OFG Bancorp Reports 1Q21 Results

OFG Bancorp (NYSE: OFG), the financial holding company for Oriental Bank, reported results for the first quarter ended March 31, 2021.

CEO Comment

José Rafael Fernández, Chief Executive Officer, said: “First quarter results reflected strong core performance based on the continued success of our strategies focusing on agility and service. Our results also reflected the federal stimulus, increased liquidity, and an improving Puerto Rico economy as more people get vaccinated.

“We benefitted from strong new loan generation and deposit growth, significantly reduced cost of funds, a more efficient operating structure, and the release of some COVID-related loan reserves.

“We followed up last year’s efforts to help small businesses and their employees with another $126 million in Paycheck Protection Program loans. Our proprietary PPP portal enables clients to apply for funds, receive them, and then apply for forgiveness, quickly and easily, and all online.

“Performance metrics improved with a loan yield of 6.61%, return on average assets of 1.21%, return on average tangible common stockholders’ equity of 13.11%, and an efficiency ratio of 60.84%. Credit metrics also improved as net charge-offs, delinquency rates, and loan deferrals all fell.

“Our capital strategies are working well. In January, we increased the regular quarterly cash dividend 14%. In March, we announced the redemption of all three outstanding series of preferred stock, which will improve our capital structure, enable us to effectively deploy excess liquidity, and increase net income available to shareholders. As of 1Q21, we more than earned back all the tangible book value per common share dilution involved in the Scotiabank acquisition significantly ahead of schedule.

“As Puerto Rico and USVI continue experiencing stronger signs of economic revival, at OFG we are strategically well-positioned to benefit from and play a major part in this long-awaited development. Thanks to all our team members who are más que listo (more than ready) to help our customers achieve their goals and aspirations through the pandemic and beyond.”

1Q21 Highlights

Earnings: EPS diluted was $0.56 compared to $0.42 in 4Q20 and $0.00 in 1Q20, which was the first quarter to be impacted by the pandemic.

Revenues: Total core revenues were $127.7 million compared to $132.8 million in 4Q20. 4Q20 benefited from $3.9 million in seasonal annual insurance commissions, $2.0 million in mortgage sales held back from 3Q20, and $3.1 million interest income from acquired loan pre-payments. 1Q21 included $1.6 million in interest income from unamortized yield from approximately $92 million of forgiven PPP loans and benefitted from $1.4 million lower cost of deposits.