OFG Bancorp(OFG)2022-01-19 20:17Financial Data and Key Metrics Changes - Fourth quarter diluted earnings per share was 0.81 in the third quarter and up from 141 million, an increase of 5% quarter-over-quarter and 6% year-over-year [4] - Pre-provision net revenues were 9.9 billion, with customer deposits declining by 8.6 billion [6] - The CET1 ratio increased by 69 basis points, indicating a strong capital position [10] Business Line Data and Key Metrics Changes - Loan growth in priority areas included a 5% increase in commercial loans (excluding PPP), a 9% increase in consumer loans, and a 1% increase in auto loans [7] - New loan origination for the quarter was 4.7 million increase in banking and wealth management revenue [13] Market Data and Key Metrics Changes - Customer deposits decreased due to withdrawals by government-related and institutional clients, partially offset by increased retail deposits [6] - Average loan balances totaled 14 million from the third quarter [16] - The net interest margin increased to 4.18%, driven by a decrease in the cost of interest paid [19] Company Strategy and Development Direction - The company is focused on digital transformation, enhancing customer experience, and investing in technology [11] - There is an emphasis on building a culture of excellence and customer service, with ongoing investments in talent and technology [11] - The company aims to leverage the economic momentum in Puerto Rico and deploy excess liquidity for loan growth [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the economic growth cycle in Puerto Rico, anticipating continued loan growth [23][30] - The exit from bankruptcy is expected to improve Puerto Rico's standing in the business community and facilitate infrastructure investments [39] - The company plans to maintain a strong capital return strategy while focusing on loan growth and community support [41] Other Important Information - The company completed a 0.12 per share [10] - Non-interest expenses increased by 87 million in PPP loans to be forgiven by mid-year, with $2.3 million in fees recognized this quarter [34][35] Question: Implications of exiting bankruptcy for the company - Exiting bankruptcy is seen as a positive development, allowing for infrastructure investments and improved access to markets [39] Question: Capital return expectations for 2022 - Management indicated no reason to expect a reduction in capital returns, with a focus on loan growth and maintaining dividends [40][41] Question: Impact of deposit decline on margin and future expectations - Management anticipates a gradual increase in margin due to changes in deposit mix and continued investment in loan balances [78] Question: Technology spending and its impact on expenses - Technology spending is expected to increase as part of the company's strategy to enhance customer service and operational efficiency [81]