OFG Bancorp Reports 4Q23 & 2023 Results
SAN JUAN, Puerto Rico, January 24, 2024 – OFG Bancorp (NYSE: OFG), the financial holding company for Oriental Bank, today reported results for the fourth quarter and year ended December 31, 2023.
4Q23: EPS diluted of $0.98 compared to $0.95 in 3Q23 and $0.97 in 4Q22. Total core revenues of $175.6 million compared to $172.2 million in 3Q23 and $168.3 million in 4Q22.
Full Year 2023: EPS diluted of $3.83 compared to $3.44 in 2022. Total core revenues of $682.7 million compared to $607.8 million.
CEO Comment
José Rafael Fernández, Chief Executive Officer, said: “2023 was an outstanding year. We are proud of our accomplishments and thank the entire team for making it possible. We ended 2023 with record levels of loans, customer deposits, assets, and stockholders’ equity. Year-end commercial loan balances exceeded $3 billion and tangible common equity was more than $1 billion, both for the first time. Our ‘Digital First Strategy’ continues to empower our retail customers to complete 93% of routine transactions through self-service channels. While consumer credit has begun to normalize post-pandemic, consumer liquidity and employment as well as commercial clients and the economy continue to be strong in Puerto Rico.”
4Q23 Results Included:
Gain on Sale of Non-Performing Puerto Rico Small Business Loans: Resulted in a $6.3 million pre-tax gain in other non-interest income.
Workforce Early Retirement & Rightsizing: Resulted in $3.2 million in severance and lease cancellation costs in non-interest compensation and infrastructure expenses.
Large Public Funds Deposit: $1.2 billion deposited mid-December.
4Q23 Highlights
Performance Metrics: Net interest margin of 5.62%, return on average assets of 1.76%, return on average tangible common stockholders’ equity of 18.22%, and efficiency ratio of 53.59%.
Total Interest Income of $176.2 million compared to $165.7 million in 3Q23 and $145.7 million in 4Q22. Compared to 3Q23, 4Q23 primarily reflected higher average balances and yields on loans and investment securities.
Total Interest Expense of $32.7 million compared to $23.9 million in 3Q23 and $10.4 million in 4Q22. Compared to 3Q23, 4Q23 reflected increases of $4.0 million in the cost of average core deposits and $4.8 million in the cost of average wholesale funding, primarily due to temporarily higher balances of borrowings and brokered deposits during the quarter.
Total Banking & Financial Service Revenues of $32.1 million compared to $30.4 million in 3Q23 and $33.0 million in 4Q22. Compared to 3Q23, 4Q23 reflected annual insurance
commission recognition of $2.5 million in wealth management revenues and lower mortgage servicing revenues.
Pre-Provision Net Revenues of $88.2 million compared to $82.3 million in 3Q23 and $76.9 million in 4Q22.
Total Provision for Credit Losses of $19.7 million compared to $16.4 million in 3Q23 and $8.8 million in 4Q22. 4Q23 provision primarily reflected increased loan volume.
Credit Quality: Net charge-offs of $16.3 million compared to $18.8 million in 3Q23 and $11.2 million in 4Q22. 4Q23 early and total delinquency rates were 2.76% and 3.76%, respectively, in line with 3Q23. The nonperforming loan rate of 1.22% was the lowest over the last five quarters.
Total Non-Interest Expense of $94.1 million compared to $90.2 million in 3Q23 and $91.6 million in 4Q22.
Loans Held for Investment (EOP) of $7.53 billion compared to $7.26 billion in 3Q23 and $6.84 billion in 4Q22. Loans increased 3.8% from 3Q23 and 10.2% year-over-year, reflecting increases in commercial loans, and retail auto and consumer loans. This was partially offset by regular paydowns of residential mortgages and securitization and sale of conforming loans.
New Loan Production of $663.9 million compared to $567.5 million in 3Q23 and $616.4 million in 4Q22. 4Q23 primarily reflected increased Puerto Rico commercial lending.
Total Investments (EOP) of $2.69 billion compared to $2.07 billion in 3Q23 and $1.97 billion in 4Q22. 4Q23 investments reflected purchases of $300 million of short-term US Treasury bills and $250 million of long-term government insured, mortgage-backed securities.
Customer Deposits (EOP) of $9.60 billion compared to $8.54 billion in 3Q23 and $8.56 billion in 4Q22.
Total Borrowings & Brokered Deposits (EOP) of $363.0 million compared to $454.4 million in 3Q23 and $38.4 million in 4Q22. The average balance of such wholesale funding was $602.0 million in 4Q23 compared to $266.4 million in 3Q23. The 12/31/23 balance reflected repayment of $250 million of borrowings and the addition of $160 million of brokered deposits, most of which will mature in early 1Q24.
Cash & Cash Equivalents (EOP) of $748.2 million compared to $532.7 million in 3Q23 and $550.5 million in 4Q22.
Total Assets (EOP) of $11.34 billion compared to $10.26 billion in 3Q23 and $9.82 billion in 4Q22.
Capital: CET1 ratio was 14.12% compared to 14.06% in 3Q23 and 13.64% in 4Q22. The Tangible Common Equity ratio was 9.68% compared to 9.74% in 3Q23 and 9.59% in 4Q22. Tangible Book Value (TBV) of $23.13 per share compared to $21.01 in 3Q23 and $19.56 in 4Q22. 4Q23 TBV reflected increased retained earnings and Accumulated Other Comprehensive Income.
Conference Call, Financial Supplement & Presentation
A conference call to discuss 4Q23 results, outlook and related matters will be held today at 10:00 AM ET. Phone (800) 267-6316 or (203) 518-9783. Conference ID: OFGQ423. The call can also be accessed live on www.ofgbancorp.com with webcast replay shortly thereafter.
OFG’s Financial Supplement, with full financial tables for the quarter and year ended December 31, 2023, and the 4Q23 Conference Call Presentation, can be found on the Quarterly Results page on OFG’s Investor Relations website at www.ofgbancorp.com.
Non-GAAP Financial Measures
In addition to our financial information presented in accordance with GAAP, management uses certain “non-GAAP financial measures” within the meaning of SEC Regulation G, to clarify and enhance understanding of past performance and prospects for the future. Please refer to Tables 8-1 and 8-2 in OFG’s above-mentioned Financial Supplement for a reconciliation of GAAP to non-GAAP measures and calculations.
Forward Looking Statements
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.
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, pandemics, and other natural disasters; and (iv) competition in the financial services industry.
For a discussion of such factors and certain risks and uncertainties to which OFG is subject, please refer to OFG’s annual report on Form 10-K for the year ended December 31, 2022, as well as its other filings with the U.S. Securities and Exchange Commission. Other than to the extent required by applicable law, including the requirements of applicable securities laws, OFG assumes no obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.
About OFG Bancorp
Now in its 60th year in business, OFG Bancorp is a diversified financial holding company that operates under U.S., Puerto Rico and U.S. Virgin Islands banking laws and regulations. Its three principal subsidiaries, Oriental Bank, Oriental Financial Services, and Oriental Insurance, provide a wide range of retail and commercial banking, lending and wealth management products, services, and technology, primarily in Puerto Rico and U.S. Virgin Islands. Visit us at www.ofgbancorp.com.
# # #
Contacts
Puerto Rico & USVI: Idalis Montalvo (idalis.montalvo@orientalbank.com) at (787) 777-2847
US: Gary Fishman (gfishman@ofgbancorp.com) and Steven Anreder
(sanreder@ofgbancorp.com) at (212) 532-3232
OFG Bancorp
Financial Supplement
The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation, and investors should refer to our December 31, 2023 Annual Report on Form 10-K once it is filed with the Securities and Exchange Commission.
| | | | | | | | |
| Table of Contents | |
| | Pages |
| | |
| OFG Bancorp (Consolidated Financial Information) |
| | |
| | |
| | |
| | |
| | |
| | 11 |
| | |
| | |
| | |
OFG Bancorp (NYSE: OFG)
Table 1-1: Financial and Statistical Summary - Consolidated
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2023 | | 2023 | | 2023 | | 2023 | | 2022 | |
| (Dollars in thousands, except per share data) (unaudited) | | | Q4 | | Q3 | | Q2 | | Q1 | | Q4 | |
| Statement of Operations | | | | | | | | | | | | |
| Net interest income | | | $ | 143,542 | | $ | 141,787 | | $ | 139,644 | | $ | 135,897 | | $ | 135,282 | |
| Non-interest income, net (core) | (1) | | 32,061 | | 30,404 | | 30,859 | | 28,531 | | 33,012 | |
| Total core revenues | (2) | | 175,603 | | 172,191 | | 170,503 | | 164,428 | | 168,294 | |
| Non-interest expense | | | 94,099 | | 90,158 | | 88,888 | | 90,220 | | 91,641 | |
| Pre-provision net revenues | (21) | | 88,151 | | 82,328 | | 80,829 | | 74,578 | | 76,895 | |
| Total provision for credit losses | | | 19,719 | | 16,430 | | 15,044 | | 9,445 | | 8,757 | |
| Net income before income taxes | | | 68,432 | | 65,898 | | 65,785 | | 65,133 | | 68,138 | |
| Income tax expense | | | 21,835 | | 21,025 | | 21,612 | | 18,904 | | 21,771 | |
| Net income available to common stockholders | | | 46,597 | | 44,873 | | 44,173 | | 46,229 | | 46,367 | |
| Common Share Statistics | | | | | | | | | | | | |
| Earnings per common share - basic | (3) | | $ | 0.99 | | $ | 0.95 | | $ | 0.93 | | $ | 0.97 | | $ | 0.97 | |
| Earnings per common share - diluted | (4) | | $ | 0.98 | | $ | 0.95 | | $ | 0.93 | | $ | 0.96 | | $ | 0.97 | |
| Average common shares outstanding | | | 47,061 | | 47,114 | | 47,266 | | 47,600 | | 47,572 | |
| Average common shares outstanding and equivalents | | | 47,386 | | 47,392 | | 47,490 | | 47,944 | | 47,964 | |
| Cash dividends per common share | | | $ | 0.22 | | $ | 0.22 | | $ | 0.22 | | $ | 0.22 | | $ | 0.20 | |
| Book value per common share (period end) | | | $ | 25.36 | | $ | 23.28 | | $ | 23.36 | | $ | 22.88 | | $ | 21.91 | |
| Tangible book value per common share (period end) | (5) | | $ | 23.13 | | $ | 21.01 | | $ | 21.06 | | $ | 20.57 | | $ | 19.56 | |
| Balance Sheet (Average Balances) | | | | | | | | | | | | |
| Loans | (6) | | $ | 7,417,084 | | $ | 7,191,243 | | $ | 7,002,971 | | $ | 6,866,586 | | $ | 6,770,341 | |
| Interest-earning assets | | | 10,129,061 | | 9,702,167 | | 9,492,861 | | 9,359,211 | | 9,425,590 | |
| Total assets | | | 10,588,584 | | 10,180,931 | | 10,020,940 | | 9,900,409 | | 9,989,293 | |
| Core deposits | | | 8,691,516 | | 8,621,652 | | 8,531,583 | | 8,594,392 | | 8,759,080 | |
| Total deposits | | | 8,834,234 | | 8,624,052 | | 8,531,583 | | 8,604,621 | | 8,770,446 | |
| Interest-bearing deposits | | | 6,282,916 | | 6,042,165 | | 5,955,611 | | 5,950,481 | | 6,059,643 | |
| Borrowings | | | 459,315 | | 263,981 | | 226,256 | | 64,168 | | 26,820 | |
| Stockholders' equity | | | 1,128,747 | | 1,127,602 | | 1,108,880 | | 1,077,703 | | 1,025,132 | |
| | | | | | | | | | | | |
| Performance Metrics | | | | | | | | | | | | |
| Net interest margin | (7) | | 5.62 | % | | 5.80 | % | | 5.90 | % | | 5.89 | % | | 5.69 | % | |
| Return on average assets | (8) | | 1.76 | % | | 1.76 | % | | 1.76 | % | | 1.87 | % | | 1.86 | % | |
| Return on average tangible common stockholders' equity | (9) | | 18.22 | % | | 17.59 | % | | 17.67 | % | | 19.13 | % | | 20.36 | % | |
| Efficiency ratio | (10) | | 53.59 | % | | 52.36 | % | | 52.13 | % | | 54.87 | % | | 54.45 | % | |
| Full-time equivalent employees, period end | | | 2,248 | | | 2,264 | | | 2,265 | | | 2,249 | | | 2,253 | | |
| Credit Quality Metrics | | | | | | | | | | | | |
| Allowance for credit losses | | | $ | 161,106 | | $ | 157,529 | | $ | 159,923 | | $ | 151,884 | | $ | 152,673 | |
| Allowance as a % of loans held for investment | | | 2.14 | % | | 2.17 | % | | 2.25 | % | | 2.22 | % | | 2.23 | % | |
| Net charge-offs | | | $ | 16,282 | | $ | 18,836 | | $ | 6,606 | | $ | 10,120 | | $ | 11,205 | |
| Net charge-off rate | (11) | | 0.88 | % | | 1.05 | % | | 0.38 | % | | 0.59 | % | | 0.66 | % | |
| Early delinquency rate (30 - 89 days past due) | | | 2.76 | % | | 2.75 | % | | 2.53 | % | | 2.11 | % | | 2.46 | % | |
| Total delinquency rate (30 days and over) | | | 3.76 | % | | 3.78 | % | | 3.67 | % | | 3.40 | % | | 4.04 | % | |
| Capital Ratios (period end) (Non-GAAP) | (12)(20) | | | | | | | | | | | |
| Leverage ratio | | | 11.03 | % | | 11.03 | % | | 10.85 | % | | 10.75 | % | | 10.36 | % | |
| Common equity Tier 1 capital ratio | | | 14.12 | % | | 14.06 | % | | 14.03 | % | | 14.07 | % | | 13.64 | % | |
| Tier 1 risk-based capital ratio | | | 14.12 | % | | 14.06 | % | | 14.03 | % | | 14.07 | % | | 13.64 | % | |
| Total risk-based capital ratio | | | 15.37 | % | | 15.31 | % | | 15.29 | % | | 15.33 | % | | 14.89 | % | |
| Tangible common equity ("TCE") ratio | | | 9.68 | % | | 9.74 | % | | 9.99 | % | | 9.85 | % | | 9.59 | % | |
OFG Bancorp (NYSE: OFG)
Table 1-2: Financial and Statistical Summary - Consolidated (Continued)
| | | | | | | | | | | | | | | | | | | | |
| | | 2023 | | 2022 | |
| (Dollars in thousands, except per share data) (unaudited) | | | YTD | | YTD | |
| Statement of Operations | | | | | | |
| Net interest income | | | $ | 560,870 | | | $ | 482,080 | | |
| Non-interest income, net (core) | (1) | | 121,855 | | | 125,725 | | |
| Total core revenues | (2) | | 682,725 | | | 607,805 | | |
| Non-interest expense | | | 363,365 | | | 345,546 | | |
| Pre-provision net revenues | (21) | | 325,886 | | | 268,224 | | |
| Total provision for credit losses | | | 60,638 | | | 24,119 | | |
| Net income before income taxes | | | 265,248 | | | 244,105 | | |
| Income tax expense | | | 83,376 | | | 77,866 | | |
| Net income available to common stockholders | | | 181,872 | | | 166,239 | | |
| Common Share Statistics | | | | | | |
| Earnings per common share - basic | (3) | | $ | 3.85 | | | $ | 3.46 | | |
| Earnings per common share - diluted | (4) | | $ | 3.83 | | | $ | 3.44 | | |
| Average common shares outstanding | | | 47,258 | | | 48,033 | | |
| Average common shares outstanding and equivalents | | | 47,552 | | | 48,436 | | |
| Cash dividends per common share | | | $ | 0.88 | | | $ | 0.70 | | |
| Book value per common share (period end) | | | $ | 25.36 | | | $ | 21.91 | | |
| Tangible book value per common share (period end) | (5) | | $ | 23.13 | | | $ | 19.56 | | |
| Balance Sheet (Average Balances) | | | | | | |
| Loans | (6) | | $ | 7,121,176 | | | $ | 6,657,760 | | |
| Interest-earning assets | | | 9,688,019 | | | 9,544,055 | | |
| Total assets | | | 10,174,624 | | | 10,119,505 | | |
| Core deposits | | | 8,610,084 | | | 8,859,600 | | |
| Total deposits | | | 8,649,184 | | | 8,870,966 | | |
| Interest-bearing deposits | | | 6,058,661 | | | 6,223,095 | | |
| Borrowings | | | 254,541 | | | 31,461 | | |
| Stockholders' equity | | | 1,110,919 | | | 1,042,202 | | |
| | | | | | |
| Performance Metrics | | | | | | |
| Net interest margin | (7) | | 5.79 | % | | 5.05 | % | |
| Return on average assets | (8) | | 1.79 | % | | 1.64 | % | |
| Return on average tangible common stockholders' equity | (9) | | 18.14 | % | | 17.98 | % | |
| Efficiency ratio | (10) | | 53.22 | % | | 56.85 | % | |
| Full-time equivalent employees, period end | | | 2,248 | | | 2,253 | | |
| Credit Quality Metrics | | | | | | |
| Allowance for credit losses | | | $ | 161,106 | | | $ | 152,673 | | |
| Allowance as a % of loans held for investment | | | 2.14 | % | | 2.23 | % | |
| Net charge-offs | | | $ | 51,844 | | | $ | 27,672 | | |
| Net charge-off rate | (11) | | 0.73 | % | | 0.42 | % | |
| Early delinquency rate (30 - 89 days past due) | | | 2.76 | % | | 2.46 | % | |
| Total delinquency rate (30 days and over) | | | 3.76 | % | | 4.04 | % | |
OFG Bancorp (NYSE: OFG)
Table 2-1: Consolidated Statements of Operations
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended |
| (Dollars in thousands, except per share data) (unaudited) | | | December 31, 2023 | | September 30, 2023 | | June 30,
2023 | | March 31,
2023 | | December 31,
2022 |
| Interest income: | | | | | | | | | | | |
| Loans | | | | | | | | | | | |
| Non-PCD loans | | | $ | 131,167 | | | $ | 124,847 | | | $ | 116,699 | | | $ | 109,330 | | | $ | 105,238 | |
| PCD loans | | | 17,609 | | | 17,292 | | | 18,819 | | | 18,981 | | | 19,762 | |
| Total interest income from loans | | | 148,776 | | | 142,139 | | | 135,518 | | | 128,311 | | | 125,000 | |
| Investment securities and cash | | | 27,423 | | | 23,569 | | | 22,470 | | | 20,674 | | | 20,727 | |
| Total interest income | | | 176,199 | | | 165,708 | | | 157,988 | | | 148,985 | | | 145,727 | |
| Interest expense: | | | | | | | | | | | |
| Deposits | | | | | | | | | | | |
| Core deposits | | | 24,753 | | | 20,787 | | | 15,916 | | | 12,489 | | | 10,258 | |
| Brokered deposits | | | 1,980 | | | 32 | | | — | | | 8 | | | 9 | |
| Total deposits | | | 26,733 | | | 20,819 | | | 15,916 | | | 12,497 | | | 10,267 | |
| Borrowings | | | 5,924 | | | 3,102 | | | 2,428 | | | 591 | | | 178 | |
| Total interest expense | | | 32,657 | | | 23,921 | | | 18,344 | | | 13,088 | | | 10,445 | |
| Net interest income | | | 143,542 | | | 141,787 | | | 139,644 | | | 135,897 | | | 135,282 | |
| Provision for credit losses, excluding PCD loans | | | 20,681 | | | 16,648 | | | 16,650 | | | 8,146 | | | 11,347 | |
| (Recapture of) provision for credit losses on PCD loans | | | (962) | | | (218) | | | (1,606) | | | 1,299 | | | (2,590) | |
| Total provision for credit losses | | | 19,719 | | | 16,430 | | | 15,044 | | | 9,445 | | | 8,757 | |
| Net interest income after provision for credit losses | | | 123,823 | | | 125,357 | | | 124,600 | | | 126,452 | | | 126,525 | |
| Non-interest income: | | | | | | | | | | | |
| Banking service revenues | | | 17,822 | | | 17,303 | | | 17,440 | | | 17,513 | | | 18,224 | |
| Wealth management revenues | | | 9,985 | | (a) | 7,691 | | | 8,194 | | | 7,120 | | | 8,335 | |
| Mortgage banking activities | | | 4,254 | | (b) | 5,410 | | | 5,225 | | | 3,898 | | | 6,453 | |
| Total banking and financial service revenues | | | 32,061 | | | 30,404 | | | 30,859 | | | 28,531 | | | 33,012 | |
| | | | | | | | | | | |
| Other income (loss), net | | | 6,647 | | (c) | 295 | | | (786) | | | 370 | | | 242 | |
| Total non-interest income, net | | | 38,708 | | | 30,699 | | | 30,073 | | | 28,901 | | | 33,254 | |
| Non-interest expense: | | | | | | | | | | | |
| Compensation and employee benefits | | | 41,418 | | (d) | 38,095 | | | 37,841 | | | 38,473 | | | 38,100 | |
| Occupancy, equipment and infrastructure costs | | | 15,729 | | | 14,887 | | | 14,362 | | | 14,257 | | | 13,893 | |
| General and administrative expenses | | | 35,803 | | | 37,203 | | | 39,005 | | | 36,697 | | | 39,409 | |
| Foreclosed real estate and other repossessed assets expenses (income), net | | | 1,149 | | | (27) | | | (2,320) | | | 793 | | | 239 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Total non-interest expense | | | 94,099 | | | 90,158 | | | 88,888 | | | 90,220 | | | 91,641 | |
| Income before income taxes | | | 68,432 | | | 65,898 | | | 65,785 | | | 65,133 | | | 68,138 | |
| Income tax expense | | | 21,835 | | | 21,025 | | | 21,612 | | | 18,904 | | | 21,771 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Net income available to common shareholders | | | $ | 46,597 | | | $ | 44,873 | | | $ | 44,173 | | | $ | 46,229 | | | $ | 46,367 | |
(a) During 4Q 2023, annual insurance contingent commissions amounted to $2.5 million, $1.3 million higher than a year ago due to last year’s Hurricane Fiona’s related claims.
(b) During 4Q 2023, the Company recognized a reduction of $1.1 million in mortgage servicing asset valuation.
(c) During 4Q 2023, the Company recognized a $6.3 million gain on the sale of commercial non-performing loans held-for-sale amounting to $4.3 million, with an unpaid principal balance of $25.3 million.
(d) During 4Q 2023, the Company recognized higher compensation expenses by $2.8 million from a voluntary retirement program launched during the quarter and other rightsizing initiatives.
OFG Bancorp (NYSE: OFG)
Table 2-2: Consolidated Statements of Operations (Continued)
| | | | | | | | | | | | | | | | | | |
| (Dollars in thousands, except per share data) (unaudited) | | | Year Ended |
| December 31, 2023 | | December 31, 2022 | |
| Interest income: | | | | | | |
| Loans | | | | | | |
| Non-PCD loans | | | $ | 482,043 | | | $ | 381,334 | | |
| PCD loans | | | 72,701 | | | 78,828 | | |
| Total interest income from loans | | | 554,744 | | | 460,162 | | |
| Investment securities and cash | | | 94,136 | | | 55,411 | | |
| Total interest income | | | 648,880 | | | 515,573 | | |
| Interest expense: | | | | | | |
| Deposits | | | | | | |
| Core deposits | | | 73,945 | | | 32,204 | | |
| Brokered deposits | | | 2,020 | | | 35 | | |
| Total deposits | | | 75,965 | | | 32,239 | | |
| Borrowings | | | 12,045 | | | 1,254 | | |
| Total interest expense | | | 88,010 | | | 33,493 | | |
| Net interest income | | | 560,870 | | | 482,080 | | |
| Provision for credit losses, excluding PCD loans | | | 62,125 | | | 42,129 | | |
| Recapture of credit losses on PCD loans | | | (1,487) | | | (18,010) | | |
| Total provision for credit losses | | | 60,638 | | | 24,119 | | |
| Net interest income after provision for credit losses | | | 500,232 | | | 457,961 | | |
| Non-interest income: | | | | | | |
| Banking service revenues | | | 70,078 | | | 71,161 | | |
| Wealth management revenues | | | 32,990 | | (a) | 32,635 | | |
| Mortgage banking activities | | | 18,787 | | (b) | 21,929 | | |
| Total banking and financial service revenues | | | 121,855 | | | 125,725 | | |
| | | | | | |
| Other income, net | | | 6,526 | | (c) | 5,965 | | |
| Total non-interest income, net | | | 128,381 | | | 131,690 | | |
| Non-interest expense: | | | | | | |
| Compensation and employee benefits | | | 155,827 | | (d) | 142,930 | | |
| Occupancy, equipment and infrastructure costs | | | 59,235 | | | 51,308 | | |
| General and administrative expenses | | | 148,708 | | | 153,382 | | |
| Foreclosed real estate and other repossessed assets income, net of expenses | | | (405) | | | (2,074) | | |
| | | | | | |
| | | | | | |
| Total non-interest expense | | | 363,365 | | | 345,546 | | |
| Income before income taxes | | | 265,248 | | | 244,105 | | |
| Income tax expense | | | 83,376 | | | 77,866 | | |
| | | | | | |
| | | | | | |
| Net income available to common shareholders | | | $ | 181,872 | | | $ | 166,239 | | |
(a)Refer to “(a)” in Table 2-1.
(b)Refer to “(b)” in Table 2-1.
(c)Refer to “(c)” in Table 2-1.
(d)Refer to “(d)” in Table 2-1. During the year ended December 31, 2023, salaries increased by $6.7 million.
OFG Bancorp (NYSE: OFG)
Table 3: Consolidated Statements of Financial Condition | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (Dollars in thousands) (unaudited) | | | December 31, 2023 | | September 30, 2023 | | June 30, 2023 | | March 31, 2023 | | December 31, 2022 |
| Cash and cash equivalents | | | $ | 748,173 | | (a) | $ | 532,699 | | | $ | 798,973 | | | $ | 847,494 | | | $ | 550,464 | |
| Investments: | | | | | | | | | | | |
| Trading securities | | | 13 | | | 14 | | | 13 | | | 10 | | | 9 | |
| Investment securities available-for-sale, at fair value, no allowance for credit losses for any period | | | | | | | | | | | |
| Mortgage-backed securities | | | 1,801,849 | | (a) | 1,511,779 | | | 1,139,996 | | | 1,109,889 | | | 1,102,501 | |
| US treasury notes | | | 296,799 | | (a) | 739 | | | 748 | | | 242,098 | | | 309,133 | |
| Other investment securities | | | 616 | | | 635 | | | 1,101 | | | 1,119 | | | 1,142 | |
| Total investment securities available-for-sale | | | 2,099,264 | | | 1,513,153 | | | 1,141,845 | | | 1,353,106 | | | 1,412,776 | |
| | | | | | | | | | | |
| Investment securities held-to-maturity, at amortized cost, no allowance for credit losses for any period | | | | | | | | | | | |
| Mortgage-backed securities | | | 314,710 | | | 320,249 | | | 326,935 | | | 332,852 | | | 337,435 | |
| US treasury notes | | | 199,314 | | | 198,896 | | | 198,478 | | | 198,028 | | | 197,635 | |
| Other investment securities | | | 35,000 | | | — | | | — | | | — | | | — | |
| Total investment securities held-to-maturity | | | 549,024 | | | 519,145 | | | 525,413 | | | 530,880 | | | 535,070 | |
| Equity securities | | | 38,469 | | | 42,162 | | | 35,946 | | | 33,218 | | | 23,667 | |
| Total investments | | | 2,686,770 | | | 2,074,474 | | | 1,703,217 | | | 1,917,214 | | | 1,971,522 | |
| Loans, net | | | 7,401,618 | | | 7,130,052 | | | 6,988,244 | | | 6,735,281 | | | 6,723,236 | |
| Other assets: | | | | | | | | | | | |
| | | | | | | | | | | |
| Prepaid expenses | | | 62,858 | | | 67,191 | | | 67,966 | | | 59,125 | | | 54,641 | |
| Deferred tax asset, net | | | 4,923 | | | 11,121 | | | 20,306 | | | 37,372 | | | 55,485 | |
| Foreclosed real estate and repossessed properties | | | 14,812 | | | 13,987 | | | 14,643 | | | 13,813 | | | 15,831 | |
| Premises and equipment, net | | | 104,102 | | | 103,040 | | | 104,166 | | | 104,851 | | | 106,820 | |
| Goodwill | | | 84,241 | | | 84,241 | | | 84,241 | | | 84,241 | | | 84,241 | |
| Other intangibles | | | 20,694 | | | 22,419 | | | 24,143 | | | 25,868 | | | 27,593 | |
| Right of use assets | | | 21,725 | | | 20,011 | | | 21,840 | | | 23,897 | | | 25,363 | |
| Servicing asset | | | 49,520 | | | 50,601 | | | 49,966 | | | 49,345 | | | 50,921 | |
| Accounts receivable and other assets | | | 145,017 | | | 147,302 | | | 153,842 | | | 159,080 | | | 152,663 | |
| Total assets | | | $ | 11,344,453 | | | $ | 10,257,138 | | | $ | 10,031,547 | | | $ | 10,057,581 | | | $ | 9,818,780 | |
| | | | | | | | | | | |
| Deposits: | | | | | | | | | | | |
| Demand deposits | | | $ | 6,050,428 | | (a) | $ | 4,894,958 | | | $ | 5,008,521 | | | $ | 5,038,122 | | | $ | 5,176,758 | |
| Savings accounts | | | 2,088,102 | | | 2,216,162 | | | 2,222,326 | | | 2,271,774 | | | 2,227,965 | |
| Time deposits | | | 1,461,459 | | | 1,427,497 | | | 1,307,179 | | | 1,255,525 | | | 1,152,270 | |
| Brokered deposits | | | 162,180 | | | 2,936 | | | — | | | — | | | 11,371 | |
| Total deposits | | | 9,762,169 | | | 8,541,553 | | | 8,538,026 | | | 8,565,421 | | | 8,568,364 | |
| Borrowings: | | | | | | | | | | | |
| Securities sold under agreements to repurchase | | | — | | (a) | 150,701 | | | — | | | — | | | — | |
| Advances from FHLB and other borrowings | | | 200,770 | | | 300,774 | | | 226,507 | | | 226,789 | | | 27,034 | |
| | | | | | | | | | | |
| Total borrowings | | | 200,770 | | | 451,475 | | | 226,507 | | | 226,789 | | | 27,034 | |
| Other liabilities: | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Acceptances outstanding | | | 25,576 | | | 30,984 | | | 35,945 | | | 30,094 | | | 28,607 | |
| Lease liability | | | 24,029 | | | 22,269 | | | 24,031 | | | 25,990 | | | 27,370 | |
| GNMA buy-back option program liability | (22) | | | 19,401 | | | 18,227 | | | 18,417 | | | 26,348 | | | 32,590 | |
| Deferred tax liability, net | | | 22,444 | | | — | | | — | | | — | | | — | |
| Accrued expenses and other liabilities | | | 96,584 | | | 97,167 | | | 88,870 | | | 93,429 | | | 92,409 | |
| Total liabilities | | | 10,150,973 | | | 9,161,675 | | | 8,931,796 | | | 8,968,071 | | | 8,776,374 | |
| Stockholders' equity: | | | | | | | | | | | |
| | | | | | | | | | | |
| Common stock | | | 59,885 | | | 59,885 | | | 59,885 | | | 59,885 | | | 59,885 | |
| Additional paid-in capital | | | 638,667 | | | 637,389 | | | 636,051 | | | 634,785 | | | 636,793 | |
| Legal surplus | | | 150,967 | | | 146,774 | | | 142,567 | | | 138,333 | | | 133,901 | |
| Retained earnings | | | 639,324 | | | 607,466 | | | 577,042 | | | 547,641 | | | 516,371 | |
| Treasury stock, at cost | | | (228,350) | | | (228,374) | | | (226,230) | | | (212,794) | | | (211,135) | |
| Accumulated other comprehensive income (loss), net | | | (67,013) | | | (127,677) | | | (89,564) | | | (78,340) | | | (93,409) | |
| Total stockholders' equity | | | 1,193,480 | | | 1,095,463 | | | 1,099,751 | | | 1,089,510 | | | 1,042,406 | |
| Total liabilities and stockholders' equity | | | $ | 11,344,453 | | | $ | 10,257,138 | | | $ | 10,031,547 | | | $ | 10,057,581 | | | $ | 9,818,780 | |
(a) During 4Q 2023, the Company received a Puerto Rico government deposit amounting to $1.2 billion; and purchased $300 million short-term US treasury bills, $250 million long-term government insured mortgage-backed securities, and repaid at maturity $150 million repurchase agreements.
OFG Bancorp (NYSE: OFG)
Table 4-1: Information on Loan Portfolio and Production
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (Dollars in thousands) (unaudited) | | | December 31, 2023 | | September 30, 2023 | | June 30, 2023 | | March 31, 2023 | | December 31, 2022 |
| Non-PCD: | | | | | | | | | | | |
| Mortgage, excluding GNMA buy-back option program | | | $ | 609,846 | | | $ | 630,187 | | | $ | 623,138 | | | $ | 634,799 | | | $ | 643,203 | |
| Mortgage GNMA buy-back option program | (22) | | 19,401 | | | 18,227 | | | 18,417 | | | 26,348 | | | 32,590 | |
| | | | | | | | | | | |
| Commercial, excluding Commercial US | | | 2,186,228 | | | 1,985,535 | | | 1,952,178 | | | 1,808,379 | | | 1,828,644 | |
| Commercial US | | | 755,228 | | | 707,593 | | | 669,332 | | | 617,574 | | | 642,133 | |
| Consumer | | | 619,894 | | | 612,623 | | | 593,122 | | | 564,365 | | | 536,619 | |
| Auto | | | 2,272,530 | | | 2,208,993 | | | 2,124,076 | | | 2,034,676 | | | 1,958,257 | |
| | | 6,463,127 | | | 6,163,158 | | | 5,980,263 | | | 5,686,141 | | | 5,641,446 | |
| Less: Allowance for credit losses | | | (152,610) | | | (148,210) | | | (150,167) | | | (141,385) | | | (141,841) | |
| Total non-PCD loans held for investment, net | | | 6,310,517 | | | 6,014,948 | | | 5,830,096 | | | 5,544,756 | | | 5,499,605 | |
| | | | | | | | | | | |
| PCD: | | | | | | | | | | | |
| Mortgage | | | 933,362 | | | 955,596 | | | 980,833 | | | 1,007,751 | | | 1,028,428 | |
| Commercial | | | 135,447 | | | 139,857 | | | 152,888 | | | 155,614 | | | 159,152 | |
| Consumer | | | 552 | | | 572 | | | 568 | | | 607 | | | 638 | |
| Auto | | | 1,891 | | | 2,552 | | | 3,319 | | | 4,367 | | | 5,658 | |
| | | 1,071,252 | | | 1,098,577 | | | 1,137,608 | | | 1,168,339 | | | 1,193,876 | |
| Less: Allowance for credit losses | | | (8,496) | | | (9,319) | | | (9,756) | | | (10,499) | | | (10,832) | |
| Total PCD loans held for investment, net | | | 1,062,756 | | | 1,089,258 | | | 1,127,852 | | | 1,157,840 | | | 1,183,044 | |
| Total loans held for investment | | | 7,373,273 | | | 7,104,206 | | | 6,957,948 | | | 6,702,596 | | | 6,682,649 | |
| Mortgage loans held for sale | | | — | | | 564 | | | 11,397 | | | 13,616 | | | 19,499 | |
| Other loans held for sale | | | 28,345 | | | 25,282 | | | 18,899 | | | 19,069 | | | 21,088 | |
| Total loans, net | | | $ | 7,401,618 | | | $ | 7,130,052 | | | $ | 6,988,244 | | | $ | 6,735,281 | | | $ | 6,723,236 | |
| | | | | | | | | | | |
| Loan Portfolio Summary: | | | | | | | | | | | |
| Loans held for investment: | | | | | | | | | | | |
| Mortgage, excluding GNMA buy-back option program | | | $ | 1,543,208 | | | $ | 1,585,783 | | | $ | 1,603,971 | | | $ | 1,642,550 | | | $ | 1,671,631 | |
| Mortgage GNMA buy-back option program | (22) | | 19,401 | | | 18,227 | | | 18,417 | | | 26,348 | | | 32,590 | |
| | | | | | | | | | | |
| Commercial, excluding Commercial US | | | 2,321,675 | | | 2,125,392 | | | 2,105,066 | | | 1,963,993 | | | 1,987,796 | |
| Commercial US | | | 755,228 | | | 707,593 | | | 669,332 | | | 617,574 | | | 642,133 | |
| Consumer | | | 620,446 | | | 613,195 | | | 593,690 | | | 564,972 | | | 537,257 | |
| Auto | | | 2,274,421 | | | 2,211,545 | | | 2,127,395 | | | 2,039,043 | | | 1,963,915 | |
| | | 7,534,379 | | | 7,261,735 | | | 7,117,871 | | | 6,854,480 | | | 6,835,322 | |
| Less: Allowance for credit losses | | | (161,106) | | | (157,529) | | | (159,923) | | | (151,884) | | | (152,673) | |
| Total loans held for investment, net | | | 7,373,273 | | | 7,104,206 | | | 6,957,948 | | | 6,702,596 | | | 6,682,649 | |
| Mortgage loans held for sale | | | — | | | 564 | | | 11,397 | | | 13,616 | | | 19,499 | |
| Other loans held for sale | | | 28,345 | | | 25,282 | | | 18,899 | | | 19,069 | | | 21,088 | |
| Total loans, net | | | $ | 7,401,618 | | | $ | 7,130,052 | | | $ | 6,988,244 | | | $ | 6,735,281 | | | $ | 6,723,236 | |
OFG Bancorp (NYSE: OFG)
Table 4-2: Information on Loan Portfolio and Production
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Quarter Ended | | Year Ended |
| (Dollars in thousands) (unaudited) | | December 31, 2023 | | September 30, 2023 | | June 30, 2023 | | March 31, 2023 | | December 31, 2022 | | December 31, 2023 | | December 31, 2022 |
| Loan production | (13) | | | | | | | | | | | | | | |
| Mortgage | | | $ | 33,332 | | | $ | 33,346 | | | $ | 35,932 | | | $ | 30,344 | | | $ | 35,242 | | | $ | 132,954 | | | $ | 200,905 | |
| Commercial | | | 285,517 | | | 150,105 | | | 210,746 | | | 98,300 | | | 209,078 | | | 744,668 | | | 651,834 | |
| | | | | | | | | | | | | | | |
| Commercial US | | | 57,442 | | | 70,311 | | | 111,817 | | | 124,074 | | | 83,162 | | | 363,644 | | | 338,488 | |
| Consumer | | | 63,785 | | | 76,465 | | | 87,062 | | | 86,284 | | | 67,515 | | | 313,596 | | | 334,239 | |
| Auto | | | 223,780 | | | 237,290 | | | 236,283 | | | 222,325 | | | 221,369 | | | 919,678 | | | 812,598 | |
| Total | | | $ | 663,856 | | | $ | 567,517 | | | $ | 681,840 | | | $ | 561,327 | | | $ | 616,366 | | | $ | 2,474,540 | | | $ | 2,338,064 | |
OFG Bancorp (NYSE: OFG)
Table 5-1: Average Balances, Net Interest Income and Net Interest Margin | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2023 Q4 | | 2023 Q3 | | 2023 Q2 | | 2023 Q1 | | 2022 Q4 |
| (Dollars in thousands) (unaudited) | | | Average
Balance | | Interest
Income/
Expense | | Yield/
Rate | | Average
Balance | | Interest
Income/
Expense | | Yield/
Rate | | Average
Balance | | Interest
Income/
Expense | | Yield/
Rate | | Average
Balance | | Interest
Income/
Expense | | Yield/
Rate | | Average
Balance | | Interest
Income/
Expense | | Yield/
Rate |
| Interest earning assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash equivalents | | | $ | 517,025 | | | $ | 6,906 | | | 5.30 | % | | $ | 680,864 | | | $ | 9,025 | | | 5.26 | % | | $ | 693,373 | | | $ | 9,029 | | | 5.22 | % | | $ | 552,635 | | | $ | 6,445 | | | 4.73 | % | | $ | 551,555 | | | $ | 5,115 | | | 3.68 | % |
| Investment securities | | | 2,194,952 | | | 20,517 | | | 3.74 | % | | 1,830,060 | | | 14,544 | | | 3.18 | % | | 1,796,517 | | | 13,441 | | | 2.99 | % | | 1,939,990 | | | 14,229 | | | 2.93 | % | | 2,103,694 | | | 15,612 | | | 2.97 | % |
| Loans held for investment | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-PCD loans | | | 6,320,321 | | | 131,167 | | | 8.23 | % | | 6,065,822 | | | 124,847 | | | 8.17 | % | | 5,840,860 | | | 116,699 | | | 8.01 | % | | 5,670,966 | | | 109,330 | | | 7.82 | % | | 5,542,986 | | | 105,238 | | | 7.53 | % |
| PCD loans | | | 1,096,763 | | | 17,609 | | | 6.42 | % | | 1,125,421 | | | 17,292 | | | 6.15 | % | | 1,162,111 | | | 18,819 | | | 6.48 | % | | 1,195,620 | | | 18,981 | | | 6.35 | % | | 1,227,355 | | | 19,762 | | | 6.44 | % |
| Total loans | | | 7,417,084 | | | 148,776 | | | 7.96 | % | | 7,191,243 | | | 142,139 | | | 7.84 | % | | 7,002,971 | | | 135,518 | | | 7.76 | % | | 6,866,586 | | | 128,311 | | | 7.58 | % | | 6,770,341 | | | 125,000 | | | 7.32 | % |
| Total interest-earning assets | | | $ | 10,129,061 | | | $ | 176,199 | | | 6.90 | % | | $ | 9,702,167 | | | $ | 165,708 | | | 6.78 | % | | $ | 9,492,861 | | | $ | 157,988 | | | 6.68 | % | | $ | 9,359,211 | | | $ | 148,985 | | | 6.46 | % | | $ | 9,425,590 | | | $ | 145,727 | | | 6.13 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NOW accounts | | | $ | 2,559,135 | | | $ | 9,551 | | | 1.48 | % | | $ | 2,445,955 | | | $ | 6,974 | | | 1.13 | % | | $ | 2,455,040 | | | $ | 4,973 | | | 0.81 | % | | $ | 2,497,917 | | | $ | 4,212 | | | 0.68 | % | | $ | 2,624,602 | | | $ | 4,050 | | | 0.61 | % |
| Savings accounts | | | 2,141,230 | | | 4,986 | | | 0.92 | % | | 2,260,678 | | | 5,478 | | | 0.96 | % | | 2,222,710 | | | 4,129 | | | 0.75 | % | | 2,232,903 | | | 3,135 | | | 0.57 | % | | 2,291,884 | | | 2,250 | | | 0.39 | % |
| Time deposits | | | 1,439,833 | | | 8,895 | | | 2.45 | % | | 1,333,132 | | | 7,014 | | | 2.09 | % | | 1,277,861 | | | 5,493 | | | 1.72 | % | | 1,209,432 | | | 3,821 | | | 1.28 | % | | 1,131,791 | | | 2,373 | | | 0.83 | % |
| Brokered deposits | | | 142,718 | | | 1,980 | | | 5.50 | % | | 2,400 | | | 32 | | | 5.30 | % | | — | | | — | | | — | % | | 10,229 | | | 8 | | | 0.30 | % | | 11,366 | | | 9 | | | 0.30 | % |
| | | | 6,282,916 | | | 25,412 | | | 1.60 | % | | 6,042,165 | | | 19,498 | | | 1.28 | % | | 5,955,611 | | | 14,595 | | | 0.98 | % | | 5,950,481 | | | 11,176 | | | 0.76 | % | | 6,059,643 | | | 8,682 | | | 0.57 | % |
| Non-interest bearing deposit accounts | | | 2,551,318 | | | — | | | — | | | 2,581,887 | | | — | | | — | | | 2,575,972 | | | — | | | — | | | 2,654,140 | | | — | | | — | | | 2,710,803 | | | — | | | — | |
| Fair value premium and core deposit intangible amortization | | | — | | | 1,321 | | | — | | | — | | | 1,321 | | | — | | | — | | | 1,321 | | | — | | | — | | | 1,321 | | | — | | | — | | | 1,585 | | | — | |
| Total deposits | | | 8,834,234 | | | 26,733 | | | 1.20 | % | | 8,624,052 | | | 20,819 | | | 0.96 | % | | 8,531,583 | | | 15,916 | | | 0.75 | % | | 8,604,621 | | | 12,497 | | | 0.59 | % | | 8,770,446 | | | 10,267 | | | 0.46 | % |
| Borrowings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Securities sold under agreements to repurchase | | | 183,858 | | | 2,578 | | | 5.56 | % | | 52,365 | | | 728 | | | 5.52 | % | | — | | | — | | | — | % | | — | | | — | | | — | % | | — | | | — | | | — | % |
| Advances from FHLB and other borrowings | | | 275,457 | | | 3,346 | | | 4.82 | % | | 211,616 | | | 2,374 | | | 4.45 | % | | 226,256 | | | 2,428 | | | 4.30 | % | | 64,168 | | | 591 | | | 3.74 | % | | 26,820 | | | 178 | | | 2.64 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total borrowings | | | 459,315 | | | 5,924 | | | 5.12 | % | | 263,981 | | | 3,102 | | | 4.66 | % | | 226,256 | | | 2,428 | | | 4.30 | % | | 64,168 | | | 591 | | | 3.74 | % | | 26,820 | | | 178 | | | 2.64 | % |
| Total interest-bearing liabilities | | | $ | 9,293,549 | | | $ | 32,657 | | | 1.39 | % | | $ | 8,888,033 | | | $ | 23,921 | | | 1.07 | % | | $ | 8,757,839 | | | $ | 18,344 | | | 0.84 | % | | $ | 8,668,789 | | | $ | 13,088 | | | 0.61 | % | | $ | 8,797,266 | | | $ | 10,445 | | | 0.47 | % |
| Interest rate spread | | | | | $ | 143,542 | | | 5.51 | % | | | | $ | 141,787 | | | 5.71 | % | | | | $ | 139,644 | | | 5.84 | % | | | | $ | 135,897 | | | 5.85 | % | | | | $ | 135,282 | | | 5.66 | % |
| Net interest margin | | | | | | | 5.62 | % | | | | | | 5.80 | % | | | | | | 5.90 | % | | | | | | 5.89 | % | | | | | | 5.69 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Core deposits: (Non-GAAP) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NOW accounts | | | $ | 2,559,135 | | | $ | 9,551 | | | 1.48 | % | | $ | 2,445,955 | | | $ | 6,974 | | | 1.13 | % | | $ | 2,455,040 | | | $ | 4,973 | | | 0.81 | % | | $ | 2,497,917 | | | $ | 4,212 | | | 0.68 | % | | $ | 2,624,602 | | | $ | 4,050 | | | 0.61 | % |
| Savings accounts | | | 2,141,230 | | | 4,986 | | | 0.92 | % | | 2,260,678 | | | 5,478 | | | 0.96 | % | | 2,222,710 | | | 4,129 | | | 0.75 | % | | 2,232,903 | | | 3,135 | | | 0.57 | % | | 2,291,884 | | | 2,250 | | | 0.39 | % |
| Time deposits | | | 1,439,833 | | | 8,895 | | | 2.45 | % | | 1,333,132 | | | 7,014 | | | 2.09 | % | | 1,277,861 | | | 5,493 | | | 1.72 | % | | 1,209,432 | | | 3,821 | | | 1.28 | % | | 1,131,791 | | | 2,373 | | | 0.83 | % |
| | | | 6,140,198 | | | 23,432 | | | 1.51 | % | | 6,039,765 | | | 19,466 | | | 1.28 | % | | 5,955,611 | | | 14,595 | | | 0.98 | % | | 5,940,252 | | | 11,168 | | | 0.76 | % | | 6,048,277 | | | 8,673 | | | 0.57 | % |
| Non-interest bearing deposit accounts | | | 2,551,318 | | | — | | | — | | | 2,581,887 | | | — | | | — | | | 2,575,972 | | | — | | | — | | | 2,654,140 | | | — | | | — | | | 2,710,803 | | | — | | | — | |
| Total core deposits | | | $ | 8,691,516 | | | $ | 23,432 | | | 1.07 | % | | $ | 8,621,652 | | | $ | 19,466 | | | 0.90 | % | | $ | 8,531,583 | | | $ | 14,595 | | | 0.69 | % | | $ | 8,594,392 | | | $ | 11,168 | | | 0.53 | % | | $ | 8,759,080 | | | $ | 8,673 | | | 0.39 | % |
| Total borrowings and brokered deposits: (Non-GAAP) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total borrowings | | | $ | 459,315 | | | $ | 5,924 | | | 5.12 | % | | $ | 263,981 | | | $ | 3,102 | | | 4.66 | % | | $ | 226,256 | | | $ | 2,428 | | | 4.30 | % | | $ | 64,168 | | | $ | 591 | | | 3.74 | % | | $ | 26,820 | | | $ | 178 | | | 2.64 | % |
| Brokered deposits | | | 142,718 | | | 1,980 | | | 5.50 | % | | 2,400 | | | 32 | | | 5.30 | % | | — | | | — | | | — | % | | 10,229 | | | 8 | | | 0.30 | % | | 11,366 | | | 9 | | | 0.30 | % |
| Total borrowings and brokered deposits | | | $ | 602,033 | | | $ | 7,904 | | | 5.21 | % | | $ | 266,381 | | 266,381 | | $ | 3,134 | | 3,134 | | 4.67 | % | | $ | 226,256 | | 226,256 | | $ | 2,428 | | 2,428 | | 4.30 | % | | $ | 74,397 | | 74,397 | | $ | 599 | | 599 | | 3.27 | % | | $ | 38,186 | | 38,186 | | $ | 187 | | 187 | | 1.94 | % |
OFG Bancorp (NYSE: OFG)
Table 5-2: Average Balances, Net Interest Income and Net Interest Margin (Continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2023 YTD | | 2022 YTD |
| (Dollars in thousands) (unaudited) | | | Average
Balance | | Interest
Income/
Expense | | Yield/
Rate | | Average
Balance | | Interest
Income/
Expense | | Yield/
Rate |
| | | | | | | | | | | | | |
| Interest earning assets: | | | | | | | | | | | | | |
| Cash equivalents | | | $ | 626,067 | | | $ | 31,406 | | | 5.02 | % | | $ | 1,291,633 | | | $ | 14,689 | | | 1.14 | % |
| Investment securities | | | 1,940,776 | | | 62,730 | | | 3.23 | % | | 1,594,662 | | | 40,722 | | | 2.55 | % |
| Loans held for investment | | | | | | | | | | | | | |
| Non-PCD loans | | | 5,976,521 | | | 482,043 | | | 8.07 | % | | 5,351,639 | | | 381,334 | | | 7.13 | % |
| PCD loans | | | 1,144,655 | | | 72,701 | | | 6.35 | % | | 1,306,121 | | | 78,828 | | | 6.04 | % |
| Total loans | | | 7,121,176 | | | 554,744 | | | 7.79 | % | | 6,657,760 | | | 460,162 | | | 6.91 | % |
| Total interest-earning assets | | | $ | 9,688,019 | | | $ | 648,880 | | | 6.70 | % | | $ | 9,544,055 | | | $ | 515,573 | | | 5.40 | % |
| | | | | | | | | | | | | |
| Interest bearing liabilities: | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | |
| NOW accounts | | | $ | 2,489,560 | | | $ | 25,710 | | | 1.03 | % | | $ | 2,761,653 | | | $ | 11,291 | | | 0.41 | % |
| Savings accounts | | | 2,214,256 | | | 17,727 | | | 0.80 | % | | 2,306,607 | | | 6,470 | | | 0.28 | % |
| Time deposits | | | 1,315,745 | | | 25,225 | | | 1.92 | % | | 1,143,469 | | | 7,943 | | | 0.69 | % |
| Brokered deposits | | | 39,100 | | | 2,020 | | | 5.16 | % | | 11,366 | | | 35 | | | 0.30 | % |
| | | 6,058,661 | | | 70,682 | | | 1.17 | % | | 6,223,095 | | | 25,739 | | | 0.41 | % |
| Non-interest bearing deposit accounts | | | 2,590,523 | | | — | | | — | % | | 2,647,871 | | | — | | | — | % |
| Fair value premium and core deposit intangible amortization | | | — | | | 5,283 | | | — | | | — | | | 6,500 | | | — | |
| Total deposits | | | 8,649,184 | | | 75,965 | | | 0.88 | % | | 8,870,966 | | | 32,239 | | | 0.36 | % |
| Borrowings | | | | | | | | | | | | | |
| Securities sold under agreements to repurchase | | | 59,541 | | | 3,305 | | | 5.55 | % | | — | | | — | | | — | % |
| Advances from FHLB and other borrowings | | | 195,000 | | | 8,740 | | | 4.48 | % | | 27,497 | | | 733 | | | 2.67 | % |
| | | | | | | | | | | | | |
| Total borrowings | | | 254,541 | | | 12,045 | | | 4.73 | % | | 31,461 | | | 1,254 | | | 3.99 | % |
| Total interest-bearing liabilities | | | $ | 8,903,725 | | | $ | 88,010 | | | 0.99 | % | | $ | 8,902,427 | | | $ | 33,493 | | | 0.38 | % |
| Interest rate spread | | | | | $ | 560,870 | | | 5.71 | % | | | | $ | 482,080 | | | 5.02 | % |
| Net interest margin | | | | | | | 5.79 | % | | | | | | 5.05 | % |
| | | | | | | | | | | | | |
| Core deposits: (Non-GAAP) | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| NOW accounts | | | $ | 2,489,560 | | | $ | 25,710 | | | 1.03 | % | | $ | 2,761,653 | | | $ | 11,291 | | | 0.41 | % |
| Savings accounts | | | 2,214,256 | | | 17,727 | | | 0.80 | % | | 2,306,607 | | | 6,470 | | | 0.28 | % |
| Time deposits | | | 1,315,745 | | | 25,225 | | | 1.92 | % | | 1,143,469 | | | 7,943 | | | 0.69 | % |
| | | 6,019,561 | | | 68,662 | | | 1.14 | % | | 6,211,729 | | | 25,704 | | | 0.41 | % |
| Non-interest bearing deposit accounts | | | 2,590,523 | | | — | | | — | % | | 2,647,871 | | | — | | | — | % |
| Total core deposits | | | $ | 8,610,084 | | | $ | 68,662 | | | 0.80 | % | | $ | 8,859,600 | | | $ | 25,704 | | | 0.29 | % |
| Total borrowings and brokered deposits: (Non-GAAP) | | | | | | | | | | | | | |
| Total borrowings | | | $ | 254,541 | | | $ | 12,045 | | | 4.73 | % | | $ | 31,461 | | | $ | 1,254 | | | 3.99 | % |
| Brokered deposits | | | 39,100 | | | 2,020 | | | 5.16 | % | | 11,366 | | | 35 | | | 0.30 | % |
| Total borrowings and brokered deposits | | | $ | 293,641 | | 293,641 | | $ | 14,065 | | | 4.79 | % | | $ | 42,827 | | 42,827 | | $ | 1,289 | | 1,289 | | 3.01 | % |
OFG Bancorp (NYSE: OFG)
Table 6-1: Loan Information and Performance Statistics | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2023 | | 2023 | | 2023 | | 2023 | | 2022 |
| (Dollars in thousands) (unaudited) | | | Q4 | | Q3 | | Q2 | | Q1 | | Q4 |
| Net Charge-offs | | | | | | | | | | | |
| Non-PCD | | | | | | | | | | | |
| Mortgage: | | | | | | | | | | | |
| Charge-offs | | | $ | 150 | | | $ | 218 | | | $ | 191 | | | $ | 200 | | | $ | 8 | |
| Recoveries | | | (483) | | | (185) | | | (333) | | | (216) | | | (625) | |
| Total mortgage | | | (333) | | | 33 | | | (142) | | | (16) | | | (617) | |
| Commercial: | | | | | | | | | | | |
| Charge-offs | | | 1,066 | | | 8,254 | | | 3,496 | | | 1,375 | | | 3,444 | |
| Recoveries | | | (137) | | | (174) | | | (237) | | | (326) | | | (338) | |
| Total commercial | | | 929 | | | 8,080 | | | 3,259 | | | 1,049 | | | 3,106 | |
| Consumer: | | | | | | | | | | | |
| Charge-offs | | | 6,799 | | | 5,894 | | | 5,518 | | | 5,444 | | | 5,069 | |
| Recoveries | | | (650) | | | (655) | | | (2,003) | | | (867) | | | (1,055) | |
| Total consumer | | | 6,149 | | | 5,239 | | | 3,515 | | | 4,577 | | | 4,014 | |
| Auto: | | | | | | | | | | | |
| Charge-offs | | | 14,658 | | | 10,458 | | | 9,170 | | | 9,478 | | | 10,380 | |
| Recoveries | | | (4,982) | | | (5,193) | | | (8,332) | | | (6,600) | | | (5,001) | |
| Total auto | | | 9,676 | | | 5,265 | | | 838 | | | 2,878 | | | 5,379 | |
| Total | | | $ | 16,421 | | | $ | 18,617 | | | $ | 7,470 | | | $ | 8,488 | | | $ | 11,882 | |
| | | | | | | | | | | |
| PCD | | | | | | | | | | | |
| Mortgage: | | | | | | | | | | | |
| Charge-offs | | | $ | 94 | | | $ | 148 | | | $ | 1 | | | $ | 74 | | | $ | 108 | |
| Recoveries | | | (111) | | | (80) | | | (260) | | | (247) | | | (603) | |
| Total mortgage | | | (17) | | | 68 | | | (259) | | | (173) | | | (495) | |
| Commercial: | | | | | | | | | | | |
| Charge-offs | | | — | | | 690 | | | — | | | 2,104 | | | 12 | |
| Recoveries | | | (315) | | | (494) | | | (319) | | | (490) | | | (264) | |
| Total commercial | | | (315) | | | 196 | | | (319) | | | 1,614 | | | (252) | |
| Consumer: | | | | | | | | | | | |
| Charge-offs | | | 244 | | | 39 | | | 123 | | | 215 | | | 120 | |
| Recoveries | | | (19) | | | (23) | | | (43) | | | (11) | | | (11) | |
| Total consumer | | | 225 | | | 16 | | | 80 | | | 204 | | | 109 | |
| Auto: | | | | | | | | | | | |
| Charge-offs | | | 12 | | | 37 | | | 35 | | | 86 | | | 65 | |
| Recoveries | | | (44) | | | (98) | | | (401) | | | (99) | | | (104) | |
| Total auto | | | (32) | | | (61) | | | (366) | | | (13) | | | (39) | |
| Total | | | $ | (139) | | | $ | 219 | | | $ | (864) | | | $ | 1,632 | | | $ | (677) | |
| | | | | | | | | | | |
| Total Net Charge-offs | | | $ | 16,282 | | | $ | 18,836 | | | $ | 6,606 | | | $ | 10,120 | | | $ | 11,205 | |
| Net Charge-off Rates | | | | | | | | | | | |
| Mortgage | | | -0.09 | % | | 0.03 | % | | -0.10 | % | | -0.05 | % | | -0.26 | % |
| Commercial | | | 0.08 | % | | 1.18 | % | | 0.44 | % | | 0.41 | % | | 0.44 | % |
| Consumer | | | 3.95 | % | | 3.33 | % | | 2.37 | % | | 3.30 | % | | 2.95 | % |
| Auto | | | 1.72 | % | | 0.96 | % | | 0.09 | % | | 0.57 | % | | 1.11 | % |
| Total | | | 0.88 | % | | 1.05 | % | | 0.38 | % | | 0.59 | % | | 0.66 | % |
| Average Loans Held For Investment | | | | | | | | | | | |
| Mortgage | | | $ | 1,562,135 | | | $ | 1,576,637 | | | $ | 1,616,873 | | | $ | 1,653,423 | | | $ | 1,699,923 | |
| Commercial | | | 2,966,982 | | | 2,812,274 | | | 2,697,986 | | | 2,627,610 | | | 2,586,536 | |
| Consumer | | | 644,834 | | | 630,492 | | | 606,842 | | | 579,467 | | | 558,809 | |
| Auto | | | 2,243,133 | | | 2,171,840 | | | 2,081,270 | | | 2,006,086 | | | 1,925,073 | |
| Total | | | $ | 7,417,084 | | | $ | 7,191,243 | | | $ | 7,002,971 | | | $ | 6,866,586 | | | $ | 6,770,341 | |
OFG Bancorp (NYSE: OFG)
Table 6-2: Loan Information and Performance Statistics (Excludes PCD Loans)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2023 | | 2023 | | 2023 | | 2023 | | 2022 |
| (Dollars in thousands) (unaudited) | | | Q4 | | Q3 | | Q2 | | Q1 | | Q4 |
| Early Delinquency (30 - 89 days past due) | | | | | | | | | | | |
| Mortgage | | | $ | 15,703 | | | $ | 14,380 | | | $ | 13,976 | | | $ | 11,417 | | | $ | 15,115 | |
| Commercial | | | 3,653 | | | 5,666 | | | 11,668 | | | 3,898 | | | 2,750 | |
| | | | | | | | | | | |
| Consumer | | | 11,366 | | | 10,160 | | | 8,188 | | | 8,478 | | | 8,895 | |
| Auto | | | 147,681 | | | 139,278 | | | 117,237 | | | 96,294 | | | 112,191 | |
| Total | | | $ | 178,403 | | | $ | 169,484 | | | $ | 151,069 | | | $ | 120,087 | | | $ | 138,951 | |
| Early Delinquency Rates (30 - 89 days past due) | | | | | | | | | | | |
| Mortgage | | | 2.50 | % | | 2.22 | % | | 2.18 | % | | 1.73 | % | | 2.24 | % |
| Commercial | | | 0.12 | % | | 0.21 | % | | 0.45 | % | | 0.16 | % | | 0.11 | % |
| | | | | | | | | | | |
| Consumer | | | 1.83 | % | | 1.66 | % | | 1.38 | % | | 1.50 | % | | 1.66 | % |
| Auto | | | 6.50 | % | | 6.31 | % | | 5.52 | % | | 4.73 | % | | 5.73 | % |
| Total | | | 2.76 | % | | 2.75 | % | | 2.53 | % | | 2.11 | % | | 2.46 | % |
| Total Delinquency (30 days and over past due) | | | | | | | | | | | |
| Mortgage: | | | | | | | | | | | |
| Traditional, Non traditional, and Loans under Loss Mitigation | | | $ | 27,859 | | | $ | 30,661 | | | $ | 31,189 | | | $ | 32,084 | | | $ | 39,239 | |
| GNMA's buy-back option program | (22) | | 19,401 | | | 18,227 | | | 18,418 | | | 26,348 | | | 32,590 | |
| Total mortgage | | | 47,260 | | | 48,888 | | | 49,607 | | | 58,432 | | | 71,829 | |
| Commercial | | | 14,298 | | | 15,109 | | | 28,643 | | | 12,881 | | | 12,122 | |
| | | | | | | | | | | |
| Consumer | | | 14,742 | | | 13,422 | | | 11,026 | | | 11,402 | | | 12,008 | |
| Auto | | | 166,737 | | | 155,579 | | | 130,367 | | | 110,749 | | | 131,804 | |
| Total | | | $ | 243,037 | | | $ | 232,998 | | | $ | 219,643 | | | $ | 193,464 | | | $ | 227,763 | |
| Total Delinquency Rates (30 days and over past due) | | | | | | | | | | |
| Mortgage: | | | | | | | | | | | |
| Traditional, Non traditional, and Loans under Loss Mitigation | | | 4.43 | % | | 4.73 | % | | 4.86 | % | | 4.85 | % | | 5.81 | % |
| GNMA's buy-back option program | (22) | | 3.08 | % | | 2.81 | % | | 2.87 | % | | 3.99 | % | | 4.82 | % |
| Total mortgage | | | 7.51 | % | | 7.54 | % | | 7.73 | % | | 8.84 | % | | 10.63 | % |
| Commercial | | | 0.49 | % | | 0.56 | % | | 1.09 | % | | 0.53 | % | | 0.49 | % |
| | | | | | | | | | | |
| Consumer | | | 2.38 | % | | 2.19 | % | | 1.86 | % | | 2.02 | % | | 2.24 | % |
| Auto | | | 7.34 | % | | 7.04 | % | | 6.14 | % | | 5.44 | % | | 6.73 | % |
| Total | | | 3.76 | % | | 3.78 | % | | 3.67 | % | | 3.40 | % | | 4.04 | % |
| Nonperforming Assets | (14) | | | | | | | | | | |
| Mortgage | | | $ | 20,007 | | | $ | 25,354 | | | $ | 27,600 | | | $ | 30,641 | | | $ | 33,512 | |
| Commercial | | | 36,096 | | | 36,649 | | | 43,188 | | | 27,025 | | | 34,432 | |
| | | | | | | | | | | |
| Consumer | | | 3,376 | | | 3,359 | | | 2,907 | | | 2,979 | | | 3,128 | |
| Auto | | | 19,056 | | | 16,301 | | | 13,130 | | | 14,455 | | | 19,613 | |
| Total nonperforming loans | | | 78,535 | | | 81,663 | | | 86,825 | | | 75,100 | | | 90,685 | |
| Foreclosed real estate | | | 10,780 | | | 9,555 | | | 10,639 | | | 9,250 | | | 11,214 | |
| Other repossessed assets | | | 4,032 | | | 4,432 | | | 4,004 | | | 4,563 | | | 4,617 | |
| Total nonperforming assets | | | $ | 93,347 | | | $ | 95,650 | | | $ | 101,468 | | | $ | 88,913 | | | $ | 106,516 | |
| Nonperforming Loan Rates | | | | | | | | | | | |
| Mortgage | | | 3.18 | % | | 3.91 | % | | 4.30 | % | | 4.63 | % | | 4.96 | % |
| Commercial | | | 1.23 | % | | 1.36 | % | | 1.65 | % | | 1.11 | % | | 1.40 | % |
| | | | | | | | | | | |
| Consumer | | | 0.54 | % | | 0.55 | % | | 0.49 | % | | 0.53 | % | | 0.58 | % |
| Auto | | | 0.84 | % | | 0.74 | % | | 0.62 | % | | 0.71 | % | | 1.00 | % |
| Total loans | | | 1.22 | % | | 1.33 | % | | 1.45 | % | | 1.32 | % | | 1.61 | % |
OFG Bancorp (NYSE: OFG)
Table 6-3: Loan Information and Performance Statistics
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2023 | | 2023 | | 2023 | | 2023 | | 2022 |
| (Dollars in thousands) (unaudited) | | | Q4 | | Q3 | | Q2 | | Q1 | | Q4 |
| Nonperforming PCD Loans | (14) | | | | | | | | | | |
| Mortgage | | | $ | 250 | | | $ | 253 | | | $ | 256 | | | $ | 258 | | | $ | 259 | |
| Commercial | | | 6,424 | | | 6,688 | | | 8,104 | | | 8,446 | | | 8,927 | |
| Consumer | | | — | | | 7 | | | — | | | — | | | — | |
| Total nonperforming loans | | | $ | 6,674 | | | $ | 6,948 | | | $ | 8,360 | | | $ | 8,704 | | | $ | 9,186 | |
| Nonperforming PCD Loan Rates | | | | | | | | | | | |
| Mortgage | | | 0.03 | % | | 0.03 | % | | 0.03 | % | | 0.03 | % | | 0.03 | % |
| Commercial | | | 4.74 | % | | 4.78 | % | | 5.30 | % | | 5.43 | % | | 5.61 | % |
| Consumer | | | 0.00 | % | | 1.22 | % | | 0.00 | % | | 0.00 | % | | 0.00 | % |
| Total | | | 0.62 | % | | 0.63 | % | | 0.73 | % | | 0.74 | % | | 0.77 | % |
| Total PCD Loans Held for Investment | | | | | | | | | | | |
| Mortgage | | | $ | 933,362 | | | $ | 955,596 | | | $ | 980,833 | | | $ | 1,007,751 | | | $ | 1,028,428 | |
| Commercial | | | 135,447 | | | 139,857 | | | 152,888 | | | 155,614 | | | 159,152 | |
| Consumer | | | 552 | | | 572 | | | 568 | | | 607 | | | 638 | |
| Auto | | | 1,891 | | | 2,552 | | | 3,319 | | | 4,367 | | | 5,658 | |
| Total loans | | | $ | 1,071,252 | | | $ | 1,098,577 | | | $ | 1,137,608 | | | $ | 1,168,339 | | | $ | 1,193,876 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2023 | | 2023 | | 2023 | | 2023 | | 2022 |
| (Dollars in thousands) (unaudited) | | | Q4 | | Q3 | | Q2 | | Q1 | | Q4 |
| Total Nonperforming Loans | (14) | | | | | | | | | | |
| Mortgage | | | $ | 20,257 | | | $ | 25,607 | | | $ | 27,856 | | | $ | 30,899 | | | $ | 33,771 | |
| Commercial | | | 42,520 | | | 43,337 | | | 51,292 | | | 35,471 | | | 43,359 | |
| | | | | | | | | | | |
| Consumer | | | 3,376 | | | 3,366 | | | 2,907 | | | 2,979 | | | 3,128 | |
| Auto | | | 19,056 | | | 16,301 | | | 13,130 | | | 14,455 | | | 19,613 | |
| Total nonperforming loans | | | $ | 85,209 | | | $ | 88,611 | | | $ | 95,185 | | | $ | 83,804 | | | $ | 99,871 | |
| Total Nonperforming Loan Rates | | | | | | | | | | | |
| Mortgage | | | 1.30 | % | | 1.60 | % | | 1.72 | % | | 1.85 | % | | 1.98 | % |
| Commercial | | | 1.38 | % | | 1.53 | % | | 1.85 | % | | 1.37 | % | | 1.65 | % |
| | | | | | | | | | | |
| Consumer | | | 0.54 | % | | 0.55 | % | | 0.49 | % | | 0.53 | % | | 0.58 | % |
| Auto | | | 0.84 | % | | 0.74 | % | | 0.62 | % | | 0.71 | % | | 1.00 | % |
| Total | | | 1.13 | % | | 1.22 | % | | 1.34 | % | | 1.22 | % | | 1.46 | % |
| Total Loans Held for Investment | | | | | | | | | | | |
| Mortgage | | | $ | 1,562,609 | | | $ | 1,604,010 | | | $ | 1,622,388 | | | $ | 1,668,898 | | | $ | 1,704,221 | |
| Commercial | | | 3,076,903 | | | 2,832,985 | | | 2,774,398 | | | 2,581,567 | | | 2,629,929 | |
| | | | | | | | | | | |
| Consumer | | | 620,446 | | | 613,195 | | | 593,690 | | | 564,972 | | | 537,257 | |
| Auto | | | 2,274,421 | | | 2,211,545 | | | 2,127,395 | | | 2,039,043 | | | 1,963,915 | |
| Total loans | | | $ | 7,534,379 | | | $ | 7,261,735 | | | $ | 7,117,871 | | | $ | 6,854,480 | | | $ | 6,835,322 | |
OFG Bancorp (NYSE: OFG)
Table 7: Allowance for Credit Losses
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Quarter Ended December 31, 2023 |
| (Dollars in thousands) (unaudited) | | Mortgage | | Commercial | | Consumer | | Auto | | Total |
| Allowance for credit losses Non-PCD: | | | | | | | | | | |
| Balance at beginning of period | | $ | 8,364 | | | $ | 41,627 | | | $ | 26,453 | | | $ | 71,766 | | | $ | 148,210 | |
| Provision for (recapture of) credit losses | | (699) | | | 3,343 | | | 6,782 | | | 11,395 | | | 20,821 | |
| Charge-offs | | (150) | | | (1,066) | | | (6,799) | | | (14,658) | | | (22,673) | |
| Recoveries | | 483 | | | 137 | | | 650 | | | 4,982 | | | 6,252 | |
| Balance at end of period | | $ | 7,998 | | | $ | 44,041 | | | $ | 27,086 | | | $ | 73,485 | | | $ | 152,610 | |
| | | | | | | | | | |
| Allowance for credit losses PCD: | | | | | | | | | | |
| Balance at beginning of period | | $ | 8,003 | | | $ | 1,272 | | | $ | 7 | | | $ | 37 | | | $ | 9,319 | |
| (Recapture of) provision for credit losses | | (669) | | | (474) | | | 225 | | | (44) | | | (962) | |
| Charge-offs | | (94) | | | — | | | (244) | | | (12) | | | (350) | |
| Recoveries | | 111 | | | 315 | | | 19 | | | 44 | | | 489 | |
| Balance at end of period | | $ | 7,351 | | | $ | 1,113 | | | $ | 7 | | | $ | 25 | | | $ | 8,496 | |
| | | | | | | | | | |
| Allowance for credit losses summary: | | | | | | | | | | |
| Balance at beginning of period | | $ | 16,367 | | | $ | 42,899 | | | $ | 26,460 | | | $ | 71,803 | | | $ | 157,529 | |
| Provision for (recapture of) credit losses | | (1,368) | | | 2,869 | | | 7,007 | | | 11,351 | | | 19,859 | |
| Charge-offs | | (244) | | | (1,066) | | | (7,043) | | | (14,670) | | | (23,023) | |
| Recoveries | | 594 | | | 452 | | | 669 | | | 5,026 | | | 6,741 | |
| Balance at end of period | | $ | 15,349 | | | $ | 45,154 | | | $ | 27,093 | | | $ | 73,510 | | | $ | 161,106 | |
| Allowance coverage ratio | | 0.98 | % | | 1.47 | % | | 4.37 | % | | 3.23 | % | | 2.14 | % |
| | | | | | | | | | |
OFG Bancorp (NYSE: OFG)
Table 8-1: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital
In addition to disclosing required regulatory capital measures, we also report certain non-GAAP capital measures that management uses in assessing its capital adequacy. These non-GAAP measures include tangible common equity ("TCE") and TCE ratio. The table below provides the details of the calculation of our regulatory capital and non-GAAP capital measures. While our non-GAAP capital measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2023 | | 2023 | | 2023 | | 2023 | | 2022 |
| (Dollars in thousands) (unaudited) | | Q4 | | Q3 | | Q2 | | Q1 | | Q4 |
| Stockholders' Equity to Non-GAAP Tangible Common Equity | | | | | | | | | | |
| Total stockholders' equity | | $ | 1,193,480 | | | $ | 1,095,463 | | | $ | 1,099,751 | | | $ | 1,089,510 | | | $ | 1,042,406 | |
| Less: Intangible assets | | (104,935) | | | (106,660) | | (108,384) | | (110,109) | | (111,834) |
| | | | | | | | | | |
| | | | | | | | | | |
| Tangible common equity | | $ | 1,088,545 | | | $ | 988,803 | | $ | 991,367 | | $ | 979,401 | | $ | 930,572 |
| | | | | | | | | | |
| Common shares outstanding at end of period | | 47,065 | | | 47,058 | | | 47,076 | | | 47,611 | | | 47,581 | |
| Tangible book value per common share (Non-GAAP) | | $ | 23.13 | | | $ | 21.01 | | | $ | 21.06 | | | $ | 20.57 | | | $ | 19.56 | |
| Total Assets to Tangible Assets | | | | | | | | | | |
| Total assets | | $ | 11,344,453 | | | $ | 10,257,138 | | | $ | 10,031,547 | | | $ | 10,057,581 | | | $ | 9,818,780 | |
| Less: Intangible assets | | (104,935) | | (106,660) | | (108,384) | | (110,109) | | (111,834) |
| Tangible assets (Non-GAAP) | | $ | 11,239,518 | | | $ | 10,150,478 | | | $ | 9,923,163 | | | $ | 9,947,472 | | | $ | 9,706,946 | |
| Non-GAAP TCE Ratio | | | | | | | | | | |
| Tangible common equity | | $ | 1,088,545 | | | $ | 988,803 | | $ | 991,367 | | $ | 979,401 | | $ | 930,572 |
| Tangible assets | | 11,239,518 | | | 10,150,478 | | | 9,923,163 | | | 9,947,472 | | | 9,706,946 | |
| TCE ratio | | 9.68 | % | | 9.74 | % | | 9.99 | % | | 9.85 | % | | 9.59 | % |
| Average Equity to Non-GAAP Average Tangible Common Equity | | | | | | | | | | |
| Average total stockholders' equity | | $ | 1,128,747 | | | $ | 1,127,602 | | | $ | 1,108,880 | | | $ | 1,077,703 | | | $ | 1,025,132 | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| Less: Average intangible assets | | (105,560) | | | (107,291) | | (109,130) | | (110,888) | | (114,412) |
| Average tangible common equity | | $ | 1,023,187 | | | $ | 1,020,311 | | $ | 999,750 | | $ | 966,815 | | $ | 910,720 |
OFG Bancorp (NYSE: OFG)
Table 8-2: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures (Continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | BASEL III |
| | | Standardized |
| | | 2023 | | 2023 | | 2023 | | 2023 | | 2022 |
| (Dollars in thousands) (unaudited) | | | Q4 | | Q3 | | Q2 | | Q1 | | Q4 |
| Regulatory Capital Metrics | | | | | | | | | | | |
| Common equity Tier 1 capital | | | $ | 1,174,205 | | $ | 1,124,599 | | $ | 1,086,587 | | $ | 1,063,919 | | $ | 1,037,385 |
| Tier 1 capital | | | 1,174,205 | | 1,124,599 | | 1,086,587 | | 1,063,919 | | 1,037,385 |
| Total risk-based capital | (15) | | 1,278,537 | | 1,224,963 | | 1,183,793 | | 1,158,744 | | 1,132,658 |
| Risk-weighted assets | | | 8,317,802 | | 8,000,711 | | 7,742,933 | | 7,559,166 | | 7,605,466 |
| Regulatory Capital Ratios | | | | | | | | | | | |
| Common equity Tier 1 capital ratio | (16) | | 14.12 | % | | 14.06 | % | | 14.03 | % | | 14.07 | % | | 13.64 | % |
| Tier 1 risk-based capital ratio | (17) | | 14.12 | % | | 14.06 | % | | 14.03 | % | | 14.07 | % | | 13.64 | % |
| Total risk-based capital ratio | (18) | | 15.37 | % | | 15.31 | % | | 15.29 | % | | 15.33 | % | | 14.89 | % |
| Leverage ratio | (19) | | 11.03 | % | | 11.03 | % | | 10.85 | % | | 10.75 | % | | 10.36 | % |
| | | | | | | | | | | | |
| Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach | | | | | | | | | | |
| Total stockholders' equity | | | $ | 1,193,480 | | $ | 1,095,463 | | | $ | 1,099,751 | | | $ | 1,089,510 | | | $ | 1,042,406 | |
| Plus: CECL transition adjustment | (20) | | 13,704 | | 13,704 | | 13,704 | | 13,704 | | 20,557 |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Less: Unrealized losses on available-for-sale securities, net of income tax | | | 67,013 | | 127,677 | | 89,639 | | 78,512 | | 93,663 |
| Unrealized (gains) losses on cash flow hedges, net of income tax | | | — | | — | | (75) | | (172) | | (254) |
| Total adjusted stockholders’equity | | | 1,274,197 | | 1,236,844 | | 1,203,019 | | 1,181,554 | | 1,156,372 |
| Less: Disallowed goodwill | | | (84,241) | | (84,241) | | (84,241) | | (84,241) | | (84,241) |
| Disallowed other intangible assets, net | | | (15,751) | | (16,883) | | (18,015) | | (19,147) | | (20,279) |
| Disallowed deferred tax assets, net | | | — | | (11,121) | | (14,176) | | (14,247) | | (14,467) |
| Common equity Tier 1 capital and Tier 1 capital | | | 1,174,205 | | 1,124,599 | | 1,086,587 | | 1,063,919 | | 1,037,385 |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Plus Tier 2 capital: Qualifying allowance for credit losses | | | 104,332 | | 100,364 | | 97,206 | | 94,825 | | 95,273 |
| Total risk-based capital | | | $ | 1,278,537 | | $ | 1,224,963 | | | $ | 1,183,793 | | | $ | 1,158,744 | | | $ | 1,132,658 | |
OFG Bancorp (NYSE: OFG)
Table 9: Notes to Financial Summary, Selected Metrics, Loans, and Consolidated Financial Statements (Tables 1 - 8)
| | | | | |
| (1) | Total banking and financial service revenues. |
| (2) | Net interest income plus non-interest income, net (core) |
| (3) | Calculated based on net income available to common shareholders divided by average common shares outstanding for the period. |
| (4) | Calculated based on net income available to common shareholders divided by total average common shares outstanding and equivalents for the period as if converted. |
| (5) | Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Tables 8-1 and 8-2: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information. |
| (6) | Information includes all loans held for investment, including PCD loans. |
| (7) | Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period. |
| (8) | Calculated based on annualized income, net of tax, for the period divided by average total assets for the period. |
| (9) | Calculated based on annualized income available to common shareholders for the period divided by average tangible common equity for the period. |
| (10) | Calculated based on non-interest expense for the period divided by total net interest income and total banking and financial services revenues for the period. |
| (11) | Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period. |
| (12) | Non-GAAP ratios. See "Tables 8-1 and 8-2: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures" for information on the calculation of each of these ratios. |
| (13) | Production of new loans (excluding renewals). |
| (14) | Most PCD loans are considered to be performing due to the application of the accretion method, in which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analyses. Therefore, they are not included as non-performing loans. PCD loan pools that are not accreting interest income are deemed to be non-performing loans and presented separately. |
| (15) | Total risk-based capital equals the sum of Tier 1 capital and Tier 2 capital. |
| (16) | Common equity Tier 1 capital ratio is a regulatory capital measure calculated based on Common equity Tier 1 capital divided by risk-weighted assets. |
| (17) | Tier 1 risk-based capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets. |
| (18) | Total risk-based capital ratio is a regulatory capital measure calculated based on Total risk-based capital divided by risk-weighted assets. |
| (19) | Leverage capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by average assets, after certain adjustments. |
| (20) | In March 2020, in light of strains on the U.S. economy as a result of the coronavirus disease (COVID-19), the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency issued an interim final rule that provided the option to temporarily delay the effects of CECL on regulatory capital for two years, followed by a three-year transition period. In addition, for the first two years, a uniform 25% “scaling factor” is introduced to approximate the portion of the post day-one allowance attributable to CECL relative to the incurred loss methodology. The 25% scaling factor is calibrated to approximate an overall after-tax impact of differences in allowances under CECL versus the incurred loss methodology. |
| (21) | Pre-provision net revenues is a non-GAAP measure calculated based on net interest income plus total non-interest income, net, less total non-interest expenses for the period. |
| (22) | Under the GNMA program, issuers such as OFG Bancorp have the option but not the obligation to repurchase loans that are 90 days or more past due. For accounting purposes, these loans subject to the repurchase option are required to be reflected (rebooked) on the financial statements of the Company with an offsetting liability. |
| |
