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Investment Securities | 6 Months Ended
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Jun. 30, 2018
Investments [Abstract] |
Investments Securities | NOTE 4 – INVESTMENT SECURITIES Money Market Investments Oriental considers as cash equivalents all money market instruments that are not pledged and that have maturities of three months or less at the date of acquisition. At both, June 30, 2018 and December 31, 2017, money market instruments included as part of cash and cash equivalents amounted to $7.0 million. Investment Securities The amortized cost, gross unrealized gains and losses, fair value, and weighted average yield of the securities owned by Oriental at June 30, 2018 and December 31, 2017 were as follows:
| June 30, 2018
|  |  | Gross |  | Gross |  |  |  | Weighted
| Amortized |  | Unrealized |  | Unrealized |  | Fair |  | Average
| Cost |  | Gains |  | Losses |  | Value |  | Yield
| (In thousands)
Available-for-sale |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 600,978 |  | $ | 266 |  | $ | 11,571 |  | $ | 589,673 |  | 2.58%
GNMA certificates |  | 198,301 |  |  | 459 |  |  | 3,902 |  |  | 194,858 |  | 3.03%
CMOs issued by US government-sponsored agencies |  | 74,147 |  |  | - |  |  | 2,992 |  |  | 71,155 |  | 1.90%
Total mortgage-backed securities |  | 873,426 |  |  | 725 |  |  | 18,465 |  |  | 855,686 |  | 2.62%
Investment securities |  |  |  |  |  |  |  |  |  |  |  |  |
US Treasury securities |  | 10,610 |  |  | - |  |  | 161 |  |  | 10,449 |  | 1.30%
Obligations of US government-sponsored agencies |  | 2,622 |  |  | - |  |  | 81 |  |  | 2,541 |  | 1.38%
Obligations of Puerto Rico government and public instrumentalities |  | 2,455 |  |  | - |  |  | - |  |  | 2,455 |  | 5.55%
Other debt securities |  | 1,195 |  |  | 15 |  |  | - |  |  | 1,210 |  | 2.95%
Total investment securities |  | 16,882 |  |  | 15 |  |  | 242 |  |  | 16,655 |  | 2.05%
Total securities available for sale | $ | 890,308 |  | $ | 740 |  | $ | 18,707 |  | $ | 872,341 |  | 2.61%
Held-to-maturity |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 465,427 |  | $ | - |  | $ | 17,480 |  | $ | 447,947 |  | 2.07%
| December 31, 2017
|  |  | Gross |  | Gross |  |  |  | Weighted
| Amortized |  | Unrealized |  | Unrealized |  | Fair |  | Average
| Cost |  | Gains |  | Losses |  | Value |  | Yield
| (In thousands)
Available-for-sale |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 383,194 |  | $ | 1,402 |  | $ | 2,881 |  | $ | 381,715 |  | 2.39%
GNMA certificates |  | 166,436 |  |  | 1,486 |  |  | 584 |  |  | 167,338 |  | 2.94%
CMOs issued by US government-sponsored agencies |  | 82,026 |  |  | - |  |  | 1,955 |  |  | 80,071 |  | 1.90%
Total mortgage-backed securities |  | 631,656 |  |  | 2,888 |  |  | 5,420 |  |  | 629,124 |  | 2.47%
Investment securities |  |  |  |  |  |  |  |  |  |  |  |  |
US Treasury securities |  | 10,276 |  |  | - |  |  | 113 |  |  | 10,163 |  | 1.25%
Obligations of US government-sponsored agencies |  | 2,927 |  |  | - |  |  | 48 |  |  | 2,879 |  | 1.38%
Obligations of Puerto Rico government and public instrumentalities |  | 2,455 |  |  | - |  |  | 362 |  |  | 2,093 |  | 5.55%
Other debt securities |  | 1,486 |  |  | 52 |  |  | - |  |  | 1,538 |  | 2.97%
Total investment securities |  | 17,144 |  |  | 52 |  |  | 523 |  |  | 16,673 |  | 2.04%
Total securities available-for-sale | $ | 648,800 |  | $ | 2,940 |  | $ | 5,943 |  | $ | 645,797 |  | 2.46%
Held-to-maturity |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 506,064 |  | $ | - |  | $ | 8,383 |  | $ | 497,681 |  | 2.07%
The amortized cost and fair value of Oriental’s investment securities at June 30, 2018, by contractual maturity, are shown in the next table. Securities not due on a single contractual maturity date, such as collateralized mortgage obligations, are classified in the period of final contractual maturity. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
| June 30, 2018
| Available-for-sale |  | Held-to-maturity
| Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
| (In thousands)
Mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |
Due from 1 to 5 years |  |  |  |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 4,907 |  | $ | 4,833 |  | $ | - |  | $ | -
Total due from 1 to 5 years |  | 4,907 |  |  | 4,833 |  |  | - |  |  | -
Due after 5 to 10 years |  |  |  |  |  |  |  |  |  |  |
CMOs issued by US government-sponsored agencies | $ | 65,480 |  | $ | 62,680 |  | $ | - |  | $ | -
FNMA and FHLMC certificates |  | 227,886 |  |  | 223,185 |  |  | - |  |  | -
Total due after 5 to 10 years |  | 293,366 |  |  | 285,865 |  |  | - |  |  | -
Due after 10 years |  |  |  |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 368,185 |  | $ | 361,655 |  | $ | 465,427 |  | $ | 447,947
GNMA certificates |  | 198,301 |  |  | 194,858 |  |  | - |  |  | -
CMOs issued by US government-sponsored agencies |  | 8,667 |  |  | 8,475 |  |  | - |  |  | -
Total due after 10 years |  | 575,153 |  |  | 564,988 |  |  | 465,427 |  |  | 447,947
Total mortgage-backed securities |  | 873,426 |  |  | 855,686 |  |  | 465,427 |  |  | 447,947
Investment securities |  |  |  |  |  |  |  |  |  |  |
Due less than one year |  |  |  |  |  |  |  |  |  |  |
US Treasury securities | $ | 646 |  | $ | 646 |  | $ | - |  | $ | -
Obligations of Puerto Rico government and public instrumentalities |  | 2,455 |  |  | 2,455 |  |  | - |  |  | -
Total due in less than one year |  | 3,101 |  |  | 3,101 |  |  | - |  |  | -
Due from 1 to 5 years |  |  |  |  |  |  |  |  |  |  |
US Treasury securities | $ | 9,964 |  | $ | 9,803 |  | $ | - |  | $ | -
Obligations of US government and sponsored agencies |  | 2,622 |  |  | 2,541 |  |  | - |  |  | -
Total due from 1 to 5 years |  | 12,586 |  |  | 12,344 |  |  | - |  |  | -
Due from 5 to 10 years |  |  |  |  |  |  |  |  |  |  |
Other debt securities |  | 1,195 |  |  | 1,210 |  |  | - |  |  | -
Total due after 5 to 10 years |  | 1,195 |  |  | 1,210 |  |  | - |  |  | -
Total investment securities |  | 16,882 |  |  | 16,655 |  |  | - |  |  | -
Total | $ | 890,308 |  | $ | 872,341 |  | $ | 465,427 |  | $ | 447,947
During the six-month period ended June 30, 2018, Oriental retained securitized GNMA pools totaling $37.6 million, amortized cost, at a yield of 3.45% from its own originations while, during the six-month period ended June 30, 2017, that amount totaled $49.8 million, amortized cost, at a yield of 3.15%. During the six-month period ended June 30, 2017, Oriental sold $166.0 million of mortgage-backed securities and $39.3 million of US Treasury securities, and recorded a net gai n on sale of securities of $6.9 million.
| Six-Month Period Ended June 30, 2017
|  |  | Book Value |  |  |  |
Description | Sale Price |  | at Sale |  | Gross Gains |  | Gross Losses
| (In thousands)
Sale of securities available-for-sale |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 107,510 |  | $ | 102,311 |  | $ | 5,199 |  | $ | -
GNMA certificates | $ | 65,284 |  | $ | 63,704 |  | $ | 1,580 |  | $ | -
Investment securities |  |  |  |  |  |  |  |  |  |  |
US Treasury securities |  | 39,409 |  |  | 39,297 |  |  | 112 |  |  | -
Total mortgage-backed securities | $ | 212,203 |  | $ | 205,312 |  | $ | 6,891 |  | $ | -
The following tables sho w Oriental’s gross unrealized losses and fair value of investment securities available-for-sale and held-to-maturity, aggregated by investment category and the length of time that individual securities have been in a continuo us unrealized loss position at June 30, 2018 and December 31, 2017:
| June 30, 2018
| 12 months or more
| Amortized |  | Unrealized |  | Fair
| Cost |  | Loss |  | Value
| (In thousands)
Securities available-for-sale |  |  |  |  |  |  |  |
CMOs issued by US Government-sponsored agencies | $ | 66,298 |  | $ | 2,822 |  | $ | 63,476
FNMA and FHLMC certificates |  | 101,571 |  |  | 4,296 |  |  | 97,275
Obligations of US Government and sponsored agencies |  | 2,622 |  |  | 81 |  |  | 2,541
GNMA certificates |  | 20,388 |  |  | 1,055 |  |  | 19,333
US Treasury Securities |  | 9,964 |  |  | 161 |  |  | 9,803
| $ | 200,843 |  | $ | 8,415 |  | $ | 192,428
Securities held to maturity |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 324,963 |  | $ | 13,594 |  | $ | 311,369
| Less than 12 months
| Amortized |  | Unrealized |  | Fair
| Cost |  | Loss |  | Value
| (In thousands)
Securities available-for-sale |  |  |  |  |  |  |  |
CMOs issued by US government-sponsored agencies | $ | 7,849 |  | $ | 170 |  | $ | 7,679
FNMA and FHLMC certificates |  | 413,181 |  |  | 7,275 |  |  | 405,906
GNMA certificates |  | 142,431 |  |  | 2,847 |  |  | 139,584
US Treasury Securities |  | 324 |  |  | - |  |  | 324
| $ | 563,785 |  | $ | 10,292 |  | $ | 553,493
Securities held-to-maturity |  |  |  |  |  |  |  |
FNMA and FHLMC Certificates | $ | 140,464 |  | $ | 3,886 |  | $ | 136,578
| Total
| Amortized |  | Unrealized |  | Fair
| Cost |  | Loss |  | Value
| (In thousands)
Securities available-for-sale |  |  |  |  |  |  |  |
CMOs issued by US government-sponsored agencies | $ | 74,147 |  | $ | 2,992 |  | $ | 71,155
FNMA and FHLMC certificates |  | 514,752 |  |  | 11,571 |  |  | 503,181
Obligations of US government and sponsored agencies |  | 2,622 |  |  | 81 |  |  | 2,541
GNMA certificates |  | 162,819 |  |  | 3,902 |  |  | 158,917
US Treausury Securities |  | 10,288 |  |  | 161 |  |  | 10,127
| $ | 764,628 |  | $ | 18,707 |  | $ | 745,921
Securities held-to-maturity |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 465,427 |  | $ | 17,480 |  | $ | 447,947
| December 31, 2017
| 12 months or more
| Amortized |  | Unrealized |  | Fair
| Cost |  | Loss |  | Value
| (In thousands)
Securities available-for-sale |  |  |  |  |  |  |  |
CMOs issued by US Government-sponsored agencies | $ | 72,562 |  | $ | 1,857 |  | $ | 70,705
FNMA and FHLMC certificates |  | 111,635 |  |  | 2,122 |  |  | 109,513
Obligations of US Government and sponsored agencies |  | 2,927 |  |  | 48 |  |  | 2,879
Obligations of Puerto Rico government and public instrumentalities |  | 2,455 |  |  | 362 |  |  | 2,093
GNMA certificates |  | 20,803 |  |  | 499 |  |  | 20,304
US Treasury Securities |  | 9,952 |  |  | 113 |  |  | 9,839
| $ | 220,334 |  | $ | 5,001 |  | $ | 215,333
Securities available-for-sale |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 352,399 |  |  | 7,264 |  |  | 345,135
| Less than 12 months
| Amortized |  | Unrealized |  | Fair
| Cost |  | Loss |  | Value
| (In thousands)
Securities available-for-sale |  |  |  |  |  |  |  |
CMOs issued by US Government-sponsored agencies |  | 9,464 |  |  | 98 |  |  | 9,366
FNMA and FHLMC certificates |  | 125,107 |  |  | 759 |  |  | 124,348
GNMA certificates |  | 14,001 |  |  | 85 |  |  | 13,916
US Treasury Securities |  | 324 |  |  | - |  |  | 324
| $ | 148,896 |  | $ | 942 |  | $ | 147,954
Securities held to maturity |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 153,665 |  | $ | 1,119 |  | $ | 152,546
| Total
| Amortized |  | Unrealized |  | Fair
| Cost |  | Loss |  | Value
| (In thousands)
Securities available-for-sale |  |  |  |  |  |  |  |
CMOs issued by US Government-sponsored agencies |  | 82,026 |  |  | 1,955 |  |  | 80,071
FNMA and FHLMC certificates |  | 236,742 |  |  | 2,881 |  |  | 233,861
Obligations of Puerto Rico government and public instrumentalities |  | 2,455 |  |  | 362 |  |  | 2,093
Obligations of US government and sponsored agencies |  | 2,927 |  |  | 48 |  |  | 2,879
GNMA certificates |  | 34,804 |  |  | 584 |  |  | 34,220
US Treausury Securities |  | 10,276 |  |  | 113 |  |  | 10,163
| $ | 369,230 |  | $ | 5,943 |  | $ | 363,287
Securities held to maturity |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 506,064 |  | $ | 8,383 |  | $ | 497,681
Oriental performs valuations of the investment securities on a monthly basis. Moreover, Oriental conducts quarterly reviews to identify and evaluate each investment in an unrealized loss position for other-than-temporary impairment. Any portion of a dec line in value associated with credit loss is recognized in the statements of operations with the remaining noncredit-related component recognized in other comprehensive income (loss). A credit loss is determined by assessing whether the amortized cost basi s of the security will be recovered by comparing the present value of cash flows expected to be collected from the security, discounted at the rate equal to the yield used to accrete current and prospective beneficial interest for the security. The shortfa ll of the present value of the cash flows expected to be collected in relation to the amortized cost basis is considered to be the “credit loss.” Other-than-temporary impairment analysis is based on estimates that depend on market conditions and are subjec t to further change over time. In addition, while Oriental believes that the methodology used to value these exposures is reasonable, the methodology is subject to continuing improve ment, including those made as a result of market developments. Consequentl y, it is reasonably possible that changes in estimates or conditions could result in the need to recognize additional other-than-temporary impairment charges in the future. All of the investments ($1.2 billion, amortized cost) with an unrealized loss pos ition at June 30, 2018 consist of securities issued or guaranteed by the U.S. Treasury or U.S. government-sponsored agencies, all of which are highly liquid securities that have a large and efficient secondary market. Their aggregate losses and their variability from period to period are the result of changes in market conditions, and not due to the repayment capacity or creditworthiness of the issuers or guarantors of such securities. The sole exposure to a Puerto Rico government bond ($2.5 million, amortized cost) at June 30, 2018, consists of an obligation issued by the Puerto Rico Highways and Transportation Authority ("PRHTA") secured by a pledge of toll revenues from the Teodoro Moscoso Bridge operated through a public-private partnership. T he PRHTA bond had an aggregate fair value of $2.5 million at June 30, 2018 and matured on July 1, 2018. The full payment was received on July 2, 2018.

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI http://asc.fasb.org/topic&trid=2196928 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=4738149 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2176304 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2209399 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 954 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2289146 + Details
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