OFG BANCORP Holding Company Financial Information

12 Months Ended

Dec. 31, 2015

Condensed Financial Information Of Parent Company Only Disclosure Abstract

CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock

NOTE 27 – OFG BANCORP (HOLDING COMPANY ONLY) FINANCIAL INFORMATION

As a bank holding company subject to the regulations and supervisory guidance of the Federal Reserve Board, the Company generally should inform the Federal Reserve Board and eliminate, defer or significantly reduce its dividends if: (i) its net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends; (ii) its prospective rate of earnings retention is not consistent with its capital needs and overall current and prospective financial condition; or (iii) it will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios. The payment of dividends by the Bank to the Company may also be affected by other regulatory requirements and policies, such as the maintenance of certain regulatory capital levels. During 2015, Oriental Insurance and Oriental Financial Services did not make any payments in dividends to the Company. During 2014, Oriental Insurance and Oriental Financial Services paid $2.70 million and $3.2 million, respectively, in dividends to the Company. During 2013, Oriental Insurance and Oriental Financial Services paid $12.4 million and $3.2 million, respectively, in dividends to the Company.

The following condensed financial information presents the financial position of the holding company only as of December 31, 2015 and 2014, and the results of its operations and its cash flows for the years ended December 31, 2015, 2014 and 2013:

OFG BANCORP

CONDENSED STATEMENTS OF FINANCIAL POSITION INFORMATION

(Holding Company Only)


	December 31,
	2015		2014
	(In thousands)
ASSETS
Cash and cash equivalents	$	20,240	$	16,824
Investment securities available-for-sale, at fair value		6,017		8,244
Investment in bank subsidiary, equity method		890,449		943,664
Investment in nonbank subsidiaries, equity method		19,137		17,071
Due from bank subsidiary, net		119		87
Deferred tax asset, net		3,047		-
Other assets		2,042		2,089
Total assets	$	941,051	$	987,979
LIABILITIES AND STOCKHOLDERS’ EQUITY
Dividend payable		6,098		7,927
Deferred tax liabilities, net		-		75
Due to affiliates		9		9
Accrued expenses and other liabilities		1,784		1,688
Subordinated capital notes		36,083		36,083
Total liabilities		43,974		45,782
Stockholders’ equity		897,077		942,197
Total liabilities and stockholders’ equity	$	941,051	$	987,979

OFG BANCORP

CONDENSED STATEMENTS OF OPERATIONS INFORMATION

(Holding Company Only)

	Year Ended December 31,
	2015		2014			2013
	(In thousands)
Income:
Interest income	$	321	$	404	$	400
Investment trading activities, net and other		4,007		4,308		3,668
Total income		4,328		4,712		4,068
Expenses:
Interest expense		1,222		1,201		1,219
Operating expenses		6,866		6,607		6,003
Total expenses		8,088		7,808		7,222
(Loss) before income taxes		(3,760)		(3,096)		(3,154)
Income tax expense (benefit)		3,088		-		(2)
(Loss) before changes in undistributed earnings of subsidiaries		(672)		(3,096)		(3,156)
Bank subsidiary		(3,804)		84,787		98,133
Nonbank subsidiaries		1,972		3,490		3,469
Net (loss) income	$	(2,504)	$	85,181	$	98,446

OFG BANCORP

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME INFORMATION

(Holding Company Only)


	Year ended December 31,
	2015		2014		2013
	(In thousands)
Net (loss) income	$	(2,504)	$	85,181	$	98,446
Other comprehensive (loss) income before tax:
Unrealized (loss) gain on securities available-for-sale		(170)		209		(519)
Other comprehensive (loss) income from Bank subsidiary		(5,578)		16,361		(52,249)
Other comprehensive (loss) income before taxes		(5,748)		16,570		(52,768)
Income tax effect		34		(50)		79
Other comprehensive income (loss) after taxes		(5,714)		16,520		(52,689)
Comprehensive income (loss)	$	(8,218)	$	101,701	$	45,757


	Year Ended December 31,
	2015		2014		2013
	(In thousands)
Cash flows from operating activities:
Net (loss) income	$	(2,504)	$	85,181	$	98,446
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Equity in undistributed earnings from banking subsidiary		3,804		(84,787)		(98,133)
Equity in undistributed earnings from nonbanking subsidiaries		(1,972)		(3,490)		(3,469)
Amortization of investment securities premiums, net of accretion of discounts		44		21		141
Other impairments on securities		-		62		7
Stock-based compensation		1,637		1,036		1,823
Deferred income tax, net		(3,088)		-		2,272
Net decrease in other assets		148		554		11
Net (decrease) in accrued expenses, other liabilities, and dividend payable		(221)		(696)		(2,051)
Dividends from banking subsidiary		45,000		28,000		-
Dividends from non-banking subsidiary		-		5,900		15,600
Net cash provided by operating activities		42,848		31,781		14,647
Cash flows from investing activities:
Maturities and redemptions of investment securities available-for-sale		2,013		1,318		4,676
Net (increase) decrease in due from bank subsidiary, net		317		(218)		2,461
Capital contribution to banking subsidiary		(1,167)		(892)		(1,385)
Capital contribution to non-banking subsidiary		(94)		(76)		(99)
Additions to premises and equipment		(132)		-		-
Net cash provided by investing activities		937		132		5,653
Cash flows from financing activities:
Proceeds from (payments to) exercise of stock options and lapsed restricted units, net		204		643		(572)
Proceeds from issuance of common stock, net		-		-		(16)
Proceeds from issuance of preferred stock, net		-		-		(25)
Purchase of treasury stock		(8,950)		(16,948)		-
Dividends paid		(31,623)		(28,341)		(24,651)
Net cash used in financing activities		(40,369)		(44,646)		(25,264)
Net change in cash and cash equivalents		3,416		(12,733)		(4,964)
Cash and cash equivalents at beginning of year		16,824		29,557		34,521
Cash and cash equivalents at end of year	$	20,240	$	16,824	$	29,557