Oriental records $16.2M profit in 3Q13
Puerto Rico’s economic conditions continue to be challenging, as they have been for the last few years, OFG Bancorp President José Rafael Fernández said. (Credit: © Mauricio Pascual)
OFG Bancorp reported Monday its results for the third quarter ended Sept. 30, which showed income available to common shareholders of $16.2 million, up 10 percent from the $14.7 million reported in the same year-ago quarter.
However, the current result represents a steep drop from the $34.1 million, reported for the second quarter of this year, which included a net positive impact of $0.43 per share from a $37 million tax benefit due to an increase in deferred tax assets, and a $21 million increase in loan loss provision due to reclassification of non-performing loans to held-for-sale, the bank said.
For the nine months ended Sept. 30, income increased to $68 million, compared to $37.9 million in the year-ago period.
“We are pleased to report that we continued to produce strong core results in the third quarter,” said OFG Bancorp President José Rafael Fernández. “Growing recognition of our solid track record for consistent, quality service in retail and commercial banking and financial services is resulting in our gaining an important and strong market position in Puerto Rico.
“During the quarter, we saw high levels of loan income and production, along with continued strength in retail deposits and fee business. Our NIM is among the best in the industry, and we significantly enhanced credit quality, selling virtually all non-performing residential mortgage loans originated prior to 2010,” he said.
Loan production increased $222.5 million from the preceding quarter, to a record $549.5 million. Production of government, commercial and institutional loans was $263.1 million higher than the preceding quarter, while production of residential mortgage loans declined $40.6 million in line with overall market conditions. Production of auto and consumer loans remained stable.
Meanwhile, net loans covered under loss share agreements with the FDIC continued to pay down, declining $7.8 million from the second quarter of 2013, to $361.6 million. A total of $122 million non-performing residential mortgage loans were sold, consisting of $62 million ($3 million more than anticipated last quarter) originated by Oriental Bank and $60 million acquired from BBVA PR. The blended price was 49.2 percent of unpaid principal balance, in line with previously stated expectations.
“As we announced recently, we completed the conversion of all former BBVA PR businesses to our state-of-the-art technology platform in line with our original integration plan,” Fernández said. “This will enable us to roll out new, technology-enhanced products and services to our current and target customer base, such as the recently introduced ‘Cuenta Libre’ (‘Freedom Account’) for online and mobile customers.”
Merger and restructuring costs related to the BBVA transaction totaled $2.3 million compared to $5.3 million in the preceding quarter. Integration expenses are projected to total approximately $13.1 million in 2013, including $3.7 million for terminating a pending loan servicing agreement.
OFG Bancorp will host a conference call today to discuss results for the third quarter of 2013, as well as it outlook and related matters.
