UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________________
FORM 11-K
_________________________
FOR ANNUAL REPORTS OF EMPLOYEE
STOCK REPURCHASE SAVINGS AND
SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
………………………………………………………………………………………………………..
x
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the fiscal year ended
December 31,
2016
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from __________ to __________
Commission file number
001-12647
A. Full title of the plan and
the address of the plan, if different from that of the issuer named below:
The Oriental Bank
CODA Profit Sharing Plan
c/o Oriental Bank
254 Muñoz Rivera Avenue,
Oriental Center 15
th
Floor
San Juan, Puerto Rico 00918
B. Name of issuer of the
securities held pursuant to the plan and the address of its principal executive
office:
OFG BANCORP
254 Muñoz Rivera Avenue,
Oriental Center 15
th
Floor
San Juan, Puerto Rico 00918
The Oriental Bank CODA
Profit Sharing Plan
TABLE OF CONTENTS
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Page
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Report
of Independent Registered Public Accounting Firm
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1
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Financial
Statements:
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Statements of
Net Assets Available for Benefits as of December 31, 2016 and 2015
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2
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Statement of
Changes in Net Assets Available for Benefits for the year ended
December 31,
2016
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3
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Notes to
Financial Statements
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4 – 11
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Supplemental
Schedule:
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Schedule I
– Schedule H, Line 4i - Schedule of Assets (Held at Year End) as of
December 31,
2016
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12
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Exhibits
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13
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Signatures
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14
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Report
of Independent Registered Public Accounting Firm
The 1165(e) Retirement Plan
Committee
The Oriental Bank CODA
Profit Sharing Plan:
We have audited the
accompanying statements of net assets available for benefits of The Oriental
Bank CODA Profit Sharing Plan (the Plan) as of December 31, 2016 and 2015, and
the related statement of changes in net assets available for benefits for the year
ended December 31, 2016. These financial statements are the responsibility of
the Plan’s management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the
financial statements referred to above present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
2016 and 2015, and the changes in net assets available for benefits for the
year ended December 31, 2016, in conformity with U.S. generally accepted
accounting principles.
The supplemental information
in the accompanying Schedule H, Line 4i – Schedule of Assets (Held at End of
Year) as of December 31, 2016, has been subjected to audit procedures performed
in conjunction with the audit of the Plan’s 2016 financial statements. The
supplemental information is presented for the purpose of additional analysis
and is not a required part of the financial statements but include supplemental
information required by the Department of Labor’s Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental information is the responsibility of the Plan’s
management. Our audit procedures included determining whether the supplemental
information reconciles to the financial statements or the underlying accounting
and other records, as applicable, and performing procedures to test the
completeness and accuracy of the information presented in the supplemental
information. In forming our opinion on the supplemental information, we
evaluated whether the supplemental information, including its form and content,
is presented in conformity with the Department of Labor’s Rules and Regulations
for Reporting and Disclosure under the Employee Retirement Income Security Act
of 1974. In our opinion, the supplemental information in the accompanying
Schedule H, Line 4i – Schedule of Assets (Held at End of Year) as of December
31, 2016, is fairly stated in all material respects in relation to the 2016
financial statements as a whole.
/s/
KPMG LLP
San
Juan, Puerto Rico
June
28, 2017
Stamp
No.E272381 of the Puerto Rico
Society
of Certified Public Accountants
was
affixed to the record copy of this report.
THE ORIENTAL BANK CODA PROFIT SHARING PLAN
Statements
of Net Assets Available for Benefits
December
31, 2016 and 2015
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2016
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2015
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Assets:
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Investments at fair value:
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Cash and money market instruments
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$
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161,160
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$
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7,640
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Common stock
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4,327,199
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2,015,839
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Insurance company investment contracts
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(pooled separate accounts)
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34,563,896
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31,790,475
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39,052,255
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33,813,954
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Fully benefit-responsive investment contract
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(stable value fund), at contract value
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7,521,741
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7,377,514
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Total investments
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46,573,996
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41,191,468
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Receivables:
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Dividends
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19,819
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16,523
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Notes receivable from participants
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13,282
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19,851
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Total receivables
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33,101
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36,374
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Other assets
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25,598
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12,166
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Total assets
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$
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46,632,695
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$
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41,240,008
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Liabilities:
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Other liabilities
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$
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63,815
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$
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105,216
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Total liabilities
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63,815
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105,216
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Net assets available for benefits
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$
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46,568,880
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$
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41,134,792
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See accompanying notes to financial
statements.
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THE ORIENTAL BANK CODA PROFIT SHARING PLAN
Statement
of Changes in Net Assets Available for Benefits
Year
ended December 31, 2016
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2016
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Additions
to net assets attributed to:
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Net appreciation in fair value of investments
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$
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4,138,977
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Dividends
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79,181
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Interest and other
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138,436
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Contributions:
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Participants
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2,937,186
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Employer
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792,262
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Total additions
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8,086,042
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Deductions
from assets attributed to:
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Benefits paid to participants
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(2,551,263)
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Administrative fees
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(100,691)
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Total deductions
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(2,651,954)
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Net increase
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5,434,088
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Net
assets available for benefits:
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Beginning of year
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41,134,792
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End of year
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$
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46,568,880
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See accompanying notes to financial
statements.
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THE
ORIENTAL BANK CODA PROFIT SHARING PLAN
NOTES TO
FINANCIAL STATEMENTS
YEARS
ENDED DECEMBER 31, 2016 AND 2015
(1)
Description of the Plan
The following description of
The Oriental Bank CODA Profit Sharing Plan (the “Plan”) provides only general
information. Participants should refer to the plan agreement for a more
complete description of the Plan’s provisions.
(a)
General
The Plan was organized on January 1, 1992
as a defined contribution plan originally maintained by Oriental Bank (the
“Employer”), a wholly owned subsidiary of OFG Bancorp (the “Company”), for the
benefit of the Employer’s and its affiliated companies’ employees who are
residents of Puerto Rico and are age 21 or older. The Plan is intended to be a
qualified plan pursuant to the Puerto Rico Internal Revenue Code of 2011, as
amended (the “2011 Code”). It contains a cash or deferred arrangement qualifying
under the 2011 Code and is subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”).
(b)
Contributions
Each year, participants may contribute up
to the maximum deferral amount under the provisions of Section 402(g) of the
U.S. Internal Revenue Code as annually indexed by the U.S. Internal Revenue
Service (for both periods, 2016 and 2015, the limits were $18,000). If, in
addition to a deferral election under the Plan, participants contribute to an
individual retirement account in Puerto Rico (“PR-IRA”), pre-tax contributions
to both the Plan and a PR-IRA in the aggregate cannot exceed the sum of the
annual deferral limit under the 2011 Code ($20,000 for the tax years ended
December 31, 2016 and 2015). Participants may also contribute amounts
representing distributions from other Puerto Rico and U.S. qualified defined
benefit or contribution plans.
Participants direct the investment of their
contributions into various investment options offered by the Plan. The Plan
currently offers pooled separate accounts, a stable value fund, and shares of
common stock of the Company as investment options for participants. Participants
direct the investment of their matching contributions in the Plan. The Employer
provides a discretionary matching contribution of 50% of each participant’s
contributions up to a maximum contribution for matching purposes of 4% of the
participant’s compensation per year.
(c)
Participant Accounts
Each participant’s account is credited with
the participant’s contribution and allocations of the Employer’s contribution
and Plan earnings, and charged with an allocation of administrative fees.
Allocations are based on participant earnings or account balances, as defined.
The benefit to which a participant is entitled to is the benefit that can be
provided from the participant’s vested account.
(d)
Vesting
Participants are immediately vested in
their contributions plus actual earnings thereon. The Employer’s contribution
portion of their accounts plus actual earnings thereon vest upon the occurrence
of any of the following events: completion of three years of credited service;
attaining age 65; total disability while employed by the Employer; or death
while employed by the Employer.
(e)
Payment of Benefits
On termination of service due to death,
disability, or retirement, a participant or its heirs may elect to receive the
value of the vested interest in his or her account in either a lump sum amount,
a fixed period that may not exceed the participant’s life expectancy or through
a fixed annuity contract. For termination of service for other reasons, a
participant may receive the value of the vested interest in his or her account
as a lump sum distribution.
THE
ORIENTAL BANK CODA PROFIT SHARING PLAN
NOTES TO
FINANCIAL STATEMENTS
YEARS
ENDED DECEMBER 31, 2016 AND 2015
(f)
Loans to Participants
The Plan does not allow for loans to
participants. In October 2013, the Plan Participación en Beneficios 1081 Banco
Bilbao Vizcaya Argentaria Puerto Rico ("BBVAPR"), a defined
contribution plan which covered all fulltime employees of the former BBVAPR
Bank, transferred its existing participant loans amounting to approximately $54,000
to the Plan. These loans will be extinguished as they are repaid by
participants. Loan terms range from 1-5 years or up to 30 years for a home
loan. The loans are secured by the balance in the participant’s account and bear
interest at a rate commensurate with the interest rate charged by persons in
the business of lending money for loans which would be made under similar
circumstances. Principal and interest is paid ratably through payroll
deductions. No additional loans will be granted to participants.
(g)
Forfeited Accounts
Employer contributions that are not vested
upon termination of employment are forfeited and may be used to pay
administrative expenses and then reduce future contributions to the Plan by the
Employer. For the year ended December 31, 2016, no forfeitures were used to
offset Employer contributions. At December 31, 2016, the Plan had approximately
$10,000 in forfeitures available to pay administrative expenses and reduce
future Employer contributions. For the year ended December 2015 forfeitures
totaling approximately $9,000 were used to offset Employer contributions. At
December 31, 2015 the forfeiture account had no balance.
(h)
Plan Termination
Although it has not expressed any intent to
do so, the Employer has the right under the Plan to discontinue its
contributions at any time and to terminate the Plan subject to the provisions
of ERISA. In the event of Plan termination, participants will become 100%
vested in their Employer’s contributions.
(2)
Summary of Significant
Accounting Policies
Following are the significant
accounting policies followed by the Plan:
(a)
Basis of Presentation
The accompanying financial statements have
been prepared under the accrual method of accounting.
(b)
Use of Estimates
The preparation of financial statements in
conformity with U.S. generally accepted accounting principles requires the plan
administrator to make estimates and assumptions that affect the reported
amounts of assets and liabilities and changes therein, and disclosure of contingent
assets and liabilities. Actual results could differ from those estimates. A material
estimate that is particularly susceptible to significant change in the near
term is the valuation of investments.
(c)
Risks and Uncertainties
The Plan invests in various financial
instruments. Investment securities are exposed to various risks, such as
interest rate, credit, and market risks. Due to the level of risk associated
with certain investment securities, it is reasonably possible that changes in
the fair values of investment securities will occur in the near term and that
such changes could materially affect participants’ account balances and the
amounts reported in the statements of net assets available for benefits.
(d)
Investments Valuation
and Income Recognition
Plan investments, other than fully
benefit –responsive investment contracts (FBRICs), are stated at fair value.
See Note 3 for discussion of fair value measurements.
FBRICs are reported at contract value, which is the
amount participants would receive if they were to initiate permitted
transactions under the terms of the Plan. The Plan invests in FBRICs through
the Stable Value Fund.
THE
ORIENTAL BANK CODA PROFIT SHARING PLAN
NOTES TO
FINANCIAL STATEMENTS
YEARS
ENDED DECEMBER 31, 2016 AND 2015
Purchases and
sales of securities are recorded on a trade date basis. Interest income is
recorded on the accrual basis. Dividends are recorded on the declaration date,
taking into consideration the ex-dividend date. Net appreciation/ depreciation
includes the Plan’s gains and losses on investments bought and sold as well as
held during the year.
(e)
Payments of Benefits
Benefits are recorded when paid.
(f)
Plan Expenses
Under the Plan’s contract entered into with
Transamerica Retirement Solutions Corporation ("Transamerica"),
contract asset charges are assessed each month based on the actual combined
balance of all separate accounts and the stable value fund. These charges are
presented as administrative fees in the statement of changes in net assets
available for benefits.
Administrative expenses, including trustee,
legal, auditing, and other fees, may be paid out of the invested assets unless
paid by the Employer. Expenses paid and absorbed by the Employer during the
year ended December 31, 2016 amounted to $109,794.
(g)
Recent Accounting
Developments
Accounting standards that have been issued by the
Financial Accounting Standards Board ("FASB") or other
standards-setting bodies are not expected to have a material impact on the
Plan's statements of net assets available for benefits, or the related
statement of changes in net assets available for benefits.
(3)
Fair Value
As discussed in Note 2,
the Plan uses the fair value measurement framework under U.S. generally
accepted accounting principles.
Reclassifications
During 2016, plan management
re-evaluated the measurement inputs that are available for the Pooled Separate
Accounts.
Plan management determined that
these investments do not qualify for the use of net asset value as a practical
expedient as these investments have a readily determinable fair value and has
concluded that they should be included in the fair value hierarchy table. Plan
management has reclassified these investments within the 2015 fair value
hierarchy.
Fair Value Measurement
Fair value is the exchange price
that would be received for an asset or paid to transfer a liability (an exit
price) in the principal or most advantageous market for the asset or liability
in an orderly transaction between market participants on the measurement date.
The fair value hierarchy requires an entity to maximize the use of observable
inputs and minimize the use of unobservable inputs when measuring fair value.
The three levels of inputs that may be used to measure fair value are:
Level 1
– assets include equity securities that are traded in
an active exchange market, as well as certain money market instruments.
Valuations are obtained from readily available pricing sources for market
transactions involving identical assets.
Level 2
– observable inputs other than Level 1 prices such as
quoted prices for similar assets; quoted prices in markets that are not active;
or other inputs that are observable or can be corroborated by observable market
data for substantially the full term of the assets.
THE
ORIENTAL BANK CODA PROFIT SHARING PLAN
NOTES TO
FINANCIAL STATEMENTS
YEARS
ENDED DECEMBER 31, 2016 AND 2015
Level 3
– unobservable inputs that are supported by
little or no market activity and that are significant to the fair value of the
assets or liabilities. Level 3 assets include financial instruments whose value
is determined using pricing models, for which the determination of fair value requires
significant management judgment or estimation. As of December 31, 2016 and 2015,
the Plan did not have such assets.
The following is a description of the
valuation methodologies used for instruments measured at fair value:
Shares of the Company’s common stock
: valued at quoted closing market prices
(“Level 1”).
Money Market Instruments
: stated at fair value, which approximates
cost plus accumulated interest earnings less distributions to date (“Level 1”).
Pooled Separate Accounts
: stated at fair value. The fair value is
determined by the issuer and is valued daily using publicly available quoted
market prices matched with the current underlying investment holdings of the
accounts (“Level 2”).
The estimated fair value is subjective in
nature and involves uncertainties and matters of significant judgment and,
therefore, cannot be determined with precision. Changes in assumptions could
affect these fair value estimates. The fair value estimates do not take into
consideration the value of future business and the value of assets and
liabilities that are not financial instruments.
There were no
transfers into or out of Level 1 and Level 2 fair value measurements during the
years ended December 31, 2016 and 2015.
The following tables
set forth by level, within the fair value hierarchy, the Plan’s fair value
measurements at December 31, 2016 and 2015:
|
December 31, 2016
|
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Fair Value Measurements
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Level 1
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Level 2
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Level 3
|
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Total
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Cash
and money market instruments
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$
|
161,160
|
|
$
|
-
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|
$
|
-
|
|
$
|
161,160
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Common
stock
|
|
4,327,199
|
|
|
-
|
|
|
-
|
|
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4,327,199
|
Pooled
separate accounts
|
|
|
|
|
|
|
|
|
|
|
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Hybrid (a)
|
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-
|
|
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14,552,188
|
|
|
-
|
|
|
14,552,188
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Bond (b)
|
|
-
|
|
|
4,981,817
|
|
|
-
|
|
|
4,981,817
|
International Equity (c)
|
|
-
|
|
|
1,584,375
|
|
|
-
|
|
|
1,584,375
|
Equity - Large Cap (d)
|
|
-
|
|
|
9,620,491
|
|
|
-
|
|
|
9,620,491
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Equity - Mid Cap (e)
|
|
-
|
|
|
2,907,536
|
|
|
-
|
|
|
2,907,536
|
Equity - Small Cap (f)
|
|
-
|
|
|
917,489
|
|
|
-
|
|
|
917,489
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|
$
|
4,488,359
|
|
$
|
34,563,896
|
|
$
|
-
|
|
$
|
39,052,255
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THE
ORIENTAL BANK CODA PROFIT SHARING PLAN
NOTES TO
FINANCIAL STATEMENTS
YEARS
ENDED DECEMBER 31, 2016 AND 2015
|
December 31, 2015
|
|
Fair Value Measurements
|
|
Level 1
|
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Level 2
|
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Level 3
|
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Total
|
Cash
and money market instruments
|
$
|
7,640
|
|
$
|
-
|
|
$
|
-
|
|
$
|
7,640
|
Common
stock
|
|
2,015,839
|
|
|
-
|
|
|
-
|
|
|
2,015,839
|
Pooled
separate accounts
|
|
|
|
|
|
|
|
|
|
|
|
Hybrid (a)
|
|
-
|
|
|
12,123,553
|
|
|
-
|
|
|
12,123,553
|
Bond (b)
|
|
-
|
|
|
5,000,212
|
|
|
-
|
|
|
5,000,212
|
International Equity (c)
|
|
-
|
|
|
1,643,657
|
|
|
-
|
|
|
1,643,657
|
Equity - Large Cap (d)
|
|
-
|
|
|
9,240,688
|
|
|
-
|
|
|
9,240,688
|
Equity - Mid Cap (e)
|
|
-
|
|
|
3,041,700
|
|
|
-
|
|
|
3,041,700
|
Equity - Small Cap (f)
|
|
-
|
|
|
740,665
|
|
|
-
|
|
|
740,665
|
|
$
|
2,023,479
|
|
$
|
31,790,475
|
|
$
|
-
|
|
$
|
33,813,954
|
(a) The pooled separate accounts in
this category primarily invest in U.S. and non-U.S. stocks, and fixed-income
securities which may include bonds, mutual funds, cash equivalents or other
money market instruments.
(b) The pooled separate accounts in
this category primarily invest in bonds (at least 80% of total assets),
preferred stocks, cash equivalents or other money market instruments.
(c) The pooled separate accounts in
this category primarily invest at least 80% of assets in equity and debt
securities of issuers from countries outside of the United States.
(d) The pooled separate accounts in
this category primarily invest in equity securities of medium and large
capitalization companies, and may invest in securities of non-U.S. issuers.
(e) The pooled separate accounts in
this category primarily invest in domestic equity securities with growth
potential, including foreign equity securities and debt securities.
(f) The pooled separate accounts in
this category primarily invest in common stocks contained in both the Small Cap
1750 Index and the Russell 2000 Value Index.
Investments can be redeemed with no advance notice on any day on
which the New York Stock Exchange is open for trading.
(4)
Stable Value Fund
Transamerica offers a stable value fund that the participant may
elect to transfer all or part of their funds into. The stable value fund is considered
to be a fully benefit-responsive investment contract. Contract value is the
relevant measurement attribute for that portion of the net assets available for
benefits. Contract value, as reported by Transamerica, is the beginning balance
plus any deposit and credited interest, less any withdrawals, charges, or
expenses, a measurement that approximates fair value. Participants may
ordinarily direct the withdrawal or transfer of all or a portion of their
investment at contract value.
There are no reserves against contract value for credit risk of Transamerica
or otherwise. The contract value of the investment contract at December 31, 2016
and 2015 was $7,521,741 and $7,377,514, respectively. The stable value funds
invests in Guaranteed Investment Contracts ("GICs"). This investment
seeks to protect against any loss of principal while providing returns in
excess of money market funds and one year U.S. Treasury bills. The investment
has a portfolio investment rate design in which all deposits are credited with
the same interest rate, on a daily basis, and with no set maturity. The
effective credited interest rate is set monthly and effective on the first day
of the month. Contract charges may reduce this return. The Transamerica stable value
fund is not a separate account investment choice – it is an investment in Transamerica’s
general account.
THE
ORIENTAL BANK CODA PROFIT SHARING PLAN
NOTES TO
FINANCIAL STATEMENTS
YEARS
ENDED DECEMBER 31, 2016 AND 2015
Certain events limit the ability of the Plan to transact at contract
value with Transamerica. Such events include the following: (1) the Plan is
changed so as to significantly affect Transamerica’s obligations to the
contract, (2) the contract can no longer be treated as a pension plan contract,
(3) the Plan is terminated, (4) failure to comply with the contract’s
requirements, (5) failure to provide information, (6) the sum of the contract
account values at any time equals $20,000 or less, or (7) the failure of the
trust to qualify for exemption from federal income taxes or any required prohibited
transaction exemption under ERISA. The plan administrator is not aware of any
events, which would limit the Plan’s ability to transact at contract value with
participants that are probable.
(5)
Other assets
Transamerica rebates certain amounts to the plan
based on a fee concession. The rebate amount is equal to 12.5 basis points per
year based on the balances with Transamerica. This rebate is calculated on a
monthly basis and credited to the Expense Budge Account, a suspense account
used by Transamerica.
The Expense Budget Account may be used for plan
expenses or allocated to participants as additional income. At December
31, 2016 and 2015, the Plan did not apply this amount to expenses or to
participants. The balance remains in the Expense Budget Account and is included
as other assets in the statements of net asset available for benefits.
(6)
Related‑Party
Transactions
Certain Plan
investments are shares of the Company’s common stock. The Employer is the Plan
sponsor and trustee and a wholly owned subsidiary of the Company and,
therefore, qualifies as a party in interest. At December 31, 2016 and 2015, the
Plan held an investment of 330,321 and 275,837 shares of the Company’s common
stock, respectively. The fair value of the common stock at December 31, 2016
and 2015 was $4,327,199 and $2,015,839, respectively.
Transamerica
manages the pooled separate accounts, therefore, qualifies as party in interest.
Another party in interest to the Plan is MidAdtlantic, which serves as the
custodian for the Plan.
The
recordkeeper of the Plan is Oriental Pension Consultants, Inc. (“OPC”), a
subsidiary of the Company. Fees charged by OPC for services provided were
absorbed by the Employer.
THE
ORIENTAL BANK CODA PROFIT SHARING PLAN
NOTES TO
FINANCIAL STATEMENTS
YEARS
ENDED DECEMBER 31, 2016 AND 2015
(7)
Income Taxes
The Internal Revenue
Service ruled on March 31, 2014 that the Plan qualifies under
Section 401(a) of the Internal Revenue Code (“IRC”) under the volume
submitter program and the related trust is, therefore, not subject to tax under
the present income tax law. The Treasury Department of the Commonwealth of
Puerto Rico ruled on September 30, 2014 that the Plan qualifies with the
provisions of the Internal Revenue Code for a New Puerto Rico, as amended
(Code) and the Internal Revenue Circular Letter No. 11-10. The trust
established to fund the Plan is intended to be exempt from Puerto Rico and U.S.
income taxes, the 2011 Code, and the U.S. Code. As applicable, the Plan is
required to operate in conformity with the 2011 Code and the U.S. Code to
maintain its qualification. The Plan administrator believes that the Plan is
designed and operating in compliance with the applicable requirements of the
Puerto Rico Treasury Department (“PR Treasury”) and U.S. Code and remains
qualified.
U.S. generally
accepted accounting principles require plan management to evaluate tax
positions taken by the Plan and recognize a tax liability (or asset) if the
Plan has taken an uncertain position that more likely than not would not be
sustained upon examination by the IRS and the PR Treasury. As of December 31,
2016 and 2015, there are no uncertain tax positions taken or expected to be
taken that would require recognition or disclosure in the financial statements.
The Plan is subject to routine audits by taxing jurisdictions. However, there
are currently no audits in progress for any tax periods. The Plan is no longer
subject to income tax examinations for the years prior to 2013.
(8)
Excess Contributions
Payable to Participants
The Plan is subject to certain non-discrimination
rules under ERISA and the 2011 Code. For 2016 and 2015 the Plan failed certain
of the non-discrimination tests under the 2011 Code due to lower contribution
percentages by non-highly compensated eligible employees relative to the
contribution percentages of highly compensated eligible employees. In order to
meet the requirements of the non-discrimination rules, the Plan refunded a
portion of the contributions made by highly compensated participants, in
accordance with applicable provisions of the 2011 Code. The refund for 2016,
paid in March 2017, totaled $63,815. The refund for 2015, paid in March 2016,
totaled $105,216. The refunds are included as other liabilities in the statements
of net assets available for benefits.
(9)
Subsequent events
The Plan has
evaluated subsequent events from the statement of net assets available for
benefits date through June 28, 2017, the date of filing this Annual Report on
Form 11-K for the year ended December 31, 2016.
SCHEDULE I
THE ORIENTAL BANK CODA PROFIT
SHARING PLAN
Schedule H,
Line 4i - Schedule of Assets (Held at End of Year)
December 31,
2016
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(c)
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(b)
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Description of Investment, including
maturity
date, rate of interest, collateral, par,
or maturity value
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Identity of issue, borrower,
lessor, or similar party
Identity of issue, borrower,
lessor, or similar party
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(d)
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(e)
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(a)
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Cost
|
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Current value
|
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Participant
directed:
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*
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OFG
Bancorp
|
OFG Bancorp:
|
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Common
Stock; 330,321 shares
|
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**
|
$
|
4,327,199
|
*
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Transamerica
|
Pooled
Separate Accounts:
|
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Transamerica AA - Moderate; 360,994 units
|
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**
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7,535,301
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|
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|
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|
|
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WMC
Core Equity; 453,048 units
|
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**
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|
5,246,575
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|
|
|
|
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AEGON Balanced; 56,898 units
|
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**
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4,931,492
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SSgA
Russell Lg Cap Grth Ind; 229,480 units
|
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**
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3,712,025
|
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American Century Government Bond; 151,271 units
|
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**
|
|
2,918,134
|
|
|
|
|
|
|
|
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Fidelity Advisor Lev Co Stk; 36,271 units
|
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**
|
|
2,232,659
|
|
|
|
|
|
|
|
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|
SSgA
International Index; 61,532 units
|
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**
|
|
1,584,375
|
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Loomis Sayles Inv Grade Bond; 27,896 units
|
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**
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1,101,505
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Transamerica AA - Moderate Growth; 45,380 units
|
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**
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|
964,476
|
|
|
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|
|
|
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|
Transamerica AA - Growth; 33,822 units
|
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**
|
|
723,959
|
|
|
|
|
|
|
|
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|
Thornburg Core Growth; 28,306 units
|
|
**
|
|
658,988
|
|
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|
|
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|
SSgA
Russell LC Value Index; 23,517 units
|
|
**
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653,488
|
|
|
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Transameric Partners High Yield Bond; 13,008 units
|
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**
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|
524,903
|
|
|
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|
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|
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|
SSgA
Russell SC Value Index; 5,232 units
|
|
**
|
|
477,401
|
|
|
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|
Loomis Sayles Bond; 6,187 units
|
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**
|
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437,275
|
|
|
|
|
|
|
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|
TA
Vanguard Small- Cap Index; 1,999 units
|
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**
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416,564
|
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Transamerica AA - Conservative; 19,588 units
|
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**
|
|
396,960
|
|
|
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|
|
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|
TA
Vanguard Small- Cap Grth Idx; 630 units
|
|
**
|
|
23,524
|
|
|
|
|
|
|
|
|
|
Franklin Small-Mid Cap Growth; 620 units
|
|
**
|
|
15,889
|
|
|
|
|
|
|
|
|
|
Invesco American Value; 506 units
|
|
**
|
|
8,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,563,896
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and money markets
|
|
|
|
Cash
and Bank Deposit Sweep Program
|
|
**
|
|
161,160
|
|
|
Fully
benefit-responsive investment contract:
|
|
|
|
|
|
|
*
|
|
|
Transamerica
|
|
Transamerica
Stable Value; 385,174 units
|
|
**
|
|
7,521,741
|
|
|
Other
assets:
|
|
|
|
|
|
|
*
|
|
|
Transamerica
|
|
Expense
Budget Account
|
|
—
|
|
25,598
|
*
|
|
Notes
receivable from participants
|
|
Notes,
with interest rate of 9.5%; maturities ranges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
through
2032
|
|
—
|
|
13,282
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
46,612,876
|
*
|
|
Party-in-interest
as defined by ERISA
|
|
|
|
|
**
|
|
Not
applicable as these are participant directed.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
the accompanying report of independent registered public accounting firm.
|
INDEX
OF EXHIBITS
Exhibit
No.
|
|
Description
of Document
|
23.1
|
|
Consent
of KPMG LLP
|
SIGNATURES
The
Plan
.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
|
THE
ORIENTAL BANK CODA
PROFIT
SHARING PLAN
(Name
of Plan)
|
|
|
|
|
Date:
|
June
28, 2017
|
|
/s/
Maritza Arizmendi
|
|
Maritza
Arizmendi
|
|
|
Executive
Vice President and
|
|
|
Chief
Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Juan J. Santiago
|
|
|
Senior
Vice President and Trust Officer
|
|
|
|
|
|
|
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