OFG Bancorp reports $127.7M in 1Q21 revenue, benefits on loan originations
OFG Bancorp, the financial holding company for Oriental Bank, reported results for the first quarter ended March 31, 2021, which reflected $127.7 million in revenue, a slight drop when compared to $132.8 million reported for the fourth quarter of 2020.
The financial institution explained that the last quarter of 2020 benefited from $3.9 million in seasonal annual insurance commissions, $2 million in mortgage sales held back from the third quarter in 2020, and $3.1 million interest income from acquired loan pre-payments.
Furthermore, the first quarter’s results included $1.6 million in interest income from unamortized yield from approximately $92 million of forgiven Paycheck Protection Program loans and benefitted from $1.4 million lower cost of deposits.
Earnings per share diluted was $0.56 compared to $0.42 in the fourth quarter of 2020 and $0.00 in the first quarter of 2020, which was the first quarter to be impacted by the COVID-19 pandemic.
OFG Bancorp CEO José Rafael-Fernández, said: “First quarter results reflected strong core performance based on the continued success of our strategies focusing on agility and service. Our results also reflected the federal stimulus, increased liquidity, and an improving Puerto Rico economy as more people get vaccinated.”
“We benefitted from strong new loan generation and deposit growth, significantly reduced cost of funds, a more efficient operating structure, and the release of some COVID-related loan reserves,” he added.
OFG Bancorp’s new loan originations totaled $527.6 million ($401.4 million excluding PPP) for the first quarter, compared to $485.3 million in the fourth quarter of 2020 and $280.8 million in the first quarter of 2020.
In addition to PPP loans, the first quarter of this year was driven year-over-year by increases in mortgage, auto, and commercial lending. Net loans were $6.43 billion at Mar. 31, 2021, compared to $6.5 billion at Dec. 31, 2020 and $6.54 billion at Mar. 31, 2020, the bank stated.
During a conference call to discuss results, Fernández said that while Puerto Rico “is not out of the woods yet, the island is in a far better place today than we were last year. And our outlook is much better than the previous almost two decades.”
He said the company is optimistic about the flow of federal stimulus and reconstruction funds, the increased liquidity for individuals and small and medium size businesses, people getting their COVID-19 vaccination and the resolution to the Commonwealth’s bankruptcy.
“All this resulted in the overall improvement of Puerto Rico’s economy,” he said.