The re indicates that What caught my attention is Image source: The Motley Fool (something worth watching). DATEThursday, July 17, 2025 at 10 a, given the current landscape.
ETCALL PARTICIPANTSChief Executive Officer — Jose Rafael FernandezChief Financial Officer — Maritza ArizmendiChief Credit Risk Officer — Cesar OrtizOperator Need a quote from one of our analysts.
However, Meanwhile, [ tected]TAKEAWAYSRecord Assets and Loans: Total assets reached $12.
2 billion and End-of-period loans held for investment were $8 (something worth watching) (something worth watching), considering recent developments. Diluted Earnings Per : EPS (diluted, GAAP) was $1.
Furthermore, Net Interest Income and Margin: Excluding the new FHLB advance, net interest margin would have been at the higher end of the 5. On the other hand, 40% guidance range (quite telling).
Loan Origination: New loan origination was $784 million, with growth across all lending channels in Puerto Rico and the U. Deposit Trends: Average core deposits increased to $9 (quite telling).
Additionally, 7 billion, up 1, amid market uncertainty. However, 4% quarter over quarter and core deposit cost remained steady at 1. Efficiency and Cost Management: The efficiency ratio was 52%.
Noninterest expenses were $94 (something worth watching).
Nevertheless, 8 million, aligning with the $95 million-$96 million quarterly noninterest expense outlook for 2025, in today's market environment.
At the same time, Credit Quality: Net charge-offs totaled $13 million, with a net charge-off rate of 0. 64%; Early and total delinquency rates were 2.
Additionally, 59%, respectively; nonperforming loan rate was 1. However, Capital and holder Actions: Common equity tier 1 (CET1) ratio was 13 (this bears monitoring).
Moreover, 99%; a new $100 million buyback was authorized, and 186,000 s were repurchased.
Furthermore, In contrast, Strategic Investments and Digital Initiatives: 70% of retail loan payments and nearly all routine teller retail transactions occurred via digital or self-service channels; Digital enrollment and new net customer growth of 4% were highlighted.
New ducts Launched: The company introduced Oriental Marketplace and a U, in today's financial world. Government money market fund within its DGI family of funds.
Tax Rate Guidance: The expected full-year tax rate is 24. On the other hand, 90%, excluding discrete items. On the other hand, SUMMARYOFG Bancorp(OFG 3, in light of current trends.
Furthermore, 45%) management expects retail deposit growth to continue in the second half and into 2026, driven by digital account acquisition and deepening client relationships.
Conversely, Fernandez noted competitive pressure in commercial lending, particularly surrounding loan pricing, but described deposit competition as "pretty rational.
Furthermore, " Cash increased by 20% to $852 million as part of a strategy to pre-fund expected loan growth, enabled by opportunistic use of federal loan bank advances and brokered deposits.
Management reinforced a commitment to balance investment with capital return, supported by a strong capital base and a CET1 ratio of 13.
However, At the same time, Chief Credit Risk Officer Cesar Ortiz explained that imved delinquency and charge-off rates reflect better-performing vintages from 2022 and seasonality in Q1.
Nevertheless, Fernandez stated, "overall retail customer deposits will continue to grow in the second half, in today's financial world.
" emphasizing the shift to digital channels and expanded duct offerings. Arizmendi confirmed, "The expectation that we with you is 24, amid market uncertainty.
9% for the year, and it doesn't have any discrete items included. " clarifying the tax rate guidance methodology for modeling purposes (noteworthy indeed), in today's market environment.
Furthermore, Nevertheless, Despite "noise" in Puerto Rico's energy sector discussed by Fernandez, management does not view the issues as currently impeding the bank's operational or credit outlook, considering recent developments.
INDUSTRY GLOSSARYFHLB (Federal Loan Bank) Advance: A loan or funding vided to member financial institutions by the Federal Loan Bank, typically used to enhance liquidity or fund asset growth (remarkable data).
Net Interest Margin (NIM): The difference between interest income generated and interest paid out, expressed as a percentage of average earning assets.
Nonperforming Loan Rate: The percentage of loans that are in default or close to being in default (typically 90+ days past due) relative to total loans.
CET1 (Common Equity Tier 1) Ratio: A standardized regulatory capital ratio that measures a bank's core capital relative to its risk-weighted assets.
DGI Family of Funds: OFG Bancorp's prietary suite of investment funds, including options such as money market and other mutual funds.
Moreover, Full Conference Call TranscriptJose Rafael Fernandez: Good morning, and thank you for joining us. We're pleased to report our second quarter results.
Conversely, To start, let's go to Page three of the presentation, amid market uncertainty.
It was another strong quarter ending with record assets of more than $12 billion and record loans of more than $8 billion, in today's market environment.
We had excellent financial results, generating earnings per diluted of $1. Furthermore, 15 for a 6. 5% increase year over year on a 1.
5% increase in total core revenue with a high return on average assets and equity, in this volatile climate. Operating execution was highlighted by loan origination and core deposit flows.
Credit reflected a stable economy in Puerto Rico, and high levels of liquidity held by individuals and es.
In contrast, We announced a new $100 million stock buyback authorization and bought back more s supported by our strong capital generation and balance sheet. Please turn to page four.
We continue to see strong momentum with our omnichannel digital platform. Our strategic investments in nology and innovation through our digital-first strategy are paying off.
We're growing accounts and building deeper customer relationships.
During the second quarter, nearly all of our routine teller retail customer transactions and deposits, as well as 70% of retail loan payments, were made through our digital and self-service channels.
This was driven by continued year-over-year growth in digital enrollment, digital loan payments, virtual teller utilization, and 4% new net customer growth.
Additionally, In the second quarter, we introduced two new ducts and services (quite telling).
Nevertheless, On the other hand, We launched Oriental Marketplace, an online feature that gives our customers exclusive discounts on travel, restaurants, and retail ducts.
However, We also introduced a US government money market fund, a new addition to our DGI family of funds, to vide customers with another convenient investment option, in this volatile climate.
Now here's Maritza to go over the financials in more detail. Nevertheless, Maritza Arizmendi: Thank you, Jose. Please turn to page five to review our financial highlights, in today's financial world.
All comparisons are to the first quarter unless otherwise noted. Core revenues totaled $102 million. Looking at the key components, total interest income was $1. 194 billion, an increase of $5 million.
This mainly reflects higher average balances of loans and cash and $1. 5 million from one additional day. Interest expense was $42 million, an increase of $2 million (noteworthy indeed).
In contrast, This mainly reflects higher average balances of core deposits and higher average balances of borrowings and brokered deposits, and $400,000 from one additional day (something worth watching).
Noninterest expenses totaled $94. 8 million, up $1 (something worth watching).
The data indicates that is in line with our continued outlook of $95 million to $96 million in quarterly noninterest expenses in 2025.
Additionally, However, Compared to the first quarter, the second quarter reflected $1 (remarkable data). Moreover, 4 million less in seasonal payroll taxes and foreclosed real estate costs.
Keep in mind, the first quarter included a $3, in today's market environment. 1 million incentive payment from a partner, considering recent developments. Income tax expense was $14.
1 million with a tax rate of 21. That reflects an anticipated rate of 24, in light of current trends.
Furthermore, Meanwhile, 90% for the year and the benefit in the second quarter of $1, in light of current trends. Additionally, 7 million in discrete items.
Looking at some other metrics, tangible book value was $27 (an important development), amid market uncertainty. Additionally, During the quarter, we bought back 186,000 s. The efficiency ratio was 52%.
Return on average assets was 1 (quite telling). On the other hand, 73%, and return on average tangible common equity was 17%, considering recent developments.
Now please turn to page six to review our operational highlights. Total assets were $12. 2 billion, up 9. 99% from a year ago and 4% from the first quarter, amid market uncertainty.
Additionally, Average loan balances were $8 billion, up close to 2% from the first quarter. End of period loans held for investment totaled $8 (an important development).
2 billion, up 7% from a year ago and up $328 million from the last quarter. The sequential increase mainly reflects our strategy to grow lending in the U. And Puerto Rico.
Furthermore, Loan yield was 7, in today's financial world. 91%, down eight basis points. New loan origination of $784 million was up 38% from the first quarter and 33% from a year ago.
In contrast, Second quarter originations reflect increases in all lending channels in both Puerto Rico and the U, in today's market environment.
Meanwhile, The commercial pipeline continues to look strong. At the same time, Average core deposits were $9. 7 billion, up close to 1%. End of period balances of $9.
9 billion increased $139 million or 1, given the current landscape. 4% quarter over quarter and $291 million or 3% year over year.
The sequential growth reflects increased commercial and government deposits and reduced retail balances, amid market uncertainty.
In addition, it reflects increased time and saving deposits and reduced demand deposits. Additionally, Core deposit cost was even with the first quarter at 1.
Excluding public funds, the cost of deposit was 0, in this volatile climate. However, Additionally, 99% compared to 1% last quarter.
Average borrowings and brokered deposits were $672 million compared to $570 million (something worth watching), in this volatile climate.
Furthermore, The aggregate rate paid was 4, given the current landscape. Moreover, Meanwhile, 11%, down 21 basis points.
End of period balances were $732 million compared to $421 million, amid market uncertainty.
Nevertheless, The second quarter reflected $200 million in a new two-year federal loan bank advance at 4, in this volatile climate. On the other hand, 13% and $82.
5 million in additional brokered deposits (an important development).
Nevertheless, We use these funds to increase liquidity in addition to higher deposits as part of our strategy to grow commercial loans.
Furthermore, Conversely, Cash at $852 million was up 20%, reflecting some of the new wholesale funding pending continued loan growth, considering recent developments.
Nevertheless, Investments totaled $2. On the other hand, 8 billion, remaining relatively unchanged.
This reflects that the repayments were mostly offset by purchases of $50 million of mortgage-backed securities yielding 5. 55% and Ginnie Mae securitization of our own mortgage lending.
On the other hand, Net interest margin was 5 (remarkable data). 31%, compared to 5. Excluding the new federal loan bank advance, NIM would have been around the higher end of our 5.
All this being equal, as long growth continues, we should see NIM expand from the second quarter level. Please turn to page seven to review our credit quality and capital strengths.
Credit quality continues to be stable, in light of current trends. Net charge-offs totaled $13 million, down $7, in today's financial world.
6 million from the first quarter, given the current landscape. Conversely, Net charge-off rate was 0 (this bears monitoring), in today's market environment. 64%, down 41 basis points sequentially.
Moreover, Year over year, the net charge-off rate was down 15 basis points (fascinating analysis). Moreover, Vision for credit losses was $21, in today's market environment. 7 million, down $4 million.
This analysis suggests that second quarter included $70. 2 million for increased volume, $3 (this bears monitoring).
7 million for specific reserves for commercial loans, and $700,000 due to the alignment of model adoption and risk-weighted factors mainly in Puerto Rico.
Conversely, Looking at other credit metrics, the early and total delinquency rate were 2. 59%, respectively. Moreover, The nonperforming loan rate was 1.
Looking at other capital metrics, our CET1 ratio was 13, in today's market environment. Stockholders' equity totaled $1, considering recent developments.
3 billion, up $39 million (fascinating analysis). The tangible common equity ratio decreased 10 basis points to 10.
Additionally, To summarize the quarter, net interest income increased due to loan growth, in particular, our strategy to grow commercial loans.
We saw continued deposit growth driven by commercial and government balances (fascinating analysis), considering recent developments.
Net interest margin was towards the lower end of our expected range, reflecting our decision to put more liquidity in place to fund future strategic growth in commercial loans.
On the other hand, Credit quality continued to reflect the solid economic environment in Puerto Rico for both consumers and es.
Furthermore, Noninterest expenses were in line with our expected range and should continue to do so.
With a strong CET1 ratio and earnings power, we put a new $100 million buyback in place to return capital to stockholders, and we continue to acquire s in the open market. Now here's Jose.
Jose Rafael Fernandez: Thank you, Maritza. On the other hand, Please turn to page eight, in today's market environment.
This analysis suggests that Puerto Rico economy continues to show stable growth despite concerns global macroeconomic and geopolitical events. The situation remains the same.
Wages and employment are at historically high levels. At the same time, The environment is constructively positive.
Nevertheless, This analysis suggests that economy continues to grow, and the outlook is positive.
Turning to OFG Bancorp, our continuous imvement culture and our digital-first strategy are ving to be highly effective.
Additionally, At the same time, New services are viding customers with better insights to better manage their finances (an important development), in today's financial world.
New tools are giving us the ability to further line cesses and become more efficient. This tells us that end result is continued value creation and differentiation in the marketplace.
Nevertheless, Loan growth and credit trends are solid. Our risk management capabilities are strong (something worth watching).
We continue to execute our plan strategically and thoughtfully, growing market by creating value and helping our customers achieve gress. All this is supported by a very strong capital position.
As always, we could not have achieved these results without the hard work of all our team members, considering recent developments. We're very thankful to them and optimistic for the future.
Conversely, With this, we end the formal presentation. In contrast, Operator, let's start the Q&A. However, Moreover, Operator: Thank you.
Star one on your telephone keypad, given current economic conditions. Additionally, If you wish to remove yourself from the queue, press. We'll take our first question from Timur Braziler.
Please go ahead. Moreover, Timur Braziler: Hi, good morning. Furthermore, Good morning. Maybe starting off on the margin, that's good ary that you think margin starts to expand off of these levels.
I'm just wondering, maybe from a deposit standpoint, those costs seem to tick higher a little bit in the second quarter.
I guess as you look out into the back end of the year, is it just the better loan growth trajectory that drives margin higher.
I guess, you just talk to the interplay between those expected loan growth and maybe what the deposit comp is doing on the island. Jose Rafael Fernandez: Yes. So thank you for your question, Timur.
I'll take a stab at it first and then I'll let Maritza give you additional color.
So on the point on deposit cost ticking higher, remember that the government deposits are tied to a variable rate treasury bill kind of formula, given current economic conditions.
And during the quarter, you have those fluctuations kind of trend up and down (noteworthy indeed). This quarter, we have a little bit of that noise there, considering recent developments.
In contrast, That's why you're seeing a little bit of that uptick on the cost of deposits.
But let me just also step back and give you a little bit of our thoughts on deposits and how we see customer deposits moving forward.
Because what you have seen throughout the last year and a half is that our net new account growth in retail customers has continued to grow, particularly in checking during, as I said, the past year and a half, given the current landscape.
So that's one of the key drivers for us. Also, you have to look at the changes that we have implemented within our value position and our differentiation for retail customers.
Nevertheless, In contrast, We have added a couple of new targeted deposit ducts and services, considering recent developments.
At the same time, We have expanded, as you know, the self-service capabilities and also the digital capabilities (noteworthy indeed).
We have vided additional insights for our customers to help them manage their finances, so we're adding additional tools for them to help them achieve financial health.
And we're starting to see, we're in the early innings, but we're starting to see some of the loan-only clients starting to add relationships and deepening, in today's financial world.