The Company provides comprehensive banking and financial services to its clients
through a complete range of banking and financial solutions, including commercial,
consumer, auto, and mortgage lending; checking and savings accounts; financial
planning, insurance, financial services, and investment brokerage; and corporate
and individual trust and retirement services. The Company operates through three
major business segments: Banking, Wealth Management, and Treasury, differentiating
the Oriental brand through customer segmentation and innovative solutions, primarily
in Puerto Rico. The Company provides these services through various subsidiaries
including, a commercial bank, Oriental Bank, a securities broker-dealer, Oriental
Financial Services Corp. (“Oriental Financial Services”), an insurance
agency, Oriental Insurance, LLC (“Oriental Insurance”), previously
known as Oriental Insurance Inc., and a retirement plan administrator, Oriental
Pension Consultants, Inc. (“OPC”), previously known as Caribbean
Pension Consultants, Inc. All of our subsidiaries are based in San Juan, Puerto
Rico, except for OPC which is based in Boca Raton, Florida. The Company has
48 branches in Puerto Rico. The Company’s long-term goal is to strengthen
its banking and financial services franchise by expanding its lending businesses,
increasing the level of integration in the marketing and delivery of banking
and financial services, maintaining effective asset-liability management, growing
non-interest revenue from banking and financial services, and improving operating
efficiencies.
The Company is a publicly-owned financial holding company incorporated on June
14, 1996 under the laws of the Commonwealth of Puerto Rico, providing a full
range of banking and financial services through its subsidiaries. The Company
is subject to the provisions of the U.S. Bank Holding Company Act of 1956, as
amended, (the “BHC Act”) and accordingly, subject to the supervision
and regulation of the Board of Governors of the Federal Reserve System (the
“Federal Reserve Board”).
The Company’s strategy involves:
Strengthening its banking and financial services franchise by expanding
its ability to attract deposits and build relationships with customers by refining
the service delivery and providing innovative banking technologies for day-to-day
customer transactions, and achieving sustainable levels of differentiation in
the market;
Focusing on greater growth in commercial, consumer and mortgage lending,
trust and financial services and insurance products;
Improving operating efficiencies, and continuing to maintain effective
asset-liability management;
Implementing a broad ranging effort to instill in employees and make
customers aware of the Company’s determination to effectively serve and
advise its customer base in a responsive and professional manner; and
Matching its portfolio of investment securities with the related funding
to achieve favorable spreads, and primarily investing in U.S. government-sponsored
agency obligations.
Together with a highly experienced group of senior and mid-level executives
and the benefits from the acquisitions of Eurobank Puerto Rico and the Puerto
Rico operations of Banco Bilbao Vizcaya Argentaria, S.A. (“BBVA”),
this strategy has resulted in sustained growth in the Company’s deposit-taking
activities, commercial, consumer and mortgage lending and financial service
activities, allowing the Company to distinguish itself in a highly competitive
industry. The Company is not immune from general and local financial and economic
conditions. Past experience is not necessarily indicative of future performance,
but given market uncertainties and on a reasonable time horizon of three to
five years, this strategy is expected to maintain its steady progress towards
the Company’s long-term goal.
The Company’s principal funding sources are branch deposits, securities
sold under agreements to repurchase, Federal Home Loan Bank (“FHLB”)
advances, Federal Reserve Bank (“FRB”) advances, wholesale deposits,
and subordinated capital notes. Through its branch network, Oriental Bank offers
personal non-interest and interest-bearing checking accounts, savings accounts,
certificates of deposit, individual retirement accounts (“IRAs”)
and commercial non-interest bearing checking accounts. The FDIC insures Oriental
Bank’s deposit accounts up to applicable limits. Management makes retail
deposit pricing decisions periodically, adjusting the rates paid on retail deposits
in response to general market conditions and local competition. Pricing decisions
take into account the rates being offered by other local banks, the London Interbank
Offered Rate (“LIBOR”), and mainland U.S. market interest rates.
The Company has three reportable segments: Banking, Wealth Management, and
Treasury. Management established the reportable segments based on the internal
reporting used to evaluate performance and to assess where to allocate resources.
Other factors such as the Company’s organizational structure, nature of
products, distribution channels and economic characteristics of the products
were also considered in the determination of the reportable segments. The Company
measures the performance of these reportable segments based on pre-established
annual goals involving different financial parameters such as net income, interest
rate spread, loan production, and fees generated.
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