OFG BANCORP (OFG) SPO
|Company Name||OFG BANCORP|
|Company Address||254 MU?OZ RIVERA AVENUE
SAN JUAN 00918
|CEO||José Rafael Fernández|
|Employees (as of 12/31/2011)||725|
|State of Inc||--|
|Fiscal Year End||12/31|
|Exchange||New York Stock Exchange|
|Shares Over Alloted||0|
|Shareholder Shares Offered||--|
|Lockup Period (days)||180|
|Quiet Period Expiration||12/10/2012|
We estimate that the net proceeds to us from the sale of 4,390,243 shares of Common Stock offered in this offering, after deducting estimated underwriting discounts, will be approximately $46.8 million (or $51.5 million if the underwriters exercise in full their option to purchase 439,024 additional shares of Common Stock). We intend to use the net proceeds from this offering to fund a portion of the purchase price for the pending BBVAPR Acquisition described under “The BBVAPR Acquisition.” If there is any excess of net proceeds over the amount of the Buyer Capital Raise for the BBVAPR Acquisition, we intend to use any such excess net proceeds for general corporate purposes. Until Closing of the BBVAPR Acquisition, the proceeds of this offering will be held as cash or cash equivalents. If the Closing does not occur, the proceeds will be applied for general corporate purposes, including, without limitation, the possible redemption of the Series C Convertible Preferred Stock, the mandatory redemption of the non-convertible, non-cumulative preferred stock that we expect to offer in a separate transaction shortly after this offering or other outstanding securities. Redemption of the Series C Convertible Preferred Stock and the non-convertible non-cumulative preferred stock may be subject to the receipt of prior regulatory approval under then applicable regulations.
We face substantial competition in originating loans and in attracting deposits and assets to manage. The competition in originating loans and attracting assets comes principally from other U.S., Puerto Rico and foreign banks, investment advisors, broker-dealers, mortgage banking companies, consumer finance companies, credit unions, insurance companies, and other institutional lenders and purchasers of loans. We will encounter greater competition as we expand our operations. Increased competition may require us to increase the rates paid on deposits or lower the rates charged on loans which could adversely affect our profitability. --- Like Oriental, the main geographic business and service area of BBVAPR is in Puerto Rico, where the banking market is highly competitive.
Oriental Financial Group Inc. is a diversified financial holding company headquartered in San Juan, Puerto Rico, offering a full range of financial services through its wholly-owned subsidiaries Oriental Bank and Trust (“Oriental Bank” or the “Bank”), Oriental Financial Services Corp. (“Oriental
Financial Services”), Oriental Insurance, Inc. (“Oriental Insurance”) and Caribbean Pension Consultants, Inc. As of June 30, 2012, we had total assets of $6.4 billion, total loans (net of allowance for loan and lease losses) of $1.6 billion, total investment securities of $3.5 billion, total deposits of $2.2 billion, and stockholders’ equity of $692 million. We also had $4.5 billion of trust and brokerage assets managed as of June 30, 2012. We currently operate through a network of 28 financial centers located throughout Puerto Rico and one location in Boca Raton, Florida, which serves as the headquarters of our wholly-owned subsidiary Caribbean Pension Consultants, Inc., a pension and retirement plan administrator. Oriental provides comprehensive banking and wealth management services to its clients through a complete range of banking and financial solutions, including commercial, consumer and mortgage lending; auto leasing; checking and savings accounts; financial planning, insurance, wealth management, and investment brokerage; and corporate and individual trust and retirement services. Oriental operates through three major business segments: Banking, Wealth Management, and Treasury, and seeks to distinguish itself based on quality service and marketing efforts focused on mid and high net worth individuals and families, including professionals and owners of small and mid-sized businesses, primarily in Puerto Rico. Oriental’s long-term goal is to strengthen its banking and wealth management franchise by expanding its lending businesses, increasing the level of integration in the marketing and delivery of banking and wealth management services, maintaining effective asset-liability management, growing non-interest revenues from banking and wealth management services, and improving operating efficiencies. Oriental’s strategy includes: . Strengthening its banking and wealth management franchise by expanding its ability to attract deposits and build relationships with individual customers and professionals and mid-market commercial businesses through aggressive marketing and expansion of its sales force; . Focusing on greater growth in commercial, consumer and mortgage lending; trust and wealth management services, insurance products; and increasing the level of integration in the marketing and delivery of banking and wealth management services; . Matching its portfolio of investment securities with the related funding to achieve favorable spreads, primarily investing in U.S. government agency obligations; . Improving operating efficiencies, and continuing to maintain effective asset-liability management; and . Implementing a broad ranging effort to instill in employees and make customers aware of Oriental’s determination to effectively serve and advise its customer base in a responsive and professional manner. Together with a highly experienced group of senior and mid-level executives and the FDIC-assisted acquisition of Eurobank in April 2010, this strategy has resulted in growth in Oriental’s commercial, consumer and mortgage lending and wealth management activities over the past seven years, allowing Oriental to distinguish itself in a highly competitive industry. Oriental Bank and Trust Our main operating subsidiary is Oriental Bank, a Puerto Rico chartered commercial bank subject to examination by the FDIC and the Office of the Commissioner of Financial Institutions of Puerto Rico (the “OCFI”). The Bank offers banking services such as commercial, consumer and mortgage lending, auto leasing, savings and time deposit products, financial planning, and corporate and individual trust services, and capitalizes on its branch network to serve its clients. The Bank also operates an international banking entity subsidiary, Oriental International Bank Inc., which offers the Bank certain Puerto Rico tax advantages, and its services are limited under Puerto Rico law to persons and assets/liabilities located outside Puerto Rico. Borrowings are the Bank’s largest interest-bearing liability component. Borrowings consist mainly of diversified funding sources including repurchase agreements, and advances from the Federal Home Loan Bank of New York. As of June 30, 2012, total borrowings amounted to $3.4 billion. Deposits are the Bank’s second largest category of interest-bearing liabilities. At June 30, 2012, total deposits amounted to $2.2 billion. Of the Bank’s total deposits, approximately 89.6% are retail deposits, approximately 3.8% are institutional deposits, and approximately 6.6% are brokered deposits. The Bank’s lending activities are primarily with clients located in Puerto Rico. The Bank’s loan and lease transactions include a diversified number of industries and activities, all of which are encompassed within four main categories: commercial, consumer, mortgage and auto leasing. Residential mortgage loans comprise the largest component of the Bank’s loan portfolio. Such loans represent approximately 66.8% of the gross loan portfolio that was not covered by the FDIC loss sharing arrangements described below at June 30, 2012 (such loan portfolio, the “non-covered loan portfolio”). The second largest component is commercial loans, which represent approximately 27.3% of the gross non-covered loan portfolio. The remaining components are consumer loans, which represent approximately 3.3% of the gross non-covered loan portfolio, and leasing, which represents approximately 2.5% of the gross non-covered loan portfolio. Effective April 30, 2010, the Bank assumed all of the retail deposits and other liabilities, and acquired certain assets and substantially all of the operations, of Eurobank from the FDIC, as receiver for Eurobank, pursuant to the terms of a purchase and assumption agreement entered into by the Bank and the FDIC on April 30, 2010. Certain acquired loans are subject to loss sharing arrangements (each, a “shared-loss agreement” and collectively, the “shared-loss agreements”), pursuant to which the FDIC will bear 80% of qualifying losses, beginning with the first dollar amount of qualifying losses. The shared-loss agreement applicable to single-family residential mortgage loans provides for FDIC loss sharing to last for ten years, and the shared-loss agreement applicable to commercial and other assets provides for FDIC loss sharing to last for five years, with additional recovery sharing for three years thereafter. The present value of the anticipated future payments by the FDIC pursuant to the loss sharing arrangements, also referred to as the FDIC shared-loss indemnification asset, amounted to $359.8 million as of June 30, 2012. Oriental Trust, the Bank’s trust department, is a leader in Puerto Rico’s retirement planning market. We offer Keogh and 401(k) retirement plans, deferred compensation plans, asset protection trusts, custodial services and other trust services. Our trust department had $2.4 billion of trust assets managed as of June 30, 2012. Oriental Financial Services Oriental Financial Services is our securities brokerage and investment banking subsidiary with approximately $2.1 billion of total assets under management as of June 30, 2012. Oriental Financial Services offers its customers a wide array of investment alternatives such as tax-advantaged fixed income securities, mutual funds, and various other equity and fixed income securities. In addition, Oriental Financial Services provides financial planning services to individuals and investment banking services, encompassing both public and corporate finance, to the Puerto Rico government and corporations. It also manages and participates in public offerings of debt and equity securities in Puerto Rico. Oriental Financial Services has a clearing agreement with Pershing LLC pursuant to which Pershing LLC clears and executes the brokerage transactions of Oriental Financial Services’ customers on a fully disclosed basis with Oriental Financial Services assuming the obligations of any defaulting customer. Oriental Financial Services is a Puerto Rico corporation and a full service broker-dealer registered with the SEC, the Financial Industry Regulatory Authority (“FINRA”), the Commonwealth of Puerto Rico and six other U.S. states and territories. Oriental Insurance Oriental Insurance is a Puerto Rico corporation and a licensed insurance producer that offers, as agent for unaffiliated insurance companies, annuities and life insurance products, property and casualty insurance, and title insurance for individual and commercial clients. Oriental Insurance’s licensed personnel have increasingly partnered with various business groups within the Company to develop new insurance business opportunities and to better serve our clients. Caribbean Pension Consultants Caribbean Pension Consultants, Inc. is a Florida corporation headquartered in Boca Raton, Florida. It is engaged in the business of pension and retirement plan administration, focused on 401(k) and Keogh retirement plans in Puerto Rico, the United States and the Bahamas. Caribbean Pension Consultants, Inc. is one of the largest independent third-party administrators of pension and retirement accounts in Puerto Rico. ------ We were incorporated in Puerto Rico on June 14, 1996. Our principal executive offices are located at Oriental Center, Professional Office Park, 997 San Roberto Street, 10th Floor, San Juan, Puerto Rico 00926. Our telephone number is (787) 771-6800. We maintain a website at www.orientalfg.com.
|Company Counsel||Cleary Gottlieb Steen & Hamilton LLP|
|Lead Underwriter||Jefferies & Company, Inc|
|Transfer Agent||American Stock Transfer & Trust Company, LLC|
|Underwriter||Keefe, Bruyette & Woods, Inc|
|Underwriter||Oriental Financial Services Corp|
|Underwriter Counsel||Skadden, Arps, Slate, Meagher & Flom LLP|