10q10k10q10k.net

What changed in OFG BANCORP's 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of OFG BANCORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+350 added−348 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-27)

Top changes in OFG BANCORP's 2025 10-K

350 paragraphs added · 348 removed · 249 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

55 edited+29 added−40 removed166 unchanged
Biggest changeOFG operates through various subsidiaries, including a commercial bank, the Bank, a securities broker-dealer and investment adviser, Oriental Financial Services LLC (“Oriental Financial Services”), an insurance agency, Oriental Insurance, LLC (“Oriental Insurance”), a captive reinsurance company, OFG Reinsurance Ltd (“OFG Reinsurance”), OFG Ventures LLC (“OFG Ventures”), which holds investments, and a commercial lender, OFG USA LLC (“OFG USA”), which is a subsidiary of the Bank.
Biggest changeOFG operates through various subsidiaries, including a commercial bank, the Bank, a securities broker-dealer and investment adviser, Oriental Financial Services LLC (“Oriental Financial Services”), an insurance agency, Oriental Insurance, LLC (“Oriental Insurance”), a captive reinsurance company, OFG Reinsurance Ltd (“OFG Reinsurance”), OFG Ventures LLC (“OFG Ventures”), which holds investments, a commercial lender, OFG USA LLC (“OFG USA”), which is a subsidiary of the Bank, and OBPEF LLC (“OBPEF”), as a wholly owned subsidiary of the Bank and a private equity fund under the Puerto Rico Incentives Code, as amended (the “Incentives Code”), whose objective is to provide financing to eligible borrowers, whether in the form of senior or subordinated debt, to support the economic development of Puerto Rico.
An insured state bank, such as the Bank, is not prohibited from, among other things, (i) acquiring or retaining a majority interest in a subsidiary engaged in permissible activities, (ii) investing as a limited partner in a partnership, or as a non-controlling interest holder of a limited liability company, the sole purpose of which is direct or indirect investment in the acquisition, rehabilitation or new construction of a qualified housing project, provided that such investments may not exceed 2% of the bank’s total assets, (iii) acquiring up to 10% of the voting stock of a company that solely provides or reinsures directors’, trustees’ and officers’ liability insurance coverage or bankers’ blanket bond group insurance coverage for insured depository institutions, and (iv) acquiring or retaining the voting stock of an insured depository institution if certain 15 requirements are met, including that it is owned exclusively by other banks.
An insured state bank, such as the Bank, is not prohibited from, among other things, (i) acquiring or retaining a majority interest in a subsidiary engaged in permissible activities, (ii) investing as a limited partner in a partnership, or as a non-controlling interest holder of a limited liability company, the sole purpose of which is direct or indirect investment in the acquisition, rehabilitation or new construction of a qualified housing project, provided that such investments may not exceed 2% of the bank’s total assets, (iii) acquiring up to 10% of the voting stock of a company that solely provides or reinsures directors’, trustees’ and officers’ liability insurance coverage or bankers’ blanket bond group insurance coverage for insured depository institutions, and (iv) acquiring or retaining the voting stock of an insured depository institution if certain requirements are met, including that it is owned exclusively by other banks.
Under such rules, an insured depository institution is: 13 (i) “well capitalized,” if it has a total risk-based capital ratio of 10% or more, a tier 1 risk-based capital ratio of 8% or more, a common equity tier 1 capital ratio of 6.5% or more, and a tier 1 leverage capital ratio of 5% or more, and is not subject to any written capital order or directive; (ii) “adequately capitalized,” if it has a total risk-based capital ratio of 8% or more, a tier 1 risk-based capital ratio of 6% or more, a common equity tier 1 capital ratio of 4.5% or more, and a tier 1 leverage capital ratio of 4% or more; (iii) “undercapitalized,” if it has a total risk-based capital ratio that is less than 8%, a tier 1 risk-based ratio that is less than 6%, a common equity tier 1 capital ratio that is less than 4.5%, or a tier 1 leverage capital ratio that is less than 4%; (iv) “significantly undercapitalized,” if it has a total risk-based capital ratio that is less than 6%, a tier 1 risk-based capital ratio that is less than 4%, a common equity tier 1 capital ratio that is less than 3%, or a tier 1 leverage capital ratio that is less than 3%; and (v) “critically undercapitalized,” if it has a ratio of tangible equity (defined as tier 1 capital plus non-tier 1 perpetual preferred stock) to total assets that is equal to or less than 2%.
Under such rules, an insured depository institution is: (i) “well capitalized,” if it has a total risk-based capital ratio of 10% or more, a tier 1 risk-based capital ratio of 8% or more, a common equity tier 1 capital ratio of 6.5% or more, and a tier 1 leverage capital ratio of 5% or more, and is not subject to any written capital order or directive; (ii) “adequately capitalized,” if it has a total risk-based capital ratio of 8% or more, a tier 1 risk-based capital ratio of 6% or more, a common equity tier 1 capital ratio of 4.5% or more, and a tier 1 leverage capital ratio of 4% or more; (iii) “undercapitalized,” if it has a total risk-based capital ratio that is less than 8%, a tier 1 risk-based ratio that is less than 6%, a common equity tier 1 capital ratio that is less than 4.5%, or a tier 1 leverage capital ratio that is less than 4%; (iv) “significantly undercapitalized,” if it has a total risk-based capital ratio that is less than 6%, a tier 1 risk-based capital ratio that is less than 4%, a common equity tier 1 capital ratio that is less than 3%, or a tier 1 leverage capital ratio that is less than 3%; and (v) “critically undercapitalized,” if it has a ratio of tangible equity (defined as tier 1 capital plus non-tier 1 perpetual preferred stock) to total assets that is equal to or less than 2%.
Under Section 22(h) and Regulation O, loans to a director, an executive officer and a greater-than-10% shareholder of a bank and certain of their related interests (collectively “insiders”), and insiders of its affiliates, may not exceed, together with all other outstanding loans to such person and its related interests, the bank’s single borrower limit (generally equal to 15% of the institution’s unimpaired capital and surplus).
Under Section 14 22(h) and Regulation O, loans to a director, an executive officer and a greater-than-10% shareholder of a bank and certain of their related interests (collectively “insiders”), and insiders of its affiliates, may not exceed, together with all other outstanding loans to such person and its related interests, the bank’s single borrower limit (generally equal to 15% of the institution’s unimpaired capital and surplus).
Furthermore, such loans and extensions of credit are required to be secured in specified amounts, carried out on an arm’s length basis, and consistent with safe and sound banking practices. 11 Under the Dodd-Frank Act, a bank holding company, such as OFG, must serve as a source of financial strength for any subsidiary depository institution.
Furthermore, such loans and extensions of credit are required to be secured in specified amounts, carried out on an arm’s length basis, and consistent with safe and sound banking practices. Under the Dodd-Frank Act, a bank holding company, such as OFG, must serve as a source of financial strength for any subsidiary depository institution.
In addition, SOX established membership requirements and responsibilities for the audit committee, imposed restrictions on the relationship between a publicly-traded company, such as OFG, and its external auditors, imposed additional responsibilities for the external financial statements on the chief executive officer and the chief financial officer, expanded the disclosure requirements for corporate insiders, required management to evaluate its disclosure controls and procedures and its internal control over financial reporting, and required the auditors to issue a report on the internal control over financial reporting.
In addition, SOX established membership requirements and responsibilities for the audit committee, imposed restrictions on the relationship between a publicly-traded company, such as OFG, and its external auditors, imposed additional 15 responsibilities for the external financial statements on the chief executive officer and the chief financial officer, expanded the disclosure requirements for corporate insiders, required management to evaluate its disclosure controls and procedures and its internal control over financial reporting, and required the auditors to issue a report on the internal control over financial reporting.
In July 2019, the federal banking regulatory agencies adopted a final rule, pursuant to the Economic Growth and Regulatory Paperwork Reduction Act of 1996, that simplifies for banking organizations following non-advanced approaches, as OFG, the regulatory capital treatment for mortgage servicing assets (“MSAs”) and certain deferred tax assets arising from temporary differences (temporary difference DTAs).
In July 2019, the federal banking regulatory agencies adopted a final rule, pursuant to the Economic Growth and Regulatory Paperwork Reduction Act of 1996, that simplifies for banking organizations following non-advanced approaches, as OFG, the 11 regulatory capital treatment for mortgage servicing assets (“MSAs”) and certain deferred tax assets arising from temporary differences (temporary difference DTAs).
Finally, each federal banking agency is required to prescribe standards for the employment contracts and other compensation arrangements of executive officers, employees, directors and principal stockholders of insured depository institutions that would prohibit compensation, benefits and other arrangements that are excessive or that could lead to a material financial loss for the institution.
Finally, each federal banking agency is required to prescribe standards for the employment contracts and other 13 compensation arrangements of executive officers, employees, directors and principal stockholders of insured depository institutions that would prohibit compensation, benefits and other arrangements that are excessive or that could lead to a material financial loss for the institution.
For detailed information regarding the performance of OFG’s operating segments, please refer to “Note 28 – Business Segments” in OFG’s accompanying consolidated financial statements. 4 Banking Activities The Bank, OFG’s main subsidiary, is a full-service Puerto Rico commercial bank with its main office located in San Juan, Puerto Rico.
For detailed information regarding the performance of OFG’s operating segments, please refer to “Note 28 – Business Segments” in OFG’s accompanying consolidated financial statements. Banking Activities The Bank, OFG’s main subsidiary, is a full-service Puerto Rico commercial bank with its main office located in San Juan, Puerto Rico.
The new assessment rate schedules will remain in effect unless and until the reserve ratio meets or 14 exceeds 2% in order to support growth in the DIF in progressing toward the FDIC’s long-term goal of a 2% DRR. Progressively lower assessment rate schedules will take effect when the reserve ratio reaches 2%, and again when it reaches 2.5%.
The new assessment rate schedules will remain in effect unless and until the reserve ratio meets or exceeds 2% in order to support growth in the DIF in progressing toward the FDIC’s long-term goal of a 2% DRR. Progressively lower assessment rate schedules will take effect when the reserve ratio reaches 2%, and again when it reaches 2.5%.
Oriental Insurance is subject to the supervision, examination and regulation of the Office of the Commissioner of Insurance of Puerto Rico in matters relating to insurance sales, including but not limited to, licensing of employees, sales practices, charging of commissions and reporting requirements. 10 OFG Reinsurance is subject to regulation by the Cayman Islands Monetary Authority (“CIMA”).
Oriental Insurance is subject to the supervision, examination and regulation of the Office of the Commissioner of Insurance of Puerto Rico in matters relating to insurance sales, including but not limited to, licensing of employees, sales practices, charging of commissions and reporting requirements. OFG Reinsurance is subject to regulation by the Cayman Islands Monetary Authority (“CIMA”).
Many of the regulatory and compliance requirements that became effective as a result of the Dodd-Frank Act have been gradually implemented over time, and most are subject to implementing regulations, which may be amended and supplemented from time to time by the applicable governmental authorities.
Many of the regulatory and compliance requirements that became effective as a result of the 9 Dodd-Frank Act have been gradually implemented over time, and most are subject to implementing regulations, which may be amended and supplemented from time to time by the applicable governmental authorities.
Therefore, banking entities that meet such threshold may generally engage in proprietary trading and invest in private equity and hedge funds. On July 22, 2019, the federal banking regulatory agencies adopted final rules amending their regulations in a manner consistent with such exemption.
Therefore, banking entities that meet such threshold may generally engage in proprietary trading and invest in private equity and hedge funds. On 17 July 22, 2019, the federal banking regulatory agencies adopted final rules amending their regulations in a manner consistent with such exemption.
The PRFB has the authority to regulate the maximum interest rates and finance charges that may be charged on loans to individuals and businesses in the Commonwealth. The current regulations of the PRFB provide that the applicable interest rate on loans to individuals and businesses is to be determined by free competition.
The PRFB has the authority to regulate the maximum interest rates and finance charges that may be charged on loans to individuals and businesses in the 16 Commonwealth. The current regulations of the PRFB provide that the applicable interest rate on loans to individuals and businesses is to be determined by free competition.
The mortgage banking activities include the origination of mortgage loans for the Bank’s own portfolio, the sale of loans directly into the secondary market or the securitization of conforming loans into mortgage-backed securities, and the purchase or assumption of the right to service loans originated by others.
The mortgage banking activities include the origination of mortgage loans for the Bank’s own portfolio, the sale of loans directly into the secondary market or the securitization of mortgage loans into mortgage-backed securities, and the purchase or assumption of the right to service loans originated by others.
In general terms, the FDIA and the FDIC regulations restrict the payment of dividends when a bank is undercapitalized, when a bank has failed to pay insurance assessments, or when there are safety and soundness concerns regarding a bank.
In general terms, the FDIA and the FDIC regulations restrict the payment of dividends when a bank is undercapitalized, when a bank has failed to pay insurance 10 assessments, or when there are safety and soundness concerns regarding a bank.
The federal banking agencies may not accept a capital plan without determining, among other things, that the plan is based on realistic assumptions and is likely to succeed in restoring the depository institution’s capital.
The federal banking agencies may not accept a capital plan without determining, 12 among other things, that the plan is based on realistic assumptions and is likely to succeed in restoring the depository institution’s capital.
OFG’s principal subsidiary is Oriental Bank (the “Bank”), an Federal Deposit Insurance Corporation (“FDIC”) insured Puerto Rico commercial bank founded as a federal savings and loan in 1964.
OFG’s principal subsidiary is Oriental Bank (the “Bank”), a Federal Deposit Insurance Corporation (“FDIC”) insured Puerto Rico commercial bank founded as a federal savings and loan in 1964.
The Banking Act permits Puerto Rico commercial banks to make loans to any one person, firm, partnership or corporation, up to an aggregate amount of 15% of the sum of: (i) the bank’s paid-in capital; (ii) the bank’s reserve fund; (iii) 50% of the bank’s retained earnings, subject to certain limitations; and (iv) any other components that the OCFI may determine from time to time.
The Banking Act permits Puerto Rico commercial banks to make loans to any one person, firm, partnership or corporation, up to an aggregate amount of 15% of the sum of: (i) the bank’s paid-in capital; (ii) the bank’s reserve fund; (iii) 100% of the bank’s retained earnings, subject to certain limitations; and (iv) any other components that the OCFI may determine from time to time.
Failure to meet the capital rules could subject an institution to a variety of enforcement actions including the termination of deposit insurance by the FDIC and the imposition of certain restrictions on its business. As of December 31, 2024, OFG was in compliance with all applicable capital requirements. For more information, please refer to the accompanying consolidated financial statements.
Failure to meet the capital rules could subject an institution to a variety of enforcement actions including the termination of deposit insurance by the FDIC and the imposition of certain restrictions on its business. As of December 31, 2025, OFG was in compliance with all applicable capital requirements. For more information, please refer to the accompanying consolidated financial statements.
OFG’s assets exceeded $10 billion as of December 31, 2023; therefore, beginning on July 1, 2024, the Durbin Amendment reduced OFG’s income from debit card interchange fees. OFG had implemented 19 measures to anticipate the increased regulatory oversight and other requirements that applied as a result of crossing such $10 billion threshold.
OFG’s assets exceeded $10 billion as of December 31, 2023; therefore, beginning on July 1, 2024, the Durbin Amendment reduced OFG’s income from debit card interchange fees. OFG implemented measures to anticipate the increased regulatory oversight and other requirements that applied as a result of crossing such $10 billion threshold.
It also has two international banking entities (each an “IBE”) organized in Puerto Rico pursuant to the International Banking Center Regulatory Act of Puerto Rico, as amended (the “IBE Act”), a unit operating within the Bank, named Oriental Overseas (the “IBE Unit”), and the other is a wholly owned subsidiary of the Bank, named Oriental International Bank, Inc.
It also has two international banking entities (each an “IBE”) organized in Puerto Rico pursuant to the International Banking Center Regulatory Act of Puerto Rico, as amended (the “IBE Act”), one of which is a unit operating within the Bank, named Oriental Overseas (the “IBE Unit”), and the other is a wholly owned subsidiary of the Bank, named Oriental International Bank, Inc.
Undercapitalized institutions are not permitted to accept brokered deposits. As of December 31, 2024, the Bank meets the requirements to be considered a well-capitalized institution and is therefore not subject to these limitations on brokered deposits.
Undercapitalized institutions are not permitted to accept brokered deposits. As of December 31, 2025, the Bank meets the requirements to be considered a well-capitalized institution and is therefore not subject to these limitations on brokered deposits.
Under the FDIC regulations governing the activities and investments of insured state banks which further implemented Section 24 of the FDIA, as amended by FDICIA, an insured state-chartered bank may not, directly, or indirectly through a subsidiary, engage as “principal” in any activity that is not permissible for a national bank unless the FDIC has determined that such activities would pose no risk to the Deposit Insurance Fund and the bank is in compliance with applicable regulatory capital requirements.
Under the FDIC regulations governing the activities and investments of insured state banks which further implemented Section 24 of the FDIA, as amended by FDICIA, an insured state-chartered bank may not, directly, or indirectly through a subsidiary, engage as “principal” in any activity that is not permissible for a national bank unless the FDIC has determined that such activities would pose no risk to the DIF and the bank is in compliance with applicable regulatory capital requirements.
If such loans are secured by collateral worth at least 25% more than the amount of the loan, the aggregate maximum amount will include 33.33% of 50% of the bank’s retained earnings.
If such loans are secured by collateral worth at least 25% more than the amount of the loan, the aggregate maximum amount will include 33.33% of 100% of the bank’s retained earnings.
The IBE Act provides further that every IBE must have not less than $525 thousand of unencumbered assets or acceptable financial guarantees in Puerto Rico.
The IBE Act provides further that every IBE must have not less than $750 thousand of unencumbered assets or acceptable financial guarantees in Puerto Rico.
The Dodd-Frank Act contains several important deposit insurance reforms, including the following: (i) the maximum deposit insurance amount was permanently increased to $250,000; (ii) the deposit insurance assessment is now based on the insured depository institution’s average consolidated assets minus its average tangible equity, rather than on its deposit base; (iii) the minimum reserve ratio for the Deposit Insurance Fund (“DIF”) was raised from 1.15% to 1.35% of estimated insured deposits; (iv) the FDIC is required to “offset the effect” of increased assessments on insured depository institutions with total consolidated assets of less than $10 billion; (v) the FDIC is no longer required to pay dividends if the Deposit Insurance Fund’s reserve ratio is greater than the minimum ratio; and (vi) the FDIC temporarily insured the full amount of qualifying “noninterest-bearing transaction accounts” until December 31, 2012.
The Dodd-Frank Act contains several important deposit insurance reforms, including the following: (i) the maximum deposit insurance amount was permanently increased to $250,000; (ii) the deposit insurance assessment is now based on the insured depository institution’s average consolidated assets minus its average tangible equity, rather than on its deposit base; (iii) the minimum reserve ratio for the DIF is 1.35% of estimated insured deposits; (iv) the FDIC is required to “offset the effect” of increased assessments on insured depository institutions with total consolidated assets of less than $10 billion; (v) the FDIC is no longer required to pay dividends if the DIF’s reserve ratio is greater than the minimum ratio; and (vi) the FDIC temporarily insured the full amount of qualifying “noninterest-bearing transaction accounts” until December 31, 2012.
The Bank originates Federal Housing Administration (“FHA”) insured mortgages, Veterans Administration (“VA”) guaranteed mortgages, and Rural Housing Service (“RHS”) guaranteed loans that are primarily securitized for issuance of Government National Mortgage Association (“GNMA”) mortgage-backed securities which can be resold to individual or institutional investors in the secondary market.
The Bank originates Federal Housing Administration (“FHA”) insured mortgages, Veterans Administration (“VA”) guaranteed mortgages, and U.S. Department of Agriculture (“USDA”) Rural Housing Service (“RHS”) guaranteed loans that are primarily securitized for issuance of Government National Mortgage Association (“GNMA”) mortgage-backed securities which can be resold to individual or institutional investors in the secondary market.
The FDIC has the authority to charge special assessments from time to time, including in connection with systematic risk events. For example, in November 2023, the FDIC finalized a rule to recover losses to the FDIC deposit insurance fund as a result of bank failures during the first half of 2023.
The FDIC has the authority to charge special assessments from time to time, including in connection with systematic risk events. For example, in November 2023, the FDIC finalized a rule to recover losses to the FDIC DIF as a result of bank failures during the first half of 2023.
The Bank received a “satisfactory” rating in its most recent CRA examination. 16 USA Patriot Act Under Title III of the USA Patriot Act, also known as the “International Money Laundering Abatement and Anti-Terrorism Financing Act of 2001,” as amended, which is part of the legislative framework known as the “Bank Secrecy Act”, all financial institutions, including OFG, Oriental Financial Services, and the Bank, are generally required to identify and verify the identity of their customers (including the beneficial owners of a legal entity customer and an individual with significant responsibility for managing such legal entity customer), adopt formal and comprehensive anti-money laundering programs, scrutinize or prohibit altogether certain transactions of special concern, and be prepared to respond to inquiries from U.S. law enforcement agencies concerning their customers and their transactions.
USA Patriot Act Under Title III of the USA Patriot Act, also known as the “International Money Laundering Abatement and Anti-Terrorism Financing Act of 2001,” as amended, which is part of the legislative framework known as the “Bank Secrecy Act”, all financial institutions, including OFG, Oriental Financial Services, and the Bank, are generally required to identify and verify the identity of their customers (including the beneficial owners of a legal entity customer and an individual with significant responsibility for managing such legal entity customer), adopt formal and comprehensive anti-money laundering programs, scrutinize or prohibit altogether certain transactions of special concern, and be prepared to respond to inquiries from U.S. law enforcement agencies concerning their customers and their transactions.
As of December 31, 2024, OFG’s management concluded that its internal control over financial reporting was effective.
As of December 31, 2025, OFG’s management concluded that its internal control over financial reporting was effective.
Conventional loans that meet the underwriting requirements for sale or exchange under standard Federal National Mortgage Association (the “FNMA”) or the Federal Home Loan Mortgage Corporation (the “FHLMC”) programs are referred to as conforming mortgage loans and are also securitized for issuance of FNMA or FHLMC mortgage-backed securities.
Conventional loans that meet the underwriting requirements for sale or exchange under standard Federal National Mortgage Association (the “FNMA”) or the Federal Home Loan Mortgage Corporation (the “FHLMC”) programs are referred to as conforming mortgage loans and are also securitized for issuance of FNMA or FHLMC mortgage-backed securities or sold through the Government Sponsor Entity (“GSE”) cash window.
The proprietary credit scoring system is a fundamental part of the decision process. 5 Residential mortgage loans: All loan originations, regardless of whether originated through OFG’s retail banking network or purchased from third parties, must be underwritten in accordance with OFG’s underwriting criteria, including loan-to-value ratios, borrower income qualifications, debt ratios and credit history, FICO score, investor requirements, and title insurance and property appraisal requirements.
Residential mortgage loans: All loan originations, regardless of whether originated through OFG’s retail banking network or purchased from third parties, must be underwritten in accordance with OFG’s underwriting criteria, including loan-to-value ratios, borrower income qualifications, debt ratios and credit history, FICO score, investor requirements, and title insurance and property appraisal requirements.
This program, through its internally developed and managed relationship with commercial and investment banks across the United States, engages primarily in the activities of purchasing participations in credit facilities through underwriting and portfolio management of commercial and industrial loans to middle-market and lower middle-market commercial borrowers in the mainland United States.
OFG continues to develop commercial relationships in the United States through its U.S. commercial loan program, which has internally developed and managed relationships with commercial and investment banks across the United States, engages primarily in the activities of purchasing participations in credit facilities through underwriting and portfolio management of commercial and industrial loans to middle-market and lower middle-market commercial borrowers in the mainland United States.
Treasury Activities Treasury activities encompass all of the Company’s treasury-related functions. OFG’s investment portfolio consists of mortgage-backed securities, obligations of U.S. government-sponsored agencies, US Treasury securities and money market instruments.
OFG’s investment portfolio consists of primarily mortgage-backed securities, obligations of U.S. government-sponsored agencies, US Treasury securities and money market instruments.
OFG also operates in the USVI through two branches and expects to continue to grow its business in such jurisdiction. Our Human Capital At OFG, our unwavering commitment to propelling the progress of our customers, employees, shareholders, and the communities we serve is the driving force behind everything we do.
OFG also operates in the USVI through two branches and expects to continue to grow its business in such jurisdiction. Our Human Capital At OFG, we remain firmly devoted to fostering the ongoing progress of our customers, employees, shareholders, and the communities we serve.
Underwriting procedures, lending limits, interest rate approval, insurance coverage, Fair Isaac Corporation (“FICO”) score, and automobile brand restrictions are some parameters and internal controls implemented to ensure the quality and profitability of the auto loan portfolio. The proprietary credit scoring system is a fundamental part of the decision process.
The auto loan credit policy establishes specific guidance and parameters for the underwriting and origination processes. Underwriting procedures, lending limits, interest rate approval, insurance coverage, Fair Isaac Corporation (“FICO”) score, and automobile brand restrictions are some parameters and internal controls implemented to ensure the quality and profitability of the auto loan portfolio.
OFG’s ability to originate loans depends primarily on the services that it provides to its borrowers, in making prompt credit decisions, and on the rates and fees that it charges. OFG continues to develop commercial relationships in the United States with its U.S. commercial loan program.
OFG’s ability to originate loans depends primarily on the services that it provides to its borrowers, in making prompt credit decisions, and on the rates and fees that it charges.
In addition, Federal Reserve Board approval must also be obtained before a bank holding company acquires all or substantially all of the assets of another bank or merges or consolidates with another bank holding company. The Federal Reserve Board also has the authority to issue cease and desist orders against bank holding companies and their non-bank subsidiaries.
In addition, Federal Reserve Board approval must also be obtained before a bank holding company acquires all or substantially all of the assets of another bank or merges or consolidates with another bank holding company.
All loans, advances and other extensions of credit made by the FHLB to the Bank are secured by a portion of the Bank’s mortgage and commercial loan portfolios and certain other investments. 12 Regulatory Capital Requirements Under the Dodd-Frank Act, federal banking regulators are required to establish minimum leverage and risk-based capital requirements, on a consolidated basis, for insured institutions, depository institution holding companies, and non-bank financial companies supervised by the Federal Reserve Board.
Regulatory Capital Requirements Under the Dodd-Frank Act, federal banking regulators are required to establish minimum leverage and risk-based capital requirements, on a consolidated basis, for insured institutions, depository institution holding companies, and non-bank financial companies supervised by the Federal Reserve Board.
These loans are generated mainly through dealers authorized and approved by OFG’s auto credit department. The auto credit department has the specialized structure and resources to provide the service required for this product according to market demands and trends. The auto loan credit policy establishes specific guidance and parameters for the underwriting and origination processes.
Loan Underwriting Auto loans: OFG provides financing for the purchase of new or used motor vehicles. These loans are generated mainly through dealers authorized and approved by OFG’s auto credit department. The auto credit department has the specialized structure and resources to provide the service required for this product according to market demands and trends.
Under that law, if OFG fails to meet the requirements for being a financial holding company and is unable to correct such deficiencies within certain prescribed time periods, the Federal Reserve Board could require OFG to divest control of its depository institution subsidiary or alternatively cease conducting activities impermissible for bank holding companies that are not financial holding companies. 9 Financial holding companies may engage, directly or indirectly, in any activity that is determined to be (i) financial in nature or incidental to such financial activity, or (ii) complementary to a financial activity provided it does not pose a substantial risk to the safety and soundness of depository institutions or the financial system generally.
Under that law, if OFG fails to meet the requirements for being a financial holding company and is unable to correct such deficiencies within certain prescribed time periods, the Federal Reserve Board could require OFG to divest control of its depository institution subsidiary or alternatively cease conducting activities impermissible for bank holding companies that are not financial holding companies.
The OCFI generally examines the Bank at least once every two years. 17 The Banking Act requires that a minimum of 10% of the Bank’s net income for the year be transferred to a reserve fund until such fund (legal surplus) equals the total paid-in capital on common and preferred stock.
The Banking Act requires that a minimum of 10% of the Bank’s net income for the year be transferred to a reserve fund until such fund (legal surplus) equals the total paid-in capital on common and preferred stock. At December 31, 2025 and 2024, legal surplus amounted to $188.5 million and $169.5 million, respectively.
In addition, the OCFI is given extensive rulemaking power and administrative discretion under the Banking Act.
In addition, the OCFI is given extensive rulemaking power and administrative discretion under the Banking Act. The OCFI generally examines the Bank at least once every two years.
Management makes retail deposit pricing decisions periodically, adjusting the rates paid on retail deposits in response to general market conditions and local competition. Pricing decisions take into account the rates being offered by other local banks, the applicable market benchmarks, and mainland U.S. market interest rates. Segment Disclosure OFG has three reportable segments: Banking, Wealth Management, and Treasury.
Pricing decisions take into account the rates being offered by other local banks, the applicable market benchmarks, and mainland U.S. market interest rates. 3 Segment Disclosure OFG has three reportable segments: Banking, Wealth Management, and Treasury. Management established the reportable segments based on the internal reporting used to evaluate performance and to assess where to allocate resources.
OFG’s principal funding source is branch deposits. Through its branch network, the Bank offers personal non-interest and interest-bearing checking accounts, savings accounts, certificates of deposit, individual retirement accounts (“IRAs”) and commercial non-interest and interest-bearing checking accounts. The FDIC insures the Bank’s deposit accounts up to applicable limits.
We understand the customer’s journey and align our structure and processes to reflect its perspective, end to end. OFG’s principal funding source is customer deposits. Through its branch network and digital sales platform, the Bank offers personal non-interest and interest-bearing checking accounts, savings accounts, certificates of deposit, individual retirement accounts (“IRAs”) and commercial non-interest and interest-bearing checking accounts.
At 2024 and 2023, legal surplus amounted to $169.5 million and $151.0 million, respectively. The amount transferred to the legal surplus account is not available for the payment of dividends to shareholders.
The amount transferred to the legal surplus account is not available for the payment of dividends to shareholders.
Management established the reportable segments based on the internal reporting used to evaluate performance and to assess where to allocate resources. Other factors such as OFG’s organizational structure, nature of products, distribution channels and economic characteristics of the products or services were also considered in the determination of the reportable segments.
Other factors such as OFG’s organizational structure, nature of products, distribution channels and economic characteristics of the products or services were also considered in the determination of the reportable segments. OFG measures the performance of these reportable segments based on pre-established annual goals involving different financial parameters such as net income.
Consumer loans: Consumer loans include personal loans, residential solar panel loans, credit cards, lines of credit and other loans made by the Bank to individual borrowers. All loan originations must be underwritten in accordance with OFG’s underwriting criteria and include an assessment of each borrower’s personal financial condition, including verification of income, assets, FICO score, and credit reports.
All loan originations must be underwritten in accordance with OFG’s underwriting criteria and include an assessment of each borrower’s personal financial condition, including verification of 4 income, assets, FICO score, and credit reports. The proprietary credit scoring system is a fundamental part of the decision process.
Moreover, the amount to be carried over to a particular year is limited to 90% of the net income for the year for regular tax purposes and 70% of the net income for the year for alternative minimum tax (“AMT”) purposes. 18 International Banking Center Regulatory Act of Puerto Rico The business and operations of the Bank’s IBE Unit and IBE Subsidiary are subject to supervision and regulation by the OCFI.
Moreover, the amount to be carried over to a particular year is limited to 90% of the net income for the year for regular tax purposes and 70% of the net income for the year for alternative minimum tax (“AMT”) purposes.
During 2024, the Bank became subject to the Consumer Financial Protection Bureau (the “CFPB”) supervisory and enforcement authority with respect to consumer financial laws. The Bank’s activities in the USVI are also subject to regulation and examination by the USVI Banking Board.
The Bank is subject to extensive regulation and examination by the OCFI and the FDIC and is subject to the Federal Reserve Board’s regulation of transactions between the Bank and its affiliates. In 2024, the Bank became subject to the Consumer Financial Protection Bureau (the “CFPB”) supervisory and enforcement authority with respect to consumer financial laws.
OPC, a Florida corporation, is an OFG subsidiary that was engaged in the administration and servicing of retirement plans in the U.S., Puerto Rico, and the Caribbean.
Oriental Trust, the Bank’s trust division, provides trustee and paying agent services to retirement plans in Puerto Rico, and 5 provides other corporate trust services. Oriental Pension Consultants, Inc. (“OPC”), a Florida corporation, was an OFG subsidiary engaged in the administration and servicing of retirement plans in the U.S., Puerto Rico, and the Caribbean.
The Bank is regulated by various agencies in the United States and the Commonwealth of Puerto Rico. Its main regulators are the OCFI and the FDIC. The Bank is subject to extensive regulation and examination by the OCFI and the FDIC and is subject to the Federal Reserve Board’s regulation of transactions between the Bank and its affiliates.
The Federal Reserve Board also has the authority to issue cease and desist orders against bank holding companies and their non-bank subsidiaries. 8 The Bank is regulated by various agencies in the United States and the Commonwealth of Puerto Rico. Its main regulators are the OCFI and the FDIC.
As of December 31, 2024, OFG had 2,246 employees, none of which are represented by a collective bargaining group. Employee Experience and Culture We believe that maintaining an emotional connection with our employees is key to achieving our vision and results. In our latest annual engagement survey in collaboration with Gallup, Inc.
As of December 31, 2025, OFG had 2,185 employees, none of which are represented by a collective bargaining group. Employee Experience and Culture Creating meaningful connections with employees remains essential to performance and long-term success.
We also provide targeted benefits aimed at promoting work-life balance, such as paid time-off for vacation, illness, maternity and paternity leave, community service leave, personal days, and flexible work arrangements, among others.
Work life balance is enhanced through benefits such as paid vacation, illness leave, maternity and paternity leave, community service time, personal days, and flexible work arrangements. 7 Management and Board Oversight Management contributes to human capital governance through regular updates, risk management processes, and structured succession planning.
Removed
In March 2024, the Bank organized OBPEF LLC (“OBPEF”), as a wholly owned subsidiary of the Bank and a private equity fund under the Puerto Rico Incentives Code, as amended (the “Incentives Code”), whose objective is to provide financing to eligible borrowers, whether in the form of senior or subordinated debt, to support the economic development of Puerto Rico.
Added
OFG’s mission is to make possible the progress of our customers, employees, shareholders, and communities we serve. As the world evolves rapidly, we seek to amplify our ambition, with the goal of advancing from steady progress to bold transformation.
Removed
As part of the Company’s ongoing strategic reviews, OFG sold the retirement plan administration business of its subsidiary Oriental Pension Consultants, Inc. (“OPC”) effective as of December 30, 2022, and thereafter ceased its operations. OFG’s mission is to make possible the progress of our customers, employees, shareholders, and communities we serve.
Added
We believe that our strategy is designed to accelerate our transformation into a fully digital, data-driven, customer-centric financial institution, while maintaining the strong human relationships that define our brand. OFG aims to deliver intelligent growth, operational excellence, and deeper financial empowerment to make progress possible for our communities.
Removed
OFG has been deploying its Digital First strategy to achieve this mission. Our strategy highly differentiates OFG through a sales and service business model and culture that emphasizes convenience and accessibility through digital channels while creating a simple, self-service and enjoyable customer experience.
Added
Our strategy aspires to position OFG as a trusted digital financial coach, by understanding the customers’ objectives and needs by offering value-added services that help them achieve financial progress and well-being. OFG is transitioning from a digital-first model to a truly digital bank, one where customers should be able to perform every financial activity seamlessly, securely, and intuitively, anytime, anywhere.
Removed
OFG strives to proactively identify the customer’s objectives and needs to offer value added services that help them achieve financial progress and well-being. Our promise is to provide financial services and solutions that are “Rápido, Fácil y Bien Hecho” (“Fast, Easy and Well Done”).
Added
Our goal is to provide a one-stop digital experience that is enriched by human connection and powered by intelligence.
Removed
This Digital First vision is anchored on four main pillars: • Digital First: Our digital channels are (a) always available, (b) easy to use, (c) fast, (d) consistent, and (e) self-service with instant results with customers controlling how and when to transact.
Added
Our strategy is anchored on four main pillars: • Customer Insights & Personalization: To enhance customer engagement, improve decision making and drive sustainable growth, with a unified, 360-degree view of the customer leverage on advance analytics to understand financial behaviors, patterns and lifecycle events to generate actionable customer insights that support the customer needs. • Human Connection: Empower people by helping them to have smarter conversations while building trust and guiding customers through their most important financial decisions. • Digital Bank: Become a truly digital bank, one where customers can do everything they would in a branch.
Removed
All routine transactions are available digitally, with an omnichannel approach. • Relationships and Interactions: Branches transformed from a place where customers carry out transactions to a hub where they receive advice and foster business development. Expert financial guidance is provided through digital and in person channels. • Operational excellence: Our operations work flawlessly.
Added
The bank is no longer a place, but an experience that lives in their pockets, always ready, always personal, and better than ever. • Business Excellence: OFG drives operational excellence through an agile operating model that is deeply embedded in our business and culture.
Removed
Our technology, systems and processes are trouble free, secure, automated, efficient and low latency. We relentlessly pursue the improvement of our processes. • Customer Insights: Readily available, timely insights that empower customers to monitor and manage their finances.
Added
The FDIC insures the Bank’s deposit accounts up to applicable limits. Management makes retail deposit pricing decisions periodically, adjusting the rates paid on retail deposits in response to general market conditions and local competition.
Removed
Our banking experts are equipped with the knowledge to proactively help customers achieve their financial aspirations. 3 Our strategy to become a digital first bank will continue to be carried by investing in our: • People to attract, retain, and develop people with necessary capabilities and skills for digital transformation with a strong customer service orientation, flexibility, and good collaboration skills, in addition to technical capabilities needed for specific jobs. • Technology to make systems and processes oriented to provide digital customer service interactions above all else aiming for self-service to become the norm. • Analytics to enhance our vision, empower business and drive profitability by anticipating our customers’ needs and proactively offer them solutions through the most appropriate channel. • Business Development to build an engine of growth with intelligence of customer behavior and experience across the whole sales process from awareness to the final purchase and amplify digital sales models.
Added
The proprietary credit scoring system is a fundamental part of the decision process. Consumer loans: Consumer loans include personal loans, residential solar panel loans, credit cards, lines of credit and other loans made by the Bank to individual borrowers.
Removed
OFG’s long-term goal is to strengthen its banking and financial services franchise by expanding its lending businesses, increasing the level of integration in the marketing and delivery of banking and financial services, continuously improving our already effective asset-liability management, growing non-interest revenue from banking and financial services, and achieving greater operating efficiencies.
Added
On December 30, 2022, the Bank and OPC sold the rights to administer and service the retirement plans of its customers, and OPC was dissolved on December 30, 2025, effective January 1, 2026. Treasury Activities Treasury activities encompass all of OFG’s treasury-related functions.
Removed
OFG’s key drivers are: • Build relationships with customers by refining service delivery and providing innovative banking technologies for day-to-day customer transactions, and achieving sustainable levels of differentiation in the market; • Further grow and improve performance in all operating areas; • Continue to invest for the future in transforming our business model, emphasize customer experience, further simplifying operations, improving efficiencies and enhancing our ability to serve customers; • Focusing on greater growth in commercial and retail lending and financial services; and • Implementing a broad ranging effort to instill in employees and make customers aware of OFG’s determination to effectively serve and advise our customer base in a responsive and professional manner.
Added
This shared purpose shapes a talent strategy centered on our workforce and designed to ensure employees have the capabilities needed today and in the future. The approach emphasizes agility, visibility into skills, and easy access to resources, enabling strong alignment between business priorities and workforce readiness.
Removed
OFG measures the performance of these reportable segments based on pre-established annual goals involving different financial parameters such as net income.
Added
In the most recent employee engagement survey conducted in partnership with Gallup, participation reached a record 93%, and the organization maintained strong engagement levels, doubling the engagement ratio since 2022 and surpassing Gallup benchmarks for Puerto Rico and the U.S. The average engagement score increased to 4.08 out of 5, marking a 23-point improvement since 2022.
Removed
The Bank had a subservicing arrangement with a third party for a portion of its acquired loan portfolio that was terminated on May 1, 2023. After such termination, OFG services all of its mortgage loan portfolio. Loan Underwriting Auto loans: OFG provides financing for the purchase of new or used motor vehicles.
Added
Leaders are supported through a self-service platform powered by AI that provides real time analytics, insights, recommended actions, and learning tools focused on expectations, recognition, collaboration, and development. Workshops help leaders interpret results and connect them to broader business outcomes. OFG continues strengthening a culture rooted in purpose, learning, and results.
Removed
On December 30, 2022, the Bank sold the rights to administer and service the retirement plans of its customers, and Oriental Pension Consultants ceased operations. 6 Oriental Trust, the Bank’s trust division, provides trustee and paying agent services to retirement plans in Puerto Rico, and provides other corporate trust services.

… 44 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

43 edited+19 added−2 removed100 unchanged
Biggest changeOFG may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to its clients. Failure to successfully keep pace with technological change affecting the financial services industry could negatively affect OFG’s growth, revenue, and profit. Competition with other financial institutions could adversely affect our profitability.
Biggest changeRegulatory frameworks governing AI in financial services are also evolving, and future regulations may impose compliance burdens or restrict certain AI applications, which could limit our ability to fully realize the potential benefits of these technologies. Failure to successfully keep pace with technological change affecting the financial services industry could negatively affect our growth, revenue, and profit.
While Puerto Rico’s economy has been gradually recovering, it still faces economic and fiscal challenges and could face additional economic or fiscal challenges in the future. Deterioration in local economic conditions or in the financial condition of an industry on which the local market depends could adversely affect factors such as unemployment rates and real estate vacancy and values.
While Puerto Rico’s economy has been gradually recovering, it still faces economic and fiscal challenges and could face additional economic or fiscal challenges in the future. Deterioration in local economic conditions or 18 in the financial condition of an industry on which the local market depends could adversely affect factors such as unemployment rates and real estate vacancy and values.
In 26 the event that such sources of funds are reduced or eliminated, and we are not able to replace them on a cost-effective basis, we may be forced to curtail or cease our loan origination business and treasury activities, which would have a material adverse effect on our operations and financial condition.
In the event that such sources of funds are reduced or eliminated, and we are not able to replace them on a cost-effective basis, we may be forced to curtail or cease our loan origination business and treasury activities, which would have a material adverse effect on our operations and financial condition.
Cybersecurity incidents may include unauthorized access to our digital systems for purposes of misappropriation of assets, gaining access to sensitive information, corrupting data, or causing operational disruption. Although our information technology structure continues to be subject to cyber-attacks, we have not, to our knowledge, experience a breach of cyber-security.
Cybersecurity incidents may include unauthorized access to our digital systems for purposes of misappropriation of assets, gaining access to sensitive information, corrupting data, or causing operational disruption. Although our information technology structure continues to be subject to cyber-attacks, we have not, to our knowledge, experience a breach of cyber- 22 security.
In that event, our cost of funds may increase, thereby reducing the net interest income, or we may need to dispose of a portion of the investment portfolio, which, depending upon market conditions, could result in realizing a loss or experiencing other adverse accounting consequences upon such dispositions.
In that event, our cost of funds may increase, thereby reducing the net interest income, or we may need to dispose of a portion of the investment portfolio, which, depending upon market conditions, could result in realizing a loss or experiencing other 24 adverse accounting consequences upon such dispositions.
Any such natural disasters may further adversely affect Puerto Rico’s and the USVI’s critical infrastructure, which are generally weak and necessitating capital investment. This makes us vulnerable to downturns in Puerto Rico’s and the USVI’s economy as a result of natural disasters, the severity of which could increase as a result of the effects of climate change.
Any such natural disasters may further adversely affect Puerto Rico’s and the USVI’s infrastructure, which are generally weak and necessitating capital investment. This makes us vulnerable to downturns in Puerto Rico’s and the USVI’s economy as a result of natural disasters, the severity of which could increase as a result of the effects of climate change.
If an impairment loss is recorded, it will have little or no impact on the tangible book value of our common shares or our regulatory capital levels, but such an impairment loss could significantly restrict OFG’s ability to make dividend payments without prior regulatory approval.
If an impairment loss is recorded, it will have little or no impact on the tangible book value of our common shares or our regulatory capital levels, but such an impairment loss could significantly restrict our ability to make dividend payments without prior regulatory approval.
In addition, we 22 may be required to indemnify certain purchasers and others against losses they incur in the event of breaches of our representations and warranties and in various other circumstances, including securities fraud claims, and the amount of such losses could exceed the purchase amount of the related loans.
In addition, we may be required to indemnify certain purchasers and others against losses they incur in the event of breaches of our representations and warranties and in various other circumstances, including securities fraud claims, and the amount of such losses could exceed the purchase amount of the related loans.
Delinquency rates and non-performing assets may increase if Puerto Rico’s economy enters into a recession, or if there is a decline in economic activity, additional increases in the ACL could be necessary with further adverse effects on our profitability.
Delinquency rates and non-performing 21 assets may increase if Puerto Rico’s economy enters into a recession, or if there is a decline in economic activity, additional increases in the ACL could be necessary with further adverse effects on our profitability.
The IBEs have an exemption from Puerto Rico income taxes on interest earned on, or gain realized from the sale of, non-Puerto Rico assets, including U.S. government obligations and certain mortgage-backed securities. These qualified activities have allowed us to have an effective tax rate below the maximum statutory tax rate.
The IBEs have an exemption from Puerto Rico income taxes on interest earned on, or gain realized from the sale of, non-Puerto Rico assets, including U.S. government obligations and certain mortgage-backed securities. These qualified activities have allowed us to have an effective tax rate ( “ ETR ” ) below the maximum statutory tax rate.
These rates are highly sensitive to many factors beyond OFG’s control, including general economic conditions, inflation, unemployment, money supply, fiscal policies of the U.S. government and regulatory authorities, domestic and international events, as act of war, and events in U.S. and other financial markets.
These rates are highly sensitive to many factors beyond our control, including general economic conditions, inflation, unemployment, money supply, fiscal policies of the U.S. government and regulatory authorities, domestic and international events, as act of war, and events in U.S. and other financial markets.
Based on our annual goodwill impairment test and our impairment evaluation of intangibles, we determined that no impairment charges were necessary as of December 31, 2024. However, there can be no assurance that future evaluations of such goodwill or intangibles will not result in any impairment charges.
Based on our annual goodwill impairment test and our impairment evaluation of intangibles, we determined that no impairment charges were necessary as of December 31, 2025. However, there can be no assurance that future evaluations of such goodwill or intangibles will not result in any impairment charges.
Climate change presents multi-faceted risks, including: operational risk from the physical effects of climate events on OFG and its clients’ facilities and other assets; credit risk from borrowers with significant exposure to climate risk; transition risks associated with the transition to a less carbon-dependent economy; and reputational risk from stakeholder concerns about our practices related to climate change, OFG’s carbon footprint, and its business relationships with clients who operate in carbon-intensive industries.
Climate change presents multi-faceted risks, including: operational risk from the physical effects of climate events on us and our clients’ facilities and other assets; credit risk from borrowers with significant exposure to climate risk; transition risks associated with the transition to a less carbon-dependent economy; and reputational risk from stakeholder concerns about our practices related to climate change, our carbon footprint, and its business relationships with clients who operate in carbon-intensive industries.
In the event other legislation is enacted by the Puerto Rico government to eliminate or modify the tax exemption provided to IBEs, the consequences could have a materially adverse impact on our financial results, including an increase in income tax expense and consequently our effective tax rate, adversely affecting our financial condition, results of operations and cash flows. ITEM 1B.
In the event other legislation is enacted by the Puerto Rico government to eliminate or modify the tax exemption provided to IBEs, the consequences could have a materially adverse impact on our financial results, including an increase in income tax expense and consequently our ETR, adversely affecting our financial condition, results of operations and cash flows. ITEM 1B.
OFG’s earnings depend substantially on OFG’s interest rate spread, which is the difference between (i) the rates earned on loans, securities, and other earning-assets and (ii) the interest rates paid on deposits and other borrowings.
Our earnings depend substantially on our interest rate spread, which is the difference between (i) the rates earned on loans, securities, and other earning-assets and (ii) the interest rates paid on deposits and other borrowings.
In addition, our right to participate in a distribution of assets upon a subsidiary’s liquidation or reorganization is subject to the prior claims of the subsidiary’s creditors. COMPETITIVE AND STRATEGIC RISK Failure to keep pace with technological change could adversely affect OFG’s results of operations and financial condition.
In addition, our right to participate in a distribution of assets upon a subsidiary’s liquidation or reorganization is subject to the prior claims of the subsidiary’s creditors. COMPETITIVE AND STRATEGIC RISK Failure to keep pace with technological change, including developments in artificial intelligence, could adversely affect OFG’s results of operations and financial condition.
Any subsequent earthquakes, hurricanes, major storms or other natural disasters could negatively affect or disrupt our operations and customer base and materially impact our business. 20 Climate change presents both immediate and long-term risks to OFG and its clients, and these risks are expected to increase over time.
Any subsequent earthquakes, hurricanes, major storms or other natural disasters could negatively affect or disrupt our operations and customer base and materially impact our business. Climate change presents both immediate and long-term risks to us and our clients, and these risks are expected to increase over time.
OFG’s future success depends, in part, upon its ability to address client needs by using technology to provide products and services that will satisfy client demands, as well as to create additional efficiencies in OFG’s operations.
Our future success depends, in part, upon our ability to address client needs by using technology to provide products and services that will satisfy client demands, as well as to create additional efficiencies in our operations.
During 2024, we repurchased $6.1 million of loans from GNMA and FNMA. We have established reserves in our consolidated financial statements for potential losses that are considered to be both probable and reasonably estimable related to the mortgage loans sold by us.
During 2025, we repurchased $4.6 million of loans from GNMA and FNMA. We have established reserves in our consolidated financial statements for potential losses that are considered to be both probable and reasonably estimable related to the mortgage loans sold by us.
The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services, such as artificial intelligence technologies. The effective use of technology increases efficiency and enables financial institutions to better serve clients and to reduce costs.
The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services, including artificial intelligence (“AI”) technologies. The effective use of technology increases efficiency and enables financial institutions to better serve clients and reduce costs.
Geopolitical and macroeconomic uncertainty, including military actions and terrorist attacks, have negatively impacted and will continue to have a significant negative impact on the global and United States economies.
Geopolitical and macroeconomic uncertainty, including military actions and terrorist attacks, have negatively impacted and will continue to have a significant negative impact on the global and U.S. economies.
We face substantial competition in originating loans and in attracting deposits and assets to manage. The competition in originating loans and attracting assets comes principally from other Puerto Rico, U.S., and foreign banks, investment advisors, securities broker-dealers, mortgage banking companies, consumer finance companies, credit unions, insurance companies, and other institutional lenders and purchasers of loans.
The competition in originating loans and attracting assets comes principally from other Puerto Rico, U.S., and foreign banks, investment advisors, securities broker-dealers, mortgage banking companies, consumer finance companies, credit unions, insurance companies, fintech companies and other institutional lenders and purchasers of loans.
If market interest rates decline, OFG could experience lower interest income from its variable rate commercial loans and prepayments or refinancing of higher fixed-rate loans.
Furthermore, if market interest rates decline, we could experience lower interest income from our variable rate commercial loans and prepayments or refinancing of higher fixed-rate loans.
Reputational risk and social factors may impact our results. Our ability to originate loans and to attract deposits and assets is highly dependent upon the perceptions of consumer, commercial and funding markets of our business practices and our financial health.
Our ability to originate loans and to attract deposits and assets is highly dependent upon the perceptions of consumer, commercial and funding markets of our business practices and our financial health.
Legislative changes, particularly changes in local tax laws, could adversely impact our results of operations. The Puerto Rico government has enacted tax reforms in the past providing, among other things, for changes in income tax rates and the expansion of certain taxes, such as the sales and use tax, and may do so again in the future.
The Puerto Rico government has enacted tax reforms in the past providing, among other things, for changes in income tax rates and the expansion of certain taxes, such as the sales and use tax, and may do so again in the future.
If the economic conditions in Puerto Rico or the United States deteriorate, we may experience increased credit costs or need to take greater than anticipated markdowns and make greater than anticipated provisions to increase the ACL that could adversely affect our financial condition and results of operations in the future.
Additions to the ACL would result in a decrease of net earnings and capital and could hinder our ability to pay dividends. 20 If the economic conditions in Puerto Rico or the United States deteriorate, we may experience increased credit costs or need to take greater than anticipated markdowns and make greater than anticipated provisions to increase the ACL that could adversely affect our financial condition and results of operations in the future.
In addition, changes in foreign policy, economic sanctions, and regulatory frameworks can alter trade dynamics and investment flows, which could adversely impact the markets in which we operate. 23 The full impact of ongoing and any future global military actions are not known at this time, but they could result in economic disruption, supply-chain interruptions, heightened volatility in financial and commodity markets, and diminished consumer, business and investor confidence, among others, adversely impacting the financial services industry generally and our business, financial condition, results of operation, and stock price.
The full impact of ongoing and any future global military actions are not known at this time, but they could result in economic disruption, supply-chain interruptions, heightened volatility in financial and commodity markets, and diminished consumer, business and investor confidence, among others, adversely impacting the financial services industry generally and our business, financial condition, results of operation, and stock price.
Among other factors, any declines in our common stock as a result of macroeconomic conditions and any weakness in the Puerto Rico economy could lead to an impairment of such assets.
Among other factors, any declines in our common stock as a result of macroeconomic conditions and any weakness in the Puerto Rico economy could lead to an impairment of such assets. If such assets become impaired, it could have a negative impact on our results of operations.
Furthermore, if market interest rates increase, OFG could have competitive pressure to increase the rates on its deposits, which could result in a decrease of its net interest income and borrowers of variable rate commercial loans may experience difficulties paying their heightened debt service.
If market interest rates increase, we could have competitive pressure to increase the rates on our deposits, which could result in a decrease of our net interest income and borrowers of variable rate commercial loans may experience difficulties paying their heightened debt service. Our earnings can also be impacted by the spread between short-term and long-term market interest rates.
For example, the Dodd-Frank Act has a broad impact on the financial services industry, including significant regulatory and compliance changes, as discussed under the subheading “Dodd-Frank Wall Street Reform and Consumer Protection Act” in Item 1 of this annual report on Form 10-K. 27 We may be required to invest significant management attention and resources to evaluate and make necessary changes in order to comply with new statutory and regulatory requirements.
For example, the Dodd-Frank Act has a broad impact on the financial services industry, including significant regulatory and compliance changes, as discussed under the subheading “Dodd-Frank Wall Street Reform and Consumer Protection Act” in Item 1 of this annual report on Form 10-K.
If such assets become impaired, it could have a negative impact on our results of operations. 28 Legislative and other measures that may be taken by Puerto Rico governmental authorities could materially increase our tax burden or otherwise adversely affect our financial condition, results of operations or cash flows.
Legislative and other measures that may be taken by Puerto Rico governmental authorities could materially increase our tax burden or otherwise adversely affect our financial condition, results of operations or cash flows. Legislative changes, particularly changes in local tax laws, could adversely impact our results of operations.
Though we have insurance against some cyber-risks and attacks, it may not be sufficient to offset the impact of a material loss event. 24 We rely on third parties to provide services and systems essential to the operation of our business, and any failure, interruption or termination of such services or systems could have a material adverse effect on our financial condition and results of operations.
We rely on third parties to provide services and systems essential to the operation of our business, and any failure, interruption or termination of such services or systems could have a material adverse effect on our financial condition and results of operations.
In an effort to address inflation, the Federal Open Market Committee of the Board of Governors of the Federal Reserve System (“FRB”) tightened monetary policy back in 2022 and 2023. During 2024, monetary policy changed, and interest rate cuts were implemented. However, these interest rate cuts were not as frequent as expected, causing market volatility.
In an effort to address inflation, the Federal Open Market Committee of the Federal Reserve Board tightened monetary policy back in 2022 and 2023. In 2024, monetary policy changed, and interest rate cuts were implemented and they continued in 2025.
Failure to comply with the new requirements may negatively impact our results of operations and financial condition and may limit our ability to implement our strategic initiatives. While we cannot predict what effect any presently contemplated or future changes in the laws or regulations or their interpretations would have on us, these changes could be materially adverse to our investors.
While we cannot predict what effect any presently contemplated or future changes in the laws or regulations or their interpretations would have on us, these changes could be materially adverse to our investors. Reputational risk and social factors may impact our results.
Our operations are subject to extensive regulation by federal and local governmental authorities and are subject to various laws and judicial and administrative decisions imposing requirements and restrictions on all or part of our operations. Because our business is highly regulated, the laws, rules and regulations applicable to us are subject to regular modification and change.
We operate in a highly regulated industry and may be adversely affected by changes in federal and local laws and regulations. Our operations are subject to extensive regulation by federal and local governmental authorities and are subject to various laws and judicial and administrative decisions imposing requirements and restrictions on all or part of our operations.
No assurance can be given that any such deposit will be available in the future. If we are unable to maintain or grow our deposits for any reason, we may be subject to paying higher funding costs and our net interest income may decrease. 25 Consumer protection laws may reduce our noninterest income.
If we are unable to maintain or grow our deposits for any reason, we may be subject to paying higher funding costs and our net interest income may decrease. Consumer protection laws may reduce our noninterest income. We are subject to a number of federal and state consumer protection laws that extensively govern our relationship with our customers.
In addition, shifts in political priorities and public policy in key global markets can influence economic conditions in the U.S. and Puerto Rico.
In addition, shifts in political priorities and public policy in key global markets can influence economic conditions in the U.S. and Puerto Rico. In addition, changes in foreign policy, economic sanctions, and regulatory frameworks can alter trade dynamics and investment flows, which could adversely impact the markets in which we operate.
We are subject to a number of federal and state consumer protection laws that extensively govern our relationship with our customers. The Dodd-Frank Act established the CFPB with powers to supervise and enforce federal consumer protection laws.
The Dodd-Frank Act established the CFPB with powers to supervise and enforce federal consumer protection laws.
Furthermore, we have a significant amount of collateralized deposits from the Puerto Rico government, its instrumentalities and municipalities ($1.445 billion, or approximately 15.0% of our total deposits, as of December 31, 2024), of which a $1.2 billion consist of a deposit that will reprice in May 15, 2025, and the amount of these deposits may fluctuate depending on the financial condition and liquidity of these entities, as well as on our ability to maintain these customer relationships.
Furthermore, we have a significant amount of collateralized deposits from the Puerto Rico government, its instrumentalities and municipalities ($1.676 billion, or approximately 16.3% of our total deposits, as of December 31, 2025), of which a $1.1 billion consist of a deposit that had $500 million moved to our wealth management business as an advisory account in January 23 2026 and the remaining $638 million will reprice on May 15, 2026.
These uncertainties may also heighten credit risks, reduce economic activity, and limit growth opportunities, potentially impacting our financial performance and ability to operate effectively in Puerto Rico. Changes in interest rates could adversely affect OFG’s results of operations and financial condition.
These uncertainties may also heighten credit risks, reduce economic activity, and limit growth opportunities, potentially impacting our financial performance and ability to operate effectively in Puerto Rico. Adverse developments in federal trade policy and the phasing-out of federal emergency and stimulus funds may impact our business and stock price.
OFG’s earnings can also be impacted by the spread between short-term and long-term market interest rates. 21 CREDIT RISK Heightened credit risk could require us to increase our provision for credit losses, which could have a material adverse effect on our results of operations and financial condition.
CREDIT RISK Heightened credit risk could require us to increase our provision for credit losses, which could have a material adverse effect on our results of operations and financial condition. Originating loans is an essential element of our business, and there is a risk that the loans will not be repaid.
We will encounter greater competition as we expand our operations. Increased competition may require us to increase the rates paid on deposits or lower the rates charged on loans, which could adversely affect our profitability. We operate in a highly regulated industry and may be adversely affected by changes in federal and local laws and regulations.
As we seek to grow our 25 business and operations, we expect to encounter greater competition from both traditional financial institutions and non-bank competitors. Increased competition may require us to increase the rates paid on deposits or lower the rates charged on loans, which could adversely affect our profitability.
If consumers develop or maintain negative attitudes about incurring debt, or if consumption trends decline, our business and financial results will be negatively affected. ACCOUNTING AND TAX RISK Changes in accounting standards issued by the Financial Accounting Standards Board (“FASB”) or other standard-setting bodies may adversely affect our financial statements.
If consumers develop or maintain negative attitudes about incurring debt, or if consumption trends decline, our business and financial results will be negatively affected. Our adoption of artificial intelligence technologies exposes us to evolving legal, regulatory, and operational risks.
Removed
Originating loans is an essential element of our business, and there is a risk that the loans will not be repaid.
Added
Recent shifts in trade policy may have a significant negative impact on the local, U.S. and global economies, including supply chain disruption and price inflation. Periods of increased global economic and geopolitical uncertainties caused by changes in U.S. trade policy have resulted in considerable volatility in the trading markets and may increase the risk of a recession.
Removed
Additions to the ACL would result in a decrease of net earnings and capital and could hinder our ability to pay dividends.
Added
In addition, proposed significant reductions in federal spending, including cuts to programs and funding streams, could impact the federal emergency and stimulus funds that are vital to Puerto Rico’s economy. Many of Puerto Rico’s government programs and services are supported by these funds and their phase-out could adversely impact Puerto Rico’s economy.
Added
As a financial institution with its main operations in Puerto Rico, we are exposed to the potential negative effects of the phase-out of these federal funds and the uncertainty it creates in the local economy These uncertainties may also lead to heightened credit risks, 19 reduced economic activity, and limited growth opportunities, thereby potentially adversely impacting our financial performance.
Added
Furthermore, these developments have adversely impacted, and could continue to adversely impact, the market price of our common stock. Changes in interest rates could adversely affect OFG’s results of operations and financial condition.
Added
Though we have insurance against some cyber-risks and attacks, it may not be sufficient to offset the impact of a material loss event.
Added
The amount of these deposits may fluctuate depending on the financial condition and liquidity of these entities, as well as on our ability to maintain these customer relationships. No assurance can be given that any such deposit will be available in the future.
Added
We may not be able to effectively implement new technology-driven products and services, including AI-based solutions, or be successful in marketing these products and services to our clients. The rapid evolution of AI technologies presents risks from competitors that more effectively leverage AI capabilities and thus may gain significant advantages in operational efficiency, customer service, risk management, and product development.
Added
Additionally, the integration of AI into our operations may require substantial investment in technology infrastructure, talent acquisition, and ongoing training, and there can be no assurance that such investments will yield the anticipated benefits.
Added
Competition with other financial institutions could adversely affect our profitability. We face substantial competition in originating loans, attracting deposits and growing assets under management.
Added
In addition, technological advancements and the emergence of digital banking platforms have lowered barriers to entry, enabling new market participants to compete for our customers. Our failure to effectively compete for customers could result in a loss of market share and have a material adverse effect on our business, financial condition, or results of operations.
Added
Because our business is highly regulated, the laws, rules and regulations applicable to us are subject to regular modification and change.
Added
We may be required to invest significant management attention and resources to evaluate and make necessary changes in order to comply with new statutory and regulatory requirements. Failure to comply with the new requirements may negatively impact our results of operations and financial condition and may limit our ability to implement our strategic initiatives.
Added
We have adopted AI technologies for certain aspects of our operations, mainly customer service channels and data analytics, and may further incorporate AI capabilities in the future. We do not build or maintain proprietary AI systems. Instead, we utilize AI solutions provided by third-party technology vendors.
Added
Our reliance on these external AI platforms extends to tools that support real-time business analytics and improve operational decision-making. We also face indirect exposure to AI-related risks through vendors, business partners, and customers who may employ AI technologies in ways that affect our operations or services.
Added
The rapidly evolving nature of AI regulation and technology creates significant uncertainty for our business.
Added
Federal and state lawmakers are actively developing new rules governing AI deployment, while existing regulatory frameworks—including consumer protection laws enforced by the CFPB, data privacy requirements under the Gramm-Leach-Bliley Act, and fair lending statutes—are being interpreted and applied to AI use cases in ways that remain unsettled.
Added
As a financial institution with more than $10 billion in assets, we face heightened regulatory scrutiny of our consumer-facing technologies, including AI applications. Our dependence on third-party AI vendors means that provider failures, service disruptions, or contract terminations could impair certain business functions with limited ability to quickly pivot to alternative solutions.
Added
Additionally, cybercriminals are increasingly using AI to conduct more sophisticated attacks against financial institutions.
Added
Failure to promptly adapt to and effectively implement security measures in response to rapidly evolving technological threats could significantly heighten our risks of data breaches, financial fraud, operational disruptions, regulatory scrutiny, reputational harm, and financial losses. 26 ACCOUNTING AND TAX RISK Changes in accounting standards issued by the Financial Accounting Standards Board (“FASB”) or other standard-setting bodies may adversely affect our financial statements.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

8 edited+1 added−0 removed6 unchanged
Biggest changeOFG also conducts due diligence of third-party software and related services and reviews cybersecurity reports from technology services providers to ensure that our cybersecurity infrastructure can respond to evolving cybersecurity risks relevant to our business. 29 Pursuant to our cybersecurity risk management framework, our Information Security team develops an annual information security awareness plan to educate employees as to OFG’s standards, processes and practices with respect to information security, potential cybersecurity threats and proper use of information security resources entrusted to them, with the goal of minimizing possible employee security risks.
Biggest changePursuant to our cybersecurity risk management framework, our Information Security team develops an annual information security awareness plan to educate employees as to OFG’s standards, processes and practices with respect to information security, potential cybersecurity threats and proper use of information security resources entrusted to them, with the goal of minimizing possible employee security risks.
Cybersecurity Governance Our Board is responsible for overseeing OFG’s cybersecurity efforts and approving the Information Security Program, which sets forth OFG’s policy regarding the confidentiality, integrity and availability of its information assets. The Board’s Risk and Compliance Committee more directly oversees the implementation of the Information Security Program and receives quarterly reports on any cybersecurity risks.
Cybersecurity Governance Our Board is responsible for overseeing our cybersecurity efforts and approving the Information Security Program, which sets forth OFG’s policy regarding the confidentiality, integrity and availability of its information assets. The Board’s Risk and Compliance Committee more directly oversees the implementation of the Information Security Program and receives quarterly reports on any cybersecurity risks.
Our cybersecurity risk management framework is integrated into OFG’s broader risk management system with a focus on monitoring key risk indicators within a defined risk tolerance set by our Board.
Our cybersecurity risk management framework is integrated into our broader risk management system with a focus on monitoring key risk indicators within a defined risk tolerance set by our Board.
OFG uses external consultants and other third-party service providers to monitor our information systems for any cyberattacks, impersonators or unauthorized releases of sensitive customer data, as well as performing investigations and penetration testing, identifying system vulnerabilities and required software patches, monitoring and managing firewalls, and advising on systems and cloud architecture.
We use external consultants and other third-party service providers to monitor our information systems for any cyberattacks, impersonators or unauthorized releases of sensitive customer data, as well as performing investigations and penetration testing, identifying system vulnerabilities and required software patches, monitoring and managing firewalls, and advising on systems and cloud architecture.
In addition, our cybersecurity risk management framework incorporates three lines of defense, each with defined roles and responsibilities. OFG conducts an annual cybersecurity maturity assessment to (a) evaluate its cybersecurity risk management practices and (b) develop action plans for improving its cybersecurity risk management program.
In addition, our cybersecurity risk management framework incorporates three lines of defense, each with defined roles and responsibilities. We conduct an annual cybersecurity maturity assessment to (a) evaluate its cybersecurity risk management practices and (b) develop action plans for improving its cybersecurity risk management program.
ITEM 1C. CYBERSECURITY Cybersecurity Risk Management Strategy OFG has a comprehensive framework in place to assess, identify and manage material risks from cybersecurity threats. Our Information Security Officer (“ISO”) is responsible for overseeing and implementing OFG’s cybersecurity risk management framework as part of our broader Information Security Program approved by our Board.
ITEM 1C. CYBERSECURITY Cybersecurity Risk Management Strategy We have a comprehensive framework in place to assess, identify and manage material risks from cybersecurity threats. Our Information Security Officer (“ISO”) is responsible for overseeing and implementing our cybersecurity risk management framework as part of our broader Information Security Program approved by our Board.
Any identified cybersecurity incidents must be reported to the ISO and the mitigation and remediation thereof is performed by the Incident Response Team, which is led by the ISO and composed of key executives, with identified call trees and key service providers to support the coordination of a rapid response.
Any identified cybersecurity incidents must be reported to the ISO and the mitigation and remediation thereof is performed by the Incident Response Team, which is led by the ISO and composed of key executives, with identified call trees and key service providers to support the coordination of a rapid response. 28 In the last three fiscal years, we have not experienced any material cybersecurity incidents, and expenses incurred from any cybersecurity incidents were immaterial.
In the last three fiscal years, OFG has not experienced any material cybersecurity incidents, and expenses incurred from any cybersecurity incidents were immaterial. For more information on the risks to the Company of future cybersecurity threats or incidents, see “Item 1A, Risk Factors — Operations and Business Risks.”
For more information on the risks to the Company of future cybersecurity threats or incidents, see “Item 1A, Risk Factors — Operations and Business Risks.”
Added
We also conduct due diligence of third-party software and related services and reviews cybersecurity reports from technology services providers to ensure that our cybersecurity infrastructure can respond to evolving cybersecurity risks relevant to our business.

Item 2. Properties

Properties — owned and leased real estate

4 edited+0 added−0 removed2 unchanged
Biggest changeAt 2024, the aggregate future rental commitments under the terms of its leases, exclusive of taxes, insurance and maintenance expenses payable by OFG, was approximately $21.4 million. OFG’s investment in premises and equipment, exclusive of leasehold improvements at 2024, was $174.7 million, gross of accumulated depreciation. ITEM 3 .
Biggest changeAt December 31, 2025, the aggregate future rental commitments under the terms of its leases, exclusive of taxes, insurance and maintenance expenses payable by OFG, was approximately $23.2 million. OFG’s investment in premises and equipment, exclusive of leasehold improvements at 2025, was $164.0 million, gross of accumulated depreciation. ITEM 3 .
Based upon a review by legal counsel and the development of these matters to date, management is of the opinion that the ultimate aggregate liability, if any, resulting from these claims will not have a material adverse effect on OFG’s financial condition or results of operations. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 30 PART II
Based upon a review by legal counsel and the development of these matters to date, management is of the opinion that the ultimate aggregate liability, if any, resulting from these claims will not have a material adverse effect on OFG’s financial condition or results of operations. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II
ITEM 2. PROPERTIES At December 31, 2024, OFG owns a fifteen-story office building located at 254 Muñoz Rivera Avenue, San Juan, Puerto Rico, known as “Oriental Center”, where its executive offices are located. OFG operates a full-service branch at the plaza level and its centralized units and subsidiaries occupy approximately 99% of the office floor space.
ITEM 2. PROPERTIES At December 31, 2025, OFG owns a fifteen-story office building located at 254 Muñoz Rivera Avenue, San Juan, Puerto Rico, known as “Oriental Center”, where its executive offices are located. OFG operates a full-service branch at the plaza level and its centralized units and subsidiaries occupy approximately 99% of the office floor space.
Approximately 1% of the office space is leased to outside tenants. In addition, at December 31, 2024, the Bank owns three branch premises and leases thirty-nine branch locations throughout Puerto Rico and owns two branch premises in the USVI.
Approximately 1% of the office space is leased to outside tenants. In addition, at December 31, 2025, the Bank owns three branch premises and leases thirty-nine branch locations throughout Puerto Rico and owns two branch premises in the USVI.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−1 removed4 unchanged
Biggest changeThe table below sets forth the information with respect to purchases of our common stock made by or on behalf of OFG during the quarter ended December 31, 2024: Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced programs Maximum approximate dollar value of shares that may yet be purchased under the programs (In thousands, except per share data) 10/1/2024 - 10/31/2024 660,969 $ 40.41 660,969 $ 48,907 11/1/2024 - 11/30/2024 151,110 40.88 151,110 42,730 12/1/2024 - 12/31/2024 307,535 42.45 307,535 29,676 Total 1,119,614 $ 41.03 1,119,614 $ 29,676 The estimated remaining number of shares that may be purchased under the current $50.0 million stock buyback programs is estimated at 701,236 and was calculated by dividing the remaining balance of $29.7 million by $42.32 (closing price of OFG common stock at December 31, 2024).
Biggest changeRepurchase of Common Stock Refer to “Recent Developments - Capital Actions” in Part II, Item 7 of this annual report on Form 10-K for information regarding OFG's common stock repurchase programs. 30 The table below sets forth the information with respect to purchases of our common stock made by or on behalf of OFG during the quarter ended December 31, 2025, excluding the month of December during which no shares were repurchased as part of the repurchase programs: Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced programs Maximum approximate dollar value of shares that may yet be purchased under the programs (In thousands, except per share data) 10/31/2025 255,567 $ 39.22 255,567 $ 68,168 11/30/2025 752,188 40.00 752,188 38,080 Total 1,007,755 $ 39.80 1,007,755 $ 38,080 At December 31, 2025, the estimated remaining number of shares that may be purchased under the Existing Repurchase Programs (as defined below) is 929,244 and was calculated by dividing the remaining balance of $38.1 million by $40.98 (closing price of OFG’s common stock at December 31, 2025).
OFG did not repurchase any shares of its common stock during the quarter ended December 31, 2024 other than through its publicly announced stock repurchase program. ITEM 6. RESERVED
OFG did not repurchase any shares of its common stock during the quarter ended December 31, 2025, other than through its publicly announced stock repurchase programs. ITEM 6. RESERVED
As of December 31, 2024, OFG had approximately 19,470 holders of record of its common stock, including all directors and officers of OFG, and beneficial owners whose shares are held in “street” name by securities broker-dealers or other nominees.
As of December 31, 2025, OFG had approximately 20,536 holders of record of its common stock, including all directors and officers of OFG, and beneficial owners whose shares are held in “street” name by securities broker-dealers or other nominees.
Equity Based Compensation For information about the securities remaining available for issuance under our equity-based plans, refer to Part III, Item 12 of this annual report on Form 10-K. Repurchase of Common Stock Refer to “Recent Developments-Capital Actions” in Part II, Item 7 of this annual report on Form 10-K for information regarding OFG's common stock repurchase programs.
Equity Based Compensation For information about the securities remaining available for issuance under our equity-based plans, refer to Part III, Item 12 of this annual report on Form 10-K.
Comparison of 5 Year Cumulative Total Return Assumes Initial Investment of $100 31 Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 OFG Bancorp 100.00 80.21 116.81 124.45 174.51 202.10 Russell 2000 100.00 119.96 137.74 109.59 128.14 142.93 S&P US BMI Banks Index 100.00 87.24 118.61 98.38 107.32 143.68 Dividends You can find dividend information concerning our common stock in Table 17 of Item 7 in this annual report on Form 10-K and our Consolidated Statements of Shareholders’ Equity in our consolidated financial statements accompanying this annual report on Form 10-K.
The cumulative total stockholder return was obtained by dividing (a) the sum of (i) the cumulative amount of dividends per share, assuming dividend reinvestment, for the measurement period beginning December 31, 2020, and (ii) the difference between the share price at the beginning and the end of the measurement period, by (b) the share price at the beginning of the measurement period. 29 Comparison of 5 Year Cumulative Total Return Assumes Initial Investment of $100 Index 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/30/2024 12/30/2025 OFG Bancorp 100.00 145.63 155.15 217.56 251.96 251.07 Russell 2000 100.00 114.82 91.35 106.82 119.14 134.40 S&P US BMI Banks Index 100.00 135.97 112.77 123.02 164.70 211.47 Dividends You can find dividend information concerning our common stock in Table 17 of Item 7 in this annual report on Form 10-K and our Consolidated Statements of Shareholders’ Equity in our consolidated financial statements accompanying this annual report on Form 10-K.
Removed
The cumulative total stockholder return was obtained by dividing (a) the sum of (i) the cumulative amount of dividends per share, assuming dividend reinvestment, for the measurement period beginning December 31, 2019, and (ii) the difference between the share price at the beginning and the end of the measurement period, by (b) the share price at the beginning of the measurement period.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

104 edited+46 added−44 removed38 unchanged
Biggest changeThe increase in net charge-offs in 2024 was also impacted by an increase in business volume, partially offset by a recovery of $800 thousand from the sale of older, previously fully charged-off auto loans. 57 TABLE 13 — NON-PERFORMING ASSETS December 31, Variance % 2024 2023 (Dollars in thousands) Non-performing assets: Non-PCD Non-accruing loans $ 75,098 $ 72,725 3.3% Accruing loans 5,005 5,810 (13.9)% Total $ 80,103 $ 78,535 2.0% PCD 2,880 6,674 (56.8)% Total non-performing loans $ 82,983 $ 85,209 (2.6)% Foreclosed real estate 4,002 10,780 (62.9)% Other repossessed assets 6,595 4,032 63.6% $ 93,580 $ 100,021 (6.4)% Non-performing assets to total assets 0.81 % 0.88 % (7.7) % Non-performing assets to total capital 7.46 % 8.38 % (11.0) % TABLE 14 — NON-ACCRUAL LOANS December 31, Variance % 2024 2023 (Dollars in thousands) Non-accrual loans Non-PCD Commercial loans $ 38,913 $ 36,096 7.8% Mortgage loans 11,923 14,197 (16.0)% Consumer loans 4,207 3,376 24.6% Auto loans 20,055 19,056 5.2% Total $ 75,098 $ 72,725 3.3% PCD Commercial loans $ 2,641 $ 6,424 (58.9)% Mortgage loans 239 250 (4.4)% Total $ 2,880 $ 6,674 (56.8)% Total non-accrual loans $ 77,978 $ 79,399 (1.8)% Non-accruals loans composition percentages: Commercial loans 53.3 % 53.6 % Mortgage loans 15.6 % 18.2 % Consumer loans 5.4 % 4.3 % Auto loans 25.7 % 23.9 % 100.0 % 100.0 % Non-accrual loans ratios: Non-accrual loans to total loans 1.00 % 1.05 % (4.8)% Allowance for credit losses to non-accrual loans 225.53 % 202.91 % 11.1% Year Ended December 31, 2024 2023 (In thousands) Interest that would have been recorded in the year if the loans had not been classified as non-accruing loans $ 1,220 $ 941 58 TABLE 15 - NON-PERFORMING LOANS December 31, Variance % 2024 2023 (Dollars in thousands) Non-performing loans Non-PCD Commercial loans $ 38,913 $ 36,096 7.8% Mortgage loans 16,928 20,007 (15.4)% Consumer loans 4,207 3,376 24.6% Auto loans 20,055 19,056 5.2% Total $ 80,103 $ 78,535 2.0% PCD Commercial loans $ 2,641 $ 6,424 (58.9)% Mortgage loans 239 250 (4.4)% Total $ 2,880 $ 6,674 (56.8)% Total non-performing loans $ 82,983 $ 85,209 (2.6)% Non-performing loans composition percentages: Commercial loans 50.1 % 49.9 % Mortgage loans 20.7 % 23.8 % Consumer loans 5.1 % 4.0 % Auto loans 24.1 % 22.3 % 100.0 % 100.0 % Non-performing loans to: Total loans held for investment gross 1.06 % 1.13 % (6.2)% Total assets 0.72 % 0.75 % (4.0)% Total capital 6.62 % 7.14 % (7.3)% Non-performing loans with partial charge-offs to: Total loans held for investment gross 0.20 % 0.29 % (31.0)% Non-performing loans 18.41 % 25.63 % (28.2)% Other non-performing loans ratios: Charge-off rate on non-performing loans to non-performing loans on which charge-offs have been taken 109.79 % 75.14 % 46.1% Allowance for credit losses to non-performing loans on which no charge-offs have been taken 259.75 % 254.24 % 2.2% 59 TABLE 16 - LIABILITIES SUMMARY AND COMPOSITION December 31, Variance % 2024 2023 (Dollars in thousands) Deposits: Non-interest-bearing deposits $ 2,493,859 $ 2,537,431 (1.7) % NOW accounts 3,133,467 3,512,887 (10.8) % Savings accounts 2,064,909 2,088,091 (1.1) % Time deposits 1,909,324 1,620,688 17.8 % Total deposits 9,601,559 9,759,097 (1.6) % Accrued interest payable 3,227 3,072 5.0 % Total deposits and accrued interest payable 9,604,786 9,762,169 (1.6) % Borrowings: Securities sold under agreements to repurchase 75,222 — 100.0 % Advances from FHLB 325,952 200,768 62.4 % Other borrowings — 2 (100.0) % Total borrowings 401,174 200,770 99.80 % Total deposits and borrowings 10,005,960 9,962,939 0.4 % Other Liabilities: Acceptances executed and outstanding 31,526 25,576 23.3 % Lease liability 21,388 24,029 (11.0) % Deferred tax liability, net 40,718 22,444 81.4 % Accrued expenses and other liabilities 146,771 115,985 26.5 % Total liabilities $ 10,246,363 $ 10,150,973 0.9 % Deposits portfolio composition percentages: Non-interest-bearing deposits 26.0% 26.0% NOW accounts 32.6% 36.0% Savings accounts 21.5% 21.4% Time deposits 19.9% 16.6% 100.0 % 100.0 % Borrowings portfolio composition percentages: Securities sold under agreements to repurchase 18.8 % 0.0 % Advances from FHLB 81.2 % 100.0 % 100.0 % 100.0 % Securities sold under agreements to repurchase (excluding accrued interest) Amount outstanding at year-end $ 75,000 $ — Daily average outstanding balance $ 75,000 $ — Maximum outstanding balance at any month-end $ 75,000 $ — 60 Liabilities and Funding Sources As shown in Table 16 above, at December 31, 2024, OFG’s total liabilities were $10.246 billion, 0.9% higher than the $10.151 billion reported at December 31, 2023.
Biggest changeThe net charge-offs for 2024 included $3.5 million from previously and fully-reserved nonperforming paycheck protection program (“PPP”) loans. • Consumer loans net charge-offs for 2025 amounted $28.5 million, decreasing by $554 thousand, when compared to net charge-offs of $29.0 million in the prior year. • Auto loans net charge-offs for 2025 amounted to $39.3 million, increasing by $4.2 million, when compared to net charge-offs of $35.1 million in the prior year, mainly as a result of higher loan volume. 55 TABLE 13 — NON-PERFORMING ASSETS December 31, Variance % 2025 2024 (Dollars in thousands) Non-performing assets: Non-PCD Non-accruing loans $ 124,300 $ 75,098 65.5% Accruing loans 5,481 5,005 9.5% Total $ 129,781 $ 80,103 62.0% PCD 282 2,880 (90.2)% Total non-performing loans $ 130,063 $ 82,983 56.7% Foreclosed real estate 2,490 4,002 (37.8)% Other repossessed assets 3,457 6,595 (47.6)% $ 136,010 $ 93,580 45.3% Non-performing assets to total assets 1.09 % 0.81 % 34.6 % Non-performing assets to total capital 9.78 % 7.46 % 31.1 % 56 TABLE 14 — NON-ACCRUAL LOANS December 31, Variance % 2025 2024 (Dollars in thousands) Non-accrual loans Non-PCD Commercial loans $ 87,253 $ 38,913 124.2% Mortgage loans 11,919 11,923 —% Consumer loans 4,378 4,207 4.1% Auto loans 20,750 20,055 3.5% Total $ 124,300 $ 75,098 65.5% PCD Commercial loans $ 55 $ 2,641 (97.9)% Mortgage loans 227 239 (5.0)% Total $ 282 $ 2,880 (90.2)% Total non-accrual loans $ 124,582 $ 77,978 59.8% Non-accruals loans composition percentages: Commercial loans 70.1 % 53.3 % Mortgage loans 9.7 % 15.6 % Consumer loans 3.5 % 5.4 % Auto loans 16.7 % 25.7 % 100.0 % 100.0 % Non-accrual loans ratios: Non-accrual loans to total loans 1.52 % 1.00 % 52.0% Allowance for credit losses to non-accrual loans 162.42 % 225.53 % (28.0)% Year Ended December 31, 2025 2024 (In thousands) Interest that would have been recorded in the period if the loans had not been classified as non-accruing loans $ 823 $ 1,220 57 TABLE 15 - NON-PERFORMING LOANS December 31, Variance % 2025 2024 (Dollars in thousands) Non-performing loans Non-PCD Commercial loans $ 87,253 $ 38,913 124.2% Mortgage loans 17,400 16,928 2.8% Consumer loans 4,378 4,207 4.1% Auto loans 20,750 20,055 3.5% Total $ 129,781 $ 80,103 62.0% PCD Commercial loans $ 55 $ 2,641 (97.9)% Mortgage loans 227 239 (5.0)% Total $ 282 $ 2,880 (90.2)% Total non-performing loans $ 130,063 $ 82,983 56.7% Non-performing loans composition percentages: Commercial loans 67.1 % 50.1 % Mortgage loans 13.6 % 20.7 % Consumer loans 3.4 % 5.1 % Auto loans 15.9 % 24.1 % 100.0 % 100.0 % Non-performing loans to: Total loans held-for-investment gross 1.59 % 1.06 % 50.0% Total assets 1.04 % 0.72 % 44.4% Total capital 9.36 % 6.62 % 41.4% Non-performing loans with partial charge-offs to: Total loans held-for-investment gross 0.19 % 0.20 % (5.0)% Non-performing loans 11.95 % 18.41 % (35.1)% Other non-performing loans ratios: Charge-off rate on non-performing loans to non-performing loans on which charge-offs have been taken 109.85 % 109.79 % 0.1% Allowance for credit losses to non-performing loans on which no charge-offs have been taken 176.69 % 259.75 % (32.0)% 58 TABLE 16 - LIABILITIES SUMMARY AND COMPOSITION December 31, Variance % 2025 2024 (Dollars in thousands) Deposits: Non-interest-bearing deposits $ 2,626,768 $ 2,493,859 5.3 % NOW accounts 3,173,142 3,133,467 1.3 % Savings accounts 2,259,973 2,064,909 9.4 % Time deposits 2,197,358 1,909,324 15.1 % Total deposits 10,257,241 9,601,559 6.8 % Accrued interest payable 5,511 3,227 70.8 % Total deposits and accrued interest payable 10,262,752 9,604,786 6.9 % Borrowings: Securities sold under agreements to repurchase 100,714 75,222 33.9 % Advances from FHLB 456,581 325,952 40.1 % Other borrowings 9 — 100.0 % Total borrowings 557,304 401,174 38.90 % Total deposits and borrowings 10,820,056 10,005,960 8.1 % Other liabilities: Acceptances executed and outstanding 22,442 31,526 (28.8) % Operating lease liabilities 23,157 21,388 8.3 % Deferred tax liabilities, net — 40,718 (100.0) % Accrued expenses and other liabilities 209,997 146,771 43.1 % Total liabilities $ 11,075,652 $ 10,246,363 8.1 % Deposits portfolio composition percentages: Non-interest-bearing deposits 25.6% 26.0% NOW accounts 31.0% 32.6% Savings accounts 22.0% 21.5% Time deposits 21.4% 19.9% 100.0 % 100.0 % Borrowings portfolio composition percentages: Securities sold under agreements to repurchase 18.1 % 18.8 % Advances from FHLB 81.9 % 81.2 % 100.0 % 100.0 % Securities sold under agreements to repurchase (excluding accrued interest) Amount outstanding at period-end $ 100,000 $ 75,000 Daily average outstanding balance $ 66,941 $ 75,000 Maximum outstanding balance at any month-end $ 127,344 $ 75,000 59 Liabilities and Funding Sources As shown in Table 16 above, at December 31, 2025, OFG’s total liabilities were $11.076 billion, 8.1% higher than the $10.246 billion reported at December 31, 2024.
Business Segments OFG segregates its businesses into the following segments: Banking, Wealth Management, and Treasury. Management established the reportable segments based on the internal reporting used to evaluate performance and to assess where to allocate resources.
Business Segments OFG segregates its businesses into the following segments: Banking, Wealth Management, and Treasury. Management established the reportable segments based on the internal reporting used to evaluate performance and assess where to allocate resources.
As such, for PCD loans the determination of non-accrual or accrual status is made at the pool level, not the individual loan level. The ACL was determined for each pool and added to the pool’s carrying amount to establish a new amortized cost basis.
As such, the determination of non-accrual or accrual status for PCD loans is made at the pool level, not the individual loan level. The ACL was determined for each pool and added to the pool’s carrying amount to establish a new amortized cost basis.
Significant changes in the financial condition of individual borrowers, in economic conditions, in historical loss 33 experience, and in the condition of the various markets in which collateral may be sold may all affect the required level of the ACL. Consequently, the business, financial condition, liquidity, capital and results of operations could also be affected.
Significant changes in the financial condition of individual borrowers, in economic conditions, in historical loss experience, and in the condition of the various markets in which collateral may be sold may all affect the required level of the ACL. Consequently, the business, financial condition, liquidity, capital and results of operations could also be affected.
OFG’s methodology for allocating expenses for corporate services among segments is based on several factors such as revenue, employee headcount, occupied space, dedicated services or time, among others.
OFG’s methodology for allocating expenses for corporate services among segments is based on several factors such as revenue, employee headcount, occupied space, and dedicated services or time, among others.
It also included a $5.7 million qualitative adjustment to account for uncertainty of recent increasing auto delinquency trends that the model does not fully capture, net of a $2.7 million reserve release mainly due to an improved U.S. macroeconomic perspective earlier in the year.
It also included a $5.7 million qualitative adjustment to account for uncertainty of recent increasing auto delinquency trends that the model does not fully capture, net of a $2.7 million reserve release mainly due to an improved U.S. macroeconomic perspective earlier in 2024.
The applicability of qualitative adjustments includes adjustments of inherent risk not captured by the quantitative model. OFG’s sensitivity analysis does not represent management’s view of expected credit losses at December 31, 2024. OFG evaluated sensitivities by applying 100% weight to baseline and moderate recession scenarios.
The applicability of qualitative adjustments includes adjustments of inherent risk not captured by the quantitative model. OFG’s sensitivity analysis does not represent management’s view of expected credit losses at December 31, 2025. OFG evaluated sensitivities by applying 100% weight to baseline and moderate recession scenarios.
As of December 31, 2024, management gave more weight to the baseline scenario, except for the US loan segment where the moderate recession scenario was given a greater weight. Management selects the macroeconomic forecast that is most reflective of expectations at that point in time.
As of December 31, 2025, management gave more weight to the baseline scenario, except for the US loan segment where the moderate recession scenario was given a greater weight. Management selects the macroeconomic forecast that is most reflective of expectations at that point in time.
We have omitted discussion of 2022 results where it would be redundant to the discussion previously included in Item 7 of our 2023 annual report on Form 10-K.
We have omitted discussion of 2023 results where it would be redundant to the discussion previously included in Item 7 of our 2024 annual report on Form 10-K.
As of both December 31, 2024 and 2023, OFG had $84.2 million of goodwill allocated as follows: $84.1 million to the banking segment and $100 thousand to the wealth management segment.
As of both December 31, 2025 and 2024, OFG had $84.2 million of goodwill allocated as follows: $84.1 million to the banking segment and $100 thousand to the wealth management segment.
Non-conforming mortgage loan portfolios are segregated into the following categories: performing loans that meet secondary market requirement and are refinanced under the credit underwriting guidelines of FHA/VA/FNMA/ FHLMC and performing loans not meeting secondary market guidelines processed pursuant OFG’s current credit and underwriting guidelines.
Non-conforming mortgage loan portfolios are segregated into the following categories: performing loans that meet secondary market requirement and are refinanced under the credit underwriting guidelines of FHA, VA, FNMA, or FHLMC, as applicable, and performing loans not meeting secondary market guidelines processed pursuant OFG’s current credit and underwriting guidelines.
Therefore, those loans are included as non-performing loans but excluded from non-accrual loans. As of December 31, 2024 and 2023, the outstanding balance of these residential mortgage loans was $5.0 million and $5.8 million, respectively.
Therefore, those loans are included as non-performing loans but excluded from non-accrual loans. As of December 31, 2025 and 2024, the outstanding balance of these residential mortgage loans was $5.5 million and $5.0 million, respectively.
Tables 9 through 12 set forth an analysis of activity in the ACL and present selected credit loss statistics for and as of 2024 and 2023. In addition, Table 6 sets forth the composition of the loan portfolio.
Tables 9 through 11 set forth an analysis of activity in the ACL and present selected credit loss statistics for and as of 2025 and 2024. In addition, Table 6 sets forth the composition of the loan portfolio.
Regulatory Capital OFG and the Bank are subject to regulatory capital requirements established by the FRB and the FDIC. The current risk-based capital standards applicable to OFG and the Bank (“Basel III capital rules”) are based on the final capital framework for strengthening international capital standards, known as Basel III, of the Basel Committee on Banking Supervision.
Regulatory Capital OFG and the Bank are subject to regulatory capital requirements established by the Federal Reserve Board and the FDIC. The current risk-based capital standards applicable to OFG and the Bank are based on the final capital framework for strengthening international capital standards, known as Basel III, of the Basel Committee on Banking Supervision.
The impact of assigning a 100% weight to the baseline scenario was a hypothetical decrease of 2% to the collective ACL, and the impact of assigning a 100% weight to the moderate recession scenario was a hypothetical increase of 3% to the collective ACL.
The impact of assigning a 100% 32 weight to the baseline scenario was a hypothetical decrease of 4.3% to the collective ACL, and the impact of assigning a 100% weight to the moderate recession scenario was a hypothetical increase of 3.7% to the collective ACL.
The time deposit with a balance of $278.4 million and $300.3 million at December 31, 2024 and 2023, respectively, to fund Oriental Overseas operations is included in the Treasury Segment with its corresponding interest expense, and the related interest income is included in the Banking Segment, and are eliminated in the consolidation.
The time deposit with a balance of $283.9 million and $278.4 million at December 31, 2025 and 2024, respectively, which is used to fund Oriental Overseas operations, is included in the Treasury Segment with its corresponding interest expense, and the related interest income is included in the Banking Segment, and are eliminated in the consolidation.
Foreclosed real estate decreased from $10.8 million at December 31, 2023 to $4.0 million at December 31, 2024 and other repossessed assets increased from $4.0 million at December 31, 2023 to $6.6 million at December 31, 2024, both recorded at fair value. OFG does not expect non-performing loans to result in significantly higher losses.
Foreclosed real estate decreased from $4.0 million at December 31, 2024 to $2.5 million at December 31, 2025 and other repossessed assets decreased from $6.6 million at December 31, 2024 to $3.5 million at December 31, 2025, both recorded at fair value. OFG does not expect non-performing loans to result in significantly higher losses.
Consumer loans - At December 31, 2024, OFG’s non-performing consumer loans amounted to $4.2 million (5.1% of OFG’s non-performing loans), a 24.6% increase from $3.4 million at December 31, 2023 (4.0% of OFG’s non-performing loans).
Consumer loans - At December 31, 2025, OFG’s non-performing consumer loans amounted to $4.4 million (3.4% of OFG’s non-performing loans), a 4.1% increase from $4.2 million at December 31, 2024 (5.1% of OFG’s non-performing loans).
OFG’s trust division offers various types of individual retirement accounts (“IRAs”) and manages retirement plans and custodian and corporate trust accounts. At December 31, 2024 and 2023, the total assets managed by OFG’s trust division amounted to $2.262 billion and $2.512 billion, respectively.
OFG’s trust division offers various types of IRAs and manages retirement plans and custodian and corporate trust accounts. At December 31, 2025 and 2024, the total assets managed by OFG’s trust division amounted to $2.490 billion and $2.262 billion, respectively.
At December 31, 2024 and 2023, total public fund deposits from various Puerto Rico government municipalities, agencies and corporations amounted to $1.445 billion and $1.618 billion, respectively. These public funds were collateralized with securities and commercial loans amounting to $1.507 billion and $1.645 billion at December 31, 2024 and 2023, respectively.
At December 31, 2025 and 2024, total public fund deposits from various Puerto Rico government municipalities, agencies and corporations amounted to $1.676 billion and $1.445 billion, respectively. These public funds were collateralized with securities and commercial loans amounting to $1.691 billion a nd $1.507 billion at December 31, 2025 and 2024, respectively.
For accounting purposes, these loans subject to the repurchase option are required to be reflected (rebooked) on our financial statements with an offsetting liability. Mortgage loan production totaled $150.3 million in 2024, which represents an increase of 13.1% from $133.0 million in 2023.
For accounting purposes, these loans subject to the repurchase option are required to be reflected (rebooked) on our financial statements with an offsetting liability. Mortgage loan production totaled $179.6 million in 2025, which represents an increase of 19.5% from $150.3 million in 2024.
Loans that qualify under this program are those guaranteed by FHA, VA, USDA Rural Development (RURAL), Puerto Rico Housing Finance Authority (PRHFA), conventional loans guaranteed by Mortgage Guaranty Insurance Corporation (MGIC), conventional loans sold to FNMA and FHLMC, and conventional loans retained by OFG.
Loans that qualify under this program are those guaranteed by FHA, VA, RHS, Puerto Rico Housing Finance Authority (“PRHFA”), conventional loans guaranteed by Mortgage Guaranty Insurance Corporation (“MGIC”), conventional loans sold to FNMA and FHLMC, and conventional loans retained by OFG.
OFG records treasury stock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. OFG did not repurchase any shares of its common stock during December 31, 2024, 2023 and 2022 other than through its publicly announced stock repurchase programs.
The shares of common stock repurchased are held by OFG as treasury shares. OFG records treasury stock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. OFG did not repurchase any shares of its common stock during 2025 and 2024, other than through its publicly announced stock repurchase programs.
Net income before taxes from this segment increased from $16.0 million to $17.9 million, mainly from higher non interest income of $4.1 million, mainly related to higher broker-dealer fees from investment advisory service fees and mutual funds retailer fees, higher insurance income from annuities, and an increase in trustee-only fees, partially offset by higher salaries and employee benefits of $-1.9 million.
Wealth Management Net income before taxes from this segment increased from $17.9 million to $18.7 million, mainly from higher non-interest income of $2.3 million, mostly related to higher broker-dealer fees from investment advisory service fees and mutual funds retailer fees, higher insurance income from annuities and premiums, and an increase in trustee-only fees, partially offset by higher salaries and employee benefits of $0.8 million.
Commercial loans secured by non-owner occupied commercial real estate amounted to $796.9 million and $744.6 million at December 31, 2024 and 2023, respectively, which represented 10.2% and 9.9% of our total gross loan portfolio held for investment.
Commercial loans secured by non-owner occupied commercial real estate amounted to $774.1 million and $796.9 million at December 31, 2025 and 2024, respectively, which represented 9.4% of our total gross loan portfolio held-for-investment.
Furthermore, OFG has never been active in negative amortization loans or offered adjustable-rate mortgage loans with teaser rates. 50 • Consumer loan portfolio amounted to $668.6 million (8.6% of the gross loan portfolio) compared to $620.4 million (8.2% of the gross loan portfolio) at December 31, 2023.
Furthermore, OFG has never been active in negative amortization loans or offered adjustable-rate mortgage loans with teaser rates. 48 • Consumer loan portfolio amounted to $683.5 million (8.3% of the gross loan portfolio) compared to $668.6 million (8.6% of the gross loan portfolio) at December 31, 2024.
We evaluate these judgments, assumptions and estimates for changes that would affect the reported amounts. These estimates are based on management's historical industry experience and on various other judgments and assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these judgments, assumptions and estimates.
These estimates are based on management's historical industry experience and on various other judgments and assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these judgments, assumptions and estimates.
The composition and trends of OFG’s loans held-for-investment portfolio were as follows: • Commercial loan portfolio amounted to $3.103 billion (39.8% of the gross loan portfolio) compared to $3.077 billion (40.8% of the gross loan portfolio) at December 31, 2023, a 0.9% increase as a result of originations and credit lines usage during 2024.
The composition and trends of OFG’s loans held-for-investment portfolio were as follows: • Commercial loan portfolio amounted to $3.490 billion (42.6% of the gross loan portfolio) compared to $3.103 billion (39.8% of the gross loan portfolio) at December 31, 2024, a 12.5% increase as a result of originations and credit lines usage during 2025.
Total Banking and Financial Service Revenues of $32.8 million compared to $26.3 million in the third quarter of 2024 and $32.1 million in the fourth quarter of 2023.
Total Banking and Financial Service Revenues of $32.6 million compared to $29.3 million in the third quarter of 2025 and $32.8 million in the fourth quarter of 2024.
Income Tax Expense Comparison of the years ended December 31, 2024 and 2023 Income tax expense decreased by $27.8 million to $55.6 million from $83.4 million. OFG’s ETR was 21.9% in 2024 compared to 31.4% in 2023.
Comparison of the years ended December 31, 2025 and 2024 Income tax expense decreased by $26.6 million to $29.0 million from $55.6 million. OFG’s ETR was 12.4% in 2025 compared to 21.9% in 2024.
At December 31, 2024, the allowance coverage ratio to non-performing loans was 211.9% (189.1% at December 31, 2023). Upon adoption of the current expected credit losses (“CECL”) methodology, OFG elected to maintain pools of loans that were previously accounted for under ASC 310-30 and will continue to account for these pools as a unit of account.
At December 31, 2025, the allowance coverage ratio to non-performing loans was 155.6% (211.9% at December 31, 2024). Upon adoption of CECL, OFG elected to maintain pools of loans that were previously accounted for under ASC 310-30 and will continue to account for these pools as a unit of account.
The following table provides the high and low prices and dividends per share of OFG’s common stock for each quarter of the last three calendar years: Cash Price Dividend High Low Per share 2024 December 31, 2024 $ 46.72 $ 38.97 $ 0.25 September 30, 2024 $ 46.84 $ 36.77 $ 0.25 June 30, 2024 $ 38.16 $ 33.37 $ 0.25 March 31, 2024 $ 38.51 $ 34.78 $ 0.25 2023 December 31, 2023 $ 38.29 $ 28.67 $ 0.22 September 30, 2023 $ 33.82 $ 26.14 $ 0.22 June 30, 2023 $ 27.80 $ 22.80 $ 0.22 March 31, 2023 $ 30.42 $ 24.37 $ 0.22 2022 December 31, 2022 $ 28.90 $ 25.50 $ 0.20 September 30, 2022 $ 29.45 $ 24.66 $ 0.20 June 30, 2022 $ 29.22 $ 25.40 $ 0.15 March 31, 2022 $ 30.54 $ 26.21 $ 0.15 In January 2024, the Board of Directors approved a $50.0 million stock repurchase program.
The following table provides the high and low prices and dividends per share of OFG’s common stock for each quarter of the last three calendar years: 64 Cash Price Dividend High Low Per share 2025 December 31, 2025 $ 43.38 $ 38.21 $ 0.30 September 30, 2025 $ 45.47 $ 41.72 $ 0.30 June 30, 2025 $ 43.28 $ 34.78 $ 0.30 March 31, 2025 $ 44.74 $ 38.85 $ 0.30 2024 December 31, 2024 $ 46.72 $ 38.97 $ 0.25 September 30, 2024 $ 46.84 $ 36.77 $ 0.25 June 30, 2024 $ 38.16 $ 33.37 $ 0.25 March 31, 2024 $ 38.51 $ 34.78 $ 0.25 2023 December 31, 2023 $ 38.29 $ 28.67 $ 0.22 September 30, 2023 $ 33.82 $ 26.14 $ 0.22 June 30, 2023 $ 27.80 $ 22.80 $ 0.22 March 31, 2023 $ 30.42 $ 24.37 $ 0.22 In April 2025, the Board approved a new $100 million stock repurchase program in addition to the $50 million stock repurchase program approved in October 2024.
Consumer loan production decreased by 3% or $9.1 million to $304.5 million in 2024 from $313.6 million in 2023. • Auto loans portfolio amounted to $2.549 billion (32.7% of the gross loan portfolio) compared to $2.274 billion (30.3% of the gross originated loan portfolio) at December 31, 2023.
Consumer loan production decreased by 5.1% or $15.6 million to $288.8 million in 2025 from $304.5 million in 2024. • Auto loans portfolio amounted to $2.637 billion (32.1% of the gross loan portfolio) compared to $2.549 billion (32.7% of the gross originated loan portfolio) at December 31, 2024.
Excluding commercial US loans activities, commercial PR loan production slightly decreased 0.7% to $739.6 million in 2024 from $744.7 million in 2023. • Mortgage loan portfolio amounted to $1.471 billion (18.9% of the gross loan portfolio) compared to $1.563 billion (20.7% of the gross originated loan portfolio) at December 31, 2023, a 5.9% decrease resulting from regular paydowns of residential mortgages and securitization of conforming loans into mortgage-backed securities.
Excluding commercial US loans activities, commercial PR loan production increased by 13.0% to $835.6 million in 2025 from $739.6 million in 2024. • Mortgage loan portfolio amounted to $1.390 billion (17.0% of the gross loan portfolio) compared to $1.471 billion (18.9% of the gross originated loan portfolio) at December 31, 2024, a 5.5% decrease resulting from securitization of conforming loans into mortgage-backed securities and regular paydowns.
OFG constantly monitors the composition and re-pricing of its assets and liabilities to maintain its net interest income at adequate levels. Comparison of the years ended December 31, 2024 and 2023 Net interest income of $588.4 million increased by $27.5 million from $560.9 million.
OFG constantly monitors the composition and re-pricing of its assets and liabilities to maintain its net interest income at adequate levels. Comparison of the years ended December 31, 2025 and 2024 Net interest income of $608.5 million increased by $20.1 million from $588.4 million reflecting higher loans and investment securities income.
Tangible Book Value per share reflected the above-mentioned share buybacks and lower other comprehensive income. 36 Selected income statement and balance sheet data and key performance indicators are presented in the tables below: Year Ended December 31, 2024 2023 2022 EARNINGS DATA: (In thousands, except per share data) Interest income $ 750,277 $ 648,880 $ 515,573 Interest expense 161,837 88,010 33,493 Net interest income 588,440 560,870 482,080 Provision for credit losses 82,251 60,638 24,119 Net interest income after provision for credit losses 506,189 500,232 457,961 Non-interest income 123,249 128,381 131,690 Non-interest expenses 375,690 363,365 345,546 Income before taxes 253,748 265,248 244,105 Income tax expense 55,578 83,376 77,866 Net income available to common shareholders $ 198,170 $ 181,872 $ 166,239 PER SHARE DATA: EPS Basic $ 4.25 $ 3.85 $ 3.46 EPS Diluted $ 4.23 $ 3.83 $ 3.44 Average common shares outstanding 46,637 47,258 48,033 Average common shares outstanding and equivalents 46,902 47,552 48,436 Cash dividends declared per common share $ 1.00 0.88 0.70 Cash dividends declared on common shares $ 46,931 41,853 33,593 PERFORMANCE RATIOS: Return on average assets (ROA) 1.75 % 1.79 % 1.64 % Return on average equity (ROE) 15.78 % 16.37 % 15.95 % Return on average tangible common stockholders’ equity (non-GAAP, see Table 18) 17.17 % 18.14 % 17.98 % Efficiency ratio 52.94 % 53.22 % 56.85 % Interest rate spread 5.29 % 5.71 % 5.02 % Interest rate margin 5.43 % 5.79 % 5.05 % 37 December 31, 2024 2023 2022 PERIOD END BALANCES AND CAPITAL RATIOS: (In thousands, except per share data) Investments and loans Investment securities $ 2,720,277 $ 2,686,770 $ 1,971,522 Loans, net 7,633,831 7,401,618 6,723,236 Total investments and loans $ 10,354,108 $ 10,088,388 $ 8,694,758 Deposits and borrowings Deposits $ 9,604,786 $ 9,762,169 $ 8,568,364 Securities sold under agreements to repurchase 75,222 — — Advances from FHLB and other borrowings 325,952 200,770 27,034 Total deposits and borrowings $ 10,005,960 $ 9,962,939 $ 8,595,398 Stockholders’ equity Common stock 59,885 59,885 59,885 Additional paid-in capital 639,786 638,667 636,793 Legal surplus 169,537 150,967 133,901 Retained earnings 771,993 639,324 516,371 Treasury stock, at cost (296,991) (228,350) (211,135) Accumulated other comprehensive loss (89,839) (67,013) (93,409) Total stockholders’ equity $ 1,254,371 $ 1,193,480 $ 1,042,406 Per share data Book value per common share $ 27.60 $ 25.36 $ 21.91 Tangible book value per common share (non-GAAP, see Table 18) $ 25.43 $ 23.13 $ 19.56 Market price $ 42.32 $ 37.48 $ 27.56 Capital ratios Leverage capital 10.93 % 11.03 % 10.36 % Common equity Tier 1 capital 14.26 % 14.12 % 13.64 % Tier 1 risk-based capital 14.26 % 14.12 % 13.64 % Total risk-based capital 15.52 % 15.37 % 14.89 % Financial assets managed Trust assets managed $ 2,262,446 $ 2,511,880 $ 2,334,672 Broker-dealer assets managed 2,246,884 2,446,281 2,172,116 Total assets managed $ 4,509,330 $ 4,958,161 $ 4,506,788 38 ANALYSIS OF RESULTS OF OPERATIONS The following tables show major categories of interest-earning assets and interest-bearing liabilities, their respective interest income, expenses, yields and costs, and their impact on net interest income due to changes in volume and rates for 2024 and 2023.
Selected income statement and balance sheet data and key performance indicators are presented in the tables below: Year Ended December 31, 2025 2024 2023 EARNINGS DATA: (In thousands, except per share data) Interest income $ 780,936 $ 750,277 $ 648,880 Interest expense 172,469 161,837 88,010 Net interest income 608,467 588,440 560,870 Provision for credit losses 107,513 82,251 60,638 Net interest income after provision for credit losses 500,954 506,189 500,232 Non-interest income 122,976 123,249 128,381 Non-interest expenses 389,813 375,690 363,365 Income before taxes 234,117 253,748 265,248 Income tax expense 29,014 55,578 83,376 Net income available to common shareholders $ 205,103 $ 198,170 $ 181,872 PER SHARE DATA: EPS Basic $ 4.60 $ 4.25 $ 3.85 EPS Diluted $ 4.58 $ 4.23 $ 3.83 Average common shares outstanding 44,552 46,637 47,258 Average common shares outstanding and equivalents 44,760 46,902 47,552 Cash dividends declared per common share $ 1.20 1.00 0.88 Cash dividends declared on common shares $ 53,513 46,931 41,853 PERFORMANCE RATIOS: Return on average assets (ROA) 1.70 % 1.75 % 1.79 % Return on average tangible common stockholders’ equity (non-GAAP, see Table 18) 16.47 % 17.17 % 18.14 % Return on average common equity (ROE) 15.29 % 15.78 % 16.37 % Efficiency ratio 53.41 % 52.94 % 53.22 % Interest rate spread 5.12 % 5.29 % 5.71 % Interest rate margin 5.27 % 5.43 % 5.79 % 35 December 31, 2025 2024 2023 YEAR-END BALANCES AND CAPITAL RATIOS: (In thousands, except per share data) Investments and loans Investment securities $ 2,843,141 $ 2,720,277 $ 2,686,770 Loans, net 8,014,246 7,633,831 7,401,618 Total investments and loans $ 10,857,387 $ 10,354,108 $ 10,088,388 Deposits and borrowings Deposits $ 10,262,752 $ 9,604,786 $ 9,762,169 Securities sold under agreements to repurchase 100,714 75,222 — Advances from FHLB and other borrowings 456,590 325,952 200,770 Total deposits and borrowings $ 10,820,056 $ 10,005,960 $ 9,962,939 Stockholders’ equity Common stock 59,885 59,885 59,885 Additional paid-in capital 642,973 639,786 638,667 Legal surplus 188,490 169,537 150,967 Retained earnings 904,630 771,993 639,324 Treasury stock, at cost (389,067) (296,991) (228,350) Accumulated other comprehensive loss (16,906) (89,839) (67,013) Total stockholders’ equity $ 1,390,005 $ 1,254,371 $ 1,193,480 Per share data Book value per common share $ 32.13 $ 27.60 $ 25.36 Tangible book value per common share (non-GAAP, see Table 18) $ 29.96 $ 25.43 $ 23.13 Market price $ 40.98 $ 42.32 $ 37.48 Capital ratios Leverage capital 10.71 % 10.93 % 11.03 % Common equity Tier 1 capital 13.97 % 14.26 % 14.12 % Tier 1 risk-based capital 13.97 % 14.26 % 14.12 % Total risk-based capital 15.24 % 15.52 % 15.37 % Financial assets managed Trust assets managed $ 2,490,272 $ 2,262,446 $ 2,511,880 Broker-dealer assets managed 2,612,508 2,246,884 2,446,281 Total assets managed $ 5,102,780 $ 4,509,330 $ 4,958,161 36 ANALYSIS OF RESULTS OF OPERATIONS The following tables show major categories of interest-earning assets and interest-bearing liabilities, their respective interest income, expenses, yields and costs, and their impact on net interest income due to changes in volume and rates for 2025 and 2024.
As shown in Table 6 above, total loans, net, amounted to $7.634 billion at December 31, 2024, a 3.1% increase when compared to $7.402 billion at December 31, 2023.
As shown in Table 6 above, total loans, net, amounted to $8.014 billion at December 31, 2025, a 5.0% increase when compared to $7.634 billion at December 31, 2024.
New Loan Production of $609.0 million compared to $572.2 million in the third quarter of 2024 and $663.9 million in the fourth quarter of 2023.
New Loan Production of $605.6 million compared to $623.9 million in the third quarter of 2025 and $609.0 million in the fourth quarter of 2024.
Auto loans - At December 31, 2024, OFG’s non-performing auto loans amounted to $20.1 million (24.1% of OFG’s total non-performing loans), an increase of 5.2% from $19.1 million at December 31, 2023 (22.3% of OFG’s total non-performing loans).
Auto loans - At December 31, 2025, OFG’s non-performing auto loans amounted to $20.8 million (15.9% of OFG’s total non-performing loans), a 3.5% increase from $20.1 million at December 31, 2024 (24.1% of OFG’s total non-performing loans).
Announcement of Forthcoming 2025 Capital Actions In January 2025, OFG announced that its Board of Directors approved the increase of its regular quarterly cash dividend to $0.30 per common share from $0.25 per share, beginning in the quarter ending March 31, 2025.
RECENT DEVELOPMENTS Capital Actions 2025 Capital Actions In January 2025, OFG announced that its Board of Directors (the “Board”) approved the increase of its regular quarterly cash dividend to $0.30 per common share from $0.25 per share, beginning in the quarter ended March 31, 2025. In April 2025, the Board approved a new $100 million stock repurchase program.
Total Provision for Cr e dit Losses of $30.2 million compared to $21.4 million in the third quarter of 2024 and $19.7 million in the fourth quarter of 2023.
Total Provision for Cr e dit Losses of $31.9 million compared to $28.3 million in the third quarter of 2025 and $30.2 million in the fourth quarter of 2024.
As of December 31, 2023, total non-accrual loans excluded $6.4 million of past due commercial loans held - for - sale, these loans were sold in 2024. There were no past due or non-accrual commercial loans held-for-sale as of December 31, 2024.
There were no past due or non-accrual commercial loans held-for-sale as of December 31, 2024.
At December 31, 2024, OFG’s net loan portfolio increased by $232.2 million or 3.1% reflecting increases in commercial, retail auto and consumer loans, partially offset by regular paydowns and securitization of residential mortgage loans. Financial Assets Managed At December 31, 2024, OFG’s financial assets include those managed by OFG’s trust division and its securities broker-dealer and insurance agency subsidiaries.
At December 31, 2025, OFG’s net loan portfolio increased by $380.4 million or 5.0% reflecting increases in US and Puerto Rico commercial, auto and consumer loans, partially offset by mortgage securitization and portfolio run-off. Financial Assets Managed At December 31, 2025, OFG’s financial assets include those managed by OFG’s trust division and its securities broker-dealer and insurance agency subsidiaries.
Tangible Book Value per share was $25.43 compared to $26.15 in the third quarter of 2024 and $23.13 in the fourth quarter of 2023.
Tangible Book Value per share was $29.96 compared to $28.92 in the third quarter of 2025 and $25.43 in the fourth quarter of 2024.
Comparison of the years ended December 31, 2024 and 2023 OFG's non-interest income of $123.2 million decreased by $5.2 million from $128.4 million.
Comparison of the years ended December 31, 2025 and 2024 OFG ’ s non-interest income of $123.0 million decreased by $0.2 million from $123.2 million.
Loans in these programs are evaluated by designated credit underwriters for financial difficulty modification if OFG grants a concession for legal or economic reasons due to the debtor’s financial difficulties. 53 TABLE 9 - ALLOWANCE FOR CREDIT LOSSES BREAKDOWN December 31, Variance % 2024 2023 (In thousands) ACL: Non-PCD Commercial loans $ 44,814 $ 44,041 1.8 % Mortgage loans 6,395 7,998 (20.0) % Consumer loans 31,818 27,086 17.5 % Auto loans 87,682 73,485 19.3 % Total ACL $ 170,709 $ 152,610 11.9 % PCD Commercial loans $ 622 $ 1,113 (44.1) % Mortgage loans 4,514 7,351 (38.6) % Consumer loans 11 7 57.1 % Auto loans 7 25 (72.0) % Total ACL $ 5,154 $ 8,496 (39.3) % ACL summary Commercial loans $ 45,436 $ 45,154 0.6 % Mortgage loans 10,909 15,349 (28.9) % Consumer loans 31,829 27,093 17.5 % Auto loans 87,689 73,510 19.3 % Total ACL $ 175,863 $ 161,106 9.2 % ACL composition: Commercial loans 25.8 % 28.0 % Mortgage loans 6.2 % 9.5 % Consumer loans 18.1 % 16.8 % Auto loans 49.9 % 45.7 % 100.0 % 100.0 % ACL coverage ratio at end of year: Commercial loans 1.46 % 1.47 % (0.7) % Mortgage loans 0.74 % 0.98 % (24.5) % Consumer loans 4.76 % 4.37 % 8.9 % Auto loans 3.44 % 3.23 % 6.5 % 2.26 % 2.14 % 5.6 % ACL coverage ratio to non-performing loans: Commercial loans 109.3 % 106.2 % 2.9 % Mortgage loans 63.5 % 75.8 % (16.2) % Consumer loans 756.6 % 802.5 % (5.7) % Auto loans 437.2 % 385.8 % 13.3 % 211.9 % 189.1 % 12.1 % 54 TABLE 10 - ALLOCATION OF THE ALLOWANCE FOR CREDIT LOSSES December 31, 2024 2023 Amount of ACL Percent of loans in each category of total loans [1] Amount of ACL Percent of loans in each category of total loans [1] (In thousands) (In thousands) Commercial loans $ 45,436 39.8% $ 45,154 40.8% Mortgage loans 10,909 18.9% 15,349 20.7% Consumer loans 31,829 8.6% 27,093 8.2% Auto loans 87,689 32.7% 73,510 30.3% Total $ 175,863 100.0 % $ 161,106 100.0 % [1] Total loans in this table refers to total loans held for investment.
Loans in these programs are evaluated by designated credit underwriters for financial difficulty modification if OFG grants a concession for legal or economic reasons due to the debtor’s financial difficulties. 51 TABLE 9 - ALLOWANCE FOR CREDIT LOSSES BREAKDOWN December 31, Variance % 2025 2024 (In thousands) ACL: Non-PCD Commercial loans $ 65,943 $ 44,814 47.1 % Mortgage loans 6,358 6,395 (0.6) % Consumer loans 33,466 31,818 5.2 % Auto loans 92,472 87,682 5.5 % Total ACL $ 198,239 $ 170,709 16.1 % PCD Commercial loans $ 493 $ 622 (20.7) % Mortgage loans 3,599 4,514 (20.3) % Consumer loans 9 11 (18.2) % Auto loans 1 7 (85.7) % Total ACL $ 4,102 $ 5,154 (20.4) % ACL summary Commercial loans $ 66,436 $ 45,436 46.2 % Mortgage loans 9,957 $ 10,909 (8.7) % Consumer loans 33,475 $ 31,829 5.2 % Auto loans 92,473 $ 87,689 5.5 % Total ACL $ 202,341 $ 175,863 15.1 % ACL composition: Commercial loans 32.8 % 25.8 % Mortgage loans 4.9 % 6.2 % Consumer loans 16.5 % 18.1 % Auto loans 45.8 % 49.9 % 100.0 % 100.0 % ACL coverage ratio at end of period: Commercial loans 1.90 % 1.46 % 30.1 % Mortgage loans 0.72 % 0.74 % (2.7) % Consumer loans 4.90 % 4.76 % 2.9 % Auto loans 3.51 % 3.44 % 2.0 % 2.47 % 2.26 % 9.3 % ACL coverage ratio to non-performing loans: Commercial loans 76.1 % 109.3 % (30.4) % Mortgage loans 56.5 % 63.5 % (11.0) % Consumer loans 764.6 % 756.6 % 1.1 % Auto loans 445.7 % 437.2 % 1.9 % 155.6 % 211.9 % (26.6) % 52 TABLE 10 - ALLOCATION OF THE ALLOWANCE FOR CREDIT LOSSES December 31, 2025 2024 Amount of ACL Percent of loans in each category of total loans [1] Amount of ACL Percent of loans in each category of total loans [1] (In thousands) (In thousands) Commercial loans $ 66,436 42.6% $ 45,436 39.8% Mortgage loans 9,957 17.0% 10,909 18.9% Consumer loans 33,475 8.3% 31,829 8.6% Auto loans 92,473 32.1% 87,689 32.7% Total $ 202,341 100.0 % $ 175,863 100.0 % [1] Total loans in this table refers to total loans held-for-investment.
Net charge-offs variances were as follows: • Residential mortgage loans net recoveries in 2024 amounted to $2.1 million, increasing by $1.3 million when compared to net recoveries of $839 thousand in 2023. • Commercial loans net charge-offs in 2024 amounted $5.7 million, decreasing by $8.8 million, when compared to $14.5 million in 2023.
Net charge-offs variances were as follows: • Residential mortgage loans net recoveries for 2025 remained constant at $2.1 million, when compared to prior year. • Commercial loans net charge-offs for 2025 amounted to $14.5 million, increasing by $8.8 million, when compared to $5.7 million in the prior year.
Capital: CET1 ratio was 14.26% compared to 14.37% in the third quarter of 2024 and 14.12% in the fourth quarter of 2023. The Tangible Common Equity ratio was 10.13% compared to 10.72% in the third quarter of 2024 and 9.68% in the fourth quarter of 2023.
Compared to the third quarter of 2025, the fourth quarter of 2025 reflected increased deposits. Capital: CET1 ratio was 13.97% compared to 14.13% in the third quarter of 2025 and 14.26% in the fourth quarter of 2024. Tangible Common Equity ratio was 10.47% compared to 10.55% in the third quarter of 2025 and 10.13% in the fourth quarter of 2024.
These increases were partially offset by higher interest expense of $73.8 million from interest paid on: (i) deposits of $74.3 million due to higher average cost of total deposits of 68 basis point and (ii) borrowings of $0.5 million reflecting FHLB advances taken in late 2023 and during 2024 and new securities under agreements to repurchase in late 2024. 41 TABLE 2 - NON-INTEREST INCOME SUMMARY Year Ended December 31, 2024 2023 Variance % (In thousands) Banking service revenue $ 66,923 $ 70,078 (4.5) % Wealth management revenue 35,622 32,990 8.0 % Mortgage banking activities 18,636 18,787 (0.8) % Total banking and financial service revenue 121,181 121,855 (0.6) % Net loss on sale of securities (7) (1,149) (99.4) % Other non-interest income 2,075 7,675 (73.0) % Total non-interest income $ 123,249 $ 128,381 (4.0) % Non-Interest Income Non-interest income is affected by fees generated from loans and deposit accounts, the amount of assets under management of the Bank’s trust department, transactions generated by clients’ financial assets serviced by OFG’s securities broker-dealer, insurance agency and reinsurance subsidiaries, the level of mortgage banking activities, and gains or losses on sales of assets.
These increases were partially offset by higher interest expense of $10.6 million, mainly from interest paid on borrowings of $8.2 million from FHLB advances and securities under agreements to repurchase taken in 2024 and 2025, and lower interest income on interest bearing cash and money market investments of $0.7 million, reflecting the impact of lower market rates. 39 TABLE 2 - NON-INTEREST INCOME SUMMARY Year Ended December 31, 2025 2024 Variance % (Dollars in thousands) Banking service revenue $ 64,443 $ 66,923 (3.7) % Wealth management revenue 37,765 35,622 6.0 % Mortgage banking activities 19,133 18,636 2.7 % Total banking and financial service revenue 121,341 121,181 0.1 % Other non-interest income 1,635 2,068 (20.9) % Total non-interest income $ 122,976 $ 123,249 (0.2) % Non-Interest Income Non-interest income is affected by fees generated from loans and deposit accounts, the amount of assets under management of the Bank’s trust department, transactions generated by clients’ financial assets serviced by OFG’s securities broker-dealer, insurance agency and reinsurance subsidiaries, the level of mortgage banking activities, and gains or losses on sales of assets.
At December 31, 2024, the estimated remaining number of shares that may be purchased under the $50.0 million programs is 701,236 and was calculated by dividing the remaining balance of $29.7 million by $42.32 (closing price of OFG’s common stock at December 31, 2024).
At December 31, 2025, the estimated remaining number of shares that may be purchased under the Existing Repurchase Programs is 929,244 and was calculated by dividing the remaining balance of $38.1 million by $40.98 (closing price of OFG’s common stock at December 31, 2025).
Management believes that the exclusion of those items permits consistent comparability. Amounts presented as part of non-interest income that were excluded from the efficiency ratio computation for years ended December 31, 2024 and 2023 amounted to $2.1 million and $6.5 million, respectively.
Amounts presented as part of non-interest income that were excluded from the efficiency ratio computation for 2025 and 2024 amounted to $1.6 million and $2.1 million, respectively. Comparison of the years ended December 31, 2025 and 2024 Provision for credit losses increased by $25.2 million to $107.5 million from $82.3 million.
Please refer to “Note 10 – Goodwill and Other Intangible Assets” to our consolidated financial statements for more information on the annual goodwill impairment test. 48 TABLE 5 - ASSETS SUMMARY AND COMPOSITION December 31, Variance % 2024 2023 (In thousands) Investments: FNMA and FHLMC certificates $ 2,205,039 $ 1,730,655 27.4 % US Treasury securities 1,150 496,113 (99.8) % GNMA certificates 417,985 376,294 11.1 % Equity securities 54,896 38,469 42.7 % CMOs issued by US government-sponsored agencies 5,639 9,610 (41.3) % Other debt securities 35,550 35,616 (0.2) % Trading securities 18 13 38.5 % Total investments 2,720,277 2,686,770 1.2 % Loans, net 7,633,831 7,401,618 3.1 % Total investments and loans 10,354,108 10,088,388 2.6 % Other assets: Cash and due from banks 584,467 743,550 (21.4) % Money market investments 6,670 4,623 44.3 % Foreclosed real estate 4,002 10,780 (62.9) % Accrued interest receivable 71,667 71,400 0.4 % Deferred tax asset, net 6,248 4,923 26.9 % Premises and equipment, net 104,512 104,102 0.4 % Servicing assets 70,435 49,520 42.2 % Goodwill 84,241 84,241 0.0 % Other intangible assets 14,782 20,694 (28.6) % Operating lease right-of-use assets 19,197 21,725 (11.6) % Customers' liability on acceptances 31,526 25,576 23.3 % Other assets 148,879 114,931 29.5 % Total other assets 1,146,626 1,256,065 (8.7) % Total assets $ 11,500,734 $ 11,344,453 1.4 % Investment portfolio composition: FNMA and FHLMC certificates 81.1 % 64.4 % US Treasury securities 0.0 % 18.5 % GNMA certificates 15.4 % 14.0 % Equity securities 2.0 % 1.4 % CMOs issued by US government-sponsored agencies 0.2 % 0.4 % Other debt securities and trading securities 1.3 % 1.3 % 100.0 % 100.0 % 49 TABLE 6 - LOAN PORTFOLIO COMPOSITION December 31, Variance % 2024 2023 (In thousands) Loans held for investment: Commercial loans $ 3,103,091 $ 3,076,903 0.9 % Mortgage loans 1,470,817 1,562,609 (5.9) % Consumer loans 668,561 620,446 7.8 % Auto loans 2,549,493 2,274,421 12.1 % 7,791,962 7,534,379 3.4 % Allowance for credit losses (175,863) (161,106) 9.2 % Total loans held for investment, net 7,616,099 7,373,273 3.3 % Mortgage loans held for sale 13,286 — 100.0 % Other loans held for sale 4,446 28,345 (84.3) % Total loans held for sale 17,732 28,345 (37.4) % Total loans, net $ 7,633,831 $ 7,401,618 3.1 % OFG’s loan portfolio is composed of commercial, mortgage, consumer, and auto loans.
Please refer to “Note 10 – Goodwill and Other Intangible Assets” to our consolidated financial statements for more information on the annual goodwill impairment test. 46 TABLE 5 - ASSETS SUMMARY AND COMPOSITION December 31, Variance % 2025 2024 (In thousands) Investments: FNMA and FHLMC certificates $ 2,285,078 $ 2,205,039 3.6 % GNMA certificates 490,571 417,985 17.4 % US Treasury securities 1,651 1,150 43.6 % Equity securities 62,738 54,896 14.3 % CMOs issued by US government-sponsored agencies 2,579 5,639 (54.3) % Other debt securities 501 35,550 (98.6) % Trading securities 23 18 27.8 % Total investments 2,843,141 2,720,277 4.5 % Loans, net 8,014,246 7,633,831 5.0 % Total investments and loans 10,857,387 10,354,108 4.9 % Other assets: Cash and due from banks 1,036,074 584,467 77.3 % Money market investments 4,261 6,670 (36.1) % Foreclosed real estate 2,490 4,002 (37.8) % Accrued interest receivable 71,110 71,667 (0.8) % Deferred tax asset, net 104,359 6,248 1,570.3 % Premises and equipment, net 93,554 104,512 (10.5) % Customers' liability on acceptances 22,442 31,526 (28.8) % Servicing assets 66,333 70,435 (5.8) % Goodwill 84,241 84,241 0.0 % Other intangible assets 9,854 14,782 (33.3) % Operating lease right-of-use assets 21,261 19,197 10.8 % Other assets 92,291 148,879 (38.0) % Total other assets 1,608,270 1,146,626 40.3 % Total assets $ 12,465,657 $ 11,500,734 8.4 % Investment portfolio composition: FNMA and FHLMC certificates 80.3 % 81.1 % GNMA certificates 17.3 % 15.4 % US Treasury securities 0.1 % 0.0 % Equity securities 2.2 % 2.0 % CMOs issued by US government-sponsored agencies 0.1 % 0.2 % Other debt securities and trading securities 0.0 % 1.3 % 100.0 % 100.0 % 47 TABLE 6 - LOAN PORTFOLIO COMPOSITION December 31, Variance % 2025 2024 (In thousands) Loans held-for-investment: Commercial loans $ 3,490,169 $ 3,103,091 12.5 % Mortgage loans 1,390,346 1,470,817 (5.5) % Consumer loans 683,548 668,561 2.2 % Auto loans 2,636,979 2,549,493 3.4 % 8,201,042 7,791,962 5.3 % Allowance for credit losses (202,341) (175,863) 15.1 % Total loans held-for-investment, net 7,998,701 7,616,099 5.0 % Mortgage loans held-for-sale 12,483 13,286 (6.0) % Other loans held-for-sale 3,062 4,446 (31.1) % Total loans held-for-sale 15,545 17,732 (12.3) % Total loans, net $ 8,014,246 $ 7,633,831 5.0 % OFG’s loan portfolio is composed of commercial, mortgage, consumer, and auto loans.
The risk-based capital ratios presented in Table 17 include CET1, tier 1 capital, total capital and leverage capital as of December 31, 2024 and 2023 and are calculated based on the Basel III capital rules related to the measurement of capital, risk-weighted assets and average assets. 61 The following are OFG’s consolidated capital, dividends, and stock data, including capital ratios under the Basel III capital rules at December 31, 2024 and 2023: TABLE 17 — CAPITAL, DIVIDENDS AND STOCK DATA December 31, Variance 2024 2023 % (Dollars in thousands, except per share data) Capital data: Stockholders’ equity $ 1,254,371 $ 1,193,480 5.1% Regulatory Capital Ratios data: Common equity tier 1 capital ratio 14.26 % 14.12 % 1.0 % Minimum common equity tier 1 capital ratio required 4.50 % 4.50 % — % Actual common equity tier 1 capital $ 1,256,906 1,174,205 7.0% Minimum common equity tier 1 capital required $ 396,559 374,301 5.9% Minimum capital conservation buffer required (2.5%) $ 220,311 207,945 5.9% Excess over regulatory requirement $ 640,036 591,959 8.1% Risk-weighted assets $ 8,812,422 8,317,802 5.9% Tier 1 risk-based capital ratio 14.26 % 14.12 % 1.0 % Minimum tier 1 risk-based capital ratio required 6.00 % 6.00 % — % Actual tier 1 risk-based capital $ 1,256,906 $ 1,174,205 7.0% Minimum tier 1 risk-based capital required $ 528,745 $ 499,068 5.9% Minimum capital conservation buffer required (2.5%) $ 220,311 207,945 5.9% Excess over regulatory requirement $ 507,850 $ 467,192 8.7% Risk-weighted assets $ 8,812,422 $ 8,317,802 5.9% Total risk-based capital ratio 15.52 % 15.37 % 1.0 % Minimum total risk-based capital ratio required 8.00 % 8.00 % — % Actual total risk-based capital $ 1,367,692 $ 1,278,537 7.0% Minimum total risk-based capital required $ 704,994 $ 665,424 5.9% Minimum capital conservation buffer required (2.5%) $ 220,311 207,945 5.9% Excess over regulatory requirement $ 442,387 $ 405,168 9.2% Risk-weighted assets $ 8,812,422 $ 8,317,802 5.9% Leverage capital ratio 10.93 % 11.03 % (0.9) % Minimum leverage capital ratio required 4.00 % 4.00 % — % Actual tier 1 capital $ 1,256,906 $ 1,174,205 7.0% Minimum tier 1 capital required $ 460,138 $ 425,911 8.0% Excess over regulatory requirement $ 796,768 $ 748,294 6.5% Total equity to total assets 10.91 % 10.52 % 3.7 % Total equity to risk-weighted assets 14.23 % 14.35 % (0.8) % Stock data: Outstanding common shares 45,440,269 47,065,156 (3.5)% Book value per common share $ 27.60 $ 25.36 8.8% Tangible book value per common share $ 25.43 $ 23.13 9.9% Market price at end of year $ 42.32 $ 37.48 12.9% Market capitalization at end of year $ 1,923,032 $ 1,764,002 9.0% 62 The following table presents OFG’s capital adequacy information under the Basel III capital rules: December 31, Variance 2024 2023 % (Dollars in thousands) Risk-based capital: Common equity tier 1 capital $ 1,256,906 $ 1,174,205 7.0% Tier 1 capital 1,256,906 1,174,205 7.0% Additional Tier 2 capital 110,786 104,332 6.2% Total risk-based capital $ 1,367,692 $ 1,278,537 7.0% Risk-weighted assets: Balance sheet items $ 8,215,743 $ 7,768,828 5.8% Off-balance sheet items 596,679 548,974 8.7% Total risk-weighted assets $ 8,812,422 $ 8,317,802 5.9% Ratios: Common equity tier 1 capital (minimum required, including capital conservation buffer - 7%) 14.26 % 14.12 % 1.0% Tier 1 capital (minimum required, including capital conservation buffer - 8.5%) 14.26 % 14.12 % 1.0% Total capital (minimum required, including capital conservation buffer - 10.5%) 15.52 % 15.37 % 1.0% Leverage ratio (minimum required - 4%) 10.93 % 11.03 % (0.9)% From December 31, 2023 to December 31, 2024, leverage capital ratio decreased from 11.03% to 10.93%, tier 1 risk-based capital ratio and common equity tier 1 capital ratio increased from 14.12% to 14.26%, and total risk-based capital ratio increased from 15.37% to 15.52%.
The following are OFG’s consolidated capital, dividends, and stock data, including capital ratios under the Basel III capital rules at December 31, 2025 and 2024: 60 TABLE 17 — CAPITAL, DIVIDENDS AND STOCK DATA December 31, Variance 2025 2024 % (Dollars in thousands, except per share data) Capital data: Stockholders’ equity $ 1,390,005 $ 1,254,371 10.8% Regulatory Capital Ratios data: Common equity tier 1 capital ratio 13.97 % 14.26 % (2.0) % Minimum common equity tier 1 capital ratio required 4.50 % 4.50 % — % Actual common equity tier 1 capital $ 1,318,633 1,256,906 4.9% Minimum common equity tier 1 capital required $ 424,620 396,559 7.1% Minimum capital conservation buffer required (2.5%) $ 235,900 220,311 7.1% Excess over regulatory requirement $ 658,113 640,036 2.8% Risk-weighted assets $ 9,436,010 8,812,422 7.1% Tier 1 risk-based capital ratio 13.97 % 14.26 % (2.0) % Minimum tier 1 risk-based capital ratio required 6.00 % 6.00 % — % Actual tier 1 risk-based capital $ 1,318,633 $ 1,256,906 4.9% Minimum tier 1 risk-based capital required $ 566,161 $ 528,745 7.1% Minimum capital conservation buffer required (2.5%) $ 235,900 220,311 7.1% Excess over regulatory requirement $ 516,572 $ 507,850 1.7% Risk-weighted assets $ 9,436,010 $ 8,812,422 7.1% Total risk-based capital ratio 15.24 % 15.52 % (1.8) % Minimum total risk-based capital ratio required 8.00 % 8.00 % — % Actual total risk-based capital $ 1,437,596 $ 1,367,692 5.1% Minimum total risk-based capital required $ 754,881 $ 704,994 7.1% Minimum capital conservation buffer required (2.5%) $ 235,900 220,311 7.1% Excess over regulatory requirement $ 446,815 $ 442,387 1.0% Risk-weighted assets $ 9,436,010 $ 8,812,422 7.1% Leverage capital ratio 10.71 % 10.93 % (2.0) % Minimum leverage capital ratio required 4.00 % 4.00 % — % Actual tier 1 capital $ 1,318,633 $ 1,256,906 4.9% Minimum tier 1 capital required $ 492,568 $ 460,138 7.0% Excess over regulatory requirement $ 826,065 $ 796,768 3.7% Tangible common equity to total assets 10.40 % 10.05 % 3.5 % Tangible common equity to risk-weighted assets 13.73 % 13.11 % 4.7 % Total equity to total assets 11.15 % 10.91 % 2.2 % Total equity to risk-weighted assets 14.73 % 14.23 % 3.5 % Stock data: Outstanding common shares 43,257,167 45,440,269 (4.8)% Book value per common share $ 32.13 $ 27.60 16.4% Tangible book value per common share $ 29.96 $ 25.43 17.8% Market price at end of year $ 40.98 $ 42.32 (3.2)% Market capitalization at end of year $ 1,772,679 $ 1,923,032 (7.8)% 61 The following table presents OFG’s capital adequacy information under the Basel III capital rules: December 31, Variance 2025 2024 % (Dollars in thousands) Risk-based capital: Common equity tier 1 capital $ 1,318,633 $ 1,256,906 4.9% Tier 1 capital 1,318,633 1,256,906 4.9% Additional Tier 2 capital 118,963 110,786 7.4% Total risk-based capital $ 1,437,596 $ 1,367,692 5.1% Risk-weighted assets: Balance sheet items $ 8,798,325 $ 8,215,743 7.1% Off-balance sheet items 637,685 596,679 6.9% Total risk-weighted assets $ 9,436,010 $ 8,812,422 7.1% Ratios: Common equity tier 1 capital (minimum required, including capital conservation buffer - 7%) 13.97 % 14.26 % (2.0)% Tier 1 capital (minimum required, including capital conservation buffer - 8.5%) 13.97 % 14.26 % (2.0)% Total capital (minimum required, including capital conservation buffer - 10.5%) 15.24 % 15.52 % (1.8)% Leverage ratio (minimum required - 4%) 10.71 % 10.93 % (2.0)% From December 31, 2024 to December 31, 2025, the leverage capital ratio decreased from 10.93% to 10.71%, the tier 1 risk-based and common equity tier 1 capital ratios decreased from 14.26% to 13.97%, and the total risk-based capital ratio decreased from 15.52% to 15.24%.
These increases were partially offset by a decrease of $6.7 million in interest income from mortgage loans due to a reduction of $135.4 million in the average balance of this portfolio, mainly from regular paydowns and the securitization and sale of conforming loans; and • A $42.4 million increase in interest income from investment securities, primarily due to the acquisition of higher-yield investment securities in 2023 and 2024.
These increases were partially offset by lower interest income of: (i) $5.9 million from mortgage loans due to a reduction of $94.8 million in the average balance of this portfolio, mainly from the securitization and sale of conforming loans and regular paydowns, including the extinguishment of the PCD portfolio; and (ii) commercial loans of $0.7 million, reflecting the repricing of variable rate loans at lower market rates; and • A $15.1 million increase in interest income from investment securities, primarily due to the acquisition of higher-yield investment securities in 2024 and 2025.
At December 31, 2024 and 2023, OFG’s market capitalization for its outstanding common stock was $1.923 billion ($42.32 per share) and $1.764 billion ($37.48 per share), respectively.
OFG’s common stock is traded on the NYSE under the symbol “OFG”. At December 31, 2025 and 2024, OFG’s market capitalization for its outstanding common stock was $1.773 billion ($40.98 per share) and $1.923 billion ($42.32 per share), respectively.
These decreases were offset by: • A $2.6 million increase in wealth management revenue primarily reflecting: (i) $1.4 million in broker-dealer fees related to higher investment advisory service fees and mutual funds retailer fees, (ii) $813 thousand in insurance income related to higher income from annuities and (iii) an increase in trust fees of $449 thousand due to higher trustee-only fees; and • A $1.1 million loss associated with the sale of a $149.4 million short-term US treasury note AFS in 2023. 42 TABLE 3 - NON-INTEREST EXPENSES SUMMARY Year Ended December 31, 2024 2023 Variance % (In thousands) Compensation and employee benefits $ 159,710 $ 155,827 2.5 % Occupancy, equipment and infrastructure costs 59,123 59,235 (0.2) % Electronic banking charges 42,816 41,336 3.6 % Information technology expenses 27,582 27,162 1.5 % Professional and service fees 18,876 18,764 0.6 % Taxes, other than payroll and income taxes 13,949 12,968 7.6 % Insurance 11,252 10,494 7.2 % Loan servicing and clearing expenses 7,935 7,774 2.1 % Advertising, business promotion, and strategic initiatives 9,714 8,743 11.1 % Communication 4,551 4,678 (2.7) % Printing, postage, stationery and supplies 3,816 3,338 14.3 % Foreclosed real estate and other repossessed assets expenses, net of (income) 3,012 (405) 843.7 % Other 13,354 13,451 (0.7) % Total non-interest expenses $ 375,690 $ 363,365 3.4 % Relevant ratios and data: Efficiency ratio 52.94 % 53.22 % Compensation and benefits to non-interest expense 42.51 % 42.88 % Compensation to average total assets owned 1.41 % 1.53 % Number of employees end of year 2,246 2,248 Average number of employees 2,235 2,258 Average compensation per employee (in thousands) $ 71.45 $ 69.01 Average loans per average employee $ 3,412 $ 3,154 Non-Interest Expense Comparison of the years ended December 31, 2024 and 2023 Non-interest expense was $375.7 million, representing an increase of 3.4%, or $12.3 million, compared to $363.4 million.
These increases were partially offset by a $4.1 million unfavorable variance in the valuation of mortgage servicing rights. 40 TABLE 3 - NON-INTEREST EXPENSES SUMMARY Year Ended December 31, 2025 2024 Variance % (Dollars in thousands) Compensation and employee benefits $ 162,426 $ 159,710 1.7 % Occupancy, equipment and infrastructure costs 59,781 59,123 1.1 % Electronic banking charges 47,077 42,816 10.0 % Information technology expenses 26,806 27,582 (2.8) % Professional and service fees 23,705 18,876 25.6 % Taxes, other than payroll and income taxes 15,774 13,949 13.1 % Insurance 11,375 11,252 1.1 % Advertising, business promotion, and strategic initiatives 11,416 9,714 17.5 % Loan servicing and clearing expenses 9,145 7,935 15.2 % Communication 4,553 4,551 — % Printing, postage, stationery and supplies 4,148 3,816 8.7 % Director and investor relations 1,354 1,250 8.3 % Foreclosed real estate and other repossessed assets expenses (income), net 1,026 3,012 65.9 % Other 11,227 12,104 (7.2) % Total non-interest expenses $ 389,813 $ 375,690 3.8 % Relevant ratios and data: Efficiency ratio 53.41 % 52.94 % Compensation and benefits to non-interest expense 41.67 % 42.51 % Compensation to average total assets owned 1.35 % 1.41 % Number of employees end of year 2,185 2,246 Average number of employees 2,214 2,235 Average compensation per employee (in thousands) $ 73.36 $ 71.45 Average loans per average employee $ 3,610 $ 3,412 Comparison of the years ended December 31, 2025 and 2024 Non-interest expense was $389.8 million, representing an increase of 3.8% or $14.1 million, compared to $375.7 million.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES The accounting and reporting policies followed by OFG conform with GAAP and general practices within the financial services industry. The preparation of these financial statements requires our management to make judgments, assumptions and estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities.
The preparation of these financial statements requires our management to make judgments, assumptions and estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. We evaluate these judgments, assumptions and estimates for changes that would affect the reported amounts.
Auto loans production increased by 4% or $37.1 million to $956.8 million in 2024 from $919.7 million in 2023.
Auto loans production decreased by 12.76% or $122.1 million to $834.7 million in 2025 from $956.8 million in 2024.
Total Interest Expense of $41.0 million compared to $41.2 million in the third quarter of 2024 and $32.7 million in the fourth quarter of 2023. Compared to the third quarter of 2024, the fourth quarter of 2024 decreased $0.1 million, primarily reflecting slightly lower average balances and costs of core deposits and higher average balances of borrowings and brokered deposits.
Total Interest Expense of $44.5 million compared to $45.4 million in the third quarter of 2025 and $41.0 million in the fourth quarter of 2024. Compared to the third quarter of 2025, total interest expense in the fourth quarter of 2025 decreased by $0.9 million, reflecting higher average balances of deposits and borrowings at lower average rates.
TABLE 1A - ANALYSIS OF NET INTEREST INCOME AND CHANGES DUE TO VOLUME/RATE FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 Interest Average rate Average balance 2024 2023 2024 2023 2024 2023 (Dollars in thousands) A - TAX EQUIVALENT SPREAD Interest-earning assets $ 750,277 648,880 6.93 % 6.70 % $ 10,829,907 $ 9,688,019 Tax equivalent adjustment 16,740 16,061 0.15 % 0.17 % — — Interest-earning assets - tax equivalent 767,017 664,941 7.08 % 6.87 % 10,829,907 9,688,019 Interest-bearing liabilities 161,837 88,010 1.64 % 0.99 % 9,866,641 8,903,725 Tax equivalent net interest income / spread 605,180 576,931 5.44 % 5.88 % 963,266 784,294 Tax equivalent interest rate margin 5.59 % 6.05 % B - NORMAL SPREAD Interest-earning assets: Investments: Investment securities 105,086 62,730 4.06 % 3.23 % 2,591,101 1,940,776 Interest bearing cash and money market investments 31,589 31,406 5.16 % 5.02 % 611,976 626,067 Total investments 136,675 94,136 4.27 % 3.67 % 3,203,077 2,566,843 Non-PCD loans Mortgage loans 32,981 34,442 5.67 % 5.54 % 581,907 621,382 Commercial loans 232,884 201,260 7.89 % 7.69 % 2,941,763 2,617,240 Consumer loans 77,576 70,197 11.55 % 11.42 % 671,859 614,902 Auto loans 206,289 176,144 8.53 % 8.30 % 2,417,580 2,122,997 Total Non-PCD loans 549,730 482,043 8.31 % 8.07 % 6,613,109 5,976,521 PCD loans Mortgage loans 55,199 60,434 6.24 % 6.16 % 884,621 980,564 Commercial loans 8,445 11,764 6.62 % 7.35 % 127,509 160,001 Consumer loans 77 109 12.09 % 14.99 % 637 727 Auto loans 151 394 15.87 % 11.72 % 954 3,363 Total PCD loans 63,872 72,701 6.30 % 6.35 % 1,013,721 1,144,655 Total loans (1) 613,602 554,744 8.05 % 7.79 % 7,626,830 7,121,176 Total interest-earning assets $ 750,277 $ 648,880 6.93 % 6.70 % $ 10,829,907 $ 9,688,019 39 Interest Average rate Average balance 2024 2023 2024 2023 2024 2023 (Dollars in thousands) Interest-bearing liabilities: Deposits: NOW Accounts 78,362 25,710 2.31 % 1.03 % 3,399,476 2,489,560 Savings accounts 18,843 17,727 0.93 % 0.80 % 2,027,746 2,214,256 Time deposits 46,482 25,225 2.93 % 1.92 % 1,585,427 1,315,745 Total core deposits 143,687 68,662 2.04 % 0.86 % 7,012,649 6,019,561 Brokered deposits 2,065 2,020 4.63 % 5.16 % 44,555 39,100 145,752 70,682 2.07 % 1.17 % 7,057,204 6,058,661 Non-interest bearing deposits — — — % — % 2,556,518 2,590,523 Fair value premium and core deposit intangible amortizations 4,528 5,283 — % — % — — Total deposits 150,280 75,965 1.56 % 0.88 % 9,613,722 8,649,184 Borrowings: Securities sold under agreements to repurchase 542 3,306 4.81 % 5.55 % 11,270 59,541 Advances from FHLB and other borrowings 11,015 8,739 4.56 % 4.48 % 241,649 195,000 Total borrowings 11,557 12,045 4.57 % 4.73 % 252,919 254,541 Total interest-bearing liabilities 161,837 88,010 1.64 % 0.99 % 9,866,641 8,903,725 Net interest income / spread $ 588,440 $ 560,870 5.29 % 5.71 % Interest rate margin 5.43 % 5.79 % Excess of average interest-earning assets over average interest-bearing liabilities $ 963,266 $ 784,294 Average interest-earning assets to average interest-bearing liabilities ratio 109.76 % 108.81 % (1) Includes loans HFS and excludes ACL.
TABLE 1 - ANALYSIS OF NET INTEREST INCOME AND CHANGES DUE TO VOLUME/RATE FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 Interest Average rate Average balance 2025 2024 2025 2024 2025 2024 (Dollars in thousands) A - TAX EQUIVALENT SPREAD (Non-GAAP) Interest-earning assets $ 780,936 750,277 6.77 % 6.93 % $ 11,542,913 $ 10,829,907 Tax equivalent adjustment 15,322 16,740 0.13 % 0.15 % — — Interest-earning assets - tax- equivalent (1) 796,258 767,017 6.90 % 7.08 % 11,542,913 10,829,907 Interest-bearing liabilities 172,469 161,837 1.65 % 1.64 % 10,477,657 9,866,641 Tax equivalent net interest income / spread 623,789 605,180 5.25 % 5.44 % 1,065,256 963,266 Tax equivalent interest rate margin 5.38 % 5.59 % B - NORMAL SPREAD Interest-earning assets: Investments: Investment securities 120,149 105,086 4.26 % 4.06 % 2,817,903 2,591,101 Interest bearing cash and money market investments 30,847 31,589 4.21 % 5.16 % 732,869 611,976 Total investments 150,996 136,675 4.25 % 4.27 % 3,550,772 3,203,077 Non-PCD loans Mortgage loans 32,295 32,981 5.59 % 5.67 % 577,525 581,907 Commercial loans 232,796 232,884 7.26 % 7.89 % 3,205,113 2,941,763 Consumer loans 81,042 77,576 11.56 % 11.55 % 700,897 671,859 Auto loans 224,404 206,289 8.54 % 8.53 % 2,626,230 2,417,580 Total Non-PCD loans 570,537 549,730 8.02 % 8.31 % 7,109,765 6,613,109 PCD loans Mortgage loans 49,986 55,199 6.29 % 6.24 % 794,214 884,621 Commercial loans 9,272 8,445 10.60 % 6.62 % 87,499 127,509 Consumer loans 97 77 18.51 % 12.09 % 526 637 Auto loans 48 151 35.17 % 15.87 % 137 954 Total PCD loans 59,403 63,872 6.73 % 6.30 % 882,376 1,013,721 Total loans (2) 629,940 613,602 7.88 % 8.05 % 7,992,141 7,626,830 Total interest-earning assets $ 780,936 $ 750,277 6.77 % 6.93 % $ 11,542,913 $ 10,829,907 37 Interest Average rate Average balance 2025 2024 2025 2024 2025 2024 (Dollars in thousands) Interest-bearing liabilities: Deposits: NOW Accounts 61,263 78,362 1.91 % 2.31 % 3,206,076 3,399,476 Savings accounts 22,864 18,843 1.05 % 0.93 % 2,172,288 2,027,746 Time deposits 56,214 46,482 3.07 % 2.93 % 1,828,809 1,585,427 Total core deposits 140,341 143,687 1.95 % 2.04 % 7,207,173 7,012,649 Brokered deposits 8,633 2,065 4.12 % 4.63 % 209,487 44,555 148,974 145,752 2.01 % 2.07 % 7,416,660 7,057,204 Non-interest bearing deposits — — — % — % 2,583,225 2,556,518 Fair value premium and core deposit intangible amortizations 3,773 4,528 — % — % — — Total deposits 152,747 150,280 1.53 % 1.56 % 9,999,885 9,613,722 Borrowings: Securities sold under agreements to repurchase 2,767 542 4.13 % 4.81 % 66,941 11,270 Advances from FHLB and other borrowings 16,955 11,015 4.13 % 4.56 % 410,831 241,649 Total borrowings 19,722 11,557 4.13 % 4.57 % 477,772 252,919 Total interest-bearing liabilities 172,469 161,837 1.65 % 1.64 % 10,477,657 9,866,641 Net interest income / spread $ 608,467 $ 588,440 5.12 % 5.29 % Interest rate margin 5.27 % 5.43 % Excess of average interest-earning assets over average interest-bearing liabilities $ 1,065,256 $ 963,266 Average interest-earning assets to average interest-bearing liabilities ratio 110.17 % 109.76 % (1) To provide meaningful comparisons of interest income, yields, and net interest margins, we calculate interest income on a taxable-equivalent basis.
Compared to the third quarter of 2024, the fourth quarter of 2024 reflected increases in Puerto Rico commercial, auto and residential mortgage lending, partially offset by a decrease in U.S. commercial and Puerto Rico consumer lending. Total Investments of $2.72 billion compared to $2.61 billion in the third quarter of 2024 and $2.69 billion in the fourth quarter of 2023.
Compared to the third quarter of 2025, new loan production in the fourth quarter of 2025 reflected decreases in Puerto Rico and U.S. commercial and consumer lending, partially offset by increases in auto and residential mortgage lending. Year-over-year new loan production increased $265.3 million or 11.5% to a record $2.57 billion.
TABLE 11 - ALLOWANCE FOR CREDIT LOSSES SUMMARY Year Ended December 31, 2024 2023 Variance % (In thousands) Balance at beginning of year $ 161,106 $ 152,673 5.5 % Provision for credit losses 82,547 60,277 36.9 % Charge-offs (104,430) (86,271) 21.0 % Recoveries 36,640 34,427 6.4 % Balance at end of year $ 175,863 $ 161,106 9.2 % 55 TABLE 12 — NET CREDIT LOSSES STATISTICS ON LOANS Year Ended December 31, 2024 2023 Variance % (Dollars in thousands) Non-PCD: Mortgage loans Charge-offs $ (126) $ (759) (83.4) % Recoveries 1,069 1,217 (12.2) % Total 943 458 105.9 % Commercial PR Charge-offs (4,579) (3,678) 24.5 % Recoveries 1,999 833 140.0 % Total (2,580) (2,845) (9.3) % Commercial US Charge-offs (3,638) (10,513) (65.4) % Recoveries 69 41 68.3 % Total (3,569) (10,472) (65.9) % Consumer loans Charge-offs (33,266) (23,655) 40.6 % Recoveries 4,166 4,175 (0.2) % Total (29,100) (19,480) 49.4 % Auto loans Charge-offs (61,651) (43,764) 40.9 % Recoveries 26,334 25,107 4.9 % Total (35,317) (18,657) 89.3 % PCD: Mortgage loans Charge-offs $ (178) $ (317) (43.8) % Recoveries 1,326 698 90.0 % Total 1,148 381 201.3 % Commercial PR Charge-offs (967) (2,794) (65.4) % Recoveries 1,411 1,618 (12.8) % Total 444 (1,176) (137.8) % Consumer loans Charge-offs — (621) (100.0) % Recoveries 62 96 (35.4) % Total 62 (525) (111.8) % Auto loans Charge-offs (25) (170) (85.3) % Recoveries 204 642 (68.2) % Total 179 472 (62.1) % Total charge-offs (104,430) (86,271) 21.0 % Total recoveries 36,640 34,427 6.4 % Net credit losses $ (67,790) $ (51,844) 30.8 % 56 TABLE 12 — NET CREDIT LOSSES STATISTICS ON LOANS (CONTINUED) Year Ended December 31, 2024 2023 Variance % (Dollars in thousands) Net credit losses (recoveries) to average loans outstanding: Mortgage loans (0.14) % (0.05) % 180.0 % Commercial PR 0.09 % 0.19 % (52.6) % Commercial US 0.51 % 1.54 % (66.9) % Consumer loans 4.32 % 3.25 % 32.9 % Auto loans 1.45 % 0.86 % 68.6 % Total 0.89 % 0.73 % 21.9 % Recoveries to charge-offs 35.09 % 39.91 % (12.1) % Average Loans Held for Investment Mortgage loans $ 1,466,528 $ 1,601,946 (8.5) % Commercial PR 2,364,263 2,095,262 12.8 % Commercial US 705,009 681,979 3.4 % Consumer loans 672,496 615,629 9.2 % Auto loans 2,418,534 2,126,360 13.7 % Total $ 7,626,830 $ 7,121,176 7.1 % Net charge-offs in 2024 amounted to $67.8 million (0.89% of average loans), increasing by $15.9 million, when compared to $51.8 million (0.73% of average loans) in 2023.
TABLE 11 - ALLOWANCE FOR CREDIT LOSSES SUMMARY Year Ended December 31, 2025 2024 Variance % (In thousands) Balance at beginning of year $ 175,863 $ 161,106 9.2 % Provision for credit losses 106,713 82,547 29.3 % Charge-offs (118,794) (104,430) 13.8 % Recoveries 38,559 36,640 5.2 % Balance at end of year $ 202,341 $ 175,863 15.1 % 53 TABLE 12 — NET CREDIT LOSSES STATISTICS ON LOANS Year Ended December 31, 2025 2024 Variance % (In thousands) Non-PCD: Mortgage loans Charge-offs $ (34) $ (126) (73.0) % Recoveries 1,193 1,069 11.6 % Total 1,159 943 22.9 % Commercial PR Charge-offs (7,843) (4,579) 71.3 % Recoveries 2,437 1,999 21.9 % Total (5,406) (2,580) 109.5 % Commercial US Charge-offs (6,620) (3,638) 82.0 % Recoveries 44 69 (36.2) % Total (6,576) (3,569) 84.3 % Consumer loans Charge-offs (31,949) (33,266) (4.0) % Recoveries 3,433 4,166 (17.6) % Total (28,516) (29,100) (2.0) % Auto loans Charge-offs (68,807) (61,651) 11.6 % Recoveries 29,422 26,334 11.7 % Total (39,385) (35,317) 11.5 % PCD: Mortgage loans Charge-offs $ (59) $ (178) (66.9) % Recoveries 952 1,326 (28.2) % Total 893 1,148 (22.2) % Commercial PR Charge-offs (3,459) (967) 257.7 % Recoveries 940 1,411 (33.4) % Total (2,519) 444 (667.3) % Consumer loans Charge-offs (1) — 100.0 % Recoveries 33 62 (46.8) % Total 32 62 (48.4) % Auto loans Charge-offs (22) (25) (12.0) % Recoveries 105 204 (48.5) % Total 83 179 (53.6) % Total charge-offs (118,794) (104,430) 13.8 % Total recoveries 38,559 36,640 5.2 % Net credit losses $ (80,235) $ (67,790) 18.4 % 54 TABLE 12 — NET CREDIT LOSSES STATISTICS ON LOANS (CONTINUED) Year Ended December 31, 2025 2024 Variance % (Dollars in thousands) Net credit losses (recoveries) to average loans outstanding: Mortgage loans (0.15) % (0.14) % 7.1 % Commercial PR 0.32 % 0.09 % 255.6 % Commercial US 0.83 % 0.52 % 59.6 % Consumer loans 4.06 % 4.32 % (6.0) % Auto loans 1.50 % 1.45 % 3.4 % Total 1.00 % 0.89 % 12.4 % Recoveries to charge-offs 32.46 % 35.09 % (7.5) % Average Loans Held-for-Investment Mortgage loans $ 1,371,739 $ 1,466,528 (6.5) % Commercial PR 2,497,877 2,364,263 5.7 % Commercial US 794,735 705,009 12.7 % Consumer loans 701,423 672,496 4.3 % Auto loans 2,626,367 2,418,534 8.6 % Total $ 7,992,141 $ 7,626,830 4.8 % Net charge-offs for 2025 amounted to $80.2 million (1.00% of average loans), increasing by $12.4 million, when compared to $67.8 million (0.89% of average loans) in the prior year period.
Purchases contributed to higher average volume of $650.3 million, which resulted in an increase in interest income of $22.9 million, and higher yield by 83 basis points, which contributed to the increase in net interest income of $19.4 million.
These purchases contributed to higher average volume of $226.8 million, contributing $10.6 million to interest income, and higher yield by 20 basis points, which contributed to an increase in interest income of approximately $4.5 million.
At December 31, 2024, total assets managed by the securities broker-dealer and insurance agency subsidiaries from their customers’ investment accounts amounted to $2.247 billion, compared to $2.446 billion at December 31, 2023. The decrease in trust and broker-dealer related assets reflects the termination of services by a retirement plan customer during 2024.
At December 31, 2025, total assets managed by the securities broker-dealer and insurance agency subsidiaries from their customers’ investment accounts amounted to $2.613 billion, compared to $2.247 billion at December 31, 2024. The increase of $365.6 million in broker-dealer related assets is mainly due to new customers accounts opened during the year and changes in current market conditions.
At the time of acquisition, defaulted loans under the GNMA buy-back option program corresponding to this servicing portfolio amounted to $24.2 million. Under the GNMA program, issuers such as OFG have the option but not the obligation to repurchase loans that are 90 days or more past due.
Mortgage loans included delinquent loans in the GNMA buy-back option program amounting to $56.5 million and $48.6 million at December 31, 2025 and 2024, respectively. Under the GNMA program, issuers such as OFG have the option but not the obligation to repurchase loans that are 90 days or more past due.
If based on the analysis performed the pool is classified as non-accrual, the accretion/amortization of the non-credit (discount) premium ceases. 52 The following items comprise non-performing loans held for investment, including non-PCD and PCDs: Commercial loans - At December 31, 2024, OFG’s non-performing commercial loans amounted to $41.6 million (50.1% of OFG’s non-performing loans), a 2.3% decrease from $42.5 million at December 31, 2023 (49.9% of OFG’s non-performing loans).
The following items comprise non-performing loans held-for-investment, including non-PCD and PCDs: Commercial loans - At December 31, 2025, OFG’s non-performing commercial loans amounted to $87.3 million (67.1% of OFG’s non-performing loans), a 110.1% increase from $41.6 million at December 31, 2024 (50.1% of OFG’s non-performing loans).
OFG’s loan portfolio is comprised of Puerto Rico residential mortgage loans, consumer loans, auto loans, commercial loans secured by real estate, other commercial and industrial loans, and commercial US loans.
These increases were offset by principal paydowns and maturities. OFG’s investment strategy focuses on liquidity and highly liquid securities, considering their investment and the current market environment. OFG’s loan portfolio is comprised of Puerto Rico residential mortgage loans, consumer loans, auto loans, commercial loans secured by real estate, other commercial and industrial loans, and commercial US loans.
In October 2024, OFG announced that its Board of Directors approved a new $50.0 million stock repurchase program, in addition to the stock repurchase program approved in January 2024. The October stock repurchase program is also open-ended. During 2024, OFG repurchased 1,791,414 shares for a total of $70.3 million at an average price of $39.26 per share.
This new, open-ended program is in addition to the $50 million stock repurchase program approved by the Board in October 2024 (collectively, the “Existing Repurchase Programs”). Under the Existing Repurchase Programs, OFG repurchased 2,253,819 shares during 2025 for a total of $91.6 million at an average price of $40.64 per share.
For our discussion and analysis of our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022, see Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” of our 2023 annual report on Form 10-K. 32 RECENT DEVELOPMENTS Capital Actions 2024 Capital Actions In January 2024, OFG announced that its Board of Directors approved the increase of its regular quarterly cash dividend to $0.25 per common share from $0.22 per share, beginning in the quarter ending March 31, 2024.
For our discussion and analysis of our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023, see Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” of our 2024 annual report on Form 10-K.
Performance metrics: Net interest margin of 5.40%, return on average assets of 1.75%, return on average stockholders’ equity of 15.43%, and efficiency ratio of 54.82%. Total Interest Income of $190.2 million compared to $189.0 million in the third quarter of 2024 and $176.2 million in the fourth quarter of 2023.
Total core revenues of $185.4 million compared to $184.0 million in the third quarter of 2025 and $181.9 million in the fourth quarter of 2024. Performance metrics: Net interest margin of 5.12%, return on average assets of 1.81%, return on average tangible common stockholders’ equity of 17.20%, and efficiency ratio of 56.65%.
Income Tax Expense of $2.4 million compared to $14.8 million in the third quarter of 2024 and $21.8 million in the fourth quarter of 2023.
Other Income reflected a loss of $1.1 million compared to a profit of $2.2 million in the third quarter of 2025 and $0.8 million in the fourth quarter of 2024.
Compared to the third quarter of 2024, the fourth quarter of 2024 reflected a decline in government deposits and increases in commercial and retail deposits. Total Borrowings and Brokered Deposits of $557.2 million compared to $346.5 million in the third quarter of 2024 and $363.0 million in the fourth quarter of 2023.
Total Borrowings and Brokered Deposits of $897.3 million compared to $746.4 million in the third quarter of 2025 and $557.2 million in the fourth quarter of 2024.
As of December 31, 2024, borrowings consist of short and long term FHLB advances amounting to $326.0 million and securities sold under agreements to repurchase amounting to $75.2 million.
As of December 31, 2025, borrowings amounted to $456.6 million, consisting of short and long-term FHLB advances and short-term repurchase agreements.
The increases in regulatory capital ratios reflected an increase in retained earnings from net income, net of dividends, CECL transition and stock repurchases, partially offset by an increase in risk-weighted assets of $494.6 million.
The decreases in regulatory capital ratios reflected an increase in risk-weighted assets of $623.6 million, partially offset by an increase in regulatory capital of $69.9 million.
Moreover, the manner in which OFG calculates its tangible common equity, tangible assets and any other related measures may differ from that of other companies reporting measures with similar names. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited.
Moreover, the manner in which OFG calculates its tangible common equity, tangible assets and any other related measures may differ from that of other companies reporting measures with similar names. Tangible common equity to tangible total assets increased from 10.13% to 10.47%, reflecting an increase in retained earnings from net income, net of dividends and stock repurchases.
Cash and due from banks decreased by $159.1 million to $584.5 million, reflecting the effect of loan funding and lower deposit balances. The investment portfolio increased by $33.5 million or 1.2% primarily driven by $1.326 billion new available-for-sale US Treasury and mortgage-backed securities, and $74.7 million in mortgage loan securitization.
Cash and due from banks increased by $451.6 million to $1.0 billion, reflecting higher deposits and new wholesale borrowings during 2025. The investment portfolio increased by $122.9 million or 4.5% primarily driven by $526.7 million new available-for-sale mortgage-backed securities and US Treasury securities, $82.8 million in mortgage loan securitization and $87.5 million in favorable market value adjustments.
The fourth quarter of 2024 primarily reflected $18.1 million for increased loan volume, $7.6 million for a specific reserve related to four U.S. commercial loans, and $2.6 million recovery from the sale of auto and consumer loans.
Total provision for credit losses in the fourth quarter of 2025 primarily reflected $21.8 million for increased loan volume, $5.1 million for a specific reserve on a Puerto Rico telecommunications commercial loan, $2.4 million related to U.S. macroeconomic factors, and $1.7 million in charge-offs from the non-performing loans sale.
As of December 31, 2024, the capital ratios of OFG and the Bank continue to exceed the minimum requirements for being “well-capitalized” under the Basel III capital rules. On January 1, 2020, OFG implemented CECL using the modified retrospective approach, with an impact to capital of $25.5 million, net of its corresponding deferred tax effect.
As of December 31, 2025, the capital ratios of OFG and the Bank continue to exceed the minimum requirements for being “well-capitalized” under the Basel III capital rules.
TABLE 8 - PUERTO RICO GOVERNMENT RELATED LOANS December 31, 2024 Maturity Carrying Value Less than 1 Year 1 to 3 Years More than 3 Years Loans: (In thousands) Municipalities $ 66,439 $ 950 $ 11,246 $ 54,243 At December 31, 2024, OFG has $66.4 million of direct credit exposure to the Puerto Rico government, a $2.1 million decrease from $68.6 million at December 31, 2023. 51 Allowance for Credit Losses OFG measures its ACL based on management’s best estimate of expected credit losses inherent in OFG’s relevant financial assets.
TABLE 8 - PUERTO RICO GOVERNMENT RELATED LOANS December 31, 2025 Maturity Carrying Value Less than 1 Year 1 to 3 Years More than 3 Years Loans: (In thousands) Municipalities $ 77,296 $ — $ 12,298 $ 64,998 At December 31, 2025, OFG has $77.3 million of direct credit exposure to the Puerto Rico government, a $10.9 million increase from $66.4 million at December 31, 2024.
Following are the results of operations and the selected financial information by operating segment for 2024 and 2023. 44 TABLE 4 - BUSINESS SEGMENTS Year Ended December 31, 2024 Banking Wealth Management Treasury Total Eliminations Consolidated Total (In thousands) Interest income $ 619,328 $ 26 $ 134,970 $ 754,324 $ (4,047) $ 750,277 Interest expense (147,661) — (18,223) (165,884) 4,047 (161,837) Net interest income 471,667 26 116,747 588,440 — 588,440 (Provision for) recapture of credit losses (82,436) — 185 (82,251) — (82,251) Non-interest income, net 86,720 36,522 7 123,249 — 123,249 Non-interest expense: Compensation and employee benefits (149,194) (9,527) (989) (159,710) — (159,710) Occupancy, equipment and infrastructure costs (37,407) (721) (121) (38,249) — (38,249) Depreciation and amortization of premises and equipment (20,807) (48) (19) (20,874) — (20,874) Electronic banking charges (42,816) — — (42,816) — (42,816) Information technology expenses (27,394) (187) (1) (27,582) — (27,582) Professional and service fees (15,804) (2,875) (197) (18,876) — (18,876) Loan servicing and clearing expenses (5,937) (1,455) (543) (7,935) — (7,935) Amortization of other intangible assets (1,385) — — (1,385) — (1,385) Intersegment expenses 3,518 (2,121) (1,397) — — — Other (56,173) (1,720) (370) (58,263) — (58,263) Total non-interest expense (353,399) (18,654) (3,637) (375,690) — (375,690) Income before income taxes $ 122,552 $ 17,894 $ 113,302 $ 253,748 $ — $ 253,748 Income tax expense (55,402) (10) (166) (55,578) — (55,578) Net income $ 67,150 $ 17,884 $ 113,136 $ 198,170 $ — $ 198,170 Total assets $ 9,513,074 $ 34,219 $ 3,192,845 $ 12,740,138 $ (1,239,404) $ 11,500,734 45 Year Ended December 31, 2023 Banking Wealth Management Treasury Total Eliminations Consolidated Total (In thousands) Interest income $ 567,809 $ 28 $ 95,477 $ 663,314 $ (14,434) $ 648,880 Interest expense (73,480) — (28,964) (102,444) 14,434 (88,010) Net interest income 494,329 28 66,513 560,870 — 560,870 Provision for credit losses (60,255) — (383) (60,638) — (60,638) Non-interest income, net 97,099 32,433 (1,151) 128,381 — 128,381 Non-interest expenses Compensation and employee benefits (147,241) (7,627) (959) (155,827) — (155,827) Occupancy, equipment and infrastructure costs (38,251) (484) (112) (38,847) — (38,847) Depreciation and amortization of premises and equipment (20,315) (50) (23) (20,388) — (20,388) Electronic banking charges (41,336) — — (41,336) — (41,336) Information technology expenses (26,946) (204) (12) (27,162) — (27,162) Professional and service fees (15,878) (2,646) (240) (18,764) — (18,764) Loan servicing and clearing expenses (5,806) (1,417) (551) (7,774) — (7,774) Amortization of other intangible assets (1,615) — — (1,615) — (1,615) Intersegment expenses 1,641 (1,011) (630) — — — Other (47,100) (2,999) (1,553) (51,652) — (51,652) Total non-interest expense (342,847) (16,438) (4,080) (363,365) — (363,365) Income before income taxes $ 188,326 $ 16,023 $ 60,899 $ 265,248 $ — $ 265,248 Income tax expense (83,242) (34) (100) (83,376) — (83,376) Net income $ 105,084 $ 15,989 $ 60,799 $ 181,872 $ — $ 181,872 Total assets $ 9,154,201 $ 38,261 $ 3,304,204 $ 12,496,666 $ (1,152,213) $ 11,344,453 Eliminations include interest income and expense for a time deposit opened by the Bank in Oriental Overseas, the IBE unit, which operates within the Bank.
The increase in interest income and interest expense from the prior year was mainly as a result of higher interest rate. 43 Year Ended December 31, 2024 Banking Wealth Management Treasury Total Eliminations Consolidated Total (In thousands) Interest income $ 619,328 $ 26 $ 134,970 $ 754,324 $ (4,047) $ 750,277 Interest expense (147,661) — (18,223) (165,884) 4,047 (161,837) Net interest income 471,667 26 116,747 588,440 — 588,440 (Provision for) recapture of credit losses (82,436) — 185 (82,251) — (82,251) Non-interest income, net 86,720 36,522 7 123,249 — 123,249 Non-interest expenses Compensation and employee benefits (149,194) (9,527) (989) (159,710) — (159,710) Occupancy, equipment and infrastructure costs (37,407) (721) (121) (38,249) — (38,249) Depreciation and amortization of premises and equipment (20,807) (48) (19) (20,874) — (20,874) Electronic banking charges (42,816) — — (42,816) — (42,816) Information technology expenses (27,394) (187) (1) (27,582) — (27,582) Professional and service fees (15,804) (2,875) (197) (18,876) — (18,876) Loan servicing and clearing expenses (5,937) (1,455) (543) (7,935) — (7,935) Amortization of other intangible assets (1,385) — — (1,385) — (1,385) Intersegment expenses 3,518 (2,121) (1,397) — — — Other (56,173) (1,720) (370) (58,263) — (58,263) Total non-interest expense (353,399) (18,654) (3,637) (375,690) — (375,690) Income before income taxes $ 122,552 $ 17,894 $ 113,302 $ 253,748 $ — $ 253,748 Income tax expense (55,402) (10) (166) (55,578) — (55,578) Net income $ 67,150 $ 17,884 $ 113,136 $ 198,170 $ — $ 198,170 Total assets $ 9,513,074 $ 34,219 $ 3,192,845 $ 12,740,138 $ (1,239,404) $ 11,500,734 44 Comparison of years ended December 31, 2025 and 2024 Banking OFG’s banking segment net income before taxes decreased by $20.3 million from $122.6 million to $102.2 million, mainly due to: • Increase of $25.0 million in provision for credit losses, mainly due to growth in loan balances, specific reserves and alignment of economic and loss rate model assumptions; • Decrease of $4.5 million in non-interest income, related to reduced interchange fees due to the implementation of Durbin Amendment that took effect for the Bank in July 1, 2024; and • Increase of $12.3 million in non-interest expenses, mainly due to increases of: (i) $4.3 million in electronic banking charges due to increased transaction volumes, (ii) $4.9 million in professional and service fees due to a performance based advisory costs as part of the renegotiation of a cost-saving technology services contract and higher compliance-related expenses, (iii) $1.8 million as a result of higher salaries and benefits, including payroll taxes, and (iv) $2.0 million reduction in foreclosed real estate and other repossessed assets expenses (income), net.

… 114 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

30 edited+6 added−12 removed41 unchanged
Biggest changeNet Interest Income Risk (one-year projection) Instantaneous Changes in Interest Rates Gradual Changes in Interest Rates Amount Change Percent Change Amount Change Percent Change Change in interest rate (Dollars in thousands) + 50 Basis points $ 5,155 0.85 % $ 2,740 0.45 % + 100 Basis points $ 10,347 1.71 % $ 5,490 0.91 % + 200 Basis points $ 20,771 3.44 % $ 11,004 1.82 % - 50 Basis points $ (5,627) (0.93) % $ (2,411) (0.40) % ' -100 Basis points $ (10,456) (1.73) % $ (4,733) (0.78) % ' -200 Basis points $ (22,653) (3.75) % $ (11,348) (1.88) % The scenarios above are both instantaneous shocks and gradual interest rate ramps that assume balance sheet management will mirror the base case.
Biggest changeThe right side of the table presents an analysis of our interest rate risk as measured by the estimated changes in net interest income resulting from parallel gradual interest rates ramps over a 12-month horizon. 66 Net Interest Income Risk (one-year projection) Instantaneous Changes in Interest Rates Gradual Changes in Interest Rates Amount Change Percent Change Amount Change Percent Change Change in interest rate (Dollars in thousands) + 50 Basis points $ 7,585 1.23 % $ 3,543 0.58 % + 100 Basis points $ 15,266 2.48 % $ 7,226 1.17 % + 200 Basis points $ 30,538 4.96 % $ 14,653 2.38 % - 50 Basis points $ (7,056) (1.15) % $ (3,267) (0.53) % ' - 100 Basis points $ (14,320) (2.32) % $ (6,476) (1.05) % ' - 200 Basis points $ (30,353) (4.93) % $ (14,156) (2.30) % The scenarios above are both instantaneous shocks and gradual interest rate ramps that assume balance sheet management will mirror the base case.
Thus, these instruments are guaranteed by mortgages, a U.S. government-sponsored entity, or the full faith and credit of the U.S. government. OFG’s executive Credit Risk Team, composed of its Chief Risk Officer, Chief Credit Officer and other senior executives, has primary responsibility for setting strategies to achieve OFG’s credit risk goals and objectives.
Thus, these instruments are guaranteed by mortgages, a U.S. government-sponsored entity, or the full faith and credit of the U.S. government. 67 OFG’s executive Credit Risk Team, composed of its Chief Risk Officer, Chief Credit Officer and other senior executives, has primary responsibility for setting strategies to achieve OFG’s credit risk goals and objectives.
OFG believes that it will be able to meet its contractual obligations as they come due through the maintenance of adequate cash levels. 70 Commitments to extend credit are agreements to lend to customers as long as there is no violation of any condition established in the contract.
OFG believes that it will be able to meet its contractual obligations as they come due through the maintenance of adequate cash levels. Commitments to extend credit are agreements to lend to customers as long as there is no violation of any condition established in the contract.
As a consequence, OFG’s profitability and financial condition may be adversely affected by an extended economic slowdown, adverse political, fiscal or economic developments in Puerto Rico, or the effects of a natural disaster, all of which could result in a reduction in loan originations, an increase in non-performing assets, an increase in foreclosure losses on mortgage loans, and a reduction in the value of its loans and loan servicing portfolio. 72
As a consequence, OFG’s profitability and financial condition may be adversely affected by an extended economic slowdown, adverse political, fiscal or economic developments in Puerto Rico, or the effects of a natural disaster, all of which could result in a reduction in loan originations, an increase in non-performing assets, an increase in foreclosure losses on mortgage loans, and a reduction in the value of its loans and loan servicing portfolio. 70
Our processes for managing credit risk are designed to be embedded in our risk culture and in our decision-making processes using a systematic approach whereby credit risks and related exposures are identified and assessed, managed through specific policies and processes, measured and evaluated against our risk appetite and credit concentration limits, and reported, along with proactive collection and specific mitigation practices, to management and the Board of Directors through our governance structure.
Our processes for managing credit risk are designed to be embedded in our risk culture and in our decision-making processes using a systematic approach whereby credit risks and related exposures are identified and assessed, managed through specific policies and processes, measured and evaluated against our risk appetite and credit concentration limits, and reported, along with proactive collection and specific mitigation practices, to management and the Board through our governance structure.
We believe that our comprehensive credit policy establishes sound underwriting standards by monitoring and evaluating loan portfolio quality, and by the constant assessment of reserves and loan concentrations. OFG may also encounter risk of default in relation to its securities portfolio. The securities held by OFG are mostly agency mortgage-backed securities and US Treasury securities.
We believe that our comprehensive credit policy establishes sound underwriting standards by monitoring and evaluating loan portfolio quality, and by the constant assessment of reserves and loan concentrations. OFG may also encounter risk of default in relation to its securities portfolio. The securities held by OFG are mostly agency mortgage-backed securities.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Background OFG’s risk management policies are established by its Board of Directors (the “Board”) and implemented by management through the adoption of a risk management program, which is overseen and monitored by the Chief Risk Officer, the Board’s Risk and Compliance Committee, the executive Risk and Compliance Team, the executive Credit Risk Team, and the executive Asset/Liability Team (“ALT”).
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Background OFG’s risk management policies are established by its Board and implemented by management through the adoption of a risk management program, which is overseen and monitored by the Chief Risk Officer, the Board’s Risk and Compliance Committee, the executive Risk and Compliance Team, the executive Credit Risk Team, and the executive Asset/Liability Team (“ALT”).
As discussed in greater detail below, OFG’s primary risk exposures include market, interest rate, credit, liquidity, operational and concentration risks. 67 Market Risk Market risk is the risk that changes in market conditions may adversely impact the value of assets or liabilities, or otherwise negatively impact earnings.
As discussed in greater detail below, OFG’s primary risk exposures include market, interest rate, credit, liquidity, operational and concentration risks. 65 Market Risk Market risk is the risk that changes in market conditions may adversely impact the value of assets or liabilities, or otherwise negatively impact earnings.
OFG strategic management of the balance sheet would be adjusted to accommodate these movements. As with any method of measuring interest rate risk, certain shortcomings are inherent in the methods of analysis presented above.
OFG’s strategic management of the balance sheet would be adjusted to accommodate these movements. As with any method of measuring interest rate risk, certain shortcomings are inherent in the methods of analysis presented above.
In December 2023, OFG received a $1.2 billion deposit in an interest-bearing checking account from an existing long-standing Puerto Rico government client who had an isolated inflow of liquidity resulting in a total of $1.445 billion and $1.618 billion deposits from the Puerto Rico government and its instrumentalities as of December 31, 2024 and 2023, respectively.
In December 2023, OFG received a $1.2 billion deposit in an interest-bearing checking account from an existing long-standing Puerto Rico government client who had an isolated inflow of liquidity resulting in a total of $1.676 billion and $1.445 billion deposits from the Puerto Rico government and its instrumentalities as of December 31, 2025 and 2024, respectively.
The starting point of the projections generally corresponds to the actual values of the balance sheet on the date of the simulations. The following table presents the results of the simulations for the most likely scenarios at December 31, 2024.
The starting point of the projections generally corresponds to the actual values of the balance sheet on the date of the simulations. The following table presents the results of the simulations for the most likely scenarios at December 31, 2025.
To actively monitor the interest rate risk, the Board of Directors created ALT whose principal responsibilities consist in overseeing the management of the Bank’s assets and liabilities to balance its risk exposures.
To actively monitor the interest rate risk, the Board created ALT whose principal responsibilities consist of overseeing the management of the Bank’s assets and liabilities to balance its risk exposures.
To the extent the mortgage loans underlying OFG’s servicing portfolio experience increased delinquencies, OFG would be required to dedicate additional cash resources to comply with its obligation to advance funds. At December 31, 2024 and 2023, OFG maintained other non-credit commitments amounting to $14.6 million and $18.9 million, primarily for the acquisition of other investments.
To the extent the mortgage loans underlying OFG’s servicing portfolio experience increased delinquencies, OFG would be required to dedicate additional cash resources to comply with its obligation to advance funds. At December 31, 2025 and 2024, OFG maintained other non-credit commitments amounting to $17.8 million and $14.6 million, primarily for the acquisition of other investments.
Such amounts advanced are recorded as a receivable by OFG and are expected to be collected from the borrower and/or government agency (FNMA). At December 31, 2024, the outstanding balance of funds advanced by OFG under such mortgage loan servicing agreements was approximately $5.0 million (December 31, 2023 - $4.2 million).
Such amounts advanced are recorded as a receivable by OFG and are expected to be collected from the borrower and/or government-sponsored entity (FNMA). At December 31, 2025, the outstanding balance of funds advanced by OFG under such mortgage loan servicing agreements was approximately $5.0 million (December 31, 2024 - $5.0 million).
While OFG is able to fund its operations through deposits as well as through advances from the FHLB and other alternative sources, OFG’s business may at times need to rely upon other external wholesale funding sources, such as repurchase agreements and brokered deposits. At December 31, 2024, OFG had $156.1 million brokered deposits and $75.2 million in repurchase agreements.
While OFG is able to fund its operations through deposits as well as through advances from the FHLB and other alternative sources, OFG’s business may at times need to rely upon other external wholesale funding sources, such as repurchase agreements and brokered deposits. At December 31, 2025, OFG had $340.0 million brokered deposits and $100.0 million repurchase agreements.
At December 31, 2023, OFG had $162.2 million brokered deposits and no repurchase agreements. In the ordinary course of OFG’s operations, it has entered into certain contractual obligations and has made other commitments to make future payments.
At December 31, 2024, OFG had $156.1 million brokered deposits and $75.0 million repurchase agreements. In the ordinary course of OFG’s operations, it has entered into certain contractual obligations and has made other commitments to make future payments.
Standby letters of credit provided to customers amounted to $25.3 million and $24.0 million at December 31, 2024 and 2023, respectively. Loans sold with recourse at December 31, 2024 and 2023 amounted to $90.5 million and $98.7 million, respectively.
Standby letters of credit provided to customers amounted to $26.1 million and $25.3 million, respectively, at December 31, 2025 and 2024. Loans sold with recourse at December 31, 2025 and 2024 amounted to $83.0 million and $90.5 million, respectively.
Loan commitments, which represent unused lines of credit, increased to $1.360 billion at December 31, 2024 ($157.3 million with maturity of one year or less and $1.203 billion with maturity over one year) compared to $1.256 billion at December 31, 2023 ($111.4 million with maturity of one year or less and $1.144 billion with maturity over one year) as a result of seasonal paydowns of commercial lines of credit.
Loan commitments, which represent unused lines of credit, increased to $1.377 billion at December 31, 2025 ($183.0 million with maturity of one year or less and $1.194 billion with maturity over one year) compared to $1.360 billion at December 31, 2024 ($157.3 million with maturity of one year or less and $1.203 billion with maturity over one year) as a result of commercial lines of credit originations.
We believe that our clients are confident in the resiliency and strong position of the Bank. We also believe that OFG has strong capital and liquidity levels that facilitate holding investment securities until the recovery of their amortized cost basis.
We believe that our market risk management practices have allowed us to effectively manage the market volatility over time and that our clients are confident in the resiliency and strong position of the Bank. We also believe that OFG has strong capital and liquidity levels that facilitate holding investment securities until the recovery of their amortized cost basis.
OFG is subject to extensive United States federal and Puerto Rico regulations, and OFG has established and continues to enhance procedures based on legal and regulatory requirements that are reasonably designed to ensure compliance with all applicable statutory and regulatory requirements.
Under such circumstances, a Crisis Management Team is activated to restore such critical functions within established timeframes. 69 OFG is subject to extensive United States federal and Puerto Rico regulations, and OFG has established and continues to enhance procedures based on legal and regulatory requirements that are reasonably designed to ensure compliance with all applicable statutory and regulatory requirements.
OFG expects to maintain adequate cash levels through profitability, loan and securities repayment and maturity activity and continued deposit gathering activities. Our liquidity risk management practices have allowed us to effectively manage the market volatility in the past, as with the Covid-19 pandemic and the disruption in the banking industry caused by certain high-profile bank failures in 2023.
Our liquidity risk management practices have allowed us to effectively manage the market volatility in the past, as with the Covid-19 pandemic and the disruption in the banking industry caused by certain high-profile bank failures in 2023.
Banking regulations may limit the amount of dividends that may be paid by the Bank. Management believes that these limitations will not impact OFG’s ability to meet its ongoing short-term cash obligations.
In addition, as OFG is a holding company, separate from the Bank, OFG’s primary sources of liquidity are dividends received from the Bank and borrowings from outside sources. Banking regulations may limit the amount of dividends that may be paid by the Bank. Management believes that these limitations will not impact OFG’s ability to meet its ongoing short-term cash obligations.
In executing its responsibilities, ALT considers different methods to enhance profitability while maintaining acceptable levels of interest rate risks by implementing investment, pricing and financial strategies that help manage OFG’s vulnerability to changes in interest rates. 68 On a quarterly basis, OFG performs net interest income simulation analysis on a consolidated basis to estimate the potential change in future earnings from projected changes in interest rates.
In executing its responsibilities, ALT considers different methods to enhance profitability while maintaining acceptable levels of interest rate risks by implementing investment, pricing and financial strategies that help manage OFG’s vulnerability to changes in interest rates.
OFG also has a Business Continuity Plan to address situations where its capacity to perform critical functions is affected. Under such circumstances, a Crisis Management Team is activated to restore such critical functions within established timeframes.
OFG also has a Business Continuity Plan to address situations where its capacity to perform critical functions is affected.
The effects of climate change may further increase the risk of natural disasters in the future and the correlative risk that the physical impact of such events could adversely affect our customers, operations, and business. Moreover, the Puerto Rico government’s fiscal challenges and Puerto Rico’s unique relationship with the United States also complicate any relief efforts after a natural disaster.
The effects of climate change may further increase the risk of natural disasters in the future and the correlative risk that the physical impact of such events could adversely affect our customers, operations, and business.
The principal source of credit risk for OFG is its lending activities. In Puerto Rico, OFG’s principal market, we believe that recent macroeconomic conditions continue to show strength.
Credit Risk Credit risk is the possibility of loss arising from a borrower or counterparty in a credit-related contract failing to perform in accordance with its terms. The principal source of credit risk for OFG is its lending activities. In Puerto Rico, OFG’s principal market, we believe that recent macroeconomic conditions continue to be generally positive.
In the event that such sources of funds are reduced or eliminated and OFG is not able to replace these on a cost-effective basis, OFG may be forced to curtail or cease its loan origination business and treasury activities, which would have a material adverse effect on its operations and financial condition. 71 As of December 31, 2024, OFG had approximately $591.1 million in unrestricted cash and cash equivalents, $1.102 billion in investment securities that are not pledged as collateral, $383.1 million in borrowing capacity at the FHLB and a secured line of credit through the FRB discount window with $2.701 billion in loans pledged (borrowing capacity $2.017 billion).
In the event that such sources of funds are reduced or eliminated and OFG is not able to replace these on a cost-effective basis, OFG may be forced to curtail or cease its loan origination business and treasury activities, which would have a material adverse effect on its operations and financial condition.
With the current economic uncertainty resulting from inflation, geopolitical events, and new mainland economic policies, we continue monitoring our liquidity position, specifically cash on hand to meet customer demands. In addition, as OFG is a holding company, separate from the Bank, OFG’s primary sources of liquidity are dividends received from the Bank and borrowings from outside sources.
Given the current climate of economic uncertainty resulting from inflation, geopolitical events, and new U.S. mainland economic and trading policies, we continuously monitor our liquidity position, specifically cash on hand, with the goal to ensure that we meet customer demands.
Others require us to focus our technology on investments that drive our strategy, namely digital, data analytics, cloud migration, cyber security, and our sales and service capabilities. At December 31, 2024 and 2023, OFG had commitments for capital expenditures in technology amounting to $1.0 million and $7.8 million, respectively, which are expected to be satisfied with OFG’s unrestricted cash.
Others require us to focus our technology on investments that drive our strategy, namely digital, data analytics, cloud migration, cyber security, and our sales and service capabilities.
These simulations are carried out over a five-year time horizon, assuming certain upward and downward interest rate movements, achieved during a twelve-month period. Market scenarios that include instantaneous and parallel interest rate movements as well as other scenarios with gradual interest rate ramps, speed of interest rate changes, and changes in the slope of the yield curve are also modeled.
Market scenarios that include instantaneous and parallel interest rate movements as well as other scenarios with gradual interest rate ramps, speed of interest rate changes, and changes in the slope of the yield curve are also modeled. In addition to the change in interest rates, the results of the analysis could be affected by prepayments, caps, and floors.
Removed
In 2023, the market reacted with volatility as a result of the collapse of three large US regional banks, which became the biggest bank failures since 2008, after they experienced a run on deposits mainly driven by a significant decrease in the value of their investments.
Added
Certain factors, such as the potential impact of changes in market interest rates, inflation trends, trade and supply chain disruptions, a possible recession, global economic policies and conflicts, and other economic factors, including periods of increased global economic and geopolitical uncertainties, could impact market conditions.
Removed
Market reactions to recession concerns and inflationary pressure, combined with aggressive interest rate increases as part of the FRB’s efforts to control inflation during 2022 and 2023, had a significant impact on bond prices, including those guaranteed by the US government or by a US government-sponsored entity.
Added
On a quarterly basis, OFG performs net interest income simulation analysis on a consolidated basis to estimate the potential change in future earnings from projected changes in interest rates. These simulations are carried out over a five-year time horizon, assuming certain upward and downward interest rate movements, achieved during a twelve-month period.
Removed
Factors, as the potential impact of prolonged high market interest rates, inflation trends, new mainland and local economic policies, other economic factors, and global conflicts, all could impact market conditions. We believe that our market risk management practices have allowed us to effectively manage the market volatility over time and remained strong under these conditions.
Added
Moreover, the Puerto Rico government’s fiscal challenges and Puerto Rico’s unique relationship with the United States, coupled with recent changes in the U.S. trade policy and proposed significant reduction in federal spending, also affect the local economy and complicate any relief efforts after a natural disaster.
Removed
After the events triggered by aforementioned bank failures above, our customer deposits base has increased, even though total core deposits at December 31, 2024 were $9.449 billion, down slightly from $9.600 billion at December 31, 2023. The FDIC covers up to $250,000 per account owner by ownership category for retail and commercial deposit accounts.
Added
Deposit volumes as well as the customer deposit base, including Puerto Rico government deposits, have increased. Nevertheless, $500 million from the Puerto Rico government client moved to our wealth management business as an advisory account in January 2026 and the remaining $638 million will reprice on May 15, 2026.
Removed
This coverage extends to both principal and accrued interest while the account balance remains within the limits. At December 31, 2024 and 2023, the aggregate amount of our uninsured deposits was $4.915 billion and $4.885 billion, respectively.
Added
At December 31, 2025 and 2024, OFG had commitments for capital expenditures in technology amounting to $1.6 million and $1.0 million, respectively, which are expected to be satisfied with OFG’s unrestricted cash. 68 OFG expects to maintain adequate cash levels through continued deposit gathering activities, profitability, and loan and securities repayment and maturity activity.
Removed
We have $1.445 billion of deposits from the Puerto Rico government, its instrumentalities and municipalities, which represents 15% of our total deposits as of December 31, 2024, mainly from a $1.2 billion deposit received in December 2023, as we continue to build and strengthen our customer relationships.
Added
As of December 31, 2025, OFG had approximately $1.040 billion in unrestricted cash and cash equivalents, $1.056 billion in investment securities that are not pledged as collateral, $351.1 million in borrowing capacity at the FHLB and a secured line of credit through the FRB discount window with $3.077 billion in loans pledged (borrowing capacity $2.286 billion).
Removed
These public funds are collateralized with securities and commercial loans amounting to $1.507 billion and $1.645 billion at December 31, 2024 and 2023, respectively. The amount of these deposits may fluctuate depending on the financial condition and liquidity of these entities, as well as on our ability to maintain these customer relationships.
Removed
In addition to the change in interest rates, the results of the analysis could be affected by prepayments, caps, and floors.
Removed
The right side of the table presents an analysis of our interest rate risk as measured by the estimated changes in net interest income resulting from parallel gradual interest rates ramps over a 12-month horizon.
Removed
Since 2023, OFG has redeployed its high cash levels and maturing US Treasury positions into longer-term mortgage-backed securities.
Removed
These moves are intended to position OFG’s balance sheet better for the expected lower interest rate environment in the last quarter of 2024 and throughout 2025. 69 Credit Risk Credit risk is the possibility of loss arising from a borrower or counterparty in a credit-related contract failing to perform in accordance with its terms.
Removed
OFG is not relying on this deposit as part its long-term funding management strategies, even though these funds could remain in the Bank for a longer period. Deposit volumes as well as the customer deposit base, excluding the Puerto Rico government deposits, have increased.

Other OFG 10-K year-over-year comparisons