OFG BANCORP - FORM 8-K - EX-99 - EXHIBIT 99 - April 20, 2018

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8-K - FORM 8-K - OFG BANCORPofg8K2018331.htm

 

 

Exhibit 99

 

OFG Bancorp Reports 1Q18 Results

SAN JUAN, Puerto Rico, April 20, 2018 – OFG Bancorp (NYSE: OFG) today reported results for the first quarter ended March 31, 2018, reflecting continued strong recovery following hurricanes Irma and Maria, which struck the island in September 2017.

1Q18 Summary

·        Net income available to shareholders was $13.5 million, or $0.29 per fully diluted share. This was in line with 4Q17’s $13.6 million, or $0.30 per share, and exceeded the year ago quarter’s $11.7 million, or $0.26 per share.

·        Return on average assets and average tangible common equity was 1.09% and 7.73%, respectively.

·        Tangible book value per common share was $15.71, and tangible common equity ratio was 11.22%.

·        Loan production of $309.4 million increased 22.0% from 4Q17 and 41.4% from the year ago quarter.

·        Total provision for loan and lease losses, net, declined 37.9% from 4Q17, which included $5.4 million in additional hurricanes-related provision.

·        Core non-interest income of $18.2 million increased 9.0% from 4Q17 and 4.7% from the year ago quarter as banking service fees and mortgage banking revenues rebounded.

CEO Comment

José Rafael Fernández, President, Chief Executive Officer, and Vice Chairman of the Board, commented:

“Our first quarter results reflect the success of our strategies and Puerto Rico’s emerging recovery. We earned $0.29 per share fully diluted, 12% higher than a year ago. Our strong capital position continued to build.

“The island benefited from loan payment moratoriums by Oriental and other banks, an increased availability of electric power, improvement in communications, and the return of day to day stability, as well as rebuild spending by FEMA, the start of payments of insurance claims, and the prospect of growing assignments of federal funds.

 

 

“Nearly every metric in 1Q18 confirmed this progress. For the second quarter in a row, our originated loan growth outpaced the pay down of acquired loans, resulting in a net increase of $77.1 million from December 31, 2017—close to 8% on an annualized basis.

“Auto, consumer and mortgage lending at $192.3 million increased 52% from 4Q17 and more than 11% from 1Q17.  In particular, auto lending was at a record level, up more than 46% from the preceding and year ago quarters.

“Commercial loan production in Puerto Rico, while lower than 4Q17, rose more than 13% year over year. Meanwhile, our U.S. commercial and industrial loan program added $74 million in participations.

“With nearly all of our loan moratoriums expiring, 1Q18 credit quality remained stable. Most metrics were better than, or returned to, pre-hurricanes levels.

“Fee revenues rebounded with a 24% sequential increase in Banking Services and a 43% increase in Mortgage Banking. Core Wealth Management held steady at pre-hurricanes levels.

“Customer deposits (excluding brokered) increased 2% from the end of 2017 and 5% from a year ago. Our Net Interest Margin expanded to 5.22%, and net new customer accounts grew at an annualized rate of 8%, significantly exceeding 2017’s hurricanes affected 2% rise.

“Our effort to differentiate Oriental through superior service and digital banking technology is proving effective. Our team of dedicated bankers continually reaching out to our customers and clients is clearly working. And during 1Q18, we introduced another new technology-based service—My Payments (Mis Pagos), which enables loan-only customers to pay online  instead of standing in line. 

“While we remain cautious due to the uncertain economic environment on the island, we are confident positive momentum will prevail for both OFG and Puerto Rico. We will continue to sharpen our focus on our retail and commercial clients, improve our service levels, and provide faster and more agile ways to do banking.”

Income Statement Highlights

Unless otherwise noted, the following compares data for the first quarter 2018 to the fourth quarter 2017.

•      Interest Income

•      Originated Loans: Increased $0.6 million to $56.8 million, primarily due to higher balances.

•      Acquired Loans: Declined $1.1 million to $17.8 million, reflecting continued pay downs.

 

 

•      Investment Securities: Increased $0.5 million to $8.6 million, the result of higher balances and higher yield.

•      Interest Expense: Declined $0.5 million to $9.2 million, primarily due to reduced cost of deposits.

 

 

 

•      Total Provision for Loan and Lease Losses: Declined $9.4 million to $15.5 million. 1Q18 provision included $8.6 million to replenish the allowance for retail loan charge-offs of $8.2 million related to the hurricanes. 1Q18 provision also included an increase in the allowance related to auto loan portfolio growth and one commercial loan placed in non-accrual.

•      Net Interest Margin: Increased 14 basis points to 5.22% mainly due to higher yield in the investment portfolio and cash balances.

•      Total Banking and Wealth Management Revenues: Increased $1.5 million to $18.2 million.

•      Banking Service Revenues rose $2.0 million, largely the result of increased electronic banking activity with more power coming back on the island.

•      Mortgage Banking Activities were up $0.5 million, primarily due to increased business.

•      Wealth Management Revenues fell $1.0 million, reflecting the absence of annual insurance fees recognized in 4Q17.

•      Total Non-Interest Expenses: Increased $5.5 million to $52.1 million. 4Q17 included $3.8 million in items that temporarily lowered costs, including reduced expenses related to electronic banking activity. 1Q18 reflected higher seasonal compensation expenses and expenses related to the sale of foreclosed assets returning to pre-hurricanes levels.

•      Effective Tax Rate (ETR): Approximately 32%, the rate the Company is currently estimating for the full year.

Balance Sheet Highlights

Unless otherwise noted, the following compares data at March 31, 2018 to December 31, 2017.

•      Total Loans Net: Increased $77.1 million to $4.13 billion with originated loan growth more than offsetting normal pay downs of acquired loans. Production highlights include:

•      Auto lending at a record $128.1 million was up 46.3% from 4Q17 and 47.6% year over year, reflecting replacement of damaged vehicles, pent up demand, and the market’s effort to adjust to one less auto lending competitor.

•      Consumer lending increased 62.6% to $37.5 million, exceeding pre-hurricanes levels, as retail customers moved to replace needed items and repair homes.

 

 

•      Mortgage lending rebounded 67.7% to $26.6 million from 4Q17’s low, post-hurricanes level, but was down 38.7% from the year ago quarter.

•      Commercial lending at $42.8 million declined from 4Q17’s robust levels, but was up 13.5% from 1Q17. The Company’s bankers continue building relationships with businesses participating in Puerto Rico’s recovery.

•      The recently established OFG USA program added $74.4 million in commercial and industrial related loan participations across an array of industries and geographies in the continental U.S.

•      Cash and cash equivalents: Declined $122.8 million to $365.4 million as cash was used to fund new loan growth and reduce higher cost borrowings.

•      Total Investments: Increased $132.5 million to $1.30 billion with the purchase of new mortgage backed securities to take advantage of favorable market opportunities.

•      Customer Deposits (excluding brokered deposits): Increased $77.9 million to $4.36 billion, up 1.8% and 5.2% from December 31, 2017 and March 31, 2017, respectively. Growth in demand and savings accounts more than offset a decline in time deposits.

•      Total Borrowings: Increased $25.6 million to $354.3 million as OFG used repurchase agreement funding to acquire investment securities. The Company also paid down higher cost FHLB advances.

•      Total Stockholders’ Equity: Increased $1.7 million to $946.8 million, with increases in retained earnings and legal surplus more than offsetting the increase of accumulated other comprehensive loss due to the effect of higher prevailing market interest rates.

Credit Quality Highlights

Unless otherwise noted, the following compares data on the originated loan portfolio at March 31, 2018 to December 31, 2017.

Following hurricanes Irma and Maria, Oriental offered automatic payment deferrals and 90-day extensions for most loan categories. Most of these payment moratoriums ended in 1Q18 with most credit metrics better than, or returned to, pre-hurricanes levels.

•      Net Charge-Off Rate: Remained virtually level at 1.34%. Consumer loan charge-offs returned to pre-hurricanes levels, while other loan categories remained flat or declined.

 

 

•      Early Delinquency Rate: Increased 138 basis points to 3.20% and Total Delinquency Rate rose 164 basis points to 6.25% as both metrics returned to pre-hurricanes levels.

•      Non-Performing Loan Rate: Increased 51 basis points to 3.82%. The commercial loan rate increased 79 bps due to a $10.5 million loan that is current in its monthly payments, but was placed in non-accrual due to credit deterioration. The auto loan rate increased 94 bps due to 1Q18 moratorium expirations.

•      Allowance for Loan and Lease Losses: Increased $4.1 million to $96.8 million, due to higher loan balances, particularly in auto lending, and the above mentioned commercial loan placed in non-accrual status.

 

 

 

 

Capital Position

Unless otherwise noted, the following compares data at March 31, 2018 to December 31, 2017.

Capital continued to grow and remains significantly above regulatory requirements for a well-capitalized institution.

Metric

1Q18

QoQ Change

YoY Change

Tangible Common Equity Ratio

11.22%

-7 bps

+56 bps

Tangible Book Value per Common Share

$15.71

+0.3%

+2.5%

Common Equity Tier 1 Capital Ratio (using Basel III methodology)

14.62%

+3 bps

+32 bps

Total Risk-Based Capital Ratio

20.31%

-3 bps

+26 bps

Conference Call

A conference call to discuss OFG’s results for 1Q18, outlook and related matters will be held today, Friday, April 20, 2018, at 10:00 AM Eastern Time. The call will be accessible live via a webcast on OFG’s Investor Relations website at www.ofgbancorp.com.  A webcast replay will be available shortly thereafter. Access the webcast link in advance to download any necessary software.

Financial Supplement

OFG’s Financial Supplement, with full financial tables for the quarter ended March 31, 2018, 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) the credit default by 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 impact of property, credit and other losses in Puerto Rico as a result of hurricanes Irma and Maria; (vii) 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; (viii) the pace and magnitude of Puerto Rico’s economic recovery; (ix) the potential impact of damages from future hurricanes and natural disasters in Puerto Rico; (x) the fiscal and monetary policies of the federal government and its agencies; (xi) changes in federal bank regulatory and supervisory policies, including required levels of capital; (xii) the relative strength or weakness of the commercial and consumer credit sectors and the real estate market in Puerto Rico; (xiii) the performance of the stock and bond markets; (xiv) competition in the financial services industry; and (xv) 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, 2017, 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 54th 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. Investor information can be found at Error! Hyperlink reference not valid.www.ofgbancorp.com.

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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, 2018 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

 

 

 

2018

 

2017

 

2017

 

2017

 

2017

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

 

 

Q1

 

Q4

 

Q3

 

Q2

 

Q1

Earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

$

73,994

 

$

73,513

 

$

80,478

 

$

75,563

 

$

74,618

Non-interest income, net (core)

(2)

 

 

18,239

 

 

16,734

 

 

17,213

 

 

17,933

 

 

17,428

Non-interest expense

 

 

 

52,121

 

 

46,662

 

 

50,469

 

 

52,816

 

 

51,684

Pre-provision net revenues

 

 

 

40,387

 

 

43,666

 

 

47,921

 

 

47,633

 

 

42,008

Provision for loan and lease losses

 

 

 

15,460

 

 

24,907

(a)

 

44,042

(a)

 

26,536

(b)

 

17,654

Net income before income taxes

 

 

 

24,927

 

 

18,759

 

 

3,879

 

 

21,097

 

 

24,354

Income tax expense

 

 

 

8,010

 

 

1,686

 

 

560

 

 

3,993

 

 

9,204

Net income

 

 

$

16,917

 

$

17,073

 (a)  

$

3,319

 (a)  

$

17,104

 

$

15,150

Common Share Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - basic

(3)

 

$

0.31

 

$

0.31

 (a)  

$

-

 (a)  

$

0.30

 

$

0.27

Earnings per common share - diluted

(4)

 

$

0.29

 

$

0.30

(a)

$

-

(a)

$

0.30

 

$

0.26

Average common shares outstanding

 

 

 

43,955

 

 

43,947

 

 

43,947

 

 

43,947

 

 

43,915

Average common shares outstanding and equivalents

 

 

 

51,121

 

 

51,104

 

 

51,102

 

 

51,100

 

 

51,131

Cash dividends per common share

 

 

$

0.06

 

$

0.06

 

$

0.06

 

$

0.06

 

$

0.06

Book value per common share (period end)

 

 

$

17.76

 

$

17.73

 

$

17.56

 

$

17.59

 

$

17.42

Tangible book value per common share (period end)

(5)

 

$

15.71

 

$

15.67

 

$

15.49

 

$

15.51

 

$

15.33

Balance Sheet (Average Balances)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

(6)

 

$

4,183,775

 

$

4,081,427

 

$

4,062,042

 

$

4,129,550

 

$

4,141,628

Interest-earning assets

 

 

 

5,751,783

 

 

5,735,593

 

 

5,658,953

 

 

5,848,525

 

 

5,932,924

Total assets

 

 

 

6,189,752

 

 

6,191,737

 

 

6,046,139

 

 

6,278,464

 

 

6,374,177

Interest-bearing deposits

 

 

 

3,756,607

 

 

3,835,357

 

 

3,774,378

 

 

3,844,490

 

 

3,850,506

Borrowings

 

 

 

351,793

 

 

374,059

 

 

462,035

 

 

614,332

 

 

715,951

Stockholders' equity

 

 

 

952,151

 

 

943,823

 

 

947,404

 

 

938,707

 

 

926,011

Common stockholders' equity

 

 

 

786,281

 

 

777,953

 

 

781,534

 

 

772,837

 

 

760,141

Performance Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

(7)

 

 

5.22%

 

 

5.08%

 

 

5.64%

 

 

5.18%

 

 

5.10%

Return on average assets

(8)

 

 

1.09%

 

 

1.10%

 

 

0.22%

(a)

 

1.09%

 

 

0.95%

Return on average tangible common stockholders' equity

(9)

 

 

7.73%

 

 

7.92%

 

 

-0.08%

 

 

8.01%

 

 

7.00%

Efficiency ratio

(10)

 

 

56.51%

 

 

51.70%

 

 

51.66%

 

 

56.49%

 

 

56.15%

Full-time equivalent employees, period end

 

 

 

1,367

 

 

1,421

 

 

1,464

 

 

1,472

 

 

1,446

Credit Quality Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Excluding acquired loans:

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Allowance for loan and lease losses

 

 

$

96,832

 

$

92,718

(a)

$

87,541

(a)

$

69,666

(b)

$

60,483

    Allowance as a % of loans held for investment

 

 

 

2.92%

 

 

2.89%

 (a)  

 

2.83%

 (a)  

 

2.25%

 

 

1.98%

    Net charge-offs

 

 

$

10,844

 

$

10,466

 

$

11,815

 

$

13,635

(b)(c)

$

10,552

    Net charge-off rate

(11)

 

 

1.34%

 

 

1.35%

 

 

1.54%

 

 

1.79%

 (b)(c)  

 

1.40%

    Early delinquency rate (30 - 89 days past due)

 

 

 

3.20%

 

 

1.82%

(d)

 

3.79%

 

 

3.52%

 

 

3.42%

    Total delinquency rate (30 days and over)

 

 

 

6.25%

 

 

4.61%

 (d)  

 

6.84%

 

 

6.31%

 

 

6.34%

Capital Ratios (Non-GAAP)

(12)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leverage ratio

 

 

 

14.09%

 

 

13.92%

 

 

14.07%

 

 

13.69%

 

 

13.20%

Common equity Tier 1 capital ratio

 

 

 

14.62%

 

 

14.59%

 

 

14.89%

 

 

14.66%

 

 

14.30%

Tier 1 risk-based capital ratio

 

 

 

19.01%

 

 

19.05%

 

 

19.53%

 

 

19.14%

 

 

18.77%

Total risk-based capital ratio

 

 

 

20.31%

 

 

20.34%

 

 

20.82%

 

 

20.42%

 

 

20.05%

Tangible common equity ("TCE") ratio

 

 

 

11.22%

 

 

11.29%

 

 

10.98%

 

 

11.09%

 

 

10.66%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) During the Q3 and Q4 2017, earnings were impacted by Hurricanes Irma and Maria, which struck the island on September 7, 2017 and September 20, 2017, respectively. Based on our assessment of the facts we have increased our provision for the allowance of loan losses in the 3Q 2017 and 4Q 2017 by $27 million and $5.4 million, respectively, related to these hurricanes.

(b) On June 30, 2017, the Company entered into an agreement for the sale of a municipality loan for $28.8 million. At June 30, 2017, this loan, which included a principal payment of $4.8 million received in July 1, 2017, was reported as other loans held for sale, at fair value.  As a result of this transaction, the Company recognized a $4.3 million charge-off during the second quarter. Proceeds were received on July 5, 2017. An allowance of $5.9 million was created during the second quarter for the remaining portfolio of municipal loans.

(c) During Q2 2017 , the Company had additional recoveries in auto and consumer loans of $1.1 million and $612 thousand, respectively.

(d) After Hurricane Irma and Maria on September 7, 2017 and September 20, 2017, respectively, the Company offered an automatic three-month moratorium for the payment of principal and interest for certain loans. During Q4 2017, the Company received payments on loans in moratorium, causing a decrease in delinquency.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

 

2018

 

2017

 

2017

 

2017

 

2017

 

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Non-acquired loans

 

 

$

56,781

 

 $  

56,183

 

$

58,939

(f)

$

53,449

 

 $  

51,955

 

    Acquired BBVAPR loans

 

 

 

14,490

 

 

15,310

 

 

19,189

(e)

 

17,752

 

 

19,085

 

    Acquired Eurobank loans

 

 

 

3,341

 

 

3,573

 

 

4,339

 

 

6,037

 

 

6,610

 

          Total interest income from loans

 

 

 

74,612

 

 

75,066

 

 

82,467

 

 

77,238

 

 

77,650

 

Investment securities

 

 

 

8,558

 

 

8,108

 

 

7,888

 

 

8,702

 

 

8,528

 

          Total interest income

 

 

 

83,170

 

 

83,174

 

 

90,355

 

 

85,940

 

 

86,178

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Core deposits

 

 

 

5,412

 

 

5,613

 

 

5,438

 

 

5,568

 

 

5,468

 

    Brokered deposits

 

 

 

1,886

 

 

2,079

 

 

2,163

 

 

2,084

 

 

1,885

 

           Total deposits

 

 

 

7,298

 

 

7,692

 

 

7,601

 

 

7,652

 

 

7,353

 

Borrowings

 

 

 

1,878

 

 

1,969

 

 

2,276

 

 

2,725

(h)

 

4,207

 

           Total interest expense

 

 

 

9,176

 

 

9,661

 

 

9,877

 

 

10,377

 

 

11,560

 

Net interest income

 

 

 

73,994

 

 

73,513

 

 

80,478

 

 

75,563

 

 

74,618

 

    Provision for loan and lease losses, excluding acquired loans

 (1)  

 

 

14,958

 

 

15,643

 (d)  

 

29,690

 (d)  

 

22,818

 (g)  

 

11,735

 

    Provision for acquired BBVAPR loan and lease losses

(1)

 

 

363

 

 

7,112

(d)

 

11,811

(d)

 

3,306

 

 

4,299

 

    Provision (recapture) for acquired Eurobank loan and lease losses

 (1)  

 

 

139

 

 

2,152

 (d)  

 

2,541

 (d)  

 

412

 

 

1,620

 

          Total provision for loan and lease losses, net

 

 

 

15,460

 

 

24,907

(d)

 

44,042

(d)

 

26,536

 

 

17,654

 

           Net interest income after provision for loan and lease losses

 

 

 

58,534

 

 

48,606

 

 

36,436

 

 

49,027

 

 

56,964

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Banking service revenues

 

 

 

10,463

 

 

8,461

(a)

 

9,923

(f)

 

10,458

 

 

10,626

 

Wealth management revenues

 

 

 

6,019

 

 

7,043

 

 

6,016

 

 

6,516

 

 

6,215

 

Mortgage banking activities

 

 

 

1,757

 

 

1,230

 

 

1,274

 

 

959

 

 

587

 

          Total banking and financial service revenues

 

 

 

18,239

 

 

16,734

 

 

17,213

 

 

17,933

 

 

17,428

 

FDIC shared-loss benefit (expense), net

 

 

 

-

 

 

-

 

 

-

 

 

-

 

 

1,403

 (j)  

Other gains, net

 

 

 

275

 

 

81

 

 

699

(k)

 

6,953

(h)

 

243

 

           Total non-interest income, net

 

 

 

18,514

 

 

16,815

 

 

17,912

 

 

24,886

 

 

19,074

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

 

 

20,608

 

 

20,205

 

 

19,882

 

 

19,317

 

 

20,347

 

Rent and occupancy costs

 

 

 

7,768

 

 

8,546

 

 

8,276

 

 

8,537

 

 

7,198

 

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

 

 

 

1,226

 

 

126

 (b)  

 

1,395

 

 

1,787

 

 

1,326

 

General and administrative expenses

 

 

 

20,100

 

 

16,350

(a)(c)

 

19,202

 

 

20,958

 

 

20,187

 

           Total operating expenses

 

 

 

49,702

 

 

45,227

 

 

48,755

 

 

50,599

 

 

49,058

 

Credit related expenses

 

 

 

2,419

 

 

1,435

 

 

1,714

 

 

2,217

 

 

2,626

 

           Total non-interest expense

 

 

 

52,121

 

 

46,662

 

 

50,469

 

 

52,816

 

 

51,684

 

Income before income taxes

 

 

 

24,927

 

 

18,759

 

 

3,879

 

 

21,097

 

 

24,354

 

Income tax expense

 

 

 

8,010

 

 

1,686

 

 

560

 

 

3,993

 (i)  

 

9,204

 

Net income

 

 

 

16,917

 

 

17,073

 

 

3,319

(d)

 

17,104

 

 

15,150

 

Less:  dividends on preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Convertible preferred stock

 

 

 

(1,838)

 

 

(1,838)

 

 

(1,838)

 

 

(1,837)

 

 

(1,838)

 

    Other preferred stock

 

 

 

(1,627)

 

 

(1,627)

 

 

(1,627)

 

 

(1,629)

 

 

(1,627)

 

Net income (loss) available to common shareholders

 

 

$

13,452

 

$

13,608

 

$

(146)

 

$

13,638

 

$

11,685

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) During the 4Q 2017, electronic banking fee income and  electronic banking expenses decreased $0.9 million and $1.0 million, respectively, from the prior quarter as a result of lower point of sale (POS) activity from our customers. The decrease is directly related to business interruption in several of our commercial clients from the lack of electricity.

(b) During the 4Q 2017, the Company generated higher gains in sale of foreclosed real estate by approximately $0.7 million and had lower write downs by approximately $0.6 million.

(c) During the 4Q 2017, the Company reversed $1.4 million expenses as a result of the settlement of regulatory and legal contingencies at a lower amount than estimated.

(d) During the Q3 and Q4 2017, earnings were impacted by Hurricanes Irma and Maria, which struck the island on September 7, 2017 and September 20, 2017, respectively. Based on our assessment of the facts we have increased our provision for the allowance of loan losses in the 3Q 2017 and 4Q 2017 by $27 million and $5.4 million, respectively, related to these hurricanes.

(e) During Q3 2017, the Company recognized $3.1 million in cost recoveries from the Puerto Rico Housing Finance Authority ("PRHFA") loan with an outstanding principal balance of $10.9 million.

(f) During Q3 2017, the Company received $22.4 million from the pay-off before maturity of a loan previously classified as non-accrual. As a result, the Company recorded $4.1 million in interest income and $439 thousand in prepayment penalty income, included in banking service revenues.

(g) On June 30, 2017, the Company entered into an agreement for the sale of a municipality loan for $28.8 million. At June 30, 2017, this loan, which included a principal payment of $4.8 million received in July 1, 2017, was reported as other loans held for sale, at fair value.  As a result of this transaction, the Company recognized a $4.3 million charge-off during the second quarter. Proceeds were received on July 5, 2017. An allowance of $5.9 million was created during the second quarter for the remaining portfolio of municipal loans.

(h) During Q2 2017, the Company sold $166.0 million of mortgage-backed securities and recorded a net gain on sale of securities of $6.8 million. Also, it sold $39.2 million Treasury Notes and recorded a net gain of $112 thousand. In addition, the Company unwound repurchase agreements in the amount of $100 million at a cost of $80 thousand.

(i) During Q2 2017, the effective income tax rate decreased as a result of higher proportion of exempt income and income subject to preferential rates mainly due to the gain in sale of investment portfolio.

(j) During Q1 2017, the Bank and the FDIC agreed to terminate the single family and commercial shared-loss agreements related to the FDIC assisted acquisition of Eurobank on April 30, 2010, resulting in a benefit of $1.4 million.

(k) During Q3 2017, the Company received $571 thousand, as final settlement from a 2009 claim of loss related to a private label collateralized obligation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

 

2018

 

2017

 

2017

 

2017

 

2017

 

Cash and cash equivalents

 

 

$

365,388

 

$

488,233

 

$

723,756

(c)

$

480,338

 

$

483,301

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading securities

 

 

 

293

 

 

191

 

 

284

 

 

294

 

 

314

 

Investment securities available-for-sale, at fair value, with amortized cost of $815,970

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    (December 31, 2017 - $648,799; September 30, 2017 - $611,936; June 30, 2017 - $649,280;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    March 31, 2017 - $796,558)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Mortgage-backed securities

 

 

 

784,972

 

 

629,124

 

 

596,222

 

 

584,930

(f)

 

741,405

 

    Other investment securities

 

 

 

16,669

 

 

16,673

 

 

17,201

 (d)  

 

64,397

 

 

58,637

 

          Total investment securities available-for-sale

 

 

 

801,641

 

 

645,797

 

 

613,423

 

 

649,327

 

 

800,042

 

Mortgage-backed securities held-to-maturity, at amortized cost, with fair value of $467,980

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    (December 31, 2017 - $497,681; September 30, 2017 - $525,830; June 30, 2017 - $549,595;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     March 31, 2017 - $570,963)

 

 

 

485,143

 

 

506,064

 

 

530,178

 

 

555,407

 

 

577,997

 

Federal Home Loan Bank (FHLB) stock, at cost

 

 

 

11,499

 

 

13,995

 

 

14,016

 

 

16,616

 

 

17,161

 

Other investments

 

 

 

3

 

 

3

 

 

3

 

 

3

 

 

3

 

          Total investments

 

 

 

1,298,579

 

 

1,166,050

 

 

1,157,904

 

 

1,221,647

 

 

1,395,517

 

Loans, net

 

 

 

4,133,429

 

 

4,056,329

 

 

3,964,572

 

 

4,091,866

 

 

4,089,708

 

Other assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets

 

 

 

898

 

 

771

 

 

809

 

 

957

 

 

1,123

 

Prepaid expenses

 

 

 

7,625

 

 

9,734

 

 

13,070

 

 

17,117

 

 

15,496

 

Deferred tax asset, net

 

 

 

128,270

 

 

127,421

 

 

126,041

 

 

116,199

 

 

121,442

 

Foreclosed real estate and repossessed properties

 

 

 

45,396

 

 

47,721

 

 

51,104

 

 

53,448

 

 

50,820

 

Premises and equipment, net

 

 

 

67,163

 

 

67,860

 

 

67,994

 

 

69,836

 

 

69,786

 

Goodwill

 

 

 

86,069

 

 

86,069

 

 

86,069

 

 

86,069

 

 

86,069

 

Accounts receivable and other assets

 

 

 

114,304

 

 

138,865

(b)

 

96,898

 

 

98,349

 

 

101,345

 

Total assets

 

 

 $  

6,247,121

 

 $  

6,189,053

 

 $  

6,288,217

 

 $  

6,235,826

 

 $  

6,414,607

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

$

2,117,857

 

$

2,039,126

 

$

1,925,721

 

$

1,844,996

 

$

1,944,921

 

Savings accounts

 

 

 

1,228,646

 

 

1,204,514

 

 

1,311,515

 

 

1,115,669

 

 

1,174,581

 

Time deposits

 

 

 

1,012,329

 

 

1,037,310

 

 

1,053,568

 

 

1,053,110

 

 

1,022,447

 

Brokered deposits

 

 

 

474,596

 

 

518,532

 

 

535,600

 

 

568,911

 

 

575,879

 

          Total deposits

 

 

 

4,833,428

 

 

4,799,482

 

 

4,826,404

 

 

4,582,686

 

 

4,717,828

 

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities sold under agreements to repurchase

 

 

 

273,926

 

 

192,869

(a)

 

283,080

(e)

 

453,492

 

 

531,179

 

Advances from FHLB and other borrowings

 

 

 

44,328

 

 

99,796

 

 

100,091

 

 

137,717

 

 

105,133

 

Subordinated capital notes

 

 

 

36,083

 

 

36,083

 

 

36,083

 

 

36,083

 

 

36,083

 

          Total borrowings

 

 

 

354,337

 

 

328,748

 

 

419,254

 

 

627,292

 

 

672,395

 

Other liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

 

 

752

 

 

1,281

 

 

1,677

 

 

1,881

 

 

1,967

 

Acceptances outstanding

 

 

 

25,869

 

 

27,644

 

 

16,486

 

 

22,739

 

 

24,288

 

Accrued expenses and other liabilities

 

 

 

85,886

 

 

86,791

 

 

86,766

 

 

62,259

 

 

66,700

 

          Total liabilities

 

 

 

5,300,272

 

 

5,243,946

 

 

5,350,587

 

 

5,296,857

 

 

5,483,178

 

Stockholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

 

176,000

 

 

176,000

 

 

176,000

 

 

176,000

 

 

176,000

 

Common stock

 

 

 

52,626

 

 

52,626

 

 

52,626

 

 

52,626

 

 

52,626

 

Additional paid-in capital

 

 

 

541,404

 

 

541,600

 

 

541,302

 

 

541,005

 

 

540,808

 

Legal surplus

 

 

 

83,138

 

 

81,454

 

 

79,795

 

 

79,460

 

 

77,772

 

Retained earnings 

 

 

 

210,008

 

 

200,878

 

 

191,567

 

 

194,687

 

 

185,377

 

Treasury stock, at cost

 

 

 

(104,142)

 

 

(104,502)

 

 

(104,502)

 

 

(104,502)

 

 

(104,502)

 

Accumulated other comprehensive income (loss), net

 

 

 

(12,185)

 

 

(2,949)

 

 

842

 

 

(307)

 

 

3,348

 

          Total stockholders' equity

 

 

 

946,849

 

 

945,107

 

 

937,630

 

 

938,969

 

 

931,429

 

          Total liabilities and stockholders' equity

 

 

$

6,247,121

 

$

6,189,053

 

$

6,288,217

 

$

6,235,826

 

$

6,414,607

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) During the Q4 2017, the Company made an unwinding of $80 million repurchase agreements at no cost.

 

(b) At December 31, 2017, the Company had higher balances in accounts receivable and other assets mainly from accrued interest receivable of loans included in hurricane Maria moratorium program.

 

(c) At September 30, 2017, the Company had higher balances in cash and cash equivalents due to increased deposits and lower transaction outflows toward the end of the quarter from commercial customers.

 

(d) During Q3 2017, the Company sold $45.0 million US Treasury securities available for sale and recorded a gain of $4 thousand.

 

(e) During Q3 2017, $160.4 million in short-term repurchase agreements matured and were not renewed.

 

(f) During Q2 2017, the Company sold $166.0 million of mortgage-backed securities and recorded a net gain on sale of securities of $6.8 million. Also, it sold $39.2 million Treasury Notes and recorded a net gain of $112 thousand. In addition, the Company unwound repurchase agreements in the amount of $100 million at a cost of $80 thousand.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

 

2018

 

2017

 

2017

 

2017

 

2017

 

Non-acquired loans held for investment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Mortgage

 

 

$

 682,564  

 

$

  683,607

 

$

  694,476

 

$

  699,290

 

$

  709,863

 

      Commercial

 

 

 

 1,346,404  

 

 

 1,307,261  

 

 

 1,245,711  

 

 

 1,270,844  

(b)

 

 1,253,712  

 

      Consumer

 

 

 

 334,865  

 

 

  330,039

 

 

  316,357

 

 

  314,267

 

 

  300,412

 

      Auto

 

 

 

 957,197  

 

 

 883,985  

 

 

 831,437  

 

 

 807,204  

 

 

 786,606  

 

 

 

 

 

 3,321,030  

 

 

 3,204,892  

 

 

 3,087,981  

 

 

 3,091,605  

 

 

 3,050,593  

 

      Less:  Allowance for loan and lease losses

 

 

 

 (96,832) 

 

 

 (92,718) 

(a)

 

 (87,541) 

(a)

 

 (69,666) 

(b)

 

 (60,483) 

 

 

 

 

 

 3,224,198  

 

 

 3,112,174  

 

 

 3,000,440  

 

 

 3,021,939  

 

 

 2,990,110  

 

      Deferred loan costs, net

 

 

 

 7,125  

 

 

 6,695  

 

 

 6,592  

 

 

 6,574  

 

 

 6,464  

 

          Total non-acquired loans held for investment, net

 

 

 

 3,231,323  

 

 

 3,118,869  

 

 

 3,007,032  

 

 

 3,028,513  

 

 

 2,996,574  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans:

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BBVAPR

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Accounted for under ASC 310-20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Commercial

 

 

 

 4,222  

 

 

 4,380  

 

 

 4,612  

 

 

 5,350  

 

 

 5,436  

 

      Consumer

 

 

 

   27,235

 

 

    28,915

 

 

    29,464

 

 

    30,233

 

 

    31,001

 

      Auto

 

 

 

 16,171  

 

 

 21,969  

 

 

 26,562  

 

 

 33,661  

 

 

 42,523  

 

 

 

 

 

   47,628

 

 

    55,264

 

 

    60,638

 

 

    69,244

 

 

    78,960

 

      Less:  Allowance for loan and lease losses

 

 

 

 (3,184) 

 

 

 (3,862) 

(a)

 

 (3,363) 

(a)

 

 (3,348) 

 

 

 (3,615) 

 

 

 

 

 

   44,444

 

 

    51,402

 

 

    57,275

 

 

    65,896

 

 

    75,345

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Accounted for under ASC 310-30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Mortgage

 

 

 

 526,089  

 

 

 532,053  

 

 

 532,948  

 

 

 544,325  

 

 

 558,112  

 

      Commercial

 

 

 

 230,988  

 

 

  243,092

 

 

  244,359

 

 

  266,002

 

 

  278,665

 

      Consumer

 

 

 

 932  

 

 

 1,431  

 

 

 1,598  

 

 

 2,163  

 

 

 3,201  

 

      Auto

 

 

 

   35,006

 

 

    43,696

 

 

    49,258

 

 

    58,078

 

 

    71,495

 

 

 

 

 

 793,015  

 

 

 820,272  

 

 

 828,163  

 

 

 870,568  

 

 

 911,473  

 

      Less:  Allowance for loan and lease losses

 

 

 

 (43,166) 

 

 

   (45,755)

(a)

 

   (40,110)

(a)

 

   (37,494)

 

 

   (34,930)

 

 

 

 

 

 749,849  

 

 

 774,517  

 

 

 788,053  

 

 

 833,074  

 

 

 876,543  

 

   Total Acquired BBVAPR loans, net

 

 

 

 794,293  

 

 

  825,919

 

 

  845,328

 

 

  898,970

 

 

  951,888

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eurobank

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Accounted for under ASC 310-30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Mortgage

 

 

 

   69,328

 

 

    69,538

 

 

    68,996

 

 

    70,329

 

 

    72,966

 

      Commercial

 

 

 

 52,418  

 

 

 53,793  

 

 

 53,028  

 

 

 66,894  

 

 

 73,181  

 

      Consumer

 

 

 

        972

 

 

      1,112

 

 

      1,220

 

 

      1,256

 

 

      1,268

 

 

 

 

 

 122,718  

 

 

 124,443  

 

 

 123,244  

 

 

 138,479  

 

 

 147,415  

 

      Less:  Allowance for loan and lease losses

 

 

 

 (25,410) 

 

 

   (25,174)

(a)

 

   (23,146)

(a)

 

   (21,787)

 

 

   (22,006)

 

   Total Acquired Eurobank loans, net

 

 

 

 97,308  

 

 

 99,269  

 

 

 100,098  

 

 

 116,692  

 

 

 125,409  

 

          Total acquired loans, net

 

 

 

 891,601  

 

 

  925,188

 

 

  945,426

 

 

 1,015,662  

 

 

 1,077,297  

 

Total loans held for investment

 

 

 

 4,122,924  

 

 

 4,044,057  

 

 

 3,952,458  

 

 

 4,044,175  

 

 

 4,073,871  

 

Mortgage loans held for sale

 

 

 

   10,505

 

 

    12,272

 

 

    12,114

 

 

    14,044

 

 

    15,837

 

Other loans held for sale

 

 

 

 -    

 

 

 -    

 

 

 -    

 

 

 33,647  

(b)

 

 -    

 

Total loans, net

 

 

$

 4,133,429  

 

$

 4,056,329  

 

$

 3,964,572  

 

$

 4,091,866  

 

$

 4,089,708  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan Portfolio Summary:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Loans held for investment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Mortgage

 

 

$

 1,277,981  

 

$

 1,285,198  

 

$

 1,296,420  

 

$

 1,313,944  

 

$

 1,340,941  

 

      Commercial

 

 

 

 1,634,032  

 

 

 1,608,526  

 

 

 1,547,710  

 

 

 1,609,090  

(b)

 

 1,610,994  

 

      Consumer

 

 

 

 364,004  

 

 

  361,497

 

 

  348,639

 

 

  347,919

 

 

  335,882

 

      Auto

 

 

 

 1,008,374  

 

 

 949,650  

 

 

 907,257  

 

 

 898,943  

 

 

 900,624  

 

 

 

 

 

 4,284,391  

 

 

 4,204,871  

 

 

 4,100,026  

 

 

 4,169,896  

 

 

 4,188,441  

 

      Less:  Allowance for loan and lease losses

 

 

 

 (168,592) 

 

 

 (167,509) 

(a)

 

 (154,160) 

(a)

 

 (132,295) 

(b)

 

 (121,034) 

 

 

 

 

 

 4,115,799  

 

 

 4,037,362  

 

 

 3,945,866  

 

 

 4,037,601  

 

 

 4,067,407  

 

      Deferred loan costs, net

 

 

 

 7,125  

 

 

 6,695  

 

 

 6,592  

 

 

 6,574  

 

 

 6,464  

 

          Total loans held for investment, net

 

 

 

 4,122,924  

 

 

 4,044,057  

 

 

 3,952,458  

 

 

 4,044,175  

 

 

 4,073,871  

 

  Mortgage loans held for sale

 

 

 

 10,505  

 

 

 12,272  

 

 

 12,114  

 

 

 14,044  

 

 

 15,837  

 

  Other loans held for sale

 

 

 

         -  

 

 

          -  

 

 

          -  

 

 

    33,647

(b)

 

          -  

 

Total loans, net

 

 

$

 4,133,429

 

$

 4,056,329  

 

$

 3,964,572  

 

$

 4,091,866  

 

$

 4,089,708  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

2017

 

2017

 

2017

 

2017

 

(Dollars in thousands) (unaudited)

 

 

Q1

 

Q4

 

Q3

 

Q2

 

Q1

 

Quarterly loan production

(13)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Mortgage

 

 

$

   26,645

 

$

    15,892

 

$

    32,559

 

$

    45,877

 

$

    43,474

 

    Commercial

 

 

 

 42,783  

 

 

 102,083  

 

 

 46,180  

 

 

 74,807  

 

 

 37,691  

 

    Commercial US Loan Programs

 

 

 

   74,361

 

 

    25,070

 

 

          -  

 

 

      5,560

 

 

      8,760

 

    Consumer

 

 

 

 37,502  

 

 

 23,059  

 

 

 33,741  

 

 

 49,652  

 

 

 42,149  

 

    Auto

 

 

 

 128,130  

 

 

    87,551

 

 

    78,313

 

 

    78,584

 

 

    86,784

 

        Total

 

 

$

 309,421  

 

$

 253,655  

 

$

 190,793  

 

$

 254,480  

 

$

 218,858  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) During the Q3 and Q4 2017, earnings were impacted by Hurricanes Irma and Maria, which struck the island on September 7, 2017 and September 20, 2017, respectively. Based on our assessment of the facts we have increased our provision for the allowance of loan losses in the 3Q 2017 and 4Q 2017 by $27 million and $5.4 million, respectively, related to these hurricanes.

(b) On June 30, 2017, the Company entered into an agreement for the sale of a municipality loan for $28.8 million. At June 30, 2017, this loan, which included a principal payment of $4.8 million received in July 1, 2017, was reported as other loans held for sale, at fair value.  As a result of this transaction, the Company recognized a $4.3 million charge-off during the second quarter. Proceeds were received on July 5, 2017. An allowance of $5.9 million was created during the second quarter for the remaining portfolio of municipal loans.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5

 

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

2018 Q1

 

2017 Q4

 

2017 Q3

 

2017 Q2

 

2017 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

 

 

$

328,214

 

 $  

1,207

 

1.49

%

 

$

493,354

 

 $  

1,516

 

1.22

%

 

$

426,197

 

 $  

1,304

 

1.21

%

 

$

384,037

 

 $  

956

 

1.00

%

 

$

431,110

 

 $  

845

 

0.79

%

    Investment securities

 

 

 

1,239,794

 

 

7,350

 

2.40

%

 

 

1,160,812

 

 

6,593

 

2.25

%

 

 

1,170,714

 

 

6,584

 

2.23

%

 

 

1,334,938

 

 

7,747

 

2.33

%

 

 

1,360,186

 

 

7,683

 

2.29

%

    Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

          Non-acquired loans

 

 

 

3,244,593

 

 

56,782

 

7.10

%

 

 

3,111,849

 

 

56,183

 

7.16

%

 

 

3,062,739

 

 

58,939

 

7.63

%

 

 

3,051,549

 

 

53,448

 

7.03

%

 

 

3,015,456

 

 

51,955

 

6.99

%

          Acquired BBVAPR loans

 

 

 

841,638

 

 

14,490

 

6.98

%

 

 

869,269

 

 

15,310

 

6.99

%

 

 

893,596

 

 

19,189

 

8.52

%

 

 

949,479

 

 

17,752

 

7.50

%

 

 

997,649

 

 

19,085

 

7.76

%

          Acquired Eurobank loans

 

 

 

97,544

 

 

3,341

 

13.89

%

 

 

100,310

 

 

3,573

 

14.13

%

 

 

105,707

 

 

4,339

 

16.29

%

 

 

128,522

 

 

6,037

 

18.84

%

 

 

128,522

 

 

6,610

 

20.86

%

            Total loans

 

 

 

4,183,775

 

 

74,613

 

7.23

%

 

 

4,081,427

 

 

75,066

 

7.30

%

 

 

4,062,042

 

 

82,467

 

8.05

%

 

 

4,129,550

 

 

77,237

 

7.50

%

 

 

4,141,627

 

 

77,650

 

7.60

%

Total interest-earning assets

 

 

$

5,751,783

 

$

83,170

 

5.86

%

 

$

5,735,593

 

$

83,175

 

5.75

%

 

$

5,658,953

 

$

90,355

 

6.33

%

 

$

5,848,525

 

$

85,940

 

5.89

%

 

$

5,932,923

 

$

86,178

 

5.89

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        NOW accounts

 

 

$

1,059,129

 

$

898

 

0.34

%

 

$

1,040,153

 

$

922

 

0.35

%

 

$

1,024,480

 

$

880

 

0.34

%

 

$

1,080,135

 

$

1,051

 

0.39

%

 

$

1,092,389

 

$

1,041

 

0.39

%

        Savings accounts

 

 

 

1,206,100

 

 

1,497

 

0.50

%

 

 

1,224,815

 

 

1,530

 

0.50

%

 

 

1,142,338

 

 

1,426

 

0.50

%

 

 

1,151,650

 

 

1,485

 

0.52

%

 

 

1,164,040

 

 

1,481

 

0.52

%

        Time deposits

 

 

 

1,024,740

 

 

2,802

 

1.11

%

 

 

1,046,191

 

 

2,932

 

1.11

%

 

 

1,052,910

 

 

2,902

 

1.09

%

 

 

1,037,063

 

 

2,802

 

1.08

%

 

 

1,019,528

 

 

2,715

 

1.08

%

        Brokered deposits

 

 

 

466,638

 

 

1,886

 

1.64

%

 

 

524,198

 

 

2,079

 

1.57

%

 

 

554,650

 

 

2,163

 

1.55

%

 

 

575,642

 

 

2,084

 

1.45

%

 

 

574,549

 

 

1,885

 

1.33

%

 

 

 

 

3,756,607

 

 

7,083

 

0.76

%

 

 

3,835,357

 

 

7,463

 

0.77

%

 

 

3,774,378

 

 

7,371

 

0.77

%

 

 

3,844,490

 

 

7,422

 

0.77

%

 

 

3,850,506

 

 

7,122

 

0.75

%

        Non-interest bearing deposit accounts

 

 

 

1,018,789

 

 

-

 

-

 

 

 

937,328

 

 

-

 

-

 

 

 

835,255

 

 

-

 

-

 

 

 

835,026

 

 

-

 

-

 

 

 

832,659

 

 

-

 

-

%

        Fair value premium amortization and core deposit intangible amortization

 

 

 

-

 

 

215

 

-

 

 

 

-

 

 

230

 

-

 

 

 

-

 

 

231

 

-

 

 

 

-

 

 

231

 

-

 

 

 

-

 

 

231

 

-

 

            Total deposits

 

 

 

4,775,396

 

 

7,298

 

0.62

%

 

 

4,772,685

 

 

7,693

 

0.64

%

 

 

4,609,633

 

 

7,602

 

0.65

%

 

 

4,679,516

 

 

7,653

 

0.66

%

 

 

4,683,165

 

 

7,353

 

0.64

%

    Borrowings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        Securities sold under agreements to repurchase

 

 

 

251,582

 

 

1,076

 

1.73

%

 

 

236,522

 

 

963

 

1.62

%

 

 

325,201

 

 

1,281

 

1.56

%

 

 

472,338

 

 

1,733

 

1.47

%

 

 

574,771

 

 

3,244

 

2.29

%

        Advances from FHLB and other borrowings

 

 

 

64,128

 

 

374

 

2.37

%

 

 

101,454

 

 

600

 

2.35

%

 

 

100,751

 

 

596

 

2.35

%

 

 

105,911

 

 

607

 

2.30

2

 

 

105,097

 

 

596

 

2.30

%

        Subordinated capital notes

 

 

 

36,083

 

 

428

 

4.81

%

 

 

36,083

 

 

406

 

4.46

%

 

 

36,083

 

 

398

 

4.38

%

 

 

36,083

 

 

384

 

4.27

%

 

 

36,083

 

 

367

 

4.12

%

            Total borrowings

 

 

 

351,793

 

 

1,878

 

2.17

%

 

 

374,059

 

 

1,969

 

2.09

%

 

 

462,035

 

 

2,275

 

1.95

%

 

 

614,332

 

 

2,724

 

1.78

%

 

 

715,951

 

 

4,207

 

2.38

%

Total interest-bearing liabilities

 

 

 $  

5,127,189

 

 $  

9,176

 

0.73

%

 

 $  

5,146,744

 

 $  

9,662

 

0.74

%

 

 $  

5,071,668

 

 $  

9,877

 

0.77

%

 

 $  

5,293,848

 

 $  

10,377

 

0.79

%

 

 $  

5,399,116

 

 $  

11,560

 

0.87

%

Interest rate spread

 

 

 

 

 

$

73,994

 

5.13

%

 

 

 

 

$

73,513

 

5.01

%

 

 

 

 

$

80,478

 

5.56

%

 

 

 

 

$

75,563

 

5.10

%

 

 

 

 

$

74,618

 

5.02

%

Net interest margin

 

 

 

 

 

 

 

 

5.22

%

 

 

 

 

 

 

 

5.08

%

 

 

 

 

 

 

 

5.64

%

 

 

 

 

 

 

 

5.18

%

 

 

 

 

 

 

 

5.10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASC 310-30 loan cost recoveries:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

          Acquired BBVAPR loans

 

 

 

 

 

$

119

 

 

 

 

 

 

 

$

199

 

 

 

 

 

 

 

$

3,220

 

 

 

 

 

 

 

$

300

 

 

 

 

 

 

 

$

245

 

 

 

          Acquired Eurobank loans

 

 

 

 

 

 

389

 

 

 

 

 

 

 

 

526

 

 

 

 

 

 

 

 

523

 

 

 

 

 

 

 

 

615

 

 

 

 

 

 

 

 

1,055

 

 

 

 

 

 

 

 

 

$

508

 

 

 

 

 

 

 

$

725

 

 

 

 

 

 

 

$

3,743

 

 

 

 

 

 

 

$

915

 

 

 

 

 

 

 

$

1,300

 

 

 

Adjusted excluding cost recoveries (Non-GAAP):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest-earning assets

 

 

$

5,751,783

 

$

82,662

 

5.83

%

 

$

5,735,593

 

$

82,450

 

5.70

%

 

$

5,658,953

 

$

86,612

 

6.07

%

 

$

5,848,525

 

$

85,025

 

5.83

%

 

$

5,932,923

 

$

84,878

 

5.80

%

Interest rate spread

 

 

 

 

 

 $  

73,486

 

5.10

%

 

 

 

 

 $  

72,788

 

4.96

%

 

 

 

 

 $  

76,735

 

5.30

%

 

 

 

 

 $  

74,648

 

5.04

%

 

 

 

 

 $  

73,318

 

4.93

%

Net interest margin

 

 

 

 

 

 

 

 

5.18

%

 

 

 

 

 

 

 

5.03

%

 

 

 

 

 

 

 

5.38

%

 

 

 

 

 

 

 

5.12

%

 

 

 

 

 

 

 

5.01

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

2018

 

2017

 

2017

 

2017

 

2017

 

(Dollars in thousands) (unaudited)

 

 

Q1

 

Q4

 

Q3

 

Q2

 

Q1

 

Net Charge-offs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

 

 

$

968

 

$

1,248

 

$

834

 

$

2,162

 

$

2,379

 

  Recoveries

 

 

 

(314)

 

 

(126)

 

 

(341)

 

 

(63)

 

 

(56)

 

      Total mortgage

 

 

 

654

 

 

1,122

 

 

493

 

 

2,099

 

 

2,323

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

 

 

 

1,149

 

 

1,260

 

 

727

 

 

4,841

(a)

 

856

 

  Recoveries

 

 

 

(182)

 

 

(401)

 

 

(654)

 

 

(136)

 

 

(89)

 

      Total commercial

 

 

 

967

 

 

859

 

 

73

 

 

4,705

 

 

767

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

 

 

 

4,258

 

 

1,849

 

 

4,424

 

 

4,012

 

 

3,358

 

  Recoveries

 

 

 

(240)

 

 

(96)

 

 

(168)

 

 

(780)

(b)

 

(165)

 

      Total consumer

 

 

 

4,018

 

 

1,753

 

 

4,256

 

 

3,232

 

 

3,193

 

Auto and Leasing:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Charge-offs

 

 

 

8,982

 

 

9,182

 

 

9,387

 

 

7,775

 

 

7,563

 

  Recoveries

 

 

 

(3,777)

 

 

(2,450)

 

 

(2,394)

 

 

(4,176)

(b)

 

(3,294)

 

      Total auto and leasing

 

 

 

5,205

 

 

6,732

 

 

6,993

 

 

3,599

 

 

4,269

 

          Total

 

 

$

10,844

 

$

10,466

 

$

11,815

 

$

13,635

 

$

10,552

 

Net Charge-off Rates

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

 

0.38%

 

 

0.65%

 

 

0.28%

 

 

1.20%

 

 

1.31%

 

Commercial

 

 

 

0.30%

 

 

0.27%

 

 

0.02%

 

 

1.50%

(a)

 

0.25%

 

Consumer

 

 

 

5.07%

 

 

2.30%

 

 

5.65%

 

 

4.42%

(b)

 

4.57%

 

Auto and Leasing

 

 

 

2.23%

 

 

3.13%

 

 

3.37%

 

 

1.79%

(b)

 

2.19%

 

          Total

 

 

 

1.34%

 

 

1.35%

 

 

1.54%

 

 

1.79%

 

 

1.40%

 

Average Loans Held For Investment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

$

683,398

 

$

688,312

 

$

692,782

 

$

698,782

 

$

711,553

 

Commercial

 

 

 

1,310,444

 

 

1,257,619

 

 

1,239,390

 

 

1,256,827

 

 

1,245,530

 

Consumer

 

 

 

317,295

 

 

304,760

 

 

301,121

 

 

292,739

 

 

279,558

 

Auto and Leasing

 

 

 

933,456

 

 

861,158

 

 

829,446

 

 

803,201

 

 

778,815

 

        Total

 

 

$

3,244,593

 

$

3,111,849

 

$

3,062,739

 

$

3,051,549

 

$

3,015,456

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) On June 30, 2017, the Company entered into an agreement for the sale of a municipality loan for $28.8 million. At June 30, 2017, this loan, which included a principal payment of $4.8 million received in July 1, 2017, was reported as other loans held for sale, at fair value.  As a result of this transaction, the Company recognized a $4.3 million charge-off during the second quarter. Proceeds were received on July 5, 2017. An allowance of $5.9 million was created during the second quarter for the remaining portfolio of municipal loans.

 

(b) During Q2 2017 , the Company had additional recoveries in auto and consumer loans of $1.1 million and $612 thousand, respectively.

 

 

 

7

 

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

2018

 

2017

 

2017

 

2017

 

2017

 

(Dollars in thousands) (unaudited)

 

 

Q1

 

Q4

 

Q3

 

Q2

 

Q1

 

Early Delinquency (30 - 89 days past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

$

29,190

 

$

17,315

 

$

35,273

 

$

32,292

 

$

30,827

 

Commercial

 

 

 

8,126

 

 

2,620

 

 

2,727

 

 

4,648

 

 

5,708

 

Consumer

 

 

 

7,478

 

 

6,149

 

 

7,504

 

 

5,495

 

 

6,024

 

Auto and Leasing

 

 

 

61,558

 

 

32,159

 

 

71,606

 

 

66,372

 

 

61,912

 

        Total

 

 

$

106,352

(a)

$

58,243

(a)

$

117,110

(a)

$

108,807

 

$

104,471

 

Early Delinquency Rates (30 - 89 days past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

 

4.28%

 

 

2.53%

 

 

5.08%

 

 

4.62%

 

 

4.34%

 

Commercial

 

 

 

0.60%

 

 

0.20%

 

 

0.22%

 

 

0.37%

 

 

0.46%

 

Consumer

 

 

 

2.23%

 

 

1.86%

 

 

2.37%

 

 

1.75%

 

 

2.01%

 

Auto and Leasing

 

 

 

6.43%

 

 

3.64%

 

 

8.61%

 

 

8.22%

 

 

7.87%

 

        Total

 

 

 

3.20%

 

 

1.82%

(a)

 

3.79%

(a)

 

3.52%

 

 

3.42%

 

Total Delinquency (30 days and over past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Traditional, Non traditional, and Loans under Loss Mitigation

 

 

$

89,252

 

$

76,542

 

$

88,936

 

$

85,908

 

$

90,849

 

    GNMA's buy-back option program

 

 

 

12,515

 

 

8,268

 

 

12,999

 

 

9,229

 

 

9,973

 

        Total mortgage

 

 

 

101,767

 

 

84,810

 

 

101,935

 

 

95,137

 

 

100,822

 

Commercial

 

 

 

21,544

 

 

18,509

 

 

18,149

 

 

18,154

 

 

15,711

 

Consumer

 

 

 

9,129

 

 

8,028

 

 

8,847

 

 

7,275

 

 

7,383

 

Auto and Leasing

 

 

 

75,152

 

 

36,391

 

 

82,437

 

 

74,577

 

 

69,622

 

        Total

 

 

$

207,592

 

$

147,738

(a)

$

211,368

(a)

$

195,143

 

$

193,538

 

Total Delinquency Rates (30 days and over past due)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Traditional, Non traditional, and Loans under Loss Mitigation

 

 

 

13.08%

 

 

11.20%

 

 

12.81%

 

 

12.29%

 

 

12.80%

 

    GNMA's buy-back option program

 

 

 

1.83%

 

 

1.21%

 

 

1.87%

 

 

1.32%

 

 

1.40%

 

        Total mortgage

 

 

 

14.91%

 

 

12.41%

 

 

14.68%

 

 

13.60%

 

 

14.20%

 

Commercial

 

 

 

1.60%

 

 

1.42%

 

 

1.46%

 

 

1.43%

 

 

1.25%

 

Consumer

 

 

 

2.73%

 

 

2.43%

 

 

2.80%

 

 

2.31%

 

 

2.46%

 

Auto and Leasing

 

 

 

7.85%

 

 

4.12%

 

 

9.92%

 

 

9.24%

 

 

8.85%

 

        Total

 

 

 

6.25%

 

 

4.61%

(a)

 

6.84%

(a)

 

6.31%

 

 

6.34%

 

Nonperforming Assets

(14)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

$

63,866

 

$

64,085

 

$

59,667

 

$

63,071

 

$

66,781

 

Commercial

 

 

 

47,044

 

 

35,253

 

 

21,701

 

 

23,519

 

 

19,387

 

Consumer

 

 

 

2,263

 

 

2,572

 

 

2,445

 

 

2,687

 

 

1,948

 

Auto and Leasing

 

 

 

13,594

 

 

4,232

 

 

11,811

 

 

8,295

 

 

8,709

 

        Total nonperforming loans

 

 

 

126,767

 

 

106,142

 

 

95,624

(a)

 

97,572

 

 

96,825

 

Foreclosed real estate

 

 

 

13,365

 

 

14,282

 

 

14,677

 

 

15,320

 

 

12,946

 

Other repossessed assets

 

 

 

5,082

 

 

3,172

 

 

3,635

 

 

2,921

 

 

2,600

 

        Total nonperforming assets

 

 

$

145,214

 

$

123,596

 

$

113,936

 

$

115,813

 

$

112,371

 

Nonperforming Loan Rates

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

 

9.36%

 

 

9.37%

 

 

8.59%

 

 

9.02%

 

 

9.41%

 

Commercial

 

 

 

3.49%

 

 

2.70%

 

 

1.74%

 

 

1.85%

 

 

1.55%

 

Consumer

 

 

 

0.68%

 

 

0.78%

 

 

0.77%

 

 

0.86%

 

 

0.65%

 

Auto and Leasing

 

 

 

1.42%

 

 

0.48%

 

 

1.42%

 

 

1.03%

 

 

1.11%

 

        Total loans

 

 

 

3.82%

 

 

3.31%

 

 

3.10%

(a)

 

3.16%

 

 

3.17%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) After Hurricane Irma and Maria on September 7, 2017 and September 20, 2017, respectively, the Company offered an automatic three-month moratorium for the payment of principal and interest for certain loans. During Q4 2017, the Company received payments on loans in moratorium, causing a decrease in delinquency.

 

 

 

8

 

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 7: Allowance for Loan and Lease Losses

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended March 31, 2018

(Dollars in thousands) (unaudited)

 

 

Mortgage

 

Commercial

 

Consumer

 

Auto

 

Total

Non-acquired loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

20,439

 

$

30,258

 

$

16,454

 

$

25,567

 

$

92,718

(Recapture) provision for loan and lease losses, net

 

 

 

(802)

 

 

3,883

 

 

5,587

 

 

6,290

 

 

14,958

Charge-offs

 

 

 

(968)

 

 

(1,149)

 

 

(4,258)

 

 

(8,982)

 

 

(15,357)

Recoveries

 

 

 

314

 

 

182

 

 

240

 

 

3,777

 

 

4,513

    Balance at end of period

 

 

$

18,983

 

$

33,174

 

$

18,023

 

$

26,652

 

$

96,832

Allowance coverage ratio

 

 

 

2.78%

 

 

2.46%

 

 

5.38%

 

 

2.78%

 

 

2.92%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired BBVAPR loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans accounted for under ASC 310-20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

 

 

 

$

42

 

$

3,225

 

$

595

 

$

3,862

(Recapture) provision for loan and lease losses, net

 

 

 

 

 

 

(8)

 

 

402

 

 

(210)

 

 

184

Charge-offs

 

 

 

 

 

 

-

 

 

(1,022)

 

 

(125)

 

 

(1,147)

Recoveries

 

 

 

 

 

 

3

 

 

54

 

 

228

 

 

285

    Balance at end of period

 

 

 

 

 

$

37

 

$

2,659

 

$

488

 

$

3,184

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired loans accounted for under ASC 310-30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

14,085

 

$

23,691

 

$

18

 

$

7,961

 

$

45,755

Provision (recapture) for loan and lease losses, net

 

 

 

314

 

 

752

 

 

-

 

 

(887)

 

 

179

Allowance de-recognition

 

 

 

(68)

 

 

(2,396)

 

 

-

 

 

(304)

 

 

(2,768)

    Balance at end of period

 

 

$

14,331

 

$

22,047

 

$

18

 

$

6,770

 

$

43,166

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired Eurobank loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

15,187

 

$

9,982

 

$

5

 

$

-

 

$

25,174

Provision (recapture) for loan and lease losses, net

 

 

 

179

 

 

(40)

 

 

-

 

 

-

 

 

139

Allowance de-recognition

 

 

 

48

 

 

49

 

 

-

 

 

-

 

 

97

    Balance at end of period

 

 

$

15,414

 

$

9,991

 

$

5

 

$

-

 

$

25,410

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total acquired loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

29,272

 

$

33,715

 

$

3,248

 

$

8,556

 

$

74,791

Provision (recapture) for loan and lease losses, net

 

 

 

493

 

 

704

 

 

402

 

 

(1,097)

 

 

502

Charge-offs

 

 

 

-

 

 

-

 

 

(1,022)

 

 

(125)

 

 

(1,147)

Recoveries

 

 

 

-

 

 

3

 

 

54

 

 

228

 

 

285

Allowance de-recognition

 

 

 

(20)

 

 

(2,347)

 

 

-

 

 

(304)

 

 

(2,671)

    Balance at end of period

 

 

$

29,745

 

$

32,075

 

$

2,682

 

$

7,258

 

$

71,760

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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, 2018

(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

 

 

$

258,498

 

$

38,057

 

$

8,707

 

$

2,766

 

$

885

 

$

308,913

Accretion

 

 

 

(7,074)

 

 

(2,454)

 

 

(1,231)

 

 

(869)

 

 

(256)

 

 

(11,884)

Change in expected cash flows

 

 

 

-

 

 

3,141

 

 

15

 

 

426

 

 

58

 

 

3,640

Transfers (to) from non-accretable discount

 

 

 

(3,046)

 

 

(488)

 

 

(36)

 

 

(597)

 

 

(38)

 

 

(4,205)

    Balance at end of period

 

 

$

248,378

 

$

38,256

 

$

7,455

 

$

1,726

 

$

649

 

$

296,464

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Accretable Discount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

299,501

 

$

3,162

 

$

7,434

 

$

23,050

 

$

19,284

 

$

352,431

Change in actual and expected cash flows

 

 

 

(1,440)

 

 

(373)

 

 

(16)

 

 

(204)

 

 

(13)

 

 

(2,046)

Transfers from (to) accretable yield

 

 

 

3,046

 

 

488

 

 

36

 

 

597

 

 

38

 

 

4,205

    Balance at end of period

 

 

$

301,107

 

$

3,277

 

$

7,454

 

$

23,443

 

$

19,309

 

$

354,590

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

$

41,474

 

$

6,751

 

$

1,447

 

$

-

 

$

-

 

$

49,672

Accretion

 

 

 

(1,605)

 

 

(1,606)

 

 

-

 

 

(34)

 

 

(96)

 

 

(3,341)

Change in expected cash flows

 

 

 

(144)

 

 

898

 

 

-

 

 

(63)

 

 

178

 

 

869

Transfers (to) from non-accretable discount

 

 

 

(103)

 

 

(427)

 

 

(91)

 

 

97

 

 

(82)

 

 

(606)

    Balance at end of period

 

 

$

39,622

 

$

5,616

 

$

1,356

 

$

-

 

$

-

 

$

46,594

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Accretable Discount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

$

4,576

 

$

276

 

$

758

 

$

-

 

$

235

 

$

5,845

Change in actual and expected cash flows

 

 

 

(200)

 

 

(703)

 

 

-

 

 

97

 

 

(98)

 

 

(904)

Transfers from (to) accretable yield

 

 

 

103

 

 

427

 

 

91

 

 

(97)

 

 

82

 

 

606

    Balance at end of period

 

 

$

4,479

 

$

-

 

$

849

 

$

-

 

$

219

 

$

5,547

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

2017

 

2017

 

2017

 

2017

(Dollars in thousands) (unaudited)

 

 

Q1

 

Q4

 

Q3

 

Q2

 

Q1

Stockholders' Equity to Non-GAAP Tangible Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

 

$

946,849

 

$

945,107

 

$

937,630

 

$

938,969

 

$

931,429

Less:  Intangible assets

 

 

 

(90,426)

 

 

(90,756)

 

 

(91,124)

 

 

(91,493)

 

 

(91,861)

           Noncumulative perpetual preferred stock

 

 

 

(176,000)

 

 

(176,000)

 

 

(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

 

 

$

690,553

 

$

688,481

 

$

680,636

 

$

681,606

 

$

673,698

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock outstanding at end of period

 

 

 

43,968

 

 

43,947

 

 

43,947

 

 

43,947

 

 

43,947

Tangible book value (Non-GAAP)

 

 

$

15.71

 

$

15.67

 

$

15.49

 

$

15.51

 

$

15.33

Total Assets to Tangible Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets  

 

 

$

6,247,121

 

$

6,189,053

 

$

6,288,217

 

$

6,235,826

 

$

6,414,607

Less:  Intangible assets

 

 

 

(90,426)

 

 

(90,756)

 

 

(91,124)

 

 

(91,493)

 

 

(91,861)

Tangible assets (Non-GAAP)

 

 

$

6,156,695

 

$

6,098,297

 

$

6,197,093

 

$

6,144,333

 

$

6,322,746

Non-GAAP TCE Ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity

 

 

$

690,553

 

$

688,481

 

$

680,636

 

$

681,606

 

$

673,698

Tangible assets

 

 

 

6,156,695

 

 

6,098,297

 

 

6,197,093

 

 

6,144,333

 

 

6,322,746

TCE ratio

 

 

 

11.22%

 

 

11.29%

 

 

10.98%

 

 

11.09%

 

 

10.66%

Average Equity to Non-GAAP Average Tangible Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total stockholders' equity

 

 

$

952,151

 

$

943,823

 

$

947,404

 

$

938,707

 

$

926,011

Less:  Average noncumulative perpetual preferred stock

 

 

 

(176,000)

 

 

(176,000)

 

 

(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

 

 

$

786,281

 

$

777,953

 

$

781,534

 

$

772,837

 

$

760,141

Less:  Average intangible assets

 

 

 

(90,624)

 

 

(90,951)

 

 

(91,331)

 

 

(91,731)

 

 

(92,102)

Average tangible common equity

 

 

$

695,657

 

$

687,002

 

$

690,203

 

$

681,106

 

$

668,039

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Metrics for Hurricanes Irma and Maria - Reconciliation to GAAP Financial Measures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

$

17,073

 

$

3,319

 

 

 

 

 

 

Plus:  Additional loan loss provision from Hurricanes Irma and Maria

 

 

 

 

 

 

5,406

 

 

27,000

 

 

 

 

 

 

Less:  Income tax effect

 

 

 

 

 

 

(2,108)

 

 

(8,038)

 

 

 

 

 

 

Adjusted net income

 

 

 

 

 

$

20,371

 

$

22,281

 

 

 

 

 

 

Less:  dividends on preferred stock

 

 

 

 

 

 

(3,465)

 

 

(3,465)

 

 

 

 

 

 

Adjusted net income available to common shareholders

 

 

 

 

 

$

16,906

 

$

18,816

 

 

 

 

 

 

Plus:  Effect of assumed conversion of the convertible preferred stock

 

 

 

 

 

 

1,838

 

 

1,838

 

 

 

 

 

 

 

 

 

 

 

 

$

18,744

 

$

20,654

 

 

 

 

 

 

Average common shares outstanding and equivalents

 

 

 

 

 

 

51,104

 

 

51,102

 

 

 

 

 

 

Adjusted earnings per common share - diluted

 

 

 

 

 

$

0.37

 

$

0.40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

 

 

 

 

 

$

20,371

 

$

22,281

 

 

 

 

 

 

Adjusted average assets

 

 

 

 

 

$

6,191,737

 

$

6,048,021

 

 

 

 

 

 

Adjusted return on average assets

 

 

 

 

 

 

1.32%

 

 

1.47%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income available to common shareholders

 

 

 

 

 

$

16,906

 

$

18,816

 

 

 

 

 

 

Adjusted average tangible common stockholders' equity

 

 

 

 

 

$

687,002

 

$

690,422

 

 

 

 

 

 

Adjusted return on average tangible common stockholders' equity

 

 

 

 

 

 

9.84%

 

 

10.90%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11

 

 

 

 

OFG Bancorp (NYSE: OFG)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

BASEL III

 

 

 

 

Standardized

 

 

 

 

2018

 

2017

 

2017

 

2017

 

2017

 

(Dollars in thousands) (unaudited)

 

 

Q1

 

Q4

 

Q3

 

Q2

 

Q1

 

Regulatory Capital Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital

 

 

$

656,293

 

$

644,804

 

$

633,401

 

$

643,606

 

$

626,707

 

Tier 1 capital

 

 

 

853,731

 

 

842,133

 

 

830,640

 

 

840,703

 

 

822,847

 

Total risk-based capital

(15)

 

 

911,726

 

 

899,258

 

 

885,523

 

 

896,926

 

 

878,867

 

Risk-weighted assets

 

 

 

4,490,057

 

 

4,420,667

 

 

4,252,605

 

 

4,391,321

 

 

4,383,517

 

Regulatory Capital Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital ratio

(16)

 

 

14.62%

 

 

14.59%

 

 

14.89%

 

 

14.66%

 

 

14.30%

 

Tier 1 risk-based capital ratio

(17)

 

 

19.01%

 

 

19.05%

 

 

19.53%

 

 

19.14%

 

 

18.77%

 

Total risk-based capital ratio

(18)

 

 

20.31%

 

 

20.34%

 

 

20.82%

 

 

20.42%

 

 

20.05%

 

Leverage ratio

(19)

 

 

14.09%

 

 

13.92%

 

 

14.07%

 

 

13.69%

 

 

13.20%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

 

$

946,849

 

$

945,107

 

$

937,630

 

$

938,969

 

$

931,429

 

Less:  Noncumulative perpetual preferred stock

 

 

 

(176,000)

 

 

(176,000)

 

 

(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

 

 

 

12,274

 

 

2,638

 

 

(1,371)

 

 

(256)

 

 

(3,849)

 

          Unrealized losses on cash flow hedges, net of income tax

 

 

 

(89)

 

 

311

 

 

529

 

 

563

 

 

501

 

 

 

 

 

793,164

 

 

782,186

 

 

770,918

 

 

773,406

 

 

762,211

 

Less:    Disallowed goodwill

 

 

 

(86,069)

 

 

(86,069)

 

 

(86,069)

 

 

(86,069)

 

 

(86,069)

 

            Disallowed other intangible assets, net

(20)

 

 

(2,126)

 

 

(2,287)

 

 

(2,466)

 

 

(2,646)

 

 

(2,826)

 

            Disallowed deferred tax assets, net

(20)

 

 

(48,676)

 

 

(49,026)

 

 

(48,982)

 

 

(41,085)

 

 

(46,609)

 

Common equity Tier 1 capital

 

 

 

656,293

 

 

644,804

 

 

633,401

 

 

643,606

 

 

626,707

 

Plus:  Qualifying noncumulative perpetual preferred stock

 

 

 

176,000

 

 

176,000

 

 

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

 

Less:  Disallowed deferred tax assets, net

 

 

 

(3,432)

 

 

(3,541)

 

 

(3,631)

 

 

(3,773)

 

 

(4,730)

 

Tier 1 capital

 

 

 

853,731

 

 

842,133

 

 

830,640

 

 

840,703

 

 

822,847

 

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

 

 

 

57,995

 

 

57,125

 

 

54,883

 

 

56,223

 

 

56,020

 

Total risk-based capital

 

 

$

911,726

 

$

899,258

 

$

885,523

 

$

896,926

 

$

878,867

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

13

 

 

 

 

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