OFG BANCORP (OTCMKTS:OFGIP) Files An 8-K Completion of Acquisition or Disposition of Assets
Item 2.01. Completion of Acquisition or Disposition of Assets.
SBPR Acquisition
On December 31, 2019, Oriental Bank (the Bank), a wholly-owned subsidiary of OFG Bancorp (the Company), completed its previously announced acquisition of Scotiabank de Puerto Rico (SBPR), a bank chartered under the laws of Puerto Rico, from The Bank of Nova Scotia, a Schedule I bank chartered under the laws of Canada (BNS), to that certain Stock Purchase Agreement, dated as of June 26, 2019 (the SPA), by and between the Bank, BNS and, solely for the purposes set forth in the SPA (the SBPR Acquisition), the Company for $550 million in cash.
Upon the closing of the SBPR Acquisition, the Bank will have a well-diversified loan portfolio totaling $7.2 billion, deposits of $7.9 billion, and approximately 500,000 customers. Its mortgage servicing portfolio will expand five-fold to approximately $5 billion, providing critical mass to become a meaningful source of non-interest income. In addition, the Bank will have more than 2,400 employees and will have 55 branches, 11 Interactive Teller Machines, 460 ATMs, and access to 55,000+ surcharge free Allpoint ATMs in Puerto Rico and Stateside.
USVI Branch Acquisition
On December 31, 2019, the Bank completed its previously announced acquisition of the U.S. Virgin Islands (the USVIs) banking operations of BNS through an acquisition of certain assets (including loans, ATMs and physical branch locations) and an assumption of certain liabilities (including deposits) (the USVI Transaction) to that certain Sale and Purchase Agreement (USVI), dated as of June 26, 2019 (the USVI Purchase Agreement), by and between the Bank, BNS and, solely for the purposes set forth in the USVI Purchase Agreement, the Company. At the closing of the USVI Transaction, BNS paid the Bank approximately $178.3 million in cash, which represents the estimated closing payment to the terms of the USVI Purchase Agreement. The Banks USVI customer deposits are insured by the Federal Deposit Insurance Corporation (FDIC) up to the maximum provided by law.
PR Branch Acquisition
On December 31, 2019, the Bank completed its previously announced acquisition of certain loans and other assets, and assumption of certain liabilities, from BNSs Puerto Rico branch (the PR Transaction) to that certain Sale and Purchase Agreement (PR), dated as of June 26, 2019 (the PR Purchase Agreement), by and between the Bank, BNS and, solely for the purposes set forth in the PR Purchase Agreement, the Company. At the closing of the PR Transaction, the Bank paid BNS approximately $53.5 million in cash, which represents the estimated closing payment to the terms of the PR Purchase Agreement.
The description of the SBPR Acquisition, USVI Transaction and the PR Transaction, as well as the SPA, the USVI Purchase Agreement and PR Purchase Agreement, do not purport to be complete and are subject to, and qualified in their entirety by reference to, the full text of the SPA, USVI Purchase Agreement and PR Purchase Agreement, which were filed as Exhibits 2.1, 2.2 and 2.3 to the Companys Current Report on Form 8-K, filed with the Securities and Exchange Commission on July 2, 2019, and which is incorporated herein by reference.
Transitional Services
Upon closing of the transactions described in this Current Report on Form 8-K, the Bank will, to a transition services agreement, continue to use certain Scotiabank technology platforms and services for a transitional period. As a result, customers can interact with the Bank, and use branches, as they do currently without any need for change. In addition, customers will be able to use all the Bank ATMs at no charge and make credit card, mortgage, car and personal loan payments and make deposits by cash or check through express mailboxes in all branches.
Item 7.01. Regulation FD Disclosure.
The information provided in Item 2.01 is incorporated herein by reference.