OFG Bancorp Reports Steady 1Q26 Results Amid Deposit Shifts — OFG Bancorp

Event summary

EPS diluted of $1.26 in 1Q26, down slightly from $1.27 in 4Q25 but up from $1.00 in 1Q25.
Total core revenues of $185.8 million, stable sequentially and up from $178.3 million year-over-year.
$44.5 million in common share repurchases and a 17% dividend increase announced.
Customer deposits decreased by $263.4 million sequentially due to a $500 million government deposit transfer.
Net charge-offs improved to $21.4 million (1.05% of average loans) from $26.9 million (1.32%) in 4Q25.

The big picture

OFG Bancorp's steady 1Q26 performance reflects disciplined execution in a stable Puerto Rican economy supported by federal investment. The bank's focus on digital banking with personal connections, along with proactive balance sheet management, positions it to capitalize on manufacturing and onshoring trends. However, the strategic anomaly of shifting deposit dynamics—particularly the $500 million government deposit transfer—bears watching as OFG optimizes its funding mix.

What we're watching

Deposit Strategy: Whether OFG can sustain deposit growth amid reduced reliance on wholesale funding and government deposits.
Loan Growth: The pace at which commercial loan expansion offsets declines in residential mortgage, auto, and consumer loans.
Economic Sensitivity: How Puerto Rico's economic stability and federal reconstruction funds impact OFG's long-term growth prospects.