OFG Bancorp (NYSE: OFG) reported diluted earnings per share of $1.33 for the third quarter ended September 30, 2026, a decline from $1.39 in the second quarter of 2026 and an increase from $1.16 in the same period a year earlier. The Puerto Rico-based financial holding company, which serves as the parent for Oriental Bank, disclosed these figures on October 21, 2026, highlighting a quarter where credit costs absorbed much of the revenue growth.
Total core revenues stood at $185.7 million, slightly above the $184.0 million recorded in the third quarter of 2025 but below the $190.3 million seen in the preceding quarter. The bank’s net interest margin was 5.23%, while the return on average tangible common stockholders’ equity remained elevated at 17.06%. Total interest income decreased by $1.4 million sequentially to $195.7 million, a drop management attributed primarily to the absence of $4.1 million from three commercial loans paid in full during the second quarter. This decline was partially offset by higher average loan and cash balances and one additional business day in the quarter.
The most significant driver of the sequential earnings dip was the total provision for credit losses, which jumped to $18.1 million from $13.0 million in the second quarter of 2026. This provision increase was largely due to $17.5 million allocated for increased loan volume and a $1.3 million seasonal adjustment for auto delinquency. By comparison, the second quarter provision included $14.7 million for loan volume and $1.9 million in commercial loan recoveries.
Loan growth continued to drive balance sheet expansion. Loans held for investment reached $8.45 billion at the end of the third quarter, up $150.9 million or 1.8% from the second quarter and 4.1% higher than in the prior year. New loan production totaled $693.8 million, down $61.2 million sequentially as declines in Puerto Rico commercial, auto, and residential mortgage lending were only partially offset by gains in U.S. commercial and Puerto Rico consumer segments.
On the funding side, customer deposits decreased by $79.9 million to $9.66 billion, reflecting outflows in demand and savings accounts that were partially cushioned by an increase in time deposits. To manage liquidity, the bank increased total borrowings and brokered deposits by $131.1 million to $926.6 million. Cash and cash equivalents fell by $178.9 million to $566.8 million, primarily due to loan growth and a late-quarter purchase of $216.1 million in mortgage-backed securities.
Credit quality metrics showed mixed results. Early and total delinquency rates rose sequentially to 2.65% and 3.91%, respectively, due to seasonal trends, though both remained below year-ago levels. Net charge-off and nonperforming loan rates improved, declining to 0.70% and 0.74% compared to both the previous quarter and the prior year period.
Chief Executive Officer José Rafael Fernández noted that the results reflect continued momentum in commercial loan growth and stable credit quality, alongside disciplined expense management. He also highlighted the repurchase of $13.5 million in common shares as a reinforcement of the company’s commitment to shareholder value.
Capital ratios remained solid, with a Common Equity Tier 1 ratio of 14.10% and a Tangible Common Equity ratio of 10.34%. Tangible book value per share declined sequentially to $29.66 from $31.12, a change management cited as being primarily driven by accumulated other comprehensive loss.
OFG Bancorp held a conference call at 10:00 AM ET on October 21 to discuss its third-quarter results and outlook.