Total

 

 

 

2.71%

 

 

6.51%

 

 

6.44%

 

 

3.24%

 

 

3.25%

Total Delinquency (30 days and over past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage:

(26) (27)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Traditional, Non traditional, and Loans under Loss Mitigation

 

 

$

 60,346 

 

$

 168,357 

 

$

 163,931 

 

$

 123,181 

 

$

 124,004 

    GNMA's buy-back option program

 

 

 

 32,513 

 

 

 20,190 

 

 

 25,676 

 

 

 - 

 

 

 - 

        Total mortgage

 

 

 

 92,859 

 

 

 188,547 

 

 

 189,607 

 

 

 123,181 

 

 

 124,004 

Commercial

 

 

 

 26,251 

 

 

 27,714 

 

 

 27,580 

 

 

 20,109 

 

 

 20,992 

Consumer

 

 

 

 1,205 

 

 

 1,021 

 

 

 1,248 

 

 

 879 

 

 

 737 

Auto and Leasing

 

 

 

 11,997 

 

 

 3,385 

 

 

 511 

 

 

 699 

 

 

 630 

        Total

 

 

$

 132,312 

 

$

 220,667 

 

$

 218,946 

 

$

 144,869 

 

$

 146,363 

Total Delinquency Rates (30 days and over past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage:

(26) (27)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Traditional, Non traditional, and Loans under Loss Mitigation

 

 

 

7.99%

 

 

21.02%

 

 

20.75%

 

 

15.96%

 

 

15.73%

    GNMA's buy-back option program

 

 

 

4.30%

 

 

2.52%

 

 

3.25%

 

 

0.00%

 

 

0.00%

        Total mortgage

 

 

 

12.29%

 

 

23.54%

 

 

24.00%

 

 

15.96%

 

 

15.73%

Commercial

 

 

 

3.74%

 

 

6.15%

 

 

7.79%

 

 

5.94%

 

 

6.51%

Consumer

 

 

 

1.34%

 

 

1.56%

 

 

2.59%

 

 

2.01%

 

 

1.91%

Auto and Leasing

 

 

 

5.15%

 

 

2.31%

 

 

1.01%

 

 

2.07%

 

 

2.10%

        Total

 

 

 

7.43%

 

 

15.08%

 

 

17.62%

 

 

12.20%

 

 

12.41%

Nonperforming Assets

(25)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

(26) (27)

 

$

 55,667 

 

$

 99,110 

 

$

 115,002 

 

$

 87,896 

 

$

 90,302 

Commercial

 

 

 

 32,430 

 

 

 30,756 

 

 

 29,506 

 

 

 29,649 

 

 

 29,888 

Consumer

 

 

 

 324 

 

 

 371 

 

 

 442 

 

 

 276 

 

 

 281 

Auto and Leasing

 

 

 

 35 

 

 

 219 

 

 

 131 

 

 

 11 

 

 

 77 

        Total nonperforming loans

 

 

 

 88,456 

 

 

 130,456 

 

 

 145,081 

 

 

 117,832 

 

 

 120,548 

Foreclosed real estate

 

 

 

 18,995 

 

 

 19,025 

 

 

 17,380 

 

 

 17,765 

 

 

 17,721 

Other repossessed assets

 

 

 

 99 

 

 

 52 

 

 

 24 

 

 

 97 

 

 

 51 

Mortgage loans held for sale

 

 

 

 26,586 

 

 

 - 

 

 

 319 

 

 

 1,247 

 

 

 1,418 

        Total nonperforming assets

 

 

$

 134,136 

 

$

 149,533 

 

$

 162,804 

 

$

 136,941 

 

$

 139,738 

Nonperforming Loan Rates

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

(26) (27)

 

 

7.37%

 

 

12.37%

 

 

14.56%

 

 

11.39%

 

 

11.46%

Commercial

 

 

 

4.62%

 

 

6.83%

 

 

8.34%

 

 

8.76%

 

 

9.26%

Consumer

 

 

 

0.36%

 

 

0.57%

 

 

0.92%

 

 

0.63%

 

 

0.73%

Auto and Leasing

 

 

 

0.02%

 

 

0.15%

 

 

0.26%

 

 

0.03%

 

 

0.26%

        Total loans

 

 

 

4.97%

 

 

8.92%

 

 

11.67%

 

 

9.92%

 

 

10.22%

9 

 

 

OFGBancorp logo silver and orange.JPG 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 7: Allowance for Loan and Lease Losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter ended June 30, 2013

 

 

 

 

 

 

 

 

 

Auto and

 

 

 

 

(Dollars in thousands) (unaudited)

 

 

Mortgage

 

Commercial

 

Consumer

 

Leasing

 

Unallocated

 

Total

Non-covered loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Originated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

 22,889 

 

$

 16,314 

 

$

 1,313 

 

$

 1,741 

 

$

 77 

 

$

 42,334 

Provision for loan and lease losses

 

 

 

 27,606 

 

 

 3,962 

 

 

 1,308 

 

 

 2,400 

 

 

 643 

 

 

 35,919 

Charge-offs

 

 

 

 (29,120) 

 

 

 (2,886) 

 

 

 (323) 

 

 

 (709) 

 

 

 - 

 

 

 (33,038) 

Recoveries

 

 

 

 - 

 

 

 234 

 

 

 43 

 

 

 209 

 

 

 - 

 

 

 486 

    Balance at end of period

 

 

$

 21,375 

 

$

 17,624 

 

$

 2,341 

 

$

 3,641 

 

$

 720 

 

$

 45,701 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

 - 

 

$

 386 

 

$

 - 

 

$

 - 

 

$

 - 

 

$

 386 

Provision for loan and lease losses

 

 

 

 - 

 

 

 563 

 

 

 521 

 

 

 524 

 

 

 - 

 

 

 1,608 

Charge-offs

 

 

 

 - 

 

 

 (25) 

 

 

 (1,158) 

 

 

 (1,410) 

 

 

 - 

 

 

 (2,593) 

Recoveries

 

 

 

 - 

 

 

 - 

 

 

 637 

 

 

 886 

 

 

 - 

 

 

 1,523 

    Balance at end of period

 

 

$

 - 

 

$

 924 

 

$

 - 

 

$

 - 

 

$

 - 

 

$

 924 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total non-covered loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

 22,889 

 

$

 16,700 

 

$

 1,313 

 

$

 1,741 

 

$

 77 

 

$

 42,720 

Provision for loan and lease losses

 

 

 

 27,606 

 

 

 4,525 

 

 

 1,829 

 

 

 2,924 

 

 

 643 

 

 

 37,527 

Charge-offs

(24)

 

 

 (29,120) 

 

 

 (2,911) 

 

 

 (1,481) 

 

 

 (2,119) 

 

 

 - 

 

 

 (35,631) 

Recoveries

 

 

 

 - 

 

 

 234 

 

 

 680 

 

 

 1,095 

 

 

 - 

 

 

 2,009 

    Balance at end of period

 

 

$

 21,375 

 

$

 18,548 

 

$

 2,341 

 

$

 3,641 

 

$

 720 

 

$

 46,625 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Covered loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

 3,836 

 

$

 48,460 

 

$

 678 

 

$

 - 

 

$

 - 

 

$

 52,974 

Provision for loan and lease losses, net

 

 

 

 172 

 

 

 1,039 

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 1,211 

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

 

 

 

 (193) 

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 (193) 

    Balance at end of period

 

 

$

 3,815 

 

$

 49,499 

 

$

 678 

 

$

 - 

 

$

 - 

 

$

 53,992 

10 

 

 

OFGBancorp logo silver and orange.JPG 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 8: Accretable Yield on Loans Accounted for Under ASC 310-30

 

 

 

Quarter ended June 30, 2013

(Dollars in thousands) (unaudited)

 

 

Mortgage

 

Commercial

 

Construction

 

Auto

 

Consumer

 

Total

Accretable Yield and Non-Accretable Discount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Covered Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accretable Yield

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

 271,253 

 

$

 121,996 

 

$

 27,866 

 

$

 97,117 

 

$

 24,509 

 

$

 542,741 

Accretion

 

 

 

 (11,138) 

 

 

 (17,452) 

 

 

 (9,276) 

 

 

 (13,538) 

 

 

 (3,023) 

 

 

 (54,427) 

Transfers from non-accretable discount

 

 

 

 - 

 

 

 1,704 

 

 

 6,043 

 

 

 - 

 

 

 - 

 

 

 7,747 

    Balance at end of period

 

 

$

 260,115 

 

$

 106,248 

 

$

 24,633 

 

$

 83,579 

 

$

 21,486 

 

$

 496,061 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Accretable Discount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

 519,945 

 

$

 59,168 

 

$

 56,760 

 

$

 72,470 

 

$

 24,783 

 

$

 733,126 

Principal losses

 

 

 

 (2,618) 

 

 

 (3,331) 

 

 

 (1,988) 

 

 

 (3,108) 

 

 

 (693) 

 

 

 (11,738) 

Transfers to accretable yield

 

 

 

 - 

 

 

 (1,704) 

 

 

 (6,043) 

 

 

 - 

 

 

 - 

 

 

 (7,747) 

    Balance at end of period

 

 

$

 517,327 

 

$

 54,133 

 

$

 48,729 

 

$

 69,362 

 

$

 24,090 

 

$

 713,641 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction &

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Development

 

 

 

 

 

 

 

 

 

 

 

 

Loans Secured

 

 

 

 

Secured by

 

 

 

 

 

 

 

 

 

 

 

 

by 1-4 Family

 

Commercial

 

1-4 Family

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

and Other

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

Properties

 

Construction

 

Properties

 

Leasing

 

Consumer

 

Total

Covered Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accretable Yield

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

 54,617 

 

$

 95,667 

 

$

 6,284 

 

$

 14,994 

 

$

 2,545 

 

$

 174,107 

Accretion

 

 

 

 (4,943) 

 

 

 (14,697) 

 

 

 (894) 

 

 

 (3,260) 

 

 

 (205) 

 

 

 (23,999) 

Transfers from non-accretable discount

 

 

 

 819 

 

 

 13,906 

 

 

 (998) 

 

 

 3,289 

 

 

 8 

 

 

 17,024 

    Balance at end of period

 

 

$

 50,493 

 

$

 94,876 

 

$

 4,392 

 

$

 15,023 

 

$

 2,348 

 

$

 167,132 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Accretable Discount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

 61,500 

 

$

 136,576 

 

$

 (936) 

 

$

 6,488 

 

$

 10,608 

 

$

 214,236 

Principal losses

 

 

 

 (178) 

 

 

 (4,937) 

 

 

 (62) 

 

 

 161 

 

 

 63 

 

 

 (4,953) 

Transfers to accretable yield

 

 

 

 (819) 

 

 

 (13,906) 

 

 

 998 

 

 

 (3,289) 

 

 

 (8) 

 

 

 (17,024) 

    Balance at end of period

 

 

$

 60,503 

 

$

 117,733 

 

$

 - 

 

$

 3,360 

 

$

 10,663 

 

$

 192,259 

11 

 

 

OFGBancorp logo silver and orange.JPG 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

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 average tangible common equity, 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2013

 

2013

 

2012

 

2012

 

2012

(Dollars in thousands) (unaudited)

 

 

Q2

 

Q1

 

Q4

 

Q3

 

Q2

Average Equity to Non-GAAP Average Tangible Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total stockholders' equity

 

 

$

 854,574 

 

$

 861,077 

 

$

 800,718 

 

$

 783,608 

 

$

 698,366 

Less:  Average noncumulative perpetual preferred stock

 

 

 

 (176,000) 

 

 

 (176,000) 

 

 

 (166,933) 

 

 

 (148,387) 

 

 

 (68,000) 

           Average noncumulative perpetual preferred stock issuance costs

 

 

 

 10,130 

 

 

 10,123 

 

 

 8,771 

 

 

 7,263 

 

 

 2,662 

Average total common stockholders' equity

 

 

 

 688,704 

 

 

 695,200 

 

 

 642,556 

 

 

 642,484 

 

 

 633,028 

Less:  Average intangible assets

 

 

 

 (89,979) 

 

 

 (86,506) 

 

 

 (16,896) 

 

 

 (3,802) 

 

 

 (3,837) 

Average tangible common equity

 

 

$

 598,725 

 

$

 608,694 

 

$

 625,660 

 

$

 638,682 

 

$

 629,191 

Stockholders' Equity to Non-GAAP Tangible Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

 

$

 870,924 

 

$

 870,242 

 

$

 863,606 

 

$

 771,687 

 

$

 692,202 

Less:  Intangible assets

 

 

 

 (89,584) 

 

 

 (90,229) 

 

 

 (90,872) 

 

 

 (3,780) 

 

 

 (3,815) 

           Noncumulative perpetual preferred stock

 

 

 

 (176,000) 

 

 

 (176,000) 

 

 

 (176,000) 

 

 

 (152,000) 

 

 

 (68,000) 

           Noncumulative perpetual preferred stock issuance costs

 

 

 

 10,130 

 

 

 10,131 

 

 

 10,115 

 

 

 7,639 

 

 

 2,662 

Tangible common equity

 

 

$

 615,470 

 

$

 614,144 

 

$

 606,849 

 

$

 623,546 

 

$

 623,049 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock outstanding at end of period

 

 

 

 45,640 

 

 

 45,621 

 

 

 45,580 

 

 

 40,746 

 

 

 40,731 

Tangible book value

 

 

$

 13.49 

 

$

 13.46 

 

$

 13.31 

 

$

 15.30 

 

$

 15.30 

Total Assets to Tangible Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets  

 

 

$

 8,497,851 

 

$

 8,705,445 

 

$

 9,196,262 

 

$

 6,051,655 

 

$

 6,376,164 

Less:  Intangible assets

 

 

 

 (89,584) 

 

 

 (90,229) 

 

 

 (90,872) 

 

 

 (3,780) 

 

 

 (3,815) 

Tangible assets

 

 

$

 8,408,267 

 

$

 8,615,216 

 

$

 9,105,390 

 

$

 6,047,875 

 

$

 6,372,349 

Non-GAAP TCE Ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity

 

 

$

 615,470 

 

$

 614,144 

 

$

 606,849 

 

$

 623,546 

 

$

 623,049 

Tangible assets

 

 

 

 8,408,267 

 

 

 8,615,216 

 

 

 9,105,390 

 

 

 6,047,875 

 

 

 6,372,349 

TCE ratio

 

 

 

7.32%

 

 

7.13%

 

 

6.66%

 

 

10.31%

 

 

9.78%

12 

 

 

OFGBancorp logo silver and orange.JPG 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

2013

 

2013

 

2012

 

2012

 

2012

(Dollars in thousands) (unaudited)

 

 

Q2

 

Q1

 

Q4

 

Q3

 

Q2

Regulatory Capital Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

 

$

 870,924 

 

$

 870,242 

 

$

 863,606 

 

$

 771,687 

 

$

 692,202 

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

 

 

 

 (25,400) 

 

 

 (58,393) 

 

 

 (68,245) 

 

 

 (60,098) 

 

 

 (70,700) 

            Unrealized losses on cash flow hedges, net of income tax

 

 

 

 9,634 

 

 

 11,342 

 

 

 12,365 

 

 

 51,035 

 

 

 49,439 

            Disallowed goodwill and other intangible assets

 

 

 

 (89,584) 

 

 

 (90,229) 

 

 

 (90,872) 

 

 

 (3,780) 

 

 

 (3,815) 

            Disallowed deferred tax assets

 

 

 

 (96,472) 

 

 

 (80,384) 

 

 

 (85,010) 

 

 

 (26,322) 

 

 

 (25,370) 

            Disallowed servicing assets

 

 

 

 (1,299) 

 

 

 (1,155) 

 

 

 (1,079) 

 

 

 (1,064) 

 

 

 (1,073) 

            Noncumulative perpetual preferred stock

 

 

 

 (176,000) 

 

 

 (176,000) 

 

 

 (176,000) 

 

 

 (152,000) 

 

 

 (68,000) 

            Noncumulative perpetual preferred stock issuance costs

 

 

 

 10,130 

 

 

 10,131 

 

 

 10,115 

 

 

 7,639 

 

 

 2,662 

Tier 1 common equity capital

 

 

 

 501,933 

 

 

 485,554 

 

 

 464,880 

 

 

 587,097 

 

 

 575,345 

Plus:  Qualifying noncumulative perpetual preferred stock

 

 

 

 176,000 

 

 

 176,000 

 

 

 176,000 

 

 

 68,000 

 

 

 68,000 

            Qualifying noncumulative perpetual preferred stock issuance costs

 

 

 

 (10,130) 

 

 

 (10,131) 

 

 

 (10,115) 

 

 

 (2,662) 

 

 

 (2,662) 

            Subordinated capital notes

 

 

 

 35,000 

 

 

 35,000 

 

 

 35,000 

 

 

 35,000 

 

 

 35,000 

Tier 1 capital

 

 

 

 702,803 

 

 

 686,423 

 

 

 665,765 

 

 

 687,435 

 

 

 675,683 

Plus:  Long-term debt qualifying as Tier 2 capital

 

 

 

 40,200 

 

 

 40,200 

 

 

 50,200 

 

 

 - 

 

 

 - 

            Qualifying allowance for loan and lease losses

 

 

 

 64,188 

 

 

 66,335 

 

 

 65,868 

 

 

 24,551 

 

 

 26,357 

Tier 2 capital

 

 

 

 104,388 

 

 

 106,535 

 

 

 116,068 

 

 

 24,551 

 

 

 26,357 

Total risk-based capital

 

 

$

 807,191 

 

$

 792,958 

 

$

 781,833 

 

$

 711,986 

 

$

 702,040 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk-weighted assets

 

 

$

 5,097,725 

 

$

 5,276,992 

 

$

 5,240,861 

 

$

 1,892,021 

 

$

 2,040,600 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leverage ratio

 

 

 

8.54%

 

 

8.07%

 

 

6.42%

 

 

10.91%

 

 

10.75%

Tier 1 common ratio

 

 

 

9.85%

 

 

9.20%

 

 

8.87%

 

 

31.03%

 

 

28.19%

Tier 1 risk-based capital ratio

 

 

 

13.79%

 

 

13.01%

 

 

12.70%

 

 

36.33%

 

 

33.11%

Total risk-based capital ratio

 

 

 

15.83%

 

 

15.03%

 

 

14.92%

 

 

37.63%

 

 

34.40%

13 

 

 

OFGBancorp logo silver and orange.JPG 

 

OFG Bancorp (NYSE: OFG)

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

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

(2)

Certain prior period amounts have been reclassified to conform to the current period presentation.

(3)

Results for Q4 2012 and thereafter include the impact of the December 18, 2012 acquisition of BBVAPR, which resulted in the addition of loans of $3.56 billion, other assets of $1.27 billion, and deposits of $3.50 billion at acquisition.

(4)

Results for Q4 2012 include $22.9 million net loss from implementation of the second phase of the deleveraging plan in connection with the acquisition of BBVAPR Companies. During 4Q12, Oriental sold $486 million in investment securities and paid down or early extinguished $957 million of repurchase agreement funding (repos).

(5)

Results for Q4 2012 and thereafter include merger and restructuring expenses, which include (1) planned integration and other activities related to the BBVAPR acquisition, and (2) organizational restructuring initiatives. The total acquisition related expense for 2013 is estimated to be around $8 million.

(6)

Tax benefit for Q2 2013 includes three items:  (i) $35.7 million gain from an increase in OFG's Deferred Tax Asset as a result of the Tax Amendments, which raised corporate income taxes to 39% from 30%; (ii) Q2 2013 income taxes at OFG's effective tax rate of 35.5%; and (iii) an amount to bring the Q1 2013 effective rate up to 35.5%, from the previously recorded 25.2%.

(7)

Preferred stock dividends in Q3 2012 and thereafter include new dividends on preferred shares sold in Q3 2012 and Q4 2012 as part of the Company’s capital raise plan for the BBVAPR acquisition.

(8)

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

(9)

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.

(10)

Common shares outstanding in Q4 2012 and thereafter include 4.8 million of common shares sold in Q4 2012 as part of the Company’s capital raise plan for the BBVAPR acquisition.

(11)

Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding.

See "Table 11: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.

(12)

Information includes all loans, including all acquired loans in the BBVA PR acquisition and in the Eurobank FDIC-Assisted acquisition. Acquired loans, including those accounted for under ASC 310-30, are disclosed at carrying amount.

(13)

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

(14)

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

(15)

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

(16)

Calculated based on annualized net income available to common stockholders for the period divided by average common stockholders' equity for the period.

(17)

Calculated based on annualized income available to common shareholders for the period divided by average tangible common equity for the period.  See "Table 9: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.

(18)

Calculated based on annualized non-interest expense for the period, excluding merger and restructuring charges, divided by average loans held for investment for the period.

(19)

Calculated based on non-interest expense, excluding merger and restructuring charges, for the period divided by total net interest income and total banking and wealth management revenues for the period.

(20)

The Company sells most of its conforming mortgages in the secondary market and retains servicing rights.

(21)

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

(22)

TCE ratio is a non-GAAP capital ratio. See "Table 9: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for information on the calculation of each of these ratios.

(23)

Results for Q2 2013 includes $2.1 million gain from the sale of OFG's claim in the Lehman Brothers bankruptcy.

(24)

Results for Q2 2013 includes $27.0 million charge-offs due to the reclassification to held-for-sale of non-performing residential mortgage loans with unpaid principal balance of $59.0 million.

(25)

Loans accounted for under ASC 310-30 (Loans acquired with deteriorated credit quality, including those by analogy), including covered 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.

(26)

Ratios for Q2 2013 do not include $59.0 million of non-performing residential mortgage loans reclassified to held-for-sale during the quarter.

(27)

Delinquency is based on calendar days. This may cause fluctuations from quarter to quarter in the delinquency of mortgage loans, depending in the amount of days in each month.
                         

 

14