OFG Bancorp downgraded to Equal Weight from Overweight at Wells Fargo

Wells Fargo downgraded OFG Bancorp (OFG) to Equal Weight from Overweight with a price target of $42, down from $48. The firm expects net interest margin to decline for the next five quarters, off the Q4 2024 5.40% level, as OFG’s current 1.64% cost of funding is unlikely to move lower along with Fed cuts. OFG doesn’t have the same level of public fund exposure as the other two PR banks, and the exposure they have is at-risk of exiting at some point in 2025, making for a smaller balance sheet, Wells argues.