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Borrowings and Related Interest

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Borrowings and Related Interest

NOTE 11— BORROWINGS AND RELATED INTEREST

Securities Sold under Agreements to Repurchase

At June 30, 2019, 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.

The following table shows Oriental’s repurchase agreements, excluding accrued interest in the amount of $324 thousand and $785 thousand at June 30, 2019 and December 31, 2018, respectively:

	June 30,			December 31,
	2019			2018
	(In thousands)
Short-term fixed-rate repurchase agreements, interest ranging of 1.72% (December 31, 2018 2.45% to 2.95%)	$	50,000		$	214,723
Long-term fixed-rate repurchase agreements, interest ranging from 1.85% to 2.86% (December 31, 2018; 1.72% to 2.86%)		190,000			240,000
Total assets sold under agreements to repurchase	$	240,000		$	454,723

Repurchase agreements mature as follows:

	June 30,			December 31,
	2019			2018
	(In thousands)
Less than 90 days	$	50,000		$	214,723
Over 90-days		190,000			240,000
Total	$	240,000		$	454,723

As a result of the sale $349.7 million available-for-sale mortgage-backed securities during the quarter ended June 30, 2019, the Company terminated before maturity $191.2 million securities sold under agreements to repurchase, at a cost of $7 thousand, included in the statement of operations of the financial statements. This sale provided opportunity to further reduce wholesale funding outstanding balances.

The following securities were sold under agreements to repurchase:

	June 30, 2019
	Amortized						Approximate			Weighted
	Cost of						Fair Value			Average
	Underlying			Balance of			of Underlying			Interest Rate
Underlying Securities	Securities			Borrowing			Securities			of Security
	(Dollars in thousands)
FNMA and FHLMC Certificates	$	258,784		$	240,000		$	257,439			3.00%
Total	$	258,784		$	240,000		$	257,439			3.00%
	December 31, 2018
	Amortized						Approximate			Weighted
	Cost of						Fair Value			Average
	Underlying			Balance of			of Underlying			Interest Rate
Underlying Securities	Securities			Borrowing			Securities			of Security
	(Dollars in thousands)
FNMA and FHLMC Certificates	$	496,814		$	454,723		$	487,181			3.01%
Total	$	496,814		$	454,723		$	487,181			3.01%

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 June 30, 2019 and December 31, 2018, these advances were secured by mortgage and commercial loans amounting to $864.7 million and $847.3 million, respectively. Also, at June 30, 2019 and December 31, 2018, Oriental had an additional borrowing capacity with the FHLB-NY of $784.8 million and $762.0 million, respectively. At June 30, 2019 and December 31, 2018, the weighted average remaining maturity of FHLB’s advances was 26.0 months and 26.6 months, respectively. The original terms of these advances range between one day and seven years, and the FHLB-NY does not have the right to exercise put options at par on any advances outstanding as of June 30, 2019.

The following table shows a summary of the advances and their terms, excluding accrued interest in the amount of $180 thousand and $176 thousand, at June 30, 2019 and December 31, 2018, respectively:

		June 30,			December 31,
			2019			2018
			(In thousands)
Short-term fixed-rate advances from FHLB, with a weighted average interest rate of 2.59% (December 31, 2018 - 2.61%)		$	32,773		$	33,572
Long-term fixed-rate advances from FHLB, with a weighted average interest rate of 2.90% (December 31, 2018 - 2.89%)			47,132			43,872
		$	79,905		$	77,444

Advances from FHLB mature as follows:

			June 30,
			2019
			(In thousands)
Under 90 days		$	32,773
Over one to three years			8,693
Over three to five years			34,019
Over five years			4,420
		$	79,905

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 June 30, 2019 and December 31, 2018.

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- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

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