OFG Bancorp (NYSE:OFG) Q1 2024 Earnings Call Transcript

OFG Bancorp (NYSE:OFG) Q1 2024 Earnings Call Transcript April 18, 2024

OFG Bancorp isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Thank you for joining OFG Bancorp's Conference Call. My name is Jamie, and I will be your operator today. Our speakers are José Rafael Fernández, Chief Executive Officer and Vice Chair of the Board of Directors; Maritza, Chief -- I'm sorry, apologies. Maritza Arizmendi, Chief Financial Officer; and César Ortiz, Chief Risk Officer. A presentation accompanies today's remarks. It can be found on the homepage of the OFG website under the First Quarter 2024 section. This call may feature certain forward-looking statements about management's goals, plans and expectations. These statements are subject to risks and uncertainties outlined in the Risk Factors section of OFG's SEC filings. Actual results may differ materially from those currently anticipated.

We disclaim any obligation to update information disclosed in this call as a result of developments that occur afterwards. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Instructions will be given at that time. I would now like to turn the call over to Mr. Fernández. Please go ahead.

José Rafael Fernández: Thank you for joining us. We are pleased to report our first quarter 2024 results, which reflected good solid performances across all our businesses. Growth was in line with both our short and long-term strategies and plans. Our Digital First strategy continues to drive customer acquisition and engagement. Business activity, consumer liquidity and employment levels in Puerto Rico continued to do well in a strong economy. And our balance [Technical Difficulty] interest rate environment. Thanks to the entire team for their hard work and commitment helping our customers reach their goals and our communities to achieve progress. Please turn to Page 3 for a summary of our first quarter results. Looking at the income statement.

Earnings per share diluted increased more than 9% year-over-year to $1.05 on close to a 6% increase in total core revenues to $174.2 million. Net interest margin was in line at 5.4%. Provision was $15.1 million. Non-interest expenses were in line at $91.4 million, pre-provision net revenues totaled $83 million. Turning to the balance sheet. Total assets were $11.2 billion, 2% less than last quarter and 11% higher than a year ago. Customer deposits were $9.5 billion reflecting the $1.2 billion public funds deposited in mid-December. Loans held for investment totaled $7.5 billion approximately level with last quarter and up 10% from a year ago. New loan production was $536.6 million [Technical Difficulty] totaled $2.5 billion down from the fourth quarter mainly due to the sale of a Treasury bill position.

Cash increased to $754 million from last quarter. Looking at capital. The CET1 ratio was 14.45%, up from 14.12% in the fourth quarter. We increased the quarterly cash dividend 14% to $0.25 per share [Technical Difficulty] approved a new $50 million stock repurchase authorization. Please turn to Page 4 for an update on our Digital First strategy. As of the first quarter, 94% of all routine retail customer transactions, 96% of retail deposits and 64% of retail loan payments are being made through our digital and self-service channels. This is being driven, by year-over-year growth of 12% in digital enrollment, 68% in digital loan payments and 32% in virtual teller utilization and 3% in customer growth. Another factor is the continued success of our Oriental Servicing Portal, which was introduced in mid-2023.

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