OFG earnings increased year over year in the third quarter of 2026 but declined from the preceding quarter as core revenue weakened and credit-loss provisions rose. The Oriental Bank parent reported diluted earnings of $1.33 per share for the quarter ended September 30, compared with $1.16 a year earlier and $1.39 in the second quarter. Results were released on October 21, 2026.
Key Takeaways
- Diluted earnings per share rose 14.7% year over year, while core revenue increased 1.0% to $185.7 million.
- Lower interest income and higher funding costs reduced net interest margin from the second quarter.
- Loans grew, while charge-off and nonperforming-loan rates improved despite a seasonal rise in delinquencies.
Table of Contents
- OFG earnings improve annually but retreat from second quarter
- Lower expenses offset part of the revenue pressure
- Loan growth accompanies lower customer deposits
- Conclusion
OFG earnings improve annually but retreat from second quarter
OFG’s third-quarter results announcement showed net income available to common shareholders of $56.6 million, up from $51.8 million a year earlier but below $58.8 million in the second quarter. The annual increase in diluted EPS also reflected a lower average diluted share count.
Core revenue reached $185.7 million, compared with $184.0 million a year earlier and $190.3 million in the preceding quarter. Net interest income fell to $153.6 million from $157.3 million sequentially, while banking and financial service revenue declined to $32.2 million from $33.0 million.
The company attributed the sequential decline in interest income primarily to the absence of $4.1 million generated by three commercial loans paid in full during the second quarter. Interest expense increased as average deposit balances and their cost rose. Net interest margin narrowed to 5.23% from 5.45%.
| Item | Details |
|---|---|
| Return on average assets | 1.86% in Q3 2026 |
| Efficiency ratio | 51.83%, compared with 54.04% in Q2 2026 |
| Common equity Tier 1 capital ratio | 14.10% at September 30, compared with 14.07% at June 30 |
| Tangible book value per share | $29.66, down from $31.12 in Q2, primarily because of the change in accumulated other comprehensive loss |
Lower expenses offset part of the revenue pressure
Non-interest expense fell to $96.3 million from $102.8 million in the second quarter, primarily because $5.8 million of business-related operational charges did not recur. Pre-provision net revenue consequently increased to $89.9 million from $87.5 million despite lower core revenue.
Credit-loss provisions rose to $18.1 million from $13.0 million sequentially, although they remained below the year-earlier $28.3 million. OFG said the third-quarter provision primarily reflected increased loan volume and a seasonal adjustment for auto delinquencies.
Credit indicators moved in different directions. Early and total delinquency rates increased sequentially to 2.65% and 3.91%, respectively, which the company attributed to seasonal trends. Both were lower than a year earlier, while net charge-off and nonperforming-loan rates improved against both comparison periods.
Loan growth accompanies lower customer deposits
Loans held for investment ended September at $8.45 billion, up $150.9 million, or 1.8%, from June and 4.1% from a year earlier. Growth in Puerto Rico commercial and consumer loans more than offset declines in other categories.
New loan production nevertheless slowed to $693.8 million from $755.0 million in the second quarter. Customer deposits declined $79.9 million to $9.66 billion, while borrowings and brokered deposits increased $131.1 million to $926.6 million for liquidity management.
Chief Executive Officer José Rafael Fernández highlighted commercial lending, expense discipline and $13.5 million of common-share repurchases. Cash declined during the quarter, primarily reflecting mortgage-backed securities purchases and loan growth.
Conclusion
OFG’s annual earnings improvement contrasted with sequential pressure on revenue and funding costs. The next reporting document to watch is its September 30, 2026 Form 10-Q, which the company said investors should consult once filed; the accompanying financial supplement is preliminary.
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