Borrowings and Related Interest

9 Months Ended

Sep. 30, 2018

NOTE 12 — BORROWINGS AND RELATED INTEREST

Securities Sold under Agreements to Repurchase

At September 30, 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 September 30, 2018 and December 31, 2017, securities sold under agreements to repurchase (classified by counterparty), excluding accrued interest in the amount of $429 thousand and $369 thousand, respectively, were as follows:

	September 30,				December 31,
	2018				2017
			Fair Value of				Fair Value of
	Borrowing		Underlying		Borrowing		Underlying
	Balance		Collateral		Balance		Collateral
	(In thousands)
South Street Securities, LLC		12,000		12,590		-		-
JP Morgan Chase Bank NA		130,000		140,364		82,500		88,974
Nomura Securities International, Inc		53,294		56,199		-		-
JVB Financial Group, LLC		32,525		34,116		-		-
Federal Home Loan Bank		110,000		116,432		110,000		116,509
Citigroup Global Markets Inc.		39,989		42,524		-		-
Total	$	377,808	$	402,225	$	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 $429 thousand, at September 30, 2018:

			Weighted-
	Borrowing		Average		Maturity
Year of Maturity	Balance		Coupon	Settlement Date	Date
	(In thousands)
2018		32,525	2.19%	9/10/2018	10/10/2018
		39,989	2.30%	9/18/2018	10/2/2018
		53,294	2.45%	9/24/2018	10/25/2018
		12,000	2.40%	9/25/2018	10/15/2018

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
		50,000	2.86%	7/6/2018	7/6/2020
	$	377,808	2.31%

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 September 30, 2018 and December 31, 2017. There was no cash collateral at September 30, 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
	September 30, 2018						December 31, 2017
	(Dollars in thousands)
Less than 90 days	$	137,808		2.34%	$	145,429	$	-		-	$	-
Over 90 days		240,000		2.30%		256,796		192,500		1.63%		205,483
Total	$	377,808		2.31%	$	402,225	$	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 September 30, 2018 and December 31, 2017, these advances were secured by mortgage and commercial loans amounting to $905.3 million and $1.3 billion, respectively. Also, at September 30, 2018 and December 31, 2017, Oriental had an additional borrowing capacity with the FHLB-NY of $830.7 million and $920.0 million, respectively. At September 30, 2018 and December 31, 2017, the weighted average remaining maturity of FHLB’s advances was 26.2 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 September 30, 2018.

The following table shows a summary of these advances and their terms, excluding accrued interest in the amount of $153 thousand, at September 30, 2018

			Weighted-
		Borrowing	Average		Maturity
Year of Maturity		Balance	Coupon	Settlement Date	Date
		(In thousands)
2018		33,964	2.32%	9/4/2018	10/1/2018

2020		8,953	2.59%	7/19/2013	7/20/2020

2023		12,152	2.94%	5/9/2018	5/9/2023
		2,087	2.92%	6/8/2018	6/8/2023
		16,222	2.92%	7/13/2018	7/13/2023
	$	73,378	2.61%

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 September 30, 2018 and December 31, 2017, for both periods.