Exhibit 99
OFG Bancorp Reports 1Q19 Results
SAN JUAN, Puerto Rico, April 18, 2019 – OFG Bancorp (NYSE: OFG) reported results for the first quarter ended March 31, 2019.
Highlights 1Q19 vs. 1Q18
• Net revenues increased 7.7% to $99.3 million from $92.2 million. Increased interest income from Originated Loans and Investment Securities and Cash more than offset pay downs of Acquired Loans.
• Net income available to shareholders increased 62.4% to $21.8 million from $13.5 million. Results reflect increased operating leverage, reduced provision and elimination of dividends on Series C preferred stock following its conversion.
• Earnings per share diluted of $0.42 compared to $0.30, a 40% increase.
• Book value per common share increased 3.0% to $18.30. Tangible Book Value per common share expanded 5.4% to $16.56.
• Loans increased 6.5% to $4.40 billion, while deposits grew 1.3% to $4.90 billion.
• New loan origination of $276.4 million included a 41.4% increase in commercial loans due to the success of Oriental’s strategic targeting of small business customers.
• Net Interest Margin of 5.37%, a 15 basis points increase, while both credit quality and the efficiency ratio improved.
• Return on Average Assets increased 33 basis points to 1.42%, Return on Average Tangible Common Equity expanded 259 basis points to 10.32%, and capital metrics continued at new multi-year highs.
CEO Comment
“After the rebound we saw in 2018, our first quarter of 2019 reflected strong steady growth,” said José Rafael Fernández, President, Chief Executive Officer, and Vice Chairman of the Board.
“This was achieved due to the continued effectiveness of our retail and commercial strategies in meeting the economic shift that has occurred in Puerto Rico, as a more positive outlook among both businesses and consumers has taken hold.
“Financially, we generated higher net revenues with stable non-interest expenses, resulting in a 40% year over year increase in earnings per share. Our key performance metrics moved in the right direction as return on assets, return on equity, net interest margin and efficiency ratio came in at levels similar to top performing mainland banks of our size in recent periods.
“Strategically, we continued to advance our retail and commercial channel differentiation through superior service, convenience and technology, where we ask customers to Vive la Diferencia (Live the Difference). We are encouraged by the noticeable increase in small business loan production and another quarter of more than 3% year over year customer growth.
“Thanks to our entire OFG team for their commitment and dedication, and to all our retail and commercial customers for their support and loyalty.”
Conference Call
A conference call to discuss OFG’s 1Q19 results, outlook and related matters will be held today at 10:00 AM Eastern Time. Dial (888) 562-3356 or (973) 582-2700. Use conference ID 989-5529. The call can also be accessed live on OFG’s website at www.ofgbancorp.com. A webcast replay will be available shortly thereafter.
Income Statement
Unless otherwise noted, the following compares data for the first quarter 2019 to the first quarter 2018.
• Interest Income: Increased 13.9% or $11.5 million to $94.7 million. Originated Loans increased $13.0 million due to higher average balances and yield. Investment Securities increased $2.0 million due to higher average balances and higher yields on cash equivalents and investment securities. Acquired Loans declined $3.5 million.
• Interest Expense: Increased 40.8% or $3.8 million to $12.9 million, reflecting higher average deposit and borrowing balances and rates. The cost of customer deposits increased 6 basis points.
• Net Interest Margin: Excluding cost recoveries, core NIM grew to 5.34% from 5.18%. The increase reflected higher yield on originated commercial loans and cash balances and a larger proportion of higher yielding commercial and auto loans in the originated portfolio. This was partially offset by a higher cost of borrowings.
• Net Interest Income: Increased 10.5% or $7.8 million to $81.8 million primarily due to increased earning assets coupled with the 15 basis point increase in NIM.
• Total Provision for Loan and Lease Losses: Decreased 20.8% or $3.2 million to $12.2 million due to a reduction in provision for originated loans partially offset by a small increase in provision for acquired loans. Provision for originated loans was $3.6 million lower than 1Q18, which included $2.0 million for three commercial loans placed in non-accrual.
• Total Banking and Wealth Management Revenues: Declined 3.8% or $0.7 million to $17.6 million primarily due to lower MSR valuations in mortgage banking. Banking service revenues and wealth management remained at similar levels.
• Total Non-Interest Expenses: Remained approximately level at $52.2 million, resulting in a 401 basis point improvement in the Efficiency Ratio to 52.50%. Compared to the previous quarter, total non-interest expenses were marginally higher. This reflected seasonally higher
compensation expenses primarily due to FICA payments, higher credit expenses due to the semi-annual payment of local property taxes, and lower losses on the sale of repossessed assets.
• Effective Tax Rate: 33.0% compared to 32.1%.
• Dividends on Preferred Stock: Declined 53.0% to $1.6 million from $3.5 million due to the 4Q18 conversion of Series C Preferred to common.
Balance Sheet
Unless otherwise noted, the following compares data at March 31, 2019 to March 31, 2018.
• Total Loans: Increased 6.5% or $268.0 million to $4.40 billion as originated loans increased 13.1% or $421.9 million, while acquired loans declined $151.1 million. Compared to the year ended December 31, 2018, loans remained relatively flat, reflecting seasonal pay down of commercial lines of credit and loan prepayments.
• Loan Production: 1Q19 new loan production totaled $276.4 million compared to $309.4 million. Auto and consumer lending remained high at $120.2 million and $40.8 million, respectively; commercial lending at $60.5 million had a strong performance due to new or expanded business with small business customers; OFG USA loan participations of $31.7 million were similar to the last two trailing quarters; and residential mortgage lending totaled $23.1 million.
• Total Investments and Cash and Cash Equivalents: Increased 5.9% or $97.7 million to $1.76 billion, with Cash and Cash Equivalents up 39.3% or $143.6 million and Total Investments down 3.5% or $45.9 million. Compared to December 31, 2018, investments and cash increased 1.9% or $32.0 million. On January 1, 2019, OFG adopted ASU 2017-12, reclassifying all of its MBS from held-to-maturity to available-for-sale.
• Customer Deposits (excluding brokered): Increased 2.0% or $87.0 million to $4.45 billion. Demand deposits increased 4.7% or $100.3 million and savings accounts remained approximately level, while time deposits declined 1.6% or $15.8 million. Compared to December 31, 2018, customer deposits increased 1.4% or $62.9 million.
• Total Borrowings and Brokered Deposits: Increased 20.7% or $171.3 million to $1.00 billion. Repurchase agreement funding increased 57.5% or $157.6 million, FHLB advances and other borrowings increased 83.6% or $37.1 million, while brokered deposits declined 4.9% or $23.4 million. Compared to December 31, 2018, borrowings and brokered deposits declined 8.7% or $95.3 million.
• Total Stockholders’ Equity: Increased 7.8% or $74.3 million to $1.02 billion, reflecting increased retained earnings and legal surplus and reduced accumulated other comprehensive loss. Compared to December 31, 2018, stockholders’ equity increased 2.1% or $21.3 million.
Credit Quality
Unless otherwise noted, the following compares data on the originated loan portfolio at March 31, 2019 to March 31, 2018.
Credit quality remained strong with minor variations in key metrics. Non-performing loan rate at 3.37% fell 45 basis points. Allowance for loan losses declined 2.9% to $94.0 million, and as a percentage of loans, the allowance at 2.51% was down 41 basis points. Early and total delinquency
rates, at 3.61% and 6.33% were up 41 and 8 basis points, respectively. Net Charge-Offs increased 15.1% to $12.5 million, but as a percentage of loans, the net charge off rate remained at 1.32%.
Capital Position
Capital continued to be significantly above regulatory requirements for a well-capitalized institution. March 31, 2019 ratios improved across the board: Leverage at 14.64% increased 57 bps year over year and 42 bps from the year ended December 31, 2018, Common Equity Tier 1 at 17.09% increased 257 and 31, Tier 1 Risk-based at 19.49% increased 49 and 29, Total Risk-based Capital at 20.77% increased 48 and 29, and Tangible Common Equity at 13.05% increased 183 and 29.
Financial Supplement & Conference Call Presentation
OFG’s Financial Supplement, with full financial tables for the quarter ended March 31, 2019, and its 1Q19 Conference Call Presentation 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. See Tables 9-1 and 9-2 in OFG’s above-mentioned Financial Supplement for reconciliation of GAAP to non-GAAP Measures and Calculations.
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) changes to the financial condition of the government of Puerto Rico; (iv) amendments to the fiscal plan approved by the Financial Oversight and Management Board of Puerto Rico; (v) determinations in the court-supervised debt-restructuring process under Title III of PROMESA for the Puerto Rico government and all of its agencies, including some of its public corporations; (vi) the amount of government, private and philanthropic financial assistance for the reconstruction of Puerto Rico’s critical infrastructure, which suffered catastrophic damages caused by hurricane Maria; (vii) the pace and magnitude of Puerto Rico’s economic recovery; (viii) the potential impact of damages from future hurricanes and natural disasters in Puerto Rico; (ix) the fiscal and monetary policies of the federal government and its agencies; (x) changes in federal bank regulatory and supervisory policies, including required levels of capital; (xi) the relative strength or weakness of the commercial and consumer credit sectors and the real estate market in Puerto Rico; (xii) the performance of the stock and bond markets; (xiii) competition in the financial services industry; and (xiv) 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, 2018, 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 55th 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 wide range of retail and commercial banking, lending and wealth management products, services and technology, primarily in Puerto Rico. Visit us at Error! Hyperlink reference not valid.www.ofgbancorp.com.
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Contacts
Puerto Rico: Idalis Montalvo (idalis.montalvo@orientalbank.com) at (787) 777-2847
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, 2019 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 GAAP to Non-GAAP Measures and Calculation of Regulatory | | | |
| | | Capital | | 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 |
| | | 2019 | | 2018 | | 2018 | | 2018 | | 2018 | |
(Dollars in thousands, except per share data) (unaudited) | | | Q1 | | Q4 | | Q3 | | Q2 | | Q1 | |
Earnings | | | | | | | | | | | | | | | | | |
Net interest income | | | $ | 81,789 | | $ | 82,035 | | $ | 82,277 | | $ | 77,588 | | $ | 73,994 | |
Non-interest income, net (core) | (2) | | | 17,553 | | | 19,260 | | | 18,446 | | | 18,394 | | | 18,239 | |
Non-interest expense | | | | 52,152 | | | 51,719 | | | 50,941 | | | 52,300 | | | 52,121 | |
Pre-provision net revenues | (21) | | | 47,293 | | | 54,574 | | | 49,956 | | | 43,991 | | | 40,387 | |
Provision for loan and lease losses | | | | 12,249 | | | 11,300 | (c) | | 14,601 | | | 14,747 | | | 15,460 | |
Net income before income taxes | | | | 35,044 | | | 43,274 | | | 35,355 | | | 29,244 | | | 24,927 | |
Income tax expense | | | | 11,574 | | | 18,530 | | | 12,255 | | | 9,595 | | | 8,010 | |
Net income | | | $ | 23,470 | | $ | 24,744 | | $ | 23,100 | | $ | 19,649 | | $ | 16,917 | |
Common Share Statistics | | | | | | | | | | | | | | | | | |
Earnings per common share - basic | (3) | | $ | 0.43 | | $ | 0.47 | | $ | 0.45 | | $ | 0.37 | | $ | 0.31 | |
Earnings per common share - diluted | (4) | | $ | 0.42 | | $ | 0.45 | | $ | 0.42 | | $ | 0.35 | | $ | 0.30 | |
Average common shares outstanding | | | | 51,305 | | | 49,628 | (a) | | 43,996 | | | 43,975 | | | 43,955 | |
Average common shares outstanding and equivalents | | | | 51,626 | | | 51,602 | | | 51,464 | | | 51,226 | | | 51,121 | |
Cash dividends per common share | | | $ | 0.07 | | $ | 0.07 | (b) | $ | 0.06 | | $ | 0.06 | | $ | 0.06 | |
Book value per common share (period end) | | | $ | 18.30 | | $ | 17.90 | (a) | $ | 18.27 | | $ | 18.01 | | $ | 17.76 | |
Tangible book value per common share (period end) | (5) | | $ | 16.56 | | $ | 16.15 | (a) | $ | 16.23 | | $ | 15.96 | | $ | 15.71 | |
Balance Sheet (Average Balances) | | | | | | | | | | | | | | | | | |
Loans | (6) | | $ | 4,523,971 | | $ | 4,473,109 | | $ | 4,414,583 | | $ | 4,313,026 | | $ | 4,187,955 | |
Interest-earning assets | | | | 6,171,448 | | | 6,183,562 | | | 6,069,031 | | | 5,932,391 | | | 5,751,444 | |
Total assets | | | | 6,605,328 | | | 6,619,026 | | | 6,514,532 | | | 6,374,240 | | | 6,189,752 | |
Total deposits | | | | 4,890,707 | | | 4,987,275 | | | 4,940,822 | | | 4,856,935 | | | 4,782,601 | |
Interest-bearing deposits | | | | 3,791,083 | | | 3,866,676 | | | 3,858,412 | | | 3,772,900 | | | 3,761,871 | |
Borrowings | | | | 562,152 | | | 543,920 | | | 503,268 | | | 462,646 | | | 351,851 | |
Stockholders' equity | | | | 1,017,546 | | | 983,015 | | | 973,838 | | | 959,777 | | | 952,151 | |
Common stockholders' equity | | | | 935,676 | | | 881,971 | | | 807,968 | | | 793,907 | | | 786,281 | |
Performance Metrics | | | | | | | | | | | | | | | | | |
Net interest margin | (7) | | | 5.37% | | | 5.26% | | | 5.38% | | | 5.25% | | | 5.22% | |
Return on average assets | (8) | | | 1.42% | | | 1.50% | | | 1.42% | | | 1.23% | | | 1.09% | |
Return on average tangible common stockholders' equity | (9) | | | 10.32% | | | 11.67% | (a) | | 10.94% | | | 9.20% | | | 7.73% | |
Efficiency ratio | (10) | | | 52.50% | | | 51.06% | | | 50.58% | | | 54.49% | | | 56.51% | |
Full-time equivalent employees, period end | | | | 1,394 | | | 1,392 | | | 1,365 | | | 1,354 | | | 1,367 | |
Credit Quality Metrics | | | | | | | | | | | | | | | | | |
Excluding acquired loans: | (1) | | | | | | | | | | | | | | | | |
Allowance for loan and lease losses | | | $ | 94,035 | | $ | 95,188 | | $ | 95,236 | | $ | 94,218 | | $ | 96,832 | |
Allowance as a % of loans held for investment | | | | 2.51% | | | 2.54% | | | 2.62% | | | 2.66% | | | 2.92% | |
Net charge-offs | | | $ | 12,486 | | $ | 10,885 | (c) | $ | 12,402 | | $ | 15,449 | | $ | 10,844 | |
Net charge-off rate | (11) | | | 1.32% | | | 1.18% | | | 1.37% | | | 1.79% | | | 1.32% | |
Early delinquency rate (30 - 89 days past due) | | | | 3.61% | | | 3.34% | | | 3.32% | | | 3.07% | | | 3.20% | |
Total delinquency rate (30 days and over) | | | | 6.33% | | | 6.36% | | | 6.19% | | | 5.95% | | | 6.25% | |
Capital Ratios (Non-GAAP) | (12) | | | | | | | | | | | | | | | | |
Leverage ratio | | | | 14.64% | | | 14.22% | (a) | | 13.93% | | | 13.92% | | | 14.07% | |
Common equity Tier 1 capital ratio | | | | 17.09% | | | 16.78% | (a) | | 14.38% | | | 14.14% | | | 14.52% | |
Tier 1 risk-based capital ratio | | | | 19.49% | | | 19.20% | (a) | | 18.55% | | | 18.38% | | | 19.00% | |
Total risk-based capital ratio | | | | 20.77% | | | 20.48% | (a) | | 19.84% | | | 19.67% | | | 20.29% | |
Tangible common equity ("TCE") ratio | | | | 13.05% | | | 12.76% | (a) | | 10.88% | | | 10.95% | | | 11.22% | |
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(a) During the Q4 2018, the Company converted all of its outstanding 8.750% non-cumulative convertible perpetual preferred stock, series C into OFG Bancorp common stock. Each share of the 84,000 series C preferred stock was converted into 86.4225 shares of common stock. |
(b) During the Q4 2018, the Company increased the regular cash dividend per common share to $0.07 from $0.06. |
(c) During the Q4 2018, the Company received $1.8 million proceeds from the sale of fully charged-off originated auto and consumer loans. |
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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) | | | 2019 | | 2018 | | 2018 | | 2018 | | 2018 | |
Interest income: | | | | | | | | | | | | | | | | | |
Loans | (1) | | | | | | | | | | | | | | | | |
Non-acquired loans | | | $ | 71,298 | | $ | 70,747 | | $ | 68,387 | | $ | 62,710 | | $ | 58,306 | |
Acquired BBVAPR loans | | | | 10,247 | | | 10,935 | | | 12,144 | | | 12,353 | | | 12,965 | |
Acquired Eurobank loans | | | | 2,574 | | | 2,642 | | | 3,485 | | | 3,366 | | | 3,341 | |
Total interest income from loans | | | | 84,119 | | | 84,324 | | | 84,016 | | | 78,429 | | | 74,612 | |
Investment securities | | | | 10,591 | | | 10,782 | | | 10,121 | | | 9,577 | | | 8,558 | |
Total interest income | | | | 94,710 | | | 95,106 | | | 94,137 | | | 88,006 | | | 83,170 | |
Interest expense: | | | | | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | | | | | |
Core deposits | | | | 6,214 | | | 6,396 | | | 5,877 | | | 5,517 | | | 5,412 | |
Brokered deposits | | | | 2,835 | | | 3,003 | | | 2,728 | | | 2,134 | | | 1,886 | |
Total deposits | | | | 9,049 | | | 9,399 | | | 8,605 | | | 7,651 | | | 7,298 | |
Borrowings | | | | 3,872 | | | 3,672 | | | 3,255 | | | 2,767 | | | 1,878 | |
Total interest expense | | | | 12,921 | | | 13,071 | | | 11,860 | | | 10,418 | | | 9,176 | |
Net interest income | | | | 81,789 | | | 82,035 | | | 82,277 | | | 77,588 | | | 73,994 | |
Provision for loan and lease losses, excluding acquired loans | (1) | | | 11,333 | | | 10,842 | | | 13,420 | | | 12,835 | | | 14,958 | |
Provision (recapture) for acquired BBVAPR loan and lease losses | (1) | | | 1,567 | | | (998) | (b) | | 875 | | | 1,247 | | | 363 | |
Provision for acquired Eurobank loan and lease losses | (1) | | | (651) | (a) | | 1,456 | | | 306 | | | 665 | | | 139 | |
Total provision for loan and lease losses, net | | | | 12,249 | | | 11,300 | | | 14,601 | | | 14,747 | | | 15,460 | |
Net interest income after provision for loan and lease losses | | | | 69,540 | | | 70,735 | | | 67,676 | | | 62,841 | | | 58,534 | |
Non-interest income: | | | | | | | | | | | | | | | | | |
Banking service revenues | | | | 10,465 | | | 11,234 | | | 10,797 | | | 11,144 | | | 10,463 | |
Wealth management revenues | | | | 5,882 | | | 7,246 | | | 6,407 | | | 6,262 | | | 6,019 | |
Mortgage banking activities | | | | 1,206 | | | 780 | | | 1,242 | | | 988 | | | 1,757 | |
Total banking and financial service revenues | | | | 17,553 | | | 19,260 | | | 18,446 | | | 18,394 | | | 18,239 | |
Other income, net | | | | 103 | | | 4,998 | (c) | | 174 | | | 309 | | | 275 | |
Total non-interest income, net | | | | 17,656 | | | 24,258 | | | 18,620 | | | 18,703 | | | 18,514 | |
Non-interest expense: | | | | | | | | | | | | | | | | | |
Compensation and employee benefits | | | | 20,341 | | | 19,322 | | | 18,495 | | | 18,099 | | | 20,608 | |
Occupancy, equipment and infrastructure costs | | | | 7,746 | | | 7,762 | | | 8,388 | | | 9,166 | | | 7,768 | |
Net loss on sale of foreclosed real estate and other repossessed assets | | | | 1,070 | | | 1,834 | | | 1,210 | | | 392 | | | 1,226 | |
General and administrative expenses | | | | 20,699 | | | 20,963 | | | 20,112 | | | 22,746 | | | 20,100 | |
Total operating expenses | | | | 49,856 | | | 49,881 | | | 48,205 | | | 50,403 | | | 49,702 | |
Credit related expenses | | | | 2,296 | | | 1,838 | | | 2,736 | | | 1,897 | | | 2,419 | |
Total non-interest expense | | | | 52,152 | | | 51,719 | | | 50,941 | | | 52,300 | | | 52,121 | |
Income before income taxes | | | | 35,044 | | | 43,274 | | | 35,355 | | | 29,244 | | | 24,927 | |
Income tax expense | | | | 11,574 | | | 18,530 | (d) | | 12,255 | | | 9,595 | | | 8,010 | |
Net income | | | | 23,470 | | | 24,744 | | | 23,100 | | | 19,649 | | | 16,917 | |
Less: dividends on preferred stock | | | | | | | | | | | | | | | | | |
Convertible preferred stock | | | | - | | | - | (e) | | (1,838) | | | (1,837) | | | (1,838) | |
Other preferred stock | | | | (1,628) | | | (1,628) | | | (1,628) | | | (1,628) | | | (1,627) | |
Net income available to common shareholders | | | $ | 21,842 | | $ | 23,116 | | $ | 19,634 | | $ | 16,184 | | $ | 13,452 | |
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(a) During the 1Q 2019, the provision for acquired Eurobank loans and leases reflected better cashflows than expected. |
(b) During the 4Q 2018, the provision for acquired BBVAPR loans reflected better cashflows than expected. |
(c) During the 4Q 2018, the Company received a $5.0 million payment from the insurance company for Hurricane María impact on the Bank's operations. |
(d) During the 4Q 2018, the Company recognized an aggregate amount of $4.1 million income tax expense as a result of the Changes in Puerto Rico Tax Legislation, mainly driven by a reduction of the DTA since Regular Corporate Tax Rate changes from 39% to 37.5%. |
(e) During the Q4 2018, the Company converted of all of its outstanding 8.750% non-cumulative convertible perpetual preferred stock, series C into OFG Bancorp common stock. Each share of the 84,000 series C preferred stock was converted into 86.4225 shares of common stock. |
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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) | | | 2019 | | 2018 | | 2018 | | 2018 | | 2018 | |
Cash and cash equivalents | | | $ | 509,023 | | $ | 450,063 | | $ | 546,780 | | $ | 378,365 | | $ | 365,388 | |
Investments: | | | | | | | | | | | | | | | | | |
Trading securities | | | | 381 | | | 360 | | | 405 | | | 418 | | | 293 | |
Investment securities available-for-sale, at fair value, with amortized cost of $1,248,750 | | | | | | | | | | | | | | | | | |
(December 31, 2018 - $854,511; September 30, 2018 - $872,895; June 30, 2018 - $890,308; | | | | | | | | | | | | | | | | | |
March 31, 2018 - $815,970) | | | | | | | | | | | | | | | | | |
Mortgage-backed securities | | | | 1,225,225 | (a) | | 827,564 | | | 834,538 | | | 855,686 | | | 784,972 | |
Other investment securities | | | | 14,244 | | | 14,293 | | | 14,014 | | | 16,655 | | | 16,669 | |
Total investment securities available-for-sale | | | | 1,239,469 | | | 841,857 | | | 848,552 | | | 872,341 | | | 801,641 | |
Mortgage-backed securities held-to-maturity, at amortized cost | | | | | | | | | | | | | | | | | |
(fair value at December 31, 2018 - $410,353; September 30, 2018 - $425,066; June 30, 2018 - $447,947; | | | | | | | | | | | | | | | | | |
March 31, 2018 - $467,980) | | | | - | (a) | | 424,740 | | | 444,679 | | | 465,427 | | | 485,143 | |
Federal Home Loan Bank (FHLB) stock, at cost | | | | 12,800 | | | 12,644 | | | 12,461 | | | 14,919 | | | 11,499 | |
Other investments | | | | 3 | | | 3 | | | 3 | | | 3 | | | 3 | |
Total investments | | | | 1,252,653 | | | 1,279,604 | | | 1,306,100 | | | 1,353,108 | | | 1,298,579 | |
Loans, net | | | | 4,401,401 | | | 4,431,594 | | | 4,352,980 | | | 4,315,866 | | | 4,133,429 | |
Other assets: | | | | | | | | | | | | | | | | | |
Derivative assets | | | | 110 | | | 347 | | | 1,265 | | | 1,100 | | | 898 | |
Prepaid expenses | | | | 7,830 | | | 10,283 | | | 13,461 | | | 11,127 | | | 7,625 | |
Deferred tax asset, net | | | | 112,744 | | | 113,763 | | | 122,934 | | | 125,141 | | | 128,270 | |
Foreclosed real estate and repossessed properties | | | | 34,439 | | | 36,754 | | | 42,014 | | | 46,035 | | | 45,396 | |
Premises and equipment, net | | | | 69,017 | | | 68,892 | | | 67,762 | | | 66,174 | | | 67,163 | |
Goodwill | | | | 86,069 | | | 86,069 | | | 86,069 | | | 86,069 | | | 86,069 | |
Right of use assets | | | | 20,860 | (b) | | - | | | - | | | - | | | - | |
Accounts receivable and other assets | | | | 109,045 | | | 105,983 | | | 117,309 | | | 118,577 | | | 114,304 | |
Total assets | | | $ | 6,603,191 | | $ | 6,583,352 | | $ | 6,656,674 | | $ | 6,501,562 | | $ | 6,247,121 | |
| | | | | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | | | | | |
Demand deposits | | | $ | 2,218,186 | | $ | 2,191,802 | | $ | 2,304,067 | | $ | 2,176,935 | | $ | 2,117,857 | |
Savings accounts | | | | 1,231,170 | | | 1,187,945 | | | 1,216,190 | | | 1,219,159 | | | 1,228,646 | |
Time deposits | | | | 996,519 | | | 1,003,271 | | | 1,037,858 | | | 1,022,682 | | | 1,012,329 | |
Brokered deposits | | | | 451,226 | | | 525,097 | | | 530,878 | | | 461,425 | | | 474,596 | |
Total deposits | | | | 4,897,101 | | | 4,908,115 | | | 5,088,993 | | | 4,880,201 | | | 4,833,428 | |
Borrowings: | | | | | | | | | | | | | | | | | |
Securities sold under agreements to repurchase | | | | 431,566 | | | 455,508 | | | 378,237 | | | 387,770 | | | 273,926 | |
Advances from FHLB and other borrowings | | | | 81,397 | | | 78,834 | | | 73,723 | | | 128,413 | | | 44,328 | |
Subordinated capital notes | | | | 36,083 | | | 36,083 | | | 36,083 | | | 36,083 | | | 36,083 | |
Total borrowings | | | | 549,046 | | | 570,425 | | | 488,043 | | | 552,266 | | | 354,337 | |
Other liabilities: | | | | | | | | | | | | | | | | | |
Derivative liabilities | | | | 439 | | | 333 | | | 622 | | | 679 | | | 752 | |
Acceptances outstanding | | | | 25,791 | | | 16,937 | | | 28,682 | | | 30,578 | | | 25,869 | |
Lease liability | | | | 22,618 | (b) | | - | | | - | | | - | | | - | |
Accrued expenses and other liabilities | | | | 87,004 | | | 87,665 | | | 80,448 | | | 80,019 | | | 85,886 | |
Total liabilities | | | | 5,581,999 | | | 5,583,475 | | | 5,686,788 | | | 5,543,743 | | | 5,300,272 | |
Stockholders' equity: | | | | | | | | | | | | | | | | | |
Preferred stock | | | | 92,000 | | | 92,000 | (c) | | 176,000 | | | 176,000 | | | 176,000 | |
Common stock | | | | 59,885 | | | 59,885 | (c) | | 52,626 | | | 52,626 | | | 52,626 | |
Additional paid-in capital | | | | 619,828 | | | 619,381 | (c) | | 542,078 | | | 541,734 | | | 541,404 | |
Legal surplus | | | | 92,621 | | | 90,167 | | | 87,563 | | | 85,249 | | | 83,138 | |
Retained earnings | | | | 268,101 | (b) | | 253,040 | | | 236,120 | | | 221,441 | | | 210,008 | |
Treasury stock, at cost | | | | (103,196) | | | (103,633) | | | (103,706) | | | (103,969) | | | (104,142) | |
Accumulated other comprehensive (loss) income, net | | | | (8,047) | | | (10,963) | | | (20,795) | | | (15,262) | | | (12,185) | |
Total stockholders' equity | | | | 1,021,192 | | | 999,877 | | | 969,886 | | | 957,819 | | | 946,849 | |
Total liabilities and stockholders' equity | | | $ | 6,603,191 | | $ | 6,583,352 | | $ | 6,656,674 | | $ | 6,501,562 | | $ | 6,247,121 | |
| | | | | | | | | | | | | | | | | |
(a) On January 1, 2019, the Company adopted the Accounting Standard Update ("ASU") No. 2017-12 and reclassified all of its mortgage backed securities from the held-to-maturity portfolio into the available-for-sale portfolio. | |
(b) On January 1, 2019, the Company adopted the ASU No. 2016-02, under the effective date method, which requires lessees to recognize a right-of-use asset and related lease liability for lease classified as operating leases, prospectively. | |
(c) During Q4 2018, the Company converted of all of its outstanding 8.750% non-cumulative convertible perpetual preferred stock, series C into OFG Bancorp common stock. Each share of the 84,000 series C preferred stock was converted into 86.4225 shares of common stock. | |
4 | |
| | | | | | | | | | | | | | | | | |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 4: Information on Loan Portfolio and Production | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | March 31, | | December 31, | | September 30, | | June 30, | | March 31, |
(Dollars in thousands) (unaudited) | | | 2019 | | 2018 | | 2018 | | 2018 | | 2018 |
Non-acquired loans held for investment: | | | | | | | | | | | | | | | | |
Mortgage | | | $ | 651,423 | | $ | 668,809 | | $ | 667,224 | | $ | 678,259 | | $ | 682,564 |
Commercial | | | | 1,569,551 | | | 1,597,588 | | | 1,540,027 | | | 1,507,368 | | | 1,346,404 |
Consumer | | | | 350,543 | | | 348,980 | | | 345,399 | | | 339,341 | | | 334,865 |
Auto | | | | 1,167,482 | | | 1,129,695 | | | 1,084,912 | | | 1,014,664 | | | 957,197 |
| | | | 3,738,999 | | | 3,745,072 | | | 3,637,562 | | | 3,539,632 | | | 3,321,030 |
Less: Allowance for loan and lease losses | | | | (94,035) | | | (95,188) | | | (95,236) | | | (94,218) | | | (96,832) |
| | | | 3,644,964 | | | 3,649,884 | | | 3,542,326 | | | 3,445,414 | | | 3,224,198 |
Deferred loan costs, net | | | | 8,254 | | | 7,740 | | | 7,556 | | | 7,028 | | | 7,125 |
Total non-acquired loans held for investment, net | | | | 3,653,218 | | | 3,657,624 | | | 3,549,882 | | | 3,452,442 | | | 3,231,323 |
| | | | | | | | | | | | | | | | |
Acquired loans: | (1) | | | | | | | | | | | | | | | |
BBVAPR | | | | | | | | | | | | | | | | |
Accounted for under ASC 310-20 | | | | | | | | | | | | | | | | |
Commercial | | | | 2,405 | | | 2,546 | | | 2,778 | | | 2,909 | | | 4,222 |
Consumer | | | | 22,768 | | | 23,988 | | | 24,914 | | | 25,736 | | | 27,235 |
Auto | | | | 2,336 | | | 4,435 | | | 7,494 | | | 11,283 | | | 16,171 |
| | | | 27,509 | | | 30,969 | | | 35,186 | | | 39,928 | | | 47,628 |
Less: Allowance for loan and lease losses | | | | (1,968) | | | (2,062) | | | (2,350) | | | (2,726) | | | (3,184) |
| | | | 25,541 | | | 28,907 | | | 32,836 | | | 37,202 | | | 44,444 |
| | | | | | | | | | | | | | | | |
Accounted for under ASC 310-30 | | | | | | | | | | | | | | | | |
Mortgage | | | | 484,578 | | | 492,890 | | | 503,861 | | | 516,934 | | | 526,089 |
Commercial | | | | 176,908 | | | 182,319 | | | 190,178 | | | 223,853 | | | 230,988 |
Consumer | | | | - | | | - | | | 95 | | | 495 | | | 932 |
Auto | | | | 9,866 | | | 14,403 | | | 20,363 | | | 26,937 | | | 35,006 |
| | | | 671,352 | | | 689,612 | | | 714,497 | | | 768,219 | | | 793,015 |
Less: Allowance for loan and lease losses | | | | (42,133) | | | (42,010) | | | (43,875) | | | (44,176) | | | (43,166) |
| | | | 629,219 | | | 647,602 | | | 670,622 | | | 724,043 | | | 749,849 |
Total Acquired BBVAPR loans, net | | | | 654,760 | | | 676,509 | | | 703,458 | | | 761,245 | | | 794,293 |
| | | | | | | | | | | | | | | | |
Eurobank | | | | | | | | | | | | | | | | |
Accounted for under ASC 310-30 | | | | | | | | | | | | | | | | |
Mortgage | | | | 62,649 | | | 63,392 | | | 64,785 | | | 65,637 | | | 69,328 |
Commercial | | | | 46,588 | | | 47,826 | | | 49,262 | | | 49,706 | | | 52,418 |
Consumer | | | | 856 | | | 846 | | | 895 | | | 935 | | | 972 |
| | | | 110,093 | | | 112,064 | | | 114,942 | | | 116,278 | | | 122,718 |
Less: Allowance for loan and lease losses | | | | (24,352) | | | (24,971) | | | (24,281) | | | (24,314) | | | (25,410) |
Total Acquired Eurobank loans, net | | | | 85,741 | | | 87,093 | | | 90,661 | | | 91,964 | | | 97,308 |
Total acquired loans, net | | | | 740,501 | | | 763,602 | | | 794,119 | | | 853,209 | | | 891,601 |
Total loans held for investment | | | | 4,393,719 | | | 4,421,226 | | | 4,344,001 | | | 4,305,651 | | | 4,122,924 |
Mortgage loans held for sale | | | | 7,682 | | | 10,368 | | | 8,979 | | | 10,215 | | | 10,505 |
Total loans, net | | | $ | 4,401,401 | | $ | 4,431,594 | | $ | 4,352,980 | | $ | 4,315,866 | | $ | 4,133,429 |
| | | | | | | | | | | | | | | | |
Loan Portfolio Summary: | | | | | | | | | | | | | | | | |
Loans held for investment: | | | | | | | | | | | | | | | | |
Mortgage | | | $ | 1,198,650 | | $ | 1,225,091 | | $ | 1,235,870 | | $ | 1,260,830 | | $ | 1,277,981 |
Commercial | | | | 1,795,452 | | | 1,830,279 | | | 1,782,245 | | | 1,783,836 | | | 1,634,032 |
Consumer | | | | 374,167 | | | 373,814 | | | 371,303 | | | 366,507 | | | 364,004 |
Auto | | | | 1,179,684 | | | 1,148,533 | | | 1,112,769 | | | 1,052,884 | | | 1,008,374 |
| | | | 4,547,953 | | | 4,577,717 | | | 4,502,187 | | | 4,464,057 | | | 4,284,391 |
Less: Allowance for loan and lease losses | | | | (162,488) | | | (164,231) | | | (165,742) | | | (165,434) | | | (168,592) |
| | | | 4,385,465 | | | 4,413,486 | | | 4,336,445 | | | 4,298,623 | | | 4,115,799 |
Deferred loan costs, net | | | | 8,254 | | | 7,740 | | | 7,556 | | | 7,028 | | | 7,125 |
Total loans held for investment, net | | | | 4,393,719 | | | 4,421,226 | | | 4,344,001 | | | 4,305,651 | | | 4,122,924 |
Mortgage loans held for sale | | | | 7,682 | | | 10,368 | | | 8,979 | | | 10,215 | | | 10,505 |
Total loans, net | | | $ | 4,401,401 | | $ | 4,431,594 | | $ | 4,352,980 | | $ | 4,315,866 | | $ | 4,133,429 |
| | | | | | | | | | | | | | | | |
| | | 2019 | | 2018 | | 2018 | | 2018 | | 2018 |
(Dollars in thousands) (unaudited) | | | Q1 | | Q4 | | Q3 | | Q2 | | Q1 |
Quarterly loan production | (13) | | | | | | | | | | | | | | | |
Mortgage | | | $ | 23,097 | | $ | 33,373 | | $ | 27,869 | | $ | 31,808 | | $ | 26,645 |
Commercial | | | | 60,485 | | | 92,088 | | | 105,346 | | | 127,200 | | | 42,783 |
US Loan Program | | | | 31,706 | | | 31,667 | | | 30,357 | | | 99,666 | | | 74,361 |
Consumer | | | | 40,877 | | | 42,055 | | | 42,995 | | | 42,317 | | | 37,502 |
Auto | | | | 120,199 | | | 123,770 | | | 140,390 | | | 131,103 | | | 128,130 |
Total | | | $ | 276,363 | | $ | 322,953 | | $ | 346,957 | | $ | 432,094 | | $ | 309,421 |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
5 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Table 5: Average Balances, Net Interest Income and Net Interest Margin | |
| | | 2019 Q1 | | 2018 Q4 | | 2018 Q3 | | 2018 Q2 | | 2018 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 | | | $ | 388,578 | | $ | 2,368 | | 2.47 | % | | $ | 434,701 | | $ | 2,572 | | 2.35 | % | | $ | 327,268 | | $ | 1,676 | | 2.03 | % | | $ | 289,227 | | $ | 1,242 | | 1.72 | % | | $ | 323,695 | | $ | 1,207 | | 1.51 | % |
Investment securities | | | | 1,258,899 | | | 8,223 | | 2.65 | % | | | 1,275,752 | | | 8,210 | | 2.55 | % | | | 1,327,180 | | | 8,445 | | 2.52 | % | | | 1,330,138 | | | 8,336 | | 2.51 | % | | | 1,239,794 | | | 7,350 | | 2.40 | % |
Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Non-acquired loans | | | | 3,782,315 | | | 71,298 | | 7.64 | % | | | 3,705,027 | | | 70,747 | | 7.58 | % | | | 3,613,568 | | | 68,386 | | 7.51 | % | | | 3,454,107 | | | 62,713 | | 7.28 | % | | | 3,291,055 | | | 58,305 | | 7.18 | % |
Acquired BBVAPR loans | | | | 655,497 | | | 10,247 | | 6.34 | % | | | 679,504 | | | 10,935 | | 6.38 | % | | | 709,833 | | | 12,144 | | 6.79 | % | | | 765,025 | | | 12,353 | | 6.48 | % | | | 799,232 | | | 12,966 | | 6.58 | % |
Acquired Eurobank loans | | | | 86,159 | | | 2,574 | | 12.12 | % | | | 88,578 | | | 2,642 | | 11.83 | % | | | 91,182 | | | 3,485 | | 15.16 | % | | | 93,894 | | | 3,364 | | 14.37 | % | | | 97,668 | | | 3,341 | | 13.87 | % |
Total loans | | | | 4,523,971 | | | 84,119 | | 7.54 | % | | | 4,473,109 | | | 84,324 | | 7.48 | % | | | 4,414,583 | | | 84,015 | | 7.55 | % | | | 4,313,026 | | | 78,430 | | 7.29 | % | | | 4,187,955 | | | 74,612 | | 7.23 | % |
Total interest-earning assets | | | $ | 6,171,448 | | $ | 94,710 | | 6.22 | % | | $ | 6,183,562 | | $ | 95,106 | | 6.10 | % | | $ | 6,069,031 | | $ | 94,136 | | 6.15 | % | | $ | 5,932,391 | | $ | 88,008 | | 5.95 | % | | $ | 5,751,444 | | $ | 83,169 | | 5.86 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NOW accounts | | | $ | 1,119,612 | | $ | 1,454 | | 0.53 | % | | $ | 1,109,795 | | $ | 1,433 | | 0.51 | % | | $ | 1,096,023 | | $ | 1,196 | | 0.43 | % | | $ | 1,052,465 | | $ | 968 | | 0.37 | % | | $ | 1,059,129 | | $ | 899 | | 0.34 | % |
Savings accounts | | | | 1,181,024 | | | 1,615 | | 0.55 | % | | | 1,217,931 | | | 1,741 | | 0.57 | % | | | 1,215,763 | | | 1,571 | | 0.51 | % | | | 1,237,330 | | | 1,555 | | 0.50 | % | | | 1,211,364 | | | 1,497 | | 0.50 | % |
Time deposits | | | | 992,331 | | | 2,944 | | 1.20 | % | | | 1,012,101 | | | 3,007 | | 1.18 | % | | | 1,027,124 | | | 2,895 | | 1.12 | % | | | 1,012,330 | | | 2,778 | | 1.10 | % | | | 1,024,740 | | | 2,800 | | 1.11 | % |
Brokered deposits | | | | 498,116 | | | 2,835 | | 2.31 | % | | | 526,849 | | | 3,003 | | 2.26 | % | | | 519,502 | | | 2,727 | | 2.08 | % | | | 470,775 | | | 2,134 | | 1.82 | % | | | 466,638 | | | 1,887 | | 1.64 | % |
| | | | 3,791,083 | | | 8,848 | | 0.95 | % | | | 3,866,676 | | | 9,184 | | 0.94 | % | | | 3,858,412 | | | 8,389 | | 0.86 | % | | | 3,772,900 | | | 7,435 | | 0.79 | % | | | 3,761,871 | | | 7,083 | | 0.76 | % |
Non-interest bearing deposit accounts | | | | 1,099,624 | | | - | | - | | | | 1,120,599 | | | - | | - | | | | 1,082,410 | | | - | | - | | | | 1,084,035 | | | - | | - | | | | 1,020,730 | | | - | | - | % |
Fair value premium amortization and core deposit intangible amortization | | | | - | | | 201 | | - | | | | - | | | 215 | | - | | | | - | | | 215 | | - | | | | - | | | 215 | | - | | | | - | | | 215 | | - | |
Total deposits | | | | 4,890,707 | | | 9,049 | | 0.75 | % | | | 4,987,275 | | | 9,399 | | 0.75 | % | | | 4,940,822 | | | 8,604 | | 0.69 | % | | | 4,856,935 | | | 7,650 | | 0.63 | % | | | 4,782,601 | | | 7,298 | | 0.62 | % |
Borrowings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Securities sold under agreements to repurchase | | | | 444,843 | | | 2,785 | | 2.54 | % | | | 430,889 | | | 2,633 | | 2.42 | % | | | 390,225 | | | 2,242 | | 2.28 | % | | | 353,313 | | | 1,843 | | 2.09 | % | | | 251,582 | | | 1,076 | | 1.73 | % |
Advances from FHLB and other borrowings | | | | 81,226 | | | 563 | | 2.81 | % | | | 76,948 | | | 536 | | 2.76 | % | | | 76,960 | | | 517 | | 2.67 | % | | | 73,250 | | | 448 | | 2.45 | 2 | | | 64,186 | | | 374 | | 2.36 | % |
Subordinated capital notes | | | | 36,083 | | | 524 | | 5.89 | % | | | 36,083 | | | 503 | | 5.53 | % | | | 36,083 | | | 496 | | 5.45 | % | | | 36,083 | | | 479 | | 5.32 | % | | | 36,083 | | | 427 | | 4.80 | % |
Total borrowings | | | | 562,152 | | | 3,872 | | 2.79 | % | | | 543,920 | | | 3,672 | | 2.68 | % | | | 503,268 | | | 3,255 | | 2.57 | % | | | 462,646 | | | 2,770 | | 2.40 | % | | | 351,851 | | | 1,877 | | 2.16 | % |
Total interest-bearing liabilities | | | $ | 5,452,859 | | $ | 12,921 | | 0.96 | % | | $ | 5,531,195 | | $ | 13,071 | | 0.94 | % | | $ | 5,444,090 | | $ | 11,859 | | 0.86 | % | | $ | 5,319,581 | | $ | 10,420 | | 0.79 | % | | $ | 5,134,452 | | $ | 9,175 | | 0.72 | % |
Interest rate spread | | | | | | $ | 81,789 | | 5.26 | % | | | | | $ | 82,035 | | 5.16 | % | | | | | $ | 82,277 | | 5.29 | % | | | | | $ | 77,588 | | 5.16 | % | | | | | $ | 73,994 | | 5.14 | % |
Net interest margin | | | | | | | | | 5.37 | % | | | | | | | | 5.26 | % | | | | | | | | 5.38 | % | | | | | | | | 5.25 | % | | | | | | | | 5.22 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ASC 310-30 loan cost recoveries: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquired BBVAPR loans | | | | | | $ | 427 | | | | | | | | $ | 653 | | | | | | | | $ | 1,143 | | | | | | | | $ | 291 | | | | | | | | $ | 119 | | | |
Acquired Eurobank loans | | | | | | | 110 | | | | | | | | | 123 | | | | | | | | | 829 | | | | | | | | | 533 | | | | | | | | | 389 | | | |
| | | | | | $ | 537 | | | | | | | | $ | 776 | | | | | | | | $ | 1,972 | | | | | | | | $ | 824 | | | | | | | | $ | 508 | | | |
Adjusted excluding cost recoveries (Non-GAAP): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total interest-earning assets | | | $ | 6,171,448 | | $ | 94,173 | | 6.19 | % | | $ | 6,183,562 | | $ | 94,330 | | 6.05 | % | | $ | 6,069,031 | | $ | 92,164 | | 6.02 | % | | $ | 5,932,391 | | $ | 87,184 | | 5.89 | % | | $ | 5,751,444 | | $ | 82,661 | | 5.83 | % |
Interest rate spread | | | | | | $ | 81,252 | | 5.23 | % | | | | | $ | 81,259 | | 5.11 | % | | | | | $ | 80,305 | | 5.16 | % | | | | | $ | 76,764 | | 5.10 | % | | | | | $ | 73,486 | | 5.11 | % |
Net interest margin | | | | | | | | | 5.34 | % | | | | | | | | 5.21 | % | | | | | | | | 5.25 | % | | | | | | | | 5.19 | % | | | | | | | | 5.18 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
6 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | |
Table 6: Loan Information and Performance Statistics (Excluding Acquired Loans) (1) | | | | |
| | | 2019 | | 2018 | | 2018 | | 2018 | | 2018 | |
(Dollars in thousands) (unaudited) | | | Q1 | | Q4 | | Q3 | | Q2 | | Q1 | |
Net Charge-offs | | | | | | | | | | | | | | | | | |
Mortgage: | | | | | | | | | | | | | | | | | |
Charge-offs | | | $ | 587 | | $ | 1,570 | | $ | 1,429 | | $ | 1,328 | | $ | 968 | |
Recoveries | | | | (287) | | | (128) | | | (139) | | | (466) | | | (314) | |
Total mortgage | | | | 300 | | | 1,442 | | | 1,290 | | | 862 | | | 654 | |
Commercial: | | | | | | | | | | | | | | | | | |
Charge-offs | | | | 1,086 | | | 386 | | | 3,249 | | | 1,998 | | | 1,149 | |
Recoveries | | | | (147) | | | (126) | | | (119) | | | (227) | | | (182) | |
Total commercial | | | | 939 | | | 260 | | | 3,130 | | | 1,771 | | | 967 | |
Consumer: | | | | | | | | | | | | | | | | | |
Charge-offs | | | | 4,121 | | | 4,191 | | | 4,591 | | | 4,588 | | | 4,258 | |
Recoveries | | | | (263) | | | (1,000) | | | (278) | | | (240) | | | (240) | |
Total consumer | | | | 3,858 | | | 3,191 | | | 4,313 | | | 4,348 | | | 4,018 | |
Auto: | | | | | | | | | | | | | | | | | |
Charge-offs | | | | 11,371 | | | 10,843 | | | 9,111 | | | 13,748 | | | 8,982 | |
Recoveries | | | | (3,982) | | | (4,851) | | | (5,442) | | | (5,280) | | | (3,777) | |
Total auto | | | | 7,389 | | | 5,992 | | | 3,669 | | | 8,468 | | | 5,205 | |
Total | | | $ | 12,486 | | $ | 10,885 | | $ | 12,402 | | $ | 15,449 | | $ | 10,844 | |
Net Charge-off Rates | | | | | | | | | | | | | | | | | |
Mortgage | | | | 0.18% | | | 0.86% | | | 0.76% | | | 0.50% | | | 0.38% | |
Commercial | | | | 0.24% | | | 0.07% | | | 0.82% | | | 0.50% | | | 0.29% | |
Consumer | | | | 4.29% | | | 3.56% | | | 4.87% | | | 4.97% | | | 4.62% | |
Auto | | | | 2.54% | | | 2.14% | | | 1.39% | | | 3.39% | | | 2.23% | |
Total | | | | 1.32% | | | 1.18% | | | 1.37% | | | 1.79% | | | 1.32% | |
Average Loans Held For Investment | | | | | | | | | | | | | | | | | |
Mortgage | | | $ | 668,654 | | $ | 671,942 | | $ | 681,317 | | $ | 687,366 | | $ | 692,532 | |
Commercial | | | | 1,591,415 | | | 1,553,218 | | | 1,519,616 | | | 1,417,083 | | | 1,315,993 | |
Consumer | | | | 360,093 | | | 358,744 | | | 354,500 | | | 349,630 | | | 348,029 | |
Auto | | | | 1,162,153 | | | 1,121,123 | | | 1,058,134 | | | 1,000,028 | | | 934,501 | |
Total | | | $ | 3,782,315 | | $ | 3,705,027 | | $ | 3,613,567 | | $ | 3,454,107 | | $ | 3,291,055 | |
| | | | | | | | | | | | | | | | | |
| |
7 | |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | |
Table 6: Loan Information and Performance Statistics (Excluding Acquired Loans) (Continued) (1) | |
| | | 2019 | | 2018 | | 2018 | | 2018 | | 2018 | |
(Dollars in thousands) (unaudited) | | | Q1 | | Q4 | | Q3 | | Q2 | | Q1 | |
Early Delinquency (30 - 89 days past due) | | | | | | | | | | | | | | | | | |
Mortgage | | | $ | 26,775 | | $ | 26,150 | | $ | 25,285 | | $ | 26,132 | | $ | 29,190 | |
Commercial | | | | 12,825 | (a) | | 5,568 | | | 6,871 | | | 9,699 | | | 8,126 | |
Consumer | | | | 7,795 | | | 7,285 | | | 6,661 | | | 7,063 | | | 7,478 | |
Auto | | | | 87,500 | | | 86,039 | | | 81,828 | | | 65,823 | | | 61,558 | |
Total | | | $ | 134,895 | | $ | 125,042 | | $ | 120,645 | | $ | 108,717 | | $ | 106,352 | |
Early Delinquency Rates (30 - 89 days past due) | | | | | | | | | | | | | | | | | |
Mortgage | | | | 4.11% | | | 3.91% | | | 3.79% | | | 3.85% | | | 4.28% | |
Commercial | | | | 0.82% | | | 0.35% | | | 0.45% | | | 0.64% | | | 0.60% | |
Consumer | | | | 2.22% | | | 2.09% | | | 1.93% | | | 2.08% | | | 2.23% | |
Auto | | | | 7.49% | | | 7.62% | | | 7.54% | | | 6.49% | | | 6.43% | |
Total | | | | 3.61% | | | 3.34% | | | 3.32% | | | 3.07% | | | 3.20% | |
Total Delinquency (30 days and over past due) | | | | | | | | | | | | | | | | | |
Mortgage: | | | | | | | | | | | | | | | | | |
Traditional, Non traditional, and Loans under Loss Mitigation | | | $ | 78,560 | | $ | 82,404 | | $ | 83,966 | | $ | 83,707 | | $ | 89,252 | |
GNMA's buy-back option program | | | | 12,942 | | | 19,721 | | | 13,325 | | | 14,521 | | | 12,515 | |
Total mortgage | | | | 91,502 | | | 102,125 | | | 97,291 | | | 98,228 | | | 101,767 | |
Commercial | | | | 35,737 | (a) | | 27,423 | | | 25,191 | | | 26,269 | | | 21,544 | |
Consumer | | | | 9,873 | | | 8,983 | | | 8,530 | | | 9,095 | | | 9,129 | |
Auto | | | | 99,663 | | | 99,533 | | | 93,976 | | | 76,924 | | | 75,152 | |
Total | | | $ | 236,775 | | $ | 238,064 | | $ | 224,988 | | $ | 210,516 | | $ | 207,592 | |
Total Delinquency Rates (30 days and over past due) | | | | | | | | | | | | | | | | | |
Mortgage: | | | | | | | | | | | | | | | | | |
Traditional, Non traditional, and Loans under Loss Mitigation | | | | 12.06% | | | 12.32% | | | 12.58% | | | 12.34% | | | 13.08% | |
GNMA's buy-back option program | | | | 1.99% | | | 2.95% | | | 2.00% | | | 2.14% | | | 1.83% | |
Total mortgage | | | | 14.05% | | | 15.27% | | | 14.58% | | | 14.48% | | | 14.91% | |
Commercial | | | | 2.28% | | | 1.72% | | | 1.64% | | | 1.74% | | | 1.60% | |
Consumer | | | | 2.82% | | | 2.57% | | | 2.47% | | | 2.68% | | | 2.73% | |
Auto | | | | 8.54% | | | 8.81% | | | 8.66% | | | 7.58% | | | 7.85% | |
Total | | | | 6.33% | | | 6.36% | | | 6.19% | | | 5.95% | | | 6.25% | |
Nonperforming Assets | (14) | | | | | | | | | | | | | | | | |
Mortgage | | | $ | 59,665 | | $ | 63,717 | | $ | 67,236 | | $ | 67,002 | | $ | 63,866 | |
Commercial | | | | 50,376 | (a) | | 42,456 | | | 42,807 | | | 47,451 | | | 47,044 | |
Consumer | | | | 3,971 | | | 3,354 | | | 3,116 | | | 2,826 | | | 2,263 | |
Auto | | | | 12,163 | | | 13,494 | | | 12,185 | | | 11,141 | | | 13,594 | |
Total nonperforming loans | | | | 126,175 | | | 123,021 | | | 125,344 | | | 128,420 | | | 126,767 | |
Foreclosed real estate | | | | 10,011 | | | 9,571 | | | 10,295 | | | 12,186 | | | 13,365 | |
Other repossessed assets | | | | 3,574 | | | 2,986 | | | 4,146 | | | 5,483 | | | 5,082 | |
Total nonperforming assets | | | $ | 139,760 | | $ | 135,578 | | $ | 139,785 | | $ | 146,089 | | $ | 145,214 | |
Nonperforming Loan Rates | | | | | | | | | | | | | | | | | |
Mortgage | | | | 9.16% | | | 9.53% | | | 10.08% | | | 9.88% | | | 9.36% | |
Commercial | | | | 3.21% | | | 2.66% | | | 2.78% | | | 3.15% | | | 3.49% | |
Consumer | | | | 1.13% | | | 0.96% | | | 0.90% | | | 0.83% | | | 0.68% | |
Auto | | | | 1.04% | | | 1.19% | | | 1.12% | | | 1.10% | | | 1.42% | |
Total loans | | | | 3.37% | | | 3.28% | | | 3.45% | | | 3.63% | | | 3.82% | |
| | | | | | | | | | | | | | | | | |
(a) During the Q1 2019, a $8.8 million loan that is current in its monthly payments was placed in non-accrual due to credit deterioration. | |
| |
8 | |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | |
Table 7: Allowance for Loan and Lease Losses | | | | | | | | | |
| | | Quarter Ended March 31, 2019 |
(Dollars in thousands) (unaudited) | | | Mortgage | | Commercial | | Consumer | | Auto | | Total |
Non-acquired loans | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 19,783 | | $ | 30,326 | | $ | 15,571 | | $ | 29,508 | | $ | 95,188 |
(Recapture) provision for loan and lease losses, net | | | | (2,794) | | | 2,767 | | | 4,372 | | | 6,988 | | | 11,333 |
Charge-offs | | | | (587) | | | (1,086) | | | (4,121) | | | (11,371) | | | (17,165) |
Recoveries | | | | 287 | | | 147 | | | 263 | | | 3,982 | | | 4,679 |
Balance at end of period | | | $ | 16,689 | | $ | 32,154 | | $ | 16,085 | | $ | 29,107 | | $ | 94,035 |
Allowance coverage ratio | | | | 2.56% | | | 2.05% | | | 4.59% | | | 2.49% | | | 2.51% |
| | | | | | | | | | | | | | | | |
Acquired loans | | | | | | | | | | | | | | | | |
Acquired BBVAPR loans: | | | | | | | | | | | | | | | | |
Acquired loans accounted for under ASC 310-20 | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | | | | $ | 22 | | $ | 1,905 | | $ | 135 | | $ | 2,062 |
(Recapture) provision for loan and lease losses, net | | | | | | | 7 | | | 364 | | | (73) | | | 298 |
Charge-offs | | | | | | | - | | | (440) | | | (85) | | | (525) |
Recoveries | | | | | | | 3 | | | 40 | | | 90 | | | 133 |
Balance at end of period | | | | | | $ | 32 | | $ | 1,869 | | $ | 67 | | $ | 1,968 |
| | | | | | | | | | | | | | | | |
Acquired loans accounted for under ASC 310-30 | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 15,225 | | $ | 20,641 | | $ | - | | $ | 6,144 | | $ | 42,010 |
Provision (recapture) for loan and lease losses, net | | | | 2,733 | | | 850 | | | - | | | (2,314) | | | 1,269 |
Allowance de-recognition | | | | (57) | | | (758) | | | - | | | (331) | | | (1,146) |
Balance at end of period | | | $ | 17,901 | | $ | 20,733 | | $ | - | | $ | 3,499 | | $ | 42,133 |
| | | | | | | | | | | | | | | | |
Acquired Eurobank loans: | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 15,382 | | $ | 9,585 | | $ | 4 | | $ | - | | $ | 24,971 |
Provision (recapture) for loan and lease losses, net | | | | (202) | | | (449) | | | - | | | - | | | (651) |
Allowance de-recognition | | | | (70) | | | 106 | | | (4) | | | - | | | 32 |
Balance at end of period | | | $ | 15,110 | | $ | 9,242 | | $ | - | | $ | - | | $ | 24,352 |
| | | | | | | | | | | | | | | | |
Total acquired loans | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 30,607 | | $ | 30,248 | | $ | 1,909 | | $ | 6,279 | | $ | 69,043 |
Provision (recapture) for loan and lease losses, net | | | | 2,531 | | | 408 | | | 364 | | | (2,387) | | | 916 |
Charge-offs | | | | - | | | - | | | (440) | | | (85) | | | (525) |
Recoveries | | | | - | | | 3 | | | 40 | | | 90 | | | 133 |
Allowance de-recognition | | | | (127) | | | (652) | | | (4) | | | (331) | | | (1,114) |
Balance at end of period | | | $ | 33,011 | | $ | 30,007 | | $ | 1,869 | | $ | 3,566 | | $ | 68,453 |
| | | | | | | | | | | | | | | | |
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, 2019 |
(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 | | | $ | 232,199 | | $ | 33,545 | | $ | 2,963 | | $ | 243 | | $ | 560 | | $ | 269,510 |
Accretion | | | | (6,349) | | | (1,886) | | | (770) | | | (216) | | | (298) | | | (9,519) |
Change in expected cash flows | | | | - | | | 3,258 | | | 7 | | | 3 | | | 298 | | | 3,566 |
Transfers (to) from non-accretable discount | | | | 1,058 | | | (180) | | | 442 | | | 150 | | | (133) | | | 1,337 |
Balance at end of period | | | $ | 226,908 | | $ | 34,737 | | $ | 2,642 | | $ | 180 | | $ | 427 | | $ | 264,894 |
| | | | | | | | | | | | | | | | | | | |
Non-Accretable Discount | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 291,887 | | $ | 2,074 | | $ | 8,272 | | $ | 24,245 | | $ | 18,945 | | $ | 345,423 |
Change in actual and expected cash flows | | | | (729) | | | (166) | | | (7) | | | (39) | | | (243) | | | (1,184) |
Transfers from (to) accretable yield | | | | (1,058) | | | 180 | | | (442) | | | (150) | | | 133 | | | (1,337) |
Balance at end of period | | | $ | 290,100 | | $ | 2,088 | | $ | 7,823 | | $ | 24,056 | | $ | 18,835 | | $ | 342,902 |
| | | | | | | | | | | | | | | | |
| | | | | | | | | 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 | | | $ | 37,734 | | $ | 3,310 | | $ | 655 | | $ | - | | $ | - | | $ | 41,699 |
Accretion | | | | (1,351) | | | (1,165) | | | - | | | (12) | | | (46) | | | (2,574) |
Change in expected cash flows | | | | (423) | | | (44) | | | - | | | (31) | | | 87 | | | (411) |
Transfers (to) from non-accretable discount | | | | 408 | | | 159 | | | (1) | | | 43 | | | (41) | | | 568 |
Balance at end of period | | | $ | 36,368 | | $ | 2,260 | | $ | 654 | | $ | - | | $ | - | | $ | 39,282 |
| | | | | | | | | | | | | | | | | | | |
Non-Accretable Discount | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | | $ | 1,276 | | $ | - | | $ | 1,550 | | $ | - | | $ | 133 | | $ | 2,959 |
Change in actual and expected cash flows | | | | 7 | | | 159 | | | - | | | 43 | | | (58) | | | 151 |
Transfers from (to) accretable yield | | | | (408) | | | (159) | | | 1 | | | (43) | | | 41 | | | (568) |
Balance at end of period | | | $ | 875 | | $ | - | | $ | 1,551 | | $ | - | | $ | 116 | | $ | 2,542 |
| | | | | | | | | | | | | | | | | | | |
10 |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | |
Table 9: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital | |
| |
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 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. |
| | | | | | | | | | | | | | | | | |
| | | 2019 | | 2018 | | 2018 | | 2018 | | 2018 | |
(Dollars in thousands) (unaudited) | | | Q1 | | Q4 | | Q3 | | Q2 | | Q1 | |
Stockholders' Equity to Non-GAAP Tangible Common Equity | | | | | | | | | | | | | | | | | |
Total stockholders' equity | | | $ | 1,021,192 | | $ | 999,877 | | $ | 969,886 | | $ | 957,819 | | $ | 946,849 | |
Less: Intangible assets | | | | (89,145) | | | (89,437) | | | (89,767) | | | (90,097) | | | (90,426) | |
Noncumulative perpetual preferred stock | | | | (92,000) | | | (92,000) | | | (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 | | | $ | 850,177 | | $ | 828,570 | | $ | 714,249 | | $ | 701,852 | | $ | 690,553 | |
| | | | | | | | | | | | | | | | | |
Common stock outstanding at end of period | | | | 51,328 | | | 51,294 | | | 44,006 | | | 43,983 | | | 43,968 | |
Tangible book value (Non-GAAP) | | | $ | 16.56 | | $ | 16.15 | | $ | 16.23 | | $ | 15.96 | | $ | 15.71 | |
Total Assets to Tangible Assets | | | | | | | | | | | | | | | | | |
Total assets | | | $ | 6,603,191 | | $ | 6,583,352 | | $ | 6,656,674 | | $ | 6,501,562 | | $ | 6,247,121 | |
Less: Intangible assets | | | | (89,145) | | | (89,437) | | | (89,767) | | | (90,097) | | | (90,426) | |
Tangible assets (Non-GAAP) | | | $ | 6,514,046 | | $ | 6,493,915 | | $ | 6,566,907 | | $ | 6,411,465 | | $ | 6,156,695 | |
Non-GAAP TCE Ratio | | | | | | | | | | | | | | | | | |
Tangible common equity | | | $ | 850,177 | | $ | 828,570 | | $ | 714,249 | | $ | 701,852 | | $ | 690,553 | |
Tangible assets | | | | 6,514,046 | | | 6,493,915 | | | 6,566,907 | | | 6,411,465 | | | 6,156,695 | |
TCE ratio | | | | 13.05% | | | 12.76% | | | 10.88% | | | 10.95% | | | 11.22% | |
Average Equity to Non-GAAP Average Tangible Common Equity | | | | | | | | | | | | | | | | | |
Average total stockholders' equity | | | $ | 1,017,546 | | $ | 983,015 | | $ | 973,838 | | $ | 959,777 | | $ | 952,151 | |
Less: Average noncumulative perpetual preferred stock | | | | (92,000) | | | (111,174) | | | (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 | | | $ | 935,676 | | $ | 881,971 | | $ | 807,968 | | $ | 793,907 | | $ | 786,281 | |
Less: Average intangible assets | | | | (89,291) | | | (89,580) | | | (89,933) | | | (90,272) | | | (90,624) | |
Average tangible common equity | | | $ | 846,385 | | $ | 792,391 | | $ | 718,035 | | $ | 703,635 | | $ | 695,657 | |
11 | |
OFG Bancorp (NYSE: OFG) | | | | | | | | | | | | | | | | | |
Table 9: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures (Continued) | |
| |
| | | BASEL III | |
| | | Standardized | |
| | | 2019 | | 2018 | | 2018 | | 2018 | | 2018 | |
(Dollars in thousands) (unaudited) | | | Q1 | | Q4 | | Q3 | | Q2 | | Q1 | |
Regulatory Capital Metrics | | | | | | | | | | | | | | | | | |
Common equity Tier 1 capital | | | $ | 832,923 | | $ | 811,708 | | $ | 690,937 | | $ | 669,922 | | $ | 652,013 | |
Tier 1 capital | | | | 949,793 | | | 928,578 | | | 891,807 | | | 870,792 | | | 852,883 | |
Total risk-based capital | (15) | | | 1,012,112 | | | 990,500 | | | 953,543 | | | 931,606 | | | 910,828 | |
Risk-weighted assets | | | | 4,872,807 | | | 4,837,214 | | | 4,806,348 | | | 4,737,529 | | | 4,489,130 | |
Regulatory Capital Ratios | | | | | | | | | | | | | | | | | |
Common equity Tier 1 capital ratio | (16) | | | 17.09% | | | 16.78% | | | 14.38% | | | 14.14% | | | 14.52% | |
Tier 1 risk-based capital ratio | (17) | | | 19.49% | | | 19.20% | | | 18.55% | | | 18.38% | | | 19.00% | |
Total risk-based capital ratio | (18) | | | 20.77% | | | 20.48% | | | 19.84% | | | 19.67% | | | 20.29% | |
Leverage ratio | (19) | | | 14.64% | | | 14.22% | | | 13.93% | | | 13.92% | | | 14.07% | |
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Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach | | | | | | | | | | | | | | | | | |
Total stockholders' equity | | | $ | 1,021,192 | | $ | 999,877 | | $ | 969,886 | | $ | 957,819 | | $ | 946,849 | |
Less: Noncumulative perpetual preferred stock | | | | (92,000) | | | (92,000) | | | (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 | | | | 7,841 | | | 10,972 | | | 21,187 | | | 15,518 | | | 12,274 | |
Unrealized losses on cash flow hedges, net of income tax | | | | 206 | | | (9) | | | (392) | | | (256) | | | (89) | |
| | | | 947,369 | | | 928,970 | | | 824,811 | | | 807,211 | | | 793,164 | |
Less: Disallowed goodwill | | | | (86,069) | | | (86,069) | | | (86,069) | | | (86,069) | | | (86,069) | |
Disallowed other intangible assets, net | (20) | | | (1,922) | | | (2,105) | | | (2,256) | | | (2,457) | | | (2,657) | |
Disallowed deferred tax assets, net | (20) | | | (26,455) | | | (29,088) | | | (45,549) | | | (48,763) | | | (52,425) | |
Common equity Tier 1 capital | | | | 832,923 | | | 811,708 | | | 690,937 | | | 669,922 | | | 652,013 | |
Plus: Qualifying noncumulative perpetual preferred stock | | | | 92,000 | | | 92,000 | | | 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 | | | | 949,793 | | | 928,578 | | | 891,807 | | | 870,792 | | | 852,883 | |
Plus tier 2 capital: Qualifying allowance for loan and lease losses | | | | 62,319 | | | 61,922 | | | 61,736 | | | 60,814 | | | 57,945 | |
Total risk-based capital | | | $ | 1,012,112 | | $ | 990,500 | | $ | 953,543 | | $ | 931,606 | | $ | 910,828 | |
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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 considers 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. |
(2) | Total banking and financial service revenues. |
(3) | Calculated based on net income available to common shareholders divided by average common shares outstanding for the period. |
(4) | 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. |
(5) | 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 GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information. |
(6) | 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. |
(7) | Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period. |
(8) | Calculated based on annualized income, net of tax, for the period divided by average total assets for the period. |
(9) | Calculated based on annualized income available to common shareholders for the period divided by average tangible common equity for the period. |
(10) | 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. |
(11) | Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period. |
(12) | Non-GAAP ratios. See "Table 9: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures" for information on the calculation of each of these ratios. |
(13) | Production of new loans (excluding renewals). |
(14) | 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. |
(15) | Total risk-based capital equals the sum of Tier 1 capital and Tier 2 capital. |
(16) | Common equity Tier 1 capital ratio is a regulatory capital measure calculated based on Common equity Tier 1 capital divided by risk-weighted assets. |
(17) | Tier 1 risk-based capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets. |
(18) | Total risk-based capital ratio is a regulatory capital measure calculated based on Total risk-based capital divided by risk-weighted assets. |
(19) | Leverage capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by average assets, after certain adjustments. |
(20) | Amounts based on transition provisions for regulatory capital deductions and adjustments of 80% for 2018 and 2017. |
(21) | Pre-provision net revenues is a non-GAAP measure calculated based on net interest income plus total non-interest income, net, less total non-interest expenses for the period. |
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