OFG Bancorp (OFG) 首席执行官 Jose Rafael Fernandez 收购加拿大波多黎各和美属维尔京群岛电话会议 (会议记录)

[机器翻译] 电话会议 · 2019年06月28日 · 49 次阅读

OFG Bancorp (NYSE:OFG) Acquisition of Scotiabank Operations in Puerto Rico and US Virgin Islands Conference Call June 27, 2019 10:00 AM ET

OFG Bancorp(纽约证券交易所代码:[OFG])收购加拿大波多黎各和美属维尔京群岛的丰业银行业务电话会议2019年6月27日美国东部时间上午10:00

公司参与者

Jose Rafael Fernandez - President, Chief Executive Officer and Vice Chairman
Ganesh Kumar - Senior Executive Vice President and Chief Financial Officer

  • Jose Rafael Fernandez - 总裁,首席执行官兼副主席
  • Ganesh Kumar - 高级执行副总裁兼首席财务官

电话会议参与者

Brett Rabatin - Piper Jaffray
Alex Twerdahl - Sandler O'Neill
Joe Gladue - Alden Securities
Glen Manna - Keefe, Bruyette & Woods

  • Brett Rabatin - Piper Jaffray
  • Alex Twerdahl - Sandler O'Neill
  • Joe Gladue - 奥尔登证券
  • Glen Manna - Keefe,Bruyette&Woods

会议主持员

Good morning. Thank you for joining OFG Bancorp's Conference Call. My name is Laurie, and I will be your conference operator for today. Our speakers are Jose Rafael Fernandez, President, Chief Executive Officer and Vice Chairman and Ganesh Kumar, Senior Executive Vice President and Chief Financial Officer. A presentation accompanies today's remarks. It can be found on the Investor Relations website on the homepage in the "What's New Box" or on the Webcasts, Presentations & Other Files page.
This call may feature certain forward-looking statements about management's goals, plans and expectations. These statements are subject to risks and uncertainties outlined in the risk factor section of OFG's SEC filings. Actual results may differ materially from those currently anticipated. We disclaim any obligation to update information disclosed in this call as a result of developments that occur afterwards. All lines have been placed on mute to prevent background noise. After the speakers' remarks, there will be a question-and-answer session.
I would now like to turn the call over to Mr. Fernandez. Mr. Fernandez, you may begin sir.

早上好。感谢您加入OFG Bancorp的电话会议。我的名字是Laurie,今天我将成为你的会议运营商。我们的发言人是Jose Rafael Fernandez,总裁兼首席执行官兼副主席,Ganesh Kumar,高级执行副总裁兼首席财务官。演讲伴随着今天的发言。它可以在主页上的“投资者关系”网站的“什么是新盒子”中找到,或者在网络广播,演示文稿和其他文件页面上找到。

此次电话会议可能包含有关管理层目标,计划和期望的某些前瞻性陈述。这些陈述受到OFG SEC文件的风险因素部分中列出的风险和不确定性的影响。实际结果可能与目前预期的结果大不相同。由于之后发生的事态发展,我们不承担更新本次电话中披露的信息的义务。所有线路均已静音以防止背景噪音。发言者发言后,将会有一个问答环节。

我现在想把这个电话转给费尔南德斯先生。费尔南德斯先生,你可以开始先生。

Jose Rafael Fernandez

Good morning and thank you for joining us. Please turn to Slide 3. Last night we announced that we entered into an agreement with Scotiabank to acquire their Puerto Rico operations for $550 million and their U.S. Virgin Island's banking operations for $10 million deposit premium.
This marks our third major acquisition in the last nine years a period of significant growth for OFG. It's an all cash deal where we are effectively deploying our excess capital. The acquisition is subject to customized regulatory requirements and we anticipate closing before year-end.
All together, we're acquiring about $4 billion in assets, including $2.6 billion in gross loans, mostly quality and residential mortgages and $3.2 billion in core low cost retail deposits along with good fee revenue sources. We've always said that if we do on a market acquisition, it would have to be financially compelling. This one is and it also has good strategic benefits. Based on track record of fast successful integrations, we're confident we'll be able to realize the value of this acquisition for Oriental and OFG.
Please turn to Slide 4. Strategically, this acquisition strengthens our businesses with enhanced scale. In addition, we're very much looking forward to adding Scotiabank's talented teams in Puerto Rico and the U.S. Virgin Island. This deal also further establishes Oriental's overall position as a premier retail bank in Puerto Rico. All of this puts us in a position to continue our strategy of differentiation, growth and strong financial performance.
Oriental will be the second largest bank in Puerto Rico in terms of core deposits, branches, mortgage servicing and in terms of ATM network. It will provide us with an expanded customer base and complimentary products and services. Once combined, we'll have close to half a million clients that will provide us critical mass to create a more meaningful net interest income position.
The addition of Scotiabank Insurance business will double ours, and we will be the third largest bank in the U.S. Virgin Island. Financially, we anticipate the deal to be 40% accretive to next year's earnings, resulting in robust capital generation and therefore, significantly increasing our return on average tangible common equity going forward. All-in-all, this transaction also provides us with an ideal opportunity to deploy our excess capital to increase returns and shareholder value.
We also anticipate selling about $1 billion in acquired securities through reduced higher cost borrowings and broker CDs. To reiterate, in consider that the key value from this transaction either $3.2 billion in low cost core deposit is give us enormous flexibility to pursue additional loan grow as the opportunities arise.
Importantly, Scotiabank in recent years has substantially improved its credit quality in both Puerto Rico and the U.S. Virgin Islands. Total non-performing assets declined 62% from 2016 to the first quarter of 2019. Direct Puerto Rico government exposure is down to just $27 million. In addition, we anticipate a credit mark of 5% of acquired loans net of existing charges and purchase accounting discounts.

早上好,谢谢你加入我们。请转到幻灯片3.昨晚我们宣布,我们与丰业银行达成协议,以5.5亿美元收购其波多黎各业务,并以1000万美元的存款溢价收购其在美属维尔京群岛的银行业务。

这标志着我们在过去九年中第三次重大收购,这是OFG显着增长的一个时期。这是一笔全部现金交易,我们有效地部署了我们的超额资本。此次收购符合定制的监管要求,我们预计在年底前完成收购。

总而言之,我们收购了大约40亿美元的资产,其中包括26亿美元的贷款总额,主要是质量和住房抵押贷款以及32亿美元的核心低成本零售存款以及良好的收费来源。我们总是说如果我们在市场上进行收购,那就必须在财务上引人注目。这个是,它也有很好的战略利益。基于快速成功整合的记录,我们相信我们将能够实现对东方和OFG的此次收购的价值。

请转到幻灯片4.从战略上讲,此次收购增强了我们的业务规模。此外,我们非常期待在波多黎各和美属维尔京群岛增加丰业银行的优秀团队。这笔交易还进一步确立了东方作为波多黎各首屈一指的零售银行的整体地位。所有这一切使我们能够继续实现差异化,增长和强劲财务业绩的战略。

东方将成为波多黎各第二大银行,包括核心存款,分行,抵押贷款和ATM网络。它将为我们提供扩展的客户群和免费的产品和服务。一旦合并,我们将拥有接近50万客户,这将为我们提供临界质量,以创造更有意义的净利息收入状况。

Scotiabank保险业务的增加将使我们的业务增加一倍,我们将成为美属维尔京群岛的第三大银行。从财务角度来看,我们预计该交易将对明年的收益增加40%,从而产生强劲的资本生成,从而显着提高我们未来平均有形普通股的回报。总而言之,这项交易还为我们提供了一个理想的机会来部署我们的超额资本,以增加回报和股东价值。

我们还预计通过降低高成本借款和经纪CD销售约10亿美元的收购证券。重申一下,考虑到这笔交易的关键价值是32亿美元的低成本核心存款,这为我们提供了巨大的灵活性,可以随着机遇的增加追求额外的贷款增长。

重要的是,丰业银行近年来大大提高了波多黎各和美属维尔京群岛的信贷质量。从2016年到2019年第一季度,不良资产总额下降了62%。直接波多黎各政府风险降至仅2700万美元。此外,我们预计获得贷款的5%的信用标记扣除现有费用和购买会计折扣。

Please turn to Slide 5. This transaction is conservatively priced at 1.15 times tangible book value, and less than 10 times 2020 earnings, including cost base. Both metrics compare extremely well to U.S. transaction multiples. We anticipate 15% tangible book value dilution on closing with the 40% accretion, we will have an earn-back of less than three years.
Projected annual cost saves are currently anticipated at approximately 25% of Scotiabank's non-interest expenses. Approximately 75% of the savings are expected to be realized in 2020. These are anticipated to results from more efficient back office operations along with vendor consolidation.
Just like Oriental, Scotiabank has undergone a period of rationalizing its branch network. Our goal here is to retain and grow the franchise value, while enhancing the customer experience level. Usually in this combination, cost savings synergies typically mean network consolidation. In this case, we will not be focused on that. We will be looking for efficiencies elsewhere. The end result is a very well capitalized balance sheet at closing we're looking at tier one leverage ratio of about 9.5%, a CET 1 ratio of 11.5% and a total risk based ratio of 14.5%.
Please turn to Slide 6. Let me provide a little background on Scotiabank's Puerto Rico operation. Scotia has a story presence on the island and in the Caribbean region in general. The business Puerto Rico is more than a 100 years old. All together, the Puerto Rico and USVI operations have 19 branches, 210 ATMs, about 200,000 customers and about 1,000 employees, which will help deepen our bench in many areas from client facing to back-office operations.
Despite differences in our history, Scotia is similar to Oriental in terms of its emphasis on adding value to its customers, differentiating itself in terms of superior service and valuing its cherished employees, while delivering strong financial performance. Scotiabank also provides its retail and commercial customers similar set of products and services as we do.
As you can see from the summary income statement, Scotiabank Puerto Rico generated $217 million in adjusted net revenues last year with a net interest margin of 4.12% and the bank produced $38 million in adjusted net income with a return on average assets of about 1%.
Please turn to Slide 7 for a picture of improved competitive position we will have in Puerto Rico. We will be the second largest bank on the Island, measured by our retail network and more importantly, by deposit market share. We will also be number two with a mortgage servicing book that will increase five-fold to more than $5 billion.
Please turn to Slide 8. I'm also very excited for this expansion of our market footprint beyond Puerto Rico. Here is a look at Scotiabank's USVI operations. Scotiabank is number three market share. It has two branches, one in St. Thomas, one in St. Croix. In total, there are 60 employees and 15 ATMs. The branches have $260 million in loans, $456 million in deposits. As a result, the loan-to-deposit ratio is 67% and the cost of deposit is low at 30 basis points, providing additional good funding opportunity for oriental.

请转到幻灯片5.此交易保守定价为有形账面价值的1.15倍,不到2020年收益的10倍,包括成本基数。两个指标都与美国交易倍数相比非常好。我们预计在收盘时有15%的有形账面价值稀释,增加40%,我们将获得不到三年的回报。

预计目前预计每年的成本节省约为丰业银行非利息支出的25%。预计大约75%的节省将在2020年实现。预计这些节省将来自更高效的后台运营以及供应商整合。

就像东方一样,丰业银行已经历了一段合理化其分支网络的时期。我们的目标是保持和增加特许经营价值,同时提高客户体验水平。通常在这种组合中,成本节约协同作用通常意味着网络整合。在这种情况下,我们不会专注于此。我们将寻求其他地方的效率。最终结果是资本充足的资产负债表在结束时我们看到一级杠杆率约为9.5%,CET 1比率为11.5%,总风险基础比率为14.5%。

请转到幻灯片6.让我提供丰业银行波多黎各业务的一些背景知识。 Scotia在岛上和加勒比海地区都有故事。波多黎各的业务已有100多年的历史。波多黎各和USVI共同拥有19家分支机构,210台自动柜员机,约200,000名客户和约1,000名员工,这将有助于加深我们在客户面向后台运营等许多领域的工作。

尽管我们的历史存在差异,但Scotia在强调为客户增值,在优质服务和重视员工价值方面的差异,同时提供强大的财务业绩方面与东方相似。丰业银行还为其零售和商业客户提供与我们类似的产品和服务。

从汇总收益表中可以看出,丰业银行波多黎各去年产生了2.17亿美元的调整后净收入,净利息收益率为4.12%,银行调整后净收入为3800万美元,平均资产收益率约为1% 。

请转到幻灯片7,了解我们将在波多黎各提升竞争地位的图片。我们将成为岛上第二大银行,以我们的零售网络衡量,更重要的是按存款市场份额衡量。我们也将成为排名第二的抵押贷款服务手册,将增加五倍至超过50亿美元。

请转到幻灯片8.我也非常高兴我们的市场覆盖范围扩大到波多黎各之外。以下是丰业银行的USVI运营情况。丰业银行是市场份额第三。它有两个分支,一个在圣托马斯,一个在圣克罗伊。总共有60名员工和15台自动柜员机。这些分行拥有2.6亿美元的贷款,4.56亿美元的存款。因此,贷存比率为67%,存款成本低至30个基点,为东方人提供了额外的良好融资机会。

Please turn to Slide 9. We anticipate the pro forma bank to have $9.4 billion in total assets, including a loan portfolio of $7.2 billion, our loan mix will be one-third in each of them are major categories. We'll also have $8.1 billion in customer deposits. And as I mentioned earlier, a key driver of this transaction is a well diversified low cost core deposit portfolio. Although, the portfolio mix does not change much, we will have significantly less reliance on wholesale funding on our balance sheet.
Slide 10 from all key assumptions to the acquisition and our plan, most major ones I've already discussed. The projected result of the deal can be seen on Slide 11. OFG will have a balance sheet, as I mentioned earlier, of $9.4 billion. This includes $7.2 billion in well diversified low mix and $1.5 billion in securities. On the other side of the balance sheet, we'll have $7.9 billion of mostly low cost core deposits with a loan to deposit ratio of 91%. We'll also have only $200 million in borrowing and $1 billion of equity. To conclude, we'll have a well capitalized bank with a very strong balance sheet.
Please turn to Slide 12. In closing, I'd like to summarize the key highlights of the acquisition. It combines two external banks to create a strongly capitalized market leading institution focused on the needs of consumers and businesses in Puerto Rico and the U.S. Virgin Island. It's an opportunity to leverage a strong core deposit base and funding for loan growth. It's also an efficient way to use our excess capital to increase franchise value and financial performance. It is expected to be highly accretive to earnings per share with robust capital generation and significantly expanded return on equity. And finally, it is conservatively priced with modeled returns that exceed internal hurdles.
We are really excited about how this transaction will add value to shareholders and clients, and how we will expand our team and grow fast in Puerto Rico. We are confident in our ability to integrate both the Puerto Rico and USVI operations, given our success track record acquiring locally a multinational owned bank operation in the past.
Again, I thank you for listening. Operator, please open the call for Q&A.

请转到幻灯片9.我们预计备考银行的总资产将达到94亿美元,其中包括72亿美元的贷款组合,我们的贷款组合将是其中三分之一的主要类别。我们还将拥有81亿美元的客户存款。正如我之前提到的,此次交易的关键驱动因素是多元化的低成本核心存款组合。虽然投资组合组合变化不大,但我们对资产负债表上的批发融资的依赖程度要低得多。

从所有关键假设中滑动10到收购和我们的计划,我已经讨论过的大多数主要假设。交易的预计结果可以在幻灯片11中看到。如前所述,OFG将有94亿美元的资产负债表。其中包括72亿美元的多元化低收益组合和15亿美元的证券。在资产负债表的另一边,我们将拥有79亿美元的大部分低成本核心存款,贷存比率为91%。我们还将只有2亿美元的借款和10亿美元的股权。总而言之,我们将拥有资本充足的银行,资产负债表非常强大。

请转到幻灯片12.最后,我想总结一下收购的主要亮点。它结合了两家外部银行,创建了一个资本充足的市场领先机构,专注于波多黎各和美属维尔京群岛的消费者和企业的需求。这是一个利用强大的核心存款基础和贷款增长资金的机会。这也是利用我们的超额资本来提高特许经营价值和财务业绩的有效方式。预计通过强劲的资本生成和显着扩大的股本回报率,每股收益将大幅提升。最后,保守定价的模拟回报超过了内部障碍。

我们对此次交易如何为股东和客户增加价值以及如何扩大我们的团队并在波多黎各迅速发展感到非常兴奋。鉴于我们过去在当地收购跨国银行业务的成功记录,我们对整合波多黎各和USVI业务的能力充满信心。

再次,我感谢你的倾听。接线员,请打开问答电话。

问答环节

Thank you [Operator Instructions]. Our first question comes from the line of Brett Rabatin of Piper Jaffray.

谢谢[操作员说明]。 我们的第一个问题来自Piper Jaffray的Brett Rabatin系列。

Brett Rabatin

Congratulations on the deal. I know you've been working pretty hard on this. So I'm sure it feels good to get this announced.

祝贺这笔交易。 我知道你一直在努力工作。 所以我确定宣布这个很好。

Jose Rafael Fernandez

Thank you, Brett. The hard work starts now.

谢谢你,布雷特。 艰苦的工作现在开始了。

Brett Rabatin

I wanted to I guess just start with thinking about the acquired loan book, the mortgages and the implications. I know this is a tough question. But the CECL is coming up and wanted just to get your thoughts on how you were planning to address CECL next year with this acquisition, PCI versus PCD? And how we should be thinking about this accretion relative to the 40% accretion guidance?

我想我想开始考虑所购买的贷款账簿,抵押贷款和影响。 我知道这是一个棘手的问题。 但CECL即将到来,想要了解你计划明年如何通过此次收购,PCI与PCD解决CECL问题? 我们应该如何考虑相对于40%吸积指导的这种增加?

Jose Rafael Fernandez

So from a CECL perspective, Brett, as you can imagine, this is something that is very much in our mind. But it's not necessarily to be implemented immediately. So it’s a general implementation. So we're working with the process internally as we have communicated in the past. So now when we look at this transaction, we've modeled CECL effect on the capital. And I think when you look out to accretion we are really looking more CECL into the impact on capital.
Now, how we're going to go about it in terms of PCD, PCI and all the accounting derivatives of CECL, we can go into an accounting call here but we can take that offline. And really emphasize here the great enhancing of the franchise that this provides to us and how financially accretive this is. But bear in mind, we certainly have CECL clearly in our minds and have a path and a plan, not only for OFG standalone but also the expected closing of the transaction at the year-end of the year and pro forma two times together.

所以从CECL的角度来看,Brett,你可以想象,这是我们心中非常想到的。 但它不一定立即实施。 所以这是一个普遍的实现。 因此,我们正在内部处理过程,就像我们过去所传达的那样。 所以现在当我们看看这笔交易时,我们已经模拟了CECL对资本的影响。 我认为,当你注意到增长时,我们真的在寻找更多CECL对资本的影响。

现在,我们将如何处理PCD,PCI和CECL的所有会计衍生产品,我们可以在这里进行会计调用,但我们可以将其脱机。 并且在这里真正强调了这为我们提供的特许经营权的大幅提升以及这是如何在经济上增加的。 但请记住,我们肯定会在我们的脑海中清楚地看到CECL并且有一条路径和计划,不仅仅是OFG独立,而且还有在年底预期的交易结束,并且共计两次。

Ganesh Kumar

I just wanted to add also comment that, as you know, the principle declines, PCI or PCD, it is the estimation of the life time losses. And therefore, we require -- once we acquire the majority of the loans, we believe it will be handled through the PCD mechanics as we have the CECL. And therefore, there will not be income statement in fact and it's a fair validation methodology base methodology and this is a capital impact.

我只想补充评论,如你所知,原则下降,PCI或PCD,它是对寿命损失的估计。 因此,我们要求 - 一旦我们获得大部分贷款,我们相信它将通过PCD机制处理,因为我们有CECL。 因此,实际上不会有损益表,它是一种公平的验证方法基础方法,这是资本影响。

Brett Rabatin

Okay, that helps and also aces my next question as well. The 40% accretion, which is obviously a huge number but what you get the net of when you do a cash deal for a reasonable price and how a ton of excess capital, still seems to be, to me, like it could be a little conservative, depending on a few items. I wanted to make sure I'm thinking about. Can you just walk me through the mechanics for the pro forma margin? And then where you think we end up on a margin basis? And then I assume the idea will be to run off all those CDs that you can get and what you're doing with the balance sheet over the next few quarters as well?

好的,这也有助于我的下一个问题。 40%的增长,这显然是一个巨大的数字,但是当你以合理的价格进行现金交易以及如何仍有大量超额资金时,你得到的净额,就像它可能有点 保守,取决于几个项目。 我想确保我在考虑。 你可以带我了解备考保证金的机制吗? 然后你认为我们最终以保证金为基础? 然后我认为这个想法是在接下来的几个季度中运行所有可以获得的CD以及你在资产负债表上做些什么?

Jose Rafael Fernandez

So as you can imagine, we have a model and we have several variables to that model, which we've shared with you some of those, including selling some of the investment portfolio and utilizing the core deposits that are coming in as a way to get rid of higher costs from institutional deposits. So those are taken into the model. I'll let Ganesh go into a little bit more detail in terms of the other variables that are affecting the accretion. But bear in mind we, and you know us for a while now, we don't tend to be aggressive in our modeling, we try to do things conservatively.

所以你可以想象,我们有一个模型,我们有几个变量到那个模型,我们已经与你分享了一些,包括出售一些投资组合和利用进来的核心存款作为一种方式 从机构存款中剔除更高的成本。 所以这些都被纳入了模型。 我会让Ganesh更详细地讨论影响吸积的其他变量。 但请记住我们,你现在知道我们一段时间了,我们在建模时并不倾向于积极进取,我们试图保守地做事。

Ganesh Kumar

Brett, to continue on that on Page 10 of the presentation, we are presenting the transaction assumption and as well as range of guidance, because the income of the target has been a little bit choppy over the couple of years. So we thought it was present just for -- to help you to see that how we're modeling these things. So as you see on the right hand side of that page, the net interest income we are guiding or providing our guidance, it will be, fall anywhere between $150 million to $160 million over there.
And then you can go down the list, free income of $50 million to $55 million, expenses of $150 million to $160 million, cost savings according to assumptions we presented in the model and then the tax rate that we expect marginal tax rate for that -- those net income. So basically, I think that's what I would ask you to take a look at it for you to get to the accretion number on of what we are presenting.

Brett,继续在演示文稿的第10页,我们提出交易假设和指导范围,因为目标的收入在几年内有点波动。 因此我们认为它只是为了帮助您了解我们如何对这些事物进行建模。 正如您在该页面的右侧所看到的那样,我们指导或提供指导的净利息收入将在那里下降1.5亿至1.6亿美元之间。

然后你可以从列表中下载,5000万美元到5500万美元的免费收入,1.5亿美元到1.6亿美元的开支,根据我们在模型中提出的假设以及我们预期的边际税率的税率来节省成本 - - 那些净收入。 所以基本上,我认为这就是我要求你看看它,以便了解我们所呈现的吸积数。

Brett Rabatin

And maybe I didn't ask the question very well. So, Ganesh, when I look at the guidance on NII and I think about what they've currently been doing, I would seem that when I look at your balance sheet or look at their balance sheet, I look at what you're giving for NII guidance going forward. It would seem like you have the opportunity to improve that relative to your pro forma cost of funds and their…

也许我没有很好地问这个问题。 所以,Ganesh,当我看到关于NII的指导并且考虑他们目前正在做的事情时,我似乎在看到你的资产负债表或者看看他们的资产负债表时,我看看你给的是什么 未来的NII指导。 看起来您有机会相对于您的预估资金成本及其......

Ganesh Kumar

I would agree with you, Brett, primarily because today their NII, they carry a whole lot of cash and so less security. So to really eliminate the cash or yielding the cash, let's say just from financing the deal and eliminating the securities from their side as well. So the resulting book is the loan book, which would definitely have a higher NIM, yield is the big investment currently. And that's the major factor over here.
Of course, there are other factors of the growth and role of their mortgages into where we get to redeploy and all the things have been in place, but there is an immediate pick up after the close, primarily because of what I told you. And also what you're going to see is we are also getting from the acquisition, we are getting excess deposits and we are able to eliminate some of the borrowing from our side as well. So when the excess deposits are coming in at 52 basis points and then we are rolling off the borrowing, naturally the NIM improved. So what we assume is it will be a range from closer to our range of what we have at this point.

我同意你的意见,Brett,主要是因为今天他们的NII,他们带来了大量现金,因此安全性较低。因此,为了真正消除现金或产生现金,我们只能从交易融资和消除他们方面的证券。因此得出的书是贷款本,肯定会有更高的净息差,收益率是目前的大投资。这是这里的主要因素。

当然,他们的抵押贷款的增长和作用还有其他因素,我们可以重新部署,所有的事情都已到位,但收盘后会立即回升,这主要是因为我告诉你的。而且您将看到的是我们也从收购中获得,我们正在获得超额存款,我们也能够从我们这边消除一些借款。因此,当超额存款以52个基点进入,然后我们正在借贷时,NIM自然会有所改善。所以我们假设它将是一个范围,从更接近我们现在的范围。

会议主持员

Your next question comes from the line of Alex Twerdahl of Sandler O'Neill.

你的下一个问题来自Sandler O'Neill的Alex Twerdahl。

Alex Twerdahl

So first off, I just want to be clear. I think in your prepared remarks, you said that the 25% cost saves does not contemplate any branch closures. Is that correct?

首先,我只是想清楚。 我想在你准备好的评论中,你说25%的成本节省不考虑任何分支机构的关闭。 那是对的吗?

Jose Rafael Fernandez

劳伦卡塞尔...

Ganesh Kumar

The expansion of the customer base, this also gives us a opportunity to fill in some of the geographical gap that we may have so far. So net-net, there might be some relocation. But the strategy going forward is not to shut down the network side and the right savings out of that.

好的,完美的。 然后,当我们进行资本投资时,我的意思是,很明显,我脑海中的一个区域对于你们来说仍然是一个巨大的机会,显然是继续在雪山建造基地区域。 显然,相对于佛蒙特州南部的一些竞争而言,这种情况非常糟糕。 我知道我们之前曾在卡林西亚谈论过可能加入EB-5的酒店。 我必须根据今天在政治上的位置来思考,人们并没有勉强选择启动EB-5产品。

所以我的意思是,除了EB-5的情况之外,您能否就我们如何考虑如何继续在Carinthia Lodge建设并继续发展基地设施方面给我们一些更新。 雪山?...

Jose Rafael Fernandez

And on the big picture perspective, we're going to focus on growing. So again, having 500,000 customers, having the network, the retail network that we have, we believe that we have a great opportunity to actually deploy the deposits that we're acquiring into loans and grow the balance sheet even further with the resulting effect on income.

从全局来看,我们将专注于发展。 再次,拥有500,000个客户,拥有网络,我们拥有的零售网络,我们相信我们有很好的机会将我们收购的存款实际部署到贷款中并进一步增加资产负债表,从而产生影响 收入。

Alex Twerdahl

So then transitioning to the growth question, $9.4 billion, $9.5 billion, you're right underneath that $10 billion threshold, which I still think is something that needs to be considered. Can you just talk a little bit about where you are in the process of preparing to cross $10 billion? And whether or not that's something that we should expect to see in the next two to three years?

那么转向增长问题,94亿美元,95亿美元,你就在100亿美元的门槛之下,我仍然认为这是需要考虑的问题。 你能谈谈你准备跨越100亿美元的过程吗? 这是否是我们在未来两到三年内应该看到的东西?

Ganesh Kumar

We're also tracking at closing but for the security deleverage we will deal and we are trying to do the same, because we want to optimize capital efficiency and numbers and all those things. And I think we are prepared organization wise to process? So now we need to ask people -- the both organizations in, they can factor in other things like there's an impact and all those things. And I think we just want a little bit more time after the acquisition to get into all of those things. And we're not trying to cross it, we're not [indiscernible] avoiding $10 billion.

我们也在关闭时进行跟踪,但对于我们将要处理的安全性去杠杆化,我们正在努力做同样的事情,因为我们希望优化资本效率和数量以及所有这些事情。 我认为我们准备组织明智地处理? 所以现在我们需要问人们 - 两个组织,他们可以考虑其他因素,如影响和所有这些事情。 而且我认为我们只是想在收购后花更多的时间来进入所有这些事情。 我们并没有试图越过它,我们不会[音频不清晰]避免100亿美元。

Jose Rafael Fernandez

And also this transaction adds a talented team of bankers from Scotia that will deepen our bench precisely for our passing and surpassing the $10 billion mark, which will require a deeper bench for us to manage all the functions. So again, we look at this transaction, Alex, from the financial side, from the strategic side and even from the talent perspective, we're really excited about it and think that it will allow us and move beyond the $10 billion, as Ganesh just mentioned.

此次交易还增加了一支来自Scotia的优秀银行家团队,他们将为我们的成功加深我们的工作,并超过100亿美元大关,这将需要更深的工作台来管理所有职能。 再次,我们从财务方面,从战略方面,甚至从人才的角度来看待这次交易,亚历克斯,我们对此感到非常兴奋,并认为它将允许我们超越100亿美元,如Ganesh 刚提到。

Alex Twerdahl

What would be the direct impact from Durban on the combined operation if you were to cross $10 billion tomorrow?

如果你明天要超过100亿美元,那么德班对联合作战的直接影响是什么?

Jose Rafael Fernandez

In terms of dollars?

在美元方面?

Alex Twerdahl

Yes.

是。

Ganesh Kumar

We have to model that and that we have preliminary numbers and we have to model that and that's one of the reasons why we chose to remain under $10 billion.

我们必须对此进行建模并且我们有初步数字,我们必须对其进行建模,这也是我们选择保持在100亿美元以下的原因之一。

Alex Twerdahl

And then just final question for me. When I run the transaction through the St. Louis Fed HHI indicator, it looks like there is a little bit of branch overlap down in Ponce. Is that something that we should expect there to be some -- will there have to be any divestitures in terms of overlap from either depository standpoint or from concentrations on assets?

然后对我来说只是最后一个问题。 当我通过St. Louis Fed HHI指标进行交易时,看起来Ponce中有一些分支重叠。 那是我们应该期待的那些 - 从存款立场还是从资产集中的重叠方面,是否必须进行任何剥离?

Jose Rafael Fernandez

So, you're correct in terms of what you're referring to. But in terms of the HHI, at this point, we don't think we need to do that. But we need to go through the process, regulatory process. And as I've mentioned in my prepared remarks, this is an announcement that now we will engage in, not only preparing ourselves for the integration but shorter term, we will be working with the commissioner's office, the FDIC and the Fed New York and those issues will be addressed at that point in time. But it's a little premature for us to reach conclusions in that sense.

所以,就你所指的而言,你是正确的。 但就HHI而言,在这一点上,我们认为我们不需要这样做。 但我们需要经历这个过程,监管过程。 正如我在准备好的发言中所提到的,这是一个宣布,现在我们将参与,不仅为整合做准备,而且短期内,我们将与委员办公室,FDIC和美联储纽约和 这些问题将在那个时候得到解决。 但是,从这个意义上来说,我们得出结论还为时过早。

Ganesh Kumar

Moreover, Alex, I think you might have seen that -- once the market that we indicated across at least as of December data and March data, we've been continuously watching it $38 million over the limit in the matters like $8.3 billion in deposits. And actually now it's a moving number from here to closing, it might -- problems might still away.

此外,亚历克斯,我想你可能已经看到了 - 一旦我们至少截至12月数据和3月数据显示的市场,我们一直在持续观察超过3800万美元的存款,如83亿美元的存款。 实际上现在这是一个从这里到结束的移动数字,它可能 - 问题可能仍然存在。

Jose Rafael Fernandez

And certainly regardless of the HHI, it certainly would still be the number two bank in that region and the larger bank will have almost double our market share in that market.

当然,无论HHI如何,它肯定仍然是该地区的第二大银行,而且规模较大的银行在该市场的市场份额几乎翻了一番。

Ganesh Kumar

We are not the first bank to cross the HII limit in this market…

我们不是第一家在这个市场上超越HII限制的银行......

Jose Rafael Fernandez

Exactly.

究竟。

会议主持员

[Operator Instructions] Your next question comes from the line of Joe Gladue of Alden Securities.

[操作员说明]您的下一个问题来自Alden Securities的Joe Gladue。

Joe Gladue

I know you've talked about you'd like to focus more on growing this franchise and consolidation. But I just like to add Scotia has not been particularly aggressive in this market. And I guess their balance sheet has been shrinking a bit lately. Do you anticipate any issues with restarting the growth mindset in Scotia?

我知道你已经谈过你想更多地关注发展这个特许经营和整合。 但我只想补充斯科舍在这个市场并没有特别咄咄逼人。 我猜他们的资产负债表最近有所收缩。 您是否预计重新启动Scotia的增长思路会出现任何问题?

Jose Rafael Fernandez

On the contrary, Joe, I think the fact that they have been a relatively neutral in terms of their appetite here in Puerto Rico for growth or somewhat retrenching. We view this and as we model this, we model it from that scenario, which is a very conservative scenario. And as I said earlier, as we join together, both institutions with the teams integrating and applying our methodology of integration as we've done in the last couple of acquisitions, we think that we have a strong, robust platform to grow. And again, it's a matter of appetite and I think that that will play out in 2020 as we become one.

相反,乔,我认为他们在波多黎各的食欲方面对于增长或略微缩减而言是相对中立的事实。 我们对此进行了观察,并且在我们对此进行建模时,我们从该场景进行建模,这是一个非常保守的场景。 正如我之前所说,当我们联合起来时,我们认为我们拥有一个强大,强大的发展平台,两个机构都将团队整合并应用我们在最近几次收购中所采用的整合方法。 再次,这是一个胃口问题,我认为这将在2020年成为现实。

Joe Gladue

Just like to get a little bit of color on I guess the loan portfolio, particularly the asset quality. Just wondering are the NPAs primarily residential mortgages. And also just wondering if you anticipate just continuing to work out what's in the remaining portfolio, or if you think there's possibility of selling some…

我想贷款组合,特别是资产质量,就像获得一点点颜色。 只是想知道NPA主要是住宅抵押贷款。 而且还想知道你是否期望继续研究剩下的投资组合中的内容,或者你是否认为有可能出售一些......

Jose Rafael Fernandez

I'll keep a big picture and I'll let Ganesh add some more detail. But basically, we mentioned already that we're going to sell $1 billion in securities, that's one of the things that we will be doing. But again, as part of our plan and the plan that we've been executing for the last two or three years, if there're opportunities for us to look at some of these residential mortgages that might be non-performing.
And when we look at the economy in Puerto Rico, which has actually turned with the federal funds coming down and if there's an opportunity for us to have a good valuation on some of those assets, we will certainly take a look at it. But it's something that we've been doing all along. And as time has passed after Hurricane Maria, what we're seeing is a little bit better of bids here in the Island for those assets, and so we're evaluating it.

我会保持一个大局,我会让Ganesh添加更多细节。 但基本上,我们已经提到我们将出售10亿美元的证券,这是我们将要做的事情之一。 但同样,作为我们计划的一部分以及我们过去两三年来一直执行的计划,如果我们有机会看到一些可能不良的住房抵押贷款。

当我们看看波多黎各的经济时,实际上联邦资金已经下降,如果我们有机会对其中一些资产进行良好的估值,我们肯定会看一看。 但这是我们一直在做的事情。 随着飓风玛丽亚之后的时间已经过去,我们所看到的就是岛上对这些资产的出价要好一点,所以我们正在对它进行评估。

Ganesh Kumar

And Joe, just to add on that, Scotia has done as Jose pointed out in this prepared remarks, Scotia has done excellent job in reducing the asset quality issues and improving it. But one of the things that you might have noticed is the acquisition with Scotia has mortgage servicing capabilities. So we would have a servicing capability, which is capital at this point in time. Today, we do 50-50. We service our -- 50% of our portfolio, remaining 50% is being serviced outside. And I think this is an opportunity for us to exploit that capability that we have acquired and further work on the NPAs.

而乔只是补充一点,斯科舍所做的就像何塞在这篇准备好的言论中指出的那样,Scotia在减少资产质量问题和改善它方面做得非常出色。 但您可能已经注意到的一件事是Scotia的收购具有抵押贷款服务能力。 因此,我们将拥有服务能力,这是此时的资本。 今天,我们做50-50。 我们服务于我们 - 50%的投资组合,剩下的50%在外面提供服务。 我认为这是我们利用我们获得的能力并进一步开展国家行动计划工作的机会。

会议主持员

Your next question comes from the line of Glen Manna of Keefe, Bruyette & Woods.

你的下一个问题来自Keefe,Bruyette&Woods的Glen Manna。

Glen Manna

I wanted to follow up on Joe's question. I think if you look at the loans that Scotia has in Puerto Rico and you take out $940 million in mortgages that are covered by the FDIC that gives you $1.3 billion in loans that are a core book for their customers that becomes your base of growth. Do you have any idea what you expect to grow? Can we expect that would grow at your expectations for the core OFG Puerto Rico book?

我想跟进乔的问题。 我想如果你看一下Scotia在波多黎各的贷款,你拿出了9.4亿美元的抵押贷款,这笔抵押贷款给FDIC提供了13亿美元的贷款,这笔贷款是他们客户的核心账本,成为你的增长基础。 你知道你期望成长吗? 我们能否期望这会对您的OFG波多黎各核心书的预期增长?

Jose Rafael Fernandez

From our analysis and from our model, we really are not putting any growth. So the analyses and the way we look at this transaction does not have a growth component going forward from that operation. And we…

从我们的分析和我们的模型,我们真的没有任何增长。 因此,分析和我们看待此交易的方式没有从该操作向前推进的增长部分。 和我们…

Ganesh Kumar

Not that they cannot grow, but we're not modeling, we're being conservative.

并不是说他们不能成长,但我们没有建模,我们保守。

Glen Manna

On the deposit side of this deal, it clearly gives you a little more swagger down on the island and maybe a little more pull. Even if you take out the broker deposits in your cost of interest bearing deposits, you're still above Scotiabank. Do you have any plans to migrate your cost of deposit structure, the prices you are paying to the Scotia platform? Are there are any opportunities there?

在这笔交易的存款方面,它显然让你在岛上更加昂首阔步,也许更多的拉动。 即使您以经纪存款的成本取出经纪人存款,您仍然高于丰业银行。 您是否有计划迁移您的存款结构成本,以及您向Scotia平台支付的价格? 那里有机会吗?

Jose Rafael Fernandez

We're actually going to look at all those things in detail as we continue to plan for our integration and how we're going to do the product integration et cetera. So it's a little bit too early for us to be specific on that question.

我们实际上会详细研究所有这些事情,因为我们将继续计划我们的集成以及我们将如何进行产品集成等等。 因此,对于我们来说,对这个问题进行具体说明还为时尚早。

Ganesh Kumar

Also, if you look at the cost components, you can't just look at the other cost of funds and compare all the deposits that that's the same thing. There will be capital with different categories we might want to -- we will want to pick and chose and that's where the optimization question comes post closing.

此外,如果您查看成本要素,您不仅可以查看其他资金成本,还可以比较所有相同的存款。 将会有我们可能想要的不同类别的资本 - 我们将需要选择并且这是优化问题在结束后的位置。

会议主持员

[Operator instructions] Your next question is a follow up from Brett Rabatin of Piper Jaffray.

[操作员说明]您的下一个问题是Piper Jaffray的Brett Rabatin的后续问题。

Brett Rabatin

I wanted to ask, so the narrative before this deal was announced for OFG was thought that you would become this mid or the small to mid commercial bank and that's what you were targeting in Puerto Rico and you've now picked up a sizable consumer operation. Can you just give us update on how this changes your commercial initiative? Does this mean you'll go after larger commercial clients? Does this mean you're going to focus more on growth of the consumer book? Can you just tell us how this updates your overall strategy relative to the previous narrative that you had?

我想问一下,所以在为OFG宣布这笔交易之前的叙述被认为会成为这个中期或中小型商业银行,这就是你在波多黎各的目标,你现在已经选择了相当大的消费者操作。 您能否向我们提供有关如何改变您的商业计划的最新消息? 这是否意味着你会追求更大的商业客户? 这是否意味着您将更多地关注消费者图书的增长? 您能否告诉我们这相对于您之前的叙述如何更新您的整体策略?

Jose Rafael Fernandez

So let me just start by saying that our previous narrative is the present narrative. That means when we look at transaction like this, we always said that we will put our capital if it was a significant financially compelling transaction, which we believe this is. And that's why we're deploying the capital in this acquisition.
Now, our perspective is that the assets that we are acquiring gives us the balance sheet that is well diversified. We have a good auto portfolio that will be increased by around $200 million from this acquisition. Residential is around 24%, 25%, it will grow to 36%, 37%. And then commercial becomes another third. So in reality when you look at our asset allocation in terms of assets -- in terms of loan, is well diversified. And we will be focusing on all three businesses as we allocate capital going forward and profitability.
But again, the key here is and what allows us to be financially flexible and actually strategically also optimal is the customer, the process core base. And that is what's really valuable here. We not only grow in scale and reach 15% or so market share in this market, which is certainly skewed. So we're going to be using that core deposit to be able to -- to deploy it in loans. And if our ROE gets improved by declining consumer commercial or residential, it's just the way we will allocate the capital, going forward.
But again, Brett, we believe this is a very good transaction for us from a financial and also strategic and the flexibility it gives us going forward. And the proof is in the putting. We got to get to December and hopefully by then we'll have all the regulatory chiefs aligned and get an approval to closing. And then execution on our integration and business development plan. And that's what we've done in the past into acquisitions and we plan on repeating it a third time and we're excited about it.

所以,首先我要说的是,我们以前的叙述是现在的叙述。这意味着当我们看到这样的交易时,我们总是说如果这是一项重大的财务上令人信服的交易,我们将把我们的资金投入,我们相信这是。这就是我们在此次收购中部署资金的原因。

现在,我们的观点是,我们收购的资产为我们提供了多元化的资产负债表。我们拥有良好的汽车组合,此次收购将增加约2亿美元。住宅约为24%,25%,它将增长到36%,37%。然后商业成为另外三分之一。因此,实际上,当您从资产方面看我们的资产配置时 - 就贷款而言,是多元化的。随着我们分配资金和盈利能力,我们将专注于所有三项业务。

但同样,关键在于,是什么让我们在财务上具有灵活性,实际上战略上也是最优的是客户,即流程核心基础。这就是真正有价值的东西。我们不仅规模扩大,在这个市场上达到15%左右的市场份额,这肯定是扭曲的。因此,我们将使用该核心存款来 - 将其部署在贷款中。如果我们的ROE通过消费者商业或住宅的下降而得到改善,那就是我们将继续分配资金的方式。

但同样,Brett,我们相信这对我们来说是一次非常好的交易,从财务和战略以及它给我们前进的灵活性。证据就在于推杆。我们得到了12月,希望到那时我们将让所有的监管主管保持一致,并获得批准。然后执行我们的集成和业务开发计划。这就是我们过去在收购中所做的事情,我们计划第三次重复它,我们对它感到兴奋。

Brett Rabatin

And then what does this mean for OFG USA? Does this change the strategy with that platform in anyway?

那对于美国来说意味着什么呢? 无论如何,这会改变该平台的策略吗?

Jose Rafael Fernandez

I think, the OFG USA strategy will continue. It's a strategy that I think need to continue its own path for us to geographically diversify. And I think given the scale that this deal gives us and given the leverage that it gives us in this market, I think it's justifiable that we continue our prudent methodical way of deploying some capital to the U.S. on the loan side. That's how we see it. We haven't changed our approach to that.

我认为,OFG USA战略将继续下去。 我认为这是一种策略,需要继续为我们提供地理上多样化的途径。 我认为,考虑到这笔交易给我们带来的规模,并考虑到它在这个市场中给予我们的杠杆作用,我认为我们继续采用谨慎有条理的方式在贷款方面向美国部署一些资金是合理的。 这就是我们看待它的方式。 我们没有改变我们的方法。

Brett Rabatin

So would it be fair to assume that book continues to grow $25 million, $50 million quarter based on what they can find that make sense to put on the books?

那么可以公平地假设这本书继续增长2500万美元,每季度5000万美元,基于他们所能找到的有意义的书籍?

Jose Rafael Fernandez

It depends on the opportunity.

这取决于机会。

Ganesh Kumar

The direction or magnitude doesn't change just because of this.

方向或幅度不会因此而改变。

Jose Rafael Fernandez

We will continue to seek out opportunities, we'll continue to compare returns and again, as Ganesh said, it doesn't change what we've done in the past.

我们将继续寻找机会,我们将继续比较回报,如Ganesh所说,它不会改变我们过去做过的事情。

会议主持员

Your next question is a follow-up from Joe Gladue of Alden Securities.

您的下一个问题是Alden Securities的Joe Gladue的后续问题。

Joe Gladue

I just wanted to clarify a little bit about the timing of the cost saves. With the 75% expected to be realized in 2020. Just wondering that doesn't mean that there's still a significant amount of restructuring that needs to take place after 2020. It just means that all of those actions you've taken up till then won't be fully reflected in the run rate by the end of the year. Is that accurate?

我只是想澄清节省成本的时间。 预计到2020年将实现75%。只是想知道这并不意味着2020年之后仍需要进行大量的重组。这只是意味着你所采取的所有行动都会赢得 在年底之前不能完全反映在运行率上。 那是准确的吗?

Ganesh Kumar

No, modeling wise, we are assuming 75% of the $35 million that we are talking about will be realized by the end of the year. So what's remaining is the remaining 25% that's what taken into effect. And if you're going to ask me is the whole $35 million will be there right from the day one, no. We have to start doing the integration from day one and it's going to step afterwards.

不,建模明智,我们假设我们所谈论的3500万美元中的75%将在今年年底实现。 剩下的就是剩下的25%才是生效的。 如果你打算问我,从第一天开始就有3500万美元,不会。 我们必须从第一天开始进行整合,然后逐步进行。

Joe Gladue

Do you have an estimate of when systems conversion is planned?

您是否计算了何时计划系统转换?

Ganesh Kumar

Let's take a breather, a moment of breather and celebrate the deal first and then we can think about that. But not to be frivolous about it, I think we are as in prior transactions, we hope to shoot for a 12 month timeframe for transition and that's what we're working on. And we're trying to make this thing as quick as possible, as painless as possible for our customers. So we'll think about it.

让我们休息一下,休息一下,先庆祝这笔交易,然后我们就可以考虑一下。 但不要对此轻描淡写,我认为我们就像之前的交易一样,我们希望拍摄12个月的过渡期,这就是我们正在努力的方向。 我们正努力尽可能快地完成这件事,尽可能让我们的客户轻松自如。 所以我们会考虑一下。

会议主持员

This is your final opportunity to ask questions [Operator Instructions]. Thank you. And now I'll turn the call to Mr. Fernandez for any closing comments.

这是您提出问题的最后机会[操作员说明]。 谢谢。 现在,我将致电费尔南德斯先生发表任何结束评论。

Jose Rafael Fernandez

Thank you, operator. And thank you to all the shareholders who have listened in and we will be announcing our earnings results later in the month of July. We look forward to continuing the dialogue with you and look forward to that call. Have a great time and great day. And we will be in touch. Thank you.

谢谢运营商。 感谢所有听过的股东,我们将在7月晚些时候公布我们的收益结果。 我们期待继续与您进行对话,并期待这一呼吁。 度过美好的时光和美好的一天。 我们会保持联系。 谢谢。

会议主持员

Thank you. That does conclude OFG Bancorp's conference call. You may now disconnect.

谢谢。 这确实结束了OFG Bancorp的电话会议。 您现在可以断开连接。

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