Exhibit 99
OFG Bancorp Reports 3Q13 Results
SAN JUAN, Puerto Rico, October 28, 2013 – OFG Bancorp (NYSE: OFG) reported today results for the third quarter ended September 30, 2013.
3Q13 Financial Summary
· Continued strong core performance in the third quarter of 2013, with income available to common shareholders of $16.2 million, equal to $0.34 per share diluted; net interest margin (NIM) of 5.31%; and tangible book value per common share increased $0.20, to $13.47.
· In the second quarter of 2013, income available to common shareholders was $34.1 million, or $0.68 per share diluted, which included a net positive impact of $0.43 per share from a $37.0 million tax benefit due to an increase in deferred tax assets, and a $21.0 million increase in loan loss provision due to reclassification of non-performing loans to held-for-sale.
· In the year ago third quarter, income available to common shareholders was $14.7 million, or $0.35 per share diluted, which included a significantly lower tax rate and a $10.3 million net gain on the sale of securities in connection with OFG’s deleveraging in anticipation of its acquisition of Banco Bilbao Vizcaya Argentaria’s Puerto Rico (BBVA PR) operations.
· For the nine months ended September 30, 2013, income available to common shareholders increased to $68.0 million, or $1.39 per share diluted, compared to $37.9 million, or $0.92 per share, in the year ago period.
CEO’s Comment
“We are pleased to report that we continued to produce strong core results in the third quarter,” said José Rafael Fernández, President, Chief Executive Officer and Vice Chairman of the Board. “Growing recognition of our solid track record for consistent, quality service in retail and commercial banking and financial services is resulting in our gaining an important and strong market position in Puerto Rico.
“During the quarter, we saw high levels of loan income and production, along with continued strength in retail deposits and fee business. Our NIM is among the best in the industry, and we significantly enhanced credit quality, selling virtually all non-performing residential mortgage loans originated prior to 2010.
“As we announced recently, we completed the conversion of all former BBVA PR businesses to our state-of-the-art technology platform in line with our original integration plan. This will enable us to roll out new, technology-enhanced products and services to our current and target customer base, such as the recently introduced Cuenta Libre (‘Freedom Account’) for online and mobile customers.
“Puerto Rico economic conditions continue to be challenging, as they have been for the last few years. However, given our earnings trajectory, we are confident we’ll exceed our 2013 guidance of $1.55 GAAP EPS.”
3Q13 Income Statement Analysis
Net Interest Income
· Total interest income of $120.6 million declined $5.2 million from the preceding quarter, which benefitted from the prepayment of a large acquired loan; other purchase accounting adjustments; and cost recovery of a large covered loan.
· Total interest expense of $22.0 million increased $2.0 million from the preceding quarter, which included higher deposit premium amortization from acquired certificates of deposit that matured earlier this year. Excluding this, cost of deposits declined to 0.94% from 0.96%.
· Provision for non-covered loan losses of $9.9 million declined $27.6 million from the preceding quarter, which included the previously mentioned $21.0 million for reclassifying NPLs to held-for-sale. Provision for covered loan losses of $3.1 million increased $1.9 million, reflecting adjustments from our annual comprehensive cash flow reforecasts of all the loan pools.
· As a result of the above, net interest income after provision for loan losses of $85.7 million increased 27.7% from the preceding quarter, and NIM was 5.31% compared to 5.62%.
Non-Interest Income
· Total bank and wealth management revenues of $22.1 million declined $1.8 million from the preceding quarter, which benefitted from early repayment fees from the previously mentioned acquired loan.
· Trust assets managed of $2.7 billion at September 30, 2013 increased 1.25% from $2.6 billion at June 30, 2013 and broker dealer assets gathered of $2.5 billion decreased 11.1% from $2.8 billion. Changes in trust and BD related assets primarily reflect differences in market values.
· Net amortization of the shared-loss indemnification asset related to the 2010 FDIC-assisted Eurobank acquisition declined $4.0 million from the preceding quarter due to lower cost recoveries of covered loans, as mentioned above.
Non-Interest Expenses & Taxes
· Operating expenses of $61.0 million declined $2.5 million from the preceding quarter, which included a provision on new taxes, as previously reported. Expenses also benefited from initial cost-savings, primarily from terminating our banking subsidiary’s third party loan servicing agreement.
· Merger and restructuring costs totaled $2.3 million compared to $5.3 million in the preceding quarter. Integration expenses are projected to total approximately $13.1 million in 2013, including $3.7 million for terminating the loan servicing agreement mentioned above.
· Income tax expense was $6.6 million compared to a benefit of $31.9 million in the preceding quarter, due to the previously mentioned $37.0 million increase in OFG’s deferred tax asset. The applicable rate of 35.0% in the third quarter of 2013 benefitted from one-time items from BBVA PR tax positions and remeasured purchase accounting adjustments.
September 30, 2013 Balance Sheet Analysis
Loans & Deposits
· The non-covered loan portfolio increased $158.3 million, to $4.8 billion, from the preceding quarter primarily due to increases in commercial, residential mortgage, and consumer loans. Auto loan balances remained stable.
· Loan production increased $222.5 million from the preceding quarter, to a record $549.5 million. Production of government, commercial and institutional loans was $263.1 million higher than the preceding quarter. Production of residential mortgage loans declined $40.6 million in line with overall market conditions. Production of auto and consumer loans remained stable.
· Net loans covered under loss share agreements with the FDIC continued to pay down, declining $7.8 million from the second quarter of 2013, to $361.6 million.
· Deposits declined $55.2 million from the preceding quarter, to $5.6 billion, reflecting level retail deposits, a slight increase in brokered deposits, and a decline in institutional deposits.
Investment Securities & Borrowings
· Investment securities totaled $1.7 billion, down $156.8 million from the second quarter of 2013, primarily due to repayments of federally insured, mortgage backed securities. Borrowings of $1.7 billion declined $14.4 million.
Stockholders’ Equity
· Total stockholders’ equity of $879.7 million increased $8.8 million from the second quarter of 2013 as growth in retained earnings more than offset a $4.9 million reduction in accumulated other comprehensive income from lower unrealized gains primarily on agency MBS.
· On a per common share basis, tangible book value of $13.47 increased $0.20 from $13.27 in the second quarter of 2013.
Other 3Q13 Highlights
· A total of $122.0 million of residential mortgage NPLs were sold, consisting of $62.0 million ($3.0 million more than anticipated last quarter) originated by Oriental Bank, our banking subsidiary, and $60.0 million acquired from BBVA PR. The blended price was 49.2% of unpaid principal balance, in line with previously stated expectations.
· Net credit losses of $5.1 million compare to $5.6 million in the preceding quarter, (excluding the previously reported charge-off of mortgage loans in the second quarter related to the mark-to-market adjustment on the residential NPLs). NPLs of $79.6 million compare to $88.5 million in the preceding quarter.
· The allowance for loan losses as a percentage of loans held for investments (excluding acquired loans) was 2.03% compared to 2.57% in the preceding quarter. The decline reflects a combination of lower NPL balances and higher loan balances. The allowance for loan and lease losses to NPLs (excluding acquired loans) was 59.8% at September 30, 2013.
· Credit quality of the acquired loans remained in line with expectations.
· Regulatory capital ratios continued to be significantly above requirements for a well-capitalized institution. Compared to the preceding quarter, tangible common equity to total tangible assets of 7.43% increased from 7.27%, leverage capital ratio of 8.74% increased from 8.54%, tier 1 risk-based capital ratio increased to 14.24% from 14.12%, and total risk-based capital ratio was 16.03% versus 16.19%.
Conference Call
A conference call to discuss OFG’s results for the third quarter of 2013, outlook and related matters will be held Tuesday, October 29, 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 3Q13 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 55 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 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.
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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
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OFG Bancorp | |
Financial Supplement | |
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The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation, and investors should refer to our September 30, 2013 Quarterly Report on Form 10-Q once it is filed with the Securities and Exchange Commission. | |
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Table of Contents | |
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| 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 | |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 1: Financial and Statistical Summary - Consolidated (2)(3) | | | | | | | | | | | | |
| | | 2013 | | 2013 | | 2013 | | 2012 | | 2012 |
(Dollars in thousands, except per share data) (unaudited) | | | Q3 | | Q2 | | Q1 | | Q4 | | Q3 |
Earnings | | | | | | | | | | | | | | | | |
Net interest income | | | $ | 98,632 | | $ | 105,800 | | $ | 93,072 | | $ | 43,356 | | $ | 40,744 |
Non-interest income (loss), net | (4) | | | 3,821 | | | 7,365 | | | 10,643 | | | (18,043) | | | 14,381 |
Total revenue | | | | 102,453 | | | 113,165 | | | 103,715 | | | 25,313 | | | 55,125 |
Provision for loan and lease losses | | | | 12,974 | | | 38,738 | | | 8,588 | | | 4,436 | | | 3,821 |
Operating expenses | | | | 61,021 | | | 63,548 | | | 61,275 | | | 36,293 | | | 31,649 |
Merger and restructuring charges | (5) | | | 2,252 | | | 5,274 | | | 5,534 | | | 4,990 | | | - |
Net income (loss) before income taxes | | | | 26,206 | | | 5,605 | | | 28,318 | | | (20,406) | | | 19,655 |
Income tax expense (benefit) | (6) | | | 6,585 | | | (31,934) | | | 7,126 | | | (1,587) | | | 14,722 |
Net income (loss) | | | | 19,621 | | | 37,539 | | | 21,192 | | | (18,819) | | | 17,761 |
Preferred stock dividends | (7) | | | (3,465) | | | (3,466) | | | (3,465) | | | (4,499) | | | (3,039) |
Net income (loss) available to common stockholders | | | $ | 16,156 | | $ | 34,073 | | $ | 17,727 | | $ | (23,318) | | $ | 14,722 |
Common Share Statistics | | | | | | | | | | | | | | | | |
Earnings (loss) per common share - basic | (8) | | $ | 0.35 | | $ | 0.75 | | $ | 0.39 | | $ | (0.53) | | $ | 0.36 |
Earnings (loss) per common share - diluted | (9) | | $ | 0.34 | | $ | 0.68 | | $ | 0.37 | | $ | (0.53) | | $ | 0.35 |
Common shares outstanding (period end) | (10) | | | 45,661 | | | 45,640 | | | 45,621 | | | 45,580 | | | 40,746 |
Weighted average common shares and share equivalents: | | | | | | | | | | | | | | | | |
Average common shares outstanding | | | | 45,927 | | | 45,630 | | | 45,595 | | | 43,808 | | | 40,738 |
Effect of dilutive securities: | | | | | | | | | | | | | | | | |
Average potential common shares-options | | | | 257 | | | 200 | | | 159 | | | 119 | | | 102 |
Average potential common shares-assuming convertible preferred stock | | | | 7,138 | | | 7,138 | | | 7,138 | | | 7,138 | | | 7,138 |
Total weighted average common shares outstanding and equivalents | | | | 53,322 | | | 52,968 | | | 52,892 | | | 51,065 | | | 47,978 |
Cash dividends per common share | | | $ | 0.06 | | $ | 0.06 | | $ | 0.06 | | $ | 0.06 | | $ | 0.06 |
Book value per common share (period end) | | | $ | 15.63 | | $ | 15.45 | | $ | 15.44 | | $ | 15.31 | | $ | 15.40 |
Tangible book value per common share (period end) | (11) | | $ | 13.47 | | $ | 13.27 | | $ | 13.25 | | $ | 13.10 | | $ | 15.30 |
Balance Sheet (Period End) | | | | | | | | | | | | | | | | |
Loans held for investment | (12) | | $ | 5,133,978 | | $ | 4,948,386 | | $ | 5,157,050 | | $ | 5,136,722 | | $ | 1,601,102 |
Interest-earning assets | | | | 7,448,091 | | | 7,436,090 | | | 7,731,096 | | | 8,190,839 | | | 5,460,965 |
Total assets | | | | 8,380,225 | | | 8,435,934 | | | 8,705,444 | | | 9,196,262 | | | 6,051,657 |
Interest-bearing liabilities | | | | 7,330,558 | | | 7,400,170 | | | 7,677,359 | | | 8,177,231 | | | 5,193,845 |
Total deposits | | | | 5,610,437 | | | 5,665,601 | | | 5,564,165 | | | 5,690,567 | | | 2,215,217 |
Borrowings | | | | 1,720,121 | | | 1,734,569 | | | 2,113,194 | | �� | 2,486,664 | | | 2,978,628 |
Stockholders' equity | | | | 879,726 | | | 870,924 | | | 870,242 | | | 863,606 | | | 771,687 |
Balance Sheet (Quarterly Average Balances) | | | | | | | | | | | | | | | | |
Average loans held for investment | (12) | | $ | 5,133,214 | | $ | 5,053,426 | | $ | 5,085,517 | | $ | 2,172,888 | | $ | 1,609,525 |
Average interest-earning assets | | | | 7,436,171 | | | 7,532,517 | | | 7,744,912 | | | 5,900,251 | | | 5,787,501 |
Average total assets | | | | 8,391,715 | | | 8,479,294 | | | 8,799,441 | | | 6,486,925 | | | 6,427,211 |
Average interest-bearing deposits | | | | 4,811,176 | | | 4,850,631 | | | 4,836,908 | | | 2,453,805 | | | 2,029,664 |
Average total deposits | | | | 5,654,266 | | | 5,612,807 | | | 5,593,725 | | | 2,737,101 | | | 2,213,773 |
Average borrowings | | | | 1,734,497 | | | 1,863,358 | | | 2,198,599 | | | 2,861,517 | | | 3,354,691 |
Average stockholders' equity | | | | 868,314 | | | 864,654 | | | 860,989 | | | 829,660 | | | 770,980 |
Average common stockholders' equity | | | | 702,444 | | | 698,784 | | | 695,112 | | | 671,558 | | | 629,892 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 1: Financial and Statistical Summary - Consolidated (Continued) (2)(3) |
| | | 2013 | | 2013 | | 2013 | | 2012 | | 2012 |
(Dollars in thousands, except per share data) (unaudited) | | | Q3 | | Q2 | | Q1 | | Q4 | | Q3 |
Performance Metrics | | | | | | | | | | | | | | | | |
Net interest income growth (quarter over quarter) | | | | -7% | | | 14% | | | 115% | | | 6% | | | 21% |
Non-interest income growth (quarter over quarter) | | | | -48% | | | -31% | | | 159% | | | -225% | | | -17% |
Total net revenue growth (quarter over quarter) | | | | -9% | | | 9% | | | 310% | | | -54% | | | 8% |
Total net revenue margin | (13) | | | 5.51% | | | 6.01% | | | 5.36% | | | 1.72% | | | 3.81% |
Net interest margin | (14) | | | 5.31% | | | 5.62% | | | 4.81% | | | 2.94% | | | 2.82% |
Return on average assets | (15) | | | 0.94% | | | 1.77% | | | 0.96% | | | -1.16% | | | 1.11% |
Return on average common stockholders' equity | (16) | | | 9.20% | | | 19.50% | | | 10.20% | | | -13.89% | | | 9.35% |
Return on average tangible common stockholders' equity | (17) | | | 10.71% | | | 22.75% | | | 11.92% | | | -14.25% | | | 9.41% |
Non-interest expense as a % of average loans held for investment | (18) | | | 4.75% | | | 5.03% | | | 4.82% | | | 6.68% | | | 7.87% |
Efficiency ratio | (19) | | | 52.39% | | | 53.07% | | | 57.70% | | | 68.62% | | | 60.87% |
Effective income tax rate | (6) | | | 25.13% | | | -569.74% | | | 25.16% | | | 7.78% | | | 9.64% |
Full-time equivalent employees, period end | | | | 1,558 | | | 1,573 | | | 1,565 | | | 1,654 | | | 759 |
Credit Quality Metrics | (20) | | | | | | | | | | | | | | | |
Excluding acquired loans: | (1) | | | | | | | | | | | | | | | |
Allowance for loan and lease losses | | | $ | 47,573 | | $ | 45,701 | | $ | 42,334 | | $ | 39,921 | | $ | 39,120 |
Allowance as a % of loans held for investment | | | | 2.03% | | | 2.57% | | | 2.91% | | | 3.23% | | | 3.29% |
Net charge-offs | | | $ | 5,058 | | $ | 32,552 | | $ | 3,383 | | $ | 2,653 | | $ | 1,882 |
Net charge-off rate | (21) | | | 0.98% | | | 8.87% | | | 1.07% | | | 0.86% | | | 0.64% |
Early delinquency rate (30 - 89 days past due) | (26) (27) | | | 2.17% | | | 2.71% | | | 6.54% | | | 6.48% | | | 3.24% |
Total delinquency rate (30 days and over) | (26) (27) | | | 6.06% | | | 7.43% | | | 15.16% | | | 17.73% | | | 12.20% |
Capital Ratios | (22) | | | | | | | | | | | | | | | |
Leverage ratio | | | | 8.74% | | | 8.54% | | | 8.07% | | | 6.55% | | | 10.91% |
Tier 1 common ratio | | | | 10.24% | | | 10.09% | | | 9.56% | | | 9.36% | | | 31.03% |
Tier 1 risk-based capital ratio | | | | 14.24% | | | 14.12% | | | 13.42% | | | 13.18% | | | 36.33% |
Total risk-based capital ratio | | | | 16.03% | | | 16.19% | | | 15.45% | | | 15.40% | | | 37.63% |
Tangible common equity ("TCE") ratio | | | | 7.43% | | | 7.27% | | | 7.02% | | | 6.57% | | | 10.31% |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 2: Consolidated Statements of Operations (2)(3) | | | | | | | |
| | Quarter Ended | | Nine Months Ended |
| | | September 30, | | June 30, | | September 30, | | September 30, | | September 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 | | | $ | 87,196 | | $ | 90,611 | | $ | 17,964 | | $ | 258,070 | | $ | 53,308 |
Loans covered under shared-loss agreements with the FDIC | | | | 21,657 | | | 23,999 | | | 22,283 | | | 65,884 | | | 64,167 |
Total interest income from loans | | | | 108,853 | | | 114,610 | | | 40,247 | | | 323,954 | | | 117,475 |
Investment securities | | | | 11,789 | | | 11,198 | | | 25,439 | | | 36,123 | | | 78,918 |
Total interest income | | | | 120,642 | | | 125,808 | | | 65,686 | | | 360,077 | | | 196,393 |
Interest expense: | | | | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | | | | |
Core deposits | | | | 9,947 | | | 8,885 | | | 5,948 | | | 27,117 | | | 19,935 |
Brokered deposits | | | | 1,387 | | | 603 | | | 766 | | | 3,639 | | | 2,657 |
Total deposits | | | | 11,334 | | | 9,488 | | | 6,714 | | | 30,756 | | | 22,592 |
Borrowings | | | | 10,676 | | | 10,520 | | | 18,228 | | | 31,817 | | | 59,890 |
Total interest expense | | | | 22,010 | | | 20,008 | | | 24,942 | | | 62,573 | | | 82,482 |
Net interest income | | | | 98,632 | | | 105,800 | | | 40,744 | | | 297,504 | | | 113,911 |
Provision for non-covered loan and lease losses | | | | 9,900 | | | 37,527 | | | 3,600 | | | 55,343 | | | 10,400 |
Provision for covered loan and lease losses, net | | | | 3,074 | | | 1,211 | | | 221 | | | 4,957 | | | 8,845 |
Total provision for loan and lease losses, net | | | | 12,974 | | | 38,738 | | | 3,821 | | | 60,300 | | | 19,245 |
Net interest income after provision for loan and lease losses | | | | 85,658 | | | 67,062 | | | 36,923 | | | 237,204 | | | 94,666 |
Non-interest income: | | | | | | | | | | | | | | | | |
Banking service revenues | | | | 12,642 | | | 13,334 | | | 3,006 | | | 38,358 | | | 9,231 |
Financial services revenues | | | | 7,394 | | | 8,030 | | | 6,042 | | | 23,084 | | | 17,835 |
Mortgage banking activities | | | | 2,098 | | | 2,525 | | | 2,204 | | | 7,776 | | | 7,142 |
Total banking and financial services revenues | | | | 22,134 | | | 23,889 | | | 11,252 | | | 69,218 | | | 34,208 |
FDIC shared-loss expense, net | | | | (15,965) | | | (19,965) | | | (8,096) | | | (48,801) | | | (18,505) |
Net gain (loss) on: | | | | | | | | | | | | | | | | |
Sales of securities and derivative activities | | | | (914) | | | 1,109 | | | 34,562 | | | (632) | | | 52,760 |
Early extinguishment of borrowings | | | | - | | | - | | | (24,312) | | | 1,061 | | | (24,312) |
Other | (28) (23) | | | (1,434) | | | 2,332 | | | 975 | | | 982 | | | 198 |
Total non-interest income, net | | | | 3,821 | | | 7,365 | | | 14,381 | | | 21,828 | | | 44,349 |
Non-interest expense: | | | | | | | | | | | | | | | | |
Compensation and employee benefits | | | | 22,590 | | | 24,089 | | | 11,323 | | | 69,927 | | | 32,873 |
Rent and occupancy costs | | | | 8,270 | | | 8,066 | | | 4,197 | | | 25,552 | | | 12,698 |
Merger and restructuring charges | (5) | | | 2,252 | | | 5,274 | | | - | | | 13,060 | | | - |
General and administrative expenses | | | | 30,161 | | | 31,393 | | | 16,129 | | | 90,364 | | | 45,185 |
Total non-interest expense | | | | 63,273 | | | 68,822 | | | 31,649 | | | 198,903 | | | 90,756 |
Income before income taxes | | | | 26,206 | | | 5,605 | | | 19,655 | | | 60,129 | | | 48,259 |
Income tax expense (benefit) | | | | 6,585 | | | (31,934) | | | 1,894 | | | (18,223) | | | 4,888 |
Net income | | | | 19,621 | | | 37,539 | | | 17,761 | | | 78,352 | | | 43,371 |
Less: dividends on preferred stock | | | | (3,465) | | | (3,466) | | | (3,039) | | | (10,396) | | | (5,440) |
Net income available to common shareholders | | | $ | 16,156 | | $ | 34,074 | | $ | 14,722 | | $ | 67,956 | | $ | 37,931 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | |
Table 3: Consolidated Statements of Financial Condition (2)(3) | | | | | | | | |
| | | September 30, | | June 30, | | March 31, | | December 31, | | September 30, |
(Dollars in thousands) (unaudited) | | | 2013 | | 2013 | | 2013 | | 2012 | | 2012 |
Cash and cash equivalents | | | $ | 657,520 | | $ | 748,313 | | $ | 561,446 | | $ | 868,695 | | $ | 515,558 |
Securities purchased under agreements to resell | | | | 85,000 | | | - | | | 60,000 | | | 80,000 | | | 270,000 |
Investments: | | | | | | | | | | | | | | | | |
Trading securities | | | | 2,124 | | | 2,209 | | | 1,787 | | | 495 | | | 1,514 |
Investment securities available-for-sale, at fair value, with amortized cost of $1,654,133 | | | | | | | | | | | | | | | | |
(June 30, 2013 - $1,807,335; March 31, 2013 - $1,948,685; December 31, 2012 - $2,118,825; | | | | | | | | | | | | | | | | |
September 30, 2012 - $2,228,629): | | | | | | | | | | | | | | | | |
Mortgage-backed securities | | | | 1,526,485 | | | 1,650,165 | | | 1,837,613 | | | 2,000,012 | | | 1,813,466 |
Other investment securities | | | | 150,763 | | | 186,064 | | | 175,542 | | | 194,274 | | | 480,084 |
Total investment securities available-for-sale | | | | 1,677,248 | | | 1,836,229 | | | 2,013,155 | | | 2,194,286 | | | 2,293,550 |
Mortgage-backed securities held-to-maturity, at amortized cost, with fair value of | | | | | | | | | | | | | | | | |
$874,921 at September 30, 2012 | | | | - | | | - | | | - | | | - | | | 835,084 |
Federal Home Loan Bank (FHLB) stock, at cost | | | | 24,470 | | | 22,156 | | | 33,458 | | | 38,411 | | | 22,865 |
Other investments | | | | 65 | | | 66 | | | 66 | | | 73 | | | 69 |
Total investments | | | | 1,703,907 | | | 1,860,660 | | | 2,048,466 | | | 2,233,265 | | | 3,153,082 |
Securities sold but not yet delivered | | | | 1,866 | | | 16,732 | | | - | | | - | | | - |
Loans: | | | | | | | | | | | | | | | | |
Loans not covered under shared-loss agreements with the FDIC: | | | | | | | | | | | | | | | | |
Commercial | | | | 1,979,488 | | | 1,737,499 | | | 1,893,458 | | | 1,833,651 | | | 338,364 |
Mortgage | | | | 1,473,422 | | | 1,528,049 | | | 1,575,229 | | | 1,606,439 | | | 771,747 |
Consumer | | | | 253,754 | | | 246,387 | | | 240,548 | | | 240,839 | | | 43,631 |
Auto and Leasing | | | | 1,065,750 | | | 1,067,071 | | | 1,068,081 | | | 1,060,486 | | | 33,772 |
Total loans receivable not covered under shared-loss agreements with the FDIC, gross | | | | 4,772,414 | | | 4,579,006 | | | 4,777,316 | | | 4,741,415 | | | 1,187,514 |
Less: Deferred loan costs (fees), net | | | | 120 | | | (831) | | | (2,138) | | | (3,463) | | | (3,875) |
Total loans receivable not covered under shared-loss agreements with the FDIC | | | | 4,772,534 | | | 4,578,175 | | | 4,775,178 | | | 4,737,952 | | | 1,183,639 |
Allowance for loan and lease losses on non-covered loans | | | | (49,614) | | | (46,625) | | | (42,720) | | | (39,921) | | | (39,120) |
Loans receivable held for investment, net | | | | 4,722,920 | | | 4,531,550 | | | 4,732,458 | | | 4,698,031 | | | 1,144,519 |
Mortgage loans held for sale | | | | 47,085 | | | 78,350 | | | 77,644 | | | 64,145 | | | 38,211 |
Total loans not covered under shared-loss agreements with the FDIC, net | | | | 4,770,005 | | | 4,609,900 | | | 4,810,102 | | | 4,762,176 | | | 1,182,730 |
| | | | | | | | | | | | | | | | |
Loans covered under shared-loss agreements with the FDIC | | | | 418,119 | | | 423,372 | | | 432,708 | | | 449,431 | | | 470,453 |
Allowance for loan and lease losses on covered loans | | | | (56,555) | | | (53,992) | | | (52,974) | | | (54,124) | | | (56,865) |
Loans covered under shared-loss agreements with the FDIC, net | | | | 361,564 | | | 369,380 | | | 379,734 | | | 395,307 | | | 413,588 |
Total loans, net | | | | 5,131,569 | | | 4,979,280 | | | 5,189,836 | | | 5,157,483 | | | 1,596,318 |
Other assets: | | | | | | | | | | | | | | | | |
FDIC shared-loss indemnification asset | | | | 207,908 | | | 236,472 | | | 266,958 | | | 286,799 | | | 328,573 |
Derivative assets | | | | 21,345 | | | 19,655 | | | 23,233 | | | 21,889 | | | 18,495 |
Prepaid expenses | | | | 16,967 | | | 23,568 | | | 22,852 | | | 26,047 | | | 19,001 |
Deferred tax asset, net | | | | 147,968 | | | 159,316 | | | 122,026 | | | 126,652 | | | 35,912 |
Foreclosed real estate and repossessed properties | | | | 94,086 | | | 91,267 | | | 87,802 | | | 80,257 | | | 39,893 |
Premises and equipment, net | | | | 83,145 | | | 84,300 | | | 83,461 | | | 84,997 | | | 19,268 |
Goodwill | | | | 86,069 | | | 86,069 | | | 86,069 | | | 86,069 | | | 2,701 |
Accounts receivable and other assets | | | | 142,875 | | | 130,302 | | | 153,295 | | | 144,109 | | | 52,856 |
Total assets | | | $ | 8,380,225 | | $ | 8,435,934 | | $ | 8,705,444 | | $ | 9,196,262 | | $ | 6,051,657 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | |
Table 3: Consolidated Statement of Financial Condition (Continued) (2)(3) | | | | | | | | |
| | | September 30, | | June 30, | | March 31, | | December 31, | | September 30, |
(Dollars in thousands) (unaudited) | | | 2013 | | 2013 | | 2013 | | 2012 | | 2012 |
Deposits: | | | | | | | | | | | | | | | | |
Core deposits | | | $ | 4,815,765 | | $ | 4,891,509 | | $ | 4,723,733 | | $ | 4,762,401 | | $ | 2,073,493 |
Brokered deposits | | | | 794,672 | | | 774,092 | | | 840,432 | | | 928,166 | | | 141,724 |
Total deposits | | | | 5,610,437 | | | 5,665,601 | | | 5,564,165 | | | 5,690,567 | | | 2,215,217 |
Borrowings: | | | | | | | | | | | | | | | | |
Short-term borrowings | | | | - | | | - | | | 60,829 | | | 92,210 | | | - |
Securities sold under agreements to repurchase | | | | 1,267,423 | | | 1,313,870 | | | 1,491,675 | | | 1,695,247 | | | 2,652,366 |
Advances from FHLB and other borrowings | | | | 340,010 | | | 292,306 | | | 432,642 | | | 543,268 | | | 290,179 |
Federal funds purchased | | | | 13,202 | | | 29,432 | | | 29,612 | | | 9,901 | | | - |
Subordinated capital notes | | | | 99,486 | | | 98,961 | | | 98,436 | | | 146,038 | | | 36,083 |
Total borrowings | | | | 1,720,121 | | | 1,734,569 | | | 2,113,194 | | | 2,486,664 | | | 2,978,628 |
Other liabilities: | | | | | | | | | | | | | | | | |
Derivative liabilities | | | | 16,741 | | | 16,701 | | | 24,024 | | | 26,260 | | | 58,269 |
Acceptances outstanding | | | | 31,881 | | | 30,571 | | | 32,512 | | | 26,996 | | | 232 |
Accrued expenses and other liabilities | | | | 121,319 | | | 117,568 | | | 101,307 | | | 102,169 | | | 27,624 |
Total liabilities | | | | 7,500,499 | | | 7,565,010 | | | 7,835,202 | | | 8,332,656 | | | 5,279,970 |
Stockholders' equity: | | | | | | | | | | | | | | | | |
Preferred stock | | | | 176,000 | | | 176,000 | | | 176,000 | | | 176,000 | | | 152,000 |
Common stock | | | | 52,691 | | | 52,689 | | | 52,671 | | | 52,671 | | | 47,842 |
Additional paid-in capital | | | | 538,231 | | | 538,105 | | | 537,500 | | | 537,453 | | | 495,155 |
Legal surplus | | | | 59,867 | | | 57,906 | | | 54,128 | | | 52,143 | | | 54,407 |
Retained earnings | | | | 122,747 | | | 111,292 | | | 83,739 | | | 70,734 | | | 94,520 |
Treasury stock, at cost | | | | (80,642) | | | (80,834) | | | (80,847) | | | (81,275) | | | (81,300) |
Accumulated other comprehensive income, net | | | | 10,832 | | | 15,766 | | | 47,051 | | | 55,880 | | | 9,063 |
Total stockholders' equity | | | | 879,726 | | | 870,924 | | | 870,242 | | | 863,606 | | | 771,687 |
Total liabilities and stockholders' equity | | | $ | 8,380,225 | | $ | 8,435,934 | | $ | 8,705,444 | | $ | 9,196,262 | | $ | 6,051,657 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 4: Information on Loan Portfolio and Production | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | September 30, | | June 30, | | March 31, | | December 31, | | September 30, |
(Dollars in thousands) (unaudited) | | | 2013 | | 2013 | | 2013 | | 2012 | | 2012 |
Acquired loans: | (1) | | | | | | | | | | | | | | | |
Non-covered loans | | | | | | | | | | | | | | | | |
Acquired loans accounted for under ASC 310-30 | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | $ | 2,091,796 | | $ | 2,445,112 | | $ | 2,776,136 | | $ | 2,914,527 | | $ | - |
Period-end loans held for investment carrying amount | | | | 1,915,620 | | | 2,211,797 | | | 2,500,091 | | | 2,612,819 | | | - |
Average loans held for investment | | | | 2,165,289 | | | 2,372,086 | | | 2,558,338 | | | 401,388 | | | - |
Acquired loans not accounted for under ASC 310-30 | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | | 494,286 | | | 566,642 | | | 791,360 | | | 861,065 | | | - |
Period-end loans held for investment carrying amount | | | | 514,323 | | | 587,136 | | | 822,031 | | | 893,823 | | | - |
Average loans held for investment | | | | 545,233 | | | 838,332 | | | 867,008 | | | 131,907 | | | - |
Covered loans | | | | | | | | | | | | | | | | |
Acquired loans accounted for under ASC 310-30 | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | | 861,900 | | | 897,184 | | | 931,923 | | | 989,236 | | | 1,023,825 |
Period-end loans held for investment carrying amount | | | | 361,564 | | | 369,380 | | | 379,734 | | | 395,307 | | | 413,588 |
Average loans held for investment | | | | 366,703 | | | 374,611 | | | 391,003 | | | 408,366 | | | 437,683 |
| | | | | | | | | | | | | | | | |
Total acquired loans | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | | 3,447,982 | | | 3,908,938 | | | 4,499,419 | | | 4,764,828 | | | 1,023,825 |
Period-end loans held for investment carrying amount | | | | 2,791,507 | | | 3,168,313 | | | 3,701,856 | | | 3,901,949 | | | 413,588 |
Average loans held for investment | | | | 3,077,225 | | | 3,585,029 | | | 3,816,349 | | | 941,661 | | | 437,683 |
| | | | | | | | | | | | | | | | |
Originated and other loans held for investment: | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | | 2,285,520 | | | 1,526,364 | | | 1,421,027 | | | 1,192,904 | | | 1,187,514 |
Period-end loans held for investment carrying amount | | | | 2,342,471 | | | 1,780,073 | | | 1,455,194 | | | 1,234,773 | | | 1,187,514 |
Average loans held for investment | | | | 2,055,989 | | | 1,468,397 | | | 1,269,168 | | | 1,231,227 | | | 1,171,842 |
| | | | | | | | | | | | | | | | |
Total loans | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | $ | 5,733,502 | | $ | 5,435,302 | | $ | 5,920,446 | | $ | 5,957,732 | | $ | 2,211,339 |
Period-end loans held for investment carrying amount | | | | 5,133,978 | | | 4,948,386 | | | 5,157,050 | | | 5,136,722 | | | 1,601,102 |
Average loans held for investment | | | | 5,133,214 | | | 5,053,426 | | | 5,085,517 | | | 2,172,888 | | | 1,609,525 |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | 2013 | | 2013 | | 2013 | | 2012 | | 2012 |
(Dollars in thousands) (unaudited) | | | Q3 | | Q2 | | Q1 | | Q4 | | Q3 |
Quarterly loan production | | | | | | | | | | | | | | | | |
Mortgage | | | $ | 60,676 | | $ | 101,279 | | $ | 77,124 | | $ | 61,795 | | $ | 46,985 |
Commercial | | | | 365,300 | | | 104,345 | | | 74,004 | | | 56,270 | | | 43,572 |
Consumer | | | | 28,586 | | | 26,634 | | | 22,614 | | | 9,451 | | | 9,528 |
Auto and Leasing | | | | 94,967 | | | 94,737 | | | 100,981 | | | 20,011 | | | 6,301 |
Total | | | $ | 549,529 | | $ | 326,995 | | $ | 274,723 | | $ | 147,527 | | $ | 106,386 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Table 5: Average Balances, Net Interest Income and Net Interest Margin | |
| | | 2013 Q3 | | 2013 Q2 | | 2013 Q1 | | 2012 Q4 | | 2012 Q3 |
| | | | | Interest | | | | | | | Interest | | | | | | | Interest | | | | | | | Interest | | | | | | | Interest | | | |
| | | Average | | Income/ | | Yield/ | | Average | | Income/ | | Yield/ | | Average | | Income/ | | Yield/ | | Average | | Income/ | | Yield/ | | Average | | Income/ | | Yield/ |
(Dollars in thousands) (unaudited) | | | Balance | | Expense | | Rate | | Balance | | Expense | | Rate | | Balance | | Expense | | Rate | | Balance | | Expense | | Rate | | Balance | | Expense | | Rate |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest earning assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash equivalents and securities purchased under agreements to resell | | | $ | 538,839 | | $ | 241 | | 0.18 | % | | $ | 541,038 | | $ | 242 | | 0.18 | % | | $ | 551,242 | | $ | 308 | | 0.22 | % | | $ | 968,490 | | $ | 473 | | 0.20 | % | | $ | 831,310 | | $ | 408 | | 0.20 | % |
Investment securities | | | | 1,764,118 | | | 11,548 | | 2.62 | % | | | 1,938,053 | | | 10,956 | | 2.26 | % | | | 2,108,153 | | | 12,828 | | 2.43 | % | | | 2,758,873 | | | 16,020 | | 2.32 | % | | | 3,346,666 | | | 25,031 | | 2.99 | % |
Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Originated and other loans | | | | 2,055,989 | | | 29,930 | | 5.82 | % | | | 1,468,397 | | | 22,512 | | 6.13 | % | | | 1,269,168 | | | 20,316 | | 6.40 | % | | | 1,231,227 | | | 17,756 | | 5.77 | % | | | 1,171,842 | | | 17,963 | | 6.13 | % |
Acquired loans accounted for under ASC 310-30 | | | | 2,165,289 | | | 48,355 | | 8.93 | % | | | 2,165,289 | | | 54,429 | | 9.18 | % | | | 2,558,338 | | | 47,670 | | 7.45 | % | | | 401,388 | | | 7,868 | | 7.84 | % | | | - | | | - | | - | % |
Acquired loans not accounted for under ASC 310-30 | | | | 545,233 | | | 8,911 | | 6.54 | % | | | 838,332 | | | 13,670 | | 6.52 | % | | | 867,008 | | | 12,277 | | 5.66 | % | | | 131,907 | | | 1,063 | | 3.22 | % | | | - | | | - | | - | % |
Loans covered under shared-loss agreements with the FDIC | | | | 366,703 | | | 21,657 | | 23.62 | % | | | 374,611 | | | 23,999 | | 25.63 | % | | | 391,003 | | | 20,229 | | 20.69 | % | | | 408,366 | | | 21,209 | | 20.77 | % | | | 437,683 | | | 22,284 | | 20.37 | % |
Total loans | | | | 5,133,214 | | | 108,853 | | 8.48 | % | | | 5,053,426 | | | 114,610 | | 9.07 | % | | | 5,085,517 | | | 100,492 | | 7.90 | % | | | 2,172,888 | | | 47,896 | | 8.82 | % | | | 1,609,525 | | | 40,247 | | 10.00 | % |
Total interest-earning assets | | | $ | 7,436,171 | | $ | 120,642 | | 6.49 | % | | $ | 7,532,517 | | $ | 125,808 | | 6.68 | % | | $ | 7,744,912 | | $ | 113,628 | | 5.87 | % | | $ | 5,900,251 | | $ | 64,389 | | 4.37 | % | | $ | 5,787,501 | | $ | 65,686 | | 4.54 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Core deposits | | | $ | 4,854,543 | | $ | 11,622 | | 0.96 | % | | $ | 4,754,608 | | $ | 11,663 | | 0.98 | % | | $ | 4,737,274 | | $ | 12,799 | | 1.08 | % | | $ | 2,478,250 | | $ | 6,321 | | 1.02 | % | | $ | 2,071,407 | | $ | 6,020 | | 1.16 | % |
Brokered deposits | | | | 799,723 | | | 1,679 | | 0.84 | % | | | 858,199 | | | 1,790 | | 0.83 | % | | | 856,451 | | | 1,989 | | 0.93 | % | | | 258,851 | | | 975 | | 1.51 | % | | | 142,366 | | | 766 | | 2.15 | % |
| | | | 5,654,266 | | | 13,301 | | 0.94 | % | | | 5,612,807 | | | 13,453 | | 0.96 | % | | | 5,593,725 | | | 14,788 | | 1.06 | % | | | 2,737,101 | | | 7,296 | | 1.07 | % | | | 2,213,773 | | | 6,786 | | 1.23 | % |
Purchase accounting and other adjustments | | | | - | | | (1,967) | | - | | | | - | | | (3,965) | | - | | | | - | | | (4,853) | | - | | | | - | | | (242) | | - | | | | - | | | (72) | | - | |
Total deposits | | | | 5,654,266 | | | 11,334 | | 0.80 | % | | | 5,612,807 | | | 9,488 | | 0.68 | % | | | 5,593,725 | | | 9,935 | | 0.71 | % | | | 2,737,101 | | | 7,054 | | 1.03 | % | | | 2,213,773 | | | 6,714 | | 1.21 | % |
Borrowings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Securities sold under agreements to repurchase | | | | 1,268,544 | | | 7,211 | | 2.27 | % | | | 1,356,716 | | | 7,109 | | 2.10 | % | | | 1,525,575 | | | 7,248 | | 1.90 | % | | | 2,447,747 | | | 11,161 | | 1.82 | % | | | 3,029,037 | | | 15,344 | | 2.03 | % |
Advances from FHLB and other borrowings | | | | 366,692 | | | 2,321 | | 2.53 | % | | | 407,994 | | | 2,241 | | 2.20 | % | | | 529,365 | | | 1,713 | | 1.29 | % | | | 360,971 | | | 2,311 | | 2.56 | % | | | 289,571 | | | 2,561 | | 3.54 | % |
Subordinated capital notes | | | | 99,261 | | | 1,144 | | 4.61 | % | | | 98,648 | | | 1,170 | | 4.74 | % | | | 143,659 | | | 1,660 | | 4.62 | % | | | 52,799 | | | 507 | | 3.84 | % | | | 36,083 | | | 323 | | 3.58 | % |
Total borrowings | | | | 1,734,497 | | | 10,676 | | 2.46 | % | | | 1,863,358 | | | 10,520 | | 2.26 | % | | | 2,198,599 | | | 10,621 | | 1.93 | % | | | 2,861,517 | | | 13,979 | | 1.95 | % | | | 3,354,691 | | | 18,228 | | 2.17 | % |
Total interest-bearing liabilities | | | $ | 7,388,763 | | $ | 22,010 | | 1.19 | % | | $ | 7,476,165 | | $ | 20,008 | | 1.07 | % | | $ | 7,792,324 | | $ | 20,556 | | 1.06 | % | | $ | 5,598,618 | | $ | 21,033 | | 1.50 | % | | $ | 5,568,464 | | $ | 24,942 | | 1.79 | % |
Interest rate spread | | | | | | $ | 98,632 | | 5.30 | % | | | | | $ | 105,800 | | 5.61 | % | | | | | $ | 93,072 | | 4.81 | % | | | | | $ | 43,356 | | 2.87 | % | | | | | $ | 40,744 | | 2.75 | % |
Interest rate margin | | | | | | | | | 5.31 | % | | | | | | | | 5.62 | % | | | | | | | | 4.81 | % | | | | | | | | 2.94 | % | | | | | | | | 2.82 | % |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 6: Loan Information and Performance Statistics (Excluding Acquired Loans) (1) | | | |
| | | 2013 | | 2013 | | 2013 | | 2012 | | 2012 |
(Dollars in thousands) (unaudited) | | | Q3 | | Q2 | | Q1 | | Q4 | | Q3 |
Net Charge-offs | | | | | | | | | | | | | | | | |
Mortgage: | | | | | | | | | | | | | | | | |
Charge-offs | (24) | | $ | 1,758 | | $ | 29,119 | | $ | 2,588 | | $ | 1,871 | | $ | 1,752 |
Recoveries | | | | - | | | - | | | - | | | - | | | (131) |
Total mortgage | | | | 1,758 | | | 29,119 | | | 2,588 | | | 1,871 | | | 1,621 |
Commercial: | | | | | | | | | | | | | | | | |
Charge-offs | | | | 2,234 | | | 2,887 | | | 557 | | | 658 | | | 65 |
Recoveries | | | | (28) | | | (234) | | | (28) | | | (27) | | | (28) |
Total commercial | | | | 2,206 | | | 2,653 | | | 529 | | | 631 | | | 37 |
Consumer: | | | | | | | | | | | | | | | | |
Charge-offs | | | | 465 | | | 323 | | | 246 | | | 176 | | | 198 |
Recoveries | | | | (37) | | | (43) | | | (65) | | | (41) | | | (46) |
Total consumer | | | | 428 | | | 280 | | | 181 | | | 135 | | | 152 |
Auto and Leasing: | | | | | | | | | | | | | | | | |
Charge-offs | | | | 1,305 | | | 709 | | | 91 | | | 35 | | | 74 |
Recoveries | | | | (639) | | | (209) | | | (6) | | | (19) | | | (2) |
Total auto and leasing | | | | 666 | | | 500 | | | 85 | | | 16 | | | 72 |
Total | | | $ | 5,058 | | $ | 32,552 | | $ | 3,383 | | $ | 2,653 | | $ | 1,882 |
Net Charge-off Rates | | | | | | | | | | | | | | | | |
Mortgage | | | | 0.93% | | | 14.54% | | | 1.40% | | | 0.92% | | | 0.83% |
Commercial | | | | 0.95% | | | 2.63% | | | 0.56% | | | 0.76% | | | 0.05% |
Consumer | | | | 1.83% | | | 1.52% | | | 1.31% | | | 1.21% | | | 1.48% |
Auto and Leasing | | | | 0.98% | | | 1.05% | | | 0.34% | | | 0.18% | | | 0.95% |
Total | | | | 0.98% | | | 8.87% | | | 1.07% | | | 0.86% | | | 0.64% |
Period-end Loans Held For Investment | | | | | | | | | | | | | | | | |
Mortgage: | | | | | | | | | | | | | | | | |
Traditional, Non traditional, and Loans under Loss Mitigation | | | $ | 710,132 | | $ | 722,785 | | $ | 772,640 | | $ | 775,778 | | $ | 771,735 |
GNMA's buy-back option program | | | | 32,511 | | | 32,513 | | | 20,190 | | | 25,676 | | | - |
Total mortgage | | | | 742,643 | | | 755,298 | | | 792,830 | | | 801,454 | | | 771,735 |
Commercial | | | | 1,172,617 | | | 702,075 | | | 450,312 | | | 349,075 | | | 339,480 |
Consumer | | | | 113,509 | | | 89,608 | | | 65,363 | | | 46,667 | | | 42,527 |
Auto and Leasing | | | | 313,702 | | | 233,092 | | | 146,689 | | | 37,577 | | | 33,772 |
Total | | | $ | 2,342,471 | | $ | 1,780,073 | | $ | 1,455,194 | | $ | 1,234,773 | | $ | 1,187,514 |
Average Loans Held For Investment | | | | | | | | | | | | | | | | |
Mortgage | | | $ | 757,752 | | $ | 801,079 | | $ | 737,402 | | $ | 817,672 | | $ | 781,838 |
Commercial | | | | 932,853 | | | 403,016 | | | 377,593 | | | 333,939 | | | 318,716 |
Consumer | | | | 93,657 | | | 73,864 | | | 55,125 | | | 44,764 | | | 41,022 |
Auto and Leasing | | | | 271,727 | | | 190,438 | | | 99,048 | | | 34,852 | | | 30,266 |
Total | | | $ | 2,055,989 | | $ | 1,468,397 | | $ | 1,269,168 | | $ | 1,231,227 | | $ | 1,171,842 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 6: Loan Information and Performance Statistics (Excluding Acquired Loans) (Continued) (1) |
| | | 2013 | | 2013 | | 2013 | | 2012 | | 2012 |
(Dollars in thousands) (unaudited) | | | Q3 | | Q2 | | Q1 | | Q4 | | Q3 |
Early Delinquency (30 - 89 days past due) | | | | | | | | | | | | | | | | |
Mortgage | (26) (27) | | $ | 23,119 | | $ | 23,622 | | $ | 87,147 | | $ | 68,898 | | $ | 35,284 |
Commercial | | | | 4,560 | | | 12,804 | | | 4,069 | | | 9,866 | | | 1,916 |
Consumer | | | | 1,983 | | | 835 | | | 680 | | | 839 | | | 624 |
Auto and Leasing | | | | 21,186 | | | 10,901 | | | 3,313 | | | 381 | | | 688 |
Total | | | $ | 50,848 | | $ | 48,162 | | $ | 95,209 | | $ | 79,984 | | $ | 38,512 |
Early Delinquency Rates (30 - 89 days past due) | | | | | | | | | | | | | | | | |
Mortgage | (26) (27) | | | 3.11% | | | 3.13% | | | 10.99% | | | 8.60% | | | 4.57% |
Commercial | | | | 0.39% | | | 1.82% | | | 0.90% | | | 2.83% | | | 0.56% |
Consumer | | | | 1.75% | | | 0.93% | | | 1.04% | | | 1.80% | | | 1.47% |
Auto and Leasing | | | | 6.75% | | | 4.68% | | | 2.26% | | | 1.01% | | | 2.04% |
Total | | | | 2.17% | | | 2.71% | | | 6.54% | | | 6.48% | | | 3.24% |
Total Delinquency (30 days and over past due) | | | | | | | | | | | | | | | | |
Mortgage: | (26) (27) | | | | | | | | | | | | | | | |
Traditional, Non traditional, and Loans under Loss Mitigation | | | $ | 55,848 | | $ | 60,346 | | $ | 168,357 | | $ | 163,931 | | $ | 123,181 |
GNMA's buy-back option program | | | | 32,511 | | | 32,513 | | | 20,190 | | | 25,676 | | | - |
Total mortgage | | | | 88,359 | | | 92,859 | | | 188,547 | | | 189,607 | | | 123,181 |
Commercial | | | | 27,249 | | | 26,251 | | | 27,714 | | | 27,580 | | | 20,109 |
Consumer | | | | 2,408 | | | 1,205 | | | 1,021 | | | 1,248 | | | 879 |
Auto and Leasing | | | | 23,822 | | | 11,997 | | | 3,385 | | | 511 | | | 699 |
Total | | | $ | 141,838 | | $ | 132,312 | | $ | 220,667 | | $ | 218,946 | | $ | 144,869 |
Total Delinquency Rates (30 days and over past due) | | | | | | | | | | | | | | | | |
Mortgage: | (26) (27) | | | | | | | | | | | | | | | |
Traditional, Non traditional, and Loans under Loss Mitigation | | | | 7.52% | | | 7.99% | | | 21.23% | | | 20.45% | | | 15.96% |
GNMA's buy-back option program | | | | 4.38% | | | 4.30% | | | 2.55% | | | 3.20% | | | 0.00% |
Total mortgage | | | | 11.90% | | | 12.29% | | | 23.78% | | | 23.66% | | | 15.96% |
Commercial | | | | 2.32% | | | 3.74% | | | 6.15% | | | 7.90% | | | 5.92% |
Consumer | | | | 2.12% | | | 1.34% | | | 1.56% | | | 2.67% | | | 2.07% |
Auto and Leasing | | | | 7.59% | | | 5.15% | | | 2.31% | | | 1.36% | | | 2.07% |
Total | | | | 6.06% | | | 7.43% | | | 15.16% | | | 17.73% | | | 12.20% |
Nonperforming Assets | (25) | | | | | | | | | | | | | | | |
Mortgage | (26) (27) | | $ | 45,596 | | $ | 55,667 | | $ | 99,110 | | $ | 115,002 | | $ | 87,896 |
Commercial | | | | 30,837 | | | 32,430 | | | 30,756 | | | 29,506 | | | 29,649 |
Consumer | | | | 490 | | | 324 | | | 371 | | | 442 | | | 276 |
Auto and Leasing | | | | 2,661 | | | 35 | | | 219 | | | 131 | | | 11 |
Total nonperforming loans | | | | 79,584 | | | 88,456 | | | 130,456 | | | 145,081 | | | 117,832 |
Foreclosed real estate | | | | 19,885 | | | 18,995 | | | 19,025 | | | 17,380 | | | 17,765 |
Other repossessed assets | | | | 234 | | | 99 | | | 52 | | | 24 | | | 97 |
Mortgage loans held for sale | | | | 654 | | | 26,586 | | | - | | | 319 | | | 1,247 |
Total nonperforming assets | | | $ | 100,357 | | $ | 134,136 | | $ | 149,533 | | $ | 162,804 | | $ | 136,941 |
Nonperforming Loan Rates | | | | | | | | | | | | | | | | |
Mortgage | (26) (27) | | | 6.14% | | | 7.37% | | | 12.50% | | | 14.35% | | | 11.39% |
Commercial | | | | 2.63% | | | 4.62% | | | 6.83% | | | 8.45% | | | 8.73% |
Consumer | | | | 0.43% | | | 0.36% | | | 0.57% | | | 0.95% | | | 0.65% |
Auto and Leasing | | | | 0.85% | | | 0.02% | | | 0.15% | | | 0.35% | | | 0.03% |
Total loans | | | | 3.40% | | | 4.97% | | | 8.96% | | | 11.75% | | | 9.92% |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | | | |
Table 7: Allowance for Loan and Lease Losses | | | | | | | | | | | | |
| | | Quarter Ended September 30, 2013 |
| | | | | | | | | Auto and | | | | |
(Dollars in thousands) (unaudited) | | | Mortgage | | Commercial | | Consumer | | Leasing | | Unallocated | | Total |
Non-covered loans | | | | | | | | | | | | | | | | | | | |
Originated | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 21,375 | | $ | 17,624 | | $ | 2,341 | | $ | 3,641 | | $ | 720 | | $ | 45,701 |
Provision for loan and lease losses | | | | 1,375 | | | (703) | | | 2,915 | | | 3,143 | | | 200 | | | 6,930 |
Charge-offs | | | | (1,758) | | | (2,234) | | | (465) | | | (1,305) | | | - | | | (5,762) |
Recoveries | | | | - | | | 28 | | | 37 | | | 639 | | | - | | | 704 |
Balance at end of period | | | $ | 20,992 | | $ | 14,715 | | $ | 4,828 | | $ | 6,118 | | $ | 920 | | $ | 47,573 |
| | | | | | | | | | | | | | | | | | | |
Acquired | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | - | | $ | 924 | | $ | - | | $ | - | | $ | - | | $ | 924 |
Provision for loan and lease losses | | | | - | | | 431 | | | 1,145 | | | 1,394 | | | - | | | 2,970 |
Charge-offs | | | | - | | | - | | | (1,233) | | | (1,598) | | | - | | | (2,831) |
Recoveries | | | | - | | | 6 | | | 88 | | | 884 | | | - | | | 978 |
Balance at end of period | | | $ | - | | $ | 1,361 | | $ | - | | $ | 680 | | $ | - | | $ | 2,041 |
| | | | | | | | | | | | | | | | | | | |
Total non-covered loans | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 21,375 | | $ | 18,548 | | $ | 2,341 | | $ | 3,641 | | $ | 720 | | $ | 46,625 |
Provision for loan and lease losses | | | | 1,375 | | | (272) | | | 4,060 | | | 4,537 | | | 200 | | | 9,900 |
Charge-offs | (24) | | | (1,758) | | | (2,234) | | | (1,698) | | | (2,903) | | | - | | | (8,593) |
Recoveries | | | | - | | | 34 | | | 125 | | | 1,523 | | | - | | | 1,682 |
Balance at end of period | | | $ | 20,992 | | $ | 16,076 | | $ | 4,828 | | $ | 6,798 | | $ | 920 | | $ | 49,614 |
| | | | | | | | | | | | | | | | | | | |
Covered loans | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 3,815 | | $ | 49,499 | | $ | 678 | | $ | - | | $ | - | | $ | 53,992 |
Provision for loan and lease losses, net | | | | 5,222 | | | (2,136) | | | (12) | | | - | | | - | | | 3,074 |
FDIC shared-loss portion of provision for covered loan and lease losses, net | | | | (36) | | | (428) | | | (47) | | | - | | | - | | | (511) |
Balance at end of period | | | $ | 9,001 | | $ | 46,935 | | $ | 619 | | $ | - | | $ | - | | $ | 56,555 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | | | |
Table 8: Accretable Yield on Loans Accounted for Under ASC 310-30 |
| | | Quarter Ended September 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 | | | $ | 305,935 | | $ | 113,949 | | $ | 24,078 | | $ | 99,178 | | $ | 18,345 | | $ | 561,485 |
Accretion | | | | (11,062) | | | (14,204) | | | (7,982) | | | (12,483) | | | (2,621) | | | (48,352) |
Transfers from non-accretable discount | | | | - | | | 890 | | | 5,120 | | | - | | | - | | | 6,010 |
Balance at end of period | | | $ | 294,873 | | $ | 100,635 | | $ | 21,216 | | $ | 86,695 | | $ | 15,724 | | $ | 519,143 |
| | | | | | | | | | | | | | | | | | | |
Non-Accretable Discount | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 498,031 | | $ | 54,151 | | $ | 52,533 | | $ | 50,548 | | $ | 30,968 | | $ | 686,231 |
Principal losses | | | | (28,720) | | | (1,771) | | | (9,915) | | | (2,398) | | | (1,496) | | | (44,300) |
Transfers to accretable yield | | | | - | | | (890) | | | (5,120) | | | - | | | - | | | (6,010) |
Balance at end of period | | | $ | 469,311 | | $ | 51,490 | | $ | 37,498 | | $ | 48,150 | | $ | 29,472 | | $ | 635,921 |
| | | | | | | | | | | | | | | | |
| | | | | | | | | 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 | | | $ | 50,493 | | $ | 94,876 | | $ | 4,392 | | $ | 15,023 | | $ | 2,348 | | $ | 167,132 |
Accretion | | | | (4,576) | | | (11,484) | | | (927) | | | (4,407) | | | (263) | | | (21,657) |
Transfers from non-accretable discount | | | | 10,916 | | | 8,325 | | | (175) | | | 3,262 | | | 741 | | | 23,069 |
Balance at end of period | | | $ | 56,833 | | $ | 91,718 | | $ | 3,290 | | $ | 13,878 | | $ | 2,826 | | $ | 168,545 |
| | | | | | | | | | | | | | | | | | | |
Non-Accretable Discount | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 60,503 | | $ | 117,733 | | $ | - | | $ | 3,360 | | $ | 10,663 | | $ | 192,259 |
Principal losses | | | | (7,265) | | | (246) | | | (175) | | | (98) | | | 21 | | | (7,763) |
Transfers to accretable yield | | | | (10,916) | | | (8,325) | | | 175 | | | (3,262) | | | (741) | | | (23,069) |
Balance at end of period | | | $ | 42,322 | | $ | 109,162 | | $ | - | | $ | - | | $ | 9,943 | | $ | 161,427 |
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 | | 2013 | | 2012 | | 2012 |
(Dollars in thousands) (unaudited) | | | Q3 | | Q2 | | Q1 | | Q4 | | Q3 |
Average Equity to Non-GAAP Average Tangible Common Equity | | | | | | | | | | | | | | | | |
Average total stockholders' equity | | | $ | 868,314 | | $ | 864,654 | | $ | 860,989 | | $ | 829,660 | | $ | 770,980 |
Less: Average noncumulative perpetual preferred stock | | | | (176,000) | | | (176,000) | | | (176,000) | | | (166,870) | | | (148,348) |
Average noncumulative perpetual preferred stock issuance costs | | | | 10,130 | | | 10,130 | | | 10,123 | | | 8,768 | | | 7,260 |
Average total common stockholders' equity | | | $ | 702,444 | | $ | 698,784 | | $ | 695,112 | | $ | 671,558 | | $ | 629,892 |
Less: Average intangible assets | | | | (99,048) | | | (99,660) | | | (100,308) | | | (17,038) | | | (3,802) |
Average tangible common equity | | | $ | 603,396 | | $ | 599,124 | | $ | 594,804 | | $ | 654,520 | | $ | 626,090 |
Stockholders' Equity to Non-GAAP Tangible Common Equity | | | | | | | | | | | | | | | | |
Total stockholders' equity | | | $ | 879,726 | | $ | 870,924 | | $ | 870,242 | | $ | 863,606 | | $ | 771,687 |
Less: Intangible assets | | | | (98,625) | | | (99,270) | | | (99,915) | | | (100,559) | | | (3,780) |
Noncumulative perpetual preferred stock | | | | (176,000) | | | (176,000) | | | (176,000) | | | (176,000) | | | (152,000) |
Noncumulative perpetual preferred stock issuance costs | | | | 10,130 | | | 10,130 | | | 10,130 | | | 10,115 | | | 7,639 |
Tangible common equity | | | $ | 615,231 | | $ | 605,784 | | $ | 604,457 | | $ | 597,162 | | $ | 623,546 |
| | | | | | | | | | | | | | | | |
Common stock outstanding at end of period | | | | 45,661 | | | 45,640 | | | 45,621 | | | 45,580 | | | 40,746 |
Tangible book value | | | $ | 13.47 | | $ | 13.27 | | $ | 13.25 | | $ | 13.10 | | $ | 15.30 |
Total Assets to Tangible Assets | | | | | | | | | | | | | | | | |
Total assets | | | $ | 8,380,225 | | $ | 8,435,934 | | $ | 8,705,444 | | $ | 9,196,262 | | $ | 6,051,657 |
Less: Intangible assets | | | | (98,625) | | | (99,270) | | | (99,915) | | | (100,559) | | | (3,780) |
Tangible assets | | | $ | 8,281,600 | | $ | 8,336,664 | | $ | 8,605,529 | | $ | 9,095,703 | | $ | 6,047,877 |
Non-GAAP TCE Ratio | | | | | | | | | | | | | | | | |
Tangible common equity | | | $ | 615,231 | | $ | 605,784 | | $ | 604,457 | | $ | 597,162 | | $ | 623,546 |
Tangible assets | | | | 8,281,600 | | | 8,336,664 | | | 8,605,529 | | | 9,095,703 | | | 6,047,877 |
TCE ratio | | | | 7.43% | | | 7.27% | | | 7.02% | | | 6.57% | | | 10.31% |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 9: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures (Continued) |
|
| | | 2013 | | 2013 | | 2013 | | 2012 | | 2012 |
(Dollars in thousands) (unaudited) | | | Q3 | | Q2 | | Q1 | | Q4 | | Q3 |
Regulatory Capital Ratios | | | | | | | | | | | | | | | | |
Total stockholders' equity | | | $ | 879,726 | | $ | 870,924 | | $ | 870,242 | | $ | 863,606 | | $ | 771,687 |
Less: Unrealized gains on available-for-sale securities, net of income tax | | | | (20,324) | | | (25,400) | | | (58,393) | | | (68,245) | | | (60,098) |
Unrealized losses on cash flow hedges, net of income tax | | | | 9,492 | | | 9,634 | | | 11,342 | | | 12,365 | | | 51,035 |
Disallowed goodwill and other intangible assets | | | | (98,625) | | | (89,584) | | | (77,867) | | | (69,388) | | | (3,780) |
Disallowed deferred tax assets | | | | (89,275) | | | (96,473) | | | (80,384) | | | (80,242) | | | (26,322) |
Disallowed servicing assets | | | | (1,365) | | | (1,299) | | | (1,154) | | | (1,079) | | | (1,064) |
Noncumulative perpetual preferred stock | | | | (176,000) | | | (176,000) | | | (176,000) | | | (176,000) | | | (152,000) |
Noncumulative perpetual preferred stock issuance costs | | | | 10,130 | | | 10,130 | | | 10,130 | | | 10,115 | | | 7,639 |
Tier 1 common equity capital | | | | 513,759 | | | 501,932 | | | 497,916 | | | 491,132 | | | 587,098 |
Plus: Qualifying noncumulative perpetual preferred stock | | | | 176,000 | | | 176,000 | | | 176,000 | | | 176,000 | | | 68,000 |
Qualifying noncumulative perpetual preferred stock issuance costs | | | | (10,130) | | | (10,130) | | | (10,130) | | | (10,115) | | | (2,662) |
Subordinated capital notes | | | | 35,000 | | | 35,000 | | | 35,000 | | | 35,000 | | | 35,000 |
Tier 1 capital | | | | 714,629 | | | 702,802 | | | 698,786 | | | 692,017 | | | 687,435 |
Plus: Long-term debt qualifying as Tier 2 capital | | | | 26,800 | | | 40,200 | | | 40,200 | | | 50,200 | | | - |
Qualifying allowance for loan and lease losses | | | | 63,292 | | | 62,683 | | | 65,475 | | | 65,971 | | | 24,551 |
Tier 2 capital | | | | 90,092 | | | 102,883 | | | 105,675 | | | 116,171 | | | 24,551 |
Total risk-based capital | | | $ | 804,721 | | $ | 805,685 | | $ | 804,461 | | $ | 808,188 | | $ | 711,986 |
| | | | | | | | | | | | | | | | |
Risk-weighted assets | | | $ | 5,019,563 | | $ | 4,975,818 | | $ | 5,207,394 | | $ | 5,249,270 | | $ | 1,892,021 |
| | | | | | | | | | | | | | | | |
Leverage ratio | | | | 8.74% | | | 8.54% | | | 8.07% | | | 6.55% | | | 10.91% |
Tier 1 common ratio | | | | 10.24% | | | 10.09% | | | 9.56% | | | 9.36% | | | 31.03% |
Tier 1 risk-based capital ratio | | | | 14.24% | | | 14.12% | | | 13.42% | | | 13.18% | | | 36.33% |
Total risk-based capital ratio | | | | 16.03% | | | 16.19% | | | 15.45% | | | 15.40% | | | 37.63% |
OFG Bancorp (NYSE: OFG) | | | |
Table 10: Notes to Financial, Selected Metrics, Loans, and Consolidated Financial Statements (Tables 1 - 9) |
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(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 $13.1 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 issued 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 issued 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. This loans were sold during the quarter ended September 30, 2013. |
(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. |
(28) | Results for Q3 2013 includes $1.4 million loss from the sale of Oriental originated non-performing residential mortgage loans held-for-sale. |
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