Oriental Financial Group reported Monday income available to common shareholders amounted to $16.6 million, or $0.35 per share diluted for the fourth quarter of 2013.
In the corresponding year ago period, OFG lost $23.3 million, or ($0.53) per share. This included $22.9 million in net costs for deleveraging its investment securities portfolio in relation to the acquisition of BBVA’s Puerto Rico operations in late 2012.
With its 4Q13 performance, full year 2013 income available to common shareholders totaled $84.6 million, or $1.73 per share diluted, exceeding OFG’s guidance of $1.55 per share on a GAAP basis. In 2012, OFG earned $14.6 million, or $0.35 per diluted share. This included $12.9 million in net costs for deleveraging, the financial said.
“2013 results reflect the integration of BBVA PR, with the successful conversion of technology platforms and consolidation of other resources,” the bank said.
“2013 was a stellar year for our Oriental banking, wealth management and insurance franchise in Puerto Rico, as we realized the benefits of our acquisition of BBVA PR,” said OFG President José Rafael Fernández. “Operating income increased 190 percent, to $176.5 million, and despite new, locally legislated tax increases, we generated earnings per share of $1.73, well in excess of our $1.55 guidance.
“As envisioned, the acquisition has enhanced our capabilities significantly. We now have sophisticated corporate treasury services, scalable transactional banking, and a leading auto lending platform,” he said. “We also have the ability to bring to market innovative product ‘firsts’ to Puerto Rico, such as Cuenta Libre (Freedom Account), which reimburses our customers for using ATMs outside of our network, and Foto Deposito, for depositing checks from their mobile devices.
At it stands, the bank’s book value stood at $15.74 per common share as of Dec. 31, 2013, having more than recovered from pre-acquisition levels of $15.40 at Sept. 30, 2012.
Meanwhile, Puerto Rico government related loan and investment security contractual balances (excluding municipalities) fell 17.4 percent in line with scheduled maturities, to $631.6 million at Dec. 31, 2013, from $764.8 million at Sept. 30, 2013. The decline in OFG’s balance of government related loans and investment securities was in line with contractual maturities of $142.5 million, the bank said.
For the full year 2013, the bank’s net interest income grew 160.5 percent, to $409.7 million from $157.3 million, as OFG transformed its revenue profile, with investment securities producing only 10.1 percent of interest income in 2013 versus 36.6 percent in 2012.
“Our capital levels are strong at close to $900 million. We have considerable liquidity with more than $760 million of cash on hand. And more than half of our loan balances have assigned credit marks as part of purchase accounting,” Fernández said.
As for what’s ahead, Fernández said “with core operating results for the fourth quarter and 2013 much stronger than in the year earlier periods, OFG ended 2013 as a top performing financial institution.”
“We have approached Puerto Rico’s challenging economic conditions, which have prevailed since 2006, in a rational and disciplined manner. We are confident that we will continue to be successful in further optimizing our businesses for profitability and capital generation.
“Looking ahead, we believe our 2013 fourth quarter core operating run rate is indicative of what our performance should be over the next few quarters. In 2015, when the non-cash charge off of FDIC indemnification asset amortization ends, OFG’s GAAP earnings should significantly expand,” he added.