Ofg Bancorp · NYSE:OFG
Ofg Bancorp — Merger or Acquisition (June 2019)
13 slides from Ofg Bancorp's merger presentation, Jun 27, 2019
Slide 1: Acquisition of Bank of Nova Scotia's Puerto Rico & USVI Operations
Acquisition of Bank of Nova Scotia’s Puerto Rico & USVI Operations June 27, 2019 Exhibit 99.2
Slide 2: 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
Slide 3: Acquisition Overview
Acquisition Overview Description Acquired BNS PR & USVI Operations Acquisition of BNS’s Puerto Rico operations(1) for $550mm and USVI branch operation for $10mm deposit premium BNS to dividend $500mm of excess capital, out of its PR operations, prior to close(2) 100% cash transaction using available
Slide 4: Transaction Rationale
Transaction Rationale Franchise Enhancing Strongly Accretive and Financially Attractive Mitigated Execution Risk Enhances our scale in the market and improves our competitive positioning Pro forma company will have the #2 deposit market share on the Island Adds a strong core deposit franchise with e
Slide 5: Conservative Pricing and Attractive Returns
Conservative Pricing and Attractive Returns Acquisition Multiple Analysis Attractive Financial Return EPS Accretion ~40% Accretive to EPS in 2020(3) Tangible Book Value per Share Tangible book value per share dilution of ~15% at close Earnback period less than 3 years using the crossover method Cost
Slide 6: Scotiabank Puerto Rico
Founded in 1910 and headquartered in San Juan Leading deposit franchise with 980 full-time employees, 19 branches, and 200k+ retail customers Provides personal and commercial banking, corporate financing and insurance services to local clients Scotiabank Puerto Rico 1975: Scotiabank acquired Banco M
Slide 7: Pro Forma Puerto Rico Market Position
Pro Forma Puerto Rico Market Position Assets ($bn) Deposit Market Share(1) Branches Source: S&P Global Market Intelligence, Financial, public SEC and regulatory filings Per “Puerto Rico Financial Activity Report December 2018” published by Office of the Commissioner of Financial Institutions (“OCFI”
Slide 8: BNS USVI Operation Overview
Two well established branches Saint Thomas Saint Croix 57% loan to deposit ratio Mortgage focused loan book 60 dedicated employees 15 ATMs 0.30% cost of deposits BNS USVI Operation Overview Loan Composition 3/31/19 Deposit Composition 3/31/19 Source: Company documents Per USVI Bankers Association ma
Slide 9: Loan & Deposit Mix
Loan & Deposit Mix $4.9bn Source: S&P Global Market Intelligence Note: OFG data per holding company regulatory filings as of 3/31/2019; BNS PR data per bank level regulatory filings as of 3/31/2019, plus loans and deposits from BNS PR branch as of 4/30/2019 and USVI branches as of 3/31/2019 MRQ Cost
Slide 10: Transaction Assumptions
Transaction Assumptions Transaction Assumptions Consideration $550 million for BNS’s Puerto Rico operations(1) and $10 million deposit premium for BNS’s USVI branch operation 100% cash consideration Financing Consideration to be paid from cash on OFG’s balance sheet Loan Credit Mark 5.1% credit mark
Slide 11: Result: Well-Capitalized Balance Sheet
Result: Well-Capitalized Balance Sheet Capital Ratios Reported OFG (3/31/19A) Pro Forma (12/31/19E)(2) TCE / TA 13.1% ~8.5% Tier 1 Leverage 14.6 ~9.5 Common Equity Tier 1 Ratio 17.1 ~11.5 Total Risk Based Capital 20.8 ~14.5 Summary Key Balance Sheet Items Assets: 3/31/19A 3/31/19A 12/31/19E ($ in bi
Slide 12: Conclusion
Conclusion Combining two excellent banks to create a strongly capitalized, market leading institution focused on the needs of consumers and businesses Improving the balance in the Puerto Rico market and creating the 2nd largest institution by core deposits Opportunity to leverage a strong core depos
Slide 13: Contacts
Contacts IR Coordinator: Gary Fishman (gfishman@ofgbancorp.com) at 212-532-3232 IR Coordinator: Steven Anreder (sanreder@ofgbancorp.com) at 212-532-3232