Exhibit 99
OFG Bancorp Reports 2Q14 Results
SAN JUAN, Puerto Rico, July 23, 2014 – OFG Bancorp (NYSE: OFG) today reported results for the second quarter ended June 30, 2014.
2Q14 Highlights
· Income available to common shareholders totaled $17.8 million, or $0.38 per share diluted. In the preceding quarter, OFG earned $20.3 million, or $0.42 per share diluted, which included a pre-tax gain on the sale of securities of $4.4 million. In the year ago quarter, OFG earned $34.1 million, or $0.68 per share diluted, which included a net positive impact of $16.3 million from non-recurring items.
· Net interest margin continued strong at 6.10% compared to 5.90% in the first quarter of 2014.
· Puerto Rico government related loan and investment security balances (excluding obligations of municipalities) declined 15.7%, to $454.9 million at June 30, 2014, from $539.5 million at March 31, 2014.
· Cost of deposits continued to fall, to 76 bps from 80 bps in the first quarter of 2014, as demand and savings account balances continued to increase as a proportion of deposits.
· Tangible book value per common share of $14.71 at June 30, 2014 rose 4.6%, from $14.07 at March 31, 2014, and book value per common share of $16.87 grew 3.9%, from $16.23 at March 31, 2014.
· Performance metrics were in line with OFG’s targets, with return on average assets of 1.10%, return on average tangible common stockholders' equity of 10.96%, and efficiency ratio of 47.89%.
· Average common shares outstanding declined 0.7%, to 45.0 million at June 30, 2014, from the end of the previous quarter, reflecting share repurchases late in the first quarter of 2014.
CEO Comment
José Rafael Fernandez, President, Chief Executive Officer, and Vice Chairman, commented:
“OFG’s strong results for the sixth consecutive quarter since the close of the BBVA PR acquisition demonstrate the success of our growth strategies, timely capital management actions, and overall execution discipline. Post-acquisition, we have achieved notable growth in book value and capital.”
“Our operational outlook remains intact. We are focused on managing our businesses in a prudent manner, while carefully controlling costs, in order to grow our core profits. This has been our approach to navigate the challenging economic environment that has prevailed in Puerto Rico for a while now. At the same time, we are continuing our focus on building our franchise and brand value to differentiate Oriental in the local market.”
“We expect to see a notable upside to reported earnings in the second half of 2015, as the amortization of the FDIC indemnification asset will be significantly lower.”
2Q14 Income Statement Highlights
The following compares data for the second quarter 2014 to the first quarter of 2014 unless otherwise noted.
· Non-covered loan income increased 3.3%, to $88.1 million from $85.2 million. Growth reflects certain acquired loans rolled over to the originated loans category, and higher cost recoveries from acquired loans.
· Covered loan income rose 6.4%, to $24.9 million from $23.4 million. The increase reflects continued, higher cost recoveries due to successful workout efforts.
· Investment securities interest income declined $1.5 million, to $13.0 million from $14.4 million, due to lower balances of securities as a result of prepayments, and the previously reported first quarter 2014 sale of mortgage-backed securities and repayment of a PR government related security.
· Total provision for loan and lease losses increased $3.1 million, to $14.8 million from $11.7 million, mostly reflecting higher originated loan balances and an increase in charge off levels.
· Banking service revenues continued steady, with revenues of $10.0 million compared to $10.6 million, which included approximately $0.5 million in certain annual and cyclical client payments.
· Wealth management revenues increased to $7.3 million, compared to $6.9 million, largely reflecting higher sales of variable annuities.
· Mortgage banking activities remained level, with revenues of $1.6 million compared to $1.7 million. Second quarter 2014 results reflected increased production offset by smaller gains from secondary market sales. OFG sells most of its residential mortgage production into the secondary market.
· FDIC indemnification asset amortization continued as expected, at $18.4 million compared to $18.5 million. The indemnification asset was $143.7 million at June 30, 2014 compared to $166.2 million at March 31, 2014.
· Non-interest expenses declined 2.5%, to $59.8 million from $61.4 million. This primarily reflects reaching deduction limits for payroll benefits, and reduced costs associated with foreclosed real estate.
June 30, 2014 Balance Sheet Highlights
The following compares data as of June 30, 2014 to March 31, 2014 or for the second quarter of 2014 to the first quarter of 2014 unless otherwise noted.
· Production of new loans (excluding renewals) increased 4.4%, to $221.6 million, due to increases in consumer, commercial and mortgage volumes. Areas where OFG is focused on building loans – commercial, consumer and auto – increased 4%, to a balance of $2.6 billion.
· Puerto Rico government related debt declined primarily due to $100.0 million in principal amount of Tax Revenue Anticipation Notes (TRANs) repaid upon maturity by the Central Government, and $20 million in principal amount of privately-placed securities repaid by the issuer at par.
· Average interest earning assets declined to $7.0 billion from $7.1 billion. This was primarily due to (i) second quarter 2014 maturities of PR government related loans mentioned above; and (ii) the previously reported first quarter 2014 sale of mortgage-backed securities and repayment of a PR government related security.
· Demand deposit and savings account balances increased to 64% of total deposits compared to 63% at the end of last quarter, and 57% at the end of the year ago quarter. This reflects OFG’s effort to enhance its funding profile and reduce cost of deposits, which fell to an average 76 bps in the second quarter of 2014, compared to 80 bps in the preceding quarter, and 96 bps in the year ago quarter.
· Total stockholders’ equity increased 3.2% to $925.2 million from $896.5 million, reflecting increases in retained earnings and other comprehensive income.
Credit Quality Highlights
The following compares data excluding acquired loans for the second quarter 2014 to the first quarter 2014 unless otherwise noted.
Credit metrics remained in line with general ranges reported over the last 12 months. Increases from the preceding quarter reflect higher volumes in certain businesses.
· Net charge off rate increased to 0.96% from 0.86%, primarily due to increasing volume in the consumer business.
· Nonperforming loan rate increased to 3.39% from 3.25%, mainly due to residential mortgages.
· Total delinquency rate increased to 8.61% from 8.10%, mainly due to mortgages.
· Allowance for loan and lease losses as a percentage of loans held for investment (including acquired loans) declined to 1.92% from 1.95%.
Capital Position
The following compares data for the second quarter 2014 to the first quarter of 2014.
Regulatory capital ratios continued to be significantly above requirements for a well-capitalized institution.
· Tangible common equity to total tangible assets increased to 8.70% from 8.16%, based on a 4.6% increase in tangible common equity, to $662.4 million, and a 1.9% decline in tangible assets, to $7.6 billion.
· Tier 1 risk-based capital ratio increased to 15.49% from 14.76%, based on a 3.8% increase in Tier 1 capital, to $773.8 million, and a 1.1% decline in total risk weighted assets, to $5.0 billion.
· Total risk-based capital ratio increased to 17.30% from 16.56%, based on a 3.3% increase in total risk-based capital, to $863.8 million, and total risk weighted assets of $5.0 billion.
Conference Call
A conference call to discuss OFG’s results for the second quarter of 2014, outlook and related matters will be held Thursday, July 24, 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 June 30, 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 June 30, 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 - Consolidated | | 1 | |
| Table 2: | | Consolidated Statements of Operations | | 2 | |
| Table 3: | | Consolidated Statements of Financial Condition | | 3-4 | |
| Table 4: | | Information on Loan Portfolio and Production | | 5 | |
| Table 5: | | Average Balances, Net Interest Income and Net Interest Margin | | 6-7 | |
| Table 6: | | Loan Information and Performance Statistics (Excluding Acquired Loans) | | 8-9 | |
| Table 7: | | Allowance for Loan and Lease Losses | | 10 | |
| Table 8: | | Accretable Yield on Loans Accounted for Under ASC 310-30 (Loans Acquired | | | |
| | | with Deteriorated Credit Quality, Including those by Analogy) | | 11 | |
| Table 9: | | Reconciliation of Non-GAAP Measures and Calculation of Regulatory | | | |
| | | Capital Measures | | 12-13 | |
| Table 10: | | Notes to Financial Summary, Selected Metrics, Loans, and Consolidated | | | |
| | | Financial Statements | | 14 | |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | | | | | | |
Table 1: Financial and Statistical Summary - Consolidated (2) |
| | | 2014 | | 2014 | | 2013 | | 2013 | | 2013 | | 2014 | | 2013 |
(Dollars in thousands, except per share data) (unaudited) | | | Q2 | | Q1 | | Q4 | | Q3 | | Q2 | | YTD | | YTD |
Earnings | | | | | | | | | | | | | | | | | | | | | | |
Net interest income | | | $ | 106,078 | | $ | 103,398 | | $ | 110,671 | | $ | 99,091 | | $ | 106,295 | | $ | 209,476 | | $ | 199,909 |
Non-interest income, net (core) | (3) | | | 18,885 | | | 19,119 | | | 17,284 | | | 21,874 | | | 24,561 | | | 38,004 | | | 46,999 |
Operating expenses | | | | 59,848 | | | 61,404 | | | 65,603 | | | 63,236 | | | 68,687 | | | 121,252 | | | 135,298 |
Provision for loan and lease losses | | | | 14,815 | | | 11,691 | | | 12,593 | | | 12,974 | | | 38,738 | | | 26,506 | | | 47,326 |
FDIC shared-loss expense, net | | | | 18,355 | | | 18,487 | | | 20,466 | | | 15,965 | | | 19,965 | | | 36,842 | | | 32,836 |
Net income before income taxes | | | | 31,922 | | | 35,532 | | | 29,608 | | | 26,204 | | | 5,605 | | | 67,454 | | | 33,923 |
Effective income tax rate | | | | 33.25% | | | 33.17% | | | 32.13% | | | 25.13% | | | -569.74% | | | 33.20% | | | -73.13% |
Net income | | | | 21,309 | | | 23,747 | | | 20,094 | | | 19,619 | | | 37,539 | | | 45,056 | | | 58,731 |
Net income available to common stockholders | | | $ | 17,843 | | $ | 20,282 | | $ | 16,628 | | $ | 16,154 | | $ | 34,073 | | $ | 38,125 | | $ | 51,800 |
Common Share Statistics | | | | | | | | | | | | | | | | | | | | | | |
Earnings per common share - basic | (6) | | $ | 0.40 | | $ | 0.45 | | $ | 0.36 | | $ | 0.35 | | $ | 0.75 | | $ | 0.84 | | $ | 1.14 |
Earnings per common share - diluted | (7) | | $ | 0.38 | | $ | 0.42 | | $ | 0.35 | | $ | 0.34 | | $ | 0.68 | | $ | 0.80 | | $ | 1.05 |
Average common shares outstanding | | | | 45,014 | | | 45,329 | | | 45,674 | | | 45,927 | | | 45,630 | | | 45,170 | | | 45,613 |
Average common shares outstanding and equivalents | | | | 52,352 | | | 52,598 | | | 52,987 | | | 53,322 | | | 52,968 | | | 52,476 | | | 52,929 |
Cash dividends per common share | (22) | | $ | 0.08 | | $ | 0.08 | | $ | 0.08 | | $ | 0.06 | | $ | 0.06 | | $ | 0.16 | | $ | 0.12 |
Book value per common share (period end) | | | $ | 16.87 | | $ | 16.23 | | $ | 15.74 | | $ | 15.63 | | $ | 15.45 | | $ | 16.87 | | $ | 15.45 |
Tangible book value per common share (period end) | (8) | | $ | 14.71 | | $ | 14.07 | | $ | 13.60 | | $ | 13.47 | | $ | 13.27 | | $ | 14.71 | | $ | 13.27 |
Balance Sheet (Quarterly Average Balances) | | | | | | | | | | | | | | | | | | | | | | |
Loans held for investment | (9) | | $ | 5,019,381 | | $ | 5,007,347 | | $ | 5,117,939 | | $ | 5,136,745 | | $ | 5,057,269 | | $ | 5,013,403 | | $ | 5,083,403 |
Interest-earning assets | | | | 6,972,134 | | | 7,108,864 | | | 7,302,708 | | | 7,438,957 | | | 7,536,360 | | | 7,093,562 | | | 7,662,089 |
Total assets | | | | 7,736,715 | | | 8,041,159 | | | 8,326,879 | | | 8,424,466 | | | 8,525,996 | | | 7,888,096 | | | 8,681,197 |
Total deposits | | | | 5,218,663 | | | 5,334,564 | | | 5,537,142 | | | 5,654,274 | | | 5,612,811 | | | 5,276,293 | | | 5,611,185 |
Borrowings | | | | 1,470,669 | | | 1,632,782 | | | 1,742,115 | | | 1,734,769 | | | 1,863,383 | | | 1,551,278 | | | 2,030,065 |
Stockholders' equity | | | | 914,395 | | | 894,636 | | | 884,913 | | | 879,726 | | | 870,924 | | | 925,202 | | | 870,924 |
Common stockholders' equity | | | | 748,525 | | | 728,766 | | | 715,261 | | | 702,444 | | | 698,784 | | | 738,686 | | | 697,000 |
Performance Metrics | | | | | | | | | | | | | | | | | | | | | | |
Net interest margin | (10) | | | 6.10% | | | 5.90% | | | 6.01% | | | 5.28% | | | 5.66% | | | 5.96% | | | 5.26% |
Return on average assets | (11) | | | 1.10% | | | 1.18% | | | 0.97% | | | 0.93% | | | 1.76% | | | 1.14% | | | 1.35% |
Return on average tangible common stockholders' equity | (12) | | | 10.96% | | | 12.86% | | | 10.78% | | | 10.71% | | | 22.75% | | | 11.89% | | | 17.35% |
Efficiency ratio | (13) | | | 47.89% | | | 50.12% | | | 51.18% | | | 52.39% | | | 52.49% | | | 48.99% | | | 54.80% |
Full-time equivalent employees, period end | | | | 1,575 | | | 1,546 | | | 1,534 | | | 1,558 | | | 1,573 | | | 1,575 | | | 1,573 |
Credit Quality Metrics | | | | | | | | | | | | | | | | | | | | | | |
Excluding acquired loans: | (1) | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan and lease losses | | | $ | 50,638 | | $ | 49,507 | | $ | 49,081 | | $ | 47,573 | | $ | 45,701 | | $ | 50,638 | | $ | 45,701 |
Allowance as a % of loans held for investment | | | | 1.92% | | | 1.95% | | | 2.04% | | | 2.03% | | | 2.55% | | | 1.92% | | | 2.55% |
Net charge-offs | (20) | | $ | 6,300 | | $ | 5,199 | | $ | 5,427 | | $ | 5,058 | | $ | 32,552 | | $ | 21,984 | | $ | 35,935 |
Net charge-off rate | (15) | | | 0.96% | | | 0.86% | | | 0.91% | | | 1.02% | | | 8.89% | | | 0.87% | | | 2.61% |
Early delinquency rate (30 - 89 days past due) | (16) (17) | | | 4.85% | | | 4.51% | | | 4.97% | | | 4.16% | | | 5.72% | | | 4.85% | | | 5.72% |
Total delinquency rate (30 days and over) | (16) (17) | | | 8.61% | | | 8.10% | | | 8.92% | | | 8.04% | | | 10.42% | | | 8.61% | | | 10.42% |
Capital Ratios | (18) | | | | | | | | | | | | | | | | | | | | | |
Leverage ratio | | | | 10.26% | | | 9.51% | | | 9.11% | | | 8.74% | | | 8.54% | | | 10.26% | | | 8.54% |
Tier 1 common ratio | | | | 11.47% | | | 10.79% | | | 10.44% | | | 10.24% | | | 10.09% | | | 11.47% | | | 10.09% |
Tier 1 risk-based capital ratio | | | | 15.49% | | | 14.76% | | | 14.35% | | | 14.24% | | | 14.12% | | | 15.49% | | | 14.12% |
Total risk-based capital ratio | | | | 17.30% | | | 16.56% | | | 16.14% | | | 16.03% | | | 16.19% | | | 17.30% | | | 16.19% |
Tangible common equity ("TCE") ratio | | | | 8.70% | | | 8.16% | | | 7.71% | | | 7.41% | | | 7.25% | | | 8.70% | | | 7.25% |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | | | | | | |
Table 2: Consolidated Statements of Operations (2) | | | | | | | |
| | Quarter Ended | | Six-Months Ended |
| | | June 30, | | March 31, | | December 31, | | September 30, | | June 30, | | June 30, | | June 30, |
(Dollars in thousands, except per share data) (unaudited) | | | 2014 | | 2014 | | 2013 | | 2013 | | 2013 | | 2014 | | 2013 |
Interest income: | | | | | | | | | | | | | | | | | | | | | | |
Loans | | | | | | | | | | | | | | | | | | | | | | |
Loans not covered under shared-loss agreements with the FDIC | | | $ | 88,064 | | $ | 85,243 | | $ | 92,565 | | $ | 87,655 | | $ | 91,105 | | $ | 173,307 | | $ | 171,912 |
Loans covered under shared-loss agreements with the FDIC | | | | 24,879 | | | 23,388 | | | 25,885 | | | 21,657 | | | 23,999 | | | 48,267 | | | 44,228 |
Total interest income from loans | | | | 112,943 | | | 108,631 | | | 118,450 | | | 109,312 | | | 115,104 | | | 221,574 | | | 216,140 |
Investment securities | | | | 12,957 | | | 14,443 | | | 13,607 | | | 11,789 | | | 11,198 | | | 27,400 | | | 24,334 |
Total interest income | | | | 125,900 | | | 123,074 | | | 132,057 | | | 121,101 | | | 126,302 | | | 248,974 | | | 240,474 |
Interest expense: | | | | | | | | | | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | | | | | | | | | | |
Core deposits | | | | 7,875 | | | 7,662 | | | 8,834 | | | 9,947 | | | 8,885 | | | 15,537 | | | 17,171 |
Brokered deposits | | | | 1,290 | | | 1,316 | | | 1,387 | | | 1,387 | | | 602 | | | 2,606 | | | 2,252 |
Total deposits | | | | 9,165 | | | 8,978 | | | 10,221 | | | 11,334 | | | 9,487 | | | 18,143 | | | 19,423 |
Borrowings | | | | 10,657 | | | 10,698 | | | 11,165 | | | 10,676 | | | 10,520 | | | 21,355 | | | 21,142 |
Total interest expense | | | | 19,822 | | | 19,676 | | | 21,386 | | | 22,010 | | | 20,007 | | | 39,498 | | | 40,565 |
Net interest income | | | | 106,078 | | | 103,398 | | | 110,671 | | | 99,091 | | | 106,295 | | | 209,476 | | | 199,909 |
Provision for loan and lease losses, excluding acquired loans | | | | 7,431 | | | 5,625 | | | 6,934 | | | 6,930 | | | 35,919 | | | 13,056 | | | 41,714 |
Provision for acquired loan and lease losses | (1) | | | 7,384 | | | 6,066 | | | 5,659 | | | 6,044 | | | 2,819 | | | 13,450 | | | 5,612 |
Total provision for loan and lease losses, net | | | | 14,815 | | | 11,691 | | | 12,593 | | | 12,974 | | | 38,738 | | | 26,506 | | | 47,326 |
Net interest income after provision for loan and lease losses | | | | 91,263 | | | 91,707 | | | 98,078 | | | 86,117 | | | 67,557 | | | 182,970 | | | 152,583 |
Non-interest income: | | | | | | | | | | | | | | | | | | | | | | |
Banking service revenues | | | | 9,995 | | | 10,557 | | | 7,748 | | | 12,146 | | | 12,705 | | | 20,552 | | | 24,345 |
Wealth management revenues | | | | 7,336 | | | 6,867 | | | 7,839 | | | 7,394 | | | 8,030 | | | 14,203 | | | 15,690 |
Mortgage banking activities | | | | 1,554 | | | 1,695 | | | 1,697 | | | 2,334 | | | 3,826 | | | 3,249 | | | 6,964 |
Total banking and financial services revenues | | | | 18,885 | | | 19,119 | | | 17,284 | | | 21,874 | | | 24,561 | | | 38,004 | | | 46,999 |
FDIC shared-loss expense, net | | | | (18,355) | | | (18,487) | | | (20,466) | | | (15,965) | | | (19,965) | | | (36,842) | | | (32,836) |
Net gain (loss) on: | | | | | | | | | | | | | | | | | | | | | | |
Sales of securities and derivative activities | | | | (511) | | | 4,179 | | | 57 | | | (1,152) | | | (193) | | | 3,668 | | | (1,002) |
Early extinguishment of borrowings | | | | - | | | - | | | - | | | - | | | - | | | - | | | 1,061 |
Other | (19) | | �� | 488 | | | 418 | | | 258 | | | (1,434) | | | 2,332 | | | 906 | | | 2,416 |
Total non-interest income (loss), net | | | | 507 | | | 5,229 | | | (2,867) | | | 3,323 | | | 6,735 | | | 5,736 | | | 16,638 |
Non-interest expense: | | | | | | | | | | | | | | | | | | | | | | |
Compensation and employee benefits | | | | 20,707 | | | 21,787 | | | 22,030 | | | 22,590 | | | 24,089 | | | 42,494 | | | 47,338 |
Rent and occupancy costs | | | | 8,605 | | | 8,309 | | | 8,856 | | | 8,270 | | | 8,066 | | | 16,914 | | | 17,282 |
Merger and restructuring charges | (4) | | | - | | | - | | | 4,600 | | | 2,252 | | | 5,273 | | | - | | | 10,808 |
General and administrative expenses | | | | 30,536 | | | 31,308 | | | 30,117 | | | 30,124 | | | 31,259 | | | 61,844 | | | 59,870 |
Total non-interest expense | | | | 59,848 | | | 61,404 | | | 65,603 | | | 63,236 | | | 68,687 | | | 121,252 | | | 135,298 |
Income before income taxes | | | | 31,922 | | | 35,532 | | | 29,608 | | | 26,204 | | | 5,605 | | | 67,454 | | | 33,923 |
Income tax expense (benefit) | (5) | | | 10,613 | | | 11,785 | | | 9,514 | | | 6,585 | | | (31,934) | | | 22,398 | | | (24,808) |
Net income | | | | 21,309 | | | 23,747 | | | 20,094 | | | 19,619 | | | 37,539 | | | 45,056 | | | 58,731 |
Less: dividends on preferred stock | | | | | | | | | | | | | | | | | | | | | | |
Convertible preferred stock | | | | (1,838) | | | (1,838) | | | (1,838) | | | (1,838) | | | (1,838) | | | (3,676) | | | (3,676) |
Other preferred stock | | | | (1,628) | | | (1,627) | | | (1,628) | | | (1,627) | | | (1,628) | | | (3,255) | | | (3,255) |
Net income available to common shareholders | | | $ | 17,843 | | $ | 20,282 | | $ | 16,628 | | $ | 16,154 | | $ | 34,073 | | $ | 38,125 | | $ | 51,800 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | |
Table 3: Consolidated Statements of Financial Condition (2) | | | | | | | | |
| | | June 30, | | March 31, | | December 31, | | September 30, | | June 30, |
(Dollars in thousands) (unaudited) | | | 2014 | | 2014 | | 2013 | | 2013 | | 2013 |
Cash and cash equivalents | | | $ | 611,655 | | $ | 639,806 | | $ | 703,468 | | $ | 657,520 | | $ | 748,313 |
Securities purchased under agreements to resell | | | | - | | | - | | | 60,000 | | | 85,000 | | | - |
Investments: | | | | | | | | | | | | | | | | |
Trading securities | | | | 1,613 | | | 1,910 | | | 1,869 | | | 2,124 | | | 2,209 |
Investment securities available-for-sale, at fair value, with amortized cost of $1,385,438 | | | | | | | | | | | | | | | | |
(March 31, 2014 - $1,437,106; December 31, 2013 - $1,575,043; September 30, 2013 - $1,654,133; | | | | | | | | | | | | | | | | |
June 30, 2013 - $1,807,335) | | | | | | | | | | | | | | | | |
Mortgage-backed securities | | | | 1,314,677 | | | 1,334,865 | | | 1,439,539 | | | 1,526,485 | | | 1,650,165 |
Other investment securities | | | | 104,281 | | | 120,820 | | | 148,886 | | | 150,763 | | | 186,064 |
Total investment securities available-for-sale | | | | 1,418,958 | | | 1,455,685 | | | 1,588,425 | | | 1,677,248 | | | 1,836,229 |
Mortgage-backed securities held-to-maturity, at amortized cost, with fair value of | | | | | | | | | | | | | | | | |
$26,844 at June 30, 2014 | | | | 26,706 | | | - | | | - | | | - | | | - |
Federal Home Loan Bank (FHLB) stock, at cost | | | | 24,381 | | | 24,430 | | | 24,450 | | | 24,470 | | | 22,156 |
Other investments | | | | 65 | | | 65 | | | 65 | | | 65 | | | 66 |
Total investments | | | | 1,471,723 | | | 1,482,090 | | | 1,614,809 | | | 1,703,907 | | | 1,860,660 |
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 | | | | 655,429 | | | 718,823 | | | 695,996 | | | 810,391 | | | 531,543 |
Other Commercial Loans | | | | 1,198,618 | | | 1,178,287 | | | 1,180,886 | | | 1,166,950 | | | 1,205,179 |
| | | | 1,854,047 | | | 1,897,110 | | | 1,876,882 | | | 1,977,341 | | | 1,736,722 |
Mortgage | | | | 1,480,070 | | | 1,485,604 | | | 1,484,168 | | | 1,472,824 | | | 1,527,852 |
Consumer | | | | 254,966 | | | 247,851 | | | 247,539 | | | 253,754 | | | 246,387 |
Auto and Leasing | | | | 1,054,945 | | | 1,058,694 | | | 1,060,603 | | | 1,065,749 | | | 1,067,071 |
Total loans receivable not covered under shared-loss agreements with the FDIC, gross | | | | 4,644,028 | | | 4,689,259 | | | 4,669,192 | | | 4,769,668 | | | 4,578,032 |
Less: Deferred loan costs (fees), net | | | | 3,236 | | | 2,318 | | | 1,035 | | | 120 | | | (831) |
Total loans receivable not covered under shared-loss agreements with the FDIC | | | | 4,647,264 | | | 4,691,577 | | | 4,670,227 | | | 4,769,788 | | | 4,577,201 |
Allowance for loan and lease losses on non-covered loans | | | | (60,360) | | | (56,183) | | | (54,298) | | | (49,614) | | | (46,625) |
Loans receivable held for investment, net | | | | 4,586,904 | | | 4,635,394 | | | 4,615,929 | | | 4,720,174 | | | 4,530,576 |
Mortgage loans held for sale | (14) | | | 14,792 | | | 19,355 | | | 46,529 | | | 47,085 | | | 78,350 |
Total loans not covered under shared-loss agreements with the FDIC, net | | | | 4,601,696 | | | 4,654,749 | | | 4,662,458 | | | 4,767,259 | | | 4,608,926 |
| | | | | | | | | | | | | | | | |
Loans covered under shared-loss agreements with the FDIC | | | | 393,859 | | | 402,263 | | | 409,690 | | | 418,119 | | | 423,372 |
Allowance for loan and lease losses on covered loans | | | | (59,515) | | | (54,398) | | | (52,729) | | | (56,555) | | | (53,992) |
Loans covered under shared-loss agreements with the FDIC, net | | | | 334,344 | | | 347,865 | | | 356,961 | | | 361,564 | | | 369,380 |
Total loans, net | | | | 4,936,040 | | | 5,002,614 | | | 5,019,419 | | | 5,128,823 | | | 4,978,306 |
Other assets: | | | | | | | | | | | | | | | | |
FDIC shared-loss indemnification asset | | | | 143,660 | | | 166,194 | | | 189,240 | | | 225,581 | | | 253,378 |
Derivative assets | | | | 9,558 | | | 15,861 | | | 20,502 | | | 21,345 | | | 19,655 |
Prepaid expenses | | | | 19,632 | | | 15,531 | | | 15,439 | | | 16,967 | | | 23,568 |
Deferred tax asset, net | | | | 115,003 | | | 127,657 | | | 137,564 | | | 147,968 | | | 159,316 |
Foreclosed real estate and repossessed properties | | | | 119,110 | | | 110,849 | | | 102,607 | | | 94,086 | | | 91,267 |
Premises and equipment, net | | | | 82,167 | | | 83,029 | | | 82,903 | | | 83,145 | | | 84,300 |
Goodwill | | | | 86,069 | | | 86,069 | | | 86,069 | | | 86,069 | | | 86,069 |
Accounts receivable and other assets | | | | 115,528 | | | 125,938 | | | 125,995 | | | 147,487 | | | 131,276 |
Total assets | | | $ | 7,710,145 | | $ | 7,855,638 | | $ | 8,158,015 | | $ | 8,397,898 | | $ | 8,452,840 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | |
Table 3: Consolidated Statement of Financial Condition (Continued) (2) | | | | | | | | |
| | | June 30, | | March 31, | | December 31, | | September 30, | | June 30, |
(Dollars in thousands) (unaudited) | | | 2014 | | 2014 | | 2013 | | 2013 | | 2013 |
Deposits: | | | | | | | | | | | | | | | | |
Demand deposits | | | $ | 2,135,369 | | $ | 2,188,458 | | $ | 2,138,005 | | $ | 2,177,120 | | $ | 2,294,674 |
Savings accounts | | | | 1,136,155 | | | 1,172,117 | | | 1,096,271 | | | 987,371 | | | 909,755 |
Time deposits | | | | 1,151,234 | | | 1,227,504 | | | 1,320,875 | | | 1,651,303 | | | 1,687,115 |
Brokered deposits | | | | 718,475 | | | 712,913 | | | 828,114 | | | 794,672 | | | 774,092 |
Total deposits | | | | 5,141,233 | | | 5,300,992 | | | 5,383,265 | | | 5,610,466 | | | 5,665,636 |
Borrowings: | | | | | | | | | | | | | | | | |
Securities sold under agreements to repurchase | | | | 1,012,233 | | | 1,012,240 | | | 1,267,618 | | | 1,267,423 | | | 1,313,870 |
Advances from FHLB and other borrowings | | | | 364,077 | | | 339,397 | | | 339,806 | | | 340,010 | | | 292,306 |
Federal funds purchased | | | | - | | | 23,712 | | | - | | | 13,202 | | | 29,431 |
Subordinated capital notes | | | | 100,797 | | | 100,404 | | | 100,010 | | | 99,486 | | | 98,961 |
Total borrowings | | | | 1,477,107 | | | 1,475,753 | | | 1,707,434 | | | 1,720,121 | | | 1,734,568 |
Other liabilities: | | | | | | | | | | | | | | | | |
Derivative liabilities | | | | 13,617 | | | 13,830 | | | 14,937 | | | 16,741 | | | 16,701 |
Acceptances outstanding | | | | 17,581 | | | 28,152 | | | 23,042 | | | 31,881 | | | 30,571 |
Accrued expenses and other liabilities | | | | 135,405 | | | 140,420 | | | 144,424 | | | 138,963 | | | 134,440 |
Total liabilities | | | | 6,784,943 | | | 6,959,147 | | | 7,273,102 | | | 7,518,172 | | | 7,581,916 |
Stockholders' equity: | | | | | | | | | | | | | | | | |
Preferred stock | | | | 176,000 | | | 176,000 | | | 176,000 | | | 176,000 | | | 176,000 |
Common stock | | | | 52,730 | | | 52,714 | | | 52,707 | | | 52,691 | | | 52,689 |
Additional paid-in capital | | | | 538,936 | | | 538,287 | | | 538,071 | | | 538,231 | | | 538,105 |
Legal surplus | | | | 66,438 | | | 64,292 | | | 61,957 | | | 59,867 | | | 57,906 |
Retained earnings | | | | 160,055 | | | 147,919 | | | 133,629 | | | 122,747 | | | 111,292 |
Treasury stock, at cost | (23) | | | (90,712) | | | (90,743) | | | (80,642) | | | (80,642) | | | (80,834) |
Accumulated other comprehensive income, net | | | | 21,755 | | | 8,022 | | | 3,191 | | | 10,832 | | | 15,766 |
Total stockholders' equity | | | | 925,202 | | | 896,491 | | | 884,913 | | | 879,726 | | | 870,924 |
Total liabilities and stockholders' equity | | | $ | 7,710,145 | | $ | 7,855,638 | | $ | 8,158,015 | | $ | 8,397,898 | | $ | 8,452,840 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 4: Information on Loan Portfolio and Production | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | June 30, | | March 31, | | December 31, | | September 30, | | June 30, |
(Dollars in thousands) (unaudited) | | | 2014 | | 2014 | | 2013 | | 2013 | | 2013 |
Acquired loans: | (1) | | | | | | | | | | | | | | | |
Non-covered loans | | | | | | | | | | | | | | | | |
Accounted for under ASC 310-30 | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | $ | 1,804,645 | | $ | 1,900,112 | | $ | 1,998,913 | | $ | 2,091,796 | | $ | 2,445,112 |
Period-end carrying amount | | | | 1,676,677 | | | 1,754,041 | | | 1,832,213 | | | 1,904,324 | | | 2,203,272 |
Average carrying amount | | | | 1,720,553 | | | 1,805,535 | | | 1,881,377 | | | 2,155,889 | | | 2,368,459 |
Accounted for under ASC 310-20 | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | | 318,970 | | | 381,405 | | | 420,646 | | | 494,286 | | | 566,642 |
Period-end carrying amount | | | | 326,602 | | | 392,491 | | | 435,439 | | | 517,842 | | | 585,700 |
Average carrying amount | | | | 340,940 | | | 424,766 | | | 482,396 | | | 628,363 | | | 849,281 |
Covered loans | | | | | | | | | | | | | | | | |
Accounted for under ASC 310-30 | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | | 707,120 | | | 750,781 | | | 812,672 | | | 861,900 | | | 897,184 |
Period-end carrying amount | | | | 334,344 | | | 347,865 | | | 356,961 | | | 361,564 | | | 369,380 |
Average carrying amount | | | | 343,351 | | | 355,531 | | | 358,158 | | | 366,703 | | | 374,611 |
| | | | | | | | | | | | | | | | |
Total acquired loans | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | | 2,830,735 | | | 3,032,298 | | | 3,232,231 | | | 3,447,982 | | | 3,908,938 |
Period-end carrying amount | | | | 2,337,623 | | | 2,494,397 | | | 2,624,613 | | | 2,783,730 | | | 3,158,352 |
Average carrying amount | | | | 2,404,844 | | | 2,585,832 | | | 2,721,931 | | | 3,150,955 | | | 3,592,351 |
| | | | | | | | | | | | | | | | |
Non-acquired loans held for investment: | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | | 2,659,198 | | | 2,558,795 | | | 2,496,751 | | | 2,438,310 | | | 1,792,786 |
Period-end carrying amount | | | | 2,640,749 | | | 2,542,727 | | | 2,401,540 | | | 2,347,502 | | | 1,789,060 |
Average carrying amount | | | | 2,614,537 | | | 2,421,514 | | | 2,396,008 | | | 1,985,790 | | | 1,464,918 |
| | | | | | | | | | | | | | | | |
Total loans | | | | | | | | | | | | | | | | |
Period-end unpaid principal balance | | | $ | 5,489,933 | | $ | 5,591,093 | | $ | 5,728,982 | | $ | 5,886,292 | | $ | 5,701,724 |
Period-end carrying amount | | | | 4,978,372 | | | 5,037,124 | | | 5,026,153 | | | 5,131,232 | | | 4,947,412 |
Average carrying amount | | | | 5,019,381 | | | 5,007,347 | | | 5,117,939 | | | 5,136,745 | | | 5,057,269 |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | 2014 | | 2014 | | 2013 | | 2013 | | 2013 |
(Dollars in thousands) (unaudited) | | | Q2 | | Q1 | | Q4 | | Q3 | | Q2 |
Quarterly loan production | | | | | | | | | | | | | | | | |
Mortgage | | | $ | 51,999 | | $ | 50,843 | | $ | 67,535 | | $ | 60,676 | | $ | 101,279 |
Commercial | | | | 45,432 | | | 39,769 | | | 156,898 | | | 365,300 | | | 104,538 |
Consumer | | | | 34,530 | | | 27,796 | | | 23,604 | | | 28,586 | | | 26,634 |
Auto and Leasing | | | | 89,630 | | | 93,750 | | | 84,639 | | | 94,967 | | | 94,737 |
Total | | | $ | 221,591 | | $ | 212,158 | | $ | 332,676 | | $ | 549,529 | | $ | 327,188 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Table 5: Average Balances, Net Interest Income and Net Interest Margin | | |
| | | 2014 Q2 | | 2014 Q1 | | 2013 Q4 | | 2013 Q3 | | 2013 Q2 | |
| | | | | 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 | | | $ | 559,230 | | $ | 351 | | 0.25 | % | | $ | 482,497 | | $ | 283 | | 0.24 | % | | $ | 532,753 | | $ | 366 | | 0.27 | % | | $ | 538,094 | | $ | 241 | | 0.18 | % | | $ | 541,038 | | $ | 242 | | 0.18 | % | |
Investment securities | | | | 1,393,523 | | | 12,606 | | 3.63 | % | | | 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 | % | |
Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Non-acquired loans | | | | 2,614,537 | | | 43,083 | | 6.61 | % | | | 2,421,514 | | | 39,003 | | 6.53 | % | | | 2,396,008 | | | 37,543 | | 6.22 | % | | | 1,985,790 | | | 30,678 | | 6.13 | % | | | 1,464,918 | | | 23,362 | | 6.40 | % | |
Acquired loans accounted for under ASC 310-30 | | | | 1,720,553 | | | 39,714 | | 9.26 | % | | | 1,805,535 | | | 40,269 | | 9.05 | % | | | 1,881,377 | | | 48,731 | | 10.28 | % | | | 2,155,889 | | | 48,351 | | 8.90 | % | | | 2,368,459 | | | 54,427 | | 9.22 | % | |
Acquired loans accounted for under ASC 310-20 | | | | 340,940 | | | 5,267 | | 6.20 | % | | | 424,766 | | | 5,971 | | 5.70 | % | | | 482,396 | | | 6,291 | | 5.17 | % | | | 628,363 | | | 8,624 | | 5.45 | % | | | 849,281 | | | 13,316 | | 6.29 | % | |
Loans not covered under shared-loss agreements with the FDIC | | | | 4,676,030 | | | 88,064 | | 7.55 | % | | | 4,651,816 | | | 85,243 | | 7.43 | % | | | 4,759,781 | | | 92,565 | | 7.72 | % | | | 4,770,042 | | | 87,653 | | 7.29 | % | | | 4,682,658 | | | 91,105 | | 7.80 | % | |
Loans covered under shared-loss agreements with the FDIC | | | | 343,351 | | | 24,879 | | 29.06 | % | | | 355,531 | | | 23,388 | | 26.68 | % | | | 358,158 | | | 25,885 | | 28.67 | % | | | 366,703 | | | 21,657 | | 23.43 | % | | | 374,611 | | | 23,999 | | 25.70 | % | |
Total loans | | | | 5,019,381 | | | 112,943 | | 9.03 | % | | | 5,007,347 | | | 108,631 | | 8.80 | % | | | 5,117,939 | | | 118,450 | | 9.18 | % | | | 5,136,745 | | | 109,310 | | 8.44 | % | | | 5,057,269 | | | 115,104 | | 9.13 | % | |
Total interest-earning assets | | | $ | 6,972,134 | | $ | 125,900 | | 7.24 | % | | $ | 7,108,864 | | $ | 123,074 | | 7.02 | % | | $ | 7,302,708 | | $ | 132,057 | | 7.17 | % | | $ | 7,438,957 | | $ | 121,099 | | 6.46 | % | | $ | 7,536,360 | | $ | 126,302 | | 6.72 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Demand deposits | | | $ | 2,147,931 | | $ | 2,208 | | 0.41 | % | | $ | 2,160,959 | | $ | 2,324 | | 0.44 | % | | $ | 2,194,780 | | $ | 2,665 | | 0.48 | % | | $ | 2,238,164 | | $ | 2,778 | | 0.49 | % | | $ | 2,159,859 | | $ | 1,966 | | 0.37 | % | |
Savings accounts | | | | 1,168,911 | | | 2,192 | | 0.75 | % | | | 1,128,703 | | | 2,296 | | 0.82 | % | | | 1,058,152 | | | 2,347 | | 0.88 | % | | | 941,892 | | | 2,313 | | 0.97 | % | | | 893,804 | | | 3,015 | | 1.35 | % | |
Time deposits | | | | 1,192,447 | | | 3,972 | | 1.34 | % | | | 1,293,344 | | | 4,405 | | 1.38 | % | | | 1,512,962 | | | 5,553 | | 1.46 | % | | | 1,674,495 | | | 6,530 | | 1.55 | % | | | 1,700,949 | | | 6,683 | | 1.58 | % | |
Brokered deposits | | | | 709,374 | | | 1,468 | | 0.83 | % | | | 751,558 | | | 1,516 | | 0.82 | % | | | 771,248 | | | 1,610 | | 0.83 | % | | | 799,723 | | | 1,679 | | 0.83 | % | | | 858,199 | | | 1,790 | | 0.84 | % | |
| | | | 5,218,663 | | | 9,840 | | 0.76 | % | | | 5,334,564 | | | 10,541 | | 0.80 | % | | | 5,537,142 | | | 12,175 | | 0.87 | % | | | 5,654,274 | | | 13,300 | | 0.93 | % | | | 5,612,811 | | | 13,454 | | 0.96 | % | |
Purchase accounting and other adjustments | | | | - | | | (675) | | - | | | | - | | | (1,563) | | - | | | | - | | | (1,954) | | - | | | | - | | | (1,968) | | - | | | | - | | | (3,967) | | - | | |
Total deposits | | | | 5,218,663 | | | 9,165 | | 0.70 | % | | | 5,334,564 | | | 8,978 | | 0.68 | % | | | 5,537,142 | | | 10,221 | | 0.73 | % | | | 5,654,274 | | | 11,332 | | 0.80 | % | | | 5,612,811 | | | 9,487 | | 0.68 | % | |
Borrowings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Securities sold under agreements to repurchase | | | | 1,010,000 | | | 7,372 | | 2.93 | % | | | 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 | % | |
Advances from FHLB and other borrowings | | | | 360,130 | | | 2,289 | | 2.55 | % | | | 375,862 | | | 2,295 | | 2.48 | % | | | 377,422 | | | 2,344 | | 2.46 | % | | | 366,964 | | | 2,321 | | 2.51 | % | | | 408,019 | | | 2,241 | | 2.20 | % | |
Subordinated capital notes | | | | 100,539 | | | 996 | | 3.97 | % | | | 100,173 | | | 992 | | 4.02 | % | | | 99,693 | | | 1,141 | | 4.54 | % | | | 99,261 | | | 1,144 | | 4.57 | % | | | 98,648 | | | 1,170 | | 4.76 | % | |
Total borrowings | | | | 1,470,669 | | | 10,657 | | 2.91 | % | | | 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 | % | |
Total interest-bearing liabilities | | | $ | 6,689,332 | | $ | 19,822 | | 1.19 | % | | $ | 6,967,346 | | $ | 19,676 | | 1.15 | % | | $ | 7,279,257 | | $ | 21,386 | | 1.17 | % | | $ | 7,389,043 | | $ | 22,008 | | 1.18 | % | | $ | 7,476,194 | | $ | 20,007 | | 1.07 | % | |
Interest rate spread | | | | | | $ | 106,078 | | 6.05 | % | | | | | $ | 103,398 | | 5.87 | % | | | | | $ | 110,671 | | 6.00 | % | | | | | $ | 99,091 | | 5.28 | % | | | | | $ | 106,295 | | 5.65 | % | |
Net interest margin | | | | | | | | | 6.10 | % | | | | | | | | 5.90 | % | | | | | | | | 6.01 | % | | | | | | | | 5.28 | % | | | | | | | | 5.66 | % | |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 5: Average Balances, Net Interest Income and Net Interest Margin (Continued) | |
| | | 2014 YTD | | 2013 YTD | |
| | | | | Interest | | | | | | | Interest | | | | |
| | | Average | | Income/ | | Yield/ | | Average | | Income/ | | Yield/ | |
(Dollars in thousands) (unaudited) | | | Balance | | Expense | | Rate | | Balance | | Expense | | Rate | |
| | | | | | | | | | | | | | | | | | | | |
Interest earning assets: | | | | | | | | | | | | | | | | | | | | |
Cash equivalents and securities purchased under agreements to resell | | | $ | 574,509 | | $ | 634 | | 0.22 | % | | $ | 556,054 | | $ | 550 | | 0.20 | % | |
Investment securities | | | | 1,505,650 | | | 26,766 | | 3.58 | % | | | 2,022,632 | | | 23,784 | | 2.37 | % | |
Loans | | | | | | | | | | | | | | | | | | | | |
Non-acquired loans | | | | 2,518,566 | | | 82,015 | | 6.57 | % | | | 1,379,302 | | | 43,738 | | 6.39 | % | |
Acquired loans accounted for under ASC 310-30 | | | | 1,762,810 | | | 79,983 | | 9.15 | % | | | 2,461,322 | | | 102,096 | | 8.36 | % | |
Acquired loans accounted for under ASC 310-20 | | | | 382,621 | | | 11,309 | | 5.96 | % | | | 860,016 | | | 26,078 | | 6.11 | % | |
Loans not covered under shared-loss agreements with the FDIC | | | | 4,663,997 | | | 173,307 | | 7.49 | % | | | 4,700,641 | | | 171,912 | | 7.38 | % | |
Loans covered under shared-loss agreements with the FDIC | | | | 349,406 | | | 48,267 | | 27.86 | % | | | 382,762 | | | 44,228 | | 23.30 | % | |
Total loans | | | | 5,013,403 | | | 221,574 | | 8.91 | % | | | 5,083,403 | | | 216,140 | | 8.57 | % | |
Total interest-earning assets | | | $ | 7,093,562 | | $ | 248,974 | | 7.08 | % | | $ | 7,662,089 | | $ | 240,474 | | 6.33 | % | |
| | | | | | | | | | | | | | | | | | | | |
Interest bearing liabilities: | | | | | | | | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | | | | | | | | |
Demand deposits | | | $ | 2,154,409 | | $ | 4,531 | | 0.42 | % | | $ | 2,189,327 | | $ | 5,707 | | 0.53 | % | |
Savings accounts | | | | 1,148,918 | | | 4,488 | | 0.79 | % | | | 877,442 | | | 4,822 | | 1.11 | % | |
Time deposits | | | | 1,242,617 | | | 8,378 | | 1.36 | % | | | 1,687,086 | | | 13,936 | | 1.67 | % | |
Brokered deposits | | | | 730,349 | | | 2,984 | | 0.82 | % | | | 857,330 | | | 3,779 | | 0.89 | % | |
| | | | 5,276,293 | | | 20,381 | | 0.78 | % | | | 5,611,185 | | | 28,244 | | 1.02 | % | |
Purchase accounting and other adjustments | | | | - | | | (2,238) | | - | | | | - | | | (8,820) | | - | | |
Total deposits | | | | 5,276,293 | | | 18,143 | | 0.69 | % | | | 5,611,185 | | | 19,424 | | 0.70 | % | |
Borrowings | | | | | | | | | | | | | | | | | | | | |
Securities sold under agreements to repurchase | | | | 1,082,968 | | | 14,784 | | 2.75 | % | | | 1,440,679 | | | 14,357 | | 2.01 | % | |
Advances from FHLB and other borrowings | | | | 367,953 | | | 4,583 | | 2.51 | % | | | 468,357 | | | 3,954 | | 1.70 | % | |
Subordinated capital notes | | | | 100,357 | | | 1,988 | | 3.99 | % | | | 121,029 | | | 2,830 | | 4.72 | % | |
Total borrowings | | | | 1,551,278 | | | 21,355 | | 2.78 | % | | | 2,030,065 | | | 21,141 | | 2.10 | % | |
Total interest-bearing liabilities | | | $ | 6,827,571 | | $ | 39,498 | | 1.17 | % | | $ | 7,641,250 | | $ | 40,565 | | 1.07 | % | |
Interest rate spread | | | | | | $ | 209,476 | | 5.91 | % | | | | | $ | 199,909 | | 5.26 | % | |
Net interest margin | | | | | | | | | 5.96 | % | | | | | | | | 5.26 | % | |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 6: Loan Information and Performance Statistics (Excluding Acquired Loans) (1) | | | |
| | | 2014 | | 2014 | | 2013 | | 2013 | | 2013 |
(Dollars in thousands) (unaudited) | | | Q2 | | Q1 | | Q4 | | Q3 | | Q2 |
Net Charge-offs | | | | | | | | | | | | | | | | |
Mortgage: | | | | | | | | | | | | | | | | |
Charge-offs | (20) | | $ | 987 | | $ | 1,214 | | $ | 3,102 | | $ | 1,758 | | $ | 29,119 |
Recoveries | | | | (88) | | | (148) | | | (6) | | | - | | | - |
Total mortgage | | | | 899 | | | 1,066 | | | 3,096 | | | 1,758 | | | 29,119 |
Commercial: | | | | | | | | | | | | | | | | |
Charge-offs | | | | 543 | | | 419 | | | 211 | | | 2,234 | | | 2,887 |
Recoveries | | | | (115) | | | (98) | | | (91) | | | (28) | | | (234) |
Total commercial | | | | 428 | | | 321 | | | 120 | | | 2,206 | | | 2,653 |
Consumer: | | | | | | | | | | | | | | | | |
Charge-offs | | | | 1,397 | | | 838 | | | 451 | | | 465 | | | 323 |
Recoveries | | | | (244) | | | (147) | | | (23) | | | (37) | | | (43) |
Total consumer | | | | 1,153 | | | 691 | | | 428 | | | 428 | | | 280 |
Auto and Leasing: | | | | | | | | | | | | | | | | |
Charge-offs | | | | 5,956 | | | 4,645 | | | 2,496 | | | 1,305 | | | 709 |
Recoveries | | | | (2,136) | | | (1,524) | | | (713) | | | (639) | | | (209) |
Total auto and leasing | | | | 3,820 | | | 3,121 | | | 1,783 | | | 666 | | | 500 |
Total | | | $ | 6,300 | | $ | 5,199 | | $ | 5,427 | | $ | 5,058 | | $ | 32,552 |
Net Charge-off Rates | | | | | | | | | | | | | | | | |
Mortgage | | | | 0.46% | | | 0.57% | | | 1.66% | | | 0.92% | | | 14.50% |
Commercial | | | | 0.14% | | | 0.11% | | | 0.04% | | | 1.04% | | | 2.71% |
Consumer | | | | 3.13% | | | 2.16% | | | 1.46% | | | 1.75% | | | 1.44% |
Auto and Leasing | | | | 3.15% | | | 2.99% | | | 2.02% | | | 0.98% | | | 1.04% |
Total | | | | 0.96% | | | 0.86% | | | 0.91% | | | 1.02% | | | 8.89% |
Period-end Loans Held For Investment | | | | | | | | | | | | | | | | |
Mortgage: | | | | | | | | | | | | | | | | |
Traditional, Non traditional, and Loans under Loss Mitigation | | | $ | 749,676 | | $ | 746,868 | | $ | 731,345 | | $ | 714,568 | | $ | 726,666 |
GNMA's buy-back option program | | | | 38,329 | | | 35,282 | | | 34,920 | | | 32,511 | | | 32,513 |
Total mortgage | | | | 788,005 | | | 782,150 | | | 766,265 | | | 747,079 | | | 759,179 |
Commercial | | | | 1,183,172 | | | 1,170,145 | | | 1,127,657 | | | 1,173,212 | | | 702,270 |
Consumer | | | | 161,538 | | | 142,492 | | | 127,744 | | | 113,509 | | | 94,519 |
Auto and Leasing | | | | 508,034 | | | 447,940 | | | 379,874 | | | 313,702 | | | 233,092 |
Total | | | $ | 2,640,749 | | $ | 2,542,727 | | $ | 2,401,540 | | $ | 2,347,502 | | $ | 1,789,060 |
Average Loans Held For Investment | | | | | | | | | | | | | | | | |
Mortgage | | | $ | 773,425 | | $ | 753,248 | | $ | 744,989 | | $ | 763,929 | | $ | 803,272 |
Commercial | | | | 1,209,346 | | | 1,121,953 | | | 1,180,142 | | | 852,395 | | | 392,261 |
Consumer | | | | 147,230 | | | 128,239 | | | 117,391 | | | 97,738 | | | 77,948 |
Auto and Leasing | | | | 484,536 | | | 418,074 | | | 353,486 | | | 271,727 | | | 191,438 |
Total | | | $ | 2,614,537 | | $ | 2,421,514 | | $ | 2,396,008 | | $ | 1,985,790 | | $ | 1,464,918 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 6: Loan Information and Performance Statistics (Excluding Acquired Loans) (Continued) (1) |
| | | 2014 | | 2014 | | 2013 | | 2013 | | 2013 |
(Dollars in thousands) (unaudited) | | | Q2 | | Q1 | | Q4 | | Q3 | | Q2 |
Early Delinquency (30 - 89 days past due) | | | | | | | | | | | | | | | | |
Mortgage | (16) (17) | | $ | 70,453 | | $ | 67,016 | | $ | 72,028 | | $ | 69,919 | | $ | 77,728 |
Commercial | | | | 4,258 | | | 2,419 | | | 9,581 | | | 4,560 | | | 12,804 |
Consumer | | | | 2,797 | | | 2,995 | | | 2,665 | | | 1,983 | | | 835 |
Auto and Leasing | | | | 50,667 | | | 42,347 | | | 34,968 | | | 21,186 | | | 10,901 |
Total | | | $ | 128,175 | | $ | 114,777 | | $ | 119,242 | | $ | 97,648 | | $ | 102,268 |
Early Delinquency Rates (30 - 89 days past due) | | | | | | | | | | | | | | | | |
Mortgage | (16) (17) | | | 8.94% | | | 8.57% | | | 9.40% | | | 9.36% | | | 10.24% |
Commercial | | | | 0.36% | | | 0.21% | | | 0.85% | | | 0.39% | | | 1.82% |
Consumer | | | | 1.73% | | | 2.10% | | | 2.09% | | | 1.75% | | | 0.88% |
Auto and Leasing | | | | 9.97% | | | 9.45% | | | 9.21% | | | 6.75% | | | 4.68% |
Total | | | | 4.85% | | | 4.51% | | | 4.97% | | �� | 4.16% | | | 5.72% |
Total Delinquency (30 days and over past due) | | | | | | | | | | | | | | | | |
Mortgage: | (16) (17) | | | | | | | | | | | | | | | |
Traditional, Non traditional, and Loans under Loss Mitigation | | | $ | 115,180 | | $ | 107,908 | | $ | 111,263 | | $ | 102,672 | | $ | 114,452 |
GNMA's buy-back option program | | | | 38,329 | | | 35,282 | | | 34,920 | | | 32,511 | | | 32,513 |
Total mortgage | | | | 153,509 | | | 143,190 | | | 146,183 | | | 135,183 | | | 146,965 |
Commercial | | | | 12,437 | | | 10,865 | | | 24,738 | | | 27,249 | | | 26,251 |
Consumer | | | | 3,923 | | | 3,674 | | | 3,315 | | | 2,408 | | | 1,205 |
Auto and Leasing | | | | 57,620 | | | 48,219 | | | 40,057 | | | 23,822 | | | 11,997 |
Total | | | $ | 227,489 | | $ | 205,948 | | $ | 214,293 | | $ | 188,662 | | $ | 186,418 |
Total Delinquency Rates (30 days and over past due) | | | | | | | | | | | | | | | | |
Mortgage: | (16) (17) | | | | | | | | | | | | | | | |
Traditional, Non traditional, and Loans under Loss Mitigation | | | | 14.62% | | | 13.80% | | | 14.52% | | | 13.74% | | | 15.08% |
GNMA's buy-back option program | | | | 4.86% | | | 4.51% | | | 4.56% | | | 4.35% | | | 4.28% |
Total mortgage | | | | 19.48% | | | 18.31% | | | 19.08% | | | 18.09% | | | 19.36% |
Commercial | | | | 1.05% | | | 0.93% | | | 2.19% | | | 2.32% | | | 3.74% |
Consumer | | | | 2.43% | | | 2.58% | | | 2.60% | | | 2.12% | | | 1.27% |
Auto and Leasing | | | | 11.34% | | | 10.76% | | | 10.54% | | | 7.59% | | | 5.15% |
Total | | | | 8.61% | | | 8.10% | | | 8.92% | | | 8.04% | | | 10.42% |
Nonperforming Assets | (21) | | | | | | | | | | | | | | | |
Mortgage | (16) (17) | | $ | 57,314 | | $ | 51,728 | | $ | 51,058 | | $ | 45,596 | | $ | 55,667 |
Commercial | | | | 23,506 | | | 23,792 | | | 22,830 | | | 30,838 | | | 32,430 |
Consumer | | | | 1,454 | | | 1,084 | | | 805 | | | 490 | | | 324 |
Auto and Leasing | | | | 7,300 | | | 6,047 | | | 5,089 | | | 2,661 | | | 35 |
Total nonperforming loans | | | | 89,574 | | | 82,651 | | | 79,782 | | | 79,585 | | | 88,456 |
Foreclosed real estate | | | | 13,920 | | | 14,592 | | | 16,009 | | | 19,164 | | | 18,995 |
Other repossessed assets | | | | 7,317 | | | 5,542 | | | 3,266 | | | 605 | | | 144 |
Mortgage loans held for sale | | | | - | | | 1,554 | | | - | | | 654 | | | 26,586 |
Total nonperforming assets | | | $ | 110,811 | | $ | 104,339 | | $ | 99,057 | | $ | 100,008 | | $ | 134,181 |
Nonperforming Loan Rates | | | | | | | | | | | | | | | | |
Mortgage | (16) (17) | | | 7.27% | | | 6.61% | | | 6.66% | | | 6.10% | | | 7.33% |
Commercial | | | | 1.99% | | | 2.03% | | | 2.02% | | | 2.63% | | | 4.62% |
Consumer | | | | 0.90% | | | 0.76% | | | 0.63% | | | 0.43% | | | 0.34% |
Auto and Leasing | | | | 1.44% | | | 1.35% | | | 1.34% | | | 0.85% | | | 0.02% |
Total loans | | | | 3.39% | | | 3.25% | | | 3.32% | | | 3.39% | | | 4.94% |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | | | |
Table 7: Allowance for Loan and Lease Losses | | | | | | | | | | | | |
| | | Quarter Ended June 30, 2014 |
| | | | | | | | | Auto and | | | | |
(Dollars in thousands) (unaudited) | | | Mortgage | | Commercial | | Consumer | | Leasing | | Unallocated | | Total |
Non-covered loans | | | | | | | | | | | | | | | | | | | |
Non-acquired loans | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 19,511 | | $ | 13,994 | | $ | 7,135 | | $ | 8,731 | | $ | 136 | | $ | 49,507 |
Provision for loan and lease losses | | | | 450 | | | (1,143) | | | 1,905 | | | 6,216 | | | 3 | | | 7,431 |
Charge-offs | | | | (987) | | | (543) | | | (1,397) | | | (5,956) | | | - | | | (8,883) |
Recoveries | | | | 88 | | | 115 | | | 244 | | | 2,136 | | | - | | | 2,583 |
Balance at end of period | | | $ | 19,062 | | $ | 12,423 | | $ | 7,887 | | $ | 11,127 | | $ | 139 | | $ | 50,638 |
Allowance coverage ratio | | | | 2.42% | | $ | 1.05% | | $ | 4.88% | | $ | 2.19% | | $ | 0.01% | | $ | 1.92% |
| | | | | | | | | | | | | | | | | | | |
Acquired | | | | | | | | | | | | | | | | | | | |
Acquired loans accounted for under ASC 310-30 | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | | - | | $ | 2,653 | | $ | 405 | | $ | - | | $ | - | | $ | 3,058 |
Provision for loan and lease losses, net | | | $ | - | | $ | 3,563 | | $ | (343) | | $ | - | | $ | - | | $ | 3,220 |
Balance at end of period | | | | - | | $ | 6,216 | | $ | 62 | | $ | - | | $ | - | | $ | 6,278 |
| | | | | | | | | | | | | | | | | | | |
Acquired loans accounted for under ASC 310-20 | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | | | | $ | 867 | | $ | 504 | | $ | 2,247 | | $ | - | | $ | 3,618 |
Provision for loan and lease losses | | | | | | | (323) | | | 1,662 | | | 1,230 | | | - | | | 2,569 |
Charge-offs | | | | | | | (110) | | | (1,952) | | | (1,370) | | | - | | | (3,432) |
Recoveries | | | | | | | 30 | | | 124 | | | 535 | | | - | | | 689 |
Balance at end of period | | | | | | $ | 464 | | $ | 338 | | $ | 2,642 | | $ | - | | $ | 3,444 |
| | | | | | | | | | | | | | | | | | | |
Total non-covered loans | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 19,511 | | $ | 17,514 | | $ | 8,044 | | $ | 10,978 | | $ | 136 | | $ | 56,183 |
Provision for loan and lease losses | | | | 450 | | | 2,097 | | | 3,224 | | | 7,446 | | | 3 | | | 13,220 |
Charge-offs | (20) | | | (987) | | | (653) | | | (3,349) | | | (7,326) | | | - | | | (12,315) |
Recoveries | | | | 88 | | | 145 | | | 368 | | | 2,671 | | | - | | | 3,272 |
Balance at end of period | | | $ | 19,062 | | $ | 19,103 | | $ | 8,287 | | $ | 13,769 | | $ | 139 | | $ | 60,360 |
| | | | | | | | | | | | | | | | | | | |
Covered loans | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 14,221 | | $ | 39,562 | | $ | 615 | | $ | - | | $ | - | | $ | 54,398 |
Provision for loan and lease losses, net | | | | 411 | | | 1,184 | | | - | | | - | | | - | | | 1,595 |
FDIC shared-loss portion of provision for covered loan and lease losses, net | | | | 292 | | | 3,230 | | | - | | | - | | | - | | | 3,522 |
Balance at end of period | | | $ | 14,924 | | $ | 43,976 | | $ | 615 | | $ | - | | $ | - | | $ | 59,515 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | | | |
Table 8: Accretable Yield on Loans Accounted for Under ASC 310-30 |
| | | Quarter Ended June 30, 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 | | | $ | 278,468 | | $ | 82,637 | | $ | 35,005 | | $ | 74,635 | | $ | 11,256 | | $ | 482,001 |
Accretion | | | | (9,363) | | | (12,217) | | | (5,973) | | | (10,593) | | | (1,568) | | | (39,714) |
Transfers (to) from non-accretable discount | | | | - | | | 71 | | | 1,640 | | | 578 | | | 30 | | | 2,319 |
Balance at end of period | | | $ | 269,105 | | $ | 70,491 | | $ | 30,672 | | $ | 64,620 | | $ | 9,718 | | $ | 444,606 |
| | | | | | | | | | | | | | | | | | | |
Non-Accretable Discount | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 458,648 | | $ | 41,551 | | $ | 7,248 | | $ | 29,328 | | $ | 26,519 | | $ | 563,294 |
Principal losses | | | | (2,859) | | | (430) | | | (220) | | | (1,471) | | | (1,271) | | | (6,251) |
Transfers from (to) accretable yield | | | | - | | | (71) | | | (1,640) | | | (578) | | | (30) | | | (2,319) |
Balance at end of period | | | $ | 455,789 | | $ | 41,050 | | $ | 5,388 | | $ | 27,279 | | $ | 25,218 | | $ | 554,724 |
| | | | | | | | | | | | | | | | |
| | | | | | | | | Construction & | | | | | | | | | |
| | | | | | | | | Development | | | | | | | | | |
| | | Loans Secured | | | | | Secured by | | | | | | | | | |
| | | by 1-4 Family | | Commercial | | 1-4 Family | | | | | | | | | |
| | | Residential | | and Other | | Residential | | | | | | | | | |
| | | Properties | | Construction | | Properties | | Leasing | | Consumer | | Total |
Covered Loans: | | | | | | | | | | | | | | | | | | | |
Accretable Yield | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 54,619 | | $ | 83,200 | | $ | 209 | | $ | 7,332 | | $ | 2,407 | | $ | 147,767 |
Accretion | | | | (4,033) | | | (17,141) | | | (1,070) | | | (2,377) | | | (259) | | | (24,880) |
Transfers from (to) non-accretable discount | | | | - | | | 4,168 | | | 861 | | | 145 | | | - | | | 5,174 |
Balance at end of period | | | $ | 50,586 | | $ | 70,227 | | $ | - | | $ | 5,100 | | $ | 2,148 | | $ | 128,061 |
| | | | | | | | | | | | | | | | | | | |
Non-Accretable Discount | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 31,340 | | $ | 67,136 | | $ | - | | $ | - | | $ | 8,847 | | $ | 107,323 |
Principal losses | | | | (1,481) | | | (16,372) | | | 861 | | | 145 | | | (78) | | | (16,925) |
Transfers (to) from accretable yield | | | | - | | | (4,168) | | | (861) | | | (145) | | | - | | | (5,174) |
Balance at end of period | | | $ | 29,859 | | $ | 46,596 | | $ | - | | $ | - | | $ | 8,769 | | $ | 85,224 |
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 | | 2014 | | 2013 | | 2013 | | 2013 |
(Dollars in thousands) (unaudited) | | | Q2 | | Q1 | | Q4 | | Q3 | | Q2 |
Average Equity to Non-GAAP Average Tangible Common Equity | | | | | | | | | | | | | | | | |
Average total stockholders' equity | | | $ | 914,395 | | $ | 894,636 | | $ | 881,131 | | $ | 868,314 | | $ | 864,654 |
Less: Average noncumulative perpetual preferred stock | | | | (176,000) | | | (176,000) | | | (176,000) | | | (176,000) | | | (176,000) |
Average noncumulative perpetual preferred stock issuance costs | | | | 10,130 | | | 10,130 | | | 10,130 | | | 10,130 | | | 10,130 |
Average total common stockholders' equity | | | $ | 748,525 | | $ | 728,766 | | $ | 715,261 | | $ | 702,444 | | $ | 698,784 |
Less: Average intangible assets | | | | (97,252) | | | (97,792) | | | (98,367) | | | (99,048) | | | (99,660) |
Average tangible common equity | | | $ | 651,273 | | $ | 630,974 | | $ | 616,894 | | $ | 603,396 | | $ | 599,124 |
Stockholders' Equity to Non-GAAP Tangible Common Equity | | | | | | | | | | | | | | | | |
Total stockholders' equity | | | $ | 925,202 | | $ | 896,491 | | $ | 884,913 | | $ | 879,726 | | $ | 870,924 |
Less: Intangible assets | | | | (96,896) | | | (97,439) | | | (97,981) | | | (98,625) | | | (99,270) |
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 | | | $ | 662,436 | | $ | 633,182 | | $ | 621,062 | | $ | 615,231 | | $ | 605,784 |
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Common stock outstanding at end of period | | | | 45,023 | | | 45,004 | | | 45,677 | | | 45,661 | | | 45,640 |
Tangible book value | | | $ | 14.71 | | $ | 14.07 | | $ | 13.60 | | $ | 13.47 | | $ | 13.27 |
Total Assets to Tangible Assets | | | | | | | | | | | | | | | | |
Total assets | | | $ | 7,710,145 | | $ | 7,855,638 | | $ | 8,158,015 | | $ | 8,397,898 | | $ | 8,452,840 |
Less: Intangible assets | | | | (96,896) | | | (97,439) | | | (97,981) | | | (98,625) | | | (99,270) |
Tangible assets | | | $ | 7,613,249 | | $ | 7,758,199 | | $ | 8,060,034 | | $ | 8,299,273 | | $ | 8,353,570 |
Non-GAAP TCE Ratio | | | | | | | | | | | | | | | | |
Tangible common equity | | | $ | 662,436 | | $ | 633,182 | | $ | 621,062 | | $ | 615,231 | | $ | 605,784 |
Tangible assets | | | | 7,613,249 | | | 7,758,199 | | | 8,060,034 | | | 8,299,273 | | | 8,353,570 |
TCE ratio | | | | 8.70% | | | 8.16% | | | 7.71% | | | 7.41% | | | 7.25% |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 9: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures (Continued) |
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| | | 2014 | | 2014 | | 2013 | | 2013 | | 2013 |
(Dollars in thousands) (unaudited) | | | Q2 | | Q1 | | Q4 | | Q3 | | Q2 |
Regulatory Capital Ratios | | | | | | | | | | | | | | | | |
Total stockholders' equity | | | $ | 925,202 | | $ | 896,491 | | $ | 884,913 | | $ | 879,726 | | $ | 870,924 |
Less: Unrealized gains on available-for-sale securities, net of income tax | | | | (29,759) | | | (16,034) | | | (11,434) | | | (20,324) | | | (25,400) |
Unrealized losses on cash flow hedges, net of income tax | | | | 8,004 | | | 8,013 | | | 8,243 | | | 9,492 | | | 9,634 |
Disallowed goodwill and other intangible assets | | | | (96,896) | | | (97,439) | | | (97,981) | | | (98,625) | | | (89,584) |
Disallowed deferred tax assets | | | | (66,362) | | | (79,016) | | | (80,430) | | | (89,275) | | | (96,473) |
Disallowed servicing assets | | | | (1,365) | | | (1,397) | | | (1,380) | | | (1,365) | | | (1,299) |
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 | | | | 572,954 | | | 544,749 | | | 536,062 | | | 513,759 | | | 501,932 |
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 | | | | 773,824 | | | 745,618 | | | 736,931 | | | 714,629 | | | 702,802 |
Plus: Long-term debt qualifying as Tier 2 capital | | | | 26,800 | | | 26,800 | | | 26,800 | | | 26,800 | | | 40,200 |
Qualifying allowance for loan and lease losses | | | | 63,166 | | | 63,749 | | | 64,746 | | | 63,292 | | | 62,683 |
Tier 2 capital | | | | 89,966 | | | 90,549 | | | 91,546 | | | 90,092 | | | 102,883 |
Total risk-based capital | | | $ | 863,790 | | $ | 836,168 | | $ | 828,477 | | $ | 804,721 | | $ | 805,685 |
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Risk-weighted assets | | | $ | 4,994,378 | | $ | 5,050,672 | | $ | 5,134,538 | | $ | 5,019,563 | | $ | 4,975,818 |
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Leverage ratio | | | | 10.26% | | | 9.51% | | | 9.11% | | | 8.74% | | | 8.54% |
Tier 1 common ratio | | | | 11.47% | | | 10.79% | | | 10.44% | | | 10.24% | | | 10.09% |
Tier 1 risk-based capital ratio | | | | 15.49% | | | 14.76% | | | 14.35% | | | 14.24% | | | 14.12% |
Total risk-based capital ratio | | | | 17.30% | | | 16.56% | | | 16.14% | | | 16.03% | | | 16.19% |
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) | Total bankinig and financial services revenues |
(4) | 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. |
(5) | 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%. |
(6) | Calculated based on net income available to common shareholders divided by average common shares outstanding for the period. |
(7) | 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. |
(8) | 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. |
(9) | Information includes all loans, including all acquired loans. Acquired loans, including those accounted for under ASC 310-30, are disclosed at carrying amount. |
(10) | Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period. |
(11) | Calculated based on annualized income, net of tax, for the period divided by average total assets for the period. |
(12) | 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. |
(13) | 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. |
(14) | The Company sells most of its conforming mortgages in the secondary market and retains servicing rights. |
(15) | Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period. |
(16) | 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. |
(17) | During Q1 2014, the Company changed its methodology for determining mortgage delinquency from calendar days to installments. |
(18) | Non-GAAP ratios. See "Table 9: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for information on the calculation of each of these ratios. |
(19) | Results for Q3 2013 includes $1.4 million loss from the sale of Oriental non-acquired non-performing residential mortgage loans held-for-sale. |
(20) | 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. |
(21) | 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. |
(22) | The Board of directors increased OFG's regular quarterly dividend per common share to $0.08 per share during Q4 2013. |
(23) | 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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