OFG Bancorp (NYSE:OFG) Q4 2023 Earnings Call Transcript January 24, 2024 10:00 AM ET Company Participants Jose Rafael Fernandez - Chief Executive Officer and Vice Chairman Maritza Arizmendi - Chief Financial Officer Cesar Ortiz - Chief Risk Officer Conference Call Participants Alex Twerdahl - Piper Sandler Brett Rabatin - Hovde Group Kelly Motta - KBW Operator Good morning. Thank you for joining OFG Bancorp's Conference Call. My name is Todd, and I'll be your operator today. Our speakers are Jose Rafael Fer ...

$8.2 $8.3 $7.1 $8.2 $7.7 $10.0 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 23 | --- | --- | --- | --- | --- | --- | |-------------------------------|-----------|-----------|-----------|-----------|----------| | CET1 Capital | $1,174.2 | $1,124.6 | $1,086.6 | $1,063.9 | $1,037.4 | | CET1 Capital Ratio | 14.12% | 14.06% | 14.03% | 14.07% | 13.64% | | Tier 1 Capital | $1,174.2 | $1,124.6 | $1,086.6 | $1,063.9 | $1,037.4 | | Tier 1 Capital Ratio | 14.12% | 14.06% | 14.03% | 14.07% | 13.64% | | Total Capital $1,278.5 | | $1,2 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission File Number: 001-12647 OFG Bancorp (Exact name of registrant as specified in its charter) Commonwealth of Puer ...

Financial Data and Key Metrics Changes - Earnings per share diluted was $0.95, an increase of 9% year-over-year [37] - Total core revenues were $172.2 million, up 10% compared to last year [37] - Net interest margin was 5.8%, down from 5.9% in the second quarter [44] - Total assets increased to $10.3 billion from last quarter [38] - Customer deposits were stable at approximately $8.5 billion [38] - Net charge-offs totaled $18.8 million, compared to $6.6 million in the second quarter [48] Business Line Data and Key Metrics Changes - Average loan balances increased by $188 million from the second quarter, with end-of-period balance up $144 million [7] - Loan yield was 7.84%, up 8 basis points from the second quarter [43] - Banking and wealth management revenues were $30.4 million, approximately level with the second and year-ago quarters [42] - New loan production was approximately $563 million, in line with the last five quarters [38] Market Data and Key Metrics Changes - The cumulative deposit beta was 19%, with an expectation of about 25% by year-end [8][55] - The economy in Puerto Rico is described as sound, with consumer liquidity being strong [3][11] - Early and total delinquency rates were 2.75% and 3.78%, respectively [49] Company Strategy and Development Direction - The company continues to focus on a digital-first strategy to enhance customer engagement and operational efficiency [3][39] - There is a strong commercial lending pipeline expected to continue into the fourth quarter and 2024 [11] - The company plans to maintain a balance sheet above $10 billion, leveraging loan growth opportunities [20][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about Puerto Rico's economic strength despite potential global economic uncertainties [10][50] - The company is monitoring the impact of interest rate changes and inflation on its operations [10] - Credit conditions are expected to remain benign, with a focus on maintaining strong credit quality [49] Other Important Information - The efficiency ratio was 52.36%, reflecting continuous growth and strong operating leverage [42] - The company opened a new branch in Dorado, indicating a commitment to physical presence alongside digital strategies [41] Q&A Session Summary Question: What is the balance of government deposits at quarter end? - The balance of government deposits is in the $350 million range [15] Question: How does the company plan to manage deposit costs and loan growth? - The company expects to mitigate potential higher deposit costs with loan growth, maintaining a focus on net interest income [16] Question: What is the outlook for net charge-offs and the allowance ratio? - The company anticipates a more normalized level of charge-offs and believes credit conditions will remain strong [18] Question: How does the company view its participation in financing opportunities like the Metropistas deal? - The company sees itself as a solid participant in such financing opportunities, contributing to infrastructure improvement in Puerto Rico [61] Question: What is the strategy regarding capital management and buybacks? - The company plans to focus on loan growth while also considering dividend growth and buybacks in its capital management strategy [64]

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. In addition to our financial information presented in accordance with GAAP, management uses certain "non-GAAP financial measures" withi ...

FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission File Number: 001-12647 OFG Bancorp 254 Muñoz Rivera Avenue 00918 San Juan, Puerto Rico (Zip code) (Address of princ ...

Financial Data and Key Metrics Changes - Earnings per share diluted was $0.93, up 11% year-over-year [8] - Core revenues increased 17% to $170.5 million [8] - Net interest margin was 5.9% [8] - Provision for credit losses totaled $15 million [8] - Non-interest expenses were $89 million, with pre-provision net revenues totaling $80.8 million, up 22% year-over-year [8][17] - Return on average asset was 1.76%, and return on average tangible common equity was 17.67% [19] Business Line Data and Key Metrics Changes - New loan production increased 23% from the first quarter to approximately $692 million [9][21] - Banking and wealth management revenues were $31 million, up $2 million from the first quarter [15] - Average loan balances increased $136 million from the first quarter [20] - Non-interest expenses are expected to average about $90 million to $92 million per quarter for the rest of the year [18] Market Data and Key Metrics Changes - Customer deposits were approximately $8.5 billion [9] - Loans held for investment totaled $7.1 billion, up 3.8% from the first quarter [9] - Retail deposits declined $136 million, while government deposits increased $130 million [22] - Cumulative deposit beta was 16%, expected to reach about 25% through the cycle [23] Company Strategy and Development Direction - The company is focused on a digital-first strategy, showing excellent progress with higher sales service actions and lower branch visits [6][12] - Investments in technology are aimed at improving customer experience and operational efficiency [12][102] - The company aims to maintain a strong loan-to-deposit ratio while managing deposits effectively [40][44] Management's Comments on Operating Environment and Future Outlook - The economy in Puerto Rico continues to show resilience, with retail sales and wages rising [30][31] - Management is optimistic about the strength of Puerto Rico's economy despite potential risks from interest rate changes and inflation [31] - The company anticipates continued strong loan production and stable core deposit balances [32] Other Important Information - The CET1 ratio was 14.0%, and the company bought back about 565,000 shares during the second quarter [10] - The efficiency ratio improved to 52.13%, reflecting increased operating leverage [17] Q&A Session Summary Question: Loan-to-deposit ratio outlook - Management noted high levels of liquidity and capital, indicating a strong position in the current banking environment [36][37] Question: Commercial loan growth and pipeline - Management confirmed a strong pipeline for commercial loans and expressed confidence in replicating first-half performance in the second half [40] Question: Deposit beta guidance - Management indicated that the deposit beta guidance remains at 25%, which is considered conservative given current levels [45] Question: Credit portfolio specifics - Management clarified that specific issues with three U.S. commercial loans do not affect the overall diversified portfolio [48][49] Question: Efficiency ratio guidance - Management expects non-interest expenses to remain stable, with technology investments driving future efficiency [54][55] Question: Auto loan market outlook - Management expressed surprise at the strength of auto loan growth and noted that consumer confidence is driving purchases [56][59] Question: Capital management and buyback activity - Management is focused on loan growth, dividends, and share repurchase programs, with $19 million remaining for buybacks [60][61] Question: Deposit pressure trends - Management observed lower non-interest-bearing deposit balances as consumers deploy liquidity for purchases [68][70] Question: Digital strategy updates - Management emphasized a customer-centric approach in their digital strategy, with ongoing investments in technology [102][103]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission File Number: 001-12647 OFG Bancorp (Exact name of registrant as specified in its charter) Commonwealth of Puerto R ...

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 and other natural disasters; (iv) competition in the financial services industry; and (v) the severity, magnitude and duration of the COVID-19 pandemic, and its impact on our operations, personnel, and customers. In addition to our financial information presented in ac ...

OFG Bancorp (NYSE:OFG) Q1 2023 Earnings Conference Call April 20, 2023 10:00 AM ET Company Participants José Rafael Fernández - Vice Chair, Board and CEO Maritza Arizmendi - Chief Financial Officer Conference Call Participants Timur Braziler - Wells Fargo Brett Rabatin - Hovde Group Alex Twerdahl - Piper Sandler Kelly Motta - KBW Operator Please standby. Your program is about to begin. [Operator Instructions] Good morning. Thank you for joining OFG Bancorp’s Conference Call. My name is Melinda. I will be yo ...