Exhibit 99
OFG Bancorp Reports 1Q14 Results
SAN JUAN, Puerto Rico, April 28, 2014 – OFG Bancorp (NYSE: OFG) today reported results for the first quarter ended March 31, 2014.
1Q14 Highlights
· Income available to common shareholders totaled $20.3 million, or $0.42 per share diluted, compared to $16.6 million, or $0.35 per share diluted, in the preceding quarter and $17.7 million, or $0.37 per share, in the first quarter of 2013. 1Q14 results included a gain on the sale of securities of $4.4 million.
· Net interest margin continued strong at 5.90% compared to 6.01% in the fourth quarter of 2013, which benefited from some non-recurring items.
· Puerto Rico government related loan and investment security balances (excluding obligations of municipalities) fell 13.6%, to $545.5 million at March 31, 2014, from $631.6 million at December 31, 2013.
· OFG’s strong credit quality continued to improve, with declines in the non-performing loan rate for the fourth quarter in a row and in net charge offs ratio for the third straight quarter, both excluding acquired loans.
· Cost of deposits fell by 7 basis points, to 80 bps, from the fourth quarter of 2013, as OFG successfully grew demand and savings account balances in both dollars and as a proportion of deposits.
· Tangible book value per common share of $14.07 at March 31, 2014 increased 3.5%, from $13.60 at December 31, 2013, while book value per common share of $16.23 grew 3.1%, from $15.74 at December 31, 2013.
· Performance metrics were in line with OFG’s targets, with return on average assets of 1.18%, return on average tangible common stockholders' equity of 12.86%, and efficiency ratio of 50.03%.
· Late in the first quarter of 2014, OFG repurchased a total of 707,400 common shares, at an average price of $14.66 per share, as part of its current stock repurchase program.
CEO Comment
José Rafael Fernandez, President, Chief Executive Officer, and Vice Chairman, commented:
“OFG has delivered another strong quarter – our fifth consecutive one – since the close of the BBVA PR acquisition. We continued to show impressive growth in book value and capital, with little or no noise in the numbers.”
“In particular, our innovative products and high service levels are building our franchise and brand value by attracting new customers, expanding core deposits, and lowering cost of funds. Employee enthusiasm and growth momentum positions us well to be successful and differentiate Oriental in the market.”
“Puerto Rico has made some good progress in addressing its fiscal situation and in meeting its immediate liquidity needs. While the economic environment is still challenging, we have proven our ability over the years to navigate such conditions.
“Looking beyond 2014, we expect a notable increase in reported earnings as non-cash, amortization of the FDIC indemnification asset will be significantly lower.”
1Q14 Income Statement Highlights
Table 1 | 1Q14 | | 4Q13 |
($ in millions) | Reported GAAP | Adjust-ments | Adjusted Non-GAAP | | Reported GAAP | Adjust-ments1 | Adjusted Non-GAAP |
Loan income: non-covered | $85.2 | $-- | $85.2 | | $92.6 | $9.5 | $83.1 |
Loan income: covered | 23.4 | 1.6 2 | 21.8 | | 25.9 | 3.0 | 22.9 |
Total loan income | 108.6 | 1.6 | 107.0 | | 118.5 | 12.5 | 106.0 |
Provision for loan and lease losses (ex. acquired loans) | (5.6) | -- | (5.6) | | (6.9) | -- | (6.9) |
Provision for acquired loan and lease losses | (6.1) | -- | (6.1) | | (5.7) | (2.8) | (2.9) |
Total provision for loan and lease losses | (11.7) | -- | (11.7) | | (12.6) | (2.8) | (9.8) |
Banking service revenues | 10.6 | -- | 10.6 | | 7.8 | (2.9) | 10.7 |
Wealth management revenues | 6.9 | -- | 6.9 | | 7.8 | 1.0 | 6.8 |
Mortgage banking activities | 2.0 | -- | 2.0 | | 1.9 | -- | 1.9 |
FDIC shared-loss expense | (18.5) | (1.3) 2 | (17.2) | | (20.5) | (2.4) | (18.1) |
Total non-interest expenses | (61.5) | -- | (61.5) | | (65.7) | (4.4) | (61.3) |
Gain on sale of securities | 4.4 | 4.4 3 | -- | | -- | -- | -- |
(1) Adjustments as discussed in 4Q13 Conference Call presentation, dated February 4, 2014
(2) Cost recoveries for the quarter for the covered commercial portfolio and related impact on FDIC share loss expense
(3) Sale of $110.8 million of MBS at a gain of $4.4 million
The following compares the first quarter 2014 to the fourth quarter of 2013 with items removed from both periods, as reflected in Table 1.
· Non-covered loan income increased 2.5%, to $85.2 million from $83.1 million, primarily reflecting better re-pricing in certain commercial loans.
· Provision for loan and lease losses, excluding acquired loans, fell to $5.6 million from $6.9 million, while provision for acquired loans and leases increased.
· Banking service revenues continued at steady levels, with revenues of $10.6 million compared to $10.7 million.
· Wealth management revenues increased slightly. Despite weaker market conditions, revenues totaled $6.9 million compared to $6.8 million.
· Mortgage banking activities also increased. Revenues totaled $2.0 million compared to $1.9 million, but OFG expects headwinds in the quarters ahead from new regulations likely to reduce origination volume.
· FDIC indemnification asset amortization continued as expected, at $17.2 million compared to $18.1 million. Reported FDIC shared loss expense, at $18.5 million for 1Q14, was reduced due to lower cost recoveries versus 4Q13.
· Non-interest expenses were slightly higher, at $61.5 million compared to $61.3 million, reflecting higher costs on foreclosed real estate.
· Sale of securities. OFG sold $110.8 million of mortgage-backed securities (MBS), yielding 2.45%, at a gain of $4.4 million, taking advantage of market opportunities to realize gains and reduce some interest rate sensitivity. The securities were owned by the IBE subsidiary, which has tax advantages on its earnings and gains.
March 31, 2014 Balance Sheet Highlights
· Demand deposit and savings account balances resulted in an improved funding profile. At $3.4 billion, these balances were up 3.9% on a sequential quarter basis and 9.2% year over year, and now account for 63.4% of OFG’s deposit base, compared to 60.1% at December 31, 2013 and 55.3% a year ago.
· Puerto Rico government related debt fell as $98.7 million in principal amount of privately-placed securities were repaid by the issuer at par late in the first quarter of 2014.
· Average interest earning assets declined to $7.1 billion for the first quarter of 2014, from $7.3 billion for the fourth quarter of 2013. This was primarily due to the (i) contractual maturities late in the fourth quarter of 2014 of $142.5 million in Puerto Rico government related loans, in addition to the securities repaid in 1Q14; (ii) the previously mentioned sale of MBS; and (iii) normal prepayment of MBS of approximately $55 million.
· Total stockholders’ equity of $896.5 million at March 31, 2014 increased 1.3% from $884.9 million at December 31, 2013, reflecting increases in retained earnings and other comprehensive income, partially offset by stock repurchases.
· Stock repurchases. OFG utilized $10.4 million of existing Board authority to repurchase 707,400 shares. Approximately $23.1 million of authorization remains. Due to the timing of these repurchases, weighted average diluted shares declined approximately 389,000; the balance will affect the second quarter of 2014.
Credit Quality Highlights
OFG’s strong credit quality continued to improve in the first quarter of 2014. Auto loan quality began to stabilize as organically generated business has become more seasoned, while mortgage portfolio quality has continued to improve.
· Net charge offs (excluding acquired loans) declined to $5.2 million from $5.4 million in the fourth quarter of 2013. This reflected a drop in mortgage charge offs, partially offset by an increase from auto loans as collection and recovery processes continue to improve after a systems conversion in 4Q13.
· Nonperforming loan rates (excluding acquired loans) continued to fall, to 3.25% in the first quarter of 2014 compared to 3.32% in the fourth quarter of 2013 and 9.31% in the year ago quarter.
· Allowance for loan and lease losses (excluding acquired loans) increased slightly to $49.5 million compared to $49.1 million in the fourth quarter of 2013. OFG continues to hold a coverage ratio of reserves to loans of 1.95%.
Oriental Starts 50th Anniversary Celebration
During the first quarter of 2014, Oriental kicked off its 50th anniversary celebration by highlighting the bank’s strong financial performance, its track record of bringing innovative banking and financial services to Puerto Rico, and its tradition of helping communities.
“We are very grateful for our clients’ continuous support and the commitment of our more than 1,500 employees to become a leading institution in Puerto Rico,” said Mr. Fernández. “Oriental Bank began its business as a small savings and loan institution, helping residents finance the purchases of their first homes. Today, we are one of the leading banks in Puerto Rico. Throughout our 50-year history, we have made it a priority to help our clients manage their finances well. Along the way, we have demonstrated impressive financial performance, overcome challenges, and delivered solid returns to our stockholders.”
More details related to Oriental’s 50th Anniversary Celebration will be announced over the course of 2014.
Non-GAAP Financial Measures
From time to time, OFG uses certain non-GAAP measures of financial performance to supplement the financial statements presented in accordance with GAAP. OFG presents non-GAAP measures when its management believes that the additional information is useful and meaningful to investors. Non-GAAP measures do not have any standardized meaning and are therefore unlikely to be comparable to similar measures presented by other companies. The presentation of non-GAAP measures is not intended to be a substitute for, and should not be considered in isolation from, the financial measures reported in accordance with GAAP.
OFG’s management has reported and discussed the results of operations herein both on a GAAP basis and on an adjusted, non-GAAP basis that excludes certain items. The reconciliation of the tangible book value per common share and tangible common stockholders’ equity to the reported GAAP measures is presented in Table 9 of OFG’s Financial Supplement for the quarter ended March 31, 2014. The reconciliation of the adjusted, non-GAAP income statement is shown above in Table 1 of this news release.
Conference Call
A conference call to discuss OFG’s results for the first quarter of 2014, outlook and related matters will be held Tuesday, April 29, 2014 at 10:00 AM Eastern Time. The call will be accessible live via a webcast on OFG’s Investor Relations website at www.ofgbancorp.com. A webcast replay will be available shortly thereafter. Access the webcast link in advance to download any necessary software.
Financial Supplement
OFG’s Financial Supplement, with full financial tables for the quarter ended March 31, 2014, can be found on the Webcasts, Presentations & Other Files page, on OFG’s Investor Relations website 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) the rate of growth in the economy and employment levels, as well as general business and economic conditions; (ii) changes in interest rates, as well as the magnitude of such changes; (iii) a credit default by the government of Puerto Rico; (iv) the fiscal and monetary policies of the federal government and its agencies; (v) changes in federal bank regulatory and supervisory policies, including required levels of capital; (vi) the relative strength or weakness of the consumer and commercial credit sectors and of the real estate market in Puerto Rico; (vii) the performance of the stock and bond markets; (viii) competition in the financial services industry; and (ix) possible legislative, tax or regulatory changes.
For a discussion of such factors and certain risks and uncertainties to which OFG is subject, see OFG’s annual report on Form 10-K for the year ended December 31, 2013, as well as its other filings with the U.S. Securities and Exchange Commission. Other than to the extent required by applicable law, including the requirements of applicable securities laws, OFG assumes no obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.
About OFG Bancorp
Now in its 50th 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.
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Contacts
Puerto Rico: Alexandra López (allopez@orientalbank.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 March 31, 2014 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 | |
| Table 2: | | Statements of Operations | | 2 | |
| Table 3: | | Statements of Financial Condition | | 3-4 | |
| Table 4: | | Information on Loans and Production | | 5 | |
| Table 5: | | Average Balances, Net Interest Income and Net Interest Margin | | 6 | |
| Table 6: | | Loan Information and Performance Statistics (Excluding Acquired Loans) | | 7-8 | |
| Table 7: | | Allowance for Loan and Lease Losses | | 9 | |
| Table 8: | | Accretable Yield on Loans Accounted for Under ASC 310-30 (Loans Acquired | | | |
| | | with Deteriorated Credit Quality, Including those by Analogy) | | 10 | |
| Table 9: | | Reconciliation of Non-GAAP Measures and Calculation of Regulatory | | | |
| | | Capital Measures | | 11-12 | |
| Table 10: | | Notes to Financial Summary, Selected Metrics, Loans, and Consolidated | | | |
| | | Financial Statements | | 13 | |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 1: Financial and Statistical Summary - Consolidated (2)(3) |
| | | 2014 | | 2013 | | 2013 | | 2013 | | 2013 |
(Dollars in thousands, except per share data) (unaudited) | | | Q1 | | Q4 | | Q3 | | Q2 | | Q1 |
Earnings | | | | | | | | | | | | | | | | |
Net interest income | | | $ | 103,398 | | $ | 110,671 | | $ | 99,091 | | $ | 106,295 | | $ | 93,616 |
Non-interest income, net (core) | (4) | | | 19,423 | | | 17,546 | | | 21,675 | | | 23,395 | | | 22,651 |
Operating expenses | | | | 61,453 | | | 65,650 | | | 63,273 | | | 68,821 | | | 66,809 |
Provision for loan and lease losses | | | | 11,691 | | | 12,593 | | | 12,974 | | | 38,738 | | | 8,588 |
FDIC shared-loss expense, net | | | | 18,487 | | | 20,466 | | | 15,965 | | | 19,965 | | | 12,871 |
Net income before income taxes | | | | 35,532 | | | 29,608 | | | 26,206 | | | 5,606 | | | 28,318 |
Effective income tax rate | | | | 33.17% | | | 32.13% | | | 25.13% | | | -569.64% | | | 25.16% |
Net income | | | | 23,747 | | | 20,094 | | | 19,621 | | | 37,540 | | | 21,192 |
Net income available to common stockholders | | | $ | 20,282 | | $ | 16,628 | | $ | 16,156 | | $ | 34,074 | | $ | 17,727 |
Common Share Statistics | | | | | | | | | | | | | | | | |
Earnings per common share - basic | (7) | | $ | 0.45 | | $ | 0.36 | | $ | 0.35 | | $ | 0.75 | | $ | 0.39 |
Earnings per common share - diluted | (8) | | $ | 0.42 | | $ | 0.35 | | $ | 0.34 | | $ | 0.68 | | $ | 0.37 |
Average common shares outstanding | | | | 45,329 | | | 45,674 | | | 45,927 | | | 45,630 | | | 45,595 |
Average common shares outstanding and equivalents | | | | 52,598 | | | 52,987 | | | 53,322 | | | 52,968 | | | 52,892 |
Cash dividends per common share | (23) | | $ | 0.08 | | $ | 0.08 | | $ | 0.06 | | $ | 0.06 | | $ | 0.06 |
Book value per common share (period end) | | | $ | 16.23 | | $ | 15.74 | | $ | 15.63 | | $ | 15.45 | | $ | 15.44 |
Tangible book value per common share (period end) | (9) | | $ | 14.07 | | $ | 13.60 | | $ | 13.47 | | $ | 13.27 | | $ | 13.25 |
Balance Sheet (Quarterly Average Balances) | | | | | | | | | | | | | | | | |
Loans held for investment | (10) | | $ | 5,007,347 | | $ | 5,117,264 | | $ | 5,136,745 | | $ | 5,056,269 | | $ | 5,088,059 |
Interest-earning assets | | | | 7,108,864 | | | 7,302,033 | | | 7,438,957 | | | 7,535,360 | | | 7,747,454 |
Total assets | | | | 8,041,159 | | | 8,326,879 | | | 8,424,466 | | | 8,525,996 | | | 8,838,123 |
Interest-bearing deposits | | | | 4,835,146 | | | 4,914,335 | | | 4,811,176 | | | 4,850,631 | | | 4,836,908 |
Total deposits | | | | 5,332,515 | | | 5,535,093 | | | 5,654,274 | | | 5,612,811 | | | 5,593,728 |
Borrowings | | | | 1,632,782 | | | 1,742,115 | | | 1,734,769 | | | 1,863,383 | | | 2,198,599 |
Stockholders' equity | | | | 894,636 | | | 881,131 | | | 868,314 | | | 864,654 | | | 860,989 |
Common stockholders' equity | | | | 728,766 | | | 715,261 | | | 702,444 | | | 698,784 | | | 695,112 |
Performance Metrics | | | | | | | | | | | | | | | | |
Net interest margin | (11) | | | 5.90% | | | 6.01% | | | 5.28% | | | 5.66% | | | 4.90% |
Return on average assets | (12) | | | 1.18% | | | 0.97% | | | 0.93% | | | 1.76% | | | 0.96% |
Return on average tangible common stockholders' equity | (13) | | | 12.86% | | | 10.78% | | | 10.71% | | | 22.75% | | | 11.92% |
Efficiency ratio | (14) | | | 50.03% | | | 51.20% | | | 52.39% | | | 53.07% | | | 57.46% |
Full-time equivalent employees, period end | | | | 1,546 | | | 1,534 | | | 1,558 | | | 1,573 | | | 1,565 |
Credit Quality Metrics | (15) | | | | | | | | | | | | | | | |
Excluding acquired loans: | (1) | | | | | | | | | | | | | | | |
Allowance for loan and lease losses | | | $ | 49,507 | | $ | 49,081 | | $ | 47,573 | | $ | 45,701 | | $ | 42,334 |
Allowance as a % of loans held for investment | | | | 1.95% | | | 2.04% | | | 2.03% | | | 2.55% | | | 2.88% |
Net charge-offs | (21) | | $ | 5,199 | | $ | 5,427 | | $ | 5,058 | | $ | 32,552 | | $ | 3,383 |
Net charge-off rate | (16) | | | 0.86% | | | 0.91% | | | 1.02% | | | 8.89% | | | 1.06% |
Early delinquency rate (30 - 89 days past due) | (17) (18) | | | 4.51% | | | 4.97% | | | 4.16% | | | 5.72% | | | 5.88% |
Total delinquency rate (30 days and over) | (17) (18) | | | 8.10% | | | 8.92% | | | 8.04% | | | 10.42% | | | 15.02% |
Capital Ratios | (19) | | | | | | | | | | | | | | | |
Leverage ratio | | | | 9.51% | | | 9.11% | | | 8.74% | | | 8.54% | | | 8.07% |
Tier 1 common ratio | | | | 10.79% | | | 10.44% | | | 10.24% | | | 10.09% | | | 9.56% |
Tier 1 risk-based capital ratio | | | | 14.76% | | | 14.35% | | | 14.24% | | | 14.12% | | | 13.42% |
Total risk-based capital ratio | | | | 16.56% | | | 16.14% | | | 16.03% | | | 16.19% | | | 15.45% |
Tangible common equity ("TCE") ratio | | | | 8.16% | | | 7.71% | | | 7.41% | | | 7.25% | | | 7.01% |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 2: Consolidated Statements of Operations (2)(3) | |
| | Quarter Ended |
| | | March 31, | | December 31, | | September 30, | | June 30, | | March 31, |
(Dollars in thousands, except per share data) (unaudited) | | | 2014 | | 2013 | | 2013 | | 2013 | | 2013 |
Interest income: | | | | | | | | | | | | | | | | |
Loans | | | | | | | | | | | | | | | | |
Loans not covered under shared-loss agreements with the FDIC | | | $ | 85,243 | | $ | 92,565 | | $ | 87,655 | | $ | 91,105 | | $ | 80,807 |
Loans covered under shared-loss agreements with the FDIC | | | | 23,388 | | | 25,885 | | | 21,657 | | | 23,999 | | | 20,229 |
Total interest income from loans | | | | 108,631 | | | 118,450 | | | 109,312 | | | 115,104 | | | 101,036 |
Investment securities | | | | 14,443 | | | 13,607 | | | 11,789 | | | 11,198 | | | 13,136 |
Total interest income | | | | 123,074 | | | 132,057 | | | 121,101 | | | 126,302 | | | 114,172 |
Interest expense: | | | | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | | | | |
Core deposits | | | | 7,662 | | | 8,834 | | | 9,947 | | | 8,885 | | | 8,286 |
Brokered deposits | | | | 1,316 | | | 1,387 | | | 1,387 | | | 602 | | | 1,649 |
Total deposits | | | | 8,978 | | | 10,221 | | | 11,334 | | | 9,487 | | | 9,935 |
Borrowings | | | | 10,698 | | | 11,165 | | | 10,676 | | | 10,520 | | | 10,621 |
Total interest expense | | | | 19,676 | | | 21,386 | | | 22,010 | | | 20,007 | | | 20,556 |
Net interest income | | | | 103,398 | | | 110,671 | | | 99,091 | | | 106,295 | | | 93,616 |
Provision for loan and lease losses, excluding acquired loans | | | | 5,625 | | | 6,934 | | | 6,930 | | | 35,919 | | | 5,795 |
Provision for acquired loan and lease losses | (1) | | | 6,066 | | | 5,659 | | | 6,044 | | | 2,819 | | | 2,793 |
Total provision for loan and lease losses, net | | | | 11,691 | | | 12,593 | | | 12,974 | | | 38,738 | | | 8,588 |
Net interest income after provision for loan and lease losses | | | | 91,707 | | | 98,078 | | | 86,117 | | | 67,557 | | | 85,028 |
Non-interest income: | | | | | | | | | | | | | | | | |
Banking service revenues | | | | 10,606 | | | 7,795 | | | 12,183 | | | 12,840 | | | 11,838 |
Financial services revenues | | | | 6,867 | | | 7,839 | | | 7,394 | | | 8,030 | | | 7,660 |
Mortgage banking activities | | | | 1,950 | | | 1,912 | | | 2,098 | | | 2,525 | | | 3,153 |
Total banking and financial services revenues | | | | 19,423 | | | 17,546 | | | 21,675 | | | 23,395 | | | 22,651 |
FDIC shared-loss expense, net | | | | (18,487) | | | (20,466) | | | (15,965) | | | (19,965) | | | (12,871) |
Net gain (loss) on: | | | | | | | | | | | | | | | | |
Sales of securities and derivative activities | | | | 3,924 | | | (158) | | | (914) | | | 1,108 | | | (826) |
Early extinguishment of borrowings | | | | - | | | - | | | - | | | - | | | 1,061 |
Other | (20) | | | 418 | | | 258 | | | (1,434) | | | 2,332 | | | 84 |
Total non-interest income (loss), net | | | | 5,278 | | | (2,820) | | | 3,362 | | | 6,870 | | | 10,099 |
Non-interest expense: | | | | | | | | | | | | | | | | |
Compensation and employee benefits | | | | 21,787 | | | 22,030 | | | 22,590 | | | 24,089 | | | 23,249 |
Rent and occupancy costs | | | | 8,309 | | | 8,856 | | | 8,270 | | | 8,066 | | | 9,216 |
Merger and restructuring charges | (5) | | | - | | | 4,600 | | | 2,252 | | | 5,273 | | | 5,534 |
General and administrative expenses | | | | 31,357 | | | 30,164 | | | 30,161 | | | 31,393 | | | 28,810 |
Total non-interest expense | | | | 61,453 | | | 65,650 | | | 63,273 | | | 68,821 | | | 66,809 |
Income before income taxes | | | | 35,532 | | | 29,608 | | | 26,206 | | | 5,606 | | | 28,318 |
Income tax expense (benefit) | (6) | | | 11,785 | | | 9,514 | | | 6,585 | | | (31,934) | | | 7,126 |
Net income | | | | 23,747 | | | 20,094 | | | 19,621 | | | 37,540 | | | 21,192 |
Less: dividends on preferred stock | | | | | | | | | | | | | | | | |
Convertible preferred stock | | | | (1,838) | | | (1,838) | | | (1,838) | | | (1,838) | | | (1,838) |
Other preferred stock | | | | (1,627) | | | (1,628) | | | (1,627) | | | (1,628) | | | (1,627) |
Net income available to common shareholders | | | $ | 20,282 | | $ | 16,628 | | $ | 16,156 | | $ | 34,074 | | $ | 17,727 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | |
Table 3: Consolidated Statements of Financial Condition (2)(3) | | | | | | | | |
| | | March 31, | | December 31, | | September 30, | | June 30, | | March 31, |
(Dollars in thousands) (unaudited) | | | 2014 | | 2013 | | 2013 | | 2013 | | 2013 |
Cash and cash equivalents | | | $ | 639,806 | | $ | 703,468 | | $ | 657,520 | | $ | 748,313 | | $ | 561,446 |
Securities purchased under agreements to resell | | | | - | | | 60,000 | | | 85,000 | | | - | | | 60,000 |
Investments: | | | | | | | | | | | | | | | | |
Trading securities | | | | 1,910 | | | 1,869 | | | 2,124 | | | 2,209 | | | 1,787 |
Investment securities available-for-sale, at fair value, with amortized cost of $1,437,106 | | | | | | | | | | | | | | | | |
(December 31, 2013 - $1,575,043; September 30, 2013 - $1,654,133; June 30, 2013 - $1,807,335; | | | | | | | | | | | | | | | | |
March 31, 2013 - $1,948,685) | | | | | | | | | | | | | | | | |
Mortgage-backed securities | | | | 1,334,865 | | | 1,439,539 | | | 1,526,485 | | | 1,650,165 | | | 1,837,613 |
Other investment securities | | | | 120,820 | | | 148,886 | | | 150,763 | | | 186,064 | | | 175,542 |
Total investment securities available-for-sale | | | | 1,455,685 | | | 1,588,425 | | | 1,677,248 | | | 1,836,229 | | | 2,013,155 |
Federal Home Loan Bank (FHLB) stock, at cost | | | | 24,430 | | | 24,450 | | | 24,470 | | | 22,156 | | | 33,458 |
Other investments | | | | 65 | | | 65 | | | 65 | | | 66 | | | 66 |
Total investments | | | | 1,482,090 | | | 1,614,809 | | | 1,703,907 | | | 1,860,660 | | | 2,048,466 |
Securities sold but not yet delivered | | | | - | | | - | | | - | | | 16,732 | | | - |
Loans: | | | | | | | | | | | | | | | | |
Loans not covered under shared-loss agreements with the FDIC: | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | |
Puerto Rico Government and its dependencies | | | | 718,823 | | | 695,996 | | | 810,391 | | | 531,543 | | | 561,613 |
Other Commercial Loans | | | | 1,178,287 | | | 1,180,886 | | | 1,166,950 | | | 1,205,179 | | | 1,333,442 |
| | | | 1,897,110 | | | 1,876,882 | | | 1,977,341 | | | 1,736,722 | | | 1,895,055 |
Mortgage | | | | 1,485,604 | | | 1,484,168 | | | 1,472,824 | | | 1,527,852 | | | 1,575,103 |
Consumer | | | | 247,851 | | | 247,539 | | | 253,754 | | | 246,387 | | | 240,548 |
Auto and Leasing | | | | 1,058,694 | | | 1,060,603 | | | 1,065,749 | | | 1,067,071 | | | 1,068,081 |
Total loans receivable not covered under shared-loss agreements with the FDIC, gross | | | | 4,689,259 | | | 4,669,192 | | | 4,769,668 | | | 4,578,032 | | | 4,778,787 |
Less: Deferred loan costs (fees), net | | | | 2,318 | | | 1,035 | | | 120 | | | (831) | | | (2,138) |
Total loans receivable not covered under shared-loss agreements with the FDIC | | | | 4,691,577 | | | 4,670,227 | | | 4,769,788 | | | 4,577,201 | | | 4,776,649 |
Allowance for loan and lease losses on non-covered loans | | | | (56,183) | | | (54,298) | | | (49,614) | | | (46,625) | | | (42,720) |
Loans receivable held for investment, net | | | | 4,635,394 | | | 4,615,929 | | | 4,720,174 | | | 4,530,576 | | | 4,733,929 |
Mortgage loans held for sale | | | | 19,355 | | | 46,529 | | | 47,085 | | | 78,350 | | | 77,644 |
Total loans not covered under shared-loss agreements with the FDIC, net | | | | 4,654,749 | | | 4,662,458 | | | 4,767,259 | | | 4,608,926 | | | 4,811,573 |
| | | | | | | | | | | | | | | | |
Loans covered under shared-loss agreements with the FDIC | | | | 402,263 | | | 409,690 | | | 418,119 | | | 423,372 | | | 432,708 |
Allowance for loan and lease losses on covered loans | | | | (54,398) | | | (52,729) | | | (56,555) | | | (53,992) | | | (52,974) |
Loans covered under shared-loss agreements with the FDIC, net | | | | 347,865 | | | 356,961 | | | 361,564 | | | 369,380 | | | 379,734 |
Total loans, net | | | | 5,002,614 | | | 5,019,419 | | | 5,128,823 | | | 4,978,306 | | | 5,191,307 |
Other assets: | | | | | | | | | | | | | | | | |
FDIC shared-loss indemnification asset | | | | 166,194 | | | 189,240 | | | 225,581 | | | 253,378 | | | 283,124 |
Derivative assets | | | | 15,861 | | | 20,502 | | | 21,345 | | | 19,655 | | | 23,233 |
Prepaid expenses | | | | 15,531 | | | 15,439 | | | 16,967 | | | 23,568 | | | 22,852 |
Deferred tax asset, net | | | | 127,657 | | | 137,564 | | | 147,968 | | | 159,316 | | | 122,026 |
Foreclosed real estate and repossessed properties | | | | 110,849 | | | 102,607 | | | 94,086 | | | 91,267 | | | 87,802 |
Premises and equipment, net | | | | 83,029 | | | 82,903 | | | 83,145 | | | 84,300 | | | 83,461 |
Goodwill | | | | 86,069 | | | 86,069 | | | 86,069 | | | 86,069 | | | 86,069 |
Accounts receivable and other assets | | | | 125,938 | | | 125,995 | | | 147,487 | | | 131,276 | | | 151,825 |
Total assets | | | $ | 7,855,638 | | $ | 8,158,015 | | $ | 8,397,898 | | $ | 8,452,840 | | $ | 8,721,611 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | |
Table 3: Consolidated Statement of Financial Condition (Continued) (2)(3) | | | | | | | | |
| | | March 31, | | December 31, | | September 30, | | June 30, | | March 31, |
(Dollars in thousands) (unaudited) | | | 2014 | | 2013 | | 2013 | | 2013 | | 2013 |
Deposits: | | | | | | | | | | | | | | | | |
Demand deposits | | | $ | 2,188,458 | | $ | 2,138,005 | | $ | 2,177,120 | | $ | 2,294,674 | | $ | 2,183,825 |
Savings accounts | | | | 1,172,117 | | | 1,096,271 | | | 987,371 | | | 909,755 | | | 892,654 |
Time deposits | | | | 1,227,504 | | | 1,320,875 | | | 1,651,303 | | | 1,687,115 | | | 1,647,289 |
Brokered deposits | | | | 712,913 | | | 828,114 | | | 794,672 | | | 774,092 | | | 840,432 |
Total deposits | | | | 5,300,992 | | | 5,383,265 | | | 5,610,466 | | | 5,665,636 | | | 5,564,200 |
Borrowings: | | | | | | | | | | | | | | | | |
Short-term borrowings | | | | - | | | - | | | - | | | - | | | 60,829 |
Securities sold under agreements to repurchase | | | | 1,012,240 | | | 1,267,618 | | | 1,267,423 | | | 1,313,870 | | | 1,491,675 |
Advances from FHLB and other borrowings | | | | 339,397 | | | 339,806 | | | 340,010 | | | 292,306 | | | 432,642 |
Federal funds purchased | | | | 23,712 | | | - | | | 13,202 | | | 29,431 | | | 29,612 |
Subordinated capital notes | | | | 100,404 | | | 100,010 | | | 99,486 | | | 98,961 | | | 98,436 |
Total borrowings | | | | 1,475,753 | | | 1,707,434 | | | 1,720,121 | | | 1,734,568 | | | 2,113,194 |
Other liabilities: | | | | | | | | | | | | | | | | |
Derivative liabilities | | | | 13,830 | | | 14,937 | | | 16,741 | | | 16,701 | | | 24,024 |
Acceptances outstanding | | | | 28,152 | | | 23,042 | | | 31,881 | | | 30,571 | | | 32,512 |
Accrued expenses and other liabilities | | | | 140,420 | | | 144,424 | | | 138,963 | | | 134,440 | | | 117,439 |
Total liabilities | | | | 6,959,147 | | | 7,273,102 | | | 7,518,172 | | | 7,581,916 | | | 7,851,369 |
Stockholders' equity: | | | | | | | | | | | | | | | | |
Preferred stock | | | | 176,000 | | | 176,000 | | | 176,000 | | | 176,000 | | | 176,000 |
Common stock | | | | 52,714 | | | 52,707 | | | 52,691 | | | 52,689 | | | 52,671 |
Additional paid-in capital | | | | 538,287 | | | 538,071 | | | 538,231 | | | 538,105 | | | 537,500 |
Legal surplus | | | | 64,292 | | | 61,957 | | | 59,867 | | | 57,906 | | | 54,128 |
Retained earnings | | | | 147,919 | | | 133,629 | | | 122,747 | | | 111,292 | | | 83,739 |
Treasury stock, at cost | (24) | | | (90,743) | | | (80,642) | | | (80,642) | | | (80,834) | | | (80,847) |
Accumulated other comprehensive income, net | | | | 8,022 | | | 3,191 | | | 10,832 | | | 15,766 | | | 47,051 |
Total stockholders' equity | | | | 896,491 | | | 884,913 | | | 879,726 | | | 870,924 | | | 870,242 |
Total liabilities and stockholders' equity | | | $ | 7,855,638 | | $ | 8,158,015 | | $ | 8,397,898 | | $ | 8,452,840 | | $ | 8,721,611 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 4: Information on Loan Portfolio and Production | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | March 31, | | December 31, | | September 30, | | June 30, | | March 31, |
(Dollars in thousands) (unaudited) | | | 2014 | | 2013 | | 2013 | | 2013 | | 2013 |
Acquired loans: | (1) | | | | | | | | | | | | | | | |
Non-covered loans | | | | | | | | | | | | | | | | |
Accounted for under ASC 310-30 | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | $ | 1,900,112 | | $ | 1,998,913 | | $ | 2,091,796 | | $ | 2,445,112 | | $ | 2,776,136 |
Period-end carrying amount | | | | 1,754,041 | | | 1,832,213 | | | 1,904,324 | | | 2,203,272 | | | 2,497,576 |
Average carrying amount | | | | 1,805,535 | | | 1,880,702 | | | 2,155,889 | | | 2,368,459 | | | 2,555,217 |
Accounted for under ASC 310-20 | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | | 381,405 | | | 420,646 | | | 494,286 | | | 566,642 | | | 791,360 |
Period-end carrying amount | | | | 392,491 | | | 435,439 | | | 517,842 | | | 585,700 | | | 811,113 |
Average carrying amount | | | | 424,766 | | | 482,396 | | | 628,363 | | | 849,281 | | | 870,871 |
Covered loans | | | | | | | | | | | | | | | | |
Accounted for under ASC 310-30 | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | | 750,781 | | | 812,672 | | | 861,900 | | | 897,184 | | | 931,923 |
Period-end carrying amount | | | | 347,865 | | | 356,961 | | | 361,564 | | | 369,380 | | | 379,734 |
Average carrying amount | | | | 355,531 | | | 358,158 | | | 366,703 | | | 374,611 | | | 391,003 |
| | | | | | | | | | | | | | | | |
Total acquired loans | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | | 3,032,298 | | | 3,232,231 | | | 3,447,982 | | | 3,908,938 | | | 4,499,419 |
Period-end carrying amount | | | | 2,494,397 | | | 2,624,613 | | | 2,783,730 | | | 3,158,352 | | | 3,688,423 |
Average carrying amount | | | | 2,585,832 | | | 2,721,256 | | | 3,150,955 | | | 3,592,351 | | | 3,817,091 |
| | | | | | | | | | | | | | | | |
Originated and other loans held for investment: | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | | 2,558,795 | | | 2,496,751 | | | 2,438,310 | | | 1,792,786 | | | 1,469,477 |
Period-end carrying amount | | | | 2,542,727 | | | 2,401,540 | | | 2,347,502 | | | 1,789,060 | | | 1,470,098 |
Average carrying amount | | | | 2,421,514 | | | 2,396,008 | | | 1,985,790 | | | 1,463,918 | | | 1,270,968 |
| | | | | | | | | | | | | | | | |
Total loans | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | $ | 5,591,093 | | $ | 5,728,982 | | $ | 5,886,292 | | $ | 5,701,724 | | $ | 5,968,896 |
Period-end carrying amount | | | | 5,037,124 | | | 5,026,153 | | | 5,131,232 | | | 4,947,412 | | | 5,158,521 |
Average carrying amount | | | | 5,007,347 | | | 5,117,264 | | | 5,136,745 | | | 5,056,269 | | | 5,088,059 |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | 2014 | | 2013 | | 2013 | | 2013 | | 2013 |
(Dollars in thousands) (unaudited) | | | Q1 | | Q4 | | Q3 | | Q2 | | Q1 |
Quarterly loan production | | | | | | | | | | | | | | | | |
Mortgage | | | $ | 50,843 | | $ | 67,535 | | $ | 60,676 | | $ | 101,279 | | $ | 77,124 |
Commercial | | | | 39,769 | | | 156,898 | | | 365,300 | | | 104,538 | | | 74,101 |
Consumer | | | | 27,796 | | | 23,604 | | | 28,586 | | | 26,634 | | | 22,614 |
Auto and Leasing | | | | 93,617 | | | 84,639 | | | 94,967 | | | 94,737 | | | 100,981 |
Total | | | $ | 212,025 | | $ | 332,676 | | $ | 549,529 | | $ | 327,188 | | $ | 274,820 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Table 5: Average Balances, Net Interest Income and Net Interest Margin | | |
| | | 2014 Q1 | | 2013 Q4 | | 2013 Q3 | | 2013 Q2 | | 2013 Q1 | |
| | | | | Interest | | | | | | | Interest | | | | | | | Interest | | | | | | | Interest | | | | | | | Interest | | | | |
| | | Average | | Income/ | | Yield/ | | Average | | Income/ | | Yield/ | | Average | | Income/ | | Yield/ | | Average | | Income/ | | Yield/ | | Average | | Income/ | | Yield/ | |
(Dollars in thousands) (unaudited) | | | Balance | | Expense | | Rate | | Balance | | Expense | | Rate | | Balance | | Expense | | Rate | | Balance | | Expense | | Rate | | Balance | | Expense | | Rate | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest earning assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash equivalents and securities purchased under agreements to resell | | | $ | 482,497 | | $ | 283 | | 0.24 | % | | $ | 532,753 | | $ | 366 | | 0.27 | % | | $ | 538,094 | | $ | 241 | | 0.18 | % | | $ | 541,038 | | $ | 242 | | 0.18 | % | | $ | 551,242 | | $ | 311 | | 0.23 | % | |
Investment securities | | | | 1,619,020 | | | 14,160 | | 3.55 | % | | | 1,652,016 | | | 13,241 | | 3.18 | % | | | 1,764,118 | | | 11,548 | | 2.60 | % | | | 1,938,053 | | | 10,956 | | 2.27 | % | | | 2,108,153 | | | 12,828 | | 2.47 | % | |
Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Originated and other loans | | | | 2,421,514 | | | 39,003 | | 6.53 | % | | | 2,396,008 | | | 37,543 | | 6.22 | % | | | 1,985,790 | | | 30,678 | | 6.13 | % | | | 1,463,918 | | | 23,363 | | 6.40 | % | | | 1,270,968 | | | 20,372 | | 6.50 | % | |
Acquired loans accounted for under ASC 310-30 | | | | 1,805,535 | | | 40,269 | | 9.05 | % | | | 1,880,702 | | | 48,731 | | 10.28 | % | | | 2,155,889 | | | 48,351 | | 8.90 | % | | | 2,368,459 | | | 54,427 | | 9.22 | % | | | 2,555,217 | | | 47,669 | | 7.57 | % | |
Acquired loans accounted for under ASC 310-20 | | | | 424,766 | | | 5,971 | | 5.70 | % | | | 482,396 | | | 6,291 | | 5.17 | % | | | 628,363 | | | 8,624 | | 5.45 | % | | | 849,281 | | | 13,315 | | 6.29 | % | | | 870,871 | | | 12,764 | | 5.94 | % | |
Loans not covered under shared-loss agreements with the FDIC | | | | 4,651,816 | | | 85,243 | | 7.43 | % | | | 4,759,106 | | | 92,565 | | 7.72 | % | | | 4,770,042 | | | 87,653 | | 7.29 | % | | | 4,681,658 | | | 91,105 | | 7.81 | % | | | 4,697,056 | | | 80,805 | | 6.98 | % | |
Loans covered under shared-loss agreements with the FDIC | | | | 355,531 | | | 23,388 | | 26.68 | % | | | 358,158 | | | 25,885 | | 28.67 | % | | | 366,703 | | | 21,657 | | 23.43 | % | | | 374,611 | | | 23,999 | | 25.70 | % | | | 391,003 | | | 20,229 | | 20.98 | % | |
Total loans | | | | 5,007,347 | | | 108,631 | | 8.80 | % | | | 5,117,264 | | | 118,450 | | 9.18 | % | | | 5,136,745 | | | 109,310 | | 8.44 | % | | | 5,056,269 | | | 115,104 | | 9.13 | % | | | 5,088,059 | | | 101,034 | | 8.05 | % | |
Total interest-earning assets | | | $ | 7,108,864 | | $ | 123,074 | | 7.02 | % | | $ | 7,302,033 | | $ | 132,057 | | 7.18 | % | | $ | 7,438,957 | | $ | 121,099 | | 6.46 | % | | $ | 7,535,360 | | $ | 126,302 | | 6.72 | % | | $ | 7,747,454 | | $ | 114,173 | | 5.98 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Demand deposits | | | $ | 2,160,626 | | $ | 2,324 | | 0.44 | % | | $ | 2,197,151 | | $ | 2,665 | | 0.48 | % | | $ | 2,238,164 | | $ | 2,778 | | 0.49 | % | | $ | 2,159,859 | | $ | 1,966 | | 0.37 | % | | $ | 2,219,855 | | $ | 3,739 | | 0.68 | % | |
Savings accounts | | | | 1,126,987 | | | 2,296 | | 0.83 | % | | | 1,056,645 | | | 2,347 | | 0.88 | % | | | 941,892 | | | 2,313 | | 0.97 | % | | | 893,804 | | | 3,015 | | 1.35 | % | | | 859,254 | | | 1,807 | | 0.85 | % | |
Time deposits | | | | 1,293,344 | | | 4,405 | | 1.38 | % | | | 1,510,049 | | | 5,553 | | 1.46 | % | | | 1,674,495 | | | 6,530 | | 1.55 | % | | | 1,700,949 | | | 6,683 | | 1.58 | % | | | 1,658,168 | | | 7,253 | | 1.77 | % | |
Brokered deposits | | | | 751,558 | | | 1,516 | | 0.82 | % | | | 771,248 | | | 1,610 | | 0.83 | % | | | 799,723 | | | 1,679 | | 0.83 | % | | | 858,199 | | | 1,790 | | 0.84 | % | | | 856,451 | | | 1,989 | | 0.94 | % | |
| | | | 5,332,515 | | | 10,541 | | 0.80 | % | | | 5,535,093 | | | 12,175 | | 0.87 | % | | | 5,654,274 | | | 13,300 | | 0.93 | % | | | 5,612,811 | | | 13,454 | | 0.96 | % | | | 5,593,728 | | | 14,788 | | 1.07 | % | |
Purchase accounting and other adjustments | | | | - | | | (1,563) | | - | | | | - | | | (1,954) | | - | | | | - | | | (1,968) | | - | | | | - | | | (3,967) | | - | | | | - | | | (4,852) | | - | | |
Total deposits | | | | 5,332,515 | | | 8,978 | | 0.68 | % | | | 5,535,093 | | | 10,221 | | 0.73 | % | | | 5,654,274 | | | 11,332 | | 0.80 | % | | | 5,612,811 | | | 9,487 | | 0.68 | % | | | 5,593,728 | | | 9,936 | | 0.72 | % | |
Borrowings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Securities sold under agreements to repurchase | | | | 1,156,747 | | | 7,411 | | 2.60 | % | | | 1,265,000 | | | 7,680 | | 2.41 | % | | | 1,268,544 | | | 7,211 | | 2.26 | % | | | 1,356,716 | | | 7,109 | | 2.10 | % | | | 1,525,575 | | | 7,248 | | 1.93 | % | |
Advances from FHLB and other borrowings | | | | 375,862 | | | 2,295 | | 2.48 | % | | | 377,422 | | | 2,344 | | 2.46 | % | | | 366,964 | | | 2,321 | | 2.51 | % | | | 408,019 | | | 2,241 | | 2.20 | % | | | 529,365 | | | 1,713 | | 1.31 | % | |
Subordinated capital notes | | | | 100,173 | | | 992 | | 4.02 | % | | | 99,693 | | | 1,141 | | 4.54 | % | | | 99,261 | | | 1,144 | | 4.57 | % | | | 98,648 | | | 1,170 | | 4.76 | % | | | 143,659 | | | 1,660 | | 4.69 | % | |
Total borrowings | | | | 1,632,782 | | | 10,698 | | 2.66 | % | | | 1,742,115 | | | 11,165 | | 2.54 | % | | | 1,734,769 | | | 10,676 | | 2.44 | % | | | 1,863,383 | | | 10,520 | | 2.26 | % | | | 2,198,599 | | | 10,621 | | 1.96 | % | |
Total interest-bearing liabilities | | | $ | 6,965,297 | | $ | 19,676 | | 1.15 | % | | $ | 7,277,208 | | $ | 21,386 | | 1.17 | % | | $ | 7,389,043 | | $ | 22,008 | | 1.18 | % | | $ | 7,476,194 | | $ | 20,007 | | 1.07 | % | | $ | 7,792,327 | | $ | 20,557 | | 1.07 | % | |
Interest rate spread | | | | | | $ | 103,398 | | 5.87 | % | | | | | $ | 110,671 | | 6.01 | % | | | | | $ | 99,091 | | 5.28 | % | | | | | $ | 106,295 | | 5.65 | % | | | | | $ | 93,616 | | 4.91 | % | |
Net interest margin | | | | | | | | | 5.90 | % | | | | | | | | 6.01 | % | | | | | | | | 5.28 | % | | | | | | | | 5.66 | % | | | | | | | | 4.90 | % | |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 6: Loan Information and Performance Statistics (Excluding Acquired Loans) (1) | | | |
| | | 2014 | | 2013 | | 2013 | | 2013 | | 2013 |
(Dollars in thousands) (unaudited) | | | Q1 | | Q4 | | Q3 | | Q2 | | Q1 |
Net Charge-offs | | | | | | | | | | | | | | | | |
Mortgage: | | | | | | | | | | | | | | | | |
Charge-offs | (21) | | $ | 1,214 | | $ | 3,102 | | $ | 1,758 | | $ | 29,119 | | $ | 2,588 |
Recoveries | | | | (148) | | | (6) | | | - | | | - | | | - |
Total mortgage | | | | 1,066 | | | 3,096 | | | 1,758 | | | 29,119 | | | 2,588 |
Commercial: | | | | | | | | | | | | | | | | |
Charge-offs | | | | 419 | | | 211 | | | 2,234 | | | 2,887 | | | 557 |
Recoveries | | | | (98) | | | (91) | | | (28) | | | (234) | | | (28) |
Total commercial | | | | 321 | | | 120 | | | 2,206 | | | 2,653 | | | 529 |
Consumer: | | | | | | | | | | | | | | | | |
Charge-offs | | | | 838 | | | 451 | | | 465 | | | 323 | | | 246 |
Recoveries | | | | (147) | | | (23) | | | (37) | | | (43) | | | (65) |
Total consumer | | | | 691 | | | 428 | | | 428 | | | 280 | | | 181 |
Auto and Leasing: | | | | | | | | | | | | | | | | |
Charge-offs | | | | 4,645 | | | 2,496 | | | 1,305 | | | 709 | | | 91 |
Recoveries | | | | (1,524) | | | (713) | | | (639) | | | (209) | | | (6) |
Total auto and leasing | | | | 3,121 | | | 1,783 | | | 666 | | | 500 | | | 85 |
Total | | | $ | 5,199 | | $ | 5,427 | | $ | 5,058 | | $ | 32,552 | | $ | 3,383 |
Net Charge-off Rates | | | | | | | | | | | | | | | | |
Mortgage | | | | 0.57% | | | 1.66% | | | 0.92% | | | 14.50% | | | 1.40% |
Commercial | | | | 0.11% | | | 0.04% | | | 1.04% | | | 2.71% | | | 0.57% |
Consumer | | | | 2.16% | | | 1.46% | | | 1.75% | | | 1.44% | | | 1.23% |
Auto and Leasing | | | | 2.99% | | | 2.02% | | | 0.98% | | | 1.05% | | | 0.34% |
Total | | | | 0.86% | | | 0.91% | | | 1.02% | | | 8.89% | | | 1.06% |
Period-end Loans Held For Investment | | | | | | | | | | | | | | | | |
Mortgage: | | | | | | | | | | | | | | | | |
Traditional, Non traditional, and Loans under Loss Mitigation | | | $ | 746,868 | | $ | 731,345 | | $ | 714,568 | | $ | 726,666 | | $ | 773,649 |
GNMA's buy-back option program | | | | 35,282 | | | 34,920 | | | 32,511 | | | 32,513 | | | 20,190 |
Total mortgage | | | | 782,150 | | | 766,265 | | | 747,079 | | | 759,179 | | | 793,839 |
Commercial | | | | 1,170,145 | | | 1,127,657 | | | 1,173,212 | | | 702,270 | | | 459,316 |
Consumer | | | | 142,492 | | | 127,744 | | | 113,509 | | | 94,519 | | | 70,254 |
Auto and Leasing | | | | 447,940 | | | 379,874 | | | 313,702 | | | 233,092 | | | 146,689 |
Total | | | $ | 2,542,727 | | $ | 2,401,540 | | $ | 2,347,502 | | $ | 1,789,060 | | $ | 1,470,098 |
Average Loans Held For Investment | | | | | | | | | | | | | | | | |
Mortgage | | | $ | 753,248 | | $ | 744,989 | | $ | 763,929 | | $ | 803,272 | | $ | 740,072 |
Commercial | | | | 1,121,953 | | | 1,180,142 | | | 852,395 | | | 392,261 | | | 372,941 |
Consumer | | | | 128,239 | | | 117,391 | | | 97,738 | | | 77,948 | | | 58,908 |
Auto and Leasing | | | | 418,074 | | | 353,486 | | | 271,727 | | | 190,438 | | | 99,048 |
Total | | | $ | 2,421,514 | | $ | 2,396,008 | | $ | 1,985,790 | | $ | 1,463,918 | | $ | 1,270,968 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 6: Loan Information and Performance Statistics (Excluding Acquired Loans) (Continued) (1) |
| | | 2014 | | 2013 | | 2013 | | 2013 | | 2013 |
(Dollars in thousands) (unaudited) | | | Q1 | | Q4 | | Q3 | | Q2 | | Q1 |
Early Delinquency (30 - 89 days past due) | | | | | | | | | | | | | | | | |
Mortgage | (17) (18) | | $ | 67,016 | | $ | 72,028 | | $ | 69,919 | | $ | 77,728 | | $ | 78,316 |
Commercial | | | | 2,419 | | | 9,581 | | | 4,560 | | | 12,804 | | | 4,069 |
Consumer | | | | 2,995 | | | 2,665 | | | 1,983 | | | 835 | | | 680 |
Auto and Leasing | | | | 42,347 | | | 34,968 | | | 21,186 | | | 10,901 | | | 3,313 |
Total | | | $ | 114,777 | | $ | 119,242 | | $ | 97,648 | | $ | 102,268 | | $ | 86,378 |
Early Delinquency Rates (30 - 89 days past due) | | | | | | | | | | | | | | | | |
Mortgage | (17) (18) | | | 8.57% | | | 9.40% | | | 9.36% | | | 10.24% | | | 9.87% |
Commercial | | | | 0.21% | | | 0.85% | | | 0.39% | | | 1.82% | | | 0.89% |
Consumer | | | | 2.10% | | | 2.09% | | | 1.75% | | | 0.88% | | | 0.97% |
Auto and Leasing | | | | 9.45% | | | 9.21% | | | 6.75% | | | 4.68% | | | 2.26% |
Total | | | | 4.51% | | | 4.97% | | | 4.16% | | | 5.72% | | | 5.88% |
Total Delinquency (30 days and over past due) | | | | | | | | | | | | | | | | |
Mortgage: | (17) (18) | | | | | | | | | | | | | | | |
Traditional, Non traditional, and Loans under Loss Mitigation | | | $ | 107,908 | | $ | 111,263 | | $ | 102,672 | | $ | 114,452 | | $ | 168,527 |
GNMA's buy-back option program | | | | 35,282 | | | 34,920 | | | 32,511 | | | 32,513 | | | 20,190 |
Total mortgage | | | | 143,190 | | | 146,183 | | | 135,183 | | | 146,965 | | | 188,717 |
Commercial | | | | 10,865 | | | 24,738 | | | 27,249 | | | 26,251 | | | 27,714 |
Consumer | | | | 3,674 | | | 3,315 | | | 2,408 | | | 1,205 | | | 1,021 |
Auto and Leasing | | | | 48,219 | | | 40,057 | | | 23,822 | | | 11,997 | | | 3,385 |
Total | | | $ | 205,948 | | $ | 214,293 | | $ | 188,662 | | $ | 186,418 | | $ | 220,837 |
Total Delinquency Rates (30 days and over past due) | | | | | | | | | | | | | | | | |
Mortgage: | (17) (18) | | | | | | | | | | | | | | | |
Traditional, Non traditional, and Loans under Loss Mitigation | | | | 13.80% | | | 14.52% | | | 13.74% | | | 15.08% | | | 21.23% |
GNMA's buy-back option program | | | | 4.51% | | | 4.56% | | | 4.35% | | | 4.28% | | | 2.54% |
Total mortgage | | | | 18.31% | | | 19.08% | | | 18.09% | | | 19.36% | | | 23.77% |
Commercial | | | | 0.93% | | | 2.19% | | | 2.32% | | | 3.74% | | | 6.03% |
Consumer | | | | 2.58% | | | 2.60% | | | 2.12% | | | 1.27% | | | 1.45% |
Auto and Leasing | | | | 10.76% | | | 10.54% | | | 7.59% | | | 5.15% | | | 2.31% |
Total | | | | 8.10% | | | 8.92% | | | 8.04% | | | 10.42% | | | 15.02% |
Nonperforming Assets | (22) | | | | | | | | | | | | | | | |
Mortgage | (17) (18) | | $ | 51,728 | | $ | 51,058 | | $ | 45,596 | | $ | 55,667 | | $ | 101,049 |
Commercial | | | | 23,792 | | | 22,830 | | | 30,838 | | | 32,430 | | | 30,756 |
Consumer | | | | 1,084 | | | 805 | | | 490 | | | 324 | | | 371 |
Auto and Leasing | | | | 6,047 | | | 5,089 | | | 2,661 | | | 35 | | | 219 |
Total nonperforming loans | | | | 82,651 | | | 79,782 | | | 79,585 | | | 88,456 | | | 132,395 |
Foreclosed real estate | | | | 14,592 | | | 16,009 | | | 19,164 | | | 18,995 | | | 19,025 |
Other repossessed assets | | | | 147 | | | 197 | | | 170 | | | 99 | | | 52 |
Mortgage loans held for sale | | | | 1,554 | | | - | | | 654 | | | 26,586 | | | - |
Total nonperforming assets | | | $ | 98,944 | | $ | 95,988 | | $ | 99,573 | | $ | 134,136 | | $ | 151,472 |
Nonperforming Loan Rates | | | | | | | | | | | | | | | | |
Mortgage | (17) (18) | | | 6.61% | | | 6.66% | | | 6.10% | | | 7.33% | | | 12.73% |
Commercial | | | | 2.03% | | | 2.02% | | | 2.63% | | | 4.62% | | | 6.70% |
Consumer | | | | 0.76% | | | 0.63% | | | 0.43% | | | 0.34% | | | 0.53% |
Auto and Leasing | | | | 1.35% | | | 1.34% | | | 0.85% | | | 0.02% | | | 0.15% |
Total loans | | | | 3.25% | | | 3.32% | | | 3.39% | | | 4.94% | | | 9.01% |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | | | |
Table 7: Allowance for Loan and Lease Losses | | | | | | | | | | | | |
| | | Quarter Ended March 31, 2014 |
| | | | | | | | | Auto and | | | | |
(Dollars in thousands) (unaudited) | | | Mortgage | | Commercial | | Consumer | | Leasing | | Unallocated | | Total |
Non-covered loans | | | | | | | | | | | | | | | | | | | |
Originated | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 19,937 | | $ | 14,897 | | $ | 6,006 | | $ | 7,866 | | $ | 375 | | $ | 49,081 |
Provision for loan and lease losses | | | | 640 | | | (582) | | | 1,820 | | | 3,986 | | | (239) | | | 5,625 |
Charge-offs | | | | (1,214) | | | (419) | | | (838) | | | (4,645) | | | - | | | (7,116) |
Recoveries | | | | 148 | | | 98 | | | 147 | | | 1,524 | | | - | | | 1,917 |
Balance at end of period | | | $ | 19,511 | | $ | 13,994 | | $ | 7,135 | | $ | 8,731 | | $ | 136 | | $ | 49,507 |
Allowance coverage ratio | | | | 2.49% | | $ | 1.20% | | $ | 5.01% | | $ | 1.95% | | $ | 0.01% | | $ | 1.95% |
| | | | | | | | | | | | | | | | | | | |
Acquired | | | | | | | | | | | | | | | | | | | |
Acquired loans accounted for under ASC 310-30 | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | | - | | $ | 1,713 | | $ | 418 | | $ | 732 | | $ | - | | $ | 2,863 |
Provision for loan and lease losses, net | | | $ | - | | $ | 940 | | $ | (13) | | $ | (732) | | $ | - | | $ | 195 |
Balance at end of period | | | | - | | $ | 2,653 | | $ | 405 | | $ | - | | $ | - | | $ | 3,058 |
| | | | | | | | | | | | | | | | | | | |
Acquired loans accounted for under ASC 310-20 | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | | | | $ | 926 | | $ | - | | $ | 1,428 | | $ | - | | $ | 2,354 |
Provision for loan and lease losses | | | | | | | 115 | | | 2,462 | | | 1,665 | | | - | | | 4,242 |
Charge-offs | | | | | | | (174) | | | (2,058) | | | (1,296) | | | - | | | (3,528) |
Recoveries | | | | | | | - | | | 100 | | | 450 | | | - | | | 550 |
Balance at end of period | | | | | | $ | 867 | | $ | 504 | | $ | 2,247 | | $ | - | | $ | 3,618 |
| | | | | | | | | | | | | | | | | | | |
Total non-covered loans | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 19,937 | | $ | 17,536 | | $ | 6,424 | | $ | 10,026 | | $ | 375 | | $ | 54,298 |
Provision for loan and lease losses | | | | 640 | | | 473 | | | 4,269 | | | 4,919 | | | (239) | | | 10,062 |
Charge-offs | (21) | | | (1,214) | | | (593) | | | (2,896) | | | (5,941) | | | - | | | (10,644) |
Recoveries | | | | 148 | | | 98 | | | 247 | | | 1,974 | | | - | | | 2,467 |
Balance at end of period | | | $ | 19,511 | | $ | 17,514 | | $ | 8,044 | | $ | 10,978 | | $ | 136 | | $ | 56,183 |
| | | | | | | | | | | | | | | | | | | |
Covered loans | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 12,495 | | $ | 39,619 | | $ | 615 | | $ | - | | $ | - | | $ | 52,729 |
Provision for loan and lease losses, net | | | | 1,898 | | | (270) | | | - | | | - | | | - | | | 1,628 |
FDIC shared-loss portion of provision for covered loan and lease losses, net | | | | (172) | | | 212 | | | - | | | - | | | - | | | 41 |
Balance at end of period | | | $ | 14,221 | | $ | 39,562 | | $ | 615 | | $ | - | | $ | - | | $ | 54,398 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | | | |
Table 8: Accretable Yield on Loans Accounted for Under ASC 310-30 |
| | | Quarter Ended March 31, 2014 |
(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 | | | $ | 287,841 | | $ | 96,139 | | $ | 42,993 | | $ | 77,845 | | $ | 12,735 | | $ | 517,553 |
Accretion | | | | (9,369) | | | (12,717) | | | (4,486) | | | (11,825) | | | (1,872) | | | (40,269) |
Transfers (to) from non-accretable discount | | | | (4) | | | (785) | | | (3,502) | | | 8,615 | | | 393 | | | 4,717 |
Balance at end of period | | | $ | 278,468 | | $ | 82,637 | | $ | 35,005 | | $ | 74,635 | | $ | 11,256 | | $ | 482,001 |
| | | | | | | | | | | | | | | | | | | |
Non-Accretable Discount | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 463,166 | | $ | 42,515 | | $ | 5,851 | | $ | 39,645 | | $ | 28,410 | | $ | 579,587 |
Principal losses | | | | (4,522) | | | (1,749) | | | (2,105) | | | (1,702) | | | (1,498) | | | (11,576) |
Transfers from (to) accretable yield | | | | 4 | | | 785 | | | 3,502 | | | (8,615) | | | (393) | | | (4,717) |
Balance at end of period | | | $ | 458,648 | | $ | 41,551 | | $ | 7,248 | | $ | 29,328 | | $ | 26,519 | | $ | 563,294 |
| | | | | | | | | | | | | | | | |
| | | | | | | | | 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 | | | $ | 53,250 | | $ | 95,093 | | $ | 1,690 | | $ | 10,238 | | $ | 2,688 | | $ | 162,959 |
Accretion | | | | (4,164) | | | (14,852) | | | (1,080) | | | (3,011) | | | (281) | | | (23,388) |
Transfers from (to) non-accretable discount | | | | 5,533 | | | 2,959 | | | (401) | | | 105 | | | - | | | 8,196 |
Balance at end of period | | | $ | 54,619 | | $ | 83,200 | | $ | 209 | | $ | 7,332 | | $ | 2,407 | | $ | 147,767 |
| | | | | | | | | | | | | | | | | | | |
Non-Accretable Discount | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 39,182 | | $ | 81,092 | | $ | - | | $ | - | | $ | 9,203 | | $ | 129,477 |
Principal losses | | | | (2,309) | | | (10,997) | | | (401) | | | 105 | | | (356) | | | (13,958) |
Transfers (to) from accretable yield | | | | (5,533) | | | (2,959) | | | 401 | | | (105) | | | - | | | (8,196) |
Balance at end of period | | | $ | 31,340 | | $ | 67,136 | | $ | - | | $ | - | | $ | 8,847 | | $ | 107,323 |
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. |
| | | | | | | | | | | | | | | | |
| | | 2014 | | 2013 | | 2013 | | 2013 | | 2013 |
(Dollars in thousands) (unaudited) | | | Q1 | | Q4 | | Q3 | | Q2 | | Q1 |
Average Equity to Non-GAAP Average Tangible Common Equity | | | | | | | | | | | | | | | | |
Average total stockholders' equity | | | $ | 894,636 | | $ | 881,131 | | $ | 868,314 | | $ | 864,654 | | $ | 860,989 |
Less: Average noncumulative perpetual preferred stock | | | | (176,000) | | | (176,000) | | | (176,000) | | | (176,000) | | | (176,000) |
Average noncumulative perpetual preferred stock issuance costs | | | | 10,130 | | | 10,130 | | | 10,130 | | | 10,130 | | | 10,123 |
Average total common stockholders' equity | | | $ | 728,766 | | $ | 715,261 | | $ | 702,444 | | $ | 698,784 | | $ | 695,112 |
Less: Average intangible assets | | | | (97,792) | | | (98,367) | | | (99,048) | | | (99,660) | | | (100,308) |
Average tangible common equity | | | $ | 630,974 | | $ | 616,894 | | $ | 603,396 | | $ | 599,124 | | $ | 594,804 |
Stockholders' Equity to Non-GAAP Tangible Common Equity | | | | | | | | | | | | | | | | |
Total stockholders' equity | | | $ | 896,491 | | $ | 884,913 | | $ | 879,726 | | $ | 870,924 | | $ | 870,242 |
Less: Intangible assets | | | | (97,439) | | | (97,981) | | | (98,625) | | | (99,270) | | | (99,915) |
Noncumulative perpetual preferred stock | | | | (176,000) | | | (176,000) | | | (176,000) | | | (176,000) | | | (176,000) |
Noncumulative perpetual preferred stock issuance costs | | | | 10,130 | | | 10,130 | | | 10,130 | | | 10,130 | | | 10,130 |
Tangible common equity | | | $ | 633,182 | | $ | 621,062 | | $ | 615,231 | | $ | 605,784 | | $ | 604,457 |
| | | | | | | | | | | | | | | | |
Common stock outstanding at end of period | | | | 45,004 | | | 45,677 | | | 45,661 | | | 45,640 | | | 45,621 |
Tangible book value | | | $ | 14.07 | | $ | 13.60 | | $ | 13.47 | | $ | 13.27 | | $ | 13.25 |
Total Assets to Tangible Assets | | | | | | | | | | | | | | | | |
Total assets | | | $ | 7,855,638 | | $ | 8,158,015 | | $ | 8,397,898 | | $ | 8,452,840 | | $ | 8,721,611 |
Less: Intangible assets | | | | (97,439) | | | (97,981) | | | (98,625) | | | (99,270) | | | (99,915) |
Tangible assets | | | $ | 7,758,199 | | $ | 8,060,034 | | $ | 8,299,273 | | $ | 8,353,570 | | $ | 8,621,696 |
Non-GAAP TCE Ratio | | | | | | | | | | | | | | | | |
Tangible common equity | | | $ | 633,182 | | $ | 621,062 | | $ | 615,231 | | $ | 605,784 | | $ | 604,457 |
Tangible assets | | | | 7,758,199 | | | 8,060,034 | | | 8,299,273 | | | 8,353,570 | | | 8,621,696 |
TCE ratio | | | | 8.16% | | | 7.71% | | | 7.41% | | | 7.25% | | | 7.01% |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 9: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures (Continued) |
|
| | | 2014 | | 2013 | | 2013 | | 2013 | | 2013 |
(Dollars in thousands) (unaudited) | | | Q1 | | Q4 | | Q3 | | Q2 | | Q1 |
Regulatory Capital Ratios | | | | | | | | | | | | | | | | |
Total stockholders' equity | | | $ | 896,491 | | $ | 884,913 | | $ | 879,726 | | $ | 870,924 | | $ | 870,242 |
Less: Unrealized gains on available-for-sale securities, net of income tax | | | | (16,034) | | | (11,434) | | | (20,324) | | | (25,400) | | | (58,393) |
Unrealized losses on cash flow hedges, net of income tax | | | | 8,013 | | | 8,243 | | | 9,492 | | | 9,634 | | | 11,342 |
Disallowed goodwill and other intangible assets | | | | (97,439) | | | (97,981) | | | (98,625) | | | (89,584) | | | (77,867) |
Disallowed deferred tax assets | | | | (79,016) | | | (80,430) | | | (89,275) | | | (96,473) | | | (80,384) |
Disallowed servicing assets | | | | (1,397) | | | (1,380) | | | (1,365) | | | (1,299) | | | (1,154) |
Noncumulative perpetual preferred stock | | | | (176,000) | | | (176,000) | | | (176,000) | | | (176,000) | | | (176,000) |
Noncumulative perpetual preferred stock issuance costs | | | | 10,130 | | | 10,130 | | | 10,130 | | | 10,130 | | | 10,130 |
Tier 1 common equity capital | | | | 544,749 | | | 536,062 | | | 513,759 | | | 501,932 | | | 497,916 |
Plus: Qualifying noncumulative perpetual preferred stock | | | | 176,000 | | | 176,000 | | | 176,000 | | | 176,000 | | | 176,000 |
Qualifying noncumulative perpetual preferred stock issuance costs | | | | (10,130) | | | (10,130) | | | (10,130) | | | (10,130) | | | (10,130) |
Subordinated capital notes | | | | 35,000 | | | 35,000 | | | 35,000 | | | 35,000 | | | 35,000 |
Tier 1 capital | | | | 745,618 | | | 736,931 | | | 714,629 | | | 702,802 | | | 698,786 |
Plus: Long-term debt qualifying as Tier 2 capital | | | | 26,800 | | | 26,800 | | | 26,800 | | | 40,200 | | | 40,200 |
Qualifying allowance for loan and lease losses | | | | 63,749 | | | 64,746 | | | 63,292 | | | 62,683 | | | 65,475 |
Tier 2 capital | | | | 90,549 | | | 91,546 | | | 90,092 | | | 102,883 | | | 105,675 |
Total risk-based capital | | | $ | 836,168 | | $ | 828,477 | | $ | 804,721 | | $ | 805,685 | | $ | 804,461 |
| | | | | | | | | | | | | | | | |
Risk-weighted assets | | | $ | 5,050,672 | | $ | 5,134,538 | | $ | 5,019,563 | | $ | 4,975,818 | | $ | 5,207,394 |
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Leverage ratio | | | | 9.51% | | | 9.11% | | | 8.74% | | | 8.54% | | | 8.07% |
Tier 1 common ratio | | | | 10.79% | | | 10.44% | | | 10.24% | | | 10.09% | | | 9.56% |
Tier 1 risk-based capital ratio | | | | 14.76% | | | 14.35% | | | 14.24% | | | 14.12% | | | 13.42% |
Total risk-based capital ratio | | | | 16.56% | | | 16.14% | | | 16.03% | | | 16.19% | | | 15.45% |
OFG Bancorp (NYSE: OFG) | | | |
Table 10: Notes to Financial Summary, 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 the 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 Q1 2013 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) | Total banking and financial services revenues. |
(5) | Results 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 was $17.5 million. |
(6) | Tax benefit for Q2 2013 includes: (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) | Calculated based on net income available to common shareholders divided by average common shares outstanding for the period. |
(8) | 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. |
(9) | Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 9: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information. |
(10) | Information includes all loans, including all acquired loans. Acquired loans, including those accounted for under ASC 310-30, are disclosed at carrying amount. |
(11) | Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period. |
(12) | Calculated based on annualized income, net of tax, for the period divided by average total assets for the period. |
(13) | 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. |
(14) | Calculated based on non-interest expense, excluding merger and restructuring charges, for the period divided by total net interest income and total banking and financial services revenues for the period. |
(15) | The Company sells most of its conforming mortgages in the secondary market and retains servicing rights. |
(16) | Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period. |
(17) | Ratios for Q2 2013 do not include $59.0 million of non-performing residential mortgage loans reclassified to held-for-sale during the quarter. These loans were sold during Q3 2013. |
(18) | During Q1 2014, the Company changed its methodology for determining mortgage delinquency from calendar days to installments. |
(19) | 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. |
(20) | Results for Q3 2013 includes $1.4 million loss from the sale of Oriental originated non-performing residential mortgage loans held-for-sale. |
(21) | 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. |
(22) | 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. |
(23) | The Board of directors increased OFG's regular quarterly dividend per common share to $0.08 per share during Q4 2013. |
(24) | During Q1 2014, the Company purchased 707,400 shares under the current stock repurchase program for a total of $10.4 million, at an average price of $14.66 per share. |
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