OFG Bancorp (OFG) Stock Trades Up, Here Is Why

OFG Bancorp’s fourth quarter results met Wall Street’s revenue expectations, but the market responded negatively, reflecting concerns around credit costs and margin compression. Management attributed the quarter’s performance to growth in commercial lending, robust acceptance of digital deposit products like Libre and Elite, and sound asset quality despite elevated provision for credit losses. CEO José Rafael Fernández highlighted, “Earnings per share diluted were up 17% year over year on 2% growth in total core revenues,” crediting disciplined operations and a favorable tax benefit. The company also noted continued share repurchases and capital growth, though the quarter included nonrecurring technology amortization costs and higher professional service expenses linked to efficiency initiatives.

OFG Bancorp (OFG) Q4 CY2025 Highlights:

• Revenue: $185.4 million vs analyst estimates of $184.5 million (1.9% year-on-year growth, in line)
• Adjusted EPS: $1.27 vs analyst estimates of $1.15 (10.4% beat)
• Adjusted Operating Income: $47.42 million vs analyst estimates of $87.1 million (25.6% margin, 45.6% miss)
• Market Capitalization: $1.63 billion

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From OFG Bancorp’s Q4 Earnings Call

• Kelly Ann Motta (KBW): Asked about elevated provisions for credit losses and specifics behind the Puerto Rico charge-offs. Chief Risk Officer Cesar Ortiz-Marcano explained the charge-offs resulted from a sale of nonperforming loans and a single telecommunications loan issue, both described as isolated events.

• Kelly Ann Motta (KBW): Inquired on what will drive low single-digit loan growth. CEO Fernández said auto lending is stabilizing, commercial loans should grow 5-6%, and consumer segments will see slight increases, while mortgage remains muted.

• Brett Rabatin (Hovde Group): Sought clarification on loan yield decreases and margin guidance. CFO Maritza Arizmendi attributed lower yields to Fed rate cuts, improved credit quality in auto originations, and anticipated funding mix changes due to shifts in government deposits.

• Timur Braziler (Wells Fargo): Asked about the competitive landscape for deposits and whether digital products have forced competitors to increase rates. CEO Fernández replied there has been no pricing response, as Libre is noninterest-bearing and Elite pays modest rates, with competition more focused on targeted CDs.

• Manuel Navas (Piper Sandler): Queried whether digital accounts are attracting younger clients. CEO Fernández confirmed 40% of Libre accounts are held by clients under age 29, supporting long-term franchise building.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be monitoring (1) the pace of commercial loan and core deposit growth, especially as digital and omnichannel offerings mature; (2) expense trends, including whether technology investments translate into meaningful efficiency gains; and (3) changes in net interest margin as funding mix shifts and rate cuts play out. Additionally, credit quality trends and competitive dynamics in Puerto Rico’s banking sector will be closely watched for signs of sustained differentiation.

OFG Bancorp currently trades at $38.24, down from $42.58 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).

Puerto Rican financial services company OFG Bancorp met Wall Streets revenue expectations in Q4 CY2025, with sales up 1.9% year on year to $185.4 million. Its non-GAAP profit of $1.27 per share was 10.4% above analysts’ consensus estimates.

OFG Bancorp (OFG) Q4 CY2025 Highlights:

• Revenue: $185.4 million vs analyst estimates of $184.5 million (1.9% year-on-year growth, in line)
• Adjusted EPS: $1.27 vs analyst estimates of $1.15 (10.4% beat)
• Adjusted Operating Income: $47.42 million vs analyst estimates of $87.1 million (25.6% margin, 45.6% miss)
• Market Capitalization: $1.71 billion

StockStory’s Take

OFG Bancorp’s fourth quarter results met Wall Street’s revenue expectations, but the market responded negatively, reflecting concerns around credit costs and margin compression. Management attributed the quarter’s performance to growth in commercial lending, robust acceptance of digital deposit products like Libre and Elite, and sound asset quality despite elevated provision for credit losses. CEO José Rafael Fernández highlighted, “Earnings per share diluted were up 17% year over year on 2% growth in total core revenues,” crediting disciplined operations and a favorable tax benefit. The company also noted continued share repurchases and capital growth, though the quarter included nonrecurring technology amortization costs and higher professional service expenses linked to efficiency initiatives.

Looking ahead, OFG Bancorp’s guidance centers on further loan and deposit growth, continued investment in digital banking, and managing funding costs amid anticipated rate cuts. Management believes that expense reductions from technology investments will become more visible in 2027 and 2028, while the current year will see flat non-interest expenses. CEO Fernández emphasized, “In 2026, our focus is going to be much more on commercial,” highlighting opportunities in Puerto Rico’s resilient economy and ongoing efforts to deepen client relationships. However, the team remains cautious about competitive deposit pricing and the impact of broader economic and political uncertainties.

Key Insights from Management’s Remarks

Management identified digital product momentum, robust commercial lending, and ongoing efficiency efforts as central to fourth quarter outcomes, while also acknowledging elevated one-off credit and technology expenses.

• Digital deposit growth: The Libre and Elite accounts, targeting mass market and affluent customers respectively, continued to attract new deposits, with 75% of Libre accounts opened by new clients and 40% of these under age 29. Management attributes this to the digital-first onboarding experience and enhanced value propositions beyond rate.

• Commercial lending expansion: Commercial loans now comprise 43% of the overall loan book, driven by 5% growth in commercial customers in 2025 and increased adoption of the Oriental Biz platform. Management intends to further leverage technology for small and mid-sized business banking.

• Technology investments and expense control: OFG launched an omnichannel banking platform and intelligent banking features, aiming to improve customer service and deliver process efficiencies. While non-interest expenses rose due to advisory fees and upfront technology amortization, management expects these investments to support long-term cost reductions.

• Credit performance and portfolio mix: Credit quality remained within historical ranges, though provision for credit losses rose, partly due to a specific Puerto Rico telecommunications loan and seasonal increases in delinquencies. Asset quality is being managed proactively through sales of nonperforming loans and tighter underwriting standards, especially in auto lending.

• Capital deployment: OFG repurchased $40 million in shares during the quarter, and management reiterated its intent to prioritize buybacks and dividends as capital continues to build, particularly given current valuation multiples relative to peers.

Drivers of Future Performance

OFG Bancorp’s outlook is shaped by steady economic conditions in Puerto Rico, a digital-first strategy, and the need to adapt to changing funding costs and competitive pressures.

• Commercial and digital banking growth: Management expects loan growth in low single digits, with commercial lending anticipated to rise 5-6% and digital offerings driving new customer acquisition. Retail and commercial deposits are projected to increase, supported by ongoing enhancements to digital account platforms.

• Expense management and efficiency gains: While non-interest expenses are forecast to remain flat in 2026, management anticipates material cost savings from technology and process improvements to emerge in subsequent years. The company is actively reducing back-office headcount and redeploying talent to client-facing roles, leveraging automation and robotics.

• Interest rate and funding challenges: The exit of $500 million in government deposits and their replacement with higher-cost wholesale funding will pressure net interest margin, which management expects to range between 4.95% and 5.05% in 2026. Further rate cuts are expected to impact asset yields, though core deposit growth may partially offset higher funding costs.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be monitoring (1) the pace of commercial loan and core deposit growth, especially as digital and omnichannel offerings mature; (2) expense trends, including whether technology investments translate into meaningful efficiency gains; and (3) changes in net interest margin as funding mix shifts and rate cuts play out. Additionally, credit quality trends and competitive dynamics in Puerto Rico’s banking sector will be closely watched for signs of sustained differentiation.

OFG Bancorp currently trades at $38.98, down from $42.58 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).

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What Happened?

Shares of puerto Rican financial services company OFG Bancorp fell 8.9% in the afternoon session after the company reported mixed fourth-quarter 2025 results, where a beat on earnings per share was overshadowed by misses on key profitability and efficiency metrics. 

While the bank's earnings per share of $1.27 beat analyst estimates and its revenue of $185.4 million was in line, investors appeared to focus on the weaker underlying details. The company's net interest income, a core measure of bank profitability from lending, came in slightly below expectations. More significantly, OFG's efficiency ratio was 56.7%, missing the consensus estimate by 4.17 percentage points. A higher efficiency ratio indicates that a bank's expenses are consuming a larger portion of its revenue, signaling weaker operational performance than anticipated and weighing on investor sentiment.

What Is The Market Telling Us

OFG Bancorp’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 3 months ago when the stock dropped 5.1% on the news that the company reported third-quarter results that fell short of Wall Street's expectations. The Puerto Rican financial services company posted revenue of $184 million, missing analyst estimates of $187 million, despite growing 5.3% year-over-year. Additionally, its GAAP earnings per share of $1.16 was slightly below the consensus forecast of $1.17. The miss was also reflected in key banking metrics, with Net Interest Income and Net Interest Margin both coming in under expectations. While the company did beat estimates for tangible book value per share, investors appeared to focus on the shortfalls in the top and bottom lines, which pointed to a weaker quarter overall.

OFG Bancorp is down 4.2% since the beginning of the year, and at $39.28 per share, it is trading 13.6% below its 52-week high of $45.47 from July 2025. Investors who bought $1,000 worth of OFG Bancorp’s shares 5 years ago would now be looking at an investment worth $2,052.

Puerto Rican financial services company OFG Bancorp met Wall Streets revenue expectations in Q4 CY2025, with sales up 1.9% year on year to $185.4 million. Its GAAP profit of $1.27 per share was 10.4% above analysts’ consensus estimates.

OFG Bancorp (OFG) Q4 CY2025 Highlights:

• Net Interest Income: $152.7 million vs analyst estimates of $153.7 million (2.4% year-on-year growth, 0.6% miss)
• Net Interest Margin: 5.1% vs analyst estimates of 5.2% (4.4 basis point miss)
• Revenue: $185.4 million vs analyst estimates of $184.5 million (1.9% year-on-year growth, in line)
• Efficiency Ratio: 56.7% vs analyst estimates of 52.5% (417 basis point miss)
• EPS (GAAP): $1.27 vs analyst estimates of $1.15 (10.4% beat)
• Tangible Book Value per Share: $29.96 vs analyst estimates of $29.65 (17.8% year-on-year growth, 1.1% beat)
• Market Capitalization: $1.87 billion

Company Overview

Originally founded in 1964 as a federal savings and loan institution, OFG Bancorp provides banking and financial services including commercial and consumer lending, wealth management, insurance, and trust services primarily in Puerto Rico and the U.S. Virgin Islands.

Sales Growth

Net interest income and and fee-based revenue are the two pillars supporting bank earnings. The former captures profit from the gap between lending rates and deposit costs, while the latter encompasses charges for banking services, credit products, wealth management, and trading activities. Regrettably, OFG Bancorp’s revenue grew at a tepid 7% compounded annual growth rate over the last five years. This fell short of our benchmark for the banking sector and is a rough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. OFG Bancorp’s recent performance shows its demand has slowed as its annualized revenue growth of 3.4% over the last two years was below its five-year trend.

This quarter, OFG Bancorp grew its revenue by 1.9% year on year, and its $185.4 million of revenue was in line with Wall Street’s estimates.

Net interest income made up 80.7% of the company’s total revenue during the last five years, meaning OFG Bancorp barely relies on non-interest income to drive its overall growth.

Net interest income commands greater market attention due to its reliability and consistency, whereas non-interest income is often seen as lower-quality revenue that lacks the same dependable characteristics.

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Tangible Book Value Per Share (TBVPS)

Banks operate as balance sheet businesses, with profits generated through borrowing and lending activities. Valuations reflect this reality, emphasizing balance sheet strength and long-term book value compounding ability.

When analyzing banks, tangible book value per share (TBVPS) takes precedence over many other metrics. This measure isolates genuine per-share value by removing intangible assets of debatable liquidation worth. On the other hand, EPS is often distorted by mergers and flexible loan loss accounting. TBVPS provides clearer performance insights.

OFG Bancorp’s TBVPS grew at an incredible 12.3% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 13.8% annually over the last two years from $23.13 to $29.96 per share.

Over the next 12 months, Consensus estimates call for OFG Bancorp’s TBVPS to grow by 8.9% to $32.64, paltry growth rate.

Key Takeaways from OFG Bancorp’s Q4 Results

It was good to see OFG Bancorp beat analysts’ EPS expectations this quarter. We were also happy its tangible book value per share narrowly outperformed Wall Street’s estimates. On the other hand, its net interest income and net interest margin slightly missed. Overall, this print still had some key positives. The stock remained flat at $42.58 immediately following the results.

Is OFG Bancorp an attractive investment opportunity at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).

Puerto Rican financial services company OFG Bancorp will be reporting results tomorrow before the bell. Here’s what you need to know.

OFG Bancorp missed analysts’ revenue expectations by 1.6% last quarter, reporting revenues of $184 million, up 5.6% year on year. It was a slower quarter for the company, with a miss of analysts’ revenue estimates and a miss of analysts’ EPS 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, analysts are expecting OFG Bancorp’s revenue to grow 1.4% year on year to $184.5 million, slowing from the 3.6% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.15 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. OFG Bancorp has missed Wall Street’s revenue estimates three times over the last two years.

Looking at OFG Bancorp’s peers in the regional banks segment, some have already reported their Q4 results, giving us a hint as to what we can expect. ServisFirst Bancshares delivered year-on-year revenue growth of 22.9%, beating analysts’ expectations by 6.8%, and Simmons First National reported revenues up 17.2%, topping estimates by 5.3%.

Read our full analysis of ServisFirst Bancshares’s results here and Simmons First National’s results here.

Investors in the regional banks segment have had steady hands going into earnings, with share prices flat over the last month. OFG Bancorp is down 2.7% during the same time and is heading into earnings with an average analyst price target of $47.60 (compared to the current share price of $40.97).