OFG Bancorp(US:OFG)2025-04-23 15:02Financial Data and Key Metrics Changes - The company reported diluted earnings per share of $1, driven by strong operating execution and loan and deposit growth [4] - Core revenues totaled $178 million, with total interest income at $189 million, reflecting a decline of $941,941 due to two fewer business days [9] - Total interest expense decreased to $40 million, down $874,000, primarily due to the same two fewer business days [10] - The efficiency ratio was 52.42%, return on average assets was 1.56%, and return on tangible common equity was 15.28% [12] Business Line Data and Key Metrics Changes - Average loan balances were $7.8 billion, up nearly 1%, with loans held for investment totaling $7.9 billion, up 44.2% year-over-year [13] - New loan origination was $559 million, down 9.3% from the fourth quarter but up 4.2% year-over-year [14] - Average core deposits were $9.6 billion, up nearly 1%, with end-of-period balances increasing by $308 million or 3.3% quarter-over-quarter [15] Market Data and Key Metrics Changes - The company experienced a 12% year-over-year growth in digital enrollment and a 21% increase in digital loan payments [6] - The net charge-off rate was 1.05%, up 23 basis points sequentially, with consumer net charge-off ratio increasing to 4.34% [19][20] Company Strategy and Development Direction - The company continues to invest in technology through a digital-first strategy, enhancing customer relationships and operational efficiency [5][25] - The management emphasized the importance of adapting to the economic environment in Puerto Rico, with a focus on consumer credit trends and maintaining a strong balance sheet [24][25] Management's Comments on Operating Environment and Future Outlook - The management noted that while the business environment in Puerto Rico is positive, there are concerns about macroeconomic and geopolitical volatility impacting the economy [24] - The company is committed to methodically executing its business plan and supporting clients and communities [25] Other Important Information - The company bought back $23.4 million of shares and raised its dividend by 20% during the quarter [12] - The CET1 ratio was 14.27%, indicating a strong capital position [21] Q&A Session Summary Question: Digital channel deposit account openings - The company confirmed that approximately 25% to 26% of checking accounts and certificates of deposits are opened through digital channels [32] Question: Deposit growth and seasonality - The management acknowledged that the first quarter has seasonal components affecting deposits, including tax refunds [34] Question: Consumer charge-offs normalization - The Chief Risk Officer indicated expectations for stabilization in consumer charge-offs, particularly in the auto portfolio [42] Question: Bond book duration and cash flow - The duration of the bond book is around five to six years, with repayments of $84 million this quarter [49] Question: Margin trajectory - The management expects the net interest margin to remain in the range of 5.3% to 5.4% for the year, depending on funding side dynamics [50] Question: Competitive environment in Puerto Rico - The management noted that competition remains high, but they are pleased with core performance in deposits [79] Question: Onshoring opportunities in pharmaceuticals - The management expressed optimism about potential onshoring opportunities for pharmaceuticals but noted it is too early to see significant movement [82]