OFG

OFG Bancorp walked into Q3 2026 earnings with a stock that had drifted over the past month, then instantly caught a bid. The share price was up about 2% in Thursday trading as investors reacted to fresh numbers. The headline is simple. Earnings per share landed at about US$1.34 for the quarter, with net income close to US$56.6 million, and the key story sits in profitability. Return on tangible common equity hovered in the high teens while the net interest margin stayed above 5%. The market is cheering, yet the move looks measured rather than euphoric given those fundamentals. Like the mix of high returns on tangible equity and a firm net interest margin but want a broader set of banks with robust profitability and balance sheets on your radar too? Line OFG Bancorp up against peers from our list of solid balance sheet and fundamentals stocks (25 results) - Total Revenue (Q3 2026 vs. Q3 2025): US$168.07 million vs. US$157.92 million (up about 6.4%). - Net Income (Excl. Extra Items, Q3 2026 vs. Q3 2025): US$56.61 million vs. US$51.84 million (up about 9.2%). - Basic EPS (Q3 2026 vs. Q3 2025): US$1.34 vs. US$1.17 (up about 14.8%). - Net Interest Margin, or NIM (Trailing 12 Months to Q3 2026 vs. Trailing 12 Months to Q4 2025): 5.23% vs. 5.38% (slightly lower on a trailing basis while remaining above 5%). Ask Charlie what OFG Bancorp's AI push means for profits. Optimists argue OFG Bancorp can marry digital growth with a stronger funding mix and credit discipline. The ambition is clear. "The main thing that has to go right is that OFG Bancorp continues to pair its digital banking growth and Puerto Rico loan pipelines with disciplined credit risk management and stable funding costs." Q3 earnings show pieces of that coming together. Net interest margin is 5.23%, core deposit costs edged up only 5 bps, and core deposits are broadly stable. Credit metrics improved in commercial, with NPAs and NPLs lower, and seasonal auto pressure has not reversed those gains so far. On the risk side, skeptics worry margin pressure and Puerto Rico concentration will eventually bite harder. "Several independent analyses point to projected declines of about 2.1% to 2.2% in net interest income over the next 12 months following a roughly 59 basis point drop in net interest margin over the last two years due to pricing concessions to defend market share." Recent results show NIM at 5.23%, slightly below prior trailing levels, and loan yields eased 22 bps quarter on quarter while deposit costs moved higher. At the same time, ROAA of 1.86%, ROTCE of 17% and improving commercial credit quality indicate earnings and capital remain resilient even as these margin headwinds persist. That disagreement has a full argument behind it. → Uncover the higher Fair Value this Narrative argues for. OFG Bancorp just reminded investors how quickly sentiment can shift when profitability holds up. The real opportunity is finding companies that could be mispriced before the crowd fully connects the dots. - Company 1 - 33% below our estimate - turns a large backlog of AI infrastructure and multicloud database contracts into expanding subscription revenue and growing cash generation potential. - Company 2 - 21% below our estimate - designs liquid cooling and power systems that become standard once ultra high density AI racks strain traditional air-based setups and data center capacity. - Company 3 - 40% below our estimate - expands specialty deposits and a refreshed digital payments platform to support loan growth and fee income across specific client segments. Three companies from the same screener. Open every one of the 33 undervalued companies on it → This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include OFG. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Wednesday, Oct. 21, 2026 - Chief Executive Officer and Chairman of the Board of Directors - José Rafael Fernández - Chief Financial Officer - Maritza Arizmendi - Chief Risk Officer - César Ortiz Operator: Good morning. Thank you for joining OFG Bancorp's conference call. My name is Chloe, and I will be your Operator today. Our speakers are José Rafael Fernández, Chief Executive Officer and Chairman of the Board of Directors, Maritza Arizmendi, Chief Financial Officer, and César Ortiz, Chief Risk Officer. A presentation accompanies today's remarks. It can be found on the homepage of the OFG website under the third quarter 2026 section. 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 any background noise. After the speakers' 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. Fernández. José Rafael Fernández: Good morning, and thank you for joining us. We are very pleased to report our results today. We had an outstanding third quarter with excellent performance across the board. Let's turn to page three of our presentation. Earnings per share increased 15% year-over-year and on 1% growth in total core revenues. This was driven by strong commercial loan growth, stable credit and core deposit balances, disciplined expense management, and strong profitability metrics. We continue advancing our digital bank with a human touch strategy. Customers are embracing Oriental's digital tools and value-added services. Our Libre, Elite, and My Biz accounts are attracting new clients and helping our bankers deepen existing relationships. We resumed stock repurchases, buying back $13.5 million of common shares, reflecting our continued focus on creating long-term shareholder value. As to Puerto Rico's economy, it remains stable, supported by a healthy labor market and ongoing expansion by local and mainland businesses. Thank you to all our team members for their hard work and continued focus on making progress possible for our customers, employees, shareholders, and the communities we serve. Please turn to page four. Our Core Digital strategy is focused on three main areas. The first area centers on delivering value through innovative account products tailored to the needs of our customers. Libre for the mass market, Elite for the mass affluent, and My Biz for small businesses. The second area of focus is technology. Our omni-channel platform enables customers to engage with us seamlessly across our digital channels. This creates a convenient and efficient banking experience, helps drive digital adoption, generating efficiencies and savings. As a result, we continue to invest in the customer experience and shift branch interactions away from routine transactions and toward meaningful relationship building. The third area of focus is AI-powered intelligent banking. Our data-driven, real-time, personalized insights provide compelling value, giving customers the ability to manage their finances in an easy and intuitive way. Together, these capabilities distinguish us from competitors and accelerate digital adoption. They also expand our client base, create more opportunities to deepen customer relationship and engagement, and ultimately support growth in core deposits. Please turn to page five. Our key digital performance indicators continue to show our strategy is delivering results. During the third quarter, we saw year-over-year growth of 5% in net new retail customers and commercial customers, 24% in active digital users, 2% in digital loan payments, and 11% in virtual teller use. Year-to-date as of September, more than 1.5 million customized AI-enabled Smart Banking Insights have been delivered monthly to customers with more than 90% positive feedback. Libre accounts increased 7%, while digitally opened Libre accounts grew 18%. We're the only bank in Puerto Rico that provides customers the convenience and speed of digital account opening. My Biz commercial accounts grew 6%, while accounts opened either digitally or by phone grew 16%. Now I'd like to turn the call to Maritza to go over the financials in more detail. Maritza Arizmendi: Thank you, José. All comparisons are to the second quarter, unless otherwise noted. Now let's turn to page six. Our financial performance was strong this quarter. EPS was $1.33. Efficiency ratio was 52%. Return on average assets was 1.86%. Return on average tangible common equity was 17%. Loans-to-deposits ratio was 85%, and the payout ratio was 26%. Let's turn to page seven to review our income statement highlights. Core revenues decreased $4.5 million to $186 million. Total interest income was $196 million, a decrease of $1 million. This reflected the absence of $4.1 million from the prepay in full commercial loans in the second quarter. This was partially offset by higher average balances of loans and cash and higher yields in cash and investment portfolio. There was one additional day in the quarter, which increased interest income by $1.6 million. Total interest expense was $42 million, an increase of $2.3 million. This reflected higher average balances of deposits at a higher cost. The date factor increased interest expense by about $400,000. Total banking and financial service revenues decreased $1 million to $32 million. This reflected the absence of $1.1 million in annual insurance and annuity fees in the second quarter and lower mortgage banking revenues. This was partially offset by higher banking service revenues. Non-interest expenses decreased $6.6 million to $96 million. This reflected the absence of $5.8 million in business operational charges from the second quarter. Income tax was $15.2 million, reflecting an anticipated ETR of 22.5% for the year. Now, let's turn to page eight to review our balance sheet highlights. Average loan balances grew $37 million to $8.3 billion, while end of period balances grew $151 million to 1.8%. End of period balances reflected an increase in Puerto Rico commercial and consumer loans, which more than offset a decline in auto, residential mortgage, and U.S. commercial. Most of the commercial loan growth came in towards the end of the quarter. Year-over-year, loans are up 4.1%. New loan production was $694 million, a decrease of $61 million. This reflected decreases in auto, Puerto Rico commercial, and residential mortgage lending, partially offset by increases in U.S. commercial and Puerto Rico consumer loans. Average core deposit balances grew $15 million to $9.7 billion. End of period balances declined $80 million or 0.8%. This reflected decreases in demand and savings deposits, partially offset by increases in time deposits. Excluding the $500 million government deposits that moved to wealth management in the first quarter, deposits are up 3.5% year-over-year. Average cash balances grew $29 million and fell $179 million end of period. End of period balances reflected the funding of loan growth, as previously mentioned. Average investments were flat and increased $20 million end of period. End of period balances increased due to purchases of $260 million of mortgage-backed securities and $20 million in securitizations. This was partially offset by mark-to-market adjustment and MBS principal payments. Average borrowings and brokered deposits increased $45 million and $131 million end of period, reflecting liquidity management. Now, let's turn to page nine to review our net interest margin. The Fed's 25 basis point rate increase in September had a limited impact on this quarter's results. Loan yield declined 22 basis points to 7.68%. As a reminder, second quarter loan yield benefited from $4.1 million related to commercial loans that were paid in full. September's rate increase had only a small impact on variable rate commercial loans. About $550 million of the total $1.7 billion of variable rate commercial portfolio repriced late in the quarter. Core deposit cost increased 5 basis points to 1.34%. This reflected higher demand for time deposits and higher cost of government deposits tied to three-month T-bill rates. Net interest margin was 5.23%. Now, let's turn to page 10. Capital remained strong despite an increase in mark-to-market adjustment in our securities portfolio. CET1 ratio was 14.10%. Total stockholders' equity was $1.3 billion. TCE ratio was 10.34%. Tangible book value was $29.66. As for share buyback, as José mentioned, we bought back $13.5 million in the third quarter. We have $180 million remaining in our authorization. César will provide more details about credit in a moment. Let me summarize where we're heading into the final quarter of 2026. We continue to have a strong commercial pipeline and expect low single-digit loan growth for the year, with commercial more than offsetting an anticipated decline in auto. We expect deposit growth, excluding government deposits, driven by our Libre, Elite, and My Biz accounts. While our variable rate loans and cash position make us asset sensitive, higher asset yields should largely be offset by the increase in liability costs. We expect net interest margin to remain near 5.25% for the balance of the year. Our NIM outlook assumes that there will be one additional 25 basis points hike in December. Provision should move into $18 million-$20 million range. This reflects increased loan volume and seasonally higher auto and consumer credit metrics. We remain on track to maintain non-interest expenses at about $385 million for the year, excluding the $5.8 million business operational charge in the second quarter. Our estimated tax rate for the year continues to be 22.5%, not including discrete items. We will deploy capital prudently across organic growth, dividends, and share repurchases, balancing attractive opportunities with long-term shareholder returns. Now, here's César. César Ortiz: Thank you, Maritza. Please turn to page 11. All comparisons are to the second quarter unless otherwise noted. Credit reflected disciplined execution, proactive risk management, and typical seasonal trends. Provision for credit losses was $18.1 million, up $5.1 million from the second quarter. This reflected $17.5 million for increased loan volume and $1.3 million due to seasonal adjustments for the auto delinquency. This compares to the second quarter, which included $14.7 million for increased loan volume, partially offset by $1.9 million in commercial loan recoveries. Early and total delinquency rates of 2.65% and 3.91% increased from the second quarter due to seasonal trends but declined year-over-year. At the same time, net charge-offs and non-performing loan rates of 0.70% and 0.74% declined compared to second quarter 2026 and third quarter 2025. As a result, third quarter provision was slightly lower than originally anticipated due to better auto and consumer credit metrics. On the retail side, consumer and residential mortgage portfolios continue to perform well, with both reporting lower early and 90+ day delinquency levels compared to a year ago. The auto portfolio experienced modest increases in both early and non-performing delinquency levels compared to the same period last year. Net charge-offs for auto improved year-over-year and recovery performance remains strong. Collateral liquidation values have remained stable, resulting in consistent loss severities despite the modest increase in delinquency. This provides additional confidence that the observed seasonal increase in delinquency does not necessarily translate into increased loss content. We continue to closely monitor this trend. Mortgage performance remained particularly strong with continuing improvements across delinquency measures and recoveries continued to exceed charge-offs. As we discussed in prior quarters, first half retail credit performance typically benefits from seasonal factors, including tax refunds and other liquidity events. We then see a seasonal increase in the credit risks in the second half. Accordingly, part of the third quarter increase in auto delinquency metrics reflects seasonal normalization rather than a deterioration in the underlying credit profile of the portfolio. Our retail portfolio continued to benefit from discipline underwriting and a significantly improved credit profile. As we have previously reported, this reflects tighter underwriting standards, improved portfolio mix, and stronger vintage performance. Turning to commercial, our asset quality represents one of the strongest credit stories within the quarter. Commercial non-performing loan rates were 0.68% compared to 0.90% in the second quarter. Delinquencies and non-performing levels are down. Criticized exposures have declined, and overall asset quality has improved materially. Looking ahead, we remain watchful of inflationary pressures, higher operating costs, elevated energy expenses, and the continued impact of higher borrowing costs on both commercial and consumer borrowers. The credit portfolio continues to demonstrate resilience. We believe we are well-positioned to navigate the current environment and any potential macroeconomic headwinds that may emerge. Now here's José to wrap up. José Rafael Fernández: Thank you, César. Let's turn to page 12. The Puerto Rico economy remains resilient. It is supported by healthy consumer and business liquidity, higher wages, and historically low unemployment. Infrastructure projects and private investment continue to support economic activity. Manufacturing expansion and new onshoring initiatives reinforce the long-term economic outlook. As César mentioned, we remain attentive to evolving macroeconomic conditions, including higher energy costs, interest rates, and inflation, while continuing to monitor broader geopolitical developments. OFG is well-positioned for growth. Our Digital at the Core strategy is driving customer growth and engagement, simplifying operations, and expanding our market opportunity. We continue investing in people and technology to improve the customer experiences and operating efficiency. Our capital strength, methodical execution, and differentiated franchise positions us well to navigate evolving market conditions. With this, we end our formal presentation. Operator, please open the call for questions. Operator: Certainly. If you have a question at any time, please press star one on your telephone keypad. If you wish to remove yourself from the queue, press the star two key. We will take our first question from Brett Rabatin with StoneX Group. Your line is open. Brett Rabatin: Hey, good morning, everybody. José Rafael Fernández: Hey, good morning. Brett Rabatin: Thanks for the questions. Wanted to start off, José Rafael, I've seen some of the data here in the past few months that's been modestly positive for some continued Puerto Rico growth. But if you look at the newspaper articles in Puerto Rico, they seem to be somewhat more dour and talking about downside risks and the cost of diesel, etc. Can you maybe just start off with just what you're seeing on the ground and what positives and negatives you would point to as it relates to the economy? José Rafael Fernández: Sure. Thank you for your question, Brett. We need to separate a little bit the noise from the facts here in the sense that we're not seeing any deterioration on the economy to speak of. We continue to see unemployment on the 5% handle. We see wages at a higher, historically highest levels. We're seeing the onshoring coming in, and we see actual private investment flowing through the economy. The data does not support the noise that we might be reading or listening to locally. Again, most of it driven by political kind of discussions and one side kind of challenging the other. But from our perspective, and as César mentioned on the credit side, we continue to see a pretty steady consumer, and we are not seeing any indications of a slowdown in the economy. What we're seeing is a steady economy that continues to chug along and benefiting from the inflows of investment from the U.S. and locally to us as businesses continue to invest in their business, and they feel optimistic about their potential growth. That's as much as I can share with you given the data that we have. Brett Rabatin: Okay. That's helpful. I wanted just. It seems like all the Puerto Rico banks have been lamenting that auto's been softer. When I look at the auto trends, the origination levels haven't fallen off that much. It seems like auto's still there relative to what I seem to hear. Any thoughts on auto from here? Just the commercial pipeline, I heard the guidance around the low single-digit growth. Just any thoughts as you think about 2027, any early reads that growth might be better or worse than what you're seeing this year? José Rafael Fernández: Yep. To your first point, we are equally happily surprised with the levels of auto lending originations during this year. We expected a softer market, and we are still there seeing, yes, lower originations, but better than what we expected. We are not ready to give you formal 2027 guidance, but I can give you a little bit of color on how we see the auto business into 2027. I think you'll see a steady, maybe slightly lower new car sales, and therefore you'll see also some trends across the market where you will see a lower auto originations. We are into those analysis right now. We feel that given what we saw in 2026, we do not expect auto originations to decline additionally at a faster pace than 2026. We see it pretty stable. That's on the auto side. On the commercial side, on the other hand, we are seeing very good growth opportunities. We are seeing good opportunities for us to establish new commercial relationships through the lending side as well as on the funding side. Maritza mentioned in her remarks the pipeline that we continue to have. We are having a banner year on the commercial side in Puerto Rico. A lot of our work has been put into this year's work, and the team has done a great job on the commercial middle market and small business. We do feel that we are going to end the year with strong numbers, strong originations, and this quarter is another example of what we have been able to achieve. Brett Rabatin: Okay. Great. Appreciate the color. Thanks, José Rafael. José Rafael Fernández: Yep. Thank you, Brett. Thank you for your questions. Operator: We'll take our next question from Arren Cyganovich with Truist Securities. Your line is open. Arren Cyganovich: Thanks. Good morning. On the deposit side, are you seeing competition increase? Demand deposits were down, savings deposits were down quarter-over-quarter. Anything in particular driving that? I'm sorry if I missed something in the prepared remarks. José Rafael Fernández: Yeah, I think Maritza covered it pretty well. I think big picture, the seasonality that we see in the first half of the year with funds coming in reflects also on the deposit side. You'll see a little bit of a softer second half of the year on the funding side just simply because the liquidity is put to work on the commercial side as well as on the individual side, on the retail side. From a competition perspective, look, we're in a competitive market and we compete, and our competitors compete against us, so this is not a cakewalk, trying to gain market share on all the business units as well as growing the bank. Yes, for sure there's deposit competition. We're also seeing a little bit more sensitivity with higher rates on some higher balance individual clients. They are more sensitive, and they're looking for alternatives. We have the wealth management business that benefits from that, so it's fine with us. At the end, we're just trying to make sure that we service and cater to our customers on a relationship basis. We feel pretty confident on how we're growing our deposit balances and the deposit relationship with our commercial and retail customers, Arren. Arren Cyganovich: Great. Thanks. As a follow-up in the slide deck discussing the AI insights that are personalized for your customers, maybe you could talk a little bit about how that works and maybe some examples of how that might be helping the customer experience. José Rafael Fernández: Yep. So it's personalized. It's on the mobile, it's on online. You get your phone or your online, and the first thing you see is this is the expected expenses based on your several months before experience. These are your expected expenses that you're going to be funding. This is your expected income coming in. These are insights that are really unique for the Puerto Rico market. No ever has a bank provided those type of insights in such a simple and accessible way. So that's an example. There's another insight that you get, and these are personalized. This is not based on collective data. This is on specific personalized ins and outs of the client's checking accounts and savings accounts, etc. Another example is we provide insight. You paid the same bill twice in the same month. Check it out because you might have paid it twice. Those are examples of what those insights provide, and the feedback that we're getting as mentioned, it provides pretty positive insights. This is all translating, Arren, into us growing retail customers 5% year-over-year. The same thing goes for the commercial side. It's something that we have been working on and building on throughout several years, and it's starting to show the results. We're also seeing the opportunity for us to deepen those relationships. So it's not only about bringing in new customers and clients to Oriental, it is also about our opportunity to deepen those relationships and be able to make them primary customers for us. So it's exciting times for us. We're really happy with the way our strategy is progressing and how we're unique in the market and being a different bank than the market is accustomed to see. Arren Cyganovich: Thanks, José. Operator: And we'll take our next question from Kelly Motta with KBW. Your line is open. Kelly Motta: Hi. Good morning. Thanks for the question. José Rafael Fernández: Hi, Kelly. Kelly Motta: I think I'd like to start off on the margin. You guys undoubtedly have one of the best margins here of the group, but it seems like your expectations near term are a bit more tempered than where you were in July. I am wondering in terms of both loan pricing as well as the deposit competition, you've noted you're in a competitive environment, where the incremental headwinds have been coming from relative to those July expectations. Thanks. José Rafael Fernández: Thank you for your question, Kelly. I appreciate you recognizing the margin levels that we have and how we have managed them pretty consistently. Kudos to the team and Maritza overlooking and overseeing all that effort. I will let her give you the more details about it. Maritza Arizmendi: Thank you, Kelly. I think when you look at the range that we share with you, we were near the lower end of that range because we were managing several scenarios at the moment, particularly in the funding side, how it will behave in the second part of the year given the liquidity that is moving and everything. When you look at what happened during the quarter, we did have some repricing in the government side that we were expecting because we repriced about $400 million of the government deposit at the end of second quarter that were moved into time deposits. We had that pulling back during this third quarter. But secondly, the mix in the now savings and time deposits, we saw more than expected movement to the time deposit side of the funding mix. That is what happened with the initial estimate that we have. It is particularly driven by the funding mix. Okay? I think that the level of market rates right now, we were expecting no rate hikes during the second part of the year. Now we have one. Secondly, we have the Treasury notes at its highest level. We are starting to see more clients looking for high yielding type of product. We are there for our customers. That is why time deposits were higher than expected during this third quarter. Kelly Motta: Great. Thanks so much for the color. That kind of ties into my next question, which is mostly a point of clarification as well as an outlook ahead. The government deposits, you had some go to wealth at the beginning of the year, and then you had what you had already disclosed as moving to being termed out to CDs in June. That's created some variability in those demand deposits. Just wanted to confirm that those balances are now, one, out of demand deposits, and then as we look ahead, it seems like clients are being driven by more rate sensitive accounts. Do you think this is a place where we can stabilize, or would you anticipate some additional migration of excess funds to time here? Thanks. Maritza Arizmendi: Yeah, let me make sure. You're asking about the government deposits or— Kelly Motta: Yes. Maritza Arizmendi: Okay. So that's a particular deposit that we have been managing for a long period. It was at $1.2 billion, about $500 million moved to the broker-dealer at the beginning of the year. Then end of second quarter, we made two time deposits. One actually matures end of third quarter, and we reprice it. That will impact this fourth quarter coming. So the answer is that we will see some repricing there because of the market condition. All these deposits are tied to three-month Treasury bill. So they will have some reflection of what the market is experiencing. José Rafael Fernández: Yeah. And it's a good point that Maritza makes because that's very much separate to the actual core client deposit funding that we have on the retail and commercial. The— Maritza Arizmendi: The dynamics are different. José Rafael Fernández: The dynamics are completely different. Maritza Arizmendi: Not necessarily tied to market rates. José Rafael Fernández: Correct. It's good that you asked that question, Kelly, because there might be some confusion among the market. Kelly Motta: Got it. Okay. That's helpful. Maybe last question from me, and then I'll step back. I appreciate you guys reiterated the low single-digit growth outlook for the year. You're kind of already there in 3Q. Obviously commercial growth was super strong. Wondering about the pipeline ahead, and what could potentially push you slightly above that if you're successful in growing loans again in Q4. Thank you. José Rafael Fernández: Yeah. To answer your question, Kelly, is yes, we're very confident that we're going to have low single digit loan growth for the full year. We work hard to do better. The strong pipeline that we have keeps us confident that we have a chance to do better. That's as much as I'm going to share. Kelly Motta: Great. Thank you so much. I will step back. José Rafael Fernández: Thank you. Operator: We will take our next question from Manuel Navas with Piper Sandler. Your line is open. Manuel Navas: Hey, good morning. I appreciate the commentary. Just kind of following up on the NIM here. How should we think about the December hike post you kind of get past some of these seems more like unique public fund repricing moments that might be impacting the near term NIM in the fourth quarter. How should we think about future hikes impact on the NIM into early next year? Maritza Arizmendi: Yeah. We will update at the end of the year with how we see 2027. I can answer on the matter of the December hike. It will be something similar to this quarter, that it happened at the end of September. As I have shared with you in my prepared remarks, the more elastic asset is the cash and also the about $500 million, $550 million in the commercial portfolio, which is tied to prime rates. The other happens gradually through the next quarter. That is how we see that. It will not be much of an impact on the fourth quarter NIM. José Rafael Fernández: Yep. The fourth quarter interest rate hike. Maritza Arizmendi: Interest rate hike. José Rafael Fernández: Yeah. Manuel Navas: Sure. I guess also, separately, you had a lot of loan growth come in at the end of the quarter. Do you have a sense for new loan yields especially for that piece, maybe like September new loan yields? José Rafael Fernández: Yeah, similar to the portfolio yields. That those levels that we're originating on the commercial Puerto Rico side. So you should use that as a guidance. Manuel Navas: Okay. Then I like that the buyback restarted this quarter. Just kind of thoughts on its pace. I know you're doing shareholder capital return, but just kind of a current— José Rafael Fernández: Yeah. Manuel Navas: —update on capital deployment and the pace of the buyback. José Rafael Fernández: Yeah. So we look at loan growth and balance sheet growth first. We certainly are very proactive on the capital management, and we will continue to do so. We will mix it between dividend and the buyback. So you will see us being pretty steady on the buyback and probably more active as there are fluctuations in the market. But overall, the capital management strategy remains the same. We want to deploy our capital for growth on the balance sheet, and the excess capital that we have, we deploy it through dividends and buyback. We still have $180 million on the buyback, so that is ample space for us to go out and go into the market. Manuel Navas: I appreciate that. My last question is a little bit on digging in deep on credit. Credit trends are really strong. The commercial trends are excellent. Just want to cover all my bases. Delinquencies ticked higher in auto, and a little bit higher, I think, year-over-year as well as linked quarter. Any extra color there, or is this still well within the normal seasonal increases, and you kind of expect a seasonal increase in the fourth quarter and then an improvement in the first quarter of next year as well? Is that the right trajectory to think about? César Ortiz: Yeah, that is exactly right. You have it right. The seasonality works from first quarter improving and then picking up to the fourth quarter. We still expect that trend to happen this year too. Manuel Navas: Anything specific in auto this year versus last year? César Ortiz: No— Manuel Navas: Okay. César Ortiz: No. We continue seeing the resiliency on the customers as you see in the credit performance of the customers. So far the portfolio is behaving very well. The economy is well too. Those two together give us comfort on the credit performance of our portfolios. José Rafael Fernández: Yeah, and as César mentioned, we are very cognizant about what is going on with higher interest rates and inflation and energy and all that stuff. But all those things are happening when Puerto Rico's economy is sitting in a much different position than in years past, and it makes a different behavior for consumers, simply. That is what is going on. The performance that you are seeing on the consumer side, on the credit consumer side, it is a reflection of the economy and all the things that we talked about earlier in the call. Manuel Navas: Thank you. I appreciate the comments. José Rafael Fernández: Yeah. Thank you. Operator: Again, if you would like to ask a question, press star then the number one on your telephone keypad. At this time, there are no further questions. I will now turn the call back over to management for closing remarks. José Rafael Fernández: Thank you, operator. Thanks again to all our team members for a great job in the quarter, and thanks to all our stakeholders who have listened in. Looking forward to see you next time. Operator: Thank you. This does conclude today's program. We thank you for your participation. You may now disconnect. Before you buy stock in OFG Bancorp, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and OFG Bancorp wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $370,440!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,330,110!* Now, it's worth noting Stock Advisor's total average return is 924% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of October 21, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. OFG Bancorp (OFG) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

SAN JUAN, Puerto Rico, October 21, 2026--(BUSINESS WIRE)--OFG Bancorp (NYSE: OFG), the financial holding company for Oriental Bank, today reported results for the third quarter ended September 30, 2026. EPS diluted of $1.33 compared to $1.39 in 2Q26 and $1.16 in 3Q25. Total core revenues of $185.7 million compared to $190.3 million in 2Q26 and $184.0 million in 3Q25. CEO Comment José Rafael Fernández, Chief Executive Officer, said: "We delivered another strong quarter, with year-over-year increases of 14.7% in EPS and 1.0% in core revenues. Our results reflect continued momentum in commercial loan growth, stable credit quality and core deposit balances, disciplined expense management, and healthy profitability. We also repurchased $13.5 million of common shares, reinforcing our commitment to creating long-term shareholder value." "At the same time, we continue advancing our digital bank with a human touch strategy. Customers are embracing Oriental's digital tools and value-added services while our Libre+, Elite, and My Biz accounts are attracting new clients and helping our bankers deepen existing relationships." "Puerto Rico's economy remains stable, supported by a healthy labor market and ongoing expansion by local and mainland businesses." 3Q26 Highlights Performance Metrics: Net interest margin of 5.23%, return on average assets of 1.86%, return on average tangible common stockholders' equity of 17.06%, and efficiency ratio of 51.83%. Total Interest Income of $195.7 million compared to $197.2 million in 2Q26 and $200.1 million in 3Q25. 3Q26 decreased $1.4 million sequentially, primarily reflecting the absence of $4.1 million from three paid in full commercial loans in 2Q26, partially offset by higher average balances of loans and cash, higher yields in cash and the investment portfolio, and $1.6 million from one additional business day. Total Interest Expense of $42.2 million compared to $39.9 million in 2Q26 and $45.4 million in 3Q25. 3Q26 increased $2.3 million sequentially, primarily reflecting higher average balances of deposits at a higher cost and $0.4 million from one additional business day. Total Banking & Financial Service Revenues of $32.2 million compared to $33.0 million in 2Q26 and $29.3 million in 3Q25. 3Q26 decreased $0.8 million sequentially, reflecting the absence of $1.1 million in insurance and annuity fees in wealth management in 2Q26 and lower mortgage banking revenues, partially offset by higher banking service revenues. Pre-Provision Net Revenues of $89.9 million compared to $87.5 million in 2Q26 and $89.6 million in 3Q25. Total Provision for Credit Losses of $18.1 million compared to $13.0 million in 2Q26 and $28.3 million in 3Q25. 3Q26 primarily reflected $17.5 million for increased loan volume and $1.3 million due to seasonal adjustment for auto delinquency, while 2Q26 included $14.7 million for increased loan volume and $1.9 million in commercial loan recoveries. Credit Quality: The early and total delinquency rates of 2.65% and 3.91% both increased sequentially from 2Q26 due to seasonal trends, but declined year over year compared to 3Q25. At the same time, the 3Q26 net charge off and nonperforming loan rates of 0.70% and 0.74% both declined compared to both 2Q26 and 3Q25. Total Non-Interest Expense of $96.3 million compared to $102.8 million in 2Q26 and $96.5 million in 3Q25. 3Q26 primarily reflected the absence of $5.8 million in business related operational charges in 2Q26. Income Tax Expense was $15.2 million compared to $15.7 million in 2Q26 and $9.5 million in 3Q25. 3Q26 reflected an anticipated ETR of 22.53% for the year. Loans Held for Investment (EOP) of $8.45 billion compared to $8.30 billion in 2Q26 and $8.12 billion in 3Q25. 3Q26 balances grew $150.9 million or 1.8% sequentially, reflecting increases in Puerto Rico commercial and consumer loans, more than offsetting declines in other categories. Year over year, loans are up 4.1%. New Loan Production of $693.8 million compared to $755.0 million in 2Q26 and $623.9 million in 3Q25. 3Q26 production decreased $61.2 million sequentially, reflecting decreases in Puerto Rico commercial, auto, and residential mortgage, partially offset by increases in U.S. commercial and Puerto Rico consumer loans. Total Investments (EOP) of $2.72 billion compared to $2.70 billion in 2Q26 and $2.94 billion in 3Q25. 3Q26 primarily reflected purchases of $216.1 million of mortgage-backed securities toward the end of the quarter and $21.1 million of securitizations, partially offset by market value adjustments and MBS principal paydowns. Customer Deposits (EOP) of $9.66 billion compared to $9.74 billion in 2Q26 and $9.82 billion in 3Q25. 3Q26 deposits decreased $79.9 million or 0.8% sequentially, reflecting decreases in demand and savings deposits, partially offset by an increase in time deposits. Total Borrowings & Brokered Deposits (EOP) of $926.6 million compared to $795.5 million in 2Q26 and $746.4 million in 3Q25. 3Q26 total borrowings and brokered deposits increased $131.1 million sequentially for liquidity management purposes. Cash & Cash Equivalents (EOP) of $566.8 million compared to $745.7 million in 2Q26 and $740.3 million in 3Q25. 3Q26 cash decreased $178.9 million sequentially primarily due to the above mentioned MBS purchase and loan growth. Capital: CET1 ratio was 14.10% compared to 14.07% in 2Q26 and 14.13% in 3Q25. Tangible Common Equity ratio was 10.34% compared to 10.90% in 2Q26 and 10.55% in 3Q25. Tangible Book Value per share was $29.66 compared to $31.12 in 2Q26 and $28.92 in 3Q25. 3Q26 TBV declined sequentially primarily due to the change in accumulated other comprehensive loss. Conference Call, Financial Supplement & Presentation A conference call to discuss 3Q26 results, outlook and related matters will be held today at 10:00 AM ET. Phone (800) 579-2543 or (785) 424-1789. Conference ID: OFGQ326. The call can also be accessed live on www.ofgbancorp.com with webcast replay shortly thereafter. OFG's Financial Supplement, with full financial tables for the quarter ended September 30, 2026, and the 3Q26 Conference Call Presentation, can be found on the Quarterly Results page on OFG's Investor Relations website at www.ofgbancorp.com. Non-GAAP Financial Measures In addition to our financial information presented in accordance with GAAP, management uses certain "non-GAAP financial measures" within the meaning of SEC Regulation G, to clarify and enhance understanding of past performance and prospects for the future. Please refer to Tables 8-1 and 8-2 in OFG's above-mentioned Financial Supplement for a reconciliation of GAAP to non-GAAP measures and calculations. 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 that may cause actual results to differ materially from those expressed in the forward-looking statements. Factors that might cause such a difference include but are not limited to (i) general business and economic conditions, including changes in interest rates; (ii) cybersecurity breaches; (iii) hurricanes, earthquakes, pandemics, and other natural disasters; and (iv) competition in the financial services industry. For a discussion of such factors and certain risks and uncertainties to which OFG is subject, please refer to OFG's annual report on Form 10-K for the year ended December 31, 2025, as well as its other filings with the U.S. Securities and Exchange Commission. Other than to the extent required by applicable law, including the requirements of applicable securities laws, OFG assumes no obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements. About OFG Bancorp Now in its 62nd year in business, OFG Bancorp is a diversified financial holding company that operates under U.S., Puerto Rico and U.S. Virgin Islands banking laws and regulations. Its three principal subsidiaries, Oriental Bank, Oriental Financial Services and Oriental Insurance, provide a wide range of retail and commercial banking, lending and wealth management products, services, and technology, primarily in Puerto Rico and U.S. Virgin Islands. Our mission is to make progress possible for our customers, employees, shareholders, and the communities we serve. Visit us at www.ofgbancorp.com. View source version on businesswire.com: https://www.businesswire.com/news/home/20261020885739/en/ Contacts Puerto Rico & USVI: Lumarie Vega López ([email protected]) and Victoria Maldonado Rodríguez ([email protected]) at (787) 771-6800 US: Gary Fishman ([email protected]) and Michael Wichman ([email protected]) at (212) 532-3232

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Performance was driven by strong commercial loan growth and disciplined expense management, which more than offset the absence of one-time commercial loan prepayments from the prior quarter. - The 'Digital at the Core' strategy is successfully shifting branch interactions from routine transactions toward relationship building, evidenced by a 24% year-over-year increase in active digital users. - Management attributes the 5% growth in net new retail and commercial customers to the successful adoption of tailored account products like Libre, Elite, and My Biz. - The Puerto Rico economy is described as resilient and stable, supported by historically low unemployment, higher wages, and significant private investment that contradicts local political 'noise'. - Strategic positioning focuses on AI-powered intelligent banking to provide personalized financial insights, which management believes distinguishes the franchise from local competitors. - Commercial loan growth accelerated toward the end of the quarter, reflecting a 'banner year' for middle-market and small business segments in Puerto Rico. - Management expects low single-digit loan growth for the full year 2026, with strong commercial pipelines expected to more than offset an anticipated decline in the auto segment. - Net interest margin is projected to remain near 5.25% for the balance of the year, assuming one additional 25 basis point rate hike in December. - Provision for credit losses is expected to move into the $18 million to $20 million range, reflecting increased loan volume and typical seasonal normalization in auto and consumer credit metrics. - The bank remains on track to maintain non-interest expenses at approximately $385 million for the year, excluding specific prior-quarter operational charges. - Capital allocation will prioritize organic balance sheet growth, followed by steady share repurchases and dividends, with $180 million remaining in the current buyback authorization. - Non-interest expenses decreased by $6.6 million primarily due to the absence of a $5.8 million business operational charge incurred in the second quarter. - Net interest income was impacted by the absence of $4.1 million in interest from commercial loans that were prepaid in full during the previous period. - Management is closely monitoring potential headwinds from higher energy costs, inflationary pressures, and the impact of elevated borrowing costs on borrower resilience. - A $500 million government deposit shift to wealth management earlier in the year continues to impact year-over-year deposit growth comparisons. - Management clarified that despite negative local media reports, economic data shows no deterioration, with unemployment remaining in the 5% range and wages at historic highs. - The discrepancy is attributed to political discussions rather than underlying economic fundamentals or consumer behavior. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Management expressed surprise at the continued strength of auto originations, which have been better than expected despite a generally softer market. - While not providing formal 2027 guidance, management expects auto originations to remain stable rather than declining at a faster pace than seen in 2026. - Increased competition and rate sensitivity have led to a shift in the funding mix toward time deposits as clients seek higher yields. - Management noted that while some liquidity is moving to wealth management, they remain focused on deepening primary relationships to stabilize core balances. - Government deposits are tied to three-month T-bill rates, leading to repricing that impacted the third quarter and will continue into the fourth quarter. - This dynamic is distinct from core retail and commercial deposits, which are less sensitive to immediate market rate fluctuations. - The uptick in auto delinquency is characterized as 'seasonal normalization' rather than credit deterioration, following a first half that benefited from tax refunds. - Commercial asset quality was highlighted as a major strength, with non-performing loan rates and criticized exposures declining materially.

OFG Bancorp (OFG) came out with quarterly earnings of $1.33 per share, beating the Zacks Consensus Estimate of $1.25 per share. This compares to earnings of $1.16 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +6.40%. A quarter ago, it was expected that this financial holding company would post earnings of $1.18 per share when it actually produced earnings of $1.39, delivering a surprise of +17.8%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. OFG, which belongs to the Zacks Banks - Northeast industry, posted revenues of $185.75 million for the quarter ended September 2026, missing the Zacks Consensus Estimate by 1.11%. This compares to year-ago revenues of $183.98 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. OFG shares have added about 29.2% since the beginning of the year versus the S&P 500's gain of 12.7%. While OFG has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for OFG was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.23 on $189.38 million in revenues for the coming quarter and $5.06 on $752.21 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Northeast is currently in the top 29% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Valley National (VLY), another stock in the same industry, has yet to report results for the quarter ended September 2026. The results are expected to be released on October 22. This holding company for Valley National Bank is expected to post quarterly earnings of $0.33 per share in its upcoming report, which represents a year-over-year change of +17.9%. The consensus EPS estimate for the quarter has been revised 0.8% lower over the last 30 days to the current level. Valley National's revenues are expected to be $577.6 million, up 12.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report OFG Bancorp (OFG) : Free Stock Analysis Report Valley National Bancorp (VLY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

- Interested in OFG Bancorp? Here are five stocks we like better. - Strong quarterly performance: OFG Bancorp reported third-quarter EPS of $1.33, up 15% year over year, supported by commercial loan growth, lower operating expenses and resilient credit quality. Core revenue declined sequentially primarily because of the absence of prior-quarter commercial loan prepayment income. - Growth and margin outlook: Period-end loans rose 1.8% sequentially and 4.1% year over year, driven by Puerto Rico commercial and consumer lending. Management expects low-single-digit loan growth for 2026 and net interest margin near 5.25% through year-end as higher asset yields are offset by rising funding costs. - Digital expansion and solid credit position: Active digital users grew 24%, while new retail and commercial customers increased 5% year over year. Despite higher credit-loss provisions and seasonal delinquencies, net charge-offs and nonperforming loans improved, and OFG maintained a 14.10% CET1 ratio while repurchasing $13.5 million of stock. OFG Bancorp (NYSE:OFG) reported third-quarter 2026 earnings per share of $1.33, up 15% from a year earlier, as commercial loan growth, expense discipline and stable credit performance supported results. Chief Executive Officer and Chairman José Rafael Fernández said the company delivered "excellent performance across the board" while continuing to invest in its digital banking strategy. Core revenue totaled $186 million, down $4.5 million from the second quarter, according to Chief Financial Officer Maritza Arizmendi. The decline primarily reflected the absence of $4.1 million associated with commercial loans prepaid in full during the prior quarter, as well as lower mortgage banking revenue and the absence of annual insurance and annuity fees. Those factors were partly offset by higher loan and cash balances, higher yields on cash and investments, and higher banking service revenue. → The AI Sell-Off Continues—These 3 Stocks Keep Raising Guidance Anyway Non-interest expense fell $6.6 million sequentially to $96 million, mainly because the second quarter included $5.8 million in business operational charges. OFG reported a 52% efficiency ratio, return on average assets of 1.86%, and return on average tangible common equity of 17%. Average loan balances increased $37 million during the quarter to $8.3 billion, while period-end loan balances rose $151 million, or 1.8%. Puerto Rico commercial and consumer lending growth more than offset declines in auto, residential mortgage and U.S. commercial loans. Year over year, loans were up 4.1%. → Tesla's Roadster Reveal Hints at 2 Much Bigger Moves Fernández said OFG continues to see a strong commercial lending pipeline, particularly in Puerto Rico's middle-market and small-business segments. The company expects low-single-digit loan growth for the full year, with commercial growth more than offsetting an anticipated decline in auto loans. Management said auto originations have been lower but have held up better than expected. Fernández said the company expects auto lending activity to remain relatively stable entering 2027, though new-car sales and auto originations could be modestly lower. → Luxury's Middle Market Is Cracking—These 3 Stocks Could Win Average core deposits increased $15 million to $9.7 billion, though end-of-period deposits declined $80 million, or 0.8%, as demand and savings balances fell and time deposits increased. Excluding $500 million of government deposits transferred to wealth management in the first quarter, deposits were up 3.5% from a year earlier. Management attributed some deposit movement to seasonality and greater rate sensitivity among higher-balance customers. Arizmendi said government deposit repricing, with balances tied to three-month Treasury bill rates, also affected funding costs and will continue to influence fourth-quarter results. Net interest margin was 5.23% in the third quarter. Loan yield declined 22 basis points to 7.68%, largely because the previous quarter had benefited from commercial loan prepayments. Core deposit costs increased 5 basis points to 1.34%, reflecting greater demand for time deposits and higher costs on certain government deposits. Arizmendi said the Federal Reserve's September 25-basis-point rate increase had limited impact during the quarter because only about $550 million of OFG's $1.7 billion variable-rate commercial portfolio repriced late in the period. The company expects net interest margin to remain near 5.25% for the remainder of 2026, based on an assumption of one additional 25-basis-point rate increase in December. Management said higher asset yields are expected to be largely offset by rising liability costs. The company also said commercial loan originations late in the quarter were priced at yields similar to the existing portfolio. OFG said its "Digital at the Core" strategy is focused on account products, omni-channel banking technology and artificial intelligence-powered customer insights. The company's Libre, Elite and My Biz offerings are intended to serve mass-market, mass-affluent and small-business customers, respectively. - Net new retail and commercial customers increased 5% year over year. - Active digital users increased 24%. - Virtual teller use rose 11%. - Libre accounts grew 7%, while digitally opened Libre accounts increased 18%. - My Biz commercial accounts grew 6%, while accounts opened digitally or by phone increased 16%. Fernández said OFG delivered more than 1.5 million customized AI-enabled Smart Banking Insights monthly to customers through September, with more than 90% positive feedback. He described alerts that project expected expenses and income based on a customer's account activity or flag potential duplicate bill payments. Management said the tools are designed to support customer acquisition and deepen existing relationships. Provision for credit losses rose $5.1 million from the second quarter to $18.1 million, reflecting increased loan volume and seasonal auto delinquency trends. Chief Risk Officer César Ortiz said the provision was slightly below the company's prior expectation because auto and consumer credit metrics were better than anticipated. Early and total delinquency rates increased sequentially to 2.65% and 3.91%, respectively, but declined from a year earlier. Net charge-offs of 0.70% and nonperforming loans of 0.74% both declined from the second quarter and the third quarter of 2025. Commercial nonperforming loans improved to 0.68% from 0.90% in the prior quarter. Ortiz said auto delinquencies increased modestly on a seasonal basis, while auto charge-offs improved year over year and collateral liquidation values remained stable. He said OFG expects the typical pattern of higher retail credit risk in the second half of the year followed by improvement in the first quarter. Capital ratios remained above management's stated levels despite higher mark-to-market adjustments in the securities portfolio. OFG ended the quarter with a 14.10% common equity tier 1 ratio, a 10.34% tangible common equity ratio and tangible book value per share of $29.66. The company repurchased $13.5 million of common stock during the quarter and had $180 million remaining under its repurchase authorization. Fernández said Puerto Rico's economy remains stable, citing low unemployment, higher wages, private investment, infrastructure projects and manufacturing expansion. Management said it remains attentive to inflation, elevated energy costs, borrowing costs and broader geopolitical developments. OFG Bancorp is a financial holding company headquartered in San Juan, Puerto Rico. Through its principal subsidiary, Oriental Bank, the company provides banking and financial services to individuals, businesses and institutions in Puerto Rico and the U.S. Virgin Islands. Oriental Bank offers deposit accounts, consumer and commercial loans, residential mortgage lending, auto financing, credit cards and other retail banking products. The company also provides wealth management, trust, investment and insurance-related services through its affiliated businesses. Founded in 1964, OFG Bancorp has expanded its presence in Puerto Rico through organic growth and acquisitions, including the purchase of Scotiabank's Puerto Rico operations in 2019. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "OFG Bancorp Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

This article first appeared on GuruFocus. Release Date: October 21, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - EPS increased 15% year over year, driven by strong commercial loan growth and disciplined expense management. - Digital strategy is delivering results: 5% growth in net new retail and commercial customers, 24% growth in active digital users, and 11% growth in virtual teller use. - Commercial loan growth was strong, with end-of-period balances up $151 million, and the commercial pipeline remains robust. - Credit quality improved: commercial non-performing loan rate declined to 0.68% from 0.90% in the prior quarter, and net charge-offs and nonperforming loan rates declined both sequentially and year-over-year. - Capital remains strong with a CET1 ratio of 14.10% and tangible book value of $29.66 per share; the company resumed stock repurchases, buying back $13.5 million of shares. - Core revenues decreased $4.5 million to $186 million, reflecting the absence of $4.1 million from prepaid commercial loans in the prior quarter and lower mortgage banking revenues. - Net interest margin is expected to remain near 5.25%, with higher asset yields largely offset by increased liability costs; deposit costs increased 5 basis points to 1.34%. - Deposit competition is intensifying, and higher-rate-sensitive clients are migrating to time deposits, which could pressure funding costs. - Provision for credit losses increased to $18.1 million, up $5.1 million from the prior quarter, due to loan volume growth and seasonal auto delinquency adjustments. - Auto loan originations are expected to be steady to slightly lower in 2027, and the company remains cautious about inflationary pressures, high operating costs, and elevated energy expenses. - Warning! GuruFocus has detected 9 Warning Sign with OFG. - Is OFG fairly valued? Test your thesis with our free DCF calculator. Q: With local news painting a more cautious picture of Puerto Rico's economy, what are you actually seeing on the ground? A: CEO Jose Rafael Fernandez said the data does not support the negative headlines, which he attributed largely to political noise. Unemployment remains in the 5% range, wages are at historically high levels, and onshoring and private investment are flowing into the economy. He sees a steady consumer and no indications of a slowdown, with businesses continuing to invest and feeling optimistic about growth. Q: Net interest margin guidance looks more tempered than in July. What incremental headwinds emerged on loan pricing and deposit competition? A: CFO Maritza Erizmendi said the bank is tracking near the lower end of its range, driven mainly by the funding mix. About $400 million of government deposits repriced into time deposits at the end of Q2, creating a full-quarter cost impact in Q3, and migration from savings into time deposits ran higher than expected as clients chased higher yields. She also noted one rate hike is now expected in the second half versus none previously, with Treasury yields at their highs. Q: Can you clarify the government deposit dynamics and whether the migration of excess funds into time deposits will stabilize? A: Erizmendi explained that of the roughly $1.2 billion government deposit relationship, about $500 million moved to the broker-dealer at the start of the year, and two time deposits were placed at the end of Q2, one maturing at the end of Q3. That maturity will reprice in Q4 because these deposits are tied to three-month T-bills. The CEO stressed these government flows are separate from core retail and commercial client funding, which has completely different dynamics and is not necessarily tied to market rates. Q: Commercial loan growth was very strong and came late in the quarter. What does the pipeline look like, and could you exceed low single-digit growth for the year? A: Fernandez said he is very confident in low single-digit loan growth for the full year and that the team is working hard to do better. The strong commercial pipeline gives confidence there is a chance to outperform, with good opportunities to win new relationships on both the lending and funding sides. He called it a banner year for commercial, middle market and small business lending in Puerto Rico. Q: How should we think about the December rate hike's impact on NIM into early next year, past the unique public fund repricing? A: Erizmendi said 2027 guidance will be updated at year-end, but the December hike should look similar to the September one, which had limited impact. The more elastic assets are cash and roughly $500 million to $550 million of the commercial portfolio tied to prime, with the rest repricing gradually over the following quarter. She therefore expects little NIM impact in Q4. Q: You restarted buybacks this quarter. What is the pace of capital deployment going forward? A: Fernandez said the priority is funding loan and balance sheet growth first, with excess capital returned through dividends and buybacks. He expects the bank to be pretty steady on repurchases and potentially more active when market fluctuations create opportunities. Roughly $180 million remains on the buyback authorization, which he described as ample room to go into the market. Q: Auto delinquencies ticked up both linked-quarter and year-over-year. Is this still normal seasonality, and what is the expected trajectory? A: Chief Risk Officer Cesar Ortiz confirmed the pattern is exactly seasonal: credit improves in Q1 and builds toward Q4, and he expects that trend again this year. He noted continued customer resiliency and a well-behaving portfolio, and said the combination of a healthy economy and strong credit performance gives comfort. The CEO added that higher rates, inflation and energy costs are being monitored, but Puerto Rico's economy is in a much different position than in years past. >Q: Demand and savings deposits declined quarter over quarter. Is deposit competition increasing, and what is driving the mix shift? A: Fernandez pointed to seasonality, with first-half liquidity being put to work in the second half on both the commercial and retail sides. He acknowledged real deposit competition and growing rate sensitivity among higher-balance individual clients seeking alternatives, some of which flows into the bank's wealth management business. He remains confident in growing deposit balances and relationships with commercial and retail customers. Q: How do the AI-powered personalized insights work, and how are they helping the customer experience? A: Fernandez described mobile and online insights showing expected expenses and income based on each client's own account history, plus alerts such as a bill paid twice in the same month. He said no bank in Puerto Rico has offered this level of simple, accessible personalization, and feedback has been strongly positive. The tools are translating into 5% year-over-year growth in retail and commercial customers and more opportunities to deepen relationships and become customers' primary bank. Q: What are the new loan yields on the commercial production originated late in the quarter? A: Fernandez said yields on the new Puerto Rico commercial production are similar to portfolio yields and that investors should use that as guidance. Q: With auto originations holding up better than feared, what is the outlook for auto and commercial lending into 2027? A: Fernandez said auto originations came in better than expected in 2026 despite a softer market. For 2027 he expects steady to slightly lower new car sales and lower market-wide auto originations, but no faster decline than in 2026. Commercial, by contrast, offers very good growth opportunities, and he expects to end the year with strong originations. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Puerto Rican financial services company OFG Bancorp (NYSE:OFG) will be reporting earnings this Wednesday before the bell. Here's what you need to know. OFG Bancorp beat analysts' revenue expectations last quarter, reporting revenues of $190.3 million, up 4.4% year on year. It was an exceptional quarter for the company, with a beat of analysts' EPS estimates and an impressive beat of analysts' net interest income estimates. Is OFG Bancorp a buy or sell going into earnings? Read our full analysis here, it's free for active Edge members. This quarter, the market is expecting OFG Bancorp's revenue to grow 1.7% year on year, slowing from the 5.6% increase it recorded in the same quarter last year. Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. OFG Bancorp has missed Wall Street's revenue estimates multiple times over the last two years. Looking at OFG Bancorp's peers in the regional banks segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Washington Trust Bancorp delivered year-on-year revenue growth of 15%, beating analysts' expectations by 4.1%, and Independent Bank reported revenues up 7.4%, topping estimates by 0.6%. Independent Bank traded up 3.6% following the results. Read our full analysis of Washington Trust Bancorp's results here and Independent Bank's results here. Over the past year, investors have repeatedly shifted their focus from one macro narrative to another (AI disruption and AI capex spending to geopolitics, interest rates, and the broader health of the economy). While some of the regional banks stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 5.7% on average over the last month. OFG Bancorp's stock price was unchanged during the same time and is heading into earnings with an average analyst price target of $56.75 (compared to the current share price of $52.17). ALSO WORTH WATCHING: Nvidia's Quiet Partner. Nvidia's chips cost a hundred grand. The connectors that make them work cost even more. One company makes them all. Every AI server needs specialized infrastructure the chip companies don't make. High-speed cables. Power connectors. Thermal sensors. This 90-year-old company built a monopoly on it. The AI boom just started. This stock is still flying under the radar. Claim The Stock Ticker Here for FREE.

OFG Bancorp (OFG) drew fresh attention on 21 September after Zacks raised its current year earnings consensus estimate by 5.6% over the past two months, while highlighting the bank’s 2.7% dividend yield. Short-term sentiment around OFG Bancorp has cooled a bit, with the share price declining 2.3% over the past week even after the Zacks earnings revision. Yet the roughly 26.0% year to date share price return and 5 year total shareholder return of about 132.5% point to momentum that has built over time rather than faded. Scan for other income focused banks showing similar momentum to OFG Bancorp using our hand picked 7 dividend fortresses After a strong multi year run and a recent pullback, the question around OFG Bancorp now is simple. Is the meaningful upside still ahead, or has most of the easy money already been made at around $51.70? Against OFG Bancorp's last close at $51.70, the most followed valuation narrative anchors fair value at about $55, suggesting some remaining upside while still putting earnings and risk under a fairly tight lens. Strong adoption and expansion of digital banking channels are driving increased customer engagement and facilitating operational efficiency. This should reduce expenses over time and improve net margins, particularly as future investments deliver further cost benefits and fee-based revenue growth. Investments in a digital-first strategy and streamlined processes are expected to yield long-term operational efficiencies. These developments are gradually improving the efficiency ratio and supporting higher profitability, even as competition and regulatory costs remain elevated. See why 2 investors see OFG Bancorp as 6% undervalued. Result: Fair Value of $55 (UNDERVALUED) Still, OFG Bancorp’s heavy reliance on Puerto Rico and higher risk auto loan exposure could quickly weaken credit trends and challenge that 6% undervalued narrative. Find out about the key risks to this OFG Bancorp narrative. Mixed messages around OFG Bancorp often create more heat than light, so move quickly and weigh the full picture for yourself by checking the 3 key rewards and 3 important warning signs Do not stop the work at OFG Bancorp. Put that research mindset to work across a wider watchlist so you can spot the next opportunity early. Target resilient compounding by scanning a 30 resilient stocks with low risk scores that filters for businesses with sturdier risk profiles and fewer financial red flags. Hunt for tomorrow's potential market leaders by checking a curated 16 high quality undiscovered gems with strong fundamentals that have not hit the spotlight yet. Anchor your portfolio with strength by reviewing a list of solid balance sheet and fundamentals (23 results) that focuses on cleaner leverage and healthier financial foundations. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include OFG. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]