OFG - Earnings call transcript Q4 2024

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Operator

Good morning. Thank you for joining OFG Bancorp's conference call. My name is Madison. I will be your operator today.

Our speakers are José Rafael Fernández, Chief Executive Officer and Chairman of the Board of Directors; Maritza Arizmendi, Chief Financial Officer; and Cesar Ortiz, Chief Risk Officer. remarks. today's accompanies presentation A It can website of OFG the found the Fourth on under homepage Quarter the be XXXX section.

result feature call These anticipated. any information to results may This afterwards. plans We section of in disclaim may certain materially as occur filings. about Factors in of statements [Operator disclosed call Actual SEC management's the and developments Risk expectations. update and from statements obligation risks subject differ a to OFG's are that this uncertainties outlined forward-looking goals, Instructions] those currently

to I would the now Mr. to Fernández. like turn call over

José Fernández

Good morning, for us. and thank you joining

are was our another We performance. fourth It and quarter XXXX year of results. report to outstanding quarter pleased and

and X.X% operational Looking We keeps grew core lower quarter, at services we common share We market on digital-first growth our products, were $XX the per in million a the and share. shares showed from benefited increase upgraded revenues. also of earnings consistent in tools new on fourth plans, self-service banking steadily taxes, back Results about up quarter. of strategy. adoption bought Digital including our our our and total year-over-year XX.X% expanding.

for of a Page fourth quarter our results. Please to turn X summary

expenses net which income pretax reduced year-end revenues We $XX.X Net lower the Noninterest revenues than of was million. earnings Pre-provision interest Provision slightly diluted per $XXX more million. This in income, margin share were totaled $X.XX at offset Looking statement. million. taxes. $XX.X million. on reported resulted of total core was was $XX by X.X%.

investment $X.X Customer year Loans up sheet. billion. X.X% Turning billion. $XX.X a totaled were for $X.X were balance billion, to the held deposits ago. Total assets from

cash $X.X X% a quarter. $XXX.X ago million. at last Investments a billion, and million the from loan production year solid last down was from $XXX quarter, New XX% up was and X% from were

buyback authorization was leaves the XXXX. XX, million as capital, our CETX ratio stock that of bought XX.XX%, $XX.X million remaining $XX we in December on at and Looking back

share turn $XX increased of our a year-over-year total totaled X.XX%. a X Noninterest per on interest $XXX summary $X.XX million. of million total to pre-provision Earnings for $XXX net in Net and results. was was revenues million. Page XX.X% was of margin a revenues increase million. Provision Please expense for core full $XXX year X.X%

Capital average management played interest-earning big Durbin XX.X% to taking we year-over-year. able a increase role. by midyear, with assets Even were effect

mortgage the to In per bought we residential X.X servicing rights a $X.XX Puerto XX% addition, back total to million the quarterly quarter loan dividend $X.X per or We increased we acquired and billion a annually. of $X portfolio. Rico shares, share

Rico's economy concluded continues our fulfilling our XXth and employment. all stakeholders. more members to business Puerto and We being high customers purpose and than progress our with to to help tomorrow. well our business in clients excellent activity in team Thanks ready for of bringing our year always all position, levels of do today to

muscle Please to strategy. Page some building digital-first really X. with real turn our We're

all routine As enrollment, of transactions utilization X% by made growth. being XX% loan payments, close This loan in is of through customer customer and in retail XX% fourth XX% of were digital XX% virtual deposit digital digital retail XX% in channels. of to all teller payments growth quarter, of XX% self-service our and/or retail year-over-year transactions, driven and

it. was new The we Biz X.X By business years, of products year, Servicing services. were last My retail using small all mid-XXXX. XXXX. of last the the end or major have was introduced relaunched introduced March X/X account of clients Portal Over Oriental relaunched December and X

bringing retail businesses and mass mass well, in was launched April program year. doing in more extremely with and There Digital year. account growth cashback First deposits. account affluent its coming The XXXX overall the to the customers Elite this As on XXXX. last this part loans of are pipeline in in was helped local unique our Libre offering, new XX% June market relaunched are achieve to Both

Now more here's go the over detail. financials Maritza in to

Maritza Arizmendi

Please financial José. X highlights. Page to turn review our to you, Thank

Starting of X was the million balances, This cash. from balances income core $XXX higher interest higher income mainly and securities, and yields from components loans, reduced prepayment total million, with the from $X.X higher investment revenues, on reflects increase quarter. up interest $XXX,XXX third of loan commercial

help to lower higher-yielding U.S. since environment anticipated recall, going you rate forward, have longer the been investment last guaranteed duration late year, growing If manage we portfolio adding the securities.

previously a and service Total revenues the average reflects and mortgage third The million of residential an noninterest of favorable banking quarter. were balances wealth $XXX,XXX The slightly reflects of million, balances deposits quarter. valuation in decrease third was core financial Total August. from million average borrowings in million, higher revenues, increase $XX million brokerage in MSR $X.X insurance mainly down mentioned the Puerto of to cost increase from $X.X expense acquisition and servicing the recognition lower annual deposits. slightly $X.X Rico management $XX higher long-term and and commission from portfolio rates, due

$X.X quarter Looking incentives, processing quarter. business of rebates. increase third $X.X annual in retirement expenses. reflects the The card the from totaled at million third They $X.X mainly noninterest $X.X and rightsizing, million million early performance and $XX.X million million, up in the absence

to we and average We combination expect costs a as grow This $XX expense higher $XX and transaction million and reflects fees XXXX amortization banking quarter. a electronic mainly technology million to larger. increased of noninterest spending

mentioned. that was ratio efficiency incentive XX.XX% third XX.XX% I fourth and been quarter quarter. the just ratio efficiency Please in have XX.XX%. the the includes would compared note those, this performance The retirement Without to expenses early

high. X% assets tangible tangible mainly lower XX.XX%, our book $XX.XX. used on equity remained share per buybacks average to That's return and income. Other common on other was was due and was Return from performance quarter, X.XX%, third CapEx share the value in comprehensive capital down

increased up or slightly were million $XX commercial of the commercial from quarter. yield residential quarter held of points quarter. basis auto, X the U.S. mainly X.XX%, mortgages. and billion, third in to to consumer Year-over-year, held was growth and reflects End-of-period Average down $X.X Loan The Rico for Please from Page offsetting loan X turn our balances highlights. operational review loans, third investment increase X.X% investment balances more quarter. in Puerto X.X%. fourth for the than Rico increased Puerto loans repayments loans

in $XXX partially Fourth in lending, X.X% from auto quarter origination and by reflects new and U.S. Rico loan residential a the million commercial increases Rico lending. of commercial, quarter. Puerto consumer increased third mortgage This offset decrease Puerto

small strong We fourth a and lending very continue a had quarter good Residential mortgage commercial top to in have particular, In improved. Puerto commercial Rico. line year.

billion, slightly from third commercial X.X%. or government retail. partially quarter. $X.X reflects in were small deposits decreased $XX in and End-of-period the deposits, This balances by core increase down average a Our decline million a offset

Excluding government the increased. offsetting deposits, also time demand. more and decline in ex Year-over-year, increased, commercial and savings government retail than deposits,

cost third down from points the X XXX was deposit points, basis basis quarter. Core

public was basis $XXX Excluding balance End-of-period was pace $XXX $XXX compared deposit aggregate million funds, in borrowings the to of was to The points. million points cost broker quarter. XX deposits third to compared XX were down XX $XXX Average last million. basis compared million and quarter. X.XX%, rate

NIM compared benefited Net mentioned Fourth the X.XX% quarter. to interest was in before. I X.XX% quarter prepayment commercial slightly loan margin from the third

points Net credit from stable. million million, recovery Net from Page rate benefited rate quarter. down X X.XX%. strength. charge-offs Please million be capital loans. charged-off our the $X.X and to to turn totaled portfolio third the charge-offs to fell net Credit review from continues charge-off to a basis $X.X sale consumer fully $XX to auto X basis a XX quality Overall of charge-off point of and net Consumer's fell X.XX%. quality

At the there were continued same commercial Puerto recoveries in Rico mortgage loans. time, and

As points in and from a the basis year-ago basis quarter. points XX was XX the down rate X result, charge-off total basis down net sequentially points,

model result $X.X to $XX.X Provision loan $X.X million third previously capture for mainly million $X.X related The quarter. auto specific $XX.X from the increase of from fully recent totaled quarter X from million, sales a commercial recovery trends, $X.X the which the also reflects for fourth a auto and included doesn't mentioned increased million qualitative credit million in The million U.S. losses consumer yet. and increase adjustment up delinquency loans, related to the volume, loans.

X.XX%, rates and loan and Looking delinquency X.XX%. The nonperforming at rate X.XX% total was early other credit metrics. The respectively. were

equity other million income. $XX to That points at and the and quarter, capital reflects XX.XX%. the last other total of decreased about XX tangible buybacks end basis share from comprehensive Looking metrics, ratio decreased stockholders' mainly equity common lower

was the XXXX treatment expense $X.X a quarter. and higher compared tax than for with the business discrete benefits. previously ETR Income tax $X.X $XX.X activities The in in million forecasted mainly million decrease of third preferential reduction million reflects to

for XXXX compared to items, for ETR XX.XX% discrete XXXX. Excluding was XX.XX%

about be the year For XXXX, would anticipate full we XX%. ETR

and public commercial customer with portfolio and funds, deposit and net small savings To income increased well, continue business continues the retail deepen summarize balances. fourth lower to area. by balances from as time loans, offset interest growth quarter, added services. higher grow recent by investment and products deposits income relationships to lower we and interest cash in particularly driven partially value Ex grew, the Loan the do the with

deposits banking and fairly margin performance some mostly environment decline steady investment of well retirement, The to reflecting continues in well interest helped are incentives, were Net securities in annual Noninterest solid higher, rates. higher the the expenses electronic spending held due of as early fees amortization. offset be and interest Puerto as quality and technology to economic yield as stable, Credit managed. reduced cost and core Rico. the rightsizing mainly trends business increased from

during Regarding buyback we capital increased allocation, the quarter. our fourth

José. here's Now

José Fernández

Page to Please you, Thank Maritza. turn X.

to Our outlook continues be Puerto and for OFG positive. Rico both

the business high growing, remains Puerto steadily Rico, the levels. economy and Looking are at here optimistic. Altogether, employment island's is at environment wages

we As uncertainties. macro regarding vigilant the always, big remain

positioned trends for levels. our we Consumer customer remain of continue to base. as should and Turning be to well OFG, credit loans as well at deposits growth current

model, the First goals in and continue will new differentiating further time, business Digital innovations we same of the to continue will deploy customer increasing evolve, with and to while Our at efficiencies. our twin strategy invest

altogether, to solid look overall performance. we XXXX a to -- we forward Although forward a look solid

results members. dedication have hard our Our without work not all team the could and been achieved of

We and to what's to them are come. for excited very thankful

With Q&A. formal end this, we the let's Operator, start our presentation.

Operator

will from Instructions] with we And question take [Operator our Kelly KBW. first Motta

Kelly Motta

off starting margin. with Maybe the

and end had high towards what the strong said the really in was came NII margin of Your previously. you

I'm as have XXXX, or in there's only of environment to X.XX% what and if wondering competitive you we As off we walk And through kind look if XXXX. through and could kind the the look build wondering level ahead us deposit cut on ability this you're you seeing a there. the maybe side two both assuming of

José Fernández

-- for Kelly, me question. let your thank you So

about a her just and the let question, and the of by part Maritza NIM competitive me that off talking Let perspective. little . and start with I'll it bit deposits finish

a competitive It's as really to hasn't We from work island this we're side need on sure, on the what perspective changed also rational for we So all the facets. for as seeing our in hard the intense market. and are deposit in side. But much. that's business, in well very loan

have perspective We're seeing that that, opportunity the getting the share throughout on some benefit that good from highlight to you me we it customer what a we 'XX side, to right, market. from So here gives we're an because from little the this achieved with and deposit 'XX bit year from across also continues. growth, 'XX 'XX carried momentum and of to now that to it's important

it's particularly base years, We're side, in and on -- a of traction, good on good and launched side. the acceptance the of levels in client our newly checking are Libre 'XX. our X% bringing as good very us. middle Both situation on grown well account. having well mass as puts And us seeing Elite those much in summer deposit good the the both very account of and the affluent deposits that retail 'XX We've mass for received, pretty account

the certainly, interest and growth our And with certainly we've margin. So Digital with the customer we've the had implemented momentum on strategy side. deposit are will net driving and First that's the that those us products help

specifics. So the I'll give Maritza you let

Maritza Arizmendi

XXXX, a quarter. the third effect Kelly, we reality We have question. remain mindful we for is looking will that you, next full at are will of the mix, year of Thank that's investment range of the because range that most provided X.XX% extension have in guidance be in XXXX. I the what think between the that cuts the the the X José that Yes. critical how with impact. And But see with that funding and point basis keeping portfolio with range you in effect to think X.X% XXX we We're in have the is your in we probably we mitigate the similar why cost we rates. it that even we're will anticipating I as done, the is is and market, provide full

-- be asset-sensitive slightly to sensitive there, still have very an continue okay? We but impact

Kelly Motta

helpful. That's super

There that. some Next question I expenses. the would kind of have be was on push-pull in

had expenses are potentially come that there, You and retirements administrative even general some saves excluding through and some looks it that, but running early also like higher.

of next market can you're you and in some given you're And you commensurate revenue is of in share, As initiatives how the growth the use continue outlook, capture to to terms year, expense maybe that look higher, what ahead the run reinvest to share if is thinking your works that, if you with managing and business? growth. it of you NII wondering your might

José Fernández

and deploy get vision to started we've technology, by let Digital XXXX, long in execution And has X how and and in First on First me give XXXX good in view invest we've That do you of market. components. it Digital how our going. just One just do And how Yes, kind driven expenses, Understood. my here in way. gone our technology overall we on it's we a people and back so executed is the our processes point. in

some level XXXX a has give year-over-year XXXX. From here, bank you on It's from context. to in transactions the doubled XXXX the XXXX, in Just too, perspective to basis. to doubled of

in that in Now the that accomplishment really behind made has of all not totally digital account at in the at of transactions. time branches basis investments portal, services versus same transactions self-service can banking terms virtual is with we it's bank the online the monthly at years period, market by we've with same reduced the through operate, mobile. And a several driven a the on by digital with the the the the amounts themselves clients states. XXX,XXX the in with serve the And and been the done that kiosks market opening, time where with adoptions that that tellers small in and is

been growth the some given side. gotten on able branch to So from we've side, plus we've the on we've branches, particularly efficiencies teller the had reduce the workforce the the of

of in seen And that we customer those efficiencies some been to We've more also seen there transactional growth, years, seen, also spite on see in back we've our we've office. we've X and efficiencies more see growth how able the that efficient we've been there.

being we processes. got investing and to the that that We can't in forward our of moving stop Now is highlight all we the here. and said to to and keep also point got people keep in technology our

we grow how really confident the where we're momentum building really, And from next investments we're our So and when million $XX a quarter, in is into into into are takes around we technology account: look creating growth, today. expenses deploying strategy model in everything range is that and to we and million us business efficiencies, how that great now for to people. year, are further this $XX grow and

Kelly Motta

last was the build would and had. from I reserve then back question be very, That me on very will helpful. step you Maybe

think in U.S. in as you loans a auto credit being the prepared as but you have to specific your to described as delinquencies. reserve did qualitative were that related I the build well stable, those commercial out called related release, remarks,

update take an talk and those how overall Puerto you feeling both that as on decision as what seeing loans your well a on Rico, on just in you're and environment Can asset credit commercial bit you're about in quality? to the reserve

José Fernández

Yes.

from solid, sector. businesses in remarks, picture, any seeing on remains a the loans said I'll X the steady. the made industries. Puerto good a U.S. picture, in Across But in investments as on entire Cesar being color in on, and the different Rico the optimism of lot the construction island I business different going big big there's of economy lot and island, a We're Ortiz specifics some So my let you more and give across and credit across to the there's

seeing anything that perspective. macro we're from changed So a not has

years see having to will to had continue prior so economic liquidity background. than not be good We where to stronger consumers we the

sheet well well. on on overall a balance the seeing performing economy the individuals we're is and businesses, the stronger as So as

some background, of the that's Rico Puerto let the So on and you credit consumer side. I'll color kind the on and Kelly, Cesar particularly give

Cesar Ortiz-Marcano

the Besides year want to quarter the improvement, first because that next also especially first an in situation Rico, things show comfort for better we things has levels. be one is largest you. delinquency, too, I year, as slightly now, an that us the of seasonal will seasonal we delinquencies should the as retail period is the we December, an that increasing it's portfolio. have It's a XX%, of year levels The auto X point this same next auto seeing gives is We macroeconomics, Thank quarter. and portfolio. last right? seen towards discussed seeing have every and pre portfolio, the good since Puerto improvement the XX% the And macroeconomic than quarter. But pandemic increase quarter out increasing in nonperforming we're for this been additional We've which seasonal. holiday see in trend key been outlook, every nonperforming the also a portfolio is in

So of the retail a of the in things us outlook those good X performance portfolio. terms gives

that I want you was challenges operational question unique each are specific these out the challenges. other X The for reserves point in have we that loans this quarter has to the the in borrower recorded specific U.S.

them productively made us these this that reserves ensure the unique to mitigated, continue to be the that which risks for working record continues are but We engaging those noted them, quarter, with with have borrowers. situations we

Operator

next question Hovde from Ynyra our Group. take will And we with Bohan

Ynyra Bohan

quite going to has your with question tax first a forward. reduction. my was rate do There And

going guys next year? should guidance the quarter you on and what expect have any do next we into So

José Fernández

give Maritza you... let I'll Yes.

Maritza Arizmendi

mentioned Yes, my about business which with was as when because activity XXXX, preferential this were compared had -- activity higher was XX% ETR remarks, XXXX I in with to XX% rate. full prepared we tax

benefiting continue a Going see forecasting operations XX% forward, our we're XXXX. ETR from and we those why of to that's activity, type for

Ynyra Bohan

income, -- going with seem uptick the uptick run Do your there was noninterest continue as And this we be an forward? activities. the rate with in banking mortgage

Maritza Arizmendi

on the will this this -- both impacted In valuation. MSR quarter well in did as the $X.X last valuation. we quarter, in quarter positive the extract It this a can differently without million. Well, the about that that, were be quarter about that for quarter MSR was impact the the have we market rates. rate We X third if expect million. one, But is the it depend for we run have to $X.X fourth this

José Fernández

On income. non-interest

Maritza Arizmendi

Particularly third my basis. I the mortgage this prepared did banking we in we effect quarter, on that as the the will fourth I'm that referring about more million side, in $X have of a quarter. full acquired banking the That's mortgage have we MSR comment of on the to Because activity. remarks, the acquisition quarterly

Ynyra Bohan

That my was Perfect. questions. all

Operator

from Fargo. And we Braziler Wells with question will our Timur take next

Timur Braziler

linked the at quarter from what demand component public funds? deposits, of was reduction Looking that in

Maritza Arizmendi

million. It's million, around about $XXX $XXX

Timur Braziler

you're level then I the what kind just in what there's guess of that trend any what deposit Okay. If the and And liquidity, generally from consumer base fourth seeing looks you're from island. quarter like? the broadly of on seeing the seasonality

José Fernández

XXXX, a slow and in savings from Yes. to we're net all methodical deposits It's back to a happen vantage growth seeing CDs what inflow. our and is kind seeing throughout We're believe. what businesses. I But of From point, see of shift demand. a consumer we're starting our commercial steady throughout and inflow a to is going

Timur Braziler

that's if down to then just competitive low to declines how they're ability from Great. further expectations throughout I costs so even just begin on maybe from guess funds, a though and public for work standpoint, there's with deposit trending standpoint, the there And a 'XX?

José Fernández

funds, also. public remember, rates they're the go on so rates if they'll trend downwards variable Well, down,

market, trying credit done rational is higher-yielding terms deposits pricing. definitely deposits definitely But have, Puerto very to well a as disrupt, introduced credit is unions some and On the they're that of to we franchise the we have factor. But core are we bringing are Rico, say feel degree, OFG, the consumer stable our our and I with in Puerto unions would mentioned a products banking commercial, we customers sticky do federal market the recently, that don't have accounts. very in on consumer, well bank, that at they I that developed X that forget as very there in And earlier in well. and very very as growing strong retail that as we do a with have Rico

Timur Braziler

U.S. then loans. a just similar spread great. Are those geography on a of Okay, somewhat? credit follow-ups couple is commercial all that for in And out or

José Fernández

strategy nationwide, diversification, U.S. is our so it's strategy geographic a Remember, a diversification more of No. industry-wide.

not the would these So all say, And to a States. commercial are them we I of all across are loans C&I specific United geography. are mostly,

Timur Braziler

we through books? auto be 'XX, then like get reserve to and the ability at some X there auto the reserve is the seeing off on understand, start as about until I you level loans. increase to table Is straight the I we consumer [ some point for at today X.XX% plateauing book really go How I the guess, that a Or release? for high thinking of calibration going quarters. a reserves that to And an now mean, number. addition level to the reserves of seems ] are

José Fernández

my to I'll think economy a high specifics. let kind more in economy. give is of the a type mind, In depression X shifting of Maritza stimuli, the decades Rico from I Yes. sugar of cyclical Puerto you to

that's from vantage So our the at how looking we're world point.

to perspective. from we you cognizant also And exposures, of give Puerto Rico Maritza the into more seeing Going macro when our see a sure in we trying doing Rico starting economy the economy good that behavior. we're just let having seeing cyclical at in changes also doing forward, specifics fine. this. those we're are all. the a look the growth make and I'll entering to -- But Puerto economy the we're normal We're on credit we're

Maritza Arizmendi

Yes.

economy. a the view having on and good economy same sharing and stable I think

we a to operations. rate I when forward, $XX of million allowance $XX point. good business about normal see at level think this have we And million our coverage as reached look of a we run mostly

If at this you the million. volume look was factor $XX quarter,

So be we coverage of that right going with benchmark our forward remain the have same that would and level now.

José Fernández

remain million to $XX around a and provision $XX equal. things quarter all million So assuming

the kind Timur. outlook of here, that's So

Operator

take And Bader from next Piper question our Hijleh with we will Sandler.

Bader Hijleh

just I on income some missed run income XXXX? it, mortgage want you I the to an color rate touch to might fee know And the for segment. banking have you about us also fee talked have other happen a again. Could heading give or components? more outlook I on but into do you maybe

José Fernández

existing but a customers wealth to We're particularly we also good let loan well the up on the only brokerage Yes, with also clients. not customers. for doing We're seeing only our management, deposit we're the here. to a from it so putting at and bringing seeing momentum, management, me we're and we're and side when good big in that as of deposit to on help someone, give on We our side auto to look work clients see speak. -- very very focusing looking deepening and the both the from new a with on that we're brokerage brokerage you from deposits seeing in we by services particularly very it the And on the we brokerage internally. do wealth insurance, deepening our the to and growth clients deposit, good seeing the picture question good a small the wealth but strategies relationships side. customers business on the earlier We're opportunity mortgage management, financial relationships us, seeing will the deepen see opportunity relationships of not side. And momentum

So doing back is now Wealth question. management going your income fee to well.

I of think as there. management is good part contributing. we wealth opportunities have also Insurance

look banking, think think I need we're since billion. now Durbin about at we to $XX.X you when banking,

the the on second of we Durbin. growing last -- growing of mitigate able we acquisition portfolio effect by well the year, transactions Maritza customers impact in our that, the generate. by half to servicing mentioned have the the earlier been spite and and the that banking clients, and our as that last had services we somewhat debit transactionality of of But of the the as So fees income

the team I Durbin. on job know, interest it has as MSR and we've on interest good And given then mortgage So banking, at the more very that rates mitigating a think fluctuated, fluctuates, have the impacts done seen how the volatility on you rates. evaluation

So you're that's volatility grow in very we're why more the MSR. income. But steadily to seeing about the excited our us to on for fee all, ability continue all

Bader Hijleh

Understood. regards -- segment? you originations, to ask to to books And at, the on loan if maybe I and are then coming do may new the happen what have rates possible, if by

José Fernández

lower cuts, seeing rate, I'm fixed lower, slightly was points fixed impact variable rates rate assuming that in auto in a coming commercial So we're more at around same We're XX seeing an consumer see than additional business than -- the the but X slightly and will in business rates. levels sorry, spite of potential there. more we basis coming interest have lower

to much. lower interest books not why at portfolios. margin loan net in that So seeing all, behavior, slightly we We That's the X.XX% that side, the the Maritza reaffirms yields see quite a X.XX%. particularly consumer the bit on on we're on all but of trending feel inelastic

Bader Hijleh

any there administration to down or one Got And disbursements would that? last the any what regards in slow you're to new it. maybe hearing concern that the federal question. island Is

José Fernández

Yes.

that would more Puerto we've were obligated. XX% Rico, funds to been more the than initially look, allocated I had, than have So XX% of say,

and deployed they as been about continue to So they in should or have obligated. come start started on be to will the have projects that

lot So to a federal of there's and a there that projects, I backlogs go government. in the think through are need of in lot steps

of in So terms it's or X had invested in have of the you're rate infrastructure. when a and when X the different starting versus years getting in deployed you general, funds run situation

ago. So yes, be But no as X been -- could is always a could risk X or there's risk, years it it. the significant have major there's as potentially doubt as it think about I don't or

Bader Hijleh

my Awesome. That's questions. all

Operator

KBW. [Operator next from Instructions] And Kelly with we will Motta question our take

Kelly Motta

My question is on capital. specifically

on how the additional you bit could was I come as left call, allocation Wondering were rank mentioned that capital us if you're have It behind have and you buyback. give an a if maybe is a viewing the capital you think quarter. to bit strong see through you on a X buyback, a on as had well you that that the nice consideration, profitability. given last refresh stacking the and really

José Fernández

of capital balance Yes, fortress sheet nothing so capital, with having a good Kelly. better with tremendous we amounts operate to than love

deploy excess we buybacks. capital, good in opportunities, money U.S. We're we We're do put at see do going going have? going the look to Puerto our in for some where We deploy here the we're to Rico loans, also opportunities look rational and first which So at to to work dividend. to and the us it know we in

what general. You saw we last year in did quarter, last

the had primarily very well loan buyback we up deploying think for see seeing We're a as execution us. as for solid executed capital the relatively being And growth. same. I going XXXX buyback I dividends and

did last on same, the on game try we the the we'll plan the be of So at year. buyback catch-up the the and is to as year not end

general, we'll that's that So in more one. it, Kelly. see on how be methodical But we

Kelly Motta

easier, about Puerto potential But if that, new helpful. Rico super then That's to point opportunities administration point. making to consolidated the very with acquisitions there's also at I touch like Obviously, vantage wondering U.S. in your potentially M&A. the on would Great. this expand on And is obviously

José Fernández

one U.S. it's some our our well in right really have U.S., to and banks, feel now. than somewhat is served is of good banking side, more Puerto We the that and adding X,XXX U.S. strategy our the our strategy in we from in strategy Rico. not peers more, a here different follow particularly by from system the Well,

to front terms on way regulatory think be, of for So M&A really focus that hard we be on kind will participation is program that's given think continue don't talk think use and organically Puerto our Rico, you And really an the growing looking think regulatory. focus. the we're be going the here do and to approach to on execute there's continue I Rico we strategy billion executing I of where the loan the from given now, Puerto of And M&A our $XX have from side and has much on I about. now is as OFG basis. But in perspective, I And on think it. From in day-to-day our certainly the on where share a mentioned in changes and and there positioned is that there's the think longer to I at Rico. on gaining of term, much not going you M&A. strategy, diversification that to Puerto that's us to change right commercial mark. know, a market as I past to regulatory. focusing our tend But

new So impacted is being that regulatory looking the with new how forward is the administration coming in. to see and that regime

are those So general, in my on thoughts Kelly. the M&A

Operator

closing time, this remarks. at questions. are turn will to And I over further call José back no there now for the

José Fernández

stakeholders team Have our day. all operator. Thanks thanks to in. again great to who you, our listened have members, a all Thank and

Operator

This for today's does presentation. participation. conclude your you Thank

You may any at disconnect time.

OFG Bancorp (OFG) 22 Jan 252024 Q4 Earnings call transcript