OFG Bancorp (OFG) Q3 2024 earnings summary

Executive summary

• Reported Q3 2024 diluted EPS of $1.00, up 5.3% year-over-year, with total core revenues of $174.1 million and net income of $47.0 million.

• Digital First strategy drove 13% growth in digital enrollment and 53% growth in digital loan payments year-over-year, with 95% of routine retail transactions now digital or self-service.

• Celebrated 60th anniversary and approved a new $50 million stock repurchase program in October 2024, increasing the quarterly dividend to $0.25 per share.

• Puerto Rico's economy remains strong, supporting business activity and employment, though the Economic Activity Index declined 0.8% year-over-year in August 2024.

Financial highlights

• Net interest margin was 5.43%; return on average assets 1.66%; return on average tangible common equity 15.94%; efficiency ratio 52.60%.

• Total assets reached $11.5 billion, customer deposits $9.53 billion, and loans held for investment $7.8 billion.

• Tangible book value per share increased to $26.15, up 13.1% year-to-date and 8% sequentially.

• Pre-provision net revenues were $83.1 million.

• Non-interest income for Q3 2024 was $26.9 million, down 12.5% year-over-year, mainly due to lower interchange fees and mortgage banking activities.

Outlook and guidance

• Management expects continued solid performance, supported by resilient Puerto Rico economic conditions and ongoing digital transformation.

• Fourth quarter NIM expected between 5.3% and 5.4%, reflecting recent Fed rate cuts; anticipates two additional 25 basis point Fed rate cuts by year-end.

• Non-interest expense projected at $91–$93 million, with efficiency ratio in line with recent trends.

• Expects core deposit growth and deposit stabilization into 2025.

• 2024 effective tax rate expected at 26.8% due to higher forecasted business activities with preferential tax treatment.