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José Rafael Fernández, CEO of OFG Bancorp, attributed the positive results to a 9.4% year-over-year (YoY) increase in diluted EPS, driven by the company’s robust performance across all business segments. “Our Digital First strategy continues to drive customer acquisition and engagement,” Fernández stated, highlighting the company’s successful alignment with its strategic plans.
Despite the earnings beat, OFG Bancorp’s stock remained unchanged following the announcement. The stability in share price suggests a neutral market reaction, as the movement was neither above the 2% threshold that typically indicates a significant positive or negative response, nor was it below this threshold to suggest a minor impact.
The first quarter saw a net interest margin of 5.40% and a return on average assets of 1.77%. The company also reported a net interest income of $183.4 million, up from $149.0 million in the same quarter last year, reflecting higher average balances and yields on investment securities, cash, and loans. However, total interest expense increased to $39.3 million from $13.1 million YoY, due to higher core deposit average balances and costs.
Fernández praised the team’s efforts in supporting customers and communities, stating, “Puerto Rico business activity and consumer liquidity looks good. Our balance sheet is well-positioned for a higher for longer interest rate environment.”
OFG Bancorp’s credit quality improved, with the nonperforming loan rate reaching the lowest over the last five quarters at 1.10%. The company also experienced a year-over-year loan growth of 10.0%, with loans held for investment at the end of the period totaling $7.54 billion.
The company’s effective tax rate for the quarter was 26.8%, reflecting an expected 2024 rate of 29.0% due to increased business activities with preferential tax treatment under the Puerto Rico tax code, coupled with a discrete benefit for stock vested in the first quarter.
OFG Bancorp, now in its 60th year of business, continues to offer a wide range of retail and commercial banking, lending, and wealth management products and services in Puerto Rico and the U.S. Virgin Islands.
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