Ofg Bancorp · NYSE:OFG
Ofg Bancorp — Q4 2023 Earnings Presentation
27 slides from Ofg Bancorp's earnings presentation, Jan 24, 2024
Slide 1: Quarterly Results 4Q23 Conference Call
Quarterly Results 4Q23 Conference Call January 24, 2024
Slide 2: Forward Looking Statements
Forward Looking Statements The information included in this document contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and involve certain risks and uncertainties tha
Slide 3: 4Q23 Summary
4Q23 Summary Income Statement Balance Sheet (EOP) Capital • EPS $0.98 • Total Assets $11.3B • CET1 14.12% • Total Core Revenues $175.6M • Customer Deposits $9.6B • Tier 1 Risk-Based 14.12% • NIM 5.62% • Includes $1.6B total government • Total Risk-Based 15.37% deposits • Provision $19.7M • Leverage
Slide 4: 2023 Summary
2023 Summary Income Statement Balance Sheet (EOP) Capital Capital Actions • EPS $3.83 • Total Assets $11.3B • CET1 14.12% • Increased quarterly • Total Core Revenues • Customer Deposits $9.6B • Tier 1 Risk-Based dividend 10%, to $0.22 $682.7M 14.12% per share from $0.20 • Loans Held for • NIM 5.79%
Slide 5: Our "Digital First" Strategy at Work
Our “Digital First” Strategy at Work Now Through Retail Digital/Self- Service Channels (Dec 2023) • 93% of all routine customer transactions • 96% of all deposit transactions Key Drivers (Dec 2023 vs Dec 2022) • 11% growth in digital enrollment • 54% growth in digital loan payments • 21% growth in v
Slide 6: Financial Highlights
Financial Highlights Total Core Revenues ($M) EPS TBV $0.98 Per Common Share $176 $0.97 $0.96 $0.93 $0.95 $23.13 $172 $171 $168 $0.87 $164 $21.06 $21.01 $20.57 $19.56 $157 $18.46 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Efficiency Ratio ROAA ROATCE 1.
Slide 7: Operational Highlights
Operational Highlights Loans ($B) Core Deposits ($B) New Loan Origination ($M) Average Balances $7.42 Average Balances $682 $664 $7.19 $8.92 $616 $7.00 $8.76 $8.69 $8.59 $8.53 $8.62 $561 $568 $6.87 $6.77 $511 $6.70 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 3Q22 4Q22 1Q23 2Q23 3Q23
Slide 8: Credit Quality & Capital Strength
Credit Quality & Capital Strength NCO Rate Provision ($M) NPL Rate Excludes PCD Loans $19.7 $16.4 $15.0 1.71% 1.61% 1.45% 1.05% 1.32% 1.33% 0.88% 1.22% $9.4 0.68% 0.66% $8.8 0.59% 0.38% $7.1 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 CET1 Ratio Total St
Slide 9: Outlook
Outlook Puerto Rico Macro • Ongoing flow of federal funds to rebuild infrastructure • Significant influx of private capital • Keeping a watchful eye on interest rate changes, inflation, possible mainland recession, and global uncertainties • Remain optimistic about PR’s decoupling from mainland econ
Slide 10: Appendix
Appendix
Slide 11: Snapshot (December 31, 2023)
Snapshot (December 31, 2023) Branches, Kiosks, ATMs & ITMs in All Major PR & USVI Markets Value Proposition • Puerto Rico’s challenger bank Puerto Rico USVI Total Branches 42 2 44 • Target specific retail and commercial customer segments Self-Service Kiosks 9 0 9 ATMs 268 12 280 • “Más Que Listo (Mo
Slide 12: History of Capital Management & Growth
History of Capital Management & Growth • Organic growth and acquisitions have transformed Oriental into Assets ($B) Loans ($B) a full-service, island-wide $11.3 $7.4 financial institution $6.6 $6.5 $6.7 $6.3 • From 12/31/02 to 9/30/23, $9.8 $9.9 $9.8 OFG’s local deposits have $9.2 $9.3 $5.2 $5.0 $4.
Slide 13: 4Q23 Asset Balance Evolution ($M)
4Q23 Asset Balance Evolution ($M) 13
Slide 14: 4Q23 Loan Balance Evolution ($M)
4Q23 Loan Balance Evolution ($M) 14
Slide 15: 4Q23 Core Deposit Balance Evolution ($M)
4Q23 Core Deposit Balance Evolution ($M) 15
Slide 16: 4Q23 Deposit Balance Evolution: Retail vs. Commercial, Ex-Public Funds
4Q23 Deposit Balance Evolution: Retail vs. Commercial, Ex-Public Funds ($M) 16
Slide 17: Residential Mortgage Loans ($M)
Residential Mortgage Loans ($M) Portfolio New Loan Origination $1,739 $1,704 $1,669 $1,622 $1,604 $1,563 $39 $36 $35 $33 $33 $30 9/30/22 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 NPLs (excludes PCD) NCO Rate $33 $34 $31 $28 $25 0.03% -0.04% -0.05% -0.10% -0.09% $20 -0.2
Slide 18: Commercial Loans ($M)
Commercial Loans ($M) Portfolio New Loan Origination $755 $669 $708 $642 $618 $57 $622 $112 $2,322 $83 $2,125 $286 $2,105 $1,917 $1,988 $1,964 $124 $211 $70 $209 $56 $150 $123 $98 Puerto Rico US Puerto Rico US 9/30/22 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 NPLs (excl
Slide 19: Auto Loans ($M)
Auto Loans ($M) Portfolio New Loan Origination $2,274 $236 $237 $2,212 $220 $221 $222 $224 $2,127 $2,039 $1,964 $1,885 9/30/22 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 NPLs (excludes PCD) NCO Rate 1.72% 1.11% 0.96% $21 $20 0.57% $19 0.46% $16 $14 $13 0.09% 3Q22 4Q22 1Q
Slide 20: Consumer Loans ($M)
Consumer Loans ($M) Portfolio New Loan Origination $613 $620 $594 $565 $86 $87 $537 $521 $76 $73 $68 $64 9/30/22 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 NPLs (excludes PCD) NCO Rate 3.95% 3.30% 3.33% 2.95% 2.52% 2.37% $3 $3 $3 $3 $3 $3 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 3Q
Slide 21: Credit Quality
Credit Quality NCO Rate NPL Rate (excludes PCD) 1.71% 1.61% 1.05% 0.88% 1.45% 0.68% 0.66% 0.59% 1.32% 1.33% 0.38% 1.22% 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Early Delinquency Rate Total Delinquency Rate 4.35% 4.04% 3.67% 3.78% 3.76% 3.40% 2.75% 2.75% 2.76% 2.46% 2.53% 2.11% 3Q
Slide 22: Reserve
Reserve ACL / Total Loans Held for Investment 2.44% 2.40% 2.37% 2.32% 2.23% 2.22% 2.25% 2.17% 2.14% 12/31/21 3/31/22 6/30/22 9/30/22 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 ACL by % of Portfolio 12/31/21 3/31/22 6/30/22 9/30/22 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 Auto 3.85 3.69 3.72 3.66 3.5
Slide 23: Core Non-Interest Income ($M)
Core Non-Interest Income ($M) Total Banking Services $18.2 $17.8 $33.0 $17.2 $17.5 $17.4 $17.3 $32.1 $30.3 $30.9 $30.4 $28.5 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Wealth Management Mortgage Banking $10.0 $8.2 $8.3 $8.2 $7.7 $7.1 $6.5 $5.2 $5.4 $4.9 $4.3 $3.9 3Q22 4Q22 1Q23 2Q23
Slide 24: Capital: Fortress Balance Sheet
Capital: Fortress Balance Sheet Basel III Standardized ($ in millions except per share) 4Q23 3Q23 2Q23 1Q23 4Q22 CET1 Capital $1,174.2 $1,124.6 $1,086.6 $1,063.9 $1,037.4 CET1 Capital Ratio 14.12% 14.06% 14.03% 14.07% 13.64% Tier 1 Capital $1,174.2 $1,124.6 $1,086.6 $1,063.9 $1,037.4 Tier 1 Capital
Slide 25: Income Statement Highlights: 4Q23 vs. 3Q23
Income Statement Highlights: 4Q23 vs. 3Q23 $ in millions 4Q23 3Q23 Δ Comment Total Interest Income • Cash $6.9 $9.0 ($2.1) • 24% lower average balance & 4 bps higher yield • Investment Securities 20.5 14.6 5.9 • 20% higher average balance & 56 bps higher yield • Loans 148.8 142.1 6.7 • 3% higher ave
Slide 26: Income Statement Highlights: 4Q23 vs. 4Q22
Income Statement Highlights: 4Q23 vs. 4Q22 $ in millions 4Q23 4Q22 Δ Comment Total Interest Income • Cash $6.9 $5.1 $1.8 • 6% lower average balance and 162 bps higher yield • Investment Securities 20.5 15.6 4.9 • 4% higher average balance and 77 bps higher yield • Loans 148.8 125.0 23.8 • 10% higher
Slide 27: Thank you.
Thank you. Contact: IR Coordinator Gary Fishman gfishman@ofgbancorp.com 212-532-3232 Steven Anreder sanreder@ofgbancorp.com 212-532-3232