EX-99 2 ofg8k20190331ex99.htm PRESS RELEASE  

 

 

Exhibit 99

 

OFG Bancorp Reports 1Q19 Results

SAN JUAN, Puerto Rico, April 18, 2019 – OFG Bancorp (NYSE: OFG) reported results for the first quarter ended March 31, 2019.

Highlights 1Q19 vs. 1Q18

•     Net revenues increased 7.7% to $99.3 million from $92.2 million. Increased interest income from Originated Loans and Investment Securities and Cash more than offset pay downs of Acquired Loans.

•     Net income available to shareholders increased 62.4% to $21.8 million from $13.5 million. Results reflect increased operating leverage, reduced provision and elimination of dividends on Series C preferred stock following its conversion.

•     Earnings per share diluted of $0.42 compared to $0.30, a 40% increase.

•     Book value per common share increased 3.0% to $18.30. Tangible Book Value per common share expanded 5.4% to $16.56.

•     Loans increased 6.5% to $4.40 billion, while deposits grew 1.3% to $4.90 billion.

•     New loan origination of $276.4 million included a 41.4% increase in commercial loans due to the success of Oriental’s strategic targeting of small business customers.

•     Net Interest Margin of 5.37%, a 15 basis points increase, while both credit quality and the efficiency ratio improved.

•     Return on Average Assets increased 33 basis points to 1.42%, Return on Average Tangible Common Equity expanded 259 basis points to 10.32%, and capital metrics continued at new multi-year highs.

CEO Comment

“After the rebound we saw in 2018, our first quarter of 2019 reflected strong steady growth,” said José Rafael Fernández, President, Chief Executive Officer, and Vice Chairman of the Board.

“This was achieved due to the continued effectiveness of our retail and commercial strategies in meeting the economic shift that has occurred in Puerto Rico, as a more positive outlook among both businesses and consumers has taken hold.

 

 

“Financially, we generated higher net revenues with stable non-interest expenses, resulting in a 40% year over year increase in earnings per share. Our key performance metrics moved in the right direction as return on assets, return on equity, net interest margin and efficiency ratio came in at levels similar to top performing mainland banks of our size in recent periods.

“Strategically, we continued to advance our retail and commercial channel differentiation through superior service, convenience and technology, where we ask customers to Vive la Diferencia (Live the Difference). We are encouraged by the noticeable increase in small business loan production and another quarter of more than 3% year over year customer growth.

“Thanks to our entire OFG team for their commitment and dedication, and to all our retail and commercial customers for their support and loyalty.”

Conference Call

A conference call to discuss OFG’s 1Q19 results, outlook and related matters will be held today at 10:00 AM Eastern Time. Dial (888) 562-3356 or (973) 582-2700. Use conference ID 989-5529. The call can also be accessed live on OFG’s website at www.ofgbancorp.com. A webcast replay will be available shortly thereafter.

Income Statement

Unless otherwise noted, the following compares data for the first quarter 2019 to the first quarter 2018.

•     Interest Income: Increased 13.9% or $11.5 million to $94.7 million. Originated Loans increased $13.0 million due to higher average balances and yield. Investment Securities increased $2.0 million due to higher average balances and higher yields on cash equivalents and investment securities. Acquired Loans declined $3.5 million.

•     Interest Expense: Increased 40.8% or $3.8 million to $12.9 million, reflecting higher average deposit and borrowing balances and rates. The cost of customer deposits increased 6 basis points.

•     Net Interest Margin: Excluding cost recoveries, core NIM grew to 5.34% from 5.18%. The increase reflected higher yield on originated commercial loans and cash balances and a larger proportion of higher yielding commercial and auto loans in the originated portfolio. This was partially offset by a higher cost of borrowings.

•     Net Interest Income: Increased 10.5% or $7.8 million to $81.8 million primarily due to increased earning assets coupled with the 15 basis point increase in NIM.

•     Total Provision for Loan and Lease Losses: Decreased 20.8% or $3.2 million to $12.2 million due to a reduction in provision for originated loans partially offset by a small increase in provision for acquired loans. Provision for originated loans was $3.6 million lower than 1Q18, which included $2.0 million for three commercial loans placed in non-accrual.

•     Total Banking and Wealth Management Revenues: Declined 3.8% or $0.7 million to $17.6 million primarily due to lower MSR valuations in mortgage banking. Banking service revenues and wealth management remained at similar levels.

•     Total Non-Interest Expenses: Remained approximately level at $52.2 million, resulting in a 401 basis point improvement in the Efficiency Ratio to 52.50%. Compared to the previous quarter, total non-interest expenses were marginally higher. This reflected seasonally higher

 

 

compensation expenses primarily due to FICA payments, higher credit expenses due to the semi-annual payment of local property taxes, and lower losses on the sale of repossessed assets.

•     Effective Tax Rate: 33.0% compared to 32.1%.

•     Dividends on Preferred Stock: Declined 53.0% to $1.6 million from $3.5 million due to the 4Q18 conversion of Series C Preferred to common.

Balance Sheet

Unless otherwise noted, the following compares data at March 31, 2019 to March 31, 2018.

•   Total Loans: Increased 6.5% or $268.0 million to $4.40 billion as originated loans increased 13.1% or $421.9 million, while acquired loans declined $151.1 million. Compared to the year ended December 31, 2018, loans remained relatively flat, reflecting seasonal pay down of commercial lines of credit and loan prepayments.

•     Loan Production: 1Q19 new loan production totaled $276.4 million compared to $309.4 million. Auto and consumer lending remained high at $120.2 million and $40.8 million, respectively; commercial lending at $60.5 million had a strong performance due to new or expanded business with small business customers; OFG USA loan participations of $31.7 million were similar to the last two trailing quarters; and residential mortgage lending totaled $23.1 million.

•     Total Investments and Cash and Cash Equivalents: Increased 5.9% or $97.7 million to $1.76 billion, with Cash and Cash Equivalents up 39.3% or $143.6 million and Total Investments down 3.5% or $45.9 million. Compared to December 31, 2018, investments and cash increased 1.9% or $32.0 million. On January 1, 2019, OFG adopted ASU 2017-12, reclassifying all of its MBS from held-to-maturity to available-for-sale.

•     Customer Deposits (excluding brokered): Increased 2.0% or $87.0 million to $4.45 billion. Demand deposits increased 4.7% or $100.3 million and savings accounts remained approximately level, while time deposits declined 1.6% or $15.8 million. Compared to December 31, 2018, customer deposits increased 1.4% or $62.9 million.

•     Total Borrowings and Brokered Deposits: Increased 20.7% or $171.3 million to $1.00 billion. Repurchase agreement funding increased 57.5% or $157.6 million, FHLB advances and other borrowings increased 83.6% or $37.1 million, while brokered deposits declined 4.9% or $23.4 million. Compared to December 31, 2018, borrowings and brokered deposits declined 8.7% or $95.3 million.

•     Total Stockholders’ Equity: Increased 7.8% or $74.3 million to $1.02 billion, reflecting increased retained earnings and legal surplus and reduced accumulated other comprehensive loss. Compared to December 31, 2018, stockholders’ equity increased 2.1% or $21.3 million.

Credit Quality

Unless otherwise noted, the following compares data on the originated loan portfolio at March 31, 2019 to March 31, 2018.

Credit quality remained strong with minor variations in key metrics. Non-performing loan rate at 3.37% fell 45 basis points. Allowance for loan losses declined 2.9% to $94.0 million, and as a percentage of loans, the allowance at 2.51% was down 41 basis points. Early and total delinquency

 

 

rates, at 3.61% and 6.33% were up 41 and 8 basis points, respectively. Net Charge-Offs increased 15.1% to $12.5 million, but as a percentage of loans, the net charge off rate remained at 1.32%.

Capital Position

Capital continued to be significantly above regulatory requirements for a well-capitalized institution. March 31, 2019 ratios improved across the board: Leverage at 14.64% increased 57 bps year over year and 42 bps from the year ended December 31, 2018, Common Equity Tier 1 at 17.09% increased 257 and 31, Tier 1 Risk-based at 19.49% increased 49 and 29, Total Risk-based Capital at 20.77% increased 48 and 29, and Tangible Common Equity at 13.05% increased 183 and 29.

Financial Supplement & Conference Call Presentation

OFG’s Financial Supplement, with full financial tables for the quarter ended March 31, 2019, and its 1Q19 Conference Call Presentation can be found on the Webcasts, Presentations & Other Files page, on OFG’s Investor Relations website at www.ofgbancorp.com. 

Non-GAAP Financial Measures

In addition to our financial information presented in accordance with GAAP, management uses certain “non-GAAP financial measures” within the meaning of the SEC Regulation G, to clarify and enhance understanding of past performance and prospects for the future. See Tables 9-1 and 9-2 in OFG’s above-mentioned Financial Supplement for reconciliation of GAAP to non-GAAP Measures and Calculations.

Forward Looking Statements

The information included in this document contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and involve certain risks and uncertainties that may cause actual results to differ materially from those expressed in the forward-looking statements.

Factors that might cause such a difference include, but are not limited to (i) the rate of growth in the economy and employment levels, as well as general business and economic conditions; (ii) changes in interest rates, as well as the magnitude of such changes; (iii) changes to the financial condition of the government of Puerto Rico; (iv) amendments to the fiscal plan approved by the Financial Oversight and Management Board of Puerto Rico; (v) determinations in the court-supervised debt-restructuring process under Title III of PROMESA for the Puerto Rico government and all of its agencies, including some of its public corporations; (vi) the amount of government, private and philanthropic financial assistance for the reconstruction of Puerto Rico’s critical infrastructure, which suffered catastrophic damages caused by hurricane Maria; (vii) the pace and magnitude of Puerto Rico’s economic recovery; (viii) the potential impact of damages from future hurricanes and natural disasters in Puerto Rico; (ix) the fiscal and monetary policies of the federal government and its agencies; (x) changes in federal bank regulatory and supervisory policies, including required levels of capital; (xi) the relative strength or weakness of the commercial and consumer credit sectors and the real estate market in Puerto Rico; (xii) the performance of the stock and bond markets; (xiii) competition in the financial services industry; and (xiv) possible legislative, tax or regulatory changes.

For a discussion of such factors and certain risks and uncertainties to which OFG is subject, see OFG’s annual report on Form 10-K for the year ended December 31, 2018, as well as its other filings with the U.S. Securities and Exchange Commission. Other than to the extent required by applicable law, including the requirements of applicable securities laws, OFG assumes no obligation to update

 

 

any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.

About OFG Bancorp

Now in its 55th year in business, OFG Bancorp is a diversified financial holding company that operates under U.S. and Puerto Rico banking laws and regulations. Its three principal subsidiaries, Oriental Bank, Oriental Financial Services and Oriental Insurance, provide a wide range of retail and commercial banking, lending and wealth management products, services and technology, primarily in Puerto Rico. Visit us at Error! Hyperlink reference not valid.www.ofgbancorp.com.

# # #

Contacts

Puerto Rico: Idalis Montalvo (idalis.montalvo@orientalbank.com) at (787) 777-2847

US: Steven Anreder (sanreder@ofgbancorp.com) and Gary Fishman (gfishman@ofgbancorp.com) at (212) 532-3232

  

 

 

 

 

 

 

 

 

  

OFG Bancorp

  

Financial Supplement

  

 

 

 

 

 

 

  

 

 

 

 

 

 

  

The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation, and investors should refer to our March 31, 2019 Quarterly Report on Form 10-Q once it is filed with the Securities and Exchange Commission.

  
 

 

 

 

 

 

 

  

Table of Contents

  

 

 

 

 

Pages

  

 

 

 

 

 

 

  

 

OFG Bancorp (Consolidated Financial Information)

 

 

  

 

Table  1:

 

Financial and Statistical Summary - Consolidated

 

2

  

 

Table  2:

 

Consolidated Statements of Operations

 

3

  

 

Table  3:

 

Consolidated Statements of Financial Condition

 

4

  

 

Table  4:

 

Information on Loan Portfolio and Production

 

5

  

 

Table  5:

 

Average Balances, Net Interest Income and Net Interest Margin

 

6

  

 

Table  6:

 

Loan Information and Performance Statistics (Excluding Acquired Loans)

 

7-8

  

 

Table  7:

 

Allowance for Loan and Lease Losses

 

9

  

 

Table  8:

 

Accretable Yield on Loans Accounted for Under ASC 310-30 (Loans Acquired

 

 

  

 

 

 

   with Deteriorated Credit Quality, Including those by Analogy)

 

10

  

 

Table  9:

 

Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory

 

 

  

 

 

 

   Capital

 

11-12

  

 

Table  10:

 

Notes to Financial Summary, Selected Metrics, Loans, and Consolidated

 

 

  

 

 

 

  Financial Statements (Tables 1-9)

 

13

  

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 1: Financial and Statistical Summary - Consolidated

 

 

 

2019

 

2018

 

2018

 

2018

 

2018

 

(Dollars in thousands, except per share data) (unaudited)

 

 

Q1

 

Q4

 

Q3

 

Q2

 

Q1

 

Earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

$

81,789

 

$

82,035

 

$

82,277

 

$

77,588

 

$

73,994

 

Non-interest income, net (core)

(2)

 

 

17,553

 

 

19,260

 

 

18,446

 

 

18,394

 

 

18,239

 

Non-interest expense

 

 

 

52,152

 

 

51,719

 

 

50,941

 

 

52,300

 

 

52,121

 

Pre-provision net revenues

(21)

 

 

47,293

 

 

54,574

 

 

49,956

 

 

43,991

 

 

40,387

 

Provision for loan and lease losses

 

 

 

12,249

 

 

11,300

(c)

 

14,601

 

 

14,747

 

 

15,460

 

Net income before income taxes

 

 

 

35,044

 

 

43,274

 

 

35,355

 

 

29,244

 

 

24,927

 

Income tax expense

 

 

 

11,574

 

 

18,530

 

 

12,255

 

 

9,595

 

 

8,010

 

Net income

 

 

$

23,470

 

$

24,744

 

$

23,100

 

$

19,649

 

$

16,917

 

Common Share Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - basic

(3)

 

$

0.43

 

$

0.47

 

$

0.45

 

$

0.37

 

$

0.31

 

Earnings per common share - diluted

(4)

 

$

0.42

 

$

0.45

 

$

0.42

 

$

0.35

 

$

0.30

 

Average common shares outstanding

 

 

 

51,305

 

 

49,628

 (a)  

 

43,996

 

 

43,975

 

 

43,955

 

Average common shares outstanding and equivalents

 

 

 

51,626

 

 

51,602

 

 

51,464

 

 

51,226

 

 

51,121

 

Cash dividends per common share

 

 

$

0.07

 

$

0.07

 (b)  

$

0.06

 

$

0.06

 

$

0.06

 

Book value per common share (period end)

 

 

$

18.30

 

$

17.90

(a)

$

18.27

 

$

18.01

 

$

17.76

 

Tangible book value per common share (period end)

(5)

 

$

16.56

 

$

16.15

 (a)  

$

16.23

 

$

15.96

 

$

15.71

 

Balance Sheet (Average Balances)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

(6)

 

$

4,523,971

 

$

4,473,109

 

$

4,414,583

 

$

4,313,026

 

$

4,187,955

 

Interest-earning assets

 

 

 

6,171,448

 

 

6,183,562

 

 

6,069,031

 

 

5,932,391

 

 

5,751,444

 

Total assets

 

 

 

6,605,328

 

 

6,619,026

 

 

6,514,532

 

 

6,374,240

 

 

6,189,752

 

Total deposits

 

 

 

4,890,707

 

 

4,987,275

 

 

4,940,822

 

 

4,856,935

 

 

4,782,601

 

Interest-bearing deposits

 

 

 

3,791,083

 

 

3,866,676

 

 

3,858,412

 

 

3,772,900

 

 

3,761,871

 

Borrowings

 

 

 

562,152

 

 

543,920

 

 

503,268

 

 

462,646

 

 

351,851

 

Stockholders' equity

 

 

 

1,017,546

 

 

983,015

 

 

973,838

 

 

959,777

 

 

952,151

 

Common stockholders' equity

 

 

 

935,676

 

 

881,971

 

 

807,968

 

 

793,907

 

 

786,281

 

Performance Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

(7)

 

 

5.37%

 

 

5.26%

 

 

5.38%

 

 

5.25%

 

 

5.22%

 

Return on average assets

(8)

 

 

1.42%

 

 

1.50%

 

 

1.42%

 

 

1.23%

 

 

1.09%

 

Return on average tangible common stockholders' equity

(9)

 

 

10.32%

 

 

11.67%

(a)

 

10.94%

 

 

9.20%

 

 

7.73%

 

Efficiency ratio

(10)

 

 

52.50%

 

 

51.06%

 

 

50.58%

 

 

54.49%

 

 

56.51%

 

Full-time equivalent employees, period end

 

 

 

1,394

 

 

1,392

 

 

1,365

 

 

1,354

 

 

1,367

 

Credit Quality Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Excluding acquired loans:

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Allowance for loan and lease losses

 

 

$

94,035

 

$

95,188

 

$

95,236

 

$

94,218

 

 $  

96,832

 

    Allowance as a % of loans held for investment

 

 

 

2.51%

 

 

2.54%

 

 

2.62%

 

 

2.66%

 

 

2.92%

 

    Net charge-offs

 

 

$

12,486

 

$

10,885

 (c)  

$

12,402

 

$

15,449

 

$

10,844

 

    Net charge-off rate

(11)

 

 

1.32%

 

 

1.18%

 

 

1.37%

 

 

1.79%

 

 

1.32%

 

    Early delinquency rate (30 - 89 days past due)

 

 

 

3.61%

 

 

3.34%

 

 

3.32%

 

 

3.07%

 

 

3.20%

 

    Total delinquency rate (30 days and over)

 

 

 

6.33%

 

 

6.36%

 

 

6.19%

 

 

5.95%

 

 

6.25%

 

Capital Ratios (Non-GAAP)

(12)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leverage ratio

 

 

 

14.64%

 

 

14.22%

(a)

 

13.93%

 

 

13.92%

 

 

14.07%

 

Common equity Tier 1 capital ratio

 

 

 

17.09%

 

 

16.78%

 (a)  

 

14.38%

 

 

14.14%

 

 

14.52%

 

Tier 1 risk-based capital ratio

 

 

 

19.49%

 

 

19.20%

(a)

 

18.55%

 

 

18.38%

 

 

19.00%

 

Total risk-based capital ratio

 

 

 

20.77%

 

 

20.48%

 (a)  

 

19.84%

 

 

19.67%

 

 

20.29%

 

Tangible common equity ("TCE") ratio

 

 

 

13.05%

 

 

12.76%

(a)

 

10.88%

 

 

10.95%

 

 

11.22%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) During the Q4 2018, the Company converted all of its outstanding 8.750% non-cumulative convertible perpetual preferred stock, series C into OFG Bancorp common stock. Each share of the 84,000 series C preferred stock was converted into 86.4225 shares of common stock.

(b) During the Q4 2018, the Company increased the regular cash dividend per common share to $0.07 from $0.06.

(c) During the Q4 2018, the Company received $1.8 million proceeds from the sale of fully charged-off originated auto and consumer loans.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 2: Consolidated Statements of Operations

 

 

 

 

Quarter Ended

 

 

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

(Dollars in thousands, except per share data) (unaudited)

 

 

2019

 

2018

 

2018

 

2018

 

2018

 

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Non-acquired loans

 

 

$

71,298

 

 $  

70,747

 

$

68,387

 

$

62,710

 

 $  

58,306

 

    Acquired BBVAPR loans

 

 

 

10,247

 

 

10,935

 

 

12,144

 

 

12,353

 

 

12,965

 

    Acquired Eurobank loans

 

 

 

2,574

 

 

2,642

 

 

3,485

 

 

3,366

 

 

3,341

 

          Total interest income from loans

 

 

 

84,119

 

 

84,324

 

 

84,016

 

 

78,429

 

 

74,612

 

Investment securities

 

 

 

10,591

 

 

10,782

 

 

10,121

 

 

9,577

 

 

8,558

 

          Total interest income

 

 

 

94,710

 

 

95,106

 

 

94,137

 

 

88,006

 

 

83,170

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Core deposits

 

 

 

6,214

 

 

6,396

 

 

5,877

 

 

5,517

 

 

5,412

 

    Brokered deposits

 

 

 

2,835

 

 

3,003

 

 

2,728

 

 

2,134

 

 

1,886

 

           Total deposits

 

 

 

9,049

 

 

9,399

 

 

8,605

 

 

7,651

 

 

7,298

 

Borrowings

 

 

 

3,872

 

 

3,672

 

 

3,255

 

 

2,767

 

 

1,878

 

           Total interest expense

 

 

 

12,921

 

 

13,071

 

 

11,860

 

 

10,418

 

 

9,176

 

Net interest income

 

 

 

81,789

 

 

82,035

 

 

82,277

 

 

77,588

 

 

73,994

 

    Provision for loan and lease losses, excluding acquired loans

 (1)  

 

 

11,333

 

 

10,842

 

 

13,420

 

 

12,835

 

 

14,958

 

    Provision (recapture) for acquired BBVAPR loan and lease losses

(1)

 

 

1,567

 

 

(998)

(b)

 

875

 

 

1,247

 

 

363

 

    Provision for acquired Eurobank loan and lease losses

 (1)  

 

 

(651)

 (a)  

 

1,456

 

 

306

 

 

665

 

 

139

 

          Total provision for loan and lease losses, net

 

 

 

12,249

 

 

11,300

 

 

14,601

 

 

14,747

 

 

15,460

 

           Net interest income after provision for loan and lease losses

 

 

 

69,540

 

 

70,735

 

 

67,676

 

 

62,841

 

 

58,534

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Banking service revenues

 

 

 

10,465

 

 

11,234

 

 

10,797

 

 

11,144

 

 

10,463

 

Wealth management revenues

 

 

 

5,882

 

 

7,246

 

 

6,407

 

 

6,262

 

 

6,019

 

Mortgage banking activities

 

 

 

1,206

 

 

780

 

 

1,242

 

 

988

 

 

1,757

 

          Total banking and financial service revenues

 

 

 

17,553

 

 

19,260

 

 

18,446

 

 

18,394

 

 

18,239

 

Other income, net

 

 

 

103

 

 

4,998

(c)

 

174

 

 

309

 

 

275

 

           Total non-interest income, net

 

 

 

17,656

 

 

24,258

 

 

18,620

 

 

18,703

 

 

18,514

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

 

 

20,341

 

 

19,322

 

 

18,495

 

 

18,099

 

 

20,608

 

Occupancy, equipment and infrastructure costs

 

 

 

7,746

 

 

7,762

 

 

8,388

 

 

9,166

 

 

7,768

 

Net loss on sale of foreclosed real estate and other repossessed assets

 

 

 

1,070

 

 

1,834

 

 

1,210

 

 

392

 

 

1,226

 

General and administrative expenses

 

 

 

20,699

 

 

20,963

 

 

20,112

 

 

22,746

 

 

20,100

 

           Total operating expenses

 

 

 

49,856

 

 

49,881

 

 

48,205

 

 

50,403

 

 

49,702

 

Credit related expenses

 

 

 

2,296

 

 

1,838

 

 

2,736

 

 

1,897

 

 

2,419

 

           Total non-interest expense

 

 

 

52,152

 

 

51,719

 

 

50,941

 

 

52,300

 

 

52,121

 

Income before income taxes

 

 

 

35,044

 

 

43,274

 

 

35,355

 

 

29,244

 

 

24,927

 

Income tax expense

 

 

 

11,574

 

 

18,530

(d)

 

12,255

 

 

9,595

 

 

8,010

 

Net income

 

 

 

23,470

 

 

24,744

 

 

23,100

 

 

19,649

 

 

16,917

 

Less:  dividends on preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Convertible preferred stock

 

 

 

-

 

 

-

(e)

 

(1,838)

 

 

(1,837)

 

 

(1,838)

 

    Other preferred stock

 

 

 

(1,628)

 

 

(1,628)

 

 

(1,628)

 

 

(1,628)

 

 

(1,627)

 

Net income available to common shareholders

 

 

$

21,842

 

$

23,116

 

$

19,634

 

$

16,184

 

$

13,452

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) During the 1Q 2019, the provision for acquired Eurobank loans and leases reflected better cashflows than expected.

(b) During the 4Q 2018, the provision for acquired BBVAPR loans reflected better cashflows than expected.

(c) During the 4Q 2018, the Company received a $5.0 million payment from the insurance company for Hurricane María impact on the Bank's operations.

(d) During the 4Q 2018, the Company recognized an aggregate amount of $4.1 million income tax expense as a result of the Changes in Puerto Rico Tax Legislation, mainly driven by a reduction of the DTA since Regular Corporate Tax Rate changes from 39% to 37.5%.

(e) During the Q4 2018, the Company converted of all of its outstanding 8.750% non-cumulative convertible perpetual preferred stock, series C into OFG Bancorp common stock. Each share of the 84,000 series C preferred stock was converted into 86.4225 shares of common stock.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 3: Consolidated Statements of Financial Condition

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

(Dollars in thousands) (unaudited)

 

 

2019

 

2018

 

2018

 

2018

 

2018

 

Cash and cash equivalents

 

 

$

509,023

 

$

450,063

 

$

546,780

 

$

378,365

 

$

365,388

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading securities

 

 

 

381

 

 

360

 

 

405

 

 

418

 

 

293

 

Investment securities available-for-sale, at fair value, with amortized cost of $1,248,750

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    (December 31, 2018 - $854,511; September 30, 2018 - $872,895; June 30, 2018 - $890,308;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     March 31, 2018 - $815,970)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Mortgage-backed securities

 

 

 

1,225,225

(a)

 

827,564

 

 

834,538

 

 

855,686

 

 

784,972

 

    Other investment securities

 

 

 

14,244

 

 

14,293

 

 

14,014

 

 

16,655

 

 

16,669

 

          Total investment securities available-for-sale

 

 

 

1,239,469

 

 

841,857

 

 

848,552

 

 

872,341

 

 

801,641

 

Mortgage-backed securities held-to-maturity, at amortized cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    (fair value at December 31, 2018 - $410,353; September 30, 2018 - $425,066; June 30, 2018 - $447,947;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      March 31, 2018 - $467,980)

 

 

 

-

 (a)  

 

424,740

 

 

444,679

 

 

465,427

 

 

485,143

 

Federal Home Loan Bank (FHLB) stock, at cost

 

 

 

12,800

 

 

12,644

 

 

12,461

 

 

14,919

 

 

11,499

 

Other investments

 

 

 

3

 

 

3

 

 

3

 

 

3

 

 

3

 

          Total investments

 

 

 

1,252,653

 

 

1,279,604

 

 

1,306,100

 

 

1,353,108

 

 

1,298,579

 

Loans, net

 

 

 

4,401,401

 

 

4,431,594

 

 

4,352,980

 

 

4,315,866

 

 

4,133,429

 

Other assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets

 

 

 

110

 

 

347

 

 

1,265

 

 

1,100

 

 

898

 

Prepaid expenses

 

 

 

7,830

 

 

10,283

 

 

13,461

 

 

11,127

 

 

7,625

 

Deferred tax asset, net

 

 

 

112,744

 

 

113,763

 

 

122,934

 

 

125,141

 

 

128,270

 

Foreclosed real estate and repossessed properties

 

 

 

34,439

 

 

36,754

 

 

42,014

 

 

46,035

 

 

45,396

 

Premises and equipment, net

 

 

 

69,017

 

 

68,892

 

 

67,762

 

 

66,174

 

 

67,163

 

Goodwill

 

 

 

86,069

 

 

86,069

 

 

86,069

 

 

86,069

 

 

86,069

 

Right of use assets

 

 

 

20,860

(b)

 

-

 

 

-

 

 

-

 

 

-

 

Accounts receivable and other assets

 

 

 

109,045

 

 

105,983

 

 

117,309

 

 

118,577

 

 

114,304

 

Total assets

 

 

$

6,603,191

 

$

6,583,352

 

$

6,656,674

 

$

6,501,562

 

$

6,247,121

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

$

2,218,186

 

$

2,191,802

 

$

2,304,067

 

$

2,176,935

 

$

2,117,857

 

Savings accounts

 

 

 

1,231,170

 

 

1,187,945

 

 

1,216,190

 

 

1,219,159

 

 

1,228,646

 

Time deposits

 

 

 

996,519

 

 

1,003,271

 

 

1,037,858

 

 

1,022,682

 

 

1,012,329

 

Brokered deposits

 

 

 

451,226

 

 

525,097

 

 

530,878

 

 

461,425

 

 

474,596

 

          Total deposits

 

 

 

4,897,101

 

 

4,908,115

 

 

5,088,993

 

 

4,880,201

 

 

4,833,428

 

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities sold under agreements to repurchase

 

 

 

431,566

 

 

455,508

 

 

378,237

 

 

387,770

 

 

273,926

 

Advances from FHLB and other borrowings

 

 

 

81,397

 

 

78,834

 

 

73,723

 

 

128,413

 

 

44,328

 

Subordinated capital notes

 

 

 

36,083

 

 

36,083

 

 

36,083

 

 

36,083

 

 

36,083

 

          Total borrowings

 

 

 

549,046

 

 

570,425

 

 

488,043

 

 

552,266

 

 

354,337

 

Other liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

 

 

439

 

 

333

 

 

622

 

 

679

 

 

752

 

Acceptances outstanding

 

 

 

25,791

 

 

16,937

 

 

28,682

 

 

30,578

 

 

25,869

 

Lease liability

 

 

 

22,618

(b)

 

-

 

 

-

 

 

-

 

 

-

 

Accrued expenses and other liabilities

 

 

 

87,004

 

 

87,665

 

 

80,448

 

 

80,019

 

 

85,886

 

          Total liabilities

 

 

 

5,581,999

 

 

5,583,475

 

 

5,686,788

 

 

5,543,743

 

 

5,300,272

 

Stockholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

 

92,000

 

 

92,000

(c)

 

176,000

 

 

176,000

 

 

176,000

 

Common stock

 

 

 

59,885

 

 

59,885

 (c)  

 

52,626

 

 

52,626

 

 

52,626

 

Additional paid-in capital

 

 

 

619,828

 

 

619,381

(c)

 

542,078

 

 

541,734

 

 

541,404

 

Legal surplus

 

 

 

92,621

 

 

90,167

 

 

87,563

 

 

85,249

 

 

83,138

 

Retained earnings 

 

 

 

268,101

(b)

 

253,040

 

 

236,120

 

 

221,441

 

 

210,008

 

Treasury stock, at cost

 

 

 

(103,196)

 

 

(103,633)

 

 

(103,706)

 

 

(103,969)

 

 

(104,142)

 

Accumulated other comprehensive (loss) income, net

 

 

 

(8,047)

 

 

(10,963)

 

 

(20,795)

 

 

(15,262)

 

 

(12,185)

 

          Total stockholders' equity

 

 

 

1,021,192

 

 

999,877

 

 

969,886

 

 

957,819

 

 

946,849

 

          Total liabilities and stockholders' equity

 

 

$

6,603,191

 

$

6,583,352

 

$

6,656,674

 

$

6,501,562

 

$

6,247,121

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) On January 1, 2019, the Company adopted the Accounting Standard Update ("ASU") No. 2017-12 and reclassified all of its mortgage backed securities from the held-to-maturity portfolio into the available-for-sale portfolio.

 

(b) On January 1, 2019, the Company adopted the ASU No. 2016-02, under the effective date method, which requires lessees to recognize a right-of-use asset and related lease liability for lease classified as operating leases, prospectively.

 

(c) During Q4 2018, the Company converted of all of its outstanding 8.750% non-cumulative convertible perpetual preferred stock, series C into OFG Bancorp common stock. Each share of the 84,000 series C preferred stock was converted into 86.4225 shares of common stock.

 

4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 4: Information on Loan Portfolio and Production

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

(Dollars in thousands) (unaudited)

 

 

2019

 

2018

 

2018

 

2018

 

2018

Non-acquired loans held for investment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Mortgage

 

 

$

651,423

 

$

668,809

 

$

667,224

 

$

678,259

 

$

682,564

      Commercial

 

 

 

1,569,551

 

 

1,597,588

 

 

1,540,027

 

 

1,507,368

 

 

1,346,404

      Consumer

 

 

 

350,543

 

 

348,980

 

 

345,399

 

 

339,341

 

 

334,865

      Auto

 

 

 

1,167,482

 

 

1,129,695

 

 

1,084,912

 

 

1,014,664

 

 

957,197

 

 

 

 

3,738,999

 

 

3,745,072

 

 

3,637,562

 

 

3,539,632

 

 

3,321,030

      Less:  Allowance for loan and lease losses

 

 

 

(94,035)

 

 

(95,188)

 

 

(95,236)

 

 

(94,218)

 

 

(96,832)

 

 

 

 

3,644,964

 

 

3,649,884

 

 

3,542,326

 

 

3,445,414

 

 

3,224,198

      Deferred loan costs, net

 

 

 

8,254

 

 

7,740

 

 

7,556

 

 

7,028

 

 

7,125

          Total non-acquired loans held for investment, net

 

 

 

3,653,218

 

 

3,657,624

 

 

3,549,882

 

 

3,452,442

 

 

3,231,323

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans:

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BBVAPR

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Accounted for under ASC 310-20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Commercial

 

 

 

2,405

 

 

2,546

 

 

2,778

 

 

2,909

 

 

4,222

      Consumer

 

 

 

22,768

 

 

23,988

 

 

24,914

 

 

25,736

 

 

27,235

      Auto

 

 

 

2,336

 

 

4,435

 

 

7,494

 

 

11,283

 

 

16,171

 

 

 

 

27,509

 

 

30,969

 

 

35,186

 

 

39,928

 

 

47,628

      Less:  Allowance for loan and lease losses

 

 

 

(1,968)

 

 

(2,062)

 

 

(2,350)

 

 

(2,726)

 

 

(3,184)

 

 

 

 

25,541

 

 

28,907

 

 

32,836

 

 

37,202

 

 

44,444

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Accounted for under ASC 310-30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Mortgage

 

 

 

484,578

 

 

492,890

 

 

503,861

 

 

516,934

 

 

526,089

      Commercial

 

 

 

176,908

 

 

182,319

 

 

190,178

 

 

223,853

 

 

230,988

      Consumer

 

 

 

-

 

 

-

 

 

95

 

 

495

 

 

932

      Auto

 

 

 

9,866

 

 

14,403

 

 

20,363

 

 

26,937

 

 

35,006

 

 

 

 

671,352

 

 

689,612

 

 

714,497

 

 

768,219

 

 

793,015

      Less:  Allowance for loan and lease losses

 

 

 

(42,133)

 

 

(42,010)

 

 

(43,875)

 

 

(44,176)

 

 

(43,166)

 

 

 

 

629,219

 

 

647,602

 

 

670,622

 

 

724,043

 

 

749,849

   Total Acquired BBVAPR loans, net

 

 

 

654,760

 

 

676,509

 

 

703,458

 

 

761,245

 

 

794,293

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eurobank

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Accounted for under ASC 310-30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Mortgage

 

 

 

62,649

 

 

63,392

 

 

64,785

 

 

65,637

 

 

69,328

      Commercial

 

 

 

46,588

 

 

47,826

 

 

49,262

 

 

49,706

 

 

52,418

      Consumer

 

 

 

856

 

 

846

 

 

895

 

 

935

 

 

972

 

 

 

 

110,093

 

 

112,064

 

 

114,942

 

 

116,278

 

 

122,718

      Less:  Allowance for loan and lease losses

 

 

 

(24,352)

 

 

(24,971)

 

 

(24,281)

 

 

(24,314)

 

 

(25,410)

   Total Acquired Eurobank loans, net

 

 

 

85,741

 

 

87,093

 

 

90,661

 

 

91,964

 

 

97,308

          Total acquired loans, net

 

 

 

740,501

 

 

763,602

 

 

794,119

 

 

853,209

 

 

891,601

Total loans held for investment

 

 

 

4,393,719

 

 

4,421,226

 

 

4,344,001

 

 

4,305,651

 

 

4,122,924

Mortgage loans held for sale

 

 

 

7,682

 

 

10,368

 

 

8,979

 

 

10,215

 

 

10,505

Total loans, net

 

 

$

4,401,401

 

$

4,431,594

 

$

4,352,980

 

$

4,315,866

 

$

4,133,429

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan Portfolio Summary:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Loans held for investment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Mortgage

 

 

$

1,198,650

 

$

1,225,091

 

$

1,235,870

 

$

1,260,830

 

$

1,277,981

      Commercial

 

 

 

1,795,452

 

 

1,830,279

 

 

1,782,245

 

 

1,783,836

 

 

1,634,032

      Consumer

 

 

 

374,167

 

 

373,814

 

 

371,303

 

 

366,507

 

 

364,004

      Auto

 

 

 

1,179,684

 

 

1,148,533

 

 

1,112,769

 

 

1,052,884

 

 

1,008,374

 

 

 

 

4,547,953

 

 

4,577,717

 

 

4,502,187

 

 

4,464,057

 

 

4,284,391

      Less:  Allowance for loan and lease losses

 

 

 

(162,488)

 

 

(164,231)

 

 

(165,742)

 

 

(165,434)

 

 

(168,592)

 

 

 

 

4,385,465

 

 

4,413,486

 

 

4,336,445

 

 

4,298,623

 

 

4,115,799

      Deferred loan costs, net

 

 

 

8,254

 

 

7,740

 

 

7,556

 

 

7,028

 

 

7,125

          Total loans held for investment, net

 

 

 

4,393,719

 

 

4,421,226

 

 

4,344,001

 

 

4,305,651

 

 

4,122,924

  Mortgage loans held for sale

 

 

 

7,682

 

 

10,368

 

 

8,979

 

 

10,215

 

 

10,505

Total loans, net

 

 

$

4,401,401

 

$

4,431,594

 

$

4,352,980

 

$

4,315,866

 

$

4,133,429

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

2018

 

2018

 

2018

 

2018

(Dollars in thousands) (unaudited)

 

 

Q1

 

Q4

 

Q3

 

Q2

 

Q1

Quarterly loan production

(13)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Mortgage

 

 

$

23,097

 

$

33,373

 

$

27,869

 

$

31,808

 

$

26,645

    Commercial

 

 

 

60,485

 

 

92,088

 

 

105,346

 

 

127,200

 

 

42,783

    US Loan Program

 

 

 

31,706

 

 

31,667

 

 

30,357

 

 

99,666

 

 

74,361

    Consumer

 

 

 

40,877

 

 

42,055

 

 

42,995

 

 

42,317

 

 

37,502

    Auto

 

 

 

120,199

 

 

123,770

 

 

140,390

 

 

131,103

 

 

128,130

        Total

 

 

$

276,363

 

$

322,953

 

$

346,957

 

$

432,094

 

$

309,421

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 5: Average Balances, Net Interest Income and Net Interest Margin

 

 

 

 

2019 Q1

 

2018 Q4

 

2018 Q3

 

2018 Q2

 

2018 Q1

 

 

 

 

 

Interest

 

 

 

 

 

 

Interest

 

 

 

 

 

 

Interest

 

 

 

 

 

 

Interest

 

 

 

 

 

 

Interest

 

 

 

 

 

 

Average

 

Income/

 

Yield/

 

Average

 

Income/

 

Yield/

 

Average

 

Income/

 

Yield/

 

Average

 

Income/

 

Yield/

 

Average

 

Income/

 

Yield/

(Dollars in thousands) (unaudited)

 

 

Balance

 

Expense

 

Rate

 

Balance

 

Expense

 

Rate

 

Balance

 

Expense

 

Rate

 

Balance

 

Expense

 

Rate

 

Balance

 

Expense

 

Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Cash equivalents

 

 

$

388,578

 

 $  

2,368

 

2.47

%

 

$

434,701

 

 $  

2,572

 

2.35

%

 

$

327,268

 

 $  

1,676

 

2.03

%

 

$

289,227

 

 $  

1,242

 

1.72

%

 

$

323,695

 

 $  

1,207

 

1.51

%

    Investment securities

 

 

 

1,258,899

 

 

8,223

 

2.65

%

 

 

1,275,752

 

 

8,210

 

2.55

%

 

 

1,327,180

 

 

8,445

 

2.52

%

 

 

1,330,138

 

 

8,336

 

2.51

%

 

 

1,239,794

 

 

7,350

 

2.40

%

    Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

          Non-acquired loans

 

 

 

3,782,315

 

 

71,298

 

7.64

%

 

 

3,705,027

 

 

70,747

 

7.58

%

 

 

3,613,568

 

 

68,386

 

7.51

%

 

 

3,454,107

 

 

62,713

 

7.28

%

 

 

3,291,055

 

 

58,305

 

7.18

%

          Acquired BBVAPR loans

 

 

 

655,497

 

 

10,247

 

6.34

%

 

 

679,504

 

 

10,935

 

6.38

%

 

 

709,833

 

 

12,144

 

6.79

%

 

 

765,025

 

 

12,353

 

6.48

%

 

 

799,232

 

 

12,966

 

6.58

%

          Acquired Eurobank loans

 

 

 

86,159

 

 

2,574

 

12.12

%

 

 

88,578

 

 

2,642

 

11.83

%

 

 

91,182

 

 

3,485

 

15.16

%

 

 

93,894

 

 

3,364

 

14.37

%

 

 

97,668

 

 

3,341

 

13.87

%

            Total loans

 

 

 

4,523,971

 

 

84,119

 

7.54

%

 

 

4,473,109

 

 

84,324

 

7.48

%

 

 

4,414,583

 

 

84,015

 

7.55

%

 

 

4,313,026

 

 

78,430

 

7.29

%

 

 

4,187,955

 

 

74,612

 

7.23

%

Total interest-earning assets

 

 

$

6,171,448

 

$

94,710

 

6.22

%

 

$

6,183,562

 

$

95,106

 

6.10

%

 

$

6,069,031

 

$

94,136

 

6.15

%

 

$

5,932,391

 

$

88,008

 

5.95

%

 

$

5,751,444

 

$

83,169

 

5.86

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        NOW accounts

 

 

$

1,119,612

 

$

1,454

 

0.53

%

 

$

1,109,795

 

$

1,433

 

0.51

%

 

$

1,096,023

 

$

1,196

 

0.43

%

 

$

1,052,465

 

$

968

 

0.37

%

 

$

1,059,129

 

$

899

 

0.34

%

        Savings accounts

 

 

 

1,181,024

 

 

1,615

 

0.55

%

 

 

1,217,931

 

 

1,741

 

0.57

%

 

 

1,215,763

 

 

1,571

 

0.51

%

 

 

1,237,330

 

 

1,555

 

0.50

%

 

 

1,211,364

 

 

1,497

 

0.50

%

        Time deposits

 

 

 

992,331

 

 

2,944

 

1.20

%

 

 

1,012,101

 

 

3,007

 

1.18

%

 

 

1,027,124

 

 

2,895

 

1.12

%

 

 

1,012,330

 

 

2,778

 

1.10

%

 

 

1,024,740

 

 

2,800

 

1.11

%

        Brokered deposits

 

 

 

498,116

 

 

2,835

 

2.31

%

 

 

526,849

 

 

3,003

 

2.26

%

 

 

519,502

 

 

2,727

 

2.08

%

 

 

470,775

 

 

2,134

 

1.82

%

 

 

466,638

 

 

1,887

 

1.64

%

 

 

 

 

3,791,083

 

 

8,848

 

0.95

%

 

 

3,866,676

 

 

9,184

 

0.94

%

 

 

3,858,412

 

 

8,389

 

0.86

%

 

 

3,772,900

 

 

7,435

 

0.79

%

 

 

3,761,871

 

 

7,083

 

0.76

%

        Non-interest bearing deposit accounts

 

 

 

1,099,624

 

 

-

 

-

 

 

 

1,120,599

 

 

-

 

-

 

 

 

1,082,410

 

 

-

 

-

 

 

 

1,084,035

 

 

-

 

-

 

 

 

1,020,730

 

 

-

 

-

%

        Fair value premium amortization and core deposit intangible amortization

 

 

 

-

 

 

201

 

-

 

 

 

-

 

 

215

 

-

 

 

 

-

 

 

215

 

-

 

 

 

-

 

 

215

 

-

 

 

 

-

 

 

215

 

-

 

            Total deposits

 

 

 

4,890,707

 

 

9,049

 

0.75

%

 

 

4,987,275

 

 

9,399

 

0.75

%

 

 

4,940,822

 

 

8,604

 

0.69

%

 

 

4,856,935

 

 

7,650

 

0.63

%

 

 

4,782,601

 

 

7,298

 

0.62

%

    Borrowings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        Securities sold under agreements to repurchase

 

 

 

444,843

 

 

2,785

 

2.54

%

 

 

430,889

 

 

2,633

 

2.42

%

 

 

390,225

 

 

2,242

 

2.28

%

 

 

353,313

 

 

1,843

 

2.09

%

 

 

251,582

 

 

1,076

 

1.73

%

        Advances from FHLB and other borrowings

 

 

 

81,226

 

 

563

 

2.81

%

 

 

76,948

 

 

536

 

2.76

%

 

 

76,960

 

 

517

 

2.67

%

 

 

73,250

 

 

448

 

2.45

2

 

 

64,186

 

 

374

 

2.36

%

        Subordinated capital notes

 

 

 

36,083

 

 

524

 

5.89

%

 

 

36,083

 

 

503

 

5.53

%

 

 

36,083

 

 

496

 

5.45

%

 

 

36,083

 

 

479

 

5.32

%

 

 

36,083

 

 

427

 

4.80

%

            Total borrowings

 

 

 

562,152

 

 

3,872

 

2.79

%

 

 

543,920

 

 

3,672

 

2.68

%

 

 

503,268

 

 

3,255

 

2.57

%

 

 

462,646

 

 

2,770

 

2.40

%

 

 

351,851

 

 

1,877

 

2.16

%

Total interest-bearing liabilities

 

 

 $  

5,452,859

 

 $  

12,921

 

0.96

%

 

 $  

5,531,195

 

 $  

13,071

 

0.94

%

 

 $  

5,444,090

 

 $  

11,859

 

0.86

%

 

 $  

5,319,581

 

 $  

10,420

 

0.79

%

 

 $  

5,134,452

 

 $  

9,175

 

0.72

%

Interest rate spread

 

 

 

 

 

$

81,789

 

5.26

%

 

 

 

 

$

82,035

 

5.16

%

 

 

 

 

$

82,277

 

5.29

%

 

 

 

 

$

77,588

 

5.16

%

 

 

 

 

$

73,994

 

5.14

%

Net interest margin

 

 

 

 

 

 

 

 

5.37

%

 

 

 

 

 

 

 

5.26

%

 

 

 

 

 

 

 

5.38

%

 

 

 

 

 

 

 

5.25

%

 

 

 

 

 

 

 

5.22

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASC 310-30 loan cost recoveries:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

          Acquired BBVAPR loans

 

 

 

 

 

$

427

 

 

 

 

 

 

 

$

653

 

 

 

 

 

 

 

$

1,143

 

 

 

 

 

 

 

$

291

 

 

 

 

 

 

 

$

119

 

 

 

          Acquired Eurobank loans

 

 

 

 

 

 

110

 

 

 

 

 

 

 

 

123

 

 

 

 

 

 

 

 

829

 

 

 

 

 

 

 

 

533

 

 

 

 

 

 

 

 

389

 

 

 

 

 

 

 

 

 

$

537

 

 

 

 

 

 

 

$

776

 

 

 

 

 

 

 

$

1,972

 

 

 

 

 

 

 

$

824

 

 

 

 

 

 

 

$

508

 

 

 

Adjusted excluding cost recoveries (Non-GAAP):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest-earning assets

 

 

$

6,171,448

 

$

94,173

 

6.19

%

 

$

6,183,562

 

$

94,330

 

6.05

%

 

$

6,069,031

 

$

92,164

 

6.02

%

 

$

5,932,391

 

$

87,184

 

5.89

%

 

$

5,751,444

 

$

82,661

 

5.83

%

Interest rate spread

 

 

 

 

 

 $  

81,252

 

5.23

%

 

 

 

 

 $  

81,259

 

5.11

%

 

 

 

 

 $  

80,305

 

5.16

%

 

 

 

 

 $  

76,764

 

5.10

%

 

 

 

 

 $  

73,486

 

5.11

%

Net interest margin

 

 

 

 

 

 

 

 

5.34

%

 

 

 

 

 

 

 

5.21

%

 

 

 

 

 

 

 

5.25

%

 

 

 

 

 

 

 

5.19

%

 

 

 

 

 

 

 

5.18

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 6: Loan Information and Performance Statistics (Excluding Acquired Loans) (1)

 

 

 

 

 

 

 

2019

 

2018

 

2018

 

2018

 

2018

 

(Dollars in thousands) (unaudited)

 

 

Q1

 

Q4

 

Q3

 

Q2

 

Q1

 

Net Charge-offs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

 

 

$

587

 

$

1,570

 

$

1,429

 

$

1,328

 

$

968

 

  Recoveries

 

 

 

(287)

 

 

(128)

 

 

(139)

 

 

(466)

 

 

(314)

 

      Total mortgage

 

 

 

300

 

 

1,442

 

 

1,290

 

 

862

 

 

654

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

 

 

 

1,086

 

 

386

 

 

3,249

 

 

1,998

 

 

1,149

 

  Recoveries

 

 

 

(147)

 

 

(126)

 

 

(119)

 

 

(227)

 

 

(182)

 

      Total commercial

 

 

 

939

 

 

260

 

 

3,130

 

 

1,771

 

 

967

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

 

 

 

4,121

 

 

4,191

 

 

4,591

 

 

4,588

 

 

4,258

 

  Recoveries

 

 

 

(263)

 

 

(1,000)

 

 

(278)

 

 

(240)

 

 

(240)

 

      Total consumer

 

 

 

3,858

 

 

3,191

 

 

4,313

 

 

4,348

 

 

4,018

 

Auto:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

 

 

 

11,371

 

 

10,843

 

 

9,111

 

 

13,748

 

 

8,982

 

  Recoveries

 

 

 

(3,982)

 

 

(4,851)

 

 

(5,442)

 

 

(5,280)

 

 

(3,777)

 

      Total auto

 

 

 

7,389

 

 

5,992

 

 

3,669

 

 

8,468

 

 

5,205

 

          Total

 

 

$

12,486

 

$

10,885

 

$

12,402

 

$

15,449

 

$

10,844

 

Net Charge-off Rates

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

 

0.18%

 

 

0.86%

 

 

0.76%

 

 

0.50%

 

 

0.38%

 

Commercial

 

 

 

0.24%

 

 

0.07%

 

 

0.82%

 

 

0.50%

 

 

0.29%

 

Consumer

 

 

 

4.29%

 

 

3.56%

 

 

4.87%

 

 

4.97%

 

 

4.62%

 

Auto

 

 

 

2.54%

 

 

2.14%

 

 

1.39%

 

 

3.39%

 

 

2.23%

 

          Total

 

 

 

1.32%

 

 

1.18%

 

 

1.37%

 

 

1.79%

 

 

1.32%

 

Average Loans Held For Investment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

$

668,654

 

$

671,942

 

$

681,317

 

$

687,366

 

$

692,532

 

Commercial

 

 

 

1,591,415

 

 

1,553,218

 

 

1,519,616

 

 

1,417,083

 

 

1,315,993

 

Consumer

 

 

 

360,093

 

 

358,744

 

 

354,500

 

 

349,630

 

 

348,029

 

Auto

 

 

 

1,162,153

 

 

1,121,123

 

 

1,058,134

 

 

1,000,028

 

 

934,501

 

        Total

 

 

$

3,782,315

 

$

3,705,027

 

$

3,613,567

 

$

3,454,107

 

$

3,291,055

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 6: Loan Information and Performance Statistics (Excluding Acquired Loans) (Continued) (1)

 

 

 

 

2019

 

2018

 

2018

 

2018

 

2018

 

(Dollars in thousands) (unaudited)

 

 

Q1

 

Q4

 

Q3

 

Q2

 

Q1

 

Early Delinquency (30 - 89 days past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

$

26,775

 

$

26,150

 

$

25,285

 

$

26,132

 

$

29,190

 

Commercial

 

 

 

12,825

(a)

 

5,568

 

 

6,871

 

 

9,699

 

 

8,126

 

Consumer

 

 

 

7,795

 

 

7,285

 

 

6,661

 

 

7,063

 

 

7,478

 

Auto

 

 

 

87,500

 

 

86,039

 

 

81,828

 

 

65,823

 

 

61,558

 

        Total

 

 

$

134,895

 

$

125,042

 

$

120,645

 

$

108,717

 

$

106,352

 

Early Delinquency Rates (30 - 89 days past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

 

4.11%

 

 

3.91%

 

 

3.79%

 

 

3.85%

 

 

4.28%

 

Commercial

 

 

 

0.82%

 

 

0.35%

 

 

0.45%

 

 

0.64%

 

 

0.60%

 

Consumer

 

 

 

2.22%

 

 

2.09%

 

 

1.93%

 

 

2.08%

 

 

2.23%

 

Auto

 

 

 

7.49%

 

 

7.62%

 

 

7.54%

 

 

6.49%

 

 

6.43%

 

        Total

 

 

 

3.61%

 

 

3.34%

 

 

3.32%

 

 

3.07%

 

 

3.20%

 

Total Delinquency (30 days and over past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Traditional, Non traditional, and Loans under Loss Mitigation

 

 

$

78,560

 

$

82,404

 

$

83,966

 

$

83,707

 

$

89,252

 

    GNMA's buy-back option program

 

 

 

12,942

 

 

19,721

 

 

13,325

 

 

14,521

 

 

12,515

 

        Total mortgage

 

 

 

91,502

 

 

102,125

 

 

97,291

 

 

98,228

 

 

101,767

 

Commercial

 

 

 

35,737

(a)

 

27,423

 

 

25,191

 

 

26,269

 

 

21,544

 

Consumer

 

 

 

9,873

 

 

8,983

 

 

8,530

 

 

9,095

 

 

9,129

 

Auto

 

 

 

99,663

 

 

99,533

 

 

93,976

 

 

76,924

 

 

75,152

 

        Total

 

 

$

236,775

 

$

238,064

 

$

224,988

 

$

210,516

 

$

207,592

 

Total Delinquency Rates (30 days and over past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Traditional, Non traditional, and Loans under Loss Mitigation

 

 

 

12.06%

 

 

12.32%

 

 

12.58%

 

 

12.34%

 

 

13.08%

 

    GNMA's buy-back option program

 

 

 

1.99%

 

 

2.95%

 

 

2.00%

 

 

2.14%

 

 

1.83%

 

        Total mortgage

 

 

 

14.05%

 

 

15.27%

 

 

14.58%

 

 

14.48%

 

 

14.91%

 

Commercial

 

 

 

2.28%

 

 

1.72%

 

 

1.64%

 

 

1.74%

 

 

1.60%

 

Consumer

 

 

 

2.82%

 

 

2.57%

 

 

2.47%

 

 

2.68%

 

 

2.73%

 

Auto

 

 

 

8.54%

 

 

8.81%

 

 

8.66%

 

 

7.58%

 

 

7.85%

 

        Total

 

 

 

6.33%

 

 

6.36%

 

 

6.19%

 

 

5.95%

 

 

6.25%

 

Nonperforming Assets

(14)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

$

59,665

 

$

63,717

 

$

67,236

 

$

67,002

 

$

63,866

 

Commercial

 

 

 

50,376

(a)

 

42,456

 

 

42,807

 

 

47,451

 

 

47,044

 

Consumer

 

 

 

3,971

 

 

3,354

 

 

3,116

 

 

2,826

 

 

2,263

 

Auto

 

 

 

12,163

 

 

13,494

 

 

12,185

 

 

11,141

 

 

13,594

 

        Total nonperforming loans

 

 

 

126,175

 

 

123,021

 

 

125,344

 

 

128,420

 

 

126,767

 

Foreclosed real estate

 

 

 

10,011

 

 

9,571

 

 

10,295

 

 

12,186

 

 

13,365

 

Other repossessed assets

 

 

 

3,574

 

 

2,986

 

 

4,146

 

 

5,483

 

 

5,082

 

        Total nonperforming assets

 

 

$

139,760

 

$

135,578

 

$

139,785

 

$

146,089

 

$

145,214

 

Nonperforming Loan Rates

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

 

9.16%

 

 

9.53%

 

 

10.08%

 

 

9.88%

 

 

9.36%

 

Commercial

 

 

 

3.21%

 

 

2.66%

 

 

2.78%

 

 

3.15%

 

 

3.49%

 

Consumer

 

 

 

1.13%

 

 

0.96%

 

 

0.90%

 

 

0.83%

 

 

0.68%

 

Auto

 

 

 

1.04%

 

 

1.19%

 

 

1.12%

 

 

1.10%

 

 

1.42%

 

        Total loans

 

 

 

3.37%

 

 

3.28%

 

 

3.45%

 

 

3.63%

 

 

3.82%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) During the Q1 2019, a $8.8 million loan that is current in its monthly payments was placed in non-accrual due to credit deterioration.

 

 

 

8

 

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 7: Allowance for Loan and Lease Losses

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended March 31, 2019

(Dollars in thousands) (unaudited)

 

 

Mortgage

 

Commercial

 

Consumer

 

Auto

 

Total

Non-acquired loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

19,783

 

$

30,326

 

$

15,571

 

$

29,508

 

$

95,188

(Recapture) provision for loan and lease losses, net

 

 

 

(2,794)

 

 

2,767

 

 

4,372

 

 

6,988

 

 

11,333

Charge-offs

 

 

 

(587)

 

 

(1,086)

 

 

(4,121)

 

 

(11,371)

 

 

(17,165)

Recoveries

 

 

 

287

 

 

147

 

 

263

 

 

3,982

 

 

4,679

    Balance at end of period

 

 

$

16,689

 

$

32,154

 

$

16,085

 

$

29,107

 

$

94,035

Allowance coverage ratio

 

 

 

2.56%

 

 

2.05%

 

 

4.59%

 

 

2.49%

 

 

2.51%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired BBVAPR loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans accounted for under ASC 310-20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

 

 

 

$

22

 

$

1,905

 

$

135

 

$

2,062

(Recapture) provision for loan and lease losses, net

 

 

 

 

 

 

7

 

 

364

 

 

(73)

 

 

298

Charge-offs

 

 

 

 

 

 

-

 

 

(440)

 

 

(85)

 

 

(525)

Recoveries

 

 

 

 

 

 

3

 

 

40

 

 

90

 

 

133

    Balance at end of period

 

 

 

 

 

$

32

 

$

1,869

 

$

67

 

$

1,968

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans accounted for under ASC 310-30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

15,225

 

$

20,641

 

$

-

 

$

6,144

 

$

42,010

Provision (recapture) for loan and lease losses, net

 

 

 

2,733

 

 

850

 

 

-

 

 

(2,314)

 

 

1,269

Allowance de-recognition

 

 

 

(57)

 

 

(758)

 

 

-

 

 

(331)

 

 

(1,146)

    Balance at end of period

 

 

$

17,901

 

$

20,733

 

$

-

 

$

3,499

 

$

42,133

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired Eurobank loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

15,382

 

$

9,585

 

$

4

 

$

-

 

$

24,971

Provision (recapture) for loan and lease losses, net

 

 

 

(202)

 

 

(449)

 

 

-

 

 

-

 

 

(651)

Allowance de-recognition

 

 

 

(70)

 

 

106

 

 

(4)

 

 

-

 

 

32

    Balance at end of period

 

 

$

15,110

 

$

9,242

 

$

-

 

$

-

 

$

24,352

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total acquired loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

30,607

 

$

30,248

 

$

1,909

 

$

6,279

 

$

69,043

Provision (recapture) for loan and lease losses, net

 

 

 

2,531

 

 

408

 

 

364

 

 

(2,387)

 

 

916

Charge-offs

 

 

 

-

 

 

-

 

 

(440)

 

 

(85)

 

 

(525)

Recoveries

 

 

 

-

 

 

3

 

 

40

 

 

90

 

 

133

Allowance de-recognition

 

 

 

(127)

 

 

(652)

 

 

(4)

 

 

(331)

 

 

(1,114)

    Balance at end of period

 

 

$

33,011

 

$

30,007

 

$

1,869

 

$

3,566

 

$

68,453

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 8: Accretable Yield on Loans Accounted for Under ASC 310-30 (Loans Acquired with Deteriorated Credit Quality, including those by Analogy)

 

 

 

Quarter Ended March 31, 2019

(Dollars in thousands) (unaudited)

 

 

Mortgage

 

Commercial

 

Construction

 

Auto

 

Consumer

 

Total

Accretable Yield and Non-Accretable Discount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired BBVAPR loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accretable Yield

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

232,199

 

$

33,545

 

$

2,963

 

$

243

 

$

560

 

$

269,510

Accretion

 

 

 

(6,349)

 

 

(1,886)

 

 

(770)

 

 

(216)

 

 

(298)

 

 

(9,519)

Change in expected cash flows

 

 

 

-

 

 

3,258

 

 

7

 

 

3

 

 

298

 

 

3,566

Transfers (to) from non-accretable discount

 

 

 

1,058

 

 

(180)

 

 

442

 

 

150

 

 

(133)

 

 

1,337

    Balance at end of period

 

 

$

226,908

 

$

34,737

 

$

2,642

 

$

180

 

$

427

 

$

264,894

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Accretable Discount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

291,887

 

$

2,074

 

$

8,272

 

$

24,245

 

$

18,945

 

$

345,423

Change in actual and expected cash flows

 

 

 

(729)

 

 

(166)

 

 

(7)

 

 

(39)

 

 

(243)

 

 

(1,184)

Transfers from (to) accretable yield

 

 

 

(1,058)

 

 

180

 

 

(442)

 

 

(150)

 

 

133

 

 

(1,337)

    Balance at end of period

 

 

$

290,100

 

$

2,088

 

$

7,823

 

$

24,056

 

$

18,835

 

$

342,902

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction &

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Development

 

 

 

 

 

 

 

 

 

 

 

 

Loans Secured

 

 

 

 

Secured by

 

 

 

 

 

 

 

 

 

 

 

 

by 1-4 Family

 

Commercial

 

1-4 Family

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

and Other

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

Properties

 

Construction

 

Properties

 

Leasing

 

Consumer

 

Total

Acquired Eurobank loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accretable Yield

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

37,734

 

$

3,310

 

$

655

 

$

-

 

$

-

 

$

41,699

Accretion

 

 

 

(1,351)

 

 

(1,165)

 

 

-

 

 

(12)

 

 

(46)

 

 

(2,574)

Change in expected cash flows

 

 

 

(423)

 

 

(44)

 

 

-

 

 

(31)

 

 

87

 

 

(411)

Transfers (to) from non-accretable discount

 

 

 

408

 

 

159

 

 

(1)

 

 

43

 

 

(41)

 

 

568

    Balance at end of period

 

 

$

36,368

 

$

2,260

 

$

654

 

$

-

 

$

-

 

$

39,282

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Accretable Discount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

1,276

 

$

-

 

$

1,550

 

$

-

 

$

133

 

$

2,959

Change in actual and expected cash flows

 

 

 

7

 

 

159

 

 

-

 

 

43

 

 

(58)

 

 

151

Transfers from (to) accretable yield

 

 

 

(408)

 

 

(159)

 

 

1

 

 

(43)

 

 

41

 

 

(568)

    Balance at end of period

 

 

$

875

 

$

-

 

$

1,551

 

$

-

 

$

116

 

$

2,542

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 9: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital

 

 

 

In addition to disclosing required regulatory capital measures, we also report certain non-GAAP capital measures that management uses in assessing its capital adequacy. These non-GAAP measures include tangible common equity ("TCE") and TCE ratio. The table below provides the details of the calculation of our regulatory capital and non-GAAP capital measures. While our non-GAAP capital measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

2018

 

2018

 

2018

 

2018

 

(Dollars in thousands) (unaudited)

 

 

Q1

 

Q4

 

Q3

 

Q2

 

Q1

 

Stockholders' Equity to Non-GAAP Tangible Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

 

$

1,021,192

 

$

999,877

 

$

969,886

 

$

957,819

 

$

946,849

 

Less:  Intangible assets

 

 

 

(89,145)

 

 

(89,437)

 

 

(89,767)

 

 

(90,097)

 

 

(90,426)

 

           Noncumulative perpetual preferred stock

 

 

 

(92,000)

 

 

(92,000)

 

 

(176,000)

 

 

(176,000)

 

 

(176,000)

 

           Noncumulative perpetual preferred stock issuance costs

 

 

 

10,130

 

 

10,130

 

 

10,130

 

 

10,130

 

 

10,130

 

Tangible common equity

 

 

$

850,177

 

$

828,570

 

$

714,249

 

$

701,852

 

$

690,553

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock outstanding at end of period

 

 

 

51,328

 

 

51,294

 

 

44,006

 

 

43,983

 

 

43,968

 

Tangible book value (Non-GAAP)

 

 

$

16.56

 

$

16.15

 

$

16.23

 

$

15.96

 

$

15.71

 

Total Assets to Tangible Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets  

 

 

$

6,603,191

 

$

6,583,352

 

$

6,656,674

 

$

6,501,562

 

$

6,247,121

 

Less:  Intangible assets

 

 

 

(89,145)

 

 

(89,437)

 

 

(89,767)

 

 

(90,097)

 

 

(90,426)

 

Tangible assets (Non-GAAP)

 

 

$

6,514,046

 

$

6,493,915

 

$

6,566,907

 

$

6,411,465

 

$

6,156,695

 

Non-GAAP TCE Ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity

 

 

$

850,177

 

$

828,570

 

$

714,249

 

$

701,852

 

$

690,553

 

Tangible assets

 

 

 

6,514,046

 

 

6,493,915

 

 

6,566,907

 

 

6,411,465

 

 

6,156,695

 

TCE ratio

 

 

 

13.05%

 

 

12.76%

 

 

10.88%

 

 

10.95%

 

 

11.22%

 

Average Equity to Non-GAAP Average Tangible Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total stockholders' equity

 

 

$

1,017,546

 

$

983,015

 

$

973,838

 

$

959,777

 

$

952,151

 

Less:  Average noncumulative perpetual preferred stock

 

 

 

(92,000)

 

 

(111,174)

 

 

(176,000)

 

 

(176,000)

 

 

(176,000)

 

           Average noncumulative perpetual preferred stock issuance costs

 

 

 

10,130

 

 

10,130

 

 

10,130

 

 

10,130

 

 

10,130

 

Average total common stockholders' equity

 

 

$

935,676

 

$

881,971

 

$

807,968

 

$

793,907

 

$

786,281

 

Less:  Average intangible assets

 

 

 

(89,291)

 

 

(89,580)

 

 

(89,933)

 

 

(90,272)

 

 

(90,624)

 

Average tangible common equity

 

 

$

846,385

 

$

792,391

 

$

718,035

 

$

703,635

 

$

695,657

 

11

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 9: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures (Continued)

 

 

 

 

 

 

BASEL III

 

 

 

 

Standardized

 

 

 

 

2019

 

2018

 

2018

 

2018

 

2018

 

(Dollars in thousands) (unaudited)

 

 

Q1

 

Q4

 

Q3

 

Q2

 

Q1

 

Regulatory Capital Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital

 

 

$

832,923

 

$

811,708

 

$

690,937

 

$

669,922

 

$

652,013

 

Tier 1 capital

 

 

 

949,793

 

 

928,578

 

 

891,807

 

 

870,792

 

 

852,883

 

Total risk-based capital

(15)

 

 

1,012,112

 

 

990,500

 

 

953,543

 

 

931,606

 

 

910,828

 

Risk-weighted assets

 

 

 

4,872,807

 

 

4,837,214

 

 

4,806,348

 

 

4,737,529

 

 

4,489,130

 

Regulatory Capital Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital ratio

(16)

 

 

17.09%

 

 

16.78%

 

 

14.38%

 

 

14.14%

 

 

14.52%

 

Tier 1 risk-based capital ratio

(17)

 

 

19.49%

 

 

19.20%

 

 

18.55%

 

 

18.38%

 

 

19.00%

 

Total risk-based capital ratio

(18)

 

 

20.77%

 

 

20.48%

 

 

19.84%

 

 

19.67%

 

 

20.29%

 

Leverage ratio

(19)

 

 

14.64%

 

 

14.22%

 

 

13.93%

 

 

13.92%

 

 

14.07%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

 

$

1,021,192

 

$

999,877

 

$

969,886

 

$

957,819

 

$

946,849

 

Less:  Noncumulative perpetual preferred stock

 

 

 

(92,000)

 

 

(92,000)

 

 

(176,000)

 

 

(176,000)

 

 

(176,000)

 

          Noncumulative perpetual preferred stock issuance costs

 

 

 

10,130

 

 

10,130

 

 

10,130

 

 

10,130

 

 

10,130

 

          Unrealized gains on available-for-sale securities, net of income tax

 

 

 

7,841

 

 

10,972

 

 

21,187

 

 

15,518

 

 

12,274

 

          Unrealized losses on cash flow hedges, net of income tax

 

 

 

206

 

 

(9)

 

 

(392)

 

 

(256)

 

 

(89)

 

 

 

 

 

947,369

 

 

928,970

 

 

824,811

 

 

807,211

 

 

793,164

 

Less:    Disallowed goodwill

 

 

 

(86,069)

 

 

(86,069)

 

 

(86,069)

 

 

(86,069)

 

 

(86,069)

 

            Disallowed other intangible assets, net

(20)

 

 

(1,922)

 

 

(2,105)

 

 

(2,256)

 

 

(2,457)

 

 

(2,657)

 

            Disallowed deferred tax assets, net

(20)

 

 

(26,455)

 

 

(29,088)

 

 

(45,549)

 

 

(48,763)

 

 

(52,425)

 

Common equity Tier 1 capital

 

 

 

832,923

 

 

811,708

 

 

690,937

 

 

669,922

 

 

652,013

 

Plus:  Qualifying noncumulative perpetual preferred stock

 

 

 

92,000

 

 

92,000

 

 

176,000

 

 

176,000

 

 

176,000

 

            Qualifying noncumulative perpetual preferred stock issuance costs

 

 

 

(10,130)

 

 

(10,130)

 

 

(10,130)

 

 

(10,130)

 

 

(10,130)

 

            Subordinated capital notes

 

 

 

35,000

 

 

35,000

 

 

35,000

 

 

35,000

 

 

35,000

 

Tier 1 capital

 

 

 

949,793

 

 

928,578

 

 

891,807

 

 

870,792

 

 

852,883

 

Plus tier 2 capital:  Qualifying allowance for loan and lease losses

 

 

 

62,319

 

 

61,922

 

 

61,736

 

 

60,814

 

 

57,945

 

Total risk-based capital

 

 

$

1,012,112

 

$

990,500

 

$

953,543

 

$

931,606

 

$

910,828

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12

 

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

Table 10: Notes to Financial Summary, Selected Metrics, Loans, and Consolidated Financial Statements (Tables 1 - 9)

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

We use the term "acquired loans" to refer to loans acquired from the BBVAPR acquisition (December 18, 2012) and loans acquired in the Eurobank FDIC-Assisted acquisition (April 30, 2010), recorded at fair value at acquisition. The majority of these loans acquired are subsequently accounted for based on estimated cash flows expected to be collected over the life of the loans (under the accounting standard known as ASC 310-30). Because the guidance takes into consideration future credit losses expected to be incurred over the life of the loans, there are no charge-offs or an allowance associated with this loans unless the estimated cash flows expected to be collected decrease subsequent to acquisition. In addition, these loans are not classified as delinquent or nonperforming even though the customer may be contractually past due because we expect that we will fully collect the carrying value of these loans. Acquired loans also include loans acquired in the BBVAPR acquisition that were accounted for under the provisions of ASC 310-20, which at the end of the reporting period still have unamortized premium or discount. The fair value of these loans already include a credit mark for losses estimated on these loans.  The allowance for loan and lease losses for these loans considers such marks applied. The accounting and classification of these loans may significantly alter some of our reported credit quality metrics. We therefore supplement certain reported credit quality metrics with metrics adjusted to exclude the impact of these acquired loans.

(2)

Total banking and financial service revenues.

(3)

Calculated based on net income available to common shareholders divided by average common shares outstanding for the period.

(4)

Calculated based on net income available to common shareholders plus the preferred dividends on the convertible preferred stock, divided by total average common shares outstanding and equivalents for the period as if converted.

(5)

Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 9: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.

(6)

Information includes all loans held for investment, including all acquired loans. Acquired loans, including those accounted for under ASC 310-30, are disclosed at carrying amount.

(7)

Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.

(8)

Calculated based on annualized income, net of tax, for the period divided by average total assets for the period.

(9)

Calculated based on annualized income available to common shareholders for the period divided by average tangible common equity for the period.

(10)

Calculated based on non-interest expense for the period divided by total net interest income and total banking and financial services revenues for the period.

(11)

Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.

(12)

Non-GAAP ratios. See "Table 9: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures" for information on the calculation of each of these ratios.

(13)

Production of new loans (excluding renewals).

(14)

Loans accounted for under ASC 310-30 (loans acquired with deteriorated credit quality, including those by analogy), including Eurobank acquired loans, are considered to be performing due to the application of the accretion method, in which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analyses. Therefore, they are not included as non-performing loans.

(15)

Total risk-based capital equals the sum of Tier 1 capital and Tier 2 capital.

(16)

Common equity Tier 1 capital ratio is a regulatory capital measure calculated based on Common equity Tier 1 capital divided by risk-weighted assets.

(17)

Tier 1 risk-based capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.

(18)

Total risk-based capital ratio is a regulatory capital measure calculated based on Total risk-based capital divided by risk-weighted assets.

(19)

Leverage capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by average assets, after certain adjustments.

(20)

Amounts based on transition provisions for regulatory capital deductions and adjustments of 80% for 2018 and 2017.

(21)

Pre-provision net revenues is a non-GAAP measure calculated based on net interest income plus total non-interest income, net, less total non-interest expenses for the period.

13