Resticted Cash

9 Months Ended

Sep. 30, 2015

Restricted Cash And Investments Abstract

NOTE 2 – RESTRICTED CASH

The following table includes the composition of the Company’s restricted cash:

	September 30,		December 31,
	2015		2014
	(In thousands)
Cash pledged as collateral to other financial institutions to secure:
Derivatives	$	2,980	$	2,980
Obligations under agreement of loans sold with recourse		1,369		5,427
	$	4,349	$	8,407

At September 30, 2015 and December 31, 2014, the Bank’s international banking entities, Oriental International Bank Inc. (“OIB”) and Oriental Overseas, a division of the Bank, each held unencumbered certificates of deposit in the amount of $300 thousand as the legal reserve required for international banking entities under Puerto Rico law. Each certificate of deposit cannot be withdrawn by OIB or Oriental Overseas without prior written approval of the Office of the Commissioner of Financial Institutions (“OCFI”).

As part of its derivative activities, the Company has entered into collateral agreements with certain financial counterparties. At September 30, 2015 and December 31, 2014, the Company had delivered $3.0 million of cash as collateral for such derivatives activities.

As part of the BBVA Acquisition, the Company assumed a contract with FNMA which required collateral to guarantee the repurchase, if necessary, of loans sold with recourse. At September 30, 2015 and December 31, 2014, the Company delivered as collateral cash amounting to $1.4 million and $5.4 million, respectively.

The Bank is required by Puerto Rico law to maintain average weekly reserve balances to cover government demand deposits. The amount of those minimum average reserve balances for the week that covered September 30, 2015 was $148.9 million (December 31, 2014 - $141.5 million). At September 30, 2015 and December 31, 2014, the Bank complied with the requirement. Cash and due from bank as well as other short-term, highly liquid securities are used to cover the required average reserve balances.