Exhibit 99
Oriental Financial Group First Quarter 2012 Results
SAN JUAN, Puerto Rico, April 23, 2012 – Oriental Financial Group Inc. (NYSE: OFG) today announced results for the first quarter ended March 31, 2012.
“Our excellent first quarter performance shows our great progress so far towards achieving our goals for 2012,” said José Rafael Fernández, President, Chief Executive Officer and Vice Chairman of the Board. “The investments we are making in our commercial banking capabilities, active management of our risk exposures, and transforming our financial model have resulted in a growing franchise with a very strong capital position.
“Net interest margin increased to 2.59% sequentially due to higher yields on both loans and investment securities and lower cost of deposits and wholesale borrowings. We had strong year over year growth in banking and wealth management fee revenues, and record commercial loan production and assets under management levels.
“We continued to move away from our reliance on our investment securities portfolio by improving interest income from our loan portfolio. We also continued to effectively manage our non-interest expenses and share buy back program.
“Complementary to our focus in growing our commercial business, we achieved a noticeable improvement in asset quality, resulting in a reduction in non-performing, non-covered loans.”
1Q12 Financial Summary
• | Income available to common shareholders of $9.5 million, or 0.23 per diluted share, compares to $1.9 million, or $0.04 per share, in the year ago quarter and a loss of ($13.1) million, or ($0.31) per share, in the preceding 2011 quarter. |
• | Pre-tax operating income of $11.3 million compares to $12.4 million in the year ago quarter and $6.1 million in the preceding quarter. |
• | Net interest rate margin of 2.59% versus 2.26% in the year ago quarter and 1.76% in the preceding quarter. |
• | Loan production totaled $110.2 million, up 41.3% year over year and 2.7% quarter over quarter. The strategically significant commercial category hit a record $55.4 million in production, a more than three-fold increase from the year ago quarter and 16.7% greater than in the preceding quarter. |
• | Using available cash, Oriental paid off in mid-March 2012 $105 million in maturing FDIC Temporary Liquidity Guarantee Program (TLGP) Notes with a cost of 3.75%. |
• | Non-performing non-covered loans were down 9.2% from the preceding quarter. |
• | Book value per share at March 31, 2012 amounted to $15.27, up 7.4% from a year ago and 0.4% from December 31, 2011. |
• | Cash dividends per common share of $0.06 were up 20.0% from the year ago quarter. |
• | Common shares outstanding at March 31, 2012 were 40.7 million, a reduction of 10.3% from a year ago and 1.3% from December 31, 2011, reflecting the Company’s stock repurchase program. |
1Q12 Income Statement Analysis
• | Interest income from loans of $39.7 million represented an increase of 23.2% year over year and 0.7% quarter over quarter. Year over year growth stems from improved performance of covered loans (the former Eurobank portfolio). Sequentially, results benefited from growth of Oriental’s non-covered commercial, auto leasing and consumer loan portfolio. Interest income from loans, as a percentage of total interest income, equaled 57%, up from 41% in the year ago quarter, underscoring Oriental’s emphasis on increased banking activity. |
• | Interest income from investment securities of $30.3 million declined 34.0% year over year and increased 17.0% quarter over quarter. The year over year reduction reflects lower yields and the strategic decision to reduce the size of the investment securities portfolio. The quarter over quarter improvement benefited from a $7.8 million reduction in premium amortization on mortgage backed securities, as repayments slowed. |
• | Total interest expense of $31.1 million declined 23.8% year over year and 16.9% quarter over quarter, reflecting lower cost of funds and balances of both deposits and wholesale funding. |
• | Total banking and wealth management revenues of $11.7 million rose 14.2% year over year. Wealth management revenues grew 25.8% due to increased brokerage, trust and insurance business. Assets under management were a record $4.4 billion at March 31, 2012, up 9.7% from a year ago and 7.0% from the end of the preceding quarter, due to new assets and improved market valuations. |
• | Total non-core, non-interest income was $1.3 million compared to a loss of ($2.8) million in the year ago quarter and a loss of ($22.8) million in the preceding quarter. First quarter 2012 results primarily reflect: (i) a net gain on the sale of securities of $7.4 million as Oriental took strategic advantage of market opportunities; and (ii) amortization of $4.8 million of the FDIC loss-share indemnification assets mainly due to an improvement in the revised cash flow projections of certain former Eurobank loan pools in 2011. |
• | Due to effective cost controls, non-interest expenses of $29.1 million were down 5.5% from a year ago and 4.3% below the preceding quarter. |
March 31, 2012 Balance Sheet Analysis
• | Borrowings of $3.4 billion declined 2.9% from December 31, 2011, due to the aforementioned pay down of the FDIC notes. In December 2011, as previously reported, $600 million in repurchase agreement (repo) funding with an average cost of 4.23% matured. Half of the repos were paid off and the balance was renewed at an effective rate of 2.36%. As a result of these transactions, cost of borrowings declined to 2.49% in the first quarter of 2012 from 2.82% in the preceding quarter. |
• | Retail deposits of $2.0 billion declined slightly compared to December 31, 2011 as cost of those deposits dropped to 1.54% from 1.66%. Wholesale deposits were $105.7 million below December 31, 2011, with the cost dropping to 1.81% from 2.45%. |
• | Stockholders’ equity of $689.3 million declined 0.9% from December 31, 2011, which includes the effect of stock repurchases. Book value per share, however, increased to $15.27, from $15.22. |
• | Cash and cash equivalents (including securities purchased under agreements to resell) of $624.0 million increased 3.1% from December 31, 2011, reflecting repayments on MBS, partially offset by the pay down of the FDIC notes and of wholesale deposits. |
• | Total investments of $3.6 billion declined 5.8% from December 31, 2011, primarily reflecting the aforementioned sale of securities. |
• | Total non-covered loans of approximately $1.2 billion increased 1.8% from December 31, 2011. Growth of commercial and auto leasing loans more than offset the reduction of residential mortgage loans. Covered loans of $461.8 million declined 7.0% from December 31, 2011 as they continued to pay down in line with projections. |
Other 1Q12 Highlights
• | Credit Quality – Non-Covered Assets: Non-performing assets declined 6.4% from December 31, 2011. Net credit losses of $2.7 million were approximately level with the fourth quarter of 2011. Provision for loan and lease losses of $3.0 million declined 21.1% compared to the year ago and the preceding quarters. The allowance of $37.4 million increased 0.9% from the preceding quarter. Early delinquency loans (30-89 days past due) dropped 7.0% year over year and 5.1% from the preceding quarter. |
• | Credit Quality –Covered Assets (the former Eurobank loans): Provision for loan and lease losses was $7.2 million, reflecting the results of quarterly revisions to the expected cash flows considering recent experiences of certain other pools of loans. The provision is net of the estimated losses claimable to the FDIC. |
• | Stock Repurchases: Under its authorization to repurchase $70 million in shares of its common stock in the open market, Oriental bought approximately 603,000 shares, at an average price of $11.61 per share, during the quarter ended March 31, 2012. Approximately $33 million remains under the present buyback authorization. During 2011, Oriental bought approximately 5.2 million shares at an average price of $11.28 per share. |
• | Capital: Oriental maintains regulatory capital ratios well above the requirements for a well-capitalized institution. At March 31, 2012, the Leverage Capital Ratio was 10.12%, Tier-1 Risk-Based Capital Ratio was 32.34%, and Total Risk-Based Capital Ratio was 33.64%. |
Conference Call
A conference call to discuss Oriental’s results, outlook and related matters will be held Monday, April 23, 2012, at 10:00 AM Eastern and Puerto Rico Time. The call will be accessible live via a webcast on Oriental’s Investor Relations website atwww.orientalfg.com. A webcast replay will be available shortly thereafter. Access the webcast link in advance to download any necessary software.
Full Financial Tables
Full financial tables for the first quarter of 2012 can be found on the Webcasts, Presentations & Other Files page of Oriental’s Investor Relations website atwww.orientalfg.com.
About Oriental Financial Group
Oriental Financial Group Inc. is a diversified financial holding company that operates under U.S. and Puerto Rico banking laws and regulations, principally through its two subsidiaries, Oriental Bank and Trust and Oriental Financial Services. Now in its 48th year in business, Oriental provides 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 30 financial centers. Investor information about Oriental can be found atwww.orientalfg.com.
Non-GAAP Financial Measures
From time to time, Oriental uses certain non-GAAP measures of financial performance to supplement the financial statements presented in accordance with GAAP. Oriental presents non-GAAP measures when its management believes that the additional information is useful and meaningful to investors. Non-GAAP measures do not have any standardized meaning and are therefore unlikely to be comparable to similar measures presented by other companies. The presentation of non-GAAP measures is not intended to be a substitute for, and should not be considered in isolation from, the financial measures reported in accordance with GAAP.
Oriental’s management has reported and discussed the results of operations herein both on a GAAP basis and on a pre-tax operating income basis (defined as net interest income, less provision for loan and lease losses, plus banking and wealth management revenues, less non-interest expenses, and calculated on the accompanying table). Oriental’s management believes that, given the nature of the items excluded from the definition of pre-tax operating income, it is useful to state what the results of operations would have been without them so that investors can see the financial trends from Oriental’s continuing business.
Tangible common equity consists of common equity less goodwill. Management believes that the ratios of tangible common equity to total assets and to risk-weighted assets assist investors in analyzing Oriental’s capital position.
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 forward-looking statements. Factors that might cause such a difference include, but are not limited to (i) the rate of declining 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) the fiscal and monetary policies of the federal government and its agencies; (iv) changes in federal bank regulatory and supervisory policies, including required levels of capital; (v) the relative strength or weakness of the consumer and commercial credit sectors and of the real estate market in Puerto Rico; (vi) the performance of the stock and bond markets; (vii) competition in the financial services industry; (viii) possible legislative, tax or regulatory changes; and (ix) difficulties in combining the operations of any acquired entity. For a discussion of such factors and certain risks and uncertainties to which Oriental is subject, see Oriental’s annual report on Form 10-K for the year ended December 31, 2011, 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, Oriental assumes no obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.
# # #
Contacts:
Puerto Rico:Marilyn Santiago (msantiago@OrientalFG.com), Oriental Financial Group Inc., (787) 993-4648
U.S.:Steven Anreder (steven.anreder@anreder.com) and Gary Fishman (gary.fishman@anreder.com), Anreder & Company, (212) 532-3232
ORIENTAL FINANCIAL GROUP
Financial Summary
(NYSE: OFG)
QUARTER ENDED | ||||||||||||||||
31-Mar-12 | 31-Mar-11 | % | 31-Dec-11 | |||||||||||||
SUMMARY OF OPERATIONS(Dollars in thousands): | ||||||||||||||||
Interest Income: | ||||||||||||||||
Loans | ||||||||||||||||
Loans not covered under shared-loss agreements with the FDIC | $ | 18,123 | $ | 17,965 | 0.9 | % | $ | 17,238 | ||||||||
Loans covered under shared-loss agreements with the FDIC | 21,541 | 14,226 | 51.4 | % | 22,158 | |||||||||||
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Total interest income from loans | 39,664 | 32,191 | 23.2 | % | 39,396 | |||||||||||
Mortgage-backed securities | 28,326 | 43,739 | -35.2 | % | 23,649 | |||||||||||
Investment securities | 1,524 | 1,855 | -17.8 | % | 1,897 | |||||||||||
Short term investments | 405 | 250 | 62.0 | % | 314 | |||||||||||
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Total interest income | 69,919 | 78,035 | -10.4 | % | 65,256 | |||||||||||
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Interest Expense: | ||||||||||||||||
Deposits | 9,153 | 12,226 | -25.1 | % | 10,519 | |||||||||||
Securities sold under agreements to repurchase | 17,570 | 24,159 | -27.3 | % | 22,402 | |||||||||||
Advances from FHLB and other borrowings | 3,097 | 3,049 | 1.6 | % | 3,116 | |||||||||||
FDIC-guaranteed term notes | 909 | 1,021 | -11.0 | % | 1,021 | |||||||||||
Subordinated capital notes | 328 | 302 | 8.6 | % | 316 | |||||||||||
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Total interest expense | 31,057 | 40,757 | -23.8 | % | 37,374 | |||||||||||
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Net interest income | 38,862 | 37,278 | 4.2 | % | 27,882 | |||||||||||
Provision for non-covered loan and lease losses | 3,000 | 3,800 | -21.1 | % | 3,800 | |||||||||||
Provision for covered loan and lease losses, net | 7,157 | 549 | 1203.6 | % | — | |||||||||||
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Total provision for loan and lease losses, net | 10,157 | 4,349 | 133.5 | % | 3,800 | |||||||||||
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Net interest income after provision for loan and lease losses | 28,705 | 32,929 | -12.8 | % | 24,082 | |||||||||||
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Non-Interest Income (Loss): | ||||||||||||||||
Wealth management revenues | 5,889 | 4,682 | 25.8 | % | 5,927 | |||||||||||
Banking service revenues | 3,286 | 3,724 | -11.8 | % | 3,648 | |||||||||||
Mortgage banking activities | 2,502 | 1,823 | 37.2 | % | 2,859 | |||||||||||
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Total banking and wealth management revenues | 11,677 | 10,229 | 14.2 | % | 12,434 | |||||||||||
Total loss on other-than-temporarily impaired securities | — | — | 0.0 | % | (15,018 | ) | ||||||||||
Portion of loss on securities recognized in other comprehensive income | — | — | 0.0 | % | — | |||||||||||
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Other-than-temporary impairments on securities | — | — | 0.0 | % | (15,018 | ) | ||||||||||
Net accretion (amortization) of FDIC shared-loss indemnification asset | (4,827 | ) | 1,211 | -498.6 | % | (3,189 | ) | |||||||||
Net gain (loss) on: | ||||||||||||||||
Sales of securities and derivative activities | 7,351 | (3,989 | ) | 284.3 | % | 52 | ||||||||||
Foreclosed real estate | (398 | ) | (132 | ) | -201.5 | % | (1,383 | ) | ||||||||
Other | (833 | ) | 86 | -1068.6 | % | (3,251 | ) | |||||||||
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Total non-interest income (loss), net | 12,970 | 7,405 | 75.2 | % | (10,355 | ) | ||||||||||
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Non-Interest Expenses: | ||||||||||||||||
Compensation and employee benefits | 10,365 | 11,688 | -11.3 | % | 11,041 | |||||||||||
Professional and service fees | 5,298 | 5,448 | -2.8 | % | 5,236 | |||||||||||
Occupancy and equipment | 4,186 | 4,405 | -5.0 | % | 4,419 | |||||||||||
Insurance | 1,820 | 1,985 | -8.3 | % | 1,709 | |||||||||||
Electronic banking charges | 1,558 | 1,454 | 7.2 | % | 1,724 | |||||||||||
Taxes, other than payroll and income taxes | 1,174 | 1,380 | -14.9 | % | 1,299 | |||||||||||
Loan servicing and clearing expenses | 967 | 1,021 | -5.3 | % | 907 | |||||||||||
Foreclosure, repossession and other real estate expenses | 954 | 723 | 32.0 | % | 633 | |||||||||||
Advertising, business promotion, and strategic initiatives | 848 | 1,192 | -28.9 | % | 1,589 | |||||||||||
Communication | 412 | 397 | 3.8 | % | 411 | |||||||||||
Director and investor relations | 309 | 287 | 7.7 | % | 328 | |||||||||||
Printing, postage, stationery and supplies | 308 | 282 | 9.2 | % | 327 | |||||||||||
Other | 886 | 519 | 70.7 | % | 784 | |||||||||||
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Total non-interest expenses | 29,085 | 30,781 | -5.5 | % | 30,407 | |||||||||||
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Income (loss) before income taxes | 12,590 | 9,553 | 31.8 | % | (16,680 | ) | ||||||||||
Income tax expense (benefit) | 1,937 | 6,472 | -70.1 | % | (4,794 | ) | ||||||||||
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Net income (loss) | 10,653 | 3,081 | 245.8 | % | (11,886 | ) | ||||||||||
Less: Dividends on preferred stock | (1,201 | ) | (1,201 | ) | 0.0 | % | (1,200 | ) | ||||||||
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Income available (loss) to common shareholders | $ | 9,452 | $ | 1,880 | 402.8 | % | $ | (13,086 | ) | |||||||
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Page 1
ORIENTAL FINANCIAL GROUP
Financial Summary
(NYSE: OFG)
QUARTER ENDED | ||||||||||||||||
31-Mar-12 | 31-Mar-11 | % | 31-Dec-11 | |||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||
PRE-TAX OPERATING INCOME | ||||||||||||||||
Net interest income | $ | 38,862 | $ | 37,278 | 4.2 | % | $ | 27,882 | ||||||||
Provision for non-covered loan and lease losses | (3,000 | ) | (3,800 | ) | 21.1 | % | (3,800 | ) | ||||||||
Provision for covered loan and lease losses, net | (7,157 | ) | (549 | ) | -1203.6 | % | — | |||||||||
Core non-interest income: | ||||||||||||||||
Wealth management revenues | 5,889 | 4,682 | 25.8 | % | 5,927 | |||||||||||
Banking service revenues | 3,286 | 3,724 | -11.8 | % | 3,648 | |||||||||||
Mortgage banking activities | 2,502 | 1,823 | 37.2 | % | 2,859 | |||||||||||
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Total core non-interest income | 11,677 | 10,229 | 14.2 | % | 12,434 | |||||||||||
Non-interest expenses | (29,085 | ) | (30,781 | ) | 5.5 | % | (30,407 | ) | ||||||||
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Total Pre-tax operating income | $ | 11,297 | $ | 12,377 | -8.7 | % | $ | 6,109 | ||||||||
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INCOME (LOSS) PER COMMON SHARE | ||||||||||||||||
Basic | $ | 0.23 | $ | 0.04 | 464.5 | % | $ | (0.31 | ) | |||||||
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Diluted | $ | 0.23 | $ | 0.04 | 464.1 | % | $ | (0.31 | ) | |||||||
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COMMON STOCK DATA | ||||||||||||||||
Average common shares outstanding and equivalents | 41,162 | 46,433 | -11.4 | % | 42,668 | |||||||||||
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Cash dividends per share of common stock | $ | 0.06 | $ | 0.05 | 20.0 | % | $ | 0.06 | ||||||||
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Cash dividends declared on common shares | $ | 2,442 | $ | 2,269 | 7.6 | % | $ | 2,476 | ||||||||
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Pay-out ratio | 26.14 | % | 122.85 | % | -78.7 | % | -19.58 | % | ||||||||
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SELECTED FINANCIAL DATA | ||||||||||||||||
PERFORMANCE RATIOS: | ||||||||||||||||
Return on average assets | 0.65 | % | 0.17 | % | 284.7 | % | -0.68 | % | ||||||||
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Return on average common equity | 6.02 | % | 1.14 | % | 430.4 | % | -7.98 | % | ||||||||
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Equity-to-assets ratio | 10.67 | % | 9.94 | % | 7.4 | % | 10.39 | % | ||||||||
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Efficiency ratio | 57.55 | % | 64.79 | % | -11.2 | % | 75.42 | % | ||||||||
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Expense ratio | 1.16 | % | 1.24 | % | -6.9 | % | 1.13 | % | ||||||||
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TAX EQUIVALENT SPREAD | ||||||||||||||||
Interest-earning assets | 4.66 | % | 4.73 | % | -1.6 | % | 4.11 | % | ||||||||
Tax equivalent adjustment | 1.01 | % | 0.90 | % | 12.2 | % | 0.86 | % | ||||||||
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Interest-earning assets - tax equivalent | 5.67 | % | 5.63 | % | 0.6 | % | 4.97 | % | ||||||||
Interest-bearing liabilities | 2.13 | % | 2.51 | % | -15.0 | % | 2.43 | % | ||||||||
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Tax equivalent interest rate spread | 3.53 | % | 3.12 | % | 13.2 | % | 2.54 | % | ||||||||
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Tax equivalent interest rate margin | 3.59 | % | 3.16 | % | 13.6 | % | 2.62 | % | ||||||||
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NORMAL SPREAD | ||||||||||||||||
Investments | 2.80 | % | 3.80 | % | -26.2 | % | 2.23 | % | ||||||||
Loans | ||||||||||||||||
Loans not covered under shared-loss agreements with the FDIC | 6.05 | % | 6.13 | % | -1.3 | % | 5.75 | % | ||||||||
Loans covered under shared-loss agreements with the FDIC | 17.52 | % | 9.30 | % | 88.4 | % | 17.12 | % | ||||||||
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9.39 | % | 7.22 | % | 30.0 | % | 9.18 | % | |||||||||
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Interest-earning assets | 4.66 | % | 4.73 | % | -1.6 | % | 4.11 | % | ||||||||
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Deposits | ||||||||||||||||
Retail deposits | 1.54 | % | 1.99 | % | -22.46 | % | 1.66 | % | ||||||||
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Wholesale deposits | 1.81 | % | 1.61 | % | 12.38 | % | 2.45 | % | ||||||||
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1.58 | % | 1.91 | % | -17.05 | % | 1.79 | % | |||||||||
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Borrowings | ||||||||||||||||
Securities sold under agreements to repurchase | 2.30 | % | 2.79 | % | -17.6 | % | 2.69 | % | ||||||||
Advances from FHLB and other borrowings | 3.76 | % | 3.79 | % | -0.9 | % | 3.83 | % | ||||||||
FDIC-guaranteed term notes | 4.11 | % | 3.86 | % | 6.6 | % | 3.88 | % | ||||||||
Subordinated capital notes | 3.64 | % | 3.35 | % | 8.5 | % | 3.50 | % | ||||||||
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2.49 | % | 2.91 | % | -14.3 | % | 2.82 | % | |||||||||
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Interest-bearing liabilities | 2.13 | % | 2.51 | % | -15.0 | % | 2.43 | % | ||||||||
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Interest rate spread | 2.52 | % | 2.22 | % | 13.6 | % | 1.68 | % | ||||||||
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Interest rate margin | 2.59 | % | 2.26 | % | 14.5 | % | 1.76 | % | ||||||||
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AVERAGE BALANCES | ||||||||||||||||
Investments | $ | 4,316,332 | $ | 4,819,746 | -10.4 | % | $ | 4,628,941 | ||||||||
Loans | 1,690,396 | 1,784,162 | -5.3 | % | 1,717,081 | |||||||||||
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Interest-earning assets | $ | 6,006,728 | $ | 6,603,908 | -9.0 | % | $ | 6,346,022 | ||||||||
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Deposits | $ | 2,310,878 | $ | 2,560,501 | -9.7 | % | $ | 2,354,569 | ||||||||
Borrowings | 3,512,418 | 3,925,935 | -10.5 | % | 3,802,972 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Interest-bearing liabilities | $ | 5,823,296 | $ | 6,486,435 | -10.2 | % | $ | 6,157,540 | ||||||||
|
|
|
|
|
|
|
|
Page 2
ORIENTAL FINANCIAL GROUP
Financial Summary
(NYSE: OFG)
AS OF | ||||||||||||||||
31-Mar-12 | 31-Mar-11 | % | 31-Dec-11 | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
BALANCE SHEET | ||||||||||||||||
Cash and cash equivalents | $ | 453,997 | $ | 317,409 | 43.0 | % | $ | 605,477 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Securities purchased under agreements to resell | 170,000 | — | 100.0 | % | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Investments: | ||||||||||||||||
Trading securities | 364 | 1,444 | -74.8 | % | 180 | |||||||||||
Investment securities available-for-sale, at fair value, with amortized cost of $2,591,603 (March 31, 2011 - $3,562,745, December 31, 2011 - $2,873,682) | ||||||||||||||||
FNMA and FHLMC certificates | 2,402,393 | 3,187,291 | -24.6 | % | 2,676,781 | |||||||||||
Obligations of US Government sponsored agencies | 32,031 | — | 100.0 | % | — | |||||||||||
CMO’s issued by US Government sponsored agencies | 117,873 | 160,509 | -26.6 | % | 130,045 | |||||||||||
GNMA certificates | 25,796 | 117,710 | -78.1 | % | 28,336 | |||||||||||
Structured credit investments | 29,643 | 45,162 | -34.4 | % | 37,288 | |||||||||||
Obligations of Puerto Rico Government and political subdivisions | 58,887 | 67,305 | -12.5 | % | 81,482 | |||||||||||
Other debt securities | 5,793 | 9,953 | -41.8 | % | 5,980 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total investment securities available-for-sale | 2,672,416 | 3,587,930 | -25.5 | % | 2,959,912 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Investment securities held-to-maturity, at amortized cost, with fair value of $969,400 (March 31, 2011 - $855,816, December 31, 2011 - $904,556) | ||||||||||||||||
FNMA and FHLMC certificates | 829,465 | 875,494 | 8.3 | % | 884,026 | |||||||||||
CMO’s issued by US Government sponsored agencies | 119,026 | — | 100.0 | % | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total investment securities held-to-maturity | 948,491 | 875,494 | 8.3 | % | 884,026 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Federal Home Loan Bank (FHLB) stock, at cost | 23,779 | 22,496 | 5.7 | % | 23,779 | |||||||||||
Other investments | 68 | 150 | -54.0 | % | 73 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total investments | 3,645,118 | 4,487,514 | -18.8 | % | 3,867,970 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Loans: | ||||||||||||||||
Loans not covered under shared-loss agreements with the FDIC: | ||||||||||||||||
Mortgage | 803,500 | 861,602 | -6.7 | % | 819,651 | |||||||||||
Commercial | 330,076 | 231,288 | 42.7 | % | 301,573 | |||||||||||
Leasing | 28,363 | 13,763 | 106.1 | % | 25,768 | |||||||||||
Consumer | 41,157 | 38,818 | 6.0 | % | 41,301 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total loans receivable not covered under shared-loss agreements with the FDIC, gross | 1,203,096 | 1,145,471 | 5.0 | % | 1,188,293 | |||||||||||
Less: Deferred loan fees, net | (4,442 | ) | (4,390 | ) | -1.2 | % | (4,545 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total loans receivable not covered under shared-loss agreements with the FDIC | 1,198,654 | 1,141,081 | 5.0 | % | 1,183,748 | |||||||||||
Allowance for loan and lease losses on non-covered loans | (37,361 | ) | (32,727 | ) | -14.2 | % | (37,010 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Loans receivable, net | 1,161,293 | 1,108,354 | 4.8 | % | 1,146,738 | |||||||||||
Mortgage loans held for sale | 33,439 | 34,216 | -2.3 | % | 26,939 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total loans not covered under shared-loss agreements with the FDIC, net | 1,194,732 | 1,142,570 | 4.6 | % | 1,173,677 | |||||||||||
Loans covered under shared-loss agreements with the FDIC: | ||||||||||||||||
Loans secured by 1-4 family residential properties | 140,105 | 161,145 | -13.1 | % | 140,824 | |||||||||||
Construction and development secured by 1-4 family residential properties | 17,626 | 16,516 | 6.7 | % | 16,976 | |||||||||||
Commercial and other construction | 321,632 | 378,940 | -15.1 | % | 325,832 | |||||||||||
Leasing | 25,581 | 69,630 | -63.3 | % | 36,122 | |||||||||||
Consumer | 13,252 | 17,140 | -22.7 | % | 13,778 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Loans covered under shared-loss agreements with the FDIC | 518,196 | 643,371 | -19.5 | % | 533,532 | |||||||||||
Allowance for loan and lease losses on covered loans | (56,437 | ) | (53,480 | ) | -5.5 | % | (37,256 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Loans covered under shared-loss agreements with the FDIC, net | 461,759 | 589,891 | -21.7 | % | 496,276 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total loans, net | 1,656,491 | 1,732,461 | -4.4 | % | 1,669,953 | |||||||||||
FDIC shared-loss indemnification asset | 378,444 | 438,910 | -13.8 | % | 392,367 | |||||||||||
Foreclosed real estate covered under shared-loss agreements with the FDIC | 12,181 | 16,212 | -24.9 | % | 13,867 | |||||||||||
Foreclosed real estate not covered under shared-loss agreements with the FDIC | 16,356 | 12,792 | 27.9 | % | 13,812 | |||||||||||
Other repossessed assets covered under shared-loss agreements with the FDIC | 811 | 2,503 | -67.6 | % | 708 | |||||||||||
Core deposit intangible | 1,150 | 1,292 | -11.0 | % | 1,185 | |||||||||||
Accrued interest receivable | 18,750 | 28,634 | -34.5 | % | 20,182 | |||||||||||
Deferred tax asset, net | 33,123 | 30,786 | 7.6 | % | 32,023 | |||||||||||
Prepaid FDIC Insurance | 10,106 | 15,173 | -33.4 | % | 11,599 | |||||||||||
Premises and equipment, net | 20,722 | 23,353 | -11.3 | % | 21,520 | |||||||||||
Other prepaid expenses | 5,138 | 8,093 | -36.5 | % | 6,498 | |||||||||||
Servicing asset | 10,725 | 9,963 | 7.6 | % | 10,454 | |||||||||||
Tax credits | 1,303 | 3,105 | -58.0 | % | 1,303 | |||||||||||
Debt issuance costs | 760 | 1,991 | -61.8 | % | 1,067 | |||||||||||
Goodwill | 2,701 | 2,701 | 0.0 | % | 2,701 | |||||||||||
Investment in statutory trust | 1,086 | 1,086 | 0.0 | % | 1,086 | |||||||||||
Derivative assets | 12,515 | 26,770 | -53.2 | % | 9,317 | |||||||||||
Accounts receivable and other assets | 9,878 | 15,511 | -36.3 | % | 10,577 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total assets | $ | 6,461,355 | $ | 7,176,259 | -10.0 | % | $ | 6,693,666 | ||||||||
|
|
|
|
|
|
|
|
Page 3
ORIENTAL FINANCIAL GROUP
Financial Summary
(NYSE: OFG)
AS OF | ||||||||||||||||
31-Mar-12 | 31-Mar-11 | % | 31-Dec-11 | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Deposits: | ||||||||||||||||
Non-interest bearing demand deposits | $ | 180,768 | $ | 175,679 | 2.9 | % | $ | 190,001 | ||||||||
Interest-bearing savings and demand deposits | 1,060,101 | 1,012,710 | 4.7 | % | 1,041,529 | |||||||||||
Individual retirement accounts | 368,787 | 358,688 | 2.8 | % | 361,411 | |||||||||||
Retail certificates of deposit | 346,406 | 490,313 | -29.4 | % | 378,146 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Retail Deposits | 1,956,062 | 2,037,390 | -4.0 | % | 1,971,087 | |||||||||||
Institutional deposits | 107,363 | 240,780 | -55.4 | % | 168,301 | |||||||||||
Brokered Deposits | 211,143 | 223,303 | -5.4 | % | 255,879 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total deposits | 2,274,568 | 2,501,473 | -9.1 | % | 2,395,267 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Borrowings: | ||||||||||||||||
Short-term borrowings | 43,564 | 32,332 | 34.7 | % | 39,920 | |||||||||||
Securities sold under agreements to repurchase | 3,056,165 | 3,456,605 | -11.6 | % | 3,056,238 | |||||||||||
Advances from FHLB | 281,713 | 281,687 | 0.0 | % | 281,753 | |||||||||||
FDIC-guaranteed term notes | — | 105,112 | -100.0 | % | 105,834 | |||||||||||
Subordinated capital notes | 36,083 | 36,083 | 0.0 | % | 36,083 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total borrowings | 3,417,525 | 3,911,819 | -12.6 | % | 3,519,828 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total interest-bearing liabilities | 5,692,093 | 6,413,292 | -11.2 | % | 5,915,095 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
FDIC net settlement payable | — | 1,911 | -100.0 | % | 115 | |||||||||||
Derivative liabilities | 49,426 | — | 100.0 | % | 47,425 | |||||||||||
Accrued expenses and other liabilities | 30,547 | 47,928 | -36.3 | % | 35,476 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total liabilities | 5,772,066 | 6,463,131 | -10.7 | % | 5,998,111 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Preferred stock | 68,000 | 68,000 | 0.0 | % | 68,000 | |||||||||||
Common stock | 47,841 | 47,808 | 0.1 | % | 47,809 | |||||||||||
Additional paid-in capital | 499,786 | 498,303 | 0.3 | % | 499,096 | |||||||||||
Legal surplus | 51,245 | 46,717 | 9.7 | % | 50,178 | |||||||||||
Retained earnings | 74,091 | 50,727 | 46.1 | % | 68,149 | |||||||||||
Treasury stock, at cost | (81,772 | ) | (28,746 | ) | -184.5 | % | (74,808 | ) | ||||||||
Accumulated other comprehensive income, net | 30,098 | 30,319 | -0.7 | % | 37,131 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total stockholders’ equity | 689,289 | 713,128 | -3.3 | % | 695,555 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total liabilities and stockholders’ equity | $ | 6,461,355 | $ | 7,176,259 | -10.0 | % | $ | 6,693,666 | ||||||||
|
|
|
|
|
|
|
| |||||||||
SELECTED FINANCIAL DATA AT YEAR-END | ||||||||||||||||
Common shares outstanding at end of period | 40,690 | 45,375 | -10.3 | % | 41,245 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Book value per common share | $ | 15.27 | $ | 14.22 | 7.4 | % | $ | 15.22 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Tangible book value per common share | $ | 15.17 | $ | 14.13 | 7.4 | % | $ | 15.12 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Trust assets managed | $ | 2,372,129 | $ | 2,245,158 | 5.7 | % | $ | 2,216,088 | ||||||||
Broker-dealer assets gathered | 2,058,331 | 1,792,264 | 14.8 | % | 1,926,148 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total assets managed | $ | 4,430,460 | $ | 4,037,422 | 9.7 | % | $ | 4,142,236 | ||||||||
|
|
|
|
|
|
|
|
Page 4
ORIENTAL FINANCIAL GROUP
Financial Summary
(NYSE: OFG)
AS OF | ||||||||||||||||
31-Mar-12 | 31-Mar-11 | % | 31-Dec-11 | |||||||||||||
CAPITAL DATA | ||||||||||||||||
Leverage capital ratio | 10.12 | % | 9.52 | % | 6.3 | % | 9.65 | % | ||||||||
Leverage capital ratio required | 4.00 | % | 4.00 | % | 4.00 | % | ||||||||||
Actual tier 1 capital | $ | 663,897 | $ | 686,202 | -3.3 | % | $ | 661,614 | ||||||||
Tier 1 capital required | $ | 262,522 | $ | 288,462 | -9.0 | % | $ | 274,230 | ||||||||
Excess over regulatory requirement | $ | 401,375 | $ | 397,740 | 0.9 | % | $ | 387,384 | ||||||||
Tier 1 risk-based capital ratio | 32.34 | % | 30.63 | % | 5.6 | % | 31.52 | % | ||||||||
Tier 1 risk-based capital ratio required | 4.00 | % | 4.00 | % | 4.00 | % | ||||||||||
Actual tier 1 risk-based capital | $ | 663,897 | $ | 686,202 | -3.3 | % | $ | 661,614 | ||||||||
Tier 1 risk-based capital required | $ | 82,104 | $ | 89,625 | -8.4 | % | $ | 83,964 | ||||||||
Excess over regulatory requirement | $ | 581,793 | $ | 596,577 | -2.5 | % | $ | 577,650 | ||||||||
Risk-weighted assets | $ | 2,052,603 | $ | 2,240,635 | -8.4 | % | $ | 2,099,109 | ||||||||
Total risk-based capital ratio | 33.64 | % | 31.91 | % | 5.4 | % | 32.80 | % | ||||||||
Total risk-based capital ratio required | 8.00 | % | 8.00 | % | 8.00 | % | ||||||||||
Actual total risk-based capital | $ | 690,403 | $ | 714,936 | -3.4 | % | $ | 688,452 | ||||||||
Total risk-based capital required | $ | 164,208 | $ | 179,251 | -8.4 | % | $ | 167,929 | ||||||||
Excess over regulatory requirement | $ | 526,195 | $ | 535,685 | -1.8 | % | $ | 520,523 | ||||||||
Risk-weighted assets | $ | 2,052,603 | $ | 2,240,635 | -8.4 | % | $ | 2,099,109 | ||||||||
Tangible common equity to total assets | 9.56 | % | 8.92 | % | 7.2 | % | 9.32 | % | ||||||||
Tangible common equity to total risk-weighted assets | 30.08 | % | 28.57 | % | 5.3 | % | 29.71 | % | ||||||||
Total equity to total assets | 10.67 | % | 9.94 | % | 7.3 | % | 10.39 | % | ||||||||
Total equity to risk-weighted assets | 33.58 | % | 31.83 | % | 5.5 | % | 33.14 | % | ||||||||
Tier 1 common equity to risk-weighted assets | 29.03 | % | 27.59 | % | 5.2 | % | 28.28 | % | ||||||||
Tier 1 common equity | $ | 595,897 | $ | 618,202 | -3.6 | % | $ | 593,614 |
Page 5
ORIENTAL FINANCIAL GROUP
Financial Summary
(NYSE: OFG)
QUARTER ENDED | ||||||||||||||||
31-Mar-12 | 31-Mar-11 | % | 31-Dec-11 | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Loan Production and Purchases Summary: | ||||||||||||||||
Mortgage loans production | $ | 45,031 | $ | 48,166 | -6.5 | % | $ | 47,584 | ||||||||
Mortgage loans purchased | — | 4,641 | -100.0 | % | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total mortgage | 45,031 | 52,807 | -14.7 | % | 47,584 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Commercial | 55,401 | 16,643 | 232.9 | % | 47,466 | |||||||||||
Leasing | 4,564 | 4,872 | -6.3 | % | 5,522 | |||||||||||
Consumer | 5,172 | 3,640 | 42.1 | % | 6,698 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total loan production and purchases | $ | 110,168 | $ | 77,962 | 41.3 | % | $ | 107,270 | ||||||||
|
|
|
|
|
|
|
| |||||||||
CREDIT DATA | ||||||||||||||||
Net credit losses, excluding loans covered under shared-loss agreements with the FDIC: | ||||||||||||||||
Mortgage | $ | 922 | $ | 1,775 | -48.1 | % | $ | 1,300 | ||||||||
Commercial | 1,570 | 272 | 477.2 | % | 976 | |||||||||||
Consumer | 131 | 395 | -66.8 | % | 367 | |||||||||||
Leasing | 27 | 61 | -55.7 | % | 16 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total net credit losses | $ | 2,650 | $ | 2,503 | 5.9 | % | $ | 2,659 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net credit losses to average loans outstanding | 0.88 | % | 0.85 | % | 3.5 | % | 0.89 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
AS OF | ||||||||||||||||
31-Mar-12 | 31-Mar-11 | % | 31-Dec-11 | |||||||||||||
Allowance for loan and lease losses on non-covered loans | $ | 37,361 | $ | 32,727 | 14.2 | % | $ | 37,010 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Allowance coverage ratios: | ||||||||||||||||
Allowance for loan and lease losses to total loans (excluding loans covered under shared-loss agreements with the FDIC) | 3.03 | % | 2.78 | % | 8.9 | % | 3.06 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
Allowance for loan and lease losses to non-performing loans | 30.54 | % | 27.02 | % | 13.0 | % | 27.46 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
Non-performing assets summary (excluding assets covered under shared-loss agreements with the FDIC): | ||||||||||||||||
Mortgage | $ | 88,390 | $ | 92,403 | -4.3 | % | $ | 97,340 | ||||||||
Commercial | 33,082 | 27,562 | 20.0 | % | 36,988 | |||||||||||
Consumer | 856 | 777 | 10.2 | % | 334 | |||||||||||
Leasing | 12 | 395 | -97.0 | % | 102 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Non-performing loans | 122,340 | 121,137 | 1.0 | % | 134,764 | |||||||||||
Foreclosed properties | 16,356 | 12,792 | 27.9 | % | 13,812 | |||||||||||
Mortgage loans held for sale in non-accrual | 1,519 | 295 | 414.9 | % | 1,223 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Non-performing assets | $ | 140,215 | $ | 134,224 | 4.5 | % | $ | 149,799 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Non-performing loans to: | ||||||||||||||||
Total loans, excluding covered loans | 10.21 | % | 10.62 | % | -3.9 | % | 11.38 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total assets, excluding covered assets | 2.06 | % | 1.86 | % | 10.8 | % | 2.19 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total capital | 17.75 | % | 16.99 | % | 4.5 | % | 19.38 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
Non-performing assets to total assets, excluding covered assets | 2.36 | % | 2.06 | % | 14.6 | % | 2.44 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
Non-performing assets to total capital | 20.34 | % | 18.82 | % | 8.1 | % | 21.54 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
Loans past due (excluding loans covered under shared-loss agreements with the FDIC): | ||||||||||||||||
Early delinquency (30-89 days past due) | ||||||||||||||||
Mortgage | $ | 35,696 | $ | 39,409 | -9.4 | % | $ | 37,435 | ||||||||
Commercial | 3,652 | 3,299 | 10.7 | % | 4,537 | |||||||||||
Consumer | 1,076 | 1,060 | 1.5 | % | 783 | |||||||||||
Leasing | 484 | 207 | 133.8 | % | 339 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 40,908 | $ | 43,975 | -7.0 | % | $ | 43,094 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total delinquency (30 days and over past due) | ||||||||||||||||
Mortgage | $ | 124,656 | $ | 132,146 | -5.7 | % | $ | 134,775 | ||||||||
Commercial | 31,736 | 25,984 | 22.1 | % | 32,894 | |||||||||||
Consumer | 1,287 | 1,503 | -14.4 | % | 1,117 | |||||||||||
Leasing | 496 | 602 | -17.6 | % | 441 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 158,175 | $ | 160,235 | -1.3 | % | $ | 169,227 | |||||||||
|
|
|
|
|
|
|
|
Page 6