OFG Bancorp (NYSE: OFG) reported Q4 EPS of $0.11, $0.21 worse than the analyst estimate of $0.32.

4Q19

• OFG reported a net loss to shareholders of $2.3 million, or ($0.04) per share, which included $21.5 million in acquisition related merger and restructuring charges and $6.6 million in additional provision for non-performing loans the Company decided to sell in 3Q19.
• 4Q19 compares to 3Q19 net income available to shareholders of $5.8 million, or $0.11 per share fully diluted, and 4Q18 net income of $23.1 million, or $0.45 per share.
• 4Q19 core operations were strong, with net interest margin of 5.35% and loan production of $404.9 million. Most credit quality metrics improved.
• During the quarter, OFG obtained all regulatory approvals, developed an integration plan, and closed on the $560.0 million cash acquisition (excluding settlement amounts), adding $2.2 billion in net loans and $3.0 billion in low cost, core deposits.
• Acquisition related merger and restructuring charges, core deposit intangible of $41.5 million, no goodwill, and tangible book value dilution of 6% were all lower than originally assumed. Loan marks were in line at an average of 6.44%.

CEO Comment

José Rafael Fernández, President, Chief Executive Officer, and Vice Chairman of the Board, said: “We ended 2019 on a high note, closing the Scotiabank acquisition at year-end as originally anticipated. We welcome our new team members and clients in Puerto Rico and U.S. Virgin Islands. We are committed to providing excellent career opportunities to our new employees and excellent service, products, and technology to our new clients. We’re excited about the prospects for future growth.

“I also want to thank all our staff for their exceptional work, some despite their own difficult personal circumstances, in assisting earthquake evacuees. As early responders on the ground in affected areas, Oriental teams helped organized shelters and relief centers. In coordination and collaboration with several of our clients, we provided more than 4,000 meals, bottled water, batteries, electric fans and other essentials. We also arranged access to teams of doctors and structural engineers. The quick response would not have been possible without our compassionate staff and clients. We are extremely proud of our commitment to the communities we serve.

“Turning back to business, 4Q19 was a very busy quarter, closing on the acquisition while continuing to build our existing business. Operationally, we had a strong quarter. We effectively managed the transition to slightly lower yields in the commercial loan portfolio, reflecting FRB rate cuts, with our pro-active effort to reduce high cost wholesale funding. Going forward, our funding mix will improve even further with our larger core deposit base.

“We are well positioned for 2020. The acquisition enabled us to more effectively use our excess capital and end 2019 with a record $6.6 billion in loans and a record $7.7 billion in deposits, which increases our ability to generate future growth. We are moving fast, starting the year focused on integration and loan production, and look forward to reporting our progress in the quarters ahead.”

For earnings history and earnings-related data on OFG Bancorp (OFG) click here.