OFG Bancorp posts solid Q3 gains, boosts AI strategy
OFG Bancorp, the parent company of Oriental Bank, reported higher earnings and solid loan and deposit growth for the third quarter of 2025, citing continued progress in its digital transformation strategy.
The San Juan-based financial institution posted earnings per diluted share of $1.16, up from $1 a year earlier, a 16% year-over-year increase.
“Our Digital First strategy is making significant strides, expanding our positioning as leaders in banking innovation in Puerto Rico,” said José Rafael Fernández, CEO of OFG Bancorp and Oriental Bank. “The broad acceptance of our flagship mass-market Libre and mass affluent Elite accounts has driven customer acquisition and retention.”
Total core revenues rose to $184 million, compared to $174.1 million in the same quarter of 2024. Net interest margin stood at 5.24%, while return on average assets reached 1.69% and return on average tangible common equity was 16.39%. The bank’s efficiency ratio improved to 52.48%, reflecting expense control despite ongoing investment in technology and process improvement.
Fernández said Oriental is expanding its use of artificial intelligence to improve efficiency and customer experience.
“We are enhancing our efforts with AI-driven predictive customer insights,” he said. “Customers now receive tailored insights based on cash flows and payment habits, helping them monitor budgets and access tools to improve their finances from their mobile phones or online.”
He added that the bank plans to extend AI-driven tools beyond retail banking.
“Between 2026 and 2027, we will bring solutions that help our commercial clients leverage artificial intelligence,” Fernández said. “It gives businesses access to advanced analytics that can help them grow and manage their operations more effectively.”
During the quarter, Oriental also launched internal AI projects aimed at improving productivity and responsiveness across business lines. Fernández said the focus on data-driven innovation continues to strengthen the bank’s competitive position.
Total interest income rose to $200.1 million, up from $189 million a year earlier, driven by higher loan balances and investment yields. Total interest expense increased to $45.4 million, reflecting higher funding costs in a sustained high-rate environment. Net charge-offs remained at 1% of average loans, with credit quality stable compared to recent quarters.
Loans held for investment totaled $8.12 billion, up nearly 5% year-over-year, supported by growth in commercial and consumer segments. New loan production reached $623.9 million, a 9% increase from 2024 despite a slowdown in auto lending, while customer deposits rose to $9.82 billion, up $286.5 million year-over-year, led by growth in savings accounts.
Fernández said the company’s financial results reflect operational discipline and consistent strategy execution.
“Performance and credit metrics remained strong, and we repurchased $20.4 million of common shares,” he said. “This reflects our confidence in our strategy and our commitment to delivering long-term value for shareholders.”
He also cited broader economic trends supporting the financial sector.
“Puerto Rico’s economy continued to perform well during the third quarter, with a summer tourism surge, solid consumer and business liquidity and new multimillion-dollar onshoring investments,” Fernández said. “All these are exciting developments that reinforce our confidence in the island’s future.”
OFG’s capital position remained strong, with a Common Equity Tier 1 ratio of 14.13% and a tangible common equity ratio of 10.55%. Tangible book value per share increased to $28.92, up from $26.15 a year ago.
“We are not just adapting to change — we are leading it,” Fernández said. “Our strategy combines digital innovation with human connection, ensuring we continue to add value for our customers, communities and shareholders.”
