OFG Bancorp (NYSE: OFG), the financial holding company for
Oriental Bank, today reported results for the third quarter ended
September 30, 2024. EPS diluted of $1.00 compared to $1.08 in 2Q24
and $0.95 in 3Q23. Total core revenues of $174.1 million compared
to $179.4 million in 2Q24 and $172.2 million in 3Q23.
CEO Comment
José Rafael Fernández, Chief Executive Officer, said: “The third
quarter was another solid quarter of performance with EPS-diluted
up 5.3% year-over-year on a 1.1% increase in total core revenues.
We continued to produce consistent, core operating results, and
digital adoption of our new and upgraded products, services, and
self-service tools keeps steadily growing. Today we celebrate our
60th anniversary in business by renewing our commitment to bring
progress to our customers, employees, shareholders, and the
communities we serve. Thanks to all our team members for always
being more than ready to help our customers today and
tomorrow.”
3Q24 Highlights
Performance Metrics: Net interest margin of 5.43%, return
on average assets of 1.66%, return on average tangible common
stockholders’ equity of 15.94%, and efficiency ratio of 52.60%.
Total Interest Income of $189.0 million compared to
$187.7 million in 2Q24 and $165.7 million in 3Q23. Compared to
2Q24, 3Q24 increased $1.4 million, primarily reflecting higher
balances of investment securities and yields, higher balances of
loans, and the absence of a $2.1 million loan recovery in 2Q24.
Total Interest Expense of $41.2 million compared to $40.3
million in 2Q24 and $23.9 million in 3Q23. Compared to 2Q24, 3Q24
increased $0.8 million, reflecting higher average balances of
higher-cost borrowings and brokered deposits and slightly reduced
average core deposit balances and cost.
Total Banking & Financial Service Revenues of $26.3
million compared to $32.1 million in 2Q24 and $30.4 million in
3Q23. 3Q24 primarily reflected $2.7 million in reduced interchange
fees due to the Durbin Amendment, $2.1 million reduced MSR
valuation due to lower long-term rates, and $0.3 million revenue
from the acquisition in late August of a $1.7 billion Puerto Rico
residential mortgage servicing portfolio.
Pre-Provision Net Revenues of $83.1 million compared to
$86.8 million in 2Q24 and $82.3 million in 3Q23.
Total Provision for Credit Losses of $21.4 million
compared to $15.6 million in 2Q24 and $16.4 million in 3Q23. 3Q24
primarily reflected $18.7 million for increased loan volume; $5.2
million related to the annual update of auto risk drivers and
consumer loan loss factors, and the extension of cash flows in a PR
commercial loan up for renewal; and a $2.7 million reserve release
mainly due to an improved U.S. macroeconomic perspective.
Credit Quality: Net charge-offs of $17.1 million (0.90%
of average loans) compared to $15.0 million (0.79%) in 2Q24 and
$18.8 million (1.05%) in 3Q23. 3Q24 early and total delinquency
rates were 2.78% and 4.10%, respectively. The nonperforming loan
rate was 1.11%. The 3Q24 total delinquency rate increased
sequentially due to booking of the GNMA buy-back option program
related to the previously mentioned mortgage servicing portfolio
acquisition.
Total Non-Interest Expense of $91.6 million compared to
$93.0 million in 2Q24 and $90.2 million in 3Q23. 3Q24 included a
$2.3 million credit and debit card processing business contract
renewal rebate and $1.3 million in expenses related to sales of
repossessed assets.
Effective Tax Rate of 23.9% compared to 28.2% in 2Q24 and
31.9% in 3Q23. Lower 3Q24 ETR reflected an estimated 2024 ETR of
26.8% due to higher forecasted business activities with
preferential tax treatment under the Puerto Rico tax code, coupled
with discrete benefits of $3.1 million mainly related to stock
vested in 1Q24 and tax credit purchases.
Loans Held for Investment (EOP) of $7.75 billion compared
to $7.64 billion in 2Q24 and $7.26 billion in 3Q23. Compared to
2Q24, 3Q24 increased 1.5%, reflecting growth in Puerto Rico and
U.S. commercial loans and Puerto Rico auto and consumer loans, and
regular paydowns and securitization of residential mortgages. Year
over year, 3Q24 loans increased 6.7%.
New Loan Production of $572.2 million compared to $589.0
million in 2Q24 and $567.5 million in 3Q23. Compared to 2Q24, 3Q24
production reflected increases in U.S. commercial and Puerto Rico
consumer lending, and decreases in Puerto Rico commercial and auto
lending.
Total Investments (EOP) of $2.61 billion compared to
$2.48 billion in 2Q24 and $2.07 billion in 3Q23.
Customer Deposits (EOP) of $9.53 billion compared to
$9.60 billion in 2Q24 and $8.54 billion in 3Q23. Compared to 2Q24,
3Q24 reflected increases in savings and time deposits, and lower
demand deposits.
Total Borrowings & Brokered Deposits (EOP) of $346.5
million compared to $201.2 million in 2Q24 and $454.4 million in
3Q23.
Cash & Cash Equivalents (EOP) of $680.6 million
compared to $740.4 million in 2Q24 and $532.7 million in 3Q23.
Capital: CET1 ratio was 14.37% compared to 14.29% in 2Q24
and 14.06% in 3Q23. The Tangible Common Equity ratio was 10.72%
compared to 10.09% in 2Q24 and 9.74% in 3Q23. Tangible Book Value
per share increased to $26.15 compared to $24.18 in 2Q24 and $21.01
in 3Q23.
Conference Call, Financial Supplement &
Presentation
A conference call to discuss 3Q24 results, outlook and related
matters will be held today at 10:00 AM ET. Phone (800) 225-9448 or
(203) 518-9708. Conference ID: OFGQ324. The call can also be
accessed live on www.ofgbancorp.com with webcast replay shortly
thereafter. OFG’s Financial Supplement, with full financial tables
for the quarter ended September 30, 2024, and the 3Q24 Conference
Call Presentation, can be found on the Quarterly Results page on
OFG’s Investor Relations website at www.ofgbancorp.com.
Non-GAAP Financial Measures
In addition to our financial information presented in accordance
with GAAP, management uses certain “non-GAAP financial measures”
within the meaning of SEC Regulation G, to clarify and enhance
understanding of past performance and prospects for the future.
Please refer to Tables 8-1 and 8-2 in OFG’s above-mentioned
Financial Supplement for a reconciliation of GAAP to non-GAAP
measures and calculations.
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 to differ
materially from those expressed in the forward-looking statements.
Factors that might cause such a difference include but are not
limited to (i) general business and economic conditions, including
changes in interest rates; (ii) cybersecurity breaches; (iii)
hurricanes, earthquakes, pandemics, and other natural disasters;
and (iv) competition in the financial services industry. For a
discussion of such factors and certain risks and uncertainties to
which OFG is subject, please refer to OFG’s annual report on Form
10-K for the year ended December 31, 2023, as well as its other
filings with the U.S. Securities and Exchange Commission. Other
than to the extent required by applicable law, including the
requirements of applicable securities laws, OFG assumes no
obligation to update any forward-looking statements to reflect
occurrences or unanticipated events or circumstances after the date
of such statements.
About OFG Bancorp
Now in its 60th year in business, OFG Bancorp is a diversified
financial holding company that operates under U.S., Puerto Rico and
U.S. Virgin Islands banking laws and regulations. Its three
principal subsidiaries, Oriental Bank, Oriental Financial Services,
and Oriental Insurance, provide a wide range of retail and
commercial banking, lending and wealth management products,
services, and technology, primarily in Puerto Rico and U.S. Virgin
Islands. Our mission is to make progress possible for our
customers, employees, shareholders, and the communities we serve.
Visit us at www.ofgbancorp.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241015577417/en/
Puerto Rico & USVI: Lumarie Vega López
(lumarie.vega@orientalbank.com) and Victoria Maldonado Rodríguez
(victoria.maldonado@orientalbank.com) at (787) 771-6800
US: Gary Fishman (gfishman@ofgbancorp.com) and
Steven Anreder (sanreder@ofgbancorp.com) at (212) 532-3232
OFG Bancorp (NYSE:OFG)
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