Financial Performance - For the quarter ended September 30, 2022, OFG reported total core revenue growth of 7.2% quarter-over-quarter, with total core revenues reaching $156.8 million compared to $146.3 million in the second quarter of 2022[231]. - Earnings per share diluted increased to $0.87 from $0.84 in the second quarter of 2022 and $0.81 in the third quarter of 2021[232]. - Net interest income was $126.5 million, up from $115.1 million in the second quarter of 2022, with a net interest margin expanding to 5.23% from 4.80%[233]. - Non-interest income was $30.6 million, down from $36.2 million in the second quarter of 2022, impacted by Hurricane Fiona's effect on economic activity[236]. - Total investments grew to $2.04 billion at September 30, 2022, compared to $1.73 billion at June 30, 2022, due to the purchase of $410.0 million in short-term US Treasury securities[244]. - The regular quarterly cash dividend was increased to $0.20 per common share in the third quarter of 2022, up from $0.15 in the second quarter of 2022[220]. - Return on average assets (ROA) improved to 1.65% for the quarter ended September 30, 2022, compared to 1.59% in the prior year[247]. - Total stockholders' equity decreased by 7.0% to $993,867,000 as of September 30, 2022, from $1,069,160,000 a year earlier[248]. Credit Quality - Provision for credit losses was $7.1 million, compared to $6.7 million in the second quarter of 2022, including $8.0 million for higher auto and consumer loan balances[238]. - Provision for credit losses showed a significant increase of 242.5%, amounting to $7,120,000 for the quarter, compared to a recapture of $(4,997,000) in the same quarter of 2021[247]. - Non-performing assets decreased by 6.0% to $121.3 million, representing 1.21% of total assets, down from 1.30% at December 31, 2021[308]. - The allowance coverage ratio to non-performing loans improved to 150.0% as of September 30, 2022, compared to 139.2% at December 31, 2021[309]. - Non-performing loans decreased to $103.438 million, down 7.7% from $112.008 million at December 31, 2021[335]. - The charge-off rate on non-performing loans decreased to 94.21%, down 44.7% from 170.31%[335]. Asset Management - Total assets as of September 30, 2022, amounted to $10.06 billion, reflecting stable asset management[280]. - Total assets increased by 1.6% to $10,058.2 million as of September 30, 2022, compared to $9,899.7 million at December 31, 2021[297]. - The investment portfolio increased by $1.147 billion, or 128.0%, primarily due to purchases of agency mortgage-backed securities and US Treasury securities[290]. - Cash and due from banks decreased by $1.204 billion, reflecting cash used for securities purchases and loan disbursements[292]. - Total assets managed by OFG's trust division and retirement plan administration subsidiary amounted to $3.091 billion, down from $3.759 billion at December 31, 2021[293]. Capital Position - CET1 ratio improved to 13.38% as of September 30, 2022, up from 12.80% at June 30, 2022[246]. - The common equity tier 1 capital ratio decreased to 13.38% from 13.77% year-over-year, while the actual common equity tier 1 capital increased by 3.2% to $995.3 million[345][349]. - The total risk-based capital ratio decreased to 14.63% from 15.52% year-over-year, with total risk-based capital slightly increasing by 0.2% to $1.088 billion[345][349]. - The leverage capital ratio increased to 9.82% from 9.69% year-over-year, exceeding the minimum requirement of 4%[346][349]. - The market capitalization at the end of the period decreased by 9.3% to $1.195 billion from $1.318 billion[345]. Operational Efficiency - Total non-interest expenses increased by 10.9% to $87.5 million from $78.9 million, driven by higher information technology and employee compensation expenses[268]. - The efficiency ratio improved to 55.80% from 58.59% year-over-year, indicating better cost management[268]. - Average loans per employee increased to $2,981, up from $2,872 in the previous year, reflecting growth in the loan portfolio[268]. - Compensation and employee benefits increased by $5.5 million, driven by higher minimum wages and annual salaries[273]. Market Conditions - The Federal Reserve increased the federal funds rate six times in 2022, with the current target rate range at 3.75% to 4.00%[222]. - The Puerto Rico Economic Activity Index has been increasing for over a year, indicating a stable upward trend in the economy[223].

OFG Bancorp (NYSE:OFG) Q3 2022 Earnings Conference Call October 20, 2022 10:00 AM ET Company Participants Jose Fernandez - Chief Executive Officer & Vice Chairman Maritza Arizmendi - Chief Financial Officer Conference Call Participants Alex Twerdahl - Piper Sandler Kelly Motta - KBW Brett Rabatin - Hovde Group Timur Braziler - Wells Fargo Securities Operator [Call starts abruplty] Higher yield. This accounted for 43% of the increase in net interest income. Two, the increase in higher-yielding investment sec ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission File Number: 001-12647 OFG Bancorp (Exact Name of registrant as specified in its charter) Commonwealth of Puerto Ri ...

OFG Bancorp (NYSE:OFG) Q2 2022 Earnings Conference Call July 21, 2022 10:00 AM ET Company Participants Jose Fernandez - CEO & Vice Chair Maritza Arizmendi - CFO Conference Call Participants Brett Rabatin - Hovde Group Timur Braziler - Wells Fargo Alex Twerdahl - Piper Sandler Kelly Motta - KBW Operator Good morning. Thank you for joining the OFG Bancorp's Conference Call. My name is Katie and I will be your conference operator today. Our speakers are Jose Rafael Fernandez, Chief Executive Officer, and Vice ...

Quarterly Results 2Q22 Conference Call July 21, 2022 Forward Looking Statements The information included in this document contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and involve certain risks and uncertainties that may cause actual results to differ materially from those expressed in the forward-looking statements. Factors that might cause such a difference include but ...

PART I – FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for OFG Bancorp for the quarterly period ended March 31, 2022, including the Statements of Financial Condition, Operations, Comprehensive Income, Changes in Stockholders' Equity, and Cash Flows, along with 23 detailed notes [Unaudited Consolidated Statements of Financial Condition](index=3&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Financial%20Condition) As of March 31, 2022, OFG Bancorp's total assets increased to $10.19 billion from $9.90 billion at year-end 2021, driven by growth in total loans to $6.45 billion and a significant rise in investment securities, while total deposits also grew to $8.98 billion and total stockholders' equity slightly decreased to $1.04 billion Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$10,190,120** | **$9,899,720** | | Total Investments | $1,258,718 | $895,818 | | Total Loans, net | $6,449,130 | $6,329,311 | | **Total Liabilities** | **$9,150,085** | **$8,830,560** | | Total Deposits | $8,978,222 | $8,603,118 | | **Total Stockholders' Equity** | **$1,040,035** | **$1,069,160** | [Unaudited Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Operations) For the first quarter of 2022, OFG Bancorp reported a net income of $37.5 million, a 23.5% increase from $30.4 million in the same period of 2021, driven by a 7.1% rise in net interest income to $105.2 million and a significant 75.5% decrease in the provision for credit losses, with diluted earnings per share increasing to $0.76 from $0.56 year-over-year Quarterly Operating Results (in thousands, except per share data) | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Net Interest Income | $105,194 | $98,198 | | Provision for Credit Losses | $1,551 | $6,324 | | Total Non-interest Income | $31,606 | $30,413 | | Total Non-interest Expense | $81,155 | $77,666 | | **Net Income** | **$37,521** | **$30,373** | | **Diluted EPS** | **$0.76** | **$0.56** | [Notes to Unaudited Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Financial%20Statements) The notes provide detailed disclosures on significant accounting policies, the composition of assets and liabilities, and other financial matters, including investment securities, loan portfolios, allowance for credit losses, regulatory capital, and segment reporting, noting no material impact from new accounting standards - OFG is a financial holding company operating primarily in Puerto Rico, providing a wide range of banking and financial services through subsidiaries like Oriental Bank, Oriental Financial Services, and Oriental Insurance[35](index=35&type=chunk) - The loan portfolio is composed of four main segments: commercial, mortgage, consumer, and auto loans and leases, with a total amortized cost basis of loans held for investment of **$6.55 billion** as of March 31, 2022[55](index=55&type=chunk) - The allowance for credit losses (ACL) increased slightly to **$157.1 million** as of March 31, 2022, from **$155.9 million** at year-end 2021, with a provision for the quarter of **$1.55 million** reflecting loan growth and a specific commercial loan provision, offset by improved economic outlook[94](index=94&type=chunk)[95](index=95&type=chunk) - Total deposits grew to **$8.98 billion**, primarily driven by increases in non-interest-bearing demand deposits and savings accounts, with public fund deposits from Puerto Rico government entities amounting to **$248.3 million**[114](index=114&type=chunk)[116](index=116&type=chunk) - During Q1 2022, OFG redeemed all of its outstanding **$36.1 million** in subordinated capital notes, resulting in a write-off of **$405 thousand** in unamortized issuance costs[125](index=125&type=chunk) - In January 2022, the Board approved a new **$100 million** stock repurchase program, under which OFG repurchased **1.22 million shares** for **$33.5 million** in Q1 2022[138](index=138&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=59&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the strong performance in Q1 2022, characterized by solid loan and deposit growth, net interest margin expansion, and a lower provision for credit losses, covering recent capital actions, the economic environment, and detailed results of operations by segment, changes in financial condition, credit risk management, and capital adequacy [Financial Highlights](index=60&type=section&id=Financial%20Highlights) Q1 2022 demonstrated strong core business momentum with diluted EPS of $0.76, core revenues of $136.4 million, net interest income growth to $105.2 million with an expanded NIM of 4.47%, increased loan and deposit balances, improved credit quality, and $33.5 million in common stock repurchases Q1 2022 Key Performance Indicators | Metric | Q1 2022 | Q4 2021 | Q1 2021 | | :--- | :--- | :--- | :--- | | Diluted EPS | $0.76 | $0.66 | $0.56 | | Net Interest Income ($M) | $105.2 | $104.2 | $98.2 | | Net Interest Margin (NIM) | 4.47% | 4.18% | 4.26% | | Provision for Credit Losses ($M) | $1.6 | $7.2 | $6.3 | | Loans Held for Investment ($B) | $6.55 | $6.40 | $6.59 | | CET1 Ratio | 13.24% | 13.77% | 13.56% | - The company repurchased **$33.5 million** of common stock as part of its new **$100 million** buyback program[216](index=216&type=chunk) [Analysis of Results of Operations](index=63&type=section&id=Analysis%20of%20Results%20of%20Operations) Net interest income increased by $7.0 million year-over-year to $105.2 million due to reduced interest-bearing liability costs, while non-interest income grew 3.9% to $31.6 million from higher banking service and wealth management revenues, and non-interest expense rose 4.5% to $81.2 million primarily from increased compensation and electronic banking charges, with a significant decrease in the provision for credit losses to $1.6 million - Net interest income increased by **$7.0 million** YoY, primarily due to a **$5.0 million** reduction in interest expense from lower deposit and borrowing costs[238](index=238&type=chunk)[242](index=242&type=chunk) - Non-interest income increased by **$1.2 million** YoY, driven by a **$1.1 million** rise in banking service revenues and a **$469 thousand** increase in wealth management revenue[242](index=242&type=chunk)[243](index=243&type=chunk) - Non-interest expense increased by **$3.5 million** YoY, mainly due to a **$2.2 million** increase in compensation and a **$1.6 million** rise in electronic banking charges from higher transaction volumes[246](index=246&type=chunk)[247](index=247&type=chunk) - The provision for credit losses decreased by **$4.8 million** YoY, reflecting improved macroeconomic conditions and the release of certain reserves[250](index=250&type=chunk) [Analysis of Financial Condition](index=71&type=section&id=Analysis%20of%20Financial%20Condition) Total assets grew by $290.4 million since year-end 2021 to $10.19 billion, driven by increases in the investment and net loan portfolios, while total deposits expanded by 4.4%, and stockholders' equity decreased by 3% to $1.04 billion due to share repurchases and AOCI reduction, yet all regulatory capital ratios remained well above 'well-capitalized' thresholds - Net loans increased by **$119.8 million** (1.9%) from year-end 2021, with growth in commercial, consumer, and auto loans offsetting a decrease in mortgage loans and PPP loan forgiveness[260](index=260&type=chunk) - Non-performing assets decreased by **10.6%** to **$115.3 million** (**1.13%** of total assets) from **$129.0 million** at year-end 2021[276](index=276&type=chunk) - Total deposits increased by **4.4%** from year-end 2021, mainly from higher commercial and retail deposits[298](index=298&type=chunk) - Stockholders' equity decreased by **$29.1 million**, reflecting **$33.5 million** in share repurchases and a **$25.8 million** decrease in AOCI, partially offset by **$37.5 million** in net income[300](index=300&type=chunk) Regulatory Capital Ratios | Ratio | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | CET1 Capital Ratio | 13.24% | 13.77% | | Tier 1 Risk-Based Capital Ratio | 13.24% | 14.27% | | Total Risk-Based Capital Ratio | 14.49% | 15.52% | | Leverage Ratio | 9.54% | 9.69% | [Quantitative and Qualitative Disclosures about Market Risk](index=88&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section details OFG's management of market, interest rate, credit, liquidity, operational, and concentration risks, highlighting its primary exposure to interest rate risk managed through NII simulation analysis, which projects a 7.08% increase in net interest income from a 100 basis point rate hike, alongside robust liquidity and credit risk management - OFG's primary risk exposures are identified as market, interest rate, credit, liquidity, operational, and concentration risk, with most business activities concentrated in Puerto Rico[318](index=318&type=chunk)[350](index=350&type=chunk) Net Interest Income Sensitivity Analysis (One-Year Projection) | Change in Interest Rate | Instantaneous Change (%) | Gradual Change (%) | | :--- | :--- | :--- | | +200 Basis points | 14.25% | 7.02% | | +100 Basis points | 7.08% | 3.50% | | +50 Basis points | 3.55% | 1.76% | | -50 Basis points | -2.82% | -1.57% | - As of March 31, 2022, OFG had significant liquidity sources, including **$1.856 billion** in unrestricted cash and cash equivalents and **$664.3 million** in borrowing capacity at the FHLB-NY[345](index=345&type=chunk) - OFG uses interest rate swaps to hedge cash flow variability, with **$28.0 million** in interest rate swaps designated as cash flow hedges for FHLB-NY advances as of March 31, 2022[330](index=330&type=chunk) [Controls and Procedures](index=93&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2022, providing reasonable assurance of timely and accurate reporting, with no material changes to internal controls during the quarter - The CEO and CFO concluded that as of March 31, 2022, OFG's disclosure controls and procedures were effective[351](index=351&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended March 31, 2022, that materially affected, or are reasonably likely to materially affect, the company's internal control[352](index=352&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=93&type=section&id=Item%201.%20Legal%20Proceedings) OFG and its subsidiaries are defendants in various legal proceedings incidental to their business, and management believes that the ultimate liability, if any, will not have a material adverse effect on the company's financial condition or results of operations, with an accrued liability of $4.9 million recorded for probable and estimable loss contingencies as of March 31, 2022 - OFG and its subsidiaries are defendants in a number of legal proceedings incidental to their business[353](index=353&type=chunk) - Management is of the opinion that the ultimate aggregate liability from these claims will not have a material adverse effect on OFG's financial condition[353](index=353&type=chunk) - As of March 31, 2022, the accrued liability for probable and estimable loss contingencies amounted to **$4.9 million**[162](index=162&type=chunk) [Risk Factors](index=93&type=section&id=Item%201A.%20Risk%20Factors) This section supplements the risk factors from the 2021 Form 10-K, specifically addressing new and evolving risks associated with the military conflict in Ukraine, highlighting potential impacts on the global economy, including increased inflation, further interest rate hikes, heightened cybersecurity threats, and financial market volatility, all of which could adversely affect OFG's business, financial condition, and stock price - The military actions of Russia in Ukraine and the resulting geopolitical uncertainty are identified as a significant new risk factor[355](index=355&type=chunk) - Potential impacts include significant increases in oil, natural gas, and food prices, adding to inflationary pressures and likely prompting further interest rate hikes by the Federal Reserve[355](index=355&type=chunk) - The risk of increased cyberattacks and the negative effects of financial sanctions on international trade could adversely impact OFG and its customers[355](index=355&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=93&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In January 2022, the Board of Directors approved a new $100 million stock repurchase program, under which OFG repurchased 1,219,132 shares of its common stock for a total of $33.5 million at an average price of $27.46 per share during the first quarter of 2022, with approximately $66.5 million remaining available for future repurchases - A new stock repurchase program for **$100 million** was approved in January 2022[356](index=356&type=chunk) Share Repurchases in Q1 2022 | Period | Total Shares Purchased | Average Price Paid | Total Cost (in thousands) | | :--- | :--- | :--- | :--- | | Jan 2022 | 700,000 | $27.52 | $19,263 | | Feb 2022 | 287,548 | $27.52 | $7,913 | | Mar 2022 | 231,584 | $27.22 | $6,303 | | **Total** | **1,219,132** | **$27.46** | **$33,479** | - As of March 31, 2022, **$66.5 million** remained available for purchase under the program[357](index=357&type=chunk)

OFG Bancorp (NYSE:OFG) Q1 2022 Earnings Conference Call April 21, 2022 10:00 AM ET Company Participants Jose Rafael Fernandez - CEO & Vice Chair Maritza Arizmendi - CFO Conference Call Participants Alex Twerdahl - Piper Sandler Kelly Motta - KBW Brett Rabatin - Hovde Group Timur Braziler - Wells Fargo Alex Twerdahl - Piper Sandler Operator Good morning. Thank you for joining OFG Bancorp's Conference Call. My name is Gretchen. I will be your operator today. Our speakers are Jose Rafael Fernandez, Chief Execu ...

Quarterly Results 1Q22 Conference Call April 21, 2022 Forward Looking Statements The information included in this document contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and involve certain risks and uncertainties that may cause actual results to differ materially from those expressed in the forward-looking statements. Factors that might cause such a difference include but ...

Financial Performance - OFG's diluted EPS for the fourth quarter of 2021 was $0.66, down from $0.81 in the third quarter of 2021 and up from $0.42 in the fourth quarter of 2020[230]. - Net income for 2021 was $146,151,000, representing a significant increase of 96.5% compared to $74,327,000 in 2020[244]. - Comprehensive income for 2021 was $140.289 million, up from $86.357 million in 2020, indicating a growth of 62.4%[405]. - Earnings per common share increased to $2.85 in 2021, up from $1.32 in 2020, representing a growth of 116.7%[403]. - Cash dividends declared per common share increased to $0.40 in 2021 from $0.28 in 2020, marking a 42.9% increase[244]. Revenue and Income - Total core revenues for the year ended December 31, 2021, were $536.6 million, compared to $519.3 million in 2020[241]. - Interest income for 2021 was $449,199,000, a decrease of 5.1% from $473,347,000 in 2020[244]. - Net interest income after provision for loan and lease losses increased to $407,149,000 in 2021 from $315,760,000 in 2020, reflecting a growth of 29%[244]. - Non-interest income rose to $133,210,000 in 2021, up 7.5% from $124,352,000 in 2020[244]. - Total non-interest income increased by 7.1%, reaching $133.2 million in 2021 compared to $124.4 million in 2020[259]. Assets and Liabilities - Total assets increased to $9,899,720,000 as of December 31, 2021, compared to $9,826,011,000 in 2020, reflecting a growth of approximately 0.74%[397]. - Total liabilities were $8.831 billion, a 1.0% increase from $8.740 billion in 2020[317]. - Customer deposits totaled $8.59 billion at December 31, 2021, a decrease of $641.3 million from the previous quarter[235]. - Total deposits increased to $8,603,118,000 in 2021, up from $8,415,640,000 in 2020, indicating an increase of about 2.23%[399]. Credit Quality - The provision for credit losses in the fourth quarter of 2021 was $7.2 million, which included $9.7 million related to the sale of past due loans[236]. - The non-performing loan rate decreased to 1.75% from 2.08% in the third quarter of 2021[236]. - Non-performing assets decreased by 22.1% to $129.0 million, representing 1.30% of total assets, compared to $165.6 million or 1.69% of total assets at December 31, 2020[295]. - The allowance for credit losses for loans was $156 million as of December 31, 2021, reflecting the company's assessment of credit risk[383]. - Total net credit losses decreased by 47.7% to $49,755,000 in 2021 from $95,167,000 in 2020[311]. Capital and Equity - Total stockholders' equity decreased slightly to $1,069,160,000 in 2021 from $1,085,975,000 in 2020[246]. - Common equity tier 1 capital ratio improved to 13.77%, up from 13.08% in 2020, reflecting an increase in retained earnings[325]. - Book value per common share increased to $21.54 in 2021, up from $19.54 in 2020, reflecting an increase of 10.2%[246]. - Market capitalization at the end of 2021 was $1.318 billion, a 38.4% increase from $952.716 million in 2020[325]. - The tangible common equity to tangible total assets ratio increased from 9.00% to 9.69% from 2020 to 2021[320]. Operational Efficiency - Total non-interest expenses decreased by 5.7% to $325.8 million in 2021 from $345.3 million in 2020[260]. - The efficiency ratio improved to 60.70% in 2021 from 66.49% in 2020, indicating better cost management[260]. - Average loans per average employee increased to $2,904 in 2021 from $2,831 in 2020, reflecting enhanced productivity[260]. - The average compensation per employee rose to $59.28 in 2021 from $55.76 in 2020, reflecting adjustments in employee remuneration[260]. Risk Management - OFG's credit risk management includes a comprehensive credit policy and proactive collection practices to mitigate potential losses[346]. - The company has established a Business Continuity Plan to manage operational disruptions, particularly those arising from the Covid-19 pandemic[363]. - OFG's liquidity risk management practices have been effective, allowing the company to navigate market stress from the Covid-19 pandemic[357]. - The Chief Risk and Compliance Officer oversees regulatory compliance and the implementation of a company-wide compliance program, including anti-money laundering measures[364]. - The company has faced increasing regulatory scrutiny, necessitating enhancements to its compliance procedures[364].

Financial Data and Key Metrics Changes - Fourth quarter diluted earnings per share was $0.66, down from $0.81 in the third quarter and up from $0.42 year-over-year [4] - Core revenues totaled $141 million, an increase of 5% quarter-over-quarter and 6% year-over-year [4] - Pre-provision net revenues were $56 million, similar to the third quarter but 26% greater than the previous year [5] - Total assets at year-end were $9.9 billion, with customer deposits declining by $641 million to $8.6 billion [6] - The CET1 ratio increased by 69 basis points, indicating a strong capital position [10] Business Line Data and Key Metrics Changes - Loan growth in priority areas included a 5% increase in commercial loans (excluding PPP), a 9% increase in consumer loans, and a 1% increase in auto loans [7] - New loan origination for the quarter was $633 million, reflecting strong demand across various loan types [7] - Total core revenue growth was driven by a $4.7 million increase in banking and wealth management revenue [13] Market Data and Key Metrics Changes - Customer deposits decreased due to withdrawals by government-related and institutional clients, partially offset by increased retail deposits [6] - Average loan balances totaled $6.5 billion, reflecting a decline of $14 million from the third quarter [16] - The net interest margin increased to 4.18%, driven by a decrease in the cost of interest paid [19] Company Strategy and Development Direction - The company is focused on digital transformation, enhancing customer experience, and investing in technology [11] - There is an emphasis on building a culture of excellence and customer service, with ongoing investments in talent and technology [11] - The company aims to leverage the economic momentum in Puerto Rico and deploy excess liquidity for loan growth [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the economic growth cycle in Puerto Rico, anticipating continued loan growth [23][30] - The exit from bankruptcy is expected to improve Puerto Rico's standing in the business community and facilitate infrastructure investments [39] - The company plans to maintain a strong capital return strategy while focusing on loan growth and community support [41] Other Important Information - The company completed a $50 million share buyback and increased its common stock dividend to $0.12 per share [10] - Non-interest expenses increased by $8 million, primarily due to investments in people and technology [5][14] - The efficiency ratio for the fourth quarter was 61.4%, up from 58.6% in the third quarter, with expectations to remain in the low 50% range in 2022 [15] Q&A Session Summary Question: Commentary on loan growth and expectations for the next quarters - Management confirmed strong commercial loan growth and expressed optimism for continued growth in 2022, particularly in consumer loans and commercial lending [30][33] Question: Expectations for PPP forgiveness and related fees - Management expects the remaining $87 million in PPP loans to be forgiven by mid-year, with $2.3 million in fees recognized this quarter [34][35] Question: Implications of exiting bankruptcy for the company - Exiting bankruptcy is seen as a positive development, allowing for infrastructure investments and improved access to markets [39] Question: Capital return expectations for 2022 - Management indicated no reason to expect a reduction in capital returns, with a focus on loan growth and maintaining dividends [40][41] Question: Impact of deposit decline on margin and future expectations - Management anticipates a gradual increase in margin due to changes in deposit mix and continued investment in loan balances [78] Question: Technology spending and its impact on expenses - Technology spending is expected to increase as part of the company's strategy to enhance customer service and operational efficiency [81]