OFG Bancorp reports $132.8M in 4Q20 revenue
OFG Bancorp, the financial holding company of San Juan-based Oriental Bank, reported results for the fourth quarter and year ended Dec. 31, 2020, revealing $132.8 million and $519.3 million in revenue, respectively.
While the result for the final three month period of last year showed a 35% increase from the versus $98.4 million reported during the same quarter in 2019, the total year result of $396.2 million in revenue reflected 31% growth over 2019.
“We had another quarter of strong performance in our core businesses, reflecting our larger scale, solid levels of new loan production, lower cost of funds, higher non-interest income, and reduced expenses,” said Oriental CEO José Rafael Fernández.
During the fourth quarter of 2020, the financial institution’s diluted earnings per share (EPS) was $0.42 compared to a loss of $0.05 in the same period in 2019. Results reflected pre-tax merger and restructuring charges of $10.1 million compared to $21.5 million during the same year-ago quarter.
Oriental completed the integration of the Scotiabank acquisition and related cost-savings during the last quarter of 2020.
“It’s important to note that this [result] included three major items: $6.4 million in merger and restructuring charges on our Scotiabank systems conversion and integration; $3.7 million in merger and restructuring charges for branch consolidation in 2021; and $1.5 million in COVID related spending,” Fernández said during a call with analysts to review the results.
“On a macro-basis, we’re benefitting from the improved economic environment in Puerto Rico and the U.S. Virgin Islands due to the continuing nascent rebound from the easing of COVID-19 restrictions and from pandemic-related stimulus,” he said.
For the full 2020, Oriental reported diluted EPS of $1.32 compared to $0.92 in 2019. New loan production was $1.7 billion compared to $1.3 billion in 2019. Net interest margin was 4.55% compared to 5.37%. The effective tax rate was 21.6% compared to 28.5%, the bank confirmed.
Looking ahead, Fernández said, “Our agenda for 2021 is clear — advance our strategic plan to further grow and improve performance in all operating areas.”
“Our outlook is more optimistic than last quarter. We still face challenges from COVID, high unemployment levels, and largely ineffective government operations, to name just a few. But we believe the economy is starting to move in the right direction and the future looks brighter,” he added during the earnings call.
“With a new administration in Washington, Puerto Rico is on the cusp of receiving significant amounts of approved balance sheet reconstruction and stimulus funds for several years to come,” Fernández predicted.
“Key areas that should benefit from the influx of federal funds are the production and distribution of resilient and diversified electricity, improved infrastructure, telecommunication, and government efficiency,” he added.