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OFG Bancorp (OFG)
NYSE:OFG
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OFG Bancorp
(NYSE:OFG)
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Rating:75Outperform
Price Target:
$48.00
â–²(12.28% Upside)
OFG Bancorp's strong financial performance and positive earnings call sentiment are the primary drivers of its score. The attractive valuation further supports the stock's potential, despite technical indicators suggesting caution. The company's strategic initiatives and stock buyback program highlight confidence in future growth, although attention to leverage and cash flow is necessary.
Positive Factors
Digital Platform Success
The growth in digital channels enhances customer engagement and operational efficiency, positioning OFG Bancorp well in the evolving digital banking landscape.
Strong Loan Origination
Robust loan origination indicates strong demand and effective lending strategies, contributing to revenue growth and market share expansion.
Stock Buyback Authorization
The buyback program reflects confidence in financial health and capital generation, potentially enhancing shareholder value and earnings per share.
Negative Factors
Rising Leverage
Increased leverage can strain financial flexibility and risk management, potentially impacting long-term stability if not managed carefully.
Declining Cash Flow
Reduced cash flow generation may limit investment capacity and operational flexibility, posing challenges to sustaining growth initiatives.
Loan Yield Decline
A decline in loan yields can compress interest margins, affecting profitability and necessitating adjustments in pricing strategies.
OFG Bancorp (OFG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.96B
Dividend Yield2.64%
Average Volume (3M)219.74K
Price to Earnings (P/E)10.4
Beta (1Y)0.94
Revenue Growth4.15%
EPS Growth4.39%
CountryUS
Employees2,223
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)1.15
Shares Outstanding44,519,176
10 Day Avg. Volume283,434
30 Day Avg. Volume219,740
Financial Highlights & Ratios
PEG Ratio0.96
Price to Book (P/B)1.57
Price to Sales (P/S)2.40
P/FCF Ratio9.36
Enterprise Value/Market Cap0.81
Enterprise Value/Revenue1.87
Enterprise Value/Gross Profit2.72
Enterprise Value/Ebitda6.11
Forecast
1Y Price Target
$49.00Price Target Upside14.62% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
OFG Bancorp Business Overview & Revenue Model
Company DescriptionOFG Bancorp, a financial holding company, provides a range of banking and financial services. It operates through three segments: Banking, Wealth Management, and Treasury. The company offers checking and savings accounts, as well as time deposit products; commercial, consumer, auto, and mortgage lending services; financial planning and insurance services; and corporate and individual trust, and retirement services. It also provides securities brokerage and investment advisory services, including various investment alternatives, such as tax-advantaged fixed income securities, mutual funds, stocks, and bonds to retail and institutional clients; and separately-managed accounts and mutual fund asset allocation programs. In addition, the company engages in the insurance agency and reinsurance businesses; administration and servicing of retirement plans; various treasury-related functions with an investment portfolio consisting of mortgage-backed securities, obligations of U.S. government sponsored agencies, and U.S. Treasury securities and money market instruments; and management and participation in public offerings and private placements of debt and equity securities. Further, it offers money management and investment banking services; and engages in the asset/liability management activities, such as purchases and sales of investment securities, interest rate risk management, derivatives, and borrowings. The company operates through a network of 50 branches in Puerto Rico and 2 branches in USVI. OFG Bancorp was founded in 1964 and is headquartered in San Juan, Puerto Rico.
How the Company Makes MoneyOFG Bancorp generates revenue through several key streams. The primary source of income is net interest income, which comes from the interest earned on loans and other earning assets, minus the interest paid on deposits and borrowed funds. Additionally, the company earns non-interest income from fees and service charges related to deposit accounts, as well as revenue from wealth management and investment services. OFG also engages in mortgage banking and commercial lending, which contribute to its overall profitability. Strategic partnerships with financial institutions and a focus on expanding its digital banking capabilities further enhance its earnings potential. The company benefits from a strong local presence and understanding of the Puerto Rican market, allowing it to effectively cater to its customer base.
OFG Bancorp Earnings Call Summary
Earnings Call Date:Jul 17, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Positive
The earnings call reflected a generally positive sentiment with strong growth in assets, loans, and digital platform engagement. Despite some concerns regarding loan yields and noninterest expenses, the company's strategic initiatives and stock buyback program highlight confidence in future growth.Q2-2025 Updates
Positive Updates
Record Assets and Loans
OFG Bancorp achieved record assets of more than $12 billion and record loans exceeding $8 billion, reflecting strong financial performance.
Earnings and Revenue Growth
Earnings per share increased by 6.5% year-over-year, supported by a 1.5% increase in total core revenue.
Strong Loan Origination
New loan origination reached $784 million, marking a 38% increase from the first quarter and 33% from the previous year.
Digital Platform Success
OFG Bancorp's digital platform saw significant growth, with 4% new net customer growth and increased digital transactions.
Stock Buyback Authorization
A new $100 million stock buyback was authorized, supported by strong capital generation and balance sheet.
Negative Updates
Loan Yield Decline
Loan yields decreased by 8 basis points to 7.91%, indicating some pressure on interest earnings.
Increased Noninterest Expenses
Noninterest expenses rose by $1.4 million, aligning with the expected range but indicating increased operational costs.
Net Interest Margin Contraction
Net interest margin decreased to 5.31% from 5.42%, partly due to increased liquidity to fund future growth.
Company Guidance
In the second quarter of fiscal year 2025, OFG Bancorp reported strong financial performance, with record assets exceeding $12 billion and record loans surpassing $8 billion. The company achieved a 6.5% year-over-year increase in earnings per share, diluted to $1.15, driven by a 1.5% rise in total core revenue. The company maintained a high return on average assets and equity, supported by robust loan origination and core deposit flows. A new $100 million stock buyback authorization was announced, reflecting strong capital generation. Digital-first strategies led to substantial growth in digital channels, with 70% of retail loan payments made digitally, alongside a 4% net customer growth. Core revenues reached $182 million, with total interest income at $194 million and total interest expense at $42 million. The company sustained a net interest margin of 5.31%, and credit quality remained stable with net charge-offs totaling $13 million, down significantly from the previous quarter. The tangible book value per share was $27.67, with an efficiency ratio of 52%, a return on average assets of 1.73%, and a return on average tangible common equity of 17%.OFG Bancorp Financial Statement Overview
Summary
OFG Bancorp demonstrates strong financial performance with robust profit margins, stable revenue growth, and effective cost management. The balance sheet is well-managed with low leverage, and cash flow generation is strong. However, liquidity levels require attention, and there is a slight decrease in EBIT and net income in the TTM.Income Statement
OFG Bancorp's income statement shows strong profitability with a consistent increase in total revenue, achieving a notable revenue growth from 2024 to TTM. The net profit margin is robust, reflecting effective cost management, and EBIT as well as EBITDA margins are healthy, demonstrating operational efficiency. However, the slight decrease in EBIT and net income in TTM compared to the previous annual results indicates potential pressure on future earnings.78
Positive
Balance Sheet
The balance sheet of OFG Bancorp is characterized by a solid equity base, with a commendable equity ratio reflecting financial stability. The debt-to-equity ratio is low, indicating conservative leverage practices. Return on equity is strong, showcasing effective use of equity capital to generate profits. However, the decrease in cash and short-term investments suggests a potential need to monitor liquidity closely.75
Positive
Cash Flow
OFG Bancorp's cash flow statement is positive with a strong operating cash flow to net income ratio, indicating efficient cash generation relative to earnings. Free cash flow has shown growth, providing flexibility for investments or debt reduction. However, the volatility in investing cash flows suggests significant capital expenditures or investments that need careful management.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 846.53M | 822.77M | 728.15M | 598.51M | 540.58M | 541.21M |
| Gross Profit | 582.87M | 578.69M | 579.50M | 540.89M | 497.03M | 383.62M |
| EBITDA | 259.45M | 280.54M | 291.82M | 268.53M | 238.53M | 118.58M |
| Net Income | 194.72M | 198.17M | 181.87M | 166.24M | 146.15M | 74.33M |
Balance Sheet | ||||||
| Total Assets | 12.23B | 11.50B | 11.34B | 9.82B | 9.90B | 9.83B |
| Cash, Cash Equivalents and Short-Term Investments | 3.26B | 2.93B | 2.85B | 1.96B | 2.53B | 2.60B |
| Total Debt | 530.81M | 422.56M | 224.80M | 54.40M | 95.07M | 134.92M |
| Total Liabilities | 10.90B | 10.25B | 10.15B | 8.78B | 8.83B | 8.74B |
| Stockholders Equity | 1.33B | 1.25B | 1.19B | 1.04B | 1.07B | 1.09B |
Cash Flow | ||||||
| Free Cash Flow | 176.12M | 210.79M | 277.80M | 133.46M | 76.99M | 19.70M |
| Operating Cash Flow | 215.43M | 252.50M | 295.66M | 164.46M | 100.04M | 34.96M |
| Investing Cash Flow | -799.69M | -335.98M | -1.40B | -1.51B | -182.93M | 757.50M |
| Financing Cash Flow | 695.63M | -73.56M | 1.31B | -124.70M | -49.04M | 510.36M |
OFG Bancorp Technical Analysis
Negative
42.75
Price Trends
43.35
Negative
42.75
Negative
41.42
Positive
Market Momentum
<0.01
Positive
40.23
Neutral
12.86
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OFG, the sentiment is Negative. The current price of 42.75 is below the 20-day moving average (MA) of 43.86, below the 50-day MA of 43.35, and above the 200-day MA of 41.42, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 40.23 is Neutral, neither overbought nor oversold. The STOCH value of 12.86 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OFG.
OFG Bancorp Risk Analysis
OFG Bancorp disclosed 26 risk factors in its most recent earnings report. OFG Bancorp reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
OFG Bancorp Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $1.76B | 13.04 | 1.10% | 3.15% | 4.57% | -15.68% | |
75 Outperform | $1.96B | 10.35 | 15.20% | 2.64% | 4.15% | 4.39% | |
74 Outperform | $1.78B | 14.93 | 16.03% | 2.58% | 8.28% | 6.96% | |
73 Outperform | $1.96B | 15.44 | 11.40% | 0.91% | 8.38% | 26.81% | |
72 Outperform | $1.80B | 11.06 | 8.74% | 6.50% | 14.86% | 40.09% | |
70 Outperform | $1.81B | 15.92 | 7.03% | 3.21% | -1.28% | 32.40% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
OFG
OFG Bancorp
42.75
1.49
3.61%
CHCO
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122.51
12.13
10.99%
FCF
First Commonwealth
16.85
1.10
6.98%
NWBI
Northwest Bancshares
12.31
0.23
1.90%
VBTX
Veritex
33.07
9.11
38.02%
NIC
Nicolet Bankshares
131.79
41.74
46.35%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.