OFG Bancorp Reports 2Q21 Results

OFG Bancorp (NYSE: OFG), the financial holding company for Oriental Bank, reported results for the second quarter ended June 30, 2021.

CEO Comment

José Rafael Fernández, Chief Executive Officer, said: “We generated outstanding second quarter results. This reflects our larger scale and our focus on digital utilization and differentiation, combined with Puerto Rico’s early economic and post-pandemic recovery.

“The economy is clearly benefitting from a massive amount of federal reconstruction and COVID stimulus, which are more meaningful here compared to mainland states given the size of our economy as it relates to reconstruction funds and the size of stimulus payments compared to average income levels.

“We saw the effects of all this across all our businesses. New loan origination increased 27.7% from 1Q21 with gains in all major categories, led by commercial and auto lending. Interest income grew 2.2% from 1Q21 as average loan balances expanded 1.3%, excluding residential mortgage. Banking and financial services revenues rose 5.4%.

“Asset quality trends continued to improve as reconstruction and stimulus funds provided significant liquidity to businesses and individuals. As result of this, provision for credit losses was a net benefit of $8.3 million.

“Results were enhanced by a 12.3% reduction in cost of funds compared to 1Q21 and the previously announced deployment of excess capital to redeem all three of our outstanding series of preferred stock, eliminating $1.6 million in quarterly dividends.

“Return on average assets and on average tangible equity expanded to 1.58% and 17.78%, respectively, compared to the previous and year ago quarters.

“As Puerto Rico continues experiencing stronger signs of economic revival, OFG is strategically well-positioned to continue to benefit from and play a major role in this long-awaited development. Thanks to all our team members who have been more than ready to help our customers achieve their goals.”

2Q21 Highlights

Summary: Earnings per share diluted was $0.78 compared to $0.56 in 1Q21 and $0.39 in 2Q20. Total core revenues were $133.3 million compared to $127.7 million in 1Q21 and $128.2 million in 2Q20. Net interest margin was 4.22% compared to 4.26% in 1Q21 and 4.78% in 2Q20.

Total interest income of $113.5 million increased 2.2% from 1Q21 primarily due to higher income from increased average balances of commercial and auto loans and investment securities. Average loan balances were $6.60 billion compared to $6.64 billion in 1Q21 and $6.84 billion in 2Q20.