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| 8-K - 8-K - OFG BANCORP | ofg-8KERQ22021.htm |
Exhibit 99
OFG Bancorp Reports 2Q21 Results
SAN JUAN, Puerto Rico, July 21, 2021 – OFG Bancorp (NYSE: OFG), the financial holding company for Oriental Bank, reported
results for the second quarter ended June 30, 2021.
CEO Comment
José Rafael Fernández, Chief Executive Officer, said: “We generated outstanding second quarter results. This reflects our
larger scale and our focus on digital utilization and differentiation, combined with Puerto Rico’s early economic and post-
pandemic recovery.
“The economy is clearly benefitting from a massive amount of federal reconstruction and COVID stimulus, which are more
meaningful here compared to mainland states given the size of our economy as it relates to reconstruction funds and the size
of stimulus payments compared to average income levels.
“We saw the effects of all this across all our businesses. New loan origination increased 27.7% from 1Q21 with gains in all
major categories, led by commercial and auto lending. Interest income grew 2.2% from 1Q21 as average loan balances
expanded 1.3%, excluding residential mortgage. Banking and financial services revenues rose 5.4%.
“Asset quality trends continued to improve as reconstruction and stimulus funds provided significant liquidity to businesses
and individuals. As result of this, provision for credit losses was a net benefit of $8.3 million.
“Results were enhanced by a 12.3% reduction in cost of funds compared to 1Q21 and the previously announced deployment
of excess capital to redeem all three of our outstanding series of preferred stock, eliminating $1.6 million in quarterly
dividends.
“Return on average assets and on average tangible equity expanded to 1.58% and 17.78%, respectively, compared to the
previous and year ago quarters.
“As Puerto Rico continues experiencing stronger signs of economic revival, OFG is strategically well-positioned to continue to
benefit from and play a major role in this long-awaited development. Thanks to all our team members who have been more
than ready to help our customers achieve their goals.”
2Q21 Highlights
Summary:
Earnings per share diluted was $0.78 compared to $0.56 in 1Q21 and $0.39 in 2Q20. Total core revenues were
$133.3 million compared to $127.7 million in 1Q21 and $128.2 million in 2Q20. Net interest margin was 4.22% compared to
4.26% in 1Q21 and 4.78% in 2Q20.
Total interest income
balances of commercial and auto loans and investment securities. Average loan balances were $6.60 billion compared to
$6.64 billion in 1Q21 and $6.84 billion in 2Q20.
New Loan Origination
totaled $673.6 million compared to $527.6 million in 1Q21 and $506.0 million in 2Q20. 2Q21 increased
27.7% from 1Q21 due to gains in all major categories, led by commercial and auto lending.
Total Interest Expense
from 1Q21 primarily due to lower cost of core deposits, which was 38 bps compared to 47 bps in 1Q21 and 61 bps in 2Q20.
Average customer deposit balances were $8.96 billion compared to $8.54 billion in 1Q21 and $7.85 billion in 2Q20.
Asset Quality and Provision for Credit Losses:
2Q21 reflected continued improvement in asset quality trends with the rates
for net charge offs (0.13%) and early (1.86%) and total (3.90%) delinquency at their lowest levels in five quarters. Provision
for credit losses was a net benefit of $8.3 million, resulting from $2.1 million net charge -offs and $10.4 million net reserve
releases, compared to a provision expense of $6.3 million in 1Q21 and $17.7 million in 2Q20.
Banking and Financial Services Revenues
2Q21 increased 5.4% from 1Q21 and 34.4% from 2Q20 primarily due to increased activity as pandemic related economic
restrictions have subsided.
Non-Interest Expenses
previously announced cost savings, a $2.2 million technology project write down, and higher variable expenses related to
higher revenues.
Pre-Provision Net Revenues
1Q21 and $46.7 million in 2Q20.
Capital:
Tangible book value per share was $18.13 compared to $17.39 in 1Q21 and $16.01 in 2Q20. CET1 ratio was 13.95%
compared to 13.56% in 1Q21 and 12.03% in 2Q21.
Conference Call, Financial Supplement & Presentation
A conference call to discuss 2Q21 results, outlook and related matters will be held today at 10:00 AM ET. Phone (888) 562-
3356 or (973) 582- 2700. Conference ID: 573-9736. The call can also be accessed live on
www.ofgbancorp.com.
replay will be available shortly thereafter.
OFG’s Financial Supplement, with full financial tables for the quarter ended June 30, 2021, and the 2Q21 Conference Call
Presentation, can be found on the Quarterly Results 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 SEC Regulation G, to clarify and enhance understanding of past performance and prospects
for the future. Please refer to Tables 8- 1 and 8- 2 in OFG’s above-mentioned Financial Supplement for a 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) general business and economic conditions,
including changes in interest rates; (ii) cybersecurity breaches; (iii) hurricanes, earthquakes and other natural disasters in
Puerto Rico; (iv) competition in the financial services industry; and (v) the severity, magnitude and duration of the COVID-19
pandemic, and its impact on our operations, personnel, and customers.
For a discussion of such factors and certain risks and uncertainties to which OFG is subject, please refer to OFG’s annual
report on Form 10 -K for the year ended December 31, 2020, 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 57th year in business, OFG Bancorp is a diversified financial holding company that operates under U.S., Puerto Rico
and U.S. Virgin Islands 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 and U.S. Virgin Islands. Visit us at
www.ofgbancorp.com.
# # #
Contacts
Puerto Rico & USVI:
idalis.montalvo@orientalbank.com
) at (787) 777-2847
US:
gfishman@ofgbancorp.com
) and Steven Anreder (
sanreder@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 June 30, 2021 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
2-3
Table 2:
Consolidated Statements of Operations
4-5
Table 3:
Consolidated Statements of Financial Condition
6
Table 4:
Information on Loan Portfolio and Production
7-8
Table 5:
Average Balances, Net Interest Income and Net Interest Margin
9-10
Table 6:
Loan Information and Performance Statistics
11-13
Table 7:
Allowance for Credit Losses
14
Table 8:
Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital
15-16
Table 9:
Notes to Financial Summary, Selected Metrics, Loans, and Consolidated
17
OFG Bancorp (NYSE: OFG)
Table 1-1: Financial and Statistical Summary - Consolidated
2021
2021
2020
2020
2020
(Dollars in thousands, except per share data) (unaudited)
Q2
Q1
Q4
Q3
Q2
Statement of Operations
Net interest income
$
102,257
98,204
98,738
$
99,533
$
105,060
Non-interest income, net (core)
(2)
31,048
29,452
34,047
27,486
23,106
(d)
Total core revenues
133,305
127,656
132,785
127,019
128,166
Non-interest expense
82,676
77,666
89,039
83,444
85,481
Pre-provision net revenues
(22)
51,772
50,945
44,123
47,415
46,731
Total provision for credit losses
(8,305)
(a)
6,324
14,176
13,669
17,696
(d)
Net income before income taxes
60,077
44,621
29,947
33,746
29,035
Income tax expense
19,250
14,248
6,646
6,308
7,248
Net income available to common stockholders
40,827
29,118
21,673
25,810
20,159
Common Share Statistics
Earnings (loss) per common share - basic
(3)
$
0.79
$
0.57
$
0.42
$
0.50
$
0.39
Earnings (loss) per common share - diluted
(4)
$
0.78
$
0.56
$
0.42
$
0.50
$
0.39
Average common shares outstanding
51,636
51,397
51,350
51,342
51,336
Average common shares outstanding and equivalents
52,048
51,752
51,618
51,527
51,470
Cash dividends per common share
$
0.08
$
0.08
$
0.07
$
0.07
$
0.07
Book value per common share (period end)
$
20.59
$
19.90
$
19.54
$
19.13
$
18.69
Tangible book value per common share (period end)
(5)
$
18.13
$
17.39
$
16.97
$
16.51
$
16.01
Balance Sheet (Average Balances)
Loans
(6)
$
6,598,569
$
6,635,908
$
6,708,284
$
6,787,022
$
6,840,650
Interest-earning assets
9,726,905
9,358,377
9,270,739
9,218,717
8,845,744
Total assets
10,356,879
10,004,047
9,921,254
9,918,381
9,512,129
Core deposits
8,963,336
8,535,678
8,451,308
8,376,623
7,852,495
Total deposits
8,997,842
8,581,633
8,515,646
8,517,039
8,088,106
Interest-bearing deposits
6,392,219
6,223,419
6,199,929
6,240,639
6,105,014
Borrowings
99,950
100,951
101,930
102,916
157,669
Stockholders' equity
1,083,452
1,101,046
1,083,423
1,062,460
1,037,195
Common stockholders' equity
1,046,835
1,019,176
1,001,553
980,590
955,325
Performance Metrics
Net interest margin
(7)
4.22%
4.26%
4.24%
4.30%
4.78%
Return on average assets
(8)
1.58%
1.21%
0.94%
1.11%
0.92%
Return on average tangible common stockholders' equity
(9)
17.78%
13.11%
9.99%
12.23%
9.88%
Efficiency ratio
(10)
62.02%
60.84%
67.06%
65.69%
66.70%
Full-time equivalent employees, period end
2,231
2,238
2,275
2,332
2,373
Credit Quality Metrics
(1)(21)
Allowance for credit losses
$
191,717
$
201,973
$
204,809
$
235,313
$
232,701
Allowance as a % of loans held for investment
2.95%
(a)
3.06%
3.07%
(c)
3.48%
3.35%
Net charge-offs
$
2,118
$
9,105
$
44,814
$
10,570
$
15,750
Net charge-off rate
(11)
0.13%
(a)
0.55%
2.67%
(c)
0.62%
0.92%
Early delinquency rate (30 - 89 days past due)
1.86%
2.15%
2.68%
2.50%
2.64%
Total delinquency rate (30 days and over)
3.90%
(a)
4.65%
5.74%
5.67%
5.56%
Capital Ratios (Non-GAAP)
(12)(20)
Leverage ratio
9.84%
(b)
10.48%
10.30%
10.00%
10.16%
Common equity Tier 1 capital ratio
13.95%
13.56%
13.08%
12.55%
12.03%
Tier 1 risk-based capital ratio
14.70%
(b)
15.28%
14.78%
14.25%
13.71%
Total risk-based capital ratio
15.95%
16.54%
16.04%
15.50%
14.96%
Tangible common equity ("TCE") ratio
9.06%
8.95%
9.00%
8.58%
8.39%
(a) During 2Q 2021 asset quality trends continued to improve.
(b) During 2Q 2021, the Company redeemed Series A and B Preferred Stock.
(c) During 4Q 2020, the Company charged-off $31.2 million for two commercial PCD loans.
(d) During 2Q 2020, the Company increased its provision for credit losses by $5 million as a result of the Covid-19 pandemic. Core revenues were also negatively impacted by the
pandemic during this quarter as a result of lockdown measures by the local Government.
2
OFG Bancorp (NYSE: OFG)
Table 1-2: Financial and Statistical Summary - Consolidated (Continued)
2021
2020
(Dollars in thousands, except per share data) (unaudited)
YTD
YTD
Statement of Operations
Net interest income
200,461
210,161
Non-interest income, net (core)
(2)
60,500
49,339
(b)
Total core revenues
260,961
259,500
Non-interest expense
160,342
172,803
Pre-provision net revenues
(22)
102,717
95,960
Total provision for credit losses
(1,981)
(a)
64,827
(b)
Net income before income taxes
104,698
31,133
Income tax expense
33,498
7,545
Net income available to common stockholders
69,945
20,332
Common Share Statistics
Earnings (loss) per common share - basic
(3)
$
1.36
$
0.40
Earnings (loss) per common share - diluted
(4)
$
1.35
$
0.39
(b)
Average common shares outstanding
51,517
51,370
Average common shares outstanding and equivalents
51,885
51,584
Cash dividends per common share
$
0.16
$
0.14
Book value per common share (period end)
$
20.59
$
18.69
Tangible book value per common share (period end)
(5)
$
18.13
$
16.01
Balance Sheet (Average Balances)
Loans
(6)
$
6,617,002
$
6,764,263
Interest-earning assets
9,543,525
8,701,083
Total assets
10,181,437
9,419,378
Core deposits
8,750,551
7,684,466
Total deposits
8,790,750
7,920,275
Interest-bearing deposits
6,308,286
6,079,247
Borrowings
100,448
214,735
Stockholders' equity
1,092,201
1,040,338
Common stockholders' equity
1,033,083
958,468
Performance Metrics
Net interest margin
(7)
4.24%
4.84%
Return on average assets
(8)
1.40%
0.50%
(b)
Return on average tangible common stockholders' equity
(9)
15.48%
4.97%
Efficiency ratio
(10)
61.44%
66.59%
Full-time equivalent employees, period end
2,231
2,373
Credit Quality Metrics
(1)(21)
Allowance for loan and lease losses
$
191,717
$
232,701
Allowance as a % of loans held for investment
2.95%
(a)
3.35%
Net charge-offs
$
11,223
$
39,784
Net charge-off rate
(11)
0.34%
(a)
1.18%
Early delinquency rate (30 - 89 days past due)
1.86%
2.64%
Total delinquency rate (30 days and over)
3.90%
(a)
5.56%
(a) During 2Q 2021 asset quality trends continued to improve.
(b) During 1Q 2020 and 2Q2020, the Company increased its provision for credit losses by $34.1 million and $5 million, respectively, as a result of the Covid-19 pandemic. Core
revenues were also negatively impacted by the pandemic during these quarters as a result of lockdown measures by the local Government.
3
OFG Bancorp (NYSE: OFG)
Table 2-1: Consolidated Statements of Operations
Quarter Ended
June 30,
March 31,
December 31,
September 30,
June 30,
(Dollars in thousands, except per share data) (unaudited)
2021
2021
2020
2020
2020
Interest income:
Loans
(1)
$
85,181
$
82,936
$
81,171
$
83,029
$
83,832
24,880
25,275
29,250
29,018
34,700
(d)
110,061
108,211
110,421
112,047
118,532
Investment securities
3,402
2,771
2,600
2,890
3,160
113,463
110,982
113,021
114,937
121,692
Interest expense:
Deposits
10,436
11,861
13,225
13,808
13,999
24
163
288
812
1,446
10,460
12,024
13,513
14,620
15,445
Borrowings
746
754
770
784
1,187
11,206
12,778
14,283
15,404
16,632
Net interest income
102,257
98,204
98,738
99,533
105,060
(Recapture) provision for credit losses, excluding PCD loans
(1)
(7,726)
2,998
15,464
13,845
15,227
(Recapture) provision for credit losses on PCD loans
(579)
3,326
(1,288)
(176)
2,469
(8,305)
(a)
6,324
14,176
13,669
17,696
(f)
110,562
91,880
84,562
85,864
87,364
Non-interest income:
Banking service revenues
18,248
16,493
16,901
16,297
13,668
Wealth management revenues
8,263
7,388
10,865
(c)
7,272
6,366
Mortgage banking activities
4,537
5,571
6,281
3,917
3,072
31,048
29,452
34,047
27,486
23,106
(f)
Bargain purchase from Scotiabank PR & USVI acquisition
-
-
-
3,465
3,462
Other income, net
1,143
955
377
375
584
32,191
30,407
34,424
31,326
27,152
Non-interest expense:
Compensation and employee benefits
32,919
32,618
30,921
31,955
34,506
Occupancy, equipment and infrastructure costs
12,528
13,128
12,064
11,943
11,837
General and administrative expenses
35,370
(b)
30,201
33,454
33,452
31,181
Credit related expenses
328
(50)
1,004
1,323
2,918
Merger and restructuring charges
-
-
10,092
2,681
3,006
COVID 19 expenses
1,531
1,769
1,504
2,090
2,033
82,676
77,666
89,039
83,444
85,481
Income before income taxes
60,077
44,621
29,947
33,746
29,035
Income tax expense
19,250
14,248
6,646
6,308
7,248
Net income
40,827
30,373
23,301
27,438
21,787
Less: dividends on preferred stock
-
(1,255)
(1,628)
(1,628)
(1,628)
Net income available to common shareholders
$
40,827
$
29,118
$
21,673
$
25,810
$
20,159
(a) During 2Q 2021, asset quality trends continued to improve.
(b) During 2Q 2021, includes a technology project write-down amounting to $2.2 million.
(c) During 4Q 2020, the Company recognized annual insurance contingent commissions amounting to $4.0 million.
(d) During 2Q 2020, the Company recognized interest recoveries on SOP loans acquired in the Scotiabank PR & USVI acquisition collected subsequently to the acquisition date
amounting to $6.0 million.
(e) During 2Q 2020 and 3Q2020, the Company increased the Bargain purchase from Scotiabank PR & USVI acquisition by $3.5 million and $3.5 million, respectively, as part of
remeasurement period adjustments.
(f) During 2Q2020, the Company increased its provision for credit losses by $5 million as a result of the Covid-19 pandemic. Core revenues were also negatively impacted by the
pandemic during these quarters as a result of lockdown measures by the local Government.
(g) On December 31, 2019, the Company acquired Scotiabank's Puerto Rico and USVI operations, incurring in merger and restructuring charges of $3.0 million during 2Q 2020, $2.7
million during 3Q 2020, and $10.1 million during 4Q 2020.
4
OFG Bancorp (NYSE: OFG)
Table 2-2: Consolidated Statements of Operations (Continued)
Six-Months Ended
June 30,
June 30,
(Dollars in thousands, except per share data) (unaudited)
2021
2020
Interest income:
Loans
(1)
$
168,117
$
171,315
50,155
63,652
(b)
218,272
234,967
Investment securities
6,173
10,422
224,445
245,389
Interest expense:
Deposits
22,297
29,033
187
3,032
22,484
32,065
Borrowings
1,500
3,163
23,984
35,228
Net interest income
200,461
210,161
(Recapture) provision for credit losses, excluding PCD loans
(1)
(4,728)
56,178
Provision for credit losses on PCD loans
2,747
8,649
(1,981)
(a)
64,827
(c)
202,442
145,334
Non-interest income:
Banking service revenues
34,741
29,381
Wealth management revenues
15,651
13,652
Mortgage banking activities
10,108
6,306
60,500
49,339
(c)
Bargain purchase from Scotiabank PR & USVI acquisition
-
3,872
(d)
Other income, net
2,098
5,391
62,598
58,602
Non-interest expense:
Compensation and employee benefits
65,537
70,050
Occupancy, equipment and infrastructure costs
25,656
23,276
General and administrative expenses
65,571
68,526
Foreclosed real estate and other repossessed assets expenses
278
5,440
Merger and restructuring charges
-
3,310
COVID 19 expenses
3,300
2,201
160,342
172,803
Income before income taxes
104,698
31,133
Income tax expense
33,498
7,545
Net income
71,200
23,588
Less: dividends on preferred stock
(1,255)
(3,256)
Net income available to common shareholders
$
69,945
$
20,332
(a) During 2Q 2021 asset quality trends continued to improve.
(b) During 2Q 2020, the Company recognized interest recoveries on SOP loans acquired in the Scotiabank PR & USVI acquisition collected subsequently to the acquisition date
amounting to $6.0 million.
(c) During 1Q 2020 and 2Q2020, the Company increased its provision for credit losses by $34.1 million and $5 million, respectively, as a result of the Covid-19 pandemic. Core
revenues were also negatively impacted by the pandemic during these quarters as a result of lockdown measures by the local Government.
(d) During 2Q 2020, the Company increased the Bargain purchase from Scotiabank PR & USVI acquisition by $3.5 million as part of remeasurement period adjustments.
(e) On December 31, 2019, the Company acquired Scotiabank's Puerto Rico and USVI operations, incurring in merger and restructuring charges of $3.0 million during 2Q 2020.
5
OFG Bancorp (NYSE: OFG)
Table 3: Consolidated Statements of Financial Condition
June 30,
March 31,
December 31,
September 30,
June 30,
(Dollars in thousands) (unaudited)
2021
2021
2020
2020
2020
Cash and cash equivalents
$
2,767,693
$
2,409,416
$
2,155,577
$
2,283,050
$
1,900,037
Investments:
Trading securities
29
23
22
22
22
Investment securities available-for-sale, at fair value,
487,014
457,673
432,935
329,719
340,192
10,910
10,946
10,983
91,531
197,340
3,695
2,390
2,520
2,565
2,707
501,619
471,009
446,438
423,815
540,239
Mortgage-backed securities held-to-maturity, at amortized cost,
no allowance for credit losses for any period
125,138
126,767
-
-
-
Federal Home Loan Bank (FHLB) stock, at cost
7,541
8,233
8,278
8,322
8,366
Other investments
9,168
5,557
3,962
2,205
1,076
643,495
611,589
458,700
434,364
549,703
Loans, net
6,354,040
6,432,079
6,501,259
6,579,140
6,739,243
Other assets:
Prepaid expenses
61,678
58,348
61,416
54,583
40,119
Deferred tax asset, net
144,799
154,540
162,478
178,957
186,730
Foreclosed real estate and repossessed properties
16,818
18,366
13,412
21,374
26,152
Premises and equipment, net
85,993
83,756
83,786
83,270
82,234
Goodwill
86,069
86,069
86,069
86,069
86,069
Right of use assets
32,621
32,714
31,383
35,900
34,692
Core deposit, customer relationship intangible and other intangibles
40,995
43,445
45,896
48,650
51,406
Servicing asset
47,712
47,911
47,295
47,242
47,926
Accounts receivable and other assets
179,900
175,109
178,740
166,392
188,408
Total assets
$
10,461,813
$
10,153,342
$
9,826,011
$
10,018,991
$
9,932,719
Deposits:
Demand deposits
$
5,329,429
$
4,885,311
$
4,613,309
$
4,682,991
$
4,370,419
Savings accounts
2,285,558
(a)
2,142,573
1,920,325
1,919,859
1,978,118
Time deposits
1,464,134
1,693,924
1,832,891
1,933,517
1,975,223
Brokered deposits
11,371
(a)
34,954
49,115
96,090
218,166
9,090,492
8,756,762
8,415,640
8,632,457
8,541,926
Borrowings:
Advances from FHLB and other borrowings
63,867
65,013
66,268
66,781
68,340
Subordinated capital notes
36,083
36,083
36,083
36,083
36,083
99,950
101,096
102,351
102,864
104,423
Other liabilities:
Derivative liabilities
1,293
1,465
1,712
1,895
2,078
Acceptances outstanding
27,703
24,389
33,349
18,291
20,034
Lease liability
34,052
34,017
32,566
37,029
35,694
Accrued expenses and other liabilities
128,326
127,190
154,418
162,133
187,280
9,381,816
9,044,919
8,740,036
8,954,669
8,891,435
Stockholders' equity:
Preferred stock
24,000
92,000
92,000
92,000
92,000
Common stock
59,885
59,885
59,885
59,885
59,885
Additional paid-in capital
626,995
622,935
622,652
621,978
621,860
Legal surplus
110,235
106,165
103,269
101,233
98,347
Retained earnings
352,001
322,202
300,096
284,053
264,725
Treasury stock, at cost
(100,719)
(100,994)
(102,949)
(103,095)
(103,121)
Accumulated other comprehensive income, net
7,600
6,230
11,022
8,268
7,588
1,079,997
1,108,423
1,085,975
1,064,322
1,041,284
10,461,813
10,153,342
9,826,011
10,018,991
9,932,719
(a) During 2Q 2021, money market deposit accounts amounting to $23.8 million were reclassified from brokered deposits to savings account, as a result of an FDIC exemption from
the brokered deposit definition.
(b) During 2Q 2021, the Company redeemed Series A and B Preferred Stock.
6
OFG Bancorp (NYSE: OFG)
Table 4-1: Information on Loan Portfolio and
Production
June 30,
March 31,
December 31,
September 30,
June 30,
(Dollars in thousands) (unaudited)
2021
2021
2020
2020
2020
Non-PCD:
(1)
$
760,168
$
791,062
$
823,443
$
847,671
$
874,286
1,903,866
1,827,102
1,836,137
1,785,022
1,918,424
(23)
228,677
311,823
282,713
289,218
278,059
381,475
395,073
413,552
434,546
458,714
1,618,788
1,565,473
1,534,269
1,511,829
1,454,987
4,892,974
4,890,533
4,890,114
4,868,286
4,984,470
(148,314)
(156,978)
(161,015)
(156,409)
(151,507)
4,744,660
4,733,555
4,729,099
4,711,877
4,832,963
PCD:
(1)
1,324,274
1,406,044
1,459,932
1,504,914
1,541,637
260,627
272,793
283,160
(a)
352,555
386,046
981
1,120
1,394
2,336
2,950
19,236
23,036
27,533
31,836
37,409
1,605,118
1,702,993
1,772,019
1,891,641
1,968,042
(1)
(43,403)
(44,995)
(43,794)
(a)
(78,904)
(81,194)
1,561,715
1,657,998
1,728,225
1,812,737
1,886,848
Total loans held for investment
6,306,375
6,391,553
6,457,324
6,524,614
6,719,811
Mortgage loans held for sale
37,885
38,220
41,654
54,526
19,432
Other loans held for sale
9,780
2,306
2,281
-
-
Total loans, net
$
6,354,040
$
6,432,079
$
6,501,259
$
6,579,140
$
6,739,243
Loan Portfolio Summary:
$
2,084,442
$
2,197,106
$
2,283,375
$
2,352,585
$
2,415,923
2,164,493
2,099,895
2,119,297
(a)
2,137,577
2,304,470
(23)
228,677
311,823
282,713
289,218
278,059
382,456
396,193
414,946
436,882
461,664
1,638,024
1,588,509
1,561,802
1,543,665
1,492,396
6,498,092
6,593,526
6,662,133
6,759,927
6,952,512
(191,717)
(201,973)
(204,809)
(a)
(235,313)
(232,701)
6,306,375
6,391,553
6,457,324
6,524,614
6,719,811
37,885
38,220
41,654
54,526
19,432
9,780
2,306
2,281
-
-
Total loans, net
$
6,354,040
$
6,432,079
$
6,501,259
$
6,579,140
$
6,739,243
(a) During 4Q 2020, the Company charged-off $31.2 million for two commercial PCD loans.
7
OFG Bancorp (NYSE: OFG)
Table 4-2: Information on
Loan Portfolio and
Production
Quarter Ended
Six-Months Ended
June 30,
March 31,
December 31,
September 30,
June 30,
June 30,
June 30,
(Dollars in thousands) (unaudited)
2021
2021
2020
2020
2020
2021
2020
Loan production
(13)
$
103,837
$
95,851
$
97,656
$
93,650
$
23,744
$
199,688
$
54,731
218,425
83,820
174,894
83,488
98,558
302,245
152,671
32,712
126,266
-
10,318
286,420
158,978
286,420
109,522
44,841
49,221
90,878
35,711
154,363
82,836
38,038
27,492
25,984
23,540
14,231
65,530
53,431
171,104
149,357
137,545
155,880
47,374
320,461
156,718
$
673,638
$
527,627
$
485,300
$
457,754
$
506,038
$
1,201,265
$
786,807
8
OFG Bancorp (NYSE: OFG)
Table 5-1: Average Balances, Net Interest Income and Net Interest Margin
2021 Q2
2021 Q1
2020 Q4
2020 Q3
2020 Q2
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:
$
2,519,406
$
706
0.11
%
$
2,204,431
$
595
0.11
%
$
2,091,458
$
613
0.12
%
$
1,929,024
$
613
0.13
%
$
1,393,187
$
359
0.10
%
608,930
2,696
1.77
%
518,038
2,176
1.68
%
470,997
1,986
1.69
%
502,671
2,278
1.81
%
611,907
2,801
1.83
%
(1)
4,937,602
85,181
6.92
%
4,893,874
82,936
6.87
%
4,863,902
81,171
6.64
%
4,870,753
83,029
6.78
%
4,857,281
83,832
6.94
%
1,660,967
24,880
5.99
%
1,742,034
25,275
5.80
%
1,844,382
29,250
6.34
%
1,916,269
29,018
6.06
%
1,983,369
34,700
7.00
%
6,598,569
110,061
6.69
%
6,635,908
108,211
6.61
%
6,708,284
110,421
6.55
%
6,787,022
112,047
6.57
%
6,840,650
118,532
6.97
%
Total interest-earning assets
$
9,726,905
$
113,463
4.68
%
$
9,358,377
$
110,982
4.81
%
$
9,270,739
$
113,020
4.85
%
$
9,218,717
$
114,938
4.96
%
$
8,845,744
$
121,692
5.53
%
Interest bearing liabilities:
$
2,542,018
$
2,259
0.36
%
$
2,397,673
$
2,393
0.40
%
$
2,344,903
$
2,258
0.38
%
$
2,227,687
$
2,247
0.40
%
$
2,069,247
$
2,138
0.42
%
2,236,281
2,097
0.38
%
2,003,963
2,124
0.43
%
1,897,618
1,954
0.41
%
1,927,680
2,010
0.41
%
1,809,517
1,976
0.44
%
1,579,414
4,243
1.08
%
1,775,828
5,507
1.24
%
1,893,070
6,975
1.47
%
1,944,856
7,512
1.54
%
1,990,639
7,835
1.58
%
34,506
24
0.28
%
45,955
163
1.44
%
64,338
289
1.78
%
140,416
812
2.30
%
235,611
1,446
2.47
%
6,392,219
8,623
0.54
%
6,223,419
10,187
0.66
%
6,199,929
11,476
0.74
%
6,240,639
12,581
0.80
%
6,105,014
13,395
0.88
%
2,605,623
-
-
2,358,214
-
-
2,315,717
-
-
2,276,400
-
-
1,983,092
-
-
core deposit intangible amortization
-
1,837
-
-
1,837
-
-
2,037
-
-
2,039
-
-
2,050
-
8,997,842
10,460
0.47
%
8,581,633
12,024
0.56
%
8,515,646
13,513
0.63
%
8,517,039
14,620
0.68
%
8,088,106
15,445
0.77
%
repurchase
-
-
-
%
-
-
-
%
-
-
-
%
-
-
-
%
46,154
335
2.91
%
borrowings
63,867
452
2.84
%
64,868
459
2.87
%
65,847
468
2.83
%
66,833
476
2.83
%
75,432
505
2.69
%
36,083
294
3.27
%
36,083
295
3.31
%
36,083
301
3.34
%
36,083
308
3.39
%
36,083
347
3.87
%
99,950
746
2.99
%
100,951
754
3.03
%
101,930
769
3.01
%
102,916
784
3.03
%
157,669
1,187
3.03
%
Total interest-bearing liabilities
$
9,097,792
$
11,206
0.49
%
$
8,682,584
$
12,778
0.60
%
$
8,617,576
$
14,282
0.66
%
$
8,619,955
$
15,404
0.71
%
$
8,245,775
$
16,632
0.81
%
Interest rate spread
$
102,257
4.19
%
$
98,204
4.21
%
$
98,738
4.19
%
$
99,534
4.25
%
$
105,060
4.72
%
Net interest margin
4.22
%
4.26
%
4.24
%
4.30
%
4.78
%
Core deposits: (Non-GAAP)
$
2,542,018
$
2,259
0.36
%
$
2,397,673
$
2,393
0.40
%
$
2,344,903
$
2,258
0.38
%
$
2,227,687
$
2,247
0.40
%
$
2,069,247
$
2,138
0.42
%
2,236,281
2,097
0.38
%
2,003,963
2,124
0.43
%
1,897,618
1,954
0.41
%
1,927,680
2,010
0.41
%
1,809,517
1,976
0.44
%
1,579,414
4,243
1.08
%
1,775,828
5,507
1.24
%
1,893,070
6,975
1.47
%
1,944,856
7,512
1.54
%
1,990,639
7,835
1.58
%
6,357,713
8,599
0.54
%
6,177,464
10,024
0.66
%
6,135,591
11,187
0.73
%
6,100,223
11,769
0.77
%
5,869,403
11,949
0.82
%
2,605,623
-
-
2,358,214
-
-
2,315,717
-
-
2,276,400
-
-
1,983,092
-
-
$
8,963,336
$
8,599
0.38
%
$
8,535,678
$
10,024
0.47
%
$
8,451,308
$
11,187
0.53
%
$
8,376,623
$
11,769
0.56
%
$
7,852,495
$
11,949
0.61
%
9
OFG Bancorp (NYSE: OFG)
Table 5-2: Average Balances, Net Interest Income and Net Interest Margin (Continued)
2021 YTD
2020 YTD
Interest
Interest
Average
Income/
Yield/
Average
Income/
Yield/
(Dollars in thousands) (unaudited)
Balance
Expense
Rate
Balance
Expense
Rate
Interest earning assets:
$
2,362,788
$
1,301
0.11
%
$
1,168,384
$
3,147
0.54
%
563,735
4,872
1.73
%
768,436
7,275
1.89
%
4,915,722
168,117
6.90
%
4,735,580
171,315
7.26
%
1,701,280
50,155
5.90
%
2,028,683
63,652
6.28
%
6,617,002
218,272
6.65
%
6,764,263
234,967
6.97
%
Total interest-earning assets
$
9,543,525
$
224,445
4.74
%
$
8,701,083
$
245,389
5.66
%
Interest bearing liabilities:
$
2,470,244
$
4,652
0.38
%
$
2,024,876
$
4,525
0.45
%
2,120,764
4,220
0.40
%
1,803,587
4,416
0.49
%
1,677,079
9,748
1.17
%
2,014,975
15,967
1.59
%
40,199
187
0.94
%
235,809
3,032
2.58
%
6,308,286
18,807
0.60
%
6,079,247
27,940
0.92
%
2,482,464
-
-
1,841,028
-
-
%
-
3,677
-
-
4,125
-
8,790,750
22,484
0.52
%
7,920,275
32,065
0.81
%
Borrowings
-
-
-
%
102,308
1,335
2.62
%
64,365
912
2.86
%
76,344
1,045
2.74
%
36,083
588
3.29
%
36,083
783
4.35
%
100,448
1,500
3.01
%
214,735
3,163
2.95
%
Total interest-bearing liabilities
$
8,891,198
$
23,984
0.54
%
$
8,135,010
$
35,228
0.87
%
Interest rate spread
$
200,461
4.20
%
$
210,161
4.79
%
Net interest margin
4.24
%
4.84
%
Core deposits: (Non-GAAP)
$
2,470,244
$
4,652
0.38
%
$
2,024,876
$
4,525
0.45
%
2,120,764
4,220
0.40
%
1,803,587
4,416
0.49
%
1,677,079
9,748
1.17
%
2,014,975
15,967
1.59
%
6,268,087
18,620
0.60
%
5,843,438
24,908
0.85
%
2,482,464
-
-
%
1,841,028
-
-
%
$
8,750,551
$
18,620
0.43
%
$
7,684,466
$
24,908
0.65
%
10
OFG Bancorp (NYSE: OFG)
Table 6-1: Loan Information and Performance Statistics (1)
2021
2021
2020
2020
2020
(Dollars in thousands) (unaudited)
Q2
Q1
Q4
Q3
Q2
Net Charge-offs
(21)
Non-PCD
Mortgage:
$
268
$
787
$
225
$
56
$
185
(193)
(615)
(79)
(269)
(9)
75
173
146
(213)
176
Commercial:
653
68
413
298
497
(996)
(430)
(334)
(253)
(631)
(343)
(363)
79
45
(134)
Consumer:
2,897
4,469
6,456
5,114
4,187
(697)
(565)
(1,832)
(663)
(443)
2,200
3,903
4,624
4,451
3,744
Auto:
5,170
9,083
12,071
10,123
13,300
(5,997)
(5,817)
(5,928)
(5,950)
(3,405)
(827)
3,266
6,143
4,173
9,895
$
1,105
$
6,980
$
10,992
$
8,456
$
13,681
PCD
Mortgage:
$
1,742
$
2,590
$
1,344
$
1,677
$
2,178
(184)
(146)
(63)
(89)
(580)
1,558
2,444
1,281
1,588
1,598
Commercial:
6
43
33,061
(a)
293
386
(430)
(436)
(234)
(91)
(286)
(424)
(393)
32,827
202
100
Consumer:
-
22
21
60
30
(33)
(21)
(200)
1
(30)
(33)
1
(179)
61
-
Auto:
226
456
574
474
600
(314)
(383)
(681)
(211)
(229)
(88)
73
(107)
263
371
$
1,013
$
2,125
33,822
2,114
2,069
Total Net Charge-offs
$
2,118
$
9,105
$
44,814
$
10,570
$
15,750
Net Charge-off Rates
(21)
Mortgage
0.30%
0.47%
0.25%
0.24%
0.30%
Commercial
-0.13%
-0.13%
5.45%
(a)
0.04%
-0.01%
Consumer
2.17%
3.78%
4.09%
3.94%
3.12%
Auto
-0.23%
0.85%
1.56%
1.17%
2.72%
0.13%
0.55%
2.67%
0.62%
0.92%
Average Loans Held For Investment
(21)
Mortgage
$
2,147,927
$
2,243,303
$
2,305,495
$
2,325,756
$
2,366,600
Commercial
2,443,407
2,405,419
2,416,703
2,484,977
2,484,573
Consumer
400,365
413,191
434,565
457,620
479,957
Auto
1,606,870
1,573,995
1,551,521
1,518,669
1,509,521
$
6,598,569
$
6,635,908
$
6,708,284
$
6,787,022
$
6,840,651
(a) During 4Q 2020, the Company charged-off $31.2 million for two commercial PCD loans.
11
OFG Bancorp (NYSE: OFG)
Table 6-2: Loan Information and Performance Statistics (Excludes PCD Loans) (1)
2021
2021
2020
2020
2020
(Dollars in thousands) (unaudited)
Q2
Q1
Q4
Q3
Q2
Early Delinquency (30 - 89 days past due)
Mortgage
$
15,512
$
17,350
$
22,339
$
16,783
$
15,665
Commercial
3,715
3,911
8,043
5,151
7,704
Consumer
5,929
8,250
12,230
12,032
18,254
Auto
66,068
75,449
88,357
87,912
89,825
$
91,224
$
104,960
$
130,969
$
121,878
$
131,448
Early Delinquency Rates (30 - 89 days past due)
Mortgage
2.04%
2.19%
2.71%
1.98%
1.79%
Commercial
0.20%
0.21%
0.44%
0.29%
0.40%
Consumer
1.55%
2.09%
2.96%
2.77%
3.98%
Auto
4.08%
4.82%
5.76%
5.81%
6.17%
1.86%
2.15%
2.68%
2.50%
2.64%
Total Delinquency (30 days and over past due)
Mortgage:
$
59,848
$
62,827
$
67,671
$
51,123
$
40,719
28,118
40,777
56,193
62,651
75,091
87,966
103,604
123,864
113,774
115,810
Commercial
21,549
26,065
30,604
35,596
38,258
Consumer
8,244
11,042
17,147
17,080
22,796
Auto
73,259
86,918
108,842
109,735
100,027
$
191,018
$
227,629
$
280,457
$
276,185
$
276,891
Total Delinquency Rates (30 days and over past due)
Mortgage:
7.87%
7.94%
8.22%
6.03%
4.66%
3.70%
5.15%
6.82%
7.39%
8.59%
11.57%
13.10%
15.04%
13.42%
13.25%
Commercial
1.13%
1.43%
1.67%
1.99%
1.99%
Consumer
2.16%
2.79%
4.15%
3.93%
4.97%
Auto
4.53%
5.55%
7.09%
7.26%
6.87%
3.90%
4.65%
5.74%
5.67%
5.56%
Nonperforming Assets
(14)
Mortgage
$
52,773
$
50,933
$
46,967
$
40,477
$
30,491
Commercial
37,858
42,778
41,999
44,941
44,187
Consumer
2,466
2,900
4,987
5,206
4,933
Auto
7,606
11,842
20,766
22,583
10,539
100,703
108,453
114,719
113,207
90,150
Foreclosed real estate
15,093
15,598
11,596
19,456
24,792
Other repossessed assets
1,725
2,768
1,816
1,918
1,360
$
117,521
$
126,819
$
128,131
$
134,581
$
116,302
Nonperforming Loan Rates
Mortgage
6.94%
6.44%
5.70%
4.78%
3.49%
Commercial
1.99%
2.34%
2.29%
2.52%
2.30%
Consumer
0.65%
0.73%
1.21%
1.20%
1.08%
Auto
0.47%
0.76%
1.35%
1.49%
0.72%
2.06%
2.22%
2.35%
2.33%
1.81%
12
OFG Bancorp (NYSE: OFG)
Table 6-3: Loan Information and Performance Statistics (1)
2021
2021
2020
2020
2020
(Dollars in thousands) (unaudited)
Q2
Q1
Q4
Q3
Q2
Nonperforming PCD Loans
(14)
Mortgage
$
2,067
$
958
$
1,003
$
1,003
$
1,373
Commercial
34,502
34,906
36,470
(a)
79,631
81,064
Consumer
-
-
1
4
12
$
36,569
$
35,864
$
37,474
$
80,638
$
82,449
Nonperforming PCD Loan Rates
Mortgage
0.16%
0.07%
0.07%
0.07%
0.09%
Commercial
13.24%
12.80%
12.88%
(a)
22.59%
21.00%
Consumer
0.00%
0.00%
0.07%
0.17%
0.41%
2.28%
2.11%
2.11%
(a)
4.26%
4.19%
Total PCD Loans Held for Investment
(21)
Mortgage
$
1,324,274
$
1,406,044
$
1,459,932
$
1,504,914
$
1,541,637
Commercial
260,627
272,793
283,160
352,555
386,046
Consumer
981
1,120
1,394
2,336
2,950
$
1,585,882
$
1,679,957
$
1,744,486
$
1,859,805
$
1,930,633
2021
2021
2020
2020
2020
(Dollars in thousands) (unaudited)
Q2
Q1
Q4
Q3
Q2
Total Nonperforming Loans
(14)
Mortgage
$
54,840
$
51,891
$
47,970
$
41,480
$
31,864
Commercial
72,360
77,684
78,469
(a)
124,572
125,251
Consumer
2,466
2,900
4,988
5,210
4,945
Auto
7,606
11,842
20,766
22,583
10,539
$
137,272
$
144,317
$
152,193
$
193,845
$
172,599
Total Nonperforming Loan Rates
Mortgage
2.63%
2.36%
2.10%
1.76%
1.32%
Commercial
3.02%
3.22%
3.27%
(a)
5.13%
4.85%
Consumer
0.64%
0.73%
1.20%
1.19%
1.07%
Auto
0.46%
0.75%
1.33%
1.46%
0.71%
2.11%
2.19%
2.28%
(a)
2.87%
2.48%
Total Loans Held for Investment
(21)
Mortgage
$
2,084,442
$
2,197,106
$
2,283,375
$
2,352,585
$
2,415,923
Commercial
2,393,170
2,411,718
2,402,010
2,426,795
2,582,529
Consumer
382,456
396,193
414,946
436,882
461,664
Auto
1,638,024
1,588,509
1,561,802
1,543,665
1,492,396
$
6,498,092
$
6,593,526
$
6,662,133
$
6,759,927
$
6,952,512
(a) During 4Q 2020, the Company charged-off $31.2 million for two commercial PCD loans.
13
OFG Bancorp (NYSE: OFG)
Table 7: Allowance for Credit Losses (1)
Quarter Ended June 30, 2021
(Dollars in thousands) (unaudited)
Mortgage
Commercial
Consumer
Auto
Total
Allowance for credit losses Non-PCD:
$
17,035
$
47,683
$
21,191
$
71,069
$
156,978
(592)
(4,503)
74
(2,538)
(7,559)
(268)
(653)
(2,897)
(5,170)
(8,988)
193
996
697
5,997
7,883
$
16,368
$
43,523
$
19,065
$
69,358
$
148,314
Allowance for credit losses PCD:
$
29,938
$
14,307
$
52
$
698
$
44,995
1,727
(1,974)
(47)
(285)
(579)
(1,742)
(6)
-
(226)
(1,974)
184
430
33
314
961
$
30,107
$
12,757
$
38
$
501
$
43,403
Allowance for credit losses summary:
$
46,973
$
61,990
$
21,243
$
71,767
$
201,973
1,135
(6,477)
27
(2,823)
(8,138)
(2,010)
(659)
(2,897)
(5,396)
(10,962)
377
1,426
730
6,311
8,844
$
46,475
$
56,280
$
19,103
$
69,859
$
191,717
Allowance coverage ratio
2.23%
2.35%
4.99%
4.26%
2.95%
Allowance coverage ratio excluding PPP loans (Non-GAAP)
2.23%
2.60%
4.99%
4.26%
3.06%
14
OFG Bancorp (NYSE: OFG)
Table 8-1: 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.
2021
2021
2020
2020
2020
(Dollars in thousands) (unaudited)
Q2
Q1
Q4
Q3
Q2
Stockholders' Equity to Non-GAAP Tangible Common Equity
Total stockholders' equity
$
1,079,997
(a)
$
1,108,423
$
1,085,975
$
1,064,322
$
1,041,284
Less: Intangible assets
(127,064)
(129,514)
(131,965)
(134,719)
(137,475)
(24,000)
(a)
(92,000)
(92,000)
(92,000)
(92,000)
7,453
(a)
10,130
10,130
10,130
10,130
Tangible common equity
$
936,386
$
897,039
$
872,140
$
847,733
$
821,939
Common shares outstanding at end of period
51,661
51,579
51,387
51,345
51,342
Tangible book value per common share (Non-GAAP)
$
18.13
$
17.39
$
16.97
$
16.51
$
16.01
Total Assets to Tangible Assets
Total assets
$
10,461,813
$
10,153,342
$
9,826,011
$
10,018,991
$
9,932,719
Less: Intangible assets
(127,064)
(129,514)
(131,965)
(134,719)
(137,475)
Tangible assets (Non-GAAP)
$
10,334,749
$
10,023,828
$
9,694,046
$
9,884,272
$
9,795,244
Non-GAAP TCE Ratio
Tangible common equity
$
936,386
$
897,039
$
872,140
$
847,733
$
821,939
Tangible assets
10,334,749
10,023,828
9,694,046
9,884,272
9,795,244
TCE ratio
9.06%
8.95%
9.00%
8.58%
8.39%
Average Equity to Non-GAAP Average Tangible Common Equity
Average total stockholders' equity
$
1,083,452
(a)
$
1,101,046
$
1,083,423
$
1,062,460
$
1,037,195
Less: Average noncumulative perpetual preferred stock
(44,923)
(a)
(92,000)
(92,000)
(92,000)
(92,000)
8,306
(a)
10,130
10,130
10,130
10,130
Average total common stockholders' equity
$
1,046,835
$
1,019,176
$
1,001,553
$
980,590
$
955,325
Less: Average intangible assets
(128,311)
(130,767)
(133,542)
(136,138)
(139,094)
Average tangible common equity
$
918,524
$
888,409
$
868,011
$
844,452
$
816,231
(a) During 2Q 2021, the Company redeemed Series A and B Preferred Stock.
15
OFG Bancorp (NYSE: OFG)
Table 8-2: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures (Continued)
BASEL III
Standardized
2021
2021
2020
2020
2020
(Dollars in thousands) (unaudited)
Q2
Q1
Q4
Q3
Q2
Regulatory Capital Metrics
Common equity Tier 1 capital
$
957,238
$
919,856
$
894,074
$
862,636
$
836,899
Tier 1 capital
1,008,785
(a)
1,036,726
1,010,944
979,506
953,769
Total risk-based capital
(15)
1,094,786
(a)
1,121,830
1,096,764
1,065,744
1,040,987
Risk-weighted assets
6,861,890
6,782,685
6,837,846
6,875,108
6,957,906
Regulatory Capital Ratios
Common equity Tier 1 capital ratio
(16)
13.95%
13.56%
13.08%
12.55%
12.03%
Tier 1 risk-based capital ratio
(17)
14.70%
15.28%
14.78%
14.25%
13.71%
Total risk-based capital ratio
(18)
15.95%
16.54%
16.04%
15.50%
14.96%
Leverage ratio
(19)
9.84%
10.48%
10.30%
10.00%
10.16%
Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach
Total stockholders' equity
(1)
$
1,079,997
(a)
$
1,108,423
$
1,085,975
$
1,064,322
$
1,041,284
Plus: CECL transition adjustment
(20)
31,471
33,637
34,646
33,494
32,269
Less: Noncumulative perpetual preferred stock
(24,000)
(a)
(92,000)
(92,000)
(92,000)
(92,000)
7,453
(a)
10,130
10,130
10,130
10,130
(8,408)
(7,146)
(12,091)
(9,453)
(8,885)
808
916
1,069
1,185
1,297
1,087,321
1,053,960
1,027,729
1,007,678
984,095
Less: Disallowed goodwill
(86,069)
(86,069)
(86,069)
(86,069)
(86,069)
(28,555)
(30,172)
(32,073)
(33,810)
(35,563)
(15,459)
(17,863)
(15,513)
(25,163)
(25,564)
Common equity Tier 1 capital
957,238
919,856
894,074
862,636
836,899
Plus: Qualifying noncumulative perpetual preferred stock
24,000
(a)
92,000
92,000
92,000
92,000
(7,453)
(a)
(10,130)
(10,130)
(10,130)
(10,130)
35,000
35,000
35,000
35,000
35,000
Tier 1 capital
1,008,785
1,036,726
1,010,944
979,506
953,769
Plus tier 2 capital: Qualifying allowance for loan and lease losses
86,001
85,104
85,820
86,238
87,218
Total risk-based capital
$
1,094,786
$
1,121,830
$
1,096,764
$
1,065,744
$
1,040,987
(a) During 2Q 2021, the Company redeemed Series A and B Preferred Stock.
16
OFG Bancorp (NYSE: OFG)
Table 9: Notes to Financial Summary, Selected Metrics, Loans, and Consolidated Financial Statements (Tables 1 - 8)
(1)
We used the terms "PCI" and "SOP" to refer to loans acquired with credit deterioration from the Scotiabank acquisition (December 31, 2019), the BBVAPR acquisition
(December 18, 2012) and the Eurobank FDIC-Assisted acquisition (April 30, 2010), recorded at fair value at acquisition. On January 1, 2020, the Company implemented
ASU No. 2016-13: Measurement of Credit Losses on Financial Instruments "(CECL)" using the modified retrospective approach. CECL replaces the concept of purchased
credit impaired loans (PCI) with the concept of purchased financial assets with credit deterioration (PCD). PCD accounting is called ‘gross-up accounting’ because, at
acquisition, an entity grosses up the amortized cost basis of the PCD asset for the initial estimate of credit losses. This Day 1 allowance for credit losses is established
without an income statement effect. The Company elected to maintain previously existing pools on adoption, therefore the pool continues to be the unit of account,
and the allowance and non-credit discount or premium is not allocated to the individual assets. 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.
(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 PCD loans.
(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)
Most PCD 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. PCD loan pools that are not accreting interest income
are deemed to be non-performing loans and presented separately.
(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)
In March 2020, in light of recent strains on the U.S. economy as a result of the coronavirus disease 2019 (COVID-19), the Board of Governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency issued an interim final rule that provided the option to
temporarily delay the effects of CECL on regulatory capital for two years, followed by a three-year transition period. In addition, for the first two years, a uniform 25%
“scaling factor” is introduced to approximate the portion of the post day-one allowance attributable to CECL relative to the incurred loss methodology. The 25% scaling
factor is calibrated to approximate an overall after-tax impact of differences in allowances under CECL vs the incurred loss methodology.
(21)
CECL replaces the concept of purchased credit impaired loans (PCI assets) with the concept of purchased financial assets with credit deterioration (PCD assets). An
entity records a PCD asset at the purchase price plus the allowance for credit losses expected at the time of acquisition. Under this method, there is no credit loss
expense affecting net income on acquisition. Changes in estimates of expected credit losses after acquisition are recognized as credit loss expense (or reversal of credit
loss expense) in subsequent periods as they arise.
(22)
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.
(23)
PPP loans are fully guaranteed by the SBA and risk-weighted at 0%.
17