Exhibit 99
OFG Bancorp Reports 1Q16 Results
SAN JUAN, Puerto Rico, April 22, 2016 – OFG Bancorp (NYSE: OFG) today reported results for the first quarter ended March 31, 2016.
1Q16 Highlights
• Net income available to shareholders amounted to $10.7 million, or $0.24 per share fully diluted. This compares to a loss of $4.4 million, or ($0.10) per share, in the preceding quarter, and a loss of $6.5 million, or ($0.14) per share, in the same quarter a year ago.
• Oriental Bank’s retail franchise continued to grow. New loan generation at $226 million, with commercial lending leading the way, remained at high levels. Total customers increased in excess of a 4.0% annualized rate from December 31, 2015.
• Credit quality continued to improve. Net charge-offs of loans (excluding acquired loans) declined to 1.30% from 1.67% in 4Q15. The provision for loan losses fell 18.6% from 4Q15’s adjusted amount (see Table 1). Early and total delinquency rates declined below both the previous and year-ago quarters.
• Puerto Rico investment securities balance fell 62.2% to $6.7 million, reflecting the sale of $12.8 million (average yield of 6.60%) in securities of the Puerto Rico Industrial Development Company (PRIDCO) and the Puerto Rico Public Buildings Authority (PBA).
• Net Interest Margin (NIM) expanded to 4.67%, reflecting better yields on interest earning assets.
• Tangible book value per common share increased to $14.68 from $14.53, and tangible common equity (TCE) ratio increased to 9.50% from 9.10%.
CEO Comment
José Rafael Fernández, President, Chief Executive Officer, and Vice Chairman of the Board, commented:
“We are pleased with our first quarter results. This is particularly so after a tough 2015 in which we had to deal with the termination of our commercial share loss agreement with the FDIC and other de-risking actions.
“During the quarter, Oriental Bank originated $226 million in new loans, while maintaining our traditional discipline in credit and pricing standards. In addition, we continued to introduce innovative features for our retail clients, such as Cardless Cash mobile phone ATM access—another first for Oriental Bank in Puerto Rico.
“The bank capitalized on market conditions to partially unwind a high-rate repurchase agreement, and to sell our PRIDCO and PBA securities and certain of our mortgage-backed securities (MBS). The aggregate gains and losses had no impact on the 1Q16 income statement, but will help to improve NIM going forward.
“Of note was our reduced credit costs and operating expenses. The active management of retail credit has improved results with lower charge-off levels and provisions, and steady enhancement in our credit metrics. We continue to closely monitor these trends given the uncertainty regarding Puerto Rico’s fiscal situation.
“Last year’s rightsizing efforts are evident in our reported non-interest expenses. The efficiency ratio improved from the previous quarter to 59.56%, the lowest since 1Q15, and is approaching our high 50s% target.”
1Q16 Income Statement Highlights
The following compares GAAP Results for the first quarter 2016 to GAAP and Non-GAAP Adjusted Results the fourth quarter 2015. There are no Non-GAAP Adjustments in 1Q16.
Table 1 | | | | | | | | | | | | | | |
Quarter ended | | December 31, 2015 | | March 31, 2016 |
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| | | Actual Results | | Quarter Specific | | Adjusted Results | | | Actual Results |
(Dollars in thousands) (unaudited) | | | (US GAAP) | | Items(1) | | (Non-GAAP) | | | (US GAAP)(2) |
| | | | | | | | | | | | | | |
Interest income | | | $ | 92,907 | | $ | - | | $ | 92,907 | | | $ | 91,306 |
Interest expense | | | | (17,285) | | | - | | | (17,285) | | | | (16,331) |
Net interest income | | | | 75,622 | | | - | | | 75,622 | | | | 74,975 |
Provision for loan and lease losses, excluding acquired loans | | | | (45,012) | | | (30,345) | | | (14,667) | | | | (10,660) |
Provision for acquired BBVAPR loan and lease losses | | | | (7,332) | | | (4,900) | | | (2,432) | | | | (2,324) |
(Recapture) provision for acquired Eurobank loan and lease losses | | | | 154 | | | - | | | 154 | | | | (805) |
Total provision for loan and lease losses, net | | | | (52,190) | | | (35,245) | | | (16,945) | | | | (13,789) |
Net interest income after provision for loan and leases losess | | | | 23,432 | | | (35,245) | | | 58,677 | | | | 61,186 |
Banking and wealth management revenues | | | | 19,349 | | | - | | | 19,349 | | | | 17,125 |
Other-than-temporary impairment losses on investment securities | | | | (1,244) | | | (1,244) | | | - | | | | - |
FDIC shared-loss expense, net | | | | (4,400) | | | (1,589) | | | (2,811) | | | | (4,029) |
Other (losses) gains, net | | | | 565 | | | - | | | 565 | | | | 407 |
Total non-interest income | | | | 14,270 | | | (2,833) | | | 17,103 | | | | 13,503 |
Compensation and employee benefits | | | | (18,717) | | | - | | | (18,717) | | | | (20,284) |
Rent and occupancy costs | | | | (8,111) | | | - | | | (8,111) | | | | (7,822) |
General and administrative expenses | | | | (31,714) | | | (1,462) | | | (30,252) | | | | (26,751) |
Total non-interest expense | | | | (58,542) | | | (1,462) | | | (57,080) | | | | (54,857) |
Income before taxes | | | | (20,840) | | | (39,540) | | | 18,700 | | | | 19,832 |
Income tax expense (benefit) | | | | (19,863) | | | | | | 6,171 | | | | 5,661 |
Net income | | | | (977) | | | | | | 12,529 | | | | 14,171 |
Preferred stock dividends | | | | (3,466) | | | | | | (3,466) | | | | (3,465) |
Net income (loss) available to common shareholders | | | | (4,443) | | | | | $ | 9,064 | | | | 10,706 |
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Earnings (loss) per common share - basic | | | $ | (0.10) | | | | | $ | 0.21 | | | $ | 0.24 |
Earnings (loss) per common share - diluted | | | $ | (0.10) | | | | | $ | 0.21 | | | $ | 0.24 |
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(1) ($30.4) million provision related to the PREPA line, ($4.9) million impairment during the annual recasting of a BBVA PR loan pool, ($1.5) million in legal fees related to PREPA’s restructuring, ($1.6) million in a final settlement with the FDIC related to the expiration of the commercial loss sharing agreement, ($1.2) million in OTTI, and a $19.9 million tax benefit.
(2) 1Q16 Other Gains (Losses) included the effect of the following transactions: (i) $16.1 million gain on the sale of $272.1 million (average yield of 3.00%) of MBS; (ii) $12.0 million cost of unwinding $268.0 million (average rate of 4.78%) in repurchase agreements; and (iii) loss of $4.1 million on the sale of $12.8 million (average yield of 6.60%) of PRIDCO and PBA securities. The aggregate gains and losses had no impact on the 1Q16 income statement.
Adjusted for the above-listed factors:
• Interest Income declined $1.6 million to $91.3 million. This was due to lower balances in BBVA PR acquired loans and in the investment securities portfolio, partially offset by higher interest income from a greater volume of originated loans, higher yields on cash equivalents due to higher market rates, and higher yields on some BBVA PR loans due to better cash flows experienced in recent quarters.
• Interest Expense declined $1.0 million to $16.3 million. This reflected the previously mentioned unwinding of repurchase agreements, partially offset by higher balances and costs for brokered CDs.
• Total Provision for Loan and Lease Losses declined $3.2 million on an adjusted basis to $13.8 million. This was primarily due to lower net charge-off levels.
• Net Interest Margin increased to 4.67% from 4.55% reflecting the reasons mentioned above.
• Total Banking and Wealth Management Revenues declined $2.2 million on an adjusted basis to $17.1 million. Client trading volumes in our broker-dealer continued to fall due to the uncertainty in the Puerto Rico market.
• FDIC Shared-Loss Expense, Net increase of $1.2 million on an adjusted basis to reflect prior valuation changes in the covered mortgage portfolio.
• Total Non-Interest Expenses declined $2.2 million on an adjusted basis to $54.9 million. This was primarily due to lower general and administrative expenses, partially offset by investments in customer technology.
• Effective Income Tax Rate was forecasted at approximately 29% for the near-term, including this quarter.
March 31, 2016 Balance Sheet Highlights
The following compares data as of March 31, 2016 to December 31, 2015 unless otherwise noted.
• Total loans declined to $4.36 billion from $4.43 billion, as originated loans partially offset outflows in acquired loans.
• Total investments declined to $1.33 billion from $1.62 billion due to the previously mentioned sale of MBS and prepayments of mortgage-backed securities.
• Puerto Rico central government and public corporation loan balances fell 6.5% to $198.2 million. Loans to Puerto Rico municipalities remained nearly level at $203.6 million. As previously mentioned, Puerto Rico investment securities balances came down 62.2% to $6.7 million.
• Total deposits increased to $4.78 billion from $4.72 billion due to higher demand deposits partially offset by lower short-term brokered balances.
• Total borrowings declined to $1.1 billion from $1.37 billion due to the previously mentioned unwinding of a repurchase agreement.
• Total stockholders’ equity increased to $903.8 million from $897.1 million, reflecting an increase in retained earnings, partially offset by a decline in accumulated other comprehensive income, net.
Credit Quality Highlights
The following compares data for the first quarter 2016 to the fourth quarter 2015 unless otherwise noted.
• Net charge-off (NCO) rate at 1.30% fell 37 basis points, chiefly due to a large decline in the commercial lending category as compared to 4Q15 when commercial lending NCOs increased due to one loan.
• Early delinquency rate continued to fall to 3.51%, its lowest level in the last five quarters, due to measures taken to proactively manage the effects of the economic environment.
• Non-performing loan rate at 9.58% declined 16 basis points with our favorable experience in commercial, auto and mortgage lending offsetting a small increase from consumer lending.
• Allowance for loan and lease losses increased $0.6 million to $113.2 million. Coverage of loans (excluding acquired loans) increased to 3.63% from 3.62%.
Capital Position
The following compares data for the first quarter 2016 to the fourth quarter 2015.
Regulatory capital ratios continued to be significantly above requirements for a well-capitalized institution.
• Tangible common equity to total tangible assets at 9.50% increased 40 basis points.
• Common Equity Tier 1 Capital Ratio (using Basel III methodology) increased to 12.33% from 12.15%.
• Total risk-based capital ratio increased to 17.67% from 17.30%.
Conference Call
A conference call to discuss OFG’s results for the first quarter 2016, outlook and related matters will be held today, Friday, April 22, 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 first quarter ended March 31, 2016, can be found on the Webcasts, Presentations & Other Files page, on OFG’s Investor Relations website at www.ofgbancorp.com.
Non-GAAP Financial Measures
In addition to our financial information presented in accordance with GAAP, management uses certain “non-GAAP financial measures” within the meaning of the SEC Regulation G, to clarify and enhance understanding of past performance and prospects for the future.
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, 2015, 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 52nd 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 48 financial centers. Investor information can be found at www.ofgbancorp.com.
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Contacts
Puerto Rico: Alexandra López (allopez@orientalbank.com) at (787) 522-6970
US: Steven Anreder (sanreder@ofgbancorp.com) and Gary Fishman (gfishman@ofgbancorp.com) at (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, 2016 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 | | 2 | |
| Table 2: | | Consolidated Statements of Operations | | 3 | |
| Table 3: | | Consolidated Statements of Financial Condition | | 4 | |
| Table 4: | | Information on Loan Portfolio and Production | | 5 | |
| Table 5: | | Average Balances, Net Interest Income and Net Interest Margin | | 6 | |
| 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 (Tables 1-9) | | 13 | |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 1: Financial and Statistical Summary - Consolidated |
| | | 2016 | | 2015 | | 2015 | | 2015 | | 2015 |
(Dollars in thousands, except per share data) (unaudited) | | | Q1 | | Q4 | | Q3 | | Q2 | | Q1 |
Earnings | | | | | | | | | | | | | | | | |
Net interest income | | | $ | 74,975 | | $ | 75,622 | | $ | 89,823 | | $ | 82,292 | | $ | 89,635 |
Non-interest income, net (core) | (2) | | | 17,125 | | | 19,349 | | | 18,703 | | | 19,359 | | | 19,223 |
Non-interest expense | | | | 54,857 | | | 58,542 | | | 69,090 | | | 64,437 | | | 56,332 |
Pre-provision net revenues | | | | 37,243 | | | 36,429 | | | 39,436 | | | 37,214 | | | 52,526 |
Provision for loan and lease losses | (3)(32) | | | 13,789 | | | 52,190 | | | 51,579 | | | 15,539 | | | 42,193 |
FDIC shared-loss expense, net | (31) | | | 4,029 | | | 4,400 | | | 2,079 | | | 23,245 | | | 13,084 |
Net income (loss) before income taxes | | | | 19,832 | | | (20,840) | | | 5,131 | | | (2,340) | | | (2,009) |
Income tax expense (benefit) | | | | 5,661 | | | (19,863) | | | 562 | | | 770 | | | 979 |
Net income (loss) | | | $ | 14,171 | | $ | (976) | | $ | 4,569 | | $ | (3,109) | | $ | (2,988) |
Common Share Statistics | | | | | | | | | | | | | | | | |
Earnings (loss) per common share - basic | (4) | | $ | 0.24 | | $ | (0.10) | | $ | 0.03 | | $ | (0.15) | | $ | (0.14) |
Earnings (loss) per common share - diluted | (5) | | $ | 0.24 | | $ | (0.10) | | $ | 0.03 | | $ | (0.15) | | $ | (0.14) |
Average common shares outstanding | | | | 43,898 | | | 43,868 | | | 43,929 | | | 44,505 | | | 44,634 |
Average common shares outstanding and equivalents | | | | 51,064 | | | 51,069 | | | 51,146 | | | 51,774 | | | 51,977 |
Cash dividends per common share | (6) | | $ | 0.06 | | $ | 0.06 | | $ | 0.10 | | $ | 0.10 | | $ | 0.10 |
Book value per common share (period end) | | | $ | 16.80 | | $ | 16.67 | | $ | 16.91 | | $ | 16.81 | | $ | 17.25 |
Tangible book value per common share (period end) | (7) | | $ | 14.68 | | $ | 14.53 | | $ | 14.76 | | $ | 14.67 | | $ | 15.12 |
Balance Sheet (Average Balances) | | | | | | | | | | | | | | | | |
Loans | (8) | | $ | 4,484,410 | | $ | 4,552,234 | | $ | 4,654,135 | | $ | 4,748,145 | | $ | 4,794,433 |
Interest-earning assets | | | | 6,437,255 | | | 6,600,614 | | | 6,740,932 | | | 6,708,519 | | | 6,703,287 |
Total assets | | | | 6,990,150 | | | 7,160,328 | | | 7,326,901 | | | 7,329,899 | | | 7,376,738 |
Interest-bearing deposits | | | | 3,956,790 | | | 3,931,009 | | | 3,932,735 | | | 3,986,700 | | | 4,167,592 |
Borrowings | | | | 1,239,672 | | | 1,394,171 | | | 1,572,400 | | | 1,466,103 | | | 1,378,344 |
Stockholders' equity | | | | 899,858 | | | 905,646 | | | 912,598 | | | 929,867 | | | 948,302 |
Common stockholders' equity | | | | 733,988 | | | 739,776 | | | 746,728 | | | 763,997 | | | 782,432 |
Performance Metrics | | | | | | | | | | | | | | | | |
Net interest margin | (9) | | | 4.67% | | | 4.55% | | | 5.29% | | | 4.92% | | | 5.42% |
Return on average assets | (10) | | | 0.81% | | | -0.05% | | | 0.25% | | | -0.17% | | | -0.16% |
Return on average tangible common stockholders' equity | (11) | | | 6.69% | | | -2.75% | | | 0.68% | | | -3.93% | | | -3.76% |
Efficiency ratio | (12) | | | 59.56% | | | 61.64% | | | 63.66% | | | 63.39% | | | 51.75% |
Full-time equivalent employees, period end | | | | 1,467 | | | 1,466 | | | 1,491 | | | 1,507 | | | 1,510 |
Credit Quality Metrics | | | | | | | | | | | | | | | | |
Excluding acquired loans: | (1) | | | | | | | | | | | | | | | |
Allowance for loan and lease losses | (3) | | $ | 113,238 | | $ | 112,626 | | $ | 80,351 | | $ | 78,989 | | $ | 76,759 |
Allowance as a % of loans held for investment | | | | 3.63% | | | 3.62% | | | 2.65% | | | 2.67% | | | 2.64% |
Net charge-offs | | | $ | 10,048 | | $ | 12,737 | | $ | 9,097 | | $ | 7,723 | | $ | 8,592 |
Net charge-off rate | (13) | | | 1.30% | | | 1.67% | | | 1.23% | | | 1.06% | | | 1.21% |
Early delinquency rate (30 - 89 days past due) | | | | 3.51% | | | 3.70% | | | 3.77% | | | 4.84% | | | 4.67% |
Total delinquency rate (30 days and over) | | | | 6.72% | | | 6.94% | | | 7.06% | | | 7.72% | | | 8.60% |
Capital Ratios | (14) | | | | | | | | | | | | | | | |
Leverage ratio | | | | 11.38% | | | 11.18% | | | 10.93% | | | 11.05% | | | 11.23% |
Common equity Tier 1 capital ratio | | | | 12.33% | | | 12.14% | | | 12.03% | | | 12.26% | | | 12.63% |
Tier 1 risk-based capital ratio | | | | 16.36% | | | 15.99% | | | 15.64% | | | 15.85% | | | 16.14% |
Total risk-based capital ratio | | | | 17.67% | | | 17.29% | | | 16.93% | | | 17.41% | | | 17.69% |
Tangible common equity ("TCE") ratio | | | | 9.50% | | | 9.10% | | | 9.11% | | | 8.91% | | | 9.29% |
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OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 2: Consolidated Statements of Operations | |
| | Quarter Ended |
| | | March 31, | | December 31, | | September 30, | | June 30, | | March 31, |
(Dollars in thousands, except per share data) (unaudited) | | | 2016 | | 2015 | | 2015 | | 2015 | | 2015 |
Interest income: | | | | | | | | | | | | | | | | |
Loans | (1)(17) | | | | | | | | | | | | | | | |
Non-acquired loans | | | $ | 47,915 | | $ | 47,261 | | $ | 46,036 | | $ | 44,238 | | $ | 46,285 |
Acquired BBVAPR loans | | | | 25,676 | | | 26,976 | | | 35,214 | | | 33,508 | | | 35,694 |
Acquired Eurobank loans | | | | 7,561 | | | 8,134 | | | 16,014 | | | 12,758 | | | 15,504 |
Total interest income from loans | | | | 81,152 | | | 82,371 | | | 97,264 | | | 90,504 | | | 97,483 |
Investment securities | | | | 10,154 | | | 10,536 | | | 9,983 | | | 8,909 | | | 9,518 |
Total interest income | | | | 91,306 | | | 92,907 | | | 107,247 | | | 99,413 | | | 107,001 |
Interest expense: | | | | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | | | | |
Core deposits | | | | 5,136 | | | 5,237 | | | 5,440 | | | 5,519 | | | 5,938 |
Brokered deposits | | | | 1,988 | | | 1,438 | | | 1,211 | | | 1,085 | | | 1,166 |
Total deposits | | | | 7,124 | | | 6,675 | | | 6,651 | | | 6,604 | | | 7,104 |
Borrowings | | | | 9,207 | | | 10,610 | | | 10,773 | | | 10,517 | | | 10,262 |
Total interest expense | | | | 16,331 | | | 17,285 | | | 17,424 | | | 17,121 | | | 17,366 |
Net interest income | | | | 74,975 | | | 75,622 | | | 89,823 | | | 82,292 | | | 89,635 |
Provision for loan and lease losses, excluding acquired loans | (1)(3) | | | 10,660 | | | 45,012 | | | 10,459 | | | 9,952 | | | 33,913 |
Provision for acquired BBVAPR loan and lease losses | (1) | | | 2,324 | | | 7,332 | | | 7,630 | | | 5,692 | | | 3,471 |
Provision (recapture) for acquired Eurobank loan and lease losses | (1)(32) | | | 805 | | | (154) | | | 33,490 | | | (105) | | | 4,809 |
Total provision for loan and lease losses, net | | | | 13,789 | | | 52,190 | | | 51,579 | | | 15,539 | | | 42,193 |
Net interest income after provision for loan and lease losses | | | | 61,186 | | | 23,432 | | | 38,244 | | | 66,753 | | | 47,442 |
Non-interest income: | | | | | | | | | | | | | | | | |
Banking service revenues | | | | 10,118 | | | 10,223 | | | 10,826 | | | 10,212 | | | 10,205 |
Wealth management revenues | | | | 6,152 | | | 7,715 | | | 6,885 | | | 7,285 | | | 7,155 |
Mortgage banking activities | | | | 855 | | | 1,411 | | | 992 | | | 1,862 | | | 1,863 |
Total banking and wealth management revenues | | | | 17,125 | | | 19,349 | | | 18,703 | | | 19,359 | | | 19,223 |
FDIC shared-loss expense, net | (18)(31) | | | (4,029) | | | (4,400) | | | (2,079) | | | (23,245) | | | (13,084) |
Other-than-temporary impairment losses on investment securities | | | | - | | | (1,244) | | | (246) | | | - | | | - |
Reimbursement from FDIC shared-loss coverage in sale of loans | (32) | | | - | | | - | | | 20,000 | | | - | | | - |
Other gains (losses), net | (22) | | | 407 | | | 565 | | | (401) | | | (770) | | | 742 |
Total non-interest income (loss), net | | | | 13,503 | | | 14,270 | | | 35,977 | | | (4,656) | | | 6,881 |
Non-interest expense: | | | | | | | | | | | | | | | | |
Compensation and employee benefits | | | | 20,284 | | | 18,716 | | | 20,098 | | | 19,260 | | | 20,180 |
Rent and occupancy costs | | | | 7,822 | | | 8,111 | | | 8,556 | | | 8,883 | | | 8,636 |
Net loss on sale of foreclosed real estate and other repossessed assets | (32) | | | 1,930 | | | 4,197 | | | 14,172 | | | 8,339 | | | 3,838 |
General and administrative expenses | | | | 22,566 | | | 25,512 | | | 21,537 | | | 24,904 | | | 21,454 |
Total operating expenses | | | | 52,602 | | | 56,536 | | | 64,363 | | | 61,386 | | | 54,108 |
Credit related expenses | | | | 2,255 | | | 2,006 | | | 3,810 | | | 3,051 | | | 2,224 |
Other non-recurring expenses | (15) | | | - | | | - | | | 917 | | | - | | | - |
Total non-interest expense | | | | 54,857 | | | 58,542 | | | 69,090 | | | 64,437 | | | 56,332 |
Income (loss) before income taxes | | | | 19,832 | | | (20,840) | | | 5,131 | | | (2,340) | | | (2,009) |
Income tax expense (benefit) | (33) | | | 5,661 | | | (19,864) | | | 562 | | | 769 | | | 979 |
Net income (loss) | | | | 14,171 | | | (976) | | | 4,569 | | | (3,109) | | | (2,988) |
Less: dividends on preferred stock | | | | | | | | | | | | | | | | |
Convertible preferred stock | | | | (1,838) | | | (1,837) | | | (1,838) | | | (1,837) | | | (1,838) |
Other preferred stock | | | | (1,627) | | | (1,629) | | | (1,627) | | | (1,629) | | | (1,627) |
Net income (loss) available to common shareholders | | | $ | 10,706 | | $ | (4,442) | | $ | 1,104 | | $ | (6,575) | | $ | (6,453) |
| | | | | | | | | | | | | | | | |
3 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | |
Table 3: Consolidated Statements of Financial Condition | | | | | | | | |
| | | March 31, | | December 31, | | September 30, | | June 30, | | March 31, |
(Dollars in thousands) (unaudited) | | | 2016 | | 2015 | | 2015 | | 2015 | | 2015 |
Cash and cash equivalents | | | $ | 681,198 | | $ | 540,058 | | $ | 530,545 | | $ | 559,621 | | $ | 694,308 |
Investments: | | | | | | | | | | | | | | | | |
Trading securities | | | | 314 | | | 288 | | | 583 | | | 786 | | | 964 |
Investment securities available-for-sale, at fair value, with amortized cost of $653,673 | | | | | | | | | | | | | | | | |
(December 31, 2015 - $955,646; September 30, 2015 - $982,754; June 30, 2015 - $1,023,573; | | | | | | | | | | | | | | | | |
March 31, 2015 - $1,092,040) | | | | | | | | | | | | | | | | |
Mortgage-backed securities | (22) | | | 656,137 | | | 953,213 | | | 985,554 | | | 1,020,493 | | | 1,099,814 |
Other investment securities | (22) | | | 13,148 | | | 21,396 | | | 22,151 | | | 23,826 | | | 25,888 |
Total investment securities available-for-sale | | | | 669,285 | | | 974,609 | | | 1,007,705 | | | 1,044,319 | | | 1,125,702 |
Mortgage-backed securities held-to-maturity, at amortized cost, with fair value of $641,346 | | | | | | | | | | | | | | | | |
(December 31, 2015 - $614,679; September 30, 2015 - $595,148; June 30, 2015 - $547,776; | | | | | | | | | | | | | | | | |
March 31, 2015 - $175,856) | | | | 637,036 | | | 620,189 | | | 594,639 | | | 550,553 | | | 172,847 |
Federal Home Loan Bank (FHLB) stock, at cost | | | | 20,761 | | | 20,783 | | | 20,804 | | | 20,826 | | | 21,148 |
Other investments | | | | 3 | | | 3 | | | 3 | | | 3 | | | 3 |
Total investments | | | | 1,327,399 | | | 1,615,872 | | | 1,623,734 | | | 1,616,487 | | | 1,320,664 |
Loans, net | (17)(32) | | | 4,360,129 | | | 4,434,213 | | | 4,468,676 | | | 4,639,467 | | | 4,724,579 |
Other assets: | | | | | | | | | | | | | | | | |
FDIC shared-loss indemnification asset | (31) | | | 20,923 | | | 22,599 | | | 22,895 | | | 22,704 | | | 75,221 |
Derivative assets | | | | 2,662 | | | 3,025 | | | 3,290 | | | 4,376 | | | 6,211 |
Prepaid expenses | | | | 10,363 | | | 11,762 | | | 14,151 | | | 16,492 | | | 11,264 |
Deferred tax asset, net | | | | 145,518 | | | 145,901 | | | 143,935 | | | 138,406 | | | 121,930 |
Foreclosed real estate and repossessed properties | (32) | | | 61,145 | | | 64,088 | | | 73,063 | | | 95,994 | | | 113,863 |
Premises and equipment, net | | | | 73,975 | | | 74,590 | | | 75,346 | | | 76,486 | | | 78,745 |
Goodwill | | | | 86,069 | | | 86,069 | | | 86,069 | | | 86,069 | | | 86,069 |
Accounts receivable and other assets | (16)(32) | | | 105,191 | | | 100,972 | | | 162,118 | | | 142,223 | | | 131,302 |
Total assets | | | $ | 6,874,572 | | $ | 7,099,149 | | $ | 7,203,822 | | $ | 7,398,325 | | $ | 7,364,156 |
| | | | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | | | | |
Demand deposits | | | $ | 2,018,346 | | | 1,862,572 | | | 1,906,658 | | | 1,938,772 | | | 2,027,184 |
Savings accounts | | | | 1,110,469 | | | 1,107,618 | | | 1,217,098 | | | 1,250,460 | | | 1,336,209 |
Time deposits | | | | 962,773 | | | 964,588 | | | 941,821 | | | 956,829 | | | 965,196 |
Brokered deposits | | | | 688,105 | | | 782,973 | | | 653,126 | | | 605,361 | | | 567,122 |
Total deposits | | | | 4,779,693 | | | 4,717,751 | | | 4,718,703 | | | 4,751,422 | | | 4,895,711 |
Borrowings: | | | | | | | | | | | | | | | | |
Securities sold under agreements to repurchase | (22) | | | 636,172 | | | 934,691 | | | 1,000,664 | | | 1,161,136 | | | 927,168 |
Advances from FHLB and other borrowings | | | | 333,736 | | | 334,210 | | | 334,670 | | | 335,481 | | | 335,597 |
Subordinated capital notes | | | | 102,808 | | | 102,633 | | | 102,371 | | | 102,109 | | | 101,846 |
Total borrowings | | | | 1,072,716 | | | 1,371,534 | | | 1,437,705 | | | 1,598,726 | | | 1,364,611 |
Other liabilities: | | | | | | | | | | | | | | | | |
Derivative liabilities | | | | 6,220 | | | 6,162 | | | 8,622 | | | 8,739 | | | 11,113 |
Acceptances outstanding | | | | 19,381 | | | 14,582 | | | 19,083 | | | 16,040 | | | 21,848 |
Accrued expenses and other liabilities | | | | 92,761 | | | 92,043 | | | 111,821 | | | 111,799 | | | 134,494 |
Total liabilities | | | | 5,970,771 | | | 6,202,072 | | | 6,295,934 | | | 6,486,726 | | | 6,427,777 |
Stockholders' equity: | | | | | | | | | | | | | | | | |
Preferred stock | | | | 176,000 | | | 176,000 | | | 176,000 | | | 176,000 | | | 176,000 |
Common stock | | | | 52,626 | | | 52,626 | | | 52,626 | | | 52,626 | | | 52,626 |
Additional paid-in capital | | | | 540,371 | | | 540,512 | | | 540,088 | | | 539,669 | | | 539,222 |
Legal surplus | | | | 71,865 | | | 70,435 | | | 70,423 | | | 69,934 | | | 70,097 |
Retained earnings | | | | 155,529 | | | 148,886 | | | 155,974 | | | 159,737 | | | 170,605 |
Treasury stock, at cost | (19) | | | (104,874) | | | (105,379) | | | (105,379) | | | (100,668) | | | (96,495) |
Accumulated other comprehensive income, net | | | | 12,284 | | | 13,997 | | | 18,156 | | | 14,301 | | | 24,324 |
Total stockholders' equity | | | | 903,801 | | | 897,077 | | | 907,888 | | | 911,599 | | | 936,379 |
Total liabilities and stockholders' equity | | | $ | 6,874,572 | | $ | 7,099,149 | | $ | 7,203,822 | | $ | 7,398,325 | | $ | 7,364,156 |
| | | | | | | | | | | | | | | | |
4 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 4: Information on Loan Portfolio and Production | (17) | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | March 31, | | December 31, | | September 30, | | June 30, | | March 31, |
(Dollars in thousands) (unaudited) | | | 2016 | | 2015 | | 2015 | | 2015 | | 2015 |
Non-acquired loans held for investment: | | | | | | | | | | | | | | | | |
Mortgage | | | $ | 751,819 | | $ | 757,828 | | $ | 762,636 | | $ | 757,187 | | $ | 789,545 |
Commercial | | | | 1,425,385 | | | 1,441,649 | | | 1,389,353 | | | 1,363,851 | | | 1,324,904 |
Consumer | | | | 252,327 | | | 242,950 | | | 227,756 | | | 212,629 | | | 193,658 |
Auto | | | | 687,159 | | | 669,163 | | | 647,544 | | | 623,198 | | | 601,963 |
| | | | 3,116,690 | | | 3,111,590 | | | 3,027,289 | | | 2,956,865 | | | 2,910,070 |
Less: Allowance for loan and lease losses | | | | (113,238) | | | (112,626) | | | (80,351) | | | (78,989) | | | (76,759) |
| | | | 3,003,452 | | | 2,998,964 | | | 2,946,938 | | | 2,877,876 | | | 2,833,311 |
Deferred loan costs, net | | | | 4,350 | | | 4,203 | | | 4,571 | | | 3,877 | | | 4,433 |
Total non-acquired loans held for investment, net | | | | 3,007,802 | | | 3,003,167 | | | 2,951,509 | | | 2,881,753 | | | 2,837,744 |
| | | | | | | | | | | | | | | | |
Acquired loans: | (1) | | | | | | | | | | | | | | | |
BBVAPR | | | | | | | | | | | | | | | | |
Accounted for under ASC 310-20 | | | | | | | | | | | | | | | | |
Commercial | | | | 6,558 | | | 7,457 | | | 7,736 | | | 8,448 | | | 9,506 |
Consumer | | | | 36,346 | | | 38,385 | | | 39,774 | | | 41,505 | | | 42,922 |
Auto | | | | 91,406 | | | 106,911 | | | 124,120 | | | 142,570 | | | 162,194 |
| | | | 134,310 | | | 152,753 | | | 171,630 | | | 192,523 | | | 214,622 |
Less: Allowance for loan and lease losses | | | | (4,993) | | | (5,542) | | | (5,473) | | | (5,529) | | | (5,450) |
| | | | 129,317 | | | 147,211 | | | 166,157 | | | 186,994 | | | 209,172 |
| | | | | | | | | | | | | | | | |
Accounted for under ASC 310-30 | | | | | | | | | | | | | | | | |
Mortgage | | | | 600,901 | | | 608,294 | | | 617,268 | | | 631,807 | | | 645,918 |
Commercial | | | | 345,789 | | | 375,491 | | | 395,637 | | | 499,710 | | | 519,809 |
Consumer | | | | 9,345 | | | 11,843 | | | 15,072 | | | 18,869 | | | 23,841 |
Auto | | | | 134,669 | | | 153,592 | | | 173,979 | | | 195,891 | | | 220,990 |
| | | | 1,090,704 | | | 1,149,220 | | | 1,201,956 | | | 1,346,277 | | | 1,410,558 |
Less: Allowance for loan and lease losses | | | | (27,747) | | | (25,785) | | | (19,986) | | | (18,359) | | | (14,166) |
| | | | 1,062,957 | | | 1,123,435 | | | 1,181,970 | | | 1,327,918 | | | 1,396,392 |
Total Acquired BBVAPR loans, net | | | | 1,192,274 | | | 1,270,646 | | | 1,348,127 | | | 1,514,912 | | | 1,605,564 |
| | | | | | | | | | | | | | | | |
Eurobank | | | | | | | | | | | | | | | | |
Accounted for under ASC 310-30 | | | | | | | | | | | | | | | | |
Mortgage | | | | 91,113 | | | 92,273 | | | 92,757 | | | 102,499 | | | 100,677 |
Commercial | | | | 142,298 | | | 142,377 | | | 144,704 | | | 187,692 | | | 223,734 |
Consumer | | | | 1,770 | | | 2,314 | | | 2,708 | | | 3,295 | | | 4,047 |
| | | | 235,181 | | | 236,964 | | | 240,169 | | | 293,486 | | | 328,458 |
Less: Allowance for loan and lease losses | | | | (92,293) | | | (90,178) | | | (90,332) | | | (71,452) | | | (70,651) |
Total Acquired Eurobank loans, net | | | | 142,888 | | | 146,786 | | | 149,837 | | | 222,034 | | | 257,807 |
Total acquired loans, net | (32) | | | 1,335,162 | | | 1,417,432 | | | 1,497,964 | | | 1,736,946 | | | 1,863,371 |
Total loans held for investment | | | | 4,342,964 | | | 4,420,599 | | | 4,449,473 | | | 4,618,699 | | | 4,701,115 |
Mortgage loans held for sale | | | | 17,165 | | | 13,614 | | | 19,203 | | | 20,768 | | | 23,464 |
Total loans, net | | | $ | 4,360,129 | | $ | 4,434,213 | | $ | 4,468,676 | | $ | 4,639,467 | | $ | 4,724,579 |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | 2016 | | 2015 | | 2015 | | 2015 | | 2015 |
(Dollars in thousands) (unaudited) | | | Q1 | | Q4 | | Q3 | | Q2 | | Q1 |
Quarterly loan production | (20) | | | | | | | | | | | | | | | |
Mortgage | | | $ | 48,321 | | $ | 55,450 | | $ | 65,248 | | $ | 64,826 | | $ | 61,717 |
Commercial | | | | 79,272 | | | 75,775 | | | 83,243 | | | 120,500 | | | 85,664 |
Consumer | | | | 34,275 | | | 37,919 | | | 36,756 | | | 39,837 | | | 26,161 |
Auto and Leasing | | | | 64,285 | | | 67,633 | | | 65,743 | | | 61,545 | | | 65,907 |
Total | | | $ | 226,153 | | $ | 236,777 | | $ | 250,990 | | $ | 286,708 | | $ | 239,449 |
| | | | | | | | | | | | | | | | |
5 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Table 5: Average Balances, Net Interest Income and Net Interest Margin | | |
| | | 2016 Q1 | | 2015 Q4 | | 2015 Q3 | | 2015 Q2 | | 2015 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 | | | $ | 502,718 | | $ | 646 | | 0.52 | % | | $ | 438,981 | | $ | 327 | | 0.30 | % | | $ | 482,959 | | $ | 308 | | 0.25 | % | | $ | 483,507 | | $ | 322 | | 0.27 | % | | $ | 564,237 | | $ | 323 | | 0.23 | % | |
Investment securities | | | | 1,450,127 | | | 9,508 | | 2.63 | % | | | 1,609,399 | | | 10,209 | | 2.52 | % | | | 1,603,838 | | | 9,674 | | 2.39 | % | | | 1,476,867 | | | 8,587 | | 2.33 | % | | | 1,344,617 | | | 9,195 | | 2.77 | % | |
Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Non-acquired loans | | | | 3,100,157 | | | 47,915 | | 6.20 | % | | | 3,043,109 | | | 47,261 | | 6.16 | % | | | 2,959,961 | | | 46,036 | | 6.17 | % | | | 2,927,347 | | | 44,239 | | 6.06 | % | | | 2,832,658 | | | 46,284 | | 6.63 | % | |
Acquired BBVAPR loans | | | | 1,240,252 | | | 25,676 | | 8.30 | % | | | 1,361,173 | | | 26,976 | | 7.86 | % | | | 1,499,399 | | | 35,215 | | 9.32 | % | | | 1,585,422 | | | 33,507 | | 8.48 | % | | | 1,687,044 | | | 35,695 | | 8.58 | % | |
Acquired Eurobank loans | | | | 144,001 | | | 7,561 | | 21.06 | % | | | 147,952 | | | 8,134 | | 21.81 | % | | | 194,775 | | | 16,014 | | 32.62 | % | | | 235,376 | | | 12,758 | | 21.74 | % | | | 274,731 | | | 15,504 | | 22.89 | % | |
Total loans | | | | 4,484,410 | | | 81,152 | | 7.26 | % | | | 4,552,234 | | | 82,371 | | 7.18 | % | | | 4,654,135 | | | 97,265 | | 8.29 | % | | | 4,748,145 | | | 90,504 | | 7.65 | % | | | 4,794,433 | | | 97,483 | | 8.25 | % | |
Total interest-earning assets | | | $ | 6,437,255 | | $ | 91,306 | | 5.69 | % | | $ | 6,600,614 | | $ | 92,907 | | 5.58 | % | | $ | 6,740,932 | | $ | 107,247 | | 6.31 | % | | $ | 6,708,519 | | $ | 99,413 | | 5.94 | % | | $ | 6,703,287 | | $ | 107,001 | | 6.47 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NOW accounts | | | $ | 1,152,055 | | $ | 1,081 | | 0.38 | % | | $ | 1,138,928 | | $ | 1,063 | | 0.37 | % | | $ | 1,110,804 | | $ | 1,034 | | 0.37 | % | | $ | 1,144,931 | | $ | 1,073 | | 0.38 | % | | $ | 1,260,952 | | $ | 1,281 | | 0.41 | % | |
Savings accounts | | | | 1,115,552 | | | 1,398 | | 0.50 | % | | | 1,180,220 | | | 1,516 | | 0.51 | % | | | 1,234,772 | | | 1,592 | | 0.51 | % | | | 1,300,001 | | | 1,662 | | 0.51 | % | | | 1,314,360 | | | 1,734 | | 0.54 | % | |
Time deposits | | | | 954,857 | | | 2,495 | | 1.05 | % | | | 938,291 | | | 2,456 | | 1.04 | % | | | 939,076 | | | 2,613 | | 1.10 | % | | | 969,818 | | | 2,624 | | 1.09 | % | | | 990,091 | | | 2,976 | | 1.22 | % | |
Brokered deposits | | | | 734,326 | | | 1,988 | | 1.09 | % | | | 673,570 | | | 1,438 | | 0.85 | % | | | 648,083 | | | 1,211 | | 0.74 | % | | | 571,950 | | | 1,085 | | 0.76 | % | | | 602,189 | | | 1,166 | | 0.79 | % | |
| | | | 3,956,790 | | | 6,962 | | 0.71 | % | | | 3,931,009 | | | 6,473 | | 0.65 | % | | | 3,932,735 | | | 6,450 | | 0.65 | % | | | 3,986,700 | | | 6,444 | | 0.65 | % | | | 4,167,592 | | | 7,157 | | 0.70 | % | |
Non-interest bearing deposit accounts | | | | 774,950 | | | - | | - | | | | 781,064 | | | - | | - | | | | 772,064 | | | - | | - | | | | 773,479 | | | - | | - | | | | 750,640 | | | - | | - | % | |
Fair value premium amortization and core deposit intangible amortization | | | | - | | | 162 | | - | | | | - | | | 202 | | - | | | | - | | | 201 | | - | | | | - | | | 160 | | - | | | | - | | | (53) | | - | | |
Total deposits | | | | 4,731,740 | | | 7,124 | | 0.60 | % | | | 4,712,073 | | | 6,675 | | 0.56 | % | | | 4,704,799 | | | 6,651 | | 0.56 | % | | | 4,760,179 | | | 6,604 | | 0.56 | % | | | 4,918,232 | | | 7,104 | | 0.59 | % | |
Borrowings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Securities sold under agreements to repurchase | | | | 799,613 | | | 6,099 | | 3.06 | % | | | 957,680 | | | 7,404 | | 3.07 | % | | | 1,132,373 | | | 7,605 | | 2.66 | % | | | 1,020,077 | | | 7,394 | | 2.91 | % | | | 939,377 | | | 7,164 | | 3.09 | % | |
Advances from FHLB and other borrowings | | | | 337,364 | | | 2,240 | | 2.66 | % | | | 334,029 | | | 2,306 | | 2.74 | % | | | 337,829 | | | 2,283 | | 2.68 | % | | | 344,088 | | | 2,248 | | 2.62 | % | | | 337,292 | | | 2,235 | | 2.69 | % | |
Subordinated capital notes | | | | 102,695 | | | 868 | | 3.39 | % | | | 102,462 | | | 900 | | 3.48 | % | | | 102,198 | | | 885 | | 3.44 | % | | | 101,938 | | | 875 | | 3.44 | % | | | 101,675 | | | 863 | | 3.44 | % | |
Total borrowings | | | | 1,239,672 | | | 9,207 | | 2.98 | % | | | 1,394,171 | | | 10,610 | | 3.02 | % | | | 1,572,400 | | | 10,773 | | 2.72 | % | | | 1,466,103 | | | 10,517 | | 2.88 | % | | | 1,378,344 | | | 10,262 | | 3.02 | % | |
Total interest-bearing liabilities | | | $ | 5,971,412 | | $ | 16,331 | | 1.10 | % | | $ | 6,106,244 | | $ | 17,285 | | 1.12 | % | | $ | 6,277,199 | | $ | 17,424 | | 1.10 | % | | $ | 6,226,282 | | $ | 17,121 | | 1.10 | % | | $ | 6,296,576 | | $ | 17,366 | | 1.12 | % | |
Interest rate spread | | | | | | $ | 74,975 | | 4.59 | % | | | | | $ | 75,622 | | 4.46 | % | | | | | $ | 89,823 | | 5.21 | % | | | | | $ | 82,292 | | 4.84 | % | | | | | $ | 89,635 | | 5.35 | % | |
Net interest margin | | | | | | | | | 4.67 | % | | | | | | | | 4.55 | % | | | | | | | | 5.29 | % | | | | | | | | 4.92 | % | | | | | | | | 5.42 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ASC 310-30 loan cost recoveries: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquired BBVAPR loans | | | | | | $ | 683 | | | | | | | | $ | 354 | | | | | | | | $ | 6,106 | | | | | | | | $ | 941 | | | | | | | | $ | 1,364 | | | | |
Acquired Eurobank loans | | | | | | | 1,326 | | | | | | | | | 2,397 | | | | | | | | | 6,991 | | | | | | | | | 2,635 | | | | | | | | | 2,042 | | | | |
| | | | | | $ | 2,009 | | | | | | | | $ | 2,751 | | | | | | | | $ | 13,097 | | | | | | | | $ | 3,576 | | | | | | | | $ | 3,406 | | | | |
Adjusted excluding cost recoveries (Non-GAAP): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total interest-earning assets | | | $ | 6,437,255 | | $ | 89,297 | | 5.56 | % | | $ | 6,600,614 | | $ | 90,156 | | 5.42 | % | | $ | 6,740,932 | | $ | 94,150 | | 5.54 | % | | $ | 6,708,519 | | $ | 95,837 | | 5.73 | % | | $ | 6,703,287 | | $ | 103,595 | | 6.27 | % | |
Interest rate spread | | | | | | $ | 72,966 | | 4.46 | % | | | | | $ | 72,871 | | 4.30 | % | | | | | $ | 76,726 | | 4.44 | % | | | | | $ | 78,716 | | 4.63 | % | | | | | $ | 86,229 | | 5.15 | % | |
Net interest margin | | | | | | | | | 4.55 | % | | | | | | | | 4.38 | % | | | | | | | | 4.52 | % | | | | | | | | 4.71 | % | | | | | | | | 5.22 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
6 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 6: Loan Information and Performance Statistics (Excluding Acquired Loans) (1) | | | |
| | | 2016 | | 2015 | | 2015 | | 2015 | | 2015 |
(Dollars in thousands) (unaudited) | | | Q1 | | Q4 | | Q3 | | Q2 | | Q1 |
Net Charge-offs | | | | | | | | | | | | | | | | |
Mortgage: | | | | | | | | | | | | | | | | |
Charge-offs | | | $ | 1,662 | | $ | 1,568 | | $ | 1,058 | | $ | 1,356 | | $ | 1,414 |
Recoveries | | | | (145) | | | (53) | | | (270) | | | (67) | | | - |
Total mortgage | | | | 1,517 | | | 1,515 | | | 788 | | | 1,289 | | | 1,414 |
Commercial: | | | | | | | | | | | | | | | | |
Charge-offs | | | | 1,011 | | | 3,229 | | | 828 | | | 497 | | | 992 |
Recoveries | | | | (88) | | | (60) | | | (63) | | | (219) | | | (89) |
Total commercial | | | | 923 | | | 3,169 | | | 765 | | | 278 | | | 903 |
Consumer: | | | | | | | | | | | | | | | | |
Charge-offs | | | | 2,327 | | | 2,227 | | | 2,471 | | | 2,309 | | | 1,676 |
Recoveries | | | | (102) | | | (142) | | | (186) | | | (390) | | | (153) |
Total consumer | | | | 2,225 | | | 2,085 | | | 2,285 | | | 1,919 | | | 1,523 |
Auto and Leasing: | | | | | | | | | | | | | | | | |
Charge-offs | | | | 8,362 | | | 9,068 | | | 8,510 | | | 7,662 | | | 8,136 |
Recoveries | | | | (2,979) | | | (3,100) | | | (3,251) | | | (3,425) | | | (3,384) |
Total auto and leasing | | | | 5,383 | | | 5,968 | | | 5,259 | | | 4,237 | | | 4,752 |
Total | | | $ | 10,048 | | $ | 12,737 | | $ | 9,097 | | $ | 7,723 | | $ | 8,592 |
Net Charge-off Rates | | | | | | | | | | | | | | | | |
Mortgage | | | | 0.80% | | | 0.80% | | | 0.42% | | | 0.66% | | | 0.72% |
Commercial | | | | 0.26% | | | 0.91% | | | 0.23% | | | 0.08% | | | 0.28% |
Consumer | | | | 3.80% | | | 3.68% | | | 4.33% | | | 3.99% | | | 3.36% |
Auto and Leasing | | | | 3.15% | | | 3.59% | | | 3.28% | | | 2.74% | | | 3.20% |
Total | | | | 1.30% | | | 1.67% | | | 1.23% | | | 1.06% | | | 1.21% |
Average Loans Held For Investment | | | | | | | | | | | | | | | | |
Mortgage | | | $ | 756,291 | | $ | 756,530 | | $ | 758,689 | | $ | 782,753 | | $ | 787,330 |
Commercial | | | | 1,425,332 | | | 1,394,597 | | | 1,349,511 | | | 1,333,276 | | | 1,269,104 |
Consumer | | | | 234,499 | | | 226,783 | | | 210,933 | | | 192,572 | | | 181,464 |
Auto and Leasing | | | | 684,035 | | | 665,199 | | | 640,828 | | | 618,746 | | | 594,760 |
Total | | | $ | 3,100,157 | | $ | 3,043,109 | | $ | 2,959,961 | | $ | 2,927,347 | | $ | 2,832,658 |
| | | | | | | | | | | | | | | | |
7 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 6: Loan Information and Performance Statistics (Excluding Acquired Loans) (Continued) (1) |
| | | 2016 | | 2015 | | 2015 | | 2015 | | 2015 |
(Dollars in thousands) (unaudited) | | | Q1 | | Q4 | | Q3 | | Q2 | | Q1 |
Early Delinquency (30 - 89 days past due) | | | | | | | | | | | | | | | | |
Mortgage | | | $ | 31,627 | | $ | 36,092 | * | $ | 37,377 | | $ | 68,515 | | $ | 63,060 |
Commercial | | | | 2,353 | | | 4,461 | | | 1,678 | | | 5,532 | | | 4,453 |
Consumer | | | | 4,341 | | | 4,128 | | | 3,585 | | | 3,089 | | | 3,957 |
Auto and Leasing | | | | 71,004 | | | 70,464 | | | 71,627 | | | 66,044 | | | 64,287 |
Total | | | $ | 109,325 | | $ | 115,145 | | $ | 114,267 | | $ | 143,180 | | $ | 135,757 |
Early Delinquency Rates (30 - 89 days past due) | | | | | | | | | | | | | | | | |
Mortgage | | | | 4.21% | | | 4.76% | | | 4.90% | | | 9.05% | | | 7.99% |
Commercial | | | | 0.17% | | | 0.31% | | | 0.12% | | | 0.41% | | | 0.34% |
Consumer | | | | 1.72% | | | 1.70% | | | 1.57% | | | 1.45% | | | 2.04% |
Auto and Leasing | | | | 10.33% | | | 10.53% | | | 11.06% | | | 10.60% | | | 10.68% |
Total | | | | 3.51% | | | 3.70% | | | 3.77% | | | 4.84% | | | 4.67% |
Total Delinquency (30 days and over past due) | | | | | | | | | | | | | | | | |
Mortgage: | | | | | | | | | | | | | | | | |
Traditional, Non traditional, and Loans under Loss Mitigation | | | $ | 97,424 | | $ | 102,988 | | $ | 104,355 | | $ | 127,609 | | $ | 122,597 |
GNMA's buy-back option program | (30) | | | 7,684 | | | 7,945 | | | 6,993 | | | 6,961 | | | 37,458 |
Total mortgage | | | | 105,108 | | | 110,933 | | | 111,348 | | | 134,570 | | | 160,055 |
Commercial | | | | 19,686 | | | 21,138 | | | 17,014 | | | 16,062 | | | 13,518 |
Consumer | | | | 5,934 | | | 5,171 | | | 4,832 | | | 4,244 | | | 5,207 |
Auto and Leasing | | | | 78,746 | | | 78,757 | | | 80,613 | | | 73,464 | | | 71,482 |
Total | | | $ | 209,474 | | $ | 215,999 | | $ | 213,807 | | $ | 228,340 | | $ | 250,262 |
Total Delinquency Rates (30 days and over past due) | | | | | | | | | | | | | | | | |
Mortgage: | | | | | | | | | | | | | | | | |
Traditional, Non traditional, and Loans under Loss Mitigation | | | | 12.96% | | | 13.59% | | | 13.68% | | | 16.85% | | | 15.53% |
GNMA's buy-back option program | (30) | | | 1.02% | | | 1.05% | | | 0.92% | | | 0.92% | | | 4.74% |
Total mortgage | | | | 13.98% | | | 14.64% | | | 14.60% | | | 17.77% | | | 20.27% |
Commercial | | | | 1.38% | | | 1.47% | | | 1.22% | | | 1.18% | | | 1.02% |
Consumer | | | | 2.35% | | | 2.13% | | | 2.12% | | | 2.00% | | | 2.69% |
Auto and Leasing | | | | 11.46% | | | 11.77% | | | 12.45% | | | 11.79% | | | 11.87% |
Total | | | | 6.72% | | | 6.94% | | | 7.06% | | | 7.72% | | | 8.60% |
Nonperforming Assets | (21) | | | | | | | | | | | | | | | |
Mortgage | | | $ | 76,218 | | $ | 77,875 | | $ | 78,148 | | $ | 74,528 | | $ | 76,662 |
Commercial | | | | 212,345 | | | 215,281 | | | 222,072 | | | 224,014 | | | 222,820 |
Consumer | | | | 2,039 | | | 1,631 | | | 2,004 | | | 1,512 | | | 1,605 |
Auto and Leasing | | | | 7,873 | | | 8,418 | | | 10,076 | | | 8,587 | | | 8,482 |
Total nonperforming loans | | | | 298,475 | | | 303,205 | | | 312,300 | | | 308,641 | | | 309,569 |
Foreclosed real estate | | | | 10,502 | | | 9,772 | | | 10,517 | | | 9,956 | | | 10,697 |
Other repossessed assets | | | | 2,796 | | | 3,845 | | | 5,134 | | | 8,624 | | | 10,332 |
Total nonperforming assets | | | $ | 311,773 | | $ | 316,822 | | $ | 327,951 | | $ | 327,221 | | $ | 330,598 |
Nonperforming Loan Rates | | | | | | | | | | | | | | | | |
Mortgage | | | | 10.14% | | | 10.28% | | | 10.25% | | | 9.84% | | | 9.71% |
Commercial | | | | 14.90% | | | 14.93% | | | 15.98% | | | 16.43% | | | 16.82% |
Consumer | | | | 0.81% | | | 0.67% | | | 0.88% | | | 0.71% | | | 0.83% |
Auto and Leasing | | | | 1.15% | | | 1.26% | | | 1.56% | | | 1.38% | | | 1.41% |
Total loans | | | | 9.58% | | | 9.74% | | | 10.32% | | | 10.44% | | | 10.64% |
| | | | | | | | | | | | | | | | |
* During Q3 2015, the Company changed its early delinquency reporting on mortgage loans from one scheduled payment due to two scheduled payments due in order to comply with regulatory reporting instructions and be comparable with local peers. Troubled debt restructured loans remain using one scheduled payment due. |
| | | | | | | | | | | | | | | | |
8 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | | | |
Table 7: Allowance for Loan and Lease Losses | | | | | | | | | | | | |
| | | Quarter Ended March 31, 2016 |
| | | | | | | | | Auto and | | | | |
(Dollars in thousands) (unaudited) | | | Mortgage | | Commercial | | Consumer | | Leasing | | Unallocated | | Total |
Non-acquired loans | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 18,352 | | $ | 64,791 | | $ | 11,197 | | $ | 18,261 | | $ | 25 | | $ | 112,626 |
Provision for loan and lease losses | | | | 1,949 | | | 338 | | | 2,442 | | | 5,838 | | | 93 | | | 10,660 |
Charge-offs | | | | (1,662) | | | (1,011) | | | (2,327) | | | (8,362) | | | - | | | (13,362) |
Recoveries | | | | 145 | | | 88 | | | 102 | | | 2,979 | | | - | | | 3,314 |
Balance at end of period | | | $ | 18,784 | | $ | 64,206 | | $ | 11,414 | | $ | 18,716 | | $ | 118 | | $ | 113,238 |
Allowance coverage ratio | | | | 2.50% | | | 4.50% | | | 4.52% | | | 2.72% | | | 0.00% | | | 3.63% |
| | | | | | | | | | | | | | | | | | | |
Acquired loans | | | | | | | | | | | | | | | | | | | |
Acquired BBVAPR loans: | | | | | | | | | | | | | | | | | | | |
Acquired loans accounted for under ASC 310-20 | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | | | | $ | 26 | | $ | 3,429 | | $ | 2,087 | | $ | - | | $ | 5,542 |
(Recapture) provision for loan and lease losses | | | | | | | (28) | | | 545 | | | (221) | | | - | | | 296 |
Charge-offs | | | | | | | (7) | | | (812) | | | (737) | | | - | | | (1,556) |
Recoveries | | | | | | | 32 | | | 81 | | | 598 | | | - | | | 711 |
Balance at end of period | | | | | | $ | 23 | | $ | 3,243 | | $ | 1,727 | | $ | - | | $ | 4,993 |
| | | | | | | | | | | | | | | | | | | |
Acquired loans accounted for under ASC 310-30 | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 1,678 | | $ | 21,161 | | $ | 84 | | $ | 2,862 | | $ | - | | $ | 25,785 |
Provision (recapture) for loan and lease losses, net | | | | 84 | | | (665) | | | (84) | | | 2,693 | | | - | | | 2,028 |
Loan pools fully charged-off | | | | - | | | (66) | | | - | | | - | | | - | | | (66) |
Balance at end of period | | | $ | 1,762 | | $ | 20,430 | | $ | - | | $ | 5,555 | | $ | - | | $ | 27,747 |
| | | | | | | | | | | | | | | | | | | |
Acquired Eurobank loans: | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 32,624 | | $ | 57,187 | | $ | 367 | | $ | - | | $ | - | | $ | 90,178 |
(Recapture) provision for loan and lease losses, net | | | | (54) | | | 859 | | | - | | | - | | | - | | | 805 |
Loan pools fully charged-off | | | | - | | | (134) | | | - | | | - | | | - | | | (134) |
FDIC shared-loss portion of provision for covered loan and lease losses, net | | | | 1,444 | | | - | | | - | | | - | | | - | | | 1,444 |
Balance at end of period | | | $ | 34,014 | | $ | 57,912 | | $ | 367 | | $ | - | | $ | - | | $ | 92,293 |
| | | | | | | | | | | | | | | | | | | |
Total acquired loans | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 34,302 | | $ | 78,374 | | $ | 3,880 | | $ | 4,949 | | $ | - | | $ | 121,505 |
Provision for loan and lease losses | | | | 30 | | | 166 | | | 461 | | | 2,472 | | | - | | | 3,129 |
Charge-offs | | | | - | | | (7) | | | (812) | | | (737) | | | - | | | (1,556) |
Recoveries | | | | - | | | 32 | | | 81 | | | 598 | | | - | | | 711 |
Loan pools fully charged-off | | | | - | | | (200) | | | - | | | - | | | - | | | (200) |
FDIC shared-loss portion of provision for covered loan and lease losses, net | | | | 1,444 | | | - | | | - | | | - | | | - | | | 1,444 |
Balance at end of period | | | $ | 35,776 | | $ | 78,365 | | $ | 3,610 | | $ | 7,282 | | $ | - | | $ | 125,033 |
| | | | | | | | | | | | | | | | | | | |
9 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | | | |
Table 8: Accretable Yield on Loans Accounted for Under ASC 310-30 (Loans Acquired with Deteriorated Credit Quality, including those by Analogy) |
| | | Quarter Ended March 31, 2016 |
(Dollars in thousands) (unaudited) | | | Mortgage | | Commercial | | Construction | | Auto | | Consumer | | Total |
Accretable Yield and Non-Accretable Discount | | | | | | | | | | | | | | | | | | | |
Acquired BBVAPR loans: | | | | | | | | | | | | | | | | | | | |
Accretable Yield | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 268,794 | | $ | 45,411 | | $ | 19,615 | | $ | 21,578 | | $ | 6,290 | | $ | 361,688 |
Change in expected cash flows | | | | - | | $ | 128 | | $ | 200 | | $ | 1 | | $ | - | | $ | 329 |
Accretion | | | | (8,307) | | | (5,839) | | | (1,869) | | | (4,211) | | | (938) | | | (21,164) |
Transfers from (to) non-accretable discount | | | | 70 | | | 402 | | | (790) | | | 219 | | | (91) | | | (190) |
Balance at end of period | | | $ | 260,557 | | $ | 40,102 | | $ | 17,156 | | $ | 17,587 | | $ | 5,261 | | $ | 340,663 |
| | | | | | | | | | | | | | | | | | | |
Non-Accretable Discount | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 374,772 | | $ | 11,781 | | $ | 6,764 | | $ | 22,039 | | $ | 18,834 | | $ | 434,190 |
Change in actual and expected cash flows | | | | (4,547) | | | (663) | | | (122) | | | 118 | | | (190) | | | (5,404) |
Transfers (to) from accretable yield | | | | (70) | | | (402) | | | 790 | | | (219) | | | 91 | | | 190 |
Balance at end of period | | | $ | 370,155 | | $ | 10,716 | | $ | 7,432 | | $ | 21,938 | | $ | 18,735 | | $ | 428,976 |
| | | | | | | | | | | | | | | | |
| | | | | | | | | Construction & | | | | | | | | | |
| | | | | | | | | Development | | | | | | | | | |
| | | Loans Secured | | | | | Secured by | | | | | | | | | |
| | | by 1-4 Family | | Commercial | | 1-4 Family | | | | | | | | | |
| | | Residential | | and Other | | Residential | | | | | | | | | |
| | | Properties | | Construction | | Properties | | Leasing | | Consumer | | Total |
Acquired Eurobank loans: | | | | | | | | | | | | | | | | | | | |
Accretable Yield | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 51,954 | | $ | 26,969 | | $ | 2,255 | | $ | - | | $ | 3,213 | | $ | 84,391 |
Change in expected cash flows | | | | 984 | | | 11,093 | | | (23) | | | - | | | (2,028) | | | 10,026 |
Accretion | | | | (2,266) | | | (4,095) | | | (15) | | | - | | | (1,185) | | | (7,561) |
Transfers from (to) non-accretable discount | | | | 115 | | | (765) | | | 20 | | | - | | | - | | | (630) |
Balance at end of period | | | $ | 50,787 | | $ | 33,202 | | $ | 2,237 | | $ | - | | $ | - | | $ | 86,226 |
| | | | | | | | | | | | | | | | | | | |
Non-Accretable Discount | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 12,869 | | $ | - | | $ | - | | $ | - | | $ | 8,287 | | $ | 21,156 |
Change in actual and expected cash flows | | | | (51) | | | (765) | | | 19 | | | - | | | (8,287) | | | (9,084) |
Transfers (to) from accretable yield | | | | (115) | | | 765 | | | (19) | | | - | | | - | | | 631 |
Balance at end of period | | | $ | 12,703 | | $ | - | | $ | - | | $ | - | | $ | - | | $ | 12,703 |
| | | | | | | | | | | | | | | | | | | |
10 |
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. |
| | | | | | | | | | | | | | | | |
| | | 2016 | | 2015 | | 2015 | | 2015 | | 2015 |
(Dollars in thousands) (unaudited) | | | Q1 | | Q4 | | Q3 | | Q2 | | Q1 |
Average Equity to Non-GAAP Average Tangible Common Equity | | | | | | | | | | | | | | | | |
Average total stockholders' equity | | | $ | 899,858 | | $ | 905,646 | | $ | 912,598 | | $ | 929,867 | | $ | 948,302 |
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 | | | $ | 733,988 | | $ | 739,776 | | $ | 746,728 | | $ | 763,997 | | $ | 782,432 |
Less: Average intangible assets | | | | (93,759) | | | (94,217) | | | (94,697) | | | (95,168) | | | (95,616) |
Average tangible common equity | | | $ | 640,229 | | $ | 645,559 | | $ | 652,031 | | $ | 668,829 | | $ | 686,816 |
Stockholders' Equity to Non-GAAP Tangible Common Equity | | | | | | | | | | | | | | | | |
Total stockholders' equity | | | $ | 903,801 | | $ | 897,077 | | $ | 907,888 | | $ | 911,599 | | $ | 936,379 |
Less: Intangible assets | | | | (93,487) | | | (93,907) | | | (94,383) | | | (94,859) | | | (95,336) |
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 | | | $ | 644,444 | | $ | 637,300 | | $ | 647,635 | | $ | 650,870 | | $ | 675,173 |
| | | | | | | | | | | | | | | | |
Common stock outstanding at end of period | | | | 43,914 | | | 43,868 | | | 43,868 | | | 44,368 | | | 44,665 |
Tangible book value | | | $ | 14.68 | | $ | 14.53 | | $ | 14.76 | | $ | 14.67 | | $ | 15.12 |
Total Assets to Tangible Assets | | | | | | | | | | | | | | | | |
Total assets | | | $ | 6,874,572 | | $ | 7,099,149 | | $ | 7,203,822 | | $ | 7,398,325 | | $ | 7,364,156 |
Less: Intangible assets | | | | (93,487) | | | (93,907) | | | (94,383) | | | (94,859) | | | (95,336) |
Tangible assets | | | $ | 6,781,085 | | $ | 7,005,242 | | $ | 7,109,439 | | $ | 7,303,466 | | $ | 7,268,820 |
Non-GAAP TCE Ratio | | | | | | | | | | | | | | | | |
Tangible common equity | | | $ | 644,444 | | $ | 637,300 | | $ | 647,635 | | $ | 650,870 | | $ | 675,173 |
Tangible assets | | | | 6,781,085 | | | 7,005,242 | | | 7,109,439 | | | 7,303,466 | | | 7,268,820 |
TCE ratio | | | | 9.50% | | | 9.10% | | | 9.11% | | | 8.91% | | | 9.29% |
| | | | | | | | | | | | | | | | |
11 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 9: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures (Continued) |
|
| | | BASEL III |
| | | Standardized |
| | | 2016 | | 2015 | | 2015 | | 2015 | | 2015 |
(Dollars in thousands) (unaudited) | | | Q1 | | Q4 | | Q3 | | Q2 | | Q1 |
Regulatory Capital Metrics | | | | | | | | | | | | | | | | |
Common equity Tier 1 capital | | | $ | 585,144 | | | 594,482 | | | 601,789 | | | 611,542 | | | 633,297 |
Tier 1 capital | | | | 776,180 | | | 782,912 | | | 782,561 | | | 790,937 | | | 809,652 |
Total risk-based capital | (23) | | | 838,283 | | | 846,747 | | | 847,267 | | | 868,569 | | | 887,042 |
Risk-weighted assets | | | | 4,744,449 | | | 4,896,539 | | | 5,003,285 | | | 4,988,754 | | | 5,015,090 |
Regulatory Capital Ratios | | | | | | | | | | | | | | | | |
Common equity Tier 1 capital ratio | (24) | | | 12.33% | | | 12.14% | | | 12.03% | | | 12.26% | | | 12.63% |
Tier 1 risk-based capital ratio | (25) | | | 16.36% | | | 15.99% | | | 15.64% | | | 15.85% | | | 16.14% |
Total risk-based capital ratio | (26) | | | 17.67% | | | 17.29% | | | 16.93% | | | 17.41% | | | 17.69% |
Leverage ratio | (27) | | | 11.38% | | | 11.18% | | | 10.93% | | | 11.05% | | | 11.23% |
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Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach | | | | | | | | | | | | | | | | |
Total stockholders' equity | | | $ | 903,801 | | $ | 897,077 | | $ | 907,888 | | $ | 911,599 | | $ | 936,379 |
Less: 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 |
Unrealized gains on available-for-sale securities, net of income tax | (28) | | | (15,089) | | | (16,925) | | | (22,486) | | | (18,833) | | | (30,215) |
Unrealized losses on cash flow hedges, net of income tax | (28) | | | 2,805 | | | 2,927 | | | 4,330 | | | 4,532 | | | 5,891 |
| | | | 725,647 | | | 717,209 | | | 723,862 | | | 731,428 | | | 746,185 |
Less: Disallowed goodwill | | | | (86,069) | | | (86,069) | | | (86,069) | | | (86,069) | | | (86,069) |
Disallowed other intangible assets, net | (29) | | | (2,715) | | | (1,912) | | | (2,028) | | | (2,145) | | | (2,261) |
Disallowed deferred tax assets, net | (29) | | | (51,719) | | | (34,746) | | | (33,976) | | | (31,672) | | | (24,558) |
Common equity Tier 1 capital | | | | 585,144 | | | 594,482 | | | 601,789 | | | 611,542 | | | 633,297 |
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 |
Less: Disallowed deferred tax assets, net | | | | (9,834) | | | (12,440) | | | (20,098) | | | (21,475) | | | (24,515) |
Tier 1 capital | | | | 776,180 | | | 782,912 | | | 782,561 | | | 790,937 | | | 809,652 |
Plus: Long-term debt qualifying as Tier 2 capital | | | | - | | | - | | | - | | | 13,400 | | | 13,400 |
Qualifying allowance for loan and lease losses | | | | 62,103 | | | 63,835 | | | 64,706 | | | 64,232 | | | 63,990 |
Tier 2 capital | | | | 62,103 | | | 63,835 | | | 64,706 | | | 77,632 | | | 77,390 |
Total risk-based capital | | | $ | 838,283 | | $ | 846,747 | | $ | 847,267 | | $ | 868,569 | | $ | 887,042 |
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12 |
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 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) | Total banking and wealth management revenues. |
(3) | During Q1 2015, the Company placed its $200 million participation in a fuel purchase line of credit with the Puerto Rico Electric Power Authority (PREPA) on non-accrual status and recorded a $24.0 million provision for loan and lease losses. During Q4 2015, the Company recorded an additional $29.3 million provision for loan and lease losses related to PREPA. Both were part of the overall quarterly provision for loan and lease losses. |
(4) | Calculated based on net income (loss) available to common shareholders divided by average common shares outstanding for the period. |
(5) | Calculated based on net income (loss) 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. |
(6) | The Board of directors decreased OFG's regular quarterly dividend per common share to $0.06 per share during Q4 2015.The Board of directors had previously increased OFG's regular quarterly dividend per common share to $0.10 per share during Q4 2014. |
(7) | 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. |
(8) | Information includes all loans held for investment, including all acquired loans. Acquired loans, including those accounted for under ASC 310-30, are disclosed at carrying amount. |
(9) | Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period. |
(10) | Calculated based on annualized income, net of tax, for the period divided by average total assets for the period. |
(11) | 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. |
(12) | Calculated based on non-interest expense for the period divided by total net interest income and total banking and financial services revenues for the period. |
(13) | Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period. |
(14) | 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. |
(15) | During Q3 2015, the Company offered a voluntary early retirement program for qualified employees and accumulated additional compensation expenses of $917 thousand related to this program. |
(16) | At September 30, 2015, amount includes a $25 million receivable from Q2 2015 loss-share certifications for non-single family residential mortgage loans and a $20 million receivable from the sale of non-performing covered loans during Q3 2015, which were paid by the FDIC in December 2015. |
(17) | Covered loans are no longer a material amount. Therefore, during Q3 2015, the Company changed its presentation of loans to include the following loan segments: "Non-acquired" loans, "Acquired BBVAPR" loans and "Acquired Eurobank" loans. |
(18) | During Q4 2015, the FDIC expense includes a charge of $2.2 million for reimbursements to the FDIC for recoveries of loans that were previously covered by the shared-loss agreement. |
(19) | During Q2 2015, the Company purchased 303,985 shares under the current stock repurchase program for a total of $4.2 million, at an average price of $13.91 per share. In addition, during Q3 2015, the Company purchased 500,000 shares under the current stock repurchase program for a total of $4.7 million, at an average price of $9.39 per share. |
(20) | Production of new loans (excluding renewals). |
(21) | Loans accounted for under ASC 310-30 (Loans acquired with deteriorated credit quality, including those by analogy), including Eurobank acquired loans, are considered to be performing due to the application of the accretion method, in which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analyses. Therefore, they are not included as non-performing loans. |
(22) | During Q1 2016, the Company sold mortgage backed securities amounting to $263.3 million with a gain of $16.1 million and obligations of Puerto Rico government and political subdivisions of $12.8 million with a loss of $4.1 million. In addition, the Company partially unwound repurchase agreements in the amount of $268 million at a cost of $12 million. |
(23) | Total risk-based capital equals the sum of Tier 1 capital and Tier 2 capital. |
(24) | Common equity Tier 1 capital ratio is a regulatory capital measure calculated based on Common equity Tier 1 capital divided by risk-weighted assets. |
(25) | Tier 1 risk-based capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets. |
(26) | Total risk-based capital ratio is a regulatory capital measure calculated based on Total risk-based capital divided by risk-weighted assets. |
(27) | Leverage capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by average assets, after certain adjustments. |
(28) | During Q1 2015, the Company decided to elect the opt-out option to continue to exclude AOCI items from regulatory capital calculation. |
(29) | Amounts based on transition provisions for regulatory capital deductions and adjustments of 60% for 2016 and 40% for 2015. |
(30) | During Q2 2015, the Company sold mortgage servicing rights on $653.5 million of mortgage loans to Scotiabank PR. As a result, the delinquent GNMA's buy-back option program loans and corresponding liability decreased $30.5 million from Q1 2015. |
(31) | The FDIC loss share coverage for the commercial loans and other non-single family loans was in effect until June 30, 2015. The FDIC granted an extension of 120 days for the sale of part of this portfolio and agreed to cover up to $20 million with respect to the aggregate loss resulting from this sale. Therefore, the FDIC Indemnification Asset for projected claimable losses on non-single family residential loans loss-share period expired at June 30, 2015. |
(32) | On September 28, 2015, the Company sold a portion of covered non-performing commercial loans amounting to $197.1 million unpaid principal balance ($100.0 million carrying amount). The sales price was 18.44% of UPB, or $36.3 million. The FDIC agreed to cover $20.0 million of losses as part of its loss-share agreement with the Company. As a result, a $20.0 million reimbursement was recorded in the statement of operations. The Company also recorded a $32.9 million provision for loan and lease losses for acquired Eurobank loans, which was partially offset by $4.6 million in cost recoveries. Also, as part of this transaction, the Company sold certain non-performing commercial loans and real estate owned from the BBVAPR acquisition amounting to $38.1 million unpaid principal balance ($9.9 million carrying amount). The sales price was $5.2 million. As a result, a $5.2 million provision for loan and lease losses was recorded for BBVAPR acquired loans, which was partially offset by $2.4 million in cost recoveries. In addition, certain real estate owned with a carrying amount of $11.0 million was sold for $1.7 million. At September 30 , 2015, the Company had a $13.0 million receivable related to this sale and a $20.0 million receivable from the FDIC for the shared-loss portion, both balances were received in December 2015. |
(33) | During Q4 2015, the Company released $3.1 million of the Company's valuation allowance, increasing the deferred tax benefit for the period. This was the result of a change in entity type of its insurance subsidiary, Oriental Insurance Inc. to a limited liability corporation, now Oriental Insurance LLC. In addition, the deferred tax tax benefit increased $9.0 million as a result of an increase in the allowance for loan and lease losses. |
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