OFG Bancorp(US:OFG)2025-11-07 12:57Earnings Performance - Earnings per share for the third quarter of 2025 was $1.16, a 16.0% increase year-over-year, with net income of $51.8 million, unchanged from the previous quarter [242][245]. - Net income available to common shareholders increased by 10.3% to $51,838 from $47,000 in Q3 2024 [262]. - Basic EPS for Q3 2025 was $1.17, a 15.8% increase from $1.01 in Q3 2024 [262]. - Net income for the quarter was $51,838 thousand, compared to $47,000 thousand for the same quarter in 2024, representing an increase of 10.0% [300]. Interest Income and Net Interest Income - Total interest income reached $200.1 million, up 5.8% from the second quarter of 2025 and 5.9% year-over-year [246]. - Interest income for Q3 2025 was $200,145, a 5.9% increase from $189,030 in Q3 2024 [262]. - Net interest income after provision for credit losses was $126,466, remaining stable compared to $126,516 in Q3 2024 [262]. - Net interest income for the quarter ended September 30, 2025, was $154.7 million, an increase of $6.8 million from $147.9 million, driven by higher loans and investment securities income [274]. - Tax equivalent basis net interest income increased by $5.6 million, or 3.7%, to $158.8 million from $153.2 million [274]. Credit Losses and Provisions - Total provision for credit losses was $28.3 million, an increase from $21.7 million in the second quarter of 2025, primarily due to increased loan volume and specific reserves [250]. - Provision for credit losses increased by 32.3% to $28,258 from $21,359 in Q3 2024 [262]. - The provision for credit losses for the nine-month period increased by $23.5 million to $75.6 million, primarily due to adjustments related to loan volume [294]. - Provision for credit losses for the quarter ended September 30, 2025, was $28.0 million, a 31.7% increase from $21.3 million in the same quarter of 2024 [340]. Loans and Deposits - Loans held for investment decreased 0.8% sequentially to $8.12 billion but increased 4.73% year-over-year, driven by growth in commercial and consumer loans [254]. - Customer deposits totaled $9.82 billion, a decrease of $76.2 million from the previous quarter but an increase of $286.5 million year-over-year [257]. - New loan production was $623.9 million, down from $783.7 million in the second quarter of 2025 but up 9.0% year-over-year [255]. - Total deposits increased to $10,008,633 from $9,604,786 in the previous year [263]. Non-Interest Income and Expenses - Non-interest income rose 17.1% to $31,453 from $26,868 in Q3 2024 [262]. - Non-interest income for the quarter was $31.5 million, an increase of 17.1% or $4.6 million from $26.9 million, attributed to higher mortgage banking activities and other non-interest income [283]. - Total non-interest expenses for the quarter were $96,548 thousand, compared to $91,600 thousand in the same quarter of 2024, representing an increase of 5.9% [300][303]. - Non-interest expense for the quarter ended September 30, 2025, was $96.5 million, an increase of 5.4% or $4.9 million compared to $91.6 million in 2024 [286]. Capital and Ratios - The CET1 ratio improved to 14.13% from 13.99% in the second quarter of 2025, while the tangible common equity ratio rose to 10.55% [260]. - Total stockholders' equity was $1.375 billion, marking a 9.6% increase compared to $1.254 billion at the end of 2024 [355]. - Common equity tier 1 capital ratio decreased to 14.13%, down 0.9% from 14.26% [360]. - Total risk-based capital increased to $1.431 billion, reflecting a 4.6% growth from $1.368 billion [360]. Asset Management - Total assets as of September 30, 2025, amounted to $12,229,812 thousand, up from $11,461,382 thousand a year earlier, indicating a growth of 6.7% [300][303]. - Total investments and loans reached $10,874,425, up from $10,354,108 in the previous year [263]. - The investment portfolio grew by $218.7 million or 8.0%, primarily due to new mortgage-backed securities and favorable market value adjustments [313]. - Total assets managed by OFG's trust division increased to $2.475 billion from $2.262 billion, reflecting a $103.7 million rise due to market conditions [315]. Non-Performing Loans and Credit Quality - Non-performing assets increased by 14.4% to $107.1 million, representing 0.88% of total assets as of September 30, 2025 [330]. - The total allowance for credit losses (ACL) increased by 11.1% to $189.7 million from $170.7 million at December 31, 2024 [338]. - Non-performing loans reached $99.0 million, reflecting a 19.4% increase from $83.0 million at the end of 2024 [347]. - The allowance coverage ratio to non-performing loans was 199.7% as of September 30, 2025 [331]. Strategic Initiatives - The Digital First strategy is enhancing customer acquisition and retention, with AI-driven insights being introduced to improve customer financial management [243]. - The company has implemented two mortgage loan modification programs aimed at reducing losses on non-performing loans [337].