📰 What This Document Is 📜

This document is an 8-K filing and associated Financial Supplement released by OFG Bancorp. In simple terms, an 8-K is an emergency filing used to report material, current, and important events that happened recently. Here, it serves as the company’s official report of its financial performance for the first quarter (1Q) of 2026, which ended on March 31, 2026.

👉 This filing provides an extremely detailed deep dive into how the bank performed during Q1 2026, comparing key metrics—like revenue, deposits, and loan quality—against previous quarters and years.

🏢 What OFG Bancorp Does 🏦

OFG Bancorp is a diversified financial holding company that has been operating for 62 years. It provides a wide variety of financial services across Puerto Rico, the U.S., and the U.S. Virgin Islands.

👉 The company makes money by providing core banking, lending, and wealth management products through its principal subsidiaries: Oriental Bank, Oriental Financial Services, and Oriental Insurance. They aim to "make progress possible" for their customers and the communities they serve.

🗣️ Management Commentary and Strategy 🌟

The CEO, José Rafael Fernández, provided a positive outlook, citing "Business momentum and disciplined strategy execution" as the drivers for the strong first quarter.

👉 Fernández highlighted the bank's focus on its digital capabilities and personal customer relationships. He noted that the increased use of retail products (like Libre and Elite) and commercial accounts helped expand deposits, allowing the bank to reduce its reliance on less stable "wholesale funding."

He also provided a note on the macroeconomic environment, stating that "Puerto Rico’s economy is stable, with federal reconstruction funds and private investment supporting continued activity, particularly in manufacturing and onshoring." This indicates the bank sees local economic stability supporting its future growth.

💰 Quarterly Financial Highlights 💹

Overall, the bank showed resilient core operations despite some quarter-over-quarter dips in certain income streams.

• Net Income: The diluted Earnings Per Share (EPS) was $1.26, which was slightly lower compared to $1.27 in 4Q25, but notably higher than $1.00 in 1Q25.
• Core Revenue: Total core revenues reached $185.8 million, compared to $185.4 million in 4Q25 and $178.3 million in 1Q25.
• Capital Return: The company reinforced its commitment to shareholders by repurchasing $44.5 million of common shares and increasing its dividend by 17%.

👉 The primary operational focus remains on strengthening the balance sheet and enhancing shareholder returns.

📈 Key Performance Metrics & Efficiency 📊

These metrics help investors understand how efficiently the bank is running its operations and generating returns from its assets.

• Net Interest Margin (NIM): This was 5.36%. NIM measures the bank's ability to earn money from the difference between the interest it earns on loans and the interest it pays out on deposits.
• Return on Average Assets (ROAA): This stood at 1.78%. This tells readers how much profit the bank generated for every dollar of assets it held.
• Efficiency Ratio: The ratio was 50.97%. A lower ratio is better, as it means the bank spends less in operating costs (like salaries and rent) to generate each dollar of revenue.

🏦 Deposit and Funding Story 💧

The stability of the bank’s funding base is crucial, as deposits are the lifeblood of any bank. In Q1 2026, the bank’s total deposits were $9.66 billion.

• Deposit Dip Explanation: Total deposits decreased $263.4 million sequentially (compared to 4Q25). The filing explained that this decline was primarily due to the previously announced $500 million transfer of a government demand deposit into a wealth management account in early 1Q26.
• Sources of Funds: Core deposits (the most stable source) totaled $9.56 billion. The bank also reported Total Borrowings & Brokered Deposits of $746.6 million, which saw a decline of $150.7 million compared to 4Q25, reflecting natural maturities.

💼 Loan Portfolio Health & Credit Quality 🛡️

Analyzing the loan portfolio is how investors check the bank's risk levels. In 1Q 2026, the total loans held for investment amounted to $8.04 billion.

• Net Charge-Offs: Net charge-offs were $21.4 million (1.05% of average loans). This figure measures the actual amount of loans the bank wrote off because they were deemed uncollectible. This was a decrease of $5.5 million compared to 4Q25, suggesting improved risk management.
• Delinquency Rates: The early delinquency rate (30–89 days past due) was 2.21% and the total delinquency rate was 3.40%. Both of these rates declined compared to 4Q25, signaling that the quality of loans remains strong.
• Loan Production: The bank made new loans (Total Loan Production) of $608.9 million in 1Q26. Year-over-year, this production increased by 8.9%, driven mainly by commercial lending.

💸 Operational Revenue Streams 💰

The bank reported total core revenues of $185.8 million. This income comes from several distinct sources:

• Interest Income: Total Interest Income was $194.1 million, compared to $197.2 million in 4Q25. This amount comes from interest earned on loans and investments.
• Non-Interest Income: This revenue stream totaled $32.0 million (up from $32.6 million in 4Q25). Sources include banking and financial services revenue and wealth management revenue.
• Non-Interest Expense: Total non-interest expense was $94.7 million, down from $105.0 million in 4Q25. The savings here were partially attributed to the elimination of previously reported expense items in 4Q25.

⚖️ Capital Strength and Regulatory Measures 👑

The bank's capital ratios are its financial safety net. They show how much cushion the bank has to absorb losses without failing.

• CET1 Ratio: The Common Equity Tier 1 (CET1) ratio was 13.75%. This is a key regulatory measure showing the bank's highest quality capital relative to its risks. This ratio was compared to 13.97% in 4Q25.
• Tangible Common Equity Ratio: This ratio was 10.66%. This measure uses "tangible" equity, which excludes certain less reliable assets, giving a clear view of the core financial backing.
• Total Risk-Based Capital Ratio: This ratio was 15.01%. It measures the bank's total capital against its total risk-weighted assets, indicating overall stability.

📜 Key Financial Changes & Balance Sheet Movements 🔄

Several major movements on the balance sheet reflect recent internal activities and external financial pressures.

• Cash: Cash & Cash Equivalents were $636.5 million (End of Period). This figure declined $403.8 million compared to 4Q25, mainly because of the aforementioned government deposit transfer into wealth management accounts.
• Investments: Total Investments (End of Period) were $2.79 billion, reflecting principal paydowns and maturities. The bank actively purchased $49.2 million in mortgage-backed securities.
• Book Value: The Tangible Book Value per common share stood at $30.14, an increase from $29.96 in 4Q25 and $26.66 in 1Q25.

📅 Upcoming Events and Contacts ☎️

The bank provided crucial logistics for investors looking to follow up on these results.

• Conference Call: A conference call to discuss the 1Q26 results and outlook was held on the day of the filing at 10:00 AM ET.
• Dial-in Information: The call could be accessed via Phone (800) 579-2543 or (785) 424-1789.
• Webcasting: The webcast could be accessed live on www.ofgbancorp.com.

🔗 Key Contacts and Resources 📬

For specific queries, the filing provided multiple dedicated contacts:

• Puerto Rico & USVI: Lumarie Vega López and Victoria Maldonado Rodríguez can be reached at (787) 771-6800, with emails: [email protected] and [email protected].
• US Contacts: Gary Fishman and Michael Wichman are available at (212) 532-3232, with emails: [email protected] and [email protected].

🧠 The Analogy 🏞️

Think of OFG Bancorp like a large local utility company. When reporting quarterly results, they are telling you not just about how much electricity (revenue) they generated this quarter, but also how much money they had to spend on keeping the generators running (operating expenses) and, most importantly, how stable their customer base (deposits) and the integrity of their infrastructure (loans) are. The filing is a comprehensive health check that signals they are well-managed, even if certain assets (like cash) temporarily look lower due to shifts in where money is stored.

🧩 Final Takeaway 🚀

The bank demonstrated consistent financial strength and improving credit quality in 1Q 2026, highlighted by declining delinquency rates and a managed decrease in non-performing loans. The strategic focus remains on optimizing its digital banking model and rewarding shareholders through increased dividends and stock repurchases.