OFG Bancorp (OFG) Q2 2024 earnings summary

Executive summary

• Diluted EPS for Q2 2024 was $1.08, up 16.1% year-over-year, with core revenues rising 5.2% to $179.4 million and net income available to common shareholders of $51.1 million.

• Strong growth in loans, deposits, and non-interest income, with stable credit quality and robust performance metrics.

• Digital-first strategy drove significant increases in digital transactions and customer engagement, with 94% of routine retail transactions and 96% of deposit transactions conducted digitally.

• Nearly half of the $50 million share buyback program was executed, with $24.3 million in shares repurchased.

• Puerto Rico's economy continued to grow, decoupling from mainland uncertainties and supporting business optimism.

Financial highlights

• Net interest margin was 5.51% in Q2 2024; net interest income reached $147.3 million, and provision for credit losses was $15.6 million.

• Non-interest expenses totaled $93 million, reflecting higher electronic banking, legal, and FDIC insurance costs.

• Total assets reached $11.3 billion, customer deposits were $9.6 billion, and loans held for investment totaled $7.6 billion.

• Return on average assets was 1.82%; return on average tangible common equity was 18.24%.

• Tangible book value per share increased to $24.81, up $0.63 from the prior quarter.

Outlook and guidance

• Loan growth for 2024 expected at 3%-4%, with commercial lending driving second-half growth.

• Net interest margin outlook remains 5.45%-5.55%; full benefit from recent investment portfolio changes expected in Q3.

• Non-interest expense guidance for the remainder of 2024 is $90-$92 million per quarter.

• Effective tax rate for 2024 is expected at 29%-29.2%.

• Anticipates three 25 basis point Fed rate cuts in the second half of 2024.