Oriental reports ‘superior’ 2Q results
SAN JUAN – OFG Bancorp published results for the second quarter ended June 30, 2018 (2Q18) reflecting a third straight quarter of “continued strong recovery” since two major hurricanes struck the island in September.
OFG’s principal subsidiaries–Oriental Bank, Oriental Financial Services and Oriental Insurance–provide retail and commercial banking, lending, and wealth management products and services primarily in Puerto Rico.
“While Puerto Rico faces similar challenges as before, now that insurance and federal funds are flowing, economic activity and optimism are gaining momentum. Based on what we have seen to date, we are confident about OFG and Oriental’s ability to continue to grow, deliver great customer experience and performance, and help Puerto Rico recover,” OFG President, CEO and Vice Chairman José Rafael Fernández said while lauding the institution’s work team.
“We are extremely proud to announce yet another quarter of superior results across all facets of our business. 2Q18 EPS [earnings per share] is up more than 17% sequentially and more than 16% year over year. Virtually every one of our metrics confirms the success of our strategies, people and technology.
“For the third quarter in a row, loan growth, new loan production, and return on average tangible common stockholders’ equity are up, while credit quality remained stable. For two quarters in a row, customer count, banking and financial service revenues, core retail deposits and NIM increased, and delinquency rates fell below pre-hurricane levels,” he added
A summary of the report noted the following:
- Net income available to shareholders was $16.2 million, or $0.35 per fully diluted share, compared to 1Q18’s $13.5 million and 2Q17’s $13.6 million, equal to $0.30 per share, respectively.
- Average loan balances of $4.3 billion increased 3.0% from the preceding quarter as growth of originated loans is consistently outpacing the anticipated runoff of acquired loans.
- New loan production of $432.1 million grew 39.7% from 1Q18 with sequential increases across the board in all categories.
- Average core deposit balances of $4.4 billion rose 1.6% from 1Q18 with a 6.2% increase in non-interest bearing accounts to a record high $1.1 billion.
- Customer count grew 1% from 1Q18 and 3% year over year as our strategy of differentiation, delivering superior customer convenience with innovative technology solutions, continues to be successful.
- Total provision for loan and lease losses of $14.7 million dropped 4.6% from the preceding quarter as credit quality remains stable.
- All key performance metrics improved from 1Q18 with net interest margin at 5.24%, return on average assets at 1.23%, return on average tangible common stockholders’ equity at 9.20%, and the efficiency ratio at 54.49%.
- Tangible book value per common share of $15.96 at June 30, 2018 increased 6.4% annualized from March 31, 2018.
“Our effort to differentiate Oriental through superior service and technology is working. During 2Q18, we launched Oriental SmallBiz, another banking first for Puerto Rico, where new and existing customers can apply online for commercial credit. Services like these enable us to step up our ability to reach out to customers and clients fácil, rápido, hecho (easy, fast, done),” Fernández explained.
“We are also encouraged as OFG continues to build solid capital, with tangible book value per common share at $15.96, up sequentially more than 6% on an annualized basis. All indicators are positive, positioning us well to continue this trend for the rest of 2018,” he added.
A conference call to discuss OFG’s results was held Friday. A webcast replay will be available on OFG’s Investor Relations website.