OFG Bancorp reports core revenue of $682.7M in 2023, $175.6M in 4Q
OFG Bancorp, the parent company of Oriental Bank, reported its results for the fourth quarter and year ended Dec. 31, 2023. Core revenues reached $682.7 million, up from $607.8 million the previous year, with $175.6 million for the quarter compared to $168.3 million in the same quarter of the prior year.
Earnings per share for the fourth quarter of 2023 were 98 cents, diluted, an increase from 97 cents in the fourth quarter of 2022. For the full year, diluted earnings per share were $3.83 compared to $3.44 in 2022.
“2023 was an outstanding year. We’re proud of our accomplishments and thank the entire team for making it possible. We ended 2023 with record levels of loans, customer deposits, assets and stockholders’ equity,” said OFG Bancorp CEO José Rafael Fernández.
For the first time, year-end commercial loan balances surpassed $3 billion, and tangible common equity exceeded $1 billion.
“Our ‘Digital First Strategy’ continues to empower our retail customers to complete 93% of routine transactions through self-service channels. While consumer credit has begun to normalize post-pandemic, consumer liquidity and employment, as well as commercial clients and the economy, continue to be strong in Puerto Rico,” he said.
During a call with reporters, Fernández said the investments in virtual technology and self-service platforms are now bearing fruit, but that Oriental “has not forgotten” the segment of the island’s population that may still want to conduct in-person transactions.
“We’re seeing a major move by customers toward digital channels, but there’s always the branches, where customers can go do business in person. We’re not eliminating this; on the contrary, we’re strengthening the branches,” he said. “But in the long-run, the more technology there is, the simpler the process and the greater agility there is for the customer experience.”
The fourth-quarter results included a $6.3 million pre-tax gain in other noninterest income from the sale of nonperforming Puerto Rico small business loans.
The bank also incurred $3.2 million in severance and lease cancellation costs from early retirement and rightsizing activities, reflected in noninterest compensation and infrastructure expenses.
Oriental reported a $1.2 billion public funds deposit in mid-December, but Fernández refrained from disclosing the agency involved due to regulatory restrictions.
“That client had an excess in liquidity and honored us by depositing it with us,” he said.
Puerto Rico’s economy in an election year
In response to questions from News is my Business, Fernández ventured to predict a strong 2024 for Puerto Rico, coinciding with general elections on the island and presidential elections stateside.
“The main risk we have in politics in Puerto Rico is that we get Donald Trump as president of the United States again. I think you have to be clear about that. He hasn’t necessarily been someone who has been supportive in the past,” he said.
In Puerto Rico, Fernández noted, there are “many good candidates, and more political parties. I believe that at the end of the day, Puerto Rico is in an ideal position from the point of view of the economic situation, and we must ensure that we continue with that growth.”
Federal funding continues to flow into the island and is overseen by the Financial Oversight and Management Board for Puerto Rico, “which instills confidence in the local investor and the external investor to continue investing in Puerto Rico,” he said.
“So, whoever wins the elections or those who win the elections in 2024 have to be well aware of the importance of maintaining and increasing the credibility that we have today, both internally here in Puerto Rico with the private sector and the economic activity that is being seen, but also in Washington and in the United States in general,” Fernández concluded.
