OFG Bancorp reports $174M in core revenues in 1Q
CEO José Rafael Fernández reported a 3% increase in Oriental Bank’s customer base, attributing the growth to a variety of strategies.
OFG Bancorp, the financial holding company for Oriental Bank, reported results for the first quarter ended March 31, 2024, reflecting total core revenues of $174.2 million, compared to $164.4 million in the year-ago quarter and $175.6 million in the fourth quarter of 2023.
The financial institution also reported diluted earnings per share (EPS) of $1.05 for the most recent quarter, compared to $0.96 in the first quarter of 2023 and $0.98 in the fourth quarter of 2023.
“First quarter EPS diluted increased 9.4% year-over-year on a 5.9% increase in total core revenues, reflecting an overall solid performance across all businesses in line with our plans,” said OFG CEO José Rafael Fernández.
“Our Digital First strategy continues to drive customer acquisition and engagement. Puerto Rico business activity and consumer liquidity looks good,” he said. “Our balance sheet is well-positioned for a ‘higher for longer’ interest rate environment.”
In a call with local reporters, Fernández confirmed that due to various strategies, its customer base increased by 3% year over year.
“This means that we’ve increased our new clients, we’ve retained more existing clients and we have deepened the relationships with those clients. All of that is what keeps our profits up, and our investment in technology is what’s moving the needle,” he said.
As for the adoption of the ATH Móvil service, the banker said about 85% of its total customer base is using it since its launch in July 2023.
“Along with that adoption, we saw a growth in our ‘People Pay’ service, through which our clients can send money to people in the U.S., which our new ATH Móvil customers also began using,” said Fernández.
The financial institution reported total interest income of $183.4 million, compared to $176.2 million in the fourth quarter of 2023 and $149 million in the first quarter of 2023.
“Compared to the fourth quarter of 2023, the first quarter of 2024 primarily reflected higher average balances and yields on investment securities, cash and loans. The first quarter of 2024 included one fewer day than the fourth quarter of 2023, which reduced interest income by about $1.4 million,” the bank stated in its report.
During the most recent quarter, the financial institution reported total interest expense of $39.3 million, compared to $32.7 million in the fourth quarter of 2023 and $13.1 million in the first quarter of 2023. Compared to the previous quarter, first quarter of 2024 core deposit average balances increased 10%, and the cost increased 40 basis points, reflecting the full effect of the $1.2 billion in government funds deposited late in the fourth quarter of 2023.
The bank reported new loan production of $536.6 million, compared to $663.9 million in the fourth quarter of 2023 and $561.3 million in the first quarter of 2023. Production in the first quarter reflected increased auto and consumer lending and lower commercial and residential mortgage lending, the bank stated.
Customer deposits reached $9.5 billion during the first quarter of 2024, compared to $9.6 billion in the fourth quarter of 2023 and $8.57 billion in the first quarter of 2023.
