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1. Company Snapshot

1.a. Company Description

OFG Bancorp, a financial holding company, provides a range of banking and financial services.It operates through three segments: Banking, Wealth Management, and Treasury.The company offers checking and savings accounts, as well as time deposit products; commercial, consumer, auto, and mortgage lending services; financial planning and insurance services; and corporate and individual trust, and retirement services.


It also provides securities brokerage and investment advisory services, including various investment alternatives, such as tax-advantaged fixed income securities, mutual funds, stocks, and bonds to retail and institutional clients; and separately-managed accounts and mutual fund asset allocation programs.In addition, the company engages in the insurance agency and reinsurance businesses; administration and servicing of retirement plans; various treasury-related functions with an investment portfolio consisting of mortgage-backed securities, obligations of U.S. government sponsored agencies, and U.S. Treasury securities and money market instruments; and management and participation in public offerings and private placements of debt and equity securities.Further, it offers money management and investment banking services; and engages in the asset/liability management activities, such as purchases and sales of investment securities, interest rate risk management, derivatives, and borrowings.


The company operates through a network of 50 branches in Puerto Rico and 2 branches in USVI.OFG Bancorp was founded in 1964 and is headquartered in San Juan, Puerto Rico.

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1.b. Last Insights on OFG

OFG Bancorp's recent performance faced challenges due to margin pressure concerns. The company's Q3 2025 earnings call highlighted the impact of "sticky deposit costs" and "relatively rate-sensitive loan yields" on margins in a declining interest rate environment. Additionally, risks to loan growth include worsening economic activity and sharply rising home prices. Despite a 5.6% increase in total core revenues, EPS growth was modest at 16% year-over-year. The company's dividend stock status was also questioned by investors.

1.c. Company Highlights

2. OFG Bancorp's Q3 Earnings: A Strong Performance

OFG Bancorp reported a robust third quarter, with earnings per share (EPS) of $1.16, beating estimates of $1.15. The bank's core revenues totaled $184 million, driven by a solid performance across key areas, including a 5.6% increase in total core revenue year over year. The net interest margin (NIM) was 5.32% for the nine months, in line with the bank's target range of 5.3% to 5.4% for the year. The bank's efficiency ratio was 52%, indicating a good control over expenses.

Publication Date: Oct -28

📋 Highlights
  • Earnings Growth:: Earnings per share increased 16% YoY to $1.16, driven by a 5.6% rise in core revenue to $184 million.
  • Loan Expansion:: Total loans grew 5% YoY ($8.1B) with a 5-6% annual growth target, though Q3 saw a $63M sequential decline due to commercial line repayments.
  • Efficiency & Capital:: Efficiency ratio improved to 52%, ROE at 16.39%, and $20.4M in share repurchases, reflecting strong capital management.
  • Digital Adoption:: Nearly all retail transactions shifted to digital channels, with growth in digital enrollment and virtual teller usage.
  • Credit Metrics:: Provision for credit losses rose to $28.3M (up from $13.5M), while net charge-offs increased to $20M (1% of loans), reflecting cautious credit risk management.

Loan Growth and Credit Quality

The bank's loan portfolio continued to grow, with average loan balances increasing by 2% from the second quarter to $8 billion. The loan growth was driven by the bank's strategy to expand its commercial lending business in Puerto Rico. Credit quality remained stable, reflecting the strong economic environment in Puerto Rico. The provision for credit losses was $28.3 million, up from the previous quarter, mainly due to increased loan volume and specific reserves on two commercial loans.

Digital Transformation and Business Outlook

OFG Bancorp's Digital First strategy is making significant strides, with nearly all routine retail customer transactions being made through digital and self-service channels. The bank is gaining strong momentum in both adoption and new accounts. The management is confident about the bank's growth prospects, driven by its customer-centric strategies and a strong economy in Puerto Rico. The bank anticipates annual loan growth in the range of 5% to 6%.

Valuation and Dividend Yield

At the current price, the stock trades at a Price-to-Tangible Book Value (P/TBV) of 1.27, which is slightly above the industry average. The bank's Dividend Yield is 2.94%, which is attractive for income investors. Analysts estimate next year's revenue growth at 1.9%, indicating a moderate growth outlook. The bank's Return on Equity (ROE) is 14.81%, indicating a good profitability.

3. NewsRoom

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Head to Head Comparison: OFG Bancorp (NYSE:OFG) vs. Independent Bank (NASDAQ:INDB)

Nov -27

Source: defenseworld.net

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OFG Bancorp Declares Regular Quarterly Common Stock Dividend

Nov -03

Source: businesswire.com

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OFG Bancorp (OFG) Q3 2025 Earnings Call Transcript

Oct -22

Source: seekingalpha.com

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OFG Bancorp Reports 3Q25 Results

Oct -22

Source: businesswire.com

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Why OFG Bancorp (OFG) is a Great Dividend Stock Right Now

Oct -14

Source: zacks.com

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OFG Bancorp: Loan Growth To Help Earnings Inch Up

Oct -09

Source: seekingalpha.com

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OFG Bancorp to Report 3Q25 Results and Hold Call Wednesday, October 22, 2025

Sep -22

Source: businesswire.com

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OFG Bancorp Reports Record Q2 Results

Jul -17

Source: fool.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.56%)

6. Segments

Banking

Expected Growth: 6.5%

OFG Bancorp's 6.5% growth is driven by strong loan growth, fueled by a robust Puerto Rico economy, and strategic expansion into the US mainland. Additionally, the bank's focus on digital transformation, cost savings initiatives, and a solid capital position have contributed to its growth momentum.

Treasury

Expected Growth: 6.8%

Treasury growth of 6.8% at OFG Bancorp is driven by increasing deposit base, effective asset liability management, and strategic investments in digital banking platforms, resulting in higher fee income and improved operating leverage.

Wealth Management

Expected Growth: 7.2%

Wealth Management growth of 7.2% at OFG Bancorp is driven by increasing demand for investment services, strategic partnerships, and expansion into new markets. Additionally, the segment benefits from a strong brand reputation, experienced financial advisors, and a diversified product portfolio, including brokerage, insurance, and retirement planning services.

7. Detailed Products

Mortgage Loans

OFG Bancorp offers a range of mortgage loan options for individuals and families, including fixed-rate and adjustable-rate loans, government-backed loans, and jumbo loans.

Consumer Loans

OFG Bancorp provides personal loans, auto loans, and credit cards for individuals, as well as lines of credit for small businesses.

Commercial Loans

OFG Bancorp offers commercial loans and lines of credit for businesses, including term loans, construction loans, and asset-based lending.

Deposit Accounts

OFG Bancorp offers a range of deposit accounts, including checking and savings accounts, certificates of deposit (CDs), and individual retirement accounts (IRAs).

Investment Services

OFG Bancorp provides investment services, including brokerage services, investment advice, and wealth management.

Insurance Services

OFG Bancorp offers insurance services, including life insurance, disability insurance, and long-term care insurance.

8. OFG Bancorp's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for OFG Bancorp is medium due to the presence of alternative financial institutions and digital payment platforms.

Bargaining Power Of Customers

The bargaining power of customers is low due to the lack of concentration of buyers and the presence of multiple banking options.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the presence of multiple suppliers and the lack of concentration of suppliers.

Threat Of New Entrants

The threat of new entrants is medium due to the presence of regulatory barriers and the need for significant capital investment to enter the market.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of multiple competitors and the need to differentiate products and services to attract customers.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 14.91%
Debt Cost 5.67%
Equity Weight 85.09%
Equity Cost 9.40%
WACC 8.85%
Leverage 17.52%

11. Quality Control: OFG Bancorp passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
First Financial

A-Score: 7.0/10

Value: 7.3

Growth: 5.4

Quality: 6.0

Yield: 7.0

Momentum: 8.5

Volatility: 8.0

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Peoples Bancorp of North Carolina

A-Score: 7.0/10

Value: 8.0

Growth: 6.6

Quality: 7.2

Yield: 6.0

Momentum: 8.0

Volatility: 6.3

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Independent Bank

A-Score: 6.6/10

Value: 6.9

Growth: 6.9

Quality: 7.5

Yield: 7.0

Momentum: 3.5

Volatility: 8.0

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Oriental

A-Score: 6.4/10

Value: 7.1

Growth: 7.2

Quality: 7.2

Yield: 5.0

Momentum: 4.0

Volatility: 8.0

1-Year Total Return ->

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Chemung Financial

A-Score: 6.4/10

Value: 5.8

Growth: 5.6

Quality: 5.5

Yield: 6.0

Momentum: 7.5

Volatility: 8.0

1-Year Total Return ->

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Orrstown Financial Services

A-Score: 6.1/10

Value: 6.8

Growth: 5.0

Quality: 6.7

Yield: 6.0

Momentum: 4.0

Volatility: 8.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

40.47$

Current Price

40.47$

Potential

-0.00%

Expected Cash-Flows