Borrowings and Related Interest

3 Months Ended

Mar. 31, 2018

NOTE 12 — BORROWINGS AND RELATED INTEREST

Securities Sold under Agreements to Repurchase

At March 31, 2018, securities underlying agreements to repurchase were delivered to, and are being held by, the counterparties with whom the repurchase agreements were transacted. The counterparties have agreed to resell to Oriental the same or similar securities at the maturity of these agreements. The purpose of these transactions is to provide financing for Oriental’s securities portfolio.

At March 31, 2018 and December 31, 2017, securities sold under agreements to repurchase (classified by counterparty), excluding accrued interest in the amount of $426 thousand and $369 thousand, respectively, were as follows:

	March 31,				December 31,
	2018				2017
			Fair Value of				Fair Value of
	Borrowing		Underlying		Borrowing		Underlying
	Balance		Collateral		Balance		Collateral
	(In thousands)
JP Morgan Chase Bank NA		152,500		164,749		82,500		88,974
KGS Alpha		11,000		11,730		-		-
Federal Home Loan Bank		110,000		116,589		110,000		116,509
Total	$	273,500	$	293,068	$	192,500	$	205,483

The following table shows a summary of Oriental’s repurchase agreements and their terms, excluding accrued interest in the amount of $426 thousand, at March 31, 2018:

			Weighted-
	Borrowing		Average		Maturity
Year of Maturity	Balance		Coupon	Settlement Date	Date
	(In thousands)
2018		72,500	1.52%	12/30/2015	4/29/2018
		11,000	2.15%	3/28/2018	4/4/2018

2019		50,000	1.72%	3/2/2017	9/3/2019

2020		60,000	1.85%	3/2/2017	3/2/2020
		50,000	2.61%	3/15/2018	3/15/2020
		30,000	2.70%	3/23/2018	3/23/2020
	$	273,500	1.96%

All of the repurchase agreements referred to above with maturity dates up to the date of this report were renewed as short-term repurchase agreements.

The following table presents the repurchase liability associated with the repurchase agreement transactions (excluding accrued interest) by maturity. Also, it includes the carrying value and approximate market value of collateral (excluding accrued interest) at March 31, 2018 and December 31, 2017. There was no cash collateral at March 31, 2018 and December 31, 2017.

					Market Value of Underlying Collateral						Market Value of Underlying Collateral
			Weighted		FNMA and				Weighted		FNMA and
	Repurchase		Average		FHLMC		Repurchase		Average		FHLMC
	Liability		Rate		Certificates		Liability		Rate		Certificates
	March 31, 2018						December 31, 2017
	(Dollars in thousands)
Less than 90 days	$	83,500		1.52%	$	90,170	$	-		-	$	-
Over 90 days		190,000		2.15%		202,898		192,500		1.63%		205,483
Total	$	273,500		1.96%	$	293,068	$	192,500		1.63%	$	205,483

	December 31, 2017
					Market Value of Underlying Collateral

			Weighted		FNMA and
	Repurchase		Average		FHLMC
	Liability		Rate		Certificates
	(Dollars in thousands)
Over 90 days		192,500		1.63%		205,483
Total	$	192,500		1.63%	$	205,483

Advances from the Federal Home Loan Bank of New York

Advances are received from the FHLB-NY under an agreement whereby Oriental is required to maintain a minimum amount of qualifying collateral with a fair value of at least 110% of the outstanding advances. At March 31, 2018 and December 31, 2017, these advances were secured by mortgage and commercial loans amounting to $972.8 million and $1.3 billion, respectively. Also, at March 31, 2018 and December 31, 2017, Oriental had an additional borrowing capacity with the FHLB-NY of $925.2 million and $920.0 million, respectively. At March 31, 2018 and December 31, 2017, the weighted average remaining maturity of FHLB’s advances was 5.8 months and 3.2 months, respectively. The original terms of these advances range between one month and seven years, and the FHLB-NY does not have the right to exercise put options at par on any advances outstanding as of March 31, 2018.

The following table shows a summary of these advances and their terms, excluding accrued interest in the amount of $75 thousand, at March 31, 2018

			Weighted-
		Borrowing	Average		Maturity
Year of Maturity		Balance	Coupon	Settlement Date	Date
		(In thousands)
2018		34,735	1.86%	3/1/2018	4/2/2018

2020		9,124	2.59%	7/19/2013	7/20/2020
	$	43,859	2.01%

All of the advances referred to above with maturity dates up to the date of this report were renewed as one-month short-term advances.

Subordinated Capital Notes

Subordinated capital notes amounted to $36.1 million at March 31, 2018 and December 31, 2017, for both periods.