OFG Bancorp Continues to Thrive Amidst Uncertainty: Strong Q1 2026 Results Highlight Company's Resilience
OFG Bancorp, a leading financial institution in Puerto Rico, has announced its first quarter 2026 results, showcasing the company's continued strength and resilience amidst growing geopolitical uncertainties. According to CEO Josà within the company, OFG's financial performance was characterized by a 26% year-over-year increase in diluted earnings per share, driven primarily by ongoing loan growth, high-quality credit performance, core deposit strength, expense management, and proactive balance sheet management.
The company's loan portfolio grew by 5% year-over-year, with new loan production increasing by 9%. While reported core deposits declined by 1%, excluding the previously announced $500 million government deposit transfer, core deposits actually grew more than 4% year-over-year. This demonstrates OFG's ability to execute its strategies and operating model effectively.
In a show of commitment to capital management, OFG repurchased $44.5 million of common shares and increased its dividend by 17%. Despite the impact of growing energy prices on Puerto Rico's economy, businesses and consumers' balance sheets remain solid with high liquidity levels.
OFG's core digital strategy consists of three main pillars: service offerings, technology, and intelligent banking. By targeting specific customer segments with tailored accounts, the company is driving strong market adoption and deeper customer relationships. Its omni-channel platform enables seamless interactions across all touch points, resulting in continued digital adoption, efficiency, and savings that are being reinvested in new ways to serve customers.
The success of OFG's digital strategy is evident in its key metrics: retail digital enrollments are up by 10%, digital loan payments increased by 5%, and virtual teller usage rose by 7%. Net new retail and commercial customers each grew by close to 3%, allowing the company to free up more teams to provide personal value-added services, focus on sales to expand its market share, and develop new digital products and services.
According to CFO Maritza Arizmendi, OFG's financial highlights include core revenues of approximately $186 million, which were level compared to the fourth quarter. Total interest income was $194 million, a decrease of $3 million due to lower average balances of cash and investment securities at lower average yields. However, this was partially offset by higher average balances of loans at higher average yields.
Total interest expense was $40 million, a decrease of $4 million, reflecting lower average balances of core deposits at lower average yields. This was partially offset by higher average balances of brokered CDs and borrowings at lower average yields. Total banking and financial service revenues were $32 million, a decrease of $0.6 million, due to favorable MSR valuation.
The company's commitment to transparency is evident in its quarterly reporting and conference calls, which provide valuable insights into its operations and strategies. As OFG continues to navigate the complexities of the financial landscape, its strong results demonstrate the company's resilience and ability to adapt to changing circumstances.
