OFG Bancorp

Good morning. Thank you for joining OFG's Bancorp's conference call. My name is Gretchen. I will be your operator today. Our speakers are Jose Rafael Fernandez, Chief Executive Officer and Vice Chair of the Board of Directors, and Maritza Esmendi, Chief Financial Officer. A presentation accompanies today's remarks. It can be found on our Investor Relations website on the homepage in the What's New box or on the quarterly results page. This call may feature certain forward-looking statements about management's goals, plans, and expectations. These statements are subject to risks and uncertainties outlined in the risk factors section of OFG's SEC filings. Actual results may differ materially from those currently anticipated. We disclaim any obligation to update information disclosed in this call as a result of developments that occur afterwards. All lines have been placed on mute to prevent background noise. After the speaker's remarks, there will be a question and answer session. Instructions will be given at that time.

I would now like to turn the call over to Mr. Fernandez.

Good morning, and thank you for joining us. We had a great start to 2022, and we're extremely proud of our achievements, particularly our continuous focus on helping our customers and the communities we serve. This is due in no small part thanks to our team members and their excellent work, commitment, and dedication. So let's turn to page three of our conference call presentation. Fourth quarter, EPS diluted with 76 cents compared to 66 cents in the preceding quarter and 56 cents in the year-ago period. Core revenues total $136 million. That's an increase of 7% year-over-year. Asset quality continued to improve, resulting in a net provision of $1.6 million. Non-interest expenses were in line at $81 million. Pre-provision net revenues totaled $56 million. That's 9% greater than last year. Looking at the March 31st balance sheet, total assets grew 2.9% from the end of the fourth quarter to $10.2 billion. Customer deposits increased 4% to $9 billion. We saw continued loan growth quarter over quarter in all three of our priority areas. 5% in commercial loans, consumer loans grew 11%, and auto loans grew 2%. New loan origination was seasonally strong at $623 million. We also successfully executed on all our capital strategies. We completed $33.5 million of our $100 million share buyback program. We early terminated all our outstanding subordinated capital notes, totaling $36 million. We increased our regular quarterly cash dividend by 25% to 15 cents per common share. And we ended the quarter with continued strong levels of capital. Our results continue to reflect the three main drivers of our business, consistently growing recurring net income driven by loan growth, our larger scale and investment on our people, and our focus on increasing digital utilization and customer service differentiation. As a result, we had a strong quarter on all fronts. We grew loans at a stronger pace than we anticipated. While this is likely to moderate in the second quarter, we continue to expect single-digit loan growth for the rest of the year. Deposits increased from both our retail and commercial customers. As a result, our balance sheet now is over $10 billion. Our strong, highly liquid balance sheet enabled us to deploy more cash into higher-yielding loans and investment securities, improving our asset mix. We also paid down higher-cost borrowing, All of this helped to expand net interest margin. In addition, we performed well from an operating perspective, giving us good momentum going forward. We continue to introduce new digital solutions. This quarter we'll launch fully digital processes for personal loan originations and for opening and making contributions into our IRA fund. Liquidity and credit continue to show positive trends. This positions us well to benefit from the expected rate increases by the Fed. Against this backdrop, the Puerto Rico economy continues to show strength. Recent figures show employment increased close to 5% last year. As of March, the number of people employed is the highest since 2014, and the unemployment rate has fallen to the lowest level in several decades. The manufacturing index is up year-over-year above pre-pandemic levels. Residential home values continue to increase, and we're seeing incremental construction activity of single-family housing. Overall, many of our commercial clients are experiencing higher demand for their products and services. All this continues to validate our optimism regarding the future of Puerto Rico and OFG. Here's Maritza to go over the financials in more detail.