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OFG Bancorp (OFG)
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OFG Bancorp (OFG) AI Stock Analysis

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OFG

OFG Bancorp

(NYSE:OFG)

Rating:78Outperform
Price Target:
$49.00
▲(14.62% Upside)
OFG Bancorp's strong financial performance and positive earnings call sentiment are the primary drivers of its stock score. The company's solid profit margins, revenue growth, and strategic initiatives, such as the stock buyback, bolster investor confidence. Technical analysis and valuation are supportive but less impactful. Concerns about liquidity and operational costs are noted but do not significantly detract from the overall positive outlook.
Positive Factors
Balance Sheet
Balance sheet trends were highlighted by continued loan growth, increased MBS holdings, and deposit mix shift.
Operating Trends
Stock reaction seems over-blown, as operating trends were roughly in line, with much of the miss tied to rate related MSR volatility.
Negative Factors
Credit Trends
Credit trends deteriorated more than anticipated, with NCOs increasing 11bps Q/Q to 90bps of avg. loans, mainly driven by higher auto NCOs.
Fees
Fees declined $5.6MM Q/Q hit by lower interchange fees, impacted by Durbin amendment, and lower MSR valuation.

OFG Bancorp (OFG) vs. SPDR S&P 500 ETF (SPY)

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: -2.89%|
Next Earnings Date:Oct 15, 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 exhibits strong financial performance with solid profitability and revenue growth. The income statement shows robust net profit margins, although there is a slight pressure on future earnings due to decreasing EBIT and net income in the TTM. The balance sheet is stable with low leverage, and cash flow generation remains strong despite some volatility in investing cash flows.
Income Statement
85
Very Positive
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.
Balance Sheet
78
Positive
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.
Cash Flow
80
Positive
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue822.77M728.15M598.51M540.58M541.21M
Gross Profit578.69M579.50M540.89M497.03M383.62M
EBITDA280.54M291.82M268.53M238.53M118.58M
Net Income198.17M181.87M166.24M146.15M74.33M
Balance Sheet
Total Assets11.50B11.34B9.82B9.90B9.83B
Cash, Cash Equivalents and Short-Term Investments2.93B2.85B1.96B2.53B2.60B
Total Debt422.56M224.80M54.40M95.07M134.92M
Total Liabilities10.25B10.15B8.78B8.83B8.74B
Stockholders Equity1.25B1.19B1.04B1.07B1.09B
Cash Flow
Free Cash Flow210.79M277.80M133.46M76.99M19.70M
Operating Cash Flow252.50M295.66M164.46M100.04M34.96M
Investing Cash Flow-335.98M-1.40B-1.51B-182.93M757.50M
Financing Cash Flow-73.56M1.31B-124.70M-49.04M510.36M

OFG Bancorp Technical Analysis

Technical Analysis Sentiment
Positive
Last Price42.75
Price Trends
50DMA
42.97
Negative
100DMA
41.13
Positive
200DMA
41.57
Positive
Market Momentum
MACD
-0.07
Negative
RSI
50.17
Neutral
STOCH
69.01
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OFG, the sentiment is Positive. The current price of 42.75 is above the 20-day moving average (MA) of 42.73, below the 50-day MA of 42.97, and above the 200-day MA of 41.57, indicating a neutral trend. The MACD of -0.07 indicates Negative momentum. The RSI at 50.17 is Neutral, neither overbought nor oversold. The STOCH value of 69.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$1.91B10.1315.20%2.56%4.15%4.39%
78
Outperform
$1.93B14.9211.89%0.89%8.38%26.81%
75
Outperform
$1.80B9.9822.79%0.26%3.78%14.13%
74
Outperform
$1.79B14.8716.70%2.56%8.28%6.96%
74
Outperform
$2.16B22.206.53%1.70%-2.04%-14.82%
69
Neutral
$1.48B7.1212.43%1.17%3.49%-30.76%
64
Neutral
£5.46B9.229.73%4.98%9.83%-15.31%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
OFG
OFG Bancorp
42.75
-1.05
-2.40%
CHCO
City Holding Company
123.94
7.94
6.84%
FBNC
First Bancorp
51.90
9.85
23.42%
CASH
Pathward Financial
75.16
8.31
12.43%
NIC
Nicolet Bankshares
129.73
32.23
33.06%
MBIN
Merchants Bancorp
31.69
-14.20
-30.94%

OFG Bancorp Corporate Events

Executive/Board ChangesShareholder Meetings
OFG Bancorp Elects Board and Approves Key Measures
Positive
May 7, 2025

At the annual meeting of shareholders held on April 30, 2025, OFG Bancorp successfully elected its board of directors for a one-year term, approved executive compensation on an advisory basis, and ratified the selection of KPMG LLP as its independent registered public accounting firm for the year ending December 31, 2025. These decisions reflect shareholder support for the company’s leadership and strategic direction, potentially strengthening its position in the financial services industry and providing stability for stakeholders.

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.Date of analysis: Aug 19, 2025