OFG Bancorp 3Q19 Earnings Review

Howard Bancorp, Inc. 3Q19 Earnings Review

October 29, 2019

Puerto Rico Economic Report & Opportunity Survey

October 31, 2019

OFG: Noisy Quarter Hides Favorable Trends; Raising EPS Estimates and Target Price; Reiterating Outperform Rating.

OFG reported 3Q19 net income to common shareholders of $7.4 million, down 69.2% compared to the $22.4 million posted in 2Q19. On a per share basis, 3Q19 results were $0.11 compared to $0.43 in the prior quarter. There were some substantial one time or nonrecurring items that affected 3Q19 results, including the sale of $121 million of NPLs, the sale of $322 million of MBS, merger expenses, and several one-time credits. Collectively, the nonrecurring items reduced earnings by $19.1 million or $0.37 per share (after-tax). Adjusted 3Q19 EPS was $0.48 excluding the impact of these items. Adjusted 3Q19 results exceeded our $0.38 estimate and the $0.45 median Street estimate. Driving the better-than-expected results versus our estimate were a lower than-expected loan loss provision (roughly $2.0 million lower excluding the impact of the adjustments) and a lower effective tax rate than we anticipated.

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Joe Gladue

Joseph Gladue has over 30 years industry experience with over 25 years focused on banking research. Mr. Gladue was Director of Research at several firms including Cohen & Company and Merion Capital Group. Previously he was a senior research analyst at B. Riley and worked in finance at Bank of the Internet. Joe has covered small and mid-cap banks across the US and has also follow companies in other financial service industries. Joe also provides his banking expertise in the asset management arena for Bluestone Capital Partners. Joe can be reached at [email protected], 215-572-8700.