OFG Bancorp reported Tuesday results for the fourth quarter, reflecting an increase in net income available to shareholders to $12.1 million, or $0.27 per share fully diluted, from $11.7 million, or $0.26 per share fully diluted, in the third quarter and a loss of $4.4 million, or ($0.10) per share, in the same year-ago quarter.
Compared to the third quarter of 2016, the results included increases of 13.8 percent in net interest income after provision and 11.7 percent in banking and wealth management revenues, while non-interest expenses fell 4.6 percent.
“OFG Bancorp generated another quarter of consistent, stellar performance in the fourth quarter and throughout 2016 despite the challenging operating environment,” said Oriental CEO José Rafael Fernández.
The Oriental Bank franchise continued to deliver strong performance with loan production of $258 million, the highest quarterly level during 2016; a 3.9 percent year-over-year increase in customer deposits; and a 5 percent annual account growth.
Credit quality remained strong as the non-performing loan rate at 3.46 percent fell to its lowest level in five quarters, and early and total delinquency rates declined from third quarter 2016 and fourth quarter 2015 to 3.31 percent and 6.49 percent, respectively.
Meanwhile, for the year, Oriental reported net income available to shareholders of $45.3 million, or $1.03 per share fully diluted, compared to a loss of $16.4 million, or ($0.37) per share, in 2015.
“Fully diluted EPS grew to $0.27 in the fourth quarter of 2016 and to $1.03 for the year, a notable turnaround from prior periods. We accomplished this by growing interest income from originated loans and non-interest income, while reducing both interest and non-interest expenses,” he said.
The year’s results reflected an 8.4 percent increase in interest income from originated loans to $199.2 million as average balances expanded to $3.1 billion or a 5.4 percent increase, due to growth in higher yielding retail loans. It also reflected a 17.4 percent decrease in total interest expense to $57.2 million on a 32.0 percent decline in average borrowings.
The results showed that the sale of Oriental Bank’s last major Puerto Rico government related loan, a participation in a Puerto Rico Electric Power Authority line of credit, eliminated $183 million of non-performing assets and required an additional provision of $2.9 million.
Fernández noted that the bank has attracted a “steady influx of new business, enabling us to expand or maintain our market share in key areas. In 2016, we introduced the Oriental Biz mobile app, adding mobile check capture for small business customers, and cardless cash, for making retail ATM withdrawals even faster.”